Avast is the global leader in the consumer cybersecurity market. Our proven strategy, including our freemium business model and diversified product portfolio with exposure to highly profitable segments, provides multiple avenues for long-term growth.
Scalable business model with significant network effects
Through our freemium distribution model, we have amassed the industry’s largest consumer user base, with over 435 million active monthly users of our products worldwide.
This user base is monetized both directly and indirectly, and there is significant room for growth in both areas. Direct monetization includes the conversion of free users into paying customers and increasing the average revenue per customer by cross-selling additional security, privacy, and device utility products to existing users. This is achieved through our sophisticated machine-learning monetization engine.
The sheer scale of our user base provides additional opportunities to monetize the platform, while also creating high barriers to entry for competitors. Through partnerships with advertisers and search providers, and third party software distribution agreements, we leverage the scale of our user base to drive additional revenues.
Well-positioned in multiple market segments that are poised for growth
Online consumer security is a large and growing market segment and at the core of what we do. We have continued to add products and services in adjacent and complementary markets, leveraging our security expertise to enter the SMB security market, the Smart Home market and to provide Family Safety services through partnerships with mobile carriers.
- Consumer growth will be driven by the continuation of gaining market share through the strength of our monetization engine and depth of our user base, supported by our number one brand position.
- IoT / Smart Home growth will be driven by the market trend towards more connected devices in the home, supported by our ability to directly distribute to our vast consumer user base.
- Mobile growth will be driven by the expansion globally of our carrier program supported by our technical ability to customize product offerings with each carrier.
- SMB growth will be driven through the expansion of our Cloud SAAS service offering through our extensive partnership network.
Continuous investment in innovation to maintain competitive advantage
Continuous innovation and development of our technology ensures that we maintain state-of-the-art threat detection across all user segments and products. Investment in new product research and development gives us the ability to continually drive up monetization of existing users and attract new ones.
More than 50% of our full-time employees are working in Research & Development (R&D), with dedicated teams in machine learning, artificial intelligence, and data analytics.
Successful and proven M&A strategy
We have a focused approach to M&A in order to maximize shareholder returns. Past acquisitions have extended our geographic markets, increased our user base, and brought in intellectual property that extends our core capabilities. The largest acquisition of the portfolio was completed in 2016, when we acquired AVG Technologies.
Strategic long-term goals fully aligned with management team’s KPIs
Our KPIs directly align to the long-term growth aspirations of the company and desired returns for shareholders. Our KPIs are:
- Financial: Adjusted Billings, Revenue, EBITDA, Cash EBITDA, Net Income, and Unlevered Free Cash Flow
- Operational: Number of Customers2, Average Revenue per Customer (ARPC), and Average Products per Customer (APPC)
1 BRIC-plus defined as Brazil, Russia, India, China, Mexico, Turkey. Continuous investment in innovation to maintain competitive advantage
2 Customers defined as users who have at least one valid paid Consumer Direct Desktop subscription (or license) at the end of the relevant period