NortonLifeLock (NLOK) reported after the closing bell Tuesday slightly better-than-expected results for its fiscal 2022 first-quarter earnings. Revenue of $691 million (+13% YoY) edged estimates of $685 million, and adjusted earnings per share of $0.42 (+35% YoY) exceeded estimates by one penny.

"Our Cyber Safety platform is designed to evolve to meet the needs of a consumer's digital life," CEO Vincent Pilette said in the release. "This quarter reflects our strong execution and accelerating pace of innovation as we strengthen our foundation for long-term sustainable growth and bring our Cyber Safety offering to even more people."

"Our team continues to identify and unlock additional opportunities to accelerate our long-term growth, and we will continue to invest in product innovation, execute our international go-to-market strategy and improve our customer experience," CFO Natalie Derse added in the release. "Once again we delivered on our commitments. In Q1 we accelerated revenue growth and profit, and we drove another consecutive quarter of increased customer count."

Taking a look at some operating metrics, adjusted operating margins of 51.2% represented expansion of 410 basis points YoY and was higher than estimates of 50.37%. The result was also slightly above management's long-term 50% target rate. Operating cash flow in the quarter was $258 million, topping estimates of $205 million, while free cash flow was $257 million, up from $169 million in the quarter last year. Reported billings in the quarter was $652 million, representing growth of 9% YoY.

What about some of the other key reporting metrics? As for NortonLifeLock's customer relationships, the company ended the quarter with roughly 80 million users. The direct-customer count was approximately 23.1 million customers. That's up about 150,000 from the prior quarter (we think this may be viewed as weaker than expected, Barclays was calling for about 275,000 net adds) and 2.6 million YoY. And by the way, that result marks the seventh consecutive quarter of NortonLifeLock growing its direct customer count and it overcomes what was typically a seasonally down quarter.

Looking ahead, what is interesting about NortonLifeLock's go-to market strategy is that now they are open to signing deals with PC original equipment manufacturers. Previously, this was a business model the company got out of due to unfavorable economics, but Pilette confirmed on the call today that they are willing to strike partnerships if they make financial sense. The relationship being discussed is the one the company announced with Lenovo last Friday in the press release here.

In addition to the direct customer growth, NortonLifeLock saw a slight increase to its direct average revenue per user (ARPU). The quarterly result of $8.84 represented an increase of $0.04 on a sequential basis. APRU is down on a YoY basis, but it is important to remember that the additional of Avira was a bit dilutive to the number.

Importantly, the customer retention rate held steady at 85% as the company drove "new initiatives to further improve retention overall and within specific products and customer cohorts."

The company's consistent retention rate suggests they are holding onto the new subscribers that first started with the company during the COVID lockdowns of this quarter one year ago. It's also a sign that the company is doing well managing churn from the Avira acquisition.

Looking at the balance sheet, the company finished the quarter with $1.2 billion-plus of cash on hand. This figure does not include the cash proceeds from the sale of its Mountain View property which closed in the middle of the month. The cash proceeds from that sale is approximately $358 million.

Turning to fiscal 2022's second-quarter guidance, management expects revenue in the range of $690 million to $700 million, implying 10% to 12% year-over-year growth. This outlook at a midpoint of $695 million is a touch above estimates of $690 million. On earnings, management expects adjusted earnings per share in the range of $0.41 to $0.43, and this $0.42 midpoint matched the consensus forecast.

For the full fiscal year, management reiterated it expects adjusted revenue growth in the range of 8% to 10% with adjusted EPS in the range of $1.65 to $1.75 (about in line with the $1.71 consensus).

The company has expressed interest in buying the European-based consumer cybersecurity company Avast (AVASF) , but management declined to comment on any questions related to specific M&A during the call. Earlier this month, the company had confirmed in a press release that it is in advanced talks to acquire Avast.

Overall, this was a solid quarter here that we would consider to be very inline with expectations. But the real question around NLOK now centers on whether it will acquire Avast. Until more clarity is known about this potential deal, we think the stock could be stuck in limbo.

The good thing is that NortonLifeLock has until Aug. 11 to either announce a firm intention to make an offer for Avast or that it won't. So we should know more about management's plans at some point in the next two weeks. As a reminder, we think the consumer cybersecurity industry is ripe for consolidation, making a deal at the right price with the right terms a very intriguing one. Such a deal would go a long way in helping NLOK achieve its goal of $3 in earnings power. You can get our full thoughts on NortonLifeLock's potential acquisition in our Alert here.

Action AlertsPLUS, which Cramer co-manages as a charitable trust, is long NLOK.