Gen Digital, Inc. Q1 FY2025 earnings call

• Vincent noted the company started fiscal '25 on a good note with operating KPIs supporting long-term aspirations, including 4% growth in cyber safety bookings, record direct customer count of 39.3 million, ARPU growth, and retention at 78%. - He highlighted the dynamic threat landscape and the company's mission to protect personal data, mentioning product launches like Norton Ultra VPN, which offers comprehensive online protection. - Natalie discussed Q1 results, noting solid execution with financials at midpoint of guidance, growth in customer base, ARPU, and partner revenue. She also talked about balance sheet, cash flow, and capital allocation, including share repurchases and dividend payments.

Q1 bookings were $913 million, up 3% in USD and 4% in constant currency. Cyber Safety bookings grew 4% year-over-year in constant currency. Total Q1 revenue was $965 million, up 2% in USD and 3% in constant currency. Cyber safety revenue grew 4% year-over-year in constant currency. Direct revenue was $850 million, up 3% in constant currency. Customer base expanded to 39.3 million, up 1.1 million year-over-year. Monthly direct ARPU was USD 7.23, with FX headwinds. Partner revenue was $101 million, up 4% year-over-year and 6% in constant currency. Legacy business lines contributed $14 million, down from prior year.

• Q2 non-GAAP revenue is expected to be in the range of $965 million to $975 million, translating to 3% to 4% growth in cyber safety, and Q2 non-GAAP EPS is expected to be in the range of $0.53 to $0.55, up 13% to 17%. - For fiscal year 2025, full year revenue is reaffirmed in the range of $3.89 billion to $3.93 billion, with 3% to 4% growth in cyber safety in constant currency supported by 3% to 5% cyber safety bookings growth. Non-GAAP EPS is expected to be in the range of $2.17 to $2.23 per share, representing an annual increase of 12% to 15% in constant currency, with continued FX headwinds from the Japanese yen.

Q: Dan Bergstrom asked about retention initiatives and cross-sell/upsell following merger.

A: Vincent said retention rate was around 75% when merged, targeted 80%, with progress made using new Gen stack and customer journey breakdown.

Q: Peter Levine asked about guidance assumptions and Gen Stack update.

A: Natalie said guidance aligned with 5 to 5 strategic framework, Vincent said Gen stack rollout started, on track with positive results.

Q: Tomer Zilberman asked about customer adds and cross-sell performance.

A: Natalie said balance across metrics, focused on marketing investment for customer growth.

Q: Saket Kalia asked about partner business pipeline and gross margin.

A: Vincent said healthy partner business funnel, Natalie said gross margin stable with focus on profitable marketing investment.

Q: Hamza Fodderwala's team asked about Gen AI and net adds by geography.

A: Vincent talked about Gen AI use in detecting scams, Natalie said net adds broad-based with focus on acquisition and retention.