Gen Digital, Inc. Q4 FY2025 earnings call

• Fiscal 2025 was transformative with record total bookings of $4 billion (up 4% year-over-year), revenue of $3.935 billion (up 4% in USD and constant currency), record non-GAAP operating margin of 58.4%, and non-GAAP EPS of $2.22 (up 15% year-over-year).
• Strong innovation in AI-driven threat detection, with launches like Genie Scam Protection in Northern Cyber Safety products and enhancements to security engines.
• Expanded geographic and channel reach, with identity and privacy products introduced into 15 new markets, partner program doubled down on, and direct customer count grew by 1.3 million to over 40 million.
• Acquired MoneyLion, which expands TAM, accelerates entry into financial wellness, and enables addressing new consumer needs. Integration of MoneyLion is underway with focus on profitable growth and operational synergies.

The company has two segments: Cyber Safety Platform and Trust-Based Solutions. For the Cyber Safety Platform segment, in fiscal 2025, it had broad-based growth. Q4 bookings were $1.08 billion, up 5% in constant currency. Total Q4 revenue exceeded $1 billion at $1.01 billion, up 5% in USD and constant currency. Direct revenue was $877 million, up 4% in constant currency. The Cyber Safety Platform segment has a mid-single digit growth potential and approximately 60% non-GAAP operating margin. For the Trust-Based Solutions segment, fiscal 2025 saw identity and financial wellness offerings grow. Identity products were introduced into 15 new markets with encouraging early results, and the identity category grew double digits internationally. The acquisition of MoneyLion closed, expanding the total addressable market (TAM) and accelerating entry into the financial wellness market. This segment has a high single-digit revenue growth potential and a non-GAAP operating margin target in excess of 30% as it scales up financial wellness.

• Fiscal 2026 revenue is guided to be between $4.7 billion and $4.8 billion, representing 6% to 8% pro forma growth.
• Non-GAAP EPS for fiscal 2026 is expected to be in the range of $2.46 to $2.54 per share, representing double-digit growth of 12% to 15% for the year.
• Q1 fiscal 2026 non-GAAP revenue is expected to be in the range of $1.18 billion to $1.21 billion, translating to approximately 5% to 7% pro forma year-over-year growth.
• Q1 fiscal 2026 non-GAAP EPS is expected to be in the range of $0.59 to $0.61, representing double-digit growth of 12% to 15% in constant currency.

• Dynamic threat landscape with AI-powered threats becoming increasingly sophisticated and widespread, including scam websites, voice cloning, deepfakes, and ransomware attacks.
• Macroeconomic uncertainty could potentially impact the business, although the cyber safety business model with high subscription and auto-renewal is resilient but not immune.
• Potential impact on MoneyLion in a weaker macro environment, though the offering fits in well during tight economic times as people need better financial decisions.

Q: Congrats on those solid results. I really like the way you segmented the business between cyber safety and the trust-based solutions. Certainly makes a lot of sense putting that LifeLock in the trust-based segment. So I guess my question is, my first one would be on guidance. It looks roughly like your guidance for fiscal 26, as soon as the MoneyLion growth can kind of stay in that 29% to 30% range that they delivered this last fiscal year. How much visibility do you have in that segment relative to your cyber safety platform?

A: Vincent Pilette responded that the cyber safety all-in before MoneyLion line has mid-single-digit growth potential, with Q4 exiting at 5%. When combining MoneyLion, which grew at around 24%-25% in the last calendar year, there are shifts like cross-selling into the install base and transforming to a subscription business, resulting in the 6%-8% pro forma guidance.

Q: Thanks for taking my questions here and congrats on closing MoneyLion. Vincent, for sure. Vincent, maybe for you. MoneyLion, and you touched on this in your prepared remarks, MoneyLion really brings a big network of potential customers to cross sell to. And maybe one question around that is, how does that network maybe change the type of potential subscribers that you can go after? Does that make sense?

A: Vincent Pilette stated that the cyber safety platform is a foundation, and following consumer demands, they extend into identity protection, digital reputation, and financial wellness. MoneyLion's architecture is used to embed financial wellness features into solutions, targeting existing customers who have asked for more PFM and marketplace features, and moving towards a full spectrum of cyber safety and financial wellness offerings.

Q: Hi guys. Appreciate the comment earlier that you said that the business remains resilient despite some macro uncertainty. But I wanted to ask as you look at the remainder of the year, especially in the second half of the calendar year where the tariff pause kind of goes away, are you seeing or what I should say like this, what signs of demand are you seeing that gives you confidence that the business remains durable? And maybe the second part to that question, as we think about MoneyLion, is there any concerns that that could be more macro sensitive versus other parts of your business?

A: Vincent Pilette said the business model with high subscription and auto-renewal is extremely resilient, with demand for cyber safety products remaining as the threat landscape is active. MoneyLion's offering fits in during tight economic times as people need better financial decisions. Natalie Derse supplemented that they keep the customer at the center, using products to understand customer needs and navigate macro factors.

Q: And again, congrats on a strong quarter and closing the acquisition. A nice quarter of subscriber ads, and we've gotten a couple of questions from investors around Google AI overviews might impact your business. I'd love to hear about how you're thinking about this potentially impacting your SEO lead Gen strategy and any assumptions you're making around click-through rates or customer acquisition costs or anything on that side of the lead Gen.

A: Vincent Pilette mentioned the company has diversified reach to market, with no immediate change seen from AI, and it's about contextual marketing, staying in touch with market moves and seeing it as an opportunity.

Q: Hey, it's Dan Bergstrom for Matt Hedberg. Thanks for taking our questions. Congrats on the MoneyLion close. I guess maybe on those two new segments, sounds like we're going to get bookings and operating margins. Are there any other KPIs for those trust-based solutions that we should be thinking about? Anything that maybe MoneyLion brings in that was either maybe disclosed historically or might make sense to disclose from time-to-time?

A: Vincent Pilette said they are refining KPIs for trust-based solutions and will share more at Q1 results in late July/early August, ensuring investors understand how KPIs support the business. Natalie Derse supplemented on US growth, noting broad-based growth across product lines and global markets, with US growth propped up by LifeLock awareness from breaches and membership adoption.