Gen Digital, Inc. Q3 FY2025 earnings call

• Q3 was a quarter of solid execution with profitable growth, 5th consecutive quarter of double-digit EPS growth (up 15%). - Innovations include Norton Genie with 2 million downloads, leveraging AI to detect scams; extending Genie into Norton 360 product family. - Avast Security Identity rolled out in 15 new countries. - Launched Digital Vault with ID Advisor Plus in Japan. - Built on new Gen Stack for better protection, user experience, and AI-driven solutions. - Acquired MoneyLion in December to strengthen financial wellness offerings, expanding addressable market.

Q3 was a quarter of solid execution. Cyber Safety bookings (excluding legacy) were up 4% in constant currency; reported bookings exceeded $1 billion, up 3% in USD and constant currency. Q3 revenue was $986 million, up 4% in USD and constant currency. Direct revenue was $869 million, up 4%. Partner revenue was $105 million, up 6% in USD and constant currency. Legacy business lines contributed $12 million, down from $15 million prior quarter, expected to decline double-digits year-over-year and represent ~1% of total revenue.

• Full year 2025 revenue expected in range of $3.915 billion to $3.93 billion, 4% Cyber Safety growth at midpoint. - Non-GAAP EPS expected in range of $2.20 to $2.22 per share, 14%-15% growth. - Q4 non-GAAP revenue expected in range of $990 million to $1,005 million, Q4 non-GAAP EPS in range of $0.57 to $0.59.

Statements involve forward-looking risks and uncertainties that may cause actual results to differ materially from current expectations. Risks include those related to market dynamics, competition, execution of growth strategies, and impact of acquisitions.

Q: Roger Boyd from UBS asked about retention rates and ARPU trends.

A: Natalie Derse said retention rate is industry-leading, cohorts are stable to up, and metrics like customer count, retention, and ARPU are driving revenue acceleration.

Q: Andrew Nowinski from Wells Fargo asked about Cyber Safety bookings deceleration and MoneyLion acquisition.

A: Natalie Derse said deceleration was partially due to NPD breach tailwind; Vincent Pilette explained MoneyLion acquisition provides PFM features and embedded marketplace for synergies.

Q: Saket Kalia from Barclays asked about FX impact on full year guide and Norton 360 adoption.

A: Natalie Derse said FX impact was immaterial; Vincent Pilette said ~50% of base uses Norton 360 and progress is being made towards majority on membership structure.

Q: Hamza Fodderwala from Morgan Stanley asked about capital allocation post-MoneyLion acquisition.

A: Natalie Derse said will get back to it post-deal close but capital allocation tenants remain consistent.

Q: Tomer Zilberman from Bank of America asked about ARPU improvement.

A: Natalie Derse said ARPU improvement is from cross-sell, upsell, mobile customer adoption, and cohort performance trends.