Gen Digital : Fourth Quarter 2025 Q4 FY25 Presentation

Published: 2025-05-07 04:13:49 ET GEN

Published on 05/07/2025 at 04:13

May 6, 2025

Purpose

Powering Digital Freedom

Mission

We create innovative and easy-to-use technology solutions that help people grow, manage, and secure their digital and financial lives.

Positive Customer Reviews

4.8 stars

80%

and Recognitions

Company Awards

Product and

25+

Integrated Genie

Scam Protection into

Norton Cyber Safety

products

Accelerating

Leadership in

Trust-Based Solutions

MoneyLiori

Core Cyber Safety Metrics

Revenue $3.935B, +4% Y/Y

Op Margin 58%, +30 bps

EPS $2.22, +15% CC

$4.0B

Total Bookings

+4% Y/Y (CC)

Direct Retention

+250 bps since Avast acquisition

Total Paid

Customers

$7.26

Direct Monthly ARPU

+$0.04 Y/Y

Direct Customers

+1.3M net Y/Y

Net Leverage

(0.3x) Y/Y

Note: Revenue, operating margin, and EPS are presen ted as non-GAAP. Direct monthly ARPU reflects 12 months ended March 29, 2024.

See appendix for reconciliation of financial measu res from GAAP to non-GAAP.

Industry Accolades

Gen's industry leadership

160+ Third-Party Security Recognitions in FY25

2025 Winner

of the 2025 Cybersecurity Excellence Award

Multi-Year Recognition

Member of the Dow Jones Best-in-Class North America Index (3rd year), powered by the S&P Global CSA

93 AV-Test Awards

across Norton, Avast, Avira & AVG

8 AVLab Awards for Avast

including Product of the Year 2025 -Advanced In-The-Wild Malware Test

Most Responsible

since 2021, Gen remains one of Newsweek America's Most Responsible Companies

50 AV Comparative Awards

across Norton, Avast, Avira & AVG

15 Testing Ground Labs Awards

across Norton, Avast & Avira

Scam Protection available in Norton360

Market reports double-digit growth in scams YoY

Nearly 3.4B scam emails sent daily and

1.6B scam texts received each day

The average American receives 25

scams per week

1 in 5 people have been victimized by a scam in the past year

52% of Americans are concerned they will fall victim to a scam

$10B scam related losses reported in 2023

Genie Scam Protection

AI powered scam assistant

Safe Web and SMS: avoid scam sites and texts

Private Browser: browse with advanced privacy

Scam dashboard and insights

Genie Scam Protection Pro

Safe Call: Identify and block incoming scam calls

Safe Email: Filter scams out of your inbox

Scam Support: Human support from our experts

Scam Reimbursement: up to $10,000 of losses

Expands into full lifecycle of credit and financial wellness

offerings for consumers

strategically accelerates Gen's presence in financial wellness and expands our consumer portfolio

Brings an AI recommendation engine, enhanced by Gen's

user base, that powers a scaled financial marketplace platform

Diversifies Gen's customer base with consumers in earlier

stages of their financial lives, expanding top of funnel

Combines security, identity and financial data to enhance personalization, improving user digital and financial health

Closed late April FY26

More than doubles addressable market to $50B+ and reinforces long-term financial model

CYBER SAFETY PLATFORM

Deliver technology solutions and superior threat protection to help people navigate the digital world, securely, privately and with confidence

Powering Digital Freedom

TRUST-BASED SOLUTIONS

Provide innovative solutions and insights that empower consumers to manage their identity, reputation and finances confidently to achieve freedom

Evolution of the business

Trust-based solutions in a digitally safe world

Credit Lifecycle management

Alerts, Protection & Restoration

Reputation Management

Personal Financial Management

Banking Services

Marketplace

Trust-based solutions

Identity & Financial Wellness

Anti-Virus & Ant-Scam

Utilities & Parental Control

VPN & Private Browser

Anti-Track & Privacy Monitor

Password Mgr. & Digital Vault

Cyber Safety Assistant

Cyber Safety Platform

Security & Privacy

Operating in two segments that bring our vision to life

CYBER SAFETY PLATFORM TRUST-BASED SOLUTIONS

Security

Secure my family against cyber threats

Privacy

Safeguard my personal data

Identity

Protect my identity and finances

Financial Wellness

Manage and grow my finances

Premium Security

VPN

LifeLock

Earned Wage Access (EWA)

Freemium Security

Privacy Add Ons

Other ITPS

Personal Finance Management (PFM)

Utilities

Private Browser

Reputation

Marketplace

Small Business

Digital Vault

Identity Wallet

Other Solutions

Gen Portfolio by Segment

: Leader in consumer Cyber Safety & Financial Wellness

14B+

Attacks blocked

10PB ~500M

Threat Data used Users

85M+

Customers

to train AI models

2,000

4B+

~$4.75B

1,200+

Global R&D Engineers

Scams & Phishing

Annual Revenue

Partners

500

AI / Data Scientists

1,000+

Patents

150+

Countries

3,000+

Customer Service

& Engineers

Agents

Tech Powerhouse

blocked

Global Reach

Family of brands

Business Segments

Cyber Safety Platform: Security & Privacy

Secure against cyber threats

Safeguard personal data

Trust-Based Solutions: Identity & Financials Protect identity and finances Manage and grow finances

Q4 Non-GAAP Financial Highlights

Building momentum exiting FY25: Bookings and Revenue up 5% in constant currency

Operating margin of 58.4% reflects strong core margins and disciplined growth investments

6thquarter of double-digit EPS growth, up 13% (CC), driven by focused execution and balanced capital allocation

Bookings

+5% Y/Y in CC and Cyber Safety

+3% Y/Y in USD

Revenue (1)

Operating Income (1)

+4% Y/Y in CC

+4% Y/Y in USD

$590M

$566M

OM 58.4%

OM 58.7%

EPS (1)

+13% Y/Y in CC

+12% Y/Y in USD

$0.59

$0.52

+5% Y/Y in CC and Cyber Safety

+5% Y/Y in USD

$1,044M

$1,076M

$964M

$1,010M

Q4 FY24 Q4 FY25

Note: Graphs not to scale. All numbers presented are non-GAAP unless otherwise indicated. See appendix for reconciliation of financial measures from GAAP to non-GAAP.

(1) During the first quarter of fiscal year 2025, Gen made an immaterial revis ion to FY24 financials. Please refer to Note 1 in the Q1 FY25 10-Q for more details.

Solid Execution in Q4 & FY25

Record Q4 Revenue of $1,010M, up 5% in USD and CC

Broad-based growth across product portfolio, with stronger growth in higher value US market

Healthy direct KPIs at cohort levels, partner channels scaling through Identity adoption

Operating Leverage at Scale: 58.4% Margin, (30) bps Y/Y

Robust revenue growth and best-in-class margins

reflect solid execution of cyber safety strategy

Highly recurring business model and operational discipline fund innovation and marketing investments

Record Q4 EPS of $0.59, up 12% in USD and 13% in CC

6thconsecutive quarter of double-digit earnings growth

Supported by operating leverage and capital structure

Non-GAAP P&L

($mil), except per share amounts

Revenue

Y/Y % (CC)

Gross Profit Gross Margin

Operating Expenses

% of Revenue Operating Income Operating Margin

Other Inc / (Expense)

Effective Tax Rate Net Income

EPS

Diluted Share Count

Y/Y %

Q4 FY25

$1,010

868

85.9%

278

27.5%

$590

58.4%

(121)

22%

$366

$0.59

624

USD

(40) bps

(10) bps

(30) bps

--10%

12%

(2%)

Y/Y %

FY25

$3,935

3,390

86.1%

1,092

27.8%

$2,298

58.4%

(520)

22%

$1,387

$2.22

624

USD

(80) bps

(0%)

(100) bps

30 bps

--11%

14%

(3%)

Note: All numbers presented are non-GAAP unless otherwise indicated.

See appendix for reconciliation of financial measures from GAAP to non-GAAP.

Gen Performance Metrics

REVENUE ($mil)

FY24

FY25

Y/Y %

USD

Y/Y %

Direct(1) (2)

$844

$869

$877

+ Partners

$105

$121

15%

= Cyber Safety

$949

$974

$998

+ Legacy (3)

$15

$12

(20%)

= Total Revenue

$964

$986

$1,010

Note: Amounts may not add due to rounding.

During the first quarter of fiscal year 2025, Gen made an immaterial revis ion to FY24 financials. Please refer to Note 1 in

the Q1 FY25 10-Q for more details.

Subscriptions sold directly through E-Commerce and Mobile App

Legacy revenue includes: EOL VPN (SurfEasy and HMA), SMB Legacy Platforms, Avast's Chrome Distribution, Bullguard, Tech

OEM, and exited markets.

Direct monthly ARPU is calculated as direct customer revenues for the period divided by the average direct customer count

for the same period, expressed as a monthly figure.

Direct retention is customer (unit) retention. Reflects blended retention of E-Commerce and Mobile customers

CYBER SAFETY METRICS

Q4 FY24

Q3 FY25

Q4 FY25

Y/Y

Direct Customers

(Q/Q change)

39.1M

+232K

40.1M

+371K

40.4M

+322K

1.3M

Direct Monthly ARPU (4)

$7.22

$7.27

$0.05

Direct Retention (5)

77%

78%

All KPIs stable to up, with improvements across cohorts

Net Direct Customers up 1.3M Y/Y from international expansion and higher mobile adoption, improved retention at cohort level

ARPU expansion reflects cross-sell momentum and higher membership adoption in mobile channels

Retention up Y/Y at cohort level, overall blended retention stable

Key Balance Sheet, Cash Flow, & Other Metrics ($mil)

Q4 FY24

Q3 FY25

Q4 FY25

Balance Sheet

Cash and Cash Equivalents

$846

$883

$1,006

Contract Liabilities (1)

$1,884

$1,849

$1,923

Debt (Principal)

$8,716

$8,569

$8,355

Cash Flow

Cash Flow from Operations $1,398 (2)$326 Capital Expenditures $3 $8 Free Cash Flow $1,395 (2)$318

Other Metrics: Capital Allocation

Dividends + Dividend Equivalents $78 $77

$473

$470

$77

(Quarterly $0.125 per common share)

Debt Paydown

$658

$59

$1,164

Share Repurchase

$300

Balance Sheet & Cash Flow

Liquidity of $2.5B

$1B cash + $1.5B revolver undrawn

Debt / EBITDA (3)Net Leverage of 3.2x

Remain committed to long-term target <3x by FY27

Q4 Free Cash Flow of $470M

Full Year Free Cash Flow of $1.2B

April 2025 Activity:

~$1B cash outflow for MoneyLion transaction

Issued $750M Term Loan B (SOFR + 1.75%) due 2032

During the first quarter of fiscal year 2025, Gen made an immaterial revis ion to FY24 financials.

Please refer to Note 1 in the Q1 FY25 10-Q for more details.

Associated with tax capital losses disclosed in our FY23 10-K

Using Covenant Debt EBITDA (Non-GAAP)

Q1 & FY26 NON-GAAP ANNUAL GUIDANCE

FY26

$4.70 - $4.80B

Revenue

6-8% Y/Y (Pro-Forma)

$2.46 - $2.54

EPS

12-15% Y/Y (CC)

Q1 FY26

$1.18 - $1.21B

Revenue

5-7% Y/Y (Pro-Forma)

$0.59 - $0.61

EPS

12-15% Y/Y (CC)

Key Assumptions:

High-single digit pro-forma growth

Fiscal year 2026 includes an extra week in Q1, offset by MoneyLion pre-acquisition stub revenue and business model transition

Overall Op. Margin ~52-53%, driven by segment mix

Currency consistent with FY25 exit

Note: All numbers presented are non-GAAP unless otherwise indicated

Guidance in USD assumes ending March 2025 foreign exchange rates.

Assumes non-GAAP effective taxrate of ~22%.

We are not providing GAAPEPS guidance because most non-GAAP adjustments pertain to events that have not yet occurred and would be unreasonably burdensome to forecast.

THE FIRST CONSUMER FINANCE DIGITAL ECOSYSTEM & THE ULTIMATE FINANCIAL MARKETPLACE

Financial Profile

CY2024

Personal Financial Management (PFM)

Marketplace Products & Offers

Revenue & Growth

$546M

AI Powered PFM

Insights

Banking Direct Deposit Early Paycheck

Money / Adjacent

Content and Comm unity

Credit

Monitoring

Loans

Personal, Student, Auto, Home

Credit

Cards

Insurance

Auto, Life, Home

High Yield

Savings

+29% Y/Y

Adj. EBITDA Margin

17%

Rewards

Investing

Managed Portfolio

Single Stock Investing

Premium

Membership

Cashback rewards

Home

Get Repairs,

Save on Utilities

Earn

Side Hustles

Total Customers

20M

Cash Advance Roun d Ups

Games

Auto

Rent, Buy / Sell

Credit Builder

Loans

Education

Student Loan Refi

Total Customer Inquiries

345M

Credit Bui lder Loans

Peer to Peer Payments

Travel Crypto

Tax Preparation

Transaction overview

Transaction structure

$82/ share (Cash)

$23/ share (CVR)

Contingent Value Right ("CVR") issuable at closing and payable in Gen shares (issuable based on an assumed share price of $30.48) if Gen 30 consecutive trading day average volume-weighted average share price reaches

$37.50 during the period from December 10, 2024 through the 24-month period after the transaction close.

Financial impact

Cash payment of ~$1B

Estimated purchase price at 9-11x NTM EBITDA(1) before synergies

Accretive to Non-GAAP EPS

Reinforces Gen's long-term financial model

Gen re-affirms commitment of net leverage <3x EBITDA(2) by FY27

EBITDA based on street consensus (FactSet), mul tiple based on cash value and cash + $23 CVR face val ue

Using Covenant Debt EBITDA (Non-GAAP)

Facility

Principal ($mil)

Maturity

Coupon

Revolver (RCF): undrawn

$1,500

2027

If drawn: SOFR+CSA+1.5%

Term Loan A (TLA)

$3,470

2027

SOFR+CSA+1.5%

Term Loan B (TLB)

$2,377

2029

SOFR+1.75%

Term Loan B (TLB)

$750

2032

SOFR+1.75%

2027 Sr. Unsecured Note (SUN)

$900

2027

6.75%

2030 Sr. Unsecured Note (SUN)

$600

2030

7.125%

2033 Sr. Unsecured Note (SUN)

$950

2033

6.25%

Capital Structure

Debt Maturities in $mil (Initial Principal Amounts)

As of April 17, 2025

Revolver

(undrawn)

$1,500

In September 2022: Raised $7.6B of TLA/B to fund Avast acquisition

and raised $1.5B of SUN to refinance maturing debt.

Voluntary TLB pre-payments of $1,230M to date

TLA

$3,470

2027 SUN

$900

TLB

$2,377

2030 SUN

$600

TLB

$750

March 2023: Executed $1 billion of 3-year pay fixed interest rate swaps

June 2024: Repriced existing TLB to SOFR +1.75% (from SOFR + CSA + 2%)

February 2025: Issued $950mm Sr. Notes 2033 and paid off $1.1B Sr. Notes 2025

Issued $750mm TLB 2032 (S+1.75%), drawn in April 2025

Current cost of debt ~6.1%

~62% floating debt with hedges, expect variable cost to trend with term SOFR

2033 SUN

$950

Debt maturities extended and staggered through FY33

Notes:

RCF (if drawn) / TLA spread is variable, based upon the better of company's leverage ratio and unsecured credit

FY25 FY26 FY27 FY28 FY29 FY30 FY31 FY32 FY33

rating and ranging between 1.125% and 1.75%. As of 03/28/2025, the drawn spread for these facilities is 1.5%.

CSA represents a spread to align SOFR, a secured financing rate, with LIBOR, an unsecured rate. The CSA will be 10bps

for each monthly interest payment.

Avira mortgages were paid off during Q4 FY25.

The Company at its option can redeem, prior to its stated maturity, the 2027, 2030, and 2033 Sr. Unsecured Notes at

pre-specified redemption prices beginning September 30, 2024, September 30, 2025, and April 01, 2028.

Note: Graph not to scale.

Trended Non-GAAP Quarterly Results

Non-GAAP P&L

($M), except per share amounts

Q1 FY24

Q2 FY24

Q3 FY24

Q4 FY24

FY24

Q1 FY25

Q2 FY25

Q3 FY25

Q4 FY25

FY25

Direct Customer Revenues

829

834

844

3,341

850

860

869

877

3,456

Partner Revenues

105

396

101

102

105

121

429

TOTAL CYBER SAFETY REVENUE

$926

$929

$933

$949

$3,737

$951

$962

$974

$998

$3,885

Legacy Revenues

TOTAL REVENUE

$943

$945

$948

$964

$3,800

$965

$974

$986

$1,010

$3,935

Y/Y % (CC)

35%

28%

15%

Gross Profit

$822

$824

$832

$3,302

$833

$839

$850

$868

$3,390

Gross Margin

87.2%

86.9%

86.3%

86.9%

86.3%

86.1%

86.2%

85.9%

86.1%

Sales & Marketing

172

174

172

173

691

173

175

173

184

705

Research & Development

290

291

General & Administrative

112

Operating Expenses

280

278

269

266

1,093

269

272

273

278

1,092

% of Revenue

29.7%

29.4%

28.4%

27.6%

28.8%

27.9%

27.7%

27.5%

27.8%

Operating Income

$542

$546

$555

$566

$2,209

$564

$567

$577

$590

$2,298

Operating Margin

57.5%

57.8%

58.5%

58.7%

58.1%

58.4%

58.2%

58.5%

58.4%

Interest Expense

(163)

(167)

(158)

(154)

(642)

(146)

(143)

(134)

(129)

(552)

Other Income (Expense)

Income before Income Taxes

$388

$385

$404

$427

$1,604

$430

$449

$469

$1,778

Provision for Income Tax

352

103

391

Net Income

$303

$301

$315

$333

$1,252

$335

$336

$350

$366

$1,387

EPS

$0.47

$0.49

$0.52

$1.95

$0.53

$0.54

$0.56

$0.59

$2.22

Diluted Share Count

643

644

645

637

642

627

622

623

624

Depreciation

Reported EBITDA

$549

$552

$560

$571

$2,232

$569

$571

$582

$594

$2,316

During the first quarter of fiscal year 2025, Gen made an im material revision to FY24 financials. Please refer to Note 1 in the Q1 FY25 10-Q for more details. Copyright © 2025 Gen Digital Inc. All rights reserved. 24

Reconciliation to Non-GAAP Gross Profit

GAAP to Non-GAAP Gross Profit

($M)

Q1 FY24

Q2 FY24

Q3 FY24

Q4 FY24

FY24

Q1 FY25

Q2 FY25

Q3 FY25

Q4 FY25

FY25

GAAP Results of Operation

Gross profit (GAAP)

Non-GAAP Gross Profit Adjustments

Cost of revenues

Stock-based compensation

Amortization of

intangible assets

$764

$765

$766

$774

$3,069

$775

$780

$793

$811

$3,159

229

227

TOTAL GROSS PROFIT ADJUSTMENT

233

231

Non-GAAP Results of

Operation

Net revenues

943

945

948

964

3,800

965

974

986

1,010

3,935

Cost of revenues

121

124

132

498

132

135

136

142

545

GROSS PROFIT (NON-GAAP)

$822

$824

$832

$3,302

$833

$839

$850

$868

$3,390

Reconciliation to Non-GAAP Operating Income

GAAP to Non-GAAP Operating Income ($M)

FY24

Q2 FY24

Q3 FY24

Q4 FY24

FY24

Q1 FY25

Q2 FY25

Q3 FY25

Q4 FY25

FY25

GAAP Results of Operation

Operating income (GAAP)

$359

$22

$332

$397

$1,110

$417

$402

$374

$417

$1,610

Total Non-GAAP gross profit

adjustment

233

231

Non-GAAP Operating Expense

Adjustments

Stock-based compensation

134

130

Amortization of intangible assets

233

174

Impairment of intangible assets

Restructuring and other costs

(1)

Acquisition and integration costs

Litigation costs

347

418

Legal contract dispute cost

Other

TOTAL OPERATING EXPENSE ADJUSTMENT

125

465

165

111

866

106

146

116

457

Non-GAAP Results of Operation

Gross profit

822

824

832

3,302

833

839

850

868

3,390

Sales and marketing

172

174

172

173

691

173

175

173

184

705

Research and development

290

291

General and administrative

112

Total operating expenses

280

278

269

266

1,093

269

272

273

278

1,092

Operating Income (Non-GAAP)

$542

$546

$555

$566

$2,209

$564

$567

$577

$590

$2,298

Reconciliation to Non-GAAP Net Income

GAAP to Non-GAAP Net Income ($M)

Q1 FY24

Q2 FY24

Q3 FY24

Q4 FY24

FY24

Q1 FY25

Q2 FY25

Q3 FY25

Q4 FY25

FY25

GAAP Results of Operation

Net income (GAAP)

$187

$147

$142

$131

$607

$181

$161

$159

$142

$643

Total Non-GAAP gross profit adjustment

233

231

Total Non-GAAP operating expense adjustment

125

465

165

111

866

106

146

116

457

Non-GAAP Other Non-Operating Expense

(Income) Adj

Non-cash interest expense

Loss (gain) on equity investments

Gain on sale of properties

(4)

(5)

(9)

Other

(1)

Total adjustments to GAAP income before

income taxes

187

529

226

215

1,157

154

172

241

182

749

Income tax effect of non-GAAP adjustments

(71)

(375)

(53)

(13)

(512)

(50)

(5)

Total net income adjustment

116

154

173

202

645

154

175

191

224

744

Non-GAAP Results of Operation

Operating income

542

546

555

566

2,209

564

567

577

590

2,298

Interest expense

(163)

(167)

(158)

(154)

(642)

(146)

(143)

(134)

(129)

(552)

Other income (expense), net

Income before income taxes

388

385

404

427

1,604

430

449

469

1,778

Provision for income taxes

352

103

391

Net income (Non-GAAP)

$303

$301

$315

$333

$1,252

$335

$336

$350

$366

$1,387

Reconciliation to Non-GAAP EPS and Net Income

GAAP to Non-GAAP EPS and Net Income (1)

($M), except per share amounts

Q4 FY25

EPS Net Income

GAAP EPS / Net Income $0.23 $142

Stock based compensation

0.06

Amortization of intangible assets

0.16

100

Impairment of intangible assets

0.00

Restructuring and other costs

0.00

Acquisition and integration costs

0.00

Litigation costs

0.01

Legal contract dispute cost

0.04

Other (2)

0.02

Adjustment to GAAP provision for income taxes

0.07

Total adjustments

0.36

224

Non-GAAP EPS / Net Income

$0.59

$366

(1) Total may not add due to rounding.

(2) Other includes non-cash interest expen se, loss (gain) on equity investments and properties and other minor reconciling items.

Reconciliation to Non-GAAP (Unlevered) Free Cash Flow

Unlevered Free Cash Flow Reconciliation ($M)

FY25

Net Cash Flow from Operating Activities

Adjustments:

Capital Expenditures

$1,221

(15)

Free Cash Flow

Adjustments:

Cash paid for interest expense, net of interest rate hedges

$1,206

$544

Unlevered Free Cash Flow

$1,750

Trended GAAP Revenue by Geo

Revenue by Geo ($M)

Q1 FY24

Q2 FY24

Q3 FY24

Q4 FY24

FY24

Q1 FY25

Q2 FY25

Q3 FY25

Q4 FY25

FY25

558

563

564

580

2,265

579

584

589

606

2,358

Rest of Americas

219

229

Americas

614

618

619

633

2,484

636

641

647

663

2,587

EMEA

226

227

230

234

917

233

240

247

953

APJ

103

100

399

100

395

Total Revenue

$943

$945

$948

$964

$3,800

$965

$974

$986

$1,010

$3,935

Disclaimer

Gen Digital Inc. published this content on May 06, 2025, and is solely responsible for the information contained herein. Distributed via Public Technologies (PUBT), unedited and unaltered, on May 07, 2025 at 07:48 UTC.