Investor Contact Media Contact
CONTACTS Investor Contact Media Contact Ben Lu Audra Proctor Gen Gen IR@GenDigital.com Press@GenDigital.com
Gen Delivers Another Double-Digit Growth Quarter in Q2 FY27 and Raises FY27 Outlook
Gen Digital Inc. (NASDAQ: GEN), a global leader dedicated to powering Digital Freedom, released its results for its second quarter fiscal year 2027, which ended October 2, 2026.
“We delivered our sixth consecutive quarter of double-digit bookings growth,” said Vincent Pilette, CEO of Gen. “We reached a record high customer count, alongside strong product engagement and retention. Innovation across our brands and continued investment in our platform are resonating with consumers. We’re building on that momentum to expand how we help people protect and manage their digital and financial lives in an increasingly agentic AI world.”
“Our second quarter results reflect the durability of our business model and continued momentum across both segments,” said Natalie Derse, CFO of Gen. “Customer demand is strong, and we remain disciplined about investment, efficiency and profitable growth. That balance gives us the confidence to invest in our highest potential opportunities and raise full-year guidance again. We remain focused on consistent execution and lasting value for customers and shareholders.” 1
• Q3 FY27 Revenue expected to be in the range of $1.365 billion to $1.390 billion
• FY27 Revenue expected to be in the range of $5.465 billion to $5.515 billion, compared to prior guidance of $5.375 billion to $5.475 billion
• FY27 EPS expected to be in the range of $2.93 to $2.98, compared to prior guidance of $2.87 to $2.97
Gen's Board of Directors has approved a regular quarterly cash dividend of $0.125 per common share to be paid on December 9, 2026, to all shareholders of record as of the close of business on November 16, 2026.
Webcast & Dial-in instructions at Investor.GenDigital.com . A replay will be posted following the call. For additional details regarding Gen's results and outlook, please see the Financials section of the Investor Relations website at Investor.GenDigital.com .
Gen (NASDAQ: GEN) is a global company dedicated to powering Digital Freedom. Through its trusted brands including Norton, Avast, LifeLock, MoneyLion and Engine, Gen helps people protect and take control of their digital and financial lives. As AI reshapes how people discover, decide and transact, Gen is building the security and trust layer to empower people and their agents to navigate digital life more safely. Gen empowers nearly 500 million users in more than 150 countries through its products and services that span cybersecurity, online privacy, identity protection and financial wellness. Learn more at GenDigital.com .
This press release contains statements which may be considered forward-looking within the meaning of the U.S. federal securities laws. In some cases, you can identify these forward-looking statements by the use of terms such as "expect," "will," "continue," or similar expressions, and variations or negatives of these words, but the absence of these words does not mean that a statement is not forward-looking. All statements other than statements of historical fact are statements that could be deemed forward-looking statements, including, but not limited to, the quotes under “Q2 Fiscal Year 2027 Financial Highlights” including expectations relating to achievement of long-term objectives, and the statements under "Non-GAAP Q3 Fiscal Year 2027 Guidance" and "Non-GAAP Fiscal Year 2027 Guidance" including expectations relating to Q3 Fiscal Year 2027 and Fiscal Year 2027 non-GAAP revenue and non-GAAP EPS, and any statements of assumptions underlying any of the foregoing. These statements are subject to known and unknown risks, uncertainties and other factors that may cause our actual results, levels of activity, performance or achievements to differ materially from results expressed or implied in this press release. Such risk factors include, but are not limited to, those related to: the consummation of or anticipated impacts of acquisitions (including our 2 ability to achieve synergies and associated cost savings from any such acquisitions); divestitures, restructurings, stock repurchases, financings, debt repayments and investment activities; the outcome or impact of pending litigation, claims or disputes; difficulties in executing the operating model for the consumer Cyber Safety business; lower than anticipated returns from our investments in direct customer acquisition; difficulties in retaining our existing customers and converting existing non-paying customers to paying customers; difficulties and delays in reducing run rate expenses and monetizing underutilized assets; the successful development of new products and upgrades and the degree to which these new products and upgrades gain market acceptance; our ability to maintain our customer and partner relationships; the anticipated growth of certain market segments; fluctuations and volatility in our stock price; our ability to successfully execute strategic plans; the vulnerability of our solutions, systems, websites and data to intentional disruption by third parties; changes to existing accounting pronouncements or taxation rules or practices; and general business and macroeconomic changes in the U.S. and worldwide, including economic recessions, the impact of inflation, fluctuations in foreign currency exchange rates, changes in interest rates or tax rates, and ongoing and new geopolitical conflicts, and other global macroeconomic factors on our operations and financial performance. Additional information concerning these and other risk factors is contained in the Risk Factors sections of our most recent reports on Form 10-K and Form 10-Q. We encourage you to read those sections carefully. There may also be other factors that have not been anticipated or are not described in our periodic filings, generally because we did not believe them to be significant at the time, which could cause actual results to differ materially from our projections and expectations. All forward- looking statements should be evaluated with the understanding of their inherent uncertainty. We assume no obligation, and do not intend, to update these forward-looking statements as a result of future events or developments.
We use non-GAAP measures of operating margin, operating income, net income and earnings per share, which are adjusted from results based on GAAP and exclude certain expenses, gains and losses. We also provide the non-GAAP metrics of revenues, and constant currency revenues. These non-GAAP financial measures are provided to enhance the user's understanding of our past financial performance and our prospects for the future, and to provide more meaningful comparisons of our current results to our historical performance by adjusting items that affect comparability between periods. Our management team uses these non-GAAP financial measures in assessing Gen's performance, as well as in planning and forecasting future periods. These non-GAAP financial measures are not computed according to GAAP and the methods we use to compute them may differ from the methods used by other companies. Non-GAAP financial measures are supplemental, should not be considered a substitute for financial information presented in accordance with GAAP and should be read only in conjunction with our condensed consolidated financial statements prepared in accordance with GAAP. Readers are encouraged to review the reconciliation of our non-GAAP financial measures to the comparable GAAP results, which is attached to our quarterly earnings release, and which can be found, along with other financial information including the Earnings Presentation, on the investor relations page of our website at Investor.GenDigital.com . No reconciliation of the forecasted range for non-GAAP revenues and EPS guidance is included in this release because most non-GAAP adjustments pertain to events that have not yet occurred. It would be unreasonably burdensome to forecast, therefore we are unable to provide an accurate estimate. 3
October 2, 2026 April 3, 2026 ────────────────────────────────────────────────────────────────────────────── ASSETS Current assets: Cash, cash equivalents and restricted $ 589 $ 411 cash Accounts receivable, net 398 361 Other current assets 295 295 Assets held for sale 16 14 Total current assets 1,298 1,081 Property and equipment, net 69 71 Intangible assets, net 1,927 2,096 Goodwill 10,930 10,996 Deferred income tax assets 1,143 1,153 Other long-term assets 181 192 Total assets $ 15,548 $ 15,589 LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT) Current liabilities: Accounts payable $ 82 $ 96 Accrued compensation and benefits 79 115 Current portion of long-term debt 1,080 181 Contract liabilities 1,823 1,904 Other current liabilities 417 414 Total current liabilities 3,481 2,710 Long-term debt 7,036 8,015 Long-term contract liabilities 76 73 Deferred income tax liabilities 178 198 Long-term income taxes payable 1,625 1,588 Other long-term liabilities 411 394 Total liabilities 12,807 12,978 Total stockholders’ equity 2,741 2,611 (deficit) Total liabilities and stockholders’ $ 15,548 $ 15,589 equity (deficit)
Accou… recei… -21 -13 -34 -3 net Accou… -15 -9 -14 -57 payab… Accru… compe… 4 12 -35 -9 and benef… Contr… -24 -3 -80 -72 liabi… Income taxes -35 -225 40 -164 payab… Insta… Advan… held -45 -44 -131 -91 for sale, net Other 8 7 5 65 assets Other -65 -50 35 -57 liabi… Net cash provi… by 326 116 760 525 (used in) opera… activ… INVES… ACTIV… Purch… of prope… -3 -9 -7 -13 and equip… Payme… for acqui… — — — -876 net of cash acqui… Payme… for origi… -88 — -173 — of notes recei… Proce… from princ… repay… 81 — 158 — of notes recei… Proce… from sale of — 4 — 4 non-m… equity inves… Proce… from the — — — 9 sale of prope… Other — -2 -3 -4 Net cash provi… by -10 -7 -25 -880 (used in) inves… activ… FINAN… ACTIV… Repay… of -45 -169 -90 -360 debt Proce… from issua… of — — — 741 debt, net of issua… costs… Net proce… from sales of common 7 7 7 7 stock under emplo… stock incen… plans Tax payme… relat… to -3 -3 -44 -47 vesti… of stock units Divid… and divid… -76 -77 -157 -159 equiv… paid Repur… of -171 — -271 -134 common stock Other -1 — -1 — Net cash provi… by -289 -242 -556 48 (used in) finan… activ… Effect of excha… rate fluct… on -2 6 -1 2 cash, cash equiv… and restr… cash Change in cash, cash 25 -127 178 -305 equiv… and restr… cash Begin… cash, cash equiv… 564 828 411 1,006 and restr… cash Ending cash, cash equiv… $ 589 $ 701 $ 589 $ 701 and restr… cash
(1) Issuance costs paid for issuance of debt for the six months ended October 3, 2025 were $9 million. 6
Three Months October 3, Ended October 2, 2026 2025 ────────────────────────────────────────────────────────────────────────────── Operating $ 507 $ 438 income (loss) Stock-based 56 55 compensation Amortization of intangible 118 121 assets Restructuring and other — 4 costs Acquisition and 3 2 integration costs Litigation 2 2 costs Other — 1 Operating income (loss) $ 686 $ 623 (Non-GAAP) Operating 37.0 % 35.9 % margin Operating margin 50.1 % 51.1 % (Non-GAAP) Net income $ 287 $ 134 (loss) Adjustments to net income (loss): Stock-based 56 55 compensation Amortization of intangible 118 121 assets Restructuring and other — 4 costs Acquisition and 3 2 integration costs Litigation 2 2 costs Other — 3 Non-cash interest 5 7 expense Change in fair value and impairment of — 69 non-marketable equity investments Total adjustments to GAAP income 184 263 (loss) before income taxes Adjustment to GAAP provision -27 -10 for income taxes Total adjustment to income (loss), 157 253 net of taxes Net income (loss) $ 444 $ 387 (Non-GAAP) Diluted net income (loss) $ 0.48 $ 0.21 per share Adjustments to diluted net income (loss) per share: Stock-based 0.09 0.09 compensation Amortization of intangible 0.20 0.19 assets Restructuring and other — 0.01 costs Acquisition and 0.00 0.00 integration costs Litigation 0.00 0.00 costs Other — 0.00 Non-cash interest 0.01 0.01 expense Change in fair value and impairment of — 0.11 non-marketable equity investments Total adjustments to GAAP income 0.31 0.42 (loss) before income taxes Adjustment to GAAP provision -0.04 -0.02 for income taxes Total adjustment to income (loss), 0.26 0.41 net of taxes Diluted net income (loss) $ 0.74 $ 0.62 per share (Non-GAAP) Diluted weighted-aver… 603 624 shares outstanding Diluted weighted-aver… shares 603 624 outstanding (Non-GAAP)
Six Months Ended October 2, 2026 October 3, 2025 ────────────────────────────────────────────────────────────────────────────── Net cash provided by (used in) operating $ 760 $ 525 activities Adjustments to net cash provided by (used in) operating activities: Purchases of property -7 -13 and equipment Free cash flow $ 753 $ 512 (Non-GAAP)
(1) This presentation includes non-GAAP measures. Non-GAAP financial measures are supplemental and should not be considered a substitute for financial information presented in accordance with GAAP. For a detailed explanation of these non-GAAP measures, see Appendix A.
Objective of non-GAAP measures : We believe our presentation of non-GAAP financial measures, when taken together with corresponding GAAP financial measures, provides meaningful supplemental information regarding the Company’s operating performance for the reasons discussed below. Our management team uses these non-GAAP financial measures in assessing our performance, as well as in planning and forecasting future periods. Due to the importance of these measures in managing the business, we use non-GAAP measures in the evaluation of management’s compensation. These non-GAAP financial measures are not computed according to GAAP and the methods we use to compute them may differ from the methods used by other companies. Non-GAAP financial measures are supplemental and should not be considered a substitute for financial information presented in accordance with GAAP and should be read only in conjunction with our consolidated financial statements prepared in accordance with GAAP.
Stock-based compensation : This consists of expenses for employee restricted stock units, performance-based awards, stock options and our employee stock purchase plan, determined in accordance with GAAP. We evaluate our performance both with and without these measures because stock-based compensation is a non- cash expense and can vary significantly over time based on the timing, size, nature and design of the awards granted, and is influenced in part by certain factors that are generally beyond our control, such as the volatility of the market value of our common stock. In addition, for comparability purposes, we believe it is useful to provide a non-GAAP financial measure that excludes stock-based compensation to facilitate the comparison of our results to those of other companies in our industry.
Amortization of intangible assets : Amortization of intangible assets consists of amortization of acquisition-related intangible assets such as developed technology, customer relationships and trade names acquired in connection with business combinations. We record charges relating to the amortization of these intangibles within both cost of revenues and operating expenses in our GAAP financial statements. Under purchase accounting, we are required to allocate a portion of the purchase price to intangible assets acquired and amortize this amount over the estimated useful lives of the acquired intangible assets. However, the purchase price allocated to these assets is not necessarily reflective of the cost we would incur to internally develop the intangible asset. Further, amortization charges for our acquired intangible assets are inconsistent in size and are significantly impacted by the timing and valuation of our acquisitions. We eliminate these charges from our non-GAAP operating results to facilitate an evaluation of our current operating performance and provide better comparability to our past operating performance.
Restructuring and other costs : Restructuring charges are costs associated with a formal restructuring plan and are primarily related to employee severance and benefit arrangements, contract termination costs, and assets write-offs, as well as other exit and disposal costs. Included in other exit and disposal costs are costs to exit and consolidate facilities in connection with restructuring events. We exclude restructuring and other costs from our non-GAAP results as we believe that these costs are incremental to core activities that arise in the ordinary course of our business and do not reflect our current operating performance, and that excluding these charges facilitates a more meaningful evaluation of our current operating performance and comparisons to our past operating performance.
Acquisition-related and integration costs : These represent the transaction and business integration costs related to significant acquisitions that are charged to operating expense in our GAAP financial statements. These costs include incremental expenses incurred to affect these business combinations such as advisory, legal, accounting, valuation, and other professional or consulting fees. We exclude these costs from our non-GAAP results as they have no direct correlation to the operation of our business, and because we believe that the non-GAAP financial measures excluding these costs provide meaningful supplemental information regarding the spending trends of our business. In addition, these costs vary, depending on the size and complexity of the acquisitions, and are not indicative of costs of future acquisitions.
Litigation costs: We may periodically incur charges or benefits related to litigation settlements, legal contingency accruals and third-party legal costs related to certain legal matters. We exclude these charges and benefits when associated with a significant matter because we do not believe they are reflective of ongoing business and operating results.
Non-cash interest expense and amortization of debt issuance costs : In accordance with GAAP, we separately account for the value of the conversion feature on our convertible notes as a debt discount that reflects our assumed non-convertible debt borrowing rates. We amortize the discount and debt issuance costs over the term of the related debt. We exclude the difference between the imputed interest expense, which includes the amortization of the conversion feature and of the issuance costs, and the coupon interest payments. We extinguished our remaining convertible debt on August 15, 2022. During fiscal 2023, we also started amortizing the debt issuance costs associated with our senior credit facilities, which were secured upon close of the acquisition of Avast. We believe that excluding these costs provides meaningful supplemental information regarding the cash cost of our debt instruments and enhances investors’ ability to view the Company’s results from management’s perspective.
Gain (loss) on extinguishment of debt : We record gains or losses on extinguishment of debt. Gains or losses represent the difference between the fair value of the exchange consideration and the carrying value of the liability component of the debt at the date of extinguishment. We exclude the gain or loss on debt extinguishment in our non-GAAP results because they are not reflective of our ongoing business.
Change in fair value and impairment of non-marketable equity investments : We record gains or losses, unrealized and realized, on equity investments in privately-held companies. We exclude the net gains or losses because we do not believe they are reflective of our ongoing business.
Gain (loss) on sale of properties and nonfinancial assets : We periodically recognize gains or losses from the disposition of land, buildings and nonfinancial assets. We exclude such gains or losses because they are not reflective of our ongoing business and operating results. 9 Income tax effects and adjustments : We use a non-GAAP tax rate that excludes (1) the discrete impacts of changes in tax legislation, (2) most other significant discrete items, (3) unrealized gains or losses from remeasurement of foreign currency denominated deferred tax items and uncertain tax benefits, and (4) the income tax effects of the non-GAAP adjustment to our operating results described above. We believe making these adjustments facilitates a better evaluation of our current operating performance and comparisons to past operating results. Our tax rate is subject to change for a variety of reasons, such as significant changes in the geographic earnings mix due to acquisition and divestiture activities or fundamental tax law changes in major jurisdictions where we operate.
Diluted GAAP and non-GAAP weighted-average shares outstanding : Diluted GAAP and non-GAAP weighted-average shares outstanding are generally the same, except in periods when there is a GAAP loss from continuing operations. In accordance with GAAP, we do not present dilution for GAAP in periods in which there is a loss from continuing operations. However, if there is non-GAAP net income, we present dilution for non-GAAP weighted-average shares outstanding in an amount equal to the dilution that would have been presented had there been GAAP income from continuing operations for the period.
Bookings : Bookings are defined as customer orders received that are expected to generate net revenues in the future. We present the operational metric of bookings because it reflects customers' demand for our products and services and to assist readers in analyzing our performance in future periods.
Free cash flow : Free cash flow is defined as cash flows from operating activities less purchases of property and equipment. Free cash flow is not a measure of financial condition under GAAP and does not reflect our future contractual commitments and the total increase or decrease of our cash balance for a given period, and thus should not be considered as an alternative to cash flows from operating activities or as a measure of liquidity.
(Unlevered) Free cash flow : Free cash flow is defined as cash flows from operating activities less purchases of property and equipment. Unlevered free cash flow excludes cash interest expense payments, net of payments received through interest rate swap hedges. Free cash flow is not a measure of financial condition under GAAP and does not reflect our future contractual commitments and the total increase or decrease of our cash balance for a given period, and thus should not be considered as an alternative to cash flows from operating activities or as a measure of liquidity.
Cyber Safety Platform: Includes our security and privacy products, as well as our cyber safety comprehensive suites which deliver technology solutions and superior threat protection to help people navigate the digital world, securely, privately and confidently.
Trust-Based Solutions: Trust-Based Solutions includes our identity, reputation, and financial wellness products, which provide innovative solutions and insights that empower consumers to grow and manage their identity, reputation and finances confidently.
Direct revenue: Direct revenue reflects subscriptions sold directly through e-commerce or mobile channels, and revenue generated from financial transactions directly made through Gen properties or marketplaces.
Partner revenue: Partner revenue reflects partner-sourced and channel revenue via retailers, employee benefits, telcos, publishers, and strategic partnerships, including revenue generated from product usage or products sold through our financial marketplace.
Paid customers: We define paid customers as active users of our products and solutions, including subscribers with an active paid subscription to our products at the end of the reported period. Paid customers also includes product users with a unique account and at least one revenue-generating transaction in the relevant active period of each respective product category, whether through our first-party personal finance products, transacting through our financial marketplaces, or generating revenue through product usage. We exclude users on free trials and those who have not actively transacted in the relevant period of each respective product category. In order to properly reflect Gen’s customer cohorts that contribute to revenue given the dynamic nature of consumers and our product portfolio, our methodology is subject to change from time to time. The methodologies used to measure these metrics require judgment and we regularly review our metrics to improve their accuracy. However, our ability to recalculate our historical metrics may be impacted by data limitations or other factors that require us to apply different methodologies for such adjustments. We generally do not intend to update previously disclosed metrics for any such inaccuracies or adjustments that are deemed not material. 10
Full text with the tables
NEWS RELEASE
CONTACTS
Investor Contact Media Contact
Ben Lu Audra Proctor
Gen Gen
IR@GenDigital.com Press@GenDigital.com
Gen Delivers Another Double-Digit Growth Quarter in Q2 FY27 and Raises FY27
Outlook
TEMPE, Ariz. & PRAGUE – October 28, 2026 –
Gen Digital Inc. (NASDAQ: GEN), a global leader dedicated to powering Digital
Freedom, released its results for its second quarter fiscal year 2027, which
ended October 2, 2026.
“We delivered our sixth consecutive quarter of double-digit bookings growth,”
said Vincent Pilette, CEO of Gen. “We reached a record high customer count,
alongside strong product engagement and retention. Innovation across our brands
and continued investment in our platform are resonating with consumers. We’re
building on that momentum to expand how we help people protect and manage their
digital and financial lives in an increasingly agentic AI world.”
Q2 Fiscal Year 2027 Financial Highlights
Q2 GAAP Results
• Revenue of $1.369 billion, up 12%
• Operating income of $507 million, up 16%
• Diluted EPS of $0.48, up 122%
• Year-to-date operating cash flow of $760 million, up 45%
Q2 Non-GAAP Results
• Bookings of $1.347 billion, up 10%
• Revenue of $1.369 billion, up 12%
• Operating income of $686 million, up 10%
• Diluted EPS of $0.74, up 19%
• Year-to-date free cash flow of $753 million, up 47%
“Our second quarter results reflect the durability of our business model and
continued momentum across both segments,” said Natalie Derse, CFO of Gen.
“Customer demand is strong, and we remain disciplined about investment,
efficiency and profitable growth. That balance gives us the confidence to invest
in our highest potential opportunities and raise full-year guidance again. We
remain focused on consistent execution and lasting value for customers and
shareholders.”
1
Non-GAAP Q3 Fiscal Year 2027 Guidance
• Q3 FY27 Revenue expected to be in the range of $1.365 billion to $1.390
billion
• Q3 FY27 EPS expected to be in the range of $0.73 to $0.75
Raises Non-GAAP Fiscal Year 2027 Guidance
• FY27 Revenue expected to be in the range of $5.465 billion to $5.515 billion,
compared to prior guidance of $5.375 billion to $5.475 billion
• FY27 EPS expected to be in the range of $2.93 to $2.98, compared to prior
guidance of $2.87 to $2.97
Quarterly Cash Dividend
Gen's Board of Directors has approved a regular quarterly cash dividend of
$0.125 per common share to be paid on December 9, 2026, to all shareholders of
record as of the close of business on November 16, 2026.
Q2 Fiscal Year 2027 Earnings Call
October 28, 2026
2 p.m. PT / 5 p.m. ET
Webcast & Dial-in instructions at Investor.GenDigital.com . A replay will be
posted following the call. For additional details regarding Gen's results and
outlook, please see the Financials section of the Investor Relations website at
Investor.GenDigital.com .
About Gen
Gen (NASDAQ: GEN) is a global company dedicated to powering Digital Freedom.
Through its trusted brands including Norton, Avast, LifeLock, MoneyLion and
Engine, Gen helps people protect and take control of their digital and financial
lives. As AI reshapes how people discover, decide and transact, Gen is building
the security and trust layer to empower people and their agents to navigate
digital life more safely. Gen empowers nearly 500 million users in more than 150
countries through its products and services that span cybersecurity, online
privacy, identity protection and financial wellness. Learn more at
GenDigital.com .
Forward-Looking Statements
This press release contains statements which may be considered forward-looking
within the meaning of the U.S. federal securities laws. In some cases, you can
identify these forward-looking statements by the use of terms such as "expect,"
"will," "continue," or similar expressions, and variations or negatives of these
words, but the absence of these words does not mean that a statement is not
forward-looking. All statements other than statements of historical fact are
statements that could be deemed forward-looking statements, including, but not
limited to, the quotes under “Q2 Fiscal Year 2027 Financial Highlights”
including expectations relating to achievement of long-term objectives, and the
statements under "Non-GAAP Q3 Fiscal Year 2027 Guidance" and "Non-GAAP Fiscal
Year 2027 Guidance" including expectations relating to Q3 Fiscal Year 2027 and
Fiscal Year 2027 non-GAAP revenue and non-GAAP EPS, and any statements of
assumptions underlying any of the foregoing. These statements are subject to
known and unknown risks, uncertainties and other factors that may cause our
actual results, levels of activity, performance or achievements to differ
materially from results expressed or implied in this press release. Such risk
factors include, but are not limited to, those related to: the consummation of
or anticipated impacts of acquisitions (including our
2
ability to achieve synergies and associated cost savings from any such
acquisitions); divestitures, restructurings, stock repurchases, financings, debt
repayments and investment activities; the outcome or impact of pending
litigation, claims or disputes; difficulties in executing the operating model
for the consumer Cyber Safety business; lower than anticipated returns from our
investments in direct customer acquisition; difficulties in retaining our
existing customers and converting existing non-paying customers to paying
customers; difficulties and delays in reducing run rate expenses and monetizing
underutilized assets; the successful development of new products and upgrades
and the degree to which these new products and upgrades gain market acceptance;
our ability to maintain our customer and partner relationships; the anticipated
growth of certain market segments; fluctuations and volatility in our stock
price; our ability to successfully execute strategic plans; the vulnerability of
our solutions, systems, websites and data to intentional disruption by third
parties; changes to existing accounting pronouncements or taxation rules or
practices; and general business and macroeconomic changes in the U.S. and
worldwide, including economic recessions, the impact of inflation, fluctuations
in foreign currency exchange rates, changes in interest rates or tax rates, and
ongoing and new geopolitical conflicts, and other global macroeconomic factors
on our operations and financial performance. Additional information concerning
these and other risk factors is contained in the Risk Factors sections of our
most recent reports on Form 10-K and Form 10-Q. We encourage you to read those
sections carefully. There may also be other factors that have not been
anticipated or are not described in our periodic filings, generally because we
did not believe them to be significant at the time, which could cause actual
results to differ materially from our projections and expectations. All forward-
looking statements should be evaluated with the understanding of their inherent
uncertainty. We assume no obligation, and do not intend, to update these
forward-looking statements as a result of future events or developments.
Use of Non-GAAP Financial Information
We use non-GAAP measures of operating margin, operating income, net income and
earnings per share, which are adjusted from results based on GAAP and exclude
certain expenses, gains and losses. We also provide the non-GAAP metrics of
revenues, and constant currency revenues. These non-GAAP financial measures are
provided to enhance the user's understanding of our past financial performance
and our prospects for the future, and to provide more meaningful comparisons of
our current results to our historical performance by adjusting items that affect
comparability between periods. Our management team uses these non-GAAP financial
measures in assessing Gen's performance, as well as in planning and forecasting
future periods. These non-GAAP financial measures are not computed according to
GAAP and the methods we use to compute them may differ from the methods used by
other companies. Non-GAAP financial measures are supplemental, should not be
considered a substitute for financial information presented in accordance with
GAAP and should be read only in conjunction with our condensed consolidated
financial statements prepared in accordance with GAAP. Readers are encouraged to
review the reconciliation of our non-GAAP financial measures to the comparable
GAAP results, which is attached to our quarterly earnings release, and which can
be found, along with other financial information including the Earnings
Presentation, on the investor relations page of our website at
Investor.GenDigital.com . No reconciliation of the forecasted range for non-GAAP
revenues and EPS guidance is included in this release because most non-GAAP
adjustments pertain to events that have not yet occurred. It would be
unreasonably burdensome to forecast, therefore we are unable to provide an
accurate estimate.
3
GEN DIGITAL INC.
Condensed Consolidated Balance Sheets
(Unaudited, in millions)
October 2, 2026 April 3, 2026
──────────────────────────────────────────────────────────────────────────────
ASSETS
Current assets:
Cash, cash equivalents and
restricted $ 589 $ 411
cash
Accounts receivable, net 398 361
Other current assets 295 295
Assets held for sale 16 14
Total current assets 1,298 1,081
Property and equipment, net 69 71
Intangible assets, net 1,927 2,096
Goodwill 10,930 10,996
Deferred income tax assets 1,143 1,153
Other long-term assets 181 192
Total assets $ 15,548 $ 15,589
LIABILITIES AND STOCKHOLDERS’
EQUITY
(DEFICIT)
Current liabilities:
Accounts payable $ 82 $ 96
Accrued compensation and benefits 79 115
Current portion of long-term debt 1,080 181
Contract liabilities 1,823 1,904
Other current liabilities 417 414
Total current liabilities 3,481 2,710
Long-term debt 7,036 8,015
Long-term contract liabilities 76 73
Deferred income tax liabilities 178 198
Long-term income taxes payable 1,625 1,588
Other long-term liabilities 411 394
Total liabilities 12,807 12,978
Total stockholders’ equity 2,741 2,611
(deficit)
Total liabilities and
stockholders’ $ 15,548 $ 15,589
equity (deficit)
4
GEN DIGITAL INC.
Condensed Consolidated Statements of Operations
(Unaudited, in millions, except per share amounts)
Three Six
Months October October Months October October
Ended 2, 2026 3, 2025 Ended 2, 2026 3, 2025
──────────────────────────────────────────────────────────────────────────────
Net $ 1,369 $ 1,220 $ 2,705 $ 2,477
reven…
Cost
of 330 266 637 533
reven…
Gross 1,039 954 2,068 1,944
profit
Opera…
expen…
Sales
and 298 297 598 594
marke…
Resea…
and 112 100 230 209
devel…
Gener…
and 66 60 146 134
admin…
Amort…
of 56 55 112 109
intan…
assets
Restr…
and — 4 32 14
other
costs
Total
opera… 532 516 1,118 1,060
expen…
Opera…
income 507 438 950 884
(loss)
Inter… -123 -146 -247 -302
expen…
Other
income 2 -59 6 -49
(expe…
net
Income
(loss)
before 386 233 709 533
income
taxes
Income
tax 99 99 207 264
expen…
(bene…
Net
income $ 287 $ 134 $ 502 $ 269
(loss)
Net
income
(loss)
per $ 0.48 $ 0.22 $ 0.84 $ 0.44
share
-
basic
Net
income
(loss)
per $ 0.48 $ 0.21 $ 0.83 $ 0.43
share
-
dilut…
Weigh…
shares
outst…
Basic 596 616 598 617
Dilut… 603 624 603 624
5
GEN DIGITAL INC.
Condensed Consolidated Statements of Cash Flows
(Unaudited, in millions)
Three Six
Months October October Months October October
Ended 2, 2026 3, 2025 Ended 2, 2026 3, 2025
──────────────────────────────────────────────────────────────────────────────
OPERA…
ACTIV…
Net
income $ 287 $ 134 $ 502 $ 269
(loss)
Adjus…
Amort…
and 122 125 245 248
depre…
Stock…
compe… 56 56 110 122
expen…
Loss
on
sale 69 55 129 91
of
Insta…
Advan…
Defer…
income -16 -17 -25 -6
taxes
Loss
on
sale — — — 1
of
prope…
Non-c…
opera… 4 5 8 9
lease
expen…
Change
in
fair
value
and — 69 — 69
impai…
of
non-m…
equity
inves…
Forei…
curre…
remea… -17 3 -18 89
loss
(gain)
Other 14 11 23 21
Chang…
in
opera…
assets
and
liabi…
net of
acqui…
Accou…
recei… -21 -13 -34 -3
net
Accou… -15 -9 -14 -57
payab…
Accru…
compe… 4 12 -35 -9
and
benef…
Contr… -24 -3 -80 -72
liabi…
Income
taxes -35 -225 40 -164
payab…
Insta…
Advan…
held -45 -44 -131 -91
for
sale,
net
Other 8 7 5 65
assets
Other -65 -50 35 -57
liabi…
Net
cash
provi…
by 326 116 760 525
(used
in)
opera…
activ…
INVES…
ACTIV…
Purch…
of
prope… -3 -9 -7 -13
and
equip…
Payme…
for
acqui… — — — -876
net of
cash
acqui…
Payme…
for
origi… -88 — -173 —
of
notes
recei…
Proce…
from
princ…
repay… 81 — 158 —
of
notes
recei…
Proce…
from
sale
of — 4 — 4
non-m…
equity
inves…
Proce…
from
the — — — 9
sale
of
prope…
Other — -2 -3 -4
Net
cash
provi…
by -10 -7 -25 -880
(used
in)
inves…
activ…
FINAN…
ACTIV…
Repay…
of -45 -169 -90 -360
debt
Proce…
from
issua…
of — — — 741
debt,
net of
issua…
costs…
Net
proce…
from
sales
of
common 7 7 7 7
stock
under
emplo…
stock
incen…
plans
Tax
payme…
relat…
to -3 -3 -44 -47
vesti…
of
stock
units
Divid…
and
divid… -76 -77 -157 -159
equiv…
paid
Repur…
of -171 — -271 -134
common
stock
Other -1 — -1 —
Net
cash
provi…
by -289 -242 -556 48
(used
in)
finan…
activ…
Effect
of
excha…
rate
fluct…
on -2 6 -1 2
cash,
cash
equiv…
and
restr…
cash
Change
in
cash,
cash 25 -127 178 -305
equiv…
and
restr…
cash
Begin…
cash,
cash
equiv… 564 828 411 1,006
and
restr…
cash
Ending
cash,
cash
equiv… $ 589 $ 701 $ 589 $ 701
and
restr…
cash
(1) Issuance costs paid for issuance of debt for the six months ended October 3,
2025 were $9 million.
6
GEN DIGITAL INC.
Reconciliation of Selected GAAP Measures to Non-GAAP Measures (1) (2)
(Unaudited, in millions, except per share amounts)
Three Months October 3,
Ended October 2, 2026 2025
──────────────────────────────────────────────────────────────────────────────
Operating $ 507 $ 438
income (loss)
Stock-based 56 55
compensation
Amortization
of intangible 118 121
assets
Restructuring
and other — 4
costs
Acquisition
and 3 2
integration
costs
Litigation 2 2
costs
Other — 1
Operating
income (loss) $ 686 $ 623
(Non-GAAP)
Operating 37.0 % 35.9 %
margin
Operating
margin 50.1 % 51.1 %
(Non-GAAP)
Net income $ 287 $ 134
(loss)
Adjustments to
net income
(loss):
Stock-based 56 55
compensation
Amortization
of intangible 118 121
assets
Restructuring
and other — 4
costs
Acquisition
and 3 2
integration
costs
Litigation 2 2
costs
Other — 3
Non-cash
interest 5 7
expense
Change in fair
value and
impairment of — 69
non-marketable
equity
investments
Total
adjustments to
GAAP income 184 263
(loss)
before income
taxes
Adjustment to
GAAP provision -27 -10
for income
taxes
Total
adjustment to
income (loss), 157 253
net
of taxes
Net income
(loss) $ 444 $ 387
(Non-GAAP)
Diluted net
income (loss) $ 0.48 $ 0.21
per share
Adjustments to
diluted net
income (loss)
per share:
Stock-based 0.09 0.09
compensation
Amortization
of intangible 0.20 0.19
assets
Restructuring
and other — 0.01
costs
Acquisition
and 0.00 0.00
integration
costs
Litigation 0.00 0.00
costs
Other — 0.00
Non-cash
interest 0.01 0.01
expense
Change in fair
value and
impairment of — 0.11
non-marketable
equity
investments
Total
adjustments to
GAAP income 0.31 0.42
(loss)
before income
taxes
Adjustment to
GAAP provision -0.04 -0.02
for income
taxes
Total
adjustment to
income (loss), 0.26 0.41
net
of taxes
Diluted net
income (loss) $ 0.74 $ 0.62
per share
(Non-GAAP)
Diluted
weighted-aver… 603 624
shares
outstanding
Diluted
weighted-aver…
shares 603 624
outstanding
(Non-GAAP)
Six Months Ended
October 2, 2026 October 3, 2025
──────────────────────────────────────────────────────────────────────────────
Net cash provided by
(used in) operating $ 760 $ 525
activities
Adjustments to net cash
provided by
(used in) operating
activities:
Purchases of property -7 -13
and equipment
Free cash flow $ 753 $ 512
(Non-GAAP)
(1) This presentation includes non-GAAP measures. Non-GAAP financial measures
are supplemental and should not be considered a substitute for financial
information presented in accordance with GAAP. For a detailed explanation of
these non-GAAP measures, see Appendix A.
(2) Amounts may not add due to rounding.
7
GEN DIGITAL INC.
Performance Metrics
(Unaudited, in millions)
Three Months Ended
Performance Metrics October 2, 2026 October 3, 2025
──────────────────────────────────────────────────────────────────────────────
Cyber Safety $ 858 $ 814
Platform
Trust-Based 511 406
Solutions
Total net revenues $ 1,369 $ 1,220
Direct revenues $ 1,074 $ 1,010
Partner revenues 295 210
Total net revenues $ 1,369 $ 1,220
Total bookings $ 1,347 $ 1,222
As of
October 2, 2026 October 3, 2025
──────────────────────────────────────────────────────────────────────
Total paid customers 83 77
8
GEN DIGITAL INC.
Appendix A
Explanation of Non-GAAP Measures and Other Items
Objective of non-GAAP measures : We believe our presentation of non-GAAP
financial measures, when taken together with corresponding GAAP financial
measures, provides meaningful supplemental information regarding the Company’s
operating performance for the reasons discussed below. Our management team uses
these non-GAAP financial measures in assessing our performance, as well as in
planning and forecasting future periods. Due to the importance of these measures
in managing the business, we use non-GAAP measures in the evaluation of
management’s compensation. These non-GAAP financial measures are not computed
according to GAAP and the methods we use to compute them may differ from the
methods used by other companies. Non-GAAP financial measures are supplemental
and should not be considered a substitute for financial information presented in
accordance with GAAP and should be read only in conjunction with our
consolidated financial statements prepared in accordance with GAAP.
Stock-based compensation : This consists of expenses for employee restricted
stock units, performance-based awards, stock options and our employee stock
purchase plan, determined in accordance with GAAP. We evaluate our performance
both with and without these measures because stock-based compensation is a non-
cash expense and can vary significantly over time based on the timing, size,
nature and design of the awards granted, and is influenced in part by certain
factors that are generally beyond our control, such as the volatility of the
market value of our common stock. In addition, for comparability purposes, we
believe it is useful to provide a non-GAAP financial measure that excludes
stock-based compensation to facilitate the comparison of our results to those of
other companies in our industry.
Amortization of intangible assets : Amortization of intangible assets consists
of amortization of acquisition-related intangible assets such as developed
technology, customer relationships and trade names acquired in connection with
business combinations. We record charges relating to the amortization of these
intangibles within both cost of revenues and operating expenses in our GAAP
financial statements. Under purchase accounting, we are required to allocate a
portion of the purchase price to intangible assets acquired and amortize this
amount over the estimated useful lives of the acquired intangible assets.
However, the purchase price allocated to these assets is not necessarily
reflective of the cost we would incur to internally develop the intangible
asset. Further, amortization charges for our acquired intangible assets are
inconsistent in size and are significantly impacted by the timing and valuation
of our acquisitions. We eliminate these charges from our non-GAAP operating
results to facilitate an evaluation of our current operating performance and
provide better comparability to our past operating performance.
Restructuring and other costs : Restructuring charges are costs associated with
a formal restructuring plan and are primarily related to employee severance and
benefit arrangements, contract termination costs, and assets write-offs, as well
as other exit and disposal costs. Included in other exit and disposal costs are
costs to exit and consolidate facilities in connection with restructuring
events. We exclude restructuring and other costs from our non-GAAP results as we
believe that these costs are incremental to core activities that arise in the
ordinary course of our business and do not reflect our current operating
performance, and that excluding these charges facilitates a more meaningful
evaluation of our current operating performance and comparisons to our past
operating performance.
Acquisition-related and integration costs : These represent the transaction and
business integration costs related to significant acquisitions that are charged
to operating expense in our GAAP financial statements. These costs include
incremental expenses incurred to affect these business combinations such as
advisory, legal, accounting, valuation, and other professional or consulting
fees. We exclude these costs from our non-GAAP results as they have no direct
correlation to the operation of our business, and because we believe that the
non-GAAP financial measures excluding these costs provide meaningful
supplemental information regarding the spending trends of our business. In
addition, these costs vary, depending on the size and complexity of the
acquisitions, and are not indicative of costs of future acquisitions.
Litigation costs: We may periodically incur charges or benefits related to
litigation settlements, legal contingency accruals and third-party legal costs
related to certain legal matters. We exclude these charges and benefits when
associated with a significant matter because we do not believe they are
reflective of ongoing business and operating results.
Non-cash interest expense and amortization of debt issuance costs : In
accordance with GAAP, we separately account for the value of the conversion
feature on our convertible notes as a debt discount that reflects our assumed
non-convertible debt borrowing rates. We amortize the discount and debt issuance
costs over the term of the related debt. We exclude the difference between the
imputed interest expense, which includes the amortization of the conversion
feature and of the issuance costs, and the coupon interest payments. We
extinguished our remaining convertible debt on August 15, 2022. During fiscal
2023, we also started amortizing the debt issuance costs associated with our
senior credit facilities, which were secured upon close of the acquisition of
Avast. We believe that excluding these costs provides meaningful supplemental
information regarding the cash cost of our debt instruments and enhances
investors’ ability to view the Company’s results from management’s perspective.
Gain (loss) on extinguishment of debt : We record gains or losses on
extinguishment of debt. Gains or losses represent the difference between the
fair value of the exchange consideration and the carrying value of the liability
component of the debt at the date of extinguishment. We exclude the gain or loss
on debt extinguishment in our non-GAAP results because they are not reflective
of our ongoing business.
Change in fair value and impairment of non-marketable equity investments : We
record gains or losses, unrealized and realized, on equity investments in
privately-held companies. We exclude the net gains or losses because we do not
believe they are reflective of our ongoing business.
Gain (loss) on sale of properties and nonfinancial assets : We periodically
recognize gains or losses from the disposition of land, buildings and
nonfinancial assets. We exclude such gains or losses because they are not
reflective of our ongoing business and operating results.
9
Income tax effects and adjustments : We use a non-GAAP tax rate that excludes
(1) the discrete impacts of changes in tax legislation, (2) most other
significant discrete items, (3) unrealized gains or losses from remeasurement of
foreign currency denominated deferred tax items and uncertain tax benefits, and
(4) the income tax effects of the non-GAAP adjustment to our operating results
described above. We believe making these adjustments facilitates a better
evaluation of our current operating performance and comparisons to past
operating results. Our tax rate is subject to change for a variety of reasons,
such as significant changes in the geographic earnings mix due to acquisition
and divestiture activities or fundamental tax law changes in major jurisdictions
where we operate.
Diluted GAAP and non-GAAP weighted-average shares outstanding : Diluted GAAP and
non-GAAP weighted-average shares outstanding are generally the same, except in
periods when there is a GAAP loss from continuing operations. In accordance with
GAAP, we do not present dilution for GAAP in periods in which there is a loss
from continuing operations. However, if there is non-GAAP net income, we present
dilution for non-GAAP weighted-average shares outstanding in an amount equal to
the dilution that would have been presented had there been GAAP income from
continuing operations for the period.
Bookings : Bookings are defined as customer orders received that are expected to
generate net revenues in the future. We present the operational metric of
bookings because it reflects customers' demand for our products and services and
to assist readers in analyzing our performance in future periods.
Free cash flow : Free cash flow is defined as cash flows from operating
activities less purchases of property and equipment. Free cash flow is not a
measure of financial condition under GAAP and does not reflect our future
contractual commitments and the total increase or decrease of our cash balance
for a given period, and thus should not be considered as an alternative to cash
flows from operating activities or as a measure of liquidity.
(Unlevered) Free cash flow : Free cash flow is defined as cash flows from
operating activities less purchases of property and equipment. Unlevered free
cash flow excludes cash interest expense payments, net of payments received
through interest rate swap hedges. Free cash flow is not a measure of financial
condition under GAAP and does not reflect our future contractual commitments and
the total increase or decrease of our cash balance for a given period, and thus
should not be considered as an alternative to cash flows from operating
activities or as a measure of liquidity.
Cyber Safety Platform: Includes our security and privacy products, as well as
our cyber safety comprehensive suites which deliver technology solutions and
superior threat protection to help people navigate the digital world, securely,
privately and confidently.
Trust-Based Solutions: Trust-Based Solutions includes our identity, reputation,
and financial wellness products, which provide innovative solutions and insights
that empower consumers to grow and manage their identity, reputation and
finances confidently.
Direct revenue: Direct revenue reflects subscriptions sold directly through
e-commerce or mobile channels, and revenue generated from financial transactions
directly made through Gen properties or marketplaces.
Partner revenue: Partner revenue reflects partner-sourced and channel revenue
via retailers, employee benefits, telcos, publishers, and strategic
partnerships, including revenue generated from product usage or products sold
through our financial marketplace.
Paid customers: We define paid customers as active users of our products and
solutions, including subscribers with an active paid subscription to our
products at the end of the reported period. Paid customers also includes product
users with a unique account and at least one revenue-generating transaction in
the relevant active period of each respective product category, whether through
our first-party personal finance products, transacting through our financial
marketplaces, or generating revenue through product usage. We exclude users on
free trials and those who have not actively transacted in the relevant period of
each respective product category. In order to properly reflect Gen’s customer
cohorts that contribute to revenue given the dynamic nature of consumers and our
product portfolio, our methodology is subject to change from time to time. The
methodologies used to measure these metrics require judgment and we regularly
review our metrics to improve their accuracy. However, our ability to
recalculate our historical metrics may be impacted by data limitations or other
factors that require us to apply different methodologies for such adjustments.
We generally do not intend to update previously disclosed metrics for any such
inaccuracies or adjustments that are deemed not material.
10