Gen Digital (GEN) - 2025 Q1 - Quarterly Results

Financial Performance - Q1 Fiscal Year 2025 revenue reached $965 million, representing a 2% increase year-over-year[1] - Operating income for Q1 was $417 million, up 16% from the previous year, with an operating margin of 43%, an increase of 5 percentage points[1] - Non-GAAP revenue for Q1 was $965 million, up 2% in USD and 3% in constant currency, with bookings of $913 million, up 3% in USD and 4% in constant currency[2] - Q1 diluted EPS was $0.29, consistent with the prior year, while non-GAAP diluted EPS increased by 13% to $0.53[2] - For Q2 FY25, revenue is expected to be between $965 million and $975 million, with EPS guidance of $0.53 to $0.55[3] - The company reaffirmed its FY25 non-GAAP annual revenue guidance of $3.89 billion to $3.93 billion and EPS guidance of $2.17 to $2.23[3] - Operating cash flow for Q1 was $264 million, reflecting a 17% increase year-over-year[1] - The company declared a quarterly cash dividend of $0.125 per common share, payable on September 11, 2024[3] Customer Metrics - Direct customer revenues reached $850 million for the three months ended June 28, 2024, up from $829 million in the same period last year, reflecting a growth of 2.5%[20] - The direct customer count at the end of the quarter was 39.3 million, an increase from 38.2 million year-over-year, indicating a growth of 2.9%[20] - The retention rate improved to 78% for the current quarter, up from 76% in the same quarter last year[20] - Average revenue per user (ARPU) for direct customers was $7.23, a slight increase from $7.24 in the same quarter last year[20] Revenue Insights - Total revenues for the three months ended June 30, 2024, were $417 million, an increase of 16% compared to $359 million for the same period in 2023[15] - Constant currency adjusted revenues (Non-GAAP) were $972 million for the three months ended June 28, 2024, a 3% increase from $943 million in the same period last year[19] - Total Cyber Safety revenues were $951 million, slightly up from $926 million year-over-year, showing a growth of 2.7%[20] Operational Metrics - The company reported bookings as a key operational metric, reflecting customer demand for products and services[23] - Free cash flow was defined as cash flows from operating activities less purchases of property and equipment, not a measure of financial condition under GAAP[23] - Direct customer count represents active paid users at the end of the reported period, excluding free trial users[23] - Average direct revenues per user (ARPU) is calculated as estimated direct customer revenues divided by the average direct customer count, expressed monthly[23] - Retention rate is monitored to evaluate the effectiveness of strategies to improve subscription renewals, defined as the percentage of direct customers from one year ago still active[23] Innovation and Market Focus - The company is focused on innovation in technology to address increasing cyber threats, particularly those amplified by generative AI[1] - Gen Digital serves nearly 500 million users across more than 150 countries with its cybersecurity and privacy solutions[4] Accounting Adjustments - The company made total adjustments to GAAP income before income taxes amounting to $154 million, compared to $187 million in the previous year[15] - The company identified a revision in revenue recognition practices, which was deemed immaterial to prior period financial statements but corrected for comparative purposes[16]