Gen Digital (GEN) - 2026 Q1 - Quarterly Results

Executive Summary & Financial Highlights Q1 FY26 Performance Overview Gen Digital Inc. reported a strong start to FY26, with Q1 results exceeding expectations, driven by product innovation and increasing demand for protection, trust, and financial empowerment - FY26 is off to a strong start, with Q1 results beating expectations, powered by product innovation and rising demand for protection, trust, and financial empowerment[3] - Gen is scaling with a diverse portfolio spanning its Cyber Safety Platform and Trust-Based Solutions, employing an AI-first strategy to create smarter, more trusted, and personalized digital experiences[3] - The company's operating model, disciplined execution, and strategic clarity in growth investments are driving durable, profitable growth and expanding market opportunities through Trust-Based Solutions[4][5] Q1 FY26 GAAP Financial Highlights Gen Digital Inc. reported Q1 FY26 GAAP revenue of $1,257 million, up 30%, with operating income rising but diluted EPS decreasing Q1 FY26 GAAP Financial Highlights | Metric | Q1 FY26 (GAAP) | Change YoY | | :---------------- | :------------- | :--------- | | Revenue | $1,257 million | Up 30% | | Operating income | $446 million | Up 7% | | Operating margin | 36% | Down 7 points | | Diluted EPS | $0.22 | Down 25% | | Operating cash flow | $409 million | Up 55% | | Bookings | $1,202 million | Up 32% | Q1 FY26 Non-GAAP Financial Highlights On a non-GAAP basis, Gen Digital Inc. achieved Q1 FY26 revenue of $1,257 million, up 30%, with operating income increasing by 15% to $650 million Q1 FY26 Non-GAAP Financial Highlights | Metric | Q1 FY26 (Non-GAAP) | Change YoY | | :---------------- | :----------------- | :--------- | | Revenue | $1,257 million | Up 30% | | Operating income | $650 million | Up 15% | | Operating margin | 52% | Down 6 points | | Diluted EPS | $0.64 | Up 20% | Guidance & Dividend Q2 FY26 Non-GAAP Guidance Gen Digital Inc. projects Q2 FY26 non-GAAP revenue to be between $1,180 million and $1,210 million, with non-GAAP diluted EPS expected to range from $0.60 to $0.62 Q2 FY26 Non-GAAP Guidance | Metric | Q2 FY26 Non-GAAP Guidance | | :---------------- | :------------------------ | | Revenue | $1,180 million to $1,210 million | | EPS | $0.60 to $0.62 | FY26 Non-GAAP Guidance Gen Digital Inc. has raised its full-year FY26 non-GAAP guidance, with revenue now expected to be in the range of $4,800 million to $4,900 million FY26 Non-GAAP Guidance Update | Metric | New FY26 Non-GAAP Guidance | Prior FY26 Non-GAAP Guidance | | :---------------- | :------------------------- | :--------------------------- | | Revenue | $4,800 million to $4,900 million | $4,700 million to $4,800 million | | EPS | $2.49 to $2.56 | $2.46 to $2.54 | Quarterly Cash Dividend Gen's Board of Directors approved a regular quarterly cash dividend of $0.125 per common share, payable on September 10, 2025 - A quarterly cash dividend of $0.125 per common share was approved[5] - The dividend is payable on September 10, 2025, to shareholders of record as of August 18, 2025[5] Company Information & Disclosures About Gen Digital Inc. Gen Digital Inc. (NASDAQ: GEN) is a global leader in Digital Freedom, offering trusted consumer brands and providing cybersecurity, online privacy, identity protection, and financial wellness solutions - Gen Digital Inc. (NASDAQ: GEN) is a global company focused on Digital Freedom through brands like Norton, Avast, LifeLock, and MoneyLion[7] - The company offers award-winning products in cybersecurity, online privacy, identity protection, and financial wellness[7] - Gen serves nearly 500 million users in over 150 countries, empowering safe, private, and confident digital lives[7] Forward-Looking Statements & Risk Factors This section outlines forward-looking statements, identifiable by terms like 'expect' or 'will,' and warns that actual results may differ materially due to known and unknown risks - Statements using terms like 'expect' or 'will' are forward-looking, and actual results may differ materially due to various risks[8][10] - Risk factors include impacts of acquisitions/divestitures, litigation, operating model execution, customer retention, new product development, market acceptance, and maintaining relationships[10] - Other risks involve stock price volatility, system vulnerabilities, changes in accounting/tax rules, and general macroeconomic conditions such as inflation and geopolitical conflicts[10] Use of Non-GAAP Financial Information Gen Digital Inc. uses non-GAAP financial measures to provide supplemental information for understanding past performance and future prospects, which are not GAAP compliant - Non-GAAP measures (operating margin, income, net income, EPS, revenues, constant currency revenues) are used to enhance understanding of financial performance and future prospects[11] - Management uses non-GAAP measures for performance assessment, planning, forecasting, and evaluating management's compensation[11][28] - Non-GAAP measures are supplemental, not a substitute for GAAP, and reconciliation is provided, except for forecasted guidance where it's unreasonably burdensome to estimate adjustments[11][12] Financial Statements Condensed Consolidated Balance Sheets As of July 4, 2025, Gen Digital Inc.'s total assets increased to $16,360 million, driven by higher intangible assets and goodwill, while total liabilities also rose Condensed Consolidated Balance Sheet Highlights | Balance Sheet Item | July 4, 2025 (Millions) | March 28, 2025 (Millions) | Change (Millions) | | :------------------------- | :---------------------- | :------------------------ | :---------------- | | Total assets | $16,360 | $15,495 | +$865 | | Total liabilities | $13,995 | $13,226 | +$769 | | Total stockholders' equity (deficit) | $2,365 | $2,269 | +$96 | | Cash, cash equivalents and restricted cash | $828 | $1,006 | -$178 | | Intangible assets, net | $2,499 | $2,267 | +$232 | | Goodwill | $10,817 | $10,237 | +$580 | | Long-term debt | $8,575 | $7,968 | +$607 | Condensed Consolidated Statements of Operations For the three months ended July 4, 2025, Gen Digital Inc. reported net revenues of $1,257 million, with gross profit rising, but total operating expenses increased, leading to a decrease in net income and diluted EPS Condensed Consolidated Statements of Operations Highlights | Income Statement Item | Three Months Ended July 4, 2025 (Millions) | Three Months Ended June 28, 2024 (Millions) | Change YoY (Millions) | | :-------------------------- | :----------------------------------------- | :------------------------------------------ | :-------------------- | | Net revenues | $1,257 | $965 | +$292 | | Cost of revenues | $267 | $190 | +$77 | | Gross profit | $990 | $775 | +$215 | | Total operating expenses | $544 | $358 | +$186 | | Operating income (loss) | $446 | $417 | +$29 | | Net income (loss) | $135 | $181 | -$46 | | Diluted net income (loss) per share | $0.22 | $0.29 | -$0.07 | Condensed Consolidated Statements of Cash Flows For the three months ended July 4, 2025, net cash from operating activities significantly increased, while investing activities resulted in a large outflow due to acquisitions, and financing activities generated a net inflow Condensed Consolidated