Gen Digital (US:GEN)2025-11-07 21:03Revenue Performance - Net revenues for the three months ended October 3, 2025, increased by $246 million, primarily driven by a $221 million increase in Trust-Based Solutions, including $202 million from the acquisition of MoneyLion[178]. - For the six months ended October 3, 2025, net revenues rose by $538 million, with $424 million attributed to Trust-Based Solutions, including $370 million from MoneyLion, and an additional $87 million from an extra week in the fiscal calendar[179]. - Total net revenues reached $1,220 million for the three months ended October 3, 2025, up from $974 million (25%) in the same period last year, and $2,477 million for the six months, compared to $1,939 million (28%)[188]. - Total bookings increased to $1,222 million for the three months ended October 3, 2025, compared to $964 million (27%) in the prior year[184]. Income and Expenses - Operating income for the three months ended October 3, 2025, increased by $36 million, while for the six months, it rose by $65 million, both primarily due to increased net revenues[172]. - Net income for the three months ended October 3, 2025, was $134 million, a decrease of $27 million compared to the prior year, while for the six months, it was $269 million, down $73 million[164]. - Cost of revenues increased by $72 million (37%) for the three months ended October 3, 2025, primarily due to a $46 million increase in partner revenue share in Trust-Based Solutions[191]. - Operating expenses totaled $516 million for the three months ended October 3, 2025, a 37% increase from $378 million in the same period last year[193]. - Sales and marketing expenses rose by $113 million (61%) for the three months ended October 3, 2025, mainly due to increased marketing expenses and headcount costs[194]. Cash Flow and Financial Position - Cash and cash equivalents decreased by $305 million compared to March 28, 2025, mainly due to the cash paid for the acquisition of MoneyLion[172]. - As of October 3, 2025, the company had cash and cash equivalents of $691 million, with $380 million held by foreign subsidiaries[215]. - Net cash provided by operating activities for the six months ended October 3, 2025, was $525 million, an increase from $422 million in the same period of 2024[211][212]. - The company used $880 million in investing activities primarily for the acquisition of MoneyLion[213]. - Financing activities generated $48 million, mainly from the issuance of an Incremental Term Loan B of $741 million[214]. - Total outstanding debt as of October 3, 2025, was $8,794 million, including $6,304 million in term loans and $2,450 million in senior notes[220]. - The company has an undrawn revolving credit facility of $1,494 million, expiring in September 2027[216]. Acquisitions and Strategic Initiatives - The company completed the acquisition of MoneyLion on April 17, 2025, enhancing its identity solutions and financial wellness offerings[166]. - The company's Cyber Safety Platform and Trust-Based Solutions are designed to meet the needs of today's digital generation, focusing on cybersecurity and financial empowerment[161]. - Trust-Based Solutions revenue rose by $221 million (119%) and $424 million (134%) for the three and six months ended October 3, 2025, primarily due to the acquisition of MoneyLion and growth in identity point solutions[182]. - Cyber Safety Platform revenue increased by $25 million (3%) and $114 million (7%) for the three and six months ended October 3, 2025, respectively, driven by growth in cyber safety membership offerings[182]. Market Conditions and Outlook - The company anticipates that global macroeconomic conditions, including inflation and geopolitical conflicts, may impact customer behavior and financial performance[168]. - The company remains confident in its long-term business health and product strength despite current economic uncertainties[169]. Shareholder Returns and Taxation - A cash dividend of $0.125 per share was announced on November 6, 2025, to be paid in December 2025[221]. - The company executed stock repurchases of 5 million shares for $134 million during the six months ended October 3, 2025[217]. - The effective tax rate for the three months ended October 3, 2025, was 42%, compared to 38% for the same period last year[204]. Non-Operating Income and Financial Management - Non-operating income (expense), net, increased by $61 million for the three months ended October 3, 2025, primarily due to a $69 million change in fair value and impairment of non-marketable equity investments[202]. - A hypothetical 100 basis point change in the Secured Overnight Financing Rate (SOFR) would result in a $63 million increase in annual interest expense[228]. - The company manages foreign currency exposure through monthly foreign exchange forward contracts to hedge balance sheet exposures[234].