Gen Digital (GEN) - 2026 Q3 - Quarterly Results

Financial Performance - Q3 FY26 revenue reached $1,240 million, representing a 26% increase year-over-year[5] - Operating income for Q3 FY26 was $433 million, up 16% compared to the previous year[5] - Diluted EPS for Q3 FY26 was $0.31, reflecting a 22% increase year-over-year[5] - Year-to-date operating cash flow reached $1,066 million, an increase of 43%[5] - The company reported a net income of $192 million for Q3 FY26, compared to $159 million in the same quarter last year[17] - Net income for the three months ended January 2, 2026, was $192 million, compared to $159 million for the same period in 2024, representing a 20.6% increase[19] - Total net revenues for the three months ended January 2, 2026, were $1,240 million, up from $986 million in the same period last year, reflecting a 25.7% growth[24] - Operating income (Non-GAAP) for the three months ended January 2, 2026, was $629 million, compared to $577 million in the prior year, indicating a 9% increase[20] Guidance and Projections - The company raised its FY26 revenue guidance to a range of $4.955 billion to $4.975 billion, up from the previous guidance of $4.920 billion to $4.970 billion[10] - Q4 FY26 revenue is expected to be between $1.24 billion and $1.26 billion[10] Cash Flow and Dividends - A quarterly cash dividend of $0.125 per common share has been approved, to be paid on March 11, 2026[6] - Free cash flow (Non-GAAP) for the nine months ended January 2, 2026, was $1,047 million, compared to $736 million for the same period in 2024, showing a 42.3% increase[22] - The company reported a net cash provided by operating activities of $1,066 million for the nine months ended January 2, 2026, compared to $748 million for the same period in 2024, a 42.5% increase[22] Bookings and Customer Metrics - Bookings for Q3 FY26 totaled $1,319 million, up 27% from the previous year[5] - Total bookings for the three months ended January 2, 2026, reached $1,319 million, compared to $1,035 million in the same period last year, marking a 27.5% increase[24] - Total paid customers increased to 78 million as of January 2, 2026, up from 67 million a year earlier, representing a 16.4% growth[24] Operating Metrics - Operating margin (Non-GAAP) for the three months ended January 2, 2026, was 50.7%, down from 58.5% in the same period last year[20] - Stock-based compensation expense for the three months ended January 2, 2026, was $52 million, compared to $33 million in the same period last year, reflecting a 57.6% increase[20] Acquisitions and Legal Matters - The company incurred $876 million in payments for acquisitions, net of cash acquired, during the nine months ended January 2, 2026[19] - The company incurred charges of $66 million related to a legal settlement with an e-commerce partner, which were charged off as G&A expense in fiscal 2025[33] Debt and Financial Reporting - The company extinguished its remaining convertible debt on August 15, 2022, and began amortizing debt issuance costs associated with senior credit facilities acquired during the acquisition of Avast in fiscal 2023[34] - The company excludes gains or losses on extinguishment of debt from non-GAAP results as they do not reflect ongoing business performance[35] - The company records unrealized and realized gains or losses on equity investments in privately-held companies but excludes these from ongoing business results[36] - The company uses a non-GAAP tax rate that excludes various discrete impacts to facilitate better evaluation of current operating performance[38] Operational Metrics Definitions - Bookings, defined as customer orders expected to generate future net revenues, are presented as an operational metric reflecting customer demand[40] - Free cash flow is defined as cash flows from operating activities less purchases of property and equipment, and is not a measure of financial condition under GAAP[41] Product Offerings - The Cyber Safety Platform includes security and privacy products that provide technology solutions for safe navigation in the digital world[43] - Trust-Based Solutions encompass identity, reputation, and financial wellness products, contributing to direct revenue through e-commerce and mobile channels[44] - Paid customers are defined as active users with at least one revenue-generating transaction, excluding free trial users, reflecting the dynamic nature of consumer engagement[46]