Gen Digital Q1 Earnings Surpass Expectations, Revenues Rise Y/Y

Core Insights - Gen Digital Inc. (GEN) reported strong first-quarter fiscal 2026 results, with both revenues and earnings exceeding the Zacks Consensus Estimate [1][9] - Non-GAAP earnings were 64 cents per share, surpassing the estimate by 6.7% and showing a year-over-year increase of 20.8% [1][9] - Non-GAAP revenues rose 30.3% year over year, driven by heightened demand for AI-driven cyber safety solutions [2][9] Financial Performance - Gen Digital's Cyber Safety revenues reached $869 million, up 11.4% year over year, while Trust-Based Solutions segment revenues surged 109.7% to $388 million [5] - Direct Customer revenues increased 25.4% to $1.07 billion, and Partner revenues improved 67.3% to $189 million [5] - Quarterly bookings advanced 31.7% year over year to $1.202 billion, with an average direct customer count rising to 40.6 million [6] Operating Metrics - Non-GAAP gross profit grew 26.9% year over year to $1.06 billion, although gross margin contracted by 220 basis points to 84.1% [7] - Non-GAAP operating income totaled $650 million, reflecting a 15% year-over-year increase, with an operating margin of 52% [8] Cash Flow and Balance Sheet - The company ended the quarter with cash and cash equivalents of $828 million, down from $1.006 billion in the previous quarter [10] - Long-term debt increased to $8.963 billion from $8.335 billion year over year [10] - Operating and free cash flows generated in the quarter were $409 million and $405 million, respectively [10] Guidance and Outlook - For Q2 fiscal 2026, Gen Digital anticipates revenues between $1.18 billion and $1.21 billion, with non-GAAP earnings projected between 60 cents and 62 cents [12] - For the full fiscal 2026, the revenue outlook has been raised to a range of $4.8 billion to $4.9 billion, with EPS guidance adjusted to between $2.49 and $2.56 [13]