Summary of Gen Digital FY Conference Call Company Overview - **Company**: Gen Digital (NasdaqGS:GEN) - **Industry**: Cybersecurity and Financial Wellness - **Key Brands**: Norton, Avast, LifeLock, Moneyline Core Points and Arguments 1. **Business Model and Customer Base**: Gen Digital is a leader in cybersafety with approximately 77 million paid customers and 200 million active users on its platform, protecting 500 million endpoints [11][12][14] 2. **Strategic Shift**: The company is transitioning from a focus solely on cybersafety to include financial wellness, addressing the needs of consumers who want to protect and improve their financial positions [13][14] 3. **Market Insights**: About two-thirds of U.S. consumers live paycheck to paycheck, and half of financial products are purchased outside their primary bank, indicating a significant market opportunity for embedded financial wellness solutions [13][14] 4. **Acquisition of Moneyline**: The acquisition of Moneyline, which has seen nearly 50% growth in the first half post-acquisition, is a strategic move to enhance Gen's offerings in financial wellness [19][20][26] 5. **Financial Performance**: In Q2, Gen Digital reported a 25%-27% growth in bookings and revenue, with strong margins and eight consecutive quarters of double-digit EPS growth [19][20][54] 6. **Future Growth Projections**: The company expects to maintain a 30% growth rate for Moneyline, leveraging its existing customer base to drive further growth [41][54] Additional Important Insights 1. **Integration of Services**: Gen Digital is integrating financial wellness into its existing cybersecurity services, creating a comprehensive platform that addresses both security and financial needs [34][43] 2. **Marketplace Growth**: The Engine, a marketplace for financial products, has been growing over 50% for three consecutive quarters, indicating strong demand for integrated financial solutions [26][27] 3. **Customer Engagement**: The company is focused on enhancing customer experience through AI-driven insights and personalized offerings, which are expected to drive higher engagement and retention [44][45] 4. **Cost Synergies**: Gen Digital has successfully integrated Moneyline, improving its operating margins from 14%-15% to 20%-22% in recent quarters, showcasing effective cost management post-acquisition [62][63] 5. **Revenue Synergies**: The company is exploring cross-selling opportunities within its existing customer base, aiming to enhance overall revenue through bundled offerings [58][61] Conclusion Gen Digital is strategically positioning itself at the intersection of cybersecurity and financial wellness, leveraging its extensive customer base and recent acquisitions to drive growth and enhance shareholder value. The company is optimistic about future performance, with a strong focus on integrating services and improving customer engagement.

Financial Data and Key Metrics Changes - The company generated just over $1.2 billion in revenue, up 25% year-over-year [8] - Non-GAAP operating margin maintained above 50%, with non-GAAP EPS of $0.62, up 15% year-over-year [9][26] - Q2 bookings and revenue were over $1.2 billion, up 27% and 25% year-over-year, respectively [20] Business Line Data and Key Metrics Changes - The consumer fintech business, MoneyLion, grew by 50% [8] - Cybersafety segment bookings grew 5% year-over-year, with a robust operating margin of 61% [9] - Trust-based solutions segment revenue grew over 25% on a pro forma basis, with an operating margin of 30% [11] Market Data and Key Metrics Changes - The company serves over 77 million customers, up approximately 1 million sequentially [24] - The employee benefits channel continues to grow double digits, with a robust pipeline ahead of the annual enrollment period [21] Company Strategy and Development Direction - The company aims to be a global leader in consumer cybersafety and fintech, focusing on secure financial wellness [8] - The integration of MoneyLion is expected to unlock revenue synergies by unifying data systems across cybersafety and trust-based solutions [12] - The strategic direction includes expanding customer cohorts and enhancing user experience through technology leadership [11] Management's Comments on Operating Environment and Future Outlook - Management noted that consumers face a rapidly evolving threat landscape, with cybercrimes projected to exceed $15 billion annually in the U.S. [7] - The company raised its annual guidance to $95 million at the midpoint, reflecting over 25% growth on a reported basis [16] - Management expressed confidence in the resilience of the business, supported by a highly recurring revenue base and strong customer retention [28] Other Important Information - The company paid down $160 million of debt at the end of the quarter, with net leverage at 3.2 times EBITDA [27] - A regular quarterly cash dividend of 12.5 cents per common share was approved for Q3 fiscal 2026 [28] Q&A Session Summary Question: View of the macro environment and health of the consumer - Management indicated that there is no significant correlation between economic downturns and subscription or security revenue streams, with strong growth in secure financial wellness offerings [38] Question: Frequency of member interaction with LifeLock products - Management discussed the integration of MoneyLion and the focus on revenue synergies, particularly through the Norton Money platform and curated marketplaces [41] Question: Trajectory of partner revenue - Management expects partner revenue to continue growing faster than direct revenue, driven by the embedded services in partner organizations [50] Question: Free cash flow trajectory and capital allocation - Management confirmed strong free cash flow generation and a balanced approach to capital allocation between debt paydown and share repurchases [53] Question: Momentum in upselling customers into higher-tier Norton 360 memberships - Management highlighted the engagement of Norton 360 and the introduction of new features like Norton Money to drive upselling [60] Question: Growth trends in the core cybersafety business - Management noted that revenue reflects trailing bookings and emphasized the importance of innovation and customer engagement in driving future growth [86]