Gen Digital (NasdaqGS:GEN) Q3 2026 Earnings call February 05, 2026 05:00 PM ET Company ParticipantsJason Starr - Head of Investor RelationsMeta Marshall - Managing DirectorNatalie Derse - CFORobert Coolbrith - VP of Internet Equity ResearchRoger Boyd - Executive DirectorSaket Kalia - Managing DirectorVincent Pilette - CEOConference Call ParticipantsJoseph Gallo - SVP and Software Research AnalystMatt Hedberg - Managing Director and Software Research AnalystOperatorGood afternoon, everyone. Thank you for sta ...

Q3 FY26 Earnings February 5, 2026 Forward-Looking Statements This presentation contains statements which may be considered forward-looking within the meaning of the U.S. federal securities laws. In some cases, you can identify these forward-looking statements by the use of terms such as "expect," "will," "continue," or similar expressions, and variations or negatives of these words, but the absence of these words does not mean that a statement is not forward-looking. All statements other than statements of ...

Core Insights - GoTu Technology has partnered with SoFi to provide financial wellness resources to dental professionals, enhancing their ability to manage debt and plan for the future [1][2][3] Company Overview - GoTu, formerly known as TempMee, is a technology-driven workforce solution for the dental industry, allowing dental offices to contract directly with dental professionals [4] - Since its inception in 2019, GoTu has filled over 500,000 dental shifts across 44 states and Washington, D.C., demonstrating significant growth and market presence [4] Partnership Details - The partnership with SoFi at Work aims to offer exclusive financial tools to GoTu professionals, including debt management and financial planning resources [2][3] - Benefits are accessible through a secure portal within the GoTu ecosystem, emphasizing the integration of financial wellness into the professional lives of dental workers [3] Financial Investment - GoTu recently secured a $45 million growth investment to modernize dental staffing, highlighting its commitment to redefining the dental industry [3] SoFi Overview - SoFi Technologies is a digital financial services provider with over 12.6 million members, offering a range of financial products and services [5] - SoFi at Work focuses on reducing employee financial stress and enhancing retention through various financial wellness programs [6]

Core Insights - Rediff.com India has received final authorization from the National Payments Corporation of India (NPCI) for a Third-Party Application Provider (TPAP) license, allowing the launch of its digital payments service, RediffPay [1] - The company aims to introduce India's first UPI app focused on financial wellness, promoting saving, investing, and responsible credit usage [2] Group 1: Service Features - RediffPay will offer core UPI functions along with access to financial products such as equities, mutual funds, fixed deposits, and recurring deposits, as well as credit options for consumers and merchants [4] - Users can make merchant payments of up to ₹1,00,000 ($1,113.34) per day and withdraw up to ₹10,000 in cash using pre-approved credit lines under NPCI's framework [5] Group 2: Strategic Goals - The company aims to enhance financial inclusion and provide simple, intuitive digital payment experiences across India, shifting the perception of UPI from mere spending to saving and investing [3][5] - RediffPay plans to integrate merchant credit needs into its UPI offering, targeting a diverse range of merchants across the country [5] Group 3: Partnerships and Ownership - Axis Bank will serve as the payment system provider (PSP) for RediffPay [6] - Infibeam Avenues, which owns Rediff.com India and increased its ownership to 82% in 2024, aims to leverage its fintech expertise to create a user-friendly platform for secure digital payments [6]

Core Insights - The national average credit score in the U.S. is 715 as of September 2024, according to Experian [2][4] - Credit scores are crucial for determining interest rates on loans and creditworthiness [3][4] - The average credit score has plateaued since 2021, with a noted decline since mid-2023 due to rising student loan delinquencies [6] State and Demographic Analysis - States with the lowest average credit scores include Mississippi (680), Alabama, Georgia, Louisiana, and Texas (690-695) [5] - The highest average credit scores are found in Minnesota (742) and Wisconsin (738), with other states like Washington, Vermont, and New Hampshire also above 735 [5] - Women have slightly lower average credit scores (704) compared to men (705), and older Americans tend to have higher credit scores due to longer credit histories [8]

Core Insights - Spiral has partnered with Lake City Bank to enhance financial wellness and grow deposits through personalized digital banking experiences [1][4] - The integration of Spiral's Roundup Center, branded as Lake City Bank SpendSave, allows customers to round up debit card purchases to save or donate to charities [2][3] Company Overview - Spiral is an award-winning platform based in New York City, focused on redefining personalized banking and helping financial institutions grow deposits and retention [5] - Lake City Bank, with assets of $6.9 billion, serves communities in Central and Northern Indiana and emphasizes long-term customer relationships and technology-forward solutions [6] Product Features - The SpendSave solution enables customers to allocate rounded-up amounts to savings or charitable causes, supporting local nonprofits and community initiatives [3] - The platform includes features like real-time impact tracking and tax-deductible donation receipts, enhancing customer engagement and community support [3]

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.

Core Insights - Rising prices are leading to "survival debt," with 48% of workers borrowing money for essentials like groceries and utilities, 71% carrying credit card balances, and 21% making only minimum payments [1] - 22% of individuals have postponed retirement savings to manage current financial pressures [1] Understanding Debt - Maintaining a good credit score requires using no more than 30% of available credit, but many are using credit cards as emergency funds and for daily purchases [3] Financial Education and Planning - Educating oneself on debt and finances is crucial for achieving financial freedom, with financial education and coaching being the first steps [4] - Creating a budget by listing expenses and distinguishing between needs and wants is essential, with even small savings contributing to long-term financial health [5] Borrowing and Financial Tools - When borrowing is necessary, individuals should seek safe, low-interest options and avoid predatory loans, utilizing resources from credit unions [6] Long-Term Financial Wellness - Reducing debt is vital, which includes stopping further borrowing, analyzing existing debt, and establishing a realistic repayment plan [7] - Responsible use of credit, refinancing, and setting clear financial goals are recommended for building lasting financial stability [7]

Core Insights - Mercer, a business of Marsh McLennan, released its inaugural annual survey titled "Voice of the Plan Sponsor: 2025 Defined Contribution (DC) Practices" [1] - The survey indicates that DC plan sponsors are increasingly focusing on financial wellness and cost efficiency [1] Summary by Categories Financial Wellness - There is a growing emphasis among DC plan sponsors on enhancing financial wellness for participants [1] Cost Efficiency - DC plan sponsors are prioritizing cost efficiency in their plans, reflecting a trend towards more sustainable financial practices [1]

Financial Data and Key Metrics Changes - The company generated just over $1.2 billion in revenue, up 25% year-over-year [8][20] - Non-GAAP operating margin was maintained above 50%, with non-GAAP EPS at $0.62, reflecting a 15% increase 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] - The cybersafety segment saw bookings grow by 5% year-over-year, with a robust operating margin of 61% [9][21] - The trust-based solution segment's revenue increased over 25% on a pro forma basis, with an operating margin of 30% [11][22] Market Data and Key Metrics Changes - The company serves over 77 million customers, with a sequential increase of approximately 1 million [24] - The employee benefits channel continues to grow in double digits, reflecting strong demand for bundled solutions [21] Company Strategy and Development Direction - The company aims to be a leader in consumer cybersafety and fintech, focusing on secure financial wellness [8][14] - There is a strategic emphasis on integrating AI across products and enhancing customer engagement through personalized offerings [15][16] - The company is raising its annual guidance to $4.92 to $4.97 billion, reflecting strong momentum and a commitment to innovation [17][29] Management's Comments on Operating Environment and Future Outlook - Management noted the increasing complexity of the threat landscape and the importance of consumer trust in financial wellness [6][7] - The company has not observed significant changes in consumer behavior despite economic fluctuations, indicating resilience in its subscription and security revenue streams [39][40] Other Important Information - The company is focused on disciplined growth investments in AI, data, and platform architecture to enhance customer value [9][15] - The integration of MoneyLion is progressing smoothly, unlocking revenue synergies and enhancing the customer experience [12][41] Q&A Session Summary Question: What is the view on the macro environment and consumer health? - Management indicated that there is no significant correlation between economic downturns and subscription revenue, and consumer demand for financial wellness remains strong [37][39] Question: Can you discuss the trajectory of partner revenue? - Management expects partner revenue to continue growing faster than direct revenue, driven by embedded services and marketplace expansion [49][50] Question: What are the keys to momentum in upselling Norton 360 memberships? - The introduction of new features like Norton Genie and Norton Money is enhancing customer engagement and driving upsell opportunities [58][60] Question: How does the company view the profitability of the MoneyLion business? - Management highlighted that MoneyLion's operating margin is currently around 20%, with a focus on balancing subscription and transaction-based revenue [72][73] Question: What drove the sequential growth in cybersafety customers? - Management attributed the growth to increased engagement, improved retention, and effective customer acquisition strategies [61][62]