Gen Digital (US:GEN)2025-05-06 21:00Financial Data and Key Metrics Changes - Fiscal year 2025 marked a transformative year for the company, achieving total bookings of $4 billion, up 4% year over year, with revenue exceeding the high end of annual guidance [6][24] - Non-GAAP operating margin reached a record 58.4%, reflecting strong cost controls and operational efficiencies [7][25] - Non-GAAP EPS was $2.22, up 15% year over year, at the high end of annual guidance [7][25] - Unlevered free cash flow was nearly $2 billion, with net leverage at 3.2 times EBITDA [7][34] Business Line Data and Key Metrics Changes - The core cyber safety offerings, including security and privacy, and identity theft protection, drove broad-based growth [6][24] - Direct revenue in Q4 was $877 million, up 4% in constant currency, with a total Q4 revenue of $1.01 billion, marking a 5% increase [26][34] - The identity category grew double digits internationally, with significant contributions from LifeLock following heightened consumer awareness [12][13] Market Data and Key Metrics Changes - The company expanded its customer base by 1.3 million to over 40 million direct paid customers, with a total of over 65 million direct and indirect paid customers [13][14] - The partner revenue in Q4 was $121 million, up 15% year over year, driven by growth in the employee benefits channel [31][34] Company Strategy and Development Direction - The company is committed to increasing innovation pace and expanding geographic reach, particularly in the cyber safety landscape [9][10] - The acquisition of MoneyLion aims to enhance financial wellness offerings and expand the total addressable market [14][15] - The business will operate under two segments: Cyber Safety Platform and Trust Based Solutions, focusing on advanced technology and innovative solutions [17][19] Management Comments on Operating Environment and Future Outlook - Management expressed confidence in the resilience of the business despite macroeconomic uncertainties, citing a strong subscription model and high customer retention [67][68] - For fiscal year 2026, the company expects revenue between $4.7 billion and $4.8 billion, representing 6% to 8% pro forma growth [21][40] - Non-GAAP EPS for fiscal year 2026 is projected to be between $2.46 and $2.54, indicating double-digit growth [40] Other Important Information - The company plans to continue a balanced capital allocation strategy, focusing on share repurchases and debt pay down [48][49] - The Q4 ending cash balance was over $1 billion, with significant liquidity available [34][35] Q&A Session Summary Question: Guidance for fiscal year 2026 and MoneyLion growth visibility - Management confirmed that guidance is based on maintaining current momentum, with MoneyLion expected to grow at around 24% to 25% [45][46] Question: Capital allocation strategy regarding share repurchases - Management indicated a balanced approach to capital allocation, focusing on both share buybacks and debt reduction [48][49] Question: Impact of MoneyLion's customer network on potential subscribers - The acquisition is expected to enhance cross-selling opportunities and improve customer offerings, leveraging MoneyLion's existing customer base [54][56] Question: Signs of demand resilience amid macro uncertainty - Management highlighted the strong subscription model and customer retention as key factors supporting business resilience [67][68] Question: Indirect revenue growth outlook - Indirect revenue is expected to grow at a sustainable, profitable high single-digit rate, with strong contributions from employee benefits and telco partnerships [81][86]