Gen Digital Q3 2026 Earnings Report

Gen Digital EPS Results

• Actual EPS: $0.64
• Consensus EPS: $0.63
• Beat/Miss: Beat by +$0.01
• One Year Ago EPS: $0.56

Gen Digital Revenue Results

• Actual Revenue: $1.24 billion
• Expected Revenue: $1.23 billion
• Beat/Miss: Beat by +$12.69 million
• YoY Revenue Growth: +25.80%

Gen Digital Announcement Details

• Quarter: Q3 2026
• Date: 2/5/2026
• Time: After Market Closes
• Conference Call Date: Thursday, February 5, 2026
• Conference Call Time: 5:00PM ET

Gen Digital (NASDAQ:GEN) (NASDAQ: GEN) is a global cybersecurity and consumer safety company that provides products designed to help individuals and families protect their devices, online identities, personal information and digital privacy. The company serves customers through a portfolio of consumer-focused cybersecurity and privacy brands.

Its products and services include antivirus and device security, identity theft protection, virtual private networks, password management, online privacy tools, scam protection and family safety features. Gen’s principal brands include Norton, Avast, LifeLock, Avira, AVG and ReputationDefender, serving consumers through subscription-based offerings and related digital services.

Gen Digital was created through the rebranding of NortonLifeLock in 2022, following the company’s acquisition of Avast. Its business combines the legacy consumer security operations associated with Norton and other former Symantec products with Avast’s international cybersecurity portfolio. The company serves customers across North America, Europe and other global markets, and is led by Chief Executive Officer Vincent Pilette.

Gen Digital Q3 2026 Earnings Call Transcript

Key Takeaways

• Positive Sentiment: Gen beat guidance in Q3 with bookings of $1.3B (+27% YoY), revenue of $1.2B (+26% YoY), non‑GAAP EPS +14% YoY, generated $535M free cash flow and returned ~ $700M to shareholders while raising FY26 revenue and EPS guidance.
• Positive Sentiment: The company is positioning itself as a security leader for the AI era, launching a beta Agent Trust Hub and the Norton Neo safe AI browser and deploying on‑device deepfake and anti‑scam defenses to monetize growing AI‑agent risk.
• Positive Sentiment: MoneyLion showed strong traction (~40% revenue growth) and Engine marketplace scale (≈360M inquiries annually), and Gen announced an expanded partnership with Equifax to enrich offers and drive marketplace monetization.
• Positive Sentiment: Operationally Gen reports >78M paid customers, rising adoption of higher‑tier Norton 360 with LifeLock (conversion near 45%) and improving cross‑sell (Norton >26%), with cyber safety levering ~61% segment margin and 51% overall operating margin.
• Neutral Sentiment: Balance sheet shows $619M cash and ~$2.1B liquidity but net leverage of 3.1x EBITDA and $131M interest expense; management is repaying debt, exploring TLA refinancing, and targeting <3x net leverage by FY27.

Presentation

[Operator]

Good afternoon, everyone. Thank you for standing by. My name is Tamia, and I will be your conference operator today. Today's call is being recorded, and all lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question-and-answer session. At this time, for opening remarks, I would like to pass the call over to Jason Starr, Head of Investor Relations.

[Jason Starr, Head of Investor Relations at Gen Digital Inc]

Thank you, Tamia, and good afternoon, everyone. Welcome to Gen's third quarter fiscal year 2026 earnings call. Joining me today are Vincent Pilette, CEO, and Natalie Derse, CFO. As a reminder, there'll be a reminder of this call posted on the Investor Relations website, along with our slides and press release. I'd like to remind everyone that during this call, all references to the financial measures are non-GAAP, and all growth rates are year-over-year, unless otherwise stated. A reconciliation of non-GAAP to GAAP measures is included in our press release and earnings presentation, both of which are available on our IR website at investor.gendigital.com. We encourage investors to monitor this website as we routinely post investor-oriented information such as news and events and financial filings.

[Jason Starr, Head of Investor Relations at Gen Digital Inc]

Today's call contains statements regarding our business, financial performance, and operations, including the impact on our business and industry, that may be considered forward-looking statements, and such statements involve risks and uncertainties that may cause actual results to differ materially from our current expectations. Those statements are based on our current beliefs, assumptions, and expectations as of today's date, February 5, 2026. We undertake no obligation to update these statements as a result of new information or future events. For more information, please refer to the cautionary statements in our press release and the risk factors in our filings with the SEC, and in particular, our most recent reports on Form 10-K and Form 10-Q. Now I'll turn the call over to Vincent.

[Vincent Pilette, CEO at Gen Digital Inc]

Thanks, Jason, and thanks everyone for joining us. We continue to make steady progress toward our long-term vision, building a trusted AI-powered platform that keeps people safe online and helps them manage their financial lives. Our results show the strategy is working. We delivered another quarter of double-digit bookings growth, grew our paid customer base to more than 78 million, and increased non-GAAP EPS 14% year-over-year. What matters most is what these results represent: growing trust. Millions of people choose Gen to stay safe online, protect their identity, and manage their financial lives. Everything we build is designed to earn that trust every day. Today, I'll focus on three things: how AI is reshaping the threat landscape, how cyber safety and financial wellness needs are converging, and how our unified AI-driven platform underpins durable long-term growth. And after that, Natalie will review our financials.

[Vincent Pilette, CEO at Gen Digital Inc]

So let's start with the threat landscape. The most dangerous attacks today no longer look like traditional hacking. They are embedded into everyday digital experiences, shopping, social feeds, search or payments. Consumers are not being breached through technical exploits. They're being redirected from trusted behaviors into outcomes that look legitimate and feel safe. A sponsored ad, a realistic video endorsement, a QR code at checkout, a device pairing prompt, any one of these can trigger a scam that compromises both digital identity and financial health. We see this shift clearly in our data. Across Gen, we block tens of millions of scam attempts every quarter, most tied to financial fraud. Last quarter alone, we blocked more than 45 million fake online shop attacks, up over 60% year-over-year. These scams mirror exactly how people shop today, and scammers are following consumers in those same channels.

[Vincent Pilette, CEO at Gen Digital Inc]

As a result, fake ads now represent more than 40% of all consumer cyber threats. They are visually indistinguishable from legitimate brands, and the fraud often is not revealed until credentials are stolen and payments are made. Speed is the second major shift. AI has compressed the life cycle of attacks from months to days, sometimes hours. It has lowered the cost and effort required to launch personalized scams at scale. The implications are clear: more attacks, faster execution, and higher success rates. And Gen is built for this reality. Because of our scale and the depth of our telemetry, Gen has a unique view into how threats emerge, spread, and intersect with real consumer behavior. We analyze real-time signals across security, identity, devices, platforms, and financial activities. This lets us go beyond blocking threats to understanding risk as it evolves and adapting protection dynamically.

[Vincent Pilette, CEO at Gen Digital Inc]

Cyber safety today is no longer about blocking malware or bad websites after the fact. It is about understanding behavior, intent, context in the moment across identity, devices, platforms, and money, and Gen's platform is built for exactly that. This approach is resonating. Cyber safety bookings grew 5% year-over-year, with double-digit growth in our most comprehensive Norton 360 with LifeLock offerings. Customers are choosing broader protection because of the risks they face are broader. Looking ahead, AI agents represent the next major shift and the next major consumer risk. Millions of people already use AI agents to browse, shop, manage accounts, and make decisions on their behalf, and adoption is accelerating. These systems act like humans online, but at far greater speed and scale, creating new vulnerabilities....

[Vincent Pilette, CEO at Gen Digital Inc]

AI agents can be deceived the same way people can, through fake ads, impersonation sites, or misleading messages, but the speed and impact are amplified. We're already seeing agents click on fraudulent ads, enter credentials into impersonation sites, and authorize transactions based on manipulated information. Take OpenClaw as an example. It runs locally and performs tasks on your behalf, like managing emails and automating daily activities. To work, these agents access your files, your messages, and credentials, and if something goes wrong, the consequences can be severe. A single malicious email could prompt an AI agent to scan a device, extract sensitive data, and send them out without exploiting any traditional software bug. The AI is doing exactly what it was designed to do, just without enough safeguards. Autonomous agents redefine what consumer cyber safety means.

[Vincent Pilette, CEO at Gen Digital Inc]

Protection is no longer just about protecting users, it's about protecting the autonomous systems people rely on. Security cannot be optional, but the providers of these innovations are not focused on making it foundational. That is a gap Gen is uniquely positioned to fill. Earlier this week, Gen Threat Labs introduced a beta version of the world's first Agent Trust Hub. It allows users, both humans and AI bots, to scan skills for risk before execution, control what agents access, and verify safety before it's used. It also includes a curated marketplace of skills maintained by Gen security researchers, effectively the world's first trusted app store for agent skills. Also, in December, we launched Norton Neo, the world's first safe AI browser. Adoption has been strong in our install base, reinforcing demand for AI experiences that are secure by design.

[Vincent Pilette, CEO at Gen Digital Inc]

AI agents will go through hype cycles, of course, but the trend is permanent. As AI becomes embedded in daily life, people need a trusted partner to protect them. The AI economy cannot scale without safety and confidence, and that's where Gen comes in. Our competitive advantage is based on AI, combined with and powered by the unmatched breadth of signals that we bring together across security, identity, and financial risks. At our scales, those signals allow us to retrain our defenses continuously, detect scams earlier, adapt faster, and stop attacks in real time. That allows us to deploy enhanced anti-scam protection across our portfolio, including on-device deepfake detection that can stop an attack during a video playback. These are practical defenses designed to protect consumers against real-world threats. We also recognize that identity threats and financial risks are no longer separate. They are deeply interconnected.

[Vincent Pilette, CEO at Gen Digital Inc]

That is where Gen delivers true peace of mind, and our customers recognize this shift, trusting us more every day. Across our portfolio, we're approaching 100 million active financial accounts monitored and over 500 million protected endpoints. Each month, customers take millions of financial actions, allowing us to strengthen protection, personalization, and recommendations. Within LifeLock, we continue to expand beyond traditional identity protection. Financial accounts monitored grew double digits year over year to nearly 50 million. We are redesigning the LifeLock experience to deliver clearer and expanded alerts, personalized insights, and more actionable recommendations, reinforcing its position as the most trusted financial protection partner. MoneyLion also continues to perform strongly, with nearly 40% revenue growth in Q3. More importantly, it is evolving into an always-on financial hub.

[Vincent Pilette, CEO at Gen Digital Inc]

Beyond short-term liquidity solutions, we're helping consumers manage cash flow, build confidence, and protect financial progress they're working hard to achieve. Later this year, we will launch MoneyOne, a new subscription combining the best of MoneyLion with scam and identity protection, currently in closed beta and moving towards early access. This quarter, we introduced a new feature like Found Money, our savings optimization assistant. Early engagement has been strong. 60% of users engaging with Found Money interacted with an offer, and 30% linked at least one additional account, strengthening the data foundation that powers personalized guidance. Leveraging the strength of Gen, we also embedded scam security and risk detection directly into MoneyLion's transaction insights. And as adoption grows, this reinforces the flywheel between engagement, insight, and value.

[Vincent Pilette, CEO at Gen Digital Inc]

As a result, we delivered record highs in Instacash usage, raw money deposits, and card activity, proof that trust, safety, and growth scale together. Our marketplace, Engine, continues to scale under the Gen brand. This quarter, Engine processed a record number of inquiries as we expanded into new credit cards and mortgage categories and integrated Engine more deeply into our consumer brands, helping insights turn into action more often. Yesterday, we announced an expanded partnership with Equifax, using Equifax differentiated data to enable enhanced alerts and insights for our customers across our entire portfolio. It also enables Equifax to offer more personalized financial offers on myEquifax.com, powered by Engine. Stepping back, our platform strategy is a real differentiator. Across Norton, Avast, LifeLock, and MoneyLion, we operate leading consumer brands that generate high-value signals on behavior, risk, and intent that are amplified by our marketplace.

[Vincent Pilette, CEO at Gen Digital Inc]

Engine alone now processed over 360 million inquiries annually with expanding financial product verticals and improving conversion. What sets Gen apart is how we connect these inputs to create value for our customers and the business. Unifying AI and our data-driven platform to bring together security telemetry, identity events, financial behavior, and marketplace interactions is at the core of our strategy. This shared foundation allows us to move beyond static protection and deliver personalized contextual guidance when it matters the most. After building our modular cyber safety tech stack, we now focused on expanding our unified data platform and automation trust layer, turning vast amounts of data into actionable intelligence that helps consumers make better digital and financial decisions.

[Vincent Pilette, CEO at Gen Digital Inc]

In an AI-driven world where outputs can be biased or manipulated, Gen's ability to anchor guidance in verified identity and trusted data is a durable competitive advantage, and our strategy is simple: turn proprietary signals into trusted recommendations and scale them across our products and partners. We are already seeing early benefits. Our AI Lifecycle Agent is orchestrating customer lifecycle communication, engagement, and personalization across the portfolio. A real-time data platform powers customer-facing features like Protection Score, giving consumer a clear, actionable view of their protection. Shared LLM frameworks are accelerating innovation across products with new agent capabilities deployed in MoneyLion and Norton Money app. In closing, success for Gen is defined by trust, earning it, scaling it, and delivering it in the moments that matter the most, helping people make safer, smarter digital financial decisions.

[Vincent Pilette, CEO at Gen Digital Inc]

Cyber safety remains foundational, and it's not just a category, it's a promise. And as awareness of Gen portfolio grows, we are increasingly recognized not only as a cybersecurity leader, but as a trusted partner across consumers' digital and financial lives. We are executing well in a rapidly changing environment. Our platform is scaling, our strategy is working, and we are focused on long-term value creation by earning our customers' trust every single day. And with that, I'll turn it over to Natalie.

[Natalie Derse, CFO at Gen Digital Inc]

Thank you, Vincent, and hello, everyone. For today's call, I will walk through our Q3 results and also provide some additional color on our performance metrics. I'll then conclude by providing an outlook for Q4 in fiscal year 2026. I will focus on non-GAAP financials and year-over-year growth rates, unless otherwise stated. I will also include commentary on our pro forma growth, which includes MoneyLion's results from the prior year for comparative purposes. Now on to our results. Q3 was another strong quarter for Gen, with results coming in at the high end of our guidance, driven by record revenue and bookings, double-digit EPS growth, and exceptional free cash flow generation.

[Natalie Derse, CFO at Gen Digital Inc]

On a reported basis, Q3 bookings was $1.3 billion, up 27% year-over-year, and up 10% on a pro forma basis, with revenue of $1.2 billion, up 26% year-over-year, and up 8% on a pro forma basis. In our Cyber Safety segment, bookings grew 5% and revenue grew 3%. Our strong bookings reflects ongoing demand for our cyber safety subscriptions and is a leading indicator for future revenue. Operating margins remain strong at 61% as we drive increased leverage in this segment. Growth continues to be supported by secular tailwinds from rising scam activity, driving strong adoption of our Norton 360 memberships across both desktop and mobile. Our higher-tier memberships continue to grow double digits, where customers choose the most comprehensive security, privacy, and identity protection, and our newest capability, Genie Pro Scam Protection.

[Natalie Derse, CFO at Gen Digital Inc]

Through our expanded features, we are strengthening our product relevancy and driving increased membership conversion, now nearing 45%. We will continue to strengthen lifecycle messaging and upsell pathways, improving the customer lifetime value across all cohorts. In our Customer Success organization, our Product Recommender continues to scale with select customer cohorts. This is an internally developed AI model that analyzes customer product ownership, feature usage, and behavioral signals to deliver more relevant and timely offers. This approach allows us to better match customers with the services that they are most likely to need, improving conversion rates and increasing product penetration across our install base. Early results are encouraging, particularly across our privacy add-on products, with Norton cross-sell penetration now exceeding 26%, which reflects our continued progress towards the targets we set out at our last Analyst Day.

[Natalie Derse, CFO at Gen Digital Inc]

Based on this performance, we plan to expand this capability to additional cohorts in Q4 and continue to drive more commercial benefits from our Gen platform. In our Trust-Based Solutions segment, on a pro forma basis, bookings and revenue grew 23% and 22% respectively, and more than doubled on a reported basis. Operating margins remained stable at 30%, in line with expectations, as we make targeted investments in MoneyLion and other AI-related initiatives. Performance this quarter was led by nearly 40% revenue growth in MoneyLion, well-balanced across strong customer demand for personal financial products like Instacash and further scaling of our Engine Marketplace, which enriches the Gen platform through tens of millions of inquiries taking place every quarter. Double-clicking a bit more, Instacash delivered record originations during the quarter, supported by targeted marketing investments to capture elevated demand during the holiday season.

[Natalie Derse, CFO at Gen Digital Inc]

At the same time, Engine continued to gain traction as we added new partners across leading financial brands and top online publishers. The strength of the Gen brand and our scaled audience is increasingly elevating Engine as a premium marketplace partner. Growing adoption of third-party financial products on Engine reinforces our mission to help consumers make better financial decisions through embedded experiences across both financial and non-financial platforms. And we continue to deliver steady growth in our identity offerings. Which remain our highest value customer cohort with the highest retention. We are also advancing our secure financial wellness strategy with the initial rollout of a LifeLock branded marketplace that now includes offers from leading credit card issuers and high-yield savings accounts. While still early, initial test results are encouraging, particularly in driving offer engagement with our LifeLock cohorts.

[Natalie Derse, CFO at Gen Digital Inc]

Across the segments, our direct channels continue to reflect the strength of our first-party portfolio and innovation efforts, with revenue growing 18% as reported and 6% pro forma. Our partner business continues to scale impressively, growing revenue 88% as reported and 23% pro forma, supported by diversified growth across the portfolio, led by Engine Marketplace, retail channels, particularly in Japan, and employee benefits, which delivered another strong double-digit quarter of growth, driven by continued new logo acquisition during open enrollment season. We continue to drive broad-based growth in our paid customer base, now totaling over 78 million customers and up 1 million sequentially. Cyber safety direct customers were up 500,000 as we continue to expand across the regions and channels, consistent with prior quarters.

[Natalie Derse, CFO at Gen Digital Inc]

We are acquiring new customers through MoneyLion and Engine Marketplace as we add new verticals, all with sustainable, healthy returns. Now turning to profitability. Q3 operating income was $629 million, translating to a 51% operating margin, in line with our expectations. Our margins remain robust across our segments as we scale and diversify. We remain committed to operating in a disciplined fashion, as our results demonstrate, scrutinizing our cost envelope proactively. We have and will continue to invest in our strategic AI opportunities. We will invest in our long-term strategic growth initiatives while remaining steadfast in driving efficiencies. Q3 net income was $394 million, and diluted EPS was $0.64, up 14% year-over-year as reported, and at the high end of our guidance.

[Natalie Derse, CFO at Gen Digital Inc]

This represents our ninth consecutive quarter of achieving or exceeding our 12%-15% EPS growth target, reflecting consistent execution and capital allocation. During the quarter, we reduced our weighted average ending share count to 618 million, down 5 million shares year-over-year. Interest expense was $131 million in Q3, and our non-GAAP tax rate remained steady at 22%. Turning to our balance sheet and cash flow, Q3 ending cash balance was $619 million, representing over $2.1 billion of liquidity, including our $1.5 billion revolver. During the quarter, we generated $541 million in operating cash flow and $535 million in free cash flow.

[Natalie Derse, CFO at Gen Digital Inc]

This robust free cash flow enabled us to deploy nearly $700 million of capital for shareholders, including $300 million towards share repurchases, which is 11 million shares, as well as $300 million of debt repayment and $77 million of regular quarterly dividend. We exited the quarter with net leverage at 3.1 times EBITDA, which puts us ahead of schedule for our goal to drive net leverage below three times in fiscal year 2027, while maintaining flexibility to continue investing in growth and additional capital returns. Please note, we are currently exploring refinancing options for our TLA, our term loan A, which matures in September of fiscal 2028. Early market discussions have been encouraging, and we expect to complete this before it becomes current.

[Natalie Derse, CFO at Gen Digital Inc]

For Q4 fiscal 2026, the Board of Directors approved a regular quarterly cash dividend of $0.125 per common share to be paid on March 11, 2026, for all shareholders of record as of the close of business on February 16, 2026. These strong quarterly results underscore our commitment to driving profitable growth with disciplined execution, generating strong free cash flow, and returning capital to shareholders that have become hallmarks for Gen. Now let me share our Q4 and fiscal year 2026 outlook. We are raising our revenue and EPS guidance again for fiscal 2026, based on our strong results and the momentum we're seeing. Our business remains resilient, bolstered by a highly recurring revenue base, further supported by solid customer retention and substantial free cash flow generation.

[Natalie Derse, CFO at Gen Digital Inc]

For fiscal year 2026, we are raising our annual guidance and now expect full year revenue in the range of $4.955 billion-$4.975 billion, up from our prior expectation of $4.92 billion-$4.97 billion. We expect non-GAAP EPS to be in the range of $2.54-$2.56, representing our continued commitment to achieving the 12%-15% annual EPS growth. This implies an expected Q4 non-GAAP revenue in the range of $1.24 billion-$1.26 billion, and EPS in the range of $0.64-$0.66.

[Natalie Derse, CFO at Gen Digital Inc]

Our Q4 and full year guidance assumes high single-digit pro forma growth and disciplined cost management, while funding targeted longer-term growth initiatives and investments in the Gen platform and additional AI capabilities. This guidance range also assumes current FX rates to Q3. We're now well into our final quarter of a very strong fiscal year. We've successfully integrated MoneyLion and continued to accelerate our growth profile while maintaining the same operating discipline that has long defined our strategy. With many opportunities ahead, we are driving healthy growth across both our operating segments and focused on unlocking top-line synergies through our secure financial wellness strategy. Operating margins remain strong, and we're continuing to invest in scalable innovation without compromising returns. Our free cash flow generation is robust, creating capacity for growth investments, ongoing opportunistic share repurchases, and further delevering to drive strong returns for our shareholders.

[Natalie Derse, CFO at Gen Digital Inc]

We continue to hit the mile markers we've laid out as we navigate towards our long-term growth objectives. I want to thank the entire team for staying focused and delivering great value to our customers and to our shareholders. As always, thank you for your time today, and I will now turn the call back to the operator to take your questions. Operator?

[Operator]

Thank you. We will now begin the question-and-answer session. If you would like to ask a question, please press star followed by one on your telephone keypad. If for any reason at all you would like to remove that question, please press star followed by two. Again, to ask a question, please press star one. The first question comes from Roger Boyd with UBS. You may proceed.

[Roger Boyd, Executive Director at UBS]

Great. Thanks for taking the questions. Hey, Vincent. Hey, Natalie. I wanted to come back to consumer AI and what we saw with OpenClaw Moltbot. I know you touched upon this a little bit, but I think we're becoming more aware of how much trust individuals are going to need to place in the hands of AI that's going to touch all aspects of their digital lives. And I'm just curious how you're thinking about the role Gen can play there in helping consumers. I know you mentioned the Agent Trust Hub, AI lifecycle, the Neo browser, but do you feel like this could be a material kind of tailwind to demand for cyber safety moving forward? And are you seeing any sort of uptick in pipeline around that so far? Thanks.

[Vincent Pilette, CEO at Gen Digital Inc]

A very good question, and I confirm, Roger, that the trend is happening, the revolution of AI is happening. Everybody saw it with the virality of OpenClaw in the last two weeks or even last weekend. I would say I see it in a sequential way, suddenly exponential growth. We initially, as you know, were protecting in the initial days of the internet, the device and protecting against weakness in the operating systems, and then later on, protecting against the flurry of website that existed in the early days of uncategorized search tools. And all of that create opportunity, as you know, and that the roots of Avast and Norton brands. If you take today this revolution of AI, it is happening in front of us.

[Vincent Pilette, CEO at Gen Digital Inc]

Agents, in the case of OpenClaw, can do your task. As you know, you can send a WhatsApp or a text to your machine at home and ask them to go and book a restaurant or do other activities, and they will do it. And the agents, if they don't know how to do it or cannot do it via email, may go and download other agents or skills, if you want, and do it that way. And suddenly you have an explosion of players around you that are going to try to complete the task you've asked them. Today, like any new innovations, it's super fun as an early adopter. Security is not the mindset. It's really about how cool it is to be more efficient, to be delegating your task to those agents.

[Vincent Pilette, CEO at Gen Digital Inc]

And similarly, that at the beginning, the operating system were not fully secured, and Norton created the antivirus. But we feel there's a huge gap here to singularly focus on bringing that trust and security and verification inside this environment. As you mentioned, we launched the Agent Trust Hub at Gen from our lab. It actually comes from the fact that over the last two weeks, we saw many of our Norton users turning to use some agents, cascading those activities to other agents, and so exposed to risk. There's you know, over 18,000 skills that have exported to the internet that can be pulled by your agent.

[Vincent Pilette, CEO at Gen Digital Inc]

Some of them could be malicious, some of them could leak some of your information, like password or other things, if you give them access to your machine, and people don't always know what they will do. This trust hub will enable to really validate whether an agent or skills will have a set of risks and decide whether it's an acceptable risk or not. And actually, very uniquely, we build it for bots and agents. So website normally designed for humans, and you can, if you want to program it yourself. It's also for the agent to go and look at it, see what's verified or risky, and then where the marketplace is to see which other skills can be used.

[Vincent Pilette, CEO at Gen Digital Inc]

Similarly, when the internet and the different websites were not fully categorized and search organized, we can play that role of helping what is safe and secure to give confidence for you or your agents to go and delegate those tasks. So now it's not only anymore about protecting a machine; then we were moving to protecting a user with multiple surface exposure. Now it's about protecting a user plus an infinite amount of agents that can represent that users. And so we definitely see this as a renewed need for our mission to play right in the center and that revolution.

[Roger Boyd, Executive Director at UBS]

Awesome. Thanks, Vincent. I appreciate all the color there. And then just a quick follow-up on the MoneyLion business. Again, very solid growth there, 40%. I just wanted to confirm, where are you kind of in that shift over to kind of more subscriptions in that business? I think you noted that some of those are trending towards early access, but it seems like still very early days, but how at all is that impacting the growth in that business and then your outlook for trust-based services for the rest of the year? Thanks.

[Vincent Pilette, CEO at Gen Digital Inc]

Yep. 100%. And we said the march for a very – how could I say? – cautious pace. Doesn't mean a slow pace, but a cautious pace to make sure that we follow the consumer needs where they are, and we do not compromise the customer experience. MoneyLion itself, in the financial wellness sector, is going ahead of market, continue to be very strong on both legs, the personal consumer offering led within Instacash, but also the membership savings account, and then with Engine, that's really outgrowing the rest. And today, the ratio is roughly 60% on the consumer side or the personal financial side, and then 40% on the Engine side. We continue to see steady growth, you mentioned 40%.

[Vincent Pilette, CEO at Gen Digital Inc]

We do have a good business responsible management, where we said the long-term business growth at around 30% as we scale, for a margin that is above 20%, and then, when we see pocket of acceleration, we'll of course, capture them as we saw this quarter. As we continue to scale this business, the biggest opportunity for us is really to drive the revenue synergies across the portfolio. As we see our customer already, when they come to cyber safety, their number one concern is to protect against the financial damage, to protect their financial health. And now with MoneyLion, as we embedded white label and created into our Norton and our Avast, our LifeLock applications, we enable the consumers to not only be protected but improve that position. We have a few activities put in.

[Vincent Pilette, CEO at Gen Digital Inc]

We started created a Engine version into LifeLock. We're redesigning the experience here. We've seen an increase, a double-digit growth in LifeLock customer connecting their bank accounts into the LifeLock app to be able to detect anomalies and give advice on that. And that will continue, as we said. We launched last quarter, Norton Money, both in the employee benefit channel, which will only, as you know, show up materially at time of benefit inscription at the end of the calendar year. And then we also launch it into our own install base to really refine and connect between cyber safety and financial wellness. And we see early adoption of and convergence of the need between the cybersecurity and the financial health position. Those are really good fact patterns.

[Vincent Pilette, CEO at Gen Digital Inc]

We said that we'll start sizing revenue synergies and then overall long-term growth after this fiscal year, so probably in the May timeframe for the next fiscal year.

[Roger Boyd, Executive Director at UBS]

Really clear. Thanks again.

[Vincent Pilette, CEO at Gen Digital Inc]

Yep.

[Operator]

Thank you. The next question comes from Meta Marshall with Morgan Stanley. You may proceed.

[Meta Marshall, Managing Director at Morgan Stanley]

Great, thanks. Maybe I just wanted to spend a second on, if you could kind of go more into the Equifax partnership and just, you know, how that can help drive incremental MoneyLion product adoption, if there's any kind of economics of the partnership that we should be mindful of.

[Vincent Pilette, CEO at Gen Digital Inc]

Yeah, very, very good. So you, you referred to a partnership we just announced two days ago with, with Equifax. Up to now, and before we penetrated financial wellness, our relationship with the credit bureaus was essentially a vendor-to-customer relationship. We were consuming some of their data, some of their information to embed that into our proprietary algorithm and, and modules to give alerts to our customers, help them restore, and serve them that peace of mind that their financial profile in the digital world was fully protected. With MoneyLion, especially the Engine now, we're able to match financial institution offers with consumer traffic, and then we, as you know, we already embedded in that some of the LifeLock benefits, some of the identity protection, and, and we have very strong momentum.

[Vincent Pilette, CEO at Gen Digital Inc]

That enabled us to have a very strong strategic discussion with Equifax, a two-way discussion, as their strategy is essentially positioned on the financial institution, the SMB, the enterprise side, if you want. And as we are very strongly and uniquely focused on the consumer side, coming together, if you want, we can bring more value to the customer. So in one way, we now have deep access to the differentiated dataset, not just credit monitoring, but the Credit Lock and some utilities, and really expand the alerts and visibility for the consumers on their risk profile out there. And then they're going to use Engine on myEquifax.com to bring all of their traffic a more personalized, both safety and financial solutions offering, which will increase over time, obviously, monetization.

[Vincent Pilette, CEO at Gen Digital Inc]

That strategic partnership will also enable to enrich the offers on the Engine as the financial partners that Equifax has relationship with, will also then use that Engine platform. So feel pretty excited about that. We obviously look to partner with many others in the industry to really provide this unique value proposition, this, matchmaker, if you want, between, a financial solutions, safety at the core, and then consumer with their needs.

[Meta Marshall, Managing Director at Morgan Stanley]

... Got it. Maybe just as a follow-up, I know you, you touched on it, but kind of expanding on that last answer of just any trends between first-party products and third-party products, on the MoneyLion marketplace, any material shifts in-

[Vincent Pilette, CEO at Gen Digital Inc]

Yep.

[Meta Marshall, Managing Director at Morgan Stanley]

Any direction? Thanks.

[Vincent Pilette, CEO at Gen Digital Inc]

So the short answer is all of the trends you've seen for the last two-three quarters, Meta, have continued and continued, and that's what we embedded in our guidance, and January was no different either. We have grown, as I mentioned, our first-party product, which essentially was not from the Engine only, but some of it from the Engine, at the somewhat same growth rate that the Engine. And we cite Engine is pretty balanced on the first party and third party. Obviously, where we're strong, like, short-term lending on some of the credit builder, we lead in that subcategory, and in others, where we don't have, of course, an offering, it could be a credit card or an insurance, we are obviously all third party.

[Meta Marshall, Managing Director at Morgan Stanley]

Great. Thanks.

[Operator]

Thank you. The following question comes from Matt Hedberg with RBC. You may proceed.

[Matt Hedberg, Managing Director and Software Research Analyst at RBC]

Hey, guys. Thanks for taking my questions. Congrats on the results, really, really impressive. You know, Natalie, you know, you didn't talk about fiscal 2027, and obviously you're not guiding to it yet, but, you know, when we think about anniversary MoneyLion and, you know, you talked a lot on this call about cross-sell and AI, you know, additives. Are there any sort of high-level, kind of early guardrails or kind of building blocks that we should think of as we spread through profitability?

[Natalie Derse, CFO at Gen Digital Inc]

Yeah. The overall business, I would point you to, you know, outside of MoneyLion, we had said we wanted to drive a sustainable mid-single-digit rate of growth over the long term. And we have now done that for several quarters in a row. And so as we go into fiscal year 2027, in that same type of period of long-term analyst day targets, I would point you to that. Now, parts of our business are growing faster than others, especially as you see the MoneyLion results and some of the areas of partner. But all of that's embedded in the guide. All of that is embedded in the mile markers that we put out there.

[Natalie Derse, CFO at Gen Digital Inc]

Specific guardrails as it pertains to fiscal year 2027, I would point you back to that overarching growth and profitability architecture. Don't forget that we had the extra week in this fiscal year, so you definitely want to keep that in mind. Don't forget that the special tax is now behind us, and so that'll give us $200 million of additional capital allocation to go after and to deploy in a productive fashion. And then other than that, it's going to be balancing, you know, making sure that we're investing for the long term while capturing the current demand and continuously driving a very efficient business.

[Matt Hedberg, Managing Director and Software Research Analyst at RBC]

That, that's great. That's super helpful. Thanks for that. And then, you know, Vincent, you know, I wanted to double-click back on, you know, MoneyLion synergies. It sounds like you're doing a lot right now. You talked about MoneyOne, and it sounds like synergies may be later in the year, fiscal year here. I guess, you know, when we start to think a little bit more broadly about some of these synergies, you know, how, how do you think about, you know, bridging the gap between kind of the historical MoneyLion cohort and, and, and your, kind of your premium base? You know, it feels like there could be a lot of synergies there, but, but, you know, could, could, could you see not only, you know, cross-selling synergies, but, but also sort of, you know, benefiting your premium base?

[Vincent Pilette, CEO at Gen Digital Inc]

Yeah. Actually, we see synergies across the entire cohort as we see the convergence between cyber safety and financial wellness needs from a customer perspective. I mentioned the customer come to our portfolio for about four key reasons, and the number one is always protect me against financial damage. That phase, of course, has to run its course, and part of it is us educating, but of course, they have to realize our offering and experience it, et cetera. That's why sometimes you may feel it's slow, but we want to make sure we follow that customer experience.

[Vincent Pilette, CEO at Gen Digital Inc]

Obviously, LifeLock customers are a little bit more, or further away in that convergence because they already had, organically in our portfolio, move from basic credit monitoring to monitoring your key assets, like your home for a home title, your bank account for anomalies, and we continue to expand that pool, and so that, that awareness, if you want, is stronger. And now we can bring other additional value. I think I had mentioned to you that one of the first realization that financial wellness was coming closer and closer is, as we were monitoring those anomalies and we introduced our AI assistant into, the environment, most of the question was not too much, "Please spot the anomaly." It was, "What can I do with it? Can I consolidate this?

[Vincent Pilette, CEO at Gen Digital Inc]

Can I save money here?" And we didn't have, at the time, the value to deliver it. Today, with MoneyLion, which of course we're creating for a LifeLock customer journey experience, we'll be able to address all of that. So it's expanding that view. We're not approaching it as a cross-sell the same way that maybe a traditional cross-sell has been, and so it's much more customer driven from a customer adoption using our assistants into the platform.

[Matt Hedberg, Managing Director and Software Research Analyst at RBC]

Got it. Thanks, guys.

[Vincent Pilette, CEO at Gen Digital Inc]

Yep.

[Operator]

Thank you. The next question comes from Saket Kalia with Barclays. You may proceed.

[Saket Kalia, Managing Director at Barclays]

Okay, great. Hey, guys. Thanks for taking my questions here.

[Vincent Pilette, CEO at Gen Digital Inc]

Hi, Saket.

[Saket Kalia, Managing Director at Barclays]

And great to see the consistency. Hey, Vincent.

[Vincent Pilette, CEO at Gen Digital Inc]

Yeah. Thank you.

[Saket Kalia, Managing Director at Barclays]

Vincent, maybe we'll start with you. You know, there is clearly a lot of success on driving the top of the funnel, right, with various offerings, right? And of course, MoneyLion is the newest one. I'm curious how the...

[Saket Kalia, Managing Director at Barclays]

... addition of all these businesses and the growing membership mix is contributing to retention? I know that's not maybe the perfect metric to look at right now, but I'm just curious how you think about that, just as you kind of build this flywheel.

[Vincent Pilette, CEO at Gen Digital Inc]

Yeah, absolutely. So before I talk about retention, I would say the customer experience is the most important. That's why very early on in our strategy, we took a modular white label approach in our stack. The second view is, it's good to have your modular white label so you can curate the user interface and experience to your brand, so it's part of your own journey as a special LifeLock customer or a Norton customer or an Avast customer, which is different in adoption of innovations and other things. And then you really drive that. Now our second step is to drive that with intelligence.

[Vincent Pilette, CEO at Gen Digital Inc]

Unifying our dataset across all of our applications to drive intelligence and leverage those intelligence pools or those elements across the different apps is adding more value, personalized, contextualized, finding that right moment of your needs. That also is a big impact and a big driver in this multi-application or multi-brand portfolio. Then to answer your question, if you do really well in customer experience and you find the right moment and the right intelligence, if you want to do it, you're going to have improved retention. Today, we have our cohorts by cohorts that continue to improve in retention. Of course, MoneyLion doesn't have subscriptions, so we do not know about MoneyLion yet in terms of material retention pool.

[Vincent Pilette, CEO at Gen Digital Inc]

As we'll grow subscription, we'll be able to tell you more at that time. And overall, Gen retention has been stable.

[Saket Kalia, Managing Director at Barclays]

Got it. Got it. Very helpful. Natalie, for, for my follow-up, maybe for you. It was great to see the strong capital return, I think in $300 million, in the quarter on both delevering and, and in buybacks. I was just wondering if there are any guardrails that, that you would have us think about, for kind of how you'll deploy, you know, kind of going forward beyond, beyond Q3.

[Natalie Derse, CFO at Gen Digital Inc]

Yeah, we were happy about this quarter. It's we generate such a substantial amount of free cash flow, and we really challenge ourselves to deploy that in a balanced fashion, as fast and as efficiently as we can, and I think Q3 was reflective of that. And Q3 is going to continue in terms of as we look into Q4 and we look into the fiscal year. The tenets are the same. We'll continue the dividend. We'll have a balanced approach across accelerated debt paydown and opportunistic share buyback. We have lots of room left in our buyback program. And as we look to the future, it's going to be a balance across the two.

[Natalie Derse, CFO at Gen Digital Inc]

Keep in mind what I mentioned earlier, we will have $200 million more than we even did in fiscal year 2026 because we're through the transition tax that kind of hits us and has hit us for the last six years in Q2. So even though we already, on an annualized basis, generate enormous amount of free cash flow to deploy, we'll have even more next year to deploy. We'll do it in a balanced fashion. We, we stay very committed to-

[Saket Kalia, Managing Director at Barclays]

Very mindful of that.

[Natalie Derse, CFO at Gen Digital Inc]

Yeah, and we stay very committed to... Like, we put that under 3x net target out there for ourselves. We're really, really close. I mean, even if I look at, you know, in the next quarter or two, we're going to organically be there through mandatory debt paydown and a little bit of accelerated debt. And so we'll continue the balanced approach. It's working for us.

[Saket Kalia, Managing Director at Barclays]

Very helpful. Thanks, guys.

[Natalie Derse, CFO at Gen Digital Inc]

Thank you.

[Vincent Pilette, CEO at Gen Digital Inc]

Thanks, Saket.

[Operator]

Thank you. The next question comes from Robert Coolbrith with Evercore. You may proceed.

[Robert Coolbrith, VP of Internet Equity Research at Evercore]

Hi, good afternoon, and congratulations to the team on the strong results and outlook. Just wanted to ask on some of the investments you're making operationally in the business. Sales and marketing seem to accelerate a bit in the quarter. I was just wondering if that's something that's reflective of inflation in the media cost environment, or if that's in response to anything you're seeing in the business, maybe faster payback periods, stronger LTVs, maybe on the Norton 360 mix shift, which sounds quite positive. And then on R&D, looks like you're seeing a even stronger efficiency and productivity growth there.

[Robert Coolbrith, VP of Internet Equity Research at Evercore]

Just wanted to ask if you have anything new you could add on the use of AI within the organization, if that's making a strong contribution or just maybe better synergy realization, anything more you might be able to add on that? Thank you so much.

[Natalie Derse, CFO at Gen Digital Inc]

Yeah, thanks for the questions. We appreciate it. On sales and marketing, let me take that one. We have increased our sales and marketing. We continue to deploy in the market where we see the highest and the most efficient returns. There's a few. We're definitely investing in capturing more on an acquisition front, the bigger higher ROAS on the membership adoption, so the 360 memberships, to your point. We see that really taking off in the mobile. The customers that are being acquired through the App Store. That's driven by a lot of the new functionality that our team has built and expanded into the mobile channels, but it doesn't stop there. We're seeing the demands of the 360 memberships across the board. That's fantastic.

[Natalie Derse, CFO at Gen Digital Inc]

We continue to invest in MoneyLion, both on the first and the third party. We see well-balanced growth, even higher than we had indicated to you guys, higher than our expectations, higher than the average industry growth. So we saw both first-party and third-party growing at approximately 40%, in the quarter, and so continuously investing in healthy returns, to shore that up. Then just generally across the board, we're very, very diversified across the channels. We really just operate in a disciplined fashion to create the capacity to invest more and more in sales and marketing because we want those healthy returns. We wanna make sure that we're acquiring the right cohorts at the right time, so that we continue to sustainably grow at that mid-single digit rate of growth.

[Natalie Derse, CFO at Gen Digital Inc]

Yes, for Q3, I'm proud of the team. And then every quarter, we just get smarter and smarter through the analytic and the tools that we're using on those returns, on that CLV over CAC, and that continues to be a horse that will ride to drive our revenue growth.

[Vincent Pilette, CEO at Gen Digital Inc]

Cool. Then maybe I'll take the R&D, and then Robert, as you analyze it, also keep in mind that the MoneyLion business, and you have the public data from prior acquisition versus a core security business, have different profiles. Obviously, the MoneyLion is more, a little bit more in customer, which are a bit more in S&M, a little bit less in R&D. And I would say our security business is exactly the reverse. So you do have a little bit of a mixed impact. On R&D, though, we're doing pretty cool things. I mentioned, I think, a few times, that we have two big bucket of AI initiatives.

[Vincent Pilette, CEO at Gen Digital Inc]

One, we would call them AI native portfolio, and it's really about rebuilding many of our new applications or features with first an AI lens, as opposed to introducing AI feature into it, is redesigning it from an AI a native view. And then the second one is changing our functions to be AI first. And there are three buckets that are making really progress. One is in our support area, the second one is in our marketing area, and the third is in R&D, and there's no order of priorities on those. We're making really good progress on redesigning how we approach software development and product from ideations to product launch.

[Vincent Pilette, CEO at Gen Digital Inc]

We have a set of seeds, I would call that, we say we call our Jelly Corn, and it's basically a squad of three, a PM, an R&D developer and a design person, and they have to drive everything from ideation to product using only AI tools. We're running experiment, we're still in the learning phase, but super exciting by how the capacity, if you want to test, learn, and put to market new products at the speed of never, never equaled before. That will continue to lower your cost of overall R&D. We're trying to bring that approach into our more infrastructure, so into the licensing system, into the billing system, which take a bit more time versus the ideation.

[Vincent Pilette, CEO at Gen Digital Inc]

But I think the world is here to change, and we gotta be at the forefront of it and leverage the full benefit of it.

[Robert Coolbrith, VP of Internet Equity Research at Evercore]

Great. Thank you so much for the update.

[Vincent Pilette, CEO at Gen Digital Inc]

Yep. Thank you.

[Operator]

Thank you. Our final question comes from Joseph Gallo with Jefferies. You may proceed.

[Joseph Gallo, SVP and Software Research Analyst at Jefferies]

Hey, guys. Thanks for the question.

[Vincent Pilette, CEO at Gen Digital Inc]

Hi.

[Joseph Gallo, SVP and Software Research Analyst at Jefferies]

I really appreciate it. Yeah, earlier in the call, you talked about, you know, protecting a user and the infinite amount of agents that, you know, represent that user. How should we think about, you know, the ASP uplift or monetization opportunity there? Just can you share a little more details on that opportunity?

[Vincent Pilette, CEO at Gen Digital Inc]

Yes, we are absolutely not yet at the level of discussing an ARPU, an ASP. This is really a fast-evolving, I was going to say evolution, I should say revolution happening. Even people who are not technical, less savvy, like some of my dear board members, are calling and say, "Oh my God, I use OpenClaw, and now I connected my email and my calendars, and I don't know what's working, and can we please undo it? I'm worried." And so we see that real time, real life with people adopting it. Right now, there is a gap to fill, which is providing that safety, the same way that antivirus only provided safety into the operating system at the beginning of its life, that was not focusing on security, but more on all the features.

[Vincent Pilette, CEO at Gen Digital Inc]

We believe there's a similar need here into the AI economy, and we were going to move super fast on that. There is no doubt in our mind that as we continue to expand that and able to protect, not only the users, but now the exponential amount of agents they may use, they would be willing to pay for that pain point because we see it in real life, that it is a pain point and a worry for those who are using it.

[Joseph Gallo, SVP and Software Research Analyst at Jefferies]

That's really helpful. Maybe just as a follow-up, I mean, you guys have done a tremendous job of beating the expectations you've laid out. Yeah, as we think about 4Q guidance, is there anything we should consider in terms of macro or, you know, as we're getting used to MoneyLion, just anything to call out in terms of seasonality there? Thank you.

[Natalie Derse, CFO at Gen Digital Inc]

I think just from a current, current consideration standpoint, everything is baked into, you know, either our actuals or, you know, we're just—we're responding to what we know of right now. I don't really look at macro factors and try and fold in or weave in anything specific with the unknown. And I would include FX in that. So the currencies that we assume are what we already know and what's already in the Q3 actuals. Anything else that you-

[Vincent Pilette, CEO at Gen Digital Inc]

Well, if I can add, obviously, you've seen the consumer sentiment being at a multi-year low, but I would say the last month, maybe the last few months, have been stable at that level. And obviously, the need we address, whether it's security or frankly, financial health, to be able to survive in that, are all super relevant in that environment. So notwithstanding a one-time special crazy environment that could happen in the world, we do feel that even though it's slow, it's stable.

[Joseph Gallo, SVP and Software Research Analyst at Jefferies]

Great to see. Thank you.

[Operator]

Thank you. This concludes today's conference call. Thank you for your participation. You may now disconnect your line.

Participants

Executives

• Jason Starr, Head of Investor Relations
• Natalie Derse, CFO
• Vincent Pilette, CEO

Analysts

• Joseph Gallo, SVP and Software Research Analyst at Jefferies
• Matt Hedberg, Managing Director and Software Research Analyst at RBC
• Meta Marshall, Managing Director at Morgan Stanley
• Robert Coolbrith, VP of Internet Equity Research at Evercore
• Roger Boyd, Executive Director at UBS
• Saket Kalia, Managing Director at Barclays