Gen Digital raises FY26 revenue guidance to $4.97B amid MoneyLion integration and AI-driven platform expansion

Earnings Call Insights: Gen Digital Inc. (GEN) Q2 2026

MANAGEMENT VIEW

* CEO Vincent Pilette stated that "this was another quarter of outstanding execution, exceeding our expectations as we capitalize on our global user base and compounding data advantage." He highlighted record revenue and earnings, robust customer and bookings growth, and portfolio transformation progress. Pilette emphasized expanding into "faster-growing adjacencies in secure financial wellness" and underlined Gen's position as "the most trusted partner in protecting digital lives, bringing confidence in a complex and increasingly AI-driven world."
* The CEO reported $1.2 billion in revenue, a 25% year-over-year increase, and noted MoneyLion’s 50% growth. When including MoneyLion’s previous year results, Gen’s revenue grew 10%. Pilette confirmed a non-GAAP operating margin above 50% and non-GAAP EPS of $0.62, up 15% year-over-year. He cited continued investments in AI, data, and platform architecture.
* Pilette described broad-based performance, citing growth across Norton, Avast, LifeLock, and MoneyLion brands. He outlined new product launches, including scam and deepfake protection features, expansion of Norton Genie Pro and Avast Scam Guardian to over 40 languages, and early launches of Norton Money and embedded credit card marketplaces for LifeLock customers.
* CFO Natalie Derse stated, "Q2 was another strong quarter for Gen with better-than-expected results. On a reported basis, Q2 bookings and revenue were over $1.2 billion, up 27% and 25% year-over-year, respectively." She noted 5% Cyber Safety segment bookings growth, a 61% operating margin in Cyber Safety, and 30% in Trust-Based Solutions. Derse also reported expansion to over 77 million customers, up approximately 1 million sequentially.

OUTLOOK

* Gen Digital raised its fiscal 2026 guidance, now expecting full-year revenue in the range of $4.92 billion to $4.97 billion, up from the previous $4.8 billion to $4.9 billion. This represents reported revenue growth of 25% to 26% year-over-year.
* Non-GAAP EPS for fiscal 2026 is expected to be in the range of $2.51 to $2.56.
* For Q3, non-GAAP revenue is projected in the range of $1.22 billion to $1.24 billion with non-GAAP EPS expected between $0.62 and $0.64.
* Management stated guidance assumes "high single-digit pro forma growth, combined with disciplined cost management, while funding targeted long-term growth investments in the Gen platform and additional AI capabilities."

FINANCIAL RESULTS

* Q2 revenue and bookings each surpassed $1.2 billion, with revenue up 25% year-over-year and bookings up 27%.
* Non-GAAP EPS was $0.62, up 15% year-over-year. Operating income was $623 million, a 51% operating margin.
* Cyber Safety segment operating margin was 61%; Trust-Based Solutions operating margin was 30%.
* Net income for Q2 was $387 million. Interest expense totaled $139 million. Ending cash balance was $701 million, and year-to-date operating cash flow was $525 million with free cash flow of $512 million.
* The company paid down $160 million of debt and issued $77 million in dividends.

Q&A

* Robert Coolbrith, Evercore ISI: Asked about the macro environment and consumer health, and the impact of a downturn on business segments. CEO Pilette responded, "We have 2 segments, right, security and privacy and then trust-based solution really anchored around the secure financial wellness" and noted no change in consumption patterns, adding "we do not see it here as we speak so far."
* Roger Boyd, UBS: Inquired about partner revenue trajectory and seasonality. Pilette explained partner revenue is expected to continue outgrowing direct revenue and described ongoing portfolio expansion. Boyd also asked about free cash flow; CFO Derse responded, "Our free cash flow generation will continue to stay strong...we'll get back to being much, much more balanced across accelerated debt paydown and share repurchase."
* Dan Bergstrom, RBC: Asked about upselling momentum for higher-tier Norton 360 memberships. Pilette detailed integration of Norton Genie Pro and Norton Money as key drivers. Bergstrom also questioned customer addition strength; Pilette noted "very strong increase across all dimensions" and ongoing focus on subscription growth.
* Saket Kalia, Barclays: Asked about new business models in MoneyLion. Pilette said the team is balancing transaction-based and subscription models and aims for "long-term customer value." Kalia also queried MoneyLion profitability; Derse explained the segment started at approximately 20% margin, with cost synergies achieved and future growth requiring ongoing investment.
* Tomer Zilberman, BofA: Questioned MoneyLion’s growth sustainability. Pilette cited recent elevated performance but guided to a prudent 30% growth rate and 20% margin moving forward. Zilberman also asked about Cyber Safety business growth deltas; Derse clarified revenue reflects trailing bookings and pointed to ongoing growth levers.
* Meta Marshall, Morgan Stanley: Asked about AI impact and efficiency. Pilette described AI’s role in support, marketing, and R&D, and said Gen is "becoming an AI-first company." Marshall also asked about tax rate; Derse confirmed the 22% non-GAAP rate remains unchanged.
* Joseph Gallo, Jefferies: Inquired about cross-sell traction between MoneyLion and Gen Digital. Pilette noted early-stage efforts, especially embedding financial insights into LifeLock and launching MoneyLion features in the employee benefit channel. Gallo also asked about geographic performance; Pilette observed recent strength in Europe.

SENTIMENT ANALYSIS

* Analysts focused on sustainability of growth, partner revenue trajectory, cross-sell synergies, AI-driven efficiency, and geographic expansion. The tone was generally positive, with questions probing for details on execution and future potential.
* Management maintained a confident and upbeat tone in prepared remarks and during Q&A, emphasizing strong execution, integration progress, and innovation. Pilette used phrases like "We are ahead of plan" and "our opportunity has never been greater."
* Compared to the previous quarter, tone from both analysts and management remained confident, with increased emphasis on realized synergies and AI-driven productivity.

QUARTER-OVER-QUARTER COMPARISON

* The company raised fiscal 2026 guidance again, compared to a similar upward revision last quarter.
* MoneyLion’s integration progressed from initial focus on infrastructure to unlocking revenue synergies and launching cross-sell initiatives.
* Management continued to emphasize AI as a growth and efficiency driver, referencing increased automation across support, marketing, and R&D.
* Analysts shifted questions from initial integration and product synergy concerns to more detailed inquiries about business model transitions, partner revenue momentum, and regional performance.
* Core key metrics such as customer additions and segment margins remained strong and consistent with prior quarter trends.

RISKS AND CONCERNS

* Management cited a "rapidly evolving threat landscape" with AI-powered scams and identity theft as ongoing challenges.
* CFO Derse noted seasonally high cash outflows due to tax payments and timing of interest payments.
* Currency market volatility was highlighted as a factor in guidance assumptions.
* Analysts probed about sustainability of MoneyLion’s growth and the balance between transaction and subscription models.

FINAL TAKEAWAY

Gen Digital delivered another strong quarter with record revenue and earnings, driven by broad-based growth across its portfolio and momentum from the MoneyLion integration. The company is raising its fiscal 2026 revenue and EPS guidance, citing robust customer growth, disciplined cost management, and accelerating innovation through AI. Management highlighted continued progress in cross-selling, expanding partner channels, and embedding financial wellness features across brands, setting up the business for further growth and value creation in the digital security and fintech landscape.

Read the full Earnings Call Transcript [https://seekingalpha.com/symbol/gen/earnings/transcripts]

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