Gen Digital Inc. Contingent Value Rights Q2 FY2026 earnings call

Management Statement and Operational Highlights

• Strong Financial Performance: Generated over $1.2 billion in revenue, up 25% year-over-year. Consumer fintech business MoneyLion grew 50%. Non-GAAP operating margin above 50% and non-GAAP EPS $0.62, up 15% year-over-year.
• Product Innovation: Expanded scam and deepfake protection, developed cyber safety assistant, refreshed privacy portfolio. AI integration across innovation, products, marketing, and customer experience, with 55% of text-based chat and 40% of voice-based interactions handled by customer support automation.
• Integration of MoneyLion: Smooth integration with cost synergies delivered ahead of plan, unlocking revenue synergies by unifying data systems. Early adoption of financial wellness features in selected brands like LifeLock and Norton.

Segment Performance

• Cyber Safety Segment: Bookings grew 5% year-over-year with a robust operating margin of 61%. Revenue for the segment was up over 3% with broad-based growth across channels.
• Trust-Based Solutions Segment: Revenue was up over 25% on a pro forma basis, with operating margin at 30% target. MoneyLion's personal financial management solutions scaled significantly, and the Engine financial marketplace had fourth consecutive quarter of growth over 50%.

Guidance

• Annual Guidance: Raised full-year 2026 revenue to $4.92 billion to $4.97 billion (previously $4.8B to $4.9B), representing 25%-26% growth. Non-GAAP EPS expected $2.51 to $2.56.
• Q3 Guidance: Expect non-GAAP revenue $1.22 billion to $1.24 billion, non-GAAP EPS $0.62 to $0.64 (12%-15% growth year-over-year). Assumes high single-digit pro forma growth, disciplined cost management, and funding long-term growth investments.

Risks

• Cyber Threats: Rapidly evolving threat landscape including AI-powered phishing, deepfakes, etc., with financial impact rising.
• Macroeconomic Factors: Potential impact on consumer spending and behavior, though no significant correlation seen to security revenue streams so far.
• Currency Fluctuations: Significant fluctuations possible given volatility in currency markets.

Question and Answer

• **Q: Rob Coolbrith on macro environment and segment impact.

A: Vincent Pilette discussed cyber threats continuing, security revenue not correlated to downturns, and secure financial wellness demand remaining strong.

• **Q: Roger Boyd on partner revenue trajectory.

A: Vincent Pilette said partner revenue will outgrow direct, with continued interest from financial partners.

• **Q: Dan Bergstrom on Norton 360 upselling.

A: Vincent Pilette talked about AI-driven cyber safety assistant and new features like Norton Money driving upselling.

• **Q: Saket Kalia on MoneyLion business model.

A: Vincent Pilette discussed transition from transaction-based to subscription-based revenue while maintaining growth.

• **Q: Tomer Zilberman on MoneyLion growth and Cyber Safety customer adds.

A: Vincent Pilette noted MoneyLion growth may moderate to 30% but will capture acceleration, and Cyber Safety customer adds driven by engagement and innovation.

• **Q: Meta Marshall on AI utilization and tax impact.

A: Vincent Pilette discussed AI use in product features, workflows, and marketing, and Natalie Derse noted tax rate remains steady at 22%.

• **Q: Joseph Gallo on cross-sell opportunities and geos.

A: Vincent Pilette talked about early cross-sell traction in LifeLock and employee benefits, and strong growth in Europe.