Gen Digital Inc.

Good afternoon, everyone. Thank you for standing by. My name is Victoria, and I will be your conference operator today. This call is being recorded, and all lines are in place 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.

Thank you, Victoria, and good afternoon, everyone. Welcome to Jen's second quarter fiscal year 2025 earnings call. Joining me today are Vincent Pellet, CEO, and Natalie Dursey, CFO. As a reminder, there will be a replay 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 metrics 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. Today's call contains statements regarding our business, financial performance and operations, including the impact of 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 current beliefs, assumptions, and expectations as of today's date, October 30th, 2024. 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 statement 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. And now, I'll turn the call over to Vincent.

Thank you, Jason. Q2 was another solid quarter of consistently executing on our strategy, meeting our commitments for profitable growth, while continuing our investment to meet the long-term consumer needs of ever-expanding digital lives. We delivered another quarter of mid-single-digit bookings growth of 5%, our highest growth rate since the Avast acquisition, and a double-digit earnings per share growth of 16%. We also grew our direct paying customers by 400,000 in the quarter, now at a record 39.7 million. Those results are a testament to the solid, disciplined, and consistent execution of our team. On top of that, it is also a clear reflection of what we have talked about for many quarters. People are being exposed to an accelerating threat environment, and their awareness is growing with every new breach and scam, text, or email. Those trends are here to stay and are being enhanced by the use or misuse of AI. As consumer awareness grows, we stand ready to empower your digital lives with the most innovative and easy-to-use solutions that secure and protect your identity and your R-turned assets. It is easy to get desensitized to news of yet another breach, but the impact recently is truly staggering. In August, the US national public data breach exposed an estimated 270 million social security numbers practically two-thirds of all social security numbers ever issued, leaving one out of three Americans at risk of identity attacks. The scale and the frequency of breaches, along with the sophistication and volume of phishing emails and scams, makes everyone vulnerable. As we shared in our last report around rising election scams, even young adults who are expected to be the saviors online are proving to be susceptible at higher rates. This unfortunate reality is a big part of why our team at Gen is so mission-driven. We believe that no matter how good these cybercriminals get, our goal is to give you the tools and the solutions that empower you to live your digital life without worry. Delivering digital freedom and peace of mind is no small task, so every day we are focused on upping our game. Just about a year ago, a threat team and technology detected the growing threats of personalized scams at high volumes and quickly delivered our Genie anti-scam product. Powered by AI, Genie was the first embodiment of the future of digital freedom. Not only does it interact with you in an accessible and intuitive way, it also continually learns and adapts with every interaction. Today, we have over 1.6 million downloads, and its overall efficacy is approaching 100%. Gene is a great example of how we continue to put innovative solutions in the hands of consumers, but it is just the start. In the coming course, we plan to enhance the product and expand this anti-scam technology into our core offerings. More to come on that front. Protecting consumers from scams is one of the biggest attack vectors, but as I mentioned earlier, breaches pose an entirely different threat and are also on the rise. Breaches put you, your information, and your art and assets at risk, and it generally happens through no fault of your own. Data you provided to your favorite stores, your healthcare provider, your banks, and the government is being put on the dark web. And as the breaches proliferate, cyber criminals are stitching together different pieces of information to increase their ability to successfully steal your identity or target you for sophisticated and personalized scams. No one is immune. And if you don't believe me, I challenge you to go out and try our free lifelong data exposure scan, and I'm sure you will be surprised at how much of your information is out there and available. That constant growing threat is why we are continuously investing in and innovating around how we keep your financial assets, your personal information, and your reputation safe. No one is better at helping a victim recover from identity theft than LifeLock. We invented the category, and we have a world-class restoration team that helps repair the damage. But we want to also be sure that we can stop things earlier. That's why we have alert algorithms and full spend tracking through financial monitoring features to keep you aware and safe in real time. We recently released Credit Insights to our LifeLock customers as part of our strategy to address the customer needs to keep their finances safe online. This new LifeLock feature provides customers with contextual information to better understand what factors impact their credit score with actionable insights to build or improve their credit rating all the time. From spend tracking to helping you better manage your subscription spending or virtual secure credit card, we see an increase in demand for trust-based services and will continue to expand what we do for consumers in that area. So they feel empowered to manage their finances confidently, achieve financial freedom, and thrive in their digital journeys. We see a long runway of growth with meaningful opportunities to expand in each pillar of of our consumer cyber safety portfolio as we continue to innovate and execute. In Q2, we grew cyber savings bookings over 5% driven by strong momentum in identity where bookings were up 8% year-over-year. We also drove double-digit growth in new customer acquisitions, maintained solid momentum in upselling into identity memberships, and continued expanding our partnership network. With so much opportunity in front of us, we will continue to invest to serve the expanding needs of consumer, whether that be adding to our AI capabilities to better match our services to our customers and deliver more intuitive and engaging experiences from them, or through innovation into new and existing products, or even expanding our reach to new markets for services like identity theft protection. Even with the most comprehensive solutions in the market, we know we can't rest, so expect us to delivering innovation and more engaging experiences to our customers. While we remain focused on the future and innovation, operating with discipline and meeting our commitments are core parts of our gen DNA. Operating KPIs remain very healthy, supporting yet another quarter of double-digit growth in non-GAAP earnings per share, which includes many of our investments for long-term growth. Since our investor day last year, where we laid out our long-term goals of accelerating growth to the mid-single digit and driving non-GAAP EPS growth of 12% to 15%. We have consistently executed and delivered on our commitments. We are pleased with our Q2 results and excited about what we can deliver in the future. As a result, we strengthened our annual guidance and we are making steady progress towards achieving the three-year financial goals we shared at our investor day last November. We are passionate about our mission to empower and protect every aspect of your digital life, and we're confident that our focus on the customers, our pace of innovation, and our disciplined execution will enable us to achieve our goals to drive shareholder value. And with that, let me pass it on to Natalie to review our financial performance in detail.