Gen Digital Inc.

that during this call all references to the financial metrics are non-gap and all growth rates are year over year unless otherwise stated a reconciliation of non-gap to gap 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 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 current beliefs, assumptions, and expectations as of today's date, May 6, 2025. 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 10-2. And now I'll turn the call over to Vincent.

Thanks, Jason, and good afternoon, everyone. I appreciate you taking the time to be with us today as we share our Q4 results, review our fiscal year 2025 performance, and share our plans for the upcoming year. Fiscal 2025 was a transformative year for Jen. and our results demonstrate the significant progress we have made in driving accelerated growth in a profitable manner. We continue to execute on our strategy to delivering the best cyber safety solutions to our customers, investing to drive innovation across our portfolio, and growing our customer base, all while maintaining strong financial discipline. Q4 marks another quarter of mid-single-digit top-line growth, up 5%, a 23rd consecutive quarter of growth, another quarter of customer count growth, and double-digit growth in earnings. Our reliable and consistent execution may seem easy, but it is not. And I'm very proud of our team for their drive to protect our customers with passion and care every day. Nathalie will walk you through the details of Q4 in a moment, but I would like to first summarize our fiscal 25 financial results and further expand on our operating plans for this coming fiscal year. In fiscal 2025, total bookings was a record $4 billion, up 4% year-over-year, with the revenue above the high end of our annual guidance. The growth was broad-based, driven across our core cyber safety offerings, security and privacy, as well as in identity theft protection, a market-leading trust-based solution. Our accelerating top-line growth was underpinned by a record non-GAAP operating margin of 58.4%, reflecting a strong cost controls and continued operational efficiencies, including leveraging AI in and for our product portfolio. Non-GAAP EPS of $2.22 was also a record at 15% year-on-year and at the high end of our annual guidance. To round out these strong results, our business remains a robust cash flow generator with unlevered free cash flow of nearly $2 billion. Throughout the year, we continue to delever, finishing Q4 with a net leverage of 3.2 times EBITDA and an interest expense coverage ratio of over 4.5, representing a very comfortable financial debt position, especially considering our exceptionally strong operating margins and free cash flow generation. Mid-single-digit top-line growth, double-digit EPS gains, and net leverage reduced to nearly three times EBITDA, as well as a record direct customer count, all demonstrate the significant progress we have made in achieving the long-term commitments shared at our investor day in 2023. More importantly, and beyond the financial results, consumers need our solutions given the dynamic threat landscape, which shows no signs of slowing. We are committed to increasing the pace of our innovation and expanding our geographic reach and channels to bring our cyber safety platform and trust-based solutions to everyone. During fiscal year 2025, the consumer cyber safety landscape continued to evolve with AI-powered threats becoming increasingly sophisticated and widespread. AI is now used to generate scam websites, clone voices for scam calls, or create deepfakes for impersonation scams, like a romance scam. Hyper-personalized scams, like deepfake WhatsApp video calls from a relative or colleague, are fueled by widespread breaches that give the threat actors new personal data. In the meantime, ransomware attacks are still very active and have evolved with attackers no longer just encrypting data, but now also using it to extort their victims. Our research shows incidents targeting consumers and very small businesses have more than doubled over the past year, with scams now accounting for over 80% of consumer cyber incidents. This underscores the critical need for smarter AI-driven anti-scam technologies that can analyze behavior in real time and stop attacks before they impact consumers. This year, we significantly enhanced our AI-driven threat detection capabilities with key investments, not only in enhancing our existing security engines, which now covers all Gen brands, but also in developing new engines to expand our protection leadership across additional channels, like SMS, emails, or phone calls. In Q4, we launched GenieScan protection in our Northern Cyber Safety products to help defend against phony calls, texts, emails, or websites. Northern Genie has significantly boosted our overall scam detection efficacy by as much as tenfold since its release. Genie marks a significant advancement in our threat detection and defense, and is a true AI-powered cyber safety companion that not only proactively protects people, but also serves as a personal scam AI agent that educates and guides people on how to keep their data and assets safe. Our Norton 360 platform continues to resonate strongly in global markets, particularly as we added GenieScan protection, refreshed our user interface, and migrated our technology to our new gen stack. These enhancements not only improve the user experience, but also enable faster innovation and a unified data set across products and brands, allowing us to better personalize communications and product recommendations. With the Northern migration now essentially complete, we will focus on delivering an enhanced experience to Avast customers next. In parallel, our identity theft protection products and solutions have contributed meaningfully to our fiscal year 25 growth with increased demand for LifeLock following heightened consumer awareness after major breaches like the national public data breach. We give consumers peace of mind by helping protect their personal data by providing real-time alerts and visibility when the data is exposed, and loss protection should they need it. We enhanced our offering with credit score insights, easier onboarding, financial alerts, and even introduced access to credit cards and saving accounts based on customers' digital and financial reputation. We have invested in personal data vaults, privacy dashboards, and proactive security updates. LifeLock's 4.8 rating across Trustpilot and the App Store demonstrate the value that our customers see in these offerings and investments. Beyond the strong focus on innovation, we continue to expand our geographic and channel reach by entering new markets. Privacy and identity products were introduced into 15 new markets with encouraging early results, and overall identity category grew double digits internationally. We also doubled down on our partner program, signing up many new accounts, gaining share in Latin America and other emerging markets, as well as expanding our share of wallet in the employee benefit program. As a result of both accelerated innovation and expanded reach, we grew our direct customer count by 1.3 million to over 40 million direct paid customers and a total of over 65 million direct and indirect paid customers, in addition to hundreds of millions of premium users. And now, nearly 45% of our direct customers have comprehensive cyber safety memberships, reflecting the increasing value of our expanding product portfolio. With our leading and foundational cyber safety platform firmly established, we started to invest in developing additional trust-based adjacencies beyond our core identity protection solutions. After connecting their personal identifiable information and linking their financial accounts for fraud detection, our customers began asking for deeper insight into their financial position and additional ways to benefit beyond just protection, alerts, and restoration. What began as an organic effort to provide more financial insight to a lot of customers ultimately led to the acquisition of Moneyline, which closed a couple of weeks ago. This transaction expands our TAM, accelerates our entry into a financial wellness market, and further enables us to address new consumer needs to accelerate growth. MoneyLion provides the technology and the architectural backbone of our personal financial management, banking, and investing solutions, and delivers a wide-label marketplace to match millions of consumers with thousands of financial service offerings from hundreds of partners. Leveraging our deep consumer insight, Gen will be a trusted ally, empowering them to make well-informed decisions that significantly improve their financial well-being. And we're thrilled to welcome Moneyline to the Gen team. Although we just closed the transaction, we're already making progress on integrating Moneyline into Gen. We're applying our proven operational discipline with a continued focus on driving profitable growth. Operational synergies are targeted at funding growth and improving Moneyline operational margin from around 15% of it to over 20% in fiscal year 26. To ensure financial prudence, we've structured the business with a forward flow model supporting the Instacash product, which shifts short-term loans to other financial partners who service them and eliminating any balance sheet exposure to GEMs. In parallel, We're embedding key money line capabilities like banking and marketplace into new LifeLock and Northern Financial Wellness features planned to launch throughout fiscal year 2026. This strategic move enables us to accelerate pro forma growth post acquisition, and we look forward to providing further updates throughout the year. To maintain our pace of innovation, focus, and operational discipline, We are organizing our business around two key segments. A cyber safety platform segment will consist of our award-winning security and privacy offerings. A mission in the cyber safety platform segment is to provide advanced technology and threat protection that helps customers navigate the digital world securely, privately, and confidently. This segment has a growth potential of mid-single digit and approximately 60% long gap operating margin. We are accelerating the adoption of Genie, our AI-powered anti-scam solution, which is driving membership growth and upgrades to higher tiers plans. Our new GenStack, which features AI-driven dynamic segmentation and a reimagined customer journey, is set to boost customer lifetime value. As we move forward, our continued solid mid-single digit growth in security and privacy will be supported by key initiatives such as AI-powered scam protection, Mobile and privacy-first entry points, international expansion, and partnerships branded a white label. Our second segment, trust-based solutions, will include both identity and financial wellness offerings. In this segment, our mission is to deliver innovative solutions and insights that empower consumers to manage their identity, reputation, and finances with confidence and freedom. This segment has a high single-digit revenue growth potential and a non-GAAP operating margin target in excess of 30% as we scale up financial wellness. We enter fiscal year 26 with strong momentum in our identity and reputation business, gaining traction by expanding our customer base through increased risk awareness campaigns in both the U.S. and international markets, through distribution channels like employee benefits, and scaling up strategic partnerships. We expect to grow ARPU and open new channel opportunities to an expanded value proposition that includes embedded financial wellness features. The acquisition of Moneyline presents a powerful opportunity to bring financial wellness to all of GEN's 65 million paid customers and hundreds of millions of users. Initiatives for fiscal year 26 include integrating Moneyline's financial marketplace into our U.S. customer base, expanding partnership with credit bureaus and financial institutions to deliver personalized solutions, and launching our financial wellness company to help our customers make smarter and more informed financial decisions. It's definitely an exciting time, and we're just getting started. When I think about the opportunities our newly formed trust-based solutions segment provides and combine them with the growth and momentum exiting fiscal year 2025, I could not be more excited by our prospects. As you will hear from Natalie, we're guiding fiscal year 2026 revenue to be between 4.7 and 4.8 billion, representing 6% to 8% pro forma growth. To sum it all up, we're proud of all we accomplished in fiscal year 25, and we're looking forward to building on this momentum in the years ahead. Gen is very well positioned to lead in a world where digital safety and trust are more important than ever to consumers. People are asking to do more with their data, so being empowered and enabled by the best-in-class cyber safety platform and trust-based solutions is even more critical. We remain very focused on delivering value to our customers, our employees, and our shareholders. So thank you for your continued support, and I will now pass it to Nathalie, who will share more details on our financial performance and our financial outlook.

Thank you, Vincent, and hello, everyone. It's a very exciting time for Gen Z. We've made significant progress in transforming our business over the past five years, and now we are thrilled to welcome the Moneyline team into our portfolio. With the financial wellness capabilities gained through this acquisition, we're extending our momentum in the fiscal year 2026. For today's call, I will walk through our full year fiscal 2025 results, followed by our Q4 results, and share our outlook for Q1 and fiscal year 2026. I will focus on non-GAAP financials and year-over-year growth rates unless otherwise stated. Fiscal year 2025 was a defining year for Jen as we posted our sixth straight year of growth while continually delivering on our guidance commitments and now positioning ourselves for further acceleration with our acquisition of Money Lion. Our results demonstrate the significant progress we're making across the five growth levers that we shared in our 2023 Analyst Day resulting in broad-based growth across our brands, regions, and expanding product portfolio. Total bookings for the year were $4 billion, up 4% in both constant currency and cyber safety, and up 3% in USD. We finished with $3.935 billion in total revenue, also growing 4% in USD and constant currency. Operating income was $2.3 billion, and operating margin was 58.4%. Our robust revenue growth combined with our operating discipline and capital allocation enabled us to deliver $2.22 in full-year EPS at the high end of our guidance and up 14% year-over-year as reported and up 15% in constant currency. Turning to Q4 performance, Q4 was a record quarter, reflecting our 23rd consecutive quarter of growth with financial results at or above the high end of our guidance. Q4 bookings was $1.08 billion, up 5% in constant currency. Total Q4 revenue exceeded the billion-dollar hurdle for the first time at $1.01 billion, up 5% in USD and in constant currency. We saw broad-based growth across the product portfolio and markets. Our direct KPIs remain healthy, and our partner channels are scaling through identity adoption. I'll now walk through the results in more detail. Direct revenue was $877 million, up 4% in constant currency. A key ingredient to our growth strategy is driving net new customers. And in Q4, we expanded our customer base for the seventh consecutive quarter, increasing to 40.4 million, up over 300,000 sequentially, and up 1.3 million year over year. Our growth is driven by our diverse set of customer acquisition channels, particularly international growth markets and through mobile app stores. While the unit economics vary across channels, our strategy is to reach these customers early in their cyber safety journey and leverage our brands, a comprehensive product set and leading customer service to drive long-term loyalty and healthy returns. Our playbook is working as customer retention is improving at the cohort level and our overall retention rate increased slightly year-over-year to 78%. As we continue to provide reliable, comprehensive protection, enhance our Norton 360 memberships, and expand financial wellness features in our identity offerings, we are driving long-lasting customer relationships and increasing customer lifetime value. On monetization, our monthly direct ARPU was $7.27 in USD in line with the previous quarter and up five pennies from last year's result. This result absorbs about a penny of negative FX headwinds sequentially and about two pennies of negative FX headwinds year over year. We are growing ARPU mid-single digits in our online customer base, primarily through increased cross-sell penetration in our Norton base and increased Norton 360 membership adoption. Approximately a quarter of our Norton base now has more than one product, an improvement of five points since last year and progressing towards our goal of 30% penetration. As demand for increased cyber protection grows with the threat landscape, we are well positioned to provide customers with a targeted point solution or provide them with an option to move to a higher tier, comprehensive, cyber safety membership offering. Now nearly 45% of our direct customer base has a membership offering that provides even greater peace of mind. This is where the breadth and depth of our portfolio shines, and we will continue to drive higher monetization with our product innovation efforts. In our mobile base, we are growing R2 double digits, which has primarily been driven by higher Norton 360 membership adoption. The recent in-product messaging capabilities we have embedded into our mobile products are enabling us to engage more closely with the customer during their purchasing journey, driving higher sales conversion and a larger percentage of new mobile customers who purchase our Norton 360 membership. Whether it's through first purchases, cross-sells, upsells, we have a proven track record of driving increased share of wallet and customer lifetime value after initial purchase. with a tailored growth flywheel and playbook for each diverse customer acquisition channel. Turning to our partner business, partner revenue was $121 million in Q4, up 15% year over year. This acceleration was primarily driven by record growth in our employee benefits channel during open enrollment. New sales in open enrollment increased by over 75%, driven by the strong and healthy pipeline we've built over time and employers are increasingly turning to our offerings to protect their employees' identity and protection. We're seeing a substantial increase in employers paying direct for our services as a benefit, as opposed to offering it as a voluntary benefit to be elected by their employees, which results in higher conversion rates. Through our telco partnerships, we're driving further expansion momentum of our identity offerings internationally. We are proud of the traction we're making as we leverage these partner channels to expand our reach, and we look forward to sharing more progress in the coming quarters. Rounding out revenue, our legacy business lines contribute about $12 million this quarter, down from $15 million in prior year, as expected. Turning to profitability, Q4 operating income was $590 million, translating to an operating margin of 58.4%. You will see us continue to invest in product and technology as well as marketing with our consistent, disciplined approach. We invest to bolster our product portfolio with differentiated solutions to reach new and existing customers, to extend our international presence, especially in identity and privacy, and expand into trust-based adjacencies that will touch more parts of the consumer's digital and financial life. Q4 net income was $366 million, up 10% year-over-year. The looted EPS was 59 cents for the quarter, up 12% year-over-year, and up 13% in constant currency. Interest expense related to our debt was approximately $129 million in Q4. Our non-GAAP tax rate remained steady at 22%, and our ending share count was 624 million. down 13 million year-over-year, reflecting the impact of share repurchases. I'd like to now review a few items related to our balance sheet and cash flow, including our recent debt refinancing and material cash activity since our last earnings call, including our money line acquisition. Before ending cash balance was just over a billion dollars, with over 2.5 billion of liquidity when including our 1.5 billion revolver. Before operating cash flow was $473 million and free cash flow was $470 million and net leverage was 3.2 times. At the end of February, we issued $950 million in secure, senior unsecured notes with a coupon of 6.25% due in April 2033. And we paid off our $1.1 billion 2025 note with the proceeds. Following our fiscal year end, we secured an additional $750 million of TLB with an interest rate of SOFR plus 175 basis points due April 2032 and paid approximately $1 billion in cash for the money line acquisition. We have no material debt due until fiscal 2028. For more detail about our capital structure, please refer to the appendix slide in our earnings presentation. We paid $77 million to shareholders in the form of our regular quarterly dividend of 12.5 cents per common share. For Q1 fiscal 2026, the Board of Directors approved a regular quarterly cash dividend of 12.5 cents per common share to be paid on June 11, 2025, for all shareholders of record as of the close of business on May 19, 2025. Since the start of fiscal year 23, we have deployed a total of $1.6 billion of share repurchases, over $2 billion for debt pay down, and $950 million for dividends, totaling 4.6 billion. As a reminder, our current buyback program has 2.7 billion remaining with no expiration date. We will also continue to drive net leverage to less than three times EBITDA by the end of fiscal 2027 for our balanced capital allocation strategy and accelerating growth. Before turning to fiscal 2026, I'd like to sincerely thank the GEN team for your hard work and dedication in all we've accomplished, not only this past fiscal year, but throughout the past five. With the acquisition of Money Lion, we're taking the next step in our journey, expanding into financial wellness and trust-based solutions which opens an even greater opportunity to drive profitable, accelerating revenue growth while maintaining the same operating discipline that will continue to drive increasing value for our customers, our employees, and our shareholders. I couldn't be prouder of the team, and I look forward to this next chapter of our journey together. Now let me provide some color on how we will operate and report on our business moving forward. As Vincent mentioned, we will operate with two business segments. cyber safety platform, and trust-based solutions. While our top financial priority remains driving accelerating and profitable growth for total gen, this new segmented approach will drive a differentiated focus embedded in our product innovation, resource prioritization, and our go-to-market approach, always keeping the customer at the center of all we do. The two key metrics we will use internally to measure performance in these segments are bookings, and non-GAAP operating margin. We prioritize these metrics because bookings reflects all the aspects of our growth framework, be it new customer acquisition, cross-sell, upsell activity, renewals, partner expansion, and the value we deliver to our customers every day. Operating margin reflects our overall efficiency, encompassing marketing investments, sales activities, product innovation, and our strong history of delivering profitable growth. To provide greater visibility to investors, we will report our bookings and operating margin for cyber safety platform and trust-based solutions on a quarterly basis. Now let me share our Q1 and fiscal 2026 outlook and some of the assumptions that underpin it. We enter fiscal 2026 in a strong financial position with a strategic growth framework. Despite general macroeconomic uncertainty, our business remains resilient, bolstered by a highly recurring revenue base, strong customer retention, and global diversification. We are further supported by the dynamic threat landscape and, to an extent, the current economic backdrop, both of which reinforce the need for a world-class cyber safety platform and trust-based solutions built on top. For fiscal year 2026, we expect full-year revenue in the range of $4.7 billion to $4.8 billion, translating to 6% to 8% pro forma annual growth. We expect non-GAAP EPS to be in the range of $2.46 to $2.54 per share, representing double-digit growth of 12% to 15% for the year. For Q1, we expect non-GAAP revenue in the range of $1.18 billion to $1.21 billion, translating to approximately 5% to 7% pro forma year-over-year growth. We expect Q1 non-GAAP EPS to be in the range of 59 cents to 61 cents, representing double-digit growth of 12% to 15% in constant currency. Note that this fiscal year includes an extra week in Q1, which will increase our reported Q1 and four-year revenue, offset by Money Lion pre-acquisition stub revenue and business model transition. This guidance also assumes current FX rates through significant fluctuations remain possible, given the current volatility in financial markets. We will continue to monitor our operating environment and stay focused on what we can control. Our initial outlook captures a range of outcomes with the midpoint representing our base case. In summary, fiscal year 2025 was a breakthrough year for Jen, and we're excited about our plans for fiscal 2026. We're accelerating growth with the same operating discipline you've come to expect. Our margins remain exceptional. enabling disciplined investments in our growth and innovation initiatives to further scale our business. And our free cash flow generation is robust, creating capacity for ongoing opportunistic share repurchases and further delivering to drive strong returns for 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.