Gen Digital Inc.

of 27 percent as reported and up 9 percent pro forma. Four-year operating income was $2.5 billion, representing an operating margin of 51 percent. Four-year EPS was $2.56, up 15 percent year-over-year and at the high end of our guidance. We generated $1.5 billion in free cash flow, representing over 30 percent of revenue and up 26 percent year-over-year. We lowered our share count by 15 million shares and we have achieved three times net leverage a year ahead of schedule. We have exceeded expectations on all vectors and we are in a position of strength with great momentum heading into fiscal year 2027. Fiscal year 2026 was our seventh consecutive year of growth and reflects consistent execution in our core cyber safety business where we delivered on our mid single digit rate growth commitments laid out at our 2023 investor day. while also establishing trust-based solutions as a scaled, double-digit growth engine with an expanded portfolio, including secure financial wellness. In our cyber safety segment, bookings grew 5% and revenues grew 3% pro forma, while trust-based solutions delivered bookings growth of 24% and revenue growth of 23% pro forma. Segment margins were 61% for cyber safety and 30% for trust-based solutions, both in line with our targets. We delivered additional profit dollars while expanding our product portfolio with additional investment in innovation, notable increase in marketing funds, and disciplined investments in AI-related initiatives to support long-term growth, all while operating with a disciplined approach we are consistently recognized for as by running G&A at less than 3% of revenue. Our robust revenue growth, combined with continued operating discipline and strong capital allocation, drove full-year EPS of $2.56, up 15% year-over-year, which is the third consecutive year of double-digit growth. This underscores the strength and durability of our model and our cash generation, providing increased flexibility to return capital, deliver the balance sheet, and invest for strategic execution. Now turning to our Q4 results, we delivered another exceptional quarter exceeding the high end of our guidance, driven by record bookings and revenue, mid-teens EPS growth, and robust free cash flow. On a reported basis, Q4 bookings was $1.36 billion, up 27% year-over-year, and up 10% on a pro forma basis. Revenue was $1.28 billion, up 27% year-over-year, and up 9% pro forma. In our cyber safety segment, bookings grew 5% and revenue growth accelerated to 4%, driven by continued demand for our all-in-one subscriptions and the industry-leading retention rates of our highly loyal customer base. As AI-driven threats intensify, our portfolio is becoming increasingly relevant to our targeted audiences. Demand for our Norton 360 memberships is supported by rising scam and fraud activity and the risks consumers are facing in their digital lives. As customers choose to upgrade to more comprehensive protection, our higher tier memberships that include scam detection, identity protection, restoration and insurance serve their needs and now have surpassed half a billion dollars in annualized bookings. We continue to expand customer lifetime value through AI-driven cross-sell campaigns, delivering increasingly personalized messaging at key moments of truth with enhanced customer segmentation powered by the Gen platform. As a result, we drove Norton cross-sell bookings this quarter with penetration now exceeding 26% of the base. Our cohort level ARPU exiting fiscal year 26 is now seven to 10% higher than it was two years ago. Our go-to-market playbook is clearly working and is now further enhanced with the richness of the data and AI capabilities from our Gen platform. Looking ahead, we plan to further scale our AI cross-sell and upsell playbook across additional customer cohorts in fiscal year 27 as our platform capabilities continue to advance. As we drive growth across cyber safety, we're operating this segment at a 61% margin rate, focusing on driving efficiencies through AI initiatives while continuing to invest in growth and marketing opportunities. In our trust-based solution segment, bookings and revenue more than doubled as reported with the addition of financial wellness to our portfolio and grew 21% and 20% respectively on a pro forma basis. LifeLock remains a core pillar of our identity business, and we have meaningfully strengthened the proposition this year. Our reimagined lineup is simpler, more competitive, and more clearly aligned to customer needs with a three-tier portfolio that adds stronger credit and financial monitoring, differentiated scam protection, and clearer price-to-value trade-offs. We have also rolled out a more modernized product experience across customers, while LifeLock NPS has reached a record high. Early performance gives us confidence that the strategy is working, with monetization up, upgrades are stronger, and retention rates are improving across cohorts, with further upside in conversion and retention as the lineup reaches all channels, which we expect will drive sustainable accelerated growth. In Money Lion, consumer demand for our personal financial management products remained strong, and we saw record origination volumes in Q4. PFM transactions per customer increased in the quarter and demonstrates the durability and stickiness of our financial wellness portfolio, with over two-thirds of first-party Money Lion revenue coming from repeat customers. The engine marketplace had another standout quarter, adding new partners across financial services and digital publishing, while continuing to demonstrate the value of our scaled audience to premium distribution partners. Additionally, we're expanding the depth of engine with Jen's insurance category, adding more leading providers, bringing a data richness that will enable better programmatic matching between consumers and leading insurance carriers. This simplifies decision making and builds greater trust and choice across the engine marketplace while further expanding the value we bring to our customer base. Combined, overall money line achieved nearly 40% growth in Q4 and is rapidly approaching a billion dollars in annual revenue across these two categories. Moving to direct revenue, which grew 19% as reported and 7% pro forma, reflecting the continued strength of our highly recurring subscription business, our scaling first party portfolio, and ongoing innovation efforts. As mentioned above, Our unit economics remain sound with more customers, expanded ARPU, and strong retention when normalizing for mix. Our partner business grew 78% as reported and 20% pro forma, surpassing our investor day target and also approaching a billion dollar run rate through a combined acquisition growth in new partners and scaling with our existing partners. This remains our fastest growing channel and a durable growth driver as we execute on our strategy. We continue to drive broad-based growth in our paid customer base, now totaling 79 million customers, up from 78 million last quarter and 68 million a year ago. Growth remains broad-based across segments and channels with consistent growth in subscribers and product users generating revenue, supported by diversified acquisition channels and sustainable, healthy returns as we deploy our customer-centric growth flywheel. Turning to profitability, Q4 operating income was $641 million, up 9% year-over-year, and representing a 50% operating margin in line with our expectations. Our focus is growing profit dollars while maintaining stable margins in each segment. We will continue to invest in our strategic AI initiatives and our long-term strategic growth initiatives while remaining steadfast in driving further efficiencies in our business. Q4 net income was $408 million and diluted EPS was $0.67, above our guidance and up 14% year-over-year. This represents our 10th consecutive quarter of achieving or exceeding our 12% to 15% EPS growth target, reflecting our consistent execution and capital allocation. During the quarter, we reduced our weighted average ending share count to $609 million, down $15 million year-over-year. Interest expense was $122 million in Q4, and our non-GAAP tax rate remained steady at 22%. Turning to our balance sheet and cash flow, Q4 ending cash balance was $411 million, representing nearly $2 billion of liquidity when including our $1.5 billion revolver. We successfully refinanced our Term Loan A at lower rates of SOFR plus 1.375% and extended maturities of our TLA and Revolver to 2031. Please refer to slide 21 for our latest capital structure. We generated $452 million in operating cash flow and $449 million in free cash flow and we deployed nearly $500 million of capital for shareholders in a very disciplined, balanced manner including $200 million towards share repurchases of 9 million shares and $200 million of debt repayment. As I mentioned earlier, we exited the quarter with net leverage of three times EBITDA, achieving our target a year ahead of schedule. For Q1 fiscal 2027, the Board of Directors approved a regular quarterly cash dividend of 12.5 cents per common share to be paid on June 10, 2026. for all shareholders of record as of the close of business on May 11, excuse me, May 18, 2026. As we've consistently emphasized, our business generates substantial and durable free cash flow, providing us significant flexibility to simultaneously invest in growth, strengthen our balance sheet, and return meaningful capital to shareholders. Over the past three years, we have deployed nearly $6 billion in capital to these priorities, representing 122% of our cumulative free cash flow in a highly disciplined and balanced manner. Approximately 40% was deployed towards debt pay down and delivering, 40% towards shareholder returns through opportunistic share repurchase and our quarterly dividend, and the remaining 20% towards targeted tuck-in acquisitions that expand our capabilities and further accelerate growth. As our business continues to scale and free cash flow grows, so does our strategic flexibility and capacity for further capital deployment. We are entering fiscal 2027 with a stronger balance sheet, increased financial capacity, and multiple levers to drive shareholder value creation. Importantly, we have $2.1 billion remaining under our share repurchase authorization, and we will continue to drive a balanced approach. Now let me share our Q1 and fiscal 2027 outlook and some of the assumptions that underpin it. We expect full-year revenue in the range of $5.325 billion to $5.425 billion, translating to 8% to 10% pro forma growth. We expect non-GAAP EPS to be in the range of $2.85 to $2.95, which reflects mid-teens pro forma growth of 13% to 17%, with 15% at the midpoint. This guidance captures the momentum we have and represents our plan to accelerate growth through our transformed business. Building on our commitment to drive mid single digits in our cyber safety segment, combining a high growth financial wellness business and continued diversification through an expanded portfolio, we have constructed a high confidence growth path. We will acquire more customers, continue to expand our product portfolio. We will scale cross-sell and up-sell as customers' needs change. We will continue to optimize our subscription business model, bringing synergistic gains to market throughout fiscal year 2027. With the incremental net margin dollars from this accelerated growth and continued disciplined capital deployment to share buyback and debt paydown, we will accelerate EPS growth to mid-teens. This is our commitment to our shareholders. For Q1, we expect revenue in the range of $1.3 billion to $1.325 billion, representing 8 to 10 percent pro forma growth. We expect Q1 non-GAAP EPS to be in the range of 68 to 70 cents, representing mid-teens pro forma growth of 13 to 17 percent. This guidance assumes current FX rates through significant fluctuations remaining possible due to current volatility in financial markets. We will continue to monitor our operating environment and stay focused on what we can control. In summary, fiscal year 2026 was an exceptional year for GEN. We have accelerated our business growth with the same operating discipline you've come to expect from us over the years. Our high operating margin and outstanding free cash flow generation enabled disciplined investments in our innovation to further scale our business. I want to thank the entire GEN team for staying focused and delivering great value to our customers and shareholders. We are proud of our performance and we're excited to achieve even more in fiscal year 2027. As always, thank you for your time today and I will now turn the call back to the operator to take your questions. Operator?

We will now begin the question and answer session. If you would like to ask a question, please press star one to raise your hand. To withdraw your question, press star one again. We ask that you pick up your handset when asking a question to allow for optimum sound quality. And if muted locally, please remember to unmute your device. Please stand by while we compile the Q&A roster. Our first question comes from Mita Marshall with Morgan Stanley. Your line is open. Please go ahead. Great. Thanks so much.

And congrats on the quarter. You noted the paid base had a third or a third of the paid base was engaging with the financial wellness portfolio. Just kind of curious how you see that evolving or, you know, what you think that that target could kind of get to. And then just on the as a second question on the trusted access program or just kind of work with some of the other frontier models. You know, is there any kind of growth margin impact that we should be kind of embedding as a part of working with those?