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Gen Digital (GEN) Beats on Q4 Earnings and Revenue Estimates
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Gen Digital Inc. (GEN - Free Report) reported better-than-expected fourth-quarter fiscal 2023 results.
Gen Digital was formerly known as NortonLifeLock Inc. and was trading under the NLOK ticker symbol. NortonLifeLock changed its name and ticker symbol, effective from Nov 8, 2022, following the completed merger of NortonLifeLock and Avast Plc. The newly named company unites trusted consumer safety brands, including Norton, Avast, LifeLock, AVG, Avira, CCleaner and ReputationDefender.
Coming to the fourth-quarter performance, Gen Digital reported non-GAAP earnings of 46 cents per share, which surpassed the Zacks Consensus Estimate of 43 cents. The bottom line remained flat on a year-over-year basis.
The company’s quarterly non-GAAP revenues increased 32% year over year to $948 million, which surpassed the Zacks Consensus Estimate of $937 million. On a constant-currency basis, revenues increased 35% year over year.
The robust top line was mainly driven by the inclusion of the Avast business, improved customer experiences and international business expansion. However, the negative impact of unfavorable foreign currency exchange rates hurt revenues by approximately $21 million.
Direct customer revenues increased 32% year over year to $831 million. Partner revenues improved by 35% to $100 million.
Gen Digital Inc. Price, Consensus and EPS Surprise
The direct monthly average revenue per user increased to $7.24 from $7.09 in the previous quarter. The quarterly bookings advanced 29% on a year-over-year basis to $1.02 billion.
Gen Digital’s average direct customer count decreased to 38.2 million from 38.4 million in the year-ago quarter. Before the Avast acquisition, NortonLifeLock’s customer retention rate was slightly more than 85%. However, including Avast’s customer base and online customers, the aggregate retention rate for Gen Digital fell to 76% at the fourth-quarter end.
The non-GAAP gross profit grew 31% year over year to $816 million. Moreover, the gross margin expanded by 90 basis points (bps) to 86.1%.
The non-GAAP operating income in the fourth quarter of fiscal 2023 totaled $541 million, up 38% year over year. The non-GAAP operating margin expanded by 260 bps to 57.1%, mainly due to cost synergies resulting from the NortonLifeLock and Avast merger and disciplined spending, partially offset by a lower gross margin.
Non-GAAP operating expenses increased 18% year over year to $275 million. However, as a percentage of revenues, non-GAAP operating expenses reduced by 350 bps to 29%.
Non-GAAP EBITDA soared 184.9% year over year to $453 million. Meanwhile, the non-GAAP reported EBITDA increased 38.7% to $548 million.
Balance Sheet & Other Details
Gen Digital exited the fourth quarter with cash and cash equivalents of $750 million compared with the previous quarter’s $812 million. The long-term debt was $9.53 billion, down from $9.83 billion in the previous quarter.
The company generated operating and free cash flows of $324 million and $323 million, respectively, in the fourth quarter of fiscal 2023. In fiscal 2023, it generated operating and free cash flows of $757 million and $751 million, respectively.
In the fourth quarter, Gen Digital did not repurchase stocks but paid out $80 million in dividends. In fiscal 2023, it bought back common stocks worth $904 million and paid out $314 million in dividends. GEN authorized a quarterly cash dividend of $0.125 per share, payable on Jun 14 to shareholders of record as of May 22.
First-Quarter Fiscal 2024 Guidance
For the first quarter of fiscal 2024, Gen Digital anticipates revenues in the band of $940-$950 million. The company projects non-GAAP earnings between 45 cents and 47 cents in the first quarter.
Zacks Rank & Stocks to Consider
Currently, Gen Digital carries a Zacks Rank #3 (Hold). Shares of GEN have declined 19.9% year to date (YTD).
The Zacks Consensus Estimate for Meta's second-quarter 2023 earnings has been revised 36 cents northward to $2.79 per share in the past 30 days. For 2023, earnings estimates have been revised 12.6% upward to $11.76 per share in the past 30 days.
Meta’s earnings beat the Zacks Consensus Estimate twice in the preceding four quarters while missing the same on two occasions, the average surprise being 15.5%. Shares of META have surged 96.3% YTD.
The Zacks Consensus Estimate for Manhattan Associates' second-quarter 2023 earnings has been revised upward by a couple of cents to 72 cents per share for the past 30 days. For 2023, earnings estimates have moved upward by 17 cents to $2.87 per share in the past 30 days.
Manhattan Associates' earnings beat the Zacks Consensus Estimate in the preceding four quarters, the average surprise being 33.6%. Shares of MANH have soared 40.6% YTD.
The Zacks Consensus Estimate for Wix.com’s first-quarter 2023 earnings has remained unchanged at 23 cents per share over the past 60 days. For 2023, earnings estimates have been unchanged at $1.49 per share in the past 60 days.
Wix.com's earnings beat the Zacks Consensus Estimate thrice in the preceding four quarters while missing the same on one occasion, the average surprise being 225%. Shares of WIX have increased 1% YTD.
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Gen Digital (GEN) Beats on Q4 Earnings and Revenue Estimates
Gen Digital Inc. (GEN - Free Report) reported better-than-expected fourth-quarter fiscal 2023 results.
Gen Digital was formerly known as NortonLifeLock Inc. and was trading under the NLOK ticker symbol. NortonLifeLock changed its name and ticker symbol, effective from Nov 8, 2022, following the completed merger of NortonLifeLock and Avast Plc. The newly named company unites trusted consumer safety brands, including Norton, Avast, LifeLock, AVG, Avira, CCleaner and ReputationDefender.
Coming to the fourth-quarter performance, Gen Digital reported non-GAAP earnings of 46 cents per share, which surpassed the Zacks Consensus Estimate of 43 cents. The bottom line remained flat on a year-over-year basis.
The company’s quarterly non-GAAP revenues increased 32% year over year to $948 million, which surpassed the Zacks Consensus Estimate of $937 million. On a constant-currency basis, revenues increased 35% year over year.
The robust top line was mainly driven by the inclusion of the Avast business, improved customer experiences and international business expansion. However, the negative impact of unfavorable foreign currency exchange rates hurt revenues by approximately $21 million.
Direct customer revenues increased 32% year over year to $831 million. Partner revenues improved by 35% to $100 million.
Gen Digital Inc. Price, Consensus and EPS Surprise
Gen Digital Inc. price-consensus-eps-surprise-chart | Gen Digital Inc. Quote
Quarterly Details
The direct monthly average revenue per user increased to $7.24 from $7.09 in the previous quarter. The quarterly bookings advanced 29% on a year-over-year basis to $1.02 billion.
Gen Digital’s average direct customer count decreased to 38.2 million from 38.4 million in the year-ago quarter. Before the Avast acquisition, NortonLifeLock’s customer retention rate was slightly more than 85%. However, including Avast’s customer base and online customers, the aggregate retention rate for Gen Digital fell to 76% at the fourth-quarter end.
The non-GAAP gross profit grew 31% year over year to $816 million. Moreover, the gross margin expanded by 90 basis points (bps) to 86.1%.
The non-GAAP operating income in the fourth quarter of fiscal 2023 totaled $541 million, up 38% year over year. The non-GAAP operating margin expanded by 260 bps to 57.1%, mainly due to cost synergies resulting from the NortonLifeLock and Avast merger and disciplined spending, partially offset by a lower gross margin.
Non-GAAP operating expenses increased 18% year over year to $275 million. However, as a percentage of revenues, non-GAAP operating expenses reduced by 350 bps to 29%.
Non-GAAP EBITDA soared 184.9% year over year to $453 million. Meanwhile, the non-GAAP reported EBITDA increased 38.7% to $548 million.
Balance Sheet & Other Details
Gen Digital exited the fourth quarter with cash and cash equivalents of $750 million compared with the previous quarter’s $812 million. The long-term debt was $9.53 billion, down from $9.83 billion in the previous quarter.
The company generated operating and free cash flows of $324 million and $323 million, respectively, in the fourth quarter of fiscal 2023. In fiscal 2023, it generated operating and free cash flows of $757 million and $751 million, respectively.
In the fourth quarter, Gen Digital did not repurchase stocks but paid out $80 million in dividends. In fiscal 2023, it bought back common stocks worth $904 million and paid out $314 million in dividends. GEN authorized a quarterly cash dividend of $0.125 per share, payable on Jun 14 to shareholders of record as of May 22.
First-Quarter Fiscal 2024 Guidance
For the first quarter of fiscal 2024, Gen Digital anticipates revenues in the band of $940-$950 million. The company projects non-GAAP earnings between 45 cents and 47 cents in the first quarter.
Zacks Rank & Stocks to Consider
Currently, Gen Digital carries a Zacks Rank #3 (Hold). Shares of GEN have declined 19.9% year to date (YTD).
Some better-ranked stocks from the broader technology sector are Meta Platforms (META - Free Report) , Manhattan Associates (MANH - Free Report) and Wix.com (WIX - Free Report) . While Meta and Manhattan Associates each sport a Zacks Rank #1 (Strong Buy), Wix.com carries a Zacks Rank #2 (Buy). You can see the complete list of today's Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Meta's second-quarter 2023 earnings has been revised 36 cents northward to $2.79 per share in the past 30 days. For 2023, earnings estimates have been revised 12.6% upward to $11.76 per share in the past 30 days.
Meta’s earnings beat the Zacks Consensus Estimate twice in the preceding four quarters while missing the same on two occasions, the average surprise being 15.5%. Shares of META have surged 96.3% YTD.
The Zacks Consensus Estimate for Manhattan Associates' second-quarter 2023 earnings has been revised upward by a couple of cents to 72 cents per share for the past 30 days. For 2023, earnings estimates have moved upward by 17 cents to $2.87 per share in the past 30 days.
Manhattan Associates' earnings beat the Zacks Consensus Estimate in the preceding four quarters, the average surprise being 33.6%. Shares of MANH have soared 40.6% YTD.
The Zacks Consensus Estimate for Wix.com’s first-quarter 2023 earnings has remained unchanged at 23 cents per share over the past 60 days. For 2023, earnings estimates have been unchanged at $1.49 per share in the past 60 days.
Wix.com's earnings beat the Zacks Consensus Estimate thrice in the preceding four quarters while missing the same on one occasion, the average surprise being 225%. Shares of WIX have increased 1% YTD.