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Gen Digital (GEN) to Report Q1 Earnings: What's in Store?
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Gen Digital (GEN - Free Report) is slated to report first-quarter fiscal 2024 results on Aug 3. 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.
The company projects quarterly revenues between $940 million and $950 million. The Zacks Consensus Estimate for first-quarter revenues is pegged at $947.2 million, indicating a 33.8% improvement from the year-ago quarter’s figure of $708 million.
For the first quarter of fiscal 2024, Gen Digital expects non-GAAP earnings in the range of 45 cents-47 cents per share. The Zacks Consensus Estimate is pegged at 46 cents per share, a penny higher than the year-ago reported figure of 45 cents.
The company’s earnings surpassed the Zacks Consensus Estimate thrice in the trailing four quarters while matching the same on one occasion, the average surprise being 5.3%.
Let’s see how things have shaped up before this announcement.
Gen Digital’s first-quarter top line is likely to have been primarily driven by the inclusion of the Avast business, which has significantly increased the combined company’s Average Direct Customer count. Our first-quarter estimate for this key metric is pegged at 37.8 million, which is close to 38.2 million at the end of the last reported quarter.
Moreover, the expansion of product offerings following the merger of NortonLifeLock and Avast is likely to have facilitated the newly formed company to cross-sell products to each other’s customers, thereby aiding Average Revenue Per User (“ARPU”) growth. Gen Digital’s ARPU increases 15 cents sequentially to $7.24 in the fourth quarter of fiscal 2023.
We anticipate the trend is likely to have continued in the to-be-reported quarter. Our first-quarter fiscal 2024 estimate for ARPU is pegged at $7.31, which is 7 cents higher than the fourth-quarter fiscal 2023 level.
GEN’s first-quarter performance is also likely to have benefited from the increased demand for cybersecurity and ID analytics solutions amid the hybrid work environment. Over the past couple of years, as more people are shifting online, the need for online privacy has been rising. Global workforces working remotely are logging into employers' networks, escalating the need for digital security. This trend is likely to have spurred the demand for Gen Digital’s security products in the fiscal first quarter.
Our first-quarter estimate for Gen Digital’s Consumer Security segment’s revenues is pegged at $572.7 million, indicating a year-over-year increase of 42.5%. Our estimate of $357.1 million for the Identity and Information Protection division implies growth of 21.5% from the year-ago quarter.
An expansion in the EMEA, Asia Pacific and Latin American regions is also likely to have been an upside for GEN this season. Further, the growing number of client bookings, supported by their retention and renewal rates, is anticipated to have contributed to the company’s fiscal first-quarter top line. At the end of the fourth quarter of fiscal 2023, Gen Digital’s client retention rate was 76%, while bookings grew 29% on a year-over-year basis.
The Norton and Avast antivirus maker’s sustained focus on growing partner channels and employee benefit programs is likely to have driven its performance in the quarter to be reported. Our estimate for the company’s Partner revenues is pegged at $96.8 million, which calls for a 34.4% increase from the year-ago quarter. Additionally, Direct Customer revenues are expected to increase 33.5% year over year to $833 million, per our estimate.
However, GEN’s overall first-quarter performance is likely to have been negatively impacted by unfavorable foreign exchange rates. In the last reported financial results for the fourth quarter of fiscal 2023, foreign currency headwinds lowered revenues by $21 million.
Additionally, increased interest expenses due to enhanced debt related to Avast acquisition financing are likely to have weighed on the bottom line. Moreover, the company’s earnings per share are expected to have been negatively impacted by the equity dilution impact of the Avast acquisition. To finance the acquisition of Avast, Gen Digital issued 94 million new shares.
What Our Model Says
Our proven model does not conclusively predict an earnings beat for Gen Digital this season. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. However, that’s not the case here.
Though GEN currently carries a Zacks Rank of 3, it has an Earnings ESP of 0.00%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Stocks With the Favorable Combination
Per our model, NVIDIA (NVDA - Free Report) , Apple (AAPL - Free Report) and Alibaba (BABA - Free Report) have the right combination of elements to post an earnings beat in their upcoming releases.
NVIDIA is slated to report second-quarter fiscal 2024 results on Aug 23. The company sports a Zacks Rank #1 and has an Earnings ESP of +5.56% at present. NVDA’s earnings beat the Zacks Consensus Estimate twice in the trailing four quarters while missing the same on two occasions, the average surprise being 0.3%. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for second-quarter earnings is pegged at $2.06 per share, suggesting a whopping increase of 303.9% from the year-ago quarter’s earnings of 51 cents. NVIDIA’s quarterly revenues are estimated to increase 64.4% year over year to $11.02 billion.
Apple carries a Zacks Rank #3 and has an Earnings ESP of +0.66%. The company is scheduled to report third-quarter fiscal 2023 results on Aug 3. Its earnings beat the Zacks Consensus Estimate thrice in the preceding four quarters while missing the same on one occasion, with the average surprise being 2.7%.
The Zacks Consensus Estimate for Apple’s third-quarter earnings stands at $1.19 per share, a penny lower than the year-ago quarter. It is estimated to report revenues of $81.26 billion, which suggests a decrease of approximately 2.1% from the year-ago quarter.
Alibaba carries a Zacks Rank #2 and has an Earnings ESP of +6.19%. The company is scheduled to report first-quarter fiscal 2024 results on Aug 10. Its earnings surpassed the Zacks Consensus Estimate in the trailing four quarters, the average surprise being 16.9%.
The Zacks Consensus Estimate for BABA’s first-quarter earnings is pegged at $1.90 per share, indicating a year-over-year increase of 8.6%. The consensus mark for revenues stands at $31.01 billion, suggesting a year-over-year rise of 1%.
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Gen Digital (GEN) to Report Q1 Earnings: What's in Store?
Gen Digital (GEN - Free Report) is slated to report first-quarter fiscal 2024 results on Aug 3. 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.
The company projects quarterly revenues between $940 million and $950 million. The Zacks Consensus Estimate for first-quarter revenues is pegged at $947.2 million, indicating a 33.8% improvement from the year-ago quarter’s figure of $708 million.
For the first quarter of fiscal 2024, Gen Digital expects non-GAAP earnings in the range of 45 cents-47 cents per share. The Zacks Consensus Estimate is pegged at 46 cents per share, a penny higher than the year-ago reported figure of 45 cents.
The company’s earnings surpassed the Zacks Consensus Estimate thrice in the trailing four quarters while matching the same on one occasion, the average surprise being 5.3%.
Let’s see how things have shaped up before this announcement.
Gen Digital Inc. Price and EPS Surprise
Gen Digital Inc. price-eps-surprise | Gen Digital Inc. Quote
Factors to Note
Gen Digital’s first-quarter top line is likely to have been primarily driven by the inclusion of the Avast business, which has significantly increased the combined company’s Average Direct Customer count. Our first-quarter estimate for this key metric is pegged at 37.8 million, which is close to 38.2 million at the end of the last reported quarter.
Moreover, the expansion of product offerings following the merger of NortonLifeLock and Avast is likely to have facilitated the newly formed company to cross-sell products to each other’s customers, thereby aiding Average Revenue Per User (“ARPU”) growth. Gen Digital’s ARPU increases 15 cents sequentially to $7.24 in the fourth quarter of fiscal 2023.
We anticipate the trend is likely to have continued in the to-be-reported quarter. Our first-quarter fiscal 2024 estimate for ARPU is pegged at $7.31, which is 7 cents higher than the fourth-quarter fiscal 2023 level.
GEN’s first-quarter performance is also likely to have benefited from the increased demand for cybersecurity and ID analytics solutions amid the hybrid work environment. Over the past couple of years, as more people are shifting online, the need for online privacy has been rising. Global workforces working remotely are logging into employers' networks, escalating the need for digital security. This trend is likely to have spurred the demand for Gen Digital’s security products in the fiscal first quarter.
Our first-quarter estimate for Gen Digital’s Consumer Security segment’s revenues is pegged at $572.7 million, indicating a year-over-year increase of 42.5%. Our estimate of $357.1 million for the Identity and Information Protection division implies growth of 21.5% from the year-ago quarter.
An expansion in the EMEA, Asia Pacific and Latin American regions is also likely to have been an upside for GEN this season. Further, the growing number of client bookings, supported by their retention and renewal rates, is anticipated to have contributed to the company’s fiscal first-quarter top line. At the end of the fourth quarter of fiscal 2023, Gen Digital’s client retention rate was 76%, while bookings grew 29% on a year-over-year basis.
The Norton and Avast antivirus maker’s sustained focus on growing partner channels and employee benefit programs is likely to have driven its performance in the quarter to be reported. Our estimate for the company’s Partner revenues is pegged at $96.8 million, which calls for a 34.4% increase from the year-ago quarter. Additionally, Direct Customer revenues are expected to increase 33.5% year over year to $833 million, per our estimate.
However, GEN’s overall first-quarter performance is likely to have been negatively impacted by unfavorable foreign exchange rates. In the last reported financial results for the fourth quarter of fiscal 2023, foreign currency headwinds lowered revenues by $21 million.
Additionally, increased interest expenses due to enhanced debt related to Avast acquisition financing are likely to have weighed on the bottom line. Moreover, the company’s earnings per share are expected to have been negatively impacted by the equity dilution impact of the Avast acquisition. To finance the acquisition of Avast, Gen Digital issued 94 million new shares.
What Our Model Says
Our proven model does not conclusively predict an earnings beat for Gen Digital this season. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. However, that’s not the case here.
Though GEN currently carries a Zacks Rank of 3, it has an Earnings ESP of 0.00%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Stocks With the Favorable Combination
Per our model, NVIDIA (NVDA - Free Report) , Apple (AAPL - Free Report) and Alibaba (BABA - Free Report) have the right combination of elements to post an earnings beat in their upcoming releases.
NVIDIA is slated to report second-quarter fiscal 2024 results on Aug 23. The company sports a Zacks Rank #1 and has an Earnings ESP of +5.56% at present. NVDA’s earnings beat the Zacks Consensus Estimate twice in the trailing four quarters while missing the same on two occasions, the average surprise being 0.3%. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for second-quarter earnings is pegged at $2.06 per share, suggesting a whopping increase of 303.9% from the year-ago quarter’s earnings of 51 cents. NVIDIA’s quarterly revenues are estimated to increase 64.4% year over year to $11.02 billion.
Apple carries a Zacks Rank #3 and has an Earnings ESP of +0.66%. The company is scheduled to report third-quarter fiscal 2023 results on Aug 3. Its earnings beat the Zacks Consensus Estimate thrice in the preceding four quarters while missing the same on one occasion, with the average surprise being 2.7%.
The Zacks Consensus Estimate for Apple’s third-quarter earnings stands at $1.19 per share, a penny lower than the year-ago quarter. It is estimated to report revenues of $81.26 billion, which suggests a decrease of approximately 2.1% from the year-ago quarter.
Alibaba carries a Zacks Rank #2 and has an Earnings ESP of +6.19%. The company is scheduled to report first-quarter fiscal 2024 results on Aug 10. Its earnings surpassed the Zacks Consensus Estimate in the trailing four quarters, the average surprise being 16.9%.
The Zacks Consensus Estimate for BABA’s first-quarter earnings is pegged at $1.90 per share, indicating a year-over-year increase of 8.6%. The consensus mark for revenues stands at $31.01 billion, suggesting a year-over-year rise of 1%.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.