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Gen Digital Q1 Earnings Surpass Expectations, Revenues Rise Y/Y
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Key Takeaways
GEN reported Q1 non-GAAP EPS of 64 cents, up 20.8% Y/Y and above the high end of its guided range.
Revenues rose 30.3% Y/Y to beat estimates, driven by strong demand for AI-powered cyber safety solutions.
GEN raised its FY26 revenue and EPS outlook, citing expanded market reach and improved monetization.
Gen Digital Inc. (GEN - Free Report) reported first-quarter fiscal 2026 results, wherein both revenues and earnings beat the Zacks Consensus Estimate.
Gen Digital reported non-GAAP earnings of 64 cents per share, which beat the Zacks Consensus Estimate by 6.7%. The figure improved 20.8% year over year. In the fiscal first quarter, the bottom line also surpassed the management's guidance of 59 cents and 61 cents.
In the trailing four quarters, GEN’s earnings surpassed the Zacks Consensus Estimate thrice, while matching once, delivering an average surprise of 2.55%.
Gen Digital’s first-quarter non-GAAP revenues increased 30.3% year over year, which beat the Zacks Consensus Estimate by 6.4%. The strong revenue growth was due to escalating AI-powered scams, ransomware, and impersonation threats fueling demand for Gen Digital’s AI-driven cyber safety solutions, including Genie Scam Protection.
Furthermore, GEN’s investment in AI has significantly improved product efficacy, enhancing monetization opportunities and lifetime customer value. The acquisition of MoneyLion has expanded GEN’s Total Addressable Market into financial wellness.
Gen Digital Inc. Price, Consensus and EPS Surprise
Robust growth in Gen Digital’s top line can be attributed to the increase in the Cyber Safety revenues, which comprise the Direct Customer revenues and the Partner revenues.
Gen Digital’s Cyber Safety revenues amounted to $869 million in the fiscal first quarter, up 11.4% year over year. Revenues of its Trust-Based Solutions segment increased 109.7% to $388 million. Direct Customer revenues rose 25.4% year over year to $1.07 billion, and Partner revenues improved 67.3% to $189 million.
The direct monthly average revenue per user (ARPU) increased to $7.25 compared with the year-ago quarter’s ARPU of $7.23 while declining from the previous quarter’s $7.27.
The quarterly bookings advanced 31.7% year over year to $1.202 billion.
Gen Digital’s average direct customer count increased to 40.6 million from 39.3 million in the year-ago quarter and 40.4 million in the previous quarter.
GEN’s customer retention rate was 78%, unchanged from the year-ago quarter and previous quarter.
GEN’s Operating Details
The non-GAAP gross profit grew 26.9% year over year to $1.06 billion in the first quarter. However, the gross margin contracted 220 basis points (bps) to 84.1%.
Non-GAAP operating expenses increased to $407 million, up 51% year over year. As a percentage of revenues, non-GAAP operating expenses declined 450 bps year over year to 32.4%.
The non-GAAP operating income in the first quarter of fiscal 2025 totaled $650 million, up 15% year over year. The non-GAAP operating margin was 52%, down 600 bps year over year.
Gen Digital’s Balance Sheet & Cash Flow
Gen Digital exited the first quarter with cash and cash equivalents of $828 million, down from $1.006 billion in the previous quarter. The long-term debt was $8.963 billion, up from $8.335 billion in the year-ago period.
In the first quarter of fiscal 2025, the company generated operating and free cash flows of $409 million and $405 million, respectively.
Gen Digital paid out $82 million in dividends during the first quarter, paid debt worth $191 million and repurchased shares of $134 million.
Gen Digital Revises Guidance for 2026
For the second quarter of fiscal 2026, Gen Digital anticipates revenues between $1.18 billion and $1.21 billion. The company projects non-GAAP earnings between 60 cents and 62 cents in the fiscal second quarter. The Zacks Consensus Estimate for second-quarter revenues and non-GAAP earnings is currently pegged at $1.18 billion and 62 cents per share, respectively.
For fiscal 2026, Gen Digital now projects revenues in the band of $4.8-$4.9 billion, up from the previously guided range of $4.7-$4.8 billion. It now anticipates earnings per share between $2.49 and $2.56, up from the previously guided range of $2.56-$2.54. The consensus mark for fiscal 2026 revenues and non-GAAP earnings is currently pinned at $4.78 billion and $2.49, respectively.
Zacks Rank & Stocks to Consider
GEN currently has a Zacks Rank #3 (Hold).
Alkami Technology (ALKT - Free Report) , Arista Networks (ANET - Free Report) and Amphenol (APH - Free Report) are some better-ranked stocks that investors can consider in the broader Zacks Computer & Technology sector. While ANET and ALKT carry a Zacks Rank #2 (Buy) each, APH sports a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
Alkami Technology shares have lost 34.5% year to date. The Zacks Consensus Estimate for Alkami Technology’s full-year 2025 earnings is pegged at 15 cents per share, up by 2 cents over the past 30 days, implying growth of 51.7% from the year-ago quarter’s reported figure.
Arista Networks shares have lost 11.9% year to date. The Zacks Consensus Estimate for ANET’s full-year fiscal 2025 earnings is pegged at 65 cents per share, up by a penny in the past 30 days, indicating year-over-year growth of 13.66%.
Amphenol shares have gained 45.1% year to date. The Zacks Consensus Estimate for Amphenol’s full-year 2025 earnings has been revised upward to $2.69 per share in the past seven days, indicating year-over-year growth of 42.33%.
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Gen Digital Q1 Earnings Surpass Expectations, Revenues Rise Y/Y
Key Takeaways
Gen Digital Inc. (GEN - Free Report) reported first-quarter fiscal 2026 results, wherein both revenues and earnings beat the Zacks Consensus Estimate.
Gen Digital reported non-GAAP earnings of 64 cents per share, which beat the Zacks Consensus Estimate by 6.7%. The figure improved 20.8% year over year. In the fiscal first quarter, the bottom line also surpassed the management's guidance of 59 cents and 61 cents.
In the trailing four quarters, GEN’s earnings surpassed the Zacks Consensus Estimate thrice, while matching once, delivering an average surprise of 2.55%.
Gen Digital’s first-quarter non-GAAP revenues increased 30.3% year over year, which beat the Zacks Consensus Estimate by 6.4%. The strong revenue growth was due to escalating AI-powered scams, ransomware, and impersonation threats fueling demand for Gen Digital’s AI-driven cyber safety solutions, including Genie Scam Protection.
Furthermore, GEN’s investment in AI has significantly improved product efficacy, enhancing monetization opportunities and lifetime customer value. The acquisition of MoneyLion has expanded GEN’s Total Addressable Market into financial wellness.
Gen Digital Inc. Price, Consensus and EPS Surprise
Gen Digital Inc. price-consensus-eps-surprise-chart | Gen Digital Inc. Quote
GEN’s Q1 Top-Line Details
Robust growth in Gen Digital’s top line can be attributed to the increase in the Cyber Safety revenues, which comprise the Direct Customer revenues and the Partner revenues.
Gen Digital’s Cyber Safety revenues amounted to $869 million in the fiscal first quarter, up 11.4% year over year. Revenues of its Trust-Based Solutions segment increased 109.7% to $388 million. Direct Customer revenues rose 25.4% year over year to $1.07 billion, and Partner revenues improved 67.3% to $189 million.
The direct monthly average revenue per user (ARPU) increased to $7.25 compared with the year-ago quarter’s ARPU of $7.23 while declining from the previous quarter’s $7.27.
The quarterly bookings advanced 31.7% year over year to $1.202 billion.
Gen Digital’s average direct customer count increased to 40.6 million from 39.3 million in the year-ago quarter and 40.4 million in the previous quarter.
GEN’s customer retention rate was 78%, unchanged from the year-ago quarter and previous quarter.
GEN’s Operating Details
The non-GAAP gross profit grew 26.9% year over year to $1.06 billion in the first quarter. However, the gross margin contracted 220 basis points (bps) to 84.1%.
Non-GAAP operating expenses increased to $407 million, up 51% year over year. As a percentage of revenues, non-GAAP operating expenses declined 450 bps year over year to 32.4%.
The non-GAAP operating income in the first quarter of fiscal 2025 totaled $650 million, up 15% year over year. The non-GAAP operating margin was 52%, down 600 bps year over year.
Gen Digital’s Balance Sheet & Cash Flow
Gen Digital exited the first quarter with cash and cash equivalents of $828 million, down from $1.006 billion in the previous quarter. The long-term debt was $8.963 billion, up from $8.335 billion in the year-ago period.
In the first quarter of fiscal 2025, the company generated operating and free cash flows of $409 million and $405 million, respectively.
Gen Digital paid out $82 million in dividends during the first quarter, paid debt worth $191 million and repurchased shares of $134 million.
Gen Digital Revises Guidance for 2026
For the second quarter of fiscal 2026, Gen Digital anticipates revenues between $1.18 billion and $1.21 billion. The company projects non-GAAP earnings between 60 cents and 62 cents in the fiscal second quarter. The Zacks Consensus Estimate for second-quarter revenues and non-GAAP earnings is currently pegged at $1.18 billion and 62 cents per share, respectively.
For fiscal 2026, Gen Digital now projects revenues in the band of $4.8-$4.9 billion, up from the previously guided range of $4.7-$4.8 billion. It now anticipates earnings per share between $2.49 and $2.56, up from the previously guided range of $2.56-$2.54. The consensus mark for fiscal 2026 revenues and non-GAAP earnings is currently pinned at $4.78 billion and $2.49, respectively.
Zacks Rank & Stocks to Consider
GEN currently has a Zacks Rank #3 (Hold).
Alkami Technology (ALKT - Free Report) , Arista Networks (ANET - Free Report) and Amphenol (APH - Free Report) are some better-ranked stocks that investors can consider in the broader Zacks Computer & Technology sector. While ANET and ALKT carry a Zacks Rank #2 (Buy) each, APH sports a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
Alkami Technology shares have lost 34.5% year to date. The Zacks Consensus Estimate for Alkami Technology’s full-year 2025 earnings is pegged at 15 cents per share, up by 2 cents over the past 30 days, implying growth of 51.7% from the year-ago quarter’s reported figure.
Arista Networks shares have lost 11.9% year to date. The Zacks Consensus Estimate for ANET’s full-year fiscal 2025 earnings is pegged at 65 cents per share, up by a penny in the past 30 days, indicating year-over-year growth of 13.66%.
Amphenol shares have gained 45.1% year to date. The Zacks Consensus Estimate for Amphenol’s full-year 2025 earnings has been revised upward to $2.69 per share in the past seven days, indicating year-over-year growth of 42.33%.