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GEN Q2 Earnings Beat Estimates on Financial Wellness Strength
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Key Takeaways
Gen Digital's Q2 revenues rose 12% to $1.37 billion, while non-GAAP EPS climbed 19% to 74 cents.
GEN's Trust-Based Solutions revenues surged 26% to $511 million.
GEN raised fiscal 2027 revenue guidance to $5.465-$5.515 billion and EPS guidance to $2.93-$2.98.
Gen Digital Inc. (GEN - Free Report) reported second-quarter fiscal 2027 non-GAAP earnings of 74 cents per share, which beat the Zacks Consensus Estimate by 2.78%. The bottom line increased 19% year over year.
Quarterly revenues of $1.37 billion surpassed the consensus estimate by 2.6% and increased 12% year over year. Growth was driven by strong demand across Cyber Safety and Trust-Based Solutions, particularly financial wellness offerings. Paid customers reached 83 million, up 6 million year over year and 2 million sequentially.
GEN Extends Double-Digit Bookings Growth
Gen Digital delivered its sixth consecutive quarter of double-digit bookings growth. Bookings increased 10% year over year to $1.347 billion, reflecting sustained demand across both operating segments. Revenues exceeded the high end of management's guidance range of $1.325-$1.35 billion.
Direct revenues increased 6% year over year to $1.074 billion, supported by continued membership adoption and financial wellness growth. Partner revenues jumped 40% to $295 million, benefiting from momentum across employee benefits, financial marketplaces and telecommunications channels.
Gen Digital Inc. Price, Consensus and EPS Surprise
Gen Digital's Cyber Safety Business Delivers Record Margins
Cyber Safety Platform revenues increased 5% year over year to $858 million from $814 million. Segment bookings grew 4% on a constant-currency basis, supported by strong renewals, cross-selling and upselling within the Norton portfolio.
Segment operating income increased 7% to $534 million, while operating margin expanded 100 basis points to a record 62%. Management highlighted the growing adoption of higher-tier Norton 360 memberships and improved customer engagement. Norton 360 also exceeded a $1.7 billion annualized revenue run rate.
GEN continues to invest in AI-powered protection, including Safe AI, scam detection and enhanced VPN capabilities. Management expects Cyber Safety to maintain mid-single-digit revenue growth and operating margins above 60%.
GEN Sees Strong Growth in Trust-Based Solutions
Trust-Based Solutions revenues increased 26% year over year to $511 million from $406 million. Bookings rose 24%, driven by financial wellness adoption, stronger marketplace activity and consistent performance across identity protection offerings.
Segment operating income increased 24% to $152 million, while operating margin remained stable at 30%. MoneyLion's Instacash solution recorded strong origination growth, supported by record new-user onboarding and increased advances per user.
Engine's marketplace also demonstrated healthy momentum, with consumer product inquiries more than doubling year over year. GEN added 18 partners during the quarter. Meanwhile, redesigned LifeLock experiences improved conversion and upselling, supporting broader adoption of higher-tier identity offerings.
Gen Digital Benefits From Operating Efficiencies
Gen Digital generated non-GAAP operating income of $686 million, up 10% year over year. Non-GAAP operating margin was 50.1% compared with 51.1% in the year-ago quarter, reflecting changes in business mix.
Non-GAAP operating expenses increased 4% to $415 million. Management attributed efficiency improvements partly to AI-driven automation across customer support, marketing and engineering.
Non-GAAP net income increased 15% year over year to $444 million. The diluted share count declined to 603 million from 624 million, supporting earnings growth. The company also recorded its 12th consecutive quarter of double-digit non-GAAP earnings growth.
GEN Maintains Strong Cash Flow and Capital Returns
As of Oct. 2, 2026, Gen Digital had cash, cash equivalents and restricted cash of $589 million, up from $564 million in the preceding quarter. Debt principal declined sequentially to $8.185 billion from $8.230 billion.
Operating cash flow totaled $326 million during the quarter, while free cash flow reached $323 million. The company repurchased $171 million in shares, paid $76 million in dividends and repaid $45 million of debt.
Net leverage declined below 2.9 times, while approximately $1.8 billion remained available under the existing share repurchase authorization. GEN declared a quarterly dividend of 12.5 cents per share, payable Dec. 9, 2026, to shareholders of record as of Nov. 16.
Gen Digital Raises FY27 Outlook
Encouraged by strong first-half performance, Gen Digital raised and narrowed its full-year fiscal 2027 guidance.
The company now expects non-GAAP revenues of $5.465-$5.515 billion compared with its previous projection of $5.375-$5.475 billion. Non-GAAP earnings are expected between $2.93 and $2.98 per share, up from the prior guidance of $2.87-$2.97.
For the third quarter of fiscal 2027, GEN projects revenues between $1.365 billion and $1.390 billion, suggesting 10-12% year-over-year growth. Non-GAAP earnings are expected in the range of 73-75 cents per share, indicating growth of 15-18%.
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GEN Q2 Earnings Beat Estimates on Financial Wellness Strength
Key Takeaways
Gen Digital Inc. (GEN - Free Report) reported second-quarter fiscal 2027 non-GAAP earnings of 74 cents per share, which beat the Zacks Consensus Estimate by 2.78%. The bottom line increased 19% year over year.
Quarterly revenues of $1.37 billion surpassed the consensus estimate by 2.6% and increased 12% year over year. Growth was driven by strong demand across Cyber Safety and Trust-Based Solutions, particularly financial wellness offerings. Paid customers reached 83 million, up 6 million year over year and 2 million sequentially.
GEN Extends Double-Digit Bookings Growth
Gen Digital delivered its sixth consecutive quarter of double-digit bookings growth. Bookings increased 10% year over year to $1.347 billion, reflecting sustained demand across both operating segments. Revenues exceeded the high end of management's guidance range of $1.325-$1.35 billion.
Direct revenues increased 6% year over year to $1.074 billion, supported by continued membership adoption and financial wellness growth. Partner revenues jumped 40% to $295 million, benefiting from momentum across employee benefits, financial marketplaces and telecommunications channels.
Gen Digital Inc. Price, Consensus and EPS Surprise
Gen Digital Inc. price-consensus-eps-surprise-chart | Gen Digital Inc. Quote
Gen Digital's Cyber Safety Business Delivers Record Margins
Cyber Safety Platform revenues increased 5% year over year to $858 million from $814 million. Segment bookings grew 4% on a constant-currency basis, supported by strong renewals, cross-selling and upselling within the Norton portfolio.
Segment operating income increased 7% to $534 million, while operating margin expanded 100 basis points to a record 62%. Management highlighted the growing adoption of higher-tier Norton 360 memberships and improved customer engagement. Norton 360 also exceeded a $1.7 billion annualized revenue run rate.
GEN continues to invest in AI-powered protection, including Safe AI, scam detection and enhanced VPN capabilities. Management expects Cyber Safety to maintain mid-single-digit revenue growth and operating margins above 60%.
GEN Sees Strong Growth in Trust-Based Solutions
Trust-Based Solutions revenues increased 26% year over year to $511 million from $406 million. Bookings rose 24%, driven by financial wellness adoption, stronger marketplace activity and consistent performance across identity protection offerings.
Segment operating income increased 24% to $152 million, while operating margin remained stable at 30%. MoneyLion's Instacash solution recorded strong origination growth, supported by record new-user onboarding and increased advances per user.
Engine's marketplace also demonstrated healthy momentum, with consumer product inquiries more than doubling year over year. GEN added 18 partners during the quarter. Meanwhile, redesigned LifeLock experiences improved conversion and upselling, supporting broader adoption of higher-tier identity offerings.
Gen Digital Benefits From Operating Efficiencies
Gen Digital generated non-GAAP operating income of $686 million, up 10% year over year. Non-GAAP operating margin was 50.1% compared with 51.1% in the year-ago quarter, reflecting changes in business mix.
Non-GAAP operating expenses increased 4% to $415 million. Management attributed efficiency improvements partly to AI-driven automation across customer support, marketing and engineering.
Non-GAAP net income increased 15% year over year to $444 million. The diluted share count declined to 603 million from 624 million, supporting earnings growth. The company also recorded its 12th consecutive quarter of double-digit non-GAAP earnings growth.
GEN Maintains Strong Cash Flow and Capital Returns
As of Oct. 2, 2026, Gen Digital had cash, cash equivalents and restricted cash of $589 million, up from $564 million in the preceding quarter. Debt principal declined sequentially to $8.185 billion from $8.230 billion.
Operating cash flow totaled $326 million during the quarter, while free cash flow reached $323 million. The company repurchased $171 million in shares, paid $76 million in dividends and repaid $45 million of debt.
Net leverage declined below 2.9 times, while approximately $1.8 billion remained available under the existing share repurchase authorization. GEN declared a quarterly dividend of 12.5 cents per share, payable Dec. 9, 2026, to shareholders of record as of Nov. 16.
Gen Digital Raises FY27 Outlook
Encouraged by strong first-half performance, Gen Digital raised and narrowed its full-year fiscal 2027 guidance.
The company now expects non-GAAP revenues of $5.465-$5.515 billion compared with its previous projection of $5.375-$5.475 billion. Non-GAAP earnings are expected between $2.93 and $2.98 per share, up from the prior guidance of $2.87-$2.97.
For the third quarter of fiscal 2027, GEN projects revenues between $1.365 billion and $1.390 billion, suggesting 10-12% year-over-year growth. Non-GAAP earnings are expected in the range of 73-75 cents per share, indicating growth of 15-18%.
GEN’s Zacks Rank & Other Stocks to Consider
GEN currently carries a Zacks Rank #2 (Buy).
Some other top-ranked stocks in the broader Zacks Computer and Technology sector include ACI Worldwide (ACIW - Free Report) , Affirm (AFRM - Free Report) and AMETEK (AME - Free Report) . While AFRM and AME sport a Zacks Rank #1 (Strong Buy) each, ACI Worldwide carries a Zacks Rank #2 at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
ACI Worldwide shares have surged 14.3% in the year-to-date period. ACI Worldwide is set to report third-quarter 2026 results on Nov. 5.
Shares of Affirm have lost 2.3% year to date. Affirm is set to report first-quarter fiscal 2027 results on Nov. 5.
Shares of AMETEK have rallied 19.9% year to date. AMETEK is slated to report third-quarter 2026 results on Nov. 3.