NEWS RELEASE | |
CONTACTS | |
Investor Contact | Media Contact |
Jason Starr | Audra Proctor |
Gen | Gen |
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Gen Delivers Fifth Consecutive Year of Organic Growth and Record
Profitability in Fiscal 2024
Gen Board authorizes $3 billion share repurchase program
TEMPE, Ariz. & PRAGUE - May 9, 2024 - Gen Digital Inc. (NASDAQ: GEN), a global leader dedicated to powering Digital Freedom, released its results for its fiscal year 2024 fourth quarter and full year, which ended March 29, 2024.
"This has been a pivotal year for Gen as we integrated our portfolio and introduced innovative solutions that empower our customers to take full advantage of the digital world with confidence," said Vincent Pilette, CEO of Gen. "Building upon our momentum, we know there is tremendous opportunity that lies ahead in consumer Cyber Safety. In this always-on world, we're committed to continuing to deliver human-centric solutions that protect against the ever-evolving threat landscape."
Fiscal Year 2024 Results
- Revenue of $3,812 million, up 14% in USD and 15% in CC
- Bookings of $3,861 million, up 15% in USD and 14% in CC
- GAAP Operating Income of $1,122 million, down 9%
- Non-GAAPOperating Income of $2,221 million, up 21% in USD and 22% in CC
- GAAP Diluted EPS of $0.96, down 56%
- Non-GAAPDiluted EPS of $1.96, up 8% in USD and up 11% in CC
- Operating Cash Flow of $2,064 million
Q4 Fiscal Year 2024 Results
- Revenue of $967 million, up 2% in USD and 3% in CC
- Bookings of $1,044 million, up 2% in USD and 3% in CC
- GAAP Operating Income of $400 million, up 12%
- Non-GAAPOperating Income of $569 million, up 5% in USD and 6% in CC
- GAAP Diluted EPS of $0.21, down 85%
- Non-GAAPDiluted EPS of $0.53, up 15% in USD and 16% in CC
- Operating Cash Flow of $1,398 million
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"We closed our fiscal year 2024 delivering record revenue, growing direct customer count, and increasing operating margin," said Natalie Derse, CFO of Gen. "As we look forward, we'll continue to drive our growth strategy through focused execution. We're confident that the disciplined investments in our product innovation and go-to-market strategy will drive further success and accelerate revenue growth."
Non-GAAP Q1 Fiscal Year 2025 Guidance
- Q1 FY25 Revenue expected to be in the range of $960 million to $970 million
- Q1 FY25 EPS expected to be in the range of $0.52 to $0.54
Non-GAAP Fiscal Year 2025 Guidance
- FY25 Revenue expected to be in the range of $3,890 million to $3,930 million
- FY25 EPS expected to be in the range of $2.17 to $2.23
Share Repurchase Authorization Raised to $3 Billion
Gen's Board of Directors has approved the share repurchase authorization to $3 billion, inclusive of the current $429 million authorization remaining. The authorization has no expiration date.
Quarterly Cash Dividend
Gen's Board of Directors has approved a regular quarterly cash dividend of $0.125 per common share to be paid on June 12, 2024, to all shareholders of record as of the close of business on May 20, 2024.
Leadership Update
The Company today announced that Ondřej Vlček is stepping down from his role as president following the successful integration of the company. Vlček assumed his role as president following the merger of Avast and NortonLifeLock in 2022. He will continue to be involved with the Company, maintaining his position on the Gen Board of Directors.
Q4 Fiscal Year 2024 Earnings Call
May 9, 2024
2 p.m. PT / 5 p.m. ET
Webcast & Dial-in instructions at Investor.GenDigital.com. A replay will be posted following the call. For additional details regarding Gen's results and outlook, please see the Financials section of the Investor Relations website at Investor.GenDigital.com.
About Gen.
Gen™ (NASDAQ: GEN) is a global company dedicated to powering Digital Freedom through its trusted Cyber Safety brands, Norton, Avast, LifeLock, Avira, AVG, ReputationDefender and CCleaner. The Gen family of consumer brands is rooted in providing safety for the first digital generations. Now, Gen empowers people to live their digital lives safely, privately, and confidently today and for generations to come. Gen brings award-winning products and services in cybersecurity, online privacy and identity protection to nearly 500 million users in more than 150 countries. Learn more at GenDigital.com.
Forward-Looking Statements
This press release contains statements which may be considered forward-looking within the meaning of the U.S. federal securities laws. In some cases, you can identify these forward-looking statements by the use of terms such as "expect," "will," "continue," or similar expressions, and variations or negatives of these words, but the absence of these words does not mean that a statement is not
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forward-looking. All statements other than statements of historical fact are statements that could be deemed forward-looking statements, including, but not limited to, the quotes under "Fiscal Year 2024 Results" and "Q4 Fiscal Year 2024 Results" including expectations relating to achievement of long- term objectives, and the statements under "Non-GAAP Q1 Fiscal Year 2025 Guidance" and "Non- GAAP Fiscal Year 2025 Guidance" including expectations relating to Q1 Fiscal Year 2025 and Fiscal Year 2025 non-GAAP revenue and non-GAAP EPS, and any statements of assumptions underlying any of the foregoing. These statements are subject to known and unknown risks, uncertainties and other factors that may cause our actual results, levels of activity, performance or achievements to differ materially from results expressed or implied in this press release. Such risk factors include, but are not limited to, those related to: the consummation of or anticipated impacts of acquisitions (including our ability to achieve synergies and associated cost savings from the merger with Avast); divestitures, restructurings, stock repurchases, financings, debt repayments and investment activities; difficulties in executing the operating model for the consumer Cyber Safety business; lower than anticipated returns from our investments in direct customer acquisition; difficulties in retaining our existing customers and converting existing non-paying customers to paying customers; difficulties and delays in reducing run rate expenses and monetizing underutilized assets; the successful development of new products and upgrades and the degree to which these new products and upgrades gain market acceptance; our ability to maintain our customer and partner relationships; the anticipated growth of certain market segments; fluctuations and volatility in our stock price; our ability to successfully execute strategic plans; the vulnerability of our solutions, systems, websites and data to intentional disruption by third parties; changes to existing accounting pronouncements or taxation rules or practices; and general business and macroeconomic changes in the U.S. and worldwide, including economic recessions, the impact of inflation, fluctuations in foreign currency exchange rates, changes in interest rates or tax rates, and conflicts including Russia's invasion of Ukraine and the Israel-Hamas conflict. Additional information concerning these and other risk factors is contained in the Risk Factors sections of our most recent reports on Form 10-K and Form 10-Q. We encourage you to read those sections carefully. There may also be other factors that have not been anticipated or are not described in our periodic filings, generally because we did not believe them to be significant at the time, which could cause actual results to differ materially from our projections and expectations. All forward-looking statements should be evaluated with the understanding of their inherent uncertainty. We assume no obligation, and do not intend, to update these forward-looking statements as a result of future events or developments.
Use of Non-GAAP Financial Information
We use non-GAAP measures of operating margin, operating income, net income and earnings per share, which are adjusted from results based on GAAP and exclude certain expenses, gains and losses. We also provide the non-GAAP metrics of revenues, and constant currency revenues. These non-GAAP financial measures are provided to enhance the user's understanding of our past financial performance and our prospects for the future. Our management team uses these non-GAAP financial measures in assessing Gen's performance, as well as in planning and forecasting future periods. These non-GAAP financial measures are not computed according to GAAP and the methods we use to compute them may differ from the methods used by other companies. Non-GAAP financial measures are supplemental, should not be considered a substitute for financial information presented in accordance with GAAP and should be read only in conjunction with our condensed consolidated financial statements prepared in accordance with GAAP. Readers are encouraged to review the reconciliation of our non-GAAP financial measures to the comparable GAAP results, which is attached to our quarterly earnings release, and which can be found, along with other financial information including the Earnings Presentation, on the investor relations page of our website at Investor.GenDigital.com. No reconciliation of the forecasted range for non-GAAPrevenues and EPS guidance is included in this release because most non-GAAPadjustments pertain to events that have
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not yet occurred. It would be unreasonably burdensome to forecast, therefore we are unable to provide an accurate estimate.
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GEN DIGITAL INC.
Condensed Consolidated Balance Sheets
(Unaudited, in millions)
March 29, 2024 | March 31, 2023 | ||||
ASSETS | |||||
Current assets: | |||||
Cash and cash equivalents | $ | 846 | $ | 750 | |
Accounts receivable, net | 163 | 168 | |||
Other current assets | 334 | 284 | |||
Assets held for sale | 15 | 31 | |||
Total current assets | 1,358 | 1,233 | |||
Property and equipment, net | 72 | 76 | |||
Intangible assets, net | 2,638 | 3,097 | |||
Goodwill | 10,210 | 10,217 | |||
Other long-term assets | 1,494 | 1,324 | |||
Total assets | $ | 15,772 | $ | 15,947 | |
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT) | |||||
Current liabilities: | |||||
Accounts payable | $ | 66 | $ | 77 | |
Accrued compensation and benefits | 78 | 102 | |||
Current portion of long-term debt | 175 | 233 | |||
Contract liabilities | 1,730 | 1,708 | |||
Other current liabilities | 599 | 729 | |||
Total current liabilities | 2,648 | 2,849 | |||
Long-term debt | 8,429 | 9,529 | |||
Long-term contract liabilities | 76 | 80 | |||
Deferred income tax liabilities | 261 | 395 | |||
Long-term income taxes payable | 1,490 | 820 | |||
Other long-term liabilities | 671 | 74 | |||
Total liabilities | 13,575 | 13,747 | |||
Total stockholders' equity (deficit) | 2,197 | 2,200 | |||
Total liabilities and stockholders' equity (deficit) | $ | 15,772 | $ | 15,947 | |
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GEN DIGITAL INC.
Condensed Consolidated Statements of Operations
(Unaudited, in millions, except per share amounts)
Three Months Ended | Year Ended | ||||||||||
March 29, 2024 | March 31, 2023 | March 29, 2024 | March 31, 2023 | ||||||||
Net revenues | $ | 967 | $ | 947 | $ | 3,812 | $ | 3,338 | |||
Cost of revenues | 190 | 190 | 731 | 589 | |||||||
Gross profit | 777 | 757 | 3,081 | 2,749 | |||||||
Operating expenses: | |||||||||||
Sales and marketing | 181 | 176 | 733 | 682 | |||||||
Research and development | 80 | 88 | 332 | 313 | |||||||
General and administrative | 45 | 61 | 604 | 286 | |||||||
Amortization of intangible assets | 50 | 61 | 233 | 172 | |||||||
Restructuring and other costs | 21 | 14 | 57 | 69 | |||||||
Total operating expenses | 377 | 400 | 1,959 | 1,522 | |||||||
Operating income (loss) | 400 | 357 | 1,122 | 1,227 | |||||||
Interest expense | (161) | (168) | (669) | (401) | |||||||
Other income (expense), net | (24) | (25) | 6 | (22) | |||||||
Income (loss) before income taxes | 215 | 164 | 459 | 804 | |||||||
Income tax expense (benefit) | 81 | (751) | (157) | (545) | |||||||
Net income (loss) | $ | 134 | $ | 915 | $ | 616 | $ | 1,349 | |||
Net income (loss) per share - basic | $ | 0.21 | $ | 1.43 | $ | 0.97 | $ | 2.20 | |||
Net income (loss) per share - diluted | $ | 0.21 | $ | 1.42 | $ | 0.96 | $ | 2.16 | |||
Weighted-average shares outstanding: | |||||||||||
Basic | 630 | 639 | 637 | 614 | |||||||
Diluted | 637 | 644 | 642 | 624 |
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GEN DIGITAL INC.
Condensed Consolidated Statements of Cash Flows
(Unaudited, in millions)
Three Months Ended | Year Ended | ||||||||||
March 29, 2024 | March 31, 2023 | March 29, 2024 | March 31, 2023 | ||||||||
OPERATING ACTIVITIES: | |||||||||||
Net income | $ | 134 | $ | 915 | $ | 616 | $ | 1,349 | |||
Adjustments: | |||||||||||
Amortization and depreciation | 111 | 126 | 485 | 329 | |||||||
Impairments and write-offs of current and long-lived assets | (2) | 30 | (3) | 25 | |||||||
Stock-based compensation expense | 31 | 39 | 138 | 134 | |||||||
Deferred income taxes | (21) | (95) | (991) | (145) | |||||||
Loss (gain) on extinguishment of debt | - | - | - | 9 | |||||||
Gain on sale of properties | - | - | (9) | - | |||||||
Non-cash operating lease expense | 3 | 6 | 18 | 23 | |||||||
Impairment on non-marketable equity investments | 40 | - | 40 | - | |||||||
Other | (3) | 17 | 22 | 2 | |||||||
Changes in operating assets and liabilities, net of acquisitions: | |||||||||||
Accounts receivable, net | - | 3 | 7 | 11 | |||||||
Accounts payable | 6 | 2 | (12) | (8) | |||||||
Accrued compensation and benefits | 14 | (6) | (24) | (6) | |||||||
Contract liabilities | 75 | 57 | 35 | (5) | |||||||
Income taxes payable | 105 | (3) | 446 | (128) | |||||||
Other assets | 906 | (734) | 864 | (696) | |||||||
Other liabilities | (1) | (33) | 432 | (137) | |||||||
Net cash provided by (used in) operating activities | 1,398 | 324 | 2,064 | 757 | |||||||
INVESTING ACTIVITIES: | |||||||||||
Purchases of property and equipment | (3) | (1) | (20) | (6) | |||||||
Payments for acquisitions, net of cash acquired | - | - | - | (6,547) | |||||||
Proceeds from the maturities and sales of short-term | - | - | - | 4 | |||||||
investments | |||||||||||
Proceeds from the sale of properties | - | - | 25 | - | |||||||
Other | 1 | - | (3) | 2 | |||||||
Net cash provided by (used in) investing activities | (2) | (1) | 2 | (6,547) | |||||||
FINANCING ACTIVITIES: | |||||||||||
Repayments of debt and related equity component | (658) | (309) | (1,183) | (3,047) | |||||||
Proceeds from issuance of debt, net of issuance costs | - | - | - | 8,954 | |||||||
Net proceeds from sales of common stock under employee | 6 | 6 | 12 | 12 | |||||||
stock incentive plans | |||||||||||
Tax payments related to vesting of stock units | (1) | - | (26) | (20) | |||||||
Dividends and dividend equivalents paid | (78) | (80) | (323) | (314) | |||||||
Repurchases of common stock | (300) | - | (441) | (904) | |||||||
Net cash provided by (used in) financing activities | (1,031) | (383) | (1,961) | 4,681 | |||||||
Effect of exchange rate fluctuations on cash and cash | (8) | (2) | (9) | (28) | |||||||
equivalents | |||||||||||
Change in cash and cash equivalents | 356 | (62) | 96 | (1,137) | |||||||
Beginning cash and cash equivalents | 490 | 812 | 750 | 1,887 | |||||||
Ending cash and cash equivalents | $ | 846 | $ | 750 | $ | 846 | $ | 750 | |||
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GEN DIGITAL INC.
Reconciliation of Selected GAAP Measures to Non-GAAP Measures (1) (2)
(Unaudited, in millions, except per share amounts) | ||||||||||||
Three Months Ended | Year Ended | |||||||||||
March 29, 2024 | March 31, 2023 | March 29, 2024 | March 31, 2023 | |||||||||
Operating income (loss) | $ | 400 | $ | 357 | $ | 1,122 | $ | 1,227 | ||||
Contract liabilities fair value adjustment | - | 1 | - | 2 | ||||||||
Stock-based compensation | 31 | 36 | 138 | 123 | ||||||||
Amortization of intangible assets | 107 | 119 | 462 | 308 | ||||||||
Restructuring and other costs | 21 | 14 | 57 | 69 | ||||||||
Acquisition and integration costs | 4 | 6 | 24 | 77 | ||||||||
Litigation costs | 6 | 8 | 418 | 29 | ||||||||
Operating income (loss) (Non-GAAP) | $ | 569 | $ | 541 | $ | 2,221 | $ | 1,835 | ||||
Operating margin | 41.4 % | 37.7 % | 29.4 % | 36.8 % | ||||||||
Operating margin (Non-GAAP) | 58.8 % | 57.1 % | 58.3 % | 54.9 % | ||||||||
Net income (loss) | $ | 134 | $ | 915 | $ | 616 | $ | 1,349 | ||||
Adjustments to net income (loss) | ||||||||||||
Contract liabilities fair value adjustment | - | 1 | - | 2 | ||||||||
Stock-based compensation | 31 | 36 | 138 | 123 | ||||||||
Amortization of intangible assets | 107 | 119 | 462 | 308 | ||||||||
Restructuring and other costs | 21 | 14 | 57 | 69 | ||||||||
Acquisition and integration costs | 4 | 6 | 24 | 77 | ||||||||
Litigation costs | 6 | 8 | 418 | 29 | ||||||||
Other | (1) | 22 | - | 11 | ||||||||
Non-cash interest expense | 7 | 7 | 27 | 17 | ||||||||
Loss (gain) on extinguishment of debt | - | - | - | 9 | ||||||||
Loss (gain) on equity investments | 40 | 7 | 40 | 7 | ||||||||
Loss (gain) on sale of properties | - | - | (9) | - | ||||||||
Total adjustments to GAAP income (loss) before income taxes | 215 | 220 | 1,157 | 652 | ||||||||
Adjustment to GAAP provision for income taxes | (13) | (839) | (512) | (880) | ||||||||
Total adjustment to income (loss), net of taxes | 202 | (619) | 645 | (228) | ||||||||
Net income (loss) (Non-GAAP) | $ | 336 | $ | 296 | $ | 1,261 | $ | 1,121 | ||||
Diluted net income (loss) per share | $ | 0.21 | $ | 1.42 | $ | 0.96 | $ | 2.16 | ||||
Adjustments to diluted net income (loss) per share: | ||||||||||||
Contract liabilities fair value adjustment | - | 0.00 | - | - | ||||||||
Stock-based compensation | 0.05 | 0.06 | 0.21 | 0.20 | ||||||||
Amortization of intangible assets | 0.17 | 0.18 | 0.72 | 0.49 | ||||||||
Restructuring and other costs | 0.03 | 0.02 | 0.09 | 0.11 | ||||||||
Acquisition and integration costs | 0.01 | 0.01 | 0.04 | 0.12 | ||||||||
Litigation costs | 0.01 | 0.01 | 0.65 | 0.05 | ||||||||
Other | (0.00) | 0.03 | - | 0.02 | ||||||||
Non-cash interest expense | 0.01 | 0.01 | 0.04 | 0.03 | ||||||||
Loss (gain) on extinguishment of debt | - | - | - | 0.01 | ||||||||
Loss (gain) on equity investments | 0.06 | 0.01 | 0.06 | 0.01 | ||||||||
Loss (gain) on sale of properties | - | - | (0.01) | - | ||||||||
Total adjustments to GAAP income (loss) before income taxes | 0.34 | 0.34 | 1.80 | 1.04 | ||||||||
Adjustment to GAAP provision for income taxes | (0.02) | (1.30) | (0.80) | (1.41) | ||||||||
Total adjustment to income (loss), net of taxes | 0.32 | (0.96) | 1.00 | (0.37) | ||||||||
Incremental dilution effect | - | - | - | 0.01 | ||||||||
Diluted net income (loss) per share (Non-GAAP) | $ | 0.53 | $ | 0.46 | $ | 1.96 | $ | 1.81 | ||||
Diluted weighted-average shares outstanding | 637 | 644 | 642 | 624 | ||||||||
Incremental dilution impact of ASU 2020-06(3) | - | - | - | (5) | ||||||||
Diluted weighted-average shares outstanding (Non-GAAP) | 637 | 644 | 642 | 619 | ||||||||
- This presentation includes non-GAAP measures. Non-GAAP financial measures are supplemental and should not be considered a substitute for financial information presented in accordance with GAAP. For a detailed explanation of these non-GAAP measures, see Appendix A.
- Amounts may not add due to rounding.
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(3) Excludes the dilutive impact of ASU 2020-06(Debt with Conversion and Other Options) under GAAP. For a detailed explanation of this adopted guidance, see Appendix A.
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GEN DIGITAL INC.
Revenues and Cyber Safety Metrics
(Unaudited, in millions, except per user data and percentages)
Revenues (Non-GAAP)
Three Months Ended | Year Ended | ||||||||||||||||||||||||||
March 29, | March 31, | Variance in | March 29, | March 31, | Variance in | ||||||||||||||||||||||
2024 | 2023 | % | 2024 | 2023 | % | ||||||||||||||||||||||
Revenues | $ | 967 | $ | 947 | 2 % | $ | 3,812 | $ | 3,338 | 14 % | |||||||||||||||||
Contract liabilities fair value adjustment (1) | - | 1 | - | 2 | |||||||||||||||||||||||
Revenues (Non-GAAP) | 967 | 948 | 2 % | 3,812 | 3,340 | 14 % | |||||||||||||||||||||
Exclude foreign exchange impact (2) | 7 | - | 25 | - | |||||||||||||||||||||||
Constant currency adjusted revenues (Non- | $ | 974 | $ | 948 | 3 % | $ | 3,837 | $ | 3,340 | 15 % | |||||||||||||||||
GAAP) | |||||||||||||||||||||||||||
Cyber Safety Metrics | |||||||||||||||||||||||||||
Three Months Ended | Year Ended | ||||||||||||||||||||||||||
March 29, 2024 | December 29, | March 31, 2023 | March 29, 2024 | March 31, 2023 | |||||||||||||||||||||||
2023 | |||||||||||||||||||||||||||
Direct customer revenues | $ | 847 | $ | 837 | $ | 831 | $ | 3,353 | $ | 2,933 | |||||||||||||||||
Partner revenues | $ | 105 | $ | 99 | $ | 100 | $ | 396 | $ | 341 | |||||||||||||||||
Total Cyber Safety revenues | $ | 952 | $ | 936 | $ | 931 | $ | 3,749 | $ | 3,274 | |||||||||||||||||
Legacy revenues (3) | $ | 15 | $ | 15 | $ | 17 | $ | 63 | $ | 66 | |||||||||||||||||
Direct customer count (at quarter end) | 39.1 | 38.9 | 38.2 | 39.1 | 38.2 | ||||||||||||||||||||||
Direct average revenue per user (ARPU) (4) | $ | 7.24 | $ | 7.21 | $ | 7.24 | $ | 7.25 | $ | 7.10 | |||||||||||||||||
Retention rate | 77 % | 77 % | 76 % | 77 % | 76 % | ||||||||||||||||||||||
- Contract liabilities fair value adjustment represents the Avira deferred revenue haircut amortization recognized.
- Calculated using year ago foreign exchange rates.
- Legacy revenues includes revenues from products or solutions from markets that we have exited and in which we no longer operate, have been discontinued or identified to be discontinued, or remain in maintenance mode as a result of integration and product portfolio decisions.
- Due to the timing of the close of the acquisition in the second quarter of fiscal 2023, the fiscal 2023 ARPU is based on the average ARPU for second, third, and fourth quarter of fiscal 2023, but excludes the first quarter of fiscal 2023.
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Gen Digital Inc. published this content on 09 May 2024 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 09 May 2024 22:48:52 UTC.