Gen Digital Inc. (GEN) is a global leader in consumer cybersecurity, privacy, and identity protection, empowering people to live their digital lives safely, privately, and confidently. With a family of trusted brands including Norton, Avast, LifeLock, Avira, AVG, ReputationDefender, and CCleaner, Gen delivers award-winning products and services that safeguard nearly 500 million users in over 150 countries.

Financials

In fiscal year 2024, Gen reported annual net income of $616 million, annual revenue of $3.812 billion, annual operating cash flow of $2.064 billion, and annual free cash flow of $2.044 billion. The company's strong financial performance was driven by its comprehensive Cyber Safety portfolio, which provides protection across multiple channels and geographies, including security and performance, identity protection, and online privacy.

During the fourth quarter of fiscal 2024, Gen reported revenue of $967 million, up 2% year-over-year in USD and 3% in constant currency. Cyber Safety revenue also increased 3% year-over-year in constant currency, with the U.S. market leading the growth at 3%. The company's international markets, particularly EMEA and Asia Pacific, saw mid- to high single-digit growth in constant currency as Gen expanded its identity protection partnerships.

Gen's direct revenue, which accounts for the majority of its business, reached $847 million in the fourth quarter, up 3% in constant currency. The company's direct customer base grew for the third consecutive quarter, reaching 39.1 million, an increase of over 230,000 customers sequentially and 900,000 year-over-year. Direct average revenue per user (ARPU) was $7.24, up $0.03 from the previous quarter and in line with the prior year's results, despite a $0.06 negative impact from foreign exchange headwinds.

The company's partner revenue, which includes strategic partnerships with financial services and insurance providers, reached $105 million in the fourth quarter, up 5% year-over-year. Gen continues to build its partner network and sees strong traction in its newly launched Norton Private Browser offering.

Outlook

Looking ahead, Gen provided guidance for fiscal year 2025, expecting full-year revenue in the range of $3.89 billion to $3.93 billion, representing 3% to 4% growth in Cyber Safety revenue in constant currency. The company also expects non-GAAP earnings per share (EPS) to be in the range of $2.17 to $2.23, an increase of 12% to 15% in constant currency.

For the first quarter of fiscal 2025, Gen expects non-GAAP revenue between $960 million and $970 million, translating to approximately 3% growth in Cyber Safety, and non-GAAP EPS in the range of $0.52 to $0.54, up 12% to 16% in constant currency.

Business Overview

Gen's strong financial performance is a testament to its comprehensive Cyber Safety solutions, which address the evolving threat landscape and growing consumer demand for digital safety and privacy. The company's focus on innovation, customer centricity, and disciplined execution has enabled it to deliver consistent growth and profitability.

One of the key drivers of Gen's success has been its ability to integrate and leverage the strengths of its acquired businesses, such as Avast. The company has delivered on its integration commitments, realizing over $300 million in annual cost synergies, while also driving revenue synergies through cross-selling and upselling initiatives.

Another critical component of Gen's strategy is its investment in technology and innovation. The company has developed a new technology platform, the Gen Stack, which consolidates its product portfolio into a single, scalable, and modular platform. This platform enables greater personalization, enhanced user experiences, and faster deployment of new features and solutions to address the dynamic threat landscape.

Gen's commitment to innovation is also evident in its recent launch of Norton Genie, an AI-driven anti-scam assistant that helps customers identify and protect against evolving social engineering threats. The app has already reached over 1 million downloads in just 100 days, with high customer satisfaction ratings.

The company's geographic diversification has also been a key strength, with strong performance across its markets. In the U.S., Gen has seen growth in its privacy and performance offerings, while its international markets, particularly EMEA and Asia Pacific, have experienced mid- to high single-digit growth in constant currency as the company expands its identity protection partnerships.

Liquidity

Gen's liquidity position remains robust, with $846 million in cash and cash equivalents at the end of the fourth quarter and $2.3 billion in total liquidity, including a $1.5 billion revolving credit facility. The company has also made significant progress in reducing its net leverage to 3.4 times, down from 3.9 times at the time of the Avast acquisition.

In terms of capital allocation, Gen remains disciplined and balanced, returning 100% of excess free cash flow to shareholders. During the fourth quarter, the company voluntarily paid down $600 million of its term loan, with an additional $58 million repaid per the maturity schedule. Gen also deployed $300 million for share repurchases, equivalent to 14 million shares, and paid $78 million in dividends to shareholders.

Conclusion

Looking ahead, Gen is well-positioned to capitalize on the growing demand for comprehensive Cyber Safety solutions. The company's strong brand recognition, innovative product portfolio, and disciplined execution have positioned it as a leader in the consumer cybersecurity market. With its focus on organic growth, strategic partnerships, and continued investment in technology and innovation, Gen is poised to deliver sustainable and profitable growth in the years to come.