Gen Digital (GEN) Q2 2027 Earnings Call Transcript

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DATE

Wednesday, Oct. 28, 2026

CALL PARTICIPANTS

• Head of Investor Relations – Benjamin Lu
• Chief Executive Officer – Vincent Pilette
• Chief Financial Officer – Natalie Derse

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TAKEAWAYS

• Total Net Revenue — $1.369 billion, representing 12% growth year over year and exceeding the high end of management guidance.
• Non-GAAP EPS — $0.74, an increase of 19% versus last year due to strong incremental operating drop-through.
• Total Bookings — $1.347 billion, up 10% compared to the prior year and marking the sixth consecutive quarter of double-digit growth.
• Paid Customer Count — 83 million, reflecting an increase of 6 million year over year and 2 million sequentially.
• Cyber Safety Revenue — $858 million, growing 5% driven by the adoption of comprehensive memberships and customer upsells.
• Trust-Based Solutions Revenue — $511 million, increasing 26% behind personal financial wellness adoption and marketplace expansion.
• Partner Channel Revenue — $295 million, rising 40% due to accelerated growth in employee benefits, financial marketplaces, and telco channels.
• Direct Revenue — $1.074 billion, rising 6% in line with historical quarterly trends.
• Non-GAAP Operating Margin — 50%, remaining stable as efficiency gains funded increased product and marketing investments.
• Cyber Safety Operating Margin — 62%, reaching a record high for the segment due to rigorous operational discipline.
• Trust-Based Solutions Operating Margin — 30%, maintained while the company scaled its financial wellness offerings.
• Fiscal Year 2027 Revenue Guidance — $5.465 billion to $5.515 billion, raised from the previous range of $5.375 billion to $5.475 billion.
• Fiscal Year 2027 Non-GAAP EPS Guidance — $2.93 to $2.98, representing 16% to 18% growth and outperforming original midterm targets.
• Q3 Revenue Guidance — $1.365 billion to $1.390 billion, representing expected growth of 10% to 12% versus last year.
• Non-GAAP Free Cash Flow — $323 million in the quarter, with year-to-date free cash flow increasing 47% to $753 million.
• Net Leverage — below 2.9x, following a $45 million debt repayment during the second quarter.
• Share Repurchases — $171 million during the quarter, with $1.8 billion remaining in the current authorization.
• Matched Product Inquiries — more than doubled year over year in the Engine marketplace, reflecting increased consumer interest.
• Norton 360 Run Rate — over $1.7 billion, maintaining growth at or above mid-single digits.
• AI Support Resolution — approximately 50% of customer contacts, improving service levels while reducing overall support costs.
• AI Engineering Productivity — up 20% since the beginning of the fiscal year, with 75% of code shipped being AI written.
• Norton Money Workplace Pipeline — over $30 million, representing early demand in the employee benefit channel.
• Retention and ARPU Lift — improved 5 points to 10 points for customer cohorts migrating to multiproduct memberships.
• AI Creative Assets — 4x higher output than the previous year, with 85% of scenes in a recent LifeLock campaign being AI-generated.
• Quarterly Cash Dividend — $0.125 per common share, approved for payment on Dec. 9, 2026.

SUMMARY

Gen Digital Inc. (GEN +0.41%) reported double-digit growth in bookings and revenue for the second quarter, driven by the expansion of its Cyber Safety and Trust-Based Solutions segments. Management stated that the company reached a record high paid customer count of 83 million and raised its full-year guidance for both revenue and non-GAAP EPS. The company is integrating generative AI across its operations to improve engineering productivity and customer support efficiency. Management reported a strategic focus on its protect, empower, and prosper framework to address emerging security needs in an agentic AI environment through a single platform.

• CEO Pilette stated, “Our Norton cross-sell penetration is near 30%, and our AI recommender lifts revenue from new Norton cross-sells by mid-single digits.”
• Management reported that the company’s AI strategy encompasses three layers: AI built into products, protection for people using AI agents, and trusted infrastructure for agentic transactions.
• The company noted that U.S. identity breach notices in the first six months of 2026 exceeded the total for all of 2025.
• CEO Pilette clarified that “we are not working on a transformative acquisition today,” emphasizing that the organic growth plan stands on its own.
• The company’s Agent Trust Hub screens AI skills that have been installed over 100 million times by users in leading agent marketplaces.
• Management added 18 new partners to the Engine marketplace during the quarter and indicated an even larger sales pipeline of new partners for future onboarding.

INDUSTRY GLOSSARY

• Norton 360: An all-in-one subscription-based cyber protection platform covering devices, privacy, and identity.
• LifeLock: An identity theft protection service providing monitoring, alerts, and restoration assistance.
• MoneyLion: A personal financial management platform providing banking, borrowing, and investment services.
• Engine: A financial marketplace platform that connects consumers with credit, insurance, and other financial products.
• Instacash: A liquidity solution providing users with early access to earned wages to manage cash flow.
• Agentic AI: Autonomous AI systems capable of performing tasks and making transactions on behalf of human users.
• ARPU: Average Revenue Per User, a metric measuring the average revenue generated per individual customer.
• PFM: Personal Financial Management, tools used by consumers to track and manage their financial lives.
• CLV: Customer Lifetime Value, the total projected revenue a business expects to earn from a customer over time.
• CAC: Customer Acquisition Cost, the total expense incurred to acquire a new customer.

Full Conference Call Transcript

Operator: Good afternoon, everyone. Thank you for standing by. My name is Jen, and I will be your conference operator today. Today’s call is being recorded. [Operator Instructions] At this time, for opening remarks, I would like to pass the call over to Ben Lu, Head of Investor Relations.

Benjamin Lu: Thank you, Jen, and good afternoon, everyone. Welcome to Gen’s Second Quarter Fiscal Year 2027 Earnings Call. Joining me today are Vincent Pilette, CEO; and Natalie Derse, CFO. As a reminder, there will be a replay of this call posted on the Investor Relations website, along with our slides and press release. I’d like to remind everyone that during this call, all references to the financial metrics are non-GAAP an

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