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Gen Digital reported profit of $0.71 per share, topping the $0.69 analysts expected. Revenue reached $1.34 billion, also coming in ahead of targets. This performance is particularly notable because the quarter had one fewer week than the same period last year, yet the company still managed to grow its results.
The company is seeing success in its plan to move customers beyond basic antivirus software into more expensive identity protection and financial safety tools. Because these services are sold as subscriptions, they provide a steady stream of cash that the company can use to pay down the debt it took on for the Avast merger. Management now expects the rest of the year to be stronger than originally planned and raised its full-year guidance accordingly.
See the full quarter, and how our tracked metrics did
Source: 8-K filing
The company reports its first quarter results today after the market closes. Analysts expect revenue of about 1.31 billion dollars and earnings of roughly 69 cents per share. While the company has a long streak of beating these targets, the numbers that matter most for the long term are its debt levels and customer retention.
We are watching to see if the company is using its cash to pay down the nearly 10 billion dollars in debt it took on for the Avast merger. We also want to see if customers are sticking with their subscriptions and moving into higher-priced identity protection plans, which is the core of our view that this business is more profitable and resilient than its low stock price suggests.
Gen Digital launched a new intelligence hub called the Fearless Planet Index. It provides a live view of scams and cyber threats reported around the world. While this is a marketing and research tool rather than a new revenue stream, it helps keep the company's brands like Norton and Avast at the center of the conversation about online safety.
Source: PRNewsWire
MoneyLion, which is part of the Gen Digital family, launched a new monthly membership called MoneyLion One. The bundle combines banking, investing, and cash back with identity theft and scam protection.
This is a clear example of the cross-selling we look for. By folding security tools into a broader financial membership, the company can reach customers who might not have bought a standalone identity protection plan, helping to grow its base of recurring, high-margin subscribers.
Source: PRNewsWire
RBC Capital raised its price target for the stock to $27, up from $24 previously. This move brings their target in line with where the stock is currently trading. While not a massive jump, it reflects a growing comfort with the company's ability to generate cash and manage its debt after the Avast merger.
Source: RBC Capital
Management has beaten expectations for eight straight quarters. They consistently set a bar they can clear, making their financial targets feel reliable.
| Expectation | |
|---|---|
| EPS | $0.71 |
| Revenue | $1.34B |
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