Gen Digital Raises Outlook as Trust Business Drives Growth
Fiscal first-quarter revenue reached $1.336 billion, 6% above a year earlier.
Consumer cybersecurity company Gen Digital Inc. (GEN) raised its full-year outlook after fiscal first-quarter revenue and adjusted earnings exceeded its forecasts.
The quarter extended Gen’s momentum from the end of fiscal 2024, with revenue increasing 4.1% sequentially. Adjusted operating income also rose 4.2% from the prior quarter, while bookings declined 5.9%, tempering the near-term trajectory.
Revenue rose 6% on a GAAP basis and 11% on an adjusted comparable basis. GAAP diluted earnings increased 65% to $0.36 a share, while adjusted earnings rose 19% to $0.71 a share. Revenue cleared the high end of Gen’s prior guidance by $11 million, and adjusted earnings topped its range by $0.01 a share.
Trust-Based Solutions drove the expansion, with revenue rising 26% to $490 million. Cyber Safety Platform revenue declined 3% to $846 million. Partner revenue climbed 34% and accounted for about 20% of total revenue, up from 16% a year earlier, while Gen added 5 million paid customers to reach 81 million.
The growth carried higher costs. GAAP operating income fell 1% to $443 million, and operating margin narrowed 2.3 percentage points to 33.2%. Adjusted operating income rose 9% on a comparable basis, while its margin contracted 1.7 percentage points to 50.0%.
Operating cash flow and free cash flow each increased 6% from a year earlier, to $434 million and $430 million, respectively. Free cash flow slipped from $449 million in the preceding quarter. Restructuring and other costs more than tripled to $32 million, and excluded litigation costs increased to $23 million.
Gen now expects fiscal 2025 revenue of $5.375 billion to $5.475 billion, lifting both ends of its previous range by $50 million. Its adjusted earnings forecast rises by $0.02 at each end to $2.87 to $2.97 a share. For the second quarter, Gen expects revenue of $1.325 billion to $1.350 billion and adjusted earnings of $0.71 to $0.73 a share, signaling limited sequential revenue movement as margin pressure persists.