Executive Summary
Gen VR QQ2 2025 results reflect a high-margin software infrastructure portfolio delivering solid top-line growth and substantial profitability, underpinned by robust cash flow generation. Revenue for the quarter was $974 million, up 2.7% year over year and 0.9% quarter over quarter, while gross profit reached $780 million for an ~80.1% gross margin. EBITDA and operating income stood at $402 million with an operating margin of 41.3%, highlighting strong operating leverage in the quarter. Net income was $161 million with earnings per share of $0.26, up 8.0% year over year though down ~11% sequentially due to subdued top-line dynamics and non-operating expenses. Free cash flow totaled $156 million, supported by operating cash flow of $158 million and a cash balance of $737 million. The quarter also featured meaningful leverage, with total debt of $8.59 billion and net debt of $7.85 billion, resulting in interest expense of $149 million and a 2.7x interest coverage.
Looking ahead, the GenVR contingent value rights (CVR) introduce a material variable in the investment thesis. The CVR pays 2300 in Gen common stock if Gen’s 30-day volume-weighted average price reaches $37.50 within 24 months following the closing of the MoneyLion transaction. Absent explicit management guidance or visibility on CVR maturity timing and stock price triggers, upside attributes hinge on Gen Digital’s stock performance and the company’s ability to deleverage and sustain cash generation. Investors should weigh the potential CVR payoff against ongoing leverage risk and the secular demand for software infrastructure and cybersecurity offerings.
Key Performance Indicators
QoQ: -3.37% | YoY:1 508.00%
QoQ: -10.34% | YoY:13.04%
Key Insights
Revenue: $974.0M, YoY +2.74%, QoQ +0.93%
Gross Profit: $780.0M, Gross Margin ~80.1%, YoY +1.56%, QoQ +0.65%
Operating Income: $402.0M, Margin ~41.27%, YoY ~1508% (noting base effect) and QoQ -3.37%
EBITDA: $402.0M, Margin ~41.27%
Net Income: $161.0M, Margin ~16.53%, YoY +8.05%, QoQ -11.05%
EPS: $0.26, YoY +13.04%, QoQ -10.34%
Free Cash Flow: $156.0M
Operating Cash Flow: $158.0M
Cash at End of Period: $737.0M
Dividends Paid (Financing): -$77.0M
Capital Expenditures: -$2.0M
Total Debt: $8.588B, Ne...
Financial Highlights
Revenue: $974.0M, YoY +2.74%, QoQ +0.93%
Gross Profit: $780.0M, Gross Margin ~80.1%, YoY +1.56%, QoQ +0.65%
Operating Income: $402.0M, Margin ~41.27%, YoY ~1508% (noting base effect) and QoQ -3.37%
EBITDA: $402.0M, Margin ~41.27%
Net Income: $161.0M, Margin ~16.53%, YoY +8.05%, QoQ -11.05%
EPS: $0.26, YoY +13.04%, QoQ -10.34%
Free Cash Flow: $156.0M
Operating Cash Flow: $158.0M
Cash at End of Period: $737.0M
Dividends Paid (Financing): -$77.0M
Capital Expenditures: -$2.0M
Total Debt: $8.588B, Net Debt: $7.851B
Interest Expense: $149.0M
Current Ratio: 0.320, Quick Ratio: 0.286, Cash Ratio: 0.193
ROE: 7.67%, ROA: 1.04%, ROCE: 3.45%
P/E: 26.28x, Price/Book: 8.07x, EV/EBITDA: 61.62x
Current Quarter Margin Highlights: Operating Margin 41.3%, Gross Margin 80.1%
CVR Trigger: VWAP hurdle of $37.50 over 30 days within 24 months post-closing of MoneyLion transaction
Income Statement
| Metric |
Value |
YoY Change |
QoQ Change |
| Revenue |
974.00M |
2.74% |
0.93% |
| Gross Profit |
780.00M |
1.56% |
0.65% |
| Operating Income |
402.00M |
1 508.00% |
-3.37% |
| Net Income |
161.00M |
8.05% |
-11.05% |
| EPS |
0.26 |
13.04% |
-10.34% |
Key Financial Ratios
operatingProfitMargin
41.3%
operatingCashFlowPerShare
$0.26
freeCashFlowPerShare
$0.25
dividendPayoutRatio
47.8%
Management Commentary
No earnings call transcript was provided in the data set. Consequently, management quotes and thematic commentary from the QQ2 2025 call are not available. The synthesized takeaway from the disclosed financials suggests a disciplined profitability profile and a focus on cash generation, tempered by significant leverage and the contingent value rights payout considerations. Investors should monitor Gen Digital’s stock performance relative to the CVR hurdle and any management commentary on deleveraging or capital allocation that could influence the CVR’s value.
Forward Guidance
There is no explicit forward-looking guidance provided in the data. The GenVR CVR introduces upside tied to Gen Digital’s stock price triggers, which creates a bifurcated outlook: (1) a base-case financial trajectory anchored by robust EBITDA and operating cash flow, and (2) a speculative upside tied to stock-price milestones. In the near term, deleveraging and sustaining operating cash flow will be critical to enhance financial flexibility and reduce interest burden. Investors should monitor Gen Digital’s debt reduction progress, any changes to CVR terms, and the evolution of the cybersecurity/software infrastructure market, including demand growth and competitive dynamics that could affect sustained profitability and cash flow.