"Genie Scam Protection in our Northern Cyber Safety products to help defend against phony calls, texts, emails, or websites. Northern Genie has significantly boosted our overall scam detection efficacy by as much as tenfold since its release." - Vincent Pilette
Gen Digital Inc (GEN) Q4 2025 Results: AI-Driven Expansion, Two-Segment Growth Model, and Pathway to 2026 Guidance
Executive Summary
Gen Digital reported a record Q4 2025 with $1.01 billion of revenue (up 5% YoY), bringing full-year 2025 revenue to approximately $3.94 billion (up 4% YoY) and a non-GAAP operating margin of 58.4%, underscored by broad-based growth across core cyber safety offerings, identity protection, and expanding financial wellness capabilities via MoneyLion. The company generated robust cash flow, delivering $473 million of operating cash flow and roughly $470 million of free cash flow in Q4, with year-end net leverage of 3.2x EBITDA. Management highlighted ongoing AI-driven enhancements (Genie Scam Protection, GenStack migration) and a program of capacity expansion through geographic diversification and partner ecosystems. The MoneyLion acquisition, closed just before year-end, is positioned to extend GEN’s addressable market into financial wellness and “trust-based solutions,” with synergy targets including improving MoneyLion’s operating margin to above 20% in FY26 and delivering embedded banking and marketplace features across LifeLock and Northern Financial Wellness platforms.
Key Performance Indicators
Revenue
1.01B
QoQ: 2.43% | YoY:4.45%
Gross Profit
811.00M
80.30% margin
QoQ: 2.27% | YoY:4.38%
Operating Income
417.00M
QoQ: 11.50% | YoY:4.25%
Net Income
142.00M
QoQ: -10.69% | YoY:5.97%
EPS
0.23
QoQ: -11.54% | YoY:9.52%
Revenue Trend
Margin Analysis
Key Insights
Q4 2025 revenue: $1.01B, up 5% YoY and 5% QoQ; full-year 2025 revenue: approximately $3.935B, up 4% YoY (USD).
Gross margin: 80.3% in Q4 (gross profit $811M on revenue of $1.01B).
Operating income and margin: Q4 operating income $590M, margin 58.4%; FY25 operating income $2.3B with a 58.4% margin.
Net income and EPS: Q4 net income $366M, EPS $0.59 (diluted) up ~12% YoY; full-year EPS $2.22 (non-GAAP) up 15% in constant currency.
Cash flow: Q4 operating cash flow $473M; free cash flow $470M; cash balance >$1.0B; liquidity >$2.5B including a $1.5B revolver.
Financial Highlights
Summary of key metrics and drivers across GEN's Q4 2025 and FY2025 results:
- Q4 2025 revenue: $1.01B, up 5% YoY and 5% QoQ; full-year 2025 revenue: approximately $3.935B, up 4% YoY (USD).
- Gross margin: 80.3% in Q4 (gross profit $811M on revenue of $1.01B).
- Operating income and margin: Q4 operating income $590M, margin 58.4%; FY25 operating income $2.3B with a 58.4% margin.
- Net income and EPS: Q4 net income $366M, EPS $0.59 (diluted) up ~12% YoY; full-year EPS $2.22 (non-GAAP) up 15% in constant currency.
- Cash flow: Q4 operating cash flow $473M; free cash flow $470M; cash balance >$1.0B; liquidity >$2.5B including a $1.5B revolver.
- Balance sheet and leverage: ending net leverage reported at 3.2x EBITDA; total debt approx. $8.315B with cash of $1.006B; no material debt due until 2028 per management.
- Bookings and guidance: total bookings for FY25 were $4.0B; management mid-single-digit growth trajectory for Cyber Safety and high single-digit growth potential in Trust-Based Solutions; FY26 guidance for revenue of $4.7–$4.8B and non-GAAP EPS of $2.46–$2.54.
- Customer and monetization metrics: direct customers 40.4M as of Q4; retention 78%; direct ARPU $7.27; mobile ARPU in double digits; indirect channel contributed ~$121M in Q4 (up 15% YoY), with strong momentum in employee benefits and telcos.
Income Statement
Metric
Value
YoY Change
QoQ Change
Revenue
1.01B
4.45%
2.43%
Gross Profit
811.00M
4.38%
2.27%
Operating Income
417.00M
4.25%
11.50%
Net Income
142.00M
5.97%
-10.69%
EPS
0.23
9.52%
-11.54%
Key Financial Ratios
currentRatio
0.51
grossProfitMargin
80.3%
operatingProfitMargin
41.3%
netProfitMargin
14.1%
returnOnAssets
0.92%
returnOnEquity
6.26%
debtEquityRatio
3.64
operatingCashFlowPerShare
$0.77
freeCashFlowPerShare
$0.76
dividendPayoutRatio
54.2%
priceToBookRatio
7.18
priceEarningsRatio
28.66
Net Income vs. Revenue
Expense Breakdown
Management Commentary
Key management insights from the Q4 2025 earnings call:
- Vincent Pilette (CEO) emphasized resilience and a two-segment growth model: “Q4 marks another quarter of mid-single digit top-line growth at 5%, a 23rd consecutive quarter of growth, another quarter of customer account growth, and double-digit growth in earnings.” He also highlighted AI-driven threat protection and the Genie line as core growth engines and noted the MoneyLion acquisition as a strategic expansion into financial wellness and trust-based solutions.
- Genie Scam Protection rollout: “Genie Scam Protection in our Northern Cyber Safety products to help defend against phony calls, texts, emails, or websites. Northern Genie has significantly boosted our overall scam detection efficacy by as much as tenfold since its release.”
- GenStack migration and user experience: The Northern migration has been completed with a focus on delivering an enhanced experience to Avast customers next, enabled by GenStack integration for faster innovation and unified data across products.
- MoneyLion integration and synergy: Natalie Derse (CFO) described the strategic rationale for MoneyLion as expanding TAM and enabling a broader financial wellness platform across Gen’s 65 million paid customers. Management targets MoneyLion operating margin to rise from ~15% to >20% in FY26 and plans to embed MoneyLion capabilities into LifeLock and Northern Financial Wellness features launching in FY26.
- Risk and macro considerations: Both Vincent and Natalie stressed resilience in a mixed macro environment, emphasizing recurring revenue, high retention, geographic diversification, and ongoing cost discipline to protect margins; management also noted FX headwinds and acknowledged the dynamic threat landscape that underpins demand for cyber safety products.
Genie Scam Protection in our Northern Cyber Safety products to help defend against phony calls, texts, emails, or websites. Northern Genie has significantly boosted our overall scam detection efficacy by as much as tenfold since its release.
— Vincent Pilette
We will report our bookings and operating margin for cyber safety platform and trust-based solutions on a quarterly basis.
— Vincent Pilette
Forward Guidance
Gen Digital provided FY2026 outlook and highlighted the following considerations:
- Revenue guidance: $4.7B–$4.8B for FY2026, representing 6%–8% pro forma growth. The base case reflects steady growth in the Cyber Safety platform with mid-single-digit growth and continued acceleration from Trust-Based Solutions driven by Identity and Financial Wellness capabilities (including MoneyLion integration).
- Earnings guidance: Non-GAAP EPS guidance of $2.46–$2.54 for FY2026, implying 12%–15% growth in constant currency.
- Q1 guidance: Non-GAAP revenue of $1.18B–$1.21B and non-GAAP EPS of $0.59–$0.61, noting an extra week in Q1 that will affect reported revenue and that the MoneyLion contribution is partially offset by pre-acquisition stub revenue and a business-model transition.
- Assumptions and risks: FX volatility remains a factor; guidance assumes current FX rates with potential fluctuations; management underscored a balanced capital allocation stance (deleveraging toward a net leverage of <3x EBITDA by end-FY2027) while pursuing opportunistic buybacks and debt reduction.
- Key growth drivers and monitoring: ongoing AI-driven threat detection enhancements (Genie), expansion into higher-value financial wellness products, cross-sell into the existing base (65M customers), and continued international expansion; investors should monitor the progress of MoneyLion integration, cross-sell monetization, ARPU trajectory, retention, and the pace of deleveraging.
Competitive Position
Company
Gross Margin
Operating Margin
Return on Equity
P/E Ratio
GEN Focus
80.30%
41.30%
6.26%
28.66%
WEX
59.50%
24.70%
4.29%
27.03%
FLT
1.00%
47.20%
7.88%
21.36%
CSGS
51.30%
13.40%
12.20%
10.36%
SQSP
74.30%
6.62%
-2.02%
213.78%
Gross Profit Margin
Operating Profit Margin
Return on Equity
P/E Ratio Comparison
Investment Outlook
Overall, Gen Digital presents an attractive long-term growth proposition anchored in a high-margin, highly recurring software platform with strong cash generation and a strategic acquisition (MoneyLion) that expands the TAM into financial wellness and trust-based solutions. The Q4 2025 results demonstrate durable growth characteristics (5% quarterly revenue growth, 58.4% non-GAAP margins) and management’s commitment to deleveraging while funding innovation. FY26 guidance ($4.7–$4.8B revenue, $2.46–$2.54 EPS) supports a mid-to-high single-digit revenue growth trajectory with double-digit EPS growth, aided by MoneyLion operational improvements and cross-sell opportunities across a 65M direct/indirect customer base. Key catalysts include Genie’s continued AI-driven performance, GenStack-driven lifetime value improvements, geographic/channel expansion, and the monetization of the MoneyLion platform. Risks include integration complexity, FX volatility, macro headwinds, and the need to realize the anticipated margin uplift in MoneyLion as it transitions from a primarily transactional model to a more subscription-based framework. Given the strong cash flow, resilient business model, and strategic plan, the stock warrants a constructive stance for investors with a focus on margin trajectory, integration progress, and sustainable cross-sell growth across cyber safety and trust-based solutions.
Key Investment Factors
Growth Potential
Two-segment framework (Cyber Safety Platform and Trust-Based Solutions) with mid-single-digit growth in Cyber Safety and high-single-digit growth potential in Trust-Based Solutions. AI-enabled protection (Genie) and the GenStack platform are expected to lift cross-sell, ARPU, and CLV. MoneyLion acquisition broadens the TAM into financial wellness and enables embedding banking/ marketplace capabilities across existing LifeLock and Northern offerings, driving higher lifetime value and deeper customer engagement. FY26 revenue guidance of $4.7–$4.8B and non-GAAP EPS of $2.46–$2.54 supports a structural growth narrative aided by cross-sell and geographic expansion.
Profitability Risk
Key risks include integration risk of the MoneyLion acquisition, FX headwinds (noted by management), macro softness potentially affecting discretionary spend on cybersecurity and financial wellness, and potential competition in both consumer cybersecurity and identity/financial services. Leverage remains elevated (net leverage ~3.2x at year-end) with ongoing deleveraging to sub-3x by FY2027; execution risk in moving MoneyLion toward a subscription-based model and realizing expected margin improvements.
Financial Position
Strong cash generation: CFO $473M and FCF $470M in Q4; full-year 2025 FCF near $2B; end-FY liquidity >$2.5B including revolver; cash balance >$1B. EBITDA-driven profitability remains robust with FY25 non-GAAP operating margin at 58.4%. Balance sheet carries substantial long-term debt (~$8.01B) with a plan to deleverage toward sub-3x EBITDA by FY2027; dividend consistency ($0.125 per share quarterly; $77M in Q1 FY2026) and a sizable remaining buyback program ($2.7B) support capital allocation discipline. Integration of MoneyLion through a forward-flow model aims to reduce balance sheet exposure while expanding earnings potential.
SWOT Analysis
Strengths
Very high gross and operating margins (FY25 gross margin ~80.3%; operating margin ~58.4%).
Strong, recurring revenue model with broad geographic diversification and multi-channel distribution.
Record FY25 bookings ($4B) and solid YoY/constant-currency growth.
Largest consumer cybersecurity portfolio with Norton, LifeLock, Genie, and Northern platforms; ongoing AI enhancements.
MoneyLion acquisition expands TAM into financial wellness and enables cross-sell across 65M paid customers.
Strong cash generation and deleveraging trajectory; 3.2x net leverage at year-end.
Two-segment operating focus allows targeted investments and KPI visibility (bookings and non-GAAP margins).
Significant customer base and high retention (Q4 retention 78%; direct customers >40M).
Weaknesses
High level of indebtedness and elevated net leverage, albeit trending down toward 3x by 2027.
Recent acquisition (MoneyLion) adds integration risk and execution risk to near-term margins and revenue mix.
Goodwill/intangible assets are sizable (Goodwill ~$10.24B; Intangibles ~$2.27B) which could expose impairment risk if growth slows.
FX headwinds and potential macro sensitivity to discretionary consumer spend remain a factor.
Transition from transactional to subscription-based revenue for MoneyLion may take time to ramp.
Opportunities
Cross-sell and embed MoneyLion financial wellness features into LifeLock and Northern platforms; expand into a full financial lifecycle offering.
GenStack-driven personalized experiences to lift ARPU and CLV; stronger international expansion via partner channels.
AI-powered threat detection and anti-scam capabilities (Genie) to broaden protection across SMS, email, and calls.
Further expansion through employee benefits and telecom partnerships, plus new markets (15 markets added in Identity/Privacy).
Leverage MoneyLion to broaden distribution and accelerate post-acquisition growth with subscription-based monetization.
Threats
Macro volatility and competition in consumer cybersecurity and identity/financial wellness spaces.
Regulatory risk and data privacy concerns in cross-border markets.
Execution risk in delivering synergies and achieving >20% MoneyLion margin in FY26.
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