Slide 1: Q1 FY25 Earnings
Q1 FY25 Earnings August 1, 2024 Copyright © 2024 Gen Digital Inc. All rights reserved.
Slide 2: Forward-Looking Statements
Forward-Looking Statements This presentation contains statements which may be considered forward-looking within the meaning of the U.S. federal securities laws. In some cases, you can identify these forward-looking statements by the use of terms such as “expect,” “will,” “continue,” or similar expre
Slide 3: Purpose and Mission: Powering Digital Freedom
Purpose Powering Digital Freedom Mission We create technology solutions for people to take full advantage of the digital world, safely, privately, and confidently – so together, we can build a better tomorrow. Copyright © 2024 Gen Digital Inc. All rights reserved. 3
Slide 4: Business & Portfolio Highlights
Business & Portfolio Highlights Copyright © 2024 Gen Digital Inc. All rights reserved. 4
Slide 5: Industry Leader in a Dynamic Threat Landscape
Industry Leader in a Dynamic Threat Landscape Q1 Threat Industry Landscape Recognitions 3B+ PCWorld Best of 2024 Blocked attacks Norton 360 Deluxe, Avast One, AVG Internet Security, and Avira Prime Scams PCMag Editor’s Choice 2024 Continue to be the highest Avast One malware threat 2024 Edison Award
Slide 6: Norton Ultra VPN
Norton Ultra VPN The next-generation VPN solution now available Your one-stop shop for cyber safety. • Enjoy fast, reliable, and secure VPN • Browse more privately and securely • Monitor your personal data to know if it’s compromised • Keep your whole family safer online Personalized, modular Cyber
Slide 7: Scam Artists Educational Cyber Safety Campaign
Scam Artists Educational Cyber Safety Campaign A visual display of the emotional toll of cyber crime We captured the brain reactions to the experiences of three cyber crime victims. We asked them to recall life before the event and reimagine life with cyber protection in place. c In each case, the p
Slide 8: Personal Data Exposure Scan
Personal Data Exposure Scan Visit https://lifelock.norton.com/exposurescan to see how much of your personal information is at risk. Your free exposure report includes: • A LifeLock dark web scan that looks for your personal info where bad guys use it for their gain. • A Norton Privacy Monitor scan t
Slide 9: Environment Social Governance
Gen brings together our team, passions and technology to support people and communities, making the world a better, safer place. Environment Social Governance 22% $6.1M 100% reduction in Scope 1 and 2 GHG emissions in total charitable giving of employees completed the annual Code of Conduct training
Slide 10: FY25 Q1 Results
FY25 Q1 Results Copyright © 2024 Gen Digital Inc. All rights reserved. 10
Slide 11: Q1 Non-GAAP Business Highlights
Q1 Non-GAAP Business Highlights • 20th consecutive quarter of growth, Cyber Safety Bookings up 4% in constant currency • Operating margin of 58.4%, up 90 bps Y/Y • Double-digit EPS growth driven by strong execution and balanced capital allocation Bookings Revenue (1) Operating Income (1) EPS (1) +4%
Slide 12: Solid Start to FY25
Solid Start to FY25 Non-GAAP P&L Q1 Q4 Q1 Y/Y % ($mil), except per share amounts FY24 (1) FY24 (1) FY25 USD • Q1 Revenue of $965M, up 3% (CC) Revenue $943 $964 $965 2% • Stronger growth in US market, supported by Identity and Privacy Y/Y % (CC) 35% (2) 3% 3% -- • Diversification efforts progressing,
Slide 13: Gen Performance Metrics
Gen Performance Metrics REVENUE CYBER SAFETY METRICS Q1 Q4 Q1 Y/Y % Y/Y % Q1 Q4 Q1 FY24 FY24 FY25 USD CC Y/Y FY24 FY24 FY25 Direct (1) (2) $829 $844 $850 3% 3% Direct Customers 38.2M 39.1M 39.3M 1.1M (Q/Q change) (29K) +232K +192K + Partners $97 $105 $101 4% 6% Direct Monthly ARPU (4) $7.24 $7.22 $7
Slide 14: Balance Sheet & Cash Flow
Balance Sheet & Cash Flow ● Liquidity of $2.1B+ Key Balance Sheet, Q1 Q4 Q1 Cash Flow, & Other Metrics ● $644M cash + $1.5B revolver undrawn ($mil) FY24 FY24 FY25 Balance Sheet ● Debt / EBITDA (3) Net Leverage of 3.5x Cash and Cash Equivalents $623 $846 $644 Contract Liabilities (1) $1,778 $1,884 $1
Slide 15: Q2 FY25 and Re-Affirm FY25 Non-GAAP Guidance
Q2 FY25 and Re-Affirm FY25 Non-GAAP Guidance FY25 Key Assumptions (Growth in Constant Currency) Q2 FY25 • Cyber Safety Bookings growth: 3-5% REVENUE $965M - $975M FY25 • Cyber Safety Revenue growth: 3-4% EPS $0.53 - $0.55 REVENUE • EPS growth: 12-15% $3.890B - $3.930B Note: All numbers presented are
Slide 16: Supplemental Information
Supplemental Information Copyright © 2024 Gen Digital Inc. All rights reserved. 16
Slide 17: Immaterial Correction of Prior Period Financial Statements
Immaterial Correction of Prior Period Financial Statements Disclosure: During the first quarter of fiscal year 2025, we made a revision to our historical practice of when we recognize revenue from certain customers, changing from successful billing date to renewal start date. We concluded that the i
Slide 18: Capital Structure
Capital Structure Facility Revolver (RCF): undrawn Principal ($ mil) $1,500 Maturity 2027 Coupon If drawn: SOFR+CSA+1.5% Debt Maturities in $mil (Initial Principal Amounts) As of June 28, 2024 Term Loan A (TLA) $3,617 2027 SOFR+CSA+1.5% Term Loan B (TLB) $2,405 2029 SOFR+1.75% 2025 Sr. Unsecured Not
Slide 19: Trended Non-GAAP Quarterly Results
Trended Non-GAAP Quarterly Results Non-GAAP P&L Q1 FY24 Q2 FY24 Q3 FY24 Q4 FY24 FY24 Q1 FY25 ($M), except per share amounts Direct Customer Revenues 829 834 834 844 3,341 850 Partner Revenues 97 95 99 105 396 101 TOTAL CYBER SAFETY REVENUE $926 $929 $933 $949 $3,737 $951 Legacy Revenues 17 16 15 15
Slide 20: Reconciliation to Non-GAAP Gross Profit
Reconciliation to Non-GAAP Gross Profit GAAP to Non-GAAP Gross Profit ($M) Q1 FY24 Q2 FY24 Q3 FY24 QQ4 FY24 FY24 Q1 FY25 GAAP Results of Operation Gross profit (GAAP) $764 $765 $766 $774 $3,069 $775 Non-GAAP Gross Profit Adjustments Cost of revenues • Stock-based compensation 1 1 1 1 4 1 • Amortizat
Slide 21: Reconciliation to Non-GAAP Operating Income
Reconciliation to Non-GAAP Operating Income GAAP to Non-GAAP Operating Income Q1 FY24 Q2 FY24 Q3 FY24 Q4 FY24 FY24 Q1 FY25 ($M) GAAP Results of Operation Operating income (GAAP) $359 $22 $332 $397 $1,110 $417 Total Non-GAAP gross profit 58 59 58 58 233 58 adjustment Non-GAAP Operating Expense Adjust
Slide 22: Reconciliation to Non-GAAP Net Income
Reconciliation to Non-GAAP Net Income GAAP to Non-GAAP Net Income ($M) Q1 FY24 Q2 FY24 Q3 FY24 Q4 FY24 FY24 Q1 FY25 GAAP Results of Operation Net income (GAAP) $187 $147 $142 $131 $607 $181 Total Non-GAAP gross profit adjustment 58 59 58 58 233 58 Total Non-GAAP operating expense 125 465 165 111 866
Slide 23: Reconciliation to Non-GAAP EPS and Net Income
Reconciliation to Non-GAAP EPS and Net Income Q1 FY25 GAAP to Non-GAAP EPS and Net Income (1) ($M), except per share amounts EPS Net Income GAAP EPS / Net Income $0.29 $181 • Stock based compensation 0.05 31 • Amortization of intangible assets 0.16 100 • Restructuring and other costs (0.00) (1) • Ac
Slide 24: Reconciliation to Non-GAAP (Unlevered) Free Cash Flow
Reconciliation to Non-GAAP (Unlevered) Free Cash Flow Unlevered Free Cash Flow Reconciliation ($M) Q1 FY25 Net Cash Flow from Operating Activities $264 Adjustments: • Capital Expenditures (2) Free Cash Flow $262 Adjustments: • Cash paid for interest expense, net of interest rate hedges $187 Unlevere
Slide 25: Trended GAAP Revenue by Geo
Trended GAAP Revenue by Geo Revenue by Geo ($M) Q1 FY24 Q2 FY24 Q3 FY24 Q4 FY24 FY24 Q1 FY25 US 558 563 563 578 2,262 579 Rest of Americas 56 55 56 56 223 57 Americas 614 618 619 633 2,484 636 EMEA 226 227 230 233 916 233 APJ 103 100 99 98 400 96 Total Revenue $943 $945 $948 $964 $3,800 $965 During
Slide 26: Trended EBITDA (Non-GAAP)
Trended EBITDA (Non-GAAP) Reported EBITDA (Non-GAAP) (1) ($M) Q1 FY24 Q2 FY24 Q3 FY24 QQ4 FY24 FY24 Q1 FY25 Net income $187 $147 $142 $131 $607 $181 Adjustments: • Net interest expense 164 167 160 153 644 145 • Income tax expense (benefit) 14 (291) 36 81 (160) 95 • Depreciation and amortization 125
Slide 27: Trended Share Count and Stock-Based Compensation
Trended Share Count Diluted Share Count Q1 FY24 Q2 FY24 Q3 FY24 Q4 FY24 FY24 Q1 FY25 Shares in millions Basic Share Count Weighted 640 640 639 630 637 621 Average Dilutive Potentially Issuable Shares: From Employee Equity 3 4 6 7 5 6 Awards Diluted Share Count (GAAP) 643 644 645 637 642 627 Diluted
Slide 28: Debt Covenant EBITDA (Non-GAAP)
Debt Covenant EBITDA (Non-GAAP) Debt Covenant EBITDA (Non-GAAP) (1) ($M) LTM (3) Net income $601 Adjustments: • Net interest expense 625 • Income tax expense (benefit) (79) • Depreciation and amortization 465 EBITDA (Non-GAAP) $1,612 Adjustments to EBITDA: • Stock-based compensation 132 • Restructur
Slide 29: Use of GAAP and Non-GAAP Financial Information
Use of GAAP and Non-GAAP Financial Information We use non-GAAP measures of operating margin, operating income, net income, results of operations, and earnings per share, which are adjusted from results based on GAAP and exclude certain expenses, gains and losses. We also provide the non-GAAP metrics
Slide 30: Explanation of Non-GAAP Measures and Other Items
Explanation of Non-GAAP Measures and Other Items Bookings: Bookings are defined as customer orders received that are expected to generate net revenues in the future. We present the operational metric of bookings because it reflects customers' demand for our products and services and to assist reader
Slide 31: Thank you
Thank you Web: Investor.GenDigital.com Email: IR@GenDigital.com Copyright © 2024 Gen Digital Inc. All rights reserved. 31