Gen Digital Q1 Earnings Beat Estimates, Revenues Increase Y/Y

The quarter reflected continued momentum across Gen Digital’s Cyber Safety and Trust-Based Solutions businesses, supported by strong demand for cybersecurity, identity protection and financial wellness offerings. Paid customers reached 81 million, up by 5 million from the year-ago period.

GEN Delivers Another Quarter of Double-Digit Growth

Gen Digital continued its strong execution in the fiscal first quarter, delivering its fifth consecutive quarter of double-digit bookings growth. Bookings increased 11% year over year to $1.284 billion, reflecting broad-based demand across both operating segments. Management noted that revenues exceeded the high end of its guidance range, highlighting continued customer engagement and product momentum.

The company also emphasized that both Cyber Safety and Trust-Based Solutions achieved their respective growth and profitability targets during the quarter, underscoring the strength of Gen Digital’s integrated platform strategy.

Trust-Based Solutions Continue to Fuel Growth

Trust-Based Solutions remained Gen Digital’s fastest-growing business during the quarter. Segment revenues increased 24% year over year, while bookings grew 25%, supported by strong performance across Identity Protection, Personal Financial Management and Engine Marketplace offerings.

Management highlighted encouraging traction from its redesigned LifeLock platform, which is generating higher sales conversions while maintaining customer retention near 90%. Personal Financial Management also delivered better-than-expected growth, driven by record Instacash originations and continued optimization of underwriting performance. The recently launched MoneyLion One membership further expands the integration between identity protection and financial wellness services, deepening customer engagement.

Cyber Safety Business Remains a Stable Profit Engine

Gen Digital’s Cyber Safety segment continued to provide stable, profitable growth. Segment bookings and revenues each increased 4% year over year, reflecting sustained demand for premium cybersecurity subscriptions and higher-tier membership offerings.

The company noted continued strength in Norton 360 premium memberships and expanding adoption of Avast One memberships. Cross-sell and upsell activity within the Norton installed base remained strong, while Cyber Safety operating margin held at 61%, demonstrating continued operating discipline despite ongoing investments in artificial intelligence and new products.

GEN Maintains Strong Profitability

Gen Digital generated non-GAAP operating income of $668 million during the first quarter, up 9% year over year. The company maintained a 50% non-GAAP operating margin, balancing continued investment in innovation with disciplined expense management.

Management stated that efficiency improvements, operating leverage and disciplined capital allocation continued to support earnings growth while allowing the company to invest in strategic initiatives across its platform.

Gen Digital's Balance Sheet and Cash Flow

As of July 3, 2026, Gen Digital had cash, cash equivalents and restricted cash of $564 million, up from $411 million at the end of the previous quarter. Long-term debt declined to $7.98 billion from $8.02 billion sequentially.

Operating cash flow totaled $434 million, while free cash flow reached $430 million during the quarter. Capital returns remained robust, with the company paying $81 million in dividends, repurchasing $100 million of common stock and repaying $45 million of debt. Gen Digital also declared a quarterly cash dividend of 12.5 cents per share, payable on Sept. 9, 2026, to shareholders of record as of Aug. 17, 2026.

GEN Raises FY27 Outlook

Encouraged by its strong first-quarter performance, Gen Digital raised its full-year fiscal 2027 guidance.

For fiscal 2027, the company now expects non-GAAP revenues between $5.375 billion and $5.475 billion compared with its previous outlook of $5.325-$5.425 billion. It now projects non-GAAP earnings of $2.87-$2.97 per share, up from the prior guidance of $2.85-$2.95.

For the second quarter of fiscal 2027, Gen expects non-GAAP revenues in the range of $1.325-$1.350 billion and non-GAAP earnings of 71-73 cents per share. Management said the guidance reflects continued momentum across both operating segments and confidence in the durability of the company’s integrated Cyber Safety and Trust-Based Solutions platform.

Zacks Rank and Stocks to Consider

At present, GEN carries Zacks Rank #3 (Hold).

Some better-ranked stocks in the broader Zacks Computer and Technology sector are Lumentum LITE, Applied Materials AMAT and Analog Devices ADI, each carrying a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Shares of Lumentum have surged 123% year to date. The Zacks Consensus Estimate for LITE’s fiscal 2026 earnings is pegged at $8.19 per share, up by 5 cents over the past 30 days, indicating an increase of 297.6% year over year.

Shares of Applied Materials have jumped 107.9% year to date. The Zacks Consensus Estimate for AMAT’s fiscal 2026 earnings is pegged at $12.14 per share, up by 3 cents over the past 30 days, indicating a rise of 28.9% year over year.

Analog Devices shares have surged 39.2% year to date. The Zacks Consensus Estimate for ADI’s fiscal 2026 earnings is pegged at $12.42 per share, up by 10 cents over the past 30 days, indicating an increase of 33.9% year over year.

Zacks' Research Chief Names "Stock Most Likely to Double"

Our team of experts has just released the 5 stocks with the greatest probability of gaining +100% or more in the coming months. Of those 5, Director of Research Sheraz Mian highlights the one stock set to climb highest.

This top pick is a little-known satellite-based communications firm. Space is projected to become a trillion dollar industry, and this company's customer base is growing fast. Analysts have forecasted a major revenue breakout in 2025. Of course, all our elite picks aren't winners but this one could far surpass earlier Zacks' Stocks Set to Double like Hims & Hers Health, which shot up +209%.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

This article originally published on Zacks Investment Research (zacks.com).

Zacks Investment Research