The paragraph is an introduction to Gen's fourth quarter and full fiscal year 2025 earnings call. Tamiya, the conference operator, begins the call and hands over to Jason Starr, Head of Investor Relations. Jason introduces key participants and provides a reminder about the availability of the call's replay, slides, and press release on the company's Investor Relations website. He notes that financial metrics discussed are non-GAAP, with reconciliations available online. Furthermore, the call may contain forward-looking statements, which come with risks and uncertainties that could lead to different outcomes than currently expected, and the company disclaims any obligation to update these statements based on new information or future events.

In the paragraph, Vincent Pilette discusses Gen's strong fiscal year 2025 performance, highlighting transformative growth and strategic execution in delivering cyber safety solutions. Gen achieved a significant milestone with $4 billion in total bookings, a 4% increase from the previous year, and revenue exceeding annual guidance. The growth was driven by core offerings in cyber safety, security, privacy, and identity theft protection. The company recorded a non-GAAP operating margin of 58.4% and non-GAAP EPS of $2.22, both at record highs, due to effective cost control and operational efficiencies, including the use of AI in their product portfolio. Additionally, the paragraph notes mid-single-digit top-line growth for Q4 and consistent growth across 23 consecutive quarters.

The paragraph highlights the company's strong financial performance and strategic progress, including significant cash flow generation, reduced net leverage, and increased customer count. It emphasizes the ongoing need for their solutions due to the evolving cyber threat landscape, particularly AI-powered threats and ransomware attacks. The company is committed to innovation and expanding its reach to address the challenges posed by sophisticated scams and breaches, which are increasingly targeting consumers and small businesses.

The paragraph highlights the company's advancements in AI-driven anti-scam technologies, emphasizing the launch of Genie Scam Protection to enhance threat detection across various channels, including SMS, emails, and phone calls. Northern Genie has significantly improved scam detection efficacy and serves as a proactive AI cyber safety companion. With enhancements to the Northern 360 platform, including the addition of Genie, a refreshed user interface, and migration to GenStack, the company has improved user experience and innovation capabilities. The transition for Northern is nearly complete, and the focus is shifting to enhancing services for Avast customers. Additionally, there's a noted growth in demand for Identity Theft Protection products, such as LifeLock, spurred by increased consumer awareness following large data breaches.

The paragraph highlights the company's efforts to enhance consumer protection and expand their market presence. They offer real-time data protection alerts, credit insights, financial alerts, and access to financial products based on digital reputation, and have invested in data security technologies. Their high ratings on Trustpilot and the App Store reflect customer satisfaction. The company's geographic and market reach has expanded significantly, with their Privacy and Identity products entering 15 new markets and a strong presence in Latin America. Their customer base grew by 1.3 million, reaching over 40 million direct paid customers and over 65 million direct and indirect paid customers. Nearly 45% of these customers have comprehensive cyber safety memberships. With a strong cyber safety platform, the company is now developing additional trust-based products beyond their core identity protection solutions.

The acquisition of MoneyLion by Gen, prompted by customer demand for deeper financial insights, expands Gen's offerings into the financial wellness market. This acquisition enhances Gen's capabilities in personal financial management, banking, and investing, while offering a marketplace for various financial services. Gen aims to integrate MoneyLion to boost growth, improve operational margins, and minimize balance sheet risk through a structured business model. New features combining MoneyLion's capabilities will be launched in LifeLock and Northern Financial Wellness products by fiscal year 2026.

The company is restructuring into two main segments to enhance growth post-acquisition. The first segment, the cyber safety platform, focuses on providing advanced security and privacy technology, aiming for mid-single digit growth and a 60% non-GAAP operating margin. This includes the expansion of Genie, their AI-powered anti-scam solution, and the new GenStack for improving customer value. The second segment, trust-based solutions, targets high single-digit revenue growth and a 30% non-GAAP operating margin, focusing on identity and financial wellness. Efforts include expanding their customer base through risk awareness campaigns and strategic partnerships, particularly in fiscal year 2026.

The paragraph discusses Gen's plans for growth and expansion, highlighting the acquisition of MoneyLion and the integration of its financial marketplace into Gen's U.S. customer base. The company aims to enhance its financial wellness offerings, form partnerships with credit bureaus and financial institutions, and launch a financial wellness company. Gen expects to achieve 6% to 8% pro forma growth in fiscal year 2026, with projected revenue between $4.7 billion and $4.8 billion. The focus remains on delivering value to customers, employees, and shareholders while leading in digital safety and trust. The speaker expresses excitement about the future and introduces Natalie Derse, who will discuss the company's financial outlook.

Over the past five years, the company has made significant progress and recently acquired MoneyLion to enhance its financial wellness capabilities. The fiscal year 2025 was a defining period with ongoing growth, highlighted by $4 billion in total bookings and $3.935 billion in revenue, both up 4%. The company also achieved an operating income of $2.3 billion with a 58.4% margin and an EPS of $2.22, marking a 14% increase year-over-year. The fourth quarter was a record, marking the 23rd consecutive quarter of growth with $1.08 billion in bookings and $1.01 billion in revenue, both up 5%, demonstrating strong growth across products and markets.

The paragraph discusses the company's financial performance, highlighting a 4% increase in direct revenue to $877 million, primarily driven by new customer acquisition through international growth markets and mobile app stores. The customer base rose for the seventh consecutive quarter to $40.4 million, with retention rates improving to 78%. Customer relationships are strengthened through enhanced Norton 360 memberships and financial wellness features, leading to increased customer lifetime value. Monthly direct ARPU grew to $7.27, despite some negative FX impacts, with mid-single-digit growth attributed to increased cross-selling and higher Norton 360 membership adoption. About 25% of Norton customers now use more than one product, aiming for 30% penetration.

The paragraph discusses the company's strategic positioning in the growing cyber protection market, highlighting the increasing adoption of their comprehensive membership offerings by 45% of their direct customer base. Their mobile sector is seeing double-digit growth in ARPU due to higher adoption of the Norton 360 membership, supported by new in-product messaging capabilities that enhance customer engagement and sales conversion. The company has a proven approach to increasing customer lifetime value through various sales strategies. Additionally, partner revenue grew by 15% in Q4, driven by a 75% increase in new sales during open enrollment in the employee benefits channel. More employers are now directly paying for identity protection services, leading to higher conversion rates, and telco partnerships are helping expand their identity offerings internationally.

The paragraph highlights the company's Q4 financial performance, noting a revenue decrease in legacy business lines and strong operating income of $590 million, with a 58.4% margin. Net income rose by 10% to $366 million, and diluted EPS increased by 12%. The company incurred $129 million in interest expenses and maintained a stable non-GAAP tax rate of 22%. Share repurchases reduced the share count by 13 million year-over-year. The company reported a Q4 cash flow of $473 million and a free cash flow of $470 million, with a net leverage of 3.2x. It ended the quarter with over $1 billion in cash and $2.5 billion in liquidity. Additionally, it issued $950 million in unsecured notes to refinance debt, paying off a $1.1 billion note. The company's investments focus on product and technology, marketing, and expanding its international presence, especially in identity and privacy sectors.

Following the fiscal year-end, the company secured $750 million in TLB at a rate of SOFR plus 175 basis points, due in 2032, and spent $1 billion on acquiring MoneyLion. They have no major debt maturing until 2028. Details on their capital structure can be found in the earnings presentation appendix. They distributed $77 million via quarterly dividends and approved another for Q1 fiscal 2026. Since fiscal 2023, $4.6 billion has been deployed across share repurchases, debt reduction, and dividends. Their buyback program has $2.7 billion left, with no expiration. The goal is to reduce net leverage to under 3x EBITDA by the end of 2027. With the MoneyLion acquisition, the company aims to expand into financial wellness, enhancing revenue growth and maintaining operational discipline. Gratitude is expressed to the team for their efforts, and there's anticipation for future business operations and reporting.

The paragraph outlines the company's strategy and financial outlook, emphasizing a dual focus on two business segments: cyber safety platform and trust-based solutions. The company aims for accelerated and profitable growth, measured through bookings and non-GAAP operating margins. These metrics evaluate customer acquisition, renewals, and overall efficiency. The company plans to report these metrics quarterly. Despite economic uncertainties, they expect strong financial performance in fiscal 2026, projecting revenue of $4.7 to $4.8 billion and non-GAAP EPS growth of 12% to 15%.

The paragraph provides financial guidance for Q1 and fiscal year 2025 for the company, Gen. It anticipates non-GAAP revenue of $1.18 billion to $1.21 billion, representing a 5% to 7% year-over-year growth, and non-GAAP EPS of $0.59 to $0.61, reflecting a 12% to 15% growth in constant currency. The fiscal year includes an extra week in Q1, affecting revenue figures, and considers current FX rates amidst financial market volatility. The company aims for robust free cash flow to support share repurchases and debt reduction, driving shareholder returns. The paragraph ends by thanking the audience and transitioning to a Q&A session, with the first question from Andrew Nowinski of Wells Fargo regarding the business's segmentation strategy.

The paragraph discusses MoneyLion's growth prospects and guidance for fiscal 2026. Vincent Pilette explains that the cyber safety platform's growth is expected to be in the mid-single-digit range, and that MoneyLion grew by around 24-25% last year. The focus will be on cross-selling into the existing customer base and transitioning MoneyLion's business model from transactional to subscription-based. When combined, these factors contribute to a projected growth of 6-8% pro forma. Additionally, Andrew Nowinski inquires about capital allocation, particularly concerning share purchases, dividends, and reducing net leverage. Natalie Derse responds that recent acquisition activities have paused share purchases.

The paragraph discusses the company's balanced approach to capital allocation, focusing on accelerated debt paydown and opportunistic share buybacks, supported by high cash flow generation. It references a Q2 period of elevated tax payments but emphasizes disciplined cash flow management moving forward. The conversation then shifts to Vincent Pilette addressing Saket Kalia's question about the acquisition of MoneyLion, highlighting its potential to expand the customer network for cross-selling opportunities. Vincent reiterates the company's cybersecurity platform strategy, focusing on providing a safe digital environment where consumers can protect and control their data, while exploring further opportunities within this secure space.

The paragraph discusses a strategic focus on integrating cyber safety and financial wellness to enhance customer offerings. Initially focusing on protecting identity and digital reputation, the strategy aims to maximize financial potential by leveraging MoneyLion's architecture and features for over 65 million customers. The goal is to enhance financial decisions and improve MoneyLion's offerings by combining premium transactional revenue with strong subscription and customer retention strategies. In the long term, the plan includes offering a comprehensive life cycle service covering credit building, protection, and financial management, positioning the brand as a trusted partner throughout customers' digital financial journeys.

In the paragraph, Natalie Derse discusses the potential benefits of integrating MoneyLion's customer base and financial wellness tools with their existing business model. By leveraging MoneyLion's proven AI recommendation engine and their financial wellness platform, they aim to improve customer acquisition costs and explore new market opportunities. The integration is expected to enhance customer engagement, broaden their product offerings, and increase efficiency in investment and growth strategies. With a data-driven approach, they anticipate being able to reach customers earlier in their financial journey and create synergies that will drive growth effectively.

In the given paragraph, Tomer Zilberman from Bank of America asks about the resilience of the business amid macroeconomic uncertainties, particularly concerning demand and the impact of tariff changes. Vincent Pilette responds, emphasizing the business's resilience due to high subscription and auto-renewal rates, which provide stability even during economic challenges like the 2008 financial crisis and COVID-19 period. He notes that the demand for cyber safety products remains strong and less sensitive to macroeconomic shifts, and highlights the strong performance in March and consistent trends into April.

The paragraph discusses the company's positive outlook on the addition of MoneyLion, noting its potential to enhance offerings for current customers seeking more personal financial management (PFM) and marketplace features. It highlights the importance of making sound financial decisions in challenging economic environments, suggesting MoneyLion’s alignment with such needs. In response to potential market downturns, the company emphasizes its diversification across geography, products, and marketing channels, which positions it to seize market opportunities. The company maintains a strong focus on prioritizing customer needs, tailoring its products and services to assist customers in navigating economic challenges.

The paragraph is from a discussion about a company's performance and strategic outlook. The company has a diverse range of product solutions to help customers. Roger Boyd from UBS congratulates them on a strong quarter and acquisition, noting subscriber growth. He inquires about the impact of Google AI on their SEO lead generation strategy, particularly regarding click-through rates and customer acquisition costs. Vincent Pilette responds that while AI is changing the landscape, the company has a diversified approach to marketing and hasn't seen immediate changes. They see AI as potentially beneficial. Roger then asks about indirect revenue growth, particularly concerning employee benefits, and how it should be considered in their fiscal 2026 outlook.

The paragraph discusses the growth and development of the company's indirect revenue channels, which make up about 10% of the overall revenue and grew by 15% in the quarter. This growth is largely attributed to employee benefits and telco sectors. The company attributes their success in employee benefits to multi-year investments in building effective sales pipelines through direct sales and brokers. In the telco sector, strong partnerships and increased demand have fueled growth. A new sales leader for the partner channels, with substantial market expertise, is expected to enhance the indirect channel further. Finally, the paragraph briefly references previous goals set in fiscal year 2023.

The paragraph discusses the company's future growth and reporting strategy. They aim for a sustainable high single-digit growth rate but are open to double-digit growth. Dan Bergstrom from RBC asks about the KPIs for new segments, particularly with the acquisition of MoneyLion. Vincent Pilette explains that their business strategy focuses on aligning results with consumer needs, organizing around identity, reputation, and financial wellness. They plan to report on these segments to highlight different dynamics and opportunities, with additional KPIs being refined for better understanding.

The speaker indicates that more detailed information will be shared at the company's Q1 results presentation in late July or early August, assuring that all investors will be informed about the business outlook and key performance indicators (KPIs). Dan Bergstrom asks about the stronger U.S. growth, and Natalie Derse responds that the growth is broad-based across various product lines and global markets, noting a mid-single-digit increase in the U.S. This growth is attributed to heightened LifeLock awareness following an NPD breach, the expansion of identity offerings, and increased membership adoption. Jason Starr concludes the conference call, thanking participants for joining.

This summary was generated with AI and may contain some inaccuracies.