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01/11 16:20
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Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
The earnings call highlights several positive factors: raised annual revenue guidance, strong customer base growth, and strategic investments in AI and platform development. The Q&A section reveals optimism in revenue synergies and cross-sell opportunities, despite some unclear management responses on seasonality and macro impacts. The company's focus on capital efficiency and shareholder returns, along with a balanced capital allocation strategy, further support a positive outlook. The combination of these factors suggests a likely positive stock price movement in the short term.
Revenue $1.2 billion, up 25% year-over-year. Growth driven by strong performance in consumer fintech business MoneyLion (up 50%) and broad-based growth across Norton, Avast, LifeLock, and MoneyLion brands.
Non-GAAP Operating Margin Above 50%, with Cyber Safety segment at 61% and Trust-Based Solutions at 30%. Maintained through disciplined growth investments in AI, data, and platform architecture.
Non-GAAP EPS $0.62, up 15% year-over-year. Growth attributed to disciplined investments and operational efficiency.
Cyber Safety Segment Bookings Up 5% year-over-year. Growth supported by expanded scam protection features and AI assistant, driving strong Norton 360 membership sales.
Trust-Based Solutions Revenue Up over 25% on a pro forma basis. Growth driven by LifeLock's stable customer base and MoneyLion's strong gains in active users and product consumption.
Operating Income $623 million, translating to 51% operating margin. Achieved through disciplined resource allocation and scaling efficiency with AI.
Net Income $387 million, with diluted EPS of $0.62, up 15% year-over-year. Reflects strong operational performance and cost management.
Customer Base Expanded to over 77 million customers, up approximately 1 million sequentially. Growth across segments and channels.
Free Cash Flow $512 million year-to-date. Demonstrates capital efficiency of the business model.
Norton Genie Pro and Avast Scam Guardian: Expanded scam and deepfake protection to combat AI-based scams, with strong early adoption in over 40 languages.
Norton 360 and Avast One: Higher engagement and membership growth due to integrated innovations in the cyber safety suite.
Norton VPN: Improvements led to double-digit growth in identity and privacy solutions.
Norton Money: Early launch of a unified platform combining credit monitoring, identity protection, financial insights, and a curated marketplace.
AI-driven customer renewal model: Introduced to enhance customer retention and satisfaction.
MoneyLion: Consumer fintech business grew 50%, contributing to overall revenue growth.
Employee benefits channel: Double-digit growth driven by expanded value through Norton 360.
LifeLock credit card marketplace: Embedded a robust credit card marketplace for LifeLock customers, enhancing financial wellness offerings.
AI in customer support: Automated 55% of text-based chat and 40% of voice interactions, achieving over 20% cost efficiency.
AI in R&D: Applied across the product development lifecycle, boosting product velocity and innovation.
AI in marketing: Enabled an agile, data-informed marketing organization, enhancing productivity and creative production.
Integration of MoneyLion: Achieved cost synergies ahead of plan and unlocked revenue synergies by unifying data systems.
AI-powered platform: Developing a platform uniting security, privacy, identity, and financial wellness solutions.
Expansion of Gen ecosystem: Rolled out early access financial wellness features across brands like LifeLock and Norton.
Evolving Cyber Threat Landscape: Consumers face increasingly sophisticated cyber threats such as AI-powered phishing, deepfakes, and identity theft driven by large-scale data breaches. These threats are harder to detect and pose significant financial risks.
Financial Vulnerability of Consumers: Two-thirds of Americans live paycheck to paycheck, making them highly susceptible to financial disruption from identity theft, fraudulent charges, or scams.
Integration and Synergy Risks: The integration of MoneyLion, while progressing well, carries inherent risks of execution and achieving planned cost and revenue synergies.
AI-Driven Innovation Challenges: Heavy reliance on AI for product development, customer support, and marketing introduces risks related to technology failures, data security, and customer trust.
Economic and Currency Volatility: The company’s guidance assumes stable FX rates, but significant fluctuations in currency markets could impact financial performance.
Regulatory and Compliance Risks: Operating in financial and cybersecurity sectors exposes the company to stringent regulatory requirements and potential compliance challenges.
Customer Retention and Engagement: Maintaining high customer retention and engagement is critical, especially as the company expands its product offerings and integrates new features.
Supply Chain and Operational Efficiency: Operational risks include maintaining cost efficiency while scaling AI-driven solutions and managing global operations.
Annual Revenue Guidance: The company has raised its full-year revenue guidance to a range of $4.92 billion to $4.97 billion, up from the prior range of $4.8 billion to $4.9 billion. This represents a year-over-year growth of 25% to 26%.
Non-GAAP EPS Guidance: The company expects non-GAAP EPS for fiscal year 2026 to be in the range of $2.51 to $2.56, reflecting a 12% to 15% annual EPS growth.
Q3 Revenue Guidance: Non-GAAP revenue for Q3 is expected to be in the range of $1.22 billion to $1.24 billion.
Q3 EPS Guidance: Non-GAAP EPS for Q3 is projected to be in the range of $0.62 to $0.64, representing 12% to 15% growth year-over-year.
Pro Forma Growth: The guidance assumes high single-digit pro forma growth for the fiscal year.
Currency Assumptions: The guidance assumes current FX rates as of Q2, with potential for fluctuations due to currency market volatility.
Quarterly Dividend: The Board of Directors approved a regular quarterly cash dividend of $0.125 per common share to be paid on December 10, 2025, for all shareholders of record as of the close of business on November 17, 2025.
Dividend Payment: $77 million was paid to shareholders in the form of a regular quarterly dividend of $0.125 per common share.
Share Buyback: No additional capacity for share buyback during the open period due to higher use of cash in Q2.
The earnings call highlights several positive factors: raised annual revenue guidance, strong customer base growth, and strategic investments in AI and platform development. The Q&A section reveals optimism in revenue synergies and cross-sell opportunities, despite some unclear management responses on seasonality and macro impacts. The company's focus on capital efficiency and shareholder returns, along with a balanced capital allocation strategy, further support a positive outlook. The combination of these factors suggests a likely positive stock price movement in the short term.
The earnings call reflects strong financial performance with record bookings, impressive revenue growth, and operational efficiency, particularly from the MoneyLion acquisition. The guidance is optimistic, with double-digit EPS growth expected. The Q&A section highlights positive trends in MoneyLion's growth and cross-sell opportunities, although some responses were vague. Overall, the strategic moves and financial metrics indicate a positive outlook, likely leading to a stock price increase in the short term.
The earnings call reflects a positive outlook with strong financial performance, including 4% revenue growth and a 15% EPS increase. The acquisition of MoneyLion and strategic expansions in cyber safety and identity offerings contribute to optimism. Although there are integration risks and macroeconomic concerns, the company's resilience and strong cash flow provide stability. The Q&A highlights confidence in durable demand and strategic market approaches. The shareholder return plan, with substantial dividends and share repurchases, further bolsters sentiment. Overall, the comprehensive growth and strategic initiatives suggest a positive stock price movement.
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