Gen Digital 10-Q 2025-07-04

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-Q

(Mark One)

☑			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the Quarterly Period Ended July 4, 2025

or

☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the Transition Period from to

Commission File Number 000-17781

Gen Digital Inc.

(Exact name of the registrant as specified in its charter)

Delaware															77-0181864
(State or other jurisdiction of incorporation or organization)															(I.R.S. employer Identification no.)
60 E. Rio Salado Parkway,			Suite 1000,			Tempe,			Arizona						85281
(Address of principal executive offices)															(Zip code)

Registrant’s telephone number, including area code:

(650) 527-8000

Former name or former address, if changed since last report:

Not applicable

---

Securities registered pursuant to Section 12(b) of the Act:

Title of each class						Trading symbol(s)			Name of each exchange on which registered
Common Stock,			par value $0.01 per share			GEN			The Nasdaq Stock Market LLC
Contingent Value Rights						GENVR			The Nasdaq Stock Market LLC

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes þ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes þ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer			þ						Accelerated filer			☐						Non-accelerated filer			☐						Smaller reporting company			☐
																											Emerging growth company			☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No þ

The number of shares of Gen common stock, $0.01 par value per share, outstanding as of August 8, 2025 was 615,869,113 shares.

GEN DIGITAL INC.

FORM 10-Q

Quarterly Period Ended July 4, 2025

TABLE OF CONTENTS

						Page
PART I. FINANCIAL INFORMATION
Item 1.			Financial Statements (Unaudited)			3
			Condensed Consolidated Balance Sheets			3
			Condensed Consolidated Statements of Operations			4
			Condensed Consolidated Statements of Comprehensive Income (Loss)			5
			Condensed Consolidated Statements of Stockholders’ Equity (Deficit)			6
			Condensed Consolidated Statements of Cash Flows			7
			Notes to Condensed Consolidated Financial Statements			8
Item 2.			Management's Discussion and Analysis of Financial Condition and Results of Operations			26
Item 3.			Quantitative and Qualitative Disclosures About Market Risk			33
Item 4.			Controls and Procedures			33
PART II. OTHER INFORMATION
Item 1.			Legal Proceedings			35
Item 1A.			Risk Factors			35
Item 2.			Unregistered Sales of Equity Securities and Use of Proceeds			57
Item 5.			Other Information			57
Item 6.			Exhibits			58
Signatures						59

“Gen,” “we,” “us,” “our,” and “the Company” refer to Gen Digital Inc. and all of its subsidiaries. Gen, Norton, Avast, LifeLock, MoneyLion, Avira, AVG, Reputation Defender, CCleaner and all related trademarks, service marks and trade names are trademarks or registered trademarks of Gen or other respective owners that have granted Gen the right to use such marks. Other names may be trademarks of their respective owners.

PART I. FINANCIAL INFORMATION

GEN DIGITAL INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited, in millions, except par value per share amounts)

			July 4, 2025						March 28, 2025
ASSETS
Current assets:
Cash, cash equivalents and restricted cash			$	828					$	1,006
Accounts receivable, net, including amounts held by a VIE of $93 million as of July 4, 2025			314						171
Other current assets			249						245
Assets held for sale			37						22
Total current assets			1,428						1,444
Property and equipment, net			64						60
Intangible assets, net			2,499						2,267
Goodwill			10,817						10,237
Deferred income tax assets			1,253						1,218
Other long-term assets			299						269
Total assets			$	16,360					$	15,495
LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)
Current liabilities:
Accounts payable			$	90					$	94
Accrued compensation and benefits			85						105
Current portion of long-term debt, including amounts held by a VIE of $49 million as of July 4, 2025			288						291
Contract liabilities			1,783						1,846
Other current liabilities			612						515
Total current liabilities			2,858						2,851
Long-term debt			8,575						7,968
Long-term contract liabilities			90						77
Deferred income tax liabilities			234						222
Long-term income taxes payable			1,509						1,420
Other long-term liabilities			729						688
Total liabilities			13,995						13,226
Commitments and contingencies (Note 18)
Stockholders’ equity (deficit):
Common stock and additional paid-in capital, $0.01 par value: 3,000 shares authorized; 616 and 617 shares issued and outstanding as of July 4, 2025 and March 28, 2025, respectively			2,179						2,066
Accumulated other comprehensive income (loss)			26						(33)
Retained earnings (accumulated deficit)			160						236
Total stockholders’ equity (deficit)			2,365						2,269
Total liabilities and stockholders’ equity (deficit)			$	16,360					$	15,495

The accompanying notes are an integral part of these Condensed Consolidated Financial Statements.

GEN DIGITAL INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited, in millions, except per share amounts)

			Three Months Ended
			July 4, 2025						June 28, 2024
Net revenues			$	1,257					$	965
Cost of revenues			267						190
Gross profit			990						775
Operating expenses:
Sales and marketing			297						183
Research and development			109						81
General and administrative			74						52
Amortization of intangible assets			54						43
Restructuring and other costs			10						(1)
Total operating expenses			544						358
Operating income (loss)			446						417
Interest expense			(156)						(153)
Other income (expense), net			10						12
Income (loss) before income taxes			300						276
Income tax expense (benefit)			165						95
Net income (loss)			$	135					$	181
Net income (loss) per share - basic			$	0.22					$	0.29
Net income (loss) per share - diluted			$	0.22					$	0.29
Weighted-average shares outstanding:
Basic			617						621
Diluted			624						627

The accompanying notes are an integral part of these Condensed Consolidated Financial Statements.

GEN DIGITAL INC.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHEN****SIVE INCOME (LOSS)

(Unaudited, in millions)

			Three Months Ended
			July 4, 2025						June 28, 2024
Net income (loss)			$	135					$	181
Other comprehensive income (loss), net of taxes:
Foreign currency translation gain (loss)			59						(5)
Other comprehensive income (loss), net of taxes			59						(5)
Comprehensive income (loss)			$	194					$	176

The accompanying notes are an integral part of these Condensed Consolidated Financial Statements.

GEN DIGITAL INC.

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (DEFICIT)

(Unaudited, in millions, except share amounts)

| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

Showing the first 8K of 113K characters. Open the full section

Forward-looking statements and factors that may affect future results

The discussion below contains forward-looking statements, which are subject to safe harbors under the Securities Act of 1933, as amended (the Securities Act) and the Exchange Act of 1934, as amended (the Exchange Act). Forward-looking statements include statements that represent our expectations or beliefs concerning future events, including, without limitation, references to our ability to utilize our deferred tax assets, as well as statements including words such as “expects,” “plans,” “anticipates,” “believes,” “estimates,” “predicts,” “goal,” “intent,” “momentum,” “projects,” “forecast,” “outlook,” “strategy,” “future,” “opportunity,” “plan,” “may,” “should,” “will,” “would,” “will be,” and similar expressions. In addition, projections of our future financial performance; beliefs regarding our business and strategies; anticipated growth and trends in our businesses and in our industries; the consummation of or anticipated impacts of acquisitions (including our ability to achieve synergies from acquisitions, including, but not limited to, Avast and MoneyLion), expectations about certain markets, divestitures, restructurings, stock repurchases, financings, debt repayments, investment activities and our liquidity; the outcome or impact of pending litigation, claims or disputes; risks associated with third party providers; evolving regulations and increased scrutiny from regulators; our intent to pay quarterly cash dividends in the future; plans for and anticipated benefits of our products and solutions; anticipated tax rates, benefits and expenses; the global macroeconomic outlook, including but not limited to, the impact of inflation, fluctuations in foreign currency exchange rates, changes in interest rates, and the impact of new trade policy, including the implementation of global tariffs; retaliatory trade regulations and policies; economic disruptions caused by the potential impact of volatility and conflict in the geopolitical and economic environment; general uncertainty in the financial and capital markets; and other global macroeconomic factors on our operations and financial performance; and other characterizations of future events or circumstances are forward-looking statements. These statements are only predictions, based on our current expectations about future events and may not prove to be accurate. We do not undertake any obligation to update these forward-looking statements to reflect events occurring or circumstances arising after the date of this report. These forward-looking statements involve risks and uncertainties, and our actual results, performance, or achievements could differ materially from those expressed or implied by the forward-looking statements on the basis of several factors, including economic recessions, inflationary pressures and those other factors that we discuss in Part II Item 1A. Risk Factors, of this Quarterly Report on Form 10-Q and Item 1A. Risk Factors of our Annual Report on Form 10-K for the fiscal year ended March 28, 2025. We encourage you to read those sections carefully. There may also be other factors that have not been anticipated or that are not described in our periodic filings with the Securities and Exchange Commission (SEC), generally because we did not believe them to be significant at the time, which could cause actual results to differ materially from our projections and expectations. All forward-looking statements should be evaluated with the understanding of their inherent uncertainty.

OVERVIEW

Gen Digital Inc. is a global company powering Digital Freedom through its family of trusted consumer brands including Norton, Avast, LifeLock, MoneyLion, and more. Our portfolio spans Cyber Safety Platform and Trust-Based Solutions, delivering intuitive, AI-powered services that enable people to confidently grow, manage, and protect their digital and financial lives. From cybersecurity and online privacy to identity protection and financial empowerment, our products and services are designed to meet the real-world needs of today’s digital generation. Through a foundation of trust and innovation, our brands deliver the protection and confidence people need to thrive in a digital-first world.

Our Cyber Safety Platform delivers technology solutions and superior threat protection to help people navigate the digital world, securely, privately and with confidence. Our Trust-Based Solutions provide innovative solutions and insights that empower consumers to manage their identity, reputation and finances confidently to achieve freedom.

Fiscal calendar

We have a 52/53-week fiscal year ending on the Friday closest to March 31. The three months ended July 4, 2025 consisted of 14 weeks, whereas the three months ended June 28, 2024 consisted of 13 weeks. Our 2026 fiscal year consists of 53 weeks and ends on April 3, 2026.

Key financial metrics

The following tables provide our key financial metrics for the periods presented:

			Three Months Ended
(In millions, except for per share amounts)			July 4, 2025						June 28, 2024
Net revenues			$	1,257					$	965
Operating income (loss)			$	446					$	417
Net income (loss)			$	135					$	181
Net income (loss) per share - diluted			$	0.22					$	0.29

			As Of
(In millions)			July 4, 2025						March 28, 2025
Cash, cash equivalents and restricted cash			$	828					$	1,006
Contract liabilities			$	1,873					$	1,923

Below are our financial highlights for the first quarter of fiscal 2026, compared to the corresponding period in the prior year:

• Net revenues increased $292 million, primarily due to higher sales in both our Cyber Safety Platform products and Trust-Based Solutions, including an increase of $168 million in Trust-Based Solutions due to the acquisition of MoneyLion, and an increase of $87 million due to the favorable impact from the additional week in the first quarter of fiscal 2026.

• Operating income increased $29 million, primarily due to increased net revenues, offset by an increase in cost of revenues and operating expenses.

• Net income decreased $46 million and net income per share decreased $0.07, primarily due to an increase in income tax expense offset by an increase in operating income as discussed above.

Acquisition of MoneyLion

On April 17, 2025, we completed our acquisition of MoneyLion Inc. (MoneyLion). MoneyLion extends our identity solutions into offering comprehensive financial wellness through MoneyLion’s full-featured personal finance platform that includes credit building and financial management services. See Note 4 of the Notes to the Condensed Consolidated Financial Statements for further information about the acquisition.

GLOBAL MACROECONOMIC CONDITIONS

As a global company, our results of operations and cash flows may be influenced by global macroeconomic conditions, including, but not limited to, increased tariffs and an uncertain global trade environment, foreign currency exchange rate fluctuations, the impact of interest rate fluctuations, elevated inflation, ongoing and new geopolitical conflicts, including the impacts of current and future trade regulations, instability in the global banking sector, economic slowdown and recession risks, any of which may be difficult to predict and may persist for an extended period.

Despite challenging global macroeconomic conditions and although we recognize that inflation and broader economic uncertainty can influence customer behavior, we are confident in the long-term overall health of our business, the strength of our product offerings and our ability to continue to execute on our strategy, including bringing award-winning products and services in cybersecurity and offering comprehensive financial wellness to our customers.

We continue to monitor the direct and indirect impacts of these global macroeconomic or other geopolitical factors. If the economic uncertainty continues, we may experience additional negative impacts on customer renewals, customer collections, sales and marketing efforts, customer deployments, product development, or other financial metrics. Additional broader implications of these events on our business, results of operations, and overall financial position still remain uncertain and could result in further adverse impacts to our reported results. For further discussion of the potential impacts of global macroeconomic conditions on our business, please see Part 1, Item III and “Risk Factors” in Part II, Item 1A below.

CRITICAL ACCOUNTING ESTIMATES

The preparation of our Condensed Consolidated Financial Statements and related notes in accordance with generally accepted accounting principles in the U.S. requires us to make estimates, including judgments and assumptions that affect the reported amounts of assets, liabilities, revenue and expenses, and related disclosure of contingent assets and liabilities. We have based our estimates, judgements and assumptions on historical experience and on various other factors we believe to be reasonable under the circumstances. We evaluate our estimates, judgements and assumptions on a regular basis and make changes accordingly. Management believes that the accounting estimates employed and the resulting amounts are reasonable; however, actual results may differ from these estimates. Making estimates, judgments and assumptions about future events is inherently unpredictable and is subject to significant uncertainties, some of which are beyond our control. Should any of these estimates, judgements or assumptions change or prove to have been incorrect, it could have a material impact on our results of operations, financial position and cash flows.

Our critical accounting policies and estimates were disclosed in Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations included in our Annual Report on Form 10-K for the fiscal year ended March 28, 2025 and significant policies adopted as a result of our acquisition of MoneyLion are included in Note 1 on this Form 10-Q. There have

been no other material changes in the matters for which we make critical accounting estimates in the preparation of our Condensed Consolidated Financial Statements during the three months ended July 4, 2025.

RESULTS OF OPERATIONS

The following table sets forth our Condensed Consolidated Statements of Operations data as a percentage of net revenues for the periods indicated:

			Three Months Ended
			July 4, 2025						June 28, 2024
Net revenues			100		%				100		%
Cost of revenues			21						20
Gross profit			79						80
Operating expenses:
Sales and marketing			24						19
Research and development			9						8
General and administrative			6						5
Amortization of intangible assets			4						4
Restructuring and other costs			1						0
Total operating expenses			43						37
Operating income (loss)			35						43
Interest expense			(12)						(16)
Other income (expense), net			1						1
Income (loss) before income taxes			24						29
Income tax expense (benefit)			13						10
Net income (loss)			11		%				19		%

Note: Percentages may not add due to rounding.

Net revenues

			Three Months Ended
(In millions, except for percentages)			July 4, 2025						June 28, 2024						Change in %
Net revenues			$	1,257					$	965					30		%

Three Months Ended July 4, 2025 Compared with Three Months Ended June 28, 2024

Net revenues increased $292 million, due to an $89 million increase in sales of our Cyber Safety Platform products and a $203 million increase in sales of our Trust-Based Solutions, including a $168 million increase in Trust-Based Solutions due to the acquisition of MoneyLion. Net revenues also increased $87 million due to the favorable impact from the additional week in the first quarter of fiscal 2026, impacting both segment financials. Specifically, the additional week contributed $56 million to our Cyber Safety Platform and $31 million to Trust-Based Solutions.

Performance Metrics

We regularly monitor a number of metrics in order to measure our current performance and estimate our future performance. We believe these key operating metrics are useful to investors because management uses these metrics to assess the growth of

our business and the effectiveness of our marketing and operational strategies. Our metrics may be calculated in a manner different than similar metrics used by other companies.

The following table summarizes supplemental key performance metrics:

			Three Months Ended
(In millions)			July 4, 2025						June 28, 2024
Cyber Safety Platform			$	869					$	780
Trust-Based Solutions			388						185
Total net revenues			$	1,257					$	965
Direct revenues			$	1,068					$	852
Partner revenues			189						113
Total net revenues			$	1,257					$	965
Total bookings			$	1,202					$	913
Total paid customers			76.2						66.2

Revenue from Cyber Safety Platform increased $89 million due to growth across our cyber safety membership offerings and the additional week in the first quarter of fiscal 2026. Revenue from Trust Based Solutions increased $203 million, primarily due to the acquisition of MoneyLion, continued growth in our identity point solutions and the additional week in the first quarter of fiscal 2026.

Direct revenue reflects subscriptions sold directly through e-commerce or mobile channels, and revenue generated from financial transactions directly made through Gen properties or marketplaces.

Partner revenue reflects partner-sourced and channel revenue via retailers, employee benefits, telcos, publishers, and strategic partnerships, including revenue generated from products sold through our financial marketplace.

Total 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 readers in analyzing our performance in future periods.

We define total paid customers as active paid users of our products and solutions at the end of the reported period. It also includes individuals with a unique account and at least one paid transaction in the trailing twelve months, whether through our first-party personal finance products, or transacting through our financial marketplace. We exclude users on free trials and those who have not actively transacted in the trailing twelve months.

The methodologies used to measure these metrics require judgment and are subject to change due to improvements or revisions to our methodology. From time to time, we review our metrics and may discover inaccuracies or make adjustments to improve their accuracy, which can result in adjustments to our historical metrics. Our ability to recalculate our historical metrics may be impacted by data limitations or other factors that require us to apply different methodologies for such adjustments. We generally do not intend to update previously disclosed metrics for any such inaccuracies or adjustments that are deemed not material.

Net revenues by geographical region

			Three Months Ended
			July 4, 2025						June 28, 2024
Americas			70		%				66		%
EMEA			21		%				24		%
APJ			9		%				10		%

The Americas include the U.S., Canada and Latin America; EMEA includes Europe, the Middle East and Africa; APJ includes Asia Pacific and Japan.

Percentage of revenue in Americas increased primarily due to our acquisition of MoneyLion during the three months ended July 4, 2025 as compared to the three months ended June 28, 2024.

Cost of revenues

			Three Months Ended
(In millions, except for percentages)			July 4, 2025						June 28, 2024						Change in %
Cost of revenues			$	267					$	190					41		%

Three Months Ended July 4, 2025 Compared with Three Months Ended June 28, 2024

Cost of revenues, including the impact of one additional week, increased $77 million, primarily due to a $50 million increase in marketing affiliate expenses, a $13 million increase in payment processing fees and an $8 million increase in amortization of intangible assets.

Operating expenses

			Three Months Ended
(In millions, except for percentages)			July 4, 2025						June 28, 2024						Change in %
Sales and marketing			$	297					$	183					62		%
Research and development			109						81						35		%
General and administrative			74						52						42		%
Amortization of intangible assets			54						43						26		%
Restructuring and other costs			10						(1)						(1,100)		%
Total operating expenses			$	544					$	358					52		%

Three Months Ended July 4, 2025 Compared with Three Months Ended June 28, 2024

Sales and marketing expense, including the impact of one additional week, increased $114 million, primarily due to a $36 million increase in loss on sale of Instacash Advances, a $34 million increase in marketing expenses, a $21 million increase in headcount costs and a $15 million increase in stock-based compensation expense.

Research and development expense, including the impact of one additional week, increased $28 million, primarily due to a $16 million increase in headcount costs and a $5 million increase in stock-based compensation expense.

General and administrative expense, including the impact of one additional week, increased $22 million, primarily due to a $14 million increase in stock-based compensation expense and a $12 million increase in headcount costs, partially offset by a $10 million decrease in litigation settlement expense.

Amortization of intangible assets increased $11 million, primarily due to our acquisition of MoneyLion.

Restructuring and other costs increased $11 million, primarily due to an increase in severance and termination benefits in connection with the September 2022 and April 2025 Plans. See Note 12 of the Notes to the Condensed Consolidated Financial Statements for details of the fiscal 2026 restructuring activities.

Non-operating income (expense), net

			Three Months Ended
(In millions)			July 4, 2025						June 28, 2024
Interest expense			$	(156)					$	(153)
Interest income			9						8
Foreign exchange gain (loss)			—						4
Gain (loss) on sale of property			(1)						—
Other			2						—
Total non-operating income (expense), net			$	(146)					$	(141)

Three Months Ended July 4, 2025 Compared with Three Months Ended June 28, 2024

Non-operating income (expense), net, remained relatively flat.

Provision for income taxes

			Three Months Ended
(In millions, except for percentages)			July 4, 2025						June 28, 2024
Income (loss) before income taxes			$	300					$	276
Income tax expense (benefit)			$	165					$	95
Effective tax rate			55		%				34		%

Our effective tax rate for the three months ended July 4, 2025 and three months ended June 28, 2024 differs from the federal statutory income tax rate primarily due to state taxes, changes in unrecognized tax benefits and related interest and penalties, foreign exchange impacts, and the U.S. taxation on foreign earnings.

On July 4, 2025, the One Big Beautiful Bill Act (the Act) was enacted into law in the United States. The Act includes various provisions that are applicable to Gen beginning in fiscal year 2026. These provisions include an allowance to accelerate tax deductions of certain capital expenditures, research & experimentation expenditures, and an increase to the annual limitation of tax-deductible interest expenses. As the Act was signed into law on the last day of our first quarter, the impacts are included in our operating results for the three months ended July 4, 2025. Based on our preliminary assessment, the Act is not expected to have a material impact on the Company’s effective tax rate.

The Organization for Economic Cooperation and Development (OECD) and many countries have proposed to reallocate a portion of profits of large multinational enterprises (MNE) with an annual global turnover exceeding €20 billion to markets where

sales arise (Pillar One), as well as enact a global minimum tax rate of at least 15% for MNE with an annual global turnover exceeding €750 million (Pillar Two). On December 12, 2022, the European Union reached an agreement to implement the Pillar Two directive of the OECD’s reform of international taxation at the European Union level. The agreement affirms that all Member States must transpose the Pillar Two directive by December 31, 2023. The rules were therefore applicable for fiscal years starting on or after December 31, 2023. Ireland, Czech Republic, and certain jurisdictions in which we operate have enacted legislation to implement Pillar Two and other countries are actively considering changes to their tax laws to adopt certain parts of the OECD’s proposals. The enactment of Pillar Two legislation is not expected to have a material adverse effect on our effective tax rate and Condensed Consolidated Financial Statements in the near term. Moreover, in June 2025, the G7 agreed to exclude United States MNEs from certain aspects of the Pillar Two global minimum tax rules (the G7 Statement) in exchange for the United States not imposing retaliatory taxes in the Act. We will continue to monitor and reflect the impact of such legislative changes, including the G7 Statement, which has not yet been incorporated into the OECD framework, in future Condensed Consolidated Financial Statements as appropriate.

LIQUIDITY, CAPITAL RESOURCES AND CASH REQUIREMENTS

Liquidity and Capital Resources

We have historically relied on cash generated from operations, borrowings under credit facilities, issuances of debt and proceeds from divestitures for our liquidity needs.

Our capital allocation strategy is to balance driving stockholder returns, managing financial risk and preserving our flexibility to pursue strategic options, including acquisitions and mergers. Historically, this has included a quarterly cash dividend, the repayment of debt and the repurchase of shares of our common stock.

Based on past performance and current expectations, we believe that our existing cash and cash equivalents, together with cash generated from operations, amounts available under our Revolving Facility and our future refinancing plans related to our upcoming maturities, will be sufficient to meet our working capital needs, support on-going business activities and finance the expected synergy costs related to the acquisition of Avast and MoneyLion through at least the next 12 months and to meet our known long-term contractual obligations. We are currently not aware of any trends or demands, commitments, events or uncertainties that will result in or that are reasonably likely to result in our liquidity increasing or decreasing in any material way that will impact our capital needs during or beyond the next 12 months. However, our future liquidity and capital requirements may vary materially from those as of July 4, 2025, depending on several factors, including, but not limited to, economic conditions; political climate; the expansion of sales and marketing activities; the costs to acquire or invest in businesses; outcome of income tax audits with relevant tax authorities; resolution of legal proceedings, including, but not limited to, regulatory proceedings, claims, mediations, arbitrations and litigation; and the risks and uncertainties discussed in “Risk Factors” in Part II, Item 1A below.

Cash flows

The following summarizes our cash flow activities:

			Three Months Ended
(In millions)			July 4, 2025						June 28, 2024
Net cash provided by (used in):
Operating activities			$	409					$	264
Investing activities			$	(873)					$	(2)
Financing activities			$	290					$	(466)

See Note 7 of the Notes to the Condensed Consolidated Financial Statements included in this Quarterly Report on Form 10-Q for our supplemental cash flow information.

Cash from operating activities

Our cash flows provided by operating activities increased $145 million, primarily due to higher profit before taxes adjusted by non-cash items and the extra week of collections in the first quarter of fiscal year 2026. Changes in working capital sources of cash include increases in income taxes payable and other assets offset by decreases in contract liabilities, accounts payable, Instacash Advances held for sale and accrued compensation and benefits.

Cash from investing activities

Our cash flows provided by and used in investing activities decreased $871 million, primarily related to the cash consideration paid for our acquisition of MoneyLion.

Cash from financing activities

Our cash flows provided by and used in financing activities increased $756 million, primarily due to proceeds from the issuance of our Incremental Term Loan B of $741 million, net of debt issuance cost, and lower repurchases of common stock under our repurchase program. This was partially offset by an increase in mandatory and voluntary prepayments of our Term A and B Facilities.

Cash and cash equivalents

As of July 4, 2025, we had cash and cash equivalents of $820 million, excluding restricted cash, of which $407 million was held by our foreign subsidiaries. Our cash, cash equivalents and short-term investments are managed with the objective to preserve principal, maintain liquidity and generate investment returns. The participation exemption system under current U.S. federal tax regulations generally allows us to make distributions of non-U.S. earnings to the U.S. without incurring additional U.S. federal tax, however, these distributions may be subject to applicable state or foreign taxes.

Debt

We have an undrawn revolving credit facility of $1,494 million, net of our letters of credit, which expires in September 2027.

Stock repurchases

During the three months ended July 4, 2025 and June 28, 2024, we executed repurchases of 5 million and 11 million of our common stock under our existing stock repurchase program for an aggregate amount of $134 million and $272 million, respectively.

Material Cash Requirements

Our principal cash requirements are primarily to meet our working capital needs, support on-going business activities, including payment of taxes and cash dividends, payment of contractual obligations, funding capital expenditures, servicing existing debt, repurchasing shares of our common stock and investing in business acquisitions and mergers.

Debt instruments

As of July 4, 2025, our total outstanding principal amount of indebtedness is summarized as follows. See Note 10 of the Notes to the Condensed Consolidated Financial Statements included in this Quarterly Report on Form 10-Q for further information on our debt.

(In millions)			July 4, 2025
Term Loans			$	6,464
Senior Notes			2,450
Other Debt			49
Total debt			$	8,963

The Amended Credit Agreement contains customary representations and warranties and affirmative and negative covenants, including compliance with specified financial ratios. As of July 4, 2025, we were in compliance with all debt covenants. See Note 10 of the Notes to the Condensed Consolidated Financial Statements included in this Quarterly Report on Form 10-Q for further information regarding financial ratios and debt covenant compliance.

Dividends

On August 7, 2025, we announced a cash dividend of $0.125 per share of common stock to be paid in September 2025. Any future dividends and dividend equivalents will be subject to the approval of our Board of Directors.

Stock repurchase program

Under our stock repurchase program, we may purchase shares of our outstanding common stock on the open market (including through trading plans intended to qualify under Rule 10b5-1 under the Exchange Act) and through accelerated stock repurchase transactions. As of July 4, 2025, the remaining balance of our stock repurchase authorization was $2,594 million and does not have an expiration date. The timing and actual number of shares repurchased will depend on a variety of factors, including price, general business and market conditions and other investment opportunities.

Restructuring

See Note 12 of the Notes to the Condensed Consolidated Financial Statements included in this Quarterly Report on Form 10-Q for cash flow information associated with our restructuring activities.

Significant contractual obligations

Our principal commitments consist of principal and interest payments related to our debt instruments, obligations under our purchase agreements, repatriation tax payments under the Tax Cuts and Jobs Acts, obligations under various non-cancellable leases and potential other legal contingencies. Due to the uncertainty with respect to the timing of future cash flows associated with our unrecognized tax benefits and other long-term taxes as of July 4, 2025, we are unable to make reasonably reliable estimates of the period of cash settlement with the respective taxing authorities. Therefore, $1,508 million in long-term income taxes payable has been excluded from our quarterly review of timing of contractual obligations.

There have been no material changes, outside the ordinary course of business, to the contractual obligations reported in our Annual Report. For additional information about our debt obligations and certain other contingencies, see Note 10 and Note 18, respectively, of the Notes to the Condensed Consolidated Financial Statements included in this Quarterly Report on Form 10-Q.

We are exposed to various market risks related to fluctuations in interest rates and foreign currency exchange rates. We may use derivative and non-derivative financial instruments to reduce the volatility of earnings and cash flow that may result from adverse economic conditions and events or changes in interest rates and foreign currency exchange rates.

Interest rate risk

As of July 4, 2025, we had $2,499 million in aggregate principal amount of fixed-rate Senior Notes and other fixed-rate debts outstanding, with a carrying amount and a fair value of $2,536 million, based on Level 2 inputs. The fair value of these notes fluctuates when interest rates change. Since these notes bear interest at fixed rates, the financial statement risk associated with changes in interest rates is limited to future refinancing of current debt obligations. If these notes were refinanced at higher interest rates prior to maturity, our total interest payments could increase by a material amount; however, this risk is mitigated by our strong cash position and expected future cash generated from operations, which will be sufficient to satisfy this increase in obligation.

As of July 4, 2025, we also had $6,464 million outstanding debt with variable interest rates based on the Secured Overnight Financing Rate (SOFR). A hypothetical 100 basis point change in SOFR would have resulted in a $65 million increase in interest expense on an annualized basis.

In March 2023, we entered into interest rate swap agreements to mitigate risks associated with the variable interest rate of our Term A Facility. These pay-fixed, receive-floating rate interest rate swaps have the economic effect of hedging the variability of forecasted interest payments until their maturity on March 31, 2026. Pursuant to the agreements, we have effectively converted $1 billion of our variable rate borrowings under Term A Facility to fixed rates, with $500 million at a fixed rate of 3.762% and $500 million at a fixed rate of 3.55%. A hypothetical 100 basis point increase or decrease in interest rates would have resulted in a $6 million increase or $6 million decrease in the fair values of our floating to fixed rate interest swaps on July 4, 2025.

The objective of our interest rate swaps, all of which are designated as cash flow hedges, is to manage the variability of future interest expense.

In addition, we have a $1,494 million revolving credit facility, net of our letters of credit, that if drawn bears interest at a variable rate based on SOFR and would be subject to the same risks associated with adverse changes in SOFR.

Foreign currency exchange rate risk

We conduct business in numerous currencies through our worldwide operations, and our entities hold monetary assets or liabilities, earn revenues or incur costs in currencies other than the entity’s functional currency, primarily in Euro, Japanese Yen, British Pound, Australian Dollar, Czech Koruna and Canadian Dollar. In addition, we charge our international subsidiaries for their use of intellectual property and technology and for certain corporate services provided. Our cash flow, results of operations and certain of our intercompany balances that are exposed to foreign exchange rate fluctuations may differ materially from expectations, and we may record significant gains or losses due to foreign currency fluctuations and related hedging activities. As a result, we are exposed to foreign exchange gains or losses which impacts our operating results.

Growth in our international operations will incrementally increase our exposure to foreign currency fluctuations as well as volatile market conditions, including the weakening of foreign currencies relative to USD, which has and may in the future negatively affect our revenue expressed in USD.

We manage these exposures and reduce the potential effects of currency fluctuations by executing monthly foreign exchange forward contracts to hedge foreign currency balance sheet exposures. The gains and losses on these foreign exchange contracts are recorded in Other income (expense), net in the Condensed Consolidated Statements of Operations.

We do not use derivative financial instruments for speculative trading purposes, nor do we hedge our foreign currency exposure in a manner that entirely offsets the effects of the changes in foreign exchange rates. As our international operations grow, we will continue to reassess our approach to managing risks related to fluctuations in foreign currency.

Additional information related to our debt and derivative instruments is included in Note 10 and Note 11, respectively, of the Notes to the Condensed Consolidated Financial Statements included in this Quarterly Report on Form 10-Q.

(a) Evaluation of Disclosure Controls and Procedures

The SEC defines the term “disclosure controls and procedures” to mean a company’s controls and other procedures that are designed to ensure that information required to be disclosed in the reports that it files or submits under the Exchange Act is recorded, processed, summarized, and reported, within the time periods specified in the SEC’s rules and forms. “Disclosure controls and procedures” include, without limitation, controls and procedures designed to ensure that information required to be disclosed by an issuer in the reports that it files or submits under the Exchange Act is accumulated and communicated to the issuer’s management, including its principal executive and principal financial officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure. Our disclosure controls and procedures are designed to provide reasonable assurance that such information is accumulated and communicated to our management. Our management (with the participation of our Chief Executive Officer and Chief Financial Officer) has conducted an evaluation of the effectiveness

of the design and operation of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) of the Exchange Act) as of the end of the period covered by this report.

Based on such evaluation, our Chief Executive Officer and our Chief Financial Officer have concluded that our disclosure controls and procedures were effective at the reasonable assurance level as of the end of the period covered by this report.

(b) Changes in Internal Control over Financial Reporting

There were no changes in Gen’s internal control over financial reporting or in other factors that occurred during the first quarter of fiscal 2026, except for our acquisition of MoneyLion discussed below, that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

On April 17, 2025, we completed our acquisition of MoneyLion and are currently integrating MoneyLion into our operations and internal control processes. Pursuant to the SEC’s guidance that an assessment of a recently acquired business may be omitted from the scope of the evaluation for a period up to one year following the acquisition, the scope of our assessment of internal control over financial reporting is ongoing. We are currently assessing the control environment related to our acquisition of MoneyLion and have designed and implemented new controls as needed.

MoneyLion Material Weakness

A material weakness is a deficiency or a combination of deficiencies in internal control over financial reporting such that there is a reasonable possibility that a material misstatement of a registrant’s financial statement will not be prevented or detected on a timely basis.

Prior to the acquisition by Gen, MoneyLion reported an identified material weakness in its internal control over financial reporting. As a result, MoneyLion concluded that, as of December 31, 2024, its disclosure controls and procedures were not effective in providing reasonable assurance that information required to be disclosed in reports filed or submitted under the Exchange Act was recorded, processed, summarized and reported within the time periods specified by SEC rules and forms. The material weakness identified relates to MoneyLion’s Credit Builder Loan product, involving certain cash disbursements made to customer escrow accounts that were not in accordance with the product’s terms. While the related transactions were properly reflected in the financial statements and no misstatements were identified, the control deficiency could have resulted in unauthorized disbursements of cash. Accordingly, this deficiency was determined to constitute a material weakness. MoneyLion has undertaken steps to remediate the material weakness and we are evaluating the steps that have been taken under Gen’s control framework.

(c) Limitations on Effectiveness of Controls

Our management, including our Chief Executive Officer and Chief Financial Officer, does not expect that our disclosure controls and procedures or our internal controls will prevent all errors and all fraud. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. The design of a control system also is based in part upon assumptions and judgments made by management about the likelihood of future events, and there can be no assurance that a given control will be effective under all potential future conditions. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within our company have been detected.

PART II. OTHER INFORMATION

Item 1. Legal Proceedings

Information with respect to this Item may be found under the heading “Litigation contingencies” in Note 18 of the Notes to the Condensed Consolidated Financial Statements in this Form 10-Q, which information is incorporated herein by reference.

SUMMARY RISK FACTORS

We are subject to a number of risks that, if realized, could materially and adversely affect our business, financial condition, results of operations, and cash flows and our ability to make distributions to our stockholders. Some of our more significant challenges and risks include, but are not limited to, the following, which are described in greater detail below:

• If we are unable to develop new and enhanced solutions and products, or if we are unable to continually improve the performance, features, and reliability of our existing solutions and products, our business and operating results could be adversely affected.

• We operate in a highly competitive and dynamic environment, and if we are unable to compete effectively, we could experience a loss in market share and a reduction in revenue.

• Issues in the development and deployment of artificial intelligence (“AI”) may result in reputational harm and legal liability and could adversely affect our results of operations.

• Our acquisitions and divestitures create special risks and challenges that could adversely affect our financial results.

• Our revenue and operating results depend significantly on our ability to retain our existing customers and expand sales to them, convert existing non-paying customers to paying customers and add new customers.

• If we fail to manage our sales and distribution channels effectively, if our partners choose not to market and sell our solutions to their customers, or if we have an adverse change in our relationships with key third-party partners, service providers or vendors, our operating results could be materially and adversely affected.

• Changes in industry structure and market conditions have and may continue to lead to charges related to discontinuance of certain of our products or businesses and asset impairments.

• Our international operations involve risks that could increase our expenses, adversely affect our operating results and require increased time and attention of our management.

• Our future success depends on our ability to attract and retain personnel in a competitive marketplace.

• If the information provided to us by customers or other third parties is incorrect or fraudulent, we may misjudge a customer’s qualifications to receive our products and services and our results of operations may be harmed and could subject us to regulatory scrutiny or penalties.

• Our solutions, systems, websites and the data on these sources have been in the past and may continue to be subject to cybersecurity events that could materially harm our reputation and future sales.

• We collect, use, disclose, store or otherwise process personal information and other sensitive data, which is subject to stringent and changing state and federal laws and regulations.

• Our inability to successfully recover from a disaster or other business continuity event could impair our ability to deliver our products and services, which could harm our business.

• We are dependent upon Broadcom for certain engineering and threat response services, which are critical to many of our products and business.

• If we fail to offer high-quality customer support, our customer satisfaction may suffer and have a negative impact on our business and reputation.

• Our solutions are complex and operate in a wide variety of environments, systems and configurations, which could result in failures of our solutions to function as designed.

• Negative publicity regarding our brand, solutions and business could harm our competitive position.

• Our reputation and/or business could be negatively impacted by sustainability and governance matters and/or our reporting of such matters.

• We are affected by seasonality, which may impact our revenue and results of operations.

• Our solutions are highly regulated and the legal and regulatory regimes governing certain of our products and services are uncertain and evolving, which could impede our ability to market and provide our solutions or adversely affect our business, financial position and results of operations.

• The regulatory regime governing blockchain technologies and digital assets is uncertain, and new laws, regulations or policies, including licensing laws, may alter our business practices with respect to digital assets.

• If we do not protect our proprietary information and prevent third parties from making unauthorized use of our products and technology, our financial results could be harmed.

• From time to time we are party to lawsuits and investigations which has previously and could in the future require significant management time and attention, cause us to incur significant legal expenses and prevent us from selling our products.

• Third parties have claimed and additional third parties in the future may claim that we infringe their proprietary rights.

• Some of our products contain “open source” software, and any failure to comply with the terms of one or more of these open source licenses could negatively affect our business.

• There are risks associated with our outstanding and future indebtedness that could adversely affect our financial condition.

• Our Amended Credit Agreement imposes operating and financial restrictions on us.

• We may be unsuccessful in managing the effects of changes in the cost of capital on our business.

• The failure of financial institutions or transactional counterparties could adversely affect our current and projected business operations and our financial condition and result of operations.

• If our existing funding arrangements are not renewed or replaced or our existing funding sources are unwilling or unable to provide funding to us on terms acceptable to us, or at all, it could have a material adverse effect on our business, financial condition, results of operations and cash flows.

• Hedging or other mitigation actions to mitigate against interest rate exposure may adversely affect our earnings, limit our gains or result in losses, which could adversely affect cash available for distributions.

• Adverse macroeconomic conditions and government efforts to combat inflation, along with other interest rate pressures, have led to and may continue to lead to higher financing costs and may particularly have negative effects on the consumer finance industry and our MoneyLion business.

• Fluctuations in our quarterly financial results have affected the trading price of our stock in the past and could affect the trading price of our stock in the future.

• We may be required to issue shares under our contingent value rights agreement with certain former holders.

• Changes to our effective tax rate could increase our income tax expense and reduce (increase) our net income (loss), cash flows and working capital and audits by tax authorities could result in additional tax payments for prior periods.

• We could be obligated to pay additional taxes in various jurisdiction, which would harm our results of operations.

• Our ability to use our deferred tax assets to offset future taxable income may be limited.

The above list is not exhaustive, and we face additional challenges and risks. Please carefully consider all of the information in this Quarterly Report on Form 10-Q, including the matters set forth below.

A description of the risk factors associated with our business is set forth below and in “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” “Legal Proceedings,” “Quantitative and Qualitative Disclosures About Market Risk” and “Controls and Procedures.” The list is not exhaustive, and you should carefully consider these risks and uncertainties before investing in our common stock.

RISKS RELATED TO OUR BUSINESS STRATEGY AND INDUSTRY

**If we are unable to develop new and enhanced solutions, or if we are unable to continually improve the performance, features, and reliability of our existing solutions, our busine

Showing the first 8K of 143K characters. Open the full section

Insider adoption or termination of trading arrangements

During the fiscal quarter ended July 4, 2025, none of our directors or officers informed us of the adoption or termination of a “Rule 10b5-1 trading arrangement” or “non-Rule 10b5-1 trading arrangement,” as defined in Regulation S-K, Item 408.

Exhibit Number												Incorporated by Reference																								Filed/Furnished with this 10-Q
Exhibit Description						Form						File Number						Exhibit						File Date
10.01						Form of Performance Based Restricted Stock Unit Award Agreement (VCP) under Gen Digital Inc. 2013 Equity Incentive Plan																														X
10.02						Second Amendment to Amended and Restated Credit Agreement, dated as of April 16, 2025, by and among Gen Digital Inc., the guarantors party thereto, Bank of America, N.A., as administrative agent, each Second Amendment Incremental Term B Loan Lender.						8-K						000-17781						10.02						4/17/2025
10.03						Contingent Value Rights Agreement, dated as of April 17, 2025, by and among Gen Digital Inc. and Computershare Inc. and Computershare Trust Company, N.A.						8-K						000-17781						10.01						4/17/2025
31.01						Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.																														X
31.02						Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.																														X
32.01†						Certification of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.																														X
32.02†						Certification of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.																														X
101						The following financial information from Gen Digital Inc.'s Quarterly Report on Form 10-Q for the quarter ended July 4, 2025 are formatted in iXBRL (Inline eXtensible Business Reporting Language): (i) Condensed Consolidated Balance Sheets, (ii) Condensed Consolidated Statements of Operations, (iii) Condensed Consolidated Statements of Comprehensive Income (Loss), (iv) Condensed Consolidated Statements of Stockholders’ Equity (Deficit), (vi) Condensed Consolidated Statements of Cash Flows, and (vi) Notes to the Condensed Consolidated Financial Statements, tagged as blocks of text and including detailed tags.																														X
104						Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)																														X

†			This exhibit is being furnished rather than filed, and shall not be deemed incorporated by reference into any filing, in accordance with Item 601 of Regulation S-K.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

			GEN DIGITAL INC.
			(Registrant)
			By:			/s/ Vincent Pilette
						Vincent Pilette Chief Executive Officer, President and Chairman of the Board
			By:			/s/ Natalie Derse
						Natalie Derse Chief Financial Officer

August 13, 2025