Gen Digital (NASDAQ:GEN) reported what management described as another strong quarter in its fiscal third quarter 2026 earnings call, pointing to double-digit bookings growth, a paid customer base above 78 million, and 14% year-over-year growth in non-GAAP diluted earnings per share.
CEO Vincent Pilette framed the quarter around the company’s long-term strategy of building a “trusted AI-powered platform” spanning cyber safety and financial wellness. CFO Natalie Derse said results came in at the high end of guidance, driven by “record revenue and bookings,” double-digit EPS growth, and what she called exceptional free cash flow generation.
Q3 financial results and updated outlook
Profitability remained a central theme of the quarter’s discussion. Derse said Q3 operating income was $629 million, representing a 51% operating margin. Net income was $394 million and non-GAAP diluted EPS was $0.64, up 14% year over year and at the high end of the company’s guidance. She also noted the quarter marked Gen’s ninth consecutive quarter of achieving or exceeding its 12%–15% EPS growth target.
Gen raised full-year guidance again. For fiscal 2026, the company now expects:
- Revenue: $4.955 billion to $4.975 billion (raised from $4.92 billion to $4.97 billion)
- Non-GAAP EPS: $2.54 to $2.56
The company’s implied Q4 outlook calls for revenue of $1.24 billion to $1.26 billion and non-GAAP EPS of $0.64 to $0.66. Derse said the outlook assumes high single-digit pro forma growth, disciplined cost management, targeted investments in the Gen platform and AI capabilities, and FX rates consistent with Q3.
Cyber Safety: bookings growth, higher-tier adoption, and anti-scam focus
Pilette described a threat environment that is increasingly defined by scams embedded in everyday consumer experiences—such as sponsored ads, social feeds, QR codes, and payments—rather than traditional technical exploits. He said Gen blocks “tens of millions” of scam attempts every quarter, most tied to financial fraud, and cited that the company blocked more than 45 million fake online shop attacks last quarter, up over 60% year over year. Pilette added that fake ads now represent more than 40% of all consumer cyber threats.
From a business standpoint, Derse said the Cyber Safety segment delivered 5% year-over-year bookings growth and 3% revenue growth, while maintaining 61% operating margins. She attributed performance to demand for cyber safety subscriptions and increased adoption of Norton 360 memberships across desktop and mobile, supported by rising scam activity.
Derse also highlighted ongoing strength in higher-tier memberships, which she said continue to grow double digits, and noted membership conversion is “nearing 45%.” She said the company is working to strengthen lifecycle messaging and upsell pathways to improve customer lifetime value.
On customer monetization, Derse described an internally developed AI “Product Recommender” model used within the Customer Success organization that analyzes product ownership, feature usage, and behavioral signals to deliver more relevant offers. She said early results have been encouraging for privacy add-ons, with Norton cross-sell penetration now exceeding 26%, and Gen plans to expand the capability to additional cohorts in Q4.
AI agents, Norton Neo, and the new Agent Trust Hub
A significant portion of the call focused on AI agents and what Pilette called the next major shift in consumer cyber risk. He said AI has compressed the lifecycle of attacks, enabling more personalized scams at scale and increasing the speed and impact of fraud.
He warned that AI agents—used to browse, shop, manage accounts, and make decisions—can be deceived by fake ads, impersonation sites, and misleading messages. As an example, Pilette referenced “OpenClaw,” describing how locally running agents can access files, messages, and credentials, and how a single malicious email could potentially lead an agent to extract and send sensitive data without exploiting traditional software bugs.
Pilette said Gen Threat Labs introduced a beta version of an “Agent Trust Hub,” which he described as a tool allowing users and AI bots to scan agent “skills” for risk before execution, control what agents access, and verify safety. He also said it includes a curated marketplace maintained by Gen security researchers, calling it the world’s first trusted app store for agent skills.
He also noted that the company launched Norton Neo in December, describing it as the “world’s first safe AI browser,” and said adoption has been strong in the company’s install base.
Asked about monetization for agent-related protection, Pilette said the company is “absolutely not yet” at the level of discussing ARPU or ASP uplift, but argued the need for safety in the AI economy is becoming a real consumer pain point and that people would be willing to pay to address it over time.
Trust-Based Solutions: MoneyLion, Engine marketplace, and Equifax partnership
In Trust-Based Solutions, Derse said that on a pro forma basis, bookings and revenue grew 23% and 22%, respectively, and more than doubled on a reported basis. Segment operating margins were 30%, which Derse said was in line with expectations as Gen makes targeted investments in MoneyLion and AI-related initiatives.
Derse said MoneyLion revenue grew nearly 40% in Q3, driven by demand for products such as Instacash and scaling of the Engine marketplace. She said Instacash delivered record originations during the quarter, supported by targeted marketing investments tied to elevated holiday-season demand. She also pointed to Engine’s momentum as the company added new partners across financial brands and online publishers.
Pilette provided additional detail on MoneyLion’s mix, saying the business is roughly 60% personal finance/consumer and 40% Engine. He reiterated the company’s longer-term view for MoneyLion of around 30% growth as it scales, with margins above 20%, while noting the company would capture “pockets of acceleration” when they arise.
Gen also discussed a new product under development, MoneyOne, which Pilette described as a subscription combining MoneyLion with scam and identity protection. He said it is currently in closed beta and moving toward early access later this year.
On product engagement, Pilette highlighted an early feature example, “Found Money,” described as a savings optimization assistant. He said 60% of users engaging with Found Money interacted with an offer and 30% linked at least one additional account.
The company also announced an expanded partnership with Equifax. Pilette said the relationship is evolving from a traditional vendor arrangement into a “two-way” strategic partnership, enabling deeper access to Equifax’s differentiated datasets (including tools like Credit Lock) to expand Gen’s alerts and consumer risk visibility. He said Equifax will also use Engine on myEquifax.com to deliver more personalized financial offers, and that the partnership could enrich Engine’s offer ecosystem over time.
Capital allocation, leverage, and balance sheet updates
Derse said Gen ended Q3 with $619 million in cash and over $2.1 billion of total liquidity including a $1.5 billion revolver. The company generated $541 million in operating cash flow and $535 million in free cash flow.
Gen returned nearly $700 million of capital to shareholders and creditors during the quarter, including:
- $300 million in share repurchases (about 11 million shares)
- $300 million of debt repayment
- $77 million in dividends
Net leverage ended the quarter at 3.1x EBITDA, which Derse said puts the company ahead of schedule toward its goal of getting below 3x in fiscal 2027. She also said Gen is exploring refinancing options for its term loan A maturing in September fiscal 2028, with early discussions described as encouraging.
The company’s board approved a quarterly cash dividend of $0.125 per share, payable March 11, 2026 to shareholders of record as of February 16, 2026.
About Gen Digital (NASDAQ:GEN)
Gen Digital (NASDAQ: GEN) is a global cybersecurity company specializing in consumer- and small-business-focused security, privacy, and identity protection solutions. The company offers a suite of products designed to safeguard devices, networks, and personal information against malware, ransomware, phishing attacks and other digital threats. With a focus on user-friendly interfaces and cross-platform compatibility, Gen Digital develops antivirus software, VPN services, parental controls, password management tools, and comprehensive identity-theft monitoring services.
Gen Digital traces its origins to the consumer software division of Symantec Corporation, which was spun off in late 2019 under the NortonLifeLock name.
