Q4 2025 Gen Digital Inc Earnings Call
And let's leverage reduced to nearly three times EBITDA as well as our records direct customer count all demonstrate the significant progress we have made in achieving the long term commitments share it shared at our Investor day in 2023.
More importantly, and beyond the financial results consumers need our solutions given the dynamic threat landscape, which shows no signs of slowing.
We are committed to increasing the pace of our innovation and expanding our geographic reach and channels to bring our cyber safety platform Amtrust based solutions to everyone.
During fiscal year 2025, the consumer cyber safety landscape continues to evolve with AI powered sleds, becoming increasingly sophisticated and widespread.
AI is now used to generate scan websites cone voiceless for scam calls or create deep fakes for in person nation scams like enrollment scam.
Accurate personalized scams like deep fake Whatsapp video calls from a relative or colleague.
Fueled by widespread breaches that gives the threat actors your personal data.
In the meantime, ransomware attacks are still very active and have evolved with attackers no longer just an cooking data, but now also using it towards towards the victims.
Our research shows incidents targeting consumers and very small businesses have more than doubled over the past year, which comes now accounting for over 80% of consumer cyber incidents.
This underscores the critical need for smarter AI, driven anti scam technologies that can otherwise behavior in real time and stop attacks before the impact consumers.
This year, we significantly enhanced our AI driven threat detection capabilities with key investments not only in enhancing our existing security engines, which now covers all gen brands, but also in developing new engines to expand our protection leadership across additional channels like SMS E Mail.
Our phone calls.
In Q4, we launched <unk> scan protection in our northern cyber safety products to help defend against 40 calls text E mails a website.
Northern Genie has significantly boosted our overall scan detection efficacy by as much as 10 fold since its release.
Genie marks a significant advancement in our threat detection and defense and is a true AI powered cyber safety companion that not only proactively protects people with also serves as the personal scan the agent that educates in guidance people on how to keep the data and asset sales.
Our Norton 360 platform continues to resonate strongly in global markets, particularly as we added genus can protection refreshed our user interface and migrated our technology to a new Gen stack.
These enhancements not only improve the user experience, but also enables faster innovation and a unified dataset across products and brands, allowing us to better personalized communications and product recommendations.
With the northern migration now essentially complete we are focused on delivering an enhanced experience to avast customers next.
In parallel our identity theft protection products and solutions have contributed meaningfully to our fiscal year 'twenty five growth with increased demand for lifelock. Following heightened consumer awareness after major breaches like the national public data breach.
We give consumers peace of mind by helping protect the personal data by providing real time alerts and visibility when the data is exposed and loss protection should they need it.
We enhanced our offering which credit score insights easier onboarding financial alerts and even introduce access to credit cards and saving accounts based on customers' digital and financial replication.
We have invested in personal data halls, privacy dashboard and proactive security updates.
<unk> four eight rating across <unk> pilot in the App store demonstrate the value that our customers see in these offerings and investments.
Okay.
Beyond the strong focus on innovation will continue to expand our geographic and channel reach by entering new markets.
Privacy and identity products, we're introducing 215, new markets with encouraging early results and overall identity category grew double digits internationally.
We also double down on our partner program signing of many new accounts gaining share in Latin America, and other emerging markets as well as expanding our share of wallet in the employee benefit program.
As a result of both accelerated innovation and expanded reach we grew our direct customer count by $1 3 million to over $40 million direct paid customers and a total of over 65 million direct and indirect customers. In addition to hundreds of millions of freemium users.
And now nearly 45% of our direct customers have comprehensive cyber safety membership, reflecting the increasing value of our expanding product portfolio.
With our leading and foundational cyber safety platform firmly established we started to invest in developing additional trust based adjacencies beyond our core identity protection solutions.
After connecting the personal identifiable information and linking the financial accounts for fraud detection, our customers began asking for deeper insights into their financial position and additional ways to benefit beyond just protection alerts and restoration.
What began as an organic effort to provide more financial insights to our larger customers ultimately led to the acquisition of Monte line, which closed a couple of weeks ago.
This transaction expands our Tam accelerates our entry into financial wellness market and further enables us to address new consumer needs to accelerate growth.
Moneyline provides the technology and the market are textural backbone of our personal financial management banking and investing solutions.
And delivers a white label marketplace too much millions of consumers with thousands of financial service offerings from hundreds of partners.
Speaker Change: Leveraging our deep consumer insight Gen will be their trusted ally empowering them to make well informed decisions that significantly improve their financial well being and we are thrilled to welcome money line to the <unk> team.
Speaker Change: Although we just closed the transaction, we are already making progress on integrating multiline into Jim.
Speaker Change: We are applying our proven operational discipline with a continued focus on driving profitable growth.
Operational synergies are targeted at funding growth and improving moneyline operational margin from around 15% to over 20% in fiscal year 'twenty six.
Speaker Change: To ensure financial Prudence, we've structured the business with a forward flow model supporting the infra cash product, which shifts short term loans to other financial partners, who service them and eliminating any balance sheet exposure to jump in.
Speaker Change: In parallel we're on.
Speaker Change: Then in key multi line capabilities like banking and marketplace into new Lifelock in northern financial wellness features planned to launch throughout fiscal year 2026.
Speaker Change: This strategic move enables us to accelerate pro forma growth post acquisition, and we look forward to providing further updates throughout the year.
Speaker Change: To maintain our pace of innovation focus and operational discipline, we are organic organizing our business around two key segments.
Speaker Change: Our cyber safety platform segment will consist of our award winning security and privacy offerings.
Speaker Change: Mission in the cyber safety platform segment is to provide advanced technology and threat protection that helps customers navigate the digital world securely privately and confidently.
Speaker Change: This segment is the growth potential of mid single digits and approximately 60% non-GAAP operating margin.
Speaker Change: We are accelerating the adoption of Genie AI powered anti scam solution, which is driving membership growth and upgrades to higher tier plans.
Speaker Change: Our new Gen stocks, which features AI driven dynamic segmentation and a re imagine customer journey is set to boost customer lifetime value.
Speaker Change: As we move forward our continued solid mid single digit growth in security and privacy will be supported by key initiatives such as AI powered scan protection mobile and privacy first entry points international expansion and partnerships branded or table.
Speaker Change: Our second segment Trust based solutions will include both identity and financial wellness offerings.
Speaker Change: In this segment our mission is to deliver innovative solutions and insights that empower consumers to manage the identity reputation and finances with confidence and freedom.
Speaker Change: This segment is a high single digit revenue growth potential and the non-GAAP operating margin target in excess of 30% as we scale up financial wellness.
Speaker Change: We enter fiscal year 'twenty six with strong momentum in the identity and reputation business gaining traction by expanding our customer base through increased risk awareness campaigns in both the U S and international markets through distribution channels by temporary benefit and scaling up strategic partnerships.
Speaker Change: We expect to grow our food and opened new channel opportunities through an expanded value proposition that includes embedded financial wellness features.
Speaker Change: The acquisition of Monte line presents a powerful opportunity to bring financial wellness to all of Gen 65 million customers and hundreds of millions of users.
Speaker Change: Key initiatives for fiscal years 2006 include integrating moneyline's financial marketplace into our U S customer base, expanding partnership with credit bureaus and financial institutions to deliver personalized solutions.
Speaker Change: And launching our financial wellness company to help our customers make smarter and more informed financial decision is.
It's definitely an exciting time and we're just getting started.
Speaker Change: But nothing about the opportunities our newly formed trust based solutions segment provides and combine them with the growth and momentum exiting fiscal year 2025.
Speaker Change: Could not be more excited by our prospects as you will hear from Natalie we're guiding fiscal year 2026 revenue to be between four seven and $4 8 billion, representing 6% to 8% pro forma growth.
Speaker Change: To sum it all up we are proud of all we accomplished in fiscal year 'twenty five and we're looking forward to building on this momentum in the years ahead.
Speaker Change: He is very well positioned to lead in a world where digital safety and trust are more important than ever to consumers people are asking to do more with their data so being empowered and enabled by the best in class Cyber safety platform and trust based solutions is even more critical.
Speaker Change: We remain very focused on delivering value to our customers employees and our shareholders. So thank you for your continued support and I will now pass it to Natalie who will share more details on our financial performance and our financial outlook.
Thank you Vince and Hello, everyone. It's a very exciting time for Jim we've made significant progress in transforming our business over the past five years from now we are thrilled to welcome the money mine into our portfolio.
Natalie: With the financial wellness capabilities gained through this acquisition, we're extending our momentum into fiscal year 2026.
Natalie: For today's call I will walk through our full year fiscal 2025 results followed by our Q4 results.
Natalie: Sure our outlook for Q1 and fiscal year 2026.
Natalie: I will focus on non-GAAP financials and year over year growth rates unless otherwise stated.
Natalie: Fiscal year 2025 was a defining year for gen. As we posted our sixth straight year of growth while continually delivering on our guidance commitments and are positioning ourselves for further acceleration with our acquisition of Honey line.
Natalie: Our results demonstrate the significant progress, we're making across the five levers that we shared at our 2023 analyst day, resulting in broad based growth across our brands regions and expanding product portfolio.
Natalie: Total bookings for the year were $4 billion up 4% in both constant currency and cyber safety and up 3% in USD.
Natalie: We finished with 393 $5 billion in total revenue also growing 4% in USD and constant currency.
Natalie: Operating income was $2 3 billion and operating margin was 58, 4%.
Natalie: Our robust revenue growth combined with our operating discipline and capital allocation enabled us to deliver $2 and 22 in full year EPS.
Natalie: At the high end of our guidance and up 14% year over year as reported and up 15% in constant currency.
Natalie: Turning to Q4 performance Q4 was a record quarter.
Natalie: <unk> are 23rd consecutive quarter of growth.
Natalie: With financial results at or above the high end of our guidance.
Q4 bookings was $1 8 billion up 5% in constant currency.
Natalie: Total Q4 revenue exceeded the $1 billion hurdle for the first time at $1 1 billion.
Natalie: About 5% in USD and in constant currency.
Natalie: We saw broad based growth across the product portfolio and markets are direct kpis remain healthy and our partner channels are scaling through identity adoption.
Natalie: I'll now walk through the results in more detail.
Natalie: Direct revenue was $877 million up 4% in constant currency.
Natalie: A key ingredient to our growth strategy is driving net new customers and in Q4, we expanded our customer base for the seventh consecutive quarter, increasing to $40 4 million up over 300000 sequentially and up $1 $3 million year over year.
Natalie: Our growth is driven by our diverse set of customer acquisition channels, particularly international growth markets and through mobile App stores.
Natalie: While the unit economics vary across channels. Our strategy is to reach these customers early in their cyber safety, Germany and leverage our brands, our comprehensive product set and leading customer service to drive long term loyalty and healthy returns.
Natalie: Our playbook is working as customer retention is improving at the cohort level and.
Natalie: Our overall retention rate increased slightly year over year to 78%.
Natalie: As we continue to provide reliable comprehensive protection.
Enhanced our Norton 360, memberships and expand financial wellness features in our identity offerings.
Natalie: We are driving long lasting customer relationships and increasing customer lifetime value.
Natalie: On monetization our monthly direct <unk> was $7 27 in USD in line with the previous quarter.
Natalie: And up five pennies from last year's result.
Natalie: This result, absorbs about a penny of negative FX headwind sequentially and about two pennies of negative FX headwinds year over year.
Natalie: We're growing <unk> mid single digits in our online customer base, primarily through increased cross sell penetration in our Norton base and increased Norton 360 membership adoption.
Natalie: Approximately a quarter of our Norton base now has more than one product.
Natalie: Improvement of five points since last year and progressing towards our goal of 30% penetration.
Natalie: As demand for increased cyber protection grows with the threat landscape, we are well positioned to provide customers with a targeted point solutions or provide them with an option to move to a higher tier comprehensive cyber safety membership offering.
Natalie: Now nearly 45% of our direct customer base has a membership offering that provides even greater peace of mind.
Natalie: This is where the breadth and depth of our portfolio shines and we will continue to drive higher monetization with our product innovation efforts.
Natalie: And our mobile base would affirm or to double digits, which has primarily been driven by higher Norton 360 membership adoption.
Natalie: Our recent in product messaging capabilities, we have embedded into our mobile products are enabling us to engage more closely with the customer during their purchasing journey driving higher sales conversion and a larger percentage of new mobile customers, who purchase our Norton 360 membership.
Natalie: Whether it's through first purchases cross sells upsells, we have a proven track record of driving increased share of wallet and customer lifetime value. After initial purchase with a tailored growth flywheel and playbook for each diverse customer acquisition channel.
Turning to our partner business partner revenue was $121 million in Q4 up 15% year over year.
Natalie: This acceleration was primarily driven by record growth in our employee benefits channel during open enrollment.
Natalie: New sales in open enrollment increased by over 75% driven by the strong and healthy pipeline, we've built over time and.
Natalie: And employers are increasingly turning to our offerings to protect their employees identity and protection.
Natalie: We're seeing a substantial increase in employers paying direct for our services as a benefit as opposed to offering it as a voluntary benefit to be elected by their employees, which results in higher conversion rates.
Natalie: Through our telco partnerships, we're driving further expansion momentum of our identity offerings internationally.
Natalie: We are proud of the traction.
Natalie: We're making as we leverage these partner channels to expand our reach and we look forward to sharing more progress in the coming quarters.
Natalie: Rounding out revenue our legacy business lines contributed about $12 million this quarter down from $15 million in prior year as expected.
Natalie: Turning to profitability Q4, operating income was $590 million translating to an operating margin of 58, 4%.
Natalie: You'll see us continue to invest in product and technology as well as marketing with our consistent disciplined approach.
Natalie: We invest to bolster our product portfolio with differentiated solutions to reach new and existing customers to extend.
Natalie: Our international presence, especially in identity and privacy and expand into trust based Adjacencies that will touch more parts of the consumers' digital and financial lives.
Q4, net income was $366 million up 10% year over year.
Natalie: Diluted EPS was <unk> 59 for the quarter up 12% year over year and up 13% in constant currency.
Natalie: Interest expense related to our debt was approximately $129 million in Q4.
Natalie: Our non-GAAP tax rate remained steady at 22%.
Natalie: And our ending share count was $624 million down $13 million year over year, reflecting the impact of share repurchases.
Natalie: I'd like to now review, a few items related to our balance sheet and cash flow, including our recent debt refinancing and material cash activities since our last earnings call, including our money lying acquisition.
Natalie: Q4, ending cash balance was just over $1 billion with over $2 5 billion of liquidity, when including our $1 5 billion revolver.
Natalie: Q4, operating cash flow was $473 million and free cash flow was $470 million and net leverage was 332 times.
Natalie: At the end of February we issued $950 million and secure.
Natalie: Senior unsecured notes with a coupon of $6 two 5% due in April 2033.
Natalie: And we paid off our $1 $1 billion 2025 notes with the proceeds.
Natalie: Following our fiscal year end, we secured an additional $750 million of TSB with an interest rate of sofa, plus 175 basis points.
Natalie: April 2032.
Natalie: And paid approximately $1 billion in cash for the money on acquisition.
Natalie: We have no material debt due until fiscal 2028.
Natalie: For more detail about our capital structure. Please refer to the appendix slide in our earnings presentation.
Natalie: We paid $77 million to shareholders in the form of a regular quarterly dividend of $12.05 per common share.
Natalie: For Q1 fiscal 2026, the board of directors approved a regular quarterly cash dividend of <unk> 12, and a half cents per common share to be paid on June 11, 2025, we're all shareholders of record as of the close of business on May 19 2025.
Natalie: Since the start of fiscal year 'twenty three we have deployed a total of $1 $6 billion of share repurchases.
Natalie: Over $2 billion for debt Paydown and $950 million for dividends.
Natalie: Totaling $4 6 billion.
Natalie: As a reminder, our current buyback program has $2 7 billion remaining with no expiration date.
Natalie: We will also continue to drive net leverage to less than three times EBITDA by the end of fiscal 2027, so our balanced capital allocation strategy and accelerating growth.
Before turning to fiscal 2026, I'd like to sincerely. Thank the Gen team for your hard work and dedication and always accomplished.
Natalie: Not only this past fiscal year, but throughout the past five.
Natalie: With the acquisition of <unk>.
Natalie: We're taking the next step in our journey expanding.
Natalie: Expanding into financial Wellness and trust based solutions, which opens an even greater opportunity to drive profitable accelerating revenue growth.
Natalie: While maintaining the same operating discipline that we'll continue to drive increasing value for our customers our employees and our shareholders.
Natalie: I couldnt be prouder of the team and I look forward to this next chapter of our journey together.
Natalie: Now let me provide some color on how we will operate and report on our business moving forward as.
Natalie: As Vincent mentioned, we will operate with two business segments cyber safety platform interest based solutions.
Vincent: While our top financial priority remains driving accelerating and profitable growth for total Gen. This new segmented approach will drive a differentiated focus embedded in our product innovation resource prioritization and our go to market approach always keeping the customer at the center of all we do.
Vincent: The two key metrics, we will use internally to measure performance in these segments are bookings and non-GAAP operating margin.
Vincent: We prioritize these metrics because bookings reflects all the aspects of our growth framework.
Vincent: New customer acquisition cross sell upsell activity renewals partner expansion.
Vincent: And the value, we deliver to our customers everyday.
Vincent: Operating margin reflects our overall efficiency encompassing marketing investments sales.
Vincent: Sales activities product innovation.
Vincent: And our strong history of delivering profitable growth.
Vincent: To provide greater visibility to investors, we will report our bookings and operating margin for cyber safety platform and trust based solutions on a quarterly basis.
Vincent: Now, let me share our Q1 and fiscal 2026 outlook and some of the assumptions that underpin it.
Vincent: We enter fiscal 2026, and a strong financial position with a strategic growth framework.
Vincent: Despite general macroeconomic uncertainty our.
Vincent: Our business remains resilient bolstered by a highly recurring revenue base.
Vincent: Strong customer retention and global diversification.
Vincent: We are further supported by the dynamic threat landscape and to an extent the current economic backdrop, both of which reinforce the need for a world class Cyber safety platform and trust based solutions built on top.
Vincent: For fiscal year 2026, we expect full year revenue in the range of $4 7 billion to $4 8 billion translating to 6% to 8% pro forma annual growth.
Vincent: We expect non-GAAP EPS to be in the range of $2 46.
Vincent: The $2 54 per share representing double digit growth of 12% to 15% for the year.
Vincent: For Q1, we expect non-GAAP revenue in the range $1 18.
Vincent: 118 billion to $1, two 1 billion translating.
Vincent: Translating to approximately five 7% pro forma year over year growth.
Vincent: We expect Q1, non-GAAP EPS to be in the range of 59 to 61, representing double digit growth of 12% to 15% in constant currency.
Vincent: Note that this fiscal year included an extra week in Q1.
Vincent: Which will increase our reported Q1 and full year revenue offset by money Lion pre acquisition stub revenue and business model transition.
Vincent: This guidance also assumes current FX rates through significant fluctuations.
Main possible given the current volatility in financial markets.
Vincent: We will continue to monitor our operating environment and stay focused on what we can control.
Vincent: Our initial outlook captures a range of outcomes with the midpoint, representing our base case.
Vincent: In summary fiscal year 2025 was a breakthrough year for Jen and we're excited about our plans for fiscal 2026.
Vincent: We're accelerating growth with the same operating discipline you've come to expect.
Vincent: Our margins remain exceptional.
Vincent: Enabling disciplined investments in our growth and innovation initiatives to further scale our business.
Vincent: And our free cash flow generation is robust trading.
Vincent: Creating capacity for ongoing opportunistic share repurchases and further deliberate delevering to drive strong returns for our shareholders.
As always thank you for your time today and I will now turn the call back to the operator to take your questions.
Vincent: Operator.
Speaker Change: Thank you we will now begin the question and answer session. If you'd like to ask a question. Please press star followed by one on your telephone keypad. If for any reason at all you would like to move that question. Please press star followed by two again to ask a question. Please press star one.
Speaker Change: The first comes from Andrew Nowinski with Wells Fargo You May proceed.
Andrew Nowinski: Okay. Good afternoon, and congrats on the solid results.
Speaker Change: I really like the way your segments of the business between cyber safety in the trust based solutions, certainly makes a lot of sense, putting that lifelock and the <unk>.
Andrew Nowinski: The trust based segments.
Andrew Nowinski: So I guess my question is my first one would be on guidance. It looks roughly like your guidance for fiscal 'twenty six assumes moneyline growth trends kind of stay in that 29%, 30% range that they delivered this last fiscal year.
Andrew Nowinski: How much visibility do you have in that segment relative to your cyber safety platform.
Andrew Nowinski: Well, maybe yes, maybe I'll take that one proceeding I thought you had two components. So so you're right that the guidance is basically based on what we had said in the past, which is our cyber safety all in before moneyline as of course potential above mid single digits and we delivered Q4 exiting at five.
Andrew Nowinski: Per cent for you at 4% you have a similar momentum and in a similar trend in Q1 going into fiscal year 'twenty six.
Andrew Nowinski: When we combined moneyline moneyline and grew at around 24, 25% in the last calendar year.
Andrew Nowinski: It will be a few shifts here so a few things to keep in mind in your guidance as we close the business at the end of April. So you don't have a full year and then while we maintain the current momentum in the moneyline business, we really are focusing on a cross selling into our installed base building.
Andrew Nowinski: Branded version of our cyber safety, but financial wellness features using the multiline architectures.
Andrew Nowinski: Then secondly, transforming the business.
Andrew Nowinski: From a pure transactional revenue engine today to something that is moving over the years towards a subscription business and so you have those two combination of trends going into the view and so when you combine it all and it gives the guidance that he gave you a 6% to 8% pro forma.
Andrew Nowinski: Got it thank you.
Andrew Nowinski: And then maybe.
Andrew Nowinski: A question on capital allocation I guess, how are you thinking about share repurchases. This year, while you're balancing the dividend in driving down the net leverage ratio.
Andrew Nowinski: Yeah. Thanks for the question.
Andrew Nowinski: Get right back to it the last couple of quarters, we've been.
Andrew Nowinski: On pause because of the pending acquisition activity. So we couldn't really get out there.
Andrew Nowinski: We very much look forward to getting back into a balanced capital allocation application or allocation and.
Andrew Nowinski: And we will do that with a mixed bag of accelerated debt paydown as well as opportunistic share buybacks given the different given the different factors that we use to make those decisions.
Andrew Nowinski: We're high cash flow generation Q.
Andrew Nowinski: Q2 keep in mind, we do have to have.
Andrew Nowinski: Have that elevated level in Q2 of tax payments, but outside of that very much looking forward to leveraging the cash flow generation that we will build and then allocating in a disciplined way.
Andrew Nowinski: In terms of the balance and how it will decide I would I would just say you know very much going to continue our balanced approach you see the balanced approach. We've had the last couple of years between opportunistic share buybacks and accelerated debt pay down and our plan is to continue that playbook as we look forward.
Speaker Change: Got it thank you.
Andrew Nowinski: Thank you.
Speaker Change: Thank you. The following comes in the second Calia with Barclays. You May proceed.
Speaker Change: And if I can sneak great hey, guys. Thanks for taking my Hey, Vincent Hey, Natalie Thanks for taking my questions here and congrats on closing moneyline.
Speaker Change: Yes. Thank you.
Speaker Change: Vincent for sure Vincent maybe for you.
Speaker Change: <unk> and <unk>.
Speaker Change: You touched on this in the prepared remarks, <unk> really brings a big network.
Speaker Change: Potential customers to cross sell to and maybe one question around that is how does that network may be changed the type.
Speaker Change: Of a potential subscribers that you can go after does that makes sense.
Yeah. It does.
Speaker Change: And if you don't mind me first step back on the strategy right. So we have a big platform cyber security cyber safety platform that we extended to almost all aspects of an online safe and confident digital lives and by.
Speaker Change: The World Digital award expands the first need for everyone to be safe and so we offered that then.
Speaker Change: Following our consumer demands we said okay. Now what are you doing that safe environment and you have your data that are protected you empower than controlling data what else can you do and obviously as we discussed.
Protecting you identity of course is next having a good digital reputation what do you do it that reputation you also maximize your financial.
Speaker Change: Potential and do best financial decision that that's how we entered the first organically inorganically.
Speaker Change: Into financial wellness and Thats, how I would look at it cyber safety is the foundation and then and then.
Speaker Change: Trust based solutions on top so the first view is to use the moneyline architecture.
Speaker Change: The engine they have developed the PFM features they have to embed that into the solutions and Canada for our current 65 million plus customers and cross sell into that installed base. So that's the number one focus you'll hear more about product and feature launch as we progress through fiscal year 'twenty six.
Speaker Change: It does evolve then followed that consumer needs. If you wanted into better financial this year and the second one.
That it's providing us a benefit as it gets it gets us the ability to improve moneyline itself in terms of offering they've been essentially a premium with a transactional revenue stream as you know, we're very strong into subscription customer retention and basically applying the.
Speaker Change: <unk>.
Speaker Change: Jen overall consumer Internet platform scarcity, one two the moneyline business and then the third one which is a little bit further down. The line is to offer the full lifecycle of our cyber safety and financial wellness offerings. So think about in the past we were only offering.
Speaker Change: Fiction and restoration of your credits monitoring system, if you want.
Speaker Change: And money lot of analyst offering you different.
Speaker Change: Banking.
Speaker Change: And investment lending solutions and not <unk>.
Speaker Change: Going to have the full spectrum from building new credits to leveraging your credits to then protecting it and then expanding it and and that full cycle in Q1 as the customer move from different cycles of their journey. We will have a we will be the trusted Brian whatever Brian's you dig to follow you in that digital.
So those three steps would be as we deploy <unk>.
Speaker Change: <unk> over the next few years and that's why we're not studies and this is a new chapter and we're excited by all of those opportunities I think.
Speaker Change: That truly reflects it.
Speaker Change: Yes, absolutely.
Speaker Change: That's helpful. Natalie maybe the follow up for you and kind of related to sort of that big customer base.
Speaker Change: Moneyline brings you've always been very thoughtful just around customer acquisition cost and sort of individual kind of customer economics, how does gummy line, maybe change that customer acquisition cost or how you think about that equation.
Speaker Change: I took it it makes it very very excited we just have so much opportunity ahead of us to take.
Speaker Change: Take the existing moneyline customers and that scaling base and that scaling business model combined with our growing customer population are growing <unk> are growing retention now bring them together in a synergistic way and we just have in an environment, where financial wellness demand has never been greater and so now we just have we have the <unk>.
Speaker Change: Opportunity to leverage all of the strength in our.
Speaker Change: Cyber safety business combine it with the money line assets like.
Speaker Change: Their proven model and their proven penetration and customer base of the financial wellness tools, they're proven AI recommendation engine.
Speaker Change: And just even further expanding us into customer lives maybe earlier in their financial journey and so it just allows us even more breadth and depth more opportunity a wider range of portfolio of products to go to market with and in just such a data driven way with a recommendation engine on top of all of the <unk>.
Speaker Change: Data that we have for our existing customers. The worlds are always there quite frankly, and so with that will come efficiencies in terms of the dollars that we can free up to invest in the capacity to drive that growth, yes, the efficiencies should go along with it.
Speaker Change: We typically say cash is king here its volume is king and so we'll leverage that volume from a margin appreciation or accretion perspective always trying to free up as much capacity as we can to invest behind that growth, but when you think about the actual part we should be seeing efficiencies without additional expansion.
Speaker Change: Okay.
Speaker Change: Very helpful. Thanks, guys.
Speaker Change: Thanks, Okay. Thank you.
Moderator: The next question comes from Tomer Silberman with Bank of America You May proceed.
Tomer Silberman: Hi, guys.
Speaker Change: I appreciate the comment earlier that you said that the business remains resilient, despite some macro uncertainty but.
Speaker Change: I wanted to ask as you look at the remainder of the year, especially in the second half of the calendar year, where the tariff pause.
Speaker Change: Kind of goes away.
Speaker Change: Are you seeing or what I should say look that's what what signs of demand are you seeing that gives you confidence that the business remains durable.
Speaker Change: And maybe the second part to that question as we think about money lie and is there any concerns that that could be more.
Speaker Change: Macro sensitive versus other parts of your business.
Speaker Change: Hey, Kevin This is Vince and I'll take that one and you and I have an October we did a lot of study of all of our business. The resilience of our business the curve during difficult moment Nauseated was 2088 Covid period.
Speaker Change: And frankly with a high level of subsequent mature and a high level of auto renewal. So our business model. If you want us extremely resilient in an environment, where the threat landscape donkey continues to be as active as ever.
Speaker Change: We don't see a direct correlation to the overall macro environment I would not see where immune obviously it serves with it but the demand is there for frankly, a cyber safety product that is in my opinion very cheap in terms of giving you full confidence to serve.
Speaker Change: In a secure way on the digital world.
Speaker Change: So from that perspective.
Speaker Change: We feel confident.
Speaker Change: That we have a good grasp on our on our business we exited March.
Speaker Change: On a strong note as you've seen by our results, but March was actually the strongest month within the quarter.
And frankly April is in line to that so so from that perspective, we feel good when you add multi line.
Speaker Change: Maybe you introduce a little bit more volatility, but again.
Speaker Change: Remember that the number one.
Speaker Change: Opportunity in this transaction is to offer those features to our current customers that have asked for more PFM and marketplace.
Speaker Change: Features and I think we feel good about that view and then really the environment gets a bit more sense frankly people are will need to make even better financial decision in a price environment.
Speaker Change: I think thats, where the multiline offering fits right in that in that overall view.
Speaker Change: Got it. Thank you maybe just a quick follow up.
Speaker Change: Given your experience maybe in past market downturns is there anything that youre doing in terms of go to market or any marketing program to kind of get ahead of a weaker macro.
Speaker Change:
We all know it's bunch here around the table I can tell you that so we're always looking at okay. What can <unk> do we have ethane when you look at the diversification of our business whether that is geographical diversification.
Speaker Change: Product and needs that we address diversification or channels diversifications or marketing channels diversifications.
Speaker Change: We feel really really well balanced to be able to play in leverage and <unk>.
Speaker Change: Opportunity, we see in the market, while we have a very good grasp on our business being a big data driven.
Speaker Change: And I'd say I'd just supplement that are complement that with we keep us that we keep our customer right at the center and so whether it's using our products as customers understanding what macro or.
Speaker Change: Or any kind of economic factors that our customers are facing and navigating through.
Speaker Change: We really challenge ourselves to keep that customer at the center, whether it's through our products, whether it's the way we talk to them engage with them more service them or what they're going through and we have such a diverse set of product solutions and now such a wider breadth.
Speaker Change: Solutions that we can go to market to help our customers. That's what we're going to stay committed to no matter what comes our way and what comes our customers. When we have a way to go to market and figure out ways in solutions and products that can help them through that.
Speaker Change: Got it thank you very much.
Speaker Change: Okay. Thank you that's it.
Speaker Change: Reminder, if you'd like to ask a question. Please press star one.
Roger Boyd: The next question comes from Roger Boyd with UBS you May proceed.
Roger Boyd: Great. Thanks for taking the questions and again, congrats on a strong quarter and closing the acquisition.
A nice quarter of subscriber.
Speaker Change: You've got a couple of questions from investors around Google AI overviews might impact your business like I'd love to hear about how youre thinking about this potentially.
Speaker Change: In fact in your SCO lead Gen strategy, any assumptions, you're making around click through rates of customer acquisition costs or anything going on outside of the region.
Speaker Change: Yes, maybe I can take it first so so first of all as you know right we have a very diversified.
Speaker Change: Our reach to market in Q1, and whether its desktop or online.
Speaker Change: It's on long form or short form marketing, but there is a lot of diversification and we almost clean every dimension that you could think of.
Speaker Change: Definitely AI is changing the landscape we have not seen.
Speaker Change: And the current immediate change and it's all about contextual marketing adapting as you go and trying to make sure you're right where the context you swipe. So so maybe AI will bring maybe some efficiencies in different ways of doing certain things.
Speaker Change: But but we state we see impacts with how the market moves we're not too worried about it is actually it might even be an opportunity.
Speaker Change: Good good to hear and then maybe just to circle back to indirect revenue.
Speaker Change: Nice acceleration there.
Speaker Change: As you noted strong.
Strong traction with employee benefits, but any any guardrails for how we should be thinking about indirect growth.
Speaker Change: Initial outlook for fiscal 'twenty six.
Speaker Change: Anything to keep or keep an eye on in terms of potential revenue parameter around open enrollment and then.
Speaker Change: I think he also brought in a new partnership leader are there any specific changes, they're making or new opportunities that you're thinking about for fiscal 'twenty six thanks.
Speaker Change: Okay.
Speaker Change: Yeah, our indirect channels just for just to kind of circle.
Speaker Change: Circle round is about 10% share of our revenue 15% growth for the quarter very very happy to see that that growth came from broad based we've got a lot of channels that make up the indirect revenue.
Speaker Change: Saw broad based growth across all of them are the.
Speaker Change: Our leaders I always try and call out the bulk of the growth is going to be coming from employee benefits and telcos. They are not the only ones that grill, but those are the those are the heavier contribution to the growth and that's a pretty consistent growth profile.
Speaker Change: It's a good trend that we've seen the acceleration employee benefits was exactly what we talked about during the script, which was we do see a just a change of behavior.
Speaker Change: We see the investments that we've put into building those pipelines for multi years now whether it's through our direct sales or its through the brokers that we use in the employee benefits channel just the quality and the effectiveness of those sales channels have really built a very very profitable very robust pipeline.
Speaker Change: And we see we see the fruit coming from those labors.
Speaker Change: And then from a telco perspective, we just continue to have those strong partnerships increased.
Speaker Change: The expansion in with that expansion is counting increased demand. We have agreed a new sales leader over the overall partner channels. He brings a ton of expertise in the market a ton of experience and with any new leader.
Speaker Change: They have the opportunity and the privilege to have a clear eyed approach and so we very much have very high expectations for.
Speaker Change: So the indirect channel under his leadership, but keep in mind too, let's go back to that.
Speaker Change: In our fiscal year 2023, AIG look forward, we said that we wanted to scale our high single digit rate of growth in overall partner of course, we're not limiting ourselves to that will take a scaling double digits all day long.
But in terms of as we look forward, especially in the next year.
Speaker Change: We're looking to a sustainable profitable high single digit rate of growth relative partner.
Speaker Change: Okay.
Speaker Change: That's really helpful. Thank you both.
Speaker Change: Thank you.
Speaker Change: Final question comes from Dan Bergstrom with RBC you May proceed.
Speaker Change: Hey, it's Dan Bergstrom for Matt Hedberg, Thanks for taking our questions.
Speaker Change: Congrats on the Moneyline close I guess, maybe on those two new segments sounds like we're going to get bookings in operating margins.
Speaker Change: Are there any other kpis for for those trust based solutions that that we should be thinking about anything that maybe moneyline brings in that was either maybe disclose historically, but it makes sense to disclose from time to time.
Speaker Change: Let me take that one from a business perspective, and that's how you want to supplement she can but.
Speaker Change: We very strong making sure we align how we talk to you about the business is also how we of course shared our results with our board spend how we drive internally and it's how we organize around the consumer needs at the core core core.
Speaker Change: That's a super important one.
Speaker Change: We look at our business and the strategy as I mentioned is looking at that cyber safety platform as the opportunity to then upgrade you needs to then wanted to manage your identity reputation and all the way to financial wellness.
Speaker Change: That's how we've organized the innovations and and the approach or do we to the the market.
Speaker Change: Communications, our marketing and go to market activities.
Speaker Change: And so when reporting document for you to better understand because we see different dynamics and we see different opportunities in those two segments.
Speaker Change: Operationally, we will supplement with some some kpis, we're still refining exactly how we're going to position the kpis. So.
Speaker Change: I'm not sure I want to hit on the core already say exactly what we will report, but we will share more on our Q1 results at the end of July early August and we'll make sure that every investors understand how we look at the business and how those Kpis report the same otherwise they wouldn't be part of the classic keep the RWC that you would probably have in mind on the core business.
Speaker Change: That's great very helpful. And then the presentation talk to stronger growth here in the U S.
Speaker Change: Any thoughts or could you drill down into that stronger domestic growth.
Speaker Change: I would say look I, we saw broad based growth across the different product lines and the global markets.
Speaker Change: So we saw you know.
Speaker Change: Mid single digit rate of growth in the U S.
Speaker Change: Was propped up by a couple of quarters ago, we had that MPD breach really brought in a lot of lifelock awareness additional lifelock customers those identity offerings and the scaling of the identity offerings.
Speaker Change: As well as the increase of membership adoption all is helping to drive the growth in the United States as well of course, the membership adoption are helping across the across the world.
Thank you.
Speaker Change: Everyone. Thank you for and this concludes our conference call today. Thank you very much for joining me.
Speaker Change: You have been removed from the comp goodbye.
Speaker Change: This concludes today's conference call. Thank you for your participation you may now disconnect your line.