Gen Digital Reports 14% Revenue Growth

Gen Digital Inc. has recently released its 10-K report, providing a detailed overview of its financial performance for the fiscal year ended March 31, 2024. The company, formerly known as NortonLifeLock Inc., is based in Tempe, Arizona, and offers cyber safety solutions for consumers across various regions globally. These solutions include security and performance products, identity theft protection, Dark Web monitoring, VPN solutions, and online reputation management.

In fiscal 2024, Gen Digital Inc. reported net revenues of $3.812 billion, marking a 14% increase from the previous year. This growth was primarily driven by a $388 million increase in sales of consumer security products and an $88 million increase in sales of identity and protection products. The acquisition of Avast also contributed $419 million to the revenue during the fiscal year.

Key performance metrics for the company's solutions showed positive trends, with direct customer revenue reaching $3.353 billion and a direct customer count of 39.1 million at quarter-end. The average revenue per user (ARPU) increased to $7.25, and the retention rate stood at 77%.

The geographical breakdown of net revenues showed that the Americas accounted for 65%, EMEA for 24%, and APJ for 11% of the total revenue in fiscal 2024.

Cost of revenues increased by 24% in fiscal 2024 compared to the previous year, primarily due to higher amortization of acquired intangible assets, increased revenue share costs, and higher payment processing fees resulting from higher billings.

Operating expenses also saw an increase, with sales and marketing expenses rising by 7%, research and development expenses by 6%, and general and administrative expenses by a significant 111%. This increase in general and administrative expenses was primarily attributed to legal accruals related to litigation cases and the amortization of intangible assets from the Avast acquisition.

Non-operating income (expense), net, increased by $240 million in fiscal 2024, primarily due to higher interest expenses associated with borrowings and an increase in loss on equity investments.

The effective tax rate for fiscal 2024 was -34%, showing an increase from the previous year due to a one-time income tax benefit in fiscal 2023 and an income tax benefit from operational and legal entity restructuring in fiscal 2024.

In terms of liquidity and capital resources, Gen Digital Inc. believes that its existing cash and cash equivalents, together with cash generated from operations and amounts available under its Revolving Facility, will be sufficient to meet its working capital needs and support ongoing business activities for at least the next 12 months.

The company's cash flows from operating activities significantly increased in fiscal 2024, primarily due to an income tax refund related to the filing of its fiscal 2023 tax return and cash collections from revenue attributable to the Avast acquisition.

The market has reacted to these announcements by moving the company's shares 1.5% to a price of $25.42. Check out the company's full 10-K submission here.

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