Good afternoon, everyone. Thank you for standing by. My name is Lauren, and I will be your conference operator today. Today's call is being recorded. [Operator Instructions] At this time, for opening remarks, I would like to pass the call over to Jason Starr, Head of Investor Relations. Please go ahead.

Thank you, Lauren, and good afternoon, everyone. Welcome to Gen's Second Quarter Fiscal Year 2026 Earnings Call. Joining me today are Vincent Pilette, CEO; and Natalie Derse, CFO. As a reminder, there will be a replay of this call posted on the Investor Relations website, along with our slides and press release. I'd like to remind everyone that during this call, all references to the financial metrics are non-GAAP, and all growth rates are year-over-year unless otherwise stated. A reconciliation of non-GAAP to GAAP measures is included in our press release and earnings presentation, both of which are available on our IR website at investor.gendigital.com. We encourage investors to monitor this website as we routinely post investor-oriented information such as news and events and financial filings. Today's call contains statements regarding our business, financial performance and operations, including the impact of our business -- on our business and industry that may be considered forward-looking statements, and such statements involve risks and uncertainties that may cause actual results to differ materially from our current expectations. Those statements are based on current beliefs, assumptions and expectations as of today's date, November 6, 2025. We undertake no obligation to update these statements as a result of new information or future events. For more information, please refer to the cautionary statement in our press release and the risk factors in our filings with the SEC, and in particular, our most recent reports on Form 10-K and Form 10-Q. And now I'll turn the call over to Vincent.

Thanks, Jason. Hello, everyone, and thank you for joining us today to discuss Gen's results for the second quarter of fiscal year 2026. This was another quarter of outstanding execution, exceeding our expectations as we capitalize on our global user base and compounding data advantage. We delivered record revenue and earnings, continued to drive strong customer and bookings growth and are making clear progress with our portfolio transformation. This performance demonstrates the strength and resilience of our business, underpinned by a high-margin subscription model now expanding into faster-growing adjacencies in secure financial wellness. It also reflects our strategic position as the most trusted partner in protecting digital lives, bringing confidence in a complex and increasingly AI-driven world. Before diving into the numbers, it is important to recognize the environment in which we operate. Consumers today face a rapidly evolving threat landscape. They face a new generation of cyber threats like AI-powered phishing, deepfakes, inner circle impersonation and identity theft driven by large-scale data breaches. These threats are increasingly personalized, sophisticated and harder to detect. The financial impact is real and rising. Cybercrimes against consumers are projected to exceed $15 billion annually in the U.S. alone, growing at double-digit rates. Meanwhile, financial wellness is a very real and prevalent consumers' need. 2/3 of Americans live paycheck to paycheck, often stitching together their financial lives across multiple digital platforms beyond traditional banks. In this environment, risk and financial wellness are deeply interconnected. When people live with little financial buffer, an incident of identity theft, a fraudulent charge or even a scam can quickly upend their finances. The stake go beyond security and protection, they are also about trust and well-being. People are not just searching for another financial product, they're seeking for a trusted and reliable partner, one that can secure their…

Thank you, Vincent, and hello, everyone. For today's call, I will walk through our Q2 results and also provide some additional color on our performance metrics. I'll then conclude by providing our outlook for Q3 and fiscal year 2026. I will focus on non-GAAP financials and year-over-year growth rates, unless otherwise stated. I will also include commentary on our pro forma growth, which include MoneyLion's results from the prior year for comparative purposes. Now on to our results. Q2 was another strong quarter for Gen with better-than-expected results. On a reported basis, Q2 bookings and revenue were over $1.2 billion, up 27% and 25% year-over-year, respectively. On a pro forma basis, Q2 revenue grew 10%, consistent with last quarter. And excluding MoneyLion, Q2 revenue grew 5%, which is consistent quarter-over-quarter performance and in line with our commitments. In our Cyber Safety segment, bookings was up 5% and revenue was up over 3% with broad-based growth across channels. With our expanded scam protection features and cyber safety AI assistant, helping consumers outpace emerging threats, this has translated into strong sales of our leading Norton 360 comprehensive membership offerings and reflected in our accelerated bookings growth this quarter. More partners are also adopting our highest tier all-in-one cyber safety memberships and promoting our bundled solutions through their channels. As just one example, our employee benefits partners already see the expanded value we provide through Norton 360, and this channel continues to grow double digits with a robust pipeline ahead of the annual enrollment period. More and more consumers understand the need to have full suite with identity protection, and we see it in our results. Additionally, across our go-to-market channels, we are leveraging our data and AI capabilities to drive more effective targeted campaigns through our in-product messaging platform, upselling more customers…

[Operator Instructions] Our first question today comes from Rob Coolbrith with Evercore ISI.

Congratulations on the strong results. Just wondering, first of all, if you could maybe give us your view of the macro environment and the health of the consumer right now. And if we were to see a more significant downturn, how you'd expect that to play across the 2 segments of the business. And then also I wanted to ask on the transition. Sure. Please go ahead. Sorry.

Okay. You asked a question after that. Sorry about that to jump. This is Vincent. Thanks for the congratulation. We definitely had an outstanding quarter, and I would add another one. So let's talk about the macro environment. We have 2 segments, right, security and privacy and then trust-based solution really anchored around the secure financial wellness. I'll start with the security and privacy. Obviously, you've seen in our Q2 Threat Report that we just published last week, continued increase in complexity of the threat landscape, targeting consumers in various forms, increased use of AI. Just last quarter, we blocked 140,000 websites, all designed by AI but with a very high level of credibility and precision. So all of that, if you want, will continue. We believe the consumers for a very small membership fee, I would say, can protect against thousands of dollars lost through cyber criminals. When you look back at historical during downturns or upturns, we have not seen too much correlation to our subscription or security revenue streams. On the secured financial wellness, we now have millions of our customers connecting their bank account for monitoring, alerts. We do offer, as you know, first-party financial products from liquidity offering to credit building to high-yield savings accounts. We've seen a very strong growth again this quarter under personal financial management offerings here, slightly under 50%, but very strong. We have not seen a change in patterns in consumption over the last few months, and we do not see it here as we speak so far. Generally speaking, when interest rates continue to trend down, normally, there's actually renewed activities and refinancing and other activities that supports that demand. On the second aspect of our secure financial wellness, it's our marketplace. Here, we've really seen the benefit of coming together with Gen, millions of consumer board onto the marketplace. We're just at Money20/20 conference and a lot of very strong interest from financial partners to join the Engine marketplace by Gen. And I think we'll continue to have that opportunity to offer for consumer, whether the economy goes up or down, I think the need for the best financial decisions will remain and be strong.

Great. And thank you for all the detail on the LifeLock integration from the experiences you're bringing to bear between LifeLock and the secure -- sorry, financial wellness. But just if you could maybe talk a little bit as you go down this cross-sell journey, maybe about the frequency of member interaction with the LifeLock products, particularly around they do identity unlock as they're shopping for financial products. Maybe can you just talk a little bit about the mechanics of the cross-sell and some of the unique opportunities there.

Absolutely. So obviously, revenue synergies is a long process, MoneyLion fully integrated from a back-end integrated from an R&D perspective. We're finalizing the integration of the data to offer an enriched experience. And now we're really unlocking the revenue synergies. There are 2 immediate components we're focusing on. One is Norton Money with EWA features going into employee benefits, but also Norton Money as a PFM tool for our Norton installed base. That's one. And the second one is the embedded, I would call it, curated marketplaces, focusing at the needs of the consumer. LifeLock is the first immediate case. Since we brought MoneyLion on, we've really enriched the marketplace with a credit card catalogs or offerings, if you want, for prime customers, and we're embedding that into LifeLock. And as you know, LifeLock, it's not only monitoring your credit, it's really monitoring and managing your financial life at moments of truth, you check your credit, you check your financials, when you're going to go for a purchase and/or if you want to improve your credit level in order to do a purchase that you intend to do today. And so at that point in time, if you want in an embedded experience, we now have that marketplace embedded into the LifeLock applications. It's actually very positive results, although it's on a small base. And we have a long transformation to drive, as we've already discussed in prior quarter and making progress on it is really moving an application that was essentially passively giving you peace of mind to a more engaged application in which you come and validate and try to improve your journey, and we see good progress overall in that trend as we bring new tools such as the Credit Builder tool or now this curated marketplace.

Our next question comes from Roger Boyd from UBS.

Great. And congrats also on the strong results. I wanted to touch on partner revenue, which was, again, very strong and I think maybe accelerated organically, but you did note 50% growth in MoneyLion Engine and double-digit growth in employee benefits. Just any thoughts on how we should think about the trajectory of partner revenue over the back half of the year, anything to be mindful of from a seasonality perspective, particularly with MoneyLion Engine and then the employee benefits channel into open enrollment? And I have a follow-up.

Yes. I'll take that one because I think it's less financial and more structural. So 2 years ago, when we did the Analyst Day, we said, hey, we have a big opportunity in our partner organizations. At the time, it was 90% direct, 10% partner. As we're expanding the portfolio, we said, in the long run, we think it will be more of an 80-20 and you're going to see partner growing faster than direct. And it makes sense because many of our services are embedded into partner views and then we had the view -- this long-term view of bringing this marketplace, adding more value to our consumer. And what you see now 2 years later, 8 quarters later, since we laid out that strategy, it's finally taking roots, quarter in, quarter out. You may have a little bit bigger gap or a smaller gap. But I think you'll continue to see partner revenue outgrow the direct revenue, as we continue to contemplate bringing to our consumers adjacent values that we may not even manufacture ourselves because we neither are a bank or we may not be a legal firm, but that all fits together around supporting that financial wellness overall. And no, I would not predict specific seasonality quarter in and quarter out that you see every year. Now obviously, you can always the growth rate change quarter in, quarter out, but similar trends will continue moving forward.

Awesome. That's helpful, Vincent. And then Natalie, just on free cash flow. It looked like it was actually pretty robust after backing out the tax payment. I know you don't guide to it, but any color you can give just on how you think about free cash flow trajectory and as that continues to improve? I know you touched upon it in the remarks, but any update on how you think about capital allocation between debt paydown and share repurchase?

Yes. Thanks, Roger. Our free cash flow generation will continue to stay strong. It's, yes, seasonally high in Q2. And then, of course, we have that timing element that hurt a little bit more in Q2 than norm as well. Yes, as we accelerate rates of growth, as we integrate and we continue to scale, we're going to continue to operate in a disciplined fashion. We've laid out our margin expectations for each of the segments over the long term. And we'll continue to deploy our capital in a disciplined and balanced way across accelerated debt paydown but also share repurchases. And then we just haven't -- with the timing of the MoneyLion deal over the last, I would say, 3 to 4 quarters and when we were able to get out in the open period, we just didn't have the opportunity to do much share repurchase. But as we look to the back half, we'll get back to being much, much more balanced across accelerated debt paydown and share repurchase.

Our next question comes from Dan Bergstrom from RBC.

It's Dan Bergstrom for Matt Hedberg. So you highlighted higher engagement on Norton 360 in your prepared remarks. You also talked to some scams as providing some tailwind there. Beyond that, maybe what are some keys to the momentum in upselling customers into those higher-tier Norton 360 memberships?

Very good, Dan. Thanks for joining. So to remind people, Norton 360 is our all-in-one suite set of plans, if you want, from the Norton brand. We have the same on Avast One from the Avast View. And our goal has been to move more and more people to membership. You pay a fee and with that, you'll get our new features and get peace of mind in this environment where cyber threat is pretty dynamic. And then depending on the plan, all the way to all-in-one, including the LifeLock identity protection, then you're fully protected. We still have the majority of our customers on the Norton 360 lower and mid-level tier, not including the identity. We have, at the beginning of the year, moved Norton Genie, our anti-scam into that known 360 platform and have evolved Norton Genie from a pure AI-driven anti-scam to becoming really the AI cyber safety assistant. And we've now just launched into 40 new countries in 40 languages, that feature. That feature is at the core of getting our applications on our platform more engaging where you can ask your questions and can automatically also become -- or ultimately become your agent connecting different privacy and security features at the moment it's needed. We have seen some traction on the upper level of the plan, Norton 360 with Norton Genie Pro, which is an upgraded feature that provides not only the security side, the AI assistant but also the insurance, the voice block, the text block and so a much more enriched experience, full private and full protection. And we've seen traction with that. And then we're now just launching Norton Money, which will be the alternative to go and move to a higher plan with credit monitoring, financial insights and a curated marketplace as an alternative path to the upper plan. So as I mentioned in my remarks, continue to see very good progress towards, a, the membership; and b, the engagement with the platform.

That's great. And then I know paid customers is the new metric, but the old KPI around direct to cyber safety customers was in the slides, up 400,000 quarter-over-quarter. Understanding there's some rounding there, but that's impressive, but at the upper end of what we'd expect historically. And again, I know it's a seasonally strong quarter here, but maybe what was some -- what was behind some of the strength on the customer addition number?

Yes. I would say now it has been many, many, many quarters. I don't remember how many, maybe 7 or 8, that we've been in the range of, I would call it like 250 to 400. So you're right, it's in the upper of the range, but we basically see it on the high side of the range, in line to our expectations as we've been driving increased engagement, more channel to acquire customers and improvement on the retention. And I think it's more progress across all of the dimensions that reviewed. Now as you know, our customer base is evolving. We see it in 2 categories. One is a subscriber-generated revenue, as Natalie mentioned, and the other one is a product usage-generated revenue. We see a very strong increase across all dimensions, and our goal will be to continue to increase the subscription. We did provide the old metric just for people to understand and assess the health of our core Gen the way we looked at it before we split into 2 segments, which I think will be useful for investors.

Our next question comes from Saket Kalia from Barclays.

Congrats on another raised guide.

Yes, thank you, Saket.

Vincent, may be for you, absolutely. Vincent, maybe for you, just kind of picking up off that thread. You've talked about sort of the potential for new business models in the MoneyLion base. I mean it seems to be doing very well, right, just as it is. But I think that there's such a subscription DNA at Gen, you've kind of talked about that as a possibility. Without preannouncing anything, how do you sort of envision something like that looking, if that makes sense?

Yes, totally. So just to put in context, maybe some investors don't have the full history that we've had. Since you know us very well and cover us for a long time. When we acquired MoneyLion, most of the revenue, if not all of the revenue was driven by what we call product usage revenue or product usage-derived revenue, which is essentially transaction-based. And many customers like that. They use the product for free. And when they transact, a very small portion of the transaction gets booked as a fee, and that's how they make the money. You know what they say, Saket, don't break what's working. So we're trying to make sure we manage very carefully because it's really working for the MoneyLion installed base and it's working for the MoneyLion customer and the team knows how to bring innovation into that environment. We will maintain that. In addition, and that's why it's complementary, we say that when you come to a little bit more premium customers, they like to have a subscription, they pay and then they have access to many different features à la carte or as much as they want, and we're building those subscription views, which may include, not only the ability to use the PFM tool or to consume some liquidity product or to do Credit Builder for their kit or having access to actually the investment features on the platform. And we know that's more prone to our type of customer base. And so the features are there, and it's a question of balance on how we're going to drive from a marketing perspective and where we're going to have membership versus transaction-based revenue. And over time, you're going to see that progression. As you know, just to complete my answer, we always said that a shift, a full shift from transaction to subscription will lead to a shorter gap in the -- or a gap in the short term and a longer value over time. And we're hopeful to be able to manage that transition towards more subscription without too much impact on our overall, knowing that it's all about driving long-term customer value here for maximizing that CLV.

Yes. Absolutely. Natalie, maybe for my follow-up for you. I'd love to maybe just touch on the profitability of the MoneyLion business. I think in the presentation, it showed about a 20% operating margin. That, of course, is fantastic if it's supporting 50% top line growth. But maybe the question is, how do you think about the margin journey that we could see in MoneyLion? And maybe remind us how that sort of 30-60 dynamic that we talked about at our session a couple of months ago sort of plays into that journey?

Yes. Thanks, Saket. Good to hear from you. Yes, MoneyLion margin, that's where we started, approximately 20%. Keep in mind, as we blend MoneyLion with Trust-Based Solutions and even just integrate it with Gen overall, we have achieved the cost synergies that we have laid out for ourselves as we integrate them as an acquisition, just high level, especially the back office and some of the other -- the fixed costs that we could strip out of the business. So that's done. We also have revenue synergies that we're going after. You heard them peppered through the messaging today and our slide where in our day that we did around MoneyLion back in September. There's so many revenue synergies to go after. It requires investment to drive that growth. And so we'll continue to stay committed to that. So that points to the current margin rate today driving that 50% growth rate. And then as we look forward, of course, yes, the mix is definitely there and is an opportunity for us to balance. But keep in mind, we want all parts of the 30, 60, 90. They provide us different layers and levels and types of value and access to different customers. So if you think about the 30% margin on the marketplace, that's going to fuel customer acquisition and really give us just a ton of access to different sites, lots of data that we can do deep data analysis and customization, personalization. And then the first-party products at 60% and then all the way up to the retargeting of the 90%, it's a very, very healthy model. It's a flywheel effect. But the quarter in, quarter out, what percentage of the business is going to come from different segments is going to be mixed. And as we move forward, we're going to find that right balance for the business, all with the appetite of healthy, sustainable accelerating rates of growth as we integrate across Trust-Based Solutions with all of the different services that we're innovating on.

Our next question comes from Tomer Zilberman from Bank of America.

Maybe going along the same track of the MoneyLion, right? You had 2 solid quarters of MoneyLion growth, 45% to 50%. You previously guided it to grow 30%. I think your guidance now calls for an exit rate of 30%. And -- just wanted to get more color why we wouldn't see these elevated growth levels sustain into the back half? And apologies if I missed in your prepared remarks, but can you pair that with commentary around the business model transition you're expecting in the second half? And I have a follow-up after that.

Absolutely, yes. So I'll take that one first. So MoneyLion, when we acquired and closed the deal in April of this year, it's not too long ago. It feels like a long time, it was only 6 months ago. They were growing at 25% to 30% at about 15% operating margin. Since the beginning of this year and as we integrated and started to work on various different aspects, including marketing and leveraging our customer base, et cetera, we've seen that elevated performance level, as you mentioned, 45% in the quarter before and 50% this quarter, while we improved the operating margin over 5 points, now over 20%. We are not forecasting moving forward 50%. We do believe there may be a little bit of a boost of coming together and we feel it's more prudent to base maybe linking back to Saket's question at around a 30% growth rate, 20% margin, if I redefine another new rule and call you the Rule of 50, that's what it would be and managing the business along those lines. As we see room and acceleration, we'll definitely capture it in the marketplace. So be assured of that. And there are different ways of capturing it, including moving more transactional customer, maybe customer we can identify as not having a strong recurring pattern and moving them to a membership or having a chance to offer different values in a bundled membership structure, which is really most of what we are planning to do over time, while we maintain that Rule of 50 growing at 30% at the 20% margin. And then along the line, every quarter, we learn more, we'll understand better the trends and that's where we'll be. What is not implied into our current exit 30% growth rate is any significant macro level effect because, as I mentioned, in the prior answer, we do not see a change today of patterns or behaviors from the millions of customers that are plugging into our platform.

Got it. And maybe as a follow-up, if I move towards the core Cyber Safety business. I know someone addressed earlier that you grew your customers, 400,000 sequentially. But if we look at the growth trends, they diverged a little bit from last quarter. Last quarter, if I have it right, revenue and bookings grew 4%. This quarter, revenue was 3%. Bookings was 5%. What drove that slight delta? And do you think that the 400,000 adds this quarter and the better bookings growth can translate into better revenue growth over the next few quarters?

Yes. Tomer, it's Natalie. So keep in mind, revenue is going to reflect the trailing 12-month bookings. So if you go back and look at the bookings as reported, that's where you would see the 3%. Also keep in mind, we're only rounded at the whole numbers. When you get into the decimals, it's sub 2 points. So it's really not that different between bookings rate of growth and revenue like you see 2 points on the surface. And yes, as we look forward, it's not just the customer count acquisition. It's the balance across the segments, it's the innovation, it's the scale, it's AI coming through. It's more personalization. It's more customization through IPM, Cross-sell, upsell are still alive and well. Partner mixing in, there's just so many factors even when you look at both on a pro forma basis but even excluding MoneyLion, the core business has so much opportunity. And we are just driving all of the growth levers that we possibly can with all of the innovation that's coming to market. So I would say, as you look forward, we're focused and just look at the full year guide pointing to on a pro forma basis, it's a high single-digit rate of growth, and that's what I would point you back to.

Our next question comes from Meta Marshall from Morgan Stanley.

Great. Maybe as a first question, you noted the AI impact kind of bringing 20% efficiency on the customer support. Just wanted to get a sense of other ways in which you guys are utilizing AI and which you're finding traction within the business? And then just as a follow-up question, just any OBBBA impact on tax rate that we should be expecting?

Okay. Let me take the one on the use of AI. So all of our AI initiatives are split into 2 buckets. One is to use our, call it, data platform to build AI-native features of product from Norton Genie to Spark to others, Norton Browser that you see there. I leave that on the side because that's not your question, but it's our main effort in trying to bring a truly AI-native portfolio, even all the way thinking in our lab of not only how we protect against AI-generated scams or threat, but how will security look like in the world of agent-to-agent interaction where you as a consumer may ask your automated agent to do financial wellness transaction on your behalf and then interact in the world of agent, how does privacy and security work in that environment. So super, super important topic. And then we have the second bucket, which we call transforming Gen into an AI-first company, which is really changing our workflows, not immediately jumping into AI platform or tools, but changing our workflows to then being able to automate and where it's needed, using AI to generate things. Obviously, in support and services, we're further along. The tools and the processes in the market are more mature, which today have roughly half -- a little bit less than half of all of our contacts fully contained into an AI environment, whether it's one or multiple bots. And that has generated significant savings which we have reused to really build our data approach or data platform to our business. I mentioned marketing. Marketing is probably the second to R&D, I'll talk about R&D in a minute, function that we're transforming. Marketing, really, we combine everything from upper funnel or branding all the way down to…

And then I think you had a follow-up question on the One Beautiful tax bill?

Yes. Just any impact of tax rate that we should be thinking of?

So our tax rate is long-term focused. And so the 22% that you see in our non-GAAP results is assumed in the guide as well. So the Beautiful Bill just helps with cash flows in terms of cash taxes in the short term. In the long term, it's -- there's no material change. So we don't really influence that or we don't include that change in the long-term tax rate expectations.

Our final question today comes from Joseph Gallo from Jefferies.

As you think through the cross-sell opportunities between the MoneyLion and the Gen Digital basis and vice versa, which ones seem to be gaining the most traction early on? And then are there any more go-to-market efforts left to implement to accelerate?

Yes, very good. So we are at the early stage. So I definitely would say, yes, we have a lot of room to accelerate. The current results you see here is on the merit of the core business on their own, each one of them and then maybe a core platform of data and operations. But we haven't really delivered yet the value of bringing everything together. The most natural one and more immediate one is really the amendment, if you want, of financial insight and financial options into the LifeLock app. That's where originally, maybe we had discussed that in September, we had the initial ask for financial wellness, sorry, insights and advice were coming from. That's how we started that project organically and then led to the acquisition of MoneyLion. We're now embedding that and I think it's going to take traction. We're very careful. We're very creative, if I can say. We're not doing blasting marketing. We know that our customer in LifeLock will benefit from that insight and those new options, but we're following the demand. We're not trying to do a forceful marketing campaign or inside app that could be very annoying. So preserving the peace of mind is key, and we'll drive at that space. The second one, obviously, is bringing Norton Money -- sorry, money into Norton as an alternative to identity into Norton or in full combine, of course. And the most immediate one is MoneyLion features into our employee benefit channel that represent probably the best channel on selling the entire portfolio and having traction on all dimensions. We are about to launch that. Of course, in employee benefit channel, you're going to have to have the time to onboard the new employers, then go for the onboarding view and then only you'll see the results. So the result will be delayed, but the traction and the early discussions are extremely positive. So it's only the beginning of the journey, I would say, on the revenue synergy side.

Great to hear there is more to come. And then just -- I know you called out a consistent macro, but Americas has been pretty consistently strong. Is there anything to call out on the other geos?

Actually, you're right. We haven't talked too much about the other geo. I was just discussing that with Natalie and Head of Corporate FP&A yesterday reviewing the results in Europe. They've been very strong, positively surprised by how broad-based our growth rates have been. U.S. first, then you know for a while, we had Latin America leading the way. Right now, for the last 2 quarters, we've seen a lot of strength coming out of Europe, and we haven't reintroduced financial wellness yet in Europe. So that's talk about more to come over the next few quarters and years. We really feel excited about all of the levers we have at our disposal, if I can say, to drive that long-term value for our customers.

Thank you. That is the end of the Q&A session, and this concludes today's call. Thank you for joining, everyone. You may now disconnect your lines.