Gen Digital Q3 Earnings Surpass Expectations, Revenues Rise Y/Y

Gen Digital Inc. GEN reported third-quarter fiscal 2026 results, wherein both revenues and earnings beat the Zacks Consensus Estimate. Gen Digital reported non-GAAP earnings of 64 cents per share, which beat the Zacks Consensus Estimate by 1.6%. The figure improved 14% year over year.

In the trailing four quarters, GEN’s earnings surpassed the Zacks Consensus Estimate thrice, while matching once, delivering an average surprise of 2.9%.

Gen Digital’s first-quarter non-GAAP revenues came in at $1.24 billion, which rose 25.8% year over year and beat the Zacks Consensus Estimate by 1.07%.

GEN’s Q3 in Details

Gen Digital’s Cyber Safety revenues amounted to $819 million in the fiscal third quarter, up 2.5% year over year. Revenues of its Trust-Based Solutions segment increased 125% to $421 million. Direct Customer revenues rose 18% year over year to $1.03 billion, and Partner revenues improved 87% to $215 million.

Gen Digital Inc. Price, Consensus and EPS Surprise

Gen Digital Inc. price-consensus-eps-surprise-chart | Gen Digital Inc. Quote

The quarterly bookings advanced 27.4% year over year to $1.32 billion. Gen Digital’s average direct customer count increased to 78 million, up from 67 million in the year-ago quarter and 77 million in the previous quarter.

The non-GAAP gross profit grew 21.8% year over year to $1.04 billion in the third quarter. However, the gross margin contracted 270 basis points (bps) to 83.5%.

Non-GAAP operating expenses increased to $406 million, up 49% year over year. As a percentage of revenues, non-GAAP operating expenses were 32.7%, up 500 basis points year over year.

The non-GAAP operating income in the third quarter of fiscal 2026 totaled $629 million, up 9% year over year. The non-GAAP operating margin was 50.7%, down 780 bps year over year.

Gen Digital’s Balance Sheet & Cash Flow

As of Jan. 2, 2026, GEN had cash, cash equivalents and restricted cash of $619 million, down from $701 million in the previous quarter. The long-term debt was $8.49 billion.

In the third quarter of fiscal 2026, the company generated operating cash flow of $541 million and free cash flow of $535 million. Gen Digital paid out $77 million in dividends during the quarter, repaid $300 million of debt, and repurchased $300 million of shares in the period.

Gen Digital Revises Guidance for 2026

For the fourth quarter of fiscal 2026, Gen Digital anticipates revenues between $1.24 billion and $1.26 billion. The Zacks Consensus Estimate for GEN’s fourth-quarter fiscal 2026 revenues is pegged at $1.24 billion, indicating year-over-year growth of 22.7%.

The company projects non-GAAP earnings between 64 cents and 66 cents in the fiscal fourth quarter. The Zacks Consensus Estimate for GEN’s fourth-quarter fiscal 2026 earnings is pegged at 66 cents, indicating year-over-year growth of 11.9%.

For fiscal 2026, Gen Digital now projects revenues in the band of $4.96-$4.98 billion, up from the previously guided range of $4.92-$4.97 billion. The Zacks Consensus Estimate for GEN’s fiscal 2026 revenues are pegged at $4.94 billion, indicating year-over-year growth of 25.6%.

It now anticipates earnings per share between $2.54 and $2.56 compared with the earlier guidance of $2.51-$2.56. The Zacks Consensus Estimate for GEN’s fiscal 2026 earnings is pegged at $2.54, indicating year-over-year growth of 14.4%.

GEN’s Zacks Rank & Stocks to Consider

Currently, GEN carries a Zacks Rank #3 (Hold).

Some better-ranked stocks in the broader Zacks Computer and Technology sector are Amkor Technology AMKR, Arista Networks ANET and Advanced Energy AEIS. While Amkor Technology sports a Zacks Rank #1 (Strong Buy), Arista Networks and Advanced Energy carry a Zacks Rank #2 (Buy) each at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

Amkor Technology shares have surged 103.2% in the trailing six-month period. Amkor Technology is set to report fourth-quarter 2025 results on Feb. 9.

Shares of Arista Networks have jumped 27.6% in the trailing six-month period. Arista Networks is set to report fourth-quarter 2025 results on Feb. 12

Shares of Advanced Energy have rallied 85.4% in the trailing six-month period. Advanced Energy is slated to report third-quarter 2025 results on Feb. 10.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

This article originally published on Zacks Investment Research (zacks.com).

Zacks Investment Research