What changed in this filing

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Item 1. Financial Statements

2024-08-07 compared with 2024-02-05 · 181 added, 307 removed, 579 unchanged (46% of the section changed)

3 unchanged sentences

(Unaudited, in millions, except par value per share amounts)

December 29, 2023 March 31, 2023

June 28, 2024 March 29, 2024

Current assets:

5 unchanged sentences

Property and equipment, net 69 72

Operating lease assets 34 43

Intangible assets, net 2,537 2,638

8 unchanged sentences

Contract liabilities 1,745 1,808

Current operating lease liabilities 16 26

Other current liabilities 535 599

4 unchanged sentences

Long-term income taxes payable 1,504 1,490

Long-term operating lease liabilities 28 31

Other long-term liabilities 685 671

4 unchanged sentences

3,000 shares authorized;

637 and 640 shares issued and outstanding as of December 29, 2023 and March 31, 2023, respectively

615 and 623 shares issued and outstanding as of June 28, 2024 and March 29, 2024, respectively

Accumulated other comprehensive income (loss) 6 11

6 unchanged sentences

(Unaudited, in millions, except per share amounts)

Three Months Ended Nine Months Ended

December 29, 2023 December 30, 2022 December 29, 2023 December 30, 2022

Three Months Ended

June 28, 2024 June 30, 2023

Net revenues $ 965 $ 943

23 unchanged sentences

(Unaudited, in millions)

Three Months Ended Nine Months Ended

December 29, 2023 December 30, 2022 December 29, 2023 December 30, 2022

Three Months Ended

June 28, 2024 June 30, 2023

Net income (loss) $ 181 $ 187

8 unchanged sentences

(Unaudited, in millions, except share amounts)

Three months ended December 29, 2023

Three months ended June 28, 2024

Common Stock and Additional Paid-In Capital Accumulated Other Comprehensive Income (Loss) Retained Earnings (Accumulated Deficit) Total Stockholders’ Equity (Deficit)

Shares Amount

Balance as of September 29, 2023 641 $ 2,655 $ 6 $ ( 247 ) $ 2,414

Net income (loss) — — — 144 144

Other comprehensive income (loss), net of taxes — — 13 — 13

Shares withheld for taxes related to vesting of stock units — ( 6 ) — — ( 6 )

Repurchases of common stock ( 4 ) ( 100 ) — — ( 100 )

Cash dividends declared ($ 0.125 per share of common stock) and dividend equivalents accrued

— ( 82 ) — — ( 82 )

Stock-based compensation — 35 — — 35

Balance as of December 29, 2023 637 $ 2,502 $ 19 $ ( 103 ) $ 2,418

Nine months ended December 29, 2023 Common Stock and Additional Paid-In Capital Accumulated Other Comprehensive Income (Loss) Retained Earnings (Accumulated Deficit) Total Stockholders’ Equity (Deficit)

Shares Amount

Balance as of March 29, 2024 623 $ 2,227 $ 11 $ ( 98 ) $ 2,140

4 unchanged sentences

Repurchases of common stock (1)

Cash dividends declared ($ 0.375 per share of common stock) and dividend equivalents accrued

( 11 ) ( 274 ) — — ( 274 )

Stock-based compensation — 107 — — 107

Balance as of December 29, 2023 637 $ 2,502 $ 19 $ ( 103 ) $ 2,418

The accompanying notes are an integral part of these Condensed Consolidated Financial Statements.

GEN DIGITAL INC.

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (DEFICIT)

(Unaudited, in millions, except share amounts)

Three Months Ended December 30, 2022 Common Stock and Additional Paid-In Capital Accumulated Other Comprehensive Income (Loss) Retained Earnings (Accumulated Deficit) Total Stockholders’ Equity (Deficit)

Shares Amount

Balance as of September 30, 2022 661 $ 3,378 $ ( 15 ) $ ( 1,665 ) $ 1,698

Net income (loss) — — — 165 165

Other comprehensive income (loss), net of taxes — — ( 13 ) — ( 13 )

Common stock issued under employee stock incentive plans 1 — — — —

Shares withheld for taxes related to vesting of stock units

— ( 1 ) — — ( 1 )

Repurchases of common stock ( 23 ) ( 500 ) — — ( 500 )

Cash dividends declared ($ 0.125 per share of common stock) and dividend equivalents accrued

1 unchanged sentence

Stock-based compensation — 31 — — 31

Balance as of December 30, 2022 639 $ 2,838 $ ( 28 ) $ ( 1,500 ) $ 1,310

Nine months ended December 30, 2022

Common Stock and Additional Paid-In Capital Accumulated Other Comprehensive Income (Loss) Retained Earnings (Accumulated Deficit) Total Stockholders’ Equity (Deficit)

Balance as of June 28, 2024 615 $ 1,959 $ 6 $ 5 $ 1,970

Three Months Ended June 30, 2023 Common Stock and Additional Paid-In Capital Accumulated Other Comprehensive Income (Loss) Retained Earnings (Accumulated Deficit) Total Stockholders’ Equity (Deficit)

Shares Amount

Balance as of April 1, 2022 582 $ 1,851 $ ( 4 ) $ ( 1,940 ) $ ( 93 )

Balance as of March 31, 2023 640 $ 2,800 $ ( 15 ) $ ( 633 ) $ 2,152

Net income (loss) — — — 187 187

7 unchanged sentences

Stock-based compensation — 37 — — 37

Extinguishment of convertible debt — ( 100 ) — — ( 100 )

Cumulative effect adjustment from adoption of ASU 2020-06 (1)

— ( 7 ) — 6 ( 1 )

Merger consideration 94 2,141 — — 2,141

Balance as of December 30, 2022 639 $ 2,838 $ ( 28 ) $ ( 1,500 ) $ 1,310

Balance as of June 30, 2023 639 $ 2,697 $ 36 $ ( 446 ) $ 2,287

(1) Amount includes excise tax on share repurchases.

The accompanying notes are an integral part of these Condensed Consolidated Financial Statements.

(1) Effective on April 2, 2022, the Company adopted ASU 2020-06 ( Debt with Conversion and Other Options, ASC 470-20 ) using a modified retrospective method.

GEN DIGITAL INC.

1 unchanged sentence

(Unaudited, in millions)

Nine Months Ended

December 29, 2023 December 30, 2022

Three Months Ended

June 28, 2024 June 30, 2023

OPERATING ACTIVITIES:

1 unchanged sentence

Amortization and depreciation 106 125

Impairments and write-offs of current and long-lived assets ( 1 ) ( 5 )

Stock-based compensation expense 31 37

Deferred income taxes ( 10 ) ( 60 )

Loss (gain) on extinguishment of debt — 9

Gain on sale of property — ( 4 )

12 unchanged sentences

Purchases of property and equipment ( 2 ) ( 4 )

Payments for acquisitions, net of cash acquired — ( 6,547 )

Proceeds from the maturities and sales of short-term investments — 4

Proceeds from the sale of property 25 —

Other — ( 2 )

2 unchanged sentences

Repayments of debt ( 88 ) ( 208 )

Proceeds from issuance of debt, net of issuance costs — 8,954

Net proceeds from sales of common stock under employee stock incentive plans 6 6

Tax payments related to vesting of stock units ( 24 ) ( 18 )

12 unchanged sentences

is a global company powering Digital Freedom with a family of trusted consumer brands including Norton, Avast, LifeLock, Avira, AVG, ReputationDefender and CCleaner.

Our Cyber Safety portfolio provides protection across multiple channels and geographies, including security and performance, identity protection, and online privacy.

Our cyber safety portfolio provides protection across multiple channels and geographies, including security and performance management, identity protection, and online privacy.

Our technology platforms bring together software and service capabilities into comprehensive and easy-to-use products and solutions across our brands.

We have also evolved beyond traditional Cyber Safety to offer adjacent trust-based solutions, including digital identity and access management, digital reputation, and restoration support services.

On September 12, 2022, we completed our acquisition of Avast, plc (Avast).

Avast has been included in our Condensed Consolidated Statements of Operations since the acquisition date.

See Note 4 for further information about this business combination.

We have also evolved beyond traditional cyber safety to offer adjacent trust-based solutions, including digital identity and access management, digital reputation management, and restoration support services.

Basis of presentation

The accompanying unaudited Condensed Consolidated Financial Statements have been prepared in accordance with generally accepted accounting principles (GAAP) in the United States of America for interim financial information.

The accompanying unaudited Condensed Consolidated Financial Statements have been prepared in accordance with generally accepted accounting principles in the United States (U.S.

GAAP) for interim financial information.

In the opinion of management, the unaudited Condensed Consolidated Financial Statements contain all adjustments, consisting only of normal recurring items, except as otherwise noted, necessary for the fair presentation of our financial position, results of operations and cash flows for the interim periods.

These unaudited Condensed Consolidated Financial Statements should be read in conjunction with the audited Consolidated Financial Statements included in our Annual Report on Form 10-K for the fiscal year ended March 29, 2024.

The results of operations for the three and nine months ended December 29, 2023 are not necessarily indicative of the results expected for the entire fiscal year.

The results of operations for the three months ended June 28, 2024 are not necessarily indicative of the results expected for the entire fiscal year.

Fiscal calendar

We have a 52/53-week fiscal year ending on the Friday closest to March 31.

Unless otherwise stated, references to three and nine month periods in this report relate to fiscal periods ended December 29, 2023 and December 30, 2022.

The three and nine months ended December 29, 2023 and December 30, 2022 each consisted of 13 and 39 weeks, respectively.

Unless otherwise stated, references to three month periods in this report relate to fiscal periods ended June 28, 2024 and June 30, 2023.

The three months ended June 28, 2024 and June 30, 2023 each consisted of 13 weeks.

Our 2025 fiscal year consists of 52 weeks and ends on March 28, 2025.

1 unchanged sentence

The preparation of Condensed Consolidated Financial Statements in conformity with U.S.

GAAP requires management to make estimates, judgments and assumptions that affect the amounts reported and disclosed in the financial statements and accompanying Notes.

Such estimates include, but are not limited to, valuation of business combinations including acquired intangible assets and goodwill, loss contingencies, the recognition and measurement of current and deferred income taxes, including the measurement of uncertain tax positions, and valuation of assets and liabilities.

GAAP requires management to make estimates, judgments and assumptions that affect the amounts reported and disclosed in the Condensed Consolidated Financial Statements and accompanying Notes.

Such estimates include, but are not limited to, valuation of business combinations including acquired intangible assets and goodwill, deferred revenue, loss contingencies, the recognition and measurement of current and deferred income taxes, including assessing of unrecognized tax benefits, and valuation of assets and liabilities.

On an ongoing basis, management determines these estimates and assumptions based on historical experience and on various other assumptions that are believed to be reasonable.

1 unchanged sentence

Actual results could differ from such estimates and assumptions due to risks and uncertainties, including uncertainty in the current economic environment as a result of macroeconomic factors such as inflation, fluctuations in foreign currency exchange rates relative to the U.S.

dollar, our reporting currency, changes in interest rates, and Russia’s invasion of Ukraine, and such differences may be material to the Condensed Consolidated Financial Statements.

dollar, our reporting currency, changes in interest rates, ongoing and new geopolitical conflicts, and such differences may be material to the Condensed Consolidated Financial Statements.

Significant accounting policies

Management periodically re-evaluates and revises its significant accounting policies and disclosure as the business evolves or circumstances change.

We have updated a component of our revenue recognition disclosure to reflect the ongoing revenue growth and mix changes post-acquisition of Avast, as described in our Annual Report on Form 10-K for the fiscal year ended March 31, 2023, below.

We sell products and services directly to end-users and through multiple partner distribution channels.

Revenue recognition begins when we transfer control of the promised products or services to our customers, in an amount that reflects the consideration we expect to be entitled to in exchange for such products or services.

Our customer definition aligns with the control principles as outlined under Accounting Standards Codification (ASC) 606.

Performance periods are generally one year or less, and payments are generally collected up front.

Revenue is recognized net of any taxes collected from customers and subsequently remitted to governmental authorities.

Our customers are primarily users of our products and solutions who sign up on our e-commerce platform and have a direct billing relationship with us.

However, our customers, also include users who do not have a direct billing relationship with us but register on our e-commerce site through our e-commerce partners.

When referring to e-commerce partners, we are referring to those that are our fulfillment and payment processors who perform primarily administrative functions, such as collecting payment and remitting any required sales tax to governmental authorities.

Revenue from these e-commerce partners is recognized on a gross basis, excluding fees paid to e-commerce partners.

With the exception of those discussed in Note 2 and our revised revenue recognition disclosure, there have been no material changes to our significant accounting policies as of and for the three and nine months ended December 29, 2023, as compared to the significant accounting policies described in our Annual Report on Form 10-K for the fiscal year ended March 31, 2023.

With the exception of those discussed in Note 2, there have been no material changes to our significant accounting policies as of and for the three months ended June 28, 2024, as compared to the significant accounting policies described in our Annual Report on Form 10-K for the fiscal year ended March 29, 2024.

Revision of Prior Period Financial Statements

Historically, we had a practice of recognizing revenue for certain groups of customer renewals on the successful billing date, rather than the renewal start date.

This practice was instituted to align with our system which was configured and implemented based on payment confirmation from e-commerce partners.

We are changing this practice to recognize revenue for these groups on the renewal start date.

We concluded that the impact of this change is not material to any previously issued annual or interim financial statements;

however, we have revised previously reported financial information.

This correction will also be reflected in future filings, as applicable.

We have corrected this error in the accompanying Condensed Consolidated Balance Sheet as of March 29, 2024 by increasing contract liabilities for $ 78 million, increasing other long-term assets for $ 21 million and decreasing retained earnings (accumulated deficit) for $ 57 million.

The Condensed Consolidated Statement of Operations for the three months ended June 30, 2023 included a decrease to net revenues of $ 3 million and a decrease to income tax expense (benefit) of $ 1 million.

Recent Accounting Standards

3 unchanged sentences

In November 2023, the Financial Accounting Standards Board (FASB) issued new guidance to update reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses and information used to assess segment performance.

The ASU also clarify circumstances in which an entity can disclose multiple segment measures of profit or loss and provide new segment disclosure requirement for entities with a single reportable segment.

This is effective for fiscal years beginning after December 15, 2023 and interim periods within fiscal years beginning after December 15, 2024.

We are currently evaluating the impact of the adoption of this guidance on our Condensed Consolidated Financial Statements and disclosures.

We do not expect the adoption of this guidance will have a material impact on our Condensed Consolidated Financial Statements and disclosures.

ASU 2023-09, Income Taxes (Topic 740):

4 unchanged sentences

There have been no other material changes in recently issued or adopted accounting standards from those disclosed in our Annual Report on Form 10-K for the fiscal year ended March 29, 2024.

Although there are several other new accounting pronouncements issued or proposed by the FASB that we have adopted or will adopt, as applicable, we do not believe any of these accounting pronouncements has had, or will have, a material impact on our Condensed Consolidated Financial Statements and disclosures.

Although there are several other new accounting pronouncements issued or proposed by the FASB that we have adopted or will adopt, as applicable, we do not believe any of these accounting pronouncements have had, or will have, a material impact on our Condensed Consolidated Financial Statements and disclosures.

Assets Held for Sale

Assets held for sale

During fiscal 2020, we reclassified certain land and buildings previously reported as property and equipment to assets held for sale when the properties were approved for immediate sale in their present condition and the sale was expected to be completed within one year.

However, the commercial real estate market was adversely affected by the COVID-19 pandemic, which delayed the expected timing of such sales.

During fiscal 2023, we determined land and buildings in Dublin, Ireland, which were previously reported as property and equipment, now qualifies as held for sale.

During the first quarter of fiscal 2024, we completed the sale of certain land and buildings in Dublin, Ireland, which were previously classified as held for sale as of March 31, 2023, for cash consideration of $ 13 million, net of selling costs, and recognized a gain on sale of $ 4 million.

During fiscal 2023, we determined land and buildings in Dublin, Ireland, which were previously reported as property and equipment, qualified as held for sale.

During the first quarter of fiscal 2024, we completed the sale of certain land and buildings in Dublin, Ireland, for cash consideration of $ 13 million, net of selling costs, and recognized a gain on sale of $ 4 million.

The remaining land and building in Dublin, Ireland, remains as held for sale.

During the third quarter of fiscal 2024, we completed the sale of certain land and buildings in Tucson, Arizona, which were previously classified as held for sale as of March 31, 2023, for cash consideration of $ 12 million, net of selling costs.

We recognized a gain on sale of $ 5 million.

We have taken into consideration the current real estate values and demand and continue to execute pla ns to sell the remaining property.

As of December 29, 2023, the property is classified as held for sale.

During the three and nine months ended December 29, 2023 , there were no impairments because the fair value less costs to sell either equals or exceeds its carrying value.

Business Combinations

Fiscal 2023 Avast acquisition

During the second quarter of fiscal 2023, we acquired all of the outstanding common stock of Avast.

Prior to the acquisition, Avast was a global leader in consumer cybersecurity, offering a comprehensive range of digital security and privacy products and services that protected and enhanced users’ online experiences.

With this acquisition, we are positioned to provide a broad and complementary consumer product portfolio with greater geographic diversification and access to a larger user base.

The total consideration for the acquisition of Avast was approximately $ 8,688 million, net of cash acquired.

Our final allocation of the aggregate purchase price for the acquisition as of September 12, 2022, was as follows:

(In millions) September 12, 2022

Accounts receivable $ 63

Other current assets 17

Property and equipment 33

Operating lease assets 18

Intangible assets 2,383

Goodwill 7,335

Other long-term assets 11

Total assets acquired 9,860

Current liabilities 180

Contract liabilities 509

Operating lease liabilities 18

Long-term deferred tax liabilities 419

Other long-term obligations 46

Total liabilities assumed 1,172

Total purchase price $ 8,688

Our estimates and assumptions were subject to refinement within the measurement period, which ended during the second quarter of fiscal 2024.

Adjustments to the purchase price during the measurement period required adjustments to be made to goodwill.

During the nine months ended December 29, 2023, we recorded measurement period adjustments resulting in a net decrease to goodwill of $ 14 million, resulting from updated information regarding deferred tax liabilities, which resulted in a decrease of $ 14 million of long-term deferred tax liabilities.

Unaudited pro forma information

The following unaudited pro forma financial information represents the combined historical results for the three and nine months ended December 30, 2022, as if the acquisition had been completed on April 3, 2021, the first day of fiscal 2022.

The results presented below include adjustments to conform Avast financial information, prepared in accordance with International Financial Reporting Standards (IFRS), to U.S.

GAAP as well as the impacts of material, nonrecurring pro forma adjustments, including amortization of acquired intangible assets, interest on debt issued to finance the acquisition, and acquisition-related transaction costs, and the income tax effect of the other pro forma adjustments.

The unaudited pro forma results do not include any anticipated synergies or other expected benefits of the acquisition.

The following table summarizes the unaudited pro forma financial information:

December 30, 2022

(In millions) Three Months Ended Nine Months Ended

Net revenues $ 936 $ 2,857

Net income (loss) $ 204 $ 323

The unaudited pro forma financial information is provided for informational purposes only and are not indicative of future operations or results that would have been achieved had the acquisition been completed as of the beginning of fiscal 2022.

As of June 28, 2024, this property remains classified as assets held for sale.

During the three months ended June 28, 2024, there were no impairments because the fair value less costs to sell either equals or exceeds its carrying value of assets held for sale.

Contract liabilities

During the three and nine months ended December 29, 2023, we recognized $ 688 million and $ 1,536 million from the contract liabilities balances as of September 29, 2023 and March 31, 2023, respectively.

During the three and nine months ended December 30, 2022, we recognized $ 686 million and $ 1,116 million from the contract liabilities balances as of September 30, 2022 and April 1, 2022, respectively.

During the three months ended June 28, 2024, we recognized $ 722 million from the contract liabilities balances as of March 29, 2024.

During the three months ended June 30, 2023, we recognized $ 711 million from the contract liabilities balances as of March 31, 2023.

Remaining performance obligations

Remaining performance obligations represent contract revenue that has not been recognized, which include contract liabilities and amounts that will be billed and recognized as revenue in future periods.

As of December 29, 2023, we had $ 1,147 million of remaining performance obligations, excluding customer deposit liabilities of $ 597 million, of which we expect to recognize approximately 93 % as revenue over the next 12 months.

Remaining performance obligations represent contracted revenue that has not been recognized, which include contract liabilities and amounts that will be billed and recognized as revenue in future periods.

As of June 28, 2024, we had $ 1,283 million of remaining performance obligations, excluding customer deposit liabilities of $ 536 million, of which we expect to recognize approximately 94 % as revenue over the next 12 months.

See Note 16 for tabular disclosures of disaggregated revenue by solution and geographic region.

Goodwill and Intangible Assets

The changes in the carrying amount of goodwill were as follows:

The changes in the carrying amount of goodwill are as follows:

(In millions)

Balance as of March 29, 2024 $ 10,210

Purchase accounting adjustment ( 14 )

Translation adjustments

Balance as of December 29, 2023 $ 10,231

Balance as of June 28, 2024 $ 10,205

Intangible assets, net

December 29, 2023 March 31, 2023

The following table summarizes the components of our intangible assets, net:

June 28, 2024 March 29, 2024

(In millions) Gross

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Amortization expense for purchased intangible assets is summarized below:

Three Months Ended Nine Months Ended Condensed Consolidated Statements of Operations Classification

(In millions) December 29, 2023 December 30, 2022 December 29, 2023 December 30, 2022

Three Months Ended Condensed Consolidated Statements of Operations Classification

(In millions) June 28, 2024 June 30, 2023

Customer relationships and other $ 43 $ 61 Operating expenses

1 unchanged sentence

Total $ 100 $ 118

As of December 29, 2023, future amortization expense related to intangible assets that have finite lives is as follows by fiscal year:

As of June 28, 2024, future amortization expense related to intangible assets that have finite lives is as follows by fiscal year:

(In millions)

4 unchanged sentences

Cash and cash equivalents:

(In millions) December 29, 2023 March 31, 2023

(In millions) June 28, 2024 March 29, 2024

Cash $ 349 $ 408

2 unchanged sentences

Accounts receivable, net:

(In millions) December 29, 2023 March 31, 2023

(In millions) June 28, 2024 March 29, 2024

Accounts receivable $ 154 $ 165

2 unchanged sentences

Other current assets:

(In millions) December 29, 2023 March 31, 2023

(In millions) June 28, 2024 March 29, 2024

Prepaid expenses $ 143 $ 142

3 unchanged sentences

Property and equipment, net:

(In millions) December 29, 2023 March 31, 2023

(In millions) June 28, 2024 March 29, 2024

Land $ 13 $ 13

8 unchanged sentences

Other long-term assets:

(In millions) December 29, 2023 March 31, 2023

(In millions) June 28, 2024 March 29, 2024

Non-marketable equity investments $ 136 $ 136

1 unchanged sentence

Deferred income tax assets 1,237 1,236

Operating lease assets 49 45

Long-term prepaid royalty 17 21

1 unchanged sentence

Short-term contract liabilities:

(In millions) December 29, 2023 March 31, 2023

(In millions) June 28, 2024 March 29, 2024

Deferred revenue $ 1,209 $ 1,200

2 unchanged sentences

Other current liabilities:

(In millions) December 29, 2023 March 31, 2023

(In millions) June 28, 2024 March 29, 2024

Income taxes payable $ 238 $ 198

3 unchanged sentences

Accrued interest 38 78

Current operating lease liabilities 13 13

Other accrued liabilities 48 83

Total other current liabilities $ 535 $ 599

Other long-term liabilities:

(In millions) December 29, 2023 March 31, 2023

(In millions) June 28, 2024 March 29, 2024

Long-term accrued legal fees $ 598 $ 586

Long-term operating lease liabilities 41 38

Total other long-term liabilities $ 685 $ 671

Long-term income taxes payable:

(In millions) December 29, 2023 March 31, 2023

(In millions) June 28, 2024 March 29, 2024

Unrecognized tax benefits (including interest and penalties) $ 1,364 $ 1,346

Deemed repatriation tax payable 139 139

Other long-term income taxes 1 5

Unrecognized tax benefits and related interest and penalties 1,069 509

Total long-term income taxes payable $ 1,504 $ 1,490

As of December 29, 2023, total deferred income taxes changed by $ 975 million, which primarily relates to goodwill of $ 592 million, intangibles of $ 104 million, and other accruals and reserves not currently tax deductible of $ 156 million, and current year unrecognized tax benefits and penalties, which increased by $ 436 million and $ 87 million, respectively.

As of December 29, 2023, income tax receivable and prepaid income taxes increased $ 702 million, accompanied by an offsetting decrease in long-term income tax receivable and prepaid taxes by $ 702 million due to the timing of refund processing related to the filing of our fiscal 2023 tax return.

Other income (expense), net:

Three Months Ended Nine Months Ended

(In millions) December 29, 2023 December 30, 2022 December 29, 2023 December 30, 2022

Three Months Ended

(In millions) June 28, 2024 June 30, 2023

Interest income $ 8 $ 6

Foreign exchange gain (loss)

Gain (loss) on early extinguishment of debt — — — ( 9 )

Gain (loss) on sale of properties

Other 2 4 3 10

Other income (expense), net $ 12 $ 12

Supplemental cash flow information:

Nine Months Ended

(In millions) December 29, 2023 December 30, 2022

Income taxes paid, net of refunds $ 395 $ 378

Three Months Ended

(In millions) June 28, 2024 June 30, 2023

Income taxes paid (received), net of refunds

Interest expense paid $ 191 $ 155

1 unchanged sentence

Non-cash operating activities:

Operating lease assets obtained in exchange for operating lease liabilities $ — $ 23

Reduction (increase) of operating lease assets as a result of lease terminations and modifications

Non-cash investing and financing activities:

Purchases of property and equipment in current liabilities $ 2 $ —

Non-cash consideration for the Merger with Avast $ — $ 2,141

$ ( 7 ) $ ( 1 )

Financial Instruments and Fair Value Measurements

9 unchanged sentences

The following table summarizes our financial instruments measured at fair value on a recurring basis:

December 29, 2023 March 31, 2023

June 28, 2024 March 29, 2024

(In millions) Fair Value Level 1 Level 2 Fair Value Level 1 Level 2

2 unchanged sentences

Total $ 311 $ 295 $ 16 $ 454 $ 438 $ 16

(1) The fair value of our interest rate swaps is less than $ 1 million as of March 31, 2023.

Financial instruments not recorded at fair value on a recurring basis include our non-marketable equity investments and long-term debt.

Non-marketable equity investments

As of December 29, 2023 and March 31, 2023, the carrying value of our non-marketable equity investments was $ 176 million.

As of June 28, 2024 and March 29, 2024, the carrying value of our non-marketable equity investments was $ 136 million.

Current and long-term debt

As of December 29, 2023 and March 31, 2023, the total fair value of our current and long-term fixed rate debt was $ 2,639 million and $ 2,593 million, respectively.

The fair value of our variable rate debt approximated its carrying value.

As of June 28, 2024 and March 29, 2024, the total fair value of our current and long-term fixed rate debt was $ 2,620 million and $ 2,624 million, respectively.

The fair value of our variable rate debt approximated their carrying value.

The fair values of all our debt obligations were based on Level 2 inputs.

3 unchanged sentences

The following summarizes our lease costs:

Three Months Ended Nine Months Ended

(In millions) December 29, 2023 December 30, 2022 December 29, 2023 December 30, 2022

Three Months Ended

(In millions) June 28, 2024 June 30, 2023

Operating lease costs $ 3 $ 4

3 unchanged sentences

Other information related to our operating leases was as follows:

December 29, 2023 March 31, 2023

June 28, 2024 March 29, 2024

Weighted-average remaining lease term 4.6 years 4.6 years

1 unchanged sentence

See Note 6 for cash flow information related to our operating leases.

As of December 29, 2023, the maturities of our lease liabilities by fiscal year are as follows:

As of June 28, 2024, the maturities of our lease liabilities by fiscal year are as follows:

(In millions)

5 unchanged sentences

(In millions, except percentages)

December 29, 2023 March 31, 2023 Effective

June 28, 2024 March 29, 2024 Effective

Interest Rate

17 unchanged sentences

(2) Term A Facility due 2027 bears interest at a rate equal to Term SOFR plus a credit spread adjustment (CSA) plus a margin based either on the current debt rating of our non-credit-enhanced, senior unsecured long-term debt or consolidated adjusted leverage as defined in the underlying loan agreement.

(3) Term B Facility due 2029 bears interest at a rate equal to Term SOFR plus CSA plus 2.00 %.

(3) Term B Facility due 2029 bears interest at a rate equal to Term SOFR plus 1.75 %.

The interest rates for the outstanding term loans are as follows:

December 29, 2023 March 31, 2023

June 28, 2024 March 29, 2024

Term A Facility due September 12, 2027 6.94 % 7.18 %

Term B Facility due September 12, 2029 7.09 % 7.43 %

As of December 29, 2023, the future contractual maturities of debt by fiscal year are as follows:

As of June 28, 2024, the future contractual maturities of debt by fiscal year are as follows:

(In millions)

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The lenders under these facilities will not be under any obligation to provide any such incremental loans or commitments.

We drew down the aggregate principal amounts of the Term A Facility and Term B Facility to finance the cash consideration payable for the transaction and to fully repay the outstanding principal and accrued interest of the existing credit facilities.

We drew down the aggregate principal amounts of the Term A Facility and Term B Facility to finance the cash consideration payable for our acquisition of Avast and to fully repay the outstanding principal and accrued interest of the existing credit facilities at the time.

The Credit Agreement replaced the existing credit facilities upon the close of the transaction.

1 unchanged sentence

the senior credit facilities remain senior secured.

The principal amounts of Term Facility A must be repaid in quarterly installments on the last business day of each calendar quarter equal to 1.25 % of the aggregate principal amount as of the date of the Credit Agreement.

The principal amounts of Term Facility B must be repaid in quarterly installments on the last business day of each calendar quarter equal to 0.25 % of the aggregate principal amount as of the date of the Credit Agreement.

On June 5, 2024, we entered into the First Amendment with certain financial institutions under the Credit Agreement, as amended (Amended Credit Agreement).

The First Amendment repriced our Term B Facility interest rate from the applicable benchmark rate plus CSA plus 2.0 % to the applicable benchmark rate plus 1.75 %.

Other than as described above, the Revolving Facility and the term loan facilities under the First Amendment continue to have the same terms as provided under the Credit Agreement.

Quarterly installment payments commenced on March 31, 2023.

We may voluntarily repay outstanding principal balances under the Revolving Facility and both Term Loan facilities without penalty.

As of December 29, 2023, there were no borrowings outstanding under our Revolving Facility;

We may voluntarily repay outstanding principal balances under the Revolving Facility and Term loan facilities without penalty or premium.

As of June 28, 2024, there were no borrowings outstanding under our Revolving Facility;

however, from time to time we utilize letters of credits as part of our ordinary course of business.

Letters of credit reduce our Revolving Facility commitment amounts.

Interest on borrowings under the Credit Agreement can be based on a base rate or the SOFR at our election.

Based on our debt ratings and our consolidated leverage ratios as determined in accordance with the Credit Agreement, loans borrowed bear interest, in the case of base rate loans, at a per annum rate equal to the applicable base rate plus CSA plus a margin ranging from 0.125 % to 0.75 %, and in the case of the SOFR loans, SOFR, as adjusted for statutory reserves, plus a margin ranging from 1.125 % to 1.75 %.

Interest on our Term A facility borrowings under the Amended Credit Agreement, can be based on a base rate or the SOFR at our election.

Based on our debt ratings and our consolidated leverage ratios as determined in accordance with the Amended Credit Agreement, loans borrowed bear interest, in the case of base rate loans, at a per annum rate equal to the applicable base rate plus CSA plus a margin ranging from 0.125 % to 0.75 %, and in the case of the SOFR loans, SOFR, as adjusted for statutory reserves, plus a margin ranging from 1.125 % to 1.75 %.

Debt covenant compliance

The Credit Agreement contains customary representations and warranties, affirmative and negative covenants.

The Amended Credit Agreement contains customary representations and warranties, affirmative and negative covenants.

Each of the Revolving Facility and Term A Facility are subject to a covenant that we maintain a consolidated leverage ratio less than or equal to (i) 6.0 to 1.0 from the second quarter of fiscal 2023 through the last day of the second quarter of fiscal 2024, (ii) 5.75 to 1.0 following the last day of the second quarter of fiscal 2024 through the last day of the second quarter of fiscal 2025 and (iii) 5.25 to 1.0 for each fiscal quarter thereafter;

provided that such maximum consolidated leverage ratio will increase to 5.75 to 1.0 for the four fiscal quarters ending immediately should we acquire property, business or assets in an aggregate amount greater than $ 250 million.

In addition, the Credit Agreement contains customary events of default under which our payment obligations may be accelerated, including, among others, non-payment of principal, interest or other amounts when due, inaccuracy of representations and warranties, violation of certain covenants, payment and acceleration cross defaults with certain other indebtedness, certain undischarged judgments, bankruptcy, insolvency or inability to pay debts, change of control, the occurrence of certain events related to the Employee Retirement Income Security Act of 1974 (ERISA), and the Company experiencing a change of control.

As of December 29, 2023 , we were in compliance with all debt covenants.

In addition, the Amended Credit Agreement contains customary events of default under which our payment obligations may be accelerated, including, among others, non-payment of principal, interest or other amounts when due, inaccuracy of representations and warranties, violation of certain covenants, payment and acceleration cross defaults with certain other indebtedness, certain undischarged judgments, bankruptcy, insolvency or inability to pay debts, change of control, the occurrence of certain events related to the Employee Retirement Income Security Act of 1974 (ERISA), and the Company experiencing a change of control.

As of June 28, 2024 , we were in compliance with all financial debt covenants.

On February 9, 2017, we issued $ 1,100 million aggregate principal amount of our 5.0 % Senior Notes due April 15, 2025 (the 5.0 % Senior Notes).

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The First Call Dates of the 6.75 % Senior Notes due 2027 and 7.125 % Senior Notes due 2030 are September 30, 2024 and September 30, 2025, respectively.

Convertible Senior Notes

The following table sets forth total interest expense recognized related to our Convertible Senior Notes:

Nine Months Ended

(In millions) December 30, 2022

Contractual interest expense $ 4

Amortization of debt discount $ —

Payments in lieu of conversion price adjustments (1)

(1) Payments in lieu of conversion price adjustments consist of amounts paid to holders of the Convertible Senior Notes when our quarterly dividend to our common stockholders exceeds the amounts defined in the Convertible Senior Notes agreements.

During the three and nine months ended December 29, 2023 and three months ended December 30, 2022, we did no t recognize any interest expense related to our Convertible Senior Notes as they were settled during the second quarter of fiscal year 2023.

Our primary objective in holding derivatives is to reduce the volatility of earnings and cash flow associated with changes in foreign currency exchange rates and interest rates.

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Summary of derivative instruments

The following table summarizes our outstanding derivative instruments as of December 29, 2023 and March 31, 2023:

The following table summarizes our outstanding derivative instruments as of June 28, 2024 and March 29, 2024:

Notional Amount Fair Value of Derivative Assets Fair Value of Derivative Liabilities

(In millions) December 29, 2023 March 31, 2023 December 29, 2023 March 31, 2023 December 29, 2023 March 31, 2023

(In millions) June 28, 2024 March 29, 2024 June 28, 2024 March 29, 2024 June 28, 2024 March 29, 2024

Foreign exchange contracts not designated as hedging instrument (1)

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Total $ 1,312 $ 1,345 $ 16 $ 16 $ — $ —

(1) The fair values of the foreign exchange contracts are less than $ 1 million as of December 29, 2023 and March 31, 2023.

(1) The fair values of the foreign exchange contracts are less than $ 1 million as of June 28, 2024 and March 29, 2024.

The following table summarizes the effect of our cash flow hedges on AOCI during the periods indicated:

December 29, 2023

(In millions) Three Months Ended Nine Months Ended

Three Months Ended

(In millions) June 28, 2024 June 30, 2023

Interest rate swap contracts designated as cash flow hedge

$ ( 4 ) $ ( 22 )

During the three and nine months ended December 30, 2022, there was no effect of our cash flow hedges on AOCI as interest rate swaps were not effective until the fourth quarter of fiscal 2023.

The related gain (loss) recognized in our Condensed Consolidated Statements of Operations, with presentation location was as follows:

Three Months Ended Nine Months Ended Condensed Consolidated Statements of Operations Classification

(In millions) December 29, 2023 December 30, 2022 December 29, 2023 December 30, 2022

The related gain (loss) recognized in our Condensed Consolidated Statements of Operations was as follows:

Three Months Ended Condensed Consolidated Statements of Operations Classification

(In millions) June 28, 2024 June 30, 2023

Foreign exchange contracts not designated as hedging instrument $ ( 3 ) $ ( 3 ) Other income (expense), net

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Total $ 1 $ —

As of December 29, 2023, we estimate that $ 10 million of net deferred gains related to our interest rate hedges will be recognized in earnings over the next 12 months.

As of June 28, 2024, we estimate that $ 12 million of net deferred gains related to our interest rate hedges will be recognized in earnings over the next 12 months.

Restructuring and Other Costs

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These actions are expected to be completed by the end of fiscal 2025.

As of December 29, 2023, we have incurred total costs of $ 104 million related to the September 2022 Plan.

Our activities and liabilities related to our September 2022 Plan are presented in the table below:

(in millions) Liability Balance as of March 31, 2023 Costs, Net of Adjustments Cash Payments Non-Cash Items Liability Balance as of December 29, 2023

Severance and termination benefit costs $ 7 $ 21 $ ( 23 ) $ — $ 5

Contract cancellation charges — 5 ( 5 ) — —

Stock-based compensation charges — 1 — ( 1 ) —

Asset write-offs and impairments — 1 — ( 1 ) —

Other exit and disposal costs — 7 ( 7 ) — —

Total $ 7 $ 35 $ ( 35 ) $ ( 2 ) $ 5

The restructuring liabilities are included in Other current liabilities in our Condensed Consolidated Balance Sheets.

As of June 28, 2024, we have incurred costs of $ 124 million related to the September 2022 Plan.

Restructuring and other costs summary

Our restructuring and other costs are presented in the table below:

Three Months Ended Nine Months Ended

(In millions) December 29, 2023 December 30, 2022 December 29, 2023 December 30, 2022

Three Months Ended

(In millions) June 28, 2024 June 30, 2023

Severance and termination benefit costs $ ( 1 ) $ 11

Contract cancellation charges — 1

Stock-based compensation charges — 8 1 8

Asset write-offs and impairments 1 2 1 2

Other exit and disposal costs — 5

Total restructuring and other costs $ ( 1 ) $ 17

Occasionally, we incur costs related to past restructuring plans.

These charges were immaterial for the three and nine months ended December 29, 2023.

The following table summarizes our effective tax rate for the periods presented:

Three Months Ended Nine Months Ended

Three Months Ended

(In millions, except percentages)

December 29, 2023 December 30, 2022 December 29, 2023 December 30, 2022

June 28, 2024 June 30, 2023

Income (loss) before income taxes $ 276 $ 201

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Effective tax rate 34 % 7 %

Our effective tax rate for the three and nine months ended December 29, 2023, differs from the federal statutory income tax rate primarily due to tax benefits related to the set up and write-off of deferred tax items resulting from an internal restructuring, partially offset by state taxes, changes in unrecognized tax benefits and related interest and penalties, and the U.S.

Our effective tax rate for the three months ended June 28, 2024, differs from the federal statutory income tax rate primarily due to state taxes, changes in unrecognized tax benefits and related interest and penalties, and the U.S.

taxation on foreign earnings.

Our effective tax rate for the three and nine months ended December 30, 2022, differs from the federal statutory income tax rate primarily due to state taxes and the U.S.

taxation on foreign earnings, and certain discrete items including the tax impacts of internal restructuring, deductibility of transaction costs from the Merger, and the limitations of foreign taxes due to the increase of interest expense.

In the second quarter of fiscal 2024, as part of the Avast integration plan, which geographically realigned and simplified our business, we undertook a legal entity and operational restructuring.

As part of that process, we distributed certain assets within the legal entity operating structure and as a result, we recorded a net tax benefit of $ 285 million during the nine months ended December 29, 2023.

Differences between the final outcome and recorded amounts will impact the provision for income taxes in the period in which such a determination is made and could have a material impact on our Condensed Consolidated Balance Sheets and Statements of Operations in future years.

Our effective tax rate for the three months ended June 30, 2023, differs from the federal statutory income tax rate primarily due to tax benefits related to the set up and write-off of deferred tax items from an internal restructuring, partially offset by state taxes and the U.S.

taxation on foreign earnings.

Stockholders' Equity

On February 1, 2024, we announced that our Board of Directors declared a cash dividend of $ 0.125 per share of common stock to be paid in March 2024.

On August 1, 2024, we announced that our Board of Directors declared a cash dividend of $ 0.125 per share of common stock to be paid in September 2024.

All shares of common stock issued and outstanding and all restricted stock units (RSUs) and performance-based restricted stock units (PRUs) as of the record date will be entitled to the dividend and dividend equivalent rights, respectively, which will be paid out if and when the underlying shares are released.

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Stock repurchase program

In May 2024, our Board of Directors authorized a new stock repurchase program through which we may repurchase shares of our common stock in an aggregate amount of up to $ 3 billion with no fixed expiration.

Under our stock repurchase program, we may purchase shares of our outstanding common stock on the open market and through accelerated stock repurchase transactions.

As of December 29, 2023, we had $ 729 million remaining under the authorization to be completed in future periods with no expiration date.

The following table summarizes activity related to this program during three and nine months ended December 29, 2023 and December 30, 2022:

Three Months Ended Nine Months Ended

As of June 28, 2024, we had $ 2,728 million remaining under the authorization to be completed in future periods.

The following table summarizes activity related to our stock repurchase program during three months ended June 28, 2024 and June 30, 2023:

Three Months Ended

(In millions, except per share amounts)

December 29, 2023 December 30, 2022 December 29, 2023 December 30, 2022

June 28, 2024 June 30, 2023

Number of shares repurchased 11 3

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Other comprehensive income (loss), net of taxes ( 5 ) — ( 5 )

Balance as of December 29, 2023 $ 13 $ 6 $ 19

Balance as of June 28, 2024 $ ( 10 ) $ 16 $ 6

Stock-Based Compensation

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In connection with our acquisition of Avast, we assumed the outstanding equity awards under two of Avast’s equity incentive plans (the Avast Holding B.V.

2014 Share Option Plan and the Rules of the Avast plc Long Term Incentive Plan (collectively, the Avast Plans)), which consisted of 4 million shares of unvested RSUs.

2014 Share Option Plan and the Rules of the Avast plc Long Term Incentive Plan (collectively, the Avast Plans)), which consisted of 4 million unvested RSUs.

The assumed RSUs generally retain the terms and conditions under which they were originally granted.

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Upon vesting, these assumed RSUs and any additional shares granted will settle into shares of our common stock.

See Note 4 for further information about this business combination.

The following table sets forth the stock-based compensation expense recognized for our equity incentive plans:

Three Months Ended Nine Months Ended

Three Months Ended

(In millions)

December 29, 2023 December 30, 2022 December 29, 2023 December 30, 2022

June 28, 2024 June 30, 2023

Cost of revenues $ 1 $ 1

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General and administrative 12 16

Restructuring and other costs — 8 1 8

Total stock-based compensation expense $ 31 $ 37

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$ ( 4 ) $ ( 5 )

As of December 29, 2023, the total unrecognized stock-based compensation expense related to our unvested stock-based awards was $ 225 million, which will be recognized over an estimated weighted-average amortization period of 1.9 years.

As of June 28, 2024, the total unrecognized stock-based compensation expense related to our unvested stock-based awards was $ 270 million, which will be recognized over an estimated weighted-average amortization period of 2.2 years.

The following table summarizes additional information related to our stock-based awards:

Nine Months Ended

(In millions, except per grant data) December 29, 2023 December 30, 2022

Three Months Ended

(In millions, except per grant data) June 28, 2024 June 30, 2023

Restricted stock units (RSUs):

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Dividend equivalent rights (DERs)

Our RSUs and PRUs, except the 4 million unvested RSUs assumed under the Avast Plans, contain DERs that entitles the recipient of an award to receive cash dividend payments if and when the underlying shares are released.

The amount of DERs equals the amount of cumulated dividends on the issued number of common stock that would have been payable since the date the associated award was granted.

As of December 29, 2023 and March 31, 2023, current dividends payable related to DER was $ 4 million and $ 5 million, respectively, recorded as part of Other current liabilities in the Condensed Consolidated Balance Sheets, and long-term dividends payable related to DER was $ 3 million and $ 2 million, respectively, recorded as part of Other long-term liabilities in the Condensed Consolidated Balance Sheets.

Net Income Per Share

Our RSUs and PRUs, except for the 4 million assumed RSUs under the Avast Plans, contain DERs that entitle the recipient of an award to receive cash dividend payments when the associated award is released.

The amount of DERs equals to the cumulated dividends on the issued number of common stock that would have been payable since the date the associated award was granted.

As of June 28, 2024 and March 29, 2024, current dividends payable related to DER was $ 3 million and $ 4 million, respectively, recorded as part of Other current liabilities in the Condensed Consolidated Balance Sheets, and long-term dividends payable related to DER was $ 2 million and $ 4 million, respectively, recorded as part of Other long-term liabilities in the Condensed Consolidated Balance Sheets.

Net Income (Loss) Per Share

Basic income per share is computed by dividing net income by the weighted-average number of common shares outstanding during the period.

Diluted net income per share also includes the incremental effect of dilutive potentially issuable common shares outstanding.

Dilutive potentially issuable common shares include the dilutive effect of the shares underlying convertible debt and employee equity awards.

Our remaining convertible debt was extinguished on August 15, 2022.

Dilutive potentially issuable common shares include the dilutive effect of employee equity awards.

The components of basic and diluted net income (loss) per share are as follows:

Three Months Ended Nine Months Ended

Three Months Ended

(In millions, except per share amounts)

December 29, 2023 December 30, 2022 December 29, 2023 December 30, 2022

June 28, 2024 June 30, 2023

Net income (loss) $ 181 $ 187

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Dilutive potentially issuable shares:

Convertible debt

Employee equity awards 6 3

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The following table summarizes net revenues for our major solutions:

Three Months Ended Nine Months Ended

(In millions) December 29, 2023 December 30, 2022 December 29, 2023 December 30, 2022

Three Months Ended

(In millions) June 28, 2024 June 30, 2023

Consumer security revenues $ 607 $ 597

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Total net revenues (1)

$ 951 $ 936 $ 2,845 $ 2,391

(1) During the three months ended December 29, 2023, total net revenues include an unfavorable foreign exchange impact of $ 2 million from our consumer security solutions.

During the nine months ended December 29, 2023, total net revenues include an unfavorable foreign exchange impact of $ 18 million from our consumer security solutions.

From time to time, changes in our product hierarchy cause changes to the product categories above.

When changes occur, we recast historical amounts to match the current product hierarchy.

The changes have been reflected for all periods presented above.

Consumer security includes revenues from our Norton 360 Security offerings, Norton Security, Avast Security offerings, Norton Secure VPN, Avira Security and other consumer security and device performance solutions through our direct, partner and small business channels.

Identity and information protection includes revenues from our Norton 360 with LifeLock offerings, LifeLock identity theft protection and other information protection and privacy solutions.

(1) During the three months ended June 28, 2024, total net revenues include an unfavorable foreign exchange impact of $ 7 million from our consumer security solutions.

Consumer security includes revenues from our Norton 360 Security offerings, Norton, Avast, AVG, and Avira Security and VPN offerings, and other consumer security and device performance solutions through our direct, partner and small business channels.

Identity and information protection includes revenues from our Norton 360 with LifeLock offerings, LifeLock identity theft protection and other identity information protection and privacy solutions.

Legacy includes revenues from products or solutions from markets that we have exited and in which we no longer operate, have been discontinued or identified to be discontinued, or remain in maintenance mode as a result of integration and product portfolio decisions.

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Net revenues by geography are based on the billing addresses of our customers.

The following table represents net revenues by geographic area at the end of each period presented:

Three Months Ended Nine Months Ended

(In millions) December 29, 2023 December 30, 2022 December 29, 2023 December 30, 2022

The following table represents net revenues by geographic area for the periods presented:

Three Months Ended

(In millions) June 28, 2024 June, 30, 2023 (2)

Americas $ 636 $ 614

EMEA 230 220 686 479

APJ 100 94 302 253

Total net revenues (1)

$ 951 $ 936 $ 2,845 $ 2,391

The Americas include U.S., Canada and Latin America;

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APJ includes Asia Pacific and Japan.

(1) During the three months ended December 29, 2023, total net revenues include an unfavorable foreign exchange impact of $ 2 million primarily from APJ.

During the nine months ended December 29, 2023, total net revenues includes an unfavorable foreign exchange impact of $ 18 million, consisting of $ 13 million from EMEA and $ 5 million from APJ.

(1) During the three months ended June 28, 2024, total net revenues include an unfavorable foreign exchange impact of $ 7 million primarily from APJ.

(2) From time to time, changes in allocation methodologies cause changes to the revenue by geographic area above.

When changes occur, we recast historical amounts to match the current methodology, such as for the three months ended June 30, 2023 where we aligned allocation methodologies across similar product categories.

Revenues from customers inside the U.S.

were $ 563 million and $ 1,690 million during the three and nine months ended December 29, 2023, respectively, and $ 537 million and $ 1,509 million during the three and nine months ended December 30, 2022, respectively.

were $ 579 million and $ 558 million during the three months ended June 28, 2024 and June 30, 2023, respectively.

No other individual country accounted for more than 10% of revenues.

The table below represents cash, cash equivalents and short-term investments held in the U.S.

The table below represents cash and cash equivalents held in the U.S.

and internationally in various foreign subsidiaries:

(In millions) December 29, 2023 March 31, 2023

(In millions) June 28, 2024 March 29, 2024

International 359 379

Total cash, cash equivalents and short-term investments $ 490 $ 750

The table below represents our property and equipment, net of accumulated depreciation and amortization, by geographic areas, based on the physical location of the asset, at the end of each period presented.

(In millions) December 29, 2023 March 31, 2023

Czech Republic 7 16

Total cash and cash equivalents

The table below represents our property and equipment, net of accumulated depreciation and amortization, by geographic area, based on the physical location of the asset, at the end of each period presented.

(In millions) June 28, 2024 March 29, 2024

Germany 12 12

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Total property and equipment, net $ 69 $ 72

(1) No other individual country represented more than 10% of the respective totals.

(1) No individual country represented more than 10% of the respective totals.

Significant customers and e-commerce partners

No individual, end-user customer accounted for 10% or more of our net revenues during the nine months ended December 29, 2023 and December 30, 2022.

No individual, end-user customer accounted for 10% or more of our net revenues during the three months ended June 28, 2024 and June 30, 2023.

E-commerce partners that accounted for over 10% of our total billed and unbilled accounts receivable were as follows:

December 29, 2023 March 31, 2023

June 28, 2024 March 29, 2024

E-commerce partner A

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Historically, we have not incurred material costs as a result of obligations under these agreements, and we have not accrued any material liabilities related to such indemnification obligations in our Condensed Consolidated Financial Statements.

In connection with the sale of our Enterprise Security business to Broadcom, we assigned several leases to Broadcom or certain of its subsidiaries.

As a condition to consenting to the assignments, certain lessors required us to agree to indemnify the lessor under the applicable lease with respect to certain matters, including, but not limited to, losses arising out of Broadcom’s or such subsidiaries’ breach of payment obligations under the terms of such lease.

As with our other indemnification obligations discussed above and in general, it is not possible to determine the aggregate maximum potential loss under these indemnification agreements due to the limited history of prior indemnification claims and the unique facts and circumstances involved in each particular agreement.

As with our other indemnification obligations, such indemnification agreements might not be subject to maximum loss clauses, and to date, generally under our real estate obligations, we have not incurred material costs as a result of such obligations under our leases and have not accrued any liabilities related to such indemnification obligations in our Condensed Consolidated Financial Statements.

Litigation contingencies

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Columbia did not seek injunctive relief against us.

We believe that we have ceased the use of the technology found by the jury to infringe.

We believe that we have ceased the use of the technology found by the jury to

The jury also found that we did not fraudulently conceal its prosecution of U.S.

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We have complied with the court’s order and submitted a stipulation regarding the final calculations of all outstanding interest, royalties and attorneys’ fees.

We have posted the required surety bond and have noticed our appeal of the judgement to the Federal Circuit Court of Appeals.

At this time, our current estimate of the low end of the range of probable estimated losses from this matter is approximately $ 580 million, which we have accrued and recorded as part of Other long-term liabilities in the Condensed Consolidated Balance Sheets .

We have posted the required surety bond and have appealed the judgement to the Federal Circuit Court of Appeals, which remains pending.

At this time, our current estimate of probable losses from this matter is approximately $ 587 million, which we have accrued and recorded as part of Other long-term liabilities in the Condensed Consolidated Balance Sheets .

There is a reasonable possibility that a loss may be incurred in excess of our accrual for this matter;

however, such loss cannot be reasonably estimated.

however, such incremental loss cannot be reasonably estimated.

Securities Class Action and Derivative Litigation

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On September 16, 2014, the states of California and Florida intervened in the lawsuit, and the state of New York notified the Court that it would not intervene.

On October 3, 2014, the DOJ filed an amended complaint, which did not state a specific

damages amount.

On October 17, 2014, California and Florida combined their claims with those of the DOJ and the relator on behalf of New York in an Omnibus Complaint, and a First Amended Omnibus Complaint was filed on October 8, 2015;

On October 3, 2014, the DOJ filed an amended complaint, which did not state a specific damages amount.

On October 17, 2014, California and Florida combined their claims with those of the DOJ and the relator on

behalf of New York in an Omnibus Complaint, and a First Amended Omnibus Complaint was filed on October 8, 2015;

the state claims also do not state specific damages amounts.

On March 23, 2021, plaintiffs withdrew their demand for a jury trial and we consented to proceed with a bench trial, which concluded on March 24, 2022.

We settled with the State of Florida before trial and the State of New York during trial, both for immaterial amounts which have been paid.

On January 19, 2023, the Court issued its Findings of Facts and Conclusions of Law in which it found in favor of the United States in part and awarded damages and penalties in the amount of $ 1.3 million.

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The January 2023 judgment amount has been paid, and at this time, our current estimate of the low end of the range of probable estimated losses from this matter is $ 53 million, which we have accrued and recorded as part of Other current liabilities in the Condensed Consolidated Balance Sheets.

We are assessing our appeal options.

On February 13, 2024, we filed a motion to amend and correct the judgement in that the revised damages in the January 2024 decision include damages for products not included on the GSA schedule at issue in the case.

The judgement in the case is not yet final, nonetheless we have posted a surety bond and continue to assess our appeal options.

It is possible an appeal of the Court’s amended judgment by the plaintiffs, if brought, could lead to further claims or findings of violations of the False Claims Act and could be material to our results of operations and cash flows for any period.

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however, such loss cannot be reasonably estimated.

Additionally, on May 13, 2021, we reached a settlement in principle with the State of Florida to resolve all claims it asserted in the litigation for $ 0.5 million, plus the relator’s statutory attorney’s fees with respect to the State of Florida’s claims.

On February 28, 2022, we reached a settlement in principle with the State of New York and the relator to resolve all of the New York claims asserted in the litigation for $ 5 million.

Jumpshot Matters

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On October 29, 2021, staff at the FTC sent Avast a draft complaint and proposed settlement order.

We have been engaged in ongoing negotiations with the FTC staff and have reached an agreement on the terms of a settlement resolving this investigation, subject to the Commission’s approval, the terms of which are not expected to have a material impact on current or ongoing operations.

This includes a provision for a non-material amount of monetary relief, which has been accrued.

Absent a final settlement, any litigation or other legal proceeding between us and the FTC could result in material monetary remedies and/or compliance requirements that impose significant and material cost and resource burdens on us, and may impact our ability to use data in the future.

There can be no assurance that we will be successful in reaching a favorable settlement or in litigation.

Any remedies or compliance requirements resulting from a litigation or other legal proceedings could adversely affect our ability to operate our business or have a materially adverse impact on our financial results.

On February 27, 2020, the Czech Office for Personal Data Protection (the Czech DPA) initiated offense proceedings concerning Avast`s practices with respect to Jumpshot, which remain ongoing and we continue to evaluate our options.

In addition, we received a letter and notification before action from Stichting CUIC – Privacy Foundation for Collective Redress, a Dutch foundation (the Foundation).

We engaged in ongoing negotiations with the FTC staff and have reached a negotiated agreement on the terms of a Consent Decree resolving this investigation, the terms of which are not expected to have a material impact on current or ongoing operations.

This includes a provision for a non-material amount of monetary relief, which has been paid.

On February 27, 2020, the Czech Office for Personal Data Protection (the Czech DPA) initiated offense proceedings concerning Avast`s practices with respect to Jumpshot, the Czech DPA issued a decision in March 2022 finding that Avast had violated the GDPR and issued a fine of CZK 351 million, which is approximately $ 15 million.

Avast appealed the decision, which was affirmed by the Czech DPA on April 10, 2024.

Avast has now paid the fine levied by the DPA.

On June 15, 2024, Avast brought a judicial action in the administrative law court challenging the decision of the Czech DPA

On March 27, 2024, Stichting CUIC – Privacy Foundation for Collective Redress, a Dutch foundation (the Foundation), filed its writ of summons to initiate a collective action.

The Foundation has asserted it represents the interests of Avast customers in the Netherlands whose data was provided to Jumpshot and that by doing so Avast violated the requirements of the GDPR and other provisions in Dutch and European Union privacy and consumer law entitling those customers to damages and other compensation, all of which we dispute.

No specific amount of damages has been alleged and to date, no action has been filed.

At this stage, we are unable to assess whether any material loss or adverse effect is reasonably possible as a result of this notification before action or estimate the range of any potential loss.

No specific amount of damages has been alleged to date.

At this stage, we are unable to assess whether any material loss or adverse effect is reasonably possible or estimate the range of any potential loss.

On April 18, 2024, we received a letter before action from counsel in the United Kingdom asserting it may bring a representative action on behalf of a class of Avast users in the United Kingdom and Wales for breach of contract and misuse of private information and seeking unspecified damages and a permanent injunction.

No lawsuit has been commenced.

At this stage, we are unable to assess whether any material loss or adverse effect is reasonably possible or estimate the range of any potential loss.

On December 12, 2022, a putative class action, Lau v.

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and Jumpshot Inc ., was filed in the Northern District of California alleging violations of the Electronic Communications Privacy Act, California Invasion of Privacy Act, statutory larceny, unfair competition and various common law claims related to the provision of customer data to Jumpshot.

The complaint was dismissed in part, with leave to amend, and plaintiffs have now filed a First Amended Complaint which we have again moved to dismiss.

Such claims, to the extent related to Jumpshot, have now been dismissed from the case as has Jumpshot Inc.

as a defendant.

At this stage, we are unable to assess whether any material loss or adverse effect is reasonably possible as a result of this action or estimate the range of any potential loss.

2 unchanged sentences

Plaintiffs or regulatory agencies or authorities in these matters may seek recovery of large or indeterminate amounts or seek to impose sanctions, including significant monetary penalties, as well as equitable relief.

The monetary and other impact of these litigations, proceedings or actions may remain unknown for substantial periods of time.

The monetary and other impact of these litigations, proceedings or actions may remain

unknown for substantial periods of time.

Further, an unfavorable resolution of litigations, proceedings or actions could have a material adverse effect on our business, financial condition, and results of operations and cash flows.

The amount of time that

will be required to resolve these matters is unpredictable, and these matters may divert management’s attention from the day-to-day operations of our business.

The amount of time that will be required to resolve these matters is unpredictable, and these matters may divert management’s attention from the day-to-day operations of our business.

Any future investigations or additional lawsuits may also adversely affect our business, financial condition, results of operations and cash flows.

2 unchanged sentences

The final resolution of these lawsuits, individually or in the aggregate, is not expected to have a material adverse effect on our business, results of operations, financial condition or cash flows.

Subsequent Events

On January 26, 2024, we received an $ 899 million income tax refund related to the filing of our fiscal 2023 tax return, which was recorded net of allowances as part of Other current assets in the Condensed Consolidated Balance Sheets as of December 29, 2023.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements