What changed in this filing

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Item 1. Financial Statements

2024-10-31 compared with 2024-08-07 · 180 added, 116 removed, 644 unchanged (31% of the section changed)

3 unchanged sentences

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

June 28, 2024 March 29, 2024

September 27, 2024 March 29, 2024

Current assets:

27 unchanged sentences

3,000 shares authorized;

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

616 and 623 shares issued and outstanding as of September 27, 2024 and March 29, 2024, respectively

Accumulated other comprehensive income (loss) 14 11

6 unchanged sentences

(Unaudited, in millions, except per share amounts)

Three Months Ended

June 28, 2024 June 30, 2023

Three Months Ended Six Months Ended

September 27, 2024 September 29, 2023 September 27, 2024 September 29, 2023

Net revenues $ 974 $ 945 $ 1,939 $ 1,888

23 unchanged sentences

(Unaudited, in millions)

Three Months Ended

June 28, 2024 June 30, 2023

Three Months Ended Six Months Ended

September 27, 2024 September 29, 2023 September 27, 2024 September 29, 2023

Net income (loss) $ 161 $ 147 $ 342 $ 334

8 unchanged sentences

(Unaudited, in millions, except share amounts)

Three months ended June 28, 2024

Three months ended September 27, 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 June 28, 2024 615 $ 1,959 $ 6 $ 5 $ 1,970

Net income (loss) — — — 161 161

Other comprehensive income (loss), net of taxes — — 8 — 8

Common stock issued under employee stock incentive plans 1 6 — — 6

Shares withheld for taxes related to vesting of stock units — ( 1 ) — — ( 1 )

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

— ( 2 ) — ( 77 ) ( 79 )

Stock-based compensation — 33 — — 33

Balance as of September 27, 2024 616 $ 1,995 $ 14 $ 89 $ 2,098

Six months ended September 27, 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 March 29, 2024 623 $ 2,227 $ 11 $ ( 98 ) $ 2,140

3 unchanged sentences

Shares withheld for taxes related to vesting of stock units

( 1 ) ( 25 ) — — ( 25 )

Repurchases of common stock (1)

3 unchanged sentences

Stock-based compensation — 64 — — 64

Balance as of September 27, 2024 616 $ 1,995 $ 14 $ 89 $ 2,098

(1) Amount includes excise tax on share repurchases.

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 September 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 June 30, 2023 639 $ 2,697 $ 36 $ ( 446 ) $ 2,287

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)

Net income (loss) — — — 147 147

Other comprehensive income (loss), net of taxes — — ( 30 ) — ( 30 )

Common stock issued under employee stock incentive plans 2 6 — — 6

Shares withheld for taxes related to vesting of stock units

— ( 1 ) — — ( 1 )

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

— ( 82 ) — — ( 82 )

Stock-based compensation — 35 — — 35

Balance as of September 29, 2023 641 $ 2,655 $ 6 $ ( 299 ) $ 2,362

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

Shares Amount

9 unchanged sentences

Stock-based compensation — 72 — — 72

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

(1) Amount includes excise tax on share repurchases.

Balance as of September 29, 2023 641 $ 2,655 $ 6 $ ( 299 ) $ 2,362

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

2 unchanged sentences

(Unaudited, in millions)

Three Months Ended

June 28, 2024 June 30, 2023

Six Months Ended

September 27, 2024 September 29, 2023

OPERATING ACTIVITIES:

1 unchanged sentence

Amortization and depreciation 211 250

Impairments and write-offs of current and long-lived assets 3 —

Stock-based compensation expense 64 72

2 unchanged sentences

Non-cash operating lease expense 7 11

Other ( 2 ) 18

Changes in operating assets and liabilities, net of acquisitions:

9 unchanged sentences

Purchases of property and equipment ( 4 ) ( 9 )

Purchase of non-marketable equity investments ( 4 ) —

Proceeds from the sale of property — 13

Other ( 2 ) ( 1 )

2 unchanged sentences

Repayments of debt ( 88 ) ( 266 )

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

Tax payments related to vesting of stock units ( 25 ) ( 20 )

20 unchanged sentences

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

The results of operations for the three and six months ended September 27, 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 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.

Unless otherwise stated, references to three and six month periods in this report relate to fiscal periods ended September 27, 2024 and September 29, 2023.

The three and six months ended September 27, 2024 and September 29, 2023 each consisted of 13 and 26 weeks, respectively.

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

2 unchanged sentences

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.

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 assessment 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.

3 unchanged sentences

Significant accounting policies

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.

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 and six months ended September 27, 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

1 unchanged sentence

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.

In the first quarter of fiscal 2025, we changed the 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;

2 unchanged sentences

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.

The Condensed Consolidated Statement of Operations for the three months ended September 29, 2023 included a decrease to net revenues of $ 3 million and a decrease to income tax expense (benefit) of $ 1 million.

The Condensed Consolidated Statement of Operations for the six months ended September 29, 2023 included a decrease to net revenues of $ 6 million and a decrease to income tax expense (benefit) of $ 2 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.

The ASU also clarifies 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.

11 unchanged sentences

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.

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

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 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.

During the second quarter of fiscal year 2025, we recognized an immaterial impairment representing the difference between the fair value less cost to sell and the carrying value of the remaining land and building in Dublin, Ireland.

As of September 27, 2024, this property remains classified as assets held for sale.

During the second quarter of fiscal 2025, we determined certain land and buildings in Tettnang, Germany, which were previously reported as property and equipment, net as of March 29, 2024, now qualifies as held for sale classification.

As a result, we reclassified the aggregate of $ 12 million carrying value from property and equipment, net to assets held for sale in our Condensed Consolidated Balance Sheet.

Upon reclassification, we recognized an immaterial impairment representing the difference between the fair value less cost to sell and the carrying value of the property.

During the three and six months ended September 27, 2024, we recognized immaterial impairments on our held for sale properties, which was included in Other Income (expense), net in our Condensed Consolidated Statement of Operations, because the fair value less costs to sell is less than the carrying value of our properties.

Contract liabilities

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.

During the three and six months ended September 27, 2024, we recognized $ 733 million and $ 1,261 million from the contract liabilities balances as of June 28, 2024 and March 29, 2024, respectively.

During the three and six months ended September 29, 2023, we recognized $ 705 million and $ 1,232 million from the contract liabilities balances as of June 30, 2023 and March 31, 2023, respectively.

Remaining performance obligations

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.

As of September 27, 2024, we had $ 1,232 million of remaining performance obligations, excluding customer deposit liabilities of $ 595 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.

4 unchanged sentences

Translation adjustments

Balance as of June 28, 2024 $ 10,205

Balance as of September 27, 2024 $ 10,235

Intangible assets, net

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

June 28, 2024 March 29, 2024

September 27, 2024 March 29, 2024

(In millions) Gross

10 unchanged sentences

Amortization expense for purchased intangible assets is summarized below:

Three Months Ended Condensed Consolidated Statements of Operations Classification

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

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

(In millions) September 27, 2024 September 29, 2023 September 27, 2024 September 29, 2023

Customer relationships and other $ 44 $ 61 $ 87 $ 122 Operating expenses

1 unchanged sentence

Total $ 102 $ 119 $ 202 $ 237

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

As of September 27, 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) June 28, 2024 March 29, 2024

(In millions) September 27, 2024 March 29, 2024

Cash $ 583 $ 408

2 unchanged sentences

Accounts receivable, net:

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

(In millions) September 27, 2024 March 29, 2024

Accounts receivable $ 166 $ 165

2 unchanged sentences

Other current assets:

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

(In millions) September 27, 2024 March 29, 2024

Prepaid expenses $ 138 $ 142

3 unchanged sentences

Property and equipment, net:

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

(In millions) September 27, 2024 March 29, 2024

Land $ 13 $ 13

8 unchanged sentences

Other long-term assets:

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

(In millions) September 27, 2024 March 29, 2024

Non-marketable equity investments $ 140 $ 136

5 unchanged sentences

Short-term contract liabilities:

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

(In millions) September 27, 2024 March 29, 2024

Deferred revenue $ 1,154 $ 1,200

2 unchanged sentences

Other current liabilities:

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

(In millions) September 27, 2024 March 29, 2024

Income taxes payable $ 138 $ 198

7 unchanged sentences

Other long-term liabilities:

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

(In millions) September 27, 2024 March 29, 2024

Long-term accrued legal fees $ 591 $ 586

2 unchanged sentences

Long-term income taxes payable:

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

(In millions) September 27, 2024 March 29, 2024

Unrecognized tax benefits (including interest and penalties) $ 1,395 $ 1,346

3 unchanged sentences

Other income (expense), net:

Three Months Ended

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

Three Months Ended Six Months Ended

(In millions) September 27, 2024 September 29, 2023 September 27, 2024 September 29, 2023

Interest income $ 6 $ 6 $ 14 $ 12

1 unchanged sentence

Gain (loss) on sale of properties

Other 1 — 1 1

Other income (expense), net $ 5 $ 7 $ 17 $ 19

Supplemental cash flow information:

Three Months Ended

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

Six Months Ended

(In millions) September 27, 2024 September 29, 2023

Income taxes paid (received), net of refunds

2 unchanged sentences

Non-cash operating activities:

Operating lease assets obtained in exchange for operating lease liabilities $ 4 $ —

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

$ ( 12 ) $ ( 7 )

Non-cash investing and financing activities:

Purchases of property and equipment in current liabilities $ 3 $ 4

Financial Instruments and Fair Value Measurements

9 unchanged sentences

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

June 28, 2024 March 29, 2024

September 27, 2024 March 29, 2024

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

1 unchanged sentence

Interest rate swaps — — — 16 — 16

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

$ 154 $ 154 $ — $ 454 $ 438 $ 16

Interest rate swaps $ 3 $ — $ 3 $ — $ — $ —

Total liabilities

$ 3 $ — $ 3 $ — $ — $ —

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

As of September 27, 2024 and March 29, 2024, the carrying value of our non-marketable equity investments was $ 140 million and $ 136 million, respectively.

Current and long-term debt

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.

As of September 27, 2024 and March 29, 2024, the total fair value of our current and long-term fixed rate debt was $ 2,650 million and $ 2,624 million, respectively.

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

4 unchanged sentences

The following summarizes our lease costs:

Three Months Ended

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

Three Months Ended Six Months Ended

(In millions) September 27, 2024 September 29, 2023 September 27, 2024 September 29, 2023

Operating lease costs $ 4 $ 2 $ 7 $ 6

3 unchanged sentences

Other information related to our operating leases was as follows:

June 28, 2024 March 29, 2024

September 27, 2024 March 29, 2024

Weighted-average remaining lease term 5.0 years 4.6 years

1 unchanged sentence

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

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

As of September 27, 2024, the maturities of our lease liabilities by fiscal year are as follows:

(In millions)

Remainder of 2025 $ 8

Thereafter 13

Total lease payments 69

3 unchanged sentences

(In millions, except percentages)

June 28, 2024 March 29, 2024 Effective

September 27, 2024 March 29, 2024 Effective

Interest Rate

19 unchanged sentences

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

June 28, 2024 March 29, 2024

September 27, 2024 March 29, 2024

Term A Facility due September 12, 2027 6.85 % 7.18 %

Term B Facility due September 12, 2029 7.00 % 7.43 %

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

As of September 27, 2024, the future contractual maturities of debt by fiscal year are as follows:

(In millions)

18 unchanged sentences

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;

As of September 27, 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.

As of September 27, 2024, we had $ 10 million in letters of credit.

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.

5 unchanged sentences

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.

As of September 27, 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).

4 unchanged sentences

Interest on these series of notes is payable semi-annually in arrears on March 31 and September 30 for both the 6.75 % Senior Notes and 7.125 % Senior Notes, commencing on March 31, 2023.

We may redeem some or all of the 6.75 % Senior Notes due 2027 and 7.125 % Senior Notes due 2030 at any time, subject to a prepayment penalty that expires one year prior to the maturity of each respective note.

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.

On and after the applicable First Call Dates, we may redeem the notes of a series at our option, in whole or in part, at any time and from time to time, at a set redemption price.

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.

16 unchanged sentences

Summary of derivative instruments

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

The following table summarizes our outstanding derivative instruments as of September 27, 2024 and March 29, 2024:

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

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

(In millions) September 27, 2024 March 29, 2024 September 27, 2024 March 29, 2024 September 27, 2024 March 29, 2024

Foreign exchange contracts not designated as hedging instrument (1)

3 unchanged sentences

Total $ 1,324 $ 1,345 $ — $ 16 $ 3 $ —

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

(1) The fair values of the foreign exchange contracts are less than $ 1 million as of September 27, 2024 and March 29, 2024.

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

Three Months Ended

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

Three Months Ended Six Months Ended

(In millions) September 27, 2024 September 29, 2023 September 27, 2024 September 29, 2023

Interest rate swap contracts designated as cash flow hedge

1 unchanged sentence

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

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

(In millions) September 27, 2024 September 29, 2023 September 27, 2024 September 29, 2023

Foreign exchange contracts not designated as hedging instrument $ 5 $ ( 6 ) $ 2 $ ( 9 ) Other income (expense), net

2 unchanged sentences

Total $ 9 $ ( 2 ) $ 10 $ ( 2 )

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.

As of September 27, 2024, we estimate that less than $ 1 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

9 unchanged sentences

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

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

As of September 27, 2024, we have incurred costs of $ 126 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

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

Three Months Ended Six Months Ended

(In millions) September 27, 2024 September 29, 2023 September 27, 2024 September 29, 2023

Severance and termination benefit costs $ 2 $ 11 $ 1 $ 22

Contract cancellation charges — 1 — 2

Stock-based compensation charges — 1 — 1

Other exit and disposal costs 1 4 1 9

1 unchanged sentence

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

Three Months Ended

Three Months Ended Six Months Ended

(In millions, except percentages)

June 28, 2024 June 30, 2023

September 27, 2024 September 29, 2023 September 27, 2024 September 29, 2023

Income (loss) before income taxes $ 258 $ ( 144 ) $ 534 $ 57

1 unchanged sentence

Effective tax rate 38 % 202 % 36 % ( 486 ) %

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.

Our effective tax rate for the three and six months ended September 27, 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 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.

Our effective tax rate for the three and six months ended September 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.

taxation on foreign earnings.

Stockholders' Equity

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.

On October 30, 2024, we announced that our Board of Directors declared a cash dividend of $ 0.125 per share of common stock to be paid in December 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.

5 unchanged sentences

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 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

As of September 27, 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 six months ended September 27, 2024 and September 29, 2023:

Six Months Ended

(In millions, except per share amounts)

June 28, 2024 June 30, 2023

September 27, 2024 September 29, 2023

Number of shares repurchased 11 3

1 unchanged sentence

Aggregate purchase price $ 272 $ 41

We did not have any stock repurchases during the three months ended September 27, 2024 and September 29, 2023.

Accumulated other comprehensive income (loss)

5 unchanged sentences

Other comprehensive income (loss), net of taxes 22 ( 19 ) 3

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

Balance as of September 27, 2024 $ 17 $ ( 3 ) $ 14

Stock-Based Compensation

6 unchanged sentences

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

Three Months Ended

Three Months Ended Six Months Ended

(In millions)

June 28, 2024 June 30, 2023

September 27, 2024 September 29, 2023 September 27, 2024 September 29, 2023

Cost of revenues $ 1 $ 1 $ 2 $ 2

2 unchanged sentences

General and administrative 14 13 26 29

Restructuring and other costs — 1 — 1

Total stock-based compensation expense $ 33 $ 35 $ 64 $ 72

1 unchanged sentence

$ ( 4 ) $ ( 4 ) $ ( 8 ) $ ( 9 )

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.

As of September 27, 2024, the total unrecognized stock-based compensation expense related to our unvested stock-based awards was $ 238 million, which will be recognized over an estimated weighted-average amortization period of 2.0 years.

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

Three Months Ended

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

Six Months Ended

(In millions, except per grant data) September 27, 2024 September 29, 2023

Restricted stock units (RSUs):

12 unchanged sentences

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.

As of September 27, 2024 and March 29, 2024, current dividends payable related to DER was $ 4 million 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 $ 4 million, respectively, recorded as part of Other long-term liabilities in the Condensed Consolidated Balance Sheets.

Net Income (Loss) Per Share

3 unchanged sentences

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

Three Months Ended

Three Months Ended Six Months Ended

(In millions, except per share amounts)

June 28, 2024 June 30, 2023

September 27, 2024 September 29, 2023 September 27, 2024 September 29, 2023

Net income (loss) $ 161 $ 147 $ 342 $ 334

11 unchanged sentences

The following table summarizes net revenues for our major solutions:

Three Months Ended

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

Three Months Ended Six Months Ended

(In millions) September 27, 2024 September 29, 2023 September 27, 2024 September 29, 2023

Consumer security revenues $ 615 $ 601 $ 1,222 $ 1,198

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Total cyber safety revenues

962 929 1,913 1,855

Legacy revenues 12 16 26 33

Total net revenues

(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.

$ 974 $ 945 $ 1,939 $ 1,888

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.

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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)

Three Months Ended Six Months Ended

(In millions) September 27, 2024 September 29, 2023 (1)

September 27, 2024 September 29, 2023 (1)

Americas $ 641 $ 618 $ 1,277 $ 1,232

EMEA 233 227 466 453

APJ 100 100 196 203

Total net revenues (1)

$ 974 $ 945 $ 1,939 $ 1,888

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 June 28, 2024, total net revenues include an unfavorable foreign exchange impact of $ 7 million primarily from APJ.

(1) 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.

When changes occur, we recast historical amounts to match the current methodology, such as for the three and six months ended September 29, 2023 where we aligned allocation methodologies across similar product categories.

Revenues from customers inside the U.S.

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

were $ 584 million and $ 1,163 million during the three and six months ended September 27, 2024, respectively, and $ 563 million and $ 1,121 million during the three and six months ended September 29, 2023, respectively.

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

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and internationally in various foreign subsidiaries:

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

(In millions) September 27, 2024 March 29, 2024

International 400 379

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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

(In millions) September 27, 2024 March 29, 2024

Other countries (1)

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Significant customers and e-commerce partners

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.

No individual, end-user customer accounted for 10% or more of our net revenues during the six months ended September 27, 2024 and September 29, 2023.

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

June 28, 2024 March 29, 2024

September 27, 2024 March 29, 2024

E-commerce partner A

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Litigation contingencies

From time to time, we are involved in legal proceedings, including, but not limited to, regulatory proceedings, claims, mediations, arbitrations and litigation, arising out of the ordinary court of business.

We evaluate contingent liabilities including threatened or pending litigation in accordance with the authoritative guidance on contingencies.

We assess the likelihood of any adverse judgements or outcomes from potential claims or proceedings for accrual or disclosure in our Condensed Consolidated Financial Statements.

A determination of the amount of an accrual required, if any, for these contingencies is made after the analysis of each separate matter.

Because of uncertainties related to these matters, we base our estimates on the information available at the time of our assessment.

As additional information becomes available, we reassess the potential liability related to our pending claims and litigation and may revise our estimates and disclosures.

We classify our accruals for litigation contingencies in our Condensed Consolidated Balance Sheets as part of Other current liabilities or Other long-term liabilities based on when we expect to pay the claim, if at all.

If the period of expected payment is within one year, we classify the amount as short-term;

otherwise, it is classified as long-term.

The exact timing of payment is subject to uncertainty and could change significantly from our estimated payment period.

Trustees of the University of Columbia in the City of New York v.

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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

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

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

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At this time, our current estimate of probable losses from this matter is approximately $ 591 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;

There is a reasonable

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

however, such incremental loss cannot be reasonably estimated.

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On May 24, 2021, the parties reached a proposed settlement and release of all claims in the class action, for $ 70 million, and on June 8, 2021, the parties executed a Stipulation and Agreement of Settlement, exclusive of any claims that may be brought by shareholders who opted out of the class action.

Of the $ 70 million, $ 67 million was covered under the applicable insurance policy with the remainder to be paid by us.

The Court approved the settlement on February 12, 2022.

Of the $ 70 million, $ 67 million was covered under the applicable insurance policy with the remainder paid by us into escrow in September 2021.

The Court approved the settlement on February 12, 2022, releasing the settlement payment from escrow.

On November 22, 2021, investment funds managed by Orbis Investment Management Ltd.

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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 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.

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The resulting Judgment was filed by the Court on January 20, 2023.

On February 16, 2023, plaintiffs filed Motions to Amend Judgment to revive the damages claimed at trial.

On February 16, 2023, plaintiffs filed Motions to Amend Judgment to

revive the damages claimed at trial.

On January 16, 2024, the Court granted in part and denied in part the United States’ Motion to Amend and awarded $ 53 million in damages and penalties.

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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.

Resolution of False Claims Act investigations can ultimately result in the payment of somewhere between one and three times the actual damages proven by the government, plus civil penalties.

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

however, such loss cannot be reasonably estimated.

The Court denied that motion on August 30, 2024, and subsequently issued its Judgment on September 30, 2024.

The parties’ deadline to file a Notice of Appeal was October 29, 2024.

Neither party filed a Notice of Appeal and we expect to pay the judgment, including post-judgment interest, in November 2024.

In addition, we are currently negotiating the amount of attorneys’ fees owed to the Relator.

If a negotiated resolution as to fees is not reached, Relator’s deadline to bring a motion for fees is December 2, 2024.

Jumpshot Matters

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

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.

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 now final.

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

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

That matter is still pending.

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.

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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.

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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.

During the three and six months ended September 27, 2024, we incurred $ 25 million and $ 40 million, respectively, related to the estimated accrual and final resolutions of our litigation contingencies in our Condensed Consolidated Statement of Operations.

During the three and six months ended September 29, 2023, we incurred $ 347 million and $ 352 million, respectively, related to the estimated accrual and final resolutions of our litigation contingencies in our Condensed Consolidated Statement of Operations.

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