What changed in this filing

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Item 2. Management’s Discussion and Analysis

2025-08-13 compared with 2025-01-31 · 124 added, 142 removed, 145 unchanged (65% of the section changed)

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In addition, projections of our future financial performance;

beliefs regarding our business and strategies;

anticipated growth and trends in our businesses and in our industries;

the consummation of or anticipated impacts of acquisitions (including our ability to achieve synergies from acquisitions, including Avast), divestitures, restructurings, stock repurchases, financings, debt repayments and investment activities;

the consummation of or anticipated impacts of acquisitions (including our ability to achieve synergies from acquisitions, including, but not limited to, Avast and MoneyLion), expectations about certain markets, divestitures, restructurings, stock repurchases, financings, debt repayments, investment activities and our liquidity;

the outcome or impact of pending litigation, claims or disputes;

risks associated with third party providers;

evolving regulations and increased scrutiny from regulators;

our intent to pay quarterly cash dividends in the future;

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anticipated tax rates, benefits and expenses;

the impact of inflation, fluctuations in foreign currency exchange rates, changes in interest rates, ongoing and new geopolitical conflicts, and other global macroeconomic factors on our operations and financial performance;

the global macroeconomic outlook, including but not limited to, the impact of inflation, fluctuations in foreign currency exchange rates, changes in interest rates, and the impact of new trade policy, including the implementation of global tariffs;

retaliatory trade regulations and policies;

economic disruptions caused by the potential impact of volatility and conflict in the geopolitical and economic environment;

general uncertainty in the financial and capital markets;

and other global macroeconomic factors on our operations and financial performance;

and other characterizations of future events or circumstances are forward-looking statements.

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We encourage you to read those sections carefully.

There may also be other factors that have not been anticipated or that are not described in our periodic filings with the SEC, generally because we did not believe them to be significant at the time, which could cause actual results to differ materially from our projections and expectations.

There may also be other factors that have not been anticipated or that are not described in our periodic filings with the Securities and Exchange Commission (SEC), generally because we did not believe them to be significant at the time, which could cause actual results to differ materially from our projections and expectations.

All forward-looking statements should be evaluated with the understanding of their inherent uncertainty.

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

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

We have built a technology platform that brings together software and service capabilities within these three categories into a comprehensive and easy-to-use integrated platform across our brands.

We bring award-winning products and services in cybersecurity, privacy and identity protection to approximately 500 million users in more than 150 countries so they can live their digital lives safely, privately, and confidently today and for generations to come.

Gen Digital Inc.

is a global company powering Digital Freedom through its family of trusted consumer brands including Norton, Avast, LifeLock, MoneyLion, and more.

Our portfolio spans Cyber Safety Platform and Trust-Based Solutions, delivering intuitive, AI-powered services that enable people to confidently grow, manage, and protect their digital and financial lives.

From cybersecurity and online privacy to identity protection and financial empowerment, our products and services are designed to meet the real-world needs of today’s digital generation.

Through a foundation of trust and innovation, our brands deliver the protection and confidence people need to thrive in a digital-first world.

Our Cyber Safety Platform delivers technology solutions and superior threat protection to help people navigate the digital world, securely, privately and with confidence.

Our Trust-Based Solutions provide innovative solutions and insights that empower consumers to manage their identity, reputation and finances confidently to achieve freedom.

Fiscal calendar

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

The three and nine months ended December 27, 2024 and December 29, 2023 each consisted of 13 and 39 weeks, respectively.

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

The three months ended July 4, 2025 consisted of 14 weeks, whereas the three months ended June 28, 2024 consisted of 13 weeks.

Our 2026 fiscal year consists of 53 weeks and ends on April 3, 2026.

Key financial metrics

The following tables provide our key financial metrics for the periods presented:

Three Months Ended Nine Months Ended

(In millions, except for per share amounts) December 27, 2024 December 29, 2023 December 27, 2024 December 29, 2023

Three Months Ended

(In millions, except for per share amounts) July 4, 2025 June 28, 2024

Net revenues $ 1,257 $ 965

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Net income (loss) per share - diluted $ 0.22 $ 0.29

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

Cash and cash equivalents $ 883 $ 846

(In millions) July 4, 2025 March 28, 2025

Cash, cash equivalents and restricted cash

$ 828 $ 1,006

Contract liabilities $ 1,873 $ 1,923

Below are our financial highlights for the third quarter of fiscal 2025, compared to the corresponding period in the prior year:

• Net revenues increased $38 million, primarily due to higher sales in both our consumer security and identity and information protection products.

• Operating income increased $42 million, primarily due to increased net revenues and lower amortization of intangible assets, offset by an increase in revenue share costs.

• Net income increased $17 million and net income per share increased $0.04, primarily due to increased operating income discussed above and decreased interest expense associated with our Term B facility.

This is offset by an impairment expense on our non-marketable equity investments and increase in income tax expense.

Below are our financial highlights for the first nine months of fiscal 2025, compared to the corresponding period in the prior year:

• Net revenues increased $89 million, primarily due to higher sales in both our consumer security and identity and information protection products.

• Operating income increased $480 million, primarily due to increased net revenues, decrease in legal costs related to ongoing litigation, lower amortization of intangible assets and restructuring costs related to our acquisition of Avast.

• Net income increased $25 million and net income per share increased $0.06, primarily due to increased operating income discussed above and decreased interest expense associated with our Term B facility.

This is offset by an impairment expense on our non-marketable equity investments and the absence of an income tax benefit in the second quarter of fiscal 2024.

• Cash and cash equivalents increased by $37 million compared to March 29, 2024, primarily due cash generated from operating activities during the first nine months of fiscal 2025.

This is partially offset by repurchases of our common stock, cash interest paid, dividends paid to shareholders, voluntary prepayments of our Term B facility, and mandatory principal amortization payments of our Term A and B facility.

• Contract liabilities decreased $35 million compared to March 29, 2024, primarily due to billing seasonality and fluctuations in foreign currency rates.

Proposed Acquisition of MoneyLion

On December 10, 2024, we entered into a definitive agreement to acquire MoneyLion Inc.

See Note 4 of the Notes to the Condensed Consolidated Financial Statements for further information about the proposed acquisition.

Subsequent Event

On January 16, 2025, we notified e-commerce partner B (Refer to Note 17 of the Notes to the Condensed Consolidated Financial Statements for information about e-commerce partner B) of our termination of the agreement and subsequently entered into a legal settlement agreement with them.

Refer to Note 19 of the Notes to the Condensed Consolidated Financial Statements for further information about this notice of termination and settlement agreement.

Fiscal 2025 Acquisition

Refer to Note 19 of the Notes to the Condensed Consolidated Financial Statements for further information about the acquisition completed on January 28, 2025.

Below are our financial highlights for the first quarter of fiscal 2026, compared to the corresponding period in the prior year:

• Net revenues increased $292 million, primarily due to higher sales in both our Cyber Safety Platform products and Trust-Based Solutions, including an increase of $168 million in Trust-Based Solutions due to the acquisition of MoneyLion, and an increase of $87 million due to the favorable impact from the additional week in the first quarter of fiscal 2026.

• Operating income increased $29 million, primarily due to increased net revenues, offset by an increase in cost of revenues and operating expenses.

• Net income decreased $46 million and net income per share decreased $0.07, primarily due to an increase in income tax expense offset by an increase in operating income as discussed above.

Acquisition of MoneyLion

On April 17, 2025, we completed our acquisition of MoneyLion Inc.

MoneyLion extends our identity solutions into offering comprehensive financial wellness through MoneyLion’s full-featured personal finance platform that includes credit building and financial management services.

See Note 4 of the Notes to the Condensed Consolidated Financial Statements for further information about the acquisition.

GLOBAL MACROECONOMIC CONDITIONS

As a global company, our results of operations and cash flows may be influenced by global macroeconomic conditions, including, but not limited to, foreign currency exchange rate fluctuations, the impact of interest rate fluctuations, inflation, geopolitical conflicts and/or pressures, including the unknown impacts of current and future trade regulations, instability in the global banking sector, economic slowdown and recession risks, any of which may persist for an extended period.

As a global company, our results of operations and cash flows may be influenced by global macroeconomic conditions, including, but not limited to, increased tariffs and an uncertain global trade environment, foreign currency exchange rate fluctuations, the impact of interest rate fluctuations, elevated inflation, ongoing and new geopolitical conflicts, including the impacts of current and future trade regulations, instability in the global banking sector, economic slowdown and recession risks, any of which may be difficult to predict and may persist for an extended period.

Despite challenging global macroeconomic conditions and although we recognize that inflation and broader economic uncertainty can influence customer behavior, we are confident in the long-term overall health of our business, the strength of our product offerings and our ability to continue to execute on our strategy, including bringing award-winning products and services in cybersecurity and offering comprehensive financial wellness to our customers.

We continue to monitor the direct and indirect impacts of these global macroeconomic or other geopolitical factors.

The broader implications of these events on our business, results of operations, and overall financial position remain uncertain and could result in further adverse impacts to our reported results.

If the economic uncertainty continues, we may experience additional negative impacts on customer renewals, customer collections, sales and marketing efforts, customer deployments, product development, or other financial metrics.

Additional broader implications of these events on our business, results of operations, and overall financial position still remain uncertain and could result in further adverse impacts to our reported results.

For further discussion of the potential impacts of global macroeconomic conditions on our business, please see Part 1, Item III and “Risk Factors” in Part II, Item 1A below.

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Should any of these estimates, judgements or assumptions change or prove to have been incorrect, it could have a material impact on our results of operations, financial position and cash flows.

There have been no material changes in the matters for which we make critical accounting estimates in the preparation of our Condensed Consolidated Financial Statements during the three and nine months ended December 27, 2024.

Our critical accounting policies and estimates were disclosed in Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations included in our Annual Report on Form 10-K for the fiscal year ended March 28, 2025 and significant policies adopted as a result of our acquisition of MoneyLion are included in Note 1 on this Form 10-Q.

been no other material changes in the matters for which we make critical accounting estimates in the preparation of our Condensed Consolidated Financial Statements during the three months ended July 4, 2025.

RESULTS OF OPERATIONS

The following table sets forth our Condensed Consolidated Statements of Operations data as a percentage of net revenues for the periods indicated:

Three Months Ended Nine Months Ended

December 27, 2024 December 29, 2023 December 27, 2024 December 29, 2023

Three Months Ended

July 4, 2025 June 28, 2024

Net revenues 100 % 100 %

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Percentages may not add due to rounding.

Three Months Ended Nine Months Ended

(In millions, except for percentages) December 27, 2024 December 29, 2023 Change in % December 27, 2024 December 29, 2023 Change in %

Three Months Ended

(In millions, except for percentages) July 4, 2025 June 28, 2024 Change in %

Net revenues $ 1,257 $ 965 30 %

Three Months Ended December 27, 2024 Compared with Three Months Ended December 29, 2023

Net revenues increased $38 million, due to a $21 million increase in sales of our consumer security products and a $20 million increase in sales of our identity and information protection products.

This was partially offset by a $3 million decrease in our legacy product offerings.

Nine Months Ended December 27, 2024 Compared with Nine Months Ended December 29, 2023

Net revenues increased $89 million, due to a $54 million increase in sales of our identity and information protection products and a $45 million increase in sales of our consumer security products.

This was partially offset by a $10 million decrease in our legacy product offerings.

This is inclusive of $9 million of foreign exchange headwinds, in our consumer security solutions.

Three Months Ended July 4, 2025 Compared with Three Months Ended June 28, 2024

Net revenues increased $292 million, due to an $89 million increase in sales of our Cyber Safety Platform products and a $203 million increase in sales of our Trust-Based Solutions, including a $168 million increase in Trust-Based Solutions due to the acquisition of MoneyLion.

Net revenues also increased $87 million due to the favorable impact from the additional week in the first quarter of fiscal 2026, impacting both segment financials.

Specifically, the additional week contributed $56 million to our Cyber Safety Platform and $31 million to Trust-Based Solutions.

Performance Metrics

We regularly monitor a number of metrics in order to measure our current performance and estimate our future performance.

We believe these key operating metrics are useful to investors because management uses these metrics to assess the growth of our business and the effectiveness of our marketing and operational strategies.

We believe these key operating metrics are useful to investors because management uses these metrics to assess the growth of

our business and the effectiveness of our marketing and operational strategies.

Our metrics may be calculated in a manner different than similar metrics used by other companies.

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Three Months Ended

(In millions, except for per user amounts) December 27, 2024 December 29, 2023

Direct customer revenues $ 869 $ 834

(In millions)

July 4, 2025 June 28, 2024

Cyber Safety Platform $ 869 $ 780

Trust-Based Solutions 388 185

Total net revenues

$ 1,257 $ 965

Direct revenues

$ 1,068 $ 852

Partner revenues

Total cyber safety revenues

Legacy revenues (1)

Direct customer count (at quarter end)

Direct average revenue per user (ARPU) $ 7.27 $ 7.18

Retention rate

(1) Legacy revenues 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.

We define direct customer count as active paid users of our products and solutions who have a direct billing and/or registration relationship with us at the end of the reported period.

We exclude users on free trials from our direct customer count.

Users who have indirectly purchased and/or registered for our products or solutions through partners are excluded unless such users convert or renew their subscription directly with us or sign up for a paid membership through our web stores or third-party app stores.

Total net revenues

$ 1,257 $ 965

Total bookings

$ 1,202 $ 913

Total paid customers

Revenue from Cyber Safety Platform increased $89 million due to growth across our cyber safety membership offerings and the additional week in the first quarter of fiscal 2026.

Revenue from Trust Based Solutions increased $203 million, primarily due to the acquisition of MoneyLion, continued growth in our identity point solutions and the additional week in the first quarter of fiscal 2026.

Direct revenue reflects subscriptions sold directly through e-commerce or mobile channels, and revenue generated from financial transactions directly made through Gen properties or marketplaces.

Partner revenue reflects partner-sourced and channel revenue via retailers, employee benefits, telcos, publishers, and strategic partnerships, including revenue generated from products sold through our financial marketplace.

Total bookings are defined as customer orders received that are expected to generate net revenues in the future.

We present the operational metric of bookings because it reflects customers’ demand for our products and services and to assist readers in analyzing our performance in future periods.

We define total paid customers as active paid users of our products and solutions at the end of the reported period.

It also includes individuals with a unique account and at least one paid transaction in the trailing twelve months, whether through our first-party personal finance products, or transacting through our financial marketplace.

We exclude users on free trials and those who have not actively transacted in the trailing twelve months.

The methodologies used to measure these metrics require judgment and are subject to change due to improvements or revisions to our methodology.

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We generally do not intend to update previously disclosed metrics for any such inaccuracies or adjustments that are deemed not material.

ARPU is calculated as estimated direct customer revenues for the period divided by the average direct customer count for the same period, expressed as a monthly figure.

Non-GAAP estimated direct customer revenues and ARPU have limitations as analytical tools and should not be considered in isolation or as a substitute for U.S.

GAAP estimated direct customer revenues or other U.S.

GAAP measures.

We monitor ARPU because it helps us understand the rate at which we are monetizing our consumer customer base.

Retention rate is defined as the percentage of direct customers as of the end of the period from one year ago who are still active as of the most recently completed fiscal period.

We monitor the retention rate to evaluate the effectiveness of our strategies to improve renewals of subscriptions.

Net revenues by geographical region

Three Months Ended

Nine Months Ended (1)

December 27, 2024 December 29, 2023 December 27, 2024 December 29, 2023

July 4, 2025 June 28, 2024

Americas 70 % 66 %

EMEA 21 % 24 %

APJ 10 % 11 % 10 % 11 %

(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 and nine months ended December 29, 2023 where we aligned allocation methodologies across similar product categories.

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

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APJ includes Asia Pacific and Japan.

Percentage of revenue by geographic region in the three and nine months ended December 27, 2024 remains primarily in the Americas.

Percentage of revenue in Americas increased primarily due to our acquisition of MoneyLion during the three months ended July 4, 2025 as compared to the three months ended June 28, 2024.

Cost of revenues

Three Months Ended Nine Months Ended

(In millions, except for percentages) December 27, 2024 December 29, 2023 Change in % December 27, 2024 December 29, 2023 Change in %

Three Months Ended

(In millions, except for percentages) July 4, 2025 June 28, 2024 Change in %

Cost of revenues $ 267 $ 190 41 %

Three Months Ended December 27, 2024 Compared with Three Months Ended December 29, 2023

Cost of revenues increased $11 million, primarily due to a $12 million increase in revenue share costs.

Nine Months Ended December 27, 2024 Compared with Nine Months Ended December 29, 2023

Cost of revenues increased $36 million, primarily due to a $34 million increase in revenue share costs.

Three Months Ended July 4, 2025 Compared with Three Months Ended June 28, 2024

Cost of revenues, including the impact of one additional week, increased $77 million, primarily due to a $50 million increase in marketing affiliate expenses, a $13 million increase in payment processing fees and an $8 million increase in amortization of intangible assets.

Operating expenses

Three Months Ended Nine Months Ended

(In millions, except for percentages) December 27, 2024 December 29, 2023 Change in % December 27, 2024 December 29, 2023 Change in %

Three Months Ended

(In millions, except for percentages) July 4, 2025 June 28, 2024 Change in %

Sales and marketing $ 297 $ 183 62 %

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Total operating expenses $ 544 $ 358 52 %

Three Months Ended December 27, 2024 Compared with Three Months Ended December 29, 2023

Sales and marketing, research and development and general and administrative remained relatively flat.

Amortization of intangible assets decreased $18 million, primarily due to certain intangible assets being fully amortized during fiscal 2024.

Restructuring and other costs remained flat.

See Note 12 of the Notes to the Condensed Consolidated Financial Statements for details of the fiscal 2025 restructuring activities.

Nine Months Ended December 27, 2024 Compared with Nine Months Ended December 29, 2023

Sales and marketing and research and development remained relatively flat.

General and administrative expense decreased $335 million, primarily due to the absence of legal costs related to our litigation with Columbia in the second quarter of fiscal 2024.

Amortization of intangible assets decreased $53 million, primarily due to certain intangible assets being fully amortized during fiscal 2024.

Restructuring and other costs decreased $32 million, primarily due to a $30 million decrease in severance, termination benefits, contract cancellation costs and other exit and disposal costs in connection with the September 2022 Plan.

Three Months Ended July 4, 2025 Compared with Three Months Ended June 28, 2024

Sales and marketing expense, including the impact of one additional week, increased $114 million, primarily due to a $36 million increase in loss on sale of Instacash Advances, a $34 million increase in marketing expenses, a $21 million increase in headcount costs and a $15 million increase in stock-based compensation expense.

Research and development expense, including the impact of one additional week, increased $28 million, primarily due to a $16 million increase in headcount costs and a $5 million increase in stock-based compensation expense.

General and administrative expense, including the impact of one additional week, increased $22 million, primarily due to a $14 million increase in stock-based compensation expense and a $12 million increase in headcount costs, partially offset by a $10 million decrease in litigation settlement expense.

Amortization of intangible assets increased $11 million, primarily due to our acquisition of MoneyLion.

Restructuring and other costs increased $11 million, primarily due to an increase in severance and termination benefits in connection with the September 2022 and April 2025 Plans.

See Note 12 of the Notes to the Condensed Consolidated Financial Statements for details of the fiscal 2026 restructuring activities.

Non-operating income (expense), net

Three Months Ended Nine Months Ended

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

Three Months Ended

(In millions) July 4, 2025 June 28, 2024

Interest expense $ (156) $ (153)

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Foreign exchange gain (loss)

Gain (loss) on equity investments

(30) — (30) —

Gain (loss) on sale of properties

Other — 2 1 3

Gain (loss) on sale of property

Total non-operating income (expense), net $ (146) $ (141)

Three Months Ended December 27, 2024 Compared with Three Months Ended December 29, 2023

Non-operating income (expense), net, increased by $12 million in expense, primary due to a $30 million impairment expense on our non-marketable equity investments.

This was partially offset by a $19 million decrease in interest expense related to our Term B facility.

Nine Months Ended December 27, 2024 Compared with Nine Months Ended December 29, 2023

Non-operating income (expense), net, decreased by $27 million, primarily due to a $51 million decrease in interest expense related to our Term B facility.

This was partially offset by a $30 million impairment expense on our non-marketable equity investments.

Three Months Ended July 4, 2025 Compared with Three Months Ended June 28, 2024

Non-operating income (expense), net, remained relatively flat.

Provision for income taxes

Three Months Ended Nine Months Ended

(In millions, except for percentages) December 27, 2024 December 29, 2023 December 27, 2024 December 29, 2023

Three Months Ended

(In millions, except for percentages) July 4, 2025 June 28, 2024

Income (loss) before income taxes $ 300 $ 276

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Effective tax rate 55 % 34 %

Our effective tax rate for the three and nine months ended December 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 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 July 4, 2025 and 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, foreign exchange impacts, and the U.S.

taxation on foreign earnings.

The Organization for Economic Cooperation and Development (OECD) and many countries have proposed to reallocate a portion of profits of large multinational enterprises (MNE) with an annual global turnover exceeding €20 billion to markets where sales arise (Pillar One), as well as enact a global minimum tax rate of at least 15% for MNE with an annual global turnover exceeding €750 million (Pillar Two).

On July 4, 2025, the One Big Beautiful Bill Act (the Act) was enacted into law in the United States.

The Act includes various provisions that are applicable to Gen beginning in fiscal year 2026.

These provisions include an allowance to accelerate tax deductions of certain capital expenditures, research & experimentation expenditures, and an increase to the annual limitation of tax-deductible interest expenses.

As the Act was signed into law on the last day of our first quarter, the impacts are included in our operating results for the three months ended July 4, 2025.

Based on our preliminary assessment, the Act is not expected to have a material impact on the Company’s effective tax rate.

sales arise (Pillar One), as well as enact a global minimum tax rate of at least 15% for MNE with an annual global turnover exceeding €750 million (Pillar Two).

On December 12, 2022, the European Union reached an agreement to implement the Pillar Two directive of the OECD’s reform of international taxation at the European Union level.

The agreement affirms that all Member States must transpose the Pillar Two directive by December 31, 2023.

The rules will therefore first be applicable for fiscal years starting on or after December 31, 2023.

The rules were therefore applicable for fiscal years starting on or after December 31, 2023.

Ireland, Czech Republic, and certain jurisdictions in which we operate have enacted legislation to implement Pillar Two and other countries are actively considering changes to their tax laws to adopt certain parts of the OECD’s proposals.

The enactment of Pillar Two legislation is not expected to have a material adverse effect on our effective

tax rate and Condensed Consolidated Financial Statements in the near term.

We will continue to monitor and reflect the impact of such legislative changes in future Condensed Consolidated Financial Statements as appropriate.

The enactment of Pillar Two legislation is not expected to have a material adverse effect on our effective tax rate and Condensed Consolidated Financial Statements in the near term.

Moreover, in June 2025, the G7 agreed to exclude United States MNEs from certain aspects of the Pillar Two global minimum tax rules (the G7 Statement) in exchange for the United States not imposing retaliatory taxes in the Act.

We will continue to monitor and reflect the impact of such legislative changes, including the G7 Statement, which has not yet been incorporated into the OECD framework, in future Condensed Consolidated Financial Statements as appropriate.

LIQUIDITY, CAPITAL RESOURCES AND CASH REQUIREMENTS

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Historically, this has included a quarterly cash dividend, the repayment of debt and the repurchase of shares of our common stock.

Based on past performance and current expectations, we believe that our existing cash and cash equivalents, together with cash generated from operations, amounts available under our Revolving Facility and our future refinancing plans related to our upcoming maturities, will be sufficient to meet our working capital needs, support on-going business activities and finance the expected synergy costs related to the acquisition of Avast through at least the next 12 months and to meet our known long-term contractual obligations.

Based on past performance and current expectations, we believe that our existing cash and cash equivalents, together with cash generated from operations, amounts available under our Revolving Facility and our future refinancing plans related to our upcoming maturities, will be sufficient to meet our working capital needs, support on-going business activities and finance the expected synergy costs related to the acquisition of Avast and MoneyLion through at least the next 12 months and to meet our known long-term contractual obligations.

We are currently not aware of any trends or demands, commitments, events or uncertainties that will result in or that are reasonably likely to result in our liquidity increasing or decreasing in any material way that will impact our capital needs during or beyond the next 12 months.

However, our future liquidity and capital requirements may vary materially from those as of December 27, 2024, depending on several factors, including, but not limited to, economic conditions;

However, our future liquidity and capital requirements may vary materially from those as of July 4, 2025, depending on several factors, including, but not limited to, economic conditions;

political climate;

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the costs to acquire or invest in businesses;

outcome of income tax audits with relevant tax authorities;

resolution of legal proceedings, including, but not limited to, regulatory proceedings, claims, mediations, arbitrations and litigation;

and the risks and uncertainties discussed in “Risk Factors” in Part II, Item 1A below.

The following summarizes our cash flow activities:

Nine Months Ended

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

Three Months Ended

(In millions) July 4, 2025 June 28, 2024

Net cash provided by (used in):

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Cash from operating activities

Our cash flows provided by operating activities increased $82 million, primarily due to higher profit before taxes adjusted by non-cash items, increased cash collection from our cyber safety billings and an increase in accounts payable as a result of the timing of payments.

This is partially offset by increased legal payments compared to the first nine months of fiscal 2024 .

Our cash flows provided by operating activities increased $145 million, primarily due to higher profit before taxes adjusted by non-cash items and the extra week of collections in the first quarter of fiscal year 2026.

Changes in working capital sources of cash include increases in income taxes payable and other assets offset by decreases in contract liabilities, accounts payable, Instacash Advances held for sale and accrued compensation and benefits.

Cash from investing activities

Our cash flows provided by and used in investing activities remained relatively flat.

Our cash flows provided by and used in investing activities decreased $871 million, primarily related to the cash consideration paid for our acquisition of MoneyLion.

Cash from financing activities

Our cash flows used in financing activities decreased $256 million, primarily due to a $320 million decrease in voluntary prepayments of our Term B Facility and a $58 million decrease in mandatory principal prepayments of our Term A and B Facilities.

This was partially offset by a $131 million increase in repurchases of common stock under our repurchase program as compared to the first nine months of fiscal 2024.

Our cash flows provided by and used in financing activities increased $756 million, primarily due to proceeds from the issuance of our Incremental Term Loan B of $741 million, net of debt issuance cost, and lower repurchases of common stock under our repurchase program.

This was partially offset by an increase in mandatory and voluntary prepayments of our Term A and B Facilities.

Cash and cash equivalents

As of December 27, 2024, we had cash and cash equivalents of $883 million, of which $386 million was held by our foreign subsidiaries.

As of July 4, 2025, we had cash and cash equivalents of $820 million, excluding restricted cash, of which $407 million was held by our foreign subsidiaries.

Our cash, cash equivalents and short-term investments are managed with the objective to preserve principal, maintain liquidity and generate investment returns.

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Stock repurchases

During the nine months ended December 27, 2024 and December 29, 2023, we executed repurchases of 11 million and 7 million of our common stock under our existing stock repurchase program for an aggregate amount of $272 million and $141 million, respectively.

During the three months ended July 4, 2025 and June 28, 2024, we executed repurchases of 5 million and 11 million of our common stock under our existing stock repurchase program for an aggregate amount of $134 million and $272 million, respectively.

Material Cash Requirements

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Debt instruments

As of December 27, 2024, our total outstanding principal amount of indebtedness is summarized as follows.

As of July 4, 2025, our total outstanding principal amount of indebtedness is summarized as follows.

See Note 10 of the Notes to the Condensed Consolidated Financial Statements included in this Quarterly Report on Form 10-Q for further information on our debt.

(In millions) December 27, 2024

(In millions) July 4, 2025

Term Loans $ 6,464

Senior Notes 2,450

Mortgage Loans 6

Total debt $ 8,963

The Amended Credit Agreement contains customary representations and warranties and affirmative and negative covenants, including compliance with specified financial ratios.

As of December 27, 2024, we were in compliance with all debt covenants.

As of July 4, 2025, we were in compliance with all debt covenants.

See Note 10 of the Notes to the Condensed Consolidated Financial Statements included in this Quarterly Report on Form 10-Q for further information regarding financial ratios and debt covenant compliance.

On January 30, 2025, we announced a cash dividend of $0.125 per share of common stock to be paid in March 2025.

On August 7, 2025, we announced a cash dividend of $0.125 per share of common stock to be paid in September 2025.

Any future dividends and dividend equivalents will be subject to the approval of our Board of Directors.

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Under our stock repurchase program, we may purchase shares of our outstanding common stock on the open market (including through trading plans intended to qualify under Rule 10b5-1 under the Exchange Act) and through accelerated stock repurchase transactions.

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.

This new stock repurchase program will supersede any amounts under the prior stock repurchase programs.

As of December 27, 2024, the remaining balance of our stock repurchase authorization was $2,728 million and does not have an expiration date.

As of July 4, 2025, the remaining balance of our stock repurchase authorization was $2,594 million and does not have an expiration date.

The timing and actual number of shares repurchased will depend on a variety of factors, including price, general business and market conditions and other investment opportunities.

Restructuring

In connection with the acquisition of Avast, our Board of Directors approved a restructuring plan (the September 2022 Plan) to realize cost savings and operational synergies, which became effective upon the close of the acquisition on September 12, 2022.

We have incurred and expect to incur cash expenditures for severance and termination benefits, contract terminations, facilities closures, and the sale of underutilized facilities as well as stock-based compensation charges for accelerated equity awards for certain terminated employees.

We expect that we will incur total costs up to $150 million following the completion of the acquisition.

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

During the nine months ended December 27, 2024, we made $21 million in cash payments related to the September 2022 Plan.

As of December 27, 2024, we have incurred costs of $128 million related to the September 2022 Plan.

See Note 12 of the Notes to the Condensed Consolidated Financial Statements included in this Quarterly Report on Form 10-Q for further cash flow information associated with our restructuring activities.

See Note 12 of the Notes to the Condensed Consolidated Financial Statements included in this Quarterly Report on Form 10-Q for cash flow information associated with our restructuring activities.

Significant contractual obligations

Our principal commitments consist of principal and interest payments related to our debt instruments, obligations under our purchase agreements, repatriation tax payments under the Tax Cuts and Jobs Acts and obligations under various non-cancellable leases.

Due to the uncertainty with respect to the timing of future cash flows associated with our unrecognized tax benefits and other long-term taxes as of December 27, 2024, we are unable to make reasonably reliable estimates of the period of cash settlement with the respective taxing authorities.

Our principal commitments consist of principal and interest payments related to our debt instruments, obligations under our purchase agreements, repatriation tax payments under the Tax Cuts and Jobs Acts, obligations under various non-cancellable leases and potential other legal contingencies.

Due to the uncertainty with respect to the timing of future cash flows associated with our unrecognized tax benefits and other long-term taxes as of July 4, 2025, we are unable to make reasonably reliable estimates of the period of cash settlement with the respective taxing authorities.

Therefore, $1,508 million in long-term income taxes payable has been excluded from our quarterly review of timing of contractual obligations.

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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 2. Management’s Discussion and Analysis