Gen Digital (GEN) Q1 2027 earnings call transcript

Thank you, Jen, and good afternoon, everyone. Welcome to Jen's first quarter fiscal year, 2027 earnings call. Joining me today are Vincent Pelette, CEO, and Natalie Dercy, CFO. As a reminder, there will be a replay of this call posted on the Investor Relations website, along with our slides and press release. I'd like to remind everyone that during the call, all references to the financial metrics on non-gap, and all growth rates are year over year, and adjusted to exclude the extra fiscal week in Q1, fiscal 2026, and to include money lines sub-financial in the prior year comparison.

A reconciliation of non-gap to gap measures is included in our press release and earnings presentation, both of which are available on our IR website at investor. gendigital. com. We encourage investors to monitor this website as we routinely post investor-oriented information, such as news and events and financial filings. Today's call contains statements regarding our business, financial performance, and operations, including the impact on our business and industry that may be considered for looking statements, and such statements involve risk and uncertainty that may cause actual results to differ materially from our current expectations.

Those expectations and statements are based on current belief assumptions. As of today's date, August 6th, 2026. We undertake no obligation to update these statements as a result of new information or future events. For more information, please refer to the cautionary statement in our risk factors in our filings with SEC, and in particular, our most recent reports on Form 10K and Form 10Q. And now, I will turn the call over to Vincent.

Thank you, Ben, and good afternoon, everyone. Three months ago, we guided fiscal 2027 with a structural step-up, 8 to 10 percent revenue growth, and mid-teens EPS growth. Q1 shows why we had the conviction to do it. We delivered another better than expected quarter and entered the rest of fiscal 27 with strategy delivering double-digit growth. Let's start with the headline. Bookings and revenue grew 11 percent, and non-gap EPS grew 19 percent both above guidance. Paid customers crossed 80 million and 11 straight quarter of sequential growth. Two segments, one platform, one mission, helping people live fearlessly in an increasingly complex and ever-expanding digital world. A job is to be the trusted partner who reduces their risks and keep them safe, confident, and empowered online and in an AI world.

Cyber safety and trust-based solutions are both growing revenue with growth plus margin profile above 50 and are powered by a single platform of shared proprietary data and models, modular technology, and AI-driven personalization that scale across our brand. Our customer relationships are deepening, membership is expanding, cross-sell is at an all-time high, and we are beginning to unlock the opportunities from embedded financial wellness and engine partnerships. Cyber safety, our foundation, remains competitively strong.

Bookings and revenue grew mid-single-digit, sustaining last-year's momentum. Customers keep telling us about the AI anxiety and forgen, that growing need for trust and safety represents a tailwind. AI is capable of taking actions on your behalf behind the scenes, which is amazing on one hand, but on the other hand, you relinquish control and transparency. On top of that, AI is turbocharging the threat cycles. Threats are faster, more complex, and increasingly personalized.

Threat cycles, once measured in months, are now compressed to minutes, and consumers feel it. We see it in external search, our own funnel, and consumer research. AI adoption has passed 40% of U. S. consumers, yet nearly two-thirds are highly concerned about AI misusing data, and that number is still rising. This is exactly the environment our portfolio was built for.

And we meet this growing need by staying ahead, leveraging the intelligence of Gen Thread Labs, applying AI to detect and defeat emerging threats, and putting AI-native products directly in our protection engine blocked over half a billion scam attacks, more than 100 every second, including deep fakes and voice clones. Demand is increasingly measurable, too. In our own consumer research, over 60% of consumers say AI-driven scams make them more likely to pay for protection as strongest measured purchase driver, and concerns about AI scams are climbing double digits over your in the U. S. , rising even faster internationally. With nearly 500 million users across 150 countries, we are positioned to capture that demand globally. We are not only seeing new demand, but also very clearly that our existing customers are choosing more protection, not less.

Noden 360's higher tier memberships, combining scam detection, identity restoration, financial protection, and insurance, have scaled to nearly half a billion dollars in annualized bookings. Those deepening customer relationships are a strong reflection of these growing consumer needs. Noden cross-sell penetration rose another point to 27%, we sell a double-digit year, our poor is 8 to 10% higher than two years ago, and membership adoption across Noden Avastavira passed 60% with retention near record highs.

The conviction is clear. The future of cyber safety is all-in-one membership that matches the need of your digital and financial life, not point product. And we are doubling down by making the experience simpler and more personal so customers stay on top of a complex world with less effort.

As trends are also being validated externally, independent labs and leading reviewers continue to recognize Noden and Avast as category leaders, best comprehensive protection, flexibility, ease of use, and performance. Recognations such as Thumbs Guide naming our Noden VPN the best force streaming or PC Mac choosing Avast One as the editor's choice reinforce the competitiveness of our portfolio and the strength of our brands and offerings. Let me highlight one product that makes our platform strategy tangible. Noden's financial scan built on Money Lion AI is out of beta and now rolling out into Noden 360 across our largest markets. The concept is simple. He does for customers financial accounts what antivirus does for their devices, watching continuously and flagging the moment something is wrong.

Cyber safety is no longer only about blocking threats. It has evolved to become the front door to a deeper, more trusted customer relationship. And every financial account a customer connects is one more opportunity to add value. In trust based solutions, the same strategy is driving growth. Bookings grew 25% with identity, personal financial management, and our engine marketplace all contributing.

Type of is in motion. We rebuild the experience for a mobile first scam aware consumer and the simpler tiered experience is moving customers to higher value plans and deeper engagement. Retention remains at record levels, touching 90% with NPS above 70 thanks to the same playbook we have run before. Deepened the customer relationship with expanding their protection from basic credit monitoring to financial accounts to all the assets that matter in your life.

Money Lion in its second year within Gen is now driving the same playbook as well. Personal financial management grew faster than we expected, led by Instacache and credit builder plus with record origination and continued margin expansion. It's growth with discipline. Two-thirds of our PFM revenue comes from repeat customers. I'm the scoring the customer satisfaction, loyalty and durability, and how we help manage and smooth consumers ever changing cash flow needs.

Our recently launched Money Lion 1 premium membership now put Gen's scam and identity protection directly in members' hands because true financial wellness is not only about improving your access to money, it is also about protecting it. More fundamentally, Money Lion is evolving from managing today's financial moment to helping customers stay ahead of the next one, anticipating income and bills, identifying potential shortfalls early and guiding them towards the right action.

Engine, the embedded marketplace, connects consumers to the right financial offer and powers the next step in their journey. Engine and its strongest quarter yet passing half a billion dollars in annual revenue run rate led by a new insurance vertical built on trellis infrastructure that we quickly integrated in just under one quarter, a core gen capability. We added more than 30 new partnerships across multiple categories, growth total network inquiries to over 425 million annually and delivered record revenue, and we will continue to leverage that strength and add new verticals that address consumers' diverse financial needs. Stepping back, two proof points tied the portfolio together.

Connected financial accounts passed 110 million up from 75 million when we acquired Money Lion. And 35 percent of our paid base now engages with financial wellness.

Every connection is a chance to deepen the relationship over time. And as we enrich our data and broaden the catalog, their engagement turns into monetization. We are already seeing it with engine enabled cross-sell into our install base, on track to double by the end of fiscal 27, giving us the confidence that the model is working and including it in our guidance race. Our AI trust layer is moving from concept to product.

A year ago, we said trust would be the bottleneck for agent AI as agents begin to act for consumers from making purchases to scheduling events. That thesis is now being validated in production. Not a new, the world's first secure and private AI native browser doubled its daily active users driven by its contextual agent VPN.

Our open-source agent security engine, Sage, is now in northern 360 and Avast 1, providing multi-layer agent security to 25 million customers.

And we recently launched the beta of northern family assistant co-architected with XAI and supported by multiple models, handling family and financial actions inside a gen-controlled trusted envelope, built on ATH or agent trust hub. This is a long game. Agentic revenue will be modest in fiscal year 2027, but gen holds what is hard to replicate, trusted brands, consumer reach, unified data and identity platform, and customer focused technical capability to be the consumer's trust layer for AI. The mode widens with every new model, partner, agent and connected accounts with deploying our environment, and our goal is simple. Make the AI economy safe and simple for our customers.

AI is also making us better operators. Following our restructuring, we move faster in smaller, more accountable teams and profit per employee already amongst the highest data scale is up double digits. That leverage keeps our segments margins durable while we invest in growth. Cyber safety operating margin remains above 60 percent, while trust-based solution remains at 30 percent, even as our fastest-growing businesses scale. Our branded margin reflects this mix, not pressure. We are reinvesting AI productivity into growth while delivering on our missing EPS growth commitments, which brings me to our outlook that reaffirms a structurally higher growth trajectory. Q1 outperformance and continued momentum gives us the confidence to raise fiscal 2027 guidance to 9 to 11 percent revenue growth and 14 to 18 percent non-gap EPS growth.

Beyond fiscal 2027, embedded financial wellness, partner expansion and engine monetization will sustain the synergy ramp and long-term growth. This is a multi-year compounding model, not a one-year acceleration. Let's step back and consider the transformation. A few years ago, many wrote of Symantec consumer cybersecurity as structurally challenged. Today, Gen is a 5.4 billion revenue platform, spanning security, privacy, identity and financial wellness, growing revenue and EPS double-digit returning capital while building the consumer trust layer for the AI era. Along the way, we have more than quadrupled paid customers, doubled revenue, nearly tripled EPS and returned 6 billion to shareholders while funding acquisitions along the way. One truth drives the strategy. Digital threats ultimately target people and their money.

Cybersecurity and financial wellness are two sides of the same mission. Our job is to understand the customer's trust, unify the platform and help people move from protection to empowerment. That is the strategy and it is working. So to our teams, I want to thank you for a strong Q1. And to our shareholder, three months ago, we said fiscal 2027 would confirm a clear trajectory shift and Q1 confirms it. And with that, let me turn it over to Natalie.

Thank you, Vincent. And hello, everyone. For today's call, I will walk through our Q1 fiscal 2027 results and our raised outlook for full-year fiscal 2027. I will focus on non-gap financials and adjusted year-to-year growth rates unless otherwise stated. I want to remind everyone that Q1 last year benefited from an extra week of revenue and earnings. Therefore, I will provide commentary on growth adjusted for the extra week, as well as money line stubs financials in the prior year so that the comparisons are on a like-for-like basis. Keep in mind that our original guidance both for the top line measure and EPS already reflected these two adjustments.

Now on to our results. We delivered another exceptional quarter, exceeding the high end of our guidance, driven by record bookings and revenue, high teens EPS growth, and robust free cash flow. Q1 is our fifth consecutive quarter of double digit bookings growth, up 11% year-to-1.28 billion dollars, while our revenues also increased 11% year-to-1.34 billion dollars, our fastest growth rate since Gen was created, with broad base growth across our two segments. Not only was top line better than expected, investors count on us to be diligent in driving profitability while accelerating growth. Our operating profit grew 9% with blended operating margins stable sequentially at 50% and consistent margins across both segments, even as we meaningfully grew money line and engine.

We have and will continue to invest in multiple business lines while managing a healthy balance of top line growth and margins.

For the cyber safety segments, both bookings and revenue increased 4%, delivering another quarter of mid-single-digit growth. We saw growth across brands and memberships, however, our higher tier suites performance stood out in Q1. Norton 360 is the market leading all-in-one membership with our highest tier offerings seeing double-digit growth. This reinforces the value of premium offerings that bundle security, identity protection, VPN, and many other safety features. And as we expand our new Avast One membership, we are applying the same customer-centric playbook to drive membership adoption, deepen engagement, and increase customer lifetime value. Cross-cells and up-cells continue to exceed our expectations of double-digits in the Norton base with the strongest growth we've delivered in the past two years as we improve targeting across new cohorts.

And while we continue to refine our AI product recommender with an expanded product portfolio in rich data and hyper-personalization powered by the Gen Platform, we believe we're just getting started and meaningful opportunities out ahead. Cyber safety margins remain stable at 61%, reflecting another quarter of disciplined execution as we continue to deliver on our mid-single-digit top-line growth targets while sustaining best-in-class profitability.

In trust-based solutions, Q1 bookings increase 25% year-over-year while revenues grew 24% year-over-year. Identity continues to demonstrate strong momentum and the early indicators of the impact of our reimagined lifelock product are positive, with higher sales conversion as customers engage with the improved experience. Retention also remains healthy at nearly 90%, particularly among more mature cohorts that have experienced the full breadth of the value proposition from monitoring their financial assets to full service restoration, enforcing our ability to build highly trusted customer relationships. Lifelock also delivers the strongest unit economics across our portfolio, supported by highly recurring revenue, durable retention, and proven ability to drive ARPOO gains through customer support and upsell. Personal financial management growth was driven by record Instacache originations across both new and repeat customers.

Our proprietary underwriting algorithm remains a critical component of the customer acquisition engine, while continued optimization of loss ratios is driving performance ahead of targets.

The durability of this business continues to be underwritten by the fact that more than two-thirds of first-party revenue is generated by repeat customers. And while the performance continues to improve, as a reminder, our Instacache receivables are sold to Soundpoint, further limiting our balance sheet exposure as the business scaled.

Looking forward, the recent launch of Moneyline 1 membership also brings many of our core identity features to members, and is designed to deepen customer relationships beyond individual financial transactions through a more integrated value proposition. While it's still early innings, Moneyline 1 is the first synergistic product that brings together identity and financial wellness as users shield and scale their financial lives. Engine marketplace is quickly becoming one of our fastest growing categories at roughly half a billion revenue run rate as we drive growth across all vectors, partners, products, verticals, and distribution. In the quarter, we added more than 30 new partners expanded our offering with additional premium products and scaled into additional verticals like the fast growing insurance market.

We are also extending our reach through strategic relationships with leading platforms such as Equifax, providing access to new audiences and additional high intent customer demand. As the marketplace scales the combination of broader supply, deeper partner integration, and greater product relevance strengthens engagement and conversion while reinforcing the network effects that make engine increasingly valuable to both consumers and partners. Trust-based solutions segment margin remains stable at 30 percent, even as we invested behind rapid growth across identity, personal financial management, and engine. We are increasingly excited about the many opportunities in this segment to come and will drive strong top line growth with a disciplined investment lens. Direct revenue grew 6 percent consistent with prior quarterly trends. Our partner business increased 31 percent and has surpassed a $1 billion on an annualized run rate basis, with particular strength coming from employee benefits, which was up double digits, and our engine marketplace which benefited from expanded partners and verticals.

As we deploy our capabilities to drive enhancements and personalization into our product offerings, we will leverage our omni-channel approach to quickly drive expansion and adoption. Paid customers continue to increase, reaching 81 million this quarter, up from 79 million last quarter, and up from 76 million a year ago. The growth in paid customers has driven, was driven by both growth in our subscriber base, supported by continued product place performance from onboarding new partners and verticals. Growth margin in the quarter was 82 percent, slightly down, entirely due to product mix. Keep in mind that some of our fastest growing marketplace categories have a unique business model, where it has slightly lower growth margins due to revenue share, but also carries a lower op-ex burden.

And as we ramp up new partners and verticals in our engine marketplace, you should expect to see this mixed dynamic continue to play out. Our Q1 non-gap operating income was $668 million, up 9 percent year over year, with margins stable sequentially at 50 percent. You should continue to expect us to be disciplined and rigorous with balancing our investments and spending that supports scalable revenue growth.

Total op-ex was $425 million, or 32 percent of sales, down 60 basis points year over year, and down 150 basis points sequentially. Sales and marketing was $284 million, or 21 percent of revenue, which is roughly flat year over year, but down seasonally 250 basis points versus the prior year, versus the prior quarter, as the second half of each fiscal year typically has higher marketing spend around events, the holidays and tax seasons. In marketing, one of the standout developments in Q1 was how quickly AI is becoming a real advantage in how we build and scale demand. For instance, AI is allowing us to produce AI-enabled creative and content workflows to improve efficiency and sharpen execution while continuing to invest behind the biggest growth opportunities across the portfolio.

Creative piloting in key media channels is showing 25 percent efficiency improvement with our ability to create twice the number of assets with AI. R&D spending increased to $105 million, or 8 percent of sales, as we continue to strengthen our platform and enhance our cyber safety and identity solutions in an environment where there is increasing consumer AI angst and where digital threat surfaces are ever evolving. We continue to manage our GNA in a very disciplined manner at less than 3 percent of revenue. Q1 net income was $431 million and diluted EPS was 71 cents, beating the high end of our guided range of 68 to 70 cents and increasing 19 percent year over year versus our target of 13 to 17 percent growth.

Interest expense was 119 million in Q1 and our non-GAP tax rate remains steady at 22 percent. We reduced our weighted average ending share count to 603 million. Down 21 million year over year reflecting the impact of share repurchases. Our philosophy of driving earnings growth faster than revenue growth continues to be our North Star. We believe this is the best way to deliver value to our shareholders by pulling multiple levers to achieve both both revenue growth combined with earnings leverage and disciplined capital allocation.

Turning to our balance sheet and cash flow, Q1 ending cash balance was $564 million up from $411 million in Q4 and representing over $2 billion of liquidity when including our $1.5 and $430 million in free cash flow. We continued to delever below our three times net leverage target paying down our debt by $45 million with ending net leverage of 2.95 times.

We also returned $181 million of capital to shareholders in the form of $100 million of share repurchases and $81 million of dividends. For Q1 fiscal 2027, the Board of Directors approved a regular quarterly cash dividend of $12.5 cents per common share to be paid on September 9th, 2026 for all shareholders of record as of the close of business on August 17th, 2026. Going forward, there is no change in how we view our capital allocation strategy. We will continue to operate with balance and the flexibility to simultaneously invest in growth both organic and inorganic, strengthen our balance sheet and return meaningful capital to shareholders.

Now, let me discuss our Q2 and raised fiscal 2027 guidance and some of the assumptions that underpin it. We expect our strong Q1 momentum to carry into Q2 with revenue of $1.35, $1.325 to $1.35 billion up 9 to 11%. We are raising our fiscal 2027 revenue to $5.375 to $5.475 billion, reflecting growth of 9 to 11% versus prior guidance of 8 to 10% growth.

We expect Q2 non-gap EPS to be in the range of 71 to 73 cents, representing growth of 15 to 18%, and we are raising fiscal 2027 non-gap EPS to $2.87 to $2.97 up 14 to 18%.

We enter this fiscal year excited about the strong momentum we are seeing across our portfolio and are even more optimistic about what lies ahead. As you can tell from our raised growth forecast for both top line and earnings growth, this powerful combination of growth and earnings leverage gives us the confidence and capacity to invest across our integrated capabilities to further scale the business. I want to thank our entire gen employees around the world for their contribution to the success, and we look forward to delivering great value for our employees, customers, and shareholders. As always, thank you for your time today, and I will now turn the call back to the operator to take your questions.

Operator?

Good question, Ryan. Thanks for the question. We actually, as you know, are very global, 150 countries from a cyber safety protection and in cyber safety, more security anchored. We've been driving growth across all countries by expanding from that core security into the privacy and the identity space. We continue to see good momentum adding privacy monitoring, adding other features, dark web monitoring into the overall. We see a balanced growth, I would say a mid-single digit. When you need to rise for currency, obviously with currency momentum for now, Europe is growing higher and Asia slower. But when you perform at that alt, it's about that mid-single digit. So a good expansion. Financial oneness is really concentrated in the U. S. As you know, there's a lot of opportunities to transform that category and then make that category better and better than combined with that security need.

And as we get more proof point in the U. S. we will then extend internationally, but that's a long-term game. And that's why also in my remark, I say this is not just a one-year acceleration. We see a lot of opportunities to replicate the full portfolio success and momentum we currently see in the U. S. across all of our countries.

Yeah, there's a lot of dynamics going on in the engine business. I would say money line overall. There's a lot of different relationships whether you're talking about the supply or the demand side of that marketplace and every relationship is different. What you can count on us to do is really optimize in terms of the quality of the inventory and making sure that we're providing the best customer experience with the best supply and the financials will come in terms of from a balanced perspective, yes, your gross margin dynamics and the overall company are going to mix, but within each of the segments we are very, very disciplined to drive margin, not only at the gross margin side, but also balancing op-ex so that we are able to really, really deliver strong operating margin in each of those segments.

First margin for us, whether you're talking about the CF side or the TBS side, very, very strong the team is committed to driving as much profitability as we possibly can. Even when you mix together with Jen, we're in a very, very strong position.

I can add one dynamic within the marketplace, Ryan, it is that we have different margin profiles and I would refer to our investor event last September when Rick presented the 3060 model. When a customer comes to engine and when a customer is on an install base, we have the opportunity to retarget it with the first or third party product and there's different margin profiles. So the longevity of the relationship and the ability to present offers at various moments of the digital and financial life is critical. That's why our thesis is really about building that trust relationship and over time move that to a long term value which delivers better margin.

Yeah, so let me first take the momentum. You're right. We raised the top line guidance to a double digit growth rate, 10% adjusted. And by 50 million, as you mentioned, it's 40% coming from the flow through in Q1. And then we carried that momentum through the next quarter to a degree. And then also embedded our increased confidence in the financial synergies coming from the embedded financial wellness, the 100 million I had quoted in my last earnings group, if you recall, we're getting more and more confident that the levers we have in our control to make the platform concept a reality, if you want, is getting higher and higher. And so we folded that into the guidance.

Obviously, when it comes to investing for growth and transforming the company, we're very pleased to be able to transform Gen, as I mentioned in my earning remarks, strong, strong transformation, while delivering on that commitment and that commitment is to grow EPS mid teens on the now very many, many quarters, about 11 quarters in a row. And so we invest into transforming into a platform, bringing our capabilities, building AI capabilities, unifying our data, launching new products, launching new verticals, we integrated Trellis insurance capability into more than 10 partners here in the quarter. And we can't need to go and expand those capabilities. And investment goes towards that growth while we fund our commitment on EPS. And I guess the EPS flow through is just a result of that.

The growth drivers for the upside, as you imagine, with what I mentioned at the beginning of my answer, is coming more from that financial wellness and marketplace oriented view, while we see very solid, sustainable momentum in cyber safety.

Absolutely. So first of all, we have an entire set of strategic initiatives inside the safety. You mentioned, or I've mentioned, and you repeat it here, the move of moving to that full all-in-one membership. Cross-sell is improving, as you've heard, and then moving from a cross-sell to a full membership is also that the higher tier plans growing double is showing that effect. But we're not stopping there because we know we need to meet the consumers where they are at the moment of need. So, perfecting our entry doors is very, very important. We obviously already have the best anti-verse, which is the old stable entry door. Moving into that privacy, both with best VPN, I think you've read online all of the improvement we brought to that product, integrating anti-track, PMA, other version of protecting your privacy, understanding your personal data being exposed, giving you the opportunity to eliminate, delete your profile online to be more anonymous.

I think it's all part of those new entry doors that bring consumer in. And then from a channel perspective, consciously expanding the channel set, moving into the AI chat. We now have more than two-thirds of our brand showing up into AI type of search. We extend into and continue to reinforce new accounts with our employee benefit programs. So, the full channel diversification is also at play. And so, when you sum all of those seven, you cannot favor one versus the other. We're able to really see that long-term, continued adoption of that full security posture.

Yeah, very good. So, definitely in cyber safety, and you know, we were the first one to come with known 360 full membership all in one for cyber security. And it got very strong adoption from not only in the first 18 months. And then as we brought more new lines of businesses into that full cyber safety portfolio, we also embedded into the suite. And the movement from first-level plan to a higher tier, if you want, is long in the journey. So, building the trust, building the right messaging, the right experience, proving the value of the products at all important moments is helping the consumer move towards that higher tier. And so, building that trust relationship is what we've applied to almost every asset we've brought in.

Moneyline, PFM, the financial management solution is no different. And initially, it was essentially a transactional business at the time of the need. And then we also know that 80% of the victims of scam actually are people who don't have a lot of means and have financial needs. And so, bringing all of that to get a protection and financial needs, rewarding the ongoing usage with better usage or better plan or better pricing or better discount is all part of that view. And then really building on that relationship over time. We launched Moneyline one. It got good feedback initially. It's still a little too early to project upside from that specifically. But the move towards a membership across all of our assets is part of the playbook.

And you'll see the same in PFM. And then to your investment question, you've heard from Vincent a couple times today, even around investing in transformation, launching new products, scaling the synergistic wins across both segments driven by the marketplace and just operating the company completely integrated. And so those investments are going to come through mostly gross margin as well as we invest in the innovation, as we invest in AI, it's going to come through R&D as well. And then of course, as we launched these great new products and services, we're going to go to market. So you'll most likely see us increase our sales and marketing line as well. And so it'll be across, I would say what I would leave you with is that we will always, we always have and we always will have a disciplined approach as we evaluate those areas of investment.

We are on a transformation. And so, you know, quarter in quarter out, it'll be at different capacities and rates. But we'll always be disciplined and we will always be in pursuit of accelerating sustainable revenue growth.

Yeah, very good, Dan. Thanks for your question. Definitely. So you referred to adding a new vertical last quarter or now four months ago, which is insurance. Currently, our engine marketplace was more specific around loans and credit cards and now adding insurance. The technology is important. AI-driven matching process understanding the workflow of each vertical between the partner and the consumers to eliminate every friction. So our marketplace, which is not just a simple marketplace, it's an embedded marketplace with an AI matching engine under, is very, very important. Eliminate those friction points and making almost like a one-click process for a financial product, which as you know in this world is complicated to achieve. It's the long-term strategy.

We build that vertical based on the capability. We had acquired from Trellis quickly integrated, then the team did a fantastic job integrating to our current partner set where you did 10 more partners active and selling and then continuously driving and expanding. It has a strong growth and you'll see us continue organically and inorganically to build those verticals. I don't want to give you something that's around that protecting your digital life and financial life would be a valid candidate to look at.

Excellent. Excellent. So you touch on many things that I want to repeat if you don't mind. So first of all, yes, we have a playbook that we've approached and developed at the thesis of the creation of Gen at the time called Norton Live Block, which was merging two-point products, security and identity protection into Nolan 360, a full membership and for a membership fee. Our customers have access not only on the product from a protection perspective, but all the way to the service at the higher tiers of restoration services and insurance, a full piece of money if you want. That has been a very successful playbook. It's still at place a long run even though the vast majority of non-customer in membership is still at the various level of the tiers.

And as we evolve as a trusted partner along the journey, we keep moving them to that higher value. That playbook was the one to apply on a vast. And with a vast, we require a few capabilities. The first one is the premium. We know that in the consumer world, starting with a premium, giving you a taste for the product, understanding the basic value you can have. And from there, getting to higher value that you would be ready to pay for is the business model we've acquired. We digested it. We move a few products already into premium since we require a vast. There are some we have not yet. A full identity protection, we have not.

And we definitely intend over time to move basic functionalities as they come all the time into an identity premium. The first one is the third dimension, which is we know the future of cyber safety is all in one. And so how do you move a premium all in one? We decided to be a lot more a la carte. So you start with an all in one premium. You have a basic taste of the various different functionality. And then with the same architecture, in the same product, you can decide to pay for the features that you use versus all of them.

And that's the strategy behind our other one approach. We launched it in the four last year, have good traction in France and Germany. We're not pushing it across all countries. And we very methodically ramp and move it up. And you'll see us continue to talk about the success of us as one as it evolves and expands across all countries.

Excellent questions, Robert. Let me take one by one. So Moneyline, one expansion and strategy. Again, I'll repeat what I say in my remarks, which is, we're basically running the same playbook, but tailored for that specific business model. And it's about building the trust relationship with the customers, dealing with their security, or dealing with the financials required the same level of trust, security and privacy.

And that's how we're expanding. Moving a membership structure is the long-term goal. And the behind the membership, you should view that as building the value into that long-term relationship and not focusing only on a one-time transaction monetization, but maximizing the value for the consumers and for us maximizing the CLV over time. And that's what Moneyline is intending to do. For that, you need to show them that you offer more and more value at what they need. So Moneyline, one, integrating, obviously, the basic cash flow needs. And inside the membership, you'll see us addressing various and different needs over time. And then wrapping that up with an identity and anti-scam protection, basic features at the lower level, that gives you a sense of comfort at a minimum, an alert, and a better basic protection.

And then moving that up to higher level as you grow into your financial journey. It is definitely, as all of our business, a long-term view we take on growing that relationship. And I think if some investor love an enterprise because it's bounded by contracts, multi-year contracts, and unlike consumer because it can change every day, our view is that by building that trust relationship, it's equivalent to the value of a long-term contract in the enterprise world.

In terms of cyber security, definitely coming to expand. Now, our goal long-term, Robert, is to come to move up our customers to the financial journey and move from subprime to midprime to prime customers, introducing that financial wellness into our cyber safety customers, which we're in the process of doing. And then basically, the full protection for both your digital life and financial life, basically two phases of the same coin, not even saying it separately in the overall. So we right now are putting safety in front of the Moneyline customers in the membership, which is an indirect way of monetization, but not in a direct sales process. Although we do put life lock into our engine marketplace, because as you know, the marketplace is embedded into all third-party distributors that use the marketplace for their own customers, and there we sell security.

And then the last point on AI, right? It's going to be a very volatile, evolving environment. First, everybody embracing the seriousness and the power of AI. Now, I would say, at least in our consumer base, in our consumer research, the anxiety is at an all-time high, some of which is fed by what you read in a newspaper, including your AI model breaching into other enterprises. And even if it doesn't exactly concern the consumer directly, they read about it and increase the fear. That fear is supported by what we see the most relevant today, which is the veracity, the precision of the scams and the way to full consumers driven by AI is increased significantly. And I think I mentioned it in my prepared remark.

It has moved as our number one sales driver when we question our customers why they buy consumer cyber safety. What it means for long, long term, I cannot tell you, but I think we are right there. We use AI to protect against AI, and we always try to stay ahead of that environment.

The question, so the growth was pretty broad based. I would say you can see in each of the segments just in CS, very consistent mid-single-digit rates with that. You can combine that with the strength that we saw in overall TBS. Those segments both outperformed and delivering really, really strong margins, blending to a stable 50% operating margin. On a go-forward basis, you can see what we assumed in the raised, full-year guidance, whether you're thinking of revenue or EPS. It's consistent and it's consistent acceleration on the trust-based solution side, mostly driven by the marketplace and engine. You heard from Vincent earlier that we are going to be continuously investing in the new product launches that are coming through the Moneyline and the TBS vertical, but I don't want to leave CS behind.

We've reimagined Lifelock, we're reimagining Norton, we're focusing on customer service in terms of as we navigate those customers through an upward motion in the membership tiers.

The cross-sell has been the quarter for in Norton, has been the best ever since we've done, even since our last annualist day almost three years ago, and so things are really, really clicking in both of those segments and therefore the strength and the confidence that we have as we raise the full-year outlook. I expect both of those segments to deliver.

Very good question. So definitely the marketplace is kind of a wrapper if you want, around our strategy and the values offering a great way to reach the consumers at the right time in the digital journey for a financial need. We'll come in to expand on the verticals. We'll come in to expand on the distribution. Equifax just went live this summer. We're working on all the integrations. That distribution expansion is more like a B2B, before the B2B2C, if you want, right? So it takes a little bit of time to employ, but then it's a long-term relationship and a great upper funnel as we keep the capability to re-targeting those engine customers. So very strategic, very long-term growth.

In terms of the $100 million revenue synergies, it definitely contributes to a third to about half of that revenue synergies. You'll see us at the next event give a little bit more breakdown, as we penetrate it. Second half of FY27 will be deploying, if you want more, the visibility on that, but a very strategic one and a long-term opportunity.

Thank you, operator, and thank you, everybody, for listening. We have built a durable capital light, high cash flow business at the intersection of AI, safety, financial wellness, and trust. We have delivered 11th Street course of meeting EPS growth with a faster revenue growth model and a robust balance sheet. Jen is transforming while performing, or I should say what Jen is performing while transforming, and we are just getting started. So thank you for your interest and support.