Gen Digital Q2 FY2027: clean 12% organic revenue growth, EPS up 122% on a weak year-ago quarter

Gen Digital, the company behind Norton, Avast, LifeLock and the MoneyLion consumer-finance app, reported revenue of $1,369 million for the second quarter of fiscal 2027 (the 13 weeks to October 2, 2026), up 12.2% from $1,220 million. This is the first quarter since the April 2025 MoneyLion acquisition with a clean year-on-year comparison: both quarters had 13 weeks and Gen owned MoneyLion for all of both. So the 12% is organic growth, the growth from businesses Gen already owned. GAAP diluted EPS more than doubled to $0.48, but most of that jump comes from a weak year-ago quarter, not from this one.

This report is written from Gen's earnings release (8-K Exhibit 99.1, filed October 28, 2026). The full 10-Q, with segment profit and the management discussion explaining each line, hasn't been filed yet, so segment margins and some explanations below are not yet available.

Key figures

The EPS change is Gen's own figure, calculated on unrounded earnings; the rounded $0.48 and $0.21 would suggest a larger rise. Operating margin is the share of revenue left after running the business, before interest and tax. Bookings are customer orders that will turn into revenue later; for a subscription business that bills a year up front, they are an early read on demand.

Takeaway: Gen's clean 12% organic growth is the real news, but it is coming from the lower-margin half of the business. Trust-Based Solutions (identity protection plus MoneyLion) grew 26% while the Cyber Safety antivirus business grew 5%, and partner revenue, on which Gen pays a revenue share, grew 40%. That mix is why gross margin fell to 75.9% from 78.2% and the non-GAAP operating margin slipped a point to 50.1%, even as revenue beat guidance.

Where the growth came from

Cyber Safety (Norton, Avast, VPNs and security suites) grew 5.4%, a step up from about 4% in Q1 once that quarter's extra-week distortion is removed (our arithmetic from the Q1 10-Q). It is still the bulk of revenue, 63%, and in Q1 it earned a 61% segment margin.

Trust-Based Solutions grew 25.9% to $511 million. With MoneyLion owned in both quarters, this is organic growth in identity protection and financial products. In Q1 this segment earned about a 30% segment margin, half that of Cyber Safety; the Q2 segment split will be in the 10-Q.

Partner revenue (retailers, telecoms, employee benefits and the MoneyLion loan marketplace) grew more than six times as fast as direct sales. Partners take a cut, which shows up in cost of revenue: it rose 24% to $330 million while revenue rose 12%, so gross margin (revenue left after the direct cost of delivering it) fell 2.3 points.

Paid customers reached 83 million, up 6 million, and up 2 million from Q1's 81 million. Gen counts both subscribers and anyone with a revenue-generating transaction such as a MoneyLion cash advance, so the figure isn't a pure subscriber count.

What the headline numbers hide

• The year-ago comparison is weak. Q2 FY2026 included a $69 million write-down of private-company investments (in other expense) and paid $99 million of tax on $233 million of pretax income, a 42% rate. This quarter the same $99 million of tax was on $386 million, a 26% rate. Pretax income rose 66%; operating income rose 16%. Most of the gap between 16% and 122% is those two items, plus interest expense falling to $123 million from $146 million.
• Bookings grew slower than revenue. Bookings rose 10.2% against revenue's 12.2%, and at $1,347 million they were below revenue for the quarter; contract liabilities (cash collected in advance for service not yet delivered) fell $24 million in the quarter. One quarter is not a trend, but bookings lead revenue for a subscription business.
• The adjusted figure excludes recurring costs. Adjusted EPS of $0.74 is 54% above GAAP's $0.48. The largest exclusions are $118 million of amortization of acquired intangibles ($0.20 a share) and $56 million of stock compensation ($0.09). There were no restructuring charges this quarter (vs $32 million in Q1), so the gap is mostly these recurring items.
• The Instacash cost keeps rising. The cash flow statement shows a $69 million loss on selling MoneyLion's Instacash cash advances (vs $55 million a year ago). Gen sells these advances to an outside buyer at a discount and books the loss in sales and marketing.
• Cash flow was strong, but last year's was unusually low. Operating cash flow of $326 million beat net income of $287 million. The year-ago $116 million was held down by a $225 million drop in income taxes payable, so the 181% increase overstates the improvement. Year to date, operating cash flow is $760 million against $502 million of net income, and free cash flow is $753 million.
• Buybacks picked up. Gen bought back $171 million of stock this quarter (none a year ago) and paid $76 million of dividends. Diluted shares fell 3.4% to 603 million from 624 million, which on its own adds about 3.5 points to EPS growth.
• Debt is coming due. The current portion of long-term debt rose to $1,080 million from $181 million at the fiscal year-end in April, meaning roughly $900 million more now falls due within a year. Total debt on the balance sheet was $8,116 million against $589 million of cash. How Gen refinances that will matter for interest costs, which already take about a quarter of operating income.

On balance the quarter is flattered: EPS rose 122% while operating income rose 16%, because the year-ago quarter carried a $69 million investment write-down and a 42% tax rate (26% now).

Did last quarter's read hold up?

Our Q1 FY2027 report expected Q2 to be the first clean comparison and pointed to the guidance midpoint's roughly 10% growth. Gen beat it: revenue of $1,369 million came in above the top of its $1,325–1,350 million range, and adjusted EPS of $0.74 topped the $0.71–0.73 range. Our other two watch items were mixed. The tax rate did not drift back up; at 26% it was lower than Q1's 33%. The Instacash loss kept rising, to $69 million from $60 million in Q1.

Outlook

Gen raised full-year guidance again on October 28 and gave its first Q3 range (all non-GAAP):

The Q3 midpoint ($1,377.5 million) is barely above Q2's $1,369 million. By our arithmetic the full-year midpoint ($5,490 million) less first-half revenue ($2,705 million) leaves $2,785 million for the second half, which implies Q4 revenue of about $1,408 million. The EPS range implies about $1.51 for the second half after the first half's $1.45 of adjusted EPS.

Our read: growth is real and broad enough to beat guidance two quarters running, and it is increasingly driven by MoneyLion and partner channels that carry lower margins. The 10-Q will show whether Trust-Based segment margins held near Q1's 30%. The numbers to watch in Q3 are whether bookings catch back up with revenue, whether the non-GAAP margin stays near 50%, and how Gen handles the roughly $1.1 billion of debt due within a year.