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What changed in Gen Digital Inc.'s 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of Gen Digital Inc.'s 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.

+426 added−308 removedSource: 10-K (2025-05-15) vs 10-K (2024-05-16)

Top changes in Gen Digital Inc.'s 2025 10-K

426 paragraphs added · 308 removed · 219 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

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Biggest changeReputationDefender is a white glove service that helps customers manage all aspects of their personal branding online, including search results, social media sites and overall web presence. Innovation, Research and Development Gen has a long history of innovation, and we plan to continue to invest in research and development to drive our long-term success.
Biggest changeNorton offers a three-tiered VPN with advanced privacy and malware protection as well as AI-powered protection against sophisticated cyber threats, including scams and phishing attacks. ReputationDefender is a white glove service that helps customers manage all aspects of their personal branding online, including search results, social media sites and overall web presence.
We face global competition from a broad range of companies, including software vendors focusing on cyber safety solutions, operating system providers such as Apple, Google and Microsoft, and ‘pure play’ companies that currently specialize in one or a few particular segments of the market and many of which are expanding their product portfolios into different segments.
We face global competition from a broad range of companies, including software vendors focusing on cyber safety solutions, operating system providers such as Apple, Google and Microsoft, and ‘pure play’ companies that currently specialize in one or a few particular segments of the market (many of which are expanding their product portfolios into different segments).
We believe the competitive factors in our market include innovation, access to a breadth of identity and consumer transaction data, broad and effective service offerings, brand recognition, technology, effective and cost-efficient customer acquisition, having a strong retention rate, customer satisfaction, price, convenience of purchase, ease of use, frequency of upgrades and updates and quality and reliable customer service.
We believe the competitive factors in our market include innovation, access to a breadth of identity and consumer transaction data, broad and effective service offerings, brand recognition, technology, effective and cost-efficient customer acquisition, strong retention rate, customer satisfaction, price, convenience of purchase, ease of use, frequency of upgrades and updates and quality and reliable customer service.
This program is designed to grow our customer base by increasing brand awareness and understanding of our products and services and maximizing our global reach to prospective customers. We help prevent, detect and restore potential damages caused by many cybercriminals. We also make it easy for consumers to find, buy and use our products and services.
This program is designed to grow our customer base by increasing brand awareness and understanding of our products and services and maximizing our global reach to prospective customers. We help prevent, detect and restore potential damages caused by cybercriminals. We also make it easy for consumers to find, buy and use our products and services.
We offer a variety of solutions under the Norton and Avast brands to protect customers’ data either by keeping it anonymous while browsing online through our AntiTrack and Secure Browser products or helping customers remove it from public data broker sites through our Privacy Monitor Assistant and BreachGuard products.
We offer a variety of solutions under the Norton and Avast brands to protect customers’ data either by keeping data anonymous while browsing online through our AntiTrack and Secure Browser products or helping customers remove data from public data broker sites through our Privacy Monitor Assistant and BreachGuard products.
We are our customers’ trusted ally they can depend on to help secure and control their digital lives so they can be free to enjoy the promise of the digital world. We are committed more than ever to protecting and empowering people’s digital lives with personalized, human-centered safety.
We are our customers’ trusted ally that they can depend on to help secure and control their digital lives so they can be free to enjoy the promise of the digital world. We are committed more than ever to protecting and empowering people’s digital lives with personalized, human-centered safety.
Intellectual Property Our intellectual property is an important and vital asset that enables us to develop, market, and sell our software products and services and enhance our competitive position. We are a leader among consumer cyber safety solutions in pursuing patents and currently have a portfolio of over 1,000 U.S. and international patents issued with many pending.
Intellectual Property Our intellectual property (IP) is an important and vital asset that enables us to develop, market, and sell our software products and services and enhance our competitive position. We are a leader among consumer cyber safety solutions in pursuing patents and currently have a portfolio of over 1,000 U.S. and international patents issued with many additional patents pending.
Leveraging our technology platforms, we integrate software and service capabilities within these three categories into comprehensive and easy-to-use products and solutions across our brands. 6 Table of Contents We have also evolved beyond traditional cyber safety to offer adjacent trust-based solutions, including digital identity and access management, digital reputation, and restoration support services.
Leveraging our technology platforms, we integrate software and service capabilities within these three categories into comprehensive and easy-to-use products and solutions across our brands. 7 Table of Contents We have also evolved beyond traditional cyber safety to offer adjacent trust-based solutions, including digital identity and access management, digital reputation, and restoration support services.
The user can choose to add specific premium solutions or upgrade to suites that provide security, identity, and privacy across multiple platforms and devices, thereby becoming a paid customer. 5 Table of Contents Seasonality As is typical for many consumer technology companies, portions of our business are impacted by seasonality.
The user can choose to add specific premium solutions or upgrade to suites that provide security, identity, and privacy across multiple platforms and devices, thereby becoming a paid customer. 6 Table of Contents Seasonality As is typical for many consumer technology companies, portions of our business are impacted by seasonality.
Cybercriminals have not only expanded their reach, but the sophistication of digital threats and attacks are becoming increasingly more realistic and believable. The advancement of AI and large language model (LLM) technology is a key driver of this. Cybercrime, and the ways in which cybercriminals target consumers, continue to evolve along with behaviors and technology.
Cybercriminals have not only expanded their reach, but the sophistication of digital threats and attacks are becoming increasingly more realistic and believable. The advancement of AI and large language model (LLM) technology is a key driver of this increased risk. Cybercrime, and the ways in which cybercriminals target consumers, continue to evolve along with behaviors and technology.
The personal information we process is subject to an increasing number of federal, state, local and foreign laws regarding privacy and data security. For information on the risks associated with complying with privacy and data security laws, please see “Risk Factors” in Item 1A included in this Annual Report on Form 10-K.
The personal information we process is subject to an increasing number of federal, state, local and foreign laws regarding privacy and data security. 10 Table of Contents For information on the risks associated with complying with privacy and data security laws, please see “Risk Factors” in Item 1A included in this Annual Report on Form 10-K.
Cybercrime encompasses any crime committed with devices over the internet and includes crimes where (i) malicious software or unauthorized access is detected on a device, network or online account (such as email, social media, online banking, crypto currency, online retail, gaming, online entertainment, etc.), and unauthorized access or connection to cloud service accounts; (ii) an individual is digitally victimized through a data breach, cyber theft, cyber extortion, or fraud (stolen personally identifiable information, identity theft, etc.); (iii) online stalking, bullying, or harassment is inflicted; or (iv) attacks related to privacy or disinformation (such as online tracking protection, identity impersonation, disinformation on social media, deepfakes, unsecured WiFi, EvilTwin attacks, etc.).
Cybercrime encompasses any crime committed with devices over the internet and includes crimes where (i) malicious software or unauthorized access is detected on a device, network or online account (such as email, social media, online banking, digital assets, online retail, gaming, online entertainment, etc.), and unauthorized access or connection to cloud service accounts; (ii) an individual is digitally victimized through a data breach, cyber theft, cyber extortion, or fraud (stolen personally identifiable information, identity theft, etc.); (iii) online stalking, bullying, or harassment is inflicted; or (iv) attacks related to privacy or disinformation (such as online tracking protection, identity impersonation, disinformation on social media, deepfakes, unsecured WiFi, EvilTwin attacks, etc.).
Of these total users, we have approximately 65 million paid cyber safety customers including over 39 million direct customers with whom we have a direct billing relationship. • Direct-to-consumer channel: We use advertising to elevate our family of brands, attract new customers and generate significant demand for our services.
Of these total users, we have approximately 65 million paid cyber safety customers including over 40 million direct customers with whom we have a direct billing relationship. • Direct-to-consumer channel: We use advertising to elevate our family of brands, attract new customers and generate significant demand for our services.
The key elements of our strategy include the following: • Extend our leadership position through new products and continued enhancement of our solutions and services: Cyber safety is a large and expanding market, which we believe provides a significant growth opportunity.
The key elements of our strategy include the following: • Extend our leadership position through new products and continued enhancement of our trust-based solutions and services: Cyber safety is a large and expanding market, which we believe provides a significant growth opportunity.
Our commitment to overall health and wellness are centered around having an integrated and equitable wellness program that supports body, mind and financial health. • Human Capital Governance: We partner closely with our Board of Directors and the Compensation and Leadership Development Committee on executive compensation, our broader reward strategies and objectives related to talent management, talent acquisition, leadership development, retention and succession, DEI and employee engagement.
Our commitment to overall health and wellness is centered around having an integrated and equitable wellness program that supports body, mind and financial health. • Human Capital Governance: We partner closely with our Board of Directors and the Compensation and Leadership Development Committee on executive compensation, our broader reward strategies and objectives related to talent management, talent acquisition, leadership development, retention and succession, and employee engagement.
Available Information Our internet home page is located at GenDigital.com . We make available our annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and amendments to those reports as soon as reasonably practicable after we electronically file such material with the SEC on our investor relations website located at Investor.GenDigital.com .
Available Information Our internet homepage is located at GenDigital.com . We make available our annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and amendments to those reports as soon as reasonably practicable after we electronically file such material with the SEC on our investor relations website located at Investor.GenDigital.com .
To this end, we offer both free and paid subscription-based cyber safety solutions primarily direct-to-consumer through our family of brands and indirectly through partner relationships. Most of our subscriptions are offered on annual terms, but we also provide monthly subscriptions. As of March 29, 2024, we have approximately 500 million total users, which come from direct, indirect and freemium channels.
To this end, we offer both free and paid subscription-based cyber safety solutions primarily direct-to-consumer through our family of brands and indirectly through partner relationships. Most of our subscriptions are offered on annual terms, but we also provide monthly subscriptions. As of March 28, 2025, we have approximately 500 million total users, which come from direct, indirect and freemium channels.
We developed and implemented a global partner sales organization that targets new, as well as existing, partners to enhance our partner distribution channels. These channels include retailers, telecom service providers, hardware OEMs, employee benefit providers, strategic partners, and small offices, home offices and very small businesses.
We developed and implemented a global partner sales organization that targets new, as well as existing, partners to enhance our partner distribution channels. These channels include retailers, telecom service providers, hardware original equipment manufacturers (OEMs), employee benefit providers, strategic partners, small offices, home offices and very small businesses.
The ability to maintain and protect 10 Table of Contents our intellectual property rights is important to our success, but we believe our business is not materially dependent on any individual patent, copyright, trademark, trade secret, license, or other intellectual property right. However, circumstances outside our control could pose a threat to our intellectual property rights.
The ability to maintain and protect our intellectual property rights is important to our success, but we believe our business is not materially dependent on any individual patent, copyright, trademark, trade secret, license, or other intellectual property right. However, circumstances outside our control could pose a threat to our intellectual property rights.
We are well positioned for driving the awareness of cyber safety for individuals, families, and small businesses, fueled by an increasingly connected world. We maintain a global, omni-channel sales approach, including direct, indirect and freemium acquisition and a family of brands marketing program.
We are well-positioned to drive awareness of cyber safety for individuals, families, and small businesses, fueled by an increasingly connected world. We maintain a global, omni-channel sales approach, including direct, indirect and freemium acquisition and a family of brands marketing program.
To fuel our growth, our consumer-centric strategy is to provide comprehensive and easy-to-use integrated platforms, which we have built in-house or acquired. By combining and leveraging our family of trusted consumer brands, including offerings from Norton, Avast, LifeLock, Avira, AVG, ReputationDefender and CCleaner, we deliver an industry-leading set of cyber safety solutions. We are positioned for long-term growth and expansion.
To fuel our growth, our consumer-centric strategy is to provide comprehensive and easy-to-use integrated platforms, which we have built in-house or acquired. By combining and leveraging our family of trusted consumer brands, including offerings from Norton, Avast, LifeLock and more, we deliver an industry-leading cyber safety and trust-based solutions. We are positioned for long-term growth and expansion.
Outside the US, we offer Norton branded plans that include dark web monitoring in over 50 countries and monitoring of credit, social media and financial accounts, restoration support and identity theft insurance in select countries. • Online Privacy (VPN, multiple personal data protection products, ReputationDefender): Our VPN solutions offered through the Norton, Avast and AVG brands enhance security and online privacy by providing an encrypted data tunnel.
Plans include dark web monitoring in over 50 countries and monitoring of credit, social media and financial accounts, restoration support and identity theft insurance in select countries. • Online Privacy (VPN, multiple personal data protection products, ReputationDefender): Our virtual private network (VPN) solutions offered through the Norton, Avast and AVG brands enhance security and online privacy by providing an encrypted data tunnel.
According to our most recent research, Norton has 85% global brand awareness, and we are best positioned and top of mind in consumer cyber safety, according to the 2023 Gen Brand Tracker.
According to our most recent research, Norton has 93% global brand awareness, and we are best positioned and top of mind in consumer cyber safety, according to the internal H1 2025 Gen Brand Tracker.
We also provide performance and optimization software solutions that frees up space on devices, clears online tracking and helps machines run faster. • Identity Protection (US: LifeLock Identity Theft Protection, Avast and AVG Secure Identity; International: Norton Identity Theft Protection, Dark Web Monitoring): In the US, we offer Identity Theft protection as part of our LifeLock, Avast and AVG brands.
We also provide performance and optimization software solutions that free up space on devices, clear online tracking and help machines run faster. • Identity Protection (U.S.: LifeLock Identity Theft Protection, Avast and AVG Secure Identity; International: Norton Identity Theft Protection, Dark Web Monitoring): In the U.S., we offer Identity Theft protection as part of our LifeLock, Avast and AVG brands.
Our success in helping achieve this mission depends, in large part, on the success of our employees. • General Employee Demographics: As of March 29, 2024, we employed just under 3,400 team members in nearly 30 countries worldwide.
Our success in helping achieve this mission depends, in large part, on the success of our employees. • General Employee Demographics: As of March 28, 2025, we employed just under 3,500 team members in over 20 countries worldwide.
In the event of identity theft, we assign an Identity Restoration Specialist to work directly with customers to help restore their identities, and all plans include reimbursements for losses and expenses incurred ranging up to $3 million.
In the event of identity theft, we assign an Identity Restoration Specialist to work directly with customers to help restore their identities, and all plans include reimbursements for losses and expenses incurred ranging up to $3 million. Outside the U.S., we offer Norton and have expanded Avast and AVG branded plans to additional regions.
However, we believe the net impact on our business is limited. Seasonal behavior in orders primarily reflects consumer spending patterns where our fiscal third and fourth quarters are generally higher due to the holidays in our third quarter, as well as follow-on holiday purchases and the U.S. tax filing season which typically is in our fourth quarter.
Seasonal behavior in orders primarily reflects consumer spending patterns during our fiscal third and fourth quarters, as order volume is generally higher due to the holidays in our third quarter, as well as due to follow-on holiday purchases and the U.S. tax filing season which is in our fourth quarter.
The Technology team at Gen is driving the company’s future technologies and innovation and helping guide the consumer cybersecurity industry. Our global technology research organization is focused on applied research projects, with the goal of rapidly creating new products to address consumer trends and grow the business, including defending consumer digital privacy and identity.
Our global technology research organization is focused on applied research projects, with the goal of rapidly creating new products to address consumer trends and grow the business, including defending consumer digital privacy and identity.
The last decade has brought increasingly impressive technological advances that have unlocked new ways to play and transact online, control smart homes, and more. The possibilities in the digital world will continue to transform our lives.
Today’s world is increasingly digital, and this has changed the way we live our lives every day. The last decade has brought increasingly impressive technological advances that have unlocked new ways to play and transact online, control smart homes, manage our life and more. The possibilities in the digital world will continue to unlock new possibilities.
Our engineering and product management teams are focused on delivering new versions of existing offerings, as well as developing entirely new offerings to drive the company’s global leadership in cyber safety. We are committed to our innovation and research and development efforts.
To do this, we engage and listen to our customers, and we embrace innovation by deploying a global research and development strategy across our cyber safety platform. Our engineering and product management teams are focused on delivering new versions of existing offerings, as well as developing entirely new offerings to drive the company’s global leadership in cyber safety.
However, with each new digital interaction comes increased risk and exposure for consumers as cybercriminals use a mix of old and new tactics and technologies, including phishing, vishing, smishing, based on machine learning and generative artificial intelligence (AI) technologies, to execute highly advanced threats and attacks.
However, as our digital footprint expands, so do the risks and exposure. Cybercriminals use a mix of old and new tactics and technologies, including phishing, vishing, smishing, based on machine learning and generative artificial intelligence (AI) technologies, to execute highly advanced threats and attacks.
For more information on the risks associated with our competitors, please see “Risk Factors” – Risks Related to Our Business Strategy and Industry – “We operate in a highly competitive and dynamic environment, and if we are unable to compete effectively, we could experience a loss in market share and a reduction in revenue” and “We may need to change our pricing models to compete successfully,” in Item 1A included in this Annual Report on Form 10-K. 8 Table of Contents Environmental, Social and Governance (ESG) Our commitment to ESG supports our company Purpose and Mission.
For more information on the risks associated with our competitors, please see “Risk Factors” – Risks Related to Our Business Strategy and Industry – “We operate in a highly competitive and dynamic environment, and if we are unable to compete effectively, we could experience a loss in market share and a reduction in revenue” and “We may need to change our pricing models to compete successfully,” in Item 1A included in this Annual Report on Form 10-K. 9 Table of Contents Human Capital Management At Gen, our mission is to build a comprehensive and easy-to-use integrated portfolio that prevents, detects and responds to cyber threats and cybercrimes in today’s digital world.
We bring award-winning products and services in cyber safety, covering security, 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. Today’s world is increasingly digital, and this has changed the way we live our lives every day.
We bring award-winning products and services in cyber safety, covering security, privacy, identity protection and financial wellness to approximately 500 million users in more than 150 countries, empowering them to live their digital lives safely, privately, and confidently today and for generations to come.
Leveraging our capabilities, our global threat response team handles a wide variety of attacks, including social engineering attacks, file-based attacks, web and network-based attacks, privacy and data exfiltration attacks, identity theft attacks, algorithmic manipulation attacks, and more.
Leveraging our capabilities, our global threat response team handles a wide variety of attacks, including social engineering attacks, file-based attacks, web and network-based attacks, privacy and data exfiltration attacks, identity theft attacks, algorithmic manipulation attacks, and more. 8 Table of Contents Our differentiated approach is powered by our global scale and visibility, geographically distributed cloud data platform, and advanced AI-based automation.
With dual headquarters in Tempe, Arizona, and in Prague, Czech Republic, we have over 1,000 active employees located in the U.S. and nearly 900 active employees in the Czech Republic. None of our U.S. employees are represented by a labor union or covered by a collective bargaining agreement.
With dual headquarters in Tempe, Arizona, and in Prague, Czech Republic, we have over 1,000 active employees located in the U.S. and nearly 900 active employees in the Czech Republic.
Company Overview Gen is a global company powering Digital Freedom with a family of trusted brands including Norton, Avast, LifeLock, Avira, AVG, ReputationDefender and CCleaner.
We win for our customers, with passion and integrity. Company Overview Gen is a global company powering Digital Freedom with a family of trusted brands including Norton, Avast, LifeLock and more.
Our differentiated approach is powered by our global scale and visibility, geographically distributed cloud data platform, and advanced AI-based automation. 7 Table of Contents Industry Overview Cyber safety is a growing market, fueled by the increase in activities online over the years as well as the years ahead. The core markets that we participate in are security, identity and privacy.
Industry Overview Cyber safety is a growing market, fueled by the increase in activities online over the years as well as expected growth in the years ahead. The core markets that we participate in are security, identity and privacy.
Item 1. Business Purpose and Mission Purpose: Powering Digital Freedom. Mission: We create technology solutions for people to take full advantage of the digital world, safely, privately, and confidently so together, we can build a better tomorrow. Our Values Protecting people is what inspires us, and our people are at the core of what we do.
Item 1. Business Purpose and Mission Purpose: Powering Digital Freedom. Mission: We create innovative and easy-to-use technology solutions that help people grow, manage and secure their digital and financial lives. Our Values Protecting people is what inspires us, and our people are at the core of what we do.
As cyber threats evolve, we are focused on delivering a portfolio that protects each element of our customers’ digital lives. To do this, we engage and listen to our customers, and we embrace innovation by deploying a global research and development strategy across our cyber safety platform.
Innovation, Research and Development Gen has a long history of innovation, and we plan to continue to invest in research and development to drive our long-term success. As cyber threats evolve, we are focused on delivering a portfolio that protects each element of our customers’ digital lives.
We continued to focus on learning and development in fiscal 2024, investing further in digital learning via our Rise Learning programs for all employees. Leveraging an extensive breadth of content and learning opportunities, this umbrella of offerings includes Rise Mentorship, Rise eLearning and University of Rise (U Rise).
We continued to focus on learning and development in fiscal 2025, investing further in digital learning via our Learn@Gen program for all employees.
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We seek to attract talent that embraces the following values: • Customer Driven. Community Minded. We are advocates for our customers and are dedicated to making their lives simpler and safer. We are driven by the positive impact we can have on all the communities in which we live and work. • Think Big. Be Bold.
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We seek to attract talent that embraces the following values: • Customer Driven. Community Minded. We are customer obsessed and drive positive impact. • Think Big. Be Bold. We embrace change and innovate fearlessly. • Be Scrappy. Make it Happen. Big or small, we get things done irrespective of title or role. • Play to Win. Together.
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We empower and inspire one another to think in new ways and to embrace change. We take calculated risks and learn fast to drive innovation across the business. • Keep it real. Make it Happen. We are authentic, open, and treat one another with respect.
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However, we believe the net impact on our business is limited.
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We do what we say and say what we do with integrity. • Play to win. Together. We act with passion, purpose, and energy to win with customers and in the marketplace. We leverage the strength of our global team, knowing we’re more powerful together.
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Scams have also continued to become more prevalent and sophisticated and we offer a range of AI-powered features integrated into Norton Cyber Safety products to provide always-on protection from today’s most sophisticated scams across phone calls, texts, emails, and websites.
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Scams have also continued to become more prevalent and sophisticated and we offer real-time scam detection tools such as Norton Genie to help determine if a text, email, social media post or website could be a scam.
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Norton Scam Protection and Scam Protection Pro utilize Norton Genie AI engine to analyze the meaning of words, not just links, helping to stop hidden scam patterns that even the most careful person can miss.
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The Nominating and Governance Committee of our Board of Directors has oversight over the Company’s ESG strategy, and our full Board of Directors receives a quarterly ESG update. This quarterly update includes program information across ethics, community investment, the environment and information on emerging ESG priorities.
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We are committed to our innovation and research and development efforts. The Technology team at Gen is driving the company’s future technologies and innovation and helping guide the consumer cybersecurity industry.
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Additionally, as part of our ESG reporting process, we hold regular meetings with functional leaders to review our ESG disclosures. Our Leadership Team is highly engaged in our ESG efforts. Our Head of Corporate Responsibility and Public Policy provides quarterly updates to our Leadership Team and cross-functional ESG Working Group to review our strategy, progress, and program updates.
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None of our U.S. employees are represented by a labor union or covered by a collective bargaining agreement. • Employee Development and Training: Our people programs are designed to provide our team members with support, resources, and opportunities they need to grow, learn and thrive in their careers.
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Building a brand centered on trust is critically important to our business success, and our focus on ESG helps us earn trust from our customers, employees, investors and shareholders. As such, ESG topics are core to our business strategy. Examples of our efforts include: • Environment: Helping protect our planet is part of promoting a safe and sustainable future.
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Leveraging an extensive breadth of content and learning opportunities, this umbrella of offerings includes LinkedIn Learning catalog, Gen Mentorship, Academics and leadership trainings. • Employee Engagement: We value our people and are committed to creating a positive and fulfilling experience for everyone.
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We work to reduce greenhouse gas emissions from our operations through operational efficiencies, reduce the environmental footprint of our products across their lifecycle through innovative approaches to product development and packaging, promote high standards in our supply chain and engage with employees and environmental partners to amplify our work. • Social: We are proud to support the communities where our team members live and work.
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Our community impact programs include employee volunteering and giving, product donations, signature programs that leverage our unique expertise in increasing digital safety literacy, and corporate philanthropic giving. Our giving focuses on digital safety education; environmental action; and disaster response.
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We also support diversity, equity, and inclusion and employee engagement, discussed in more detail in the Human Capital Management subsection. • Governance: Governance covers many core operating principles overseen by the Nominating and Governance Committee of our Board of Directors.
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This committee has oversight of ESG program and receives quarterly updates on topics such as diversity, ethics, community investment and the environment. Our global culture of responsibility, and the positive contributions we make to the customers, employees, communities, and other stakeholders that we serve drives value for our business.
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Setting strategic, achievable, and business-aligned corporate responsibility objectives helps to guide our work and improves our company performance. We align our ESG programs with the company’s financial goals and focus on the unique positive social and environmental impacts that our business model can have on the world.
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These include: • Data Privacy and Protection: We safeguard our customer, partner and employee data and offer products that help consumers protect their personal data wherever it is found. • Education and Training for cyber safety: We leverage our leading expertise and technology to help educate, train and protect children, families and vulnerable communities online. • Diversity, Equity and Inclusion in Technology: We invest in high-impact non-profits to bring more women and under-represented groups into cybersecurity and technology. • Environment: We focus our environmental strategy on climate and energy, sustainable products, our supply chain, and engagement with employees and nonprofit partners with an emphasis on transparency about our progress and commitments. • Employee Engagement: We provide employees globally with meaningful ways to put their time, skills and monetary donations to work for their favorite causes.
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Gen provides robust benefits for volunteering and giving for all employees including matching donations dollar for dollar to approved nonprofits. During special campaigns, Gen provides an opportunity to double their donations to their favorite causes.
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We cannot guarantee that we will achieve these objectives, and our ability to achieve them is subject to risks and uncertainties both known and unknown, including various risks noted in Item 1A. Risk Factors and elsewhere in this Annual Report on Form 10-K. Our annual ESG and Corporate Responsibility Report can be found at Investor.GenDigital.com/ESG .
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Human Capital Management At Gen, our mission is to build a comprehensive and easy-to-use integrated portfolio that prevents, detects and responds to cyber threats and cybercrimes in today’s digital world.
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As of March 29, 2024, inclusive of our integration of bringing together NortonLifeLock and Avast teams as a combined company, women represented 34% of Gen’s total workforce and held positions in 34% of our leadership.
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In addition, as of March 29, 2024, women represented 40% of our Board of Directors and half of our independent board membership. • Diversity, Equity and Inclusion (DEI): We strive to be a diverse, vibrant community with strong values and a shared commitment to our customers, to each other, the work we do and the world we all share.
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Our mission is to increase our global representation of underrepresented groups at all levels (diversity), where everyone has an opportunity for 9 Table of Contents development and advancement (equity) and can bring their whole selves to work and feel valued every day (inclusion).
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As part of our culture and leadership fabric, we are committed to increasing diversity through our four pillar DEI strategy. This mission is built upon four foundational pillars: (1) measurement and accountability; (2) fostering an inclusive environment; (3) diversifying our workforce; and (4) employee development and retention, which are designed to support, attract, retain and nurture our talent.
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Clear and actionable multi-year representation goals are set at the leadership level to support accountability and progress, against our goals. Diversity and inclusion are woven into our people processes and our culture.
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We ask new hires and employees to self-identify their demographics and other important characteristics to help us better measure the diversity of our applicant pool and of our team to derive insights and actionable people strategies. We post positions on several diverse recruiting sites and have dedicated budget to support increasing diverse candidate pipelines.
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Inclusion is something we strive for and we measure belonging as a key metric in our Engage employee surveys and are proud to support our nine employee resource groups, our Gen communities for people to come together as allies, to learn, support, mentor, and celebrate with one another and to provide an environment where everyone feels seen, heard, respected and valued. • Employee Development and Training: Our people programs are designed to provide our team members with support, resources, and opportunities they need to grow, learn and thrive in their careers.
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Rise eLearning, a collection of over 5,000 digital, on-demand modules categorized around leadership, health and wellness, business skills, and technical skills, experienced a steady increase in participation during the year with over 2,000 individual learners. We also provide group learning designed around TED Talks on topics including leadership, change management and to support our diversity, equity and inclusion efforts.
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Our Rise Mentorship program continues to grow and boasts an active community of mentors and mentees across the world. Our U Rise leadership program that offers best-in-class content from Harvard ManageMentor to inspire and engage existing and aspiring people leaders provides over 40 course options and group learning opportunities. Over 200 participants have enrolled in this program to date.
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As part of our ongoing focus on diverse employee development, we continue to extend our participation in McKinsey & Company’s Connected Leaders Academy for our Asian, Black and Hispanic-Latino leaders.
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Additionally, we had women globally attend the Women in Tech conference and several employees attended the Out & Equal Global Workplace Summit. • Employee Engagement: We value our people and are committed to creating a positive and fulfilling experience for everyone.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeSeveral recent, highly publicized data security breaches, such as the large-scale attacks by foreign nation state actors, the global incident involving the MOVEit file transfer software, and a significant uptick in ransomware/extortion attacks at other companies, have heightened consumer awareness of this issue and may embolden individuals or groups to target our systems or those of our strategic partners or enterprise customers.
Biggest changeRecently, there have been a number of well-publicized attacks or breaches affecting companies in the financial services industry, such as the large-scale attacks by foreign nation state actors and a significant uptick in ransomware/extortion attacks at other companies, that have caused heightened concern by customers, and which may also intensify regulatory focus, cause customers to lose trust in the security of the industry in general and result in reduced use of our services and increased costs, all of which could also have a material adverse effect on our business.
The number and rate at which new customers purchase our products and services depends on a number of factors, including those outside of our control, such as customers’ perceived need for our solutions, competition, general economic conditions, market transitions, product obsolescence, technological change, public awareness of security threats to IT systems, macroeconomic conditions, and other factors.
The number and rate at which new customers purchase our products and services depends on a number of factors, including those outside of our control, such as customers’ perceived need for our solutions and products, competition, general economic conditions, market transitions, product obsolescence, technological change, public awareness of security threats to IT systems, macroeconomic conditions, and other factors.
Our solutions are subject to a high degree of regulation, including a wide variety of international and U.S. federal, state, and local laws and regulations, such as the Fair Credit Reporting Act, the Gramm-Leach-Bliley Act, the Federal Trade Commission Act (the FTC Act), and comparable state laws that are patterned after the FTC Act.
Our solutions are subject to a high degree of regulation, including a wide variety of international and U.S. federal, state, and local laws and regulations, such as the Fair Credit Reporting Act, the Gramm-Leach-Bliley Act, the Federal Trade Commission Act (the FTC Act), and comparable state laws that are patterned after the FTC Act, the U.S.
Our level of indebtedness could have other important consequences, including the following : • We must use a substantial portion of our cash flow from operations to pay interest and principal on the Amended and Restated Credit Agreement, our existing Senior Notes, and other indebtedness, which reduces funds available to us for other purposes such as working capital, capital expenditures, other general corporate purposes and potential acquisitions; • We may be unable to refinance our indebtedness or to obtain additional financing for working capital, capital expenditures, acquisitions or general corporate purposes; • We have significant exposure to fluctuations in interest rates because borrowings under our senior secured credit facilities bear interest at variable rates; • Our leverage may be greater than that of some of our competitors, which may put us at a competitive disadvantage and reduce our flexibility in responding to current and changing industry and financial market conditions; • We may be more vulnerable to an economic downturn or recession and adverse developments in our business; • We may be unable to comply with financial and other covenants in our debt agreements, which could result in an event of default that, if not cured or waived, may result in acceleration of certain of our debt and would have an adverse effect on our business and prospects and could force us into bankruptcy or liquidation; and • Changes by any rating agency to our outlook or credit rating could negatively affect the value of our debt and/or our common stock, adversely affect our access to debt markets and increase the interest we pay on outstanding or future debt.
Our level of indebtedness could have other important consequences, including the following : • We must use a substantial portion of our cash flow from operations to pay interest and principal on the Amended Credit Agreement, our existing Senior Notes, and other indebtedness, which reduces funds available to us for other purposes such as working capital, capital expenditures, other general corporate purposes and potential acquisitions; • We may be unable to refinance our indebtedness or to obtain additional financing for working capital, capital expenditures, acquisitions or general corporate purposes; • We have significant exposure to fluctuations in interest rates because borrowings under our senior secured credit facilities bear interest at variable rates; • Our leverage may be greater than that of some of our competitors, which may put us at a competitive disadvantage and reduce our flexibility in responding to current and changing industry and financial market conditions; • We may be more vulnerable to an economic downturn or recession and adverse developments in our business; • We may be unable to comply with financial and other covenants in our debt agreements, which could result in an event of default that, if not cured or waived, may result in acceleration of certain of our debt and would have an adverse effect on our business and prospects and could force us into bankruptcy or liquidation; and • Changes by any rating agency to our outlook or credit rating could negatively affect the value of our debt and/or our common stock, adversely affect our access to debt markets and increase the interest we pay on outstanding or future debt.
Our effective tax rate could be adversely affected by several factors, many of which are outside of our control, including: • Changes to the U.S. federal income tax laws, including the potential for federal tax law changes put forward by Congress and the current administration including potentially increased corporate tax rates, new minimum taxes and other changes to the way that our US tax liability has been calculated following the 2017 Tax Cuts and Jobs Act.
Our effective tax rate could be adversely affected by several factors, many of which are outside of our control, including: • Changes to the U.S. federal income tax laws, including the potential for federal tax law changes put forward by Congress and the current administration including potentially increased corporate tax rates, new minimum taxes and other changes to the way that our U.S. tax liability has been calculated following the 2017 Tax Cuts and Jobs Act.
Our Amended and Restated Credit Agreement contains covenants that limit our ability and the ability of our restricted subsidiaries to: • Incur additional debt; • Create liens on certain assets to secure debt; • Enter into certain sale and leaseback transactions; • Pay dividends on or make other distributions in respect of our capital stock or make other restricted payments; and • Consolidate, merge, sell or otherwise dispose of all or substantially all of our assets.
Our Amended Credit Agreement contains covenants that limit our ability and the ability of our restricted subsidiaries to: • Incur additional debt; • Create liens on certain assets to secure debt; • Enter into certain sale and leaseback transactions; • Pay dividends on or make other distributions in respect of our capital stock or make other restricted payments; and • Consolidate, merge, sell or otherwise dispose of all or substantially all of our assets.
Factors associated with our industry, the operation of our business, and the markets for our solutions may cause our quarterly financial results to fluctuate, including but not limited to: • Fluctuations in demand for our solutions; • Disruptions in our business operations or target markets caused by, among other things, terrorism or other intentional acts, outbreaks of disease, or earthquakes, floods or other natural disasters; • Entry of new competition into our markets; • Technological changes in our markets; • Our ability to achieve targeted operating income and margins and revenues; • Competitive pricing pressure or free offerings that compete with one or more of our solutions; • Our ability to timely complete the release of new or enhanced versions of our solutions; • The amount and timing of commencement and termination of major marketing campaigns; 22 Table of Contents • The number, severity and timing of threat outbreaks and cyber security incidents; • Loss of customers or strategic partners or the inability to acquire new customers or cross-sell our solutions; • Changes in the mix or type of solutions and subscriptions sold and changes in consumer retention rates; • The rate of adoption of new technologies and new releases of operating systems, and new business processes; • Consumer confidence and spending changes; • The outcome or impact of litigation, claims, disputes, regulatory inquiries or investigations; • The impact of acquisitions (and our ability to achieve expected synergies or attendant cost savings), divestitures, restructurings, share repurchase, financings, debt repayments, equity investments and other investment activities; • Changes in U.S. and worldwide economic conditions, such as economic recessions, the impact of inflation, fluctuations in foreign currency exchange rates including the weakening of foreign currencies relative to USD, which has and may in the future negatively affect our revenue expressed in USD, changes in interest rates, geopolitical conflicts, and other global macroeconomic factors on our operations and financial performance; • The publication of unfavorable or inaccurate research reports about our business by cybersecurity industry analysts; • The success of our ESG initiatives; • Changes in tax laws, rules and regulations; • Changes in tax rates, benefits and expenses; and • Changes in consumer protection laws and regulations.
Factors associated with our industry, the operation of our business, and the markets for our solutions may cause our quarterly financial results to fluctuate, including but not limited to: • Fluctuations in demand for our solutions; • Disruptions in our business operations or target markets caused by, among other things, terrorism or other intentional acts, outbreaks of disease, or earthquakes, floods or other natural disasters; • Entry of new competition into our markets; • Technological changes in our markets; • Our ability to achieve targeted operating income and margins and revenues; • Competitive pricing pressure or free offerings that compete with one or more of our solutions; • Our ability to timely complete the release of new or enhanced versions of our solutions; • The amount and timing of commencement and termination of major marketing campaigns; • The number, severity and timing of threat outbreaks and cyber security incidents; • Loss of customers or strategic partners or the inability to acquire new customers or cross-sell our solutions; • Changes in the mix or type of solutions and subscriptions sold and changes in consumer retention rates; • The rate of adoption of new technologies and new releases of operating systems, and new business processes; • Consumer confidence and spending changes; • The outcome or impact of litigation, claims, disputes, regulatory inquiries or investigations; 29 Table of Contents • The impact of acquisitions (and our ability to achieve expected synergies or attendant cost savings), divestitures, restructurings, share repurchase, financings, debt repayments, equity investments and other investment activities; • Changes in U.S. and worldwide economic conditions, such as economic recessions, the impact of inflation, fluctuations in foreign currency exchange rates including the weakening of foreign currencies relative to USD, which has and may in the future negatively affect our revenue expressed in USD, changes in interest rates, geopolitical conflicts and other global macroeconomic factors on our operations and financial performance; • The publication of unfavorable or inaccurate research reports about our business by cybersecurity industry analysts; • The success of our sustainability initiatives; • Changes in tax laws, rules and regulations; • Changes in tax rates, benefits and expenses; and • Changes in consumer protection laws and regulations.
Additionally, the nature of our identity and information protection products subjects us to the broad regulatory, supervisory and enforcement powers of the Consumer Financial Protection Bureau which may exercise authority with respect to our services, or the marketing and servicing of those services, through the oversight of our financial institution or credit reporting agency customers and suppliers, or by otherwise exercising its supervisory, regulatory or enforcement authority over consumer financial products and services.
Additionally, the nature of our MoneyLion, identity, and information protection products subjects us to the broad regulatory, supervisory and enforcement powers of the Consumer Financial Protection Bureau which may exercise authority with respect to our services, or the marketing and servicing of those services, through the oversight of our financial institution or credit reporting agency customers and suppliers, or by otherwise exercising its supervisory, regulatory or enforcement authority over consumer financial products and services.
A data breach may result in significant legal, financial, and reputational harm, including government inquiries, enforcement actions, litigation, and negative publicity. A series of breaches may be determined to be material at a later date in the aggregate, even if they may not be material individually at the time of their occurrence.
A data breach may result in significant legal, financial, and reputational harm, including government inquiries, enforcement actions, litigation (including class actions), and negative publicity. A series of breaches may be determined to be material at a later date in the aggregate, even if they may not be material individually at the time of their occurrence.
Our general business strategy, including our ability to access existing debt under the terms of our Amended and Restated Credit Agreement may be adversely affected by any such economic downturn, liquidity shortages, volatile business environment or continued unpredictable and unstable market conditions.
Our general business strategy, including our ability to access existing debt under the terms of our Amended Credit Agreement may be adversely affected by any such economic downturn, liquidity shortages, volatile business environment or continued unpredictable and unstable market conditions.
We will continue to monitor and reflect the impact of such legislative changes in future financial statements as appropriate; • Changes in the relative proportions of revenues and income before taxes in the various jurisdictions in which we operate that have differing statutory tax rates; • Changes in the valuation of deferred tax assets and liabilities and the discovery of new information in the course of our tax return preparation process; • The ultimate determination of our taxes owed in any of these jurisdictions is for an amount in excess of the tax provision we have recorded or reserved for; • The tax effects of, and tax planning and changes in tax rates related to significant infrequently occurring events (including acquisitions, divestitures and restructurings) that may cause fluctuations between reporting periods; • Tax assessments, or any related tax interest or penalties, that could significantly affect our income tax expense for the period in which the settlements take place; and 23 Table of Contents • Taxes arising in connection to changes in our workforce, corporate and legal entity structure or operations as they relate to tax incentives and tax rates.
We will continue to monitor and reflect the impact of such legislative changes in future financial statements as appropriate; • Changes in the relative proportions of revenues and income before taxes in the various jurisdictions in which we operate that have differing statutory tax rates; • Changes in the valuation of deferred tax assets and liabilities and the discovery of new information in the course of our tax return preparation process; • The ultimate determination of our taxes owed in any of these jurisdictions is for an amount in excess of the tax provision we have recorded or reserved for; • The tax effects of, and tax planning and changes in tax rates related to significant infrequently occurring events (including acquisitions, divestitures and restructurings) that may cause fluctuations between reporting periods; • Tax assessments, or any related tax interest or penalties, that could significantly affect our income tax expense for the period in which the settlements take place; and • Taxes arising in connection to changes in our workforce, corporate and legal entity structure or operations as they relate to tax incentives and tax rates.
The use or adoption of AI technologies in our products may result in exposure to claims by third parties of copyright infringement or other intellectual property misappropriation, which may require us to pay compensation or license fees to third parties.
The use or adoption of AI technologies in our products may also result in exposure to claims by third parties of copyright infringement or other intellectual property misappropriation, which may require us to pay compensation or license fees to third parties.
Our future success depends on our ability to effectively respond to evolving threats to consumers, as well as competitive technological developments and industry changes, by developing or introducing new and enhanced solutions on a timely basis.
Our future success depends on our ability to effectively respond to evolving threats to consumers, as well as competitive technological developments and industry changes, by developing or introducing new and enhanced solutions and products on a timely basis.
If we do not receive distributions from our subsidiaries, we may be unable to make the required principal and interest payments on our indebtedness. Our Amended and Restated Credit Agreement imposes operating and financial restrictions on us.
If we do not receive distributions from our subsidiaries, we may be unable to make the required principal and interest payments on our indebtedness. Our Amended Credit Agreement imposes operating and financial restrictions on us.
If we do not achieve the benefits anticipated from these investments, or if the achievement of these benefits is delayed, our operating results may be adversely affected. We must continually address the challenges of dynamic and accelerating market trends and competitive developments. Customers may require features and capabilities that our current solutions do not have.
If we do not achieve the benefits anticipated from these research and development investments, or if the achievement of these benefits is delayed, our operating results may be adversely affected. We must continually address the challenges of dynamic and accelerating market trends and competitive developments. Customers may require features and capabilities that our current solutions do not have.
Further, statements about our ESG-related initiatives, goals or commitments and progress with respect to such initiatives, goals or commitments may be based on standards for measuring progress that are still developing, internal controls and processes that continue to evolve, and assumptions that are subject to change in the future.
Further, statements about our sustainability-related initiatives, goals or commitments and progress with respect to such initiatives, goals or commitments may be based on standards for measuring progress that are still developing, internal controls and processes that continue to evolve, and assumptions that are subject to change in the future.
In addition to risks related to license requirements, using open source software, including open source software that incorporates or relies on generative AI, can lead to greater risks than use of third-party commercial software, as open source licensors generally do not provide warranties or controls on origin of the software.
In addition to risks related to license requirements, using open source software, including open source software that incorporates or relies on Gen AI, can lead to greater risks than use of third-party commercial software, as open source licensors generally do not provide warranties or controls on origin of the software.
In addition, many of the risks associated with usage of open source, including open source that incorporates or relies on generative AI, may not or cannot be eliminated and could, if not properly addressed, negatively affect our business.
In addition, many of the risks associated with usage of open source, including open source that incorporates or relies on Gen AI, may not or cannot be eliminated and could, if not properly addressed, negatively affect our business.
The occurrence of a natural disaster, an act of terrorism state-sponsored attacks, a pandemic, geopolitical tensions or armed conflicts, and similar events could result in a 17 Table of Contents decision to close the facilities without adequate notice or other unanticipated problems, which in turn, could result in lengthy interruptions in the delivery of our products and services, which could negatively impact our sales and operating results.
The occurrence of a natural disaster, an act of terrorism state-sponsored attacks, a pandemic, geopolitical tensions or armed conflicts, and similar events could result in a decision to close the facilities without adequate notice or other unanticipated problems, which in turn, could result in lengthy interruptions in the delivery of our products and services, which could negatively impact our sales and operating results.
To compete successfully, we must maintain an innovative research and development effort to develop new solutions and enhance our existing solutions, and effectively adapt to changes in the technology, privacy and data protection standards or trends.
To compete successfully, we must maintain an innovative research and development effort to develop new solutions and products and enhance our existing solutions and products, and effectively adapt to changes in the technology, financial technology, privacy and data protection standards or trends.
Our ability to meet expenses, comply with the covenants under our debt instruments, pay interest and repay principal for our substantial level of indebtedness depends on, among other things, our operating performance, competitive developments, and 20 Table of Contents financial market conditions, all of which are significantly affected by financial, business, economic and other factors.
Our ability to meet expenses, comply with the covenants under our debt instruments, pay interest and repay principal for our substantial level of indebtedness depends on, among other things, our operating performance, competitive developments, and financial market conditions, all of which are significantly affected by financial, business, economic and other factors.
Our competitors could gain market share from us if any of these strategic partners replace our solutions with those of our competitors or with their own solutions. Similarly, they could gain market share from us if these partners promote our competitors’ solutions or their own solutions more frequently or more favorably than our solutions.
Our competitors could gain market share from us if any of these strategic partners replace our solutions with those of our competitors or with their own solutions or promote our competitors’ solutions or their own solutions more frequently or more favorably than our solutions.
Failure to ensure effective transfer of knowledge and smooth transitions involving key employees could hinder our strategic planning and execution. From time to time, key personnel leave our company and the frequency and number of such departures have widely varied and have, in the past, resulted in significant changes to our executive leadership team.
Failure to ensure effective transfer of knowledge and smooth transitions involving key employees could hinder our strategic planning and execution. From time to time, key personnel leave our company and the frequency and number of such departures have widely varied and have, in the past, resulted, and may in the future result in significant changes to our executive leadership team.
We collect, use, process, store, transmit or disclose (collectively, process) an increasingly large amount of confidential information, including personal information (which includes credit card information and other critical data from employees and customers), in connection with the operation of our business, particularly in relation to our identity and information protection service offerings.
In connection with the operation of our business, particularly in relation to our identity and information protection service and financial technology offerings, we collect, use, process, store, transmit or disclose (collectively, process) an increasingly large amount of confidential information, including personal information (which includes credit card information and other critical data) from employees and customers in multiple jurisdictions.
Threat actors have previously and could in the future exploit a new vulnerability before we complete our remediation work or identify a vulnerability that we did not effectively remediate. If that happens, there could be unauthorized access to, or acquisition of, data we maintain, and damage to our systems.
(now Engine by MoneyLion). Threat actors have previously and could in the future exploit a new vulnerability before we complete our remediation work or identify a vulnerability that we did not effectively remediate. If that happens, there could be unauthorized access to, or acquisition of, data we maintain, and damage to our systems.
Hedging or other mitigation actions to mitigate against interest rate exposure may adversely affect our earnings, limit our gains or result in losses, which could adversely affect cash available for distributions. 21 Table of Contents We have previously and may in the future enter into interest rate swap agreements or pursue other interest rate hedging strategies.
Hedging or other mitigation actions to mitigate against interest rate exposure may adversely affect our earnings, limit our gains or result in losses, which could adversely affect cash available for distributions. We have previously and may in the future enter into interest rate swap agreements or pursue other interest rate hedging strategies.
In addition to competing with these vendors directly for sales to end-users of our solutions, we compete with them for the opportunity to have our solutions bundled with the offerings of our strategic partners, such as computer hardware OEMs, internet service providers, operating systems and telecom service providers.
Specifically, in addition to competing with cyber safety vendors directly for sales to end-users of our solutions, we compete with them for the opportunity to have our solutions bundled with the offerings of our strategic partners, such as computer hardware OEMs, internet service providers, operating systems and telecom service providers.
An important part of our growth strategy involves continued investment in direct marketing efforts, indirect partner distribution channels, freemium channels, our sales force, and infrastructure to add new customers.
An important part of our growth strategy involves continued investment in direct marketing efforts, indirect partner distribution channels, expanding enterprise partner relationships, freemium channels, our sales force, and infrastructure to add new customers.
In addition, any legal action to protect proprietary information 19 Table of Contents that we may bring or be engaged in, could be costly, may distract management from day-to-day operations and may lead to additional claims against us, which could adversely affect our operating results.
In addition, any legal action to protect proprietary information that we may bring or be engaged in, could be costly, may distract management from day-to-day operations and may lead to additional claims against us, which could adversely affect our operating results.
Our customer retention rates may decline or fluctuate due to a variety of factors, including the following: • Our customers’ levels of satisfaction or dissatisfaction with our solutions and the value they place on our solutions; • The quality, breadth, and prices of our solutions, including solutions offered in emerging markets; • Our general reputation and events impacting that reputation; • The services and related pricing offered by our competitors; including increasing the availability and efficacy of free solutions; • Disruption by new services or changes in law or regulations that impact the need for or efficacy of our products and services; • Changes in auto-renewal and other consumer protection regulations; 13 Table of Contents • Our customers’ dissatisfaction with our efforts to market additional products and services; • Our customer service and responsiveness to the needs of our customers; • Changes in our target customers’ spending levels as a result of general economic conditions, inflationary pressures or other factors; and • The quality and efficacy of our third-party partners who assist us in renewing customers’ subscriptions.
Our customer retention rates may decline or fluctuate due to a variety of factors, including the following: • Our customers’ levels of satisfaction or dissatisfaction with our solutions and the value they place on our solutions; • The quality, breadth, and prices of our solutions, including solutions offered in emerging markets; • Our general reputation and events impacting that reputation; • The services and related pricing offered by our competitors; including increasing the availability and efficacy of free solutions; • Increases in costs we incur and may pass on to our customers in order to offer our products or services; • Disruption by new services or changes in law or regulations that impact the need for or efficacy of our products and services; • Changes in auto-renewal and other consumer protection regulations; • Our customers’ dissatisfaction with our efforts to market additional products and services; • Our customer service and responsiveness to the needs of our customers; • Changes in our target customers’ spending levels as a result of general economic conditions, inflationary pressures or other factors; and • The quality and efficacy of our third-party partners who assist us in renewing customers’ subscriptions.
The focus from regulators, customers, certain investors, employees, and other stakeholders concerning environmental, social and governance (ESG) matters and related disclosures, both in the United States and internationally, has resulted in, and is likely to continue to result in, increased general and administrative expenses and increased management time and attention spent complying with or meeting ESG-related requirements and expectations.
The evolving focus from regulators, customers, certain investors, employees, and other stakeholders concerning sustainability and governance matters and related disclosures, both in the United States and internationally, has resulted in, and is likely to continue to result in, increased general and administrative expenses and increased management time and attention spent complying with or meeting sustainability-related requirements and expectations.
For example, in 2019, we completed the sale of certain of our enterprise security assets to Broadcom Inc. (the Broadcom sale), in January 2021, we completed the acquisition of Avira, and in September 2022, we completed the acquisition of Avast.
For example, in 2019, we completed the sale of certain of our enterprise security assets to Broadcom Inc. (the Broadcom sale), in January 2021, we completed the acquisition of Avira, in September 2022, we completed the acquisition of Avast, and in April 2025, we completed the acquisition of MoneyLion.
Following the acquisition of Avast, we derive a significant portion of our revenues from customers located outside of the United States, and we have substantial operations outside of the United States, including engineering, finance, sales and customer support.
We derive a significant portion of our revenues from customers located outside of the United States, and we have substantial operations outside of the United States, including engineering, finance, sales and customer support.
Our international operations are subject to risks in addition to those faced by our domestic operations, including: • Difficulties staffing, managing, and coordinating the activities of our geographically dispersed and culturally diverse operations; • Potential loss of proprietary information due to misappropriation or laws that may be less protective of our intellectual property rights than U.S. laws or that may not be adequately enforced; • Requirements of foreign laws and other governmental controls, including tariffs, trade barriers and labor restrictions, and related laws that reduce the flexibility of our business operations; • Fluctuations in currency exchange rates, economic instability and inflationary conditions could make our solutions more expensive or could increase our costs of doing business in certain countries; • Potential changes in trade relations arising from policy initiatives or other political factors; • Regulations or restrictions on the use, import or export of encryption technologies that could delay or prevent the acceptance and use of encryption products and public networks for secure communications; • Local business and cultural factors that differ from our normal standards and practices, including business practices that we are prohibited from engaging in by the Foreign Corrupt Practices Act and other anti-corruption laws and regulations; • Central bank and other restrictions on our ability to repatriate cash from our international subsidiaries or to exchange cash in international subsidiaries into cash available for use in the United States; • Limitations on future growth or inability to maintain current levels of revenues from international sales if we do not invest sufficiently in our international operations; • Difficulties in staffing, managing and operating our international operations; • Costs and delays associated with developing software and providing support in multiple languages; • Political, social or economic unrest, war, terrorism, regional natural disasters, or export controls and trade restrictions, particularly in areas in which we have facilities; and 15 Table of Contents • Multiple and possibly overlapping tax regimes.
Our international operations are subject to risks in addition to those faced by our domestic operations, including: • Difficulties staffing, managing, and coordinating the activities of our geographically dispersed and culturally diverse operations; • Potential loss of proprietary information due to misappropriation or laws that may be less protective of our intellectual property rights than U.S. laws or that may not be adequately enforced; • Requirements of foreign laws and other governmental controls, including tariffs, trade barriers and labor restrictions, and related laws that reduce the flexibility of our business operations; • Fluctuations in currency exchange rates, economic instability and inflationary conditions could make our solutions more expensive or could increase our costs of doing business in certain countries; • Changes in trade relations arising from policy initiatives or other political factors; • Regulations or restrictions on the use, import or export of encryption technologies that could delay or prevent the acceptance and use of encryption products and public networks for secure communications; 16 Table of Contents • Regulations or restrictions regarding the collection, processing, sharing, transfer, portability, security and storage of consumer data (including personal information), including privacy and data protection laws; • Local business and cultural factors that differ from our normal standards and practices, including business practices that we are prohibited from engaging in by the Foreign Corrupt Practices Act and other anti-corruption laws and regulations; • Central bank and other restrictions on our ability to repatriate cash from our international subsidiaries or to exchange cash in international subsidiaries into cash available for use in the United States; • Limitations on future growth or inability to maintain current levels of revenues from international sales if we do not invest sufficiently in our international operations; • Difficulties in staffing, managing and operating our international operations; • Costs and delays associated with developing software and providing support in multiple languages; • Political, social or economic unrest, war, terrorism, regional natural disasters, or export controls and trade restrictions, particularly in areas in which we have facilities and in areas where our engineering and technical development teams are based; and • Multiple and possibly overlapping tax regimes.
We are not able to control many of these factors. Accordingly, our cash flow may not be sufficient to allow us to pay principal and interest on our debt, including our 5.0% Senior Notes due 2025, 6.75% Senior Notes due 2027 and 7.125% Senior Notes due 2030 (collectively, the Senior Notes), and meet our other obligations.
We are not able to control many of these factors. Accordingly, our cash flow may not be sufficient to allow us to pay principal and interest on our debt, including our 6.75% Senior Notes due 2027, 7.125% Senior Notes due 2030 and 6.25% Senior Notes due 2033 (collectively, the Senior Notes), and meet our other obligations.
Item 1A. Risk Factors RISKS RELATED TO OUR BUSINESS STRATEGY AND INDUSTRY If we are unable to develop new and enhanced solutions, or if we are unable to continually improve the performance, features, and reliability of our existing solutions, our business and operating results could be adversely affected.
RISKS RELATED TO OUR BUSINESS STRATEGY AND INDUSTRY If we are unable to develop new and enhanced solutions, or if we are unable to continually improve the performance, features, and reliability of our existing solutions, our business and operating results could be adversely affected.
Any such circumstance could adversely affect our ability to attract and maintain customers as well as strategic partners, cause us to suffer negative publicity or damage to our brand, and 16 Table of Contents subject us to legal claims and liabilities or regulatory penalties.
Any such circumstance could adversely affect our ability to attract and maintain customers as well as strategic partners, cause us to suffer negative publicity or damage to our brand, and subject us to legal claims and liabilities or regulatory penalties.
These channels involve risks, including: • Our resellers, distributors and telecom service providers are generally not subject to minimum sales requirements or any obligation to market our solutions to their customers; • Our reseller and distributor agreements are generally nonexclusive and may be terminated at any time without cause and our partners may terminate or renegotiate their arrangements with us and new terms may be less favorable due to competitive conditions in our markets and other factors; • Our resellers, distributors and OEMs may encounter issues or have violations of applicable law or regulatory requirements or otherwise cause damage to our reputation through their actions; 14 Table of Contents • Our resellers and distributors frequently market and distribute competing solutions and may, from time to time, place greater emphasis on the sale of competing solutions due to pricing, promotions and other terms offered by our competitors; • Any consolidation of electronics retailers can increase their negotiating power with respect to software providers such as us and any decline in the number of physical retailers could decrease the channels of distribution for us; • The consolidation of online sales through a small number of larger channels has been increasing, which could reduce the channels available for online distribution of our solutions; and • Sales through our partners are subject to changes in general economic conditions, strategic direction, competitive risks, and other issues that could result in fewer sales, or cause our partners to suffer financial difficulty which could delay payments to us, affecting our operating results.
These channels involve risks, including: • Our resellers, distributors and telecom service providers are generally not subject to minimum sales requirements or any obligation to market our solutions to their customers; • Our reseller and distributor agreements are generally nonexclusive and may be terminated at any time without cause and our partners may terminate or renegotiate their arrangements with us and new terms may be less favorable due to competitive conditions in our markets and other factors; • Our resellers and distributors may encounter issues or have violations of applicable law or regulatory requirements or otherwise cause damage to our reputation through their actions; • Our resellers and distributors frequently market and distribute competing solutions and may, from time to time, place greater emphasis on the sale of competing solutions due to pricing, promotions and other terms offered by our competitors; • Any consolidation of electronics retailers can increase their negotiating power with respect to software providers such as us and any decline in the number of physical retailers could decrease the channels of distribution for us; • The consolidation of online sales through a small number of larger channels has been increasing, which could reduce the channels available for online distribution of our solutions; and • Sales through our partners are subject to changes in general economic conditions, strategic direction, competitive risks, and other issues that could result in fewer sales, or cause our partners to suffer financial difficulty which could delay payments to us, affecting our operating results. 15 Table of Contents If we fail to manage our sales and distribution channels successfully, these channels may conflict with one another or otherwise fail to perform as we anticipate, which could reduce our sales and increase our expenses as well as weaken our competitive position.
In addition, the introduction of new products or services by competitors, and/or market acceptance of products or services based on emerging or alternative technologies, could make it easier for other products or services to compete with our solutions.
In addition, the introduction of new products or services by existing or future competitors, and/or market acceptance of products or services based on emerging or alternative technologies, could make it easier for other products or services to compete with our solutions and reduce our market share in the future.
If such a disagreement were to occur, and our position was not sustained, we could be required to pay additional taxes, interest and penalties, which could result in one-time tax charges, higher effective tax rates, reduced cash flows and lower overall profitability of our operations.
If such a disagreement were to occur, and our position was not sustained, we could be required to pay additional taxes, interest and penalties, which could result in one-time tax charges, higher effective tax rates, reduced cash flows and lower overall profitability of our operations. Item 1B. Unresolved Staff Comments None.
It is not possible to predict the broader consequences of geopolitical conflicts, such as the Russia-Ukraine conflict, and the numerous conflicts in the Middle East, and other conflicts that may arise in the future, which could include geopolitical instability and uncertainty; adverse impacts on global and regional economic conditions and financial markets, including significant volatility in credit, capital, and currency markets; reduced economic activity; changes in laws and regulations affecting our business, including further sanctions or counter-sanctions which may be enacted; and increased cybersecurity threats and concerns.
It is not possible to predict the broader consequences of existing geopolitical conflicts and other conflicts that may arise in the future, which could include geopolitical instability and uncertainty; adverse impacts on global and regional economic conditions and financial markets, including significant volatility in credit, capital, and currency markets; reduced economic activity; changes in laws and regulations affecting our business, including further sanctions or counter-sanctions which may be enacted; and increased cybersecurity threats and concerns.
For example, developing and acting on ESG-related 18 Table of Contents initiatives and collecting, measuring and reporting ESG-related information and metrics can be costly, difficult and time consuming and is subject to evolving reporting standards, including the SEC’s climate-related reporting requirements and the recent California legislation, which includes disclosure requirements relating to voluntary carbon offsets and a wide range of environmental marketing claims.
For example, developing and acting on sustainability-related initiatives and collecting, measuring and reporting sustainability-related information and metrics can be costly, difficult and time consuming and is subject to evolving reporting standards, including the recent California legislation, which includes disclosure requirements relating to voluntary carbon offsets and a wide range of environmental marketing claims.
Portions of our business are impacted by seasonality. Seasonal behavior in orders has historically occurred in the third and fourth quarters of our fiscal year, which include the important selling periods during the holidays in our third quarter, as well as follow-on holiday purchases and the U.S. tax filing season, which is typically in our fourth quarter.
Seasonal behavior in orders has historically occurred in the third and fourth quarters of our fiscal year, which include the important selling periods during the holidays in our third quarter, as well as follow-on holiday purchases and the U.S. tax filing season, which is typically in our fourth quarter.
Such attempts are increasing in number and in technical sophistication, including through the use of AI, and have in the past and could in the future expose us and the affected parties, to risk of loss or misuse of proprietary, personal or confidential information or disruptions of our business operations. In addition, our internal IT environment continues to evolve.
Such attempts are increasing in number and in technical sophistication, including through the use of AI, and have in the past and could in the future expose us and the affected parties, to risk of loss or misuse of proprietary, personal or confidential information or disruptions of our business operations.
Macroeconomic factors, such as high inflation, high interest rates, and volatility in foreign currency exchange rates and capital markets could negatively influence our future acquisition opportunities.
Macroeconomic factors, such as fluctuating tariffs, trade wars. high inflation, high interest rates, and volatility in foreign currency exchange rates and capital markets could negatively influence our future acquisition opportunities.
These attacks may target us, our partners, suppliers, vendors or customers. Similarly, experienced computer programmers or other sophisticated individuals or entities, including malicious hackers, state-sponsored organizations, and insider threats including actions by employees and third-party service providers, have attempted to penetrate, and in some cases have penetrated, our network security or the security of our vendors or suppliers.
Similarly, experienced computer programmers or other sophisticated individuals or entities, including malicious hackers, state-sponsored organizations, and insider threats including actions by employees and third-party service providers, have attempted to penetrate, and in some cases have penetrated, our network security or the security of our vendors or suppliers.
Our reputation and/or business could be negatively impacted by ESG matters and/or our reporting of such matters.
Our reputation and/or business could be negatively impacted by sustainability and governance matters and/or our reporting of such matters.
Furthermore, our business administration, human resources, compliance efforts and finance services depend on the proper functioning of our computer, telecommunication and other related systems and operations.
Furthermore, our business administration, human resources, compliance efforts and finance services depend on the proper functioning of our computer, telecommunication and other related systems and operations, which are highly technical and complex.
Our acquisition and divestiture activities have and may continue to involve a number of risks and challenges, including: • Complexity, time and costs associated with managing these transactions, including the integration of acquired and the winding down of divested business operations, workforce, products, IT systems and technologies; • Challenges in retaining the customers of acquired businesses, providing the same level of service to existing customers with reduced resources, or retaining the third-party relationships, including with suppliers, service providers, and vendors, among others; • Diversion of management time and attention; • Loss or termination of employees, including costs and potential institutional knowledge loss associated with the termination or replacement of those employees; • Assumption of liabilities of the acquired and divested business or assets, including pending or future litigation, investigations or claims related to the acquired business or assets; • Addition of acquisition-related debt; • Difficulty entering into or expanding in new markets or geographies; • Increased or unexpected costs and working capital requirements; • Dilution of stock ownership of existing stockholders; • Ongoing contractual obligations and unanticipated delays or failure to meet contractual obligations; • Substantial accounting charges for acquisition-related costs, asset impairments, amortization of intangible assets and higher levels of stock-based compensation expense; and • Difficulty in realizing potential benefits, including cost savings and operational efficiencies, synergies and growth prospects from integrating acquired businesses.
Our acquisition and divestiture activities have and may continue to involve a number of risks and challenges, including: • Complexity, time and costs associated with managing these transactions, including the integration of acquired and the winding down of divested business operations, workforce, products, services, IT systems and technologies; • Challenges in maintaining uniform standards, controls, procedures and policies within the combined organization; • Challenges in retaining the customers of acquired businesses, providing the same level of service to existing customers with reduced resources, or retaining the third-party relationships, including with suppliers, service providers, and vendors, among others; • Diversion of management time and attention; • Loss or termination of employees, including costs and potential institutional knowledge loss associated with the termination or replacement of those employees; • Assumption of liabilities of the acquired and divested business or assets, including pending or future litigation, investigations or claims related to the acquired business or assets; • Addition of acquisition-related debt; • Difficulty entering into or expanding in new markets or geographies; • Increased or unexpected costs and working capital requirements; • Dilution of stock ownership of existing stockholders; • Ongoing contractual obligations and unanticipated delays or failure to meet contractual obligations; • Regulatory risks, including remaining in good standing with existing regulatory bodies or receiving any necessary approvals, as well as being subject to new regulators with oversight over an acquired business; 13 Table of Contents • Substantial accounting charges for acquisition-related costs, asset impairments, amortization of intangible assets and higher levels of stock-based compensation expense; and • Difficulty in realizing potential benefits, including cost savings and operational efficiencies, synergies and growth prospects from integrating acquired businesses.
The occurrence of any of these events, as well as a failure to promptly remedy them when they occur, could compromise our systems and the information stored in our systems.
The occurrence of any of these events, as well as a failure to promptly remedy them when they occur, could compromise our systems and the information stored in our systems and may cause us to lose consumer trust.
The use of such software may expose us to risks as the intellectual property ownership and license rights, including copyright, of generative AI software and tools, has not been fully interpreted by U.S. courts or been fully addressed by federal, state, or international regulations.
Some open source software may include Gen AI software which may expose us to risks as the intellectual property ownership and license rights, including copyright, of Gen AI software and tools has not been fully interpreted by U.S. courts or been fully addressed by federal, state, or international regulations.
Additionally, changes in the macroeconomic environment have previously and may continue to affect our business. Our solutions are discretionary purchases, and customers may reduce or eliminate their discretionary spending on our solutions during a difficult macroeconomic environment.
Any such changes may reduce revenue and margins and could adversely affect our financial results. Additionally, changes in the macroeconomic environment have previously and may continue to affect our business. Our solutions are discretionary purchases, and customers may reduce or eliminate their discretionary spending on our solutions during a difficult macroeconomic environment.
Failure to secure any necessary financing in a timely manner and on favorable terms could have a material adverse effect on our operations, growth strategy, financial performance and stock price and could require us to alter our operating plans.
Failure to secure any necessary financing in a timely manner and on favorable terms could have a material adverse effect on our operations, growth strategy, financial performance and stock price and could require us to alter our operating plans. We rely on a variety of funding sources to support our business model.
The development and introduction of new solutions involve significant commitments of time and resources and are subject to risks and challenges including but not limited to: • Lengthy development cycles; • Evolving industry and regulatory standards and technological developments, including AI and machine learning, by our competitors and customers; • Rapidly changing customer preferences and accurately anticipating technological trends or needs; • Evolving platforms, operating systems, and hardware products, such as mobile devices; • Product and service interoperability challenges with customer’s technology and third-party vendors; • The integration of products and solutions from acquired companies; • Availability of engineering and technical talent; • Entering new or unproven market segments; and • Executing new product and service strategies. 11 Table of Contents In addition, third parties, including operating systems and internet browser companies, have in the past and may in the future limit the interoperability of our solutions with their own products and services, in some cases to promote their own offerings or those of our competitors.
The development and introduction of new solutions involve significant commitments of time and resources and are subject to risks and challenges including but not limited to: • Lengthy development cycles; • Evolving industry and regulatory standards and technological developments, including AI and machine learning, by our competitors and customers; • Rapidly changing customer preferences and accurately anticipating technological trends or needs; • Evolving platforms, operating systems, and hardware products, such as mobile devices; • Product and service interoperability challenges with customer’s technology and third-party vendors; • The integration of products and solutions from acquired companies; • Availability of engineering and technical talent; • Entering new or unproven market segments; • New and evolving regulation; and • Executing new product and service strategies.
We embrace new ways of sharing data and communicating internally and with partners and customers using methods such as social networking and other consumer-oriented technologies. We also remain vigilant with the increasing use of generative AI models in our internal systems which may create new attack methods for adversaries.
In addition, our internal IT environment continues to evolve. We embrace new ways of sharing data and communicating internally and with partners and customers using methods such as social networking and other consumer-oriented technologies. The increasing use of Gen AI models in our internal systems which may create new attack methods for adversaries.
Our quarterly financial results have fluctuated in the past and are likely to vary in the future due to a number of factors, many of which are outside of our control.
Fluctuations in our quarterly financial results have affected the trading price of our stock in the past and could affect the trading price of our stock in the future. Our quarterly financial results have fluctuated in the past and are likely to vary in the future due to a number of factors, many of which are outside of our control.
We may experience a material increase in cancellations by customers or a material reduction in our retention rate in the future, especially in the event of a prolonged recession or a worsening of current conditions as a result of inflation, changes in interest rates, or other macroeconomic events.
We may experience a material increase in cancellations by customers or a material reduction in our retention rate in the future, especially in the event of a prolonged recession or a worsening of current conditions as a result of trade wars, fluctuating tariff rates, inflation, changes in interest rates, government shutdowns, political developments and unrest or other macroeconomic events.
If we fail to achieve progress with respect to our ESG-related initiatives, goals or commitments on a timely basis, or at all, or if our ESG-related data, processes and reporting are incomplete or inaccurate, our reputation, business, financial performance and growth could be adversely affected. We are affected by seasonality, which may impact our revenue and results of operations.
If we fail to achieve progress with respect to our sustainability-related initiatives, goals or commitments on a timely basis, or at all, or if our sustainability-related data, processes and reporting are incomplete or inaccurate, our reputation, business, financial performance and growth could be adversely affected.
Issues in the development and deployment of AI may result in reputational harm and legal liability and could adversely affect our results of operations. We have incorporated, and are continuing to develop and deploy, AI into many of our products, solutions and services. AI presents challenges and risks that could affect our products, solutions and services, and therefore our business.
Issues in the development and deployment of artificial intelligence (“AI”) may result in reputational harm and legal liability and could adversely affect our results of operations. We have incorporated, and are continuing to develop and deploy, AI, including Gen AI, into many of our products, solutions and services.
In addition, audits by tax authorities could result in additional tax payments for prior periods. We are a multinational company dual headquartered in the U.S. and the Czech Republic, with our principal executive offices in Tempe, Arizona. As such, we are subject to tax in multiple U.S. and international tax jurisdictions.
We are a multinational company dual headquartered in the U.S. and the Czech Republic, with our principal executive offices in Tempe, Arizona. As such, we are subject to tax in multiple U.S. and international tax jurisdictions.
From time to time we are party to lawsuits and investigations, and third parties have claimed and additional third parties in the future may claim that we infringe their proprietary rights, which has previously and could in the future require significant management time and attention, cause us to incur significant legal expenses and prevent us from selling our products.
From time to time we are party to lawsuits and investigations, which has previously and could in the future require significant management time and attention, cause us to incur significant legal expenses and prevent us from selling our products.
Additionally, changes to applicable privacy or data security laws could impact how we process personal information and therefore limit the effectiveness of our solutions or our ability to develop new solutions.
The expenditure this would require, as well as costs of compliance generally, could harm our financial condition. Additionally, changes to applicable privacy or data security laws could impact how we process personal information and therefore limit the effectiveness of our solutions or our ability to develop new solutions.
By the terms of certain open source licenses, we could be required to release the source code of our proprietary software if we combine our proprietary software with open source software in a certain manner. Some open source software may include generative artificial intelligence (AI) software or other software that incorporates or relies on generative AI.
By the terms of certain open source licenses, we could be required to release the source code of our proprietary software (which could include our proprietary source code or AI models) if we combine our proprietary software with open source software in a certain manner.
In some instances, we may not be able to identify the cause or causes of these performance problems within an acceptable period of time. Interruptions in our solutions could impact our revenues or cause customers to cease doing business with us.
In some instances, we may not be able to identify the cause or causes of these performance problems within an acceptable period of time.
Such government efforts, along with other interest rate pressures arising from an inflationary economic environment, have led to higher financing costs. For example, recent elevated interest rates have resulted in an increase in our cost of debt.
Such government efforts, along with other interest rate pressures arising from an inflationary economic environment, could lead to us to incur even higher interest rates and financing costs and have material adverse effect on our business, operating results, profitability and cash flows. For example, recent elevated interest rates have resulted in an increase in our cost of debt.
If we fail to manage our sales and distribution channels effectively, or if our partners choose not to market and sell our solutions to their customers, our operating results could be adversely affected.
If we fail to manage our sales and distribution channels effectively, if our partners choose not to market and sell our solutions to their customers, or if we have an adverse change in our relationships with key third-party partners, service providers or vendors, our operating results could be materially and adversely affected.
The confidential and personal information we process is subject to an increasing number of federal, state, local and foreign laws regarding privacy and data security, as well as contractual commitments.
The confidential and personal information we process is subject to an increasing number of federal, state, local and foreign laws regarding privacy, data security and the collection, and handling of PII and sensitive data, as well as contractual commitments, and this regulatory framework is rapidly evolving and likely to remain uncertain for the foreseeable future.
Additionally, the Federal Trade Commission (the FTC) and many state attorneys general are interpreting federal and state consumer protection laws to impose standards for the online collection, use, dissemination, and security of data.
These new laws may result in additional uncertainty and require us to incur additional costs and expenses in our effort to comply. Additionally, the Federal Trade Commission (the FTC) and many state attorneys general are interpreting federal and state consumer protection laws to impose standards for the online collection, use, dissemination, and security of data.
From time to time, we receive notices that a tax authority in a particular jurisdiction believes that we owe a greater amount of tax than we have reported to such authority and we are consequently subject to tax audits. These audits can involve complex issues, which may require an extended period of time to resolve and can be highly judgmental.
From time to time, we receive notices that a tax authority in a particular jurisdiction believes that we owe a greater amount of tax than we have reported to such authority and we are consequently subject to tax audits.
Additionally, future adverse developments with respect to specific financial institutions or the broader financial services industry may lead to market-wide liquidity shortages, impair the ability of companies to access near-term working capital needs, and create additional market and economic uncertainty.
A failure of a depository institution to return deposits could result in a loss or impact access to our invested cash or cash equivalents and could adversely impact our operating liquidity and financial performance. 27 Table of Contents Additionally, future adverse developments with respect to specific financial institutions or the broader financial services industry may lead to market-wide liquidity shortages, impair the ability of companies to access near-term working capital needs, and create additional market and economic uncertainty.
From time to time, we review our metrics and may discover inaccuracies or make adjustments to improve their accuracy, which can result in adjustments to our historical metrics. Our ability to recalculate our historical metrics may be impacted by data limitations or other factors that require us to apply different methodologies for such adjustments.
Our ability to recalculate our historical metrics may be impacted by data limitations or other factors that require us to apply different methodologies for such adjustments.
We may need to change our pricing models to compete successfully. The intense competition we face, in addition to general and economic business conditions (including economic volatility, bank failures, and high inflation and interest rates, among other things), may put pressure on us to change our pricing practices.
The intense competition we face, in addition to general and economic business conditions (including rising government debt levels, potential government policy shifts, changing U.S. consumer spending patterns, economic volatility, bank failures, fluctuating tariff rates, trade wars, and high inflation and interest rates, among other things), may put pressure on us to change our pricing practices.
Any failure or perceived failure by us to comply with such obligations has previously and may in the future result in governmental enforcement actions, fines, litigation or public statements against us by consumer advocacy groups or others and could cause our customers to lose trust in us, which could have an adverse effect on our reputation and business.
The burdens imposed by the new state privacy laws and other similar laws that may be enacted at the federal and state level may require us to modify our data processing practices and policies, adapt our goods and services and incur substantial expenditures in order to comply Any failure or perceived failure by us to comply with such obligations has previously and may in the future result in governmental enforcement actions, fines, litigation (including class actions) or public statements against us by consumer advocacy groups or others and could cause our customers to lose trust in us, which could have an adverse effect on our reputation and business.
We are frequently involved in litigation and other proceedings, including, but not limited to, class actions and governmental claims or investigations, some of which may be material initially or become material over time.
Any regulatory action in the future could have a material adverse effect on our business, financial condition, results of operations and cash flows. We are also frequently involved in litigation and other proceedings, including, but not limited to, class actions and governmental claims or investigations, some of which may be material initially or become material over time.
Similarly, if external factors, such as economic conditions, market trends, or business combinations require us to raise our prices, our ability to acquire new customers and retain existing customers may be diminished. Any such changes may reduce revenue and margins and could adversely affect our financial results.
Or we may need to lower our prices or offer similar free introductory products to compete successfully. Similarly, if external factors, such as economic conditions, market trends, or business combinations require us to raise our prices, our ability to acquire new customers and retain existing customers may be diminished.
Any of the foregoing factors could cause the trading price of our outstanding securities to fluctuate significantly. RISK RELATED TO TAXES Changes to our effective tax rate, including through the adoption of new tax legislation or exposure to additional income tax liabilities, could increase our income tax expense and reduce (increase) our net income (loss), cash flows and working capital.
RISKS RELATED TO TAXES Changes to our effective tax rate, including through the adoption of new tax legislation or exposure to additional income tax liabilities, could increase our income tax expense and reduce (increase) our net income (loss), cash flows and working capital. In addition, audits by tax authorities could result in additional tax payments for prior periods.
If we are not successful in managing these risks and challenges, or if our new or improved solutions are not technologically competitive or do not achieve market acceptance, our business and operating results could be adversely affected.
This could also result in decreased demand for our solutions and products, decreased revenue, harm to our reputation, and adversely affect our business, financial condition, results of operations, and cash flows. 11 Table of Contents If we are not successful in managing these risks and challenges, or if our new or improved solutions or products are not technologically competitive or do not achieve market acceptance, our business and operating results could be adversely affected.
If we do not protect our proprietary information and prevent third parties from making unauthorized use of our products and technology, our financial results could be harmed. Much of our software and underlying technology is proprietary. We seek to protect our proprietary rights through a combination of confidentiality agreements and procedures and through copyright, patent, trademark and trade secret laws.
If we do not protect our proprietary information and prevent third parties from making unauthorized use of our products and technology, our financial results could be harmed. Much of our software and underlying technology is proprietary, and thus we are highly dependent on our ability to protect such technology.
Similarly, the Corporate Sustainability Reporting Directive will require large EU companies to make detailed disclosures in relation to certain sustainability-related issues. We communicate certain ESG-related initiatives, goals, and/or commitments regarding environmental matters, diversity, responsible sourcing and social investments and other matters on our website, in our filings with the SEC and elsewhere.
Similarly, the Corporate Sustainability Reporting Directive will require large EU companies to make detailed disclosures in relation to certain sustainability-related issues. We maintain certain sustainability-related initiatives, goals, and/or commitments.
We cannot assure you that any royalty or licensing arrangements that we may seek in such circumstances will be available to us on commercially reasonable terms or at all.
We cannot assure you that any royalty or licensing arrangements that we may seek in such circumstances will be available to us on commercially reasonable terms or at all. We license and use software from third parties in our business and generally must rely on those third parties to protect the licensed rights and avoid infringement.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeThis involves, among other things, conducting pre-engagement risk-based diligence, reviewing security and controls reports, implementing contractual security and notification provisions, and ongoing monitoring as needed. Our information security management system is based upon industry frameworks.
Biggest changeOur processes also address risk and identification of cybersecurity threat risks from our use of third-party service providers. This involves, among other things, conducting pre-engagement risk-based diligence, reviewing security and controls reports, implementing contractual security and notification provisions, and ongoing monitoring as needed.
The Technology and Cybersecurity Committee is comprised entirely of independent directors, all of whom have experience related to 24 Table of Contents information security issues or oversight and meets and reports to the Board on a quarterly basis.
The Technology and Cybersecurity Committee is comprised entirely of independent directors, all of whom have experience related to information security issues or oversight and meets and reports to the Board on a quarterly basis.
We describe whether and how risks from identified cybersecurity threats, including as a result of any previous cybersecurity incidents, have materially affected or are reasonably likely to materially affect us, including our business strategy, results of operations, or financial condition, under the heading “ Our solutions, systems, websites and the data on these sources have been in the past and may continue to be subject to cybersecurity events that could materially harm our reputation and future sales. ” included as part of ”Risk Factors” in Item 1A of this Annual Report on Form 10-K, which disclosures are incorporated by reference herein.
This includes penalties and settlements, of which there were none. 31 Table of Contents We describe whether and how risks from identified cybersecurity threats, including as a result of any previous cybersecurity incidents, have materially affected or are reasonably likely to materially affect us, including our business strategy, results of operations, or financial condition, under the heading “ Our solutions, systems, websites and the data on these sources have been in the past and may continue to be subject to cybersecurity events that could materially harm our reputation and future sales. ” included as part of ”Risk Factors” in Item 1A of this Annual Report on Form 10-K, which disclosures are incorporated by reference herein.
We have implemented security monitoring capabilities designed to alert us to suspicious activity and developed an incident response program that includes periodic testing and is designed to restore business operations quickly. In addition, employees participate in mandatory annual training and receive communications regarding the cybersecurity environment to increase awareness throughout the company.
We have implemented security monitoring capabilities designed to alert us to suspicious activity and developed an incident response program that includes an annual table top exercise and is designed to restore business operations quickly. In addition, employees participate in mandatory annual training and receive communications regarding the cybersecurity environment to increase awareness throughout the company.
In the last fiscal three years, we have not experienced any material information security breach incidences and the expenses we have incurred from information security breach incidences were immaterial. This includes penalties and settlements, of which there were none.
In the last fiscal three years, we have not experienced any material information security breach incidences and the expenses we have incurred from information security breach incidences were immaterial.
Our Chief Information Security Officer (CISO) leads our cybersecurity program, which includes the implementation of controls designed to align with these industry frameworks and applicable statutes and regulations.
Our information security management system is based upon industry frameworks including but not limited to ISO 27001 and NIST Cybersecurity Framework. Our Chief Information Security Officer (CISO) leads our cybersecurity program, which includes the implementation of controls designed to align with these industry frameworks and applicable statutes and regulations.
In addition, we regularly perform evaluations (including independent third-party evaluations) of our security program and our information technology infrastructure and information security management systems. Our processes also address risk and identification of cybersecurity threat risks from our use of third-party service providers.
In addition, we regularly perform evaluations (including independent third-party evaluations) of our security program and our information technology infrastructure and information security management systems. A retained independent third-party firm reviews the maturity of our information security program and the results are discussed annually in the Technology and Cybersecurity Committee of the Board.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeItem 3. Legal Proceedings Information with respect to this Item may be found under the heading “Litigation contingencies” in Note 18 of the Notes to the Consolidated Financial Statements in this Annual Report on Form 10-K which information is incorporated into this Item 3 by reference. Item 4. Mine Safety Disclosures Not applicable. 25 Table of Contents PART II
Biggest changeItem 3. Legal Proceedings Information with respect to this Item may be found under the heading “Litigation contingencies” in Note 18 of the Notes to the Consolidated Financial Statements in this Annual Report on Form 10-K which information is incorporated into this Item 3 by reference. Item 4. Mine Safety Disclosures Not applicable. 32 Table of Contents PART II

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest change(2) Under our stock repurchase programs, shares may be repurchased on the open market and through accelerated stock repurchase transactions. As of March 29, 2024, we had $429 million remaining authorized to be completed in future periods with no expiration date.
Biggest changeRepurchases of our equity securities Under our stock repurchase programs, shares may be repurchased on the open market and through accelerated stock repurchase transactions. As of March 28, 2025, we had $2,728 million remaining authorized to be completed in future periods with no expiration date. No shares were repurchased during the three months ended March 28, 2025.
COMPARISON OF FIVE-YEAR CUMULATIVE TOTAL RETURN Among Gen Digital Inc., the S&P 500 Index and the S&P Information Technology Index This performance graph shall not be deemed “soliciting material” or to be “filed” for purposes of Section 18 of the Exchange Act, or otherwise subject to the liabilities under that Section, and shall not be deemed to be incorporated by reference into any of our filings under the Securities Act or the Exchange Act.
COMPARISON OF FIVE-YEAR CUMULATIVE TOTAL RETURN Among Gen Digital Inc., the S&P 500 Index and the S&P Information Technology Index This performance graph shall not be deemed “soliciting material” or to be “filed” for purposes of Section 18 of the Exchange Act, or otherwise subject to the liabilities under that Section, and shall not be deemed to be incorporated by reference into any filings of Gen Digital under the Securities Act or the Exchange Act.
Stock performance graph The graph below compares the cumulative total stockholder return on our common stock with the cumulative total return on the S&P 500 Composite Index and the S&P Information Technology Index for the five fiscal years ended March 29, 2024 (assuming the initial investment of $100 in our common stock and in each of the other indices on the last day of trading for fiscal 2019 and the reinvestment of all dividends).
Stock performance graph The graph below compares the cumulative total stockholder return on our common stock with the cumulative total return on the S&P 500 Composite Index and the S&P Information Technology Index for the five fiscal years ended March 28, 2025 (assuming the initial investment of $100 in our common stock and in each of the other indices on the last day of trading for fiscal 2020 and the reinvestment of all dividends).
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Stock symbol and stockholders of record Our common stock is traded on the Nasdaq Global Select Market under the symbol “GEN”. As of March 29, 2024, there were 3,148 stockholders of record.
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Stock symbol and stockholders of record Our common stock is traded on the Nasdaq Global Select Market under the symbol “GEN”. As of March 28, 2025, there were 2,855 stockholders of record.
Removed
Repurchases of our equity securities Stock repurchases during the three months ended March 29, 2024 were as follows: (In millions, except per share data) Total Number of Shares Purchased (1) Average Price Paid per Share Total Number of Shares Purchased as Part of Publicly Announced Program Maximum Dollar Value of Shares That May Yet Be Purchased Under the Plans or Programs (2) December 30, 2023 to January 26, 2024 — $ — — $ 729 January 27, 2024 to February 23, 2024 14 $ 21.37 14 $ 429 February 24, 2024 to March 29, 2024 — $ — — $ 429 Total number of shares repurchased 14 14 (1) The number of shares repurchased is reported on trade date.
Removed
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.
Removed
This new stock repurchase program will supersede any amounts under the prior stock repurchase programs. 26 Table of Contents Item 6. [Reserved] 27 Table of Contents

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeFinancial summary The following table provides our key financial metrics for fiscal 2024 compared with fiscal 2023: Fiscal Year (In millions, except for per share amounts) 2024 2023 Net revenues $ 3,812 $ 3,338 Operating income (loss) $ 1,122 $ 1,227 Net income (loss) $ 616 $ 1,349 Net income (loss) per share - diluted $ 0.96 $ 2.16 Net cash provided by (used in) operating activities $ 2,064 $ 757 As of (In millions) March 29, 2024 March 31, 2023 Cash and cash equivalents $ 846 $ 750 Contract liabilities $ 1,806 $ 1,788 • Net revenues increased $474 million, primarily due to an additional five and a half months of revenue contribution from Avast, up $419 million as compared to the corresponding period, which was acquired during the second quarter of fiscal 2023 in September 2022, and higher sales in both our consumer security and identity and information protection products, partially offset by unfavorable foreign currency fluctuations. • Operating income (loss) decreased $105 million, primarily due to an increase in legal accrual related to ongoing litigation and an increase in amortization of intangible assets recognized as a result of our acquisition of Avast.
Biggest changeFinancial summary The following table provides our key financial metrics for fiscal 2025 compared with fiscal 2024: Fiscal Year (In millions, except for per share amounts) 2025 2024 Net revenues $ 3,935 $ 3,800 Operating income (loss) $ 1,610 $ 1,110 Net income (loss) $ 643 $ 607 Net income (loss) per share - diluted $ 1.03 $ 0.95 Net cash provided by (used in) operating activities $ 1,221 $ 2,064 As of (In millions) March 28, 2025 March 29, 2024 Cash and cash equivalents $ 1,006 $ 846 • Net revenues increased $135 million, primarily due to higher sales in both our consumer security and identity and information protection products. • Operating income (loss) increased $500 million, primarily due to increased net revenues, decreased legal costs related to ongoing litigation, lower amortization of intangible assets and restructuring costs related to our acquisition of Avast. • Net income (loss) increased $36 million and net income per share increased $0.08, primarily due to increased operating income discussed above and decreased interest expense associated with our Term A and Term B facilities.
A summary of our significant accounting policies is included in Note 1, and a description of recently adopted accounting pronouncements and our expectation of the impact on our Consolidated Financial Statements and disclosures are included in Note 2 of the Notes to Consolidated Financial Statements included in this Annual Report on Form 10-K.
A summary of our significant accounting policies is included in Note 1, and a description of recently adopted accounting pronouncements and our expectation of the impact on our Consolidated Financial Statements and disclosures are included in Note 2 of the Notes to the Consolidated Financial Statements included in this Annual Report on Form 10-K.
The allocation of purchase price requires management to make significant estimates and assumptions in determining the fair values of the assets acquired and liabilities assumed especially with respect to intangible assets. Critical estimates in valuing intangible assets include, but are not limited to, future expected cash flows from customer relationships, developed technology, trade names, and discount rates.
The allocation of purchase price requires management to make significant estimates and assumptions in determining the fair values of the assets acquired and liabilities assumed especially with respect to intangible assets. Critical estimates in valuing intangible assets include, but are not limited to, future expected cash flows from customer relationships, developed technology, trade names and other intangibles, and discount rates.
(4) Transition tax payments on previously untaxed foreign earnings of foreign subsidiaries under the Tax Cuts and Jobs Act, which may be paid through July 2025. (5) Payments for various non-cancelable operating lease agreements that expire on various dates through fiscal 2030. The amounts in the table above exclude expected sublease income.
(4) Transition tax payments on previously untaxed foreign earnings of foreign subsidiaries under the Tax Cuts and Jobs Act, which may be paid through July 2025. (5) Payments for various non-cancelable operating lease agreements that expire on various dates through fiscal 2033. The amounts in the table above exclude expected sublease income.
When changes occur, we recast historical amounts to match the current methodology, such as for fiscal 2023 where we aligned allocation methodologies across similar product categories. The Americas include U.S., Canada, and Latin America; EMEA includes Europe, Middle East, and Africa; APJ includes Asia Pacific and Japan.
When changes occur, we recast historical amounts to match the current methodology, such as for fiscal 2024 where we aligned allocation methodologies across similar product categories. The Americas include U.S., Canada, and Latin America; EMEA includes Europe, Middle East, and Africa; APJ includes Asia Pacific and Japan.
Therefore, $1,346 million in long-term income taxes payable has been excluded from the contractual obligations table. See Note 13 of the Notes to the Consolidated Financial Statements included in this Annual Report on Form 10-K for further information.
Therefore, $1,419 million in long-term income taxes payable has been excluded from the contractual obligations table. See Note 13 of the Notes to the Consolidated Financial Statements included in this Annual Report on Form 10-K for further information.
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).
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 38 Table of Contents 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).
We maintain director and officer insurance, which may cover certain liabilities arising from our obligation to indemnify our directors and officers. Refer to Note 18 of the Notes to the Consolidated Financial Statements included in this Annual Report on Form 10-K for further information on our indemnifications. 35 Table of Contents
We maintain director and officer insurance, which may cover certain liabilities arising from our obligation to indemnify our directors and officers. Refer to Note 18 of the Notes to the Consolidated Financial Statements included in this Annual Report on Form 10-K for further information on our indemnifications.
See Note 10 of the Notes to the Consolidated Financial Statements included in this Annual Report on Form 10-K for further information regarding financial ratios and debt covenant compliance. Dividends On May 9, 2024, we announced a cash dividend of $0.125 per share of common stock to be paid in June 2024.
See Note 10 of the Notes to the Consolidated Financial Statements included in this Annual Report on Form 10-K for further information regarding financial ratios and debt covenant compliance. Dividends On May 6, 2025, we announced a cash dividend of $0.125 per share of common stock to be paid in June 2025.
See Note 10 of the Notes to the Consolidated Financial Statements included in this Annual Report on Form 10-K for further information about our debt and debt covenants. (2) Interest payments calculated based on the contractual terms of the related debt instruments. Interest on variable rate debt was calculated using the interest rate in effect as of March 29, 2024.
See Note 10 of the Notes to the Consolidated Financial Statements included in this Annual Report on Form 10-K for further information about our debt and debt covenants. (2) Interest payments calculated based on the contractual terms of the related debt instruments. Interest on variable rate debt was calculated using the interest rate in effect as of March 28, 2025.
Management’s Discussion and Analysis of Financial Condition and Results of Operations of our Annual Report on Form 10-K for the fiscal year ended March 31, 2023 for year-over-year comparisons of the results of operation between fiscal 2023 and fiscal 2022 as well as discussion of fiscal 2022 performance metrics and cash flow activity, all of which are incorporated herein by reference.
Management’s Discussion and Analysis of Financial Condition and Results of Operations of our Annual Report on Form 10-K for the fiscal year ended March 29, 2024 for year-over-year comparisons of the results of operation between fiscal 2024 and fiscal 2023 as well as discussion of fiscal 2023 performance metrics and cash flow activity, all of which are incorporated herein by reference.
Based on past performance and current expectations, we believe that our existing cash and cash equivalents, together with cash generated from operations and amounts available under our Revolving Facility, 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.
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 March 29, 2024, we are unable to make reasonably reliable estimates of the period of cash settlement with the respective taxing authorities.
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 March 28, 2025, we are unable to make reasonably reliable estimates of the period of cash settlement with the respective taxing authorities.
Debt instruments As of March 29, 2024, our total outstanding principal amount of indebtedness is summarized as follows. See Note 10 of the Notes to the Consolidated Financial Statements included in this Annual Report on Form 10-K for further information on our debt.
Debt instruments As of March 28, 2025, our total outstanding principal amount of indebtedness is summarized as follows. See Note 10 of the Notes to the Consolidated Financial Statements included in this Annual Report on Form 10-K for further information on our debt.
See Note 12 of the Notes to the Consolidated Financial Statements for details of the fiscal 2024 restructuring activities.
See Note 12 of the Notes to the Consolidated Financial Statements for details of the fiscal 2025 restructuring activities.
The participation exemption system under current U.S. federal tax regulations generally allows us to make distributions of non-U.S. earnings to the U.S. without incurring additional U.S. federal tax; however, these distributions may be subject to applicable state or non-U.S. taxes. Debt We have an undrawn revolving credit facility of $1,500 million, which expires in September 2027.
The participation exemption system under current U.S. federal tax regulations generally allows us to make distributions of non-U.S. earnings to the U.S. without incurring additional U.S. federal tax; however, these distributions may be subject to applicable state or non-U.S. taxes. 39 Table of Contents Debt We have an undrawn revolving credit facility of $1,494 million , net of our letters of credit, which expires in September 2027.
OVERVIEW 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, identity protection, and online privacy.
OVERVIEW Gen is a global company powering Digital Freedom with a family of trusted brands including Norton, Avast, LifeLock, MoneyLion and more. 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.
Cash flows The following table summarizes our cash flow activities in fiscal 2024 and 2023: Fiscal Year (In millions) 2024 2023 Net cash provided by (used in): Operating activities $ 2,064 $ 757 Investing activities $ 2 $ (6,547) Financing activities $ (1,961) $ 4,681 Increase (decrease) in cash and cash equivalents $ 96 $ (1,137) See Note 7 of the Notes to the Consolidated Financial Statements included in this Annual Report on Form 10-K for our supplemental cash flow information.
Cash flows The following table summarizes our cash flow activities in fiscal 2025 and 2024: Fiscal Year (In millions) 2025 2024 Net cash provided by (used in): Operating activities $ 1,221 $ 2,064 Investing activities $ (100) $ 2 Financing activities $ (970) $ (1,961) Increase (decrease) in cash and cash equivalents $ 160 $ 96 See Note 7 of the Notes to the Consolidated Financial Statements included in this Annual Report on Form 10-K for our supplemental cash flow information.
Fiscal Year (1) 2024 2023 Americas 65 % 67 % EMEA 24 % 22 % APJ 11 % 11 % (1) From time to time, changes in allocation methodologies cause changes to the revenue by geographic area above.
Fiscal Year (1) 2025 2024 Americas 66 % 65 % EMEA 24 % 24 % APJ 10 % 11 % (1) From time to time, changes in allocation methodologies cause changes to the revenue by geographic area above.
Stock repurchases During the fiscal 2024 and 2023, we executed repurchases of 21 million and 40 million of our common stock under our existing stock repurchase program for an aggregate amount of $441 million and $904 million, respectively.
Stock repurchases During the fiscal 2025 and 2024, we executed repurchases of 11 million and 21 million of our common stock under our existing stock repurchase program for an aggregate amount of $272 million and $441 million, respectively.
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.
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.
The following table sets forth our Consolidated Statements of Operations data as a percentage of net revenues for the periods indicated: Fiscal Year 2024 2023 Net revenues 100 % 100 % Cost of revenues 19 18 Gross profit 81 82 Operating expenses: Sales and marketing 19 20 Research and development 9 9 General and administrative 16 9 Amortization of intangible assets 6 5 Restructuring and other costs 1 2 Total operating expenses 51 46 Operating income (loss) 29 37 Interest expense (18) (12) Other income (expense), net 0 (1) Income (loss) before income taxes 12 24 Income tax expense (benefit) (4) (16) Net income (loss) 16 % 40 % Note: The percentages may not add due to rounding.
The following table sets forth our Consolidated Statements of Operations data as a percentage of net revenues for the periods indicated: Fiscal Year 2025 2024 Net revenues 100 % 100 % Cost of revenues 20 19 Gross profit 80 81 Operating expenses: Sales and marketing 19 19 Research and development 8 9 General and administrative 7 16 Amortization of intangible assets 4 6 Restructuring and other costs 0 2 Impairment of intangible assets 0 — Total operating expenses 39 52 Operating income (loss) 41 29 Interest expense (15) (18) Other income (expense), net 0 — Income (loss) before income taxes 26 12 Income tax expense (benefit) 10 (4) Net income (loss) 16 % 16 % Note: The percentages may not add due to rounding.
This was achieved through the repurchase of 21 million shares of our common stock, totaling $441 million.
This was achieved through the repurchase of 11 million shares of our common stock, totaling $272 million.
(In millions) March 29, 2024 Term Loans $ 6,110 Senior Notes 2,600 Mortgage Loans 6 Total debt $ 8,716 The Credit Agreement contains customary representations and warranties and affirmative and negative covenants, including compliance with specified financial ratios . As of March 29, 2024, we were in compliance with all debt covenants.
(In millions) March 28, 2025 Term Loans $ 5,905 Senior Notes 2,450 Total debt $ 8,355 The Amended Credit Agreement contains customary representations and warranties and affirmative and negative covenants, including compliance with specified financial ratios . As of March 28, 2025, we were in compliance with all debt covenants.
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. Average direct customer count presents the average of the total number of direct customers at the beginning and end of the applicable period.
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.
However, our future liquidity and capital requirements may vary materially from those as of March 29, 2024 depending on several factors, including, but not limited to, economic conditions; political climate; the expansion of sales and marketing activities; the costs to acquire or invest in businesses; and the risks and uncertainties discussed in “Risk Factors” in Item 1A.
However, our future liquidity and capital requirements may vary materially from those as of March 28, 2025 depending on several factors, including, but not limited to, economic conditions; political climate; the expansion of sales and marketing activities; 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 I, Item 1A.
This is offset by dividends paid to shareholders, voluntary prepayments of our Term B facility, a mandatory principal amortization payment of our Term A facility, and repurchases of our common stock. • During fiscal 2024, we returned $1,947 million of capital back to shareholders and bondholders.
This is partially offset by repurchases of our common stock, cash interest paid, dividends paid to shareholders, repayment of 5.00% Senior Notes, voluntary prepayments of our Term B facility, and mandatory principal amortization payments of our Term A and B facility. • During fiscal 2025, we returned $955 million of capital back to shareholders and bondholders.
Timing of payments and actual amounts paid may be different, depending on the time of receipt of goods or services, or changes to agreed-upon amounts for certain obligations.
The expected timing and amount of short-term and long-term payments of the obligations in the following table is estimated based on current information. Timing of payments and actual amounts paid may be different, depending on the time of receipt of goods or services, or changes to agreed-upon amounts for certain obligations.
Net revenues Fiscal Year % Change (In millions, except for percentages) 2024 2023 2024 vs. 2023 Net revenues $ 3,812 $ 3,338 14 % Fiscal 2024 compared to fiscal 2023 Net revenues increased $474 million, primarily due to a $388 million increase in sales of our consumer security products and a $88 million increase in sales of our identity and protection products.
Net revenues Fiscal Year % Change (In millions, except for percentages) 2025 2024 2025 vs. 2024 Net revenues $ 3,935 $ 3,800 4 % Fiscal 2025 compared to fiscal 2024 Net revenues increased $135 million, due to a $95 million increase in sales of our identity and information protection products and a $53 million increase in sales of our consumer security products.
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. Fiscal calendar We have a 52/53-week fiscal year ending on the Friday closest to March 31.
We bring award-winning products and services in cybersecurity, covering security, 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. We completed the acquisition of MoneyLion on April 17, 2025.
Fiscal 2024, 2023 and 2022 in this report refers to fiscal years ended March 29, 2024, March 31, 2023 and April 1, 2022, respectively, each of which was a 52-week year.
Fiscal calendar We have a 52/53-week fiscal year ending on the Friday closest to March 31. Fiscal 2025, 2024 and 2023 in this report refers to fiscal years ended March 28, 2025, March 29, 2024 and March 31, 2023, respectively, each of which was a 52-week year.
It is inherently difficult and subjective to estimate such amounts, as this requires us to determine the probability of various outcomes. We re-evaluate these unrecognized tax benefits on a quarterly basis.
It is inherently difficult and subjective to estimate such amounts, as this requires us to determine the probability of various outcomes. We re-evaluate these unrecognized tax benefits on a quarterly basis. This evaluation is based on factors including, but not limited to, changes in facts or circumstances, changes in tax law, effectively settled issues under audit and new audit activity.
Should any of our estimates and assumptions change or prove to have been incorrect, it could have a material impact on our Consolidated Financial Statements for that reporting period. RESULTS OF OPERATIONS We have elected to omit discussion on the earliest of the three years presented in the Consolidated Financial Statements of this Annual Report on Form 10-K.
Should any of our estimates and assumptions change or prove to have been incorrect, it could have a material impact on our Consolidated Financial Statements for that reporting period. 35 Table of Contents Recently adopted authoritative guidance For a discussion of recently adopted authoritative guidance and their potential effects refer to Note 2 of our Notes to the Consolidated Financial Statements of this Annual Report on Form 10-K.
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. 34 Table of Contents 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.
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.
As of March 29, 2024, the remaining balance of our stock repurchase authorization is $429 million and does not have an expiration date. 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.
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.
Cash from operating activities Our cash flows provided by and used in operating activities in fiscal 2024 increased $1,307 million, primarily due to an income tax refund related to the filing of our fiscal 2023 tax return during the fourth quarter of fiscal 2024 and cash collections from revenue attributable to our acquisition of Avast during the second quarter of fiscal 2023. 33 Table of Contents Cash from investing activities Our cash flows provided by and used in investing activities in fiscal 2024 increased $6,549 million, primarily related to the absence of the total cash consideration paid for our acquisition of Avast during the second quarter of fiscal 2023.
Cash from operating activities Our cash flows provided by and used in operating activities in fiscal 2025 decreased $843 million, primarily due to the absence of an income tax refund related to the filing of our fiscal 2023 tax return received during the fourth quarter of fiscal 2024.
Cash from financing activities Our cash flows provided by and used in financing activities in fiscal 2024 decreased $6,642 million, primarily due to lower repayments of debt and repurchases of common stock under our repurchase program and by the absence of proceeds from the issuance of debt during the fiscal 2023.
Cash from financing activities Our cash flows used in financing activities in fiscal 2025 decreased $991 million, primarily due to the issuance of our 6.25% Senior Notes, lower voluntary prepayments of our Term B facility and repurchases of common stock under our repurchase program.
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 30 Table of Contents 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 36 Table of Contents 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.
Operating expenses Fiscal Year % Change (In millions, except for percentages) 2024 2023 2024 vs. 2023 Sales and marketing $ 733 $ 682 7 % Research and development 332 313 6 % General and administrative 604 286 111 % Amortization of intangible assets 233 172 35 % Restructuring and other costs 57 69 (17) % Total $ 1,959 $ 1,522 29 % Our operating expenses increased in fiscal 2024 compared to fiscal 2023 primarily due to an increase in legal accruals and amortization of intangible assets.
Operating expenses Fiscal Year % Change (In millions, except for percentages) 2025 2024 2025 vs. 2024 Sales and marketing $ 745 $ 733 2 % Research and development 329 332 (1) % General and administrative 291 604 (52) % Amortization of intangible assets 174 233 (25) % Restructuring and other costs 7 57 (88) % Impairment of intangible assets 3 — — % Total $ 1,549 $ 1,959 (21) % Our operating expenses decreased in fiscal 2025 compared to fiscal 2024 primarily due to a decrease in legal accruals, amortization of intangible assets and restructuring costs related to our acquisition of Avast.
We have based our estimates, judgements and assumptions on historical experience and on various other factors we believe to be reasonable under the circumstances. We evaluate our estimates, judgements and assumptions on a regular basis and make changes accordingly. Management believes that the accounting estimates employed and the resulting amounts are reasonable; however, actual results may differ from these estimates.
We evaluate our estimates, judgements and assumptions on a regular basis and make changes accordingly. Management believes that the accounting estimates employed and the resulting amounts are reasonable; however, actual results may differ from these estimates. Making estimates, judgments and assumptions about future events is inherently unpredictable and is subject to significant uncertainties, some of which are beyond our control.
Our ability to recalculate our historical metrics may be impacted by data limitations or other factors that require us to apply different methodologies for such adjustments. We generally do not intend to update previously disclosed metrics for any such inaccuracies or adjustments that are deemed not material.
From time to time, we review our metrics and may discover inaccuracies or make adjustments to improve their accuracy, which can result in adjustments to our historical metrics. Our ability to recalculate our historical metrics may be impacted by data limitations or other factors that require us to apply different methodologies for such adjustments.
Making estimates, judgments and assumptions about future events is inherently unpredictable and is subject to significant uncertainties, some of which are beyond our control. 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.
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. Management believes the following significant accounting policies reflect the critical estimates used in the preparation of our Consolidated Financial Statements.
The methodologies used to measure these metrics require judgment and are subject to change due to improvements or revisions to our methodology. From time to time, we review our metrics and may discover inaccuracies or make adjustments to improve their accuracy, which can result in adjustments to our historical metrics.
We monitor the retention rate to evaluate the effectiveness of our strategies to improve renewals of subscriptions. The methodologies used to measure these metrics require judgment and are subject to change due to improvements or revisions to our methodology.
The following table summarizes supplemental key performance metrics for our solutions: Fiscal Year (In millions, except for per user amounts and percentages) 2024 2023 Direct customer revenue (1) $ 3,353 $ 2,933 Partner revenues $ 396 $ 341 Total cyber safety revenues $ 3,749 $ 3,274 Legacy revenues (2) $ 63 $ 66 Direct customer count (at quarter-end) 39.1 38.2 Direct average revenue per user (ARPU) (3) $ 7.25 $ 7.10 Retention rate 77 % 76 % (1) Non-GAAP Direct customer revenue differs from U.S.
The following table summarizes supplemental key performance metrics for our solutions: Fiscal Year (In millions, except for per user amounts and percentages) 2025 2024 Direct customer revenue $ 3,456 $ 3,341 Partner revenues $ 429 $ 396 Total cyber safety revenues $ 3,885 $ 3,737 Legacy revenues (1) $ 50 $ 63 Direct customer count (at quarter-end) 40.4 39.1 Direct average revenue per user (ARPU) $ 7.26 $ 7.22 Retention rate 78 % 77 % (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.
(In millions) Short-Term Payments Long-Term Payments Total Contractual obligations: Debt (principal payments) (1) $ 175 $ 8,541 $ 8,716 Interest payments on debt (2) 572 1,866 2,438 Purchase obligations (3) 324 186 510 Deemed repatriation taxes (4) 171 139 310 Operating leases (5) 15 42 57 Total $ 1,257 $ 10,774 $ 12,031 (1) As of March 29, 2024, our total outstanding principal amount of indebtedness is comprised of $6,110 million in Term Loans, $2,600 million in Senior Notes and $6 million in mortgage loans.
(In millions) Short-Term Payments Long-Term Payments Total Contractual obligations: Debt (principal payments) (1) $ 291 $ 8,064 $ 8,355 Interest payments on debt (2) 605 1,465 2,070 Purchase obligations (3) 316 118 434 Deemed repatriation taxes (4) 139 — 139 Operating leases (5) 16 48 64 Total $ 1,367 $ 9,695 $ 11,062 (1) As of March 28, 2025, our total outstanding principal amount of indebtedness is comprised of $5,905 million in Term Loans and $2,450 million in Senior Notes.
These actions are expected to be completed by the end of fiscal 2025. During fiscal 2024, we made $41 million in cash payments related to the September 2022 Plan. See Note 12 of the Notes to the Consolidated Financial Statements included in this Annual Report on Form 10-K for further cash flow information associated with our restructuring activities.
See Note 12 of the Notes to the Consolidated Financial Statements included in this Annual Report on Form 10-K for further cash flow information associated with our restructuring activities. 40 Table of Contents Significant contractual obligations The following is a schedule of our principal commitments as of March 28, 2025.
For a further discussion of the potential impacts of the global macroeconomic conditions on our business , please see “Risk Factors” in Item 1A.
For further discussion of the potential impacts of global macroeconomic conditions and geopolitical factors on our business, please see “Risk Factors” in Part I, Item 1A and Part II, Item 7A below. CRITICAL ACCOUNTING ESTIMATES The preparation of our Consolidated Financial Statements and related notes in accordance with generally accepted accounting principles in the U.S. (U.S.
Loss contingencies We are subject to contingencies that expose us to losses, including various legal and regulatory proceedings, asserted and potential claims that arise in the ordinary course of business.
Such a change in recognition or measurement would result in the recognition of a tax benefit or an additional charge to the tax provision in the period. Loss contingencies We are subject to contingencies that expose us to losses, including, but not limited to, regulatory proceedings, claims, mediations, arbitration and litigation, arising out of the ordinary course of business.
CRITICAL ACCOUNTING ESTIMATES The preparation of our Consolidated Financial Statements and related notes in accordance with generally accepted accounting principles in the U.S. requires us to make estimates, including judgments and assumptions that affect the reported amounts of assets, liabilities, revenue and expenses, and related disclosure of contingent assets and liabilities.
GAAP) requires us to make estimates, including judgments and assumptions that affect the reported amounts of assets, liabilities, revenue and expenses, and related disclosure of contingent assets and liabilities. We have based our estimates, judgements and assumptions on historical experience and on various other factors we believe to be reasonable under the circumstances.
This is partially offset by the increase in net revenues discussed above and cost synergies post-acquisition. • Net income (loss) decreased $733 million and net income per share decreased $1.20, primarily due by the absence of the income tax benefit as a result of a tax capital loss in fiscal 2023, decreased operating income discussed above and increased interest expense associated with our senior credit facilities and two senior notes. • Cash and cash equivalents increased by $96 million compared to March 31, 2023, primarily due to cash generated from operating activities during fiscal 2024.
This is offset by the absence of an income tax benefit in the second quarter of fiscal 2024. • Cash and cash equivalents increased by $160 million compared to March 29, 2024, primarily due to cash generated from operating activities during fiscal 2025 and proceeds from the issuance of 6.25% Senior Notes.
We monitor the retention rate to evaluate the effectiveness of our strategies to improve renewals of subscriptions. Net revenues by geographical region Percentage of revenue by geographical region as presented below is based on the billing location of the customers.
We generally do not intend to update previously disclosed metrics for any such inaccuracies or adjustments that are deemed not material. Net revenues by geographical region Percentage of revenue by geographical region as presented below is based on the billing location of the customers.
Repurchases of common stock in fiscal 2023 were $904 million. Cash and cash equivalents As of March 29, 2024, we had cash and cash equivalents of approximately $846 million, of which $379 million was held by our foreign subsidiaries. Our cash and cash equivalents are managed with the objective to preserve principal, maintain liquidity and generate investment returns.
Our cash and cash equivalents are managed with the objective to preserve principal, maintain liquidity and generate investment returns.
Additionally, we paid out a total of $323 million in quarterly dividends and carried out $1,183 million in debt pay downs, including $950 million in voluntary prepayments applied exclusively to the Term B facility. • During fiscal 2024, we increased net Direct customers by 0.9 million, increased monthly Direct ARPU by $0.15, and increased our Direct retention rate by 1%. • During fiscal 2024, we received an $899 million income tax refund related to the filing of our fiscal 2023 tax return, which was recorded net of allowances as part of Other current assets in the Condensed Consolidated Balance Sheets as of March 31, 2023. 28 Table of Contents GLOBAL MACROECONOMIC CONDITIONS Our results of operations and cash flows are subject to fluctuations due to inflation, changes in foreign currency exchange rates relative to U.S. dollars, our reporting currency, changes in interest rates, as well as recession risks, any of which may persist for an extended period.
Additionally, we paid out a total of $313 million in quarterly dividends and carried out $370 million in net debt pay downs, including $30 million in voluntary prepayments applied exclusively to the Term B facility. • During fiscal 2025, we increased net Direct customers by 1.3 million, increased monthly Direct ARPU by $0.04 and increased our Direct retention rate by 1%.
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Additionally, our international results are impacted by the economic conditions in the foreign markets in which we operate and by fluctuations in foreign currency exchange rates. We conduct business in numerous currencies throughout our worldwide operations, and our entities hold monetary assets or liabilities, earn revenues, or incur costs in currencies other than the entity’s functional currency.
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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. For more information on the MoneyLion acquisition, please see Note 19 of the Notes to the Consolidated Financial Statements included in this Annual Report on Form 10-K.
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As a result, we are exposed to foreign exchange gains or losses, which impact our operating results. As part of our foreign currency risk mitigation strategy, we have entered into monthly foreign exchange forward contracts to hedge certain foreign currency balance sheet exposure. In addition, in early 2022, worldwide inflation began to increase.
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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, increased tariffs, foreign currency exchange rate fluctuations, the impact of interest rate fluctuations, elevated inflation, ongoing and new geopolitical conflicts, 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. 34 Table of Contents Despite this, 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.
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In response to the heightened levels of inflation, central banks, including the U.S. Federal Reserve and the European Central Bank, raised interest rates significantly in 2022, resulting in an increase in our cost of debt. Although inflation rates slowed in 2023, global inflation remains high in 2024 and has impacted our results due to higher costs.
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We continue to monitor the direct and indirect impacts of these global macroeconomic or other geopolitical factors. 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.
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Volatile market conditions related to geopolitical conflicts and other macroeconomic events have, at times, affected our results of operations and cash flows in non-material ways; however, geopolitical conflicts and other macroeconomic events may in the future materially impact our results of operations and cash flows.
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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.
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Due to our subscription-based business model, the effect of recent macroeconomic events may not be fully reflected in our results of operations until future periods, if at all. Inflation, interest rates and foreign exchange rates remained volatile in 2023 and fluctuations in these indicators are uncertain and could result in further adverse impacts to our reported results.
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Recently issued authoritative guidance not yet adopted ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures. In December 2023, the FASB issued new guidance to update income tax disclosure requirements, requiring disaggregated information about an entity’s effective tax rate reconciliation as well as income taxes paid. This is effective for fiscal years beginning after December 15, 2024.
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Management believes the following critical accounting policies reflect the significant estimates used in the preparation of our Consolidated Financial Statements.
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We are currently evaluating the impact of the adoption of this guidance on our Consolidated Financial Statements and disclosures. ASU 2024-03 and ASU 2025-01, Income Statement - Reporting Comprehensive Income (Subtopic 220-40): Expense Disaggregation Disclosures.
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This evaluation is based on factors including, but not limited to, changes in facts or circumstances, changes in tax law, 29 Table of Contents effectively settled issues under audit and new audit activity. Such a change in recognition or measurement would result in the recognition of a tax benefit or an additional charge to the tax provision in the period.
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In November 2024, the FASB issued new guidance requiring that public business entities disclose additional information about specific expense categories in the notes to financial statements at interim and annual reporting periods. This is effective for annual reporting periods beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027.
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This was inclusive of $25 million of foreign exchange headwinds, primarily in our consumer security products and a $419 million increase from revenue contribution from Avast due to the additional five and a half months as compared to the corresponding period.
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We are currently evaluating the impact of the adoption of this guidance on our Condensed Consolidated Financial Statements and disclosures. RESULTS OF OPERATIONS We have elected to omit discussion on the earliest of the three years presented in the Consolidated Financial Statements of this Annual Report on Form 10-K. Refer to Part II, Item 7.
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Our metrics may be calculated in a manner different than similar metrics used by other companies.
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This was partially offset by a $13 million decrease in our legacy product offerings. This is inclusive of $11 million of foreign exchange headwinds, in our consumer security solutions. Performance Metrics We regularly monitor a number of metrics in order to measure our current performance and estimate our future performance.
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GAAP direct customer revenue in fiscal 2023 because it excludes a $2 million, reduction of revenue from contract liability purchase accounting adjustments. We believe that eliminating the impact of this adjustment improves the comparability of revenues between periods. In addition, although the adjustment amounts will never be recognized in our U.S.
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Percentage of revenue by geographic region remained consistent in fiscal 2025 and fiscal 2024.
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GAAP financial statements, we do not expect the acquisitions to affect the future renewal rates of revenues excluded by the adjustments.
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Cost of revenues Fiscal Year % Change (In millions, except for percentages) 2025 2024 2025 vs. 2024 Cost of revenues $ 776 $ 731 6 % 37 Table of Contents Fiscal 2025 compared to fiscal 2024 Our cost of revenues increased $45 million, primarily due to a $42 million increase in marketing affiliate expenses.
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(2) 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.
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Fiscal 2025 compared to fiscal 2024 Sales and marketing, research and development and impairment of intangible assets expenses remained relatively flat. General and administrative expense decreased $313 million, primarily due to the absence of $369 million in legal costs related to our litigation with Columbia and GSA in fiscal 2024.
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(3) Due to the close of the acquisition of Avast in the second quarter of fiscal 2023, the fiscal 2023 ARPU is based on the average ARPU for the second, third, and fourth quarter of fiscal 2023, but excludes the first quarter of fiscal 2023.
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This was partially offset by a $66 million legal contract dispute cost with E-commerce Partner B during fiscal 2025. Refer to Note 1 of the Notes to the Consolidated Financial Statements included in this Annual Report on Form 10-K for additional information on the legal contract dispute with E-commerce Partner B.
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While the percentage of revenue by geographic region in fiscal 2024 remains primarily in the Americas, our acquisition of Avast has expanded our presence in countries in the EMEA region. 31 Table of Contents Cost of revenues Fiscal Year % Change (In millions, except for percentages) 2024 2023 2024 vs. 2023 Cost of revenues $ 731 $ 589 24 % Fiscal 2024 compared to fiscal 2023 Our cost of revenues increased $142 million, primarily due to a $93 million increase in the amortization of acquired intangible assets, a $29 million increase in revenue share costs, and a $18 million increase in payment processing fees as a result of higher billings.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeWe may use derivative and non-derivative financial instruments to reduce the volatility of earnings and cash flow that may result from adverse economic conditions and events or changes in foreign currency and interest rates.
Biggest changeWe may use derivative and non-derivative financial instruments to reduce the volatility of earnings and cash flow that may result from adverse economic conditions and events or changes in interest rates and foreign currency exchange rates. 41 Table of Contents Interest rate risk As of March 28, 2025, we had $2,450 million in aggregate principal amount of fixed-rate Senior Notes outstanding, with a carrying amount and a fair value of $2,475 million, based on Level 2 inputs.
Additional information with respect to our debt and derivative instruments is included in Note 10 and Note 11, respectively, of the Notes to the Consolidated Financial Statements included in this Annual Report on Form 10-K. 36 Table of Contents
Additional information related to our debt and derivative instruments is included in Note 10 and Note 11, respectively, of the Notes to the Consolidated Financial Statements included in this Annual Report on Form 10-K. 42 Table of Contents
In addition, we have a $1,500 million revolving credit facility that if drawn bears interest at a variable rate based on SOFR and would be subject to the same risks associated with adverse changes in SOFR.
In addition, we have a $1,494 million revolving credit facility, net of our letters of credit, that if drawn bears interest at a variable rate based on SOFR and would be subject to the same risks associated with adverse changes in SOFR.
Since these notes bear interest at fixed rates, the financial statement risk associated with changes in interest rates is limited to future refinancing of current debt obligations.
The fair value of these notes fluctuates when interest rates change. Since these notes bear interest at fixed rates, the financial statement risk associated with changes in interest rates is limited to future refinancing of current debt obligations.
As of March 29, 2024, we also had $6,110 million outstanding debt with variable interest rates based on the Secured Overnight Financing Rate (SOFR). A hypothetical 100 basis point change in SOFR would have resulted in a $61 million increase in interest expense on an annualized basis.
As of March 28, 2025, we also had $5,905 million outstanding debt with variable interest rates based on the Secured Overnight Financing Rate (SOFR). A hypothetical 100 basis point change in SOFR would have resulted in a $59 million increase in interest expense on an annualized basis.
A hypothetical 100 basis point increase or decrease in interest rates would have resulted in a $18 million increase or $18 million decrease in the fair values of our floating to fixed rate interest swaps at March 29, 2024.
A hypothetical 100 basis point increase or decrease in interest rates would have resulted in a $8 million increase or $10 million decrease in the fair values of our floating to fixed rate interest swaps on March 28, 2025.
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Interest rate risk As of March 29, 2024, we had $2,606 million in aggregate principal amount of fixed-rate Senior Notes, with a carrying amount and a fair value of $2,624 million, based on Level 2 inputs. The fair value of these notes fluctuates when interest rates change.

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