Gen Digital Inc. (NASDAQ:GEN) Q3 2023 Earnings Call Transcript

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Saket Kalia: Very helpful. I’ll get back in queue. Thanks guys.

Vincent Pilette: Thank you.

Operator: Thank you for your questions. Our next question comes from the line of Hamza Fodderwala with Morgan Stanley.

Vincent Pilette: Hey Hamza.

Hamza Fodderwala: Good evening. Thanks for taking my question. So, I wanted just to follow on the net add question because I think that’s probably what folks might be picking on a little bit. But it sounds like the overall environment was pretty consistent with your expectations for this past quarter. But I think last quarter, we saw that the net adds coming in a little bit more stable, at least on the Northern LifeLock side. So I’m curious, was there anything throughout the quarter, perhaps what you saw towards the end of December where the consumer maybe got a little bit weaker as it relates to Gen Digital.

Vincent Pilette: Yes, I understand the question. So, actually, Q1, Q2, Q3, the trends were somewhat in sand dynamic, the same. And you’re right that last quarter, it was the Norton and LifeLock lines, if you want, that were sequentially slightly more under pressure — sorry, less under pressure versus Avast and this quarter is actually the reverse. I would not indicate that as like 1 quarter change within the proportion of what we’re looking at, it’s not mature enough. And I think overall, you can say about the same dynamic slightly worse in Europe and Americas, but same dynamic across the two continents and slightly worse in security closer to the device than identity and privacy. And I think when we guided back in November, we had said, hey, we don’t see a change in that trend.

And I think for the next few quarters as we close the fiscal year, we see similar trends and that’s why we’re right now really focusing on integration, product integration, increasing ARPU and retention as we continue to optimize between the different brands and business models we have.

Hamza Fodderwala: Got it. And just maybe a quick one for Natalie. The dollar has gotten quite a bit weaker year-to-date. Just curious how you’re thinking about FX headwinds in relation to the fiscal Q4 guidance and perhaps any commentary you get beyond that?

Natalie Derse: Hi, Hamza. Yes, from a guidance perspective, we just assume no change to currency rates. We don’t guide based on projected impacts of currency fluctuations in the market.

Vincent Pilette: And also change Hamza only a few percentage points. So it’s sorry, I just wanted to add Hamza that between dollar versus euro at 106 versus 109. Yes, it may change in big views, but it’s not materially different for us to change how operationally we drive. And inside the company, we drive all of our teams in constant currency and each sales team and direct-to-consumer teams are managing their business on the bookings in constant currency. So

Hamza Fodderwala: Okay. Got it. Thank you.

Operator: Thank you for your questions. There are currently no questions registered. At this time, there are no more questions remaining. This will conclude today’s Gen Q3 Earnings Call. Thank you for joining, and have a great rest of your day.

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