Gen Digital (GEN) 8 Nov 222023 Q2 Earnings call transcript

Good afternoon, everyone. Thank you for standing by. My name is Matt and I will be your conference operator today. I would like to welcome everyone to Gen's Second Quarter Fiscal Year 2023 Earnings Call. Today's call is being recorded. Instructions] [Operator

for to would of Ms. Miss, may time, the to Investor remarks, you over call Mary begin. opening this like I pass Relations. At Lai, Head

first afternoon, Welcome good and Matt you, to Thank Gen's earnings call. everyone.

me year results fiscal Natalie CFO. are second and XXXX CEO; to our Pilette, Joining today Derse, quarter review Vincent

press on website, along with a will a be IR As replay of slides the and release. reminder, there this call posted our

our financial measures call, stated. I'd website to the operations, that current which regarding statements expectations. from like IR to at the all statements and the business, involve that Those rates date. financial included including growth release this industry assumptions and of remind A is available our considered statements in statements may non-GAAP otherwise of speak our non-GAAP that to references differ on are are investors.gendigital.com. results are everyone during uncertainties expectations of only GAAP unless Today's based all impact the cause and measures as business on forward-looking contains and actual is press materially risks such and current to be year-over-year reconciliation beliefs, may current call performance our and

our refer particular, statement most factors release and recent in For on to the the more in in reports information, XX-K risk SEC the our please cautionary our XX-Q. and and press filings Form with

CEO, over call our the Vincent? turn will to I now And

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drive design We On organizational merged have this and we announced leadership our systems our road teams new chapter to integration maps. next the technology detailed have back-end and help X, November of company. and

annual we As be the a XX $XXX completed result, within fully believe our and million over we months. have increased savings will to next we

leads we paid ARPU our engagement powerful know focused customers which value direct We set higher more in both the million a XX on growth includes and that the nearly to our our combined With of growth to partners. current in brands, and deliver brands. opportunity are go-to-market, Cyber for to across leveraging trusted customers retention Safety

we our ability to sustain initiatives us of in rate are of opportunities that the have the today, giving growth in revenue As million identified in years, next $XXX about midterm. additional synergy X mid-single-digit confidence a

in the opportunity the of we very collectively for team, integration motivated an never While are easy front us. is by

XX% in we challenging includes X of QX in you points environment, post our me let to contribution our more constant of summary detailed a a by with will delivered execution acquisition. Avast. Now and bookings up and QX our Supported time I will our spend results quarter results. through XX% walking Natalie the strong and revenue percentage provide then currency consecutive XXth growth, high-level from move reporting up structure which

Avast, growth in currency excluding of our Safety X% Excluding bookings XX% impact line grew constant revenue or currency, expectation. with Earnings headwinds. the mid-single-digit Cyber our X% in grew

and enable our the and to from really strength. the a position leadership, environment tackle the product in adoption customer loyalty economic market current strong business in delivered of we increase continued us value innovation our Our to membership

not of Safety technology product of that is us one a the Avast Combining and needs. a company. And most offering thing with featuring product faster full coverage Cyber of the At change are gives continued our product we for will innovation our out pursuit build core, a comprehensive and our portfolio. pace portfolio

and protection, personal platform identity are security performance, to privacy We first a data management. reputation security, and offer fully-integrated the and cloud covering device

Before the of using a XX% had platform acquisition, taken Norton approach membership our customers over or XXX.

giving our offer the of another of approximately having us we Avast, benefits customers platform, to platform. a customers adopting XX% a million XX feature-rich opportunity with have the Now

are pace we new on fast we progress remain our focused or platform product front releases, functionalities of products, the the front, the making they integration new technology and on product While whether upgrades. are

our our browsers PMA continue We the with assistance, additional inroads for make solution monitoring we to capabilities or into privacy strong to retail AntiTrack expanded countries QX, solutions. its privacy launched and and channel time. first In

and countries, our our launched international In and the Advisor to including Plus France. continued Germany pillar, ID offering expansion identity more we European

to also enhancements experience, including several guided launched the U.S. new LifeLock credit child have fees. We

of We Avast e-mail launched new filtering also with malicious present of a feature gradient with endpoints no used. capable Avast, e-mails independent

online online new regular digital score feedback of safety. The tips to the charge on and safety user's take habits help their provides personalized them

very know-how consumers. Finally, scored even lot makes Avast mindset brings independent the of performance an and the around engine we the Avast marks pleased also human-centric top of team leading in are combination richer security for our by Cyber which a innovation technology which tests. Overall, Safety

returns model direct-to-consumer the quarter, set continue house business our we're through in main Gen in customers strategically business. will channel spend, is X% channels ability that showed on ARPU a believe Direct-to-consumer of grow premium. for that the us is our environment to business that in spans our We sales to bookings with now a Despite deliver global is of highest and e-commerce freemium the customer we deployed spend versus important. from able macroeconomic focusing most to to reach remains traffic current way higher and our counts. this today. our brands deploy diversified marketing investment. We on and this right to to the adapt equally marketing efficient pressure Expanding

On delivering another the geographically, continue to we side, growth quarter. double-digit partner expand

taking of Our and Cyber value privacy is protection security, including proposition identity root. complete Safety,

our launched we're had expanding telco an the excited large identity U.K. have effort replicating for we and a British As Canada. the our provider example, success for in identity offering to protection of market have

one new free XX small customers paid paid over global have up of customer million of we XX that users. business. paid is expanded to of As made XXX is Gen, but protect customers. have every roughly billion a XX X universe million about the towards have our that including Internet users, Safety, total we and and and towing mission our a customers One layer million partner million direct down, empower classification over step Cyber our paid we from customers Today,

quarter-over-quarter Avast side, And while the satisfaction to for the -- the acquisition focus retention work and our side millions and out XXX,XXX of our and our direct their by customers count the the NortonLifeLock on rate. value short-term increasing on of opportunity roughly declined and coming is increasing customers consequently XX,XXX on on

new memberships, of in support Safety with is cross-selling it the products, multiple our in Cyber metric, such is to we services While the diversified platform approach more levers paid to booking supported best-in-class and organization. in drive important and Avast on customer rates, retention direct opportunity side, highlight count important growing as growth especially growing to that offering growing in ARPU by a have an ways also

offering. have we mainly Post-acquisition, defined benefit that X/X about from of a broadly our security customers

a ARPU opportunity a identity aggregated Cyber need before, a as -- approach, cross-selling we over comprehensive richer our and to acquisition, have ARPU per we the including have now have result demonstrate privacy monthly And portfolio the we from time. solutions the is we of believe $X done and As for customer. increase Safety

cornerstone As I continues to mentioned, be our our strategy. of platform strength a

XX Norton believe a the bring membership time and X did or XX% to This over over we over have XX% Avira ratio One as Avast approximately at have million the over years. with members XXX, NortonLifeLock it direct We opportunity represent for to our customers last of that we plan Prime.

higher and now portfolio. customers utilization, subscribed from a have observed and benefits that retention We better have satisfaction membership for to our higher our broad

service is in approach Gen. important is innovation Safety. Cyber satisfaction the It consumer by supported very our and at largest to metric Customer organization a consumer-centric

an offer by the renewed our our XX% an a to base million rich This a retention our organization customer As this aggregate rate our years. retention XX of increase direct over as and whether global XX% to a cross-pollinate customers supporting to membership plus. opportunity Direct rate and X service customer through XX%. customers, portfolio We rate know-how next or see NortonLifeLock Avast partners. mobile our all result, of including operational is a at their When our retention is opportunity now

In addition I rates have clean we initiatives. into and growing what have and the priorities ARPU million just integration to $XXX that growing retention sight and next of line to X years. revenue lead Taking for synergies our our identified growth operational should we over consideration of mentioned, work, potential

count. customer and focused the we spend And our initiatives businesses. diversification channel bookings small for growth platform over such new have direct marketing will Avast on partnerships of the segments We prioritize as effectiveness on

These with combined revenue cost long-term tremendous room to and value should million of for over deliver create opportunities, invest $XXX the synergies opportunity.

coupled but So on as put current look does pressure recessionary of the business see for also business our us. short-term that discipline recurring I and high potentially will catalyst environment. to some navigate flexible this part an remain future, a and as our confident revenue the with we opportunity challenging to we our the operational a with economy and am our model, durable downward

know the end, Cyber Safety we the for leader. and we trend that At growth Freedom and a comprehensive is need Digital are secular the

cover And details. now let Natalie? our the to Natalie call to reporting new results turn and me over

Vincent a exciting time you, It's Thank for hello, our very company. and everyone.

Gen. and as thrilled businesses move the bring NortonLifeLock Avast are to together We forward and

our motivated highly to bring to vast is team get opportunities started and Our market.

that you discussion, results non-GAAP details XXXX. otherwise growth quarter model. also results, Avast a on QX rates, wrap today's was on acquired partial unless QX of stated. our walk include will with our and I and our up will long-term on for September financials outlook XX, reminder year-over-year focus For which reported A I through

evaluate performance results, would on business share dive Gen. centered is as we we to Before Gen into like I Cyber how Safety. the measure and

go-to-market portfolio and is and split omnichannel product by direct lines protection partners. Our consumer security, split business information identity by and our are

about sold directly XX% or of e-commerce makes our subscriptions our stores. sites with app up third-party through business Direct

and aligned this category. in including definitions app We and industry revenue NortonLifeLock harmonized standards now our customers store have to further channel direct mobile

diversify Although OEMs, benefits, approximately partners businesses. further of service consumer, our we including for provide distribution this retailers, area small to our only entry us models remains channel an multiple combined account for XX% investment telcos, providers the business, points employee and for as

and out also focus carved combined and portfolio the legacy we In go-forward With category products the base less or makes have Avast, with overall quarters. identified through phase accident total, integration the over few a to it markets. Cyber this end-of-life includes than we on X% Safety our the revenue expect out of up which next

our Cyber will growth. Going on discussions forward, be focused Safety

point details you our structure, I'd presentation. reporting to on like earnings Slide to For in our XX more

QX on XXth our currency healthy expectations. on of QX reflect growth, growth. is bookings customer our consistent Now a with and in grew long-term results our by focus constant economics. to and QX sustainable results. driving unit execution supported base and was quarter robust line and QX bookings consecutive our XX% in strong

X% Excluding our Norton in value key with the as currency continue and in Avast, base bookings through U.S. the international constant partners Cyber drove cross-sells in and telcos Safety grew identity-driven partner to scale, including partnerships increased customer employee benefit channels we

includes X our increased contributed revenue a quarters, reported headwinds over of in points of XX% growth non-GAAP $XX growth USD. in was an exchange $XXX impact top up year-over-year. of foreign to or points in line up constant partial Avast prior constant unfavorable million $XX of as X includes QX and X% of which result currency. Similar This million, currency a quarter million

continue We and currency dollar to constant Cyber line revenue, recent mid-single expectations headwind grow euro and, again, impacts, a the weeks. macroeconomic expect Safety focused our depreciating against both this reflection consistent the Avast, in with in our and digits in currency, volatile execution. continues yen further to of with excluding Despite U.S.

constant Direct XX% QX as other as end went XX million our of NortonLifeLock USD including million count in customer X% through customers from by operating existing base. $XX.X Gen, the other Cyber million with of currency at million Safety at our Direct cross-sell revenue monetization grew Stepping approximately customer and initiatives end from metrics. QX key and in supported Avast. $XX.X the to reported of $XXX

and go-to-market online together efforts from have impacting But combined saw Avast. now Both implied an we from NortonLifeLock opportunity headwinds with to Quarterly acquisition. lower larger from performance traffic site, a e-commerce new decline website companies $XXX,XXX USD brands across our our $XX,XXX and to of of with combined quarter-over-quarter drive and global even customer $XXX,XXX and vast Avast, continued our traffic user, optimize was up revenue marketing $X.XX average which a further reflects X.XX of and per direct ARPU ARPU approximately mobile NortonLifeLock to a conversion. QX of investment approximately with and $X.XX. blended ARPU ARPU, SEO Avast monthly or leverage

Specifically ARPU expanded for for FX. year-over-year NortonLifeLock over adjusted $X.XX results,

are to drive the upsell and last existing year, We in customers increasing Avast customer of are our excited proud the the to made similar with value base. provided through progress we've the cross-sell our improvements efforts and

customer remains exiting Our loyal at with stable base NortonLifeLock XX% retention QX.

moves the discuss on between As we believe merge XX% with revenue Avast, our We synergy overall with customer customer blended. presents to as retention differential base. growth we will to drive this existing NortonLifeLock Avast our retention from large I expand synergies opportunity XX-point rate and shortly. XX% a more

please the details XX refer in further metrics, our For on to performance earnings Slide deck.

of partners. and extend expansion to consecutive partners to to impacted as quarter revenue this our XX% double-digit product in currency and we on $XX eighth headwind. was This up USD, in Moving leverage is reach Partner XX% and channel million, by consumers broaden revenue points our in efforts. geo FX of X our constant growth

will partnerships to and in We forward. benefits continue distribution Partners lives of specifically Cyber businesses offerings, is digitally employees' entrepreneurs our to omnichannel were of their investments knowing drive in where can will peace telco that our mind through invest Safety expanded remain this protected. they are and strategy, the essential portfolio protection cornerstone scale identity key with and businesses small going of employee retail a

results to year-over-year operating was up from QX with profitability. X% million, Avast. income partial Turning $XXX

run our marketing structure We cost in which G&A sales and to year-over-year. with flat remain at leverage and the in revenue lean R&D. roughly We to disciplined margins provides continue invest of X% operating

on the last $XXX currency Avast $XX intentional was to or the million, X% highest we how our non-GAAP efforts. the any serve. across from customers And EPS represents order currency, restructuring constant quarter, be channels note in and as Looking including rate we expanded markets, on and Diluted this and up portfolio balance debt. ahead will Gen, cost strike before partial to income was right channels drive net investments of across we the X% returns dilution compared of tax will million in and QX year. which the XX% our for that up higher reflects year-over-year was headwind. $X.XX blended tax our $X.XX issuance XX% a share rate Please spend estimate of

concentration consistent cash flow Turning operating $X payments. to use million a the year our of was flow flow and Seasonally, of was lowest due QX CapEx operating and cash cash QX quarter the to balance in sheet. million the is of of quarter. cash the at tax $XX

quarter This financing transactions. Avast to tied approximately deal the $XXX and of cash payments closing the also of million includes related

Looking high in ahead, confidence cash grow we continue with have profitability. which will to generation our flow

shareholders over year of million a dividends. XX towards returned approximately buyback of first remaining and current have shares and repurchases the half have both we total back Year-to-date, in over of form in $XXX to share $XXX our the billion $X.X buybacks fiscal program. million or this We million in deployed

repurchased million we shares. million or QX, X $XXX In

We also common our of to in per form dividend million share. $X.XXX $XX paid the shareholders quarterly of

business per Directors For record QX, of a as be for XX, on of of the XXXX, cash to quarterly of the dividend paid all Board common XXXX. shareholders $X.XXX December on share regular November close approved XX, of

related during a place Moving Avast of the the structure. lot for activity and term. well due in structure to long We the that quarter. believe capital to up acquisition now our maturities a have sets us in capital we We QX came had that

positioned April until gross of leverage liquidity with maturities under no Our $X.X maturities XXXX. staggered X.Xx year We through and just have leverage been is fiscal Xx. extended our in well net due billion remain debt with near-term with and XXXX

for the deck details capital XX refer on go-forward earnings can structure. in to You our more Slide

Looking and a an Gen backed predictable liquidity revenue, basis a by ratable significant has on generates as is free combined strong ahead, flow highly business and annual cash position.

capital we share will we ever-changing environment. in We about where assess and We approach and a profile debt good will balanced allocation and between overall disciplined this leverage continue evaluate buybacks. opportunistic feel targeted needs at and drive are and our deleveraging to

months Avast This have months. this. after going that Now We're date we to and to planning undertaking our synergies. aggressively pre-integration our and expected to line from pleased time on taken integration actions we've an report big the XX integration XX accelerated update are successfully is a and

are underway of November X annual week day well a today with efforts I'm kicked increasing integration are X Our to to officially ago over $XXX million. with estimate cost gross that on share integration pleased off you and synergy we our

of million our of rate completion exit fiscal exit annual $XXX year the XX% and fiscal XX% we next phasing, XXXX. terms In fiscal intend achieved the half to with first achieved. year XXXX of XXX% with year exiting run

post-synergy This framework flexibility the revenue even of with of margins XX% gross reduced XX% creates more growth to XX% to XX% today expect drive above and approximately and we translates of structure any approximately an We over to drive operating that margin to leverage portfolio from diversification. OpEx XX%. and

the million user of drive levers line top Avast, combined complementary existing $XXX our base. With the across strengths to provide increased addition growth

our include retention Achieving the name $XXX optimization improvement, next synergies million mid-single-digit portfolio rate. increased brands, We help synergies in marketing and a strengthen across identified just few. an spend have over to product these upsell, growth expanded approximately leveraging Avast years. cross-sell and will X revenue Opportunities

and growth expect traction our ARPU to bookings quarters the over to support synergies improvements revenue and with be through expectations. coming measured retention line top We directly

outlook. QX our to turning Now

reflects FX. bookings also $XXX million million we of which first Avast includes the non-GAAP Cyber Safety $XXX mid-single-digit of quarter reflects of full This QX, from from contribution growth. $XX headwinds range expect revenue approximately the For and in to million

first non-GAAP We accretive reflects of expect This expect note, be range $X.XX impact quarter in the to EPS to please first $X.XX the XX Avast dilutive months. Avast. QX in to But be share. per the from we

And that U.S. the the underlying and I to to strengthening the health continued the to volatile. emphasize persist quarter-to-date, currency rate on the want remain dollar Based our durable. our conditions our we post-Avast ability of given the of flow generation the business interest anticipate the towards and headwinds But long-term strong we through QX liquidity, confident objectives. near-term cash remains in first to high step strong and just are is navigate challenges.

to that objective Investor continue our remain QX, EPS Day. $X focused last during Beyond we we on long-term communicated our

have meaningful macroeconomic we the path now since with this. looked we a changes Avast, and at revised to Given that have then achieve merged

created of First, $X.XX we rising that to recognize headwind. debt has the headwinds a cost $X.XX and FX

reinvestment blocks ago we've at the cost during same efforts from months as will growth over and faster the largely as Horizon helps of well Avast the previously Day gross announcement. as and remain $XXX our million, more capacity in Beyond next for XX will profits, Avast with and The Investor deal time that, targets. combined create solidify laid building accretion past the a out Bet the diversification annual synergies that line fund

These growth expanding our are new product the reach our trust-based innovation and secular remains on We strengths expect product by the out Cyber levers complementary supported at our on business the strategy Safety. and introductions, to the focus grow at a through expansion above, laid mid-single long-term I core. customer of combined and The services. of company synergies as omnichannel and revenue experience distribution and centered importance digits, increased drivers

we ultimately the fiscal EPS shared XXXX capital incremental Finally, to from dilution of months issuance. debt exit deliver you with time the and opportunistic with we share the XX year line line all our paydown back. up of use with EPS ladders in buyback intend and $X This disciplined we Avast to as an share a approach annualized offsetting to

these excited relentlessly and for opportunities on remain control to are focused we what growth it. about can achieve We

Slide presentation. XX the in For whiteboard more to of details, refer the please bridge earnings

remain to summary, we EPS expansion. driving committed In

objectives. on We our on business our execution opportunities time long-term driving towards against accelerated integration line, focused are and

driving well very new engagement more for we existing customer focused with have and products new healthy with as and on and geos, customer business services. robust expanding customers a base as a value We model acquisition our through increasing remain channels new

we provide next in these and through increments work integration few quarters. as will updates We

and will As for your Operator? you the questions. today time to operator thank turn your the call back take always, now to I

with [Operator the of Instructions] Barclays. The Kalia line first question Saket is from

Okay, on It Congrats we was with see Avast to Avast. the improve if can churn great. particularly XX,XXX you through, then net go metric. lot business, organic Yes, but Gen net great there's versus to last Vincent, churn, start a right? quarter. churn just closing with maybe will, The the the

I think shipments. even of think trend given result something last Maybe in despite quarter, you prepared most that improvement were us worse PCs? for question versus for the quarter's the PC drove last you just trend that is, in from what do

Yes.

So we're not you I PCs. directly mean, as know, guys related to

a think still scary People you PC a is digital of growing of of that's exposed the obviously more bought we metric. business device. overall a on onetime where are That spend the time to as growing purchase is I subscription also post People metric. the indicator and online, consumer the a PC know. spend world during and and lot the in COVID a pressure risks are where still good period,

those into So But it the new possible trends product level impacting need our sure that to customers and we our it still our direct X installed ability their to and and now is making high growing foster best up showed continue rates. the from we ARPU value retention for investments. coming grow base, there. marketing quarters really continued deliver global are traffic faster, said our We for macro our

to of companies far through see the both direct of that would them million don't And focusing slightly quarters have XX think percentage flat you're best growing the we can together. Quarter I total out, XX in, bring negative, point. it's a I have although now customers, see. going million is We installed current think like would and are to plus there trend trend as our or conclude. customers. all for cross-pollination But -- we really something base a of be minus as continue like couple on bookings call I quarter to And the for probably we opportunities within practices

it. was on Got you. you of structure. lot maybe capital forward. that just debt the busy wondering for if sense. to said Obviously, the makes of a the amount for good just really you build delevering That I acquisition. plan a and here just remarks, I just Natalie, mean, prepared going a the quarter could finance talk about in

EPS is, think think just rate options said here rising you eats any to your control just Or Maybe how that to generally the delevering? that some environment question other $X.XX accretion. for expense? do for you we about I options into of $X.XX, the from maybe interest

question. Yes. Saket, thanks the for

So deal. I same -- the tenants post-Avast and allocation would start our are capital largely pre with

synergies that these both going free and really first component the revenue and generating on us of really that and think target free really of critical I a of execution very the opportunities, of flow flow. is light cash bring cost generate for $X.X That's the all cash internal our to annual get to to billion. to team, leadership on executing

aside. reminder, leverage ratio take our the opportunistic balance our buyback. get that, going so find we our our across dividend, going is -- that Beyond we're -- share stay to we've we're are to to key right committed And then what said to tenants a as and want put

and higher dramatic Of debt into rates the the environment, course, Avast the and we're financing on with about with And obviously the debt in X that. we're we shift leverage our expected. than point facing net

and It's deleveraging don't component our we not in of can I allocation look isolation. think capital the only at

share came don't about call the dilution in at that it, going X it ago. about talked cost I Xx what even, was a it the is deal. But at to know, thought Avast I with mean, when debt be looked you obviously, look to we months of you If X the the isolation, also take We've issuance.

when I balance a And We're look also of too. buybacks, So only we're our also and to or facing the share at X key. facing the it's is think about balance component not price incredibly that, into next, really you think into opportunistic lever share timing -- the that. there's what a

to And the it we is actually and find about right that easy especially we're clear the so we all balance dynamics it trying change but super means rapidly to strike factors, in different these as so eyed across by balance how are and find no market.

Yes, then Vincent, for great I'll absolutely. If I synergies a the maybe sneak in last cede floor. you. to one said. Well was see. $XXX can million and in revenue The

of little in touched if of was I deeper particular. a just that retention kind rates, of, frame any in I you revenue? on thoughts little in million and when could think $XXX you in time just $XXX of on of go the terms terms you blocks wondering bit just there building in million terms how But the one comfortable get with get it synergies, in you

absolutely. Yes,

so important X And benefit really note coming they hugely rates It's the this to offer to about of leveraging Avast on side. value have by that into on organization initiatives product our not It's customers, service supported dependent our more new both innovations. to identified. deal the strength retention are organizations we about will

You know focused plan move technology up. about pressure Avast comprehensive identity and on set complete, we've features has that important well. is Cross-selling XX% lot that here privacy to and initiatives rate, products. an a more the and retention they and one have a identified operational of of as

cross-selling we side, is bring one. think privacy expertise. the I our And the On second identity the protection

expertise about higher is one going leverage before view. from offer that Avast, the the The platform million it. to see launched platform just now our And from adopted customers benefit to that mentioned XX% think to customers to and the We opportunity Avast really approach. higher the I that upselling to One. I of has the coming usage. move Avast third XX acquisition, we're satisfaction, had

can know scope will the and budget go-to-market premium to operational very we developed. freemium rebalancing not our of of the the businesses. all benefit a have, various side then is initiative. in one have from marketing we have the small sixth And fifth model a And small them leveraging performance business of significant that We you efficiency set and we across very lines One be the did a and e-commerce expanding capabilities one being improvements. few channels is

over months. So Make those initiatives. them X put We are no the XX mistakes.

the deliver We we that driving priority our treating day integrate, synergies, our the know priority for value cost overall obviously, we'll us. immediately. for are We we'll customers as is know X

of line next question the from The with Matt Hedberg is RBC.

cost is on well that you like certainly opportunity maybe XX% synergy something from quickly of European Just about. or we sort Avast like how with the due seems retention I'm versus exposure for as that see wondering talked Avast? more The wondering deal. sort Vincent, NortonLifeLock? just structurally look of me from perspective, Avast the of you. Congrats an the much to like from synergy revenue let how could retention

timing break the to is me at timing, down very we talk think it about it bucket and let a linked level. I because high definitely can but Totally,

you future would If business this enabler to how understand and to manage growth. to We know create us foundation. is our a of warm the to call us there's change. all that models gave great freemium never premium and of confidence an up the new for it, merge structural you acquisition definitely I Avast it told you it and separate, will that bucket of Avira And a I differences you was of with

side, premium things. And or structural. half about, would to our model retention or business such X/X would say there's as structural of that other I would be a view European set On business say, I

But have of Now in that own go brought on. we've what bring And our help and whether points insider Avast the here And details. operational at Avira we, to linked product. timing, customer things XX are to that's too term, back are already some we to tackle execution. that focused I set the then we to service some longer. terms organizations, the we the short won't in into can is will feature but know much least we And of there improving of it's another operational they them that of take will retention, structural differences. know

the over said on of revenue the of, retention because cost longer years lot but we'll at and We X synergies. deployment. the bottom we'll always means. They a do synergies high to We'll accelerate accretion take support the That's timing level what the line. on be cautious testing obviously,

super looks kind And versus looks little $XXX super, great. NortonLifeLock of Natalie, your super That's was like about which revenue That's headwinds the low end your other reported transpired was it was it below to million what revenue? apples-to-apples is guidance? how In since of since guide, headwind to like incremental core your you of the QX helpful. a much I'm wondering due the range. words, last that that results currency then currency

it the points quarters been the we've headwind definitely with about Yes, pretty X last It's that growth. was into a of few significant facing volatility.

currency If our I growth basically the our continue. is the digits. trends core business can say, it marching hitting factor complement is at Matt, see we that to to are said level, I had and would difference, which mid-single one you broke down these the growing we pretty was Matt. that guidance And being of course, towards say answer. one I us. number well sec. macro The -- what would

of back. $X think know have figure And I on of incrementally, -- said or great. know perspective year-on-year million since a you don't can points but a you a back guidance? it million on know X was don't do call $XX I if last kind that's I that you certainly circle just Just like if headwind. Yes, headwind we

No, we have it.

facing $XX a So $X was headwind. it $X we're about into of to Worse. From million currency perspective, quarter-over-quarter about million. million

is The line Hynes Stanley. next Morgan question from of with the Fiona

Avast. Congrats I'm for closing covering And Hamza. on

Avast. up even bit walked So growth color a the that was reporting including structure on I contribution remarks. you in $X to channel. of the sequential the the the looks through quarter, on It all this of follow lighter little prepared updated I wanted a little partner the million from bit there appreciate like

of partner over ability contribution Where what that that channel go-forward So basis. And wanted in the performance a then revenue of updated commentary your of overall of the drove do view any to contribute growing on midterm? to the get mix kind you the see and on quarter?

first in channels would you continue key And SMB Avast an There's I now benefits I'll partner take employee the supplement. to business, Natalie mentioned, the or our that, from buckets to X can with Definitely, question. Natalie area. as telco adding X investment area. see to

the business in which also business. as know, will our partner past, had in you we into Now the customer the mobile direct move direct app

down out, outgrowing based little our all and influence it may that profile. business in in you'll that wouldn't call a think bit. investment and business, on that I direct the up So deceleration, quarter I see -- Quarter

business. I it's would perspective, that, a Yes, XX% just from supplement So partner our of right? about

So going out and continues into different very markets different strong consistent of to get to that the we customer value It really seen growth. invest. help. That's quarters, channels different of continue It's we're cohorts. the We've it. double-digit to rate more in expansion and important

our in of That's as revenue bad. XX% growth in rate -- well. It's a isn't our double-digit course, for helpful of channel Of diversification us.

this turn to At call no there CEO, the for closing more are remarks. time, back will questions. I Vincent Pilette,

you. Thank

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and talking forward support to for to you soon. look thank So your I you

call. conference Thank you. the concludes This