MoneyLion's Q2 2026: Contradictions Emerge in Growth Strategy, Cross-Sell Integration, and Capital Allocation Plans

Date of Call: November 6, 2025

Financials Results

• Revenue: $1.2B+ in Q2, up 25% YOY (bookings +27% YOY); pro forma revenue +10% YOY; excluding MoneyLion +5% YOY
• EPS: $0.62 non-GAAP diluted EPS, up 15% YOY (FY26 guidance $2.51–$2.56 non-GAAP EPS)
• Operating Margin: 51% consolidated non-GAAP operating margin; Cyber Safety 61%; Trust‑Based Solutions 30%; management noted operating margin remains above 50%

Guidance:

• FY26 revenue now expected $4.92B–$4.97B (prior $4.8B–$4.9B), implying ~25%–26% reported YOY growth
• FY26 non‑GAAP EPS guidance $2.51–$2.56
• Q3 revenue expected $1.22B–$1.24B; Q3 non‑GAAP EPS $0.62–$0.64 (12%–15% YOY)
• Guidance assumes high single‑digit pro‑forma growth, current Q2 FX rates and a 22% non‑GAAP tax rate

Business Commentary:

• Record Revenue and Earnings Growth:
• Gen Digital reported revenue of over $1.2 billion for Q2, up 25% year-over-year, marking the fifth consecutive quarter of record revenue.

• This growth was driven by strong performance across cyber safety and trust-based solutions, with contributions from MoneyLion and Norton 360.

• Cyber Safety and AI Initiatives:

• Cyber safety segment saw 5% year-over-year bookings growth, with a 61% operating margin.
• 

• The integration of AI-driven features, such as Norton Genie Pro for scam protection and cyber safety assistant, enhanced user engagement and revenue, contributing to this growth.

• Trust-Based Solutions and Financial Wellness Expansion:

• The Trust-Based Solutions segment achieved 27% revenue growth on a pro forma basis, with the Engine financial marketplace growing 50% consecutively.

• The growth is attributed to the strong performance of LifeLock and MoneyLion, driven by increased customer engagement and adoption of financial wellness features.

• Cross-Sell and Revenue Synergy:

• Gen's integration of MoneyLion is showing progress with early cross-sell features, such as embedding Norton Money in Norton installations and EWA features in employee benefits.
• These initiatives are expected to drive long-term revenue synergies, leveraging AI capabilities for personalized and contextual customer experiences.<
  

  Sentiment Analysis:

  Overall Tone: Positive

  • Management called this an "outstanding quarter," cited "record revenue and earnings," and said they are "raising our annual guidance." CFO highlighted 51% operating margin and EPS $0.62, "up 15% year‑over‑year."
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Q&A:

• Question from Robert Coolbrith (Evercore ISI): Can you give your view of the macro environment and consumer health, and how a significant downturn would affect the two segments?
  Response: Cyber‑safety subscriptions are resilient historically and show little correlation to downturns; secure financial‑wellness (MoneyLion) consumption remains strong with no current behavior change, and marketplace demand from financial partners is robust.

• Question from Robert Coolbrith (Evercore ISI): As you pursue cross‑sell, can you describe member interaction mechanics with LifeLock and opportunities to monetize during financial shopping moments?
  Response: Immediate revenue synergies are Norton Money (including EWA in employee benefits) and an embedded curated marketplace in LifeLock (credit‑card catalogues); early results are positive though on a small base.

• Question from Roger Boyd (UBS): How should we think about partner revenue trajectory in the back half and any seasonality concerns, especially for MoneyLion Engine and employee benefits into open enrollment?
  Response: Long term partner revenue should outgrow direct (targeting a ~80/20 mix vs prior ~90/10); no specific predictable seasonality is assumed, but partner growth trend should persist.

• Question from Roger Boyd (UBS): Any color on free cash flow trajectory and capital allocation between debt paydown and buybacks?
  Response: Free cash flow remains strong; capital allocation will be balanced between accelerated debt paydown and opportunistic share repurchases as timing allows.

• Question from Dan Bergstrom (RBC): What are the keys to upselling customers into higher‑tier Norton 360 memberships?
  Response: Upsells driven by increased engagement from Norton Genie (AI assistant/anti‑scam), Genie Pro features (insurance, voice/text block) and new Norton Money financial features providing incentive to move to higher tiers.

• Question from Dan Bergstrom (RBC): What drove the ~400k direct cyber safety customer adds this quarter?
  Response: Adds reflect higher engagement, expanded acquisition channels and improved retention—consistent with the upper end of the multi‑quarter historical range (250–400k).

• Question from Saket Kalia (Barclays): How do you envision new subscription business models within the MoneyLion base versus its current transaction model?
  Response: Keep the existing transaction model that works for many customers while selectively introducing subscription offerings for premium users to increase lifetime value; transition will be gradual and carefully managed.

• Question from Saket Kalia (Barclays): How should we think about MoneyLion's margin journey and the 30/60/90 dynamic?
  Response: MoneyLion is roughly 20% operating margin post cost synergies; margins should improve via revenue synergies and mix shifts across marketplace (~30%) and first‑party (~60%) offerings while supporting growth investments.

• Question from Tomer Zilberman (BofA): Why shouldn't elevated MoneyLion growth (45%–50%) be assumed sustainable and what exit rate should we model?
  Response: Recent elevated growth reflects integration and short‑term uplift; management prudently models MoneyLion at ~30% growth with ~20% margin going forward (a conservative 'Rule of 50').

• Question from Tomer Zilberman (BofA): Cyber Safety bookings grew 5% vs revenue ~3%—what caused the delta and will 400k adds convert to revenue growth?
  Response: Small timing and rounding effects (revenue lags bookings via trailing‑12); management points to multiple growth levers (product, AI, cross‑sell, partner mix) and reiterates pro‑forma high single‑digit full‑year growth.

• Question from Meta Marshall (Morgan Stanley): Beyond support automation, where else is AI being applied and showing traction?
  Response: AI powers product features (Norton Genie, Spark, Norton Neo), support automation (handling ~55% text and ~40% voice contacts, ~20% cost efficiency), and is increasingly used in marketing and R&D to boost productivity and product velocity.

• Question from Meta Marshall (Morgan Stanley): Any expected impact from recent tax legislation on tax rate?
  Response: Non‑GAAP tax rate used in guidance remains 22%; recent legislation improves short‑term cash taxes but yields no material long‑term rate change.

• Question from Joseph Gallo (Jefferies): Which cross‑sell initiatives between MoneyLion and Gen are gaining traction and what GTM remains to accelerate adoption?
  Response: Early traction from embedding MoneyLion financial insights into LifeLock and planned Norton Money and employee‑benefit rollouts; GTM will be measured to preserve customer experience and scale via employee benefits over time.

• Question from Joseph Gallo (Jefferies): Any regional differences to note—Americas versus other geos?
  Response: Europe has recently shown unexpectedly strong, broad‑based growth; financial‑wellness features have not yet been widely rolled out in Europe, indicating additional upside.

Contradiction Point 1

MoneyLion's Growth Strategy and Margin Expectations

It involves differing expectations for MoneyLion's growth trajectory and its impact on margins, which are crucial for understanding the company's financial health and strategic direction.

Can you explain MoneyLion's growth and why elevated levels may not be sustainable in the second half? - Tomer Zilberman (BofA Securities)

2026Q2: MoneyLion's growth is elevated due to integration and leveraging Gen's customer base. The company plans to manage growth at a 30% rate with a 20% margin, transitioning towards more subscription-based models. - Vincent Pilette(CEO)

What operational improvements is MoneyLion implementing, and how are they impacting the business? - Robert James Coolbrith (Evercore)

2026Q1: The business is expected to manage at over 20% operating margin, providing room for continued innovation. The integration into Gen's installed base will drive margin expansion, with plans to launch integrated products in the fall. - Vincent Pilette(CEO)

Contradiction Point 2

Cross-Sell Opportunities and Integration Strategy

It highlights different perspectives on the integration strategy and cross-sell opportunities between LifeLock and MoneyLion, which are key to driving revenue synergies and customer engagement.

Can you explain the cross-sell mechanics between LifeLock and secure financial wellness, including identity verification during the shopping process and any unique opportunities? - Robert Coolbrith (Evercore ISI)

2026Q2: Norton Money will be embedded into employee benefits, expanding the marketplace reach and enhancing Norton 360, which will increase engagement with Norton's LifeLock customer base. - Vincent Pilette(CEO)

Can you discuss MoneyLion's strong growth, even after accounting for conservatism, and any business outperformance trends? - Roger Foley Boyd (UBS)

2026Q1: In the fall, we'll have integrated LifeLock, Norton, and MoneyLion products, which will be able to be offered to consumers at the workplace. - Vincent Pilette(CEO)

Contradiction Point 3

Partner Revenue Growth Strategy

It involves the strategic direction and expected trajectory of partner revenue growth, which impacts future business and financial projections.

Can you discuss the strong partner revenue, particularly from MoneyLion Engine and employee benefits? How should we expect partner revenue to trend for the remainder of the year? - Roger Boyd(UBS Investment Bank)

2026Q2: The partner revenue growth strategy targets a structural shift to 80-20 (direct-to-consumer to partner revenue) over time, driven by embedding services in partner views and expanding the marketplace. This trend is expected to continue, with partner revenue growing faster than direct revenue as the business expands. - Vincent Pilette(CEO)

How is foreign exchange affecting full-year revenue guidance? - Saket Kalia(Barclays)

2025Q3: The partner revenue growth strategy targets a structural shift to 80-20 (direct-to-consumer to partner revenue) over time, driven by embedding services in partner views and expanding the marketplace. - Vincent Pilette(CEO)

Contradiction Point 4

Macroeconomic Resilience and Impact on Financial Wellness

It involves conflicting statements regarding the resilience of the company's financial wellness segment in the face of macroeconomic uncertainty, which is crucial for understanding the segment's performance and potential future impacts.

Could you assess the current macro environment and consumer health? In the event of a significant downturn, how would it impact the two business segments? - Robert Coolbrith (Evercore ISI)

2026Q2: The financial wellness demand will remain strong despite economic conditions. - Vincent Pilette(CEO)

How do you navigate macroeconomic uncertainty with the tariff pause ending, and how is demand trending? - Tomer Zilberman (Bank of America)

2025Q4: MoneyLion may have increased volatility but offers solutions that are relevant in tight financial environments, allowing us to leverage its capabilities effectively. - Vincent Pilette(CEO)

Contradiction Point 5

Free Cash Flow and Capital Allocation

It involves the company's approach to managing free cash flow and capital allocation, which affects financial management and shareholder value.

Regarding free cash flow after adjusting for tax payments, how do you plan to allocate capital between debt repayment and share repurchases? - Roger Boyd(UBS Investment Bank)

2026Q2: Free cash flow remains strong, seasonally high due to tax payments. The company plans balanced capital allocation across accelerated debt paydown and share repurchase. - Natalie Derse(CFO)

How will capital be allocated between debt paydown and buybacks post-MoneyLion acquisition? - Hamza Fodderwala(Morgan Stanley)

2025Q3: The company will resume disciplined capital allocation, balancing debt paydown and share buybacks. They plan to refinance debt and continue delivering value through this balanced approach. - Natalie Derse(CFO)