Story
Gen Digital CEO Addresses GoDaddy Rumors, Touts Disciplined M&A Strategy
Summary
CEO Vincent Pilette responded to market speculation about a potential GoDaddy acquisition by outlining the company's strict M&A criteria, while also highlighting an upgraded financial outlook that sent shares higher.
Gen Digital Inc. (NASDAQ:GEN) CEO Vincent Pilette addressed market rumors of a potential acquisition of GoDaddy, prompting a 5% rise in the company's shares in after-hours trading on Monday. In a public statement, Pilette outlined the cybersecurity firm's disciplined approach to mergers and acquisitions while also pointing to a strengthened financial forecast.
M&A Strategy Amid Speculation
In a LinkedIn post on September 28, Pilette stated he could not comment directly on acquisition rumors but detailed the company's rigorous evaluation process for potential deals. He said Gen Digital's strategy is guided by a disciplined framework that has fueled its growth.
According to the CEO, any potential acquisition must meet five key criteria:
- Strategic fit: Aligns with the company's mission to protect and empower consumers.
- Price: Represents a compelling value.
- Efficiency creation: Offers opportunities for operational synergies.
- Accretion: Is accretive to earnings.
- Value comparison: Delivers better value than share buybacks while maintaining a strong balance sheet.
Upgraded Financial Outlook
AdPilette also used the post to highlight the company's strong performance, noting that its current quarter, ending October 2, and its full-year outlook are both tracking toward the higher end of guidance. This follows a recent upgrade to its fiscal 2027 forecast.
Gen Digital raised its fiscal 2027 revenue growth guidance to 9%-11% and its non-GAAP earnings per share (EPS) growth outlook to the mid-to-high teens. This growth trajectory builds on a significant transformation over the last six years, during which the company grew from $2 billion in revenue and less than $1 in EPS to more than $5 billion in revenue and nearly $3 in EPS.
A History of Successful Acquisitions
The CEO pointed to past acquisitions as evidence of the company's successful M&A execution. The purchase of Avast added hundreds of millions of active users and enhanced monetization capabilities. More recently, the acquisition of MoneyLion expanded Gen Digital into financial wellness and is on track to deliver a return on invested capital of more than 30% in its second year, according to the company.
Read next
More on Stocks
MOEX Russia Index Falls 0.76% as Mining and Energy Stocks Decline
Russia's benchmark stock index closed lower on Monday, dragged down by losses in the mining, power, and oil & gas sectors. The Russian Volatility Index rose, indicating increased market uncertainty.
Meta Taps Tucker Bounds for Top Communications Role, Pivoting Predecessor to AI
Meta Platforms has promoted long-time executive Tucker Bounds to lead global communications, while moving former PR head David Ginsberg to a new role focused on applying artificial intelligence to product development.
Colombian Stocks Edge Lower as Financials and Utilities Weigh on COLCAP
Colombia's benchmark COLCAP index closed down 0.19% on Monday, pressured by declines in the financial, investment, and public services sectors despite gains in some individual stocks.
Mexican Stocks Close Nearly Flat as S&P/BMV IPC Dips 0.07%
Mexico's benchmark stock index, the S&P/BMV IPC, finished Monday's session with a marginal loss of 0.07%, as declines in industrial and consumer-focused stocks offset a market where more individual stocks advanced than fell.