AI Takeaway
GEN delivered strong Q3 FY2026 revenue growth of 25.8% YoY to $1.24B, though margin compression and a high debt load remain key concerns for investors.
Revenue
$1.24B
++25.76% YoY
EPS (Basic)
$0.31
++19.23% YoY
Gross Margin
78.4%
-2.04% YoY
Operating Income
$433M
++15.78% YoY
Filed · Analysis updated · Source: SEC EDGAR 10-Q filing
Revenue surged 25.8% YoY to $1.24B in Q3 FY2026 from $986M in the prior-year period, reflecting robust demand for GEN's products and services. This growth outpaced cost increases in several areas, demonstrating solid commercial momentum.
Source: Source: 10-Q Income Statement (XBRL Financial Data)
Gross margin declined approximately 2 percentage points YoY to 78.4% from 80.4%, as cost of revenue grew 38.9% YoY — significantly faster than revenue growth of 25.8%. This suggests rising input or delivery costs that are pressuring profitability at the gross level.
Source: Source: 10-Q Income Statement (XBRL Financial Data)
Operating margin fell from 37.9% to 34.9% YoY, a decline of approximately 3 percentage points, even as operating income grew 15.8% to $433M. The margin compression reflects operating expenses growing faster than revenue, including a 14.3% increase in R&D spending to $96M.
Source: Source: 10-Q Income Statement (XBRL Financial Data)
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Upgrade to unlockGEN carries $8.41B in long-term debt against stockholders' equity of $2.33B, resulting in a debt-to-equity ratio of approximately 5.79x. This elevated leverage increases financial risk, particularly in a rising interest rate environment, and limits financial flexibility for future investments or acquisitions.
Source: Source: 10-Q Balance Sheet (XBRL Financial Data)
Unlock 4 more detailed risk analysis
Upgrade to unlockReported EPS of $0.64 versus the $0.64 analyst consensus — a +0.3% beat for Q3 FY2026.
| Metric | Current | Previous | YoY Change |
|---|---|---|---|
Revenue | $1.24B | $986M | +25.76% |
Cost of Revenue | $268M | $193M | +38.86% |
Gross Profit | $972M | $793M | +22.57% |
Operating Income | $433M | $374M | +15.78% |
Net Income | $192M | $159M | +20.75% |
EPS (Basic) | $0.31 | $0.26 | +19.23% |
EPS (Diluted) | $0.31 | $0.26 | +19.23% |
R&D Expense | $96M | $84M | +14.29% |
| Metric | Current | Previous | YoY Change |
|---|---|---|---|
Total Assets | $15.83B | $15.36B | +3.05% |
Current Assets | $1.25B | $1.32B | -5.08% |
Total Liabilities | $13.5B | $13.21B | +2.17% |
Current Liabilities | $2.69B | $3.76B | -28.59% |
Stockholders' Equity | $2.33B | $2.15B | +8.41% |
Long-Term Debt | $8.41B | $8.48B | -0.81% |
| Metric | Current | Previous | YoY Change |
|---|---|---|---|
Operating Cash FlowYTD | $1.07B | $748M | +42.51% |
Investing Cash FlowYTD | $-822M | $-17M | -4735.29% |
Financing Cash FlowYTD | $-634M | $-674M | +5.93% |
Dividends PaidYTD | $236M | $236M | 0.00% |
Share BuybacksYTD | $434M | $272M | +59.56% |
D&AYTD | $374M | $315M | +18.73% |
| Metric | Current | Previous | YoY Change |
|---|---|---|---|
Gross Margin | 78.4% | 80.4% | -2.04% |
Operating Margin | 34.9% | 37.9% | -3.01% |
Net Margin | 15.5% | — | — |
ROE | 8.2% | — | — |
ROA | 1.2% | — | — |
Current Ratio | $0.466 | — | — |
Debt to Equity | $5.789 | — | — |
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GEN's revenue grew 25.8% year-over-year to $1.24B in Q3 FY2026, up from $986M in the same quarter last year. This strong top-line growth reflects robust demand for GEN's products and services across its business segments.
GEN delivered impressive revenue growth of 25.8% to $1.24B and net income growth of 20.8% to $192M in Q3 FY2026, but margins compressed with gross margin falling to 78.4% from 80.4% and operating margin declining to 34.9% from 37.9%. Year-to-date operating cash flow surged 42.5% to $1.07B, while share buybacks accelerated 59.6% to $434M YTD, signaling management's confidence in the business.
Based on the financial data, GEN's key risks include its high leverage with a debt-to-equity ratio of 5.79x and $8.41B in long-term debt, a low current ratio of 0.47x that raises near-term liquidity questions, and gross margin compression as cost of revenue grew 38.9% YoY — far outpacing revenue growth of 25.8%. Additionally, investing cash outflows surged to -$822M YTD from just -$17M, raising questions about the nature and return on these investments.
Yes, GEN is profitable with net income of $192M in Q3 FY2026, up 20.8% from $159M a year ago, and EPS of $0.31 (basic and diluted). However, net margin of 15.5% and ROA of just 1.2% suggest that heavy debt servicing costs and a large asset base are limiting overall profitability.
GEN's financial health is mixed: it generates strong operating cash flow ($1.07B YTD, up 42.5%) and has growing revenue and earnings, but carries significant debt ($8.41B long-term debt, 5.79x debt-to-equity) and a concerning current ratio of 0.47x, meaning current liabilities exceed current assets by more than 2x. Investors should monitor margin trends and the company's ability to manage its leverage over time.