Company Overview - Proactive is a financial news publisher that provides fast, accessible, informative, and actionable business and finance news content to a global investment audience [2] - The company has a team of experienced news journalists who produce independent content across various financial markets [2] Market Focus - Proactive specializes in medium and small-cap markets while also covering blue-chip companies, commodities, and broader investment stories [3] - The content delivered by the team includes insights into sectors such as biotech and pharma, mining and natural resources, battery metals, oil and gas, crypto, and emerging digital and EV technologies [3] Technology Adoption - Proactive is recognized for its forward-looking approach and enthusiastic adoption of technology to enhance workflows [4] - The company utilizes automation and software tools, including generative AI, while ensuring that all published content is edited and authored by humans [5]

Group 1 - Michael Wiggins De Oliveira is an inflection investor, focusing on buying undervalued companies at pivotal moments when their profitability is expected to improve significantly over the next year [1] - The investment strategy emphasizes technology and the Great Energy Transition, including uranium, with a concentrated portfolio of approximately 15 to 20 stocks and an average holding period of 18 months [1] - Michael has over 10 years of experience analyzing companies in tech and energy sectors, and has built a following of over 40,000 on Seeking Alpha [2] Group 2 - The Investing Group Deep Value Returns, led by Michael, offers insights through its concentrated portfolio of value stocks, timely updates on stock picks, and a weekly webinar for live advice [3] - The group provides "hand-holding" support for both new and experienced investors, fostering an active and kind community accessible via chat [3]

FYE26 First Quarter Conference Call The CX Automation Leader Delivering AI Business Outcomes NOW June 4, 2025 Disclaimers Forward-Looking Statements This presentation contains "forward-looking statements," including statements regarding expectations, predictions, views, opportunities, plans, strategies, beliefs, and statements of similar effect relating to Verint Systems Inc. These forward-looking statements are not guarantees of future performance and they are based on management's expectations that involv ...

Group 1 - Verint Systems reported revenue of $208.1 million for the quarter ended April 2025, a decrease of 6% year-over-year, with EPS at $0.29 compared to $0.59 in the same quarter last year [1] - The reported revenue exceeded the Zacks Consensus Estimate of $195.02 million by 6.71%, while the EPS fell short of the consensus estimate of $0.30 by 3.33% [1] - Over the past month, Verint's shares returned +2.9%, underperforming the Zacks S&P 500 composite's +5.2% change [3] Group 2 - Nonrecurring perpetual revenue (non-GAAP) was reported at $17.02 million, below the average estimate of $20.53 million from three analysts [4] - Total recurring revenue reached $173.62 million, exceeding the average estimate of $155.03 million from three analysts [4] - Nonrecurring professional services revenue (non-GAAP) was $17.45 million, lower than the average estimate of $21.12 million from three analysts [4] - Support revenue (non-GAAP) was reported at $21.13 million, compared to the average estimate of $23.37 million from three analysts [4]

Core Viewpoint - Verint Systems reported quarterly earnings of $0.29 per share, missing the Zacks Consensus Estimate of $0.30 per share, and down from $0.59 per share a year ago [1][2] Financial Performance - The earnings surprise for the quarter was -3.33%, and the company had a significant prior quarter surprise of -22.05% with actual earnings of $0.99 compared to an expected $1.27 [2] - Revenues for the quarter ended April 2025 were $208.1 million, exceeding the Zacks Consensus Estimate by 6.71%, but down from $221.28 million year-over-year [3] - Over the last four quarters, Verint has surpassed consensus revenue estimates twice [3] Stock Performance - Verint shares have declined approximately 35.1% since the beginning of the year, contrasting with a 1.5% gain in the S&P 500 [4] - The stock currently holds a Zacks Rank 3 (Hold), indicating expected performance in line with the market in the near future [7] Future Outlook - The current consensus EPS estimate for the upcoming quarter is $0.68 on revenues of $230.2 million, and for the current fiscal year, it is $2.92 on revenues of $958.59 million [8] - The estimate revisions trend for Verint is mixed, and changes in earnings expectations may occur following the recent earnings report [7] Industry Context - The Computer - Software industry, to which Verint belongs, is currently ranked in the top 22% of over 250 Zacks industries, suggesting a favorable outlook compared to lower-ranked industries [9]

Financial Data and Key Metrics Changes - The company reported a 6% year-over-year growth in Annual Recurring Revenue (ARR) for Q1, exceeding guidance for both revenue and diluted EPS [7][15] - Revenue for Q1 was $208 million, with non-GAAP diluted EPS at $0.29, driven by the timing of two large unbundled SaaS deals [15][20] - The company expects to exit the year with approximately $768 million in ARR, reflecting an 8% year-over-year growth [17][20] Business Line Data and Key Metrics Changes - AI ARR grew 24% year-over-year, reaching $354 million, now representing close to 50% of the company's subscription ARR [19][39] - The company continues to win large deals, including a $13 million TCV order from a leading insurance company and a $14 million TCV order from a healthcare company [9][10] Market Data and Key Metrics Changes - The rolling four-quarter SaaS pipeline has increased by more than 30% year-over-year, indicating strong demand for AI solutions [17][20] - The company maintains a total of 4 million seats under management, with some customers reducing agent numbers due to AI adoption [37][39] Company Strategy and Development Direction - The company focuses on transforming AI technology into tangible business outcomes, emphasizing a hybrid cloud model that allows customers to layer AI solutions on existing infrastructures [8][12] - The strategy includes targeting large accounts to drive AI adoption and innovation, with a focus on proven AI outcomes reported by leading brands [47][72] Management's Comments on Operating Environment and Future Outlook - Management noted a shift in customer conversations towards value and ROI, with a focus on achieving measurable results in less than six months [63][64] - The company expects continued momentum in AI adoption, with a target of double-digit free cash flow growth for the year [13][22] Other Important Information - The company has increased its revolver to $500 million and extended the term to 2030, which can be used to pay down existing convertible notes [21][22] - The management highlighted the importance of customer success stories in accelerating AI adoption across the market [48][49] Q&A Session Summary Question: How does Verint differentiate in the AI space? - Management emphasized proven AI outcomes and the ability to layer AI on existing infrastructures as key differentiators [26][27] Question: Can you provide examples of successful upselling from smaller deals? - Management shared examples of customers increasing their AI consumption significantly after proving value, leading to larger deals [30][32] Question: What is the current state of AI voice chatbot adoption? - Management noted that while some customers are reducing agent numbers, the overall number of seats remains stable, with AI driving growth [36][39] Question: What is the company's confidence in achieving ARR targets for the second half? - Management expressed confidence based on a strong pipeline and historical seasonality trends [54][56] Question: How is the macro environment affecting customer behavior? - Management indicated that customers are now more focused on immediate value and ROI rather than long-term projects [63][64] Question: What are the key metrics for AI ARR and retention? - Management highlighted that AI ARR is a key driver of growth, with net retention rates above 100% [60][61] Question: What bots are performing well and how is customer adoption progressing? - Management reported positive feedback on various bots, noting that some require behavioral changes for full adoption [84][86]

Financial Data and Key Metrics Changes - The company reported a strong first quarter with an ARR growth of 6% year over year, exceeding guidance for revenue and diluted EPS [6][13] - Revenue for Q1 was $208 million, with non-GAAP diluted EPS at $0.29, driven by the timing of two large unbundled SaaS deals [13][18] - The company expects to exit the year with approximately $768 million in ARR, reflecting an 8% year-over-year growth [15][18] Business Line Data and Key Metrics Changes - AI ARR increased by 24% year over year, reaching $354 million, now representing close to 50% of subscription ARR [17][18] - The company won significant deals, including a $13 million TCV order from an insurance company and a $14 million TCV order from a healthcare company, showcasing strong demand for AI solutions [8][9] Market Data and Key Metrics Changes - The rolling four-quarter SaaS pipeline has increased by more than 30% year over year, indicating strong demand for AI [15][19] - The company maintains a total of 4 million seats under management, with some customers reducing agent numbers due to AI adoption while others expand [36][38] Company Strategy and Development Direction - The company focuses on transforming AI technology into tangible business outcomes, emphasizing a hybrid cloud model that allows customers to layer AI on existing infrastructures [7][10] - The strategy includes starting small with AI deployments, allowing customers to scale once they prove value [27][30] - The company aims to maintain its differentiation through strong customer relationships, a platformatic view of AI integration, and an open AI model that incorporates various AI technologies [75][78] Management's Comments on Operating Environment and Future Outlook - Management noted a shift in customer focus towards value and ROI, with less interest in long-term projects and more emphasis on immediate results [64][66] - The company expects continued momentum in AI adoption, with a target of double-digit free cash flow growth alongside 8% ARR growth [12][21] Other Important Information - The company has increased its revolver to $500 million and extended the term to 2030, which can be used to pay down existing convertible notes [20] - The management highlighted the importance of customer success stories in driving AI adoption and plans to showcase these at an upcoming customer conference [47][48] Q&A Session Summary Question: How does Verint differentiate itself in the AI space? - Management emphasized proven AI outcomes and the ability to layer AI on existing infrastructure as key differentiators [25][26] Question: Can you provide examples of successful smaller deals leading to larger contracts? - Management shared examples of customers increasing their AI consumption significantly after initial small deployments, leading to larger ARR contributions [29][30] Question: What is the current state of AI voice chatbot adoption? - Management noted that while some customers are reducing agent numbers, the overall number of agents remains stable, with AI driving significant growth in ARR [36][38] Question: What is the outlook for the second half of the year regarding ARR? - Management expressed confidence in achieving the 8% ARR growth target, supported by a strong pipeline and seasonal trends [54][56] Question: How is the company addressing customer concerns about AI adoption? - Management highlighted the importance of demonstrating value quickly and encouraging customers to move to production rather than remaining in lab experiments [66][90]

Financial Performance - Total revenue for the three months ended April 30, 2025, was $208,097,000, a decrease of 5.0% compared to $221,277,000 for the same period in 2024[19]. - Net income attributable to Verint Systems Inc. for the three months ended April 30, 2025, was $1,622,000, down 89.4% from $15,241,000 in the same period of 2024[19]. - Operating income decreased significantly to $5,072,000 for the three months ended April 30, 2025, compared to $24,445,000 for the same period in 2024, reflecting a decline of 79.3%[19]. - Cash flows from operating activities were $26,323,000 for the three months ended April 30, 2025, a decrease of 56.5% from $60,717,000 in the same period of 2024[26]. - Comprehensive income attributable to Verint Systems Inc. was $35,744,000 for the three months ended April 30, 2025, compared to $7,962,000 in the same period of 2024, indicating a significant increase[21]. - Net income for the three months ended April 30, 2025, was $1.9 million, a significant decrease from $15.4 million in the same period of 2024[53]. - The effective income tax rate for the three months ended April 30, 2025, was 57.5% on pretax income of $4.5 million, compared to an effective rate of 34.1% on pretax income of $23.3 million for the same period in 2024[138][139]. Assets and Liabilities - Total current assets decreased from $578.8 million as of January 31, 2025, to $516.3 million as of April 30, 2025, representing a decline of approximately 10.8%[17]. - Cash and cash equivalents decreased from $215.7 million to $180.9 million, a reduction of about 16.1%[17]. - Accounts receivable decreased from $203.1 million to $172.4 million, reflecting a decrease of approximately 15.1%[17]. - Total liabilities increased from $964.5 million to $925.7 million, a decrease of about 4.0%[17]. - Long-term debt decreased from $312.8 million to $0, indicating a significant reduction in debt obligations[17]. - Total stockholders' equity increased from $889.3 million to $896.5 million, an increase of approximately 0.2%[17]. - Total debt as of April 30, 2025, was $413.1 million, with no long-term debt reported[83]. Revenue Breakdown - Total revenue for the three months ended April 30, 2025, was $208.1 million, a decrease of 5.9% from $221.3 million in the same period of 2024[45]. - Recurring revenue for the three months ended April 30, 2025, was $173.6 million, slightly up from $173.5 million in 2024, with total SaaS revenue increasing to $147.5 million from $141.0 million[45]. - Nonrecurring perpetual revenue decreased to $17.0 million from $24.9 million year-over-year, while nonrecurring professional services and other revenue fell to $17.5 million from $22.8 million[45]. - Revenue in the Americas totaled $143.6 million, down 11.0% from $161.3 million in the prior year[187]. - EMEA revenue increased to $43.1 million, up 9.0% from $39.3 million in the previous year[187]. - APAC revenue was $21.4 million, a slight increase from $20.7 million year-over-year[187]. Expenses and Costs - Research and development expenses increased to $40,641,000 for the three months ended April 30, 2025, up from $36,730,000 in the same period of 2024, reflecting a growth of 8.2%[19]. - The total stock-based compensation expense for the three months ended April 30, 2025, was $15.467 million, a decrease from $18.021 million in the same period of 2024[166]. - Cash paid for interest in Q1 2025 was $1,952,000, down from $2,210,000 in Q1 2024, a decrease of about 11.7%[105]. - The company is actively managing costs to mitigate inflationary pressures affecting customer spending behavior[307]. Acquisitions and Investments - The acquisition of Cogito Corporation on October 11, 2024, involved a total purchase price of $50.271 million, including $38.186 million in cash and $11.786 million in contingent consideration[65][70]. - The acquisition of Cogito resulted in the recognition of $27.1 million in goodwill, with identifiable intangible assets valued at $25.8 million[67][70]. - The company completed the acquisition of a privately-held company for a SAFE investment of approximately $1.7 million during the three months ended April 30, 2024[155]. Stock and Shareholder Information - The company repurchased and retired 2,532,000 shares of common stock during the three months ended April 30, 2025, at a cost of $42,324,000[23]. - A new stock repurchase program was authorized for up to $200,000,000 from August 29, 2024, to August 29, 2026[129]. - The maximum number of shares of common stock that could be issued upon conversion of the outstanding shares of Preferred Stock was approximately 9.6 million shares as of April 30, 2025[114]. - The Series A Preferred Stock has a conversion price adjusted to $36.38 per share as of April 30, 2025, reflecting a significant premium over its initial conversion price[113]. Financial Covenants and Debt - The company issued $315.0 million in 0.25% convertible senior notes due April 15, 2026, with an effective interest rate of approximately 0.83%[84][87]. - The Revolving Credit Facility was increased from $300.0 million to $500.0 million, maturing on March 25, 2030, with an interest rate of 5.82% as of April 30, 2025[94][96]. - The company has a financial covenant requiring a Leverage Ratio of no greater than 4.50 to 1 for the Revolving Credit Facility[98]. Risks and Future Outlook - The company highlighted risks related to technological advancements and competition in the market, particularly in AI and SaaS strategies[10]. - The company continues to evaluate the impact of new accounting standards, including ASU No. 2024-03 and ASU 2024-04, which will affect future disclosures and financial reporting[40][41].

Revenue Performance - Revenue for Q1 was $208 million, with non-GAAP diluted EPS at $0.29, exceeding guidance[6] - Total revenue for the three months ended April 30, 2025, was $208,097,000, a decrease of 5.9% from $221,277,000 in the same period of 2024[18] - For the three months ended April 30, 2025, Verint Systems reported a revenue of $208,097, a decrease of 6.0% compared to $221,277 for the same period in 2024[39] - Revenue denominated in non-U.S. dollars accounted for 21% of total revenue for the three months ended April 30, 2025[40] ARR Growth - Q1 ARR growth accelerated to 6% year-over-year, with subscription ARR reaching $710 million[6] - AI ARR increased by 24.1% year-over-year, totaling $354 million, representing nearly 50% of total ARR[6] - Subscription ARR increased to $709,992,000, reflecting a year-over-year growth of 6.3%[20] - AI ARR grew significantly by 24.1% year-over-year, reaching $353,906,000, while Non-AI ARR decreased by 7.0% to $356,086,000[20] - The company anticipates AI ARR to continue growing more than 20% for the year, an acceleration from the previous year[6] - For FYE 2026, the company expects subscription ARR to reach approximately $768 million, reflecting 8% year-over-year growth[8] Profitability Metrics - Non-GAAP diluted EPS guidance for the year is $2.93 at the midpoint of revenue guidance[8] - GAAP gross profit for the quarter was $138,902,000, resulting in a gross margin of 66.7%, down from 71.2% in the prior year[23] - Operating income fell to $5,072,000, with an operating margin of 2.4%, compared to 11.0% in the same quarter of 2024[27] - Net income attributable to Verint Systems Inc. was $1,622,000, a significant decline from $15,241,000 in the previous year[18] - Non-GAAP net income attributable to Verint Systems Inc. common shares was $18,426,000, compared to $42,557,000 in the same period last year[31] Cash Flow and Debt - Cash generation is projected at $960 million, with a cash contribution of $245 million at the midpoint[8] - The company plans to achieve 12% increase in free cash flow for the full year, driven by ARR growth and cash contribution margin expansion[6] - Free cash flow for the three months ended April 30, 2025, was $20,298, down from $54,588 in the prior year[36] - Total debt as of April 30, 2025, was $415,000,000, with net debt amounting to $233,681,000 after accounting for cash and cash equivalents[35] Tax and Liabilities - The company reported a GAAP effective income tax rate of 57.5%, up from 34.1% in the prior year[29] - The non-GAAP effective income tax rate for the year ending January 31, 2026, is approximately 11%, down from 12% for the year ended January 31, 2025[56] - The company’s total liabilities increased to $925,700 as of April 30, 2025, compared to $964,454 as of January 31, 2025[44] Asset Management - Total current assets decreased to $516,288 as of April 30, 2025, from $578,772 as of January 31, 2025[44] - Cash and cash equivalents at the end of the period were $180,870, down from $215,707 at the beginning of the period[46] Investment Activities - Cash used in investing activities for the three months ended April 30, 2025, was $5,421, compared to $14,135 in the prior year[46] - Preferred stock dividend payments for the three months ended April 30, 2025, were $8,000, down from $10,400 in the same period of 2024[46] Definitions and Metrics - Subscription Annual Recurring Revenue (ARR) is used to measure the underlying performance of subscription-based contracts, reducing fluctuations due to seasonality and contract terms[65] - AI Annual Recurring Revenue (AI ARR) represents the annualized quarterly run-rate value of active or signed SaaS agreements that include AI functionality[66] - Cash Generation, which includes ARR and nonrecurring revenue, provides an estimate of the cash-producing potential of the entire business[67] - Net Debt is defined as the sum of long-term and short-term debt minus cash and cash equivalents, helping evaluate capital structure and financial leverage[58] - Free Cash Flow is defined as GAAP cash provided by operating activities less capital expenditures, including property and equipment purchases[59] - Constant currency measures are used to assess performance excluding the effects of foreign currency fluctuations, facilitating comparison between periods[62] - Recurring revenue primarily consists of SaaS revenue and is expected to be renewed in the future, indicating stable income streams[60] - Nonrecurring revenue includes perpetual licenses and hardware, which are less predictable compared to recurring revenue[61] - Adjusted EBITDA is a non-GAAP measure that helps reduce variability caused by differences in capital structures and accounting policies, commonly used by investors[57]

Core Insights - Verint Systems Inc (NASDAQ:VRNT) is experiencing a significant decline, reaching 52-week lows, down 11.4% to $19.15 following a disappointing fourth-quarter report where both earnings and revenue missed estimates [1] - The company's full-year guidance midpoint also fell below expectations, contributing to a year-to-date decline of approximately 30% [2] - The stock is currently trading below all major moving averages, indicating bearish pressure, particularly from the 20-day moving average [2] Analyst Reactions - Several analysts have reduced their price targets for Verint Systems, with Evercore ISI cutting its target from $34 to $23 [3] - Among the seven analysts covering the stock, four have a "buy" or "strong buy" rating, while three maintain a "hold" rating [3] - The 12-month consensus price target remains at $36, representing an 88.4% premium to the current trading levels [3] Options Activity - Verint Systems has seen a surge in options trading, with volume reaching eight times its average daily amount, although the absolute numbers remain relatively low [2] - The most popular option is the April 20 put, with new positions being opened [2]