Core Viewpoint - Johnson Fistel, PLLP has initiated an investigation into potential breaches of fiduciary duties by the board members of Verint Systems Inc. regarding the proposed sale to Thoma Bravo, which is perceived to undervalue the company significantly [1][6]. Company Overview - Verint Systems Inc. has entered into a definitive merger agreement with Thoma Bravo, where shareholders will receive $20.50 in cash per share [6]. - The proposed merger price is notably lower than Verint's 52-week high of $34.80 per share, despite positive projections from Wall Street analysts regarding the company's sales and revenue growth [6]. Legal Context - Johnson Fistel, PLLP is a recognized shareholder rights law firm that represents both individual and institutional investors in derivative and class action lawsuits [3]. - The firm has a history of recovering significant amounts for clients, having secured approximately $90.725 million in 2024 for aggrieved clients [4].

Group 1 - Thoma Bravo is set to acquire Verint Systems, valuing the company at approximately $2 billion, including debt [1] - The announcement of the agreement may occur as early as Monday, although a final decision has not yet been made [1] - Following the news, Verint's stock price rose by 6% to $20.47, with a market capitalization of around $1.2 billion, and continued to increase by 18% in after-hours trading [1] Group 2 - Verint Systems is headquartered in Melville, New York, and claims to be a leader in customer experience automation, serving approximately 10,000 clients across 175 countries [1] - The company has been publicly traded on the NASDAQ since 2002 [1] - In February 2021, Verint completed a spin-off of Cognyte Software, which focuses on investigative analytics software, with Cognyte's market capitalization estimated at $639 million [1]

Buyout firm Thoma Bravo is nearing a deal to acquire Verint Systems that would value the call center software maker at about $2 billion, including debt https://t.co/ZwVwI31XJ1 ...

Market Dynamics - Verint Systems stock is jumping 10% in premarket trading [1] - Thoma Bravo is in talks to acquire the maker of call center software, Verint Systems [1]

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Financial Performance Highlights - Verint started FYE26 strong, exceeding revenue and Non-GAAP diluted EPS guidance[5, 7, 27, 29] - Q1 revenue reached $208 million[29] - Non-GAAP diluted EPS was $029[29] - Verint expects to exit FYE26 with 8% ARR growth[11, 47] - The company anticipates 12% free cash flow growth in FYE26[33, 47] ARR Growth and Outlook - ARR growth accelerated throughout the last four quarters: 3% in Q2 FYE25, 4% in Q3 FYE25, 5% in Q4 FYE25, and 6% in Q1 FYE26[10, 28] - Q2 FYE26 ARR outlook is $720 million[34] - Q4 FYE26 ARR is projected to be $768 million[33, 50] AI Performance - AI ARR reached $3539 million in Q1 FYE26[52] - AI ARR growth accelerated over the last four quarters: 15% in Q2 FYE25, 16% in Q3 FYE25, 18% in Q4 FYE25, and 24% in Q1 FYE26[37] - Verint expects to exit the year with over 20% AI ARR growth[38] Customer Success and AI Outcomes - A telco increased sales by $30 million by automating real-time agent guidance, resulting in a revenue increase of $770 per agent per month for over 3000 agents[21] - A bank saved $10 million by containing 10 million interactions through AI-driven self-service with Verint IVA, achieving an 80% containment rate[21] - A bank saved $9 million by reducing call time by 20 seconds through Knowledge Automation Bot, increasing capacity by 7%[21] - An insurer reduced attrition by 30% by providing agents unlimited scheduling flexibility with Time Flex Bot, resulting in $45 million saved[22] - A mortgage lender increased NPS from +3 to +39 through real-time agent coaching with Coaching Bot[22] Guidance - FYE26 revenue is projected to be $960 million +/- 3%[41, 50] - FYE26 Non-GAAP diluted EPS is expected to be $293[41, 50] - Q2 FYE26 revenue is guided at $200 million[42] - Q2 FYE26 Non-GAAP diluted EPS is guided at $026[42]

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]