da-kuk Introduction Verint Systems (NASDAQ:VRNT) just recently reported its Q2 '25 results, so I wanted to look at the company's overall performance over the years to see if it would be a good time to start a position. I am not very impressed with how the financials progressed over the years, and the reliance on adjusted numbers makes it for risky investment at this price. I am initiating a hold rating. Q2 Results Revenues came in at $210m, flat y/y. GAAP EPS came in at $0.2 vs -$0.17 from a year ago, showi ...

Core Insights - Verint Systems (VRNT) reported revenue of $210.17 million for the quarter ended July 2024, reflecting a year-over-year decline of 0.1% and an EPS of $0.49, slightly up from $0.48 a year ago [1] - The reported revenue fell short of the Zacks Consensus Estimate of $213.22 million, resulting in a surprise of -1.43%, while the EPS also missed the consensus estimate of $0.53 by -7.55% [1] Revenue Breakdown - Perpetual revenue (non-GAAP) was reported at $23.83 million, exceeding the average estimate of $22.69 million from three analysts, but showing a year-over-year decline of -5.5% [3] - Professional services revenue (non-GAAP) reached $23.11 million, slightly above the average estimate of $22.99 million, with a year-over-year change of -3.5% [4] - Support revenue (non-GAAP) was reported at $26.56 million, surpassing the average estimate of $25.67 million, but indicating a significant year-over-year decline of -25% [5] Stock Performance - Over the past month, shares of Verint have returned -7.7%, contrasting with the Zacks S&P 500 composite's increase of +3.6% [5] - The stock currently holds a Zacks Rank 3 (Hold), suggesting it may perform in line with the broader market in the near term [5]

Financial Performance - Total revenue for the three months ended July 31, 2024, was $210,170, a slight increase from $210,165 in the same period of 2023[12]. - Recurring revenue for the six months ended July 31, 2024, reached $336,757, up from $327,438 year-over-year, indicating a growth of approximately 1.0%[12]. - Gross profit for the three months ended July 31, 2024, was $145,426, compared to $141,289 in the prior year, reflecting a year-over-year increase of about 2.0%[12]. - Operating income for the three months ended July 31, 2024, was $13,870, a significant recovery from a loss of $7,512 in the same quarter of 2023[12]. - Net income attributable to Verint Systems Inc. for the three months ended July 31, 2024, was $5,531, compared to a loss of $6,000 in the prior year[12]. - The company reported a basic net income per share of $0.02 for the three months ended July 31, 2024, recovering from a loss of $0.17 in the same period of 2023[13]. - Net income for the six months ended July 31, 2024, was $21,102 thousand, a significant improvement compared to a net loss of $2,154 thousand for the same period in 2023[18]. - Revenue for the six months ended July 31, 2024, increased by approximately $4.7 million, or 1%, to $431.4 million from $426.7 million in the same period in 2023, driven by a $9.3 million increase in recurring revenue[181]. Assets and Liabilities - Total assets decreased from $2,226,424 thousand as of January 31, 2024, to $2,183,706 thousand as of July 31, 2024, representing a decline of approximately 1.9%[11]. - Cash and cash equivalents decreased from $241,400 thousand to $207,845 thousand, a reduction of about 13.9%[11]. - Accounts receivable decreased from $190,461 thousand to $156,953 thousand, a decline of approximately 17.6%[11]. - Total current liabilities decreased from $418,171 thousand to $364,109 thousand, a reduction of about 12.9%[11]. - Long-term debt remained relatively stable, increasing slightly from $410,965 thousand to $411,733 thousand[11]. - Total stockholders' equity increased from $832,666 thousand to $838,744 thousand, an increase of approximately 0.9%[11]. - Contract liabilities decreased from $254,437 thousand to $231,459 thousand, a decline of about 9.0%[11]. - Goodwill increased from $1,352,715 thousand to $1,369,311 thousand, an increase of approximately 1.2%[11]. - The company reported a retained earnings improvement from an accumulated deficit of $(6,723) thousand to $4,369 thousand[11]. Cash Flow and Investments - Cash flows from operating activities provided $64,580 thousand, slightly up from $63,332 thousand in the previous year[18]. - Cash used in investing activities totaled $21,727 thousand, compared to $15,821 thousand in the prior year[18]. - Cash paid for asset acquisitions and business combinations was $10,356 thousand, an increase from $916 thousand in the previous year[18]. - The company had a decrease in cash, cash equivalents, and restricted cash of $34,005 thousand, compared to a decrease of $50,802 thousand in the prior year[18]. - During the six months ended July 31, 2024, Verint Systems Inc. completed two business combinations, including an acquisition of an AI-powered analytics company for a total consideration of $13.9 million[51][52]. Expenses - Research and development expenses for the three months ended July 31, 2024, were $35,358, up from $34,057 in the previous year, indicating an increase of approximately 3.8%[12]. - Total operating expenses decreased to $131,556 for the three months ended July 31, 2024, down from $148,801 in the same period of 2023, a reduction of about 11.6%[12]. - The company reported stock-based compensation of $41,784 thousand for the six months ended July 31, 2024, up from $34,156 thousand in the same period last year[18]. - The total stock-based compensation expense for the six months ended July 31, 2024, was $41,767,000, an increase from $34,100,000 for the same period in 2023, reflecting a year-over-year growth of approximately 22%[145]. Market Position and Strategy - Verint's Open Platform is utilized by over 80 of the Fortune 100 companies, highlighting its market position in customer experience automation[19]. - The company is focused on enhancing customer experience automation through its AI-powered solutions, addressing the challenges faced by brands with limited resources[20]. - The company expects a continued shift in revenue mix towards SaaS offerings, aligning with its cloud-first strategy and increasing demand for AI-powered solutions[192]. Risks and Challenges - The company continues to face risks related to macroeconomic conditions, competition, and technological advancements impacting future performance[5]. - The company continues to monitor macroeconomic conditions, including the war in Ukraine and the Israel-Hamas conflict, which may impact customer spending decisions[166]. - The company anticipates that macroeconomic factors may impact customer spending decisions, despite significant demand for its AI-powered solutions[193]. Stock and Dividends - The company has authorized a new stock repurchase program allowing for the repurchase of up to $200.0 million in common stock from August 29, 2024, until August 29, 2026[108]. - The company did not declare or pay any cash dividends on common stock during the six months ended July 31, 2024, due to restrictions under its Credit Agreement[103]. - Preferred stock dividends paid for the three months ended July 31, 2024, totaled $9.7 million, compared to $5.2 million for the same period in 2023, reflecting an increase of 86.5%[92]. Employee and Workforce - As of July 31, 2024, the company had approximately 3,700 employees globally, with additional contractors[20]. - As of July 31, 2024, the company employed approximately 3,700 employees, a decrease from approximately 4,100 employees a year earlier, primarily due to the divestment of its manual quality managed services business[184].

Verint Systems (VRNT) came out with quarterly earnings of $0.49 per share, missing the Zacks Consensus Estimate of $0.53 per share. This compares to earnings of $0.48 per share a year ago. These figures are adjusted for non-recurring items. This quarterly report represents an earnings surprise of -7.55%. A quarter ago, it was expected that this maker of software for analyzing intercepted communications would post earnings of $0.54 per share when it actually produced earnings of $0.59, delivering a surprise ...

While all eyes are on Nvidia, whose stock surged by almost 5% yesterday, overtaking Apple to become the second most valuable company in the world, only behind Microsoft, with a market cap hitting $3 trillion, another tech company, Verint Systems NASDAQ: VRNT, put in an impressive display. Shares of the $2.1 billion technology company surged by 23% on Wednesday and closed above its short-term resistance, indicating a momentum shift in its trend. So, let's take a closer look at the company and its recent earn ...

| --- | --- | |---------------------------------------------------------------------------------------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------| | | | | | | | | | | | | | FYE25 First Quarter Conference Call The CX Automation Leader Delivering AI Business Outcomes NOW | | | June 4, 2024 | © 2024 Verint Systems Inc. All mar ...

Verint Systems Inc. (NASDAQ:VRNT) Q1 2025 Earnings Conference Call June 4, 2024 4:30 PM ET Company Participants Matthew Frankel - IR & Corporate Development Director Dan Bodner - CEO Grant Highlander - CFO Conference Call Participants Shaul Eyal - TD Cowen Joshua Reilly - Needham Steven Wahrhaftig - Wedbush Securities Billy Fitzsimmons - Jefferies Operator Thank you for standing by, and welcome to Verint's First Quarter Fiscal Year 2025 Earnings Conference Call. At this time, all participants are in a liste ...

Verint Systems (VRNT) came out with quarterly earnings of $0.59 per share, beating the Zacks Consensus Estimate of $0.54 per share. This compares to earnings of $0.53 per share a year ago. These figures are adjusted for non-recurring items. This quarterly report represents an earnings surprise of 9.26%. A quarter ago, it was expected that this maker of software for analyzing intercepted communications would post earnings of $0.99 per share when it actually produced earnings of $1.07, delivering a surprise o ...

Financial Performance - Total revenue for the three months ended April 30, 2024, was $221,277,000, a 2.6% increase from $216,566,000 in the same period of 2023[21]. - Net income attributable to Verint Systems Inc. for the three months ended April 30, 2024, was $15,241,000, compared to $3,295,000 in the same period of 2023, representing a significant increase[21]. - Operating income increased to $24,445,000 for the three months ended April 30, 2024, compared to $8,772,000 in the same period of 2023, reflecting a strong operational performance[21]. - The company reported a comprehensive income of $7,962,000 for the three months ended April 30, 2024, down from $11,805,000 in the same period of 2023, primarily due to foreign currency translation adjustments[23]. - The diluted net income per common share attributable to Verint Systems Inc. was $0.16 for the three months ended April 30, 2024, compared to a loss of $0.03 in the same period of 2023[21]. - Net income attributable to Verint Systems Inc. for Q1 2024 was $15.2 million, compared to $3.3 million in Q1 2023, indicating a substantial increase of 361.5%[59]. - Basic net income per common share for Q1 2024 was $0.16, a recovery from a loss of $0.03 per share in Q1 2023[60]. Assets and Liabilities - Total current assets decreased from $573.2 million as of January 31, 2024, to $530.1 million as of April 30, 2024, a decline of approximately 7.5%[19]. - Accounts receivable decreased from $190.5 million to $155.9 million, reflecting a reduction of about 18.2%[19]. - Total liabilities decreased from $957.4 million to $934.8 million, a decrease of approximately 2.4%[19]. - Long-term debt remained relatively stable, increasing slightly from $411.0 million to $411.4 million[19]. - Stockholders' equity decreased from $832.7 million to $818.9 million, a decline of about 1.7%[19]. - Cash and cash equivalents decreased from $241.4 million to $236.6 million, a decline of about 2.3%[19]. - Contract liabilities decreased from $254.4 million to $242.5 million, a reduction of approximately 4.7%[19]. - Total cash, cash equivalents, restricted cash, and restricted cash equivalents at the end of the period were $237,666,000, down from $260,783,000 at the end of the same period in 2023[29]. - Remaining performance obligations totaled $717.4 million as of April 30, 2024, down from $744.3 million as of January 31, 2024[58]. - Total inventories increased to $16.589 million as of April 30, 2024, from $14.209 million on January 31, 2024[104]. - Accrued expenses and other current liabilities totaled $122.391 million as of April 30, 2024, compared to $137.433 million on January 31, 2024[106]. Cash Flow and Expenses - Cash flows from operating activities were $60,717,000 for the three months ended April 30, 2024, slightly up from $60,007,000 in the same period of 2023[29]. - The company incurred total operating expenses of $133,071,000 for the three months ended April 30, 2024, compared to $139,391,000 in the same period of 2023, showing improved cost management[21]. - Research and development expenses rose to $36,730,000 for the three months ended April 30, 2024, up from $31,782,000 in the same period of 2023, indicating increased investment in innovation[21]. - Total interest expense for the 2021 Notes was $643,000 for the three months ended April 30, 2024, compared to $640,000 for the same period in 2023[103]. - The company reported cash payments for interest of $2.210 million for the three months ended April 30, 2024, down from $2.513 million in 2023[108]. Strategic Initiatives - The company is focusing on enhancing its software as a service (SaaS) transition and improving subscription renewal rates[10]. - Future growth strategies include potential mergers and acquisitions to expand market presence and capabilities[10]. - The company completed the acquisition of an AI-powered analytics company for a total consideration of $13.9 million, including $8.8 million in cash and $5.1 million in contingent consideration and previously held investment[67]. - The company invested approximately $1.7 million in a privately-held company via SAFE agreements, which were consolidated into its financial statements following the acquisition[161]. Stock and Dividends - The company repurchased and retired common stock amounting to $38,118,000 during the three months ended April 30, 2024[29]. - The company did not declare or pay any cash dividends on common stock during the three months ended April 30, 2024 and 2023 due to restrictions under its Credit Agreement[128]. - For the three months ended April 30, 2024, the company paid $10.4 million in preferred stock dividends, with $6.9 million of cumulative undeclared and unpaid preferred stock dividends[115]. - The company has a stock repurchase program authorized for up to $200.0 million from December 12, 2022, until January 31, 2025[131]. Legal and Regulatory Matters - Verint agreed to pay a total of $16.0 million as compensation to plaintiffs and class members, with payments structured in three phases[192]. - The company collected a total of $14.5 million in insurance recovery related to legal settlements, offsetting settlement and legal expenses[200]. - The Israeli Supreme Court rejected CTI's motion to appeal, allowing proceedings in the District Court to resume[191]. - Verint's financial results may be influenced by macroeconomic conditions, including inflation and geopolitical events[204]. Tax and Compliance - The effective income tax rate for the three months ended April 30, 2024, was 34.1%, with an income tax provision of $8.0 million on pretax income of $23.3 million[140]. - As of April 30, 2024, the company had unrecognized income tax benefits of $82.5 million, which could decrease by approximately $8.1 million in the next twelve months due to potential settlements of tax audits[144]. - The company is monitoring the OECD Pillar 2 guidelines, which propose a global minimum tax of 15% effective for tax years beginning in 2024, but does not anticipate a material impact on its income tax provision this year[145].

Exhibit 99.1 Investor Relations Contact Matthew Frankel, CFA Verint Systems Inc. (631) 962-9600 matthew.frankel@verint.com Verint Announces Strong Q1 FYE 2025 Results Revenue and Diluted EPS Come in Ahead of Guidance World's Leading Brands Select Verint Open Platform for Tangible AI Business Outcomes Raising Revenue and Diluted EPS Outlook for FYE25 MELVILLE, N.Y., June 4, 2024 - Verint® (Nasdaq: VRNT), The CX Automation Company™, today announced results for the three months ended April 30, 2024 (FYE 2025). ...