Verint(VRNT) - 2026 Q1 - Quarterly Results

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]