Verint(US:VRNT)2022-09-08 01:54Financial Data and Key Metrics Changes - In Q2, revenue was $223 million on a GAAP basis and $224 million on a non-GAAP basis, with a constant currency non-GAAP revenue of $229 million, reflecting a 6% year-over-year growth [9][27] - Non-GAAP diluted EPS for Q2 was $0.56, exceeding expectations, with a full-year EPS guidance maintained at $2.50 [11][31] - For H1, revenue increased 8% on a constant currency basis [9][27] Business Line Data and Key Metrics Changes - Cloud revenue in Q2 increased 30% on a constant currency basis, with H1 cloud revenue up 34% [14][29] - New PLE bookings increased 10% on a reported basis and 12% on a constant currency basis in Q2, aligning with the annual target of 10% to 12% growth [11][29] - SaaS accounted for 65% of new PLE bookings in Q2, up from 53% in the same period last year [13][29] Market Data and Key Metrics Changes - Approximately 20% of revenue is generated in foreign currencies, with a significant impact from the appreciation of the U.S. dollar [10][28] - The company has a natural hedge against currency fluctuations, as about one-third of expenses are in foreign currencies, minimizing the impact on the bottom line [10][28] Company Strategy and Development Direction - The company is focused on helping customers transition to the cloud, with a strategy to offer a hybrid cloud platform for flexibility [15][19] - The One Workforce initiative aims to eliminate organizational silos and improve workforce efficiency through AI-driven solutions [19][21] - The company expects non-GAAP cloud revenue to represent about 75% of total recurring revenue, up from 62% last year [15][29] Management's Comments on Operating Environment and Future Outlook - Management noted strong demand for automation solutions to address rising labor costs and improve efficiency [39][62] - The company is well-positioned to meet annual targets for revenue growth and EPS, with expectations of continued strong performance in H2 [27][34] - Historical performance during recessions suggests resilience, with high renewal rates and a strong customer base across various industries [62] Other Important Information - Doug Robinson will step down as CFO in Q4, with Grant Highlander appointed as the new CFO [23] - The company plans to continue hiring to support growth targets [11][31] Q&A Session Summary Question: Difference in products acquired by new logos versus existing customers - Management indicated that new logos primarily engage in SaaS deals, while existing customers are transitioning to SaaS, with a focus on the One Workforce initiative to improve efficiency [38][39] Question: Any elongated sales cycles or additional scrutiny on large transactions - Management reported no trends of elongating sales cycles in Q2, with some deals closing earlier than expected [41][43] Question: New SaaS ACV growth and FX impact - Management acknowledged that new SaaS ACV growth can be lumpy but expects strong performance in Q3, with no significant anomalies noted [46][48] Question: Customer preference for consumption-based versus subscription pricing - There is growing interest in consumption-based pricing, but it remains a small part of revenue as customers assess its impact on total cost of ownership [50][51] Question: Bookings trends and customer behavior changes - Management noted strong bookings in Q2, with no clear changes in customer behavior despite macroeconomic concerns [54][55] Question: Impact of macro environment on business - Management expressed confidence in the company's resilience during economic downturns, citing high renewal rates and a strong customer base [62]