Verint(US:VRNT)2021-12-03 03:51Financial Data and Key Metrics Changes - In Q3, non-GAAP revenue was $227 million, with non-GAAP cloud revenue increasing 32% year-over-year [25][26] - Non-GAAP diluted EPS was $0.69, and non-GAAP gross margin was 71% [25][26] - Remaining performance obligations (RPO) increased 31% year-over-year [25] Business Line Data and Key Metrics Changes - Cloud revenue grew 33% on a GAAP basis and 32% on a non-GAAP basis year-over-year [12][25] - New PLE bookings increased 14% year-over-year in Q3, with guidance raised to more than 15% for the year [13][27] - The company added over 100 new logos in Q3, including notable brands like Costco and Disney [14] Market Data and Key Metrics Changes - The company expects cloud revenue to exceed $500 million next year, representing approximately 55% of total revenue [18][30] - For fiscal 2024, the target for cloud revenue is raised to over $650 million, with another year of 30% growth expected [20] Company Strategy and Development Direction - The company is focused on a Cloud First strategy, with a significant shift towards cloud solutions, expecting around 65% of total revenue from the cloud by fiscal 2024 [21][20] - The platform is designed to be open and agnostic, allowing for seamless integration with existing enterprise ecosystems [16][56] - The company is enhancing its AI-driven capabilities to close the engagement capacity gap for customers [15][17] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in continued momentum into Q4, raising annual guidance for non-GAAP revenue to $875 million [10][26] - The shift to cloud is expected to positively impact cash flow, with more than 20% growth in cash from operations anticipated next year [19][100] - Management noted that the pandemic has accelerated the shift to cloud solutions, with customers increasingly recognizing the need for digital transformation [90][92] Other Important Information - The company does not assume any future M&A in its long-term guidance, with only minor contributions from previous acquisitions [73] - The company plans to repurchase shares in fiscal 2023 to offset dilution from its equity compensation program [32] Q&A Session Summary Question: Strength of new customer additions - Management attributed the strength in new customer additions to demand for their differentiated cloud platform and improved partner execution [38][39] Question: Visibility for higher fiscal 2024 targets - Management noted improved visibility due to increased recurring revenue and a strong pipeline, expecting 60% of bookings in Q4 to come from SaaS [42][44] Question: Cloud transition and deal sizes - Management indicated that they are becoming more strategic with customers, leading to larger deal sizes as customers consume more from the cloud platform [50][52] Question: Dynamics of cloud growth - Management clarified that cloud growth is driven primarily by new deals rather than conversions, with over 60% of cloud growth coming from new customers [64][66] Question: Long-term guidance assumptions - Management confirmed that long-term guidance does not assume future M&A, with only minor contributions from past acquisitions [73] Question: Cash flow dynamics - Management expects significant cash flow growth as the cloud transition progresses, with a projected 20% increase in cash from operations next year [100][101]