Verint(US:VRNT)2023-12-07 01:33Financial Data and Key Metrics Changes - In Q3, revenue reached $219 million, exceeding guidance by $4 million, with non-GAAP diluted EPS at $0.65, which is $0.08 above expectations [54][57] - Non-GAAP gross margins improved to 71.3%, up 180 basis points from Q2 and slightly above the prior year [9][57] - For Q4, the company expects revenue of approximately $264 million, representing an 11% year-over-year growth, and non-GAAP diluted EPS of about $0.99 [6][61] Business Line Data and Key Metrics Changes - The SaaS bookings mix showed that nearly 90% of new SaaS ACV bookings were for bundled SaaS, a significant increase from 65% in the prior year [90] - More than 50% of new SaaS ACV bookings included AI-powered bots, indicating a strong increase in customer AI adoption [54][90] - Perpetual revenue remained stable at $25 million in Q3, with expectations to maintain this level going forward [60] Market Data and Key Metrics Changes - The 12-month SaaS pipeline increased by over 20% year-over-year, driven by strong demand for CX automation and AI [43][58] - The unbundled SaaS revenue is expected to see a significant increase in Q4, projected to reach around $100 million [126] Company Strategy and Development Direction - The company is focusing on a shift towards bundled SaaS offerings, which are essential for accessing AI capabilities, as the market increasingly adopts AI solutions [25][121] - The strategy includes leveraging AI to enhance customer experience while reducing labor costs, positioning the company for growth in a labor-intensive industry ripe for automation [115][121] Management's Comments on Operating Environment and Future Outlook - Management noted that elongated sales cycles have persisted, but they expect a better economic environment next year, driven by the shift to bundled SaaS and AI adoption [12][78] - The company anticipates that the growth in bundled SaaS this year will lead to improved revenue growth rates in the following year [78][129] Other Important Information - The company has repurchased approximately $150 million worth of shares as part of a $200 million stock buyback program, which is expected to be completed faster than planned [94] - The upcoming Investor Day will provide a detailed discussion on AI differentiation and the financial model for the next chapter of growth [42][50] Q&A Session Summary Question: What is the outlook on sales cycles and new ACV? - Management acknowledged that while sales cycles remain elongated, they have adjusted their expectations and are seeing positive indicators in bookings [12][31] Question: How are customers adapting to the shift towards bots? - Management indicated that customers are increasingly focused on reducing labor costs while enhancing customer experience through AI and bots [17][130] Question: What is the current state of the unbundled SaaS revenue? - The company expects a significant increase in unbundled SaaS revenue in Q4, driven by contract renewals, while also noting that many customers are still on-premise [59][102]