Verint(US:VRNT)2024-06-04 23:25Financial Data and Key Metrics Changes - In Q1, revenue reached $221 million, exceeding guidance by $7 million, with a 5% year-over-year increase [8][15] - Non-GAAP diluted EPS was $0.59, which is $0.05 above guidance and represents an 11% year-over-year increase [8][37] - Non-GAAP gross margins expanded by 260 basis points year-over-year to 72.4% [8][37] - The company raised its revenue and EPS guidance for the year, now expecting non-GAAP revenue of $933 million, reflecting over 5% growth compared to fiscal '24 [68] Business Line Data and Key Metrics Changes - SaaS revenue increased by 20% year-over-year, with bundled SaaS new ACV bookings growing by 25% year-over-year [16][17] - The average SaaS contract term length increased by about 30% compared to the previous year, indicating growing customer confidence [38] - The advanced stage pipeline for bundled SaaS was up more than 20% year-over-year, with over 80% of the pipeline including AI-powered bots [17] Market Data and Key Metrics Changes - The company reported strong SaaS bookings driven by customer adoption of AI-powered bots, with significant wins including a $14 million contract with a major retailer [9][10] - The insurance company deploying Verint bots saw a 30% reduction in agent attrition, showcasing the effectiveness of the AI solutions [11] - A bank utilizing Verint Coaching Bots achieved a 48% increase in upsell close rates, demonstrating the revenue-enhancing capabilities of the technology [12] Company Strategy and Development Direction - The company is focused on leading the new CX automation category with its differentiated open platform, which is designed to quickly deploy AI-powered bots [6][13] - Verint aims to accelerate revenue growth to 10% in fiscal '27, consistent with its Rule of 40 target, while also expanding margins [13][21] - The strategy emphasizes delivering tangible AI business outcomes to customers, which is expected to drive further adoption of Verint's solutions [21][66] Management's Comments on Operating Environment and Future Outlook - Management noted that the AI opportunity in the contact center market is substantial, with brands increasingly seeking AI-powered solutions to enhance customer experience [6][27] - The current macro environment is mixed, but there is a clear demand for AI business outcomes, leading to increased customer investment in Verint's solutions [44][47] - The company is well-positioned to deliver strong AI business outcomes quickly, which is a key differentiator in the competitive landscape [47][81] Other Important Information - The company is targeting a greater than 40% increase in free cash flow to approximately $180 million for the full year [20] - A stock buyback program of $200 million is in place, with approximately $37 million of shares repurchased in Q1 [70] Q&A Session Summary Question: What is driving the recent momentum and large contract wins? - Management indicated that large contracts reflect customer confidence in Verint's strategy and the effectiveness of its open platform [44][45] Question: How is the macro environment affecting software investments? - Management acknowledged that while customers are cautious, they are willing to invest in solutions that deliver tangible business outcomes [47] Question: What is the competitive landscape like? - The market is shifting towards AI and data-centric platforms, with customers focusing on vendors that can deliver measurable AI business outcomes [81][82] Question: Are there any trends in agent count and utilization? - Management noted that while there hasn't been a decline in agent numbers, customers are using AI to create additional capacity and improve customer experience [77][96]