0001166388false00011663882023-12-062023-12-06

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
 
_________________________ 
FORM 8-K
 
_________________________ 
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): December 6, 2023
 
_________________________ 
Verint Systems Inc.
(Exact name of registrant as specified in its charter)
_________________________   
 
Delaware
001-34807
11-3200514
(State or other jurisdiction
of incorporation)		(Commission File Number)(I.R.S. Employer
Identification No.)
175 Broadhollow Road
Melville,New York11747

(Address of principal executive offices, and zip code)
(631)962-9600

(Registrant's telephone number, including area code)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
 
☐Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:
Title of each class
Trading Symbol(s)
Name of each exchange on which registered
Common Stock, $.001 par value per shareVRNTThe NASDAQ Stock Market, LLC
(NASDAQ Global Select Market)

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  ☐



Item 2.02 Results of Operations and Financial Condition.
 
On December 6, 2023, Verint Systems Inc. ("Verint", the "Company", "we", "us", and "our") issued a press release providing selected financial information for the three and nine months ended October 31, 2023, and its outlook. A copy of the press release is attached as Exhibit 99.1 hereto and is incorporated by reference into this Item 2.02 in its entirety.


Item 9.01 Financial Statements and Exhibits.
 
(d) Exhibits.
 
Exhibit  
Number Description
   
 
104Cover Page Interactive Data File (embedded within XBRL document)





SIGNATURES
 
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 
VERINT SYSTEMS INC. 
Date:December 6, 2023
By:  /s/ Grant Highlander
Name:Grant Highlander
Title:Chief Financial Officer

                                                Exhibit 99.1
verintlogobluehighresa08a.jpg
Press Release



Investor Relations Contact
Matthew Frankel, CFA
Verint Systems Inc.
(631) 962-9672
matthew.frankel@verint.com

Verint Announces Q3 FYE 2024 Results

SaaS ARR up 11% Year-Over-Year Driven by Solid Bookings and Renewals

Positive Leading Indicators with Significant Increase in Customer AI Adoption and SaaS Pipeline up More than 20% year-over-year

Expect to Finish the Year Strong with 11% Non-GAAP Revenue Growth in the Fourth Quarter

Investor Day to Be Held December 13th Focused on Verint’s AI Differentiation and Long-Term Trends

MELVILLE, N.Y., December 6, 2023 - Verint® (Nasdaq: VRNT), The Customer Engagement Company™, today announced results for the three and nine months ended October 31, 2023 (FYE 2024). Revenue for the three months ended October 31, 2023 was $219 million, representing (3)% year-over-year change. Revenue for the nine months ended October 31, 2023 was $645 million on a GAAP basis and $646 million on a non-GAAP basis, representing (3)% year-over-year change on both a GAAP and non-GAAP basis. For the three months ended October 31, 2023, diluted EPS was $0.12 on a GAAP basis and $0.65 on a non-GAAP basis. For the nine months ended October 31, 2023, net loss per share was $(0.09) on a GAAP basis and diluted EPS was $1.67 on a non-GAAP basis.

“We are pleased to have overachieved our revenue and non-GAAP diluted EPS expectations in Q3 and believe we are on track to complete the year with strong 11% revenue growth in Q4. Our 12 month SaaS pipeline at the end of Q3 was up more than 20% year-over-year and we are pleased with the increase in customer AI adoption with the majority of our Q3 new SaaS ACV bookings including Verint AI-Powered Bots. We look forward to reviewing our significant AI differentiation and the positive impact customer AI adoption has on our financial model at our investor day next week,” said Dan Bodner, Verint CEO.

Q3 FYE 2024 Highlights
•SaaS ARR: Up 11% year-over-year
•New SaaS ACV Bookings: $25 Million, or an annual run-rate of ~$100 million
•% of New ACV Bookings Including Bots: >50%, with customer AI adoption increasing
•Favorable Mix Shift to Recurring Revenue: 87% of software revenue recurring year-to-date (up ~200bps year-over-year)
•Gross Margin: Up more than 100bps year-to-date compared to the same period last year
•GAAP Cash From Operations: Up 19% year-to-date compared to the same period last year

Grant Highlander, Verint CFO, added, “SaaS ARR is becoming an important metric to understand our SaaS growth trends as customers shift to the Verint cloud, and I am pleased that SaaS ARR increased 11% in Q3 year-over-year. I am also pleased with our strong margins and 19% year-over-year increase in GAAP cash from operations year-to-date, which provides us with financial flexibility as we continue to execute on our previously announced $200 million stock buyback program. Going forward, Verint is well positioned for the market shift to more bots and fewer contact center agents. Verint deploying more bot licenses with fewer agent licenses will increase our TAM overall, and provide us the opportunity to accelerate SaaS revenue growth.”



FYE 2024 Outlook
We are providing our non-GAAP outlook for the year ending January 31, 2024 as follows:
•Revenue: $910 million +/- 2%
•SaaS Revenue: 15% year-over-year growth
•Diluted EPS: $2.65 at the midpoint of our revenue guidance, reflecting 5% year-over-year growth

Our non-GAAP outlook for year ending January 31, 2024 excludes the following GAAP measure which we are able to quantify with reasonable certainty:

•Amortization of intangible assets of approximately $33 million.

Our non-GAAP outlook for the year ending January 31, 2024 excludes the following GAAP measures for which we are able to provide a range of probable significance:

•Revenue adjustments are expected to be between approximately $1 million and $2 million.
•Stock-based compensation expenses are expected to be between approximately $67 million and $69 million, assuming market prices for our common stock approximately consistent with current levels.
•Costs associated with modifying our workplace in response to our decision to move to a hybrid work environment, including assumed lease terminations and abandonments, IT facilities and infrastructure costs, and other nonrecurring charges are expected to be between approximately $26 million and $28 million.

Our non-GAAP guidance does not include the potential impact of any in-process business acquisitions that may close after the date hereof, and, unless otherwise specified, reflects foreign currency exchange rates approximately consistent with current rates.

We are unable, without unreasonable efforts, to provide a reconciliation for other GAAP measures which are excluded from our non-GAAP outlook, including the impact of future business acquisitions or acquisition expenses, future restructuring expenses, and non-GAAP income tax adjustments due to the level of unpredictability and uncertainty associated with these items. For these same reasons, we are unable to assess the probable significance of these excluded items. While historical results may not be indicative of future results, actual amounts for the three and nine months ended October 31, 2023 and 2022 for the GAAP measures excluded from our non-GAAP outlook appear in Tables 2, 3 and 4 of this press release.

Q3 Conference Call Information

We will conduct a conference call today at 4:30 p.m. ET to discuss our results for the three and nine months ended October 31, 2023 and outlook. An online, real-time webcast of the conference call and webcast slides will be available on our website at www.verint.com. Participants may register for the call here to receive the dial-in numbers and unique PIN to access the call. Please join the call 5-10 minutes prior to the scheduled start time.

Investor Day Information

We will host an Investor Day on Wednesday, December 13, 2023 at 10 a.m. ET which will focus on Verint’s AI differentiation and CX automation opportunity. A Q&A session will follow the prepared remarks. To register for the Investor Day, which will be hosted virtually, please visit the event’s registration page by clicking here.

About Non-GAAP Financial Measures
This press release and the accompanying tables include non-GAAP financial measures. For a description of these non-GAAP financial measures, including the reasons management uses each measure, and reconciliations of non-GAAP financial measures presented for completed periods to the most directly comparable financial measures prepared in accordance with GAAP, please see the tables below as well as "Supplemental Information About Non-GAAP Financial Measures and Operating Metrics" at the end of this press release.

About Verint Systems Inc.
Verint® (Nasdaq: VRNT) helps the world’s most iconic brands continuously elevate the customer experience (CX) and reduce operating costs. More than 10,000 organizations in 175 countries – including over 85 of the Fortune 100 companies – rely on Verint’s open customer engagement platform to harness the power of data and artificial intelligence (AI) to maximize CX automation.



Verint. The Customer Engagement Company®. Learn more at Verint.com.

Cautions About Forward-Looking Statements
This press release contains forward-looking statements, including statements regarding expectations, predictions, views, opportunities, plans, strategies, beliefs, and statements of similar effect relating to Verint Systems Inc. These forward-looking statements are not guarantees of future performance and they are based on management's expectations that involve a number of known and unknown risks, uncertainties, assumptions, and other important factors, any of which could cause our actual results or conditions to differ materially from those expressed in or implied by the forward-looking statements. Some of the factors that could cause our actual results or conditions to differ materially from current expectations include, among others: uncertainties regarding the impact of changes in macroeconomic and/or global conditions, including as a result of slowdowns, recessions, economic instability, rising interest rates, tightening credit markets, inflation, instability in the banking sector, actual or threatened trade wars, political unrest, armed conflicts, natural disasters, or outbreaks of disease (such as the COVID-19 pandemic), as well as the resulting impact on spending by customers or partners, on our business; risks that our customers or partners delay, downsize, cancel, or refrain from placing orders or renewing subscriptions or contracts, or are unable to honor contractual commitments or payment obligations due to challenges or uncertainties in their budgets, liquidity or and businesses; risks associated with our ability to keep pace with technological advances and challenges and evolving industry standards, including achieving and maintaining the competitive differentiation of our solution platform; to adapt to changing market potential from area to area within our markets; and to successfully develop, launch, and drive demand for new, innovative, high-quality products and services that meet or exceed customer challenges and needs, while simultaneously preserving our legacy businesses and migrating away from areas of commoditization; risks due to aggressive competition in all of our markets and our ability to keep pace with competitors, some of whom may be able to grow faster than us or have greater resources than us, including in areas such as sales and marketing, branding, technological innovation and development, and recruiting and retention; risks associated with our ability to properly execute on our software as a service ("SaaS") transition, including successfully transitioning customers to our cloud platform and the increased importance of subscription renewal rates, and risk of increased variability in our period-to-period results based on the mix, terms, and timing of our transactions; risks relating to our ability to properly identify and execute on growth or strategic initiatives, manage investments in our business and operations, and enhance our existing operations and infrastructure, including the proper prioritization and allocation of limited financial and other resources; risks associated with our ability to or costs to retain, recruit , and train qualified personnel and management in regions in which we operate either physically or remotely, including in new markets and growth areas we may enter, due to competition for talent, increased labor costs, applicable regulatory requirements, or otherwise; challenges associated with selling sophisticated solutions and cloud-based solutions, which may incorporate newer technologies, such as artificial intelligence, whose adoption and use-cases are still emerging, including with respect to longer sales cycles, more complex sales processes and customer evaluation and approval processes, more complex contractual and information security requirements, and assisting customers in understanding and realizing the benefits of our solutions and technologies, as well as with developing, offering, implementing, and maintaining an enterprise class, broad solution portfolio; risks that we may be unable to maintain, expand, or enable our relationships with partners as part of our growth strategy, including partners with whom we may overlap or compete, while avoiding excessive concentration with one or more partners; risks associated with our reliance on third-party suppliers, partners, or original equipment manufacturers (“OEMs”) for certain services, products, or components, including companies that may compete with us or work with our competitors; risks associated with our significant international operations, including exposure to regions subject to political or economic instability, fluctuations in foreign exchange rates, inflation, increased financial accounting and reporting burdens and complexities, and challenges associated with a significant portion of our cash being held overseas; risks associated with a significant part of our business coming from government contracts, and associated procurement processes and regulatory requirements; risks associated with our ability to identify suitable targets for acquisition or investment or successfully compete for, consummate, and implement mergers and acquisitions, including risks associated with valuations, legacy liabilities, reputational considerations, capital constraints, costs and expenses, maintaining profitability levels, expansion into new areas, management distraction, post-acquisition integration activities, and potential asset impairments; risks associated with complex and changing domestic and foreign regulatory environments, including, among others, with respect to data privacy, artificial intelligence, cyber / information security, government contracts, anti-corruption, trade compliance, climate change or other environmental, social and governance matters, tax, and labor matters, relating to our own operations, the products and services we offer, and/or the use of our solutions by our customers; risks associated with the mishandling or perceived mishandling of sensitive or confidential information and data, including personally identifiable information or other information that may belong to our customers or other third parties, including in connection with our SaaS or other hosted or managed services offerings or when we are asked to perform service or support; risks associated with our reliance on third parties to provide certain cloud hosting or other cloud-based services to us or our customers, including the risk of service disruption, data breaches, or data loss or corruption; risks that our solutions or services, or those of third-party suppliers, partners, or OEMs which we


use in or with our offerings or otherwise rely on, including third-party hosting platforms, may contain defects, vulnerabilities, or develop operational problems; risk that we or our solutions maybe subject to security vulnerabilities or lapses, including cyber-attacks, information technology system breaches, failures, or disruptions; risks that our intellectual property rights may not be adequate to protect our business or assets or that others may make claims on our intellectual property, claim infringement on their intellectual property rights, or claim a violation of their license rights, including relative to free or open source components we may use; risks associated with leverage resulting from our current debt position or our ability to incur additional debt, including with respect to liquidity considerations, covenant limitations and compliance, fluctuations in interest rates, dilution considerations (with respect to our convertible notes), and our ability to maintain our credit ratings; risks that we may experience liquidity or working capital issues and related risks that financing sources may be unavailable to us on reasonable terms or at all; risks arising as a result of contingent or other obligations or liabilities assumed in our acquisition of our former parent company, Comverse Technology, Inc. (“CTI”), or associated with formerly being consolidated with, and part of a consolidated tax group with, CTI, or as a result of the successor to CTI's business operations, Mavenir Inc., being unwilling or unable to provide us with certain indemnities to which we are entitled; risks associated with changing accounting principles or standards, tax laws and regulations, tax rates, and the continuing availability of expected tax benefits; risks relating to the adequacy of our existing infrastructure, systems, processes, policies, procedures, internal controls, and personnel, and our ability to successfully implement and maintain enhancements to the foregoing, for our current and future operations and reporting needs, including related risks of financial statement omissions, misstatements, restatements, or filing delays; risks associated with market volatility in the prices of our common stock and convertible notes based on our performance, third-party publications or speculation, or other factors and risks associated with actions of activist stockholders; risks associated with Apax Partners' significant ownership position and potential that its interests will not be aligned with those of our common stockholders; and risks associated with the February 1, 2021 spin-off of our former Cyber Intelligence Solutions business, including the possibility that the spin-off transaction does not achieve the benefits anticipated, does not qualify as a tax-free transaction, or exposes us to unexpected claims or liabilities. We assume no obligation to revise or update any forward-looking statement, except as otherwise required by law. For a detailed discussion of these risk factors, see our Annual Report on Form 10-K for the fiscal year ended January 31, 2023, our Quarterly Report on Form 10-Q for the quarter ended April 30, 2023, our Quarterly Report on Form 10-Q for the quarter ended July 31, 2023, our Quarterly Report on Form 10-Q for the quarter ended October 31, 2023, when filed, and other filings we make with the SEC.

VERINT, VERINT DA VINCI, VERINT OPEN CCAAS, THE CUSTOMER ENGAGEMENT COMPANY, BOUNDLESS CUSTOMER ENGAGEMENT and THE ENGAGEMENT CAPACITY GAP are trademarks of Verint Systems Inc. or its subsidiaries. Verint and other parties may also have trademark rights in other terms used herein.


Table 1
VERINT SYSTEMS INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Operations
(Unaudited) 
 Three Months Ended
October 31,		Nine Months Ended
October 31,
(in thousands, except per share data)2023202220232022
Revenue:
Recurring$161,117 $174,222 $488,555 $500,029 
Nonrecurring57,430 50,971 156,723 165,969 
  Total revenue218,547 225,193 645,278 665,998 
Cost of revenue:  
Recurring38,883 38,834 118,093 120,714 
Nonrecurring25,046 28,013 79,213 90,781 
Amortization of acquired technology1,609 3,550 5,511 10,742 
  Total cost of revenue65,538 70,397 202,817 222,237 
Gross profit153,009 154,796 442,461 443,761 
Operating expenses:  
Research and development, net32,084 32,941 97,923 97,844 
Selling, general and administrative87,879 93,757 297,532 302,344 
Amortization of other acquired intangible assets6,328 6,420 19,028 19,887 
  Total operating expenses126,291 133,118 414,483 420,075 
Operating income26,718 21,678 27,978 23,686 
Other income (expense), net:  
Interest income1,650 1,045 5,440 1,742 
Interest expense(2,609)(2,147)(7,994)(5,511)
Other income, net59 1,045 59 3,186 
  Total other expense, net(900)(57)(2,495)(583)
Income before provision for income taxes25,818 21,621 25,483 23,103 
Provision for income taxes12,953 17,395 14,772 20,539 
Net income12,865 4,226 10,711 2,564 
Net income attributable to noncontrolling interests253 150 804 614 
Net income attributable to Verint Systems Inc.12,612 4,076 9,907 1,950 
Dividends on preferred stock(5,200)(5,200)(15,600)(15,600)
Net income (loss) attributable to Verint Systems Inc. common shares$7,412 $(1,124)$(5,693)$(13,650)
Net income (loss) per common share attributable to Verint Systems Inc.:  
Basic$0.12 $(0.02)$(0.09)$(0.21)
Diluted$0.12 $(0.02)$(0.09)$(0.21)
Weighted-average common shares outstanding:  
Basic63,887 65,583 64,411 65,161 
Diluted64,144 65,583 64,411 65,161 


Table 2
VERINT SYSTEMS INC. AND SUBSIDIARIES
GAAP to Non-GAAP SaaS Metrics
(Unaudited)

SaaS Revenue
Three Months Ended
October 31,		Nine Months Ended
October 31,
(in thousands)2023202220232022
Bundled SaaS revenue - GAAP$63,251 $57,041 $184,770 $161,005 
Unbundled SaaS revenue - GAAP52,400 58,746 161,470 152,066 
SaaS revenue - GAAP115,651 115,787 346,240 313,071 
Estimated bundled SaaS revenue adjustments117 374 960 2,323 
Estimated unbundled SaaS revenue adjustments— — — — 
Estimated SaaS revenue adjustments117 374 960 2,323 
Bundled SaaS revenue - non-GAAP63,368 57,415 185,730 163,328 
Unbundled SaaS revenue - non-GAAP52,400 58,746 161,470 152,066 
SaaS revenue - non-GAAP$115,768 $116,161 $347,200 $315,394 

New SaaS ACV
Three Months Ended
October 31,		Nine Months Ended
October 31,
(in thousands)2023202220232022
New SaaS ACV$25,389 $26,833 $67,838 $78,178 
New SaaS ACV – Last Twelve Months91,713 108,466 


SaaS ARR
Three Months Ended
October 31,
(in thousands)20232022
SaaS ARR$512,304 $460,812 



Table 3
VERINT SYSTEMS INC. AND SUBSIDIARIES
Reconciliation of GAAP to Non-GAAP Measures
(Unaudited)
Revenue
Three Months Ended
October 31,		Nine Months Ended
October 31,
(in thousands)2023202220232022
Recurring revenue - GAAP$161,117 $174,222 $488,555 $500,029 
Nonrecurring revenue - GAAP57,430 50,971 156,723 165,969 
Total GAAP revenue218,547 225,193 645,278 665,998 
Recurring revenue adjustments120 423 989 2,498 
Nonrecurring revenue adjustments— — — — 
Total revenue adjustments120 423 989 2,498 
Recurring revenue - non-GAAP161,237 174,645 489,544 502,527 
Nonrecurring revenue - non-GAAP57,430 50,971 156,723 165,969 
Total non-GAAP revenue218,667 225,616 646,267 668,496 

Gross Profit and Gross Margin
Three Months Ended
October 31,		Nine Months Ended
October 31,
(in thousands)2023202220232022
Recurring cost of revenues$38,883 $38,834 $118,093 $120,714 
Nonrecurring cost of revenues25,046 28,013 79,213 90,781 
Amortization of acquired technology1,609 3,550 5,511 10,742 
Total GAAP cost of revenue65,538 70,397 202,817 222,237 
GAAP gross profit153,009 154,796 442,461 443,761 
GAAP gross margin70.0 %68.7 %68.6 %66.6 %
Revenue adjustments120 423 989 2,498 
Amortization of acquired technology1,609 3,550 5,511 10,742 
Stock-based compensation expenses1,093 1,329 2,905 4,245 
Acquisition expenses, net31 — 353 176 
Restructuring (benefit) expenses, net(2)593 1,447 969 
Non-GAAP gross profit$155,860 $160,691 $453,666 $462,391 
Non-GAAP gross margin71.3 %71.2 %70.2 %69.2 %

Research and Development, net
Three Months Ended
October 31,		Nine Months Ended
October 31,
(in thousands)2023202220232022
GAAP research and development, net$32,084 $32,941 $97,923 $97,844 
As a percentage of GAAP revenue14.7 %14.6 %15.2 %14.7 %
Stock-based compensation expenses(3,025)(3,533)(8,818)(10,371)
Acquisition expenses, net(20)— (96)(198)
Restructuring expenses(1)(509)(316)(646)
IT facilities and infrastructure realignment— — (1,648)— 
Other adjustments— (17)— (67)
Non-GAAP research and development, net$29,038 $28,882 $87,045 $86,562 
As a percentage of non-GAAP revenue13.3 %12.8 %13.5 %12.9 %



Selling, General and Administrative Expenses


Three Months Ended
October 31,		Nine Months Ended
October 31,
(in thousands)2023202220232022
GAAP selling, general and administrative expenses$87,879 $93,757 $297,532 $302,344 
As a percentage of GAAP revenue40.2 %41.6 %46.1 %45.4 %
Stock-based compensation expenses(12,068)(15,037)(38,563)(49,346)
Acquisition benefit (expenses), net207 (1,172)(5,671)(2,661)
Restructuring expenses(483)(1,324)(3,337)(7,807)
Separation expenses(240)(291)(605)(1,142)
Accelerated lease costs(98)(725)(5,262)(7,831)
IT facilities and infrastructure realignment(1,937)(1,095)(16,816)(3,526)
Impairment charges— — — (1,799)
Other adjustments(1)(900)(212)(2,511)
Non-GAAP selling, general and administrative expenses$73,259 $73,213 $227,066 $225,721 
As a percentage of non-GAAP revenue33.5 %32.5 %35.1 %33.8 %

Operating Income and Operating Margin
Three Months Ended
October 31,		Nine Months Ended
October 31,
(in thousands)2023202220232022
GAAP operating income$26,718 $21,678 $27,978 $23,686 
GAAP operating margin12.2 %9.6 %4.3 %3.6 %
Revenue adjustments120 423 989 2,498 
Amortization of acquired technology1,609 3,550 5,511 10,742 
Amortization of other acquired intangible assets6,328 6,420 19,028 19,887 
Stock-based compensation expenses16,186 19,899 50,286 63,962 
Acquisition (benefit) expenses, net(156)1,172 6,120 3,035 
Restructuring expenses482 2,426 5,100 9,422 
Separation expenses240 291 605 1,142 
Accelerated lease costs98 725 5,262 7,831 
IT facilities and infrastructure realignment1,937 1,095 18,464 3,526 
Impairment charges— — — 1,799 
Other adjustments1 917 212 2,578 
Non-GAAP operating income$53,563 $58,596 $139,555 $150,108 
Non-GAAP operating margin24.5 %26.0 %21.6 %22.5 %


Other Expense, Net
Three Months Ended
October 31,		Nine Months Ended
October 31,
(in thousands)2023202220232022
GAAP other expense, net$(900)$(57)$(2,495)$(583)
Losses on early retirements of debt— — 237 — 
Acquisition benefit, net— — (156)— 
Separation expenses(113)— (232)— 
Non-GAAP other expense, net(1)
$(1,013)$(57)$(2,646)$(583)


Provision for Income Taxes


Three Months Ended
October 31,		Nine Months Ended
October 31,
(in thousands)2023202220232022
GAAP provision for income taxes$12,953 $17,395 $14,772 $20,539 
GAAP effective income tax rate50.2 %80.5 %58.0 %88.9 %
Non-GAAP income tax adjustments(8,640)(11,296)(2,786)(5,204)
Non-GAAP provision for income taxes$4,313 $6,099 $11,986 $15,335 
Non-GAAP effective income tax rate8.2 %10.4 %8.8 %10.3 %

Net Income (Loss) Attributable to Verint Systems Inc. Common Shares
Three Months Ended
October 31,		Nine Months Ended
October 31,
(in thousands)2023202220232022
GAAP net income (loss) attributable to Verint Systems Inc. common shares$7,412 $(1,124)$(5,693)$(13,650)
Revenue adjustments120 423 989 2,498 
Amortization of acquired technology1,609 3,550 5,511 10,742 
Amortization of other acquired intangible assets6,328 6,420 19,028 19,887 
Stock-based compensation expenses16,186 19,899 50,286 63,962 
Losses on early retirements of debt— — 237 — 
Acquisition (benefit) expenses, net(156)1,172 5,964 3,035 
Restructuring expenses482 2,425 5,100 9,422 
Separation expenses127 291 373 1,142 
Accelerated lease costs98 725 5,262 7,831 
IT facilities and infrastructure realignment1,937 1,095 18,464 3,526 
Impairment charges— — — 1,799 
Other adjustments1 917 212 2,578 
Non-GAAP tax adjustments8,640 11,296 2,786 5,204 
Dividends, reversed due to assumed conversion of preferred stock(3)
5,200 5,200 15,600 15,600 
Total adjustments40,572 53,413 129,812 147,226 
Non-GAAP net income attributable to Verint Systems Inc. common shares$47,984 $52,289 $124,119 $133,576 

Diluted Net Income (Loss) Per Common Share Attributable to Verint Systems Inc.
Three Months Ended
October 31,		Nine Months Ended
October 31,
(in thousands, except per share data)2023202220232022
GAAP diluted net income (loss) per common share attributable to Verint Systems Inc.$0.12 $(0.02)$(0.09)$(0.21)
Non-GAAP diluted net income per common share attributable to Verint Systems Inc.(3)
$0.65 $0.69 $1.67 $1.77 
GAAP weighted-average shares used in computing diluted net income (loss) per common share attributable to Verint Systems Inc.64,144 65,583 64,411 65,161 
Additional weighted-average shares applicable to non-GAAP diluted net income per common share attributable to Verint Systems Inc.9,478 10,004 9,802 10,364 
Non-GAAP diluted weighted-average shares used in computing net income per common share attributable to Verint Systems Inc.(3)
73,622 75,587 74,213 75,525 

GAAP Net Income to Adjusted EBITDA


Three Months Ended
October 31,		Nine Months Ended
October 31,
(in thousands)2023202220232022
GAAP net income$12,865 $4,226 $10,711 $2,564 
As a percentage of GAAP revenue5.9 %1.9 %1.7 %0.4 %
Provision for income taxes12,953 17,395 14,772 20,539 
Other expense, net900 57 2,495 583 
Depreciation and amortization(2)
13,874 16,158 55,394 50,199 
Revenue adjustments120 423 989 2,498 
Stock-based compensation expenses16,186 19,899 50,286 63,962 
Acquisition (benefit) expenses, net(156)1,172 6,120 3,035 
Restructuring expenses476 2,348 5,007 9,090 
Separation expenses240 291 605 1,142 
Accelerated lease costs98 725 5,262 7,831 
IT facilities and infrastructure realignment1,679 1,095 6,657 3,526 
Impairment charges— — — 1,799 
Other adjustments1 917 212 2,578 
Adjusted EBITDA$59,236 $64,706 $158,510 $169,346 
As a percentage of non-GAAP revenue27.1 %28.7 %24.5 %25.3 %

Gross Debt to Net Debt
(in thousands)October 31,
 2023		January 31,
 2023
Long-term debt$410,461 $408,908 
Unamortized debt discounts and issuance costs4,539 6,092 
Gross debt415,000 415,000 
Less:
Cash and cash equivalents209,647 282,099 
Restricted cash and cash equivalents, and restricted bank time deposits1,763 300 
Short-term investments684 697 
Net debt, excluding long-term restricted cash, cash equivalents, time deposits, and investments202,906 131,904 
Long-term restricted cash, cash equivalents, time deposits, and investments175 287 
Net debt, including long-term restricted cash, cash equivalents, time deposits, and investments$202,731 $131,617 

(1) For the three months ended October 31, 2023, non-GAAP other expense, net of $1.0 million was primarily comprised of interest and other expense.

(2) Adjusted for financing fee amortization.

(3) EPS calculation includes the more dilutive of either preferred stock dividends or conversion of preferred stock shares. Conversion of the outstanding preferred shares was more dilutive in the three and nine months ended October 31, 2023 and 2022.


Table 4
VERINT SYSTEMS INC. AND SUBSIDIARIES
GAAP to Non-GAAP Recurring and Nonrecurring Revenue and Gross Profit
(Unaudited)

Recurring and Nonrecurring Revenue
Three Months Ended
October 31,		Nine Months Ended
October 31,
(in thousands)2023202220232022
Recurring revenue - GAAP$161,117 $174,222 $488,555 $500,029 
SaaS revenue - GAAP115,651 115,787 346,240 313,071 
Optional managed services revenue - GAAP11,842 15,436 36,872 47,127 
Support revenue - GAAP33,624 42,999 105,443 139,831 
Nonrecurring revenue - GAAP57,430 50,971 156,723 165,969 
Perpetual revenue - GAAP24,557 24,425 74,103 88,473 
Professional services revenue - GAAP32,873 26,546 82,620 77,496 
Total revenue - GAAP218,547 225,193 645,278 665,998 
Estimated recurring revenue adjustments120 423 989 2,498 
Estimated SaaS revenue adjustments117 374 960 2,323 
Estimated optional managed services revenue 3 49 29 161 
Estimated support revenue adjustments— — — 14 
Estimated nonrecurring revenue adjustments— — — — 
Estimated perpetual revenue adjustments— — — — 
Estimated professional services revenue adjustments— — — — 
Total estimated revenue adjustments120 423 989 2,498 
Recurring revenue - non-GAAP161,237 174,645 489,544 502,527 
SaaS revenue - non-GAAP115,768 116,161 347,200 315,394 
Optional managed services revenue - non-GAAP11,845 15,485 36,901 47,288 
Support revenue - non-GAAP33,624 42,999 105,443 139,845 
Nonrecurring revenue - non-GAAP57,430 50,971 156,723 165,969 
Perpetual revenue - non-GAAP24,557 24,425 74,103 88,473 
Professional services revenue - non-GAAP32,873 26,546 82,620 77,496 
Total revenue - non-GAAP$218,667 $225,616 $646,267 $668,496 

Recurring Gross Profit


Three Months Ended
October 31,		Nine Months Ended
October 31,
(in thousands)2023202220232022
GAAP recurring revenue$161,117 $174,222 $488,555 $500,029 
GAAP recurring cost of revenues38,883 38,834 118,093 120,714 
GAAP recurring gross profit122,234 135,388 370,462 379,315 
GAAP recurring gross margin75.9 %77.7 %75.8 %75.9 %
Recurring revenue adjustments120 423 989 2,498 
Recurring stock-based compensation expenses523 729 1,505 2,187 
Recurring acquisition expenses, net31 — 353 22 
Recurring restructuring (benefit) expenses, net(14)459 933 588 
Non-GAAP recurring gross profit$122,894 $136,999 $374,242 $384,610 
Non-GAAP recurring gross margin76.2 %78.4 %76.4 %76.5 %

Nonrecurring Gross Profit
Three Months Ended
October 31,		Nine Months Ended
October 31,
(in thousands)2023202220232022
GAAP nonrecurring revenue$57,430 $50,971 $156,723 $165,969 
GAAP nonrecurring cost of revenues25,046 28,013 79,213 90,781 
GAAP nonrecurring gross profit32,384 22,958 77,510 75,188 
GAAP nonrecurring gross margin56.4 %45.0 %49.5 %45.3 %
Nonrecurring revenue adjustments— — — — 
Nonrecurring stock-based compensation expenses570 600 1,400 2,058 
Nonrecurring acquisition expenses, net— — — 154 
Nonrecurring restructuring expenses12 134 514 381 
Non-GAAP nonrecurring gross profit$32,966 $23,692 $79,424 $77,781 
Non-GAAP nonrecurring gross margin57.4 %46.5 %50.7 %46.9 %



Table 5
VERINT SYSTEMS INC. AND SUBSIDIARIES
Calculation of Change in Revenue on a Constant Currency Basis
(Unaudited)


GAAP Revenue(2)

Non-GAAP Revenue(3)
(in thousands, except percentages)Three Months
Ended		Nine Months
Ended
Three Months
 Ended
Nine Months
Ended
Revenue for the three and nine months ended October 31, 2022$225,193 $665,998 $225,616 $668,496 
Revenue for the three and nine months ended October 31, 2023$218,547 $645,278 $218,667 $646,267 
Revenue for the three and nine months ended October 31, 2023 at constant currency(1)
$217,000 $646,000 $217,000 $647,000 
Reported period-over-period revenue change(3.0)%(3.1)%(3.1)%(3.3)%
% impact from change in foreign currency exchange rates(0.6)%0.1 %(0.7)%0.1 %
Constant currency period-over-period revenue change(3.6)%(3.0)%(3.8)%(3.2)%


(1) Revenue for the three and nine months ended October 31, 2023 at constant currency is calculated by translating current-period GAAP or non-GAAP foreign currency revenue (as applicable) into U.S. dollars using average foreign currency exchange rates for the three and nine months ended October 31, 2022 rather than actual current-period foreign currency exchange rates.

(2) GAAP revenue denominated in non-U.S. dollars was 20% and 19% of our total GAAP revenue for the three months ended October 31, 2023 and 2022, respectively. GAAP revenue denominated in non-U.S. dollars was 21% of our total GAAP revenue for each of the nine months ended October 31, 2023 and 2022. Our combined GAAP cost of revenue and operating expenses denominated in non-U.S. dollars was 32% and 29% of our total combined GAAP cost of revenue and operating expenses for the three months ended October 31, 2023 and 2022, respectively. Our combined GAAP cost of revenue and operating expenses denominated in non-U.S. dollars was 31% and 30% of our total combined GAAP cost of revenue and operating expenses for the nine months ended October 31, 2023 and 2022, respectively.

(3) Non-GAAP revenue denominated in non-U.S. dollars was 20% and 19% of our total non-GAAP revenue for the three months ended October 31, 2023 and 2022, respectively. Non-GAAP revenue denominated in non-U.S. dollars was 21% of our total non-GAAP revenue for each of the nine months ended October 31, 2023 and 2022. Our combined Non-GAAP cost of revenue and operating expenses denominated in non-U.S. dollars was 36% and 33% of our total combined Non-GAAP cost of revenue and operating expenses for the three months ended October 31, 2023 and 2022, respectively. Our combined Non-GAAP cost of revenue and operating expenses denominated in non-U.S. dollars was 35% and 34% of our total combined Non-GAAP cost of revenue and operating expenses for the nine months ended October 31, 2023 and 2022, respectively.


For further information see "Supplemental Information About Constant Currency" at the end of this press release.







Table 6
VERINT SYSTEMS INC. AND SUBSIDIARIES
Condensed Consolidated Balance Sheets
(Unaudited)
October 31,January 31,
(in thousands, except share and per share data)20232023
Assets  
Current Assets:  
Cash and cash equivalents$209,647 $282,099 
Short-term investments684 697 
Accounts receivable, net of allowance for credit losses of $1.5 million and $1.3 million, respectively
173,592 188,414 
Contract assets, net50,338 60,444 
Inventories13,042 12,628 
Prepaid expenses and other current assets56,316 75,374 
  Total current assets503,619 619,656 
Property and equipment, net47,556 64,810 
Operating lease right-of-use assets28,533 37,649 
Goodwill1,343,449 1,347,213 
Intangible assets, net64,219 85,272 
Other assets147,258 159,001 
  Total assets$2,134,634 $2,313,601 
Liabilities, Temporary Equity, and Stockholders' Equity  
Current Liabilities:  
Accounts payable$22,172 $43,631 
Accrued expenses and other current liabilities110,261 155,944 
Contract liabilities237,668 271,476 
  Total current liabilities370,101 471,051 
Long-term debt410,461 408,908 
Long-term contract liabilities12,067 18,047 
Operating lease liabilities31,466 40,744 
Other liabilities68,853 80,381 
  Total liabilities892,948 1,019,131 
Commitments and Contingencies
Temporary Equity:
Preferred Stock — $0.001 par value; authorized 2,207,000 shares
Series A Preferred Stock; 200,000 shares issued and outstanding at October 31, 2023 and January 31, 2023, respectively; aggregate liquidation preference and redemption value of $203,467 and $206,067 at October 31, 2023 and January 31, 2023, respectively.
200,628 200,628 
Series B Preferred Stock; 200,000 shares issued and outstanding at October 31, 2023 and January 31, 2023, respectively; aggregate liquidation preference and redemption value of $203,467 and $206,067 at October 31, 2023 and January 31, 2023, respectively.
235,693 235,693 
  Total temporary equity436,321 436,321 
Stockholders' Equity:
Common stock — $0.001 par value; authorized 240,000,000 shares; issued 63,465,000 and 65,404,000 shares; outstanding 63,465,000 and 65,404,000 shares at October 31, 2023 and January 31, 2023, respectively.
63 65 
Additional paid-in capital999,634 1,055,157 
Accumulated deficit(35,426)(45,333)
Accumulated other comprehensive loss(161,579)(154,099)
Total Verint Systems Inc. stockholders' equity802,692 855,790 
Noncontrolling interest2,673 2,359 
  Total stockholders' equity805,365 858,149 
  Total liabilities, temporary equity, and stockholders' equity$2,134,634 $2,313,601 


Table 7
VERINT SYSTEMS INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Cash Flows
(Unaudited)
 Nine Months Ended
October 31,
(in thousands) 20232022
Cash flows from operating activities:  
Net income$10,711 $2,564 
Adjustments to reconcile net income to net cash provided by operating activities:  
Depreciation and amortization57,287 52,166 
Stock-based compensation, excluding cash-settled awards50,286 63,957 
Losses on early retirements of debt237 — 
Other, net5,676 8,072 
Changes in operating assets and liabilities, net of effects of business combinations and divestitures:  
Accounts receivable13,545 22,079 
Contract assets9,943 (8,256)
Inventories(415)(5,452)
Prepaid expenses and other assets32,609 (16,274)
Accounts payable and accrued expenses(50,080)(9,542)
Contract liabilities(39,299)(38,513)
Deferred income taxes1,788 (1,489)
Other, net(10,609)(701)
Net cash provided by operating activities81,679 68,611 
Cash flows from investing activities:
Cash paid for asset acquisitions and business combinations, including adjustments, net of cash acquired(3,173)(3,828)
Purchases of property and equipment(12,839)(17,920)
Maturities and sales of investments3,168 250 
Purchases of investments(3,180)(10,168)
Cash paid for capitalized software development costs(7,109)(5,703)
Change in restricted bank time deposits, and other investing activities, net(1,200)(107)
Net cash used in investing activities(24,333)(37,476)
Cash flows from financing activities:
Proceeds from borrowings100,000 — 
Repayments of borrowings and other financing obligations(102,430)(3,025)
Payments of debt-related costs(232)(224)
Purchases of treasury stock and common stock for retirement(99,263)(106,137)
Preferred stock dividend payments(20,800)(20,800)
Distributions paid to noncontrolling interest(490)(637)
Payments of contingent consideration for business combinations (financing portion), and other financing activities(4,182)(3,518)
Net cash used in financing activities(127,397)(134,341)
Foreign currency effects on cash, cash equivalents, restricted cash, and restricted cash equivalents(700)(3,510)
Net decrease in cash, cash equivalents, restricted cash, and restricted cash equivalents(70,751)(106,716)
Cash, cash equivalents, restricted cash, and restricted cash equivalents, beginning of period282,161 358,868 
Cash, cash equivalents, restricted cash, and restricted cash equivalents, end of period$211,410 $252,152 
Reconciliation of cash, cash equivalents, restricted cash, and restricted cash equivalents at end of period to the condensed consolidated balance sheets:
Cash and cash equivalents$209,647 $252,073 
Restricted cash and cash equivalents included in prepaid expenses and other current assets1,763 22 
Restricted cash and cash equivalents included in other assets— 57 
Total cash, cash equivalents, restricted cash, and restricted cash equivalents$211,410 $252,152 


Verint Systems Inc. and Subsidiaries
Supplemental Information About Non-GAAP Financial Measures and Operating Metrics

This press release contains non-GAAP financial measures, consisting of non-GAAP revenue, non-GAAP recurring revenue, non-GAAP nonrecurring revenue, non-GAAP perpetual revenue, non-GAAP support revenue, non-GAAP professional services revenue, non-GAAP SaaS revenue, non-GAAP bundled SaaS revenue, non-GAAP unbundled SaaS revenue, non-GAAP optional managed services revenue, non-GAAP recurring gross profit and gross margins, non-GAAP nonrecurring gross profit and gross margins, non-GAAP gross profit and gross margins, non-GAAP research and development, net, non-GAAP selling, general and administrative expenses, non-GAAP operating income and operating margins, non-GAAP other income (expense), net, non-GAAP provision for (benefit from) income taxes and non-GAAP effective income tax rate, non-GAAP net income (loss) attributable to Verint Systems Inc. common shares, non-GAAP diluted net income (loss) per common share attributable to Verint Systems Inc., adjusted EBITDA and adjusted EBITDA as a percentage of non-GAAP revenue, net debt and constant currency measures. The tables above include a reconciliation of each non-GAAP financial measure for completed periods presented in this press release to the most directly comparable GAAP financial measure.

We believe these non-GAAP financial measures, used in conjunction with the corresponding GAAP measures, provide investors with useful supplemental information about the financial performance of our business by:
•facilitating the comparison of our financial results and business trends between periods, by excluding certain items that either can vary significantly in amount and frequency, are based upon subjective assumptions, or in certain cases are unplanned for or difficult to forecast,
•facilitating the comparison of our financial results and business trends with other technology companies who publish similar non-GAAP measures, and
•allowing investors to see and understand key supplementary metrics used by our management to run our business, including for budgeting and forecasting, resource allocation, and compensation matters.

We also make these non-GAAP financial measures available because a number of our investors have informed us that they find this supplemental information useful.

Non-GAAP financial measures should not be considered in isolation, as substitutes for, or superior to, comparable GAAP financial measures. The non-GAAP financial measures we present have limitations in that they do not reflect all of the amounts associated with our results of operations as determined in accordance with GAAP, and these non-GAAP financial measures should only be used to evaluate our results of operations in conjunction with the corresponding GAAP financial measures. These non-GAAP financial measures do not represent discretionary cash available to us to invest in the growth of our business, and we may in the future incur expenses similar to or in addition to the adjustments made in these non-GAAP financial measures. Other companies may calculate similar non-GAAP financial measures differently than we do, limiting their usefulness as comparative measures.

Our non-GAAP financial measures are calculated by making the following adjustments to our GAAP financial measures:

Revenue adjustments. For acquisitions completed prior to February 1, 2023, we exclude from our non-GAAP revenue the impact of fair value adjustments required under previous GAAP guidance relating to SaaS services, optional managed services and customer support contracts acquired in a business acquisition, which would have otherwise been recognized on a stand-alone basis. Beginning February 1, 2023, we adopted accounting guidance which eliminates the fair value provision that resulted in the accounting adjustment on a prospective basis. We believe that it is useful for investors to understand the total amount of revenue that we and the acquired company would have recognized on a stand-alone basis under GAAP, absent the accounting adjustment associated with the business acquisition under prior accounting guidance. Our non-GAAP revenue also reflects certain adjustments from aligning an acquired company’s revenue recognition policies to our policies. We believe that our non-GAAP revenue measure helps management and investors understand our revenue trends and serves as a useful measure of ongoing business performance.

Amortization of acquired technology and other acquired intangible assets. When we acquire an entity, we are required under GAAP to record the fair values of the intangible assets of the acquired entity and amortize those assets over their useful lives. We exclude the amortization of acquired intangible assets, including acquired technology, from our non-GAAP financial measures because they are inconsistent in amount and frequency and are significantly impacted by the timing and size of acquisitions. We also exclude these amounts to provide easier comparability of pre- and post-acquisition operating results.



Stock-based compensation expenses. We exclude stock-based compensation expenses related to restricted stock unit and performance stock unit awards, stock bonus programs, bonus share programs, and other stock-based awards from our non-GAAP financial measures. We evaluate our performance both with and without these measures because stock-based compensation is typically a non-cash expense and can vary significantly over time based on the timing, size and nature of awards granted, and is influenced in part by certain factors which are generally beyond our control, such as the volatility of the price of our common stock. In addition, measurement of stock-based compensation is subject to varying valuation methodologies and subjective assumptions, and therefore we believe that excluding stock-based compensation from our non-GAAP financial measures allows for meaningful comparisons of our current operating results to our historical operating results and to other companies in our industry.

Losses on early retirements of debt. We exclude from our non-GAAP financial measures losses on early retirements of debt attributable to refinancing or repaying our debt because we believe they are not reflective of our ongoing operations.

Acquisition expenses (benefit), net. In connection with acquisition activity (including with respect to acquisitions that are not consummated), we incur expenses (benefits), including legal, accounting, and other professional fees, integration costs, changes in the fair value of contingent consideration obligations, and other costs. Integration costs may consist of information technology expenses as systems are integrated across the combined entity, consulting expenses, marketing expenses, and professional fees, as well as non-cash charges to write-off or impair the value of redundant assets. We exclude these expenses from our non-GAAP financial measures because they are unpredictable, can vary based on the size and complexity of each transaction, and are unrelated to our continuing operations or to the continuing operations of the acquired businesses.

Restructuring expenses (benefit). We exclude restructuring expenses (benefit) from our non-GAAP financial measures, which include employee termination costs, facility exit costs (except as included in accelerated lease costs and IT facilities and infrastructure realignment described below), certain professional fees, asset impairment charges (except as included in acquisition or IT facilities and infrastructure realignment), and other costs directly associated with resource realignments incurred in reaction to changing strategies or business conditions. All of these costs can vary significantly in amount and frequency based on the nature of the actions as well as the changing needs of our business and we believe that excluding them provides easier comparability of pre- and post-restructuring operating results.

Separation expenses. On February 1, 2021, we completed the spin-off of our former Cyber Intelligence Solutions business. We exclude from our non-GAAP financial measures expenses incurred in connection with the spin-off, including third-party advisory, accounting, legal, tax, consulting, and other similar services related to the separation as well as costs associated with the operational separation of the two businesses, including those related to human resources, brand management, real estate, and information technology (which are included in Separation expenses to the extent not capitalized). Separation expenses also include incremental cash income taxes related to the reorganization of legal entities and operations in order to effect the separation and other expense adjustments associated with a tax-related indemnification asset as a result of the spin-off. These costs are incremental to our normal operating expenses and are being incurred solely as a result of the separation transaction. Accordingly, we are excluding these separation expenses from our non-GAAP financial measures in order to evaluate our performance on a comparable basis.

Accelerated lease costs. We exclude from our non-GAAP financial measures accelerated facility costs and associated accelerated lease expenses, including losses on terminations, due to the early termination or abandonment of certain office leases as a result of our move to a hybrid work model because these charges are not reflective of our ongoing business and operating results.

IT facilities and infrastructure realignment. We exclude from our non-GAAP financial measures nonrecurring IT facilities and infrastructure realignment costs and other IT charges associated with modifying the workplace, including consolidating and/or migrating data centers and labs to the cloud, simplifying the corporate network, and one-time costs for implementing collaboration tools to enable our work from anywhere strategy, as well as asset impairment charges, accelerated depreciation and IT facility exit costs.

Impairment charges and other adjustments. We exclude from our non-GAAP financial measures asset impairment charges (other than those already included within restructuring, acquisition, or IT facilities and realignment activity), rent expense for redundant facilities, gains or losses on sales of property, gains or losses on settlements of certain legal matters, and certain professional fees unrelated to our ongoing operations, all of which are unusual in nature and can vary significantly in amount and frequency.



Non-GAAP income tax adjustments. We exclude from our non-GAAP measures of net income attributable to Verint Systems Inc., our GAAP provision for (benefit from) income taxes and instead include a non-GAAP provision for income taxes, determined by applying a non-GAAP effective income tax rate to our income before provision for income taxes, as adjusted for the non-GAAP items described above. The non-GAAP effective income tax rate is generally based upon the income taxes we expect to pay in the reporting year. Our GAAP effective income tax rate can vary significantly from year to year as a result of tax law changes, settlements with tax authorities, changes in the geographic mix of earnings including acquisition activity, changes in the projected realizability of deferred tax assets, and other unusual or period-specific events, all of which can vary in size and frequency. We believe that our non-GAAP effective income tax rate removes much of this variability and facilitates meaningful comparisons of operating results across periods. Our non-GAAP effective income tax rate for the year ending January 31, 2024 is currently approximately 9% and was 9% for the year ended January 31, 2023. We evaluate our non-GAAP effective income tax rate on an ongoing basis, and it can change from time to time. Our non-GAAP income tax rate can differ materially from our GAAP effective income tax rate.

Revenue Metrics and Operating Metrics

Recurring revenue, on both a GAAP and non-GAAP basis, is the portion of our revenue that we believe is likely to be renewed in the future, and primarily consists of SaaS revenue, optional managed services revenue and initial and renewal post contract support.

Nonrecurring revenue, on both a GAAP and non-GAAP basis, primarily consists of our perpetual licenses, consulting, implementation and installation services, hardware, training and patent license royalties.

SaaS revenue includes bundled SaaS, software with standard managed services and unbundled SaaS (including associated support) that we account for as term licenses where managed services are purchased separately.

Optional Managed Services are recurring services that are intended to improve our customers' operations and reduce expenses.

Percentage of software revenue that is recurring revenue is calculated as the sum of SaaS revenue, optional managed services revenue and support revenue as a percentage of total SaaS revenue, optional managed services revenue, support revenue, and perpetual revenue.

New SaaS Annual Contract Value (ACV) includes the annualized contract value of all new SaaS contracts received within the period; new unbundled SaaS contracts only include the license portion of those orders. In cases where SaaS is offered to partners through usage-based contracts, we include the incremental value of usage contracts over a rolling four quarters. Orders are only included in New SaaS ACV with a completed customer contract signed by both parties before the end of the period.

SaaS Annual Recurring Revenue (SaaS ARR) represents the annualized quarterly run-rate value of active or signed SaaS contracts as of the end of a period. For unbundled SaaS contracts, the amount included in SaaS ARR is generally consistent with the amount that we invoice the customer annually for the term-based license transaction. We use SaaS ARR to identify the annual recurring value of customer contracts at the end of a reporting period and to monitor the growth of our recurring business as we shift to SaaS. SaaS ARR reduces fluctuations due to seasonality, contract term, and the sales mix of subscriptions for bundled SaaS and unbundled SaaS. SaaS ARR should be viewed independently of revenue, and does not represent our revenue under ASC 606 on an annualized basis, as it is an operating metric that is impacted by contract start and end dates and renewal rates. SaaS ARR is not intended to be a replacement for forecasts of SaaS revenue.

Adjusted EBITDA

Adjusted EBITDA is a non-GAAP measure defined as net income (loss) before interest expense, interest income, income taxes, depreciation expense, amortization expense, stock-based compensation expenses, revenue adjustments, restructuring expenses, acquisition expenses, separation expenses, accelerated lease costs, IT facilities and infrastructure realignment, and other expenses excluded from our non-GAAP financial measures as described above. We believe that adjusted EBITDA is also commonly used by investors to evaluate operating performance between companies because it helps reduce variability caused by differences in capital structures, income taxes, stock-based compensation expenses, accounting policies, and depreciation and amortization


policies. Adjusted EBITDA is also used by credit rating agencies, lenders, and other parties to evaluate our creditworthiness.

Net Debt

Net Debt is a non-GAAP measure defined as the sum of long-term and short-term debt on our consolidated balance sheet, excluding unamortized discounts and issuance costs, less the sum of cash and cash equivalents, restricted cash, restricted cash equivalents, restricted bank time deposits, and restricted investments (including long-term portions), and short-term investments. We use this non-GAAP financial measure to help evaluate our capital structure, financial leverage, and our ability to reduce debt and to fund investing and financing activities and believe that it provides useful information to investors.

Supplemental Information About Constant Currency

Because we operate on a global basis and transact business in many currencies, fluctuations in foreign currency exchange rates can affect our consolidated U.S. dollar operating results. To facilitate the assessment of our performance excluding the effect of foreign currency exchange rate fluctuations, we calculate our GAAP and non-GAAP revenue, GAAP and non-GAAP recurring revenue, GAAP and non-GAAP SaaS revenue, cost of revenue, and operating expenses on both an as-reported basis and a constant currency basis, allowing for comparison of results between periods as if foreign currency exchange rates had remained constant. We perform our constant currency calculations by translating current-period results into U.S. dollars using prior-period average foreign currency exchange rates or hedge rates, as applicable, rather than current period exchange rates. We believe that constant currency measures, which exclude the impact of changes in foreign currency exchange rates, facilitate the assessment of underlying business trends.

Unless otherwise indicated, our financial outlook, which is provided on a non-GAAP basis, reflects foreign currency exchange rates approximately consistent with rates in effect when the outlook is provided.

We also incur foreign exchange gains and losses resulting from the revaluation and settlement of monetary assets and liabilities that are denominated in currencies other than the entity’s functional currency. Our financial outlook for diluted earnings per share includes net foreign exchange gains or losses incurred to date, if any, but does not include potential future gains or losses.


v3.23.3
DOCUMENT AND ENTITY INFORMATION
Dec. 06, 2023
Document and Entity Information [Abstract]  
Document Type 8-K
Document Period End Date Dec. 06, 2023
Entity Registrant Name Verint Systems Inc
Entity Incorporation, State or Country Code DE
Entity File Number 001-34807
Entity Tax Identification Number 11-3200514
Entity Address, Address Line One 175 Broadhollow Road
Entity Address, City or Town Melville,
Entity Address, State or Province NY
Entity Address, Postal Zip Code 11747
City Area Code (631)
Local Phone Number 962-9600
Written Communications false
Soliciting Material false
Pre-commencement Tender Offer false
Pre-commencement Issuer Tender Offer false
Title of 12(b) Security Common Stock, $.001 par value per share
Trading Symbol VRNT
Security Exchange Name NASDAQ
Entity Emerging Growth Company false
Entity Central Index Key 0001166388
Amendment Flag false
Verint Systems (NASDAQ:VRNT)
Graphique Historique de l'Action
De Avr 2024 à Mai 2024 Plus de graphiques de la Bourse Verint Systems
Verint Systems (NASDAQ:VRNT)
Graphique Historique de l'Action
De Mai 2023 à Mai 2024 Plus de graphiques de la Bourse Verint Systems