Verint Announces Strong Fourth Quarter and Annual Results and Raises Guidance
Q4 Results Ahead of Guidance; Enter FYE 2023 with Strong Cloud Momentum
Raises FYE 2023 Outlook for Revenue, Cloud Revenue Growth and Diluted EPS
MELVILLE, N.Y.–(BUSINESS WIRE)–Verint® (Nasdaq: VRNT), The Customer Engagement Company™, today announced results for the three months and year ended January 31, 2022 (FYE 2022). Revenue for the three months ended January 31, 2022 was $234 million on a GAAP basis representing 4% year-over-year growth and $236 million on a non-GAAP basis also representing 4% year-over-year growth. Revenue for the year ended January 31, 2022 was $875 million on a GAAP basis representing 5% year-over-year growth and $881 million on a non-GAAP basis also representing 5% year-over-year growth. For the three months ended January 31, 2022, net loss per share was ($0.15) on a GAAP basis and diluted EPS was $0.57 on a non-GAAP basis. For the year ended January 31, 2022, net loss per share was ($0.07) on a GAAP basis and diluted EPS was $2.28 on a non-GAAP basis.
“The cloud momentum we experienced throughout last year continued into the fourth quarter driving our non-GAAP revenue and diluted EPS results ahead of our guidance. We also crossed the mid-point of our cloud transition and 61% of our new perpetual license equivalent (PLE) bookings came from SaaS in the fourth quarter. Looking ahead, we expect our cloud momentum to continue and are raising FYE 2023 guidance for revenue, cloud revenue growth and diluted EPS. We believe our revised outlook reflects improved visibility and the strength of our open cloud platform and AI differentiation,” said Dan Bodner, Verint CEO.
Bodner continued, “A year ago, around the time of the spin-off of our cyber intelligence solutions business, we discussed a new three-year plan targeting 30% compound annual cloud revenue growth and higher total revenue growth rates each year. I am pleased to report that we performed ahead of this plan in FYE 2022, the first year of the plan. We are also tracking ahead of our targets for the second and third years of the plan. As a result, we are now raising our outlook for cloud revenue growth and targeting total revenue growth to accelerate to 7% this year and to 10% next year.”
Fourth Quarter Highlights
- Non-GAAP Revenue and Diluted EPS: Ahead of our guidance
- Strong Cloud Revenue Growth: Cloud revenue grew 36% (GAAP) and 35% (non-GAAP) year-over-year
- Favorable Mix Shift: 61% of New PLE bookings came from SaaS
- Improving Visibility: Finished the year with record backlog of $722 million
Full Year FYE 2022 Highlights
- Non-GAAP Revenue and Diluted EPS: Ahead of our initial FYE 2022 guidance
- Strong Cloud Revenue Growth: Cloud revenue grew 40% (GAAP) and 37% (non-GAAP) year-over-year
- Strong Cloud Booking Metrics: New PLE bookings and mix, New SaaS ACV bookings
FYE 2023 Outlook
We are increasing our non-GAAP annual outlook for the year ending January 31, 2023, as follows:
- Revenue: $940 million +/- 2%, reflecting 7% year-over-year growth
- Cloud Revenue Growth: 30% to 32% year-over-year
- Diluted EPS: $2.50 at the midpoint of our revenue guidance, reflecting 10% year-year-year growth
Our non-GAAP outlook for the three months ending April 30, 2022 and year ending January 31, 2023 excludes the following GAAP measures which we are able to quantify with reasonable certainty:
- Amortization of intangible assets of approximately $11 million and $41 million, for the three months ending April 30, 2022 and year ending January 31, 2023, respectively.
Our non-GAAP outlook for the three months ending April 30, 2022 and year ending January 31, 2023 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 $3 million, and $2 million and $4 million, for the three months ending April 30, 2022 and year ending January 31, 2023, respectively.
- Stock-based compensation expenses are expected to be between approximately $17 million and $19 million, and $68 million and $74 million, for the three months ending April 30, 2022 and year ending January 31, 2023, respectively, assuming market prices for our common stock approximately consistent with current levels.
- Costs associated with modifying our workplace in response to the spin-off and COVID-19 work environment, including assumed lease terminations and abandonments, IT infrastructure costs, and other charges are expected to be between approximately $7 million and $9 million, and $20 million and $25 million, for the three months ending April 30, 2022 and year ending January 31, 2023, respectively.
Our non-GAAP FYE 2024 targets exclude any GAAP revenue adjustments.
Our non-GAAP guidance and targets do 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 and targets, 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 months and years ended January 31, 2022 and 2021 for the GAAP measures excluded from our non-GAAP outlook appear in Tables 2, 3 and 4 of this press release.
Conference Call Information
We will conduct a conference call today at 4:30 p.m. ET to discuss our results for the three months and year ended January 31, 2022, outlook, and long-term targets. An online, real-time webcast of the conference call and webcast slides will be available on our website at www.verint.com. The webcast slides will be available on our website until at least April 30, 2022. The conference call can also be accessed live via telephone at 1-844-309-0615 (United States and Canada) and 1-661-378-9462 (international) and the passcode is 5081548. Please dial in 5-10 minutes prior to the scheduled start time.
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 – including over 85 of the Fortune 100 companies – build enduring customer relationships by connecting work, data, and experiences across the enterprise. The Verint Customer Engagement portfolio draws on the latest advancements in AI and analytics, an open cloud architecture, and The Science of Customer Engagement™ to help customers close The Engagement Capacity Gap™.
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, inflation, economic instability, political unrest, armed conflicts (such as the March 2022 Russian invasion of Ukraine), natural disasters, climate change or other environmental issues, or outbreaks of disease, such as the COVID-19 pandemic, as well as the resulting impact on information technology spending by enterprises or government customers, on our business; risks that our customers delay, cancel, or refrain from placing orders, refrain from renewing subscriptions or service contracts, or are unable to honor contractual commitments or payment obligations due to liquidity issues or other challenges in their budgets and business; risks that restrictions resulting from the COVID-19 pandemic or actions taken in response to the pandemic adversely impact our operations or our ability to fulfill orders, complete implementations, or recognize revenue; risks associated with our ability to keep pace with technological advances and challenges and evolving industry standards; 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 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 have greater resources than us, including in areas such as sales and marketing, branding, technological innovation and development, recruiting and retention, and growth; risks associated with our ability to properly execute on our cloud transition, including 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 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 or costs to retain, recruit , and train qualified personnel 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, increasing labor costs, applicable regulatory requirements such as vaccination mandates, or otherwise; risks that we may be unable to maintain, expand, and enable our relationships with partners as part of our growth strategy; risks associated with our reliance on cloud hosting providers and other 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, exposure to regions subject to political or economic instability, fluctuations in foreign exchange rates, 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; 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 distractions, 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 and protection, government contracts, anti-corruption, trade compliance, 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 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, develop operational problems, or be vulnerable to cyber-attacks; risk of 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 significant 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 2021 spin-off of our 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, 2022, when filed, and other filings we make with the SEC.
VERINT, VERINT DA VINCI, THE CUSTOMER ENGAGEMENT COMPANY, BOUNDLESS CUSTOMER ENGAGEMENT, THE ENGAGEMENT CAPACITY GAP and THE SCIENCE OF CUSTOMER ENGAGEMENT 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 |
|
Year Ended |
||||||||||||
|
(in thousands, except per share data) |
|
|
2022 |
|
|
|
2021 |
|
|
|
2022 |
|
|
|
2021 |
|
|
Revenue: |
|
|
|
|
|
|
|
|
||||||||
|
Recurring |
|
$ |
173,687 |
|
|
$ |
157,054 |
|
|
$ |
633,129 |
|
|
$ |
575,624 |
|
|
Nonrecurring |
|
|
60,481 |
|
|
|
68,026 |
|
|
|
241,380 |
|
|
|
254,623 |
|
|
Total revenue |
|
|
234,168 |
|
|
|
225,080 |
|
|
|
874,509 |
|
|
|
830,247 |
|
|
Cost of revenue: |
|
|
|
|
|
|
|
|
||||||||
|
Recurring |
|
|
44,046 |
|
|
|
35,792 |
|
|
|
156,569 |
|
|
|
139,044 |
|
|
Nonrecurring |
|
|
33,317 |
|
|
|
34,710 |
|
|
|
124,226 |
|
|
|
130,545 |
|
|
Amortization of acquired technology |
|
|
4,218 |
|
|
|
5,373 |
|
|
|
17,777 |
|
|
|
17,962 |
|
|
Total cost of revenue |
|
|
81,581 |
|
|
|
75,875 |
|
|
|
298,572 |
|
|
|
287,551 |
|
|
Gross profit |
|
|
152,587 |
|
|
|
149,205 |
|
|
|
575,937 |
|
|
|
542,696 |
|
|
Operating expenses: |
|
|
|
|
|
|
|
|
||||||||
|
Research and development, net |
|
|
31,322 |
|
|
|
32,299 |
|
|
|
123,291 |
|
|
|
128,152 |
|
|
Selling, general and administrative |
|
|
108,008 |
|
|
|
92,612 |
|
|
|
376,808 |
|
|
|
327,345 |
|
|
Amortization of other acquired intangible assets |
|
|
7,061 |
|
|
|
6,461 |
|
|
|
28,995 |
|
|
|
29,777 |
|
|
Total operating expenses |
|
|
146,391 |
|
|
|
131,372 |
|
|
|
529,094 |
|
|
|
485,274 |
|
|
Operating income |
|
|
6,196 |
|
|
|
17,833 |
|
|
|
46,843 |
|
|
|
57,422 |
|
|
Other income (expense), net: |
|
|
|
|
|
|
|
|
||||||||
|
Interest income |
|
|
86 |
|
|
|
244 |
|
|
|
233 |
|
|
|
1,461 |
|
|
Interest expense |
|
|
(1,605 |
) |
|
|
(9,273 |
) |
|
|
(10,325 |
) |
|
|
(39,803 |
) |
|
Losses on early retirements of debt |
|
|
— |
|
|
|
— |
|
|
|
(2,474 |
) |
|
|
(143 |
) |
|
Other income (expense), net |
|
|
1,438 |
|
|
|
(34,355 |
) |
|
|
5,227 |
|
|
|
(60,601 |
) |
|
Total other expense, net |
|
|
(81 |
) |
|
|
(43,384 |
) |
|
|
(7,339 |
) |
|
|
(99,086 |
) |
|
Income (loss) from continuing operations before provision for (benefit from) income taxes |
|
|
6,115 |
|
|
|
(25,551 |
) |
|
|
39,504 |
|
|
|
(41,664 |
) |
|
Provision for (benefit from) income taxes |
|
|
10,375 |
|
|
|
(2,839 |
) |
|
|
23,853 |
|
|
|
6,937 |
|
|
Net (loss) income from continuing operations |
|
|
(4,260 |
) |
|
|
(22,712 |
) |
|
|
15,651 |
|
|
|
(48,601 |
) |
|
Net income from discontinued operations |
|
|
— |
|
|
|
4,166 |
|
|
|
— |
|
|
|
48,494 |
|
|
Net (loss) income |
|
|
(4,260 |
) |
|
|
(18,546 |
) |
|
|
15,651 |
|
|
|
(107 |
) |
|
Net income from continuing operations attributable to noncontrolling interests |
|
|
363 |
|
|
|
177 |
|
|
|
1,238 |
|
|
|
1,053 |
|
|
Net income from discontinued operations attributable to noncontrolling interests |
|
|
— |
|
|
|
1,199 |
|
|
|
— |
|
|
|
6,107 |
|
|
Net (loss) income attributable to Verint Systems Inc. |
|
|
(4,623 |
) |
|
|
(19,922 |
) |
|
|
14,413 |
|
|
|
(7,267 |
) |
|
Dividends on preferred stock |
|
|
(5,200 |
) |
|
|
(2,514 |
) |
|
|
(18,922 |
) |
|
|
(7,656 |
) |
|
Net loss attributable to Verint Systems Inc. common shares |
|
$ |
(9,823 |
) |
|
$ |
(22,436 |
) |
|
$ |
(4,509 |
) |
|
$ |
(14,923 |
) |
|
|
|
|
|
|
|
|
|
|
||||||||
|
Net (loss) income attributable to Verint Systems Inc. common shares: |
|
|
|
|
|
|
|
|
||||||||
|
Net loss from continuing operations attributable to Verint Systems Inc. common shares |
|
$ |
(9,823 |
) |
|
$ |
(25,403 |
) |
|
$ |
(4,509 |
) |
|
$ |
(57,310 |
) |
|
Net income from discontinued operations attributable to Verint Systems Inc. common shares |
|
$ |
— |
|
|
$ |
2,967 |
|
|
$ |
— |
|
|
$ |
42,387 |
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
Basic net (loss) income per common share attributable to Verint Systems Inc.: |
|
|
|
|
|
|
|
|
||||||||
|
Continuing operations |
|
$ |
(0.15 |
) |
|
$ |
(0.39 |
) |
|
$ |
(0.07 |
) |
|
$ |
(0.88 |
) |
|
Discontinued operations |
|
|
— |
|
|
|
0.05 |
|
|
|
— |
|
|
|
0.65 |
|
|
Total basic net loss per common share attributable to Verint Systems Inc. |
|
$ |
(0.15 |
) |
|
$ |
(0.34 |
) |
|
$ |
(0.07 |
) |
|
$ |
(0.23 |
) |
|
|
|
|
|
|
|
|
|
|
||||||||
|
Diluted net (loss) income per common share attributable to Verint Systems Inc.: |
|
|
|
|
|
|
|
|
||||||||
|
Continuing operations |
|
$ |
(0.15 |
) |
|
$ |
(0.39 |
) |
|
$ |
(0.07 |
) |
|
$ |
(0.88 |
) |
|
Discontinued operations |
|
|
— |
|
|
|
0.05 |
|
|
|
— |
|
|
|
0.65 |
|
|
Total diluted net loss per common share attributable to Verint Systems Inc. |
|
$ |
(0.15 |
) |
|
$ |
(0.34 |
) |
|
$ |
(0.07 |
) |
|
$ |
(0.23 |
) |
|
|
|
|
|
|
|
|
|
|
||||||||
|
Weighted-average common shares outstanding: |
|
|
|
|
|
|
|
|
||||||||
|
Basic |
|
|
65,916 |
|
|
|
65,753 |
|
|
|
65,591 |
|
|
|
65,173 |
|
|
Diluted |
|
|
65,916 |
|
|
|
65,753 |
|
|
|
65,591 |
|
|
|
65,173 |
|
|
Table 2 VERINT SYSTEMS INC. AND SUBSIDIARIES GAAP to Non-GAAP Cloud Metrics (Unaudited) |
||||||||||||||||
|
|
|
Three Months Ended |
|
Year Ended |
||||||||||||
|
(in thousands) |
|
|
2022 |
|
|
|
2021 |
|
|
|
2022 |
|
|
|
2021 |
|
|
Table of Reconciliation from GAAP Cloud Revenue to Non-GAAP Cloud Revenue |
|
|
|
|
|
|
|
|||||||||
|
SaaS revenue – GAAP |
|
$ |
100,685 |
|
|
$ |
69,852 |
|
|
$ |
322,764 |
|
|
$ |
217,952 |
|
|
Bundled SaaS revenue – GAAP |
|
|
52,396 |
|
|
|
39,345 |
|
|
|
183,035 |
|
|
|
145,962 |
|
|
Unbundled SaaS revenue – GAAP |
|
|
48,289 |
|
|
|
30,507 |
|
|
|
139,729 |
|
|
|
71,990 |
|
|
Optional managed services revenue – GAAP |
|
|
15,960 |
|
|
|
16,115 |
|
|
|
65,648 |
|
|
|
59,459 |
|
|
Cloud revenue – GAAP |
|
$ |
116,645 |
|
|
$ |
85,967 |
|
|
$ |
388,412 |
|
|
$ |
277,411 |
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
Estimated SaaS revenue adjustments |
|
$ |
1,920 |
|
|
$ |
1,545 |
|
|
$ |
5,621 |
|
|
$ |
9,165 |
|
|
Estimated bundled SaaS revenue adjustments |
|
|
1,920 |
|
|
|
1,503 |
|
|
|
5,558 |
|
|
|
8,988 |
|
|
Estimated unbundled SaaS revenue adjustments |
|
|
— |
|
|
|
42 |
|
|
|
63 |
|
|
|
177 |
|
|
Estimated optional managed services revenue adjustments |
|
|
81 |
|
|
|
226 |
|
|
|
512 |
|
|
|
998 |
|
|
Estimated cloud revenue adjustments |
|
$ |
2,001 |
|
|
$ |
1,771 |
|
|
$ |
6,133 |
|
|
$ |
10,163 |
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
SaaS revenue – non-GAAP |
|
$ |
102,605 |
|
|
$ |
71,397 |
|
|
$ |
328,385 |
|
|
$ |
227,117 |
|
|
Bundled SaaS revenue – non-GAAP |
|
|
54,316 |
|
|
|
40,848 |
|
|
|
188,593 |
|
|
|
154,950 |
|
|
Unbundled SaaS revenue – non-GAAP |
|
|
48,289 |
|
|
|
30,549 |
|
|
|
139,792 |
|
|
|
72,167 |
|
|
Optional managed services revenue – non-GAAP |
|
|
16,041 |
|
|
|
16,341 |
|
|
|
66,160 |
|
|
|
60,457 |
|
|
Cloud revenue – non-GAAP |
|
$ |
118,646 |
|
|
$ |
87,738 |
|
|
$ |
394,545 |
|
|
$ |
287,574 |
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
Table of New SaaS ACV |
|
|
|
|
|
|
|
|||||||||
|
New SaaS ACV |
|
$ |
30,288 |
|
|
$ |
21,907 |
|
|
$ |
93,972 |
|
|
$ |
66,155 |
|
|
New SaaS ACV Growth YoY |
|
|
38.3 |
% |
|
|
38.8 |
% |
|
|
42.0 |
% |
|
|
33.1 |
% |
|
|
|
|
|
|
|
|
|
|
||||||||
|
Table of New Perpetual License Equivalent Bookings |
|
|
|
|
|
|
|
|||||||||
|
New perpetual license equivalent bookings |
|
$ |
92,633 |
|
|
$ |
82,313 |
|
|
$ |
302,112 |
|
|
$ |
258,307 |
|
|
New perpetual license equivalent bookings change YoY |
|
|
12.5 |
% |
|
|
15.2 |
% |
|
|
17.0 |
% |
|
|
(4.6 |
)% |
|
% of new perpetual license equivalent bookings from SaaS |
|
|
60.8 |
% |
|
|
48.6 |
% |
|
|
52.6 |
% |
|
|
44.8 |
% |
|
Table 3 VERINT SYSTEMS INC. AND SUBSIDIARIES Reconciliation of GAAP to Non-GAAP Measures (Unaudited) |
||||||||||||||||
|
|
|
Three Months Ended |
|
Year Ended |
||||||||||||
|
(in thousands, except per share data) |
|
|
2022 |
|
|
|
2021 |
|
|
|
2022 |
|
|
|
2021 |
|
|
REVENUE |
|
|
|
|
|
|
|
|
||||||||
|
Recurring revenue – GAAP |
|
$ |
173,687 |
|
|
$ |
157,054 |
|
|
$ |
633,129 |
|
|
$ |
575,624 |
|
|
Nonrecurring revenue – GAAP |
|
|
60,481 |
|
|
|
68,026 |
|
|
|
241,380 |
|
|
|
254,623 |
|
|
Total GAAP revenue |
|
|
234,168 |
|
|
|
225,080 |
|
|
|
874,509 |
|
|
|
830,247 |
|
|
Recurring revenue adjustments |
|
|
2,011 |
|
|
|
1,781 |
|
|
|
6,171 |
|
|
|
10,336 |
|
|
Nonrecurring revenue adjustments |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
Total revenue adjustments |
|
|
2,011 |
|
|
|
1,781 |
|
|
|
6,171 |
|
|
|
10,336 |
|
|
Recurring revenue – non-GAAP |
|
|
175,698 |
|
|
|
158,835 |
|
|
|
639,300 |
|
|
|
585,960 |
|
|
Nonrecurring revenue – non-GAAP |
|
|
60,481 |
|
|
|
68,026 |
|
|
|
241,380 |
|
|
|
254,623 |
|
|
Total non-GAAP revenue |
|
$ |
236,179 |
|
|
$ |
226,861 |
|
|
$ |
880,680 |
|
|
$ |
840,583 |
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
GROSS PROFIT AND GROSS MARGIN |
|
|
|
|
|
|
|
|
||||||||
|
Recurring costs |
|
$ |
44,046 |
|
|
$ |
35,792 |
|
|
$ |
156,569 |
|
|
$ |
139,044 |
|
|
Nonrecurring costs |
|
|
33,317 |
|
|
|
34,710 |
|
|
|
124,226 |
|
|
|
130,545 |
|
|
Amortization of acquired technology |
|
|
4,218 |
|
|
|
5,373 |
|
|
|
17,777 |
|
|
|
17,962 |
|
|
Total GAAP cost of revenue |
|
|
81,581 |
|
|
|
75,875 |
|
|
|
298,572 |
|
|
|
287,551 |
|
|
GAAP gross profit |
|
|
152,587 |
|
|
|
149,205 |
|
|
|
575,937 |
|
|
|
542,696 |
|
|
GAAP gross margin |
|
|
65.2 |
% |
|
|
66.3 |
% |
|
|
65.9 |
% |
|
|
65.4 |
% |
|
Revenue adjustments |
|
|
2,011 |
|
|
|
1,781 |
|
|
|
6,171 |
|
|
|
10,336 |
|
|
Amortization of acquired technology |
|
|
4,218 |
|
|
|
5,373 |
|
|
|
17,777 |
|
|
|
17,962 |
|
|
Stock-based compensation expenses |
|
|
1,110 |
|
|
|
(154 |
) |
|
|
5,028 |
|
|
|
3,293 |
|
|
Acquisition expenses, net |
|
|
169 |
|
|
|
18 |
|
|
|
340 |
|
|
|
352 |
|
|
Restructuring expenses |
|
|
52 |
|
|
|
409 |
|
|
|
844 |
|
|
|
2,170 |
|
|
Separation expenses(3) |
|
|
— |
|
|
|
— |
|
|
|
78 |
|
|
|
— |
|
|
Impairment charges |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
145 |
|
|
Discontinued operations corporate overhead adjustment |
|
|
— |
|
|
|
1,365 |
|
|
|
— |
|
|
|
4,675 |
|
|
Allocation methodology difference |
|
|
— |
|
|
|
(405 |
) |
|
|
— |
|
|
|
(819 |
) |
|
Non-GAAP gross profit |
|
$ |
160,147 |
|
|
$ |
157,592 |
|
|
$ |
606,175 |
|
|
$ |
580,810 |
|
|
Non-GAAP gross margin |
|
|
67.8 |
% |
|
|
69.5 |
% |
|
|
68.8 |
% |
|
|
69.1 |
% |
|
|
|
|
|
|
|
|
|
|
||||||||
|
RESEARCH AND DEVELOPMENT, NET |
|
|
|
|
|
|
|
|
||||||||
|
GAAP research and development, net |
|
$ |
31,322 |
|
|
$ |
32,299 |
|
|
$ |
123,291 |
|
|
$ |
128,152 |
|
|
As a percentage of GAAP revenue |
|
|
13.4 |
% |
|
|
14.4 |
% |
|
|
14.1 |
% |
|
|
15.4 |
% |
|
Stock-based compensation expenses |
|
|
(1,816 |
) |
|
|
(8 |
) |
|
|
(7,565 |
) |
|
|
(3,918 |
) |
|
Acquisition expenses, net |
|
|
(243 |
) |
|
|
(26 |
) |
|
|
(515 |
) |
|
|
(275 |
) |
|
Restructuring expenses |
|
|
— |
|
|
|
(227 |
) |
|
|
(410 |
) |
|
|
(1,376 |
) |
|
Separation expenses(3) |
|
|
— |
|
|
|
— |
|
|
|
(467 |
) |
|
|
— |
|
|
Other adjustments |
|
|
— |
|
|
|
(1 |
) |
|
|
— |
|
|
|
(44 |
) |
|
Discontinued operations corporate overhead adjustment |
|
|
— |
|
|
|
(4,193 |
) |
|
|
— |
|
|
|
(16,929 |
) |
|
Allocation methodology difference |
|
|
— |
|
|
|
1,911 |
|
|
|
— |
|
|
|
7,436 |
|
|
Non-GAAP research and development, net |
|
$ |
29,263 |
|
|
$ |
29,755 |
|
|
$ |
114,334 |
|
|
$ |
113,046 |
|
|
As a percentage of non-GAAP revenue |
|
|
12.4 |
% |
|
|
13.1 |
% |
|
|
13.0 |
% |
|
|
13.4 |
% |
|
|
|
|
|
|
|
|
|
|
||||||||
|
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES |
|
|
|
|
|
|
|
|
||||||||
|
GAAP selling, general and administrative expenses |
|
$ |
108,008 |
|
|
$ |
92,612 |
|
|
$ |
376,808 |
|
|
$ |
327,345 |
|
|
As a percentage of GAAP revenue |
|
|
46.1 |
% |
|
|
41.1 |
% |
|
|
43.1 |
% |
|
|
39.4 |
% |
|
Stock-based compensation expenses |
|
|
(11,250 |
) |
|
|
(5,810 |
) |
|
|
(52,672 |
) |
|
|
(37,989 |
) |
|
Acquisition expenses, net |
|
|
(2,080 |
) |
|
|
(2,851 |
) |
|
|
(9,561 |
) |
|
|
(2,787 |
) |
|
Restructuring expenses |
|
|
(3,582 |
) |
|
|
(940 |
) |
|
|
(4,761 |
) |
|
|
(3,555 |
) |
|
Separation expenses(3) |
|
|
(1,740 |
) |
|
|
— |
|
|
|
(12,391 |
) |
|
|
— |
|
|
Accelerated lease costs |
|
|
(7,771 |
) |
|
|
(2,215 |
) |
|
|
(9,794 |
) |
|
|
(2,400 |
) |
|
Impairment charges |
|
|
(1,263 |
) |
|
|
— |
|
|
|
(1,636 |
) |
|
|
— |
|
|
Other adjustments |
|
|
(759 |
) |
|
|
(279 |
) |
|
|
(1,371 |
) |
|
|
467 |
|
|
Discontinued operations corporate overhead adjustment |
|
|
— |
|
|
|
(8,164 |
) |
|
|
— |
|
|
|
(29,292 |
) |
|
Allocation methodology difference |
|
|
— |
|
|
|
(1,571 |
) |
|
|
— |
|
|
|
(5,530 |
) |
|
Non-GAAP selling, general and administrative expenses |
|
$ |
79,563 |
|
|
$ |
70,782 |
|
|
$ |
284,622 |
|
|
$ |
246,259 |
|
|
As a percentage of non-GAAP revenue |
|
|
33.7 |
% |
|
|
31.2 |
% |
|
|
32.3 |
% |
|
|
29.3 |
% |
|
|
|
|
|
|
|
|
|
|
||||||||
|
OPERATING INCOME AND OPERATING MARGIN |
|
|
|
|
|
|
|
|
||||||||
|
GAAP operating income |
|
$ |
6,196 |
|
|
$ |
17,833 |
|
|
$ |
46,843 |
|
|
$ |
57,422 |
|
|
GAAP operating margin |
|
|
2.6 |
% |
|
|
7.9 |
% |
|
|
5.4 |
% |
|
|
6.9 |
% |
|
Revenue adjustments |
|
|
2,011 |
|
|
|
1,781 |
|
|
|
6,171 |
|
|
|
10,336 |
|
|
Amortization of acquired technology |
|
|
4,218 |
|
|
|
5,373 |
|
|
|
17,777 |
|
|
|
17,962 |
|
|
Amortization of other acquired intangible assets |
|
|
7,061 |
|
|
|
6,461 |
|
|
|
28,995 |
|
|
|
29,777 |
|
|
Stock-based compensation expenses |
|
|
14,176 |
|
|
|
5,664 |
|
|
|
65,265 |
|
|
|
45,200 |
|
|
Acquisition expenses, net |
|
|
2,492 |
|
|
|
2,895 |
|
|
|
10,416 |
|
|
|
3,414 |
|
|
Restructuring expenses |
|
|
3,634 |
|
|
|
1,576 |
|
|
|
6,015 |
|
|
|
7,101 |
|
|
Separation expenses(3) |
|
|
1,740 |
|
|
|
— |
|
|
|
12,936 |
|
|
|
— |
|
|
Accelerated lease costs |
|
|
7,771 |
|
|
|
2,215 |
|
|
|
9,794 |
|
|
|
2,400 |
|
|
Impairment charges |
|
|
1,263 |
|
|
|
— |
|
|
|
1,636 |
|
|
|
145 |
|
|
Other adjustments |
|
|
759 |
|
|
|
280 |
|
|
|
1,371 |
|
|
|
(423 |
) |
|
Discontinued operations corporate overhead adjustment |
|
|
— |
|
|
|
13,722 |
|
|
|
— |
|
|
|
50,896 |
|
|
Allocation methodology difference |
|
|
— |
|
|
|
(745 |
) |
|
|
— |
|
|
|
(2,725 |
) |
|
Non-GAAP operating income |
|
$ |
51,321 |
|
|
$ |
57,055 |
|
|
$ |
207,219 |
|
|
$ |
221,505 |
|
|
Non-GAAP operating margin |
|
|
21.7 |
% |
|
|
25.1 |
% |
|
|
23.5 |
% |
|
|
26.4 |
% |
|
|
|
|
|
|
|
|
|
|
||||||||
|
Table of Reconciliation from GAAP Other Expense, Net to Non-GAAP Other Expense, Net |
|
|
|
|
|
|
|
|
||||||||
|
GAAP other expense, net |
|
$ |
(81 |
) |
|
$ |
(43,384 |
) |
|
$ |
(7,339 |
) |
|
$ |
(99,086 |
) |
|
Unrealized losses on derivatives, net |
|
|
— |
|
|
|
357 |
|
|
|
14,305 |
|
|
|
1,115 |
|
|
Amortization of convertible note discount |
|
|
— |
|
|
|
3,263 |
|
|
|
— |
|
|
|
12,883 |
|
|
Expenses and losses on debt modification or retirement |
|
|
— |
|
|
|
— |
|
|
|
2,474 |
|
|
|
1,462 |
|
|
Change in fair value of future tranche right |
|
|
— |
|
|
|
33,312 |
|
|
|
(15,810 |
) |
|
|
56,146 |
|
|
Acquisition expenses (benefit), net |
|
|
5 |
|
|
|
14 |
|
|
|
(3,465 |
) |
|
|
142 |
|
|
Other adjustments |
|
|
(1,168 |
) |
|
|
— |
|
|
|
(1,168 |
) |
|
|
— |
|
|
Non-GAAP other expense, net(1) |
|
$ |
(1,244 |
) |
|
$ |
(6,438 |
) |
|
$ |
(11,003 |
) |
|
$ |
(27,338 |
) |
|
|
|
|
|
|
|
|
|
|
||||||||
|
Table of Reconciliation from GAAP Provision for (Benefit from) Income Taxes to Non-GAAP Provision for Income Taxes |
|
|
|
|
|
|
|
|
||||||||
|
GAAP provision for (benefit from) income taxes |
|
$ |
10,375 |
|
|
$ |
(2,839 |
) |
|
$ |
23,853 |
|
|
$ |
6,937 |
|
|
GAAP effective income tax rate |
|
|
169.7 |
% |
|
|
11.1 |
% |
|
|
60.4 |
% |
|
|
(16.6 |
)% |
|
Non-GAAP tax adjustments |
|
|
(4,355 |
) |
|
|
7,052 |
|
|
|
(2,287 |
) |
|
|
9,225 |
|
|
Non-GAAP provision for income taxes |
|
$ |
6,020 |
|
|
$ |
4,213 |
|
|
$ |
21,566 |
|
|
$ |
16,162 |
|
|
Non-GAAP effective income tax rate |
|
|
12.0 |
% |
|
|
8.3 |
% |
|
|
11.0 |
% |
|
|
8.3 |
% |
|
|
|
|
|
|
|
|
|
|
||||||||
|
Table of Reconciliation from GAAP Net Loss from Continuing Operations Attributable to Verint Systems Inc. Common Shares to Non-GAAP Net Income from Continuing Operations Attributable to Verint Systems Inc. Common Shares |
|
|
|
|
|
|
|
|
||||||||
|
GAAP net loss from continuing operations attributable to Verint Systems Inc. common shares |
|
$ |
(9,823 |
) |
|
$ |
(25,403 |
) |
|
$ |
(4,509 |
) |
|
$ |
(57,310 |
) |
|
Revenue adjustments |
|
|
2,011 |
|
|
|
1,781 |
|
|
|
6,171 |
|
|
|
10,336 |
|
|
Amortization of acquired technology |
|
|
4,218 |
|
|
|
5,373 |
|
|
|
17,777 |
|
|
|
17,962 |
|
|
Amortization of other acquired intangible assets |
|
|
7,061 |
|
|
|
6,461 |
|
|
|
28,995 |
|
|
|
29,777 |
|
|
Stock-based compensation expenses |
|
|
14,176 |
|
|
|
5,664 |
|
|
|
65,265 |
|
|
|
45,200 |
|
|
Unrealized losses on derivatives, net |
|
|
— |
|
|
|
357 |
|
|
|
14,305 |
|
|
|
1,115 |
|
|
Amortization of convertible note discount |
|
|
— |
|
|
|
3,263 |
|
|
|
— |
|
|
|
12,883 |
|
|
Expenses and losses on debt modification or retirement |
|
|
— |
|
|
|
— |
|
|
|
2,474 |
|
|
|
1,462 |
|
|
Change in fair value of future tranche right |
|
|
— |
|
|
|
33,312 |
|
|
|
(15,810 |
) |
|
|
56,146 |
|
|
Acquisition expenses, net |
|
|
2,497 |
|
|
|
2,909 |
|
|
|
6,951 |
|
|
|
3,556 |
|
|
Restructuring expenses |
|
|
3,634 |
|
|
|
1,576 |
|
|
|
6,015 |
|
|
|
7,101 |
|
|
Separation expenses(3) |
|
|
1,740 |
|
|
|
— |
|
|
|
12,936 |
|
|
|
— |
|
|
Accelerated lease costs |
|
|
7,771 |
|
|
|
2,215 |
|
|
|
9,794 |
|
|
|
2,400 |
|
|
Impairment charges |
|
|
1,263 |
|
|
|
— |
|
|
|
1,636 |
|
|
|
145 |
|
|
Other adjustments |
|
|
(409 |
) |
|
|
280 |
|
|
|
203 |
|
|
|
(423 |
) |
|
Discontinued operations corporate overhead adjustment |
|
|
— |
|
|
|
13,722 |
|
|
|
— |
|
|
|
50,896 |
|
|
Allocation methodology difference |
|
|
— |
|
|
|
(745 |
) |
|
|
— |
|
|
|
(2,725 |
) |
|
Non-GAAP tax adjustments |
|
|
4,355 |
|
|
|
(7,052 |
) |
|
|
2,287 |
|
|
|
(9,225 |
) |
|
Dividends, reversed due to assumed conversion of preferred stock(4) |
|
|
5,200 |
|
|
|
2,514 |
|
|
|
18,922 |
|
|
|
7,656 |
|
|
Total adjustments |
|
|
53,517 |
|
|
|
71,630 |
|
|
|
177,921 |
|
|
|
234,262 |
|
|
Non-GAAP net income from continuing operations attributable to Verint Systems Inc. common shares |
|
$ |
43,694 |
|
|
$ |
46,227 |
|
|
$ |
173,412 |
|
|
$ |
176,952 |
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
Table Comparing GAAP Diluted Net Loss from Continuing Operations Per Common Share Attributable to Verint Systems Inc. to Non-GAAP Diluted Net Income from Continuing Operations Per Common Share Attributable to Verint Systems Inc. |
|
|
|
|
|
|
|
|
||||||||
|
GAAP diluted net loss from continuing operations per common share attributable to Verint Systems Inc. |
|
$ |
(0.15 |
) |
|
$ |
(0.39 |
) |
|
$ |
(0.07 |
) |
|
$ |
(0.88 |
) |
|
Non-GAAP diluted net income from continuing operations per common share attributable to Verint Systems Inc.(4) |
|
$ |
0.57 |
|
|
$ |
0.65 |
|
|
$ |
2.28 |
|
|
$ |
2.57 |
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
GAAP weighted-average shares used in computing diluted net loss from continuing operations per common share attributable to Verint Systems Inc. |
|
|
65,916 |
|
|
|
65,753 |
|
|
|
65,591 |
|
|
|
65,173 |
|
|
Additional weighted-average shares applicable to non-GAAP diluted net income from continuing operations per common share attributable to Verint Systems Inc. |
|
|
10,657 |
|
|
|
4,846 |
|
|
|
10,419 |
|
|
|
3,654 |
|
|
Non-GAAP diluted weighted-average shares used in computing net income from continuing operations per common share attributable to Verint Systems Inc.(4) |
|
|
76,573 |
|
|
|
70,599 |
|
|
|
76,010 |
|
|
|
68,827 |
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
Table of Reconciliation from GAAP Net (Loss) Income from Continuing Operations to Adjusted EBITDA |
|
|
|
|
|
|
|
|
||||||||
|
GAAP net (loss) income from continuing operations |
|
$ |
(4,260 |
) |
|
$ |
(22,712 |
) |
|
$ |
15,651 |
|
|
$ |
(48,601 |
) |
|
As a percentage of GAAP revenue |
|
|
(1.8 |
)% |
|
|
(10.1 |
)% |
|
|
1.8 |
% |
|
|
(5.9 |
)% |
|
Provision for (benefit from) income taxes |
|
|
10,375 |
|
|
|
(2,839 |
) |
|
|
23,853 |
|
|
|
6,937 |
|
|
Other expense, net |
|
|
81 |
|
|
|
43,384 |
|
|
|
7,339 |
|
|
|
99,086 |
|
|
Depreciation and amortization(2) |
|
|
17,883 |
|
|
|
18,520 |
|
|
|
72,579 |
|
|
|
74,993 |
|
|
Revenue adjustments |
|
|
2,011 |
|
|
|
1,781 |
|
|
|
6,171 |
|
|
|
10,336 |
|
|
Stock-based compensation expenses |
|
|
14,176 |
|
|
|
5,664 |
|
|
|
65,265 |
|
|
|
45,200 |
|
|
Acquisition expenses, net |
|
|
2,492 |
|
|
|
2,895 |
|
|
|
10,416 |
|
|
|
3,414 |
|
|
Restructuring expenses |
|
|
3,596 |
|
|
|
1,576 |
|
|
|
5,951 |
|
|
|
7,101 |
|
|
Separation expenses(3) |
|
|
1,740 |
|
|
|
— |
|
|
|
12,569 |
|
|
|
— |
|
|
Accelerated lease costs |
|
|
7,771 |
|
|
|
2,215 |
|
|
|
9,794 |
|
|
|
2,400 |
|
|
Impairment charges |
|
|
1,263 |
|
|
|
— |
|
|
|
1,636 |
|
|
|
145 |
|
|
Other adjustments |
|
|
759 |
|
|
|
280 |
|
|
|
1,371 |
|
|
|
(423 |
) |
|
Discontinued operations corporate overhead adjustment |
|
|
— |
|
|
|
13,722 |
|
|
|
— |
|
|
|
50,896 |
|
|
Allocation methodology difference |
|
|
— |
|
|
|
(745 |
) |
|
|
— |
|
|
|
(2,725 |
) |
|
Adjusted EBITDA |
|
$ |
57,887 |
|
|
$ |
63,741 |
|
|
$ |
232,595 |
|
|
$ |
248,759 |
|
|
As a percentage of non-GAAP revenue |
|
|
24.5 |
% |
|
|
28.1 |
% |
|
|
26.4 |
% |
|
|
29.6 |
% |
Contacts
Investor Relations
Matthew Frankel, CFA
Verint Systems Inc.
(631) 962-9672
matthew.frankel@verint.com