Verint Systems (VRNT) Misses Q4 EPS by 5c, Revenues Miss

March 31, 2020 4:08 PM EDT

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Verint Systems (NASDAQ: VRNT) reported Q4 EPS of $1.11, $0.05 worse than the analyst estimate of $1.16. Revenue for the quarter came in at $349 million versus the consensus estimate of $374.51 million.

“In FY20, we made significant progress with our three strategic objectives and are pleased to report strong execution of our Customer Engagement Cloud First strategy, our Cyber Intelligence Software Model strategy and our plan to separate our two businesses. In the current COVID-19 environment, we are highly engaged with our global base of customers helping them to navigate the new challenges they are facing. Our employees remain fully engaged, working either from home, or from offices that have been authorized to remain open, and we believe our business continuity plan is working well," said Dan Bodner, CEO.

Customer Engagement FY20 Highlights

  • Cloud adoption accelerating at large enterprises: Cloud contracts with TCV > $1 million up 93% y-o-y
  • Strong cloud revenue growth: Cloud revenue up about 45% y-o-y
  • Strong SaaS bookings growth: New SaaS ACV up more than 70% y-o-y
  • Recurring revenue: Percentage of software revenue that is recurring increased ~400 bps y-o-y to around 75%
  • Large project from the Social Security Administration (revenue expected in FY21)
  • See Tables 2, 4 and 7 for additional Customer Engagement financial information

“In Customer Engagement, the market continued its shift to the cloud, with a notable acceleration in large enterprises. We are pleased to report that all key cloud metrics were up significantly in FY20, with cloud revenue up about 45%, new SaaS ACV up more than 70%, and the percentage of software revenue that is recurring up approximately 400 basis points to around 75%. We are also pleased to announce that the Social Security Administration has selected Verint solutions for a large project, consisting of $35 million in perpetual software licenses, plus services and support, to be deployed in several stages. Revenue from this project was previously expected to be partially recognized in our FY20 fourth quarter. The project is being delayed due to appeals and we now expect it to contribute to revenue in FY21. In FY20 (excluding any revenue from this large project), we achieved high-single digit revenue growth on a constant currency basis. Looking ahead, Verint is well positioned for long-term market growth due to our large differentiated portfolio, cloud first go-to-market, and expanding cloud channel partnerships," Bodner added.

Outlook
Doug Robinson, CFO, added, “Verint has a large customer base of more than 10,000 customers around the world and a very strong and differentiated portfolio. We had a successful FY20 and entered FY21 with a strong outlook. At this point, considering the rapidly changing conditions arising from COVID-19 and uncertainty about its potential impact, we are unable to provide guidance. In the event the global economy deteriorates due to the pandemic, we have a strong balance sheet with $3 billion of assets, including more than $550 million of cash and short-term investments. We believe we are well positioned to navigate the current environment, as we stay focused on supporting our customers and partners during this period."

For earnings history and earnings-related data on Verint Systems (VRNT) click here.



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