Verint Systems (VRNT) Tops Q3 EPS by 22c, Revenues Beat; Resuming FY21 EPS/Revenue Guidance Above Consensus

December 9, 2020 4:11 PM EST

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Verint Systems (NASDAQ: VRNT) reported Q3 EPS of $1.02, $0.22 better than the analyst estimate of $0.80. Revenue for the quarter came in at $328.2 million versus the consensus estimate of $317.14 million.

  • Strong Sequential Growth in Q3; Expect Strong Q4 and Resuming Guidance
  • Customer Engagement Cloud Momentum Expected to Continue in Q4 and Next Year
  • Separation Plan on Track; Announcing New Name for Cyber Intelligence Business – Cognyte Software Ltd
  • Virtual Investor Days to be Held in January Ahead of Separation to Review Strategies and Long-Term Targets

“We had a solid Q3 with strong sequential revenue growth and year-over-year adjusted EBITDA growth, driving a 16% increase in cash from operations year-to-date. We made significant progress with all our key initiatives, including the business separation, Customer Engagement cloud transition and Cyber Intelligence software model margin expansion. Our shift to the cloud is accelerating and our on-premises business continued to recover from the initial impact of COVID-19. We expect to finish the year strong and are resuming guidance,” said Dan Bodner, CEO.

“In Q3, we experienced another strong quarter of cloud revenue growth and continued to win new cloud customers and displace competitors due to our product differentiation and partner agnostic strategy. COVID-19 is accelerating our cloud transition and for the full year we expect - for the first time - about half of our new software bookings (on a perpetual license equivalent basis) to come from SaaS, a significant increase from about one third in the prior year. We also expect recurring revenue to represent 80% of our software revenue, a 400bps increase from the prior year. Looking forward, next year we expect our cloud revenue growth to accelerate and to substantially complete our cloud transition.” said Bodner.

GUIDANCE:

Verint Systems sees FY2021 EPS of $3.40, versus the consensus of $3.37. Verint Systems sees FY2021 revenue of $1.28 billion, versus the consensus of $1.27 billion.

Resuming FY2021 Guidance and Providing Initial FY2022 Outlook and Long-Term Targets on Today's Conference Call

  • Our FY2021 non-GAAP revenue outlook is $1.280 billion with a range of +/- 1%
  • Our FY2021 non-GAAP diluted EPS outlook is $3.40 at the midpoint of our revenue guidance

“We are pleased with the building momentum in our businesses, our visibility has improved and we are providing guidance for the current year. In addition, we will provide an initial view on our outlook for FY2022 and long-term targets during today’s conference call. We will also provide more details at our virtual investor days in January,” said Doug Robinson, CFO of Verint.

Our non-GAAP outlook for the year ending January 31, 2021 excludes the following GAAP measures which we are able to quantify with reasonable certainty:

  • Amortization of intangible assets of approximately $50 million, including $48 million in Customer Engagement and $2 million in Cyber Intelligence.
  • Amortization of discount on convertible notes of approximately $13 million, all of which pertains to Customer Engagement.
  • Costs to separate Verint into two independent public companies of approximately $45 million, including $28 million attributable to Customer Engagement and $17 million attributable to Cyber Intelligence.

Our non-GAAP outlook for the year ending January 31, 2021 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 $12 million and $15 million, including between $9 million and $11 million in Customer Engagement and between $3 million and $4 million in Cyber Intelligence.
  • Stock-based compensation is expected to be between approximately $68 million and $78 million, assuming market prices for our common stock approximately consistent with current levels, including between $46 million and $52 million in Customer Engagement and between $22 million and $26 million in Cyber Intelligence.

Our non-GAAP outlook 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.

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



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