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Verint (VRNT) Q3 Earnings & Revenues Top Estimates, Shares Down

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Verint Systems (VRNT) reported third-quarter fiscal 2022 non-GAAP earnings of 69 cents per share, which beat the Zacks Consensus Estimate by 30.2%. On a year-over-year basis, the bottom line deteriorated 5.5%.

Non-GAAP revenues increased 4% year over year to $226.9 million and beat the Zacks Consensus Estimate by 4.1%. GAAP revenues of $225 million also increased 4% year over year. The top line was driven by strength in the cloud business.

Following the earnings announcement, shares of Verint are down 2.9% in premarket trading on Dec 3. In the past year, the stock has declined 16.8% against the industry’s growth of 42.1%.

Verint Systems Inc. Price, Consensus and EPS Surprise

Verint Systems Inc. Price, Consensus and EPS Surprise
Verint Systems Inc. Price, Consensus and EPS Surprise

Verint Systems Inc. price-consensus-eps-surprise-chart | Verint Systems Inc. Quote

Quarter Details

Non-GAAP recurring revenues (70.9% of total non-GAAP revenues) increased 5.5% year over year to $160.9 million.

Non-GAAP non-recurring revenues (29.1%) improved 1.6% year over year to $66 million.

On a non-GAAP basis, the company’s cloud revenues were up 32.3% to $100.6 million. Non-GAAP software-as-a-service (SaaS) revenues increased 38% to $84.1 million.

The company’s new perpetual license equivalent (PLE) bookings soared 14.2% year over year to $75.4 million. The percentage of new perpetual license equivalent bookings from SaaS stood at 43.7% in the fiscal third quarter compared with 44.8% reported in the prior-year quarter.

New SaaS annual contract value (or ACV) increased 16.9% to $18.3 million.

Operating Details

Non-GAAP gross profit increased 6.7% year over year to $161.2 million. Non-GAAP gross margin expanded 50 basis points (bps) to 71%.

Total operating expenses increased 5.6% year over year to $128.1 million.

As a percentage of non-GAAP revenues, non-GAAP research and development expenses, as well as non-GAAP selling, general and administrative expenses stood at 12.7% and 31.3%, respectively, in the fiscal third quarter.

Adjusted EBITDA declined 3% year over year to $68 million. Adjusted EBIDTA margin contracted 220 bps to 30%.

Non-GAAP operating income fell 3% year over year to $61.5 million and operating margin contracted 210 bps to 27.1%.

Balance Sheet and Cash Flow

As of Oct 31, 2021, Verint had cash and cash equivalents of $307.9 million compared with $320.4 million as of Jul 31, 2021. The company’s long-term debt stood at $406.4 million as of Oct 31, 2021 compared with $405.9 million as of Jul 31, 2021.

The remaining performance obligations were up 31% on a year-over-year basis.

Guidance

For fiscal 2022 (ending on Jan 31, 2022), the company expects cloud revenues to increase 35-37% compared with the earlier projected growth of 35%. New PLE bookings growth is now expected to be 15-17% compared with the earlier guidance of 15% growth.

Non-GAAP revenue guidance has been revised to $875 million (+/-1%) from $872 million projected earlier. Non-GAAP earnings per share are expected to be $2.25.

For fiscal 2023 (ending on Jan 31, 2023), the company projects non-GAAP revenues of $935 million (+/-2%). Non-GAAP earnings per share are expected to be $2.49, calling for 11% year-over-year growth.

Zacks Rank & Stocks to Consider

Currently, Verint carries a Zacks Rank #3 (Hold).

Some better-ranked stocks worth considering in the broader technology space are Arrow Electronics ARW, Alphabet GOOGL and Monolithic Power Systems MPWR.

While Alphabet and Arrow Electronics sport a Zacks Rank #1 (Strong Buy), Monolithic carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Arrow Electronics’ shares have gained 26.2% on a year-to-date basis. The long-term earnings growth rate for the company is currently projected at 27.4%.

Alphabet’s shares have surged 63.1% on a year-to-date basis. The long-term earnings growth rate for the company is currently projected at 25.8%.

Monolithic’s shares have rallied 51.4% on a year-to-date basis. The long-term earnings growth rate for the company is currently projected at 25%.


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