Verint Systems Inc (VRNT) Reports Q3 FYE 2024 Earnings: SaaS ARR Climbs 11% Amidst AI Adoption Surge
Verint Systems Inc (NASDAQ:VRNT) reports a year-over-year SaaS ARR increase of 11%, driven by robust bookings and renewals.
Q3 FYE 2024 highlights include a 19% increase in GAAP cash from operations and a gross margin improvement of over 100bps.
Verint CEO Dan Bodner cites significant AI differentiation and customer adoption as key drivers for the positive financial outlook.
On December 6, 2023, Verint Systems Inc (NASDAQ:VRNT) released its 8-K filing, announcing its financial results for the third quarter and nine months ended October 31, 2023, of the fiscal year ending 2024 (FYE 2024). The company reported a slight year-over-year revenue decrease of 3% for both the three-month and nine-month periods, with revenues of $219 million and $645 million on a GAAP basis, respectively. On a non-GAAP basis, revenue for the nine months remained consistent with the GAAP figure at $646 million.
Financial Performance and Key Metrics
Verint Systems Inc (NASDAQ:VRNT) experienced a dip in revenue but showcased resilience with its SaaS Annual Recurring Revenue (ARR) growing by 11% year-over-year. This growth is attributed to solid bookings and renewals, as well as a significant uptick in customer AI adoption. The company's new SaaS Annual Contract Value (ACV) bookings included more than 50% of Verint AI-Powered Bots, indicating a shift towards AI-driven solutions.
The company's non-GAAP diluted earnings per share (EPS) for the three months ended October 31, 2023, was $0.65, while the GAAP diluted EPS was $0.12. For the nine-month period, the company reported a net loss per share of $(0.09) on a GAAP basis and a non-GAAP diluted EPS of $1.67. Verint's gross margin improved by more than 100 basis points year-to-date compared to the same period last year, and GAAP cash from operations increased by 19% year-to-date.
Outlook and Investor Expectations
Looking ahead, Verint Systems Inc (NASDAQ:VRNT) is optimistic about its financial trajectory, projecting an 11% non-GAAP revenue growth in Q4. The company's non-GAAP outlook for the year ending January 31, 2024, includes revenue of $910 million +/- 2%, a 15% year-over-year growth in SaaS revenue, and diluted EPS of $2.65 at the midpoint of revenue guidance, reflecting a 5% year-over-year growth.
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.
Verint's CFO, Grant Highlander, also commented on the company's financial flexibility and strategic positioning, highlighting the successful execution of the $200 million stock buyback program and the potential for accelerated SaaS revenue growth.
Investor Day and AI Differentiation
Verint Systems Inc (NASDAQ:VRNT) is set to host an Investor Day on December 13, 2023, where the focus will be on the company's AI differentiation and customer experience (CX) automation opportunities. This event will provide further insights into how Verint's AI capabilities are influencing its financial model and market position.
In summary, Verint Systems Inc (NASDAQ:VRNT) has demonstrated a strong performance in its SaaS segment, with significant growth in customer AI adoption. While overall revenue has seen a slight decline, the company's strategic focus on AI and automation, coupled with solid financial management, positions it for a robust finish to the fiscal year.
Explore the complete 8-K earnings release (here) from Verint Systems Inc for further details.
This article first appeared on GuruFocus.
