Verint Systems VRNT reported first-quarter fiscal 2020 adjusted earnings of 73 cents per share, which increased 38% year over year and surpassed the Zacks Consensus Estimate of 62 cents.
GAAP revenues increased 9% year over year to $315.3 million. Non-GAAP revenues of $324.2 million increased 11% year over year and beat the Zacks Consensus Estimate of $317 million.
Verint Systems Inc. Price, Consensus and EPS Surprise
Verint Systems Inc. price-consensus-eps-surprise-chart | Verint Systems Inc. Quote
Product revenues (33.1% of total GAAP revenues) declined 1.5% year over year to $104.2 million. Service and support revenues (66.9% of total GAAP revenues) increased 15.1% year over year to $211 million.
Segment wise, non-GAAP Customer Engagement revenues (68.5% of total non-GAAP revenues) increased 14.1% year over year to $215.9 million.
Non-GAAP Customer Engagement cloud revenues increased 72.2% year over year to $55.7 million. Additionally, non-GAAP Customer Engagement recurring revenues increased 22.8% year over year to $132 million. Non-GAAP Customer Engagement non-recurring revenues increased 2.6% year over year to $83.7million.
Notably Verint won new orders from existing customers, including an order from a leading telecommunications company (worth more than $10 million). Additionally, the company was successful in attracting new customers.
Moreover, Verint received cloud orders such as a $9 million order from a technology company, a $3 million order from a bank and a $2 million order from a healthcare company.
Non-GAAP Cyber Intelligence revenues (34.3% of total non-GAAP revenues) grew 5.3% year over year to $108.3 million. In the reported quarter, the company won orders worth approximately $55 million owing to continued demand for its products.
Non-GAAP gross profit increased 17.2% year over year to $218.5 million. Gross margin expanded 350 basis points (bps) to 67.4% owing to growth at both Customer Engagement and Cyber Intelligence segments.
GAAP research and development expenses increased 9.6% year over year to $57.2 million. Also, GAAP selling, general and administrative expenses increased 13.2% year over year to $121.7 million. Total GAAP operating expenses increased 11.5% year over year to $186.6 million.
Adjusted EBITDA increased 29.1% year over year to $70 million. Adjusted EBIDTA margin expanded 300 bps to 21.6%.
Non-GAAP operating income increased 35% year over year to $62.3 million and operating margin expanded 340 bps to 19.2%.
Balance Sheet and Cash Flow
Verint had $412 million of cash and cash equivalents as of Apr 30, 2019 compared with $369.9 million in the prior quarter.
Cash flow from operations was $93.1 million compared with $60.2 million in the year-ago period.
Non-GAAP revenue guidance has been revised to $1.375 billion (+/-2%) from $1.37 billion guided earlier, indicating year-over-year growth of 10.5%. Additionally, non-GAAP earnings per share are expected to be $3.65 compared with the earlier projection of $3.60, indicating year-over-year growth of 14%.
Non-GAAP Customer Engagement revenues are anticipated to grow 11% year over year. Non-GAAP Cyber Intelligence revenues are expected to grow 10% year over year.
Non-GAAP revenues are expected to be $1.65 billion, indicating CAGR of 10%. Additionally, non-GAAP earnings are anticipated to be $4.70, indicating CAGR of 14%.
Zacks Rank & Stocks to Consider
Currently, Verint carries a Zacks Rank #2 (Buy).
Some other top-ranked stocks in the Computer Technology sector include Microsoft Corporation MSFT, Cadence Design Systems, Inc. CDNS and ServiceNow, Inc. NOW. All the three stocks carry a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Long-term earnings growth rate for Microsoft, Cadence and ServiceNow is pegged at 12.4%, 11% and 28% respectively.
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