Cloud Revenue Growth Accelerating, Targeting 30% to 40% CAGR
Over Next Three YearsStrong Momentum Expected to Drive 10% Total
Revenue Growth and Continued Margin Expansion in FY2020Raising
Annual Non-GAAP Guidance: Increasing Revenue by $25 Million to
$1.370 Billion and EPS by 10 Cents to $3.60
Verint® Systems Inc. (NASDAQ:VRNT), a
global Actionable Intelligence® leader, today announced results for
the three months and year ended January 31, 2019 (FY2019).
“We believe our strong results and over achievement reflect the
successful execution of the growth strategy that we implemented
approximately two years ago. We learned about our customers'
mounting business and security challenges, and we responded by
accelerating our automation and cloud innovation. We believe our
automation and cloud strategy will further differentiate Verint in
a market that is increasingly embracing Actionable Intelligence
solutions. We are experiencing strong business momentum including
cloud growth acceleration. We entered the new year with improved
visibility, are raising our annual guidance and also providing
targets for cloud growth over the next three years,” said Dan
Bodner, Verint CEO.
FY2019 Financial Highlights (Year Ending January 31, 2019,
Compared to Prior Year)
GAAP
Non-GAAP
Revenue of $1,230 million, up 8.3%
Revenue of $1,245 million, up 8.2%
Gross margin of 63.5%, up 290bps
Gross margin of 66.6%, up 120bps
Operating income of $114 million, up
135%
Operating income of $267 million, up
18%
Operating margin of 9.3%, up 500bps
Operating margin of 21.4%, up 180bps
Diluted EPS of $1.00, vs. ($0.10) in
FY18
Diluted EPS of $3.21, up 14.2%
Cash flow from operations of $215 million,
up 22%
For the fourth quarter of FY2019, GAAP revenue and diluted EPS
increased to $330 million and $0.41, respectively. On a non-GAAP
basis, revenue and diluted EPS increased to $337 million and $1.08,
respectively.
Bodner continued, “The momentum we experienced throughout FY2019
continued in Q4, and we finished the year strong. I am pleased with
our cloud acceleration, ending the year with approximately 40% ARR
growth, laying a strong foundation for future growth. We expect
non-GAAP cloud revenue to increase by more than 40% this year to
nearly $250 million, and to increase at a 30% to 40% CAGR over the
next three years. We are also pleased with our GAAP cash from
operations which came in strong at $215 million, a 22% increase
year-over-year. We believe our strong results and momentum reflect
the strategic decisions we have made over the last two years and
the growing adoption of Actionable Intelligence solutions by the
market. We have accelerated our pace of innovation and we are well
positioned with a differentiated portfolio for sustained growth and
market leadership."
Financial Outlook for FY2020 (Year Ending January 31,
2020)
Today, we are raising our non-GAAP outlook for revenue and EPS
for the year ending January 31, 2020 as follows:
- Revenue: Increasing by $25 million to
$1.37 billion with a range of +/- 2%
- Reflects 10% year-over-year growth
- EPS: Increasing by 10 cents to $3.60 at
the midpoint of our revenue guidance
- Reflects 12% year-over-year growth
In addition to raising our annual guidance, we expect a strong
first fiscal quarter with 8% year-over-year growth in non-GAAP
revenue and 14% year-over-year growth in non-GAAP EPS.
Our non-GAAP outlook for the three months ending April 30, 2019
and year ending January 31, 2020 excludes the following GAAP
measures which we are able to quantify with reasonable
certainty:
- Amortization of intangible assets of
approximately $15 million and $56 million, for the three months
ending April 30, 2019 and year ending January 31, 2020,
respectively.
- Amortization of discount on convertible
notes of approximately $3 million and $12 million, for the three
months ending April 30, 2019 and year ending January 31, 2020,
respectively.
Our non-GAAP outlook for the three months ending April 30, 2019
and year ending January 31, 2020 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 $7 million and $9 million, and $21 million
and $25 million, for the three months ending April 30, 2019 and
year ending January 31, 2020, respectively.
- Stock-based compensation is expected to
be between approximately $14 million and $16 million, and $66
million and $70 million, for the three months ending April 30, 2019
and year ending January 31, 2020, respectively, assuming market
prices for our common stock approximately consistent with current
levels.
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.
We are unable, without unreasonable efforts, to provide a
reconciliation for other GAAP measures which are excluded from our
non-GAAP outlook, including the impact of future business
acquisitions or acquisition expenses, future restructuring
expenses, and non-GAAP income tax adjustments due to the level of
unpredictability and uncertainty associated with these items. For
these same reasons, we are unable to assess the probable
significance of these excluded items. While historical results may
not be indicative of future results, actual amounts for the three
months and year ended January 31, 2019 and 2018 for the GAAP
measures excluded from our non-GAAP outlook appear in Table 3 to
this press release.
Conference Call
Information
We will conduct a conference call today at 4:30 p.m. ET to
discuss our results for the three months and year ended January 31,
2019 and outlook. An online, real-time webcast of the conference
call will be available on our website at www.verint.com. The conference call can also be
accessed live via telephone at 1-844-309-0615 (United States and
Canada) and 1-661-378-9462 (international) and the passcode is
3466919. Please dial in 5-10 minutes prior to the scheduled start
time.
About Non-GAAP Financial Measures
This press release and the accompanying tables include non-GAAP
financial measures. For a description of these non-GAAP financial
measures, including the reasons management uses each measure, and
reconciliations of non-GAAP financial measures presented for
completed periods to the most directly comparable financial
measures prepared in accordance with GAAP, please see the tables
below as well as "Supplemental Information About Non-GAAP Financial
Measures" at the end of this press release.
About Verint Systems Inc.
Verint® (Nasdaq: VRNT) is a global leader in Actionable
Intelligence® solutions with a focus on customer engagement
optimization and cyber intelligence. Today, over 10,000
organizations in more than 180 countries—including over 85 percent
of the Fortune 100—count on intelligence from Verint solutions to
make more informed, effective and timely decisions. Learn more
about how we’re creating A Smarter World with Actionable
Intelligence® at www.verint.com.
Cautions About Forward-Looking Statements
This press release contains forward-looking statements,
including statements regarding expectations, predictions, views,
opportunities, plans, strategies, beliefs, and statements of
similar effect relating to Verint Systems Inc. These
forward-looking statements are not guarantees of future performance
and they are based on management's expectations that involve a
number of known and unknown risks, uncertainties, assumptions, and
other important factors, any of which could cause our actual
results or conditions to differ materially from those expressed in
or implied by the forward-looking statements. Some of the factors
that could cause our actual results or conditions to differ
materially from current expectations include, among others:
uncertainties regarding the impact of general economic conditions
in the United States and abroad, particularly in information
technology spending and government budgets, on our business; risks
associated with our ability to keep pace with technological
changes, evolving industry standards and challenges, to adapt to
changing market potential from area to area within our markets, and
to successfully develop, launch, and drive demand for new,
innovative, high-quality products that meet or exceed customer
needs, while simultaneously preserving our legacy businesses and
migrating away from areas of commoditization; risks due to
aggressive competition in all of our markets, including with
respect to maintaining revenues, margins, and sufficient levels of
investment in our business and operations; risks created by the
continued consolidation of our competitors or the introduction of
large competitors in our markets with greater resources than we
have; risks associated with our ability to successfully compete
for, consummate, and implement mergers and acquisitions, including
risks associated with valuations, reputational considerations,
capital constraints, costs and expenses, maintaining profitability
levels, expansion into new areas, management distraction,
post-acquisition integration activities, and potential asset
impairments; risks relating to our ability to properly manage
investments in our business and operations, execute on growth
initiatives, and enhance our existing operations and
infrastructure, including the proper prioritization and allocation
of limited financial and other resources; risks associated with our
ability to retain, recruit, and train qualified personnel in
regions in which we operate, including in new markets and growth
areas we may enter; risks that we may be unable to establish and
maintain relationships with key resellers, partners, and systems
integrators and risks associated with our reliance on third-party
suppliers, partners, or original equipment manufacturers (“OEMs”)
for certain components, products, or services, including companies
that may compete with us or work with our competitors; risks
associated with the mishandling or perceived mishandling of
sensitive or confidential information, including information that
may belong to our customers or other third parties, and with
security vulnerabilities or lapses, including cyber-attacks,
information technology system breaches, failures, or disruptions;
risks that our products or services, or those of third-party
suppliers, partners, or OEMs which we use in or with our offerings
or otherwise rely on, including third-party hosting platforms, may
contain defects, develop operational problems, or be vulnerable to
cyber-attacks; risks associated with our significant international
operations, including, among others, in Israel, Europe, and Asia,
exposure to regions subject to political or economic instability,
fluctuations in foreign exchange rates, and challenges associated
with a significant portion of our cash being held overseas; risks
associated with political factors related to our business or
operations, including reputational risks associated with our
security solutions and our ability to maintain security clearances
where required as well as risks associated with a significant
amount of our business coming from domestic and foreign government
customers; risks associated with complex and changing local and
foreign regulatory environments in the jurisdictions in which we
operate, including, among others, with respect to trade compliance,
anti-corruption, information security, data privacy and protection,
tax, labor, government contracts, relating to both our own
operations as well as the use of our solutions by our customers;
challenges associated with selling sophisticated solutions,
including with respect to assisting customers in understanding and
realizing the benefits of our solutions, and developing, offering,
implementing, and maintaining a broad and sophisticated solution
portfolio; challenges associated with pursuing larger sales
opportunities, including with respect to longer sales cycles,
transaction reductions, deferrals, or cancellations during the
sales cycle, risk of customer concentration, our ability to
accurately forecast when a sales opportunity will convert to an
order, or to forecast revenue and expenses, and increased
volatility of our operating results from period to period; risks
that our intellectual property rights may not be adequate to
protect our business or assets or that others may make claims on
our intellectual property, claim infringement on their intellectual
property rights, or claim a violation of their license rights,
including relative to free or open source components we may use;
risks that our customers or partners delay or cancel orders or are
unable to honor contractual commitments due to liquidity issues,
challenges in their business, or otherwise; risks that we may
experience liquidity or working capital issues and related risks
that financing sources may be unavailable to us on reasonable terms
or at all; risks associated with significant leverage resulting
from our current debt position or our ability to incur additional
debt, including with respect to liquidity considerations, covenant
limitations and compliance, fluctuations in interest rates,
dilution considerations (with respect to our convertible notes),
and our ability to maintain our credit ratings; risks arising as a
result of contingent or other obligations or liabilities assumed in
our acquisition of our former parent company, Comverse Technology,
Inc. (“CTI”), or associated with formerly being consolidated with,
and part of a consolidated tax group with, CTI, or as a result of
the successor to CTI's business operations, Mavenir, Inc., being
unwilling or unable to provide us with certain indemnities to which
we are entitled; risks relating to the adequacy of our existing
infrastructure, systems, processes, policies, procedures, and
personnel and our ability to successfully implement and maintain
enhancements to the foregoing and adequate systems and internal
controls for our current and future operations and reporting needs,
including related risks of financial statement omissions,
misstatements, restatements, or filing delays; risks associated
with changing accounting principles or standards, tax laws and
regulations, tax rates, and the continuing availability of expected
tax benefits; and risks associated with market volatility in the
prices of our common stock and convertible notes based on our
performance, third-party publications or speculation, or other
factors. We assume no obligation to revise or update any
forward-looking statement, except as otherwise required by law. For
a detailed discussion of these risk factors, see our Annual Report
on Form 10-K for the fiscal year ended January 31, 2019, when
filed, and other filings we make with the SEC.
VERINT, ACTIONABLE INTELLIGENCE, THE CUSTOMER ENGAGEMENT
COMPANY, NEXT IT, FORESEE, OPINIONLAB, KIRAN ANALYTICS, TERROGENCE,
SENSECY, CUSTOMER ENGAGEMENT SOLUTIONS, CYBER INTELLIGENCE
SOLUTIONS, EDGEVR, RELIANT, VANTAGE, STAR-GATE, SUNTECH, and VIGIA
are trademarks or registered trademarks of Verint Systems Inc. or
its subsidiaries. Other trademarks mentioned are the property of
their respective owners.
Table 1 VERINT SYSTEMS INC.
AND SUBSIDIARIES Consolidated Statements of Operations
(Unaudited) Three Months Ended
January 31,
Year Ended
January 31,
(in thousands, except per share data)
2019
2018 2019 2018 Revenue: Product
$ 127,074 $ 120,606 $ 454,650 $ 399,662 Service and support 203,156
198,125 775,097 735,567
Total
revenue 330,230 318,731
1,229,747 1,135,229 Cost of
revenue: Product 29,005 33,281 129,922 131,989 Service and
support 75,046 70,654 293,888 276,582 Amortization of acquired
technology 6,524 9,970 25,403 38,216
Total cost of revenue 110,575 113,905
449,213 446,787 Gross
profit 219,655 204,826
780,534 688,442 Operating
expenses: Research and development, net 53,113 48,732 209,106
190,643 Selling, general and administrative 114,701 112,355 426,183
414,960 Amortization of other acquired intangible assets 8,289
7,482 31,010 34,209
Total operating
expenses 176,103 168,569
666,299 639,812 Operating income
43,552 36,257 114,235
48,630 Other income (expense), net: Interest
income 1,531 684 4,777 2,477 Interest expense (9,674 ) (8,962 )
(37,344 ) (35,959 ) Losses on early retirements of debt — (216 ) —
(2,150 ) Other (expense) income, net (1,712 ) 3,373 (3,906 )
5,902
Total other expense, net (9,855 )
(5,121 ) (36,473 ) (29,730
) Income before provision for income taxes
33,697 31,136 77,762 18,900 Provision
for income taxes 5,389 12,850 7,542 22,354
Net income (loss) 28,308 18,286
70,220 (3,454 ) Net income attributable to
noncontrolling interests 1,002 1,189 4,229
3,173
Net income (loss) attributable to Verint Systems
Inc. $ 27,306 $ 17,097
$ 65,991 $ (6,627
) Net income (loss) per common share attributable
to Verint Systems Inc.: Basic $ 0.42
$ 0.27 $ 1.02
$ (0.10 ) Diluted $ 0.41
$ 0.26 $ 1.00
$ (0.10 ) Weighted-average common
shares outstanding: Basic 65,305
63,811 64,913 63,312
Diluted 66,504 65,139
66,245 63,312
Table 2 VERINT SYSTEMS INC. AND SUBSIDIARIES
Segment Revenue (Unaudited) Three Months
Ended
January 31,
Year Ended
January 31,
(in thousands)
2019 2018 2019 2018
GAAP Revenue By Segment: Customer Engagement $ 211,557 $
208,424 $ 796,287 $ 740,067 Cyber Intelligence 118,673
110,307 433,460 395,162
GAAP Total Revenue
$ 330,230 $ 318,731
$ 1,229,747 $ 1,135,229
Revenue Adjustments: Customer Engagement $ 6,233 $ 3,906 $
15,059 $ 14,971 Cyber Intelligence 200 89 293
258
Total Revenue Adjustments $ 6,433
$ 3,995 $ 15,352 $
15,229 Non-GAAP Revenue By Segment: Customer
Engagement $ 217,790 $ 212,330 $ 811,346 $ 755,038 Cyber
Intelligence 118,873 110,396 433,753 395,420
Non-GAAP Total Revenue $ 336,663
$ 322,726 $ 1,245,099
$ 1,150,458 Table
3 VERINT SYSTEMS INC. AND SUBSIDIARIES Reconciliation
of GAAP to Non-GAAP Results (Unaudited) Three
Months Ended
January 31,
Year Ended
January 31,
(in thousands, except per share data)
2019
2018 2019 2018
Table of
Reconciliation from GAAP Gross Profit to Non-GAAP Gross
Profit
GAAP gross profit $ 219,655
$ 204,826 $ 780,534
$ 688,442 GAAP gross margin 66.5
% 64.3 % 63.5 % 60.6
% Revenue adjustments 6,433 3,995 15,352 15,229 Amortization
of acquired technology 6,524 9,970 25,403 38,216 Stock-based
compensation expenses 1,577 2,597 5,735 8,465 Acquisition expenses,
net 358 22 347 113 Restructuring expenses 366 286
1,503 2,223
Non-GAAP gross profit $
234,913 $ 221,696 $
828,874 $ 752,688 Non-GAAP
gross margin 69.8 % 68.7 %
66.6 % 65.4 %
Table of
Reconciliation from GAAP Operating Income to Non-GAAP Operating
Income
GAAP operating income $ 43,552
$ 36,257 $ 114,235
$ 48,630 As a percentage of GAAP
revenue 13.2 % 11.4 % 9.3
% 4.3 % Revenue adjustments 6,433 3,995 15,352
15,229 Amortization of acquired technology 6,524 9,970 25,403
38,216 Amortization of other acquired intangible assets 8,289 7,482
31,010 34,209 Stock-based compensation expenses 16,148 18,913
66,657 69,366 Acquisition expenses, net 5,651 (859 ) 9,927 1,596
Restructuring expenses 1,925 1,960 4,944 13,517 Impairment charges
— 3,324 — 3,324 Other adjustments (355 ) 970 (633 ) 2,061
Non-GAAP operating income $ 88,167
$ 82,012 $ 266,895
$ 226,148 As a percentage of non-GAAP
revenue 26.2 % 25.4 % 21.4
% 19.7 %
Table of
Reconciliation from GAAP Other Expense, Net to Non-GAAP Other
Expense, Net
GAAP other expense, net $ (9,855
) $ (5,121 ) $ (36,473
) $ (29,730 ) Unrealized losses (gains)
on derivatives, net 896 (1,359 ) 1,135 (3,236 ) Amortization of
convertible note discount 3,021 2,866 11,850 11,243 Loss on early
retirement of debt — 747 — 2,681 Acquisition expenses, net 58 152
374 862 Restructuring expenses — — — 139
Non-GAAP other expense, net(1) $
(5,880 ) $ (2,715 ) $
(23,114 ) $ (18,041 )
Table of
Reconciliation from GAAP Provision for Income Taxes to Non-GAAP
Provision for Income Taxes
GAAP provision for income taxes $ 5,389
$ 12,850 $ 7,542
$ 22,354 GAAP effective income tax rate
16.0 % 41.3 % 9.7 %
118.3 % Non-GAAP tax adjustments 4,211 (3,436
) 19,345 1,646
Non-GAAP provision for income
taxes $ 9,600 $ 9,414
$ 26,887 $ 24,000
Non-GAAP effective income tax rate 11.7 %
11.9 % 11.0 % 11.5 %
Table of
Reconciliation from GAAP Net Income (Loss) Attributable to Verint
Systems Inc. to Non-GAAP Net Income Attributable to Verint Systems
Inc.
GAAP net income (loss) attributable to Verint Systems
Inc. $ 27,306 $ 17,097
$ 65,991 $ (6,627
) Revenue adjustments 6,433 3,995 15,352 15,229 Amortization
of acquired technology 6,524 9,970 25,403 38,216 Amortization of
other acquired intangible assets 8,289 7,482 31,010 34,209
Stock-based compensation expenses 16,148 18,913 66,657 69,366
Unrealized losses (gains) on derivatives, net 896 (1,359 ) 1,135
(3,236 ) Amortization of convertible note discount 3,021 2,866
11,850 11,243 Loss on early retirement of debt — 747 — 2,681
Acquisition expenses, net 5,709 (707 ) 10,301 2,458 Restructuring
expenses 1,925 1,960 4,944 13,656 Impairment charges — 3,324 —
3,324 Other adjustments (355 ) 970 (633 ) 2,061 Non-GAAP tax
adjustments (4,211 ) 3,436 (19,345 ) (1,646 ) Total GAAP net
income (loss) adjustments 44,379 51,597 146,674
187,561
Non-GAAP net income attributable to Verint
Systems Inc. $ 71,685 $
68,694 $ 212,665 $
180,934
Table Comparing
GAAP Diluted Net Income (Loss) Per Common Share Attributable to
Verint Systems Inc. to Non-GAAP Diluted Net Income Per Common Share
Attributable to Verint Systems Inc.
GAAP diluted net income (loss) per common share attributable
to Verint Systems Inc. $ 0.41 $ 0.26 $ 1.00 $
(0.10 ) Non-GAAP diluted net income per common share attributable
to Verint Systems Inc. $ 1.08 $ 1.05 $ 3.21 $
2.81
GAAP weighted-average shares used in
computing diluted net income (loss) per common share attributable
to Verint Systems Inc. 66,504 65,139
66,245 63,312 Additional weighted-average shares
applicable to non-GAAP diluted net income per common share
attributable to Verint Systems Inc. — — —
1,046
Non-GAAP diluted weighted-average shares used in
computing net income per common share attributable to Verint
Systems Inc. 66,504 65,139
66,245 64,358
Table of
Reconciliation from GAAP Net Income (Loss) Attributable to Verint
Systems Inc. to Adjusted EBITDA
GAAP net income (loss) attributable to Verint Systems
Inc. $ 27,306 $ 17,097
$ 65,991 $ (6,627
) As a percentage of GAAP revenue 8.3 %
5.4 % 5.4 % (0.6 )% Net
income attributable to noncontrolling interest 1,002 1,189 4,229
3,173 Provision for income taxes 5,389 12,850 7,542 22,354 Other
expense, net 9,855 5,121 36,473 29,730 Depreciation and
amortization(2) 22,007 25,226 86,242 102,878 Revenue adjustments
6,433 3,995 15,352 15,229 Stock-based compensation expenses 16,148
18,913 66,657 69,366 Acquisition expenses, net 5,651 (859 ) 9,927
1,596 Restructuring expenses 1,927 1,953 4,944 13,506 Impairment
charges — 3,324 — 3,324 Other adjustments (355 ) 970 (633 )
2,061
Adjusted EBITDA $ 95,363
$ 89,779 $ 296,724
$ 256,590 As a percentage of non-GAAP
revenue 28.3 % 27.8 % 23.8
% 22.3 %
Table of
Reconciliation from Gross Debt to Net Debt
January 31,
2019
January 31,
2018
Current maturities of long-term debt $ 4,343 $ 4,500
Long-term debt 777,785 768,484 Unamortized debt discounts and
issuance costs 36,589 50,141
Gross debt
818,717 823,125 Less: Cash and cash
equivalents 369,975 337,942 Restricted cash and cash equivalents,
and restricted time deposits 42,262 33,303 Short-term investments
32,329 6,566
Net debt, excluding long-term
restricted cash, cash equivalents, time deposits, and
investments 374,151 445,314
Long-term restricted cash, cash equivalents, time deposits and
investments 23,193 28,402
Net debt, including
long-term restricted cash, cash equivalents, time deposits, and
investments $ 350,958 $
416,912 (1) For the three months ended
January 31, 2019, non-GAAP other expense, net of $5.9 million was
comprised of $5.4 million of interest and other expense, and $0.5
million of foreign exchange charges primarily related to balance
sheet transactions. (2) Adjusted for financing fee
amortization.
Table 4 VERINT
SYSTEMS INC. AND SUBSIDIARIES Consolidated Balance
Sheets (Unaudited) January 31, (in
thousands, except share and per share data)
2019
2018 Assets Current Assets: Cash and cash
equivalents $ 369,975 $ 337,942 Restricted cash and cash
equivalents, and restricted bank time deposits 42,262 33,303
Short-term investments 32,329 6,566 Accounts receivable, net of
allowance for doubtful accounts of $3.8 million and $2.2 million,
respectively 375,663 296,324 Contract assets 63,389 — Inventories
24,952 19,871 Deferred cost of revenue 10,302 6,096 Prepaid
expenses and other current assets 87,474 82,090
Total current assets 1,006,346 782,192
Property and equipment, net 100,134 89,089 Goodwill
1,417,481 1,388,299 Intangible assets, net 225,183 226,093
Capitalized software development costs, net 13,342 9,228 Long-term
deferred cost of revenue 4,630 2,804 Deferred income taxes 21,040
30,878 Other assets 78,871 52,037
Total assets
$ 2,867,027 $ 2,580,620
Liabilities and Stockholders' Equity Current
Liabilities: Accounts payable $ 71,621 $ 84,639 Accrued
expenses and other current liabilities 208,481 220,265 Current
maturities of long-term debt 4,343 4,500 Contract liabilities
377,376 196,107
Total current liabilities
661,821 505,511 Long-term debt 777,785
768,484 Long-term contract liabilities 30,094 24,519 Deferred
income taxes 43,171 35,305 Other liabilities 93,352 114,465
Total liabilities 1,606,223
1,448,284 Commitments and Contingencies
Stockholders' Equity:
Preferred stock - $0.001 par value;
authorized 2,207,000 shares at January 31, 2019 and 2018,
respectively; none issued.
— —
Common stock - $0.001 par value;
authorized 120,000,000 shares. Issued 66,998,000 and 65,497,000
shares; outstanding 65,333,000 and
63,836,000 shares at January 31, 2019 and 2018, respectively
67 65 Additional paid-in capital 1,586,266 1,519,724 Treasury
stock, at cost - 1,665,000 and 1,661,000 shares at January 31, 2019
and 2018, respectively (57,598 ) (57,425 ) Accumulated deficit
(134,274 ) (238,312 ) Accumulated other comprehensive loss (145,225
) (103,460 )
Total Verint Systems Inc. stockholders' equity
1,249,236 1,120,592 Noncontrolling interests 11,568
11,744
Total stockholders' equity
1,260,804 1,132,336 Total
liabilities and stockholders' equity $ 2,867,027
$ 2,580,620
Table 5 VERINT SYSTEMS INC. AND SUBSIDIARIES
Consolidated Statements of Cash Flows (Unaudited)
Year Ended January 31, (in thousands)
2019
2018 Cash flows from operating activities: Net
income (loss) $ 70,220 $ (3,454 )
Adjustments to reconcile net
income (loss) to net cash provided by operating activities:
Depreciation and amortization 88,915 105,730 Provision for doubtful
accounts 2,746 559 Stock-based compensation, excluding cash-settled
awards 66,657 69,296 Amortization of discount on convertible notes
11,850 11,243 Benefit from deferred income taxes (3,017 ) (7,533 )
Non-cash (gains) losses on derivative financial instruments, net
(2,511 ) 17 Losses on early retirements of debt — 2,150 Other
non-cash items, net (2,328 ) (428 )
Changes in operating
assets and liabilities, net of effects of business
combinations: Accounts receivable (21,520 ) (23,512 ) Contract
assets 5,751 — Inventories (8,208 ) (2,865 ) Deferred cost of
revenue 1,400 282 Prepaid expenses and other assets (6,153 ) (2,030
) Accounts payable and accrued expenses (15,648 ) 10,158 Contract
liabilities 32,919 9,686 Other liabilities (7,328 ) 8,599 Other,
net 1,506 (1,571 )
Net cash provided by operating
activities 215,251 176,327
Cash flows from investing activities: Cash paid for business
combinations, including adjustments, net of cash acquired (90,022 )
(102,978 ) Purchases of property and equipment (31,686 ) (35,530 )
Purchases of investments (59,065 ) (11,875 ) Maturities and sales
of investments 33,118 8,721 Settlements of derivative financial
instruments not designated as hedges 1,335 (1,558 ) Cash paid for
capitalized software development costs (7,320 ) (3,126 ) Change in
restricted bank time deposits, including long-term portion (21,304
) 362 Other investing activities (779 ) (210 )
Net cash used in
investing activities (175,723 ) (146,194
) Cash flows from financing activities:
Proceeds from borrowings, net of original issuance discount —
444,341 Repayments of borrowings and other financing obligations
(5,983 ) (431,888 ) Payments of equity issuance, debt issuance, and
other debt-related costs (206 ) (7,137 ) Proceeds from exercises of
stock options 4 — Dividends paid to noncontrolling interest (4,409
) (3,304 ) Purchases of treasury stock (173 ) — Payments of
contingent consideration for business combinations (financing
portion) and other financing activities (11,114 ) (7,515 )
Net
cash used in financing activities (21,881 )
(5,503 ) Foreign currency effects on cash, cash
equivalents, restricted cash, and restricted cash equivalents
(3,158 ) 4,251
Net increase in cash, cash
equivalents, restricted cash, and restricted cash equivalents
14,489 28,881 Cash, cash equivalents,
restricted cash, and restricted cash equivalents, beginning of
year 398,210 369,329
Cash, cash equivalents, restricted cash, and restricted cash
equivalents, end of year $ 412,699
$ 398,210 Reconciliation of cash,
cash equivalents, restricted cash, and restricted cash equivalents
at end of period to the condensed consolidated balance sheets:
Cash and cash equivalents
$ 369,975 $
337,942 Restricted cash and cash equivalents included in
restricted cash and cash equivalents, and restricted bank time
deposits
40,152 32,955 Restricted cash and cash
equivalents included in other assets
2,572
27,313 Total cash, cash equivalents, restricted
cash, and restricted cash equivalents $ 412,699
$ 398,210
Table 6 VERINT SYSTEMS INC. AND SUBSIDIARIES
Calculation of Change in Revenue on a Constant Currency
Basis (Unaudited)
GAAP Revenue
Non-GAAP Revenue
(in thousands, except percentages)
Three Months
Ended
Year
Ended
Three Months
Ended
Year
Ended
Total Revenue Revenue for the three months and year ended
January 31, 2018 $ 318,731 $ 1,135,229 $ 322,726 $ 1,150,458
Revenue for the three months and year ended January 31, 2019 $
330,230 $ 1,229,747 $ 336,663 $ 1,245,099 Revenue for the three
months and year ended January 31, 2019 at constant currency(1) $
335,000 $ 1,230,000 $ 341,000 $ 1,245,000 Reported
period-over-period revenue growth 3.6 % 8.3 % 4.3 % 8.2 % % impact
from change in foreign currency exchange rates 1.5 %
—
%
1.4
%
— % Constant currency period-over-period revenue growth 5.1
% 8.3 % 5.7 % 8.2 %
Customer Engagement Revenue for
the three months and year ended January 31, 2018 $ 208,424 $
740,067 $ 212,330 $ 755,038 Revenue for the three months and year
ended January 31, 2019 $ 211,557 $ 796,287 $ 217,790 $ 811,346
Revenue for the three months and year ended January 31, 2019 at
constant currency(1) $ 214,000 $ 796,000 $ 220,000 $ 811,000
Reported period-over-period revenue growth 1.5 % 7.6 % 2.6 % 7.5 %
% impact from change in foreign currency exchange rates 1.2 %
— % 1.0 % (0.1 )% Constant currency
period-over-period revenue growth 2.7 % 7.6 % 3.6 % 7.4 %
Cyber Intelligence Revenue for the three months and year
ended January 31, 2018 $ 110,307 $ 395,162 $ 110,396 $ 395,420
Revenue for the three months and year ended January 31, 2019 $
118,673 $ 433,460 $ 118,873 $ 433,753 Revenue for the three months
and year ended January 31, 2019 at constant currency(1) $ 121,000 $
434,000 $ 121,000 $ 434,000 Reported period-over-period revenue
growth 7.6 % 9.7 % 7.7 % 9.7 % % impact from change in foreign
currency exchange rates 2.1 % 0.1 % 1.9 % 0.1 %
Constant currency period-over-period revenue growth 9.7 % 9.8 % 9.6
% 9.8 % (1) Revenue for the three months and year
ended January 31, 2019 at constant currency is calculated by
translating current-period foreign currency revenue into U.S.
dollars using average foreign currency exchange rates for the three
months and year ended January 31, 2018 rather than actual
current-period foreign currency exchange rates. For further
information see "Supplemental Information About Constant Currency"
at the end of this press release.
Table 7 VERINT SYSTEMS INC. AND SUBSIDIARIES GAAP
to Non-GAAP Customer Engagement Cloud Revenue, Recurring
Revenue, and Cloud Annualized Recurring Revenue ("ARR")
calculations using GAAP and Non-GAAP Cloud Revenue
(Unaudited) Year Ended
January 31,
(in thousands)
2019 2018
Table of
Reconciliation from GAAP Cloud Revenue to Non-GAAP Cloud
Revenue
Customer
Engagement
Cloud revenue - GAAP $ 150,743 $
122,043 Estimated revenue adjustments 14,690 12,976
Cloud revenue - non-GAAP $ 165,433
$ 135,019
Table of
Reconciliation from GAAP Recurring Revenue to Non-GAAP Recurring
Revenue
Customer
Engagement
Recurring revenue - GAAP $ 465,671
$ 425,611 As a percentage of GAAP
revenue 58.5 % 57.5 % Estimated
revenue adjustments 15,059 14,971
Recurring
revenue - non-GAAP $ 480,730 $
440,582 As a percentage of non-GAAP revenue
59.3 % 58.4 %
Cloud ARR
calculations using GAAP and Non-GAAP Cloud Revenue
Customer
Engagement
Cloud ARR - calculated using GAAP cloud revenue $
176,648 $ 126,329 Estimated revenue
adjustments 23,188 11,699
Cloud ARR - calculated
using non-GAAP cloud revenue $ 199,836
$ 138,028 Table
8 VERINT SYSTEMS INC. AND SUBSIDIARIES Estimated GAAP
and Non-GAAP Fully Allocated Gross Margins (Unaudited)
Three Months Ended
January 31,
2019 2018 (in thousands)
Customer Engagement
Cyber Intelligence
Consolidated
Customer Engagement
Cyber Intelligence
Consolidated GAAP product revenue $ 65,476 $ 61,598 $
127,074 $ 61,628 $ 58,978 $ 120,606 GAAP service revenue 146,081
57,075 203,156 146,796 51,329
198,125
Total GAAP revenue 211,557
118,673 330,230 208,424
110,307 318,731 Products costs
8,564 19,256 27,820 10,029 21,711 31,740 Service expenses 52,606
18,034 70,640 49,387 16,730 66,117 Amortization of acquired
technology 5,043 1,481 6,524 5,998 3,972 9,970 Stock-based
compensation expenses (1) 1,063 514 1,577 2,101 496 2,597 Shared
support service allocation (2) 2,574 1,440 4,014
2,283 1,198 3,481
Total GAAP cost of
revenue 69,850 40,725
110,575 69,798 44,107
113,905 GAAP gross profit $
141,707 $ 77,948 $
219,655 $ 138,626 $
66,200 $ 204,826 GAAP gross
margin 67.0 % 65.7 % 66.5
% 66.5 % 60.0 % 64.3
% Revenue adjustments 6,233 200 6,433 3,906 89 3,995
Amortization of acquired technology 5,043 1,481 6,524 5,998 3,972
9,970 Stock-based compensation expenses (1) 1,063 514 1,577 2,101
496 2,597 Acquisition expenses, net (3) 233 125 358 14 8 22
Restructuring expenses (3) 234 132 366 187
99 286
Non-GAAP gross profit $
154,513 $ 80,400 $
234,913 $ 150,832 $
70,864 $ 221,696 Non-GAAP
gross margin 70.9 % 67.6 %
69.8 % 71.0 % 64.2 %
68.7 % Year Ended
January 31,
2019 2018 (in thousands)
Customer Engagement
Cyber Intelligence
Consolidated
Customer Engagement
Cyber Intelligence
Consolidated GAAP product revenue $ 221,721 $ 232,929
$ 454,650 $ 184,205 $ 215,457 $ 399,662 GAAP service revenue
574,566 200,531 775,097 555,862 179,705
735,567
Total GAAP revenue 796,287
433,460 1,229,747 740,067
395,162 1,135,229
Products costs 35,018 90,553 125,571 34,657 92,358 127,015 Service
expenses 208,097 69,583 277,680 197,638 61,463 259,101 Amortization
of acquired technology 17,985 7,418 25,403 22,210 16,006 38,216
Stock-based compensation expenses (1) 4,427 1,308 5,735 6,848 1,617
8,465 Shared support service allocation (2) 9,665 5,159
14,824 9,177 4,813 13,990
Total GAAP cost of revenue 275,192
174,021 449,213 270,530
176,257 446,787 GAAP gross
profit $ 521,095 $ 259,439
$ 780,534 $ 469,537
$ 218,905 $ 688,442
GAAP gross margin 65.4 % 59.9
% 63.5 % 63.4 % 55.4
% 60.6 % Revenue adjustments 15,059 293 15,352
14,971 258 15,229 Amortization of acquired technology 17,985 7,418
25,403 22,210 16,006 38,216 Stock-based compensation expenses (1)
4,427 1,308 5,735 6,848 1,617 8,465 Acquisition expenses, net (3)
226 121 347 74 39 113 Restructuring expenses (3) 980 523
1,503 1,458 765 2,223
Non-GAAP gross profit $ 559,772
$ 269,102 $ 828,874
$ 515,098 $ 237,590
$ 752,688 Non-GAAP gross margin
69.0 % 62.0 % 66.6 %
68.2 % 60.1 % 65.4 %
(1) Represents the stock-based compensation expenses
applicable to cost of revenue, allocated proportionally to our year
ended January 31, 2019, when filed, annual operations and service
expense wages for each segment, and the stock-based compensation
expenses applicable to cost of revenue, allocated proportionally to
our year ended January 31, 2018 annual operations and service
expense wages for each segment, which we believe provides a
reasonable approximation for purposes of understanding the relative
GAAP and non-GAAP gross margins of our two businesses. (2)
Represents the portion of our shared support expenses (as disclosed
in footnote 16 to our January 31, 2019 Form 10-K, when filed)
applicable to cost of revenue, allocated proportionally to our year
ended January 31, 2019 annual non-GAAP segment revenue, and our
shared support expenses (as disclosed in footnote 15 to our January
31, 2018 Form 10-K) applicable to cost of revenue, allocated
proportionally to our year ended January 31, 2018 annual non-GAAP
segment revenue, which we believe provides a reasonable
approximation for purposes of understanding the relative GAAP and
non-GAAP gross margins of our two businesses. (3) Represents
the portion of our acquisition expenses, net and restructuring
expenses applicable to cost of revenue, allocated proportionally to
our year ended January 31, 2019, when filed, annual non-GAAP
segment revenue, and our acquisition expenses, net and
restructuring expenses applicable to cost of revenue, allocated
proportionally to our year ended January 31, 2018 annual non-GAAP
segment revenue, which we believe provides a reasonable
approximation for purposes of understanding the relative GAAP and
non-GAAP gross margins of our two businesses.
Table 9 VERINT SYSTEMS INC. AND SUBSIDIARIES
Estimated Non-GAAP Fully Allocated Operating Margins and
Estimated Fully Allocated Adjusted EBITDA (Unaudited)
Three Months Ended
January 31,
2019 2018 (in thousands)
Customer Engagement
Cyber Intelligence
Consolidated
Customer Engagement
Cyber Intelligence
Consolidated Non-GAAP segment revenue
$ 217,790 $ 118,873
$ 336,663 $ 212,330
$ 110,396 $ 322,726
Segment contribution (1) 91,622 39,048 130,670 90,480
32,183 122,663 Estimated allocation of shared support expenses (2)
27,712 14,791 42,503 26,667 13,984
40,651
Estimated non-GAAP operating income
63,910 24,257 88,167
63,813 18,199 82,012
Depreciation and amortization (3) 4,692 2,504 7,196
5,095 2,672 7,767
Estimated adjusted
EBITDA $ 68,602 $ 26,761
$ 95,363 $ 68,908
$ 20,871 $ 89,779
Estimated non-GAAP fully allocated operating margin
29.3 % 20.4 % 26.2 %
30.1 % 16.5 % 25.4 %
Estimated fully allocated adjusted EBITDA margin 31.5
% 22.5 % 28.3 % 32.5
% 18.9 % 27.8 % Year
Ended
January 31,
2019 2018 (in thousands)
Customer Engagement
Cyber Intelligence
Consolidated
Customer Engagement
Cyber Intelligence
Consolidated Non-GAAP segment revenue $
811,346 $ 433,753 $
1,245,099 $ 755,038 $
395,420 $ 1,150,458
Segment contribution (1) 316,776 114,012 430,788 286,236 94,585
380,821 Estimated allocation of shared support expenses (2) 106,858
57,035 163,893 103,465 51,208
154,673
Estimated non-GAAP operating income
209,918 56,977 266,895
182,771 43,377 226,148
Depreciation and amortization (3) 19,449 10,380
29,829 19,970 10,472 30,442
Estimated adjusted EBITDA $ 229,367
$ 67,357 $ 296,724
$ 202,741 $ 53,849
$ 256,590 Estimated non-GAAP fully
allocated operating margin 25.9 % 13.1
% 21.4 % 24.2 % 11.0
% 19.7 % Estimated fully allocated adjusted
EBITDA margin 28.3 % 15.5 %
23.8 % 26.9 % 13.6 %
22.3 % (1) See footnote 16 to our
January 31, 2019 Form 10-K, when filed. (2) Represents our
shared support expenses (as disclosed in footnote 16 to our January
31, 2019 Form 10-K, when filed, and in footnote 15 to our January
31, 2018 Form 10-K), allocated proportionally to our non-GAAP
segment revenue for the years ended January 31, 2019 and January
31, 2018, respectively, which we believe provides a reasonable
approximation for purposes of understanding the relative non-GAAP
operating margins of our two businesses. (3) Represents
certain depreciation and amortization expenses, which are otherwise
included in our non-GAAP operating income, allocated proportionally
to our non-GAAP segment revenue for the years ended January 31,
2019 and January 31, 2018, respectively, which we believe provides
a reasonable approximation for purposes of understanding the
relative adjusted EBITDA of our two businesses.
Verint Systems Inc. and Subsidiaries
Supplemental Information About Non-GAAP Financial
Measures
This press release contains non-GAAP financial measures,
consisting of non-GAAP revenue, non-GAAP recurring revenue,
non-GAAP cloud revenue, cloud annualized recurring revenue (ARR)
calculation using non-GAAP cloud revenue, non-GAAP gross profit and
gross margin, non-GAAP operating income and operating margin,
non-GAAP other income (expense), net, non-GAAP provision (benefit)
for income taxes and non-GAAP effective income tax rate, non-GAAP
net income attributable to Verint Systems Inc., non-GAAP net income
per common share attributable to Verint Systems Inc., adjusted
EBITDA, net debt, constant currency measures, estimated GAAP and
non-GAAP fully allocated gross margins, and estimated non-GAAP
fully allocated operating margins. The tables above include a
reconciliation of each non-GAAP financial measure for completed
periods presented in this press release to the most directly
comparable GAAP financial measure.
We believe these non-GAAP financial measures, used in
conjunction with the corresponding GAAP measures, provide investors
with useful supplemental information about the financial
performance of our business by:
- facilitating the comparison of our
financial results and business trends between periods, including by
excluding certain items that either can vary significantly in
amount and frequency, are based upon subjective assumptions, or in
certain cases are unplanned for or difficult to forecast,
- facilitating the comparison of our
financial results and business trends with other technology
companies who publish similar non-GAAP measures, and
- allowing investors to see and
understand key supplementary metrics used by our management to run
our business, including for budgeting and forecasting, resource
allocation, and compensation matters.
We also make these non-GAAP financial measures available because
a number of our investors have informed us that they find this
supplemental information useful.
Non-GAAP financial measures should not be considered in
isolation as substitutes for, or superior to, comparable GAAP
financial measures. The non-GAAP financial measures we present have
limitations in that they do not reflect all of the amounts
associated with our results of operations as determined in
accordance with GAAP, and these non-GAAP financial measures should
only be used to evaluate our results of operations in conjunction
with the corresponding GAAP financial measures. These non-GAAP
financial measures do not represent discretionary cash available to
us to invest in the growth of our business, and we may in the
future incur expenses similar to or in addition to the adjustments
made in these non-GAAP financial measures. Other companies may
calculate similar non-GAAP financial measures differently than we
do, limiting their usefulness as comparative measures.
Our non-GAAP financial measures are calculated by making the
following adjustments to our GAAP financial measures:
Revenue adjustments. We exclude from our non-GAAP revenue the
impact of fair value adjustments required under GAAP relating to
cloud services and customer support contracts acquired in a
business acquisition, which would have otherwise been recognized on
a stand-alone basis. We believe that it is useful for investors to
understand the total amount of revenue that we and the acquired
company would have recognized on a stand-alone basis under GAAP,
absent the accounting adjustment associated with the business
acquisition. Our non-GAAP revenue also reflects certain adjustments
from aligning an acquired company’s revenue recognition policies to
our policies. We believe that our non-GAAP revenue measure helps
management and investors understand our revenue trends and serves
as a useful measure of ongoing business performance.
Amortization of acquired technology and other acquired
intangible assets. When we acquire an entity, we are required under
GAAP to record the fair values of the intangible assets of the
acquired entity and amortize those assets over their useful lives.
We exclude the amortization of acquired intangible assets,
including acquired technology, from our non-GAAP financial measures
because they are inconsistent in amount and frequency and are
significantly impacted by the timing and size of acquisitions. We
also exclude these amounts to provide easier comparability of pre-
and post-acquisition operating results.
Stock-based compensation expenses. We exclude stock-based
compensation expenses related to restricted stock awards, stock
bonus programs, bonus share programs, and other stock-based awards
from our non-GAAP financial measures. We evaluate our performance
both with and without these measures because stock-based
compensation is typically a non-cash expense and can vary
significantly over time based on the timing, size and nature of
awards granted, and is influenced in part by certain factors which
are generally beyond our control, such as the volatility of the
price of our common stock. In addition, measurement of stock-based
compensation is subject to varying valuation methodologies and
subjective assumptions, and therefore we believe that excluding
stock-based compensation from our non-GAAP financial measures
allows for meaningful comparisons of our current operating results
to our historical operating results and to other companies in our
industry.
Unrealized gains and losses on certain derivatives, net. We
exclude from our non-GAAP financial measures unrealized gains and
losses on certain foreign currency derivatives which are not
designated as hedges under accounting guidance. We exclude
unrealized gains and losses on foreign currency derivatives that
serve as economic hedges against variability in the cash flows of
recognized assets or liabilities, or of forecasted transactions.
These contracts, if designated as hedges under accounting guidance,
would be considered “cash flow” hedges. These unrealized gains and
losses are excluded from our non-GAAP financial measures because
they are non-cash transactions which are highly variable from
period to period. Upon settlement of these foreign currency
derivatives, any realized gain or loss is included in our non-GAAP
financial measures.
Amortization of convertible note discount. Our non-GAAP
financial measures exclude the amortization of the imputed discount
on our convertible notes. Under GAAP, certain convertible debt
instruments that may be settled in cash upon conversion are
required to be bifurcated into separate liability (debt) and equity
(conversion option) components in a manner that reflects the
issuer’s assumed non-convertible debt borrowing rate. For GAAP
purposes, we are required to recognize imputed interest expense on
the difference between our assumed non-convertible debt borrowing
rate and the coupon rate on our $400.0 million of 1.50% convertible
notes. This difference is excluded from our non-GAAP financial
measures because we believe that this expense is based upon
subjective assumptions and does not reflect the cash cost of our
convertible debt.
Losses and expenses on early retirements or modifications of
debt. We exclude from our non-GAAP financial measures losses on
early retirements of debt attributable to refinancing or repaying
our debt, and expenses incurred to modify debt terms, because we
believe they are not reflective of our ongoing operations.
Acquisition expenses, net. In connection with acquisition
activity (including with respect to acquisitions that are not
consummated), we incur expenses, including legal, accounting, and
other professional fees, integration costs, changes in the fair
value of contingent consideration obligations, and other costs.
Integration costs may consist of information technology expenses as
systems are integrated across the combined entity, consulting
expenses, marketing expenses, and professional fees, as well as
non-cash charges to write-off or impair the value of redundant
assets. We exclude these expenses from our non-GAAP financial
measures because they are unpredictable, can vary based on the size
and complexity of each transaction, and are unrelated to our
continuing operations or to the continuing operations of the
acquired businesses.
Restructuring expenses. We exclude restructuring expenses from
our non-GAAP financial measures, which include employee termination
costs, facility exit costs, certain professional fees, asset
impairment charges, and other costs directly associated with
resource realignments incurred in reaction to changing strategies
or business conditions. All of these costs can vary significantly
in amount and frequency based on the nature of the actions as well
as the changing needs of our business and we believe that excluding
them provides easier comparability of pre- and post-restructuring
operating results.
Impairment charges and other adjustments. We exclude from our
non-GAAP financial measures asset impairment charges (other than
those already included within restructuring or acquisition
activity), rent expense for redundant facilities, gains or losses
on sales of property, gains or losses on settlements of certain
legal matters, and certain professional fees unrelated to our
ongoing operations, all of which are unusual in nature and can vary
significantly in amount and frequency.
Non-GAAP income tax adjustments. We exclude our GAAP provision
(benefit) for income taxes from our non-GAAP measures of net income
attributable to Verint Systems Inc., and instead include a non-GAAP
provision for income taxes, determined by applying a non-GAAP
effective income tax rate to our income before provision for income
taxes, as adjusted for the non-GAAP items described above. The
non-GAAP effective income tax rate is generally based upon the
income taxes we expect to pay in the reporting year. Our GAAP
effective income tax rate can vary significantly from year to year
as a result of tax law changes, settlements with tax authorities,
changes in the geographic mix of earnings including acquisition
activity, changes in the projected realizability of deferred tax
assets, and other unusual or period-specific events, all of which
can vary in size and frequency. We believe that our non-GAAP
effective income tax rate removes much of this variability and
facilitates meaningful comparisons of operating results across
periods. Our non-GAAP effective income tax rate for the year ended
January 31, 2019 was 11.0%, and was 11.5% for the year ended
January 31, 2018. We evaluate our non-GAAP effective income tax
rate on an ongoing basis and it can change from time to time. Our
non-GAAP income tax rate can differ materially from our GAAP
effective income tax rate.
Customer Engagement Cloud and Recurring
Revenue Metrics
Recurring revenue, on both a GAAP and non-GAAP basis, is the
portion of our revenue that we believe is likely to be renewed in
the future, and primarily consists of initial and renewal post
contract support, SaaS subscription licenses, and managed services,
which are recognized over time.
Cloud revenue, on both a GAAP and non-GAAP basis, primarily
consists of SaaS subscription licenses and managed services, which
are recognized over time.
Cloud annualized recurring revenue ("ARR") is calculated using
GAAP and non-GAAP cloud revenue excluding term-based license
revenue recognized in our most recently completed three-month
period on an annualized basis, plus term-based license GAAP and
non-GAAP revenue recognized during the most recent trailing
12-month period.
We believe that recurring revenue, cloud revenue, and cloud
annualized recurring revenue provide investors with useful insight
into the nature and sustainability of our revenue streams. The
recurrence of these revenue streams in future periods depends on a
number of factors including contractual periods and customers'
renewal decisions. Please see “Revenue adjustments” above for an
explanation for why we present these revenue numbers on both a GAAP
and non-GAAP basis.
Adjusted EBITDA
Adjusted EBITDA is a non-GAAP measure defined as net income
(loss) before interest expense, interest income, income taxes,
depreciation expense, amortization expense, revenue adjustments,
restructuring expenses, acquisition expenses, and other expenses
excluded from our non-GAAP financial measures as described above.
We believe that adjusted EBITDA is also commonly used by investors
to evaluate operating performance between companies because it
helps reduce variability caused by differences in capital
structures, income taxes, stock-based compensation, accounting
policies, and depreciation and amortization policies. Adjusted
EBITDA is also used by credit rating agencies, lenders, and other
parties to evaluate our creditworthiness.
Net Debt
Net Debt is a non-GAAP measure defined as the sum of long-term
and short-term debt on our consolidated balance sheet, excluding
unamortized discounts and issuance costs, less the sum of cash and
cash equivalents, restricted cash, restricted cash equivalents,
restricted bank time deposits, and restricted investments
(including long-term portions), and short-term investments. We use
this non-GAAP financial measure to help evaluate our capital
structure, financial leverage, and our ability to reduce debt and
to fund investing and financing activities, and believe that it
provides useful information to investors.
Supplemental Information About Constant
Currency
Because we operate on a global basis and transact business in
many currencies, fluctuations in foreign currency exchange rates
can affect our consolidated U.S. dollar operating results. To
facilitate the assessment of our performance excluding the effect
of foreign currency exchange rate fluctuations, we calculate our
GAAP and non-GAAP revenue, cost of revenue, and operating expenses
on both an as-reported basis and a constant currency basis,
allowing for comparison of results between periods as if foreign
currency exchange rates had remained constant. We perform our
constant currency calculations by translating current-period
foreign currency results into U.S. dollars using prior-period
average foreign currency exchange rates or hedge rates, as
applicable, rather than current period exchange rates. We believe
that constant currency measures, which exclude the impact of
changes in foreign currency exchange rates, facilitate the
assessment of underlying business trends.
Unless otherwise indicated, our financial outlook for revenue,
operating margin, and diluted earnings per share, which is provided
on a non-GAAP basis, reflects foreign currency exchange rates
approximately consistent with rates in effect when the outlook is
provided.
We also incur foreign exchange gains and losses resulting from
the revaluation and settlement of monetary assets and liabilities
that are denominated in currencies other than the entity’s
functional currency. We periodically report our historical non-GAAP
diluted net income per share both inclusive and exclusive of these
net foreign exchange gains or losses. Our financial outlook for
diluted earnings per share includes net foreign exchange gains or
losses incurred to date, if any, but does not include potential
future gains or losses.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20190327005763/en/
Investor RelationsAlan
RodenVerint Systems Inc.(631) 962-9304alan.roden@verint.com
Verint Systems (NASDAQ:VRNT)
Historical Stock Chart
From Aug 2024 to Sep 2024
Verint Systems (NASDAQ:VRNT)
Historical Stock Chart
From Sep 2023 to Sep 2024