Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Apr. 30, 2019 | May 15, 2019 | |
Document And Entity Information | ||
Entity Registrant Name | VERINT SYSTEMS INC | |
Entity Central Index Key | 0001166388 | |
Current Fiscal Year End Date | --01-31 | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Document Type | 10-Q | |
Document Period End Date | Apr. 30, 2019 | |
Document Fiscal Year Focus | 2019 | |
Document Fiscal Period Focus | Q1 | |
Amendment Flag | false | |
Entity Common Stock, Shares Outstanding | 65,271,648 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Apr. 30, 2019 | Jan. 31, 2019 |
Current Assets: | ||
Cash and cash equivalents | $ 412,024 | $ 369,975 |
Restricted cash and cash equivalents, and restricted bank time deposits | 39,749 | 42,262 |
Short-term investments | 39,334 | 32,329 |
Accounts receivable, net of allowance for doubtful accounts of $4.5 million and $3.8 million, respectively | 316,101 | 375,663 |
Contract assets | 63,228 | 63,389 |
Inventories | 27,845 | 24,952 |
Prepaid expenses and other current assets | 90,016 | 97,776 |
Total current assets | 988,297 | 1,006,346 |
Property and equipment, net | 102,340 | 100,134 |
Operating lease right-of-use assets | 96,811 | 0 |
Goodwill | 1,431,517 | 1,417,481 |
Intangible assets, net | 219,552 | 225,183 |
Other assets | 119,024 | 117,883 |
Total assets | 2,957,541 | 2,867,027 |
Current Liabilities: | ||
Accounts payable | 65,275 | 71,621 |
Accrued expenses and other current liabilities | 244,983 | 212,824 |
Contract liabilities | 350,488 | 377,376 |
Total current liabilities | 660,746 | 661,821 |
Long-term debt | 780,260 | 777,785 |
Long-term contract liabilities | 32,726 | 30,094 |
Operating lease liabilities | 85,649 | 0 |
Other liabilities | 123,583 | 136,523 |
Total liabilities | 1,682,964 | 1,606,223 |
Commitments and Contingencies | ||
Stockholders' Equity: | ||
Preferred stock - $0.001 par value; authorized 2,207,000 shares at April 30, 2019 and January 31, 2019, respectively; none issued. | 0 | 0 |
Common stock - $0.001 par value; authorized 120,000,000 shares. Issued 67,446,000 and 66,998,000 shares; outstanding 65,773,000 and 65,333,000 shares at April 30, 2019 and January 31, 2019, respectively. | 67 | 67 |
Additional paid-in capital | 1,601,156 | 1,586,266 |
Treasury stock, at cost - 1,673,000 and 1,665,000 shares at April 30, 2019 and January 31, 2019, respectively. | (58,072) | (57,598) |
Accumulated deficit | (132,698) | (134,274) |
Accumulated other comprehensive loss | (149,523) | (145,225) |
Total Verint Systems Inc. stockholders' equity | 1,260,930 | 1,249,236 |
Noncontrolling interests | 13,647 | 11,568 |
Total stockholders' equity | 1,274,577 | 1,260,804 |
Total liabilities and stockholders' equity | $ 2,957,541 | $ 2,867,027 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Apr. 30, 2019 | Jan. 31, 2019 |
Statement of Financial Position [Abstract] | ||
Allowance for Doubtful Accounts | $ 4,512 | $ 3,777 |
Preferred stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Preferred stock, authorized (in shares) | 2,207,000 | 2,207,000 |
Preferred stock, issued (in shares) | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Common stock, authorized (in shares) | 120,000,000 | 120,000,000 |
Common stock, issued (in shares) | 67,446,000 | 66,998,000 |
Common stock, outstanding (in shares) | 65,773,000 | 65,333,000 |
Treasury stock, (in shares) | 1,673,000 | 1,665,000 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | |
Apr. 30, 2019 | Apr. 30, 2018 | |
Revenue: | ||
Product | $ 104,224 | $ 105,864 |
Service and support | 211,035 | 183,343 |
Total revenue | 315,259 | 289,207 |
Cost of revenue: | ||
Product | 28,120 | 34,809 |
Service and support | 79,361 | 71,857 |
Amortization of acquired technology | 6,707 | 7,426 |
Total cost of revenue | 114,188 | 114,092 |
Gross profit | 201,071 | 175,115 |
Operating expenses: | ||
Research and development, net | 57,169 | 52,152 |
Selling, general and administrative | 121,721 | 107,497 |
Amortization of other acquired intangible assets | 7,713 | 7,684 |
Total operating expenses | 186,603 | 167,333 |
Operating income | 14,468 | 7,782 |
Other income (expense), net: | ||
Interest income | 1,426 | 793 |
Interest expense | (9,934) | (9,062) |
Other expense, net | (790) | (464) |
Total other expense, net | (9,298) | (8,733) |
Income (loss) before provision for income taxes | 5,170 | (951) |
Provision for income taxes | 1,409 | 274 |
Net income (loss) | 3,761 | (1,225) |
Net income attributable to noncontrolling interest | 2,185 | 990 |
Net income (loss) attributable to Verint Systems Inc. | $ 1,576 | $ (2,215) |
Net income (loss) per common share attributable to Verint Systems Inc. | ||
Basic (in dollars per share) | $ 0.02 | $ (0.03) |
Diluted (in dollars per share) | $ 0.02 | $ (0.03) |
Weighted-average common shares outstanding | ||
Basic (in shares) | 65,438 | 63,928 |
Diluted (in shares) | 67,088 | 63,928 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Comprehensive Loss - USD ($) $ in Thousands | 3 Months Ended | |
Apr. 30, 2019 | Apr. 30, 2018 | |
Net income (loss) | $ 3,761 | $ (1,225) |
Other comprehensive (loss) income, net of reclassification adjustments: | ||
Foreign currency translation adjustments | (3,962) | (13,628) |
Benefit for income taxes on net increase (decrease) from foreign exchange contracts and interest rate swap designated as hedges | 294 | 78 |
Other comprehensive loss | (4,404) | (19,913) |
Comprehensive loss | (643) | (21,138) |
Comprehensive income attributable to noncontrolling interests | 2,079 | 1,038 |
Comprehensive loss attributable to Verint Systems Inc. | (2,722) | (22,176) |
Foreign currency forward contracts | ||
Other comprehensive (loss) income, net of reclassification adjustments: | ||
Net (decrease) increase from on derivative instruments designated as hedges | 1,281 | (6,583) |
Interest rate swap | ||
Other comprehensive (loss) income, net of reclassification adjustments: | ||
Net (decrease) increase from on derivative instruments designated as hedges | $ (2,017) | $ 220 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Stockholders' Equity - USD ($) $ in Thousands | Total | Common Stock | Additional Paid-in Capital | Treasury Stock | Accumulated Deficit | Accumulated Other Comprehensive Loss | Total Verint Systems Inc. Stockholders' Equity | Noncontrolling Interests |
Balances at Jan. 31, 2018 | $ 1,132,336 | $ 65 | $ 1,519,724 | $ (57,425) | $ (238,312) | $ (103,460) | $ 1,120,592 | $ 11,744 |
Balances (in shares) at Jan. 31, 2018 | 63,836,000 | |||||||
Increase (Decrease) in Stockholders' Equity | ||||||||
Net (loss) income | (1,225) | $ 0 | 0 | 0 | (2,215) | 0 | (2,215) | 990 |
Other comprehensive (loss) income | (19,913) | 0 | 0 | 0 | 0 | (19,961) | (19,961) | 48 |
Stock-based compensation - equity-classified awards | 14,898 | 0 | 14,898 | 0 | 0 | 0 | 14,898 | 0 |
Common stock issued for stock awards and stock bonuses | 1 | $ 1 | 0 | 0 | 0 | 0 | 1 | 0 |
Common stock issued for stock awards and stock bonuses (in shares) | 180,000 | |||||||
Treasury stock acquired | $ (173) | $ 0 | 0 | 173 | 0 | 0 | (173) | 0 |
Treasury stock acquired (in shares) | (4,000) | (4,000) | ||||||
Capital contributions by noncontrolling interest | $ 60 | $ 0 | 0 | 0 | 0 | 0 | 0 | 60 |
Dividends to noncontrolling interest | (760) | 0 | 0 | 0 | 0 | 0 | 0 | (760) |
Balances at Apr. 30, 2018 | 1,163,271 | $ 66 | 1,534,622 | (57,598) | (202,480) | (123,421) | 1,151,189 | 12,082 |
Balances (in shares) at Apr. 30, 2018 | 64,012,000 | |||||||
Increase (Decrease) in Stockholders' Equity | ||||||||
Cumulative effect of new accounting principle in period of adoption | Accounting Standards Update 2014-09 | 38,047 | $ 0 | 0 | 0 | 38,047 | 0 | 38,047 | 0 |
Balances at Jan. 31, 2019 | 1,260,804 | $ 67 | 1,586,266 | (57,598) | (134,274) | (145,225) | 1,249,236 | 11,568 |
Balances (in shares) at Jan. 31, 2019 | 65,333,000 | |||||||
Increase (Decrease) in Stockholders' Equity | ||||||||
Net (loss) income | 3,761 | $ 0 | 0 | 0 | 1,576 | 0 | 1,576 | 2,185 |
Other comprehensive (loss) income | (4,404) | 0 | 0 | 0 | 0 | (4,298) | (4,298) | (106) |
Stock-based compensation - equity-classified awards | 14,890 | 0 | 14,890 | 0 | 0 | 0 | 14,890 | 0 |
Common stock issued for stock awards and stock bonuses | 0 | $ 0 | 0 | 0 | 0 | 0 | 0 | 0 |
Common stock issued for stock awards and stock bonuses (in shares) | 448,000 | |||||||
Treasury stock acquired | $ (474) | $ 0 | 0 | 474 | 0 | 0 | (474) | 0 |
Treasury stock acquired (in shares) | (8,000) | (8,000) | ||||||
Balances at Apr. 30, 2019 | $ 1,274,577 | $ 67 | $ 1,601,156 | $ (58,072) | $ (132,698) | $ (149,523) | $ 1,260,930 | $ 13,647 |
Balances (in shares) at Apr. 30, 2019 | 65,773,000 |
Condensed Consolidated Statem_4
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 3 Months Ended | |
Apr. 30, 2019 | Apr. 30, 2018 | |
Cash flows from operating activities: | ||
Net income (loss) | $ 3,761 | $ (1,225) |
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | ||
Depreciation and amortization | 22,954 | 23,963 |
Stock-based compensation, excluding cash-settled awards | 17,065 | 16,443 |
Amortization of discount on convertible notes | 3,061 | 2,905 |
Non-cash gains on derivative financial instruments, net | (549) | (1,488) |
Other non-cash items, net | 2,646 | (448) |
Changes in operating assets and liabilities, net of effects of business combinations: | ||
Accounts receivable | 58,900 | 45,386 |
Contract assets | (39) | (18,811) |
Inventories | (3,118) | 2,434 |
Prepaid expenses and other assets | 5,268 | (1,028) |
Accounts payable and accrued expenses | 8,487 | (3,027) |
Contract liabilities | (24,648) | (4,543) |
Other, net | (725) | (409) |
Net cash provided by operating activities | 93,063 | 60,152 |
Cash flows from investing activities: | ||
Cash paid for business combinations, including adjustments, net of cash acquired | (20,210) | 0 |
Purchases of property and equipment | (8,331) | (7,747) |
Purchases of investments | (9,995) | (2,792) |
Maturities and sales of investments | 2,965 | 0 |
Cash paid for capitalized software development costs | (2,819) | (1,121) |
Change in restricted cash and bank time deposits, and other investing activities, net | 2,941 | 398 |
Net cash used in investing activities | (35,449) | (11,262) |
Cash flows from financing activities: | ||
Repayments of borrowings and other financing obligations | (1,584) | (1,275) |
Purchases of treasury stock | (474) | (173) |
Dividends paid to noncontrolling interest | 0 | (760) |
Payments of deferred purchase price and contingent consideration for business combinations (financing portion) | (11,674) | (2,584) |
Other financing activities, net | 0 | (15) |
Net cash provided used in financing activities | (13,732) | (4,807) |
Effect of foreign currency exchange rate changes on cash, cash equivalents, restricted cash and restricted cash equivalents | (853) | (1,495) |
Net increase in cash, cash equivalents, restricted cash and restricted cash equivalents | 43,029 | 42,588 |
Cash, cash equivalents, restricted cash, and restricted cash equivalents - beginning of period | 412,699 | 398,210 |
Cash, cash equivalents, restricted cash, and restricted cash equivalents - end of period | 455,728 | 440,798 |
Reconciliation of cash, cash equivalents, restricted cash, and restricted cash equivalents at end of period to balance sheet [Abstract] | ||
Cash and cash equivalents | 412,024 | 382,237 |
Restricted cash and cash equivalents included in restricted cash and cash equivalents, and restricted bank time deposits | 39,373 | 32,541 |
Restricted cash and cash equivalents included in other assets | 4,331 | 26,020 |
Cash, cash equivalents, restricted cash, and restricted cash equivalents - end of period | $ 455,728 | $ 440,798 |
BASIS OF PRESENTATION AND SIGNI
BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES | 3 Months Ended |
Apr. 30, 2019 | |
Accounting Policies [Abstract] | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES Description of Business Unless the context otherwise requires, the terms “Verint”, “we”, “us”, and “our” in these notes to condensed consolidated financial statements refer to Verint Systems Inc. and its consolidated subsidiaries. Verint is a global leader in Actionable Intelligence solutions. In a world of massive information growth, our solutions empower organizations with crucial, actionable insights and enable decision makers to anticipate, respond, and take action. Today, over 10,000 organizations in more than 180 countries, including over 85 percent of the Fortune 100, use Verint’s Actionable Intelligence solutions, deployed in the cloud and on premises, to make more informed, timely and effective decisions. Our Actionable Intelligence leadership is powered by innovative, enterprise-class software built with artificial intelligence, analytics, automation, and deep domain expertise established by working closely with some of the most sophisticated and forward-thinking organizations in the world. Our research and development (“R&D”) team is focused on actionable intelligence and is comprised of approximately 1,900 professionals. Our innovative solutions are backed-up by a strong IP portfolio with approximately 1,000 patents and patent applications worldwide across data capture, artificial intelligence, unstructured data analytics, predictive analytics and automation. Headquartered in Melville, New York, we support our customers around the globe directly and with an extensive network of selling and support partners. Preparation of Condensed Consolidated Financial Statements The condensed consolidated financial statements included herein have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and on the same basis as the audited consolidated financial statements included in our Annual Report on Form 10-K for the year ended January 31, 2019 filed with the U.S. Securities and Exchange Commission (“SEC”), except for the recently adopted accounting pronouncements described below. The condensed consolidated statements of operations, comprehensive loss, stockholders’ equity, and cash flows for the periods ended April 30, 2019 and 2018 , and the condensed consolidated balance sheet as of April 30, 2019 , are not audited but reflect all adjustments that are of a normal recurring nature and that are considered necessary for a fair presentation of the results for the periods shown. The condensed consolidated balance sheet as of January 31, 2019 is derived from the audited consolidated financial statements presented in our Annual Report on Form 10-K for the year ended January 31, 2019 . Certain information and disclosures normally included in annual consolidated financial statements have been omitted pursuant to the rules and regulations of the SEC. Because the condensed consolidated interim financial statements do not include all of the information and disclosures required by GAAP for a complete set of financial statements, they should be read in conjunction with the audited consolidated financial statements and notes included in our Annual Report on Form 10-K for the year ended January 31, 2019 filed with the SEC. The results for interim periods are not necessarily indicative of a full year’s results. Principles of Consolidation The accompanying condensed consolidated financial statements include the accounts of Verint Systems Inc., our wholly owned or otherwise controlled subsidiaries, and a joint venture in which we hold a 50% equity interest. The joint venture is a variable interest entity in which we are the primary beneficiary. Noncontrolling interests in less than wholly owned subsidiaries are reflected within stockholders’ equity on our condensed consolidated balance sheet, but separately from our stockholders’ equity. We hold an option to acquire the noncontrolling interests in two majority owned subsidiaries and we account for the option as an in-substance investment in the noncontrolling common stock of each such subsidiary. We include the fair value of the option within other liabilities and do not recognize noncontrolling interests in these subsidiaries. Equity investments in companies in which we have less than a 20% ownership interest and cannot exercise significant influence, and which do not have readily determinable fair values, are accounted for at cost, adjusted for changes resulting from observable price changes in orderly transactions for an identical or similar investment of the same issuer, less any impairment. We include the results of operations of acquired companies from the date of acquisition. All significant intercompany transactions and balances are eliminated. Use of Estimates The preparation of financial statements in conformity with GAAP requires our management to make estimates and assumptions, which may affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates. Significant Accounting Policies Except for the accounting policy for leases appearing below, implemented as a result of adopting Accounting Standards Update (“ASU”) No. 2016-02, Leases (Topic 842), there have been no material changes in our significant accounting policies during the three months ended April 30, 2019 , as compared to the significant accounting policies described in Note 1 to the consolidated financial statements included in our Annual Report on Form 10-K for the year ended January 31, 2019 . Leases We determine if an arrangement is a lease at inception. Operating lease assets are presented as operating lease right-of-use (“ROU”) assets, and corresponding operating lease liabilities are presented within accrued expenses and other current liabilities (current portions), and as operating lease liabilities (long-term portions), on our condensed consolidated balance sheet. Finance lease assets are included in property and equipment, and corresponding finance lease liabilities are included within accrued expenses and other current liabilities (current portions), and other liabilities (long-term portions), on our condensed consolidated balance sheet. Operating lease ROU assets and operating lease liabilities are recognized based on the present value of the remaining lease payments over the lease term at commencement date. Our leases do not provide an implicit interest rate. We calculate the incremental borrowing rate to reflect the interest rate that we would have to pay to borrow on a collateralized basis an amount equal to the lease payments in a similar economic environment over a similar term, and consider our historical borrowing activities and market data in this determination. The operating lease ROU asset also includes any lease payments made and excludes lease incentives and initial direct costs incurred. Our lease terms may include options to extend or terminate the lease when it is reasonably certain that we will exercise that option. Lease expense for minimum lease payments is recognized on a straight-line basis over the lease term. We have lease agreements with lease and non-lease components, which we account for as a single lease component. Some of our leases contain variable lease payments, which are expensed as incurred unless those payments are based on an index or rate. Variable lease payments based on an index or rate are initially measured using the index or rate in effect at lease commencement and included in the measurement of the lease liability; thereafter, changes to lease payments due to rate or index updates are recorded as rent expense in the period incurred. We have elected not to recognize ROU assets and lease liabilities for short-term leases that have a term of 12 months or less. The effect of short-term leases on our ROU assets and lease liabilities was not material. Our lease agreements do not contain any material residual value guarantees or material restrictive covenants. In addition, we do not have any related party leases and our sublease transactions are de minimis. Recently Adopted Accounting Pronouncements In February 2016, the Financial Accounting Standards Board (“FASB”) issued ASU No. 2016-02, Leases (Topic 842) . ASU No. 2016-02 supersedes the requirements in Topic 840, Leases , and requires lessees to recognize ROU assets and liabilities for leases with lease terms of more than 12 months. We adopted ASU No. 2016-02 as of February 1, 2019 using the modified retrospective transition method of applying the new standard at the adoption date. Results for reporting periods beginning on or after February 1, 2019 are presented under the new guidance, while prior periods amounts are not adjusted and continue to be reported in accordance with previous guidance. Disclosures required under the new standard will not be provided for dates and periods before February 1, 2019. The new standard provided a number of optional practical expedients in transition. We elected the transition package of practical expedients available in the standard, which permits us not to reassess under the new standard our prior conclusions about lease identification, lease classification, and initial direct costs and the practical expedient to not account for lease and non-lease components separately. We did not elect the use-of-hindsight or the practical expedient pertaining to land easements; the latter not being applicable to us. The adoption of ASU No. 2016-02 resulted in the recognition of ROU assets of approximately $100.4 million and lease liabilities for operating leases of approximately $110.4 million on our consolidated balance sheet as of February 1, 2019 with no material impact to our consolidated statements of operations. The ROU assets are lower than the operating lease liabilities primarily because previously recorded net deferred rent balances were reclassified into the ROU assets. There was no impact to our accumulated deficit upon adoption of the standard. The adoption of the new standard also resulted in significant additional disclosures regarding our leasing activities. Please refer to Note 14, “Leases” for further details. In February 2018, the FASB issued ASU 2018-02, Income Statement-Reporting Comprehensive Income (Topic 220) : Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income, which provides companies the option to reclassify from accumulated other comprehensive income to retained earnings the stranded tax effects resulting from the Tax Cuts and Jobs Act of 2017 (the “2017 Tax Act”). The stranded tax effect represents the difference between the amount previously recorded in other comprehensive income at the historical U.S. federal tax rate that remains in accumulated other comprehensive loss at the time the 2017 Tax Act was effective and the amount that would have been recorded using the newly enacted rate. We adopted this guidance on February 1, 2019, and the adoption did not have an impact on our condensed consolidated financial statements. In June 2018, the FASB issued ASU No. 2018-07, Compensation - Stock Compensation (Topic 718) - Improvements to Nonemployee Share-Based Payment Accounting , to simplify the accounting for nonemployee share-based payment transactions by expanding the scope of ASC Topic 718, Compensation - Stock Compensation , to include share-based payment transactions for acquiring goods and services from nonemployees. Under the new standard, most of the guidance on stock compensation payments to nonemployees would be aligned with the requirements for share-based payments granted to employees. Adoption of this standard had an immaterial impact on our condensed consolidated financial statements. New Accounting Pronouncements Not Yet Effective In August 2018, the FASB issued ASU 2018-15, Intangibles-Goodwill and Other-Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract , which clarifies the accounting for implementation costs in cloud computing arrangements. This standard is effective for annual reporting periods beginning after December 15, 2019, including interim reporting periods within those annual reporting periods, with early adoption permitted. We are currently reviewing this standard to assess the impact on our condensed consolidated financial statements. In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework-Changes to The Disclosure Requirements for Fair Value Measurement , which modifies the disclosure requirements on fair value measurements. This standard is effective for annual reporting periods beginning after December 15, 2019, including interim reporting periods within those annual reporting periods, with early adoption permitted. We are currently reviewing this standard to assess the impact on our condensed consolidated financial statements. In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments - Credit Losses (Topic 326) - Measurement of Credit Losses on Financial Instruments. This new standard changes the impairment model for most financial assets and certain other instruments. Entities will be required to use a model that will result in the earlier recognition of allowances for losses for trade and other receivables, held-to-maturity debt securities, loans, and other instruments. For available-for-sale debt securities with unrealized losses, the losses will be recognized as allowances rather than as reductions in the amortized cost of the securities. The new standard is effective for annual periods, and for interim periods within those annual periods, beginning after December 15, 2019, with early adoption permitted. We are currently reviewing this standard to assess the impact on our condensed consolidated financial statements. |
REVENUE RECOGNITION REVENUE REC
REVENUE RECOGNITION REVENUE RECOGNITION | 3 Months Ended |
Apr. 30, 2019 | |
Revenue from Contract with Customer [Abstract] | |
Revenue from Contracts with Customer [Text Block] | REVENUE RECOGNITION We derive our revenue primarily from the licensing of our software products and related services and support based on when control of the software passes to our customers or the services are provided, in an amount that reflects the consideration we expect to be entitled to in exchange for such goods or services. Revenue is reported net of applicable sales and use tax, value-added tax and other transaction taxes imposed on the related transaction, including mandatory government charges that are passed through to our customers. We determine revenue recognition through the following five steps: • Identification of the contract, or contracts, with a customer • Identification of the performance obligations in the contract • Determination of the transaction price • Allocation of the transaction price to the performance obligations in the contract • Recognition of revenue when, or as, performance obligations are satisfied. We account for a contract when it has approval and commitment from both parties, the rights of the parties are identified, payment terms are identified, the contract has commercial substance and collectability of consideration is probable. Disaggregation of Revenue The following table provides information about disaggregated revenue for our Customer Engagement and Cyber Intelligence segments by product revenue and service and support revenue, as well as by the recurring or nonrecurring nature of revenue for each business segment. Recurring revenue is the portion of our revenue that we believe is likely to be renewed in the future. The recurrence of these revenue streams in future periods depends on a number of factors including contractual periods and customers' renewal decisions. For our Customer Engagement segment: • Recurring revenue primarily consists of cloud revenue and initial and renewal PCS. ◦ Cloud revenue consists primarily of SaaS revenue with some optional managed services revenue. ◦ SaaS revenue consists predominately of bundled SaaS (software with standard managed services) with some unbundled SaaS (software licensing rights sold separately from managed services and accounted for as term-based licenses). Unbundled SaaS can be deployed in the cloud either by us or a cloud partner. ◦ Bundled SaaS revenue is recognized over time and unbundled SaaS revenue is recognized at a point in time. Unbundled SaaS contracts are eligible to renew after the initial fixed term, which in most cases is between a one-and three-year time frame. • Nonrecurring revenue primarily consists of our perpetual licenses, consulting, implementation and installation services, and training. For our Cyber Intelligence segment: • Recurring revenue primarily consists of initial and renewal PCS, subscription software licenses, and SaaS in certain limited transactions. • Nonrecurring revenue primarily consists of our perpetual licenses, long-term projects including software customizations that are recognized over time as control transfers to the customer using a percentage of completion (“POC”) method, consulting, implementation and installation services, training, and hardware. To conform with the presentation described above, the classification of Customer Engagement unbundled SaaS revenue for the three months ended April 30, 2018 in the table below has been updated to reflect $2.2 million of recurring revenue which had previously been presented within nonrecurring revenue. Three Months Ended April 30, 2019 Three Months Ended April 30, 2018 (in thousands) Customer Engagement Cyber Intelligence Total Customer Engagement Cyber Intelligence Total Revenue: Product $ 54,002 $ 50,222 $ 104,224 $ 48,364 $ 57,500 $ 105,864 Service and support 153,093 57,942 211,035 138,092 45,251 183,343 Total revenue $ 207,095 $ 108,164 $ 315,259 $ 186,456 $ 102,751 $ 289,207 Revenue by recurrence: Recurring revenue $ 123,358 $ 46,817 $ 170,175 $ 107,830 $ 36,150 $ 143,980 Nonrecurring revenue 83,737 61,347 145,084 78,626 66,601 145,227 Total revenue $ 207,095 $ 108,164 $ 315,259 $ 186,456 $ 102,751 $ 289,207 The following table provides a further disaggregation of revenue for our Customer Engagement segment. Three Months Ended April 30, (in thousands) 2019 2018 Customer Engagement revenue: Recurring revenue Cloud $ 47,085 $ 32,805 PCS 76,273 75,025 Total recurring revenue 123,358 107,830 Nonrecurring revenue 83,737 78,626 Total Customer Engagement revenue $ 207,095 $ 186,456 Contract Balances The following table provides information about accounts receivable, contract assets, and contract liabilities from contracts with customers: (in thousands) April 30, 2019 January 31, 2019 Accounts receivable, net $ 316,101 $ 375,663 Contract assets 63,228 63,389 Long-term contract assets (included in other assets) 1,548 1,375 Contract liabilities 350,488 377,376 Long-term contract liabilities 32,726 30,094 Contract assets are rights to consideration in exchange for goods or services that we have transferred to a customer when that right is conditional on something other than the passage of time. The majority of our contract assets represent unbilled amounts related to our significantly customized solutions as the right to consideration is subject to the contractually agreed upon billing schedule. There are two customers in our Cyber Intelligence segment that combined accounted for $84.6 million and $84.3 million of our aggregated accounts receivable and contract assets at April 30, 2019 and January 31, 2019 , respectively. These customers are governmental agencies outside of the U.S. which we believe present insignificant credit risk. Contract liabilities represent consideration received or consideration which is unconditionally due from customers prior to transferring goods or services to the customer under the terms of the contract. Revenue recognized during the three months ended April 30, 2019 and 2018 from amounts included in contract liabilities at the beginning of each period was $134.6 million and $117.3 million , respectively. Remaining Performance Obligations The majority of our arrangements are for periods of up to three years, with a significant portion being one year or less. We had $1.1 billion of remaining performance obligations as of April 30, 2019 . We elected to exclude amounts of variable consideration attributable to sales- or usage-based royalties in exchange for a license of our IP from the remaining performance obligations. We currently expect to recognize approximately 65% of our remaining revenue backlog over the next twelve months and the remainder thereafter. The timing and amount of revenue recognition for our remaining performance obligations is influenced by several factors, including seasonality, the timing of PCS renewals, and the revenue recognition for certain projects, particularly in our Cyber Intelligence segment, that can extend over longer periods of time, delivery under which, for various reasons, may be delayed, modified, or canceled. Further, we have historically generated a large portion of our business each quarter by orders that are sold and fulfilled within the same reporting period. Therefore, the amount of remaining obligations may not be a meaningful indicator of future results. |
NET INCOME (LOSS) PER COMMON SH
NET INCOME (LOSS) PER COMMON SHARE ATTRIBUTABLE TO VERINT SYSTEMS INC. | 3 Months Ended |
Apr. 30, 2019 | |
Earnings Per Share [Abstract] | |
NET INCOME (LOSS) PER COMMON SHARE ATTRIBUTABLE TO VERINT SYSTEMS INC. | NET INCOME (LOSS) PER COMMON SHARE ATTRIBUTABLE TO VERINT SYSTEMS INC. The following table summarizes the calculation of basic and diluted net income (loss) per common share attributable to Verint Systems Inc. for the three months ended April 30, 2019 and 2018 : Three Months Ended (in thousands, except per share amounts) 2019 2018 Net income (loss) $ 3,761 $ (1,225 ) Net income attributable to noncontrolling interests 2,185 990 Net income (loss) attributable to Verint Systems Inc. $ 1,576 $ (2,215 ) Weighted-average shares outstanding: Basic 65,438 63,928 Dilutive effect of employee equity award plans 1,650 — Dilutive effect of 1.50% convertible senior notes — — Dilutive effect of warrants — — Diluted 67,088 63,928 Net income (loss) per common share attributable to Verint Systems Inc.: Basic $ 0.02 $ (0.03 ) Diluted $ 0.02 $ (0.03 ) We excluded the following weighted-average potential common shares from the calculations of diluted net income (loss) per common share during the applicable periods because their inclusion would have been anti-dilutive: Three Months Ended (in thousands) 2019 2018 Common shares excluded from calculation: Stock options and restricted stock-based awards 606 1,587 1.50% convertible senior notes 6,205 6,205 Warrants 6,205 6,205 In periods for which we report a net loss attributable to Verint Systems Inc., basic net loss per common share and diluted net loss per common share are identical since the effect of all potential common shares is anti-dilutive and therefore excluded. Our 1.50% convertible senior notes (“Notes”) will not impact the calculation of diluted net income per share unless the average price of our common stock, as calculated in accordance with the terms of the indenture governing the Notes, exceeds the conversion price of $64.46 per share. Likewise, diluted net income per share will not include any effect from the Warrants (as defined in Note 7, “Long-Term Debt”) unless the average price of our common stock, as calculated under the terms of the Warrants, exceeds the exercise price of $75.00 per share. Our Note Hedges (as defined in Note 7, “Long-Term Debt”) do not impact the calculation of diluted net income per share under the treasury stock method, because their effect would be anti-dilutive. However, in the event of an actual conversion of any or all of the Notes, the common shares that would be delivered to us under the Note Hedges would neutralize the dilutive effect of the common shares that we would issue under the Notes. As a result, actual conversion of any or all of the Notes would not increase our outstanding common stock. Up to 6,205,000 common shares could be issued upon exercise of the Warrants. Further details regarding the Notes, Note Hedges, and the Warrants appear in Note 7, “Long-Term Debt”. |
CASH, CASH EQUIVALENTS AND SHOR
CASH, CASH EQUIVALENTS AND SHORT-TERM INVESTMENTS CASH, CASH EQUIVALENTS AND SHORT-TERM INVESTMENTS | 3 Months Ended |
Apr. 30, 2019 | |
Cash, Cash Equivalents, and Short-term Investments [Abstract] | |
Cash, Cash Equivalents and Short-term Investments | CASH, CASH EQUIVALENTS, AND SHORT-TERM INVESTMENTS The following tables summarize our cash, cash equivalents, and short-term investments as of April 30, 2019 and January 31, 2019 : April 30, 2019 (in thousands) Cost Basis Gross Unrealized Gains Gross Unrealized Losses Estimated Fair Value Cash and cash equivalents: Cash and bank time deposits $ 377,521 $ — $ — $ 377,521 Money market funds 34,503 — — 34,503 Total cash and cash equivalents $ 412,024 $ — $ — $ 412,024 Short-term investments: Bank time deposits $ 39,334 $ — $ — $ 39,334 Total short-term investments $ 39,334 $ — $ — $ 39,334 January 31, 2019 (in thousands) Cost Basis Gross Unrealized Gains Gross Unrealized Losses Estimated Fair Value Cash and cash equivalents: Cash and bank time deposits $ 359,266 $ — $ — $ 359,266 Money market funds 10,709 — — 10,709 Total cash and cash equivalents $ 369,975 $ — $ — $ 369,975 Short-term investments: Bank time deposits $ 32,329 $ — $ — $ 32,329 Total short-term investments $ 32,329 $ — $ — $ 32,329 Bank time deposits which are reported within short-term investments consist of deposits held outside of the U.S. with maturities of greater than 90 days, or without specified maturity dates which we intend to hold for periods in excess of 90 days. All other bank deposits are included within cash and cash equivalents. During the three months ended April 30, 2019 proceeds from maturities and sales of short-term investments were $3.0 million . There were no proceeds from maturities and sales of short-term investments during the three months ended April 30, 2018. |
BUSINESS COMBINATIONS
BUSINESS COMBINATIONS | 3 Months Ended |
Apr. 30, 2019 | |
Business Combinations [Abstract] | |
BUSINESS COMBINATIONS | BUSINESS COMBINATIONS Three Months Ended April 30, 2019 During the three months ended April 30, 2019 , we completed the acquisition of a SaaS workforce optimization company focused on the small and medium-sized business (SMB) market as part of our strategy to expand our SMB portfolio. This company is being integrated into our Customer Engagement segment. This transaction was not material to our condensed consolidated financial statements. Year Ended January 31, 2019 ForeSee Results, Inc. On December 19, 2018, we completed the acquisition of all of the outstanding shares of ForeSee Results, Inc. and all of the outstanding membership interests of RSR Acquisition LLC (together, “ForeSee”), a leading cloud Voice of the Customer (“VOC”) vendor with software solutions designed to measure and benchmark a 360-degree view of the customer across every touch point. ForeSee is based in Ann Arbor, Michigan. The purchase price of $65.2 million consisted of (i) $58.9 million of cash paid at closing, funded from cash on hand, partially offset by $0.4 million of ForeSee’s cash received in the acquisition, resulting in net cash consideration at closing of $58.5 million ; (ii) a post-closing deferred purchase price adjustment of $6.0 million which was paid in April 2019; and (iii) $0.3 million of other purchase price adjustments. The purchase price is subject to customary purchase price adjustments related to the final determination of ForeSee’s cash, net working capital, transaction expenses, and taxes as of December 19, 2018. The acquired business is being integrated into our Customer Engagement operating segment. The purchase price for ForeSee was allocated to the tangible and intangible assets acquired and liabilities assumed based on their estimated fair values on the acquisition date, with the remaining unallocated purchase price recorded as goodwill. The fair value assigned to identifiable intangible assets acquired were determined primarily by using the income approach, which discounts the expected future cash flows to present value using estimates and assumptions determined by management. Among the factors contributing to the recognition of goodwill as a component of the ForeSee purchase price allocation were synergies in products and technologies, and the addition of a skilled, assembled workforce. The $34.7 million of goodwill has been assigned to our Customer Engagement segment. For income tax purposes, $3.3 million of this goodwill is deductible and $31.4 million is not deductible. In connection with the purchase price allocation for ForeSee, the estimated fair value of undelivered performance obligations under customer contracts assumed in the acquisition was determined utilizing a cost build-up approach. The cost build-up approach calculated fair value by estimating the costs required to fulfill the obligations plus a reasonable profit margin, which approximates the amount that we believe would be required to pay a third party to assume the performance obligations. The estimated costs to fulfill the performance obligations were based on the historical direct costs for delivering similar services. As a result, in allocating the purchase price, we recorded $9.8 million of current and long-term contract liabilities, representing the estimated fair value of undelivered performance obligations for which payment had been received, which will be recognized as revenue as the underlying performance obligations are delivered. For undelivered performance obligations for which payment had not been received, we recorded a $10.2 million asset as a component of the purchase price allocation, representing the estimated fair value of these obligations, $5.5 million of which is included within prepaid expenses and other current assets, and $4.7 million of which is included in other assets. We are amortizing this asset over the underlying delivery periods, which adjusts the revenue we recognize for providing these services to its estimated fair value. Transaction and related costs directly related to the acquisition of ForeSee, consisting primarily of professional fees and integration expenses, were $1.5 million for the three months ended April 30, 2019, and were expensed as incurred and are included in selling, general and administrative expenses. The following table sets forth the components and the allocation of the purchase price for our acquisition of ForeSee: (in thousands) Amount Components of Purchase Price: Cash $ 58,901 Deferred purchase price consideration 6,000 Other purchase price adjustments 262 Total purchase price $ 65,163 Allocation of Purchase Price: Net tangible assets (liabilities): Accounts receivable $ 7,245 Other current assets, including cash acquired 8,059 Other assets 6,075 Current and other liabilities (12,868 ) Contract liabilities - current and long-term (9,821 ) Deferred income taxes (11,804 ) Net tangible liabilities (13,114 ) Identifiable intangible assets: Customer relationships 19,500 Developed technology 20,700 Trademarks and trade names 3,400 Total identifiable intangible assets 43,600 Goodwill 34,677 Total purchase price allocations $ 65,163 The acquired customer relationships, developed technology, and trademarks and trade names were assigned estimated useful lives of seven and nine years, four years, and four years, respectively, the weighted average of which is approximately 6.1 years. The acquired identifiable assets are being amortized on a straight-line basis, which we believe approximates the pattern in which the assets are utilized, over their estimated useful lives. Other Business Combinations During the year ended January 31, 2019, we completed three other business combinations: • On July 18, 2018, we completed the acquisition of a business that has been integrated into our Customer Engagement operating segment. • On November 8, 2018, we completed the acquisition of a business that has been integrated into our Cyber Intelligence operating segment, in which we had a $2.2 million , or approximately 19% , noncontrolling equity investment prior to the acquisition. • On November 9, 2018, we acquired certain technology and other assets for use in our Customer Engagement operating segment in a transaction that qualified as a business combination. These business combinations were not individually material to our consolidated financial statements. The combined consideration for these business combinations was approximately $51.3 million , including $33.1 million of combined cash paid at the closings. For two of these business combinations, we also agreed to make potential additional cash payments to the respective former shareholders aggregating up to approximately $35.5 million , contingent upon the achievement of certain performance targets over periods extending through January 2021. The fair value of these contingent consideration obligations was estimated to be $15.9 million at the applicable acquisition dates. The acquisition date fair value of our previously held equity interest was approximately $2.2 million and was included in the measurement of the consideration transferred. Cash paid for these business combinations was funded by cash on hand. The purchase prices for these business combinations were allocated to the tangible and intangible assets acquired and liabilities assumed based on their estimated fair values on the acquisition dates, with the remaining unallocated purchase prices recorded as goodwill. The fair value assigned to identifiable intangible assets acquired were determined primarily by using the income approach, which discounts expected future cash flows to present value using estimates and assumptions determined by management. Included among the factors contributing to the recognition of goodwill in these transactions were synergies in products and technologies, and the addition of skilled, assembled workforces. Of the $25.1 million of goodwill associated with these business combinations, $14.3 million and $10.8 million was assigned to our Customer Engagement and Cyber Intelligence segments, respectively, and for income tax purposes is not deductible. Transaction and related costs, consisting primarily of professional fees and integration expenses, directly related to these acquisitions, totaled $1.9 million for the three months ended April 30, 2019. All transaction and related costs were expensed as incurred and are included in selling, general and administrative expenses. The purchase price allocations for the business combinations completed subsequent to April 30, 2018 have been prepared on a preliminary basis and changes to those allocations may occur as additional information becomes available during the respective measurement periods (up to one year from the respective acquisition dates). Fair values still under review include values assigned to identifiable intangible assets, deferred income taxes, and reserves for uncertain income tax positions. The following table sets forth the components and the allocations of the combined purchase prices for the business combinations, other than ForeSee, completed during the year ended January 31, 2019: (in thousands) Amount Components of Purchase Prices: Cash $ 33,138 Fair value of contingent consideration 15,875 Fair value of previously held equity interest 2,239 Total purchase prices $ 51,252 Allocation of Purchase Prices: Net tangible assets (liabilities): Accounts receivable $ 1,897 Other current assets, including cash acquired 6,901 Other assets 9,432 Current and other liabilities (2,151 ) Contract liabilities - current and long-term (771 ) Deferred income taxes (7,914 ) Net tangible assets 7,394 Identifiable intangible assets: Customer relationships 7,521 Developed technology 10,692 Trademarks and trade names 500 Total identifiable intangible assets 18,713 Goodwill 25,145 Total purchase price allocations $ 51,252 For these acquisitions, customer relationships, developed technology, and trademarks and trade names were assigned estimated useful lives of from seven years to ten years, three years to five years, and four years, respectively, the weighted average of which is approximately 6.6 years. Other Business Combination Information The acquisition date fair values of contingent consideration obligations associated with business combinations are estimated based on probability adjusted present values of the consideration expected to be transferred using significant inputs that are not observable in the market. Key assumptions used in these estimates include probability assessments with respect to the likelihood of achieving the performance targets and discount rates consistent with the level of risk of achievement. At each reporting date, we revalue the contingent consideration obligations to their fair values and record increases and decreases in fair value within selling, general and administrative expenses in our condensed consolidated statements of operations. Changes in the fair value of the contingent consideration obligations result from changes in discount periods and rates, and changes in probability assumptions with respect to the likelihood of achieving the performance targets. For the three months ended April 30, 2019 and 2018 , we recorded a charge of $1.2 million and a benefit of $0.8 million , respectively, within selling, general and administrative expenses for changes in the fair values of contingent consideration obligations associated with business combinations. The aggregate fair values of the remaining contingent consideration obligations associated with business combinations was $61.4 million at April 30, 2019 , of which $30.1 million was recorded within accrued expenses and other current liabilities, and $31.3 million was recorded within other liabilities. Payments of contingent consideration earned under these agreements were $6.4 million and $3.1 million for the three months ended April 30, 2019 and 2018 , respectively. |
INTANGIBLE ASSETS AND GOODWILL
INTANGIBLE ASSETS AND GOODWILL | 3 Months Ended |
Apr. 30, 2019 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
INTANGIBLE ASSETS AND GOODWILL | INTANGIBLE ASSETS AND GOODWILL Acquisition-related intangible assets consisted of the following as of April 30, 2019 and January 31, 2019: April 30, 2019 (in thousands) Cost Accumulated Amortization Net Intangible assets with finite lives: Customer relationships $ 455,804 $ (305,949 ) $ 149,855 Acquired technology 289,317 (227,288 ) 62,029 Trade names 13,422 (5,754 ) 7,668 Distribution network 4,440 (4,440 ) — Total intangible assets $ 762,983 $ (543,431 ) $ 219,552 January 31, 2019 (in thousands) Cost Accumulated Amortization Net Intangible assets with finite lives: Customer relationships $ 452,918 $ (299,549 ) $ 153,369 Acquired technology 285,230 (221,145 ) 64,085 Trade names 12,859 (5,130 ) 7,729 Distribution network 4,440 (4,440 ) — Total intangible assets $ 755,447 $ (530,264 ) $ 225,183 The following table presents net acquisition-related intangible assets by reportable segment as of April 30, 2019 and January 31, 2019 : April 30, January 31, (in thousands) 2019 2019 Customer Engagement $ 214,585 $ 218,738 Cyber Intelligence 4,967 6,445 Total $ 219,552 $ 225,183 Total amortization expense recorded for acquisition-related intangible assets was $14.4 million and $15.1 million for the three months ended April 30, 2019 and 2018 , respectively. The reported amount of net acquisition-related intangible assets can fluctuate from the impact of changes in foreign currency exchange rates on intangible assets not denominated in U.S. dollars. Estimated future amortization expense on finite-lived acquisition-related intangible assets is as follows: (in thousands) Years Ending January 31, Amount 2020 (remainder of year) $ 40,099 2021 46,663 2022 42,942 2023 35,034 2024 25,364 2025 and thereafter 29,450 Total $ 219,552 Goodwill activity for the three months ended April 30, 2019 , in total and by reportable segment, was as follows: Reportable Segment (in thousands) Total Customer Engagement Cyber Intelligence Three Months Ended April 30, 2019: Goodwill, gross, at January 31, 2019 $ 1,484,346 $ 1,326,370 $ 157,976 Accumulated impairment losses through January 31, 2019 (66,865 ) (56,043 ) (10,822 ) Goodwill, net, at January 31, 2019 1,417,481 1,270,327 147,154 Business combinations, including adjustments to prior period acquisitions 16,710 16,710 — Foreign currency translation and other (2,674 ) (2,345 ) (329 ) Goodwill, net, at April 30, 2019 $ 1,431,517 $ 1,284,692 $ 146,825 Balance at April 30, 2019: Goodwill, gross, at April 30, 2019 $ 1,498,382 $ 1,340,735 $ 157,647 Accumulated impairment losses through April 30, 2019 (66,865 ) (56,043 ) (10,822 ) Goodwill, net, at April 30, 2019 $ 1,431,517 $ 1,284,692 $ 146,825 No events or circumstances indicating the potential for goodwill impairment were identified during the three months ended April 30, 2019 . |
LONG-TERM DEBT
LONG-TERM DEBT | 3 Months Ended |
Apr. 30, 2019 | |
Long-term Debt, Unclassified [Abstract] | |
LONG-TERM DEBT | LONG-TERM DEBT The following table summarizes our long-term debt at April 30, 2019 and January 31, 2019: April 30, January 31, (in thousands) 2019 2019 1.50% Convertible Senior Notes $ 400,000 $ 400,000 2017 Term Loan 417,562 418,625 Other debt 53 92 Less: Unamortized debt discounts and issuance costs (33,052 ) (36,589 ) Total debt 784,563 782,128 Less: current maturities 4,303 4,343 Long-term debt $ 780,260 $ 777,785 Current maturities of long-term debt are reported within accrued expenses and other current liabilities on our condensed consolidated balance sheet. 1.50% Convertible Senior Notes On June 18, 2014, we issued $400.0 million in aggregate principal amount of 1.50% convertible senior notes due June 1, 2021 (“Notes”), unless earlier converted by the holders pursuant to their terms. Net proceeds from the Notes after underwriting discounts were $391.9 million . The Notes pay interest in cash semiannually in arrears at a rate of 1.50% per annum. The Notes were issued concurrently with our public issuance of 5,750,000 shares of common stock, the majority of the combined net proceeds of which were used to partially repay certain indebtedness under a prior credit agreement. The Notes are unsecured and are convertible into, at our election, cash, shares of common stock, or a combination of both, subject to satisfaction of specified conditions and during specified periods. If converted, we currently intend to pay cash in respect of the principal amount of the Notes. We currently expect to refinance the Notes at or prior to maturity with new convertible notes or other debt. The Notes have a conversion rate of 15.5129 shares of common stock per $1,000 principal amount of Notes, which represents an effective conversion price of approximately $64.46 per share of common stock and would result in the issuance of approximately 6,205,000 shares if all of the Notes were converted. The conversion rate has not changed since issuance of the Notes, although throughout the term of the Notes, the conversion rate may be adjusted upon the occurrence of certain events. On or after December 1, 2020 until the close of business on the second scheduled trading day immediately preceding the maturity date, holders may surrender their Notes for conversion regardless of whether any of the other specified conditions for conversion have been satisfied. As of April 30, 2019 , the Notes were not convertible. In accordance with accounting guidance for convertible debt with a cash conversion option, we separately accounted for the debt and equity components of the Notes in a manner that reflected our estimated nonconvertible debt borrowing rate. We estimated the debt and equity components of the Notes to be $319.9 million and $80.1 million , respectively, at the issuance date, assuming a 5.00% non-convertible borrowing rate. The equity component was recorded as an increase to additional paid-in capital. The excess of the principal amount of the debt component over its carrying amount (the “debt discount”) is being amortized as interest expense over the term of the Notes using the effective interest method. The equity component is not remeasured as long as it continues to meet the conditions for equity classification. We allocated transaction costs related to the issuance of the Notes, including underwriting discounts, of $7.6 million and $1.9 million to the debt and equity components, respectively. Issuance costs attributable to the debt component of the Notes are presented as a reduction of long-term debt and are being amortized as interest expense over the term of the Notes, and issuance costs attributable to the equity component were netted with the equity component in additional paid-in capital. The carrying amount of the equity component, net of issuance costs, was $78.2 million at April 30, 2019 . As of April 30, 2019 , the carrying value of the debt component was $370.3 million , which is net of unamortized debt discount and issuance costs of $27.1 million and $2.6 million , respectively. Including the impact of the debt discount and related deferred debt issuance costs, the effective interest rate on the Notes was approximately 5.29% at April 30, 2019 . Based on the closing market price of our common stock on April 30, 2019 , the if-converted value of the Notes was less than the aggregate principal amount of the Notes. Note Hedges and Warrants Concurrently with the issuance of the Notes, we entered into convertible note hedge transactions (the “Note Hedges”) and sold warrants (the “Warrants”). The combination of the Note Hedges and the Warrants serves to increase the effective initial conversion price for the Notes to $75.00 per share. The Note Hedges and Warrants are each separate instruments from the Notes. Note Hedges Pursuant to the Note Hedges, we purchased call options on our common stock, under which we have the right to acquire from the counterparties up to approximately 6,205,000 shares of our common stock, subject to customary anti-dilution adjustments, at a price of $64.46 , which equals the initial conversion price of the Notes. Our exercise rights under the Note Hedges generally trigger upon conversion of the Notes and the Note Hedges terminate upon maturity of the Notes, or the first day the Notes are no longer outstanding. The Note Hedges may be settled in cash, shares of our common stock, or a combination thereof, at our option, and are intended to reduce our exposure to potential dilution upon conversion of the Notes. We paid $60.8 million for the Note Hedges, which was recorded as a reduction to additional paid-in capital. As of April 30, 2019 , we had not purchased any shares of our common stock under the Note Hedges. Warrants We sold the Warrants to several counterparties. The Warrants provide the counterparties rights to acquire from us up to approximately 6,205,000 shares of our common stock at a price of $75.00 per share. The Warrants expire incrementally on a series of expiration dates beginning in August 2021. At expiration, if the market price per share of our common stock exceeds the strike price of the Warrants, we will be obligated to issue shares of our common stock having a value equal to such excess. The Warrants could have a dilutive effect on net income per share to the extent that the market value of our common stock exceeds the strike price of the Warrants. Proceeds from the sale of the Warrants were $45.2 million and were recorded as additional paid-in capital. As of April 30, 2019 , no Warrants had been exercised and all Warrants remained outstanding. The Note Hedges and Warrants both meet the requirements for classification within stockholders’ equity, and their respective fair values are not remeasured and adjusted as long as these instruments continue to qualify for stockholders’ equity classification. Credit Agreements 2017 Credit Agreement On June 29, 2017, we entered into a new credit agreement (the “2017 Credit Agreement”) with certain lenders and terminated a prior credit agreement. The 2017 Credit Agreement provides for $725.0 million of senior secured credit facilities, comprised of a $425.0 million term loan maturing on June 29, 2024 (the “2017 Term Loan”) and a $300.0 million revolving credit facility maturing on June 29, 2022 (the “2017 Revolving Credit Facility”), subject to increase and reduction from time to time according to the terms of the 2017 Credit Agreement. The maturity dates of the 2017 Term Loan and 2017 Revolving Credit Facility will be accelerated to March 1, 2021 if on such date any Notes remain outstanding. The majority of the proceeds from the 2017 Term Loan were used to repay all outstanding terms loans under our prior credit agreement. The 2017 Term Loan was subject to an original issuance discount of approximately $0.5 million . This discount is being amortized as interest expense over the term of the 2017 Term Loan using the effective interest method. Interest rates on loans under the 2017 Credit Agreement are periodically reset, at our option, at either a Eurodollar Rate or an ABR rate (each as defined in the 2017 Credit Agreement), plus in each case a margin. On January 31, 2018, we entered into an amendment to the 2017 Credit Agreement (the “2018 Amendment”) providing for, among other things, a reduction of the interest rate margins on the 2017 Term Loan from 2.25% to 2.00% for Eurodollar loans, and from 1.25% to 1.00% for ABR loans. The vast majority of the impact of the 2018 Amendment was accounted for as a debt modification. For the portion of the 2017 Term Loan which was considered extinguished and replaced by new loans, we wrote off $0.2 million of unamortized deferred debt issuance costs as a loss on early retirement of debt during the three months ended January 31, 2018. The remaining unamortized deferred debt issuance costs and discount are being amortized over the remaining term of the 2017 Term Loan. For loans under the 2017 Revolving Credit Facility, the margin is determined by reference to our Consolidated Total Debt to Consolidated EBITDA (each as defined in the 2017 Credit Agreement) leverage ratio (the “Leverage Ratio”). As of April 30, 2019 , the interest rate on the 2017 Term Loan was 4.50% . Taking into account the impact of the original issuance discount and related deferred debt issuance costs, the effective interest rate on the 2017 Term Loan was approximately 4.68% at April 30, 2019 . As of January 31, 2019 the interest rate on 2017 Term Loan was 4.52% . We are required to pay a commitment fee with respect to unused availability under the 2017 Revolving Credit Facility at a rate per annum determined by reference to our Leverage Ratio. The 2017 Term Loan requires quarterly principal payments of approximately $1.1 million , which commenced on August 1, 2017, with the remaining balance due on June 29, 2024. Optional prepayments of loans under the 2017 Credit Agreement are generally permitted without premium or penalty. Our obligations under the 2017 Credit Agreement are guaranteed by each of our direct and indirect existing and future material domestic wholly owned restricted subsidiaries, and are secured by a security interest in substantially all of our assets and the assets of the guarantor subsidiaries, subject to certain exceptions. The 2017 Credit Agreement contains certain customary affirmative and negative covenants for credit facilities of this type. The 2017 Credit Agreement also contains a financial covenant that, solely with respect to the 2017 Revolving Credit Facility, requires us to maintain a Leverage Ratio of no greater than 4.50 to 1 . The limitations imposed by the covenants are subject to certain exceptions as detailed in the 2017 Credit Agreement. The 2017 Credit Agreement provides for events of default with corresponding grace periods that we believe are customary for credit facilities of this type. Upon an event of default, all of our obligations owed under the 2017 Credit Agreement may be declared immediately due and payable, and the lenders’ commitments to make loans under the 2017 Credit Agreement may be terminated. 2017 Credit Agreement Issuance Costs We incurred debt issuance costs of approximately $6.8 million in connection with the 2017 Credit Agreement, of which $4.1 million were associated with the 2017 Term Loan, and $2.7 million were associated with the 2017 Revolving Credit Facility, which were deferred and are being amortized as interest expense over the terms of the facilities under the 2017 Credit Agreement. As noted previously, during the three months ended January 31, 2018, we wrote off $0.2 million of deferred debt issuance costs associated with the 2017 Term Loan as a result of the 2018 Amendment. Deferred debt issuance costs associated with the 2017 Term Loan are being amortized using the effective interest rate method, and deferred debt issuance costs associated with the 2017 Revolving Credit Facility are being amortized on a straight-line basis. Future Principal Payments on Term Loan As of April 30, 2019 , future scheduled principal payments on the 2017 Term Loan were as follows: (in thousands) Years Ending January 31, Amount 2020 (remainder of year) $ 3,187 2021 4,250 2022 4,250 2023 4,250 2024 4,250 2025 and thereafter 397,375 Total $ 417,562 Interest Expense The following table presents the components of interest expense incurred on the Notes and on borrowings under our credit agreements for the three months ended April 30, 2019 and 2018 : Three Months Ended (in thousands) 2019 2018 1.50% Convertible Senior Notes: Interest expense at 1.50% coupon rate $ 1,500 $ 1,500 Amortization of debt discount 3,061 2,904 Amortization of deferred debt issuance costs 289 274 Total Interest Expense - 1.50% Convertible Senior Notes $ 4,850 $ 4,678 Borrowings under Credit Agreements: Interest expense at contractual rates $ 4,645 $ 3,866 Amortization of debt discounts 16 16 Amortization of deferred debt issuance costs 374 378 Total Interest Expense - Borrowings under Credit Agreements $ 5,035 $ 4,260 |
SUPPLEMENTAL CONDENSED CONSOLID
SUPPLEMENTAL CONDENSED CONSOLIDATED FINANCIAL STATEMENT INFORMATION | 3 Months Ended |
Apr. 30, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
SUPPLEMENTAL CONDENSED CONSOLIDATED FINANCIAL STATEMENT INFORMATION | SUPPLEMENTAL CONDENSED CONSOLIDATED FINANCIAL STATEMENT INFORMATION Condensed Consolidated Balance Sheets Inventories consisted of the following as of April 30, 2019 and January 31, 2019: April 30, January 31, (in thousands) 2019 2019 Raw materials $ 11,819 $ 10,875 Work-in-process 6,091 5,567 Finished goods 9,935 8,510 Total inventories $ 27,845 $ 24,952 Condensed Consolidated Statements of Operations Other expense, net consisted of the following for the three months ended April 30, 2019 and 2018 : Three Months Ended (in thousands) 2019 2018 Foreign currency losses, net $ (1,187 ) $ (1,835 ) Gains on derivative financial instruments, net 549 1,488 Other, net (152 ) (117 ) Total other expense, net $ (790 ) $ (464 ) Condensed Consolidated Statements of Cash Flows The following table provides supplemental information regarding our condensed consolidated cash flows for the three months ended April 30, 2019 and 2018 : Three Months Ended April 30, (in thousands) 2019 2018 Cash paid for interest $ 4,673 $ 2,647 Cash (refunds) payments of income taxes, net $ (1,513 ) $ 4,999 Non-cash investing and financing transactions: Accrued but unpaid purchases of property and equipment $ 3,301 $ 3,397 Inventory transfers to property and equipment $ 73 $ 603 Liabilities for contingent consideration in business combinations, including measurement period adjustments $ 5,200 $ 69 |
STOCKHOLDERS' EQUITY
STOCKHOLDERS' EQUITY | 3 Months Ended |
Apr. 30, 2019 | |
Stockholders' Equity Note [Abstract] | |
STOCKHOLDERS' EQUITY | STOCKHOLDERS’ EQUITY Dividends on Common Stock We did not declare or pay any dividends on our common stock during the three months ended April 30, 2019 and 2018 . Under the terms of our 2017 Credit Agreement, we are subject to certain restrictions on declaring and paying dividends on our common stock. Share Repurchase Program On March 29, 2016, we announced that our board of directors had authorized a common stock repurchase program of up to $150.0 million over two years. This program expired on March 29, 2018. We made a total of $46.9 million in repurchases under the program. Treasury Stock Repurchased shares of common stock are recorded as treasury stock, at cost, but may from time to time be retired. We periodically purchase treasury stock from directors, officers, and other employees to facilitate income tax withholding by us or the payment of required income taxes by such holders in connection with the vesting of equity awards. During the three months ended April 30, 2019 , we repurchased approximately 8,000 shares of treasury stock for a cost of $0.5 million to facilitate income tax withholding and payment requirements upon vesting of equity awards. During the three months ended April 30, 2018 , we acquired approximately 4,000 shares of stock in a nonmonetary transaction valued at $0.2 million . At April 30, 2019 , we held approximately 1,673,000 shares of treasury stock with a cost of $58.1 million . At January 31, 2019 , we held approximately 1,665,000 shares of treasury stock with a cost of $57.6 million . Accumulated Other Comprehensive Income (Loss) Accumulated other comprehensive income (loss) includes items such as foreign currency translation adjustments and unrealized gains and losses on certain marketable securities and derivative financial instruments designated as hedges. Accumulated other comprehensive income (loss) is presented as a separate line item in the stockholders’ equity section of our condensed consolidated balance sheets. Accumulated other comprehensive income (loss) items have no impact on our net income (loss) as presented in our condensed consolidated statements of operations. The following table summarizes changes in the components of our accumulated other comprehensive income (loss) by component for the three months ended April 30, 2019 : (in thousands) Unrealized Gains (Losses) on Foreign Exchange Contracts Designated as Hedges Unrealized Loss on Interest Rate Swap Designated as Hedge Foreign Currency Translation Adjustments Total Accumulated other comprehensive loss at January 31, 2019 $ (981 ) $ (3,043 ) $ (141,201 ) $ (145,225 ) Other comprehensive income (loss) before reclassifications 306 (1,593 ) (3,856 ) (5,143 ) Amounts reclassified out of accumulated other comprehensive loss (845 ) — — (845 ) Net other comprehensive income (loss) 1,151 (1,593 ) (3,856 ) (4,298 ) Accumulated other comprehensive income (loss) at $ 170 $ (4,636 ) $ (145,057 ) $ (149,523 ) All amounts presented in the table above are net of income taxes, if applicable. The accumulated net losses in foreign currency translation adjustments primarily reflect the strengthening of the U.S. dollar against the British pound sterling, which has resulted in lower U.S. dollar-translated balances of British pound sterling-denominated goodwill and intangible assets. The amounts reclassified out of accumulated other comprehensive income (loss) into the condensed consolidated statement of operations, with presentation location, for the three months ended April 30, 2019 and 2018 were as follows: Three Months Ended April 30, (in thousands) 2019 2018 Location Unrealized (losses) gains on derivative financial instruments: Foreign currency forward contracts $ (72 ) $ 37 Cost of product revenue (84 ) 40 Cost of service and support revenue (472 ) 220 Research and development, net (311 ) 136 Selling, general and administrative (939 ) 433 Total, before income taxes 94 (43 ) Benefit (provision) for income taxes $ (845 ) $ 390 Total, net of income taxes |
INCOME TAXES
INCOME TAXES | 3 Months Ended |
Apr. 30, 2019 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | INCOME TAXES Our interim provision (benefit) for income taxes is measured using an estimated annual effective income tax rate, adjusted for discrete items that occur within the periods presented. For the three months ended April 30, 2019 , we recorded an income tax provision of $1.4 million on pre-tax income of $5.2 million , which represented an effective income tax rate of 27.3% . The effective tax rate differs from the U.S. federal statutory rate of 21% primarily due to the impact of U.S. taxation of certain foreign activities, offset by lower statutory rates in several foreign jurisdictions. For the three months ended April 30, 2018 , we recorded an income tax provision of $0.3 million on a pre-tax loss of $1.0 million , which represented a negative effective income tax rate of 28.8% . The income tax provision does not include income tax benefits on losses incurred by certain domestic and foreign operations where we maintained valuation allowances. Our pre-tax losses in U.S. federal, state, and foreign jurisdictions where we maintained valuation allowances and did not record tax benefits were higher than the pre-tax income in jurisdictions where we recorded tax provisions. As required by the authoritative guidance on accounting for income taxes, we evaluate the realizability of deferred income tax assets on a jurisdictional basis at each reporting date. Accounting guidance for income taxes requires that a valuation allowance be established when it is more-likely-than-not that all or a portion of the deferred income tax assets will not be realized. In circumstances where there is sufficient negative evidence indicating that the deferred income tax assets are not more-likely-than-not realizable, we establish a valuation allowance. We determined that there is sufficient negative evidence to maintain the valuation allowances against certain state and foreign deferred income tax assets as a result of historical losses in the most recent three-year period in certain state and foreign jurisdictions. As of January 31, 2019, we had a net federal deferred tax liability position in the U.S. and therefore no valuation allowance was recorded in relation to U.S. federal deferred tax items. We intend to maintain valuation allowances until sufficient positive evidence exists to support a reversal. We had unrecognized income tax benefits of $110.1 million and $109.1 million (excluding interest and penalties) as of April 30, 2019 and January 31, 2019, respectively. The accrued liability for interest and penalties was $5.2 million and $4.6 million at April 30, 2019 and January 31, 2019, respectively. Interest and penalties are recorded as a component of the provision for income taxes in our condensed consolidated statements of operations. As of April 30, 2019 and January 31, 2019, the total amount of unrecognized income tax benefits that, if recognized, would impact our effective income tax rate were approximately $101.8 million and $100.9 million , respectively. We regularly assess the adequacy of our provisions for income tax contingencies in accordance with the applicable authoritative guidance on accounting for income taxes. As a result, we may adjust the reserves for unrecognized income tax benefits for the impact of new facts and developments, such as changes to interpretations of relevant tax law, assessments from taxing authorities, settlements with taxing authorities, and lapses of statutes of limitation. Further, we believe that it is reasonably possible that the total amount of unrecognized income tax benefits at April 30, 2019 could decrease by approximately $5.8 million in the next twelve months as a result of settlement of certain tax audits or lapses of statutes of limitation. Such decreases may involve the payment of additional income taxes, the adjustment of deferred income taxes including the need for additional valuation allowances, and the recognition of income tax benefits. Our income tax returns are subject to ongoing tax examinations in several jurisdictions in which we operate. We also believe that it is reasonably possible that new issues may be raised by tax authorities or developments in tax audits may occur, which would require increases or decreases to the balance of reserves for unrecognized income tax benefits; however, an estimate of such changes cannot reasonably be made. |
FAIR VALUE MEASUREMENTS
FAIR VALUE MEASUREMENTS | 3 Months Ended |
Apr. 30, 2019 | |
Fair Value Disclosures [Abstract] | |
FAIR VALUE MEASUREMENTS | FAIR VALUE MEASUREMENTS Assets and Liabilities Measured at Fair Value on a Recurring Basis Our assets and liabilities measured at fair value on a recurring basis consisted of the following as of April 30, 2019 and January 31, 2019 : April 30, 2019 Fair Value Hierarchy Category (in thousands) Level 1 Level 2 Level 3 Assets: Money market funds $ 34,503 $ — $ — Foreign currency forward contracts — 905 — Interest rate swap agreements — 1,470 — Total assets $ 34,503 $ 2,375 $ — Liabilities: Foreign currency forward contracts $ — $ 496 $ — Interest rate swap agreements — 6,045 — Contingent consideration - business combinations — — 61,379 Option to acquire noncontrolling interests of consolidated subsidiaries — — 2,850 Total liabilities $ — $ 6,541 $ 64,229 January 31, 2019 Fair Value Hierarchy Category (in thousands) Level 1 Level 2 Level 3 Assets: Money market funds $ 10,709 $ — $ — Foreign currency forward contracts — 1,401 — Interest rate swap agreements — 2,072 — Total assets $ 10,709 $ 3,473 $ — Liabilities: Foreign currency forward contracts $ — $ 2,086 $ — Interest rate swap agreements — 4,028 — Contingent consideration - business combinations — — 61,340 Option to acquire noncontrolling interests of consolidated subsidiaries — — 3,000 Total liabilities $ — $ 6,114 $ 64,340 The following table presents the changes in the estimated fair values of our liabilities for contingent consideration measured using significant unobservable inputs (Level 3) for the three months ended April 30, 2019 and 2018 : Three Months Ended (in thousands) 2019 2018 Fair value measurement at beginning of period $ 61,340 $ 62,830 Contingent consideration liabilities recorded for business combinations, including measurement period adjustments 5,200 69 Changes in fair values, recorded in operating expenses 1,213 (822 ) Payments of contingent consideration (6,361 ) (3,084 ) Foreign currency translation and other (13 ) (169 ) Fair value measurement at end of period $ 61,379 $ 58,824 Our estimated liability for contingent consideration represents potential payments of additional consideration for business combinations, payable if certain defined performance goals are achieved. Changes in fair value of contingent consideration are recorded in the condensed consolidated statements of operations within selling, general and administrative expenses. During the year ended January 31, 2017, we acquired two majority owned subsidiaries for which we hold an option to acquire the noncontrolling interests. We account for the option as an in-substance investment in the noncontrolling common stock of each such subsidiary. We include the fair value of the option within other liabilities and do not recognize noncontrolling interests in these subsidiaries. The following table presents the change in the estimated fair value of this liability, which is measured using Level 3 inputs, for the three months ended April 30, 2019 and 2018 : Three Months Ended (in thousands) 2019 2018 Fair value measurement at beginning of period $ 3,000 $ 2,950 Change in fair value, recorded in operating expenses (150 ) 50 Fair value measurement at end of period $ 2,850 $ 3,000 There were no transfers between levels of the fair value measurement hierarchy during the three months ended April 30, 2019 and 2018 . Fair Value Measurements Money Market Funds - We value our money market funds using quoted active market prices for such funds. Short-term Investments, Corporate Debt Securities, and Commercial Paper - The fair values of short-term investments, as well as corporate debt securities and commercial paper classified as cash equivalents, are estimated using observable market prices for identical securities that are traded in less-active markets, if available. When observable market prices for identical securities are not available, we value these short-term investments using non-binding market price quotes from brokers which we review for reasonableness using observable market data; quoted market prices for similar instruments; or pricing models, such as a discounted cash flow model. Foreign Currency Forward Contracts - The estimated fair value of foreign currency forward contracts is based on quotes received from the counterparties thereto. These quotes are reviewed for reasonableness by discounting the future estimated cash flows under the contracts, considering the terms and maturities of the contracts and market foreign currency exchange rates using readily observable market prices for similar contracts. Interest Rate Swap Agreements - The fair value of our interest rate swap agreements are based in part on data received from the counterparty, and represents the estimated amount we would receive or pay to settle the agreements, taking into consideration current and projected future interest rates as well as the creditworthiness of the parties, all of which can be validated through readily observable data from external sources. Contingent Consideration - Business Combinations - The fair value of the contingent consideration related to business combinations is estimated using a probability-adjusted discounted cash flow model. These fair value measurements are based on significant inputs not observable in the market. The key internally developed assumptions used in these models are discount rates and the probabilities assigned to the milestones to be achieved. We remeasure the fair value of the contingent consideration at each reporting period, and any changes in fair value resulting from either the passage of time or events occurring after the acquisition date, such as changes in discount rates, or in the expectations of achieving the performance targets, are recorded within selling, general, and administrative expenses. Increases or decreases in discount rates would have inverse impacts on the related fair value measurements, while favorable or unfavorable changes in expectations of achieving performance targets would result in corresponding increases or decreases in the related fair value measurements. We utilized discount rates ranging from 3.3% to 5.9% in our calculations of the estimated fair values of our contingent consideration liabilities as of April 30, 2019 . We utilized discount rates ranging from 3.8% to 5.8% in our calculations of the estimated fair values of our contingent consideration liabilities as of January 31, 2019 . Option to Acquire Noncontrolling Interests of Consolidated Subsidiaries - The fair value of the option is determined primarily by using the income approach, which discounts expected future cash flows to present value using estimates and assumptions determined by management. This fair value measurement is based upon significant inputs not observable in the market. We remeasure the fair value of the option at each reporting period, and any changes in fair value are recorded within selling, general, and administrative expenses. We utilized discount rates of 13.5% and 12.5% in our calculation of the estimated fair value of the option as of April 30, 2019 and January 31, 2019 , respectively. Other Financial Instruments The carrying amounts of accounts receivable, contract assets, accounts payable, and accrued liabilities and other current liabilities approximate fair value due to their short maturities. The estimated fair values of our term loan borrowings were $415 million and $412 million at April 30, 2019 and January 31, 2019 . The estimated fair values of the term loans are based upon indicative bid and ask prices as determined by the agent responsible for the syndication of our term loans. We consider these inputs to be within Level 3 of the fair value hierarchy because we cannot reasonably observe activity in the limited market in which participations in our term loans are traded. The indicative prices provided to us as at each of April 30, 2019 and January 31, 2019 did not significantly differ from par value. The estimated fair value of our revolving credit borrowings, if any, is based upon indicative market values provided by one of our lenders. We had no revolving credit borrowings at April 30, 2019 and January 31, 2019 . The estimated fair values of our Notes were approximately $451 million and $400 million at April 30, 2019 and January 31, 2019 , respectively. The estimated fair values of the Notes are determined based on quoted bid and ask prices in the over-the-counter market in which the Notes trade. We consider these inputs to be within Level 2 of the fair value hierarchy. Assets and Liabilities Not Measured at Fair Value on a Recurring Basis In addition to assets and liabilities that are measured at fair value on a recurring basis, we also measure certain assets and liabilities at fair value on a nonrecurring basis. Our non-financial assets, including goodwill, intangible assets and property, plant and equipment, are measured at fair value when there is an indication of impairment and the carrying amount exceeds the asset’s projected undiscounted cash flows. These assets are recorded at fair value only when an impairment charge is recognized. As of April 30, 2019 , the carrying amount of our noncontrolling equity investments in privately-held companies without readily determinable fair values was $3.8 million . There were no observable price changes in our investments in privately-held companies and we did not recognize any impairments or other adjustments during the three months ended April 30, 2019 . |
DERIVATIVE FINANCIAL INSTRUMENT
DERIVATIVE FINANCIAL INSTRUMENTS | 3 Months Ended |
Apr. 30, 2019 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
DERIVATIVE FINANCIAL INSTRUMENTS | DERIVATIVE FINANCIAL INSTRUMENTS Our primary objective for holding derivative financial instruments is to manage foreign currency exchange rate risk and interest rate risk, when deemed appropriate. We enter into these contracts in the normal course of business to mitigate risks and not for speculative purposes. Foreign Currency Forward Contracts Under our risk management strategy, we periodically use foreign currency forward contracts to manage our short-term exposures to fluctuations in operational cash flows resulting from changes in foreign currency exchange rates. These cash flow exposures result from portions of our forecasted operating expenses, primarily compensation and related expenses, which are transacted in currencies other than the U.S. dollar, most notably the Israeli shekel. We also periodically utilize foreign currency forward contracts to manage exposures resulting from forecasted customer collections to be remitted in currencies other than the applicable functional currency, and exposures from cash, cash equivalents and short-term investments denominated in currencies other than the applicable functional currency. These foreign currency forward contracts generally have maturities of no longer than twelve months, although occasionally we will execute a contract that extends beyond twelve months , depending upon the nature of the underlying risk. We held outstanding foreign currency forward contracts with notional amounts of $87.8 million and $123.0 million as of April 30, 2019 and January 31, 2019 , respectively. Interest Rate Swap Agreements To partially mitigate risks associated with the variable interest rates on the term loan borrowings under a prior credit agreement, in February 2016 we executed a pay-fixed, receive-variable interest rate swap agreement with a multinational financial institution under which we pay interest at a fixed rate of 4.143% and receive variable interest of three-month LIBOR (subject to a minimum of 0.75% ), plus a spread of 2.75% , on a notional amount of $200.0 million (the “2016 Swap”). Although the prior credit agreement was terminated on June 29, 2017, the 2016 Swap agreement remains in effect, and serves as an economic hedge to partially mitigate the risk of higher borrowing costs under our 2017 Credit Agreement resulting from increases in market interest rates. Settlements with the counterparty under the 2016 Swap occur quarterly, and the 2016 Swap will terminate on September 6, 2019. Prior to June 29, 2017, the 2016 Swap was designated as a cash flow hedge for accounting purposes. On June 29, 2017, concurrent with the execution of the 2017 Credit Agreement and termination of the prior credit agreement, the 2016 Swap was no longer designated as a cash flow hedge for accounting purposes and, because occurrence of the specific forecasted variable cash flows which had been hedged by the 2016 Swap agreement was no longer probable, the $0.9 million fair value of the 2016 Swap at that date was reclassified from accumulated other comprehensive income (loss) into the condensed consolidated statement of operations as income within other income (expense), net. Ongoing changes in the fair value of the 2016 Swap agreement are now recognized within other income (expense), net in the condensed consolidated statement of operations. In April 2018, we executed a pay-fixed, receive-variable interest rate swap agreement with a multinational financial institution to partially mitigate risks associated with the variable interest rate on our 2017 Term Loan for periods following the termination of the 2016 Swap in September 2019, under which we will pay interest at a fixed rate of 2.949% and receive variable interest of three-month LIBOR (subject to a minimum of 0.00% ), on a notional amount of $200.0 million (the “2018 Swap”). The effective date of the 2018 Swap is September 6, 2019, and settlements with the counterparty will occur on a quarterly basis, beginning on November 1, 2019. The 2018 Swap will terminate on June 29, 2024. During the operating term of the 2018 Swap, if we elect three-month LIBOR at the periodic interest rate reset dates for at least $200.0 million of our 2017 Term Loan, the annual interest rate on that amount of the 2017 Term Loan will be fixed at 4.949% (including the impact of our current 2.00% interest rate margin on Eurodollar loans) for the applicable interest rate period. The 2018 Swap is designated as a cash flow hedge and as such, changes in its fair value are recognized in accumulated other comprehensive income (loss) in the condensed consolidated balance sheet and are reclassified into the condensed statement of operations within interest expense in the periods in which the hedged transactions affect earnings. Fair Values of Derivative Financial Instruments The fair values of our derivative financial instruments and their classifications in our condensed consolidated balance sheets as of April 30, 2019 and January 31, 2019 were as follows: Fair Value at April 30, January 31, (in thousands) Balance Sheet Classification 2019 2019 Derivative assets: Foreign currency forward contracts: Designated as cash flow hedges Prepaid expenses and other current assets $ 684 $ 738 Not designated as hedging instruments Prepaid expenses and other current assets 221 663 Interest rate swap agreements: Not designated as hedging instrument Prepaid expenses and other current assets 1,470 2,072 Total derivative assets $ 2,375 $ 3,473 Derivative liabilities: Foreign currency forward contracts: Designated as cash flow hedges Accrued expenses and other current liabilities $ 496 $ 1,830 Not designated as hedging instruments Accrued expenses and other current liabilities — 256 Interest rate swap agreements: Designated as a cash flow hedge Accrued expenses and other current liabilities 415 122 Designated as a cash flow hedge Other liabilities 5,630 3,906 Total derivative liabilities $ 6,541 $ 6,114 Derivative Financial Instruments in Cash Flow Hedging Relationships The effects of derivative financial instruments designated as cash flow hedges on accumulated other comprehensive loss (“AOCL”) and on the condensed consolidated statements of operations for the three months ended April 30, 2019 and 2018 were as follows: Three Months Ended April 30, (in thousands) 2019 2018 Net (losses) gains recognized in AOCL: Foreign currency forward contracts $ 342 $ (6,149 ) Interest rate swap agreement (2,017 ) 220 $ (1,675 ) $ (5,929 ) Net (losses) gains reclassified from AOCL to the condensed consolidated statements of operations: Foreign currency forward contracts $ (939 ) $ 433 For information regarding the line item locations of the net gains reclassified out of AOCL into the condensed consolidated condensed statements of operations, see Note 9, “Stockholders’ Equity”. All of the foreign currency forward contracts underlying the $0.2 million of net unrealized gains recorded in our accumulated other comprehensive loss at April 30, 2019 mature within twelve months, and therefore we expect all such gains to be reclassified into earnings within the next twelve months. Approximately $0.3 million of the $4.6 million of net unrealized losses related to our interest rate swap agreement recorded in our accumulated other comprehensive loss at April 30, 2019 settle within twelve months, and therefore we expect those losses to be reclassified into earnings within the next twelve months. Derivative Financial Instruments Not Designated as Hedging Instruments Gains (losses) recognized on derivative financial instruments not designated as hedging instruments in our condensed consolidated statements of operations for the three months ended April 30, 2019 and 2018 were as follows: Classification in Condensed Consolidated Statements of Operations Three Months Ended (in thousands) 2019 2018 Foreign currency forward contracts Other income (expense), net $ 564 $ 761 Interest rate swap agreements Other income (expense), net (15 ) 727 $ 549 $ 1,488 |
STOCK-BASED COMPENSATION
STOCK-BASED COMPENSATION | 3 Months Ended |
Apr. 30, 2019 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
STOCK-BASED COMPENSATION | STOCK-BASED COMPENSATION Amended and Restated Stock-Based Compensation Plan On June 22, 2017, our stockholders approved the Verint Systems Inc. Amended and Restated 2015 Long-Term Stock Incentive Plan (the “2017 Amended Plan”), which amended and restated the Verint Systems Inc. 2015 Long-Term Stock Incentive Plan (the “2015 Plan”). As with the 2015 Plan, the 2017 Amended Plan authorizes our board of directors to provide equity-based compensation in the form of stock options, stock appreciation rights, restricted stock, restricted stock units, performance awards, other stock-based awards, and performance compensation awards. The 2017 Amended Plan amended and restated the 2015 Plan to, among other things, increase the number of shares available for issuance thereunder. Subject to adjustment as provided in the 2017 Amended Plan, up to an aggregate of (i) 7,975,000 shares of our common stock (on an option-equivalent basis), plus (ii) the number of shares of our common stock available for issuance under the 2015 Plan as of June 22, 2017, plus (iii) the number of shares of our common stock that become available for issuance as a result of awards made under the 2015 Plan or the 2017 Amended Plan that are forfeited, cancelled, exchanged, withheld or surrendered or terminate or expire, may be issued or transferred in connection with awards under the 2017 Amended Plan. Each stock option or stock-settled stock appreciation right granted under the 2017 Amended Plan will reduce the available plan capacity by one share and each other award will reduce the available plan capacity by 2.47 shares. The 2017 Amended Plan expires on June 22, 2027. At our annual meeting of stockholders on June 20, 2019, our stockholders will be asked to consider the adoption of the Verint Systems Inc. 2019 Long-Term Stock Incentive Plan (the “2019 Plan”). If the 2019 Plan is approved, no further awards will be made under the 2017 Amended Plan following the date of such approval. Stock-Based Compensation Expense We recognized stock-based compensation expense in the following line items on the condensed consolidated statements of operations for the three months ended April 30, 2019 and 2018 : Three Months Ended April 30, (in thousands) 2019 2018 Cost of revenue - product $ 334 $ 117 Cost of revenue - service and support 1,070 729 Research and development, net 2,590 1,509 Selling, general and administrative 13,109 14,104 Total stock-based compensation expense $ 17,103 $ 16,459 The following table summarizes stock-based compensation expense by type of award for the three months ended April 30, 2019 and 2018 : Three Months Ended April 30, (in thousands) 2019 2018 Restricted stock units and restricted stock awards $ 14,890 $ 14,895 Stock bonus program and bonus share program 2,175 1,548 Total equity-settled awards 17,065 16,443 Phantom stock units (cash-settled awards) 38 16 Total stock-based compensation expense $ 17,103 $ 16,459 Awards under our stock bonus and bonus share programs are accounted for as liability-classified awards, because the obligations are based predominantly on fixed monetary amounts that are generally known at inception of the obligation, to be settled with a variable number of shares of our common stock. Restricted Stock Units We periodically award restricted stock units (“RSUs”) to our directors, officers, and other employees. These awards contain various vesting conditions and are subject to certain restrictions and forfeiture provisions prior to vesting. Some of these awards to executive officers and certain employees vest upon the achievement of specified performance goals or market conditions (performance stock units or “PSUs”). The following table (“Award Activity Table”) summarizes activity for RSUs, PSUs, and other stock awards that reduce available Plan capacity under the Plans for the three months ended April 30, 2019 and 2018: Three Months Ended April 30, 2019 2018 (in thousands, except per share data) Shares or Units Weighted-Average Grant Date Fair Value Shares or Units Weighted-Average Grant Date Fair Value Beginning balance 2,777 $ 41.05 2,808 $ 41.18 Granted 1,444 $ 61.10 1,324 $ 42.39 Released (448 ) $ 39.50 (180 ) $ 38.65 Forfeited (60 ) $ 35.44 (100 ) $ 42.11 Ending balance 3,713 $ 49.23 3,852 $ 41.69 With respect to our stock bonus program, activity presented in the table above only includes shares earned and released in consideration of the discount provided under that program. Consistent with the provisions of the Plans under which such shares are issued, other shares issued under the stock bonus program are not included in the table above because they do not reduce available plan capacity (since such shares are deemed to be purchased by the grantee at fair value in lieu of receiving an earned cash bonus). Activity presented in the table above includes all shares awarded and released under the bonus share program. Further details appear below under “Stock Bonus Program” and “Bonus Share Program”. Our RSU awards may include a provision which allows the awards to be settled with cash payments upon vesting, rather than with delivery of common stock, at the discretion of our board of directors. As of April 30, 2019 , for such awards that are outstanding, settlement with cash payments was not considered probable, and therefore these awards have been accounted for as equity-classified awards and are included in the table above. The following table summarizes PSU activity in isolation under the Plans for the three months ended April 30, 2019 and 2018 (these amounts are already included in the Award Activity Table above for 2019 and 2018): Three Months Ended April 30, (in thousands) 2019 2018 Beginning balance 512 506 Granted 286 174 Released (234 ) (72 ) Forfeited (26 ) (83 ) Ending balance 538 525 Excluding PSUs, we granted 1,158,000 RSUs during the three months ended April 30, 2019 . As of April 30, 2019 , there was approximately $131.4 million of total unrecognized compensation expense, net of estimated forfeitures, related to unvested restricted stock units, which is expected to be recognized over a weighted-average period of 2.0 years. Stock Bonus Program Our stock bonus program permits eligible employees to receive a portion of their earned bonuses, otherwise payable in cash, in the form of discounted shares of our common stock. Executive officers are eligible to participate in this program to the extent that shares remain available for awards following the enrollment of all other participants. Shares awarded to executive officers with respect to the discount feature of the program are subject to a one -year vesting period. This program is subject to annual funding approval by our board of directors and an annual cap on the number of shares that can be issued. Subject to these limitations, the number of shares to be issued under the program for a given year is determined using a five -day trailing average price of our common stock when the awards are calculated, reduced by a discount determined by the board of directors each year (the “discount”). To the extent that this program is not funded in a given year or the number of shares of common stock needed to fully satisfy employee enrollment exceeds the annual cap, the applicable portion of the employee bonuses will generally revert to being paid in cash. Obligations under this program are accounted for as liabilities, because the obligations are based predominantly on fixed monetary amounts that are generally known at inception of the obligation, to be settled with a variable number of shares of common stock determined using a discounted average price of our common stock. There was no activity under the stock bonus program during the three months ended April 30, 2019 and 2018. In March 2019, our board of directors increased the maximum number of shares of common stock authorized for issuances under the stock bonus program for the year ended January 31, 2019 from 125,000 to 150,000 . Awards earned under this stock bonus program are expected to be issued during the three months ended July 31, 2019. Also in March 2019, our board of directors approved up to 150,000 shares of common stock, and a discount of 15% , for awards under our stock bonus program for the year ending January 31, 2020. Executive officers will be permitted to participate in this program for the year ending January 31, 2020, but only to the extent that shares remain available for awards following the enrollment of all other participants. Shares awarded to executive officers with respect to the 15% discount will be subject to a one-year vesting period. Bonus Share Program Under our bonus share program, we may provide discretionary bonuses to employees or pay earned bonuses that are outside the stock bonus program in the form of shares of common stock. Unlike the stock bonus program, there is no enrollment for this program and no discount feature. Similar to the accounting for the stock bonus program, obligations for these bonuses are accounted for as liabilities, because the obligations are based predominantly on fixed monetary amounts that are generally known, to be settled with a variable number of shares of common stock. As noted above, shares issued under this program are included in the Award Activity Table above. For bonuses in respect of the year ending January 31, 2019, the board of directors has approved the use of up to 300,000 shares of common stock under this program, reduced by any shares used under the stock bonus program in respect of the performance period ending January 31, 2019. For bonuses in respect of the year ending January 31, 2020, our board of directors has approved the use of up to 300,000 shares of common stock under this program, reduced by any shares used under the stock bonus program in respect of the performance period ending January 31, 2020. The combined accrued liabilities for the stock bonus program and the bonus share program were $11.4 million and $9.3 million at April 30, 2019 and January 31, 2019 , respectively. |
LEASES LEASES
LEASES LEASES | 3 Months Ended |
Apr. 30, 2019 | |
Leases [Abstract] | |
LEASES | LEASES We have entered into operating leases primarily for corporate offices, research and development facilities, datacenters, and automobiles. Our finance leases primarily relate to infrastructure equipment. Our leases have remaining lease terms of 1 year to 10 years , some of which may include options to extend the leases for up to 6 years , and some of which may include options to terminate the leases within 1 year . As of April 30, 2019, assets recorded under finance leases were $6.9 million and accumulated depreciation associated with finance leases was $0.3 million . The components of lease expenses for the three months ended April 30, 2019 were as follows: (in thousands) Three Months Ended April 30, 2019 Operating lease expenses $ 7,437 Finance lease expenses: Amortization of right-of-use assets 93 Interest on lease liabilities 30 Total finance lease expenses 123 Variable lease expenses 1,966 Short-term lease expenses 255 Sublease income (223 ) Total lease expenses $ 9,558 Other information related to leases was as follows: (in thousands) Three Months Ended April 30, 2019 Supplemental cash flow information Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 6,841 Operating cash flows from finance leases 30 Financing cash flows from finance leases 472 Right-of-use assets obtained in exchange for lease obligations: Operating leases $ 1,773 Finance leases — Weighted average remaining lease terms Operating leases 6 years Finance leases 3 years Weighted average discount rates Operating leases 5.6 % Finance leases 5.5 % Maturities of lease liabilities as of April 30, 2019 were as follows: April 30, 2019 (in thousands) Operating Leases Finance Leases Year Ending January 31, 2020 (remainder of year) $ 19,160 $ 1,083 2021 24,223 1,696 2022 19,563 1,491 2023 17,060 1,138 2024 15,578 153 Thereafter 31,888 — Total future minimum lease payments 127,472 5,561 Less imputed interest (20,064 ) (427 ) Total $ 107,408 $ 5,134 Reported as of April 30, 2019: Accrued expenses and other current liabilities $ 21,759 $ 1,500 Operating lease liabilities 85,649 — Other liabilities — 3,634 Total $ 107,408 $ 5,134 As of April 30, 2019, we have additional operating leases for office facilities that have not yet commenced with future lease obligations of $7.0 million . These operating leases will commence in 2019 with lease terms of greater than 1 year to 7 years . As previously disclosed in our January 31, 2019 Form 10-K and under the previous lease accounting standard, future minimum lease payments under non-cancelable operating leases as of January 31, 2019 were as follows (in thousands): (in thousands) Operating Capital Years Ending January 31, Leases Leases 2020 $ 22,769 $ 1,343 2021 21,942 1,252 2022 19,157 1,130 2023 16,882 765 2024 15,152 107 Thereafter 33,477 — Total $ 129,379 4,597 Less: amount representing interest and other charges (315 ) Present value of minimum lease payments $ 4,282 |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 3 Months Ended |
Apr. 30, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | COMMITMENTS AND CONTINGENCIES Legal Proceedings In March 2009, one of our former employees, Ms. Orit Deutsch, commenced legal actions in Israel against our primary Israeli subsidiary, Verint Systems Limited (“VSL”) (Case Number 4186/09) and against our affiliate CTI (Case Number 1335/09). Also in March 2009, a former employee of Comverse Limited (CTI’s primary Israeli subsidiary at the time), Ms Roni Katriel, commenced similar legal actions in Israel against Comverse Limited (Case Number 3444/09). In these actions, the plaintiffs generally sought to certify class action suits against the defendants on behalf of current and former employees of VSL and Comverse Limited who had been granted stock options in Verint and/or CTI and who were allegedly damaged as a result of a suspension on option exercises during an extended filing delay period that is discussed in our and CTI’s historical public filings. On June 7, 2012, the Tel Aviv District Court, where the cases had been filed or transferred, allowed the plaintiffs to consolidate and amend their complaints against the three defendants: VSL, CTI, and Comverse Limited. On October 31, 2012, CTI distributed of all of the outstanding shares of common stock of Comverse, Inc., its principal operating subsidiary and parent company of Comverse Limited, to CTI’s shareholders (the “Comverse Share Distribution”). In the period leading up to the Comverse Share Distribution, CTI either sold or transferred substantially all of its business operations and assets (other than its equity ownership interests in Verint and in its then-subsidiary, Comverse, Inc.) to Comverse, Inc. or to unaffiliated third parties. As the result of these transactions, Comverse, Inc. became an independent company and ceased to be affiliated with CTI, and CTI ceased to have any material assets other than its equity interests in Verint. Prior to the completion of the Comverse Share Distribution, the plaintiffs sought to compel CTI to set aside up to $150.0 million in assets to secure any future judgment, but the District Court did not rule on this motion. In February 2017, Mavenir Inc. became successor-in-interest to Comverse, Inc. On February 4, 2013, Verint acquired the remaining CTI shell company in a merger transaction (the “CTI Merger”). As a result of the CTI Merger, Verint assumed certain rights and liabilities of CTI, including any liability of CTI arising out of the foregoing legal actions. However, under the terms of a Distribution Agreement entered into in connection with the Comverse Share Distribution, we, as successor to CTI, are entitled to indemnification from Comverse, Inc. (now Mavenir) for any losses we may suffer in our capacity as successor to CTI related to the foregoing legal actions. Following an unsuccessful mediation process, on August 28, 2016, the District Court (i) denied the plaintiffs’ motion to certify the suit as a class action with respect to all claims relating to Verint stock options and (ii) approved the plaintiffs’ motion to certify the suit as a class action with respect to claims of current or former employees of Comverse Limited (now part of Mavenir) or of VSL who held unexercised CTI stock options at the time CTI suspended option exercises. The court also ruled that the merits of the case would be evaluated under New York law. As a result of this ruling (which excluded claims related to Verint stock options from the case), one of the original plaintiffs in the case, Ms. Deutsch, was replaced by a new representative plaintiff, Mr. David Vaaknin. CTI appealed portions of the District Court’s ruling to the Israeli Supreme Court. On August 8, 2017, the Israeli Supreme Court partially allowed CTI’s appeal and ordered the case to be returned to the District Court to determine whether a cause of action exists under New York law based on the parties’ expert opinions. Following a second unsuccessful round of mediation in mid to late 2018, the proceedings resumed. The plaintiffs have filed a motion to amend the class certification motion and CTI has filed a corresponding motion to dismiss and a response. At a hearing on April 16, 2019, the District Court suggested that the parties consider another round of mediation. CTI has since delivered a notice to the District Court confirming its acceptance of the court’s recommendation to try the mediation process once again. From time to time we or our subsidiaries may be involved in legal proceedings and/or litigation arising in the ordinary course of our business. While the outcome of these matters cannot be predicted with certainty, we do not believe that the outcome of any current claims will have a material effect on our consolidated financial position, results of operations, or cash flows. |
SEGMENT INFORMATION
SEGMENT INFORMATION | 3 Months Ended |
Apr. 30, 2019 | |
Segment Reporting [Abstract] | |
SEGMENT INFORMATION | SEGMENT INFORMATION Operating segments are defined as components of an enterprise about which separate financial information is available that is evaluated regularly by the enterprise’s chief operating decision maker (“CODM”), or decision making group, in deciding how to allocate resources and in assessing performance. Our Chief Executive Officer is our CODM. We report our results in two operating segments—Customer Engagement Solutions (“Customer Engagement”) and Cyber Intelligence Solutions (“Cyber Intelligence”). Our Customer Engagement solutions help customer-centric organizations optimize customer engagement, increase customer loyalty, and maximize revenue opportunities, while generating operational efficiencies, reducing cost, and mitigating risk. Our Cyber Intelligence solutions are used for a wide range of applications, including predictive intelligence, advanced and complex investigations, security threat analysis, and electronic data and physical assets protection, as well as for generating legal evidence and preventing criminal activity and terrorism. We measure the performance of our operating segments primarily based on segment revenue and segment contribution. Segment revenue includes adjustments associated with revenue of acquired companies which are not recognizable within GAAP revenue. These adjustments primarily relate to the acquisition-date excess of the historical carrying value over the fair value of acquired companies’ future maintenance and service performance obligations. As the obligations are satisfied, we report our segment revenue using the historical carrying values of these obligations, which we believe better reflects our ongoing maintenance and service revenue streams, whereas GAAP revenue is reported using the obligations’ acquisition-date fair values. Segment revenue adjustments can also result from aligning an acquired company’s historical revenue recognition policies to our policies. Segment contribution includes segment revenue and expenses incurred directly by the segment, including material costs, service costs, research and development, selling, marketing, and certain administrative expenses. When determining segment contribution, we do not allocate certain operating expenses which are provided by shared resources or are otherwise generally not controlled by segment management. These expenses are reported as “Shared support expenses” in our table of segment operating results, the majority of which are expenses for administrative support functions, such as information technology, human resources, finance, legal, and other general corporate support, and for occupancy expenses. These unallocated expenses also include procurement, manufacturing support, and logistics expenses. We share resources across our segments for efficiency and to avoid duplicative costs. In addition, segment contribution does not include amortization of acquired intangible assets, stock-based compensation, and other expenses 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, such as restructuring expenses and business combination transaction and integration expenses, all of which are not considered when evaluating segment performance. Revenue from transactions between our operating segments is not material. Operating results by segment for the three months ended April 30, 2019 and 2018 were as follows: Three Months Ended (in thousands) 2019 2018 Revenue: Customer Engagement Segment revenue $ 215,867 $ 189,175 Revenue adjustments (8,772 ) (2,719 ) 207,095 186,456 Cyber Intelligence Segment revenue 108,291 102,795 Revenue adjustments (127 ) (44 ) 108,164 102,751 Total revenue $ 315,259 $ 289,207 Segment contribution: Customer Engagement $ 78,818 $ 66,802 Cyber Intelligence 27,290 21,222 Total segment contribution 106,108 88,024 Reconciliation of segment contribution to operating income: Revenue adjustments 8,899 2,763 Shared support expenses 43,854 41,909 Amortization of acquired intangible assets 14,420 15,110 Stock-based compensation 17,103 16,459 Acquisition, integration, restructuring, and other unallocated expenses 7,364 4,001 Total reconciling items, net 91,640 80,242 Operating income $ 14,468 $ 7,782 With the exception of goodwill and acquired intangible assets, we do not identify or allocate our assets by operating segment. Consequently, it is not practical to present assets by operating segment. The allocations of goodwill and acquired intangible assets by operating segment appear in Note 6, “Intangible Assets and Goodwill”. |
BASIS OF PRESENTATION AND SIG_2
BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES (Policies) | 3 Months Ended |
Apr. 30, 2019 | |
Accounting Policies [Abstract] | |
Preparation of Condensed Consolidated Financial Statements | Preparation of Condensed Consolidated Financial Statements The condensed consolidated financial statements included herein have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and on the same basis as the audited consolidated financial statements included in our Annual Report on Form 10-K for the year ended January 31, 2019 filed with the U.S. Securities and Exchange Commission (“SEC”), except for the recently adopted accounting pronouncements described below. The condensed consolidated statements of operations, comprehensive loss, stockholders’ equity, and cash flows for the periods ended April 30, 2019 and 2018 , and the condensed consolidated balance sheet as of April 30, 2019 , are not audited but reflect all adjustments that are of a normal recurring nature and that are considered necessary for a fair presentation of the results for the periods shown. The condensed consolidated balance sheet as of January 31, 2019 is derived from the audited consolidated financial statements presented in our Annual Report on Form 10-K for the year ended January 31, 2019 . Certain information and disclosures normally included in annual consolidated financial statements have been omitted pursuant to the rules and regulations of the SEC. Because the condensed consolidated interim financial statements do not include all of the information and disclosures required by GAAP for a complete set of financial statements, they should be read in conjunction with the audited consolidated financial statements and notes included in our Annual Report on Form 10-K for the year ended January 31, 2019 filed with the SEC. The results for interim periods are not necessarily indicative of a full year’s results. |
Principles of Consolidation | Principles of Consolidation The accompanying condensed consolidated financial statements include the accounts of Verint Systems Inc., our wholly owned or otherwise controlled subsidiaries, and a joint venture in which we hold a 50% equity interest. The joint venture is a variable interest entity in which we are the primary beneficiary. Noncontrolling interests in less than wholly owned subsidiaries are reflected within stockholders’ equity on our condensed consolidated balance sheet, but separately from our stockholders’ equity. We hold an option to acquire the noncontrolling interests in two majority owned subsidiaries and we account for the option as an in-substance investment in the noncontrolling common stock of each such subsidiary. We include the fair value of the option within other liabilities and do not recognize noncontrolling interests in these subsidiaries. Equity investments in companies in which we have less than a 20% ownership interest and cannot exercise significant influence, and which do not have readily determinable fair values, are accounted for at cost, adjusted for changes resulting from observable price changes in orderly transactions for an identical or similar investment of the same issuer, less any impairment. We include the results of operations of acquired companies from the date of acquisition. All significant intercompany transactions and balances are eliminated. |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with GAAP requires our management to make estimates and assumptions, which may affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates. |
Significant Accounting Policies | Significant Accounting Policies Except for the accounting policy for leases appearing below, implemented as a result of adopting Accounting Standards Update (“ASU”) No. 2016-02, Leases (Topic 842), there have been no material changes in our significant accounting policies during the three months ended April 30, 2019 , as compared to the significant accounting policies described in Note 1 to the consolidated financial statements included in our Annual Report on Form 10-K for the year ended January 31, 2019 . |
Leases | Leases We determine if an arrangement is a lease at inception. Operating lease assets are presented as operating lease right-of-use (“ROU”) assets, and corresponding operating lease liabilities are presented within accrued expenses and other current liabilities (current portions), and as operating lease liabilities (long-term portions), on our condensed consolidated balance sheet. Finance lease assets are included in property and equipment, and corresponding finance lease liabilities are included within accrued expenses and other current liabilities (current portions), and other liabilities (long-term portions), on our condensed consolidated balance sheet. Operating lease ROU assets and operating lease liabilities are recognized based on the present value of the remaining lease payments over the lease term at commencement date. Our leases do not provide an implicit interest rate. We calculate the incremental borrowing rate to reflect the interest rate that we would have to pay to borrow on a collateralized basis an amount equal to the lease payments in a similar economic environment over a similar term, and consider our historical borrowing activities and market data in this determination. The operating lease ROU asset also includes any lease payments made and excludes lease incentives and initial direct costs incurred. Our lease terms may include options to extend or terminate the lease when it is reasonably certain that we will exercise that option. Lease expense for minimum lease payments is recognized on a straight-line basis over the lease term. We have lease agreements with lease and non-lease components, which we account for as a single lease component. Some of our leases contain variable lease payments, which are expensed as incurred unless those payments are based on an index or rate. Variable lease payments based on an index or rate are initially measured using the index or rate in effect at lease commencement and included in the measurement of the lease liability; thereafter, changes to lease payments due to rate or index updates are recorded as rent expense in the period incurred. We have elected not to recognize ROU assets and lease liabilities for short-term leases that have a term of 12 months or less. The effect of short-term leases on our ROU assets and lease liabilities was not material. Our lease agreements do not contain any material residual value guarantees or material restrictive covenants. In addition, we do not have any related party leases and our sublease transactions are de minimis. |
Recent Accounting Pronouncements | Recently Adopted Accounting Pronouncements In February 2016, the Financial Accounting Standards Board (“FASB”) issued ASU No. 2016-02, Leases (Topic 842) . ASU No. 2016-02 supersedes the requirements in Topic 840, Leases , and requires lessees to recognize ROU assets and liabilities for leases with lease terms of more than 12 months. We adopted ASU No. 2016-02 as of February 1, 2019 using the modified retrospective transition method of applying the new standard at the adoption date. Results for reporting periods beginning on or after February 1, 2019 are presented under the new guidance, while prior periods amounts are not adjusted and continue to be reported in accordance with previous guidance. Disclosures required under the new standard will not be provided for dates and periods before February 1, 2019. The new standard provided a number of optional practical expedients in transition. We elected the transition package of practical expedients available in the standard, which permits us not to reassess under the new standard our prior conclusions about lease identification, lease classification, and initial direct costs and the practical expedient to not account for lease and non-lease components separately. We did not elect the use-of-hindsight or the practical expedient pertaining to land easements; the latter not being applicable to us. The adoption of ASU No. 2016-02 resulted in the recognition of ROU assets of approximately $100.4 million and lease liabilities for operating leases of approximately $110.4 million on our consolidated balance sheet as of February 1, 2019 with no material impact to our consolidated statements of operations. The ROU assets are lower than the operating lease liabilities primarily because previously recorded net deferred rent balances were reclassified into the ROU assets. There was no impact to our accumulated deficit upon adoption of the standard. The adoption of the new standard also resulted in significant additional disclosures regarding our leasing activities. Please refer to Note 14, “Leases” for further details. In February 2018, the FASB issued ASU 2018-02, Income Statement-Reporting Comprehensive Income (Topic 220) : Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income, which provides companies the option to reclassify from accumulated other comprehensive income to retained earnings the stranded tax effects resulting from the Tax Cuts and Jobs Act of 2017 (the “2017 Tax Act”). The stranded tax effect represents the difference between the amount previously recorded in other comprehensive income at the historical U.S. federal tax rate that remains in accumulated other comprehensive loss at the time the 2017 Tax Act was effective and the amount that would have been recorded using the newly enacted rate. We adopted this guidance on February 1, 2019, and the adoption did not have an impact on our condensed consolidated financial statements. In June 2018, the FASB issued ASU No. 2018-07, Compensation - Stock Compensation (Topic 718) - Improvements to Nonemployee Share-Based Payment Accounting , to simplify the accounting for nonemployee share-based payment transactions by expanding the scope of ASC Topic 718, Compensation - Stock Compensation , to include share-based payment transactions for acquiring goods and services from nonemployees. Under the new standard, most of the guidance on stock compensation payments to nonemployees would be aligned with the requirements for share-based payments granted to employees. Adoption of this standard had an immaterial impact on our condensed consolidated financial statements. New Accounting Pronouncements Not Yet Effective In August 2018, the FASB issued ASU 2018-15, Intangibles-Goodwill and Other-Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract , which clarifies the accounting for implementation costs in cloud computing arrangements. This standard is effective for annual reporting periods beginning after December 15, 2019, including interim reporting periods within those annual reporting periods, with early adoption permitted. We are currently reviewing this standard to assess the impact on our condensed consolidated financial statements. In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework-Changes to The Disclosure Requirements for Fair Value Measurement , which modifies the disclosure requirements on fair value measurements. This standard is effective for annual reporting periods beginning after December 15, 2019, including interim reporting periods within those annual reporting periods, with early adoption permitted. We are currently reviewing this standard to assess the impact on our condensed consolidated financial statements. In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments - Credit Losses (Topic 326) - Measurement of Credit Losses on Financial Instruments. This new standard changes the impairment model for most financial assets and certain other instruments. Entities will be required to use a model that will result in the earlier recognition of allowances for losses for trade and other receivables, held-to-maturity debt securities, loans, and other instruments. For available-for-sale debt securities with unrealized losses, the losses will be recognized as allowances rather than as reductions in the amortized cost of the securities. The new standard is effective for annual periods, and for interim periods within those annual periods, beginning after December 15, 2019, with early adoption permitted. We are currently reviewing this standard to assess the impact on our condensed consolidated financial statements. |
REVENUE RECOGNITION REVENUE R_2
REVENUE RECOGNITION REVENUE RECOGNITION - SIGNIFICANT ACCOUNTING POLICY (Policies) | 3 Months Ended |
Apr. 30, 2019 | |
Revenue from Contract with Customer [Abstract] | |
Revenue Recognition, Policy [Policy Text Block] | REVENUE RECOGNITION We derive our revenue primarily from the licensing of our software products and related services and support based on when control of the software passes to our customers or the services are provided, in an amount that reflects the consideration we expect to be entitled to in exchange for such goods or services. Revenue is reported net of applicable sales and use tax, value-added tax and other transaction taxes imposed on the related transaction, including mandatory government charges that are passed through to our customers. We determine revenue recognition through the following five steps: • Identification of the contract, or contracts, with a customer • Identification of the performance obligations in the contract • Determination of the transaction price • Allocation of the transaction price to the performance obligations in the contract • Recognition of revenue when, or as, performance obligations are satisfied. We account for a contract when it has approval and commitment from both parties, the rights of the parties are identified, payment terms are identified, the contract has commercial substance and collectability of consideration is probable. |
REVENUE RECOGNITION REVENUE R_3
REVENUE RECOGNITION REVENUE RECOGNITION (Tables) | 3 Months Ended |
Apr. 30, 2019 | |
Revenue from Contract with Customer [Abstract] | |
Disaggregation of Revenue | The following table provides information about disaggregated revenue for our Customer Engagement and Cyber Intelligence segments by product revenue and service and support revenue, as well as by the recurring or nonrecurring nature of revenue for each business segment. Recurring revenue is the portion of our revenue that we believe is likely to be renewed in the future. The recurrence of these revenue streams in future periods depends on a number of factors including contractual periods and customers' renewal decisions. For our Customer Engagement segment: • Recurring revenue primarily consists of cloud revenue and initial and renewal PCS. ◦ Cloud revenue consists primarily of SaaS revenue with some optional managed services revenue. ◦ SaaS revenue consists predominately of bundled SaaS (software with standard managed services) with some unbundled SaaS (software licensing rights sold separately from managed services and accounted for as term-based licenses). Unbundled SaaS can be deployed in the cloud either by us or a cloud partner. ◦ Bundled SaaS revenue is recognized over time and unbundled SaaS revenue is recognized at a point in time. Unbundled SaaS contracts are eligible to renew after the initial fixed term, which in most cases is between a one-and three-year time frame. • Nonrecurring revenue primarily consists of our perpetual licenses, consulting, implementation and installation services, and training. For our Cyber Intelligence segment: • Recurring revenue primarily consists of initial and renewal PCS, subscription software licenses, and SaaS in certain limited transactions. • Nonrecurring revenue primarily consists of our perpetual licenses, long-term projects including software customizations that are recognized over time as control transfers to the customer using a percentage of completion (“POC”) method, consulting, implementation and installation services, training, and hardware. To conform with the presentation described above, the classification of Customer Engagement unbundled SaaS revenue for the three months ended April 30, 2018 in the table below has been updated to reflect $2.2 million of recurring revenue which had previously been presented within nonrecurring revenue. Three Months Ended April 30, 2019 Three Months Ended April 30, 2018 (in thousands) Customer Engagement Cyber Intelligence Total Customer Engagement Cyber Intelligence Total Revenue: Product $ 54,002 $ 50,222 $ 104,224 $ 48,364 $ 57,500 $ 105,864 Service and support 153,093 57,942 211,035 138,092 45,251 183,343 Total revenue $ 207,095 $ 108,164 $ 315,259 $ 186,456 $ 102,751 $ 289,207 Revenue by recurrence: Recurring revenue $ 123,358 $ 46,817 $ 170,175 $ 107,830 $ 36,150 $ 143,980 Nonrecurring revenue 83,737 61,347 145,084 78,626 66,601 145,227 Total revenue $ 207,095 $ 108,164 $ 315,259 $ 186,456 $ 102,751 $ 289,207 The following table provides a further disaggregation of revenue for our Customer Engagement segment. Three Months Ended April 30, (in thousands) 2019 2018 Customer Engagement revenue: Recurring revenue Cloud $ 47,085 $ 32,805 PCS 76,273 75,025 Total recurring revenue 123,358 107,830 Nonrecurring revenue 83,737 78,626 Total Customer Engagement revenue $ 207,095 $ 186,456 |
Contracts with Customers - Assets and Liabilities | The following table provides information about accounts receivable, contract assets, and contract liabilities from contracts with customers: (in thousands) April 30, 2019 January 31, 2019 Accounts receivable, net $ 316,101 $ 375,663 Contract assets 63,228 63,389 Long-term contract assets (included in other assets) 1,548 1,375 Contract liabilities 350,488 377,376 Long-term contract liabilities 32,726 30,094 |
NET INCOME (LOSS) PER COMMON _2
NET INCOME (LOSS) PER COMMON SHARE ATTRIBUTABLE TO VERINT SYSTEMS INC. (Tables) | 3 Months Ended |
Apr. 30, 2019 | |
Earnings Per Share [Abstract] | |
Schedule of calculation of basic and diluted net income (loss) per common share attributable to Verint Systems Inc. | The following table summarizes the calculation of basic and diluted net income (loss) per common share attributable to Verint Systems Inc. for the three months ended April 30, 2019 and 2018 : Three Months Ended (in thousands, except per share amounts) 2019 2018 Net income (loss) $ 3,761 $ (1,225 ) Net income attributable to noncontrolling interests 2,185 990 Net income (loss) attributable to Verint Systems Inc. $ 1,576 $ (2,215 ) Weighted-average shares outstanding: Basic 65,438 63,928 Dilutive effect of employee equity award plans 1,650 — Dilutive effect of 1.50% convertible senior notes — — Dilutive effect of warrants — — Diluted 67,088 63,928 Net income (loss) per common share attributable to Verint Systems Inc.: Basic $ 0.02 $ (0.03 ) Diluted $ 0.02 $ (0.03 ) |
Schedule of anti-dilutive securities | We excluded the following weighted-average potential common shares from the calculations of diluted net income (loss) per common share during the applicable periods because their inclusion would have been anti-dilutive: Three Months Ended (in thousands) 2019 2018 Common shares excluded from calculation: Stock options and restricted stock-based awards 606 1,587 1.50% convertible senior notes 6,205 6,205 Warrants 6,205 6,205 |
CASH, CASH EQUIVALENTS AND SH_2
CASH, CASH EQUIVALENTS AND SHORT-TERM INVESTMENTS CASH, CASH EQUIVALENTS AND SHORT-TERM INVESTMENTS (Tables) | 3 Months Ended |
Apr. 30, 2019 | |
Cash, Cash Equivalents, and Short-term Investments [Abstract] | |
Schedule of Cash, Cash Equivalents and Short-term Investments [Table Text Block] | The following tables summarize our cash, cash equivalents, and short-term investments as of April 30, 2019 and January 31, 2019 : April 30, 2019 (in thousands) Cost Basis Gross Unrealized Gains Gross Unrealized Losses Estimated Fair Value Cash and cash equivalents: Cash and bank time deposits $ 377,521 $ — $ — $ 377,521 Money market funds 34,503 — — 34,503 Total cash and cash equivalents $ 412,024 $ — $ — $ 412,024 Short-term investments: Bank time deposits $ 39,334 $ — $ — $ 39,334 Total short-term investments $ 39,334 $ — $ — $ 39,334 January 31, 2019 (in thousands) Cost Basis Gross Unrealized Gains Gross Unrealized Losses Estimated Fair Value Cash and cash equivalents: Cash and bank time deposits $ 359,266 $ — $ — $ 359,266 Money market funds 10,709 — — 10,709 Total cash and cash equivalents $ 369,975 $ — $ — $ 369,975 Short-term investments: Bank time deposits $ 32,329 $ — $ — $ 32,329 Total short-term investments $ 32,329 $ — $ — $ 32,329 |
BUSINESS COMBINATIONS (Tables)
BUSINESS COMBINATIONS (Tables) | 3 Months Ended |
Apr. 30, 2019 | |
ForeSee Results, Inc. | |
Business Acquisition | |
Schedule of Purchase Price Allocations for the Year Ended January 31, 2019 [Table Text Block] | (in thousands) Amount Components of Purchase Price: Cash $ 58,901 Deferred purchase price consideration 6,000 Other purchase price adjustments 262 Total purchase price $ 65,163 Allocation of Purchase Price: Net tangible assets (liabilities): Accounts receivable $ 7,245 Other current assets, including cash acquired 8,059 Other assets 6,075 Current and other liabilities (12,868 ) Contract liabilities - current and long-term (9,821 ) Deferred income taxes (11,804 ) Net tangible liabilities (13,114 ) Identifiable intangible assets: Customer relationships 19,500 Developed technology 20,700 Trademarks and trade names 3,400 Total identifiable intangible assets 43,600 Goodwill 34,677 Total purchase price allocations $ 65,163 |
Individually Insignificant Business Combinations - Year Ended January 31, 2019 | |
Business Acquisition | |
Schedule of Purchase Price Allocations for the Year Ended January 31, 2019 [Table Text Block] | The following table sets forth the components and the allocations of the combined purchase prices for the business combinations, other than ForeSee, completed during the year ended January 31, 2019: (in thousands) Amount Components of Purchase Prices: Cash $ 33,138 Fair value of contingent consideration 15,875 Fair value of previously held equity interest 2,239 Total purchase prices $ 51,252 Allocation of Purchase Prices: Net tangible assets (liabilities): Accounts receivable $ 1,897 Other current assets, including cash acquired 6,901 Other assets 9,432 Current and other liabilities (2,151 ) Contract liabilities - current and long-term (771 ) Deferred income taxes (7,914 ) Net tangible assets 7,394 Identifiable intangible assets: Customer relationships 7,521 Developed technology 10,692 Trademarks and trade names 500 Total identifiable intangible assets 18,713 Goodwill 25,145 Total purchase price allocations $ 51,252 |
INTANGIBLE ASSETS AND GOODWILL
INTANGIBLE ASSETS AND GOODWILL (Tables) | 3 Months Ended |
Apr. 30, 2019 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of acquisition-related intangible assets | Acquisition-related intangible assets consisted of the following as of April 30, 2019 and January 31, 2019: April 30, 2019 (in thousands) Cost Accumulated Amortization Net Intangible assets with finite lives: Customer relationships $ 455,804 $ (305,949 ) $ 149,855 Acquired technology 289,317 (227,288 ) 62,029 Trade names 13,422 (5,754 ) 7,668 Distribution network 4,440 (4,440 ) — Total intangible assets $ 762,983 $ (543,431 ) $ 219,552 January 31, 2019 (in thousands) Cost Accumulated Amortization Net Intangible assets with finite lives: Customer relationships $ 452,918 $ (299,549 ) $ 153,369 Acquired technology 285,230 (221,145 ) 64,085 Trade names 12,859 (5,130 ) 7,729 Distribution network 4,440 (4,440 ) — Total intangible assets $ 755,447 $ (530,264 ) $ 225,183 |
Schedule of net acquisition-related intangible assets by reportable segment | The following table presents net acquisition-related intangible assets by reportable segment as of April 30, 2019 and January 31, 2019 : April 30, January 31, (in thousands) 2019 2019 Customer Engagement $ 214,585 $ 218,738 Cyber Intelligence 4,967 6,445 Total $ 219,552 $ 225,183 |
Schedule of estimated future amortization expense on finite-lived acquisition-related intangible assets | Estimated future amortization expense on finite-lived acquisition-related intangible assets is as follows: (in thousands) Years Ending January 31, Amount 2020 (remainder of year) $ 40,099 2021 46,663 2022 42,942 2023 35,034 2024 25,364 2025 and thereafter 29,450 Total $ 219,552 |
Schedule of goodwill activity | Goodwill activity for the three months ended April 30, 2019 , in total and by reportable segment, was as follows: Reportable Segment (in thousands) Total Customer Engagement Cyber Intelligence Three Months Ended April 30, 2019: Goodwill, gross, at January 31, 2019 $ 1,484,346 $ 1,326,370 $ 157,976 Accumulated impairment losses through January 31, 2019 (66,865 ) (56,043 ) (10,822 ) Goodwill, net, at January 31, 2019 1,417,481 1,270,327 147,154 Business combinations, including adjustments to prior period acquisitions 16,710 16,710 — Foreign currency translation and other (2,674 ) (2,345 ) (329 ) Goodwill, net, at April 30, 2019 $ 1,431,517 $ 1,284,692 $ 146,825 Balance at April 30, 2019: Goodwill, gross, at April 30, 2019 $ 1,498,382 $ 1,340,735 $ 157,647 Accumulated impairment losses through April 30, 2019 (66,865 ) (56,043 ) (10,822 ) Goodwill, net, at April 30, 2019 $ 1,431,517 $ 1,284,692 $ 146,825 |
LONG-TERM DEBT (Tables)
LONG-TERM DEBT (Tables) | 3 Months Ended |
Apr. 30, 2019 | |
Long-term Debt, Unclassified [Abstract] | |
Summary of long-term debt | The following table summarizes our long-term debt at April 30, 2019 and January 31, 2019: April 30, January 31, (in thousands) 2019 2019 1.50% Convertible Senior Notes $ 400,000 $ 400,000 2017 Term Loan 417,562 418,625 Other debt 53 92 Less: Unamortized debt discounts and issuance costs (33,052 ) (36,589 ) Total debt 784,563 782,128 Less: current maturities 4,303 4,343 Long-term debt $ 780,260 $ 777,785 |
Summary of future scheduled principal payments on 2017 Term Loan | As of April 30, 2019 , future scheduled principal payments on the 2017 Term Loan were as follows: (in thousands) Years Ending January 31, Amount 2020 (remainder of year) $ 3,187 2021 4,250 2022 4,250 2023 4,250 2024 4,250 2025 and thereafter 397,375 Total $ 417,562 |
Schedule of components of interest expense | The following table presents the components of interest expense incurred on the Notes and on borrowings under our credit agreements for the three months ended April 30, 2019 and 2018 : Three Months Ended (in thousands) 2019 2018 1.50% Convertible Senior Notes: Interest expense at 1.50% coupon rate $ 1,500 $ 1,500 Amortization of debt discount 3,061 2,904 Amortization of deferred debt issuance costs 289 274 Total Interest Expense - 1.50% Convertible Senior Notes $ 4,850 $ 4,678 Borrowings under Credit Agreements: Interest expense at contractual rates $ 4,645 $ 3,866 Amortization of debt discounts 16 16 Amortization of deferred debt issuance costs 374 378 Total Interest Expense - Borrowings under Credit Agreements $ 5,035 $ 4,260 |
SUPPLEMENTAL CONDENSED CONSOL_2
SUPPLEMENTAL CONDENSED CONSOLIDATED FINANCIAL STATEMENT INFORMATION (Tables) | 3 Months Ended |
Apr. 30, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Schedule of Inventories | Inventories consisted of the following as of April 30, 2019 and January 31, 2019: April 30, January 31, (in thousands) 2019 2019 Raw materials $ 11,819 $ 10,875 Work-in-process 6,091 5,567 Finished goods 9,935 8,510 Total inventories $ 27,845 $ 24,952 |
Schedule of Other (Expense) Income, Net | Other expense, net consisted of the following for the three months ended April 30, 2019 and 2018 : Three Months Ended (in thousands) 2019 2018 Foreign currency losses, net $ (1,187 ) $ (1,835 ) Gains on derivative financial instruments, net 549 1,488 Other, net (152 ) (117 ) Total other expense, net $ (790 ) $ (464 ) |
Schedule of Supplemental Information Regarding Condensed Consolidated Cash Flows | The following table provides supplemental information regarding our condensed consolidated cash flows for the three months ended April 30, 2019 and 2018 : Three Months Ended April 30, (in thousands) 2019 2018 Cash paid for interest $ 4,673 $ 2,647 Cash (refunds) payments of income taxes, net $ (1,513 ) $ 4,999 Non-cash investing and financing transactions: Accrued but unpaid purchases of property and equipment $ 3,301 $ 3,397 Inventory transfers to property and equipment $ 73 $ 603 Liabilities for contingent consideration in business combinations, including measurement period adjustments $ 5,200 $ 69 |
STOCKHOLDERS' EQUITY (Tables)
STOCKHOLDERS' EQUITY (Tables) | 3 Months Ended |
Apr. 30, 2019 | |
Stockholders' Equity Note [Abstract] | |
Summary of components of accumulated other comprehensive income (loss) | The following table summarizes changes in the components of our accumulated other comprehensive income (loss) by component for the three months ended April 30, 2019 : (in thousands) Unrealized Gains (Losses) on Foreign Exchange Contracts Designated as Hedges Unrealized Loss on Interest Rate Swap Designated as Hedge Foreign Currency Translation Adjustments Total Accumulated other comprehensive loss at January 31, 2019 $ (981 ) $ (3,043 ) $ (141,201 ) $ (145,225 ) Other comprehensive income (loss) before reclassifications 306 (1,593 ) (3,856 ) (5,143 ) Amounts reclassified out of accumulated other comprehensive loss (845 ) — — (845 ) Net other comprehensive income (loss) 1,151 (1,593 ) (3,856 ) (4,298 ) Accumulated other comprehensive income (loss) at $ 170 $ (4,636 ) $ (145,057 ) $ (149,523 ) |
Schedule of amounts reclassified out of accumulated other comprehensive income (loss) into the statement of operations by location | The amounts reclassified out of accumulated other comprehensive income (loss) into the condensed consolidated statement of operations, with presentation location, for the three months ended April 30, 2019 and 2018 were as follows: Three Months Ended April 30, (in thousands) 2019 2018 Location Unrealized (losses) gains on derivative financial instruments: Foreign currency forward contracts $ (72 ) $ 37 Cost of product revenue (84 ) 40 Cost of service and support revenue (472 ) 220 Research and development, net (311 ) 136 Selling, general and administrative (939 ) 433 Total, before income taxes 94 (43 ) Benefit (provision) for income taxes $ (845 ) $ 390 Total, net of income taxes |
FAIR VALUE MEASUREMENTS (Tables
FAIR VALUE MEASUREMENTS (Tables) | 3 Months Ended |
Apr. 30, 2019 | |
Liability for contingent consideration measured using significant unobservable inputs (Level 3) | |
Schedule of assets and liabilities measured at fair value on recurring basis | Our assets and liabilities measured at fair value on a recurring basis consisted of the following as of April 30, 2019 and January 31, 2019 : April 30, 2019 Fair Value Hierarchy Category (in thousands) Level 1 Level 2 Level 3 Assets: Money market funds $ 34,503 $ — $ — Foreign currency forward contracts — 905 — Interest rate swap agreements — 1,470 — Total assets $ 34,503 $ 2,375 $ — Liabilities: Foreign currency forward contracts $ — $ 496 $ — Interest rate swap agreements — 6,045 — Contingent consideration - business combinations — — 61,379 Option to acquire noncontrolling interests of consolidated subsidiaries — — 2,850 Total liabilities $ — $ 6,541 $ 64,229 January 31, 2019 Fair Value Hierarchy Category (in thousands) Level 1 Level 2 Level 3 Assets: Money market funds $ 10,709 $ — $ — Foreign currency forward contracts — 1,401 — Interest rate swap agreements — 2,072 — Total assets $ 10,709 $ 3,473 $ — Liabilities: Foreign currency forward contracts $ — $ 2,086 $ — Interest rate swap agreements — 4,028 — Contingent consideration - business combinations — — 61,340 Option to acquire noncontrolling interests of consolidated subsidiaries — — 3,000 Total liabilities $ — $ 6,114 $ 64,340 |
Liability for contingent consideration | |
Liability for contingent consideration measured using significant unobservable inputs (Level 3) | |
Schedule of changes in the estimated fair value using significant unobservable inputs (Level 3) | The following table presents the changes in the estimated fair values of our liabilities for contingent consideration measured using significant unobservable inputs (Level 3) for the three months ended April 30, 2019 and 2018 : Three Months Ended (in thousands) 2019 2018 Fair value measurement at beginning of period $ 61,340 $ 62,830 Contingent consideration liabilities recorded for business combinations, including measurement period adjustments 5,200 69 Changes in fair values, recorded in operating expenses 1,213 (822 ) Payments of contingent consideration (6,361 ) (3,084 ) Foreign currency translation and other (13 ) (169 ) Fair value measurement at end of period $ 61,379 $ 58,824 |
Option to Acquire Noncontrolling Interests | |
Liability for contingent consideration measured using significant unobservable inputs (Level 3) | |
Schedule of changes in the estimated fair value using significant unobservable inputs (Level 3) | The following table presents the change in the estimated fair value of this liability, which is measured using Level 3 inputs, for the three months ended April 30, 2019 and 2018 : Three Months Ended (in thousands) 2019 2018 Fair value measurement at beginning of period $ 3,000 $ 2,950 Change in fair value, recorded in operating expenses (150 ) 50 Fair value measurement at end of period $ 2,850 $ 3,000 |
DERIVATIVE FINANCIAL INSTRUME_2
DERIVATIVE FINANCIAL INSTRUMENTS (Tables) | 3 Months Ended |
Apr. 30, 2019 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of fair values of derivative financial instruments | The fair values of our derivative financial instruments and their classifications in our condensed consolidated balance sheets as of April 30, 2019 and January 31, 2019 were as follows: Fair Value at April 30, January 31, (in thousands) Balance Sheet Classification 2019 2019 Derivative assets: Foreign currency forward contracts: Designated as cash flow hedges Prepaid expenses and other current assets $ 684 $ 738 Not designated as hedging instruments Prepaid expenses and other current assets 221 663 Interest rate swap agreements: Not designated as hedging instrument Prepaid expenses and other current assets 1,470 2,072 Total derivative assets $ 2,375 $ 3,473 Derivative liabilities: Foreign currency forward contracts: Designated as cash flow hedges Accrued expenses and other current liabilities $ 496 $ 1,830 Not designated as hedging instruments Accrued expenses and other current liabilities — 256 Interest rate swap agreements: Designated as a cash flow hedge Accrued expenses and other current liabilities 415 122 Designated as a cash flow hedge Other liabilities 5,630 3,906 Total derivative liabilities $ 6,541 $ 6,114 |
Schedule of the effects of derivative financial instruments designated as cash flow hedging instruments | The effects of derivative financial instruments designated as cash flow hedges on accumulated other comprehensive loss (“AOCL”) and on the condensed consolidated statements of operations for the three months ended April 30, 2019 and 2018 were as follows: Three Months Ended April 30, (in thousands) 2019 2018 Net (losses) gains recognized in AOCL: Foreign currency forward contracts $ 342 $ (6,149 ) Interest rate swap agreement (2,017 ) 220 $ (1,675 ) $ (5,929 ) Net (losses) gains reclassified from AOCL to the condensed consolidated statements of operations: Foreign currency forward contracts $ (939 ) $ 433 |
Schedule of gains (losses) recognized on derivative financial instruments not designated as hedging instruments | Gains (losses) recognized on derivative financial instruments not designated as hedging instruments in our condensed consolidated statements of operations for the three months ended April 30, 2019 and 2018 were as follows: Classification in Condensed Consolidated Statements of Operations Three Months Ended (in thousands) 2019 2018 Foreign currency forward contracts Other income (expense), net $ 564 $ 761 Interest rate swap agreements Other income (expense), net (15 ) 727 $ 549 $ 1,488 |
STOCK-BASED COMPENSATION (Table
STOCK-BASED COMPENSATION (Tables) | 3 Months Ended |
Apr. 30, 2019 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Schedule of Stock-Based Compensation Expense by Line Item | We recognized stock-based compensation expense in the following line items on the condensed consolidated statements of operations for the three months ended April 30, 2019 and 2018 : Three Months Ended April 30, (in thousands) 2019 2018 Cost of revenue - product $ 334 $ 117 Cost of revenue - service and support 1,070 729 Research and development, net 2,590 1,509 Selling, general and administrative 13,109 14,104 Total stock-based compensation expense $ 17,103 $ 16,459 |
Schedule of Stock-Based Compensation Expense by Type of Award | The following table summarizes stock-based compensation expense by type of award for the three months ended April 30, 2019 and 2018 : Three Months Ended April 30, (in thousands) 2019 2018 Restricted stock units and restricted stock awards $ 14,890 $ 14,895 Stock bonus program and bonus share program 2,175 1,548 Total equity-settled awards 17,065 16,443 Phantom stock units (cash-settled awards) 38 16 Total stock-based compensation expense $ 17,103 $ 16,459 |
Summary of RSU Activity | The following table (“Award Activity Table”) summarizes activity for RSUs, PSUs, and other stock awards that reduce available Plan capacity under the Plans for the three months ended April 30, 2019 and 2018: Three Months Ended April 30, 2019 2018 (in thousands, except per share data) Shares or Units Weighted-Average Grant Date Fair Value Shares or Units Weighted-Average Grant Date Fair Value Beginning balance 2,777 $ 41.05 2,808 $ 41.18 Granted 1,444 $ 61.10 1,324 $ 42.39 Released (448 ) $ 39.50 (180 ) $ 38.65 Forfeited (60 ) $ 35.44 (100 ) $ 42.11 Ending balance 3,713 $ 49.23 3,852 $ 41.69 |
Summary of Performance Share Activity | The following table summarizes PSU activity in isolation under the Plans for the three months ended April 30, 2019 and 2018 (these amounts are already included in the Award Activity Table above for 2019 and 2018): Three Months Ended April 30, (in thousands) 2019 2018 Beginning balance 512 506 Granted 286 174 Released (234 ) (72 ) Forfeited (26 ) (83 ) Ending balance 538 525 |
LEASES LEASES (Tables)
LEASES LEASES (Tables) | 3 Months Ended |
Apr. 30, 2019 | |
Leases [Abstract] | |
Schedule of Lease Expenses | The components of lease expenses for the three months ended April 30, 2019 were as follows: (in thousands) Three Months Ended April 30, 2019 Operating lease expenses $ 7,437 Finance lease expenses: Amortization of right-of-use assets 93 Interest on lease liabilities 30 Total finance lease expenses 123 Variable lease expenses 1,966 Short-term lease expenses 255 Sublease income (223 ) Total lease expenses $ 9,558 |
Schedule of Supplemental Cash Flow Information Related to Leases | Other information related to leases was as follows: (in thousands) Three Months Ended April 30, 2019 Supplemental cash flow information Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 6,841 Operating cash flows from finance leases 30 Financing cash flows from finance leases 472 Right-of-use assets obtained in exchange for lease obligations: Operating leases $ 1,773 Finance leases — Weighted average remaining lease terms Operating leases 6 years Finance leases 3 years Weighted average discount rates Operating leases 5.6 % Finance leases 5.5 % |
Schedule of Maturities of Operating and Finance Lease Liabilities | as of April 30, 2019 were as follows: April 30, 2019 (in thousands) Operating Leases Finance Leases Year Ending January 31, 2020 (remainder of year) $ 19,160 $ 1,083 2021 24,223 1,696 2022 19,563 1,491 2023 17,060 1,138 2024 15,578 153 Thereafter 31,888 — Total future minimum lease payments 127,472 5,561 Less imputed interest (20,064 ) (427 ) Total $ 107,408 $ 5,134 Reported as of April 30, 2019: Accrued expenses and other current liabilities $ 21,759 $ 1,500 Operating lease liabilities 85,649 — Other liabilities — 3,634 Total $ 107,408 $ 5,134 |
Schedule of Future Minimum Rental Payments for Operating Leases [Table Text Block] | As previously disclosed in our January 31, 2019 Form 10-K and under the previous lease accounting standard, future minimum lease payments under non-cancelable operating leases as of January 31, 2019 were as follows (in thousands): (in thousands) Operating Capital Years Ending January 31, Leases Leases 2020 $ 22,769 $ 1,343 2021 21,942 1,252 2022 19,157 1,130 2023 16,882 765 2024 15,152 107 Thereafter 33,477 — Total $ 129,379 4,597 Less: amount representing interest and other charges (315 ) Present value of minimum lease payments $ 4,282 |
SEGMENT INFORMATION (Tables)
SEGMENT INFORMATION (Tables) | 3 Months Ended |
Apr. 30, 2019 | |
Segment Reporting [Abstract] | |
Operating results by segment | Operating results by segment for the three months ended April 30, 2019 and 2018 were as follows: Three Months Ended (in thousands) 2019 2018 Revenue: Customer Engagement Segment revenue $ 215,867 $ 189,175 Revenue adjustments (8,772 ) (2,719 ) 207,095 186,456 Cyber Intelligence Segment revenue 108,291 102,795 Revenue adjustments (127 ) (44 ) 108,164 102,751 Total revenue $ 315,259 $ 289,207 Segment contribution: Customer Engagement $ 78,818 $ 66,802 Cyber Intelligence 27,290 21,222 Total segment contribution 106,108 88,024 Reconciliation of segment contribution to operating income: Revenue adjustments 8,899 2,763 Shared support expenses 43,854 41,909 Amortization of acquired intangible assets 14,420 15,110 Stock-based compensation 17,103 16,459 Acquisition, integration, restructuring, and other unallocated expenses 7,364 4,001 Total reconciling items, net 91,640 80,242 Operating income $ 14,468 $ 7,782 |
BASIS OF PRESENTATION AND SIG_3
BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES - CONSOLIDATION (Details) | 3 Months Ended |
Apr. 30, 2019 | |
Less than | |
Basis of Presentation | |
Maximum ownership interest in cost method investments (as a percent) | 20.00% |
Joint venture, variable interest entity in which entity is primary beneficiary | |
Basis of Presentation | |
Equity interest in a joint venture (as a percent) | 50.00% |
BASIS OF PRESENTATION AND SIG_4
BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES - LEASES (Details) - USD ($) $ in Thousands | Apr. 30, 2019 | Feb. 01, 2019 | Jan. 31, 2019 |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Operating lease right-of-use assets | $ 96,811 | $ 0 | |
Operating lease liabilities | $ 107,408 | ||
Accounting Standards Update 2016-02 | |||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Operating lease right-of-use assets | $ 100,400 | ||
Operating lease liabilities | $ 110,400 |
REVENUE RECOGNITION REVENUE R_4
REVENUE RECOGNITION REVENUE RECOGNITION - DISAGGREGATION OF REVENUE (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Apr. 30, 2019 | Apr. 30, 2018 | |
Disaggregation of Revenue [Line Items] | ||
Revenue | $ 315,259 | $ 289,207 |
Recurring revenue | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | 170,175 | 143,980 |
Nonrecurring revenue | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | 145,084 | 145,227 |
Product revenue | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | 104,224 | 105,864 |
Service and support revenue | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | 211,035 | 183,343 |
Customer Engagement | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | 207,095 | 186,456 |
Customer Engagement | Recurring revenue | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | 123,358 | 107,830 |
Customer Engagement | Nonrecurring revenue | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | 83,737 | 78,626 |
Customer Engagement | Product revenue | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | 54,002 | 48,364 |
Customer Engagement | Service and support revenue | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | 153,093 | 138,092 |
Cyber Intelligence | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | 108,164 | 102,751 |
Cyber Intelligence | Recurring revenue | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | 46,817 | 36,150 |
Cyber Intelligence | Nonrecurring revenue | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | 61,347 | 66,601 |
Cyber Intelligence | Product revenue | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | 50,222 | 57,500 |
Cyber Intelligence | Service and support revenue | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | $ 57,942 | $ 45,251 |
REVENUE RECOGNITION REVENUE R_5
REVENUE RECOGNITION REVENUE RECOGNITION - CUSTOMER ENGAGEMENT - ADDITIONAL DISAGGREGATION OF REVENUE (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Apr. 30, 2019 | Apr. 30, 2018 | |
Disaggregation of Revenue [Line Items] | ||
Revenue | $ 315,259 | $ 289,207 |
Recurring revenue | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | 170,175 | 143,980 |
Nonrecurring revenue | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | 145,084 | 145,227 |
Customer Engagement | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | 207,095 | 186,456 |
Customer Engagement | Recurring revenue | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | 123,358 | 107,830 |
Customer Engagement | Nonrecurring revenue | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | 83,737 | 78,626 |
Customer Engagement | Cloud revenue | Recurring revenue | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | 47,085 | 32,805 |
Customer Engagement | Post-contract Support (PCS) Revenue | Recurring revenue | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | $ 76,273 | $ 75,025 |
REVENUE RECOGNITION REVENUE R_6
REVENUE RECOGNITION REVENUE RECOGNITION - CONTRACT BALANCES (Details) - USD ($) $ in Thousands | Apr. 30, 2019 | Jan. 31, 2019 |
Revenue from Contract with Customer [Abstract] | ||
Accounts receivable, net | $ 316,101 | $ 375,663 |
Contract assets | 63,228 | 63,389 |
Long-term contract assets (included in Other Assets) | 1,548 | 1,375 |
Contract liabilities | 350,488 | 377,376 |
Long-term contract liabilities | $ 32,726 | $ 30,094 |
REVENUE RECOGNITION REVENUE R_7
REVENUE RECOGNITION REVENUE RECOGNITION - CONCENTRATION OF CREDIT RISK (Details) - USD ($) $ in Millions | Apr. 30, 2019 | Jan. 31, 2019 |
Cyber Intelligence | Credit Concentration Risk | ||
Concentration Risk [Line Items] | ||
Aggregate Contract Assets & Accounts Receivable | $ 84.6 | $ 84.3 |
REVENUE RECOGNITION REVENUE R_8
REVENUE RECOGNITION REVENUE RECOGNITION - CONTRACT ASSET AND LIABILITY ROLLFORWARD (Details) - USD ($) $ in Millions | 3 Months Ended | |
Apr. 30, 2019 | Apr. 30, 2018 | |
Revenue from Contract with Customer [Abstract] | ||
Current period revenue recognized from beginning balance of Contract Liabilities | $ 134.6 | $ 117.3 |
REVENUE RECOGNITION REVENUE R_9
REVENUE RECOGNITION REVENUE RECOGNITION - REMAINING PERFORMANCE OBLIGATIONS (Details) $ in Thousands | 3 Months Ended |
Apr. 30, 2019USD ($) | |
Revenue from Contract with Customer [Abstract] | |
Remaining Performance Obligations | $ 1,092,563 |
Percent of Remaining Performance Obligation to be Recognized | 65.00% |
Period of Expected Timing of Recognition of Performance Obligation | 12 months |
NET INCOME (LOSS) PER COMMON _3
NET INCOME (LOSS) PER COMMON SHARE ATTRIBUTABLE TO VERINT SYSTEMS INC. NET INCOME (LOSS) PER COMMON SHARE ATTRIBUTABLE TO VERINT SYSTEMS INC. - CALCULATION (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | |
Apr. 30, 2019 | Apr. 30, 2018 | |
Net Loss Attributable to Verint Systems Inc. [Abstract] | ||
Net income (loss) | $ 3,761 | $ (1,225) |
Net income attributable to noncontrolling interest | 2,185 | 990 |
Net income (loss) attributable to Verint Systems Inc. | $ 1,576 | $ (2,215) |
Weighted Average Number of Shares Outstanding Reconciliation [Abstract] | ||
Basic (in shares) | 65,438,000 | 63,928,000 |
Dilutive effect of employee equity award plans (in shares) | 1,650,000 | 0 |
Dilutive effect of 1.50% convertible senior notes (in shares) | 0 | 0 |
Dilutive effect of warrants (in shares) | 0 | 0 |
Diluted (in shares) | 67,088,000 | 63,928,000 |
Net Income (Loss) Per Common Share Attributable to Verint Systems Inc. [Abstract] | ||
Basic (in dollars per share) | $ 0.02 | $ (0.03) |
Diluted (in dollars per share) | $ 0.02 | $ (0.03) |
NET INCOME (LOSS) PER COMMON _4
NET INCOME (LOSS) PER COMMON SHARE ATTRIBUTABLE TO VERINT SYSTEMS INC. NET INCOME (LOSS) PER COMMON SHARE ATTRIBUTABLE TO VERINT SYSTEMS INC. - ANTIDILUTIVE SECURITIES (Details) - shares shares in Thousands | 3 Months Ended | |
Apr. 30, 2019 | Apr. 30, 2018 | |
Stock options and restricted stock-based awards | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share, (in shares) | 606 | 1,587 |
1.50% convertible senior notes | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share, (in shares) | 6,205 | 6,205 |
Warrants | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share, (in shares) | 6,205 | 6,205 |
NET INCOME (LOSS) PER COMMON _5
NET INCOME (LOSS) PER COMMON SHARE ATTRIBUTABLE TO VERINT SYSTEMS INC. NET INCOME (LOSS) PER COMMON SHARE ATTRIBUTABLE TO VERINT SYSTEMS INC. - OTHER DETAILS (Details) | Apr. 30, 2019$ / sharesshares |
Net Income (Loss) Per Common Share Attributable to Verint Systems Inc. [Abstract] | |
Exercise Price of Warrants (in dollars per share) | $ 75 |
Warrants (in shares) | shares | 6,205,000 |
1.50% Convertible Senior Notes | |
Net Income (Loss) Per Common Share Attributable to Verint Systems Inc. [Abstract] | |
1.50% Convertible Notes - Conversion Price (in dollars per share) | $ 64.46 |
CASH, CASH EQUIVALENTS AND SH_3
CASH, CASH EQUIVALENTS AND SHORT-TERM INVESTMENTS CASH, CASH EQUIVALENTS AND SHORT-TERM INVESTMENTS (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Apr. 30, 2019 | Apr. 30, 2018 | Jan. 31, 2019 | |
Schedule of Available-for-sale Securities | |||
Maturities and sales of investments | $ 2,965 | $ 0 | |
Bank time deposits | |||
Schedule of Available-for-sale Securities | |||
Cost basis | 39,334 | $ 32,329 | |
Gross unrealized gains | 0 | 0 | |
Gross unrealized losses | 0 | 0 | |
Estimated Fair Value | 39,334 | 32,329 | |
Total short-term investments | |||
Schedule of Available-for-sale Securities | |||
Cost basis | 39,334 | 32,329 | |
Gross unrealized gains | 0 | 0 | |
Gross unrealized losses | 0 | 0 | |
Estimated Fair Value | 39,334 | 32,329 | |
Cash and bank time deposits | |||
Schedule of Available-for-sale Securities | |||
Cost basis | 377,521 | 359,266 | |
Gross unrealized gains | 0 | 0 | |
Gross unrealized losses | 0 | 0 | |
Estimated Fair Value | 377,521 | 359,266 | |
Money market funds | |||
Schedule of Available-for-sale Securities | |||
Cost basis | 34,503 | 10,709 | |
Gross unrealized gains | 0 | 0 | |
Gross unrealized losses | 0 | 0 | |
Estimated Fair Value | 34,503 | 10,709 | |
Total cash and cash equivalents | |||
Schedule of Available-for-sale Securities | |||
Cost basis | 412,024 | 369,975 | |
Gross unrealized gains | 0 | 0 | |
Gross unrealized losses | 0 | 0 | |
Estimated Fair Value | $ 412,024 | $ 369,975 |
BUSINESS COMBINATIONS BUSINESS
BUSINESS COMBINATIONS BUSINESS COMBINATIONS - YEAR ENDED JANUARY 31, 2019 - FORESEE (Details) - USD ($) $ in Thousands | Dec. 19, 2018 | Apr. 30, 2019 | Apr. 30, 2018 | Jan. 31, 2019 |
Business Acquisition | ||||
Payments to Acquire Businesses, Net of Cash Acquired | $ 20,210 | $ 0 | ||
Goodwill | 1,431,517 | $ 1,417,481 | ||
Customer Engagement | ||||
Business Acquisition | ||||
Goodwill | 1,284,692 | $ 1,270,327 | ||
Customer Engagement | ForeSee Results, Inc. | ||||
Business Acquisition | ||||
Business Combination, Consideration Transferred | $ 65,163 | |||
Payment Made At Closing To Acquire Businesses | 58,901 | |||
Post-closing purchase price adjustment | 6,000 | |||
Other Post-closing purchase price adjustment | 262 | |||
Cash Acquired from Acquisition | 400 | |||
Payments to Acquire Businesses, Net of Cash Acquired | 58,500 | |||
Goodwill | 34,677 | |||
Business Acquisition, Goodwill, Expected Tax Deductible Amount | 3,300 | |||
Business Acquisition, Purchase Price Allocation, Goodwill, Tax Not Deductible Amount | 31,400 | |||
Contract liabilities - current and long-term | 9,821 | |||
Intangible Asset - Undelivered Performance Obligations | 10,200 | |||
Transaction and Related Costs, Including Integration Costs | $ 1,500 | |||
Prepaid Expenses and Other Current Assets | Customer Engagement | ForeSee Results, Inc. | ||||
Business Acquisition | ||||
Intangible Asset - Undelivered Performance Obligations | 5,500 | |||
Other Assets | Customer Engagement | ForeSee Results, Inc. | ||||
Business Acquisition | ||||
Intangible Asset - Undelivered Performance Obligations | $ 4,700 |
BUSINESS COMBINATIONS BUSINES_2
BUSINESS COMBINATIONS BUSINESS COMBINATIONS - YEAR ENDED JANUARY 31, 2019 - OTHER ACQUISITIONS (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended |
Apr. 30, 2019 | Jan. 31, 2019 | |
Business Acquisition | ||
Goodwill | $ 1,431,517 | $ 1,417,481 |
Individually Insignificant Business Combinations - Year Ended January 31, 2019 | ||
Business Acquisition | ||
Noncontrolling equity investment | $ 2,200 | |
Noncontrolling equity investment percentage | 19.00% | |
Business Combination, Consideration Transferred | $ 51,252 | |
Payment Made At Closing To Acquire Businesses | 33,138 | |
Business Acquisition Contingent Consideration Fair Value Disclosure | 35,500 | |
Fair value of contingent obligation | 15,875 | |
Prior noncontrolling equity investment | 2,239 | |
Goodwill | 25,145 | |
Transaction and Related Costs, Including Integration Costs | 1,900 | |
Customer Engagement | ||
Business Acquisition | ||
Goodwill | 1,284,692 | 1,270,327 |
Customer Engagement | Individually Insignificant Business Combinations - Year Ended January 31, 2019 | ||
Business Acquisition | ||
Goodwill | 14,300 | |
Cyber Intelligence | ||
Business Acquisition | ||
Goodwill | $ 146,825 | 147,154 |
Cyber Intelligence | Individually Insignificant Business Combinations - Year Ended January 31, 2019 | ||
Business Acquisition | ||
Goodwill | $ 10,800 |
BUSINESS COMBINATIONS BUSINES_3
BUSINESS COMBINATIONS BUSINESS COMBINATIONS - YEAR ENDED JANUARY 31, 2019 - PURCHASE PRICE ALLOCATIONS (Details) - USD ($) $ in Thousands | Dec. 19, 2018 | Jan. 31, 2019 | Apr. 30, 2019 |
Business Acquisition | |||
Goodwill | $ 1,417,481 | $ 1,431,517 | |
Individually Insignificant Business Combinations - Year Ended January 31, 2019 | |||
Business Acquisition | |||
Total Purchase Price Allocations | 51,252 | ||
Payment Made At Closing To Acquire Businesses | 33,138 | ||
Fair value of contingent obligation | 15,875 | ||
Prior noncontrolling equity investment | 2,239 | ||
Business Combination, Consideration Transferred | 51,252 | ||
Accounts receivable | 1,897 | ||
Other current assets, including cash acquired | 6,901 | ||
Other assets | 9,432 | ||
Current and other liabilities | 2,151 | ||
Contract liabilities - current and long-term | 771 | ||
Deferred income taxes | 7,914 | ||
Net Tangible Assets (Liabilities) | 7,394 | ||
Identifiable intangible assets | 18,713 | ||
Goodwill | 25,145 | ||
Customer Engagement | |||
Business Acquisition | |||
Goodwill | 1,270,327 | $ 1,284,692 | |
Customer Engagement | ForeSee Results, Inc. | |||
Business Acquisition | |||
Total Purchase Price Allocations | $ 65,163 | ||
Payment Made At Closing To Acquire Businesses | 58,901 | ||
Post-closing purchase price adjustment | 6,000 | ||
Other Post-closing purchase price adjustment | 262 | ||
Business Combination, Consideration Transferred | 65,163 | ||
Accounts receivable | 7,245 | ||
Other current assets, including cash acquired | 8,059 | ||
Other assets | 6,075 | ||
Current and other liabilities | (12,868) | ||
Contract liabilities - current and long-term | 9,821 | ||
Deferred income taxes | (11,804) | ||
Net Tangible Assets (Liabilities) | (13,114) | ||
Identifiable intangible assets | 43,600 | ||
Goodwill | 34,677 | ||
Customer Engagement | Individually Insignificant Business Combinations - Year Ended January 31, 2019 | |||
Business Acquisition | |||
Goodwill | 14,300 | ||
Customer Relationships | Individually Insignificant Business Combinations - Year Ended January 31, 2019 | |||
Business Acquisition | |||
Identifiable intangible assets | 7,521 | ||
Customer Relationships | Customer Engagement | ForeSee Results, Inc. | |||
Business Acquisition | |||
Identifiable intangible assets | 19,500 | ||
Acquired Technology | Individually Insignificant Business Combinations - Year Ended January 31, 2019 | |||
Business Acquisition | |||
Identifiable intangible assets | 10,692 | ||
Acquired Technology | Customer Engagement | ForeSee Results, Inc. | |||
Business Acquisition | |||
Identifiable intangible assets | 20,700 | ||
Trademarks and Trade Names | Individually Insignificant Business Combinations - Year Ended January 31, 2019 | |||
Business Acquisition | |||
Identifiable intangible assets | $ 500 | ||
Trademarks and Trade Names | Customer Engagement | ForeSee Results, Inc. | |||
Business Acquisition | |||
Identifiable intangible assets | $ 3,400 |
BUSINESS COMBINATIONS BUSINES_4
BUSINESS COMBINATIONS BUSINESS COMBINATIONS - YEAR ENDED JANUARY 31, 2019 - INTANGIBLE ASSETS USEFUL LIVES (Details) | Dec. 19, 2018 | Jan. 31, 2019 |
Individually Insignificant Business Combinations - Year Ended January 31, 2019 | ||
Business Acquisition | ||
Weighted-average estimated useful life of all finite-lived identifiable intangible assets (in years) | 6 years 7 months 6 days | |
Customer Engagement | ForeSee Results, Inc. | ||
Business Acquisition | ||
Weighted-average estimated useful life of all finite-lived identifiable intangible assets (in years) | 6 years 1 month 6 days | |
Acquired Technology | Customer Engagement | ForeSee Results, Inc. | ||
Business Acquisition | ||
Finite-Lived Intangible Asset, Useful Life | 4 years | |
Trademarks and Trade Names | Individually Insignificant Business Combinations - Year Ended January 31, 2019 | ||
Business Acquisition | ||
Finite-Lived Intangible Asset, Useful Life | 4 years | |
Trademarks and Trade Names | Customer Engagement | ForeSee Results, Inc. | ||
Business Acquisition | ||
Finite-Lived Intangible Asset, Useful Life | 4 years | |
Minimum | Customer Relationships | Individually Insignificant Business Combinations - Year Ended January 31, 2019 | ||
Business Acquisition | ||
Finite-Lived Intangible Asset, Useful Life | 7 years | |
Minimum | Customer Relationships | Customer Engagement | ForeSee Results, Inc. | ||
Business Acquisition | ||
Finite-Lived Intangible Asset, Useful Life | 7 years | |
Minimum | Acquired Technology | Individually Insignificant Business Combinations - Year Ended January 31, 2019 | ||
Business Acquisition | ||
Finite-Lived Intangible Asset, Useful Life | 3 years | |
Maximum | Customer Relationships | Individually Insignificant Business Combinations - Year Ended January 31, 2019 | ||
Business Acquisition | ||
Finite-Lived Intangible Asset, Useful Life | 10 years | |
Maximum | Customer Relationships | Customer Engagement | ForeSee Results, Inc. | ||
Business Acquisition | ||
Finite-Lived Intangible Asset, Useful Life | 9 years | |
Maximum | Acquired Technology | Individually Insignificant Business Combinations - Year Ended January 31, 2019 | ||
Business Acquisition | ||
Finite-Lived Intangible Asset, Useful Life | 5 years |
BUSINESS COMBINATIONS BUSINES_5
BUSINESS COMBINATIONS BUSINESS COMBINATIONS - OTHER BUSINESS COMBINATION INFORMATION (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Apr. 30, 2019 | Apr. 30, 2018 | Jan. 31, 2019 | |
Business Acquisition | |||
Fair Value, Measurement with Unobservable Inputs Reconciliation, Recurring Basis, Liability, Gain (Loss) Included in Earnings | $ (1,200) | $ 800 | |
Payments of contingent consideration | 6,400 | $ 3,100 | |
Recurring | Level 3 | |||
Business Acquisition | |||
Business Acquisition Contingent Consideration Fair Value Disclosure | 61,379 | $ 61,340 | |
Accrued expenses and other current liabilities | Recurring | Level 3 | |||
Business Acquisition | |||
Business Acquisition Contingent Consideration Fair Value Disclosure | 30,100 | ||
Other liabilities | Recurring | Level 3 | |||
Business Acquisition | |||
Business Acquisition Contingent Consideration Fair Value Disclosure | $ 31,300 |
INTANGIBLE ASSETS AND GOODWIL_2
INTANGIBLE ASSETS AND GOODWILL - INTANGIBLE ASSETS (Details) - USD ($) $ in Thousands | Apr. 30, 2019 | Jan. 31, 2019 |
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Finite-Lived Intangible Assets, Gross | $ 762,983 | $ 755,447 |
Finite-Lived Intangible Assets, Accumulated Amortization | (543,431) | (530,264) |
Intangible assets with finite lives, Net | 219,552 | 225,183 |
Customer Relationships | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Finite-Lived Intangible Assets, Gross | 455,804 | 452,918 |
Finite-Lived Intangible Assets, Accumulated Amortization | (305,949) | (299,549) |
Intangible assets with finite lives, Net | 149,855 | 153,369 |
Acquired Technology | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Finite-Lived Intangible Assets, Gross | 289,317 | 285,230 |
Finite-Lived Intangible Assets, Accumulated Amortization | (227,288) | (221,145) |
Intangible assets with finite lives, Net | 62,029 | 64,085 |
Trade Names | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Finite-Lived Intangible Assets, Gross | 13,422 | 12,859 |
Finite-Lived Intangible Assets, Accumulated Amortization | (5,754) | (5,130) |
Intangible assets with finite lives, Net | 7,668 | 7,729 |
Distribution Network | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Finite-Lived Intangible Assets, Gross | 4,440 | 4,440 |
Finite-Lived Intangible Assets, Accumulated Amortization | (4,440) | (4,440) |
Intangible assets with finite lives, Net | $ 0 | $ 0 |
INTANGIBLE ASSETS AND GOODWIL_3
INTANGIBLE ASSETS AND GOODWILL INTANGIBLE ASSETS AND GOODWILL - INTANGIBLE ASSETS BY REPORTABLE SEGMENT (Details) - USD ($) $ in Thousands | Apr. 30, 2019 | Jan. 31, 2019 |
Finite-Lived Intangible Assets | ||
Intangible assets, net | $ 219,552 | $ 225,183 |
Customer Engagement | ||
Finite-Lived Intangible Assets | ||
Intangible assets, net | 214,585 | 218,738 |
Cyber Intelligence | ||
Finite-Lived Intangible Assets | ||
Intangible assets, net | $ 4,967 | $ 6,445 |
INTANGIBLE ASSETS AND GOODWIL_4
INTANGIBLE ASSETS AND GOODWILL INTANGIBLE ASSETS AND GOODWILL - AMORTIZATION AND IMPAIRMENT (Details) - USD ($) | 3 Months Ended | |
Apr. 30, 2019 | Apr. 30, 2018 | |
Finite-Lived Intangible Assets | ||
Goodwill, Impairment Loss | $ 0 | $ 0 |
Impairment of Intangible Assets, Finite-lived | 0 | 0 |
Amortization of intangible assets | $ 14,400,000 | $ 15,100,000 |
INTANGIBLE ASSETS AND GOODWIL_5
INTANGIBLE ASSETS AND GOODWILL INTANGIBLE ASSETS AND GOODWILL - FUTURE AMORTIZATION OF INTANGIBLE ASSETS (Details) - USD ($) $ in Thousands | Apr. 30, 2019 | Jan. 31, 2019 |
Intangible Assets - Future Amortization [Abstract] | ||
2020 (remainder of year) | $ 40,099 | |
2021 | 46,663 | |
2022 | 42,942 | |
2023 | 35,034 | |
2024 | 25,364 | |
2025 and thereafter | 29,450 | |
Intangible assets with finite lives, Net | $ 219,552 | $ 225,183 |
INTANGIBLE ASSETS AND GOODWIL_6
INTANGIBLE ASSETS AND GOODWILL - GOODWILL (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Apr. 30, 2019 | Jan. 31, 2019 | |
Goodwill activity | ||
Goodwill, gross at the beginning of the period | $ 1,498,382 | $ 1,484,346 |
Accumulated impairment losses | (66,865) | (66,865) |
Goodwill, net at the beginning of the period | 1,417,481 | |
Business combinations, including adjustments to prior period acquisitions | 16,710 | |
Foreign currency translation and other | (2,674) | |
Goodwill, net, at the end of the period | 1,431,517 | |
Customer Engagement | ||
Goodwill activity | ||
Goodwill, gross at the beginning of the period | 1,340,735 | 1,326,370 |
Accumulated impairment losses | (56,043) | (56,043) |
Goodwill, net at the beginning of the period | 1,270,327 | |
Business combinations, including adjustments to prior period acquisitions | 16,710 | |
Foreign currency translation and other | (2,345) | |
Goodwill, net, at the end of the period | 1,284,692 | |
Cyber Intelligence | ||
Goodwill activity | ||
Goodwill, gross at the beginning of the period | 157,647 | 157,976 |
Accumulated impairment losses | (10,822) | $ (10,822) |
Goodwill, net at the beginning of the period | 147,154 | |
Business combinations, including adjustments to prior period acquisitions | 0 | |
Foreign currency translation and other | (329) | |
Goodwill, net, at the end of the period | $ 146,825 |
LONG-TERM DEBT - SUMMARY (Detai
LONG-TERM DEBT - SUMMARY (Details) - USD ($) $ in Thousands | Apr. 30, 2019 | Jan. 31, 2019 | Jun. 29, 2017 | Jun. 18, 2014 |
Debt Instrument | ||||
Unamortized debt discounts and issuance costs | $ 33,052 | $ 36,589 | ||
Total debt | 784,563 | 782,128 | ||
Current maturities of long-term debt | 4,303 | 4,343 | ||
Long-term debt | 780,260 | 777,785 | ||
1.50% Convertible Senior Notes | ||||
Debt Instrument | ||||
Principal Amount - 1.50% Convertible Senior Notes | 400,000 | 400,000 | $ 400,000 | |
2017 Term Loan | ||||
Debt Instrument | ||||
2017 Term Loan | 417,562 | 418,625 | $ 425,000 | |
Other debt | ||||
Debt Instrument | ||||
Other debt | $ 53 | $ 92 |
LONG-TERM DEBT - 1.50% CONVERTI
LONG-TERM DEBT - 1.50% CONVERTIBLE SENIOR NOTES (Details) | Jun. 18, 2014USD ($)shares | Apr. 30, 2019USD ($)$ / shares | Jan. 31, 2019USD ($) |
Debt Instrument | |||
Common Stock Issued (in shares) | shares | 5,750,000 | ||
1.50% Convertible Senior Notes | |||
Debt Instrument | |||
Principal Amount - 1.50% Convertible Senior Notes | $ 400,000,000 | $ 400,000,000 | $ 400,000,000 |
Coupon Interest Rate | 1.50% | ||
Proceeds from issuance of convertible notes, net of underwriting discounts | $ 391,900,000 | ||
1.50% Convertible Notes - Conversion Ratio | 15.5129 | ||
1.50% Convertible Notes - Base Principal Amount For Conversion Rate | $ 1,000 | ||
1.50% Convertible Notes - Conversion Price (in dollars per share) | $ / shares | $ 64.46 | ||
1.50% Convertible Notes - Number of Common Shares (in shares) | 6,205,000 | ||
1.50% Convertible Notes - Carrying Value of Debt Component | 319,900,000 | $ 370,300,000 | |
1.50% Convertible Notes - Carrying Value of Equity Component | $ 80,100,000 | 78,200,000 | |
Assumed Nonconvertible Debt Interest Rate | 5.00% | ||
Debt Component of Convertible Note Issuance Costs | $ 7,600,000 | ||
Adjustment To Additional Paid In Capital Debt Issuance Cost | $ 1,900,000 | ||
Unamortized Debt Discount | 27,100,000 | ||
Unamortized Debt Issuance Expense | $ 2,600,000 | ||
Effective interest rate (as a percent) | 5.29% |
LONG-TERM DEBT - NOTE HEDGES AN
LONG-TERM DEBT - NOTE HEDGES AND WARRANTS (Details) - USD ($) $ / shares in Units, $ in Millions | Jun. 18, 2014 | Apr. 30, 2019 |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | ||
Option Indexed to Issuer's Equity, Strike Price | $ 64.46 | |
Exercise Price of Warrants (in dollars per share) | $ 75 | |
Option Indexed to Issuer's Equity, Shares | 6,205,000 | |
Payments for convertible note hedges | $ 60.8 | |
Warrants (in shares) | 6,205,000 | |
Proceeds from issuance of warrants | $ 45.2 |
LONG-TERM DEBT LONG-TERM DEBT -
LONG-TERM DEBT LONG-TERM DEBT - 2017 CREDIT AGREEMENT - SUMMARY (Details) - USD ($) | Apr. 30, 2019 | Jan. 31, 2019 | Jun. 29, 2017 |
2017 Credit Agreement | |||
Debt Instrument | |||
Line of Credit Facility, Maximum Borrowing Capacity | $ 725,000,000 | ||
2017 Term Loan | |||
Debt Instrument | |||
Long-term Debt, Gross | 417,562,000 | $ 418,625,000 | $ 425,000,000 |
Unamortized Debt Discount | $ 500,000 | ||
2017 Revolving Credit Facility | |||
Debt Instrument | |||
Line of Credit Facility, Maximum Borrowing Capacity | $ 300,000,000 |
LONG-TERM DEBT LONG-TERM DEBT_2
LONG-TERM DEBT LONG-TERM DEBT - 2017 CREDIT AGREEMENT - INTEREST RATE DETAILS (Details) | 3 Months Ended | |
Apr. 30, 2019 | Jan. 31, 2019 | |
2017 Term Loan | ||
Debt Instrument | ||
Interest rate at end of period (as a percent) | 4.50% | 4.52% |
Effective interest rate (as a percent) | 4.68% | |
Variable Rate Based on Eurodollar Rate | 2017 Credit Agreement | Eurodollar loans | ||
Debt Instrument | ||
Variable rate basis | Eurodollar Rate | |
Variable Rate Based on Eurodollar Rate | 2017 Term Loan | Eurodollar loans | ||
Debt Instrument | ||
Interest rate margin (as a percent) | 2.25% | |
Variable Rate Based on Eurodollar Rate | 2017 Term Loan - Following January 2018 Amendment | Eurodollar loans | ||
Debt Instrument | ||
Interest rate margin (as a percent) | 2.00% | |
Variable Rate Based on ABR Rate | 2017 Credit Agreement | ABR Rate Loans | ||
Debt Instrument | ||
Variable rate basis | ABR rate | |
Variable Rate Based on ABR Rate | 2017 Term Loan | ABR Rate Loans | ||
Debt Instrument | ||
Interest rate margin (as a percent) | 1.25% | |
Variable Rate Based on ABR Rate | 2017 Term Loan - Following January 2018 Amendment | ABR Rate Loans | ||
Debt Instrument | ||
Interest rate margin (as a percent) | 1.00% |
LONG-TERM DEBT - DEBT COVENANT
LONG-TERM DEBT - DEBT COVENANT (Details) | 3 Months Ended |
Apr. 30, 2019numerator | |
2017 Revolving Credit Facility | |
Debt Instrument | |
Consolidated Total Debt to Consolidated EBITDA Ratio | 4.50 |
LONG-TERM DEBT LONG-TERM DEBT_3
LONG-TERM DEBT LONG-TERM DEBT - 2017 CREDIT AGREEMENT ISSUANCE COSTS (Details) - USD ($) $ in Millions | Jun. 29, 2017 | Jan. 31, 2018 |
2017 Credit Agreement | ||
Debt Instrument | ||
Debt Issuance Costs | $ 6.8 | |
2017 Term Loan | ||
Debt Instrument | ||
Loss on early retirement of debt | $ 0.2 | |
Debt Issuance Costs | 4.1 | |
2017 Revolving Credit Facility | ||
Debt Instrument | ||
Debt Issuance Costs | $ 2.7 |
LONG-TERM DEBT - FUTURE AMORTIZ
LONG-TERM DEBT - FUTURE AMORTIZATION (Details) - 2017 Term Loan - USD ($) $ in Thousands | 3 Months Ended | ||
Apr. 30, 2019 | Jan. 31, 2019 | Jun. 29, 2017 | |
Debt Instrument | |||
2020 (remainder of year) | $ 3,187 | ||
2021 | 4,250 | ||
2022 | 4,250 | ||
2023 | 4,250 | ||
2024 | 4,250 | ||
2025 and thereafter | 397,375 | ||
Total | 417,562 | $ 418,625 | $ 425,000 |
Debt Instrument, Periodic Payment | |||
Required quarterly principal payment | $ 1,100 |
LONG-TERM DEBT - INTEREST EXPEN
LONG-TERM DEBT - INTEREST EXPENSE (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Apr. 30, 2019 | Apr. 30, 2018 | |
1.50% Convertible Senior Notes | ||
Debt Instrument | ||
Interest Expense at Coupon or Contractual Rate | $ 1,500 | $ 1,500 |
Amortization of Debt Discount | 3,061 | 2,904 |
Amortization of Deferred Debt Issuance Costs | 289 | 274 |
Total Interest Expense | 4,850 | 4,678 |
Credit Agreements | ||
Debt Instrument | ||
Interest Expense at Coupon or Contractual Rate | 4,645 | 3,866 |
Amortization of Debt Discount | 16 | 16 |
Amortization of Deferred Debt Issuance Costs | 374 | 378 |
Total Interest Expense | $ 5,035 | $ 4,260 |
SUPPLEMENTAL CONDENSED CONSOL_3
SUPPLEMENTAL CONDENSED CONSOLIDATED FINANCIAL STATEMENT INFORMATION - INVENTORIES (Details) - USD ($) $ in Thousands | Apr. 30, 2019 | Jan. 31, 2019 |
Inventories | ||
Raw materials | $ 11,819 | $ 10,875 |
Work-in-process | 6,091 | 5,567 |
Finished goods | 9,935 | 8,510 |
Total inventories | $ 27,845 | $ 24,952 |
SUPPLEMENTAL CONDENSED CONSOL_4
SUPPLEMENTAL CONDENSED CONSOLIDATED FINANCIAL STATEMENT INFORMATION SUPPLEMENTAL CONDENSED CONSOLIDATED FINANCIAL STATEMENT INFORMATION - OTHER (EXPENSE) INCOME (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Apr. 30, 2019 | Apr. 30, 2018 | |
Other Income and Expenses [Abstract] | ||
Foreign currency losses, net | $ (1,187) | $ (1,835) |
Gains on derivative financial instruments, net | 549 | 1,488 |
Other nonoperating income and expense, net | (152) | (117) |
Total other expense, net | $ (790) | $ (464) |
SUPPLEMENTAL CONDENSED CONSOL_5
SUPPLEMENTAL CONDENSED CONSOLIDATED FINANCIAL STATEMENT INFORMATION SUPPLEMENTAL CONDENSED CONSOLIDATED FINANCIAL STATEMENT INFORMATION - CASH FLOW INFORMATION (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Apr. 30, 2019 | Apr. 30, 2018 | |
Supplemental Cash Flow Elements [Abstract] | ||
Cash paid for interest | $ 4,673 | $ 2,647 |
Cash (refunds) payments of income taxes, net | (1,513) | 4,999 |
Accrued but unpaid purchases of property and equipment | 3,301 | 3,397 |
Inventory transfers to property and equipment | 73 | 603 |
Liabilities for contingent consideration in business combinations, including measurement period adjustments | $ 5,200 | $ 69 |
STOCKHOLDERS' EQUITY STOCKHOLDE
STOCKHOLDERS' EQUITY STOCKHOLDERS' EQUITY - DIVIDENDS ON COMMON STOCK (Details) - USD ($) | 3 Months Ended | |
Apr. 30, 2019 | Apr. 30, 2018 | |
Stockholders' Equity Note [Abstract] | ||
Dividends on common stock | $ 0 | $ 0 |
STOCKHOLDERS' EQUITY STOCKHOL_2
STOCKHOLDERS' EQUITY STOCKHOLDERS' EQUITY - SHARE REPURCHASE PROGRAM (Details) - USD ($) $ in Thousands | 3 Months Ended | 24 Months Ended | ||
Apr. 30, 2019 | Apr. 30, 2018 | Mar. 29, 2018 | Mar. 29, 2016 | |
Treasury stock acquired (in dollars) | $ 474 | $ 173 | ||
Stock Repurchase Program, Authorized Amount | $ 150,000 | |||
2016 Share Repurchase Program | ||||
Treasury stock acquired (in dollars) | $ 46,900 |
STOCKHOLDERS' EQUITY - TREASURY
STOCKHOLDERS' EQUITY - TREASURY STOCK (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Apr. 30, 2019 | Apr. 30, 2018 | Jan. 31, 2019 | |
Stockholders' Equity Note [Abstract] | |||
Treasury stock aquired (in shares) | 8,000 | 4,000 | |
Treasury stock acquired (in dollars) | $ 474 | $ 173 | |
Treasury stock, (in shares) | 1,673,000 | 1,665,000 | |
Treasury stock (in dollars) | $ 58,072 | $ 57,598 |
STOCKHOLDERS' EQUITY STOCKHOL_3
STOCKHOLDERS' EQUITY STOCKHOLDERS' EQUITY - SCHEDULE OF ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Apr. 30, 2019 | Apr. 30, 2018 | |
Activity in Accumulated Other Comprehensive Loss | ||
Accumulated other comprehensive income (loss) - beginning balance | $ (145,225) | |
Other comprehensive income (loss) before reclassifications | (5,143) | |
Amounts reclassified out of accumulated other comprehensive income (loss) | (845) | |
Net other comprehensive income (loss), current period | (4,298) | |
Accumulated other comprehensive income (loss) - ending balance | (149,523) | |
Foreign Exchange Contract | ||
Activity in Accumulated Other Comprehensive Loss | ||
Amounts reclassified out of accumulated other comprehensive income (loss) | (845) | $ 390 |
Unrealized gains (losses) on derivative financial instruments designated as hedges | Foreign Exchange Contract | ||
Activity in Accumulated Other Comprehensive Loss | ||
Accumulated other comprehensive income (loss) - beginning balance | (981) | |
Other comprehensive income (loss) before reclassifications | 306 | |
Amounts reclassified out of accumulated other comprehensive income (loss) | (845) | |
Net other comprehensive income (loss), current period | 1,151 | |
Accumulated other comprehensive income (loss) - ending balance | 170 | |
Unrealized gains (losses) on derivative financial instruments designated as hedges | Interest rate swap | ||
Activity in Accumulated Other Comprehensive Loss | ||
Accumulated other comprehensive income (loss) - beginning balance | (3,043) | |
Other comprehensive income (loss) before reclassifications | (1,593) | |
Amounts reclassified out of accumulated other comprehensive income (loss) | 0 | |
Net other comprehensive income (loss), current period | (1,593) | |
Accumulated other comprehensive income (loss) - ending balance | (4,636) | |
Foreign currency translation adjustments | ||
Activity in Accumulated Other Comprehensive Loss | ||
Accumulated other comprehensive income (loss) - beginning balance | (141,201) | |
Other comprehensive income (loss) before reclassifications | (3,856) | |
Amounts reclassified out of accumulated other comprehensive income (loss) | 0 | |
Net other comprehensive income (loss), current period | (3,856) | |
Accumulated other comprehensive income (loss) - ending balance | $ (145,057) |
STOCKHOLDERS' EQUITY STOCKHOL_4
STOCKHOLDERS' EQUITY STOCKHOLDERS' EQUITY - AMOUNTS RECLASSIFIED OUT OF ACCUMULATED OTHER COMPREHENSIVE LOSS (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Apr. 30, 2019 | Apr. 30, 2018 | |
Reclassifications Out of Accumulated Other Comprehensive Income (Loss) | ||
Amounts reclassified out of accumulated other comprehensive income (loss) | $ (845) | |
Foreign Exchange Contract | ||
Reclassifications Out of Accumulated Other Comprehensive Income (Loss) | ||
Derivative Instruments, gains (losses) Reclassified from Accumulated OCI into Income, Effective Portion, Net | (939) | $ 433 |
Other Comprehensive Income (Loss), Reclassification Adjustment on Derivatives Included in Net Income, Income Taxes | (94) | 43 |
Amounts reclassified out of accumulated other comprehensive income (loss) | (845) | 390 |
Foreign Exchange Contract | Cost of revenue - product | ||
Reclassifications Out of Accumulated Other Comprehensive Income (Loss) | ||
Derivative Instruments, gains (losses) Reclassified from Accumulated OCI into Income, Effective Portion, Net | (72) | 37 |
Foreign Exchange Contract | Cost of revenue - service and support | ||
Reclassifications Out of Accumulated Other Comprehensive Income (Loss) | ||
Derivative Instruments, gains (losses) Reclassified from Accumulated OCI into Income, Effective Portion, Net | (84) | 40 |
Foreign Exchange Contract | Research and development, net | ||
Reclassifications Out of Accumulated Other Comprehensive Income (Loss) | ||
Derivative Instruments, gains (losses) Reclassified from Accumulated OCI into Income, Effective Portion, Net | (472) | 220 |
Foreign Exchange Contract | Selling, general and administrative | ||
Reclassifications Out of Accumulated Other Comprehensive Income (Loss) | ||
Derivative Instruments, gains (losses) Reclassified from Accumulated OCI into Income, Effective Portion, Net | $ (311) | $ 136 |
INCOME TAXES INCOME TAXES - PRO
INCOME TAXES INCOME TAXES - PROVISION FOR INCOME TAXES (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Apr. 30, 2019 | Apr. 30, 2018 | |
Income Tax Disclosure [Abstract] | ||
Provision for income taxes | $ 1,409 | $ 274 |
Income (loss) before provision for income taxes | $ 5,170 | $ (951) |
Effective Income Tax Rate (as a percent) | 27.30% | (28.80%) |
Federal Statutory Income Tax Rate (as a percent) | 21.00% |
INCOME TAXES INCOME TAXES - UNR
INCOME TAXES INCOME TAXES - UNRECOGNIZED TAX BENEFITS (Details) - USD ($) $ in Thousands | Apr. 30, 2019 | Jan. 31, 2019 | Jan. 31, 2018 |
Income Tax Disclosure [Abstract] | |||
Unrecognized Tax Benefits (excluding interest and penalties) | $ 110,100 | $ 109,100 | |
Unrecognized Tax Benefits, Income Tax Penalties and Interest Accrued | 5,200 | $ 4,600 | |
Unrecognized Tax Benefits that Would Impact Effective Tax Rate | 101,800 | $ 100,900 | |
Significant Change in Unrecognized Tax Benefits is Reasonably Possible, Amount of Unrecorded Benefit | $ 5,800 |
FAIR VALUE MEASUREMENTS - FAIR
FAIR VALUE MEASUREMENTS - FAIR VALUE TABLE (Details) - Recurring - USD ($) $ in Thousands | Apr. 30, 2019 | Jan. 31, 2019 |
Level 1 | ||
Assets: | ||
Money market funds | $ 34,503 | $ 10,709 |
Foreign currency forward contracts | 0 | 0 |
Total assets | 34,503 | 10,709 |
Liabilities: | ||
Foreign currency forward contracts | 0 | 0 |
Contingent consideration - business combinations | 0 | 0 |
Option to acquire noncontrolling interests of consolidated subsidiaries | 0 | 0 |
Total liabilities | 0 | 0 |
Level 2 | ||
Assets: | ||
Money market funds | 0 | 0 |
Foreign currency forward contracts | 905 | 1,401 |
Total assets | 2,375 | 3,473 |
Liabilities: | ||
Foreign currency forward contracts | 496 | 2,086 |
Contingent consideration - business combinations | 0 | 0 |
Option to acquire noncontrolling interests of consolidated subsidiaries | 0 | 0 |
Total liabilities | 6,541 | 6,114 |
Level 3 | ||
Assets: | ||
Money market funds | 0 | 0 |
Foreign currency forward contracts | 0 | 0 |
Total assets | 0 | 0 |
Liabilities: | ||
Foreign currency forward contracts | 0 | 0 |
Contingent consideration - business combinations | 61,379 | 61,340 |
Option to acquire noncontrolling interests of consolidated subsidiaries | 2,850 | 3,000 |
Total liabilities | 64,229 | 64,340 |
Interest rate swap | Level 1 | ||
Assets: | ||
Interest rate swap agreements | 0 | 0 |
Liabilities: | ||
Interest Rate Swap Agreements | 0 | 0 |
Interest rate swap | Level 2 | ||
Assets: | ||
Interest rate swap agreements | 1,470 | 2,072 |
Liabilities: | ||
Interest Rate Swap Agreements | 6,045 | 4,028 |
Interest rate swap | Level 3 | ||
Assets: | ||
Interest rate swap agreements | 0 | 0 |
Liabilities: | ||
Interest Rate Swap Agreements | $ 0 | $ 0 |
FAIR VALUE MEASUREMENTS - CONTI
FAIR VALUE MEASUREMENTS - CONTINGENT CONSIDERATION TABLE (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Apr. 30, 2019 | Apr. 30, 2018 | |
Changes in the estimated fair value of liability for contingent consideration measured using significant unobservable inputs (Level 3) | ||
Change in fair value, recorded in operating expenses | $ (1,200) | $ 800 |
Payments of contingent consideration | 6,400 | 3,100 |
Liability for contingent consideration | ||
Changes in the estimated fair value of liability for contingent consideration measured using significant unobservable inputs (Level 3) | ||
Fair value measurement at the beginning of the period | 61,340 | 62,830 |
Contingent consideration liabilities recorded for business combinations, including measurement period adjustments | 5,200 | 69 |
Change in fair value, recorded in operating expenses | 1,213 | (822) |
Payments of contingent consideration | (6,361) | (3,084) |
Foreign currency translation and other | (13) | (169) |
Fair value measurement at the end of the period | $ 61,379 | $ 58,824 |
FAIR VALUE MEASUREMENTS FAIR VA
FAIR VALUE MEASUREMENTS FAIR VALUE MEASUREMENTS - OPTION TO ACQUIRE NONCONTROLLING INTERESTS (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Apr. 30, 2019 | Apr. 30, 2018 | |
Changes in the estimated fair value of liability for contingent consideration measured using significant unobservable inputs (Level 3) | ||
Change in fair value, recorded in operating expenses | $ (1,200) | $ 800 |
Option to Acquire Noncontrolling Interests | ||
Changes in the estimated fair value of liability for contingent consideration measured using significant unobservable inputs (Level 3) | ||
Fair value measurement at the beginning of the period | 3,000 | 2,950 |
Change in fair value, recorded in operating expenses | (150) | 50 |
Fair value measurement at the end of the period | $ 2,850 | $ 3,000 |
FAIR VALUE MEASUREMENTS - OTHER
FAIR VALUE MEASUREMENTS - OTHER FAIR VALUE DISCLOSURES (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended |
Apr. 30, 2019 | Jan. 31, 2019 | |
Term Loans | Level 3 | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions | ||
Term Loans - Fair Value | $ 415 | $ 412 |
1.50% Convertible Senior Notes | Level 2 | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions | ||
1.50% Convertible Senior Notes - Fair Value | $ 451 | $ 400 |
Option to Acquire Noncontrolling Interests | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions | ||
Fair Value Inputs, Discount Rate | 13.50% | 12.50% |
Minimum | Contingent Consideration | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions | ||
Fair Value Inputs, Discount Rate | 3.30% | 3.80% |
Maximum | Contingent Consideration | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions | ||
Fair Value Inputs, Discount Rate | 5.90% | 5.80% |
FAIR VALUE MEASUREMENTS FAIR _2
FAIR VALUE MEASUREMENTS FAIR VALUE MEASUREMENTS - ASSETS AND LIABILITIES NOT MEASURED AT FV ON (Details) $ in Millions | Apr. 30, 2019USD ($) |
Fair Value Disclosures - Assets and Liabilities Not Measured at Fair Value [Abstract] | |
Noncontrollling Equity Investment in Privately-held Comp | $ 3.8 |
DERIVATIVE FINANCIAL INSTRUME_3
DERIVATIVE FINANCIAL INSTRUMENTS DERIVATIVE FINANCIAL INSTRUMENTS - INTEREST RATE SWAP AGREEMENTS (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended |
Apr. 30, 2019 | Jan. 31, 2018 | |
2016 Interest Rate Swap | ||
DERIVATIVE FINANCIAL INSTRUMENTS | ||
Derivative - Fixed Interest Rate | 4.143% | |
Derivative - Index Interest Rate Floor | 0.75% | |
Derivative - Basis Spread on Variable Rate | 2.75% | |
Derivative - Notional Amount | $ 200 | |
Gain on Discontinuation of Cash Flow Hedge | $ 0.9 | |
2018 Interest Rate Swap | ||
DERIVATIVE FINANCIAL INSTRUMENTS | ||
Derivative - Fixed Interest Rate | 2.949% | |
Derivative - Index Interest Rate Floor | 0.00% | |
Derivative - Notional Amount | $ 200 | |
Fixed Interest Rate, Including Impact of Margin | 4.949% | |
2017 Term Loan - Following January 2018 Amendment | Variable Rate Based on Eurodollar Rate | Eurodollar loans | ||
DERIVATIVE FINANCIAL INSTRUMENTS | ||
Interest rate margin (as a percent) | 2.00% |
DERIVATIVE FINANCIAL INSTRUME_4
DERIVATIVE FINANCIAL INSTRUMENTS - ASSETS AND LIABILITIES (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Apr. 30, 2019 | Jan. 31, 2019 | |
Fair Values of Derivative Financial Instruments | ||
Assets, Fair Value | $ 2,375 | $ 3,473 |
Liabilities, Fair Value | $ 6,541 | 6,114 |
Foreign Exchange Contract | ||
Fair Values of Derivative Financial Instruments | ||
Term to maturity of derivative contracts is generally less than this period (in months) | 12 months | |
Notional amounts of derivative financial instruments | $ 87,800 | 123,000 |
Prepaid Expenses and Other Current Assets | Foreign Exchange Contract | Derivative designated as hedging instruments | ||
Fair Values of Derivative Financial Instruments | ||
Assets, Fair Value | 684 | 738 |
Prepaid Expenses and Other Current Assets | Foreign Exchange Contract | Derivative not designated as hedging instruments | ||
Fair Values of Derivative Financial Instruments | ||
Assets, Fair Value | 221 | 663 |
Prepaid Expenses and Other Current Assets | Interest rate swap | Derivative not designated as hedging instruments | ||
Fair Values of Derivative Financial Instruments | ||
Assets, Fair Value | 1,470 | 2,072 |
Accrued expenses and other current liabilities | Foreign Exchange Contract | Derivative designated as hedging instruments | ||
Fair Values of Derivative Financial Instruments | ||
Liabilities, Fair Value | 496 | 1,830 |
Accrued expenses and other current liabilities | Foreign Exchange Contract | Derivative not designated as hedging instruments | ||
Fair Values of Derivative Financial Instruments | ||
Liabilities, Fair Value | 0 | 256 |
Accrued expenses and other current liabilities | Interest rate swap | Derivative designated as hedging instruments | ||
Fair Values of Derivative Financial Instruments | ||
Liabilities, Fair Value | 415 | 122 |
Other liabilities | Interest rate swap | Derivative designated as hedging instruments | ||
Fair Values of Derivative Financial Instruments | ||
Liabilities, Fair Value | $ 5,630 | $ 3,906 |
DERIVATIVE FINANCIAL INSTRUME_5
DERIVATIVE FINANCIAL INSTRUMENTS - CASH FLOW HEDGES (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Apr. 30, 2019 | Apr. 30, 2018 | Jan. 31, 2019 | |
DERIVATIVE FINANCIAL INSTRUMENTS | |||
Accumulated Other Comprehensive Income (Loss), Net of Tax | $ (149,523) | $ (145,225) | |
Cash flow hedging | Derivative designated as hedging instruments | |||
DERIVATIVE FINANCIAL INSTRUMENTS | |||
Net (losses) gains recognized in other comprehensive income (loss) | (1,675) | $ (5,929) | |
Foreign Exchange Contract | |||
DERIVATIVE FINANCIAL INSTRUMENTS | |||
Derivative Instruments, gains (losses) Reclassified from Accumulated OCI into Income, Effective Portion, Net | (939) | 433 | |
Foreign Exchange Contract | Cash flow hedging | Derivative designated as hedging instruments | |||
DERIVATIVE FINANCIAL INSTRUMENTS | |||
Net (losses) gains recognized in other comprehensive income (loss) | 342 | (6,149) | |
Derivative Instruments, gains (losses) Reclassified from Accumulated OCI into Income, Effective Portion, Net | (939) | 433 | |
Net gains on foreign currency forward contracts expected to be reclassified to earnings during next 12 months | 170 | ||
Interest rate swap | Cash flow hedging | Derivative designated as hedging instruments | |||
DERIVATIVE FINANCIAL INSTRUMENTS | |||
Net (losses) gains recognized in other comprehensive income (loss) | (2,017) | $ 220 | |
Net losses on interest rate swaps expected to be reclassified to earnings during next 12 months | (327) | ||
Unrealized gains (losses) on derivative financial instruments designated as hedges | Foreign Exchange Contract | |||
DERIVATIVE FINANCIAL INSTRUMENTS | |||
Accumulated Other Comprehensive Income (Loss), Net of Tax | 170 | (981) | |
Unrealized gains (losses) on derivative financial instruments designated as hedges | Interest rate swap | |||
DERIVATIVE FINANCIAL INSTRUMENTS | |||
Accumulated Other Comprehensive Income (Loss), Net of Tax | $ (4,636) | $ (3,043) |
DERIVATIVE FINANCIAL INSTRUME_6
DERIVATIVE FINANCIAL INSTRUMENTS DERIVATIVE FINANCIAL INSTRUMENTS - NOT DESIGNATED AT HEDGING INSTRUMENTS (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Apr. 30, 2019 | Apr. 30, 2018 | |
DERIVATIVE FINANCIAL INSTRUMENTS | ||
Gains (losses) on derivative financial instruments, net | $ 549 | $ 1,488 |
Derivative not designated as hedging instruments | ||
DERIVATIVE FINANCIAL INSTRUMENTS | ||
Gains (losses) on derivative financial instruments, net | 549 | 1,488 |
Derivative not designated as hedging instruments | Foreign Exchange Contract | ||
DERIVATIVE FINANCIAL INSTRUMENTS | ||
Gains (losses) on derivative financial instruments, net | 564 | 761 |
Derivative not designated as hedging instruments | Interest rate swap | ||
DERIVATIVE FINANCIAL INSTRUMENTS | ||
Gains (losses) on derivative financial instruments, net | $ (15) | $ 727 |
STOCK-BASED COMPENSATION STOCK-
STOCK-BASED COMPENSATION STOCK-BASED COMPENSATION - AMENDED AND RESTATED PLAN (Details) - 2017 Amended Plan | Apr. 30, 2019shares |
Stock-Based Compensation Plans | |
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Authorized | 7,975,000 |
Reduction in Amended 2017 Plan Capacity From Awards Other Than Options or SARs | 2.47 |
STOCK-BASED COMPENSATION STOC_2
STOCK-BASED COMPENSATION STOCK-BASED COMPENSATION - STOCK-BASED COMPENSATION - BY LINE ITEM (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Apr. 30, 2019 | Apr. 30, 2018 | |
Stock-Based Compensation Plans | ||
Stock-based compensation expense | $ 17,103 | $ 16,459 |
Cost of revenue - product | ||
Stock-Based Compensation Plans | ||
Stock-based compensation expense | 334 | 117 |
Cost of revenue - service and support | ||
Stock-Based Compensation Plans | ||
Stock-based compensation expense | 1,070 | 729 |
Research and development, net | ||
Stock-Based Compensation Plans | ||
Stock-based compensation expense | 2,590 | 1,509 |
Selling, general and administrative | ||
Stock-Based Compensation Plans | ||
Stock-based compensation expense | $ 13,109 | $ 14,104 |
STOCK-BASED COMPENSATION STOC_3
STOCK-BASED COMPENSATION STOCK-BASED COMPENSATION - STOCK-BASED COMPENSATION - BY TYPE (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Apr. 30, 2019 | Apr. 30, 2018 | |
Stock-Based Compensation Plans | ||
Stock-based compensation expense | $ 17,103 | $ 16,459 |
Equity Settled Awards | ||
Stock-Based Compensation Plans | ||
Stock-based compensation expense | 17,065 | 16,443 |
Equity Settled Awards | Restricted stock units and restricted stock awards | ||
Stock-Based Compensation Plans | ||
Stock-based compensation expense | 14,890 | 14,895 |
Equity Settled Awards | Stock Bonus Program and Bonus Share Program | ||
Stock-Based Compensation Plans | ||
Stock-based compensation expense | 2,175 | 1,548 |
Cash Settled Awards | Phantom stock units (cash settled awards) | ||
Stock-Based Compensation Plans | ||
Stock-based compensation expense | $ 38 | $ 16 |
STOCK-BASED COMPENSATION STOC_4
STOCK-BASED COMPENSATION STOCK-BASED COMPENSATION - RESTRICTED STOCK UNITS (Details) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | |
Apr. 30, 2019 | Apr. 30, 2018 | |
Restricted Stock Units (RSUs) | ||
Summary of award activity | ||
Beginning balance (in shares) | 2,777,000 | 2,808,000 |
Granted (in shares) | 1,444,000 | 1,324,000 |
Released (in shares) | (448,000) | (180,000) |
Forfeited (in shares) | (60,000) | (100,000) |
Ending balance (in shares) | 3,713,000 | 3,852,000 |
Weighted-Average Grant-Date Fair Value | ||
Beginning balance (in dollars per share) | $ 41.05 | $ 41.18 |
Granted (in dollars per share) | 61.10 | 42.39 |
Released (in dollars per share) | 39.50 | 38.65 |
Forfeited (in dollars per share) | 35.44 | 42.11 |
Ending balance (in dollars per share) | $ 49.23 | $ 41.69 |
Additional disclosures | ||
Unrecognized compensation expense | $ 131.4 | |
Remaining weighted-average vesting period over which expense is expected to be recognized (in years) | 2 years | |
RSUs, Excluding PSUs | ||
Summary of award activity | ||
Granted (in shares) | 1,158,000 |
STOCK-BASED COMPENSATION STOC_5
STOCK-BASED COMPENSATION STOCK-BASED COMPENSATION - PERFORMANCE RESTRICTED STOCK UNITS (Details) - Performance- based RSU's - shares shares in Thousands | 3 Months Ended | |
Apr. 30, 2019 | Apr. 30, 2018 | |
Stock-Based Compensation Plans | ||
Beginning balance (in shares) | 512 | 506 |
Granted (in shares) | 286 | 174 |
Released (in shares) | (234) | (72) |
Forfeited (in shares) | (26) | (83) |
Ending balance (in shares) | 538 | 525 |
STOCK-BASED COMPENSATION STOC_6
STOCK-BASED COMPENSATION STOCK-BASED COMPENSATION - STOCK BONUS PROGRAM - (Details) - Stock Bonus Program - shares | 3 Months Ended | |
Apr. 30, 2019 | Mar. 21, 2019 | |
Stock-Based Compensation Plans | ||
Vesting period for executive officers (in years) | 1 year | |
Trailing period of average price of common stock to determine the number of shares to be issued (in days) | 5 days | |
2019 Plan | ||
Stock-Based Compensation Plans | ||
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Authorized | 125,000 | |
2019 Amended Plan [Member] | ||
Stock-Based Compensation Plans | ||
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Authorized | 150,000 | |
2020 Plan [Member] | ||
Stock-Based Compensation Plans | ||
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Authorized | 150,000 | |
Discount from market price (as a percent) | 15.00% |
STOCK-BASED COMPENSATION STOC_7
STOCK-BASED COMPENSATION STOCK-BASED COMPENSATION - BONUS SHARE PROGRAM (Details) - Combined Stock Bonus Program and Bonus Share Program - USD ($) $ in Millions | Apr. 30, 2019 | Mar. 21, 2019 | Jan. 31, 2019 |
Stock-Based Compensation Plans | |||
Total accrued liability | $ 11.4 | $ 9.3 | |
2019 Plan | |||
Stock-Based Compensation Plans | |||
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Authorized | 300,000 | ||
2020 Plan [Member] | |||
Stock-Based Compensation Plans | |||
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Authorized | 300,000 |
LEASES LEASES - ADDITIONAL INFO
LEASES LEASES - ADDITIONAL INFORMATION (Details) $ in Thousands | 3 Months Ended |
Apr. 30, 2019USD ($) | |
Lessee, Lease, Description [Line Items] | |
Lessee Operating and Finance Leases Options to Extend Lease Terms | 6 years |
Lessee Operating and Finance Leases Options to Terminate Leases Term | 1 year |
Finance Lease, Right-of-Use Asset | $ 6,853 |
Finance Lease, Right-of-Use Asset, Accumulated Depreciation | (271) |
Operating Leases, Future Minimum Payments Due | $ 7,000 |
Minimum | |
Lessee, Lease, Description [Line Items] | |
Lessee Operating and Finance Leases Remaining Lease Term | 1 year |
Lessor, Operating Lease, Lease Not yet Commenced, Term of Contract | 1 year |
Maximum | |
Lessee, Lease, Description [Line Items] | |
Lessee Operating and Finance Leases Remaining Lease Term | 10 years |
Lessor, Operating Lease, Lease Not yet Commenced, Term of Contract | 7 years |
LEASES LEASES - COMPONENT OF LE
LEASES LEASES - COMPONENT OF LEASE EXPENSE (Details) $ in Thousands | 3 Months Ended |
Apr. 30, 2019USD ($) | |
Leases [Abstract] | |
Operating lease expenses | $ 7,437 |
Amortization of right-of-use assets | 93 |
Interest on lease liabilities | 30 |
Total finance lease expenses | 123 |
Variable lease expenses | 1,966 |
Short-term lease expenses | 255 |
Sublease income | (223) |
Total lease expenses | $ 9,558 |
LEASES LEASES - SUPPLEMENTAL CA
LEASES LEASES - SUPPLEMENTAL CASH FLOW INFORMATION RELATED TO LEASES (Details) $ in Thousands | 3 Months Ended |
Apr. 30, 2019USD ($) | |
Leases [Abstract] | |
Operating cash flows from operating leases | $ 6,841 |
Operating cash flows from finance leases | 30 |
Financing cash flows from finance leases | 472 |
Right-of-Use Asset Obtained in Exchange for Operating Lease Liability | 1,773 |
Right-of-Use Asset Obtained in Exchange for Finance Lease Liability | $ 0 |
Operating Lease, Weighted Average Remaining Lease Term | 6 years |
Finance Lease, Weighted Average Remaining Lease Term | 3 years |
Operating Lease, Weighted Average Discount Rate, Percent | 5.60% |
Finance Lease, Weighted Average Discount Rate, Percent | 5.50% |
LEASES LEASES - MATURITIES OF L
LEASES LEASES - MATURITIES OF LEASE LIABILITIES (Details) $ in Thousands | Apr. 30, 2019USD ($) |
Operating Lease Liabilities, Payments Due [Abstract] | |
2020 (remainder of year) | $ 19,160 |
2021 | 24,223 |
2022 | 19,563 |
2023 | 17,060 |
2024 | 15,578 |
Thereafter | 31,888 |
Future minimum lease payments | 127,472 |
Imputed interest | (20,064) |
Operating lease liabilities | 107,408 |
Finance Lease Liabilities, Payments, Due [Abstract] | |
2020 (remainder of year) | 1,083 |
2021 | 1,696 |
2022 | 1,491 |
2023 | 1,138 |
2024 | 153 |
Thereafter | 0 |
Future minimum lease payments | 5,561 |
Imputed interest | (427) |
Finance lease liabilities | $ 5,134 |
LEASES LEASES - SUPPLEMENTAL BA
LEASES LEASES - SUPPLEMENTAL BALANCE SHEET INFO (Details) - USD ($) $ in Thousands | Apr. 30, 2019 | Jan. 31, 2019 |
Lessee, Finance Lease, Description [Abstract] | ||
Finance Lease, Liability, Noncurrent | $ 0 | |
Finance lease liabilities | 5,134 | |
Lessee, Operating Lease, Description [Abstract] | ||
Operating lease liabilities - long-term | 85,649 | $ 0 |
Operating lease liabilities | 107,408 | |
Accrued expenses and other current liabilities | ||
Lessee, Finance Lease, Description [Abstract] | ||
Finance Lease, Liability, Current | 1,500 | |
Lessee, Operating Lease, Description [Abstract] | ||
Operating lease liability - current | 21,759 | |
Other liabilities | ||
Lessee, Finance Lease, Description [Abstract] | ||
Finance Lease, Liability, Noncurrent | 3,634 | |
Lessee, Operating Lease, Description [Abstract] | ||
Operating lease liabilities - long-term | $ 0 |
LEASES LEASES - OPERATING AND C
LEASES LEASES - OPERATING AND CAPITAL LEASE FUTURE MIMIMUM LEASE PMTS AS OF JANUARY 31, 2019 (Details) $ in Thousands | Jan. 31, 2019USD ($) |
Operating Leases, Future Minimum Payments Due, Fiscal Year Maturity [Abstract] | |
2020 | $ 22,769 |
2021 | 21,942 |
2022 | 19,157 |
2023 | 16,882 |
2024 | 15,152 |
Thereafter | 33,477 |
Operating lease liabilities | 129,379 |
Capital Leases, Future Minimum Payments Due, Fiscal Year Maturity [Abstract] | |
2020 | 1,343 |
2021 | 1,252 |
2022 | 1,130 |
2023 | 765 |
2024 | 107 |
Thereafter | 0 |
Capital Leases, Future Minimum Payments Due | 4,597 |
Less: Amount representing interest and other charges | 315 |
Present value of minimum lease payments | $ 4,282 |
COMMITMENTS AND CONTINGENCIES C
COMMITMENTS AND CONTINGENCIES COMMITMENTS AND CONTINGENCIES - LEGAL PROCEEDINGS (Details) $ in Millions | 3 Months Ended |
Apr. 30, 2019USD ($) | |
Loss Contingency, Information about Litigation Matters [Abstract] | |
Loss Contingency, Damages Sought, Value | $ 150 |
SEGMENT INFORMATION SEGMENT INF
SEGMENT INFORMATION SEGMENT INFORMATION - SEGMENT OVERVIEW (Details) | 3 Months Ended |
Apr. 30, 2019 | |
Segment Reporting [Abstract] | |
Number of Reportable Segments | 2 |
SEGMENT INFORMATION SEGMENT I_2
SEGMENT INFORMATION SEGMENT INFORMATION - SEGMENT REVENUE AND SEGMENT CONTRIBUTION (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Apr. 30, 2019 | Apr. 30, 2018 | |
Segment Reporting, Revenue Reconciling Item [Line Items] | ||
Revenue | $ 315,259 | $ 289,207 |
Operating Income | 14,468 | 7,782 |
Customer Engagement | ||
Segment Reporting, Revenue Reconciling Item [Line Items] | ||
Revenue | 207,095 | 186,456 |
Cyber Intelligence | ||
Segment Reporting, Revenue Reconciling Item [Line Items] | ||
Revenue | 108,164 | 102,751 |
Segment Amount | Customer Engagement | ||
Segment Reporting, Revenue Reconciling Item [Line Items] | ||
Revenue | 215,867 | 189,175 |
Operating Income | 78,818 | 66,802 |
Segment Amount | Cyber Intelligence | ||
Segment Reporting, Revenue Reconciling Item [Line Items] | ||
Revenue | 108,291 | 102,795 |
Operating Income | 27,290 | 21,222 |
Reconciling Items | Customer Engagement | ||
Segment Reporting, Revenue Reconciling Item [Line Items] | ||
Segment Revenue Adjustments | (8,772) | (2,719) |
Reconciling Items | Cyber Intelligence | ||
Segment Reporting, Revenue Reconciling Item [Line Items] | ||
Segment Revenue Adjustments | $ (127) | $ (44) |
SEGMENT INFORMATION SEGMENT I_3
SEGMENT INFORMATION SEGMENT INFORMATION - RECONCILATION OF SEGMENT CONTRIBUTION TO OPERATING INCOME (LOSS) (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Apr. 30, 2019 | Apr. 30, 2018 | |
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | ||
Amortization of intangible assets | $ 14,400 | $ 15,100 |
Stock-based compensation expense | 17,103 | 16,459 |
Total reconciling items, net | 186,603 | 167,333 |
Operating Income | 14,468 | 7,782 |
Segment Amount | ||
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | ||
Operating Income | 106,108 | 88,024 |
Reconciling Items | ||
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | ||
Segment Revenue Adjustments | 8,899 | 2,763 |
Amortization of intangible assets | 14,420 | 15,110 |
Stock-based compensation expense | 17,103 | 16,459 |
Acquisition, integration, restructuring, and other unallocated expenses | 7,364 | 4,001 |
Total reconciling items, net | 91,640 | 80,242 |
Shared Support Expenses | ||
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | ||
Shared Support Expenses | $ 43,854 | $ 41,909 |