VRNT - Earnings call transcript Q3 2020

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Operator

Ladies and gentlemen, thank you for standing by, and welcome to the Verint's Third Quarter Conference Call. At this time, all participant lines are in a listen-only mode. After the speaker's presentation, there will be a question-and-answer session. [Operator Instructions] Please be advised that today's conference is being recorded. [Operator Instructions] I would now like to hand the conference over to your speaker today, Alan Roden, Senior Vice President of Corporate Development. you. Thank sir. ahead, go Please

Alan Roden

you, Operator. our Bodner, you joining and CEO; Good call today. afternoon CFO. conference Verint's Dan Doug thank I'm and for Robinson, Thank here Verint's with

WebEx mention started, getting our is I'd to slides. Before that like call accompanying today a

like If verint.com, your statements made These forward-looking slides call The Private real-time Laws. click performance. on draw of guarantees statements the or Investor are Verint tab, to call, meaning view on XXXX that during of our also the provisions to these those expressed IR these undue click I'd this implied and forward-looking conference call. are visit statements. date obligation on the and on call, in differ from are the are no assumes section future by this to and update select as reliance webcast expectations and the Web on you'd certain management's to of required of of may fact them. attention materially Securities the statements. Securities like or Federal forward-looking not except to these Reform of law, the Investors statements matters forward-looking cautioned current place not in within please Act Actual discussed could other Litigation site today's of revise forward-looking contain link, at as Relations the results based by the

discussed ended see it Investor our comparing releases information our our site measures filings The between as periods our among with forward-looking verint.com XXst, business those other a financial materially is slides non-GAAP in see focus considered other Form used results Web Please investors and those to, cause companies. actual should or have management today's included differ information, Relations Verint's measures. our today these believes make please as comparative financial when more in The not for from for operating measures, fiscal for we GAAP and For peer of The non-GAAP results provides the of on those non-GAAP the from, WebEx measures to XXXX, earnings could detailed these reconciliation is differ superior in to may isolation supplemental results financial of company risks year limitations, XX-K and SEC. include financial that and January GAAP informational uncertainties the discussion the believe meaningful companies. regarding other indicated investors to we substitute statements, section a measures assessing purposes. in at and because useful and but or non-GAAP financial and uses be by from information to measures

Dan. over Dan? the to like Now, call turn I'd to

Dan Bodner

Thank you, third increasing adjusted growth to Alan. coming period year. in Cash with revenue prior strong, expected compared same I'm also of in quarter, strong report better strong the than from year-over-year EBITDA a year-to-date please the was operations to XX% XX%. and

coming gradually cloud visibility we continue. prior and back, We has quarters. deals ahead, see believe our from will perpetual improved Looking momentum our

public guidance resuming within our for Also, expectations management our with and that days SEC, year-end. be on holding track are separation, Ahead the the to already will next filing report and in the for made January. we confidential plan of are We two into pleased to initial our publicly I'm We year, a to weeks. roadshows, file strong separation investor QX. we two fiscal shortly with complete after companies

to being Turning the and to accelerated the is QX Engagement, believe Customer COVID. momentum, by shift we experienced we in significant cloud industry's cloud

strategy. and to customers, cloud intelligence platform, analytics significant the our to of differentiation displaced continued we and our new partner-agnostic cloud due artificial QX, During our win innovation, competitors and

$X order of An decision examples A an of to to $XX million three and transition driven to companies existing to was by the easily ability competitive largest cloud largest due deals. related from integrate of cloud growth SaaS. one large order million are and $X their our order rapid BPOs. partner million This insurance Here from a self-service one their into to their cloud our customer in from agnostic and the interactions, displacement open cloud approach, operations. pharmaceutical

continue perpetual to large large is Behind these return gradual orders we we to of In believe trends. orders, recent these QX, the address license ability saw wins a our will addition in which in following industry cloud QX.

on workforce. significant addressing opportunity lasting our cloud our of recent the forward. to COVID for momentum our believe ability part First, impact is the creating in to going help Verint their customers customers to We environment, looking navigate COVID are due

Second, positioned are uniquely over key two we even on between And organizations strategic address Verint exceptional problem, for decades. is workforce strategic been right this how more which customer are strike customers today a to to addressing and experience. in a problem. market cost focused leader engagement balance help efficiencies the has

an finally, environment, Third, an offer converting evolving an program we customers conversions. of believe expanding the deployments competitive choice launched positioned cloud Verint's base SaaS, To role become and industry summarize, strong of the network. and QX, and these our attractive to and platform our increasingly we expect cloud their partner to in open interest differentiator. closed partner number have are ecosystem important uniquely a open on recent the customer with us increase we will and express number solutions, growth increasing, large which has across partner many trends the increasing legacy is are address Unlike platform, the pace work makes a in partners ecosystem. of we in we of an seeing industry industry competitors a And that focus

for our million of for of guidance $XXX our at to segment, revenue Engagement the Turning Customer outlook range. expect current our we year, the midpoint

this year Our which I milestones to important market expect shift guidance reflects highlight. a to two and to would we strong like SaaS, reach

new of about this approximately to from First, year, SaaS, all the to and quarter two come years bookings compared a the as third in only year we ago. prior expect a software half

over And two be of the from up new be XX% our expect second, year, to crossing We are years revenue from the XXX software bps bps from to XXX ago. mark. just prior bookings up generated we and XX% sources, recurring pleased

We KPIs expect these year, to next. next improve will I discuss further which

perspective, ahead bookings expect Looking software to a by year our accelerate strong conversions. we XX% From year, and from new expect new revenue bookings next to two-thirds driving growth to of mix cloud our we SaaS. software approximately next SaaS coming

targets improved improvement another Engagement revenue better the next approximate headwind targeting business cloud marks our revenue the planned the software our growth ahead our over many transitions, percentage the our we will CAGR also is long-term increase XXX revenue customer, three other fiscal associated gradually recurring XX% an year. Customer Achieving in visibility, cloud to level from less substantial years. current and completion with introducing which 'XX. of transition, and of separation. for ending transitions. are 'XX that for lifetime bps Today, We over of benefits the that and to Like the expect XX% of us economics we cloud We're the improve to revenue cloud expect margins XX%, provide including our

sources. year in from 'XX, of billion with of $X software revenue XX% approximately ending our fiscal revenue targeting are recurring We generated

differentiation review engagements growth of on January our provide more Day strategy, three-year detail competitive Virtual as as for be held XX. targets well will during and on our to TAM, We Investor customer

is separation. software solutions. business, issuer. in Moving to to the Cognyte headquartered reflect the Israel, become security the which Cognyte our CGNT company, powerful, private Cyber announce will upon foreign of Ignite," symbol to a the name Intelligence our official listed we'll excited NASDAQ as be new analytical and words, the and nature under the be today coined on will I'm "Cognition this for from

COVID-related around to Our many security growth After Actionable one come enter for one help security Customers experienced each. for analytics investigations received four mission-critical the improved impact accelerate Verint QX crime, for multiple enterprise threats. cyber million, orders QX world. we including revenue customers $XX year, $X security generates approximately In to strong million, Intelligence QX, order and $X.X earlier approximately million with of sequential software large and we for in software terror, in and visibility. approximately our the governments orders, and some for

strategy. we well execute a addition, to on continued model softer In

During and non-GAAP allocated increase, bps non-GAAP gross we're profit fully gross making estimated and and XX%, QX, margins XX% We're year-over-year our XXX came very financial on year-over-year. strategic in the increased at progress goals. our with pleased

of revenue as that is of part that been margins. revenue impact the Looking amount over impact is percentage percentage of steadily is years, model of model also transition our been financial steadily we has The financials. our generated having see our you the positive from our can three reduce The services. on generate software software increased. biggest we from increasing is recurring to the gross The the last has revenue of on

allocated Our it XXX gross I reach years. have And to last year expect approximately three estimated fully for points this basis first over XX% increased margins time. the the

successful Cyber and year executing public solid of million a well team For independent this management expect foundation at $XXX midpoint company. be Overall, guidance. we the Intelligence revenue, our to our a has is built

that analytics a is believe leader is growth market Cognyte forward, Looking for security we Cognyte market well-positioned leadership. in software. and

of complex to billion over Overall, can technology the growth. have meet customers, are long strength. a growing We participate of is is addressing that for very leadership challenges the face. in and successful trends long-term become the market more believe security analytics favorable customers and seeking our customers Behind the those and a critical forefront security track our run. growth large market, has stain technology, learning advanced support challenges is open as artificial developed machine innovative, which which intelligence profitable trusted challenges. software addressable relationships with the we our record at $XX Cognyte security and We a are

expect a XX% growth for For Intelligence revenue we next year, business. Cyber

growth improve, greater For 'XX, software security we're by and driven ending open adoption 'XX fiscal our solutions. targeting revenue of to year

both and two customer strategy have strategy, during done I'm will of our strategy to Intelligence. competitive Cognyte's for prosper I Virtual we very would Investor separation, that XX. three-year appeal our will also proud now the our We believe of on execution companies. pleased and with TAM, the to continue and investors, engagement, as differentiation detail provide moral to in cloud review independent as work to a targets, and very held in is And I'm to January growth public softer well be summarize. the businesses like Day more prepare on Cyber

turn me the to let Doug. Now, over Doug. call

Doug Robinson

Good afternoon, Dan. Thanks, everyone.

IR expenses, non-GAAP Our between financial stock-based mentioned and discussion financial in acquisitions, of adjustments our separation-related well GAAP, acquisition release amortization amount in include measures and intangibles, can available financial measures that Differences earnings of non-GAAP significantly non-GAAP other between expenses, to related as Reconciliation adjustments, the our is today compensation, GAAP items related other our Web revenue measures. vary value including acquisition certain will related section frequency. certain as include as in Alan site. of fair

For four it has metrics, foreign related certain topics. rates. also cover Today, I'll adjustments exchange to

First, fiscal I'll in QX review 'XX our results guidance.

on you separately models two will build to you so an our on you This update by would the company. we is consolidated if model our enable provide is review business. We until meant basis on plan year outlook our separation initial your as like information each remained to as-is next occurs. will basis. look Investor I help additional one What Verint businesses Day, to Second, a start for what for mean we of "As-is," that to

and separation, increase cash a the and which growth, expectations fourth, a pleased Third, on I'll as business. operations you drove the in some our and mentioned, the in and EBITDA targets XX% we came our through expect dissynergies anticipated year-over-year long-term take provide QX in year-to-date revenue Dan in We're with the regarding each of GAAP, I'll sequential detail a basis. XX% capital additional ahead X% amount increase for adjusted from including structures of

to expect finish guidance. and the our We we providing given visibility, year improved strong are

this COVID the non-GAAP and to guidance. expect our delaying year million adjusted pleased orders, non-GAAP performance and EPS revenue license EBITDA with year-over-year. we're perpetual midpoint at revenue expect We $X.XX of $X we adjusted EBITDA of $XXX despite diluted $X.XX Overall, of by million about with grow billion, some our

this Looking ahead year we experience the next momentum is and outlook. will initial are introducing year, our believe continue we as the

$X.XX around revenue expect X% We to to billion. increase non-GAAP

EBITDA a adjusted at discuss dissynergies, minute. similar before to I'll which to We a in separation rate expect increase

January, expense, we'll two companies. At interest depending in of impact share expect separation. the you to in consolidated the Day Excluding and $XX non-GAAP Again, separation, the million $XX.X model we the we provide providing regarding around Investor our the of shares. are of this account post non-GAAP a information more update on million of models your help detail

file to the we As earlier, weeks. Dan noted next our two publicly at in XX plan

consummate companies provide capital sheets, to after strong We working the into Today year-end. and will additional separation. expect shortly to structures cash the balance have strong capital, visibility and we'd like some separation adequate generation synergies. Both post

have excluding $XX Most expenses. EBITDA, net related separation modest each synergies about the about we synergies. company of point, At million these this other preferred times leverage stock. separation to Verint are and shared IT will the Following have business adjusted to expense of one to public company service expect

each Now basis, I'd starting engagement. on business like standalone for with to provide further a information customer

cloud the As helpful very discussed earlier, and revenue Dan customer analyze engagement perpetual separately. we stream think it's

expect we the we cloud to experienced momentum the next On this year accelerate year. side,

more leading will increase than approximately cloud XX% cloud growth a is revenue indicator growth to drive expected help this is New of SaaS next and year. XX% bookings, year, revenue which

to our compared coming also expect about revenue software this about new cloud year. half up from to software to XX% bps We're mix SaaS continue year. to XXX from two-thirds revenue, of with this shift bookings our of expecting reach We to bookings recurring

to our due cloud expect revenue we year. this million licenses, to of perpetual $XXX strategy, around Regarding first reduction

the year, XX% new in for perpetual completion further and we expect we new approach over healthy 'XX EBITDA, driven single SaaS before decline bookings, growth Next XX% equivalent We're a adjusted revenue expect the renewal for Overall, a transition. strong ongoing digit growth three of we the bookings, bookings, revenue approximately conversions. cloud as fiscal for and license of next rates, years, targeting we expect growth by SaaS and low CAGR synergies. new cloud

our level-off prefer customers expect to $XXX in certain time as we to cloud growth perpetual following continue of around fiscal In transition fiscal to revenue at our revenue We over improve the 'XX, completion perpetual 'XX. expect our will million licenses. license

expect margin discussed earlier, followed step down a we due ongoing separation the in 'XX one-time margins, Regarding by to fiscal synergies I to expansion.

the In model of of being software better margin Overall, billion revenue fiscal the recurring. expansion, addition we're over to longer-term. with $X us our XX% with provide will cloud in targeting revenue economics 'XX

will review let's Cognyte. of a business, Cyber be I'll historical to start named Intelligence Now our turn soon our with which performance.

transformation in software current services improving our and steadily three year-over-year X% years, have year, basis allocated gross on EBITDA part margins. year-to-date as and a XX% year-to-date allocated last where versus have our adjusted of EBITDA an we This adjusted continued estimated where the fully we Over our increase experienced into CAGR a increased increasing estimated trend our fully fully has last at allocated increase driven and profit non-GAAP estimated gross strategy, by XX% software year. mix been business our

the we revenue, after growth strong COVID. Regarding initial impact have seen from sequential

for expecting For growth estimated another margins full-year the XX% adjusted time. reach the gross this the and impact, and despite we're fully fully for year year COVID allocated of allocated EBITDA first to estimated

driven by year one-time growth profile we're and Operator, at providing to margins three more more Investor financial the down our improve separation the are strong will a summary, due Day synergies. year gradually to expect Cognyte January the providing to XX. the Investor at information detail to for expand that, greater separation Overall, step forward Virtual Virtual look to with let's our revenue open and you software a separation. our up forward questions. With finish to Over strong post expecting adoption regarding next lines a have strong We after years, Day. the Cognyte's look next to targeting of on In QX upcoming open

Operator

Shaul Oppenheimer Instructions] Company. & [Operator question comes first with Thank from Eyal you. Our

open. now is line Your

Shaul Eyal

a really I this talk and may can have as guidance. through momentum? again. strong follow-up. Dan, I on Thank Congrats see transition? And you. ask, about yet evolving what cloud the afternoon, the cloud driving over us do And momentum few how years If you ongoing to solid Good great you performance next the guys. is momentum this you move

Dan Bodner

sure. Okay,

we can integrate So, regions. broad as across cloud customers a they it on an and have strong and all turn and allows so thank cloud easily expand, we I'll it We've about partners and see open partners portfolio built allows you applications, platform, you. add this know, later. to easily new to see and our value, also momentum, we talk cloud Yes, our

perspective, on And due partially cloud this force great a that's force sales leading in and So area. From in the COVID. sales to SaaS, with see application area, we our our platform business side. is market adoption is now our

pleased the SaaS. over come We revenue growth next we're next based target to of to new booking cloud from next from year, cross year. coming million, pipeline, year, on expect to or that's of XX% And $XXX So, year XX% million $XXX new two-thirds mark this to have our give take, we, so SaaS. bookings from

CAGR targeting we're well, the XX% years. As next over three

I to is how next it's because that evolving, of explain mentioned prior SaaS complete transition we we calls, the to think year. again the on expect So today important to and your question SaaS transition

level look to expect you recurring. but that last we as further a this will was perpetual as our a expand be to buy we it finish software revenue, some growth expect we perpetual XXX decline fiscal transition, our XXX, year, some And so will XX% then of they so at license but year, perpetual have license, off at we around expect in we big in license, continue be and expect perpetual be $XXX customers 'XX. it it in when million, will year So decline but declined, we next the and about

over, at substantially growth. the fully contribute trend. model expand that revenue end the us transition, the fiscal our the get economics better 'XX. margin the the perspective cloud to of And actually the the perpetual and cloud of Margin top cloud the headwinds the and the line license. And And growth from and of are see that we'll for be that during over long-run basically perpetual will same, is revenue from So, tell of actually kind then we decline will what the that's the economics perpetual revenue. 'XX the the than same tailwind

good, So are the the We we we next finish are need we shared; with expect a to we of now. improving which outcome positive do which billion, about feel the move see our way we we to revenue metrics lot transition good momentum we 'XX, year, from on years. we growth, as rates growth are that. with single-digit And toward CAGR out fiscal obviously do for to of $X a is high targeting mid

Shaul Eyal

Got is it. the follow-up really so entire market being separation and concerning Cognyte, And on to the congrats kind bring it my of process. ready to

Over differ it many on months Maybe from how public. other on hand, you on maybe getting hand the can the past other course has ways? you, they in one the two to some gone discuss but questions similar of Palantir been We've investors. do, what

Dan Bodner

Sure.

first, information So, chapter Cognyte, huge historical margin start on company. excited a expansion. growth the We today growth and we of margin the of of as are Cognyte have next a public shared expansion, to lot their a

ahead. information let So later, We'll and even opportunity weeks more two then your to XX, weeks, on we share on in XX-F Cognyte. touch we're have briefly share But we're Palantir file on great more question. January document the me information. And going two

but understand. to strategies, We is similar different to which and historically a Palantir Palantir have are have capabilities, go-to-market comp. as have pleased Cognyte important public

of a is at approached analytics, go-to-market So strategy. that there technology the I And but of delivery open companies examples. first, in the the to the couple companies is different the and with the world of big think historically terms can and make in platforms look customers opportunity, share find vision best to opportunity help And needles safer. both haystacks, similarities,

part Verint, Cognyte you growth, a as while incurred So, strategy of a many profitable of all as Palantir, as years. for private company, had know losses

and per Palantir so So and higher a and this grow XXX into was has than over the our deeper customers expand customer, has these customers, example, thousand -- this their went one of strategy impact that, they but they customers, of to average land more is customers. Cognyte for have revenue time. about

Verint in difference attractive And government the Another that investment with example U.S. resources, in that we of U.S., the and pursuing. more historically, were developing global Cognyte we saw market is the significant Palantir consistent is stronger in in the have this is the and opportunities outside while we at stronger strategy time coverage. world. believe U.S. reason the rest the profitable the takes growth we

more detail So two discuss quick day. these the during in examples, we the investor and will are security landscape

Shaul Eyal

Got for so it. job. much Thank that. luck, Good good you

Dan Bodner

Thank you.

Operator

you. Thank

question Wedbush next Ives comes Our Securities. from with Daniel

now line Your open. is

Daniel Ives

Thanks.

your with customers terms getting customers So, it it's for I you to from base? sort cloud deployments? things and view more you seeing the talk cloud do sales more what Do mean adopting, that Dan, just footprint, of are we're in the build-out now maybe stage how the you're strategy? first hearing or across sort of mean terms changing how where force, we our conversations looking about, significant of where is they're in of just are I product that think

Dan Bodner

Yes, that's a question. good

going some changing think I dynamics. we're interesting through

changes. them automation COVID platform solutions driven brought on in And Some address our There's are lasting the impact some we again COVID are by see discussing we few there cloud cloud and automation. to think innovation which to with these is, we customers I great and of more in it. new efficiencies workforce do execute of customers, and to transition, would open already people have acceleration interesting AI, driven looking much the by the COVID years an is I dynamics. impact, back, an through create on obviously but also more And say, a economic actually started are

they complex and And the revenues it's from very infrastructure. mid-to-large know have needs and for of Now, important customers, you that come majority enterprises.

looking themselves, they are to they processes, overnight, when their COVID preserve through disrupt to from for cannot need are a move to They're just not they and not people And data. bridge. need home. they definitely going working preserve So

are cloud and that And interesting to that is, orderly QX, of the XX% for bookings, we excluding this fashion. that partner growth revenue conversion at when solutions. X% new about that cloud them the expecting help a a through from mentioned year by came the them the can for end in of from you looking cloud came only what's are transition, and look they help we more So that XX% of and move fee. legacy navigate XX%

you moving they cloud, as their are and But such they're their no They because buying not there's got really it buying it's year. while this to that reason tells the great new they're the saw they're disrupt. moving it's in some functionality; legacy datacenters, working, comfortable that So to there. cloud. And we accounts

one economy Some the the of the grocery with new well one companies, expanding. -- the in companies companies, leading one delivery, COVID, food doing cloud. the of Verint leading And chose they very service these the delivery cloud are and of leading of infrastructure

to cloud ready new legacy to in migrate customers them for in existing the their It's at to them scenarios. to time, help easy cloud. to is it for new are cloud. these Verint buy solutions looking buy customers we all to the they the over functionality are So different help easy And and all in

Daniel Ives

in the And as Great. sort months. maybe been the just in out thing terms to maybe green and and many address for many, has about just of light. running this as ground this stranded obviously as just well soon structure, you as hit But gets this, well strategically then mapped cost costs of place plans can

a structure from cost Just perspective. that, sort of talk maybe about to preparation and

Dan Bodner

over figured structure, terms next And each be million details company. think separation approximately the dissynergies the earlier. of provide few the discussed I $XX allocated, to of going more kind structure clearly, so we're we out also synergies. capital We cost we that's weeks the expect of do in how in and Yes, about

out one-time We a to can the into breaking step-down two there with certainly and of grow public certain of, companies, expect but out is a be which gate. we inefficiency there obviously company public

TSA do both already that the companies is and lot a -- of as are services will services company. time already the been two have so dollars there We into place to agreement the as decline well, going other. And But of back TSA, reverse time. companies to million a these we growing were TSA And A some will lot each expect that that resources transitional provide small. course, is we relatively services has one the a which So, over been identified between as to separation. for and of few forth. will which I of will go a

think we that are we So prepared.

the in file document January, to both be in with companies then, out Cognyte two publicly there teams management And to for expect We discuss weeks. we'll the of with investors.

lot the management the I think for Three board a to will directors team Verint Cognyte of continue the as team we're with ready, investors the meet new from have Certainly people. for we Cognyte. division management Cognyte of the going a have Board. new will

directors and to so directors, We company. the three seven new will looking Verint, targeting three Elad are there from be join for Board, join the we CEO, are continuing the new Sharon, will

will be kind that of January. in all So, folding

Daniel Ives

Thanks, that's great.

Operator

Thank you.

Ryan from Needham. comes question next with Our MacDonald

now is line open. Your

Ryan MacDonald

and terms at evening. into we disclosures for growth good of cloud of taking a Thanks congrats the outlook looking the as nice future Hi, and all sort as CAGR, year I XX% next into look on new? what's these my businesses. as quarter. guess And look net transition two And appreciate that accelerate questions, that we're how quarter, of does expectation year? how mix conversion in existing customers of your of expect versus started from next we program that sort this coming in that program, do you third

Dan Bodner

actually also launched The X% so conversion. from year year. that's so not the from XX% QX. We of COVID up so booking, beginning from in QX. in relative Yes, saw did just the booking, But XX% booking we're this before and we is a we what next XX% expect conversion be the QX, is in new XX%, pickup from this XX%. the XX% program to huge dialing already new to new to in new We imagine year X% that in growth

So, the The early I sensitive no in new disruption. to conversion hesitated we they is pipeline, based disruption. program the on customers introduced, more because convert August, think were to COVID in days of basically

created over, disruption. then [indiscernible], we the continue and concerning to cloud technology in about just -- obviously new them allow we on overnight appealing that's they product switch test was operational the the anyone work premises for and So very could that which

we program So between will booking next XX-XX new and conversion the and think that's pick year, up conversion. about

Ryan MacDonald

saw to And or sales the earlier and throughout you've very out selling we've this How would the past better this the lockdowns businesses and going your you're better shutdowns to a looked over obviously you usual? as helpful. are sort as thoughts cycles suited compared in again. what and prepared? EMEA get of we that's little as and usual is know, on I around kind seen Thanks. to as time environment as U.S., business Excellent, of curious month, continue that some bit say guess year, you just

Dan Bodner

I think so.

I look, travel entertainment, little are exposure industry to still the very industries suffering that from have we COVID. think,

our fact really, In exposure is really minimal.

these in next feel better, QX on We so that like got it see it's we cloudy. main pushed the travel that addressing, this home deals but on see cloud, that had premises better was pipeline next mostly to it's in do better just affected about they're we but workforce of some QX, deals and we year still back being So, and perpetual the will in in verticals some move actually year, the premises this getting also deal, some by getting we deals the to as are plan. in so come some at year of and perpetual

next on tools would us think say think a priorities, priority, I companies it's a COVID priority. usual, remotely, is good actually increase into engagement that, providing tailwind not is customer and year. as their to some I and I So the focusing are but workforce automation is manage the Having so business

Ryan MacDonald

Okay. the just one hop I'll queue. final me, And then, for back one in

see that see dynamic your great thoughts wins is management. competitive had of to own that some what market, during likely announced competitive with of environment announcement love are nice recent more that's force I I'm to the on imagine down guess workforce thoughts your you just quarter. there. the and I that engagement their a So you curious sales competitive Thanks. evolving but how

Dan Bodner

Yes.

powerful, and we very we and in with force -- also some sales So, very their sales is products partner we're marketplace. also force, with not we competitive have and which

automation Verint, and and partnered guys, due to as guys but are I the vendors strategy. our with mentors CRM partner open Verint, offer they're applications it's strengths and critical a business our Advanced like applications before, some the to clearly see workforce looking address applications do. customers and mentioned to we with with and capabilities, the with FM dynamics and many business So, to to many we looking [CCAS] from platform apart bring are interest and that we if the leading already competition diagnostic are the [ph] CCAS

because really So, multiple in you there for who's great we win. to where leading don't in RFPs, can ourself -- that's we And are find we example, of vendors these. and going could all be care

services. add value, the think is are landscape integrators Verint competitive in open that dynamic we we're more an about open vendors, have this partners the be with their obviously, integrators. system an actually another are we very integration resell more increasing Verint regional but vendor such platform have that's approach going partnering and choice year, good we resellers, are is So they seeking and for as and And also collaboration to can role ideal the not and advice only for the and important important because and customers is and CCAS we saw system

in at a one want, where the that deal last is landscape. the Social was choice But and Avaya point platform, for we Verizon So Social party a collaboration we'll chosen talk for and integrator the the the competitive Verizon is we system as that business applications. have -- this deal, Security. Investor third when you the Security about just Administration Day look we more for

that's dynamics. I think the So

in get with think and they agnostic strategy. different want a do we think many need, I they did it to they what customers growth for a strong opportunity And that ways. partner

Ryan MacDonald

Thank much. you very

Operator

Thank you.

Goldman comes next question Sachs. Essex from Brian Our with

line now is open. Your

Brian Essex

if congrats for Hi, maybe me reacceleration. a bit was wondering give could taking It's on good afternoon. in nice the us Thanks question, team. quarter. color little the you and from more the Cognyte I as well

spins-off? hiring Elad new personnel, that new are or working the that's I of company, that is it would that CEO, over just once how already established lot that going management think that is you underneath just business. Sharon but is for at umbrella moving place and team be a there take the And mentioned the to reorganization well

Dan Bodner

for is had company this, this positions Yes, One company. preparing to preparation time. transition as margin wanted know, in growth complete you for focus long on We software a we as and and XX% gross objectives. been we've so a model to two software the to and really get the

this in management hiring company effort just of and be thing an and example, promoting And company. And business the was one -- team. Nice, back to it product prepare President to we independent year within was Chief customer Officer, a the give model. -- a is engagement the management which in combination we hired to responsible the who I'll people. that some So hired second in bring the be people clearly team to to year and through change and did lot is strengthening he public strong the a for experience our he the really of from Product going not the the of Cognyte we space, but addition go-to-market, space,

I like strong a So team. feel it's

meet XX. a January You're it's virtual on Unfortunately, going be to day. them going to

but to a to you a and becoming So, the of want very new passion company. of definitely chance pure company the get to successful going their part you and see often get and -- obviously is growing team, visually, all the of do management grace introduce spirit we a

Brian Essex

and already more additional that there? you're is at established there happen but to happen? needs is mean, or Okay, organization all is in transition that place this whole that or ready to go, point, is to I that needs there sales the

Dan Bodner

are R&D, in mentioned there area thing So transitional from management they it's of terms place. business some advice, IR function be that they in financial but to legal already data build, year, company, will during advice, readiness, the place, that services, some of get place. will functions advice is an in The are it's I continued services only on really on before next sales, Verint, and public

Brian Essex

maybe Got around that, was with where like expectations with Any a it to the Apax it. update it the just above, on floor tranche to on second forward? they structure and regard any $XX to looks the and expectations going we think your I stand we're here. And, don't after capital spin, and particularly follow-up, collar regard

Dan Bodner

to capital tranche the from was believe them -- I'll another board memory in have And so Apax to designated allocation. that it Doug, of is a independent we will board part threshold maybe $XX, words turn have to that Verint agreeable X, of one please add say I we and agreed joining Yes, but over member. Doug? terms as member the that the member to board few jointly capital structure, a company, and they just on

Doug Robinson

Yes, conditions makes the had sure. be Apax provided expect just previously in so that Yes, to with threshold sometime it's Hi, And QX. folks. we the subject shared Brian. a we tranche funded second to closing

of sensitive side debt cash with of In outstanding applying terms CES general adequate being apply down, debt, the business. to for of better is too on but excess the the and them it leverage debt Cognyte the to the free, capital, corporate will use that perhaps to to purposes, working bring at you try structures, the cash, Day, outline capital if keep we'll be we or you Investor much spun not

would expect ratio one-ish debt-to-EBITDA was so, business. So we that on or

lying entities. in We'll to through that detail So, take that you of We're cash our part just as the spin when a around. we have legal some have we more doing move Investor little the structure or Days. all

Brian Essex

helpful. Thank you Got much. super very it,

Dan Bodner

Brian. Sure,

Operator

Thank you.

from comes Coster question next with Morgan. Paul J.P. Our

line open. is now Your

Paul Coster

taking for thanks question. my Yes,

So, beyond any for any meaning Is or like a has date instance, TSA separation other separation in the is relationships but period cross will as otherwise it that the two the through board? place licensing, any clear? are commonality the completely separation, arrangements it companies there go some there sounds in there for the last is

Doug Robinson

shouldn't to There terms other people Cognyte. two two be seven boards. from in than of relationship, TSA That's board's both we out other on expect crossover, any be of

So it. think the continuity. for is that that's I But that's important of end

Paul Coster

any be in to the constraints are business, Cognyte for won't of imposed future? There instance, Verint perspective selling from obligations due the that the on that

Doug Robinson

No.

Paul Coster

Okay, got it.

Doug Robinson

obligations any restrictions imposed business. the or Cognyte Verint on

Paul Coster

Okay, great.

bit little accelerating your very a Why Your that of experiencing Why It's is Dan? welcome. is everyone it cloud accelerating, a strength some business than you're of the else? cause that phasing What's is the after bit later did which peers? little here, this happen?

Dan Bodner

Yes, peers. actually I had the think we so

there now It's has they some collaboration used so UCAS its or And are XXX what depends about of companies on it the what unified to and you are have the very be collaboration infrastructure cloud. And as peers. platforms, vision communication the platform CCAS accelerated I or collaboration cloud. would platform So IT in refer that communication to space know that right. sort think transition of an the platform right or in from much And now. change to we

really business that to It's pretty Now, we're We It's worth that terms center, it's was enterprise, looks and is change to we it were and cloud. the department, we're this cloud, we just cloud, feel evolution, across change example, just sell then before the or know whether ready market natural ready. saw adoption. to companies on to enter. IT they contact and requires which was we entirely But the year, it not solution, like we adoption move the almost for lot But of was and slowing saw was sell the to market think our so I change fact more whether an marketing lower. to adoption we about much talked sell, how than all the that processes We lot good branch back ahead, of of office in history in it a this is, we was because cloud market better was COVID, some even adoption. Again, to slowing, collaboration. of application the the a called much close IT like applications reasons. for accelerated and there and the business, that we

feel we're last we from half one-third mix year to next two-thirds, year which to achieve So year. moving this to can we

I think that's hoping but get were get that we face the we it before, to now.

Paul Coster

were geography characteristics deals. question Cyber they the front, three these similar last my and of on or and diverse Do deals have the from perspective application? you and it had Intel Got

Dan Bodner

why see becomes don't I it usually one by larger. more represent Largely than No, anything customers That's unusual. functionality.

with including So trends a is bigger we And can million less $X into think more themselves. what the hardware the we was large need services hoping a I see less I which in of were not small, also, customers in the less QX. hardware, deals productizing. can the because the but Very hardware services did investment bundle declined, that things declined services But they is across several than we think see, they to deals, contract. we just do

We deals of the softer in mix probably was the a that So bit but XX% anomaly. margin towards as an well, changing mix. gross QX, the a had little big across is

the So we only this XX% last the before. expect but XX% year full-year, and for XX% was year

expect about big to and growth XX%. modest for is shift, from quick we gross margin the growth margin us. I well. obviously, talk in we'll next target expansion. to expansion independent see as years very continue subsequent more year, think improve beyond When And we rates an we now, company. acceleration But So behind And as some the hope margin we'll some

Paul Coster

Okay, Thank it. got you.

Operator

Thank you.

from Markets. comes Capital with question Dan Bergstrom RBC Our next

is open. now Your line

Dan Bergstrom

for taking questions. thanks Yes, my

seeing So, impacting what the status in you're or COVID delayed orders, outlook, could mentioned on those not or license comments? some of federal obviously expand quantify steals? those but impact, maybe Doug, you numbers you federal Now the

Doug Robinson

we've impacts I seen from year, mean, sure. so Yes, all COVID.

and customers getting into start business making more functioning next get to But provide hoping think the know to in commitments. felt licenses beginning more, work a think the I nature comfortable of of couldn't track little through bit our year, we've we kind learned better, because guidance the the with that. on we As better you we're everyone's year. of I perpetual as of We're gone year, remotely ongoing

have a was do or it. to that do. haven't think changed, largely, large plans they but the impact, lot a to They have know, I customers

people several get has cetera. to Dan that's the need straightforward, more accessible, certainly COVID infrastructure as mentioned the et times, think kind to more as an of I cloud in to woken up of

see right, quantify just smaller that's year the COVID in behind are next continual getting back business outlook because, for longer-term. So, to we do improvement overall deals of some reason they're environment And lot it, and providing people But for COVID it's and with guidance better. to a and as slide hard that. coping in the

Dan Bergstrom

thanks. Great,

Doug Robinson

Sure.

Operator

Thank you. Jeff question with And Imperial Capital. Kessler comes our next from

over muted, now is time. is line Roden questions if the unmute. now to back closing your Alan remarks. Jeff, open. line showing I'm this please for not further at any like I call would Your turn to

Alan Roden

Thank everyone you, Operator, us and today. thank for joining

our at six be great active evening. you a Have look next Investor January. forward weeks. two We to will our We quite Days, roadshow also seeing and on in

Operator

today's call. for conference gentlemen, and Thank this Ladies concludes you participating.

may You now disconnect.

Verint Systems (VRNT) 9 Dec 202020 Q3 Earnings call transcript