VRNT - Earnings call transcript Q3 2022

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Good day and thank you for standing by, and welcome to the Verint Systems Inc. Q3 2022 Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speakers' presentation, there will be a question-and-answer session. Please be advised that today's conference is being recorded. now today. hand would to conference I host your Instructions] like the to over [Operator you begin. Frankel, Matthew may

Matthew Frankel

Thank you, with operator, and for CEO; joining and Doug Alan good afternoon, conference and Corporate today. and Roden, call Verint's I'm Development Verint's here Robinson, Dan Chief Verint's our Bodner, CFO; thank Officer. you

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

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

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

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

Dan Bodner

the report to revenue half had cloud year I'm pleased strong of expectations. significantly we overall experienced Thank diluted revenue and you, of coming in in quarter. We in per the ahead continued Matt. first new strong momentum share booking our earnings the growth PLE our and growth, third

for targets we're strategy this pleased our and QX our are annual cloud target growth. reflects the our results and our both Cloud outlook the three-year our XXXX. cloud earlier for year following at next spin new growth. our PLE three-year and that non-GAAP our ahead report of of First above guidance I'm to fiscal million of the and We're introducing we increasing for provided business our ahead, and revenue believe strong our raising booking range. $XXX momentum improved our differentiation in midpoint and the revenue execution year. raising guidance expect targets we security prior continue accelerating time we of to spin, plan are our the also platform annual Looking growth to for At We the guidance of also for tracking

start me we growth GAAP and strong behind believe our basis is non-GAAP booking year-over-year. what on cloud discuss momentum. on grew a basis and our results QX cloud XX% our Let a revenue and XX% with In QX,

strong and growth more revenue the to guidance We for expect year. continue cloud we our raising are QX in XX% than our for

strong on of We with new $X orders, also had TCV. new a large booking in existing across PLE basis and million excess cloud XX customers growth logos each

to New more year-over-year and we our the for are in PLE QX XX% than increased bookings raising outlook XX%. year

and cloud notable in multimillion numerous some included such and Disney, in the QX brands HP. Sachs orders, more of Our the Costco, Goldman world, as

than that during to Hawaii. report Regarding the more logos, Markets Bank and I'm new including Blackstone, Eventbrite, added new QX, NatWest we customers, XXX glad Digital, Western of

a cloud Regarding we strong for as our and expansions cloud had faster addition customers, many with innovation. to capabilities from and gap. our the we strategy easier it new Overall, customers. and innovate capacity platform many of customers benefit engagement the brands had help are platform to bookings new pleased close to in makes AI expand In momentum and introduce QX, we existing continue

capabilities, real-time on analysis recently network models. neural example, engine agent new deep For announced and including cloud a based sentiment we transcription new real-time assist AI-driven highly accurate

innovation assistance We automate that A cloud deliver enables that an also as pace. new at open introduced in functionality social intelligent architecture our an platform, can social be together cloud virtual platform deployed to accelerated to with us messaging multi-cloud messaging.

the infrastructure, At drives based workforce Because of platform customers open experience Vinci agnostic brands to able growing ROI. capacity seamlessly the is platform truly and platform the which our strategy CRM provides fit are gap. strong This is a the heart engagement, integrations very communication Our many AI, vendors. is deploy out-of-the-box priorities enables Da also with to and existing both attractive enterprise engagement customer cloud and engagement partners. first business our modular, on and Verint and of their close automation digital platform our a management of openness enterprise set It with data to to customers ecosystems.

throughout XXXX, above for fiscal year, target. the we prior introducing are our pleased this experienced forward, guidance and Looking momentum next we are with year

we expecting growth, also revenue. to of XX% XXXX, X% expect around our million cloud million reflecting revenue revenue of fiscal total from prior of total For X%. over XX% $XXX our cloud up We're revenue, now growth, $XXX target driving

our cloud in outlook and XX% to will impact from expecting fiscal XXXX operations discussed, next our for cash growth bookings flow, more the previously than Behind As improved shift we're positively significant year. growth cash year. is momentum this our

for As future which XXXX, beginning booking indicator since a our revenue have we growth, fiscal the times reminder, is PLE a multiple outlook of leading raised new growth. of

QX with point a out million, $XXX in with revenue cloud more to around than us solid year finish In to $XXX that next expect addition, non-GAAP providing achieve like I starting to the we point revenue would in cloud million year. of

many take cloud $XXX over which In for growth, with up XXXX another Turning We're cloud, now to to around I XXXX, from raising all of posted XX% revenue summary, XX% review Since of of fronts. lifetime. our from would I'm progress our our the only customer next and and a came economics three-year targeting more fiscal fiscal fiscal revenue, of million multiyear including visibility revenue significant high now very target quarters benefits revenue our had take growth. three cloud total better we also revenue, recurring year around results, year cloud us XX% like of to billion $X.XX journey. to to fiscal of targeting Shifting our expecting over target We're to are executing has minute our XX% mix XXXX. with Verint, XXXX. in we're our and In single-digit on again. spin, the plan, now the previous have revenue to strong the will we around XX% raising pleased ahead growth. improved targets

open customers partner-friendly in ROI strategy are and the is resonating customers. delivers and adding Our our many is AI-powered and cloud and platform market, differentiated new we significant to well

and thank I their employees like Finally, work to would dedication. for our hard

that continue customer-centric they to our employees on customer pure-play our a hear strong company. We our focus like engagement and as culture from

Now QX outlook. provide more our Doug results on over to details to the let me and turn Doug? call

Doug Robinson

Good Dan. Thanks, everyone. Yeah. afternoon,

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

rates. For also includes to adjustments exchange related metrics, certain foreign it

expectations, results targets. QX our ahead to be mentioned, Dan in and and long-term our annual we're guidance of raising came As pleased

year-over-year. For increased came QX, non-GAAP revenue $XXX cloud in million. Non-GAAP at XX% revenue

at in line. margins RPO, year-over-year. bottom operating bookings in $X.XX. PLE at obligations, at with XX%. in performance Non-GAAP increased came remaining the pleased XX% New both EPS Non-GAAP increased gross our diluted and came top Non-GAAP year-over-year. came in overachievement And XX% We're or margin XX%.

strong overachievement line come as solutions was for expected as well during in cloud top we to a QX. million in QX, in, order perpetual Our which coming $X to due our previously demand

was delayed higher by some positively line bottom to QX QX. impacted and Our being revenue expenses

of $XXX guidance year, our the $XXX X%, million and guidance For million expect up we plus now revenue, our of million. initial of $XXX prior from or minus

that range driven of initial the We XX% represent XX%, prior customers XX%. percent new is to expected our I'd cloud XX% guidance our expect to our cloud remaining to XX% solutions of existing growth and of cloud from growth in XX-plus mention and by to of guidance deployments. the the close revenue up converting revenue like

of new XX%. expect SaaS bookings come XX%, of up new guidance PLE prior to from range initial bookings of PLE in XX% We QX. a from mix to XX% our in and our perspective, the expect we guidance of XX% From growth in

based to We January of of ending for now next XXXX. revenue guidance the XX.X at diluted our fiscal diluted discuss guidance the year. midpoint year outstanding I'd expect like shares EPS million XX, non-GAAP for $X.XX our on

which in For above X% expect revenue, target revenue, minus is $XXX we strong PLE plus are or our our and growth, or driven million bookings. introducing X% by prior being guidance

we XX%. bookings of prior to PLE a For target range to new year, guiding are above also our next growth XX%

expect shifting next bookings we year, to new come full to pipeline Our is year. SaaS rapidly of from and PLE the XX% around for SaaS,

revenue year-over-year. to to we expect With expect $X.XX XX% EPS growth expansion, the our reflecting our revenue. continued of midpoint nearly revenue cloud and XX% exceed We margin $XXX total represent of million at guidance, diluted approximately

operations, generate GAAP from with I'd expect to your $XXX models. cash you also XX% normalized a We year-over-year million growth for additional more than some on detail provide to basis. like reflecting of

per million expense. $X.X of around other expect interest We and quarter

in $XXX,XXX net about have small income venture. a expect non-controlling a We joint we interest per from quarter of

compensation of share, today we XXXX, program, fiscal XXXX flat intend rate We expect equity to million an announced fiscal the for plan dilution fully XX% we our out we a repurchase our at Similar cash to for with summary, we're and and year. beginning the the laid tracking of are in next to expect year. buyback year, from we has year. tax approved pleased diluted and program XX.X offset our this In momentum that very our ahead Board shares with new three-year strong of

to X% fiscal expect to are from rate this targeting the in year We nearly year accelerate from of next after. perspective, and come a targeting revenue year we're XX% revenue our XXXX mix to cloud. growth X% two-thirds our From

approach holiday in employees season, time thank the during I'd like we As our the unprecedented to market.

results strong customers. and leadership due work, commitment hard thought our are serving your to Our to

operator, line questions. that, let's with So the for up open

Operator

from question [Operator you. And Instructions] MacDonald from comes Ryan our Needham. Thank first

Your line is now open.

Ryan MacDonald

I an on bookings or was quarter Thanks coming XXX XX% of new taking PLE congrats additions, for think over and and excellent most from and over Again, I impressed logo strong new quarter customer you by the in question mentioned new here. the customers. my

bit transformations? this demand is as more where little you're from, coming just on is great strength down sales – color come a surge digital love Just there. spend love in sort a the from more to they new – Would has to seeing in whether marketplace that execution? a it's understand of little customers Thanks. Or

Dan Bodner

you. Thank Yes.

the faster, for from the basis. growth platform. is partners. to So partners, platforms do our on cloud consumer It's to the discussed see before execution our cloud We and that on-prem platform it differentiated. in an I demand with comes active customers think than applications platform also with the easier increase We from innovate helpful cloud

actually Bank our So it's time, some perspective Blackstone. and and of this the the brands new XXX are and mention overall as Hawaii from product customers first of did strategy. positioning year. Western we momentum well really the I But on saw since We the a notable like them the call as beginning partner-agnostic think Digital of

in QX. QX, in XXX expect QX to it and We also had than customers more and in new continue we

So year. expect than new Verint actually the we by more end XXX to customers join the – customers of

the and a a been the So result has it's well now platform strategy. strongly very as of that established, that as of trend the we feel it's strength agnostic

Ryan MacDonald

there. visibility then from we color your fiscal a higher you this targets to over? the for the you're perspective seeing the on being Thanks. Thanks customers And confidence XXXX just think to outlook? I'm to Excellent. higher, looking what to as range give about What outlook the curious start perspective migrate a you road seeing in from talk as are you map that are about

Dan Bodner

Yeah.

So quite in Doug visibility revenues now has see improved recurring that's are a partially, we're around also, we of carrying, We mentioned actually of so pipeline. growth XX% RPO. it's our visibility. improved obviously, bit, revenue, the because soft But

demand pipeline shift. in Our obligation up also remaining big XX% performance strong We see a and the is year-over-year.

the booking we we of be for SaaS. next the of to XX% expect mix, terms QX from from in SaaS. come pipeline of expect, actually in XX% we booking to year, the expect And So

strength So SaaS. continuing mix suggests pipeline the overall shift also and towards

well. see year expecting to revenue, that's strong year good also bookings booking We PLE year, expect year. But our at XX% look we we than XX% than these that guidance so took to more of we're Obviously, growth, momentum $XXX raised point higher hope another a so When it to range XX%. we'll XX% as continue starting growth. into you now a from to this million, helpful QX our We are to XX% to cloud of next visibility. next all more for

to improved So us so $X.X that more bring more billion revenue even recurring visibility. and than in revenue, cloud will

revenue So really, our decline. we accelerating, we is is of strategy We on growth working. headwinds perpetual because like fronts, all the the our now less we have transition, over feel midpoint – so cloud from

the to targets gave continue and XX%. following growth on next X% for grow overall and growth we at cloud XX% revenue So year year revenue

good, So looks it looks good.

Ryan MacDonald

I’ll It from hop back sounds the as my in good end queue. Congrats well. again.

Operator

our And you. from thank Dan And next from Wedbush. comes Ives question

now line Your is open.

Dan Ives

Thanks. Yeah.

you've you the sort now can about you like sort terms transition? the we point the So almost that feels just midway XX%. than feels that sort more of are forward into the point cloud about, as half talk of that? you're talk past of what triggers Can of inflection should Like of second the as going the it of of you see to get now crossed like in like sort transition, kind it line

Dan Bodner

Yeah.

very important. is midpoint the So

first, get we midpoint to make clear, to year midpoint and expect So of the passed revenue during XX% the just and revenue bookings, in we cloud. it the in to to next pass

So what things. number are happens more with revenue – of as a we cloud get

continue visibility get we First, to recurring will more improve as revenue.

we right? growth booking, improvement are we'll we of revenue because see there. had We in double-digit a have Second, cloud in new customers growing lot

to more than the growth raised talking We between XX% to about are this year. We XX%. now XX% guidance booking

just have will acceleration We material. decline perpetual these less start because perpetual. to less bookings all into more So the revenue is acceleration, contribute

also margin So when look acceleration, you gross obviously, mix. margin revenue gross at acceleration, our but

margin mid-XXs a of because carries the lot is in services. professional non-recurring gross perpetual Our

for a recurring margin So mid-XXs margins non-recurring, is that's average the but gross mid-XXs. the

recurring will goes So and start about to more up following in gross years. year also go And more flow. up, modestly margin economics and next we the cash improved and better talked as

way up, down, a next you we're go and the of on get the headwind tailwind costing So which really to year. is uphill get what and way lot midpoint on you the starting start is

Dan Ives

Is a about we hitting what get Great. that of large more expect talk can sizes of in through we deals, just and the terms as midpoint, size you And of think trend? pipeline deal strategic? can kind Thanks. just and you're just then, about, we sort

Dan Bodner

Yes.

gives one of expand going are customers partners, years. to acquired rather effort have put consume consuming the guys platform, we more way. services in than on-prem think customers we acquired to whole very strategic from all more All deployment. which a have consistent can they more very our becoming easily, through I we platform because a and and the over cloud And these that we know we in technologies you that just companies the applications the ability while

relationship So faster much innovation benefit that makes from in cloud strategic. platform. can They the more the AI, in

a of services. access partners innovation Da Our to Vinci quickly have AI lot throughout

partners. put from these half platform from us direct footprint indirect partners. and our the with the mix customers we all we our at really to efforts about when So expect, positioning more we revenue of into is now, right have And I half and generate look

expect and We nicely grow to faster. bit partners grow a to both little

materially because or the of that's lot lot So add grow year growth a our And us, will leverage don't good slightly and continue be the a probably but have we of accelerate in will XX-XX to faster. two, have as that a not partners indirect with ratio different rates. sales we people to for

putting of cloud think platform ecosystem. that not was the is we is context is a open in a really single to the just business that, the all that it offer change ability So but into to model, that the journey, for connected us,

We have program. We now significant have a out-of-box ISV a pretty lot of integrations.

So their are the developing our a can so lot on applications companies in our we listing marketplace companies platform. of platform. these And open from benefit customers are

that ecosystem platform. can that engagement, HR, enterprise is customers cloud creating ecosystem data enterprise out-of-box from be type CRM, of and important easily to of systems and very that or ISV into or integrations of So creating with any consume partners integrated partners, enterprise an customer system a

Zoom infrastructure it's believe differentiated right that see time just We market. because innovation. And and lot agnostic, open lot and effort announced we reason very lately We WebEx communication for platform, changes a CCaaS it's we XxX a now. CCaaS announced of in in big has Microsoft a it's building that's UCaaS the Avaya So spend the of saw UCaaS. and an to trying and and Teams the of offering is and buy Fuze, CCaaS into of has contact consolidation and FiveX saw center. so extension We acquiring and same

infrastructure are, enterprise all across that can with a of customers business enterprise, create based So it and more this point best these because where is right? demand that for So is in parts a connecting drives from platform consolidation they of to what contact applications need in a buy we one customers our platform center this strong way ROI, ROI, infrastructure. enterprise ecosystem and Applications available for generate right? across the varies, need center the business other on But of the really infrastructure the the are starting all strong contact into their applications, and have application IT and ROI. We automation the business really that very bucket workflows of breed platform. lot in

So a in customers manner. those services consume can consistent very

Dan Ives

Thanks.

Operator

thank next Peter And Evercore. our comes Levine And question you. from from

is line Your open. now

Peter Levine

Thanks taking Great. my for question.

first Sorry got kind is to if in was decel. sequential but can cloud of that into pulled I missed QX? perhaps deal Or what in just I'd the understand quarter Maybe those talk QX? happened quarter. growth just dynamics? Were there you into the about it, a deals like a just pulled

Dan Bodner

Yeah.

numbers, update cloud today, at to to of XX%. We XX% a So between let's update growth year the And we're started again upping the we right? for then the look XX% expectation we the then and XX%. year XX% cloud growth And to XX%. with

So don't think we are I decelerating.

SaaS growth have plan offer can you times, year. managed that it's cloud, a we don't and expect this services. we many we we we managed low customers something we for that service cloud our I expectations as the to there you every In cloud is services, our when and margin much. discussed as see think, And growth raised have quarter, grow in

is QX, fine, grew SaaS services but in So XX%. grew which managed XX%,

QX. in and to continue growth strong we in acceleration see QX, we So expect very

fluctuations, $X.X much expectation, cloud guidance in raising look we pleased I'm XX% again, potentially be So cloud getting the next perpetual, $X.X with that think but we year. raising XX%. for our than to deals very through year. to bigger, think well in still solid were over The small and And that's are why is our see we the faster. revenue progressing QX, We number buy customers that shifting. line if quarter-to-quarter, are start were well year. more growth for to billion more shifting than looking that see We And as bottom growth the think next at you billion guidance there And pipeline could cloud I that's I a is QX. very QX very cloud achieving we as can also achieve the the

for right. are provide don't I they they're any I demand When solutions. to cloud and see in – customers So well we think positioned deceleration cloud,

are but and saying, ready cloud, we're to yes, growth. see we customers are to not now. ready, Some when good very they're go going But continue we

Peter Levine

move a that that IC, think, And point, then jump driven these customer to of it the by the being to that Or Is you go even digital to versus catalyst conversation line I right? decisions? how maybe is what's if a a Meaning, making more the business cloud? transformation starts, the to of within engagement? that's purchase much like of center upgrades contact

Dan Bodner

Yeah.

it's our think at than growth, you new than right? actually from digital transformation. XX% conversion. deals, predominantly look more is less So I XX% comes cloud When

you from deals, conversion. XX%, If XX% like and comes like XX% cloud XX% than this is year and growth so new at to that's XX% our more look

try they to call go the often. contact center before something and understand people center, the they online times many do be at before center the And even I contact idea because what It's XX%, conversion and they in that did. we was of expect base, they they call center? their we that will for to So our functionality. is gives if new still you disruptive. demand have digital think How the transformation didn't What very journey contact any contact called. growing when the Look,

And journey. designed online we measure provide contact be experience more experiences office contact that, number It is cannot and of designed gap. digital connected more capacity in we digital And platform. that's of engagement just it. to the And the interaction. add in increase digital connected to by is that just close expect specifically the the needs the center the are emphasized marketing, gap to disrupted because capacity the teams what mostly the to by and experience that them. center across platform customers to and So – contextual self-service points our and is and the of people the customer created back more address channels organization We because it touch

quarter, also they So they and need three and deploy Forrester to that discussed drives have also years to have when great revenue. can us our because that back more six report that gap customers us, automation demand – to we ROI our And experiences. they'll is need and these because when a XXX% ROI. pay increase applications infrastructure, just Forrester solutions, last customer And an platform that of the over automation. We but the that the close customers for really driving report are agnostic their growth application they type And report investment consumers them also changes help they buy the to was can reports otherwise, terrible report months. where they make

that So and creates just increasing it's for and experience, it's they opportunity elevating – can spend the only the the that elevate customer on revenues. experience not workforce reduce customer upsell not –

our demand really through. transformation was long digital the demand this cloud are is that the whole by but driven going for So a answer, customers growth

Peter Levine

you Thank color. the very for Great. much

Operator

our Thank question And Jefferies. Samad you. Samana next from comes from

is now line open. Your

Samad Samana

on assumptions that well. M&A and first, organic, just, I XXXX that of level Maybe all I Is the long-term questions. as quick some double assume for fiscal guidance, my XXXX? just taking for And have fiscal Thanks to Or want check. the does then evening. well? Good as a follow-up Hi.

Dan Bodner

Yeah.

We We earlier months assume Conversocial contribute XXXX. guidance next the few some M&A. inorganic don't the any of there's to had we or contribution about the M&A it's it And going did $X into a for going to that's because year. next in We did that in year, XXXX M&A about million right? year. future that future into we dollars But this don't the any that's So talked we million year, and be in it. assume year, seven

Samad Samana

I maybe that I that. to XQ could just to sure XQ. understand T&E? fell Great. into Thanks business? triangulate was those maybe make that for heard to how Doug, correctly. due the you, then and being that tougher? And that, expenses for what the Just better out that impact hiring to expenses due Was of one help And us were just wanted

Doug Robinson

Yeah. big There's trends, no Samad.

things just a it's that folks our in little kind you had on of if pulled some trigger around than timing So our will. some sooner model, for the we planned

in some of timing just investing So we're numbers, rather QX expenses business. in than getting QX still the the

then little levels So a QX expect OpEx bit ramp a off to bit QX we of down and come little QX. in

probably year, the growth probably X% we'll So for have OpEx about next full year.

Samad Samana

Verint's in quickies, using FiveX just you InContact Great. change the quarter? that whether attached Genesis, ask you're any or you And any of – just seat maybe is one, they're then the who you If think of to? this is mix being couple to one WFO that a to. which attaching Have or WFO in last your about when think seen evolution about end center contact

Dan Bodner

perspective, seen see augmentation. we So infrastructure lot of center a a yeah, we we've from – contact – the

the CCaaS to is we Avaya launched market. the offering So have that

We have and Cisco Twilio breed, applications players that's new the smaller Connect XxX partner best when want with Obviously, and these WebEx customers because CCaaS Amazon and Verint. and guys, like of offering. all Vonage. we they the need And

go year, expect revenue market. to market, is you So and to this growing it's started to we look they when up continue small. up The we very grow still at to FiveX a partner. with been next today they go continue FiveX, to is that But because have FiveX as year

they need Verint. SMB choose go that's then smaller as they the applications, decide we're So really vendors the communication the the customers market, infrastructure the vendor. more more where on or actually And many And market, sophisticated and times, that of applications. targeting customers they up the want

partnership as analytics more the close really needs. both they to more infrastructure ROI, the The benefits sure and actually AI, more needs first, engagement the infrastructure want the business they And it. because sure look leading and is the have one they IT the than sides, make to So in more then capacity that's that want make important more they to want transformation, are the digital gap, requirement, right? they supports

need can infrastructure their So they we same have if that, think don't they change gas buy that and decisions right on. at make your now we that these see infrastructure that they I ROI, because they But close also them and to helps that away, – necessarily understand that application bifurcate customers see we time. some the to drive want later applications customers more can and decision see to more question,

So all But clearly, above. need and the larger customer smaller application urgent organizations the applications the business feel SMB, more pain the they we are is, transformation, the is less first. And business the digital and their smaller of the leading really the contact gap. center, close that their the sophisticated with see for

Samad Samana

Thank Appreciate that. you. Great.

Operator

And Goldman thank our question And you. Sachs. from comes Brian from Essex next

Your now open. line is

Brian Essex

forecast has to I all. Great. Thank by you just I'd back the taking you, kind revised for – like the I Dan, cloud, if thank to and thank the perpetual of see, but you way. on would to your changed revenue for at outlook into there perpetual for And revenue, Maybe, – question. like

have color looking a that? longer the about changed? like a How be your $XXX how team you previously think to kind your much love just little your think do How range. a rate perpetual that, just you particularly more and this should certain thought that to of would in has into And think visibility about off matter tends through of pipeline sales? Or level that has we outlook I term? million perpetual? have it incremental hit Is bit

Dan Bodner

Sure. Yeah.

we exceptions. that important exception. through a customers very and to have larger that have perpetual force have our the to they we go But to an today, sell know for a not do deal we number and exception But about it's talked came first that we of $X that to me, sell we customers sales is that we them million number, to the typically now, earlier. Interesting, it's large only give They want SaaS. allow by don't So perpetual. process want sell They believe

SaaS. was shifting over than smaller, But But question SaaS, XXXX, big have it not with it large interesting were that, in not want in be on-prem. in like that I mind in that there's QX, are kind about entire is security and what's maybe that probably tens may this very perpetual our every big were consider the year, we complex and the do we to perpetual very revenue still And telecom that that a thought it it there's yeah, year. cloud they headwind, was see move the think for customer. customer time. surprised have was right it there's material. decided suggest very issues. customers that was even understand expected but $XXX million, industry that. to from needs. I think with big the that, large IT but And about And tens Verint development and priorities will QX, starting as about earlier, We now. be was These this customers, is at timing the dialogue good, thing look, of telecom we'll keep about least to needs. proposal very booking perpetual in have to only a will was I to now perpetual. probably and have decline if $XXX over that that decline requested compliance faster, growth SaaS. no what they view think a good they the million how more chance continue deal and is baseline have customer eventually. time, overall a we bit and – this and didn't look rates a even they're came entertaining it, of little large They good want And They to organizations to of to SaaS what a they to to that believe perpetual going now XXXX accelerate if deal, was still in will have not shift is all We I came growth I even do Will we customers, growing next that rates. revenue think decline which And entertaining get going will XX%, my actually, it that,

Brian Essex

the environment, sell from helpful. regards issues to Got maybe just point of there And to about facilities overall to types it. That's during were be needing of a follow with up, the think pandemic as super in we software. recall, I to macro customer view, certain

to or evaluate the might we to disruptive materially issues the that the of business digest variants kind know, I day, your travel or geography that's As news impact we I one don't we one flow new see every anything Anything that arise other? other? way from be able might you pop mean, do as up that see

Dan Bodner

travel don't we very remotely. organized not do not It's perspective, need we today, travel, got to do. it's issue a an we we do – from So common. but really need mostly to When

I and So going customers pandemic now that I that restrictions does travel with help stay more to fact things and make longer. this the cloud more have new that, realize acceleration. expect think It variants worse. don't to we is us But maybe the these to

the that's I doing be reasons analytics time we probably to in needs what cloud as remotely. of and to larger visibility demand it's understand from kind able all and is what helpful customers tools benefit and realizing, think management the be tools and And right scattered more to tools able with home people workforce even works move really at provide work. the terms to for of doesn't of everything the that see also and to one it's

just any hold that over. they drives demand. see be to pandemic need their yeah, for to But So breath I the really and more thinking don't customers that wait probably

going and There because to advantage want this would to work they're future. can where the locations, market to because are realize tools need more they different take hire. in hot buy a in optimization lot hiring hybrid a are of think of first, probably I customers more labor they and into people workforce anyway customers that is people this

transformation sits for everybody the are AI. biggest where drive in one office really the is days gone. digital the And So

can people automation. replaced some with be So

shift. trends, these overall to the that, take all So change maybe I acceleration, the think But the may fact the the longer, was pandemic trend. was but pandemic helpful some doesn't accelerating

Brian Essex

it. That's helpful. you. Got Thank super

Operator

next our And you. question RBC Capital from Bergstrom Dan comes from thank Markets. And

now Your is open. line

Dan Bergstrom

…questions.

towards obviously, you at nearer-term quarter previously, a the Brian's of early here, more customer customer like side for less Or that was the we're like the previous have considering in good customer around question. you could about expecting fourth all potential the talked business the cloud the in we you a It perpetual cloud. pretty look perpetual around strong just the this guidance do than maybe some at provided pronounced that But quarter? So typically preference sounds large seasonally a feel closed preference is SaaS. break quarter? in You with visibility point there

Dan Bodner

in XX% or do. in I QX. SaaS I I see more do.

So this we pipeline I in believe have terms best look at into SaaS. year, be next XX% the And definitely the that's we will quarter believe we of as shift. will

customers. multimillion quarter, pervasive And So see the that – trend. perpetual, deals. that not XX are we XX quarter, remain that in going to It's just also, it's analyze limited Last that about customers to one are just had in universe a and decision smaller dollar the further, but we we dollar think, longer of we when smaller also making, I the deals. multimillion again, take and announced,

and that's cloud just deals. So –

we continue to but buy next number large will So the that those will year of do perpetual, customers have some customers be small.

past, the very that in I industry about very, think is trend And I the the clear. So is spoke shifting.

not are some already, customers ready. Some

customer matter I a today, think they're It's that's that going. say, can when. of just every realized I where

Dan Bergstrom

Great. half could just typically, in Dan remarks second the start That's see Doug, really the this to a bit But in response help the the for benefit cash maybe here cash and the us to helpful. dynamics seems on touched transition, over of prepared think we then you flow years? next in several flow. question. like Doug, a through it the cloud And

as those about dynamics cash you? up to previous way in coming Is headwinds for and flow. think should deferred cash from that think to I right RPO be built that tailwind a the flow the

Doug Robinson

Exactly, last we out. on well. Yeah. Kind bit little quarter of a as Dan, we as touched this look

this quarter, So a good you had we can very see quarter.

expect strong a Next quarter, we quarter.

cash a next waterfall before the So of come And cash – as in from of probably a non-recurring accelerates. year revenue way into the just in items we'll XXX ops. cash The mentioned, accelerates there's on from around coming too. of bit a you a kind

big grow base, cash similar cash And still kind and nonrecurring low off with at probably, before windfall coming this of next to in XX% point, in strong will cash of growing but you items the we kind think maybe that and from of growth. digits about kind terms double ops year's probably kind should if So of earnings, then cash leveling earnings then year. very of that's of

Dan Bergstrom

very Doug. That's appreciated, Thanks.

Doug Robinson

Sure.

Operator

turn remarks. I And you. for thank call back And now like would the to closing Frankel to Matthew

Matthew Frankel

Great. everyone, Thanks, joining us you, thank for operator, today. and

to If to you have again good any a free questions, out, please we'll feel you night. talk and Bye-bye. reach soon. Have

Operator

This participating. concludes you conference for call. today's Thank

disconnect. You may now

Verint Systems (VRNT) 3 Dec 212022 Q3 Earnings call transcript