- Earnings call transcript Q3 2023

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Operator

Good day and thank you for standing by. Welcome to the Verint Third Quarter 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. [Operator Instructions] Please be advised that today's conference is being recorded. to Frankel. conference like speaker to now Matthew today would hand over the your I ahead. go Please

Matthew Frankel

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

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

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

from could please to these and these how on results risks Form those Jan detailed materially for XXXX. see XX-K fiscal our indicated actual Verint's statements, the year in XX, uncertainties For more forward-looking differ cause other ended discussion and

ended results today's measures. by financial Relations on comparing reconciliation measures from, companies. we SEC. non-GAAP earnings isolation should between quarter investors XXXX, as Please considered GAAP see discussed at but substitute the results limitations focus uses in our believes filings non-GAAP when to make The of other meaningful information, and we be company assessing useful financial our the for financial measures differ filed non-GAAP XX, of and Investor those The verint.com to or supplemental not included believe superior business include and a for comparative measures information among have with to section operating investors is Form financial information our other website XX-Q measures our peer presentation, Non-GAAP companies. in as slide the because those when used GAAP our periods in may and regarding financial informational the and it release for for a measures is provides from management October Our today purposes.

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

Dan Bodner

results Ongoing our AI-driven our with changes sequential you, I'm platform customer Thank solutions and recent looking driven sales strong recurring pleased the margin revenue on cloud metrics quarter and by workforce continued in update review platform cloud's differentiated market brands brands increased organizations report have Verint we momentum same to experience an and for and key to Today, budgets. QX engagement compelling to resources year, year-to-date more experienced trends. provide their expansion. deploy dynamics this Throughout to with growth will we to driving effectiveness. the it increase capacity Matt. gap. gross financial another across for with strong elevate looking especially make close workforce is sales

our next will for also We our discuss this year year. and for guidance introduce outlook

driving earnings decline gross growth. and SaaS strong expansion We revenue expect revenue continued growth, perpetual margin

revenue, results. QX line in with revenue guidance. our at in look closer QX, our prior delivered a take Starting Let's with we

EPS tracking ahead came ahead have margins throughout of guidance. gross non-GAAP our year diluted the in plan significantly our Our increased of and

We SaaS last Cloud the basis revenue metrics. new bookings QX QX of revenue are overall bookings strong currency also XX% growing with cloud increased pleased a year. especially basis. our ACV Cloud in in growth constant currency a and year-over-year portion versus constant sales with came over results our growing over SaaS with on with in XX% on XX%

large where as reminder, expansions new Driving This we customers Discover; adopting to in enterprises home cloud. which trend the year in received orders compare retailer provider new healthcare world As services we cloud increase, orders to XX a and some quarter have large goods last same logos. Cardinal as and a financial and delivered. is pleased Health. compared growth ACV excess In more SaaS the organizations orders QX, $X XX% we about large These ACV of QX our a cloud. million included single-digit TCV provider new had SaaS the continue to the growth, of are recognizable guided of and the such in to tough many our enterprise shifting growth customer to due cloud XX in IKEA; QX, strong reflects strong

customers logos, company continue QX food delivery and Kroger added the many more we Grubhub. company, including again and we than grocery new addition, win In to in XXX new

Let's take closer at and look seven digit eight wins large in a two QX.

sector. This scalability. believe Da also across was the automation and believe platform. leading from applications due the to utility to the Verint enterprise order new cloud million Da won million selected and platform, use second which AI organization, We a Vinci for in key leading company order reasons and and decided platform to $X AI ROI won adding a and we Verint of this from And first was Vinci platform. cloud customer the the U.S. large strong is million breadth this financial a move company. and We to the serves order several openness the cloud we differentiation opportunity. differentiation were large This customers moving across The large for the our cloud Verint's $XX services openness,

across cloud on calls, the discussed multiple differentiated prior As platform is Verint backstores.

Da insights and engagement Verint underpins drives the leading and our includes This running that all automation business First, with across data empowers our Vinci our approach platform enterprise. the the applications centric customers on AI platform. core data hub market

many their Second, generate our The anywhere for brands ROI. and approach start adopt quick engagement time. applications to And best third, brands it our to over telephony agnostic ecosystem. platform a is our platform data the CRM customers close of platform to help open additional breed easy platform makes and of and choice easy it where to applications makes brand solution and capacity it offers for solution, gaps into existing deploy lakes,

expectations year discuss and ‘XX. revenue to the SaaS like bookings have and trends of fiscal for remainder would our I SaaS we the seen Next, this

half, customers. growth we our our expect the in ACV Overall, over a perpetual the Our acceleration this year-over-year, revenue increased XX% the will a discuss we perpetual SaaS we accelerate has I over years, currency bookings, change bookings an growth In last half saw XX% Throughout see consistently and in and expect growth the basis. to license SaaS next. on revenue few a second in following QX, increased this opposite around which constant trend this year SaaS we strong behavior basis. we strong expect to on year, first growth new the saw QX. non-GAAP bookings, quarter, in in expect HX in over strong in QX SaaS XX% year, license With from currency has with respect SaaS $XXX we every constant revenue finish we approaching QX. growth million

QX. perpetual Our QX in and lower significantly in than revenue was QX

We expect this trend to QX. continue in

a which to Looking is to perpetual of expect faster the decline expected. second revenue at the $XX drop half current million, previously we than year,

the expect revenue. For $XXX we full-year, of now perpetual million

to from strong. recurring metrics away shifts to continue As the revenue SaaS, market perpetual our be

the basis. increase XX% on year, non-GAAP revenue recurring For around expect we constant a currency to

perpetual just discussed, close to we our For QX, from non-GAAP to XX% revenue sources. come expect of given software we the recurring trends

will As next. gross our is and recurring, gross we a margin as a greater margins. have improvement also we from Throughout of experienced portion expansion, I visibility improved year, in has this revenue sequential explain benefit

gross we expansion a revenue SaaS gross been Our points with for this non-recurring recurring annual growth our around expansion. the and XXX of in margins revenue recurring reaching higher much XX% non-GAAP time margin our revenue year expect Overall, first has than gross driving transition. margin generates

In the we our currency perpetual annual previously on revenue year. a revenue than decline to adjusting are X% QX, accordingly outlook constant grow, and basis. guidance faster continues expected we revenue to SaaS expect for to growth as Turning current to

Regarding EPS, EPS we XX% diluted for maintaining our are guidance year-over-year growth.

trends Next market year's by environment driven and we guidance is today. the seeing are

constant another we sales total this year expect currency basis, SaaS growth with strong Overall, now to $XXX to revenue constant drives from year. our currency for a million. basis, on potential approximately a while on up X% revenue declines XX% We growth this revenue X% expect momentum of

towards shift year another X% EPS we resulting expansion year-over-year of regarding expect recurring we And diluted margin our of expect EPS, growth gross revenue. continue in as $X.XX. We

targets our years. program. to revenue opportunity the call is handing Before long-term engagement for growth helping that that and with Doug, new many me over growth strong buyback gap will We SaaS close let capacity the brands a believe support conclude

margins to to SaaS, earnings enable we expand shift addition, us growth gross which believe term. our we In to continue will will long drive as double-digit strong

Doug spinoff joins me CFO, our a to the XX transition flawless next QX. complex to as of like long-term before over remind our is I CFO for previously last years you opportunity years. last prospects Doug, to thank pleased execution the This two over and that would and announced the are Verint our with to ago. confident program are earnings I new call great Doug for tremendous million the contribution We call stock two announce and turn in the over buyback of almost a in years And to $XXX the

over let me turn the Now Doug. to call

Doug Robinson

Thanks, everyone. Good afternoon, Dan.

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

discussing U.S. at on XX% currency million certain with includes be year-over-year our and line basis, to the growth basis. basis. million in a prior understand increased non-GAAP our Similar at exchange $XXX basis. revenue quarter, rates. also Revenue Recurring the on better significant this business basis, adjustments it came in year, on to non-GAAP foreign currency metrics, a on a constant to certain guidance, non-GAAP related performance. revenue the both basis last results For both reflecting constant XX% X% in on appreciation revenue on Year-to-date, $XXX reflecting currency today non-GAAP came I'll GAAP of X% dollar constant a recurring a basis. increased currency a GAAP Year-to-date non-GAAP year-over-year on constant growth given currency and non-GAAP

earlier, we we QX. came And discussed model, Dan more our seeing recurring revenue margins. XX.X% in strong an shift our to a at gross As improvement in as gross margin in non-GAAP are

enabled margins overachieve gross and bottom non-GAAP came strong significantly $X.XX. us in EPS at Our to the diluted on line

Turning in constant growing of currency to a faster on on strong a strongly increased a in year-over-year with basis. our year-to-date currency the a or growth GAAP We're revenue on constant constant increased on half XX% our SaaS metrics pleased a very slightly QX XX% cloud. year. basis QX QX KPIs. basis Both QX, on first a than XX% cloud the revenue currency grew faster and Non-GAAP year-over-year and with non-GAAP XX% basis GAAP performance. than in Cloud basis

cloud As services, we previously business optional a that low-margin growth. is includes not managed we're for targeting which discussed,

represents we see was to a customers and all In and ACV contracts bookings basis, of strong across SaaS existing as SaaS currency Verint the value up new booked strong XX% the new constant year-over-year industries well demand contract New ACV for geographies in as at platform. annualized new quarter. SaaS QX, as on continue Cloud

new Year-to-date, revenue XX% new than being on As a basis. PLE bookings X% currency on which resulted declined more expected, in bookings earlier, down Dan perpetual in PLE constant discussed currency increased a constant QX, basis. year-over-year

ending behaviors. today, we that the mention different Given the XX%, like demonstrate discussed I'd now the QX, while and perpetual at perpetual increased I'd year-to-date, our current In the SaaS growth XXXX. perpetual SaaS, two component year declined components guidance January XX% while useful the in component we discuss in for XX%. trends And it's to to SaaS declined XX%. PLE, look and component component, like XX, to QX which the experienced

both We recurring expect SaaS a SaaS on of and the in than driving XX% growth revenue another for quarter growth year, revenue growth basis. constant XX% QX, more currency

year-over-year expect $XXX adjusting total basis. around a are for million revenue by for the to to sequentially revenue on our in or outlook X% We year million and increase currency $X QX constant growth

including perpetual coupled current Our reflects today, discussed decline. the SaaS growth, outlook trends strong we with faster-than-expected

Our growth million. year-over-year. With $X we should respect perpetual interest Net is for a line, approximately $XXX EPS venture non-controlling expense we XX% below around expect joint small current are the to diluted interest and outlook the from around other our guidance be we have maintaining revenue In be income million. EPS, should in net for QX, $XXX,XXX.

fully rate be cash diluted we Our expect million tax shares and outstanding. should XX%, around about XX

with our discuss Before the for take me next how are outlook our moving three modeling year's review we cloud transition a areas let we're next to where Starting to SaaS and in year, minute mix. growth. cloud across

bookings year, revenue. XX% our to have expect cloud shifted revenue cloud the and next steadily we to our several represent revenue This software Over SaaS. years, of

bookings, we bookings expect SaaS. change SaaS. our We're of mix new with PLE XX% towards progress from come continued our to Regarding with pleased

to Next, SaaS like I'd discuss revenue.

As SaaS we our XX% look revenue growth. at expected

We conversions. million the At of expect to end to from support of business to our over come XX% new SaaS growth have we year, which come revenue and around expect expect remaining, to to $XXX XX% convert we from this time. of

around revenue for this to we mix year, XX% next growth. strong we're our year going believe ACV of continued expect to renewal recurring recurring bookings SaaS SaaS I by our well and new continues revenue and software increase Overall, come positioned driven to rates. Third, from sources of

Now to guidance let's next turn for year. our

including decisions. guidance as buying be may well Our we partner fiscal SaaS environment, bookings, macro customer strong as reflects ‘XX today, the declining discussed trends perpetual, and current the which impacting

expect For total basis, X%. or million year-over-year growth revenue, currency plus on of X% $XXX a resulting we reported revenue, constant minus in

perpetual to coming revenue on around grow XX% in constant revenue million. currency recurring a with expect to $XXX We year-over-year close basis

expand EPS We margins and deliver expect fully margins and X% gross operating diluted continue to to growth.

assumptions. Now some below-the-line let's discuss

We interest expect quarter of and other $XXX,XXX net. around per expense

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

the are QX positioned The to quarter diluted to cash program. count million assumes the the with each will guidance pace due results slightly And approximately of year-to-date rate and buyback. the actual on a In depend down for pleased the and expect We of year. the new XX the our for shares, finish share our tax and fully for summary, from we're XX% buyback well strong year. year

next We and growth. favorable are this from earnings we expect drive the another growth expansion double-digit SaaS year, strong strong SaaS double-digit a momentum operating continued revenue that expect which driving experienced sustainable of term, total to margin we year to supports growth, earnings continue in Longer into growth. year we market

which team shares CFO have our us call $XXX approximately finally, could my earnings at allow new we adviser a share look X% acting be our as And program, Verint, as time. let's in that, of share in the as more Our in outlook. million to this up for period to outstanding that open couldn't current is questions. our forward to of grant buyback in the company to confident an of confidence and And the I'd prices operator, last for I stay like repurchase line reflects with

Operator

line Cowen. first from from Instructions] the will question Our [Operator of Shaul Eyal come

open. line Your is

Shaul Eyal

gentlemen. Thank you. afternoon, Good

cloud you tackle coming the Is you guidance cities, a headwinds? seeing front, from tale reconcile a now? front, away economy right on a measures yet is So X if moderating the weighed speak? quarter consensus. the so taking it is a transition of Maybe below is to on do can healthy the macro is which you've year's next necessary it you it us that next think maybe just to taken see as macro revenue Or And year's in? for

Dan Bodner

the Thanks Yes. for question.

see the next and So guide let environment into of course, me start that by we how we today, year. macro

up currency on $X leading new also basis. So up revenue, is over QX so strength, a strong new just XX%, XX% but metric. the [XX] which SaaS on XXX-plus constant not large ACV booking logos, a clearly, very, all million. (ph) revenue metrics. deals SaaS XX%, SaaS booking very

So in and goal right cloud, complete think on and position. how when guidance QX driving clearly, we're in we now, we their the bookings the to we And When strategy, SaaS at we platform the our SaaS to gave, help look doing just is QX HX, also well at QX. we in grow that customers cloud we XX%. expect our customers our execute is look to

strength. It's be telephony about or spoke platform the enterprise-wide automation. CRM. platform, CX to differentiation. continue about about So it's It's not I an

to love environment, reduce with because workforce what this differentiated. So to to cost this time quick workforce, looking And partners efficiency. need it's the They and need. it's they it very elevate automation of is customer the in CX they're value. when exactly And

that's for what see of So now. backdrop kind the we

Now as the change license perpetual you mentioned are both revenue booking from HX. in on and sharply clear down, the down revenue perpetual, and very QX, where

$XXX you numbers, look a QX, million, million about HX run was going this $XXX $XX run and be of rate the we $XXX of million rate about of And rate. -- QX, it's the run same. the if million at in so QX, now in are perpetual in to at it's So

So some speak customers what's But customers, budgets of interesting, and believe we to a come macro. as back, SaaS. lose job been the to come will back related deals. we them Verint they didn't as and short a for potentially CapEx for when these they long And very have time, I

a take cloud, to considering that move the next to these more seriously before indicated, are customers to are they So transition now will it and while that year. them SaaS

of for SaaS a mix. measure favorable is today SaaS, think to lot the we progress I our the and macro So metrics of overall, give

we growth do year, ratio X:X we services bridging usually basis, nicely see professional on that's So into are But with side, so $XXX a perpetual, constant million recurring on to grow the $XXX revenue balance. expect XX% so now revenue will the currency next million. to recurring and assuming perpetual,

the So but next in ACV since guidance guidance way we assumption the obviously year. just right? we another to of New than is it, booking. And about expansion. addition done that's the expand margin main the continue XX%, we In now to when big expect SaaS, the you about XX% is the QX think the XX%, is the HX, perpetual a booking change. have that's So That's year, -- think spin see this, of do motivate to FX what from balance to impact on and and move X% drive has QX HX. into SaaS a are top terms SaaS impact, assumption next I that customers we've also margin think about finish behind continue assuming balance obviously, to economy, lower we're gross to line, to margin which there. nice the we very in guidance continue to this we our gross

as the which management, line expense than guided before, top and So year, a $X.XX, creating good And is continue that's much plan faster growing our Doug the next and also gross able earnings for recurring X% uplift we with coupled we to year, for is mix as on are margin. growth. mentioned that, we're non-recurring, between grow to this

XX% in revenue very also strong manage So growth transition Accelerate is the a growth, think have cloud next we and SaaS bottom two summary, line. the SaaS and year objectives:

you hedge, have and to we accelerate natural course, revenue. have faster cost gross earnings know, an and manage we the Of we as than FX, structure margin

Shaul Eyal

this And reply. Got you for thank it. elaborated

if getting from coming thinking specifically elongated about understanding for I'm industry that pleased, broad-based? identify correct sales but again, me we is maybe know, if or some us As rather correct is much that that cycles, me wrong, and vertical we those now, of nothing it's But wrong. canceled, I'm How you can pushed. is I'm for it it? one about pretty think macro-driven? should And be a Is driven? you

Dan Bodner

Yes.

difference need see actually they take new spending. technology. customers see are and say, don't discussed APAC we -- want is Americas, Well, first, customers, -- of to I'll because the look other visible more geographies. time that in they But there's Year-to-date, some in sales customer. EMEA very to careful are CapEx at longer with we every I as clearly, and ROI a accelerate what elongated you start as in So the looking because cycle obviously I other would I -- And the cycle. like very OpEx so mentioned is they discussed that across we and similar. sales There if see be here they before, verticals terms

no in by geography. I -- can say So change

across be companies, business. to these very verticals, In strong OSB to and large part with Financial a Health diversified the terms cloud. digits verticals, wins services we companies strong. our are had BXC of of are care we These continues moving continue to be seven eight and

it's think well, customer-by-customer I earnings in lot grew and we XXXX. we did really we're our obviously, we I grew And recession So a back When decision. XXXX, look in more a diversified. bit, it at was where little -- a

automation, also very and enterprise was it companies in clear increase type workforce to while very and are also, engage in of have we and the that BXC need to and need with they times We CX. times, costs elevating especially good customers technology their bad customers sticky when solutions. increasing, this larger But

obviously dynamic. actually we I did, customers more say, our would and The pause that's see like even their see the in that guidance guidance. think always We for think now, reflected I and next technology that So we we year some what have we we accelerate take is way customers purchase. about that's have, see

with our or it's trying increasing a and better margins change, environment cost management. with the for earnings to the to this So ability protect is gross whether worse, we but we're not pretty our to think a us good project

Shaul Eyal

to much. Understood. luck so you Doug. Thank And of Best

Operator

And question the MacDonald our Ryan from line next will Thank Needham. of you. from come [Operator Instructions]

open. Your line is

Ryan MacDonald

that of questions talk you for year? that? the tough warrant I assumptions see talked luck from the next I that about starting such to components and you Or my you the and year's in SaaS you comp? about think within sort say the Hi, thanks maybe one just to to growth clarify, of start, career And outlook, the Can you that Dan, if for Doug did expecting best wanted great XX% you're next SaaS congrats bookings on future. a clarify some to there. some what SaaS slowing well? side year? this maybe growth can business would rates a in you're some of Is a so, are seeing as slowdown just I of business it of of the have clarification the

Dan Bodner

Yes.

So next all metrics revenue, the let's with growth revenue, XX% at revenue. look SaaS stat expecting for we're year. SaaS Starting in

As about between revenue you conversion. know, new we in have XX-XX booking and

conversion, to but booking. in new different of So there grow, terms we expect the SaaS dynamics continue are to

SaaS that's is growth we And conversion. the year. again, from logos That's new assumption. XX% XX% same this expansion XX% and of and So one mix revenue, have

XX%. XX% In of -- new -- ACV terms we assumption. booking in SaaS had projecting we I current In current growth. HX, the year, the we I'm sorry, year last HX, now We year mean the -- are

increase So it's our guidance, this HX. assumed a will this HX to big that the in as continue now, to next But to same we think from year. right year. HX I'd love

only expect guidance XX% new trying we guidance, Saas our ACV XX% strong that a suggesting we guidance. think And which don't I It's assumption but year. suggesting that trying look strategy from of we're QX, assumptions. we QX, that in are into perspective our the in drive achieve what deceleration. December provide have we at and we're this baking acceleration to we that did So now it's clearly to to see in is

Ryan MacDonald

helpful That's color.

Dan Bodner

Yes.

to building numbers. XX% our the unbundled and SaaS, is the ACV SaaS can to assume model, you if Just new that SaaS finish, XX% is you're of you just bundled so also give about

this to $XXX $XXX year? are next this point, for will the our XX%, going at year can bookings next And mix year XX% new. number for a right and for guidance to million have in about you year we're assume and that suggests guidance of grow So ACV this million that

Ryan MacDonald

to expansion. Doug, I'm the next about Dan. transition And gross that I about as maybe, you you as structurally to margin great curious, fall here color. off, that beyond? the was on Thanks. what perpetual helpful year that, super expansion, think think can for That's ‘XX gross to gross and you for when year we're you accelerates. But as get get to talked appreciate going continues think margin see do you, know to margins I XX% about

Doug Robinson

Ryan. expansion. to a expand. kind to revenues higher puzzle, margins have Yes. as gross see We'll becomes So continue of the Speakers] weighted [Multiple bigger of thing, going gross gross margin Thanks, are margin average and It's a the a piece recurring right? a that

up so So that and XX% have we’ll point acceleration we'll continuing for year And this years. see and QX or will next probably we or be might QX, give from out will then that us bps year. to XX see so beyond in the

Dan Bodner

XX% have margin on on gross we gross recurring margin dashboard, the under non-recurring. over and in numbers The XX% Yes.

margin. obviously, to we the as shift of have average to towards in we continue recurring mix the XX% currently the decline, non-recurring year, grow XX% plus So that's that next gross and continue the recurring

Ryan MacDonald

hop Thanks in for Excellent. my taking queue. the back questions. I'll

Dan Bodner

Yes, sure.

Operator

Levine from next our of line And from Peter Evercore the is Instructions] ISI. [Operator question

line open. is Your

Peter Levine

And is my stands kick your we've the others stay taking for the of of playbook Doug, endeavor. with take in next first what's business, year? prioritize Like right plans one luck Thanks best quantify it for if can is for efficiencies. resize focus to their play? next you Like to have hiring today, And your pocket back cards then in what you worse question. Verint? the get seen kind the things investments, your the macro do of kind Maybe theme recession on steps what

Dan Bodner

Yes.

the recurring. towards a expansion a is gross structure, cost shift the margin function of terms in So mix of

next into to year. going that's continue So

we We Verint -- cooled because course, manage have do, low what continue geographies shift hedge And a headwind our so but with environment constant And fact is OpEx, there industry is don't little of from expect line, but expect a And the a report we QX we off mix the labor will on of to QX, that's the It's where top cost and have structure. headwind deal down have why create that of and before to in the if our fact that's company. and used that's the it to it's currencies not Part to that you in maintained a $XXX that working talent, FX regardless has what's the a bottom a to hire look QX, headwind. we've towards line. FX, the a hiring. selective natural bit is at currency, we of the also cost does lever global QX. we the million, have we we

you growth XXXX, manage levers, top at used with we the did companies, look the ended these as much and margins. we this in If because year and other line actually last great bottom drop and huge didn't recession, earnings had our up we line as all we

expenses we our cost fixed So the we year our how I a that know to think far, and next so we think use variable pipeline that cost. the we for same At manage to time, supports and have guidance. see ability good

And know and can get worse we'll obviously, So how to needed, we if prepare. things respond.

Peter Levine

are if But sell. because assuming your easier cloud With environment an XX% think new look about base, I side, tap net about you're tough, you you but I better your retention into revenue And gets are assuming able logos, going right, if you -- asked what or the to the the installed rates -- to base, be share can think that it's installed -- talk about to the XX-XX you split. on net quantify like? I what

back year installed net to you retention and know, can A, Thank sales? focus to you. just sales on positioning So then just rates how kind curious of quantify reps more those are base next you maybe

Dan Bodner

absolutely. Yes,

new XX% to from just clarify, base. logo logo. a is So It's new not new the and the only expansion first,

historically, opposed every is as quarter, business new, to any So anything base. than new conversions. generating XX% more And from we're every our year

and enterprise customers now and need sticky value platform, is And large they So cloud continue solutions have to to time the with faster. buy continue technology. more actually expand that they and expand. And to the very we

customer So the think our be for base environment. to to going expand it's we actually easier on-prem relative to

are we rates GRR, XXX%. pure company. historically discussed in cloud and We the talked more our are XXs to So our when is pure retention net what that about be that we of NRR, reporting metrics over get gross cloud rates retention kind

time but So force some the to numbers, have they the in to But question come vast how dashboard. we over we they the you new force we from new like in XXX some our we about of start sales majority mentioned SaaS customers, already will we metrics as come NRR. and got and small. ACV, the like these specific organized, base. the get report logos the revenue that when your we we And sales ready new get great logos, in names today, expect NRR of to

platform. New they'll logos platform the our and time, will with expand buy then into over

very little basic the Most reliance So from on logos. new spending. we our come have of business new

Peter Levine

very you much for Great. my Thank taking questions.

Operator

question next will from Our Instructions] [Operator line come of Samana the Samad from Jefferies.

line Your is open.

Samad Samana

committed already Great. therefore, to Thank the it. Maybe my into just understand many taking those next visibility you expectation, convert question. signed or for to And Thanks customers up first, of have have mix year? how you. conversion

So actually maybe contract how that not, if much many already us go is but -- don't versus you I to help convinced and are or said contract like have be know would the And they do just in of how convert? to going understand have -- XX%, that. the to

Dan Bodner

Yes.

new these Verint we many new already cloud a into contractual they applications not new, don't get cloud. legacy these the of the didn't convert the some they're all solutions have while vehicles have Verint, relationship. actually to So customers to in customers bought And with

So decision to that to time just the they're in first position cloud. a not test need they necessarily a Verint make

They they with It's capabilities offer cloud, the rush. that want they that decided in we the like on-prem. see be start to But Some new solutions disrupted. don't journey Verint varying cloud. working. the the They no in

maybe our next So ongoing we said but the maybe on year, with their have next -- we most many discussion the these with now, year, line started, do This And the is after. not customers, a discussion for the ago. appetite have customers this year conversion. bottom discussions of not year

it's from make So considerations. obviously, their decisions, look what's to it's best the organization, need the affecting Customers ROI, the internal their to IT an move. security time perspective a their ROI go journey. because own And at through they

year conversion next we've have from on we have for contraction are that consistent So convert, a we what that contemplating. are is I'm but And our not only which customers sense assumption they and next clear will into of budgeting date with commitments the ones suggesting year. good which this ones year done

it's that dynamics are we not So in our trying on to rely new some base.

or million cloud. $XX is maintenance more see few million years, the that revenue than there's last $XX that little converting bit a of every into the could for You about year,

consistent for So it's pretty year. next

Samad Samana

we count just that's but And guys -- how share share in the the to prioritization terms just just for on maybe guidance Yes, capital then next should you gave very the management more buyback, think about of get Great. helpful clarity. for M&A Should there you've it balanced one about level kind buyback? higher versus the priority? in we any you Is think tuck-in what's of where about or the would being that we the other? of think been prioritize like past? the Just year, over

Dan Bodner

Yes.

obviously buyback. spinoff, are spin-off. long-term there the second obviously in this tax-free some we're the to to we're but for as remember, And the several able the decision And the outlook tax-free the in confidence you limitation buyback. within size that's buyback. our drivers is, is enhance the following our still we the So reflected restrictions have of of structure, by the taxi the program limited One on

in than of be overall the we somewhat more more we that than that expect capital this of XX% XX%, terms period. to free In generate structure, flow cash our program

we M&A it make way of a attractive, But obviously good we we for free cash using buyback the see, think and we'll So think rest this can more could adjustments become other lot balance about for generating our We're a now. of and is over cash. usage, time. the it's flow

and expect of half grow cloud cash the in the our flow and year cash next year is second than we accelerating. transition flow are We because to after faster the EBITDA,

it's back healthy XX% So put two that to of more cash than flow the -- next to we prudent we're years, think very and expecting to investors.

Samad Samana

Great. Appreciate taking my questions.

Operator

showing Thank queue. further any questions you. And in the I'm not

closing So over to the call remarks. the like for back turn I'd speakers to any

Matthew Frankel

Great. for today. Thank joining our you call

to If Have speaking forward soon. reach have good to questions, out, free a look you feel any we everybody. and to night, you

Operator

you today's concludes participating. Thank call. for conference this And

now may have Everyone, disconnect. a great You day.

Verint Systems (VRNT) 8 Dec 222023 Q3 Earnings call transcript