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Verint Announces Q3 FY2021 Results

Strong Sequential Growth in Q3; Expect Strong Q4 and Resuming Guidance

Customer Engagement Cloud Momentum Expected to Continue in Q4 and Next Year

Separation Plan on Track; Announcing New Name for Cyber Intelligence Business – Cognyte Software Ltd

Virtual Investor Days to be Held in January Ahead of Separation to Review Strategies and Long-Term Targets

MELVILLE, N.Y.–(BUSINESS WIRE)–Verint® Systems Inc. (NASDAQ: VRNT), a global Actionable Intelligence® leader, today announced results for the three and nine months ended October 31, 2020 (FY2021). Revenue for the three months ended October 31, 2020 was $328 million on a GAAP basis and $331 million on a non-GAAP basis. For the three months ended October 31, 2020, diluted EPS was $0.11 on a GAAP basis, and $1.02 on a non-GAAP basis. Revenue for the nine months ended October 31, 2020 was $925 million on a GAAP basis and $936 million on a non-GAAP basis. For the nine months ended October 31, 2020, diluted EPS was $0.11 on a GAAP basis, and $2.61 on a non-GAAP basis.

“We had a solid Q3 with strong sequential revenue growth and year-over-year adjusted EBITDA growth, driving a 16% increase in cash from operations year-to-date. We made significant progress with all our key initiatives, including the business separation, Customer Engagement cloud transition and Cyber Intelligence software model margin expansion. Our shift to the cloud is accelerating and our on-premises business continued to recover from the initial impact of COVID-19. We expect to finish the year strong and are resuming guidance,” said Dan Bodner, CEO.

Separation Progress Highlights

  • On track to complete the separation shortly after fiscal year-end
  • Expect to make public filing with the SEC within two weeks
  • Unveiling new name for our Cyber Intelligence business – Cognyte Software Ltd
  • Cognyte expected to be listed on NASDAQ with ticker CGNT
  • Virtual investor days and management roadshows to take place in January

Bodner continued: “Both of our businesses are market leaders that have significant growth opportunities. We look forward to discussing each company’s strategies and financial models for the post-separation period at our investor days in January.”

Customer Engagement Q3 Highlights

  • Large Cloud Orders Across Multiple Industries (TCV): Including orders for $11 million (insurance), $3 million (healthcare), $2 million (banking), $2 million (business services), $2 million (financial services), and $2 million (utilities)
  • Strong Cloud Momentum: On track for approximately 20% non-GAAP cloud revenue growth this year, excluding ForeSee

“In Q3, we experienced another strong quarter of cloud revenue growth and continued to win new cloud customers and displace competitors due to our product differentiation and partner agnostic strategy. COVID-19 is accelerating our cloud transition and for the full year we expect – for the first time – about half of our new software bookings (on a perpetual license equivalent basis) to come from SaaS, a significant increase from about one third in the prior year. We also expect recurring revenue to represent 80% of our software revenue, a 400bps increase from the prior year. Looking forward, next year we expect our cloud revenue growth to accelerate and to substantially complete our cloud transition.” said Bodner.

Cyber Intelligence Q3 Highlights

  • Large Orders: Including one for ~$15 million, one for ~$7.5 million, and four for ~$5 million each
  • Software Model Drives Margin Expansion and Strong Gross Profit Growth: Gross margins increased 900bps year-over-year and gross profit increased 21% year-over-year, each on a non-GAAP estimated fully allocated basis

Bodner continued, “In Q3, we continued to win many large deals due to our differentiated analytical security software. We are executing well on our software strategy and expect our gross margins to exceed 70% this year on a non-GAAP estimated fully allocated basis. Cognyte is well positioned to be an independent public company with a large and growing TAM, differentiated security analytics software portfolio, and strong track record.”

Announcing Cognyte and Verint Investor Days – January 11th and January 21st

Verint and Cognyte will each host their own respective virtual investor days in January. Members of each company’s leadership team will discuss a variety of topics including their business’ growth strategies and long-term outlooks. A question and answer session will follow the prepared remarks and members of the investment community are invited to submit questions ahead of or during the applicable investor day.

  • Cognyte Investor Day: Monday, January 11, 2021, beginning at 10am ET.
  • Verint Investor Day: Thursday, January 21, 2021, beginning at 10am ET.

Additionally, both the Verint and Cognyte management teams will be conducting virtual roadshows following their respective investor days.

Resuming FY2021 Guidance and Providing Initial FY2022 Outlook and Long-Term Targets on Today’s Conference Call

  • Our FY2021 non-GAAP revenue outlook is $1.280 billion with a range of +/- 1%
  • Our FY2021 non-GAAP diluted EPS outlook is $3.40 at the midpoint of our revenue guidance

“We are pleased with the building momentum in our businesses, our visibility has improved and we are providing guidance for the current year. In addition, we will provide an initial view on our outlook for FY2022 and long-term targets during today’s conference call. We will also provide more details at our virtual investor days in January,” said Doug Robinson, CFO of Verint.

Our non-GAAP outlook for the year ending January 31, 2021 excludes the following GAAP measures which we are able to quantify with reasonable certainty:

  • Amortization of intangible assets of approximately $50 million, including $48 million in Customer Engagement and $2 million in Cyber Intelligence.
  • Amortization of discount on convertible notes of approximately $13 million, all of which pertains to Customer Engagement.
  • Costs to separate Verint into two independent public companies of approximately $45 million, including $28 million attributable to Customer Engagement and $17 million attributable to Cyber Intelligence.

Our non-GAAP outlook for the year ending January 31, 2021 excludes the following GAAP measures for which we are able to provide a range of probable significance:

  • Revenue adjustments are expected to be between approximately $12 million and $15 million, including between $9 million and $11 million in Customer Engagement and between $3 million and $4 million in Cyber Intelligence.
  • Stock-based compensation is expected to be between approximately $68 million and $78 million, assuming market prices for our common stock approximately consistent with current levels, including between $46 million and $52 million in Customer Engagement and between $22 million and $26 million in Cyber Intelligence.

Our non-GAAP outlook does not include the potential impact of any in-process business acquisitions that may close after the date hereof, and, unless otherwise specified, reflects foreign currency exchange rates approximately consistent with current rates.

We are unable, without unreasonable efforts, to provide a reconciliation for other GAAP measures which are excluded from our non-GAAP outlook, including the impact of future business acquisitions or acquisition expenses, future restructuring expenses, and non-GAAP income tax adjustments due to the level of unpredictability and uncertainty associated with these items. For these same reasons, we are unable to assess the probable significance of these excluded items. While historical results may not be indicative of future results, actual amounts for the three and nine months ended October 31, 2020 and 2019 for the GAAP measures excluded from our non-GAAP outlook appear in Tables 2 and 3 to this press release.

Conference Call Information

We will conduct a conference call today at 4:30 p.m. ET to discuss our results for the three and nine months ended October 31, 2020, outlook, and long-term targets. An online, real-time webcast of the conference call and webcast slides will be available on our website at www.verint.com. The webcast slides will be available on our website until at least January 31, 2021. The conference call can also be accessed live via telephone at 1-844-309-0615 (United States and Canada) and 1-661-378-9462 (international) and the passcode is 5366968. Please dial in 5-10 minutes prior to the scheduled start time.

About Non-GAAP Financial Measures

This press release and the accompanying tables include non-GAAP financial measures. For a description of these non-GAAP financial measures, including the reasons management uses each measure, and reconciliations of non-GAAP financial measures presented for completed periods to the most directly comparable financial measures prepared in accordance with GAAP, please see the tables below as well as “Supplemental Information About Non-GAAP Financial Measures and Operating Metrics” at the end of this press release.

About Verint Systems Inc.

Verint® (Nasdaq: VRNT) is a global leader in Actionable Intelligence® solutions with a focus on customer engagement optimization and cyber intelligence. Today, over 10,000 organizations in more than 180 countries—including over 85 percent of the Fortune 100—count on intelligence from Verint solutions to make more informed, effective and timely decisions. Learn more about how we’re creating A Smarter World with Actionable Intelligence® at www.verint.com.

Cautions About Forward-Looking Statements

This press release contains forward-looking statements, including statements regarding expectations, predictions, views, opportunities, plans, strategies, beliefs, and statements of similar effect relating to Verint Systems Inc. These forward-looking statements are not guarantees of future performance and they are based on management’s expectations that involve a number of known and unknown risks, uncertainties, assumptions, and other important factors, any of which could cause our actual results or conditions to differ materially from those expressed in or implied by the forward-looking statements. Some of the factors that could cause our actual results or conditions to differ materially from current expectations include, among others: uncertainties regarding the impact of changes in macroeconomic and/or global conditions, including as a result of slowdowns, recessions, economic instability, political unrest, armed conflicts, natural disasters, or outbreaks of disease, such as the COVID-19 pandemic, as well as the resulting impact on information technology spending and government budgets in both developed countries and developing countries, on our business; risks that our customers delay, cancel, or refrain from placing orders, refrain from renewing subscriptions or service contracts, or are unable to honor contractual commitments or payment obligations due to liquidity issues or other challenges in their budgets and business, due to the COVID-19 pandemic or otherwise; risks that restrictions resulting from the COVID-19 pandemic or actions taken in response to the pandemic adversely impact our operations or our ability to fulfill orders, complete implementations, or recognize revenue; risks associated with our ability to keep pace with technological advances and challenges and evolving industry standards; to adapt to changing market potential from area to area within our markets; and to successfully develop, launch, and drive demand for new, innovative, high-quality products that meet or exceed customer needs, while simultaneously preserving our legacy businesses and migrating away from areas of commoditization; risks due to aggressive competition in all of our markets, including with respect to maintaining revenue, margins, and sufficient levels of investment in our business and operations; risks created by the continued consolidation of our competitors or the introduction of large competitors in our markets with greater resources than we have; risks associated with our ability to successfully compete for, consummate, and implement mergers and acquisitions, including risks associated with valuations, reputational considerations, capital constraints, costs and expenses, maintaining profitability levels, expansion into new areas, management distraction, post-acquisition integration activities, and potential asset impairments; risks relating to our ability to properly manage investments in our business and operations, execute on growth initiatives, and enhance our existing operations and infrastructure, including the proper prioritization and allocation of limited financial and other resources; risks associated with our ability to retain, recruit, and train qualified personnel in regions in which we operate, including in new markets and growth areas we may enter; risks that we may be unable to establish and maintain relationships with key resellers, partners, and systems integrators and risks associated with our reliance on third-party suppliers, partners, or original equipment manufacturers (“OEMs”) for certain components, products, or services, including companies that may compete with us or work with our competitors; risks associated with the mishandling or perceived mishandling of sensitive or confidential information, including information that may belong to our customers or other third parties, and with security vulnerabilities or lapses, including cyber-attacks, information technology system breaches, failures, or disruptions; risks that our products or services, or those of third-party suppliers, partners, or OEMs which we use in or with our offerings or otherwise rely on, including third-party hosting platforms, may contain defects, develop operational problems, or be vulnerable to cyber-attacks; risks associated with our significant international operations, including, among others, in Israel, Europe, and Asia, exposure to regions subject to political or economic instability, fluctuations in foreign exchange rates, and challenges associated with a significant portion of our cash being held overseas; risks associated with political and reputational factors related to our business or operations, including reputational risks associated with our security solutions and our ability to maintain security clearances where required, as well as risks associated with a significant amount of our business coming from domestic and foreign government customers; risks associated with complex and changing local and foreign regulatory environments in the jurisdictions in which we operate, including, among others, with respect to trade compliance, anti-corruption, information security, data privacy and protection, tax, labor, government contracts, relating to our own operations, the products and services we offer, and/or the use of our solutions by our customers; challenges associated with selling sophisticated solutions, including with respect to assisting customers in understanding and realizing the benefits of our solutions, and developing, offering, implementing, and maintaining a broad and sophisticated solution portfolio; challenges associated with pursuing larger sales opportunities, including with respect to longer sales cycles, transaction reductions, deferrals, or cancellations during the sales cycle; risk of customer concentration; challenges associated with our ability to accurately forecast when a sales opportunity will convert to an order, or to accurately forecast revenue and expenses; challenges associated with our Customer Engagement segment cloud transition and our Cyber Intelligence segment software model transition, and risk of increased volatility of our operating results from period to period; risks that our intellectual property rights may not be adequate to protect our business or assets or that others may make claims on our intellectual property, claim infringement on their intellectual property rights, or claim a violation of their license rights, including relative to free or open source components we may use; risks that we may experience liquidity or working capital issues and related risks that financing sources may be unavailable to us on reasonable terms or at all; risks associated with significant leverage resulting from our current debt position or our ability to incur additional debt, including with respect to liquidity considerations, covenant limitations and compliance, fluctuations in interest rates, dilution considerations (with respect to our convertible notes), and our ability to maintain our credit ratings; risks arising as a result of contingent or other obligations or liabilities assumed in our acquisition of our former parent company, Comverse Technology, Inc. (“CTI”), or associated with formerly being consolidated with, and part of a consolidated tax group with, CTI, or as a result of the successor to CTI’s business operations, Mavenir, Inc., being unwilling or unable to provide us with certain indemnities to which we are entitled; risks relating to the adequacy of our existing infrastructure, systems, processes, policies, procedures, internal controls, and personnel, and our ability to successfully implement and maintain enhancements to the foregoing, for our current and future operations and reporting needs, including related risks of financial statement omissions, misstatements, restatements, or filing delays; risks associated with changing accounting principles or standards, tax laws and regulations, tax rates, and the continuing availability of expected tax benefits; risks associated with market volatility in the prices of our common stock and convertible notes based on our performance, third-party publications or speculation, or other factors and risks associated with actions of activist stockholders; risks associated with the issuance of preferred stock to an affiliate of Apax Partners, including with respect to completion of the second tranche of the investment and Apax’s significant ownership position and potential that its interests will not be aligned with those of our common stockholders; and risks associated with the planned spin-off of our Cyber Intelligence Solutions business, including the possibility that the spin-off transaction may not be completed in the expected timeframe or at all, that it will not achieve the benefits anticipated, or that it may negatively impact our operations or stock price, including as a result of management distraction from our business. We assume no obligation to revise or update any forward-looking statement, except as otherwise required by law. For a detailed discussion of these risk factors, see our Annual Report on Form 10-K for the fiscal year ended January 31, 2020, our Quarterly Report on Form 10-Q for the quarter ended April 30, 2020, our Quarterly Report on Form 10-Q for the quarter ended July 31, 2020, our Quarterly Report on Form 10-Q for the quarter ended October 31, 2020, when filed, and other filings we make with the SEC.

VERINT, ACTIONABLE INTELLIGENCE, THE CUSTOMER ENGAGEMENT COMPANY, CUSTOMER ENGAGEMENT SOLUTIONS and CYBER INTELLIGENCE SOLUTIONS are trademarks of Verint Systems Inc. or its subsidiaries. Verint and other parties may also have trademark rights in other terms used herein.

 

Table 1

VERINT SYSTEMS INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Operations

(Unaudited)

 

 

Three Months Ended
October 31,

 

Nine Months Ended
October 31,

(in thousands, except per share data)

 

2020

 

 

2019

 

 

2020

 

 

2019

 

Revenue:

 

 

 

 

 

 

 

 

Product

 

$

105,865

 

 

 

$

116,331

 

 

 

$

279,225

 

 

 

$

330,538

 

 

Service and support

 

222,336

 

 

 

208,536

 

 

 

645,380

 

 

 

633,893

 

 

Total revenue

 

328,201

 

 

 

324,867

 

 

 

924,605

 

 

 

964,431

 

 

Cost of revenue:

 

 

 

 

 

 

 

 

Product

 

21,972

 

 

 

30,533

 

 

 

67,938

 

 

 

88,077

 

 

Service and support

 

76,961

 

 

 

76,771

 

 

 

222,383

 

 

 

237,562

 

 

Amortization of acquired technology

 

4,270

 

 

 

5,968

 

 

 

13,307

 

 

 

18,262

 

 

Total cost of revenue

 

103,203

 

 

 

113,272

 

 

 

303,628

 

 

 

343,901

 

 

Gross profit

 

224,998

 

 

 

211,595

 

 

 

620,977

 

 

 

620,530

 

 

Operating expenses:

 

 

 

 

 

 

 

 

Research and development, net

 

61,067

 

 

 

57,694

 

 

 

175,375

 

 

 

173,548

 

 

Selling, general and administrative

 

118,084

 

 

 

116,306

 

 

 

335,141

 

 

 

364,292

 

 

Amortization of other acquired intangible assets

 

8,106

 

 

 

7,778

 

 

 

24,229

 

 

 

23,130

 

 

Total operating expenses

 

187,257

 

 

 

181,778

 

 

 

534,745

 

 

 

560,970

 

 

Operating income

 

37,741

 

 

 

29,817

 

 

 

86,232

 

 

 

59,560

 

 

Other income (expense), net:

 

 

 

 

 

 

 

 

Interest income

 

536

 

 

 

1,404

 

 

 

2,392

 

 

 

4,517

 

 

Interest expense

 

(9,731

)

 

 

(10,102

)

 

 

(30,692

)

 

 

(30,143

)

 

Other (expense) income, net

 

(8,562

)

 

 

1,082

 

 

 

(23,003

)

 

 

1,201

 

 

Total other expense, net

 

(17,757

)

 

 

(7,616

)

 

 

(51,303

)

 

 

(24,425

)

 

Income before provision for income taxes

 

19,984

 

 

 

22,201

 

 

 

34,929

 

 

 

35,135

 

 

Provision for income taxes

 

8,157

 

 

 

9,218

 

 

 

16,490

 

 

 

6,120

 

 

Net income

 

11,827

 

 

 

12,983

 

 

 

18,439

 

 

 

29,015

 

 

Net income attributable to noncontrolling interests

 

1,652

 

 

 

1,302

 

 

 

5,784

 

 

 

5,200

 

 

Net income attributable to Verint Systems Inc.

 

10,175

 

 

 

11,681

 

 

 

12,655

 

 

 

23,815

 

 

Dividends on preferred stock

 

(2,658

)

 

 

 

 

 

(5,142

)

 

 

 

 

Net income attributable to Verint Systems Inc. common shares

 

$

7,517

 

 

 

$

11,681

 

 

 

$

7,513

 

 

 

$

23,815

 

 

 

 

 

 

 

 

 

 

 

Net income per common share attributable to Verint Systems Inc.:

 

 

 

 

 

 

 

 

Basic

 

$

0.11

 

 

 

$

0.17

 

 

 

$

0.12

 

 

 

$

0.36

 

 

Diluted

 

$

0.11

 

 

 

$

0.17

 

 

 

$

0.11

 

 

 

$

0.35

 

 

 

 

 

 

 

 

 

 

 

Weighted-average common shares outstanding:

 

 

 

 

 

 

 

 

Basic

 

65,571

 

 

 

66,799

 

 

 

64,973

 

 

 

66,181

 

 

Diluted

 

66,234

 

 

 

67,442

 

 

 

66,000

 

 

 

67,452

 

 

 

Table 2

VERINT SYSTEMS INC. AND SUBSIDIARIES

Reconciliation of GAAP to Non-GAAP Measures by Segment

(Unaudited)

 

 

Three Months Ended
October 31,

 

 

2020

 

2019

(in thousands)

 

Customer

Engagement

 

Cyber

Intelligence

 

Consolidated

 

Customer

Engagement

 

Cyber

Intelligence

 

Consolidated

REVENUE

 

 

 

 

 

 

 

 

 

 

 

 

Total GAAP revenue

 

$

215,222

 

 

 

$

112,979

 

 

 

$

328,201

 

 

 

$

217,936

 

 

 

$

106,931

 

 

 

$

324,867

 

 

Revenue adjustments

 

2,227

 

 

 

692

 

 

 

2,919

 

 

 

6,213

 

 

 

 

 

 

6,213

 

 

Total non-GAAP revenue

 

$

217,449

 

 

 

$

113,671

 

 

 

$

331,120

 

 

 

$

224,149

 

 

 

$

106,931

 

 

 

$

331,080

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

ESTIMATED GROSS PROFIT AND GROSS MARGIN

 

 

 

 

 

 

 

 

 

 

 

 

Segment products costs

 

$

9,224

 

 

 

$

11,322

 

 

 

$

20,546

 

 

 

$

8,422

 

 

 

$

20,093

 

 

 

$

28,515

 

 

Segment service expenses

 

54,595

 

 

 

17,122

 

 

 

71,717

 

 

 

56,507

 

 

 

16,526

 

 

 

73,033

 

 

Amortization of acquired technology

 

4,045

 

 

 

225

 

 

 

4,270

 

 

 

5,605

 

 

 

363

 

 

 

5,968

 

 

Stock-based compensation expenses (1)

 

1,795

 

 

 

525

 

 

 

2,320

 

 

 

1,363

 

 

 

403

 

 

 

1,766

 

 

Shared support expenses allocation (3)

 

2,844

 

 

 

1,506

 

 

 

4,350

 

 

 

2,601

 

 

 

1,389

 

 

 

3,990

 

 

Total GAAP estimated fully allocated cost of revenue

 

72,503

 

 

 

30,700

 

 

 

103,203

 

 

 

74,498

 

 

 

38,774

 

 

 

113,272

 

 

GAAP estimated fully allocated gross profit

 

142,719

 

 

 

82,279

 

 

 

224,998

 

 

 

143,438

 

 

 

68,157

 

 

 

211,595

 

 

GAAP estimated fully allocated gross margin

 

66.3

 

%

 

72.8

 

%

 

68.6

 

%

 

65.8

 

%

 

63.7

 

%

 

65.1

 

%

Revenue adjustments

 

2,227

 

 

 

692

 

 

 

2,919

 

 

 

6,213

 

 

 

 

 

 

6,213

 

 

Amortization of acquired technology

 

4,045

 

 

 

225

 

 

 

4,270

 

 

 

5,605

 

 

 

363

 

 

 

5,968

 

 

Stock-based compensation expenses (1)

 

1,795

 

 

 

525

 

 

 

2,320

 

 

 

1,363

 

 

 

403

 

 

 

1,766

 

 

Acquisition expenses, net (4)

 

60

 

 

 

32

 

 

 

92

 

 

 

30

 

 

 

16

 

 

 

46

 

 

Restructuring expenses (4)

 

132

 

 

 

69

 

 

 

201

 

 

 

428

 

 

 

229

 

 

 

657

 

 

Separation expenses (4)

 

51

 

 

 

27

 

 

 

78

 

 

 

 

 

 

 

 

 

 

 

Impairment charges (4)

 

95

 

 

 

50

 

 

 

145

 

 

 

 

 

 

 

 

 

 

 

Non-GAAP estimated fully allocated gross profit

 

$

151,124

 

 

 

$

83,899

 

 

 

$

235,023

 

 

 

$

157,077

 

 

 

$

69,168

 

 

 

$

226,245

 

 

Non-GAAP estimated fully allocated gross margin

 

69.5

 

%

 

73.8

 

%

 

71.0

 

%

 

70.1

 

%

 

64.7

 

%

 

68.3

 

%

 

 

 

 

 

 

 

 

 

 

 

 

 

ESTIMATED RESEARCH AND DEVELOPMENT, NET

 

 

 

 

 

 

 

 

 

 

 

 

Segment expenses

 

$

24,318

 

 

 

$

26,023

 

 

 

$

50,341

 

 

 

$

25,134

 

 

 

$

22,818

 

 

 

$

47,952

 

 

Stock-based compensation expenses (2)

 

1,897

 

 

 

1,003

 

 

 

2,900

 

 

 

1,948

 

 

 

1,040

 

 

 

2,988

 

 

Shared support expenses allocation (3)

 

5,119

 

 

 

2,707

 

 

 

7,826

 

 

 

4,404

 

 

 

2,350

 

 

 

6,754

 

 

GAAP estimated fully allocated research and development, net

 

31,334

 

 

 

29,733

 

 

 

61,067

 

 

 

31,486

 

 

 

26,208

 

 

 

57,694

 

 

As a percentage of GAAP revenue

 

14.6

 

%

 

26.3

 

%

 

18.6

 

%

 

14.4

 

%

 

24.5

 

%

 

17.8

 

%

Stock-based compensation expenses (2)

 

(1,897

)

 

 

(1,003

)

 

 

(2,900

)

 

 

(1,948

)

 

 

(1,040

)

 

 

(2,988

)

 

Acquisition expenses, net (4)

 

(18

)

 

 

(10

)

 

 

(28

)

 

 

(79

)

 

 

(42

)

 

 

(121

)

 

Restructuring expenses (4)

 

(172

)

 

 

(90

)

 

 

(262

)

 

 

(204

)

 

 

(109

)

 

 

(313

)

 

Separation expenses (4)

 

(61

)

 

 

(33

)

 

 

(94

)

 

 

 

 

 

 

 

 

 

 

Other adjustments (4)

 

38

 

 

 

20

 

 

 

58

 

 

 

 

 

 

 

 

 

 

 

Non-GAAP estimated fully allocated research and development, net

 

$

29,224

 

 

 

$

28,617

 

 

 

$

57,841

 

 

 

$

29,255

 

 

 

$

25,017

 

 

 

$

54,272

 

 

As a percentage of non-GAAP revenue

 

13.4

 

%

 

25.2

 

%

 

17.5

 

%

 

13.1

 

%

 

23.4

 

%

 

16.4

 

%

 

 

 

 

 

 

 

 

 

 

 

 

 

ESTIMATED SELLING, GENERAL AND ADMINISTRATIVE EXPENSES

 

 

 

 

 

 

 

 

 

 

 

 

Segment expenses

 

$

37,946

 

 

 

$

20,927

 

 

 

$

58,873

 

 

 

$

44,155

 

 

 

$

20,484

 

 

 

$

64,639

 

 

Stock-based compensation expenses (2)

 

9,671

 

 

 

5,116

 

 

 

14,787

 

 

 

9,001

 

 

 

4,804

 

 

 

13,805

 

 

Shared support expenses allocation (3)

 

29,053

 

 

 

15,371

 

 

 

44,424

 

 

 

24,686

 

 

 

13,176

 

 

 

37,862

 

 

GAAP estimated fully allocated selling, general and administrative expenses

 

76,670

 

 

 

41,414

 

 

 

118,084

 

 

 

77,842

 

 

 

38,464

 

 

 

116,306

 

 

As a percentage of GAAP revenue

 

35.6

 

%

 

36.7

 

%

 

36.0

 

%

 

35.7

 

%

 

36.0

 

%

 

35.8

 

%

Stock-based compensation expenses (2)

 

(9,671

)

 

 

(5,116

)

 

 

(14,787

)

 

 

(9,001

)

 

 

(4,804

)

 

 

(13,805

)

 

Acquisition expenses, net (4)

 

900

 

 

 

476

 

 

 

1,376

 

 

 

(1,326

)

 

 

(707

)

 

 

(2,033

)

 

Restructuring expenses (4)

 

(519

)

 

 

(274

)

 

 

(793

)

 

 

(718

)

 

 

(383

)

 

 

(1,101

)

 

Separation expenses (4)

 

(8,880

)

 

 

(4,698

)

 

 

(13,578

)

 

 

(964

)

 

 

(515

)

 

 

(1,479

)

 

Other adjustments (4)

 

7

 

 

 

4

 

 

 

11

 

 

 

(229

)

 

 

(122

)

 

 

(351

)

 

Non-GAAP estimated fully allocated selling, general and administrative expenses

 

$

58,507

 

 

 

$

31,806

 

 

 

$

90,313

 

 

 

$

65,604

 

 

 

$

31,933

 

 

 

$

97,537

 

 

As a percentage of non-GAAP revenue

 

26.9

 

%

 

28.0

 

%

 

27.3

 

%

 

29.3

 

%

 

29.9

 

%

 

29.5

 

%

 

 

 

 

 

 

 

 

 

 

 

 

 

OPERATING INCOME, OPERATING MARGIN, AND ADJUSTED EBITDA

 

 

 

 

 

 

 

 

 

 

 

 

GAAP estimated fully allocated operating income

 

$

26,882

 

 

 

$

10,859

 

 

 

$

37,741

 

 

 

$

26,459

 

 

 

$

3,358

 

 

 

$

29,817

 

 

GAAP estimated fully allocated operating margin

 

12.5

 

%

 

9.6

 

%

 

11.5

 

%

 

12.1

 

%

 

3.1

 

%

 

9.2

 

%

Revenue adjustments

 

2,227

 

 

 

692

 

 

 

2,919

 

 

 

6,213

 

 

 

 

 

 

6,213

 

 

Amortization of acquired technology

 

4,045

 

 

 

225

 

 

 

4,270

 

 

 

5,605

 

 

 

363

 

 

 

5,968

 

 

Amortization of other acquired intangible assets

 

7,833

 

 

 

273

 

 

 

8,106

 

 

 

7,651

 

 

 

127

 

 

 

7,778

 

 

Stock-based compensation expenses (2)

 

13,363

 

 

 

6,644

 

 

 

20,007

 

 

 

12,312

 

 

 

6,247

 

 

 

18,559

 

 

Acquisition expenses, net (4)

 

(822

)

 

 

(434

)

 

 

(1,256

)

 

 

1,435

 

 

 

765

 

 

 

2,200

 

 

Restructuring expenses (4)

 

823

 

 

 

433

 

 

 

1,256

 

 

 

1,350

 

 

 

721

 

 

 

2,071

 

 

Separation expenses (4)

 

8,992

 

 

 

4,758

 

 

 

13,750

 

 

 

964

 

 

 

515

 

 

 

1,479

 

 

Impairment charges (4)

 

95

 

 

 

50

 

 

 

145

 

 

 

 

 

 

 

 

 

 

 

Other adjustments (4)

 

(45

)

 

 

(24

)

 

 

(69

)

 

 

229

 

 

 

122

 

 

 

351

 

 

Non-GAAP estimated fully allocated operating income

 

63,393

 

 

 

23,476

 

 

 

86,869

 

 

 

62,218

 

 

 

12,218

 

 

 

74,436

 

 

Depreciation and amortization (5)

 

6,710

 

 

 

3,550

 

 

 

10,260

 

 

 

5,655

 

 

 

3,019

 

 

 

8,674

 

 

Estimated fully allocated adjusted EBITDA

 

$

70,103

 

 

 

$

27,026

 

 

 

$

97,129

 

 

 

$

67,873

 

 

 

$

15,237

 

 

 

$

83,110

 

 

Non-GAAP estimated fully allocated operating margin

 

29.2

 

%

 

20.7

 

%

 

26.2

 

%

 

27.8

 

%

 

11.4

 

%

 

22.5

 

%

Estimated fully allocated adjusted EBITDA margin

 

32.2

 

%

 

23.8

 

%

 

29.3

 

%

 

30.3

 

%

 

14.2

 

%

 

25.1

 

%

Contacts

Investor Relations
Alan Roden

Verint Systems Inc.

(631) 962-9304

alan.roden@verint.com

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