Verint Systems Inc. (NASDAQ: NASDAQ:VRNT), a global leader in customer engagement solutions, has reported a strong third quarter, exceeding expectations with its revenue and non-GAAP diluted earnings per share (EPS). The company's success this quarter can be largely attributed to the robust performance of its artificial intelligence (AI) platform, which has seen over half of its SaaS bookings featuring AI-powered bots. This surge in demand reflects a strategic shift towards bundled SaaS offerings, which are increasingly being adopted by large enterprises across various sectors, including entertainment, telecom, and healthcare.
Key Takeaways
- Verint Systems reported higher-than-expected Q3 revenue and non-GAAP diluted EPS.
- Over 50% of SaaS bookings included AI-powered bots, indicating strong demand for Verint's AI solutions.
- The company secured significant orders from new and existing customers, highlighting a growing confidence in their product offerings.
- Verint anticipates a 20% YoY increase in its 12-month SaaS pipeline and double-digit revenue growth in Q4.
- A Q4 revenue outlook of approximately $264 million was provided, indicating an 11% YoY growth.
- Full-year fiscal '24 revenue is expected to be around $910 million with a non-GAAP diluted EPS of $2.65 at the midpoint of guidance.
Company Outlook
Verint Systems is poised to conclude the fiscal year with a strong finish, as it forecasts double-digit revenue growth in the fourth quarter. The company has set a Q4 revenue target of around $264 million, which represents an 11% increase year-over-year. For the full-year fiscal '24, revenue expectations are set at $910 million, with non-GAAP diluted EPS projected at $2.65. These figures are buoyed by the company's innovation in AI and its bundled SaaS offerings, which are expected to continue driving growth.
Bearish Highlights
The company's focus on bundled SaaS offerings indicates a shift away from traditional unbundled renewals. While this strategy is currently bearing fruit, it also suggests that a portion of the customer base may still prefer non-disruptive, unbundled renewals, potentially impacting the rate at which total addressable market growth can be realized.
Bullish Highlights
Verint's bundled SaaS offerings, which are all hosted in the Verint Cloud, have been a significant growth driver, generating $140 million from SaaS licenses. With a majority of customers using multi-tenant cloud services and partners showing increased interest in reselling Verint bots, the company is well-positioned to capitalize on the growing demand for AI-driven customer engagement solutions.
Misses
The company did not highlight any specific misses in the earnings call, suggesting a period of strong performance and alignment with their strategic goals.
QA Highlights
CEO Dan Bodner emphasized the company's commitment to innovation in the AI space, noting that bundled SaaS will be the main growth driver going forward. He also highlighted the industry's readiness for automation and the company's ability to support 4 million agents with high renewal rates, despite the increasing adoption of bots to enhance customer experience and operational efficiency.
Verint Systems is gearing up for its Investor Day, where it will discuss its CX automation leadership and growth acceleration. The company's financial model and AI differentiation will be key topics, providing investors with insights into the company's strategy for the next three years.
In conclusion, Verint Systems' third-quarter performance reflects a company that is effectively leveraging AI to drive growth. With a strong financial position, an expanding SaaS pipeline, and a strategic focus on bundled SaaS offerings, Verint is well-equipped to navigate the evolving landscape of customer engagement solutions. Investors and stakeholders are likely to watch closely as the company continues to innovate and expand its market presence.
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