Verint Systems (VRNT) reported third-quarter fiscal 2022 non-GAAP earnings of 69 cents per share, which beat the Zacks Consensus Estimate by 30.2%. On a year-over-year basis, the bottom line deteriorated 5.5%.
Non-GAAP revenues increased 4% year over year to $226.9 million and beat the Zacks Consensus Estimate by 4.1%. GAAP revenues of $225 million also increased 4% year over year. The top line was driven by strength in the cloud business.
Following the earnings announcement, shares of Verint are down 2.9% in premarket trading on Dec 3. In the past year, the stock has declined 16.8% against the industry’s growth of 42.1%.
Quarter Details
Non-GAAP recurring revenues (70.9% of total non-GAAP revenues) increased 5.5% year over year to $160.9 million.
Non-GAAP non-recurring revenues (29.1%) improved 1.6% year over year to $66 million.
On a non-GAAP basis, the company’s cloud revenues were up 32.3% to $100.6 million. Non-GAAP software-as-a-service (SaaS) revenues increased 38% to $84.1 million.
The company’s new perpetual license equivalent (PLE) bookings soared 14.2% year over year to $75.4 million. The percentage of new perpetual license equivalent bookings from SaaS stood at 43.7% in the fiscal third quarter compared with 44.8% reported in the prior-year quarter.
New SaaS annual contract value (or ACV) increased 16.9% to $18.3 million.
Operating Details
Non-GAAP gross profit increased 6.7% year over year to $161.2 million. Non-GAAP gross margin expanded 50 basis points (bps) to 71%.
Total operating expenses increased 5.6% year over year to $128.1 million.
As a percentage of non-GAAP revenues, non-GAAP research and development expenses, as well as non-GAAP selling, general and administrative expenses stood at 12.7% and 31.3%, respectively, in the fiscal third quarter.
Adjusted EBITDA declined 3% year over year to $68 million. Adjusted EBIDTA margin contracted 220 bps to 30%.
Non-GAAP operating income fell 3% year over year to $61.5 million and operating margin contracted 210 bps to 27.1%.
Balance Sheet and Cash Flow
As of Oct 31, 2021, Verint had cash and cash equivalents of $307.9 million compared with $320.4 million as of Jul 31, 2021. The company’s long-term debt stood at $406.4 million as of Oct 31, 2021 compared with $405.9 million as of Jul 31, 2021.
The remaining performance obligations were up 31% on a year-over-year basis.
Guidance
For fiscal 2022 (ending on Jan 31, 2022), the company expects cloud revenues to increase 35-37% compared with the earlier projected growth of 35%. New PLE bookings growth is now expected to be 15-17% compared with the earlier guidance of 15% growth.
Non-GAAP revenue guidance has been revised to $875 million (+/-1%) from $872 million projected earlier. Non-GAAP earnings per share are expected to be $2.25.
For fiscal 2023 (ending on Jan 31, 2023), the company projects non-GAAP revenues of $935 million (+/-2%). Non-GAAP earnings per share are expected to be $2.49, calling for 11% year-over-year growth.
Zacks Rank & Stocks to Consider
Currently, Verint carries a Zacks Rank #3 (Hold).
Some better-ranked stocks worth considering in the broader technology space are Arrow Electronics (ARW - Free Report) , Alphabet (GOOGL - Free Report) and Monolithic Power Systems (MPWR - Free Report) .
While Alphabet and Arrow Electronics sport a Zacks Rank #1 (Strong Buy), Monolithic carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Arrow Electronics’ shares have gained 26.2% on a year-to-date basis. The long-term earnings growth rate for the company is currently projected at 27.4%.
Alphabet’s shares have surged 63.1% on a year-to-date basis. The long-term earnings growth rate for the company is currently projected at 25.8%.
Monolithic’s shares have rallied 51.4% on a year-to-date basis. The long-term earnings growth rate for the company is currently projected at 25%.
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Verint Systems (VRNT) reported third-quarter fiscal 2022 non-GAAP earnings of 69 cents per share, which beat the Zacks Consensus Estimate by 30.2%. On a year-over-year basis, the bottom line deteriorated 5.5%.
Non-GAAP revenues increased 4% year over year to $226.9 million and beat the Zacks Consensus Estimate by 4.1%. GAAP revenues of $225 million also increased 4% year over year. The top line was driven by strength in the cloud business.
Following the earnings announcement, shares of Verint are down 2.9% in premarket trading on Dec 3. In the past year, the stock has declined 16.8% against the industry’s growth of 42.1%.
Quarter Details
Non-GAAP recurring revenues (70.9% of total non-GAAP revenues) increased 5.5% year over year to $160.9 million.
Non-GAAP non-recurring revenues (29.1%) improved 1.6% year over year to $66 million.
On a non-GAAP basis, the company’s cloud revenues were up 32.3% to $100.6 million. Non-GAAP software-as-a-service (SaaS) revenues increased 38% to $84.1 million.
The company’s new perpetual license equivalent (PLE) bookings soared 14.2% year over year to $75.4 million. The percentage of new perpetual license equivalent bookings from SaaS stood at 43.7% in the fiscal third quarter compared with 44.8% reported in the prior-year quarter.
New SaaS annual contract value (or ACV) increased 16.9% to $18.3 million.
Operating Details
Non-GAAP gross profit increased 6.7% year over year to $161.2 million. Non-GAAP gross margin expanded 50 basis points (bps) to 71%.
Total operating expenses increased 5.6% year over year to $128.1 million.
As a percentage of non-GAAP revenues, non-GAAP research and development expenses, as well as non-GAAP selling, general and administrative expenses stood at 12.7% and 31.3%, respectively, in the fiscal third quarter.
Adjusted EBITDA declined 3% year over year to $68 million. Adjusted EBIDTA margin contracted 220 bps to 30%.
Non-GAAP operating income fell 3% year over year to $61.5 million and operating margin contracted 210 bps to 27.1%.
Balance Sheet and Cash Flow
As of Oct 31, 2021, Verint had cash and cash equivalents of $307.9 million compared with $320.4 million as of Jul 31, 2021. The company’s long-term debt stood at $406.4 million as of Oct 31, 2021 compared with $405.9 million as of Jul 31, 2021.
The remaining performance obligations were up 31% on a year-over-year basis.
Guidance
For fiscal 2022 (ending on Jan 31, 2022), the company expects cloud revenues to increase 35-37% compared with the earlier projected growth of 35%. New PLE bookings growth is now expected to be 15-17% compared with the earlier guidance of 15% growth.
Non-GAAP revenue guidance has been revised to $875 million (+/-1%) from $872 million projected earlier. Non-GAAP earnings per share are expected to be $2.25.
For fiscal 2023 (ending on Jan 31, 2023), the company projects non-GAAP revenues of $935 million (+/-2%). Non-GAAP earnings per share are expected to be $2.49, calling for 11% year-over-year growth.
Zacks Rank & Stocks to Consider
Currently, Verint carries a Zacks Rank #3 (Hold).
Some better-ranked stocks worth considering in the broader technology space are Arrow Electronics (ARW - Free Report) , Alphabet (GOOGL - Free Report) and Monolithic Power Systems (MPWR - Free Report) .
While Alphabet and Arrow Electronics sport a Zacks Rank #1 (Strong Buy), Monolithic carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Arrow Electronics’ shares have gained 26.2% on a year-to-date basis. The long-term earnings growth rate for the company is currently projected at 27.4%.
Alphabet’s shares have surged 63.1% on a year-to-date basis. The long-term earnings growth rate for the company is currently projected at 25.8%.
Monolithic’s shares have rallied 51.4% on a year-to-date basis. The long-term earnings growth rate for the company is currently projected at 25%.
Free Report – The Bitcoin Profit Phenomenon
Zacks Investment Research has released a Special Report to help you pursue massive profits from the world’s first and largest decentralized form of money.
No guarantees for the future, but in the past three presidential election years, Bitcoin’s returns were as follows: 2012 +272.4%, 2016 +161.1%, and 2020 +302.8%.
Zacks predicts another significant surge. Click below for Bitcoin: A Tumultuous Yet Resilient History.
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