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%.
Verint Systems Inc. Price, Consensus and EPS Surprise
Verint Systems Inc. price-consensus-eps-surprise-chart
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Verint Systems Inc. Quote
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
,
Alphabet
GOOGL
and
Monolithic Power Systems
MPWR
.
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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