Verint Systems ((VRNT)) has held its Q4 earnings call. Read on for the main highlights of the call.
Verint Systems Inc. recently held its fourth-quarter earnings call, showcasing a predominantly positive sentiment despite some challenges. The company reported strong performance in several key areas, particularly in its Annual Recurring Revenue (ARR) and record Software as a Service (SaaS) Annual Contract Value (ACV) bookings growth. Verint’s AI solutions are making significant business impacts, and the company has raised its ARR outlook. However, there were some challenges in meeting revenue expectations due to unbundled SaaS revenue shortfalls caused by slipped deals. Overall, the positive aspects of the earnings call significantly outweigh the negatives.
ARR Growth Exceeds Expectations
Verint Systems Inc. reported a 5% growth in Annual Recurring Revenue (ARR) for the fourth quarter, surpassing the initial guidance of 4%. This impressive performance has led the company to revise its ARR outlook for the fourth quarter of 2026 from $760 million to $768 million, reflecting an 8% growth. This adjustment underscores Verint’s confidence in its continued growth trajectory.
Record SaaS ACV Bookings
The company achieved record SaaS ACV bookings for new deals, marking a 30% year-over-year growth. This achievement follows a trend of strong year-over-year bookings growth throughout the year, indicating robust demand for Verint’s AI solutions. The record bookings highlight the company’s successful strategy in expanding its SaaS offerings.
AI Momentum and Customer Success
Verint’s AI solutions are delivering substantial business outcomes for its clients. Notable examples include a healthcare insurer reducing average call time by 30 seconds, resulting in $70 million in agent capacity savings, and a telecom company achieving a 5% increase in agent productivity, equating to $45 million in agent capacity. These successes demonstrate the tangible benefits of Verint’s AI deployments.
Strong Cash Generation and Contribution
The company’s cash generation and contribution exceeded guidance, with fiscal 2025 cash generation coming in $8 million ahead and cash contribution $16 million ahead of expectations. This strong financial performance highlights Verint’s ability to generate cash and contribute positively to its financial health.
Unbundled SaaS Revenue Shortfall
Despite the positive developments, Verint faced a shortfall in unbundled SaaS revenue, with revenue coming in at $254 million versus a guidance of $277 million. This shortfall was attributed to a few new deals not materializing in the quarter, impacting the overall revenue.
Slipped Deals Affect Revenue
A couple of large unbundled deals from existing customers did not close as expected, impacting the revenue for the quarter. This challenge highlights the unpredictability in deal closures and its potential impact on financial results.
Forward-Looking Guidance
In the earnings call, Verint Systems Inc. provided significant guidance, emphasizing strong AI momentum and ARR growth trends. The company reported a 5% ARR growth, surpassing their guidance of 4%, with expectations for continued acceleration into fiscal 2026. They revised the ARR outlook from $760 million to $768 million, reflecting an 8% growth. Verint is targeting $960 million in revenue for fiscal 2026, with a gross margin around 73% and a non-GAAP diluted EPS of $2.93. The company expects continued ARR growth due to its differentiated AI solutions and hybrid cloud approach.
In summary, Verint Systems Inc.’s earnings call reflected a positive outlook with strong ARR and SaaS ACV bookings growth, driven by successful AI deployments and customer outcomes. While there were some revenue challenges due to slipped deals, the overall sentiment remains optimistic, with forward-looking guidance indicating continued growth and success in the coming fiscal year.