Verint Systems Inc. (VRNT) Q4 2025 Earnings Call Transcript
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Overview
Verint demonstrated strong financial performance with AI-driven revenue growth, exceeding guidance in several areas. Despite some unbundled SaaS deals not materializing, the company maintains optimistic guidance and a new $200 million buyback program. The partnership with RingCentral and positive Q&A insights about customer confidence in AI deployments further bolster sentiment. Given the market cap of $2 billion, the positive developments and strategic initiatives should result in a positive stock price movement of 2% to 8% over the next two weeks.
Key Financial Performance
ARR $712 million, up 5% year-over-year, ahead of guidance of 4% due to strong AI momentum and customer expansion in AI deployments.
ARR Outlook Raised from $760 million to $768 million, reflecting 8% growth, driven by continued AI adoption and customer success stories.
SaaS ACV Bookings $32 million, up 30% year-over-year, a record quarter driven by strong AI outcomes and customer success stories.
Bundled SaaS Revenue Growth 23% growth in Q4, up from 9% in Q1, with a full year growth of 17% year-over-year, indicating strong AI consumption.
Cash Contribution $228 million, up 2% year-over-year, exceeding guidance by $16 million.
Free Cash Flow Increased by 4% year-over-year, driven by strong cash contribution.
Revenue $254 million, below guidance of $277 million, primarily due to unbundled SaaS new deals not materializing as expected.
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Operating Highlights
AI Business Outcomes: Verint's AI solutions are delivering strong and differentiated business outcomes, with customers reporting significant improvements such as a 30-second reduction in average call time, equating to $70 million in agent capacity for a healthcare insurer.
Hybrid Cloud Deployment: Verint's hybrid cloud model allows customers to deploy AI solutions quickly and without disruption, enabling them to start small and scale effectively.
Market Positioning: Verint is positioned as a leader in the CX market, with over 90 Fortune 500 companies using its AI-powered bots, indicating strong market adoption and referenceability.
Record Bookings: In Q4, Verint achieved record SaaS ACV bookings with a 30% year-over-year growth, driven by strong customer demand for AI solutions.
ARR Growth: Verint's ARR grew by 5% in Q4, exceeding guidance, and is projected to reach $768 million in Q4 2026, reflecting an 8% growth.
Cash Generation: Fiscal 2025 cash generation exceeded guidance by $8 million, with a cash contribution of $228 million, up 2% year-over-year.
Strategic Focus on AI: Verint is focusing on AI adoption and customer seeding strategies, expecting to benefit from increased usage and expansion of AI deployments in fiscal 2026.
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Risk or Challenges
Competitive Pressures: Verint faces competitive pressures as many CX vendors are promoting AI technology without delivering tangible business outcomes. Customers are fatigued by the AI noise and are seeking vendors that can provide proven results.
Regulatory Issues: No specific regulatory issues were mentioned during the call.
Supply Chain Challenges: No supply chain challenges were discussed in the transcript.
Economic Factors: The economic environment was not explicitly addressed, but the overall market conditions may influence customer spending and adoption of AI solutions.
Customer Retention and Expansion: There is a risk associated with customer retention and expansion, as some unbundled SaaS deals did not materialize in Q4, which could impact future revenue.
Revenue Guidance Variability: The company anticipates variability in revenue guidance due to the unpredictable nature of unbundled SaaS bookings, which may affect financial forecasting.
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Guidance & Outlook
ARR Growth: In Q4, Verint's ARR growth reached 5%, exceeding the guidance of 4%. For Q4 2026, the ARR outlook is raised from $760 million to $768 million, reflecting 8% growth.
AI Momentum: Verint expects continued AI momentum, with customers expanding AI deployments and transitioning from initial experiments to large-scale adoption.
Customer AI Seeding: Verint has seeded many customers with initial AI deployments, which are expected to increase usage and expand with additional bots over time.
Record Bookings: Q4 saw record SaaS ACV bookings with a 30% year-over-year increase, driven by strong AI outcomes reported by customers.
Hybrid Cloud Approach: Verint's hybrid cloud model allows customers to automate CX workflows without disruption, which is resonating well in the market.
ARR Guidance: For Q4 2026, Verint is raising its ARR guidance to $768 million, representing 8% growth year-over-year.
Revenue Guidance: For fiscal 2026, revenue guidance is set at $960 million with a range of plus or minus 3%.
Cash Generation Guidance: Verint targets $960 million for cash generation with a range of plus or minus 1%.
Non-GAAP EPS Guidance: Non-GAAP diluted EPS is targeted at $2.93 at the midpoint of revenue guidance.
Q1 2026 Outlook: For Q1 2026, ARR growth is expected to accelerate to 6%, with revenue projected between $190 million to $200 million.
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Shareholder Return Plan
Stock Buyback Program: Verint initiated a new $200 million stock buyback program in September 2025.
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Key Q&A
Q:Can you just speak to the customer confidence in buying solutions now and whether they really are taking this land, small approach? Or are some customers also going for larger deals in the current environment?
A:We do have now a very strong quarter in bundled SaaS revenue growing 23%. Customers are evolving from AI experiments to actual AI deployments at scale, with significant ROI.
Q:Are you assuming that any of the $20 million in kind of pushed unbundled revenue that didn't come in, in the fourth quarter closes?
A:We are talking about a couple of deals from existing customers that have an ongoing rollout of Verint software into larger operations. The timeline for these deals has changed, but we expect them to continue.
Q:In terms of making up for that $8 million to $10 million in lost ARR plus still beating on a net basis with 5% growth, was it a series of smaller bundled deals? Or was there a few large bundled deals that kind of came in the quarter there that outperformed relative to your expectations?
A:We do see larger deals now for Pure AI. Our top customers are growing much faster than the overall universe, with significant growth in ARR.
Q:Can you maybe just share with us your confidence that these customers that pushed their unbundled deals into fiscal 2026, like what percentage of those are actually -- do you feel confident are going to close?
A:I don't think that there are macro issues. Customers are looking to spend their budgets where they get tangible results.
Q:Can you talk about the channel mix a little bit as a percentage of revenue and more importantly, where you expect it to go?
A:Most of our channels are not experts in AI and rely on the Verint sales force. We expect some partners to become more capable in delivering the message to customers.
Q:Are you seeing any concerns from your customers that on macro?
A:Customers are more hesitant to do infrastructure projects, but our message is resonating better than before.
Q:These handful of slipped deals, are they US or internationally driven?
A:They were predominantly large US companies, financial services companies.
Q:Do you think you're gaining market share driven by the bot strategy over the course of the past few quarters?
A:We are creating a very nice market share with leadership position in the CX Automation market.
Q:Review of Unclear Management Responses
A:Management did not provide a clear percentage of confidence regarding the closure of pushed unbundled deals into fiscal 2026, nor did they specify the dynamics behind the delays beyond general statements about customer behavior.
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Earnings Word Cloud
The most frequently occurring keywords in this quarter's earning call
AI deployment
AI journey
AI seeding
ARR acceleration
ARR example
CX market
CX vendor
CX workflow
Grant
TCV order
bot ARR
brand
cloud AI
company ARR
copilot bot
customer AI
disruption
driver AI
driver ability
example AI
example telecom
momentum ARR
outcome CX
outcome success
platform cloud
record booking
reduction agent
reference
scale
seeding year
success story
top
usage bot
vendor AI
vendor cloud
win
year AI
VRNT Transcript
Verint Systems Inc. (VRNT) Q1 2026 Earnings Call Transcript
Positive6-4
The earnings call reflects strong financial performance with record bookings, high AI ARR growth, and a positive outlook. The share buyback program and raised guidance further support a positive sentiment. Despite competitive pressures and economic factors, Verint's differentiation in AI and strong customer adoption provide confidence. The Q&A section reveals strong demand for AI, successful upselling, and high retention rates, enhancing the positive outlook. With a market cap of approximately $2 billion, the stock is likely to experience a positive movement of 2% to 8% over the next two weeks.
Verint Systems Inc. (VRNT) Q4 2025 Earnings Call Transcript
Positive3-26
Verint demonstrated strong financial performance with AI-driven revenue growth, exceeding guidance in several areas. Despite some unbundled SaaS deals not materializing, the company maintains optimistic guidance and a new $200 million buyback program. The partnership with RingCentral and positive Q&A insights about customer confidence in AI deployments further bolster sentiment. Given the market cap of $2 billion, the positive developments and strategic initiatives should result in a positive stock price movement of 2% to 8% over the next two weeks.
Verint Systems Inc. (VRNT) Q4 2025 Earnings Call Transcript
Positive3-26
Verint's earnings call reveals strong financial performance with revenue exceeding guidance and a positive outlook for Q4. The stock buyback program and increased ARR guidance further boost sentiment. Despite some competitive pressures and regulatory concerns, the company's AI-driven growth and customer success stories are compelling. The Q&A indicates confidence in closing delayed deals and expanding market share. Given the $2 billion market cap, these factors suggest a positive stock price movement of 2% to 8% in the next two weeks.
Verint Systems Inc. (VRNT) Q3 2025 Earnings Call Transcript
Positive12-5
The earnings call highlights strong financial performance, with revenue exceeding guidance and growth in SaaS ARR and free cash flow. The new partnership with RingCentral and the share repurchase program are positive catalysts. Despite competitive pressures and economic uncertainties, the company maintains its revenue and EPS guidance. The Q&A section supports market share gains and improved sales cycles, enhancing the overall sentiment. Given the small-cap market cap, the stock is likely to react positively, with an expected price increase of 2% to 8%.
VRNT Report
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