Release Date: March 26, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Verint Systems Inc (VRNT, Financial) reported a strong AI momentum, with ARR growth reaching 5%, surpassing the guidance of 4%.
- The company raised its ARR outlook for fiscal '26 from $760 million to $768 million, reflecting an 8% growth.
- Verint's AI solutions are delivering strong and differentiated business outcomes, with customers reporting significant ROI, such as a healthcare insurer achieving a $70 million increase in agent capacity.
- The hybrid cloud approach allows customers to adopt AI without disrupting existing operations, leading to faster AI outcomes.
- Verint's top 25 customers showed a 24% ARR growth, indicating strong adoption and expansion of AI solutions among large clients.
Negative Points
- Revenue for Q4 came in at $254 million, below the guidance of $277 million, primarily due to unbundled SaaS deals not materializing as expected.
- The company faces challenges in predicting the mix of unbundled and bundled SaaS bookings, leading to a wider revenue guidance range of plus or minus 3%.
- Some large unbundled SaaS deals were pushed into fiscal '26, impacting revenue expectations for the current quarter.
- Despite strong ARR growth, the revenue trends fluctuated due to the timing of unbundled SaaS revenue, making quarterly revenue trends less meaningful.
- The company acknowledges that its channel partners are not yet fully autonomous in selling AI solutions, relying heavily on Verint's direct sales force for expertise.
Q & A Highlights
Q: Can you speak to the customer confidence in buying AI solutions now, and whether they are taking a land-small approach or going for larger deals?
A: Daniel Bodner, CEO: Customers are evolving from AI experiments to deployments at scale. For example, Fiserv reported that Verint's Quality Bot is doing the work of 1,200 supervisors, automating financial compliance workflows. The ROI is significant, with brands saving $40,000 on labor for every $2,000 invested in AI software. This strong outcome is helping overcome AI paralysis, and customers are increasingly confident in scaling AI deployments.
Q: Are you assuming any of the $20 million in pushed unbundled revenue that didn't come in the fourth quarter will close in FY26?
A: Daniel Bodner, CEO: The deals that were pushed are from existing customers with ongoing rollouts. We expect these customers to continue expanding their use of Verint software. The revenue guidance for FY26 accounts for a wide range of outcomes due to the unpredictability of unbundled SaaS bookings, but ARR guidance remains unaffected.
Q: How did you manage to outperform on total ARR despite the loss from large unbundled deals that pushed?
A: Daniel Bodner, CEO: We are seeing larger deals for pure AI, such as a $10 million TCV order for a new bot. Our top 100 customers grew their ARR by 17%, and our top 25 customers grew by 24%. This growth is driven by larger AI deployments, reflecting the success of our top-down approach in educating and expanding AI consumption among our largest customers.
Q: Can you share your confidence in the customers that pushed their unbundled deals into fiscal '26?
A: Daniel Bodner, CEO: We don't see macro issues affecting these deals. Customers are prioritizing investments with tangible results, and our solutions offer significant ROI. The mix of bundled and unbundled deals doesn't impact our ARR guidance, which is why we have a narrow range for ARR and a broader range for revenue.
Q: Are you gaining market share driven by the bot strategy over the past few quarters?
A: Daniel Bodner, CEO: We believe we are a market leader in CX Automation, with over $300 million in ARR from customers using Verint AI-powered workflows. Our top customers are growing significantly, and we are agnostic to infrastructure, allowing us to work with any AI vendors. This flexibility and our strong AI outcomes are helping us gain market share.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
