Verint Systems Reports 2.9% Revenue Growth to $224.2 Million, Acquires Cogito Corporation

Verint Systems Inc. reported a total revenue of $224.2 million for the three months ended October 31, 2024, marking a 2.9% increase from $218.5 million in the same period last year. The growth was driven by a 12% rise in recurring revenue, which reached $179.9 million, primarily due to significant increases in both bundled and unbundled Software as a Service (SaaS) offerings. However, nonrecurring revenue fell by 23% to $44.3 million, reflecting a decline in professional services and perpetual revenue. For the nine months ended October 31, 2024, total revenue increased to $655.6 million from $645.3 million, with recurring revenue up 5.7% and nonrecurring revenue down 11.3%.

The company's operating income for the third quarter was $21.7 million, down from $26.7 million a year earlier, attributed to a $10.6 million rise in operating expenses, which totaled $136.9 million. This increase was largely due to higher selling, general, and administrative expenses, as well as increased research and development costs. Despite the decline in operating income, net income attributable to Verint Systems Inc. common shares surged to $24.7 million, or $0.39 per diluted share, compared to $7.4 million, or $0.12 per diluted share, in the prior year. This improvement was primarily due to a significant reduction in the provision for income taxes.

Strategically, Verint completed the acquisition of Cogito Corporation, a provider of AI solutions, for $52.1 million, which included cash and contingent consideration. This acquisition is expected to enhance Verint's capabilities in AI-driven customer experience automation. The company also divested its manual quality managed services business, which generated $6.1 million in revenue during the same quarter last year, as part of its shift towards AI-powered solutions. As of October 31, 2024, Verint employed approximately 3,800 individuals, a decrease from 4,100 a year prior, largely due to the aforementioned divestiture.

In terms of financial health, Verint's total assets increased slightly to $2.25 billion, while total liabilities decreased to $930.2 million. The company reported cash and cash equivalents of $182.8 million, down from $241.4 million at the beginning of the year. The decrease in cash was primarily due to stock repurchases and investments in business acquisitions. Verint's long-term debt stood at $412.2 million, reflecting a modest increase from $411.0 million at the start of the fiscal year.

Looking ahead, Verint anticipates continued demand for its AI-powered solutions, although macroeconomic conditions may impact customer spending. The company remains focused on expanding its SaaS offerings and enhancing its product portfolio through strategic acquisitions. Verint's management believes that its current cash position, along with cash generated from operations, will be sufficient to meet its operational needs and strategic initiatives over the next 12 months.