Erint Systems (VRNT) Q4 2017 Earnings Conference Call Transcript

Good day, girls and gents, and welcome to the Verint Systems Fourth-Quarter Earnings Conference Call. [Operator Instructions] As a reminder, the ultra-modern convention is being recorded. I would now like to show the decision to Mr. Alan Roden, senior vice chairman of company development. Sir, you can start.

Alan Roden — Senior Vice President, Corporate Development and Investor RelationsThank you, operator, and exact afternoon, and thank you for joining our convention call nowadays. I’m right here with Dan Bodner, Verint’s CEO and president, and Doug Robinson, Verint’s CFO. Before this call, we issued a press launch consisting of monetary records for our fourth financial sector and monetary 12 months ended January 31, 2018. Our Form 10-K could be filed quickly.

Each of our SEC filings and income press releases is to be had beneath the Investor Relations link on our website and additionally at the SEC internet site. Before beginning the call, I’d like to attract your attention to the reality that certain topics mentioned on this name may also include ahead-looking statements in the means of the Private Securities Litigation Reform Act of 1995 and different provisions of the federal securities legal guidelines. These forward-searching statements are based totally on management’s modern expectations and are not guarantees of future performance. Actual effects could fluctuate materially from the ones expressed in or implied by way of the forward-searching statements.

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The ahead-searching statements are made as of the date of this name, and, besides as required by using the law, Verint assumes no duty to replace or revise them. Investors are suggested no longer to place undue reliance on these forward-looking statements. For a greater certain dialogue of the way those and different risks and uncertainties ought to motive Verint’s real results to vary materially from the ones indicated in the ahead-searching statements, please see our Form 10-K for the monetary 12 months ended January 31, 2018, while filing, and other filings we make with the SEC. The monetary measures mentioned nowadays include non-GAAP measures, as we believe buyers cognizance of the measures in comparing effects among durations and amongst our peers.

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Our financial outlook is supplied most effectively on a non-GAAP foundation. Please see the modern income release within the Investor Relations section of our website to reconcile non-GAAP financial measures to GAAP measures. Non-GAAP financial facts have to be now not considered in isolation from, rather for, or superior to GAAP economic information, but is blanketed because management believes it provides significant supplemental statistics regarding our working consequences when assessing our enterprise and is beneficial to traders for informational and comparative purposes. The non-GAAP economic measures the organization uses have boundaries and might range from those utilized by other organizations.

Before I turn the call over to Dan, I want to say that I the cease this call; I might be providing some information concerning our upcoming Investor Day. Now I’d like to turn the decision over to Dan. Dan?Thank you, Alan. Good afternoon, absolutely everyone, and thanks for joining us to check our fourth region and complete-yr your outcomes. The momentum we skilled throughout the 12 months continued in Q4, and we are pleased to have completed the year sturdy. We accept as true that our over-fulfillment reflects the ongoing demand for actionable intelligence solutions, and we are once more raising our steering for the modern-day year. Looking again at the year, we released many revolutionary analytics and automation capabilities, progressed our execution, and completed our operational agility initiative.

Our annual consequences on a GAAP foundation have been $1.14 billion of revenue and $0.10 internet loss in step with share. On a non-GAAP foundation, we performed revenue of $1.15 billion and diluted internet earnings per proportion of $2.81. Our goal is to develop our profits faster than revenue through margin expansion, and we are thrilled to have expanded non-GAAP earnings per proportion on — 12% on sales boom of 7%. Overall, we agree that the investments and modifications we’ve made over the past couple of years laid the foundation for non-stop growth. In the contemporary yr, we assume some other 12 months of high-single-digit revenue increase with margin enlargement, ensuing in a double-digit non-GAAP income boom. Doug will speak to our guidance later. And now, I would like to study our results and boom strategy by using phase. Starting with patron engagement.

We are thrilled with the momentum in our business throughout the year, main to a strong fourth region. Revenue in Q4 accelerated 11% year over 12 months. For 12 months, sales elevated 5%, with the cloud portion of our sales growing 25%. Our estimated non-GAAP completely allocated working margin, which we can consult with as our phase margin, came in at 24.2% for the year, representing approximately 60 bps of margin enlargement over the earlier year.

In addition to sturdy economic outcomes, we are thrilled that during Q4, we persevered with big aggressive wins and displacements, in addition to expansions with current customers. Here are some examples. Nine million bucks in orders from a main cable and telecommunications organization. This 3-12 months subscription order is for expanding the deployment of our self-carrier solution inside the cloud for beginning new debts, billing inquiries, and the backbone of technical problems.

Nearly $7 million in orders from a leading medical insurance employer. This purchaser, deploying multiple additives from our portfolio, is a superb instance of the fulfillment of our land-and-expand approach and our ability to assist organizations in modernizing their operations over time—approximately $five million in orders from a main property and casualty coverage business enterprise. This is a superb example of how customers use self-service automation to raise the customer to enjoy while decreasing working costs.

This new consumer selected Verint’s Knowledge Management solution deployed in the cloud, replacing every dealer’s on-premises legacy answer. This competitive displacement is a superb example of how we’re assisting groups in circulating to the cloud. More than $five million in orders from a leading funding and insurance business enterprise. This client used Verint’s solution in its contact facilities and returned workplace operations and is now expanding and moving to the cloud in a three-12 months subscription deal.

This is a good instance of ways organizations trying to orchestrate consumer engagement activities throughout the company. Three million bucks in orders from a main enterprise-procedure outsourcer, bringing overall orders from this client to greater than $7 million this yr. This patron, who had previously deployed a number of our answers, determined to amplify with Verint, displacing another seller. This extra aggressive displacement is any other instance of the successful execution of our land-and-make bigger method.

We consider behind those huge-patron orders is our method to assist businesses simplify, modernize, and automate their client-engagement operations. I would really like to explain in more detail what it means to simplify, modernize, and automate, and why it’s important to our clients. First, to simplify patron engagement, we provide solutions that are open, easy to set up, and simple to apply. We are designed to combine into corporations’ present-day evolving generation environments. Our open portfolio is also compatible with main communication solutions companies, presenting businesses with the flexibility to select a more appropriate one.