Release Date: June 04, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Revenue and non-GAAP diluted EPS exceeded expectations, with revenue at $221 million and non-GAAP diluted EPS at $0.59.
- Strong SaaS bookings driven by customer adoption of AI-powered bots, with a 25% year-over-year growth in new bundle SaaS ACV bookings.
- Significant large wins, including a $14 million contract with one of the world's largest retailers and several other multi-million dollar deals.
- Raised annual guidance for revenue and non-GAAP diluted EPS due to strong Q1 performance and positive market outlook.
- Innovative open platform and AI-powered bots delivering tangible business outcomes, leading to increased customer adoption and satisfaction.
Negative Points
- Dependence on AI and data-centric platforms may pose a risk if technological advancements slow down or competitors catch up.
- Potential challenges in maintaining high gross margins as the company scales and integrates more complex AI solutions.
- The need for continuous innovation and adaptation to rapidly evolving AI technologies could strain resources and operational efficiency.
- Customer hesitation in committing to large-scale AI adoption upfront, leading to initial lower consumption and gradual budget allocation.
- Market competition from both telephony-centric and AI-centric platforms could intensify, impacting Verint's market share and pricing power.
Q & A Highlights
Q: What's driving the recent string of sizable contract announcements? Is it pure demand or GenAI resonating with customers? Also, how do you see the current macro environment?
A: Dan Bodner, CEO: The momentum is driven by customer confidence in our strategy and the adoption of our open platform. Leading brands are choosing Verint for its ability to deliver AI business outcomes now. The macro environment shows customers are focused on AI business outcomes that generate significant ROI, making them willing to invest despite broader economic caution.
Q: As AI adoption accelerates in contact centers, what are customers' plans regarding seat growth or reduction? Is the time to value leading to quicker follow-up purchases?
A: Dan Bodner, CEO: We haven't seen a decline in agent numbers. Customers are using AI to avoid hiring and improve customer experience. Some are also using extra capacity for new tasks like upselling. The quick time to value of our AI solutions is indeed leading to faster follow-up purchases.
Q: What is driving the greater-than-expected activity with unbundled SaaS revenue?
A: Dan Bodner, CEO: Our hybrid cloud platform allows customers to keep their existing systems while adopting our AI innovations in the cloud. This flexibility has led to larger and earlier deals in unbundled SaaS, as customers feel comfortable expanding their current setups without a complete overhaul.
Q: How would you describe the competitive landscape, and what are your expectations over the next six to twelve months?
A: Dan Bodner, CEO: The market is shifting towards AI and data-centric platforms. Verint's open platform, which integrates the latest AI models quickly, is a key differentiator. We expect the industry to continue moving towards open platforms that can deliver AI business outcomes without requiring a complete infrastructure overhaul.
Q: Can you walk through some of the recent large deals? What was the mix of expansions versus net new wins, and what got these deals over the finish line?
A: Dan Bodner, CEO: The common thread in these deals is the focus on delivering AI business outcomes now. Customers are choosing Verint for its modular and open platform, which allows them to start small and scale as they see ROI. The deals often involve consolidating data silos and replacing legacy solutions from competitors.
Q: Have you seen any changes in the mix of seat expansions versus ARPU uplift with recent large deals compared to previous years?
A: Dan Bodner, CEO: Most customers are currently focused on augmenting their agents rather than reducing headcount. The flexibility of our platform allows for innovative uses of workforce capacity, such as reallocating tasks to different employee groups and scheduling bots alongside human agents.
Q: What are the key metrics that indicate Verint's strong performance in Q1?
A: Dan Bodner, CEO: Key metrics include a 25% year-over-year increase in bundled SaaS bookings, a 30% increase in average SaaS contract term lengths, and a 20% year-over-year increase in the bundled SaaS pipeline. These metrics reflect strong customer commitment to our AI strategy and platform.
Q: How does Verint's open platform benefit customers compared to telephony-centric platforms?
A: Dan Bodner, CEO: Verint's open platform integrates the latest AI models quickly and leverages unified data hubs to train bots effectively. This approach allows customers to achieve AI business outcomes without the need for large, disruptive infrastructure changes, setting us apart from telephony-centric competitors.
Q: What are the economic benefits of Verint's AI-powered bots for customers and Verint?
A: Dan Bodner, CEO: For customers, the benefits include reduced labor costs, increased agent capacity, and improved customer experience. For Verint, the benefits come from expanding our addressable market and increasing the adoption of our AI-powered bots, driving faster growth.
Q: How is Verint positioned to lead the new CX automation category?
A: Dan Bodner, CEO: Verint's open platform, which integrates behavioral data and AI at its core, is highly differentiated. Our ability to quickly deploy AI-powered bots and deliver tangible business outcomes positions us well to lead the CX automation category as the market shifts from telephony-centric to AI and data-centric platforms.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
