Sentiment Analysis of the earnings transcript to help figure out if there are any bullish or bearish sentiments that could be gathered from it. We're doing ML and AI based analysis on the earnings call to get some more insights.
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| What I mentioned, Peter, was the cost savings that our customers realize the way we price, right, our SaaS business, the AI, we're able to capture that -- more of that because the ROI is very high |
| Verint is able to capture a portion of these customer savings in the way we price our solutions, which benefits our gross margins |
| In summary, we are pleased to have overachieved our revenue and non-GAAP diluted EPS expectations in Q3 |
| This significant improvement from last year reflects demand for Verint's AI, which is offered only in the Verint Cloud |
| CX automation creates significant ROI for brands as it enables them to reduce costs while at the same time elevating customer experience |
| At our Investor Day next week, we'll discuss in much more detail how the Verint Platform enables brands to build a workforce of people and bots working together and the positive impact that customer AI adoption is expected to have on our growth |
| I would say that, first, we expect next year, the revenue to grow and improve growth rates because of the bundled SaaS booking this year |
| We believe our ability to increase gross margins reflects the strength of our AI innovation |
| I'm pleased to report that our Q3 revenue and non-GAAP diluted EPS came in ahead of our expectations, and we are on track to finish the year strong with double-digit revenue growth in the fourth quarter |
| We continue to be in a very good financial position |
| I am pleased to report that our non-GAAP gross margins continued to expand in the quarter, both sequentially and year-over-year, to 71.3% |
| While we've seen elongated sales cycles this year due to the macroeconomic environment, the demand for CX automation is strong, and customers' growing interest in AI is reflected by our expanding SaaS pipeline |
| Q3 SaaS ARR growth came in at 11% year-over-year, reflecting our new SaaS ACV bookings and solid SaaS renewal rates |
| Our net debt remains well under 1x last 12-month EBITDA and is further supported by our strong cash flow |
| The combination of our revenue overachievement and strong gross margins drove non-GAAP diluted EPS of $0.65, $0.08 ahead of expectations |
| In addition to our results coming in ahead of our expectations, we saw several positive trends driven by our AI platform innovation |
| We believe we are well positioned to augment this 4 million agent workforce in our base with our open platform and AI-powered bots |
| As the market shifts to a workforce of people and bots working together, we have a significant opportunity in our large customer base and with new logos |
| The third topic on the agenda is the positive economic impact of increased AI adoption |
| Going forward, Verint is well positioned for the market shift to more bots and fewer people |
| Verint deploying more bot licenses with fewer agent licenses will increase our TAM overall and provide us the opportunity to accelerate SaaS revenue growth |
| We are encouraged by the positive leading indicators in bundled SaaS bookings and SaaS pipeline mix and are on track to finish the year strong with double-digit revenue growth in the fourth quarter |
| In summary, we're pleased to have overachieved revenue and non-GAAP diluted EPS in Q3 and are on track to finish the year with strong double-digit revenue growth in Q4 |
| We are also encouraged by the increase in our pipeline, the addition of new logos and the increase in customer adoption of Verint bots |
| We expect bundled SaaS revenue to increase sequentially again in the fourth quarter, and for the year, we expect double-digit revenue growth in bundled SaaS |
| We continue to see strong growth in our 12-month SaaS pipeline, which was up more than 20% year-over-year driven by our open AI platform and bots |
| Since today our bots are only offered in the Verint Cloud, which we report as bundled SaaS revenue, we expect our bot innovation to drive growth in our bundled SaaS revenue stream going forward |
| Non-GAAP gross margins came in strong at 71%, slightly above the prior year and up 180 basis points from Q2 |
| We continue to be pleased with our gross margin expansion progress this year |
| For Q4, at the midpoint of our annual guidance, we expect around $264 million of revenue, representing 11% year-over-year growth, another quarter of sequential gross margin expansion and about $0.99 of non-GAAP diluted EPS |
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| In Q3, our support revenue continued to gradually decline as our support base shifts to SaaS over time |
| Are things getting worse? No, they're not getting worse |
| I think that what we did after Q2 when we saw, again, Q1 slip -- deal pushed to Q2, and then there was -- we just adjusted our focus, right? We came in Q2, and we said we're going to lower the guidance for the year based on our reality of the deal cycle is just longer |
| They just cannot continue to hire to elevate CX |
| I don't think they're getting better |
| But what's driving our growth next year is a lot of the bundled SaaS shift that is happening this year because the revenue is lagging the booking |
| For Q4, we expect a decrease of approximately $1 million |
| But at the same time, they can't keep hiring to introduce better customer experience |
| I noticed in the prepared remarks and in the press release, you didn't call out the elongated sales cycles maybe to the degree that you had in the last couple of quarters |
| For a more detailed discussion of how these and other risks and uncertainties could cause Verint's actual results to differ materially from those indicated in these forward-looking statements, please see our Form 10-K for the fiscal year ended January 31, 2023, our Form 10-Q for the quarter ended October 31, 2023, when filed and other filings we make with the SEC |
| So while customers are buying more bots, it's mostly to avoid more hiring, and we don't see that they are reducing their agent head count |
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