Just after finishing its 2017 fiscal year, Israeli technology company Verint Systems Inc. (Nasdaq: VRNT) has announced another acquisition, and is upgrading the initial guidance for the fiscal year ending on January 31, 2019 that it published only two weeks ago. Verint, which provides business intelligence and security services, yesterday announced its acquisition of Next IT, a company developing artificial intelligence-based technology that enables companies to conduct calls with their customers through "virtual assistants." The acquired company is based in Washington state and Brazil. Verint is paying $29.5 million in cash for Next IT, and will pay up to $21.5 million more later, subject to meeting targets set for the acquired company by 2021, making the total deal worth up to $51 million. Some of the proceeds will be used to pay Next IT's debts, and Verint is paying for the acquisition with its own resources. Verint had $382 million cash at the end of the third quarter. It recently acquired UK company EG Solutions, which deals in personnel optimization and provides back office solutions, for $34 million.
"We continue to execute our innovation strategy, including making acquisitions that expand our self-service portfolio," Verint CEO Dan Bodner said. He added that the acquisition would accelerate Verint’s cloud and automation capabilities and contribute to its revenue and profits, saying, "We believe that Verint’s ongoing innovation in artificial intelligence technologies - such as machine learning, robotics and natural language processing - positions us for accelerated growth."
10% higher profit next year
Verint is upgrading its guidance for its 2019 fiscal year, stating, "Although this is a small acquisition for Verint, because we just recently provided preliminary guidance for the year ending January 31, 2019, we are updating our outlook." The company expects an additional $10 million in revenue and $0.03 more in non-GAAP profit per share in the 2019 fiscal year.
Verint says that its revenue from the customer engagement sector will grow 6%, instead of the 5% growth it previously expected, while leaving its guidance for growth in revenue from cyber security unchanged at 10%. The company projects $1.225 billion (plus or minus 2%) revenue in the 2019 fiscal year and non-GAAP profit per share of $3.03 ($196 million), 10% more than in the current fiscal year. GAAP profit is likely to be affected by write-downs of $49-53 million on intangible assets and $12 million in other write-downs, as well as recognition of $60-70 million in stock-based remuneration for employees. Verint's revenue rose 6.6% to $816 million in the first three quarters of this year, and its non-GAAP net profit reached $112 million, 10% more than in the corresponding period last year. The company's market cap is $2.6 billion, after its share price climbed 15% over the past year.
Published by Globes [online], Israel Business News - www.globes-online.com - on December 20, 2017
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