The share price of Verint Systems Inc. (Nasdaq: VRNT) dropped 7% in late trading yesterday, following the publication of the company's third quarter results (the quarter ending in October). The results were good, but after outperforming its third quarter guidance, the market may have expected the company to raise its guidance for the year, which it did not do.
Verint, which supplies business intelligence and security systems and services, has a $2.7 billion market cap. The company's revenue totaled $281 million in the third quarter, 8% more than in the corresponding quarter last year and 2% more than in the preceding quarter. Revenue from services and support accounted for 66% of the company's total revenue, and the rest came from the sale of products. Revenue from customer engagement amounted to $182 million, 5.1% more than in the third quarter of 2016-2017. Revenue from cyber security was $99.1 million, 15.1% more than in the corresponding quarter in 2016-2017. Verint's third quarter GAAP net profit was $3.1 million, compared with a $7.4 million loss in the third quarter of 2016-2017 and a $5.8 million loss in the second quarter of 2017-2018. Verint's third quarter non-GAAP profit was $42.5 million, 14% more than in the corresponding quarter last year.
Verint's revenue grew 6.6% to $816 million in the first three quarters of the year, and its non-GAAP net profit totaled $112 million, $1.75 per share, up 10%, compared with the corresponding period in 2016-2017. Verint reiterated its previous guidance for the current fiscal year of $1.14 billion in revenue and a $176 million non-GAAP net profit ($2.75 per share), including $324 million in revenue and a net profit of $64 million, $1 per share, in the fourth quarter. This guidance constitutes 7.3% growth in revenue and 11% growth in net profit for the year as a whole. Verint also provided initial guidance for 2018-2019 (the year beginning in February 2018): $1.215 billion in revenue, 6.6% more than its guidance for 2017-2018, and a net profit of $192 million, $3 per share, 9.1% more than its guidance for the current year. The analysts' forecast was slightly higher. In both the current year and the next fiscal year, Verint anticipates 5% growth in the civilian sector and 10% in the security sector.
“We are pleased with our strong third quarter and year-to-date results. For Q3, we had sequential and year-over-year revenue growth in both of our segments and earnings increased faster than revenue driven by top line growth and expanding margins,” Verint president and CEO Dan Bodner said. In the company's conference call following the publication of its reports, Bodner said that Verint was demonstrating discipline in its performance, and expected to finish the current year as planned, with 10% growth in net profit per share.
Published by Globes [online], Israel Business News - www.globes-online.com - on December 7, 2017
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