Verint Reports Strong Q1 FYE 2026 Results, AI ARR Grows 24% Year-Over-Year

Verint Systems Inc. (Nasdaq: VRNT), a leading provider of customer experience (CX) automation solutions, reported strong financial results for the first quarter of its fiscal year 2026 (ending January 31, 2026). The company, which boasts over 80 Fortune 100 clients, showed notable growth in its artificial intelligence (AI) segment, reflecting its strategic focus on AI-driven solutions. Key Financial Highlights: Subscription ARR (Annual Recurring Revenue): Increased to $710 million, up 6.3% year-over-year. AI ARR: Rose significantly to $354 million, marking a 24.1% increase from the previous year. Total Revenue: Recorded at $208 million, slightly down from $221 million in the same period last year. Net Loss Per Share (GAAP): Reported a net loss of $(0.04) per share. Non-GAAP Diluted EPS: Achieved $0.29, outperforming guidance. Executive Comments: Dan Bodner, CEO and Chairman of Verint, emphasized the company's robust start to the fiscal year, noting that the 6% year-over-year ARR growth and higher-than-projected revenue and earnings per share (EPS) give confidence in meeting annual targets. He highlighted two key differentiators driving the company's success: 1. Transforming AI Technology into Business Outcomes: Verint's ability to convert the latest AI advancements into practical, impactful solutions for customers. 2. Hybrid Cloud Deployment: Verint offers flexible AI deployment options, allowing customers to integrate AI into existing environments, start small, and scale quickly. Grant Highlander, Chief Financial Officer, added that AI ARR growth of 24% underscores the company's momentum in the AI space. By the end of the fiscal year, Verint expects AI ARR to exceed 20% growth. Financial projections include: - Subscription ARR: Anticipated to reach $768 million by the end of FYE 2026, representing 8% year-over-year growth. - Cash Generation: Expected to total $960 million. - Free Cash Flow: Foreseen to increase by 12%, driven by cash contribution margin expansion. - Non-GAAP Diluted EPS: Projected at $2.93 at the midpoint of revenue guidance. Strategic Focus and Market Position: Verint's strategy is centered on leveraging AI to enhance customer engagement and operational efficiency. The company's Open Platform and AI-powered bots are designed to deliver tangible business outcomes, addressing the growing demand for automation in the CX industry. Verint's hybrid cloud approach is particularly advantageous, as it allows for quick and scalable deployment of AI solutions, thereby reducing time-to-value for customers. Conference Call and Investor Information: A conference call was scheduled for 4:30 p.m. ET on May 1, 2025, to discuss Q1 results and fiscal year outlook. Investors and analysts can access the call through the company's website, www.verint.com, or via phone registration for live participation. Non-GAAP Financial Measures: The company uses several non-GAAP financial measures to provide clearer insights into its performance: - Adjusted EBITDA: $31.9 million, reflecting a 15.3% margin. - Free Cash Flow: $20.3 million, indicating a solid cash-generating capability. - Net Debt: Reduced to $233.7 million from $290.1 million at the beginning of the fiscal year. Industry Evaluation and Company Profile: Industry insiders view Verint's performance positively, noting the significance of its AI ARR growth and the strategic relevance of its hybrid cloud model. Verint's ability to rapidly deploy AI solutions and integrate them into existing customer infrastructures positions it well in a market that is increasingly demanding immediate returns on AI investments. The company's strong presence among large enterprises and its ongoing commitment to innovation and customer value are seen as key strengths. Verint, The CX Automation Company™, continues to be certified by Great Place To Work®, highlighting its focus on employee satisfaction and company culture. Verint's robust financial position, coupled with its strategic initiatives, suggests a promising trajectory for sustained growth in the rapidly evolving field of customer experience automation.