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Delaware
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11-3200514
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(State or Other Jurisdiction of Incorporation or
Organization)
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(I.R.S. Employer Identification No.)
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175 Broadhollow Road, Melville, New York
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11747
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(Address of Principal Executive Offices)
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(Zip Code)
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Title of each class
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Name of each exchange
on which registered
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Common Stock, $.001 par value per share
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The NASDAQ Stock Market, LLC
(NASDAQ Global Select Market)
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Verint Systems Inc. and Subsidiaries
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Index to Form 10-K
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As of and For the Year Ended January 31, 2017
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uncertainties regarding the impact of general economic conditions in the United States and abroad, particularly in information technology spending and government budgets, on our business;
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risks associated with our ability to keep pace with technological changes, evolving industry standards, and customer challenges, such as the proliferation and strengthening of encryption and the transition of portions of the software market to the cloud, to adapt to changing market potential from area to area within our markets, and to successfully develop, launch, and drive demand for new, innovative, high-quality products that meet or exceed customer needs, while simultaneously preserving our legacy businesses and migrating away from areas of commoditization;
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risks due to aggressive competition in all of our markets, including with respect to maintaining margins and sufficient levels of investment in our business;
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risks created by the continued consolidation of our competitors or the introduction of large competitors in our markets with greater resources than we have;
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risks associated with our ability to successfully compete for, consummate, and implement mergers and acquisitions, including risks associated with valuations, capital constraints, costs and expenses, maintaining profitability levels, expansion into new areas, management distraction, post-acquisition integration activities, and potential asset impairments;
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risks relating to our ability to effectively and efficiently enhance our existing operations and execute on our growth strategy and profitability goals, including managing investments in our business and operations, managing our cloud transition and our revenue mix, and enhancing and securing our internal and external operations;
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risks associated with our ability to effectively and efficiently allocate limited financial and human resources to business, developmental, strategic, or other opportunities, and risk that such investments may not come to fruition or produce satisfactory returns;
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risks that we may be unable to establish and maintain relationships with key resellers, partners, and systems integrators;
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risks associated with our reliance on third-party suppliers, partners, or original equipment manufacturers ("OEMs") for certain components, products, or services, including companies that may compete with us or work with our competitors;
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risks associated with the mishandling or perceived mishandling of sensitive or confidential information and with security vulnerabilities or lapses, including information technology system breaches, failures, or disruptions;
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risks that our products or services, or those of third-party suppliers, partners, or OEMs which we incorporate into our offerings or otherwise rely on, may contain defects or may be vulnerable to cyber-attacks;
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risks associated with our significant international operations, including, among others, in Israel, Europe, and Asia, exposure to regions subject to political or economic instability, fluctuations in foreign exchange rates, and challenges associated with a significant portion of our cash being held overseas;
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risks associated with a significant amount of our business coming from domestic and foreign government customers, including the ability to maintain security clearances for applicable projects and reputational risks associated with our security solutions;
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risks associated with complex and changing local and foreign regulatory environments in the jurisdictions in which we operate, including, among others, with respect to privacy, information security, trade compliance, anti-corruption, and regulations related to our security solutions;
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risks associated with our ability to retain and recruit qualified personnel in regions in which we operate, including in new markets and growth areas we may enter;
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challenges associated with selling sophisticated solutions, including with respect to educating our customers on the benefits of our solutions or assisting them in realizing such benefits;
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challenges associated with pursuing larger sales opportunities, including with respect to longer sales cycles, transaction reductions, deferrals, or cancellations during the sales cycle, risk of customer concentration, our ability to accurately forecast when a sales opportunity will convert to an order, or to forecast revenue and expenses, and increased volatility of our operating results from period to period;
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risks that our intellectual property rights may not be adequate to protect our business or assets or that others may make claims on our intellectual property or claim infringement on their intellectual property rights;
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risks that our customers or partners delay or cancel orders or are unable to honor contractual commitments due to liquidity issues, challenges in their business, or otherwise;
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risks that we may experience liquidity or working capital issues and related risks that financing sources may be unavailable to us on reasonable terms or at all;
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risks associated with significant leverage resulting from our current debt position or our ability to incur additional debt, including with respect to liquidity considerations, covenant limitations and compliance, fluctuations in interest rates, dilution considerations (with respect to our convertible notes), and our ability to maintain our credit ratings;
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risks arising as a result of contingent or other obligations or liabilities assumed in our acquisition of our former parent company, Comverse Technology, Inc. (“CTI”), or associated with formerly being consolidated with, and part of a consolidated tax group with, CTI, or as a result of CTI's former subsidiary, Xura, Inc. (formerly, Comverse, Inc.) (“Xura”), being unwilling or unable to provide us with certain indemnities or transition services to which we are entitled;
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risks relating to the adequacy of our existing infrastructure, systems, processes, policies, procedures, and personnel and our ability to successfully implement and maintain enhancements to the foregoing and adequate systems and internal controls for our current and future operations and reporting needs, including related risks of financial statement omissions, misstatements, restatements, or filing delays; and
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risks associated with changing accounting principles, tax rates, tax laws and regulations, and the continuing availability of expected tax benefits.
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Data Capture—
Our Actionable Intelligence platform enables the capture of a wide range of data, including both structured and unstructured data, such as operational, transactional, network, and web data. Our platform is designed to support big data applications which depend on the ability to capture, store, and manage very large data sets from multiple data sources.
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Data Processing—
Our
Actionable Intelligence platform facilitates the process of taking structured and unstructured data from multiples sources and then cleansing, fusing, and preparing the data for analysis. This data processing stage is particularly important in applications that require data capture and fusion from multiple sources, different systems, and numerous environments.
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Data Analysis—
Our Actionable Intelligence platform enables the use of a wide range of engines for data analytics, including classification, correlation, anomaly detection, identity extraction, behavioral analysis, and predictive analytics. Big data analysis is a crucial step in identifying critical insights that otherwise might not be intuitive.
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Data Visualization—
Our Actionable Intelligence platform facilitates the presentation of crucial insights from data to decision makers and the provision of workflow, collaboration, and case management capabilities so they can make more timely and informed decisions. The platform supports many use cases, and the type of data visualization used for delivering actionable insights to users can be optimized based on the specific user environment.
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Evolving Customer Expectations
. Consumers expect a more personalized, contextual, and consistent customer experience across service channels. Customer service has evolved from traditional call centers and in-store visits, to omnichannel contact centers, or customer engagement centers, that include self-service channels, such as web, voice and mobile self-service, and customer communities; a host of digital communications mediums, such as email, chat, and social media; and the traditional telephone. Today, consumers may select a service channel based on a number of factors, including which channels are available, their experiences with those channels, personal preference, and the type of service issue at hand. Often they use multiple channels for the same service-related issue, and alternate between traditional (voice) and digital (web, social, and mobile) channels based on individual preferences. With multiple engagement channels available and consumers having a preference to have their needs addressed in the first contact, we believe a focus on “ease of doing business” with an organization is becoming increasingly important and can be a key competitive differentiator.
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Evolving Employee Expectations.
Employee expectations are also evolving. Employees want their voices to be heard and their opinions to be taken into account. They want their skills and preferences to be considered and acted upon, and they want to be able to do the right things for their customers. Studies from the industry analyst community have reinforced the impact and importance of an engaged and empowered workforce, finding that when it comes to serving customers, happier, more empowered employees can have a significant impact not only on the customer experience, but also on a company’s financial performance. We believe an engaged and empowered employee base can be a significant differentiator for organizations. Customer Engagement solutions, such as those from Verint, can play an important role in helping empower and develop employees, as well as solicit, analyze, and act on their opinions and feedback.
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Evolving Customer-Centric Organizations.
Customer-centric organizations are increasingly looking to aggregate, analyze, and act on information to improve the customer experience, build customer loyalty, and drive profitability. Today’s organizations have a significant amount of structured and unstructured data related to their customers, workforce, and other information that is generated from numerous departments and multiple systems across the enterprise. We believe that these organizations are increasingly seeking customer engagement solutions that allow them to collect and analyze intelligence across multiple engagement channels to gain a better understanding of the performance of their workforces, the effectiveness of their service processes, the quality of their interactions, and changing customer behaviors. When captured, analyzed, and acted upon, organizations can use this Actionable Intelligence to help achieve important strategic objectives, such as empowering staff, enhancing loyalty, gaining a holistic view of operations and effectiveness, driving automation, reducing operational costs, increasing revenue, and mitigating risk.
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Evolving Requirements for Authentication, Fraud Detection, Risk Management, and Compliance
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Organizations face significant challenges when it comes to safeguarding customers’ personal information, investigating fraud, and complying with regulatory and compliance requirements. Many of these risks are fueled by new system vulnerabilities, insider threats, and the rise of sophisticated methods of cyber-attack. For example, in financial services, contact center fraud has driven demand for voice biometrics and predictive analytics solutions that can identify and thwart fraudsters, while quickly authenticating legitimate customers. In financial services, branch and ATM fraud has driven demand for surveillance and analytics tools to support fraud investigations. Financial protection and other regulations
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such as the Dodd-Frank Wall Street Reform and Consumer Protection Act and the Payment Card Industry Data Security Standard
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also present tremendous challenges, with the risk of significant financial penalties and remediation efforts for non-compliance. While organizations often have detailed processes/procedures for employees to follow, we believe that many are increasingly seeking Actionable Intelligence to anticipate and prevent breaches, effectively authenticate customers and protect personal information, mitigate risk, investigate and prevent fraud, and help ensure compliance.
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Adopting Innovative Technology
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We see several trends in the Customer Engagement market resulting from the availability of new technologies. With the evolution of cloud technologies, some customers expect deployment flexibility, such as the ability to deploy solutions on-premises, in the cloud, or in a hybrid fashion. We see greater adoption of cloud solutions in smaller organizations and greater interest in hybrid deployments in larger enterprises. With the evolution of artificial intelligence technologies, we also see interest in greater automation, such as next-generation self-service solutions based on advanced natural language processing and robotic automation. Interest in these solutions is being driven by a desire to reduce the cost of delivering customer service, while at the same time improving customer retention through a faster and high quality self-service experience. Finally, with the evolution of social media, mobile, and other interaction technologies, we see organizations interested in leveraging newer engagement channels to address rapidly-evolving customer preferences.
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Offering the Broadest and Most Innovative Portfolio of Best-of-Breed Customer Engagement Solutions.
Verint strives to offer the broadest and most innovative portfolio of purpose-built software and supporting services that enhance operational efficiency, reduce cost, improve the customer experience, and drive revenue for contact centers, branch and back office operations, customer experience, and digital marketing. We continue to invest to further expand our portfolio of Customer Engagement solutions.
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Offering a Holistic Approach to Customer Engagement with the Flexibility to Start Anywhere.
Customer-centric organizations are seeking to evolve their customer engagement operations to address the trends outlined above. Organizations are migrating towards a more holistic approach at different paces, depending on their prior investments, business priorities, and current budgets. Verint’s strategy is to offer our broad portfolio in a highly modular fashion that allows customers to preserve their investments in legacy solutions and start anywhere within the Verint portfolio for maximum flexibility. Many of our customers start with the solution that addresses their most urgent needs, and over time, adopt more solutions from our portfolio.
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Offering On-Premises, Cloud, and Hybrid Deployment Models with a Broad Range of Value-Added Services.
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Partnering With Customer-Centric Organizations to Address Evolving Trends.
We believe that organizations are looking for strategic partners with a broad portfolio and deep domain expertise to help them evolve their customer engagement operations to achieve strategic business goals. Historically, voice/telephony was the dominating channel. Organizations are now looking to add a variety of digital engagement channels (such as web, social, and mobile), as well as assisted service and self-service capabilities. They are also looking to add analytics, automation, and intelligence to power a consistent, contextual, and personalized customer engagement, while reducing operating cost and increasing revenue. To address this opportunity, Verint’s strategy has been to build a broad portfolio of analytics-driven Customer Engagement solutions that enable organizations to implement a holistic approach to customer engagement with greater automation and shared intelligence across applications. We partner with customer-centric organizations to help them protect their legacy investments, while adding new capabilities based on their specific business priorities.
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Voice of the Customer
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Workforce Optimization
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Employee Engagement
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Engagement Channels
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Security, Fraud, and Compliance
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Voice of the Customer Solutions
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Description
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Interaction Analytics
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Includes Speech Analytics, Text Analytics, and Social Analytics that proactively identify trends, themes, and the root causes driving customer behavior in order to improve performance, optimize processes, and enhance customer experiences. Provides a fast, smart, accurate solution for automatically categorizing, identifying trends, and performing root cause analysis on voice and text-based communications
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including call recordings, survey verbatims, social media posts, email, and customer service chat sessions
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according to organizations’ unique objectives and challenges.
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Enterprise Feedback
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Provides an enterprise-class platform to help organizations gain a complete view into the perceptions, opinions, and intentions of their customers and employees through company-initiated surveys delivered via mobile, email, web, IVR, and SMS channels.
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Digital Feedback
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Features an enterprise solution that captures web and mobile customer-initiated feedback during key moments in the digital customer journey, and empowers organizations to analyze and act in real-time on that feedback to deliver demonstrable business value.
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Workforce Optimization Solutions
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Description
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Intelligent Recording
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Enables full-time, enterprise recording to help ensure compliance, reduce liability, and support customer engagement. Reliably and securely captures, encrypts, indexes, archives, searches, and replays audio, screen, and other methods of interaction from different and mixed recording environments, and couples these capabilities with powerful speech analytics to provide greater value from recorded interactions.
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Analytics-Driven Quality
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Features sophisticated quality management functionality infused with the power of speech analytics, enabling a more strategic approach to QM and performance evaluations. Enables organizations to drive customer-focused quality initiatives by rapidly surfacing the interactions, intelligence, and issues that are of high business value and relevance.
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Coaching/Learning
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Provides a forum for consistent, performance-based mentoring of employees by supervisors and the delivery of training right to the employee desktop. Can be scheduled at the best times for minimal impact on service levels, and to enable employees to engage and improve their skills on-demand.
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Workforce Management
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Enables organizations to efficiently plan, forecast, and schedule employees to meet service level goals. Provides visibility into and a singular management tool for the work, the people, and the processes across customer touchpoints in contact center, branch and back-office operations.
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Work Allocation
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Helps increase productivity, meet service delivery goals, and enhance customer satisfaction by prioritizing the work of individual employees, helping ensure they focus on the right activities at the right time. Provides a practical approach to managing claims processing, loan production, and other blended and back-office functions by prioritizing work items to meet service level agreements (SLAs) based on available employees with the right skills.
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Desktop and Process Analytics
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Provides organizations with visibility into how employees use different systems, applications, and processes to perform their functions. Helps identify opportunities to improve business processes, enhance compliance, and heighten the overall efficiency, cost, and quality of customer service.
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Robotic Process Automation
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Automates repetitive manual processes, allowing employees to focus on more complex and value-added customer-facing activities. Leverages software robots to execute specific tasks or entire multistep processes within a functional area, leading to improved quality and productivity.
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Performance Management
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Serves as a complete, closed-loop solution to manage individual and departmental performance against goals. Provides a comprehensive view of key performance indicators (KPIs) using performance scorecards to report on customer interactions, customer experience trends, and contact center, branch, and back-office staff performance. Leverages scorecards, along with learning, coaching, and gamification, as part of a broader capability.
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Engagement Channel Solutions
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Description
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Web/Mobile Self-Service
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Enables customers to self-serve on the web or via their mobile devices, accommodating the preferences of those that prefer to engage with organizations digitally. Unites knowledge management, case management, process management, and channel escalation to enable personalized web and mobile self-service experiences. Features advanced cross-channel messaging, enabling customers to start a digital interaction on one device and continue it on another, as well as seamlessly transition from self-service to live service within a mobile app, mobile web, or web application.
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Voice Self-Service
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Provides speech-enabled voice self-service enhanced by real-time, contextual automation and analytics-driven personalization. Leverages business intelligence to analyze and adapt call flow and the pace of interactions based on caller behavior, and to continually improve performance over time.
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Customer
Communities
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Enables organizations to establish and manage online communities on behalf of their customers and partners to support social customer service, digital marketing, and engagement. Fosters self-service, knowledge sharing, collaboration, and networking, through peer-to-peer support forums, communications blogs, and online resources, such as
discussion forums, product documentation, and how-to videos.
Helps organizations deliver better products faster by sourcing new ideas from customers, partners, and potential buyers.
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Email/Secure Messaging
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Automates the process of capturing, documenting, interpreting, and routing emails, helping organizations respond to customers quickly and consistently. Routes messages to the most appropriate employee based on skills, entitlements, and availability, providing standard templates and responses, a central knowledge base, and unified customer history across channels. Features a secure web portal for customers to send/receive confidential information as needed.
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Web Chat
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Enables employees to help online customers when they need it the most, in real-time. Provides customers with a quick, easy way to communicate with customer service employees via a simple text interface, and helps employees rapidly address needs and decrease the abandonment of online transactions. Guides customers through online processes using chat in conjunction with co-browsing.
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Co-Browse
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Enables employees to strengthen customer relationships by guiding customers to successful completions of their digital journeys. Helps reduce web page abandonment, drive revenue, and deliver better customer experiences by allowing employees to simultaneously browse the same web pages as customers and assist them with completing their transactions.
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Mobile Messaging
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Provides the ability for customers to start an interaction on one device, such as a website on their laptop, pause for a while, and then pick up right where they left off on a smartphone or tablet, minutes, hours, or even days later. Enables “conversations” to persist across devices, over time, all the way from self-service through live assistance.
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Social Engagement
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Collects, analyzes, and reports relevant insights derived from posts and content published to social media sites and messaging services. Reveals intelligence and trends related to sentiment, emerging topics and themes, and locations, enabling organizations to understand the voice of the customer, and giving employees the means and insight they need to respond to and address issues and concerns expressed through these channels.
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Security Threats Remain Pervasive Globally, and Preventing Crime and Terrorism Is Becoming More Complex
. Governments, critical infrastructure providers, and enterprises face ongoing security threats from criminal and terrorist organizations, foreign governments, and other groups and individuals looking to do harm. Increasingly, these security threats come from well-organized and well-funded operations utilizing highly sophisticated methods and technologies. As a result, detecting, investigating, and responding to security threats is becoming more complex. Security and intelligence organizations responsible for addressing these increasingly sophisticated threats are seeking advanced data mining solutions to help them generate Actionable Intelligence. Such solutions often involve collecting, fusing, and analyzing structured and unstructured data from multiple sources, including from cyber space and a variety of other data and communications networks. We believe that the increasing complexity and technological challenges related to preventing crime and terror will drive customer demand for greater intelligence and for data mining solutions such as ours.
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Security Organizations Face Competing Budget Priorities and a Global Shortage of Qualified Intelligence Analysts and Data Scientists
. Security organizations are seeking sophisticated technology to help combat crime and terror. While security threats are becoming more complex, security spending competes with other spending priorities. Organizations need to employ a large number of intelligence analysts and data scientists to meet the increasing complexity of an ever-growing number of security threats. Even with adequate budgets, there is a shortage of such qualified personnel globally, leading to elongated investigations and increased risk that security threats are not addressed. We believe that competing budget priorities and the shortage of qualified personnel have made security and intelligence data mining solutions critical, as they provide customers with automation, drive operational efficiencies, and improve the quality and speed of investigations.
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Security Organizations Seek To Partner With Vendors That Can Bring Both Sophisticated Data Mining Software and Deep Domain Expertise.
Security operations involve people, processes, and technology, including data mining software. To facilitate the effective deployment of data mining solutions, in many cases security organizations seek to partner with vendors that can also offer relevant domain expertise and can deliver turnkey solutions. We believe that security and intelligence data mining solutions that incorporate domain expertise with advanced analytical technologies better enable customers to achieve their objectives of generating Actionable Intelligence and of accelerating investigations without major budget increases or the need to employ large numbers of data scientists and security analysts. We also believe that customers seek turnkey solutions that address their specific requirements and that are better aligned with their strategic needs and financial constraints, rather than unspecialized data analysis software that often requires expensive customizations and managed services.
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Extending Our Market Leadership and Increasing Our Total Addressable Market (“TAM”) by Expanding Our Portfolio of Data Mining Solutions to Address Evolving Security Threats.
Verint has a long history of working closely with leading security organizations around the world and has created a strong security and intelligence data mining solution portfolio based on a deep understanding of our customers’ needs. We are well positioned to expand existing customer relationships, win new customers, and continue to grow our portfolio to address evolving security threats. Historically, most of our Cyber Intelligence revenue has been generated from government customers. We see an opportunity to increase our TAM over time by leveraging our strong government experience to introduce new security and intelligence data mining solutions and domain expertise to critical infrastructure providers and enterprises that face complex security threats.
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Delivering Advanced Data Mining Solutions with Deep Domain Expertise to Improve the Velocity and Effectiveness of Our Customers’ Security Operations.
Recognizing that security organizations face many evolving threats, while at the same time experiencing financial constraints and a shortage of intelligence analysts and data scientists, our strategy is to bring to market security and intelligence data mining solutions that can address specific customer needs. The design of our solutions is based on our deep knowledge of customers’ operational needs and advanced analytical technologies in the areas of artificial intelligence, machine learning, predictive analytics, and
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Partnering with our Customers and Offering Flexible Deployment Models.
We are a strategic partner to our customers, providing them with security and intelligence data mining solutions to help address security threats and ensure the long-term success of their mission. Our strategy is to offer customers multiple options to deploy our solutions, including working directly with us in a turnkey project or indirectly through systems integrators. Many of our customers choose Verint to deploy turnkey projects that include software, hardware, and services (including from third-party vendors), while other customers choose to implement our security and intelligence data mining software in conjunction with hardware and services provided by others. Regardless of how customers deploy our solutions, we are constantly working to enhance our products and services to help them stay ahead of evolving security threats.
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Solutions
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Description
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National Security
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National security agencies are mandated to prevent terrorism, collect intelligence, and investigate national security threats. Verint’s National Security data mining solution enables governments around the world to generate Actionable Intelligence by collecting, correlating, and analyzing a wide range of structured and unstructured data from multiple sources to identify and prevent potential threats.
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Law Enforcement
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Law enforcement agencies are mandated to fight a wide range of criminal activity, such as arson, drug trafficking, homicides, human trafficking, identity theft, kidnapping, anti-poaching, illegal immigration, financial crimes, and other organized crimes. Verint’s Law Enforcement evidence collection data mining and investigation solution provides critical intelligence to advance complex investigations for a wide array of crimes.
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Cyber Security
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Governments, critical infrastructure organizations, and enterprises are facing attacks from sophisticated malware. Due to the increased sophistication of these attacks they are becoming more difficult to detect, prevent, and investigate. Verint’s data mining cyber security solution helps organizations collect network, end-point, and other information from multiple sources and apply analytics in order to prioritize responses to attacks, automate part of the investigation process to reduce dependency on cyber analysts and data scientists, and reduce the critical time from detection to remediation.
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Critical Infrastructure
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Critical infrastructure providers are mandated to protect sensitive assets, such as airports, bridges, electrical grids, pipelines, ports, nuclear power plants, water supplies, and government facilities. Given the large size of these types of assets, critical infrastructure providers seek solutions to help them detect and respond to threats efficiently and across large distances. Verint’s Critical Infrastructure security and intelligence data mining solution combines and analyzes data from a range of sensors and other systems to provide Actionable Intelligence to security personal, allowing them to centrally monitor and respond to security threats.
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Enterprise Security
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Enterprises with significant risk of data loss, intellectual property theft, financial fraud, or other security risks are interested in data mining solutions to help mitigate such risks. For example, Verint’s Enterprise Security data mining solution has been deployed by a global pharmaceutical company to mine the open source web for counterfeit drugs that may infringe on their patent-protected pharmaceutical products. Verint’s Enterprise Security data mining solution has also been deployed by a large retail company to mine data captured in stores to help investigate and mitigate fraud.
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Telecommunications Lawful Interception Compliance
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Telecommunication carriers are mandated to comply with certain government regulations requiring them to assist the government in their evidence and intelligence collection process. This can involve collecting information from a wide range of sources across disparate networks. Verint’s Telecommunication Lawful Interception Compliance solution helps telecommunication providers comply efficiently and adequately with these regulations.
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Border Control
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Governments are mandated to monitor and regulate borders to control the movement of people and goods into and out of a country. Borders can be very large and impossible to monitor with people alone. As a result, border control agencies seek physical security technologies, as well as intelligence gathering technologies, to adequately protect borders. Verint’s Border Control solution leverages data mining of machine data, telecommunications, social data, and enterprise systems to identify suspicious behavior, and help investigate and prevent border control incidents.
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Correctional Facilities
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Correctional agencies are mandated to safely detain criminals in low, medium, and high security facilities. They are also required to ensure that criminals do not continue to conduct illegal activities from inside prisons. Verint’s Correctional Facilities solution assists prison monitoring through situational awareness and intelligence gathering capabilities to enhance physical security and help identify illegal activities from inside the prison.
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Solutions
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Description
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Network Intelligence Suite
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Verint’s Network Intelligence Suite generates insights and intelligence by rapidly uncovering critical information from network traffic. The Network Intelligence suite can address a wide range of communications networks and can scale to capture and analyze massive volumes of communications traffic.
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Threat Protection System (TPS)
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Verint’s TPS integrates multiple advanced detection engines and provides unified workflows for investigation, behavioral analytics, and forensics that analyze cyber-attack paths, enable remediation, and help protect against future attempts. Its orchestration and automation capabilities reduce the need for labor-intensive manual processes and help shorten the period of time between malware detection and remediation.
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Situational Awareness Platform
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Verint’s Situational Intelligence Platform integrates data from multiple systems and sensors, such as access control, video, intrusion, fire, public safety, weather, traffic, first responder, and other mobile device systems. It provides a unified visualization layer and workflow, enabling organizations to fuse, analyze, and report information, and take action on risks, alarms, and incidents across business and security systems. Situational awareness helps identify and mitigate risks, improve response times, increase operational effectiveness, and reduce total cost of ownership.
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Intelligence Fusion Center (IFC)
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Verint’s Intelligence Fusion Center provides organizations with a centralized data mining platform for creating insights, identifying potential threats, and generating predictive intelligence. It enables a cross-source/cross-format single point of access to intelligence data sources to facilitate organization-wide investigation, management, and analysis. In addition to the fusion of data generated by Verint’s products, it provides capabilities to connect structured and unstructured data originating from customer-provided databases and other sources.
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Web and Social Intelligence
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Verint’s Web and Social Intelligence solution helps transform large volumes of web and open source content into insights, identify suspicious behavioral patterns, and generate predictive intelligence.
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Product performance and functionality;
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Product quality and reliability;
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Breadth of product portfolio and pre-defined integrations;
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Global presence and high-quality customer service and support;
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Specific industry knowledge, vision, and experience; and
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Price.
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the effect of the acquisition on our financial and strategic positions and our reputation;
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risk that we fail to successfully implement our business plan for the combined business, including plans to accelerate growth;
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risk that we are unable to obtain the anticipated benefits of the acquisition, including synergies or economies of scale;
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risk that the market does not accept the integrated product portfolio;
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challenges in reconciling business practices or in integrating product development activities, logistics, or information technology and other systems;
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retention risk with respect to key customers, suppliers, and employees and challenges in assimilating and training new employees;
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challenges in complying with newly applicable laws and regulations, including obtaining or retaining required approvals, licenses, and permits; and
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potential impact on our internal controls over financial reporting.
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There is greater risk of customers deferring, scaling back, or cancelling sales as a result of, among other things, their receipt of a competitive proposal, changes in budgets and purchasing priorities, or the introduction or anticipated introduction of new or enhanced products by us or our competitors during the process.
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We may make a significant investment of time and money in opportunities that do not come to fruition, which investments may not be usable or recoverable in future projects.
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We may be required to bid on a project in advance of the completion of its design or be required to begin working on a project in advance of finalizing a sale, in either case, increasing the risk of unforeseen technological difficulties or cost overruns.
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We face greater downside risks if we do not correctly and efficiently deploy limited personnel and financial resources and convert such sales opportunities into orders.
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foreign currency fluctuations;
|
•
|
political, security, and economic instability or corruption in foreign countries;
|
•
|
changes in and compliance with both international and local laws and regulations, including those related to trade compliance, anticorruption, data privacy and protection, tax, labor, employee benefits, customs, currency restrictions, and other requirements;
|
•
|
differences in tax regimes and potentially adverse tax consequences of operating in foreign countries;
|
•
|
product customization or localization issues;
|
•
|
preferences for or policies and procedures that protect local suppliers;
|
•
|
legal uncertainties regarding intellectual property rights or rights and obligations generally;
|
•
|
recruitment and retention of qualified foreign employees; and
|
•
|
challenges or delays in collection of accounts receivable.
|
•
|
limit our ability to obtain additional debt financing in the future for working capital, capital expenditures, acquisitions, or other general corporate purposes;
|
•
|
require us to dedicate a substantial portion of our cash flow from operations to debt service, reducing the availability of our cash flow for other purposes;
|
•
|
require us to repatriate cash for debt service from our foreign subsidiaries resulting in dividend tax costs or require us to adopt other disadvantageous tax structures to accommodate debt service payments; or
|
•
|
increase our vulnerability to economic downturns, limit our ability to capitalize on significant business opportunities, and restrict our flexibility to react to changes in market or industry conditions.
|
•
|
incur additional indebtedness or liens or issue preferred stock;
|
•
|
pay dividends or make other distributions or repurchase or redeem our stock or subordinated indebtedness;
|
•
|
engage in transactions with affiliates;
|
•
|
engage in sale-leaseback transactions;
|
•
|
sell certain assets;
|
•
|
change our lines of business;
|
•
|
make investments, loans, or advances; and
|
•
|
engage in consolidations, mergers, liquidations, or dissolutions.
|
•
|
announcements by us or our competitors regarding, among other things, strategic changes, new products, product enhancements or technological advances, acquisitions, major transactions, stock repurchases, or management changes;
|
•
|
speculation in the press and the analyst community, including with respect to changes in recommendations or earnings estimates or growth rates by financial analysts, changes in investors' or analysts' valuation measures for our securities, our credit ratings, or market trends unrelated to our performance;
|
•
|
stock sales by our directors, officers, or other significant holders, or stock repurchases by us;
|
•
|
hedging or arbitrage trading activity by third parties, including by the counterparties to the note hedge and warrant transactions that we entered into in connection with the issuance of the Notes; and
|
•
|
dilution that may occur upon any conversion of the Notes.
|
|
|
Low
|
|
High
|
||||
Year Ended January 31, 2016:
|
|
|
|
|
||||
First quarter
|
|
$
|
52.79
|
|
|
$
|
64.78
|
|
Second quarter
|
|
$
|
57.05
|
|
|
$
|
66.45
|
|
Third quarter
|
|
$
|
40.90
|
|
|
$
|
59.69
|
|
Fourth quarter
|
|
$
|
35.61
|
|
|
$
|
49.70
|
|
|
|
|
|
|
||||
Year Ended January 31, 2017:
|
|
|
|
|
||||
First quarter
|
|
$
|
29.76
|
|
|
$
|
38.00
|
|
Second quarter
|
|
$
|
31.43
|
|
|
$
|
37.13
|
|
Third quarter
|
|
$
|
33.59
|
|
|
$
|
39.68
|
|
Fourth quarter
|
|
$
|
33.40
|
|
|
$
|
38.95
|
|
January 31,
|
|
2012
|
|
2013
|
|
2014
|
|
2015
|
|
2016
|
|
2017
|
||||||||||||
Verint Systems Inc.
|
|
$
|
100.00
|
|
|
$
|
119.52
|
|
|
$
|
160.68
|
|
|
$
|
188.76
|
|
|
$
|
129.46
|
|
|
$
|
132.07
|
|
NASDAQ Composite Index
|
|
$
|
100.00
|
|
|
$
|
113.43
|
|
|
$
|
151.83
|
|
|
$
|
173.28
|
|
|
$
|
173.18
|
|
|
$
|
211.73
|
|
NASDAQ Computer & Data Processing Index
|
|
$
|
100.00
|
|
|
$
|
108.33
|
|
|
$
|
159.33
|
|
|
$
|
166.04
|
|
|
$
|
201.99
|
|
|
$
|
238.65
|
|
Period
|
|
Total Number of Shares Purchased
|
|
Average Price Paid per Share (1)
|
|
Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs
|
|
Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs
(in thousands)
|
||||||
November 1, 2016 - November 30, 2016
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||
December 1, 2016 - December 31, 2016
|
|
306,452
|
|
|
$
|
35.89
|
|
|
306,452
|
|
|
$
|
103,130
|
|
January 1, 2017 - January 31, 2017
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||
Total
|
|
306,452
|
|
|
$
|
35.89
|
|
|
306,452
|
|
|
—
|
|
Consolidated Statements of Operations Data
|
||||||||||||||||||||
|
|
Year Ended January 31,
|
||||||||||||||||||
(in thousands, except per share data)
|
|
2017
|
|
2016
|
|
2015
|
|
2014
|
|
2013
|
||||||||||
Revenue
|
|
$
|
1,062,106
|
|
|
$
|
1,130,266
|
|
|
$
|
1,128,436
|
|
|
$
|
907,292
|
|
|
$
|
839,542
|
|
Operating income
|
|
$
|
17,366
|
|
|
$
|
67,852
|
|
|
$
|
79,111
|
|
|
$
|
122,286
|
|
|
$
|
99,553
|
|
Net (loss) income
|
|
$
|
(26,246
|
)
|
|
$
|
22,228
|
|
|
$
|
36,402
|
|
|
$
|
58,776
|
|
|
$
|
58,804
|
|
Net (loss) income attributable to Verint Systems Inc.
|
|
$
|
(29,380
|
)
|
|
$
|
17,638
|
|
|
$
|
30,931
|
|
|
$
|
53,757
|
|
|
$
|
54,002
|
|
Net (loss) income attributable to Verint Systems Inc. common shares
|
|
$
|
(29,380
|
)
|
|
$
|
17,638
|
|
|
$
|
30,931
|
|
|
$
|
53,583
|
|
|
$
|
38,530
|
|
Net (loss) income per share attributable to Verint Systems Inc.:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Basic
|
|
$
|
(0.47
|
)
|
|
$
|
0.29
|
|
|
$
|
0.53
|
|
|
$
|
1.01
|
|
|
$
|
0.97
|
|
Diluted
|
|
$
|
(0.47
|
)
|
|
$
|
0.28
|
|
|
$
|
0.52
|
|
|
$
|
0.99
|
|
|
$
|
0.96
|
|
Weighted-average shares:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Basic
|
|
62,593
|
|
|
61,813
|
|
|
58,096
|
|
|
52,967
|
|
|
39,748
|
|
|||||
Diluted
|
|
62,593
|
|
|
62,921
|
|
|
59,374
|
|
|
53,878
|
|
|
40,312
|
|
Consolidated Balance Sheet Data
|
||||||||||||||||||||
|
|
January 31,
|
||||||||||||||||||
(in thousands)
|
|
2017
|
|
2016
|
|
2015
|
|
2014
|
|
2013
|
||||||||||
Total assets
|
|
$
|
2,362,784
|
|
|
$
|
2,355,735
|
|
|
$
|
2,340,452
|
|
|
$
|
1,768,192
|
|
|
$
|
1,556,553
|
|
Long-term debt, including current maturities
|
|
$
|
748,871
|
|
|
$
|
738,087
|
|
|
$
|
726,258
|
|
|
$
|
637,670
|
|
|
$
|
568,973
|
|
Preferred stock
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
285,542
|
|
Total stockholders' equity
|
|
$
|
1,015,040
|
|
|
$
|
1,068,164
|
|
|
$
|
1,004,903
|
|
|
$
|
633,118
|
|
|
$
|
229,676
|
|
As of and for the year ended January 31,
|
|
|
Description
|
2017
|
|
•
|
Completion of the acquisitions of Contact Solutions LLC in February 2016 and OpinionLab, Inc. in November 2016.
|
|
|
|
|
2016
|
|
•
|
None
|
|
|
|
|
2015
|
|
•
|
Completion of the acquisitions of KANA Software, Inc. and its subsidiaries ("KANA") in February 2014 and UTX Technologies Limited ("UTX") in March 2014.
|
|
|
•
|
An income tax benefit of $44.4 million resulting from the reduction of a valuation allowance on our deferred income tax assets recorded in connection with the acquisition of KANA; and
|
|
|
•
|
Losses on early retirements of debt of $12.5 million, primarily associated with an amendment to our Credit Agreement and the early partial retirement of our term loans.
|
|
|
|
|
2014
|
|
•
|
Completion of the CTI Merger on February 4, 2013; and
|
|
|
•
|
Losses on early retirements of debt of $9.9 million, primarily associated with an amendment to our Credit Agreement.
|
|
|
|
|
2013
|
|
•
|
Professional fees and related expenses of $16.1 million associated with the CTI Merger.
|
•
|
Market acceptance of Actionable Intelligence solutions.
We compete in markets where the value of aspects of our products and solutions is still in the process of market acceptance. Our future growth depends in part on the continued and
|
•
|
Evolving technologies and market potential.
Our success depends in part on our ability to keep pace with technological changes, customer challenges, and evolving industry standards in our product offerings, successfully developing, launching, and driving demand for new, innovative, high-quality products and services that meet or exceed customer needs, and identifying, entering, and prioritizing areas of growing market potential, while migrating away from areas of commoditization. For example, in our Cyber Intelligence business, stronger and more frequent use of encryption has created significantly greater challenges for our customers and for our solutions to address. In our Customer Engagement business, we see increased interest in cloud-based solutions, as well as pricing pressure on legacy products.
|
•
|
Information technology and government spending.
Our growth and results depend in part on general economic conditions and the pace of information technology spending by both commercial and governmental customers. Beginning in the year ended January 31, 2016, we began experiencing extended sales cycles, particularly for large projects, a reduction in deal sizes, and pressure in certain areas of our legacy business. We have made adjustments in response to these market trends and believe that improvements in the economic environment and growing demand for our solutions will drive growth in both of our segments in the year ending January 31, 2018.
|
•
|
future expected cash flows from software license sales, support agreements, consulting contracts, other customer contracts, and acquired developed technologies;
|
•
|
expected costs to develop in-process research and development into commercially viable products and estimated cash flows from the projects when completed;
|
•
|
the acquired company’s brand and competitive position, as well as assumptions about the period of time the acquired brand will continue to be used in the combined company’s product portfolio;
|
•
|
cost of capital and discount rates; and
|
•
|
estimating the useful lives of acquired assets as well as the pattern or manner in which the assets will amortize.
|
|
|
Year Ended January 31,
|
||||||||||
(in thousands, except per share data)
|
|
2017
|
|
2016
|
|
2015
|
||||||
Revenue
|
|
$
|
1,062,106
|
|
|
$
|
1,130,266
|
|
|
$
|
1,128,436
|
|
Operating income
|
|
$
|
17,366
|
|
|
$
|
67,852
|
|
|
$
|
79,111
|
|
Net (loss) income attributable to Verint Systems Inc.
|
|
$
|
(29,380
|
)
|
|
$
|
17,638
|
|
|
$
|
30,931
|
|
Net (loss) income per common share attributable to Verint Systems Inc.:
|
|
|
|
|
|
|
|
|
||||
Basic
|
|
$
|
(0.47
|
)
|
|
$
|
0.29
|
|
|
$
|
0.53
|
|
Diluted
|
|
$
|
(0.47
|
)
|
|
$
|
0.28
|
|
|
$
|
0.52
|
|
|
|
Year Ended January 31,
|
|
% Change
|
||||||||||||
(in thousands)
|
|
2017
|
|
2016
|
|
2015
|
|
2017 - 2016
|
|
2016 - 2015
|
||||||
Customer Engagement
|
|
$
|
705,897
|
|
|
$
|
694,857
|
|
|
$
|
713,505
|
|
|
2%
|
|
(3)%
|
Cyber Intelligence
|
|
356,209
|
|
|
435,409
|
|
|
414,931
|
|
|
(18)%
|
|
5%
|
|||
Total revenue
|
|
$
|
1,062,106
|
|
|
$
|
1,130,266
|
|
|
$
|
1,128,436
|
|
|
(6)%
|
|
—%
|
|
|
Year Ended January 31,
|
|
% Change
|
||||||||||||
(in thousands)
|
|
2017
|
|
2016
|
|
2015
|
|
2017 - 2016
|
|
2016 - 2015
|
||||||
Product revenue
|
|
$
|
378,504
|
|
|
$
|
455,406
|
|
|
$
|
487,617
|
|
|
(17)%
|
|
(7)%
|
Service and support revenue
|
|
683,602
|
|
|
674,860
|
|
|
640,819
|
|
|
1%
|
|
5%
|
|||
Total revenue
|
|
$
|
1,062,106
|
|
|
$
|
1,130,266
|
|
|
$
|
1,128,436
|
|
|
(6)%
|
|
—%
|
|
|
Year Ended January 31,
|
|
% Change
|
||||||||||||
(in thousands)
|
|
2017
|
|
2016
|
|
2015
|
|
2017 - 2016
|
|
2016 - 2015
|
||||||
Cost of product revenue
|
|
$
|
123,279
|
|
|
$
|
145,071
|
|
|
$
|
144,870
|
|
|
(15)%
|
|
—%
|
Cost of service and support revenue
|
|
261,978
|
|
|
248,061
|
|
|
239,274
|
|
|
6%
|
|
4%
|
|||
Amortization of acquired technology and backlog
|
|
37,372
|
|
|
35,774
|
|
|
31,004
|
|
|
4%
|
|
15%
|
|||
Total cost of revenue
|
|
$
|
422,629
|
|
|
$
|
428,906
|
|
|
$
|
415,148
|
|
|
(1)%
|
|
3%
|
|
|
Year Ended January 31,
|
|
% Change
|
||||||||||||
(in thousands)
|
|
2017
|
|
2016
|
|
2015
|
|
2017 - 2016
|
|
2016 - 2015
|
||||||
Research and development, net
|
|
$
|
171,070
|
|
|
$
|
177,650
|
|
|
$
|
173,748
|
|
|
(4)%
|
|
2%
|
|
|
Year Ended January 31,
|
|
% Change
|
||||||||||||
(in thousands)
|
|
2017
|
|
2016
|
|
2015
|
|
2017 - 2016
|
|
2016 - 2015
|
||||||
Selling, general and administrative
|
|
$
|
406,952
|
|
|
$
|
412,728
|
|
|
$
|
415,266
|
|
|
(1)%
|
|
(1)%
|
•
|
$4.2 million decrease as a result of increased capitalized software development costs compared to the
year ended
January 31, 2016
;
|
•
|
$3.3 million decrease in employee compensation and related expenses due primarily to a decrease in headcount of general and administrative employees; and
|
•
|
$5.3 million decrease in agent commissions in our Cyber Intelligence segment.
|
•
|
$3.8 million decrease in sales commissions expense due primarily to decreased product bookings in our Customer Engagement segment;
|
•
|
$2.8 million decrease in employee compensation and related expenses due primarily to a decrease in headcount of general and administrative employees in our Customer Engagement segment;
|
•
|
$2.3 million decrease in accounting, legal, and other professional service fees primarily due to higher use of such services during the year ended January 31, 2015 as a result of services provided in connection with the KANA and UTX acquisitions;
|
•
|
$2.1 million decrease in travel expenses due primarily to decreased travel expenses in our Customer Engagement segment; and
|
•
|
$1.8 million decrease in selling, general, and administrative expenses resulting from the change in fair value of our obligations under contingent consideration arrangements from a $0.9 million net expense during the year ended January 31, 2015 to $0.9 million net benefit during the year ended January 31, 2016.
|
|
|
Year Ended January 31,
|
|
% Change
|
||||||||||||
(in thousands)
|
|
2017
|
|
2016
|
|
2015
|
|
2017 - 2016
|
|
2016 - 2015
|
||||||
Amortization of other acquired intangible assets
|
|
$
|
44,089
|
|
|
$
|
43,130
|
|
|
$
|
45,163
|
|
|
2%
|
|
(5)%
|
|
|
Year Ended January 31,
|
|
% Change
|
||||||||||||
(in thousands)
|
|
2017
|
|
2016
|
|
2015
|
|
2017 - 2016
|
|
2016 - 2015
|
||||||
Interest income
|
|
$
|
1,048
|
|
|
$
|
1,490
|
|
|
$
|
1,070
|
|
|
(30)%
|
|
39%
|
Interest expense
|
|
(34,962
|
)
|
|
(33,885
|
)
|
|
(36,661
|
)
|
|
3%
|
|
(8)%
|
|||
Losses on early retirements of debt
|
|
—
|
|
|
—
|
|
|
(12,546
|
)
|
|
—%
|
|
(100)%
|
|||
Other (expense) income:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
Foreign currency losses
|
|
(2,743
|
)
|
|
(8,037
|
)
|
|
(13,402
|
)
|
|
(66)%
|
|
(40)%
|
|||
(Losses) gains on derivatives
|
|
(322
|
)
|
|
394
|
|
|
3,986
|
|
|
*
|
|
*
|
|||
Other, net
|
|
(3,861
|
)
|
|
(4,634
|
)
|
|
(155
|
)
|
|
(17)%
|
|
*
|
|||
Total other expense
|
|
(6,926
|
)
|
|
(12,277
|
)
|
|
(9,571
|
)
|
|
(44)%
|
|
28%
|
|||
Total other expense, net
|
|
$
|
(40,840
|
)
|
|
$
|
(44,672
|
)
|
|
$
|
(57,708
|
)
|
|
(9)%
|
|
(23)%
|
|
|
Year Ended January 31,
|
|
% Change
|
||||||||||||
(in thousands)
|
|
2017
|
|
2016
|
|
2015
|
|
2017 - 2016
|
|
2016 - 2015
|
||||||
Provision (benefit) for income taxes
|
|
$
|
2,772
|
|
|
$
|
952
|
|
|
$
|
(14,999
|
)
|
|
*
|
|
*
|
|
|
January 31,
|
||||||
(in thousands)
|
|
2017
|
|
2016
|
||||
Cash and cash equivalents
|
|
$
|
307,363
|
|
|
$
|
352,105
|
|
Restricted cash and bank time deposits (excluding long term portions)
|
|
9,198
|
|
|
11,820
|
|
||
Short-term investments
|
|
3,184
|
|
|
55,982
|
|
||
Total cash, cash equivalents, restricted cash and bank time deposits, and short-term investments
|
|
$
|
319,745
|
|
|
$
|
419,907
|
|
Total debt, including current maturities
|
|
$
|
748,871
|
|
|
$
|
738,087
|
|
|
|
Year Ended January 31,
|
||||||||||
(in thousands)
|
|
2017
|
|
2016
|
|
2015
|
||||||
Net cash provided by operating activities
|
|
$
|
172,415
|
|
|
$
|
156,903
|
|
|
$
|
193,725
|
|
Net cash used in investing activities
|
|
(156,028
|
)
|
|
(75,600
|
)
|
|
(676,835
|
)
|
|||
Net cash (used in) provided by financing activities
|
|
(56,919
|
)
|
|
(10,204
|
)
|
|
395,713
|
|
|||
Effect of exchange rate changes on cash and cash equivalents
|
|
(4,210
|
)
|
|
(4,066
|
)
|
|
(6,149
|
)
|
|||
Net (decrease) increase in cash and cash equivalents
|
|
$
|
(44,742
|
)
|
|
$
|
67,033
|
|
|
$
|
(93,546
|
)
|
•
|
during any calendar quarter commencing after the calendar quarter ending on September 30, 2014, if the closing sale price of our common stock, for at least 20 trading days (whether or not consecutive) in the period of 30 consecutive trading days ending on the last trading day of the immediately preceding calendar quarter, is more than 130% of the conversion price of the Notes in effect on each applicable trading day;
|
•
|
during the ten consecutive trading-day period following any five consecutive trading-day period in which the trading price for the Notes for each such trading day was less than 98% of the closing sale price of our common stock on such date multiplied by the then-current conversion rate; or
|
•
|
upon the occurrence of specified corporate events, as described in the indenture governing the Notes, such as a consolidation, merger, or binding share exchange.
|
|
|
Payments Due by Period
|
||||||||||||||||||
(in thousands)
|
|
Total
|
|
< 1 year
|
|
1-3 years
|
|
3-5 years
|
|
> 5 years
|
||||||||||
Long-term debt obligations, including interest
|
|
$
|
878,545
|
|
|
$
|
25,282
|
|
|
$
|
444,263
|
|
|
$
|
409,000
|
|
|
$
|
—
|
|
Operating lease obligations
|
|
154,190
|
|
|
25,447
|
|
|
42,003
|
|
|
29,795
|
|
|
56,945
|
|
|||||
Purchase obligations
|
|
83,560
|
|
|
73,839
|
|
|
9,655
|
|
|
66
|
|
|
—
|
|
|||||
Other long-term obligations
|
|
1,333
|
|
|
448
|
|
|
646
|
|
|
94
|
|
|
145
|
|
|||||
Total contractual obligations
|
|
$
|
1,117,628
|
|
|
$
|
125,016
|
|
|
$
|
496,567
|
|
|
$
|
438,955
|
|
|
$
|
57,090
|
|
VERINT SYSTEMS INC. AND SUBSIDIARIES
|
|
Index to Consolidated Financial Statements
|
|
|
|
|
Page
|
|
|
|
|
January 31,
|
||||||
(in thousands, except share and per share data)
|
|
2017
|
|
2016
|
||||
Assets
|
|
|
|
|
|
|
||
Current Assets:
|
|
|
|
|
|
|
||
Cash and cash equivalents
|
|
$
|
307,363
|
|
|
$
|
352,105
|
|
Restricted cash and bank time deposits
|
|
9,198
|
|
|
11,820
|
|
||
Short-term investments
|
|
3,184
|
|
|
55,982
|
|
||
Accounts receivable, net of allowance for doubtful accounts of $1.8 million and $1.2 million, respectively
|
|
266,590
|
|
|
256,419
|
|
||
Inventories
|
|
17,537
|
|
|
18,312
|
|
||
Deferred cost of revenue
|
|
3,621
|
|
|
1,876
|
|
||
Prepaid expenses and other current assets
|
|
64,561
|
|
|
57,598
|
|
||
Total current assets
|
|
672,054
|
|
|
754,112
|
|
||
Property and equipment, net
|
|
77,551
|
|
|
68,904
|
|
||
Goodwill
|
|
1,264,818
|
|
|
1,207,176
|
|
||
Intangible assets, net
|
|
235,259
|
|
|
246,682
|
|
||
Capitalized software development costs, net
|
|
9,509
|
|
|
11,992
|
|
||
Long-term deferred cost of revenue
|
|
5,463
|
|
|
13,117
|
|
||
Deferred income taxes
|
|
21,510
|
|
|
17,528
|
|
||
Other assets
|
|
76,620
|
|
|
36,224
|
|
||
Total assets
|
|
$
|
2,362,784
|
|
|
$
|
2,355,735
|
|
|
|
|
|
|
|
|
||
Liabilities and Stockholders' Equity
|
|
|
|
|
|
|
||
Current Liabilities:
|
|
|
|
|
|
|
||
Accounts payable
|
|
$
|
62,049
|
|
|
$
|
65,447
|
|
Accrued expenses and other current liabilities
|
|
213,224
|
|
|
206,967
|
|
||
Current maturities of long-term debt
|
|
4,611
|
|
|
2,104
|
|
||
Deferred revenue
|
|
182,515
|
|
|
167,912
|
|
||
Total current liabilities
|
|
462,399
|
|
|
442,430
|
|
||
Long-term debt
|
|
744,260
|
|
|
735,983
|
|
||
Long-term deferred revenue
|
|
20,912
|
|
|
20,488
|
|
||
Deferred income taxes
|
|
25,814
|
|
|
27,042
|
|
||
Other liabilities
|
|
94,359
|
|
|
61,628
|
|
||
Total liabilities
|
|
1,347,744
|
|
|
1,287,571
|
|
||
Commitments and Contingencies
|
|
|
|
|
|
|
||
Stockholders' Equity:
|
|
|
|
|
|
|
||
Preferred stock - $0.001 par value; authorized 2,207,000 shares at January 31, 2017 and 2016, respectively; none issued.
|
|
—
|
|
|
—
|
|
||
Common stock - $0.001 par value; authorized 120,000,000 shares. Issued 64,073,000 and 62,614,000 shares; outstanding 62,419,000 and 62,266,000 shares at January 31, 2017 and 2016, respectively.
|
|
64
|
|
|
63
|
|
||
Additional paid-in capital
|
|
1,449,335
|
|
|
1,387,955
|
|
||
Treasury stock, at cost - 1,654,000 and 348,000 shares at January 31, 2017 and 2016, respectively.
|
|
(57,147
|
)
|
|
(10,251
|
)
|
||
Accumulated deficit
|
|
(230,816
|
)
|
|
(201,436
|
)
|
||
Accumulated other comprehensive loss
|
|
(154,856
|
)
|
|
(116,194
|
)
|
||
Total Verint Systems Inc. stockholders' equity
|
|
1,006,580
|
|
|
1,060,137
|
|
||
Noncontrolling interest
|
|
8,460
|
|
|
8,027
|
|
||
Total stockholders' equity
|
|
1,015,040
|
|
|
1,068,164
|
|
||
Total liabilities and stockholders' equity
|
|
$
|
2,362,784
|
|
|
$
|
2,355,735
|
|
|
|
Year Ended January 31,
|
||||||||||
(in thousands, except per share data)
|
|
2017
|
|
2016
|
|
2015
|
||||||
Revenue:
|
|
|
|
|
|
|
|
|
||||
Product
|
|
$
|
378,504
|
|
|
$
|
455,406
|
|
|
$
|
487,617
|
|
Service and support
|
|
683,602
|
|
|
674,860
|
|
|
640,819
|
|
|||
Total revenue
|
|
1,062,106
|
|
|
1,130,266
|
|
|
1,128,436
|
|
|||
Cost of revenue:
|
|
|
|
|
|
|
|
|
|
|||
Product
|
|
123,279
|
|
|
145,071
|
|
|
144,870
|
|
|||
Service and support
|
|
261,978
|
|
|
248,061
|
|
|
239,274
|
|
|||
Amortization of acquired technology and backlog
|
|
37,372
|
|
|
35,774
|
|
|
31,004
|
|
|||
Total cost of revenue
|
|
422,629
|
|
|
428,906
|
|
|
415,148
|
|
|||
Gross profit
|
|
639,477
|
|
|
701,360
|
|
|
713,288
|
|
|||
Operating expenses:
|
|
|
|
|
|
|
|
|
|
|||
Research and development, net
|
|
171,070
|
|
|
177,650
|
|
|
173,748
|
|
|||
Selling, general and administrative
|
|
406,952
|
|
|
412,728
|
|
|
415,266
|
|
|||
Amortization of other acquired intangible assets
|
|
44,089
|
|
|
43,130
|
|
|
45,163
|
|
|||
Total operating expenses
|
|
622,111
|
|
|
633,508
|
|
|
634,177
|
|
|||
Operating income
|
|
17,366
|
|
|
67,852
|
|
|
79,111
|
|
|||
Other income (expense), net:
|
|
|
|
|
|
|
|
|
|
|||
Interest income
|
|
1,048
|
|
|
1,490
|
|
|
1,070
|
|
|||
Interest expense
|
|
(34,962
|
)
|
|
(33,885
|
)
|
|
(36,661
|
)
|
|||
Losses on early retirements of debt
|
|
—
|
|
|
—
|
|
|
(12,546
|
)
|
|||
Other expense, net
|
|
(6,926
|
)
|
|
(12,277
|
)
|
|
(9,571
|
)
|
|||
Total other expense, net
|
|
(40,840
|
)
|
|
(44,672
|
)
|
|
(57,708
|
)
|
|||
(Loss) income before provision (benefit) for income taxes
|
|
(23,474
|
)
|
|
23,180
|
|
|
21,403
|
|
|||
Provision (benefit) for income taxes
|
|
2,772
|
|
|
952
|
|
|
(14,999
|
)
|
|||
Net (loss) income
|
|
(26,246
|
)
|
|
22,228
|
|
|
36,402
|
|
|||
Net income attributable to noncontrolling interest
|
|
3,134
|
|
|
4,590
|
|
|
5,471
|
|
|||
Net (loss) income attributable to Verint Systems Inc.
|
|
$
|
(29,380
|
)
|
|
$
|
17,638
|
|
|
$
|
30,931
|
|
|
|
|
|
|
|
|
||||||
Net (loss) income per common share attributable to Verint Systems Inc.:
|
|
|
|
|
|
|
|
|
|
|||
Basic
|
|
$
|
(0.47
|
)
|
|
$
|
0.29
|
|
|
$
|
0.53
|
|
Diluted
|
|
$
|
(0.47
|
)
|
|
$
|
0.28
|
|
|
$
|
0.52
|
|
|
|
|
|
|
|
|
||||||
Weighted-average common shares outstanding:
|
|
|
|
|
|
|
|
|
|
|||
Basic
|
|
62,593
|
|
|
61,813
|
|
|
58,096
|
|
|||
Diluted
|
|
62,593
|
|
|
62,921
|
|
|
59,374
|
|
|
|
Year Ended January 31,
|
||||||||||
(in thousands)
|
|
2017
|
|
2016
|
|
2015
|
||||||
Net (loss) income
|
|
$
|
(26,246
|
)
|
|
$
|
22,228
|
|
|
$
|
36,402
|
|
Other comprehensive loss, net of reclassification adjustments:
|
|
|
|
|
|
|
|
|
|
|||
Foreign currency translation adjustments
|
|
(42,130
|
)
|
|
(28,180
|
)
|
|
(45,600
|
)
|
|||
Net unrealized gains (losses) on available-for-sale securities
|
|
110
|
|
|
(211
|
)
|
|
92
|
|
|||
Net unrealized gains (losses) on derivative financial instruments designated as hedges
|
|
2,750
|
|
|
6,919
|
|
|
(10,547
|
)
|
|||
Net unrealized gains on interest rate swap designated as a hedge
|
|
1,021
|
|
|
—
|
|
|
—
|
|
|||
(Provision) benefit for income taxes on net unrealized gains (losses) on derivative financial instruments and interest rate swap designated as hedges
|
|
(693
|
)
|
|
(798
|
)
|
|
1,070
|
|
|||
Other comprehensive loss
|
|
(38,942
|
)
|
|
(22,270
|
)
|
|
(54,985
|
)
|
|||
Comprehensive loss
|
|
(65,188
|
)
|
|
(42
|
)
|
|
(18,583
|
)
|
|||
Comprehensive income attributable to noncontrolling interest
|
|
2,854
|
|
|
4,179
|
|
|
5,096
|
|
|||
Comprehensive loss attributable to Verint Systems Inc.
|
|
$
|
(68,042
|
)
|
|
$
|
(4,221
|
)
|
|
$
|
(23,679
|
)
|
|
|
Verint Systems Inc. Stockholders’ Equity
|
|
|
|
|
|||||||||||||||||||||||||||||
|
|
Common Stock
|
|
Additional Paid-in Capital
|
|
|
|
|
|
Accumulated Other
Comprehensive
Loss
|
|
Total Verint Systems Inc. Stockholders' Equity
|
|
|
|
Total Stockholders' Equity
|
|||||||||||||||||||
(in thousands)
|
|
Shares
|
|
Par
Value
|
|
|
Treasury
Stock
|
|
Accumulated
Deficit
|
|
|
|
Non-controlling
Interest
|
|
|||||||||||||||||||||
Balances as of January 31, 2014
|
|
53,605
|
|
|
$
|
54
|
|
|
$
|
924,663
|
|
|
$
|
(8,013
|
)
|
|
$
|
(250,005
|
)
|
|
$
|
(39,725
|
)
|
|
$
|
626,974
|
|
|
$
|
6,144
|
|
|
$
|
633,118
|
|
Net income
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
30,931
|
|
|
—
|
|
|
30,931
|
|
|
5,471
|
|
|
36,402
|
|
||||||||
Other comprehensive loss
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(54,610
|
)
|
|
(54,610
|
)
|
|
(375
|
)
|
|
(54,985
|
)
|
||||||||
Common stock issued in public offering, net of issuance costs
|
|
5,750
|
|
|
6
|
|
|
264,927
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
264,933
|
|
|
—
|
|
|
264,933
|
|
||||||||
Equity component of convertible notes, net of issuance costs
|
|
—
|
|
|
—
|
|
|
78,209
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
78,209
|
|
|
—
|
|
|
78,209
|
|
||||||||
Purchase of convertible note hedges
|
|
—
|
|
|
—
|
|
|
(60,800
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(60,800
|
)
|
|
—
|
|
|
(60,800
|
)
|
||||||||
Issuance of warrants
|
|
—
|
|
|
—
|
|
|
45,188
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
45,188
|
|
|
—
|
|
|
45,188
|
|
||||||||
Stock-based compensation - equity portion
|
|
—
|
|
|
—
|
|
|
46,963
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
46,963
|
|
|
—
|
|
|
46,963
|
|
||||||||
Exercises of stock options
|
|
505
|
|
|
—
|
|
|
17,520
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
17,520
|
|
|
—
|
|
|
17,520
|
|
||||||||
Common stock issued for stock awards and stock bonuses
|
|
1,091
|
|
|
1
|
|
|
4,531
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
4,532
|
|
|
—
|
|
|
4,532
|
|
||||||||
Purchases of treasury stock
|
|
(46
|
)
|
|
—
|
|
|
—
|
|
|
(2,238
|
)
|
|
—
|
|
|
—
|
|
|
(2,238
|
)
|
|
—
|
|
|
(2,238
|
)
|
||||||||
Dividends to noncontrolling interest
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(4,193
|
)
|
|
(4,193
|
)
|
||||||||
Tax effects from stock award plans
|
|
—
|
|
|
—
|
|
|
254
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
254
|
|
|
—
|
|
|
254
|
|
||||||||
Balances as of January 31, 2015
|
|
60,905
|
|
|
61
|
|
|
1,321,455
|
|
|
(10,251
|
)
|
|
(219,074
|
)
|
|
(94,335
|
)
|
|
997,856
|
|
|
7,047
|
|
|
1,004,903
|
|
||||||||
Net income
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
17,638
|
|
|
—
|
|
|
17,638
|
|
|
4,590
|
|
|
22,228
|
|
||||||||
Other comprehensive loss
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(21,859
|
)
|
|
(21,859
|
)
|
|
(411
|
)
|
|
(22,270
|
)
|
||||||||
Stock-based compensation - equity portion
|
|
—
|
|
|
—
|
|
|
58,028
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
58,028
|
|
|
—
|
|
|
58,028
|
|
||||||||
Exercises of stock options
|
|
6
|
|
|
—
|
|
|
232
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
232
|
|
|
—
|
|
|
232
|
|
||||||||
Common stock issued for stock awards and stock bonuses
|
|
1,355
|
|
|
2
|
|
|
7,743
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
7,745
|
|
|
—
|
|
|
7,745
|
|
||||||||
Dividends to noncontrolling interest
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(3,199
|
)
|
|
(3,199
|
)
|
||||||||
Tax effects from stock award plans
|
|
—
|
|
|
—
|
|
|
497
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
497
|
|
|
—
|
|
|
497
|
|
||||||||
Balances as of January 31, 2016
|
|
62,266
|
|
|
63
|
|
|
1,387,955
|
|
|
(10,251
|
)
|
|
(201,436
|
)
|
|
(116,194
|
)
|
|
1,060,137
|
|
|
8,027
|
|
|
1,068,164
|
|
||||||||
Net (loss) income
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(29,380
|
)
|
|
—
|
|
|
(29,380
|
)
|
|
3,134
|
|
|
(26,246
|
)
|
||||||||
Other comprehensive loss
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(38,662
|
)
|
|
(38,662
|
)
|
|
(280
|
)
|
|
(38,942
|
)
|
||||||||
Stock-based compensation - equity portion
|
|
—
|
|
|
—
|
|
|
55,123
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
55,123
|
|
|
—
|
|
|
55,123
|
|
||||||||
Exercises of stock options
|
|
1
|
|
|
—
|
|
|
7
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
7
|
|
|
—
|
|
|
7
|
|
||||||||
Common stock issued for stock awards and stock bonuses
|
|
1,458
|
|
|
1
|
|
|
6,952
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
6,953
|
|
|
—
|
|
|
6,953
|
|
||||||||
Purchases of treasury stock
|
|
(1,306
|
)
|
|
—
|
|
|
—
|
|
|
(46,896
|
)
|
|
—
|
|
|
—
|
|
|
(46,896
|
)
|
|
—
|
|
|
(46,896
|
)
|
||||||||
Dividends to noncontrolling interest
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(2,421
|
)
|
|
(2,421
|
)
|
||||||||
Tax effects from stock award plans
|
|
—
|
|
|
—
|
|
|
(702
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(702
|
)
|
|
—
|
|
|
(702
|
)
|
||||||||
Balances as of January 31, 2017
|
|
62,419
|
|
|
$
|
64
|
|
|
$
|
1,449,335
|
|
|
$
|
(57,147
|
)
|
|
$
|
(230,816
|
)
|
|
$
|
(154,856
|
)
|
|
$
|
1,006,580
|
|
|
$
|
8,460
|
|
|
$
|
1,015,040
|
|
|
|
Year Ended January 31,
|
||||||||||
(in thousands)
|
|
2017
|
|
2016
|
|
2015
|
||||||
Cash flows from operating activities:
|
|
|
|
|
|
|
|
|
||||
Net (loss) income
|
|
$
|
(26,246
|
)
|
|
$
|
22,228
|
|
|
$
|
36,402
|
|
Adjustments to reconcile net (loss) income to net cash provided by operating activities:
|
|
|
|
|
|
|
|
|
|
|||
Depreciation and amortization
|
|
114,257
|
|
|
106,300
|
|
|
99,464
|
|
|||
Provision for doubtful accounts
|
|
1,791
|
|
|
669
|
|
|
423
|
|
|||
Stock-based compensation, excluding cash-settled awards
|
|
65,421
|
|
|
64,387
|
|
|
54,314
|
|
|||
Amortization of discount on convertible notes
|
|
10,668
|
|
|
10,123
|
|
|
6,014
|
|
|||
Benefit for deferred income taxes
|
|
(16,941
|
)
|
|
(5,640
|
)
|
|
(47,331
|
)
|
|||
Excess tax benefits from stock award plans
|
|
(6
|
)
|
|
(523
|
)
|
|
(298
|
)
|
|||
Non-cash losses (gains) on derivative financial instruments, net
|
|
323
|
|
|
(394
|
)
|
|
(3,986
|
)
|
|||
Losses on early retirements of debt
|
|
—
|
|
|
—
|
|
|
12,546
|
|
|||
Other non-cash items, net
|
|
7,666
|
|
|
12,343
|
|
|
8,928
|
|
|||
Changes in operating assets and liabilities, net of effects of business combinations:
|
|
|
|
|
|
|
|
|
|
|||
Accounts receivable
|
|
(353
|
)
|
|
3,433
|
|
|
(54,921
|
)
|
|||
Inventories
|
|
(286
|
)
|
|
(3,258
|
)
|
|
(4,223
|
)
|
|||
Deferred cost of revenue
|
|
7,124
|
|
|
6,187
|
|
|
(677
|
)
|
|||
Prepaid expenses and other assets
|
|
4,941
|
|
|
(2,886
|
)
|
|
21,412
|
|
|||
Accounts payable and accrued expenses
|
|
(9,521
|
)
|
|
(15,260
|
)
|
|
33,412
|
|
|||
Deferred revenue
|
|
8,705
|
|
|
(12,364
|
)
|
|
24,057
|
|
|||
Other liabilities
|
|
4,987
|
|
|
(28,515
|
)
|
|
8,356
|
|
|||
Other, net
|
|
(115
|
)
|
|
73
|
|
|
(167
|
)
|
|||
Net cash provided by operating activities
|
|
172,415
|
|
|
156,903
|
|
|
193,725
|
|
|||
|
|
|
|
|
|
|
||||||
Cash flows from investing activities:
|
|
|
|
|
|
|
|
|
||||
Cash paid for business combinations, including adjustments, net of cash acquired
|
|
(141,803
|
)
|
|
(31,358
|
)
|
|
(605,279
|
)
|
|||
Purchases of property and equipment
|
|
(27,540
|
)
|
|
(25,265
|
)
|
|
(23,134
|
)
|
|||
Purchases of investments
|
|
(36,761
|
)
|
|
(92,808
|
)
|
|
(21,175
|
)
|
|||
Maturities and sales of investments
|
|
89,342
|
|
|
71,457
|
|
|
13,653
|
|
|||
Settlements of derivative financial instruments not designated as hedges
|
|
(349
|
)
|
|
766
|
|
|
3,858
|
|
|||
Cash paid for capitalized software development costs
|
|
(2,338
|
)
|
|
(5,027
|
)
|
|
(6,083
|
)
|
|||
Change in restricted cash and bank time deposits, including long-term portion
|
|
(36,579
|
)
|
|
11,133
|
|
|
(36,291
|
)
|
|||
Other investing activities
|
|
—
|
|
|
(4,498
|
)
|
|
(2,384
|
)
|
|||
Net cash used in investing activities
|
|
(156,028
|
)
|
|
(75,600
|
)
|
|
(676,835
|
)
|
|||
|
|
|
|
|
|
|
||||||
Cash flows from financing activities:
|
|
|
|
|
|
|
|
|
||||
Proceeds from borrowings, net of original issuance discount
|
|
—
|
|
|
—
|
|
|
1,526,750
|
|
|||
Repayments of borrowings and other financing obligations
|
|
(3,308
|
)
|
|
(309
|
)
|
|
(1,361,852
|
)
|
|||
Proceeds from public issuance of common stock
|
|
—
|
|
|
—
|
|
|
274,563
|
|
|||
Proceeds from issuance of warrants
|
|
—
|
|
|
—
|
|
|
45,188
|
|
|||
Payments for convertible note hedges
|
|
—
|
|
|
—
|
|
|
(60,800
|
)
|
|||
Payments of equity issuance, debt issuance and other debt-related costs
|
|
(249
|
)
|
|
(239
|
)
|
|
(29,164
|
)
|
|||
Proceeds from exercises of stock options
|
|
7
|
|
|
232
|
|
|
17,606
|
|
|||
Dividends paid to noncontrolling interest
|
|
(2,421
|
)
|
|
(3,199
|
)
|
|
(4,193
|
)
|
|||
Purchases of treasury stock
|
|
(46,896
|
)
|
|
—
|
|
|
(2,238
|
)
|
|||
Excess tax benefits from stock award plans
|
|
6
|
|
|
523
|
|
|
298
|
|
|||
Payments of contingent consideration for business combinations (financing portion) and other financing activities
|
|
(4,058
|
)
|
|
(7,212
|
)
|
|
(10,445
|
)
|
|||
Net cash (used in) provided by financing activities
|
|
(56,919
|
)
|
|
(10,204
|
)
|
|
395,713
|
|
|||
Effect of exchange rate changes on cash and cash equivalents
|
|
(4,210
|
)
|
|
(4,066
|
)
|
|
(6,149
|
)
|
|||
Net (decrease) increase in cash and cash equivalents
|
|
(44,742
|
)
|
|
67,033
|
|
|
(93,546
|
)
|
|||
Cash and cash equivalents, beginning of year
|
|
352,105
|
|
|
285,072
|
|
|
378,618
|
|
|||
Cash and cash equivalents, end of year
|
|
$
|
307,363
|
|
|
$
|
352,105
|
|
|
$
|
285,072
|
|
1.
|
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
|
|
|
Year Ended January 31,
|
||||||||||
(in thousands)
|
|
2017
|
|
2016
|
|
2015
|
||||||
Allowance for doubtful accounts, beginning of year
|
|
$
|
1,170
|
|
|
$
|
1,099
|
|
|
$
|
1,187
|
|
Provisions charged to expense
|
|
1,791
|
|
|
669
|
|
|
423
|
|
|||
Amounts written off
|
|
(1,484
|
)
|
|
(933
|
)
|
|
(461
|
)
|
|||
Other, including fluctuations in foreign exchange rates
|
|
365
|
|
|
335
|
|
|
(50
|
)
|
|||
Allowance for doubtful accounts, end of year
|
|
$
|
1,842
|
|
|
$
|
1,170
|
|
|
$
|
1,099
|
|
•
|
Level 1: quoted prices in active markets for identical assets or liabilities;
|
•
|
Level 2: inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices in active markets for similar assets or liabilities, quoted prices for identical or similar assets or liabilities in markets that are not
|
•
|
Level 3: unobservable inputs that are supported by little or no market activity.
|
2.
|
NET (LOSS) INCOME PER COMMON SHARE ATTRIBUTABLE TO VERINT SYSTEMS INC.
|
|
|
Year Ended January 31,
|
||||||||||
(in thousands, except per share amounts)
|
|
2017
|
|
2016
|
|
2015
|
||||||
Net (loss) income
|
|
$
|
(26,246
|
)
|
|
$
|
22,228
|
|
|
$
|
36,402
|
|
Net income attributable to noncontrolling interest
|
|
3,134
|
|
|
4,590
|
|
|
5,471
|
|
|||
Net (loss) income attributable to Verint Systems Inc.
|
|
$
|
(29,380
|
)
|
|
$
|
17,638
|
|
|
$
|
30,931
|
|
Weighted-average shares outstanding:
|
|
|
|
|
|
|
|
|
|
|||
Basic
|
|
62,593
|
|
|
61,813
|
|
|
58,096
|
|
|||
Dilutive effect of employee equity award plans
|
|
—
|
|
|
1,108
|
|
|
1,278
|
|
|||
Dilutive effect of 1.50% convertible senior notes
|
|
—
|
|
|
—
|
|
|
—
|
|
|||
Dilutive effect of warrants
|
|
—
|
|
|
—
|
|
|
—
|
|
|||
Diluted
|
|
62,593
|
|
|
62,921
|
|
|
59,374
|
|
|||
Net (loss) income per common share attributable to Verint Systems Inc.:
|
|
|
|
|
|
|
|
|
|
|||
Basic
|
|
$
|
(0.47
|
)
|
|
$
|
0.29
|
|
|
$
|
0.53
|
|
Diluted
|
|
$
|
(0.47
|
)
|
|
$
|
0.28
|
|
|
$
|
0.52
|
|
|
|
Year Ended January 31,
|
|||||||
(in thousands)
|
|
2017
|
|
2016
|
|
2015
|
|||
Stock options and restricted stock-based awards
|
|
1,097
|
|
|
596
|
|
|
226
|
|
1.50% convertible senior notes
|
|
6,205
|
|
|
6,205
|
|
|
3,876
|
|
Warrants
|
|
6,205
|
|
|
6,205
|
|
|
3,876
|
|
|
|
January 31, 2017
|
||||||||||||||
(in thousands)
|
|
Cost Basis
|
|
Gross Unrealized Gains
|
|
Gross Unrealized Losses
|
|
Estimated Fair Value
|
||||||||
Cash and cash equivalents:
|
|
|
|
|
|
|
|
|
||||||||
Cash and bank time deposits
|
|
$
|
307,188
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
307,188
|
|
Money market funds
|
|
175
|
|
|
—
|
|
|
—
|
|
|
175
|
|
||||
Total cash and cash equivalents
|
|
$
|
307,363
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
307,363
|
|
|
|
|
|
|
|
|
|
|
||||||||
Short-term investments:
|
|
|
|
|
|
|
|
|
||||||||
Bank time deposits
|
|
$
|
3,184
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
3,184
|
|
Total short-term investments
|
|
$
|
3,184
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
3,184
|
|
|
|
January 31, 2016
|
||||||||||||||
(in thousands)
|
|
Cost Basis
|
|
Gross Unrealized Gains
|
|
Gross Unrealized Losses
|
|
Estimated Fair Value
|
||||||||
Cash and cash equivalents:
|
|
|
|
|
|
|
|
|
||||||||
Cash and bank time deposits
|
|
$
|
334,938
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
334,938
|
|
Money market funds
|
|
12,137
|
|
|
—
|
|
|
—
|
|
|
12,137
|
|
||||
Commercial paper and corporate debt securities
|
|
5,054
|
|
|
—
|
|
|
(24
|
)
|
|
5,030
|
|
||||
Total cash and cash equivalents
|
|
$
|
352,129
|
|
|
$
|
—
|
|
|
$
|
(24
|
)
|
|
$
|
352,105
|
|
|
|
|
|
|
|
|
|
|
||||||||
Short-term investments:
|
|
|
|
|
|
|
|
|
||||||||
Commercial paper and corporate debt securities (available-for-sale)
|
|
$
|
53,018
|
|
|
$
|
—
|
|
|
$
|
(86
|
)
|
|
$
|
52,932
|
|
Bank time deposits
|
|
3,050
|
|
|
—
|
|
|
—
|
|
|
3,050
|
|
||||
Total short-term investments
|
|
$
|
56,068
|
|
|
$
|
—
|
|
|
$
|
(86
|
)
|
|
$
|
55,982
|
|
4.
|
BUSINESS COMBINATIONS
|
(in thousands)
|
|
Contact Solutions
|
|
OpinionLab
|
||||
Components of Purchase Price:
|
|
|
|
|
|
|||
Cash paid at closing
|
|
$
|
66,915
|
|
|
$
|
56,355
|
|
Fair value of contingent consideration
|
|
—
|
|
|
15,000
|
|
||
Other purchase price adjustments
|
|
2,518
|
|
|
—
|
|
||
Total purchase price
|
|
$
|
69,433
|
|
|
$
|
71,355
|
|
|
|
|
|
|
||||
Allocation of Purchase Price:
|
|
|
|
|
|
|||
Net tangible assets (liabilities):
|
|
|
|
|
|
|||
Accounts receivable
|
|
$
|
8,102
|
|
|
$
|
748
|
|
Other current assets, including cash acquired
|
|
2,392
|
|
|
10,625
|
|
||
Property and equipment, net
|
|
7,007
|
|
|
298
|
|
||
Other assets
|
|
1,904
|
|
|
2,036
|
|
||
Current and other liabilities
|
|
(4,943
|
)
|
|
(1,600
|
)
|
||
Deferred revenue - current and long-term
|
|
(642
|
)
|
|
(3,082
|
)
|
||
Deferred Income Taxes - current and long-term
|
|
—
|
|
|
(9,995
|
)
|
||
Net tangible assets (liabilities)
|
|
13,820
|
|
|
(970
|
)
|
||
Identifiable intangible assets:
|
|
|
|
|
|
|||
Customer relationships
|
|
18,000
|
|
|
19,100
|
|
||
Developed technology
|
|
13,100
|
|
|
10,400
|
|
||
Trademarks and trade names
|
|
2,400
|
|
|
1,800
|
|
||
Total identifiable intangible assets
|
|
33,500
|
|
|
31,300
|
|
||
Goodwill
|
|
22,113
|
|
|
41,025
|
|
||
Total purchase price allocation
|
|
$
|
69,433
|
|
|
$
|
71,355
|
|
•
|
On February 12, 2015, we completed the acquisition of a business that has been integrated into our Customer Engagement operating segment.
|
•
|
On May 1, 2015, we completed the acquisition of a business that has been integrated into our Cyber Intelligence operating segment.
|
•
|
On August 11, 2015, we acquired certain technology and other assets for use in our Customer Engagement operating segment in a transaction that qualified as a business combination.
|
(in thousands)
|
|
Amount
|
||
Components of Purchase Prices:
|
|
|
|
|
Cash
|
|
$
|
33,222
|
|
Fair value of contingent consideration
|
|
16,237
|
|
|
Total purchase prices
|
|
$
|
49,459
|
|
|
|
|
||
Allocation of Purchase Prices:
|
|
|
|
|
Net tangible assets (liabilities):
|
|
|
|
|
Accounts receivable
|
|
$
|
992
|
|
Other current assets, including cash acquired
|
|
4,274
|
|
|
Other assets
|
|
395
|
|
|
Current and other liabilities
|
|
(3,037
|
)
|
|
Deferred revenue - current and long-term
|
|
(1,872
|
)
|
|
Deferred income taxes - current and long-term
|
|
(2,922
|
)
|
|
Net tangible liabilities
|
|
(2,170
|
)
|
|
Identifiable intangible assets:
|
|
|
|
|
Customer relationships
|
|
1,212
|
|
|
Developed technology
|
|
20,300
|
|
|
Trademarks and trade names
|
|
300
|
|
|
In-process research and development
|
|
1,100
|
|
|
Total identifiable intangible assets
|
|
22,912
|
|
|
Goodwill
|
|
28,717
|
|
|
Total purchase price allocations
|
|
$
|
49,459
|
|
(in thousands)
|
|
KANA
|
|
UTX
|
||||
Components of Purchase Prices:
|
|
|
|
|
|
|||
Cash, including post-closing adjustments
|
|
$
|
541,685
|
|
|
$
|
82,901
|
|
Fair value of contingent consideration
|
|
—
|
|
|
1,347
|
|
||
Total purchase prices
|
|
$
|
541,685
|
|
|
$
|
84,248
|
|
|
|
|
|
|
||||
Allocation of Purchase Prices:
|
|
|
|
|
|
|||
Net tangible assets (liabilities):
|
|
|
|
|
|
|||
Accounts receivable
|
|
$
|
18,473
|
|
|
$
|
—
|
|
Other current assets, including cash acquired
|
|
49,707
|
|
|
3,799
|
|
||
Other assets
|
|
14,494
|
|
|
924
|
|
||
Current and other liabilities
|
|
(17,851
|
)
|
|
(263
|
)
|
||
Deferred revenue - current and long-term
|
|
(7,932
|
)
|
|
(340
|
)
|
||
Deferred income taxes - current and long-term
|
|
(60,879
|
)
|
|
(4,882
|
)
|
||
Net tangible liabilities
|
|
(3,988
|
)
|
|
(762
|
)
|
||
Identifiable intangible assets:
|
|
|
|
|
|
|||
Customer relationships
|
|
152,700
|
|
|
2,000
|
|
||
Developed technology
|
|
55,500
|
|
|
37,400
|
|
||
Trademarks and trade names
|
|
11,500
|
|
|
—
|
|
||
Other intangible assets
|
|
—
|
|
|
1,100
|
|
||
Total identifiable intangible assets
|
|
219,700
|
|
|
40,500
|
|
||
Goodwill
|
|
325,973
|
|
|
44,510
|
|
||
Total purchase price allocations
|
|
$
|
541,685
|
|
|
$
|
84,248
|
|
(in thousands, except per share amounts)
|
|
Year Ended January 31, 2015
|
||
Revenue
|
|
$
|
1,158,141
|
|
Net income
|
|
$
|
29,644
|
|
Net income attributable to Verint Systems Inc.
|
|
$
|
24,173
|
|
Net income per common share attributable to Verint Systems Inc.:
|
|
|
||
Basic
|
|
$
|
0.42
|
|
Diluted
|
|
$
|
0.41
|
|
5.
|
INTANGIBLE ASSETS AND GOODWILL
|
|
|
January 31, 2017
|
||||||||||
(in thousands)
|
|
Cost
|
|
Accumulated
Amortization
|
|
Net
|
||||||
Intangible assets with finite lives:
|
|
|
|
|
|
|
|
|
|
|||
Customer relationships
|
|
$
|
403,657
|
|
|
$
|
(244,792
|
)
|
|
$
|
158,865
|
|
Acquired technology
|
|
233,982
|
|
|
(168,653
|
)
|
|
65,329
|
|
|||
Trade names
|
|
23,493
|
|
|
(14,187
|
)
|
|
9,306
|
|
|||
Non-competition agreements
|
|
3,047
|
|
|
(2,499
|
)
|
|
548
|
|
|||
Distribution network
|
|
4,440
|
|
|
(4,329
|
)
|
|
111
|
|
|||
Total intangible assets with finite lives
|
|
668,619
|
|
|
(434,460
|
)
|
|
234,159
|
|
|||
In-process research and development, with indefinite lives
|
|
1,100
|
|
|
—
|
|
|
1,100
|
|
|||
Total intangible assets
|
|
$
|
669,719
|
|
|
$
|
(434,460
|
)
|
|
$
|
235,259
|
|
|
|
January 31, 2016
|
||||||||||
(in thousands)
|
|
Cost
|
|
Accumulated
Amortization
|
|
Net
|
||||||
Intangible assets, all with finite lives:
|
|
|
|
|
|
|
|
|
|
|||
Customer relationships
|
|
$
|
371,722
|
|
|
$
|
(211,824
|
)
|
|
$
|
159,898
|
|
Acquired technology
|
|
211,388
|
|
|
(134,391
|
)
|
|
76,997
|
|
|||
Trade names
|
|
18,457
|
|
|
(11,570
|
)
|
|
6,887
|
|
|||
Non-competition agreements
|
|
3,047
|
|
|
(2,137
|
)
|
|
910
|
|
|||
Distribution network
|
|
4,440
|
|
|
(3,550
|
)
|
|
890
|
|
|||
Total intangible assets with finite lives
|
|
609,054
|
|
|
(363,472
|
)
|
|
245,582
|
|
|||
In-process research and development, with indefinite lives
|
|
1,100
|
|
|
—
|
|
|
1,100
|
|
|||
Total intangible assets
|
|
$
|
610,154
|
|
|
$
|
(363,472
|
)
|
|
$
|
246,682
|
|
|
|
January 31,
|
||||||
(in thousands)
|
|
2017
|
|
2016
|
||||
Customer Engagement
|
|
$
|
207,436
|
|
|
$
|
201,503
|
|
Cyber Intelligence
|
|
27,823
|
|
|
45,179
|
|
||
Total
|
|
$
|
235,259
|
|
|
$
|
246,682
|
|
|
|
|
|
Reportable Segment
|
||||||||
(in thousands)
|
|
Total
|
|
Customer Engagement
|
|
Cyber Intelligence
|
||||||
Year Ended January 31, 2016:
|
|
|
|
|
|
|
||||||
Goodwill, gross, at January 31, 2015
|
|
$
|
1,267,682
|
|
|
$
|
1,144,188
|
|
|
$
|
123,494
|
|
Accumulated impairment losses through January 31, 2015
|
|
(66,865
|
)
|
|
(56,043
|
)
|
|
(10,822
|
)
|
|||
Goodwill, net, at January 31, 2015
|
|
1,200,817
|
|
|
1,088,145
|
|
|
112,672
|
|
|||
Business combinations
|
|
28,717
|
|
|
7,695
|
|
|
21,022
|
|
|||
Foreign currency translation and other
|
|
(22,358
|
)
|
|
(20,634
|
)
|
|
(1,724
|
)
|
|||
Goodwill, net, at January 31, 2016
|
|
$
|
1,207,176
|
|
|
$
|
1,075,206
|
|
|
$
|
131,970
|
|
|
|
|
|
|
|
|
||||||
Year Ended January 31, 2017:
|
|
|
|
|
|
|
||||||
Goodwill, gross, at January 31, 2016
|
|
$
|
1,274,041
|
|
|
$
|
1,131,249
|
|
|
$
|
142,792
|
|
Accumulated impairment losses through January 31, 2016
|
|
(66,865
|
)
|
|
(56,043
|
)
|
|
(10,822
|
)
|
|||
Goodwill, net, at January 31, 2016
|
|
1,207,176
|
|
|
1,075,206
|
|
|
131,970
|
|
|||
Business combinations
|
|
91,209
|
|
|
91,209
|
|
|
—
|
|
|||
Foreign currency translation and other
|
|
(33,567
|
)
|
|
(34,436
|
)
|
|
869
|
|
|||
Goodwill, net, at January 31, 2017
|
|
$
|
1,264,818
|
|
|
$
|
1,131,979
|
|
|
$
|
132,839
|
|
|
|
|
|
|
|
|
||||||
Balance at January 31, 2017:
|
|
|
|
|
|
|
|
|
|
|||
Goodwill, gross, at January 31, 2017
|
|
$
|
1,331,683
|
|
|
$
|
1,188,022
|
|
|
$
|
143,661
|
|
Accumulated impairment losses through January 31, 2017
|
|
(66,865
|
)
|
|
(56,043
|
)
|
|
(10,822
|
)
|
|||
Goodwill, net, at January 31, 2017
|
|
$
|
1,264,818
|
|
|
$
|
1,131,979
|
|
|
$
|
132,839
|
|
6.
|
LONG-TERM DEBT
|
|
|
January 31,
|
||||||
(in thousands)
|
|
2017
|
|
2016
|
||||
|
|
|
|
|
||||
1.50% Convertible Senior Notes
|
|
$
|
400,000
|
|
|
$
|
400,000
|
|
February 2014 Term Loans
|
|
130,060
|
|
|
130,729
|
|
||
March 2014 Term Loans
|
|
278,978
|
|
|
280,413
|
|
||
Other debt
|
|
404
|
|
|
—
|
|
||
Less: Unamortized debt discounts and issuance costs
|
|
(60,571
|
)
|
|
(73,055
|
)
|
||
Total debt
|
|
748,871
|
|
|
738,087
|
|
||
Less: current maturities
|
|
4,611
|
|
|
2,104
|
|
||
Long-term debt
|
|
$
|
744,260
|
|
|
$
|
735,983
|
|
•
|
during any calendar quarter commencing after the calendar quarter which ended on September 30, 2014, if the closing sale price of our common stock, for at least
20
trading days (whether or not consecutive) in the period of
30
consecutive trading days ending on the last trading day of the immediately preceding calendar quarter, is more than
130%
of the conversion price of the Notes in effect on each applicable trading day;
|
•
|
during the ten consecutive trading-day period following any
five
consecutive trading-day period in which the trading price for the Notes for each such trading day was less than
98%
of the closing sale price of our common stock on such date multiplied by the then-current conversion rate; or
|
•
|
upon the occurrence of specified corporate events, as described in the indenture governing the Notes, such as a consolidation, merger, or binding share exchange.
|
(in thousands)
|
|
February
2014
|
|
March
2014
|
||||
Years Ending January 31,
|
|
Term Loans
|
|
Term Loans
|
||||
2018
|
|
$
|
1,337
|
|
|
$
|
2,869
|
|
2019
|
|
1,337
|
|
|
2,869
|
|
||
2020
|
|
127,386
|
|
|
273,240
|
|
||
Total
|
|
$
|
130,060
|
|
|
$
|
278,978
|
|
|
|
Year Ended January 31,
|
||||||||||
(in thousands)
|
|
2017
|
|
2016
|
|
2015
|
||||||
1.50% Convertible Senior Notes:
|
|
|
|
|
|
|
||||||
Interest expense at 1.50% coupon rate
|
|
$
|
6,000
|
|
|
$
|
6,000
|
|
|
$
|
3,717
|
|
Amortization of debt discount
|
|
10,669
|
|
|
10,123
|
|
|
6,014
|
|
|||
Amortization of deferred debt issuance costs
|
|
1,007
|
|
|
955
|
|
|
566
|
|
|||
Total - 1.50% Convertible Senior Notes
|
|
$
|
17,676
|
|
|
$
|
17,078
|
|
|
$
|
10,297
|
|
|
|
|
|
|
|
|
||||||
Borrowings under Credit Agreement:
|
|
|
|
|
|
|
||||||
Interest expense at contractual rates
|
|
$
|
14,682
|
|
|
$
|
14,590
|
|
|
$
|
23,236
|
|
Impact of interest rate swap agreement
|
|
259
|
|
|
—
|
|
|
—
|
|
|||
Amortization of debt discounts
|
|
58
|
|
|
56
|
|
|
116
|
|
|||
Amortization of deferred debt issuance costs
|
|
2,211
|
|
|
2,166
|
|
|
2,435
|
|
|||
Total - Borrowings under Credit Agreement
|
|
$
|
17,210
|
|
|
$
|
16,812
|
|
|
$
|
25,787
|
|
7.
|
SUPPLEMENTAL CONSOLIDATED FINANCIAL STATEMENT INFORMATION
|
|
|
January 31,
|
||||||
(in thousands)
|
|
2017
|
|
2016
|
||||
Raw materials
|
|
$
|
9,074
|
|
|
$
|
7,177
|
|
Work-in-process
|
|
4,355
|
|
|
6,668
|
|
||
Finished goods
|
|
4,108
|
|
|
4,467
|
|
||
Total inventories
|
|
$
|
17,537
|
|
|
$
|
18,312
|
|
|
|
January 31,
|
||||||
(in thousands)
|
|
2017
|
|
2016
|
||||
Land and buildings
|
|
$
|
9,543
|
|
|
$
|
10,276
|
|
Leasehold improvements
|
|
29,247
|
|
|
28,538
|
|
||
Software
|
|
61,810
|
|
|
47,615
|
|
||
Equipment, furniture, and other
|
|
93,968
|
|
|
79,545
|
|
||
|
|
194,568
|
|
|
165,974
|
|
||
Less: accumulated depreciation and amortization
|
|
(117,017
|
)
|
|
(97,070
|
)
|
||
Total property and equipment, net
|
|
$
|
77,551
|
|
|
$
|
68,904
|
|
|
|
January 31,
|
||||||
(in thousands)
|
|
2017
|
|
2016
|
||||
Long-term restricted cash and time deposits
|
|
$
|
54,566
|
|
|
$
|
15,359
|
|
Deferred debt issuance costs, net
|
|
1,929
|
|
|
3,142
|
|
||
Long-term security deposits
|
|
4,123
|
|
|
4,112
|
|
||
Other
|
|
16,002
|
|
|
13,611
|
|
||
Total other assets
|
|
$
|
76,620
|
|
|
$
|
36,224
|
|
|
|
January 31,
|
||||||
(in thousands)
|
|
2017
|
|
2016
|
||||
Compensation and benefits
|
|
$
|
73,998
|
|
|
$
|
69,895
|
|
Billings in excess of costs and estimated earnings on uncompleted contracts
|
|
59,810
|
|
|
54,873
|
|
||
Income taxes
|
|
11,410
|
|
|
18,707
|
|
||
Professional and consulting fees
|
|
8,020
|
|
|
7,094
|
|
||
Derivative financial instruments - current portion
|
|
1,655
|
|
|
2,347
|
|
||
Distributor and agent commissions
|
|
10,384
|
|
|
8,471
|
|
||
Taxes other than income taxes
|
|
8,564
|
|
|
8,430
|
|
||
Interest on indebtedness
|
|
3,712
|
|
|
4,597
|
|
||
Contingent consideration - current portion
|
|
9,725
|
|
|
3,691
|
|
||
Other
|
|
25,946
|
|
|
28,862
|
|
||
Total accrued expenses and other current liabilities
|
|
$
|
213,224
|
|
|
$
|
206,967
|
|
|
|
January 31,
|
||||||
(in thousands)
|
|
2017
|
|
2016
|
||||
Unrecognized tax benefits, including interest and penalties
|
|
$
|
28,204
|
|
|
$
|
25,315
|
|
Contingent consideration - long-term portion
|
|
42,708
|
|
|
18,401
|
|
||
Deferred rent expense
|
|
13,805
|
|
|
12,553
|
|
||
Obligations for severance compensation
|
|
2,880
|
|
|
2,712
|
|
||
Other
|
|
6,762
|
|
|
2,647
|
|
||
Total other liabilities
|
|
$
|
94,359
|
|
|
$
|
61,628
|
|
|
|
Year Ended January 31,
|
||||||||||
(in thousands)
|
|
2017
|
|
2016
|
|
2015
|
||||||
Foreign currency losses, net
|
|
$
|
(2,743
|
)
|
|
$
|
(8,037
|
)
|
|
$
|
(13,402
|
)
|
(Losses) gains on derivative financial instruments, net
|
|
(322
|
)
|
|
394
|
|
|
3,986
|
|
|||
Other, net
|
|
(3,861
|
)
|
|
(4,634
|
)
|
|
(155
|
)
|
|||
Total other expense, net
|
|
$
|
(6,926
|
)
|
|
$
|
(12,277
|
)
|
|
$
|
(9,571
|
)
|
|
|
Year Ended January 31,
|
||||||||||
(in thousands)
|
|
2017
|
|
2016
|
|
2015
|
||||||
Cash paid for interest
|
|
$
|
21,892
|
|
|
$
|
20,734
|
|
|
$
|
29,296
|
|
Cash payments of income taxes, net
|
|
$
|
29,582
|
|
|
$
|
17,165
|
|
|
$
|
15,362
|
|
Non-cash investing and financing transactions:
|
|
|
|
|
|
|
|
|||||
Accrued but unpaid purchases of property and equipment
|
|
$
|
2,868
|
|
|
$
|
4,562
|
|
|
$
|
4,258
|
|
Inventory transfers to property and equipment
|
|
$
|
552
|
|
|
$
|
1,142
|
|
|
$
|
630
|
|
Liabilities for contingent consideration in business combinations
|
|
$
|
26,400
|
|
|
$
|
16,238
|
|
|
$
|
8,347
|
|
Leasehold improvements funded by lease incentives
|
|
$
|
82
|
|
|
$
|
1,721
|
|
|
$
|
2,242
|
|
8.
|
STOCKHOLDERS’ EQUITY
|
(in thousands)
|
|
Unrealized Gains (Losses) on Derivative Financial Instruments Designated as Hedges
|
|
Unrealized Gain on Interest Rate Swap Designated as Hedge
|
|
Unrealized Gains (Losses) on Available-for-Sale Investments
|
|
Foreign Currency Translation Adjustments
|
|
Total
|
||||||||||
Accumulated other comprehensive (loss) income at January 31, 2015
|
|
$
|
(7,992
|
)
|
|
$
|
—
|
|
|
$
|
101
|
|
|
$
|
(86,444
|
)
|
|
$
|
(94,335
|
)
|
Other comprehensive loss before reclassifications
|
|
(992
|
)
|
|
—
|
|
|
(211
|
)
|
|
(27,769
|
)
|
|
(28,972
|
)
|
|||||
Amounts reclassified out of accumulated other comprehensive income (loss)
|
|
7,113
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
7,113
|
|
|||||
Net other comprehensive income (loss)
|
|
6,121
|
|
|
—
|
|
|
(211
|
)
|
|
(27,769
|
)
|
|
(21,859
|
)
|
|||||
Accumulated other comprehensive loss at January 31, 2016
|
|
(1,871
|
)
|
|
—
|
|
|
(110
|
)
|
|
(114,213
|
)
|
|
(116,194
|
)
|
|||||
Other comprehensive income (loss) before reclassifications
|
|
3,585
|
|
|
632
|
|
|
110
|
|
|
(41,850
|
)
|
|
(37,523
|
)
|
|||||
Amounts reclassified out of accumulated other comprehensive income (loss)
|
|
(1,139
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,139
|
)
|
|||||
Net other comprehensive income (loss)
|
|
2,446
|
|
|
632
|
|
|
110
|
|
|
(41,850
|
)
|
|
(38,662
|
)
|
|||||
Accumulated other comprehensive income (loss) at January 31, 2017
|
|
$
|
575
|
|
|
$
|
632
|
|
|
$
|
—
|
|
|
$
|
(156,063
|
)
|
|
$
|
(154,856
|
)
|
|
|
Year Ended January 31,
|
|
Financial Statement Location
|
||||||||||
(in thousands)
|
|
2017
|
|
2016
|
|
2015
|
|
|||||||
Unrealized (gains) losses on derivative financial instruments:
|
|
|
|
|
|
|
|
|
||||||
Foreign currency forward contracts
|
|
$
|
(108
|
)
|
|
$
|
718
|
|
|
$
|
190
|
|
|
Cost of product revenue
|
|
|
(115
|
)
|
|
672
|
|
|
159
|
|
|
Cost of service and support revenue
|
|||
|
|
(651
|
)
|
|
4,556
|
|
|
1,050
|
|
|
Research and development, net
|
|||
|
|
(383
|
)
|
|
2,205
|
|
|
458
|
|
|
Selling, general and administrative
|
|||
|
|
(1,257
|
)
|
|
8,151
|
|
|
1,857
|
|
|
Total, before income taxes
|
|||
|
|
118
|
|
|
(1,038
|
)
|
|
(299
|
)
|
|
Provision (benefit) for income taxes
|
|||
|
|
$
|
(1,139
|
)
|
|
$
|
7,113
|
|
|
$
|
1,558
|
|
|
Total, net of income taxes
|
|
|
Year Ended January 31,
|
||||||||||
(in thousands)
|
|
2017
|
|
2016
|
|
2015
|
||||||
Capitalized software development costs, net, beginning of year
|
|
$
|
11,992
|
|
|
$
|
10,112
|
|
|
$
|
8,483
|
|
Software development costs capitalized during the year
|
|
2,338
|
|
|
5,027
|
|
|
6,083
|
|
|||
Amortization of capitalized software development costs
|
|
(3,341
|
)
|
|
(2,976
|
)
|
|
(1,666
|
)
|
|||
Impairments, foreign currency translation and other
|
|
(1,480
|
)
|
|
(171
|
)
|
|
(2,788
|
)
|
|||
Capitalized software development costs, net, end of year
|
|
$
|
9,509
|
|
|
$
|
11,992
|
|
|
$
|
10,112
|
|
10.
|
INCOME TAXES
|
|
|
Year Ended January 31,
|
||||||||||
(in thousands)
|
|
2017
|
|
2016
|
|
2015
|
||||||
Domestic
|
|
$
|
(60,722
|
)
|
|
$
|
(43,471
|
)
|
|
$
|
(53,877
|
)
|
Foreign
|
|
37,248
|
|
|
66,651
|
|
|
75,280
|
|
|||
Total (loss) income before provision (benefit) for income taxes
|
|
$
|
(23,474
|
)
|
|
$
|
23,180
|
|
|
$
|
21,403
|
|
|
|
Year Ended January 31,
|
||||||||||
(in thousands)
|
|
2017
|
|
2016
|
|
2015
|
||||||
Current provision (benefit) for income taxes:
|
|
|
|
|
|
|
||||||
Federal
|
|
$
|
604
|
|
|
$
|
(2,997
|
)
|
|
$
|
342
|
|
State
|
|
989
|
|
|
1,300
|
|
|
1,575
|
|
|||
Foreign
|
|
18,120
|
|
|
8,289
|
|
|
30,415
|
|
|||
Total current provision for income taxes
|
|
19,713
|
|
|
6,592
|
|
|
32,332
|
|
|||
Deferred (benefit) provision for income taxes:
|
|
|
|
|
|
|
||||||
Federal
|
|
(8,179
|
)
|
|
2,244
|
|
|
(40,007
|
)
|
|||
State
|
|
(842
|
)
|
|
12
|
|
|
(2,610
|
)
|
|||
Foreign
|
|
(7,920
|
)
|
|
(7,896
|
)
|
|
(4,714
|
)
|
|||
Total deferred benefit for income taxes
|
|
(16,941
|
)
|
|
(5,640
|
)
|
|
(47,331
|
)
|
|||
Total provision (benefit) for income taxes
|
|
$
|
2,772
|
|
|
$
|
952
|
|
|
$
|
(14,999
|
)
|
|
|
January 31,
|
||||||
(in thousands)
|
|
2017
|
|
2016
|
||||
Deferred tax assets:
|
|
|
|
|
||||
Accrued expenses
|
|
$
|
10,627
|
|
|
$
|
9,553
|
|
Deferred revenue
|
|
3,953
|
|
|
7,819
|
|
||
Loss carryforwards
|
|
125,986
|
|
|
127,718
|
|
||
Tax credits
|
|
7,972
|
|
|
8,308
|
|
||
Stock-based and other compensation
|
|
20,187
|
|
|
20,213
|
|
||
Capitalized research and development expenses
|
|
4,146
|
|
|
4,125
|
|
||
Other, net
|
|
2,672
|
|
|
3,783
|
|
||
Total deferred tax assets
|
|
175,543
|
|
|
181,519
|
|
||
Deferred tax liabilities:
|
|
|
|
|
||||
Goodwill and other intangible assets
|
|
(50,679
|
)
|
|
(53,354
|
)
|
||
Unremitted earnings of foreign subsidiaries
|
|
(18,215
|
)
|
|
(18,870
|
)
|
||
Other, net
|
|
(2,344
|
)
|
|
(3,053
|
)
|
||
Total deferred tax liabilities
|
|
(71,238
|
)
|
|
(75,277
|
)
|
||
Valuation allowance
|
|
(108,609
|
)
|
|
(115,756
|
)
|
||
Net deferred tax liabilities
|
|
$
|
(4,304
|
)
|
|
$
|
(9,514
|
)
|
|
|
|
|
|
||||
Recorded as:
|
|
|
|
|
||||
Long-term deferred tax assets
|
|
$
|
21,510
|
|
|
$
|
17,528
|
|
Long-term deferred tax liabilities
|
|
(25,814
|
)
|
|
(27,042
|
)
|
||
Net deferred tax liabilities
|
|
$
|
(4,304
|
)
|
|
$
|
(9,514
|
)
|
|
|
Year Ended January 31,
|
||||||
(in thousands)
|
|
2017
|
|
2016
|
||||
Valuation allowance, beginning of year
|
|
$
|
(115,756
|
)
|
|
$
|
(123,837
|
)
|
Provision (benefit) for income taxes
|
|
3,640
|
|
|
7,767
|
|
||
Additional paid-in capital
|
|
3,204
|
|
|
(59
|
)
|
||
Currency translation adjustment
|
|
303
|
|
|
373
|
|
||
Valuation allowance, end of year
|
|
$
|
(108,609
|
)
|
|
$
|
(115,756
|
)
|
|
|
Year Ended January 31,
|
||||||||||
(in thousands)
|
|
2017
|
|
2016
|
|
2015
|
||||||
Gross unrecognized tax benefits, beginning of year
|
|
$
|
142,271
|
|
|
$
|
159,648
|
|
|
$
|
145,408
|
|
Increases related to tax positions taken during the current year
|
|
11,034
|
|
|
9,465
|
|
|
15,522
|
|
|||
Increases as a result of business combinations
|
|
—
|
|
|
985
|
|
|
4,744
|
|
|||
Increases related to tax positions taken during prior years
|
|
585
|
|
|
2,514
|
|
|
1,927
|
|
|||
Increases (decreases) related to foreign currency exchange rates
|
|
648
|
|
|
(741
|
)
|
|
(3,900
|
)
|
|||
Reductions for tax positions of prior years
|
|
(5,094
|
)
|
|
(13,613
|
)
|
|
(3,440
|
)
|
|||
Reductions for settlements with tax authorities
|
|
(145
|
)
|
|
(13,811
|
)
|
|
—
|
|
|||
Lapses of statutes of limitations
|
|
(660
|
)
|
|
(2,176
|
)
|
|
(613
|
)
|
|||
Gross unrecognized tax benefits, end of year
|
|
$
|
148,639
|
|
|
$
|
142,271
|
|
|
$
|
159,648
|
|
Jurisdiction
|
|
Tax Years
|
Canada
|
|
January 31, 2011 - January 31, 2012
|
United Kingdom
|
|
December 31, 2006; January 31, 2008
|
India
|
|
March 31, 2006 - March 31, 2008; March 31, 2010 - March 31, 2013, March 31, 2015
|
Israel
|
|
January 31, 2014 - January 31, 2016
|
11.
|
FAIR VALUE MEASUREMENTS
|
|
|
January 31, 2017
|
||||||||||
|
|
Fair Value Hierarchy Category
|
||||||||||
(in thousands)
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
||||||
Assets:
|
|
|
|
|
|
|
|
|
|
|||
Money market funds
|
|
$
|
175
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Foreign currency forward contracts
|
|
—
|
|
|
1,646
|
|
|
—
|
|
|||
Interest rate swap agreement
|
|
—
|
|
|
1,429
|
|
|
—
|
|
|||
Total assets
|
|
$
|
175
|
|
|
$
|
3,075
|
|
|
$
|
—
|
|
Liabilities:
|
|
|
|
|
|
|
|
|
|
|||
Foreign currency forward contracts
|
|
$
|
—
|
|
|
$
|
1,246
|
|
|
$
|
—
|
|
Interest rate swap agreement
|
|
—
|
|
|
408
|
|
|
—
|
|
|||
Contingent consideration - business combinations
|
|
—
|
|
|
—
|
|
|
52,733
|
|
|||
Option to acquire noncontrolling interests of consolidated subsidiaries
|
|
—
|
|
|
—
|
|
|
3,550
|
|
|||
Total liabilities
|
|
$
|
—
|
|
|
$
|
1,654
|
|
|
$
|
56,283
|
|
|
|
January 31, 2016
|
||||||||||
|
|
Fair Value Hierarchy Category
|
||||||||||
(in thousands)
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
||||||
Assets:
|
|
|
|
|
|
|
|
|
|
|||
Money market funds
|
|
$
|
12,137
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Commercial paper and corporate debt securities, classified as cash and cash equivalents
|
|
—
|
|
|
5,030
|
|
|
—
|
|
|||
Short-term investments, classified as available-for-sale
|
|
—
|
|
|
52,932
|
|
|
—
|
|
|||
Foreign currency forward contracts
|
|
—
|
|
|
113
|
|
|
—
|
|
|||
Total assets
|
|
$
|
12,137
|
|
|
$
|
58,075
|
|
|
$
|
—
|
|
Liabilities:
|
|
|
|
|
|
|
|
|
|
|||
Foreign currency forward contracts
|
|
$
|
—
|
|
|
$
|
2,377
|
|
|
$
|
—
|
|
Contingent consideration - business combinations
|
|
—
|
|
|
—
|
|
|
22,391
|
|
|||
Total liabilities
|
|
$
|
—
|
|
|
$
|
2,377
|
|
|
$
|
22,391
|
|
|
|
Year Ended January 31,
|
||||||
(in thousands)
|
|
2017
|
|
2016
|
||||
Fair value measurement, beginning of year
|
|
$
|
22,391
|
|
|
$
|
14,507
|
|
Contingent consideration liabilities recorded for business combinations
|
|
26,400
|
|
|
16,238
|
|
||
Changes in fair values, recorded in operating expenses
|
|
7,255
|
|
|
(910
|
)
|
||
Payments of contingent consideration
|
|
(3,313
|
)
|
|
(7,444
|
)
|
||
Fair value measurement, end of year
|
|
$
|
52,733
|
|
|
$
|
22,391
|
|
(in thousands)
|
|
Year Ended
January 31, 2017 |
||
Fair value measurement, beginning of year
|
|
$
|
—
|
|
Acquisition of option to acquire noncontrolling interests of consolidated subsidiaries
|
|
3,134
|
|
|
Change in fair value, recorded in operating expenses
|
|
416
|
|
|
Fair value measurement, end of year
|
|
$
|
3,550
|
|
|
|
|
January 31,
|
||||||
(in thousands)
|
Balance Sheet Classification
|
|
2017
|
|
2016
|
||||
Derivative assets:
|
|
|
|
|
|
||||
Foreign currency forward contracts:
|
|
|
|
|
|
||||
Designated as cash flow hedges
|
Prepaid expenses and other current assets
|
|
$
|
927
|
|
|
$
|
—
|
|
Not designated as hedging instruments
|
Prepaid expenses and other current assets
|
|
719
|
|
|
113
|
|
||
Interest rate swap agreement, designated as a cash flow hedge
|
Other assets
|
|
1,429
|
|
|
—
|
|
||
Total derivative assets
|
|
|
$
|
3,075
|
|
|
$
|
113
|
|
|
|
|
|
|
|
||||
Derivative liabilities:
|
|
|
|
|
|
||||
Foreign currency forward contracts:
|
|
|
|
|
|
||||
Designated as cash flow hedges
|
Accrued expenses and other current liabilities
|
|
$
|
288
|
|
|
$
|
2,108
|
|
Not designated as hedging instruments
|
Accrued expenses and other current liabilities
|
|
958
|
|
|
239
|
|
||
|
Other liabilities
|
|
—
|
|
|
30
|
|
||
Interest rate swap agreement, designated as a cash flow hedge
|
Accrued expenses and other current liabilities
|
|
408
|
|
|
—
|
|
||
Total derivative liabilities
|
|
|
$
|
1,654
|
|
|
$
|
2,377
|
|
|
|
Year Ended January 31,
|
||||||||||
(in thousands)
|
|
2017
|
|
2016
|
|
2015
|
||||||
Net gains (losses) recognized in Other comprehensive (loss) income:
|
|
|
|
|
|
|
||||||
Foreign currency forward contracts
|
|
$
|
575
|
|
|
$
|
(1,871
|
)
|
|
$
|
(7,992
|
)
|
Interest rate swap agreement
|
|
632
|
|
|
—
|
|
|
—
|
|
|||
|
|
$
|
1,207
|
|
|
$
|
(1,871
|
)
|
|
$
|
(7,992
|
)
|
Net gains (losses) reclassified from Other comprehensive (loss) income to the consolidated statements of operations:
|
|
|
|
|
|
|
||||||
Foreign currency forward contracts
|
|
$
|
1,257
|
|
|
$
|
(8,151
|
)
|
|
$
|
(1,857
|
)
|
|
|
Classification in Consolidated Statements of Operations
|
|
Year Ended January 31,
|
||||||||||
(in thousands)
|
|
|
2017
|
|
2016
|
|
2015
|
|||||||
Foreign currency forward contracts
|
|
Other income (expense), net
|
|
$
|
(323
|
)
|
|
$
|
394
|
|
|
$
|
3,986
|
|
13.
|
STOCK-BASED COMPENSATION AND OTHER BENEFIT PLANS
|
|
|
Year Ended January 31,
|
||||||||||
(in thousands)
|
|
2017
|
|
2016
|
|
2015
|
||||||
Component of (loss) income before provision (benefit) for income taxes:
|
|
|
|
|
|
|
||||||
Cost of revenue - product
|
|
$
|
1,290
|
|
|
$
|
1,466
|
|
|
$
|
1,228
|
|
Cost of revenue - service and support
|
|
7,297
|
|
|
5,719
|
|
|
5,028
|
|
|||
Research and development, net
|
|
11,637
|
|
|
9,195
|
|
|
6,421
|
|
|||
Selling, general and administrative
|
|
45,384
|
|
|
48,169
|
|
|
41,781
|
|
|||
Total stock-based compensation expense
|
|
65,608
|
|
|
64,549
|
|
|
54,458
|
|
|||
Income tax benefits related to stock-based compensation (before consideration of valuation allowances)
|
|
15,752
|
|
|
14,385
|
|
|
12,364
|
|
|||
Total stock-based compensation, net of taxes
|
|
$
|
49,856
|
|
|
$
|
50,164
|
|
|
$
|
42,094
|
|
|
|
Year Ended January 31,
|
||||||||||
(in thousands)
|
|
2017
|
|
2016
|
|
2015
|
||||||
Restricted stock units and restricted stock awards
|
|
$
|
55,123
|
|
|
$
|
58,028
|
|
|
$
|
46,634
|
|
Stock bonus program and bonus share program
|
|
10,298
|
|
|
6,359
|
|
|
7,680
|
|
|||
Total equity-settled awards
|
|
65,421
|
|
|
64,387
|
|
|
54,314
|
|
|||
Phantom stock units (cash-settled awards)
|
|
187
|
|
|
162
|
|
|
144
|
|
|||
Total stock-based compensation expense
|
|
$
|
65,608
|
|
|
$
|
64,549
|
|
|
$
|
54,458
|
|
|
|
Year Ended January 31,
|
|||||||||||||||||||
|
|
2017
|
|
2016
|
|
2015
|
|||||||||||||||
(in thousands, except grant date fair values)
|
|
Shares or Units
|
|
Weighted-Average Grant-Date Fair Value
|
|
Shares or Units
|
|
Weighted-Average Grant-Date Fair Value
|
|
Shares or Units
|
|
Weighted-Average Grant-Date Fair Value
|
|||||||||
Beginning balance
|
|
2,649
|
|
|
$
|
54.57
|
|
|
2,545
|
|
|
$
|
40.96
|
|
|
2,250
|
|
|
$
|
33.77
|
|
Granted
|
|
1,870
|
|
|
$
|
35.33
|
|
|
1,729
|
|
|
$
|
62.62
|
|
|
1,504
|
|
|
$
|
46.11
|
|
Released
|
|
(1,433
|
)
|
|
$
|
47.98
|
|
|
(1,312
|
)
|
|
$
|
39.75
|
|
|
(1,009
|
)
|
|
$
|
33.11
|
|
Forfeited
|
|
(344
|
)
|
|
$
|
52.20
|
|
|
(313
|
)
|
|
$
|
50.56
|
|
|
(200
|
)
|
|
$
|
38.46
|
|
Ending balance
|
|
2,742
|
|
|
$
|
45.20
|
|
|
2,649
|
|
|
$
|
54.57
|
|
|
2,545
|
|
|
$
|
40.96
|
|
|
|
Year Ended January 31,
|
|||||||||||||||||||
|
|
2017
|
|
2016
|
|
2015
|
|||||||||||||||
(in thousands, except exercise prices)
|
|
Stock Options
|
|
Weighted-Average Exercise Price
|
|
Stock Options
|
|
Weighted-Average Exercise Price
|
|
Stock Options
|
|
Weighted-Average Exercise Price
|
|||||||||
Beginning balance
|
|
3
|
|
|
$
|
9.59
|
|
|
9
|
|
|
$
|
28.74
|
|
|
516
|
|
|
$
|
34.60
|
|
Exercised
|
|
(1
|
)
|
|
$
|
8.71
|
|
|
(6
|
)
|
|
$
|
36.10
|
|
|
(505
|
)
|
|
$
|
34.71
|
|
Expired
|
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
$
|
—
|
|
|
(2
|
)
|
|
$
|
23.13
|
|
Ending balance
|
|
2
|
|
|
$
|
10.09
|
|
|
3
|
|
|
$
|
9.59
|
|
|
9
|
|
|
$
|
28.74
|
|
Stock options exercisable
|
|
2
|
|
|
$
|
10.09
|
|
|
3
|
|
|
$
|
9.59
|
|
|
9
|
|
|
$
|
28.74
|
|
|
|
Year Ended January 31,
|
||||||||||
(in thousands)
|
|
2017
|
|
2016
|
|
2015
|
||||||
Intrinsic value of options exercised
|
|
$
|
24
|
|
|
$
|
164
|
|
|
$
|
8,759
|
|
Cash received from the exercise of stock options
|
|
$
|
8
|
|
|
$
|
232
|
|
|
$
|
17,606
|
|
Tax benefits realized from stock options exercised
|
|
$
|
6
|
|
|
$
|
107
|
|
|
$
|
2,306
|
|
Fair value of options vested
|
|
$
|
35
|
|
|
$
|
56
|
|
|
$
|
178
|
|
|
|
Year Ended January 31,
|
|||||||
(in thousands, except discount)
|
|
2017
|
|
2016
|
|
2015
|
|||
Maximum stock bonus program shares
|
|
—
|
|
|
125
|
|
|
125
|
|
Discount
|
|
—
|
%
|
|
—
|
%
|
|
15
|
%
|
Shares in lieu of earned cash bonus - granted and released
|
|
25
|
|
|
43
|
|
|
82
|
|
Shares in respect of discount:
|
|
|
|
|
|
|
|||
Granted
|
|
—
|
|
|
7
|
|
|
12
|
|
Released
|
|
—
|
|
|
5
|
|
|
9
|
|
(in thousands)
|
|
Operating
|
||
Years Ending January 31,
|
|
Leases
|
||
2018
|
|
$
|
25,447
|
|
2019
|
|
24,138
|
|
|
2020
|
|
17,865
|
|
|
2021
|
|
15,460
|
|
|
2022
|
|
14,335
|
|
|
Thereafter
|
|
56,945
|
|
|
Total
|
|
$
|
154,190
|
|
|
|
Year Ended January 31,
|
||||||||||
(in thousands)
|
|
2017
|
|
2016
|
|
2015
|
||||||
Warranty liability, beginning of year
|
|
$
|
826
|
|
|
$
|
633
|
|
|
$
|
706
|
|
Provision charged to (credited against) expenses
|
|
797
|
|
|
473
|
|
|
(60
|
)
|
|||
Warranty charges
|
|
(658
|
)
|
|
(278
|
)
|
|
—
|
|
|||
Foreign currency translation and other
|
|
(3
|
)
|
|
(2
|
)
|
|
(13
|
)
|
|||
Warranty liability, end of year
|
|
$
|
962
|
|
|
$
|
826
|
|
|
$
|
633
|
|
|
|
Year Ended January 31,
|
||||||||||
(in thousands)
|
|
2017
|
|
2016
|
|
2015
|
||||||
Revenue:
|
|
|
|
|
|
|
|
|
||||
Customer Engagement:
|
|
|
|
|
|
|
|
|
||||
Segment revenue
|
|
$
|
716,163
|
|
|
$
|
698,298
|
|
|
$
|
742,537
|
|
Revenue adjustments
|
|
(10,266
|
)
|
|
(3,441
|
)
|
|
(29,032
|
)
|
|||
|
|
705,897
|
|
|
694,857
|
|
|
713,505
|
|
|||
Cyber Intelligence:
|
|
|
|
|
|
|
|
|
||||
Segment revenue
|
|
356,533
|
|
|
436,343
|
|
|
415,626
|
|
|||
Revenue adjustments
|
|
(324
|
)
|
|
(934
|
)
|
|
(695
|
)
|
|||
|
|
356,209
|
|
|
435,409
|
|
|
414,931
|
|
|||
Total revenue
|
|
$
|
1,062,106
|
|
|
$
|
1,130,266
|
|
|
$
|
1,128,436
|
|
|
|
|
|
|
|
|
||||||
Segment contribution:
|
|
|
|
|
|
|
|
|
||||
Customer Engagement
|
|
$
|
269,017
|
|
|
$
|
264,378
|
|
|
$
|
286,587
|
|
Cyber Intelligence
|
|
85,777
|
|
|
133,186
|
|
|
133,203
|
|
|||
Total segment contribution
|
|
354,794
|
|
|
397,564
|
|
|
419,790
|
|
|||
|
|
|
|
|
|
|
||||||
Unallocated expenses, net:
|
|
|
|
|
|
|
|
|
||||
Amortization of acquired intangible assets
|
|
81,461
|
|
|
78,904
|
|
|
76,167
|
|
|||
Stock-based compensation
|
|
65,608
|
|
|
64,549
|
|
|
54,458
|
|
|||
Other unallocated expenses
|
|
190,359
|
|
|
186,259
|
|
|
210,054
|
|
|||
Total unallocated expenses, net
|
|
337,428
|
|
|
329,712
|
|
|
340,679
|
|
|||
Operating income
|
|
17,366
|
|
|
67,852
|
|
|
79,111
|
|
|||
Other expense, net
|
|
(40,840
|
)
|
|
(44,672
|
)
|
|
(57,708
|
)
|
|||
(Loss) income before provision (benefit) for income taxes
|
|
$
|
(23,474
|
)
|
|
$
|
23,180
|
|
|
$
|
21,403
|
|
|
|
Year Ended January 31,
|
||||||||||
(in thousands)
|
|
2017
|
|
2016
|
|
2015
|
||||||
Americas:
|
|
|
|
|
|
|
||||||
United States
|
|
$
|
438,034
|
|
|
$
|
430,626
|
|
|
$
|
430,565
|
|
Other
|
|
134,111
|
|
|
150,435
|
|
|
157,992
|
|
|||
Total Americas
|
|
572,145
|
|
|
581,061
|
|
|
588,557
|
|
|||
EMEA
|
|
322,130
|
|
|
350,217
|
|
|
347,056
|
|
|||
APAC
|
|
167,831
|
|
|
198,988
|
|
|
192,823
|
|
|||
Total revenue
|
|
$
|
1,062,106
|
|
|
$
|
1,130,266
|
|
|
$
|
1,128,436
|
|
|
|
January 31,
|
||||||
(in thousands)
|
|
2017
|
|
2016
|
||||
United States
|
|
$
|
37,751
|
|
|
$
|
28,572
|
|
Israel
|
|
25,421
|
|
|
25,350
|
|
||
Other countries
|
|
14,379
|
|
|
14,982
|
|
||
Total property and equipment, net
|
|
$
|
77,551
|
|
|
$
|
68,904
|
|
|
|
Three Months Ended
|
||||||||||||||
|
|
April 30,
|
|
July 31,
|
|
October 31,
|
|
January 31,
|
||||||||
(in thousands, except per share data)
|
|
2016
|
|
2016
|
|
2016
|
|
2017
|
||||||||
Revenue
|
|
$
|
245,424
|
|
|
$
|
261,921
|
|
|
$
|
258,902
|
|
|
$
|
295,859
|
|
Gross profit
|
|
$
|
144,730
|
|
|
$
|
159,460
|
|
|
$
|
155,696
|
|
|
$
|
179,591
|
|
(Loss) income before (benefit) provision for income taxes
|
|
$
|
(15,863
|
)
|
|
$
|
(10,020
|
)
|
|
$
|
(4,075
|
)
|
|
$
|
6,484
|
|
Net (loss) income
|
|
$
|
(16,193
|
)
|
|
$
|
(11,078
|
)
|
|
$
|
(7,434
|
)
|
|
$
|
8,459
|
|
Net (loss) income attributable to Verint Systems Inc.
|
|
$
|
(17,456
|
)
|
|
$
|
(11,705
|
)
|
|
$
|
(8,237
|
)
|
|
$
|
8,018
|
|
|
|
|
|
|
|
|
|
|
||||||||
Net (loss) income per common share attributable to Verint Systems Inc.
|
|
|
|
|
|
|
|
|
||||||||
Basic
|
|
$
|
(0.28
|
)
|
|
$
|
(0.19
|
)
|
|
$
|
(0.13
|
)
|
|
$
|
0.13
|
|
Diluted
|
|
$
|
(0.28
|
)
|
|
$
|
(0.19
|
)
|
|
$
|
(0.13
|
)
|
|
$
|
0.13
|
|
|
|
Three Months Ended
|
||||||||||||||
|
|
April 30,
|
|
July 31,
|
|
October 31,
|
|
January 31,
|
||||||||
(in thousands, except per share data)
|
|
2015
|
|
2015
|
|
2015
|
|
2016
|
||||||||
Revenue
|
|
$
|
269,536
|
|
|
$
|
295,882
|
|
|
$
|
284,054
|
|
|
$
|
280,794
|
|
Gross profit
|
|
$
|
166,363
|
|
|
$
|
177,344
|
|
|
$
|
178,537
|
|
|
$
|
179,116
|
|
Income (loss) before (benefit) provision for income taxes
|
|
$
|
1,678
|
|
|
$
|
(3,139
|
)
|
|
$
|
10,021
|
|
|
$
|
14,620
|
|
Net income (loss)
|
|
$
|
731
|
|
|
$
|
(5,760
|
)
|
|
$
|
8,470
|
|
|
$
|
18,787
|
|
Net (loss) income attributable to Verint Systems Inc.
|
|
$
|
(416
|
)
|
|
$
|
(7,085
|
)
|
|
$
|
7,634
|
|
|
$
|
17,505
|
|
|
|
|
|
|
|
|
|
|
||||||||
Net (loss) income per common share attributable to Verint Systems Inc.
|
|
|
|
|
|
|
|
|
||||||||
Basic
|
|
$
|
(0.01
|
)
|
|
$
|
(0.11
|
)
|
|
$
|
0.12
|
|
|
$
|
0.28
|
|
Diluted
|
|
$
|
(0.01
|
)
|
|
$
|
(0.11
|
)
|
|
$
|
0.12
|
|
|
$
|
0.28
|
|
Plan Category
|
|
(a)
Number of Securities to be Issued upon Exercise of Outstanding Options, Warrants, and Rights
|
|
(b)
Weighted-Average Exercise Price of Outstanding Options, Warrants and Rights (1)
|
|
(c)
Number of Securities Remaining Available for Future Issuance under Equity Compensation Plans (Excluding Securities Reflected in Column (a))
|
|
||||
|
|
|
|
|
|
|
|
||||
Equity compensation plans approved by security holders
|
|
2,743,978
|
|
(2)
|
$
|
10.09
|
|
|
5,231,990
|
|
(3)
|
Equity compensation plans not approved by security holders
|
|
—
|
|
|
|
|
—
|
|
|
||
|
|
|
|
|
|
|
|
||||
Total
|
|
2,743,978
|
|
|
$
|
10.09
|
|
|
5,231,990
|
|
|
Number
|
|
Description
|
|
Filed Herewith /
Incorporated by
Reference from
|
|
|
|
|
|
2.1
|
|
Agreement and Plan of Merger, dated August 12, 2012, by and among Comverse Technology, Inc., Verint Systems Inc. and Victory Acquisition I LLC*
|
|
Form 8-K filed on August 13, 2012
|
2.2
|
|
Agreement and Plan of Merger, dated January 6, 2014, by and among Verint Systems Inc., Kiwi Acquisition Inc., Kay Technology Holdings, Inc. and Accel-KKR Capital Partners III, LP*
|
|
Form 8-K filed on January 6, 2014
|
2.3
|
|
Distribution Agreement, dated as of October 31, 2012, by and between Comverse Technology, Inc. and Comverse, Inc.
|
|
Comverse, Inc. Current Report on Form 8-K filed with the SEC on November 2, 2012
|
2.4
|
|
Tax Disaffiliation Agreement, dated as of October 31, 2012, by and between Comverse Technology, Inc. and Comverse, Inc.
|
|
Comverse, Inc. Current Report on Form 8-K filed with the SEC on November 2, 2012
|
3.1
|
|
Amended and Restated Certificate of Incorporation of Verint Systems Inc.
|
|
Form S-1 (Commission File No. 333-82300) effective on May 16, 2002
|
3.2
|
|
Amended and Restated By-laws of Verint Systems Inc. (as amended as of March 19, 2015)
|
|
Form 8-K filed on March 25, 2015
|
3.3
|
|
Amended and Restated Certificate of Designation, Preferences and Rights of the Series A Convertible Perpetual Preferred Stock of Verint Systems Inc.
|
|
Form 10-Q filed on September 6, 2012
|
4.1
|
|
Specimen Common Stock certificate
|
|
Form S-1 (Commission File No. 333-82300) effective on May 16, 2002
|
4.2
|
|
Specimen Series A Convertible Perpetual Preferred Stock certificate
|
|
Form 10-K filed on March 17, 2010
|
4.3
|
|
Indenture, dated as of June 18, 2014, between Verint Systems Inc. and Wilmington Trust, National Association, as trustee.
|
|
Form 8-K filed on June 18, 2014
|
4.4
|
|
First Supplemental Indenture, dated as of June 18, 2014, between Verint Systems Inc. and Wilmington Trust, National Association, as trustee.
|
|
Form 8-K filed on June 18, 2014
|
10.1
|
|
Form of Indemnification Agreement
|
|
Form S-1 (Commission File No. 333-82300) effective on May 16, 2002
|
10.2
|
|
Verint Systems Inc. 2010 Long-Term Stock Incentive Plan
|
|
Form S-8 (Commission File No. 333-169768) effective on October 5, 2010
|
10.3
|
|
Amendment No. 1 to Verint Systems Inc. 2010 Long-Term Stock Incentive Plan
|
|
Form 8-K filed on June 19, 2012
|
10.4
|
|
Vovici Corporation Amended and Restated Stock Plan
|
|
Form 10-K filed on April 2, 2012
|
10.5
|
|
Amended and Restated Comverse Technology, Inc. 2011 Stock Incentive Compensation Plan
|
|
Form S-8 (Commission File No. 333-189062) effective on June 3, 2013
|
10.6
|
|
Verint Systems Inc. 2015 Long-Term Stock Incentive Plan
|
|
Form 8-K filed on June 26, 2015
|
10.7
|
|
Verint Systems Inc. Stock Bonus Program**
|
|
Form 10-K filed on March 30, 2016
|
10.8
|
|
Form of Time-Based Restricted Stock Unit Award Agreement for Grants Subsequent to March 2014**
|
|
Form 10-K filed on March 31, 2014
|
10.9
|
|
Form of Performance-Based Restricted Stock Unit Award Agreement for Grants Subsequent to March 2015**
|
|
Form 10-K filed on March 27, 2015
|
10.10
|
|
Form of Performance-Based Restricted Stock Unit Award Agreement for Grants Subsequent to March 2016**
|
|
Form 10-K filed on March 30, 2016
|
10.11
|
|
Form of Time-Based Restricted Stock Unit Award Agreement for Grants Subsequent to March 2016**
|
|
Form 10-K filed on March 30, 2016
|
10.12
|
|
Form of Performance-Based Restricted Stock Unit Award Agreement for Grants Subsequent to March 2017**
|
|
Filed herewith
|
10.13
|
|
Credit Agreement dated as of April 29, 2011 among Verint Systems Inc., as Borrower, the lenders from time to time party thereto, and Credit Suisse AG, as administrative agent and collateral agent
|
|
Form 8-K filed on May 2, 2011
|
10.14
|
|
Amendment and Restatement Agreement, dated as of March 6, 2013, among Verint Systems Inc., the lenders party thereto, and Credit Suisse AG, as administrative agent and collateral agent, including the Amended and Restated Credit Agreement, dated as of March 6, 2013, among Verint Systems Inc., as Borrower, the lenders from time to time party thereto, and Credit Suisse AG, as administrative agent and collateral agent attached as Exhibit A thereto
|
|
Form 8-K filed on March 8, 2013
|
10.15
|
|
Amendment No. 1, Incremental Amendment and Joinder Agreement dated February 3, 2014 to the Amended and Restated Credit Agreement, dated as of March 6, 2013, among Verint Systems Inc., as Borrower, the lenders from time to time party thereto, and Credit Suisse AG, as administrative agent and collateral agent
|
|
Form 8-K filed on February 3, 2014
|
10.16
|
|
Amendment No. 2, dated February 3, 2014 to the Amended and Restated Credit Agreement, dated as of March 6, 2013, among Verint Systems Inc., as Borrower, the lenders from time to time party thereto, and Credit Suisse AG, as administrative agent and collateral agent
|
|
Form 8-K filed on February 3, 2014
|
10.17
|
|
Amendment No. 3, dated February 3, 2014 to the Amended and Restated Credit Agreement, dated as of March 6, 2013, among Verint Systems Inc., as Borrower, the lenders from time to time party thereto, and Credit Suisse AG, as administrative agent and collateral agent
|
|
Form 8-K filed on February 3, 2014
|
10.18
|
|
Amendment No. 4, dated March 7, 2014 to the Amended and Restated Credit Agreement, dated as of March 6, 2013, among Verint Systems Inc., as Borrower, the lenders from time to time party thereto, and Credit Suisse AG, as administrative agent and collateral agent
|
|
Form 8-K filed on March 10, 2014
|
10.19
|
|
Amendment No. 5, Incremental Amendment and Joinder Agreement dated June 18, 2014 to the Amended and Restated Credit Agreement, dated as of March 6, 2013, among Verint Systems Inc., as Borrower, the lenders from time to time party thereto, and Credit Suisse AG, as administrative agent and collateral agent.
|
|
Form 8-K filed on June 18, 2014
|
10.20
|
|
Employment Agreement, dated February 23, 2010, between Verint Systems Inc. and Dan Bodner**
|
|
Form 8-K filed on February 23, 2010
|
10.21
|
|
Amended and Restated Employment Agreement, dated July 13, 2011, between Verint Systems Inc. and Douglas Robinson**
|
|
Form 8-K filed on July 14, 2011
|
10.22
|
|
Second Amended and Restated Employment Agreement, dated July 13, 2011, between Verint Systems Inc. and Elan Moriah**
|
|
Form 8-K filed on July 14, 2011
|
10.23
|
|
Second Amended and Restated Employment Agreement, dated July
13, 2011, between Verint Systems Inc. and Peter Fante**
|
|
Form 8-K filed on July 14, 2011
|
10.24
|
|
Summary of the Terms of Verint Systems Inc. Executive Officer Annual Bonus Plan**
|
|
Form 10-K filed on March 27, 2015
|
10.25
|
|
Federal Income Tax Sharing Agreement, dated as of January 31, 2002, between Comverse Technologies, Inc. an Verint Systems Inc.
|
|
Form S-1 (Commission File No. 333-82300) effective on May 16, 2002
|
12.1
|
|
Ratios of Earnings to Fixed Charges and Ratios of Earnings to Combined Fixed Charges and Preference Security Dividends
|
|
Filed herewith
|
21.1
|
|
Subsidiaries of Verint Systems Inc.
|
|
Filed herewith
|
23.1
|
|
Consent of Deloitte & Touche LLP, Independent Registered Public Accounting Firm
|
|
Filed herewith
|
31.1
|
|
Certification of the Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
|
|
Filed herewith
|
31.2
|
|
Certification of the Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
|
|
Filed herewith
|
32.1
|
|
Certification of the Chief Executive Officer pursuant to Securities Exchange Act Rule 13a-14(b) and 18 U.S.C. Section 1350 (1)
|
|
Filed herewith
|
32.2
|
|
Certification of the Chief Financial Officer pursuant to Securities Exchange Act Rule 13a-14(b) and 18 U.S.C. Section 1350 (1)
|
|
Filed herewith
|
101.INS
|
|
XBRL Instance Document
|
|
Filed herewith
|
101.SCH
|
|
XBRL Taxonomy Extension Schema Document
|
|
Filed herewith
|
101.CAL
|
|
XBRL Taxonomy Extension Calculation Linkbase Document
|
|
Filed herewith
|
101.DEF
|
|
XBRL Taxonomy Extension Definition Linkbase Document
|
|
Filed herewith
|
101.LAB
|
|
XBRL Taxonomy Extension Label Linkbase Document
|
|
Filed herewith
|
101.PRE
|
|
XBRL Taxonomy Extension Presentation Linkbase Document
|
|
Filed herewith
|
|
VERINT SYSTEMS INC.
|
|
|
|
|
March 28, 2017
|
/s/ Dan Bodner
|
|
Dan Bodner
|
|
President and Chief Executive Officer
|
|
|
March 28, 2017
|
/s/ Douglas E. Robinson
|
|
Douglas E. Robinson
|
|
Chief Financial Officer
|
Name
|
|
Title
|
|
Date
|
|
|
|
|
|
/s/ Dan Bodner
|
|
Chief Executive Officer and President, and Director
|
|
March 28, 2017
|
Dan Bodner
|
|
(Principal Executive Officer)
|
|
|
|
|
|
|
|
/s/ Douglas E. Robinson
|
|
Chief Financial Officer
|
|
March 28, 2017
|
Douglas E. Robinson
|
|
(Principal Financial Officer and Principal Accounting Officer)
|
|
|
|
|
|
|
|
/s/ Victor A. DeMarines
|
|
Chairman of the Board of Directors
|
|
March 28, 2017
|
Victor A. DeMarines
|
|
|
|
|
|
|
|
|
|
/s/ John R. Egan
|
|
Director
|
|
March 28, 2017
|
John R. Egan
|
|
|
|
|
|
|
|
|
|
/s/ William H. Kurtz
|
|
Director
|
|
March 28, 2017
|
William H. Kurtz
|
|
|
|
|
|
|
|
|
|
/s/ Larry Myers
|
|
Director
|
|
March 28, 2017
|
Larry Myers
|
|
|
|
|
|
|
|
|
|
/s/ Richard Nottenburg
|
|
Director
|
|
March 28, 2017
|
Richard Nottenburg
|
|
|
|
|
|
|
|
|
|
/s/ Howard Safir
|
|
Director
|
|
March 28, 2017
|
Howard Safir
|
|
|
|
|
|
|
|
|
|
/s/ Earl Shanks
|
|
Director
|
|
March 28, 2017
|
Earl Shanks
|
|
|
|
|
1
|
RESTRICTED STOCK UNITS; VESTING
|
(a)
|
Subject to the terms of this Agreement, the Company hereby grants to Grantee the target number of performance-based restricted stock units (as may be further defined under the terms of the Plan, “
Restricted Stock Units
”) indicated in the Notice of Grant, and if provided in the Notice of Grant, the opportunity to earn additional Restricted Stock Units
4
(if applicable, the “
Overachievement Units
”).
|
(b)
|
Subject to the terms of this Agreement, Grantee’s right to receive all or any portion of the Restricted Stock Units will be contingent upon the Company’s achievement of one or more performance goals specified in the performance matrix attached as
Exhibit A
to this Agreement (the “
Performance Matrix
”) measured over the performance period(s) specified in the Performance Matrix.
|
(c)
|
If and when the Restricted Stock Units vest in accordance with the terms of the Plan, this Agreement, and the Notice of Grant without forfeiture, and upon the satisfaction of all other applicable conditions as to the Restricted Stock Units, one Share shall be issuable to Grantee for each Restricted Stock Unit that vests on such date, which Shares, except as otherwise provided herein or in the Notice of Grant, will be free of any Company-imposed transfer restrictions. Notwithstanding any other provision of this Agreement, the Company reserves the right to settle the Award in cash or cancel the award for cash, based on the Fair Market Value of the Shares on the applicable vesting dates, subject to required withholding and in accordance with the customary payroll practices of the entity employing Grantee.
|
(a)
|
Generally
. Vesting of the Restricted Stock Units shall be in accordance with the Performance Matrix. If the calculations specified on the Performance Matrix would result in the vesting of a fraction of a Restricted Stock Unit, the result of the calculation will be rounded down to the nearest whole Restricted Stock Unit.
|
(b)
|
Determination of Earned Award
. Not later than 60 days following the Board’s receipt of the Company’s audited financial statements covering the final year of the performance period applicable to a given category of Restricted Stock Units, the Committee will determine (i) whether and to what extent the performance goal(s) have been satisfied, (ii) the number of Restricted Stock Units vesting hereunder pursuant to the terms hereof, and (iii) whether all other conditions to receipt of the Shares have been met. The Committee’s determination of the foregoing shall be final and binding on Grantee absent a showing of manifest error. Notwithstanding any other provision of this Agreement, no Restricted Stock Units for a given category shall vest (x) until the Committee has made the foregoing determinations and (y) prior to the date or dates discussed in the next paragraph.
|
(c)
|
Time Vesting Limitation
. For the avoidance of doubt, notwithstanding the determination of the Board or the Committee pursuant to the previous paragraph, no Restricted Stock Units will vest prior to the date or dates specified in the Notice of Grant.
|
(d)
|
Other Vesting Provisions
. Any Restricted Stock Units that do not become vested based on the foregoing provisions will be automatically forfeited by Grantee without consideration. Vesting shall cease upon the date Grantee’s Continuous Service terminates for any reason, unless otherwise determined by the Board or the Committee in its sole discretion or otherwise provided in a separate written agreement between the parties.
|
(a)
|
Except as otherwise provided herein, Grantee’s right to receive any of the Restricted Stock Units is contingent upon his or her remaining in the Continuous Service of the Company or a Subsidiary or Affiliate through the respective vesting dates specified in the Notice of Grant and hereunder. If Grantee’s Continuous Service terminates for any reason, all Restricted Stock Units which are then unvested shall, unless otherwise determined by the Board or the Committee in its sole discretion or subject to a separate written agreement between the parties, be cancelled and the Company shall thereupon have no further obligation thereunder. For the avoidance of doubt, subject to a separate written agreement between the parties, Grantee acknowledges and agrees that he or she has no expectation that any Restricted Stock Units will vest on the termination of his or her Continuous Service for any reason and that he or she will not be entitled to make a claim for any loss occasioned by such forfeiture as part of any claim for breach of his or her employment or service contract or otherwise.
|
(a)
|
Subject to Section 1.6 and any other applicable conditions hereunder, as soon as administratively practicable following the vesting of Restricted Stock Units in accordance with the terms of this Agreement and the Notice of Grant (but in no event later than the date the short-term deferral period under Section 409A of the Code expires with respect to such vested Shares), the Company shall issue the applicable Shares and, at its option, (i) deliver or cause to be delivered to Grantee a certificate or certificates for the applicable Shares or (ii) transfer or arrange to have transferred the Shares to a brokerage account of Grantee designated by the Company.
|
(b)
|
Notwithstanding the foregoing, the issuance of Shares upon the vesting of a Restricted Stock Unit shall be delayed in the event the Company reasonably anticipates that the issuance of Shares would constitute a violation of U.S. federal securities laws, other applicable law, or Nasdaq rules. If the issuance of the Shares is delayed by the provisions of this paragraph, such issuance shall occur at the earliest date at which the Company reasonably anticipates issuing the Shares will not cause such a violation. For purposes of this paragraph, the issuance of Shares that would cause inclusion in gross income or the application of any penalty provision or other provision of the Code or other tax legislation applicable to Grantee is not considered a violation of applicable law.
|
(a)
|
Except as provided herein, Grantee shall not have any rights as a stockholder with respect to any Shares to be distributed under this Agreement until he, she or it has become the holder of such Shares as provided in this Agreement. Until delivery of such Shares (or other settlement of the Award hereunder), Grantee will have only the rights of a general unsecured creditor of the Company.
|
(b)
|
The Award is subject to the transferability restrictions under the Plan.
|
(a)
|
The Company shall determine the amount of any withholding or other tax required by law to be withheld or paid by the Company or its Subsidiary with respect to any income recognized by Grantee with respect to the Restricted Stock Units or the issuance of Shares pursuant to the terms of the Restricted Stock Units.
|
(b)
|
Neither the Company nor any Subsidiary, Affiliate or agent makes any representation or undertaking regarding the treatment of any tax or withholding in connection with the grant, vesting or settlement of the Award or the subsequent sale of Shares subject to the Award. The Company and its Subsidiaries and Affiliates do not commit and are under no obligation to structure the Award to reduce or eliminate Grantee’s tax liability, and none of the Company, any of its Subsidiaries or Affiliates, or any of their employees or representatives shall have any liability to Grantee with respect thereto.
|
(c)
|
Notwithstanding the withholding provision in the Plan:
|
(i)
|
If in the tax jurisdiction in which Grantee resides, a tax withholding obligation arises upon vesting of the Award (regardless of when the Shares underlying the Award are delivered to Grantee), or for non-employee directors of the Company in any jurisdiction, on each date that all or a portion of the Award actually vests, if (1) the Company does not have in place an effective registration statement under the Securities Act of 1933, as amended (the “
Securities Act
”) and there is not a Securities Act exemption available under which Grantee may sell Shares or (2) Grantee is subject to a Company-imposed trading blackout, then unless Grantee has made other arrangements satisfactory to the Company, the Company will (x) with respect to employees of the Company, withhold from the Shares to be delivered to Grantee such number of Shares as are sufficient in value (as determined by the Company in its sole discretion) to cover the minimum amount of the tax withholding obligation and (y) with respect to non-employee directors of the Company, settle 40% of the portion of the Award then vesting in cash by paying Grantee cash (in accordance with the Company’s normal payroll practices) equal to the Fair Market Value of one Share for each Restricted Stock Unit being settled in such manner.
|
(ii)
|
If in the tax jurisdiction in which Grantee resides, a tax withholding obligation arises upon delivery of the Shares underlying the Restricted Stock Units (regardless of when vesting occurs), then following each date that all or a portion of the Award actually vests, the Company will defer the delivery of the Shares otherwise deliverable to Grantee until the earliest of: (1) the date Grantee’s employment with the Company (or a Subsidiary or Affiliate) is terminated (by either party), (2) the date that the short-term deferral period under Section 409A of the Code expires with respect to such vested Shares, or (3) the date on which the Company has in place an effective registration statement under the Securities Act or there is a Securities Act exemption available under which Grantee may sell Shares and on which Grantee is not subject to a Company-imposed trading blackout (the earliest of such dates, the “
Delivery Date
”). If on the Delivery Date (x) the Company does not have in place an effective registration statement under the Securities Act and there is not a Securities Act exemption available under which Grantee may sell Shares or (y) Grantee is subject to a Company-imposed trading blackout, then unless Grantee has made other arrangements satisfactory to the Company, the Company will withhold from the Shares to be delivered to Grantee such number of Shares as are sufficient in value (as determined by the Company in its sole discretion) to cover the minimum amount of the tax withholding obligation.
|
(d)
|
Grantee is ultimately liable and responsible for all taxes owed by Grantee in connection with the Award, regardless of any action the Company or any of its Subsidiaries, Affiliates or agents takes with respect to any tax withholding obligations that arise in connection with the Award. Accordingly, Grantee agrees to pay to the Company or its relevant Subsidiary, Affiliate or agent as soon as practicable, including through additional payroll withholding (if permitted under applicable law), any amount of required tax
|
(e)
|
The Committee shall be authorized, in its sole discretion, to establish such rules and procedures relating to the use of Shares of common stock to satisfy tax withholding obligations as it deems necessary or appropriate to facilitate and promote the conformity of Grantee’s transactions under this Agreement with Rule 16b-3 under the Securities Exchange Act of 1934, as amended, if such rule is applicable to transactions by Grantee.
|
2
|
CERTAIN DEFINITIONS
|
•
|
extraordinary transactions or unbudgeted Company merger/acquisitions or similar activity,
|
•
|
changes in applicable tax or other laws, rules, or regulations,
|
•
|
changes in applicable revenue recognition or other accounting rules, requirements, or standards, or
|
•
|
stock repurchases or dividends paid to stockholders,
|
3
|
REPRESENTATIONS OF GRANTEE
|
4
|
NOTICES
|
5
|
BINDING AGREEMENT
|
6
|
ENTIRE AGREEMENT; AMENDMENT
|
7
|
GOVERNING LAW
|
8
|
SEVERABILITY
|
9
|
ONE-TIME GRANT; NO RIGHT TO CONTINUED SERVICE OR PARTICIPATION; EFFECT ON OTHER PLANS
|
10
|
NATURE OF THE GRANT
|
11
|
NO STRICT CONSTRUCTION
|
12
|
USE OF THE WORD “GRANTEE”
|
13
|
FURTHER ASSURANCES
|
14
|
CONSENT TO TRANSFER PERSONAL DATA
|
15
|
GOVERNING PLAN DOCUMENT
|
16
|
CERTAIN COUNTRY-SPECIFIC PROVISIONS
|
|
|
Year Ended January 31,
|
||||||||||||||||||
(in thousands, except ratios)
|
|
2017
|
|
2016
|
|
2015
|
|
2014
|
|
2013
|
||||||||||
Earnings:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
(Loss) income before provision (benefit) for income taxes
|
|
$
|
(23,474
|
)
|
|
$
|
23,180
|
|
|
$
|
21,403
|
|
|
$
|
63,315
|
|
|
$
|
67,764
|
|
Add: Fixed charges
|
|
43,302
|
|
|
40,218
|
|
|
42,151
|
|
|
34,330
|
|
|
35,900
|
|
|||||
Subtract: Noncontrolling interest in pre-tax income of subsidiaries
|
|
(3,616
|
)
|
|
(5,526
|
)
|
|
(6,293
|
)
|
|
(6,081
|
)
|
|
(5,783
|
)
|
|||||
|
|
$
|
16,212
|
|
|
$
|
57,872
|
|
|
$
|
57,261
|
|
|
$
|
91,564
|
|
|
$
|
97,881
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Fixed Charges and Preference Security Dividends:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Interest expense, including amortization of discounts
|
|
$
|
21,018
|
|
|
$
|
20,586
|
|
|
$
|
27,529
|
|
|
$
|
27,119
|
|
|
$
|
27,544
|
|
Amortization of deferred debt-related costs
|
|
13,944
|
|
|
13,300
|
|
|
9,133
|
|
|
2,662
|
|
|
3,489
|
|
|||||
Interest component of rent expense
|
|
8,340
|
|
|
6,332
|
|
|
5,489
|
|
|
4,549
|
|
|
4,867
|
|
|||||
Total Fixed Charges
|
|
43,302
|
|
|
40,218
|
|
|
42,151
|
|
|
34,330
|
|
|
35,900
|
|
|||||
Dividends on convertible preferred stock (pre-tax)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
211
|
|
|
18,883
|
|
|||||
Total Fixed Charges and Preference Security Dividends
|
|
$
|
43,302
|
|
|
$
|
40,218
|
|
|
$
|
42,151
|
|
|
$
|
34,541
|
|
|
$
|
54,783
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Ratio of Earnings to Fixed Charges
|
|
*
|
|
|
1.4
|
|
|
1.4
|
|
|
2.7
|
|
|
2.7
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Ratio of Earnings to Fixed Charges and Preference Security Dividends
|
|
*
|
|
|
1.4
|
|
|
1.4
|
|
|
2.7
|
|
|
1.8
|
|
Name
|
|
Jurisdiction of Incorporation or Organization
|
Adtech Global (UK) Limited
|
|
United Kingdom
|
BPA Corporate Facilitation Ltd. (1)
|
|
United Kingdom
|
BPA International, Inc. (1)
|
|
New York
|
Ciboodle Ireland Ltd.
|
|
Ireland
|
Ciboodle (Land and Estates) Ltd.
|
|
United Kingdom
|
Ciboodle Ltd.
|
|
United Kingdom
|
CIS Comverse Information Systems Ltd.
|
|
Israel
|
Febrouin Investments Ltd.
|
|
Cyprus
|
Focal Info Israel Ltd.
|
|
Israel
|
Gita Technologies Ltd.
|
|
Israel
|
Global Management Technologies, LLC
|
|
Delaware
|
Iontas Limited
|
|
Ireland
|
KANA Software Ireland Limited
|
|
Ireland
|
KANA Software Ireland No. 2 Limited
|
|
Ireland
|
KANA Solutions Limited
|
|
United Kingdom
|
Lagan Technologies Limited
|
|
United Kingdom
|
MultiVision Holdings Limited
|
|
British Virgin Islands
|
OpinionLab Canada Inc.
|
|
Canada
|
Permadeal Limited
|
|
Cyprus
|
PT Ciboodle Indonesia
|
|
Indonesia
|
Rontal Engineering Applications (2001) Ltd.
|
|
Israel
|
Suntech S.A.
|
|
Brazil
|
Syborg GmbH
|
|
Germany
|
Syborg Grundbesitz GmbH
|
|
Germany
|
Syborg Informationsysteme b.h. OHG
|
|
Germany
|
Trinicom Duetschland Gmbh
|
|
Germany
|
Triniventures BV
|
|
Netherlands
|
UT Techeng Limited
|
|
Cyprus
|
UTX Technologies Limited
|
|
Cyprus
|
Verint Acquisition LLC
|
|
Delaware
|
Verint Americas Inc.
|
|
Delaware
|
Verint CES Ltd.
|
|
Israel
|
Verint Netherlands BV
|
|
Netherlands
|
Verint Systems (Asia Pacific) Limited
|
|
Hong Kong
|
Verint Systems (Australia) PTY Ltd.
|
|
Australia
|
Verint Systems Belgium N.V.
|
|
Belgium
|
Verint Systems Bulgaria
|
|
Bulgaria
|
Verint Systems B.V.
|
|
The Netherlands
|
Verint Systems Canada Inc.
|
|
Canada
|
Verint Systems Cayman Limited
|
|
Cayman Islands
|
Verint Systems GmbH
|
|
Germany
|
Verint Systems (India) Private Ltd.
|
|
India
|
Verint Systems Japan K.K.
|
|
Japan
|
Verint Systems Ltd.
|
|
Israel
|
Name
|
|
Jurisdiction of Incorporation or Organization
|
Verint Systems New Zealand Limited
|
|
New Zealand
|
Verint Systems (Philippines) Corporation
|
|
Philippines
|
Verint Systems Poland sp.z.o.o.
|
|
Poland
|
Verint Systems (PTY) Ltd.
|
|
South Africa
|
Verint Systems SAS
|
|
France
|
Verint Systems (Singapore) Pte. Ltd. (2)
|
|
Singapore
|
Verint Systems (Software and Services) Pte Ltd.
|
|
Singapore
|
Verint Systems (Taiwan) Ltd.
|
|
Taiwan (Republic of China)
|
Verint Systems UK Ltd.
|
|
United Kingdom
|
Verint Systems (Zhuhai) Limited
|
|
People’s Republic of China
|
Verint Technology Cyprus Ltd.
|
|
Cyprus
|
Verint Technology Inc.
|
|
Delaware
|
Verint Technology UK Limited
|
|
United Kingdom
|
Verint Video Solutions SL
|
|
Spain
|
Verint Witness Systems LLC
|
|
Delaware
|
Verint Witness Systems S.A. de C.V.
|
|
Mexico
|
Verint Witness Systems Services S.A. de C.V.
|
|
Mexico
|
Verint Witness Systems Software, Hardware, E Servicos Do Brasil Ltda
|
|
Brazil
|
Verint WS Holdings Ltd.
|
|
United Kingdom
|
Victory Acquisition I LLC
|
|
Delaware
|
Witness Systems Software (India) Private Limited
|
|
India
|
Dated:
|
March 28, 2017
|
|
By:
|
/s/ Dan Bodner
|
|
|
|
|
Dan Bodner
|
|
|
|
|
President and Chief Executive Officer
|
|
|
|
|
Principal Executive Officer
|
Dated:
|
March 28, 2017
|
|
By:
|
/s/ Douglas E. Robinson
|
|
|
|
|
Douglas E. Robinson
|
|
|
|
|
Chief Financial Officer
|
|
|
|
|
Principal Financial Officer
|
Dated:
|
March 28, 2017
|
/s/ Dan Bodner
|
|
|
Dan Bodner
|
|
|
President and Chief Executive Officer
|
|
|
Principal Executive Officer
|
Dated:
|
March 28, 2017
|
/s/ Douglas E. Robinson
|
|
|
Douglas E. Robinson
|
|
|
Chief Financial Officer
|
|
|
Principal Financial Officer
|