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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, 2018
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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 use in or with 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 trade compliance, anti-corruption, information security, data privacy and protection, tax, labor, government contracts, 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, and offering and maintaining a broad solution portfolio;
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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 the successor to CTI’s business operations, Mavenir Inc. (“Mavenir”), being unwilling or unable to provide us with certain indemnities 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 or standards, 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
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Data Processing.
Our
Actionable Intelligence platform facilitates the process of taking structured and unstructured data from multiple 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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Reduce Complexity and Become More Agile to Adapt Faster.
Many organizations have complex environments that were put together over many years with multiple legacy systems from many different vendors deployed in silos across the enterprise. To reduce complexity, they are looking for new solutions that are open and flexible and make it simple to address evolving requirements, while protecting their legacy investments. Organizations also are seeking open platforms that address their customer engagement needs across many enterprise functions, including the contact center, back-office and branch operations, self-service, ecommerce, customer experience, marketing, IT, and compliance.
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Modernize Customer Engagement IT Architectures.
Many organizations are looking to modernize their legacy customer engagement operations by transitioning to the cloud, adopting modern architectures that facilitate the orchestration of disparate systems and the sharing of data across enterprise functions. Organizations, which are at different stages of moving to the cloud and other modernization initiatives also are looking for vendors that can help them evolve customer engagement at their own pace with minimal disruption to their operations.
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Automate Customer Engagement Operations.
Many organizations are looking to improve the customer experience and increase revenue, while at the same time reducing cost. To achieve this, they seek solutions that incorporate machine learning and analytics to reduce manual work and increase workforce efficiency through automation. They also seek to empower their customers with self-service backed by AI-powered bots, and human/bot collaboration, to elevate the customer experience in a fast, personalized way.
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Simplifying Customer
E
ngagement.
We offer solutions that are open, easy to deploy, and simple to use. Our open portfolio is designed to integrate into organizations’ current and evolving technology environments and to share data seamlessly across the organization. This enables customers to protect their existing investments, as they can “start anywhere” within the Verint portfolio based on their business-specific requirements and expand over time. Our open portfolio is also compatible with leading providers of call center communications solutions, providing organizations flexibility to select the most suitable communications solution for their contact centers, while leveraging Verint’s portfolio for elevating the customer experience and reducing cost. We believe this compatibility is particularly important now as the contact center communications market is going through change with new entrants offering disruptive approaches to communications.
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Modernizing Customer Engagement.
We offer organizations a smooth transition to the cloud, and through our hybrid cloud model, they can deploy solutions from our portfolio in public cloud (SaaS), private cloud and perpetual license models, or combinations of these. Our API-rich portfolio provides organizations the ability to easily share data across the enterprise and integrate with third-party applications. Our modern and open portfolio also makes our solutions compatible with IT initiatives for modernizing enterprise architectures.
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Automating Customer Engagement.
We enable organizations to draw on the power of automation to reduce repetitive, manual tasks, increase employee efficiency, and lower cost. Our strategy is to infuse automation capabilities throughout our solution portfolio to enable employees to focus on more strategic work, empower consumers with AI bots so they can serve themselves, and support human/bot collaboration. Our automation capabilities deliver intelligence and context in real-time, reduce errors in manual work, ensure adherence to compliance requirements, and enable customer experiences that are faster, personalized, and more enjoyable.
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Workforce Engagement
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Self-Service
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Voice of the Customer
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Compliance and Fraud
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Product Name
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Description
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Automated Quality Management
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Automates the entire quality management (QM) process, from scoring evaluations to assigning coaching. Delivers consistent, calibrated scoring and new levels of employee performance and transparency, bringing a modern, employee-empowering, and cost-effective approach to QM.
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Automated Verification
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Automates testing and verification of systems across multiple applications (e.g., ACD, IVR, recording, desktop applications, routers, firewalls) to ensure optimum operation. Actively checks systems for issues and proactively simulates user transactions to validate performance. Provides enhanced control and awareness of system health, status, and performance to avoid issues with service availability, data integrity, and data breaches.
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Branch Surveillance and Investigation
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Helps financial institutions, retailers, and other organizations identify security threats and vulnerabilities, mitigate risk, ensure operational compliance, and improve fraud investigations. Offers real-time intelligence and protection to enhance the customer experience, while safeguarding people, property, and assets. Features video recording and analytics to heighten protection, improve performance, reduce costs, and provide rapid action/response when required.
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Case Management
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Allows organizations to automate and adapt business processes rapidly in response to changing market and customer requirements. Tracks the progress of customer and internal issues as they are resolved between various parties in the organization, helping deliver end-to-end case lifecycle management using business rules and service level agreements (SLAs).
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Chat Engagement
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Enables employees to help online customers 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 abandonment of online transactions. Guides customers through online processes using chat in conjunction with co-browsing.
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Coaching/Learning
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Provides a framework for consistent, performance-based mentoring of employees by supervisors and the automated delivery of training right to the employee desktop. Can be scheduled at the best times to minimize impact on service levels, and enable employees to engage and improve their skills on-demand.
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Compliance Recording
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Reliably and securely captures, encrypts, archives, searches, and replays interactions for compliance and liability protection. Enables organizations and employees to protect credit card data and personal information (data compliance), adhere to rules for recording and telemarketing practices (communications compliance), proactively address complaints, and help prevent identity theft.
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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.
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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, increase employee productivity and capacity, enhance compliance, and heighten the overall efficiency, cost, and quality of customer service.
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Digital Feedback
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Features an enterprise solution that captures customer-initiated feedback via web and mobile channels during key moments in the customer journey, and empowers organizations to analyze and act in real-time on that feedback to deliver demonstrable business value.
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Email Engagement
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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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Employee Desktop
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Unifies the disparate applications on an employee’s desktop. Presents on one screen all of the contextual customer information, relevant knowledge, and business process guidance that an employee needs to handle interactions in any channel, without having to toggle between numerous screens and applications.
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Enterprise Feedback
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Provides an enterprise-class platform to help organizations gain a complete view of the voice of their customers and employees through company-initiated surveys delivered via mobile, email, web, IVR, and SMS channels, together with the ability to analyze and act on that feedback to achieve desired outcomes.
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Financial Compliance
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Improves compliance in trading room, contact center, and financial back-office operations by capturing voice, video, desktop, and text interactions across multiple channels, including collaboration tools (e.g., Skype for Business and Cisco Jabber). Delivers reliable, robust recording, indexing, archiving, and retrieval of interactions and transactions to address complex challenges, including MiFID II, trading floor compliance, collaboration compliance, legal hold, and more.
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Full-Time Recording
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Enables enterprise recording to 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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Gamification
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Applies automated game mechanics to energize employee engagement, communicate personal and organizational goals, measure and acknowledge achievements, inspire collaboration, and motivate teams. Delivers key performance indicator (KPI)-linked programs to transform the process of acquiring, maintaining, and improving the skills, knowledge, and behaviors necessary for employees to enhance quality, customer engagement, sales, and other expertise.
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Identity Analytics
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Combines automated recorder-embedded “passive” voice biometrics technology with multifactor metadata analytics to screen calls against the databases of both customer and known fraudster voiceprints. Offers “upstream fraud detection” functionality to identify suspicious caller behavior within voice self-service interactions, and helps improve experiences by authenticating legitimate customers faster, reducing call handling and fraud-related losses.
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Internal Communities
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Supports employee engagement, collaboration, and enterprise social networking through open and closed micro-communities, peer-to-peer support forums, communications blogs, wikis, activity streams, and online resources. Enables knowledge and best practice sharing in a high-value, low-effort manner, enhancing relationships, productivity, and efficiency.
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Knowledge Management
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Provides a central repository of up-to-date information to deliver the right knowledge to users in the contact center and to customers through self-service. Provides answers quickly by searching, browsing, or following guided processes, with personalized results tailored to the customer’s context. Helps increase first contact resolution, improve the consistency and quality of answers, enhance compliance with regulations and company processes, and reduce employee training time.
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Mobile Workforce
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Comprises a family of mobile applications, offering anytime, anywhere access to important operational information. Allows employees to access and change schedules and view performance information, and enables the convenient collection of in-the-moment feedback through device-friendly survey formats over the web, email, and SMS, as well as on site in retail stores and sporting venues.
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Performance Management
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Provides a complete, closed-loop solution to manage individual and departmental performance against goals. Provides a comprehensive view of 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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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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Social Analytics
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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/address issues and concerns expressed through these channels.
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Speech Analytics
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Automatically analyzes and identifies trends, themes, and the root causes driving customer call volumes in order to proactively respond to issues and act on opportunities that enhance the customer experience and support business objectives.
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Text Analytics
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Performs root cause analysis on the drivers and trends driving customer interactions through text-based communications channels-including survey verbatims, email, and customer service chat sessions-to improve performance, optimize processes, and enhance the customer experience.
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Virtual Assistant
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Uses artificial intelligence (AI) and machine learning to provide conversational access to information, get answers to complex questions, and orchestrate self-service transactions across voice and digital channels. Predicts user intent based on context and initiates best next actions based on business rules in order to deliver successful outcomes.
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Voice Self-Service
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Provides natural language, 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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Voice Self-Service Fraud Detection
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Automates and provides upstream fraud detection based on real-time analysis of over 60 parameters of caller behavior in voice self-service across multiple calls and programs. Identifies and flags suspicious callers based on threat level, and alerts the enterprise so action can be taken to mitigate risk prior to account takeover.
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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. 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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Work Manager
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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 SLAs based on available employees with the right skills.
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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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Security Threats are Pervasive and Becoming More Complex
. Governments, critical infrastructure providers, and enterprises face many types of security threats from criminal and terrorist organizations and foreign governments. Some of these security threats come from well-organized and well-funded organizations that utilize new and increasingly sophisticated methods. As a result, security and intelligence organizations find it more complex to detect, investigate and neutralize threats. Many of these organizations are seeking to deploy more advanced data mining solutions that can help them capture and analyze data from multiple sources to effectively and efficiently address the challenge of increased complexity.
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Shortage of Security Analysts Make It Difficult to Address the Growing Complexity of Security Threats
. Security organizations are using data mining solutions to help conduct investigations and generate actionable insights. Typically, data mining solutions require security organizations to employ intelligence analysts and data scientists to operate them. However, there is a shortage of such qualified personnel globally leading to elongated investigations and increased risk that security threats go undetected or are not addressed. To overcome this challenge, many security organizations are seeking advanced data mining solutions that automate functions historically performed manually to improve the quality and speed of investigations and intelligence production. These organizations are also increasingly seeking artificial intelligence and other advanced data analysis tools to gain intelligence faster with fewer analysts and data scientists.
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Security Organizations are Looking for Predictive Intelligence as a Force Multiplier.
Predicative intelligence is generated by correlating massive amounts of data from a wide range of disparate sources to uncover previously unknown connections, to identify suspicious behaviors using advanced analytics and to predict future events. Predictive intelligence is a force multiplier, enabling security organizations to allocate resources more effectively to prioritize various operational tasks based on actionable intelligence. Security organizations are seeking advanced data mining solutions that can generate accurate and actionable predictive intelligence to shorten investigation times and empower their teams with greater insights.
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Address the Increased Complexity of Security Threats with Advanced Data Mining Software, Proven Intelligent Methodologies and Deep Domain Expertise.
Verint has a long history of working closely with leading security organizations around the world and has designed its data mining software portfolio based on a thorough understanding of our customers’ needs, proven intelligence methodologies and deep domain expertise. We believe this experience positions us well to expand existing customer relationships, win new customers, and continue to grow our data mining software portfolio to address evolving and more complex security threats.
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Leverage Automation Technologies to Reduce Dependency on Security Analysts and Data Scientists.
Security analysts and data scientists are critical to conducting security investigations in an environment of growing complexity. However, given a shortage of these skilled resources, it is important to reduce the dependency on them by automating tedious and repetitive functions that previously required manual operation. Our strategy is to increase the use of automation and artificial intelligence technologies across our portfolio and introduce advanced data mining software that can further automate the intelligence and investigative processes for our customers, while reducing dependency on large numbers of intelligence analysts and data scientists.
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Improve the Effectiveness of Security Organizations with Predictive Intelligence Capabilities.
Our data mining software portfolio provides our customers the capability to capture and analyze data and to generate predictive intelligence.
Our strategy is to further enhance our software to empower security organizations with more accurate predictive intelligence by leveraging analytics and machine learning technologies that can correlate massive amounts of data from a wide range of disparate sources. Our solutions are engineered to collect and analyze vast amounts of data from multiple and diverse sources and leverage artificial intelligence, as well as other advanced analysis tools, to generate intelligence and predict future events, shortening the time to intelligence, reducing the number of routine tasks and empowering our customers to execute their missions faster and more efficiently.
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Product Name
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Description
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Cyber Security
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Our cyber security software captures cyber security data and applies machine learning and behavioral analytics to empower an organization’s Security Operations Center. “Virtual Analysts” automate the process of detecting, investigating and responding to advanced cyber-attacks and drive intelligence to the security operations team.
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Intelligence Fusion Center (IFC) and Web and Social Intelligence
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Our Intelligence Fusion software enables security analysts to work more efficiently by fusing cross-organizational data-sources, generating and surfacing valuable insights, and turning knowledge into actions and predictive intelligence. Our Web & Social Intelligence software enables the collection, fusion and analysis of data from the web, including the deep web and dark nets, from social media blogs and from the media.
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Network Intelligence Suite
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Our network intelligence data mining software helps security organizations generate critical intelligence from large amount of data captured from a variety of network and open sources.
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Situational Intelligence
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Our Situational Intelligence software delivers intelligence to help organizations increase situational awareness, improve security responsiveness and realize greater operational efficiency. It captures and fuses 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 enables security organizations to quickly fuse, analyze, and report information, and take action on risks, alarms, and incidents.
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National Security
agencies are using Verint solutions to prevent terrorism, collect intelligence and investigate security threats.
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Law Enforcement Agencies
are using Verint solutions 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.
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Critical Infrastructure
, such as airports, transportation systems, power plants, public and government facilities, are using Verint solutions to improve efficiency and effectiveness of physical security and to detect and respond to cyber threats.
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Enterprises
are using Verint solutions to improve efficiency and effectiveness of security of physical assets and safety of people, to detect and respond to cyber threats, and to investigate fraud.
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Telecommunication Carriers
are using Verint solutions to comply with certain government regulations requiring them to assist the government in their evidence and intelligence collection processes.
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Terrorism
- Tracking terrorist organizations and generating actionable intelligence for detecting and preventing terror attacks.
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Drug Trafficking
- Identifying local and international drug networks, running complex investigations, generating legal evidence and taking action against traffickers.
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Criminal Investigations
- Accelerating investigations through behavioral profiles and visual link analysis and revealing investigation clues.
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Advanced Cyber Threats
- Detecting breaches across attack chains and automating cyber investigations.
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Physical Security
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Evaluating and responding more efficiently to incidents to ensure facility and asset protection, as well as employee safety.
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Poaching
- Generating intelligence about sellers, middlemen and buyers of contraband.
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Financial Crime
- Fusing data from financial databases, the web and other sources to identify and investigate suspicious financial transactions.
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Natural Disasters
- Empowering field teams with intelligence to quickly zero-in on areas of need and provide urgent help.
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Border Control
- Tracking and preventing illegal border activity.
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Our direct sales teams are focused on large and mid-sized customers and, in many cases, co-sell with our other channels and sales agents.
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Our indirect sales teams are focused on developing and supporting relationships with our indirect channels, which provide us with broader market coverage, including access to their customer bases, integration services, and presence in certain geographies and vertical markets.
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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 domain expertise, 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 of unforeseen or underestimated challenges associated with an acquired company’s business or operations;
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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;
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political, security, and economic instability or corruption;
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changes in and compliance with both international and local laws and regulations, including those related to trade compliance, anti-corruption, information security, data privacy and protection, tax, labor, currency restrictions, and other requirements;
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differences in tax regimes and potentially adverse tax consequences of operating in foreign countries;
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product customization or localization issues;
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preferences for or policies and procedures that protect local suppliers;
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legal uncertainties regarding intellectual property rights or rights and obligations generally; and
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challenges or delays in collection of accounts receivable.
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limit our ability to obtain additional debt financing in the future for working capital, capital expenditures, acquisitions, or other general corporate purposes;
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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;
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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
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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.
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incur additional indebtedness or liens or issue preferred stock;
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pay dividends or make other distributions or repurchase or redeem our stock or subordinated indebtedness;
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engage in transactions with affiliates;
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engage in sale-leaseback transactions;
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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, 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
|
|
|
|
|
|
|
||||
Year Ended January 31, 2018:
|
|
|
|
|
||||
First quarter
|
|
$
|
35.90
|
|
|
$
|
44.70
|
|
Second quarter
|
|
$
|
38.55
|
|
|
$
|
44.25
|
|
Third quarter
|
|
$
|
37.05
|
|
|
$
|
44.10
|
|
Fourth quarter
|
|
$
|
38.35
|
|
|
$
|
44.55
|
|
January 31,
|
|
2013
|
|
2014
|
|
2015
|
|
2016
|
|
2017
|
|
2018
|
||||||||||||
Verint Systems Inc.
|
|
$
|
100.00
|
|
|
$
|
134.44
|
|
|
$
|
157.93
|
|
|
$
|
108.31
|
|
|
$
|
110.50
|
|
|
$
|
123.52
|
|
NASDAQ Composite Index
|
|
$
|
100.00
|
|
|
$
|
133.35
|
|
|
$
|
152.66
|
|
|
$
|
153.70
|
|
|
$
|
187.33
|
|
|
$
|
249.85
|
|
NASDAQ Computer & Data Processing Index
|
|
$
|
100.00
|
|
|
$
|
145.41
|
|
|
$
|
153.09
|
|
|
$
|
191.82
|
|
|
$
|
222.37
|
|
|
$
|
322.02
|
|
Consolidated Statements of Operations Data
|
||||||||||||||||||||
|
|
Year Ended January 31,
|
||||||||||||||||||
(in thousands, except per share data)
|
|
2018
|
|
2017
|
|
2016
|
|
2015
|
|
2014
|
||||||||||
Revenue
|
|
$
|
1,135,229
|
|
|
$
|
1,062,106
|
|
|
$
|
1,130,266
|
|
|
$
|
1,128,436
|
|
|
$
|
907,292
|
|
Operating income
|
|
$
|
48,630
|
|
|
$
|
17,366
|
|
|
$
|
67,852
|
|
|
$
|
79,111
|
|
|
$
|
122,286
|
|
Net (loss) income
|
|
$
|
(3,454
|
)
|
|
$
|
(26,246
|
)
|
|
$
|
22,228
|
|
|
$
|
36,402
|
|
|
$
|
58,776
|
|
Net (loss) income attributable to Verint Systems Inc.
|
|
$
|
(6,627
|
)
|
|
$
|
(29,380
|
)
|
|
$
|
17,638
|
|
|
$
|
30,931
|
|
|
$
|
53,757
|
|
Net (loss) income attributable to Verint Systems Inc. common shares
|
|
$
|
(6,627
|
)
|
|
$
|
(29,380
|
)
|
|
$
|
17,638
|
|
|
$
|
30,931
|
|
|
$
|
53,583
|
|
Net (loss) income per share attributable to Verint Systems Inc.:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Basic
|
|
$
|
(0.10
|
)
|
|
$
|
(0.47
|
)
|
|
$
|
0.29
|
|
|
$
|
0.53
|
|
|
$
|
1.01
|
|
Diluted
|
|
$
|
(0.10
|
)
|
|
$
|
(0.47
|
)
|
|
$
|
0.28
|
|
|
$
|
0.52
|
|
|
$
|
0.99
|
|
Weighted-average shares:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Basic
|
|
63,312
|
|
|
62,593
|
|
|
61,813
|
|
|
58,096
|
|
|
52,967
|
|
|||||
Diluted
|
|
63,312
|
|
|
62,593
|
|
|
62,921
|
|
|
59,374
|
|
|
53,878
|
|
Consolidated Balance Sheet Data
|
||||||||||||||||||||
|
|
January 31,
|
||||||||||||||||||
(in thousands)
|
|
2018
|
|
2017
|
|
2016
|
|
2015
|
|
2014
|
||||||||||
Total assets
|
|
$
|
2,580,620
|
|
|
$
|
2,362,784
|
|
|
$
|
2,355,735
|
|
|
$
|
2,340,452
|
|
|
$
|
1,768,192
|
|
Long-term debt, including current maturities
|
|
$
|
772,984
|
|
|
$
|
748,871
|
|
|
$
|
738,087
|
|
|
$
|
726,258
|
|
|
$
|
637,670
|
|
Capital lease obligations, including current portions
|
|
$
|
4,350
|
|
|
$
|
68
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Total stockholders’ equity
|
|
$
|
1,132,336
|
|
|
$
|
1,015,040
|
|
|
$
|
1,068,164
|
|
|
$
|
1,004,903
|
|
|
$
|
633,118
|
|
As of and for the year ended January 31,
|
|
|
Description
|
2018
|
|
•
|
Completion of seven business combination throughout the year, for total consideration of approximately $136.0 million.
|
|
|
•
|
Losses on early retirements of debt of $2.2 million, associated with refinancing and amending our Credit Agreement.
|
|
|
•
|
Provisional deferred income tax expense of $15.0 million related to withholding on foreign earnings which may be repatriated.
|
|
|
|
|
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 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.
|
|
|
•
|
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.
|
|
|
•
|
Losses on early retirements of debt of $9.9 million, primarily associated with an amendment to our Credit Agreement.
|
•
|
Many organizations have significant investments in existing legacy systems that they wish to protect. Our open portfolio is designed to easily integrate into customers’ current and evolving technology environments, and easily share data across the organization. Our open portfolio is also compatible with leading providers of call center communications products, which provides organizations flexibility to select the most suitable solutions for their contact centers, while leveraging Verint’s portfolio for the both the contact center and enterprise. We believe this compatibility is particularly important now as the contact center communications market is evolving with new entrants offering disruptive approaches to communications.
|
•
|
Many organizations are looking to modernize their legacy customer engagement operations by transitioning to the cloud, adopting modern architectures that facilitate the orchestration of disparate systems and the sharing of data across enterprise functions. We offer organizations a smooth transition to the cloud, and through our hybrid cloud model, organizations can deploy solutions from our portfolio in public cloud (SaaS), private cloud and perpetual license models, or combinations of these models. Organizations are looking for solutions that incorporate machine learning and analytics to automate work and reduce manual labor. Our solutions enable organizations to draw on the power of automation to reduce repetitive, manual tasks, increase employee efficiency, and lower cost. Our growth will be impacted by the rate of adoption of our new solutions and the rate of market saturation for our legacy, more mature solutions.
|
•
|
Security and intelligence organizations are finding it more difficult to detect, investigate and neutralize threats. Many of these organizations are seeking to deploy more advanced data mining solutions that can help them capture and analyze data from multiple sources to effectively and efficiently address the challenge of the increased complexity and sophistication of today’s security threats and encrypted communications. Verint has a long history of working closely with leading security organizations around the world and has designed its data mining software portfolio based on a deep understanding of our customers’ needs, proven intelligence methodologies and deep domain expertise in an effort to help them address these constantly evolving challenges. Our growth will be impacted by our ability to innovate and work with customers to address the more complex security and intelligence challenges.
|
•
|
Many security organizations are seeking advanced data mining solutions that automate functions historically performed manually to improve the quality and speed of investigations and intelligence production. These organizations are also increasingly seeking artificial intelligence and other advanced data analysis tools such as predictive intelligence to gain intelligence faster with fewer analysts and data scientists, especially given the shortage of qualified personnel in today’s market. Our growth will be impacted by our ability to leverage automation and predictive intelligence technologies to improve the quality and speed of investigations and intelligence production.
|
•
|
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)
|
|
2018
|
|
2017
|
|
2016
|
||||||
Revenue
|
|
$
|
1,135,229
|
|
|
$
|
1,062,106
|
|
|
$
|
1,130,266
|
|
Operating income
|
|
$
|
48,630
|
|
|
$
|
17,366
|
|
|
$
|
67,852
|
|
Net (loss) income attributable to Verint Systems Inc.
|
|
$
|
(6,627
|
)
|
|
$
|
(29,380
|
)
|
|
$
|
17,638
|
|
Net (loss) income per common share attributable to Verint Systems Inc.:
|
|
|
|
|
|
|
|
|
||||
Basic
|
|
$
|
(0.10
|
)
|
|
$
|
(0.47
|
)
|
|
$
|
0.29
|
|
Diluted
|
|
$
|
(0.10
|
)
|
|
$
|
(0.47
|
)
|
|
$
|
0.28
|
|
|
|
Year Ended January 31,
|
|
% Change
|
||||||||||||
(in thousands)
|
|
2018
|
|
2017
|
|
2016
|
|
2018 - 2017
|
|
2017 - 2016
|
||||||
Customer Engagement
|
|
$
|
740,067
|
|
|
$
|
705,897
|
|
|
$
|
694,857
|
|
|
5%
|
|
2%
|
Cyber Intelligence
|
|
395,162
|
|
|
356,209
|
|
|
435,409
|
|
|
11%
|
|
(18)%
|
|||
Total revenue
|
|
$
|
1,135,229
|
|
|
$
|
1,062,106
|
|
|
$
|
1,130,266
|
|
|
7%
|
|
(6)%
|
|
|
Year Ended January 31,
|
|
% Change
|
||||||||||||
(in thousands)
|
|
2018
|
|
2017
|
|
2016
|
|
2018 - 2017
|
|
2017 - 2016
|
||||||
Product revenue
|
|
$
|
399,662
|
|
|
$
|
378,504
|
|
|
$
|
455,406
|
|
|
6%
|
|
(17)%
|
Service and support revenue
|
|
735,567
|
|
|
683,602
|
|
|
674,860
|
|
|
8%
|
|
1%
|
|||
Total revenue
|
|
$
|
1,135,229
|
|
|
$
|
1,062,106
|
|
|
$
|
1,130,266
|
|
|
7%
|
|
(6)%
|
|
|
Year Ended January 31,
|
|
% Change
|
||||||||||||
(in thousands)
|
|
2018
|
|
2017
|
|
2016
|
|
2018 - 2017
|
|
2017 - 2016
|
||||||
Cost of product revenue
|
|
$
|
131,989
|
|
|
$
|
123,279
|
|
|
$
|
145,071
|
|
|
7%
|
|
(15)%
|
Cost of service and support revenue
|
|
276,582
|
|
|
261,978
|
|
|
248,061
|
|
|
6%
|
|
6%
|
|||
Amortization of acquired technology
|
|
38,216
|
|
|
37,372
|
|
|
35,774
|
|
|
2%
|
|
4%
|
|||
Total cost of revenue
|
|
$
|
446,787
|
|
|
$
|
422,629
|
|
|
$
|
428,906
|
|
|
6%
|
|
(1)%
|
|
|
Year Ended January 31,
|
|
% Change
|
||||||||||||
(in thousands)
|
|
2018
|
|
2017
|
|
2016
|
|
2018 - 2017
|
|
2017 - 2016
|
||||||
Research and development, net
|
|
$
|
190,643
|
|
|
$
|
171,070
|
|
|
$
|
177,650
|
|
|
11%
|
|
(4)%
|
|
|
Year Ended January 31,
|
|
% Change
|
||||||||||||
(in thousands)
|
|
2018
|
|
2017
|
|
2016
|
|
2018 - 2017
|
|
2017 - 2016
|
||||||
Selling, general and administrative
|
|
$
|
414,960
|
|
|
$
|
406,952
|
|
|
$
|
412,728
|
|
|
2%
|
|
(1)%
|
•
|
$8.5 million increase in employee compensation and related expenses attributed primarily to additional personnel driven by recent business combinations;
|
•
|
$5.0 million increase in professional fees resulting primarily from legal services provided in connection with recent business combinations;
|
•
|
$4.7 million increase in contractor expenses due primarily to business agility initiatives, including upgrading our business information systems;
|
•
|
$3.3 million charge for impairments of certain acquired customer-related intangible assets in our Customer Engagement segment;
|
•
|
$2.4 increase in stock-based compensation expense due primarily to business combinations that closed during the year ended January 31, 2018, as well as business combinations that closed during the prior year for which a full year of stock-based compensation expense is reflected in the current year;
|
•
|
$2.0 million increase in software subscription expenses related to internal-use software; and
|
•
|
$1.8 million increase in rent expense associated with business combinations that closed during the year ended January 31, 2018, as well as business combinations that closed during the prior year for which a full year of rent expense is reflected in the current year.
|
•
|
$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.
|
|
|
Year Ended January 31,
|
|
% Change
|
||||||||||||
(in thousands)
|
|
2018
|
|
2017
|
|
2016
|
|
2018 - 2017
|
|
2017 - 2016
|
||||||
Amortization of other acquired intangible assets
|
|
$
|
34,209
|
|
|
$
|
44,089
|
|
|
$
|
43,130
|
|
|
(22)%
|
|
2%
|
|
|
Year Ended January 31,
|
|
% Change
|
||||||||||||
(in thousands)
|
|
2018
|
|
2017
|
|
2016
|
|
2018 - 2017
|
|
2017 - 2016
|
||||||
Interest income
|
|
$
|
2,477
|
|
|
$
|
1,048
|
|
|
$
|
1,490
|
|
|
136%
|
|
(30)%
|
Interest expense
|
|
(35,959
|
)
|
|
(34,962
|
)
|
|
(33,885
|
)
|
|
3%
|
|
3%
|
|||
Losses on early retirements of debt
|
|
(2,150
|
)
|
|
—
|
|
|
—
|
|
|
—%
|
|
*
|
|||
Other income (expense):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
Foreign currency gains (losses)
|
|
6,760
|
|
|
(2,743
|
)
|
|
(8,037
|
)
|
|
(346)%
|
|
(66)%
|
|||
(Losses) gains on derivatives
|
|
(17
|
)
|
|
(322
|
)
|
|
394
|
|
|
*
|
|
*
|
|||
Other, net
|
|
(841
|
)
|
|
(3,861
|
)
|
|
(4,634
|
)
|
|
(78)%
|
|
*
|
|||
Total other income (expense), net
|
|
5,902
|
|
|
(6,926
|
)
|
|
(12,277
|
)
|
|
(185)%
|
|
(44)%
|
|||
Total other expense, net
|
|
$
|
(29,730
|
)
|
|
$
|
(40,840
|
)
|
|
$
|
(44,672
|
)
|
|
(27)%
|
|
(9)%
|
|
|
Year Ended January 31,
|
||||||||||
(in thousands)
|
|
2018
|
|
2017
|
|
2016
|
||||||
Provision for income taxes
|
|
$
|
22,354
|
|
|
$
|
2,772
|
|
|
$
|
952
|
|
|
|
January 31,
|
||||||
(in thousands)
|
|
2018
|
|
2017
|
||||
Cash and cash equivalents
|
|
$
|
337,942
|
|
|
$
|
307,363
|
|
Restricted cash and bank time deposits (excluding long term portions)
|
|
33,303
|
|
|
9,198
|
|
||
Short-term investments
|
|
6,566
|
|
|
3,184
|
|
||
Total cash, cash equivalents, restricted cash and bank time deposits, and short-term investments
|
|
$
|
377,811
|
|
|
$
|
319,745
|
|
Total debt, including current maturities
|
|
$
|
772,984
|
|
|
$
|
748,871
|
|
|
|
Year Ended January 31,
|
||||||||||
(in thousands)
|
|
2018
|
|
2017
|
|
2016
|
||||||
Net cash provided by operating activities
|
|
$
|
176,327
|
|
|
$
|
172,415
|
|
|
$
|
156,903
|
|
Net cash used in investing activities
|
|
(144,481
|
)
|
|
(156,028
|
)
|
|
(75,600
|
)
|
|||
Net cash used in financing activities
|
|
(5,503
|
)
|
|
(56,919
|
)
|
|
(10,204
|
)
|
|||
Effect of exchange rate changes on cash and cash equivalents
|
|
4,236
|
|
|
(4,210
|
)
|
|
(4,066
|
)
|
|||
Net increase (decrease) in cash and cash equivalents
|
|
$
|
30,579
|
|
|
$
|
(44,742
|
)
|
|
$
|
67,033
|
|
•
|
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.
|
|
|
Payments Due by Period
|
||||||||||||||||||
(in thousands)
|
|
Total
|
|
< 1 year
|
|
1-3 years
|
|
3-5 years
|
|
> 5 years
|
||||||||||
Long-term debt obligations, including interest
|
|
$
|
944,103
|
|
|
$
|
25,741
|
|
|
$
|
51,055
|
|
|
$
|
441,347
|
|
|
$
|
425,960
|
|
Operating lease obligations
|
|
116,632
|
|
|
21,497
|
|
|
32,223
|
|
|
25,786
|
|
|
37,126
|
|
|||||
Capital lease obligations
|
|
4,699
|
|
|
1,171
|
|
|
2,053
|
|
|
1,475
|
|
|
—
|
|
|||||
Purchase obligations
|
|
109,383
|
|
|
104,398
|
|
|
4,983
|
|
|
2
|
|
|
—
|
|
|||||
Other long-term obligations
|
|
660
|
|
|
374
|
|
|
94
|
|
|
94
|
|
|
98
|
|
|||||
Total contractual obligations
|
|
$
|
1,175,477
|
|
|
$
|
153,181
|
|
|
$
|
90,408
|
|
|
$
|
468,704
|
|
|
$
|
463,184
|
|
VERINT SYSTEMS INC. AND SUBSIDIARIES
|
|
Index to Consolidated Financial Statements
|
|
|
|
|
Page
|
|
|
|
|
January 31,
|
||||||
(in thousands, except share and per share data)
|
|
2018
|
|
2017
|
||||
Assets
|
|
|
|
|
|
|
||
Current Assets:
|
|
|
|
|
|
|
||
Cash and cash equivalents
|
|
$
|
337,942
|
|
|
$
|
307,363
|
|
Restricted cash and bank time deposits
|
|
33,303
|
|
|
9,198
|
|
||
Short-term investments
|
|
6,566
|
|
|
3,184
|
|
||
Accounts receivable, net of allowance for doubtful accounts of $2.2 million and $1.8 million, respectively
|
|
296,324
|
|
|
266,590
|
|
||
Inventories
|
|
19,871
|
|
|
17,537
|
|
||
Deferred cost of revenue
|
|
6,096
|
|
|
3,621
|
|
||
Prepaid expenses and other current assets
|
|
82,090
|
|
|
64,561
|
|
||
Total current assets
|
|
782,192
|
|
|
672,054
|
|
||
Property and equipment, net
|
|
89,089
|
|
|
77,551
|
|
||
Goodwill
|
|
1,388,299
|
|
|
1,264,818
|
|
||
Intangible assets, net
|
|
226,093
|
|
|
235,259
|
|
||
Capitalized software development costs, net
|
|
9,228
|
|
|
9,509
|
|
||
Long-term deferred cost of revenue
|
|
2,804
|
|
|
5,463
|
|
||
Deferred income taxes
|
|
30,878
|
|
|
21,510
|
|
||
Other assets
|
|
52,037
|
|
|
76,620
|
|
||
Total assets
|
|
$
|
2,580,620
|
|
|
$
|
2,362,784
|
|
|
|
|
|
|
|
|
||
Liabilities and Stockholders' Equity
|
|
|
|
|
|
|
||
Current Liabilities:
|
|
|
|
|
|
|
||
Accounts payable
|
|
$
|
84,639
|
|
|
$
|
62,049
|
|
Accrued expenses and other current liabilities
|
|
220,265
|
|
|
213,224
|
|
||
Current maturities of long-term debt
|
|
4,500
|
|
|
4,611
|
|
||
Deferred revenue
|
|
196,107
|
|
|
182,515
|
|
||
Total current liabilities
|
|
505,511
|
|
|
462,399
|
|
||
Long-term debt
|
|
768,484
|
|
|
744,260
|
|
||
Long-term deferred revenue
|
|
24,519
|
|
|
20,912
|
|
||
Deferred income taxes
|
|
35,305
|
|
|
25,814
|
|
||
Other liabilities
|
|
114,465
|
|
|
94,359
|
|
||
Total liabilities
|
|
1,448,284
|
|
|
1,347,744
|
|
||
Commitments and Contingencies
|
|
|
|
|
|
|
||
Stockholders' Equity:
|
|
|
|
|
|
|
||
Preferred stock - $0.001 par value; authorized 2,207,000 shares at January 31, 2018 and 2017, respectively; none issued.
|
|
—
|
|
|
—
|
|
||
Common stock - $0.001 par value; authorized 120,000,000 shares. Issued 65,497,000 and 64,073,000 shares; outstanding 63,836,000 and 62,419,000 shares at January 31, 2018 and 2017, respectively
|
|
65
|
|
|
64
|
|
||
Additional paid-in capital
|
|
1,519,724
|
|
|
1,449,335
|
|
||
Treasury stock, at cost - 1,661,000 and 1,654,000 shares at January 31, 2018 and 2017, respectively
|
|
(57,425
|
)
|
|
(57,147
|
)
|
||
Accumulated deficit
|
|
(238,312
|
)
|
|
(230,816
|
)
|
||
Accumulated other comprehensive loss
|
|
(103,460
|
)
|
|
(154,856
|
)
|
||
Total Verint Systems Inc. stockholders' equity
|
|
1,120,592
|
|
|
1,006,580
|
|
||
Noncontrolling interests
|
|
11,744
|
|
|
8,460
|
|
||
Total stockholders' equity
|
|
1,132,336
|
|
|
1,015,040
|
|
||
Total liabilities and stockholders' equity
|
|
$
|
2,580,620
|
|
|
$
|
2,362,784
|
|
|
|
Year Ended January 31,
|
||||||||||
(in thousands, except per share data)
|
|
2018
|
|
2017
|
|
2016
|
||||||
Revenue:
|
|
|
|
|
|
|
|
|
||||
Product
|
|
$
|
399,662
|
|
|
$
|
378,504
|
|
|
$
|
455,406
|
|
Service and support
|
|
735,567
|
|
|
683,602
|
|
|
674,860
|
|
|||
Total revenue
|
|
1,135,229
|
|
|
1,062,106
|
|
|
1,130,266
|
|
|||
Cost of revenue:
|
|
|
|
|
|
|
|
|
|
|||
Product
|
|
131,989
|
|
|
123,279
|
|
|
145,071
|
|
|||
Service and support
|
|
276,582
|
|
|
261,978
|
|
|
248,061
|
|
|||
Amortization of acquired technology
|
|
38,216
|
|
|
37,372
|
|
|
35,774
|
|
|||
Total cost of revenue
|
|
446,787
|
|
|
422,629
|
|
|
428,906
|
|
|||
Gross profit
|
|
688,442
|
|
|
639,477
|
|
|
701,360
|
|
|||
Operating expenses:
|
|
|
|
|
|
|
|
|
|
|||
Research and development, net
|
|
190,643
|
|
|
171,070
|
|
|
177,650
|
|
|||
Selling, general and administrative
|
|
414,960
|
|
|
406,952
|
|
|
412,728
|
|
|||
Amortization of other acquired intangible assets
|
|
34,209
|
|
|
44,089
|
|
|
43,130
|
|
|||
Total operating expenses
|
|
639,812
|
|
|
622,111
|
|
|
633,508
|
|
|||
Operating income
|
|
48,630
|
|
|
17,366
|
|
|
67,852
|
|
|||
Other income (expense), net:
|
|
|
|
|
|
|
|
|
|
|||
Interest income
|
|
2,477
|
|
|
1,048
|
|
|
1,490
|
|
|||
Interest expense
|
|
(35,959
|
)
|
|
(34,962
|
)
|
|
(33,885
|
)
|
|||
Losses on early retirements of debt
|
|
(2,150
|
)
|
|
—
|
|
|
—
|
|
|||
Other income (expense), net
|
|
5,902
|
|
|
(6,926
|
)
|
|
(12,277
|
)
|
|||
Total other expense, net
|
|
(29,730
|
)
|
|
(40,840
|
)
|
|
(44,672
|
)
|
|||
Income (loss) before provision for income taxes
|
|
18,900
|
|
|
(23,474
|
)
|
|
23,180
|
|
|||
Provision for income taxes
|
|
22,354
|
|
|
2,772
|
|
|
952
|
|
|||
Net (loss) income
|
|
(3,454
|
)
|
|
(26,246
|
)
|
|
22,228
|
|
|||
Net income attributable to noncontrolling interests
|
|
3,173
|
|
|
3,134
|
|
|
4,590
|
|
|||
Net (loss) income attributable to Verint Systems Inc.
|
|
$
|
(6,627
|
)
|
|
$
|
(29,380
|
)
|
|
$
|
17,638
|
|
|
|
|
|
|
|
|
||||||
Net (loss) income per common share attributable to Verint Systems Inc.:
|
|
|
|
|
|
|
|
|
|
|||
Basic
|
|
$
|
(0.10
|
)
|
|
$
|
(0.47
|
)
|
|
$
|
0.29
|
|
Diluted
|
|
$
|
(0.10
|
)
|
|
$
|
(0.47
|
)
|
|
$
|
0.28
|
|
|
|
|
|
|
|
|
||||||
Weighted-average common shares outstanding:
|
|
|
|
|
|
|
|
|
|
|||
Basic
|
|
63,312
|
|
|
62,593
|
|
|
61,813
|
|
|||
Diluted
|
|
63,312
|
|
|
62,593
|
|
|
62,921
|
|
|
|
Year Ended January 31,
|
||||||||||
(in thousands)
|
|
2018
|
|
2017
|
|
2016
|
||||||
Net (loss) income
|
|
$
|
(3,454
|
)
|
|
$
|
(26,246
|
)
|
|
$
|
22,228
|
|
Other comprehensive income (loss), net of reclassification adjustments:
|
|
|
|
|
|
|
|
|
|
|||
Foreign currency translation adjustments
|
|
49,810
|
|
|
(42,130
|
)
|
|
(28,180
|
)
|
|||
Net increase (decrease) from available-for-sale securities
|
|
—
|
|
|
110
|
|
|
(211
|
)
|
|||
Net increase from foreign exchange contracts designated as hedges
|
|
3,042
|
|
|
2,750
|
|
|
6,919
|
|
|||
Net (decrease) increase from interest rate swap designated as a hedge
|
|
(1,021
|
)
|
|
1,021
|
|
|
—
|
|
|||
Benefit (provision) for income taxes on net increase (decrease) from foreign exchange contracts and interest rate swap designated as hedges
|
|
85
|
|
|
(693
|
)
|
|
(798
|
)
|
|||
Other comprehensive income (loss)
|
|
51,916
|
|
|
(38,942
|
)
|
|
(22,270
|
)
|
|||
Comprehensive income (loss)
|
|
48,462
|
|
|
(65,188
|
)
|
|
(42
|
)
|
|||
Comprehensive income attributable to noncontrolling interests
|
|
3,693
|
|
|
2,854
|
|
|
4,179
|
|
|||
Comprehensive income (loss) attributable to Verint Systems Inc.
|
|
$
|
44,769
|
|
|
$
|
(68,042
|
)
|
|
$
|
(4,221
|
)
|
|
|
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
Interests
|
|
|||||||||||||||||||||
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
|
|
||||||||
Treasury stock acquired
|
|
(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
|
|
||||||||
Net (loss) income
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(6,627
|
)
|
|
—
|
|
|
(6,627
|
)
|
|
3,173
|
|
|
(3,454
|
)
|
||||||||
Other comprehensive income
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
51,396
|
|
|
51,396
|
|
|
520
|
|
|
51,916
|
|
||||||||
Stock-based compensation - equity portion
|
|
—
|
|
|
—
|
|
|
57,414
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
57,414
|
|
|
—
|
|
|
57,414
|
|
||||||||
Common stock issued for stock awards and stock bonuses
|
|
1,424
|
|
|
1
|
|
|
12,975
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
12,976
|
|
|
—
|
|
|
12,976
|
|
||||||||
Treasury stock acquired
|
|
(7
|
)
|
|
—
|
|
|
—
|
|
|
(278
|
)
|
|
—
|
|
|
—
|
|
|
(278
|
)
|
|
—
|
|
|
(278
|
)
|
||||||||
Initial noncontrolling interest related to business combination
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,300
|
|
|
2,300
|
|
||||||||
Capital contributions by noncontrolling interest
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
595
|
|
|
595
|
|
||||||||
Dividends to noncontrolling interest
|
|
—
|
|
|
—
|
|
|
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(3,304
|
)
|
|
(3,304
|
)
|
||||||||
Cumulative effect of adopting ASU No. 2016-16
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(869
|
)
|
|
—
|
|
|
(869
|
)
|
|
—
|
|
|
(869
|
)
|
||||||||
Balances as of January 31, 2018
|
|
63,836
|
|
|
$
|
65
|
|
|
$
|
1,519,724
|
|
|
$
|
(57,425
|
)
|
|
$
|
(238,312
|
)
|
|
$
|
(103,460
|
)
|
|
$
|
1,120,592
|
|
|
$
|
11,744
|
|
|
$
|
1,132,336
|
|
|
|
Year Ended January 31,
|
||||||||||
(in thousands)
|
|
2018
|
|
2017
|
|
2016
|
||||||
Cash flows from operating activities:
|
|
|
|
|
|
|
|
|
||||
Net (loss) income
|
|
$
|
(3,454
|
)
|
|
$
|
(26,246
|
)
|
|
$
|
22,228
|
|
Adjustments to reconcile net (loss) income to net cash provided by operating activities:
|
|
|
|
|
|
|
|
|
|
|||
Depreciation and amortization
|
|
105,730
|
|
|
114,257
|
|
|
106,300
|
|
|||
Provision for doubtful accounts
|
|
559
|
|
|
1,791
|
|
|
669
|
|
|||
Stock-based compensation, excluding cash-settled awards
|
|
69,296
|
|
|
65,421
|
|
|
64,387
|
|
|||
Amortization of discount on convertible notes
|
|
11,243
|
|
|
10,668
|
|
|
10,123
|
|
|||
Benefit from deferred income taxes
|
|
(7,533
|
)
|
|
(16,941
|
)
|
|
(5,640
|
)
|
|||
Excess tax benefits from stock award plans
|
|
—
|
|
|
(6
|
)
|
|
(523
|
)
|
|||
Non-cash losses (gains) on derivative financial instruments, net
|
|
17
|
|
|
323
|
|
|
(394
|
)
|
|||
Losses on early retirements of debt
|
|
2,150
|
|
|
—
|
|
|
—
|
|
|||
Other non-cash items, net
|
|
(428
|
)
|
|
7,666
|
|
|
12,343
|
|
|||
Changes in operating assets and liabilities, net of effects of business combinations:
|
|
|
|
|
|
|
|
|
|
|||
Accounts receivable
|
|
(23,512
|
)
|
|
(353
|
)
|
|
3,433
|
|
|||
Inventories
|
|
(2,865
|
)
|
|
(286
|
)
|
|
(3,258
|
)
|
|||
Deferred cost of revenue
|
|
282
|
|
|
7,124
|
|
|
6,187
|
|
|||
Prepaid expenses and other assets
|
|
(2,030
|
)
|
|
4,941
|
|
|
(2,886
|
)
|
|||
Accounts payable and accrued expenses
|
|
10,158
|
|
|
(9,521
|
)
|
|
(15,260
|
)
|
|||
Deferred revenue
|
|
9,686
|
|
|
8,705
|
|
|
(12,364
|
)
|
|||
Other liabilities
|
|
8,599
|
|
|
4,987
|
|
|
(28,515
|
)
|
|||
Other, net
|
|
(1,571
|
)
|
|
(115
|
)
|
|
73
|
|
|||
Net cash provided by operating activities
|
|
176,327
|
|
|
172,415
|
|
|
156,903
|
|
|||
|
|
|
|
|
|
|
||||||
Cash flows from investing activities:
|
|
|
|
|
|
|
|
|
||||
Cash paid for business combinations, including adjustments, net of cash acquired
|
|
(102,978
|
)
|
|
(141,803
|
)
|
|
(31,358
|
)
|
|||
Purchases of property and equipment
|
|
(35,530
|
)
|
|
(27,540
|
)
|
|
(25,265
|
)
|
|||
Purchases of investments
|
|
(11,875
|
)
|
|
(36,761
|
)
|
|
(92,808
|
)
|
|||
Maturities and sales of investments
|
|
8,721
|
|
|
89,342
|
|
|
71,457
|
|
|||
Settlements of derivative financial instruments not designated as hedges
|
|
(1,558
|
)
|
|
(349
|
)
|
|
766
|
|
|||
Cash paid for capitalized software development costs
|
|
(3,126
|
)
|
|
(2,338
|
)
|
|
(5,027
|
)
|
|||
Change in restricted cash and bank time deposits, including long-term portion
|
|
2,075
|
|
|
(36,579
|
)
|
|
11,133
|
|
|||
Other investing activities
|
|
(210
|
)
|
|
—
|
|
|
(4,498
|
)
|
|||
Net cash used in investing activities
|
|
(144,481
|
)
|
|
(156,028
|
)
|
|
(75,600
|
)
|
|||
|
|
|
|
|
|
|
||||||
Cash flows from financing activities:
|
|
|
|
|
|
|
|
|
||||
Proceeds from borrowings, net of original issuance discount
|
|
444,341
|
|
|
—
|
|
|
—
|
|
|||
Repayments of borrowings and other financing obligations
|
|
(431,888
|
)
|
|
(3,308
|
)
|
|
(309
|
)
|
|||
Payments of equity issuance, debt issuance and other debt-related costs
|
|
(7,137
|
)
|
|
(249
|
)
|
|
(239
|
)
|
|||
Proceeds from exercises of stock options
|
|
—
|
|
|
7
|
|
|
232
|
|
|||
Dividends paid to noncontrolling interest
|
|
(3,304
|
)
|
|
(2,421
|
)
|
|
(3,199
|
)
|
|||
Purchases of treasury stock
|
|
—
|
|
|
(46,896
|
)
|
|
—
|
|
|||
Excess tax benefits from stock award plans
|
|
—
|
|
|
6
|
|
|
523
|
|
|||
Payments of contingent consideration for business combinations (financing portion) and other financing activities
|
|
(7,515
|
)
|
|
(4,058
|
)
|
|
(7,212
|
)
|
|||
Net cash used in financing activities
|
|
(5,503
|
)
|
|
(56,919
|
)
|
|
(10,204
|
)
|
|||
Effect of exchange rate changes on cash and cash equivalents
|
|
4,236
|
|
|
(4,210
|
)
|
|
(4,066
|
)
|
|||
Net increase (decrease) in cash and cash equivalents
|
|
30,579
|
|
|
(44,742
|
)
|
|
67,033
|
|
|||
Cash and cash equivalents, beginning of year
|
|
307,363
|
|
|
352,105
|
|
|
285,072
|
|
|||
Cash and cash equivalents, end of year
|
|
$
|
337,942
|
|
|
$
|
307,363
|
|
|
$
|
352,105
|
|
1.
|
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
|
|
|
Year Ended January 31,
|
||||||||||
(in thousands)
|
|
2018
|
|
2017
|
|
2016
|
||||||
Allowance for doubtful accounts, beginning of year
|
|
$
|
1,842
|
|
|
$
|
1,170
|
|
|
$
|
1,099
|
|
Provisions charged to expense
|
|
559
|
|
|
1,791
|
|
|
669
|
|
|||
Amounts written off
|
|
(482
|
)
|
|
(1,484
|
)
|
|
(933
|
)
|
|||
Other, including fluctuations in foreign exchange rates
|
|
298
|
|
|
365
|
|
|
335
|
|
|||
Allowance for doubtful accounts, end of year
|
|
$
|
2,217
|
|
|
$
|
1,842
|
|
|
$
|
1,170
|
|
•
|
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 active, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities; or
|
•
|
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)
|
|
2018
|
|
2017
|
|
2016
|
||||||
Net (loss) income
|
|
$
|
(3,454
|
)
|
|
$
|
(26,246
|
)
|
|
$
|
22,228
|
|
Net income attributable to noncontrolling interests
|
|
3,173
|
|
|
3,134
|
|
|
4,590
|
|
|||
Net (loss) income attributable to Verint Systems Inc.
|
|
$
|
(6,627
|
)
|
|
$
|
(29,380
|
)
|
|
$
|
17,638
|
|
Weighted-average shares outstanding:
|
|
|
|
|
|
|
|
|
|
|||
Basic
|
|
63,312
|
|
|
62,593
|
|
|
61,813
|
|
|||
Dilutive effect of employee equity award plans
|
|
—
|
|
|
—
|
|
|
1,108
|
|
|||
Dilutive effect of 1.50% convertible senior notes
|
|
—
|
|
|
—
|
|
|
—
|
|
|||
Dilutive effect of warrants
|
|
—
|
|
|
—
|
|
|
—
|
|
|||
Diluted
|
|
63,312
|
|
|
62,593
|
|
|
62,921
|
|
|||
Net (loss) income per common share attributable to Verint Systems Inc.:
|
|
|
|
|
|
|
|
|
|
|||
Basic
|
|
$
|
(0.10
|
)
|
|
$
|
(0.47
|
)
|
|
$
|
0.29
|
|
Diluted
|
|
$
|
(0.10
|
)
|
|
$
|
(0.47
|
)
|
|
$
|
0.28
|
|
|
|
Year Ended January 31,
|
|||||||
(in thousands)
|
|
2018
|
|
2017
|
|
2016
|
|||
Stock options and restricted stock-based awards
|
|
1,187
|
|
|
1,097
|
|
|
596
|
|
1.50% convertible senior notes
|
|
6,205
|
|
|
6,205
|
|
|
6,205
|
|
Warrants
|
|
6,205
|
|
|
6,205
|
|
|
6,205
|
|
|
|
January 31, 2018
|
||||||||||||||
(in thousands)
|
|
Cost Basis
|
|
Gross Unrealized Gains
|
|
Gross Unrealized Losses
|
|
Estimated Fair Value
|
||||||||
Cash and cash equivalents:
|
|
|
|
|
|
|
|
|
||||||||
Cash and bank time deposits
|
|
$
|
337,756
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
337,756
|
|
Money market funds
|
|
186
|
|
|
—
|
|
|
—
|
|
|
186
|
|
||||
Total cash and cash equivalents
|
|
$
|
337,942
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
337,942
|
|
|
|
|
|
|
|
|
|
|
||||||||
Short-term investments:
|
|
|
|
|
|
|
|
|
||||||||
Corporate debt securities (available-for-sale)
|
|
$
|
2,002
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
2,002
|
|
Bank time deposits
|
|
4,564
|
|
|
—
|
|
|
—
|
|
|
4,564
|
|
||||
Total short-term investments
|
|
$
|
6,566
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
6,566
|
|
|
|
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
|
|
4.
|
BUSINESS COMBINATIONS
|
•
|
On February 1, March 20, October 3, November 3, December 19, and December 21, 2017, we completed acquisitions of businesses in our Customer Engagement operating segment. One of the transactions was an asset acquisition that qualified as a business combination, and another of which retained a noncontrolling interest.
|
•
|
On July 1, 2017, we completed the acquisition of a business in our Cyber Intelligence operating segment.
|
(in thousands)
|
|
Amount
|
||
Components of Purchase Prices:
|
|
|
|
|
Cash
|
|
$
|
106,049
|
|
Fair value of contingent consideration
|
|
27,605
|
|
|
Other purchase price adjustments
|
|
2,380
|
|
|
Total purchase prices
|
|
$
|
136,034
|
|
|
|
|
||
Allocation of Purchase Prices:
|
|
|
|
|
Net tangible assets (liabilities):
|
|
|
|
|
Accounts receivable
|
|
$
|
4,184
|
|
Other current assets, including cash acquired
|
|
15,108
|
|
|
Other assets
|
|
2,765
|
|
|
Current and other liabilities
|
|
(12,462
|
)
|
|
Deferred revenue - current and long-term
|
|
(4,424
|
)
|
|
Deferred income taxes
|
|
(8,660
|
)
|
|
Net tangible liabilities
|
|
(3,489
|
)
|
|
Identifiable intangible assets:
|
|
|
|
|
Customer relationships
|
|
24,444
|
|
|
Developed technology
|
|
30,952
|
|
|
Trademarks and trade names
|
|
2,322
|
|
|
Total identifiable intangible assets
|
|
57,718
|
|
|
Goodwill
|
|
81,805
|
|
|
Total purchase price allocations
|
|
$
|
136,034
|
|
(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
|
|
—
|
|
|
(9,877
|
)
|
||
Net tangible assets (liabilities)
|
|
13,820
|
|
|
(852
|
)
|
||
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
|
|
|
40,907
|
|
||
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
|
|
(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
|
|
5.
|
INTANGIBLE ASSETS AND GOODWILL
|
|
|
January 31, 2018
|
||||||||||
(in thousands)
|
|
Cost
|
|
Accumulated
Amortization
|
|
Net
|
||||||
Intangible assets with finite lives:
|
|
|
|
|
|
|
|
|
|
|||
Customer relationships
|
|
$
|
438,664
|
|
|
$
|
(281,592
|
)
|
|
$
|
157,072
|
|
Acquired technology
|
|
273,156
|
|
|
(212,571
|
)
|
|
60,585
|
|
|||
Trade names
|
|
26,820
|
|
|
(18,570
|
)
|
|
8,250
|
|
|||
Non-competition agreements
|
|
3,047
|
|
|
(2,861
|
)
|
|
186
|
|
|||
Distribution network
|
|
4,440
|
|
|
(4,440
|
)
|
|
—
|
|
|||
Total intangible assets
|
|
$
|
746,127
|
|
|
$
|
(520,034
|
)
|
|
$
|
226,093
|
|
|
|
January 31, 2017
|
||||||||||
(in thousands)
|
|
Cost
|
|
Accumulated
Amortization
|
|
Net
|
||||||
Intangible assets, all 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,
|
||||||
(in thousands)
|
|
2018
|
|
2017
|
||||
Customer Engagement
|
|
$
|
213,963
|
|
|
$
|
207,436
|
|
Cyber Intelligence
|
|
12,130
|
|
|
27,823
|
|
||
Total
|
|
$
|
226,093
|
|
|
$
|
235,259
|
|
|
|
|
|
Reportable Segment
|
||||||||
(in thousands)
|
|
Total
|
|
Customer Engagement
|
|
Cyber Intelligence
|
||||||
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
|
|
|
|
|
|
|
|
|
||||||
Year Ended January 31, 2018:
|
|
|
|
|
|
|
||||||
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
|
|
|||
Business combinations, including prior year adjustments
|
|
81,180
|
|
|
77,345
|
|
|
3,835
|
|
|||
Foreign currency translation and other
|
|
42,301
|
|
|
41,769
|
|
|
532
|
|
|||
Goodwill, net, at January 31, 2018
|
|
$
|
1,388,299
|
|
|
$
|
1,251,093
|
|
|
$
|
137,206
|
|
|
|
|
|
|
|
|
||||||
Balance at January 31, 2018:
|
|
|
|
|
|
|
|
|
|
|||
Goodwill, gross, at January 31, 2018
|
|
$
|
1,455,164
|
|
|
$
|
1,307,136
|
|
|
$
|
148,028
|
|
Accumulated impairment losses through January 31, 2018
|
|
(66,865
|
)
|
|
(56,043
|
)
|
|
(10,822
|
)
|
|||
Goodwill, net, at January 31, 2018
|
|
$
|
1,388,299
|
|
|
$
|
1,251,093
|
|
|
$
|
137,206
|
|
6.
|
LONG-TERM DEBT
|
|
|
January 31,
|
||||||
(in thousands)
|
|
2018
|
|
2017
|
||||
|
|
|
|
|
||||
1.50% Convertible Senior Notes
|
|
$
|
400,000
|
|
|
$
|
400,000
|
|
February 2014 Term Loans
|
|
—
|
|
|
130,060
|
|
||
March 2014 Term Loans
|
|
—
|
|
|
278,978
|
|
||
June 2017 Term Loan
|
|
422,875
|
|
|
—
|
|
||
Other debt
|
|
250
|
|
|
404
|
|
||
Less: Unamortized debt discounts and issuance costs
|
|
(50,141
|
)
|
|
(60,571
|
)
|
||
Total debt
|
|
772,984
|
|
|
748,871
|
|
||
Less: current maturities
|
|
4,500
|
|
|
4,611
|
|
||
Long-term debt
|
|
$
|
768,484
|
|
|
$
|
744,260
|
|
•
|
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
5
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)
|
|
|
||
Years Ending January 31,
|
|
Amount
|
||
2019
|
|
$
|
4,250
|
|
2020
|
|
4,250
|
|
|
2021
|
|
4,250
|
|
|
2022
|
|
4,250
|
|
|
2023
|
|
4,250
|
|
|
2024 and thereafter
|
|
401,625
|
|
|
Total
|
|
$
|
422,875
|
|
|
|
Year Ended January 31,
|
||||||||||
(in thousands)
|
|
2018
|
|
2017
|
|
2016
|
||||||
1.50% Convertible Senior Notes:
|
|
|
|
|
|
|
||||||
Interest expense at 1.50% coupon rate
|
|
$
|
6,000
|
|
|
$
|
6,000
|
|
|
$
|
6,000
|
|
Amortization of debt discount
|
|
11,244
|
|
|
10,669
|
|
|
10,123
|
|
|||
Amortization of deferred debt issuance costs
|
|
1,060
|
|
|
1,007
|
|
|
955
|
|
|||
Total - 1.50% Convertible Senior Notes
|
|
$
|
18,304
|
|
|
$
|
17,676
|
|
|
$
|
17,078
|
|
|
|
|
|
|
|
|
||||||
Borrowings under Credit Agreements:
|
|
|
|
|
|
|
||||||
Interest expense at contractual rates
|
|
$
|
15,412
|
|
|
$
|
14,682
|
|
|
$
|
14,590
|
|
Impact of interest rate swap agreement
|
|
254
|
|
|
259
|
|
|
—
|
|
|||
Amortization of debt discounts
|
|
65
|
|
|
58
|
|
|
56
|
|
|||
Amortization of deferred debt issuance costs
|
|
1,839
|
|
|
2,211
|
|
|
2,166
|
|
|||
Total - Borrowings under Credit Agreements
|
|
$
|
17,570
|
|
|
$
|
17,210
|
|
|
$
|
16,812
|
|
7.
|
SUPPLEMENTAL CONSOLIDATED FINANCIAL STATEMENT INFORMATION
|
|
|
January 31,
|
||||||
(in thousands)
|
|
2018
|
|
2017
|
||||
Raw materials
|
|
$
|
9,870
|
|
|
$
|
9,074
|
|
Work-in-process
|
|
6,269
|
|
|
4,355
|
|
||
Finished goods
|
|
3,732
|
|
|
4,108
|
|
||
Total inventories
|
|
$
|
19,871
|
|
|
$
|
17,537
|
|
|
|
January 31,
|
||||||
(in thousands)
|
|
2018
|
|
2017
|
||||
Land and buildings
|
|
$
|
10,276
|
|
|
$
|
9,543
|
|
Leasehold improvements
|
|
29,793
|
|
|
29,247
|
|
||
Software
|
|
54,032
|
|
|
61,810
|
|
||
Equipment, furniture, and other
|
|
135,548
|
|
|
93,968
|
|
||
|
|
229,649
|
|
|
194,568
|
|
||
Less: accumulated depreciation and amortization
|
|
(140,560
|
)
|
|
(117,017
|
)
|
||
Total property and equipment, net
|
|
$
|
89,089
|
|
|
$
|
77,551
|
|
|
|
January 31,
|
||||||
(in thousands)
|
|
2018
|
|
2017
|
||||
Long-term restricted cash and time deposits
|
|
$
|
28,402
|
|
|
$
|
54,566
|
|
Deferred debt issuance costs, net
|
|
3,668
|
|
|
1,929
|
|
||
Long-term security deposits
|
|
4,139
|
|
|
4,123
|
|
||
Other
|
|
15,828
|
|
|
16,002
|
|
||
Total other assets
|
|
$
|
52,037
|
|
|
$
|
76,620
|
|
|
|
January 31,
|
||||||
(in thousands)
|
|
2018
|
|
2017
|
||||
Compensation and benefits
|
|
$
|
83,216
|
|
|
$
|
73,998
|
|
Billings in excess of costs and estimated earnings on uncompleted contracts
|
|
46,062
|
|
|
59,810
|
|
||
Income taxes
|
|
14,464
|
|
|
11,410
|
|
||
Contingent consideration - current portion
|
|
13,187
|
|
|
9,725
|
|
||
Distributor and agent commissions
|
|
12,255
|
|
|
10,384
|
|
||
Taxes other than income taxes
|
|
11,424
|
|
|
8,564
|
|
||
Professional and consulting fees
|
|
8,752
|
|
|
8,020
|
|
||
Other
|
|
30,905
|
|
|
31,313
|
|
||
Total accrued expenses and other current liabilities
|
|
$
|
220,265
|
|
|
$
|
213,224
|
|
|
|
January 31,
|
||||||
(in thousands)
|
|
2018
|
|
2017
|
||||
Unrecognized tax benefits, including interest and penalties
|
|
$
|
41,014
|
|
|
$
|
28,204
|
|
Contingent consideration - long-term portion
|
|
49,149
|
|
|
42,708
|
|
||
Deferred rent expense
|
|
12,168
|
|
|
13,805
|
|
||
Obligations for severance compensation
|
|
3,028
|
|
|
2,880
|
|
||
Capital lease obligations - long-term portion
|
|
3,315
|
|
|
68
|
|
||
Other
|
|
5,791
|
|
|
6,694
|
|
||
Total other liabilities
|
|
$
|
114,465
|
|
|
$
|
94,359
|
|
|
|
Year Ended January 31,
|
||||||||||
(in thousands)
|
|
2018
|
|
2017
|
|
2016
|
||||||
Foreign currency gains (losses), net
|
|
$
|
6,760
|
|
|
$
|
(2,743
|
)
|
|
$
|
(8,037
|
)
|
(Losses) gains on derivative financial instruments, net
|
|
(17
|
)
|
|
(322
|
)
|
|
394
|
|
|||
Other, net
|
|
(841
|
)
|
|
(3,861
|
)
|
|
(4,634
|
)
|
|||
Total other income (expense), net
|
|
$
|
5,902
|
|
|
$
|
(6,926
|
)
|
|
$
|
(12,277
|
)
|
|
|
Year Ended January 31,
|
||||||||||
(in thousands)
|
|
2018
|
|
2017
|
|
2016
|
||||||
Cash paid for interest
|
|
$
|
24,402
|
|
|
$
|
21,892
|
|
|
$
|
20,734
|
|
Cash payments of income taxes, net
|
|
$
|
23,450
|
|
|
$
|
29,582
|
|
|
$
|
17,165
|
|
Non-cash investing and financing transactions:
|
|
|
|
|
|
|
|
|||||
Liabilities for contingent consideration in business combinations
|
|
$
|
27,605
|
|
|
$
|
26,400
|
|
|
$
|
16,238
|
|
Capital leases of property and equipment
|
|
$
|
4,350
|
|
|
$
|
151
|
|
|
$
|
—
|
|
Accrued but unpaid purchases of property and equipment
|
|
$
|
2,367
|
|
|
$
|
2,868
|
|
|
$
|
4,562
|
|
Inventory transfers to property and equipment
|
|
$
|
437
|
|
|
$
|
552
|
|
|
$
|
1,142
|
|
Leasehold improvements funded by lease incentives
|
|
$
|
—
|
|
|
$
|
82
|
|
|
$
|
1,721
|
|
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 at January 31, 2016
|
|
$
|
(1,871
|
)
|
|
$
|
—
|
|
|
$
|
(110
|
)
|
|
$
|
(114,213
|
)
|
|
$
|
(116,194
|
)
|
Other comprehensive 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 loss at January 31, 2017
|
|
575
|
|
|
632
|
|
|
—
|
|
|
(156,063
|
)
|
|
(154,856
|
)
|
|||||
Other comprehensive income (loss) before reclassifications
|
|
8,867
|
|
|
(341
|
)
|
|
—
|
|
|
49,291
|
|
|
57,817
|
|
|||||
Amounts reclassified out of accumulated other comprehensive income (loss)
|
|
6,130
|
|
|
291
|
|
|
—
|
|
|
—
|
|
|
6,421
|
|
|||||
Net other comprehensive income (loss)
|
|
2,737
|
|
|
(632
|
)
|
|
—
|
|
|
49,291
|
|
|
51,396
|
|
|||||
Accumulated other comprehensive income (loss) at January 31, 2018
|
|
$
|
3,312
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(106,772
|
)
|
|
$
|
(103,460
|
)
|
|
|
Year Ended January 31,
|
|
Financial Statement Location
|
||||||||||
(in thousands)
|
|
2018
|
|
2017
|
|
2016
|
|
|||||||
Unrealized gains (losses) on derivative financial instruments:
|
|
|
|
|
|
|
|
|
||||||
Foreign currency forward contracts
|
|
$
|
621
|
|
|
$
|
108
|
|
|
$
|
(718
|
)
|
|
Cost of product revenue
|
|
|
599
|
|
|
115
|
|
|
(672
|
)
|
|
Cost of service and support revenue
|
|||
|
|
3,577
|
|
|
651
|
|
|
(4,556
|
)
|
|
Research and development, net
|
|||
|
|
2,016
|
|
|
383
|
|
|
(2,205
|
)
|
|
Selling, general and administrative
|
|||
|
|
6,813
|
|
|
1,257
|
|
|
(8,151
|
)
|
|
Total, before income taxes
|
|||
|
|
(683
|
)
|
|
(118
|
)
|
|
1,038
|
|
|
(Provision) benefit for income taxes
|
|||
|
|
$
|
6,130
|
|
|
$
|
1,139
|
|
|
$
|
(7,113
|
)
|
|
Total, net of income taxes
|
|
|
|
|
|
|
|
|
|
||||||
Interest rate swap agreement
|
|
$
|
(254
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
Interest expense
|
|
|
934
|
|
|
—
|
|
|
—
|
|
|
Other income (expense), net
|
|||
|
|
680
|
|
|
—
|
|
|
—
|
|
|
Total, before income taxes
|
|||
|
|
(389
|
)
|
|
—
|
|
|
—
|
|
|
Provision for income taxes
|
|||
|
|
$
|
291
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
Total, net of income taxes
|
|
|
Year Ended January 31,
|
||||||||||
(in thousands)
|
|
2018
|
|
2017
|
|
2016
|
||||||
Capitalized software development costs, net, beginning of year
|
|
$
|
9,509
|
|
|
$
|
11,992
|
|
|
$
|
10,112
|
|
Software development costs capitalized during the year
|
|
3,126
|
|
|
2,338
|
|
|
5,027
|
|
|||
Amortization of capitalized software development costs
|
|
(3,338
|
)
|
|
(3,341
|
)
|
|
(2,976
|
)
|
|||
Impairments, foreign currency translation and other
|
|
(69
|
)
|
|
(1,480
|
)
|
|
(171
|
)
|
|||
Capitalized software development costs, net, end of year
|
|
$
|
9,228
|
|
|
$
|
9,509
|
|
|
$
|
11,992
|
|
10.
|
INCOME TAXES
|
|
|
Year Ended January 31,
|
||||||||||
(in thousands)
|
|
2018
|
|
2017
|
|
2016
|
||||||
Domestic
|
|
$
|
(44,502
|
)
|
|
$
|
(60,722
|
)
|
|
$
|
(43,471
|
)
|
Foreign
|
|
63,402
|
|
|
37,248
|
|
|
66,651
|
|
|||
Total income (loss) before provision for income taxes
|
|
$
|
18,900
|
|
|
$
|
(23,474
|
)
|
|
$
|
23,180
|
|
|
|
Year Ended January 31,
|
||||||||||
(in thousands)
|
|
2018
|
|
2017
|
|
2016
|
||||||
Current provision (benefit) for income taxes:
|
|
|
|
|
|
|
||||||
Federal
|
|
$
|
4,364
|
|
|
$
|
604
|
|
|
$
|
(2,997
|
)
|
State
|
|
1,215
|
|
|
989
|
|
|
1,300
|
|
|||
Foreign
|
|
24,308
|
|
|
18,120
|
|
|
8,289
|
|
|||
Total current provision for income taxes
|
|
29,887
|
|
|
19,713
|
|
|
6,592
|
|
|||
Deferred provision (benefit) for income taxes:
|
|
|
|
|
|
|
||||||
Federal
|
|
4,734
|
|
|
(8,179
|
)
|
|
2,244
|
|
|||
State
|
|
(58
|
)
|
|
(842
|
)
|
|
12
|
|
|||
Foreign
|
|
(12,209
|
)
|
|
(7,920
|
)
|
|
(7,896
|
)
|
|||
Total deferred benefit for income taxes
|
|
(7,533
|
)
|
|
(16,941
|
)
|
|
(5,640
|
)
|
|||
Total provision for income taxes
|
|
$
|
22,354
|
|
|
$
|
2,772
|
|
|
$
|
952
|
|
|
|
Year Ended January 31,
|
||||||||||
(in thousands)
|
|
2018
|
|
2017
|
|
2016
|
||||||
U.S. federal statutory income tax rate
|
|
33.8
|
%
|
|
35.0
|
%
|
|
35.0
|
%
|
|||
|
|
|
|
|
|
|
||||||
Income tax provision (benefit) at the U.S. federal statutory rate
|
|
$
|
6,394
|
|
|
$
|
(8,215
|
)
|
|
$
|
8,115
|
|
State income tax provision (benefit)
|
|
1,792
|
|
|
(312
|
)
|
|
(79
|
)
|
|||
Foreign tax rate differential
|
|
(9,434
|
)
|
|
(5,794
|
)
|
|
(3,068
|
)
|
|||
Tax incentives
|
|
(3,891
|
)
|
|
(3,507
|
)
|
|
(12,293
|
)
|
|||
Valuation allowances
|
|
14,539
|
|
|
(3,640
|
)
|
|
(7,767
|
)
|
|||
Stock-based and other compensation
|
|
(8,656
|
)
|
|
2,522
|
|
|
3,562
|
|
|||
Non-deductible expenses
|
|
(2,091
|
)
|
|
5,315
|
|
|
6,061
|
|
|||
Tax credits
|
|
(307
|
)
|
|
(112
|
)
|
|
(482
|
)
|
|||
Tax contingencies
|
|
5,017
|
|
|
5,566
|
|
|
(6,281
|
)
|
|||
Tax effects of reorganizations and liquidations
|
|
—
|
|
|
975
|
|
|
6,136
|
|
|||
U.S. tax effects of foreign operations
|
|
8,591
|
|
|
9,542
|
|
|
7,574
|
|
|||
Impact of the 2017 Tax Act
|
|
9,641
|
|
|
—
|
|
|
—
|
|
|||
Other, net
|
|
759
|
|
|
432
|
|
|
(526
|
)
|
|||
Total provision for income taxes
|
|
$
|
22,354
|
|
|
$
|
2,772
|
|
|
$
|
952
|
|
Effective income tax rate
|
|
118.3
|
%
|
|
(11.8
|
)%
|
|
4.1
|
%
|
|
|
January 31,
|
||||||
(in thousands)
|
|
2018
|
|
2017
|
||||
Deferred tax assets:
|
|
|
|
|
||||
Accrued expenses
|
|
$
|
7,637
|
|
|
$
|
10,627
|
|
Deferred revenue
|
|
2,421
|
|
|
3,953
|
|
||
Loss carryforwards
|
|
47,009
|
|
|
125,986
|
|
||
Tax credits
|
|
11,935
|
|
|
7,972
|
|
||
Stock-based and other compensation
|
|
17,568
|
|
|
20,187
|
|
||
Capitalized research and development expenses
|
|
10,316
|
|
|
4,146
|
|
||
Other, net
|
|
3,749
|
|
|
2,672
|
|
||
Total deferred tax assets
|
|
100,635
|
|
|
175,543
|
|
||
Deferred tax liabilities:
|
|
|
|
|
||||
Goodwill and other intangible assets
|
|
(36,977
|
)
|
|
(50,679
|
)
|
||
Unremitted earnings of foreign subsidiaries
|
|
(12,257
|
)
|
|
(18,215
|
)
|
||
Other, net
|
|
(712
|
)
|
|
(2,344
|
)
|
||
Total deferred tax liabilities
|
|
(49,946
|
)
|
|
(71,238
|
)
|
||
Valuation allowance
|
|
(55,116
|
)
|
|
(108,609
|
)
|
||
Net deferred tax liabilities
|
|
$
|
(4,427
|
)
|
|
$
|
(4,304
|
)
|
|
|
|
|
|
||||
Recorded as:
|
|
|
|
|
||||
Deferred tax assets
|
|
$
|
30,878
|
|
|
$
|
21,510
|
|
Deferred tax liabilities
|
|
(35,305
|
)
|
|
(25,814
|
)
|
||
Net deferred tax liabilities
|
|
$
|
(4,427
|
)
|
|
$
|
(4,304
|
)
|
|
|
Year Ended January 31,
|
||||||
(in thousands)
|
|
2018
|
|
2017
|
||||
Valuation allowance, beginning of year
|
|
$
|
(108,609
|
)
|
|
$
|
(115,756
|
)
|
(Benefit from) provision for income taxes
|
|
2,868
|
|
|
3,640
|
|
||
Adoption of ASU No. 2016-09
|
|
(17,407
|
)
|
|
—
|
|
||
Impact of 2017 Tax Act
|
|
70,832
|
|
|
—
|
|
||
Additional paid-in capital
|
|
—
|
|
|
3,204
|
|
||
Business combinations
|
|
(2,061
|
)
|
|
—
|
|
||
Currency translation adjustment
|
|
(739
|
)
|
|
303
|
|
||
Valuation allowance, end of year
|
|
$
|
(55,116
|
)
|
|
$
|
(108,609
|
)
|
|
|
Year Ended January 31,
|
||||||||||
(in thousands)
|
|
2018
|
|
2017
|
|
2016
|
||||||
Gross unrecognized tax benefits, beginning of year
|
|
$
|
148,639
|
|
|
$
|
142,271
|
|
|
$
|
159,648
|
|
Increases related to tax positions taken during the current year
|
|
12,260
|
|
|
11,034
|
|
|
9,465
|
|
|||
Increases as a result of business combinations
|
|
43
|
|
|
—
|
|
|
985
|
|
|||
Increases related to tax positions taken during prior years
|
|
9,226
|
|
|
585
|
|
|
2,514
|
|
|||
Increases (decreases) related to foreign currency exchange rates
|
|
2,449
|
|
|
648
|
|
|
(741
|
)
|
|||
Reductions for tax positions of prior years
|
|
(8,266
|
)
|
|
(5,094
|
)
|
|
(13,613
|
)
|
|||
Reductions for settlements with tax authorities
|
|
(140
|
)
|
|
(145
|
)
|
|
(13,811
|
)
|
|||
Reduction for rate change due to the 2017 Tax Act
|
|
(48,004
|
)
|
|
—
|
|
|
—
|
|
|||
Lapses of statutes of limitations
|
|
(498
|
)
|
|
(660
|
)
|
|
(2,176
|
)
|
|||
Gross unrecognized tax benefits, end of year
|
|
$
|
115,709
|
|
|
$
|
148,639
|
|
|
$
|
142,271
|
|
Jurisdiction
|
|
Tax Years
|
Canada
|
|
January 31, 2011 - January 31, 2012
|
United Kingdom
|
|
December 31, 2006; January 31, 2008
|
India
|
|
March 31, 2007 - March 31, 2008; March 31, 2010 - March 31, 2013
|
Israel
|
|
January 31, 2014 - January 31, 2016
|
11.
|
FAIR VALUE MEASUREMENTS
|
|
|
January 31, 2018
|
||||||||||
|
|
Fair Value Hierarchy Category
|
||||||||||
(in thousands)
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
||||||
Assets:
|
|
|
|
|
|
|
|
|
|
|||
Money market funds
|
|
$
|
186
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Short-term investments, classified as available-for-sale
|
|
—
|
|
|
2,002
|
|
|
—
|
|
|||
Foreign currency forward contracts
|
|
—
|
|
|
3,682
|
|
|
—
|
|
|||
Interest rate swap agreement
|
|
—
|
|
|
2,580
|
|
|
—
|
|
|||
Total assets
|
|
$
|
186
|
|
|
$
|
8,264
|
|
|
$
|
—
|
|
Liabilities:
|
|
|
|
|
|
|
|
|
|
|||
Foreign currency forward contracts
|
|
$
|
—
|
|
|
$
|
1,308
|
|
|
$
|
—
|
|
Contingent consideration - business combinations
|
|
—
|
|
|
—
|
|
|
62,829
|
|
|||
Option to acquire noncontrolling interests of consolidated subsidiaries
|
|
—
|
|
|
—
|
|
|
2,950
|
|
|||
Total liabilities
|
|
$
|
—
|
|
|
$
|
1,308
|
|
|
$
|
65,779
|
|
|
|
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
|
|
|
|
Year Ended January 31,
|
||||||
(in thousands)
|
|
2018
|
|
2017
|
||||
Fair value measurement, beginning of year
|
|
$
|
52,733
|
|
|
$
|
22,391
|
|
Contingent consideration liabilities recorded for business combinations
|
|
27,604
|
|
|
26,400
|
|
||
Changes in fair values, recorded in operating expenses
|
|
(8,324
|
)
|
|
7,255
|
|
||
Payments of contingent consideration
|
|
(9,412
|
)
|
|
(3,313
|
)
|
||
Foreign currency translation and other
|
|
228
|
|
|
—
|
|
||
Fair value measurement, end of year
|
|
$
|
62,829
|
|
|
$
|
52,733
|
|
|
|
Year Ended January 31,
|
||||||
(in thousands)
|
|
2018
|
|
2017
|
||||
Fair value measurement, beginning of year
|
|
$
|
3,550
|
|
|
$
|
—
|
|
Acquisition of option to acquire noncontrolling interests of consolidated subsidiaries
|
|
—
|
|
|
3,134
|
|
||
Change in fair value, recorded in operating expenses
|
|
(600
|
)
|
|
416
|
|
||
Fair value measurement, end of year
|
|
$
|
2,950
|
|
|
$
|
3,550
|
|
|
|
|
|
January 31,
|
||||||
(in thousands)
|
|
Balance Sheet Classification
|
|
2018
|
|
2017
|
||||
Derivative assets:
|
|
|
|
|
|
|
||||
Foreign currency forward contracts:
|
|
|
|
|
|
|
||||
Designated as cash flow hedges
|
|
Prepaid expenses and other current assets
|
|
$
|
3,682
|
|
|
$
|
927
|
|
Not designated as hedging instruments
|
|
Prepaid expenses and other current assets
|
|
—
|
|
|
719
|
|
||
Interest rate swap agreement:
|
|
|
|
|
|
|
||||
Designated as a cash flow hedge
|
|
Other assets
|
|
—
|
|
|
1,429
|
|
||
Not designated as a hedging instrument
|
|
Prepaid expenses and other current assets
|
|
1,330
|
|
|
—
|
|
||
|
|
Other assets
|
|
1,250
|
|
|
—
|
|
||
Total derivative assets
|
|
|
|
$
|
5,012
|
|
|
$
|
3,075
|
|
|
|
|
|
|
|
|
||||
Derivative liabilities:
|
|
|
|
|
|
|
||||
Foreign currency forward contracts:
|
|
|
|
|
|
|
||||
Designated as cash flow hedges
|
|
Accrued expenses and other current liabilities
|
|
$
|
—
|
|
|
$
|
288
|
|
Not designated as hedging instruments
|
|
Accrued expenses and other current liabilities
|
|
1,061
|
|
|
958
|
|
||
|
|
Other liabilities
|
|
247
|
|
|
—
|
|
||
Interest rate swap agreement:
|
|
|
|
|
|
|
||||
Designated as a cash flow hedge
|
|
Accrued expenses and other current liabilities
|
|
—
|
|
|
408
|
|
||
Total derivative liabilities
|
|
|
|
$
|
1,308
|
|
|
$
|
1,654
|
|
|
|
Year Ended January 31,
|
||||||||||
(in thousands)
|
|
2018
|
|
2017
|
|
2016
|
||||||
Net gains (losses) recognized in Other comprehensive (loss) income:
|
|
|
|
|
|
|
||||||
Foreign currency forward contracts
|
|
$
|
3,312
|
|
|
$
|
575
|
|
|
$
|
(1,871
|
)
|
Interest rate swap agreement
|
|
(341
|
)
|
|
632
|
|
|
—
|
|
|||
|
|
$
|
2,971
|
|
|
$
|
1,207
|
|
|
$
|
(1,871
|
)
|
Net gains (losses) reclassified from Other comprehensive (loss) income to the consolidated statements of operations:
|
|
|
|
|
|
|
||||||
Foreign currency forward contracts
|
|
$
|
6,813
|
|
|
$
|
1,257
|
|
|
$
|
(8,151
|
)
|
Interest rate swap agreement
|
|
(254
|
)
|
|
—
|
|
|
—
|
|
|||
|
|
$
|
6,559
|
|
|
$
|
1,257
|
|
|
$
|
(8,151
|
)
|
|
|
Classification in Consolidated Statements of Operations
|
|
Year Ended January 31,
|
||||||||||
(in thousands)
|
|
|
2018
|
|
2017
|
|
2016
|
|||||||
Foreign currency forward contracts
|
|
Other (expense) income, net
|
|
$
|
(2,546
|
)
|
|
$
|
(323
|
)
|
|
$
|
394
|
|
Interest rate swap
|
|
Other (expense) income, net
|
|
2,529
|
|
|
—
|
|
|
—
|
|
|||
|
|
|
|
$
|
(17
|
)
|
|
$
|
(323
|
)
|
|
$
|
394
|
|
13.
|
STOCK-BASED COMPENSATION AND OTHER BENEFIT PLANS
|
|
|
Year Ended January 31,
|
||||||||||
(in thousands)
|
|
2018
|
|
2017
|
|
2016
|
||||||
Component of (loss) income before provision (benefit) for income taxes:
|
|
|
|
|
|
|
||||||
Cost of revenue - product
|
|
$
|
1,561
|
|
|
$
|
1,290
|
|
|
$
|
1,466
|
|
Cost of revenue - service and support
|
|
6,904
|
|
|
7,297
|
|
|
5,719
|
|
|||
Research and development, net
|
|
13,144
|
|
|
11,637
|
|
|
9,195
|
|
|||
Selling, general and administrative
|
|
47,757
|
|
|
45,384
|
|
|
48,169
|
|
|||
Total stock-based compensation expense
|
|
69,366
|
|
|
65,608
|
|
|
64,549
|
|
|||
Income tax benefits related to stock-based compensation (before consideration of valuation allowances)
|
|
16,504
|
|
|
15,752
|
|
|
14,385
|
|
|||
Total stock-based compensation, net of taxes
|
|
$
|
52,862
|
|
|
$
|
49,856
|
|
|
$
|
50,164
|
|
|
|
Year Ended January 31,
|
||||||||||
(in thousands)
|
|
2018
|
|
2017
|
|
2016
|
||||||
Restricted stock units and restricted stock awards
|
|
$
|
57,188
|
|
|
$
|
55,123
|
|
|
$
|
58,028
|
|
Stock bonus program and bonus share program
|
|
12,108
|
|
|
10,298
|
|
|
6,359
|
|
|||
Total equity-settled awards
|
|
69,296
|
|
|
65,421
|
|
|
64,387
|
|
|||
Phantom stock units (cash-settled awards)
|
|
70
|
|
|
187
|
|
|
162
|
|
|||
Total stock-based compensation expense
|
|
$
|
69,366
|
|
|
$
|
65,608
|
|
|
$
|
64,549
|
|
|
|
Year Ended January 31,
|
|||||||||||||||||||
|
|
2018
|
|
2017
|
|
2016
|
|||||||||||||||
(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
|
|
2,742
|
|
|
$
|
45.20
|
|
|
2,649
|
|
|
$
|
54.57
|
|
|
2,545
|
|
|
$
|
40.96
|
|
Granted
|
|
1,804
|
|
|
$
|
40.19
|
|
|
1,870
|
|
|
$
|
35.33
|
|
|
1,729
|
|
|
$
|
62.62
|
|
Released
|
|
(1,403
|
)
|
|
$
|
45.96
|
|
|
(1,433
|
)
|
|
$
|
47.98
|
|
|
(1,312
|
)
|
|
$
|
39.75
|
|
Forfeited
|
|
(335
|
)
|
|
$
|
48.92
|
|
|
(344
|
)
|
|
$
|
52.20
|
|
|
(313
|
)
|
|
$
|
50.56
|
|
Ending balance
|
|
2,808
|
|
|
$
|
41.18
|
|
|
2,742
|
|
|
$
|
45.20
|
|
|
2,649
|
|
|
$
|
54.57
|
|
|
|
Year Ended January 31,
|
|||||||
(in thousands)
|
|
2018
|
|
2017
|
|
2016
|
|||
Shares in lieu of earned cash bonus - granted and released
|
|
21
|
|
|
25
|
|
|
43
|
|
Shares in respect of discount:
|
|
|
|
|
|
|
|||
Granted
|
|
—
|
|
|
—
|
|
|
7
|
|
Released
|
|
—
|
|
|
—
|
|
|
5
|
|
(in thousands)
|
|
Operating
|
|
Capital
|
||||
Years Ending January 31,
|
|
Leases
|
|
Leases
|
||||
2019
|
|
$
|
21,497
|
|
|
$
|
1,171
|
|
2020
|
|
16,788
|
|
|
1,081
|
|
||
2021
|
|
15,435
|
|
|
972
|
|
||
2022
|
|
13,583
|
|
|
875
|
|
||
2023
|
|
12,203
|
|
|
600
|
|
||
Thereafter
|
|
37,126
|
|
|
—
|
|
||
Total
|
|
$
|
116,632
|
|
|
4,699
|
|
|
Less: amount representing interest
|
|
|
|
(349
|
)
|
|||
Present value of minimum lease payments
|
|
|
|
$
|
4,350
|
|
|
|
Year Ended January 31,
|
||||||||||
(in thousands)
|
|
2018
|
|
2017
|
|
2016
|
||||||
Warranty liability, beginning of year
|
|
$
|
962
|
|
|
$
|
826
|
|
|
$
|
633
|
|
Provision (credited against) charged to expenses
|
|
(165
|
)
|
|
797
|
|
|
473
|
|
|||
Warranty charges
|
|
(260
|
)
|
|
(658
|
)
|
|
(278
|
)
|
|||
Foreign currency translation and other
|
|
14
|
|
|
(3
|
)
|
|
(2
|
)
|
|||
Warranty liability, end of year
|
|
$
|
551
|
|
|
$
|
962
|
|
|
$
|
826
|
|
|
|
Year Ended January 31,
|
||||||||||
(in thousands)
|
|
2018
|
|
2017
|
|
2016
|
||||||
Revenue:
|
|
|
|
|
|
|
|
|
||||
Customer Engagement:
|
|
|
|
|
|
|
|
|
||||
Segment revenue
|
|
$
|
755,038
|
|
|
$
|
716,163
|
|
|
$
|
698,298
|
|
Revenue adjustments
|
|
(14,971
|
)
|
|
(10,266
|
)
|
|
(3,441
|
)
|
|||
|
|
740,067
|
|
|
705,897
|
|
|
694,857
|
|
|||
Cyber Intelligence:
|
|
|
|
|
|
|
|
|
||||
Segment revenue
|
|
395,420
|
|
|
356,533
|
|
|
436,343
|
|
|||
Revenue adjustments
|
|
(258
|
)
|
|
(324
|
)
|
|
(934
|
)
|
|||
|
|
395,162
|
|
|
356,209
|
|
|
435,409
|
|
|||
Total revenue
|
|
$
|
1,135,229
|
|
|
$
|
1,062,106
|
|
|
$
|
1,130,266
|
|
|
|
|
|
|
|
|
||||||
Segment contribution:
|
|
|
|
|
|
|
|
|
||||
Customer Engagement
|
|
$
|
286,236
|
|
|
$
|
269,017
|
|
|
$
|
264,378
|
|
Cyber Intelligence
|
|
94,585
|
|
|
85,777
|
|
|
133,186
|
|
|||
Total segment contribution
|
|
380,821
|
|
|
354,794
|
|
|
397,564
|
|
|||
|
|
|
|
|
|
|
||||||
Reconciliation of segment contribution to operating income:
|
|
|
|
|
|
|
|
|
||||
Revenue adjustments
|
|
15,229
|
|
|
10,590
|
|
|
4,375
|
|
|||
Shared support expenses
|
|
154,673
|
|
|
150,170
|
|
|
153,350
|
|
|||
Amortization of acquired intangible assets
|
|
72,425
|
|
|
81,461
|
|
|
78,904
|
|
|||
Stock-based compensation
|
|
69,366
|
|
|
65,608
|
|
|
64,549
|
|
|||
Acquisition, integration, restructuring, and other unallocated expenses
|
|
20,498
|
|
|
29,599
|
|
|
28,534
|
|
|||
Total reconciling items, net
|
|
332,191
|
|
|
337,428
|
|
|
329,712
|
|
|||
Operating income
|
|
$
|
48,630
|
|
|
$
|
17,366
|
|
|
$
|
67,852
|
|
|
|
Year Ended January 31,
|
||||||||||
(in thousands)
|
|
2018
|
|
2017
|
|
2016
|
||||||
Americas:
|
|
|
|
|
|
|
||||||
United States
|
|
$
|
445,406
|
|
|
$
|
438,034
|
|
|
$
|
430,626
|
|
Other
|
|
150,993
|
|
|
134,111
|
|
|
150,435
|
|
|||
Total Americas
|
|
596,399
|
|
|
572,145
|
|
|
581,061
|
|
|||
EMEA
|
|
354,495
|
|
|
322,130
|
|
|
350,217
|
|
|||
APAC
|
|
184,335
|
|
|
167,831
|
|
|
198,988
|
|
|||
Total revenue
|
|
$
|
1,135,229
|
|
|
$
|
1,062,106
|
|
|
$
|
1,130,266
|
|
|
|
January 31,
|
||||||
(in thousands)
|
|
2018
|
|
2017
|
||||
United States
|
|
$
|
45,942
|
|
|
$
|
37,751
|
|
Israel
|
|
27,089
|
|
|
25,421
|
|
||
Other countries
|
|
16,058
|
|
|
14,379
|
|
||
Total property and equipment, net
|
|
$
|
89,089
|
|
|
$
|
77,551
|
|
|
|
Three Months Ended
|
||||||||||||||
|
|
April 30,
|
|
July 31,
|
|
October 31,
|
|
January 31,
|
||||||||
(in thousands, except per share data)
|
|
2017
|
|
2017
|
|
2017
|
|
2018
|
||||||||
Revenue
|
|
$
|
260,995
|
|
|
$
|
274,777
|
|
|
$
|
280,726
|
|
|
$
|
318,731
|
|
Gross profit
|
|
$
|
150,192
|
|
|
$
|
164,103
|
|
|
$
|
169,321
|
|
|
$
|
204,826
|
|
(Loss) income before (benefit) provision for income taxes
|
|
$
|
(19,932
|
)
|
|
$
|
(1,314
|
)
|
|
$
|
9,010
|
|
|
$
|
31,136
|
|
Net (loss) income
|
|
$
|
(19,040
|
)
|
|
$
|
(5,766
|
)
|
|
$
|
3,066
|
|
|
$
|
18,286
|
|
Net (loss) income attributable to Verint Systems Inc.
|
|
$
|
(19,786
|
)
|
|
$
|
(6,427
|
)
|
|
$
|
2,489
|
|
|
$
|
17,097
|
|
|
|
|
|
|
|
|
|
|
||||||||
Net (loss) income per common share attributable to Verint Systems Inc.
|
|
|
|
|
|
|
|
|
||||||||
Basic
|
|
$
|
(0.32
|
)
|
|
$
|
(0.10
|
)
|
|
$
|
0.04
|
|
|
$
|
0.27
|
|
Diluted
|
|
$
|
(0.32
|
)
|
|
$
|
(0.10
|
)
|
|
$
|
0.04
|
|
|
$
|
0.26
|
|
|
|
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 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
|
|
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
|
|
2,809,672
|
|
(2)
|
$
|
10.09
|
|
|
9,528,772
|
|
(3)
|
Equity compensation plans not approved by security holders
|
|
—
|
|
|
|
|
—
|
|
|
||
|
|
|
|
|
|
|
|
||||
Total
|
|
2,809,672
|
|
|
$
|
10.09
|
|
|
9,528,772
|
|
|
Number
|
|
Description
|
|
Filed Herewith /
Incorporated by
Reference from
|
|
|
|
|
|
|
|
|||
|
|
|||
|
|
|||
|
|
|||
|
|
|||
|
|
|||
|
|
|||
|
|
|||
|
|
|||
|
|
|||
|
|
|||
|
|
|||
|
|
|
|
|||
|
|
|||
|
|
|||
|
|
|||
|
|
|||
|
|
|||
|
|
|||
|
|
|||
|
|
|||
|
|
|||
|
|
|||
|
|
|||
|
|
|||
|
|
|||
|
|
|||
|
|
|||
|
|
|||
|
|
|||
|
|
|||
|
|
|||
|
|
|||
|
|
|||
|
|
|||
|
|
|||
|
|
|||
|
|
|||
|
|
|||
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, 2018
|
/s/ Dan Bodner
|
|
Dan Bodner
|
|
Chief Executive Officer
|
|
|
March 28, 2018
|
/s/ Douglas E. Robinson
|
|
Douglas E. Robinson
|
|
Chief Financial Officer
|
Name
|
|
Title
|
|
Date
|
|
|
|
|
|
/s/ Dan Bodner
|
|
Chief Executive Officer, and Chairman of the Board
|
|
March 28, 2018
|
Dan Bodner
|
|
(Principal Executive Officer)
|
|
|
|
|
|
|
|
/s/ Douglas E. Robinson
|
|
Chief Financial Officer
|
|
March 28, 2018
|
Douglas E. Robinson
|
|
(Principal Financial Officer and Principal Accounting Officer)
|
|
|
|
|
|
|
|
/s/ John R. Egan
|
|
Director
|
|
March 28, 2018
|
John R. Egan
|
|
|
|
|
|
|
|
|
|
/s/ Penelope Herscher
|
|
Director
|
|
March 28, 2018
|
Penelope Herscher
|
|
|
|
|
|
|
|
|
|
/s/ William H. Kurtz
|
|
Director
|
|
March 28, 2018
|
William H. Kurtz
|
|
|
|
|
|
|
|
|
|
/s/ Richard Nottenburg
|
|
Director
|
|
March 28, 2018
|
Richard Nottenburg
|
|
|
|
|
|
|
|
|
|
/s/ Howard Safir
|
|
Director
|
|
March 28, 2018
|
Howard Safir
|
|
|
|
|
|
|
|
|
|
/s/ Earl Shanks
|
|
Director
|
|
March 28, 2018
|
Earl Shanks
|
|
|
|
|
•
|
The scheduled delivery date will be specified on the enrollment form for the program year and is subject to change by the Company.
Please note that the scheduled delivery date may be different from (earlier or later than) the date that cash bonuses are paid in such year.
The scheduled delivery date will also be communicated to participating employees who do not make an election.
|
•
|
The Value Date will be the 5
th
trading day prior to the scheduled delivery date and will be specified on the enrollment form for the program year (subject to change). The Value Date will also be communicated to participating employees who do not make an election.
|
•
|
The discounted stock price to be used for the conversion described above on the Value Date will be the average of the closing prices of Verint’s common stock over the five trading days preceding the Value Date, minus the Program Year Discount.
|
•
|
Subject to the requirements of local law and any other written agreement that may exist between the participant and Verint:
2
(1) the participant must be employed by Verint Systems Inc. or a subsidiary thereof on the Value Date to be eligible to receive the shares scheduled to be delivered on the delivery date and (2) executive officers must be employed by Verint Systems Inc. or a subsidiary thereof on the vesting date to be eligible to receive the Incentive Shares. Notwithstanding the foregoing, if a participant is terminated
without cause
between the date the participant receives his or her cash bonus for the program year (generally in April or May) and the Value Date (generally in June or July), the Company will pay the participant the unpaid portion of his or her bonus in cash at the original cash amount.
3
|
1
|
RESTRICTED STOCK UNITS; VESTING
|
(a)
|
The Award of the restricted stock units (as may be further defined under the terms of the Plan, “
Restricted Stock Units
”) is made subject to the terms and conditions of the Plan, this Agreement and the Notice of Grant.
|
(b)
|
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)
|
Subject to the terms and conditions of this Agreement, the applicable percentage or fraction (per the Notice of Grant) of Restricted Stock Units awarded hereunder shall be deemed vested and no longer subject to forfeiture under this Agreement on the applicable vesting date in accordance with the schedule set forth in the Notice of Grant. Any fractional Restricted Stock Units resulting from the vesting of the Award shall be discarded and shall not be converted into a fractional Share.
|
(b)
|
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
|
(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 withholding that is not satisfied by any such action of the Company or its Subsidiary, Affiliate or agent.
|
(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
|
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
|
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)
|
|
2018
|
|
2017
|
|
2016
|
|
2015
|
|
2014
|
||||||||||
Earnings:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Income (loss) before provision (benefit) for income taxes
|
|
$
|
18,900
|
|
|
$
|
(23,474
|
)
|
|
$
|
23,180
|
|
|
$
|
21,403
|
|
|
$
|
63,315
|
|
Add: Fixed charges
|
|
44,589
|
|
|
43,302
|
|
|
40,218
|
|
|
42,151
|
|
|
34,330
|
|
|||||
Subtract: Noncontrolling interest in pre-tax income of subsidiaries
|
|
(3,693
|
)
|
|
(3,616
|
)
|
|
(5,526
|
)
|
|
(6,293
|
)
|
|
(6,081
|
)
|
|||||
|
|
$
|
59,796
|
|
|
$
|
16,212
|
|
|
$
|
57,872
|
|
|
$
|
57,261
|
|
|
$
|
91,564
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Fixed Charges and Preference Security Dividends:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Interest expense, including amortization of discounts
|
|
$
|
21,750
|
|
|
$
|
21,018
|
|
|
$
|
20,586
|
|
|
$
|
27,529
|
|
|
$
|
27,119
|
|
Amortization of deferred debt-related costs
|
|
14,309
|
|
|
13,944
|
|
|
13,300
|
|
|
9,133
|
|
|
2,662
|
|
|||||
Interest component of rent expense
|
|
8,530
|
|
|
8,340
|
|
|
6,332
|
|
|
5,489
|
|
|
4,549
|
|
|||||
Total Fixed Charges
|
|
44,589
|
|
|
43,302
|
|
|
40,218
|
|
|
42,151
|
|
|
34,330
|
|
|||||
Dividends on convertible preferred stock (pre-tax)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
211
|
|
|||||
Total Fixed Charges and Preference Security Dividends
|
|
$
|
44,589
|
|
|
$
|
43,302
|
|
|
$
|
40,218
|
|
|
$
|
42,151
|
|
|
$
|
34,541
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Ratio of Earnings to Fixed Charges
|
|
1.3
|
|
|
*
|
|
|
1.4
|
|
|
1.4
|
|
|
2.7
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Ratio of Earnings to Fixed Charges and Preference Security Dividends
|
|
1.3
|
|
|
*
|
|
|
1.4
|
|
|
1.4
|
|
|
2.7
|
|
Name
|
|
Jurisdiction of Incorporation or Organization
|
Andrew Reise Services, LLC (1)
|
|
Delaware
|
BPA Corporate Facilitation Ltd. (1)
|
|
United Kingdom
|
BPA International, Inc. (1)
|
|
New York
|
Ciboodle (Land and Estates) Ltd.
|
|
United Kingdom
|
CIS Comverse Information Systems Ltd.
|
|
Israel
|
EG Solutions EBT Limited
|
|
United Kingdom
|
EG Solutions Group Limited
|
|
United Kingdom
|
EG Solutions International Limited
|
|
United Kingdom
|
EG Solutions Limited
|
|
United Kingdom
|
EG Solutions Operations Management Solutions (Pty) Ltd.
|
|
South Africa
|
EG Solutions (SG) Pte Ltd.
|
|
Singapore
|
EG USA Inc.
|
|
Delaware
|
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
|
MultiVision Holdings Limited
|
|
British Virgin Islands
|
Nxtera Limited
|
|
United Kingdom
|
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
|
Triniventures BV
|
|
Netherlands
|
UT Techeng Limited
|
|
Cyprus
|
UTX Technologies Limited
|
|
Cyprus
|
Verba Technologies Asia Pacific Pte Ltd.
|
|
Singapore
|
Verba Technologies Kft
|
|
Hungary
|
Verba Technologies Limited
|
|
United Kingdom
|
Verint Acquisition LLC
|
|
Delaware
|
Verint Americas Inc.
|
|
Delaware
|
Verint CES Ltd.
|
|
Israel
|
Verint CES India Private Limited
|
|
India
|
Verint Cyber Intelligence Solutions India Private Limited
|
|
India
|
Verint Netherlands BV
|
|
Netherlands
|
Verint Security Intelligence Inc.
|
|
Delaware
|
Verint Systems (Asia Pacific) Limited
|
|
Hong Kong
|
Verint Systems (Australia) PTY Ltd.
|
|
Australia
|
Verint Systems Belgium N.V.
|
|
Belgium
|
Verint Systems Bulgaria
|
|
Bulgaria
|
Name
|
|
Jurisdiction of Incorporation or Organization
|
Verint Systems B.V.
|
|
The Netherlands
|
Verint Systems Canada Inc.
|
|
Canada
|
Verint Systems GmbH
|
|
Germany
|
Verint Systems (India) Private Ltd.
|
|
India
|
Verint Systems Japan K.K.
|
|
Japan
|
Verint Systems Ltd.
|
|
Israel
|
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 (Shanghai) Company Limited
|
|
People's Republic of China
|
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 Servicios 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
|
XTAQ Limited
|
|
United Kingdom
|
Dated:
|
March 28, 2018
|
|
By:
|
/s/ Dan Bodner
|
|
|
|
|
Dan Bodner
|
|
|
|
|
President and Chief Executive Officer
|
|
|
|
|
Principal Executive Officer
|
Dated:
|
March 28, 2018
|
|
By:
|
/s/ Douglas E. Robinson
|
|
|
|
|
Douglas E. Robinson
|
|
|
|
|
Chief Financial Officer
|
|
|
|
|
Principal Financial Officer
|
Dated:
|
March 28, 2018
|
/s/ Dan Bodner
|
|
|
Dan Bodner
|
|
|
President and Chief Executive Officer
|
|
|
Principal Executive Officer
|
Dated:
|
March 28, 2018
|
/s/ Douglas E. Robinson
|
|
|
Douglas E. Robinson
|
|
|
Chief Financial Officer
|
|
|
Principal Financial Officer
|