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þ
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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o
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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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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(631) 962-9600
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(Registrant’s Telephone Number, Including Area Code)
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Large accelerated filer
þ
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Accelerated filer
o
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Non-accelerated filer
o
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Smaller reporting company
o
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Emerging growth company
o
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Verint Systems Inc. and Subsidiaries
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Index to Form 10-Q
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As of and For the Period Ended October 31, 2018
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Page
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•
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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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•
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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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•
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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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•
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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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•
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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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•
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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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•
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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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•
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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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•
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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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•
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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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•
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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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•
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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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•
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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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•
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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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•
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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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•
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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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•
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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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•
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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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•
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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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•
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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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•
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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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•
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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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•
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risks associated with changing accounting principles or standards, tax laws and regulations, tax rates, and the continuing availability of expected tax benefits.
|
VERINT SYSTEMS INC. AND SUBSIDIARIES
|
|
Index to Condensed Consolidated Financial Statements (Unaudited)
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Page
|
|
|
|
|
October 31,
|
|
January 31,
|
||||
(in thousands, except share and per share data)
|
|
2018
|
|
2018
|
||||
Assets
|
|
|
|
|
|
|
||
Current Assets:
|
|
|
|
|
|
|
||
Cash and cash equivalents
|
|
$
|
353,422
|
|
|
$
|
337,942
|
|
Restricted cash and cash equivalents, and restricted bank time deposits
|
|
32,457
|
|
|
33,303
|
|
||
Short-term investments
|
|
49,434
|
|
|
6,566
|
|
||
Accounts receivable, net of allowance for doubtful accounts of $2.9 million and $2.2 million, respectively
|
|
311,492
|
|
|
296,324
|
|
||
Contract assets
|
|
70,076
|
|
|
—
|
|
||
Inventories
|
|
21,737
|
|
|
19,871
|
|
||
Deferred cost of revenue
|
|
9,651
|
|
|
6,096
|
|
||
Prepaid expenses and other current assets
|
|
85,310
|
|
|
82,090
|
|
||
Total current assets
|
|
933,579
|
|
|
782,192
|
|
||
Property and equipment, net
|
|
95,875
|
|
|
89,089
|
|
||
Goodwill
|
|
1,364,452
|
|
|
1,388,299
|
|
||
Intangible assets, net
|
|
192,186
|
|
|
226,093
|
|
||
Capitalized software development costs, net
|
|
11,557
|
|
|
9,228
|
|
||
Long-term deferred cost of revenue
|
|
4,283
|
|
|
2,804
|
|
||
Other assets
|
|
101,643
|
|
|
82,915
|
|
||
Total assets
|
|
$
|
2,703,575
|
|
|
$
|
2,580,620
|
|
|
|
|
|
|
|
|
||
Liabilities and Stockholders' Equity
|
|
|
|
|
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|
||
Current Liabilities:
|
|
|
|
|
|
|
||
Accounts payable
|
|
$
|
79,372
|
|
|
$
|
84,639
|
|
Accrued expenses and other current liabilities
|
|
181,452
|
|
|
224,765
|
|
||
Contract liabilities
|
|
306,240
|
|
|
196,107
|
|
||
Total current liabilities
|
|
567,064
|
|
|
505,511
|
|
||
Long-term debt
|
|
775,342
|
|
|
768,484
|
|
||
Long-term contract liabilities
|
|
27,512
|
|
|
24,519
|
|
||
Other liabilities
|
|
120,158
|
|
|
149,770
|
|
||
Total liabilities
|
|
1,490,076
|
|
|
1,448,284
|
|
||
Commitments and Contingencies
|
|
|
|
|
|
|
||
Stockholders' Equity:
|
|
|
|
|
|
|
||
Preferred stock - $0.001 par value; authorized 2,207,000 shares at October 31, 2018 and January 31, 2018, respectively; none issued.
|
|
—
|
|
|
—
|
|
||
Common stock - $0.001 par value; authorized 120,000,000 shares. Issued 66,937,000 and 65,497,000 shares; outstanding 65,272,000 and 63,836,000 shares at October 31, 2018 and January 31, 2018, respectively.
|
|
67
|
|
|
65
|
|
||
Additional paid-in capital
|
|
1,572,806
|
|
|
1,519,724
|
|
||
Treasury stock, at cost - 1,665,000 and 1,661,000 shares at October 31, 2018 and January 31, 2018, respectively.
|
|
(57,598
|
)
|
|
(57,425
|
)
|
||
Accumulated deficit
|
|
(161,580
|
)
|
|
(238,312
|
)
|
||
Accumulated other comprehensive loss
|
|
(154,148
|
)
|
|
(103,460
|
)
|
||
Total Verint Systems Inc. stockholders' equity
|
|
1,199,547
|
|
|
1,120,592
|
|
||
Noncontrolling interests
|
|
13,952
|
|
|
11,744
|
|
||
Total stockholders' equity
|
|
1,213,499
|
|
|
1,132,336
|
|
||
Total liabilities and stockholders' equity
|
|
$
|
2,703,575
|
|
|
$
|
2,580,620
|
|
|
|
Three Months Ended
October 31, |
|
Nine Months Ended
October 31, |
||||||||||||
(in thousands, except per share data)
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Revenue:
|
|
|
|
|
|
|
|
|
|
|
||||||
Product
|
|
$
|
111,670
|
|
|
$
|
94,827
|
|
|
$
|
327,576
|
|
|
$
|
279,056
|
|
Service and support
|
|
192,313
|
|
|
185,899
|
|
|
571,941
|
|
|
537,442
|
|
||||
Total revenue
|
|
303,983
|
|
|
280,726
|
|
|
899,517
|
|
|
816,498
|
|
||||
Cost of revenue:
|
|
|
|
|
|
|
|
|
|
|
||||||
Product
|
|
33,124
|
|
|
32,840
|
|
|
100,917
|
|
|
98,708
|
|
||||
Service and support
|
|
72,182
|
|
|
69,383
|
|
|
218,842
|
|
|
205,928
|
|
||||
Amortization of acquired technology
|
|
5,933
|
|
|
9,182
|
|
|
18,879
|
|
|
28,246
|
|
||||
Total cost of revenue
|
|
111,239
|
|
|
111,405
|
|
|
338,638
|
|
|
332,882
|
|
||||
Gross profit
|
|
192,744
|
|
|
169,321
|
|
|
560,879
|
|
|
483,616
|
|
||||
Operating expenses:
|
|
|
|
|
|
|
|
|
|
|
||||||
Research and development, net
|
|
51,587
|
|
|
47,157
|
|
|
155,993
|
|
|
141,911
|
|
||||
Selling, general and administrative
|
|
99,902
|
|
|
97,304
|
|
|
311,482
|
|
|
302,605
|
|
||||
Amortization of other acquired intangible assets
|
|
7,585
|
|
|
7,048
|
|
|
22,721
|
|
|
26,727
|
|
||||
Total operating expenses
|
|
159,074
|
|
|
151,509
|
|
|
490,196
|
|
|
471,243
|
|
||||
Operating income
|
|
33,670
|
|
|
17,812
|
|
|
70,683
|
|
|
12,373
|
|
||||
Other income (expense), net:
|
|
|
|
|
|
|
|
|
|
|
||||||
Interest income
|
|
1,319
|
|
|
654
|
|
|
3,246
|
|
|
1,793
|
|
||||
Interest expense
|
|
(8,686
|
)
|
|
(8,891
|
)
|
|
(27,670
|
)
|
|
(26,997
|
)
|
||||
Loss on early retirement of debt
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,934
|
)
|
||||
Other (expense) income, net
|
|
(489
|
)
|
|
(565
|
)
|
|
(2,194
|
)
|
|
2,529
|
|
||||
Total other expense, net
|
|
(7,856
|
)
|
|
(8,802
|
)
|
|
(26,618
|
)
|
|
(24,609
|
)
|
||||
Income (loss) before provision for income taxes
|
|
25,814
|
|
|
9,010
|
|
|
44,065
|
|
|
(12,236
|
)
|
||||
Provision for income taxes
|
|
5,601
|
|
|
5,944
|
|
|
2,153
|
|
|
9,504
|
|
||||
Net income (loss)
|
|
20,213
|
|
|
3,066
|
|
|
41,912
|
|
|
(21,740
|
)
|
||||
Net income attributable to noncontrolling interests
|
|
1,293
|
|
|
577
|
|
|
3,227
|
|
|
1,984
|
|
||||
Net income (loss) attributable to Verint Systems Inc.
|
|
$
|
18,920
|
|
|
$
|
2,489
|
|
|
$
|
38,685
|
|
|
$
|
(23,724
|
)
|
|
|
|
|
|
|
|
|
|
||||||||
Net income (loss) per common share attributable to Verint Systems Inc.:
|
|
|
|
|
|
|
|
|
|
|
||||||
Basic
|
|
$
|
0.29
|
|
|
$
|
0.04
|
|
|
$
|
0.60
|
|
|
$
|
(0.38
|
)
|
Diluted
|
|
$
|
0.29
|
|
|
$
|
0.04
|
|
|
$
|
0.59
|
|
|
$
|
(0.38
|
)
|
|
|
|
|
|
|
|
|
|
||||||||
Weighted-average common shares outstanding:
|
|
|
|
|
|
|
|
|
|
|
||||||
Basic
|
|
65,122
|
|
|
63,759
|
|
|
64,690
|
|
|
63,152
|
|
||||
Diluted
|
|
66,200
|
|
|
64,588
|
|
|
65,885
|
|
|
63,152
|
|
|
|
Three Months Ended
October 31, |
|
Nine Months Ended
October 31, |
||||||||||||
(in thousands)
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Net income (loss)
|
|
$
|
20,213
|
|
|
$
|
3,066
|
|
|
$
|
41,912
|
|
|
$
|
(21,740
|
)
|
Other comprehensive (loss) income, net of reclassification adjustments:
|
|
|
|
|
|
|
|
|
|
|
||||||
Foreign currency translation adjustments
|
|
(11,780
|
)
|
|
779
|
|
|
(45,509
|
)
|
|
21,883
|
|
||||
Net (decrease) increase from foreign exchange contracts designated as hedges
|
|
(262
|
)
|
|
(829
|
)
|
|
(8,199
|
)
|
|
2,272
|
|
||||
Net increase (decrease) from interest rate swap designated as a hedge
|
|
1,266
|
|
|
—
|
|
|
1,878
|
|
|
(1,021
|
)
|
||||
Benefit (provision) for income taxes on net increase (decrease) from foreign exchange contracts and interest rate swap designated as hedges
|
|
27
|
|
|
29
|
|
|
823
|
|
|
(242
|
)
|
||||
Other comprehensive (loss) income
|
|
(10,749
|
)
|
|
(21
|
)
|
|
(51,007
|
)
|
|
22,892
|
|
||||
Comprehensive income (loss)
|
|
9,464
|
|
|
3,045
|
|
|
(9,095
|
)
|
|
1,152
|
|
||||
Comprehensive income attributable to noncontrolling interests
|
|
1,144
|
|
|
688
|
|
|
2,908
|
|
|
2,383
|
|
||||
Comprehensive income (loss) attributable to Verint Systems Inc.
|
|
$
|
8,320
|
|
|
$
|
2,357
|
|
|
$
|
(12,003
|
)
|
|
$
|
(1,231
|
)
|
|
|
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 at 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
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(23,724
|
)
|
|
—
|
|
|
(23,724
|
)
|
|
1,984
|
|
|
(21,740
|
)
|
||||||||
Other comprehensive income
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
22,493
|
|
|
22,493
|
|
|
399
|
|
|
22,892
|
|
||||||||
Stock-based compensation - equity-classified awards
|
|
—
|
|
|
—
|
|
|
43,182
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
43,182
|
|
|
—
|
|
|
43,182
|
|
||||||||
Common stock issued for stock awards and stock bonuses
|
|
1,369
|
|
|
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
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
580
|
|
|
580
|
|
||||||||
Dividends to noncontrolling interest
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(716
|
)
|
|
(716
|
)
|
||||||||
Cumulative effect of adoption of ASU No. 2016-16
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(869
|
)
|
|
—
|
|
|
(869
|
)
|
|
—
|
|
|
(869
|
)
|
||||||||
Balances at October 31, 2017
|
|
63,781
|
|
|
$
|
65
|
|
|
$
|
1,505,492
|
|
|
$
|
(57,425
|
)
|
|
$
|
(255,409
|
)
|
|
$
|
(132,363
|
)
|
|
$
|
1,060,360
|
|
|
$
|
13,007
|
|
|
$
|
1,073,367
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Balances at January 31, 2018
|
|
63,836
|
|
|
$
|
65
|
|
|
$
|
1,519,724
|
|
|
$
|
(57,425
|
)
|
|
$
|
(238,312
|
)
|
|
$
|
(103,460
|
)
|
|
$
|
1,120,592
|
|
|
$
|
11,744
|
|
|
$
|
1,132,336
|
|
Net income
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
38,685
|
|
|
—
|
|
|
38,685
|
|
|
3,227
|
|
|
41,912
|
|
||||||||
Other comprehensive loss
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(50,688
|
)
|
|
(50,688
|
)
|
|
(319
|
)
|
|
(51,007
|
)
|
||||||||
Stock-based compensation - equity-classified awards
|
|
—
|
|
|
—
|
|
|
44,199
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
44,199
|
|
|
—
|
|
|
44,199
|
|
||||||||
Common stock issued for stock awards and stock bonuses
|
|
1,440
|
|
|
2
|
|
|
8,883
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
8,885
|
|
|
—
|
|
|
8,885
|
|
||||||||
Treasury stock acquired
|
|
(4
|
)
|
|
—
|
|
|
—
|
|
|
(173
|
)
|
|
—
|
|
|
—
|
|
|
(173
|
)
|
|
—
|
|
|
(173
|
)
|
||||||||
Capital contributions by noncontrolling interest
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
60
|
|
|
60
|
|
||||||||
Dividends to noncontrolling interest
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(760
|
)
|
|
(760
|
)
|
||||||||
Cumulative effect of adoption of ASU No. 2014-09
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
38,047
|
|
|
—
|
|
|
38,047
|
|
|
—
|
|
|
38,047
|
|
||||||||
Balances at October 31, 2018
|
|
65,272
|
|
|
$
|
67
|
|
|
$
|
1,572,806
|
|
|
$
|
(57,598
|
)
|
|
$
|
(161,580
|
)
|
|
$
|
(154,148
|
)
|
|
$
|
1,199,547
|
|
|
$
|
13,952
|
|
|
$
|
1,213,499
|
|
|
|
Nine Months Ended
October 31, |
||||||
(in thousands)
|
|
2018
|
|
2017
|
||||
Cash flows from operating activities:
|
|
|
|
|
|
|
||
Net income (loss)
|
|
$
|
41,912
|
|
|
$
|
(21,740
|
)
|
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
|
|
|
|
|
|
|
||
Depreciation and amortization
|
|
66,231
|
|
|
79,879
|
|
||
Stock-based compensation, excluding cash-settled awards
|
|
50,509
|
|
|
50,397
|
|
||
Amortization of discount on convertible notes
|
|
8,829
|
|
|
8,377
|
|
||
Non-cash gains on derivative financial instruments, net
|
|
(3,760
|
)
|
|
(292
|
)
|
||
Loss on early retirement of debt
|
|
—
|
|
|
1,934
|
|
||
Other non-cash items, net
|
|
(1,972
|
)
|
|
307
|
|
||
Changes in operating assets and liabilities, net of effects of business combinations:
|
|
|
|
|
|
|
||
Accounts receivable
|
|
35,879
|
|
|
(15,824
|
)
|
||
Contract assets
|
|
(999
|
)
|
|
—
|
|
||
Inventories
|
|
(4,404
|
)
|
|
(2,232
|
)
|
||
Deferred cost of revenue
|
|
2,184
|
|
|
1,503
|
|
||
Prepaid expenses and other assets
|
|
(8,443
|
)
|
|
(12,947
|
)
|
||
Accounts payable and accrued expenses
|
|
(17,841
|
)
|
|
13,145
|
|
||
Contract liabilities
|
|
(29,940
|
)
|
|
(14,129
|
)
|
||
Other, net
|
|
(6,535
|
)
|
|
7,796
|
|
||
Net cash provided by operating activities
|
|
131,650
|
|
|
96,174
|
|
||
|
|
|
|
|
||||
Cash flows from investing activities:
|
|
|
|
|
|
|
||
Cash paid for business combinations, including adjustments, net of cash acquired
|
|
(27,370
|
)
|
|
(28,071
|
)
|
||
Purchases of property and equipment
|
|
(22,933
|
)
|
|
(26,445
|
)
|
||
Purchases of investments
|
|
(53,868
|
)
|
|
(8,305
|
)
|
||
Maturities and sales of investments
|
|
10,620
|
|
|
5,244
|
|
||
Cash paid for capitalized software development costs
|
|
(4,767
|
)
|
|
(909
|
)
|
||
Change in restricted bank time deposits, and other investing activities, net
|
|
(21,128
|
)
|
|
(111
|
)
|
||
Net cash used in investing activities
|
|
(119,446
|
)
|
|
(58,597
|
)
|
||
|
|
|
|
|
||||
Cash flows from financing activities:
|
|
|
|
|
|
|
||
Proceeds from borrowings, net of original issuance discount
|
|
—
|
|
|
424,469
|
|
||
Repayments of borrowings and other financing obligations
|
|
(4,317
|
)
|
|
(410,536
|
)
|
||
Payments of debt-related costs
|
|
(206
|
)
|
|
(7,107
|
)
|
||
Purchases of treasury stock
|
|
(173
|
)
|
|
—
|
|
||
Dividends paid to noncontrolling interest
|
|
(760
|
)
|
|
(716
|
)
|
||
Payments of contingent consideration for business combinations (financing portion)
|
|
(10,681
|
)
|
|
(7,210
|
)
|
||
Other financing activities, net
|
|
(429
|
)
|
|
(320
|
)
|
||
Net cash used in financing activities
|
|
(16,566
|
)
|
|
(1,420
|
)
|
||
Foreign currency effects on cash, cash equivalents, restricted cash, and restricted cash equivalents
|
|
(3,864
|
)
|
|
447
|
|
||
Net (decrease) increase in cash, cash equivalents, restricted cash, and restricted cash equivalents
|
|
(8,226
|
)
|
|
36,604
|
|
||
Cash, cash equivalents, restricted cash, and restricted cash equivalents, beginning of period
|
|
398,210
|
|
|
369,329
|
|
||
Cash, cash equivalents, restricted cash, and restricted cash equivalents, end of period
|
|
$
|
389,984
|
|
|
$
|
405,933
|
|
|
|
|
|
|
||||
Reconciliation of cash, cash equivalents, restricted cash, and restricted cash equivalents at end of period to the condensed consolidated balance sheets:
|
|
|
|
|
||||
Cash and cash equivalents
|
|
$
|
353,422
|
|
|
$
|
312,666
|
|
Restricted cash and cash equivalents included in restricted cash and cash equivalents, and restricted bank time deposits
|
|
32,212
|
|
|
62,664
|
|
||
Restricted cash and cash equivalents included in other assets
|
|
4,350
|
|
|
30,603
|
|
||
Total cash, cash equivalents, restricted cash, and restricted cash equivalents
|
|
$
|
389,984
|
|
|
$
|
405,933
|
|
1.
|
BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES
|
|
|
Nine Months Ended
October 31, 2017 |
||||||||||
(in thousands)
|
|
As previously reported
|
|
Adjustments
|
|
As Adjusted
|
||||||
Net cash provided by operating activities
|
|
$
|
96,174
|
|
|
$
|
—
|
|
|
$
|
96,174
|
|
Net cash used in investing activities
|
|
(88,693
|
)
|
|
30,096
|
|
|
(58,597
|
)
|
|||
Net cash used in financing activities
|
|
(1,420
|
)
|
|
—
|
|
|
(1,420
|
)
|
|||
Foreign currency effects on cash, cash equivalents, restricted cash, and restricted cash equivalents
|
|
(758
|
)
|
|
1,205
|
|
|
447
|
|
|||
Net increase in cash, cash equivalents, restricted cash, and restricted cash equivalents
|
|
5,303
|
|
|
31,301
|
|
|
36,604
|
|
|||
Cash, cash equivalents, restricted cash, and restricted cash equivalents, beginning of period
|
|
307,363
|
|
|
61,966
|
|
|
369,329
|
|
|||
Cash, cash equivalents, restricted cash, and restricted cash equivalents, end of period
|
|
$
|
312,666
|
|
|
$
|
93,267
|
|
|
$
|
405,933
|
|
2.
|
REVENUE RECOGNITION
|
|
|
Three Months Ended
October 31, 2018 |
|
Nine Months Ended
October 31, 2018 |
||||||||||||||||||||
(in thousands)
|
|
Customer Engagement
|
|
Cyber Intelligence
|
|
Total
|
|
Customer Engagement
|
|
Cyber Intelligence
|
|
Total
|
||||||||||||
Revenue:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Product
|
|
$
|
52,353
|
|
|
$
|
59,317
|
|
|
$
|
111,670
|
|
|
$
|
156,245
|
|
|
$
|
171,331
|
|
|
$
|
327,576
|
|
Service and support
|
|
145,114
|
|
|
47,199
|
|
|
192,313
|
|
|
428,485
|
|
|
143,456
|
|
|
571,941
|
|
||||||
Total revenue
|
|
$
|
197,467
|
|
|
$
|
106,516
|
|
|
$
|
303,983
|
|
|
$
|
584,730
|
|
|
$
|
314,787
|
|
|
$
|
899,517
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Revenue by recurrence:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Recurring revenue
|
|
$
|
112,274
|
|
|
$
|
40,349
|
|
|
$
|
152,623
|
|
|
$
|
330,890
|
|
|
$
|
119,238
|
|
|
$
|
450,128
|
|
Nonrecurring revenue
|
|
85,193
|
|
|
66,167
|
|
|
151,360
|
|
|
253,840
|
|
|
195,549
|
|
|
449,389
|
|
||||||
Total revenue
|
|
$
|
197,467
|
|
|
$
|
106,516
|
|
|
$
|
303,983
|
|
|
$
|
584,730
|
|
|
$
|
314,787
|
|
|
$
|
899,517
|
|
(in thousands)
|
|
October 31, 2018
|
||
Accounts receivable, net
|
|
$
|
311,492
|
|
Contract assets
|
|
70,076
|
|
|
Long-term contract assets (included in other assets)
|
|
1,289
|
|
|
Contract liabilities
|
|
306,240
|
|
|
Long-term contract liabilities
|
|
27,512
|
|
(in thousands)
|
|
Balance at January 31, 2018
|
|
Adjustments from Adopting ASU No. 2014-09
|
|
Balance at February 1, 2018
|
||||||
Assets:
|
|
|
|
|
|
|
||||||
Accounts receivable, net
|
|
$
|
296,324
|
|
|
$
|
53,682
|
|
|
$
|
350,006
|
|
Contract assets
|
|
—
|
|
|
69,217
|
|
|
69,217
|
|
|||
Deferred cost of revenue
|
|
6,096
|
|
|
2,056
|
|
|
8,152
|
|
|||
Prepaid expenses and other current assets
|
|
82,090
|
|
|
(829
|
)
|
|
81,261
|
|
|||
Long-term deferred cost of revenue
|
|
2,804
|
|
|
2,193
|
|
|
4,997
|
|
|||
Deferred income taxes
|
|
30,878
|
|
|
(2,248
|
)
|
|
28,630
|
|
|||
Other assets
|
|
52,037
|
|
|
14,912
|
|
|
66,949
|
|
|||
|
|
|
|
|
|
|
||||||
Liabilities:
|
|
|
|
|
|
|
||||||
Accrued expenses and other current liabilities
|
|
220,265
|
|
|
(46,062
|
)
|
|
174,203
|
|
|||
Contract liabilities
|
|
196,107
|
|
|
139,517
|
|
|
335,624
|
|
|||
Long-term contract liabilities
|
|
24,519
|
|
|
6,518
|
|
|
31,037
|
|
|||
Deferred income taxes
|
|
35,305
|
|
|
963
|
|
|
36,268
|
|
|||
|
|
|
|
|
|
|
||||||
Stockholders' Equity:
|
|
|
|
|
|
|
||||||
Total stockholders' equity
|
|
1,132,336
|
|
|
38,047
|
|
|
1,170,383
|
|
|
|
As of October 31, 2018
|
||||||||||
(in thousands)
|
|
As Reported
|
|
Balances without Adoption of ASU No. 2014-09
|
|
Effect of Change Higher (Lower)
|
||||||
Condensed Consolidated Balance Sheet
|
|
|
|
|
|
|
||||||
Assets:
|
|
|
|
|
|
|
||||||
Accounts receivable, net
|
|
$
|
311,492
|
|
|
$
|
266,497
|
|
|
$
|
44,995
|
|
Contract assets
|
|
70,076
|
|
|
—
|
|
|
70,076
|
|
|||
Deferred cost of revenue
|
|
9,651
|
|
|
11,170
|
|
|
(1,519
|
)
|
|||
Prepaid expenses and other current assets
|
|
85,310
|
|
|
86,462
|
|
|
(1,152
|
)
|
|||
Long-term deferred cost of revenue
|
|
4,283
|
|
|
1,214
|
|
|
3,069
|
|
|||
Other assets
|
|
101,643
|
|
|
79,330
|
|
|
22,313
|
|
|||
|
|
|
|
|
|
|
||||||
Liabilities:
|
|
|
|
|
|
|
||||||
Accrued expenses and other current liabilities
|
|
181,452
|
|
|
216,637
|
|
|
(35,185
|
)
|
|||
Contract liabilities
|
|
306,240
|
|
|
207,199
|
|
|
99,041
|
|
|||
Long-term contract liabilities
|
|
27,512
|
|
|
26,700
|
|
|
812
|
|
|||
Other liabilities
|
|
120,158
|
|
|
119,236
|
|
|
922
|
|
|||
|
|
|
|
|
|
|
||||||
Stockholders' Equity:
|
|
|
|
|
|
|
||||||
Total stockholders' equity
|
|
1,213,499
|
|
|
1,141,307
|
|
|
72,192
|
|
|
|
Three Months Ended
October 31, 2018 |
||||||||||
(in thousands)
|
|
As Reported
|
|
Balances without Adoption of ASU No. 2014-09
|
|
Effect of Change Higher (Lower)
|
||||||
Condensed Consolidated Statement of Operations
|
|
|
|
|
|
|
||||||
Revenue:
|
|
|
|
|
|
|
||||||
Product
|
|
$
|
111,670
|
|
|
$
|
109,224
|
|
|
$
|
2,446
|
|
Service and support
|
|
192,313
|
|
|
192,849
|
|
|
(536
|
)
|
|||
|
|
|
|
|
|
|
||||||
Cost of revenue:
|
|
|
|
|
|
|
||||||
Product
|
|
33,124
|
|
|
30,315
|
|
|
2,809
|
|
|||
Service and support
|
|
72,182
|
|
|
72,847
|
|
|
(665
|
)
|
|||
|
|
|
|
|
|
|
||||||
Expenses and Other:
|
|
|
|
|
|
|
||||||
Selling, general and administrative
|
|
99,902
|
|
|
102,463
|
|
|
(2,561
|
)
|
|||
Provision (benefit) for income taxes
|
|
5,601
|
|
|
5,401
|
|
|
200
|
|
|||
Net income
|
|
20,213
|
|
|
18,086
|
|
|
2,127
|
|
|
|
Nine Months Ended
October 31, 2018 |
||||||||||
(in thousands)
|
|
As Reported
|
|
Balances without Adoption of ASU No. 2014-09
|
|
Effect of Change Higher (Lower)
|
||||||
Condensed Consolidated Statement of Operations
|
|
|
|
|
|
|
||||||
Revenue:
|
|
|
|
|
|
|
||||||
Product
|
|
$
|
327,576
|
|
|
$
|
300,116
|
|
|
$
|
27,460
|
|
Service and support
|
|
571,941
|
|
|
562,701
|
|
|
9,240
|
|
|||
|
|
|
|
|
|
|
||||||
Cost of revenue:
|
|
|
|
|
|
|
||||||
Product
|
|
100,917
|
|
|
94,243
|
|
|
6,674
|
|
|||
Service and support
|
|
218,842
|
|
|
219,319
|
|
|
(477
|
)
|
|||
|
|
|
|
|
|
|
||||||
Expenses and Other:
|
|
|
|
|
|
|
||||||
Selling, general and administrative
|
|
311,482
|
|
|
319,481
|
|
|
(7,999
|
)
|
|||
Provision (benefit) for income taxes
|
|
2,153
|
|
|
(1,647
|
)
|
|
3,800
|
|
|||
Net income
|
|
41,912
|
|
|
7,210
|
|
|
34,702
|
|
3.
|
NET INCOME (LOSS) PER COMMON SHARE ATTRIBUTABLE TO VERINT SYSTEMS INC.
|
|
|
Three Months Ended
October 31, |
|
Nine Months Ended
October 31, |
||||||||||||
(in thousands, except per share amounts)
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Net income (loss)
|
|
$
|
20,213
|
|
|
$
|
3,066
|
|
|
$
|
41,912
|
|
|
$
|
(21,740
|
)
|
Net income attributable to noncontrolling interests
|
|
1,293
|
|
|
577
|
|
|
3,227
|
|
|
1,984
|
|
||||
Net income (loss) attributable to Verint Systems Inc.
|
|
$
|
18,920
|
|
|
$
|
2,489
|
|
|
$
|
38,685
|
|
|
$
|
(23,724
|
)
|
Weighted-average shares outstanding:
|
|
|
|
|
|
|
|
|
|
|
||||||
Basic
|
|
65,122
|
|
|
63,759
|
|
|
64,690
|
|
|
63,152
|
|
||||
Dilutive effect of employee equity award plans
|
|
1,078
|
|
|
829
|
|
|
1,195
|
|
|
—
|
|
||||
Dilutive effect of 1.50% convertible senior notes
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Dilutive effect of warrants
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Diluted
|
|
66,200
|
|
|
64,588
|
|
|
65,885
|
|
|
63,152
|
|
||||
Net income (loss) per common share attributable to Verint Systems Inc.:
|
|
|
|
|
|
|
|
|
|
|
||||||
Basic
|
|
$
|
0.29
|
|
|
$
|
0.04
|
|
|
$
|
0.60
|
|
|
$
|
(0.38
|
)
|
Diluted
|
|
$
|
0.29
|
|
|
$
|
0.04
|
|
|
$
|
0.59
|
|
|
$
|
(0.38
|
)
|
|
|
Three Months Ended
October 31, |
|
Nine Months Ended
October 31, |
||||||||
(in thousands)
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||
Common shares excluded from calculation:
|
|
|
|
|
|
|
|
|
|
|
||
Stock options and restricted stock-based awards
|
|
546
|
|
|
600
|
|
|
432
|
|
|
1,205
|
|
1.50% convertible senior notes
|
|
6,205
|
|
|
6,205
|
|
|
6,205
|
|
|
6,205
|
|
Warrants
|
|
6,205
|
|
|
6,205
|
|
|
6,205
|
|
|
6,205
|
|
|
|
October 31, 2018
|
||||||||||||||
(in thousands)
|
|
Cost Basis
|
|
Gross Unrealized Gains
|
|
Gross Unrealized Losses
|
|
Estimated Fair Value
|
||||||||
Cash and cash equivalents:
|
|
|
|
|
|
|
|
|
||||||||
Cash and bank time deposits
|
|
$
|
297,540
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
297,540
|
|
Money market funds
|
|
52,640
|
|
|
—
|
|
|
—
|
|
|
52,640
|
|
||||
Commercial paper
|
|
3,242
|
|
|
—
|
|
|
—
|
|
|
3,242
|
|
||||
Total cash and cash equivalents
|
|
$
|
353,422
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
353,422
|
|
|
|
|
|
|
|
|
|
|
||||||||
Short-term investments:
|
|
|
|
|
|
|
|
|
||||||||
Bank time deposits
|
|
$
|
49,434
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
49,434
|
|
Total short-term investments
|
|
$
|
49,434
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
49,434
|
|
|
|
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
|
|
5.
|
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 in another, the sellers 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
|
|
25,874
|
|
|
Other purchase price adjustments
|
|
2,897
|
|
|
Total purchase prices
|
|
$
|
134,820
|
|
|
|
|
||
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
|
|
(12,512
|
)
|
|
Deferred revenue - current and long-term
|
|
(4,424
|
)
|
|
Deferred income taxes
|
|
(8,550
|
)
|
|
Net tangible liabilities
|
|
(3,429
|
)
|
|
Identifiable intangible assets:
|
|
|
||
Customer relationships
|
|
24,812
|
|
|
Developed technology
|
|
29,614
|
|
|
Trademarks and trade names
|
|
2,456
|
|
|
Total identifiable intangible assets
|
|
56,882
|
|
|
Goodwill
|
|
81,367
|
|
|
Total purchase price allocations
|
|
$
|
134,820
|
|
6.
|
INTANGIBLE ASSETS AND GOODWILL
|
|
|
October 31, 2018
|
||||||||||
(in thousands)
|
|
Cost
|
|
Accumulated
Amortization
|
|
Net
|
||||||
Intangible assets, with finite lives:
|
|
|
|
|
|
|
|
|
|
|||
Customer relationships
|
|
$
|
431,235
|
|
|
$
|
(292,419
|
)
|
|
$
|
138,816
|
|
Acquired technology
|
|
273,456
|
|
|
(225,886
|
)
|
|
47,570
|
|
|||
Trade names
|
|
26,486
|
|
|
(20,761
|
)
|
|
5,725
|
|
|||
Non-competition agreements
|
|
3,047
|
|
|
(2,972
|
)
|
|
75
|
|
|||
Distribution network
|
|
4,440
|
|
|
(4,440
|
)
|
|
—
|
|
|||
Total intangible assets
|
|
$
|
738,664
|
|
|
$
|
(546,478
|
)
|
|
$
|
192,186
|
|
|
|
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
|
|
|
|
October 31,
|
|
January 31,
|
||||
(in thousands)
|
|
2018
|
|
2018
|
||||
Customer Engagement
|
|
$
|
186,549
|
|
|
$
|
213,963
|
|
Cyber Intelligence
|
|
5,637
|
|
|
12,130
|
|
||
Total
|
|
$
|
192,186
|
|
|
$
|
226,093
|
|
|
|
|
|
Reportable Segment
|
||||||||
(in thousands)
|
|
Total
|
|
Customer Engagement
|
|
Cyber Intelligence
|
||||||
Year Ended 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
|
|
|||
Business combinations, including adjustments to prior period acquisitions
|
|
14,526
|
|
|
14,526
|
|
|
—
|
|
|||
Foreign currency translation and other
|
|
(38,373
|
)
|
|
(37,405
|
)
|
|
(968
|
)
|
|||
Goodwill, net, at October 31, 2018
|
|
$
|
1,364,452
|
|
|
$
|
1,228,214
|
|
|
$
|
136,238
|
|
|
|
|
|
|
|
|
||||||
Balance at October 31, 2018:
|
|
|
|
|
|
|
|
|
|
|||
Goodwill, gross, at October 31, 2018
|
|
$
|
1,431,317
|
|
|
$
|
1,284,257
|
|
|
$
|
147,060
|
|
Accumulated impairment losses through October 31, 2018
|
|
(66,865
|
)
|
|
(56,043
|
)
|
|
(10,822
|
)
|
|||
Goodwill, net, at October 31, 2018
|
|
$
|
1,364,452
|
|
|
$
|
1,228,214
|
|
|
$
|
136,238
|
|
7.
|
LONG-TERM DEBT
|
|
|
October 31,
|
|
January 31,
|
||||
(in thousands)
|
|
2018
|
|
2018
|
||||
|
|
|
|
|
||||
1.50% Convertible Senior Notes
|
|
$
|
400,000
|
|
|
$
|
400,000
|
|
2017 Term Loan
|
|
419,688
|
|
|
422,875
|
|
||
Other debt
|
|
131
|
|
|
250
|
|
||
Less: Unamortized debt discounts and issuance costs
|
|
(40,095
|
)
|
|
(50,141
|
)
|
||
Total debt
|
|
779,724
|
|
|
772,984
|
|
||
Less: current maturities
|
|
4,382
|
|
|
4,500
|
|
||
Long-term debt
|
|
$
|
775,342
|
|
|
$
|
768,484
|
|
(in thousands)
|
|
|
||
Years Ending January 31,
|
|
Amount
|
||
2019 (remainder of year)
|
|
$
|
1,063
|
|
2020
|
|
4,250
|
|
|
2021
|
|
4,250
|
|
|
2022
|
|
4,250
|
|
|
2023
|
|
4,250
|
|
|
2024 and thereafter
|
|
401,625
|
|
|
Total
|
|
$
|
419,688
|
|
|
|
Three Months Ended
October 31, |
|
Nine Months Ended
October 31, |
||||||||||||
(in thousands)
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
1.50% Convertible Senior Notes:
|
|
|
|
|
|
|
|
|
||||||||
Interest expense at 1.50% coupon rate
|
|
$
|
1,500
|
|
|
$
|
1,500
|
|
|
$
|
4,500
|
|
|
$
|
4,500
|
|
Amortization of debt discount
|
|
2,982
|
|
|
2,829
|
|
|
8,829
|
|
|
8,377
|
|
||||
Amortization of deferred debt issuance costs
|
|
281
|
|
|
267
|
|
|
833
|
|
|
790
|
|
||||
Total Interest Expense - 1.50% Convertible Senior Notes
|
|
$
|
4,763
|
|
|
$
|
4,596
|
|
|
$
|
14,162
|
|
|
$
|
13,667
|
|
|
|
|
|
|
|
|
|
|
||||||||
Borrowings under Credit Agreements:
|
|
|
|
|
|
|
|
|
||||||||
Interest expense at contractual rates
|
|
$
|
4,448
|
|
|
$
|
3,858
|
|
|
$
|
13,047
|
|
|
$
|
11,493
|
|
Impact of interest rate swap agreement
|
|
—
|
|
|
—
|
|
|
—
|
|
|
254
|
|
||||
Amortization of debt discounts
|
|
17
|
|
|
17
|
|
|
50
|
|
|
48
|
|
||||
Amortization of deferred debt issuance costs
|
|
392
|
|
|
396
|
|
|
1,162
|
|
|
1,451
|
|
||||
Total Interest Expense - Borrowings under Credit Agreements
|
|
$
|
4,857
|
|
|
$
|
4,271
|
|
|
$
|
14,259
|
|
|
$
|
13,246
|
|
8.
|
SUPPLEMENTAL CONDENSED CONSOLIDATED FINANCIAL STATEMENT INFORMATION
|
|
|
October 31,
|
|
January 31,
|
||||
(in thousands)
|
|
2018
|
|
2018
|
||||
Raw materials
|
|
$
|
9,517
|
|
|
$
|
9,870
|
|
Work-in-process
|
|
6,018
|
|
|
6,269
|
|
||
Finished goods
|
|
6,202
|
|
|
3,732
|
|
||
Total inventories
|
|
$
|
21,737
|
|
|
$
|
19,871
|
|
|
|
Three Months Ended
October 31, |
|
Nine Months Ended
October 31, |
||||||||||||
(in thousands)
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Foreign currency (losses) gains, net
|
|
$
|
(1,458
|
)
|
|
$
|
(1,474
|
)
|
|
$
|
(5,372
|
)
|
|
$
|
2,384
|
|
Gains on derivative financial instruments, net
|
|
1,051
|
|
|
834
|
|
|
3,760
|
|
|
292
|
|
||||
Other, net
|
|
(82
|
)
|
|
75
|
|
|
(582
|
)
|
|
(147
|
)
|
||||
Total other (expense) income, net
|
|
$
|
(489
|
)
|
|
$
|
(565
|
)
|
|
$
|
(2,194
|
)
|
|
$
|
2,529
|
|
|
|
Nine Months Ended
October 31, |
||||||
(in thousands)
|
|
2018
|
|
2017
|
||||
Cash paid for interest
|
|
$
|
14,736
|
|
|
$
|
13,618
|
|
Cash payments of income taxes, net
|
|
$
|
22,324
|
|
|
$
|
18,344
|
|
Non-cash investing and financing transactions:
|
|
|
|
|
|
|||
Accrued but unpaid purchases of property and equipment
|
|
$
|
4,443
|
|
|
$
|
3,487
|
|
Inventory transfers to property and equipment
|
|
$
|
1,334
|
|
|
$
|
1,265
|
|
Liabilities for contingent consideration in business combinations, including measurement period adjustments
|
|
$
|
8,969
|
|
|
$
|
9,100
|
|
Capital leases of property and equipment
|
|
$
|
473
|
|
|
$
|
1,929
|
|
9.
|
STOCKHOLDERS’ EQUITY
|
(in thousands)
|
|
Unrealized Gains (Losses) on Foreign Exchange Contracts Designated as Hedges
|
|
Unrealized Gain on Interest Rate Swap Designated as Hedge
|
|
Foreign Currency Translation Adjustments
|
|
Total
|
||||||||
Accumulated other comprehensive income (loss) at January 31, 2018
|
|
$
|
3,312
|
|
|
$
|
—
|
|
|
$
|
(106,772
|
)
|
|
$
|
(103,460
|
)
|
Other comprehensive (loss) income before reclassifications
|
|
(9,452
|
)
|
|
1,878
|
|
|
(45,190
|
)
|
|
(52,764
|
)
|
||||
Losses reclassified out of accumulated other comprehensive (loss) income
|
|
(2,076
|
)
|
|
—
|
|
|
—
|
|
|
(2,076
|
)
|
||||
Net other comprehensive (loss) income, current period
|
|
(7,376
|
)
|
|
1,878
|
|
|
(45,190
|
)
|
|
(50,688
|
)
|
||||
Accumulated other comprehensive (loss) income at October 31, 2018
|
|
$
|
(4,064
|
)
|
|
$
|
1,878
|
|
|
$
|
(151,962
|
)
|
|
$
|
(154,148
|
)
|
|
|
Three Months Ended
October 31, |
|
Nine Months Ended
October 31, |
|
|
||||||||||||
(in thousands)
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
|
Location
|
||||||||
Unrealized (losses) gains on derivative financial instruments:
|
|
|
|
|
|
|
|
|
|
|
||||||||
Foreign currency forward contracts
|
|
$
|
(108
|
)
|
|
$
|
141
|
|
|
$
|
(196
|
)
|
|
$
|
407
|
|
|
Cost of product revenue
|
|
|
(120
|
)
|
|
145
|
|
|
(214
|
)
|
|
378
|
|
|
Cost of service and support revenue
|
||||
|
|
(676
|
)
|
|
825
|
|
|
(1,168
|
)
|
|
2,339
|
|
|
Research and development, net
|
||||
|
|
(424
|
)
|
|
461
|
|
|
(730
|
)
|
|
1,322
|
|
|
Selling, general and administrative
|
||||
|
|
(1,328
|
)
|
|
1,572
|
|
|
(2,308
|
)
|
|
4,446
|
|
|
Total, before income taxes
|
||||
|
|
134
|
|
|
(252
|
)
|
|
232
|
|
|
(539
|
)
|
|
Benefit (provision) for income taxes
|
||||
|
|
$
|
(1,194
|
)
|
|
$
|
1,320
|
|
|
$
|
(2,076
|
)
|
|
$
|
3,907
|
|
|
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
|
11.
|
FAIR VALUE MEASUREMENTS
|
|
|
October 31, 2018
|
||||||||||
|
|
Fair Value Hierarchy Category
|
||||||||||
(in thousands)
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
||||||
Assets:
|
|
|
|
|
|
|
|
|
|
|||
Money market funds
|
|
$
|
52,640
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Commercial paper
|
|
3,242
|
|
|
—
|
|
|
—
|
|
|||
Foreign currency forward contracts
|
|
—
|
|
|
1,401
|
|
|
—
|
|
|||
Interest rate swap agreements
|
|
—
|
|
|
4,747
|
|
|
—
|
|
|||
Total assets
|
|
$
|
55,882
|
|
|
$
|
6,148
|
|
|
$
|
—
|
|
Liabilities:
|
|
|
|
|
|
|
|
|
|
|||
Foreign currency forward contracts
|
|
$
|
—
|
|
|
$
|
4,518
|
|
|
$
|
—
|
|
Contingent consideration - business combinations
|
|
—
|
|
|
—
|
|
|
53,674
|
|
|||
Option to acquire noncontrolling interests of consolidated subsidiaries
|
|
—
|
|
|
—
|
|
|
3,000
|
|
|||
Total liabilities
|
|
$
|
—
|
|
|
$
|
4,518
|
|
|
$
|
56,674
|
|
|
|
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
|
|
|
|
Nine Months Ended
October 31, |
||||||
(in thousands)
|
|
2018
|
|
2017
|
||||
Fair value measurement at beginning of period
|
|
$
|
62,829
|
|
|
$
|
52,733
|
|
Contingent consideration liabilities recorded for business combinations, including measurement period adjustments
|
|
8,969
|
|
|
9,100
|
|
||
Changes in fair values, recorded in operating expenses
|
|
(4,184
|
)
|
|
(3,769
|
)
|
||
Payments of contingent consideration
|
|
(13,600
|
)
|
|
(9,412
|
)
|
||
Foreign currency translation and other
|
|
(340
|
)
|
|
—
|
|
||
Fair value measurement at end of period
|
|
$
|
53,674
|
|
|
$
|
48,652
|
|
|
|
Nine Months Ended
October 31, |
||||||
(in thousands)
|
|
2018
|
|
2017
|
||||
Fair value measurement at beginning of period
|
|
$
|
2,950
|
|
|
$
|
3,550
|
|
Change in fair value, recorded in operating expenses
|
|
50
|
|
|
(450
|
)
|
||
Fair value measurement at end of period
|
|
$
|
3,000
|
|
|
$
|
3,100
|
|
12.
|
DERIVATIVE FINANCIAL INSTRUMENTS
|
|
|
|
Fair Value at
|
||||||
|
|
|
October 31,
|
|
January 31,
|
||||
(in thousands)
|
Balance Sheet Classification
|
|
2018
|
|
2018
|
||||
Derivative assets:
|
|
|
|
|
|
||||
Foreign currency forward contracts:
|
|
|
|
|
|
||||
Designated as cash flow hedges
|
Prepaid expenses and other current assets
|
|
$
|
—
|
|
|
$
|
3,682
|
|
Not designated as hedging instruments
|
Prepaid expenses and other current assets
|
|
1,401
|
|
|
—
|
|
||
Interest rate swap agreements:
|
|
|
|
|
|
||||
Designated as cash flow hedge
|
Other assets
|
|
1,878
|
|
|
—
|
|
||
Not designated as hedging instrument
|
Prepaid expenses and other current assets
|
|
2,869
|
|
|
1,330
|
|
||
|
Other assets
|
|
—
|
|
|
1,250
|
|
||
Total derivative assets
|
|
|
$
|
6,148
|
|
|
$
|
6,262
|
|
|
|
|
|
|
|
||||
Derivative liabilities:
|
|
|
|
|
|
||||
Foreign currency forward contracts:
|
|
|
|
|
|
||||
Designated as cash flow hedges
|
Accrued expenses and other current liabilities
|
|
$
|
4,518
|
|
|
$
|
—
|
|
Not designated as hedging instruments
|
Accrued expenses and other current liabilities
|
|
—
|
|
|
1,061
|
|
||
|
Other liabilities
|
|
—
|
|
|
247
|
|
||
Total derivative liabilities
|
|
|
$
|
4,518
|
|
|
$
|
1,308
|
|
|
|
Three Months Ended
October 31, |
|
Nine Months Ended
October 31, |
||||||||||||
(in thousands)
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Net (losses) gains recognized in AOCL:
|
|
|
|
|
|
|
|
|
||||||||
Foreign currency forward contracts
|
|
$
|
(1,591
|
)
|
|
$
|
743
|
|
|
$
|
(10,507
|
)
|
|
$
|
6,329
|
|
Interest rate swap agreement
|
|
1,266
|
|
|
—
|
|
|
1,878
|
|
|
(341
|
)
|
||||
|
|
$
|
(325
|
)
|
|
$
|
743
|
|
|
$
|
(8,629
|
)
|
|
$
|
5,988
|
|
|
|
|
|
|
|
|
|
|
||||||||
Net (losses) gains reclassified from AOCL to the condensed consolidated statements of operations:
|
|
|
|
|
|
|
|
|
||||||||
Foreign currency forward contracts
|
|
$
|
(1,328
|
)
|
|
$
|
1,572
|
|
|
$
|
(2,308
|
)
|
|
$
|
4,446
|
|
Interest rate swap agreement
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(254
|
)
|
||||
|
|
$
|
(1,328
|
)
|
|
$
|
1,572
|
|
|
$
|
(2,308
|
)
|
|
$
|
4,192
|
|
|
|
Classification in Condensed Consolidated Statements of Operations
|
|
Three Months Ended
October 31, |
|
Nine Months Ended
October 31, |
||||||||||||
(in thousands)
|
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
|||||||||
Foreign currency forward contracts
|
|
Other income (expense), net
|
|
$
|
930
|
|
|
$
|
257
|
|
|
$
|
2,828
|
|
|
$
|
(1,025
|
)
|
Interest rate swap agreements
|
|
Other income (expense), net
|
|
121
|
|
|
577
|
|
|
932
|
|
|
1,317
|
|
||||
|
|
|
|
$
|
1,051
|
|
|
$
|
834
|
|
|
$
|
3,760
|
|
|
$
|
292
|
|
13.
|
STOCK-BASED COMPENSATION
|
|
|
Three Months Ended
October 31, |
|
Nine Months Ended
October 31, |
||||||||||||
(in thousands)
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Cost of revenue - product
|
|
$
|
410
|
|
|
$
|
384
|
|
|
$
|
915
|
|
|
$
|
1,090
|
|
Cost of revenue - service and support
|
|
957
|
|
|
1,813
|
|
|
3,243
|
|
|
4,778
|
|
||||
Research and development, net
|
|
2,746
|
|
|
3,181
|
|
|
7,294
|
|
|
9,322
|
|
||||
Selling, general and administrative
|
|
12,482
|
|
|
10,588
|
|
|
39,057
|
|
|
35,263
|
|
||||
Total stock-based compensation expense
|
|
$
|
16,595
|
|
|
$
|
15,966
|
|
|
$
|
50,509
|
|
|
$
|
50,453
|
|
|
|
Three Months Ended
October 31, |
|
Nine Months Ended
October 31, |
||||||||||||
(in thousands)
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Restricted stock units and restricted stock awards
|
|
$
|
14,187
|
|
|
$
|
14,201
|
|
|
$
|
44,179
|
|
|
$
|
42,951
|
|
Stock bonus program and bonus share program
|
|
2,394
|
|
|
1,840
|
|
|
6,273
|
|
|
7,446
|
|
||||
Total equity-settled awards
|
|
16,581
|
|
|
16,041
|
|
|
50,452
|
|
|
50,397
|
|
||||
Phantom stock units (cash-settled awards)
|
|
14
|
|
|
(75
|
)
|
|
57
|
|
|
56
|
|
||||
Total stock-based compensation expense
|
|
$
|
16,595
|
|
|
$
|
15,966
|
|
|
$
|
50,509
|
|
|
$
|
50,453
|
|
(in thousands, except per share data)
|
|
Shares or Units
|
|
Weighted-Average Grant Date Fair Value
|
|||
Outstanding, January 31, 2018
|
|
2,808
|
|
|
$
|
41.18
|
|
Granted
|
|
1,710
|
|
|
$
|
43.11
|
|
Released
|
|
(1,440
|
)
|
|
$
|
43.88
|
|
Forfeited
|
|
(222
|
)
|
|
$
|
40.98
|
|
Outstanding, October 31, 2018
|
|
2,856
|
|
|
$
|
41.03
|
|
|
|
Nine Months Ended
October 31, |
||||
(in thousands)
|
|
2018
|
|
2017
|
||
Shares in lieu of cash bonus - granted and released
|
|
19
|
|
|
21
|
|
Shares in respect of discount:
|
|
|
|
|
||
Granted
|
|
—
|
|
|
—
|
|
Released
|
|
—
|
|
|
—
|
|
14.
|
COMMITMENTS AND CONTINGENCIES
|
|
|
Nine Months Ended
October 31, |
||||||
(in thousands)
|
|
2018
|
|
2017
|
||||
Warranty liability at beginning of period
|
|
$
|
551
|
|
|
$
|
962
|
|
Provision charged (credited) to expenses
|
|
103
|
|
|
(84
|
)
|
||
Warranty charges
|
|
(202
|
)
|
|
(219
|
)
|
||
Foreign currency translation and other
|
|
(11
|
)
|
|
—
|
|
||
Warranty liability at end of period
|
|
$
|
441
|
|
|
$
|
659
|
|
15.
|
SEGMENT INFORMATION
|
|
|
Three Months Ended
October 31, |
|
Nine Months Ended
October 31, |
||||||||||||
(in thousands)
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Revenue:
|
|
|
|
|
|
|
|
|
|
|
||||||
Customer Engagement
|
|
|
|
|
|
|
|
|
|
|
||||||
Segment revenue
|
|
$
|
201,448
|
|
|
$
|
184,506
|
|
|
$
|
593,556
|
|
|
$
|
542,708
|
|
Revenue adjustments
|
|
(3,981
|
)
|
|
(2,916
|
)
|
|
(8,826
|
)
|
|
(11,065
|
)
|
||||
|
|
197,467
|
|
|
181,590
|
|
|
584,730
|
|
|
531,643
|
|
||||
Cyber Intelligence
|
|
|
|
|
|
|
|
|
|
|
||||||
Segment revenue
|
|
106,540
|
|
|
99,254
|
|
|
314,880
|
|
|
285,024
|
|
||||
Revenue adjustments
|
|
(24
|
)
|
|
(118
|
)
|
|
(93
|
)
|
|
(169
|
)
|
||||
|
|
106,516
|
|
|
99,136
|
|
|
314,787
|
|
|
284,855
|
|
||||
Total revenue
|
|
$
|
303,983
|
|
|
$
|
280,726
|
|
|
$
|
899,517
|
|
|
$
|
816,498
|
|
|
|
|
|
|
|
|
|
|
||||||||
Segment contribution:
|
|
|
|
|
|
|
|
|
|
|
||||||
Customer Engagement
|
|
$
|
79,593
|
|
|
$
|
70,768
|
|
|
$
|
225,154
|
|
|
$
|
195,756
|
|
Cyber Intelligence
|
|
29,193
|
|
|
23,160
|
|
|
74,964
|
|
|
62,402
|
|
||||
Total segment contribution
|
|
108,786
|
|
|
93,928
|
|
|
300,118
|
|
|
258,158
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Reconciliation of segment contribution to operating income (loss):
|
|
|
|
|
|
|
|
|
|
|
||||||
Revenue adjustments
|
|
4,005
|
|
|
3,034
|
|
|
8,919
|
|
|
11,234
|
|
||||
Shared support expenses
|
|
39,585
|
|
|
38,150
|
|
|
121,390
|
|
|
114,022
|
|
||||
Amortization of acquired intangible assets
|
|
13,518
|
|
|
16,230
|
|
|
41,600
|
|
|
54,973
|
|
||||
Stock-based compensation
|
|
16,595
|
|
|
15,966
|
|
|
50,509
|
|
|
50,453
|
|
||||
Acquisition, integration, restructuring, and other unallocated expenses
|
|
1,413
|
|
|
2,736
|
|
|
7,017
|
|
|
15,103
|
|
||||
Total reconciling items, net
|
|
75,116
|
|
|
76,116
|
|
|
229,435
|
|
|
245,785
|
|
||||
Operating income (loss)
|
|
$
|
33,670
|
|
|
$
|
17,812
|
|
|
$
|
70,683
|
|
|
$
|
12,373
|
|
•
|
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 contact center communications products, which provides organizations flexibility to select the most suitable solutions for their contact centers, while leveraging Verint’s portfolio for 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 cloud and perpetual license models, or combinations
|
•
|
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.
|
•
|
Revenue recognition;
|
•
|
Allowance for doubtful accounts;
|
•
|
Accounting for business combinations;
|
•
|
Impairment of goodwill and other intangible assets;
|
•
|
Income taxes;
|
•
|
Contingencies;
|
•
|
Accounting for stock-based compensation; and
|
•
|
Cost of revenue.
|
|
|
Three Months Ended
October 31, |
|
Nine Months Ended
October 31, |
||||||||||||
(in thousands, except per share data)
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Revenue
|
|
$
|
303,983
|
|
|
$
|
280,726
|
|
|
$
|
899,517
|
|
|
$
|
816,498
|
|
Operating income
|
|
$
|
33,670
|
|
|
$
|
17,812
|
|
|
$
|
70,683
|
|
|
$
|
12,373
|
|
Net income (loss) attributable to Verint Systems Inc.
|
|
$
|
18,920
|
|
|
$
|
2,489
|
|
|
$
|
38,685
|
|
|
$
|
(23,724
|
)
|
Net income (loss) per common share attributable to Verint Systems Inc.:
|
|
|
|
|
|
|
|
|
|
|||||||
Basic
|
|
$
|
0.29
|
|
|
$
|
0.04
|
|
|
$
|
0.60
|
|
|
$
|
(0.38
|
)
|
Diluted
|
|
$
|
0.29
|
|
|
$
|
0.04
|
|
|
$
|
0.59
|
|
|
$
|
(0.38
|
)
|
|
|
Three Months Ended
October 31, |
|
% Change
|
|
Nine Months Ended
October 31, |
|
% Change
|
||||||||||||
(in thousands)
|
|
2018
|
|
2017
|
|
2018 - 2017
|
|
2018
|
|
2017
|
|
2018 - 2017
|
||||||||
Customer Engagement
|
|
$
|
197,467
|
|
|
$
|
181,590
|
|
|
9%
|
|
$
|
584,730
|
|
|
$
|
531,643
|
|
|
10%
|
Cyber Intelligence
|
|
106,516
|
|
|
99,136
|
|
|
7%
|
|
314,787
|
|
|
284,855
|
|
|
11%
|
||||
Total revenue
|
|
$
|
303,983
|
|
|
$
|
280,726
|
|
|
8%
|
|
$
|
899,517
|
|
|
$
|
816,498
|
|
|
10%
|
|
|
Three Months Ended
October 31, |
|
% Change
|
|
Nine Months Ended
October 31, |
|
% Change
|
||||||||||||
(in thousands)
|
|
2018
|
|
2017
|
|
2018 - 2017
|
|
2018
|
|
2017
|
|
2018 - 2017
|
||||||||
Product revenue
|
|
$
|
111,670
|
|
|
$
|
94,827
|
|
|
18%
|
|
$
|
327,576
|
|
|
$
|
279,056
|
|
|
17%
|
Service and support revenue
|
|
192,313
|
|
|
185,899
|
|
|
3%
|
|
571,941
|
|
|
537,442
|
|
|
6%
|
||||
Total revenue
|
|
$
|
303,983
|
|
|
$
|
280,726
|
|
|
8%
|
|
$
|
899,517
|
|
|
$
|
816,498
|
|
|
10%
|
|
|
Three Months Ended
October 31, |
|
% Change
|
|
Nine Months Ended
October 31, |
|
% Change
|
||||||||||||
(in thousands)
|
|
2018
|
|
2017
|
|
2018 - 2017
|
|
2018
|
|
2017
|
|
2018 - 2017
|
||||||||
Cost of product revenue
|
|
$
|
33,124
|
|
|
$
|
32,840
|
|
|
1%
|
|
$
|
100,917
|
|
|
$
|
98,708
|
|
|
2%
|
Cost of service and support revenue
|
|
72,182
|
|
|
69,383
|
|
|
4%
|
|
218,842
|
|
|
205,928
|
|
|
6%
|
||||
Amortization of acquired technology
|
|
5,933
|
|
|
9,182
|
|
|
(35)%
|
|
18,879
|
|
|
28,246
|
|
|
(33)%
|
||||
Total cost of revenue
|
|
$
|
111,239
|
|
|
$
|
111,405
|
|
|
—%
|
|
$
|
338,638
|
|
|
$
|
332,882
|
|
|
2%
|
|
|
Three Months Ended
October 31, |
|
% Change
|
|
Nine Months Ended
October 31, |
|
% Change
|
||||||||||||
(in thousands)
|
|
2018
|
|
2017
|
|
2018 - 2017
|
|
2018
|
|
2017
|
|
2018 - 2017
|
||||||||
Research and development, net
|
|
$
|
51,587
|
|
|
$
|
47,157
|
|
|
9%
|
|
$
|
155,993
|
|
|
$
|
141,911
|
|
|
10%
|
|
|
Three Months Ended
October 31, |
|
% Change
|
|
Nine Months Ended
October 31, |
|
% Change
|
||||||||||||
(in thousands)
|
|
2018
|
|
2017
|
|
2018 - 2017
|
|
2018
|
|
2017
|
|
2018 - 2017
|
||||||||
Selling, general and administrative
|
|
$
|
99,902
|
|
|
$
|
97,304
|
|
|
3%
|
|
$
|
311,482
|
|
|
$
|
302,605
|
|
|
3%
|
|
|
Three Months Ended
October 31, |
|
% Change
|
|
Nine Months Ended
October 31, |
|
% Change
|
||||||||||||
(in thousands)
|
|
2018
|
|
2017
|
|
2018 - 2017
|
|
2018
|
|
2017
|
|
2018 - 2017
|
||||||||
Amortization of other acquired intangible assets
|
|
$
|
7,585
|
|
|
$
|
7,048
|
|
|
8%
|
|
$
|
22,721
|
|
|
$
|
26,727
|
|
|
(15)%
|
|
|
Three Months Ended
October 31, |
|
% Change
|
|
Nine Months Ended
October 31, |
|
% Change
|
||||||||||||
(in thousands)
|
|
2018
|
|
2017
|
|
2018 - 2017
|
|
2018
|
|
2017
|
|
2018 - 2017
|
||||||||
Interest income
|
|
$
|
1,319
|
|
|
$
|
654
|
|
|
102%
|
|
$
|
3,246
|
|
|
$
|
1,793
|
|
|
81%
|
Interest expense
|
|
(8,686
|
)
|
|
(8,891
|
)
|
|
(2)%
|
|
(27,670
|
)
|
|
(26,997
|
)
|
|
2%
|
||||
Loss on early retirement of debt
|
|
—
|
|
|
—
|
|
|
*
|
|
—
|
|
|
(1,934
|
)
|
|
*
|
||||
Other income (expense):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Foreign currency (losses) gains, net
|
|
(1,458
|
)
|
|
(1,474
|
)
|
|
(1)%
|
|
(5,372
|
)
|
|
2,384
|
|
|
*
|
||||
Gains on derivatives
|
|
1,051
|
|
|
834
|
|
|
26%
|
|
3,760
|
|
|
292
|
|
|
*
|
||||
Other, net
|
|
(82
|
)
|
|
75
|
|
|
*
|
|
(582
|
)
|
|
(147
|
)
|
|
*
|
||||
Total other (expense) income, net
|
|
(489
|
)
|
|
(565
|
)
|
|
(13)%
|
|
(2,194
|
)
|
|
2,529
|
|
|
(187)%
|
||||
Total other expense, net
|
|
$
|
(7,856
|
)
|
|
$
|
(8,802
|
)
|
|
(11)%
|
|
$
|
(26,618
|
)
|
|
$
|
(24,609
|
)
|
|
8%
|
|
|
Three Months Ended
October 31, |
|
% Change
|
|
Nine Months Ended
October 31, |
|
% Change
|
||||||||||||
(in thousands)
|
|
2018
|
|
2017
|
|
2018 - 2017
|
|
2018
|
|
2017
|
|
2018 - 2017
|
||||||||
Provision for income taxes
|
|
$
|
5,601
|
|
|
$
|
5,944
|
|
|
(6)%
|
|
$
|
2,153
|
|
|
$
|
9,504
|
|
|
(77)%
|
|
|
October 31,
|
|
January 31,
|
||||
(in thousands)
|
|
2018
|
|
2018
|
||||
Cash and cash equivalents
|
|
$
|
353,422
|
|
|
$
|
337,942
|
|
Restricted cash and cash equivalents, and restricted bank time deposits (excluding long term portions)
|
|
32,457
|
|
|
33,303
|
|
||
Short-term investments
|
|
49,434
|
|
|
6,566
|
|
||
Total cash, cash equivalents, restricted cash and cash equivalents, restricted bank time deposits, and short-term investments
|
|
$
|
435,313
|
|
|
$
|
377,811
|
|
Total debt, including current portions
|
|
$
|
779,724
|
|
|
$
|
772,984
|
|
|
|
Nine Months Ended
October 31, |
||||||
(in thousands)
|
|
2018
|
|
2017
|
||||
Net cash provided by operating activities
|
|
$
|
131,650
|
|
|
$
|
96,174
|
|
Net cash used in investing activities
|
|
(119,446
|
)
|
|
(58,597
|
)
|
||
Net cash used in financing activities
|
|
(16,566
|
)
|
|
(1,420
|
)
|
||
Effect of foreign currency exchange rate changes on cash and cash equivalents
|
|
(3,864
|
)
|
|
447
|
|
||
Net (decrease) increase in cash, cash equivalents, restricted cash, and restricted cash equivalents
|
|
$
|
(8,226
|
)
|
|
$
|
36,604
|
|
•
|
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
|
•
|
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.
|
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.
|
|
|
|
|
December 6, 2018
|
/s/ Douglas E. Robinson
|
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Douglas E. Robinson
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Chief Financial Officer (Principal Financial Officer and Principal Accounting Officer)
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Dated:
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December 6, 2018
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By:
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/s/ Dan Bodner
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Dan Bodner
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President and Chief Executive Officer
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Principal Executive Officer
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Dated:
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December 6, 2018
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By:
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/s/ Douglas E. Robinson
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Douglas E. Robinson
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Chief Financial Officer
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Principal Financial Officer
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Dated:
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December 6, 2018
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/s/ Dan Bodner
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Dan Bodner
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President and Chief Executive Officer
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Principal Executive Officer
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Dated:
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December 6, 2018
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/s/ Douglas E. Robinson
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Douglas E. Robinson
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Chief Financial Officer
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Principal Financial Officer
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