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☑
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ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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☐
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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
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Melville,
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NY
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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)
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962-9600
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(Registrant’s Telephone Number, Including Area Code)
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Securities registered pursuant to Section 12(b) of the Act:
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Title of each class
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Trading Symbol(s)
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Name of each exchange on which registered
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The NASDAQ Stock Market, LLC
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Common Stock, $.001 par value per share
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VRNT
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(NASDAQ Global Select Market)
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Large accelerated filer
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☑
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Accelerated filer
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☐
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Non-accelerated filer
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☐
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Smaller reporting company
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☐
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Emerging growth company
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☐
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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, 2020
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uncertainties regarding the impact of changes in macroeconomic and/or global conditions, including as a result of slowdowns, recessions, economic instability, political unrest, armed conflicts, natural disasters, or outbreaks of disease, such as the novel coronavirus COVID-19 pandemic, as well as the resulting impact on information technology spending and government budgets, on our business;
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risks associated with our ability to keep pace with technological advances and challenges and evolving industry standards; 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 revenues, margins, and sufficient levels of investment in our business and operations;
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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, reputational considerations, 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 properly manage investments in our business and operations, execute on growth initiatives, and enhance our existing operations and infrastructure, including the proper prioritization and allocation of limited financial and other resources;
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risks associated with our ability to retain, recruit, and train qualified personnel in regions in which we operate, including in new markets and growth areas we may enter;
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risks that we may be unable to establish and maintain relationships with key resellers, partners, and systems integrators and 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, including information that may belong to our customers or other third parties, and with security vulnerabilities or lapses, including cyber-attacks, 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, including third-party hosting platforms, may contain defects, develop operational problems, or 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 political factors related to our business or operations, including reputational risks associated with our security solutions and our ability to maintain security clearances where required, as well as risks associated with a significant amount of our business coming from domestic and foreign government customers;
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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, relating to our own operations as well as to the use of our solutions by our customers;
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challenges associated with selling sophisticated solutions, including with respect to assisting customers in understanding and realizing the benefits of our solutions, and developing, offering, implementing, and maintaining a broad and sophisticated 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; challenges associated with our ability to accurately forecast when a sales opportunity will convert to an order, or to accurately forecast revenue and expenses;
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challenges associated with our Customer Engagement segment cloud transition and our Cyber Intelligence segment software model transition, and risk of 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, claim infringement on their intellectual property rights, or claim a violation of their license rights, including relative to free or open source components we may use;
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risks that our customers 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, internal controls, and personnel, and our ability to successfully implement and maintain enhancements to the foregoing, for our current and future operations and reporting needs, including related risks of financial statement omissions, misstatements, restatements, or filing delays;
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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;
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risks associated with market volatility in the prices of our common stock and convertible notes based on our performance, third-party publications or speculation, or other factors and risks associated with actions of activist stockholders;
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risks associated with the planned issuance of preferred stock to an affiliate of Apax Partners, including with respect to completion of the transaction and Apax’s resulting significant ownership position and potential that its interests will not be aligned with those of our common stockholders; and
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risks associated with the planned spin-off of our Cyber Intelligence Solutions business, including the possibility that the spin-off transaction may not be completed in the expected timeframe or at all, that it does not achieve the benefits anticipated, or that it negatively impacts our operations or stock price, including as a result of management distraction from our business.
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Data Capture and Fusion. Our platform enables the capture of a wide range of structured and unstructured data, such as operational, transactional, network, web, and social data. It also enables data fusion from multiple sources, different systems, and numerous environments.
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Data Analysis and Artificial Intelligence. Our platform facilitates a wide range of algorithms for data analytics and automation, including classification, correlation, anomaly detection, identity extraction, behavioral analysis, artificial intelligence, and predictive analytics. Artificial Intelligence is playing an increasingly important role in automating the data capture and analytics process to reveal actionable insights.
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Data Visualization and Actionable Insights. Our platform supports multiple use cases across Customer Engagement and Cyber Intelligence. Actionable insights are generated from massive amounts of data and are distributed to decision makers based on the specific use case and end-user operational scenarios.
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Digital Transformation. Many organizations are going through digital transformations by expanding their customer service interactions to include digital channels, such as chat, virtual assistants, mobile apps and social media. While these new channels make it easier for consumers to connect, they cause organizations increased system complexity and new challenges. In many cases these new customer touch points reside in different functional groups and are not connected, resulting in siloed information, a decentralized customer service workforce and difficulty gaining insight into customer experiences. To facilitate effective digital transformations, organizations are looking for vendors that help them to connect silos across the enterprise, take proactive action to improve customer experience and facilitate open and modular design to simplify integration across systems.
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Cloud Migration. 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 migrating to the cloud and other modernization initiatives are also looking for vendors that can help them evolve customer engagement at their own pace while protecting their legacy investments with minimal disruption to their operations.
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Automation Adoption. Many organizations are seeking solutions that incorporate artificial intelligence 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 Engagement. We help organizations reduce the complexity of digital transformations. Verint’s open and modular portfolio addresses customer engagement requirements across contact centers, back-office and branch operations, self-service, ecommerce, customer experience, marketing, IT, and compliance. Verint solutions help organizations collect customer insight from sources across the enterprise, including crucial unstructured customer interaction data, and combine it to gain insights and deliver a more consistent and improved customer experience.
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Modernizing Customer Engagement. We offer organizations flexible choices to modernize and transition to the cloud at their own pace. They can purchase our solutions in a perpetual model, the Verint Cloud model (bundled SaaS hosted by Verint) or Any Cloud model (software licenses that can be hosted in any cloud, including the Verint cloud, a third party cloud or the customer’s data center). We offer customers the flexibility of hybrid deployments, in which some solutions are deployed in the Verint Cloud and some on-premises, to preserve their legacy investment and facilitate the cloud transition. Our portfolio is open and is compatible with leading providers of cloud contact center communications solutions, providing organizations flexibility to select the most suitable communications
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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 costs. 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, help ensure adherence to compliance requirements, and enable customer experiences that are faster, personalized, and more enjoyable.
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Workforce Forecasting and Scheduling: Manages workforce scheduling in contact centers, back office operations, and branches providing increased employee flexibility and engagement and helping elevate the customer experience. Verint Workforce Management leverages automation to surface insights related to forecasting, scheduling and adherence, which reduces costs and improves employee engagement. Verint Mobile Apps deliver work-life balance ownership to employees and managers on-the-go.
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Knowledge and Employee Assistance: Provides the workforce with knowledge and in-the-moment assistance to speed up customer interactions and create a better experience for both the employee and the customer. Verint Knowledge Management helps to reduce training time, increase first call resolution and improve customer satisfaction (CSAT) scores. Verint Virtual Assistant provides the employee with automated, real-time support. Verint Real-Time Analytics surfaces contextual guidance to an employee as the customer interaction is taking place. Verint Robotic Process Automation uses bots to relieve agents of simple and mundane tasks. Verint Employee Desktop unifies disparate applications on an employee’s desktop and presents one view with contextual customer information, relevant knowledge, business process guidance and case management for interactions in voice and digital channels.
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Quality Assurance: Ensures quality and compliance while providing the workforce with appropriate feedback and coaching to delight customers. Verint Recording captures customer interactions across voice and digital channels. Verint Automated Quality Management automates the entire quality process from scoring evaluations to assigning coaching and provides the flexibility to build a quality management program that meets customers’ unique objectives. Verint Performance Management triggers automated workflows based on key performance indicators (KPIs) to meet cost and engagement goals.
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Operational Insights: Raises the visibility of customer interactions across the organization through omni-channel analytics. Verint Interaction Analytics helps reduce cost by identifying operational process challenges, uncovering self-service process issues that are increasing contact center volume, and identifying trends to reduce interaction handling time and better utilization of resources.
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Operational Excellence: Enables the back-office workforce to achieve greater efficiency and effectiveness. Verint Desktop and Process Analytics brings immediate visibility to back office processes. Verint Work Manager automates capturing and assigning work to the right employee or bot and allows organizations to forecast and align resources to service goals and drive cost savings. Verint Performance Management increases productivity with KPIs unique to back office operations.
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Intelligent Virtual Assistant: Delivers personalized experiences through self-service, improving customer satisfaction and driving operational efficiency through voice and digital channels.
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Web Self-Service: Enables customers to self-serve on the web or via their mobile devices and unifies knowledge management, case management, and process management to encourage customers to resolve their issues online.
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Communities: Enables organizations to manage online communities for their employees, customers and partners to deliver better social customer service, digital marketing, as well as employee and customer engagement.
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Verint Experience Cloud: Connects siloes of customer experience data (calls, emails, texts, chats, social digital sites, surveys and other sources) from across the organization to identify problems, predict outcomes and drive action to deliver great experiences everywhere, every time.
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Omni-Channel Recording: Captures customer interaction data across the enterprise. Verint Enterprise Recording encompasses voice recording, text recording, screen recording and video recording. It manages all aspects of captured data including archive management, security, access rights, automated verification and governance.
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Compliance Recording: Supports compliance audits and the avoidance of fines. Verint Enterprise Recording supports regulatory compliance requirements, such as the General Data Protection Regulation (GDPR), PCI, and data retention in contact centers, financial trading compliance, emergency response operations, and other environments.
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Fraud Prevention: Mitigates the risk of fraud in contact centers, self-service channels and trading floors. Verint Identity Analytics uses voice biometrics to authenticate callers and prevent fraud. For bank branches, Verint solutions capture video and other related data in the branch to support fraud investigations. Verint Voice Self-Service Fraud Detection provides upstream fraud detection based on real-time analysis of numerous parameters of caller behavior across multiple calls and programs.
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Security Threats Becoming Increasingly Pervasive and 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 difficult and complicated to detect, investigate and neutralize threats. Many of these organizations are seeking to deploy more advanced data mining solutions that generate predictive intelligence and accelerate investigations by correlating massive amounts of data from a wide range of disparate sources to uncover previously unknown connections to identify suspicious behaviors and current and future threats.
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Shortage of Security Analysts Increasing the Need for Automation. Security organizations are using data mining solutions to help conduct investigations and generate actionable insights. Typically, data mining solutions require security organizations to employ 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. These organizations are also increasingly seeking artificial intelligence and other advanced data analysis tools to gain actionable intelligence faster with fewer analysts and data scientists.
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Security Organizations Seeking Faster Innovation Through Open Software Solutions. As security threats have become more pervasive and complex, security organizations have been seeking faster innovation from security vendors. Historically, security organizations purchased customized solutions incorporating software, hardware and integration services. This project-based approach resulted in closed systems, limiting the pace of innovation as upgrades were complex, costly, and time consuming. Today, we see a growing preference to purchase software solutions that are open and can run on standard hardware, that are faster and easier to deploy, and that can be refreshed more quickly to keep up with the accelerating pace of evolving threats.
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Addressing the Increased Complexity of Security Threats with Advanced Data Mining Software. 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, and deep domain expertise. Our data mining software provides our customers the capability to capture and analyze data, generate predictive intelligence and help accelerate investigations. Our strategy is to further enhance our software with advanced analytics and artificial intelligence technologies that can correlate massive amounts of data from a wide range of disparate sources.
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Leveraging 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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Driving Faster Innovation and Faster Software Refresh Cycles. Historically, in response to customer purchasing preferences, Verint delivered bundled solutions incorporating software, third-party hardware, integration services and customizations. This model enabled us to successfully deliver solutions that met the requirements of our customers,
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Product Name
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Description
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Network Intelligence
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Our Network Intelligence software helps security organizations generate critical predictive intelligence from large amounts of unstructured data captured from a wide range of communication networks using advanced analytics, artificial intelligence and automation technologies.
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Fusion Intelligence
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Our Fusion Intelligence software enables security analysts to work more efficiently by collecting, fusing, normalizing, analyzing, and visualizing data from a wide range of sources, such as private databases, public databases and the web, including the dark web, to surface valuable insights and generate predictive intelligence.
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Cyber Security
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Our Cyber Security software enables security operations to capture cyber security data and applies machine learning and behavioral analytics to automate the process of detecting, investigating and responding to advanced cyber-attacks.
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Situational Intelligence
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Our Situational Intelligence software helps security organizations increase situational awareness, improve security responsiveness and realize greater operational efficiency by fusing data from multiple systems and sensors, such as access control, video, intrusion, fire, weather, traffic, first responder, and other mobile device systems.
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Government. National security and law enforcement agencies are using Verint solutions to prevent terrorism, collect intelligence and investigate security threats, and to fight a wide range of criminal activity, such as arson, drug trafficking, homicides, human trafficking, identity theft, kidnapping, poaching, illegal immigration, financial crimes, and other organized crimes.
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Enterprise. Commercial organizations and 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. In addition, 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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Counter terrorism - Tracking terrorist organizations and generating actionable intelligence for detecting and preventing terror attacks.
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Fighting Transnational Drug Trafficking - Identifying local and international drug networks, running complex investigations, generating legal evidence, and taking action against traffickers.
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Crime Syndicate Investigations - Accelerating investigations through behavioral profiles and visual link analysis.
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Cyber Security for Advanced Threats - Detecting breaches across attack chains, automating cyber investigations, and threat hunting.
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Physical Security, Emergency Management & Response - Evaluating and responding more efficiently to incidents to ensure facility and asset protection, as well as employee safety.
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Financial Crime Investigations - Fusing data from financial databases, the web and other sources to identify and investigate suspicious financial transactions.
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Our direct sales teams are focused on large and mid-sized customers, who in some cases are partners or integrators, 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, reputation, 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 strategic position and our reputation, including the impact of the market’s reception of the transaction;
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the impact of the acquisition on our financial position and results, including our ability to maintain and/or grow our revenue and profitability;
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risk that we fail to successfully implement our business plan for the combined business, including plans to accelerate growth or achieve the anticipated benefits of the acquisition, such as synergies or economies of scale;
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risk of unforeseen or underestimated challenges or liabilities associated with an acquired company’s business or operations;
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management distraction from our existing operations and priorities;
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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 and processes;
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retention risk with respect to key customers, suppliers, and employees and challenges in integrating 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 systems, processes, and internal controls over financial reporting.
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There is greater risk of customers deferring, scaling back, or canceling sales as a result of, among other things, their receipt of a competitive proposal, changes in budgets and purchasing priorities, extensive internal approval processes, or the introduction or anticipated introduction of new or enhanced products by us or our competitors
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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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geopolitical risks from war, natural disasters, pandemics or other events;
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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;
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change our lines of business;
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make investments, loans, or advances; and
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engage in consolidations, mergers, liquidations, or dissolutions.
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announcements by us or our competitors regarding, among other things, strategic changes, new products, product enhancements or technological advances, acquisitions, major transactions (including our planned separation into two publicly traded companies), significant litigation or regulatory matters, stock repurchases, or management changes;
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press or analyst publications, 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, our security solutions and customers, speculation regarding strategy or M&A (including our planned separation into two publicly traded companies), or market trends unrelated to our performance;
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stock sales by our directors, officers, or other significant holders, or stock repurchases by us;
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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
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dilution that may occur upon any conversion of the Notes.
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January 31,
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2015
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2016
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2017
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2018
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2019
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2020
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||||||||||||
Verint Systems Inc.
|
|
$
|
100.00
|
|
|
$
|
68.58
|
|
|
$
|
69.97
|
|
|
$
|
78.21
|
|
|
$
|
90.61
|
|
|
$
|
108.65
|
|
NASDAQ Composite Index
|
|
$
|
100.00
|
|
|
$
|
100.70
|
|
|
$
|
124.09
|
|
|
$
|
165.58
|
|
|
$
|
164.45
|
|
|
$
|
208.91
|
|
NASDAQ Computer & Data Processing Index
|
|
$
|
100.00
|
|
|
$
|
125.86
|
|
|
$
|
146.18
|
|
|
$
|
212.25
|
|
|
$
|
215.53
|
|
|
$
|
289.19
|
|
Period
|
|
Total Number of Shares Purchased
|
|
Average Price Paid per Share (1)
|
|
Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs
|
|
Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs
(in thousands)
|
||||||
November 1, 2019 - November 30, 2019
|
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
$
|
—
|
|
December 1, 2019 - December 31, 2019
|
|
1,406,644
|
|
|
$
|
53.17
|
|
|
1,406,644
|
|
|
$
|
225,100
|
|
January 1, 2020 - January 31, 2020
|
|
712,075
|
|
|
$
|
57.90
|
|
|
712,075
|
|
|
$
|
183,980
|
|
Total
|
|
2,118,719
|
|
|
$
|
54.76
|
|
|
2,118,719
|
|
|
$
|
183,980
|
|
Consolidated Statements of Operations Data
|
||||||||||||||||||||
|
|
Year Ended January 31,
|
||||||||||||||||||
(in thousands, except per share data)
|
|
2020
|
|
2019
|
|
2018
|
|
2017
|
|
2016
|
||||||||||
Revenue
|
|
$
|
1,303,634
|
|
|
$
|
1,229,747
|
|
|
$
|
1,135,229
|
|
|
$
|
1,062,106
|
|
|
$
|
1,130,266
|
|
Operating income
|
|
$
|
87,856
|
|
|
$
|
114,235
|
|
|
$
|
48,630
|
|
|
$
|
17,366
|
|
|
$
|
67,852
|
|
Net income (loss)
|
|
$
|
35,683
|
|
|
$
|
70,220
|
|
|
$
|
(3,454
|
)
|
|
$
|
(26,246
|
)
|
|
$
|
22,228
|
|
Net income (loss) attributable to Verint Systems Inc.
|
|
$
|
28,684
|
|
|
$
|
65,991
|
|
|
$
|
(6,627
|
)
|
|
$
|
(29,380
|
)
|
|
$
|
17,638
|
|
Net income (loss) per share attributable to Verint Systems Inc.:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Basic
|
|
$
|
0.43
|
|
|
$
|
1.02
|
|
|
$
|
(0.10
|
)
|
|
$
|
(0.47
|
)
|
|
$
|
0.29
|
|
Diluted
|
|
$
|
0.43
|
|
|
$
|
1.00
|
|
|
$
|
(0.10
|
)
|
|
$
|
(0.47
|
)
|
|
$
|
0.28
|
|
Weighted-average shares:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Basic
|
|
66,129
|
|
|
64,913
|
|
|
63,312
|
|
|
62,593
|
|
|
61,813
|
|
|||||
Diluted
|
|
67,355
|
|
|
66,245
|
|
|
63,312
|
|
|
62,593
|
|
|
62,921
|
|
Consolidated Balance Sheet Data
|
||||||||||||||||||||
|
|
January 31,
|
||||||||||||||||||
(in thousands)
|
|
2020
|
|
2019
|
|
2018
|
|
2017
|
|
2016
|
||||||||||
Total assets
|
|
$
|
3,016,058
|
|
|
$
|
2,867,027
|
|
|
$
|
2,580,620
|
|
|
$
|
2,362,784
|
|
|
$
|
2,355,735
|
|
Long-term debt, including current maturities
|
|
$
|
837,048
|
|
|
$
|
782,128
|
|
|
$
|
772,984
|
|
|
$
|
748,871
|
|
|
$
|
738,087
|
|
Finance lease obligations, including current portions
|
|
$
|
9,917
|
|
|
$
|
4,282
|
|
|
$
|
4,350
|
|
|
$
|
68
|
|
|
$
|
—
|
|
Total stockholders’ equity
|
|
$
|
1,242,437
|
|
|
$
|
1,260,804
|
|
|
$
|
1,132,336
|
|
|
$
|
1,015,040
|
|
|
$
|
1,068,164
|
|
As of and for the year ended January 31,
|
|
|
Description
|
2020
|
|
•
|
Reflects our February 1, 2019 adoption of ASU No. 2016-02, Leases (Topic 842), which resulted in the recognition of operating lease right-of-use assets of approximately $100.4 million and lease liabilities for operating leases of approximately $110.4 million on our consolidated balance sheet as of February 1, 2019.
|
2019
|
|
•
|
Reflects our February 1, 2018 adoption of ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606) using the modified retrospective approach. The comparative information has not been restated and continues to be reported under the accounting standards in effect for the periods presented.
|
2018
|
|
•
|
Provisional deferred income tax expense of $15.0 million related to withholding on foreign earnings which may be repatriated.
|
•
|
Digital Transformation. Many organizations are going through digital transformations by expanding their customer service interactions to include digital channels, such as chat, virtual assistants, mobile apps and social media. While these new channels make it easier for consumers to connect, they caused organizations increased system complexity and new challenges. In many cases these new customer touch points reside in different functional groups and are not connected, resulting in siloed information, a decentralized customer service workforce and difficulty gaining insight into customer experiences. To facilitate effective digital transformations, organizations are looking for vendors that help them to connect silos across the enterprise, take proactive action to improve customer experience and facilitate open and modular design to simplify integration across systems.
|
•
|
Cloud Migration. 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 migrating to the cloud and other modernization initiatives are also looking for vendors that can help them evolve customer engagement at their own pace while protecting their legacy investments with minimal disruption to their operations.
|
•
|
Automation Adoption. Many organizations are seeking solutions that incorporate artificial intelligence 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.
|
•
|
Security Threats Becoming Increasingly Pervasive and 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 difficult and complicated to detect, investigate and neutralize threats. Many of these organizations are seeking to deploy more advanced data mining solutions that generate predictive intelligence and accelerate investigations by correlating massive amounts of data from a wide range of disparate sources to uncover previously unknown connections to identify suspicious behaviors and current and future threats.
|
•
|
Shortage of Security Analysts Increasing the Need for Automation. Security organizations are using data mining solutions to help conduct investigations and generate actionable insights. Typically, data mining solutions require security organizations to employ 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. These organizations are also increasingly seeking artificial intelligence and other advanced data analysis tools to gain actionable intelligence faster with fewer analysts and data scientists.
|
•
|
Security Organizations Seeking Faster Innovation Through Open Software Solutions. As security threats have become more pervasive and complex, security organizations have been seeking faster innovation from security vendors. Historically, security organizations purchased customized solutions incorporating software, hardware and integration services. This project-based approach resulted in closed systems, limiting the pace of innovation as upgrades were complex, costly and time consuming. Today, we see a growing preference to purchase software solutions that are open and can run on standard hardware, that are faster and easier to deploy, and that can be refreshed more quickly to keep up with the accelerating pace of evolving threats.
|
•
|
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)
|
|
2020
|
|
2019
|
|
2018
|
||||||
Revenue
|
|
$
|
1,303,634
|
|
|
$
|
1,229,747
|
|
|
$
|
1,135,229
|
|
Operating income
|
|
$
|
87,856
|
|
|
$
|
114,235
|
|
|
$
|
48,630
|
|
Net income (loss) attributable to Verint Systems Inc.
|
|
$
|
28,684
|
|
|
$
|
65,991
|
|
|
$
|
(6,627
|
)
|
Net income (loss) per common share attributable to Verint Systems Inc.:
|
|
|
|
|
|
|
|
|
||||
Basic
|
|
$
|
0.43
|
|
|
$
|
1.02
|
|
|
$
|
(0.10
|
)
|
Diluted
|
|
$
|
0.43
|
|
|
$
|
1.00
|
|
|
$
|
(0.10
|
)
|
|
|
Year Ended January 31,
|
|
% Change
|
||||||||||||
(in thousands)
|
|
2020
|
|
2019
|
|
2018
|
|
2020 - 2019
|
|
2019 - 2018
|
||||||
Customer Engagement
|
|
$
|
846,525
|
|
|
$
|
796,287
|
|
|
$
|
740,067
|
|
|
6%
|
|
8%
|
Cyber Intelligence
|
|
457,109
|
|
|
433,460
|
|
|
395,162
|
|
|
5%
|
|
10%
|
|||
Total revenue
|
|
$
|
1,303,634
|
|
|
$
|
1,229,747
|
|
|
$
|
1,135,229
|
|
|
6%
|
|
8%
|
|
|
Year Ended January 31,
|
|
% Change
|
||||||||||||
(in thousands)
|
|
2020
|
|
2019
|
|
2018
|
|
2020 - 2019
|
|
2019 - 2018
|
||||||
Product revenue
|
|
$
|
454,875
|
|
|
$
|
454,650
|
|
|
$
|
399,662
|
|
|
—%
|
|
14%
|
Service and support revenue
|
|
848,759
|
|
|
775,097
|
|
|
735,567
|
|
|
10%
|
|
5%
|
|||
Total revenue
|
|
$
|
1,303,634
|
|
|
$
|
1,229,747
|
|
|
$
|
1,135,229
|
|
|
6%
|
|
8%
|
|
|
Year Ended January 31,
|
|
% Change
|
||||||||||||
(in thousands)
|
|
2020
|
|
2019
|
|
2018
|
|
2020 - 2019
|
|
2019 - 2018
|
||||||
Cost of product revenue
|
|
$
|
127,183
|
|
|
$
|
129,922
|
|
|
$
|
131,989
|
|
|
(2)%
|
|
(2)%
|
Cost of service and support revenue
|
|
312,599
|
|
|
293,888
|
|
|
276,582
|
|
|
6%
|
|
6%
|
|||
Amortization of acquired technology
|
|
23,984
|
|
|
25,403
|
|
|
38,216
|
|
|
(6)%
|
|
(34)%
|
|||
Total cost of revenue
|
|
$
|
463,766
|
|
|
$
|
449,213
|
|
|
$
|
446,787
|
|
|
3%
|
|
1%
|
|
|
Year Ended January 31,
|
|
% Change
|
||||||||||||
(in thousands)
|
|
2020
|
|
2019
|
|
2018
|
|
2020 - 2019
|
|
2019 - 2018
|
||||||
Research and development, net
|
|
$
|
231,683
|
|
|
$
|
209,106
|
|
|
$
|
190,643
|
|
|
11%
|
|
10%
|
|
|
Year Ended January 31,
|
|
% Change
|
||||||||||||
(in thousands)
|
|
2020
|
|
2019
|
|
2018
|
|
2020 - 2019
|
|
2019 - 2018
|
||||||
Selling, general and administrative
|
|
$
|
488,871
|
|
|
$
|
426,183
|
|
|
$
|
414,960
|
|
|
15%
|
|
3%
|
|
|
Year Ended January 31,
|
|
% Change
|
||||||||||||
(in thousands)
|
|
2020
|
|
2019
|
|
2018
|
|
2020 - 2019
|
|
2019 - 2018
|
||||||
Amortization of other acquired intangible assets
|
|
$
|
31,458
|
|
|
$
|
31,010
|
|
|
$
|
34,209
|
|
|
1%
|
|
(9)%
|
|
|
Year Ended January 31,
|
|
% Change
|
||||||||||||
(in thousands)
|
|
2020
|
|
2019
|
|
2018
|
|
2020 - 2019
|
|
2019 - 2018
|
||||||
Interest income
|
|
$
|
5,620
|
|
|
$
|
4,777
|
|
|
$
|
2,477
|
|
|
18%
|
|
93%
|
Interest expense
|
|
(40,378
|
)
|
|
(37,344
|
)
|
|
(35,959
|
)
|
|
8%
|
|
4%
|
|||
Losses on early retirements of debt
|
|
—
|
|
|
—
|
|
|
(2,150
|
)
|
|
—%
|
|
*
|
|||
Other income (expense):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
Foreign currency (losses) gains
|
|
(56
|
)
|
|
(5,519
|
)
|
|
6,760
|
|
|
(99)%
|
|
(182)%
|
|||
Gains (losses) on derivatives
|
|
599
|
|
|
2,511
|
|
|
(17
|
)
|
|
(76)%
|
|
*
|
|||
Other, net
|
|
(338
|
)
|
|
(898
|
)
|
|
(841
|
)
|
|
(62)%
|
|
7%
|
|||
Total other income (expense), net
|
|
205
|
|
|
(3,906
|
)
|
|
5,902
|
|
|
(105)%
|
|
(166)%
|
|||
Total other expense, net
|
|
$
|
(34,553
|
)
|
|
$
|
(36,473
|
)
|
|
$
|
(29,730
|
)
|
|
(5)%
|
|
23%
|
|
|
Year Ended January 31,
|
||||||||||
(in thousands)
|
|
2020
|
|
2019
|
|
2018
|
||||||
Provision for income taxes
|
|
$
|
17,620
|
|
|
$
|
7,542
|
|
|
$
|
22,354
|
|
|
|
January 31,
|
||||||
(in thousands)
|
|
2020
|
|
2019
|
||||
Cash and cash equivalents
|
|
$
|
379,146
|
|
|
$
|
369,975
|
|
Restricted cash and cash equivalents, and restricted bank time deposits (excluding long term portions)
|
|
43,860
|
|
|
42,262
|
|
||
Short-term investments
|
|
20,215
|
|
|
32,329
|
|
||
Total cash, cash equivalents, restricted cash and cash equivalents, restricted bank time deposits, and short-term investments
|
|
$
|
443,221
|
|
|
$
|
444,566
|
|
Total debt, including current portions
|
|
$
|
837,048
|
|
|
$
|
782,128
|
|
|
|
Year Ended January 31,
|
||||||||||
(in thousands)
|
|
2020
|
|
2019
|
|
2018
|
||||||
Net cash provided by operating activities
|
|
$
|
237,904
|
|
|
$
|
215,251
|
|
|
$
|
176,327
|
|
Net cash used in investing activities
|
|
(125,801
|
)
|
|
(175,723
|
)
|
|
(146,194
|
)
|
|||
Net cash used in financing activities
|
|
(111,322
|
)
|
|
(21,881
|
)
|
|
(5,503
|
)
|
|||
Effect of foreign currency exchange rate changes on cash, cash equivalents, restricted cash, and restricted cash equivalents
|
|
(1,823
|
)
|
|
(3,158
|
)
|
|
4,251
|
|
|||
Net (decrease) increase in cash, cash equivalents, restricted cash, and restricted cash equivalents
|
|
$
|
(1,042
|
)
|
|
$
|
14,489
|
|
|
$
|
28,881
|
|
•
|
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.
|
|
|
Payments Due by Period
|
||||||||||||||||||
(in thousands)
|
|
Total
|
|
< 1 year
|
|
1-3 years
|
|
3-5 years
|
|
> 5 years
|
||||||||||
Long-term debt obligations, including interest
|
|
$
|
946,044
|
|
|
$
|
27,896
|
|
|
$
|
490,723
|
|
|
$
|
427,425
|
|
|
$
|
—
|
|
Operating lease obligations
|
|
134,206
|
|
|
28,675
|
|
|
43,289
|
|
|
34,718
|
|
|
27,524
|
|
|||||
Finance lease obligations
|
|
10,805
|
|
|
3,195
|
|
|
5,584
|
|
|
2,026
|
|
|
—
|
|
|||||
Purchase obligations
|
|
228,010
|
|
|
139,572
|
|
|
53,256
|
|
|
35,182
|
|
|
—
|
|
|||||
Other long-term obligations
|
|
240
|
|
|
47
|
|
|
94
|
|
|
95
|
|
|
4
|
|
|||||
Total contractual obligations
|
|
$
|
1,319,305
|
|
|
$
|
199,385
|
|
|
$
|
592,946
|
|
|
$
|
499,446
|
|
|
$
|
27,528
|
|
VERINT SYSTEMS INC. AND SUBSIDIARIES
|
|
Index to Consolidated Financial Statements
|
|
|
|
|
Page
|
|
|
•
|
We tested the effectiveness of controls over revenue recognized over time, including those over labor hours incurred to date and estimates of future labor hours at completion.
|
•
|
We selected a sample of contracts accounted for over time that required significant customization of the software and performed the following;
|
–
|
Evaluated whether the contracts were properly included in management’s calculation of revenue recognized over time based on the terms and conditions of each contract.
|
–
|
Tested the completeness and accuracy of labor hours incurred by agreeing to supporting documentation and time-charged records and corroborating the labor hours incurred with project managers.
|
–
|
Evaluated the reasonableness and consistency of the methods and assumptions used by management to develop the estimates of future labor hours and labor hours at completion.
|
–
|
Evaluated management’s ability to achieve the estimates of future labor hours and labor hours at completion by comparing the estimates to management’s work plans and performing corroborating inquiries with the Company’s project managers related to their expectation of labor hours at completion.
|
•
|
Evaluated management’s ability to estimate total labor hours by comparing the estimated labor hours at contract inception to actual labor hours incurred at project completion or as of year-end.
|
|
|
January 31,
|
||||||
(in thousands, except share and per share data)
|
|
2020
|
|
2019
|
||||
Assets
|
|
|
|
|
|
|
||
Current Assets:
|
|
|
|
|
|
|
||
Cash and cash equivalents
|
|
$
|
379,146
|
|
|
$
|
369,975
|
|
Restricted cash and cash equivalents, and restricted bank time deposits
|
|
43,860
|
|
|
42,262
|
|
||
Short-term investments
|
|
20,215
|
|
|
32,329
|
|
||
Accounts receivable, net of allowance for doubtful accounts of $5.3 million and $3.8 million, respectively
|
|
382,435
|
|
|
375,663
|
|
||
Contract assets
|
|
64,961
|
|
|
63,389
|
|
||
Inventories
|
|
20,495
|
|
|
24,952
|
|
||
Prepaid expenses and other current assets
|
|
87,946
|
|
|
97,776
|
|
||
Total current assets
|
|
999,058
|
|
|
1,006,346
|
|
||
Property and equipment, net
|
|
116,111
|
|
|
100,134
|
|
||
Operating lease right-of-use assets
|
|
102,149
|
|
|
—
|
|
||
Goodwill
|
|
1,469,211
|
|
|
1,417,481
|
|
||
Intangible assets, net
|
|
197,764
|
|
|
225,183
|
|
||
Deferred income taxes
|
|
13,802
|
|
|
21,040
|
|
||
Other assets
|
|
117,963
|
|
|
96,843
|
|
||
Total assets
|
|
$
|
3,016,058
|
|
|
$
|
2,867,027
|
|
|
|
|
|
|
|
|
||
Liabilities and Stockholders' Equity
|
|
|
|
|
|
|
||
Current Liabilities:
|
|
|
|
|
|
|
||
Accounts payable
|
|
$
|
71,604
|
|
|
$
|
71,621
|
|
Accrued expenses and other current liabilities
|
|
229,698
|
|
|
208,481
|
|
||
Current maturities of long-term debt
|
|
4,250
|
|
|
4,343
|
|
||
Contract liabilities
|
|
397,350
|
|
|
377,376
|
|
||
Total current liabilities
|
|
702,902
|
|
|
661,821
|
|
||
Long-term debt
|
|
832,798
|
|
|
777,785
|
|
||
Long-term contract liabilities
|
|
40,565
|
|
|
30,094
|
|
||
Operating lease liabilities
|
|
90,372
|
|
|
—
|
|
||
Deferred income taxes
|
|
39,829
|
|
|
43,171
|
|
||
Other liabilities
|
|
67,155
|
|
|
93,352
|
|
||
Total liabilities
|
|
1,773,621
|
|
|
1,606,223
|
|
||
Commitments and Contingencies
|
|
|
|
|
|
|
||
Stockholders' Equity:
|
|
|
|
|
|
|
||
Preferred stock - $0.001 par value; authorized 2,207,000 shares at January 31, 2020 and 2019, respectively; none issued.
|
|
—
|
|
|
—
|
|
||
Common stock - $0.001 par value; authorized 120,000,000 shares. Issued 68,529,000 and 66,998,000 shares; outstanding 64,738,000 and 65,333,000 shares at January 31, 2020 and 2019, respectively
|
|
68
|
|
|
67
|
|
||
Additional paid-in capital
|
|
1,660,889
|
|
|
1,586,266
|
|
||
Treasury stock, at cost 3,791,000 and 1,665,000 shares at January 31, 2020 and 2019, respectively
|
|
(174,134
|
)
|
|
(57,598
|
)
|
||
Accumulated deficit
|
|
(105,590
|
)
|
|
(134,274
|
)
|
||
Accumulated other comprehensive loss
|
|
(151,865
|
)
|
|
(145,225
|
)
|
||
Total Verint Systems Inc. stockholders' equity
|
|
1,229,368
|
|
|
1,249,236
|
|
||
Noncontrolling interests
|
|
13,069
|
|
|
11,568
|
|
||
Total stockholders' equity
|
|
1,242,437
|
|
|
1,260,804
|
|
||
Total liabilities and stockholders' equity
|
|
$
|
3,016,058
|
|
|
$
|
2,867,027
|
|
|
|
Year Ended January 31,
|
||||||||||
(in thousands, except per share data)
|
|
2020
|
|
2019
|
|
2018
|
||||||
Revenue:
|
|
|
|
|
|
|
|
|
||||
Product
|
|
$
|
454,875
|
|
|
$
|
454,650
|
|
|
$
|
399,662
|
|
Service and support
|
|
848,759
|
|
|
775,097
|
|
|
735,567
|
|
|||
Total revenue
|
|
1,303,634
|
|
|
1,229,747
|
|
|
1,135,229
|
|
|||
Cost of revenue:
|
|
|
|
|
|
|
|
|
|
|||
Product
|
|
127,183
|
|
|
129,922
|
|
|
131,989
|
|
|||
Service and support
|
|
312,599
|
|
|
293,888
|
|
|
276,582
|
|
|||
Amortization of acquired technology
|
|
23,984
|
|
|
25,403
|
|
|
38,216
|
|
|||
Total cost of revenue
|
|
463,766
|
|
|
449,213
|
|
|
446,787
|
|
|||
Gross profit
|
|
839,868
|
|
|
780,534
|
|
|
688,442
|
|
|||
Operating expenses:
|
|
|
|
|
|
|
|
|
|
|||
Research and development, net
|
|
231,683
|
|
|
209,106
|
|
|
190,643
|
|
|||
Selling, general and administrative
|
|
488,871
|
|
|
426,183
|
|
|
414,960
|
|
|||
Amortization of other acquired intangible assets
|
|
31,458
|
|
|
31,010
|
|
|
34,209
|
|
|||
Total operating expenses
|
|
752,012
|
|
|
666,299
|
|
|
639,812
|
|
|||
Operating income
|
|
87,856
|
|
|
114,235
|
|
|
48,630
|
|
|||
Other income (expense), net:
|
|
|
|
|
|
|
|
|
|
|||
Interest income
|
|
5,620
|
|
|
4,777
|
|
|
2,477
|
|
|||
Interest expense
|
|
(40,378
|
)
|
|
(37,344
|
)
|
|
(35,959
|
)
|
|||
Losses on early retirements of debt
|
|
—
|
|
|
—
|
|
|
(2,150
|
)
|
|||
Other income (expense), net
|
|
205
|
|
|
(3,906
|
)
|
|
5,902
|
|
|||
Total other expense, net
|
|
(34,553
|
)
|
|
(36,473
|
)
|
|
(29,730
|
)
|
|||
Income before provision for income taxes
|
|
53,303
|
|
|
77,762
|
|
|
18,900
|
|
|||
Provision for income taxes
|
|
17,620
|
|
|
7,542
|
|
|
22,354
|
|
|||
Net income (loss)
|
|
35,683
|
|
|
70,220
|
|
|
(3,454
|
)
|
|||
Net income attributable to noncontrolling interests
|
|
6,999
|
|
|
4,229
|
|
|
3,173
|
|
|||
Net income (loss) attributable to Verint Systems Inc.
|
|
$
|
28,684
|
|
|
$
|
65,991
|
|
|
$
|
(6,627
|
)
|
|
|
|
|
|
|
|
||||||
Net income (loss) per common share attributable to Verint Systems Inc.:
|
|
|
|
|
|
|
|
|
|
|||
Basic
|
|
$
|
0.43
|
|
|
$
|
1.02
|
|
|
$
|
(0.10
|
)
|
Diluted
|
|
$
|
0.43
|
|
|
$
|
1.00
|
|
|
$
|
(0.10
|
)
|
|
|
|
|
|
|
|
||||||
Weighted-average common shares outstanding:
|
|
|
|
|
|
|
|
|
|
|||
Basic
|
|
66,129
|
|
|
64,913
|
|
|
63,312
|
|
|||
Diluted
|
|
67,355
|
|
|
66,245
|
|
|
63,312
|
|
|
|
Year Ended January 31,
|
||||||||||
(in thousands)
|
|
2020
|
|
2019
|
|
2018
|
||||||
Net income (loss)
|
|
$
|
35,683
|
|
|
$
|
70,220
|
|
|
$
|
(3,454
|
)
|
Other comprehensive (loss) income, net of reclassification adjustments:
|
|
|
|
|
|
|
|
|
|
|||
Foreign currency translation adjustments
|
|
(772
|
)
|
|
(34,485
|
)
|
|
49,810
|
|
|||
Net increase (decrease) from foreign exchange contracts designated as hedges
|
|
1,786
|
|
|
(4,774
|
)
|
|
3,042
|
|
|||
Net decrease from interest rate swap designated as a hedge
|
|
(9,473
|
)
|
|
(4,028
|
)
|
|
(1,021
|
)
|
|||
Benefit for income taxes on net increase (decrease) from foreign exchange contracts and interest rate swap designated as hedges
|
|
1,809
|
|
|
1,466
|
|
|
85
|
|
|||
Other comprehensive (loss) income
|
|
(6,650
|
)
|
|
(41,821
|
)
|
|
51,916
|
|
|||
Comprehensive income
|
|
29,033
|
|
|
28,399
|
|
|
48,462
|
|
|||
Comprehensive income attributable to noncontrolling interests
|
|
6,989
|
|
|
4,173
|
|
|
3,693
|
|
|||
Comprehensive income attributable to Verint Systems Inc.
|
|
$
|
22,044
|
|
|
$
|
24,226
|
|
|
$
|
44,769
|
|
|
|
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, 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-classified awards
|
|
—
|
|
|
—
|
|
|
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 adoption of 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
|
|
||||||||
Net income
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
65,991
|
|
|
—
|
|
|
65,991
|
|
|
4,229
|
|
|
70,220
|
|
||||||||
Other comprehensive loss
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(41,765
|
)
|
|
(41,765
|
)
|
|
(56
|
)
|
|
(41,821
|
)
|
||||||||
Stock-based compensation - equity-classified awards
|
|
—
|
|
|
—
|
|
|
57,659
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
57,659
|
|
|
—
|
|
|
57,659
|
|
||||||||
Common stock issued for stock awards and stock bonuses
|
|
1,501
|
|
|
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
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(4,409
|
)
|
|
(4,409
|
)
|
||||||||
Cumulative effect of adoption of ASU No. 2014-09
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
38,047
|
|
|
—
|
|
|
38,047
|
|
|
—
|
|
|
38,047
|
|
||||||||
Balances as of January 31, 2019
|
|
65,333
|
|
|
67
|
|
|
1,586,266
|
|
|
(57,598
|
)
|
|
(134,274
|
)
|
|
(145,225
|
)
|
|
1,249,236
|
|
|
11,568
|
|
|
1,260,804
|
|
||||||||
Net income
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
28,684
|
|
|
—
|
|
|
28,684
|
|
|
6,999
|
|
|
35,683
|
|
||||||||
Other comprehensive loss
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(6,640
|
)
|
|
(6,640
|
)
|
|
(10
|
)
|
|
(6,650
|
)
|
||||||||
Stock-based compensation - equity-classified awards
|
|
—
|
|
|
—
|
|
|
65,080
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
65,080
|
|
|
—
|
|
|
65,080
|
|
||||||||
Common stock issued for stock awards and stock bonuses
|
|
1,531
|
|
|
1
|
|
|
9,543
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
9,544
|
|
|
—
|
|
|
9,544
|
|
||||||||
Treasury stock acquired
|
|
(2,126
|
)
|
|
—
|
|
|
—
|
|
|
(116,536
|
)
|
|
—
|
|
|
—
|
|
|
(116,536
|
)
|
|
—
|
|
|
(116,536
|
)
|
||||||||
Dividends or distribution to noncontrolling interest
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(5,488
|
)
|
|
(5,488
|
)
|
||||||||
Balances as of January 31, 2020
|
|
64,738
|
|
|
$
|
68
|
|
|
$
|
1,660,889
|
|
|
$
|
(174,134
|
)
|
|
$
|
(105,590
|
)
|
|
$
|
(151,865
|
)
|
|
$
|
1,229,368
|
|
|
$
|
13,069
|
|
|
$
|
1,242,437
|
|
|
|
Year Ended January 31,
|
||||||||||
(in thousands)
|
|
2020
|
|
2019
|
|
2018
|
||||||
Cash flows from operating activities:
|
|
|
|
|
|
|
|
|
||||
Net income (loss)
|
|
$
|
35,683
|
|
|
$
|
70,220
|
|
|
$
|
(3,454
|
)
|
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
|
|
|
|
|
|
|
|
|
|
|||
Depreciation and amortization
|
|
91,532
|
|
|
88,915
|
|
|
105,730
|
|
|||
Provision for doubtful accounts
|
|
2,572
|
|
|
2,746
|
|
|
559
|
|
|||
Stock-based compensation, excluding cash-settled awards
|
|
82,698
|
|
|
66,657
|
|
|
69,296
|
|
|||
Amortization of discount on convertible notes
|
|
12,490
|
|
|
11,850
|
|
|
11,243
|
|
|||
Provision (benefit) from deferred income taxes
|
|
2,145
|
|
|
(3,017
|
)
|
|
(7,533
|
)
|
|||
Non-cash (gains) losses on derivative financial instruments, net
|
|
(599
|
)
|
|
(2,511
|
)
|
|
17
|
|
|||
Losses on early retirements of debt
|
|
—
|
|
|
—
|
|
|
2,150
|
|
|||
Other non-cash items, net
|
|
4,544
|
|
|
(2,328
|
)
|
|
(428
|
)
|
|||
Changes in operating assets and liabilities, net of effects of business combinations and divestitures:
|
|
|
|
|
|
|
|
|
|
|||
Accounts receivable
|
|
(6,894
|
)
|
|
(21,520
|
)
|
|
(23,512
|
)
|
|||
Contract assets
|
|
(1,470
|
)
|
|
5,751
|
|
|
—
|
|
|||
Inventories
|
|
1,752
|
|
|
(8,208
|
)
|
|
(2,865
|
)
|
|||
Prepaid expenses and other assets
|
|
13,523
|
|
|
(4,753
|
)
|
|
(1,748
|
)
|
|||
Accounts payable and accrued expenses
|
|
(14,488
|
)
|
|
(15,648
|
)
|
|
10,158
|
|
|||
Contract liabilities
|
|
27,575
|
|
|
32,919
|
|
|
9,686
|
|
|||
Other liabilities
|
|
(13,290
|
)
|
|
(7,328
|
)
|
|
8,599
|
|
|||
Other, net
|
|
131
|
|
|
1,506
|
|
|
(1,571
|
)
|
|||
Net cash provided by operating activities
|
|
237,904
|
|
|
215,251
|
|
|
176,327
|
|
|||
|
|
|
|
|
|
|
||||||
Cash flows from investing activities:
|
|
|
|
|
|
|
|
|
||||
Cash paid for business combinations, including adjustments, net of cash acquired
|
|
(74,096
|
)
|
|
(90,022
|
)
|
|
(102,978
|
)
|
|||
Purchases of property and equipment
|
|
(35,028
|
)
|
|
(31,686
|
)
|
|
(35,530
|
)
|
|||
Purchases of investments
|
|
(47,407
|
)
|
|
(59,065
|
)
|
|
(11,875
|
)
|
|||
Maturities and sales of investments
|
|
59,324
|
|
|
33,118
|
|
|
8,721
|
|
|||
Settlements of derivative financial instruments not designated as hedges
|
|
3,093
|
|
|
1,335
|
|
|
(1,558
|
)
|
|||
Cash paid for capitalized software development costs
|
|
(17,222
|
)
|
|
(7,320
|
)
|
|
(3,126
|
)
|
|||
Change in restricted bank time deposits, including long-term portion
|
|
(14,215
|
)
|
|
(21,304
|
)
|
|
362
|
|
|||
Other investing activities
|
|
(250
|
)
|
|
(779
|
)
|
|
(210
|
)
|
|||
Net cash used in investing activities
|
|
(125,801
|
)
|
|
(175,723
|
)
|
|
(146,194
|
)
|
|||
|
|
|
|
|
|
|
||||||
Cash flows from financing activities:
|
|
|
|
|
|
|
|
|
||||
Proceeds from borrowings, net of original issuance discount
|
|
45,000
|
|
|
—
|
|
|
444,341
|
|
|||
Repayments of borrowings and other financing obligations
|
|
(6,478
|
)
|
|
(5,983
|
)
|
|
(431,888
|
)
|
|||
Payments of equity issuance, debt issuance, and other debt-related costs
|
|
(212
|
)
|
|
(206
|
)
|
|
(7,137
|
)
|
|||
Dividends or distributions paid to noncontrolling interests
|
|
(5,488
|
)
|
|
(4,409
|
)
|
|
(3,304
|
)
|
|||
Purchases of treasury stock
|
|
(113,690
|
)
|
|
(173
|
)
|
|
—
|
|
|||
Payments of deferred purchase price and contingent consideration for business combinations (financing portion) and other financing activities
|
|
(30,454
|
)
|
|
(11,110
|
)
|
|
(7,515
|
)
|
|||
Net cash used in financing activities
|
|
(111,322
|
)
|
|
(21,881
|
)
|
|
(5,503
|
)
|
|||
Foreign currency effects on cash, cash equivalents, restricted cash, and restricted cash equivalents
|
|
(1,823
|
)
|
|
(3,158
|
)
|
|
4,251
|
|
|||
Net (decrease) increase in cash, cash equivalents, restricted cash, and restricted cash equivalents
|
|
(1,042
|
)
|
|
14,489
|
|
|
28,881
|
|
|||
Cash, cash equivalents, restricted cash, and restricted cash equivalents, beginning of year
|
|
412,699
|
|
|
398,210
|
|
|
369,329
|
|
|||
Cash, cash equivalents, restricted cash, and restricted cash equivalents, end of year
|
|
$
|
411,657
|
|
|
$
|
412,699
|
|
|
$
|
398,210
|
|
|
|
|
|
|
|
|
||||||
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
|
|
$
|
379,146
|
|
|
$
|
369,975
|
|
|
$
|
337,942
|
|
Restricted cash and cash equivalents included in restricted cash and cash equivalents, and restricted bank time deposits
|
|
24,513
|
|
|
40,152
|
|
|
32,955
|
|
|||
Restricted cash and cash equivalents included in other assets
|
|
7,998
|
|
|
2,572
|
|
|
27,313
|
|
|||
Total cash, cash equivalents, restricted cash, and restricted cash equivalents
|
|
$
|
411,657
|
|
|
$
|
412,699
|
|
|
$
|
398,210
|
|
1.
|
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
|
|
|
Year Ended January 31,
|
||||||||||
(in thousands)
|
|
2020
|
|
2019
|
|
2018
|
||||||
Allowance for doubtful accounts, beginning of year
|
|
$
|
3,777
|
|
|
$
|
2,217
|
|
|
$
|
1,842
|
|
Provisions charged to expense
|
|
2,572
|
|
|
2,746
|
|
|
559
|
|
|||
Amounts written off
|
|
(1,176
|
)
|
|
(1,172
|
)
|
|
(482
|
)
|
|||
Other, including fluctuations in foreign exchange rates
|
|
151
|
|
|
(14
|
)
|
|
298
|
|
|||
Allowance for doubtful accounts, end of year
|
|
$
|
5,324
|
|
|
$
|
3,777
|
|
|
$
|
2,217
|
|
•
|
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.
|
REVENUE RECOGNITION
|
•
|
Recurring revenue primarily consists of cloud revenue and initial and renewal support revenue.
|
◦
|
Cloud revenue consists primarily of SaaS revenue with some optional managed services revenue.
|
◦
|
SaaS revenue consists predominately of bundled SaaS (software with standard managed services) with some unbundled SaaS (software licensing rights sold separately from managed services and accounted for as term-based licenses). Unbundled SaaS can be deployed in the cloud either by us or a cloud partner.
|
◦
|
Bundled SaaS revenue is recognized over time and unbundled SaaS revenue is recognized at a point in time. Unbundled SaaS contracts are eligible for renewal after the initial fixed term, which in most cases is between a one- and three-year time frame.
|
•
|
Nonrecurring revenue primarily consists of our perpetual licenses, consulting, implementation and installation services, and training.
|
•
|
Recurring revenue primarily consists of initial and renewal support, subscription software licenses, and SaaS in certain limited transactions.
|
•
|
Nonrecurring revenue primarily consists of our perpetual licenses, long-term projects including software customizations that are recognized over time as control transfers to the customer using a percentage-of-completion (“POC”) method, consulting, implementation and installation services, training, and hardware.
|
|
|
Year Ended
January 31, 2020 |
|
Year Ended
January 31, 2019 |
||||||||||||||||||||
(in thousands)
|
|
Customer Engagement
|
|
Cyber Intelligence
|
|
Total
|
|
Customer Engagement
|
|
Cyber Intelligence
|
|
Total
|
||||||||||||
Revenue:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Product
|
|
$
|
223,397
|
|
|
$
|
231,478
|
|
|
$
|
454,875
|
|
|
$
|
221,721
|
|
|
$
|
232,929
|
|
|
$
|
454,650
|
|
Service and support
|
|
623,128
|
|
|
225,631
|
|
|
848,759
|
|
|
574,566
|
|
|
200,531
|
|
|
775,097
|
|
||||||
Total revenue
|
|
$
|
846,525
|
|
|
$
|
457,109
|
|
|
$
|
1,303,634
|
|
|
$
|
796,287
|
|
|
$
|
433,460
|
|
|
$
|
1,229,747
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Revenue by recurrence:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Recurring revenue
|
|
$
|
534,378
|
|
|
$
|
192,578
|
|
|
$
|
726,956
|
|
|
$
|
465,671
|
|
|
$
|
165,265
|
|
|
$
|
630,936
|
|
Nonrecurring revenue
|
|
312,147
|
|
|
264,531
|
|
|
576,678
|
|
|
330,616
|
|
|
268,195
|
|
|
598,811
|
|
||||||
Total revenue
|
|
$
|
846,525
|
|
|
$
|
457,109
|
|
|
$
|
1,303,634
|
|
|
$
|
796,287
|
|
|
$
|
433,460
|
|
|
$
|
1,229,747
|
|
|
|
Years Ended January 31,
|
||||||
(in thousands)
|
|
2020
|
|
2019
|
||||
Customer Engagement revenue
|
|
|
|
|
||||
Recurring revenue
|
|
|
|
|
||||
Bundled SaaS revenue
|
|
$
|
115,925
|
|
|
$
|
84,715
|
|
Unbundled SaaS revenue
|
|
43,368
|
|
|
24,925
|
|
||
Optional managed services revenue
|
|
56,534
|
|
|
41,103
|
|
||
Total cloud revenue
|
|
215,827
|
|
|
150,743
|
|
||
Support revenue
|
|
318,551
|
|
|
314,928
|
|
||
Total recurring revenue
|
|
534,378
|
|
|
465,671
|
|
||
Nonrecurring revenue
|
|
|
|
|
|
|
||
Perpetual revenue
|
|
179,882
|
|
|
196,125
|
|
||
Professional services revenue
|
|
132,265
|
|
|
134,491
|
|
||
Total nonrecurring revenue
|
|
312,147
|
|
|
330,616
|
|
||
Total Customer Engagement revenue
|
|
$
|
846,525
|
|
|
$
|
796,287
|
|
|
|
January 31,
|
||||||
(in thousands)
|
|
2020
|
|
2019
|
||||
Accounts receivable, net
|
|
$
|
382,435
|
|
|
$
|
375,663
|
|
Contract assets
|
|
$
|
64,961
|
|
|
$
|
63,389
|
|
Long-term contract assets (included in Other assets)
|
|
$
|
1,358
|
|
|
$
|
1,375
|
|
Contract liabilities
|
|
$
|
397,350
|
|
|
$
|
377,376
|
|
Long-term contract liabilities
|
|
$
|
40,565
|
|
|
$
|
30,094
|
|
|
|
January 31, 2020
|
|
January 31, 2019
|
||||||||||||||||||||
(in thousands)
|
|
Customer Engagement
|
|
Cyber Intelligence
|
|
Total
|
|
Customer Engagement
|
|
Cyber Intelligence
|
|
Total
|
||||||||||||
RPO:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Expected to be recognized within 1 year
|
|
$
|
374,982
|
|
|
$
|
356,677
|
|
|
$
|
731,659
|
|
|
$
|
358,916
|
|
|
$
|
302,703
|
|
|
$
|
661,619
|
|
Expected to be recognized in more than 1 year
|
|
117,497
|
|
|
225,056
|
|
|
342,553
|
|
|
91,472
|
|
|
267,436
|
|
|
358,908
|
|
||||||
Total RPO
|
|
$
|
492,479
|
|
|
$
|
581,733
|
|
|
$
|
1,074,212
|
|
|
$
|
450,388
|
|
|
$
|
570,139
|
|
|
$
|
1,020,527
|
|
3.
|
NET INCOME (LOSS) PER COMMON SHARE ATTRIBUTABLE TO VERINT SYSTEMS INC.
|
|
|
Year Ended January 31,
|
||||||||||
(in thousands, except per share amounts)
|
|
2020
|
|
2019
|
|
2018
|
||||||
Net income (loss)
|
|
$
|
35,683
|
|
|
$
|
70,220
|
|
|
$
|
(3,454
|
)
|
Net income attributable to noncontrolling interests
|
|
6,999
|
|
|
4,229
|
|
|
3,173
|
|
|||
Net income (loss) attributable to Verint Systems Inc.
|
|
$
|
28,684
|
|
|
$
|
65,991
|
|
|
$
|
(6,627
|
)
|
Weighted-average shares outstanding:
|
|
|
|
|
|
|
|
|
|
|||
Basic
|
|
66,129
|
|
|
64,913
|
|
|
63,312
|
|
|||
Dilutive effect of employee equity award plans
|
|
1,226
|
|
|
1,332
|
|
|
—
|
|
|||
Dilutive effect of 1.50% convertible senior notes
|
|
—
|
|
|
—
|
|
|
—
|
|
|||
Dilutive effect of warrants
|
|
—
|
|
|
—
|
|
|
—
|
|
|||
Diluted
|
|
67,355
|
|
|
66,245
|
|
|
63,312
|
|
|||
Net income (loss) per common share attributable to Verint Systems Inc.:
|
|
|
|
|
|
|
|
|
|
|||
Basic
|
|
$
|
0.43
|
|
|
$
|
1.02
|
|
|
$
|
(0.10
|
)
|
Diluted
|
|
$
|
0.43
|
|
|
$
|
1.00
|
|
|
$
|
(0.10
|
)
|
|
|
Year Ended January 31,
|
|||||||
(in thousands)
|
|
2020
|
|
2019
|
|
2018
|
|||
Stock options and restricted stock-based awards
|
|
900
|
|
|
276
|
|
|
1,187
|
|
1.50% convertible senior notes
|
|
6,205
|
|
|
6,205
|
|
|
6,205
|
|
Warrants
|
|
6,205
|
|
|
6,205
|
|
|
6,205
|
|
|
|
January 31, 2020
|
||||||||||||||
(in thousands)
|
|
Cost Basis
|
|
Gross Unrealized Gains
|
|
Gross Unrealized Losses
|
|
Estimated Fair Value
|
||||||||
Cash and cash equivalents:
|
|
|
|
|
|
|
|
|
||||||||
Cash and bank time deposits
|
|
$
|
379,057
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
379,057
|
|
Money market funds
|
|
89
|
|
|
—
|
|
|
—
|
|
|
89
|
|
||||
Total cash and cash equivalents
|
|
$
|
379,146
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
379,146
|
|
|
|
|
|
|
|
|
|
|
||||||||
Short-term investments:
|
|
|
|
|
|
|
|
|
||||||||
Bank time deposits
|
|
$
|
20,215
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
20,215
|
|
Total short-term investments
|
|
$
|
20,215
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
20,215
|
|
|
|
January 31, 2019
|
||||||||||||||
(in thousands)
|
|
Cost Basis
|
|
Gross Unrealized Gains
|
|
Gross Unrealized Losses
|
|
Estimated Fair Value
|
||||||||
Cash and cash equivalents:
|
|
|
|
|
|
|
|
|
||||||||
Cash and bank time deposits
|
|
$
|
359,266
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
359,266
|
|
Money market funds
|
|
10,709
|
|
|
—
|
|
|
—
|
|
|
10,709
|
|
||||
Total cash and cash equivalents
|
|
$
|
369,975
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
369,975
|
|
|
|
|
|
|
|
|
|
|
||||||||
Short-term investments:
|
|
|
|
|
|
|
|
|
||||||||
Bank time deposits
|
|
$
|
32,329
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
32,329
|
|
Total short-term investments
|
|
$
|
32,329
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
32,329
|
|
5.
|
BUSINESS COMBINATIONS AND DIVESTITURES
|
•
|
On February 1, 2019, we completed the acquisition of a SaaS workforce optimization company focused on the small and medium-sized business (“SMB”) market as part of our strategy to expand our SMB portfolio. This company has been integrated into our Customer Engagement segment.
|
•
|
On July 25, 2019, we completed the acquisition of a SaaS company focused on cloud-based knowledge management solutions as part of our strategy to add additional artificial intelligence and machine learning capabilities into our portfolio. This company is being integrated into our Customer Engagement segment.
|
•
|
On December 18, 2019, we completed the acquisition of two software companies under common control focused on multi source intelligence and fusion analytics domains. These companies are being integrated into our Cyber Intelligence segment.
|
•
|
On January 13, 2020, we completed the acquisition of a SaaS based company providing web and mobile session replay solutions. This company is being integrated into our Customer Engagement segment.
|
(in thousands)
|
|
Amount
|
||
Components of Purchase Prices:
|
|
|
||
Cash
|
|
$
|
76,198
|
|
Fair value of contingent consideration
|
|
15,253
|
|
|
Other purchase price adjustments
|
|
(2,137
|
)
|
|
Total purchase prices
|
|
$
|
89,314
|
|
|
|
|
||
Allocation of Purchase Prices:
|
|
|
||
Net tangible assets (liabilities):
|
|
|
||
Accounts receivable
|
|
$
|
3,734
|
|
Other current assets, including cash acquired
|
|
14,086
|
|
|
Other assets
|
|
6,556
|
|
|
Current and other liabilities
|
|
(8,364
|
)
|
|
Contract liabilities - current and long-term
|
|
(3,794
|
)
|
|
Deferred income taxes
|
|
(4,061
|
)
|
|
Net tangible assets
|
|
8,157
|
|
|
Identifiable intangible assets:
|
|
|
||
Customer relationships
|
|
13,299
|
|
|
Developed technology
|
|
14,443
|
|
|
Trademarks and trade names
|
|
1,367
|
|
|
Non-compete agreements
|
|
1,307
|
|
|
Total identifiable intangible assets
|
|
30,416
|
|
|
Goodwill
|
|
50,741
|
|
|
Total purchase prices allocation
|
|
$
|
89,314
|
|
(in thousands)
|
|
Amount
|
||
Components of Purchase Price:
|
|
|
||
Cash
|
|
$
|
58,901
|
|
Deferred purchase price consideration
|
|
6,000
|
|
|
Other purchase price adjustments
|
|
262
|
|
|
Total purchase price
|
|
$
|
65,163
|
|
|
|
|
||
Allocation of Purchase Price:
|
|
|
||
Net tangible assets (liabilities):
|
|
|
||
Accounts receivable
|
|
$
|
7,245
|
|
Other current assets, including cash acquired
|
|
8,101
|
|
|
Other assets
|
|
6,075
|
|
|
Current and other liabilities
|
|
(12,710
|
)
|
|
Contract liabilities - current and long-term
|
|
(9,821
|
)
|
|
Deferred income taxes
|
|
(10,687
|
)
|
|
Net tangible liabilities
|
|
(11,797
|
)
|
|
Identifiable intangible assets:
|
|
|
||
Customer relationships
|
|
19,400
|
|
|
Developed technology
|
|
20,000
|
|
|
Trademarks and trade names
|
|
3,300
|
|
|
Total identifiable intangible assets
|
|
42,700
|
|
|
Goodwill
|
|
34,260
|
|
|
Total purchase price allocation
|
|
$
|
65,163
|
|
•
|
On July 18, 2018, we completed the acquisition of a business that has been integrated into our Customer Engagement operating segment.
|
•
|
On November 8, 2018, we completed the acquisition of a business that has been integrated into our Cyber Intelligence operating segment, in which we had a $2.2 million, or approximately 19%, noncontrolling equity investment prior to the acquisition.
|
•
|
On November 9, 2018, 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
|
|
$
|
33,138
|
|
Fair value of contingent consideration
|
|
15,875
|
|
|
Fair value of previously held equity interest
|
|
2,239
|
|
|
Total purchase prices
|
|
$
|
51,252
|
|
|
|
|
||
Allocation of Purchase Prices:
|
|
|
||
Net tangible assets (liabilities):
|
|
|
||
Accounts receivable
|
|
$
|
1,897
|
|
Other current assets, including cash acquired
|
|
6,901
|
|
|
Other assets
|
|
9,432
|
|
|
Current and other liabilities
|
|
(2,151
|
)
|
|
Contract liabilities - current and long-term
|
|
(771
|
)
|
|
Deferred income taxes
|
|
(7,914
|
)
|
|
Net tangible assets
|
|
7,394
|
|
|
Identifiable intangible assets:
|
|
|
||
Customer relationships
|
|
7,521
|
|
|
Developed technology
|
|
10,692
|
|
|
Trademarks and trade names
|
|
500
|
|
|
Total identifiable intangible assets
|
|
18,713
|
|
|
Goodwill
|
|
25,145
|
|
|
Total purchase price allocations
|
|
$
|
51,252
|
|
•
|
On February 1, March 20, October 3, November 3, December 19, and December 21, 2017, we completed acquisitions of businesses that were integrated into 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 that was integrated into 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
|
)
|
|
Contract liabilities - current and long-term
|
|
(4,424
|
)
|
|
Deferred income taxes
|
|
(7,381
|
)
|
|
Net tangible liabilities
|
|
(2,260
|
)
|
|
Identifiable intangible assets:
|
|
|
|
|
Customer relationships
|
|
24,812
|
|
|
Developed technology
|
|
29,614
|
|
|
Trademarks and trade names
|
|
2,456
|
|
|
Total identifiable intangible assets
|
|
56,882
|
|
|
Goodwill
|
|
80,198
|
|
|
Total purchase price allocations
|
|
$
|
134,820
|
|
6.
|
INTANGIBLE ASSETS AND GOODWILL
|
|
|
January 31, 2020
|
||||||||||
(in thousands)
|
|
Cost
|
|
Accumulated
Amortization
|
|
Net
|
||||||
Intangible assets with finite lives:
|
|
|
|
|
|
|
|
|
|
|||
Customer relationships
|
|
$
|
465,130
|
|
|
$
|
(328,069
|
)
|
|
$
|
137,061
|
|
Acquired technology
|
|
294,841
|
|
|
(241,585
|
)
|
|
53,256
|
|
|||
Trade names
|
|
12,957
|
|
|
(6,783
|
)
|
|
6,174
|
|
|||
Distribution network
|
|
4,440
|
|
|
(4,440
|
)
|
|
—
|
|
|||
Non-competition agreements
|
|
1,307
|
|
|
(34
|
)
|
|
1,273
|
|
|||
Total intangible assets
|
|
$
|
778,675
|
|
|
$
|
(580,911
|
)
|
|
$
|
197,764
|
|
|
|
January 31, 2019
|
||||||||||
(in thousands)
|
|
Cost
|
|
Accumulated
Amortization
|
|
Net
|
||||||
Intangible assets with finite lives:
|
|
|
|
|
|
|
|
|
|
|||
Customer relationships
|
|
$
|
452,918
|
|
|
$
|
(299,549
|
)
|
|
$
|
153,369
|
|
Acquired technology
|
|
285,230
|
|
|
(221,145
|
)
|
|
64,085
|
|
|||
Trade names
|
|
12,859
|
|
|
(5,130
|
)
|
|
7,729
|
|
|||
Distribution network
|
|
4,440
|
|
|
(4,440
|
)
|
|
—
|
|
|||
Total intangible assets
|
|
$
|
755,447
|
|
|
$
|
(530,264
|
)
|
|
$
|
225,183
|
|
|
|
January 31,
|
||||||
(in thousands)
|
|
2020
|
|
2019
|
||||
Customer Engagement
|
|
$
|
189,896
|
|
|
$
|
218,738
|
|
Cyber Intelligence
|
|
7,868
|
|
|
6,445
|
|
||
Total
|
|
$
|
197,764
|
|
|
$
|
225,183
|
|
(in thousands)
|
|
|
|
|
Years Ending January 31,
|
|
Amount
|
||
2021
|
|
$
|
50,083
|
|
2022
|
|
46,645
|
|
|
2023
|
|
38,570
|
|
|
2024
|
|
28,262
|
|
|
2025
|
|
11,814
|
|
|
Thereafter
|
|
22,390
|
|
|
Total
|
|
$
|
197,764
|
|
|
|
|
|
Reportable Segment
|
||||||||
(in thousands)
|
|
Total
|
|
Customer Engagement
|
|
Cyber Intelligence
|
||||||
Year Ended January 31, 2019:
|
|
|
|
|
|
|
||||||
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
|
|
59,035
|
|
|
48,225
|
|
|
10,810
|
|
|||
Foreign currency translation and other
|
|
(29,853
|
)
|
|
(28,991
|
)
|
|
(862
|
)
|
|||
Goodwill, net, at January 31, 2019
|
|
$
|
1,417,481
|
|
|
$
|
1,270,327
|
|
|
$
|
147,154
|
|
|
|
|
|
|
|
|
||||||
Year Ended January 31, 2020:
|
|
|
|
|
|
|
||||||
Goodwill, gross, at January 31, 2019
|
|
$
|
1,484,346
|
|
|
$
|
1,326,370
|
|
|
$
|
157,976
|
|
Accumulated impairment losses through January 31, 2019
|
|
(66,865
|
)
|
|
(56,043
|
)
|
|
(10,822
|
)
|
|||
Goodwill, net, at January 31, 2019
|
|
1,417,481
|
|
|
1,270,327
|
|
|
147,154
|
|
|||
Business combinations, including adjustments to prior period acquisitions
|
|
51,301
|
|
|
39,704
|
|
|
11,597
|
|
|||
Foreign currency translation and other
|
|
429
|
|
|
1,037
|
|
|
(608
|
)
|
|||
Goodwill, net, at January 31, 2020
|
|
$
|
1,469,211
|
|
|
$
|
1,311,068
|
|
|
$
|
158,143
|
|
|
|
|
|
|
|
|
||||||
Balance at January 31, 2020
|
|
|
|
|
|
|
|
|
|
|||
Goodwill, gross, at January 31, 2020
|
|
$
|
1,536,076
|
|
|
$
|
1,367,111
|
|
|
$
|
168,965
|
|
Accumulated impairment losses through January 31, 2020
|
|
(66,865
|
)
|
|
(56,043
|
)
|
|
(10,822
|
)
|
|||
Goodwill, net, at January 31, 2020
|
|
$
|
1,469,211
|
|
|
$
|
1,311,068
|
|
|
$
|
158,143
|
|
7.
|
LONG-TERM DEBT
|
|
|
January 31,
|
||||||
(in thousands)
|
|
2020
|
|
2019
|
||||
1.50% Convertible Senior Notes
|
|
$
|
400,000
|
|
|
$
|
400,000
|
|
June 2017 Term Loan
|
|
414,375
|
|
|
418,625
|
|
||
Borrowings under 2017 Revolving Credit Facility
|
|
45,000
|
|
|
—
|
|
||
Other debt
|
|
—
|
|
|
92
|
|
||
Less: Unamortized debt discounts and issuance costs
|
|
(22,327
|
)
|
|
(36,589
|
)
|
||
Total debt
|
|
837,048
|
|
|
782,128
|
|
||
Less: current maturities
|
|
4,250
|
|
|
4,343
|
|
||
Long-term debt
|
|
$
|
832,798
|
|
|
$
|
777,785
|
|
(in thousands)
|
|
|
||
Years Ending January 31,
|
|
Amount
|
||
2021
|
|
$
|
4,250
|
|
2022
|
|
4,250
|
|
|
2023
|
|
4,250
|
|
|
2024
|
|
4,250
|
|
|
2025
|
|
397,375
|
|
|
Total
|
|
$
|
414,375
|
|
|
|
Year Ended January 31,
|
||||||||||
(in thousands)
|
|
2020
|
|
2019
|
|
2018
|
||||||
1.50% Convertible Senior Notes:
|
|
|
|
|
|
|
||||||
Interest expense at 1.50% coupon rate
|
|
$
|
6,000
|
|
|
$
|
6,000
|
|
|
$
|
6,000
|
|
Amortization of debt discount
|
|
12,490
|
|
|
11,850
|
|
|
11,244
|
|
|||
Amortization of deferred debt issuance costs
|
|
1,177
|
|
|
1,118
|
|
|
1,060
|
|
|||
Total Interest Expense - 1.50% Convertible Senior Notes
|
|
$
|
19,667
|
|
|
$
|
18,968
|
|
|
$
|
18,304
|
|
|
|
|
|
|
|
|
||||||
Borrowings under Credit Agreements:
|
|
|
|
|
|
|
||||||
Interest expense at contractual rates
|
|
$
|
18,021
|
|
|
$
|
17,741
|
|
|
$
|
15,412
|
|
Impact of interest rate swap agreement
|
|
792
|
|
|
—
|
|
|
254
|
|
|||
Amortization of debt discounts
|
|
68
|
|
|
67
|
|
|
65
|
|
|||
Amortization of deferred debt issuance costs
|
|
1,569
|
|
|
1,554
|
|
|
1,839
|
|
|||
Total Interest Expense - Borrowings under Credit Agreements
|
|
$
|
20,450
|
|
|
$
|
19,362
|
|
|
$
|
17,570
|
|
8.
|
SUPPLEMENTAL CONSOLIDATED FINANCIAL STATEMENT INFORMATION
|
|
|
January 31,
|
||||||
(in thousands)
|
|
2020
|
|
2019
|
||||
Raw materials
|
|
$
|
9,628
|
|
|
$
|
10,875
|
|
Work-in-process
|
|
4,749
|
|
|
5,567
|
|
||
Finished goods
|
|
6,118
|
|
|
8,510
|
|
||
Total inventories
|
|
$
|
20,495
|
|
|
$
|
24,952
|
|
|
|
January 31,
|
||||||
(in thousands)
|
|
2020
|
|
2019
|
||||
Land and buildings
|
|
$
|
10,754
|
|
|
$
|
10,632
|
|
Leasehold improvements
|
|
35,463
|
|
|
31,694
|
|
||
Software
|
|
53,606
|
|
|
51,950
|
|
||
Equipment, furniture, and other
|
|
199,268
|
|
|
164,351
|
|
||
Total cost
|
|
299,091
|
|
|
258,627
|
|
||
Less: accumulated depreciation and amortization
|
|
(182,980
|
)
|
|
(158,493
|
)
|
||
Total property and equipment, net
|
|
$
|
116,111
|
|
|
$
|
100,134
|
|
|
|
January 31,
|
||||||
(in thousands)
|
|
2020
|
|
2019
|
||||
Deferred commissions
|
|
$
|
37,263
|
|
|
$
|
29,815
|
|
Capitalized software development costs, net
|
|
27,030
|
|
|
13,342
|
|
||
Long-term restricted cash and time deposits
|
|
26,362
|
|
|
23,193
|
|
||
Long-term deferred cost of revenue
|
|
6,345
|
|
|
4,630
|
|
||
Deferred debt issuance costs, net
|
|
2,005
|
|
|
2,836
|
|
||
Long-term security deposits
|
|
1,920
|
|
|
3,760
|
|
||
Other
|
|
17,038
|
|
|
19,267
|
|
||
Total other assets
|
|
$
|
117,963
|
|
|
$
|
96,843
|
|
|
|
January 31,
|
||||||
(in thousands)
|
|
2020
|
|
2019
|
||||
Compensation and benefits
|
|
$
|
100,225
|
|
|
$
|
96,703
|
|
Contingent consideration - current portion
|
|
22,859
|
|
|
28,415
|
|
||
Operating lease obligations - current portion
|
|
22,656
|
|
|
1,794
|
|
||
Taxes other than income taxes
|
|
18,642
|
|
|
20,428
|
|
||
Income taxes
|
|
15,084
|
|
|
7,497
|
|
||
Distributor and agent commissions
|
|
10,097
|
|
|
11,446
|
|
||
Professional and consulting fees
|
|
4,367
|
|
|
3,929
|
|
||
Other
|
|
35,768
|
|
|
38,269
|
|
||
Total accrued expenses and other current liabilities
|
|
$
|
229,698
|
|
|
$
|
208,481
|
|
|
|
January 31,
|
||||||
(in thousands)
|
|
2020
|
|
2019
|
||||
Unrecognized tax benefits, including interest and penalties
|
|
$
|
22,355
|
|
|
$
|
33,063
|
|
Contingent consideration - long-term portion
|
|
20,017
|
|
|
32,925
|
|
||
Derivative financial instruments - long-term portion
|
|
11,441
|
|
|
3,906
|
|
||
Finance lease obligations - long-term portion
|
|
7,210
|
|
|
3,067
|
|
||
Obligations for severance compensation
|
|
2,627
|
|
|
2,601
|
|
||
Deferred rent expense
|
|
—
|
|
|
12,254
|
|
||
Other
|
|
3,505
|
|
|
5,536
|
|
||
Total other liabilities
|
|
$
|
67,155
|
|
|
$
|
93,352
|
|
|
|
Year Ended January 31,
|
||||||||||
(in thousands)
|
|
2020
|
|
2019
|
|
2018
|
||||||
Foreign currency (losses) gains, net
|
|
$
|
(56
|
)
|
|
$
|
(5,519
|
)
|
|
$
|
6,760
|
|
Gains (losses) on derivative financial instruments, net
|
|
599
|
|
|
2,511
|
|
|
(17
|
)
|
|||
Other, net
|
|
(338
|
)
|
|
(898
|
)
|
|
(841
|
)
|
|||
Total other income (expense), net
|
|
$
|
205
|
|
|
$
|
(3,906
|
)
|
|
$
|
5,902
|
|
|
|
Year Ended January 31,
|
||||||||||
(in thousands)
|
|
2020
|
|
2019
|
|
2018
|
||||||
Cash paid for interest
|
|
$
|
23,232
|
|
|
$
|
22,258
|
|
|
$
|
24,402
|
|
Cash payments of income taxes, net
|
|
$
|
15,391
|
|
|
$
|
26,887
|
|
|
$
|
23,450
|
|
Non-cash investing and financing transactions:
|
|
|
|
|
|
|
|
|||||
Liabilities for contingent consideration in business combinations
|
|
$
|
15,253
|
|
|
$
|
15,944
|
|
|
$
|
27,605
|
|
Finance leases of property and equipment
|
|
$
|
6,404
|
|
|
$
|
1,137
|
|
|
$
|
4,350
|
|
Accrued but unpaid purchases of property and equipment
|
|
$
|
4,362
|
|
|
$
|
3,376
|
|
|
$
|
2,367
|
|
Accrued but unpaid purchases of treasury stock
|
|
$
|
2,846
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Leasehold improvements funded by lease incentives
|
|
$
|
2,604
|
|
|
$
|
1,397
|
|
|
$
|
—
|
|
Inventory transfers to property and equipment
|
|
$
|
825
|
|
|
$
|
1,699
|
|
|
$
|
437
|
|
Contingent receivable in exchange for sale of subsidiary
|
|
$
|
738
|
|
|
$
|
—
|
|
|
$
|
—
|
|
9.
|
STOCKHOLDERS’ EQUITY
|
(in thousands)
|
|
Unrealized Gains (Losses) on Derivative Financial Instruments 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 before reclassifications
|
|
(8,083
|
)
|
|
(3,043
|
)
|
|
(34,429
|
)
|
|
(45,555
|
)
|
||||
Amounts reclassified out of accumulated other comprehensive income (loss)
|
|
(3,790
|
)
|
|
—
|
|
|
—
|
|
|
(3,790
|
)
|
||||
Net other comprehensive loss
|
|
(4,293
|
)
|
|
(3,043
|
)
|
|
(34,429
|
)
|
|
(41,765
|
)
|
||||
Accumulated other comprehensive loss at January 31, 2019
|
|
(981
|
)
|
|
(3,043
|
)
|
|
(141,201
|
)
|
|
(145,225
|
)
|
||||
Other comprehensive income (loss) before reclassifications
|
|
2,015
|
|
|
(8,102
|
)
|
|
(762
|
)
|
|
(6,849
|
)
|
||||
Amounts reclassified out of accumulated other comprehensive loss
|
|
408
|
|
|
(617
|
)
|
|
—
|
|
|
(209
|
)
|
||||
Net other comprehensive income (loss)
|
|
1,607
|
|
|
(7,485
|
)
|
|
(762
|
)
|
|
(6,640
|
)
|
||||
Accumulated other comprehensive income (loss) at January 31, 2020
|
|
$
|
626
|
|
|
$
|
(10,528
|
)
|
|
$
|
(141,963
|
)
|
|
$
|
(151,865
|
)
|
|
|
Year Ended January 31,
|
|
Financial Statement Location
|
||||||||||
(in thousands)
|
|
2020
|
|
2019
|
|
2018
|
|
|||||||
Unrealized gains (losses) on derivative financial instruments:
|
|
|
|
|
|
|
|
|
||||||
Foreign currency forward contracts
|
|
$
|
11
|
|
|
$
|
(350
|
)
|
|
$
|
621
|
|
|
Cost of product revenue
|
|
|
64
|
|
|
(388
|
)
|
|
599
|
|
|
Cost of service and support revenue
|
|||
|
|
250
|
|
|
(2,138
|
)
|
|
3,577
|
|
|
Research and development, net
|
|||
|
|
128
|
|
|
(1,343
|
)
|
|
2,016
|
|
|
Selling, general and administrative
|
|||
|
|
453
|
|
|
(4,219
|
)
|
|
6,813
|
|
|
Total, before income taxes
|
|||
|
|
(45
|
)
|
|
429
|
|
|
(683
|
)
|
|
(Provision) benefit for income taxes
|
|||
|
|
$
|
408
|
|
|
$
|
(3,790
|
)
|
|
$
|
6,130
|
|
|
Total, net of income taxes
|
|
|
|
|
|
|
|
|
|
||||||
Interest rate swap agreement
|
|
$
|
(792
|
)
|
|
$
|
—
|
|
|
$
|
(254
|
)
|
|
Interest expense
|
|
|
—
|
|
|
—
|
|
|
934
|
|
|
Other income (expense), net
|
|||
|
|
(792
|
)
|
|
—
|
|
|
680
|
|
|
Total, before income taxes
|
|||
|
|
175
|
|
|
—
|
|
|
(389
|
)
|
|
Benefit (provision) for income taxes
|
|||
|
|
$
|
(617
|
)
|
|
$
|
—
|
|
|
$
|
291
|
|
|
Total, net of income taxes
|
|
|
Year Ended January 31,
|
||||||||||
(in thousands)
|
|
2020
|
|
2019
|
|
2018
|
||||||
Capitalized software development costs, net, beginning of year
|
|
$
|
13,342
|
|
|
$
|
9,228
|
|
|
$
|
9,509
|
|
Software development costs capitalized during the year
|
|
17,222
|
|
|
7,320
|
|
|
3,126
|
|
|||
Amortization of capitalized software development costs
|
|
(3,561
|
)
|
|
(3,101
|
)
|
|
(3,338
|
)
|
|||
Foreign currency translation and other
|
|
27
|
|
|
(105
|
)
|
|
(69
|
)
|
|||
Capitalized software development costs, net, end of year
|
|
$
|
27,030
|
|
|
$
|
13,342
|
|
|
$
|
9,228
|
|
11.
|
INCOME TAXES
|
|
|
Year Ended January 31,
|
||||||||||
(in thousands)
|
|
2020
|
|
2019
|
|
2018
|
||||||
Domestic
|
|
$
|
(49,703
|
)
|
|
$
|
(12,927
|
)
|
|
$
|
(44,502
|
)
|
Foreign
|
|
103,006
|
|
|
90,689
|
|
|
63,402
|
|
|||
Total income before provision for income taxes
|
|
$
|
53,303
|
|
|
$
|
77,762
|
|
|
$
|
18,900
|
|
|
|
Year Ended January 31,
|
||||||||||
(in thousands)
|
|
2020
|
|
2019
|
|
2018
|
||||||
Current provision (benefit) for income taxes:
|
|
|
|
|
|
|
||||||
Federal
|
|
$
|
8,683
|
|
|
$
|
(1,582
|
)
|
|
$
|
4,364
|
|
State
|
|
1,033
|
|
|
2,299
|
|
|
1,215
|
|
|||
Foreign
|
|
5,759
|
|
|
9,842
|
|
|
24,308
|
|
|||
Total current provision for income taxes
|
|
15,475
|
|
|
10,559
|
|
|
29,887
|
|
|||
Deferred provision (benefit) for income taxes:
|
|
|
|
|
|
|
||||||
Federal
|
|
(4,096
|
)
|
|
(4,099
|
)
|
|
4,734
|
|
|||
State
|
|
948
|
|
|
(2,687
|
)
|
|
(58
|
)
|
|||
Foreign
|
|
5,293
|
|
|
3,769
|
|
|
(12,209
|
)
|
|||
Total deferred provision (benefit) for income taxes
|
|
2,145
|
|
|
(3,017
|
)
|
|
(7,533
|
)
|
|||
Total provision for income taxes
|
|
$
|
17,620
|
|
|
$
|
7,542
|
|
|
$
|
22,354
|
|
|
|
Year Ended January 31,
|
||||||||||
(in thousands)
|
|
2020
|
|
2019
|
|
2018
|
||||||
U.S. federal statutory income tax rate
|
|
21.0
|
%
|
|
21.0
|
%
|
|
33.8
|
%
|
|||
|
|
|
|
|
|
|
||||||
Income tax provision at the U.S. federal statutory rate
|
|
$
|
11,193
|
|
|
$
|
16,330
|
|
|
$
|
6,394
|
|
State income tax provision
|
|
230
|
|
|
3,968
|
|
|
1,792
|
|
|||
Foreign tax rate differential
|
|
11,700
|
|
|
9,516
|
|
|
(9,434
|
)
|
|||
Tax incentives
|
|
(8,395
|
)
|
|
(7,377
|
)
|
|
(3,891
|
)
|
|||
Valuation allowances
|
|
1,607
|
|
|
(24,099
|
)
|
|
14,539
|
|
|||
Stock-based and other compensation
|
|
(2,143
|
)
|
|
678
|
|
|
(8,656
|
)
|
|||
Non-deductible expenses
|
|
2,752
|
|
|
(412
|
)
|
|
(2,091
|
)
|
|||
Tax contingencies
|
|
(11,550
|
)
|
|
(3,035
|
)
|
|
5,017
|
|
|||
U.S. tax effects of foreign operations
|
|
11,963
|
|
|
11,559
|
|
|
8,591
|
|
|||
Impact of the 2017 Tax Act
|
|
—
|
|
|
—
|
|
|
9,641
|
|
|||
Other, net
|
|
263
|
|
|
414
|
|
|
452
|
|
|||
Total provision for income taxes
|
|
$
|
17,620
|
|
|
$
|
7,542
|
|
|
$
|
22,354
|
|
Effective income tax rate
|
|
33.1
|
%
|
|
9.7
|
%
|
|
118.3
|
%
|
|
|
January 31,
|
||||||
(in thousands)
|
|
2020
|
|
2019
|
||||
Deferred tax assets:
|
|
|
|
|
||||
Accrued expenses
|
|
$
|
3,979
|
|
|
$
|
9,510
|
|
Operating lease liabilities
|
|
15,716
|
|
|
—
|
|
||
Fair value of derivatives
|
|
3,332
|
|
|
—
|
|
||
Loss carryforwards
|
|
30,063
|
|
|
25,451
|
|
||
Tax credits
|
|
7,021
|
|
|
9,239
|
|
||
Stock-based and other compensation
|
|
14,087
|
|
|
14,646
|
|
||
Capitalized research and development expenses
|
|
18
|
|
|
8,178
|
|
||
Total deferred tax assets
|
|
74,216
|
|
|
67,024
|
|
||
Deferred tax liabilities:
|
|
|
|
|
||||
Deferred cost of revenue
|
|
(7,588
|
)
|
|
(8,173
|
)
|
||
Goodwill and other intangible assets
|
|
(36,989
|
)
|
|
(41,781
|
)
|
||
Unremitted earnings of foreign subsidiaries
|
|
(12,257
|
)
|
|
(12,257
|
)
|
||
Operating lease right-of-use assets
|
|
(12,401
|
)
|
|
—
|
|
||
Other, net
|
|
(4,674
|
)
|
|
(2,418
|
)
|
||
Total deferred tax liabilities
|
|
(73,909
|
)
|
|
(64,629
|
)
|
||
Valuation allowance
|
|
(26,334
|
)
|
|
(24,526
|
)
|
||
Net deferred tax liabilities
|
|
$
|
(26,027
|
)
|
|
$
|
(22,131
|
)
|
|
|
|
|
|
||||
Recorded as:
|
|
|
|
|
||||
Deferred tax assets
|
|
$
|
13,802
|
|
|
$
|
21,040
|
|
Deferred tax liabilities
|
|
(39,829
|
)
|
|
(43,171
|
)
|
||
Net deferred tax liabilities
|
|
$
|
(26,027
|
)
|
|
$
|
(22,131
|
)
|
|
|
Year Ended January 31,
|
||||||
(in thousands)
|
|
2020
|
|
2019
|
||||
Valuation allowance, beginning of year
|
|
$
|
(24,526
|
)
|
|
$
|
(55,116
|
)
|
Income tax benefit (provision)
|
|
(1,607
|
)
|
|
24,099
|
|
||
Adoption of ASU No. 2014-09
|
|
—
|
|
|
5,763
|
|
||
Business combinations
|
|
—
|
|
|
124
|
|
||
Currency translation adjustment and other
|
|
(201
|
)
|
|
604
|
|
||
Valuation allowance, end of year
|
|
$
|
(26,334
|
)
|
|
$
|
(24,526
|
)
|
|
|
Year Ended January 31,
|
||||||||||
(in thousands)
|
|
2020
|
|
2019
|
|
2018
|
||||||
Gross unrecognized tax benefits, beginning of year
|
|
$
|
109,066
|
|
|
$
|
115,709
|
|
|
$
|
148,639
|
|
Increases related to tax positions taken during the current year
|
|
2,464
|
|
|
8,843
|
|
|
12,260
|
|
|||
Increases as a result of business combinations
|
|
286
|
|
|
1,032
|
|
|
43
|
|
|||
Increases related to tax positions taken during prior years
|
|
147
|
|
|
10,305
|
|
|
9,226
|
|
|||
Increases (decreases) related to foreign currency exchange rates
|
|
1,373
|
|
|
(2,253
|
)
|
|
2,449
|
|
|||
Reductions for tax positions of prior years
|
|
(17,388
|
)
|
|
(23,415
|
)
|
|
(8,266
|
)
|
|||
Reductions for settlements with tax authorities
|
|
(4,370
|
)
|
|
(1,054
|
)
|
|
(140
|
)
|
|||
Reduction for rate change due to the 2017 Tax Act
|
|
—
|
|
|
—
|
|
|
(48,004
|
)
|
|||
Lapses of statutes of limitations
|
|
(299
|
)
|
|
(101
|
)
|
|
(498
|
)
|
|||
Gross unrecognized tax benefits, end of year
|
|
$
|
91,279
|
|
|
$
|
109,066
|
|
|
$
|
115,709
|
|
Jurisdiction
|
|
Tax Years
|
United Kingdom
|
|
December 31, 2006, January 31, 2008, January 31, 2018
|
India
|
|
March 31, 2007, March 31, 2008, March 31, 2010 - March 31, 2013, March 31, 2017
|
12.
|
FAIR VALUE MEASUREMENTS
|
|
|
January 31, 2020
|
||||||||||
|
|
Fair Value Hierarchy Category
|
||||||||||
(in thousands)
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
||||||
Assets:
|
|
|
|
|
|
|
|
|
|
|||
Money market funds
|
|
$
|
89
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Foreign currency forward contracts
|
|
—
|
|
|
812
|
|
|
—
|
|
|||
Contingent consideration receivable
|
|
—
|
|
|
—
|
|
|
738
|
|
|||
Total assets
|
|
$
|
89
|
|
|
$
|
812
|
|
|
$
|
738
|
|
Liabilities:
|
|
|
|
|
|
|
|
|
|
|||
Foreign currency forward contracts
|
|
$
|
—
|
|
|
$
|
132
|
|
|
$
|
—
|
|
Interest rate swap agreement
|
|
—
|
|
|
13,501
|
|
|
—
|
|
|||
Contingent consideration - business combinations
|
|
—
|
|
|
—
|
|
|
42,875
|
|
|||
Option to acquire noncontrolling interests of consolidated subsidiaries
|
|
—
|
|
|
—
|
|
|
2,900
|
|
|||
Total liabilities
|
|
$
|
—
|
|
|
$
|
13,633
|
|
|
$
|
45,775
|
|
|
|
January 31, 2019
|
||||||||||
|
|
Fair Value Hierarchy Category
|
||||||||||
(in thousands)
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
||||||
Assets:
|
|
|
|
|
|
|
|
|
|
|||
Money market funds
|
|
$
|
10,709
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Foreign currency forward contracts
|
|
—
|
|
|
1,401
|
|
|
—
|
|
|||
Interest rate swap agreement
|
|
—
|
|
|
2,072
|
|
|
—
|
|
|||
Total assets
|
|
$
|
10,709
|
|
|
$
|
3,473
|
|
|
$
|
—
|
|
Liabilities:
|
|
|
|
|
|
|
|
|
|
|||
Foreign currency forward contracts
|
|
$
|
—
|
|
|
$
|
2,086
|
|
|
$
|
—
|
|
Interest rate swap agreements
|
|
—
|
|
|
4,028
|
|
|
—
|
|
|||
Contingent consideration - business combinations
|
|
—
|
|
|
—
|
|
|
61,340
|
|
|||
Option to acquire noncontrolling interests of consolidated subsidiaries
|
|
—
|
|
|
—
|
|
|
3,000
|
|
|||
Total liabilities
|
|
$
|
—
|
|
|
$
|
6,114
|
|
|
$
|
64,340
|
|
|
|
Year Ended January 31,
|
||||||
(in thousands)
|
|
2020
|
|
2019
|
||||
Fair value measurement, beginning of year
|
|
$
|
61,340
|
|
|
$
|
62,829
|
|
Contingent consideration liabilities recorded for business combinations
|
|
15,253
|
|
|
15,944
|
|
||
Changes in fair values, recorded in operating expenses
|
|
(531
|
)
|
|
(3,561
|
)
|
||
Payments of contingent consideration
|
|
(33,088
|
)
|
|
(13,600
|
)
|
||
Foreign currency translation and other
|
|
(99
|
)
|
|
(272
|
)
|
||
Fair value measurement, end of year
|
|
$
|
42,875
|
|
|
$
|
61,340
|
|
|
|
Year Ended January 31,
|
||||||
(in thousands)
|
|
2020
|
|
2019
|
||||
Fair value measurement, beginning of year
|
|
$
|
3,000
|
|
|
$
|
2,950
|
|
Change in fair value, recorded in operating expenses
|
|
(100
|
)
|
|
50
|
|
||
Fair value measurement, end of year
|
|
$
|
2,900
|
|
|
$
|
3,000
|
|
|
|
|
|
January 31,
|
||||||
(in thousands)
|
|
Balance Sheet Classification
|
|
2020
|
|
2019
|
||||
Derivative assets:
|
|
|
|
|
|
|
||||
Foreign currency forward contracts:
|
|
|
|
|
|
|
||||
Designated as cash flow hedges
|
|
Prepaid expenses and other current assets
|
|
$
|
710
|
|
|
$
|
738
|
|
Not designated as hedging instruments
|
|
Prepaid expenses and other current assets
|
|
102
|
|
|
663
|
|
||
Interest rate swap agreements:
|
|
|
|
|
|
|
||||
Not designated as a hedging instrument
|
|
Prepaid expenses and other current assets
|
|
—
|
|
|
2,072
|
|
||
Total derivative assets
|
|
|
|
$
|
812
|
|
|
$
|
3,473
|
|
|
|
|
|
|
|
|
||||
Derivative liabilities:
|
|
|
|
|
|
|
||||
Foreign currency forward contracts:
|
|
|
|
|
|
|
||||
Designated as cash flow hedges
|
|
Accrued expenses and other current liabilities
|
|
$
|
16
|
|
|
$
|
1,830
|
|
Not designated as hedging instruments
|
|
Accrued expenses and other current liabilities
|
|
116
|
|
|
256
|
|
||
Interest rate swap agreements:
|
|
|
|
|
|
|
||||
Designated as a cash flow hedge
|
|
Accrued expenses and other current liabilities
|
|
2,060
|
|
|
122
|
|
||
Designated as a cash flow hedge
|
|
Other liabilities
|
|
11,441
|
|
|
3,906
|
|
||
Total derivative liabilities
|
|
|
|
$
|
13,633
|
|
|
$
|
6,114
|
|
|
|
Year Ended January 31,
|
||||||||||
(in thousands)
|
|
2020
|
|
2019
|
|
2018
|
||||||
Net (losses) gains recognized in AOCL:
|
|
|
|
|
|
|
||||||
Foreign currency forward contracts
|
|
$
|
2,239
|
|
|
$
|
(981
|
)
|
|
$
|
3,312
|
|
Interest rate swap agreement
|
|
(10,265
|
)
|
|
(3,043
|
)
|
|
(341
|
)
|
|||
|
|
$
|
(8,026
|
)
|
|
$
|
(4,024
|
)
|
|
$
|
2,971
|
|
Net (losses) gains reclassified from AOCL to the consolidated statements of operations:
|
|
|
|
|
|
|
||||||
Foreign currency forward contracts
|
|
$
|
453
|
|
|
$
|
(4,219
|
)
|
|
$
|
6,813
|
|
Interest rate swap agreement
|
|
(792
|
)
|
|
—
|
|
|
(254
|
)
|
|||
|
|
$
|
(339
|
)
|
|
$
|
(4,219
|
)
|
|
$
|
6,559
|
|
|
|
Classification in Consolidated Statements of Operations
|
|
Year Ended January 31,
|
||||||||||
(in thousands)
|
|
|
2020
|
|
2019
|
|
2018
|
|||||||
Foreign currency forward contracts
|
|
Other income (expense), net
|
|
$
|
647
|
|
|
$
|
1,891
|
|
|
$
|
(2,546
|
)
|
Interest rate swap agreements
|
|
Other income (expense), net
|
|
(48
|
)
|
|
620
|
|
|
$
|
2,529
|
|
||
|
|
|
|
$
|
599
|
|
|
$
|
2,511
|
|
|
$
|
(17
|
)
|
|
|
Year Ended January 31,
|
||||||||||
(in thousands)
|
|
2020
|
|
2019
|
|
2018
|
||||||
Component of income (loss) before (benefit) provision for income taxes:
|
|
|
|
|
|
|
||||||
Cost of revenue - product
|
|
$
|
2,014
|
|
|
$
|
1,309
|
|
|
$
|
1,561
|
|
Cost of revenue - service and support
|
|
6,170
|
|
|
4,426
|
|
|
6,904
|
|
|||
Research and development, net
|
|
13,426
|
|
|
9,870
|
|
|
13,144
|
|
|||
Selling, general and administrative
|
|
61,088
|
|
|
51,052
|
|
|
47,757
|
|
|||
Total stock-based compensation expense
|
|
82,698
|
|
|
66,657
|
|
|
69,366
|
|
|||
Income tax benefits related to stock-based compensation (before consideration of valuation allowances)
|
|
12,651
|
|
|
10,377
|
|
|
16,504
|
|
|||
Total stock-based compensation, net of taxes
|
|
$
|
70,047
|
|
|
$
|
56,280
|
|
|
$
|
52,862
|
|
|
|
Year Ended January 31,
|
||||||||||
(in thousands)
|
|
2020
|
|
2019
|
|
2018
|
||||||
Restricted stock units and restricted stock awards
|
|
$
|
65,080
|
|
|
$
|
57,639
|
|
|
$
|
57,188
|
|
Stock bonus program and bonus share program
|
|
17,543
|
|
|
8,943
|
|
|
12,108
|
|
|||
Total equity-settled awards
|
|
82,623
|
|
|
66,582
|
|
|
69,296
|
|
|||
Phantom stock units (cash-settled awards)
|
|
75
|
|
|
75
|
|
|
70
|
|
|||
Total stock-based compensation expense
|
|
$
|
82,698
|
|
|
$
|
66,657
|
|
|
$
|
69,366
|
|
|
|
Year Ended January 31,
|
|||||||||||||||||||
|
|
2020
|
|
2019
|
|
2018
|
|||||||||||||||
(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
|
|
2,777
|
|
|
$
|
41.05
|
|
|
2,808
|
|
|
$
|
41.18
|
|
|
2,742
|
|
|
$
|
45.20
|
|
Granted
|
|
1,620
|
|
|
$
|
60.42
|
|
|
1,708
|
|
|
$
|
43.03
|
|
|
1,804
|
|
|
$
|
40.19
|
|
Released
|
|
(1,435
|
)
|
|
$
|
40.59
|
|
|
(1,481
|
)
|
|
$
|
43.67
|
|
|
(1,403
|
)
|
|
$
|
45.96
|
|
Forfeited
|
|
(226
|
)
|
|
$
|
45.57
|
|
|
(258
|
)
|
|
$
|
41.07
|
|
|
(335
|
)
|
|
$
|
48.92
|
|
Ending balance
|
|
2,736
|
|
|
$
|
52.53
|
|
|
2,777
|
|
|
$
|
41.05
|
|
|
2,808
|
|
|
$
|
41.18
|
|
|
|
Year Ended January 31,
|
|||||||
(in thousands)
|
|
2020
|
|
2019
|
|
2018
|
|||
Beginning balance
|
|
512
|
|
|
506
|
|
|
438
|
|
Granted
|
|
291
|
|
|
228
|
|
|
204
|
|
Released
|
|
(245
|
)
|
|
(139
|
)
|
|
(50
|
)
|
Forfeited
|
|
(32
|
)
|
|
(83
|
)
|
|
(86
|
)
|
Ending balance
|
|
526
|
|
|
512
|
|
|
506
|
|
|
|
Year Ended January 31,
|
|||||||
(in thousands)
|
|
2020
|
|
2019
|
|
2018
|
|||
Shares in lieu of cash bonus - granted and released (not included in the Award Activity Table above)
|
|
97
|
|
|
19
|
|
|
21
|
|
Shares in respect of discount (included in the Award Activity Table above):
|
|
|
|
|
|
|
|||
Granted
|
|
16
|
|
|
—
|
|
|
—
|
|
Released
|
|
13
|
|
|
—
|
|
|
—
|
|
(in thousands)
|
|
Year Ended
January 31, 2020 |
||
Operating lease expenses
|
|
$
|
29,898
|
|
Finance lease expenses:
|
|
|
||
Amortization of right-of-use assets
|
|
581
|
|
|
Interest on lease liabilities
|
|
226
|
|
|
Total finance lease expenses
|
|
807
|
|
|
Variable lease expenses
|
|
8,233
|
|
|
Short-term lease expenses
|
|
860
|
|
|
Sublease income
|
|
(908
|
)
|
|
Total lease expenses
|
|
$
|
38,890
|
|
(dollars in thousands)
|
|
Year Ended
January 31, 2020 |
||
Supplemental cash flow information
|
|
|
||
Cash paid for amounts included in the measurement of lease liabilities:
|
|
|
||
Operating cash flows from operating leases
|
|
$
|
27,599
|
|
Operating cash flows from finance leases
|
|
226
|
|
|
Financing cash flows from finance leases
|
|
2,522
|
|
|
Right-of-use assets obtained in exchange for lease obligations:
|
|
|
||
Operating leases
|
|
$
|
22,472
|
|
Finance leases
|
|
6,405
|
|
|
Weighted average remaining lease terms
|
|
|
||
Operating leases
|
|
6 years
|
|
|
Finance leases
|
|
4 years
|
|
|
Weighted average discount rates
|
|
|
||
Operating leases
|
|
6.0
|
%
|
|
Finance leases
|
|
5.2
|
%
|
|
|
January 31, 2020
|
||||||
(in thousands)
|
|
Operating Leases
|
|
Finance Leases
|
||||
Year Ending January 31,
|
|
|
|
|
||||
2021
|
|
$
|
28,675
|
|
|
$
|
3,195
|
|
2022
|
|
23,275
|
|
|
3,110
|
|
||
2023
|
|
20,014
|
|
|
2,474
|
|
||
2024
|
|
18,313
|
|
|
1,250
|
|
||
2025
|
|
16,405
|
|
|
776
|
|
||
Thereafter
|
|
27,524
|
|
|
—
|
|
||
Total future minimum lease payments
|
|
134,206
|
|
|
10,805
|
|
||
Less: imputed interest
|
|
(21,179
|
)
|
|
(888
|
)
|
||
Total
|
|
$
|
113,027
|
|
|
$
|
9,917
|
|
|
|
|
|
|
||||
Reported as of January 31, 2020:
|
|
|
|
|
||||
Accrued expenses and other current liabilities
|
|
$
|
22,655
|
|
|
$
|
2,707
|
|
Operating lease liabilities
|
|
90,372
|
|
|
—
|
|
||
Other liabilities
|
|
—
|
|
|
7,210
|
|
||
Total
|
|
$
|
113,027
|
|
|
$
|
9,917
|
|
(in thousands)
|
|
Operating
|
|
Capital
|
||||
Years Ending January 31,
|
|
Leases
|
|
Leases
|
||||
2020
|
|
$
|
22,769
|
|
|
$
|
1,343
|
|
2021
|
|
21,942
|
|
|
1,252
|
|
||
2022
|
|
19,157
|
|
|
1,130
|
|
||
2023
|
|
16,882
|
|
|
765
|
|
||
2024
|
|
15,152
|
|
|
107
|
|
||
Thereafter
|
|
33,477
|
|
|
—
|
|
||
Total
|
|
$
|
129,379
|
|
|
4,597
|
|
|
Less: amount representing interest and other charges
|
|
|
|
(315
|
)
|
|||
Present value of minimum lease payments
|
|
|
|
$
|
4,282
|
|
|
|
Year Ended January 31,
|
||||||||||
(in thousands)
|
|
2020
|
|
2019
|
|
2018
|
||||||
Revenue:
|
|
|
|
|
|
|
|
|
||||
Customer Engagement:
|
|
|
|
|
|
|
|
|
||||
Segment revenue
|
|
$
|
873,200
|
|
|
$
|
811,346
|
|
|
$
|
755,038
|
|
Revenue adjustments
|
|
(26,675
|
)
|
|
(15,059
|
)
|
|
(14,971
|
)
|
|||
|
|
846,525
|
|
|
796,287
|
|
|
740,067
|
|
|||
Cyber Intelligence:
|
|
|
|
|
|
|
|
|
||||
Segment revenue
|
|
462,817
|
|
|
433,753
|
|
|
395,420
|
|
|||
Revenue adjustments
|
|
(5,708
|
)
|
|
(293
|
)
|
|
(258
|
)
|
|||
|
|
457,109
|
|
|
433,460
|
|
|
395,162
|
|
|||
Total revenue
|
|
$
|
1,303,634
|
|
|
$
|
1,229,747
|
|
|
$
|
1,135,229
|
|
|
|
|
|
|
|
|
||||||
Segment contribution:
|
|
|
|
|
|
|
|
|
||||
Customer Engagement
|
|
$
|
338,098
|
|
|
$
|
316,776
|
|
|
$
|
286,236
|
|
Cyber Intelligence
|
|
130,519
|
|
|
114,012
|
|
|
94,585
|
|
|||
Total segment contribution
|
|
468,617
|
|
|
430,788
|
|
|
380,821
|
|
|||
|
|
|
|
|
|
|
||||||
Reconciliation of segment contribution to operating income:
|
|
|
|
|
|
|
|
|
||||
Revenue adjustments
|
|
32,383
|
|
|
15,352
|
|
|
15,229
|
|
|||
Shared support expenses
|
|
177,308
|
|
|
163,893
|
|
|
154,673
|
|
|||
Amortization of acquired intangible assets
|
|
55,442
|
|
|
56,413
|
|
|
72,425
|
|
|||
Stock-based compensation
|
|
82,698
|
|
|
66,657
|
|
|
69,366
|
|
|||
Acquisition, integration, restructuring, and other unallocated expenses
|
|
32,930
|
|
|
14,238
|
|
|
20,498
|
|
|||
Total reconciling items, net
|
|
380,761
|
|
|
316,553
|
|
|
332,191
|
|
|||
Operating income
|
|
$
|
87,856
|
|
|
$
|
114,235
|
|
|
$
|
48,630
|
|
|
|
Year Ended January 31,
|
||||||||||
(in thousands)
|
|
2020
|
|
2019
|
|
2018
|
||||||
Americas:
|
|
|
|
|
|
|
||||||
United States
|
|
$
|
590,602
|
|
|
$
|
555,365
|
|
|
$
|
445,406
|
|
Other
|
|
93,302
|
|
|
103,158
|
|
|
150,993
|
|
|||
Total Americas
|
|
683,904
|
|
|
658,523
|
|
|
596,399
|
|
|||
EMEA
|
|
374,721
|
|
|
321,723
|
|
|
354,495
|
|
|||
APAC
|
|
245,009
|
|
|
249,501
|
|
|
184,335
|
|
|||
Total revenue
|
|
$
|
1,303,634
|
|
|
$
|
1,229,747
|
|
|
$
|
1,135,229
|
|
|
|
January 31,
|
||||||
(in thousands)
|
|
2020
|
|
2019
|
||||
United States
|
|
$
|
61,096
|
|
|
$
|
51,006
|
|
Israel
|
|
33,316
|
|
|
30,310
|
|
||
Other countries
|
|
21,699
|
|
|
18,818
|
|
||
Total property and equipment, net
|
|
$
|
116,111
|
|
|
$
|
100,134
|
|
|
|
Three Months Ended
|
||||||||||||||
|
|
April 30,
|
|
July 31,
|
|
October 31,
|
|
January 31,
|
||||||||
(in thousands, except per share data)
|
|
2019
|
|
2019
|
|
2019
|
|
2020
|
||||||||
Revenue
|
|
$
|
315,259
|
|
|
$
|
324,305
|
|
|
$
|
324,867
|
|
|
$
|
339,203
|
|
Gross profit
|
|
$
|
201,071
|
|
|
$
|
207,864
|
|
|
$
|
211,595
|
|
|
$
|
219,338
|
|
Income before provision for income taxes
|
|
$
|
5,170
|
|
|
$
|
7,764
|
|
|
$
|
22,201
|
|
|
$
|
18,168
|
|
Net income
|
|
$
|
3,761
|
|
|
$
|
12,271
|
|
|
$
|
12,983
|
|
|
$
|
6,668
|
|
Net income attributable to Verint Systems Inc.
|
|
$
|
1,576
|
|
|
$
|
10,558
|
|
|
$
|
11,681
|
|
|
$
|
4,869
|
|
|
|
|
|
|
|
|
|
|
||||||||
Net income per common share attributable to Verint Systems Inc.
|
|
|
|
|
|
|
|
|
||||||||
Basic
|
|
$
|
0.02
|
|
|
$
|
0.16
|
|
|
$
|
0.17
|
|
|
$
|
0.07
|
|
Diluted
|
|
$
|
0.02
|
|
|
$
|
0.16
|
|
|
$
|
0.17
|
|
|
$
|
0.07
|
|
|
|
Three Months Ended
|
||||||||||||||
|
|
April 30,
|
|
July 31,
|
|
October 31,
|
|
January 31,
|
||||||||
(in thousands, except per share data)
|
|
2018
|
|
2018
|
|
2018
|
|
2019
|
||||||||
Revenue
|
|
$
|
289,207
|
|
|
$
|
306,327
|
|
|
$
|
303,983
|
|
|
$
|
330,230
|
|
Gross profit
|
|
$
|
175,115
|
|
|
$
|
193,020
|
|
|
$
|
192,744
|
|
|
$
|
219,655
|
|
(Loss) income before provision (benefit) for income taxes
|
|
$
|
(951
|
)
|
|
$
|
19,202
|
|
|
$
|
25,814
|
|
|
$
|
33,697
|
|
Net (loss) income
|
|
$
|
(1,225
|
)
|
|
$
|
22,924
|
|
|
$
|
20,213
|
|
|
$
|
28,308
|
|
Net (loss) income attributable to Verint Systems Inc.
|
|
$
|
(2,215
|
)
|
|
$
|
21,980
|
|
|
$
|
18,920
|
|
|
$
|
27,306
|
|
|
|
|
|
|
|
|
|
|
||||||||
Net (loss) income per common share attributable to Verint Systems Inc.
|
|
|
|
|
|
|
|
|
||||||||
Basic
|
|
$
|
(0.03
|
)
|
|
$
|
0.34
|
|
|
$
|
0.29
|
|
|
$
|
0.42
|
|
Diluted
|
|
$
|
(0.03
|
)
|
|
$
|
0.33
|
|
|
$
|
0.29
|
|
|
$
|
0.41
|
|
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
|
|
2,742,666
|
|
(2)
|
$
|
8.71
|
|
|
11,497,637
|
|
(3)
|
Equity compensation plans not approved by security holders
|
|
—
|
|
|
|
|
—
|
|
|
||
|
|
|
|
|
|
|
|
||||
Total
|
|
2,742,666
|
|
|
|
|
11,497,637
|
|
|
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 31, 2020
|
/s/ Dan Bodner
|
|
Dan Bodner
|
|
Chief Executive Officer
|
|
|
March 31, 2020
|
/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 31, 2020
|
Dan Bodner
|
|
(Principal Executive Officer)
|
|
|
|
|
|
|
|
/s/ Douglas E. Robinson
|
|
Chief Financial Officer
|
|
March 31, 2020
|
Douglas E. Robinson
|
|
(Principal Financial Officer and Principal Accounting Officer)
|
|
|
|
|
|
|
|
/s/ John R. Egan
|
|
Director
|
|
March 31, 2020
|
John R. Egan
|
|
|
|
|
|
|
|
|
|
/s/ Stephen J. Gold
|
|
Director
|
|
March 31, 2020
|
Stephen J. Gold
|
|
|
|
|
|
|
|
|
|
/s/ Penelope Herscher
|
|
Director
|
|
March 31, 2020
|
Penelope Herscher
|
|
|
|
|
|
|
|
|
|
/s/ William H. Kurtz
|
|
Director
|
|
March 31, 2020
|
William H. Kurtz
|
|
|
|
|
|
|
|
|
|
/s/ Andrew Miller
|
|
Director
|
|
March 31, 2020
|
Andrew Miller
|
|
|
|
|
|
|
|
|
|
/s/ Richard Nottenburg
|
|
Director
|
|
March 31, 2020
|
Richard Nottenburg
|
|
|
|
|
|
|
|
|
|
/s/ Howard Safir
|
|
Director
|
|
March 31, 2020
|
Howard Safir
|
|
|
|
|
|
|
|
|
|
/s/ Earl Shanks
|
|
Director
|
|
March 31, 2020
|
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 5th 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
|
(i)
|
the consummation of a Spin-Off, or
|
(ii)
|
any change in my role, duties or responsibilities that occurs solely as a result of the occurrence of a Spin-Off.
|
1
|
RESTRICTED STOCK UNITS; VESTING
|
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
|
COLLECTION, USE, AND SHARING OF PERSONAL DATA
|
15
|
GOVERNING PLAN DOCUMENT
|
Date of Separation Closing
|
% of Closing
Units to Vest
|
Vesting Date
|
On or before [ ]
|
100%
|
Date of Separation Closing
|
After [ ] but on or before [ ]
|
75%
|
Date of Separation Closing
|
Separation Closing has not occurred by [ ]
for any reason
|
50%
|
[ ]
|
•
|
In the event a Separation Closing has occurred on or before [ ], then 100% of the Transition Units will vest on the nine-month anniversary of the date of such Separation Closing.
|
•
|
In the event a Separation Closing has not occurred by [ ], then none of the Transition Units will vest, and such Transition Units shall be immediately forfeited for no consideration.
|
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
|
Deep Analytics Ltd.
|
|
Israel
|
Febrouin Investments Ltd.
|
|
Cyprus
|
Focal Info Israel Ltd.
|
|
Israel
|
ForeSee Results, Ltd.
|
|
United Kingdom
|
Foundation CV
|
|
Barbados
|
Gita Technologies Ltd.
|
|
Israel
|
Global Management Technologies, LLC
|
|
Delaware
|
Iontas Limited
|
|
Ireland
|
m-pathy GmbH
|
|
Germany
|
MultiVision Holdings Limited
|
|
British Virgin Islands
|
NowForce Limited
|
|
Israel
|
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
|
Transversal Corporation Limited
|
|
United Kingdom
|
Triniventures BV
|
|
Netherlands
|
UTX Technologies Limited
|
|
Cyprus
|
Verba Technologies Kft
|
|
Hungary
|
Verint Acquisition LLC
|
|
Delaware
|
Verint Americas Inc.
|
|
Delaware
|
Verint CES India Private Limited
|
|
India
|
Verint CES Ltd.
|
|
Israel
|
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
|
Verint Systems B.V.
|
|
The Netherlands
|
Verint Systems Canada Inc.
|
|
Canada
|
Verint Systems DOOEL Skopje
|
|
Macedonia
|
Verint Systems GmbH
|
|
Germany
|
Verint Systems (India) Private Ltd.
|
|
India
|
Verint Systems Japan K.K.
|
|
Japan
|
Name
|
|
Jurisdiction of Incorporation or Organization
|
Verint Systems Ltd.
|
|
Israel
|
Verint Systems New Zealand Limited
|
|
New Zealand
|
Verint Systems (Philippines) Corporation
|
|
Philippines
|
Verint Systems (PTY) Ltd.
|
|
South Africa
|
Verint Systems Romania S.R.L.
|
|
Romania
|
Verint Systems SAS
|
|
France
|
Verint Systems (Shanghai) Company Limited
|
|
People's Republic of China
|
Verint Systems (Singapore) Pte. Ltd. (2)
|
|
Singapore
|
Verint Systems SL
|
|
Spain
|
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 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
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Victory Acquisition I LLC
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Delaware
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Webintpro Ltd.
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Israel
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Witness Systems Software (India) Private Limited
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India
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X Subsidiary, Inc,
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Delaware
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Dated:
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March 31, 2020
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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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March 31, 2020
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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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March 31, 2020
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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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March 31, 2020
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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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