Verint Systems 2026 Q1 Earnings Net Income Declines 87.5%
Daily EarningsWednesday, Jun 4, 2025 11:04 pm ET
36min readVerint Systems (VRNT) reported its fiscal 2026 Q1 earnings on June 4, 2025, with revenue falling 6% to $208.10 million. Verint maintained its full-year revenue guidance of $960 million and adjusted EPS target of $2.93. Despite a challenging quarter, the company's projected ARR growth remains at 8% year-over-year, with free cash flow anticipated to rise by 12% to $145 million. The increased SaaS pipeline, up over 30% year-over-year, reflects strong demand for AI solutions. However, the company faced a net income decline of 87.5% compared to the previous year, highlighting ongoing financial pressures.
Revenue
Verint Systems reported a total revenue of $208.10 million for 2026 Q1, down from $221.28 million in the same quarter last year. Recurring revenue totaled $173.62 million, including $147.48 million from SaaS, with bundled and unbundled segments contributing $81.26 million and $66.23 million, respectively. Optional managed services added $5.01 million, while support revenue reached $21.13 million. Nonrecurring revenue was $34.47 million, comprising $17.02 million from perpetual sources and $17.45 million from professional services and other categories.
Earnings/Net Income
Verint Systems experienced a shift from a profit of $0.16 per share in 2025 Q1 to a loss of $0.04 per share in 2026 Q1, marking a 125.0% negative change. The company's net income fell to $1.93 million, an 87.5% drop from $15.38 million in the previous year. This performance indicates a challenging period for the company.
Price Action
Post Earnings Price Action Review
The strategy of purchasing Verint Systems shares following a quarter-over-quarter revenue drop on the earnings release date and holding them for 30 days proved ineffective. A backtest revealed a significant loss of 65.79% with an excess return of -104.20%. The compound annual growth rate stood at -30.29%, with a high maximum drawdown of -74.44%. Additionally, the Sharpe ratio was -0.70, reflecting the strategy's inability to yield positive returns or risk-adjusted benefits. This analysis underscores the need for investors to reconsider this approach, as it has consistently underperformed, failing to capitalize on any potential market rebounds or corrections.
CEO Commentary
Dan Bodner, Chairman of the Board & CEO, expressed optimism about Verint Systems' strong first quarter, emphasizing a 6% acceleration in ARR growth driven by AI and substantial large deals. He highlighted Verint's AI solutions' differentiation through quick deployments, enabling immediate value realization. Bodner projected an exit ARR growth of 8% for the year, underscoring the importance of proven AI outcomes and the hybrid cloud model's benefits.
Guidance
Verint Systems anticipates achieving approximately $720 million in ARR for Q2 and aims to conclude the fiscal year with around $768 million in ARR, reflecting 8% year-over-year growth. The company maintains its revenue guidance of $960 million, with non-GAAP diluted EPS targeted at $2.93. For the full year, free cash flow is expected to rise by 12% to $145 million, supported by an increase in the rolling SaaS pipeline of over 30% year-over-year, indicating robust demand for AI solutions.
Additional News
Verint Systems announced a significant expansion of its share buyback program, repurchasing approximately 2.5 million common shares in the first quarter of 2026. This move aligns with the company's strategy to utilize free cash flow primarily for stock buybacks, reflecting confidence in its financial position. Additionally, Verint secured a $13 million TCV order from an insurance company and a $14 million order from a healthcare company, underscoring its growing influence in AI-driven workflow automation. These developments highlight Verint's commitment to enhancing shareholder value and strengthening its market presence in customer experience automation.
Revenue
Verint Systems reported a total revenue of $208.10 million for 2026 Q1, down from $221.28 million in the same quarter last year. Recurring revenue totaled $173.62 million, including $147.48 million from SaaS, with bundled and unbundled segments contributing $81.26 million and $66.23 million, respectively. Optional managed services added $5.01 million, while support revenue reached $21.13 million. Nonrecurring revenue was $34.47 million, comprising $17.02 million from perpetual sources and $17.45 million from professional services and other categories.
Earnings/Net Income
Verint Systems experienced a shift from a profit of $0.16 per share in 2025 Q1 to a loss of $0.04 per share in 2026 Q1, marking a 125.0% negative change. The company's net income fell to $1.93 million, an 87.5% drop from $15.38 million in the previous year. This performance indicates a challenging period for the company.
Price Action
Post Earnings Price Action Review
The strategy of purchasing Verint Systems shares following a quarter-over-quarter revenue drop on the earnings release date and holding them for 30 days proved ineffective. A backtest revealed a significant loss of 65.79% with an excess return of -104.20%. The compound annual growth rate stood at -30.29%, with a high maximum drawdown of -74.44%. Additionally, the Sharpe ratio was -0.70, reflecting the strategy's inability to yield positive returns or risk-adjusted benefits. This analysis underscores the need for investors to reconsider this approach, as it has consistently underperformed, failing to capitalize on any potential market rebounds or corrections.
CEO Commentary
Dan Bodner, Chairman of the Board & CEO, expressed optimism about Verint Systems' strong first quarter, emphasizing a 6% acceleration in ARR growth driven by AI and substantial large deals. He highlighted Verint's AI solutions' differentiation through quick deployments, enabling immediate value realization. Bodner projected an exit ARR growth of 8% for the year, underscoring the importance of proven AI outcomes and the hybrid cloud model's benefits.
Guidance
Verint Systems anticipates achieving approximately $720 million in ARR for Q2 and aims to conclude the fiscal year with around $768 million in ARR, reflecting 8% year-over-year growth. The company maintains its revenue guidance of $960 million, with non-GAAP diluted EPS targeted at $2.93. For the full year, free cash flow is expected to rise by 12% to $145 million, supported by an increase in the rolling SaaS pipeline of over 30% year-over-year, indicating robust demand for AI solutions.
Additional News
Verint Systems announced a significant expansion of its share buyback program, repurchasing approximately 2.5 million common shares in the first quarter of 2026. This move aligns with the company's strategy to utilize free cash flow primarily for stock buybacks, reflecting confidence in its financial position. Additionally, Verint secured a $13 million TCV order from an insurance company and a $14 million order from a healthcare company, underscoring its growing influence in AI-driven workflow automation. These developments highlight Verint's commitment to enhancing shareholder value and strengthening its market presence in customer experience automation.
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