Verint Systems Inc. Reports Strong Q2 2025 Growth in AI and SaaS Revenue

Verint Systems Inc. (NASDAQ: VRNT) has reported significant growth in artificial intelligence (AI) bookings and bundled Software as a Service (SaaS) revenue in the second quarter of 2025, indicating strong market momentum.

The company, specializing in customer engagement solutions, has seen a 40% year-over-year increase in new AI bookings and a 15% increase in AI-driven bundled SaaS revenue. Verint expects this trend to continue in the second half of the year and is on track to meet its full-year guidance with 5% growth in revenue and $2.90 in non-GAAP diluted earnings per share (EPS).

The company’s focus on AI in the contact center market has attracted new customers and strengthened its position in the industry. With a solid financial strategy, including a completed $200 million share buyback and a new buyback program of the same amount, Verint is well-positioned for continued success and aims to achieve a Rule of 40 target in fiscal year 2027.

Key Takeaways

• Verint’s Q2 2025 AI bookings surged by over 40% compared to the previous year.
• AI-driven bundled SaaS revenue increased by 15% year-over-year.
• The company is on track to achieve 5% revenue growth and $2.90 non-GAAP diluted EPS for the full year.
• Verint expects to maintain strong performance in the second half of the year.
• The company’s net debt remains below one times the last 12 months’ EBITDA.
• A new $200 million share buyback program has been announced over two years.
• Verint is targeting 10% revenue growth and 30% adjusted EBITDA margin in fiscal year 2027.

Company Outlook

• Verint is targeting 10% revenue growth and 30% adjusted EBITDA margin in fiscal year 2027.
• The company maintains its full-year guidance for 5% growth in revenue and $2.90 non-GAAP diluted EPS.
• Verint aims to increase free cash flow by 40% to around $180 million for the full year.
• The company expects AI adoption in the market to positively impact revenue growth rate, margins, and cash flows.

Bearish Highlights

• AI conversions are lower than anticipated; however, this has not affected revenue due to expansion in unbundled SaaS.

Bullish Highlights

• Verint has demonstrated strong AI business outcomes for leading brands.
• The company’s Open Platform and Verint Da Vinci AI provide quick AI business outcomes.
• Large contracts have been won based on AI business outcome differentiation.
• Growth in Annual Recurring Revenue (ARR) from existing customers has been observed.

Misses

• The company has experienced lower-than-expected AI conversions despite strong AI bookings.

Q&A Highlights

• Verint discussed growing interest in AI for reducing attrition and improving coaching and training for agents.
• AI is being employed to prevent fraud, with significant savings reported by one company.
• The company’s volume-based pricing model for bot billing offers flexibility and encourages commitment from customers.

Verint Systems Inc. has clearly showcased the success of its AI initiatives and the positive market reception. With a strong financial strategy and continuous innovation, the company is poised to maintain its leadership in the contact center AI space and achieve long-term financial goals.

InvestingPro Insights

As Verint Systems Inc. (NASDAQ: VRNT) continues to address growing demand for AI-driven customer engagement solutions, InvestingPro data provide deeper insights into the company’s financial health and market position. With a market capitalization of $1.84 billion and a gross profit margin of 70.94% in the last twelve months as of Q1 2025, Verint demonstrates a robust financial structure that supports its ambitious growth targets. The company’s commitment to returning value to shareholders is evident through an aggressive share buyback strategy, indicating management’s confidence in the future.

InvestingPro Tips also note that Verint is trading at a high earnings multiple with a P/E ratio of 62.77, suggesting high investor expectations for earnings growth potential. This aligns with the company’s revenue growth and profitability projections, further supported by Verint’s profitability over the last twelve months.

The company’s strategy of not paying dividends may appeal to investors favoring reinvestment into growth initiatives. For more insights, tips can be found on InvestingPro, totaling 7 tips listed for Verint Systems Inc.

Conclusion

In summary, Verint’s strong market momentum in AI bookings and SaaS revenue is backed by solid financial performance and strategic initiatives reflected in InvestingPro data. With the next earnings date on September 4, 2024, investors will be closely monitoring the company’s ability to uphold its growth trajectory and achieve its Rule of 40 target by fiscal year 2027.