Verint Systems (VRNT) Q1 2025 earnings summary

Executive summary

• Q1 FYE25 revenue reached $221.3 million, up 2% year-over-year (5% adjusted for divestiture), driven by 20% SaaS growth and strong AI-powered business outcomes.

• Non-GAAP diluted EPS was $0.59, up 11% year-over-year and above guidance, with gross margin expanding to 72.4%.

• Major contract wins included a $14M deal with a global retailer and several $4–14M agreements with leading brands.

• Customers reported significant benefits from AI bots, such as increased agent capacity, reduced attrition, and higher upsell rates.

• The company completed the divestiture of its manual quality managed services business, aligning with its AI automation strategy.

Financial highlights

• Q1 adjusted revenue grew 5% year-over-year to $221M, $7M above guidance; recurring revenue was $173.5M, with SaaS revenue up 20%.

• Non-GAAP gross margin expanded 260bps year-over-year to 72.4%; GAAP gross margin was 71.2%.

• Adjusted EBITDA for Q1 was $56.3M, with a 25.4% margin; non-GAAP operating margin was 22.6%.

• GAAP net income was $10.0M, compared to a loss of $1.9M in the prior year; diluted GAAP EPS was $0.16.

• Cash flow from operations was $60.7M, with $238.5M in cash and equivalents at quarter-end.

Outlook and guidance

• FY25 non-GAAP revenue guidance raised to $933M (+/- 2%), reflecting 5% year-over-year growth adjusted for divestiture.

• Non-GAAP diluted EPS guidance increased to $2.90 at the midpoint, up 6% year-over-year.

• Non-GAAP gross margin expected to expand to 73%, up ~150bps year-over-year.

• Q2 revenue expected between $210M–$214M; Q2 non-GAAP EPS expected at $0.52.

• Free cash flow target increased by over 40% to ~$180M for the year.