Verint Systems (VRNT) Q2 2025 earnings summary

Executive summary

• Q2 FY25 revenue was $210.2 million, flat year-over-year GAAP but up 3% adjusted for the divestiture of the quality managed services business.

• AI bookings increased over 40% year-over-year, and bundled SaaS revenue grew 15% year-over-year, driven by strong AI adoption and customer-reported business outcomes.

• Over 50% of the largest customers (>$1M ARR) have purchased at least one AI-powered bot, with significant opportunities for further expansion.

• Large multi-year deals included a $13 million contract with a Fortune 25 brand and a $6.5 million deal with a top 10 U.S. utility.

• The company completed the divestiture of its manual quality managed services business, shifting focus to AI-powered automation.

Financial highlights

• Q2 non-GAAP revenue was $210 million, up 3% year-over-year adjusted for divestiture; GAAP revenue was flat.

• Non-GAAP gross margin reached 71.2%, up 170 basis points year-over-year; GAAP gross margin was 69.2%.

• Non-GAAP diluted EPS was $0.49, up 3% year-over-year; GAAP diluted EPS was $0.02.

• Adjusted EBITDA for Q2 was $50.5 million (24.0% margin); six-month adjusted EBITDA was $106.8 million (24.8% margin).

• SaaS ARR reached $556.5 million at quarter end, up 10.7% year-over-year.

Outlook and guidance

• FY25 non-GAAP revenue guidance is $933 million ±2%, reflecting 5% year-over-year growth (adjusted for divestiture).

• FY25 non-GAAP diluted EPS guidance is $2.90, up 6% year-over-year.

• Adjusted EBITDA is expected to grow 10% for the year, with at least 150 basis points of gross margin expansion.

• Free cash flow outlook for FY25 is approximately $180 million, up 40% year-over-year.

• Rule of 40 target for fiscal 2027: 10% revenue growth and 30% Adjusted EBITDA margin.