Verint Systems (VRNT) Q3 2025 earnings summary

Executive summary

• Q3 FY2025 revenue reached $224.2 million, up 3% year-over-year as reported and 5% on a non-GAAP basis adjusted for divestiture, exceeding guidance by $14 million, driven by strong SaaS and AI momentum.

• Non-GAAP diluted EPS was $0.54, $0.11 above guidance, while GAAP diluted EPS was $0.39, both supported by early renewal revenue and gross margin expansion.

• Major AI-driven contract wins in financial services, insurance, and healthcare sectors, leveraging hybrid cloud solutions and driving measurable business outcomes.

• The company completed several AI-focused acquisitions and divested its manual quality managed services business to focus on automation.

• Investor Day scheduled for January 14, 2025, will provide FYE26 guidance and long-term AI monetization strategy.

Financial highlights

• Q3 revenue: $224.2 million (GAAP), up 3% year-over-year; non-GAAP revenue up 5% and $14 million above guidance after divestiture adjustment.

• Bundled SaaS revenue grew 19% year-over-year, with SaaS ARR up 11% and new SaaS ACV bookings from new deals up 37%.

• Gross margin expanded to 72% non-GAAP (70.8% GAAP), up ~70bps year-over-year, marking nine consecutive quarters of margin expansion.

• Nonrecurring revenue declined 23% to $44.3 million, mainly due to lower professional services and patent royalties.

• Free cash flow up 25% year-to-date; targeting over 30% growth for the full year.

Outlook and guidance

• Full-year FYE25 non-GAAP revenue guidance maintained at $933 million ±2%, reflecting 5% year-over-year growth (adjusted for divestiture).

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

• Gross margin expected to expand by at least 150bps year-over-year, reaching at least 73%.

• Q4 recurring revenue expected at ~$213 million, with nonrecurring revenue at ~$64 million.

• Guidance excludes impact of future acquisitions, restructuring, and non-GAAP tax adjustments.