Executive Summary
Verint Systems reported QQ2 2026 revenue of $208.0 million, essentially flat year-over-year (YoY) and down a hair quarter-over-quarter (QoQ) at -0.04%. Gross profit reached $140.6 million for a gross margin of 67.6%. Operating income was modest at $3.3 million (1.6% margin), while net income was negative at -$1.69 million and earnings per share (EPS) came in at -$0.094. The company generated operating cash flow of $19.1 million and free cash flow of $19.1 million, underpinning liquidity despite a negative quarterly net income. Verint ends the quarter with cash of about $174.97 million and total debt of roughly $443.99 million, resulting in net debt of approximately $269.02 million. The balance sheet remains solid in absolute terms, but leverage is a material consideration going forward. Overhang from a high goodwill balance and ongoing investments in R&D and go-to-market activities appear to be weighing on near-term profitability even as gross margins remain robust.
Management’s commentary on the QQ2 call (where available in the dataset) is not included in the provided materials. Inference suggests continued emphasis on cloud-native offerings and AI-enabled capabilities, along with disciplined cost management to support long-term profitability. The company’s free cash flow generation and cash position provide a cushion while it executes its strategic transition. Investors should monitor margin progression, working capital dynamics, and the pace of cloud-transition-related investments as catalysts for a potential improvement in profitability.
Key Performance Indicators
QoQ: -33.97% | YoY:-75.85%
QoQ: -204.07% | YoY:-130.52%
QoQ: -145.57% | YoY:-501.28%
Key Insights
Revenue: $208.0M; YoY change: -1.03%; QoQ change: -0.04%
Gross Profit: $140.6M; Gross Margin: 67.57%; YoY gross margin: -1.30%; QoQ: +1.19%
Operating Income: $3.35M; Margin: 1.61%; YoY: -75.85%; QoQ: -33.97%
EBITDA: $16.71M; EBITDA Margin: 8.03%
Net Income: -$1.69M; Net Margin: -0.81%; YoY: -130.52%; QoQ: -204.07%
EPS (Diluted): -$0.0943; YoY: -501.28%; QoQ: -145.57%
Cash Flow: Net cash provided by operating activities $19.11M; Free cash flow $19.08M; Capital expenditure $0.031M;
Cash and equiv...
Financial Highlights
Revenue: $208.0M; YoY change: -1.03%; QoQ change: -0.04%
Gross Profit: $140.6M; Gross Margin: 67.57%; YoY gross margin: -1.30%; QoQ: +1.19%
Operating Income: $3.35M; Margin: 1.61%; YoY: -75.85%; QoQ: -33.97%
EBITDA: $16.71M; EBITDA Margin: 8.03%
Net Income: -$1.69M; Net Margin: -0.81%; YoY: -130.52%; QoQ: -204.07%
EPS (Diluted): -$0.0943; YoY: -501.28%; QoQ: -145.57%
Cash Flow: Net cash provided by operating activities $19.11M; Free cash flow $19.08M; Capital expenditure $0.031M;
Cash and equivalents: $174.97M; Total debt: $443.99M; Net debt: $269.02M
Balance Sheet highlights: Total assets $2.232B; Goodwill $1.414B; Intangible assets $70.42M; Total current assets $499.21M; Total current liabilities $772.98M; Short-term debt $413.54M; Long-term debt $60.91M; Total stockholders’ equity $1.332B; Weighted average shares outstanding 60.31M
Liquidity and capital allocation: Operating cash flow to free cash flow conversion supported by the $19.11M operating cash flow; stock repurchases of ~$9.23M; dividends paid ~$8.0M; net cash used by financing activities ~$19.11M; net change in cash: -$5.90M.
Income Statement
| Metric |
Value |
YoY Change |
QoQ Change |
| Revenue |
208.01M |
-1.03% |
-0.04% |
| Gross Profit |
140.55M |
-1.30% |
1.19% |
| Operating Income |
3.35M |
-75.85% |
-33.97% |
| Net Income |
-1.69M |
-130.52% |
-204.07% |
| EPS |
-0.09 |
-501.28% |
-145.57% |
Management Commentary
No transcripts or management quotes were provided in the data set. As a result, transcript highlights and verbatim management commentary could not be extracted. If a transcripts file becomes available, quotes can be incorporated by theme (strategy, operations, market conditions) with context and significance.
Forward Guidance
There was no explicit forward-looking guidance published in the QQ2 materials provided. Given Verint’s ongoing investments in cloud-based solutions and AI-enabled customer engagement, the near-term trajectory likely hinges on: (1) the monetization of cloud/SaaS ARR and expansion of cross-sell opportunities across its product portfolio, (2) achieving margin expansion through mix shift and operating leverage as revenue stabilizes, and (3) maintaining a disciplined capital allocation framework amid a moderate-to-leveraged balance sheet. Investors should monitor: cloud transition traction (customer adoption of new platforms), mix shifts (on-premise vs. cloud), R&D investment pace relative to revenue growth, and any updates to full-year guidance or long-term margin targets. Potential upside would stem from stronger-than-expected ARR growth, improved operating leverage, and deleveraging, while downside risk includes sustained revenue pressure, higher than anticipated operating expenses, and continued net-income weakness.