Executive Summary
Verint Systems delivered a solid QQ3 2025 performance, underscored by AI-driven momentum across bundled and unbundled SaaS revenues and a continued mix shift toward higher-margin recurring revenue. Revenue reached $224.2 million, up approximately 5% year-over-year (adjusted for divestitures), aided by a significant acceleration in bundled SaaS revenue (up 19% YoY) and favorable renewal dynamics in unbundled SaaS. Management maintained full-year guidance, signaling confidence in continued AI-led adoption and monetization through a hybrid cloud model.
Key drivers include a robust pipeline of AI-enabled deployments, notably large multi-Bot deals and ongoing customer outcomes that Verint asserts translate into tangible labor savings and improved customer experience. ARR grew 11% YoY, new SaaS ACV bookings rose 37% YoY in Q3, and management expects Q4 to be the seasonally largest quarter for unbundled SaaS renewals (~$100m). The company is enhancing its platform through tuck-in AI acquisitions (notably a $150 million technology tuck-in integrated into new CX/EX scoring bots) and expanding partner integrations (e.g., CCaaS and RingCentral cloud-to-cloud collaboration).
The near-term investment thesis centers on Verint’s open hybrid-cloud CX automation platform, which purportedly accelerates AI adoption within existing customer ecosystems and offers real-time, measurable outcomes. While the business executes well against AI-driven cycles, it faces typical software/AI-market risks, including competitive dynamics from niche bot vendors and internal IT pilots, as well as execution risk around the integration of acquisitions and the monetization of a growing bot catalog. Overall, the QQ3 results reinforce Verint’s strategic positioning and provide a constructive runway for 2025–2026 growth as AI-driven CX automation migrates from early pilots to broader deployments.
Key Performance Indicators
QoQ: 56.80% | YoY:-18.60%
QoQ: 419.18% | YoY:127.69%
QoQ: 1 602.13% | YoY:100.00%
Key Insights
Revenue: $224.193 million in Q3 2025, up ~5% YoY (adjusted for divestiture).
Gross margin: 70.75% GAAP; Non-GAAP gross margin ~72% (management commentary).
Operating income: $21.748 million; operating margin ~9.70%.
EBITDA: $32.728 million; EBITDA margin ~14.60%.
Net income: $28.716 million; net income margin ~12.81%.
EPS (GAAP): $0.40; EPS (Diluted): $0.39; Non-GAAP Diluted EPS: $0.54.
Cash flow: Operating cash flow $33.647 million; Free cash flow $25.987 million.
Balance sheet: Cash & equi...
Financial Highlights
Revenue: $224.193 million in Q3 2025, up ~5% YoY (adjusted for divestiture).
Gross margin: 70.75% GAAP; Non-GAAP gross margin ~72% (management commentary).
Operating income: $21.748 million; operating margin ~9.70%.
EBITDA: $32.728 million; EBITDA margin ~14.60%.
Net income: $28.716 million; net income margin ~12.81%.
EPS (GAAP): $0.40; EPS (Diluted): $0.39; Non-GAAP Diluted EPS: $0.54.
Cash flow: Operating cash flow $33.647 million; Free cash flow $25.987 million.
Balance sheet: Cash & equivalents $182.823 million; total assets $2.249 billion; goodwill $1.405 billion; total liabilities $930.181 million; total stockholders’ equity $1.315 billion.
Debt: Net debt $259.066 million; net debt/TTM EBITDA under 1x (as per management commentary).
ARR/Bookings: SaaS ARR +11% YoY; New SaaS ACV bookings +37% YoY in Q3; Q4 recurring SaaS expected ~$213 million; Q4 nonrecurring ~$64 million.
Key customer outcomes: telecom >$10m annual savings; financial services ~$9m annual savings from AI bots.
Guidance: FY25 revenue guidance $933 million +/-2%; non-GAAP diluted EPS ~$2.90; gross margin expansion targeted at least 150bps year over year; 30%+ full-year growth in free cash flow; net debt under 1x EBITDA; Investor Day on Jan 14, 2025.
Income Statement
| Metric |
Value |
YoY Change |
QoQ Change |
| Revenue |
224.19M |
2.58% |
6.67% |
| Gross Profit |
158.63M |
3.67% |
11.39% |
| Operating Income |
21.75M |
-18.60% |
56.80% |
| Net Income |
28.72M |
127.69% |
419.18% |
| EPS |
0.40 |
100.00% |
1 602.13% |
Key Financial Ratios
operatingProfitMargin
9.7%
operatingCashFlowPerShare
$0.54
freeCashFlowPerShare
$0.42
Management Commentary
Theme: AI momentum and platform differentiation
- Dan Bodner highlighted AI momentum and the hybrid cloud model, stating Verint is leading the CX automation market and emphasizing an open platform that supports cloud-to-cloud and on-prem integrations. Quote: “Yes. I think we do, but we have to be clear, we are leading the CX automation market.” (CEO remarks on market position and platform openness)
- Management cited tangible customer outcomes and large AI-driven wins, including an $11m order for 6,500 agents, a $7m renewal/expansion across 6,000 agents, and a $6m expansion across nearly 12,000 agents, underscoring the business case for Verint’s bots and hybrid cloud approach.
Theme: Open platform, bots, and bundling strategy
- The company disclosed a growing catalog of 50+ bots and discussed bundling strategies (agent copilot bots) to drive faster consumption, including real-time CX/EX scoring capabilities derived from a tuck-in acquisition. Quote: “The CX/EX scoring box… is the latest addition to the agent copilot both category of the Verint open platform.”
Theme: Partnerships and go-to-market momentum
- RingCentral partnership and CCaaS integrations were cited as catalysts for cross-sell and channel momentum, with management noting early-stage contributions in 2025 and stronger growth expected in the following year.
Theme: Market dynamics and customer adoption hurdles
- Dan noted AI “paralysis” and market noise but emphasized peer benchmarks and real-world outcomes to accelerate customer deployments, pointing to a large installed base (about 4 million agents) and a potential 6x revenue uplift from bots per seat displaced. Quotes: “the best tool we have… is to go to an insurance company and say, look at your peers… AI business outcomes now.”
"Yes. I think we do, but we have to be clear, we are leading the CX automation market. So there's all kinds of different solutions... open platforms where they can consume maybe initially just on bot and at a low level of consumption, but they want to be able to grow consumption and expand into mobile."
— Dan Bodner
"We recognized about $1 million in Q3, so that's included in our results. And this could be several million dollars in Q4."
— Grant Highlander
Forward Guidance
Verint’s QQ3 2025 results underscore a disciplined, AI-enabled growth trajectory within a partially mature CX automation market. The company maintained FY25 guidance, signaling confidence in the durability of AI-led revenue streams and ARR expansion. Near-term outlook highlights:
- Recurring SaaS revenue momentum: Q4 recurring revenue guidance of approximately $213 million suggests a continued acceleration in bundled SaaS revenue, consistent with the 19% YoY growth in Q3 and management’s expectation of >20% YoY growth in Q4 bundled SaaS.
- ARR trajectory: SaaS ARR +11% YoY with double-digit growth anticipated in Q4; multiple levers exist from AI adoption, on-prem to cloud migrations, and bundling strategies.
- Margins and cash flow: Expect at least 150bps gross-margin expansion for the year as mix shifts toward higher-margin recurring revenues; Free cash flow growth expected to exceed 30% for the full year, supported by solid operating cash flow (Q3 OCF of $33.6m) and disciplined capex.
- Profitability: Non-GAAP diluted EPS of $2.90 at the midpoint of FY25 guidance; ongoing reliance on ARR growth and large AI-driven wins to lift operating leverage over time.
- Optionality and monetization: Investor Day on Jan 14, 2025 will feature fiscal 2026 guidance, ARR/cash flow metrics, and a long‑term AI monetization plan, including potential bundling enhancements and open-platform differentiators.
Key factors for investors to monitor:
- Adoption velocity of bundled SaaS and the retention of renewal renewals across the hybrid cloud model.
- The ramp and durability of new bot bundles (agent copilot and CX/EX scoring bots) and the contribution from tuck-in acquisitions.
- Competitive dynamics from point-solution vendors and internal IT AI programs, and Verint’s ability to monetize its open platform through bundles and tiered consumption.
- Progress of RingCentral partnership and further CCaaS ecosystem integrations, which may broaden addressable market and cross-sell opportunities.