Verint Systems Inc. (NASDAQ:VRNT) stock plunges 14.80% (As on September 7, 11:26:16 AM UTC-4, Source: Google Finance) after the company reported quarterly earnings and revenue below market expectations. Recurring revenues came in at $161.2 million, well below the Street’s $178.7 million estimate with recurring software revenue representing 86% of total revenue down from 87% in the prior quarter, while reducing its recurring revenue target to 88% by FYE24 down from the prior goal of 90% as sales cycle elongation expected to persist for the remainder of the year. In Q2, SaaS ARR increased 17% year-over-year driven by solid New SaaS ACV bookings combined with strong SaaS renewals and the company remains on track to complete the perpetual to SaaS transition this year. The company reported that the $11 million of New SaaS ACV deals that slipped from Q1 were all booked in Q2. At the same time, the company saw some deals that it expected in Q2 slip out of the quarter and the company expects elongated sales cycles to persist for the remainder of the year due to the macroeconomic environment. The strong margins and cash flow generation provides the company financial flexibility as it continues to execute the previously announced $200 million stock buyback program

VRNT in the second quarter of FY 24 has reported the adjusted earnings per share of 48 cents, missing the analysts’ estimates for the adjusted earnings per share of 57 cents. The company had reported 6 percent decline in the adjusted revenue to $210.2 million in the second quarter of FY 24, missing the analysts’ estimates for revenue of $225.1 million. The company’s gross margin is up more than 70bps year-over-year.

The company has also downgraded its outlook, moving full-year revenue guidance to $910 million from $935 million, lower than the $934.7 million previously anticipated in the market. For the year ending January 31, 2024, SaaS Revenue is  expected to be in the range of 18% – 20% year-over-year growth, Adjusted EBITDA to be of $250 million, at the midpoint of revenue guidance, reflecting 5% year-over-year growth and Diluted EPS to be $2.65 at the midpoint of revenue guidance, reflecting 5% year-over-year growth. Costs associated with modifying the workplace in response to the decision to move to a hybrid work environment, including assumed lease terminations and abandonments, IT facilities and infrastructure costs, and other nonrecurring charges are expected to be between approximately $5 million and $7 million, and $28 million and $31 million, for the three months ending October 31, 2023 and year ending January 31, 2024, respectively.