Verint Systems Inc. (NASDAQ: VRNT) stock crashed over 10% in the pre-market session of September 5th, 2019 (Source: Google finance) on bad results for the second quarter of FY 20. Verint Systems in the second quarter of FY 20 has reported the adjusted earnings per share of 82 cents, while revenue growth of 7.4 percent to $331.3 million in the second quarter of FY 20, missing the analysts’ estimates for revenue of $334.5 million. From an operating margin perspective, the company expects non-GAAP operating margins in fiscal ’20 of approximately 22%. The company expects the non-GAAP quarterly interest and other expense excluding the potential impact of foreign exchange to be approximately $5.6 million.
At the end of Q2, the company had $466 million of cash and short-term investments, including short-term and long-term restricted cash and investments. The company has ended the quarter with net debt of $351 million, including long-term restricted cash and investments and excluding discounts and issuance costs primarily associated with the convertible debt. Year-to-date, cash flow from operations on a GAAP basis was $98 million, down slightly from last year due to the timing of collections and payments.
Moreover, in the first six months of the year, the company saw more customers choosing the SaaS option, as evidenced by more than 80% new SaaS ACV growth. Verint Systems expects this trend to continue and currently expect around 80% ACV growth for the year as well. During the first half, adjusted EBITDA increased 15% as margins expanded by 120 basis points. Non-GAAP operating income increased 17% and non-GAAP operating margins improved by 140 basis points from last year’s first half.
In Q2, non-GAAP Cyber Intelligence revenue increased 7% from last year or 8% on a constant-currency basis. In Q2, non-GAAP Customer Engagement revenue increased 8% from last year or 9% on a constant-currency basis.
The company expects total non-GAAP revenue of $1.375 billion with a range of plus or minus 2%, reflecting just over 10% growth for the year. In Q3, the company expects non-GAAP revenue to be similar to Q2, which is consistent with past years, followed by the usual seasonally strong Q4.