What happened
Shares of Verint Systems (VRNT 2.42%) were down 18.2% as of 3 p.m. ET Thursday after the customer engagement solutions company announced disappointing fiscal second-quarter 2024 results (for the period ended July 31, 2023).
Verint's quarterly revenue declined 6% year over year to $210.2 million, translating to adjusted (non-GAAP) earnings of $0.48 per share. Analysts, on average, were looking for earnings of $0.57 per share on revenue of $225 million.
So what
There was one bright spot in Verint's report; adjusted software-as-a-service (SaaS) revenue climbed 10% year over year to $113.7 million, while SaaS annual recurring revenue (ARR) grew 17% as the company continues to transition away from perpetual licenses.
Even so, Verint CEO Dan Bodner noted some deals that were expected to close in the second quarter ended up slipping due to elongated sales cycles amid the current difficult macroeconomic environment.
Now what
Management also stated that those longer sales cycles are expected to persist at least through the end of the current fiscal year. As such, Verint lowered its full fiscal-year adjusted revenue outlook to a range of $910 million, plus or minus 2% -- down from $936 million previously -- with earnings per share of $2.65 at the midpoint of that revenue guidance range.
In the end, it's encouraging that Verint's transition toward recurring SaaS revenue is making progress. But the market hates being told to hurry up and wait for growth to materialize, and it's no surprise to see the stock selling off today in response.
