Verint Systems rebounds from a 'bad year,' analyst says

Verint Systems Inc. is rebounding from a “bad year” by getting back to its roots, an analyst said.

The Melville-based software company, whose bread and butter is selling monitoring software used in call centers and government threat intelligence detection, late Wednesday reported net income of $17.1 million, or 26 cents per diluted share, in its fourth quarter, which ended Jan. 31. That result compared with net income of $8 million, or 13 cents per diluted share, in the same period a year earlier.

Verint’s revenue in the fourth quarter was $318.7 million, a 7.7 percent increase from the same period a year earlier.

Verint struggled with setting overly aggressive sales expectations that it couldn’t meet in its fiscal year that ended Jan. 31, 2017, when sales fell 6 percent and the company posted a loss of $29.4 million, said Rodney Nelson, an analyst at Morningstar Inc. who covers the company.

But the annual financial results also improved in fiscal 2018, ended Jan. 31. The company's net loss narrowed to $6.6 million.

“This year they got back to the core strategy of land and expand,” said Nelson, referring to the company’s refocusing on negotiating smaller deals and then selling additional software to those existing customers.

Verint Systems also continues to benefit from an industrywide increase in customers transitioning from running their own data storage centers to hiring more efficient vendors, like the Melville company, to oversee the services off-site via cloud technology.

Verint’s cloud-related revenue increased 25 percent for the year, the company said in a conference call with analysts Wednesday.

“The momentum we experienced throughout the year continued in Q4 and we are pleased to have finished the year strong,” Dan Bodner, Verint chief executive officer and president, said in a statement Wednesday.

For the full year that ended Jan. 31, Verint had $1.14 billion in revenue, compared to $1.06 billion in the previous year.

Inearlym after-hours trading Wednesday, Verint's shares rose $2.80, or 7.5 percent, to $40.20.