Verint Systems Inc.

Ladies and gentlemen, thank you for standing by and welcome to Variant's first quarter conference call. At this time, all participants are in a listen-only mode. After the speaker presentation, there will be a question and answer session. To ask a question during the session, you'll need to press star 1 on your telephone. Please be advised that today's conference may be recorded. If you require any further assistance, please press star 0. I would now like to hand the conference over to your speaker today, Matthew Frankel. Please go ahead.

Thank you, operator. Good afternoon, and thank you for joining our conference call today. I'm here with Dan Bodnar, Varon's CEO, Doug Robinson, Varon's CFO, and Alan Roden, Varon's Chief Corporate Development Officer. Before getting started, I'd like to mention that accompanying our call today is a WebEx of slides. If you'd like to view these slides in real time during the call, please visit the IR section of our website at varons.com. Click on the Investor Relations tab, click on the webcast link, and select today's conference call. I'd also like to draw your attention to the fact that certain matters discussed on this call may contain forward-looking statements within the meaning of the Private Security Litigation Reform Act of 1995 and other provisions of the Federal Securities Laws. These forward-looking statements are based on management's current expectations and are not guarantees of future performance. Actual results could differ materially from those expressed in or implied by these forward-looking statements. The forward-looking statements are made as to the date of this call and as except as required by law. Barron assumes no obligation to update or revise them. investors are cautioned not to place undue reliance on these forward-looking statements. For a more detailed discussion on how these and other risks and uncertainties could cause variance in actual results to differ materially from those indicated in these forward-looking statements, please see our Form 10-K for the fiscal year ended January 31, 2021, and other filings we make with the SEC. The financial measures discussed today include non-GAAP measures, as we believe investors focus on those measures of comparing results between periods and among peer companies. Please see today's WebEx slides and earnings release in the investor relations section of our website at barron.com for reconciliation of non-GAAP financial measures to GAAP measures. Non-GAAP financial information should not be considered in isolation from and as a substitute for or superior to GAAP financial information, but is included because management believes it provides meaningful supplemental information regarding our operating results when assessing our business and is useful to investors for informational and comparative purposes. The non-GAAP financial measures the company uses have limitations and may differ from those used by other companies. Now, I'd like to turn the call over to Dan. Dan?

Thank you, Matt. I'm pleased to report a strong first quarter with both revenue and diluted earnings per share coming in ahead of our expectations. Over the last few quarters, we discussed our expectation the cloud revenue would accelerate this year, and I'm pleased to report that in Q1, we delivered 39% year-over-year growth in non-GAAP cloud revenue. UPLE, or perpetual license equivalence bookings, which measures our new software bookings on a perpetual license equivalent basis, also came in strong with 28% year-over-year growth. Overall, our cloud metrics were strong across the board, including new SAS HCV, recurring revenue, and PLE mix. We expect the cloud momentum to continue and are raising our annual outlook for PLE booking growth. Our strategy is to help brands navigate digital transformation with an open cloud platform that connects work, data, and experience across the enterprise. To help explain and bring this strategy to life, I would like to review several recent large customer cloud wins. Our differentiated platform positioned us well to win new customers and also to capture wide space within our customer base. We have thousands of customers globally, many of which are looking to Variant to help them expand their customer engagement strategies and connect the contact center with their office, branch, and digital marketing. Here are a few examples. In Q1, we received a $10 million order from one of the largest financial services companies. This is an existing variant customer transitioning from our on-premises solution to our open cloud platform, while at the same time closing gaps in their white space by adding new variant applications. This customer is using variants across the enterprise to connect the content center, back office, and customer experience operations. This is a good example of a customer using the Varian Cloud platform to eliminate silos, drive more efficiency, and elevate customer experience. Another example is a $17 million cloud order we received in early Q2 from one of the largest healthcare providers in the United States. This is also an existing Varian customer they decided to transition their variant application platform to the cloud, and at the same time, transition their communications platform to the cloud with a new vendor. Because of our open platform and its broad set of pre-built integrations with leading communications platforms, the customer was able to select their communication vendor with the peace of mind that the variant application platform could be seamlessly integrated regardless of who they choose. This is a good example of how the Varen platform gives customers the openness and flexibility they need. In addition to these eight-digit orders from existing customers, we continue to win new customers and displaced competitors. In Q1, we received a $4 million cloud order from one of the world's largest logistics companies, a new customer for Variant. This is a good example of Variant working together with a partner to package the Variant platform with the communication platform and offer the customer a pre-integrated offering. This competitive displacement was due to the best-of-brain functionality of our open platform and our strategy of working closely with partners. We believe these large orders reflect our differentiated technology and the successful execution of our open cloud platform strategy. We recently had the opportunity to showcase our innovation at our annual engage user conference, where we had more than 5,000 registrants up nearly 40% year over year. At the conference, we unveiled many innovations, including real-time work, which I would like to discuss today. Real-time work is growing in importance in the post-COVID world of remote work and increasing demands on the workforce. Brands need new technology to help customer engagement employees respond better in real time and increase workforce productivity. Our new real-time work innovation includes several cloud platform applications as follows. First, real-time agent assist, which automatically detects unique moments of truth, such as customer complaints, escalations, positive and negative sentiments, long silences, compliance risks, and coaching opportunities. Agents and managers receive real-time guidance alerts, and coaching with next best action and insights on how to improve interactions. Second, contextual knowledge, which uses advanced AI to create a more automated, natural, and effective way to connect people to knowledge. AI-infused contextual knowledge can be surfaced automatically and in real time so that agents and managers can respond with the right answers, and avoid long searches and customer frustration. And finally, Variant Intelligence Virtual Assist for the Workforce, which provides human agents with AI-powered continuous support during calls and chats, and allows agents to improve response accuracy, compliance, training ramp time, and customer experience. Overall, I'm happy to report that post the spin of our security business, the new variant is increasing the pace of our innovation and building more platform differentiation to accelerate growth. As discussed on prior calls, our platform is open and designed with a native cloud architecture, supporting multiple clouds, making it easier for customers and partners to quickly innovate and integrate with their environments of choice. The value of the Variant platform comes not only for its own features, but for its ability to easily connect external tools, teams, data, and processes. This is critical today, as customer engagement is no longer solely a contact center function. With digital transformation, it's an enterprise function that requires the connection of data and workflows across many departments and silos. We designed a platform to integrate seamlessly with other key enterprise platforms, including communication platforms, CRM solutions, and enterprise business intelligence and analytics tools. For communications platforms, we are Gnostic and enable our customers to quickly integrate with the vendor of their choice as illustrated by the large wins we discussed earlier. For CRM, we enable our customers to easily export and import data between their CRM systems and the Varian platform. And lastly, for business intelligence and analytics tools, we provide free access to the wealth of data managed by the Varian platform. Overall, we are pleased with our Q1 results the increased pace of our platform innovation, and the strong cloud momentum. Now let me turn the call over to Doug. Doug?