Verint Systems Inc.

Ladies and gentlemen, thank you for standing by, and welcome to Verit Systems' fourth quarter 2022 earnings conference call. At this time, all participants are on a listen-only mode. After this speaker's presentation, there will be a question-and-answer session. To ask a question during the session, you will need to press the star, then the one key on your touch-tone telephone. If you require operator assistance, please press star, then zero. I would now like to send the conference over to your speaker host, Matthew Franco, Investment Relations and Corporate Development at Verit. Please go ahead.

Thank you, Operator, and good afternoon, and thank you for joining our conference call today. I'm here with Dan Bodnar, VARIN's CEO, Doug Robinson, VARIN's CFO, and Alan Roden, VARIN's Chief Corporate Development Officer. Before getting started, I'd like to mention that accompanying our call today is a WebEx slide. If you'd like to view these slides in real time during the call, please visit the IR section of our website at VARIN.com. Click on the Investor Relations tab, then 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 Securities 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 the date of this call and is accepted as required by law. Fairness assumes no obligation to update or revise them. Investors are cautioned not to place undue reliance on these forward-looking statements. For more detailed discussion about these and other risks and uncertainties could cause variance actual results to differ materially from those indicated in these forward-looking statements, please see our Form 10-K for the fiscal year and at January 31, 2022, when filed, 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 in comparing results between periods and among our peer companies. Please see today's WebEx slides, our earnings release, and the investor relations section of our website at Verint.com for a reconciliation of non-GAAP financial measures to GAAP measures. Non-GAAP financial information should not be considered in isolation from, 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. These non-GAAP financial measures the company uses have limitations that 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 the cloud momentum we experienced throughout the year continued in our fourth quarter, and we finished the year strong across all key financial and cloud metrics. Here are some highlights of our Q4 performance. Non-GAAP revenue came in significantly ahead of our guidance. We delivered strong cloud revenue growth. Our booking mix continued to shift to the cloud with 61% of new PLE bookings coming from SAS. And non-GAAP diluted EPS also came in ahead of our guidance. Looking ahead, we expect our momentum to continue and are raising our guidance for the current year for revenue, cloud revenue growth, and diluted earning per share. We believe our results and improved outlook reflect the strength of our open cloud platform and AI differentiation, as well as our strong execution following the spinoff of our security business last year. At the time of the spinoff, we outlined a three-year plan targeting a 30% cloud revenue CAGR and targeting revenue growth to increase each year. I'm pleased that we performed ahead of this plan in fiscal 22, which was year one of the plan. I'm also pleased that we are tracking ahead of our targets for years two and three. We're targeting revenue growth accelerating to 7% this year and to 10% next year, driven by faster cloud growth. Let me start our Q4 review by discussing our bookings momentum and our many customer wins. Throughout the year, we added many new logos and expanded our footprint with existing customers. We're seeing strong market adoption for cloud in the SMB segment and increasingly also with larger enterprises. We won many large deals. And for the year, we landed approximately 100 cloud deals over $1 million TCV, up nearly 25% year-over-year. In Q4 specifically, our million-dollar cloud orders included some of the leading brands in the world, across different industries, such as Avis, Farmers Group, and Goldman Sachs. Regarding new logos, In Q4, we added more than 100 new logos, including Chipotle, Gerber, Rolex, and Wayfair. This brings the tall number of new logos added in the full year to more than 400. Overall, we finished the year with strong bookings across existing and new customers, and we believe our booking momentum is driven by both our open AI-powered cloud platform as well as by the strength of our partnerships. Our open cloud platform is designed to help brands close the engagement capacity gap. The platform includes a broad set of applications across workforce engagement, digital first engagement, and experience management. the ingredients brands need to close the engagement capacity gap across the enterprise. At the core of our cloud platform is Variant DaVinci, our differentiated AI functionality that is specifically designed to automate customer engagement business processes. Variant DaVinci infuses AI-powered automation across all business applications running in our cloud platform and is a key driver in helping brands reduce their operating costs while elevating the customer experience across the enterprise. Because a platform is designed with an open architecture, our partners are able to leverage our platform ecosystem to further innovate and create value for customers. The combination of an open platform design and a partner-friendly strategy drive the ongoing expansion of our partner ecosystem and is resonating well with our customers around the world. I would like to discuss three examples of wins that demonstrate our strengths and competitive differentiation. The first order for $4 million was a competitive displacement and an expansion order from a leading transportation company. An existing customer, the company decided to expand its relationship with Variant in several geographies by purchasing additional products across our platform. A platform approach, open partnership strategy, and differentiated AI were key reasons we won this opportunity. The second order for $2 million was from a customer in the healthcare industry. This customer is a new logo for Variant. After putting out an RFP, the customer decided to award Variant and replace a legacy vendor with the Variant Cloud Platform. This competitive win across several parts of our platform came against multiple point solution vendors. Aside from our platform approach, the key drivers of the win included Variant DaVinci AI and Analytics, and our open partnership strategy. And the third one for $2 million was also from a new customer that is one of the world's leading e-tailers. This win was also a competitive displacement and was due to our platform approach, our ability to demonstrate our leading AI technology delivers significant ROI as well as the open and scalable architecture of the platform. Looking back at the full year, fiscal 22, we're very pleased with the execution of our cloud strategy as evidenced by our cloud metrics coming in strong across the board. New booking growth on a PAB basis came in at 17% compared to our initial guidance of 10%. We saw booking strength in both our direct and indirect business and in both existing customer expansions and new logos. Non-GAAP cloud revenue growth came in at 37% compared to our initial guidance of 30%. We saw strength in both customers buying new cloud solutions as well as our maintenance customers converting to the cloud. New SAS HCV bookings growth came in strong at 42%. And we delivered $881 million of revenue and $2,028 sense of diluted earning per share, both on a non-GAAP basis. During last year, we raised guidance multiple times and ended the year significantly ahead of our initial guidance. We're entering fiscal 23 with cloud momentum and improved visibility. And next, I would like to discuss our outlook. We are raising our annual guidance for fiscal 23 across key financial and cloud metrics. Doug will discuss our new guidance later in more detail. Let me just share that behind our increased guidance is improved visibility driven by several factors. First, we finished fiscal 22 with Q4 non-GAAP cloud revenue of $119 million and record backlog. providing a strong starting point for Fiscal 23. Second, we have a strong pipeline, our partnerships are growing, and we're targeting another year of double-digit new PLE bookings growth. And third, our platform is making it easier for maintenance customers to convert to the cloud and add new cloud applications. During Fiscal 22, with close to $250 million of maintenance revenue, and expect conversions to continue and to contribute to cloud growth in fiscal 23 and beyond. In summary, looking back at fiscal 22, I believe our strategy is resonating well with customers and partners. The spin-off of our security business 14 months ago drove a greater focus on a single market, and is contributing to our improved execution. Today, we are a pure-play customer engagement company, 100% focused on helping brands close the engagement capacity gap. Last year, we raised our cloud revenue growth multiple times throughout the year, and we are pleased to be increasing our outlook for fiscal 23 as well. We expect our revenue growth to accelerate over the next three years as we benefit from the tailwinds associated with crossing the midpoint of our cloud transition as cloud is becoming the bigger piece of our total revenue. Long-term, we have a significant growth opportunity as we are uniquely positioned to help brands close the engagement capacity gap with our AI-powered platform. Now let me turn the call over to Doug to discuss our financial results in more detail. Doug?