Cover Page
Cover Page - shares | 3 Months Ended | ||
Apr. 30, 2020 | May 15, 2020 | Jan. 31, 2020 | |
Entity Information [Line Items] | |||
Common Stock, Shares, Outstanding | 64,526,000 | 64,738,000 | |
Entity Shell Company | false | ||
Document Type | 10-Q | ||
Document Quarterly Report | true | ||
Document Period End Date | Apr. 30, 2020 | ||
Document Transition Report | false | ||
Entity File Number | 001-34807 | ||
Entity Registrant Name | Verint Systems Inc | ||
Entity Incorporation, State or Country Code | DE | ||
Entity Tax Identification Number | 11-3200514 | ||
Entity Address, Address Line One | 175 Broadhollow Road | ||
Entity Address, City or Town | Melville, | ||
Entity Address, State or Province | NY | ||
Entity Address, Postal Zip Code | 11747 | ||
City Area Code | (631) | ||
Local Phone Number | 962-9600 | ||
Title of 12(b) Security | Common Stock, $.001 par value per share | ||
Trading Symbol | VRNT | ||
Security Exchange Name | NASDAQ | ||
Entity Current Reporting Status | Yes | ||
Entity Interactive Data Current | Yes | ||
Entity Filer Category | Large Accelerated Filer | ||
Entity Small Business | false | ||
Entity Emerging Growth Company | false | ||
Entity Shell Company | false | ||
Entity Common Stock, Shares Outstanding | 64,525,660 | ||
Entity Central Index Key | 0001166388 | ||
Current Fiscal Year End Date | --01-31 | ||
Document Fiscal Year Focus | 2021 | ||
Document Fiscal Period Focus | Q1 | ||
Amendment Flag | false |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Apr. 30, 2020 | Jan. 31, 2020 |
Current Assets: | ||
Cash and cash equivalents | $ 556,671 | $ 379,146 |
Restricted cash and cash equivalents, and restricted bank time deposits | 46,451 | 43,860 |
Short-term investments | 19,741 | 20,215 |
Accounts receivable, net of allowance for doubtful accounts of $6.3 million and $5.3 million, respectively | 308,304 | 382,435 |
Contract assets, net | 62,249 | 64,961 |
Inventories | 25,030 | 20,495 |
Prepaid expenses and other current assets | 92,168 | 87,946 |
Total current assets | 1,110,614 | 999,058 |
Property and equipment, net | 115,481 | 116,111 |
Operating lease right-of-use assets | 97,878 | 102,149 |
Goodwill | 1,452,434 | 1,469,211 |
Intangible assets, net | 182,503 | 197,764 |
Other assets | 135,798 | 131,765 |
Total assets | 3,094,708 | 3,016,058 |
Current Liabilities: | ||
Accounts payable | 70,987 | 71,604 |
Accrued expenses and other current liabilities | 228,256 | 233,948 |
Contract liabilities | 378,548 | 397,350 |
Total current liabilities | 677,791 | 702,902 |
Long-term debt | 990,390 | 832,798 |
Long-term contract liabilities | 40,566 | 40,565 |
Operating lease liabilities | 87,340 | 90,372 |
Other liabilities | 105,715 | 106,984 |
Total liabilities | 1,901,802 | 1,773,621 |
Commitments and Contingencies | ||
Stockholders' Equity: | ||
Preferred stock - $0.001 par value; authorized 2,207,000 shares at April 30, 2020 and January 31, 2020, respectively; none issued. | 0 | 0 |
Common stock - $0.001 par value; authorized 120,000,000 shares. Issued 68,930,000 and 68,529,000 shares; outstanding 64,526,000 and 64,738,000 shares at April 30, 2020 and January 31, 2020, respectively. | 69 | 68 |
Additional paid-in capital | 1,677,775 | 1,660,889 |
Treasury stock, at cost - 4,404,000 and 3,791,000 shares at April 30, 2020 and January 31, 2020, respectively. | (208,124) | (174,134) |
Accumulated deficit | (112,544) | (105,590) |
Accumulated other comprehensive loss | (178,774) | (151,865) |
Total Verint Systems Inc. stockholders' equity | 1,178,402 | 1,229,368 |
Noncontrolling interests | 14,504 | 13,069 |
Total stockholders' equity | 1,192,906 | 1,242,437 |
Total liabilities and stockholders' equity | $ 3,094,708 | $ 3,016,058 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Apr. 30, 2020 | Jan. 31, 2020 |
Statement of Financial Position [Abstract] | ||
Allowance for Doubtful Accounts | $ 6,300 | $ 5,300 |
Preferred stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Preferred stock, authorized (in shares) | 2,207,000 | 2,207,000 |
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Common stock, authorized (in shares) | 120,000,000 | 120,000,000 |
Common stock, issued (in shares) | 68,930,000 | 68,529,000 |
Common Stock, Shares, Outstanding | 64,526,000 | 64,738,000 |
Treasury stock, (in shares) | 4,404,000 | 3,791,000 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | |
Apr. 30, 2020 | Apr. 30, 2019 | |
Revenue: | ||
Total revenue | $ 287,295 | $ 315,259 |
Cost of revenue: | ||
Amortization of acquired technology | 4,609 | 6,707 |
Total cost of revenue | 102,326 | 114,188 |
Gross profit | 184,969 | 201,071 |
Operating expenses: | ||
Research and development, net | 59,079 | 57,169 |
Selling, general and administrative | 111,651 | 121,721 |
Amortization of other acquired intangible assets | 8,065 | 7,713 |
Total operating expenses | 178,795 | 186,603 |
Operating income | 6,174 | 14,468 |
Other income (expense), net: | ||
Interest income | 1,017 | 1,426 |
Interest expense | (10,698) | (9,934) |
Other expense, net | (2,230) | (790) |
Total other expense, net | (11,911) | (9,298) |
(Loss) income before (benefit) provision for income taxes | (5,737) | 5,170 |
(Benefit) Provision for income taxes | (1,762) | 1,409 |
Net (loss) income | (3,975) | 3,761 |
Net income attributable to noncontrolling interests | 2,039 | 2,185 |
Net (loss) income attributable to Verint Systems Inc. | $ (6,014) | $ 1,576 |
Net (loss) income per common share attributable to Verint Systems Inc.: | ||
Basic (in dollars per share) | $ (0.09) | $ 0.02 |
Diluted (in dollars per share) | $ (0.09) | $ 0.02 |
Weighted-average common shares outstanding | ||
Basic (in shares) | 64,376 | 65,438 |
Diluted (in shares) | 64,376 | 67,088 |
Product | ||
Revenue: | ||
Revenue | $ 77,284 | $ 104,224 |
Total revenue | 77,284 | 104,224 |
Cost of revenue: | ||
Cost of revenue | 21,318 | 28,120 |
Service and support | ||
Revenue: | ||
Revenue | 210,011 | 211,035 |
Total revenue | 210,011 | 211,035 |
Cost of revenue: | ||
Cost of revenue | $ 76,399 | $ 79,361 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Comprehensive Loss - USD ($) $ in Thousands | 3 Months Ended | |
Apr. 30, 2020 | Apr. 30, 2019 | |
Net (loss) income | $ (3,975) | $ 3,761 |
Other comprehensive loss, net of reclassification adjustments: | ||
Foreign currency translation adjustments | (20,999) | (3,962) |
Benefit from income taxes on net increase (decrease) from foreign exchange contracts and interest rate swap designated as hedges | 1,548 | 294 |
Other comprehensive loss | (27,268) | (4,404) |
Comprehensive loss | (31,243) | (643) |
Comprehensive income attributable to noncontrolling interests | 1,680 | 2,079 |
Comprehensive loss attributable to Verint Systems Inc. | (32,923) | (2,722) |
Foreign currency forward contracts | ||
Other comprehensive loss, net of reclassification adjustments: | ||
Other Comprehensive Income (Loss), Unrealized Gain (Loss) on Derivatives Arising During Period, before Tax | (873) | 1,281 |
Interest rate swap | ||
Other comprehensive loss, net of reclassification adjustments: | ||
Other Comprehensive Income (Loss), Unrealized Gain (Loss) on Derivatives Arising During Period, before Tax | $ (6,944) | $ (2,017) |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Stockholders' Equity - USD ($) $ in Thousands | Total | Common Stock | Additional Paid-in Capital | Treasury Stock | Accumulated Deficit | Accumulated Other Comprehensive Loss | Total Verint Systems Inc. Stockholders' Equity | Noncontrolling Interests |
Balances at Jan. 31, 2019 | $ 1,260,804 | $ 67 | $ 1,586,266 | $ (57,598) | $ (134,274) | $ (145,225) | $ 1,249,236 | $ 11,568 |
Balances (in shares) at Jan. 31, 2019 | 65,333,000 | |||||||
Increase (Decrease) in Stockholders' Equity | ||||||||
Net income (loss) | 3,761 | $ 0 | 0 | 0 | 1,576 | 0 | 1,576 | 2,185 |
Other comprehensive loss | (4,404) | 0 | 0 | 0 | 0 | (4,298) | (4,298) | (106) |
Stock-based compensation - equity-classified awards | 14,890 | 0 | 14,890 | 0 | 0 | 0 | 14,890 | 0 |
Common stock issued, or to be issued, for stock awards and stock bonuses | 0 | $ 0 | 0 | 0 | 0 | 0 | 0 | 0 |
Common stock issued, or to be issued, for stock awards and stock bonuses (in shares) | 448,000 | |||||||
Treasury stock acquired | $ (474) | $ 0 | 0 | 474 | 0 | 0 | (474) | 0 |
Treasury stock acquired (in shares) | (8,000) | (8,000) | ||||||
Balances at Apr. 30, 2019 | $ 1,274,577 | $ 67 | 1,601,156 | (58,072) | (132,698) | (149,523) | 1,260,930 | 13,647 |
Balances (in shares) at Apr. 30, 2019 | 65,773,000 | |||||||
Balances at Jan. 31, 2019 | 1,260,804 | $ 67 | 1,586,266 | (57,598) | (134,274) | (145,225) | 1,249,236 | 11,568 |
Balances (in shares) at Jan. 31, 2019 | 65,333,000 | |||||||
Balances at Jan. 31, 2020 | 1,242,437 | $ 68 | 1,660,889 | (174,134) | (105,590) | (151,865) | 1,229,368 | 13,069 |
Balances (in shares) at Jan. 31, 2020 | 64,738,000 | |||||||
Increase (Decrease) in Stockholders' Equity | ||||||||
Net income (loss) | (3,975) | $ 0 | 0 | 0 | (6,014) | 0 | (6,014) | 2,039 |
Other comprehensive loss | (27,268) | 0 | 0 | 0 | 0 | (26,909) | (26,909) | (359) |
Stock-based compensation - equity-classified awards | 15,029 | 0 | 15,029 | 0 | 0 | 0 | 15,029 | 0 |
Common stock issued, or to be issued, for stock awards and stock bonuses | 1,846 | $ 1 | 1,845 | 0 | 0 | 0 | 1,846 | 0 |
Common stock issued, or to be issued, for stock awards and stock bonuses (in shares) | 399,000 | |||||||
Exercises of stock options | 12 | $ 0 | 12 | 0 | 0 | 0 | 12 | 0 |
Exercises of stock options (in shares) | 2,000 | |||||||
Treasury stock acquired | $ (33,990) | $ 0 | 0 | 33,990 | 0 | 0 | (33,990) | 0 |
Treasury stock acquired (in shares) | (613,000) | (613,000) | ||||||
Distribution to noncontrolling interest | $ (245) | $ 0 | 0 | 0 | 0 | 0 | 0 | (245) |
Balances at Apr. 30, 2020 | 1,192,906 | $ 69 | 1,677,775 | (208,124) | (112,544) | (178,774) | 1,178,402 | 14,504 |
Balances (in shares) at Apr. 30, 2020 | 64,526,000 | |||||||
Increase (Decrease) in Stockholders' Equity | ||||||||
Cumulative effect of new accounting principle in period of adoption | Accounting Standards Update 2016-13 | $ (940) | $ 0 | $ 0 | $ 0 | $ (940) | $ 0 | $ (940) | $ 0 |
Condensed Consolidated Statem_4
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |
Apr. 30, 2020 | Apr. 30, 2019 | Jan. 31, 2020 | |
Cash flows from operating activities: | |||
Net (loss) income | $ (3,975) | $ 3,761 | |
Adjustments to reconcile net (loss) income to net cash provided by operating activities: | |||
Depreciation and amortization | 23,931 | 22,954 | |
Stock-based compensation, excluding cash-settled awards | 14,192 | 17,065 | |
Amortization of discount on convertible notes | 3,226 | 3,061 | |
Non-cash gains on derivative financial instruments, net | (1,014) | (549) | |
Other non-cash items, net | (3,537) | 2,646 | |
Changes in operating assets and liabilities, net of effects of business combinations: | |||
Accounts receivable | 70,087 | 58,900 | |
Contract assets | (2,094) | 39 | |
Inventories | (5,118) | (3,118) | |
Prepaid expenses and other assets | (11,630) | 5,268 | |
Accounts payable and accrued expenses | 564 | 8,487 | |
Contract liabilities | (14,776) | (24,648) | |
Other, net | 1,934 | (725) | |
Net cash provided by operating activities | 75,978 | 93,063 | |
Cash flows from investing activities: | |||
Cash paid for business combinations, including adjustments, net of cash acquired | 0 | (20,210) | |
Purchases of property and equipment | (8,835) | (8,331) | |
Purchases of investments | (15,198) | (9,995) | |
Maturities and sales of investments | 15,648 | 2,965 | |
Cash paid for capitalized software development costs | (3,146) | (2,819) | |
Change in restricted bank time deposits, and other investing activities, net | 20,824 | 2,941 | |
Net cash provided by (used in) investing activities | 9,293 | (35,449) | |
Cash flows from financing activities: | |||
Proceeds from borrowings, net of original issuance discount | 155,000 | 0 | |
Repayments of borrowings and other financing obligations | (1,898) | (1,584) | |
Purchases of treasury stock | (36,836) | (474) | |
Distribution paid to noncontrolling interest | (245) | 0 | |
Payments of deferred purchase price and contingent consideration for business combinations (financing portion) and other financing activities | (1,282) | (11,674) | |
Net cash provided by (used in) financing activities | 114,739 | (13,732) | |
Foreign currency effects on cash, cash equivalents, restricted cash, and restricted cash equivalents | (3,106) | (853) | |
Net increase in cash, cash equivalents, restricted cash, and restricted cash equivalents | 196,904 | 43,029 | |
Cash, cash equivalents, restricted cash, and restricted cash equivalents - beginning of period | 411,657 | 412,699 | $ 412,699 |
Cash, cash equivalents, restricted cash, and restricted cash equivalents - end of period | 608,561 | 455,728 | 411,657 |
Reconciliation of cash, cash equivalents, restricted cash, and restricted cash equivalents at end of period to balance sheet [Abstract] | |||
Cash and cash equivalents | 556,671 | 412,024 | 379,146 |
Restricted cash and cash equivalents included in restricted cash and cash equivalents, and restricted bank time deposits | 38,004 | 39,373 | |
Restricted cash and cash equivalents included in other assets | 13,886 | 4,331 | |
Cash, cash equivalents, restricted cash, and restricted cash equivalents - end of period | $ 608,561 | $ 455,728 | $ 411,657 |
BASIS OF PRESENTATION AND SIGNI
BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES | 3 Months Ended |
Apr. 30, 2020 | |
Accounting Policies [Abstract] | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 1. BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES Description of Business Unless the context otherwise requires, the terms “Verint”, “we”, “us”, and “our” in these notes to condensed consolidated financial statements refer to Verint Systems Inc. and its consolidated subsidiaries. Verint is a global leader in Actionable Intelligence solutions. In a world of massive information growth, our solutions empower organizations with crucial, actionable insights and enable decision makers to anticipate, respond, and take action. Today, over 10,000 organizations in more than 180 countries, including over 85 percent of the Fortune 100, use Verint’s Actionable Intelligence solutions, deployed in the cloud and on-premises, to make more informed, timely, and effective decisions. Our Actionable Intelligence leadership is powered by innovative, enterprise-class software built with artificial intelligence, analytics, automation, and deep domain expertise established by working closely with some of the most sophisticated and forward-thinking organizations in the world. We believe we have one of the industry's strongest research and development (“R&D”) teams focused on actionable intelligence consisting of approximately one-third of our approximately 6,300 professionals. Our innovative solutions are backed-up by a strong IP portfolio with over 1,000 patents and patent applications worldwide across areas including data capture, artificial intelligence, machine learning, unstructured data analytics, predictive analytics and automation. On December 4, 2019, we announced our intention to separate into two independent publicly traded companies: one which will consist of our Customer Engagement Solutions business, and one which will consist of our Cyber Intelligence Solutions business. We expect to implement the separation through a pro-rata distribution of common stock of a new entity that will hold the Cyber Intelligence Solutions business to our stockholders (the “Spin-Off”) that is intended to be tax-free to our stockholders for U.S. federal income tax purposes. We currently expect to complete the Spin-Off shortly after the end of this fiscal year ending January 31, 2021, though this timeline may be impacted by the current business environment brought on by the COVID-19 pandemic. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Overview—Recent Developments” under Item 2 of this report for a more detailed discussion of the planned Spin-Off. On December 4, 2019, we also announced that Valor Parent LP (the “Apax Investor”), an affiliate of Apax Partners (“Apax”) would make an investment in us in an amount of up to $400 million. Under the terms of the Investment Agreement, dated as of December 4, 2019 (the “Investment Agreement”), the Apax Investor initially purchased $200 million of our Series A convertible preferred stock, which closed on May 7, 2020. Please refer to Note 16, “Subsequent Events” for additional information regarding the closing of the initial tranche. Shortly following the Spin-Off, the Apax Investor will purchase, subject to certain conditions, up to $200 million of Series B convertible preferred stock in the Company, as the entity holding the Customer Engagement Solutions business. Following the closing of the Series A investment, Apax’s ownership in us on an as-converted basis is approximately 5.5%. Following completion of the Spin-Off and assuming the issuance of the Series B preferred stock, Apax’s ownership in us on an as-converted basis will be between 11.5% and 15%. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources—Overview” under Item 2 of this report for a more detailed discussion of the planned Apax investment. Headquartered in Melville, New York, we support our customers around the globe directly and with an extensive network of selling and support partners. Impact of COVID-19 Pandemic On March 11, 2020, the World Health Organization declared the COVID-19 outbreak a global pandemic. The outbreak has reached all of the regions in which we do business, and governmental authorities around the world have implemented numerous measures attempting to contain and mitigate the effects of the virus, including travel bans and restrictions, border closings, quarantines, shelter-in-place orders, shutdowns, limitations or closures of non-essential businesses, and social distancing requirements. Companies around the world, including us, our customers, partners, and vendors, have implemented actions in response, including among others, office closings, site restrictions, and employee travel restrictions. The global spread of COVID-19 and actions taken in response have negatively affected us, our customers, partners, and vendors and caused significant economic and business disruption the extent and duration of which is not currently known. In response to these challenges, we quickly adjusted our operations to work from home and we believe our business continuity plan is working well. We are monitoring and assessing the impact of the COVID-19 pandemic daily, including recommendations and orders issued by government and public health authorities. We continue to work to help our customers meet their business continuity needs and help keep the world safe during this difficult time and are managing our operations with a view to resuming normal business activity as soon as possible. See Part I, Item 2 “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Overview—Recent Developments” of this report for a more detailed discussion of the impact of COVID-19 on our business. Preparation of Condensed Consolidated Financial Statements The condensed consolidated financial statements included herein have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and on the same basis as the audited consolidated financial statements included in our Annual Report on Form 10-K for the year ended January 31, 2020 filed with the U.S. Securities and Exchange Commission (“SEC”), except for the recently adopted accounting pronouncements described below. The condensed consolidated statements of operations, comprehensive income (loss), stockholders’ equity, and cash flows for the periods ended April 30, 2020 and 2019, and the condensed consolidated balance sheet as of April 30, 2020, are not audited but reflect all adjustments that are of a normal recurring nature and that are considered necessary for a fair presentation of the results for the periods shown. The condensed consolidated balance sheet as of January 31, 2020 is derived from the audited consolidated financial statements presented in our Annual Report on Form 10-K for the year ended January 31, 2020. Certain information and disclosures normally included in annual consolidated financial statements have been omitted pursuant to the rules and regulations of the SEC. Because the condensed consolidated interim financial statements do not include all of the information and disclosures required by GAAP for a complete set of financial statements, they should be read in conjunction with the audited consolidated financial statements and notes included in our Annual Report on Form 10-K for the year ended January 31, 2020 filed with the SEC. The results for interim periods are not necessarily indicative of a full year’s results. Principles of Consolidation The accompanying condensed consolidated financial statements include the accounts of Verint Systems Inc., our wholly owned or otherwise controlled subsidiaries, and a joint venture in which we hold a 50% equity interest. The joint venture is a variable interest entity in which we are the primary beneficiary. Noncontrolling interests in less than wholly owned subsidiaries are reflected within stockholders’ equity on our condensed consolidated balance sheet, but separately from our stockholders’ equity. We hold an option to acquire the noncontrolling interests in two majority owned subsidiaries and we account for the option as an in-substance investment in the noncontrolling common stock of each such subsidiary. We include the fair value of the option within other liabilities and do not recognize noncontrolling interests in these subsidiaries. Equity investments in companies in which we have less than a 20% ownership interest and cannot exercise significant influence, and which do not have readily determinable fair values, are accounted for at cost, adjusted for changes resulting from observable price changes in orderly transactions for an identical or similar investment of the same issuer, less any impairment. We include the results of operations of acquired companies from the date of acquisition. All significant intercompany transactions and balances are eliminated. Use of Estimates The preparation of financial statements in conformity with GAAP requires our management to make estimates and assumptions, which may affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements and the reported amounts of revenue and expenses during the reporting period. In light of the currently unknown extent and duration of the COVID-19 pandemic, we face a greater degree of uncertainty than normal in making the judgments and estimates needed to apply to certain of our significant accounting policies. We assessed certain accounting matters that generally require consideration of forecasted financial information in context with the information reasonably available to us and the unknown future impacts COVID-19 as of April 30, 2020 and through the date of this report. These estimates may change, as new events occur and additional information is obtained. Actual results could differ materially from these estimates under different assumptions or conditions. Significant Accounting Policies There have been no material changes in our significant accounting policies during the three months ended April 30, 2020, as compared to the significant accounting policies described in Note 1 to the consolidated financial statements included in our Annual Report on Form 10-K for the year ended January 31, 2020. Recently Adopted Accounting Pronouncements In June 2016, the Financial Accounting Standards Board ("FASB") issued Accounting Standard Update ("ASU") No. 2016-13, Financial Instruments - Credit Losses (Topic 326) - Measurement of Credit Losses on Financial Instruments. This new standard requires entities to measure expected credit losses for certain financial assets held at the reporting date using a current expected credit loss model, which is based on historical experience, adjusted for current conditions and reasonable and supportable forecasts. The Company's financial instruments within the scope of this guidance primarily includes accounts receivable and contract assets. On February 1, 2020, we adopted the new standard under the modified retrospective approach, such that comparative information has not been restated and continues to be reported under accounting standards in effect for those periods. The adoption of ASU No. 2016-13 resulted in a $1.1 million increase in our allowance for expected credit losses related to accounts receivable and contract assets, a $0.2 million increase to deferred tax assets, and an impact of $0.9 million to our accumulated deficit. The new accounting standard did not have a material impact on our condensed consolidated financial statements, including accounting policies, given our limited historical write-off activity. In August 2018, the FASB issued ASU No. 2018-15, Intangibles-Goodwill and Other-Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract , which requires customers in a hosting arrangement that is a service contract to follow existing internal-use software guidance to determine which implementation costs to capitalize and which costs to expense. Under the new standard, implementation costs are deferred and presented in the same financial statement caption on the condensed consolidated balance sheet as a prepayment of related arrangement fees. The deferred costs are recognized over the term of the arrangement in the same financial statement caption in the condensed consolidated income statement as the related fees of the arrangement. We adopted ASU No. 2018-15 prospectively to eligible costs incurred on or after February 1, 2020 and the implementation did not have a material impact on our condensed consolidated financial statements. In August 2018, the FASB issued ASU No. 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework-Changes to The Disclosure Requirements for Fair Value Measurement , which modifies the disclosure requirements on fair value measurements. Since the standard affects only disclosure requirements, the adoption of the standard did not have an impact on our condensed consolidated financial statements. New Accounting Pronouncements Not Yet Effective In December 2019, the FASB issued ASU No. 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes |
REVENUE RECOGNITION REVENUE REC
REVENUE RECOGNITION REVENUE RECOGNITION | 3 Months Ended |
Apr. 30, 2020 | |
Revenue from Contract with Customer [Abstract] | |
Revenue from Contracts with Customer [Text Block] | REVENUE RECOGNITION We derive our revenue primarily from the licensing of our software products and related services and support based on when control of the software passes to our customers or the services are provided, in an amount that reflects the consideration we expect to be entitled to in exchange for such goods or services. Revenue is reported net of applicable sales and use tax, value-added tax and other transaction taxes imposed on the related transaction, including mandatory government charges that are passed through to our customers. We determine revenue recognition through the following five steps: • Identification of the contract, or contracts, with a customer • Identification of the performance obligations in the contract • Determination of the transaction price • Allocation of the transaction price to the performance obligations in the contract • Recognition of revenue when, or as, performance obligations are satisfied. We account for a contract when it has approval and commitment from both parties, the rights of the parties are identified, payment terms are identified, the contract has commercial substance, and collectability of consideration is probable. Disaggregation of Revenue The following table provides information about disaggregated revenue for our Customer Engagement and Cyber Intelligence segments by product revenue and service and support revenue, as well as by the recurring or nonrecurring nature of revenue for each business segment. Recurring revenue is the portion of our revenue that we believe is likely to be renewed in the future. The recurrence of these revenue streams in future periods depends on a number of factors including contractual periods and customers' renewal decisions. For our Customer Engagement segment: • Recurring revenue primarily consists of cloud revenue and initial and renewal support revenue. ◦ Cloud revenue consists primarily of software as a service (“SaaS”) revenue with some optional managed services revenue. ◦ SaaS revenue consists predominately of bundled SaaS (software with standard managed services) with some unbundled SaaS (software licensing rights sold separately from managed services and accounted for as term-based licenses). Unbundled SaaS can be deployed in the cloud either by us or a cloud partner. ◦ Bundled SaaS revenue is recognized over time and unbundled SaaS revenue is recognized at a point in time. Unbundled SaaS contracts are eligible for renewal after the initial fixed term, which in most cases is between a one- and three-year time frame. • Nonrecurring revenue primarily consists of our perpetual licenses, consulting, implementation and installation services, and training. For our Cyber Intelligence segment: • Recurring revenue primarily consists of initial and renewal support, subscription software licenses, and SaaS in certain limited transactions. • Nonrecurring revenue primarily consists of our perpetual licenses, long-term projects including software customizations that are recognized over time as control transfers to the customer using a percentage-of-completion (“POC”) method, consulting, implementation and installation services, training, and hardware. Three Months Ended Three Months Ended (in thousands) Customer Engagement Cyber Intelligence Total Customer Engagement Cyber Intelligence Total Revenue: Product $ 33,997 $ 43,287 $ 77,284 $ 54,002 $ 50,222 $ 104,224 Service and support 151,868 58,143 210,011 153,093 57,942 211,035 Total revenue $ 185,865 $ 101,430 $ 287,295 $ 207,095 $ 108,164 $ 315,259 Revenue by recurrence: Recurring revenue $ 129,070 $ 56,038 $ 185,108 $ 123,358 $ 46,817 $ 170,175 Nonrecurring revenue 56,795 45,392 102,187 83,737 61,347 145,084 Total revenue $ 185,865 $ 101,430 $ 287,295 $ 207,095 $ 108,164 $ 315,259 The following table provides a further disaggregation of revenue for our Customer Engagement segment. Three Months Ended (in thousands) 2020 2019 Customer Engagement revenue Recurring revenue Bundled SaaS revenue $ 33,393 $ 27,204 Unbundled SaaS revenue 5,472 6,252 Optional managed services revenue 14,132 13,629 Total cloud revenue 52,997 47,085 Support revenue 76,073 76,273 Total recurring revenue 129,070 123,358 Nonrecurring revenue Perpetual revenue 28,525 47,602 Professional services revenue 28,270 36,135 Total nonrecurring revenue 56,795 83,737 Total Customer Engagement revenue $ 185,865 $ 207,095 Contract Balances The following table provides information about accounts receivable, contract assets, and contract liabilities from contracts with customers: (in thousands) April 30, 2020 January 31, 2020 Accounts receivable, net $ 308,304 $ 382,435 Contract assets, net $ 62,249 $ 64,961 Long-term contract assets (included in Other assets) $ 9,260 $ 1,358 Contract liabilities $ 378,548 $ 397,350 Long-term contract liabilities $ 40,566 $ 40,565 We receive payments from customers based upon contractual billing schedules, and accounts receivable are recorded when the right to consideration becomes unconditional. Contract assets are rights to consideration in exchange for goods or services that we have transferred to a customer when that right is conditional on something other than the passage of time. The majority of our contract assets represent unbilled amounts related to multi-year unbundled SaaS contracts and arrangements where our right to consideration is subject to the contractually agreed upon billing schedule. We expect billing and collection of a majority of our contract assets to occur within the next twelve months and asset impairment charges related to contract assets were immaterial in the three months ended April 30, 2020 and 2019. There are two customers in our Cyber Intelligence segment that accounted for a combined $47.3 million and $51.7 million of our aggregated accounts receivable and contract assets at April 30, 2020 and January 31, 2020, respectively. These amounts result from both direct and indirect contracts with governmental agencies outside of the U.S. which we believe present insignificant credit risk. Contract liabilities represent consideration received or consideration which is unconditionally due from customers prior to transferring goods or services to the customer under the terms of the contract. Revenue recognized during the three months ended April 30, 2020 and 2019 from amounts included in contract liabilities at the beginning of each period was $139.1 million and $134.6 million, respectively. Remaining Performance Obligations Transaction price allocated to remaining performance obligations (“RPO”) represents contracted revenue that has not yet been recognized, which includes contract liabilities and non-cancelable amounts that will be invoiced and recognized as revenue in future periods. The majority of our arrangements are for periods of up to three years, with a significant portion being one year or less. We elected to exclude amounts of variable consideration attributable to sales- or usage-based royalties in exchange for a license of our IP from the remaining performance obligations. The timing and amount of revenue recognition for our remaining performance obligations is influenced by several factors, including seasonality, the timing of support renewals, and the revenue recognition for certain projects, particularly in our Cyber Intelligence segment, that can extend over longer periods of time, delivery under which, for various reasons, may be delayed, modified, or canceled. Further, we have historically generated a large portion of our business each quarter by orders that are sold and fulfilled within the same reporting period. Therefore, the amount of remaining obligations may not be a meaningful indicator of future results. The following table provides information about remaining performance obligations for each of our operating segments: April 30, 2020 January 31, 2020 (in thousands) Customer Engagement Cyber Intelligence Total Customer Engagement Cyber Intelligence Total RPO: Expected to be recognized within 1 year $ 363,496 $ 363,710 $ 727,206 $ 374,982 $ 356,677 $ 731,659 Expected to be recognized in more than 1 year 113,340 197,729 311,069 117,497 225,056 342,553 Total RPO $ 476,836 $ 561,439 $ 1,038,275 $ 492,479 $ 581,733 $ 1,074,212 |
NET (LOSS) INCOME PER COMMON SH
NET (LOSS) INCOME PER COMMON SHARE ATTRIBUTABLE TO VERINT SYSTEMS INC. | 3 Months Ended |
Apr. 30, 2020 | |
Earnings Per Share [Abstract] | |
NET (LOSS) INCOME PER COMMON SHARE ATTRIBUTABLE TO VERINT SYSTEMS INC. | 3. NET (LOSS) INCOME PER COMMON SHARE ATTRIBUTABLE TO VERINT SYSTEMS INC. The following table summarizes the calculation of basic and diluted net (loss) income per common share attributable to Verint Systems Inc. for the three months ended April 30, 2020 and 2019: Three Months Ended (in thousands, except per share amounts) 2020 2019 Net (loss) income $ (3,975) $ 3,761 Net income attributable to noncontrolling interests 2,039 2,185 Net (loss) income attributable to Verint Systems Inc. $ (6,014) $ 1,576 Weighted-average shares outstanding: Basic 64,376 65,438 Dilutive effect of employee equity award plans — 1,650 Dilutive effect of 1.50% convertible senior notes — — Dilutive effect of warrants — — Diluted 64,376 67,088 Net (loss) income per common share attributable to Verint Systems Inc.: Basic $ (0.09) $ 0.02 Diluted $ (0.09) $ 0.02 We excluded the following weighted-average potential common shares from the calculations of diluted net income per common share during the applicable periods because their inclusion would have been anti-dilutive: Three Months Ended (in thousands) 2020 2019 Common shares excluded from calculation: Stock options and restricted stock-based awards 1,491 606 1.50% convertible senior notes 6,205 6,205 Warrants 6,205 6,205 In periods for which we report a net loss attributable to Verint Systems Inc., basic net loss per common share and diluted net loss per common share are identical since the effect of all potential common shares is anti-dilutive and therefore excluded. Our 1.50% convertible senior notes (“Notes”) will not impact the calculation of diluted net income per share unless the average price of our common stock, as calculated in accordance with the terms of the indenture governing the Notes, exceeds the conversion price of $64.46 per share. Likewise, diluted net income per share will not include any effect from the Warrants (as defined in Note 7, “Long-Term Debt”) unless the average price of our common stock, as calculated under the terms of the Warrants, exceeds the exercise price of $75.00 per share. |
CASH, CASH EQUIVALENTS AND SHOR
CASH, CASH EQUIVALENTS AND SHORT-TERM INVESTMENTS | 3 Months Ended |
Apr. 30, 2020 | |
Cash, Cash Equivalents, and Short-term Investments [Abstract] | |
Cash, Cash Equivalents and Short-term Investments | CASH, CASH EQUIVALENTS, AND SHORT-TERM INVESTMENTS The following tables summarize our cash, cash equivalents, and short-term investments as of April 30, 2020 and January 31, 2020: April 30, 2020 (in thousands) Cost Basis Gross Unrealized Gains Gross Unrealized Losses Estimated Fair Value Cash and cash equivalents: Cash and bank time deposits $ 411,926 $ — $ — $ 411,926 Money market funds 144,745 — — 144,745 Total cash and cash equivalents $ 556,671 $ — $ — $ 556,671 Short-term investments: Bank time deposits $ 19,741 $ — $ — $ 19,741 Total short-term investments $ 19,741 $ — $ — $ 19,741 January 31, 2020 (in thousands) Cost Basis Gross Unrealized Gains Gross Unrealized Losses Estimated Fair Value Cash and cash equivalents: Cash and bank time deposits $ 379,057 $ — $ — $ 379,057 Money market funds 89 — — 89 Total cash and cash equivalents $ 379,146 $ — $ — $ 379,146 Short-term investments: Bank time deposits $ 20,215 $ — $ — $ 20,215 Total short-term investments $ 20,215 $ — $ — $ 20,215 Bank time deposits which are reported within short-term investments consist of deposits held outside of the U.S. with maturities of greater than 90 days, or without specified maturity dates which we intend to hold for periods in excess of 90 days. All other bank deposits are included within cash and cash equivalents. |
BUSINESS COMBINATIONS
BUSINESS COMBINATIONS | 3 Months Ended |
Apr. 30, 2020 | |
Business Combinations [Abstract] | |
BUSINESS COMBINATIONS | 5. BUSINESS COMBINATIONS Three Months Ended April 30, 2020 We did not complete any business combinations during the three months ended April 30, 2020. Year Ended January 31, 2020 During the year ended January 31, 2020, we completed four business combinations: • On February 1, 2019, we completed the acquisition of a SaaS workforce optimization company focused on the small and medium-sized business (“SMB”) market as part of our strategy to expand our SMB portfolio. This company has been integrated into our Customer Engagement segment. • On July 25, 2019, we completed the acquisition of a SaaS company focused on cloud-based knowledge management solutions as part of our strategy to add additional artificial intelligence and machine learning capabilities into our portfolio. This company has been integrated into our Customer Engagement segment. • On December 18, 2019, we completed the acquisition of two software companies under common control focused on multi source intelligence and fusion analytics domains. These companies are being integrated into our Cyber Intelligence segment. • On January 13, 2020, we completed the acquisition of a SaaS based company providing web and mobile session replay solutions. This company is being integrated into our Customer Engagement segment. These business combinations were not individually material to our condensed consolidated financial statements. The combined consideration for these business combinations was approximately $89.3 million consisted of (i) $76.2 million of combined cash paid at closings or shortly thereafter, partially offset by $2.4 million of cash acquired, resulting in net cash consideration at closing of $73.8 million; and (ii) the fair value of the contingent consideration arrangements described below of $15.3 million; offset by (iii) $2.1 million of other purchase price adjustments. For three of the business combinations, we agreed to make potential additional cash payments to the respective former shareholders aggregating up to approximately $23.5 million, contingent upon the achievement of certain performance targets over periods extending through January 2022, the fair value of which was estimated to be $15.3 million at the acquisition date. Cash paid for these business combinations was funded by cash on hand. The purchase prices for these business combinations were allocated to the tangible and intangible assets acquired and liabilities assumed based on their estimated fair values on the acquisition dates, with the remaining unallocated purchase prices recorded as goodwill. The fair value assigned to identifiable intangible assets acquired were determined primarily by using the income approach, which discounts expected future cash flows to present value using estimates and assumptions determined by management. Included among the factors contributing to the recognition of goodwill in these transactions were synergies in products and technologies, and the addition of skilled, assembled workforces. Of the $50.4 million of goodwill associated with these business combinations, $39.1 million and $11.3 million was assigned to our Customer Engagement and Cyber Intelligence segments, respectively, and $15.7 million of which is deductible for income tax purposes. Revenue and net income (loss) attributable to these acquisitions for the year ended January 31, 2020 were not material. Transaction and related costs, consisting primarily of professional fees and integration expenses, directly related to these acquisitions, totaled $1.1 million and $1.0 million for the three months ended months ended April 30, 2020 and April 30, 2019, respectively. All transaction and related costs were expensed as incurred and are included in selling, general and administrative expenses. The purchase price allocations for the business combinations completed subsequent to April 30, 2019 have been prepared on a preliminary basis and changes to those allocations may occur as additional information becomes available during the respective measurement periods (up to one year from the respective acquisition dates). Fair values still under review include values assigned to identifiable intangible assets, goodwill, deferred income taxes, and reserves for uncertain income tax positions. The following table sets forth the components and the allocations of the combined purchase prices for the business combinations completed during the year ended January 31, 2020 including adjustments identified subsequent to the valuation date, none of which were material: (in thousands) Amount Components of Purchase Prices: Cash $ 76,198 Fair value of contingent consideration 15,253 Other purchase price adjustments (2,137) Total purchase prices $ 89,314 Allocation of Purchase Prices: Net tangible assets (liabilities): Accounts receivable $ 3,950 Other current assets, including cash acquired 14,394 Other assets 6,556 Current and other liabilities (8,531) Contract liabilities - current and long-term (3,794) Deferred income taxes (4,061) Net tangible assets 8,514 Identifiable intangible assets: Customer relationships 13,299 Developed technology 14,443 Trademarks and trade names 1,367 Non-compete agreements 1,307 Total identifiable intangible assets 30,416 Goodwill 50,384 Total purchase prices allocation $ 89,314 For these acquisitions, customer relationships, developed technology, trademarks and trade names, and non-compete agreements were assigned estimated useful lives of from five years to nine years, four years to five years, and three years to five years, and three years, respectively, the weighted average of which is approximately 6.1 years. Other Business Combination Information The acquisition date fair values of contingent consideration obligations associated with business combinations are estimated based on probability adjusted present values of the consideration expected to be transferred using significant inputs that are not observable in the market. Key assumptions used in these estimates include probability assessments with respect to the likelihood of achieving the performance targets and discount rates consistent with the level of risk of achievement. At each reporting date, we revalue the contingent consideration obligations to their fair values and record increases and decreases in fair value within selling, general, and administrative expenses in our condensed consolidated statements of operations. Changes in the fair value of the contingent consideration obligations result from changes in discount periods and rates, and changes in probability assumptions with respect to the likelihood of achieving the performance targets. For the three months ended April 30, 2020 and 2019, we recorded a benefit of $4.8 million and a charge of $1.2 million, respectively, within selling, general and administrative expenses for changes in the fair values of contingent consideration obligations associated with business combinations. The aggregate fair values of the remaining contingent consideration obligations associated with business combinations was $35.0 million at April 30, 2020, of which $20.4 million was recorded within accrued expenses and other current liabilities, and $14.6 million was recorded within other liabilities. Payments of contingent consideration earned under these agreements were $3.0 million and $6.4 million for the three months ended April 30, 2020 and 2019, respectively. |
INTANGIBLE ASSETS AND GOODWILL
INTANGIBLE ASSETS AND GOODWILL | 3 Months Ended |
Apr. 30, 2020 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
INTANGIBLE ASSETS AND GOODWILL | 6. INTANGIBLE ASSETS AND GOODWILL Acquisition-related intangible assets consisted of the following as of April 30, 2020 and January 31, 2020: April 30, 2020 (in thousands) Cost Accumulated Net Intangible assets with finite lives: Customer relationships $ 458,725 $ (330,492) $ 128,233 Acquired technology 291,603 (243,894) 47,709 Trade names 12,823 (7,411) 5,412 Distribution network 4,440 (4,440) — Non-competition agreements 1,307 (158) 1,149 Total intangible assets $ 768,898 $ (586,395) $ 182,503 January 31, 2020 (in thousands) Cost Accumulated Net Intangible assets with finite lives: Customer relationships $ 465,130 $ (328,069) $ 137,061 Acquired technology 294,841 (241,585) 53,256 Trade names 12,957 (6,783) 6,174 Distribution network 4,440 (4,440) — Non-competition agreements 1,307 (34) 1,273 Total intangible assets $ 778,675 $ (580,911) $ 197,764 We considered the current and expected future economic and market conditions surrounding the COVID-19 pandemic to assess whether a triggering event had occurred that would result in a potential impairment of our indefinite-lived intangible assets. Based on this assessment, we concluded that a triggering event has not occurred which would require further impairment testing to be performed. The following table presents net acquisition-related intangible assets by reportable segment as of April 30, 2020 and January 31, 2020: April 30, January 31, (in thousands) 2020 2020 Customer Engagement $ 175,241 $ 189,896 Cyber Intelligence 7,262 7,868 Total $ 182,503 $ 197,764 Total amortization expense recorded for acquisition-related intangible assets was $12.7 million and $14.4 million for the three months ended April 30, 2020 and 2019, respectively. The reported amount of net acquisition-related intangible assets can fluctuate from the impact of changes in foreign currency exchange rates on intangible assets not denominated in U.S. dollars. Estimated future amortization expense on finite-lived acquisition-related intangible assets is as follows: (in thousands) Years Ending January 31, Amount 2021 (remainder of year) $ 36,856 2022 45,885 2023 37,978 2024 27,805 2025 11,754 2026 and thereafter 22,225 Total $ 182,503 Goodwill activity for the three months ended April 30, 2020, in total and by reportable segment, was as follows: Reportable Segment (in thousands) Total Customer Engagement Cyber Intelligence Three Months Ended April 30, 2020: Goodwill, gross, at January 31, 2020 $ 1,536,076 $ 1,367,111 $ 168,965 Accumulated impairment losses through January 31, 2020 (66,865) (56,043) (10,822) Goodwill, net, at January 31, 2020 1,469,211 1,311,068 158,143 Foreign currency translation and other (16,420) (15,764) (656) Business combinations, including adjustments to prior period acquisitions (357) — (357) Goodwill, net, at April 30, 2020 $ 1,452,434 $ 1,295,304 $ 157,130 Balance at April 30, 2020: Goodwill, gross, at April 30, 2020 $ 1,519,299 $ 1,351,347 $ 167,952 Accumulated impairment losses through April 30, 2020 (66,865) (56,043) (10,822) Goodwill, net, at April 30, 2020 $ 1,452,434 $ 1,295,304 $ 157,130 We evaluated whether there has been a change in circumstances as of April 30, 2020 and as of the date of this filing in response to the economic impacts seen globally from COVID-19. The valuation methodology to determine the fair value of the reporting units is sensitive to management's forecasts of future revenue, profitability and market conditions. At this time, the impact of COVID-19 on our forecasts is uncertain and increases the subjectivity that will be involved in evaluating goodwill for potential impairment. We do expect declines in our reporting unit fair values as a result of delayed or reduced demand for our products and services, driving lower revenue and operating income across our businesses. However, given the significant difference between the reporting unit fair values and their carrying values in the most recent quantitative analyses completed as of November 1, 2019, as well as expected long-term recovery within all reporting units, management does not believe that these events were severe enough to result in an impairment trigger. We will continue to monitor the environment to determine whether the impacts to our reporting units represent an event or change in circumstances that may trigger a need to assess for impairment. |
LONG-TERM DEBT
LONG-TERM DEBT | 3 Months Ended |
Apr. 30, 2020 | |
Long-term Debt, Unclassified [Abstract] | |
LONG-TERM DEBT | LONG-TERM DEBT The following table summarizes our long-term debt at April 30, 2020 and January 31, 2020: April 30, January 31, (in thousands) 2020 2020 1.50% Convertible Senior Notes $ 400,000 $ 400,000 June 2017 Term Loan 413,313 414,375 Borrowings under 2017 Revolving Credit Facility 200,000 45,000 Less: Unamortized debt discounts and issuance costs (18,673) (22,327) Total debt 994,640 837,048 Less: current maturities 4,250 4,250 Long-term debt $ 990,390 $ 832,798 Current maturities of long-term debt are reported within accrued expenses and other current liabilities on our condensed consolidated balance sheet. 1.50% Convertible Senior Notes On June 18, 2014, we issued $400.0 million in aggregate principal amount of 1.50% convertible senior notes due June 1, 2021 (“Notes”), unless earlier converted by the holders pursuant to their terms. Net proceeds from the Notes after underwriting discounts were $391.9 million. The Notes pay interest in cash semiannually in arrears at a rate of 1.50% per annum. The Notes were issued concurrently with our public issuance of 5,750,000 shares of common stock, the majority of the combined net proceeds of which were used to partially repay certain indebtedness under a prior credit agreement. The Notes are unsecured and are convertible into, at our election, cash, shares of common stock, or a combination of both, subject to satisfaction of specified conditions and during specified periods. If converted, we currently intend to pay cash in respect of the principal amount of the Notes. We currently expect to refinance the Notes at or prior to maturity with new convertible notes or other debt. The Notes have a conversion rate of 15.5129 shares of common stock per $1,000 principal amount of Notes, which represents an effective conversion price of approximately $64.46 per share of common stock and would result in the issuance of approximately 6,205,000 shares if all of the Notes were converted. The conversion rate has not changed since issuance of the Notes, although throughout the term of the Notes, the conversion rate may be adjusted upon the occurrence of certain events. On or after December 1, 2020 until the close of business on the second scheduled trading day immediately preceding the maturity date, holders may surrender their Notes for conversion regardless of whether any of the other specified conditions for conversion have been satisfied. As of April 30, 2020, the Notes were not convertible. In accordance with accounting guidance for convertible debt with a cash conversion option, we separately accounted for the debt and equity components of the Notes in a manner that reflected our estimated nonconvertible debt borrowing rate. We estimated the debt and equity components of the Notes to be $319.9 million and $80.1 million, respectively, at the issuance date, assuming a 5.00% non-convertible borrowing rate. The equity component was recorded as an increase to additional paid-in capital. The excess of the principal amount of the debt component over its carrying amount (the “debt discount”) is being amortized as interest expense over the term of the Notes using the effective interest method. The equity component is not remeasured as long as it continues to meet the conditions for equity classification. We allocated transaction costs related to the issuance of the Notes, including underwriting discounts, of $7.6 million and $1.9 million to the debt and equity components, respectively. Issuance costs attributable to the debt component of the Notes are presented as a reduction of long-term debt and are being amortized as interest expense over the term of the Notes, and issuance costs attributable to the equity component were netted with the equity component in additional paid-in capital. The carrying amount of the equity component, net of issuance costs, was $78.2 million at April 30, 2020. As of April 30, 2020, the carrying value of the debt component was $384.1 million, which is net of unamortized debt discount and issuance costs of $14.5 million and $1.4 million, respectively. Including the impact of the debt discount and related deferred debt issuance costs, the effective interest rate on the Notes was approximately 5.29% at April 30, 2020. Based on the closing market price of our common stock on April 30, 2020, the if-converted value of the Notes was less than the aggregate principal amount of the Notes. Note Hedges and Warrants Concurrently with the issuance of the Notes, we entered into convertible note hedge transactions (the “Note Hedges”) and sold warrants (the “Warrants”). The combination of the Note Hedges and the Warrants serves to increase the effective initial conversion price for the Notes to $75.00 per share. The Note Hedges and Warrants are each separate instruments from the Notes. Note Hedges Pursuant to the Note Hedges, we purchased call options on our common stock, under which we have the right to acquire from the counterparties up to approximately 6,205,000 shares of our common stock, subject to customary anti-dilution adjustments, at a price of $64.46, which equals the initial conversion price of the Notes. Our exercise rights under the Note Hedges generally trigger upon conversion of the Notes and the Note Hedges terminate upon maturity of the Notes, or the first day the Notes are no longer outstanding. The Note Hedges may be settled in cash, shares of our common stock, or a combination thereof, at our option, and are intended to reduce our exposure to potential dilution upon conversion of the Notes. We paid $60.8 million for the Note Hedges, which was recorded as a reduction to additional paid-in capital. As of April 30, 2020, we had not purchased any shares of our common stock under the Note Hedges. Warrants We sold the Warrants to several counterparties. The Warrants provide the counterparties rights to acquire from us up to approximately 6,205,000 shares of our common stock at a price of $75.00 per share. The Warrants expire incrementally on a series of expiration dates beginning in August 2021. At expiration, if the market price per share of our common stock exceeds the strike price of the Warrants, we will be obligated to issue shares of our common stock having a value equal to such excess. The Warrants could have a dilutive effect on net income per share to the extent that the market value of our common stock exceeds the strike price of the Warrants. Proceeds from the sale of the Warrants were $45.2 million and were recorded as additional paid-in capital. As of April 30, 2020, no Warrants had been exercised and all Warrants remained outstanding. The Note Hedges and Warrants both meet the requirements for classification within stockholders’ equity, and their respective fair values are not remeasured and adjusted as long as these instruments continue to qualify for stockholders’ equity classification. Credit Agreements 2017 Credit Agreement On June 29, 2017, we entered into a credit agreement (the “2017 Credit Agreement”) with certain lenders and terminated a prior credit agreement. The 2017 Credit Agreement provides for $725.0 million of senior secured credit facilities, comprised of a $425.0 million term loan maturing on June 29, 2024 (the “2017 Term Loan”) and a $300.0 million revolving credit facility maturing on June 29, 2022 (the “2017 Revolving Credit Facility”), subject to increase and reduction from time to time according to the terms of the 2017 Credit Agreement. The maturity dates of the 2017 Term Loan and 2017 Revolving Credit Facility will be accelerated to March 1, 2021 if on such date any Notes remain outstanding. The majority of the proceeds from the 2017 Term Loan were used to repay all outstanding terms loans under our prior credit agreement. The 2017 Term Loan was subject to an original issuance discount of approximately $0.5 million. This discount is being amortized as interest expense over the term of the 2017 Term Loan using the effective interest method. Interest rates on loans under the 2017 Credit Agreement are periodically reset, at our option, at either a Eurodollar Rate or an ABR rate (each as defined in the 2017 Credit Agreement), plus in each case a margin. On January 31, 2018, we entered into an amendment to the 2017 Credit Agreement (the “2018 Amendment”) providing for, among other things, a reduction of the interest rate margins on the 2017 Term Loan from 2.25% to 2.00% for Eurodollar loans, and from 1.25% to 1.00% for ABR loans. The vast majority of the impact of the 2018 Amendment was accounted for as a debt modification. For the portion of the 2017 Term Loan which was considered extinguished and replaced by new loans, we wrote off $0.2 million of unamortized deferred debt issuance costs as a loss on early retirement of debt during the three months ended January 31, 2018. The remaining unamortized deferred debt issuance costs and discount are being amortized over the remaining term of the 2017 Term Loan. On June 8, 2020, we entered into a second amendment to the 2017 Credit Agreement (the “Second Amendment”). Pursuant to the Second Amendment, our Notes will not be deemed to be outstanding if such Notes are cash collateralized in accordance with the 2017 Credit Agreement, as amended, for purposes of the determination of the maturity dates of the 2017 Term Loan and the 2017 Revolving Credit Facility discussed above. We currently intend to cash collateralize, or otherwise refinance or repurchase, the Notes prior to their maturity. Refer to Note 16, “Subsequent Events” for further details regarding the Second Amendment to the 2017 Credit Agreement. As of April 30, 2020, the interest rate on the 2017 Term Loan was 3.37%. Taking into account the impact of the original issuance discount and related deferred debt issuance costs, the effective interest rate on the 2017 Term Loan was approximately 3.55% at April 30, 2020. As of January 31, 2020 the interest rate on 2017 Term Loan was 3.85%. Borrowings under the 2017 Revolving Credit Facility were $200.0 million at April 30, 2020, which is included in long-term debt on our condensed consolidated balance sheet. For borrowings under the 2017 Revolving Credit Facility, the margin is determined by reference to our Consolidated Total Debt to Consolidated EBITDA (each as defined in the 2017 Credit Agreement) leverage ratio (the "Leverage Ratio"). As of April 30, 2020, the weighted average interest rate on our revolving credit facility borrowings was 2.33%. In addition, we are required to pay a commitment fee with respect to unused availability under the 2017 Revolving Credit Facility at rates per annum determined by reference to our Leverage Ratio. The proceeds of borrowings under the 2017 Revolving Credit Facility were used to fund a portion of our stock repurchase program or will be used for general corporate purposes. Please refer to Note 9, “Stockholders’ Equity”, for more information regarding the stock repurchase program. The 2017 Term Loan requires quarterly principal payments of approximately $1.1 million, which commenced on August 1, 2017, with the remaining balance due on June 29, 2024. Optional prepayments of loans under the 2017 Credit Agreement are generally permitted without premium or penalty. Our obligations under the 2017 Credit Agreement are guaranteed by each of our direct and indirect existing and future material domestic wholly owned restricted subsidiaries, and are secured by a security interest in substantially all of our assets and the assets of the guarantor subsidiaries, subject to certain exceptions. The 2017 Credit Agreement contains certain customary affirmative and negative covenants for credit facilities of this type. The 2017 Credit Agreement also contains a financial covenant that, solely with respect to the 2017 Revolving Credit Facility, requires us to maintain a Leverage Ratio of no greater than 4.50 to 1. The limitations imposed by the covenants are subject to certain exceptions as detailed in the 2017 Credit Agreement. The 2017 Credit Agreement provides for events of default with corresponding grace periods that we believe are customary for credit facilities of this type. Upon an event of default, all of our obligations owed under the 2017 Credit Agreement may be declared immediately due and payable, and the lenders’ commitments to make loans under the 2017 Credit Agreement may be terminated. 2017 Credit Agreement Issuance Costs We incurred debt issuance costs of approximately $6.8 million in connection with the 2017 Credit Agreement, of which $4.1 million were associated with the 2017 Term Loan, and $2.7 million were associated with the 2017 Revolving Credit Facility, which were deferred and are being amortized as interest expense over the terms of the facilities under the 2017 Credit Agreement. As noted previously, during the three months ended January 31, 2018, we wrote off $0.2 million of deferred debt issuance costs associated with the 2017 Term Loan as a result of the 2018 Amendment. Deferred debt issuance costs associated with the 2017 Term Loan are being amortized using the effective interest rate method, and deferred debt issuance costs associated with the 2017 Revolving Credit Facility are being amortized on a straight-line basis. Future Principal Payments on Term Loan As of April 30, 2020, future scheduled principal payments on the 2017 Term Loan were as follows: (in thousands) Years Ending January 31, Amount 2021 (remainder of year) $ 3,188 2022 4,250 2023 4,250 2024 4,250 2025 397,375 Total $ 413,313 Interest Expense The following table presents the components of interest expense incurred on the Notes and on borrowings under our credit agreements for the three months ended April 30, 2020 and 2019: Three Months Ended (in thousands) 2020 2019 1.50% Convertible Senior Notes: Interest expense at 1.50% coupon rate $ 1,500 $ 1,500 Amortization of debt discount 3,226 3,061 Amortization of deferred debt issuance costs 304 289 Total Interest Expense - 1.50% Convertible Senior Notes $ 5,030 $ 4,850 Borrowings under Credit Agreements: Interest expense at contractual rates $ 4,513 $ 4,645 Impact of interest rate swap 591 — Amortization of debt discounts 18 16 Amortization of deferred debt issuance costs 391 374 Total Interest Expense - Borrowings under Credit Agreements $ 5,513 $ 5,035 |
SUPPLEMENTAL CONDENSED CONSOLID
SUPPLEMENTAL CONDENSED CONSOLIDATED FINANCIAL STATEMENT INFORMATION | 3 Months Ended |
Apr. 30, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
SUPPLEMENTAL CONDENSED CONSOLIDATED FINANCIAL STATEMENT INFORMATION | SUPPLEMENTAL CONDENSED CONSOLIDATED FINANCIAL STATEMENT INFORMATION Condensed Consolidated Balance Sheets Inventories consisted of the following as of April 30, 2020 and January 31, 2020: April 30, January 31, (in thousands) 2020 2020 Raw materials $ 12,422 $ 9,628 Work-in-process 4,943 4,749 Finished goods 7,665 6,118 Total inventories $ 25,030 $ 20,495 Condensed Consolidated Statements of Operations Other expense, net consisted of the following for the three months ended April 30, 2020 and 2019: Three Months Ended (in thousands) 2020 2019 Foreign currency losses, net $ (3,254) $ (1,187) Gains on derivative financial instruments, net 1,014 549 Other, net 10 (152) Total other expense, net $ (2,230) $ (790) Condensed Consolidated Statements of Cash Flows The following table provides supplemental information regarding our condensed consolidated cash flows for the three months ended April 30, 2020 and 2019: Three Months Ended (in thousands) 2020 2019 Cash paid for interest $ 5,302 $ 4,673 Cash payments (refunds) of income taxes, net $ 9,557 $ (1,513) Cash payments for operating leases $ 6,277 $ 6,841 Non-cash investing and financing transactions: Liabilities for contingent consideration in business combinations $ — $ 5,200 Finance leases of property and equipment $ 760 $ — Accrued but unpaid purchases of property and equipment $ 3,295 $ 3,301 Inventory transfers to property and equipment $ 153 $ 73 |
STOCKHOLDERS' EQUITY
STOCKHOLDERS' EQUITY | 3 Months Ended |
Apr. 30, 2020 | |
Stockholders' Equity Note [Abstract] | |
STOCKHOLDERS' EQUITY | STOCKHOLDERS’ EQUITY Dividends on Common Stock We did not declare or pay any dividends on our common stock during the three months ended April 30, 2020 and 2019. Under the terms of our 2017 Credit Agreement, we are subject to certain restrictions on declaring and paying dividends on our common stock. Stock Repurchase Program On December 4, 2019, we announced that our board of directors had authorized a stock repurchase program whereby we may repurchase up to $300 million of common stock over the period ending on February 1, 2021. We made $34.0 million in repurchases under the program during the three months ended April 30, 2020 and $116.1 million of repurchases during the year ended January 31, 2020. Due to the uncertainty surrounding the impact of the COVID-19 pandemic, we will consider further repurchases under the stock repurchase program based on economic and market conditions as they evolve. Treasury Stock Repurchased shares of common stock are recorded as treasury stock, at cost, but may from time to time be retired. We periodically purchase treasury stock from directors, officers, and other employees to facilitate income tax withholding by us or the payment of required income taxes by such holders in connection with the vesting of equity awards. During the three months ended April 30, 2020, we repurchased approximately 613,000 shares of treasury stock for a cost of $34.0 million under the share repurchase described above. During the three months ended April 30, 2019, we repurchased approximately 8,000 shares of treasury stock for a cost of $0.5 million to facilitate income tax withholding and payment requirements upon vesting of equity awards. At April 30, 2020, we held approximately 4,404,000 shares of treasury stock with a cost of $208.1 million. At January 31, 2020, we held approximately 3,791,000 shares of treasury stock with a cost of $174.1 million. Issuance of Convertible Preferred Stock On December 4, 2019, in conjunction with the planned separation of our businesses into two independent publicly traded companies, we announced that an affiliate of Apax Partners would invest up to $400 million in us, in the form of convertible preferred stock. Under the terms of the Investment Agreement, the Apax Investor initially purchased $200 million of our Series A convertible preferred stock, which closed on May 7, 2020. Please refer to Note 16, “Subsequent Events” for additional information regarding the closing of the initial tranche. Accumulated Other Comprehensive Income (Loss) Accumulated other comprehensive income (loss) includes items such as foreign currency translation adjustments and unrealized gains and losses on certain marketable securities and derivative financial instruments designated as hedges. Accumulated other comprehensive income (loss) is presented as a separate line item in the stockholders’ equity section of our condensed consolidated balance sheets. Accumulated other comprehensive income (loss) items have no impact on our net income (loss) as presented in our condensed consolidated statements of operations. The following table summarizes changes in the components of our accumulated other comprehensive income (loss) by component for the three months ended April 30, 2020: (in thousands) Unrealized Gains (Losses) on Foreign Exchange Contracts Designated as Hedges Unrealized Loss on Interest Rate Swap Designated as Hedge Foreign Currency Translation Adjustments Total Accumulated other comprehensive income (loss) at January 31, 2020 $ 626 $ (10,528) $ (141,963) $ (151,865) Other comprehensive loss before reclassifications (829) (5,949) (20,640) (27,418) Amounts reclassified out of accumulated other comprehensive income (loss) (46) (463) — (509) Net other comprehensive loss (783) (5,486) (20,640) (26,909) Accumulated other comprehensive loss at April 30, 2020 $ (157) $ (16,014) $ (162,603) $ (178,774) All amounts presented in the table above are net of income taxes, if applicable. The accumulated net losses in foreign currency translation adjustments primarily reflect the strengthening of the U.S. dollar against the British pound sterling, which has resulted in lower U.S. dollar-translated balances of British pound sterling-denominated goodwill and intangible assets. The amounts reclassified out of accumulated other comprehensive income (loss) into the condensed consolidated statement of operations, with presentation location, for the three months ended April 30, 2020 and 2019 were as follows: Three Months Ended (in thousands) 2020 2019 Location Unrealized losses on derivative financial instruments: Foreign currency forward contracts $ (3) $ (72) Cost of product revenue (5) (84) Cost of service and support revenue (27) (472) Research and development, net (17) (311) Selling, general and administrative (52) (939) Total, before income taxes 6 94 Benefit from income taxes $ (46) $ (845) Total, net of income taxes Interest rate swap agreement $ (591) $ — Interest expense (591) — Total, before income taxes 128 — Benefit from income taxes $ (463) $ — Total, net of income taxes |
INCOME TAXES
INCOME TAXES | 3 Months Ended |
Apr. 30, 2020 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | 10. INCOME TAXES Our interim (benefit) provision for income taxes is measured using an estimated annual effective income tax rate, adjusted for discrete items that occur within the periods presented. For the three months ended April 30, 2020, we recorded an income tax benefit of $1.8 million on a pre-tax loss of $5.7 million, which represented an effective income tax rate of 30.7%. The effective tax rate differs from the U.S. federal statutory rate of 21% primarily due to the impact of U.S. taxation of certain foreign activities, offset by lower statutory rates in several foreign jurisdictions and a deferred tax benefit due to a tax rate change in a foreign jurisdiction. For the three months ended April 30, 2019, we recorded an income tax provision of $1.4 million on pre-tax income of $5.2 million, which represented an effective income tax rate of 27.3%. The effective tax rate differs from the U.S. federal statutory rate of 21% primarily due to the impact of U.S. taxation of certain foreign activities, offset by lower statutory rates in several foreign jurisdictions. As required by the authoritative guidance on accounting for income taxes, we evaluate the realizability of deferred income tax assets on a jurisdictional basis at each reporting date. Accounting guidance for income taxes requires that a valuation allowance be established when it is more-likely-than-not that all or a portion of the deferred income tax assets will not be realized. In circumstances where there is sufficient negative evidence indicating that the deferred income tax assets are not more-likely-than-not realizable, we establish a valuation allowance. We determined that there is sufficient negative evidence to maintain the valuation allowances against certain state and foreign deferred income tax assets as a result of historical losses in the most recent three-year period in certain state and foreign jurisdictions. We intend to maintain valuation allowances until sufficient positive evidence exists to support a reversal. We had unrecognized income tax benefits of $92.3 million and $91.3 million (excluding interest and penalties) as of April 30, 2020 and January 31, 2020, respectively. The accrued liability for interest and penalties was $3.0 million and $2.9 million at April 30, 2020 and January 31, 2020, respectively. Interest and penalties are recorded as a component of the provision for income taxes in our condensed consolidated statements of operations. As of April 30, 2020 and January 31, 2020, the total amount of unrecognized income tax benefits that, if recognized, would impact our effective income tax rate were approximately $92.3 million and $91.3 million, respectively. We regularly assess the adequacy of our provisions for income tax contingencies in accordance with the applicable authoritative guidance on accounting for income taxes. As a result, we may adjust the reserves for unrecognized income tax benefits for the impact of new facts and developments, such as changes to interpretations of relevant tax law, assessments from taxing authorities, settlements with taxing authorities, and lapses of statutes of limitation. Further, we believe that it is reasonably possible that the total amount of unrecognized income tax benefits at April 30, 2020 could decrease by approximately $1.3 million in the next twelve months as a result of settlement of certain tax audits or lapses of statutes of limitation. Such decreases may involve the payment of additional income taxes, the adjustment of deferred income taxes including the need for additional valuation allowances, and the recognition of income tax benefits. Our income tax returns are subject to ongoing tax examinations in several jurisdictions in which we operate. We also believe that it is reasonably possible that new issues may be raised by tax authorities or developments in tax audits may occur, which would require increases or decreases to the balance of reserves for unrecognized income tax benefits; however, an estimate of such changes cannot reasonably be made. On March 27, 2020, the Coronavirus Aid, Relief and Economic Security (CARES) Act was enacted and signed into U.S. law to provide economic relief to individuals and businesses facing economic hardship as a result of the COVID-19 pandemic. Changes in tax laws or rates are accounted for in the period of enactment. The income tax provisions of the CARES Act do not have a significant impact on our current taxes, deferred taxes, or uncertain tax positions. However, we plan to defer the timing of employer payroll taxes and accelerate the refund of AMT credits as permitted by the CARES Act. |
FAIR VALUE MEASUREMENTS
FAIR VALUE MEASUREMENTS | 3 Months Ended |
Apr. 30, 2020 | |
Fair Value Disclosures [Abstract] | |
FAIR VALUE MEASUREMENTS | FAIR VALUE MEASUREMENTS Assets and Liabilities Measured at Fair Value on a Recurring Basis Our assets and liabilities measured at fair value on a recurring basis consisted of the following as of April 30, 2020 and January 31, 2020: April 30, 2020 Fair Value Hierarchy Category (in thousands) Level 1 Level 2 Level 3 Assets: Money market funds $ 144,745 $ — $ — Foreign currency forward contracts — 1,270 — Contingent consideration receivable — — 668 Total assets $ 144,745 $ 1,270 $ 668 Liabilities: Foreign currency forward contracts $ — $ 724 $ — Interest rate swap agreement — 20,445 — Contingent consideration - business combinations — — 35,002 Option to acquire noncontrolling interests of consolidated subsidiaries — — 2,650 Total liabilities $ — $ 21,169 $ 37,652 January 31, 2020 Fair Value Hierarchy Category (in thousands) Level 1 Level 2 Level 3 Assets: Money market funds $ 89 $ — $ — Foreign currency forward contracts — 812 — Contingent consideration receivable — — 738 Total assets $ 89 $ 812 $ 738 Liabilities: Foreign currency forward contracts $ — $ 132 $ — Interest rate swap agreements — 13,501 — Contingent consideration - business combinations — — 42,875 Option to acquire noncontrolling interests of consolidated subsidiaries — — 2,900 Total liabilities $ — $ 13,633 $ 45,775 In January 2020, we completed the sale of an insignificant subsidiary in our Customer Engagement segment. In accordance with the terms of the sale agreement, 100% of the aggregate purchase price is contingent in nature based on a percentage of net sales of the former subsidiary’s products during the thirty-six month period following the transaction closing. We include the fair value of the contingent consideration receivable within prepaid expenses and other current assets and other assets on our consolidated balance sheet. The estimated fair value of this asset as of April 30, 2020, which is measured using Level 3 inputs, was $0.7 million. We did not receive any payments, and the change in the estimated fair value of this contingent receivable was not material, during the three months ended April 30, 2020. The following table presents the changes in the estimated fair values of our liabilities for contingent consideration measured using significant unobservable inputs (Level 3) for the three months ended April 30, 2020 and 2019: Three Months Ended (in thousands) 2020 2019 Fair value measurement at beginning of period $ 42,875 $ 61,340 Contingent consideration liabilities recorded for business combinations, including measurement period adjustments — 5,200 Changes in fair values, recorded in operating expenses (4,803) 1,213 Payments of contingent consideration (3,031) (6,361) Foreign currency translation and other (39) (13) Fair value measurement at end of period $ 35,002 $ 61,379 Our estimated liability for contingent consideration represents potential payments of additional consideration for business combinations, payable if certain defined performance goals are achieved. Changes in fair value of contingent consideration are recorded in the condensed consolidated statements of operations within selling, general and administrative expenses. During the year ended January 31, 2017, we acquired two majority owned subsidiaries for which we hold an option to acquire the noncontrolling interests. We account for the option as an in-substance investment in the noncontrolling common stock of each such subsidiary. We include the fair value of the option within other liabilities and do not recognize noncontrolling interests in these subsidiaries. The following table presents the change in the estimated fair value of this liability, which is measured using Level 3 inputs, for the three months ended April 30, 2020 and 2019: Three Months Ended (in thousands) 2020 2019 Fair value measurement at beginning of period $ 2,900 $ 3,000 Change in fair value, recorded in operating expenses (250) (150) Fair value measurement at end of period $ 2,650 $ 2,850 There were no transfers between levels of the fair value measurement hierarchy during the three months ended April 30, 2020 and 2019. Fair Value Measurements Money Market Funds - We value our money market funds using quoted active market prices for such funds. Short-term Investments, Corporate Debt Securities, and Commercial Paper - The fair values of short-term investments, as well as corporate debt securities and commercial paper classified as cash equivalents, are estimated using observable market prices for identical securities that are traded in less-active markets, if available. When observable market prices for identical securities are not available, we value these short-term investments using non-binding market price quotes from brokers which we review for reasonableness using observable market data; quoted market prices for similar instruments; or pricing models, such as a discounted cash flow model. Foreign Currency Forward Contracts - The estimated fair value of foreign currency forward contracts is based on quotes received from the counterparties thereto. These quotes are reviewed for reasonableness by discounting the future estimated cash flows under the contracts, considering the terms and maturities of the contracts and market foreign currency exchange rates using readily observable market prices for similar contracts. Interest Rate Swap Agreements - The fair value of our interest rate swap agreements are based in part on data received from the counterparty, and represents the estimated amount we would receive or pay to settle the agreements, taking into consideration current and projected future interest rates as well as the creditworthiness of the parties, all of which can be validated through readily observable data from external sources. Contingent Consideration Asset or Liability - Business Combinations and Divestitures - The fair value of the contingent consideration related to business combinations and divestitures is estimated using a probability-adjusted discounted cash flow model. These fair value measurements are based on significant inputs not observable in the market. The key internally developed assumptions used in these models are discount rates and the probabilities assigned to the milestones to be achieved. We remeasure the fair value of the contingent consideration at each reporting period, and any changes in fair value resulting from either the passage of time or events occurring after the acquisition date, such as changes in discount rates, or in the expectations of achieving the performance targets, are recorded within selling, general, and administrative expenses. Increases or decreases in discount rates would have inverse impacts on the related fair value measurements, while favorable or unfavorable changes in expectations of achieving performance targets would result in corresponding increases or decreases in the related fair value measurements. We utilized discount rates ranging from 3.2% to 6.7%, with a weighted average discount rate of 4.8%, in our calculations of the estimated fair values of our contingent consideration liabilities as of April 30, 2020. We utilized discount rates ranging from 2.1% to 4.9% in our calculations of the estimated fair values of our contingent consideration liabilities as of January 31, 2020. We utilized discount rates ranging from 6.4% to 6.8%, with a weighted average discount rate of 6.6%, in our calculation of the estimated fair value of our contingent consideration asset as of April 30, 2020. We utilized discount rates ranging from 4.3% to 4.9%, in our calculation of the estimated fair value of our contingent consideration asset as of January 31, 2020. Option to Acquire Noncontrolling Interests of Consolidated Subsidiaries - The fair value of the option is determined primarily by using the income approach, which discounts expected future cash flows to present value using estimates and assumptions determined by management. This fair value measurement is based upon significant inputs not observable in the market. We remeasure the fair value of the option at each reporting period, and any changes in fair value are recorded within selling, general, and administrative expenses. We utilized discount rates of 11.0% and 9.0% in our calculation of the estimated fair value of the option as of April 30, 2020 and January 31, 2020, respectively. Other Financial Instruments The carrying amounts of accounts receivable, contract assets, accounts payable, and accrued liabilities and other current liabilities approximate fair value due to their short maturities. The estimated fair values of our term loan and our revolving credit borrowings at April 30, 2020 were $406 million and $190 million, respectively. The estimated fair values of our term loan and our revolving credit borrowings at January 31, 2020 were $417 million and $45 million, respectively. The estimated fair values of the term loans are based upon indicative bid and ask prices as determined by the agent responsible for the syndication of our term loans. We consider these inputs to be within Level 3 of the fair value hierarchy because we cannot reasonably observe activity in the limited market in which participation in our term loans are traded. The indicative prices provided to us as at each of April 30, 2020 and January 31, 2020 did not significantly differ from par value. The estimated fair value of our revolving credit borrowings is based upon indicative market values provided by one of our lenders. The estimated fair values of our Notes were approximately $386 million and $438 million at April 30, 2020 and January 31, 2020, respectively. The estimated fair values of the Notes are determined based on quoted bid and ask prices in the over-the-counter market in which the Notes trade. We consider these inputs to be within Level 2 of the fair value hierarchy. Assets and Liabilities Not Measured at Fair Value on a Recurring Basis In addition to assets and liabilities that are measured at fair value on a recurring basis, we also measure certain assets and liabilities at fair value on a nonrecurring basis. Our non-financial assets, including goodwill, intangible assets, operating lease right-of-use assets, and property, plant and equipment, are measured at fair value when there is an indication of impairment and the carrying amount exceeds the asset’s projected undiscounted cash flows. These assets are recorded at fair value only when an impairment charge is recognized. As of April 30, 2020, the carrying amount of our noncontrolling equity investments in privately-held companies without readily determinable fair values was $3.8 million. There were no observable price changes in our investments in privately-held companies and we did not recognize any impairments or other adjustments during the three months ended April 30, 2020. |
DERIVATIVE FINANCIAL INSTRUMENT
DERIVATIVE FINANCIAL INSTRUMENTS | 3 Months Ended |
Apr. 30, 2020 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
DERIVATIVE FINANCIAL INSTRUMENTS | DERIVATIVE FINANCIAL INSTRUMENTS Our primary objective for holding derivative financial instruments is to manage foreign currency exchange rate risk and interest rate risk, when deemed appropriate. We enter into these contracts in the normal course of business to mitigate risks and not for speculative purposes. Foreign Currency Forward Contracts Under our risk management strategy, we periodically use foreign currency forward contracts to manage our short-term exposures to fluctuations in operational cash flows resulting from changes in foreign currency exchange rates. These cash flow exposures result from portions of our forecasted operating expenses, primarily compensation and related expenses, which are transacted in currencies other than the U.S. dollar, most notably the Israeli shekel. We also periodically utilize foreign currency forward contracts to manage exposures resulting from forecasted customer collections to be remitted in currencies other than the applicable functional currency, and exposures from cash, cash equivalents and short-term investments denominated in currencies other than the applicable functional currency. These foreign currency forward contracts generally have maturities of no longer than twelve months, although occasionally we will execute a contract that extends beyond twelve months, depending upon the nature of the underlying risk. We held outstanding foreign currency forward contracts with notional amounts of $106.2 million and $89.0 million as of April 30, 2020 and January 31, 2020, respectively. Interest Rate Swap Agreements To partially mitigate risks associated with the variable interest rates on the term loan borrowings under the prior credit agreement, in February 2016, we executed a pay-fixed, receive-variable interest rate swap agreement with a multinational financial institution under which we paid interest at a fixed rate of 4.143% and received variable interest of three-month LIBOR (subject to a minimum of 0.75%), plus a spread of 2.75%, on a notional amount of $200.0 million (the “2016 Swap”). Although the prior credit agreement was terminated on June 29, 2017, the 2016 Swap agreement remained in effect until September 6, 2019, and served as an economic hedge to partially mitigate the risk of higher borrowing costs under our 2017 Credit Agreement resulting from increases in market interest rates. Settlements with the counterparty under the 2016 Swap occurred quarterly, and the 2016 Swap matured on September 6, 2019. Prior to June 29, 2017, the 2016 Swap was designated as a cash flow hedge for accounting purposes and as such, changes in its fair value were recognized in accumulated other comprehensive income (loss) in the consolidated balance sheet and were reclassified into the statement of operations within interest expense in the period in which the hedged transaction affected earnings. Hedge ineffectiveness, if any, was recognized currently in the condensed consolidated statement of operations. On June 29, 2017, concurrent with the execution of the 2017 Credit Agreement and termination of the prior credit agreement, the 2016 Swap was no longer designated as a cash flow hedge for accounting purposes and, because occurrence of the specific forecasted variable cash flows which had been hedged by the 2016 Swap was no longer probable, the $0.9 million fair value of the 2016 Swap at that date was reclassified from accumulated other comprehensive income (loss) into the condensed consolidated statement of operations as income within other income (expense), net. Ongoing changes in the fair value of the 2016 Swap were recognized within other income (expense), net in the condensed consolidated statement of operations. In April 2018, we executed a pay-fixed, receive-variable interest rate swap agreement with a multinational financial institution to partially mitigate risks associated with the variable interest rate on our 2017 Term Loan for periods following the termination of the 2016 Swap in September 2019, under which we pay interest at a fixed rate of 2.949% and receive variable interest of three-month LIBOR (subject to a minimum of 0.00%), on a notional amount of $200.0 million (the “2018 Swap”). The effective date of the 2018 Swap was September 6, 2019, and settlements with the counterparty will occur on a quarterly basis, beginning on November 1, 2019. The 2018 Swap will terminate on June 29, 2024. During the operating term of the 2018 Swap, if we elect three-month LIBOR at the periodic interest rate reset dates for at least $200.0 million of our 2017 Term Loan, the annual interest rate on that amount of the 2017 Term Loan will be fixed at 4.949% (including the impact of our current 2.00% interest rate margin on Eurodollar loans) for the applicable interest rate period. The 2018 Swap is designated as a cash flow hedge and as such, changes in its fair value are recognized in accumulated other comprehensive income (loss) in the condensed consolidated balance sheet and are reclassified into the condensed statement of operations within interest expense in the periods in which the hedged transactions affect earnings. Fair Values of Derivative Financial Instruments The fair values of our derivative financial instruments and their classifications in our condensed consolidated balance sheets as of April 30, 2020 and January 31, 2020 were as follows: Fair Value at April 30, January 31, (in thousands) Balance Sheet Classification 2020 2020 Derivative assets: Foreign currency forward contracts: Designated as cash flow hedges Prepaid expenses and other current assets $ 544 $ 710 Not designated as hedging instruments Prepaid expenses and other current assets 726 102 Total derivative assets $ 1,270 $ 812 Derivative liabilities: Foreign currency forward contracts: Designated as cash flow hedges Accrued expenses and other current liabilities $ 724 $ 16 Not designated as hedging instruments Accrued expenses and other current liabilities — 116 Interest rate swap agreements: Designated as a cash flow hedge Accrued expenses and other current liabilities 3,897 2,060 Designated as a cash flow hedge Other liabilities 16,548 11,441 Total derivative liabilities $ 21,169 $ 13,633 Derivative Financial Instruments in Cash Flow Hedging Relationships The effects of derivative financial instruments designated as cash flow hedges on accumulated other comprehensive loss (“AOCL”) and on the condensed consolidated statements of operations for the three months ended April 30, 2020 and 2019 were as follows: Three Months Ended (in thousands) 2020 2019 Net (losses) gains recognized in AOCL: Foreign currency forward contracts $ (925) $ 342 Interest rate swap agreement (7,535) (2,017) $ (8,460) $ (1,675) Net losses reclassified from AOCL to the condensed consolidated statements of operations: Foreign currency forward contracts $ (52) $ (939) Interest rate swap agreement (591) — $ (643) $ (939) For information regarding the line item locations of the net (losses) gains on derivative financial instruments reclassified out of AOCL into the condensed consolidated statements of operations, see Note 9, “Stockholders’ Equity”. All of the foreign currency forward contracts underlying the $0.2 million of net unrealized losses recorded in our accumulated other comprehensive loss at April 30, 2020 mature within twelve months, and therefore we expect all such losses to be reclassified into earnings within the next twelve months. Approximately $3.1 million of the $16.0 million of net unrealized losses related to our interest rate swap agreement recorded in our accumulated other comprehensive loss at April 30, 2020 settle within twelve months, and therefore we expect those losses to be reclassified into earnings within the next twelve months. Derivative Financial Instruments Not Designated as Hedging Instruments Gains (losses) recognized on derivative financial instruments not designated as hedging instruments in our condensed consolidated statements of operations for the three months ended months ended April 30, 2020 and 2019 were as follows: Classification in Condensed Consolidated Statements of Operations Three Months Ended (in thousands) 2020 2019 Foreign currency forward contracts Other income (expense), net $ 1,014 $ 564 Interest rate swap agreement Other income (expense), net — (15) $ 1,014 $ 549 |
STOCK-BASED COMPENSATION
STOCK-BASED COMPENSATION | 3 Months Ended |
Apr. 30, 2020 | |
Share-based Payment Arrangement [Abstract] | |
STOCK-BASED COMPENSATION | STOCK-BASED COMPENSATION Stock-Based Compensation Plan On June 20, 2019, our stockholders approved the Verint Systems Inc. 2019 Long-Term Stock Incentive Plan (the “2019 Plan”). Upon approval of the 2019 Plan, additional awards are no longer permitted under our prior stock-based compensation plan (the “2017 Amended Plan”). Awards outstanding at June 20, 2019 under the 2017 Amended Plan or other previous stock-based compensation plans were not impacted by the approval of the 2019 Plan. Collectively, our stock-based compensation plans are referred to herein as the “Plans”. The 2019 Plan authorizes our board of directors to provide equity-based compensation in the form of stock options, stock appreciation rights, restricted stock, restricted stock units (“RSUs”), performance awards, other stock-based awards, and performance compensation awards. Subject to adjustment as provided in the 2019 Plan, up to an aggregate of (i) 9,475,000 shares of our common stock plus (ii) the number of shares of our common stock available for issuance under the 2017 Amended Plan as of June 20, 2019, plus (iii) the number of shares of our common stock that become available for issuance as a result of awards made under the 2017 Amended Plan or the 2019 Plan that are forfeited, cancelled, exchanged, or that terminate or expire, may be issued or transferred in connection with awards under the 2019 Plan. Each stock option or stock-settled stock appreciation right granted under the 2019 Plan will reduce the available plan capacity by one share and each other award denominated in shares that is granted under the 2019 Plan will reduce the available plan capacity by 2.38 shares. Stock-Based Compensation Expense We recognized stock-based compensation expense in the following line items on the condensed consolidated statements of operations for the three months ended April 30, 2020 and 2019: Three Months Ended (in thousands) 2020 2019 Cost of revenue - product $ 310 $ 334 Cost of revenue - service and support 657 1,070 Research and development, net 2,336 2,590 Selling, general and administrative 10,881 13,109 Total stock-based compensation expense $ 14,184 $ 17,103 The following table summarizes stock-based compensation expense by type of award for the three months ended April 30, 2020 and 2019: Three Months Ended (in thousands) 2020 2019 Restricted stock units and restricted stock awards $ 15,029 $ 14,890 Stock bonus program and bonus share program (837) 2,175 Total equity-settled awards 14,192 17,065 Phantom stock units (cash-settled awards) (8) 38 Total stock-based compensation expense $ 14,184 $ 17,103 Awards under our stock bonus and bonus share programs are accounted for as liability-classified awards, because the obligations are based predominantly on fixed monetary amounts that are generally known at inception of the obligation, to be settled with a variable number of shares of our common stock, which for awards under our stock bonus program is determined using a discounted average price of our common stock. Restricted Stock Units and Performance Stock Units We periodically award RSUs to our directors, officers, and other employees. These awards contain various vesting conditions and are subject to certain restrictions and forfeiture provisions prior to vesting. Some of these awards to executive officers and certain employees vest upon the achievement of specified performance goals or market conditions (performance stock units or “PSUs”). The following table (“Award Activity Table”) summarizes activity for RSUs, PSUs, and other stock awards that reduce available Plan capacity under the Plans for the three months ended April 30, 2020 and 2019: Three Months Ended April 30, 2020 2019 (in thousands, except per share data) Shares or Units Weighted-Average Grant Date Fair Value Shares or Units Weighted-Average Grant Date Fair Value Beginning balance 2,736 $ 52.53 2,777 $ 41.05 Granted 107 $ 51.26 1,444 $ 61.10 Released (399) $ 46.96 (448) $ 39.50 Forfeited (81) $ 51.84 (60) $ 35.44 Ending balance 2,363 $ 53.44 3,713 $ 49.23 With respect to our stock bonus program, activity presented in the table above only includes shares earned and released in consideration of the discount provided under that program. Consistent with the provisions of the Plans under which such shares are issued, other shares issued under the stock bonus program are not included in the table above because they do not reduce available plan capacity (since such shares are deemed to be purchased by the grantee at fair value in lieu of receiving an earned cash bonus). Activity presented in the table above includes all shares awarded and released under the bonus share program. Further details appear below under “Stock Bonus Program” and “Bonus Share Program”. Our RSU awards may include a provision which allows the awards to be settled with cash payments upon vesting, rather than with delivery of common stock, at the discretion of our board of directors. As of April 30, 2020, for such awards that are outstanding, settlement with cash payments was not considered probable, and therefore these awards have been accounted for as equity-classified awards and are included in the table above. The following table summarizes PSU activity in isolation under the Plans for the three months ended April 30, 2020 and 2019 (these amounts are already included in the Award Activity Table above for 2020 and 2019): Three Months Ended (in thousands) 2020 2019 Beginning balance 526 512 Granted 107 286 Released (231) (234) Forfeited (20) (26) Ending balance 382 538 Excluding PSUs, we did not grant any RSUs or other equity awards during the three months ended April 30, 2020. As of April 30, 2020, there was approximately $70.2 million of total unrecognized compensation expense, net of estimated forfeitures, related to unvested restricted stock units, which is expected to be recognized over a weighted-average period of 1.4 years. Stock Bonus Program Our stock bonus program permits eligible employees to receive a portion of their earned bonuses, otherwise payable in cash, in the form of discounted shares of our common stock. Executive officers are eligible to participate in this program to the extent that shares remain available for awards following the enrollment of all other participants. Shares awarded to executive officers with respect to the discount feature of the program are subject to a one-year vesting period. This program is subject to annual funding approval by our board of directors and an annual cap on the number of shares that can be issued. Subject to these limitations, the number of shares to be issued under the program for a given year is determined using a 5-day trailing average price of our common stock when the awards are calculated, reduced by a discount determined by the board of directors each year (the “discount”). To the extent that this program is not funded in a given year or the number of shares of common stock needed to fully satisfy employee enrollment exceeds the annual cap, the applicable portion of the employee bonuses will generally revert to being paid in cash. There was no activity under the stock bonus program during the three months ended April 30, 2020 and 2019. For bonuses in respect of the year ending January 31, 2020, our board of directors approved the use of up to 200,000 shares of common stock, and a discount of 15%, under the stock bonus program. We currently expect to issue no more than 32,000 shares under the stock bonus program for the performance period ended January 31, 2020, which are expected to be issued during the second half of the year ending January 31, 2021. In March 2020, our board of directors approved up to 200,000 shares of common stock, and a discount of 15%, for awards under our stock bonus program for the performance period ended January 31, 2021. Bonus Share Program Under our bonus share program, we may provide discretionary bonuses to employees or pay earned bonuses that are outside the stock bonus program in the form of shares of common stock. Unlike the stock bonus program, there is no enrollment for this program and no discount feature. As noted above, shares issued under this program are included in the Award Activity Table above. For bonuses in respect of the year ending January 31, 2020, our board of directors has approved the use of up to 305,000 shares of common stock under the bonus share program, reduced by any shares issued under the stock bonus program in respect of the same performance period. For the performance period ended January 31, 2020, we currently expect to issue no more than 32,000 shares under the stock bonus program, with the remaining 273,000 shares authorized by the board of directors available for use under the bonus share program for the same performance period. Awards under the bonus share program for the performance period ended January 31, 2020 are expected to be issued during the second half of the year ending January 31, 2021. For bonuses in respect of the year ending January 31, 2021, our board of directors has approved the use of up to 300,000 shares of common stock under this program, reduced by any shares used under the stock bonus program in respect of the same performance period. |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 3 Months Ended |
Apr. 30, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | COMMITMENTS AND CONTINGENCIES Legal Proceedings In March 2009, one of our former employees, Ms. Orit Deutsch, commenced legal actions in Israel against our primary Israeli subsidiary, Verint Systems Limited (“VSL”) (Case Number 4186/09) and against our affiliate CTI (Case Number 1335/09). Also in March 2009, a former employee of Comverse Limited (CTI’s primary Israeli subsidiary at the time), Ms. Roni Katriel, commenced similar legal actions in Israel against Comverse Limited (Case Number 3444/09). In these actions, the plaintiffs generally sought to certify class action suits against the defendants on behalf of current and former employees of VSL and Comverse Limited who had been granted stock options in Verint and/or CTI and who were allegedly damaged as a result of a suspension on option exercises during an extended filing delay period that is discussed in our and CTI’s historical public filings. On June 7, 2012, the Tel Aviv District Court, where the cases had been filed or transferred, allowed the plaintiffs to consolidate and amend their complaints against the three defendants: VSL, CTI, and Comverse Limited. On October 31, 2012, CTI distributed of all of the outstanding shares of common stock of Comverse, Inc., its principal operating subsidiary and parent company of Comverse Limited, to CTI’s shareholders (the “Comverse Share Distribution”). In the period leading up to the Comverse Share Distribution, CTI either sold or transferred substantially all of its business operations and assets (other than its equity ownership interests in Verint and in its then-subsidiary, Comverse, Inc.) to Comverse, Inc. or to unaffiliated third parties. As the result of these transactions, Comverse, Inc. became an independent company and ceased to be affiliated with CTI, and CTI ceased to have any material assets other than its equity interests in Verint. Prior to the completion of the Comverse Share Distribution, the plaintiffs sought to compel CTI to set aside up to $150.0 million in assets to secure any future judgment, but the District Court did not rule on this motion. In February 2017, Mavenir Inc. became successor-in-interest to Comverse, Inc. On February 4, 2013, Verint acquired the remaining CTI shell company in a merger transaction (the “CTI Merger”). As a result of the CTI Merger, Verint assumed certain rights and liabilities of CTI, including any liability of CTI arising out of the foregoing legal actions. However, under the terms of a Distribution Agreement entered into in connection with the Comverse Share Distribution, we, as successor to CTI, are entitled to indemnification from Comverse, Inc. (now Mavenir) for any losses we may suffer in our capacity as successor to CTI related to the foregoing legal actions. Following an unsuccessful mediation process, on August 28, 2016, the District Court (i) denied the plaintiffs’ motion to certify the suit as a class action with respect to all claims relating to Verint stock options and (ii) approved the plaintiffs’ motion to certify the suit as a class action with respect to claims of current or former employees of Comverse Limited (now part of Mavenir) or of VSL who held unexercised CTI stock options at the time CTI suspended option exercises. The court also ruled that the merits of the case would be evaluated under New York law. As a result of this ruling (which excluded claims related to Verint stock options from the case), one of the original plaintiffs in the case, Ms. Deutsch, was replaced by a new representative plaintiff, Mr. David Vaaknin. CTI appealed portions of the District Court’s ruling to the Israeli Supreme Court. On August 8, 2017, the Israeli Supreme Court partially allowed CTI’s appeal and ordered the case to be returned to the District Court to determine whether a cause of action exists under New York law based on the parties’ expert opinions. Following two unsuccessful rounds of mediation in mid to late 2018 and in mid-2019, the proceedings resumed. On April 16, 2020, the District Court accepted plaintiffs’ application to amend the motion to certify a class action and set deadlines for filing amended pleadings by the parties. CTI recently submitted a motion to appeal the decision to the Supreme Court. |
SEGMENT INFORMATION
SEGMENT INFORMATION | 3 Months Ended |
Apr. 30, 2020 | |
Segment Reporting [Abstract] | |
SEGMENT INFORMATION | SEGMENT INFORMATION Operating segments are defined as components of an enterprise about which separate financial information is available that is evaluated regularly by the enterprise’s chief operating decision maker (“CODM”), or decision making group, in deciding how to allocate resources and in assessing performance. Our Chief Executive Officer is our CODM. We report our results in two operating segments—Customer Engagement and Cyber Intelligence. Our Customer Engagement solutions help customer-centric organizations optimize customer engagement, increase customer loyalty, and maximize revenue opportunities, while generating operational efficiencies, reducing cost, and mitigating risk. Our Cyber Intelligence solutions are used for a wide range of applications, including predictive intelligence, advanced and complex investigations, security threat analysis, and electronic data and physical assets protection, as well as for generating legal evidence and preventing criminal activity and terrorism. We measure the performance of our operating segments primarily based on segment revenue and segment contribution. Segment revenue includes adjustments associated with revenue of acquired companies which are not recognizable within GAAP revenue. These adjustments primarily relate to the acquisition-date excess of the historical carrying value over the fair value of acquired companies’ future maintenance and service performance obligations. As the obligations are satisfied, we report our segment revenue using the historical carrying values of these obligations, which we believe better reflects our ongoing maintenance and service revenue streams, whereas GAAP revenue is reported using the obligations’ acquisition-date fair values. Segment revenue adjustments can also result from aligning an acquired company’s historical revenue recognition policies to our policies. Segment contribution includes segment revenue and expenses incurred directly by the segment, including material costs, service costs, research and development, selling, marketing, and certain administrative expenses. When determining segment contribution, we do not allocate certain operating expenses which are provided by shared resources or are otherwise generally not controlled by segment management. These expenses are reported as “Shared support expenses” in our table of segment operating results, the majority of which are expenses for administrative support functions, such as information technology, human resources, finance, legal, and other general corporate support, and for occupancy expenses. These unallocated expenses also include procurement, manufacturing support, and logistics expenses. We share resources across our segments for efficiency and to avoid duplicative costs. In addition, segment contribution does not include amortization of acquired intangible assets, stock-based compensation, and other expenses that either can vary significantly in amount and frequency, are based upon subjective assumptions, or in certain cases are unplanned for or difficult to forecast, such as restructuring expenses and business combination transaction and integration expenses, all of which are not considered when evaluating segment performance. Revenue from transactions between our operating segments is not material. Operating results by segment for the three months ended April 30, 2020 and 2019 were as follows: Three Months Ended (in thousands) 2020 2019 Revenue: Customer Engagement Segment revenue $ 189,127 $ 215,867 Revenue adjustments (3,262) (8,772) 185,865 207,095 Cyber Intelligence Segment revenue 102,522 108,291 Revenue adjustments (1,092) (127) 101,430 108,164 Total revenue $ 287,295 $ 315,259 Segment contribution: Customer Engagement $ 65,797 $ 78,818 Cyber Intelligence 24,964 27,290 Total segment contribution 90,761 106,108 Reconciliation of segment contribution to operating income: Revenue adjustments 4,354 8,899 Shared support expenses 43,341 43,854 Amortization of acquired intangible assets 12,674 14,420 Stock-based compensation 14,184 17,103 Acquisition, integration, restructuring, and other unallocated expenses 10,034 7,364 Total reconciling items, net 84,587 91,640 Operating income $ 6,174 $ 14,468 With the exception of goodwill and acquired intangible assets, we do not identify or allocate our assets by operating segment. Consequently, it is not practical to present assets by operating segment. The allocations of goodwill and acquired intangible assets by operating segment appear in Note 6, “Intangible Assets and Goodwill”. |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 3 Months Ended |
Apr. 30, 2020 | |
Subsequent Events [Abstract] | |
Subsequent Events | SUBSEQUENT EVENTS Apax Convertible Preferred Stock Investment On May 7, 2020, we closed the initial tranche of the previously announced strategic partnership (the “Closing”) with the Apax Investor. Pursuant to the Investment Agreement, dated as of December 4, 2019, at the Closing, we sold 200,000 shares of our Series A Convertible Perpetual Preferred Stock, par value $0.001 per share, for an aggregate purchase price of $200.0 million. See “Management’s discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources—Overview” under Item 2 of this report for a more detailed discussion regarding the Apax investment. In connection with the Closing, we entered into a Registration Rights Agreement (the “Registration Rights Agreement”), pursuant to which, among other things, we have agreed to use commercially reasonable efforts to prepare and file a shelf registration statement with the SEC no later than the first business day after the Common Stock Restricted Period (as defined in the agreement) and to use commercially reasonable efforts to cause such shelf registration statement to be declared effective as promptly as is reasonably practicable after its filing to permit the public resale of registrable securities covered by the Registration Rights Agreement. The registrable securities generally include any shares of our common stock, par value $0.001 per share (“Common Stock”), into which the Preferred Stock is convertible, and any other securities issued or issuable with respect to any such shares of Common Stock by way of share split, share dividend, distribution, recapitalization, merger, exchange, replacement or similar event or otherwise. We generally will be required to effect registrations for up to three underwritten offerings of the registrable securities within any twelve-month period during the term of the Registration Rights Agreement, subject to certain limitations, including that the anticipated gross proceeds of any offering be at least $50.0 million. The Apax Investor is also entitled to customary “piggy-back” registration and shelf take-down rights. The rights of any particular holder to cause us to register securities under the Registration Rights Agreement will terminate with respect to that holder upon the date on which the holder no longer holds any Preferred Stock or any registrable securities covered thereby. The registration rights set forth in the Registration Rights Agreement will terminate on the date on which all shares of Common Stock issuable (or actually issued) upon conversion of the Preferred Stock cease to be registrable securities covered thereby. Amendment to 2017 Credit Agreement On June 8, 2020, we entered into the Second Amendment to the 2017 Credit Agreement, pursuant to which (i) we are permitted to effect the previously announced Spin-Off of our Cyber Intelligence business within the parameters set forth in the 2017 Credit Agreement, as amended, and (ii) for purposes of the acceleration of the maturity of the 2017 Term Loan and 2017 Revolving Credit Facility under the 2017 Credit Agreement, our Notes will not be deemed to be outstanding if such Notes are cash collateralized in accordance with the 2017 Credit Agreement, as amended. Other than the changes described above, all other material provisions of the 2017 Credit Agreement as described in Note 7, “Long-Term Debt” remain unchanged. |
BASIS OF PRESENTATION AND SIG_2
BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES (Policies) | 3 Months Ended |
Apr. 30, 2020 | |
Accounting Policies [Abstract] | |
Preparation of Condensed Consolidated Financial Statements | Preparation of Condensed Consolidated Financial Statements The condensed consolidated financial statements included herein have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and on the same basis as the audited consolidated financial statements included in our Annual Report on Form 10-K for the year ended January 31, 2020 filed with the U.S. Securities and Exchange Commission (“SEC”), except for the recently adopted accounting pronouncements described below. The condensed consolidated statements of operations, comprehensive income (loss), stockholders’ equity, and cash flows for the periods ended April 30, 2020 and 2019, and the condensed consolidated balance sheet as of April 30, 2020, are not audited but reflect all adjustments that are of a normal recurring nature and that are considered necessary for a fair presentation of the results for the periods shown. The condensed consolidated balance sheet as of January 31, 2020 is derived from the audited consolidated financial statements presented in our Annual Report on Form 10-K for the year ended January 31, 2020. Certain information and disclosures normally included in annual consolidated financial statements have been omitted pursuant to the rules and regulations of the SEC. Because the condensed consolidated interim financial statements do not include all of the information and disclosures required by GAAP for a complete set of financial statements, they should be read in conjunction with the audited consolidated financial statements and notes included in our Annual Report on Form 10-K for the year ended January 31, 2020 filed with the SEC. The results for interim periods are not necessarily indicative of a full year’s results. |
Principles of Consolidation | Principles of Consolidation The accompanying condensed consolidated financial statements include the accounts of Verint Systems Inc., our wholly owned or otherwise controlled subsidiaries, and a joint venture in which we hold a 50% equity interest. The joint venture is a variable interest entity in which we are the primary beneficiary. Noncontrolling interests in less than wholly owned subsidiaries are reflected within stockholders’ equity on our condensed consolidated balance sheet, but separately from our stockholders’ equity. We hold an option to acquire the noncontrolling interests in two majority owned subsidiaries and we account for the option as an in-substance investment in the noncontrolling common stock of each such subsidiary. We include the fair value of the option within other liabilities and do not recognize noncontrolling interests in these subsidiaries. Equity investments in companies in which we have less than a 20% ownership interest and cannot exercise significant influence, and which do not have readily determinable fair values, are accounted for at cost, adjusted for changes resulting from observable price changes in orderly transactions for an identical or similar investment of the same issuer, less any impairment. We include the results of operations of acquired companies from the date of acquisition. All significant intercompany transactions and balances are eliminated. |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with GAAP requires our management to make estimates and assumptions, which may affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements and the reported amounts of revenue and expenses during the reporting period. In light of the currently unknown extent and duration of the COVID-19 pandemic, we face a greater degree of uncertainty than normal in making the judgments and estimates needed to apply to certain of our significant accounting policies. We assessed certain accounting matters that generally require consideration of forecasted financial information in context with the information reasonably available to us and the unknown future impacts COVID-19 as of April 30, 2020 and through the date of this report. These estimates may change, as new events occur and additional information is obtained. Actual results could differ materially from these estimates under different assumptions or conditions. |
Significant Accounting Policies | Significant Accounting PoliciesThere have been no material changes in our significant accounting policies during the three months ended April 30, 2020, as compared to the significant accounting policies described in Note 1 to the consolidated financial statements included in our Annual Report on Form 10-K for the year ended January 31, 2020. |
New Accounting Pronouncements and Changes in Accounting Principles | Recently Adopted Accounting Pronouncements In June 2016, the Financial Accounting Standards Board ("FASB") issued Accounting Standard Update ("ASU") No. 2016-13, Financial Instruments - Credit Losses (Topic 326) - Measurement of Credit Losses on Financial Instruments. This new standard requires entities to measure expected credit losses for certain financial assets held at the reporting date using a current expected credit loss model, which is based on historical experience, adjusted for current conditions and reasonable and supportable forecasts. The Company's financial instruments within the scope of this guidance primarily includes accounts receivable and contract assets. On February 1, 2020, we adopted the new standard under the modified retrospective approach, such that comparative information has not been restated and continues to be reported under accounting standards in effect for those periods. The adoption of ASU No. 2016-13 resulted in a $1.1 million increase in our allowance for expected credit losses related to accounts receivable and contract assets, a $0.2 million increase to deferred tax assets, and an impact of $0.9 million to our accumulated deficit. The new accounting standard did not have a material impact on our condensed consolidated financial statements, including accounting policies, given our limited historical write-off activity. In August 2018, the FASB issued ASU No. 2018-15, Intangibles-Goodwill and Other-Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract , which requires customers in a hosting arrangement that is a service contract to follow existing internal-use software guidance to determine which implementation costs to capitalize and which costs to expense. Under the new standard, implementation costs are deferred and presented in the same financial statement caption on the condensed consolidated balance sheet as a prepayment of related arrangement fees. The deferred costs are recognized over the term of the arrangement in the same financial statement caption in the condensed consolidated income statement as the related fees of the arrangement. We adopted ASU No. 2018-15 prospectively to eligible costs incurred on or after February 1, 2020 and the implementation did not have a material impact on our condensed consolidated financial statements. In August 2018, the FASB issued ASU No. 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework-Changes to The Disclosure Requirements for Fair Value Measurement , which modifies the disclosure requirements on fair value measurements. Since the standard affects only disclosure requirements, the adoption of the standard did not have an impact on our condensed consolidated financial statements. New Accounting Pronouncements Not Yet Effective In December 2019, the FASB issued ASU No. 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes |
REVENUE RECOGNITION REVENUE R_2
REVENUE RECOGNITION REVENUE RECOGNITION - SIGNIFICANT ACCOUNTING POLICY (Policies) | 3 Months Ended |
Apr. 30, 2020 | |
Revenue from Contract with Customer [Abstract] | |
Revenue [Policy Text Block] | REVENUE RECOGNITION We derive our revenue primarily from the licensing of our software products and related services and support based on when control of the software passes to our customers or the services are provided, in an amount that reflects the consideration we expect to be entitled to in exchange for such goods or services. Revenue is reported net of applicable sales and use tax, value-added tax and other transaction taxes imposed on the related transaction, including mandatory government charges that are passed through to our customers. We determine revenue recognition through the following five steps: • Identification of the contract, or contracts, with a customer • Identification of the performance obligations in the contract • Determination of the transaction price • Allocation of the transaction price to the performance obligations in the contract • Recognition of revenue when, or as, performance obligations are satisfied. |
REVENUE RECOGNITION REVENUE R_3
REVENUE RECOGNITION REVENUE RECOGNITION (Tables) | 3 Months Ended |
Apr. 30, 2020 | |
Revenue from Contract with Customer [Abstract] | |
Disaggregation of Revenue | The following table provides information about disaggregated revenue for our Customer Engagement and Cyber Intelligence segments by product revenue and service and support revenue, as well as by the recurring or nonrecurring nature of revenue for each business segment. Recurring revenue is the portion of our revenue that we believe is likely to be renewed in the future. The recurrence of these revenue streams in future periods depends on a number of factors including contractual periods and customers' renewal decisions. For our Customer Engagement segment: • Recurring revenue primarily consists of cloud revenue and initial and renewal support revenue. ◦ Cloud revenue consists primarily of software as a service (“SaaS”) revenue with some optional managed services revenue. ◦ SaaS revenue consists predominately of bundled SaaS (software with standard managed services) with some unbundled SaaS (software licensing rights sold separately from managed services and accounted for as term-based licenses). Unbundled SaaS can be deployed in the cloud either by us or a cloud partner. ◦ Bundled SaaS revenue is recognized over time and unbundled SaaS revenue is recognized at a point in time. Unbundled SaaS contracts are eligible for renewal after the initial fixed term, which in most cases is between a one- and three-year time frame. • Nonrecurring revenue primarily consists of our perpetual licenses, consulting, implementation and installation services, and training. For our Cyber Intelligence segment: • Recurring revenue primarily consists of initial and renewal support, subscription software licenses, and SaaS in certain limited transactions. • Nonrecurring revenue primarily consists of our perpetual licenses, long-term projects including software customizations that are recognized over time as control transfers to the customer using a percentage-of-completion (“POC”) method, consulting, implementation and installation services, training, and hardware. Three Months Ended Three Months Ended (in thousands) Customer Engagement Cyber Intelligence Total Customer Engagement Cyber Intelligence Total Revenue: Product $ 33,997 $ 43,287 $ 77,284 $ 54,002 $ 50,222 $ 104,224 Service and support 151,868 58,143 210,011 153,093 57,942 211,035 Total revenue $ 185,865 $ 101,430 $ 287,295 $ 207,095 $ 108,164 $ 315,259 Revenue by recurrence: Recurring revenue $ 129,070 $ 56,038 $ 185,108 $ 123,358 $ 46,817 $ 170,175 Nonrecurring revenue 56,795 45,392 102,187 83,737 61,347 145,084 Total revenue $ 185,865 $ 101,430 $ 287,295 $ 207,095 $ 108,164 $ 315,259 The following table provides a further disaggregation of revenue for our Customer Engagement segment. Three Months Ended (in thousands) 2020 2019 Customer Engagement revenue Recurring revenue Bundled SaaS revenue $ 33,393 $ 27,204 Unbundled SaaS revenue 5,472 6,252 Optional managed services revenue 14,132 13,629 Total cloud revenue 52,997 47,085 Support revenue 76,073 76,273 Total recurring revenue 129,070 123,358 Nonrecurring revenue Perpetual revenue 28,525 47,602 Professional services revenue 28,270 36,135 Total nonrecurring revenue 56,795 83,737 Total Customer Engagement revenue $ 185,865 $ 207,095 |
Contracts with Customers - Assets and Liabilities | The following table provides information about accounts receivable, contract assets, and contract liabilities from contracts with customers: (in thousands) April 30, 2020 January 31, 2020 Accounts receivable, net $ 308,304 $ 382,435 Contract assets, net $ 62,249 $ 64,961 Long-term contract assets (included in Other assets) $ 9,260 $ 1,358 Contract liabilities $ 378,548 $ 397,350 Long-term contract liabilities $ 40,566 $ 40,565 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction | The following table provides information about remaining performance obligations for each of our operating segments: April 30, 2020 January 31, 2020 (in thousands) Customer Engagement Cyber Intelligence Total Customer Engagement Cyber Intelligence Total RPO: Expected to be recognized within 1 year $ 363,496 $ 363,710 $ 727,206 $ 374,982 $ 356,677 $ 731,659 Expected to be recognized in more than 1 year 113,340 197,729 311,069 117,497 225,056 342,553 Total RPO $ 476,836 $ 561,439 $ 1,038,275 $ 492,479 $ 581,733 $ 1,074,212 |
NET (LOSS) INCOME PER COMMON _2
NET (LOSS) INCOME PER COMMON SHARE ATTRIBUTABLE TO VERINT SYSTEMS INC. (Tables) | 3 Months Ended |
Apr. 30, 2020 | |
Earnings Per Share [Abstract] | |
Schedule of calculation of basic and diluted net (loss) income per common share attributable to Verint Systems Inc. | The following table summarizes the calculation of basic and diluted net (loss) income per common share attributable to Verint Systems Inc. for the three months ended April 30, 2020 and 2019: Three Months Ended (in thousands, except per share amounts) 2020 2019 Net (loss) income $ (3,975) $ 3,761 Net income attributable to noncontrolling interests 2,039 2,185 Net (loss) income attributable to Verint Systems Inc. $ (6,014) $ 1,576 Weighted-average shares outstanding: Basic 64,376 65,438 Dilutive effect of employee equity award plans — 1,650 Dilutive effect of 1.50% convertible senior notes — — Dilutive effect of warrants — — Diluted 64,376 67,088 Net (loss) income per common share attributable to Verint Systems Inc.: Basic $ (0.09) $ 0.02 Diluted $ (0.09) $ 0.02 |
Schedule of anti-dilutive securities | We excluded the following weighted-average potential common shares from the calculations of diluted net income per common share during the applicable periods because their inclusion would have been anti-dilutive: Three Months Ended (in thousands) 2020 2019 Common shares excluded from calculation: Stock options and restricted stock-based awards 1,491 606 1.50% convertible senior notes 6,205 6,205 Warrants 6,205 6,205 |
CASH, CASH EQUIVALENTS AND SH_2
CASH, CASH EQUIVALENTS AND SHORT-TERM INVESTMENTS (Tables) | 3 Months Ended |
Apr. 30, 2020 | |
Cash, Cash Equivalents, and Short-term Investments [Abstract] | |
Schedule of Cash, Cash Equivalents and Short-term Investments [Table Text Block] | The following tables summarize our cash, cash equivalents, and short-term investments as of April 30, 2020 and January 31, 2020: April 30, 2020 (in thousands) Cost Basis Gross Unrealized Gains Gross Unrealized Losses Estimated Fair Value Cash and cash equivalents: Cash and bank time deposits $ 411,926 $ — $ — $ 411,926 Money market funds 144,745 — — 144,745 Total cash and cash equivalents $ 556,671 $ — $ — $ 556,671 Short-term investments: Bank time deposits $ 19,741 $ — $ — $ 19,741 Total short-term investments $ 19,741 $ — $ — $ 19,741 January 31, 2020 (in thousands) Cost Basis Gross Unrealized Gains Gross Unrealized Losses Estimated Fair Value Cash and cash equivalents: Cash and bank time deposits $ 379,057 $ — $ — $ 379,057 Money market funds 89 — — 89 Total cash and cash equivalents $ 379,146 $ — $ — $ 379,146 Short-term investments: Bank time deposits $ 20,215 $ — $ — $ 20,215 Total short-term investments $ 20,215 $ — $ — $ 20,215 |
BUSINESS COMBINATIONS (Tables)
BUSINESS COMBINATIONS (Tables) | 3 Months Ended |
Apr. 30, 2020 | |
Individually Insignificant Business Combinations Year Ended January 31 2020 | |
Business Acquisition | |
Schedule of Purchase Price Allocations for the Year Ended January 31, 2020 | The following table sets forth the components and the allocations of the combined purchase prices for the business combinations completed during the year ended January 31, 2020 including adjustments identified subsequent to the valuation date, none of which were material: (in thousands) Amount Components of Purchase Prices: Cash $ 76,198 Fair value of contingent consideration 15,253 Other purchase price adjustments (2,137) Total purchase prices $ 89,314 Allocation of Purchase Prices: Net tangible assets (liabilities): Accounts receivable $ 3,950 Other current assets, including cash acquired 14,394 Other assets 6,556 Current and other liabilities (8,531) Contract liabilities - current and long-term (3,794) Deferred income taxes (4,061) Net tangible assets 8,514 Identifiable intangible assets: Customer relationships 13,299 Developed technology 14,443 Trademarks and trade names 1,367 Non-compete agreements 1,307 Total identifiable intangible assets 30,416 Goodwill 50,384 Total purchase prices allocation $ 89,314 |
INTANGIBLE ASSETS AND GOODWILL
INTANGIBLE ASSETS AND GOODWILL (Tables) | 3 Months Ended |
Apr. 30, 2020 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of acquisition-related intangible assets | Acquisition-related intangible assets consisted of the following as of April 30, 2020 and January 31, 2020: April 30, 2020 (in thousands) Cost Accumulated Net Intangible assets with finite lives: Customer relationships $ 458,725 $ (330,492) $ 128,233 Acquired technology 291,603 (243,894) 47,709 Trade names 12,823 (7,411) 5,412 Distribution network 4,440 (4,440) — Non-competition agreements 1,307 (158) 1,149 Total intangible assets $ 768,898 $ (586,395) $ 182,503 January 31, 2020 (in thousands) Cost Accumulated Net Intangible assets with finite lives: Customer relationships $ 465,130 $ (328,069) $ 137,061 Acquired technology 294,841 (241,585) 53,256 Trade names 12,957 (6,783) 6,174 Distribution network 4,440 (4,440) — Non-competition agreements 1,307 (34) 1,273 Total intangible assets $ 778,675 $ (580,911) $ 197,764 |
Schedule of net acquisition-related intangible assets by reportable segment | The following table presents net acquisition-related intangible assets by reportable segment as of April 30, 2020 and January 31, 2020: April 30, January 31, (in thousands) 2020 2020 Customer Engagement $ 175,241 $ 189,896 Cyber Intelligence 7,262 7,868 Total $ 182,503 $ 197,764 |
Schedule of estimated future amortization expense on finite-lived acquisition-related intangible assets | Estimated future amortization expense on finite-lived acquisition-related intangible assets is as follows: (in thousands) Years Ending January 31, Amount 2021 (remainder of year) $ 36,856 2022 45,885 2023 37,978 2024 27,805 2025 11,754 2026 and thereafter 22,225 Total $ 182,503 |
Schedule of goodwill activity | Goodwill activity for the three months ended April 30, 2020, in total and by reportable segment, was as follows: Reportable Segment (in thousands) Total Customer Engagement Cyber Intelligence Three Months Ended April 30, 2020: Goodwill, gross, at January 31, 2020 $ 1,536,076 $ 1,367,111 $ 168,965 Accumulated impairment losses through January 31, 2020 (66,865) (56,043) (10,822) Goodwill, net, at January 31, 2020 1,469,211 1,311,068 158,143 Foreign currency translation and other (16,420) (15,764) (656) Business combinations, including adjustments to prior period acquisitions (357) — (357) Goodwill, net, at April 30, 2020 $ 1,452,434 $ 1,295,304 $ 157,130 Balance at April 30, 2020: Goodwill, gross, at April 30, 2020 $ 1,519,299 $ 1,351,347 $ 167,952 Accumulated impairment losses through April 30, 2020 (66,865) (56,043) (10,822) Goodwill, net, at April 30, 2020 $ 1,452,434 $ 1,295,304 $ 157,130 |
LONG-TERM DEBT (Tables)
LONG-TERM DEBT (Tables) | 3 Months Ended |
Apr. 30, 2020 | |
Long-term Debt, Unclassified [Abstract] | |
Summary of long-term debt | The following table summarizes our long-term debt at April 30, 2020 and January 31, 2020: April 30, January 31, (in thousands) 2020 2020 1.50% Convertible Senior Notes $ 400,000 $ 400,000 June 2017 Term Loan 413,313 414,375 Borrowings under 2017 Revolving Credit Facility 200,000 45,000 Less: Unamortized debt discounts and issuance costs (18,673) (22,327) Total debt 994,640 837,048 Less: current maturities 4,250 4,250 Long-term debt $ 990,390 $ 832,798 |
Summary of future scheduled principal payments on 2017 Term Loan | As of April 30, 2020, future scheduled principal payments on the 2017 Term Loan were as follows: (in thousands) Years Ending January 31, Amount 2021 (remainder of year) $ 3,188 2022 4,250 2023 4,250 2024 4,250 2025 397,375 Total $ 413,313 |
Schedule of components of interest expense | The following table presents the components of interest expense incurred on the Notes and on borrowings under our credit agreements for the three months ended April 30, 2020 and 2019: Three Months Ended (in thousands) 2020 2019 1.50% Convertible Senior Notes: Interest expense at 1.50% coupon rate $ 1,500 $ 1,500 Amortization of debt discount 3,226 3,061 Amortization of deferred debt issuance costs 304 289 Total Interest Expense - 1.50% Convertible Senior Notes $ 5,030 $ 4,850 Borrowings under Credit Agreements: Interest expense at contractual rates $ 4,513 $ 4,645 Impact of interest rate swap 591 — Amortization of debt discounts 18 16 Amortization of deferred debt issuance costs 391 374 Total Interest Expense - Borrowings under Credit Agreements $ 5,513 $ 5,035 |
SUPPLEMENTAL CONDENSED CONSOL_2
SUPPLEMENTAL CONDENSED CONSOLIDATED FINANCIAL STATEMENT INFORMATION (Tables) | 3 Months Ended |
Apr. 30, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Schedule of Inventories | Inventories consisted of the following as of April 30, 2020 and January 31, 2020: April 30, January 31, (in thousands) 2020 2020 Raw materials $ 12,422 $ 9,628 Work-in-process 4,943 4,749 Finished goods 7,665 6,118 Total inventories $ 25,030 $ 20,495 |
Schedule of Other Income (Expense), Net | Other expense, net consisted of the following for the three months ended April 30, 2020 and 2019: Three Months Ended (in thousands) 2020 2019 Foreign currency losses, net $ (3,254) $ (1,187) Gains on derivative financial instruments, net 1,014 549 Other, net 10 (152) Total other expense, net $ (2,230) $ (790) |
Schedule of Supplemental Information Regarding Condensed Consolidated Cash Flows | The following table provides supplemental information regarding our condensed consolidated cash flows for the three months ended April 30, 2020 and 2019: Three Months Ended (in thousands) 2020 2019 Cash paid for interest $ 5,302 $ 4,673 Cash payments (refunds) of income taxes, net $ 9,557 $ (1,513) Cash payments for operating leases $ 6,277 $ 6,841 Non-cash investing and financing transactions: Liabilities for contingent consideration in business combinations $ — $ 5,200 Finance leases of property and equipment $ 760 $ — Accrued but unpaid purchases of property and equipment $ 3,295 $ 3,301 Inventory transfers to property and equipment $ 153 $ 73 |
STOCKHOLDERS' EQUITY (Tables)
STOCKHOLDERS' EQUITY (Tables) | 3 Months Ended |
Apr. 30, 2020 | |
Stockholders' Equity Note [Abstract] | |
Summary of components of accumulated other comprehensive income (loss) | The following table summarizes changes in the components of our accumulated other comprehensive income (loss) by component for the three months ended April 30, 2020: (in thousands) Unrealized Gains (Losses) on Foreign Exchange Contracts Designated as Hedges Unrealized Loss on Interest Rate Swap Designated as Hedge Foreign Currency Translation Adjustments Total Accumulated other comprehensive income (loss) at January 31, 2020 $ 626 $ (10,528) $ (141,963) $ (151,865) Other comprehensive loss before reclassifications (829) (5,949) (20,640) (27,418) Amounts reclassified out of accumulated other comprehensive income (loss) (46) (463) — (509) Net other comprehensive loss (783) (5,486) (20,640) (26,909) Accumulated other comprehensive loss at April 30, 2020 $ (157) $ (16,014) $ (162,603) $ (178,774) |
Schedule of amounts reclassified out of accumulated other comprehensive income (loss) into the statement of operations by location | The amounts reclassified out of accumulated other comprehensive income (loss) into the condensed consolidated statement of operations, with presentation location, for the three months ended April 30, 2020 and 2019 were as follows: Three Months Ended (in thousands) 2020 2019 Location Unrealized losses on derivative financial instruments: Foreign currency forward contracts $ (3) $ (72) Cost of product revenue (5) (84) Cost of service and support revenue (27) (472) Research and development, net (17) (311) Selling, general and administrative (52) (939) Total, before income taxes 6 94 Benefit from income taxes $ (46) $ (845) Total, net of income taxes Interest rate swap agreement $ (591) $ — Interest expense (591) — Total, before income taxes 128 — Benefit from income taxes $ (463) $ — Total, net of income taxes |
FAIR VALUE MEASUREMENTS (Tables
FAIR VALUE MEASUREMENTS (Tables) | 3 Months Ended |
Apr. 30, 2020 | |
Liability for contingent consideration measured using significant unobservable inputs (Level 3) | |
Schedule of assets and liabilities measured at fair value on recurring basis | Our assets and liabilities measured at fair value on a recurring basis consisted of the following as of April 30, 2020 and January 31, 2020: April 30, 2020 Fair Value Hierarchy Category (in thousands) Level 1 Level 2 Level 3 Assets: Money market funds $ 144,745 $ — $ — Foreign currency forward contracts — 1,270 — Contingent consideration receivable — — 668 Total assets $ 144,745 $ 1,270 $ 668 Liabilities: Foreign currency forward contracts $ — $ 724 $ — Interest rate swap agreement — 20,445 — Contingent consideration - business combinations — — 35,002 Option to acquire noncontrolling interests of consolidated subsidiaries — — 2,650 Total liabilities $ — $ 21,169 $ 37,652 January 31, 2020 Fair Value Hierarchy Category (in thousands) Level 1 Level 2 Level 3 Assets: Money market funds $ 89 $ — $ — Foreign currency forward contracts — 812 — Contingent consideration receivable — — 738 Total assets $ 89 $ 812 $ 738 Liabilities: Foreign currency forward contracts $ — $ 132 $ — Interest rate swap agreements — 13,501 — Contingent consideration - business combinations — — 42,875 Option to acquire noncontrolling interests of consolidated subsidiaries — — 2,900 Total liabilities $ — $ 13,633 $ 45,775 |
Contingent consideration | |
Liability for contingent consideration measured using significant unobservable inputs (Level 3) | |
Schedule of changes in the estimated fair value using significant unobservable inputs (Level 3) | The following table presents the changes in the estimated fair values of our liabilities for contingent consideration measured using significant unobservable inputs (Level 3) for the three months ended April 30, 2020 and 2019: Three Months Ended (in thousands) 2020 2019 Fair value measurement at beginning of period $ 42,875 $ 61,340 Contingent consideration liabilities recorded for business combinations, including measurement period adjustments — 5,200 Changes in fair values, recorded in operating expenses (4,803) 1,213 Payments of contingent consideration (3,031) (6,361) Foreign currency translation and other (39) (13) Fair value measurement at end of period $ 35,002 $ 61,379 |
Option to Acquire Noncontrolling Interests | |
Liability for contingent consideration measured using significant unobservable inputs (Level 3) | |
Schedule of changes in the estimated fair value using significant unobservable inputs (Level 3) | The following table presents the change in the estimated fair value of this liability, which is measured using Level 3 inputs, for the three months ended April 30, 2020 and 2019: Three Months Ended (in thousands) 2020 2019 Fair value measurement at beginning of period $ 2,900 $ 3,000 Change in fair value, recorded in operating expenses (250) (150) Fair value measurement at end of period $ 2,650 $ 2,850 |
DERIVATIVE FINANCIAL INSTRUME_2
DERIVATIVE FINANCIAL INSTRUMENTS (Tables) | 3 Months Ended |
Apr. 30, 2020 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of fair values of derivative financial instruments | The fair values of our derivative financial instruments and their classifications in our condensed consolidated balance sheets as of April 30, 2020 and January 31, 2020 were as follows: Fair Value at April 30, January 31, (in thousands) Balance Sheet Classification 2020 2020 Derivative assets: Foreign currency forward contracts: Designated as cash flow hedges Prepaid expenses and other current assets $ 544 $ 710 Not designated as hedging instruments Prepaid expenses and other current assets 726 102 Total derivative assets $ 1,270 $ 812 Derivative liabilities: Foreign currency forward contracts: Designated as cash flow hedges Accrued expenses and other current liabilities $ 724 $ 16 Not designated as hedging instruments Accrued expenses and other current liabilities — 116 Interest rate swap agreements: Designated as a cash flow hedge Accrued expenses and other current liabilities 3,897 2,060 Designated as a cash flow hedge Other liabilities 16,548 11,441 Total derivative liabilities $ 21,169 $ 13,633 |
Schedule of the effects of derivative financial instruments designated as cash flow hedging instruments | The effects of derivative financial instruments designated as cash flow hedges on accumulated other comprehensive loss (“AOCL”) and on the condensed consolidated statements of operations for the three months ended April 30, 2020 and 2019 were as follows: Three Months Ended (in thousands) 2020 2019 Net (losses) gains recognized in AOCL: Foreign currency forward contracts $ (925) $ 342 Interest rate swap agreement (7,535) (2,017) $ (8,460) $ (1,675) Net losses reclassified from AOCL to the condensed consolidated statements of operations: Foreign currency forward contracts $ (52) $ (939) Interest rate swap agreement (591) — $ (643) $ (939) |
Schedule of gains (losses) recognized on derivative financial instruments not designated as hedging instruments | Gains (losses) recognized on derivative financial instruments not designated as hedging instruments in our condensed consolidated statements of operations for the three months ended months ended April 30, 2020 and 2019 were as follows: Classification in Condensed Consolidated Statements of Operations Three Months Ended (in thousands) 2020 2019 Foreign currency forward contracts Other income (expense), net $ 1,014 $ 564 Interest rate swap agreement Other income (expense), net — (15) $ 1,014 $ 549 |
STOCK-BASED COMPENSATION (Table
STOCK-BASED COMPENSATION (Tables) | 3 Months Ended |
Apr. 30, 2020 | |
Share-based Payment Arrangement [Abstract] | |
Schedule of Stock-Based Compensation Expense by Line Item | We recognized stock-based compensation expense in the following line items on the condensed consolidated statements of operations for the three months ended April 30, 2020 and 2019: Three Months Ended (in thousands) 2020 2019 Cost of revenue - product $ 310 $ 334 Cost of revenue - service and support 657 1,070 Research and development, net 2,336 2,590 Selling, general and administrative 10,881 13,109 Total stock-based compensation expense $ 14,184 $ 17,103 |
Schedule of Stock-Based Compensation Expense by Type of Award | The following table summarizes stock-based compensation expense by type of award for the three months ended April 30, 2020 and 2019: Three Months Ended (in thousands) 2020 2019 Restricted stock units and restricted stock awards $ 15,029 $ 14,890 Stock bonus program and bonus share program (837) 2,175 Total equity-settled awards 14,192 17,065 Phantom stock units (cash-settled awards) (8) 38 Total stock-based compensation expense $ 14,184 $ 17,103 |
Summary of RSU Activity | The following table (“Award Activity Table”) summarizes activity for RSUs, PSUs, and other stock awards that reduce available Plan capacity under the Plans for the three months ended April 30, 2020 and 2019: Three Months Ended April 30, 2020 2019 (in thousands, except per share data) Shares or Units Weighted-Average Grant Date Fair Value Shares or Units Weighted-Average Grant Date Fair Value Beginning balance 2,736 $ 52.53 2,777 $ 41.05 Granted 107 $ 51.26 1,444 $ 61.10 Released (399) $ 46.96 (448) $ 39.50 Forfeited (81) $ 51.84 (60) $ 35.44 Ending balance 2,363 $ 53.44 3,713 $ 49.23 |
Summary of Performance Share Activity | The following table summarizes PSU activity in isolation under the Plans for the three months ended April 30, 2020 and 2019 (these amounts are already included in the Award Activity Table above for 2020 and 2019): Three Months Ended (in thousands) 2020 2019 Beginning balance 526 512 Granted 107 286 Released (231) (234) Forfeited (20) (26) Ending balance 382 538 |
SEGMENT INFORMATION (Tables)
SEGMENT INFORMATION (Tables) | 3 Months Ended |
Apr. 30, 2020 | |
Segment Reporting [Abstract] | |
Operating results by segment | Operating results by segment for the three months ended April 30, 2020 and 2019 were as follows: Three Months Ended (in thousands) 2020 2019 Revenue: Customer Engagement Segment revenue $ 189,127 $ 215,867 Revenue adjustments (3,262) (8,772) 185,865 207,095 Cyber Intelligence Segment revenue 102,522 108,291 Revenue adjustments (1,092) (127) 101,430 108,164 Total revenue $ 287,295 $ 315,259 Segment contribution: Customer Engagement $ 65,797 $ 78,818 Cyber Intelligence 24,964 27,290 Total segment contribution 90,761 106,108 Reconciliation of segment contribution to operating income: Revenue adjustments 4,354 8,899 Shared support expenses 43,341 43,854 Amortization of acquired intangible assets 12,674 14,420 Stock-based compensation 14,184 17,103 Acquisition, integration, restructuring, and other unallocated expenses 10,034 7,364 Total reconciling items, net 84,587 91,640 Operating income $ 6,174 $ 14,468 |
BASIS OF PRESENTATION AND SIG_3
BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES - DESCRIPTION OF BUSINESS (Details) - USD ($) $ in Thousands | May 07, 2020 | Dec. 04, 2019 | Apr. 30, 2020 |
Convertible Preferred Stock [Member] | |||
Description of Business | |||
Issuance of Convertible Preferred Stock | $ 400,000 | $ 400,000 | |
Series B Preferred Stock [Member] | |||
Description of Business | |||
Issuance of Convertible Preferred Stock | $ 200,000 | ||
Series A Preferred Stock | Subsequent Event [Member] | |||
Description of Business | |||
Issuance of Convertible Preferred Stock | $ 200,000 | ||
Percentage Ownership of Outstanding Shares | 5.50% | ||
Minimum | Convertible Preferred Stock [Member] | |||
Description of Business | |||
Percentage Ownership of Outstanding Shares | 11.50% | ||
Maximum | Convertible Preferred Stock [Member] | |||
Description of Business | |||
Percentage Ownership of Outstanding Shares | 15.00% |
BASIS OF PRESENTATION AND SIG_4
BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES - CONSOLIDATION (Details) | 3 Months Ended |
Apr. 30, 2020 | |
Maximum | |
Basis of Presentation | |
Maximum ownership interest in cost method investments (as a percent) | 20.00% |
Joint venture, variable interest entity in which entity is primary beneficiary | |
Basis of Presentation | |
Equity interest in a joint venture (as a percent) | 50.00% |
BASIS OF PRESENTATION AND SIG_5
BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES - ASU 2016-13 (Details) - USD ($) $ in Thousands | Apr. 30, 2020 | Feb. 01, 2020 | Jan. 31, 2020 |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Accumulated deficit | $ (112,544) | $ (105,590) | |
Accounting Standards Update 2016-13 | |||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Accounts Receivable, Allowance for Credit Loss | $ 1,100 | ||
Deferred Tax Assets, Net | 200 | ||
Accumulated deficit | $ 900 |
REVENUE RECOGNITION REVENUE R_4
REVENUE RECOGNITION REVENUE RECOGNITION - DISAGGREGATION OF REVENUE (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Apr. 30, 2020 | Apr. 30, 2019 | |
Disaggregation of Revenue [Line Items] | ||
Revenue | $ 287,295 | $ 315,259 |
Recurring revenue | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | 185,108 | 170,175 |
Nonrecurring revenue | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | 102,187 | 145,084 |
Product revenue | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | 77,284 | 104,224 |
Service and support revenue | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | 210,011 | 211,035 |
Customer Engagement | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | 185,865 | 207,095 |
Customer Engagement | Recurring revenue | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | 129,070 | 123,358 |
Customer Engagement | Nonrecurring revenue | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | 56,795 | 83,737 |
Customer Engagement | Product revenue | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | 33,997 | 54,002 |
Customer Engagement | Service and support revenue | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | 151,868 | 153,093 |
Cyber Intelligence | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | 101,430 | 108,164 |
Cyber Intelligence | Recurring revenue | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | 56,038 | 46,817 |
Cyber Intelligence | Nonrecurring revenue | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | 45,392 | 61,347 |
Cyber Intelligence | Product revenue | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | 43,287 | 50,222 |
Cyber Intelligence | Service and support revenue | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | $ 58,143 | $ 57,942 |
REVENUE RECOGNITION REVENUE R_5
REVENUE RECOGNITION REVENUE RECOGNITION - CUSTOMER ENGAGEMENT - ADDITIONAL DISAGGREGATION OF REVENUE (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Apr. 30, 2020 | Apr. 30, 2019 | |
Disaggregation of Revenue [Line Items] | ||
Revenue | $ 287,295 | $ 315,259 |
Recurring revenue | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | 185,108 | 170,175 |
Nonrecurring revenue | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | 102,187 | 145,084 |
Customer Engagement | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | 185,865 | 207,095 |
Customer Engagement | Recurring revenue | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | 129,070 | 123,358 |
Customer Engagement | Nonrecurring revenue | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | 56,795 | 83,737 |
Customer Engagement | Cloud revenue | Recurring revenue | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | 52,997 | 47,085 |
Customer Engagement | Post-contract Support (PCS) Revenue | Recurring revenue | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | 76,073 | 76,273 |
Customer Engagement | Bundled SaaS Revenue | Recurring revenue | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | 33,393 | 27,204 |
Customer Engagement | Unbundled SaaS Revenue | Recurring revenue | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | 5,472 | 6,252 |
Customer Engagement | Optional managed services revenue | Recurring revenue | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | 14,132 | 13,629 |
Customer Engagement | Perpetual Revenue | Nonrecurring revenue | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | 28,525 | 47,602 |
Customer Engagement | Professional Services Revenue | Nonrecurring revenue | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | $ 28,270 | $ 36,135 |
REVENUE RECOGNITION REVENUE R_6
REVENUE RECOGNITION REVENUE RECOGNITION - CONTRACT BALANCES (Details) - USD ($) $ in Thousands | Apr. 30, 2020 | Jan. 31, 2020 |
Revenue from Contract with Customer [Abstract] | ||
Accounts receivable, net | $ 308,304 | $ 382,435 |
Contract assets, net | 62,249 | 64,961 |
Long-term contract assets (included in Other assets) | 9,260 | 1,358 |
Contract liabilities | 378,548 | 397,350 |
Long-term contract liabilities | $ 40,566 | $ 40,565 |
REVENUE RECOGNITION REVENUE R_7
REVENUE RECOGNITION REVENUE RECOGNITION - CONCENTRATION OF CREDIT RISK (Details) - USD ($) $ in Millions | Apr. 30, 2020 | Jan. 31, 2020 |
Cyber Intelligence | Credit Concentration Risk | ||
Concentration Risk [Line Items] | ||
Aggregate Contract Assets & Accounts Receivable | $ 47.3 | $ 51.7 |
REVENUE RECOGNITION REVENUE R_8
REVENUE RECOGNITION REVENUE RECOGNITION - CONTRACT ASSET AND LIABILITY ROLLFORWARD (Details) - USD ($) $ in Millions | 3 Months Ended | |
Apr. 30, 2020 | Apr. 30, 2019 | |
Revenue from Contract with Customer [Abstract] | ||
Current period revenue recognized from beginning balance of Contract Liabilities | $ 139.1 | $ 134.6 |
REVENUE RECOGNITION REVENUE R_9
REVENUE RECOGNITION REVENUE RECOGNITION - REMAINING PERFORMANCE OBLIGATIONS (Details) - USD ($) $ in Thousands | Apr. 30, 2020 | Jan. 31, 2020 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | ||
Remaining Performance Obligations | $ 1,038,275 | $ 1,074,212 |
Within One Year [Domain] | ||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | ||
Remaining Performance Obligations | 727,206 | 731,659 |
Greater than One Year [Domain] | ||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | ||
Remaining Performance Obligations | 311,069 | 342,553 |
Customer Engagement | ||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | ||
Remaining Performance Obligations | 476,836 | 492,479 |
Customer Engagement | Within One Year [Domain] | ||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | ||
Remaining Performance Obligations | 363,496 | 374,982 |
Customer Engagement | Greater than One Year [Domain] | ||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | ||
Remaining Performance Obligations | 113,340 | 117,497 |
Cyber Intelligence | ||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | ||
Remaining Performance Obligations | 561,439 | 581,733 |
Cyber Intelligence | Within One Year [Domain] | ||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | ||
Remaining Performance Obligations | 363,710 | 356,677 |
Cyber Intelligence | Greater than One Year [Domain] | ||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | ||
Remaining Performance Obligations | $ 197,729 | $ 225,056 |
NET (LOSS) INCOME PER COMMON _3
NET (LOSS) INCOME PER COMMON SHARE ATTRIBUTABLE TO VERINT SYSTEMS INC. NET INCOME PER COMMON SHARE ATTRIBUTABLE TO VERINT SYSTEMS INC. - CALCULATION (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | |
Apr. 30, 2020 | Apr. 30, 2019 | |
Net (Loss) Income Attributable to Verint Systems Inc. [Abstract] | ||
Net (loss) income | $ (3,975) | $ 3,761 |
Net income attributable to noncontrolling interests | 2,039 | 2,185 |
Net (loss) income attributable to Verint Systems Inc. | $ (6,014) | $ 1,576 |
Weighted Average Number of Shares Outstanding Reconciliation [Abstract] | ||
Basic (in shares) | 64,376,000 | 65,438,000 |
Dilutive effect of employee equity award plans | 0 | 1,650,000 |
Dilutive effect of 1.50% convertible senior notes | 0 | 0 |
Dilutive effect of warrants | 0 | 0 |
Diluted (in shares) | 64,376,000 | 67,088,000 |
Net (Loss) Income Per Common Share Attributable to Verint Systems Inc. [Abstract] | ||
Basic (in dollars per share) | $ (0.09) | $ 0.02 |
Diluted (in dollars per share) | $ (0.09) | $ 0.02 |
NET (LOSS) INCOME PER COMMON _4
NET (LOSS) INCOME PER COMMON SHARE ATTRIBUTABLE TO VERINT SYSTEMS INC. NET INCOME PER COMMON SHARE ATTRIBUTABLE TO VERINT SYSTEMS INC. - ANTIDILUTIVE SECURITIES (Details) - shares shares in Thousands | 3 Months Ended | |
Apr. 30, 2020 | Apr. 30, 2019 | |
Stock options and restricted stock-based awards | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share, (in shares) | 1,491 | 606 |
1.50% convertible senior notes | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share, (in shares) | 6,205 | 6,205 |
Warrants | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share, (in shares) | 6,205 | 6,205 |
NET (LOSS) INCOME PER COMMON _5
NET (LOSS) INCOME PER COMMON SHARE ATTRIBUTABLE TO VERINT SYSTEMS INC. NET INCOME PER COMMON SHARE ATTRIBUTABLE TO VERINT SYSTEMS INC. - OTHER DETAILS (Details) - USD ($) $ / shares in Units, $ in Thousands | May 07, 2020 | Dec. 04, 2019 | Apr. 30, 2020 |
Net (Loss) Income Per Common Share Attributable to Verint Systems Inc. [Abstract] | |||
Exercise Price of Warrants (in dollars per share) | $ 75 | ||
Warrants (in shares) | 6,205,000 | ||
Convertible Preferred Stock [Member] | |||
Net (Loss) Income Per Common Share Attributable to Verint Systems Inc. [Abstract] | |||
Issuance of Convertible Preferred Stock | $ 400,000 | $ 400,000 | |
Series A Preferred Stock | Subsequent Event [Member] | |||
Net (Loss) Income Per Common Share Attributable to Verint Systems Inc. [Abstract] | |||
Issuance of Convertible Preferred Stock | $ 200,000 | ||
1.50% Convertible Senior Notes | |||
Net (Loss) Income Per Common Share Attributable to Verint Systems Inc. [Abstract] | |||
1.50% Convertible Notes - Conversion Price (in dollars per share) | $ 64.46 |
CASH, CASH EQUIVALENTS AND SH_3
CASH, CASH EQUIVALENTS AND SHORT-TERM INVESTMENTS (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Apr. 30, 2020 | Apr. 30, 2019 | Jan. 31, 2020 | |
Schedule of Available-for-sale Securities | |||
Maturities and sales of investments | $ 15,648 | $ 2,965 | |
Bank time deposits | |||
Schedule of Available-for-sale Securities | |||
Cost basis | 19,741 | $ 20,215 | |
Gross unrealized gains | 0 | 0 | |
Gross unrealized losses | 0 | 0 | |
Estimated Fair Value | 19,741 | 20,215 | |
Total short-term investments | |||
Schedule of Available-for-sale Securities | |||
Cost basis | 19,741 | 20,215 | |
Gross unrealized gains | 0 | 0 | |
Gross unrealized losses | 0 | 0 | |
Estimated Fair Value | 19,741 | 20,215 | |
Cash and bank time deposits | |||
Schedule of Available-for-sale Securities | |||
Cost basis | 411,926 | 379,057 | |
Gross unrealized gains | 0 | 0 | |
Gross unrealized losses | 0 | 0 | |
Estimated Fair Value | 411,926 | 379,057 | |
Money market funds | |||
Schedule of Available-for-sale Securities | |||
Cost basis | 144,745 | 89 | |
Gross unrealized gains | 0 | 0 | |
Gross unrealized losses | 0 | 0 | |
Estimated Fair Value | 144,745 | 89 | |
Total cash and cash equivalents | |||
Schedule of Available-for-sale Securities | |||
Cost basis | 556,671 | 379,146 | |
Gross unrealized gains | 0 | 0 | |
Gross unrealized losses | 0 | 0 | |
Estimated Fair Value | $ 556,671 | $ 379,146 |
BUSINESS COMBINATIONS BUSINESS
BUSINESS COMBINATIONS BUSINESS COMBINATIONS - TWELVE MONTHS ENDED JANUARY 31, 2020 (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |
Apr. 30, 2020 | Apr. 30, 2019 | Jan. 31, 2020 | |
Business Acquisition | |||
Payments to Acquire Businesses, Net of Cash Acquired | $ 0 | $ 20,210 | |
Goodwill | 1,452,434 | $ 1,469,211 | |
Individually Insignificant Business Combinations Year Ended January 31 2020 | |||
Business Acquisition | |||
Business Combination, Consideration Transferred | 89,314 | ||
Payment Made At Closing To Acquire Businesses | 76,198 | ||
Cash Acquired from Acquisition | 2,400 | ||
Payments to Acquire Businesses, Net of Cash Acquired | 73,800 | ||
Fair value of contingent obligation | 15,253 | ||
Other Post-closing purchase price adjustment | (2,137) | ||
Business Combination, Contingent Consideration, Liability | 23,500 | ||
Goodwill | 50,384 | ||
Transaction and Related Costs, Including Integration Costs | 1,100 | $ 1,000 | |
Customer Engagement | |||
Business Acquisition | |||
Goodwill | 1,295,304 | 1,311,068 | |
Customer Engagement | Individually Insignificant Business Combinations Year Ended January 31 2020 | |||
Business Acquisition | |||
Goodwill | 39,100 | ||
Business Acquisition, Goodwill, Expected Tax Deductible Amount | 15,700 | ||
Cyber Intelligence | |||
Business Acquisition | |||
Goodwill | $ 157,130 | 158,143 | |
Cyber Intelligence | Individually Insignificant Business Combinations Year Ended January 31 2020 | |||
Business Acquisition | |||
Goodwill | $ 11,300 |
BUSINESS COMBINATIONS BUSINES_2
BUSINESS COMBINATIONS BUSINESS COMBINATIONS - TWELVE MONTHS ENDED JANUARY 31, 2020 - PURCHASE PRICE ALLOCATIONS (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Jan. 31, 2020 | Apr. 30, 2020 | |
Business Acquisition | ||
Goodwill | $ 1,469,211 | $ 1,452,434 |
Individually Insignificant Business Combinations Year Ended January 31 2020 | ||
Business Acquisition | ||
Payment Made At Closing To Acquire Businesses | 76,198 | |
Fair value of contingent obligation | 15,253 | |
Other Post-closing purchase price adjustment | (2,137) | |
Business Combination, Consideration Transferred | 89,314 | |
Accounts receivable | 3,950 | |
Other current assets, including cash acquired | 14,394 | |
Other assets | 6,556 | |
Current and other liabilities | (8,531) | |
Contract liabilities - current and long-term | (3,794) | |
Deferred income taxes | (4,061) | |
Net Tangible Assets (Liabilities) | 8,514 | |
Identifiable intangible assets | 30,416 | |
Goodwill | 50,384 | |
Total Purchase Price Allocations | 89,314 | |
Customer Relationships | Individually Insignificant Business Combinations Year Ended January 31 2020 | ||
Business Acquisition | ||
Identifiable intangible assets | 13,299 | |
Acquired Technology | Individually Insignificant Business Combinations Year Ended January 31 2020 | ||
Business Acquisition | ||
Identifiable intangible assets | 14,443 | |
Trademarks and Trade Names | Individually Insignificant Business Combinations Year Ended January 31 2020 | ||
Business Acquisition | ||
Identifiable intangible assets | 1,367 | |
Noncompete Agreements | Individually Insignificant Business Combinations Year Ended January 31 2020 | ||
Business Acquisition | ||
Identifiable intangible assets | $ 1,307 |
BUSINESS COMBINATIONS BUSINES_3
BUSINESS COMBINATIONS BUSINESS COMBINATIONS - TWELVE MONTHS ENDED JANUARY 31, 2020 - INTANGIBLE ASSETS USEFUL LIVES (Details) - Individually Insignificant Business Combinations Year Ended January 31 2020 | 12 Months Ended |
Jan. 31, 2020 | |
Business Acquisition | |
Weighted-average estimated useful life of all finite-lived identifiable intangible assets (in years) | 6 years 1 month 6 days |
Noncompete Agreements | |
Business Acquisition | |
Finite-Lived Intangible Asset, Useful Life | 3 years |
Minimum | Customer Relationships | |
Business Acquisition | |
Finite-Lived Intangible Asset, Useful Life | 5 years |
Minimum | Acquired Technology | |
Business Acquisition | |
Finite-Lived Intangible Asset, Useful Life | 4 years |
Minimum | Trademarks and Trade Names | |
Business Acquisition | |
Finite-Lived Intangible Asset, Useful Life | 3 years |
Maximum | Customer Relationships | |
Business Acquisition | |
Finite-Lived Intangible Asset, Useful Life | 9 years |
Maximum | Acquired Technology | |
Business Acquisition | |
Finite-Lived Intangible Asset, Useful Life | 5 years |
Maximum | Trademarks and Trade Names | |
Business Acquisition | |
Finite-Lived Intangible Asset, Useful Life | 5 years |
BUSINESS COMBINATIONS BUSINES_4
BUSINESS COMBINATIONS BUSINESS COMBINATIONS - OTHER BUSINESS COMBINATION INFORMATION (Details) - USD ($) $ in Millions | 3 Months Ended | |
Apr. 30, 2020 | Apr. 30, 2019 | |
Business Acquisition | ||
Change in fair value, recorded in operating expenses | $ 4.8 | $ (1.2) |
Payments of contingent consideration | 3 | $ 6.4 |
Recurring | Level 3 | ||
Business Acquisition | ||
Business Combination, Contingent Consideration, Liability | 35 | |
Accrued expenses and other current liabilities | Recurring | Level 3 | ||
Business Acquisition | ||
Business Combination, Contingent Consideration, Liability | 20.4 | |
Other liabilities | Recurring | Level 3 | ||
Business Acquisition | ||
Business Combination, Contingent Consideration, Liability | $ 14.6 |
INTANGIBLE ASSETS AND GOODWIL_2
INTANGIBLE ASSETS AND GOODWILL - INTANGIBLE ASSETS (Details) - USD ($) $ in Thousands | Apr. 30, 2020 | Jan. 31, 2020 |
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Finite-Lived Intangible Assets, Gross | $ 768,898 | $ 778,675 |
Finite-Lived Intangible Assets, Accumulated Amortization | (586,395) | (580,911) |
Intangible assets with finite lives, Net | 182,503 | 197,764 |
Customer Relationships | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Finite-Lived Intangible Assets, Gross | 458,725 | 465,130 |
Finite-Lived Intangible Assets, Accumulated Amortization | (330,492) | (328,069) |
Intangible assets with finite lives, Net | 128,233 | 137,061 |
Acquired Technology | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Finite-Lived Intangible Assets, Gross | 291,603 | 294,841 |
Finite-Lived Intangible Assets, Accumulated Amortization | (243,894) | (241,585) |
Intangible assets with finite lives, Net | 47,709 | 53,256 |
Trade Names | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Finite-Lived Intangible Assets, Gross | 12,823 | 12,957 |
Finite-Lived Intangible Assets, Accumulated Amortization | (7,411) | (6,783) |
Intangible assets with finite lives, Net | 5,412 | 6,174 |
Distribution Network | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Finite-Lived Intangible Assets, Gross | 4,440 | 4,440 |
Finite-Lived Intangible Assets, Accumulated Amortization | (4,440) | (4,440) |
Intangible assets with finite lives, Net | 0 | 0 |
Noncompete Agreements | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Finite-Lived Intangible Assets, Gross | 1,307 | 1,307 |
Finite-Lived Intangible Assets, Accumulated Amortization | (158) | (34) |
Intangible assets with finite lives, Net | $ 1,149 | $ 1,273 |
INTANGIBLE ASSETS AND GOODWIL_3
INTANGIBLE ASSETS AND GOODWILL INTANGIBLE ASSETS AND GOODWILL - INTANGIBLE ASSETS BY REPORTABLE SEGMENT (Details) - USD ($) $ in Thousands | Apr. 30, 2020 | Jan. 31, 2020 |
Finite-Lived Intangible Assets | ||
Intangible assets, net | $ 182,503 | $ 197,764 |
Customer Engagement | ||
Finite-Lived Intangible Assets | ||
Intangible assets, net | 175,241 | 189,896 |
Cyber Intelligence | ||
Finite-Lived Intangible Assets | ||
Intangible assets, net | $ 7,262 | $ 7,868 |
INTANGIBLE ASSETS AND GOODWIL_4
INTANGIBLE ASSETS AND GOODWILL INTANGIBLE ASSETS AND GOODWILL - AMORTIZATION AND IMPAIRMENT (Details) - USD ($) | 3 Months Ended | |
Apr. 30, 2020 | Apr. 30, 2019 | |
Finite-Lived Intangible Assets | ||
Amortization of intangible assets | $ 12,700,000 | $ 14,400,000 |
Goodwill, Impairment Loss | 0 | 0 |
Impairment of Intangible Assets, Finite-lived | $ 0 | $ 0 |
INTANGIBLE ASSETS AND GOODWIL_5
INTANGIBLE ASSETS AND GOODWILL INTANGIBLE ASSETS AND GOODWILL - FUTURE AMORTIZATION OF INTANGIBLE ASSETS (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Apr. 30, 2020 | Apr. 30, 2019 | Jan. 31, 2020 | |
Intangible Assets - Future Amortization [Abstract] | |||
2021 (remainder of year) | $ 36,856 | ||
2022 | 45,885 | ||
2023 | 37,978 | ||
2024 | 27,805 | ||
2025 | 11,754 | ||
2026 and thereafter | 22,225 | ||
Intangible assets with finite lives, Net | 182,503 | $ 197,764 | |
Impairment of Intangible Assets, Finite-lived | $ 0 | $ 0 |
INTANGIBLE ASSETS AND GOODWIL_6
INTANGIBLE ASSETS AND GOODWILL - GOODWILL (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Apr. 30, 2020 | Jan. 31, 2020 | |
Goodwill activity | ||
Goodwill, gross at the beginning of the period | $ 1,519,299 | $ 1,536,076 |
Accumulated impairment losses | (66,865) | (66,865) |
Goodwill, net at the beginning of the period | 1,469,211 | |
Business combinations, including adjustments to prior period acquisitions | (357) | |
Foreign currency translation and other | (16,420) | |
Goodwill, net, at the end of the period | 1,452,434 | |
Customer Engagement | ||
Goodwill activity | ||
Goodwill, gross at the beginning of the period | 1,351,347 | 1,367,111 |
Accumulated impairment losses | (56,043) | (56,043) |
Goodwill, net at the beginning of the period | 1,311,068 | |
Business combinations, including adjustments to prior period acquisitions | 0 | |
Foreign currency translation and other | (15,764) | |
Goodwill, net, at the end of the period | 1,295,304 | |
Cyber Intelligence | ||
Goodwill activity | ||
Goodwill, gross at the beginning of the period | 167,952 | 168,965 |
Accumulated impairment losses | (10,822) | $ (10,822) |
Goodwill, net at the beginning of the period | 158,143 | |
Business combinations, including adjustments to prior period acquisitions | (357) | |
Foreign currency translation and other | (656) | |
Goodwill, net, at the end of the period | $ 157,130 |
LONG-TERM DEBT - SUMMARY (Detai
LONG-TERM DEBT - SUMMARY (Details) - USD ($) $ in Thousands | Apr. 30, 2020 | Jan. 31, 2020 | Jun. 29, 2017 | Jun. 18, 2014 |
Debt Instrument | ||||
Debt Instrument, Unamortized Discount (Premium) and Debt Issuance Costs, Net | $ 18,673 | $ 22,327 | ||
Total debt | 994,640 | 837,048 | ||
Current maturities of long-term debt | 4,250 | 4,250 | ||
Long-term debt | 990,390 | 832,798 | ||
1.50% Convertible Senior Notes | ||||
Debt Instrument | ||||
Principal Amount - 1.50% Convertible Senior Notes | 400,000 | 400,000 | $ 400,000 | |
2017 Term Loan | ||||
Debt Instrument | ||||
2017 Term Loan | 413,313 | 414,375 | $ 425,000 | |
2017 Revolving Credit Facility | ||||
Debt Instrument | ||||
2017 Term Loan | $ 200,000 | $ 45,000 |
LONG-TERM DEBT - 1.50% CONVERTI
LONG-TERM DEBT - 1.50% CONVERTIBLE SENIOR NOTES (Details) | Jun. 18, 2014USD ($)shares | Apr. 30, 2020USD ($)$ / shares | Jan. 31, 2020USD ($) |
Debt Instrument | |||
Common Stock Issued (in shares) | shares | 5,750,000 | ||
1.50% Convertible Senior Notes | |||
Debt Instrument | |||
Principal Amount - 1.50% Convertible Senior Notes | $ 400,000,000 | $ 400,000,000 | $ 400,000,000 |
Coupon Interest Rate | 1.50% | ||
Proceeds from issuance of convertible notes, net of underwriting discounts | $ 391,900,000 | ||
1.50% Convertible Notes - Conversion Ratio | 15.5129 | ||
1.50% Convertible Notes - Base Principal Amount For Conversion Rate | $ 1,000 | ||
1.50% Convertible Notes - Conversion Price (in dollars per share) | $ / shares | $ 64.46 | ||
1.50% Convertible Notes - Number of Common Shares (in shares) | 6,205,000 | ||
1.50% Convertible Notes - Carrying Value of Debt Component | 319,900,000 | $ 384,100,000 | |
1.50% Convertible Notes - Carrying Value of Equity Component | $ 80,100,000 | 78,200,000 | |
Assumed Nonconvertible Debt Interest Rate | 5.00% | ||
Debt Component of Convertible Note Issuance Costs | $ 7,600,000 | ||
Adjustment To Additional Paid In Capital Debt Issuance Cost | $ 1,900,000 | ||
Unamortized Debt Discount | 14,500,000 | ||
Unamortized Debt Issuance Expense | $ 1,400,000 | ||
Effective interest rate (as a percent) | 5.29% |
LONG-TERM DEBT - NOTE HEDGES AN
LONG-TERM DEBT - NOTE HEDGES AND WARRANTS (Details) - USD ($) $ / shares in Units, $ in Millions | Jun. 18, 2014 | Apr. 30, 2020 |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | ||
Exercise Price of Warrants (in dollars per share) | $ 75 | |
Option Indexed to Issuer's Equity, Shares | 6,205,000 | |
Option Indexed to Issuer's Equity, Strike Price | $ 64.46 | |
Payments for convertible note hedges | $ 60.8 | |
Warrants (in shares) | 6,205,000 | |
Proceeds from issuance of warrants | $ 45.2 |
LONG-TERM DEBT LONG-TERM DEBT -
LONG-TERM DEBT LONG-TERM DEBT - 2017 CREDIT AGREEMENT - SUMMARY (Details) - USD ($) | Apr. 30, 2020 | Jan. 31, 2020 | Jun. 29, 2017 |
2017 Credit Agreement | |||
Debt Instrument | |||
Line of Credit Facility, Maximum Borrowing Capacity | $ 725,000,000 | ||
2017 Term Loan | |||
Debt Instrument | |||
Long-term Debt, Gross | $ 413,313,000 | $ 414,375,000 | 425,000,000 |
Unamortized Debt Discount | 500,000 | ||
2017 Revolving Credit Facility | |||
Debt Instrument | |||
Line of Credit Facility, Maximum Borrowing Capacity | $ 300,000,000 | ||
Long-term Debt, Gross | 200,000,000 | $ 45,000,000 | |
Line of Credit Facility, Fair Value of Amount Outstanding | $ 200,000,000 | ||
Debt, Weighted Average Interest Rate | 2.33% |
LONG-TERM DEBT LONG-TERM DEBT_2
LONG-TERM DEBT LONG-TERM DEBT - 2017 CREDIT AGREEMENT - INTEREST RATE DETAILS (Details) | 3 Months Ended | |
Apr. 30, 2020 | Jan. 31, 2020 | |
2017 Term Loan | ||
Debt Instrument | ||
Interest rate at end of period (as a percent) | 3.37% | 3.85% |
Effective interest rate (as a percent) | 3.55% | |
Variable Rate Based on Eurodollar Rate | 2017 Credit Agreement | Eurodollar loans | ||
Debt Instrument | ||
Variable rate basis | Eurodollar Rate | |
Variable Rate Based on Eurodollar Rate | 2017 Term Loan | Eurodollar loans | ||
Debt Instrument | ||
Interest rate margin (as a percent) | 2.25% | |
Variable Rate Based on Eurodollar Rate | 2017 Term Loan - Following January 2018 Amendment | Eurodollar loans | ||
Debt Instrument | ||
Interest rate margin (as a percent) | 2.00% | |
Variable Rate Based on ABR Rate | 2017 Credit Agreement | ABR Rate Loans | ||
Debt Instrument | ||
Variable rate basis | ABR rate | |
Variable Rate Based on ABR Rate | 2017 Term Loan | ABR Rate Loans | ||
Debt Instrument | ||
Interest rate margin (as a percent) | 1.25% | |
Variable Rate Based on ABR Rate | 2017 Term Loan - Following January 2018 Amendment | ABR Rate Loans | ||
Debt Instrument | ||
Interest rate margin (as a percent) | 1.00% |
LONG-TERM DEBT - DEBT COVENANT
LONG-TERM DEBT - DEBT COVENANT (Details) | 3 Months Ended |
Apr. 30, 2020numerator | |
2017 Revolving Credit Facility | |
Debt Instrument | |
Consolidated Total Debt to Consolidated EBITDA Ratio | 4.50 |
LONG-TERM DEBT LONG-TERM DEBT_3
LONG-TERM DEBT LONG-TERM DEBT - 2017 CREDIT AGREEMENT ISSUANCE COSTS (Details) - USD ($) $ in Millions | Jun. 29, 2017 | Jan. 31, 2018 |
2017 Credit Agreement | ||
Debt Instrument | ||
Debt Issuance Costs | $ 6.8 | |
2017 Term Loan | ||
Debt Instrument | ||
Debt Issuance Costs | 4.1 | |
Loss on early retirement of debt | $ 0.2 | |
2017 Revolving Credit Facility | ||
Debt Instrument | ||
Debt Issuance Costs | $ 2.7 |
LONG-TERM DEBT - FUTURE AMORTIZ
LONG-TERM DEBT - FUTURE AMORTIZATION (Details) - 2017 Term Loan - USD ($) $ in Thousands | 3 Months Ended | ||
Apr. 30, 2020 | Jan. 31, 2020 | Jun. 29, 2017 | |
Debt Instrument | |||
2021 (remainder of year) | $ 3,188 | ||
2022 | 4,250 | ||
2023 | 4,250 | ||
2024 | 4,250 | ||
2025 | 397,375 | ||
Total | 413,313 | $ 414,375 | $ 425,000 |
Debt Instrument, Periodic Payment | |||
Required quarterly principal payment | $ 1,100 |
LONG-TERM DEBT - INTEREST EXPEN
LONG-TERM DEBT - INTEREST EXPENSE (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Apr. 30, 2020 | Apr. 30, 2019 | |
1.50% Convertible Senior Notes | ||
Debt Instrument | ||
Interest Expense at Coupon or Contractual Rate | $ 1,500 | $ 1,500 |
Amortization of Debt Discount | 3,226 | 3,061 |
Amortization of Deferred Debt Issuance Costs | 304 | 289 |
Total Interest Expense | 5,030 | 4,850 |
Credit Agreements | ||
Debt Instrument | ||
Interest Expense at Coupon or Contractual Rate | 4,513 | 4,645 |
Amortization of Debt Discount | 18 | 16 |
Amortization of Deferred Debt Issuance Costs | 391 | 374 |
Derivative Instruments, gains (losses) Reclassified from Accumulated OCI into Income, Effective Portion, Net | 591 | 0 |
Total Interest Expense | $ 5,513 | $ 5,035 |
SUPPLEMENTAL CONDENSED CONSOL_3
SUPPLEMENTAL CONDENSED CONSOLIDATED FINANCIAL STATEMENT INFORMATION - INVENTORIES (Details) - USD ($) $ in Thousands | Apr. 30, 2020 | Jan. 31, 2020 |
Condensed Financial Information Disclosure [Abstract] | ||
Raw Materials | $ 12,422 | $ 9,628 |
Work in Process | 4,943 | 4,749 |
Finished Goods | 7,665 | 6,118 |
Total inventories | $ 25,030 | $ 20,495 |
SUPPLEMENTAL CONDENSED CONSOL_4
SUPPLEMENTAL CONDENSED CONSOLIDATED FINANCIAL STATEMENT INFORMATION SUPPLEMENTAL CONDENSED CONSOLIDATED FINANCIAL STATEMENT INFORMATION - OTHER INCOME (EXPENSE) (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Apr. 30, 2020 | Apr. 30, 2019 | |
Other Income and Expenses [Abstract] | ||
Foreign currency gains (losses), net | $ (3,254) | $ (1,187) |
(Losses) gains on derivative financial instruments, net | 1,014 | 549 |
Other nonoperating income and expense, net | 10 | (152) |
Total other income (expense), net | $ (2,230) | $ (790) |
SUPPLEMENTAL CONDENSED CONSOL_5
SUPPLEMENTAL CONDENSED CONSOLIDATED FINANCIAL STATEMENT INFORMATION - CASH FLOW INFORMATION (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Apr. 30, 2020 | Apr. 30, 2019 | |
Condensed Financial Information Disclosure [Abstract] | ||
Cash Paid for Interest | $ 5,302 | $ 4,673 |
Cash payments of income taxes, net | 9,557 | (1,513) |
Operating cash flows from operating leases | 6,277 | 6,841 |
Liabilities for contingent consideration in business combinations, including measurement period adjustments | 0 | 5,200 |
Finance leases of property and equipment | 760 | 0 |
Accrued but unpaid purchases of property and equipment | 3,295 | 3,301 |
Inventory Transfer to Property and Equipment | $ 153 | $ 73 |
STOCKHOLDERS' EQUITY STOCKHOLDE
STOCKHOLDERS' EQUITY STOCKHOLDERS' EQUITY - DIVIDENDS ON COMMON STOCK (Details) - USD ($) | 3 Months Ended | |
Apr. 30, 2020 | Apr. 30, 2019 | |
Stockholders' Equity Note [Abstract] | ||
Dividends on common stock | $ 0 | $ 0 |
STOCKHOLDERS' EQUITY STOCKHOL_2
STOCKHOLDERS' EQUITY STOCKHOLDERS' EQUITY - SHARE REPURCHASE PROGRAMS (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | ||
Apr. 30, 2020 | Apr. 30, 2019 | Jan. 31, 2020 | Dec. 04, 2019 | |
Class of Stock [Line Items] | ||||
Stock Repurchase Program, Authorized Amount | $ 300,000 | |||
Treasury stock acquired (in dollars) | $ 33,990 | $ 474 | ||
Apax Investment [Member] | ||||
Class of Stock [Line Items] | ||||
Treasury stock acquired (in dollars) | $ 34,000 | $ 116,100 |
STOCKHOLDERS' EQUITY - TREASURY
STOCKHOLDERS' EQUITY - TREASURY STOCK (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Apr. 30, 2020 | Apr. 30, 2019 | Jan. 31, 2020 | |
Stockholders' Equity Note [Abstract] | |||
Treasury stock aquired (in shares) | 613,000 | 8,000 | |
Treasury stock acquired (in dollars) | $ 33,990 | $ 474 | |
Treasury stock, (in shares) | 4,404,000 | 3,791,000 | |
Treasury stock (in dollars) | $ 208,124 | $ 174,134 |
STOCKHOLDERS' EQUITY - ISSUANCE
STOCKHOLDERS' EQUITY - ISSUANCE OF CONVERTIBLE PREFERRED STOCK (Details) - USD ($) $ in Thousands | May 07, 2020 | Dec. 04, 2019 | Apr. 30, 2020 |
Convertible Preferred Stock [Member] | |||
Class of Stock [Line Items] | |||
Issuance of Convertible Preferred Stock | $ 400,000 | $ 400,000 | |
Series A Preferred Stock | Subsequent Event [Member] | |||
Class of Stock [Line Items] | |||
Issuance of Convertible Preferred Stock | $ 200,000 |
STOCKHOLDERS' EQUITY STOCKHOL_3
STOCKHOLDERS' EQUITY STOCKHOLDERS' EQUITY - SCHEDULE OF ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Apr. 30, 2020 | Apr. 30, 2019 | |
Activity in Accumulated Other Comprehensive Loss | ||
Accumulated other comprehensive loss - beginning balance | $ (151,865) | |
Other Comprehensive Income (Loss), before Reclassifications, Net of Tax | (27,418) | |
Amounts reclassified out of accumulated other comprehensive income (loss) | (509) | |
Net other comprehensive income (loss), current period | (26,909) | |
Accumulated other comprehensive income (loss) - ending balance | (178,774) | |
Foreign Exchange Contract | ||
Activity in Accumulated Other Comprehensive Loss | ||
Amounts reclassified out of accumulated other comprehensive income (loss) | (46) | $ (845) |
Interest rate swap | ||
Activity in Accumulated Other Comprehensive Loss | ||
Amounts reclassified out of accumulated other comprehensive income (loss) | (463) | $ 0 |
Unrealized gains (losses) on derivative financial instruments designated as hedges | Foreign Exchange Contract | ||
Activity in Accumulated Other Comprehensive Loss | ||
Accumulated other comprehensive loss - beginning balance | 626 | |
Other Comprehensive Income (Loss), before Reclassifications, Net of Tax | (829) | |
Amounts reclassified out of accumulated other comprehensive income (loss) | (46) | |
Net other comprehensive income (loss), current period | (783) | |
Accumulated other comprehensive income (loss) - ending balance | (157) | |
Unrealized gains (losses) on derivative financial instruments designated as hedges | Interest rate swap | ||
Activity in Accumulated Other Comprehensive Loss | ||
Accumulated other comprehensive loss - beginning balance | (10,528) | |
Other Comprehensive Income (Loss), before Reclassifications, Net of Tax | (5,949) | |
Amounts reclassified out of accumulated other comprehensive income (loss) | (463) | |
Net other comprehensive income (loss), current period | (5,486) | |
Accumulated other comprehensive income (loss) - ending balance | (16,014) | |
Foreign currency translation adjustments | ||
Activity in Accumulated Other Comprehensive Loss | ||
Accumulated other comprehensive loss - beginning balance | (141,963) | |
Other Comprehensive Income (Loss), before Reclassifications, Net of Tax | (20,640) | |
Amounts reclassified out of accumulated other comprehensive income (loss) | 0 | |
Net other comprehensive income (loss), current period | (20,640) | |
Accumulated other comprehensive income (loss) - ending balance | $ (162,603) |
STOCKHOLDERS' EQUITY STOCKHOL_4
STOCKHOLDERS' EQUITY STOCKHOLDERS' EQUITY - AMOUNTS RECLASSIFIED OUT OF ACCUMULATED OTHER COMPREHENSIVE LOSS (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Apr. 30, 2020 | Apr. 30, 2019 | |
Reclassifications Out of Accumulated Other Comprehensive Income (Loss) | ||
Amounts reclassified out of accumulated other comprehensive income (loss) | $ (509) | |
Foreign Exchange Contract | ||
Reclassifications Out of Accumulated Other Comprehensive Income (Loss) | ||
Derivative Instruments, gains (losses) Reclassified from Accumulated OCI into Income, Effective Portion, Net | (52) | $ (939) |
Other Comprehensive Income (Loss), Reclassification Adjustment on Derivatives Included in Net Income, Income Taxes | 6 | 94 |
Amounts reclassified out of accumulated other comprehensive income (loss) | (46) | (845) |
Foreign Exchange Contract | Cost of revenue - product | ||
Reclassifications Out of Accumulated Other Comprehensive Income (Loss) | ||
Derivative Instruments, gains (losses) Reclassified from Accumulated OCI into Income, Effective Portion, Net | (3) | (72) |
Foreign Exchange Contract | Cost of revenue - service and support | ||
Reclassifications Out of Accumulated Other Comprehensive Income (Loss) | ||
Derivative Instruments, gains (losses) Reclassified from Accumulated OCI into Income, Effective Portion, Net | (5) | (84) |
Foreign Exchange Contract | Research and development, net | ||
Reclassifications Out of Accumulated Other Comprehensive Income (Loss) | ||
Derivative Instruments, gains (losses) Reclassified from Accumulated OCI into Income, Effective Portion, Net | (27) | (472) |
Foreign Exchange Contract | Selling, General and Administrative Expenses | ||
Reclassifications Out of Accumulated Other Comprehensive Income (Loss) | ||
Derivative Instruments, gains (losses) Reclassified from Accumulated OCI into Income, Effective Portion, Net | (17) | (311) |
Interest rate swap | ||
Reclassifications Out of Accumulated Other Comprehensive Income (Loss) | ||
Derivative Instruments, gains (losses) Reclassified from Accumulated OCI into Income, Effective Portion, Net | (591) | 0 |
Other Comprehensive Income (Loss), Reclassification Adjustment on Derivatives Included in Net Income, Income Taxes | 128 | 0 |
Amounts reclassified out of accumulated other comprehensive income (loss) | (463) | 0 |
Interest rate swap | Interest Expense | ||
Reclassifications Out of Accumulated Other Comprehensive Income (Loss) | ||
Derivative Instruments, gains (losses) Reclassified from Accumulated OCI into Income, Effective Portion, Net | $ (591) | $ 0 |
INCOME TAXES INCOME TAXES - PRO
INCOME TAXES INCOME TAXES - PROVISION FOR INCOME TAXES (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Apr. 30, 2020 | Apr. 30, 2019 | |
Income Tax Disclosure [Abstract] | ||
(Benefit) Provision for income taxes | $ (1,762) | $ 1,409 |
(Loss) income before (benefit) provision for income taxes | $ (5,737) | $ 5,170 |
Effective Income Tax Rate (as a percent) | 30.70% | 27.30% |
Effective Income Tax Rate Reconciliation, at Federal Statutory Income Tax Rate, Percent | 21.00% |
INCOME TAXES INCOME TAXES - UNR
INCOME TAXES INCOME TAXES - UNRECOGNIZED TAX BENEFITS (Details) - USD ($) $ in Thousands | Apr. 30, 2020 | Jan. 31, 2020 |
Income Tax Disclosure [Abstract] | ||
Unrecognized Tax Benefits (excluding interest and penalties) | $ 92,300 | $ 91,300 |
Unrecognized Tax Benefits, Income Tax Penalties and Interest Accrued | 3,000 | $ 2,900 |
Unrecognized Tax Benefits that Would Impact Effective Tax Rate | 92,300 | |
Significant Change in Unrecognized Tax Benefits is Reasonably Possible, Amount of Unrecorded Benefit | $ 1,300 |
FAIR VALUE MEASUREMENTS - FAIR
FAIR VALUE MEASUREMENTS - FAIR VALUE TABLE (Details) - Recurring - USD ($) $ in Thousands | Apr. 30, 2020 | Jan. 31, 2020 |
Level 1 | ||
Assets: | ||
Money market funds | $ 144,745 | $ 89 |
Foreign currency forward contracts | 0 | 0 |
Contingent Consideration Receivable - Asset | 0 | 0 |
Total assets | 144,745 | 89 |
Liabilities: | ||
Foreign currency forward contracts | 0 | 0 |
Business Acquisition Contingent Consideration Fair Value Disclosure | 0 | 0 |
Option to acquire noncontrolling interests of consolidated subsidiaries | 0 | 0 |
Financial and Nonfinancial Liabilities, Fair Value Disclosure | 0 | 0 |
Level 2 | ||
Assets: | ||
Money market funds | 0 | 0 |
Foreign currency forward contracts | 1,270 | 812 |
Contingent Consideration Receivable - Asset | 0 | 0 |
Total assets | 1,270 | 812 |
Liabilities: | ||
Foreign currency forward contracts | 724 | 132 |
Business Acquisition Contingent Consideration Fair Value Disclosure | 0 | 0 |
Option to acquire noncontrolling interests of consolidated subsidiaries | 0 | 0 |
Financial and Nonfinancial Liabilities, Fair Value Disclosure | 21,169 | 13,633 |
Level 3 | ||
Assets: | ||
Money market funds | 0 | 0 |
Foreign currency forward contracts | 0 | 0 |
Contingent Consideration Receivable - Asset | 668 | 738 |
Total assets | 668 | 738 |
Liabilities: | ||
Foreign currency forward contracts | 0 | 0 |
Business Acquisition Contingent Consideration Fair Value Disclosure | 35,002 | 42,875 |
Option to acquire noncontrolling interests of consolidated subsidiaries | 2,650 | 2,900 |
Financial and Nonfinancial Liabilities, Fair Value Disclosure | 37,652 | 45,775 |
Interest rate swap | Level 1 | ||
Liabilities: | ||
Interest rate swap agreements | 0 | 0 |
Interest rate swap | Level 2 | ||
Liabilities: | ||
Interest rate swap agreements | 20,445 | 13,501 |
Interest rate swap | Level 3 | ||
Liabilities: | ||
Interest rate swap agreements | $ 0 | $ 0 |
FAIR VALUE MEASUREMENTS - CONTI
FAIR VALUE MEASUREMENTS - CONTINGENT CONSIDERATION TABLE (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Apr. 30, 2020 | Apr. 30, 2019 | |
Changes in the estimated fair value of liability for contingent consideration measured using significant unobservable inputs (Level 3) | ||
Change in fair value, recorded in operating expenses | $ 4,800 | $ (1,200) |
Payments of contingent consideration | 3,000 | 6,400 |
Contingent consideration | ||
Changes in the estimated fair value of liability for contingent consideration measured using significant unobservable inputs (Level 3) | ||
Fair value measurement at the beginning of the period | 42,875 | 61,340 |
Contingent consideration liabilities recorded for business combinations, including measurement period adjustments | 0 | 5,200 |
Change in fair value, recorded in operating expenses | (4,803) | 1,213 |
Payments of contingent consideration | (3,031) | (6,361) |
Foreign currency translation and other | (39) | (13) |
Fair value measurement at the end of the period | $ 35,002 | $ 61,379 |
FAIR VALUE MEASUREMENTS FAIR VA
FAIR VALUE MEASUREMENTS FAIR VALUE MEASUREMENTS - OPTION TO ACQUIRE NONCONTROLLING INTERESTS (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |
Apr. 30, 2020 | Apr. 30, 2019 | Jan. 31, 2020 | |
Changes in the estimated fair value of liability for contingent consideration measured using significant unobservable inputs (Level 3) | |||
Change in fair value, recorded in operating expenses | $ 4,800 | $ (1,200) | |
Contingent consideration | Minimum | |||
Liability for contingent consideration measured using significant unobservable inputs (Level 3) | |||
Fair Value Measurement Input - Discount Rate | 6.40% | 4.30% | |
Contingent consideration | Maximum | |||
Liability for contingent consideration measured using significant unobservable inputs (Level 3) | |||
Fair Value Measurement Input - Discount Rate | 6.80% | 4.90% | |
Option to Acquire Noncontrolling Interests | |||
Liability for contingent consideration measured using significant unobservable inputs (Level 3) | |||
Fair Value Measurement Input - Discount Rate | 11.00% | 9.00% | |
Changes in the estimated fair value of liability for contingent consideration measured using significant unobservable inputs (Level 3) | |||
Fair value measurement at the beginning of the period | $ 2,900 | 3,000 | $ 3,000 |
Change in fair value, recorded in operating expenses | (250) | (150) | |
Fair value measurement at the end of the period | $ 2,650 | $ 2,850 | $ 2,900 |
FAIR VALUE MEASUREMENTS - OTHER
FAIR VALUE MEASUREMENTS - OTHER FAIR VALUE DISCLOSURES (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended |
Apr. 30, 2020 | Jan. 31, 2020 | |
Contingent consideration | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions | ||
Weighted Average Discount Rate | 6.60% | |
Term Loans | Level 3 | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions | ||
Term Loans - Fair Value | $ 406 | $ 417 |
1.50% Convertible Senior Notes | Level 2 | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions | ||
1.50% Convertible Senior Notes - Fair Value | 386 | 438 |
2017 Revolving Credit Facility | Level 3 | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions | ||
Term Loans - Fair Value | $ 190 | $ 45 |
Contingent consideration | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions | ||
Weighted Average Discount Rate | 4.80% | |
Option to Acquire Noncontrolling Interests | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions | ||
Fair Value Measurement Input - Discount Rate | 11.00% | 9.00% |
Minimum | Contingent consideration | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions | ||
Fair Value Measurement Input - Discount Rate | 6.40% | 4.30% |
Minimum | Contingent consideration | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions | ||
Fair Value Measurement Input - Discount Rate | 3.20% | 2.10% |
Maximum | Contingent consideration | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions | ||
Fair Value Measurement Input - Discount Rate | 6.80% | 4.90% |
Maximum | Contingent consideration | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions | ||
Fair Value Measurement Input - Discount Rate | 6.70% | 4.90% |
FAIR VALUE MEASUREMENTS FAIR _2
FAIR VALUE MEASUREMENTS FAIR VALUE MEASUREMENTS - ASSETS AND LIABILITIES NOT MEASURED AT FV ON (Details) $ in Millions | Apr. 30, 2020USD ($) |
Fair Value Disclosures - Assets and Liabilities Not Measured at Fair Value [Abstract] | |
Noncontrollling Equity Investment in Privately-held Comp | $ 3.8 |
DERIVATIVE FINANCIAL INSTRUME_3
DERIVATIVE FINANCIAL INSTRUMENTS DERIVATIVE FINANCIAL INSTRUMENTS - INTEREST RATE SWAP AGREEMENTS (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | |
Apr. 30, 2020 | Jul. 31, 2018 | Jan. 31, 2020 | |
Foreign Exchange Contract | |||
DERIVATIVE FINANCIAL INSTRUMENTS | |||
Derivative, Remaining Maturity | 12 months | ||
Derivative - Notional Amount | $ 106.2 | $ 89 | |
2016 Interest Rate Swap | |||
DERIVATIVE FINANCIAL INSTRUMENTS | |||
Derivative - Notional Amount | $ 200 | ||
Derivative - Fixed Interest Rate | 4.143% | ||
Derivative - Index Interest Rate Floor | 0.75% | ||
Derivative - Basis Spread on Variable Rate | 2.75% | ||
Gain on Discontinuation of Cash Flow Hedge | $ 0.9 | ||
2018 Interest Rate Swap | |||
DERIVATIVE FINANCIAL INSTRUMENTS | |||
Derivative - Notional Amount | $ 200 | ||
Derivative - Fixed Interest Rate | 2.949% | ||
Derivative - Index Interest Rate Floor | 0.00% | ||
Fixed Interest Rate, Including Impact of Margin | 4.949% | ||
2017 Term Loan - Following January 2018 Amendment | Variable Rate Based on Eurodollar Rate | Eurodollar loans | |||
DERIVATIVE FINANCIAL INSTRUMENTS | |||
Interest rate margin (as a percent) | 2.00% |
DERIVATIVE FINANCIAL INSTRUME_4
DERIVATIVE FINANCIAL INSTRUMENTS - ASSETS AND LIABILITIES (Details) - USD ($) $ in Thousands | Apr. 30, 2020 | Jan. 31, 2020 |
Fair Values of Derivative Financial Instruments | ||
Assets, Fair Value | $ 1,270 | $ 812 |
Liabilities, Fair Value | 21,169 | 13,633 |
Prepaid Expenses and Other Current Assets | Foreign Exchange Contract | Derivative designated as hedging instruments | ||
Fair Values of Derivative Financial Instruments | ||
Assets, Fair Value | 544 | 710 |
Prepaid Expenses and Other Current Assets | Foreign Exchange Contract | Derivative not designated as hedging instruments | ||
Fair Values of Derivative Financial Instruments | ||
Assets, Fair Value | 726 | 102 |
Accrued expenses and other current liabilities | Foreign Exchange Contract | Derivative designated as hedging instruments | ||
Fair Values of Derivative Financial Instruments | ||
Liabilities, Fair Value | 724 | 16 |
Accrued expenses and other current liabilities | Foreign Exchange Contract | Derivative not designated as hedging instruments | ||
Fair Values of Derivative Financial Instruments | ||
Liabilities, Fair Value | 0 | 116 |
Accrued expenses and other current liabilities | Interest rate swap | Derivative designated as hedging instruments | ||
Fair Values of Derivative Financial Instruments | ||
Liabilities, Fair Value | 3,897 | 2,060 |
Other liabilities | Interest rate swap | Derivative designated as hedging instruments | ||
Fair Values of Derivative Financial Instruments | ||
Liabilities, Fair Value | $ 16,548 | $ 11,441 |
DERIVATIVE FINANCIAL INSTRUME_5
DERIVATIVE FINANCIAL INSTRUMENTS - CASH FLOW HEDGES (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Apr. 30, 2020 | Apr. 30, 2019 | Jan. 31, 2020 | |
DERIVATIVE FINANCIAL INSTRUMENTS | |||
Accumulated Other Comprehensive Income (Loss), Net of Tax | $ (178,774) | $ (151,865) | |
Cash flow hedging | Derivative designated as hedging instruments | |||
DERIVATIVE FINANCIAL INSTRUMENTS | |||
Net (losses) gains recognized in other comprehensive income (loss) | (8,460) | $ (1,675) | |
Derivative Instruments, gains (losses) Reclassified from Accumulated OCI into Income, Effective Portion, Net | (643) | (939) | |
2018 Interest Rate Swap | Cash flow hedging | Derivative designated as hedging instruments | |||
DERIVATIVE FINANCIAL INSTRUMENTS | |||
Net losses on interest rate swaps expected to be reclassified to earnings during next 12 months | (3,100) | ||
Foreign Exchange Contract | |||
DERIVATIVE FINANCIAL INSTRUMENTS | |||
Derivative Instruments, gains (losses) Reclassified from Accumulated OCI into Income, Effective Portion, Net | (52) | (939) | |
Foreign Exchange Contract | Cash flow hedging | Derivative designated as hedging instruments | |||
DERIVATIVE FINANCIAL INSTRUMENTS | |||
Net (losses) gains recognized in other comprehensive income (loss) | (925) | 342 | |
Derivative Instruments, gains (losses) Reclassified from Accumulated OCI into Income, Effective Portion, Net | (52) | (939) | |
Interest rate swap | |||
DERIVATIVE FINANCIAL INSTRUMENTS | |||
Net (losses) gains recognized in other comprehensive income (loss) | (6,944) | (2,017) | |
Derivative Instruments, gains (losses) Reclassified from Accumulated OCI into Income, Effective Portion, Net | (591) | 0 | |
Interest rate swap | Cash flow hedging | Derivative designated as hedging instruments | |||
DERIVATIVE FINANCIAL INSTRUMENTS | |||
Net (losses) gains recognized in other comprehensive income (loss) | (7,535) | (2,017) | |
Derivative Instruments, gains (losses) Reclassified from Accumulated OCI into Income, Effective Portion, Net | (591) | $ 0 | |
Unrealized gains (losses) on derivative financial instruments designated as hedges | 2018 Interest Rate Swap | Cash flow hedging | Derivative designated as hedging instruments | |||
DERIVATIVE FINANCIAL INSTRUMENTS | |||
Accumulated Other Comprehensive Income (Loss), Net of Tax | (16,000) | ||
Unrealized gains (losses) on derivative financial instruments designated as hedges | Foreign Exchange Contract | |||
DERIVATIVE FINANCIAL INSTRUMENTS | |||
Accumulated Other Comprehensive Income (Loss), Net of Tax | (157) | 626 | |
Unrealized gains (losses) on derivative financial instruments designated as hedges | Foreign Exchange Contract | Cash flow hedging | Derivative designated as hedging instruments | |||
DERIVATIVE FINANCIAL INSTRUMENTS | |||
Net gains on foreign currency forward contracts expected to be reclassified to earnings during next 12 months | (200) | ||
Unrealized gains (losses) on derivative financial instruments designated as hedges | Interest rate swap | |||
DERIVATIVE FINANCIAL INSTRUMENTS | |||
Accumulated Other Comprehensive Income (Loss), Net of Tax | $ (16,014) | $ (10,528) |
DERIVATIVE FINANCIAL INSTRUME_6
DERIVATIVE FINANCIAL INSTRUMENTS DERIVATIVE FINANCIAL INSTRUMENTS - NOT DESIGNATED AT HEDGING INSTRUMENTS (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Apr. 30, 2020 | Apr. 30, 2019 | |
DERIVATIVE FINANCIAL INSTRUMENTS | ||
Gains (losses) on derivative financial instruments, net | $ 1,014 | $ 549 |
Derivative not designated as hedging instruments | ||
DERIVATIVE FINANCIAL INSTRUMENTS | ||
Gains (losses) on derivative financial instruments, net | 1,014 | 549 |
Derivative not designated as hedging instruments | Interest rate swap | ||
DERIVATIVE FINANCIAL INSTRUMENTS | ||
Gains (losses) on derivative financial instruments, net | 0 | (15) |
Derivative not designated as hedging instruments | Foreign currency forward contracts | ||
DERIVATIVE FINANCIAL INSTRUMENTS | ||
Gains (losses) on derivative financial instruments, net | $ 1,014 | $ 564 |
STOCK-BASED COMPENSATION STOCK-
STOCK-BASED COMPENSATION STOCK-BASED COMPENSATION - NEW STOCK-BASED COMPENSATION PLAN (Details) - 2019 Long-Term Stock Incentive Plan | Apr. 30, 2020shares |
Stock-Based Compensation Plans | |
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Authorized | 9,475,000 |
Reduction in 2019 Long-Term Stock Incentive Plan Capacity From Awards Other Than Options or SARs | 2.38 |
STOCK-BASED COMPENSATION STOC_2
STOCK-BASED COMPENSATION STOCK-BASED COMPENSATION - STOCK-BASED COMPENSATION - BY LINE ITEM (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Apr. 30, 2020 | Apr. 30, 2019 | |
Stock-Based Compensation Plans | ||
Stock-based compensation expense | $ 14,184 | $ 17,103 |
Cost of revenue - product | ||
Stock-Based Compensation Plans | ||
Stock-based compensation expense | 310 | 334 |
Cost of revenue - service and support | ||
Stock-Based Compensation Plans | ||
Stock-based compensation expense | 657 | 1,070 |
Research and development, net | ||
Stock-Based Compensation Plans | ||
Stock-based compensation expense | 2,336 | 2,590 |
Selling, General and Administrative Expenses | ||
Stock-Based Compensation Plans | ||
Stock-based compensation expense | $ 10,881 | $ 13,109 |
STOCK-BASED COMPENSATION STOC_3
STOCK-BASED COMPENSATION STOCK-BASED COMPENSATION - STOCK-BASED COMPENSATION - BY TYPE (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Apr. 30, 2020 | Apr. 30, 2019 | |
Stock-Based Compensation Plans | ||
Stock-based compensation expense | $ 14,184 | $ 17,103 |
Equity Settled Awards | ||
Stock-Based Compensation Plans | ||
Stock-based compensation expense | 14,192 | 17,065 |
Equity Settled Awards | Restricted stock units and restricted stock awards | ||
Stock-Based Compensation Plans | ||
Stock-based compensation expense | 15,029 | 14,890 |
Equity Settled Awards | Stock Bonus Program and Bonus Share Program | ||
Stock-Based Compensation Plans | ||
Stock-based compensation expense | (837) | 2,175 |
Cash Settled Awards | ||
Stock-Based Compensation Plans | ||
Stock-based compensation expense | $ (8) | $ 38 |
STOCK-BASED COMPENSATION STOC_4
STOCK-BASED COMPENSATION STOCK-BASED COMPENSATION - RESTRICTED STOCK UNITS (Details) - Restricted Stock Units (RSUs) - USD ($) $ / shares in Units, shares in Thousands, $ in Millions | 3 Months Ended | |
Apr. 30, 2020 | Apr. 30, 2019 | |
Summary of award activity | ||
Beginning balance (in shares) | 2,736 | 2,777 |
Granted (in shares) | 107 | 1,444 |
Released (in shares) | (399) | (448) |
Forfeited (in shares) | (81) | (60) |
Ending balance (in shares) | 2,363 | 3,713 |
Weighted-Average Grant-Date Fair Value | ||
Beginning balance (in dollars per share) | $ 52.53 | $ 41.05 |
Granted (in dollars per share) | 51.26 | 61.10 |
Released (in dollars per share) | 46.96 | 39.50 |
Forfeited (in dollars per share) | 51.84 | 35.44 |
Ending balance (in dollars per share) | $ 53.44 | $ 49.23 |
Additional disclosures | ||
Unrecognized compensation expense | $ 70.2 | |
Remaining weighted-average vesting period over which expense is expected to be recognized (in years) | 1 year 4 months 24 days |
STOCK-BASED COMPENSATION STOC_5
STOCK-BASED COMPENSATION STOCK-BASED COMPENSATION - PERFORMANCE RESTRICTED STOCK UNITS (Details) - Performance- based RSU's - shares shares in Thousands | 3 Months Ended | |
Apr. 30, 2020 | Apr. 30, 2019 | |
Stock-Based Compensation Plans | ||
Beginning balance (in shares) | 526 | 512 |
Granted (in shares) | 107 | 286 |
Released (in shares) | (231) | (234) |
Forfeited (in shares) | (20) | (26) |
Ending balance (in shares) | 382 | 538 |
STOCK-BASED COMPENSATION STOC_6
STOCK-BASED COMPENSATION STOCK-BASED COMPENSATION - STOCK BONUS PROGRAM - (Details) - shares | Mar. 20, 2020 | Apr. 30, 2020 | Aug. 09, 2019 | Mar. 21, 2019 |
Stock Bonus Program | ||||
Stock-Based Compensation Plans | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period | 1 year | |||
Share-based Compensation Arrangement by Share-based Payment Award, Determination of Shares Issuable Trailing Period of Average Price of Common Stock | 5 days | |||
Stock Bonus Program | 2020 Plan | ||||
Stock-Based Compensation Plans | ||||
Discount from market price (as a percent) | 15.00% | 15.00% | ||
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Authorized | 200,000 | 200,000 | ||
Shares Expected to be Issued Under SBP | 32,000 | |||
Combined Stock Bonus Program and Bonus Share Program | 2020 Plan | ||||
Stock-Based Compensation Plans | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Authorized | 305,000 | |||
Combined Stock Bonus Program and Bonus Share Program | 2021 Plan [Member] | ||||
Stock-Based Compensation Plans | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Authorized | 300,000 |
STOCK-BASED COMPENSATION STOC_7
STOCK-BASED COMPENSATION STOCK-BASED COMPENSATION - BONUS SHARE PROGRAM (Details) - USD ($) $ in Millions | Apr. 30, 2020 | Mar. 20, 2020 | Jan. 31, 2020 | Aug. 09, 2019 | Mar. 21, 2019 |
Combined Stock Bonus Program and Bonus Share Program | |||||
Stock-Based Compensation Plans | |||||
Total accrued liability | $ 14.6 | $ 17.3 | |||
2020 Plan | Combined Stock Bonus Program and Bonus Share Program | |||||
Stock-Based Compensation Plans | |||||
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Authorized | 305,000 | ||||
2020 Plan | Stock Bonus Program | |||||
Stock-Based Compensation Plans | |||||
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Authorized | 200,000 | 200,000 | |||
Shares Expected to be Issued Under SBP | 32,000 | ||||
Remaining Authorized Shares in Performance Period | 273,000 |
COMMITMENTS AND CONTINGENCIES C
COMMITMENTS AND CONTINGENCIES COMMITMENTS AND CONTINGENCIES - LEGAL PROCEEDINGS (Details) $ in Millions | 3 Months Ended |
Apr. 30, 2020USD ($) | |
Loss Contingency, Information about Litigation Matters [Abstract] | |
Loss Contingency, Damages Sought, Value | $ 150 |
SEGMENT INFORMATION SEGMENT INF
SEGMENT INFORMATION SEGMENT INFORMATION - SEGMENT OVERVIEW (Details) | 3 Months Ended |
Apr. 30, 2020 | |
Segment Reporting [Abstract] | |
Number of Reportable Segments | 2 |
SEGMENT INFORMATION SEGMENT I_2
SEGMENT INFORMATION SEGMENT INFORMATION - SEGMENT REVENUE AND SEGMENT CONTRIBUTION (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Apr. 30, 2020 | Apr. 30, 2019 | |
Segment Reporting, Revenue Reconciling Item [Line Items] | ||
Revenue | $ 287,295 | $ 315,259 |
Operating Income | 6,174 | 14,468 |
Customer Engagement | ||
Segment Reporting, Revenue Reconciling Item [Line Items] | ||
Revenue | 185,865 | 207,095 |
Cyber Intelligence | ||
Segment Reporting, Revenue Reconciling Item [Line Items] | ||
Revenue | 101,430 | 108,164 |
Segment Amount | Customer Engagement | ||
Segment Reporting, Revenue Reconciling Item [Line Items] | ||
Revenue | 189,127 | 215,867 |
Operating Income | 65,797 | 78,818 |
Segment Amount | Cyber Intelligence | ||
Segment Reporting, Revenue Reconciling Item [Line Items] | ||
Revenue | 102,522 | 108,291 |
Operating Income | 24,964 | 27,290 |
Reconciling Items | Customer Engagement | ||
Segment Reporting, Revenue Reconciling Item [Line Items] | ||
Segment Revenue Adjustments | (3,262) | (8,772) |
Reconciling Items | Cyber Intelligence | ||
Segment Reporting, Revenue Reconciling Item [Line Items] | ||
Segment Revenue Adjustments | $ (1,092) | $ (127) |
SEGMENT INFORMATION SEGMENT I_3
SEGMENT INFORMATION SEGMENT INFORMATION - RECONCILATION OF SEGMENT CONTRIBUTION TO OPERATING INCOME (LOSS) (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Apr. 30, 2020 | Apr. 30, 2019 | |
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | ||
Amortization of intangible assets | $ 12,700 | $ 14,400 |
Stock-based compensation expense | 14,184 | 17,103 |
Total reconciling items, net | 178,795 | 186,603 |
Operating Income | 6,174 | 14,468 |
Segment Amount | ||
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | ||
Operating Income | 90,761 | 106,108 |
Reconciling Items | ||
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | ||
Segment Revenue Adjustments | 4,354 | 8,899 |
Amortization of intangible assets | 12,674 | 14,420 |
Stock-based compensation expense | 14,184 | 17,103 |
Acquisition, integration, restructuring, and other unallocated expenses | 10,034 | 7,364 |
Total reconciling items, net | 84,587 | 91,640 |
Shared Support Expenses | ||
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | ||
Shared Support Expenses | $ 43,341 | $ 43,854 |
Subsequent Events (Details)
Subsequent Events (Details) - USD ($) $ / shares in Units, $ in Thousands | May 07, 2020 | Jun. 18, 2014 |
Subsequent Event [Line Items] | ||
Common Stock Issued (in shares) | 5,750,000 | |
Subsequent Event [Member] | Registration Rights Agreement [Member] | ||
Subsequent Event [Line Items] | ||
Anticipated Gross Proceeds | $ 50,000 | |
Series A Preferred Stock | Subsequent Event [Member] | ||
Subsequent Event [Line Items] | ||
Common Stock Issued (in shares) | 200,000 | |
Common Stock, No Par Value | $ 0.001 | |
Issuance of Convertible Preferred Stock | $ 200,000 | |
Series A Preferred Stock | Subsequent Event [Member] | Registration Rights Agreement [Member] | ||
Subsequent Event [Line Items] | ||
Common Stock, No Par Value | $ 0.001 |