By Mackenzie Tatananni

Verint Systems stock skyrocketed Thursday after the software company's third-quarter earnings and revenue surpassed expectations.

Verint Systems reported third-quarter adjusted earnings of 54 cents a share on revenue of $224.2 million. Analysts expected adjusted earnings of 43 cents a share on revenue of $210.1 million.

Shares of the tech company were rising 31% to $34, on pace for the largest same-day percent increase since Feb. 2, 2021, according to Dow Jones Market Data. The S&P 500 was flat.

The company reported that it would maintain its full-year guidance, aiming for adjusted earnings of $2.90 a share on revenue of roughly $933 million.

Verint Systems brands itself as a leading provider of customer experience software and counts insurance, travel, and telecom companies among its clients.

The New York-based tech company has increasingly embraced artificial intelligence and unveiled its latest AI-assisted "scoring bot" on Wednesday. Last month, Verint signed an $11 million contract with an unnamed bank for an "AI-powered agent copilot bot."

Wedbush analysts acknowledged the company's top and bottom-line beats as it generated "further momentum in AI innovation." Customers reported "tangible AI business outcomes" with Verint's cloud-based Open Platform, the analysts wrote.

The firm maintains an Outperform rating and $38 price target.

Verint CEO Dan Bodner highlighted "strong demand for AI business outcomes" in the third quarter as well as enthusiasm for the company's hybrid cloud model.

However, Evercore ISI analysts led by Kirk Materne noted that Verint's decision to allow a broader range of users to deploy AI bots could impact gross margins and delay conversions. The company formerly limited the feature to higher-paying bundled customers.

"Although we still consider VRNT an intriguing value idea for investors seeking a derivative contact center play, regrettably, it is likely to remain within a narrow range unless we observe a reacceleration," the analysts wrote.

Evercore ISI raised its price target on the stock to $34 and rates it In Line.

Verint Systems was on pace for its highest closing price since Aug. 1, when it reached $34.22. As shares of the company climbed Thursday, shares of competitors fell, with Salesforce tumbling 2% to $360.43.

Write to Mackenzie Tatananni at mackenzie.tatananni@barrons.com

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December 05, 2024 12:06 ET (17:06 GMT)

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