Executive Summary

Q2 FY2026 revenue and EPS topped Street: revenue $208.01M vs $200.5M consensus (+3.7% beat)* and non-GAAP EPS $0.33 vs $0.26 consensus (+26% beat)*; GAAP diluted EPS was $(0.09) .
AI ARR rose 21.2% YoY to $372M; Subscription ARR reached $728M (+6.4% YoY), underscoring continued AI-led mix shift despite slight total revenue decline YoY (-1.0%) .
Margins mixed: GAAP gross margin 67.6% (down YoY), but sequential operating performance improved (Adjusted EBITDA $35.6M vs $31.9M in Q1) .
Guidance suspended and no earnings call due to pending $2.0B all-cash acquisition by Thoma Bravo ($20.50/sh), expected to close before fiscal year-end—key stock narrative driver near-term .

What Went Well and What Went Wrong

What Went Well
- AI momentum: “AI ARR increased 21% year-over-year reflecting the strong AI business outcomes we deliver to our customers” — Dan Bodner, CEO .
- Consensus beat: Q2 revenue $208.01M and non-GAAP EPS $0.33 exceeded Street estimates (see Estimates Context for S&P Global consensus)* .
- Sequential operating improvement: Adjusted EBITDA improved to $35.6M in Q2 from $31.9M in Q1, signaling better execution vs the start of the year .
What Went Wrong
- Top-line pressure YoY: Revenue fell 1.0% YoY to $208.01M; constant-currency growth was -1.5% YoY, indicating broader demand/mix headwinds vs prior-year period .
- Profitability compression YoY: Non-GAAP operating margin fell to 14.0% (21.1% prior-year Q2) amid higher R&D and SG&A and softer nonrecurring revenue .
- GAAP loss for common: GAAP diluted EPS $(0.09) driven by lower operating income and preferred dividends; free cash flow positive but down YoY for the quarter ($13.48M vs $(3.58)M prior-year) .

Financial Results

Summary (oldest → newest)

Metric	Q4 FY2025	Q1 FY2026	Q2 FY2026
Revenue ($M)	$253.55	$208.10	$208.01
GAAP Diluted EPS	$0.45	$(0.04)	$(0.09)
Non-GAAP Diluted EPS	$0.99	$0.29	$0.33
GAAP Gross Margin	73.5%	66.7%	67.6%
Non-GAAP Operating Margin	32.8%	12.2%	14.0%
Adjusted EBITDA ($M)	$89.20	$31.90	$35.61
Adjusted EBITDA Margin	35.2%	15.3%	17.1%
Free Cash Flow ($M)	N/A (annual only in Q4 PR)	$20.30	$13.48

Q2 FY2026 YoY and Sequential

YoY: Revenue -1.0%; constant-currency -1.5% .
Seq: Revenue flat vs Q1; Adjusted EBITDA up to $35.61M from $31.90M .

Q2 Actual vs Consensus (S&P Global)

Metric	Q2 FY2026 Actual	Q2 FY2026 Consensus
Revenue ($M)	$208.01	$200.49*
Non-GAAP EPS	$0.33	$0.26*
Primary EPS - # of Estimates	—	7*
Revenue - # of Estimates	—	6*

Values retrieved from S&P Global.

Revenue Composition (oldest → newest)

Revenue Detail ($M)	Q4 FY2025	Q1 FY2026	Q2 FY2026
Bundled SaaS (Recurring)	$80.74	$81.26	$84.90
Unbundled SaaS (Recurring)	$81.12	$66.23	$53.93
Optional Managed Services (Recurring)	$5.49	$5.01	$6.11
Support (Recurring)	$24.15	$21.13	$20.59
Total Recurring	$191.50	$173.62	$165.52
Nonrecurring Perpetual	$36.32	$17.02	$22.87
Nonrecurring Prof. Svcs & Other	$25.73	$17.45	$19.61
Total Revenue	$253.55	$208.10	$208.01

KPIs (oldest → newest)

KPI	Q4 FY2025	Q1 FY2026	Q2 FY2026
Subscription ARR ($M)	$711.75	$709.99	$728.49
Subscription ARR YoY	5.2%	6.3%	6.4%
AI ARR ($M)	—	$353.91	$372.02
AI ARR YoY	—	24.1%	21.2%
Non‑AI ARR ($M)	—	$356.09	$356.48
Non‑AI ARR YoY	—	(7.0%)	(5.6%)

Balance Sheet and Leverage

Metric	Q4 FY2025	Q1 FY2026	Q2 FY2026
Cash & Equivalents ($M)	$215.71	$180.87	$174.97
Gross Debt ($M)	$415.00	$415.00	$415.00
Net Debt ($M)	$197.78	$233.50	$239.42

Guidance Changes

Metric	Period	Previous Guidance (Q1 FY2026 release)	Current (Q2 FY2026)	Change
Subscription ARR (as of Q4 FY2026)	FY2026	$768M ±1% (8% YoY)	Guidance suspended due to pending acquisition	Withdrawn
Cash Generation	FY2026	$960M ±1%	Suspended	Withdrawn
Cash Contribution	FY2026	$245M at mid-point	Suspended	Withdrawn
Revenue	FY2026	$960M ±3%	Suspended	Withdrawn
Non‑GAAP Diluted EPS	FY2026	$2.93 at midpoint	Suspended	Withdrawn

Note: Company did not host an earnings call and suspended guidance pending Thoma Bravo acquisition .

Earnings Call Themes & Trends

Topic	Previous Mentions (Q4 FY2025 and Q1 FY2026)	Current Period (Q2 FY2026)	Trend
AI/Technology Initiatives	Record SaaS ACV and strong AI momentum; Bundled SaaS ARR +16.5% YoY; mgmt emphasized AI bots driving ROI . Q1: AI ARR +24.1% YoY; “AI now represents close to 50% of total ARR” (CFO) .	AI ARR +21.2% YoY; mgmt reiterates early-stage AI adoption and category leadership .	Sustained AI-led growth; high mix of AI ARR.
Revenue Mix/ASC 606	Q4 noted unbundled SaaS below plan impacting revenue/non-GAAP EPS . Q1 revenue ahead of guidance due to timing of two unbundled SaaS deals .	Unbundled SaaS continued to decline YoY (to $53.9M) .	Unbundled SaaS remains a headwind; volatility persists.
Guidance/Outlook	FY2026 outlook raised for ARR in Q4; reiterated full-year framework in Q1 .	Guidance suspended; no call due to pending acquisition .	Transition to deal-close focus; reduced forward visibility.
Capital Allocation	Q1: ~2.5M shares repurchased; buybacks primary FCF use .	No new detail; FCF positive $13.5M .	Continued FCF generation; buybacks earlier in year.
M&A/Strategic	No transaction announced in Q4/Q1.	Announced Thoma Bravo all-cash acquisition ($2B EV), $20.50/sh; expected close before FY-end .	Privatization catalyst; execution shifts to closing.

Management Commentary

“I am pleased to report strong Q2 results and continued AI momentum… AI ARR increased 21% year-over-year… We recently announced that Verint agreed to be acquired by Thoma Bravo… Their $2B investment… represents a strong validation of our CX Automation strategy” — Dan Bodner, CEO .
“In Q1, AI ARR… increased 24% year-over-year… AI now represents close to 50% of our total ARR… We expect AI ARR to continue to grow more than 20%” — Grant Highlander, CFO (Q1 release) .
Q2 release further notes no call and suspension of guidance due to pending transaction .

Q&A Highlights

The company did not host an earnings conference call in Q2 FY2026 due to the pending Thoma Bravo acquisition; no Q&A occurred .

Estimates Context

Q2 FY2026 results beat S&P Global consensus on both revenue and EPS: revenue $208.01M vs $200.49M*; non-GAAP EPS $0.33 vs $0.26*; 7 EPS and 6 revenue estimates underpin consensus*.
Values retrieved from S&P Global.

Key Takeaways for Investors

Beat-and-raise-style quarter on prints (revenue/EPS) despite YoY top-line pressure; sequential operating improvement suggests execution benefits carrying into 2H, though guidance is suspended .
AI remains the growth engine: AI ARR +21% YoY, now roughly half of total ARR, supporting a favorable long-term mix shift as unbundled SaaS normalizes .
Profitability still below prior-year levels (non-GAAP op margin 14% vs 21% YoY), reflecting mix (lower unbundled SaaS) and higher opex; watch for stabilization as AI mix expands .
Cash generation intact (Q2 FCF $13.5M), but net debt rose sequentially; monitor deleveraging trajectory alongside deal close .
Primary near-term catalyst is the $20.50/share all-cash acquisition by Thoma Bravo, expected to close before FY-end; upside/downside skew tied to deal timing/approvals .
In absence of guidance and a call, trading likely centers on merger spread dynamics and any regulatory/shareholder milestones .
Medium term, if the deal closes, public-market thesis shifts to private ownership; if not, watch for reinstated guidance and pacing vs the FY2026 framework set in Q1 .

Supporting Detail: Selected Drivers and Variances

YoY revenue decline (-1.0%) driven by lower unbundled SaaS and professional services, partially offset by higher bundled SaaS; constant-currency -1.5% underscores underlying softness vs prior-year comp .
Operating expense pressure YoY (R&D $39.10M vs $35.36M; SG&A $94.54M vs $93.18M) pressed margins despite stable total revenue .
Non-GAAP adjustments (amortization, SBC, restructuring, acquisition/divestiture) bridge GAAP loss to non-GAAP profitability (non-GAAP operating income $29.10M; non-GAAP EPS $0.33) .

Press Releases Relevant to Q2 Context

Verint highlighted AI adoption milestones (Q1 AI ARR +24% and ~50% of total ARR) at Nasdaq opening bell event (Aug 4, 2025), supporting the AI-led narrative entering Q2 .
Thoma Bravo acquisition details and guidance suspension disclosed in the Q2 8‑K/press release .

Citations:

Q2 FY2026 results, margins, ARR, cash flow, leverage: .
Q1 FY2026 results, KPIs, guidance framework: .
Q4 FY2025 results, KPIs, mix commentary: .

S&P Global disclaimer: Consensus values marked with an asterisk were retrieved from S&P Global.

VERINT SYSTEMS INC (VRNT)·Q2 2026 Earnings Summary