Good day, thank you for standing by, and welcome to Verint Systems Inc. Q1 Fiscal 2024 Earnings Conference Call. At this time, all participants are on a listen only mode. After the speaker's presentation, there'll be a question and answer session. To ask a question during the session, you'll need to press star one one on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star one one again. Please be advised that today's conference is being recorded. I would now like to introduce your host for today's call, Matthew Frankel, Investor Relations and Corporate Development Director. Please go ahead. Thank you, operator. Good afternoon, and thank you for joining our conference call today. I'm here with Dan Bodner, Verint CEO, Grant Highlander, Verint CFO, and Alan Roden, Verint's Chief Corporate Development Officer. Before getting started, I'd like to mention that accompanying our call today is a slide presentation. If you'd like to view these slides in real time during the call, please visit the IR section of our website at verint.com, click on the Investor Relations tab and then click on the Webcast link and select today's conference call. I'd also like to draw your attention to the fact that certain matters discussed on this call may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 and other provisions of the Federal Securities Laws. These forward-looking statements are based on management's current expectations and are not guarantees of future performance. Actual results could differ materially from those expressed in or implied by these forward-looking statements. The forward-looking statements are made as of date of this call and, except as required by law, Verint assumes no obligation to update or revise them. Investors are cautioned not to place undue reliance on these forward-looking statements. For a more detailed discussion of how these and other risks and uncertainties could cause Verint's actual results to differ materially from those indicated in these forward-looking statements, please see our Form 10-K for the fiscal year ended January 31st, 2023, our Form 10-Q for the quarter ended April 30th, 2023, when filed, and other filings we make with the SEC. The financial measures discussed today include non-GAAP measures, as we believe investors focus on those measures in comparing results between periods and among our peer companies. Please see today's slide presentation, earnings release, in the investor relations section of our website at verint.com for a reconciliation of non-GAAP financial measures to GAAP measures. Non-GAAP financial information should not be considered in isolation from, as a substitute for, or superior to GAAP financial information, but is included because management believes it provides meaningful supplemental information regarding our operating results when assessing our business and is useful to investors for informational and comparative purposes. The non-GAAP financial measures the company uses have limitations and may differ from those used by other companies. I'd like to turn the call over to Dan. Dan? Thank you, Matt. I'm pleased with our Q1 non-GAAP revenue and diluted EPS coming ahead of our guidance. Our results were driven by strong SaaS momentum and our differentiated open platform. Today, I will start with a review of our Q1 results, including our strong gross margin expansion, driven by our SaaS revenue growth. Next, I will review our open platform and how we leverage the latest AI innovations to deliver CX automation and significant customer ROI. Finally, I will review our guidance for this year, and we'll discuss the expected benefits to our financial model upon completion of our SaaS transition next year. These benefits include accelerating revenue growth, higher gross margins, and incremental cash generation. Let me start with reviewing our Q1 results. Non-GAAP Q1 revenue came in at $217 million ahead of our guidance, and gross margin came in close to 70%, a strong 200 bps increase year-over-year. Our gross margin expansion is being driven by our ongoing shift to SaaS. Non-GAAP diluted EPS came in at $0.53, also ahead of our guidance. SaaS revenue, which is our key growth driver, increased approximately 24% year-over-year on a constant currency basis. We are on track to complete our SaaS transition next year, which we define as the milestone when 90% of our software revenue comes from recurring sources. In Q1, we made very good progress towards this goal, with this metric reaching 87%, up significantly from Q1 of last year. In summary, we are pleased with our revenue and profitability in Q1 and reiterate our guidance for the year. Next, I would like to discuss significant wins and market dynamics. During Q1, we received orders from some of the world's leading brands, such as the global bank, Macquarie, auto company, Toyota, and telecom provider, Deutsche Telekom. In terms of new logos, we continue to win many new customers, and in Q1, we again added more than 100 new logos, including the Bank of England and retailer, Casey's General Stores. As discussed on the last earning call, in the current environment, we are seeing elongated sales cycles, especially with very large deals. While customers may take longer to make decisions, their need to elevate CX and increase automation is very high. Our Open Platform delivers significant customer value, and we are winning deals in the current environment based on our ability to clearly demonstrate customer ROI. Let's take a closer look at 3 recent large 7 and 8-digit SaaS wins. These wins were all driven by our Open Platform and our CX Automation innovation, resulting in significant ROI for our customers. The first order for $21 million TCV was from a leading U.S.-based financial services company. This customer expanded its relationship with Verint with an 8-digit order by adding new applications from our Open Platform. The second order for $6 million TCV was from a leading telecom company in Europe. This customer merged with another large company and decided to adopt Verint solution across the combined entity. The third order for $3 million TCV was from a large international bank. This customer expanded its usage of the Verint Open Platform to address additional CX Automation opportunities. In this environment, the timing of closing deals can vary by customer. Looking at our pipeline across all types of deals, we expect to drive double-digit growth for new SaaS ACV for the year. Let me now turn to the capabilities of the Verint Open Platform, designed to increase CX Automation and deliver significant customer ROI. Customers have been reporting that CX Automation has become a strategic objective. We estimate that the industry already employs 50 million workers globally, at an annual cost of $2 trillion, and improving CX levels with incremental hiring is not sustainable anymore. Brands are ready to adopt AI that can help them elevate CX and increase efficiencies to reduce costs. Clearly, the industry needs AI. Verint has developed a platform that translates AI technology into tangible business outcomes. We do this by placing AI at the fingertips of the workforce of human and bots. Here are some examples that explain how Verint injects AI to all parts of the contact center operations. Verint automates interaction responses to improve self-service and reduce the number of calls coming into the contact center. Verint automates workforce planning by increasing focusing accuracy. Verint automates the compliance process across all channels to ensure adherence. Verint automates the knowledge search to increase agent efficiency and reduce customer hold time. Verint automates quality assessments and coaching to increase the effectiveness of the workforce. There are many more automation capabilities available today in the Verint Open Platform, with the increased pace of AI innovation, we are launching more CX Automation at an even faster pace, which I will explain next. There are 3 key attributes that make the Verint Open Platform highly differentiated. First, at the core of the platform is our open Engagement Data Hub. For more than 2 decades, we've been helping customers capture comprehensive engagement data across all channels and types of interactions between consumers and brands. This vast and unique data set is critical to continuously train AI models and make them accurate and effective. Open Data Hub is a key differentiation of the Verint Platform. Second, we also architected at the core of the platform, the Verint DaVinci AI. DaVinci is completely open and takes advantage of the latest AI models available commercially, such as GPT and others. This unique design enables Verint to remain flexible and future-proof by quickly embracing the latest generic AI innovations from Verint or any other vendor. Third, our platform includes many best-of-breed applications that DaVinci and the Data Hub, placing AI at the fingertips of the workforce to deliver tangible business outcomes. Regarding AI monetization, customers today can purchase from the open platform based on a CX Automation consumption model. Over time, as AI adoption increases, we expect our customers will naturally increase their CX Automation consumption. This is expected to benefit both our customers as well as our financial results. Turning to our guidance for the current year, fiscal 2024. We expect another year of strong SaaS revenue growth and margin expansion with adjusted EBITDA growing faster than revenue, and we are maintaining our annual guidance. As we manage the business this year to 7% adjusted EBITDA growth, we continue to progress towards the completion of our SaaS transition, and I would like to discuss the expected benefits to our financial model next year. We expect the completion of the SaaS transition next year to positively impact our top line growth in two ways. First, when you look at the last year's results and this year's guidance, we have headwinds from the decline in non-recurring revenue of approximately 3% each year. Next year, with the planned completion of our SaaS transition, we expect these headwinds to be largely eliminated, and this is expected to translate to incremental revenue growth next year. Second, over the last several years, we have focused on the Verint SaaS transition. At the same time, our customers focused on their own SaaS migrations. We're now beginning to shift our focus to driving customer expansions initiatives, helping our customers achieve their strategic objectives related to increased CX Automation. This should have a positive impact on our revenue growth over time. Completing the SaaS transition should not only improve our overall revenue growth rate, it is also expected to have a positive impact on margins and cash flow generation. Similar to most companies going through a SaaS transition, we expect our cash generation to improve. This year, we expect cash from operations, excluding non-recurring items, to grow at a similar rate to revenue. Next year, we expect it to grow faster than revenue. We look forward to completing the transition next year and to benefiting from these tailwinds to our financial model. As you know, our transition to SaaS has taken several years, given the nature of our large enterprise customer base. As a reminder, our customer base, including over 85% of the Fortune 100, including all 10 of the top 10 banks, 9 of the top 9 insurance companies, and 8 of the top 10 healthcare companies. In summary, CX Automation is a strategic objective, as brands are spending $2 trillion annually on labor costs. Hiring more people to elevate customer experience is not sustainable. Helping brands close this engagement capacity gap by addressing their very large labor costs with CX Automation is a significant long-term opportunity for Verint. We've architected the Open Data Hub and DaVinci AI at the core of the platform. Now with the faster pace of AI innovation, Verint is increasing our differentiation as the leader in CX Automation. Our SaaS transition is nearing the end of the journey. We look forward to the financial and operational benefits we expect next year. Finally, we have strong margins and a strong balance sheet, which provide us flexibility as we continue to execute our previously announced stock buyback program. Now, let me turn the call over to Grant to discuss our financials in more detail. Grant? Thanks, Dan. Good afternoon, everyone. Our discussion today will include non-GAAP financial measures. A reconciliation between our GAAP and non-GAAP financial measures is available, as Matt mentioned, in our earnings release and in the IR section of our website. Differences between our GAAP and non-GAAP financial measures include adjustments related to acquisitions, including fair value revenue adjustments, amortization of acquisition-related intangibles, certain other acquisition-related expenses, stock-based compensation expenses, separation-related expenses, accelerated lease costs, IT facilities and infrastructure realignment, as well as certain other items that can vary significantly in amount and frequency from period to period. For certain metrics, it also includes adjustments related to foreign exchange rates. Starting with our Q1 results, non-GAAP revenue came in at $217 million, ahead of our guidance. Non-GAAP diluted EPS came in at $0.53, also ahead of our guidance. SaaS revenue increased approximately 24% year-over-year on a constant currency basis. There are two main drivers of our SaaS revenue growth, new customer deployments and conversions. In Q1, the growth from both drivers was relatively evenly split. For the year, we project around 2/3 of our growth to come from new customer deployments and 1/3 from conversions, similar to prior years. The percentage of our software revenue coming from recurring sources increased to 87%, up approximately 400 basis points year-over-year. Turning to gross margins, our recurring revenue generates much higher gross margins than our non-recurring revenue, and our recurring revenue growth has been driving total gross margin expansion. In Q1, I am pleased to report that gross margins increased to nearly 70%, a more than 200 basis point increase year-over-year. Our recurring revenue gross margin has already improved to the mid to high 70% range due to the scale of our SaaS operations. Going forward, as our revenue mix continues to shift towards SaaS, we expect total gross margin to continue to move higher. Turning to guidance, we are pleased with our revenue and profitability metrics in Q1, and we are maintaining our guidance for the year. Let me discuss how we see the year progressing. On a non-GAAP basis, for revenue, we expect $935 million, ±2%, with sequential increases in revenue every quarter. We expect a slight increase in Q2, a larger increase in Q3, and to finish the year with our usual strong Q4. Looking at the year, we expect revenue growth to be higher in the second half of the year, given the easier year-over-year compares. For new SaaS ACV, we expect double-digit growth this year. So far in the year, new SaaS ACV was $16 million in Q1 and $12 million in May. This brings our last twelve-month new SaaS ACV bookings through May to $103 million, reflecting 7% growth over the same period in the prior year. With respect to the progression of the current fiscal year, through May, we have $28 million closed out of the more than $50 million projected in the first half and an additional $60 million in the second half of the year. I would like to note that with ratable revenue recognition, the exact timing of bookings does not significantly impact revenue in the current financial period. We expect our gross margins to increase sequentially and for the full year to increase around 50 basis points year-over-year. We expect OpEx to increase modestly in Q2 from Q1 levels. We expect to maintain that level of spend for the rest of the year as we manage expenses in the current economic environment. For the full year, we expect our operating margins to expand a bit more than 50 basis points year-over-year. We expect adjusted EBITDA to increase 7% for the year to a bit more than $250 million through a combination of strong SaaS revenue growth, gross margin expansion, and expense controls. For diluted EPS, we expect $2.65 at the midpoint of our revenue guidance, with sequential increases in EPS consistent with our sequential increase in revenue. Regarding the below-the-line assumptions, we expect interest and other expense on average of $750,000 per quarter. Net income from non-controlling interest should be about $200,000 per quarter. Our cash tax rate should be about 10%, and we expect around 75 million fully diluted shares outstanding. Looking beyond this year, as Dan discussed earlier, we believe the completion of our SaaS transition will have positive benefits to our financial model next year. Let me provide you with some additional details on these benefits. Starting with revenue, as we have shifted to SaaS, our non-recurring revenue has steadily been declining. Looking at last year's results and this year's guidance, non-recurring revenue represents a headwind to total revenue growth in an amount of about 3 points each year, and we believe this headwind will be largely behind us next year. As Dan mentioned earlier, we believe we will see a benefit to our top line from shifting our focus from SaaS migration to platform and AI adoption. With respect to cash flow, similar to most companies going through a SaaS transition, we expect our cash generation to start to grow faster. To put this in perspective, last year, we generated $190 million of cash from operations, excluding non-recurring items. This year, we expect this to grow in line with revenue. Next year, we expect to grow faster than revenue at a double-digit rate. I'd like to highlight that our free cash flow acceleration should be even faster, as the one-time investments over the last few years related to the spin and our office space will be behind us next year. Turning to our balance sheet, we continue to be in a very good financial position. Our net debt remains well under 1 times last twelve-month EBITDA and is further supported by our strong cash flow. Regarding our previously announced $200 million stock buyback program, to date, we have repurchased close to $90 million worth of shares. In summary, our non-GAAP revenue and diluted EPS came in ahead of guidance, driven by our differentiated Open Platform. We expect our Open Platform to drive strong SaaS growth and margin expansion for the full year, and we are maintaining our guidance for the current year. Looking ahead to next year, we expect our financial model to further benefit from the planned completion of our SaaS transition. These benefits include accelerating revenue growth, higher gross margins, and incremental cash generation. Finally, our ability to deliver innovative CX Automation and drive significant customer ROI, positions us well for sustained long-term growth. Before taking questions, I'd like to highlight several investor relations initiatives. First, we've updated the financial dashboard on our IR website to help investors focus on the critical metrics associated with the end of our SaaS transition. Second, we'll be updating sell side analysts on our AI-powered platform at our Engage conference next week, where we'll showcase our latest innovations. Third, in the fall, we'll be hosting an investor day for both sell side analysts and investors to demonstrate our AI innovation and discuss the benefits of completing our SaaS transition in more detail. With that, operator, please open the line for questions. Thank you. One moment, please. As a reminder, to ask a question, please press star one one on your telephone and wait for your name to be announced. To withdraw your question, please press star one one again. Please stand by while we compile the Q&A roster. One moment for our first question. Our first question comes from Ryan MacDonald with Needham & Company. Your line is now open. Thanks for taking my questions, and appreciate all the color, especially in the sort of the post SaaS transition world here for Verint. That's where I really wanted to start, Dan. Can you kind of double click on that a bit more, you know, talk a bit about the benefits of sort of what the completion of the SaaS transition will bring in? In particular, you talked about sort of the second revenue driver of acceleration around sort of the AI platform adoption will help further that acceleration of growth. Can you just maybe talk a bit more about where that comes from or how investors should think about that coming in? Thanks. Sure. Yeah, sure. Thank you. You know, we're almost approaching the midpoint of the year, so it's a good time to start to talk about next year, and I'm really excited to finish the cloud transition, as we discussed before. There are immediate benefits that we will see next year, and there are more benefits over time. I'll talk about AI separately. I think it's a very important topic, but let me start kind of with a review of, why this SaaS transition completion, is good. you know, based on the detailed analysis that we did for our customer base, we believe that next year, the headwind from non-recurring decline is coming to an end, and this will result in 2 points of incremental growth, even if the rest of the business performs exactly the same way it is this year. That's one thing. The second thing is we also see an increase that, you know, customer base shifting to running in the Verint Cloud. These customers are already SaaS, but for now, they host Verint solutions in other clouds. Could be in partner clouds or their own clouds. There are clear benefits for these customers to shift to the Verint Cloud for faster innovation and especially AI and quick time to value. We expect a minimum of 2x uplift if these customers just move like to like, of course, many of them are expanding, and we expect up to 10x if they expand in the platform. They don't have to expand at the time of the conversion. They can definitely expand on the conversion and then over time. There's a great uplift opportunity for us from this customer base. Finally, as we complete the SaaS transition, we're gonna focus on helping them expand. We, you know, you asked, what are we gonna do? You know, it's a little early, but we're starting actually this year, we'll be fully ready next year. As we kind of shift the focus to operational, operationalizing, the completion, it's more marketing campaigns on the base. It's the pricing models. I'll discuss maybe later, the consumption models. It's obviously the sales force that will be focusing more on helping customers doing this conversion and expansion. There's some uplift that comes from, you know, from this conversion and of course, expanding as these customers are looking to increase consumption of CX automation, and that drives a very strong ROI. In addition to what we expect to revenue accelerating, we definitely expect gross margin to continue to expand. We discussed many times that our recurring revenue have higher gross margin in the mid-to-high 70s. The shift to more recurring continued to benefit gross margin, and we saw some very nice expansion in Q1. Grant discussed also the improved improvement to our cash flow generation, which is acceleration in cash from operation, but also acceleration in free cash flow, because some of the one-time investments we did after the spin are also gonna come to an end. Free cash flow is gonna accelerate even faster next year. From a big picture perspective, when you think about this, the SaaS transition, the economic value of a SaaS deal is far greater than perpetual over time. Our customer benefit from faster innovation in the Verint Cloud, and of course, we benefit from higher economic value. Because we have very large customers, and they move to SaaS slowly, you know, our transition took several years. For the same reason, we expect that we'll continue to renew and expand with these customers as they consume more AI from the platform and increase their spend with Verint. Again, the expansion opportunity could result in a 10x uplift. We see very tangible benefits that we expect next year and even more so over time. Appreciate the color there. Maybe as I think about, we've been getting a lot of questions from investors, obviously, with generative AI and the potential disruption it can have on the contact center broadly. Can you talk about why these investments in AR, AI are a good thing for Verint over time? Sure. You know, AI plays a role in many industries, but clearly it plays a very big role in the customer engagement. We discussed many times, you know, we estimate that brands spend $2 trillion on labor, and it's not sustainable. Our customers are really excited about AI. I can tell you that in Q1, we estimate that more than half of the deals we did in Q1 had some element of AI already included. As much as customers are excited, they also wanna make sure that it's creating ROI, and it's not just technology. What Verint does is really, we're exclusively focused on CX Automation. That's what we do. That means that we, o ur mission is to transform AI technology into business outcomes. That's what customers want because they don't wanna buy AI, they wanna buy the business outcomes that create the ROI. Why are we gonna benefit from AI? First, you know, there's a simple reason. We have an open platform, and it's differentiated and best in the market in its ability to place AI innovation at the fingertips of the workforce. We also, I can talk about how we monetize AI and through a consumption model, and that's good for our customers and also good for Verint. Let me start with the first point, you know, why we have the best platform in the market today. So our platform is open, and it's open in all dimensions. We have the DaVinci, and DaVinci takes advantage of commercial AI models in addition to our own proprietary models. I can tell you with specifically with GPT, we already have GPT-3.5 in production with customers. We have GPT-4 in our research lab, and we will be introducing new use cases because there's some additional capabilities in 4 that specifically around leveraging visual inputs and significantly larger prompts that will create new use cases that Verint will commercialize. I believe that, you know, when it comes to GPT, open source generative AI, this year is equally, if not more disruptive than GPT-4. We have basically, we have every and any open source AI from any vendors as part of DaVinci, it's completely open. DaVinci is architected at the core of the platform, I don't know of any other vendor in the market that actually have this architecture, it's undifferentiated. Why it's important is because, at the core of the platform, we also have the Data Hub, and the platform can train all the AI models, whether it's proprietary from Verint or third party, they train on real engagement data 24/7. Data is critical. It's critical for the accuracy and effectiveness of AI. We know that when AI doesn't work, it's very frustrating to people, that is useless. Training is a key component and for over 2 decades, we, you know, help our customers capture data, and our data is completely open. We bring together data from many data silos across the customer ecosystem. Again, no other vendor has a Data Hub architecture at the core with such vast and diversified data sets that is available for AI training. Now you can see, you know, we DaVinci, it's open, we have data that is vast and trained all the time. The last component, you know, you need a platform to transform technology into business outcome. The platform offers many best-of-breed applications, and it's completely open to allow customers to start anywhere, so they can use any piece of workflow that they want and inject AI into that workflow. The result of this is, you know, you bring the AI to the fingertips of the workforce, so they can use it and it will augment their, their work and increase, obviously increase their productivity. Let me stop here and see if any follow-up questions. Yeah, no, that's helpful. Maybe just one more from me. You know, you mentioned earlier, about the potential for a 2x uplift when a customer is hosted on the Verint Cloud, versus another cloud. How are you thinking about, in terms of strategy, incentivizing Salesforce, incentivizing customers to try to drive that shift going into next year? Thanks. The way we designed the SaaS transition, because we have large customers and they had preferences for cloud, we wanted to make sure that they're moving to SaaS, and regardless of which cloud they run. That's what the first part of our SaaS transition. Over time, our customers realized that running in a Verint Cloud allows us to introduce innovations faster than when they run in different clouds, just because we, you know, we put new software in our Cloud every two weeks. The AI increased the pace of innovation, and obviously, cloud is the best vehicle to drive innovation faster for quick time to value. In DaVinci is only available in the Verint Cloud today. That, that's a big incentive for our customers to leverage the latest DaVinci capabilities. Again, now that, you know, we're getting to 90% of software revenue recurring and the SaaS transition will be behind us next year, we're increasing the focus also internally in terms of programs that we offer customers and pricing consumption models, and of course, Salesforce incentives. This will be introduced later in the year, but I think it will start to really kick off next year and beyond that. Excellent. Appreciate the color. I'll hop back in the queue. Thank you. One moment for our next question. Our next question comes from Shaul Eyal from TD Cowen. Your line is now open. Thank you so much. Good afternoon, guys. Apologies for some background noise here. You know, Dan, it would appear that, you know, you, Grant, Alan, you know, the team, definitely seeing kind of the, whatever is left in the staff transition. I'm getting emails, asking me, as we start thinking about your next year's revenue guidance, again, I don't want to front run the analyst day that you alluded to later on this year, but is there any chance that, you know, we're gonna be heading back to a double-digit growth territory? Is that a possibility at all? It's too soon to discuss next year guidance, also because the economic environment this year, that's why we discussed it in terms of incremental growth that we see next year to this year. Of course, if the overall economy improves, the incremental growth will be on top of a faster foundational growth, let's call it. Whether it's next year or the year after, we stated the goal that, you know, based on an open DaVinci and data at the core and driving more ROI for customers, we definitely are targeting double-digit revenue growth over time. We're already at 27% EBITDA margin this year, so we talk about continuing margin expansion. We are targeting to increase revenue growth and at the same time expand margins. I think you know, I mentioned before a 10x opportunity for our customers if they adopt more AI across the platform. I think if you want to think about the growth potential here or the TAM, you know, maybe the best thing is to discuss an ROI example. Let's take a customer that employs 2,500 employees, customer service employees. This customer will spend $100 million a year on labor. That's 2,500 times $40K a year. It's a big spend. You know, Verint customers have thousands of agents, and we have customers that have tens of thousands of agents. We are very strong in the mid to high end of the market, so our customers have lots of labor spend. Now let's assume that this customer purchased three Verint specialized bots, and I'll explain what a specialized bot is. They only purchased three for a price of $2 million ACV. They're committing to spend $2 million a year. These three specialized bots can help the workforce to increase productivity. Let's say one specialist bot is an expert in automating interaction wrap up. They're not replacing humans, they're not better than humans, but they're really good at doing one thing, the interaction wrap up, and therefore, they shave 30 seconds from each interaction. The second specialized bot from Verint is an expert in surfacing contextual knowledge. That shaves another 30 seconds from the interaction. The third specialized bot is only good at real-time agent coaching, based on assessing where coaching is needed and real-time assisting the agent, and that shaves another 30 seconds. Now that's, you know, 90 seconds less, and if the average interaction duration is 5 minutes, this customer workforce productivity just increased by 30% using 3 specialized bots. This could be a $20 million ROI for this customer, $20 million savings. Our customers are motivated to consume more, and when we think about, you know, what's the potential? What's the TAM? What is Verint after? When we came up with this, you know, CX Automation, and we did the spin, and we said, "That's where we're gonna focus," that's really the, you know, the mission that we have, to help customers create this productivity by creating specialized bots, and we have dozens of specialist bots, each focused on one element of the customer engagement workflow. They're, they're not your superhumans, but they make the agent into a superhuman because they're there to help them do something. When you free the agent time, our customers now can decide either they wanna cut cost or they want to improve the customer experience, or what we see many customers are now thinking, to use that extra time to make the customer service people into salespeople and leverage the fact that they had a very good interaction with the customer to sell them something. There's a lot of different ways that this automation can benefit, benefits customers. Got it. Got it. That's- Got it. That's how I think about the long-term opportunity. Understood. Thank you for that elaborated reply. Just maybe quick question also, I know that, you know, you've mentioned really maybe a handful of elongated, maybe some deals that are, were pushed a little bit by elongated sales cycle, has any deal canceled, or was it just, you know, a timing issue? Of the transactions that might have been postponed, how many of those have already come back? We, you know, we mentioned in Q4 some slipped deals. I can say that the majority came in Q1, and we expect over the year, some were pushed more than just a few months. In Q1, we had a couple deals that actually closed shortly after Q1. The $21 million deal that I mentioned before, that's an interesting story because the deal was fully negotiated and ready to sign way before quarter end, it's a $21 million deal, you know, many signatories, the signature process just took long and ended shortly after quarter end. You know, it's a ratable revenue recognition, it really doesn't affect anything. Other than the, you know, which period to report it doesn't really impact the revenue at all. We see customers are, you know, taking longer with the final approvals, especially when it gets to the CFO. Eventually they recognize that they need technology and they cannot spend money on labor, and we can help them to create good ROI, and that's get the deal over the goal line. Understood. Thank you so much. Good job. Thank you. One moment for our next question. Our next question comes from Samad Samana from Jefferies. Your line is now open. Hi, good afternoon. Thanks for taking my questions. Dan, maybe the first one for you. Just on the pricing model for AI, can you remind us, are you currently pricing DaVinci? Is it a platform fee plus some interaction model? Is it based on the number of seats? Just how should you think about the current model, and how are you thinking about that model evolving, over time? Today we give customers an option to purchase the specialist bots, either by the users that they help or by the consumption, so how many times they're being called to help. I can say that some customers like to go by consumption because they can start small and they wanna make sure that they only increase automation consumption when it's really working. That's what's appealing to some customers. Other customers prefer to just pay a fixed price per user because they wanna kind of cap their cost of automation. You know, when you think about this, you know, it's not that we have one specialist bots per user. I envision over time, each user will have three, four, five, or 10 different bots helping them doing different things, right? The wrap up work that agent does manually is replaced with a bot that it can only do wrap up. Searching for knowledge is completely different bots. Coaching the agent, it's a different bot. They can pay per user, but then they'll have to pay for each bot that they use or they could prefer the consumption. The way they actually buy, they don't buy bots, they buy workflows, right? We have been delivering workflows to our customers for many, many years that help them to run their business processes. The bots are actually injected into the workflow. The agent doesn't have to stop what they're doing and say, "Oh, I'm gonna call a bot." Everything is being actually automatically built into the way they work today. When they come to do a certain task, If the bot was purchased by the customer, that bot shows up and just do the work. Instead of summarizing the call, which can take, you know, 30 seconds, sometimes a minute, the bot, if it's purchased, come in, they see the summary, they approve it takes them 5, 10 seconds, and they go to continue to take the next interaction. It's we're very flexible because we know our customers like AI, but they also wanna make sure that this works in their own environment. That's why we see that as they get more confident, they'll increase consumption over time. Great. Grant, maybe just a follow-up question for you on the SaaS revenue guidance. I understand the comps get easier in the back half. I guess, as you sit here today, how much visibility do you have into that acceleration that's required in the back half of the year to hit the full year targets? How much, I guess, how much new business do you have to book in order to get that to those targets? How much variance is there? Sure. Thanks. Thanks for the. We do see a uptick in the second half growth rates. For SaaS, it's really driven by, you know, a couple things that we've talked about in the past. One is the new and expansion deals, right? That's related to the new bookings, and the other is related to conversions. Q1, we saw a 50/50 split between those in terms of driving that SaaS revenue growth. Second half, and for the full year, we expect it to be more closer, closely related to two-thirds of that overall SaaS revenue in the second half will come from the new and expansions, and about a third from the conversion activity. In terms of the visibility and uptick, you know, a portion of that is outside of the conversions and getting some of the uplift Dan mentioned. It's also related to some of the new bookings that we have. I gave some commentary, you know, on what we see, the $50 million of greater than $50 million in new SaaS ACV first half, and a slightly more in the second half, that's $60 million. We have good visibility on the pipeline, right, coverage to achieve that. There's one other dynamic that we have that drives a little bit faster acceleration in the second half for growth rates, and that's related to some renewal volumes that we have coming up in the second half of the year. That's really driven by the nature of our SaaS transition. We established our transition program three years ago. We had a number of customer contracts who signed at that time, and those renewals are coming up in the second half of this year. That combination of dynamics is what drives a little bit of the uptick that you'll see first half to second half. Great, really helpful. Thank you for taking my questions. Appreciate it. You bet. Thanks. Thank you. One moment for our next question. Our next question comes from Peter Levine from Evercore. Your line is now open. Great. Thanks, guys, for taking my question here. You know, maybe, Dan, just to piggyback off of what you just said with the renewals, you know, maybe could you give us an initial read for the contracts that are up, are you seeing those contracts take longer to close? You know, what% are you seeing those conversion rates or renewal rates at all stay steady, improve, decrease? Just give us a sense of kind of where you think those renewals will come in in the second half. Yeah. Renewals, we're not seeing much change at all on those contracts. I think what Dan had highlighted and where we're seeing more of the elongated sales cycle are really on the newer deals or the expansion related because that's where customers need to go and find the additional funding. On the renewals, it's pretty well baked in and for the funding environment. We've seen very good steady progression on that over time. In terms of contract terms, we've heard from others that's reported this quarter, like, you know, they're not getting three years anymore. Is that what you're seeing from both new and existing contracts, where it's typically maybe you're seeing more one-year deals versus three-year deals? What we've seen, our new deals typically are 3 years. For the renewal, you know, opportunities that we have out there, it's really a mix. It's not a standard 3 year. If anything, we've actually seen a slight tick up in the term length that we have with customers, in many cases, starting to renew a little bit longer. Part of that is the understanding and the messaging that Dan has highlighted of the ability to get additional value from Verint's platform. Locking in gives them a little bit of pricing benefits, without, you know, as much of uplift, but they have that ability to get a lot more innovation from our platform in doing so. Perfect. One last, s orry, Dan, go ahead. I'd say on what I see in that regard, you know, customer on one hand, you know, they, the natural trend is, you know, I don't want to renew longer because I don't know what's gonna happen. Once they realize that, you know, we're not locking them in because the platform is totally open, and they can do whatever they want with their telephony, CRM system. They can buy any application, we, you know, and they can leverage the platform in any way. As Grant said, we don't see that as an issue. At the same time, we see customers that really want to lock the price for 3 years because of inflation, and they have a price guarantee if they lock the price for 3 years. Net-net, yes, no, no, impact on Verint for now. J ust one last quick one. I don't think I've heard it on the call, but just a kind of a macro update. You know, if you look at your full year guide, what assumptions are you baking in? Are you assuming the environment gets worse, stays, you know, kind of where it is today? Just give us a sense of, you think about the full year guide, what your assumptions are around the macro impacting your ability to close deals. Thank you. Yeah. No, no assumption in improvement of economic environment. There's no reason for us to make that assumption, so we expect the same. We talked about the new deals, the use of ACV, $15 H1, and, you know, we have $28 through May, and then $60 in H2, which is, as Grant just said, we have the pipeline coverage. In addition, you know, the assumptions this year is that we'll have the gross margin expansion because we continue to shift with good SaaS growth, recurring revenue growth. We continue to shift to higher gross margin and we will, you know, we assume that the gross margin improvement throughout the year. In our OpEx level, we had $106 in Q1. We planned very small sequential increases because we, again, wanna be cautious in this environment. The net-net is 7% EBITDA growth. That's over $250 million EBITDA this year, 20% margin. You know, that's really our focus this year. While we're doing that, we wanna complete the SaaS transition and focus on, you know, helping customers adopt AI. Those three things are the main strategic initiatives that I'm driving in the company this year. Great. Thank you for the color. Thank you. I am showing no further questions. I would now like to turn the call back over to Matthew Frankel for closing remarks. Thanks, Justin, and thank you to everyone for joining us today. As always, please feel free to reach out to me with any questions, and I look forward to speaking to you again soon. Have a good night. Take care. This concludes today's conference call. Thank you for participating. You may now disconnect.