Verint Systems Inc. (VRNT) Earnings Call Transcript & Summary

Before we begin, Verint would like to draw your attention to that certain matters discussed today 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 the 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 31, 2023, our Form 10-Q for the quarter ended October 31, 2023, and other filings we make with the SEC. The financial measures discussed today include non-GAAP measures as Verint believes investors focus on those measures in comparing results between periods and among our peer companies. Please see today's slide presentation, the recent earnings release and the Investor Relations section of Verint's 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 or superior to GAAP financial information, but is included because management believes it provides meaningful supplemental information regarding our operating results when assessing the 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.

Hello, everyone, and welcome to Verint's Investor Day. Thank you for joining us. We're looking forward to sharing the Verint story with you today. Before we begin, I'd like to note that after today's presentation, we'll be taking questions. So please feel free to use the chat function on the webcast or email us at [email protected]. Now let me turn it over to Verint's CEO, Dan Bodner.

Thank you, Matt. Welcome, everyone, to Verint Investor Day. I'm pleased to have with me today a few members of the Verint management team, and we are excited to share with you the Verint AI story. Our management team did a fantastic job over the last 3 years to complete our SaaS transition and build an AI-powered open platform in the cloud. Over the last 3 years, we've added a lot of talent to the company to execute our AI vision. The 4 executives, who will present with me today, have assumed their chief level position during this transition over the last 3 years. Now let me introduce you to the team, starting with Jaime Meritt, our Chief Product Officer.

Thank you, Dan. I'm Jaime Meritt, I'm Chief Product Officer, and I've been in my role since the spin. I've spent the last 25 years bringing together AI and data to deliver great products from the cloud. Rob?

Thank you, Jaime. Hi. My name is Rob Scudiere, I'm the Chief Technology Officer. I've been in my role for 2 years. I have more than 25 years of SaaS and cloud experience building real-time data and analytics platforms for the enterprise space. Now over to you, Steve.

Thanks, Rob. I'm Steve Seger, the Chief Revenue Officer. I've been in my role a little less than a year. For the past 25 years, I've led global go-to-market teams in the AI and CX space. Grant?

Thanks, Steve. I'm Grant Highlander, Chief Financial Officer for Verint. I joined -- stepped into this role about a year ago, and I bring 25 years of experience in leading finance and operational teams in the global technology space. Back to you, Dan.

Next, I would like to review the agenda for today. I will start today introducing the Verint AI opportunity and then invite Jaime to review our AI differentiation. Rob will review the technology powering the Verint open platform, and Steve will discuss how we take a platform to the market. Finally, Grant will review the financial model and 3-year targets, and we will follow with the Q&A session. Let's begin. The customer engagement industry is right for automation driven by AI. With estimated 50 million customer engagement workers globally, the cost of labor is an astronomical figure of $2 trillion annually. Brands are looking for AI to help them increase the ex-automation so that they can reduce labor costs and at the same time, elevate CX. With the recent advances in Gen AI innovation, the promise of AI in our industry seems more real than ever before. Customers are excited and many are already deploying AI in their operation. While customer AI adoption is still in the early stages, demand is strong and the ROI is clear. Later today, we will review Verint AI-powered platform, and we will hear from customers and partners and by the results they experienced with the Verint AI platform. Industry analysts agree that our industry is ripe for AI. Here are a few quotes from industry research. AI can significantly improve customer service operations, including cost reduction, revenue growth and service quality. Contact centers using AI achieve faster response times, improving customer experience. AI-based solutions can bring large labor savings by reducing number of agents. So what is the strategic problem the industry is trying to solve? Our customers across all segments tell us they are facing a reality that requires them to do more with the same budget and resources. Customers have ongoing pressure to elevate CX, but they cannot achieve this important goal without hiring more people, the solution, the CX automation platform powered by AI technology. The CX automation platform that is designed to orchestrate the new workforce of people and bots working together -- rather than keep hiring more people, brands now have the opportunity to deploy AI-powered bots into the workforce to augment humans and create additional work capacity. I believe we are at the early stage of the emerging new workforce. More and more brands realize that deploying a CX automation platform in their contact centers will empower them with a strategic competitive advantage. However, transforming a human workforce into the new workforce and creating strong collaboration between people and bots is not a trivial task. Many brands already experimented with AI technology and were underwhelmed with the poor results delivered by ineffective deployment of AI. Jaime and Rob will discuss later how the Verint CX automation platform is differentiated and was designed from the ground up to deliver AI effectively and orchestrate the workforce of people and bots. The platform was designed with behavioral data and Verint Da Vinci AI at the core. And the bots in the platform are embedded in business workflows, delivering AI to the fingertips of the human workforce. To better understand the significant Verint AI opportunity, let's look back at our history. Verint 1.0 started in 1994 with a focus on unstructured data analytics. And today, data is a key differentiator in the way we designed our CX automation platform. Verint 2.0 started in 2006 as we were the first vendor to combine data analytics with workforce management tools to create a unified workforce optimization solution. In 2016, Verint 3.0 was focused on empowering the human workforce across the enterprise, including contact centers, branch and back office. We created a market-leading platform to manage business workflows across all customer engagement touch points. Our journey prepared us well to develop an AI-powered platform to orchestrate the new workforce of people and bots working together. Over the last 3 years, since we spun off our security business, we created an open platform specifically designed to increase CX automation. This was the culmination of many years of industry experience and was built around Verint Da Vinci AI and Verint Data Hub at the core. Earlier this year, during Q2, we launched the platform at our Engage Customer Conference and since we received a very positive customer feedback. Today, we are starting our next chapter, Verint 4.0, with a differentiated CX automation platform offering customers 35 AI-powered bots in the Verint Cloud. The time for Verint 4.0 cannot be better for 2 reasons. First, the industry is ripe for AI and automation. And second, we can now offer the market a high pace of AI innovation in the Verint Cloud. As we begin our next chapter with Verint 4.0, we are well positioned to help our large customer base augment people with bots. Verint supports 4 million agents across our base of large enterprise customers, and we help these agents to process 30 billion interactions annually with our workforce engagement solutions. We are well positioned to help our customer transition, the human workforce to the new workforce so they can benefit from huge ROI driven by CX automation. Later on, Jaime will bring this ROI to life through some examples. Our platform is differentiated because it was specifically designed to increase CX automation with data and AI at the core. The open design of the Verint platform ensures that customers can seamlessly connect the Verint platform with their existing ecosystem. Our customers tell us that they need a completely open platform that will support their AI journey at their own pace. The rip-and-replace approach offered by many of our competitors is operationally disruptive and often deliver underwhelming results. Our open platform is particularly attractive to our large base as they know the proven value of the Verint solutions they already use to manage their human workforce, and they know they can trust Verint to augment the human workforce with bots. Today, we offer customers 35 bots in our platform, and we continue our fast pace of innovation. In fact, our target is to introduce a new bot to the market every few weeks. Customers that adopted the Verint platform know that our open approach will future-proof their investment. Verint Da Vinci AI is open, and we continuously refresh the Verint bots with the latest commercially available AI models. The secret sauce of the Verint bots is the data available in our platform. We capture behavioral data for many data silos across the enterprise and manage a unified data hub. Our bots train in the data gene, 24/7, making them highly accurate and effective. Behind our CX automation platform is a large R&D organization with significant AI expertise, a very large data sets and proven unparalleled domain expertise. We are well positioned to maintain our differentiation over the long run. As we look to accelerate Verint growth, we see a very large opportunity ahead of us. Today, brands spend 30x more on labor compared to technology. As brands evolve to the new workforce of people and bots, their spending mix will shift from labor to technology. You can see this shift on the slide. The labor spend in orange gets smaller, while the technology spend in blue gets larger. The orange reduction is much larger than the blue increase. And overall, brands will have significant net benefit from the overall reduction in spending. For Verint, we'll increase bot adoption, the TAM gets larger, and our revenue opportunity increases. We will review several examples later on. When we analyze the Verint customer base of 4 million agents, we see an opportunity to augment this massive workforce with bots. As our customer base shifts from people to bots, the Verint revenue opportunity increases significantly. In addition to the enormous opportunity in the base, we're well positioned to pursue new logos with our direct sales force and over 300 reselling partners. Our open platform is ideal for partners as it makes it easy to resell our bots and also empowers the partners to offer new value-added services for CX automation. Later on, Grant will quantify and model the Verint AI growth opportunity. We will show you today our customer AI adoption accelerates our bundled SaaS revenue growth. We target bundled SaaS growth to drive fiscal '25 overall revenue growth to mid-single digits and we target accelerated revenue growth to double-digit in fiscal '27. With ongoing margin expansion, we target adjusted EBITDA margin to reach around 30% and Verint to become a Rule of 40 company in fiscal '27. And now I would like to turn it over to Jaime to review our AI differentiation.

Thanks, Dan. Now I'm going to dig deeper into Verint's unique approach to AI and the business outcomes that are being achieved by customers on Verint's open platform. Specialized bots are how we package and sell our AI-powered capabilities to brands. Bots enable our customers to create a new workforce, teaming up Verint bots with human employees across the enterprise to increase CX automation. Each bot uses the latest AI to automate a single human function, improving efficiency for specific roles in the organization. For example, a bot may be designed to support an agent in the contact center, a supervisor, a compliance professional or a business leader. With 35 bots, we augment many different roles across the enterprise. Most importantly, bots are easy for customers to adopt, delivering CX automation without disruption. Our bots are designed to integrate with the existing workflows without requiring changes to how employees are working. Adopting a bot doesn't require a large transformational project. They integrate seamlessly into the applications that employees are using every day. Verint bots work as a team. This enables our customers to build a unique plan to onboard their own team of Verint bots to augment their workforce and elevate customer experience. Throughout the day, we'll show examples of the economic results that are achievable with such a team of Verint AI-powered bots. The Verint open platform was built from the ground up for CX automation, bringing together the latest innovations in AI with the rich behavioral data flowing through Verint products. This unique platform core makes Verint bots highly differentiated. Let's talk about how. It starts with Verint Da Vinci, which acts as the factory for our bots. Verint Da Vinci allows us to combine the best commercial open source and proprietary AI and provide it to all Verint bots and applications from the core of the platform. This open approach means that all bots are powered by the best available AI models for their specific tasks. AI is evolving at a rapid pace. So the best model will continue to change over time. Our customers can rest assured that Verint Da Vinci will continue to keep pace and adopt the next innovation and generative AI models. As they emerge from the factory, our bots are trained on Verint's unique data set, which encompasses over 85 languages across every industry sector. Verint bots are training continuously on the real-time behavioral data of the specific brand, flowing continuously through the platform data hub. This means that bots get better, the more the brand uses them. Our continuous training allows the business outcomes achieved by bots to accelerate over time as brands expand their bot usage across their workforce. Finally, AI must be easy to deliver to the fingertips of the human. A brand shouldn't have to transform their day-to-day processes to take advantage of AI or require a lengthy IT project to deploy. Verint's open platform allows us to deliver specialized bots into the applications our customers use every day. They don't need to adopt new tools or have lengthy change management to get the benefit of AI. These 3 pillars of the Verint bots are the key delivering differentiated business outcomes for our customers and partners. Today, we offer 35 bots to our customers and continue to expand the team of bots at a rapid pace. Some bots are designed to augment the agent and other bots are designed for other roles throughout the enterprise. Bots that augment the agent allow brands to increase agent capacity. For example, interaction wrap-up bot automates the largest portion of after call work, enabling agents to get back to doing what they do best, engaging with customers. This bot, which you'll see in our upcoming demo, uses generative AI to listen to the call and summarize everything that happens. So the agent doesn't have to spend their precious cycles doing it themselves. Now a suggestion, another bot you'll see in our demo is continuously monitoring the agent conversation and automatically suggesting articles that can guide the agent on how to best handle the current interaction. Instead of searching endlessly for the right content, the bot finds it and delivers it to the agent without ever being asked. Enterprise bots augment other roles in the contact center. This could be supervisors where our performance scoring bots automate the quality review process, freeing up time for supervisors to coach their teams and understand workforce performance. Our CX scoring bot helps customer experience professionals understand and elevate customer experience, leveraging data across the platform to increase CSAT, NPS, while reducing customer effort. Verint's comprehensive approach to workforce augmentation is unique in the customer engagement market and has led to significant increase in demand across our customers to add bots in their environment and start their CX automation journey. With Verint bots, our customers are creating the contact center of the future today, instead of relying exclusively on hiring more employees to improve customer experience as they have historically, we give brands a better path. This AI-powered new workforce of humans and bots can deliver better experiences for our customers by making their employees more efficient without spending more on labor. This translates into tremendous ROI for our customers. Now that you understand our differentiated approach to delivering AI through our AI-powered bots, we can look at an example of how our team of bots works with agents empowering them with CX automation. In this first demo, you'll see how the Verint voice containment Bob can deliver superior self-service experiences for brands that replace those frustrating first-generation voice assistance and dramatically improve their CX. [Presentation]

You were just introduced to a number of Verint bots in that quick vignette that we're able to handle the customer's request and completely contain the call in the self-service channel. The voice containment body engages in natural language and quickly interpret the intent of the call. Contrast has been your own experiences with legacy IVR, press 1 for orders and the first generation of ineffective and frustrating voice assistance. This bot understands the intent because it's trained on the brand's data and knows why their customers call into the contact center as well as the prior interactions with this specific consumer. This is why this parent bot delivers much higher containment rates than other approaches with dramatic improvement to the overall experience. Furthermore, the brand gets substantial financial benefit by avoiding the need to engage any employees in the handling of this transaction. Even with our market-leading containment rates in the self-service channel, there will always be interactions that require further handling in the contact center. Now let's turn our attention to how the Verint team of bots supports a human agent during an interaction, improving efficiency with CX automation at every step of the engagement. [Presentation]

Now that you've seen our bots in action, we have a solid foundation to discuss how we price our bots and demonstrate ROI delivered through the new workforce. What does 2 minutes of savings for an agent translate into financially for the brand? Each parent bot delivers a measurable business outcome for the brand that is backed by a dedicated ROI. This makes it easy to determine the value of each bot. Our open platform approach allows customers and partners to choose which bots they'll adopt first based on the priority of the business outcome. Since they are priced by volume, brands are able to start small, demonstrate value and expand from there to increase automation across the team. All of our agent-facing bots that you saw in the demo are priced by the number of interactions handled by them. We'll begin with the first bot you saw the voice containment bot to understand the ROI of that bot individually. Deflection to self-service with a high rate of containment can save the agent labor cost entirely. Interactions that require the customer to speak to an agent are nearly 30x more expensive than those that are contained in self-service. A typical voice call requires 5 to 7 minutes agent time at a standard rate of 40,000 per year, voice calls cost the brand $5.56 total in labor and technology spend for each and every call. The same call handled entirely by Verint's containment bot will cost $0.20 for the entire interaction, representing a total savings of $5.36 per interaction. In a contact center of 2,000 agents, a 10% increase in containment saves the brand nearly $8 million annualized that can be repurposed to other business priorities. Alight an HR technology vendor, is using Verint's Containment Bot to generate tremendous savings through improvements to their customer experience. Let's hear from Alight and learn how their Ask Lisa has elevated 30 million customer experiences.

Please tell us about Alight Solutions.

Alight is leading cloud-based human capital technology and services company. We empower 36 million people worldwide to make help profit HR decisions across many of our brands.

Please tell us why you selected Verint's Containment Bot?

Before we selected Verint's Containment Bot, we did a market review and concluded that Verint's open platform delivered on our complexity needs. Verint's differentiation was also very strong in 2 areas. First, Verint's approach to data AI natural language processing is very strong, which is critical for industry like ours that leverages a lot of complex language. And we wanted to make sure that we can ensure a good user experience. In addition to that, Verint is a leader in customer experience automation and AI market, and we're very highly recommended to us by the analyst firms for both Verint's technology and customer service.

What results have you seen with Verint's Containment Bot with you brand as Ask Lisa?

Ask Lisa since its inception in 2017 has handled more than 30 million customer interactions. In 2023 alone, Ask Lisa has handled over 50 million interactions across our digital channels. Lisa understands in response to over 850 topics across health, wealth and HR. And Lisa achieved a very high accuracy rate of 95%. With Lisa, we are able to reduce operating costs and at the same time, increase the satisfaction of our clients.

Do you have a road map to deploy more generative AI?

Yes. Generative AI is very exciting to us. We're very pleased to see the fast innovation that Verint is driving in their latest platform, and we're very excited to take that platform to the next level and introduce our generative AI capabilities in 2024.

Thank you, Alight, for participating in our Investor Day. Verint's unique approach to AI is able to deliver superior results in containment and remains highly differentiated from other vendors in this space. We've recently been awarded the top leadership position in conversational AI by Opus Research, an analyst firm 100% dedicated to tracking this fast-changing market. We received top scores in all categories with proven customer success, the completeness of our platform vision, our open approach enabling easy integration into the customer's application and data ecosystem and the AI-powered capabilities that lead the market and achieving best-in-class containment rates. Opus recommends Verint for those brands that want to transform engagement through AI-powered automation. Now let's look at the potential economic impact of another member of the bot team that we saw in the demo, the interaction wrap-up bot. Agent spend, on average, 20% of their time during repetitive administrative work after a call has ended. Often, a significant portion of this time is spent on summarizing the interaction and resolution steps. The wrap-up bot allows contact centers to reclaim this time through CX automation, automatically summarizing the call so the agent doesn't have to. This allows agents to quickly return to what they do best, engaging with customers instead of administrative work. Before the wrap-up bot is enabled, an average contact center will spend $1.19 on labor and tech on wrap-up tasks per call. With the wrap-up bot, that cost decreases substantially and saves the customer $1.14 per interaction. Using the same 2,000 agent contact center and the prior example, where summary occurs on 100% of customer interactions the wrap-up but translates into a yearly savings of over $16 million in agent labor that can be reinvested in other business priorities. Each specialized bot is designed to work as a team with the brand's employees to deliver a huge ROI. While we've looked at the individual financial models for our bots, let's shift gears and look at how brands get value from a team of bots. In this scenario, a brand is expecting a 20% increase in interactions in the coming year. Historically, the only option that a brand can employ was to increase staff by about 20% or 400 agents. Instead, our customers can use the Verint open platform to expand their workforce capacity by making the existing agents 20% more efficient by empowering them with a team of specialized bots built into their workflow. Based on the customers' requirements, we've chosen 4 of the bots from the demo to deliver increased capacity. Customers can choose to enable bots for a subset of agents or interactions based on their individual scenario and financial goals. In this case, we're deploying the interaction wrap-up bot for every agent since policy requires that summaries provided on 100% of customer contacts. However, now [indiscernible] suggestion and performance coaching are only required for the lower-performing tier of agents and they'll be deployed to 50% of the population. Voice containment is also deployed to prevent 10% of the calls from ever-reaching an agent. Together, this team of bots helps the brand increase workforce capacity by 20%, while the brand pays Verint only for those interactions that were supported by this team of bots. Let's look at the economic options for the brand as they choose between our recommended team of bots and their historical approach of hiring to accommodate increased volume. Bringing on an additional 400 headcount will cost the brand approximately $16 million annualized in wages. This doesn't include the hiring and onboarding for each new agent, which adds additional cost, management overhead and significant ramp-up time to productivity. Hiring our team of specialized bots is 10x more cost effective with the brand paying $1.3 million to have our bots to accommodate the increased demand. Furthermore, the bots are implemented quickly, trained uniformly and work 24/7 supporting the workforce. As you can see, the customer economics are compelling with a 10x savings for the brand by hiring the Verint team of specialized bots. Now let's turn our attention to the economic impact to Verint. If the brand chose to hire 400 new agents, they would need to expand Verint agent-based applications. Typical pricing would result in about $200,000 annualized. Leveraging the team of bots will generate approximately $1.3 million of revenue for Verint over that same period. The economic benefits are clear and provide a win-win option for both the customer and Verint. Hiring a team of bots is 10x more cost efficient for the brand than expanding their workforce and generate 6.5x more revenue for Verint. These same economics work, whether the brand is increasing the capacity with the same number of agents as in this example, or deploying bots to reduce the overall agent count. In summary, Verint is providing brands with the power to orchestrate the new workforce and people and bots. Our goal is to give brands the tools to flexibly dial up and down the mix of people and bots at their own pace to manage which workloads need to be handled by agents and those that can be [ dedicated ] to AI. As you've seen today, the economic benefits of CX automation to brands and to Verint are positioning us for our next phase of growth. Now I'd like to turn it over to Rob Scudiere, our Chief Technology Officer, who will show you how we can deliver these amazing results with the Verint open platform.

Thank you, Jaime. As we discussed throughout the day, the way brands can increase CX automation is by evolving to a workforce of people and bots. We knew this was fundamental as we built our open platform with Verint Da Vinci AI and data in the core of the platform. Next, I will discuss our open platform, Da Vinci AI and the Data Hub in detail, highlighting how it differentiates Verint. Verint is a recognized market leader in workforce engagement applications. As you heard from Dan earlier, our best-of-breed applications power over 30 billion interactions annually across 4 million agents for the world's leading brands in every industry. We are already deeply ingrained in these agents business workflows, which is incredibly ripe for automation. Our deep penetration and expertise make us extremely well positioned to capitalize on the AI-powered growth that will boost agent productivity and efficiency, streamline customer interactions and strengthen brand loyalty. Verint's open platform was purpose-built for CX automation. Philosophically, we believe in an open strategy. This is fundamentally a different approach than our competitors in the space with a closed ecosystem that locks in their customers and partners. The open platform is a cloud-native architecture designed to be multi-cloud and run anywhere our customers and partners need Verint applications. For customers, open provides freedom of choice and flexibility to future-proof their investments. For partners, Open provides the ability to innovate and add value to their customers. The platform is designed to be open across several dimensions. At the center of our platform is Da Vinci AI and the Data Hub. Da Vinci AI and the Data Hub are how we leverage more than 25 years of behavioral data and the latest commercial open source and proprietary AI models to create and continuously train bots to do one thing well. The result is a team of bots that live in the platform and are available at the fingertips of the workforce. No other platform in the market has taken this unique and differentiated approach. More importantly, our platform-wide approach to AI data and seamlessly blending a workforce of people and bots is incredibly difficult for any brand to achieve independently. It requires a highly specialized data set a deep knowledge of customer engagement use cases and the ability to apply and scale leading-edge AI capabilities. Let's take a close look at Da Vinci AI. Da Vinci AI is the bot factory. The bot factories where we create the specialized bots and is highly differentiated because Da Vinci AI is open, built into the platform core and selects the best model to deliver the intended business outcome. Da Vinci is open, which means we can leverage the latest generative AI models. We believe that no one Gen AI model will rule them all. Models will continue to evolve because the market is early and technology is rapidly advancing. At this stage, optionality is critical. You need the flexibility to use different Gen AI models for different use cases at different points. We embed groundbreaking AI from across the industry. For example, the interaction wrap-up bot that Jaime mentioned uses Azure OpenAI service and Amazon Bedrock, while another bot uses Amazon Macie and Microsoft Cognitive Services, Da Vinci's open approach enables us to stay at the forefront of AI innovations. We use multiple models and pick the best one, depending on the accuracy, performance and price required for the specific bot outcome we want to deliver. Da Vinci is at the platform core, which means it powers all applications running on the platform. We build, train and embed AI models once and they benefit multiple applications. Every time we evolve a model, it enhances all the applications, resulting in an accelerated pace of innovation. We take a factory approach to building bots. We are constantly changing and tuning AI models using our unique and diverse behavioral data to make our proprietary and generic Gen AI models more accurate. Data is the differentiator that helps AI understand our customers' business. As we build and train our AI models, we keep security, privacy and responsible AI in mind. We use robust compliance frameworks and processes to ensure the data is handled properly and leverage industry standard frameworks across the AI life cycle to ensure fairness and engender trust. Now let's take a closer look at the Data Hub. The Data Hub is the bot gym. Every application adds data. So through the ordinary course of business, we continuously capture a rich set of behavioral data comprised of interaction, experience and workforce data. This is unique and typically unavailable in customer CRM and data lakes. The behavioral data describes how humans behave and interact and is the driving force behind how bots learned to act in ways that complement people. Our data covers over 80 languages from every industry covering all geographies and billions of data points across every channel, customer touch point and conversation with humans and bots. The Data Hub is a key differentiator because achieving success with AI relies on a strong data strategy. Data has to be up to date, complete, accurate and accessible. Our rich data leads to better performing bots across a variety of use cases to provide brands with better outcomes. Our unique and differentiated data sets us apart in the market and creates a natural barrier to entry for point solutions and competitors looking to enter the customer engagement market. We combine all the behavioral data in one place to make it simple for our bots to train constantly in the gym, 24/7. Our bots continually learn from data, analyzing new information and adapting accordingly with accuracy that enables bots to continue to do one thing well. Let me explain what you're looking at in this diagram. You can think of this as the wheel of value. It illustrates how data is at the center, making it easy for customers to realize the full potential of data and understand what is happening across the enterprise at a deeper level. The Data Hub transforms siloed data into business insights. Now let me bring you through a few examples to bring this to life. Workforce performance analytics helps customers understand how their workforce is doing, where they are stronger or weaker and where they need to drive improvements with the coaching bot. CX analytics helps customers understand their customers' experience across all customer journey touch points. Did the customer have a good experience returning a product online, but a terrible experience when they spoke with an agent. Brands need to understand why and what is different to drive the right improvements. The Data Hubs behavioral data provides another dimension behind the transactional actions in the CRM system to help answer these questions. Real-time insights improve agent performance during the customer interaction because we understand what is occurring throughout the interaction and can provide real-time guidance. Our ability to understand the customer request and the agent actions enables the coaching and knowledge bots to assist the agent at the right moment so they can focus on driving engagement and meaningful interactions. The Data Hub brings the value of data to anyone in the organization, helping them to manage the new workforce of people and bots, improve customer experience and deliver better outcomes. Turning to our bots. We are enabling a workforce of people and bots working together to make the workforce significantly more effective while elevating customer experience. Our approach minimizes the change required for an agent to take advantage of the latest generative AI and get the desired business outcome from the bot. Customers see the benefits of this approach because they don't have to undergo a significant change management exercise or spend time redesigning processes just because there's new technology. Our open platform and Da Vinci's open approach make it straightforward for customers already in the Verint Cloud or have kept their Verint solutions in other clouds to consume bots. In other words, the full breadth of our innovation is available to every customer and partner. The relationship between data, AI and humans accelerates new innovations. We made an intentional design decision 3 years ago to put data and AI at the core of our platform even before Gen AI was available in the market. This architecture design is a key differentiator, creating a significant barrier to entry. Our design approach supports faster innovation as evidenced by the fact that we're adding new bots every few weeks. This level of innovation is more rapid than anyone else in the market enabling us to maintain and extend the moat between us and our competitors, another key differentiator. Finally, let me turn now to the open design to the platform. Open is a philosophy, and we take a dramatically different approach than other competitors in the space. The Verint open platform makes it incredibly easy for customers to quickly take advantage of the latest bots adopting them in a way that aligns with their business priorities with no disruption. Given the fast pace of AI and generative AI innovation, it's critical to have a platform designed to keep pace. Da Vinci AI and data at the core of the platform means we can quickly incorporate AI capabilities, immediately making them available across the breadth of the platform. We make it easy to instantly provide this innovation to customers already in the Verint Cloud and customers who have kept their Verint solutions in other clouds. As a result, we deliver innovation to our customers much faster. Customers can start where they want, adopting one bot and expanding consumption over time. They can use what is most urgent for their business and evolve towards a best practice customer engagement operation through incremental steps that align with their journey. As customers increase CX automation, they want to mature in a way that doesn't disrupt their operations. We designed each bot for one persona to support one business process. This approach minimizes the change to take advantage of the latest AI and shift to a workforce of people and bots. Customers see the benefit of how easily they can enable and integrate new bots without requiring their employees to change the way they work. Lastly, there is only one constant in technology, everything changes. In today's fast-paced technology environment, brands recognize the value of adopting an open platform in all dimensions. Enterprises constantly evolve with the changing technology landscape to meet the ever-increasing business demands. Openness is the critical piece to future-proof their investments. Our customers take comfort in knowing that when they choose Verint's open platform, they can seamlessly integrate Verint into those investments to realize their full value and avoid costly rip and replace initiatives. Our customer-driven approach enables our customers to unlock and harness the full power of Verint innovation. I've covered a lot of information today, so let me summarize the key points to take away. First, the Verint open platform with data and AI at the core is highly differentiated, and our design approach delivers rapid innovation. Second, data is the fuel for AI and our unique behavioral data in the Data Hub is a driving force behind building and training bots. Next, no 1 Gen AI model will rule and our open approach to Da Vinci enables us to take advantage of the latest AI innovations. And finally, while today, all of our AI innovation is happening in the Verint Cloud, we make this innovation available to all of our customers regardless that they are already in the Verint Cloud or still in other clouds, including their own data centers. Now let me turn it over to Steve to discuss our go-to-market.

Thanks, Jaime and Rob, and good morning, everyone. Next, I'll discuss our customer base and go-to-market. Verint's highly differentiated CX automation platform has been adopted by a lot of the world's leading brands, including all 10 of the top U.S. insurance companies. All 10 of the top U.S. banks and 8 of the top 10 U.S. health care companies. Brands around the world like Allstate, CVS, Cisco, Comcast, Costco, FedEx Board, Goldman Sachs, Google, HSBC, Marriott, Toyota and Wells Fargo have deployed our CX solutions to reduce costs and elevate customer experience. In a minute, you'll hear directly from our partners and customers. You will hear about the significant ROI they are achieving from our platform and the opportunity they see to drive further value by adopting additional AI functionality from Verint over time. But let me first discuss why we are winning with our open platform. When I talk to our customers, it's clear that our approach to CX automation is just different. Our differentiation can be broken down into 3 main vectors. First, -- as you heard today, our platform is open and designed with behavioral data and AI at its core. Our open approach provides many business benefits to our customers, including easily integrating into their ecosystem, connecting data silos and delivering to their organization very fast innovation. Second, we have made it easy to infuse AI into customers' existing workflows, the same workflows that they use through the human workforce can now be used for the new workforce of people and bots. As you heard today, our large team of bots leverage the industry's latest AI innovation and deliver AI to the fingertips of the people who need it when they need it. While there are many companies talking about AI, we are delivering AI without disrupting the business and with tangible and measurable ROI. And third, we make it easy for our customers to move to the Verint Cloud without disruption. Because our platform works seamlessly with our legacy workforce engagement on-prem solutions, our customers can add bots in the Verint Cloud without having to move their on-prem applications at the same time. This flexibility is extremely attractive to our base as they can take advantage of our latest AI innovation regardless of where they are in the cloud journey. Next, we'd like to give you the opportunity to hear from more of our partners, starting with Connex. Connex is a leading systems integrator in Canada focused on contact center modernization. Verint and Connex have many joint customers, including some of the largest financial and insurance companies in Canada, such as Bank of Montreal, Bank of Nova Scotia, Royal Bank of Scotland, TD Bank and Manulife. So it's my pleasure to introduce you to Sayan Navaratnam, the CEO of Connex, to discuss his views on AI adoption.

Please tell us about Connex?

I'm Sayan Navaratnam, CEO of Connex Telecommunications. And Connex, we are an integrated technology solutions provider based in Canada, specializing in customer experience, contact center and innovation. Our strategy is to deliver best-of-breed solutions to our customers, and the only recommend vendors to our customers that have best of breed.

Please tell us about your relationship with Verint?

We have had a great relationship and our partnership with Verint for the last decade. We have won many customers together, including some of the largest banks in Canada and also insurance companies. Some of these include Bank of Montreal, Bank of Nova Scotia, Royal Bank of Canada, TD Bank, Manulife, Sun Life, Rogers and various parts of the Quebec government.

How do you think Verint is positioned to go after the AI opportunity?

They are critical in the AI journey. And then the bots are embedded in the existing workflows and each bot performs a specific function with a clear and measurable ROI that our customers are looking for. So this is critical in the journey, and Verint has done an exceptional job of introducing bots into this journey.

How do you see AI adoption playing out over time?

Well, there's a lot of hype about AI. And I believe AI adoption is a journey that customers will take over a long period of time. There are many places where AI can help today in contact centers, and I think there will be a lot of experimentation before there's full adoption. I think Verint's approach of allowing customers to pay for what they consume in a SaaS approach is the right approach as it allows customers to experiment and increase volume over time as they realize the ROIs in adoption of AI. And Verint's open approach provides partners like us opportunities to offer value-added services and help end customers increase the AI ROI from their platform.

Thank you, Sayan. Let's now hear from IHG. IHG is a household name in hospitality, operating a variety of global brands, including Holiday Inn, Kimpton, Crowne Plaza and Iberostar. They handle millions of interactions per year, and they've achieved an incredible level of ROI with our containment bots. It's my pleasure to introduce you to Josh Weiss, who is responsible for IHG's Guest Digital Products. He's going to talk to you about their digital strategy and their experience with our containment bot.

My name is Josh Weiss. I'm the Vice President of Guest Digital Products at IHG. That's Intercontinental Hotels and Resorts, and we've got more than 6,000 hotels, 19 brands, 100 countries, and we take care of millions of guests every single day.

What are the benefits Verint's solutions provide for IHG?

Verint solutions help IHG take care of our customers in a really efficient and effective way. And they do that by helping answer some of the many, many questions that customers have because travel is complicated. Our 6,000 hotels are vast and in many, many different locations. And customers want to be able to understand what they're getting before they make that decision to book. And so Verint's tools really help them quickly understand whether they can bring their pet or what time breakfast has served or whether the property has a pool and literally hundreds of other types of requests. So that's one area. Certainly, another area is freeing up our outstanding reservations and customer care agents, our team, to take care of really complicated guest needs to help them find their ideal destination to explore different rate options. And so when they're not answering the simpler questions, they're able to really focus on that. And then, of course, efficiency and productivity because it's all about helping drive transactions to our digital channels and making those channels as effective as possible and Verint's tools help us keep that.

What are the benefits of partnering with Verint?

Given the tremendously rapid pace of change in the AI space, having partners that can really help us understand the important elements and harness them in a way that is truly relevant to our business is really important. And Verint is definitely one of those partners. So really understanding the problems that our customers and owners are trying to have solved, understanding how our systems integrate and, of course, understanding the broader landscape and bringing the right capabilities to the table are all really important. And we appreciate Verint's partnership in doing all those things.

Thank you, Josh. Our final customer is Navy Federal. Navy Federal is a credit union exclusively focused on the military veterans and their families. Navy Federal started with Verint's on-premise solution, and they're in the process of moving to the Verint Cloud. It's my pleasure to introduce you to Jeffrey Bretana, a key leader in Navy Federal's contact center operations. He's going to discuss their cloud migration and CX automation road map.

Please tell us about Navy Federal Credit Union?

Navy Federal Credit Union is a member-owned not-for-profit credit union exclusively serving the military veterans, their families as well as the Department of Defense. Once a member always a member. We currently have about 13.2 million members. And to serve them, we have over 5,000 contact center agents that are now handling up to 50 million interactions a year. And our slogan is, the members are the mission.

Please tell us about your history with Verint?

For a company our size, especially in the financial services industry, moving to the cloud, it's just not a simple process. But Verint's open platform really enabled us to move to the cloud with a great deal of flexibility. So for example, we're able to keep our data on-premises while still moving the rest of our applications to the cloud. Another example is our telephony. Our telephony system is currently on-premises, and we do plan on moving it to the cloud in the near future. But now we can make that decision on our own time and with the confidence that the Verint platform is going to orchestrate our telephony of choice.

Can you talk about some of the Verint bots in your customer experience automation road map?

Our CX automation road map starts with the Containment Bots. Our members really want to be able to serve themselves get answers to their questions quickly. The Containment Bot could offload a large number of these more straightforward questions before they ever hit our contact center. That means our agents can really focus more on the complex requests that are coming from our members and making sure that they're getting the fullest attention to their most challenging issues. But now that we're on Verint's Cloud platform, we're really looking forward to taking advantage of Verint's team of bots to make our workforce more productive and really elevate our membership's experience with us.

I would like to thank Connex, IHG and Navy Federal for participating in our Investor Day. And I hope you all found the interviews informative. Here are my takeaways from the interviews. First, partners and customers are excited about AI and the Verint approach to AI. Specifically, they like that we're open and we can innovate fast. Second, they started to adopt AI with Verint and plan to increase adoption over time. In other words, they have generated a strong ROI from our solutions and intend to adopt more bots from Verint. And finally, Verint made it easy for customers to adopt AI gradually and increase over time. As I said earlier, I think the fact that we can infuse AI into workflows without disruption is a significant competitive advantage for Verint. To summarize, as you can see, there's a tremendous amount of interest in increasing CX automation with AI. When I talk directly to our customers, it's clear to me that our industry is ripe for automation. Our customers are showing strong interest in adopting more AI to reduce costs and elevate CX and are trying to cut through all the noise in the market. We are deeply ingrained in their customer service operations, and they view us as a trusted partner, uniquely positioned to help them infuse AI into their workflows without disruption. I believe the adoption of our bots is in the early stages, and we have a lot of runway with our base and with new logos. Overall, I believe there are very few vendors in the market as well positioned as Verint to help brands adopt AI in their customer engagement organizations. Now let me turn it over to Grant.

Thanks, Steve, and good morning, everyone. Today, I will cover 4 topics: First, our [indiscernible] SaaS journey since we spun out our security business 3 years ago [indiscernible] place CX automation commissioning company. Next, I will discuss our expectations for the next 3 years, including our initial outlook for fiscal year-end '25 and 3-year targets. Then I will take you through the SaaS KPIs that we will be using to measure and report to you our progress. And finally, I will review our free cash flow acceleration and capital allocation. Over the last 3 years, we completed our perpetual license to SaaS transition and completely transformed our business model and have become a leader in CX automation. We are pleased that we have created SaaS scale over the last 3 years while increasing our total revenue every year and maintaining very strong margins. Most importantly, during this time, we invested in our next-generation CX automation platform, which we launched earlier this year, setting us up for our next chapter of accelerated AI-driven growth. Over the last 3 years, our non-GAAP SaaS revenue has increased from $227 million in fiscal year-end '21 to an estimated $514 million this year, reflecting a CAGR greater than 30%. Fueling our SaaS growth was our strategy to give our customers feature parity and total flexibility to deploy our solutions in the cloud of their choice, either the Verint Cloud, which we report as bundled SaaS revenue, or other clouds, which we report as unbundled SaaS revenue. As Rob discussed earlier, going forward, our AI innovation is only available in the Verint Cloud, and this will drive our shift to bundled SaaS. As we finish our SaaS transition chapter, let's take a look at our forecasted revenue for fiscal year-end '24, broken down by revenue stream. As a reminder, our fiscal year-end is January 31, so fiscal year-end '24 is the year ending January 31, 2024. More than 80% of our expected revenue is related to our software products. As you can see from this pie, we have 4 software product-related revenue streams: Bundled SaaS; unbundled SaaS; perpetual licenses; and support. Each of these streams have a different dynamic, and therefore, we will do a deep dive into each stream separately. The remaining 17% of our expected revenue comes from professional and managed services as we offer a rich service catalog to our customers with many types of services such as implementation consulting, technical and value realization. We view our services offering as ancillary to our software, and therefore, we price our services with low margins for Verint. We expect our customers to continue to take advantage of our services catalog, but delivering services is not a key growth driver for Verint, and we expect revenue from services to decline slightly going forward. Let's take a closer look at our 4 software product-related revenue streams. Over the last 3 years, we have delivered steady growth in both bundled and unbundled SaaS, and we expect to generate around $250 million of revenue in each of these 2 streams this year. At the same time, we've seen a steady decline in both perpetual license revenue and support revenue, consistent with our shift to SaaS. Overall, revenue has increased every year as the growth in SaaS was greater than the decline in perpetual and support. Let me double-click on the SaaS revenue streams. Bundled SaaS is generated with deployments in the Verint Cloud. This is when the Verint software is hosted by Verint, and we recognize revenue ratably over the length of the contract under ASC 606. Unbundled SaaS is generated with deployments in other clouds. This is when the Verint software is hosted in a partner cloud, customer cloud or customer data center, and we recognize revenue predominantly upfront for these deals under ASC 606. During our SaaS transition, we generally offered customers the same level of innovation in both the Verint Cloud and other clouds, and we experienced strong growth in both bundled and unbundled SaaS revenue. As we've developed new AI capabilities, they are being offered only in the Verint Cloud, but are available to all of our customers, whether they are already in the Verint Cloud or running the Verint applications in other clouds. As AI adoption accelerates in the market, we are seeing a pipeline shift to the Verint Cloud or bundled SaaS. In fact, in Q3, we reported that 9 of the 10 largest SaaS deals had AI-powered bots and nearly 90% of our pipeline was for the Verint Cloud driven by demand for AI. AI is creating an inflection point for Verint. Over the last 3 years, both SaaS revenue streams steadily increased, but going forward, bundled SaaS revenue is expected to accelerate and drive our next chapter of growth, which I will discuss further. Now let me double-click on our perpetual and support revenue streams. With the perpetual license to SaaS transition completing this year, we are pleased that the headwinds from this transition are behind us. Going forward, we expect perpetual license revenue to level out at around $100 million per year. As a reminder, we have financial services customers that use Verint solutions for compliance use cases and they continue to prefer to purchase applications in a perpetual model for the foreseeable future. These compliance use cases represent the majority of the $100 million of annual perpetual license revenue we expect. Otherwise, substantially all of our customers today are buying new software and SaaS models. Our support revenue stream has gradually declined over the last 3 years as brands have converted to our SaaS offerings. We expect this rate of decline to moderate going forward, and that support will convert to bundled SaaS with an uplift. Turning to gross margins. I am pleased to report that our non-GAAP gross margins expanded over the last 3 years as we shifted to SaaS and we expect it to improve by approximately 200 basis points by the end of this year compared to 2 years ago. We believe our ability to increase gross margins reflects the pace and strength of our AI innovation. CX Automation delivers significant ROI for brands as it enables them to reduce costs, while at the same time, elevating customer experience. Verint innovation is driving significant value for our customers, and we were able to price our solutions in a way which benefits our gross margins. As part of transforming Verint into a SaaS-based CX automation company over the last 3 years, we focused R&D investment on our next-generation CX automation platform, which we launched earlier this year. Driving our fast pace of innovation is a team of approximately 1,200 R&D professionals, and we are pleased with the efficiency of our R&D operation and we have maintained an expense to revenue investment level of more than 13%. Overall, we delivered strong non-GAAP operating margins during our SaaS transition and platform investment period. As you heard throughout today, we believe our next-generation CX automation platform with behavioral data and AI at the core is highly differentiated and sets us up well for our next chapter of accelerated growth. Next, I would like to discuss our outlook for the next 3 years. With our transition completed, we are shifting all of our energy to monetizing our strong AI capabilities. We believe this strategic shift, we are very well positioned for accelerated growth. And in this section of my presentation, I will walk you through how we see our revenue streams evolving over the next 3 years. This chart shows our outlook for each of the 4 software product revenue streams. As I discussed earlier, we are at an inflection point and going forward bundled SaaS will be our main growth driver driven by AI adoption. With our expected bundled SaaS revenue growth acceleration, we are targeting to become a Rule of 40 company in fiscal year-end '27. Let's take a closer look at the dynamics of the 4 revenue streams going forward. For unbundled SaaS revenue, we expect a small increase in fiscal '25 and a small decrease in fiscal '26 and '27 as our new bookings shift to bundled SaaS. As I mentioned earlier, our strategy over the last 3 years was to innovate in both bundled and unbundled SaaS. Today, all our AI innovation is in bundled SaaS. And as a result, our new bookings mix and pipeline has already shifted to bundle. A key element of our go-to-market strategy is to provide flexibility to our base of unbundled customers. They are not required to convert to the Verint Cloud in order to take advantage of our latest AI innovation. Instead, they can remain in other clouds and add new applications in the Verint Cloud in a seamless fashion. We believe this approach is a real competitive advantage as it allows our base to leapfrog to AI without operational disruption and delay. Let's take a closer look at our unbundled SaaS dynamics going forward and what is behind our expectations for a slight increase in fiscal '25 and a slight decrease in the following years. One way to think about our annual unbundled SaaS revenue stream is as a pool of revenue with inflows and outflows. The first inflow is new bookings. As we discussed, going forward, we do not expect a significant amount of new unbundled SaaS bookings since all of our AI innovation is in the bundled SaaS. Therefore, new unbundled SaaS bookings are not expected to generate a material inflow. The second inflow is renewals. Three years ago, we started a new program under which we offered our customers multiyear SaaS contracts that were recognized as part of our unbundled SaaS revenue. This program is ongoing. And when these contracts come up for renewal, the value is predominantly recognized upfront in the quarter in which the contract is renewed. Our outlook is based on a bottoms-up waterfall analysis of our unbundled SaaS customer base and renewals represent the majority of the inflows going forward. The outflow is driven by conversions from unbundled to bundled SaaS. As a reminder, when customers move from unbundled to bundled, we typically get around a 2x uplift in our bundled revenue stream. Since we provide our other cloud customers with the flexibility to access our latest AI without moving their unbundled base to the Verint Cloud, we expect a slow conversion outflow over the next 3 years. Putting these inflows and outflows together drives our targets for the unbundled revenue stream over the next 3 years. Turning to bundled SaaS. This year, we have seen a significant shift to bundled SaaS, both in our new bookings mix as well as in our pipeline. In the first 3 quarters, our bundled SaaS ACV booking increased 12% year-over-year. and our pipeline at the end of Q3 increased over 20% year-to-year. As a result, going forward, we expect our bundled SaaS growth to accelerate and be the primary driver of Verint's overall growth. For next year, we are expecting bundled SaaS revenue growth of more than 20%, reflecting demand for our AI-powered platform in bots. For fiscal '26 and '27, we also expect more than 20% bundled SaaS revenue growth as AI adoption accelerates. Let's look at our bundled SaaS revenue growth drivers next. We see 3 primary drivers of our bundled SaaS revenue growth. As you heard earlier, we have a large base of 4 million agents, and we have a significant opportunity to deliver bots to augment these agents. The CX market is ripe for automation, and this is our biggest driver of growth going forward. In a minute, I will walk you through a specific illustration of the economic impact of our base increasing bot consumption. Second, we continue to win new logos. In fact, we have added over 100 new logos every quarter since the spin. New logos typically start small and scale over time. And third, once bots are deployed, we will benefit from increased interaction volumes over time, which will further drive customer bot consumption. Let me walk you through an illustration to better understand our bot economics. In this illustration, we look at the economic impact of Verint of a shift in our customer base from a workforce of people to a workforce of people and bots. Specifically, we look at the economic impact of Verint if our base decides to deploy bots to handle 10% more interactions while at the same time reducing 10% of the 4 million agents. For this illustration, we are assuming that our base deploys the same bots that Jaime took you through earlier in his example of increasing agent capacity by 20%, you can see a picture of Jaime's example on the left. The economic benefit to Verint is significant. First, let's look at the revenue we would lose from the shift because our base would have fewer agents, they will purchase fewer agent licenses from us. This will decrease the amount of revenue we generate from our base or agent licenses by around $200 million. On the other hand, and more importantly, in order to reduce the number of agents by 10% and maintain the same level of customer experience, our base will need to deploy Verint bots, which will result in an additional $1.3 billion of revenue to Verint. If we net the revenue we would lose from agent licenses with the revenue we would gain from bots, it would increase our revenue by over $1 billion, and that assumes only a 10% agent shift to bots in our base. Overall, as brands shift from a workforce of people to a workforce of people and bots, our economics improve and our TAM increases significantly. Obviously, the pace of the shift will ultimately determine the slope of our bundled SaaS revenue growth, and we will discuss later the assumptions in our 3-year targets regarding the pace of this shift to bots. Now I'd like to briefly discuss our other 2 software product revenue streams. For perpetual license revenue, as I mentioned earlier, we are pleased with the headwinds we faced over the last few years from the transition are behind us, and we expect this stream to remain at about $100 million a year going forward. For support revenue, we expect this stream to decline on average about 10% per year as our base continues to shift to bundled SaaS, albeit at a more gradual pace. Now I'd like to put this all together and turn to our guidance for fiscal year-end '25. For total revenue, we expect our growth rate to improve to mid-single digits year-over-year, driven by our bundled SaaS growth of more than 20% growth year-over-year due to AI adoption. We expect our gross margins to continue to expand and for non-GAAP diluted EPS to grow a bit faster than revenue. Finally, we expect an increase of about 50% in free cash flow next year, driven by our bundled SaaS growth as well as the fact that some onetime expenses are behind us. We will provide full guidance for next year, including our normal below-the-line assumptions during our fourth quarter conference call. Looking beyond fiscal '25. Today, we are also introducing targets for fiscal '27. Behind our targets is an expectation that our bundled SaaS growth will accelerate over time. The rate of bundled SaaS growth will very much depend on the pace of the shift to a workforce of people and bots driven by AI adoption. I would like to mention that our fiscal year-end 2017 targets reflect a modest assumption of a couple of percentage points decline in agents in our base due to bot adoption. If the customer pace of agent replacement with bots is faster, our bundled SaaS revenue and total revenue will also grow faster. For fiscal '27, we target becoming a Rule of 40 company, with around double-digit total revenue growth and around 30% adjusted EBITDA margins. We believe that we are in the very early stages of AI adoption and that our TAM supports double-digit growth over time. We also believe that with increased scale, we can continue to expand our margins. Finally, during the next 3 years, we expect to deliver non-GAAP diluted EPS growth that is a bit faster than our revenue growth. Next, I would like to discuss how we will measure our progress towards achieving our 3-year targets Given that our next chapter is driven by bundled SaaS, we will report our progress across 4 SaaS KPIs. The first KPI is new SaaS ACV bookings. This metric is a leading indicator of future SaaS revenue growth. As our new SaaS ACV bookings have shifted to bundled, we are putting more emphasis on the bundled component of this metric. And this quarter, we have started to break down total new SaaS ACV bookings into bundled and unbundled SaaS. You can see this breakdown on the IR dashboard on our website. The second KPI is bundled SaaS revenue, which is the primary driver of our growth going forward as we discussed earlier today. The third KPI is SaaS ARR, which is important as it normalizes revenue recognition differences between unbundled and bundled SaaS revenue. And the fourth KPI is free cash flow, which I will discuss in a minute. Before moving on, as a reminder, SaaS ARR normalizes all SaaS contracts to reflect a consistent and annualized ratable view and is becoming an important metric to understand our SaaS growth trends as customers shift to the Verint Cloud and our revenue shifts to bundled SaaS. It's important to point out that SaaS ARR can be particularly helpful in understanding our quarterly revenue trends as it normalizes the accounting impact of unbundled SaaS, which can distort year-over-year trends in our revenue. Next, I would like to discuss free cash flow and our capital allocation. Starting with free cash flow. At this point in our SaaS journey, I am pleased to report that our free cash flow growth is accelerating. We define free cash flow as our GAAP cash from operations less our CapEx, which includes purchases of property and equipment and capitalized software development costs. For the current year, we expect about $120 million of free cash flow, up 15% year-over-year, reflecting close to $150 million of GAAP cash from operations less around $28 million of CapEx. Looking to fiscal '25, we are targeting a 50% increase in free cash flow to approximately $180 million, driven by our shift to bundled SaaS as well as the elimination of certain current year onetime expenses and assuming a similar level of CapEx. For fiscal '26 and '27, we are targeting double-digit free cash flow growth. Next, let me discuss our plans for our cash. Turning to our balance sheet. We continue to be in a very good financial position. Our net debt remains well under 1x last 12-month EBITDA and is further supported by our strong cash flow and our outstanding debt does not begin to mature until fiscal year-end '27. We expect to generate more than $600 million of cash over the next 3 years, which gives us a lot of financial flexibility. We expect our largest use of cash will be share buybacks. Regarding our previously announced $200 million stock buyback program. To date, we have repurchased about $150 million worth of shares. This program was announced in Q4 last year as a 2-year program, but we now expect to complete it faster than planned. Looking forward, we expect to announce a new program once the current one is completed. Before we move to Q&A, I would like to summarize. CX is ripe for automation and brands are adopting more AI to reduce their overall CX spend. This will lead to a shift from labor spend to technology spend. Earlier this year, Verint introduced our highly differentiated next-generation CX automation platform and team of bots, and we are extremely well positioned to address the growing demand for AI. Finally, we believe that we are in the very early stages of AI adoption and that our bundled SaaS revenue growth rate will accelerate going forward, and we are targeting to be a Rule of 40 company in fiscal year-end '27. That concludes our presentation today, and we will now open it up to questions.

Thanks, Grant. And now we'll move to the Q&A portion of the event. In addition to our presenters, Alan Roden, Verint's Chief Corporate Development Officer, is joining us for the Q&A session. [Operator Instructions] First question, you said that going forward, all of your AI innovation is in bundled SaaS, but your unbundled SaaS customers can still access it. How does this work?

Jamie, would you take it?

Sure. Thanks, Dan. That's correct. All of our AI innovation is delivered from the Verint cloud, but our multi-cloud architecture allows our customers, our unbundled customers to deploy in a variety of other clouds, partner cloud, their own private cloud, et cetera, et cetera. So when we design our bots, we design them to be called from anywhere. So I'll give you an example from one of the bots you saw in the demo, the wrap-up bot, the one that summarized the call after they saw the call. When that bot is operating, it's running in the Verint cloud. unbundled customers are streaming that audio, streaming the call into the cloud to come the bot is listening to it, transcribing it and preparing basically keeping track and writing notes. And essentially, when the call finishes, we then push that summary to the desktop that the customer is running in their unbundled environment. So much of our innovation when we deliver it through bots and our cloud or to our unbundled customers when we're delivering unbundled innovation, it's often the adapters and the features needed to call those bots in the cloud. so they can do that cloud-to-cloud connection. So that's the key point is the cloud-to-cloud connection between another cloud and the Verint Cloud that enables that communication.

Next one. Can you talk about why you expect free cash flow growth to pick up significantly next year and a double-digit CAGR the following 2 years? I believe that's for you, Bot.

Sure. Thank you. So it's pretty simple. Our bundled SaaS, as I've taken you through the 4 streams on our revenue, all of our growth is all about the bundled SaaS growth and that slope of the blue curve that I shared earlier. The bundled SaaS is targeted, as we said, to grow more than 20% per annum, and that's really going to drive our free cash flow growth. Now, next year, we have a little bit faster assumption on free cash flow, growing 50%, and that's on the back of some onetime expenses we had this past year that we made in our post-COVID office consolidation, and we're not going to have those next year. So that's going to give us a little bit higher free cash flow growth next year and then be greater than double digit for the next 2.

Thanks, Brent. Next one is what do you see driving the 20% growth in the pipe?

Steve, absolutely. Yes. 20% growth in pipeline. Well, the short answer is it's the demand for AI in the market right now. And that's not just within the base, that's the overall market. So we have a combination of net new logos as well as our base customers that are really pushing for more and more innovation. So one way to think of it is this, we talked earlier today about our ability to deploy easily, our flexibility, our openness, customers that really resonates with them. And in fact, our ability to convert is improved in Q3 alone our top 10 SaaS deals, 9 of them included bots.

Thanks, Steve. Next one is on M&A. Can you talk about how you think about M&A strategy?

So as we discussed today, our platform is architected for a very fast innovation and we innovate 2 ways. We're going to organically and also through tuck-in acquisitions. Most of our innovation today is organic. As Grant discussed earlier, about 1,200 people in R&D, and we spend about 13% of our revenue on R&D each year. So we have a significant investment in innovation. But when we look at our road map, we always think about build versus buy. And if we can find something that has the right technology that can be easily integrated to our platform at the right price, it could make sense for us to accelerate road map by doing tuck-in acquisitions. So our M&A program today is primarily focused on small companies that are going to accelerate our road map.

Thanks, Alan. Next one is you talked about how data is the fuel for AI and can you elaborate on how you leverage your data to drive better results with your bots?

Rob, you are the data expert.

Okay. Thank you. So for starters, you need good data to have good AI. So large language models are obviously a great AI innovation to solve really complex business problems, but they deliver the best performance when they're trained on relevant business data. We do this by training our models in our unique behavioral data that describes how humans behave and then we train the bots to behave as the humans would. Now you saw a few examples in the video. So just to touch on a couple of those. Our containment bot is trained on a rich set of behavioral data to really understand customer intent and provide a very personalized self-service experience. That drives great results for brands in terms of high containment rates. But then we also continue to train those bots on up-to-date data so they understand new customer intents and ultimately drive higher containment. You can think of the coaching bad as another example, where we train that on millions of agent and customer interactions. And because we understand what's happening in real time in those interactions, we're able to understand what the agent is doing, what the customer is asking and the coaching bot can provide very accurate in the moment assistance to that agent. Now these are just a couple of examples how we leverage our unique data to really drive the best performance for the bot outcome that our customers are expecting.

Great. Next question. Thank you, Rob. In your model, what pace of contact center agent declines are you assuming?

So in the -- it was an illustrative example that I provided a little earlier, which was a concept around a 10% bot reduction in the workforce, driven by the consumption and adoption of bots to help augment that workforce. And I showed some pretty impressive financials, right? The [ indiscernible ] economics around it, delivering to Verint over a $1 billion net positive is very impressive. But in our modeling, we've only assumed here as we look out over the next 3 years, a couple of points of reduction in the overall agent workforce.

Thanks, Grant. Next one, Dan, this one is specifically for you. It says, what keeps you up at night?

So I see the industry is ripe for automation. It's a lot of evidence that customers want to get into AI. But the industry is in early stage. And what keeps me up at night is how to make it easy for our customers to adopt AI. And customers have operations, 24/7 operations they need to turn. They need to elevate CX and to reduce the labor cost, but they also need to do it in the least disruptive way. And this is why we designed the platform to be completely open, so they can start anywhere and choose based on business priorities. What is the highest ROI that they see in the next bot that they're going to adopt. But beyond that, I think we need to put a lot of thoughts into how do we make it easy for the entire industry to adopt AI. And we are the market leader. There's no one else we can look at and just replicate, we are leading this market in terms of AI adoption. We now have the cloud platform. We now finished our SaaS transition, so we're ready to focus all our energy on making it easy and it's easy in terms of offering. It could be easy in terms of pricing, and we have a lot of pricing strategies around how to price the bots and make the ROI tangible. And then as customers increase the volume of consumption, obviously, they create more ROI for their brands and also a bigger TAM for Verint. So I think the secret sauce of the next chapter, what I call [ indiscernible ] is going to be about not just getting AI in the platform, but making it adjustable for customers and making it easy for them to adopt and increase volume over time.

Thanks, Dan. So we received a lot of questions about the rule of 40. I'm going to paraphrase one or paraphrase several questions here and just say, can you discuss the key drivers to achieve the Rule of 40.

So there's obviously one overarching. The Rule of 40 by the way, is a combination of revenue growth and EBITDA margin equaling 40, right? So the starting point is all about what's the pace of our revenue growth. And that is, as you've heard today, going to be on the back of our bundled SaaS growth, and that's on the back of our AI adoption being the key driver behind that. And as we get more AI adoption and then more interactions going through the bots, once they're installed, that drives the rate and pace of the overall slope of that bundled SaaS curve and gets us to double-digit revenue growth. The second piece of it is, as we continue to scale, we will have additional gross margin expansion and modest OpEx leverage and at the combination to be at a 30% EBITDA margin by fiscal '27 and double-digit revenue growth. Those are the 2 drivers.

Grant. And one more on the Rule of 40. Do you envision additional hiring? And if so, to hit the Rule of 40 by fiscal '27? And if so, will it be predominantly R&D-related expense?

So let me start with next year, right, fiscal '25, we shared the guidance, the revenue going to mid-single digits. We do not need hiring. We have what we need to be able to go and hit next year. And as once again, the pace of the bundled SaaS grows, we expect to be able to go and continue to invest and maintain the E to Rs that we have for both our R&D investment as well as our sales and marketing, and we'll get some operating leverage out of the G&A going forward.

Thanks, Grant. Next one, you're adding 100 new logos a quarter. Do you envision new customers coming from displacement or greenfield opportunities?

I'll take that. So we've been pretty successful with adding new logos, about 100-plus new logos every quarter for many quarters now. And what I've said before is that we have an open platform. So our new logos can start anywhere. And they are starting in different places in our platform. Our strategy is to have them start see the value that they have from the Verint open platform and then expand over time, whether it's expense consumption of what they already bought or expand into new capabilities. Now in some cases, we see in the new logos that join Verint, we see them actually expanding and replacing solutions they already have, especially point solutions that they have too many. So I think the market is moving into a platform approach. And the cloud platform provides our customers the ability to leverage the core, right? The Cory, the Verint AI, the core is the data hub. These are all things that enrich the experiences that our customers can have on the platform. So they start anywhere, then they certainly can displace existing solutions and bring those capabilities into the very platform and it can also increase consumption of what they already bought in a way that increased the ROI and again, more consumption for us is increasing our revenue. The goal here is with new logo is we want to leverage our sales force. Obviously, as we see new logos per Verint looking for AI. We are positioned very well to go and tell our AI story. But we also have, and I mentioned before, we have a network of over 300 partners. I can say that many of these partners are now in the process of getting on that AI journey with Verint. They've been partners for Verint for many years, selling mostly workforce engagement solution. And now they see the opportunity to sell the new workforce. And the new workforce is people and bots. So a partner see a great opportunity also to kind of leverage their relationship and the Verint technology they used to empower the workforce and add bots and then use the platform to orchestrate people and bots working together, and that will create CX automation. That will drive that increased CX automation that the industry is looking for. So not that different from our strategy for the base. We also are working with our very large base of customers, 30 billion interactions per year. And obviously, more and more of this interaction will be processed by bots, not just by people. Very similarly, we work with new logos, but their journey could be also more through partners that help us to increase our sales footprint and be able to reach more customers faster.

Next question is, can we please double-click on the exhibit that shows what if Verint base replace 10% of their agents with Verint bots? I get that it assumes a 10% agent shift to bots in the base, but what does it assume about the quantity of bots, the customer purchases and remind us what it assumes in terms of the level of consumption.

Yes. I'll take it and grant you can jump in any time. So the way again -- the way that open platform is designed, customers can choose any bots on the platform. And we have 35 bots today, and we're actually adding every few weeks, we're adding a bot. So there's tremendous amount of AI, tremendous amount of bots that customers can choose from. Now which bot is the next important bot for a specific customer. It depends on that customer journey. Some think that the wrap-up bot is very important. But there are customers that actually are doing very short summaries very short wrap-up to calls, and they don't need a wrap-up about as much as they need a containment bought. Their customers have tremendous turnover in their agents and they need a coaching bot because when they bring new agents, they're not really effective very quickly. And the coaching bot is really helping to coach agents on the fly as they are actually responding to customers. So the journey of customers and how they will bring bots from the platform to increase the workforce capacity could be very different, but it doesn't matter what combination of bots you're buying. Every time you bought a bot, like Jamie said, every board is doing only one thing, but does it very well. And they can shave some time from the agent work. So every bot will create incremental capacity. And eventually, as you get more and more bots, you increase the capacity. So the 10% reduction in the workforce is not a goal. It's just a data point. Some customers will get their faster, others will get there slower, but it's also not the endpoint. I believe that over time, we will see actually even more than 10% increased capacity in contact centers. And I think the AI journey, again, it's just the beginning. So very important, maybe glad you can discuss now what is assumed in terms of that increased capacity? What's assumed in the guidance or targets we take for fiscal '27?

Yes. Sure. And I'll -- just want to reiterate that goal and getting to the double-digit revenue growth. It is on the back, and it's driven by that rate of AI adoption. But as the teams have highlighted here today, it doesn't start with an immediate reduction of the workforce, right? It's starting today with that augmentation of the workforce to handle today's volumes and do so in a better way. But to answer your question, Dan, we've only -- we've been conservative. We've assumed a couple of points of a reduction in the overall agents that we have, that 4 million agent installed base. And we will and intend to provide some metrics to you and our investor base over time to show what is the rate and progress probably on an annual basis, we'll once again reference how does that 4 million agent-base look so that you have an idea, we also have some of the additional metrics that we will be using SaaS ARR, as I mentioned, the concept of bundled SaaS revenue growth our free cash flow growth all stem from, once again, this rate of AI adoption.

Next question is how are bots priced...

So Bots priced by volume essentially or by consumption. So the more bots you use, the more interactions that you send to about, the more you pay for them. And you don't pay for interactions that the box don't influence. So very often, our customers will start small. Maybe they'll start with an individual bot, maybe they'll allocate it only to 10% of agents or the coaching bad example that Dan gave. Maybe I just want to coach the lower tier of my agents and get them to productivity. So I'm going to deploy the coaching but across 50% of my agents, 20% of my agents or on 10% of my interaction. So you have a lot of flexibility in our ability -- in our bot pricing model that I can deploy them across the number of interactions or the number of agents that I believe those bots can positively influence the [ indiscernible ]. That's the main way. We also include bots in some cases, in applications. So when I buy the applications that might get a number of bots that then as I expand the usage of those bots, I'm going to pay more and more as well. So a variety of ways, but in general, it's always based on consumption and usage.

Next one on bots also -- of the 4 million agents you talked about how many are using bots?

So we've been selling Da Vinci AI now for 3 years. That's when we started to build the platform with Da Vinci AI at the core. So our AI experience and what we have deployed -- we've been deploying to customers is now, of course, many deployments. We brought all that Da Vinci capabilities into the core of the cloud platform, and that's really how we're taking customers now to the next level. And that's going to be our focus in the next 3 years. So we have lots of customers that already are using bots. As Grant said, we -- our experience so far is that they're using bots to avoid iring. So we haven't seen our customers actually reducing the number of agents, but we see many customers that have experienced interaction volume growth and they start to see deterioration in customer experience. And that was the impetus for bringing bots to actually increase capacity so they can avoid hiring. So we believe that over time, we're going to see as customers get more and more comfortable with bots working in this new workforce that they will dial up and down the people bots in a way that they can decide what is the best thing for their specific customers? Do they want to spend more of their agents time on building relationship on showing empathy and move some of the work over to automation. Or do they just want to continue with the same customer experience that they have today and just use the bots in order to replace agents. Those are choices that different customers will make as the AI starts to get deeper and deeper into the day-to-day of the contact center.

Next one is, how do you come up with the outlook for unbundled SaaS over the next several years, given the mix of customers migrating to bundled is inherently uncertain.

So I did a double-click on the unbundled SaaS, right? And as a reminder, there's really 2 inflows, right? New bookings for which we do not expect a lot to come from that pipe because nearly all of our new bookings are coming in the form of bundled SaaS. The second inflow is from that renewal base that we have. And this is getting to the answer to the question, we do a detailed waterfall of all of the customers' renewal contracts and when they're coming up for renewal, and we have a pretty good idea, certainly a great idea of when the contracts expire, but we understand, as we've seen customers don't need to migrate their current installed base to get our latest innovation, as Jamie mentioned. So we expect that level of conversion to be relatively modest as we've programmed this out through the 3-year model. And that's really the one outflow, which is the conversions that I highlighted. Now in terms of what happens if the level of conversion goes a little bit faster than what we've modeled, it's good. In fact, it's great for us. There's an uplift, 2x uplift on customers when you move from unbundled to bundled. It drives free cash flow growth, it drives our bundled SaaS growth. So we look forward to that. But right now, we have a pretty good handle on what we think will happen over the next 3 years, and it's embedded in those numbers I shared.

Next question here is, you mentioned a few AI tools from other companies that you include in your solutions, what situations do you use your own proprietary AI versus external tools?

So our philosophy is pretty simple. We choose the best model depending on the accuracy, performance, price that's required for the specific outcome. Now as we've talked about throughout the day, Da Vinci is open, which allows us really to take advantage of the latest commercial open source proprietary AI models that meet that criteria. As I talked about earlier, the bot factory, this is where we build and train the models. And we optimize them to drive the best outcome based on the best cost profile. Now GenAI is not free, the models are the infrastructures they cost. And as I talked about earlier, we truly believe that there is no one GenAI model that rules them all. So our customers rely on us to use the bot factory in order to create the best model that delivers the best outcome. Now just to give you an example, we built our own classifier to determine CSAT based on transcripts or survey transcripts. And this is our own proprietary model that provides 20% more accuracy at a fraction of the cost that we get from Azure OpenAI. Now we understand that models are constantly evolving. And we consistently look at the right models to make sure that we've made the optimal selection to drive the best outcome that we're trying to achieve with that particular bot.

Rob. Next question. When we think about the initial fiscal '25 and longer-term fiscal 2017 targets, can you walk through some of the assumptions that went into the forecast? Longer sales cycles have impacted fiscal '24. Does this forecast assume these longer sales cycles continue, improve, et cetera.

So I would say in a nutshell, and Grant, maybe you can give more of the details. But right now, we're not assuming a better economic environment, but we are seeing better AI adoption, which is regardless -- and maybe even -- not regardless, maybe even driven by this economic environment because customers are really interested in AI. And as Steve mentioned before, we have 20% growth in pipeline that is driven by AI. We sold 9 out of the 10 largest deals -- SaaS deals in Q3 with bots. So while there's no assumption for change in economic environment, we are seeing definitely a pipeline. Increasing bundled SaaS booking, our bundled SaaS ACV booking has increased in the first 9 months, and it's all driven by AI, which we expect to continue. And Grant, why don't you just give more assumptions on the 3-year targets.

So as Dan highlighted, right, all of those assumptions, the leading indicators that we highlighted, pipeline being up 20% year-to-year. That's all to support the bundled SaaS growth. And I -- in the 3-year models really went through 4 of the software revenue streams. Perpetual continues to remain flat, or unbundled, again, up modestly next year and then down slightly in the following 2, all on the back of, again, the waterfall of those unbundled renewals. Our support revenue, just modest declines that we averaged and then it comes all back to that bundled SaaS growth rate of greater than 20% each year for the next 3 years. And once again, what drives that bundled SaaS growth rate is all a matter of our customer adoption for AI and then more interactions starting to go through the bots once they've already established that in the account.

This one says, looking 5 years out, do you see Verint as a stand-alone player as part of a bigger tech company or somewhere else?

I can say that when I look 5 years out, it's definitely not going to be the same as the last 5 years. I think that it's not just Verint changing. I think it's the industry changing and changing dramatically with AI. I spoke earlier about this is a very labor-intensive industry, $2 trillion annual spend on labor and the customer experience is not what it's needed to be. So AI has the promise to solve both issues. You can reduce the cost of the labor and at the same time, elevate customer experience. And I believe that the industry, the way it's approaching the customers, the way the competitive landscape is going to be made up, it's going to be very different in the next 5 years. I also think that from a -- from our customers, the brand's point of view, when I speak to customers at the executive level, they all recognize that they need to increase customer experience. They need to elevate it. They want to delight their customers because they understand the power of the loyalty, the brand loyalty. They know that if they delight their customers, they will increase the revenue from these customers over time. So I think what we're going to see in 5 years is that it's not going to be about just labor reduction. It's going to be about a change in the the labor performance into more developing relationship, showing empathy, building partnership with customers over time, spending more time with customers and like today where agents are trying to finish the goal quickly so they can get to the next goal or next goal. So the bot will take a lot of that work of the agents and the agent will be able to do different things. We showed you before an example. This is a real example from today where an agent who is the help of Bots is actually identifying an opportunity that the customer sentiment is positive and the upsell to the customer an accessory, these things, making the contact center agents, not just responding to problems but also turning every call into a revenue opportunity is all part of that vision that I have for the next 5 years for the industry. So a lot of the landscape is which focused on telephony and starting to build Contact center around telephony the core is definitely shifting to being -- building Contact center with AI at the core. And of course, data and AI go together as we explained. And with this kind of shift, it's really hard to say what's going to happen with consolidation. And what I think there are definitely a lot of vendors today, a dozen of vendors who offer telephony-type solutions. There are very few vendors that offer an AI-centric platform. And I think Varint has a very, very good future here to fulfill what is a really very, very urgent and strategic problem for our brands to close the engagement capacity gap by elevating customer experience and reducing the labor costs at the same time.

Next one is how should we think about the cadence of revenue, earnings and free cash flow growth over next year?

So thank you. We will give more guidance, obviously, in our fourth quarter earnings call and provide, as we always do, the sequential quarterly expectations, et cetera. However, I would tell you that we do expect a similar profile than what we saw this year with the fourth quarter being significantly higher in revenue and once again, the same reason and rationale for that. That waterfall of when our renewals for the unbundled SaaS are up, are going to drive our fourth quarter once again higher next year. But also just you can think about those revenue streams, as I mentioned, the bundled SaaS has a nice steady growth on the back of the new bookings, which come in over time. We recognize the revenue over time. So bundled SaaS is going to be growing sequentially each quarter thereabout. Perpetual going to be flat and the unbundled dynamics throughout each of the quarters, once again, will be based on that bottoms-up. And I'll give you the overall story at the end of our fourth quarter. But that's how we can kind of think about and model the quarters next year. For revenue and the cash is going to also follow, obviously, the revenue as well.

Thank you, Grant. We've got a couple of minutes left. I'm going to try to sneak in a couple of more questions before we run out of time. But for this next one, it says, are there any new products you're developing today that you're more excited about?

This question always -- the problem is what to choose, right? Because we're doing a lot. I'm going to go with the data insights spot. The data insight spot is a really novel use of generative AI, which is always fun to talk about. Our customers come to us and they say, "Look, Jamie, you have all this rich behavioral data flowing through Verint products, but they still struggle to get insight. Why? Because they have to go to their business analysts, they have to ask a business question and then they go away for 3 weeks to months. And eventually, they get the answer to that business question after much, much analysis, right? And why it's because understanding data deriving insight from data is still very difficult. So what do we do? We built the data insight spot, which lets a business leader, a manager, an executive, ask a question, ask it in the language of the contact center. How is my AHT different than my forecast. It produces. It looks at the data. It produces immediately a visual result, a graph, a video, a narrated text blurb that tells you what's happening in your data. This changes the rate at which they get the answer. So by the moment I think of the question, I'm now getting an answer and then I can potentially move on and do more and more question and then discover insights myself. Also, I might not know a question to ask. So the data insight spot is also looking at the data as it flows continuously through the platform. And it's highlighting and saying, this is an anomaly. This is different. These teams are performing very differently, and it's giving you highlights and helping you understand maybe you should look at this. Maybe there's something you need to dig into here. So that ability to go from question to insight in almost immediate time is what the data insight spot can deliver and what I'm so excited about giving to our customers.

So we've got 2 left lined up here. First one is does bundled SaaS conflict with channel partners?

No. Bundled SaaS is really very in delivering the Verint innovation in the Verint Cloud. And as we explained very clearly today, all these bots innovation is only available in the Verint cloud. However, we are a multi-cloud offering, so we can connect Verint Cloud with other partner clouds -- and we're an open platform. So our partner can choose any of the bots that they want to resell. And the way our partners deliver that to their customers is they can deliver something from their cloud and they can deliver Verint from the Verint cloud. But those 2 clouds are connected and it's all transparent to the end customer. So we see no conflict. We actually have our partners already selling in the Verint cloud. And they can also sell some of the Verint legacy product in the on cloud and sell some of the Verint new products, the bots, the AI innovation in the Verint Cloud, and it's all working as one cloud from an end-user point of view. And our partners are excited about it. They know that for them, it's very hard to take the Verint software and run it in their cloud because they can't keep up with the innovation in the same pace we do. We refresh software in our clouds every few weeks. Our innovation is moving very, very quickly, and we have a very large scale of cloud ops that puts that development into the cloud very quickly, where partners actually are not going to be able to keep up with that pace. But because we open and because we created the connections, they're able to show their customers a much faster pace for innovation by leveraging the Verint multi-cloud architecture.

And final question here is, how do you think about the implications of generative AI?

Another good one. Okay. So look, generative AI, honestly, is probably the biggest new AI innovation since the advent of neural networks. In one way, it's similar to AI historically. It's a tool. It needs to be honed on data. It needs to be designed specifically to understand the business outcome you're going for. It needs to be continuously trained because as Rob mentioned before, the best model today could be the next model is another model tomorrow. So you always have to consistently monitor their performance and accuracy and make them better and better so you can deliver those great business outcomes our bots do. Where generative AI is very different, though, is that it's the first time you really can simulate creativity. You can create new content that feels human-like in how they engage with customers, how they deliver those data insights I talked about. It feels like human responses and not machine responses. So what it says is not as predictable. It's more like managing humans in many ways. So you need to build governance around it to prevent hallucination. You need to train it to understand corporate policy. You need to help generative AI align to the needs of your organization much like you have to do with human employees. It used to be really predictable in many ways what AI would do. generate really changes the game and creates a much bigger need for governance around the responses, preventing hallucination and helping create an ecosystem that you get great human-like responses but also they align to your corporate policy.

Thank you, Jamie. Thank you Well, that concludes our Q&A session and our Investor Day. We appreciate your participation and hope you came away with a greater appreciation for the Verint story and our AI-powered open platform. And please don't hesitate to reach out at [email protected]. If you'd like to dive deeper on any of the topics that we covered today. But before we head out, if we have another minute in the spirit of the holidays, enjoy this entertaining video. Thank you very much for joining us today. [Presentation]