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In a move to secure its financial position, Verint Systems Inc. (NASDAQ:VRNT), a provider of integrated computer systems design services with a market capitalization of $1.36 billion and impressive gross profit margins of 71.5%, has entered into a significant amendment to its existing credit agreement. The company announced today that it has amended its credit facility, increasing the total commitments from $300 million to $500 million and extending the maturity date to March 25, 2030. According to InvestingPro analysis, Verint is currently undervalued and shows strong free cash flow yield of 11%.
This Fifth Amendment to the Credit Agreement, initially dated June 29, 2017, was agreed upon with the lenders and JPMorgan Chase (NYSE:JPM) Bank, N.A., serving as the administrative and collateral agent. This strategic financial restructuring now allows Verint to choose between an alternative base rate (ABR) and a Term Secured Overnight Financing Rate (Term SOFR) for borrowing, with margins varying based on the company’s leverage ratio. With current total debt of $447.54 million and a healthy current ratio of 1.32, the company maintains a stable financial position.
The revised terms under the Amended Credit Agreement stipulate that from January 7, 2026, the maturity date will be subject to acceleration if Verint fails to maintain a minimum liquidity level. This liquidity is defined as the outstanding principal amount of Verint’s 0.25% convertible senior notes due April 15, 2026, plus an additional $100 million, provided that more than $35 million remains outstanding (and not cash collateralized) under the Convertible Notes.
The Credit Agreement’s other material provisions remain largely unchanged. However, the lenders involved in this agreement, along with their affiliates, have previously and may continue to provide various financial services to Verint and its subsidiaries, for which they receive customary fees and expense reimbursements.
The details of the Fifth Amendment to the Credit Agreement are outlined in Exhibit 10.1 of the company’s SEC filing, which serves as the source for this information. This financial maneuver is expected to provide Verint with increased operational flexibility and a more robust credit structure to support its ongoing business activities.
In other recent news, Verint Systems has been highlighted by Needham analysts, who reaffirmed their Buy rating and a $40.00 price target for the company. Needham also added Verint to its Conviction List, indicating strong confidence in the company’s prospects for 2025. The analysts anticipate a recovery in contact center spending, which is expected to benefit Verint’s performance. Additionally, Verint’s focus on Subscription Annual Recurring Revenue (ARR) and Free Cash Flow (FCF) was emphasized during a recent virtual analyst day. Needham maintained its FCF estimate for fiscal year 2025 at $165 million and adjusted the forecast for fiscal year 2026 to $185 million. Verint’s strategy includes reducing higher-cost debt to improve financial health rather than increasing share buybacks. The company’s positioning in the Hybrid Cloud contact center space and its growth in AI Bot applications are seen as key factors for its future success. Verint is also set to hold its 2025 Annual Meeting of Stockholders on June 19, with a record date of April 30 for voting eligibility.
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