Alan Roden – Senior Vice President, Corporate Development Dan Bodner – Chief Executive Officer and President Doug Robinson – Chief Financial Officer.

Nandan Amladi – Deutsche Bank Dan Bergstrom – RBC Capital Markets Shaul Eyal – Oppenheimer Jeff Kessler – Imperial Capital Daniel Ives – FBR John Weidemoyer – William Blair and Company.

Hello everyone and welcome to the Third Quarter 2016 Verint Systems Incorporation’s Earnings Conference Call. At this time, all participants are in listen-only mode. And we will facilitate a question-and-answer session towards the end of this call.

[Operator Instructions] And now I would like to turn the call over to Alan Roden, Senior Vice President, Corporate Development..

Thank you, operator. Good afternoon and thank you for joining our conference call today. I’m here with Dan Bodner, Verint’s CEO and President; and Doug Robinson, Verint’s Chief Financial Officer. By now, you should have seen a copy of our press release that includes selected financial information for our third fiscal quarter ended October 31, 2015.

Our Form 10-Q will be filed shortly. Each of our SEC filings and earnings press releases is available on the Investor Relations link on our website and also on the SEC website.

Before starting the call, I’d like to draw your attention to the fact that certain matters discussed on this call may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 and other provisions of the Federal Securities laws.

These forward-looking statements are based on Management’s current expectations and are not guarantees of future performance. Actual results could differ materially from those expressed in or implied by 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 more detailed discussion of how these and other risks and uncertainties could cause Verint’s actual results to differ materially from those indicated in forward-looking statements, please see our Form 10-K for the fiscal year ended January 31, 2015 and other filings we make with the SEC.

The financial information discussed today is primarily non-GAAP. A reconciliation of the non-GAAP financial measures to GAAP measures is included in today’s earnings release as well as under the Investor Relations link on our website.

Non-GAAP financial information should not be considered in isolation or as a substitute for GAAP financial information, but included because Management believes it provides meaningful, supplemental information regarding our operating results when assessing our business and is useful to investors for informational and comparative purposes.

The non-GAAP financial measures the Company uses have limitations and may differ from those used by other companies. Now, I’d like to turn the call over to Dan.

Dan?.

Thank you, Alan. Good afternoon everyone, and thank you for joining us to review our third quarter performance. In Q3, we delivered $285 million of non-GAAP revenue, and diluted earning per share of $0.82 excluding non-operating foreign exchange charges.

Fluctuations in foreign exchange rates continued to affect our results and therefore we will continue to discuss our results on a constant currency basis. Year-to-date, on a constant currency basis, our revenue increased 5% compared to the prior year. In Q3, our revenue came in lower for reasons we’ll discuss shortly.

At the same time, we’re pleased to report strong operating margins of 22.1% driving $69 million of adjusted EBITDA. Verint is a leader in actionable intelligence solutions with more than 10,000 customers in the area of customer engagement optimization and security intelligence.

Verint’s leadership has been driven by a history of rapid growth for innovation and strong execution. Over the last several years, we have made investments that have expanded our portfolio significantly, increased our total addressable market, or TAM, and made us a more strategic vendor to our customers.

Earlier this year, we discussed our ability to offer customers best of breed solutions as well as a comprehensive solution set for transformation of projects. During the third quarter, we continued to win some large projects, which demonstrated the demand for comprehensive solution sets. At the same time, we continued to see longer approval cycles.

Later, I’ll discuss certain adjustments we’re making to our go-to-market strategy designed to drive faster adoption of our best of breed portfolio and reduce our dependency on the timing of large projects. Now, I’d like to discuss some Q3 highlights, starting with customer engagement optimization.

We believe that forward thinking enterprises are looking to address evolving consumer expectations by transforming their customer engagement operations.

Our strategy is to enable enterprises to transform by offering the market an integrated and open actionable intelligence platform combined with the industry’s broadest portfolio of best of breed solutions. We believe that some enterprises are planning to transform rapidly, while others are taking a more gradual approach.

During the quarter, we received many orders for our best of breed solutions as well as several large orders for a comprehensive solution set. Here are some examples. We were awarded nearly $20 million project from a leading outsourcer following a very long sales cycle.

By selecting Verint as a strategic vendor and taking a platform approach, this outsourcer is better positioned to improve workforce productivity and customer engagement, standardize business processes, and enhance operational efficiency.

This $20 million order is one of the largest enterprise orders we’ve ever received and the solution will be deployed in the cloud with managed services and support components deployed over several years. This order demonstrates our ability to win large transformational projects, although with longer sales cycles.

We also received approximately $3 million in orders from a pharmacy retailer in connection with its ongoing rollout of a customer engagement portfolio, bringing total orders from this customer to nearly $10 million since the beginning of last year.

Approximately, $3 million in orders from a government agency as part of a program to use Verint’s platforms to improve customer service and citizen communications bringing total orders from this customer to nearly $5 million since the beginning of this year, approximately $2 million in orders from a leading provider of residential mortgage services.

This customer has already deployed multiple Verint applications and is extending the Verint platform by adding speech analytics to help reduce customer complaints and comply with industry regulations, and approximately $2 million in orders from a leading insurance provider.

This customer previously had a multi-vendor environment and we’re replacing multiple point solutions from another vendor with Verint’s platform. We believe these large orders reflect a desire from organizations to work with a strategic vendor to transform their customer engagement operations.

They also reflect our growing portfolio and the progress of our land and expand strategy. In Q3, our enterprise segment revenue growth was up slightly on a constant currency basis, reflecting long approval cycles associated with large transformational projects.

Looking forward into next year, we believe growth rates will improve due to adjustments we are making to our go-to-market strategy that will enable our sales force to close deals faster and minimize the impact of longer approval cycles.

With this adjustment, we continue to expect multiple large deals in our fourth quarter, but we also expect an increase in the numbers of orders from customers who choose to purchase and deploy more gradually.

We believe Verint’s expertise and Actionable Intelligence can help enterprises to transform customer engagement successfully and position us well for long-term growth.

Turning to the security intelligence area, we offer an Actionable Intelligence platform combined with a broad portfolio of Security Intelligence solutions to address a variety of security threats around the world.

We believe that our domain expertise in Communications Intelligence and Cyber Intelligence is unique and positions us well with differentiated capabilities.

During the quarter, we received a number of large orders including more than $15 million in order from an existing customer, close to $10 million in orders from another existing customer, and two other orders each in excess of $5 million from new and existing customers.

We believe these large orders reflect a broad, highly innovative security portfolio, and our ability to help organizations address both traditional and emerging security threats. Turning to cyber intelligence and security, our primary focus continues to be on the government sector along with an early stage move into the enterprise sector.

In government, we see customers interested in deploying a Cyber Intelligence platform that is capable of addressing multiple types of threats. In enterprise, we see customers interested in taking a more intelligent approach to Cyber Security.

To address the enterprise market, we’re pleased to announce that during the third quarter, we entered into agreements with two MSSP providers, one in America and one in Asia-Pacific. MSSP, or managed service security provider, is one of the fastest growing areas of enterprise cyber security.

Driven by increased threats of sophisticated attacks coupled with the shortage of qualified cyber analysts, enterprises of all sizes are increasingly looking to outsource their Cyber Security operations to MSSPs that deployed the latest Cyber Security technologies.

Looking ahead, our cyber go-to-market strategy for the enterprise market consists of both direct and indirect sales including partnerships with MSSPs in multiple countries. Our strategy for the government markets includes offering a combination of our Cyber Intelligence and Cyber Security capabilities as a highly differentiated solution.

We set our Security Intelligence solutions to many government agencies worldwide, including in many countries that are part of the emerging market sector. Last quarter, we discussed uncertainty related to large projects as we saw potential budget constraints and project approval delays in certain countries due to difficult economic environments.

Accordingly, we have adjusted our go-to-market strategy and have started to offer more entry level packages to customers that are affected by an economic slowdown, but need to innovate to address more immediate threats.

Overall, we believe that organizations around the world are seeking innovative solutions to address both traditional and emerging security threats and we are meeting this demand with a broad portfolio of innovative applications. In summary, we believe we’re well positioned for long-term growth in both enterprise and security intelligence.

I would now like to provide an update to our guidance. We started the year with double digit constant currency growth expectations, assuming we would see an increase in large projects in both customer engagement and security intelligence.

With three quarters of the year behind us and achieving 5% growth year-to-date, we’re now adjusting our growth expectations for the current year to around 5% on a constant currency basis. At the same time, we continue to maintain our operating margin target of between 22% to 23%.

Looking ahead to next year, while it’s too early to provide guidance, on a preliminary basis we are assuming a similar level of revenue growth and some margin expansion, driving earnings faster than revenue. And now let me turn the call over Doug..

Yes, thanks, Dan. Good afternoon everyone. Most of our discussion today will focus on non-GAAP financial measures. A reconciliation between our GAAP and non-GAAP financial measures is available, as Alan mentioned, in our earnings release and in the IR section of our website.

Differences between our GAAP and non-GAAP financial measures include adjustments related to acquisitions, including fair value revenue adjustments, amortization of acquisition-related intangibles, certain other acquisition-related expenses, stock-based compensation, as well as certain other non-cash or non-recurring charges for certain metrics that also includes adjustments related to foreign exchange rates.

I’ll start my discussion today with the areas of revenue, gross margin and operating margin. In the third quarter, we generated $285 million of revenue across our three segments with $161 million in Enterprise Intelligence, $95 million in Communications Intelligence, and $29 million in Video Intelligence.

This compares to $289 million of total revenue in the third quarter of the prior year with $172 million in Enterprise, $93 million in Communications, and $24 million in Video. In terms of geography, in Q3, we generated $153 million in the Americas, $83 million in EMEA, and $49 million in APAC.

This compares to approximately $153 million in the Americas, $97 million in EMEA, and $39 million in APAC in the third quarter of last year. Given the recent foreign exchange movements, we’d like to discuss our revenue on a constant currency basis to help investors better understand the underlying operational performance of our business.

In that regard, on a constant currency basis, our revenue Q3 would have been approximately $298 million, or $13 million higher. Q3 gross margins increased approximately 2 percentage points to 67% from 65.3% in Q2.

As we discussed in the past due to the products, services and revenue mix within or across segments, overall gross margins can fluctuate significantly from quarter-to-quarter. Notwithstanding, we’re pleased with our sequential improvement in gross margin in Q3 and expect another sequential increase in Q4.

During the third quarter, we generated operating income of $63.2 million with an operating margin of 22.1%. Our adjusted EBITDA for the quarter came in at $69.4 million, or 24.3% of revenue. Now let’s turn to our other income and interest expense.

In the third quarter, other expense net totaled $8.3 million, reflecting $6 million of interest expense and $2.3 million loss from foreign exchange driven primarily by intercompany balance sheet translations. Our cash tax rate was 8.7%.

As we’ve discussed previously, we expect to enjoy a low cash tax rate for several years due to our NOLs and the amount of income we generate and low tax rate jurisdictions. For the quarter, we had $62.8 million average diluted shares outstanding.

These results drove diluted EPS of $0.78 or $0.82 when excluding the $2.3 million non-operating foreign exchange charge. Now turning to the balance sheet, as of October 31, 2015, we had approximately $385 million of cash and short-term investments including restricted cash.

First nine months cash flow from operations on a GAAP basis came in at $88 million similar to the $90 million we generated in the first nine months of last year. We ended the quarter with net debt of approximately $426 million, excluding discounts primarily associated with our convertible debt.

Before moving to Q&A, I’d like to discuss our current guidance for the year ending January 31, 2016. Our revenue guidance is a range of $1.15 billion to $1.19 billion. On a constant currency basis, this translates to a range of $1.192 billion to $1.233 billion of revenue.

Our revenue guidance reflects around 5% year-over-year constant currency growth at the midpoint. We expect to deliver between 22% and 23% operating margins for the year at the midpoint of our revenue guidance. We expect our quarterly interest and other expense excluding the potential impact of foreign exchange to be approximately $6 million.

Given the continued volatility in foreign exchange rates, there could be a gain or loss related to balance sheet translations in our future results, which is not included in our guidance. We expect our non-GAAP cash tax rate to be approximately 9% for the year, reflecting the amount of taxes we expect to pay this year.

Based on these assumptions and assuming approximately 63.1 million average diluted shares outstanding for the year, we expect EPS at the midpoint of our revenue range to be $3.30.

Looking ahead to next year on a preliminary basis we are assuming a similar level of revenue growth next year of around 8% on a constant currency basis, while maintaining our long-term target of double-digit revenue growth. From an earnings perspective we expect some margin expansion next year which will drive earnings faster than revenue.

In conclusion, we’re pleased with the expanding portfolio of Actionable Intelligence solutions and strong competitive position and believe we’re well positioned to sustain long-term growth. This concludes my prepared remarks.

With that operator can we open up for questions?.

[Operator Instructions] First question comes from Nandan Amladi from Deutsche Bank..

So Dan, the first question is on the sales cycle and this is a question that I’ve been getting frequently, and this started from your commentary on the last earnings call. You are selling a broader suite and I guess some of the extended elongation in the sales cycle could be attributed to that.

But between selling a broader suite and sales cycle extending because of that versus sales cycle extending simply because the purchasing environments perhaps getting a little bit softer.

Can you explain that a little bit in – a little bit more nuanced way?.

Yes. So I think that the market is still very strong, and we see that in our pipeline, we have strong and growing pipeline, but it took us a couple of quarters to identify the trend but we now believe that the trend longer approval cycles for large project is what’s causing our pipeline to – not to close as fast as we expected.

So kind of to put things in perspective, last year we announced that we are expanding our TAM to $8 billion through expanding into adjacent market. And the strategy was land and expand, we discussed the fact that we have a very broad portfolio of better-breed solutions, and we also have a large customer base.

We acquired KANA and we got their customer base. So we saw a great opportunity to land and expand within the customer base and as well as new customers. And it actually worked very well for us last year where we achieved double-digit organic growth as we were executing on this land-and-expand strategy last year.

At the beginning of this year, we heard from customers that they would like to move faster through a transformation, and we decided that rather than just sell best or great solutions – point solutions, we also take advantage of the fact that we have a suite and we will package together offering for customers that could get it faster toward transformation, and customers showed a lot of interest in that and we felt this also will accelerate our revenue growth, and therefore our go-to-market strategy and – it was in favor of large projects and our sales force was engaged with many customers on discussing large transformational projects.

What became clear to us now after a couple of quarters of looking at the trends is that while our customers are very interested in working with vendors that have a broad portfolio and moving faster towards transformation, the approval cycle does take longer, and when they approach management, they need to go back and defend the proposal and go through a long explanation and so forth.

So we attribute this to perhaps an industry trend, perhaps the software industry now -- customers because of the cloud are more used to smaller projects, but clearly we see now that as a trend and what we are doing is we’re adjusting our go-to-market strategy to a more balanced approach.

We do have best of breed solution and we can help customers go through a gradual transformation, and we believe that this adjustment will eventually get customers exactly where they want to be, but rather than buying like we announced today a $20 million deal which I think is a great example of those deal exists where customers decide to spend $20 million in one order, but also this was a deal that took over a year with very long approval cycle.

So rather than that, we can certainly land and expand through our customer base in a more gradual manner. And we think that this new adjustments will kick in, in a couple of quarters and will help us improve the growth rate in our enterprise market..

Great. And a follow-up if I might on the cyber security side. You laid out a pretty broad vision at your Analyst Day a few months ago.

Can you characterize how you saw the market at that point relative to both the government side and probably more interestingly the enterprise side? And how that’s evolved and how do you see it today?.

We still see the same trend in both government and enterprise toward intelligence platform, taking an approach of not just prevention, but achieving advanced threat protection through a methodology of collecting big data, analyzing big data, understanding the insights, and being smart about the cyber threat.

We certainly believe that this is – this trend is intact. I think in the government side, it’s more obvious to customers now that cyber intelligence is something that they can be leveraged into addressing a number of different threats including protecting their own networks, but also identifying through intelligence, different threats.

So we certainly have their unique position of providing a platform that has multiple intelligence applications for cyber intelligence. The enterprise, as you said is something more interesting.

I think there, what we discussed in Investor Day, is that we think we have a differentiated product, but we also realized that we are going to have to invest in a sales force because we do have the government sales force that has been successful with government customers for many years and relative to the IT security, we need to hire people that come from that market.

So we’ve been hiring and building that sales force, but we also since then realized that the MSSP, the managed service security providers, are actually getting stronger because customers are more interested now in outsourcing some of these security operations to organizations that are specialized in that.

I think it’s a combination of the fact that there is a shortage in the market for cyber analysts and it’s very difficult for enterprise to hire their own team, and they also feel like that’s a domain expertise that in some cases they’d rather get from the outside.

So is the trend of MSSP getting stronger, we’ve also noticed that the MSSPs, they are competing with each other are trying to differentiate based on advanced technology. And that’s a win-win situation for Verint and for MSSPs. We can provide them an intelligence platform that they can use not just with one customer but actually in the cloud.

On a cloud basis they can use it with in many customers. And our approach going forward is going to be a hybrid approach. We’re still going to leverage direct sales force for direct sales, but we also increasingly going to sign up MSSPs as an indirect channel.

And we’re pleased that in Q3 we signed up two MSSPs, one in the Americas and one in Asia-Pacific..

Thank you..

Next question comes from Dan Bergstrom from RBC Capital Markets..

Yes, thanks for taking my questions. Say on the Security Intelligence side, could you talk about the mix of business coming from existing and new customers? I think most of the larger deals are existing customers, but you pointed out several new over the past couple of quarters.

What’s driving the new customers to you?.

Yes. So like we announced today several large deals, one of them was $5 million from a new customer. So they – history we have in the government market is that they develop confidence in the vendors over time.

So their initial purchase could be a couple of million dollars in the small projects and then they would be buying again and again over many years. But it’s a market we’ve been in many years. It does take to create relationship and credibility with government agencies.

They are more selective relative to the vendors that they invited to participate in bids. And therefore historically we generated more revenue from existing customers.

But we see that the technological challenges that our customers are facing are ever-changing so even our existing customers that have been with Verint many, many years are still buying new solutions because of new technological challenges.

And I think we all hear in the news our encryption – communication encryption is creating a great challenge to intelligence organizations.

And of course it’s a challenge but it’s also an opportunity for vendors like Verint to innovate and create solutions that address that the challenge and allowing in terms of organization to still be in business while the bad guys are tending to use more and more encrypted solutions..

Thank you..

Next question comes from Shaul Eyal from Oppenheimer..

Thank you. Hi good afternoon guys. Couple of quick questions on my end. Dan I want to try and stay just for a second on the enterprise security front. So on the total protection system, the one launched back in early June, and I know you guys have indicated a number of wins over the course of the past few months.

Do you see further wins during the third quarter?.

Yes, we did. As discussed in Investor Day and on the last call, we see that as a long-term opportunity. We did target to get a number of customers this year, which – we are on target. But more importantly is our ability to expand the sales force and to drive sales broader into the market.

And we want to do that not just in one country but in a few countries. So we have now targeted several countries where we are developing the pipeline.

And again considering the fact that investment in sales force could be very expensive, the emergence of MSSP as a channel is obviously interesting for us and that’s one of the things we’re emphasizing now, because we think that hybrid model of direct and indirect sales force representing MSSP could be a good cost effective way to address the market..

Got it.

Couple of weeks ago, we have all unfortunately witnessed the tragic event in Paris, do you see that down the road maybe I should ask differently, have you guys started to see at least some growing interests from some government agencies following what we have seen in Paris couple of weeks ago?.

Yes and that’s pretty typical, we’ve seen that also after similar attacks in the past in London, Mumbai and others. You know there was also interesting enough there was a trade show in Milipol that was in Paris shortly after the attack.

And there was a lot of interest in Milipol relative to the type of solution that it can generate intelligence that was clearly lacking in that attack. Yes, I think that the terrorist attacks are generally, I think, it’s a reminder.

But I believe also that our customers are clearly aware that the security threat is getting bigger that the terrorists and criminals are trying to leverage communication channels that are less obvious. And that creates constantly new challenges and new opportunities for Verint to innovate and deliver new solutions..

Got it. And maybe just a final one if I may. I think for the benefit of everybody because I have been receiving couple of emails. Doug, on the fiscal 2017 guide, I thought you heard probably similar to this year 5% growth in constant currency. I think that you mentioned something to the effect of 8%.

So just may be you can help us clarify that point?.

Yes, sure Shaul. Yes, so our base assumption is at this point revenue growth similar to this year, so that’s the 5% constant currency. We did – I did mention a few minutes ago we expect some margin expansion.

I think when you look below the line then at interest being similar kind of a $6 million a quarter we’re seeing tax rates up, maybe slightly, share count up slightly. For those of you modeling this out that should drive EPS probably somewhere in the neighborhood of $3.50 for next year on preliminary basis..

Got it, okay thank you so much..

Sure, Shaul. Take care..

Next question comes from Jeff Kessler from Imperial Capital..

Thank you.

Could you please discuss a little bit about the increase in gross margin, was it mix that did it, or obviously – or was it just being more efficient? In other words going forward as you enter a hybrid sales approach, is that going to affect the way your gross margin ends up? And is it going to start or will it helps the improvement that you’ve been seeing in gross margin? And you’ve just said you expect a little bit more of improvement in overall margins for next year, in operating margins..

Yes, I think we – yes, I think we believe that gross margin should improve over time and that’s partially why we are targeting, operating margin expansion for next year. And I think that the gross margin improvement in Q3 is a mix and can fluctuate.

But as we go also into Q4 we expect another gross margin improvement in Q4, just because we also – Q4 is our biggest quarter and we have fixed cost. And as the revenue goes up, gross margin should go up. So near term Q3 was good improvement because of mix Q4, we expect another improvement in longer term.

We expect modest improvement that can help drive better operating margins.

Okay. One other question and that would be you’ve talked in somewhat general terms about filling in the holes and the lumpiness. You are obviously getting good conversations going on some of these larger projects, particularly at the new enterprise as well as ongoing government security projects.

Is it your intention to have a channel or the MSSPs fill in those periods of lump – the low periods of lumpiness, or do you think that they will be truly – is it going to be additive or is it just – is it going to be a way for you to smooth out the revenue lumpiness a bit..

Yes, so I think they will be additive and I think that will help smooth the lumpiness. We’re looking for both. As part of adjusting the go-to-market strategy, as I mentioned before, we clearly see the trend within Verint, but we also think it’s an industry trend and those customers really have preference to just bite in smaller chunks.

That preference can be driven by a lot of different reasons. But if you look at Verint strengths 50% of the business that we’re generating is from a one million plus projects. And 50% is from projects that are less than a million. So I think we already have a pretty broad customer base.

And we already have many channels that are focused on kind of smoothing, the growth. But we are also very good at getting security and delivering on one million or plus deals.

What we saw this year, in the first three quarters that we get fewer deals that are one million plus than last year, and also the total value of those deals was less than last year.

So as we look at that fact you know why do we have fewer deals and why the value is lower than last year, we don’t see that we lost deal to competitors, we don’t say that the issue is that a [indiscernible], but we analyzed that in terms of many cases and just see that it takes too long for customers to make the decision when the budgets – when the numbers are big and the budget needs to be justified.

And so we will continue to see big deals because that’s our strength and that many customers will prefer to go with the big deals. But our sales force is going to have a more balanced approach. If the customers want a big deal we’ll be happy to help them. And if they prefer to buy a best of breed point solution, we’ll be equally happy to help them..

Okay.

Are you confident enough in your cut – in your own – in your existing relationship so that you’re not worried about customer touch things like that, being lost a little bit as you move toward the third-party or the channel partner?.

No, because we also have to-date 50%. It’s happened to be there’s also 50% of the business gets indirect already. So we’re not trying to shift the business to be a way more indirect, but I think we can continue to grow the direct and indirect channel. And in some cases, the indirect channel is very effective.

In the case of Cyber Security, we think MSSPs will be very effective. We also have many, many cloud partners that are very effective for us to go after the SMB market, which is a market that is very underpenetrated for Verint.

So there are areas where channels are extremely effective and there are areas where we – especially more innovative large government projects where we – where we are executing better on a direct approach..

Okay, thank you very much..

Sure..

Next question comes from Daniel Ives from FBR..

Yes, thanks.

Dan, if I look back to last 12 months, what do you think as maybe strategic misstep or if there’s been a miscalculation and now you’re trying to change?.

Yes, I think the land and expand strategy, I think, is right and we’ll continue to pursue that because we think that our customer base is not penetrated. And we got many, many solutions in our portfolio that we can sell over time.

I think where we missed is on the assumption that we can accelerate growth by packaging point solutions together and creating large transformational projects. I think we were led to believe by many customers that this is their preference.

And I think customers actually were very sincere about it and quite surprised when they approached their management, and we’re finding difficulties to get approvals. So we missed that.

We believe that – now, we believe that that go-to-market strategy actually slowdown the sales force because the sales force had to spend a lot of cycles with customers to go back and reissue the proposal and reissue ROI documents and defend the deal just to go back to do it again and again.

And we know that sales force effectiveness is in closing the deals faster. So going forward, we think that to correct that miss, we’re adjusting a more balanced approach. The sales force when they – obviously one of the strengths of Verint is our largest portfolio. Customers really like the fact even if they buy only one point solution.

They truly love the fact that Verint has many other point solutions for a number of reasons. First, they don’t want to work with too many vendors. Second, they believe that over time if they buy the second and third and fourth solution in an integrated fashion, they can benefit from all the workflow integration that we’ve done.

And thirdly, Verint has the domain expertise. We understand more than just communities. We understand more than just knowledge management, more than just workforce management.

We do have expertise across the customer engagement team that helps customers to really understand not just about the problem they’re trying to solve now, but we really are consultative in our selling approach to help and think about how they’re going to solve the problems of tomorrow.

So customers like the fact that [indiscernible] in as a broad team as Verint, but at end of the day, if they can get approval for $0.5 million project for this quarter and another million next quarter and that’s great velocity in our sales process that that will make our sales force more effective and our numbers to improve much faster..

Thanks..

Next question comes from Jonathan Ho from William Blair and Company..

Hi. This is John Weidemoyer for Jonathan, who is traveling. Thanks for taking my question.

On your increase in approval cycles, is that – was that behavior consistent across geographies?.

So the geographical trends are intact, so we grew in all three geographies year-to-date. I think that the one thing that I will emphasize is emerging markets in the security area.

When I think about our guidance – our guidance reduction relative to where we started the year besides the FX issues, I would say that half of the guidance reduction came from the security side and half from the enterprise side.

And while in both cases, it’s attributive to a fewer large projects and large projects as we didn’t lose, but we didn’t secure yet and we have – we saw specifically in timing of securing those large deals, but in the security market it’s tied more closely to customers in countries where there is economic slowdown.

So what’s called the emerging market sector, countries that have been affected by all prices, commodity prices or other reasons that there was economic slowdown that created pressure on government budgets. So that’s the one area. The emerging markets countries for the securities sector that I would say has shown some geographical trend..

Thank you.

And then I just want to clarify when you mention the four large orders, the 50 to 10 and the two fives, were those all cyber deals or were some of those broader security deals?.

Those are broader security deals. I think many of them are Cyber Intelligence deals..

I’m sorry, so cyber was maybe part of them, but they were in general broader security deals?.

Yes, we don’t break by deal and in some deals we do get a combination of Cyber Intelligence and Communications Intelligence, but there are many Cyber Intelligence deals that we’re getting now on the government side..

Okay. All right, thank you very much..

You’re welcome..

I would now like to turn the call back over to Alan Roden for closing remarks..

I’d like to thank everyone for joining us tonight and for those who are attending the Imperial Capital Conference next week. We look forward to seeing you there. Have a great evening. Take care..