The customer is always right when it comes to the bottom line. The key to any growing business is keeping customers happy and coming back for more. Despite uncertain macroeconomic conditions, customer relationship management (CRM) companies like Salesforce Inc. NASDAQ: CRM are flourishing, especially with the addition of artificial intelligence (AI) tools. These companies are part of the business services sector. Here are three more companies that offer customer engagement solutions to help enterprises better accommodate their customers.
The company provides customer engagement and cyber intelligence solutions. Verint is transitioning over to a software-as-a-service (SaaS) recurring subscription plan. This transition causes revenues to dip initially but goes a long way with onboarding new customers in a challenging macroeconomic climate. Its products range from automating customer interactions, forecasting, optimizing workforce scheduling, and data and text analytics through multiple engagement channels, including social, chat, email and interactive voice response. The company has 35 AI-powered bots available on the platform, supporting four million agents worldwide to process 30 billion interactions annually.
The services seek to improve and automate the customer experience (CX) while growing efficiencies and reducing costs. Verint is seeing a significant increase in automated bots and customer AI adoption, with the SaaS pipeline up more than 20% YoY. Some of its customers include Microsoft Co. NASDAQ: MSFT, Humana Inc. NYSE: HUM and Lyft Inc. NASDAQ: LYFT. Check out the sector heatmap on MarketBeat.
Robust Q3 2023 metrics
On December 5, 2023, Verint reported its fiscal Q3 2024 earnings for October 2023. The company earned 65 cents per share, beating analyst estimates of 57 cents a share by 8 cents. Revenues fell 2.7% YoY to $219 million, bearing analyst estimates for $215.9 million. SaaS annual recurring revenues (ARR) rose 11% YoY. New SaaS ACV Bookings was $25 million or $100 annual run rate. The percentage of new ACV bookings, including bots, rose by 50%. Gross margins rose 100 bps YTD. GAAP cash from operations rose 19% YoY.
Verint CEO Dan Bodner commented about receiving over 30 million-dollar contract orders for the quarter. Three were in excess of $4 million to $20 million total contract value (TCV), "I'm pleased that each of these 3 large orders included AI-powered bots. In fact, 9 of our 10 largest bundled SaaS deals in Q3 included Verint bots. With respect to new logos, in Q3, we again added more than 100 new logos, including large brands such as CarMax, Louis Vuitton and Sky. Our objective with new logos is to have them expand in our cloud platform and purchase more bots over time."
Raising full-year fiscal 2024 guidance
Verint sees fiscal full-year 2024 EPS of $2.65 versus $2.62 consensus analyst estimates. Revenues are expected to rise or fall 2% or $892 million to $928 million versus $907.30 million analyst estimates.
Verint Systems analyst ratings and price targets are at MarketBeat. Verint Systems' peers and competitor stocks can be found with the MarketBeat stock screener.
Daily bull flag breakout
The daily candlestick chart on VRNT illustrates the daily bull flag breakout pattern. VRNT bounced off its bottom at $18.41 on October 30, 3023. The daily market structure low (MSL) breakout triggered above the $21.85 trigger. Shares staged a rally to $25.60 before the flag formed heading into earning. The earnings reaction was a gap triggering the daily bull flag. The daily 200-period moving average is at $31.49. The daily relative strength index (RSI) was under the 30-band for two months from September 6, 2023, through November 1, 2023. It eventually climbed up through the oversold 70-band. Pullback support levels are at $35.60, $21.84, $20.85 and $19.81
On the opposite end of the earnings reaction spectrum, Sprinklr shares plunged 33% on its fiscal Q3 2024 results. Its stock symbol, CXM, defines what the company specializes in customer experience management (CXM). Its platform enables customers to monitor social media interactions, track brand mentions, respond to customers and gauge social media sentiment. Its multichannel engagement through email, chat, social media and text enables a unified CX. Its data gathering and analytics help businesses to measure and improve CX initiatives. Despite a solid earnings report, shares were pummeled by concerns of slowing growth.
Strong fiscal Q3 2025 earnings report
On December 7, 2023, Sprinklr reported its fiscal Q3 2024 adjusted EPS of 12 cents, beating analyst estimates of 7 cents by 5 cents. Revenues rose 18.5% YoY to $186.33 million, beating analyst estimates of $180.42 million. Subscription revenue rose 22% YoY to $170.5 million. Free cash flow generation was $15.9 million. Remaining performance obligations (RPO) and cRPO were up 34% and 19%, respectively. The company grew $1 million in customers by 15% YoY, adding 123 new clients.
In-line guidance
Sprinklr provided in-line guidance for fiscal Q4 2024 for the period ending January 2024. The company sees EPS of 8 cents to 9 cents versus analyst estimates for 8 cents. Fiscal Q4 2024 revenues are expected to be between $187.5 million and $189.5 million versus $188.32 million estimates. Non-GAAP operating income is expected to be between $20.3 million and $22.3 million. Non-GAAP gross margins were at 83%
Sprinklr guided the fiscal full year 2024 with total revenues between $725.5 million and $727.5 million. Non-GAAP operating income is expected to be between $80 million to $82 million. Non-GAAP EPS is expected between 36 and 37 cents.
CEO insights in AI
Sprinklr CEO Ragy Thomas commented that he believes AI will improve productivity by 30% to 40% in the next five years, and data is needed to train AI models effectively. Customers executed over 170 AI deployments in the quarter, from auto speech recognition, advanced intent detection, speech-to-text models, and agent assist features like smart responses and Generative AI enablement. After meeting with over 70 customers globally, he concluded that while clients are excited about AI, they want practical and measurable results now.
Thomas stated, "This is what Sprinklr is doing for them. For example, one of our leading telecom customers using Sprinkles conversational AI bots and AI routing achieved over 90% improvement in the response time and more than 60% reduction in average case handling time after enabling our chatbot. One of our luxury goods customers has seen a 25% improvement in their CSAT score, along with a 50% reduction in their average handling time using Sprinklr's conversational analytics product."
Loose lips sink ships and stock prices.
Sprinklr's CFO revealed that the fiscal 2024 goal was to scale Sprinklr Service rapidly as operating margins grew more than 1,000 bps and revenue grew 18%. Now that it's at scale, they will "refocus" their go-to-market efforts to better align resources to product suites. They expect it will take several quarters for the full impact to work its way to the P&L. This will result in 10% YoY revenue growth, down from the 17% forecast in fiscal year 2025. This was from some large customer churn, downsizing with enterprises and losing a few large pipeline deals. That caused the stock to collapse by more than 30%.
Sprinklr analyst ratings and price targets are at MarketBeat.
Daily gap fill
The daily candlestick chart on CXM looks horrifying as shares gapped down over 30% in response to its fiscal 2025 revenue guidance cut. Ironically, the gap down actually completed a gap fill that occurred on March 30, 2023, on a bullish earnings report reaction. The daily MSL trigger is at $10.41. The daily RSI collapsed in one fell swoop under the oversold 30-band level. Tax loss selling is causing shares to stay depressed. Pullback support levels are at $10.98, $10.41, $9.58 and $7.73.
Braze offers a customer engagement platform that enables enterprises to optimize customer engagement, interactions and experiences. Users can automate workflows, analyze customer data and personalize customer journeys. Its recent fiscal Q3 2024 earnings report was a blowout as it raised forward guidance. MarketBeat featured the company with the potential for a 30% upside move in the stock.
Firing on all cylinders
Braze released its fiscal third-quarter results on December 6, 2023. Revenues grew 33.3% YoY to 124 million, beating the $117.3 million consensus analyst estimates. The remaining performance obligations (RPOs) were $560.1 million. GAAP gross margins rose to 70.7%, up from 69.7% YoY. The company added 2,011 more customers, with 189 annual recurring revenue (ARR) of at least $500,000. Non-GAAP EPS was a loss of 5 cents, which beat analyst estimates by 8 cents. The company recorded notable wins, including FabFitFun, Mythical Games, Papa John's UK and Sonos.
Upside guidance
Braze provided upside fiscal Q4 2024 EPS guidance for a loss of 4 cents to 5 cents versus consensus analyst estimates for a loss of seven cents. Revenues are expected between $124 million to $125 million versus $119.89 million consensus analyst estimates. Fiscal full-year 2024 EPS is expected to have a loss of 26 cents to 27 cents versus analyst estimates for a loss of 37 cents. Revenues are expected between $465 million to $466 million versus $454.10 analyst estimates.
Braze CEO Bill Magnussen commented about their Canvass LLM and AI experimentation, "Extending on our experimentation with custom trained models; we are also very excited by our work in channel-specific message content recommendations paired with a growing ability to automatically predict which variants are likely to perform best using custom trained predictive transformer models." He continued, "By providing these predictions before launching a canvas or campaign, we intend to increase marketer velocity further, encourage more creative risk-taking, And free up time that can be spent on further experimentation with deeper personalization techniques."
Braze analyst ratings and price targets are at MarketBeat. BTIG reiterates its Buy rating on BRZE with a $75 price target.
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