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  "documentTitle": "Verint Systems, Inc. (VRNT)",
  "authorId": "54_Spruce_Point_Capital",
  "authorName": "Spruce Point Capital Management",
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  "sourceTypeLabel": "Short seller",
  "presentationDate": "2019-05-23 00:00:00",
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  "pageNumber": 48,
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  "notes": "The slide highlights a specific accounting practice (contingent consideration reversals) as a red flag for management incentives and acquisition quality.",
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      "kind": "callout",
      "text": "Verint reporting increasingly large negative revaluations of M&A-related contingent considerations",
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      "text": "Changes in Fair Value: -$8.3M",
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      "text": "Buried in the notes to Verint's financial statements are details regarding the fair value of contingent considerations related to M&A. Startlingly, we note that management has begun to apply increasingly sizeable quarterly write-downs to its outstanding contingent consideration liability. These reversals reveal that management is rolling back its earnings projections for its recent acquisitions. At best, this suggests that Verint acquisitions consistently underperform management's expectations. However, we also note – troublingly – that contingent consideration write-downs flatter executive performance metrics by boosting earnings, giving management an incentive to acquire even underperforming businesses.",
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      "text": "Annual Contingent Consideration Reconciliation table showing FY15-FY19 data",
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      "kind": "title",
      "text": "Contingent Consideration Reversals Expose Acquisition Underperformance (Or Worse)?",
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