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  "documentTitle": "Verint Systems, Inc. (VRNT)",
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  "authorName": "Spruce Point Capital Management",
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  "notes": "Uses a combination of narrative critique and a direct excerpt from the 10-K to highlight accounting aggression.",
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      "kind": "callout",
      "text": "“Cloud revenue primarily consists of SaaS and managed services revenue recognized over time and term-based licenses, which are recognized at a point in time.”",
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      "text": "Is management being aggressive in its accounting definition of “cloud revenue ” to inflate what investors would believe to be true “cloud-based” revenue?",
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      "kind": "callout",
      "text": "Is management being aggressive in its accounting definition of \"cloud revenue\" to inflate what investors would believe to be true \"cloud-based\" revenue?",
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      "text": "As is the case for most SaaS companies, the tacit benefit of “cloud” revenue for Verint is that it is in some sense recurring. However, we note that, per its 10-K, Verint includes in its definition of “cloud revenue” revenue from “term-based licenses” – i.e. revenue from contracts with fixed durations (typically three years for Verint). Many industry experts with whom we spoke do not consider such revenue to be “recurring” as it is generally understood with respect to cloud revenue, where “recurring” is generally used to describe subscription-type arrangements with no fixed life. Even further, many of these same experts do not even regard Verint as a true “cloud” company, as its “hybrid” cloud solutions are not truly versionable cloud-based SaaS services, but are better described as “off-premise.”",
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      "text": "Cloud revenue primarily consists of SaaS and managed services revenue recognized over time and term-based licenses, which are recognized at a point in time. — VRNT FY19 10-K",
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