NET INCOME PER COMMON SHARE ATTRIBUTABLE TO VERINT SYSTEMS INC.

6 Months Ended

Jul. 31, 2019

Earnings Per Share [Abstract]

NET INCOME PER COMMON SHARE ATTRIBUTABLE TO VERINT SYSTEMS INC.

NET INCOME PER COMMON SHARE ATTRIBUTABLE TO VERINT SYSTEMS INC.

The following table summarizes the calculation of basic and diluted net income per common share attributable to Verint Systems Inc. for the three and six months ended July 31, 2019 and 2018:

	Three Months Ended July 31,				Six Months Ended July 31,
(in thousands, except per share amounts)	2019		2018		2019		2018
Net income	$	12,271	$	22,924	$	16,032	$	21,699
Net income attributable to noncontrolling interests	1,713		944		3,898		1,934
Net income attributable to Verint Systems Inc.	$	10,558	$	21,980	$	12,134	$	19,765
Weighted-average shares outstanding:
Basic	66,272		64,694		65,870		64,314
Dilutive effect of employee equity award plans	1,247		1,146		1,468		1,195
Dilutive effect of 1.50% convertible senior notes	—		—		—		—
Dilutive effect of warrants	—		—		—		—
Diluted	67,519		65,840		67,338		65,509
Net income per common share attributable to Verint Systems Inc.:
Basic	$	0.16	$	0.34	$	0.18	$	0.31
Diluted	$	0.16	$	0.33	$	0.18	$	0.30

We excluded the following weighted-average potential common shares from the calculations of diluted net income per common share during the applicable periods because their inclusion would have been anti-dilutive:

	Three Months Ended July 31,		Six Months Ended July 31,
(in thousands)	2019	2018	2019	2018
Common shares excluded from calculation:
Stock options and restricted stock-based awards	1,817	401	1,221	325
1.50% convertible senior notes	6,205	6,205	6,205	6,205
Warrants	6,205	6,205	6,205	6,205

Our 1.50% convertible senior notes (“Notes”) will not impact the calculation of diluted net income per share unless the average price of our common stock, as calculated in accordance with the terms of the indenture governing the Notes, exceeds the conversion price of $64.46 per share. Likewise, diluted net income per share will not include any effect from the Warrants (as defined in Note 7, “Long-Term Debt”) unless the average price of our common stock, as calculated under the terms of the Warrants, exceeds the exercise price of $75.00 per share.

Our Note Hedges (as defined in Note 7, “Long-Term Debt”) do not impact the calculation of diluted net income per share under the treasury stock method, because their effect would be anti-dilutive. However, in the event of an actual conversion of any or all of the Notes, the common shares that would be delivered to us under the Note Hedges would neutralize the dilutive effect of the common shares that we would issue under the Notes. As a result, actual conversion of any or all of the Notes would not increase our outstanding common stock. Up to 6,205,000 common shares could be issued upon exercise of the Warrants. Further details regarding the Notes, Note Hedges, and the Warrants appear in Note 7, “Long-Term Debt”.