NET LOSS PER COMMON SHARE ATTRIBUTABLE TO VERINT SYSTEMS INC.
 3 Months Ended
Apr. 30, 2022
Earnings Per Share [Abstract]  
NET LOSS PER COMMON SHARE ATTRIBUTABLE TO VERINT SYSTEMS INC. NET LOSS PER COMMON SHARE ATTRIBUTABLE TO VERINT SYSTEMS INC.
The following table summarizes the calculation of basic and diluted net loss per common share attributable to Verint Systems Inc. for the three months ended April 30, 2022 and 2021:

Three Months Ended
April 30,
(in thousands, except per share amounts) 20222021
Net income$574 $1,094 
Net income attributable to noncontrolling interests288 295 
Net income attributable to Verint Systems Inc.286 799 
Dividends on preferred stock(5,200)(3,322)
Net loss attributable to Verint Systems Inc. for basic net loss per common share (4,914)(2,523)
Dilutive effect of dividends on preferred stock— — 
Net loss attributable to Verint Systems Inc. for diluted net loss per common share$(4,914)$(2,523)
Weighted-average shares outstanding: 
Basic64,947 65,661 
Dilutive effect of employee equity award plans— — 
Dilutive effect of 2021 Notes— — 
Dilutive effect of 2014 Notes— — 
Dilutive effect of warrants— — 
Dilutive effect of assumed conversion of preferred stock— — 
Diluted64,947 65,661 
Net loss per common share attributable to Verint Systems Inc.:
Basic$(0.08)$(0.04)
Diluted$(0.08)$(0.04)

We excluded the following weighted-average potential common shares from the calculations of diluted net loss per common share during the applicable periods because their inclusion would have been anti-dilutive:
Three Months Ended
April 30,
(in thousands) 20222021
Common shares excluded from calculation:  
Stock options and restricted stock-based awards1,571 1,859 
2021 Notes— 1,254 
2014 Notes— 9,541 
Warrants— 9,865 
Series A Preferred Stock5,498 5,498 
Series B Preferred Stock3,980 1,118 

In periods for which we report a net loss attributable to Verint Systems Inc., basic net loss per common share and diluted net loss per common share are identical since the effect of all potential common shares is anti-dilutive and therefore excluded.

For the three months ended April 30, 2022, the average price of our common stock did not exceed the $62.08 per share conversion price of our 2021 Notes (as defined in Note 7, “Long-Term Debt”), and other requirements for the 2021 Notes to be convertible were not met. The 2021 Notes will have a dilutive impact on net income per common share at any time when the average market price of our common stock for a quarterly reporting period exceeds the conversion price.

The Capped Calls (as defined in Note 7, “Long-Term Debt”) do not impact our diluted earnings per common share calculations as their effect would be anti-dilutive. The Capped Calls are generally intended to reduce the potential dilution to our common stock upon any conversion of the 2021 Notes and/or offset any cash payments we are required to make in excess of the principal amount of converted 2021 Notes, in the event that at the time of conversion our common stock price exceeds the $62.08 conversion price, with such reduction and/or offset subject to a cap of $100.00.

Following the completion of the Spin-Off on February 1, 2021, the strike prices of the conversion features of our 2014 Notes and Warrants (each as defined in Note 7, “Long-Term Debt”) were reduced to $40.55 per share and $47.18 per share, respectively, which increased the equivalent number of underlying common shares to 9,541,000 and 9,865,000, respectively.

Our Note Hedges (as defined in Note 7, “Long-Term Debt”) did not impact our diluted earnings per common share calculation because their effect would be anti-dilutive. However, in connection with the maturity of the 2014 Notes, the common shares delivered to us under the Note Hedges neutralized the dilutive effect of the common shares that we issued under the 2014 Notes to settle the conversion premium. As a result, the settlement of the outstanding 2014 Notes did not increase our outstanding common stock.

Our Warrants had a dilutive impact on net income per common share to the extent that we reported net income for the applicable period and the average market value of our common stock exceeded the strike price of the Warrants. The Warrants expired incrementally on a series of expiration dates between August 30, 2021 and January 21, 2022. At each expiration date the Warrants were exercised when the market price per share of our common stock exceeded the strike price of the Warrants, and we issued an aggregate of 293,143 shares of our common stock as part of the cashless exercise of approximately 5,031,000 Warrants. All outstanding Warrants were exercised or expired as of January 31, 2022.

Further details regarding the 2021 Notes, Capped Calls, 2014 Notes, Note Hedges, and the Warrants appear in Note 7, “Long-Term Debt”.

On December 4, 2019, we announced that the Apax Investor would invest up to $400.0 million in us in the form of convertible preferred stock. On May 7, 2020, the purchase of $200.0 million of our Series A Preferred Stock closed. On April 6, 2021, in connection with the completion of the Spin-Off, the Apax Investor purchased $200.0 million of our Series B Preferred Stock. The weighted-average common shares underlying the assumed conversion of the Preferred Stock, on an as-converted basis, were excluded from the calculations of diluted net loss per common share for the three months ended April 30, 2022 and 2021, as their effect would have been anti-dilutive. Further details regarding the Preferred Stock investment appear in Note 9, “Convertible Preferred Stock”.