10-Q

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

(Mark One)

þ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended October 31, 2014

OR

o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to .

Commission File No. 001-34807

Verint Systems Inc.

(Exact Name of Registrant as Specified in its Charter) 

Delaware	11-3200514
(State or Other Jurisdiction of Incorporation or Organization)	(I.R.S. Employer Identification No.)
330 South Service Road, Melville, New York	11747
(Address of Principal Executive Offices)	(Zip Code)

	(631) 962-9600
(Registrant’s Telephone Number, Including Area Code)

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes þ No o

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).  Yes þ No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company.  See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large Accelerated Filer þ	Accelerated Filer o	Non-Accelerated Filer o	Smaller Reporting Company o
		(Do not check if a smaller reporting company)

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).  Yes o No þ

There were 60,714,350 shares of the registrant’s common stock outstanding on November 14, 2014.

Verint Systems Inc. and Subsidiaries
Index to Form 10-Q
October 31, 2014
		Page
Cautionary Note on Forward-Looking Statements		ii
PART I.	FINANCIAL INFORMATION	1
ITEM 1.	Financial Statements	1
	Condensed Consolidated Balance Sheets	1
	Condensed Consolidated Statements of Operations	2
	Condensed Consolidated Statements of Comprehensive Income (Loss)	3
	Condensed Consolidated Statements of Stockholders’ Equity	4
	Condensed Consolidated Statements of Cash Flows	5
	Notes to Condensed Consolidated Financial Statements	6
ITEM 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	37
ITEM 3.	Quantitative and Qualitative Disclosures About Market Risk	56
ITEM 4.	Controls and Procedures	57
PART II.	OTHER INFORMATION	58
ITEM 1.	Legal Proceedings	58
ITEM 1A.	Risk Factors	58
ITEM 2.	Unregistered Sales of Equity Securities and Use of Proceeds	60
ITEM 3.	Defaults Upon Senior Securities	60
ITEM 4.	Mine Safety Disclosures	60
ITEM 5.	Other Information	60
ITEM 6.	Exhibits	61
SIGNATURES		62

i

Cautionary Note on Forward-Looking Statements

This Quarterly Report on Form 10-Q contains "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995, the provisions of Section 27A of the Securities Act of 1933, as amended (the "Securities Act"), and Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act"). Forward-looking statements include financial projections, statements of plans and objectives for future operations, statements of future economic performance, and statements of assumptions relating thereto. Forward-looking statements may appear throughout this report, including without limitation, Part I, Item 2, "Management's Discussion and Analysis of Financial Condition and Results of Operations," and are often identified by future or conditional words such as "will", "plans", "expects", "intends", "believes", "seeks", "estimates", or "anticipates", or by variations of such words or by similar expressions. There can be no assurances that forward-looking statements will be achieved. By their very nature, forward-looking statements involve known and unknown risks, uncertainties, assumptions, and other important factors that could cause our actual results or conditions to differ materially from those expressed or implied by such forward-looking statements. Important risks, uncertainties, assumptions, and other factors that could cause our actual results or conditions to differ materially from our forward-looking statements include, among others:

• uncertainties regarding the impact of general economic conditions in the United States and abroad, particularly in information technology spending and government budgets, on our business;

• risks associated with our ability to keep pace with technological changes and evolving industry standards in our product offerings and to successfully develop, launch, and drive demand for new and enhanced, innovative, high-quality products that meet or exceed customer needs;

• risks due to aggressive competition in all of our markets, including with respect to maintaining margins and sufficient levels of investment in our business;

• risks created by the continued consolidation of our competitors or the introduction of large competitors in our markets with greater resources than we have;

• risks associated with our ability to successfully compete for, consummate, and implement mergers and acquisitions, including risks associated with capital constraints, valuations, costs and expenses, maintaining profitability levels, management distraction, post-acquisition integration activities, and potential asset impairments;

• risks relating to our ability to effectively and efficiently execute on our growth strategy, including managing investments in our business and operations and enhancing and securing our internal and external operations;

• risks associated with our ability to effectively and efficiently allocate limited financial and human resources to business, development, strategic, or other opportunities that may not come to fruition or produce satisfactory returns;

• risks that we may be unable to maintain and enhance relationships with key resellers, partners, and systems integrators;

• risks associated with the mishandling or perceived mishandling of sensitive or confidential information, security lapses, or with information technology system failures or disruptions;

• risks associated with our significant international operations, including, among others, in Israel, Europe, and Asia, exposure to regions subject to political or economic instability, and fluctuations in foreign exchange rates;

• risks associated with a significant amount of our business coming from domestic and foreign government customers, including the ability to maintain security clearances for certain projects;

• risks associated with complex and changing local and foreign regulatory environments in the jurisdictions in which we operate;

• risks associated with our ability to recruit and retain qualified personnel in regions in which we operate;

• challenges associated with selling sophisticated solutions, long sales cycles, and emphasis on larger transactions, including in assisting customers in realizing the benefits of our solutions and in accurately forecasting revenue and expenses and in maintaining profitability;

• risks that our intellectual property rights may not be adequate to protect our business or assets or that others may make claims on our intellectual property or claim infringement on their intellectual property rights;

ii

• risks that our products may contain defects, which could expose us to substantial liability;

• risks associated with our dependence on a limited number of suppliers or original equipment manufacturers ("OEMs") for certain components of our products, including companies that may compete with us or work with our competitors;

• risks that our customers or partners delay or cancel orders or are unable to honor contractual commitments due to liquidity issues, challenges in their business, or otherwise;

• risks that we may experience liquidity or working capital issues and related risks that financing sources may be unavailable to us on reasonable terms or at all;

• risks associated with significant leverage resulting from our current debt position, including with respect to liquidity considerations, covenant limitations and compliance, fluctuations in interest rates, dilution considerations (with respect to our convertible notes), and our ability to maintain our credit ratings;

• risks arising as a result of contingent or other obligations or liabilities assumed in our acquisition of our former parent company, Comverse Technology, Inc. (“CTI”), or associated with formerly being consolidated with, and part of a consolidated tax group with, CTI, or as a result of CTI's former subsidiary, Comverse, Inc. ("Comverse"), being unwilling or unable to provide us with certain indemnities or transition services to which we are entitled;

• risks relating to our ability to successfully implement and maintain adequate systems and internal controls for our current and future operations and reporting needs and related risks of financial statement omissions, misstatements, restatements, or filing delays; and

• risks associated with changing tax rates, tax laws and regulations, and the continuing availability of expected tax benefits, including those expected as a result of acquisitions.

These risks, uncertainties, assumptions, and challenges, as well as other factors, are discussed in greater detail in "Risk Factors" under Part II, Item 1A of this Quarterly Report on Form 10-Q and in our Annual Report on Form 10-K for the year ended January 31, 2014. You are cautioned not to place undue reliance on forward-looking statements, which reflect our management’s view only as of the date of this report. We make no commitment to revise or update any forward-looking statements in order to reflect events or circumstances after the date any such statement is made, except as otherwise required under the federal securities laws. If we were in any particular instance to update or correct a forward-looking statement, investors and others should not conclude that we would make additional updates or corrections thereafter except as otherwise required under the federal securities laws.

iii

PART I

Item 1.     Financial Statements

VERINT SYSTEMS INC. AND SUBSIDIARIES

Condensed Consolidated Balance Sheets

(Unaudited)

	October 31,			January 31,
(in thousands, except share and per share data)	2014			2014
Assets
Current Assets:
Cash and cash equivalents	$	192,335		$	378,618
Restricted cash and bank time deposits	39,930			6,423
Short-term investments	40,136			32,049
Accounts receivable, net of allowance for doubtful accounts of $1.1 million and $1.2 million, respectively	252,003			194,312
Inventories	21,502			10,693
Deferred cost of revenue	11,149			10,818
Prepaid expenses and other current assets	70,111			61,478
Total current assets	627,166			694,391
Property and equipment, net	59,541			40,145
Goodwill	1,221,004			853,389
Intangible assets, net	336,297			132,847
Capitalized software development costs, net	9,031			8,483
Long-term deferred cost of revenue	12,730			9,843
Other assets	41,341			33,809
Total assets	$	2,307,110		$	1,772,907
Liabilities and Stockholders' Equity
Current Liabilities:
Accounts payable	$	69,271		$	65,656
Accrued expenses and other current liabilities	217,847			179,148
Current maturities of long-term debt	36			6,555
Deferred revenue	157,581			162,124
Total current liabilities	444,735			413,483
Long-term debt	734,316			635,830
Long-term deferred revenue	13,680			13,661
Other liabilities	93,917			76,815
Total liabilities	1,286,648			1,139,789
Commitments and Contingencies
Stockholders' Equity:
Preferred Stock - $0.001 par value; authorized 2,207,000 shares at October 31, 2014 and January 31, 2014; none issued.	—			—
Common stock - $0.001 par value; authorized 120,000,000 shares. Issued 61,055,000 and 53,907,000 shares; outstanding 60,707,000 and 53,605,000 shares at October 31, 2014 and January 31, 2014, respectively.	61			54
Additional paid-in capital	1,305,883			924,663
Treasury stock, at cost - 348,000 and 302,000 shares at October 31, 2014 and January 31, 2014, respectively.	(10,251		)	(8,013		)
Accumulated deficit	(223,657		)	(250,005		)
Accumulated other comprehensive loss	(61,209		)	(39,725		)
Total Verint Systems Inc. stockholders' equity	1,010,827			626,974
Noncontrolling interest	9,635			6,144
Total stockholders' equity	1,020,462			633,118
Total liabilities and stockholders' equity	$	2,307,110		$	1,772,907

See notes to condensed consolidated financial statements.

1

VERINT SYSTEMS INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Operations

(Unaudited) 

	Three Months Ended October 31,						Nine Months Ended October 31,
(in thousands, except per share data)	2014			2013			2014			2013
Revenue:
Product	$	118,346		$	101,974		$	339,657		$	287,189
Service and support	164,228			122,340			477,126			364,358
Total revenue	282,574			224,314			816,783			651,547
Cost of revenue:
Product	32,925			33,322			104,524			94,584
Service and support	60,082			36,900			178,939			115,568
Amortization of acquired technology and backlog	8,096			1,935			23,018			7,920
Total cost of revenue	101,103			72,157			306,481			218,072
Gross profit	181,471			152,157			510,302			433,475
Operating expenses:
Research and development, net	43,008			30,704			128,408			91,935
Selling, general and administrative	102,738			77,472			310,946			240,540
Amortization of other acquired intangible assets	11,367			6,150			34,124			18,193
Total operating expenses	157,113			114,326			473,478			350,668
Operating income	24,358			37,831			36,824			82,807
Other income (expense), net:
Interest income	208			242			683			563
Interest expense	(8,494		)	(7,416		)	(28,103		)	(21,987		)
Losses on early retirements of debt	—			—			(12,546		)	(9,879		)
Other income (expense), net	167			(646		)	1,266			(5,013		)
Total other expense, net	(8,119		)	(7,820		)	(38,700		)	(36,316		)
Income (loss) before provision for (benefit from) income taxes	16,239			30,011			(1,876		)	46,491
Provision for (benefit from) income taxes	4,766			5,957			(31,788		)	11,869
Net income	11,473			24,054			29,912			34,622
Net income attributable to noncontrolling interest	803			1,567			3,564			3,752
Net income attributable to Verint Systems Inc.	10,670			22,487			26,348			30,870
Dividends on preferred stock	—			—			—			(174		)
Net income attributable to Verint Systems Inc. common shares	$	10,670		$	22,487		$	26,348		$	30,696
Net income per common share attributable to Verint Systems Inc.:
Basic	$	0.18		$	0.42		$	0.46		$	0.58
Diluted	$	0.17		$	0.42		$	0.45		$	0.57
Weighted-average common shares outstanding:
Basic	60,644			53,374			57,222			52,781
Diluted	61,492			53,946			58,332			53,561

See notes to condensed consolidated financial statements.

2

VERINT SYSTEMS INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Comprehensive Income (Loss)

(Unaudited)

	Three Months Ended October 31,						Nine Months Ended October 31,
(in thousands)	2014			2013			2014			2013
Net income	$	11,473		$	24,054		$	29,912		$	34,622
Other comprehensive income (loss), net of reclassification adjustments:
Foreign currency translation adjustments	(28,355		)	12,232			(13,363		)	1,537
Net unrealized gains on available-for-sale securities	—			125			13			3
Net unrealized (losses) gains on derivative financial instruments designated as hedges	(9,632		)	(870		)	(9,047		)	283
Benefit from income taxes on net unrealized (losses) gains on derivative financial instruments designated as hedges	998			96			840			31
Other comprehensive (loss) income	(36,989		)	11,583			(21,557		)	1,854
Comprehensive (loss) income	(25,516		)	35,637			8,355			36,476
Comprehensive income attributable to noncontrolling interest	627			1,618			3,491			3,632
Comprehensive (loss) income attributable to Verint Systems Inc.	$	(26,143	)	$	34,019		$	4,864		$	32,844

See notes to condensed consolidated financial statements.

3

VERINT SYSTEMS INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Stockholders’ Equity

(Unaudited)

	Verint Systems Inc. Stockholders’ Equity
	Common Stock				Additional Paid-in Capital									Accumulated Other Comprehensive Loss			Total Verint Systems Inc. Stockholders' Equity						Total Stockholders' Equity
(in thousands)	Shares		Par Value					Treasury Stock			Accumulated Deficit									Non-controlling Interest
Balances as of January 31, 2013	40,158		$	40	$	580,762		$	(8,013	)	$	(303,762	)	$	(44,225	)	$	224,802		$	4,874		$	229,676
Net income	—		—		—			—			30,870			—			30,870			3,752			34,622
Other comprehensive income (loss)	—		—		—			—			—			1,974			1,974			(120		)	1,854
Stock-based compensation - equity portion	—		—		22,304			—			—			—			22,304			—			22,304
Exercises of stock options	246		—		6,432			—			—			—			6,432			—			6,432
Common stock issued for stock awards and stock bonuses	776		1		2,850			—			—			—			2,851			—			2,851
Stock issued for CTI Merger	12,274		13		299,626			—			—			—			299,639			—			299,639
Tax effects from stock award plans	—		—		(3		)	—			—			—			(3		)	—			(3		)
Balances as of October 31, 2013	53,454		$	54	$	911,971		$	(8,013	)	$	(272,892	)	$	(42,251	)	$	588,869		$	8,506		$	597,375
Balances as of January 31, 2014	53,605		$	54	$	924,663		$	(8,013	)	$	(250,005	)	$	(39,725	)	$	626,974		$	6,144		$	633,118
Net income	—		—		—			—			26,348			—			26,348			3,564			29,912
Other comprehensive loss	—		—		—			—			—			(21,484		)	(21,484		)	(73		)	(21,557		)
Common stock issued in public offering, net of issuance costs	5,750		6		264,927			—			—			—			264,933			—			264,933
Equity component of convertible notes, net of issuance costs	—		—		78,209			—			—			—			78,209			—			78,209
Purchase of convertible note hedges	—		—		(60,800		)	—			—			—			(60,800		)	—			(60,800		)
Issuance of warrants	—		—		45,188			—			—			—			45,188			—			45,188
Stock-based compensation - equity portion	—		—		35,702			—			—			—			35,702			—			35,702
Exercises of stock options	378		—		13,135			—			—			—			13,135			—			13,135
Common stock issued for stock awards and stock bonuses	1,020		1		4,531			—			—			—			4,532			—			4,532
Purchases of treasury stock	(46	)	—		—			(2,238		)	—			—			(2,238		)	—			(2,238		)
Tax effects from stock award plans	—		—		328			—			—			—			328			—			328
Balances as of October 31, 2014	60,707		$	61	$	1,305,883		$	(10,251	)	$	(223,657	)	$	(61,209	)	$	1,010,827		$	9,635		$	1,020,462

See notes to condensed consolidated financial statements.

4

VERINT SYSTEMS INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Cash Flows

(Unaudited) 

	Nine Months Ended October 31,
(in thousands)	2014			2013
Cash flows from operating activities:
Net income	$	29,912		$	34,622
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	74,298			40,230
Stock-based compensation - equity portion	35,048			22,006
Amortization of discount on convertible notes	3,565			—
Reduction of valuation allowance resulting from acquisition of KANA	(45,171		)	—
Non-cash (gains) losses on derivative financial instruments, net	(1,666		)	44
Losses on early retirements of debt	12,546			9,879
Other non-cash items, net	8,387			1,783
Changes in operating assets and liabilities, net of effects of business combinations:
Accounts receivable	(41,717		)	(8,820		)
Inventories	(7,801		)	(861		)
Deferred cost of revenue	(3,177		)	(1,951		)
Prepaid expenses and other assets	13,111			24,822
Accounts payable, accrued expenses, and other current liabilities	26,472			1,607
Deferred revenue	(10,903		)	(7,918		)
Other, net	(2,663		)	(424		)
Net cash provided by operating activities	90,241			115,019
Cash flows from investing activities:
Cash paid for business combinations, including adjustments, net of cash acquired	(602,943		)	(10,457		)
Purchases of property and equipment	(15,831		)	(9,439		)
Purchases of short-term investments	(21,175		)	(195,509		)
Sales and maturities of short-term investments	11,363			70,000
Cash paid for capitalized software development costs	(4,510		)	(3,892		)
Change in restricted cash and bank time deposits, including long-term portion	(37,023		)	5,935
Other investing activities, net	(1,466		)	205
Net cash used in investing activities	(671,585		)	(143,157		)
Cash flows from financing activities:
Proceeds from borrowings, net of original issuance discounts	1,526,750			646,750
Repayments of borrowings and other financing obligations	(1,361,777		)	(584,309		)
Proceeds from public issuance of common stock	274,563			—
Proceeds from issuance of warrants	45,188			—
Payments for convertible note hedges	(60,800		)	—
Payments of equity issuance, debt issuance and other debt-related costs	(29,164		)	(7,754		)
Proceeds from exercises of stock options	13,081			6,432
Purchases of treasury stock	(2,238		)	—
Cash received in CTI Merger	—			10,370
Payments of contingent consideration for business combinations (financing portion)	(8,684		)	(16,087		)
Net cash provided by financing activities	396,919			55,402
Effect of exchange rate changes on cash and cash equivalents	(1,858		)	223
Net (decrease) increase in cash and cash equivalents	(186,283		)	27,487
Cash and cash equivalents, beginning of period	378,618			209,973
Cash and cash equivalents, end of period	$	192,335		$	237,460

See notes to condensed consolidated financial statements.

5

VERINT SYSTEMS INC. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

1. BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES

Description of Business

Unless the context otherwise requires, the terms "Verint", "we", "us", and "our" in these notes to condensed consolidated financial statements refer to Verint Systems Inc. and its consolidated subsidiaries.

Verint is a global leader in Actionable Intelligence solutions. Actionable Intelligence is a necessity in a dynamic world of massive information growth because it empowers organizations with crucial insights and enables decision makers to anticipate, respond, and take action. With Verint solutions and value-added services, organizations of all sizes and across many industries can make more timely and effective decisions. Today, more than 10,000 organizations in over 180 countries, including over 80 percent of the Fortune 100, use Verint solutions to improve enterprise performance and make the world a safer place.

Our Actionable Intelligence solutions help organizations address three important challenges: Customer Engagement Optimization; Security Intelligence; and Fraud, Risk, and Compliance. We help our customers capture large amounts of information from numerous data types and sources, use analytics to glean insights from the information, and leverage the resulting Actionable Intelligence to help achieve their customer engagement, enhanced security, and risk mitigation goals.

Headquartered in Melville, New York, we support our customers around the globe directly and with an extensive network of selling and support partners.

We conduct our business through three operating segments—Enterprise Intelligence, Communications and Cyber Intelligence ("Communications Intelligence"), and Video and Situation Intelligence ("Video Intelligence"). Organizing our business through three operating segments allows us to align our resources and domain expertise to effectively address the Actionable Intelligence market. We address the Customer Engagement Optimization market opportunity through solutions from our Enterprise Intelligence segment. We address the Security Intelligence market opportunity through solutions from our Communications Intelligence segment and Video Intelligence segment, and we address the Fraud, Risk, and Compliance market opportunity through solutions from all three operating segments.

Preparation of Condensed Consolidated Financial Statements

The condensed consolidated financial statements included herein have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and on the same basis as the audited consolidated financial statements included in our Annual Report on Form 10-K filed with the U.S. Securities and Exchange Commission (“SEC”) for the year ended January 31, 2014. The condensed consolidated statements of operations, comprehensive income (loss), stockholders’ equity, and cash flows for the periods ended October 31, 2014 and 2013, and the condensed consolidated balance sheet as of October 31, 2014, are not audited but reflect all adjustments that are of a normal recurring nature and that are considered necessary for a fair presentation of the results for the periods shown. The condensed consolidated balance sheet as of January 31, 2014 is derived from the audited consolidated financial statements presented in our Annual Report on Form 10-K for the year ended January 31, 2014. Certain information and disclosures normally included in annual consolidated financial statements have been omitted pursuant to the rules and regulations of the SEC. Because the condensed consolidated interim financial statements do not include all of the information and disclosures required by GAAP for a complete set of financial statements, they should be read in conjunction with the audited consolidated financial statements and notes included in our Annual Report on Form 10-K filed with the SEC for the year ended January 31, 2014. The results for interim periods are not necessarily indicative of a full year’s results.

Principles of Consolidation

The accompanying consolidated financial statements include the accounts of Verint Systems Inc., our wholly owned subsidiaries, and a joint venture in which we hold a 50% equity interest.  This joint venture functions as a systems integrator for Asian markets and is a variable interest entity in which we are the primary beneficiary.  Investments in companies in which we have less than a 20% ownership interest and do not exercise significant influence are accounted for at cost.  We include the results of operations of acquired companies from the date of acquisition.  All significant intercompany transactions and balances are eliminated.

6

Use of Estimates

The preparation of financial statements in conformity with GAAP requires our management to make estimates and assumptions, which may affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenue and expenses during the reporting period.  Actual results could differ from those estimates.

Significant Accounting Policies

Our significant accounting policies are described in Note 1 to the consolidated financial statements included in our Annual Report on Form 10-K for the year ended January 31, 2014. There were no significant changes to our significant accounting policies during the nine months ended October 31, 2014. Additional disclosures regarding our policy for calculating net income per common share attributable to Verint Systems Inc. appear below.

Net Income Per Common Share Attributable to Verint Systems Inc.

Shares used in the calculation of basic net income per common share are based on the weighted-average number of common shares outstanding during the accounting period. Shares used in the calculation of basic net income per common share include vested but unissued shares underlying awards of restricted stock units when all necessary conditions for earning those shares have been satisfied at the award's vesting date, but exclude unvested shares of restricted stock because they are contingent upon future service conditions.

Shares used in the calculation of diluted net income per common share are based on the weighted-average number of common shares outstanding, adjusted for potentially dilutive common shares outstanding during the period. Potentially dilutive common shares from warrants and stock-based compensation plans are determined using the treasury stock method.

We have the option to pay cash, issue shares of common stock, or any combination thereof for the aggregate amount due upon conversion of our 1.50% convertible senior notes due June 1, 2021 (the “Notes”), further details for which appear in Note 6, “Long-Term Debt”. We currently intend to settle the principal amount of the Notes in cash upon conversion and as a result, only the amounts payable in excess of the principal amounts of the Notes, if any, are assumed to be settled with shares of common stock for purposes of computing diluted net income per share.

Potentially dilutive common shares also included the assumed conversion of our Series A Convertible Perpetual Preferred Stock ("Preferred Stock"), if dilutive, for periods prior to cancellation of the Preferred Stock on February 4, 2013 in connection with the CTI Merger. The CTI Merger is further discussed in Note 14, "Merger with CTI".

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

Recent Accounting Pronouncements

New Accounting Pronouncements Implemented

In March 2013, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No. 2013-05, Foreign Currency Matters (Topic 830): Parent's Accounting for the Cumulative Translation Adjustment upon Derecognition of Certain Subsidiaries or Groups of Assets within a Foreign Entity or of an Investment in a Foreign Entity. This new standard is intended to resolve diversity in practice regarding the release into net income of a cumulative translation adjustment upon derecognition of a subsidiary or group of assets within a foreign entity. ASU No. 2013-05 was effective prospectively for us on February 1, 2014. The adoption of this standard did not impact our condensed consolidated financial statements.

New Accounting Pronouncements To Be Implemented

In April 2014, the FASB issued ASU No. 2014-08, Presentation of Financial Statements (Topic 205) and Property, Plant, and Equipment (Topic 360): Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity. ASU No. 2014-08 raises the threshold for a disposal to qualify as a discontinued operation and requires new disclosures of both discontinued operations and certain other disposals that do not meet the definition of a discontinued operation. It is effective for annual reporting periods beginning on or after December 15, 2014. Early adoption is permitted but only for disposals that have not been reported in previously issued financial statements. We are currently reviewing this standard, but we do not expect its

7

adoption to materially impact our condensed consolidated financial statements, absent any disposals of components or groups of components that have a material effect on our financial results in future periods.

In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606). ASU No. 2014-09 supersedes the revenue recognition requirements in Topic 605, Revenue Recognition, and most industry-specific revenue recognition guidance throughout the Industry Topics of the Accounting Standards Codification. Additionally, this update supersedes some cost guidance included in Subtopic 605-35, Revenue Recognition-Construction-Type and Production-Type Contracts. The core principle of the guidance is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. It is effective for the first interim period within annual reporting periods beginning after December 15, 2016, and early adoption is not permitted. Entities may choose from two adoption methods, with certain practical expedients. We are currently reviewing this standard to assess the impact on our future condensed consolidated financial statements and evaluating the available adoption methods.

In June 2014, the FASB issued ASU No. 2014-10, Development Stage Entities (Topic 915): Elimination of Certain Financial Reporting Requirements, Including an Amendment to Variable Interest Entities Guidance in Topic 810, Consolidation. ASU No. 2014-10 removes the financial reporting distinction between development stage entities and other reporting entities from GAAP and it eliminates an exception provided in the consolidation guidance for development stage enterprises. It is effective for fiscal years, and interim periods within those years, beginning after December 15, 2015, although early adoption is permitted. We are currently reviewing this standard to assess the impact on our future condensed consolidated financial statements.

In June 2014, the FASB issued ASU No. 2014-12, Compensation—Stock Compensation (Topic 718): Accounting for Share-Based Payments When the Terms of an Award Provide That a Performance Target Could Be Achieved after the Requisite Service Period, which requires that a performance target that affects vesting, and that could be achieved after the requisite service period, be treated as a performance condition. As such, the performance target should not be reflected in estimating the grant date fair value of the award. ASU No. 2014-12 is effective for annual reporting periods beginning after December 15, 2015, including interim periods within that reporting period, although early adoption is permitted. We are currently reviewing this standard to assess the impact on our future condensed consolidated financial statements.

In August 2014, the FASB issued ASU No. 2014-15, Presentation of Financial Statements—Going Concern (Subtopic 205-40): Disclosure of Uncertainties about an Entity's Ability to Continue as a Going Concern. This ASU defines management’s responsibility to evaluate whether there is substantial doubt about an organization’s ability to continue as a going concern and to provide related footnote disclosures. The provisions of ASU No. 2014-15 are effective for annual periods ending after December 15, 2016 and for annual and interim periods thereafter, and early adoption is permitted. The adoption of ASU No. 2014-15 is not expected to have a material effect on our future condensed consolidated financial statements.

2. 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 nine months endedOctober 31, 2014 and 2013:

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	Three Months Ended October 31,				Nine Months Ended October 31,
(in thousands, except per share amounts)	2014		2013		2014		2013
Net income	$	11,473	$	24,054	$	29,912	$	34,622
Net income attributable to noncontrolling interest	803		1,567		3,564		3,752
Net income attributable to Verint Systems Inc.	10,670		22,487		26,348		30,870
Dividends on preferred stock	—		—		—		(174		)
Net income attributable to Verint Systems Inc. for basic net income per common share	10,670		22,487		26,348		30,696
Dilutive effect of dividends on preferred stock	—		—		—		—
Net income attributable to Verint Systems Inc. for diluted net income per common share	$	10,670	$	22,487	$	26,348	$	30,696
Weighted-average shares outstanding:
Basic	60,644		53,374		57,222		52,781
Dilutive effect of employee equity award plans	848		572		1,110		780
Dilutive effect of 1.50% convertible senior notes	—		—		—		—
Dilutive effect of warrants	—		—		—		—
Dilutive effect of preferred stock	—		—		—		—
Diluted	61,492		53,946		58,332		53,561
Net income per common share attributable to Verint Systems Inc.:
Basic	$	0.18	$	0.42	$	0.46	$	0.58
Diluted	$	0.17	$	0.42	$	0.45	$	0.57

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 October 31,		Nine Months Ended October 31,
(in thousands)	2014	2013	2014	2013
Weighted average potential common shares excluded from calculation:
Stock options and restricted stock-based awards	464	343	403	263
1.50% convertible senior notes	6,205	—	3,091	—
Warrants	6,205	—	3,091	—
Series A Convertible Preferred Stock	—	—	—	164

The 1.50% convertible senior 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 1.50% convertible senior notes, exceeds the conversion price of $64.46 per share. Likewise, diluted net income per share will not include any effect from the warrants 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. Further details regarding the 1.50% convertible senior notes and the warrants appear in Note 6, "Long-Term Debt".

Our Series A Convertible Preferred Stock was canceled in conjunction with the CTI Merger on February 4, 2013, as further discussed in Note 9, "Convertible Preferred Stock" and Note 14, "Merger with CTI". The weighted-average common shares underlying the assumed conversion of the Series A Convertible Preferred Stock for the nine months ended October 31, 2013 in the table above reflect the Series A Convertible Preferred Stock as outstanding for only four days during that period.

3. CASH, CASH EQUIVALENTS AND SHORT-TERM INVESTMENTS

The following tables summarize our cash, cash equivalents and short-term investments as of October 31, 2014 and January 31, 2014:

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	October 31, 2014
(in thousands)	Cost Basis		Gross Unrealized Gains		Gross Unrealized Losses		Estimated Fair Value
Cash and cash equivalents:
Cash and bank time deposits	$	189,142	$	—	$	—	$	189,142
Money market funds	194		—		—		194
Commercial paper	2,999		—		—		2,999
Total cash and cash equivalents	$	192,335	$	—	$	—	$	192,335
Short-term investments:
Commercial paper and corporate debt securities (available-for-sale)	$	13,774	$	22	$	—	$	13,796
Bank time deposits	26,340		—		—		26,340
Total short-term investments	$	40,114	$	22	$	—	$	40,136

	January 31, 2014
(in thousands)	Cost Basis		Gross Unrealized Gains		Gross Unrealized Losses		Estimated Fair Value
Cash and cash equivalents:
Cash and bank time deposits	$	314,604	$	—	$	—	$	314,604
Money market funds	14,023		—		—		14,023
Commercial paper	49,986		5		—		49,991
Total cash and cash equivalents	$	378,613	$	5	$	—	$	378,618
Short-term investments:
Commercial paper and corporate debt securities (available-for-sale)	$	9,402	$	4	$	—	$	9,406
Bank time deposits	22,643		—		—		22,643
Total short-term investments	$	32,045	$	4	$	—	$	32,049

Bank time deposits which are reported within short-term investments consist of deposits held outside of the U.S. with maturities of greater than three months, or without specified maturity dates which we intend to hold for periods in excess of three months. All other bank deposits are included within cash and cash equivalents.

As of October 31, 2014 and January 31, 2014, all of our available-for-sale investments had contractual maturities of less than one year. We report our available-for-sale securities at fair value, based on quoted market prices or other readily available market information. Unrealized gains and losses, net of applicable income taxes, are included in accumulated other comprehensive income (loss) within stockholders’ equity on our condensed consolidated balance sheets. Realized gains or losses, if applicable, are recorded in other income (expense), net in our condensed consolidated statement of operations, using the specific identification method. Gains and losses on sales of available-for-sale securities during the nine months ended October 31, 2014 and 2013 were not significant.

During the nine months ended October 31, 2014 and 2013, proceeds from sales and maturities of available-for-sale securities were $11.4 million and $70.0 million, respectively.

We periodically review our investment portfolios to determine if any investment is other-than-temporarily impaired due to changes in credit risk or other potential valuation concerns. We believe that the investments we held at October 31, 2014 were not other-than-temporarily impaired. We held no available-for-sale securities with unrealized losses at October 31, 2014. We do not intend to sell our available-for-sale securities and it is not more likely than not that we will be required to sell them before recovery at par, which may be at maturity.

4. BUSINESS COMBINATIONS

Nine Months Ended October 31, 2014

10

KANA Software, Inc.

On February 3, 2014, we completed the acquisition of KANA Software, Inc. and its subsidiaries through the merger of KANA Software, Inc.'s parent holding company, Kay Technology Holdings, Inc. (collectively, "KANA"), with an indirect, wholly owned subsidiary of Verint, with KANA continuing as the surviving company and as our wholly owned subsidiary. The purchase price consisted of $542.4 million of cash paid at the closing, partially offset by $25.1 million of KANA’s cash received in the acquisition, and a $0.7 million post-closing purchase price adjustment, resulting in net cash consideration of $516.6 million. The post-closing purchase price adjustment resulted from the final determination of KANA's February 3, 2014 cash, debt, net working capital, transaction expenses and taxes, and was received in cash in May 2014.

The merger consideration was funded by a combination of cash on hand, $300.0 million of incremental term loans incurred in connection with an amendment to our Credit Agreement, and $125.0 million of borrowings under our 2013 Revolving Credit Facility (further details for which appear in Note 6, "Long-Term Debt").

KANA, based in Sunnyvale, California and with global operations, is a leading provider of on-premises and cloud-based solutions which create differentiated, personalized, and integrated customer experiences for large enterprises and mid-market organizations. KANA is being integrated into our Enterprise Intelligence operating segment.

Among the factors contributing to the recognition of goodwill as a component of the KANA purchase price allocation were synergies in products and technologies, and the addition of a skilled, assembled workforce. This goodwill has been assigned to our Enterprise Intelligence segment and while generally not deductible for income tax purposes, certain goodwill related to previous business combinations by KANA will be deductible for income tax purposes.

In connection with the purchase price allocation for KANA, the estimated fair value of undelivered performance obligations under customer contracts assumed in the merger was determined utilizing a cost build-up approach. The cost build-up approach calculates fair value by estimating the costs required to fulfill the obligations plus a reasonable profit margin, which approximates the amount that we believe would be required to pay a third party to assume the performance obligations. The estimated costs to fulfill the performance obligations were based on the historical direct costs for delivering similar services. As a result, in allocating the purchase price, we recorded $7.9 million of current and long-term deferred revenue, representing the estimated fair value of undelivered performance obligations for which payment had been received, which will be recognized as revenue as the underlying performance obligations are delivered. For undelivered performance obligations for which payment had not yet been received, we recorded an $18.6 million asset within prepaid expenses and other current assets as a component of the purchase price allocation. We are amortizing this asset over the underlying delivery periods for these obligations as a reduction to revenue, which reduces the revenue we recognize for providing these services to its estimated fair value.

As a result of the ongoing integration of KANA into our Enterprise Intelligence operating segment, including the integration of the KANA and legacy Verint global sales organizations and the resulting impact to the marketing and sales of our Enterprise Intelligence products, we are unable to provide a meaningful measure of the impact on revenue and net income attributable to KANA in our condensed consolidated statements of operations for the three and nine months ended October 31, 2014.

Transaction and related costs, consisting primarily of professional fees and integration expenses, directly related to the merger, totaled $1.8 million and $6.4 million for the three and nine months ended October 31, 2014, respectively, and were expensed as incurred.

UTX Technologies Limited

On March 31, 2014, we completed the acquisition of all of the outstanding shares of UTX Technologies Limited (“UTX”), a provider of certain mobile device tracking solutions for security applications, from UTX Limited. UTX Limited was our supplier of these products to our Communications Intelligence operating segment prior to the acquisition. The purchase price consisted of $82.9 million of cash paid at closing, subject to adjustment, and $1.3 million for the fair value of potential future contingent consideration payments to UTX Limited of up to $1.5 million. Contingent consideration of $1.5 million was paid to UTX Limited during the three months ended October 31, 2014, in consideration of UTX achieving certain performance targets. The cash paid to acquire UTX was funded with cash on hand.

UTX is based in the Europe, the Middle East and Africa (“EMEA”) region and is being integrated into our Communications Intelligence operating segment.

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Among the factors contributing to the recognition of goodwill as a component of the UTX purchase price allocation were synergies in products and technologies, and the addition of a skilled, assembled workforce. This goodwill has been assigned to our Communications Intelligence segment and is not deductible for income tax purposes.

For the nine months ended October 31, 2014, we recorded a charge of $0.2 million within selling, general and administrative expenses to increase the fair value of the UTX contingent consideration obligation to $1.5 million, which reflected the achievement of the underlying performance targets. This amount was paid to UTX Limited during the three months ended October 31, 2014.

Revenue and income before provision for income taxes attributable to UTX from March 31, 2014 through October 31, 2014 were not significant to our consolidated operating results.

Transaction and related costs (or benefits) directly related to the acquisition of UTX, consisting primarily of professional fees, integration expenses and related adjustments, were a benefit of $0.9 million and a charge of $2.1 million for the three and nine months ended October 31, 2014. All transaction and related costs were expensed as incurred.

As a result of the UTX acquisition, we recorded a $2.6 million charge for the impairment of certain capitalized software development costs during the three months ended April 30, 2014, reflecting strategy changes in certain product development initiatives. This charge is reflected within cost of product revenue.

Other Business Combination

On April 16, 2014, we completed the acquisition of certain technology and other assets for use in our Communications Intelligence operating segment in a transaction that qualified as a business combination. This business combination was not material to our condensed consolidated financial statements.

Purchase Price Allocations

The purchase price allocations for the business combinations completed during the nine months ended October 31, 2014 have been prepared on a preliminary basis and changes to those allocations may occur as additional information becomes available during the respective measurement periods (up to one year from the respective acquisition dates). Fair values still under review include values assigned to identifiable intangible assets, deferred income taxes and reserves for uncertain income tax positions. Adjustments identified and recorded subsequent to the initial purchase price allocations for both KANA and UTX have not been material.

The purchase prices were allocated to the tangible and intangible assets acquired and liabilities assumed based on their estimated fair values on the acquisition dates, with the remaining unallocated purchase prices recorded as goodwill. The fair values assigned to identifiable intangible assets acquired were determined primarily by using the income approach, which discounts expected future cash flows to present value using estimates and assumptions determined by management.

The following table sets forth the components and the allocations of the purchase prices for our acquisitions of KANA and UTX, including adjustments identified subsequent to the respective acquisition dates:

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(in thousands)	KANA			UTX
Components of Purchase Prices:
Cash, including post-closing adjustments	$	541,685		$	82,901
Fair value of contingent consideration	—			1,347
Total purchase prices	$	541,685		$	84,248
Allocation of Purchase Prices:
Net tangible assets (liabilities):
Accounts receivable	$	18,473		$	—
Other current assets, including cash acquired	48,948			3,873
Other assets	12,124			924
Current and other liabilities	(16,509		)	(263		)
Deferred revenue - current and long-term	(7,932		)	(340		)
Deferred income taxes - current and long-term	(63,184		)	(4,882		)
Net tangible liabilities	(8,080		)	(688		)
Identifiable intangible assets:
Customer relationships	152,700			2,000
Developed technology	55,500			37,400
Trademarks and trade names	11,500			—
Other intangible assets	—			1,100
Total identifiable intangible assets	219,700			40,500
Goodwill	330,065			44,436
Total purchase price allocations	$	541,685		$	84,248

The weighted-average estimated useful life of all finite-lived identifiable intangible assets acquired during the nine months ended October 31, 2014 is 7.4 years.

For the acquisition of KANA, the acquired customer relationships, developed technology, and trademarks and trade names were assigned estimated useful lives of five to ten years, three to five years, and five years, respectively, the weighted average of which is approximately 8.1 years.

For the acquisition of UTX, the acquired customer relationships, developed technology and other intangible assets were assigned estimated useful lives of three years, four years, and four years, respectively, the weighted average of which is approximately 4.0 years.

The acquired identifiable intangible assets are being amortized on a straight-line basis, which we believe approximates the pattern in which the assets are utilized, over their estimated useful lives.

We have included the financial results of these business combinations in our condensed consolidated financial statements from their respective acquisition dates.

Pro Forma Information

The following table provides unaudited pro forma operating results for the three and nine months ended October 31, 2014 and 2013, as if KANA and UTX had been acquired on February 1, 2013. These unaudited pro forma results reflect certain adjustments related to these acquisitions, including amortization expense on finite-lived intangible assets acquired from KANA and UTX, interest expense and fees associated with additional long-term debt incurred to partially fund the acquisition of KANA, and adjustments to recognize the fair value of revenue associated with performance obligations assumed in the acquisition of KANA.

For purposes of the following unaudited pro forma operating results, a $45.2 million income tax benefit resulting from a reduction of valuation allowances associated from the acquisition of KANA is reflected in the pro forma operating results for the nine months ended October 31, 2013. The actual tax benefit was recorded during the nine months ended October 31, 2014, as further described in Note 10, "Income Taxes".

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The unaudited pro forma results do not include any operating efficiencies or potential cost savings which may result from these business combinations. Accordingly, such unaudited pro forma amounts are not necessarily indicative of the results that actually would have occurred had the acquisitions been completed on February 1, 2013, nor are they indicative of future operating results.

	Three Months Ended October 31,				Nine Months Ended October 31,
(in thousands, except per share amounts)	2014		2013		2014		2013
Revenue	$	288,279	$	256,879	$	842,784	$	737,706
Net income	$	17,650	$	15,826	$	15,419	$	37,146
Net income attributable to Verint Systems Inc.	$	16,847	$	14,259	$	11,855	$	33,394
Net income per common share attributable to Verint Systems Inc.:
Basic	$	0.28	$	0.27	$	0.21	$	0.63
Diluted	$	0.27	$	0.26	$	0.20	$	0.62

Business Combinations in Prior Periods

In connection with certain business combinations completed in prior periods, we have agreed to make contingent cash payments to the former shareholders or asset holders of the acquired businesses based upon achievement of performance targets following the acquisition dates. These obligations are measured at fair value at each reporting date.

For the three and nine months ended October 31, 2014, we recorded charges of $0.3 million and $0.5 million, respectively, within selling, general and administrative expenses for changes in the fair values of these obligations, which primarily reflected the impacts of revised expectations of achieving the performance targets. For the three and nine months ended October 31, 2013, we recorded benefits of $1.9 million and $1.6 million, respectively, within selling, general and administrative expenses for changes in the fair values of these obligations.

Payments of contingent consideration earned under these agreements were $1.6 million and $8.5 million for the three and nine months ended October 31, 2014, respectively. Payments of contingent consideration earned under these agreements were $0.9 million and $17.1 million for the three and nine months ended October 31, 2013, respectively.

For a certain business combination completed during the year ended January 31, 2012, the purchase price allocation included liabilities for uncertain tax positions and certain other liabilities associated with pre-acquisition business activities of the acquired company. Corresponding indemnification assets were also recorded as components of the purchase price allocation for this acquisition, recognizing the selling shareholders’ contractual obligation to indemnify us for these pre-acquisition liabilities and were measured on the same basis as the corresponding liabilities. As of October 31, 2014 and January 31, 2014, the combined current and long-term liabilities for these matters were $2.9 million and $3.4 million, respectively. The corresponding current and long-term indemnification assets associated with these liabilities were $1.8 million and $2.3 million at October 31, 2014 and January 31, 2014, respectively.

5. INTANGIBLE ASSETS AND GOODWILL

Acquisition-related intangible assets consisted of the following as of October 31, 2014 and January 31, 2014:

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	October 31, 2014
(in thousands)	Cost		Accumulated Amortization			Net
Intangible assets with finite lives:
Customer relationships	$	388,008	$	(169,745	)	$	218,263
Acquired technology	200,078		(98,097		)	101,981
Trade names	19,801		(9,007		)	10,794
Non-competition agreements	3,625		(2,149		)	1,476
Distribution network	4,440		(2,416		)	2,024
Backlog	386		(327		)	59
Total intangible assets with finite lives	616,338		(281,741		)	334,597
In-process research and development, with indefinite lives	1,700		—			1,700
Total	$	618,038	$	(281,741	)	$	336,297

	January 31, 2014
(in thousands)	Cost		Accumulated Amortization			Net
Intangible assets with finite lives:
Customer relationships	$	240,208	$	(141,714	)	$	98,494
Acquired technology	106,361		(76,922		)	29,439
Trade names	13,378		(11,378		)	2,000
Non-competition agreements	5,514		(4,970		)	544
Distribution network	2,440		(1,840		)	600
Backlog	386		(316		)	70
Total intangible assets with finite lives	368,287		(237,140		)	131,147
In-process research and development, with indefinite lives	1,700		—			1,700
Total	$	369,987	$	(237,140	)	$	132,847

The following table presents net acquisition-related intangible assets by reportable segment as of October 31, 2014 and January 31, 2014: 

	October 31,		January 31,
(in thousands)	2014		2014
Enterprise Intelligence	$	285,037	$	115,928
Communications Intelligence	50,050		14,856
Video Intelligence	1,210		2,063
Total	$	336,297	$	132,847

The reported amount of net acquisition-related intangible assets can fluctuate from the impact of changes in foreign exchange rates on intangible assets not denominated in U.S. dollars.

Total amortization expense recorded for acquisition-related intangible assets was $19.5 million and $57.1 million for the three and nine months endedOctober 31, 2014, respectively, and $8.1 million and $26.1 million for the three and nine months ended October 31, 2013, respectively.

Estimated future amortization expense on finite-lived acquisition-related intangible assets as of October 31, 2014 was as follows:

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(in thousands)
Years Ending January 31,	Amount
2015 (remainder of year)	$	20,921
2016	77,033
2017	73,604
2018	54,078
2019	25,107
2020 and thereafter	83,854
Total	$	334,597

Goodwill represents the excess of the purchase price in a business combination over the fair value of net tangible and identifiable intangible assets acquired. At the acquisition date, goodwill resulting from a business combination is assigned to those reporting units expected to benefit from the synergies of the combination. Reporting units may either be at, or one level below, our operating segment level.

Goodwill activity for the nine months ended October 31, 2014, in total and by reportable segment, was as follows: 

				Reportable Segment
(in thousands)	Total			Enterprise Intelligence			Communications Intelligence			Video Intelligence
Year Ended January 31, 2014:
Goodwill, gross, at January 31, 2014	$	920,254		$	795,722		$	47,838		$	76,694
Accumulated impairment losses through January 31, 2014	(66,865		)	(30,791		)	—			(36,074		)
Goodwill, net, at January 31, 2014	853,389			764,931			47,838			40,620
Business combinations	378,576			330,065			48,511			—
Foreign currency translation and other	(10,961		)	(9,792		)	(37		)	(1,132		)
Goodwill, net, at October 31, 2014	$	1,221,004		$	1,085,204		$	96,312		$	39,488
Balance at October 31, 2014:
Goodwill, gross, at October 31, 2014	$	1,287,869		$	1,115,995		$	96,312		$	75,562
Accumulated impairment losses through October 31, 2014	(66,865		)	(30,791		)	—			(36,074		)
Goodwill, net, at October 31, 2014	$	1,221,004		$	1,085,204		$	96,312		$	39,488

No events or circumstances indicating the potential for goodwill impairment were identified during the nine months ended October 31, 2014.

6. LONG-TERM DEBT

The following table summarizes our long-term debt at October 31, 2014 and January 31, 2014: 

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	October 31,			January 31,
(in thousands)	2014			2014
1.50% Convertible Senior Notes:
Principal amount	$	400,000		$	—
Unamortized debt discount	(76,535		)	—
1.50% Convertible Senior Notes, net	323,465			—
February 2014 Term Loans:
Gross amount	130,729			—
Unamortized debt discount	(289		)	—
February 2014 Term Loans, net	130,440			—
March 2014 Term Loans	280,413			—
March 2013 Term Loans:
Gross amount	—			645,125
Unamortized debt discount	—			(2,827		)
March 2013 Term Loans, net	—			642,298
Other debt	34			87
Total debt	734,352			642,385
Less: current maturities	36			6,555
Long-term debt	$	734,316		$	635,830

1.50% Convertible Senior Notes

On June 18, 2014, we issued $400.0 million in aggregate principal amount of 1.50% convertible senior notes due June 1, 2021 (the "Notes"), unless earlier converted by the holders pursuant to their terms. Net proceeds from the Notes after underwriting discounts were $391.9 million. The Notes pay interest in cash semiannually in arrears at a rate of 1.50% per annum.

The Notes were issued concurrently with our public issuance of 5,750,000 shares of common stock, the majority of the combined net proceeds of which were used to partially repay certain indebtedness under our Credit Agreement, as further described below. Additional details regarding our June 18, 2014 issuance of common stock appear in Note 8, “Stockholders’ Equity”.

The Notes are unsecured and rank senior in right of payment to our indebtedness that is expressly subordinated in right of payment to the Notes; equal in right of payment to our indebtedness that is not so subordinated; effectively subordinated in right of payment to any of our secured indebtedness to the extent of the value of the assets securing such indebtedness; and structurally subordinated to indebtedness and other liabilities of our subsidiaries.

The Notes are convertible into, at our election, cash, shares of common stock, or a combination of both, subject to satisfaction of specified conditions and during specified periods, as described below. If converted, we currently intend to pay cash in respect of the principal amount of the Notes.

The conversion price of the Notes at any time is equal to $1,000 divided by the then-applicable conversion rate. The Notes have an initial conversion rate of 15.5129 shares of common stock per $1,000 principal amount of Notes, which represents an initial effective conversion price of approximately $64.46 per share of common stock and would result in the issuance of approximately 6,205,000 shares if all of the Notes were converted. Throughout the term of the Notes, the conversion rate may be adjusted upon the occurrence of certain events.

Holders may surrender their Notes for conversion at any time prior to the close of business on the business day immediately preceding December 1, 2020, only under the following circumstances:

• during any calendar quarter commencing after the calendar quarter ending on September 30, 2014, if the closing sale price of our common stock, for at least 20 trading days (whether or not consecutive) in the period of 30 consecutive trading days ending on the last trading day of the immediately preceding calendar quarter, is more than 130% of the conversion price of the Notes in effect on each applicable trading day;

• during the ten consecutive trading-day period following any five consecutive trading-day period in which the trading price for the Notes for each such trading day was less than 98% of the closing sale price of our common stock on such date multiplied by the then-current conversion rate; or

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• upon the occurrence of specified corporate events, as described in the indenture governing the Notes, such as a consolidation, merger, or binding share exchange.

On or after December 1, 2020 until the close of business on the second scheduled trading day immediately preceding the maturity date, holders may surrender their Notes for conversion regardless of whether any of the foregoing conditions have been satisfied.

As of October 31, 2014, the Notes were not convertible.

In accordance with accounting guidance for convertible debt with a cash conversion option, we separately accounted for the debt and equity components of the Notes in a manner that reflects our estimated nonconvertible debt borrowing rate. We estimated the carrying amount of the debt component of the Notes to be $319.9 million at the issuance date, assuming a 5.00% non-convertible borrowing rate. The carrying amount of the equity component was determined to be approximately $80.1 million by deducting the carrying amount of the debt component from the principal amount of the Notes, and was recorded as an increase to additional paid-in capital. The excess of the principal amount of the debt component over its carrying amount (the “debt discount”) is being amortized as interest expense over the term of the Notes using the effective interest method. The equity component is not remeasured as long as it continues to meet the conditions for equity classification.

We allocated transaction costs related to the issuance of the Notes, including underwriting discounts, of $7.6 million and $1.9 million to the debt and equity components, respectively. Issuance costs attributable to the debt component were recorded within other assets and are being amortized as interest expense over the term of the Notes, and issuance costs attributable to the equity component were netted with the equity component in additional paid-in capital. The carrying amount of the equity component, net of issuance costs, was $78.2 million at October 31, 2014. Including the impact of the related deferred debt issuance costs, the effective interest rate on the Notes was approximately 5.29% at October 31, 2014.

Based on the closing market price of our common stock on October 31, 2014, the if-converted value of the Notes was less than the aggregate principal amount of the Notes.

Note Hedges and Warrants

Concurrently with the issuance of the Notes, we entered into convertible note hedge transactions (the “Note Hedges”) and sold warrants (the “Warrants”). The combination of the Note Hedges and the Warrants serves to increase the effective initial conversion price for the Notes to $75.00 per share. The Note Hedges and Warrants are each separate instruments from the Notes.

Note Hedges

Pursuant to the Note Hedges, we purchased call options on our common stock, under which we have the right to acquire from the counterparties up to approximately 6,205,000 shares of our common stock, subject to customary anti-dilution adjustments, at a price of $64.46, which equals the initial conversion price of the Notes. Our exercise rights under the Note Hedges generally trigger upon conversion of the Notes and the Note Hedges terminate upon maturity of the Notes, or the first day the Notes are no longer outstanding. The Note Hedges may be settled in cash, shares of our common stock, or a combination thereof, at our option, and are intended to reduce our exposure to potential dilution upon conversion of the Notes. We paid $60.8 million for the Note Hedges, which was recorded as a reduction to additional paid-in capital. As of October 31, 2014, we had not purchased any shares under the Note Hedges.

Warrants

We sold the Warrants to several counterparties. The Warrants provide the counterparties rights to acquire from us up to approximately 6,205,000 shares of our common stock at a price of $75.00 per share. The Warrants expire incrementally on a series of expiration dates beginning in August 2021. At expiration, if the market price per share of our common stock exceeds the strike price of the Warrants, we will be obligated to issue shares of our common stock having a value equal to such excess. The Warrants could have a dilutive effect on net income per share to the extent that the market value of our common stock exceeds the strike price of the Warrants. Proceeds from the sale of the Warrants were $45.2 million and were recorded as additional paid-in capital. As of October 31, 2014, no Warrants had been exercised and all Warrants remained outstanding.

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The Note Hedges and Warrants both meet the requirements for classification within stockholders’ equity, and their respective fair values will not be subsequently remeasured and adjusted as long as these instruments continue to qualify for stockholders’ equity classification.

Credit Agreement

Background

In April 2011, we entered into a credit agreement (together with the subsequent amendments discussed herein, the “Credit Agreement") with our lenders and concurrently terminated a prior credit agreement. The Credit Agreement provided for $770.0 million of secured credit facilities, comprised of $600.0 million of term loans maturing in October 2017 (the “April 2011 Term Loans") and a $170.0 million revolving credit facility maturing in April 2016 (the “2011 Revolving Credit Facility”), subject to increase (up to a maximum increase of $300.0 million) and reduction from time to time.

We incurred debt issuance costs of $14.8 million associated with the Credit Agreement, which were deferred and were classified within other assets, and were being amortized as interest expense over the term of the Credit Agreement.

2013 Amendment and Restatement of Credit Agreement

On March 6, 2013, we entered into an amendment and restatement agreement with our lenders, providing for the amendment and restatement of the Credit Agreement. The amendment and restatement agreement provided for $850.0 million of senior secured credit facilities, comprised of $650.0 million of term loans maturing in September 2019 (the "March 2013 Term Loans") and a $200.0 million revolving credit facility maturing in March 2018 (the “2013 Revolving Credit Facility”), subject to increase (up to a maximum increase of $300.0 million) and reduction from time to time.

The March 2013 Term Loans were subject to an original issuance discount of 0.50%, or $3.3 million, resulting in net proceeds of $646.7 million. The discount was being amortized as interest expense over the term of the March 2013 Term Loans using the effective interest method.

The majority of the proceeds of the March 2013 Term Loans were used to repay all $576.0 million of outstanding April 2011 Term Loans at the March 6, 2013 closing date of the amendment and restatement agreement.  There were no outstanding borrowings under the 2011 Revolving Credit Facility at the March 6, 2013 closing date.

As further described below, on March 7, 2014, the March 2013 Term Loans were extinguished and replaced with the March 2014 Term Loans, and the basis for determining the interest rate on borrowings under the 2013 Revolving Credit Facility was also amended.

From March 6, 2013 through March 6, 2014, the March 2013 Term Loans and borrowings under the 2013 Revolving Credit Facility, if any, incurred interest, payable quarterly or, in the case of Eurodollar loans with an interest period of three months or shorter, at the end of any interest period, at a per annum rate of, at our election:

• in the case of Eurodollar loans, the Adjusted LIBO Rate plus 3.00% (or, if our corporate credit ratings are BB- and Ba3 or better, 2.75%). The Adjusted LIBO Rate is the greater of (i) 1.00% per annum and (ii) the product of the LIBO Rate and Statutory Reserves (both as defined in the Credit Agreement), and

• in the case of Base Rate loans, the Base Rate plus 2.00% (or, if our corporate credit ratings are BB- and Ba3 or better, 1.75%). The Base Rate is the greatest of (i) the administrative agent's prime rate, (ii) the Federal Funds Effective Rate (as defined in the Credit Agreement) plus 0.50% and (iii) the Adjusted LIBO Rate for a one-month interest period plus 1.00%.

As of January 31, 2014, the interest rate on the March 2013 Term Loans was 4.00%.

At the March 6, 2013 closing date of the amendment and restatement agreement, there were $11.0 million of unamortized deferred debt issuance costs and $2.2 million of unamortized discount associated with the April 2011 Term Loans and the 2011 Revolving Credit Facility. Of the $11.0 million of unamortized deferred debt issuance costs, $3.5 million were associated with commitments under the 2011 Revolving Credit Facility provided by lenders that continued to provide revolving credit commitments under the 2013 Revolving Credit Facility and therefore continued to be deferred, and were being amortized over the remaining term of the Credit Agreement. The remaining $7.5 million of unamortized deferred debt issuance costs and the

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$2.2 million unamortized discount, all of which related to the April 2011 Term Loans, were written off as a $9.7 million loss on early retirement of debt for the year ended January 31, 2014.

We incurred debt issuance costs of approximately $7.5 million associated with the March 2013 Term Loans and the 2013 Revolving Credit Facility, which were deferred and classified within other assets and were being amortized as interest expense over the remaining term of the Credit Agreement. Of these deferred debt issuance costs, $5.0 million were associated with the March 2013 Term Loans and were being amortized using the effective interest rate method, and $2.5 million were associated with the 2013 Revolving Credit Facility and were being amortized on a straight-line basis.

We are required to pay a commitment fee equal to 0.50% per annum of the undrawn portion on the 2013 Revolving Credit Facility, payable quarterly, and customary administrative agent and letter of credit fees. These fees were unchanged from the 2011 Revolving Credit Facility.

2014 Amendments to Credit Agreement

During the nine months ended October 31, 2014, we entered into five separate amendments to the Credit Agreement as described below.

On February 3, 2014, in connection with the acquisition of KANA, we borrowed $125.0 million under the 2013 Revolving Credit Facility and entered into Amendment No. 1 pursuant to which, on such date, we incurred $300.0 million of incremental term loans (the “February 2014 Term Loans”). The net proceeds of these borrowings were used to fund a portion of the KANA purchase price.

The February 2014 Term Loans were subject to an original issuance discount of 0.25%, or $0.8 million. In June 2014, we wrote off $0.4 million of the unamortized discount in connection with the early retirement of a portion of the February 2014 Term Loans, as further described below. This discount is amortized as interest expense over the term of the February 2014 Term Loans using the effective interest method.

The February 2014 Term Loans bear interest, payable quarterly or, in the case of Eurodollar loans with an interest period of three months or less, at the end of the applicable interest period, at a per annum rate of, at our election:

• in the case of Eurodollar loans, the Adjusted LIBO Rate plus 2.75%. The Adjusted LIBO Rate is the greater of (i) 0.75% per annum and (ii) the product of (x) the LIBO Rate and (y) Statutory Reserves (both as defined in the Credit Agreement), and

• in the case of Base Rate loans, the Base Rate plus 1.75%. The Base Rate is the greatest of (i) the administrative agent’s prime rate, (ii) the Federal Funds Effective Rate (as defined in the Credit Agreement) plus 0.50% and (iii) the Adjusted LIBO Rate for a one-month interest period plus 1.00%.

We incurred debt issuance costs of approximately $7.1 million associated with the February 2014 Term Loans, which were deferred and classified within other assets. In June 2014, we wrote off $3.8 million of these deferred costs in connection with the early retirement of a portion of the February 2014 Term Loans, as further described below. These deferred costs are amortized as interest expense over the term of the February 2014 Term Loans using the effective interest rate method.

On February 3, 2014, we also entered into Amendment No. 2 to, among other things, (i) permit us to increase the permitted amount of additional incremental term loans and revolving credit commitments under the Credit Agreement (beyond the February 2014 Term Loans borrowed under Amendment No. 1) by up to, in the aggregate, $200.0 million plus an additional amount such that the First Lien Leverage Ratio (as defined in Amendment No. 2) would not exceed the specified maximum ratio set forth therein, (ii) increase the size of certain negative covenant basket carve-outs, (iii) permit us to issue Permitted Convertible Indebtedness (as defined in Amendment No. 2), and (iv) permit us to refinance all or a portion of any existing class of term loans under the Credit Agreement with replacement term loans.

On February 3, 2014, we also entered into Amendment No. 3 to extend by one year, to January 31, 2016, the step-down date of the leverage ratio covenant applicable to our 2013 Revolving Credit Facility and, subject to the effectiveness of Amendment No. 4 (as described below), reprice the interest rate applicable to borrowings under the 2013 Revolving Credit Facility to the interest rate applicable to the February 2014 Term Loans.

On March 7, 2014, we entered into Amendment No. 4 to refinance all $643.5 million of outstanding March 2013 Term Loans at that date with $643.5 million of new term loans (the “March 2014 Term Loans”). The provisions for determining the interest

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rate on the March 2014 Term Loans are identical to such provisions for the February 2014 Term Loans. The repricing of the interest rate applicable to borrowings under the 2013 Revolving Credit Facility contemplated by Amendment No. 3 became effective on March 7, 2014, upon the effectiveness of Amendment No. 4.

The refinancing of the March 2013 Term Loans with the proceeds of the March 2014 Term Loans pursuant to Amendment No. 4 was accounted for as an extinguishment of the March 2013 Term Loans, and as a result, $4.3 million of unamortized deferred debt issuance costs and $2.8 million of unamortized discount associated with the March 2013 Term Loans as of the March 7, 2014 effective date of Amendment No. 4 were written off as a $7.1 million loss on early retirement of debt for the three months ended April 30, 2014.

As of October 31, 2014, the interest rate on both the February 2014 Term Loans and the March 2014 Term Loans was 3.50%. Taking into account the impact of original issuance discounts, if any, and related deferred debt issuance costs, the effective interest rates on the February 2014 Term Loans and March 2014 Term Loans were approximately 4.03% and 3.58%, respectively, at that date.

We incurred $2.4 million of debt issuance costs in consideration of Amendment No. 4, which were deferred and classified within other assets. In June 2014, we wrote off $1.3 million of these deferred debt issuance costs in connection with the early retirement of a portion of the March 2014 Term Loans, as further described below. These deferred costs are amortized as interest expense over the remaining term of the March 2014 Term Loans using the effective interest rate method. There was no original issuance discount on the March 2014 Term Loans.

On June 18, 2014, we entered into Amendment No. 5, which increased the commitments under the 2013 Revolving Credit Facility to $300.0 million and extended the termination of the 2013 Revolving Credit Facility to September 2018. We incurred $0.7 million of costs in consideration of Amendment No. 5, which were deferred and recorded within other assets, and are being amortized as interest expense on a straight-line basis over the term of the 2013 Revolving Credit Facility.

Early Partial Retirement of Term Loans - June 2014

On June 18, 2014, we utilized the majority of the combined net proceeds from the issuance of the Notes and the concurrent issuance of 5,750,000 shares of common stock to retire $530.0 million of the February 2014 Term Loans and March 2014 Term Loans, and all $106.0 million of then-outstanding borrowings under the 2013 Revolving Credit Facility. As a result, $3.8 million and $1.3 million of deferred debt issuance costs associated with the February 2014 Term Loans and March 2014 Term Loans, respectively, and $0.4 million of unamortized discount associated with the February 2014 Term Loans, were written off as a $5.5 million loss on early retirement of debt for the three months ended July 31, 2014.

Borrowings Under 2013 Revolving Credit Facility

There were no borrowings under the 2013 Revolving Credit Facility at October 31, 2014. The initial interest rate on the February 3, 2014 borrowings under the 2013 Revolving Credit Facility was 4.00%, but was adjusted to 3.50% on March 7, 2014, as further described above.

Other Provisions of the Credit Agreement

Loans under the Credit Agreement are subject to mandatory prepayment requirements with respect to certain asset sales, excess cash flows (as defined in the Credit Agreement), and certain other events. Optional prepayments of the term loans are permitted without premium or penalty, other than customary breakage costs associated with the prepayment of loans bearing interest based on LIBO Rates. Optional prepayments of the February 2014 Term Loans and March 2014 Term Loans are subject to a 1.0% premium applicable in the event of specified repricing transactions on or prior to September 7, 2014. Prepayments are applied first to the eight immediately following scheduled term loan principal payments, then pro rata to other remaining scheduled term loan principal payments, if any, and thereafter as otherwise provided in the Credit Agreement.

Our obligations under the Credit Agreement are guaranteed by substantially all of our domestic subsidiaries and certain foreign subsidiaries that have elected to be disregarded for U.S. tax purposes, and are secured by security interests in substantially all of our and the aforementioned subsidiaries' assets, subject to certain exceptions detailed in the Credit Agreement and related ancillary documents.

The Credit Agreement contains certain customary affirmative and negative covenants for credit facilities of this type, which include limitations on us and our subsidiaries with respect to indebtedness, liens, nature of business, investments and loans, distributions, acquisitions, dispositions of assets, sale-leaseback transactions and transactions with affiliates. The 2013

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Revolving Credit Facility also contains a financial covenant that requires us to maintain a ratio of Consolidated Total Debt to Consolidated EBITDA (each as defined in the Credit Agreement) of no greater than 5.00 to 1 until January 31, 2016 (as amended on February 3, 2014 by Amendment No. 3, as described above) and no greater than 4.50 to 1 thereafter (the "Leverage Ratio Covenant"). The limitations imposed by the covenants are subject to certain exceptions as detailed in the Credit Agreement.

The Credit Agreement provides for certain customary events of default with corresponding grace periods. These events of default include failure to pay principal or interest when due under the Credit Agreement, failure to comply with covenants, any representation or warranty made by us proving to be inaccurate in any material respect, defaults under certain other indebtedness of ours or our subsidiaries, the occurrence of a Change of Control (as defined in the Credit Agreement) with respect to us and certain insolvency or receivership events affecting us or our significant subsidiaries. Upon the occurrence of an event of default resulting from a violation of the Leverage Ratio Covenant, the lenders under our 2013 Revolving Credit Facility may require us to immediately repay outstanding borrowings under the 2013 Revolving Credit Facility and may terminate their commitments to provide loans under that facility. A violation of the Leverage Ratio Covenant would not, by itself, result in an event of default under the February 2014 Term Loans or March 2014 Term Loans but may trigger a cross-default under the term loans in the event we are required to repay outstanding borrowings under the 2013 Revolving Credit Facility. Upon the occurrence of other events of default, the lenders may require us to immediately repay all outstanding borrowings under the Credit Agreement and the lenders under our 2013 Revolving Credit Facility may terminate their commitments to provide loans under the facility.

Future Principal Payments on Term Loans

Prior to June 2014, we were required to make quarterly principal payments on the February 2014 Term Loans and March 2014 Term Loans of $0.8 million and $1.6 million, respectively, through August 1, 2019, with the remaining balances due in September 2019. Following the partial retirements of the February 2014 Term Loans and March 2014 Term Loans in June 2014, future scheduled principal payments on the February 2014 Term Loans and March 2014 Term Loans as of October 31, 2014 are as follows:

(in thousands)	February 2014		March 2014
Years Ending January 31,	Term Loans		Term Loans
2015 (remainder of year)	$	—	$	—
2016	—		—
2017	669		1,434
2018	1,337		2,869
2019	1,337		2,869
2020	127,386		273,241
Total	$	130,729	$	280,413

Interest Expense

The following table presents the components of interest expense incurred on the Notes and on borrowings under our Credit Agreement for the three and nine months ended October 31, 2014 and 2013:

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	Three Months Ended October 31,				Nine Months Ended October 31,
(in thousands)	2014		2013		2014		2013
1.50% Convertible Senior Notes:
Interest expense at 1.50% coupon rate	$	1,500	$	—	$	2,217	$	—
Amortization of debt discount	2,417		—		3,565		—
Amortization of deferred debt issuance costs	335		—		442		—
Total - 1.50% Convertible Senior Notes	$	4,252	$	—	$	6,224	$	—
Borrowings under Credit Agreement:
Interest expense at contractual rates	$	3,677	$	6,628	$	19,559	$	19,659
Amortization of debt discounts	14		115		102		341
Amortization of deferred debt issuance costs	538		529		1,895		1,627
Total - Borrowings under Credit Agreement	$	4,229	$	7,272	$	21,556	$	21,627

7. SUPPLEMENTAL CONDENSED CONSOLIDATED FINANCIAL STATEMENT INFORMATION

Condensed Consolidated Balance Sheets

Inventories consisted of the following as of October 31, 2014 and January 31, 2014: 

	October 31,		January 31,
(in thousands)	2014		2014
Raw materials	$	7,966	$	3,190
Work-in-process	11,865		5,645
Finished goods	1,671		1,858
Total inventories	$	21,502	$	10,693

Condensed Consolidated Statements of Operations

Other income (expense), net consisted of the following for the three and nine months ended October 31, 2014 and 2013: 

	Three Months Ended October 31,						Nine Months Ended October 31,
(in thousands)	2014			2013			2014			2013
Foreign currency (losses) gains, net	$	(1,949	)	$	702		$	(1,035	)	$	(2,504	)
Gains (losses) on derivative financial instruments, net	1,562			(721		)	1,666			(45		)
Other, net	554			(627		)	635			(2,464		)
Total other income (expense), net	$	167		$	(646	)	$	1,266		$	(5,013	)

Condensed Consolidated Statements of Cash Flows

The following table provides supplemental information regarding our condensed consolidated cash flows for the nine months ended October 31, 2014 and 2013: 

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	Nine Months Ended October 31,
(in thousands)	2014		2013
Cash paid for interest	$	22,735	$	17,724
Cash payments (refunds) of income taxes, net	$	10,275	$	(6,463	)
Non-cash investing and financing transactions:
Net non-cash assets acquired in CTI Merger	$	—	$	3,727
Accrued but unpaid purchases of property and equipment	$	3,625	$	1,217
Inventory transfers to property and equipment	$	314	$	658
Liabilities for contingent consideration in business combinations	$	4,947	$	4,557
Stock options exercised, proceeds received subsequent to period end	$	140	$	—
Leasehold improvements funded by lease incentive	$	2,242	$	—

8. STOCKHOLDERS’ EQUITY

Issuance of Common Stock

On June 18, 2014, we completed a public offering of our common stock pursuant to which we issued and sold 5,750,000 shares of common stock at a price of $47.75 per share. We received aggregate proceeds of $265.6 million from the offering, net of underwriters’ discounts and commissions, but before deducting approximately $0.7 million of other offering expenses.

Dividends on Common Stock

We did not declare or pay any dividends on our common stock during the nine months ended October 31, 2014 and 2013. Commencing in May 2007, with our issuance of Series A Convertible Preferred Stock and our entry into a prior credit agreement, and continuing under the terms of our current Credit Agreement, we are subject to certain restrictions on declaring and paying dividends on our common stock. Our Series A Convertible Preferred Stock was canceled on February 4, 2013 in connection with the CTI Merger, further details of which appear in Note 14, "Merger with CTI".

Treasury Stock

Repurchased shares of common stock are recorded as treasury stock, at cost. At October 31, 2014, we held approximately 348,000 shares of treasury stock with a cost of $10.3 million. At January 31, 2014, we held approximately 302,000 shares of treasury stock with a cost of $8.0 million.

During the nine months ended October 31, 2014, we acquired approximately 46,000 shares of treasury stock at a cost of $2.2 million. We did not acquire any treasury stock during the nine months ended October 31, 2013.

Accumulated Other Comprehensive Income (Loss)

Accumulated other comprehensive income (loss) includes items such as foreign currency translation adjustments and unrealized gains and losses on certain marketable securities and derivative financial instruments designated as hedges. Accumulated other comprehensive income (loss) is presented as a separate line item in the stockholders’ equity section of our condensed consolidated balance sheets. Accumulated other comprehensive income (loss) items have no impact on our net income as presented in our condensed consolidated statements of operations.

The following table summarizes changes in the components of our accumulated other comprehensive income (loss) by component for the nine months ended October 31, 2014:

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(in thousands)	Unrealized Gains (Losses) on Derivative Financial Instruments Designated as Hedges			Unrealized Gains on Available-for-Sale Investments		Foreign Currency Translation Adjustments			Total
Accumulated other comprehensive income (loss) at January 31, 2014	$	1,485		$	9	$	(41,219	)	$	(39,725	)
Other comprehensive (loss) income before reclassifications	(7,236		)	13		(13,290		)	(20,513		)
Amounts reclassified out of accumulated other comprehensive income (loss)	(971		)	—		—			(971		)
Net other comprehensive (loss) income, current period	(8,207		)	13		(13,290		)	(21,484		)
Accumulated other comprehensive (loss) income at October 31, 2014	$	(6,722	)	$	22	$	(54,509	)	$	(61,209	)

All amounts presented in the table above are net of income taxes, if applicable.

The amounts reclassified out of accumulated other comprehensive income (loss) into the condensed consolidated statements of operations, with presentation location, for the three and nine months ended October 31, 2014 and 2013 were as follows:

	Three Months Ended October 31,						Nine Months Ended October 31,						Affected Line Items in the Condensed Consolidated Statement of Operations
(in thousands)	2014			2013			2014			2013
Unrealized losses (gains) on derivative financial instruments:
Foreign currency forward contracts	$	80		$	(167	)	$	(65	)	$	(370	)	Cost of product revenue
	68			(178		)	(61		)	(383		)	Cost of service revenue
	499			(1,123		)	(578		)	(2,455		)	Research and development, net
	229			(516		)	(289		)	(1,140		)	Selling, general and administrative
	876			(1,984		)	(993		)	(4,348		)	Total before provision for income taxes
	(111		)	174			22			307			Provision for income taxes
	$	765		$	(1,810	)	$	(971	)	$	(4,041	)	Total, net of income taxes

Noncontrolling Interest

The noncontrolling interest presented in our condensed consolidated financial statements reflects a 50% noncontrolling equity interest in a joint venture which functions as a systems integrator for Asian markets.

9. CONVERTIBLE PREFERRED STOCK

On May 25, 2007, we entered into an agreement with CTI whereby CTI purchased 293,000 shares of our Series A Convertible Preferred Stock for an aggregate cash purchase price of $293.0 million.

On February 4, 2013, the CTI Merger was completed and eliminated CTI's majority ownership and control of us. Each of the 293,000 outstanding shares of Series A Convertible Preferred Stock, all of which was held by CTI, was canceled upon completion of the CTI Merger. Upon cancellation of these 293,000 shares of Series A Convertible Preferred Stock, our authorized shares of preferred stock were reduced from 2,500,000 shares to 2,207,000 shares, in accordance with the certificate of designation for the Series A Convertible Preferred Stock.

Further details regarding the CTI Merger appear in Note 14, "Merger with CTI".

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10. INCOME TAXES

Our interim provision for income taxes is measured using an estimated annual effective tax rate, adjusted for discrete items that occur within the periods presented.  The comparison of our effective tax rate between periods is significantly impacted by the level and mix of earnings and losses by tax jurisdiction, foreign income tax rate differentials, amount of permanent book to tax differences, the impact of unrecognized tax benefits, and the effects of valuation allowances on certain loss jurisdictions.

For the three months ended October 31, 2014, we recorded an income tax provision of $4.8 million on pre-tax income of $16.2 million, which represented an effective income tax rate of 29.3%. The effective income tax rate was significantly affected by the mix and levels of income and losses among taxing jurisdictions. Pre-tax income in our profitable jurisdictions, where we recorded tax provisions, was higher than our domestic losses where we maintain valuation allowances and did not record the related tax benefits.

For the three months ended October 31, 2013, we recorded a $6.0 million provision for income taxes on pre-tax income of $30.0 million, which represented an effective income tax rate of 19.8%. The income tax provision does not include income tax benefits on losses incurred by certain domestic operations where we maintain valuation allowances and is mainly the result of the activities of profitable jurisdictions. Our pre-tax income in profitable jurisdictions, where we record tax provisions, was higher than domestic losses where we maintain valuation allowances and do not record tax benefits.

For the nine months ended October 31, 2014, we recorded an income tax benefit of $31.8 million on a pre-tax loss of $1.9 million, which represented an effective income tax benefit rate of 1,694.5%. The income tax benefit was primarily attributable to the release of $45.2 million of Verint valuation allowances in the quarter ended April 30, 2014. We maintain valuation allowances on our net U.S. deferred income tax assets related to federal and certain state jurisdictions. In connection with the acquisition of KANA during the quarter ended April 30, 2014, we recorded deferred income tax liabilities primarily attributable to acquired intangible assets to the extent the amortization will not be deductible for income tax purposes. Under accounting guidelines, because the amortization of the intangible assets in future periods provides a source of taxable income, we expect to realize a portion of our existing deferred income tax assets. As such, we reduced the valuation allowance recorded on our deferred income tax assets to the extent of the deferred income tax liabilities recorded. Because the valuation allowance related to existing Verint deferred income tax assets, the impact of the release was reflected as a discrete income tax benefit and not as a component of the KANA acquisition accounting. The effective income tax rate was also affected by the mix and levels of income and losses among taxing jurisdictions. Pre-tax income in our profitable jurisdictions, where we recorded tax provisions, was slightly less than our domestic losses where we maintain valuation allowances and did not record the related tax benefits. Excluding the income tax benefit attributable to the valuation allowance release, the result for the nine months ended October 31, 2014 was an income tax provision of $13.4 million on a pre-tax loss $1.9 million, resulting in a negative effective income tax rate of 713.4%.

For the nine months ended October 31, 2013, we recorded an $11.9 million provision for income taxes on pre-tax income of $46.5 million, which represented an effective income tax rate of 25.5%. The income tax provision does not include income tax benefit on losses incurred by certain domestic operations where we maintain valuation allowances and is mainly the result of the activities of profitable jurisdictions. The effective income tax rate was also reduced because CTI received a favorable ruling from the Internal Revenue Service which resulted in adjustments to deferred taxes and an indemnified liability. Our pre-tax income in foreign jurisdictions, where we recorded tax provisions at rates lower than the U.S. federal statutory rate, was higher than domestic losses where we maintain valuation allowances and do not record tax benefits.

As required by the authoritative guidance on accounting for income taxes, we evaluate the realizability of deferred income tax assets on a jurisdictional basis at each reporting date.  Accounting for income taxes guidance requires that a valuation allowance be established when it is more-likely-than-not that all or a portion of the deferred income tax assets will not be realized.  In circumstances where there is sufficient negative evidence indicating that the deferred income tax assets are not more-likely-than-not realizable, we establish a valuation allowance.  We determined that there is sufficient negative evidence to maintain the valuation allowances against our federal and certain state and foreign deferred income tax assets as a result of historical losses in the most recent three-year period in the U.S. and in certain foreign jurisdictions.  We intend to maintain valuation allowances until sufficient positive evidence exists to support a reversal.

We had unrecognized tax benefits of $151.9 million and $145.4 million (excluding interest and penalties) as of October 31, 2014 and January 31, 2014, respectively.  The accrued liability for interest and penalties was $10.3 million and $8.7 million at October 31, 2014 and January 31, 2014, respectively.  Interest and penalties are recorded as a component of the provision for income taxes in our condensed consolidated statements of operations.  As of October 31, 2014 and January 31, 2014, the total amount of unrecognized tax benefits that, if recognized, would impact our effective tax rate were approximately $146.5 million

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and $139.7 million, respectively.  We regularly assess the adequacy of our provisions for income tax contingencies in accordance with the applicable authoritative guidance on accounting for income taxes.  As a result, we may adjust the reserves for unrecognized tax benefits for the impact of new facts and developments, such as changes to interpretations of relevant tax law, assessments from taxing authorities, settlements with taxing authorities, and lapses of statutes of limitation.  Further, we believe that it is reasonably possible that the total amount of unrecognized tax benefits at October 31, 2014 could decrease by approximately $2.9 million in the next twelve months as a result of settlement of certain tax audits or lapses of statutes of limitation.  Such decreases may involve the payment of additional taxes, the adjustment of deferred income taxes including the need for additional valuation allowances, and the recognition of tax benefits.  Our income tax returns are subject to ongoing tax examinations in several jurisdictions in which we operate.  We also believe that it is reasonably possible that new issues may be raised by tax authorities or developments in tax audits may occur which would require increases or decreases to the balance of reserves for unrecognized tax benefits; however, an estimate of such changes cannot reasonably be made.

11. FAIR VALUE MEASUREMENTS

Fair value is defined as the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. When determining the fair value measurements for assets and liabilities required to be recorded at fair value, we consider the principal or most advantageous market in which we would transact and consider assumptions that market participants would use when pricing the asset or liability, such as inherent risk, transfer restrictions, and risk of nonperformance.

Accounting guidance establishes a fair value hierarchy that requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. An instrument’s categorization within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement. This fair value hierarchy consists of three levels of inputs that may be used to measure fair value:

•Level 1:  quoted prices in active markets for identical assets or liabilities;

• Level 2:  inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices in active markets for similar assets or liabilities, quoted prices for identical or similar assets or liabilities in markets that are not active, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities; or

• Level 3:  unobservable inputs that are supported by little or no market activity.

We review the fair value hierarchy classification of our applicable assets and liabilities at each reporting period. Changes in the observability of valuation inputs may result in transfers within the fair value measurement hierarchy. There were no transfers between levels of the fair value measurement hierarchy during the nine months ended October 31, 2014 and 2013.

Assets and Liabilities Measured at Fair Value on a Recurring Basis

Our assets and liabilities measured at fair value on a recurring basis consisted of the following as of October 31, 2014 and January 31, 2014: 

	October 31, 2014
	Fair Value Hierarchy Category
(in thousands)	Level 1		Level 2		Level 3
Assets:
Money market funds	$	194	$	—	$	—
Commercial paper (1)	—		2,999		—
Short-term investments, classified as available-for-sale	—		13,796		—
Foreign currency forward contracts	—		1,886		—
Total assets	$	194	$	18,681	$	—
Liabilities:
Foreign currency forward contracts	$	—	$	7,530	$	—
Contingent consideration - business combinations	—		—		12,779
Total liabilities	$	—	$	7,530	$	12,779

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	January 31, 2014
	Fair Value Hierarchy Category
(in thousands)	Level 1		Level 2		Level 3
Assets:
Money market funds	$	14,023	$	—	$	—
Commercial paper (1)	—		49,991		—
Short-term investments, classified as available for sale	—		9,406		—
Foreign currency forward contracts	—		2,466		—
Total assets	$	14,023	$	61,863	$	—
Liabilities:
Foreign currency forward contracts	$	—	$	846	$	—
Contingent consideration - business combinations	—		—		17,307
Total liabilities	$	—	$	846	$	17,307

(1) Commercial paper investments with remaining maturities of three months or less at time of purchase, classified within

cash and cash equivalents.

The following table presents the changes in the estimated fair values of our liabilities for contingent consideration measured using significant unobservable inputs (Level 3) for the nine months endedOctober 31, 2014 and 2013: 

	Nine Months Ended October 31,
(in thousands)	2014			2013
Fair value measurement at beginning of period	$	17,307		$	25,041
Contingent consideration liabilities recorded for business combinations	4,947			4,557
Changes in fair values, recorded in operating expenses	618			(1,635		)
Payments of contingent consideration	(10,037		)	(17,094		)
Foreign exchange translation and other	(56		)	—
Fair value measurement at end of period	$	12,779		$	10,869

Our estimated liability for contingent consideration represents potential payments of additional consideration for business combinations, payable if certain defined performance goals are achieved. Changes in fair value of contingent consideration are recorded in the condensed consolidated statements of operations within selling, general and administrative expenses.

Fair Value Measurements

Money Market Funds - We value our money market funds using quoted active market prices for such funds.

Short-term Investments - Short-term investments represent investments in commercial paper and corporate bonds classified as available-for-sale. Investments in commercial paper with remaining maturities of three months or less at time of purchase are classified within cash and cash equivalents. The fair values of these investments are estimated using observable market prices for identical securities that are traded in less-active markets, if available. When observable market prices for identical securities are not available, we value these short-term investments using non-binding market price quotes from brokers which we review for reasonableness using observable market data; quoted market prices for similar instruments; or pricing models, such as a discounted cash flow model.

Foreign Currency Forward Contracts - The estimated fair value of foreign currency forward contracts is based on quotes received from the counterparties thereto. These quotes are reviewed for reasonableness by discounting the future estimated cash flows under the contracts, considering the terms and maturities of the contracts and market exchange rates using readily observable market prices for similar contracts.

Contingent Consideration - Business Combinations - The fair value of the contingent consideration related to business combinations is estimated using a probability-adjusted discounted cash flow model. These fair value measurements are based on significant inputs not observable in the market. The key internally developed assumptions used in these models are discount rates and the probabilities assigned to the milestones to be achieved. We remeasure the fair value of the contingent

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consideration at each reporting period, and any changes in fair value resulting from either the passage of time or events occurring after the acquisition date, such as changes in discount rates, or in the expectations of achieving the performance targets, are recorded within selling, general, and administrative expenses. Increases or decreases in discount rates would have inverse impacts on the related fair value measurements, while favorable or unfavorable changes in expectations of achieving performance targets would result in corresponding increases or decreases in the related fair value measurements. We utilized discount rates ranging from 2.0% to 40.0% in our calculations of the estimated fair values of our contingent consideration liabilities as of October 31, 2014. We utilized discount rates ranging from 1.1% to 27.0% in our calculations of the estimated fair values of our contingent consideration liabilities as of January 31, 2014.

Other Financial Instruments

The carrying amounts of accounts receivable, accounts payable, and accrued liabilities and other current liabilities approximate fair value due to their short maturities.

The estimated fair values of our term loans were approximately $408 million and $647 million at October 31, 2014 and January 31, 2014, respectively. The estimated fair values of our term loans are based upon indicative bid and ask prices as determined by the agent responsible for the syndication of our term loans. We consider these inputs to be within Level 3 of the fair value hierarchy because we cannot reasonably observe activity in the limited market in which participations in our term loans are traded. The indicative prices of our term loans provided to us as at each of October 31, 2014 and January 31, 2014 did not significantly differ from par value. The estimated fair value of our revolving credit borrowings, if any, is based upon indicative market values provided by one of our lenders. We had no revolving credit borrowings at October 31, 2014 and January 31, 2014.

The estimated fair value of our Notes was approximately $447 million at October 31, 2014. The estimated fair value of the Notes is determined based on quoted bid and ask prices in the over-the-counter market in which the Notes trade. We consider these inputs to be within Level 2 of the fair value hierarchy.

Assets and Liabilities Not Measured at Fair Value on a Recurring Basis

In addition to assets and liabilities that are measured at fair value on a recurring basis, we also measure certain assets and liabilities at fair value on a nonrecurring basis. Our non-financial assets, including goodwill, intangible assets and property, plant and equipment, are measured at fair value when there is an indication of impairment and the carrying amount exceeds the asset’s projected undiscounted cash flows. These assets are recorded at fair value only when an impairment charge is recognized.

12. DERIVATIVE FINANCIAL INSTRUMENTS

Our primary objective for holding derivative financial instruments is to manage foreign currency exchange rate risk and interest rate risk, when deemed appropriate. We enter into these contracts in the normal course of business to mitigate risks and not for speculative purposes.

Foreign Currency Forward Contracts

Under our risk management strategy, we periodically use derivative financial instruments to manage our short-term exposures to fluctuations in foreign currency exchange rates. We utilize foreign currency forward contracts to hedge certain operational cash flow exposures resulting from changes in foreign currency exchange rates. These cash flow exposures result from portions of our forecasted operating expenses, primarily compensation and related expenses, which are transacted in currencies other than the U.S. dollar, primarily the Israeli shekel and the Canadian dollar. We also periodically utilize foreign currency forward contracts to manage exposures resulting from forecasted customer collections to be remitted in currencies other than the applicable functional currency, and exposures from cash, cash equivalents and short-term investments denominated in currencies other than the applicable functional currency. Our joint venture, which has a Singapore dollar functional currency, also utilizes foreign exchange forward contracts to manage its exposure to exchange rate fluctuations related to settlements of liabilities denominated in U.S. dollars. These foreign currency forward contracts are reported at fair value on our consolidated balance sheets and generally have maturities of no longer than twelve months, although occasionally we will execute a contract that extends beyond twelve months, depending upon the nature of the underlying risk.

The counterparties to our derivative financial instruments consist of several major international financial institutions.  We regularly monitor the financial strength of these institutions. While the counterparties to these contracts expose us to credit-

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related losses in the event of a counterparty’s non-performance, the risk would be limited to the unrealized gains on such affected contracts. We do not anticipate any such losses.

Certain of these foreign currency forward contracts are not designated as hedging instruments under accounting guidance for derivatives, and gains and losses from changes in their fair values are therefore reported in other income (expense), net.  Changes in the fair values of foreign currency forward contracts that are designated and effective as cash flow hedges are recorded net of related tax effects in accumulated other comprehensive income (loss), and are reclassified to the condensed consolidated statements of operations when the effects of the item being hedged are recognized in the condensed consolidated statements of operations.

Notional Amounts of Derivative Financial Instruments

Our outstanding derivative financial instruments consisted only of foreign currency forward contracts with notional amounts of $149.1 million and $127.6 million as of October 31, 2014 and January 31, 2014, respectively.

Fair Values of Derivative Financial Instruments

The fair values of our derivative financial instruments as of October 31, 2014 and January 31, 2014 were as follows: 

	October 31, 2014
	Assets			Liabilities
(in thousands)	Balance Sheet Classification	Fair Value		Balance Sheet Classification	Fair Value
Derivative financial instruments designated as hedging instruments:
Foreign currency forward contracts	—	$	—	Accrued expenses and other liabilities	$	7,530
Total derivative financial instruments designated as hedging instruments		$	—		$	7,530
Derivative financial instruments not designated as hedging instruments:
Foreign currency forward contracts	Prepaid expenses and other current assets	$	1,886	—	$	—
Total derivative financial instruments not designated as hedging instruments		$	1,886		$	—

	January 31, 2014
	Assets			Liabilities
(in thousands)	Balance Sheet Classification	Fair Value		Balance Sheet Classification	Fair Value
Derivative financial instruments designated as hedging instruments:
Foreign currency forward contracts	Prepaid expenses and other current assets	$	2,245	Accrued expenses and other liabilities	$	769
Total derivative financial instruments designated as hedging instruments		$	2,245		$	769
Derivative financial instruments not designated as hedging instruments:
Foreign currency forward contracts	Prepaid expenses and other current assets	$	221	Accrued expenses and other liabilities	$	77
Total derivative financial instruments not designated as hedging instruments		$	221		$	77

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Derivative Financial Instruments in Cash Flow Hedging Relationships

The effects of derivative financial instruments designated as cash flow hedging instruments as of October 31, 2014 and January 31, 2014, and for the three and nine months ended October 31, 2014 and 2013 were as follows:

	Net (Losses) Gains Recognized in Accumulated Other Comprehensive  Income (Loss)					Classification of Net (Losses) Gains Reclassified from Other Comprehensive Loss into the Condensed Consolidated Statements of Operations	Net (Losses) Gains Reclassified from Other Comprehensive  Income (Loss) into the Condensed Consolidated Statements of Operations
	October 31,			January 31,			Three Months Ended October 31,					Nine Months Ended October 31,
(in thousands)	2014			2014			2014			2013		2014		2013
Foreign currency forward contracts	$	(6,722	)	$	1,485	Operating Expenses	$	(876	)	$	1,984	$	993	$	4,348

There were no gains or losses from ineffectiveness of these hedges recorded for the three and nine months endedOctober 31, 2014 and 2013. All of the foreign currency forward contracts underlying the $6.7 million of net unrealized losses recorded in our accumulated other comprehensive loss at October 31, 2014 mature within twelve months, and therefore we expect all such losses to be reclassified into earnings within the next twelve months.

DerivativeFinancial InstrumentsNot Designated as Hedging Instruments

Gains (losses) recognized on derivative financial instruments not designated as hedging instruments in our condensed consolidated statements of operations for the three and nine months endedOctober 31, 2014 and 2013 were as follows:

	Classification in Condensed Consolidated Statements of Operations	Three Months Ended October 31,					Nine Months Ended October 31,
(in thousands)		2014		2013			2014		2013
Foreign currency forward contracts	Other income (expense), net	$	1,562	$	(721	)	1,665		(44		)
Total		$	1,562	$	(721	)	$	1,665	$	(44	)

13. STOCK-BASED COMPENSATION

We recognized stock-based compensation expense in the following line items on the condensed consolidated statements of operations for the three and nine months ended October 31, 2014 and 2013:

	Three Months Ended October 31,				Nine Months Ended October 31,
(in thousands)	2014		2013		2014		2013
Component of condensed consolidated statements of operations:
Cost of revenue - product	$	224	$	243	$	675	$	572
Cost of revenue - service and support	941		458		2,816		1,208
Research and development, net	1,271		890		3,881		2,432
Selling, general and administrative	10,190		8,138		31,181		20,942
Stock-based compensation expense	$	12,626	$	9,729	$	38,553	$	25,154

The following table summarizes stock-based compensation expense by type of award for the three and nine months ended October 31, 2014 and 2013:

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	Three Months Ended October 31,				Nine Months Ended October 31,
(in thousands)	2014		2013		2014		2013
Component of stock-based compensation expense:
Restricted stock units and restricted stock awards	$	11,942	$	8,335	$	35,373	$	21,727
Stock options	—		45		15		152
Phantom stock units	40		23		120		87
Stock bonus program	644		1,326		3,045		3,188
Stock-based compensation expense	$	12,626	$	9,729	$	38,553	$	25,154

Total stock-based compensation expense by classification was as follows for the three and nine months ended October 31, 2014 and 2013: 

	Three Months Ended October 31,				Nine Months Ended October 31,
(in thousands)	2014		2013		2014			2013
Equity-classified awards	$	11,942	$	8,318	$	35,702		$	22,304
Stock bonus program and other reclassifications	—		—		(654		)	(298		)
Total equity-settled awards	11,942		8,318		35,048			22,006
Other liability-classified awards	684		1,411		3,505			3,148
Total stock-based compensation expense	$	12,626	$	9,729	$	38,553		$	25,154

The increase in stock-based compensation expense in the three and nine months ended October 31, 2014, compared to the corresponding prior-year periods, resulted primarily from the combination of an increase in the number of outstanding RSUs, higher expenses associated with performance-based RSU's, and a general increase in the price of our common stock, which is used to determine the grant-date fair value of an RSU.

Awards under our stock bonus program are accounted for as liability-classified awards because the obligations are based

predominantly on fixed monetary amounts that are generally known at inception of the obligation, to be settled with a variable

number of shares of our common stock. Amounts reported in the stock bonus program and other reclassifications caption in the preceding table primarily represent stock bonus expenses recognized in those periods for awards that were subsequently settled with equity during the nine months ended October 31, 2014 and 2013. Expenses associated with stock bonus program awards that remain outstanding as of October 31, 2014 and 2013 are reflected within other liability-classified awards in the preceding table. Our other liability-classified awards also include our phantom stock awards, the values of which track the market price of our common stock and are therefore subject to volatility, and which are settled with cash payments equivalent to the market value of our common stock upon vesting. Upon settlement of other liability-classified awards with equity, the current period's compensation expense associated with those awards is reported within equity-classified awards in the preceding table.

Shares Available for Grants Under Stock Plans

On July 27, 2014, our 2004 Stock Incentive Compensation Plan (the “2004 Plan”) expired in accordance with its terms and, on that date, approximately 53,000 shares of common stock remained available under the 2004 Plan as a result of termination, forfeiture or expiration of awards previously granted under the 2004 Plan. Upon expiration of the 2004 Plan, these shares became available for issuance under our 2010 Long-Term Stock Incentive Plan (the “2010 Plan”) pursuant to an amendment to the 2010 Plan which had been approved by our stockholders on June 15, 2012.

Stock Options

We have generally not granted stock options subsequent to January 31, 2006, other than in connection with several business combinations whereby stock options to purchase shares of the acquired companies were converted into stock options to purchase shares of our common stock.

The following table summarizes stock option activity and related information for the nine months ended October 31, 2014:

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(in thousands, except per share data)	Stock Options		Weighted-Average Exercise Price
Options outstanding, January 31, 2014	516		$	34.60
Options exercised	(378	)	$	34.72
Options forfeited or expired	(2	)	$	31.28
Options outstanding, October 31, 2014	136		$	34.30
Options exercisable at October 31, 2014	136		$	34.30

Cash proceeds received from the exercise of stock options were $13.1 million for the nine months ended October 31, 2014.

At October 31, 2014, there was no unrecognized compensation expense associated with outstanding stock options, because all outstanding stock options were fully vested at that date.

Restricted Stock Units and Restricted Stock Awards

We periodically award restricted stock units, as well as shares of restricted stock, to our directors, officers, and other employees. These awards contain various vesting conditions and are subject to certain restrictions and forfeiture provisions prior to vesting.

The following table summarizes restricted stock unit activity and related information for the nine months ended October 31, 2014:

(in thousands, except per share data)	RSU's		Weighted-Average Grant Date Fair Value
RSU's outstanding, January 31, 2014	2,250		$	33.77
RSU's granted	1,578		$	46.19
RSU's released	(1,020	)	$	34.28
RSU's forfeited	(170	)	$	38.87
RSU's outstanding, October 31, 2014	2,638		$	40.68

Substantially all of the restricted stock units granted during the year ended January 31, 2013 included a provision which allows those awards to be settled with cash payments upon vesting, rather than with delivery of common stock, at the discretion of our board of directors. As of October 31, 2014, for such awards that remain outstanding, settlement of these awards with cash payments was not considered probable, and therefore these awards have been accounted for as equity-classified awards.

Activity presented in the table above includes shares earned and released under our stock bonus program, further details regarding which appear below under "Stock Bonus Program".

As of October 31, 2014, there was approximately $70.1 million of total unrecognized compensation expense, net of estimated forfeitures, related to unvested restricted stock units, which is expected to be recognized over a weighted-average period of 1.7 years. The unrecognized compensation expense does not include compensation expense related to shares for which a grant date has been established but the requisite service period has not begun.

Phantom Stock Units

We have periodically issued phantom stock units to certain non-officer employees that settle, or are expected to settle, with cash payments upon vesting. Like equity-settled awards, phantom stock units are awarded with vesting conditions and are subject to certain forfeiture provisions prior to vesting.

Phantom stock unit activity for the nine months ended October 31, 2014 and 2013 was not significant.

Stock Bonus Program

In September 2011, our board of directors approved a stock bonus program under which eligible employees may receive a portion of their bonuses in the form of discounted shares of our common stock. Executive officers have been eligible to participate in this program from and after the year ended January 31, 2014 to the extent that shares remained available for awards following the enrollment of all other participants. Shares awarded to executive officers with respect to the discount

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feature of the program are subject to a one year vesting period. Obligations under this program are accounted for as liabilities, because the obligations are based predominantly on fixed monetary amounts that are generally known at inception of the obligation, to be settled with a variable number of shares of common stock determined using a discounted average price of our common stock.

For the year ended January 31, 2014, our board of directors approved up to 150,000 shares of common stock for awards under this program and a discount of 15% (the "2014 stock bonus program"). Approximately 91,000 shares of our common stock were issued to participants under the 2014 stock bonus program during the three months ended July 31, 2014, which completed our obligations for such program year under this program.

For the year ending January 31, 2015, our board of directors has approved the issuance of up to 125,000 shares of common stock, and a discount of 15%, for awards under this program (the "2015 stock bonus program"). Awards earned under the 2015 stock bonus program are expected to be determined during the first half of the year ending January 31, 2016.

Total accrued liabilities for stock bonus programs were $3.4 million and $4.9 million as of October 31, 2014 and January 31, 2014, respectively.

14. MERGER WITH CTI

Prior to February 4, 2013, Comverse Technology, Inc. ("CTI") beneficially owned a majority of our common stock (assuming the conversion of CTI’s holdings of our Series A Convertible Preferred Stock into common stock) and held a majority of the voting power of our common stock. As of January 31, 2013, shortly before the CTI Merger (as described below), CTI’s beneficial ownership position in us was approximately 53.5%.

On August 12, 2012, we entered into an agreement and plan of merger agreement with CTI (the "CTI Merger Agreement"), providing for the merger of CTI with and into our new, wholly owned subsidiary (the "CTI Merger"). The CTI Merger was completed on February 4, 2013. The CTI Merger eliminated CTI's majority ownership and control of us.

At the closing of the CTI Merger, approximately 28.6 million newly issued shares of our common stock were exchanged for approximately 220.0 million issued and outstanding shares of CTI common stock. In addition, the 16.3 million shares of our common stock and all shares of our Series A Convertible Preferred Stock held by CTI at the time of the CTI Merger were canceled.

Holders of shares of our common stock immediately prior to the completion of the CTI Merger, other than CTI, continued to own their existing shares, which were not affected by the CTI Merger.

Prior to the CTI Merger, CTI had distributed to its shareholders or otherwise disposed of substantially all of its assets, other than its interests in us, including the distribution of all of the outstanding common stock of its subsidiary, Comverse, Inc. ("Comverse") to its shareholders (the “Comverse share distribution”). As a result, at the time of the CTI Merger, the net assets of CTI consisted primarily of its controlling equity interests in Verint, as well as certain residual cash and cash equivalents and other sundry net assets. In addition, CTI had net operating loss ("NOL") carryforwards for income tax reporting purposes, and other tax attributes. No CTI employees, operations or business processes moved to the combined company in the CTI Merger. As a result, our existing net assets and operations represented the vast majority of the net assets and all of the operations of the combined company.

In connection with the Comverse share distribution, CTI and Comverse entered into several agreements to govern certain ongoing relationships between CTI and Comverse after the Comverse share distribution and to provide for an orderly transition.

In one of these agreements, Comverse agreed to indemnify CTI and its affiliates (including Verint following the CTI Merger) against certain losses arising as a result of the CTI Merger and the Comverse share distribution. Certain of Comverse's indemnification obligations are capped at $25.0 million and certain obligations are uncapped. Pursuant to this agreement, at the closing of the CTI Merger, CTI placed $25.0 million into an escrow account to support indemnification claims to the extent made against Comverse by CTI and its affiliates (including Verint after the CTI Merger). The balance of such escrow account was released to Comverse on August 4, 2014.

Condensed Consolidated Financial Statement Impact

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For financial reporting purposes, the CTI Merger was accounted for as our acquisition of CTI in a combination of entities under common control. We are the continuing reporting entity. As a result, upon completion of the CTI Merger on February 4, 2013, our consolidated stockholders' equity was adjusted to reflect the $285.5 million carrying value of our Series A Convertible Preferred Stock, all of which was held by CTI, and the $14.1 million carrying value of CTI's net assets (other than its equity interests in us), as increases to our additional paid-in capital. Prior to the CTI Merger, our Series A Convertible Preferred Stock had been classified as mezzanine equity on our consolidated balance sheet.

15. RELATED PARTY TRANSACTIONS

Transactions with CTI

As discussed in Note 14, "Merger with CTI", on February 4, 2013 we completed the CTI Merger, which eliminated CTI's majority ownership and control of us. As of January 31, 2013, prior to the CTI Merger, CTI beneficially owned approximately 53.5%, and also held a majority of the voting power, of our common stock on an as-converted basis.

Other Related Party Transactions

Our joint venture incurs certain operating expenses, including office rent and other administrative costs, and realizes revenue, under arrangements with one of its noncontrolling shareholders. Transactions with this noncontrolling shareholder of the joint venture during the nine months ended October 31, 2014 and 2013 were not significant.

16. COMMITMENTS AND CONTINGENCIES

Warranty Liability

The following table summarizes the activity in our warranty liability, which is included in accrued expenses and other liabilities in the condensed consolidated balance sheets, for the nine months ended October 31, 2014 and 2013:

	Nine Months Ended October 31,
(in thousands)	2014			2013
Warranty liability, beginning of period	$	706		$	1,045
Provision credited against expenses	(93		)	(253		)
Foreign currency translation and other	(5		)	(2		)
Warranty liability, end of period	$	608		$	790

Legal Proceedings

On March 26, 2009, legal actions were commenced by Ms. Orit Deutsch, a former employee of our subsidiary, Verint Systems Limited ("VSL"), against VSL in the Tel Aviv Regional Labor Court (Case Number 4186/09) (the “Deutsch Labor Action”) and against CTI in the Tel Aviv District Court (Case Number 1335/09) (the “Deutsch District Action”). In the Deutsch Labor Action, Ms. Deutsch filed a motion to approve a class action lawsuit on the grounds that she purports to represent a class of our employees and former employees who were granted Verint and CTI stock options and were allegedly damaged as a result of the suspension of option exercises during our previous extended filing delay period. In the Deutsch District Action, in addition to a small amount of individual damages, Ms. Deutsch is seeking to certify a class of plaintiffs who were allegedly damaged due to their inability to exercise Verint and CTI stock options as a result of alleged negligence by CTI in its financial reporting. The class certification motions do not specify an amount of damages. On February 8, 2010, the Deutsch Labor Action was dismissed for lack of material jurisdiction and was transferred to the Tel Aviv District Court and consolidated with the Deutsch District Action. On March 16, 2009 and March 26, 2009, respectively, legal actions were commenced by Ms. Roni Katriel, a former employee of CTI's former subsidiary, Comverse Limited, against Comverse Limited in the Tel Aviv Regional Labor Court (Case Number 3444/09) (the “Katriel Labor Action”) and against CTI in the Tel Aviv District Court (Case Number 1334/09) (the “Katriel District Action”). In the Katriel Labor Action, Ms. Katriel is seeking to certify a class of plaintiffs who were granted CTI stock options and were allegedly damaged as a result of the suspension of option exercises during CTI's previous extended filing delay period. In the Katriel District Action, in addition to a small amount of individual damages, Ms. Katriel is seeking to certify a class of plaintiffs who were allegedly damaged due to their inability to exercise CTI stock options as a result of alleged negligence by CTI in its financial reporting. The class certification motions do not specify an amount of

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damages. On March 2, 2010, the Katriel Labor Action was transferred to the Tel Aviv District Court, based on an agreed motion filed by the parties requesting such transfer.

On April 4, 2012, Ms. Deutsch and Ms. Katriel filed an uncontested motion to consolidate and amend their claims and on June 7, 2012, the District Court allowed Ms. Deutsch and Ms. Katriel to file the consolidated class certification motion and an amended consolidated complaint against VSL, CTI, and Comverse Limited. Following CTI's announcement of its intention to effect the Comverse share distribution, on July 12, 2012, the plaintiffs filed a motion requesting that the District Court order CTI to set aside up to $150 million in assets to secure any future judgment. The District Court ruled that it would not decide this motion until the Deutsch and Katriel class certification motion was heard. Plaintiffs initially filed a motion to appeal this ruling in August 2012, but subsequently withdrew it in July 2014.

Prior to the consummation of the Comverse share distribution, CTI either sold or transferred substantially all of its business operations and assets (other than its equity ownership interests in us and Comverse) to Comverse or unaffiliated third parties. On October 31, 2012, CTI completed the Comverse share distribution, in which it distributed all of the outstanding shares of common stock of Comverse to CTI's shareholders. As a result of the Comverse share distribution, Comverse became an independent public company and ceased to be a wholly owned subsidiary of CTI, and CTI ceased to have any material assets other than its equity interest in us.

On February 4, 2013, we completed the CTI Merger. As a result of the CTI Merger, we have assumed certain rights and liabilities of CTI, including any liability of CTI arising out of the Deutsch District Action and the Katriel District Action. However, under the terms of the Distribution Agreement between CTI and Comverse relating to the Comverse share distribution, we, as successor to CTI, are entitled to indemnification from Comverse for any losses we suffer in our capacity as successor-in-interest to CTI in connection with the Deutsch District Action and the Katriel District Action.

Following an attempt to mediate the dispute, on July 1, 2014, the plaintiffs filed a notice with the District Court informing it that the mediation process had been unsuccessful. As a result, the parties recently filed summations on the plaintiffs’ motion to certify the suit as a class action, which will be considered by the District Court.

From time to time we or our subsidiaries may be involved in legal proceedings and/or litigation arising in the ordinary course of our business. While the outcome of these matters cannot be predicted with certainty, we do not believe that the outcome of any current claims will have a material effect on our consolidated financial position, results of operations, or cash flows.

17. SEGMENT INFORMATION

Operating segments are defined as components of an enterprise about which separate financial information is available that is evaluated regularly by the enterprise’s chief operating decision maker ("CODM"), or decision making group, in deciding how to allocate resources and in assessing performance. Our Chief Executive Officer is our CODM.

We conduct our business through three operating segments—Enterprise Intelligence, Communications Intelligence, and Video Intelligence. Organizing our business through three operating segments allows us to align our resources and domain expertise to effectively address the Actionable Intelligence market. We address the Customer Engagement Optimization market opportunity through solutions from our Enterprise Intelligence segment. We address the Security Intelligence market opportunity through solutions from our Communications Intelligence segment and Video Intelligence segment, and we address the Fraud, Risk, and Compliance market opportunity through solutions from all three operating segments.

We measure the performance of our operating segments based upon operating segment revenue and operating segment contribution. Operating segment contribution includes segment revenue and expenses incurred directly by the segment, including material costs, service costs, research and development and selling, marketing, and administrative expenses. We do not allocate certain expenses, which include the majority of general and administrative expenses, facilities and communication expenses, purchasing expenses, manufacturing support and logistic expenses, depreciation and amortization, amortization of capitalized software development costs, stock-based compensation, and special charges such as restructuring costs when calculating operating segment contribution. These expenses are included in the unallocated expenses section of the table presented below. Revenue from transactions between our operating segments is not material.

Revenue adjustments represent revenue of acquired companies which is included within segment revenue reviewed by the CODM, but not recognizable within GAAP revenue.  These adjustments primarily relate to the acquisition-date excess of the historical carrying value over the fair value of acquired companies’ future maintenance and service performance obligations. As the obligations are satisfied, we report our segment revenue using the historical carrying values of these obligations, which we

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believe better reflects our ongoing maintenance and service revenue streams, whereas GAAP revenue is reported using the obligations’ acquisition-date fair values.

With the exception of goodwill and acquired intangible assets, we do not identify or allocate our assets by operating segment.  Consequently, it is not practical to present assets by operating segment.  There were no material changes in the allocation of goodwill and acquired intangible assets by operating segment during the nine months ended October 31, 2014 and 2013.  The allocations of goodwill and acquired intangible assets by operating segment appear in Note 5, "Intangible Assets and Goodwill".

Operating results by segment for the three and nine months ended October 31, 2014 and 2013 were as follows: 

	Three Months Ended October 31,						Nine Months Ended October 31,
(in thousands)	2014			2013			2014			2013
Revenue:
Enterprise Intelligence:
Segment revenue	$	171,270		$	126,220		$	506,382		$	365,385
Revenue adjustments	(5,744		)	(323		)	(25,263		)	(692		)
	165,526			125,897			481,119			364,693
Communications Intelligence:
Segment revenue	93,241			71,249			256,688			199,163
Revenue adjustments	(201		)	(119		)	(523		)	(530		)
	93,040			71,130			256,165			198,633
Video Intelligence:
Segment revenue	24,008			27,287			79,499			88,388
Revenue adjustments	—			—			—			(167		)
	24,008			27,287			79,499			88,221
Total revenue	$	282,574		$	224,314		$	816,783		$	651,547
Segment contribution:
Enterprise Intelligence	$	67,750		$	56,772		$	195,320		$	155,169
Communications Intelligence	32,495			24,457			79,966			62,223
Video Intelligence	4,500			5,546			18,108			20,482
Total segment contribution	104,745			86,775			293,394			237,874
Unallocated expenses, net:
Amortization of acquired intangible assets	19,463			8,085			57,142			26,113
Stock-based compensation	12,626			9,729			38,553			25,154
Other unallocated expenses	48,298			31,130			160,875			103,800
Total unallocated expenses, net	80,387			48,944			256,570			155,067
Operating income	24,358			37,831			36,824			82,807
Other expense, net	(8,119		)	(7,820		)	(38,700		)	(36,316		)
Income (loss) before provision for (benefit from) income taxes	$	16,239		$	30,011		$	(1,876	)	$	46,491

Item 2.     Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following management’s discussion and analysis is provided to assist readers in understanding our financial condition, results of operations, and cash flows. This discussion should be read in conjunction with our audited consolidated financial statements and the notes thereto included in our Annual Report on Form 10-K for the year ended January 31, 2014 and our unaudited condensed consolidated financial statements and notes thereto contained in this report. This discussion contains a number of forward-looking statements, all of which are based on our current expectations and all of which could be affected by uncertainties and risks. Our actual results may differ materially from the results contemplated in these forward-looking statements as a result of many factors including, but not limited to, those described under “Cautionary Note on Forward-Looking Statements”.

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Our Business

Verint is a global leader in Actionable Intelligence solutions. Actionable Intelligence is a necessity in a dynamic world of massive information growth because it empowers organizations with crucial insights and enables decision makers to anticipate, respond, and take action. With Verint solutions and value-added services, organizations of all sizes and across many industries can make more timely and effective decisions. Today, more than 10,000 organizations in over 180 countries, including over 80 percent of the Fortune 100, use Verint solutions to improve enterprise performance and make the world a safer place.

Our Actionable Intelligence solutions help organizations address three important challenges: Customer Engagement Optimization; Security Intelligence; and Fraud, Risk, and Compliance. We help our customers capture large amounts of information from numerous data types and sources, use analytics to glean insights from the information, and leverage the resulting Actionable Intelligence to help achieve their customer engagement, enhanced security, and risk mitigation goals.

Headquartered in Melville, New York, we support our customers around the globe directly and with an extensive network of selling and support partners.

We conduct our business through three operating segments—Enterprise Intelligence, Communications Intelligence, and Video Intelligence. Organizing our business through three operating segments allows us to align our resources and domain expertise to effectively address the Actionable Intelligence market. We address the Customer Engagement Optimization market opportunity through solutions from our Enterprise Intelligence segment. We address the Security Intelligence market opportunity through solutions from our Communications Intelligence segment and Video Intelligence segment, and we address the Fraud, Risk, and Compliance market opportunity through solutions from all three operating segments.

Recent Developments

On February 3, 2014, we completed the acquisition of KANA for net cash consideration of $516.6 million, through the merger of KANA Software, Inc.'s parent holding company, Kay Technology Holdings, Inc. with an indirect, wholly owned subsidiary of ours, with Kay Technology Holdings, Inc. continuing as the surviving company and as our wholly owned subsidiary.

The acquisition was funded through a combination of cash on hand, $300.0 million of incremental term loans incurred in connection with an amendment to our Credit Agreement, and $125.0 million of borrowings under our revolving credit facility.

KANA, based in Sunnyvale, California and with global operations, is a leading provider of on-premises and cloud-based solutions which create differentiated, personalized, and integrated customer experiences for large enterprises and mid-market organizations. KANA is being integrated into our Enterprise Intelligence operating segment.

On March 31, 2014, we completed the acquisition of all of the outstanding shares of UTX, a provider of certain mobile device tracking solutions for security applications, from UTX Limited. UTX Limited was our supplier of these products to our Communications Intelligence operating segment prior to the transaction. The purchase price for UTX was $84.2 million, including $82.9 million of cash paid at closing. The acquisition of UTX was funded with cash on hand. UTX is based in the EMEA region.

On June 18, 2014, we completed concurrent public offerings of 5,750,000 shares of our common stock and $400.0 million in aggregate principal amount of 1.50% convertible senior notes due June 1, 2021 (the "Notes"). The aggregate net proceeds from the concurrent offerings were $657.5 million, after deducting underwriters’ discounts and commissions, but excluding other offering expenses. We used $15.6 million of the net proceeds to pay the net costs of an arrangement consisting of the purchase of call options and the sale of warrants to purchase our common stock, the intent of which is to reduce the potential dilution to our common stock upon conversion of the Notes. We used the remainder of the net proceeds to repay a portion of the outstanding indebtedness under our Credit Agreement.

Further details regarding our acquisitions and our long-term debt appear in Note 4, "Business Combinations" and Note 6, "Long-Term Debt", respectively, to our condensed consolidated financial statements included under Item 1 of this report.

Critical Accounting Policies and Estimates

Note 1, “Summary of Significant Accounting Policies” to the audited consolidated financial statements in our Annual Report on Form 10-K for the year ended January 31, 2014 describes the significant accounting policies and methods used in the preparation of the condensed consolidated financial statements appearing in this report. The accounting policies that reflect our

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more significant estimates, judgments and assumptions in the preparation of our consolidated financial statements are described in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Item 7 of our Annual Report on Form 10-K for the year ended January 31, 2014, and include the following:

• Revenue recognition;

• Accounting for business combinations;

• Impairment of goodwill and other intangible assets;

• Accounting for income taxes;

• Contingencies;

• Accounting for stock-based compensation;

• Accounting for cost of revenue; and

• Allowance for doubtful accounts

We did not identify any significant changes to our critical accounting policies and estimates during the nine months ended October 31, 2014.

Results of Operations

Seasonality and Cyclicality

As is typical for many software and technology companies, our business is subject to seasonal and cyclical factors. On an organic basis, our revenue and operating income are typically highest in the fourth quarter and lowest in the first quarter. Moreover, revenue and operating income in the first quarter of a new year may be lower than in the fourth quarter of the preceding year, potentially by a significant margin on an organic basis. In addition, we generally receive a higher volume of orders in the last month of a quarter, with orders concentrated in the later part of that month. We believe that these seasonal and cyclical factors primarily reflect customer spending patterns and budget cycles, as well as the impact of incentive compensation plans for our sales personnel. While seasonal and cyclical factors such as these are common in the software and technology industry, this pattern should not be considered a reliable indicator of our future revenue or financial performance.  Many other factors, including general economic conditions, may also have an impact on our business and financial results.

Overview of Operating Results

The following table sets forth a summary of certain key financial information for the three and nine months endedOctober 31, 2014 and 2013:

	Three Months Ended October 31,				Nine Months Ended October 31,
(in thousands, except per share data)	2014		2013		2014		2013
Revenue	$	282,574	$	224,314	$	816,783	$	651,547
Operating income	$	24,358	$	37,831	$	36,824	$	82,807
Net income attributable to Verint Systems Inc. common shares	$	10,670	$	22,487	$	26,348	$	30,696
Net income per common share attributable to Verint Systems Inc.:
Basic	$	0.18	$	0.42	$	0.46	$	0.58
Diluted	$	0.17	$	0.42	$	0.45	$	0.57

Three Months EndedOctober 31, 2014 compared to Three Months EndedOctober 31, 2013. Our revenue increased approximately $58.3 million, or 26%, to $282.6 million in the three months endedOctober 31, 2014 from $224.3 million in the three months endedOctober 31, 2013.  In our Enterprise Intelligence segment, revenue increased approximately $39.6 million, or 31%, to $165.5 million in the three months endedOctober 31, 2014 from $125.9 million in the three months endedOctober 31, 2013.  The increase consisted of a $33.5 million increase in service and support revenue and a $6.1 millionincrease in product revenue.  In our Communications Intelligence segment, revenue increased approximately $21.9 million, or 31%, from $71.1 million in the three months endedOctober 31, 2013 to $93.0 million in the three months endedOctober 31, 2014.  The increase consisted of a $13.1 millionincrease in product revenue and an $8.8 millionincrease in service and support revenue. In our Video Intelligence segment, revenue decreased approximately $3.3 million, or 12%, from $27.3 million in the three months endedOctober 31, 2013 to $24.0 million in the three months endedOctober 31, 2014, primarily due to a decrease in product revenue.  For additional details on our revenue by segment, see "—Revenue by Operating Segment".  Revenue in the

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Americas, EMEA, and the Asia-Pacific ("APAC") region represented approximately 53%, 33%, and 14%, respectively, of our total revenue in the three months endedOctober 31, 2014, compared to approximately 53%, 22%, and 25%, respectively, in the three months endedOctober 31, 2013. The change in the percentage of revenue by geographical region in the three months ended October 31, 2014 compared to the three months ended October 31, 2013 primarily reflected the timing of revenue recognized in those regions under several large contracts, primarily in our Communications Intelligence segment. Further details of changes in revenue are provided below.

Operating income was $24.4 million in the three months endedOctober 31, 2014 compared to $37.8 million in the three months endedOctober 31, 2013.  The decrease in operating income was primarily due to a $42.8 millionincrease in operating expenses, from $114.3 million to $157.1 million, partially offset by a $29.3 millionincrease in gross profit from $152.2 million to $181.5 million. The increase in gross profit was primarily due to increased gross profit in our Enterprise Intelligence and Communication Intelligence segments. Despite the increase in gross profit, our overall gross margin decreased from 68% in the three months endedOctober 31, 2013 to 64% in the three months endedOctober 31, 2014 primarily due to a change in the mix of services attributable to business combinations that closed subsequent to October 31, 2013 in our Enterprise Intelligence segment. The increase in operating expenses consisted of a $25.2 millionincrease in selling, general and administrative expense, a $12.3 millionincrease in net research and development expenses, and a $5.2 million increase in amortization of other acquired intangible assets. Further details of changes in operating income are provided below.

Net income attributable to Verint Systems Inc. common shares was $10.7 million, and diluted net income per common share was $0.17, in the three months endedOctober 31, 2014 compared to net income attributable to Verint Systems Inc. common shares of $22.5 million, and diluted net income per common share of $0.42, in the three months endedOctober 31, 2013.  The decrease was primarily due to a $13.4 milliondecrease in operating income, as described above, partially offset by a $1.2 milliondecrease in our provision for income taxes, and a $0.8 milliondecrease in net income attributable to noncontrolling interest, in each case, compared to the three months endedOctober 31, 2013. Further details of these changes are provided below.

A portion of our business is conducted in currencies other than the U.S. dollar, and therefore our revenue and operating

expenses are affected by fluctuations in applicable foreign currency exchange rates as noted above. When comparing average exchange rates for the three months endedOctober 31, 2014 to average exchange rates for the three months endedOctober 31, 2013, while the U.S. dollar strengthened relative to the euro, it weakened relative to the British pound sterling and our hedged Israeli shekel rate, resulting in an overall decrease in our revenue and cost of revenue and an increase in operating expenses on a U.S. dollar-denominated basis.  For the three months endedOctober 31, 2014, had foreign exchange rates remained unchanged from rates in effect for the three months endedOctober 31, 2013, our revenue would have been approximately $1.3 millionhigher and our cost of revenue and operating expenses would have been approximately $1.4 millionlower, which would have resulted in a $2.7 millionincrease in operating income.

Nine Months EndedOctober 31, 2014 compared to Nine Months EndedOctober 31, 2013. Our revenue increased approximately $165.3 million, or 25%, to $816.8 million in the nine months endedOctober 31, 2014 from $651.5 million in the nine months endedOctober 31, 2013.  In our Enterprise Intelligence segment, revenue increased approximately $116.4 million, or 32%, to $481.1 million in the nine months endedOctober 31, 2014 from $364.7 million in the nine months endedOctober 31, 2013.  The increase consisted of a $101.4 million increase in service and support revenue and a $15.0 millionincrease in product revenue.  In our Communications Intelligence segment, revenue increased approximately $57.6 million, or 29%, from $198.6 million in the nine months endedOctober 31, 2013 to $256.2 million in the nine months endedOctober 31, 2014.  The increase consisted of a $46.7 millionincrease in product revenue and a $10.9 millionincrease in service and support revenue. In our Video Intelligence segment, revenue decreased approximately $8.7 million, or 10%, from $88.2 million in the nine months endedOctober 31, 2013 to $79.5 million in the nine months endedOctober 31, 2014, primarily due to a decrease in product revenue.  For additional details on our revenue by segment, see "—Revenue by Operating Segment".  Revenue in the Americas, EMEA, and the APAC region represented approximately 52%, 31%, and 17% of our total revenue, respectively, in the nine months endedOctober 31, 2014, compared to approximately 54%, 21%, and 25%, respectively, in the nine months endedOctober 31, 2013. The change in the percentage of revenue by geographical region in the nine months ended October 31, 2014 compared to the nine months ended October 31, 2013 primarily reflected the timing of revenue recognized in those regions under several large contracts, primarily in our Communications Intelligence segment. Further details of changes in revenue are provided below.

Operating income was $36.8 million in the nine months endedOctober 31, 2014 compared to $82.8 million in the nine months endedOctober 31, 2013.  The decrease in operating income was primarily due to a $122.8 millionincrease in operating expenses, from $350.7 million to $473.5 million, partially offset by a $76.8 millionincrease in gross profit from $433.5 million to $510.3 million. The increase in operating expenses consisted of a $70.4 millionincrease in selling, general and administrative expense, a $36.5 millionincrease in net research and development expenses, and a $15.9 millionincrease in

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amortization of other acquired intangible assets. The increase in gross profit was primarily due to increased gross profit in our Enterprise Intelligence and Communication Intelligence segments.  Despite the increase in gross profit, our overall gross margin decreased from 67% in the nine months endedOctober 31, 2013 to 62% in the nine months endedOctober 31, 2014 due primarily to a change in the mix of services attributable to business combinations that closed subsequent to October 31, 2013 in our Enterprise Intelligence segment. Further details of changes in operating income are provided below.

Net income attributable to Verint Systems Inc. common shares was $26.3 million, and diluted net income per common share was $0.45, in the nine months endedOctober 31, 2014 compared to a net income attributable to Verint Systems Inc. common shares of $30.7 million, and diluted net income per common share of $0.57, in the nine months endedOctober 31, 2013.  The decrease in net income attributable to Verint Systems Inc. common shares and diluted net income per common share in the nine months endedOctober 31, 2014 was primarily due to decreased operating income, as described above, a $6.1 millionincrease in interest expense, and a $2.6 millionincrease in losses upon early retirement of debt recorded during the nine months endedOctober 31, 2014 compared to the nine months endedOctober 31, 2013. These increases to net income attributable to Verint Systems Inc. common shares were partially offset by a $43.7 milliondecrease in our provision for income taxes (from $11.9 million expense for the nine months endedOctober 31, 2013 to a $31.8 million benefit for the nine months endedOctober 31, 2014), and a $6.3 millionincrease in other income, net (from a $5.0 million expense during the nine months endedOctober 31, 2013 to a $1.3 million net benefit during the nine months ended October 31, 2014) due primarily to a $1.5 million decrease in foreign currency losses, net, a $1.7 million increase in gains on derivative financial instruments, net, and a $3.1 million increase in other income, net (from a $2.5 million net expense to a net benefit of $0.6 million). Further details of these changes are provided below.

When comparing average exchange rates for the nine months endedOctober 31, 2014 to average exchange rates for the nine months endedOctober 31, 2013, while the U.S. dollar strengthened relative to the Australian dollar, it weakened relative to the Israeli shekel, British pound sterling and euro, resulting in an overall increase in our revenue, cost of revenue and operating expenses on a U.S. dollar-denominated basis.  For the nine months endedOctober 31, 2014, had foreign exchange rates remained unchanged from rates in effect for the nine months endedOctober 31, 2013, our revenue would have been approximately $6.8 millionlower and our cost of revenue and operating expenses would have been approximately $13.8 millionlower, which would have resulted in a $7.0 millionincrease in operating income.

As of October 31, 2014, we employed approximately 4,700 employees, including part-time employees and certain contractors, as compared to approximately 3,400 employees as of October 31, 2013.

Revenue by Operating Segment

The following table sets forth revenue for each of our three operating segments for the three and nine months endedOctober 31, 2014 and 2013:

	Three Months Ended October 31,				% Change	Nine Months Ended October 31,				% Change
(in thousands)	2014		2013		2014 - 2013	2014		2013		2014 - 2013
Enterprise Intelligence	$	165,526	$	125,897	31%	$	481,119	$	364,693	32%
Communications Intelligence	93,040		71,130		31%	256,165		198,633		29%
Video Intelligence	24,008		27,287		(12)%	79,499		88,221		(10)%
Total revenue	$	282,574	$	224,314	26%	$	816,783	$	651,547	25%

Enterprise Intelligence Segment

Three Months EndedOctober 31, 2014 compared to Three Months EndedOctober 31, 2013. Enterprise Intelligence revenue increased approximately $39.6 million, or 31%, from $125.9 million in the three months endedOctober 31, 2013 to $165.5 million in the three months endedOctober 31, 2014.  The increase consisted of a $33.5 millionincrease in service and support revenue and a $6.1 millionincrease in product revenue.  The $33.5 millionincrease in service and support revenue was primarily due to an increase in our customer install base, both organically and through business combinations, and the related support revenue generated from this customer base during the three months endedOctober 31, 2014, as well as increased revenue from new service offerings in the three months endedOctober 31, 2014. The $6.1 millionincrease in product revenue was due to an increase in product sales to new customers during the three months endedOctober 31, 2014. The continued growth of service revenue is attributable to various factors, including an increase in services associated with customer product upgrades, a higher component of service offerings in our standard arrangements, and our growing install base, both organically

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and as a result of business combinations. The aggregate value of executed license arrangements, which comprises the majority of our product revenue, can fluctuate from quarter to quarter.

Nine Months EndedOctober 31, 2014 compared to Nine Months EndedOctober 31, 2013. Enterprise Intelligence revenue increased approximately $116.4 million, or 32%, from $364.7 million in the nine months endedOctober 31, 2013 to $481.1 million in the nine months endedOctober 31, 2014.  The increase consisted of a $101.4 millionincrease in service and support revenue, and an $15.0 millionincrease in product revenue.  The $101.4 millionincrease in service and support revenue was primarily due to an increase in our customer install base, both organically and through business combinations, and the related support revenue generated from this customer base during the nine months endedOctober 31, 2014, as well as increased revenue from new service offerings in the nine months endedOctober 31, 2014. The $15.0 million increase in product revenue was due to an increase in product sales to new customers during the three months endedOctober 31, 2014. The continued growth of service revenue is attributable to various factors, including an increase in services associated with customer product upgrades, a higher component of service offerings in our standard arrangements, and our growing install base, both organically and as a result of business combinations. The aggregate value of executed license arrangements, which comprises the majority of our product revenue, can fluctuate from quarter to quarter.

Communications Intelligence Segment

Three Months EndedOctober 31, 2014 compared to Three Months EndedOctober 31, 2013. Communications Intelligence revenue increased approximately $21.9 million, or 31%, from $71.1 million in the three months endedOctober 31, 2013 to $93.0 million in the three months endedOctober 31, 2014.  The increase consisted of a $13.1 millionincrease in product revenue and an $8.8 millionincrease in service and support revenue.  The increase in product revenue was primarily due to an increase in product deliveries to customers and an increase in progress realized during the current year on projects recognized using the percentage of completion ("POC") method, some of which commenced in the previous fiscal year. The increase in service and support revenue was primarily attributable to an increase in progress realized during the current year on projects recognized using the POC method, some of which commenced in the previous fiscal year, and an increase in revenue from software-as-a-service ("SaaS") offerings.

Nine Months EndedOctober 31, 2014 compared to Nine Months EndedOctober 31, 2013. Communications Intelligence revenue increased approximately $57.6 million, or 29%, from $198.6 million in the nine months endedOctober 31, 2013 to $256.2 million in the nine months endedOctober 31, 2014.  The increase consisted of a $46.7 millionincrease in product revenue and a $10.9 millionincrease in service and support revenue.  The increase in product revenue was primarily due to an increase in product deliveries to customers and an increase in progress realized during the current year on projects recognized using the POC method, some of which commenced in the previous fiscal year. The increase in service and support revenue was primarily attributable to the  increase in progress realized during the current year on projects recognized using the percentage of completion POC method, some of which commenced in the previous fiscal year, and an increase in revenue from SaaS offerings.

Video Intelligence Segment

Three Months EndedOctober 31, 2014 compared to Three Months EndedOctober 31, 2013. Video Intelligence revenue decreased approximately $3.3 million, or 12%, from $27.3 million in the three months endedOctober 31, 2013 to $24.0 million in the three months endedOctober 31, 2014.  The decrease was primarily attributable to a decrease in product deliveries to new and existing customers during the three months ended October 31, 2014 as compared to the three months ended October 31, 2013.

Nine Months EndedOctober 31, 2014 compared to Nine Months EndedOctober 31, 2013. Video Intelligence revenue decreased approximately $8.7 million, or 10%, from $88.2 million in the nine months endedOctober 31, 2013 to $79.5 million in the nine months endedOctober 31, 2014.  The decrease was primarily attributable to a $9.1 milliondecrease in product revenue, resulting from a decrease in product deliveries to new and existing customers during the nine months ended October 31, 2014 as compared to the nine months ended October 31, 2013.

Volume and Price

We sell products in multiple configurations, and the price of any particular product varies depending on the configuration of the product sold. Due to the variety of customized configurations for each product we sell, we are unable to quantify the amount of any revenue increases attributable to a change in the price of any particular product and/or a change in the number of products sold.

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Revenue by Product Revenue and Service and Support Revenue

We derive and report our revenue in two categories: (a) product revenue, including licensing of software products and sale of hardware products (which include software that works together with the hardware to deliver the product's essential functionality), and (b) service and support revenue, including revenue from installation services, post-contract customer support, project management, hosting services, SaaS, product warranties, consulting services, and training services.  For multiple-element arrangements for which we are unable to establish vendor-specific objective evidence of fair value for one or more elements, we use various available indicators of fair value and apply our best judgment to reasonably classify the arrangement's revenue into product revenue and service and support revenue.

The following table sets forth product revenue and service and support revenue for the three and nine months endedOctober 31, 2014 and 2013:

	Three Months Ended October 31,				% Change	Nine Months Ended October 31,				% Change
(in thousands)	2014		2013		2014 - 2013	2014		2013		2014 - 2013
Product revenue	$	118,346	$	101,974	16%	$	339,657	$	287,189	18%
Service and support revenue	164,228		122,340		34%	477,126		364,358		31%
Total revenue	$	282,574	$	224,314	26%	$	816,783	$	651,547	25%

Product Revenue

Three Months EndedOctober 31, 2014 compared to Three Months EndedOctober 31, 2013. Product revenue increased approximately $16.3 million, or 16%, from $102.0 million for the three months endedOctober 31, 2013 to $118.3 million for the three months endedOctober 31, 2014, resulting from a $13.1 millionincrease in our Communications Intelligence segment and a $6.1 millionincrease in our Enterprise Intelligence segment, partially offset by a $2.8 milliondecrease in our Video Intelligence segment.

Nine Months EndedOctober 31, 2014 compared to Nine Months EndedOctober 31, 2013. Product revenue increased approximately $52.5 million, or 18%, from $287.2 million for the nine months endedOctober 31, 2013 to $339.7 million for the nine months endedOctober 31, 2014, resulting from a $46.7 millionincrease in our Communications Intelligence segment and a $15.0 millionincrease in our Enterprise Intelligence segment, partially offset by a $9.1 milliondecrease in our Video Intelligence segment.

For additional information see "— Revenue by Operating Segment".

Service and Support Revenue

Three Months EndedOctober 31, 2014 compared to Three Months EndedOctober 31, 2013. Service and support revenue increased approximately $41.9 million, or 34%, from $122.3 million for the three months endedOctober 31, 2013 to $164.2 million for the three months endedOctober 31, 2014.  This increase was primarily attributable to an increase of $33.5 million in our Enterprise Intelligence segment and an $8.8 millionincrease in our Communications Intelligence segment, partially offset by a $0.5 milliondecrease in our Video Intelligence segment.

Nine Months EndedOctober 31, 2014 compared to Nine Months EndedOctober 31, 2013. Service and support revenue increased approximately $112.7 million, or 31%, from $364.4 million for the nine months endedOctober 31, 2013 to $477.1 million for the nine months endedOctober 31, 2014, resulting from a $101.4 millionincrease in our Enterprise Intelligence segment, a $10.9 millionincrease in our Communications Intelligence segment, and a $0.4 millionincrease in our Video Intelligence segment.

For additional information see "— Revenue by Operating Segment".

Cost of Revenue

The following table sets forth cost of revenue by product and service and support, as well as amortization of acquired technology and backlog for the three and nine months endedOctober 31, 2014 and 2013:

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	Three Months Ended October 31,				% Change	Nine Months Ended October 31,				% Change
(in thousands)	2014		2013		2014 - 2013	2014		2013		2014 - 2013
Cost of product revenue	$	32,925	$	33,322	(1)%	$	104,524	$	94,584	11%
Cost of service and support revenue	60,082		36,900		63%	178,939		115,568		55%
Amortization of acquired technology and backlog	8,096		1,935		*	23,018		7,920		*
Total cost of revenue	$	101,103	$	72,157	40%	$	306,481	$	218,072	41%

* Percentage is not meaningful.

We exclude certain costs of product revenue and certain costs of service and support revenue, including shared support costs, stock-based compensation, and asset impairment charges, among others, from the calculations of our operating segment gross margins.

Cost of Product Revenue

Cost of product revenue primarily consists of hardware material costs and royalties due to third parties for software components that are embedded in our software solutions. When revenue is deferred, we also defer hardware material costs and third-party software royalties and recognize those costs over the same period that the product revenue is recognized. Cost of product revenue also includes amortization of capitalized software development costs, employee compensation and related expenses associated with our global operations, facility costs, and other allocated overhead expenses. In our Communications Intelligence segment, cost of product revenue also includes employee compensation and related expenses, contractor and consulting expenses, and travel expenses, in each case for resources dedicated to project management and associated product delivery.

Our product gross margins are impacted by the mix of products that we sell from period to period. As with many other technology companies, our software products tend to have higher gross margins than our hardware products.

Three Months EndedOctober 31, 2014 compared to Three Months EndedOctober 31, 2013. Cost of product revenue decreased approximately 1% from $33.3 million in the three months endedOctober 31, 2013 to $32.9 million in the three months endedOctober 31, 2014.  Our overall product gross margins increased to 72% in the three months endedOctober 31, 2014 from 67% in the three months endedOctober 31, 2013. Product gross margins in our Enterprise Intelligence segment increased from 91% in the three months endedOctober 31, 2013 to 94% in the three months endedOctober 31, 2014 primarily due to a continued decrease in hardware sales as part of our product offering. Product gross margins in our Communications Intelligence segment increased from 58% in the three months endedOctober 31, 2013 to 62% in the three months endedOctober 31, 2014 primarily due to a change in product mix.  Product gross margins in our Video Intelligence segment increased from 56% in the three months endedOctober 31, 2013 to 57% in the three months endedOctober 31, 2014 due to a change in product mix.

Nine Months EndedOctober 31, 2014 compared to Nine Months EndedOctober 31, 2013. Cost of product revenue increased approximately 11% from $94.6 million in the nine months endedOctober 31, 2013 to $104.5 million in the nine months endedOctober 31, 2014.  Our overall product gross margins increased to 69% in the nine months endedOctober 31, 2014 from 67% in the nine months endedOctober 31, 2013. Product gross margins in our Enterprise Intelligence segment increased from 92% in the nine months endedOctober 31, 2013 to 94% in the nine months endedOctober 31, 2014 primarily due to a continued decrease in hardware sales as part of our product offering. Product gross margins in our Communications Intelligence segment increased from 55% in the nine months endedOctober 31, 2013 to 60% in the nine months endedOctober 31, 2014 primarily due to a change in product mix.  Product gross margins in our Video Intelligence segment increased from 58% in the nine months endedOctober 31, 2013 to 60% in the nine months endedOctober 31, 2014 due to a change in product mix.

Cost of Service and Support Revenue

Cost of service and support revenue primarily consists of employee compensation and related expenses, contractor costs, and travel expenses relating to installation, training, consulting, and maintenance services. Cost of service and support revenue also includes stock-based compensation expenses, facility costs, and other overhead expenses. In accordance with GAAP

and our accounting policy, the cost of revenue associated with the services is generally expensed as incurred in the period in which the services are performed, with the exception of certain transactions accounted for under the POC method.

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Three Months EndedOctober 31, 2014 compared to Three Months EndedOctober 31, 2013. Cost of service and support revenue increased approximately 63% from $36.9 million in the three months endedOctober 31, 2013 to $60.1 million in the three months endedOctober 31, 2014.  Employee compensation and related expenses increased $14.7 million due primarily to increased headcount in connection with business combinations that closed subsequent to October 31, 2013. Contractor costs, travel expense, and materials expense incurred to provide services increased $2.7 million, $1.4 million, and $2.7 million, respectively, primarily due to business combinations that closed subsequent to October 31, 2013. Our overall service and support gross margins decreased from 70% in the three months endedOctober 31, 2013 to 63% in the three months endedOctober 31, 2014 primarily due to a change in the mix of services in connection with business combinations that closed subsequent to October 31, 2013 in our Enterprise Intelligence segment.

Nine Months EndedOctober 31, 2014 compared to Nine Months EndedOctober 31, 2013. Cost of service and support revenue increased approximately 55% from $115.6 million in the nine months endedOctober 31, 2013 to $178.9 million in the nine months endedOctober 31, 2014.  Employee compensation and related expenses increased $39.0 million due primarily to increased headcount in connection with business combinations that closed subsequent to October 31, 2013. Contractor costs, travel expense, and materials expense incurred to provide services increased $7.7 million, $4.0 million, and $7.8 million, respectively, primarily due to business combinations that closed subsequent to October 31, 2013. Our overall service and support gross margins decreased from 68% in the nine months endedOctober 31, 2013 to 62% in the nine months endedOctober 31, 2014 primarily due to a change in the mix of services in connection with business combinations that closed subsequent to October 31, 2013 in our Enterprise Intelligence segment.

Amortization of Acquired Technology and Backlog

Amortization of acquired technology and backlog consists of amortization of technology assets and customer backlog acquired in connection with business combinations.

Three Months EndedOctober 31, 2014 compared to Three Months EndedOctober 31, 2013. Amortization of acquired technology and backlog increased from $1.9 million in the three months endedOctober 31, 2013 to $8.1 million in the three months endedOctober 31, 2014, primarily due to an increase in amortization expense of acquired technology-based intangible assets associated with business combinations that closed subsequent to October 31, 2013.

Nine Months EndedOctober 31, 2014 compared to Nine Months EndedOctober 31, 2013. Amortization of acquired technology and backlog increased from $7.9 million in the nine months endedOctober 31, 2013 to $23.0 million in the nine months endedOctober 31, 2014, primarily due to an increase in amortization expense of acquired technology-based intangible assets associated with business combinations that closed subsequent to October 31, 2013.

Further discussion regarding our business combinations appears in Note 4, "Business Combinations" to our consolidated financial statements included under Item 1 of this report.

Research and Development, Net

Research and development expenses consist primarily of personnel and subcontracting expenses, facility costs, and other allocated overhead, net of certain software development costs that are capitalized as well as reimbursements under government programs. Software development costs are capitalized upon the establishment of technological feasibility and continue to be capitalized through the general release of the related software product.

The following table sets forth research and development, net for the three and nine months endedOctober 31, 2014 and 2013:

	Three Months Ended October 31,				% Change	Nine Months Ended October 31,				% Change
(in thousands)	2014		2013		2014 - 2013	2014		2013		2014 - 2013
Research and development, net	$	43,008	$	30,704	40%	$	128,408	$	91,935	40%

Three Months EndedOctober 31, 2014 compared to Three Months EndedOctober 31, 2013. Research and development, net increased approximately $12.3 million, or 40%, from $30.7 million in the three months endedOctober 31, 2013 to $43.0 million in the three months endedOctober 31, 2014. The increase was primarily attributable to an $8.8 million increase in employee compensation and related expenses due primarily to an increase in employee headcount in connection with business combinations that closed subsequent to October 31, 2013 in our Enterprise Intelligence and Communication Intelligence segments. Research and development reimbursements from government programs that were received during the three months

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endedOctober 31, 2014 decreased $1.1 million compared to the three months endedOctober 31, 2013 due primarily to decreases of such reimbursements in our Enterprise Intelligence and Communications Intelligence segments. Stock-based compensation expense increased $0.4 million increase resulting from an increase in average amounts of outstanding restricted stock units, and continued increases in our stock price, which impacts the total stock-based compensation to be recognized over the vesting periods.

Nine Months EndedOctober 31, 2014 compared to Nine Months EndedOctober 31, 2013. Research and development, net increased approximately $36.5 million, or 40%, from $91.9 million in the nine months endedOctober 31, 2013 to $128.4 million in the nine months endedOctober 31, 2014. The increase was primarily attributable to a $29.3 million increase in employee compensation and related expenses due primarily to an increase in employee headcount in connection with business combinations that closed subsequent to October 31, 2013 in our Enterprise Intelligence and Communication Intelligence segments. Contractor expense increased approximately $1.1 million due to increased use of contractors in our Communications Intelligence segment during the nine months endedOctober 31, 2014 compared to the nine months endedOctober 31, 2013. Stock-based compensation expense increased $1.4 million resulting from an increase in average amounts of outstanding restricted stock units, and continued increases in our stock price, which impacts the total stock-based compensation to be recognized over the vesting periods.

Selling, General and Administrative Expenses

Selling, general and administrative expenses consist primarily of personnel costs and related expenses, professional fees, sales and marketing expenses, including travel, sales commissions and sales referral fees, facility costs, communication expenses, and other administrative expenses.

The following table sets forth selling, general and administrative expenses for the three and nine months endedOctober 31, 2014 and 2013:

	Three Months Ended October 31,				% Change	Nine Months Ended October 31,				% Change
(in thousands)	2014		2013		2014 - 2013	2014		2013		2014 - 2013
Selling, general and administrative	$	102,738	$	77,472	33%	$	310,946	$	240,540	29%

Three Months EndedOctober 31, 2014 compared to Three Months EndedOctober 31, 2013. Selling, general and administrative expenses increased approximately $25.2 million, or 33%, from $77.5 million in the three months endedOctober 31, 2013 to $102.7 million in the three months endedOctober 31, 2014. Employee compensation and related expenses increased $8.5 million primarily due to increased employee headcount in our Enterprise Intelligence and Communications Intelligence segments, as well as an increase in employee headcount for corporate support employees. Stock-based compensation expense increased $2.1 million due primarily to an increase in average amounts of outstanding restricted stock units, and continued increases in our stock price, which impacts the total stock-based compensation to be recognized over the vesting periods. Sales and marketing and facilities expense increased $1.7 million and $2.1 million, respectively, due primarily to business combinations that closed subsequent to October 31, 2013. Also contributing to the increase in selling, general, and administrative expense was a $2.8 million increase in agent commissions expense in our Communication Intelligence segment, a $1.7 million increase in contractor expense due primarily to increase use of contractors for corporate support activities, and an increase in the change in fair value of our obligations under contingent consideration arrangements from a $1.9 million benefit during the three months ended October 31, 2013 to a $0.1 million expense during the three months ended October 31, 2014, resulting in a $2.0 million increase in selling, general, and administrative expense.

Nine Months EndedOctober 31, 2014 compared to Nine Months EndedOctober 31, 2013. Selling, general and administrative expenses increased approximately $70.4 million, or 29%, from $240.5 million in the nine months endedOctober 31, 2013 to $310.9 million in the nine months endedOctober 31, 2014. Employee compensation and related expenses increased $29.1 million due primarily to increased employee headcount in our Enterprise Intelligence and Communications Intelligence segments, as well as an increase in employee headcount for corporate support employees. Stock-based compensation expense increased $10.2 million due primarily to an increase in average amounts of outstanding restricted stock units, and continued increases in our stock price, which impacts the total stock-based compensation to be recognized over the vesting periods. Sales and marketing expense, travel expense, and facilities expense increased $3.9 million, $4.0 million, and $5.4 million, respectively, due primarily to business combinations that closed subsequent to October 31, 2013. Also contributing to the increase in selling, general, and administrative expense was a $7.4 million increase in agent commissions expense in our Communication Intelligence segment, and a $3.3 million increase in contractor expense due primarily to increased use of contractors for corporate support activities. These increases were partially offset by a decrease of $3.5 million of expenses

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from special performance incentives associated with a prior period business combination included in selling, general, and administrative expenses during the nine months endedOctober 31, 2013 with no equivalent expenses in the nine months endedOctober 31, 2014.

Amortization of Other Acquired Intangible Assets

Amortization of other acquired intangible assets consists of amortization of certain intangible assets acquired in connection with business combinations, including customer relationships, distribution networks, trade names and non-compete agreements.

The following table sets forth amortization of other acquired intangible assets for the three and nine months endedOctober 31, 2014 and 2013:

	Three Months Ended October 31,				% Change	Nine Months Ended October 31,				% Change
(in thousands)	2014		2013		2014 - 2013	2014		2013		2014 - 2013
Amortization of other acquired intangible assets	$	11,367	$	6,150	85%	$	34,124	$	18,193	88%

Three Months EndedOctober 31, 2014 compared to Three Months EndedOctober 31, 2013. Amortization of other acquired intangible assets increased approximately $5.2 million, or 85%, from $6.2 million in the three months endedOctober 31, 2013 to $11.4 million in the three months endedOctober 31, 2014 primarily due to amortization associated with business combinations that closed subsequent to October 31, 2013.

Nine Months EndedOctober 31, 2014 compared to Nine Months EndedOctober 31, 2013. Amortization of other acquired intangible assets increased approximately $15.9 million, or 88%, from $18.2 million in the nine months endedOctober 31, 2013 to $34.1 million in the nine months endedOctober 31, 2014 primarily due to amortization associated with business combinations that closed subsequent to October 31, 2013.

Further discussion surrounding our business combinations appears in Note 4, "Business Combinations" to our consolidated financial statements included under Item 1 of this report.

Other Income (Expense), Net

The following table sets forth total other expense, net for the three and nine months endedOctober 31, 2014 and 2013:

	Three Months Ended October 31,						% Change	Nine Months Ended October 31,						% Change
(in thousands)	2014			2013			2014 - 2013	2014			2013			2014 - 2013
Interest income	$	208		$	242		(14)%	$	683		$	563		21%
Interest expense	(8,494		)	(7,416		)	15%	(28,103		)	(21,987		)	28%
Losses on early retirements of debt	—			—			—%	(12,546		)	(9,879		)	27%
Other income (expense):
Foreign currency (losses) gains	(1,949		)	702			*	(1,035		)	(2,504		)	(59)%
Gains (losses) on derivative financial instruments, net	1,562			(721		)	*	1,666			(45		)	*
Other, net	554			(627		)	*	635			(2,464		)	*
Total other income (expense)	167			(646		)	(126)%	1,266			(5,013		)	(125)%
Total other expense, net	$	(8,119	)	$	(7,820	)	4%	$	(38,700	)	$	(36,316	)	7%

* Percentage is not meaningful.

Three Months EndedOctober 31, 2014 compared to Three Months EndedOctober 31, 2013. Total other expense, net, increased by $0.3 million from $7.8 million in the three months endedOctober 31, 2013 to $8.1 million in the three months endedOctober 31, 2014. 

Interest expense increased to $8.5 million in the three months endedOctober 31, 2014 from $7.4 million in the three months endedOctober 31, 2013 primarily due to incremental borrowings discussed in Note 6, “Long-term Debt” to our condensed consolidated financial statements included under Item 1 of this report.

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We recorded $1.9 million of net foreign currency losses in the three months endedOctober 31, 2014 compared to $0.7 million of net gains in the three months endedOctober 31, 2013.  Foreign currency losses in the three months endedOctober 31, 2014 resulted primarily from the strengthening of the U.S. dollar against the euro and British pound sterling, resulting in foreign currency losses on U.S. dollar-denominated net liabilities in certain entities which use the euro and British pound sterling functional currency, partially offset by foreign currency gains on Israeli Shekel-denominated net liabilities in certain entities which use a U.S. dollar functional currency due to the strengthening of the U.S. dollar against the Israeli Shekel.

In the three months endedOctober 31, 2014, there were net gains on derivative financial instruments (not designated as hedging instruments) of $1.6 million, compared to net losses of $0.7 million on such instruments for the three months endedOctober 31, 2013.  The net gains in the current year period resulted from strengthening of the hedged currencies against the functional currencies, primarily the U.S. dollar against the euro, during that period. Movements of hedged currencies against functional currencies were generally not significant during the three months endedOctober 31, 2013.

Other, net expense decreased to a $0.6 million net benefit in the three months endedOctober 31, 2014 from a $0.6 million net expense in the nine months endedOctober 31, 2013. The $0.6 million net benefit during the three months endedOctober 31, 2014 primarily consisted of sublease rental income from KANA properties acquired during the nine months endedOctober 31, 2014. Other, net, during the three months endedOctober 31, 2013 included a $1.1 million write-off of an indemnification asset associated with tax liabilities recorded in connection with the CTI Merger in the three months ended October 31, 2013. 

Nine Months EndedOctober 31, 2014 compared to Nine Months EndedOctober 31, 2013. Total other expense, net, increased by $2.4 million from $36.3 million in the nine months endedOctober 31, 2013 to $38.7 million in the nine months endedOctober 31, 2014. 

During the nine months endedOctober 31, 2014, we recorded a $12.5 million loss upon early retirement of debt. Of this amount, $7.1 million was recorded in connection with the extinguishment of the March 2013 Term Loans, and $5.5 million was recorded in connection with the retirement of $530.0 million of the February 2014 Term Loans and March 2014 Term Loans. During the nine months endedOctober 31, 2013, we recorded a $9.9 million loss upon early retirement of debt, which primarily related to the extinguishment of the April 2011 Term Loans.  Further discussion regarding our Credit Agreement appears in Note 6, “Long-term Debt” to our condensed consolidated financial statements included under Item 1 of this report.

Interest expense increased to $28.1 million in the nine months endedOctober 31, 2014 from $22.0 million in the nine months endedOctober 31, 2013 primarily due to incremental borrowings discussed in Note 6, “Long-term Debt” to our condensed consolidated financial statements included under Item 1 of this report.

We recorded $1.0 million of net foreign currency losses in the nine months endedOctober 31, 2014 compared to $2.5 million of net losses in the nine months endedOctober 31, 2013.  Foreign currency losses in the nine months endedOctober 31, 2014 resulted primarily from the strengthening of the U.S. dollar against the euro, British pound sterling, and Japanese yen, resulting in foreign currency losses on U.S. dollar-denominated net liabilities in certain entities which use the euro, British pound sterling, and Japanese yen functional currency, partially offset by foreign currency gains on Israeli Shekel-denominated net liabilities in certain entities which use a U.S. dollar functional currency due to the strengthening of the U.S. dollar against the Israeli Shekel.

In the nine months endedOctober 31, 2014, there were net gains on derivative financial instruments (not designated as hedging instruments) of $1.7 million, compared to nominal losses on such instruments for the nine months endedOctober 31, 2013.  The net gains in the current year resulted from strengthening of the hedged currencies against the functional currencies, primarily the U.S. dollar against the euro, during that period. Movements of hedged currencies against functional currencies were generally not significant during the nine months endedOctober 31, 2014.

Other, net was a $0.6 million net benefit in the nine months endedOctober 31, 2014 compared to a $2.5 million net expense in the nine months endedOctober 31, 2013. The $0.6 million net benefit during the nine months endedOctober 31, 2014 primarily consisted of sublease rental income from KANA properties acquired during the nine months endedOctober 31, 2014. Other, net, during the nine months endedOctober 31, 2013 included a $1.1 million write-off of an indemnification asset associated with tax liabilities recorded in connection with the CTI Merger in the nine months endedOctober 31, 2013. 

Provision for (Benefit from) Income Taxes

The following table sets forth our provision for (benefit from) income taxes for the three and nine months endedOctober 31, 2014 and 2013:

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	Three Months Ended October 31,				% Change	Nine Months Ended October 31,					% Change
(in thousands)	2014		2013		2014 - 2013	2014			2013		2014 - 2013
Provision for (benefit from) income taxes	$	4,766	$	5,957	(20)%	$	(31,788	)	$	11,869	*

* Percentage is not meaningful.

Three Months EndedOctober 31, 2014 compared to Three Months EndedOctober 31, 2013. Our effective income tax rate was 29.3% for the three months endedOctober 31, 2014, compared to an effective income tax rate of 19.8% for the three months endedOctober 31, 2013.  For the three months ended October 31, 2014, the effective income tax rate was significantly affected by the mix and levels of income and losses among taxing jurisdictions. Pre-tax income in our profitable jurisdictions, where we recorded tax provisions, was higher than our domestic losses where we maintain valuation allowances and did not record the related tax benefits. The result was an income tax expense of $4.8 million on pre-tax income of $16.2 million, resulting in an effective income tax rate of 29.3%.

For the three months endedOctober 31, 2013, our effective income tax rate was significantly impacted by the level and mix of income and losses by jurisdiction. Pre-tax income in our profitable jurisdictions, where we recorded income tax provisions, was higher than our domestic losses where we maintain valuation allowances and did not record the related income tax benefits. The result was an income tax provision of $6.0 million on pre-tax income of $30.0 million, which resulted in an effective income tax rate of 19.8%.

Nine Months EndedOctober 31, 2014 compared to Nine Months EndedOctober 31, 2013. Our effective income tax benefit rate was 1,694.5% for the nine months endedOctober 31, 2014, compared to an effective income tax rate of 25.5% for the nine months endedOctober 31, 2013.  For the nine months ended October 31, 2014, we recorded an income tax benefit of $31.8 million on a pre-tax loss of $1.9 million. The effective income tax rate was significantly impacted by an income tax benefit recorded in the quarter ended April 30, 2014 attributable to the release of $45.2 million of Verint valuation allowances. We maintain valuation allowances on our net U.S. deferred income tax assets related to federal and certain state jurisdictions. In connection with the acquisition of KANA during the quarter ended April 30, 2014, we recorded deferred income tax liabilities primarily attributable to acquired intangible assets to the extent the amortization will not be deductible for income tax purposes. Under accounting guidelines, because the amortization of the intangible assets in future periods provides a source of taxable income, we expect to realize a portion of our existing deferred income tax assets. As such, we reduced the valuation allowance recorded on our deferred income tax assets to the extent of the deferred income tax liabilities recorded. Because the valuation allowance related to existing Verint deferred income tax assets, the impact of the release was reflected as a discrete income tax benefit and not as a component of the KANA acquisition accounting. The result was a $31.8 million benefit for income taxes on a pre-tax loss of $1.9 million, which represented an effective benefit rate of 1,694.5%. The effective income tax benefit rate was also affected by the mix and levels of income and losses among taxing jurisdictions. Pre-tax income in our profitable jurisdictions, where we recorded tax provisions, was slightly less than our domestic losses where we maintain valuation allowances and did not record the related tax benefits. Excluding the income tax benefit attributable to the valuation allowance release, the result for the nine months ended October 31, 2014 was an income tax provision of $13.4 million on a pre-tax loss $1.9 million, resulting in a negative effective income tax rate of 713.4%.

For the nine months ended October 31, 2013, the effective income tax rate was significantly impacted by the level and mix of earnings and losses by jurisdiction. The effective income tax rate was also reduced because CTI received a favorable ruling from the Internal Revenue Service which resulted in adjustments to deferred taxes and an indemnified tax liability. Pre-tax income in our profitable jurisdictions, where we recorded income tax provisions, was higher than our domestic losses where we maintain valuation allowances and did not record the related income tax benefits. The result was an income tax provision of $11.9 million on pre-tax income of $46.5 million, which resulted in an effective income tax rate of 25.5%.

The comparison of our effective income tax rates between periods is significantly impacted by the level and mix of earnings and losses by tax jurisdiction, foreign income tax rate differentials, amount of permanent book to tax differences, the impact of unrecognized income tax income benefits, and the effects of valuation allowances on certain loss jurisdictions.

Backlog

The delivery cycles of most of our products are generally very short, ranging from days to several months, with the exception of certain projects with multiple deliverables over longer periods of time. Therefore, we do not view backlog as a meaningful indicator of future business activity and do not consider it a meaningful financial metric for evaluating our business.

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Liquidity and Capital Resources

Overview

Our primary source of cash is the collection of proceeds from the sale of products and services to our customers, including cash periodically collected in advance of delivery or performance.

Our primary recurring use of cash is payment of our operating costs, which consist primarily of employee-related expenses, such as compensation and benefits, as well as general operating expenses for marketing, facilities and overhead costs, and capital expenditures.  We also utilize cash for debt service under our Credit Agreement and our Notes, and periodically for business acquisitions.  Cash generated from operations is our primary source of operating liquidity, and we believe that internally generated cash flows are sufficient to support our current business operations, including debt service and capital expenditure requirements.

In February 2014, in connection with our acquisition of KANA, we borrowed $125.0 million under our 2013 Revolving Credit Facility and we also incurred $300.0 million of incremental term loans under our Credit Agreement, both for purposes of funding a portion of the purchase price for KANA. In June 2014, we completed concurrent public offerings of 5,750,000 shares of our common stock and $400.0 million in aggregate principal amount of 1.50% convertible senior notes due June 1, 2021. The aggregate net proceeds from the concurrent offerings were $657.5 million, after deducting underwriters’ discounts and commissions, but excluding other offering expenses. We used $15.6 million of the net proceeds to pay the net costs of an arrangement consisting of the purchase of call options and the sale of warrants to purchase our common stock, the intent of which is to reduce the potential dilution to our common stock upon conversion of the Notes. We used the majority of the remainder of the net proceeds to repay a portion of the outstanding indebtedness under our Credit Agreement. Also in June 2014, we amended our Credit Agreement to increase the lending commitments under our March 2013 Revolving Credit Facility to $300.0 million and extended the facility's term by approximately six months to September 6, 2018. Further discussion of our Credit Agreement, Notes, call options and warrants appears below, under "Financing Arrangements".

We have historically expanded our business in part by investing in strategic growth initiatives, including acquisitions of products, technologies, and businesses. We have used cash as consideration for substantially all of our historical business acquisitions, including approximately $517 million of net cash expended to acquire KANA in February 2014, funded through a combination of cash on hand, and as described above, incremental term loans and borrowings under our 2013 Revolving Credit Facility. During the nine months ended October 31, 2014, we also expended approximately $84 million of cash on hand to acquire UTX.

We continually examine our options with respect to terms and sources of existing and future long and short-term capital resources to enhance our operating results and to ensure that we retain financial flexibility, and may from time to time elect to raise additional equity or debt capital in the capital markets.

A considerable portion of our operating income is earned outside the United States. Cash, cash equivalents, short-term investments, and restricted cash and bank time deposits (including any long-term portions) held by our subsidiaries outside the United States were $248.5 million and $268.6 million as of October 31, 2014 and January 31, 2014, respectively, and are generally used to fund the subsidiaries’ operating requirements and to invest in company growth initiatives, including business acquisitions. Cash on hand in the United States was utilized to fund a portion of the purchase price for KANA, and cash on hand outside of the United States was utilized to fund the purchase price for UTX. We currently do not anticipate that we will need funds generated from foreign operations to fund our domestic operations for the next 12 months and for the foreseeable future.

Should other circumstances arise whereby we require more capital in the United States than is generated by our domestic operations, or should we otherwise consider it in our best interests, we could repatriate future earnings from foreign jurisdictions, which could result in higher effective tax rates.  We have not provided for deferred income taxes on the excess of the amount for financial reporting over the tax basis of investments in our foreign subsidiaries because we currently plan to indefinitely reinvest such earnings outside the United States.

The following table sets forth our cash and cash equivalents, restricted cash and bank time deposits, short-term investments and long-term debt as of October 31, 2014 and January 31, 2014:

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	October 31,			January 31,
(in thousands)	2014			2014
Cash and cash equivalents	$	192,335		$	378,618
Restricted cash and bank time deposits	$	39,930		$	6,423
Short-term investments	$	40,136		$	32,049
Long-term debt:
Gross long-term debt	$	811,176		$	645,212
Unamortized debt discounts	(76,824		)	(2,827		)
Net long-term debt	$	734,352		$	642,385

At October 31, 2014, our cash and cash equivalents totaled $192.3 million, a decrease of $186.3 million from $378.6 million at January 31, 2014. During the nine months ended October 31, 2014, we expended approximately $185 million of cash on hand for three business acquisitions, including associated financing fees.

The increase in unamortized debt discounts at October 31, 2014, compared to January 31, 2014, resulted from a discount recorded on our 1.50% convertible senior notes, which were issued in June 2014, further details regarding which appear in Note 6, "Long-Term Debt" to our condensed consolidated financial statements included under Item 1 of this report.

During the nine months endedOctober 31, 2014, our operating activities generated $90.2 million of cash, our financing activities generated $396.9 million of net cash, and our investing activities used $671.6 million of net cash. Further discussion of these items appears below.

Consolidated Cash Flow Activity

The following table summarizes selected items from our condensed consolidated statements of cash flows for the nine months endedOctober 31, 2014 and 2013:

	Nine Months Ended October 31,
(in thousands)	2014			2013
Net cash provided by operating activities	$	90,241		$	115,019
Net cash used in investing activities	(671,585		)	(143,157		)
Net cash provided by financing activities	396,919			55,402
Effect of exchange rate changes on cash and cash equivalents	(1,858		)	223
Net (decrease) increase in cash and cash equivalents	$	(186,283	)	$	27,487

Net Cash Provided by Operating Activities

Net cash provided by operating activities is driven primarily by our net income or loss, adjusted for non-cash items, and working capital changes. Operating activities generated $90.2 million of net cash during the nine months ended October 31, 2014, compared to $115.0 million generated during the nine months endedOctober 31, 2013. Operating cash flow for the nine months ended October 31, 2014, compared to the prior-year nine-month period, was adversely impacted by $5.0 million of higher interest payments, as well as net income tax payments of $10.3 million, compared to net income tax refunds of $6.5 million in the prior-year nine-month period. Excluding payments or refunds of interest and income taxes, net cash provided by operating activities was $123.3 million for the nine months ended October 31, 2014, compared to $126.3 million for the nine months ended October 31, 2013. Operating activity cash flow for the nine months ended October 31, 2013 included the payment of a $7.2 million investment banking fee associated with the CTI Merger.

The modestly lower operating cash flow, excluding the impact of interest and income taxes, resulted primarily from increases in working capital during the nine months endedOctober 31, 2014, including a $41.7 million increase in accounts receivable. Our operating cash flow can vary from period to period depending upon the timing of collections from customers and payments to suppliers.

Net Cash Used in Investing Activities

During the nine months ended October 31, 2014, our investing activities used $671.6 million of net cash, the primary component of which was $602.9 million of net cash utilized for business acquisitions, including KANA in February 2014 and

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UTX in March 2014. We also had a $37.0 million increase in restricted cash and bank time deposits during this period. Restricted cash and bank time deposits are typically short-term deposits used to secure bank guarantees in connection with sales contracts, the amounts of which will fluctuate from period to period. The increase in restricted cash and bank time deposits during the nine months ended October 31, 2014 reflected deposits associated with several large sales contracts. In addition, we made $20.3 million of payments for property, equipment, and capitalized software development costs, and made $9.8 million of net purchases of short-term investments, during the period.

During the nine months ended October 31, 2013, our investing activities used $143.2 million of net cash, primarily reflecting $125.5 million of net purchases of short-term investments. We expanded our short-term investing activity during the nine months ended October 31, 2013 to increase returns on funds provided by the period's operating and financing activities. We also made $13.3 million of payments for property, equipment, and capitalized software development costs during the period.

As of October 31, 2014, we had no significant capital expenditure commitments.

Net Cash Provided by Financing Activities

For the nine months ended October 31, 2014, our financing activities provided $396.9 million of net cash. In connection with the February 3, 2014 acquisition of KANA, we incurred $300.0 million of incremental term loans and borrowed $125.0 million under our 2013 Revolving Credit Facility. Additionally, in March 2014, we incurred $643.5 million of new term loans, the proceeds of which were used to repay $643.5 million of prior term loans. In June 2014, we completed concurrent public offerings of 5,750,000 shares of our common stock, gross proceeds from which were $274.6 million, and $400.0 million in aggregate principal amount of 1.50% convertible senior notes due June 1, 2021. We used $15.6 million of the net proceeds from these offerings to pay the net costs of an arrangement consisting of the purchase of call options and the sale of warrants to purchase our common stock, the intent of which is to reduce the potential dilution to our common stock upon conversion of the Notes. We used the majority of the remainder of the net proceeds to retire $530.0 million of the February 2014 Term Loans and March 2014 Term Loans, and all $106.0 million of then-outstanding borrowings under the 2013 Revolving Credit Facility. In connection with these various financing activities, we paid $29.2 million of debt and equity issuance costs, including underwriting discounts and commissions associated with the public offerings. Other financing activities during the nine months ended October 31, 2014 included payments of $8.7 million for the financing portion of payments under contingent consideration arrangements related to prior business combinations, the receipt of $13.1 million of proceeds from exercises of stock options, and payments of $2.2 million for purchases of treasury stock.

For the nine months ended October 31, 2013, our financing activities provided $55.4 million of net cash. During this period, we borrowed $646.7 million under our Credit Agreement (gross borrowings of $650.0 million, reduced by a $3.3 million original issuance discount), repaid $576.0 million of outstanding borrowings under the Credit Agreement, and paid $7.8 million of related debt issuance costs. We also received $10.4 million of cash in connection with the CTI Merger during this period. Other financing activities during the nine months ended October 31, 2013 included payments of $16.1 million for the financing portion of payments under contingent consideration arrangements related to prior business combinations, and the receipt of $6.4 million of proceeds from exercises of stock options.

Liquidity and Capital Resources Requirements

Based on past performance and current expectations, we believe that our cash, cash equivalents, short-term investments and cash generated from operations will be sufficient to meet anticipated operating costs, required payments of principal and interest, working capital needs, ordinary course capital expenditures, research and development spending, and other commitments for at least the next 12 months. Currently, we have no plans to pay any cash dividends on our common stock, which are not permitted under our Credit Agreement.

Financing Arrangements

1.50% Convertible Senior Notes

On June 18, 2014, we issued $400.0 million in aggregate principal amount of 1.50% convertible senior notes due June 1, 2021, unless earlier converted by the holders pursuant to their terms. The Notes pay interest in cash semiannually in arrears at a rate of 1.50% per annum.

The Notes were issued concurrently with our issuance of 5,750,000 shares of common stock, the majority of the combined net proceeds of which were used to partially repay certain indebtedness under our Credit Agreement, as further described below.

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The Notes are unsecured and rank senior in right of payment to our indebtedness that is expressly subordinated in right of payment to the Notes; equal in right of payment to our indebtedness that is not so subordinated; effectively subordinated in right of payment to any of our secured indebtedness to the extent of the value of the assets securing such indebtedness; and structurally subordinated to indebtedness and other liabilities of our subsidiaries.

The Notes are convertible into, at our election, cash, shares of common stock, or a combination of both, subject to satisfaction of specified conditions and during specified periods, as described below. If converted, we currently intend to pay cash in respect of the principal amount.

The conversion price of the Notes at any time is equal to $1,000 divided by the then-applicable conversion rate. The Notes have an initial conversion rate of 15.5129 shares of common stock per $1,000 principal amount of Notes, which represents an initial effective conversion price of approximately $64.46 per share of common stock and would result in the issuance of approximately 6,205,000 shares if all of the Notes were converted. Throughout the term of the Notes, the conversion rate may be adjusted upon the occurrence of certain events.

Holders may surrender their Notes for conversion at any time prior to the close of business on the business day immediately preceding December 1, 2020, only under the following circumstances:

• during any calendar quarter commencing after the calendar quarter ending on September 30, 2014, if the closing sale price of our common stock, for at least 20 trading days (whether or not consecutive) in the period of 30 consecutive trading days ending on the last trading day of the immediately preceding calendar quarter, is more than 130% of the conversion price of the Notes in effect on each applicable trading day;

• during the ten consecutive trading-day period following any five consecutive trading-day period in which the trading price for the Notes for each such trading day was less than 98% of the closing sale price of our common stock on such date multiplied by the then-current conversion rate; or

• upon the occurrence of specified corporate events, as described in the indenture governing the Notes, such as a consolidation, merger, or binding share exchange.

On or after December 1, 2020 until the close of business on the second scheduled trading day immediately preceding the

maturity date, holders may surrender their Notes for conversion regardless of whether any of the foregoing conditions have been satisfied.

If we satisfy our conversion obligation in solely cash or a combination of cash and shares of common stock, the amount of cash and shares of common stock, if any, due upon conversion will be based on a daily conversion value for each trading day in a 50 trading-day conversion period. Holders will not receive any additional cash payment or additional shares of common stock representing accrued and unpaid interest, if any, upon conversion of a Note, except in limited circumstances. Instead, interest will be deemed to be paid by the consideration delivered upon conversion of a Note.

The conversion rate for the Notes is subject to adjustment as described in the indenture governing the Notes. An adjustment to the conversion rate will result in a corresponding (but inverse) adjustment to the conversion price.

If specified “make-whole adjustment events” occur, the conversion rate for any Notes converted in connection with such make-whole adjustment event will, in specified circumstances, be increased by a number of additional shares of common stock. In addition, holders may require us to purchase for cash all or any portion of their Notes upon the occurrence of a “fundamental change” at a price equal to 100% of the principal amount of the Notes being purchased, plus accrued and unpaid interest to, but excluding, the fundamental change purchase date.

As of October 31, 2014, the Notes were not convertible.

Note Hedges and Warrants

Concurrently with the issuance of the Notes, we entered into convertible note hedge transactions (the “Note Hedges”) and sold warrants (the “Warrants”). The combination of the Note Hedges and the Warrants serves to increase the effective initial conversion price for the Notes to $75.00 per share. The Note Hedges and Warrants are each separate instruments from the Notes.

Note Hedges

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Pursuant to the Note Hedges, we purchased call options on our common stock, under which we have the right to acquire from the counterparties up to approximately 6,205,000 shares of our common stock, subject to customary anti-dilution adjustments, at a price of $64.46, which equals the initial conversion price of the Notes. Our exercise rights under the Note Hedges generally trigger upon conversion of the Notes and the Note Hedges terminate upon maturity of the Notes, or the first day the Notes are no longer outstanding. The Note Hedges may be settled in cash, shares of our common stock, or a combination thereof, at our option, and are intended to reduce our exposure to potential dilution upon conversion of the Notes. We paid $60.8 million for the Note Hedges, which was recorded as a reduction to additional paid-in capital. As of October 31, 2014, we had not purchased any shares under the Note Hedges.

Warrants

We sold the Warrants to several counterparties. The Warrants provide the counterparties rights to acquire from us up to approximately 6,205,000 shares of our common stock at a price of $75.00 per share. The Warrants expire incrementally on a series of expiration dates beginning in August 2021. At expiration, if the market price per share of our common stock exceeds the strike price of the Warrants, we will be obligated to issue shares of our common stock having a value equal to such excess. The proceeds from the sale of the Warrants were $45.2 million and were recorded as additional paid-in capital. As of October 31, 2014, no Warrants had been exercised and all Warrants remained outstanding.

Credit Agreement

As of January 31, 2014, our Credit Agreement provided for $850.0 million of senior secured credit facilities, including $650.0 million of term loans maturing in September 2019, of which $645.1 million was outstanding at January 31, 2014, and a $200.0 million 2013 Revolving Credit Facility maturing in March 2018, under which there were no borrowings at January 31, 2014. The credit facility was subject to a maximum increase of $300.0 million and reduction from time to time.

As noted above, in February 2014, in connection with our acquisition of KANA, we borrowed $125.0 million under the 2013 Revolving Credit Facility and we also incurred $300.0 million under the February 2014 Term Loans, which are incremental term loans under an amendment to our Credit Agreement, both for purposes of funding a portion of the purchase price for KANA.

In March 2014, we refinanced the $643.5 million of outstanding March 2013 Term Loans with the proceeds of the March 2014 Term Loans, primarily for purposes of reducing the interest rate on such loans. We also amended our Credit Agreement in February and March 2014 to, among other things, (i) change the basis for determining the interest rate on borrowings under the 2013 Revolving Credit Facility, (ii) increase the permitted amount of incremental term loans and revolving credit commitments (beyond the incremental term loans borrowed in February 2014) by up to an aggregate of $200.0 million plus an additional amount such that our leverage ratio (as defined in the Credit Agreement) would not exceed a specified maximum ratio, (iii) permit us to issue convertible indebtedness (as defined in the Credit Agreement), (iv) permit us to refinance all or a portion of any existing term loans with replacement term loans, and (v) extend by one year, to January 31, 2016, the step-down date of the leverage ratio covenant applicable to the 2013 Revolving Credit Facility.

On June 18, 2014, we utilized the majority of the combined net proceeds from the issuance of the Notes and the concurrent issuance of 5,750,000 shares of common stock to retire $530.0 million of the February 2014 Term Loans and March 2014 Term Loans, and to repay all $106.0 million of then-outstanding borrowings under the 2013 Revolving Credit Facility.

Also in June 2014, we further amended our Credit Agreement to increase the lending commitments under our March 2013 Revolving Credit Facility to $300.0 million and extended the facility's term by approximately six months to September 6, 2018.

As of October 31, 2014, we had an aggregate $411.1 million of February 2014 Term Loans and March 2014 Term Loans outstanding, bearing interest at an annual rate of 3.50%. Following the partial retirements of the term loans in June 2014, there are no scheduled principal payments on the term loans until August 2016. The vast majority of the term loans are due upon maturity in September 2019. There were no outstanding borrowings under the 2013 Revolving Credit Facility at October 31, 2014.

The 2013 Revolving Credit Facility contains a financial covenant that requires us to maintain a ratio of Consolidated Total Debt to Consolidated EBITDA (each as defined in the Credit Agreement) of no greater than 5.00 to 1 until January 31, 2016 and no greater than 4.50 to 1 thereafter (the "Leverage Ratio Covenant"). At October 31, 2014, our consolidated leverage ratio was approximately 2.5 to 1 compared to a permitted consolidated leverage ratio of 5.00 to 1, and our EBITDA for the twelve-month period then ended exceeded by at least $136.0 million the minimum EBITDA required to satisfy the Leverage Ratio Covenant given our outstanding debt as of such date.

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Contractual Obligations

Our Annual Report on Form 10-K for the year ended January 31, 2014 includes a table summarizing our contractual obligations of approximately $909 million as of January 31, 2014, including approximately $788 million for long-term debt obligations, including projected future interest. This table appears under Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in that report. As described above under "Financing Arrangements", during the nine months ended October 31, 2014, we incurred additional long-term debt in connection with our acquisition of KANA, executed several amendments to our Credit Agreement, issued the Notes, issued common stock, and repaid a portion of our outstanding indebtedness. As a result, our long-term debt obligations, including projected future interest, have increased from approximately $788 million at January 31, 2014 to approximately $927 million at October 31, 2014. Details regarding our long-term debt obligations are provided in Note 6, "Long-Term Debt" to our condensed consolidated financial statements included under Item 1 of this report.

Additional operating lease obligations that we assumed upon the February 3, 2014 acquisition of KANA and March 31, 2014 acquisition of UTX were less than $10.0 million and are not included in the contractual obligations table in our Annual Report on Form 10-K for the year ended January 31, 2014.

Other than the impact of the transactions described above, we believe that our contractual obligations and commercial commitments did not materially change during the nine months ended October 31, 2014.

Contingent Payments Associated with Business Combinations

In connection with certain of our business combinations, we have agreed to make contingent cash payments to the former owners of the acquired companies based upon achievement of performance targets following the acquisition dates.

For the nine months endedOctober 31, 2014, we made $10.0 million of payments under contingent consideration arrangements. As of October 31, 2014, potential future cash payments and earned consideration expected to be paid subsequent to October 31, 2014 under contingent consideration arrangements total $34.9 million, the estimated fair value of which was $12.8 million, including $4.4 million reported in accrued expenses and other current liabilities, and $8.4 million reported in other liabilities. The performance periods associated with these potential payments extend through January 2019.

Off-Balance Sheet Arrangements

As of October 31, 2014, we did not have any off-balance sheet arrangements that we believe have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenue or expenses, results of operations, liquidity, capital expenditures or capital resources that are material to investors.

Recent Accounting Pronouncements

New Accounting Pronouncements Implemented

In March 2013, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No. 2013-05, Foreign Currency Matters (Topic 830): Parent's Accounting for the Cumulative Translation Adjustment upon Derecognition of Certain Subsidiaries or Groups of Assets within a Foreign Entity or of an Investment in a Foreign Entity. This new standard is intended to resolve diversity in practice regarding the release into net income of a cumulative translation adjustment upon derecognition of a subsidiary or group of assets within a foreign entity. ASU No. 2013-05 was effective prospectively for us on February 1, 2014. The adoption of this standard did not impact our condensed consolidated financial statements.

New Accounting Pronouncements To Be Implemented

In April 2014, the FASB issued ASU No. 2014-08, Presentation of Financial Statements (Topic 205) and Property, Plant, and Equipment (Topic 360): Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity. ASU No. 2014-08 raises the threshold for a disposal to qualify as a discontinued operation and requires new disclosures of both discontinued operations and certain other disposals that do not meet the definition of a discontinued operation. It is effective for annual reporting periods beginning on or after December 15, 2014. Early adoption is permitted but only for disposals that have not been reported in previously issued financial statements. We are currently reviewing this standard, but we do not expect its adoption to materially impact our condensed consolidated financial statements, absent any disposals of components or groups of components that have a material effect on our financial results in future periods.

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In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606). ASU No. 2014-09 supersedes the revenue recognition requirements in Topic 605, Revenue Recognition, and most industry-specific revenue recognition guidance throughout the Industry Topics of the Accounting Standards Codification. Additionally, this update supersedes some cost guidance included in Subtopic 605-35, Revenue Recognition-Construction-Type and Production-Type Contracts. The core principle of the guidance is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. It is effective for the first interim period within annual reporting periods beginning after December 15, 2016, and early adoption is not permitted. Entities may choose from two adoption methods, with certain practical expedients. We are currently reviewing this standard to assess the impact on our future condensed consolidated financial statements and evaluating the available adoption methods.

In June 2014, the FASB issued ASU No. 2014-10, Development Stage Entities (Topic 915): Elimination of Certain Financial Reporting Requirements, Including an Amendment to Variable Interest Entities Guidance in Topic 810, Consolidation. ASU No. 2014-10 removes the financial reporting distinction between development stage entities and other reporting entities from GAAP and it eliminates an exception provided in the consolidation guidance for development stage enterprises. It is effective for fiscal years, and interim periods within those years, beginning after December 15, 2015, although early adoption is permitted. We are currently reviewing this standard to assess the impact on our future condensed consolidated financial statements.

In June 2014, the FASB issued ASU No. 2014-12, Compensation—Stock Compensation (Topic 718): Accounting for Share-Based Payments When the Terms of an Award Provide That a Performance Target Could Be Achieved after the Requisite Service Period, which requires that a performance target that affects vesting, and that could be achieved after the requisite service period, be treated as a performance condition. As such, the performance target should not be reflected in estimating the grant date fair value of the award. ASU No. 2014-12 is effective for annual reporting periods beginning after December 15, 2015, including interim periods within that reporting period, although early adoption is permitted. We are currently reviewing this standard to assess the impact on our future condensed consolidated financial statements.

In August 2014, the FASB issued ASU No. 2014-15, Presentation of Financial Statements—Going Concern (Subtopic 205-40): Disclosure of Uncertainties about an Entity's Ability to Continue as a Going Concern. This ASU defines management’s responsibility to evaluate whether there is substantial doubt about an organization’s ability to continue as a going concern and to provide related footnote disclosures. The provisions of ASU No. 2014-15 are effective for annual periods ending after December 15, 2016 and for annual and interim periods thereafter, and early adoption is permitted. The adoption of ASU No. 2014-15 is not expected to have a material effect on our future condensed consolidated financial statements.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

Market risk represents the risk of loss that may impact our financial condition due to adverse changes in financial market prices and rates. We are exposed to market risk related to changes in interest rates and foreign currency exchange rate fluctuations. To manage the volatility relating to interest rate and foreign currency risks, we periodically enter into derivative instruments including foreign currency forward exchange contracts and interest rate swap agreements. It is our policy to enter into derivative transactions only to the extent considered necessary to meet our risk management objectives. We use derivative instruments solely to reduce the financial impact of these risks and do not use derivative instruments for speculative purposes.

In June 2014, we issued $400.0 million in aggregate principal amount of 1.50% convertible senior notes due June 1, 2021 (the “Notes”). Holders may convert the Notes prior to maturity upon the occurrence of certain conditions. Upon conversion, we would be required to pay the holders, at our election, cash, shares of common stock, or a combination of both. Concurrent with the issuance of the Notes, we entered into the Note Hedges and sold the Warrants. These separate transactions were completed to reduce our exposure to potential dilution upon conversion of the Notes.

The Notes have a fixed annual interest rate of 1.50% and therefore do not have interest rate exposure. However, the fair values of the Notes are subject to interest rate risk, market risk and other factors due to the convertible feature. The fair values of the Notes are also affected by our common stock price. Generally, the fair values of Notes will increase as interest rates fall and/or our common stock price increases, and decrease as interest rates rise and/or our common stock price decreases. Changes in the fair values of the Notes do not impact our financial position, cash flows, or results of operations due to the fixed nature of the debt obligations. We do not carry the Notes at fair value, but we report the fair value of the Notes for disclosure purposes.

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The section entitled “Quantitative and Qualitative Disclosures About Market Risk” under Part II, Item 7A of our Annual Report on Form 10-K for the year ended January 31, 2014 provides detailed quantitative and qualitative discussions of the other market risks affecting our operations. Other than the market risks associated with our Notes as discussed above, we believe that our market risk profile did not materially change during the nine months ended October 31, 2014.

Item 4. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

Disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act, are controls and other procedures designed to ensure that information required to be disclosed in reports filed or submitted under the Exchange Act is recorded, processed, summarized, and reported, within the time periods specified by the rules and forms promulgated by the SEC. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure.

In connection with the preparation of this Quarterly Report on Form 10-Q, we conducted an evaluation, under the supervision and with the participation of management, including our Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures as of the end of the period covered by this report. Based upon this evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that, as of October 31, 2014, our disclosure controls and procedures were effective.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect every misstatement. An evaluation of effectiveness is subject to the risk that the controls may become inadequate because of changes in conditions, or that the degree of compliance with policies or procedures may decrease over time.

Changes in Internal Control over Financial Reporting

Under applicable SEC rules (Exchange Act Rules 13a-15(c) and 15d-15(c)) management is required to evaluate any change in internal control over financial reporting that occurred during each fiscal quarter that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting. In evaluating whether there were any reportable changes in our internal control over financial reporting during the three months ended October 31, 2014, we determined, with the participation of our Chief Executive Officer and Chief Financial Officer, that there were no changes in our internal control over financial reporting, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting, except as described below with respect to our new operations resulting from the acquisition of KANA.

In making the assessment of disclosure controls and procedures and of changes in our internal control over financial reporting as of the date of the evaluation, our management has excluded the operations of KANA. This exclusion is in accordance with the SEC’s general guidance that an assessment of a recently acquired business may be omitted from the scope of the evaluation in the year following the acquisition. We are currently assessing the control environment of this acquired business.

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PART II

Item 1. Legal Proceedings

See Note 16, "Commitments and Contingencies" of the Notes to the Condensed Consolidated Financial Statements under Part I, Item 1 for information regarding our legal proceedings.

Item 1A.Risk Factors

Except as set forth below, there have been no material changes to the Risk Factors described in Part I “Item 1A. Risk Factors” in our Annual Report on Form 10-K for the year ended January 31, 2014. In addition to the other information set forth in this Quarterly Report, you should carefully consider the risks discussed in our Annual Report on Form 10-K for the year ended January 31, 2014, which could materially affect our business, financial condition, or operating results. The risks described below and in our Annual Report on Form 10-K for the year ended January 31, 2014 are not the only risks facing us, however. Additional risks and uncertainties not currently known to us or that we currently deem to be insignificant also may materially and adversely affect our business, financial condition, or operating results in the future.

Our future success depends on our ability to execute on our growth strategy and properly manage investment in our business and operations.

Our strategy is to continue to invest in, enhance, and secure our business and operations and grow, both organically and through acquisitions. Investments in, among other things, new markets, new products, solutions, and technologies, research and development, infrastructure and systems, geographic expansion, and headcount are critical to achieving our growth strategy. However, such investments and efforts may not be successful, especially in new markets in which we have little or no experience, and even if successful, may negatively impact our short-term profitability. Our success depends on our ability to effectively and efficiently execute on our growth strategy, including our ability to properly allocate limited investment dollars, balance the extent and timing of investments with the associated impact on expenses and profitability, capture efficiencies and economies of scale, and compete in the new markets and with the new solutions in which we have invested. If we are unable to effectively and efficiently execute on our growth strategy and properly manage our investments and expenditures, our results of operations and the prices of our common stock and the Notes may be materially adversely affected.

We may not be able to identify suitable targets for acquisition or investment, or complete acquisitions or investments, on terms acceptable to us, which could negatively impact our ability to implement our growth strategy.

As part of our growth strategy, we have made a number of acquisitions and investments and expect to continue to make acquisitions and investments in the future, subject to the terms of our Credit Agreement, the indenture governing the Notes and other restrictions.

In many areas, we have seen the market for acquisitions become more competitive and valuations increase. In recent periods, several of our competitors have also completed acquisitions of companies in or adjacent to our markets. As a result, it may be more difficult for us to identify suitable acquisition or investment targets or to consummate acquisitions or investments once identified on acceptable terms or at all. If we are not able to execute on our acquisition strategy, we may not be able to achieve our growth strategy, may lose market share, or may lose our leadership position in one or more of our markets.

We have a significant amount of indebtedness, which exposes us to leverage risks and subjects us to covenants which may adversely affect our operations.

At October 31, 2014, we had total outstanding indebtedness of approximately $811.1 million under our Credit Agreement and the Notes, meaning that we are significantly leveraged. Our leverage position may, among other things:

• limit our ability to obtain additional debt financing in the future for working capital, capital expenditures, acquisitions, or other general corporate purposes;

• require us to dedicate a substantial portion of our cash flow from operations to debt service, reducing the availability of our cash flow for other purposes;

• require us to repatriate cash for debt service from our foreign subsidiaries resulting in dividend tax costs or require us to adopt other disadvantageous tax structures to accommodate debt service payments; or

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• increase our vulnerability to economic downturns, limit our ability to capitalize on significant business opportunities, and restrict our flexibility to react to changes in market or industry conditions.

In addition, because our indebtedness under our Credit Agreement bears interest at a variable rate, we are exposed to risk from fluctuations in interest rates in periods where market rates exceed the interest rate floor provided by our Credit Agreement.

The revolving credit facility under our Credit Agreement contains a financial covenant that requires us to maintain a maximum consolidated leverage ratio. Our ability to comply with the leverage ratio covenant is dependent upon our ability to continue to generate sufficient earnings each quarter, or in the alternative, to reduce expenses and/or reduce the level of our outstanding debt and we cannot assure that we will be successful in any or all of these regards.

Our Credit Agreement also includes a number of restrictive covenants which limit our ability to, among other things:

• incur additional indebtedness or liens or issue preferred stock;

• pay dividends or make other distributions or repurchase or redeem our stock or subordinated indebtedness;

• engage in transactions with affiliates;

• engage in sale-leaseback transactions;

• sell certain assets;

• change our lines of business;

• make investments, loans, or advances; and

• engage in consolidations, mergers, liquidations, or dissolutions.

These covenants could limit our ability to plan for or react to market conditions, to meet our capital needs, or to otherwise engage in transactions that might be considered beneficial to us.

If certain events of default occur under our Credit Agreement, our lenders could declare all amounts outstanding to be immediately due and payable. An acceleration of indebtedness under our Credit Agreement may result in an event of default under the indenture governing the Notes. Additionally, if a change of control as defined in our Credit Agreement were to occur, the lenders under our credit facilities would have the right to require us to repay all of our outstanding obligations under the facilities.

If a fundamental change as defined in the indenture governing the Notes were to occur, the holders may require us to purchase for cash all or any portion of their Notes at 100% of the principal amount of the Notes, plus accrued and unpaid interest to, but not including, the fundamental change purchase date. Additionally, in the event the conditional conversion feature of the Notes is triggered, holders of the Notes will be entitled to convert their Notes during specified periods at their option. If one or more holders elect to convert their Notes, unless we satisfy our conversion obligation by delivering solely shares of our common stock (other than cash in lieu of any fractional share), we would be required to settle all or a portion of our conversion obligation in cash, which could adversely affect our liquidity.

If any of these events were to occur, we may be forced to seek an amendment of and/or waiver under our debt agreements, raise additional capital through securities offerings, asset sales, or other transactions, or seek to refinance or restructure our debt. In such a case, there can be no assurance that we will be able to consummate such an amendment and/or waiver, capital raising transaction, refinancing, or restructuring on reasonable terms or at all.

We consider other financing and refinancing options from time to time, however, we cannot assure you that such options will be available to us on reasonable terms or at all. If one or more rating agencies were to downgrade our credit ratings, that could also impede our ability to refinance our existing debt or secure new debt, increase our future cost of borrowing, and create third-party concerns about our financial condition or results of operations.

The prices of our common stock and the Notes have been, and may continue to be, volatile and your investment could lose value.

All of the risk factors discussed in this section could affect the prices of our common stock and the Notes. The timing of announcements in the public market regarding new products, product enhancements or technological advances by our

59

competitors or us, and any announcements by us or our competitors of acquisitions, major transactions, or management changes could also affect the prices of our common stock and the Notes. These prices are subject to speculation in the press and the analyst community, including with respect to changes in recommendations or earnings estimates by financial analysts, changes in investors' or analysts' valuation measures for our stock, our credit ratings and market trends unrelated to our performance. Stock sales by our directors, officers, or other significant holders may also affect the prices of our common stock and the Notes. A significant drop in the price of our common stock or the Notes could also expose us to the risk of securities class actions lawsuits, which could result in substantial costs and divert management's attention and resources, which could adversely affect our business.

Our Notes may adversely affect the price of our common stock.

The price of our common stock is likely to be influenced by our Notes. For example, the price of our common stock could become more volatile and could be depressed by:

• Investors’ anticipation of the potential issuance of a substantial number of additional shares of our common stock upon conversion of the Notes;

• possible sales of our common stock by investors who view the Notes as a more attractive means of equity participation in us than owning shares of our common stock; and

• hedging or arbitrage trading activity that may develop involving the Notes and our common stock.

Item 2.     Unregistered Sales of Equity Securities and Use of Proceeds

None.

Item 3. Defaults Upon Senior Securities

None.

Item 4. Mine Safety Disclosures

Not applicable.

Item 5. Other Information

Not applicable.

60

Item 6.  Exhibits

Number	Description	Filed Herewith / Incorporated by Reference from
31.1	Certification of Dan Bodner, Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002	Filed herewith
31.2	Certification of Douglas E. Robinson, Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002	Filed herewith
32.1	Certification of the Chief Executive Officer pursuant to Securities Exchange Act Rule 13a-14(b) and 18 U.S.C. Section 1350 (1)	Filed herewith
32.2	Certification of the Chief Financial Officer pursuant to Securities Exchange Act Rule 13a-14(b) and 18 U.S.C. Section 1350 (1)	Filed herewith
101.INS	XBRL Instance Document	Filed herewith
101.SCH	XBRL Taxonomy Extension Schema Document	Filed herewith
101.CAL	XBRL Taxonomy Extension Calculation Linkbase Document	Filed herewith
101.DEF	XBRL Taxonomy Extension Definition Linkbase Document	Filed herewith
101.LAB	XBRL Taxonomy Extension Label Linkbase Document	Filed herewith
101.PRE	XBRL Taxonomy Extension Presentation Linkbase Document	Filed herewith

(1)These exhibits are being "furnished" with this periodic report and are not deemed "filed" with the SEC and are not incorporated by reference in any filing of the company under the Securities Act of 1933, as amended or the Securities Exchange Act of 1934, as amended.

61

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	VERINT SYSTEMS INC.
December 3, 2014	/s/ Dan Bodner
	Dan Bodner
	President and Chief Executive Officer
December 3, 2014	/s/ Douglas E. Robinson
	Douglas E. Robinson
	Chief Financial Officer (Principal Financial Officer and Principal Accounting Officer)

62

EX-31.1

EXHIBIT 31.1

CERTIFICATION BY THE CHIEF EXECUTIVE OFFICER PURSUANT TO SECTION 302 OF THE

SARBANES-OXLEY ACT OF 2002

I, Dan Bodner, certify that:

1.I have reviewed this quarterly report on Form 10-Q of Verint Systems Inc.;

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c)Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d)Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter, (the fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions):

a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Dated:	December 3, 2014	By:	/s/ Dan Bodner
			Dan Bodner
			President and Chief Executive Officer
			Principal Executive Officer

EX-31.2

EXHIBIT 31.2

CERTIFICATION BY THE CHIEF FINANCIAL OFFICER PURSUANT TO SECTION 302 OF THE

SARBANES-OXLEY ACT OF 2002

I, Douglas E. Robinson, certify that:

1.I have reviewed this quarterly report on Form 10-Q of Verint Systems Inc.;

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c)Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d)Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter, (the fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions):

a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Dated:	December 3, 2014	By:	/s/ Douglas E. Robinson
			Douglas E. Robinson
			Chief Financial Officer
			Principal Financial Officer

EX-32.1

EXHIBIT 32.1

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Verint Systems Inc. (the “Company”) on Form 10-Q for the period ended October 31, 2014 (the “Report”), I, Dan Bodner, President and Chief Executive Officer of the Company, hereby certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to my knowledge:

(1)the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

(2)the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Dated:	December 3, 2014	/s/ Dan Bodner
		Dan Bodner
		President and Chief Executive Officer
		Principal Executive Officer

This certification accompanies this Report on Form 10-Q pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 and shall not, except to the extent required by such Act, be deemed filed by the Company for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Such certification will not be deemed to be incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Exchange Act, except to the extent that the Company specifically incorporates it by reference.

EX-32.2

EXHIBIT 32.2

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Verint Systems Inc. (the “Company”) on Form 10-Q for the period ended October 31, 2014 (the “Report”), I, Douglas E. Robinson, Chief Financial Officer of the Company, hereby certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to my knowledge:

(1)the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

(2)the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Dated:	December 3, 2014	/s/ Douglas E. Robinson
		Douglas E. Robinson
		Chief Financial Officer
		Principal Financial Officer

This certification accompanies this Report on Form 10-Q pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 and shall not, except to the extent required by such Act, be deemed filed by the Company for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Such certification will not be deemed to be incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Exchange Act, except to the extent that the Company specifically incorporates it by reference.

XML

NET INCOME PER COMMON SHARE ATTRIBUTABLE TO VERINT SYSTEMS INC. NET INCOME PER COMMON SHARE ATTRIBUTABLE TO VERINT SYSTEMS INC. - CALCULATION (Details) (USD $) In Thousands, except Share data, unless otherwise specified	3 Months Ended		9 Months Ended
	Oct. 31, 2014	Oct. 31, 2013	Oct. 31, 2014	Oct. 31, 2013
Net Income Attributable to Verint Systems Inc. [Abstract]
Net income	$ 11,473	$ 24,054	$ 29,912	$ 34,622
Net income attributable to noncontrolling interest	803	1,567	3,564	3,752
Net income attributable to Verint Systems Inc.	10,670	22,487	26,348	30,870
Dividends on preferred stock	0	0	0	(174)
Net income attributable to Verint Systems Inc. common shares	10,670	22,487	26,348	30,696
Dilutive effect of dividends on Preferred Stock	0	0	0	0
Net income attributable to Verint Systems Inc. for diluted net income per common share	$ 10,670	$ 22,487	$ 26,348	$ 30,696
Weighted Average Number of Shares Outstanding Reconciliation [Abstract]
Basic (in shares)	60,644,000	53,374,000	57,222,000	52,781,000
Dilutive effect of employee equity award plans (in shares)	848,000	572,000	1,110,000	780,000
Dilutive effect of 1.50% convertible senior notes (in shares)	0	0	0	0
Dilutive effect of warrants (in shares)	0	0	0	0
Dilutive effect of assumed conversion of Preferred Stock (in shares)	0	0	0	0
Diluted (in shares)	61,492,000	53,946,000	58,332,000	53,561,000
Net Income Per Common Share Attributable to Verint Systems Inc. [Abstract]
Basic (in dollars per share)	$ 0.18	$ 0.42	$ 0.46	$ 0.58
Diluted (in dollars per share)	$ 0.17	$ 0.42	$ 0.45	$ 0.57

XML

INTANGIBLE ASSETS AND GOODWILL - GOODWILL (Details) (USD $) In Thousands, unless otherwise specified	9 Months Ended
	Oct. 31, 2014	Oct. 31, 2014
Goodwill activity
Goodwill, gross at the beginning of the period	$ 920,254	$ 1,287,869
Accumulated impairment losses	66,865	66,865
Goodwill, net at the beginning of the period	853,389
Business combinations	378,576
Foreign currency translation and other	(10,961)
Goodwill, net, at the end of the period	1,221,004
Enterprise Intelligence
Goodwill activity
Goodwill, gross at the beginning of the period	795,722	1,115,995
Accumulated impairment losses	30,791	30,791
Goodwill, net at the beginning of the period	764,931
Business combinations	330,065
Foreign currency translation and other	(9,792)
Goodwill, net, at the end of the period	1,085,204
Communications Intelligence
Goodwill activity
Goodwill, gross at the beginning of the period	47,838	96,312
Accumulated impairment losses	0	0
Goodwill, net at the beginning of the period	47,838
Business combinations	48,511
Foreign currency translation and other	(37)
Goodwill, net, at the end of the period	96,312
Video Intelligence
Goodwill activity
Goodwill, gross at the beginning of the period	76,694	75,562
Accumulated impairment losses	36,074	36,074
Goodwill, net at the beginning of the period	40,620
Business combinations	0
Foreign currency translation and other	(1,132)
Goodwill, net, at the end of the period	$ 39,488

XML

BUSINESS COMBINATIONS BUSINESS COMBINATIONS - NINE MONTHS ENDED OCTOBER 31, 2014 - PRO FORMA INFORMATION (Details) (USD $) In Thousands, except Per Share data, unless otherwise specified	3 Months Ended		9 Months Ended		3 Months Ended
	Oct. 31, 2014	Oct. 31, 2013	Oct. 31, 2014	Oct. 31, 2013	Apr. 30, 2014 KANA Software Inc. Enterprise Intelligence
Business Acquisition, Pro Forma Information, Nonrecurring Adjustment [Line Items]
Valuation Allowance, Deferred Tax Asset, Change in Amount			$ 45,171	$ 0	$ (45,200)
Business Acquisition, Pro Forma Information [Abstract]
Pro Forma Revenue	288,279	256,879	842,784	737,706
Pro Forma Net Income	17,650	15,826	15,419	37,146
Pro Forma Net Income Attributable to Verint Systems Inc.	$ 16,847	$ 14,259	$ 11,855	$ 33,394
Pro Forma Net Income Per Common Share Attributable to Verint Systems Inc., Basic (in dollars per share)	$ 0.28	$ 0.27	$ 0.21	$ 0.63
Pro Forma Net Income Per Common Share Attributalbe to Verint Systems Inc., Diluted (in dollars per share)	$ 0.27	$ 0.26	$ 0.20	$ 0.62

XML

STOCKHOLDERS' EQUITY STOCKHOLDERS' EQUITY - ISSUANCE OF COMMON STOCK (Details) (USD $)	0 Months Ended	9 Months Ended
	Jun. 18, 2014	Oct. 31, 2014	Oct. 31, 2013	Jun. 18, 2014
Equity [Abstract]
Common stock issued in public offering (in shares)	5,750,000
Price per share of common stock issued				$ 47.75
Proceeds from issuance of common stock	$ 265,600,000	$ 274,563,000	$ 0
Common stock - other issuance costs	$ 700,000

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LONG-TERM DEBT LONG-TERM DEBT - SUMMARY (Details) (USD $) In Thousands, unless otherwise specified	Oct. 31, 2014	Jan. 31, 2014	Oct. 31, 2014 1.50% Convertible Senior Notes	Jun. 18, 2014 1.50% Convertible Senior Notes	Jan. 31, 2014 1.50% Convertible Senior Notes	Oct. 31, 2014 February 2014 Term Loans	Jan. 31, 2014 February 2014 Term Loans	Oct. 31, 2014 March 2014 Term Loans	Mar. 07, 2014 March 2014 Term Loans	Jan. 31, 2014 March 2014 Term Loans	Oct. 31, 2014 March 2013 Term Loans	Jan. 31, 2014 March 2013 Term Loans	Oct. 31, 2014 Other debt	Jan. 31, 2014 Other debt
Debt Instrument
Principal Amount - 1.50% Convertible Senior Notes			$ 400,000	$ 400,000	$ 0
Gross term loan borrowings						130,729	0	280,413			0	645,125
Unamortized debt discount			(76,535)		0	(289)	0				0	(2,827)
1.50% Convertible Notes, Net			323,465	319,900
Term Loans						130,440	0	280,413	643,500	0	0	642,298
Total debt	734,352	642,385											34	87
Current maturities of long-term debt	36	6,555
Long-term debt	$ 734,316	$ 635,830

XML

FAIR VALUE MEASUREMENTS - CONTINGENT CONSIDERATION TABLE (Details) (Liability for contingent consideration, USD $) In Thousands, unless otherwise specified	9 Months Ended			12 Months Ended	9 Months Ended	12 Months Ended
	Oct. 31, 2014	Oct. 31, 2013	Oct. 31, 2014 Minimum	Jan. 31, 2014 Minimum	Oct. 31, 2014 Maximum	Jan. 31, 2014 Maximum
Changes in the estimated fair value of liability for contingent consideration measured using significant unobservable inputs (Level 3)
Fair value measurement at the beginning of the period	$ 17,307	$ 25,041
Contingent consideration liabilities recorded for business combinations	4,947	4,557
Changes in fair values, recorded in operating expenses	618	(1,635)
Payments of contingent consideration	(10,037)	(17,094)
Foreign exchange translation and other	(56)	0
Fair value measurement at the end of the period	$ 12,779	$ 10,869
Discount rates used in calculating fair values of contingent consideration liabilities (as a percent)			2.00%	1.10%	40.00%	27.00%

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BUSINESS COMBINATIONS BUSINESS COMBINATIONS - NINE MONTHS ENDED OCTOBER 31, 2014 - PURCHASE PRICE ALLOCATIONS (Details) (USD $) In Thousands, unless otherwise specified					3 Months Ended				3 Months Ended
	Oct. 31, 2014	Jan. 31, 2014	Oct. 31, 2014 Enterprise Intelligence	Jan. 31, 2014 Enterprise Intelligence	Apr. 30, 2014 Enterprise Intelligence KANA Software Inc.	Feb. 03, 2014 Enterprise Intelligence KANA Software Inc.	Oct. 31, 2014 Communications Intelligence	Jan. 31, 2014 Communications Intelligence	Apr. 30, 2014 Communications Intelligence UTX Acquisition	Mar. 31, 2014 Communications Intelligence UTX Acquisition	Feb. 03, 2014 Customer Relationships Enterprise Intelligence KANA Software Inc.	Mar. 31, 2014 Customer Relationships Communications Intelligence UTX Acquisition	Feb. 03, 2014 Developed Technology Enterprise Intelligence KANA Software Inc.	Mar. 31, 2014 Developed Technology Communications Intelligence UTX Acquisition	Feb. 03, 2014 Trademarks and Trade Names Enterprise Intelligence KANA Software Inc.	Mar. 31, 2014 Trademarks and Trade Names Communications Intelligence UTX Acquisition	Feb. 03, 2014 Other Intangible Assets Enterprise Intelligence KANA Software Inc.	Mar. 31, 2014 Other Intangible Assets Communications Intelligence UTX Acquisition
Business Acquisition
Cash					$ 541,685				$ 82,901
Fair Value of Contingent Consideration					0				1,347
Total Purchase Price					541,685				84,248
Accounts Receivable						18,473				0
Other Current Assets, Including Cash Acquired						48,948				3,873
Other Assets						12,124				924
Current and Other Liabilities						16,509				263
Deferred Revenue - Current and Long-Term						7,932				340
Deferred Income Taxes - Current and Long-Term						(63,184)				(4,882)
Net tangible liabilities						(8,080)				(688)
Identifiable intangible assets						219,700				40,500	152,700	2,000	55,500	37,400	11,500	0	0	1,100
Goodwill	1,221,004	853,389	1,085,204	764,931		330,065	96,312	47,838		44,436
Total Purchase Price Allocations						$ 541,685				$ 84,248

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FAIR VALUE MEASUREMENTS (Tables)

9 Months Ended

Oct. 31, 2014

Fair Value Disclosures [Abstract]

Schedule of assets and liabilities measured at fair value on recurring basis

Our assets and liabilities measured at fair value on a recurring basis consisted of the following as of October 31, 2014 and January 31, 2014: 

	October 31, 2014
	Fair Value Hierarchy Category
(in thousands)	Level 1		Level 2		Level 3
Assets:
Money market funds	$	194	$	—	$	—
Commercial paper (1)	—		2,999		—
Short-term investments, classified as available-for-sale	—		13,796		—
Foreign currency forward contracts	—		1,886		—
Total assets	$	194	$	18,681	$	—
Liabilities:
Foreign currency forward contracts	$	—	$	7,530	$	—
Contingent consideration - business combinations	—		—		12,779
Total liabilities	$	—	$	7,530	$	12,779

	January 31, 2014
	Fair Value Hierarchy Category
(in thousands)	Level 1		Level 2		Level 3
Assets:
Money market funds	$	14,023	$	—	$	—
Commercial paper (1)	—		49,991		—
Short-term investments, classified as available for sale	—		9,406		—
Foreign currency forward contracts	—		2,466		—
Total assets	$	14,023	$	61,863	$	—
Liabilities:
Foreign currency forward contracts	$	—	$	846	$	—
Contingent consideration - business combinations	—		—		17,307
Total liabilities	$	—	$	846	$	17,307

(1) Commercial paper investments with remaining maturities of three months or less at time of purchase, classified within

cash and cash equivalents.

Schedule of changes in the estimated fair value of liabilities for contingent consideration

The following table presents the changes in the estimated fair values of our liabilities for contingent consideration measured using significant unobservable inputs (Level 3) for the nine months endedOctober 31, 2014 and 2013: 

	Nine Months Ended October 31,
(in thousands)	2014			2013
Fair value measurement at beginning of period	$	17,307		$	25,041
Contingent consideration liabilities recorded for business combinations	4,947			4,557
Changes in fair values, recorded in operating expenses	618			(1,635		)
Payments of contingent consideration	(10,037		)	(17,094		)
Foreign exchange translation and other	(56		)	—
Fair value measurement at end of period	$	12,779		$	10,869

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FAIR VALUE MEASUREMENTS - OTHER FAIR VALUE DISCLOSURES (Details) (USD $) In Millions, unless otherwise specified	Oct. 31, 2014	Jan. 31, 2014
Term Loans | Level 3
Assets and Liabilities Measured at Fair Value on Recurring Basis
Term Loans - Disclosure of Fair Value	$ 408	$ 647
1.50% Convertible Senior Notes | Level 2
Assets and Liabilities Measured at Fair Value on Recurring Basis
Convertible Notes - Disclosure of Fair Value	$ 447

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STOCKHOLDERS' EQUITY STOCKHOLDERS' EQUITY - AMOUNTS RECLASSIFIED OUT OF ACCUMULATED OTHER COMPREHENSIVE LOSS (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended
	Oct. 31, 2014	Oct. 31, 2013	Oct. 31, 2014	Oct. 31, 2013
Reclassifications Out of Accumulated Other Comprehensive Income (Loss)
Net (Gains) Losses Reclassified from Other Comprehensive Income (Loss) into the Consolidated Statements of Operations	$ 876	$ (1,984)	$ (993)	$ (4,348)
Other Comprehensive Income (Loss), Reclassification Adjustment on Derivatives Included in Net Income, Income Taxes	111	(174)	(22)	(307)
Amounts reclassified out of accumulated other comprehensive income (loss)	765	(1,810)	(971)	(4,041)
Cost of revenue - product
Reclassifications Out of Accumulated Other Comprehensive Income (Loss)
Net (Gains) Losses Reclassified from Other Comprehensive Income (Loss) into the Consolidated Statements of Operations	80	(167)	(65)	(370)
Cost of revenue - service and support
Reclassifications Out of Accumulated Other Comprehensive Income (Loss)
Net (Gains) Losses Reclassified from Other Comprehensive Income (Loss) into the Consolidated Statements of Operations	68	(178)	(61)	(383)
Research and development, net
Reclassifications Out of Accumulated Other Comprehensive Income (Loss)
Net (Gains) Losses Reclassified from Other Comprehensive Income (Loss) into the Consolidated Statements of Operations	499	(1,123)	(578)	(2,455)
Selling, general and administrative
Reclassifications Out of Accumulated Other Comprehensive Income (Loss)
Net (Gains) Losses Reclassified from Other Comprehensive Income (Loss) into the Consolidated Statements of Operations	$ 229	$ (516)	$ (289)	$ (1,140)

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MERGER WITH CTI MERGER WITH CTI - CONSOLIDATED FINANCIAL STATEMENT IMPACT (Details) (USD $) In Millions, unless otherwise specified	Feb. 04, 2013
Series A Preferred Stock [Member]
Business Acquisition
Preferred Stock, Carrying Amount	$ 285.5
CTI Merger
Business Acquisition
CTI's net assets at closing	$ 14.1

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LONG-TERM DEBT LONG-TERM DEBT - NOTE HEDGES AND WARRANTS (Details) (USD $) In Thousands, except Share data, unless otherwise specified	9 Months Ended
	Oct. 31, 2014	Oct. 31, 2013
Derivative Instruments and Hedging Activities Disclosure [Abstract]
Exercise Price of Warrants (in dollars per share)	75.00
Note Hedges - Shares	6,205,000
Note Hedges - Strike Price (in dollars per share)	64.46
Payments for note hedges	$ 60,800	$ 0
Warrants (in shares)	6,205,000
Proceeds from issuance of warrants	$ 45,188	$ 0

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INCOME TAXES INCOME TAXES - UNRECOGNIZED TAX BENEFITS (Details) (USD $) In Millions, unless otherwise specified	Oct. 31, 2014	Jan. 31, 2014
Income Tax Disclosure [Abstract]
Unrecognized Tax Benefits	$ 151.9	$ 145.4
Unrecognized Tax Benefits, Income Tax Penalties and Interest Accrued	10.3	8.7
Unrecognized Tax Benefits that Would Impact Effective Tax Rate	146.5	139.7
Significant Change in Unrecognized Tax Benefits is Reasonably Possible, Amount of Unrecorded Benefit	$ 2.9

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STOCK-BASED COMPENSATION STOCK-BASED COMPENSATION - STOCK BONUS PROGRAM (Details) (USD $) In Thousands, except Share data, unless otherwise specified	9 Months Ended	3 Months Ended	12 Months Ended
	Oct. 31, 2014	Jul. 31, 2014 Stock Bonus Program	Jan. 31, 2015 Stock Bonus Program	Jan. 31, 2014 Stock Bonus Program	Oct. 31, 2014 Stock Bonus Program
Stock-Based Compensation Plans
Stock Bonus Program, Number of Shares Authorized			125,000	150,000
Discount from market price (as a percent)			15.00%	15.00%
Stock Issued During Period - Stock Bonus Program		91,000
Vesting period for executive officers	1 year
Total accrued liability				$ 4,900	$ 3,400

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DERIVATIVE FINANCIAL INSTRUMENTS - GAINS AND LOSSES (Details) (USD $)	3 Months Ended		9 Months Ended
	Oct. 31, 2014	Oct. 31, 2013	Oct. 31, 2014	Oct. 31, 2013	Jan. 31, 2014
DERIVATIVE FINANCIAL INSTRUMENTS
Net (Losses) Gains Reclassified from Other Comprehensive Income (Loss) into the Consolidated Statements of Operations	$ 876,000	$ (1,984,000)	$ (993,000)	$ (4,348,000)
Derivative not designated as hedging instruments
DERIVATIVE FINANCIAL INSTRUMENTS
Gains (losses) recognized on derivatives	1,562,000	(721,000)	1,665,000	(44,000)
Foreign currency forward contracts | Derivative designated as hedging instruments
DERIVATIVE FINANCIAL INSTRUMENTS
Foreign currency forward contracts underlying net losses recorded in accumulated other comprehensive loss expected to be reclassified into earnings within the next twelve months	6,700,000		6,700,000
Foreign currency forward contracts | Derivative not designated as hedging instruments
DERIVATIVE FINANCIAL INSTRUMENTS
Gains (losses) recognized on derivatives	1,562,000	(721,000)	1,665,000	(44,000)
Foreign currency forward contracts | Cash flow hedging | Derivative designated as hedging instruments
DERIVATIVE FINANCIAL INSTRUMENTS
Net (Losses) Gains Recognized in Accumulated Other Comprehensive Income (Loss)	(6,722,000)		(6,722,000)		1,485,000
Net (Losses) Gains Reclassified from Other Comprehensive Income (Loss) into the Consolidated Statements of Operations	(876,000)	1,984,000	993,000	4,348,000
Gains (losses) from ineffectiveness	$ 0	$ 0	$ 0	$ 0

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MERGER WITH CTI MERGER WITH CTI - EXCHANGE OF SHARES (Details)	Oct. 31, 2014	Jan. 31, 2014	Feb. 04, 2013 CTI Merger
Merger with CTI
Number of common stock shares issued to CTI shareholders in the Merger (in shares)			28,600,000
CTI common stock shares issued and outstanding (in shares)	60,707,000	53,605,000	220,000,000
Shares of Common Stock Held by CTI (in shares)			16,300,000

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FAIR VALUE MEASUREMENTS - FAIR VALUE TABLE (Details) (Recurring, USD $) In Thousands, unless otherwise specified	Oct. 31, 2014	Jan. 31, 2014
Level 1
Assets:
Money market funds	$ 194	$ 14,023
Commercial Paper (with remaining maturities of three months or less at time of purchase, classified within cash and cash equivalents)	0	0
Short-term investments, classified as available-for-sale	0	0
Foreign currency forward contracts	0	0
Total assets	194	14,023
Liabilities:
Foreign currency forward contracts	0	0
Contingent consideration- business combinations	0	0
Total liabilities	0	0
Level 2
Assets:
Money market funds	0	0
Commercial Paper (with remaining maturities of three months or less at time of purchase, classified within cash and cash equivalents)	2,999	49,991
Short-term investments, classified as available-for-sale	13,796	9,406
Foreign currency forward contracts	1,886	2,466
Total assets	18,681	61,863
Liabilities:
Foreign currency forward contracts	7,530	846
Contingent consideration- business combinations	0	0
Total liabilities	7,530	846
Level 3
Assets:
Money market funds	0	0
Commercial Paper (with remaining maturities of three months or less at time of purchase, classified within cash and cash equivalents)	0	0
Short-term investments, classified as available-for-sale	0	0
Foreign currency forward contracts	0	0
Total assets	0	0
Liabilities:
Foreign currency forward contracts	0	0
Contingent consideration- business combinations	12,779	17,307
Total liabilities	$ 12,779	$ 17,307

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STOCKHOLDERS' EQUITY - TREASURY STOCK/NONCONTROLLING INTEREST (Details) (USD $) In Thousands, except Share data, unless otherwise specified	9 Months Ended
	Oct. 31, 2014	Oct. 31, 2013	Jan. 31, 2014
Class of Stock [Line Items]
Treasury stock (in shares)	348,000		302,000
Treasury stock, cost	$ 10,251		$ 8,013
Purchases of treasury stock (in shares)	46,000	0
Purchases of treasury stock, cost	$ 2,238	$ 0
Noncontrolling ownership percentage in joint venture (as a percent)	50.00%

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BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES (Policies)

9 Months Ended

Oct. 31, 2014

Accounting Policies [Abstract]

Principles of Consolidation

Principles of Consolidation

The accompanying consolidated financial statements include the accounts of Verint Systems Inc., our wholly owned subsidiaries, and a joint venture in which we hold a 50% equity interest.  This joint venture functions as a systems integrator for Asian markets and is a variable interest entity in which we are the primary beneficiary.  Investments in companies in which we have less than a 20% ownership interest and do not exercise significant influence are accounted for at cost.  We include the results of operations of acquired companies from the date of acquisition.  All significant intercompany transactions and balances are eliminated.

Use of Estimates

Use of Estimates

The preparation of financial statements in conformity with GAAP requires our management to make estimates and assumptions, which may affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenue and expenses during the reporting period.  Actual results could differ from those estimates.

Significant Accounting Policies

Significant Accounting Policies

Our significant accounting policies are described in Note 1 to the consolidated financial statements included in our Annual Report on Form 10-K for the year ended January 31, 2014. There were no significant changes to our significant accounting policies during the nine months ended October 31, 2014. Additional disclosures regarding our policy for calculating net income per common share attributable to Verint Systems Inc. appear below.

Net Income Per Common Share Attributable to Verint Systems Inc.

Net Income Per Common Share Attributable to Verint Systems Inc.

Shares used in the calculation of basic net income per common share are based on the weighted-average number of common shares outstanding during the accounting period. Shares used in the calculation of basic net income per common share include vested but unissued shares underlying awards of restricted stock units when all necessary conditions for earning those shares have been satisfied at the award's vesting date, but exclude unvested shares of restricted stock because they are contingent upon future service conditions.

Shares used in the calculation of diluted net income per common share are based on the weighted-average number of common shares outstanding, adjusted for potentially dilutive common shares outstanding during the period. Potentially dilutive common shares from warrants and stock-based compensation plans are determined using the treasury stock method.

We have the option to pay cash, issue shares of common stock, or any combination thereof for the aggregate amount due upon conversion of our 1.50% convertible senior notes due June 1, 2021 (the “Notes”), further details for which appear in Note 6, “Long-Term Debt”. We currently intend to settle the principal amount of the Notes in cash upon conversion and as a result, only the amounts payable in excess of the principal amounts of the Notes, if any, are assumed to be settled with shares of common stock for purposes of computing diluted net income per share.

Potentially dilutive common shares also included the assumed conversion of our Series A Convertible Perpetual Preferred Stock ("Preferred Stock"), if dilutive, for periods prior to cancellation of the Preferred Stock on February 4, 2013 in connection with the CTI Merger. The CTI Merger is further discussed in Note 14, "Merger with CTI".

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

Recent Accounting Pronouncements

Recent Accounting Pronouncements

New Accounting Pronouncements Implemented

In March 2013, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No. 2013-05, Foreign Currency Matters (Topic 830): Parent's Accounting for the Cumulative Translation Adjustment upon Derecognition of Certain Subsidiaries or Groups of Assets within a Foreign Entity or of an Investment in a Foreign Entity. This new standard is intended to resolve diversity in practice regarding the release into net income of a cumulative translation adjustment upon derecognition of a subsidiary or group of assets within a foreign entity. ASU No. 2013-05 was effective prospectively for us on February 1, 2014. The adoption of this standard did not impact our condensed consolidated financial statements.

New Accounting Pronouncements To Be Implemented

In April 2014, the FASB issued ASU No. 2014-08, Presentation of Financial Statements (Topic 205) and Property, Plant, and Equipment (Topic 360): Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity. ASU No. 2014-08 raises the threshold for a disposal to qualify as a discontinued operation and requires new disclosures of both discontinued operations and certain other disposals that do not meet the definition of a discontinued operation. It is effective for annual reporting periods beginning on or after December 15, 2014. Early adoption is permitted but only for disposals that have not been reported in previously issued financial statements. We are currently reviewing this standard, but we do not expect its adoption to materially impact our condensed consolidated financial statements, absent any disposals of components or groups of components that have a material effect on our financial results in future periods.

In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606). ASU No. 2014-09 supersedes the revenue recognition requirements in Topic 605, Revenue Recognition, and most industry-specific revenue recognition guidance throughout the Industry Topics of the Accounting Standards Codification. Additionally, this update supersedes some cost guidance included in Subtopic 605-35, Revenue Recognition-Construction-Type and Production-Type Contracts. The core principle of the guidance is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. It is effective for the first interim period within annual reporting periods beginning after December 15, 2016, and early adoption is not permitted. Entities may choose from two adoption methods, with certain practical expedients. We are currently reviewing this standard to assess the impact on our future condensed consolidated financial statements and evaluating the available adoption methods.

In June 2014, the FASB issued ASU No. 2014-10, Development Stage Entities (Topic 915): Elimination of Certain Financial Reporting Requirements, Including an Amendment to Variable Interest Entities Guidance in Topic 810, Consolidation. ASU No. 2014-10 removes the financial reporting distinction between development stage entities and other reporting entities from GAAP and it eliminates an exception provided in the consolidation guidance for development stage enterprises. It is effective for fiscal years, and interim periods within those years, beginning after December 15, 2015, although early adoption is permitted. We are currently reviewing this standard to assess the impact on our future condensed consolidated financial statements.

In June 2014, the FASB issued ASU No. 2014-12, Compensation—Stock Compensation (Topic 718): Accounting for Share-Based Payments When the Terms of an Award Provide That a Performance Target Could Be Achieved after the Requisite Service Period, which requires that a performance target that affects vesting, and that could be achieved after the requisite service period, be treated as a performance condition. As such, the performance target should not be reflected in estimating the grant date fair value of the award. ASU No. 2014-12 is effective for annual reporting periods beginning after December 15, 2015, including interim periods within that reporting period, although early adoption is permitted. We are currently reviewing this standard to assess the impact on our future condensed consolidated financial statements.

In August 2014, the FASB issued ASU No. 2014-15, Presentation of Financial Statements—Going Concern (Subtopic 205-40): Disclosure of Uncertainties about an Entity's Ability to Continue as a Going Concern. This ASU defines management’s responsibility to evaluate whether there is substantial doubt about an organization’s ability to continue as a going concern and to provide related footnote disclosures. The provisions of ASU No. 2014-15 are effective for annual periods ending after December 15, 2016 and for annual and interim periods thereafter, and early adoption is permitted. The adoption of ASU No. 2014-15 is not expected to have a material effect on our future condensed consolidated financial statements.

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INTANGIBLE ASSETS AND GOODWILL - INTANGIBLE ASSETS (Details) (USD $) In Thousands, unless otherwise specified	Oct. 31, 2014	Jan. 31, 2014
Acquisition-related intangible assets
Intangible assets with finite lives, Cost	$ 616,338	$ 368,287
Intangible assets with finite lives, Accumulated Amortization	(281,741)	(237,140)
Intangible assets with finite lives, Net	334,597	131,147
Total intangible assets, cost	618,038	369,987
Total intangible assets, net	336,297	132,847
In-process research and development, with indefinite lives
Acquisition-related intangible assets
Intangible assets with indefinite lives, cost	1,700	1,700
Customer Relationships
Acquisition-related intangible assets
Intangible assets with finite lives, Cost	388,008	240,208
Intangible assets with finite lives, Accumulated Amortization	(169,745)	(141,714)
Intangible assets with finite lives, Net	218,263	98,494
Acquired Technology
Acquisition-related intangible assets
Intangible assets with finite lives, Cost	200,078	106,361
Intangible assets with finite lives, Accumulated Amortization	(98,097)	(76,922)
Intangible assets with finite lives, Net	101,981	29,439
Trade Names
Acquisition-related intangible assets
Intangible assets with finite lives, Cost	19,801	13,378
Intangible assets with finite lives, Accumulated Amortization	(9,007)	(11,378)
Intangible assets with finite lives, Net	10,794	2,000
Non-competition Agreements
Acquisition-related intangible assets
Intangible assets with finite lives, Cost	3,625	5,514
Intangible assets with finite lives, Accumulated Amortization	(2,149)	(4,970)
Intangible assets with finite lives, Net	1,476	544
Distribution Network
Acquisition-related intangible assets
Intangible assets with finite lives, Cost	4,440	2,440
Intangible assets with finite lives, Accumulated Amortization	(2,416)	(1,840)
Intangible assets with finite lives, Net	2,024	600
Backlog
Acquisition-related intangible assets
Intangible assets with finite lives, Cost	386	386
Intangible assets with finite lives, Accumulated Amortization	(327)	(316)
Intangible assets with finite lives, Net	$ 59	$ 70

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CASH, CASH EQUIVALENTS AND SHORT-TERM INVESTMENTS CASH, CASH EQUIVALENTS AND SHORT-TERM INVESTMENTS - SUMMARY (Details) (USD $) In Thousands, unless otherwise specified	9 Months Ended	12 Months Ended
	Oct. 31, 2014	Jan. 31, 2014
Commercial paper and corporate debt securities (available-for-sale)
Schedule of Available-for-sale Securities
Cost basis	$ 13,774	$ 9,402
Gross Unrealized Gains	22	4
Gross Unrealized Losses	0	0
Estimated Fair Value	13,796	9,406
Bank time deposits
Schedule of Available-for-sale Securities
Cost basis	26,340	22,643
Gross Unrealized Gains	0	0
Gross Unrealized Losses	0	0
Estimated Fair Value	26,340	22,643
Total short-term investments
Schedule of Available-for-sale Securities
Cost basis	40,114	32,045
Gross Unrealized Gains	22	4
Gross Unrealized Losses	0	0
Estimated Fair Value	40,136	32,049
Cash and bank time deposits
Schedule of Available-for-sale Securities
Cost basis	189,142	314,604
Gross Unrealized Gains	0	0
Gross Unrealized Losses	0	0
Estimated Fair Value	189,142	314,604
Money market funds
Schedule of Available-for-sale Securities
Cost basis	194	14,023
Gross Unrealized Gains	0	0
Gross Unrealized Losses	0	0
Estimated Fair Value	194	14,023
Commercial paper
Schedule of Available-for-sale Securities
Cost basis	2,999	49,986
Gross Unrealized Gains	0	5
Gross Unrealized Losses	0	0
Estimated Fair Value	2,999	49,991
Total cash and cash equivalents
Schedule of Available-for-sale Securities
Cost basis	192,335	378,613
Gross Unrealized Gains	0	5
Gross Unrealized Losses	0	0
Estimated Fair Value	$ 192,335	$ 378,618

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INCOME TAXES INCOME TAXES - PROVISION FOR (BENEFIT FROM) INCOME TAXES (Details) (USD $)	3 Months Ended		9 Months Ended		3 Months Ended
	Oct. 31, 2014	Oct. 31, 2013	Oct. 31, 2014	Oct. 31, 2013	Apr. 30, 2014 Enterprise Intelligence KANA Software Inc.
Valuation Allowance
Valuation Allowance, Deferred Tax Asset, Change in Amount			$ 45,171,000	$ 0	$ (45,200,000)
Income Tax Disclosures
Provision for (benefit from) income taxes	4,766,000	5,957,000	(31,788,000)	11,869,000
Income (loss) before provision for (benefit from) income taxes	16,200,000	30,000,000	(1,900,000)	46,500,000
Effective income tax rate (as a percent)	29.30%	19.80%	1694.50%	25.50%
Income tax expense, excluding valuation allowance release			$ 13,400,000
Effective income tax rate, excluding valuation allowance release (as a percent)			(713.40%)

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SEGMENT INFORMATION (Tables)

9 Months Ended

Oct. 31, 2014

Segment Reporting [Abstract]

Operating Results by Segment

Operating results by segment for the three and nine months ended October 31, 2014 and 2013 were as follows: 

	Three Months Ended October 31,						Nine Months Ended October 31,
(in thousands)	2014			2013			2014			2013
Revenue:
Enterprise Intelligence:
Segment revenue	$	171,270		$	126,220		$	506,382		$	365,385
Revenue adjustments	(5,744		)	(323		)	(25,263		)	(692		)
	165,526			125,897			481,119			364,693
Communications Intelligence:
Segment revenue	93,241			71,249			256,688			199,163
Revenue adjustments	(201		)	(119		)	(523		)	(530		)
	93,040			71,130			256,165			198,633
Video Intelligence:
Segment revenue	24,008			27,287			79,499			88,388
Revenue adjustments	—			—			—			(167		)
	24,008			27,287			79,499			88,221
Total revenue	$	282,574		$	224,314		$	816,783		$	651,547
Segment contribution:
Enterprise Intelligence	$	67,750		$	56,772		$	195,320		$	155,169
Communications Intelligence	32,495			24,457			79,966			62,223
Video Intelligence	4,500			5,546			18,108			20,482
Total segment contribution	104,745			86,775			293,394			237,874
Unallocated expenses, net:
Amortization of acquired intangible assets	19,463			8,085			57,142			26,113
Stock-based compensation	12,626			9,729			38,553			25,154
Other unallocated expenses	48,298			31,130			160,875			103,800
Total unallocated expenses, net	80,387			48,944			256,570			155,067
Operating income	24,358			37,831			36,824			82,807
Other expense, net	(8,119		)	(7,820		)	(38,700		)	(36,316		)
Income (loss) before provision for (benefit from) income taxes	$	16,239		$	30,011		$	(1,876	)	$	46,491

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INTANGIBLE ASSETS AND GOODWILL INTANGIBLE ASSETS AND GOODWILL - AMORTIZATION EXPENSE AND IMPAIRMENTS (Details) (USD $)	3 Months Ended		9 Months Ended
	Oct. 31, 2014	Oct. 31, 2013	Oct. 31, 2014	Oct. 31, 2013
Finite-Lived Intangible Assets [Line Items]
Total amortization expense for acquisition-related intangible assets	$ 19,500,000	$ 8,100,000	$ 57,100,000	$ 26,100,000
Impairments of goodwill			$ 0	$ 0

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SUPPLEMENTAL CONDENSED CONSOLIDATED FINANCIAL STATEMENT INFORMATION - INVENTORIES (Details) (USD $) In Thousands, unless otherwise specified	Oct. 31, 2014	Jan. 31, 2014
Inventories
Raw materials	$ 7,966	$ 3,190
Work-in-process	11,865	5,645
Finished goods	1,671	1,858
Total inventories	$ 21,502	$ 10,693

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LONG-TERM DEBT LONG-TERM DEBT - CREDIT AGREEMENT INTEREST RATE DETAILS - 2013 AMENDMENTS (Details) (2013 Amended Credit Agreement)	9 Months Ended		9 Months Ended
	Oct. 31, 2014 Eurodollar loans	Jan. 31, 2014 March 2013 Term Loans	Oct. 31, 2014 Adjusted LIBO Rate Eurodollar loans	Oct. 31, 2014 Adjusted LIBO Rate Base Rate loans	Oct. 31, 2014 Base Rate Base Rate loans	Oct. 31, 2014 Federal Funds Effective Rate Base Rate loans	Oct. 31, 2014 Corporate Credit Ratings of BB- and Ba3 or Better Base Rate loans	Oct. 31, 2014 Corporate Credit Ratings of BB- and Ba3 or Better Adjusted LIBO Rate Eurodollar loans
Debt Instrument
Interest period (in months)	3 months			1 month
Variable rate basis			Adjusted LIBO Rate		Base Rate	Federal Funds Effective Rate
Interest rate margin (as a percent)			3.00%	1.00%	2.00%	0.50%	1.75%	2.75%
Rate used to calculate reference rate (as a percent)			1.00%
Interest rate at end of period (as a percent)		4.00%

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BUSINESS COMBINATIONS BUSINESS COMBINATIONS - NINE MONTHS ENDED OCTOBER 31, 2014 - INTANGIBLE ASSET LIVES (Details)	9 Months Ended
	Oct. 31, 2014
Acquired Finite-Lived Intangible Assets [Line Items]
Acquired Finite-lived Intangible Assets, Weighted Average Useful Life	7 years 5 months
Enterprise Intelligence | KANA Software Inc.
Acquired Finite-Lived Intangible Assets [Line Items]
Acquired Finite-lived Intangible Assets, Weighted Average Useful Life	8 years 1 month
Enterprise Intelligence | KANA Software Inc. | Customer Relationships | Minimum
Acquired Finite-Lived Intangible Assets [Line Items]
Finite-Lived Intangible Asset, Useful Life	5 years
Enterprise Intelligence | KANA Software Inc. | Customer Relationships | Maximum
Acquired Finite-Lived Intangible Assets [Line Items]
Finite-Lived Intangible Asset, Useful Life	10 years
Enterprise Intelligence | KANA Software Inc. | Developed Technology | Minimum
Acquired Finite-Lived Intangible Assets [Line Items]
Finite-Lived Intangible Asset, Useful Life	3 years
Enterprise Intelligence | KANA Software Inc. | Developed Technology | Maximum
Acquired Finite-Lived Intangible Assets [Line Items]
Finite-Lived Intangible Asset, Useful Life	5 years
Enterprise Intelligence | KANA Software Inc. | Trademarks and Trade Names
Acquired Finite-Lived Intangible Assets [Line Items]
Finite-Lived Intangible Asset, Useful Life	5 years
Communications Intelligence | UTX Acquisition
Acquired Finite-Lived Intangible Assets [Line Items]
Acquired Finite-lived Intangible Assets, Weighted Average Useful Life	4 years
Communications Intelligence | UTX Acquisition | Customer Relationships
Acquired Finite-Lived Intangible Assets [Line Items]
Finite-Lived Intangible Asset, Useful Life	3 years
Communications Intelligence | UTX Acquisition | Developed Technology
Acquired Finite-Lived Intangible Assets [Line Items]
Finite-Lived Intangible Asset, Useful Life	4 years
Communications Intelligence | UTX Acquisition | Other Intangible Assets
Acquired Finite-Lived Intangible Assets [Line Items]
Finite-Lived Intangible Asset, Useful Life	4 years

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NET INCOME PER COMMON SHARE ATTRIBUTABLE TO VERINT SYSTEMS INC.

9 Months Ended

Oct. 31, 2014

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 nine months endedOctober 31, 2014 and 2013:

	Three Months Ended October 31,				Nine Months Ended October 31,
(in thousands, except per share amounts)	2014		2013		2014		2013
Net income	$	11,473	$	24,054	$	29,912	$	34,622
Net income attributable to noncontrolling interest	803		1,567		3,564		3,752
Net income attributable to Verint Systems Inc.	10,670		22,487		26,348		30,870
Dividends on preferred stock	—		—		—		(174		)
Net income attributable to Verint Systems Inc. for basic net income per common share	10,670		22,487		26,348		30,696
Dilutive effect of dividends on preferred stock	—		—		—		—
Net income attributable to Verint Systems Inc. for diluted net income per common share	$	10,670	$	22,487	$	26,348	$	30,696
Weighted-average shares outstanding:
Basic	60,644		53,374		57,222		52,781
Dilutive effect of employee equity award plans	848		572		1,110		780
Dilutive effect of 1.50% convertible senior notes	—		—		—		—
Dilutive effect of warrants	—		—		—		—
Dilutive effect of preferred stock	—		—		—		—
Diluted	61,492		53,946		58,332		53,561
Net income per common share attributable to Verint Systems Inc.:
Basic	$	0.18	$	0.42	$	0.46	$	0.58
Diluted	$	0.17	$	0.42	$	0.45	$	0.57

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 October 31,		Nine Months Ended October 31,
(in thousands)	2014	2013	2014	2013
Weighted average potential common shares excluded from calculation:
Stock options and restricted stock-based awards	464	343	403	263
1.50% convertible senior notes	6,205	—	3,091	—
Warrants	6,205	—	3,091	—
Series A Convertible Preferred Stock	—	—	—	164

The 1.50% convertible senior 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 1.50% convertible senior notes, exceeds the conversion price of $64.46 per share. Likewise, diluted net income per share will not include any effect from the warrants 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. Further details regarding the 1.50% convertible senior notes and the warrants appear in Note 6, "Long-Term Debt".

Our Series A Convertible Preferred Stock was canceled in conjunction with the CTI Merger on February 4, 2013, as further discussed in Note 9, "Convertible Preferred Stock" and Note 14, "Merger with CTI". The weighted-average common shares underlying the assumed conversion of the Series A Convertible Preferred Stock for the nine months ended October 31, 2013 in the table above reflect the Series A Convertible Preferred Stock as outstanding for only four days during that period.

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LONG-TERM DEBT LONG-TERM DEBT - CREDIT AGREEMENT INTEREST RATE DETAILS - 2014 AMENDMENTS (Details)			9 Months Ended			9 Months Ended
	Oct. 31, 2014 2013 Amended Credit Agreement - 2014 Amendments February 2014 Term Loans	Oct. 31, 2014 2013 Amended Credit Agreement - 2014 Amendments March 2014 Term Loans	Oct. 31, 2014 2013 Amended Credit Agreement - 2014 Amendments Eurodollar loans	Mar. 07, 2014 2013 Amended Credit Agreement - 2014 Amendments 2013 Revolving Line of Credit	Feb. 03, 2014 2013 Amended Credit Agreement - 2014 Amendments 2013 Revolving Line of Credit	Oct. 31, 2014 2013 Amended Credit Agreement Eurodollar loans	Oct. 31, 2014 Adjusted LIBO Rate 2013 Amended Credit Agreement - 2014 Amendments Eurodollar loans	Oct. 31, 2014 Adjusted LIBO Rate 2013 Amended Credit Agreement - 2014 Amendments Base Rate loans	Oct. 31, 2014 Adjusted LIBO Rate 2013 Amended Credit Agreement Eurodollar loans	Oct. 31, 2014 Adjusted LIBO Rate 2013 Amended Credit Agreement Base Rate loans	Oct. 31, 2014 Base Rate 2013 Amended Credit Agreement - 2014 Amendments Base Rate loans	Oct. 31, 2014 Base Rate 2013 Amended Credit Agreement Base Rate loans	Oct. 31, 2014 Federal Funds Effective Rate 2013 Amended Credit Agreement - 2014 Amendments Base Rate loans	Oct. 31, 2014 Federal Funds Effective Rate 2013 Amended Credit Agreement Base Rate loans
Debt Instrument
Interest period (in months)			3 months			3 months		1 month		1 month
Variable rate basis							Adjusted LIBO Rate		Adjusted LIBO Rate		Base Rate	Base Rate	Federal Funds Effective Rate	Federal Funds Effective Rate
Interest rate margin (as a percent)							2.75%	1.00%	3.00%	1.00%	1.75%	2.00%	0.50%	0.50%
Rate used to calculate reference rate (as a percent)							0.75%		1.00%
Interest Rate		3.50%		3.50%	4.00%
Effective Interest Rate	4.03%	3.58%

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CASH, CASH EQUIVALENTS AND SHORT-TERM INVESTMENTS CASH, CASH EQUIVALENTS AND SHORT-TERM INVESTMENTS - OTHER DATA (Details) (USD $)	9 Months Ended
	Oct. 31, 2014	Oct. 31, 2013
Cash, Cash Equivalents, and Short-term Investments [Abstract]
Realized gains (losses) on sales of available-for-sale securities	$ 0	$ 0
Proceeds from sale and maturity of available-for-sale securities	$ 11,400,000	$ 70,000,000

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INTANGIBLE ASSETS AND GOODWILL (Tables)

9 Months Ended

Oct. 31, 2014

Goodwill and Intangible Assets Disclosure [Abstract]

Schedule of acquisition-related intangible assets

Acquisition-related intangible assets consisted of the following as of October 31, 2014 and January 31, 2014:

	October 31, 2014
(in thousands)	Cost		Accumulated Amortization			Net
Intangible assets with finite lives:
Customer relationships	$	388,008	$	(169,745	)	$	218,263
Acquired technology	200,078		(98,097		)	101,981
Trade names	19,801		(9,007		)	10,794
Non-competition agreements	3,625		(2,149		)	1,476
Distribution network	4,440		(2,416		)	2,024
Backlog	386		(327		)	59
Total intangible assets with finite lives	616,338		(281,741		)	334,597
In-process research and development, with indefinite lives	1,700		—			1,700
Total	$	618,038	$	(281,741	)	$	336,297

	January 31, 2014
(in thousands)	Cost		Accumulated Amortization			Net
Intangible assets with finite lives:
Customer relationships	$	240,208	$	(141,714	)	$	98,494
Acquired technology	106,361		(76,922		)	29,439
Trade names	13,378		(11,378		)	2,000
Non-competition agreements	5,514		(4,970		)	544
Distribution network	2,440		(1,840		)	600
Backlog	386		(316		)	70
Total intangible assets with finite lives	368,287		(237,140		)	131,147
In-process research and development, with indefinite lives	1,700		—			1,700
Total	$	369,987	$	(237,140	)	$	132,847

Schedule of net acquisition-related intangible assets by reportable segment

The following table presents net acquisition-related intangible assets by reportable segment as of October 31, 2014 and January 31, 2014: 

	October 31,		January 31,
(in thousands)	2014		2014
Enterprise Intelligence	$	285,037	$	115,928
Communications Intelligence	50,050		14,856
Video Intelligence	1,210		2,063
Total	$	336,297	$	132,847

Schedule of estimated future amortization expense on finite-lived acquisition-related intangible assets

Estimated future amortization expense on finite-lived acquisition-related intangible assets as of October 31, 2014 was as follows:

(in thousands)
Years Ending January 31,	Amount
2015 (remainder of year)	$	20,921
2016	77,033
2017	73,604
2018	54,078
2019	25,107
2020 and thereafter	83,854
Total	$	334,597

Schedule of goodwill activity

Goodwill activity for the nine months ended October 31, 2014, in total and by reportable segment, was as follows: 

				Reportable Segment
(in thousands)	Total			Enterprise Intelligence			Communications Intelligence			Video Intelligence
Year Ended January 31, 2014:
Goodwill, gross, at January 31, 2014	$	920,254		$	795,722		$	47,838		$	76,694
Accumulated impairment losses through January 31, 2014	(66,865		)	(30,791		)	—			(36,074		)
Goodwill, net, at January 31, 2014	853,389			764,931			47,838			40,620
Business combinations	378,576			330,065			48,511			—
Foreign currency translation and other	(10,961		)	(9,792		)	(37		)	(1,132		)
Goodwill, net, at October 31, 2014	$	1,221,004		$	1,085,204		$	96,312		$	39,488
Balance at October 31, 2014:
Goodwill, gross, at October 31, 2014	$	1,287,869		$	1,115,995		$	96,312		$	75,562
Accumulated impairment losses through October 31, 2014	(66,865		)	(30,791		)	—			(36,074		)
Goodwill, net, at October 31, 2014	$	1,221,004		$	1,085,204		$	96,312		$	39,488

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BUSINESS COMBINATIONS (Tables)

9 Months Ended

Oct. 31, 2014

Business Combinations [Abstract]

Schedule of Business Acquisitions, by Acquisition

The following table sets forth the components and the allocations of the purchase prices for our acquisitions of KANA and UTX, including adjustments identified subsequent to the respective acquisition dates:

(in thousands)	KANA			UTX
Components of Purchase Prices:
Cash, including post-closing adjustments	$	541,685		$	82,901
Fair value of contingent consideration	—			1,347
Total purchase prices	$	541,685		$	84,248
Allocation of Purchase Prices:
Net tangible assets (liabilities):
Accounts receivable	$	18,473		$	—
Other current assets, including cash acquired	48,948			3,873
Other assets	12,124			924
Current and other liabilities	(16,509		)	(263		)
Deferred revenue - current and long-term	(7,932		)	(340		)
Deferred income taxes - current and long-term	(63,184		)	(4,882		)
Net tangible liabilities	(8,080		)	(688		)
Identifiable intangible assets:
Customer relationships	152,700			2,000
Developed technology	55,500			37,400
Trademarks and trade names	11,500			—
Other intangible assets	—			1,100
Total identifiable intangible assets	219,700			40,500
Goodwill	330,065			44,436
Total purchase price allocations	$	541,685		$	84,248

Business Acquisition, Pro Forma Information

The unaudited pro forma results do not include any operating efficiencies or potential cost savings which may result from these business combinations. Accordingly, such unaudited pro forma amounts are not necessarily indicative of the results that actually would have occurred had the acquisitions been completed on February 1, 2013, nor are they indicative of future operating results.

	Three Months Ended October 31,				Nine Months Ended October 31,
(in thousands, except per share amounts)	2014		2013		2014		2013
Revenue	$	288,279	$	256,879	$	842,784	$	737,706
Net income	$	17,650	$	15,826	$	15,419	$	37,146
Net income attributable to Verint Systems Inc.	$	16,847	$	14,259	$	11,855	$	33,394
Net income per common share attributable to Verint Systems Inc.:
Basic	$	0.28	$	0.27	$	0.21	$	0.63
Diluted	$	0.27	$	0.26	$	0.20	$	0.62

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LONG-TERM DEBT LONG-TERM DEBT - 1.50% CONVERTIBLE SENIOR NOTES (Details) (USD $)	0 Months Ended	9 Months Ended
	Jun. 18, 2014	Oct. 31, 2014	Jun. 18, 2014	Jan. 31, 2014
Debt Instrument
1.50% Convertible Notes - Conversion Price (in dollars per share)		$ 64.46
Common Stock, Number of Shares and Other Disclosures
Common stock issued in public offering (in shares)	5,750,000
Common stock issuance costs		$ 1,900,000
1.50% Convertible Senior Notes
Debt Instrument
Principal Amount - 1.50% Convertible Senior Notes		400,000,000	400,000,000	0
Coupon Interest Rate			1.50%
Proceeds from issuance of convertible notes, net of issuance costs	391,900,000
1.50% Convertible Notes - Base Principal Amount For Conversion Rate	1,000
1.50% Convertible Notes - Conversion Ratio	15.5129
1.50% Convertible Notes - Conversion Price (in dollars per share)			$ 64.46
1.50% Convertible Notes - Number of Common Shares	6,205,000
1.50% Convertible Notes - Carrying Value		323,465,000	319,900,000
Assumed Noncovertible Debt Interest Rate			5.00%
1.50% Convertible Notes - Carrying Value of Equity Component		78,200,000	80,100,000
Debt Issuance Costs		$ 7,600,000
Effective Interest Rate		5.29%
Conversion Scenario One | 1.50% Convertible Senior Notes
Debt Instrument
1.50% Convertible Notes - Threshold Trading Days	20
1.50% Convertible Notes - Window of Consecutive Trading Days	30 days
1.50% Convertible Notes - Threshold Percentage for Conversion Trigger	130.00%
Conversion Scenario Two | 1.50% Convertible Senior Notes
Debt Instrument
1.50% Convertible Notes - Window of Consecutive Trading Days	5 days
1.50% Convertible Notes - Threshold Percentage for Conversion Trigger	98.00%

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BUSINESS COMBINATIONS BUSINESS COMBINATIONS - NINE MONTHS ENDED OCTOBER 31, 2014 - KANA SOFTWARE, INC. (Details) (USD $)	9 Months Ended		3 Months Ended		9 Months Ended		1 Months Ended
	Oct. 31, 2014	Oct. 31, 2013	Oct. 31, 2014 Enterprise Intelligence KANA Software Inc.	Apr. 30, 2014 Enterprise Intelligence KANA Software Inc.	Oct. 31, 2014 Enterprise Intelligence KANA Software Inc.	Feb. 03, 2014 Enterprise Intelligence KANA Software Inc.	Feb. 28, 2014 February 2014 Term Loans 2013 Amended Credit Agreement - 2014 Amendments	Feb. 28, 2014 2013 Revolving Line of Credit 2013 Amended Credit Agreement - 2014 Amendments
Business Acquisition
Payment Made At Closing To Acquire Businesses						$ 542,400,000
Cash Acquired from Acquisition	0	10,370,000		25,100,000
Post-closing purchase price adjustment				700,000
Payments to Acquire Businesses, Net of Cash Acquired	602,943,000	10,457,000		516,600,000
Proceeds from Issuance of Debt							300,000,000
Proceeds from Lines of Credit								125,000,000
Deferred Revenue - Current and Long-Term						7,932,000
Intangible Asset - Undelivered Performance Obligations						18,600,000
Transaction and Related Costs			$ 1,800,000		$ 6,400,000

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LONG-TERM DEBT (Tables)

9 Months Ended

Oct. 31, 2014

Long-term Debt, Unclassified [Abstract]

Summary of long-term debt

The following table summarizes our long-term debt at October 31, 2014 and January 31, 2014: 

	October 31,			January 31,
(in thousands)	2014			2014
1.50% Convertible Senior Notes:
Principal amount	$	400,000		$	—
Unamortized debt discount	(76,535		)	—
1.50% Convertible Senior Notes, net	323,465			—
February 2014 Term Loans:
Gross amount	130,729			—
Unamortized debt discount	(289		)	—
February 2014 Term Loans, net	130,440			—
March 2014 Term Loans	280,413			—
March 2013 Term Loans:
Gross amount	—			645,125
Unamortized debt discount	—			(2,827		)
March 2013 Term Loans, net	—			642,298
Other debt	34			87
Total debt	734,352			642,385
Less: current maturities	36			6,555
Long-term debt	$	734,316		$	635,830

Summary of future scheduled principal payments on term loans

(in thousands)	February 2014		March 2014
Years Ending January 31,	Term Loans		Term Loans
2015 (remainder of year)	$	—	$	—
2016	—		—
2017	669		1,434
2018	1,337		2,869
2019	1,337		2,869
2020	127,386		273,241
Total	$	130,729	$	280,413

Schedule of components of interest expense

The following table presents the components of interest expense incurred on the Notes and on borrowings under our Credit Agreement for the three and nine months ended October 31, 2014 and 2013:

	Three Months Ended October 31,				Nine Months Ended October 31,
(in thousands)	2014		2013		2014		2013
1.50% Convertible Senior Notes:
Interest expense at 1.50% coupon rate	$	1,500	$	—	$	2,217	$	—
Amortization of debt discount	2,417		—		3,565		—
Amortization of deferred debt issuance costs	335		—		442		—
Total - 1.50% Convertible Senior Notes	$	4,252	$	—	$	6,224	$	—
Borrowings under Credit Agreement:
Interest expense at contractual rates	$	3,677	$	6,628	$	19,559	$	19,659
Amortization of debt discounts	14		115		102		341
Amortization of deferred debt issuance costs	538		529		1,895		1,627
Total - Borrowings under Credit Agreement	$	4,229	$	7,272	$	21,556	$	21,627

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SUPPLEMENTAL CONDENSED CONSOLIDATED FINANCIAL STATEMENT INFORMATION (Tables)

9 Months Ended

Oct. 31, 2014

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Schedule of inventories

Inventories consisted of the following as of October 31, 2014 and January 31, 2014: 

	October 31,		January 31,
(in thousands)	2014		2014
Raw materials	$	7,966	$	3,190
Work-in-process	11,865		5,645
Finished goods	1,671		1,858
Total inventories	$	21,502	$	10,693

Schedule of Other Income (Expense), Net

Other income (expense), net consisted of the following for the three and nine months ended October 31, 2014 and 2013: 

	Three Months Ended October 31,						Nine Months Ended October 31,
(in thousands)	2014			2013			2014			2013
Foreign currency (losses) gains, net	$	(1,949	)	$	702		$	(1,035	)	$	(2,504	)
Gains (losses) on derivative financial instruments, net	1,562			(721		)	1,666			(45		)
Other, net	554			(627		)	635			(2,464		)
Total other income (expense), net	$	167		$	(646	)	$	1,266		$	(5,013	)

Schedule of Supplemental Information Regarding Condensed Consolidated Cash Flows

The following table provides supplemental information regarding our condensed consolidated cash flows for the nine months ended October 31, 2014 and 2013: 

	Nine Months Ended October 31,
(in thousands)	2014		2013
Cash paid for interest	$	22,735	$	17,724
Cash payments (refunds) of income taxes, net	$	10,275	$	(6,463	)
Non-cash investing and financing transactions:
Net non-cash assets acquired in CTI Merger	$	—	$	3,727
Accrued but unpaid purchases of property and equipment	$	3,625	$	1,217
Inventory transfers to property and equipment	$	314	$	658
Liabilities for contingent consideration in business combinations	$	4,947	$	4,557
Stock options exercised, proceeds received subsequent to period end	$	140	$	—
Leasehold improvements funded by lease incentive	$	2,242	$	—

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BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES

9 Months Ended

Oct. 31, 2014

Accounting Policies [Abstract]

Basis of Presentation and Significant Accounting Policies

BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES

Description of Business

Unless the context otherwise requires, the terms "Verint", "we", "us", and "our" in these notes to condensed consolidated financial statements refer to Verint Systems Inc. and its consolidated subsidiaries.

Verint is a global leader in Actionable Intelligence solutions. Actionable Intelligence is a necessity in a dynamic world of massive information growth because it empowers organizations with crucial insights and enables decision makers to anticipate, respond, and take action. With Verint solutions and value-added services, organizations of all sizes and across many industries can make more timely and effective decisions. Today, more than 10,000 organizations in over 180 countries, including over 80 percent of the Fortune 100, use Verint solutions to improve enterprise performance and make the world a safer place.

Our Actionable Intelligence solutions help organizations address three important challenges: Customer Engagement Optimization; Security Intelligence; and Fraud, Risk, and Compliance. We help our customers capture large amounts of information from numerous data types and sources, use analytics to glean insights from the information, and leverage the resulting Actionable Intelligence to help achieve their customer engagement, enhanced security, and risk mitigation goals.

Headquartered in Melville, New York, we support our customers around the globe directly and with an extensive network of selling and support partners.

We conduct our business through three operating segments—Enterprise Intelligence, Communications and Cyber Intelligence ("Communications Intelligence"), and Video and Situation Intelligence ("Video Intelligence"). Organizing our business through three operating segments allows us to align our resources and domain expertise to effectively address the Actionable Intelligence market. We address the Customer Engagement Optimization market opportunity through solutions from our Enterprise Intelligence segment. We address the Security Intelligence market opportunity through solutions from our Communications Intelligence segment and Video Intelligence segment, and we address the Fraud, Risk, and Compliance market opportunity through solutions from all three operating segments.

Preparation of Condensed Consolidated Financial Statements

The condensed consolidated financial statements included herein have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and on the same basis as the audited consolidated financial statements included in our Annual Report on Form 10-K filed with the U.S. Securities and Exchange Commission (“SEC”) for the year ended January 31, 2014. The condensed consolidated statements of operations, comprehensive income (loss), stockholders’ equity, and cash flows for the periods ended October 31, 2014 and 2013, and the condensed consolidated balance sheet as of October 31, 2014, are not audited but reflect all adjustments that are of a normal recurring nature and that are considered necessary for a fair presentation of the results for the periods shown. The condensed consolidated balance sheet as of January 31, 2014 is derived from the audited consolidated financial statements presented in our Annual Report on Form 10-K for the year ended January 31, 2014. Certain information and disclosures normally included in annual consolidated financial statements have been omitted pursuant to the rules and regulations of the SEC. Because the condensed consolidated interim financial statements do not include all of the information and disclosures required by GAAP for a complete set of financial statements, they should be read in conjunction with the audited consolidated financial statements and notes included in our Annual Report on Form 10-K filed with the SEC for the year ended January 31, 2014. The results for interim periods are not necessarily indicative of a full year’s results.

Principles of Consolidation

The accompanying consolidated financial statements include the accounts of Verint Systems Inc., our wholly owned subsidiaries, and a joint venture in which we hold a 50% equity interest.  This joint venture functions as a systems integrator for Asian markets and is a variable interest entity in which we are the primary beneficiary.  Investments in companies in which we have less than a 20% ownership interest and do not exercise significant influence are accounted for at cost.  We include the results of operations of acquired companies from the date of acquisition.  All significant intercompany transactions and balances are eliminated.

Use of Estimates

The preparation of financial statements in conformity with GAAP requires our management to make estimates and assumptions, which may affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenue and expenses during the reporting period.  Actual results could differ from those estimates.

Significant Accounting Policies

Our significant accounting policies are described in Note 1 to the consolidated financial statements included in our Annual Report on Form 10-K for the year ended January 31, 2014. There were no significant changes to our significant accounting policies during the nine months ended October 31, 2014. Additional disclosures regarding our policy for calculating net income per common share attributable to Verint Systems Inc. appear below.

Net Income Per Common Share Attributable to Verint Systems Inc.

Shares used in the calculation of basic net income per common share are based on the weighted-average number of common shares outstanding during the accounting period. Shares used in the calculation of basic net income per common share include vested but unissued shares underlying awards of restricted stock units when all necessary conditions for earning those shares have been satisfied at the award's vesting date, but exclude unvested shares of restricted stock because they are contingent upon future service conditions.

Shares used in the calculation of diluted net income per common share are based on the weighted-average number of common shares outstanding, adjusted for potentially dilutive common shares outstanding during the period. Potentially dilutive common shares from warrants and stock-based compensation plans are determined using the treasury stock method.

We have the option to pay cash, issue shares of common stock, or any combination thereof for the aggregate amount due upon conversion of our 1.50% convertible senior notes due June 1, 2021 (the “Notes”), further details for which appear in Note 6, “Long-Term Debt”. We currently intend to settle the principal amount of the Notes in cash upon conversion and as a result, only the amounts payable in excess of the principal amounts of the Notes, if any, are assumed to be settled with shares of common stock for purposes of computing diluted net income per share.

Potentially dilutive common shares also included the assumed conversion of our Series A Convertible Perpetual Preferred Stock ("Preferred Stock"), if dilutive, for periods prior to cancellation of the Preferred Stock on February 4, 2013 in connection with the CTI Merger. The CTI Merger is further discussed in Note 14, "Merger with CTI".

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

Recent Accounting Pronouncements

New Accounting Pronouncements Implemented

In March 2013, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No. 2013-05, Foreign Currency Matters (Topic 830): Parent's Accounting for the Cumulative Translation Adjustment upon Derecognition of Certain Subsidiaries or Groups of Assets within a Foreign Entity or of an Investment in a Foreign Entity. This new standard is intended to resolve diversity in practice regarding the release into net income of a cumulative translation adjustment upon derecognition of a subsidiary or group of assets within a foreign entity. ASU No. 2013-05 was effective prospectively for us on February 1, 2014. The adoption of this standard did not impact our condensed consolidated financial statements.

New Accounting Pronouncements To Be Implemented

In April 2014, the FASB issued ASU No. 2014-08, Presentation of Financial Statements (Topic 205) and Property, Plant, and Equipment (Topic 360): Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity. ASU No. 2014-08 raises the threshold for a disposal to qualify as a discontinued operation and requires new disclosures of both discontinued operations and certain other disposals that do not meet the definition of a discontinued operation. It is effective for annual reporting periods beginning on or after December 15, 2014. Early adoption is permitted but only for disposals that have not been reported in previously issued financial statements. We are currently reviewing this standard, but we do not expect its adoption to materially impact our condensed consolidated financial statements, absent any disposals of components or groups of components that have a material effect on our financial results in future periods.

In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606). ASU No. 2014-09 supersedes the revenue recognition requirements in Topic 605, Revenue Recognition, and most industry-specific revenue recognition guidance throughout the Industry Topics of the Accounting Standards Codification. Additionally, this update supersedes some cost guidance included in Subtopic 605-35, Revenue Recognition-Construction-Type and Production-Type Contracts. The core principle of the guidance is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. It is effective for the first interim period within annual reporting periods beginning after December 15, 2016, and early adoption is not permitted. Entities may choose from two adoption methods, with certain practical expedients. We are currently reviewing this standard to assess the impact on our future condensed consolidated financial statements and evaluating the available adoption methods.

In June 2014, the FASB issued ASU No. 2014-10, Development Stage Entities (Topic 915): Elimination of Certain Financial Reporting Requirements, Including an Amendment to Variable Interest Entities Guidance in Topic 810, Consolidation. ASU No. 2014-10 removes the financial reporting distinction between development stage entities and other reporting entities from GAAP and it eliminates an exception provided in the consolidation guidance for development stage enterprises. It is effective for fiscal years, and interim periods within those years, beginning after December 15, 2015, although early adoption is permitted. We are currently reviewing this standard to assess the impact on our future condensed consolidated financial statements.

In June 2014, the FASB issued ASU No. 2014-12, Compensation—Stock Compensation (Topic 718): Accounting for Share-Based Payments When the Terms of an Award Provide That a Performance Target Could Be Achieved after the Requisite Service Period, which requires that a performance target that affects vesting, and that could be achieved after the requisite service period, be treated as a performance condition. As such, the performance target should not be reflected in estimating the grant date fair value of the award. ASU No. 2014-12 is effective for annual reporting periods beginning after December 15, 2015, including interim periods within that reporting period, although early adoption is permitted. We are currently reviewing this standard to assess the impact on our future condensed consolidated financial statements.

In August 2014, the FASB issued ASU No. 2014-15, Presentation of Financial Statements—Going Concern (Subtopic 205-40): Disclosure of Uncertainties about an Entity's Ability to Continue as a Going Concern. This ASU defines management’s responsibility to evaluate whether there is substantial doubt about an organization’s ability to continue as a going concern and to provide related footnote disclosures. The provisions of ASU No. 2014-15 are effective for annual periods ending after December 15, 2016 and for annual and interim periods thereafter, and early adoption is permitted. The adoption of ASU No. 2014-15 is not expected to have a material effect on our future condensed consolidated financial statements.

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STOCKHOLDERS' EQUITY (Tables)

9 Months Ended

Oct. 31, 2014

Stockholders' Equity Note [Abstract]

Summary of components of accumulated other comprehensive loss

The following table summarizes changes in the components of our accumulated other comprehensive income (loss) by component for the nine months ended October 31, 2014:

(in thousands)	Unrealized Gains (Losses) on Derivative Financial Instruments Designated as Hedges			Unrealized Gains on Available-for-Sale Investments		Foreign Currency Translation Adjustments			Total
Accumulated other comprehensive income (loss) at January 31, 2014	$	1,485		$	9	$	(41,219	)	$	(39,725	)
Other comprehensive (loss) income before reclassifications	(7,236		)	13		(13,290		)	(20,513		)
Amounts reclassified out of accumulated other comprehensive income (loss)	(971		)	—		—			(971		)
Net other comprehensive (loss) income, current period	(8,207		)	13		(13,290		)	(21,484		)
Accumulated other comprehensive (loss) income at October 31, 2014	$	(6,722	)	$	22	$	(54,509	)	$	(61,209	)

Schedule of amounts reclassified out of AOCI into the statement of operations by location

The amounts reclassified out of accumulated other comprehensive income (loss) into the condensed consolidated statements of operations, with presentation location, for the three and nine months ended October 31, 2014 and 2013 were as follows:

	Three Months Ended October 31,						Nine Months Ended October 31,						Affected Line Items in the Condensed Consolidated Statement of Operations
(in thousands)	2014			2013			2014			2013
Unrealized losses (gains) on derivative financial instruments:
Foreign currency forward contracts	$	80		$	(167	)	$	(65	)	$	(370	)	Cost of product revenue
	68			(178		)	(61		)	(383		)	Cost of service revenue
	499			(1,123		)	(578		)	(2,455		)	Research and development, net
	229			(516		)	(289		)	(1,140		)	Selling, general and administrative
	876			(1,984		)	(993		)	(4,348		)	Total before provision for income taxes
	(111		)	174			22			307			Provision for income taxes
	$	765		$	(1,810	)	$	(971	)	$	(4,041	)	Total, net of income taxes

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STOCK-BASED COMPENSATION STOCK-BASED COMPENSATION - STOCK OPTIONS (Details) (USD $) Share data in Thousands, except Per Share data, unless otherwise specified	9 Months Ended
	Oct. 31, 2014	Oct. 31, 2013
Stock option activity
Beginning balance (in shares)	516
Exercised (in shares)	(378)
Forfeitures and expirations (in shares)	(2)
Ending balance (in shares)	136
Stock options exercisable (in shares)	136
Weighted-Average Exercise Price
Beginning balance (in dollars per share)	$ 34.60
Exercised (in dollars per share)	$ 34.72
Forfeitures and expirations (in dollars per share)	$ 31.28
Ending balance (in dollars per share)	$ 34.30
Stock options exercisable (in dollars per share)	$ 34.30
Additional disclosures
Employee Service Share-based Compensation, Nonvested Awards, Compensation Not yet Recognized, Stock Options		$ 0
Stock options
Additional disclosures
Employee Service Share-based Compensation, Cash Received from Exercise of Stock Options	$ 13,100,000

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NET INCOME PER COMMON SHARE ATTRIBUTABLE TO VERINT SYSTEMS INC. NET INCOME PER COMMON SHARE ATTRIBUTABLE TO VERINT SYSTEMS INC. - ANTIDILUTIVE SECURITIES (Details) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended
	Oct. 31, 2014	Oct. 31, 2013	Oct. 31, 2014	Oct. 31, 2013
Stock options and restricted stock-based awards
Antidilutive Securities Excluded from Computation of Earnings Per Share
Antidilutive Securities Excluded from Computation of Earnings Per Share, (in shares)	464	343	403	263
1.50% convertible senior notes
Antidilutive Securities Excluded from Computation of Earnings Per Share
Antidilutive Securities Excluded from Computation of Earnings Per Share, (in shares)	6,205	0	3,091	0
Warrants
Antidilutive Securities Excluded from Computation of Earnings Per Share
Antidilutive Securities Excluded from Computation of Earnings Per Share, (in shares)	6,205	0	3,091	0
Series A Convertible Preferred Stock
Antidilutive Securities Excluded from Computation of Earnings Per Share
Antidilutive Securities Excluded from Computation of Earnings Per Share, (in shares)	0	0	0	164

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INTANGIBLE ASSETS AND GOODWILL INTANGIBLE ASSETS AND GOODWILL - FUTURE AMORTIZATION OF INTANGIBLE ASSETS (Details) (USD $) In Thousands, unless otherwise specified	Oct. 31, 2014	Jan. 31, 2014
Intangible Assets - Future Amortization [Abstract]
2015 (remainder of year)	$ 20,921
2016	77,033
2017	73,604
2018	54,078
2019	25,107
2020 and thereafter	83,854
Intangible assets with finite lives, Net	$ 334,597	$ 131,147

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STOCKHOLDERS' EQUITY STOCKHOLDERS' EQUITY - SCHEDULE OF ACCUMULATED OTHER COMPREHENSIVE LOSS (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended
	Oct. 31, 2014	Oct. 31, 2013	Oct. 31, 2014	Oct. 31, 2013
Activity in Accumulated Other Comprehensive Loss
Accumulated other comprehensive income (loss) - beginning balance			$ (39,725)
Other comprehensive (loss) income before reclassifications			(20,513)
Amounts reclassified out of accumulated other comprehensive income (loss)	765	(1,810)	(971)	(4,041)
Net other comprehensive (loss) income, current period			(21,484)
Accumulated other comprehensive (loss) income - ending balance	(61,209)		(61,209)
Unrealized gains (losses) on derivative financial instruments designated as hedges
Activity in Accumulated Other Comprehensive Loss
Accumulated other comprehensive income (loss) - beginning balance			1,485
Other comprehensive (loss) income before reclassifications			(7,236)
Amounts reclassified out of accumulated other comprehensive income (loss)			971
Net other comprehensive (loss) income, current period			(8,207)
Accumulated other comprehensive (loss) income - ending balance	(6,722)		(6,722)
Unrealized gains on available-for-sale investments
Activity in Accumulated Other Comprehensive Loss
Accumulated other comprehensive income (loss) - beginning balance			9
Other comprehensive (loss) income before reclassifications			13
Amounts reclassified out of accumulated other comprehensive income (loss)			0
Net other comprehensive (loss) income, current period			13
Accumulated other comprehensive (loss) income - ending balance	22		22
Foreign currency translation adjustments
Activity in Accumulated Other Comprehensive Loss
Accumulated other comprehensive income (loss) - beginning balance			(41,219)
Other comprehensive (loss) income before reclassifications			(13,290)
Amounts reclassified out of accumulated other comprehensive income (loss)			0
Net other comprehensive (loss) income, current period			(13,290)
Accumulated other comprehensive (loss) income - ending balance	$ (54,509)		$ (54,509)

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Condensed Consolidated Balance Sheets (USD $) In Thousands, unless otherwise specified	Oct. 31, 2014	Jan. 31, 2014
Current Assets:
Cash and cash equivalents	$ 192,335	$ 378,618
Restricted cash and bank time deposits	39,930	6,423
Short-term investments	40,136	32,049
Accounts receivable, net of allowance for doubtful accounts of $1.1 million and $1.2 million, respectively	252,003	194,312
Inventories	21,502	10,693
Deferred cost of revenue	11,149	10,818
Prepaid expenses and other current assets	70,111	61,478
Total current assets	627,166	694,391
Property and equipment, net	59,541	40,145
Goodwill	1,221,004	853,389
Intangible assets, net	336,297	132,847
Capitalized software development costs, net	9,031	8,483
Long-term deferred cost of revenue	12,730	9,843
Other assets	41,341	33,809
Total assets	2,307,110	1,772,907
Current Liabilities:
Accounts payable	69,271	65,656
Accrued expenses and other current liabilities	217,847	179,148
Current maturities of long-term debt	36	6,555
Deferred revenue	157,581	162,124
Total current liabilities	444,735	413,483
Long-term debt	734,316	635,830
Long-term deferred revenue	13,680	13,661
Other liabilities	93,917	76,815
Total liabilities	1,286,648	1,139,789
Stockholders' Equity:
Preferred Stock - $0.001 par value; authorized 2,207,000 shares at October 31, 2014 and January 31, 2014; none issued.	0	0
Common stock - $0.001 par value; authorized 120,000,000 shares. Issued 61,055,000 and 53,907,000 shares; outstanding 60,707,000 and 53,605,000 shares at October 31, 2014 and January 31, 2014, respectively.	61	54
Additional paid-in capital	1,305,883	924,663
Treasury stock, at cost - 348,000 and 302,000 shares at October 31, 2014 and January 31, 2014, respectively.	(10,251)	(8,013)
Accumulated deficit	(223,657)	(250,005)
Accumulated other comprehensive loss	(61,209)	(39,725)
Total Verint Systems Inc. stockholders' equity	1,010,827	626,974
Noncontrolling interest	9,635	6,144
Total stockholders' equity	1,020,462	633,118
Total liabilities and stockholders' equity	$ 2,307,110	$ 1,772,907

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BUSINESS COMBINATIONS BUSINESS COMBINATIONS - NINE MONTHS ENDED OCTOBER 31, 2014 - UTX TECHNOLOGIES LIMITED (Details) (Communications Intelligence, UTX Acquisition, USD $)	3 Months Ended		9 Months Ended
	Oct. 31, 2014	Apr. 30, 2014	Oct. 31, 2014	Mar. 31, 2014
Communications Intelligence | UTX Acquisition
Business Acquisition
Cash		$ 82,901,000
Fair Value of Contingent Consideration		1,347,000
Business Acquisition Contingent Consideration Fair Value Disclosure	1,500,000		1,500,000	1,500,000
Payments of contingent consideration	1,500,000
Changes in fair values, recorded in operating expenses			(200,000)
Transaction and Related Costs	(900,000)		2,100,000
Asset Impairment Charges		$ 2,600,000

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Condensed Consolidated Statements of Stockholders' Equity (USD $) In Thousands, except Share data, unless otherwise specified	Total	Total Verint Systems Inc. Stockholders' Equity	Common Stock	Additional Paid-in Capital	Treasury Stock	Accumulated Deficit	Accumulated Other Comprehensive Loss	Noncontrolling Interest
Balances at Jan. 31, 2013	$ 229,676	$ 224,802	$ 40	$ 580,762	$ (8,013)	$ (303,762)	$ (44,225)	$ 4,874
Balances (in shares) at Jan. 31, 2013			40,158,000
Increase (Decrease) in Stockholders' Equity
Net income	34,622	30,870				30,870		3,752
Other comprehensive income (loss)	1,854	1,974					1,974	(120)
Stock-based compensation - equity portion	22,304	22,304		22,304
Exercises of stock options	6,432	6,432	0	6,432
Exercises of stock options (in shares)			246,000
Common stock issued for stock awards and stock bonuses	2,851	2,851	1	2,850
Common stock issued for stock awards and stock bonuses (in shares)			776,000
Purchases of treasury stock	0
Purchases of treasury stock (in shares)	0
Common stock issued for CTI Merger	299,639	299,639	13	299,626
Stock issued for CTI Merger (in shares)			12,274,000
Tax effects from stock award plans	(3)	(3)		(3)
Balances at Oct. 31, 2013	597,375	588,869	54	911,971	(8,013)	(272,892)	(42,251)	8,506
Balances (in shares) at Oct. 31, 2013			53,454,000
Balances at Jan. 31, 2014	633,118	626,974	54	924,663	(8,013)	(250,005)	(39,725)	6,144
Balances (in shares) at Jan. 31, 2014			53,605,000
Increase (Decrease) in Stockholders' Equity
Net income	29,912	26,348				26,348		3,564
Other comprehensive income (loss)	(21,557)	(21,484)					(21,484)	(73)
Common stock issued in public offering, net of issuance costs	264,933	264,933	6	264,927
Common stock issued in public offering (in shares)			5,750,000
Equity component of convertible notes, net of issuance costs	78,209	78,209		78,209
Purchase of convertible note hedges	(60,800)	(60,800)		(60,800)
Issuance of warrants	45,188	45,188		45,188
Stock-based compensation - equity portion	35,702	35,702		35,702
Exercises of stock options	13,135	13,135	0	13,135
Exercises of stock options (in shares)	378,000		378,000
Common stock issued for stock awards and stock bonuses	4,532	4,532	1	4,531
Common stock issued for stock awards and stock bonuses (in shares)			1,020,000
Purchases of treasury stock	(2,238)	(2,238)			(2,238)
Purchases of treasury stock (in shares)	(46,000)		(46,000)
Tax effects from stock award plans	328	328		328
Balances at Oct. 31, 2014	$ 1,020,462	$ 1,010,827	$ 61	$ 1,305,883	$ (10,251)	$ (223,657)	$ (61,209)	$ 9,635
Balances (in shares) at Oct. 31, 2014			60,707,000

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LONG-TERM DEBT LONG-TERM DEBT - CREDIT AGREEMENT (2013 AMENDMENTS) (Details) (USD $)	1 Months Ended	3 Months Ended					1 Months Ended
	Mar. 31, 2013 March 2013 Term Loans	Apr. 30, 2014 March 2013 Term Loans	Mar. 07, 2014 March 2013 Term Loans	Mar. 06, 2013 March 2013 Term Loans	Jun. 18, 2014 2013 Revolving Line of Credit	Mar. 06, 2013 2013 Revolving Line of Credit	Mar. 31, 2013 April 2011 Term Loans	Apr. 30, 2011 April 2011 Term Loans	Mar. 06, 2013 2013 Amended Credit Agreement
Debt Instrument
Line of Credit Facility, Maximum Borrowing Capacity					$ 300,000,000	$ 200,000,000			$ 850,000,000
Long-term Debt, Gross				650,000,000				600,000,000
Line of Credit Facility, Additional Borrowing Capacity									300,000,000
Term loan discount (as a percent)	0.50%
Unamortized debt discount			2,800,000	3,300,000
Proceeds from Issuance of Debt	646,700,000
Repayments of Debt		$ 643,500,000					$ 576,000,000

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STOCK-BASED COMPENSATION (Tables)

9 Months Ended

Oct. 31, 2014

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Schedule of recognized stock-based compensation expense on the consolidated statements of operations

We recognized stock-based compensation expense in the following line items on the condensed consolidated statements of operations for the three and nine months ended October 31, 2014 and 2013:

	Three Months Ended October 31,				Nine Months Ended October 31,
(in thousands)	2014		2013		2014		2013
Component of condensed consolidated statements of operations:
Cost of revenue - product	$	224	$	243	$	675	$	572
Cost of revenue - service and support	941		458		2,816		1,208
Research and development, net	1,271		890		3,881		2,432
Selling, general and administrative	10,190		8,138		31,181		20,942
Stock-based compensation expense	$	12,626	$	9,729	$	38,553	$	25,154

Summary of stock-based compensation expense by type of award

The following table summarizes stock-based compensation expense by type of award for the three and nine months ended October 31, 2014 and 2013:

	Three Months Ended October 31,				Nine Months Ended October 31,
(in thousands)	2014		2013		2014		2013
Component of stock-based compensation expense:
Restricted stock units and restricted stock awards	$	11,942	$	8,335	$	35,373	$	21,727
Stock options	—		45		15		152
Phantom stock units	40		23		120		87
Stock bonus program	644		1,326		3,045		3,188
Stock-based compensation expense	$	12,626	$	9,729	$	38,553	$	25,154

Schedule of total stock-based compensation expense by classification

Total stock-based compensation expense by classification was as follows for the three and nine months ended October 31, 2014 and 2013: 

	Three Months Ended October 31,				Nine Months Ended October 31,
(in thousands)	2014		2013		2014			2013
Equity-classified awards	$	11,942	$	8,318	$	35,702		$	22,304
Stock bonus program and other reclassifications	—		—		(654		)	(298		)
Total equity-settled awards	11,942		8,318		35,048			22,006
Other liability-classified awards	684		1,411		3,505			3,148
Total stock-based compensation expense	$	12,626	$	9,729	$	38,553		$	25,154

Schedule of stock option activity under the Plans

The following table summarizes stock option activity and related information for the nine months ended October 31, 2014:

(in thousands, except per share data)	Stock Options		Weighted-Average Exercise Price
Options outstanding, January 31, 2014	516		$	34.60
Options exercised	(378	)	$	34.72
Options forfeited or expired	(2	)	$	31.28
Options outstanding, October 31, 2014	136		$	34.30
Options exercisable at October 31, 2014	136		$	34.30

Summary of RSU activity under the Plans

The following table summarizes restricted stock unit activity and related information for the nine months ended October 31, 2014:

(in thousands, except per share data)	RSU's		Weighted-Average Grant Date Fair Value
RSU's outstanding, January 31, 2014	2,250		$	33.77
RSU's granted	1,578		$	46.19
RSU's released	(1,020	)	$	34.28
RSU's forfeited	(170	)	$	38.87
RSU's outstanding, October 31, 2014	2,638		$	40.68

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LONG-TERM DEBT LONG-TERM DEBT - FUTURE AMORTIZATION (Details) (USD $)						5 Months Ended	9 Months Ended	5 Months Ended	9 Months Ended
	Mar. 06, 2013 March 2013 Term Loans	Oct. 31, 2014 February 2014 Term Loans	Jan. 31, 2014 February 2014 Term Loans	Oct. 31, 2014 March 2014 Term Loans	Oct. 31, 2014 2013 Amended Credit Agreement February 2014 Term Loans	Jun. 18, 2014 2013 Amended Credit Agreement - 2014 Amendments February 2014 Term Loans	Oct. 31, 2014 2013 Amended Credit Agreement - 2014 Amendments February 2014 Term Loans	Jun. 18, 2014 2013 Amended Credit Agreement - 2014 Amendments March 2014 Term Loans	Oct. 31, 2014 2013 Amended Credit Agreement - 2014 Amendments March 2014 Term Loans
Debt Instrument
Principal payments previously required per quarter						$ 800,000		$ 1,600,000
Term loan prepayment adjustment - number of consecutive scheduled principal payments prepayment is first applied to									8
Interest Rate Premium Applicable To A Repricing Transaction							1.00%
2015 (remainder of year)				0	0
2016				0	0
2017				1,434,000	669,000
2018				2,869,000	1,337,000
2019				2,869,000	1,337,000
2020				273,241,000	127,386,000
Total	$ 650,000,000	$ 130,729,000	$ 0	$ 280,413,000	$ 130,729,000

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RELATED PARTY TRANSACTIONS

9 Months Ended

Oct. 31, 2014

Related Party Transactions [Abstract]

RELATED PARTY TRANSACTIONS

RELATED PARTY TRANSACTIONS

Transactions with CTI

As discussed in Note 14, "Merger with CTI", on February 4, 2013 we completed the CTI Merger, which eliminated CTI's majority ownership and control of us. As of January 31, 2013, prior to the CTI Merger, CTI beneficially owned approximately 53.5%, and also held a majority of the voting power, of our common stock on an as-converted basis.

Other Related Party Transactions

Our joint venture incurs certain operating expenses, including office rent and other administrative costs, and realizes revenue, under arrangements with one of its noncontrolling shareholders. Transactions with this noncontrolling shareholder of the joint venture during the nine months ended October 31, 2014 and 2013 were not significant.

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COMMITMENTS AND CONTINGENCIES COMMITMENTS AND CONTINGENCIES (Tables)

9 Months Ended

Oct. 31, 2014

Commitments and Contingencies Disclosure [Abstract]

Schedule of Product Warranty Liability

The following table summarizes the activity in our warranty liability, which is included in accrued expenses and other liabilities in the condensed consolidated balance sheets, for the nine months ended October 31, 2014 and 2013:

	Nine Months Ended October 31,
(in thousands)	2014			2013
Warranty liability, beginning of period	$	706		$	1,045
Provision credited against expenses	(93		)	(253		)
Foreign currency translation and other	(5		)	(2		)
Warranty liability, end of period	$	608		$	790

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SEGMENT INFORMATION

9 Months Ended

Oct. 31, 2014

Segment Reporting [Abstract]

SEGMENT INFORMATION

SEGMENT INFORMATION

Operating segments are defined as components of an enterprise about which separate financial information is available that is evaluated regularly by the enterprise’s chief operating decision maker ("CODM"), or decision making group, in deciding how to allocate resources and in assessing performance. Our Chief Executive Officer is our CODM.

We conduct our business through three operating segments—Enterprise Intelligence, Communications Intelligence, and Video Intelligence. Organizing our business through three operating segments allows us to align our resources and domain expertise to effectively address the Actionable Intelligence market. We address the Customer Engagement Optimization market opportunity through solutions from our Enterprise Intelligence segment. We address the Security Intelligence market opportunity through solutions from our Communications Intelligence segment and Video Intelligence segment, and we address the Fraud, Risk, and Compliance market opportunity through solutions from all three operating segments.

We measure the performance of our operating segments based upon operating segment revenue and operating segment contribution. Operating segment contribution includes segment revenue and expenses incurred directly by the segment, including material costs, service costs, research and development and selling, marketing, and administrative expenses. We do not allocate certain expenses, which include the majority of general and administrative expenses, facilities and communication expenses, purchasing expenses, manufacturing support and logistic expenses, depreciation and amortization, amortization of capitalized software development costs, stock-based compensation, and special charges such as restructuring costs when calculating operating segment contribution. These expenses are included in the unallocated expenses section of the table presented below. Revenue from transactions between our operating segments is not material.

Revenue adjustments represent revenue of acquired companies which is included within segment revenue reviewed by the CODM, but not recognizable within GAAP revenue.  These adjustments primarily relate to the acquisition-date excess of the historical carrying value over the fair value of acquired companies’ future maintenance and service performance obligations. As the obligations are satisfied, we report our segment revenue using the historical carrying values of these obligations, which we believe better reflects our ongoing maintenance and service revenue streams, whereas GAAP revenue is reported using the obligations’ acquisition-date fair values.

With the exception of goodwill and acquired intangible assets, we do not identify or allocate our assets by operating segment.  Consequently, it is not practical to present assets by operating segment.  There were no material changes in the allocation of goodwill and acquired intangible assets by operating segment during the nine months ended October 31, 2014 and 2013.  The allocations of goodwill and acquired intangible assets by operating segment appear in Note 5, "Intangible Assets and Goodwill".

Operating results by segment for the three and nine months ended October 31, 2014 and 2013 were as follows: 

	Three Months Ended October 31,						Nine Months Ended October 31,
(in thousands)	2014			2013			2014			2013
Revenue:
Enterprise Intelligence:
Segment revenue	$	171,270		$	126,220		$	506,382		$	365,385
Revenue adjustments	(5,744		)	(323		)	(25,263		)	(692		)
	165,526			125,897			481,119			364,693
Communications Intelligence:
Segment revenue	93,241			71,249			256,688			199,163
Revenue adjustments	(201		)	(119		)	(523		)	(530		)
	93,040			71,130			256,165			198,633
Video Intelligence:
Segment revenue	24,008			27,287			79,499			88,388
Revenue adjustments	—			—			—			(167		)
	24,008			27,287			79,499			88,221
Total revenue	$	282,574		$	224,314		$	816,783		$	651,547
Segment contribution:
Enterprise Intelligence	$	67,750		$	56,772		$	195,320		$	155,169
Communications Intelligence	32,495			24,457			79,966			62,223
Video Intelligence	4,500			5,546			18,108			20,482
Total segment contribution	104,745			86,775			293,394			237,874
Unallocated expenses, net:
Amortization of acquired intangible assets	19,463			8,085			57,142			26,113
Stock-based compensation	12,626			9,729			38,553			25,154
Other unallocated expenses	48,298			31,130			160,875			103,800
Total unallocated expenses, net	80,387			48,944			256,570			155,067
Operating income	24,358			37,831			36,824			82,807
Other expense, net	(8,119		)	(7,820		)	(38,700		)	(36,316		)
Income (loss) before provision for (benefit from) income taxes	$	16,239		$	30,011		$	(1,876	)	$	46,491

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SUPPLEMENTAL CONDENSED CONSOLIDATED FINANCIAL STATEMENT INFORMATION SUPPLEMENTAL CONDENSED CONSOLIDATED FINANCIAL STATEMENT INFORMATION - OTHER (EXPENSE) INCOME (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended
	Oct. 31, 2014	Oct. 31, 2013	Oct. 31, 2014	Oct. 31, 2013
Other income (expense), net:
Foreign currency (losses) gains, net	$ (1,949)	$ 702	$ (1,035)	$ (2,504)
Gains (losses) on derivative financial instruments, net	1,562	(721)	1,666	(45)
Other, net	554	(627)	635	(2,464)
Total other income (expense), net	$ 167	$ (646)	$ 1,266	$ (5,013)

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Condensed Consolidated Statements of Cash Flows (USD $) In Thousands, unless otherwise specified	9 Months Ended
	Oct. 31, 2014	Oct. 31, 2013
Cash flows from operating activities:
Net income	$ 29,912	$ 34,622
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	74,298	40,230
Stock-based compensation - equity portion	35,048	22,006
Amortization of discount on convertible notes	3,565	0
Reduction of valuation allowance resulting from acquisition of KANA	(45,171)	0
Non-cash (gains) losses on derivative financial instruments, net	(1,666)	44
Losses on early retirements of debt	12,546	9,879
Other non-cash items, net	8,387	1,783
Changes in operating assets and liabilities, net of effects of business combinations:
Accounts receivable	(41,717)	(8,820)
Inventories	(7,801)	(861)
Deferred cost of revenue	(3,177)	(1,951)
Prepaid expenses and other assets	13,111	24,822
Accounts payable, accrued expenses, and other current liabilities	26,472	1,607
Deferred revenue	(10,903)	(7,918)
Other, net	(2,663)	(424)
Net cash provided by operating activities	90,241	115,019
Cash flows from investing activities:
Cash paid for business combinations, including adjustments, net of cash acquired	(602,943)	(10,457)
Purchases of property and equipment	(15,831)	(9,439)
Purchases of short-term investments	(21,175)	(195,509)
Sales and maturities of short-term investments	11,363	70,000
Cash paid for capitalized software development costs	(4,510)	(3,892)
Change in restricted cash and bank time deposits, including long-term portion	(37,023)	5,935
Other investing activities, net	(1,466)	205
Net cash used in investing activities	(671,585)	(143,157)
Cash flows from financing activities:
Proceeds from borrowings, net of original issuance discounts	1,526,750	646,750
Repayments of borrowings and other financing obligations	(1,361,777)	(584,309)
Proceeds from public issuance of common stock	274,563	0
Proceeds from issuance of warrants	45,188	0
Payments for convertible note hedges	(60,800)	0
Payments of equity issuance, debt issuance and other debt-related costs	(29,164)	(7,754)
Proceeds from exercises of stock options	13,081	6,432
Purchases of treasury stock	(2,238)	0
Cash received in CTI Merger	0	10,370
Payments of contingent consideration for business combinations (financing portion)	(8,684)	(16,087)
Net cash provided by financing activities	396,919	55,402
Effect of exchange rate changes on cash and cash equivalents	(1,858)	223
Net (decrease) increase in cash and cash equivalents	(186,283)	27,487
Cash and cash equivalents, beginning of period	378,618	209,973
Cash and cash equivalents, end of period	$ 192,335	$ 237,460

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Condensed Consolidated Balance Sheets (Parenthetical) (USD $) In Thousands, except Share data, unless otherwise specified	Oct. 31, 2014	Jan. 31, 2014
Statement of Financial Position [Abstract]
Allowance for Doubtful Accounts	$ 1,100	$ 1,200
Preferred Stock, par value (in dollars per share)	$ 0.001	$ 0.001
Preferred Stock, authorized (in shares)	2,207,000	2,207,000
Series A convertible preferred stock, issued (in shares)	0	0
Common stock, par value (in dollars per share)	$ 0.001	$ 0.001
Common stock, authorized (in shares)	120,000,000	120,000,000
Common stock, issued (in shares)	61,055,000	53,907,000
Common stock, outstanding (in shares)	60,707,000	53,605,000
Treasury stock (in shares)	348,000	302,000

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INCOME TAXES

9 Months Ended

Oct. 31, 2014

Income Tax Disclosure [Abstract]

INCOME TAXES

INCOME TAXES

Our interim provision for income taxes is measured using an estimated annual effective tax rate, adjusted for discrete items that occur within the periods presented.  The comparison of our effective tax rate between periods is significantly impacted by the level and mix of earnings and losses by tax jurisdiction, foreign income tax rate differentials, amount of permanent book to tax differences, the impact of unrecognized tax benefits, and the effects of valuation allowances on certain loss jurisdictions.

For the three months ended October 31, 2014, we recorded an income tax provision of $4.8 million on pre-tax income of $16.2 million, which represented an effective income tax rate of 29.3%. The effective income tax rate was significantly affected by the mix and levels of income and losses among taxing jurisdictions. Pre-tax income in our profitable jurisdictions, where we recorded tax provisions, was higher than our domestic losses where we maintain valuation allowances and did not record the related tax benefits.

For the three months ended October 31, 2013, we recorded a $6.0 million provision for income taxes on pre-tax income of $30.0 million, which represented an effective income tax rate of 19.8%. The income tax provision does not include income tax benefits on losses incurred by certain domestic operations where we maintain valuation allowances and is mainly the result of the activities of profitable jurisdictions. Our pre-tax income in profitable jurisdictions, where we record tax provisions, was higher than domestic losses where we maintain valuation allowances and do not record tax benefits.

For the nine months ended October 31, 2014, we recorded an income tax benefit of $31.8 million on a pre-tax loss of $1.9 million, which represented an effective income tax benefit rate of 1,694.5%. The income tax benefit was primarily attributable to the release of $45.2 million of Verint valuation allowances in the quarter ended April 30, 2014. We maintain valuation allowances on our net U.S. deferred income tax assets related to federal and certain state jurisdictions. In connection with the acquisition of KANA during the quarter ended April 30, 2014, we recorded deferred income tax liabilities primarily attributable to acquired intangible assets to the extent the amortization will not be deductible for income tax purposes. Under accounting guidelines, because the amortization of the intangible assets in future periods provides a source of taxable income, we expect to realize a portion of our existing deferred income tax assets. As such, we reduced the valuation allowance recorded on our deferred income tax assets to the extent of the deferred income tax liabilities recorded. Because the valuation allowance related to existing Verint deferred income tax assets, the impact of the release was reflected as a discrete income tax benefit and not as a component of the KANA acquisition accounting. The effective income tax rate was also affected by the mix and levels of income and losses among taxing jurisdictions. Pre-tax income in our profitable jurisdictions, where we recorded tax provisions, was slightly less than our domestic losses where we maintain valuation allowances and did not record the related tax benefits. Excluding the income tax benefit attributable to the valuation allowance release, the result for the nine months ended October 31, 2014 was an income tax provision of $13.4 million on a pre-tax loss $1.9 million, resulting in a negative effective income tax rate of 713.4%.

For the nine months ended October 31, 2013, we recorded an $11.9 million provision for income taxes on pre-tax income of $46.5 million, which represented an effective income tax rate of 25.5%. The income tax provision does not include income tax benefit on losses incurred by certain domestic operations where we maintain valuation allowances and is mainly the result of the activities of profitable jurisdictions. The effective income tax rate was also reduced because CTI received a favorable ruling from the Internal Revenue Service which resulted in adjustments to deferred taxes and an indemnified liability. Our pre-tax income in foreign jurisdictions, where we recorded tax provisions at rates lower than the U.S. federal statutory rate, was higher than domestic losses where we maintain valuation allowances and do not record tax benefits.

As required by the authoritative guidance on accounting for income taxes, we evaluate the realizability of deferred income tax assets on a jurisdictional basis at each reporting date.  Accounting for income taxes guidance requires that a valuation allowance be established when it is more-likely-than-not that all or a portion of the deferred income tax assets will not be realized.  In circumstances where there is sufficient negative evidence indicating that the deferred income tax assets are not more-likely-than-not realizable, we establish a valuation allowance.  We determined that there is sufficient negative evidence to maintain the valuation allowances against our federal and certain state and foreign deferred income tax assets as a result of historical losses in the most recent three-year period in the U.S. and in certain foreign jurisdictions.  We intend to maintain valuation allowances until sufficient positive evidence exists to support a reversal.

We had unrecognized tax benefits of $151.9 million and $145.4 million (excluding interest and penalties) as of October 31, 2014 and January 31, 2014, respectively.  The accrued liability for interest and penalties was $10.3 million and $8.7 million at October 31, 2014 and January 31, 2014, respectively.  Interest and penalties are recorded as a component of the provision for income taxes in our condensed consolidated statements of operations.  As of October 31, 2014 and January 31, 2014, the total amount of unrecognized tax benefits that, if recognized, would impact our effective tax rate were approximately $146.5 million and $139.7 million, respectively.  We regularly assess the adequacy of our provisions for income tax contingencies in accordance with the applicable authoritative guidance on accounting for income taxes.  As a result, we may adjust the reserves for unrecognized tax benefits for the impact of new facts and developments, such as changes to interpretations of relevant tax law, assessments from taxing authorities, settlements with taxing authorities, and lapses of statutes of limitation.  Further, we believe that it is reasonably possible that the total amount of unrecognized tax benefits at October 31, 2014 could decrease by approximately $2.9 million in the next twelve months as a result of settlement of certain tax audits or lapses of statutes of limitation.  Such decreases may involve the payment of additional taxes, the adjustment of deferred income taxes including the need for additional valuation allowances, and the recognition of tax benefits.  Our income tax returns are subject to ongoing tax examinations in several jurisdictions in which we operate.  We also believe that it is reasonably possible that new issues may be raised by tax authorities or developments in tax audits may occur which would require increases or decreases to the balance of reserves for unrecognized tax benefits; however, an estimate of such changes cannot reasonably be made.

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SEGMENT INFORMATION - SEGMENT OPERATING RESULTS (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended
	Oct. 31, 2014	Oct. 31, 2013	Oct. 31, 2014 segment	Oct. 31, 2013
Revenue and segment contribution:
Revenues	$ 282,574	$ 224,314	$ 816,783	$ 651,547
Segment Contribution	104,745	86,775	293,394	237,874
Reconciliation of segment contribution to operating income
Amortization of acquired intangible assets	19,500	8,100	57,100	26,100
Stock-based compensation	12,626	9,729	38,553	25,154
Total operating expenses	157,113	114,326	473,478	350,668
Operating income	24,358	37,831	36,824	82,807
Other Income (Expense) and Income Before Taxes
Other expense, net	(8,119)	(7,820)	(38,700)	(36,316)
Income (loss) before provision for (benefit from) income taxes	16,239	30,011	(1,876)	46,491
Number of operating segments			3
Enterprise Intelligence
Revenue and segment contribution:
Revenues	165,526	125,897	481,119	364,693
Segment Contribution	67,750	56,772	195,320	155,169
Enterprise Intelligence | Segment revenue
Revenue and segment contribution:
Revenues	171,270	126,220	506,382	365,385
Enterprise Intelligence | Segment Reconciling Items
Revenue and segment contribution:
Revenues	(5,744)	(323)	(25,263)	(692)
Communications Intelligence
Revenue and segment contribution:
Revenues	93,040	71,130	256,165	198,633
Segment Contribution	32,495	24,457	79,966	62,223
Communications Intelligence | Segment revenue
Revenue and segment contribution:
Revenues	93,241	71,249	256,688	199,163
Communications Intelligence | Segment Reconciling Items
Revenue and segment contribution:
Revenues	(201)	(119)	(523)	(530)
Video Intelligence
Revenue and segment contribution:
Revenues	24,008	27,287	79,499	88,221
Segment Contribution	4,500	5,546	18,108	20,482
Video Intelligence | Segment revenue
Revenue and segment contribution:
Revenues	24,008	27,287	79,499	88,388
Video Intelligence | Segment Reconciling Items
Revenue and segment contribution:
Revenues	0	0	0	(167)
Segment Reconciling Items
Reconciliation of segment contribution to operating income
Amortization of acquired intangible assets	19,463	8,085	57,142	26,113
Stock-based compensation	12,626	9,729	38,553	25,154
Other unallocated expenses	48,298	31,130	160,875	103,800
Total operating expenses	$ 80,387	$ 48,944	$ 256,570	$ 155,067

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COMMITMENTS AND CONTINGENCIES COMMITMENTS AND CONTINGENCIES - WARRANTY OBLIGATIONS (Details) (USD $) In Thousands, unless otherwise specified	9 Months Ended
	Oct. 31, 2014	Oct. 31, 2013
Product Warranties Disclosures [Abstract]
Warranty liability, beginning of period	$ 706	$ 1,045
Provision credited against expenses	(93)	(253)
Foreign currency translation and other	(5)	(2)
Warranty liability, end of period	$ 608	$ 790

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Document and Entity Information	9 Months Ended
	Oct. 31, 2014	Nov. 14, 2014
Document And Entity Information
Entity Registrant Name	VERINT SYSTEMS INC
Entity Central Index Key	0001166388
Current Fiscal Year End Date	--01-31
Entity Current Reporting Status	Yes
Entity Filer Category	Large Accelerated Filer
Document Type	10-Q
Document Period End Date	Oct. 31, 2014
Document Fiscal Year Focus	2015
Document Fiscal Period Focus	Q3
Amendment Flag	false
Entity Well-known Seasoned Issuer	Yes
Entity Voluntary Filers	No
Entity Common Stock, Shares Outstanding		60,714,350

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FAIR VALUE MEASUREMENTS

9 Months Ended

Oct. 31, 2014

Fair Value Disclosures [Abstract]

FAIR VALUE MEASUREMENTS

FAIR VALUE MEASUREMENTS

Fair value is defined as the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. When determining the fair value measurements for assets and liabilities required to be recorded at fair value, we consider the principal or most advantageous market in which we would transact and consider assumptions that market participants would use when pricing the asset or liability, such as inherent risk, transfer restrictions, and risk of nonperformance.

Accounting guidance establishes a fair value hierarchy that requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. An instrument’s categorization within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement. This fair value hierarchy consists of three levels of inputs that may be used to measure fair value:

•Level 1:  quoted prices in active markets for identical assets or liabilities;

• Level 2:  inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices in active markets for similar assets or liabilities, quoted prices for identical or similar assets or liabilities in markets that are not active, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities; or

• Level 3:  unobservable inputs that are supported by little or no market activity.

We review the fair value hierarchy classification of our applicable assets and liabilities at each reporting period. Changes in the observability of valuation inputs may result in transfers within the fair value measurement hierarchy. There were no transfers between levels of the fair value measurement hierarchy during the nine months ended October 31, 2014 and 2013.

Assets and Liabilities Measured at Fair Value on a Recurring Basis

Our assets and liabilities measured at fair value on a recurring basis consisted of the following as of October 31, 2014 and January 31, 2014: 

	October 31, 2014
	Fair Value Hierarchy Category
(in thousands)	Level 1		Level 2		Level 3
Assets:
Money market funds	$	194	$	—	$	—
Commercial paper (1)	—		2,999		—
Short-term investments, classified as available-for-sale	—		13,796		—
Foreign currency forward contracts	—		1,886		—
Total assets	$	194	$	18,681	$	—
Liabilities:
Foreign currency forward contracts	$	—	$	7,530	$	—
Contingent consideration - business combinations	—		—		12,779
Total liabilities	$	—	$	7,530	$	12,779

	January 31, 2014
	Fair Value Hierarchy Category
(in thousands)	Level 1		Level 2		Level 3
Assets:
Money market funds	$	14,023	$	—	$	—
Commercial paper (1)	—		49,991		—
Short-term investments, classified as available for sale	—		9,406		—
Foreign currency forward contracts	—		2,466		—
Total assets	$	14,023	$	61,863	$	—
Liabilities:
Foreign currency forward contracts	$	—	$	846	$	—
Contingent consideration - business combinations	—		—		17,307
Total liabilities	$	—	$	846	$	17,307

(1) Commercial paper investments with remaining maturities of three months or less at time of purchase, classified within

cash and cash equivalents.

The following table presents the changes in the estimated fair values of our liabilities for contingent consideration measured using significant unobservable inputs (Level 3) for the nine months endedOctober 31, 2014 and 2013: 

	Nine Months Ended October 31,
(in thousands)	2014			2013
Fair value measurement at beginning of period	$	17,307		$	25,041
Contingent consideration liabilities recorded for business combinations	4,947			4,557
Changes in fair values, recorded in operating expenses	618			(1,635		)
Payments of contingent consideration	(10,037		)	(17,094		)
Foreign exchange translation and other	(56		)	—
Fair value measurement at end of period	$	12,779		$	10,869

Our estimated liability for contingent consideration represents potential payments of additional consideration for business combinations, payable if certain defined performance goals are achieved. Changes in fair value of contingent consideration are recorded in the condensed consolidated statements of operations within selling, general and administrative expenses.

Fair Value Measurements

Money Market Funds - We value our money market funds using quoted active market prices for such funds.

Short-term Investments - Short-term investments represent investments in commercial paper and corporate bonds classified as available-for-sale. Investments in commercial paper with remaining maturities of three months or less at time of purchase are classified within cash and cash equivalents. The fair values of these investments are estimated using observable market prices for identical securities that are traded in less-active markets, if available. When observable market prices for identical securities are not available, we value these short-term investments using non-binding market price quotes from brokers which we review for reasonableness using observable market data; quoted market prices for similar instruments; or pricing models, such as a discounted cash flow model.

Foreign Currency Forward Contracts - The estimated fair value of foreign currency forward contracts is based on quotes received from the counterparties thereto. These quotes are reviewed for reasonableness by discounting the future estimated cash flows under the contracts, considering the terms and maturities of the contracts and market exchange rates using readily observable market prices for similar contracts.

Contingent Consideration - Business Combinations - The fair value of the contingent consideration related to business combinations is estimated using a probability-adjusted discounted cash flow model. These fair value measurements are based on significant inputs not observable in the market. The key internally developed assumptions used in these models are discount rates and the probabilities assigned to the milestones to be achieved. We remeasure the fair value of the contingent consideration at each reporting period, and any changes in fair value resulting from either the passage of time or events occurring after the acquisition date, such as changes in discount rates, or in the expectations of achieving the performance targets, are recorded within selling, general, and administrative expenses. Increases or decreases in discount rates would have inverse impacts on the related fair value measurements, while favorable or unfavorable changes in expectations of achieving performance targets would result in corresponding increases or decreases in the related fair value measurements. We utilized discount rates ranging from 2.0% to 40.0% in our calculations of the estimated fair values of our contingent consideration liabilities as of October 31, 2014. We utilized discount rates ranging from 1.1% to 27.0% in our calculations of the estimated fair values of our contingent consideration liabilities as of January 31, 2014.

Other Financial Instruments

The carrying amounts of accounts receivable, accounts payable, and accrued liabilities and other current liabilities approximate fair value due to their short maturities.

The estimated fair values of our term loans were approximately $408 million and $647 million at October 31, 2014 and January 31, 2014, respectively. The estimated fair values of our term loans are based upon indicative bid and ask prices as determined by the agent responsible for the syndication of our term loans. We consider these inputs to be within Level 3 of the fair value hierarchy because we cannot reasonably observe activity in the limited market in which participations in our term loans are traded. The indicative prices of our term loans provided to us as at each of October 31, 2014 and January 31, 2014 did not significantly differ from par value. The estimated fair value of our revolving credit borrowings, if any, is based upon indicative market values provided by one of our lenders. We had no revolving credit borrowings at October 31, 2014 and January 31, 2014.

The estimated fair value of our Notes was approximately $447 million at October 31, 2014. The estimated fair value of the Notes is determined based on quoted bid and ask prices in the over-the-counter market in which the Notes trade. We consider these inputs to be within Level 2 of the fair value hierarchy.

Assets and Liabilities Not Measured at Fair Value on a Recurring Basis

In addition to assets and liabilities that are measured at fair value on a recurring basis, we also measure certain assets and liabilities at fair value on a nonrecurring basis. Our non-financial assets, including goodwill, intangible assets and property, plant and equipment, are measured at fair value when there is an indication of impairment and the carrying amount exceeds the asset’s projected undiscounted cash flows. These assets are recorded at fair value only when an impairment charge is recognized.

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DERIVATIVE FINANCIAL INSTRUMENTS - ASSETS AND LIABILITIES (Details) (USD $)	9 Months Ended
	Oct. 31, 2014	Jan. 31, 2014
Derivative designated as hedging instruments
Fair Values of Derivative Financial Instruments
Assets, Fair Value	$ 0	$ 2,245,000
Liabilities, Fair Value	7,530,000	769,000
Derivative not designated as hedging instruments
Fair Values of Derivative Financial Instruments
Assets, Fair Value	1,886,000	221,000
Liabilities, Fair Value	0	77,000
Foreign currency forward contracts
Fair Values of Derivative Financial Instruments
Term to maturity of derivative contracts is generally this period (in months)	12 months
Notional amounts of derivative financial instruments	149,100,000	127,600,000
Foreign currency forward contracts | Derivative designated as hedging instruments
Fair Values of Derivative Financial Instruments
Assets, Fair Value	0	2,245,000
Liabilities, Fair Value	7,530,000	769,000
Foreign currency forward contracts | Derivative not designated as hedging instruments
Fair Values of Derivative Financial Instruments
Assets, Fair Value	1,886,000	221,000
Liabilities, Fair Value	$ 0	$ 77,000

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RELATED PARTY TRANSACTIONS (Details) (USD $) In Thousands, unless otherwise specified	9 Months Ended
	Oct. 31, 2014 Corporate Joint Venture	Oct. 31, 2013 Corporate Joint Venture	Jan. 31, 2013 Comverse
Related Party Transaction [Line Items]
Beneficial ownership position held by CTI (as a percent)			53.50%
Payments to Noncontrolling Shareholder of Joint Venture	$ 0	$ 0
Expenses from Transactions with Noncontrolling Shareholder of Joint Venture	0	0
Revenue from Transactions with Noncontrolling Shareholder of Joint Venture	$ 0	$ 0

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Condensed Consolidated Statements of Operations (USD $) In Thousands, except Per Share data, unless otherwise specified	3 Months Ended		9 Months Ended
	Oct. 31, 2014	Oct. 31, 2013	Oct. 31, 2014	Oct. 31, 2013
Revenue
Product	$ 118,346	$ 101,974	$ 339,657	$ 287,189
Service and support	164,228	122,340	477,126	364,358
Total revenue	282,574	224,314	816,783	651,547
Cost of revenue:
Product	32,925	33,322	104,524	94,584
Service and support	60,082	36,900	178,939	115,568
Amortization of acquired technology and backlog	8,096	1,935	23,018	7,920
Total cost of revenue	101,103	72,157	306,481	218,072
Gross profit	181,471	152,157	510,302	433,475
Operating expenses:
Research and development, net	43,008	30,704	128,408	91,935
Selling, general and administrative	102,738	77,472	310,946	240,540
Amortization of other acquired intangible assets	11,367	6,150	34,124	18,193
Total operating expenses	157,113	114,326	473,478	350,668
Operating income	24,358	37,831	36,824	82,807
Other income (expense), net:
Interest income	208	242	683	563
Interest expense	(8,494)	(7,416)	(28,103)	(21,987)
Losses on early retirements of debt	0	0	(12,546)	(9,879)
Other income (expense), net	167	(646)	1,266	(5,013)
Total other expense, net	(8,119)	(7,820)	(38,700)	(36,316)
Income (loss) before provision for (benefit from) income taxes	16,239	30,011	(1,876)	46,491
Provision for (benefit from) income taxes	4,766	5,957	(31,788)	11,869
Net income	11,473	24,054	29,912	34,622
Net income attributable to noncontrolling interest	803	1,567	3,564	3,752
Net income attributable to Verint Systems Inc.	10,670	22,487	26,348	30,870
Dividends on preferred stock	0	0	0	(174)
Net income attributable to Verint Systems Inc. common shares	$ 10,670	$ 22,487	$ 26,348	$ 30,696
Net income per common share attributable to Verint Systems Inc.
Basic (in dollars per share)	$ 0.18	$ 0.42	$ 0.46	$ 0.58
Diluted (in dollars per share)	$ 0.17	$ 0.42	$ 0.45	$ 0.57
Weighted-average common shares outstanding
Basic (in shares)	60,644	53,374	57,222	52,781
Diluted (in shares)	61,492	53,946	58,332	53,561

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INTANGIBLE ASSETS AND GOODWILL

9 Months Ended

Oct. 31, 2014

Goodwill and Intangible Assets Disclosure [Abstract]

INTANGIBLE ASSETS AND GOODWILL

INTANGIBLE ASSETS AND GOODWILL

Acquisition-related intangible assets consisted of the following as of October 31, 2014 and January 31, 2014:

	October 31, 2014
(in thousands)	Cost		Accumulated Amortization			Net
Intangible assets with finite lives:
Customer relationships	$	388,008	$	(169,745	)	$	218,263
Acquired technology	200,078		(98,097		)	101,981
Trade names	19,801		(9,007		)	10,794
Non-competition agreements	3,625		(2,149		)	1,476
Distribution network	4,440		(2,416		)	2,024
Backlog	386		(327		)	59
Total intangible assets with finite lives	616,338		(281,741		)	334,597
In-process research and development, with indefinite lives	1,700		—			1,700
Total	$	618,038	$	(281,741	)	$	336,297

	January 31, 2014
(in thousands)	Cost		Accumulated Amortization			Net
Intangible assets with finite lives:
Customer relationships	$	240,208	$	(141,714	)	$	98,494
Acquired technology	106,361		(76,922		)	29,439
Trade names	13,378		(11,378		)	2,000
Non-competition agreements	5,514		(4,970		)	544
Distribution network	2,440		(1,840		)	600
Backlog	386		(316		)	70
Total intangible assets with finite lives	368,287		(237,140		)	131,147
In-process research and development, with indefinite lives	1,700		—			1,700
Total	$	369,987	$	(237,140	)	$	132,847

The following table presents net acquisition-related intangible assets by reportable segment as of October 31, 2014 and January 31, 2014: 

	October 31,		January 31,
(in thousands)	2014		2014
Enterprise Intelligence	$	285,037	$	115,928
Communications Intelligence	50,050		14,856
Video Intelligence	1,210		2,063
Total	$	336,297	$	132,847

The reported amount of net acquisition-related intangible assets can fluctuate from the impact of changes in foreign exchange rates on intangible assets not denominated in U.S. dollars.

Total amortization expense recorded for acquisition-related intangible assets was $19.5 million and $57.1 million for the three and nine months endedOctober 31, 2014, respectively, and $8.1 million and $26.1 million for the three and nine months ended October 31, 2013, respectively.

Estimated future amortization expense on finite-lived acquisition-related intangible assets as of October 31, 2014 was as follows:

(in thousands)
Years Ending January 31,	Amount
2015 (remainder of year)	$	20,921
2016	77,033
2017	73,604
2018	54,078
2019	25,107
2020 and thereafter	83,854
Total	$	334,597

Goodwill represents the excess of the purchase price in a business combination over the fair value of net tangible and identifiable intangible assets acquired. At the acquisition date, goodwill resulting from a business combination is assigned to those reporting units expected to benefit from the synergies of the combination. Reporting units may either be at, or one level below, our operating segment level.

Goodwill activity for the nine months ended October 31, 2014, in total and by reportable segment, was as follows: 

				Reportable Segment
(in thousands)	Total			Enterprise Intelligence			Communications Intelligence			Video Intelligence
Year Ended January 31, 2014:
Goodwill, gross, at January 31, 2014	$	920,254		$	795,722		$	47,838		$	76,694
Accumulated impairment losses through January 31, 2014	(66,865		)	(30,791		)	—			(36,074		)
Goodwill, net, at January 31, 2014	853,389			764,931			47,838			40,620
Business combinations	378,576			330,065			48,511			—
Foreign currency translation and other	(10,961		)	(9,792		)	(37		)	(1,132		)
Goodwill, net, at October 31, 2014	$	1,221,004		$	1,085,204		$	96,312		$	39,488
Balance at October 31, 2014:
Goodwill, gross, at October 31, 2014	$	1,287,869		$	1,115,995		$	96,312		$	75,562
Accumulated impairment losses through October 31, 2014	(66,865		)	(30,791		)	—			(36,074		)
Goodwill, net, at October 31, 2014	$	1,221,004		$	1,085,204		$	96,312		$	39,488

No events or circumstances indicating the potential for goodwill impairment were identified during the nine months ended October 31, 2014.

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BUSINESS COMBINATIONS

9 Months Ended

Oct. 31, 2014

Business Combinations [Abstract]

BUSINESS COMBINATIONS

BUSINESS COMBINATIONS

Nine Months Ended October 31, 2014

KANA Software, Inc.

On February 3, 2014, we completed the acquisition of KANA Software, Inc. and its subsidiaries through the merger of KANA Software, Inc.'s parent holding company, Kay Technology Holdings, Inc. (collectively, "KANA"), with an indirect, wholly owned subsidiary of Verint, with KANA continuing as the surviving company and as our wholly owned subsidiary. The purchase price consisted of $542.4 million of cash paid at the closing, partially offset by $25.1 million of KANA’s cash received in the acquisition, and a $0.7 million post-closing purchase price adjustment, resulting in net cash consideration of $516.6 million. The post-closing purchase price adjustment resulted from the final determination of KANA's February 3, 2014 cash, debt, net working capital, transaction expenses and taxes, and was received in cash in May 2014.

The merger consideration was funded by a combination of cash on hand, $300.0 million of incremental term loans incurred in connection with an amendment to our Credit Agreement, and $125.0 million of borrowings under our 2013 Revolving Credit Facility (further details for which appear in Note 6, "Long-Term Debt").

KANA, based in Sunnyvale, California and with global operations, is a leading provider of on-premises and cloud-based solutions which create differentiated, personalized, and integrated customer experiences for large enterprises and mid-market organizations. KANA is being integrated into our Enterprise Intelligence operating segment.

Among the factors contributing to the recognition of goodwill as a component of the KANA purchase price allocation were synergies in products and technologies, and the addition of a skilled, assembled workforce. This goodwill has been assigned to our Enterprise Intelligence segment and while generally not deductible for income tax purposes, certain goodwill related to previous business combinations by KANA will be deductible for income tax purposes.

In connection with the purchase price allocation for KANA, the estimated fair value of undelivered performance obligations under customer contracts assumed in the merger was determined utilizing a cost build-up approach. The cost build-up approach calculates fair value by estimating the costs required to fulfill the obligations plus a reasonable profit margin, which approximates the amount that we believe would be required to pay a third party to assume the performance obligations. The estimated costs to fulfill the performance obligations were based on the historical direct costs for delivering similar services. As a result, in allocating the purchase price, we recorded $7.9 million of current and long-term deferred revenue, representing the estimated fair value of undelivered performance obligations for which payment had been received, which will be recognized as revenue as the underlying performance obligations are delivered. For undelivered performance obligations for which payment had not yet been received, we recorded an $18.6 million asset within prepaid expenses and other current assets as a component of the purchase price allocation. We are amortizing this asset over the underlying delivery periods for these obligations as a reduction to revenue, which reduces the revenue we recognize for providing these services to its estimated fair value.

As a result of the ongoing integration of KANA into our Enterprise Intelligence operating segment, including the integration of the KANA and legacy Verint global sales organizations and the resulting impact to the marketing and sales of our Enterprise Intelligence products, we are unable to provide a meaningful measure of the impact on revenue and net income attributable to KANA in our condensed consolidated statements of operations for the three and nine months ended October 31, 2014.

Transaction and related costs, consisting primarily of professional fees and integration expenses, directly related to the merger, totaled $1.8 million and $6.4 million for the three and nine months ended October 31, 2014, respectively, and were expensed as incurred.

UTX Technologies Limited

On March 31, 2014, we completed the acquisition of all of the outstanding shares of UTX Technologies Limited (“UTX”), a provider of certain mobile device tracking solutions for security applications, from UTX Limited. UTX Limited was our supplier of these products to our Communications Intelligence operating segment prior to the acquisition. The purchase price consisted of $82.9 million of cash paid at closing, subject to adjustment, and $1.3 million for the fair value of potential future contingent consideration payments to UTX Limited of up to $1.5 million. Contingent consideration of $1.5 million was paid to UTX Limited during the three months ended October 31, 2014, in consideration of UTX achieving certain performance targets. The cash paid to acquire UTX was funded with cash on hand.

UTX is based in the Europe, the Middle East and Africa (“EMEA”) region and is being integrated into our Communications Intelligence operating segment.

Among the factors contributing to the recognition of goodwill as a component of the UTX purchase price allocation were synergies in products and technologies, and the addition of a skilled, assembled workforce. This goodwill has been assigned to our Communications Intelligence segment and is not deductible for income tax purposes.

For the nine months ended October 31, 2014, we recorded a charge of $0.2 million within selling, general and administrative expenses to increase the fair value of the UTX contingent consideration obligation to $1.5 million, which reflected the achievement of the underlying performance targets. This amount was paid to UTX Limited during the three months ended October 31, 2014.

Revenue and income before provision for income taxes attributable to UTX from March 31, 2014 through October 31, 2014 were not significant to our consolidated operating results.

Transaction and related costs (or benefits) directly related to the acquisition of UTX, consisting primarily of professional fees, integration expenses and related adjustments, were a benefit of $0.9 million and a charge of $2.1 million for the three and nine months ended October 31, 2014. All transaction and related costs were expensed as incurred.

As a result of the UTX acquisition, we recorded a $2.6 million charge for the impairment of certain capitalized software development costs during the three months ended April 30, 2014, reflecting strategy changes in certain product development initiatives. This charge is reflected within cost of product revenue.

Other Business Combination

On April 16, 2014, we completed the acquisition of certain technology and other assets for use in our Communications Intelligence operating segment in a transaction that qualified as a business combination. This business combination was not material to our condensed consolidated financial statements.

Purchase Price Allocations

The purchase price allocations for the business combinations completed during the nine months ended October 31, 2014 have been prepared on a preliminary basis and changes to those allocations may occur as additional information becomes available during the respective measurement periods (up to one year from the respective acquisition dates). Fair values still under review include values assigned to identifiable intangible assets, deferred income taxes and reserves for uncertain income tax positions. Adjustments identified and recorded subsequent to the initial purchase price allocations for both KANA and UTX have not been material.

The purchase prices were allocated to the tangible and intangible assets acquired and liabilities assumed based on their estimated fair values on the acquisition dates, with the remaining unallocated purchase prices recorded as goodwill. The fair values assigned to identifiable intangible assets acquired were determined primarily by using the income approach, which discounts expected future cash flows to present value using estimates and assumptions determined by management.

The following table sets forth the components and the allocations of the purchase prices for our acquisitions of KANA and UTX, including adjustments identified subsequent to the respective acquisition dates:

(in thousands)	KANA			UTX
Components of Purchase Prices:
Cash, including post-closing adjustments	$	541,685		$	82,901
Fair value of contingent consideration	—			1,347
Total purchase prices	$	541,685		$	84,248
Allocation of Purchase Prices:
Net tangible assets (liabilities):
Accounts receivable	$	18,473		$	—
Other current assets, including cash acquired	48,948			3,873
Other assets	12,124			924
Current and other liabilities	(16,509		)	(263		)
Deferred revenue - current and long-term	(7,932		)	(340		)
Deferred income taxes - current and long-term	(63,184		)	(4,882		)
Net tangible liabilities	(8,080		)	(688		)
Identifiable intangible assets:
Customer relationships	152,700			2,000
Developed technology	55,500			37,400
Trademarks and trade names	11,500			—
Other intangible assets	—			1,100
Total identifiable intangible assets	219,700			40,500
Goodwill	330,065			44,436
Total purchase price allocations	$	541,685		$	84,248

The weighted-average estimated useful life of all finite-lived identifiable intangible assets acquired during the nine months ended October 31, 2014 is 7.4 years.

For the acquisition of KANA, the acquired customer relationships, developed technology, and trademarks and trade names were assigned estimated useful lives of five to ten years, three to five years, and five years, respectively, the weighted average of which is approximately 8.1 years.

For the acquisition of UTX, the acquired customer relationships, developed technology and other intangible assets were assigned estimated useful lives of three years, four years, and four years, respectively, the weighted average of which is approximately 4.0 years.

The acquired identifiable intangible assets are being amortized on a straight-line basis, which we believe approximates the pattern in which the assets are utilized, over their estimated useful lives.

We have included the financial results of these business combinations in our condensed consolidated financial statements from their respective acquisition dates.

Pro Forma Information

The following table provides unaudited pro forma operating results for the three and nine months ended October 31, 2014 and 2013, as if KANA and UTX had been acquired on February 1, 2013. These unaudited pro forma results reflect certain adjustments related to these acquisitions, including amortization expense on finite-lived intangible assets acquired from KANA and UTX, interest expense and fees associated with additional long-term debt incurred to partially fund the acquisition of KANA, and adjustments to recognize the fair value of revenue associated with performance obligations assumed in the acquisition of KANA.

For purposes of the following unaudited pro forma operating results, a $45.2 million income tax benefit resulting from a reduction of valuation allowances associated from the acquisition of KANA is reflected in the pro forma operating results for the nine months ended October 31, 2013. The actual tax benefit was recorded during the nine months ended October 31, 2014, as further described in Note 10, "Income Taxes".

The unaudited pro forma results do not include any operating efficiencies or potential cost savings which may result from these business combinations. Accordingly, such unaudited pro forma amounts are not necessarily indicative of the results that actually would have occurred had the acquisitions been completed on February 1, 2013, nor are they indicative of future operating results.

	Three Months Ended October 31,				Nine Months Ended October 31,
(in thousands, except per share amounts)	2014		2013		2014		2013
Revenue	$	288,279	$	256,879	$	842,784	$	737,706
Net income	$	17,650	$	15,826	$	15,419	$	37,146
Net income attributable to Verint Systems Inc.	$	16,847	$	14,259	$	11,855	$	33,394
Net income per common share attributable to Verint Systems Inc.:
Basic	$	0.28	$	0.27	$	0.21	$	0.63
Diluted	$	0.27	$	0.26	$	0.20	$	0.62

Business Combinations in Prior Periods

In connection with certain business combinations completed in prior periods, we have agreed to make contingent cash payments to the former shareholders or asset holders of the acquired businesses based upon achievement of performance targets following the acquisition dates. These obligations are measured at fair value at each reporting date.

For the three and nine months ended October 31, 2014, we recorded charges of $0.3 million and $0.5 million, respectively, within selling, general and administrative expenses for changes in the fair values of these obligations, which primarily reflected the impacts of revised expectations of achieving the performance targets. For the three and nine months ended October 31, 2013, we recorded benefits of $1.9 million and $1.6 million, respectively, within selling, general and administrative expenses for changes in the fair values of these obligations.

Payments of contingent consideration earned under these agreements were $1.6 million and $8.5 million for the three and nine months ended October 31, 2014, respectively. Payments of contingent consideration earned under these agreements were $0.9 million and $17.1 million for the three and nine months ended October 31, 2013, respectively.

For a certain business combination completed during the year ended January 31, 2012, the purchase price allocation included liabilities for uncertain tax positions and certain other liabilities associated with pre-acquisition business activities of the acquired company. Corresponding indemnification assets were also recorded as components of the purchase price allocation for this acquisition, recognizing the selling shareholders’ contractual obligation to indemnify us for these pre-acquisition liabilities and were measured on the same basis as the corresponding liabilities. As of October 31, 2014 and January 31, 2014, the combined current and long-term liabilities for these matters were $2.9 million and $3.4 million, respectively. The corresponding current and long-term indemnification assets associated with these liabilities were $1.8 million and $2.3 million at October 31, 2014 and January 31, 2014, respectively.

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COMMITMENTS AND CONTINGENCIES

9 Months Ended

Oct. 31, 2014

Commitments and Contingencies Disclosure [Abstract]

COMMITMENTS AND CONTINGENCIES

COMMITMENTS AND CONTINGENCIES

Warranty Liability

The following table summarizes the activity in our warranty liability, which is included in accrued expenses and other liabilities in the condensed consolidated balance sheets, for the nine months ended October 31, 2014 and 2013:

	Nine Months Ended October 31,
(in thousands)	2014			2013
Warranty liability, beginning of period	$	706		$	1,045
Provision credited against expenses	(93		)	(253		)
Foreign currency translation and other	(5		)	(2		)
Warranty liability, end of period	$	608		$	790

Legal Proceedings

On March 26, 2009, legal actions were commenced by Ms. Orit Deutsch, a former employee of our subsidiary, Verint Systems Limited ("VSL"), against VSL in the Tel Aviv Regional Labor Court (Case Number 4186/09) (the “Deutsch Labor Action”) and against CTI in the Tel Aviv District Court (Case Number 1335/09) (the “Deutsch District Action”). In the Deutsch Labor Action, Ms. Deutsch filed a motion to approve a class action lawsuit on the grounds that she purports to represent a class of our employees and former employees who were granted Verint and CTI stock options and were allegedly damaged as a result of the suspension of option exercises during our previous extended filing delay period. In the Deutsch District Action, in addition to a small amount of individual damages, Ms. Deutsch is seeking to certify a class of plaintiffs who were allegedly damaged due to their inability to exercise Verint and CTI stock options as a result of alleged negligence by CTI in its financial reporting. The class certification motions do not specify an amount of damages. On February 8, 2010, the Deutsch Labor Action was dismissed for lack of material jurisdiction and was transferred to the Tel Aviv District Court and consolidated with the Deutsch District Action. On March 16, 2009 and March 26, 2009, respectively, legal actions were commenced by Ms. Roni Katriel, a former employee of CTI's former subsidiary, Comverse Limited, against Comverse Limited in the Tel Aviv Regional Labor Court (Case Number 3444/09) (the “Katriel Labor Action”) and against CTI in the Tel Aviv District Court (Case Number 1334/09) (the “Katriel District Action”). In the Katriel Labor Action, Ms. Katriel is seeking to certify a class of plaintiffs who were granted CTI stock options and were allegedly damaged as a result of the suspension of option exercises during CTI's previous extended filing delay period. In the Katriel District Action, in addition to a small amount of individual damages, Ms. Katriel is seeking to certify a class of plaintiffs who were allegedly damaged due to their inability to exercise CTI stock options as a result of alleged negligence by CTI in its financial reporting. The class certification motions do not specify an amount of damages. On March 2, 2010, the Katriel Labor Action was transferred to the Tel Aviv District Court, based on an agreed motion filed by the parties requesting such transfer.

On April 4, 2012, Ms. Deutsch and Ms. Katriel filed an uncontested motion to consolidate and amend their claims and on June 7, 2012, the District Court allowed Ms. Deutsch and Ms. Katriel to file the consolidated class certification motion and an amended consolidated complaint against VSL, CTI, and Comverse Limited. Following CTI's announcement of its intention to effect the Comverse share distribution, on July 12, 2012, the plaintiffs filed a motion requesting that the District Court order CTI to set aside up to $150 million in assets to secure any future judgment. The District Court ruled that it would not decide this motion until the Deutsch and Katriel class certification motion was heard. Plaintiffs initially filed a motion to appeal this ruling in August 2012, but subsequently withdrew it in July 2014.

Prior to the consummation of the Comverse share distribution, CTI either sold or transferred substantially all of its business operations and assets (other than its equity ownership interests in us and Comverse) to Comverse or unaffiliated third parties. On October 31, 2012, CTI completed the Comverse share distribution, in which it distributed all of the outstanding shares of common stock of Comverse to CTI's shareholders. As a result of the Comverse share distribution, Comverse became an independent public company and ceased to be a wholly owned subsidiary of CTI, and CTI ceased to have any material assets other than its equity interest in us.

On February 4, 2013, we completed the CTI Merger. As a result of the CTI Merger, we have assumed certain rights and liabilities of CTI, including any liability of CTI arising out of the Deutsch District Action and the Katriel District Action. However, under the terms of the Distribution Agreement between CTI and Comverse relating to the Comverse share distribution, we, as successor to CTI, are entitled to indemnification from Comverse for any losses we suffer in our capacity as successor-in-interest to CTI in connection with the Deutsch District Action and the Katriel District Action.

Following an attempt to mediate the dispute, on July 1, 2014, the plaintiffs filed a notice with the District Court informing it that the mediation process had been unsuccessful. As a result, the parties recently filed summations on the plaintiffs’ motion to certify the suit as a class action, which will be considered by the District Court.

From time to time we or our subsidiaries may be involved in legal proceedings and/or litigation arising in the ordinary course of our business. While the outcome of these matters cannot be predicted with certainty, we do not believe that the outcome of any current claims will have a material effect on our consolidated financial position, results of operations, or cash flows.

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DERIVATIVE FINANCIAL INSTRUMENTS

9 Months Ended

Oct. 31, 2014

Derivative Instruments and Hedging Activities Disclosure [Abstract]

DERIVATIVE FINANCIAL INSTRUMENTS

DERIVATIVE FINANCIAL INSTRUMENTS

Our primary objective for holding derivative financial instruments is to manage foreign currency exchange rate risk and interest rate risk, when deemed appropriate. We enter into these contracts in the normal course of business to mitigate risks and not for speculative purposes.

Foreign Currency Forward Contracts

Under our risk management strategy, we periodically use derivative financial instruments to manage our short-term exposures to fluctuations in foreign currency exchange rates. We utilize foreign currency forward contracts to hedge certain operational cash flow exposures resulting from changes in foreign currency exchange rates. These cash flow exposures result from portions of our forecasted operating expenses, primarily compensation and related expenses, which are transacted in currencies other than the U.S. dollar, primarily the Israeli shekel and the Canadian dollar. We also periodically utilize foreign currency forward contracts to manage exposures resulting from forecasted customer collections to be remitted in currencies other than the applicable functional currency, and exposures from cash, cash equivalents and short-term investments denominated in currencies other than the applicable functional currency. Our joint venture, which has a Singapore dollar functional currency, also utilizes foreign exchange forward contracts to manage its exposure to exchange rate fluctuations related to settlements of liabilities denominated in U.S. dollars. These foreign currency forward contracts are reported at fair value on our consolidated balance sheets and generally have maturities of no longer than twelve months, although occasionally we will execute a contract that extends beyond twelve months, depending upon the nature of the underlying risk.

The counterparties to our derivative financial instruments consist of several major international financial institutions.  We regularly monitor the financial strength of these institutions. While the counterparties to these contracts expose us to credit-related losses in the event of a counterparty’s non-performance, the risk would be limited to the unrealized gains on such affected contracts. We do not anticipate any such losses.

Certain of these foreign currency forward contracts are not designated as hedging instruments under accounting guidance for derivatives, and gains and losses from changes in their fair values are therefore reported in other income (expense), net.  Changes in the fair values of foreign currency forward contracts that are designated and effective as cash flow hedges are recorded net of related tax effects in accumulated other comprehensive income (loss), and are reclassified to the condensed consolidated statements of operations when the effects of the item being hedged are recognized in the condensed consolidated statements of operations.

Notional Amounts of Derivative Financial Instruments

Our outstanding derivative financial instruments consisted only of foreign currency forward contracts with notional amounts of $149.1 million and $127.6 million as of October 31, 2014 and January 31, 2014, respectively.

Fair Values of Derivative Financial Instruments

The fair values of our derivative financial instruments as of October 31, 2014 and January 31, 2014 were as follows: 

	October 31, 2014
	Assets			Liabilities
(in thousands)	Balance Sheet Classification	Fair Value		Balance Sheet Classification	Fair Value
Derivative financial instruments designated as hedging instruments:
Foreign currency forward contracts	—	$	—	Accrued expenses and other liabilities	$	7,530
Total derivative financial instruments designated as hedging instruments		$	—		$	7,530
Derivative financial instruments not designated as hedging instruments:
Foreign currency forward contracts	Prepaid expenses and other current assets	$	1,886	—	$	—
Total derivative financial instruments not designated as hedging instruments		$	1,886		$	—

	January 31, 2014
	Assets			Liabilities
(in thousands)	Balance Sheet Classification	Fair Value		Balance Sheet Classification	Fair Value
Derivative financial instruments designated as hedging instruments:
Foreign currency forward contracts	Prepaid expenses and other current assets	$	2,245	Accrued expenses and other liabilities	$	769
Total derivative financial instruments designated as hedging instruments		$	2,245		$	769
Derivative financial instruments not designated as hedging instruments:
Foreign currency forward contracts	Prepaid expenses and other current assets	$	221	Accrued expenses and other liabilities	$	77
Total derivative financial instruments not designated as hedging instruments		$	221		$	77

Derivative Financial Instruments in Cash Flow Hedging Relationships

The effects of derivative financial instruments designated as cash flow hedging instruments as of October 31, 2014 and January 31, 2014, and for the three and nine months ended October 31, 2014 and 2013 were as follows:

	Net (Losses) Gains Recognized in Accumulated Other Comprehensive  Income (Loss)					Classification of Net (Losses) Gains Reclassified from Other Comprehensive Loss into the Condensed Consolidated Statements of Operations	Net (Losses) Gains Reclassified from Other Comprehensive  Income (Loss) into the Condensed Consolidated Statements of Operations
	October 31,			January 31,			Three Months Ended October 31,					Nine Months Ended October 31,
(in thousands)	2014			2014			2014			2013		2014		2013
Foreign currency forward contracts	$	(6,722	)	$	1,485	Operating Expenses	$	(876	)	$	1,984	$	993	$	4,348

There were no gains or losses from ineffectiveness of these hedges recorded for the three and nine months endedOctober 31, 2014 and 2013. All of the foreign currency forward contracts underlying the $6.7 million of net unrealized losses recorded in our accumulated other comprehensive loss at October 31, 2014 mature within twelve months, and therefore we expect all such losses to be reclassified into earnings within the next twelve months.

DerivativeFinancial InstrumentsNot Designated as Hedging Instruments

Gains (losses) recognized on derivative financial instruments not designated as hedging instruments in our condensed consolidated statements of operations for the three and nine months endedOctober 31, 2014 and 2013 were as follows:

	Classification in Condensed Consolidated Statements of Operations	Three Months Ended October 31,					Nine Months Ended October 31,
(in thousands)		2014		2013			2014		2013
Foreign currency forward contracts	Other income (expense), net	$	1,562	$	(721	)	1,665		(44		)
Total		$	1,562	$	(721	)	$	1,665	$	(44	)

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STOCK-BASED COMPENSATION STOCK-BASED COMPENSATION - RESTRICTED STOCK UNITS (Details) (USD $) In Millions, except Share data, unless otherwise specified	9 Months Ended
	Oct. 31, 2014 RSUs	Jul. 27, 2014 Long-term Stock Incentive Plan 2010
Summary of award activity
Beginning balance (in shares)	2,250,000
Granted (in shares)	1,578,000
Released (in shares)	(1,020,000)
Forfeited (in shares)	(170,000)
Ending balance (in shares)	2,638,000
Weighted-Average Grant-Date Fair Value
Beginning balance (in dollars per share)	$ 33.77
Granted (in dollars per share)	$ 46.19
Released (in dollars per share)	$ 34.28
Forfeited (in dollars per share)	$ 38.87
Ending balance (in dollars per share)	$ 40.68
Additional disclosures
Unrecognized compensation expense	$ 70.1
Remaining period over which unrecognized compensation is to be recognized	1 year 8 months
Increase of shares available for issuance		53,000

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STOCKHOLDERS' EQUITY

9 Months Ended

Oct. 31, 2014

Stockholders' Equity Note [Abstract]

STOCKHOLDERS' EQUITY

STOCKHOLDERS’ EQUITY

Issuance of Common Stock

On June 18, 2014, we completed a public offering of our common stock pursuant to which we issued and sold 5,750,000 shares of common stock at a price of $47.75 per share. We received aggregate proceeds of $265.6 million from the offering, net of underwriters’ discounts and commissions, but before deducting approximately $0.7 million of other offering expenses.

Dividends on Common Stock

We did not declare or pay any dividends on our common stock during the nine months ended October 31, 2014 and 2013. Commencing in May 2007, with our issuance of Series A Convertible Preferred Stock and our entry into a prior credit agreement, and continuing under the terms of our current Credit Agreement, we are subject to certain restrictions on declaring and paying dividends on our common stock. Our Series A Convertible Preferred Stock was canceled on February 4, 2013 in connection with the CTI Merger, further details of which appear in Note 14, "Merger with CTI".

Treasury Stock

Repurchased shares of common stock are recorded as treasury stock, at cost. At October 31, 2014, we held approximately 348,000 shares of treasury stock with a cost of $10.3 million. At January 31, 2014, we held approximately 302,000 shares of treasury stock with a cost of $8.0 million.

During the nine months ended October 31, 2014, we acquired approximately 46,000 shares of treasury stock at a cost of $2.2 million. We did not acquire any treasury stock during the nine months ended October 31, 2013.

Accumulated Other Comprehensive Income (Loss)

Accumulated other comprehensive income (loss) includes items such as foreign currency translation adjustments and unrealized gains and losses on certain marketable securities and derivative financial instruments designated as hedges. Accumulated other comprehensive income (loss) is presented as a separate line item in the stockholders’ equity section of our condensed consolidated balance sheets. Accumulated other comprehensive income (loss) items have no impact on our net income as presented in our condensed consolidated statements of operations.

The following table summarizes changes in the components of our accumulated other comprehensive income (loss) by component for the nine months ended October 31, 2014:

(in thousands)	Unrealized Gains (Losses) on Derivative Financial Instruments Designated as Hedges			Unrealized Gains on Available-for-Sale Investments		Foreign Currency Translation Adjustments			Total
Accumulated other comprehensive income (loss) at January 31, 2014	$	1,485		$	9	$	(41,219	)	$	(39,725	)
Other comprehensive (loss) income before reclassifications	(7,236		)	13		(13,290		)	(20,513		)
Amounts reclassified out of accumulated other comprehensive income (loss)	(971		)	—		—			(971		)
Net other comprehensive (loss) income, current period	(8,207		)	13		(13,290		)	(21,484		)
Accumulated other comprehensive (loss) income at October 31, 2014	$	(6,722	)	$	22	$	(54,509	)	$	(61,209	)

All amounts presented in the table above are net of income taxes, if applicable.

The amounts reclassified out of accumulated other comprehensive income (loss) into the condensed consolidated statements of operations, with presentation location, for the three and nine months ended October 31, 2014 and 2013 were as follows:

	Three Months Ended October 31,						Nine Months Ended October 31,						Affected Line Items in the Condensed Consolidated Statement of Operations
(in thousands)	2014			2013			2014			2013
Unrealized losses (gains) on derivative financial instruments:
Foreign currency forward contracts	$	80		$	(167	)	$	(65	)	$	(370	)	Cost of product revenue
	68			(178		)	(61		)	(383		)	Cost of service revenue
	499			(1,123		)	(578		)	(2,455		)	Research and development, net
	229			(516		)	(289		)	(1,140		)	Selling, general and administrative
	876			(1,984		)	(993		)	(4,348		)	Total before provision for income taxes
	(111		)	174			22			307			Provision for income taxes
	$	765		$	(1,810	)	$	(971	)	$	(4,041	)	Total, net of income taxes

Noncontrolling Interest

The noncontrolling interest presented in our condensed consolidated financial statements reflects a 50% noncontrolling equity interest in a joint venture which functions as a systems integrator for Asian markets.

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LONG-TERM DEBT LONG-TERM DEBT - CREDIT AGREEMENT (2014 AMENDMENTS) (Details) (USD $)	3 Months Ended		9 Months Ended								1 Months Ended	3 Months Ended	6 Months Ended							1 Months Ended		1 Months Ended			1 Months Ended
	Oct. 31, 2014	Oct. 31, 2013	Oct. 31, 2014	Oct. 31, 2013	Jul. 31, 2014 2013 Revolving Line of Credit	Jun. 18, 2014 2013 Revolving Line of Credit	Jan. 31, 2014 2013 Revolving Line of Credit	Mar. 06, 2013 2013 Revolving Line of Credit	Oct. 31, 2014 February 2014 Term Loans	Jan. 31, 2014 February 2014 Term Loans	Mar. 31, 2013 March 2013 Term Loans	Apr. 30, 2014 March 2013 Term Loans	Jul. 31, 2014 March 2013 Term Loans	Mar. 07, 2014 March 2013 Term Loans	Mar. 06, 2013 March 2013 Term Loans	Oct. 31, 2014 March 2014 Term Loans	Mar. 07, 2014 March 2014 Term Loans	Jan. 31, 2014 March 2014 Term Loans	Feb. 03, 2014 2013 Amended Credit Agreement - 2014 Amendments	Feb. 28, 2014 2013 Amended Credit Agreement - 2014 Amendments 2013 Revolving Line of Credit	Jun. 18, 2014 2013 Amended Credit Agreement - 2014 Amendments 2013 Revolving Line of Credit	Feb. 28, 2014 2013 Amended Credit Agreement - 2014 Amendments February 2014 Term Loans	Feb. 03, 2014 2013 Amended Credit Agreement - 2014 Amendments February 2014 Term Loans	Mar. 07, 2014 2013 Amended Credit Agreement - 2014 Amendments March 2014 Term Loans	Mar. 31, 2013 Line of Credit Facility Covenant Period Until January 2016 2013 Revolving Line of Credit numerator	Mar. 31, 2013 Line of Credit Facility Covenant Period January 2016 Thereafter 2013 Amended Credit Agreement numerator
Debt Instrument
Proceeds from Lines of Credit																				$ 125,000,000
Proceeds from Issuance of Debt											646,700,000											300,000,000
Term loan discount (as a percent)											0.50%											0.25%
Unamortized debt discount									289,000	0				2,800,000	3,300,000								800,000
Line of Credit Facility, Additional Borrowing Capacity																			200,000,000
Losses on early retirements of debt	0	0	(12,546,000)	(9,879,000)									7,100,000
Borrowings Under Line of Credit Facility					0		0
Repayments of Debt												643,500,000
Term Loans									130,440,000	0						280,413,000	643,500,000	0
Consolidated Total Debt to Consolidated EBITDA Ratio																									5.00	4.50
Unamortized deferred costs														4,300,000							700,000		7,100,000	2,400,000
Line of Credit Facility, Maximum Borrowing Capacity						$ 300,000,000		$ 200,000,000

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LONG-TERM DEBT

9 Months Ended

Oct. 31, 2014

Long-term Debt, Unclassified [Abstract]

LONG-TERM DEBT

LONG-TERM DEBT

The following table summarizes our long-term debt at October 31, 2014 and January 31, 2014: 

	October 31,			January 31,
(in thousands)	2014			2014
1.50% Convertible Senior Notes:
Principal amount	$	400,000		$	—
Unamortized debt discount	(76,535		)	—
1.50% Convertible Senior Notes, net	323,465			—
February 2014 Term Loans:
Gross amount	130,729			—
Unamortized debt discount	(289		)	—
February 2014 Term Loans, net	130,440			—
March 2014 Term Loans	280,413			—
March 2013 Term Loans:
Gross amount	—			645,125
Unamortized debt discount	—			(2,827		)
March 2013 Term Loans, net	—			642,298
Other debt	34			87
Total debt	734,352			642,385
Less: current maturities	36			6,555
Long-term debt	$	734,316		$	635,830

1.50% Convertible Senior Notes

On June 18, 2014, we issued $400.0 million in aggregate principal amount of 1.50% convertible senior notes due June 1, 2021 (the "Notes"), unless earlier converted by the holders pursuant to their terms. Net proceeds from the Notes after underwriting discounts were $391.9 million. The Notes pay interest in cash semiannually in arrears at a rate of 1.50% per annum.

The Notes were issued concurrently with our public issuance of 5,750,000 shares of common stock, the majority of the combined net proceeds of which were used to partially repay certain indebtedness under our Credit Agreement, as further described below. Additional details regarding our June 18, 2014 issuance of common stock appear in Note 8, “Stockholders’ Equity”.

The Notes are unsecured and rank senior in right of payment to our indebtedness that is expressly subordinated in right of payment to the Notes; equal in right of payment to our indebtedness that is not so subordinated; effectively subordinated in right of payment to any of our secured indebtedness to the extent of the value of the assets securing such indebtedness; and structurally subordinated to indebtedness and other liabilities of our subsidiaries.

The Notes are convertible into, at our election, cash, shares of common stock, or a combination of both, subject to satisfaction of specified conditions and during specified periods, as described below. If converted, we currently intend to pay cash in respect of the principal amount of the Notes.

The conversion price of the Notes at any time is equal to $1,000 divided by the then-applicable conversion rate. The Notes have an initial conversion rate of 15.5129 shares of common stock per $1,000 principal amount of Notes, which represents an initial effective conversion price of approximately $64.46 per share of common stock and would result in the issuance of approximately 6,205,000 shares if all of the Notes were converted. Throughout the term of the Notes, the conversion rate may be adjusted upon the occurrence of certain events.

Holders may surrender their Notes for conversion at any time prior to the close of business on the business day immediately preceding December 1, 2020, only under the following circumstances:

• during any calendar quarter commencing after the calendar quarter ending on September 30, 2014, if the closing sale price of our common stock, for at least 20 trading days (whether or not consecutive) in the period of 30 consecutive trading days ending on the last trading day of the immediately preceding calendar quarter, is more than 130% of the conversion price of the Notes in effect on each applicable trading day;

• during the ten consecutive trading-day period following any five consecutive trading-day period in which the trading price for the Notes for each such trading day was less than 98% of the closing sale price of our common stock on such date multiplied by the then-current conversion rate; or

• upon the occurrence of specified corporate events, as described in the indenture governing the Notes, such as a consolidation, merger, or binding share exchange.

On or after December 1, 2020 until the close of business on the second scheduled trading day immediately preceding the maturity date, holders may surrender their Notes for conversion regardless of whether any of the foregoing conditions have been satisfied.

As of October 31, 2014, the Notes were not convertible.

In accordance with accounting guidance for convertible debt with a cash conversion option, we separately accounted for the debt and equity components of the Notes in a manner that reflects our estimated nonconvertible debt borrowing rate. We estimated the carrying amount of the debt component of the Notes to be $319.9 million at the issuance date, assuming a 5.00% non-convertible borrowing rate. The carrying amount of the equity component was determined to be approximately $80.1 million by deducting the carrying amount of the debt component from the principal amount of the Notes, and was recorded as an increase to additional paid-in capital. The excess of the principal amount of the debt component over its carrying amount (the “debt discount”) is being amortized as interest expense over the term of the Notes using the effective interest method. The equity component is not remeasured as long as it continues to meet the conditions for equity classification.

We allocated transaction costs related to the issuance of the Notes, including underwriting discounts, of $7.6 million and $1.9 million to the debt and equity components, respectively. Issuance costs attributable to the debt component were recorded within other assets and are being amortized as interest expense over the term of the Notes, and issuance costs attributable to the equity component were netted with the equity component in additional paid-in capital. The carrying amount of the equity component, net of issuance costs, was $78.2 million at October 31, 2014. Including the impact of the related deferred debt issuance costs, the effective interest rate on the Notes was approximately 5.29% at October 31, 2014.

Based on the closing market price of our common stock on October 31, 2014, the if-converted value of the Notes was less than the aggregate principal amount of the Notes.

Note Hedges and Warrants

Concurrently with the issuance of the Notes, we entered into convertible note hedge transactions (the “Note Hedges”) and sold warrants (the “Warrants”). The combination of the Note Hedges and the Warrants serves to increase the effective initial conversion price for the Notes to $75.00 per share. The Note Hedges and Warrants are each separate instruments from the Notes.

Note Hedges

Pursuant to the Note Hedges, we purchased call options on our common stock, under which we have the right to acquire from the counterparties up to approximately 6,205,000 shares of our common stock, subject to customary anti-dilution adjustments, at a price of $64.46, which equals the initial conversion price of the Notes. Our exercise rights under the Note Hedges generally trigger upon conversion of the Notes and the Note Hedges terminate upon maturity of the Notes, or the first day the Notes are no longer outstanding. The Note Hedges may be settled in cash, shares of our common stock, or a combination thereof, at our option, and are intended to reduce our exposure to potential dilution upon conversion of the Notes. We paid $60.8 million for the Note Hedges, which was recorded as a reduction to additional paid-in capital. As of October 31, 2014, we had not purchased any shares under the Note Hedges.

Warrants

We sold the Warrants to several counterparties. The Warrants provide the counterparties rights to acquire from us up to approximately 6,205,000 shares of our common stock at a price of $75.00 per share. The Warrants expire incrementally on a series of expiration dates beginning in August 2021. At expiration, if the market price per share of our common stock exceeds the strike price of the Warrants, we will be obligated to issue shares of our common stock having a value equal to such excess. The Warrants could have a dilutive effect on net income per share to the extent that the market value of our common stock exceeds the strike price of the Warrants. Proceeds from the sale of the Warrants were $45.2 million and were recorded as additional paid-in capital. As of October 31, 2014, no Warrants had been exercised and all Warrants remained outstanding.

The Note Hedges and Warrants both meet the requirements for classification within stockholders’ equity, and their respective fair values will not be subsequently remeasured and adjusted as long as these instruments continue to qualify for stockholders’ equity classification.

Credit Agreement

Background

In April 2011, we entered into a credit agreement (together with the subsequent amendments discussed herein, the “Credit Agreement") with our lenders and concurrently terminated a prior credit agreement. The Credit Agreement provided for $770.0 million of secured credit facilities, comprised of $600.0 million of term loans maturing in October 2017 (the “April 2011 Term Loans") and a $170.0 million revolving credit facility maturing in April 2016 (the “2011 Revolving Credit Facility”), subject to increase (up to a maximum increase of $300.0 million) and reduction from time to time.

We incurred debt issuance costs of $14.8 million associated with the Credit Agreement, which were deferred and were classified within other assets, and were being amortized as interest expense over the term of the Credit Agreement.

2013 Amendment and Restatement of Credit Agreement

On March 6, 2013, we entered into an amendment and restatement agreement with our lenders, providing for the amendment and restatement of the Credit Agreement. The amendment and restatement agreement provided for $850.0 million of senior secured credit facilities, comprised of $650.0 million of term loans maturing in September 2019 (the "March 2013 Term Loans") and a $200.0 million revolving credit facility maturing in March 2018 (the “2013 Revolving Credit Facility”), subject to increase (up to a maximum increase of $300.0 million) and reduction from time to time.

The March 2013 Term Loans were subject to an original issuance discount of 0.50%, or $3.3 million, resulting in net proceeds of $646.7 million. The discount was being amortized as interest expense over the term of the March 2013 Term Loans using the effective interest method.

The majority of the proceeds of the March 2013 Term Loans were used to repay all $576.0 million of outstanding April 2011 Term Loans at the March 6, 2013 closing date of the amendment and restatement agreement.  There were no outstanding borrowings under the 2011 Revolving Credit Facility at the March 6, 2013 closing date.

As further described below, on March 7, 2014, the March 2013 Term Loans were extinguished and replaced with the March 2014 Term Loans, and the basis for determining the interest rate on borrowings under the 2013 Revolving Credit Facility was also amended.

From March 6, 2013 through March 6, 2014, the March 2013 Term Loans and borrowings under the 2013 Revolving Credit Facility, if any, incurred interest, payable quarterly or, in the case of Eurodollar loans with an interest period of three months or shorter, at the end of any interest period, at a per annum rate of, at our election:

• in the case of Eurodollar loans, the Adjusted LIBO Rate plus 3.00% (or, if our corporate credit ratings are BB- and Ba3 or better, 2.75%). The Adjusted LIBO Rate is the greater of (i) 1.00% per annum and (ii) the product of the LIBO Rate and Statutory Reserves (both as defined in the Credit Agreement), and

• in the case of Base Rate loans, the Base Rate plus 2.00% (or, if our corporate credit ratings are BB- and Ba3 or better, 1.75%). The Base Rate is the greatest of (i) the administrative agent's prime rate, (ii) the Federal Funds Effective Rate (as defined in the Credit Agreement) plus 0.50% and (iii) the Adjusted LIBO Rate for a one-month interest period plus 1.00%.

As of January 31, 2014, the interest rate on the March 2013 Term Loans was 4.00%.

At the March 6, 2013 closing date of the amendment and restatement agreement, there were $11.0 million of unamortized deferred debt issuance costs and $2.2 million of unamortized discount associated with the April 2011 Term Loans and the 2011 Revolving Credit Facility. Of the $11.0 million of unamortized deferred debt issuance costs, $3.5 million were associated with commitments under the 2011 Revolving Credit Facility provided by lenders that continued to provide revolving credit commitments under the 2013 Revolving Credit Facility and therefore continued to be deferred, and were being amortized over the remaining term of the Credit Agreement. The remaining $7.5 million of unamortized deferred debt issuance costs and the $2.2 million unamortized discount, all of which related to the April 2011 Term Loans, were written off as a $9.7 million loss on early retirement of debt for the year ended January 31, 2014.

We incurred debt issuance costs of approximately $7.5 million associated with the March 2013 Term Loans and the 2013 Revolving Credit Facility, which were deferred and classified within other assets and were being amortized as interest expense over the remaining term of the Credit Agreement. Of these deferred debt issuance costs, $5.0 million were associated with the March 2013 Term Loans and were being amortized using the effective interest rate method, and $2.5 million were associated with the 2013 Revolving Credit Facility and were being amortized on a straight-line basis.

We are required to pay a commitment fee equal to 0.50% per annum of the undrawn portion on the 2013 Revolving Credit Facility, payable quarterly, and customary administrative agent and letter of credit fees. These fees were unchanged from the 2011 Revolving Credit Facility.

2014 Amendments to Credit Agreement

During the nine months ended October 31, 2014, we entered into five separate amendments to the Credit Agreement as described below.

On February 3, 2014, in connection with the acquisition of KANA, we borrowed $125.0 million under the 2013 Revolving Credit Facility and entered into Amendment No. 1 pursuant to which, on such date, we incurred $300.0 million of incremental term loans (the “February 2014 Term Loans”). The net proceeds of these borrowings were used to fund a portion of the KANA purchase price.

The February 2014 Term Loans were subject to an original issuance discount of 0.25%, or $0.8 million. In June 2014, we wrote off $0.4 million of the unamortized discount in connection with the early retirement of a portion of the February 2014 Term Loans, as further described below. This discount is amortized as interest expense over the term of the February 2014 Term Loans using the effective interest method.

The February 2014 Term Loans bear interest, payable quarterly or, in the case of Eurodollar loans with an interest period of three months or less, at the end of the applicable interest period, at a per annum rate of, at our election:

• in the case of Eurodollar loans, the Adjusted LIBO Rate plus 2.75%. The Adjusted LIBO Rate is the greater of (i) 0.75% per annum and (ii) the product of (x) the LIBO Rate and (y) Statutory Reserves (both as defined in the Credit Agreement), and

• in the case of Base Rate loans, the Base Rate plus 1.75%. The Base Rate is the greatest of (i) the administrative agent’s prime rate, (ii) the Federal Funds Effective Rate (as defined in the Credit Agreement) plus 0.50% and (iii) the Adjusted LIBO Rate for a one-month interest period plus 1.00%.

We incurred debt issuance costs of approximately $7.1 million associated with the February 2014 Term Loans, which were deferred and classified within other assets. In June 2014, we wrote off $3.8 million of these deferred costs in connection with the early retirement of a portion of the February 2014 Term Loans, as further described below. These deferred costs are amortized as interest expense over the term of the February 2014 Term Loans using the effective interest rate method.

On February 3, 2014, we also entered into Amendment No. 2 to, among other things, (i) permit us to increase the permitted amount of additional incremental term loans and revolving credit commitments under the Credit Agreement (beyond the February 2014 Term Loans borrowed under Amendment No. 1) by up to, in the aggregate, $200.0 million plus an additional amount such that the First Lien Leverage Ratio (as defined in Amendment No. 2) would not exceed the specified maximum ratio set forth therein, (ii) increase the size of certain negative covenant basket carve-outs, (iii) permit us to issue Permitted Convertible Indebtedness (as defined in Amendment No. 2), and (iv) permit us to refinance all or a portion of any existing class of term loans under the Credit Agreement with replacement term loans.

On February 3, 2014, we also entered into Amendment No. 3 to extend by one year, to January 31, 2016, the step-down date of the leverage ratio covenant applicable to our 2013 Revolving Credit Facility and, subject to the effectiveness of Amendment No. 4 (as described below), reprice the interest rate applicable to borrowings under the 2013 Revolving Credit Facility to the interest rate applicable to the February 2014 Term Loans.

On March 7, 2014, we entered into Amendment No. 4 to refinance all $643.5 million of outstanding March 2013 Term Loans at that date with $643.5 million of new term loans (the “March 2014 Term Loans”). The provisions for determining the interest rate on the March 2014 Term Loans are identical to such provisions for the February 2014 Term Loans. The repricing of the interest rate applicable to borrowings under the 2013 Revolving Credit Facility contemplated by Amendment No. 3 became effective on March 7, 2014, upon the effectiveness of Amendment No. 4.

The refinancing of the March 2013 Term Loans with the proceeds of the March 2014 Term Loans pursuant to Amendment No. 4 was accounted for as an extinguishment of the March 2013 Term Loans, and as a result, $4.3 million of unamortized deferred debt issuance costs and $2.8 million of unamortized discount associated with the March 2013 Term Loans as of the March 7, 2014 effective date of Amendment No. 4 were written off as a $7.1 million loss on early retirement of debt for the three months ended April 30, 2014.

As of October 31, 2014, the interest rate on both the February 2014 Term Loans and the March 2014 Term Loans was 3.50%. Taking into account the impact of original issuance discounts, if any, and related deferred debt issuance costs, the effective interest rates on the February 2014 Term Loans and March 2014 Term Loans were approximately 4.03% and 3.58%, respectively, at that date.

We incurred $2.4 million of debt issuance costs in consideration of Amendment No. 4, which were deferred and classified within other assets. In June 2014, we wrote off $1.3 million of these deferred debt issuance costs in connection with the early retirement of a portion of the March 2014 Term Loans, as further described below. These deferred costs are amortized as interest expense over the remaining term of the March 2014 Term Loans using the effective interest rate method. There was no original issuance discount on the March 2014 Term Loans.

On June 18, 2014, we entered into Amendment No. 5, which increased the commitments under the 2013 Revolving Credit Facility to $300.0 million and extended the termination of the 2013 Revolving Credit Facility to September 2018. We incurred $0.7 million of costs in consideration of Amendment No. 5, which were deferred and recorded within other assets, and are being amortized as interest expense on a straight-line basis over the term of the 2013 Revolving Credit Facility.

Early Partial Retirement of Term Loans - June 2014

On June 18, 2014, we utilized the majority of the combined net proceeds from the issuance of the Notes and the concurrent issuance of 5,750,000 shares of common stock to retire $530.0 million of the February 2014 Term Loans and March 2014 Term Loans, and all $106.0 million of then-outstanding borrowings under the 2013 Revolving Credit Facility. As a result, $3.8 million and $1.3 million of deferred debt issuance costs associated with the February 2014 Term Loans and March 2014 Term Loans, respectively, and $0.4 million of unamortized discount associated with the February 2014 Term Loans, were written off as a $5.5 million loss on early retirement of debt for the three months ended July 31, 2014.

Borrowings Under 2013 Revolving Credit Facility

There were no borrowings under the 2013 Revolving Credit Facility at October 31, 2014. The initial interest rate on the February 3, 2014 borrowings under the 2013 Revolving Credit Facility was 4.00%, but was adjusted to 3.50% on March 7, 2014, as further described above.

Other Provisions of the Credit Agreement

Loans under the Credit Agreement are subject to mandatory prepayment requirements with respect to certain asset sales, excess cash flows (as defined in the Credit Agreement), and certain other events. Optional prepayments of the term loans are permitted without premium or penalty, other than customary breakage costs associated with the prepayment of loans bearing interest based on LIBO Rates. Optional prepayments of the February 2014 Term Loans and March 2014 Term Loans are subject to a 1.0% premium applicable in the event of specified repricing transactions on or prior to September 7, 2014. Prepayments are applied first to the eight immediately following scheduled term loan principal payments, then pro rata to other remaining scheduled term loan principal payments, if any, and thereafter as otherwise provided in the Credit Agreement.

Our obligations under the Credit Agreement are guaranteed by substantially all of our domestic subsidiaries and certain foreign subsidiaries that have elected to be disregarded for U.S. tax purposes, and are secured by security interests in substantially all of our and the aforementioned subsidiaries' assets, subject to certain exceptions detailed in the Credit Agreement and related ancillary documents.

The Credit Agreement contains certain customary affirmative and negative covenants for credit facilities of this type, which include limitations on us and our subsidiaries with respect to indebtedness, liens, nature of business, investments and loans, distributions, acquisitions, dispositions of assets, sale-leaseback transactions and transactions with affiliates. The 2013 Revolving Credit Facility also contains a financial covenant that requires us to maintain a ratio of Consolidated Total Debt to Consolidated EBITDA (each as defined in the Credit Agreement) of no greater than 5.00 to 1 until January 31, 2016 (as amended on February 3, 2014 by Amendment No. 3, as described above) and no greater than 4.50 to 1 thereafter (the "Leverage Ratio Covenant"). The limitations imposed by the covenants are subject to certain exceptions as detailed in the Credit Agreement.

The Credit Agreement provides for certain customary events of default with corresponding grace periods. These events of default include failure to pay principal or interest when due under the Credit Agreement, failure to comply with covenants, any representation or warranty made by us proving to be inaccurate in any material respect, defaults under certain other indebtedness of ours or our subsidiaries, the occurrence of a Change of Control (as defined in the Credit Agreement) with respect to us and certain insolvency or receivership events affecting us or our significant subsidiaries. Upon the occurrence of an event of default resulting from a violation of the Leverage Ratio Covenant, the lenders under our 2013 Revolving Credit Facility may require us to immediately repay outstanding borrowings under the 2013 Revolving Credit Facility and may terminate their commitments to provide loans under that facility. A violation of the Leverage Ratio Covenant would not, by itself, result in an event of default under the February 2014 Term Loans or March 2014 Term Loans but may trigger a cross-default under the term loans in the event we are required to repay outstanding borrowings under the 2013 Revolving Credit Facility. Upon the occurrence of other events of default, the lenders may require us to immediately repay all outstanding borrowings under the Credit Agreement and the lenders under our 2013 Revolving Credit Facility may terminate their commitments to provide loans under the facility.

Future Principal Payments on Term Loans

Prior to June 2014, we were required to make quarterly principal payments on the February 2014 Term Loans and March 2014 Term Loans of $0.8 million and $1.6 million, respectively, through August 1, 2019, with the remaining balances due in September 2019. Following the partial retirements of the February 2014 Term Loans and March 2014 Term Loans in June 2014, future scheduled principal payments on the February 2014 Term Loans and March 2014 Term Loans as of October 31, 2014 are as follows:

(in thousands)	February 2014		March 2014
Years Ending January 31,	Term Loans		Term Loans
2015 (remainder of year)	$	—	$	—
2016	—		—
2017	669		1,434
2018	1,337		2,869
2019	1,337		2,869
2020	127,386		273,241
Total	$	130,729	$	280,413

Interest Expense

The following table presents the components of interest expense incurred on the Notes and on borrowings under our Credit Agreement for the three and nine months ended October 31, 2014 and 2013:

	Three Months Ended October 31,				Nine Months Ended October 31,
(in thousands)	2014		2013		2014		2013
1.50% Convertible Senior Notes:
Interest expense at 1.50% coupon rate	$	1,500	$	—	$	2,217	$	—
Amortization of debt discount	2,417		—		3,565		—
Amortization of deferred debt issuance costs	335		—		442		—
Total - 1.50% Convertible Senior Notes	$	4,252	$	—	$	6,224	$	—
Borrowings under Credit Agreement:
Interest expense at contractual rates	$	3,677	$	6,628	$	19,559	$	19,659
Amortization of debt discounts	14		115		102		341
Amortization of deferred debt issuance costs	538		529		1,895		1,627
Total - Borrowings under Credit Agreement	$	4,229	$	7,272	$	21,556	$	21,627

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SUPPLEMENTAL CONDENSED CONSOLIDATED FINANCIAL STATEMENT INFORMATION

9 Months Ended

Oct. 31, 2014

Organization, Consolidation and Presentation of Financial Statements [Abstract]

SUPPLEMENTAL CONDENSED CONSOLIDATED FINANCIAL STATEMENT INFORMATION

SUPPLEMENTAL CONDENSED CONSOLIDATED FINANCIAL STATEMENT INFORMATION

Condensed Consolidated Balance Sheets

Inventories consisted of the following as of October 31, 2014 and January 31, 2014: 

	October 31,		January 31,
(in thousands)	2014		2014
Raw materials	$	7,966	$	3,190
Work-in-process	11,865		5,645
Finished goods	1,671		1,858
Total inventories	$	21,502	$	10,693

Condensed Consolidated Statements of Operations

Other income (expense), net consisted of the following for the three and nine months ended October 31, 2014 and 2013: 

	Three Months Ended October 31,						Nine Months Ended October 31,
(in thousands)	2014			2013			2014			2013
Foreign currency (losses) gains, net	$	(1,949	)	$	702		$	(1,035	)	$	(2,504	)
Gains (losses) on derivative financial instruments, net	1,562			(721		)	1,666			(45		)
Other, net	554			(627		)	635			(2,464		)
Total other income (expense), net	$	167		$	(646	)	$	1,266		$	(5,013	)

Condensed Consolidated Statements of Cash Flows

The following table provides supplemental information regarding our condensed consolidated cash flows for the nine months ended October 31, 2014 and 2013: 

	Nine Months Ended October 31,
(in thousands)	2014		2013
Cash paid for interest	$	22,735	$	17,724
Cash payments (refunds) of income taxes, net	$	10,275	$	(6,463	)
Non-cash investing and financing transactions:
Net non-cash assets acquired in CTI Merger	$	—	$	3,727
Accrued but unpaid purchases of property and equipment	$	3,625	$	1,217
Inventory transfers to property and equipment	$	314	$	658
Liabilities for contingent consideration in business combinations	$	4,947	$	4,557
Stock options exercised, proceeds received subsequent to period end	$	140	$	—
Leasehold improvements funded by lease incentive	$	2,242	$	—

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CONVERTIBLE PREFERRED STOCK

9 Months Ended

Oct. 31, 2014

Equity [Abstract]

CONVERTIBLE PREFERRED STOCK

CONVERTIBLE PREFERRED STOCK

On May 25, 2007, we entered into an agreement with CTI whereby CTI purchased 293,000 shares of our Series A Convertible Preferred Stock for an aggregate cash purchase price of $293.0 million.

On February 4, 2013, the CTI Merger was completed and eliminated CTI's majority ownership and control of us. Each of the 293,000 outstanding shares of Series A Convertible Preferred Stock, all of which was held by CTI, was canceled upon completion of the CTI Merger. Upon cancellation of these 293,000 shares of Series A Convertible Preferred Stock, our authorized shares of preferred stock were reduced from 2,500,000 shares to 2,207,000 shares, in accordance with the certificate of designation for the Series A Convertible Preferred Stock.

Further details regarding the CTI Merger appear in Note 14, "Merger with CTI".

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LONG-TERM DEBT LONG-TERM DEBT - EARLY PARTIAL RETIREMENT OF TERM LOANS (Details) (USD $)	0 Months Ended	3 Months Ended		9 Months Ended		0 Months Ended	3 Months Ended			0 Months Ended	6 Months Ended
	Jun. 18, 2014	Oct. 31, 2014	Oct. 31, 2013	Oct. 31, 2014	Oct. 31, 2013	Jun. 18, 2014 Combined February 2014 and March 2014 Term Loans	Jul. 31, 2014 Combined February 2014 and March 2014 Term Loans	Jul. 31, 2014 March 2014 Term Loans	Jul. 31, 2014 February 2014 Term Loans	Jun. 18, 2014 2013 Revolving Line of Credit	Jul. 31, 2014 March 2013 Term Loans
Debt Instrument
Common stock issued in public offering (in shares)	5,750,000
Repayments of Long-Term Debt						$ 530,000,000				$ 106,000,000
Write Off of Deferred Debt Issuance Costs Resulting From Early Debt Payment								1,300,000	3,800,000
Write Off of Debt Discount Resulting From Early Debt Payment									400,000
Losses on early retirements of debt		$ 0	$ 0	$ (12,546,000)	$ (9,879,000)		$ 5,500,000				$ 7,100,000

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STOCK-BASED COMPENSATION STOCK-BASED COMPENSATION - PHANTOM STOCK (Details) (Phantom stock units, USD $) In Thousands, unless otherwise specified	9 Months Ended
	Oct. 31, 2013	Oct. 31, 2014
Phantom stock units
Stock-Based Compensation Plans
Total accrued liability	$ 0	$ 0
Total cash payments made upon vesting of phantom stock	$ 0

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LONG-TERM DEBT LONG-TERM DEBT - INTEREST EXPENSE (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended
	Oct. 31, 2014	Oct. 31, 2013	Oct. 31, 2014	Oct. 31, 2013
1.50% Convertible Senior Notes
Debt Instrument
Interest Expense at Coupon or Contractual Rate	$ 1,500	$ 0	$ 2,217	$ 0
Amortization of Debt Discount	2,417	0	3,565	0
Amortization of Deferred Debt Issuance Costs	335	0	442	0
Total Interest Expense	4,252	0	6,224	0
Credit Agreement
Debt Instrument
Interest Expense at Coupon or Contractual Rate	3,677	6,628	19,559	19,659
Amortization of Debt Discount	14	115	102	341
Amortization of Deferred Debt Issuance Costs	538	529	1,895	1,627
Total Interest Expense	$ 4,229	$ 7,272	$ 21,556	$ 21,627

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LONG-TERM DEBT LONG-TERM DEBT - DEBT FEES (Details) (USD $)	3 Months Ended		9 Months Ended				6 Months Ended				12 Months Ended					9 Months Ended
	Oct. 31, 2014	Oct. 31, 2013	Oct. 31, 2014	Oct. 31, 2013	Oct. 31, 2014 February 2014 Term Loans	Jan. 31, 2014 February 2014 Term Loans	Jul. 31, 2014 March 2013 Term Loans	Mar. 07, 2014 March 2013 Term Loans	Mar. 06, 2013 March 2013 Term Loans	Mar. 06, 2013 2011 Credit Agreement	Jan. 31, 2014 2011 Credit Agreement April 2011 Term Loans	Mar. 06, 2013 2011 Credit Agreement April 2011 Term Loans	Mar. 06, 2013 2011 Credit Agreement 2011 Revolving Line of Credit	Mar. 06, 2013 2013 Amended Credit Agreement	Mar. 06, 2013 2013 Amended Credit Agreement March 2013 Term Loans	Oct. 31, 2014 2013 Amended Credit Agreement 2013 Revolving Line of Credit	Mar. 06, 2013 2013 Amended Credit Agreement 2013 Revolving Line of Credit	Mar. 07, 2014 2013 Amended Credit Agreement - 2014 Amendments March 2014 Term Loans	Feb. 03, 2014 2013 Amended Credit Agreement - 2014 Amendments February 2014 Term Loans	Jun. 18, 2014 2013 Amended Credit Agreement - 2014 Amendments 2013 Revolving Line of Credit
Debt Instrument
Unamortized deferred costs								$ 4,300,000		$ 11,000,000		$ 7,500,000	$ 3,500,000	$ 7,500,000	$ 5,000,000		$ 2,500,000	$ 2,400,000	$ 7,100,000	$ 700,000
Unamortized debt discount					289,000	0		2,800,000	3,300,000			2,200,000							800,000
Losses on early retirements of debt	$ 0	$ 0	$ (12,546,000)	$ (9,879,000)			$ 7,100,000				$ 9,700,000
Commitment fee on undrawn portion (as a percent)																0.50%

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COMMITMENTS AND CONTINGENCIES COMMITMENTS AND CONTINGENCIES - LITIGATION (Details) (USD $) In Millions, unless otherwise specified	9 Months Ended
	Oct. 31, 2014
Loss Contingency, Information about Litigation Matters [Abstract]
Loss Contingency, Damages Sought, Value	$ 150

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DERIVATIVE FINANCIAL INSTRUMENTS (Tables)

9 Months Ended

Oct. 31, 2014

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Schedule of fair values of derivative financial instruments

The fair values of our derivative financial instruments as of October 31, 2014 and January 31, 2014 were as follows: 

	October 31, 2014
	Assets			Liabilities
(in thousands)	Balance Sheet Classification	Fair Value		Balance Sheet Classification	Fair Value
Derivative financial instruments designated as hedging instruments:
Foreign currency forward contracts	—	$	—	Accrued expenses and other liabilities	$	7,530
Total derivative financial instruments designated as hedging instruments		$	—		$	7,530
Derivative financial instruments not designated as hedging instruments:
Foreign currency forward contracts	Prepaid expenses and other current assets	$	1,886	—	$	—
Total derivative financial instruments not designated as hedging instruments		$	1,886		$	—

	January 31, 2014
	Assets			Liabilities
(in thousands)	Balance Sheet Classification	Fair Value		Balance Sheet Classification	Fair Value
Derivative financial instruments designated as hedging instruments:
Foreign currency forward contracts	Prepaid expenses and other current assets	$	2,245	Accrued expenses and other liabilities	$	769
Total derivative financial instruments designated as hedging instruments		$	2,245		$	769
Derivative financial instruments not designated as hedging instruments:
Foreign currency forward contracts	Prepaid expenses and other current assets	$	221	Accrued expenses and other liabilities	$	77
Total derivative financial instruments not designated as hedging instruments		$	221		$	77

Schedule of the effects of derivative financial instruments designated as cash flow hedging instruments

The effects of derivative financial instruments designated as cash flow hedging instruments as of October 31, 2014 and January 31, 2014, and for the three and nine months ended October 31, 2014 and 2013 were as follows:

	Net (Losses) Gains Recognized in Accumulated Other Comprehensive  Income (Loss)					Classification of Net (Losses) Gains Reclassified from Other Comprehensive Loss into the Condensed Consolidated Statements of Operations	Net (Losses) Gains Reclassified from Other Comprehensive  Income (Loss) into the Condensed Consolidated Statements of Operations
	October 31,			January 31,			Three Months Ended October 31,					Nine Months Ended October 31,
(in thousands)	2014			2014			2014			2013		2014		2013
Foreign currency forward contracts	$	(6,722	)	$	1,485	Operating Expenses	$	(876	)	$	1,984	$	993	$	4,348

Schedule of gains (losses) recognized on derivative financial instruments not designated as hedging instruments

Gains (losses) recognized on derivative financial instruments not designated as hedging instruments in our condensed consolidated statements of operations for the three and nine months endedOctober 31, 2014 and 2013 were as follows:

	Classification in Condensed Consolidated Statements of Operations	Three Months Ended October 31,					Nine Months Ended October 31,
(in thousands)		2014		2013			2014		2013
Foreign currency forward contracts	Other income (expense), net	$	1,562	$	(721	)	1,665		(44		)
Total		$	1,562	$	(721	)	$	1,665	$	(44	)

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INTANGIBLE ASSETS AND GOODWILL INTANGIBLE ASSETS AND GOODWILL - INTANGIBLE ASSETS BY REPORTABLE SEGMENT (Details) (USD $) In Thousands, unless otherwise specified	Oct. 31, 2014	Jan. 31, 2014
Finite-Lived Intangible Assets [Line Items]
Intangible assets, net	$ 336,297	$ 132,847
Enterprise Intelligence
Finite-Lived Intangible Assets [Line Items]
Intangible assets, net	285,037	115,928
Communications Intelligence
Finite-Lived Intangible Assets [Line Items]
Intangible assets, net	50,050	14,856
Video Intelligence
Finite-Lived Intangible Assets [Line Items]
Intangible assets, net	$ 1,210	$ 2,063

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MERGER WITH CTI

9 Months Ended

Oct. 31, 2014

MERGER AGREEMENT WITH CTI [Abstract]

MERGER WITH CTI

MERGER WITH CTI

Prior to February 4, 2013, Comverse Technology, Inc. ("CTI") beneficially owned a majority of our common stock (assuming the conversion of CTI’s holdings of our Series A Convertible Preferred Stock into common stock) and held a majority of the voting power of our common stock. As of January 31, 2013, shortly before the CTI Merger (as described below), CTI’s beneficial ownership position in us was approximately 53.5%.

On August 12, 2012, we entered into an agreement and plan of merger agreement with CTI (the "CTI Merger Agreement"), providing for the merger of CTI with and into our new, wholly owned subsidiary (the "CTI Merger"). The CTI Merger was completed on February 4, 2013. The CTI Merger eliminated CTI's majority ownership and control of us.

At the closing of the CTI Merger, approximately 28.6 million newly issued shares of our common stock were exchanged for approximately 220.0 million issued and outstanding shares of CTI common stock. In addition, the 16.3 million shares of our common stock and all shares of our Series A Convertible Preferred Stock held by CTI at the time of the CTI Merger were canceled.

Holders of shares of our common stock immediately prior to the completion of the CTI Merger, other than CTI, continued to own their existing shares, which were not affected by the CTI Merger.

Prior to the CTI Merger, CTI had distributed to its shareholders or otherwise disposed of substantially all of its assets, other than its interests in us, including the distribution of all of the outstanding common stock of its subsidiary, Comverse, Inc. ("Comverse") to its shareholders (the “Comverse share distribution”). As a result, at the time of the CTI Merger, the net assets of CTI consisted primarily of its controlling equity interests in Verint, as well as certain residual cash and cash equivalents and other sundry net assets. In addition, CTI had net operating loss ("NOL") carryforwards for income tax reporting purposes, and other tax attributes. No CTI employees, operations or business processes moved to the combined company in the CTI Merger. As a result, our existing net assets and operations represented the vast majority of the net assets and all of the operations of the combined company.

In connection with the Comverse share distribution, CTI and Comverse entered into several agreements to govern certain ongoing relationships between CTI and Comverse after the Comverse share distribution and to provide for an orderly transition.

In one of these agreements, Comverse agreed to indemnify CTI and its affiliates (including Verint following the CTI Merger) against certain losses arising as a result of the CTI Merger and the Comverse share distribution. Certain of Comverse's indemnification obligations are capped at $25.0 million and certain obligations are uncapped. Pursuant to this agreement, at the closing of the CTI Merger, CTI placed $25.0 million into an escrow account to support indemnification claims to the extent made against Comverse by CTI and its affiliates (including Verint after the CTI Merger). The balance of such escrow account was released to Comverse on August 4, 2014.

Condensed Consolidated Financial Statement Impact

For financial reporting purposes, the CTI Merger was accounted for as our acquisition of CTI in a combination of entities under common control. We are the continuing reporting entity. As a result, upon completion of the CTI Merger on February 4, 2013, our consolidated stockholders' equity was adjusted to reflect the $285.5 million carrying value of our Series A Convertible Preferred Stock, all of which was held by CTI, and the $14.1 million carrying value of CTI's net assets (other than its equity interests in us), as increases to our additional paid-in capital. Prior to the CTI Merger, our Series A Convertible Preferred Stock had been classified as mezzanine equity on our consolidated balance sheet.

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NET INCOME PER COMMON SHARE ATTRIBUTABLE TO VERINT SYSTEMS INC. (Tables)

9 Months Ended

Oct. 31, 2014

Earnings Per Share [Abstract]

Schedule of calculation of basic and diluted 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 nine months endedOctober 31, 2014 and 2013:

	Three Months Ended October 31,				Nine Months Ended October 31,
(in thousands, except per share amounts)	2014		2013		2014		2013
Net income	$	11,473	$	24,054	$	29,912	$	34,622
Net income attributable to noncontrolling interest	803		1,567		3,564		3,752
Net income attributable to Verint Systems Inc.	10,670		22,487		26,348		30,870
Dividends on preferred stock	—		—		—		(174		)
Net income attributable to Verint Systems Inc. for basic net income per common share	10,670		22,487		26,348		30,696
Dilutive effect of dividends on preferred stock	—		—		—		—
Net income attributable to Verint Systems Inc. for diluted net income per common share	$	10,670	$	22,487	$	26,348	$	30,696
Weighted-average shares outstanding:
Basic	60,644		53,374		57,222		52,781
Dilutive effect of employee equity award plans	848		572		1,110		780
Dilutive effect of 1.50% convertible senior notes	—		—		—		—
Dilutive effect of warrants	—		—		—		—
Dilutive effect of preferred stock	—		—		—		—
Diluted	61,492		53,946		58,332		53,561
Net income per common share attributable to Verint Systems Inc.:
Basic	$	0.18	$	0.42	$	0.46	$	0.58
Diluted	$	0.17	$	0.42	$	0.45	$	0.57

Schedule of anti-dilutive securities

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 October 31,		Nine Months Ended October 31,
(in thousands)	2014	2013	2014	2013
Weighted average potential common shares excluded from calculation:
Stock options and restricted stock-based awards	464	343	403	263
1.50% convertible senior notes	6,205	—	3,091	—
Warrants	6,205	—	3,091	—
Series A Convertible Preferred Stock	—	—	—	164

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BUSINESS COMBINATIONS BUSINESS COMBINATIONS - PRIOR PERIODS (Details) (USD $)	3 Months Ended		9 Months Ended
	Oct. 31, 2014 Series of Individually Immaterial Business Acquisitions [Member]	Oct. 31, 2013 Series of Individually Immaterial Business Acquisitions [Member]	Oct. 31, 2014 Series of Individually Immaterial Business Acquisitions [Member]	Oct. 31, 2013 Series of Individually Immaterial Business Acquisitions [Member]	Oct. 31, 2014 Communications Intelligence Business Acquisition, August 2011 [Member]	Jan. 31, 2014 Communications Intelligence Business Acquisition, August 2011 [Member]
Business Acquisition
Changes in fair values, recorded in operating expenses	$ (300,000)	$ 1,900,000	$ (500,000)	$ 1,600,000
Payments of contingent consideration	1,600,000	900,000	8,500,000	17,100,000
Business Acquisition, Current and Non-Current Liabilities, Preacquisition Contingency Accrual					2,900,000	3,400,000
Business Combinations, Indemnification Assets, Current Portion					$ 1,800,000	$ 2,300,000

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NET INCOME PER COMMON SHARE ATTRIBUTABLE TO VERINT SYSTEMS INC. NET INCOME PER COMMON SHARE ATTRIBUTABLE TO VERINT SYSTEMS INC. - OTHER DETAILS (Details) (USD $)	Oct. 31, 2014
Earnings Per Share [Abstract]
1.50% Convertible Notes - Conversion Price (in dollars per share)	$ 64.46
Exercise Price of Warrants (in dollars per share)	75.00

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Condensed Consolidated Statements of Comprehensive Income (Loss) (USD $) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended
	Oct. 31, 2014	Oct. 31, 2013	Oct. 31, 2014	Oct. 31, 2013
Net income	$ 11,473	$ 24,054	$ 29,912	$ 34,622
Other comprehensive income (loss), net of reclassification adjustments:
Foreign currency translation adjustments	(28,355)	12,232	(13,363)	1,537
Net unrealized gains on available-for-sale securities	0	125	13	3
Net unrealized (losses) gains on derivative financial instruments designated as hedges	(9,632)	(870)	(9,047)	283
Benefit from income taxes on net unrealized (losses) gains on derivative financial instruments designated as hedges	998	96	840	31
Other comprehensive (loss) income	(36,989)	11,583	(21,557)	1,854
Comprehensive (loss) income	(25,516)	35,637	8,355	36,476
Comprehensive income attributable to noncontrolling interest	627	1,618	3,491	3,632
Comprehensive (loss) income attributable to Verint Systems Inc.	$ (26,143)	$ 34,019	$ 4,864	$ 32,844

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MERGER WITH CTI MERGER WITH CTI - OTHER DISCLOSURES (Details) (USD $) In Millions, unless otherwise specified	Feb. 04, 2013 CTI Merger	Jan. 31, 2013 Comverse
Business Acquisition
Beneficial ownership position held by CTI (as a percent)		53.50%
Indemnification Obligations	$ 25.0
Amount in escrow account to support indemnification claims	$ 25.0

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CASH, CASH EQUIVALENTS AND SHORT-TERM INVESTMENTS CASH, CASH EQUIVALENTS AND SHORT-TERM INVESTMENTS

9 Months Ended

Oct. 31, 2014

Cash, Cash Equivalents, and Short-term Investments [Abstract]

Cash, Cash Equivalents and Short-term Investments

CASH, CASH EQUIVALENTS AND SHORT-TERM INVESTMENTS

The following tables summarize our cash, cash equivalents and short-term investments as of October 31, 2014 and January 31, 2014:

	October 31, 2014
(in thousands)	Cost Basis		Gross Unrealized Gains		Gross Unrealized Losses		Estimated Fair Value
Cash and cash equivalents:
Cash and bank time deposits	$	189,142	$	—	$	—	$	189,142
Money market funds	194		—		—		194
Commercial paper	2,999		—		—		2,999
Total cash and cash equivalents	$	192,335	$	—	$	—	$	192,335
Short-term investments:
Commercial paper and corporate debt securities (available-for-sale)	$	13,774	$	22	$	—	$	13,796
Bank time deposits	26,340		—		—		26,340
Total short-term investments	$	40,114	$	22	$	—	$	40,136

	January 31, 2014
(in thousands)	Cost Basis		Gross Unrealized Gains		Gross Unrealized Losses		Estimated Fair Value
Cash and cash equivalents:
Cash and bank time deposits	$	314,604	$	—	$	—	$	314,604
Money market funds	14,023		—		—		14,023
Commercial paper	49,986		5		—		49,991
Total cash and cash equivalents	$	378,613	$	5	$	—	$	378,618
Short-term investments:
Commercial paper and corporate debt securities (available-for-sale)	$	9,402	$	4	$	—	$	9,406
Bank time deposits	22,643		—		—		22,643
Total short-term investments	$	32,045	$	4	$	—	$	32,049

Bank time deposits which are reported within short-term investments consist of deposits held outside of the U.S. with maturities of greater than three months, or without specified maturity dates which we intend to hold for periods in excess of three months. All other bank deposits are included within cash and cash equivalents.

As of October 31, 2014 and January 31, 2014, all of our available-for-sale investments had contractual maturities of less than one year. We report our available-for-sale securities at fair value, based on quoted market prices or other readily available market information. Unrealized gains and losses, net of applicable income taxes, are included in accumulated other comprehensive income (loss) within stockholders’ equity on our condensed consolidated balance sheets. Realized gains or losses, if applicable, are recorded in other income (expense), net in our condensed consolidated statement of operations, using the specific identification method. Gains and losses on sales of available-for-sale securities during the nine months ended October 31, 2014 and 2013 were not significant.

During the nine months ended October 31, 2014 and 2013, proceeds from sales and maturities of available-for-sale securities were $11.4 million and $70.0 million, respectively.

We periodically review our investment portfolios to determine if any investment is other-than-temporarily impaired due to changes in credit risk or other potential valuation concerns. We believe that the investments we held at October 31, 2014 were not other-than-temporarily impaired. We held no available-for-sale securities with unrealized losses at October 31, 2014. We do not intend to sell our available-for-sale securities and it is not more likely than not that we will be required to sell them before recovery at par, which may be at maturity.

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LONG-TERM DEBT LONG-TERM DEBT - CREDIT AGREEMENT (2011 AGREEMENT) (Details) (USD $)	Apr. 30, 2011
April 2011 Term Loans
Debt Instrument
Long-term Debt, Gross	$ 600,000,000
2011 Revolving Line of Credit
Debt Instrument
Line of Credit Facility, Maximum Borrowing Capacity	170,000,000
2011 Credit Agreement
Debt Instrument
Line of Credit Facility, Maximum Borrowing Capacity	770,000,000
Line of Credit Facility, Additional Borrowing Capacity	300,000,000
Deferred debt issuance costs, gross	$ 14,800,000

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STOCK-BASED COMPENSATION STOCK-BASED COMPENSATION - STOCK-BASED COMPENSATION EXPENSE (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended
	Oct. 31, 2014	Oct. 31, 2013	Oct. 31, 2014	Oct. 31, 2013
Stock-Based Compensation Plans
Stock-based compensation	$ 12,626	$ 9,729	$ 38,553	$ 25,154
Equity Classified Awards
Stock-Based Compensation Plans
Stock-based compensation	11,942	8,318	35,702	22,304
Stock Bonus Program
Stock-Based Compensation Plans
Stock-based compensation	0	0	(654)	(298)
Equity-Settled Awards
Stock-Based Compensation Plans
Stock-based compensation	11,942	8,318	35,048	22,006
Other Liability-Classified Awards
Stock-Based Compensation Plans
Stock-based compensation	684	1,411	3,505	3,148
Restricted stock units and restricted stock awards
Stock-Based Compensation Plans
Stock-based compensation	11,942	8,335	35,373	21,727
Stock options
Stock-Based Compensation Plans
Stock-based compensation	0	45	15	152
Phantom stock units
Stock-Based Compensation Plans
Stock-based compensation	40	23	120	87
Stock Bonus Program
Stock-Based Compensation Plans
Stock-based compensation	644	1,326	3,045	3,188
Cost of revenue - product
Stock-Based Compensation Plans
Stock-based compensation	224	243	675	572
Cost of revenue - service and support
Stock-Based Compensation Plans
Stock-based compensation	941	458	2,816	1,208
Research and development, net
Stock-Based Compensation Plans
Stock-based compensation	1,271	890	3,881	2,432
Selling, general and administrative
Stock-Based Compensation Plans
Stock-based compensation	$ 10,190	$ 8,138	$ 31,181	$ 20,942

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SUPPLEMENTAL CONDENSED CONSOLIDATED FINANCIAL STATEMENT INFORMATION SUPPLEMENTAL CONDENSED CONSOLIDATED FINANCIAL STATEMENT INFORMATION - CASH FLOWS (Details) (USD $) In Thousands, unless otherwise specified	9 Months Ended
	Oct. 31, 2014	Oct. 31, 2013
Supplemental information regarding condensed consolidated cash flows
Cash paid for interest	$ 22,735	$ 17,724
Cash payments (refunds) of income taxes, net	10,275	(6,463)
Non-cash investing and financing transactions:
Net non-cash assets acquired in CTI Merger	0	3,727
Accrued but unpaid purchases of property and equipment	3,625	1,217
Inventory transfers to property and equipment	314	658
Liabilities for contingent consideration in business combinations	4,947	4,557
Stock options exercised, proceeds received subsequent to period end	140	0
Leasehold improvements funded by lease incentive	$ 2,242	$ 0

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CASH, CASH EQUIVALENTS AND SHORT-TERM INVESTMENTS CASH, CASH EQUIVALENTS AND SHORT-TERM INVESTMENTS (Tables)

9 Months Ended

Oct. 31, 2014

Cash, Cash Equivalents, and Short-term Investments [Abstract]

Schedule of Cash, Cash Equivalents and Short-term Investments [Table Text Block]

The following tables summarize our cash, cash equivalents and short-term investments as of October 31, 2014 and January 31, 2014:

	October 31, 2014
(in thousands)	Cost Basis		Gross Unrealized Gains		Gross Unrealized Losses		Estimated Fair Value
Cash and cash equivalents:
Cash and bank time deposits	$	189,142	$	—	$	—	$	189,142
Money market funds	194		—		—		194
Commercial paper	2,999		—		—		2,999
Total cash and cash equivalents	$	192,335	$	—	$	—	$	192,335
Short-term investments:
Commercial paper and corporate debt securities (available-for-sale)	$	13,774	$	22	$	—	$	13,796
Bank time deposits	26,340		—		—		26,340
Total short-term investments	$	40,114	$	22	$	—	$	40,136

	January 31, 2014
(in thousands)	Cost Basis		Gross Unrealized Gains		Gross Unrealized Losses		Estimated Fair Value
Cash and cash equivalents:
Cash and bank time deposits	$	314,604	$	—	$	—	$	314,604
Money market funds	14,023		—		—		14,023
Commercial paper	49,986		5		—		49,991
Total cash and cash equivalents	$	378,613	$	5	$	—	$	378,618
Short-term investments:
Commercial paper and corporate debt securities (available-for-sale)	$	9,402	$	4	$	—	$	9,406
Bank time deposits	22,643		—		—		22,643
Total short-term investments	$	32,045	$	4	$	—	$	32,049

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CONVERTIBLE PREFERRED STOCK (Details) (Series A Preferred Stock [Member], USD $) In Millions, except Share data, unless otherwise specified	Feb. 04, 2013	Jan. 31, 2013	May 25, 2007 Comverse
CONVERTIBLE PREFERRED STOCK
Series A convertible preferred stock, issued (in shares)			293,000
Aggregate purchase price			$ 293.0
Preferred Stock, authorized (in shares)	2,207,000	2,500,000

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BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES (Details)	9 Months Ended
	Oct. 31, 2014
Less than
Maximum ownership interest in cost method investments (as a percent)	20.00%
Joint venture, variable interest entity in which entity is primary beneficiary
Equity interest in a joint venture (as a percent)	50.00%

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STOCK-BASED COMPENSATION

9 Months Ended

Oct. 31, 2014

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

STOCK-BASED COMPENSATION

STOCK-BASED COMPENSATION

We recognized stock-based compensation expense in the following line items on the condensed consolidated statements of operations for the three and nine months ended October 31, 2014 and 2013:

	Three Months Ended October 31,				Nine Months Ended October 31,
(in thousands)	2014		2013		2014		2013
Component of condensed consolidated statements of operations:
Cost of revenue - product	$	224	$	243	$	675	$	572
Cost of revenue - service and support	941		458		2,816		1,208
Research and development, net	1,271		890		3,881		2,432
Selling, general and administrative	10,190		8,138		31,181		20,942
Stock-based compensation expense	$	12,626	$	9,729	$	38,553	$	25,154

The following table summarizes stock-based compensation expense by type of award for the three and nine months ended October 31, 2014 and 2013:

	Three Months Ended October 31,				Nine Months Ended October 31,
(in thousands)	2014		2013		2014		2013
Component of stock-based compensation expense:
Restricted stock units and restricted stock awards	$	11,942	$	8,335	$	35,373	$	21,727
Stock options	—		45		15		152
Phantom stock units	40		23		120		87
Stock bonus program	644		1,326		3,045		3,188
Stock-based compensation expense	$	12,626	$	9,729	$	38,553	$	25,154

Total stock-based compensation expense by classification was as follows for the three and nine months ended October 31, 2014 and 2013: 

	Three Months Ended October 31,				Nine Months Ended October 31,
(in thousands)	2014		2013		2014			2013
Equity-classified awards	$	11,942	$	8,318	$	35,702		$	22,304
Stock bonus program and other reclassifications	—		—		(654		)	(298		)
Total equity-settled awards	11,942		8,318		35,048			22,006
Other liability-classified awards	684		1,411		3,505			3,148
Total stock-based compensation expense	$	12,626	$	9,729	$	38,553		$	25,154

The increase in stock-based compensation expense in the three and nine months ended October 31, 2014, compared to the corresponding prior-year periods, resulted primarily from the combination of an increase in the number of outstanding RSUs, higher expenses associated with performance-based RSU's, and a general increase in the price of our common stock, which is used to determine the grant-date fair value of an RSU.

Awards under our stock bonus program are accounted for as liability-classified awards because the obligations are based

predominantly on fixed monetary amounts that are generally known at inception of the obligation, to be settled with a variable

number of shares of our common stock. Amounts reported in the stock bonus program and other reclassifications caption in the preceding table primarily represent stock bonus expenses recognized in those periods for awards that were subsequently settled with equity during the nine months ended October 31, 2014 and 2013. Expenses associated with stock bonus program awards that remain outstanding as of October 31, 2014 and 2013 are reflected within other liability-classified awards in the preceding table. Our other liability-classified awards also include our phantom stock awards, the values of which track the market price of our common stock and are therefore subject to volatility, and which are settled with cash payments equivalent to the market value of our common stock upon vesting. Upon settlement of other liability-classified awards with equity, the current period's compensation expense associated with those awards is reported within equity-classified awards in the preceding table.

Shares Available for Grants Under Stock Plans

On July 27, 2014, our 2004 Stock Incentive Compensation Plan (the “2004 Plan”) expired in accordance with its terms and, on that date, approximately 53,000 shares of common stock remained available under the 2004 Plan as a result of termination, forfeiture or expiration of awards previously granted under the 2004 Plan. Upon expiration of the 2004 Plan, these shares became available for issuance under our 2010 Long-Term Stock Incentive Plan (the “2010 Plan”) pursuant to an amendment to the 2010 Plan which had been approved by our stockholders on June 15, 2012.

Stock Options

We have generally not granted stock options subsequent to January 31, 2006, other than in connection with several business combinations whereby stock options to purchase shares of the acquired companies were converted into stock options to purchase shares of our common stock.

The following table summarizes stock option activity and related information for the nine months ended October 31, 2014:

(in thousands, except per share data)	Stock Options		Weighted-Average Exercise Price
Options outstanding, January 31, 2014	516		$	34.60
Options exercised	(378	)	$	34.72
Options forfeited or expired	(2	)	$	31.28
Options outstanding, October 31, 2014	136		$	34.30
Options exercisable at October 31, 2014	136		$	34.30

Cash proceeds received from the exercise of stock options were $13.1 million for the nine months ended October 31, 2014.

At October 31, 2014, there was no unrecognized compensation expense associated with outstanding stock options, because all outstanding stock options were fully vested at that date.

Restricted Stock Units and Restricted Stock Awards

We periodically award restricted stock units, as well as shares of restricted stock, to our directors, officers, and other employees. These awards contain various vesting conditions and are subject to certain restrictions and forfeiture provisions prior to vesting.

The following table summarizes restricted stock unit activity and related information for the nine months ended October 31, 2014:

(in thousands, except per share data)	RSU's		Weighted-Average Grant Date Fair Value
RSU's outstanding, January 31, 2014	2,250		$	33.77
RSU's granted	1,578		$	46.19
RSU's released	(1,020	)	$	34.28
RSU's forfeited	(170	)	$	38.87
RSU's outstanding, October 31, 2014	2,638		$	40.68

Substantially all of the restricted stock units granted during the year ended January 31, 2013 included a provision which allows those awards to be settled with cash payments upon vesting, rather than with delivery of common stock, at the discretion of our board of directors. As of October 31, 2014, for such awards that remain outstanding, settlement of these awards with cash payments was not considered probable, and therefore these awards have been accounted for as equity-classified awards.

Activity presented in the table above includes shares earned and released under our stock bonus program, further details regarding which appear below under "Stock Bonus Program".

As of October 31, 2014, there was approximately $70.1 million of total unrecognized compensation expense, net of estimated forfeitures, related to unvested restricted stock units, which is expected to be recognized over a weighted-average period of 1.7 years. The unrecognized compensation expense does not include compensation expense related to shares for which a grant date has been established but the requisite service period has not begun.

Phantom Stock Units

We have periodically issued phantom stock units to certain non-officer employees that settle, or are expected to settle, with cash payments upon vesting. Like equity-settled awards, phantom stock units are awarded with vesting conditions and are subject to certain forfeiture provisions prior to vesting.

Phantom stock unit activity for the nine months ended October 31, 2014 and 2013 was not significant.

Stock Bonus Program

In September 2011, our board of directors approved a stock bonus program under which eligible employees may receive a portion of their bonuses in the form of discounted shares of our common stock. Executive officers have been eligible to participate in this program from and after the year ended January 31, 2014 to the extent that shares remained available for awards following the enrollment of all other participants. Shares awarded to executive officers with respect to the discount feature of the program are subject to a one year vesting period. Obligations under this program are accounted for as liabilities, because the obligations are based predominantly on fixed monetary amounts that are generally known at inception of the obligation, to be settled with a variable number of shares of common stock determined using a discounted average price of our common stock.

For the year ended January 31, 2014, our board of directors approved up to 150,000 shares of common stock for awards under this program and a discount of 15% (the "2014 stock bonus program"). Approximately 91,000 shares of our common stock were issued to participants under the 2014 stock bonus program during the three months ended July 31, 2014, which completed our obligations for such program year under this program.

For the year ending January 31, 2015, our board of directors has approved the issuance of up to 125,000 shares of common stock, and a discount of 15%, for awards under this program (the "2015 stock bonus program"). Awards earned under the 2015 stock bonus program are expected to be determined during the first half of the year ending January 31, 2016.

Total accrued liabilities for stock bonus programs were $3.4 million and $4.9 million as of October 31, 2014 and January 31, 2014, respectively.