Financial Data and Key Metrics Changes - Revenue for Q4 grew by 13% year-over-year to $94.5 million, with non-GAAP gross profit increasing by 17% year-over-year [11][12] - Full year revenue reached approximately $351 million, reflecting a 12% year-over-year growth, while adjusted EBITDA was $29 million, more than three times the previous fiscal year [12][13] - Non-GAAP gross margin for the year was 71%, expanding by 180 basis points year-over-year, with full year gross profit increasing by about 15% [29][30] Business Line Data and Key Metrics Changes - Total software revenue for the full year was $306.7 million, representing about 87% of total revenue, with recurring revenue at $186.6 million, or 53% of total revenue [27] - In Q4, software revenue was $37.4 million, an increase of $6 million year-over-year, while software services revenue was $45.9 million, up by $3.6 million [33][35] - Recurring revenue in Q4 reached $47.3 million, or 50% of total revenue, compared to $42.9 million in the same period last year [35] Market Data and Key Metrics Changes - Geographic revenue mix for the year was 55% from EMEA, 31% from APAC, and 14% from the Americas, with revenue from the U.S. increasing meaningfully [27][28] - Total remaining performance obligations (RPO) at the end of Q4 was $545.8 million, down by about $45 million versus last year, with short-term RPO increasing to $335.3 million [39][41] Company Strategy and Development Direction - The company aims to drive growth through new advanced capabilities, deepening customer relationships, and expanding market reach, with expectations of revenue around $392 million for fiscal '26 [17][44] - The strategy includes significant investments in the U.S. market, focusing on state, local, and federal law enforcement agencies, with plans to hire more sales personnel and increase marketing efforts [56][79] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the U.S. market despite current policy uncertainties, noting strong engagement with federal agencies and positive feedback from demonstrations [56][58] - The company anticipates continued global demand and evolving market conditions, believing that their strategy will drive sustained profitable growth [13][18] Other Important Information - The company ended the year with a strong balance sheet, cash position of $113.3 million, and no debt, with cash flow from operations at approximately $47 million [31][32] - The company initiated a stock repurchase program, buying about 586,000 shares for approximately $5.3 million [32] Q&A Session Summary Question: What are the demand trends in the U.S. market? - Management believes the U.S. presents a good opportunity, with increased investments to improve market reach and positive engagement with federal agencies [56][58] Question: Are sales cycles extending due to current market conditions? - Sales cycles in the U.S. are longer due to being in penetration mode, but management does not expect current unrest to negatively impact efforts [61][62] Question: What drove the decline in billings year-over-year? - Billings for Q4 were $95 million, consistent with expectations, and management noted that Q3 was unusually high [64][66] Question: What are the U.S. demand drivers compared to international markets? - Demand drivers globally remain healthy, with commonality in criminal activities, but specific U.S. focus includes border control and organized crime [74][75] Question: What investments are being made to accelerate sales cycles in the U.S.? - The company is investing significantly in local sales teams, marketing efforts, and expanding partnerships to enhance market penetration [79][81] Question: What should be expected regarding long-term growth sustainability? - Management indicated that the fundamentals of the business are healthy, with expectations for continued growth and improved profitability [85][86]

Revenue Sources and Economic Risks - A significant portion of the company's revenue is derived from government contracts, which exposes it to risks associated with government procurement processes and geopolitical changes [43]. - The company anticipates that government contracts will remain a major revenue source, but macroeconomic conditions may lead to reduced spending and delayed projects [41]. - The company is subject to risks from macroeconomic changes, including inflation and interest rates, which could impact government budgets and spending on technology solutions [41][50]. - The ongoing conflict has led to a downgrade in Israel's credit rating by agencies such as Moody's, S&P Global, and Fitch, indicating a deterioration in economic standing [69]. - Trade policies, including tariffs, could disrupt the global economy and negatively impact government spending on the company's solutions [51][52]. Operational Challenges and Supply Chain Issues - Ongoing global supply chain disruptions have led to delays in supplier deliveries and increased costs, which may adversely affect the company's financial results [61]. - The company faces risks from geopolitical tensions, particularly related to the ongoing conflict involving Israel, which could impact operations and revenue [63][66]. - The company may abstain from onboarding new customers or renewing licenses to mitigate risks related to human rights violations, which could impact market share [102]. - Reliance on third-party suppliers and partners poses risks, as disruptions in their services could negatively impact sales and financial results [125]. Technology and Product Development - The introduction of AI and GenAI into solutions is critical for competitiveness, but challenges in integration may delay product development [81]. - The market for AI and machine learning technologies is rapidly evolving, and failure to develop these technologies could adversely affect the company's business [89]. - Compliance with evolving regulatory frameworks for AI, such as the EU AI Act, may pose challenges and significant costs [90]. - The shift towards a software-centric product mix is crucial for profitability, moving away from professional services and hardware resales [116]. Human Resources and Talent Management - Competition for qualified personnel in the technology sector is intense, particularly in regions where the company operates, leading to potential recruitment challenges [110]. - High turnover rates among product and development personnel could hinder the company's ability to execute on new product development and strategic opportunities [106]. - The company has experienced wage inflation in high-tech markets, which may increase recruitment costs and adversely affect profitability [111]. - Share price declines may reduce employee motivation and increase the risk of attrition, leading to higher salary costs to attract qualified personnel [112]. Regulatory and Compliance Risks - Regulatory changes may affect the demand for the company's products, necessitating adjustments to product design and functionality [55]. - The company is subject to strict requirements under the Israeli Privacy Protection Law, with potential monetary sanctions for violations reaching millions of NIS [142]. - Compliance with evolving regulatory requirements may be complex and costly, impacting the company's ability to operate effectively across jurisdictions [149]. - Regulatory risks related to data privacy laws, such as the EU GDPR and CCPA, may lead to increased compliance costs and potential liabilities [140]. Financial Position and Capital Management - The company has two revolving credit facilities valid until January 2026, providing a total borrowing capacity of up to $65.0 million [174]. - The company may require substantial additional financing to operate its business and execute its growth strategy, which might not be available on commercially reasonable terms [178]. - A recently announced $20 million share repurchase program will utilize a portion of the company's available capital, potentially reducing funds for other business purposes [178]. - The company is subject to covenants in its debt agreements, which could limit its operational flexibility and increase vulnerability to economic changes [177]. Reputation and Ethical Considerations - The company has experienced reputational harm due to allegations regarding the misuse of its solutions by countries perceived as violating human rights [91]. - The company has faced heightened scrutiny and criticism regarding human rights allegations related to its solutions, which has adversely affected its reputation [93]. - In 2021, Meta Platforms, Inc. publicly removed accounts associated with the company, alleging misuse of its solutions, impacting the company's reputation [92]. - Responding to activist shareholders may incur substantial costs and disrupt operations, potentially affecting the company's strategic execution [226]. Strategic Growth and Market Expansion - The company plans to continue investing in growth initiatives, including new markets, products, and technologies, with a focus on research and development to maintain competitive positioning [115]. - Expansion efforts into the United States are part of the growth strategy, but success is not guaranteed and could materially affect business outcomes [119]. - Acquisitions and strategic investments may present challenges, including integration difficulties and potential dilution of shareholder value [120]. - The company may pursue divestitures as part of its optimization strategy, with risks of losses if disposed businesses are sold at lower valuations [122].

| --- | --- | --- | --- | --- | |--------------------------------|-------|-------|-------|-------| | | | | | | | | | | | | | Q3 FYE25 Results | | | | | | NASDAQ: CGNT December 11, 2024 | | | | | Disclaimers Forward Looking Statements This presentation contains "forward-looking statements," including statements regarding expectations, predictions, views, opportunities, plans, strategies, beliefs, and statements of similar effect relating to Cognyte Software Ltd. These forward-looking statements are not guara ...

Financial Data and Key Metrics Changes - Revenue for Q3 2025 grew by 12% year-over-year to $89 million, with non-GAAP gross profit also increasing by 12% year-over-year [11][36] - Adjusted EBITDA for the quarter was approximately $7 million, representing a 42% year-over-year growth [12] - Non-GAAP operating income increased by 180% year-over-year to $3.4 million, while adjusted EBITDA grew by 42% year-over-year to $6.6 million [42][51] Business Line Data and Key Metrics Changes - Software revenue was $30 million, slightly up year-over-year, with software service revenue increasing by 3.9% to $45.3 million [37] - Total software revenue, including software and software services, was $75.3 million, representing about 85% of total revenue [37] - Recurring revenue was $46.9 million, or 53% of total revenue, compared to $42 million in the same period last year [38] Market Data and Key Metrics Changes - The company signed nine new customers in Q3, including five contracts valued at over $1 million each and one significant contract worth $5 million [17] - The North American market showed steady progress, with a follow-on order valued at over $2 million from a law enforcement agency [18][19] Company Strategy and Development Direction - The growth strategy focuses on deepening engagements with existing customers and expanding the customer base [13] - The company aims to leverage advanced analytics and AI-powered solutions to address the growing volume and complexity of data [14][28] - The company raised its full-year revenue outlook to approximately $349 million, representing about 11% year-over-year growth [34][58] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the business due to solid visibility and sustained demand, leading to an increase in the full-year outlook [11][34] - The company anticipates continued growth driven by significant deal wins and the evolving market landscape [12][34] - Management highlighted the importance of advanced technology in addressing complex security challenges faced by customers [28][32] Other Important Information - The company reported a strong cash position of $107.3 million, with no debt, and generated $12.3 million in cash from operations during Q3 [46] - A share buyback program of up to $20 million was approved by the board, reaffirming the commitment to delivering value to shareholders [60] Q&A Session Summary Question: Can you talk about the profile of large customers signing $10 million and $20 million deals? - Management noted that the complexity faced by customers is similar across the market, with demand driven by the need for better data analysis capabilities [68][70] Question: What are you hearing from customers regarding budgets? - Management indicated that more customers are budgeting with higher amounts, reflecting healthy demand and a willingness to invest in expansions and upgrades [73][76] Question: Can you provide guidance for fiscal 2026? - Management stated that they are well-positioned for future growth, expecting revenue and gross profit to grow faster than operating expenses [88][92] Question: Update on expanding in the US market? - Management confirmed ongoing efforts to expand in North America, with positive feedback from existing and potential customers [94][97]

Group 1 - Cognyte Software Ltd. reported quarterly earnings of $0.02 per share, exceeding the Zacks Consensus Estimate of a loss of $0.01 per share, and down from earnings of $0.34 per share a year ago, representing an earnings surprise of 300% [1] - The company posted revenues of $89 million for the quarter ended October 2024, surpassing the Zacks Consensus Estimate by 2.54%, and up from $79.39 million year-over-year [2] - Cognyte Software shares have increased approximately 34.1% since the beginning of the year, outperforming the S&P 500's gain of 26.5% [3] Group 2 - The current consensus EPS estimate for the upcoming quarter is -$0.01 on revenues of $90.8 million, and -$0.07 on revenues of $344.7 million for the current fiscal year [7] - The Zacks Industry Rank for Internet - Software is currently in the top 14% of over 250 Zacks industries, indicating a favorable outlook for the industry [8]

Cognyte Software Ltd. (CGNT) shares ended the last trading session 9% higher at $8.13. The jump came on an impressive volume with a higher-than-average number of shares changing hands in the session. This compares to the stock's 11.8% gain over the past four weeks.Cognyte Software is benefitting from a follow-on order exceeding $2 million from a North American law enforcement agency, highlighting growing trust in its investigative analytics technology to enhance operational intelligence and community safety ...

Core Viewpoint - Cognyte (NASDAQ: CGNT) is identified as an underfollowed and undervalued stock with a strong position in providing actionable intelligence to national security agencies, suggesting significant growth potential in the coming years [1] Company Summary - The estimated value of Cognyte shares is projected to reach $36 per share in five years, indicating a potential annualized return of 40% [1]

Financial Data and Key Metrics Changes - The company reported Q2 revenue of $84 million, representing a 10% year-over-year increase [7][17] - Non-GAAP gross profit increased by 13% year-over-year, reaching $60.2 million [7][17] - Adjusted EBITDA for the quarter was $8 million, more than three times the amount generated in Q2 of the previous year [7][17] - Non-GAAP gross margin improved to 71.3%, an increase of 209 basis points year-over-year [23] Business Line Data and Key Metrics Changes - Software revenue was $72.3 million, an increase of $5.6 million year-over-year [22] - Recurring revenue reached $46.6 million, accounting for 55% of total revenue, and grew by approximately 40% year-over-year [17][22] - Non-GAAP operating income for Q2 was $4.4 million, reflecting a significant improvement from an operating loss of $6.5 million in the same period last year [18] Market Data and Key Metrics Changes - In North America, the company secured deals with eight new customers, replacing incumbents with Cognyte solutions [9] - Total remaining performance obligations (RPO) were $567.7 million at the end of Q2, with short-term RPO at $320.6 million [21] Company Strategy and Development Direction - The company aims to deepen engagements with existing customers and expand the use of its solutions [8] - A focus on AI and advanced analytics is central to the company's strategy to address evolving threats faced by law enforcement and security agencies [11][15] - The company is transitioning some offerings from perpetual licenses to subscription models to enhance recurring revenue [27][29] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in increasing the full-year revenue outlook to approximately $347 million, representing about 11% year-over-year growth [16][24] - The company highlighted the growing complexity of threats faced by customers, necessitating advanced solutions [10][12] - Management noted that the strong cash position, with almost $100 million in cash and no debt, supports future growth initiatives [20] Other Important Information - The company was recognized for its Luminar AI insights in a Gartner report, emphasizing its competitive edge in cyber threat intelligence [14] - The company expects to generate about $37 million of cash from operations for the year [25] Q&A Session Summary Question: Revenue composition and software service decline - The CEO clarified that the decline in software and software service revenue was due to a transition from perpetual licenses to subscription models, with recurring revenue growing significantly [27] Question: Guidance for the rest of the year - Management indicated that the guidance accounts for the growing subscription revenue and the consistent purchasing behavior of governmental agencies [28][29]

Cognyte Software Ltd. (CGNT) came out with quarterly earnings of $0.05 per share, beating the Zacks Consensus Estimate of a loss of $0.02 per share. This compares to loss of $0.09 per share a year ago. These figures are adjusted for non-recurring items. This quarterly report represents an earnings surprise of 350%. A quarter ago, it was expected that this company would post a loss of $0.07 per share when it actually produced a loss of $0.04, delivering a surprise of 42.86%. Over the last four quarters, the ...

Core Insights - Cognyte Software Ltd. is set to release its second-quarter earnings results on September 10, with analysts expecting a loss of 2 cents per share compared to a loss of 9 cents per share in the same quarter last year [1] - The company is projected to report revenue of $83.69 million for the quarter [1] - In the first quarter of fiscal 2025, Cognyte Software achieved a sales growth of 12.9% year-over-year, totaling $82.714 million, surpassing the consensus estimate of $82.046 million [1] - The stock price of Cognyte Software increased by 0.8%, closing at $7.44 on the preceding Monday [1] Analyst Ratings - Wedbush analyst Daniel Ives maintained a Neutral rating and raised the price target from $8 to $9 on June 20, with an accuracy rate of 75% [1] - Needham analyst Mike Cikos reiterated a Hold rating on June 18, holding an accuracy rate of 66% [1] - Evercore ISI Group analyst Kirk Materne maintained an In-Line rating and increased the price target from $5 to $7.5 on April 10, with an accuracy rate of 67% [1]