Group 1: Cognyte Software (CGNT) - Cognyte is positioned strongly with a significant number of large, multi-million dollar contracts, supporting fiscal 2026 revenue guidance of approximately $392 million [2] - The revenue visibility from Cognyte's cRPO balance exiting fiscal 2025 is around 86%, a decrease from 89% in fiscal 2025 and 94% in fiscal 2024 [2] - Cognyte announced over $40 million in total contract value recently, with projected fiscal first-quarter revenue and adjusted EPS estimates of $94.2 million and $0.02, compared to consensus estimates of $94 million and $0.01 [3][7] Group 2: GitLab Inc (GTLB) - GitLab is expected to report sustained revenue outperformance and improving operating margins, with a potential 'catch-up trade' due to recent underperformance relative to other Data Infrastructure vendors [4] - Investor concerns focus on GitLab's competitive position against GitHub, seat growth for the Premium SKU, and long-term growth sustainability after the Premium price increase [4] - The upcoming launch of GitLab 18 in May 2025 allows Premium SKU customers to purchase Duo Enterprise without upgrading to the Ultimate SKU, raising questions about the success of up-tiering to Ultimate [5] - Management has demonstrated success in driving First Orders with Ultimate, despite investor concerns regarding the durability and pricing of AI-native capabilities in the DevSecOps ecosystem [6]

Cognyte Software (CGNT) FY 2025 Conference May 28, 2025 10:15 AM ET Speaker0 Good morning, everybody. Thank you for joining us. My name is Shaul Eyal. I'm a TD Cowen's research analyst covering the cybersecurity universe. We are joined this morning and delighted to host Alexeyron, CEO of Cognite. We also have David Abadi, the CFO, sitting here in the front. Halek, thank you so much for joining us this morning. Thank you for hosting us. Maybe for the benefit of the audience slightly less familiar with Cognit ...

Cognyte Software (CGNT) FY Conference May 12, 2025 08:45 AM ET Speaker0 Great. Thanks everyone for joining us today for Needham's May conference. My name is Mike Cikos. I'm the lead analyst here covering Cognite. I'm pleased to say that we have with us today the CEO and CFO of Cognite, Elad and David. Thank you to both of you guys for joining us. As part of this, I guess, webcast that we have the next forty minutes, I have prepared q and a on my side. But if anyone has any questions that they wanna log in t ...

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]

Financial Data and Key Metrics Changes - The company reported a revenue growth of 13% year-over-year in Q4, reaching $94.5 million, and a full-year revenue increase of approximately 12% to $351 million [11][12][27] - Non-GAAP gross profit for Q4 increased by 17% year-over-year, while full-year gross profit grew by approximately 15% [11][12][29] - Adjusted EBITDA for Q4 was over $9 million, representing a 114% year-over-year growth, and for the full year, adjusted EBITDA reached $29 million, more than three times the previous fiscal year [12][30] Business Line Data and Key Metrics Changes - Total software revenue for the full year was $306.7 million, accounting for about 87% of total revenue, with recurring revenue at $186.6 million, representing 53% of total revenue [27] - In Q4, software revenue was $37.4 million, and software services revenue was $45.9 million, contributing to a total software revenue of $83.3 million [33] - 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 a noted decline in revenue from the Americas region [27][28] - The company added over 60 new customers across multiple regions during the year, doubling the number from the previous fiscal year [15] Company Strategy and Development Direction - The company aims to drive growth through new advanced capabilities, deepening customer relationships, and expanding market reach, particularly in the U.S. federal law enforcement market [17][18] - The strategy includes significant investments in sales and marketing in the U.S. to penetrate the market further and enhance brand awareness [79][81] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the U.S. market's potential despite current policy uncertainties, highlighting ongoing engagement with federal agencies [56][58] - For fiscal '26, the company expects revenue of approximately $392 million, representing about 12% year-over-year growth, with gross profit anticipated to grow faster than revenue [17][44] Other Important Information - The company ended the year with a strong balance sheet, including $113.3 million in cash and no debt, and robust deferred revenue of $130.3 million [31][32] - The company initiated a stock repurchase program, buying approximately 586,000 shares for about $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 ongoing 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 the penetration mode, but management does not anticipate a negative impact from current unrest [61][62] Question: What are the U.S. demand drivers compared to international markets? - Demand drivers are similar globally, focusing on criminal activities, with an increasing emphasis on border control in the U.S. [74][76] Question: What investments are being made to accelerate sales cycles in the U.S.? - The company is hiring local sales teams, increasing marketing efforts, and expanding partnerships to enhance sales cycles [79][81] Question: What should be expected regarding long-term growth models? - Management indicated that the business fundamentals are healthy, with expectations for continued profitability and growth, but specific long-term targets will be discussed at the upcoming Investor Day [84][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]

Company Overview - Cognyte Software Ltd. (CGNT) shares increased by 9% to $8.13 in the last trading session, with a notable trading volume, and have gained 11.8% over the past four weeks [1] - The company received a follow-on order exceeding $2 million from a North American law enforcement agency, indicating growing trust in its investigative analytics technology [2] Financial Performance - The upcoming quarterly report is expected to show a loss of $0.01 per share, reflecting a year-over-year change of -102.9% [2] - Revenues are projected to be $86.8 million, which is a 9.3% increase compared to the same quarter last year [2] Earnings Estimates and Stock Performance - The consensus EPS estimate for Cognyte Software has remained unchanged over the last 30 days, suggesting that stock price movements may not continue without trends in earnings estimate revisions [4] - The stock currently holds a Zacks Rank of 3 (Hold), indicating a neutral outlook [4] Industry Context - Cognyte Software is part of the Zacks Internet - Software industry, which includes other companies like Asana, Inc. (ASAN) that also experienced a price increase of 5.7% to $14.72 in the last trading session [4] - Asana's consensus EPS estimate has remained unchanged at -$0.07, representing a year-over-year change of -75% [5]