Financial Data and Key Metrics Changes - Revenue for Q1 2026 increased by approximately 16% year over year to $95.5 million [7] - Non-GAAP gross profit rose by about 17% year over year [7] - Adjusted EBITDA for the quarter was approximately $10.3 million, more than double the $5 million generated in Q1 last year [19] - Non-GAAP operating income was $7.6 million, over four times higher than the $1.8 million generated in Q1 last year [19] - Cash flow from operations was approximately $1.7 million, with negative free cash flow of $2.5 million [20] Business Line Data and Key Metrics Changes - Software revenue was $37.4 million, an increase of $5.9 million or 19% year over year [16] - Total software revenue for the quarter was approximately $82 million, representing about 86% of total revenue [16] - Professional service revenue in Q1 was $13.5 million, an increase of $6.6 million over last year [17] - Recurring revenue for Q1 was $47.2 million, representing 49% of total revenue [18] Market Data and Key Metrics Changes - Total remaining performance obligations (RPO) at the end of Q1 was $597.8 million, up $52 million versus the end of fiscal 2025 [22] - Short-term RPO increased to $346.9 million, providing solid visibility into revenue over the next twelve months [24] Company Strategy and Development Direction - The company is focused on expanding its presence in the U.S. market through the acquisition of GroupSense, a cyber threat intelligence company [12][21] - The strategic priorities include enhancing operational agility and ensuring customers can respond to emerging threats [10][15] - The company aims to drive long-term growth and expand profitability through innovation and strong customer engagement [13][28] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in healthy demand and continued validation of technology through customer wins [13] - The company updated its guidance for fiscal 2026, expecting revenue of approximately $395 million, representing about 13% year-over-year growth [25] - Management noted that the demand environment remains favorable, with ongoing customer engagement and positive feedback across the portfolio [28] Other Important Information - The company executed a share repurchase program, buying about 952,000 ordinary shares for approximately $9 million [20] - The GroupSense acquisition closed on May 20, 2025, for approximately $4 million in cash, with an earnout of up to $5 million contingent on performance targets [21] Q&A Session Summary Question: How did the quarter itself play out versus plan? - Management indicated that Q1 top line came a little ahead of expectations, with strong demand and customer traction [32] Question: Why isn't the recent contract value impacting fiscal 2026 to a greater extent? - Management explained that some large deals were already included in guidance, and the deployment of a significant subscription deal is planned for Q1 fiscal 2027 [35] Question: What is the revenue impact of the GroupSense acquisition? - The acquisition is expected to add approximately $3 million to the top line, with a breakeven business model [38]

Financial Data and Key Metrics Changes - The company reported Q1 revenue of approximately $95.5 million, reflecting a year-over-year growth of about 16% [7][18] - Non-GAAP gross profit increased by approximately 17% year-over-year, reaching $68.7 million [7][20] - Adjusted EBITDA for the quarter was approximately $10.3 million, more than double the $5 million generated in Q1 last year [8][21] - Non-GAAP operating income was $7.6 million, over four times higher than the $1.8 million generated in Q1 last year [21] - Cash flow from operations was approximately $1.7 million, with negative free cash flow of $2.5 million [22] Business Line Data and Key Metrics Changes - Software revenue for Q1 was $37.4 million, an increase of $5.9 million or 19% year-over-year [18] - Professional service revenue in Q1 was $13.5 million, an increase of $6.6 million over last year [19] - Recurring revenue for Q1 was $47.2 million, representing 49% of total revenue [20] Market Data and Key Metrics Changes - Total remaining performance obligations (RPO) at the end of Q1 was $597.8 million, up $52 million versus the end of fiscal 2025 [24] - Short-term RPO increased to $346.9 million, providing solid visibility into revenue over the next twelve months [25] Company Strategy and Development Direction - The company is focused on expanding its presence in the U.S. market, highlighted by the acquisition of GroupSense, a cyber threat intelligence company [13][23] - The strategic priorities include enhancing customer engagement and addressing complex intelligence challenges [12][30] - The company aims to leverage its technology to deliver greater value to customers and improve operational agility [10][14] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in healthy demand and continued validation of technology through customer wins [14][30] - The company updated its guidance for fiscal 2026, expecting revenue of approximately $395 million, representing about 13% year-over-year growth [15][27] - Management noted that the demand environment remains favorable, with ongoing customer engagement and positive feedback across the portfolio [30] Other Important Information - The company executed a share repurchase program, buying approximately 952,000 ordinary shares for about $9 million [22] - The GroupSense acquisition closed on May 20, 2025, for approximately $4 million in cash, with an earnout of up to $5 million based on performance targets [23] Q&A Session Summary Question: How did the quarter play out versus plan? - Management indicated that Q1 top line performance was slightly ahead of expectations, with continued sequential growth anticipated throughout the year [34][35] Question: Why isn't the recent contract value impacting fiscal 2026 more significantly? - Management explained that some large deals were already included in guidance, and the deployment of a significant subscription deal is planned for Q1 of fiscal 2027 [38][39] Question: What is the revenue impact of the GroupSense acquisition? - The acquisition is expected to add approximately $3 million to the top line, with a breakeven business model and a small increase in operating expenses [40][41]

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 guarantees of future performance and they are based on management's expectations that involve a number of known and unknown risks, uncertainties, assumptions, and other important factors, any of which could cause ...

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]

Financial Data and Key Metrics Changes - The company reported revenue of $355 million for fiscal 2025, representing a 12% year-over-year growth [10] - Non-GAAP gross profit increased by 15%, and adjusted EBITDA reached $29 million, more than three times the previous year's figure [10] - For fiscal 2026, the company expects revenue to grow to approximately $392 million, maintaining a 12% growth rate, with adjusted EBITDA projected to be $43 million, reflecting a year-over-year growth of about 45% [13] Business Line Data and Key Metrics Changes - The company operates in a fragmented market, primarily serving government security agencies, with a revenue split of approximately 55% from EMEA, 30% from APAC, and 15% from the Americas [11] - The company is focusing on expanding its presence in the U.S., where only about 3% of revenue currently comes from [15] Market Data and Key Metrics Changes - The company has hundreds of customers across nearly 100 countries, addressing various security challenges such as drug trafficking and terror activities [3][11] - The demand for security solutions is increasing due to the growing complexity of threats and the need for advanced technology to analyze large volumes of data [12] Company Strategy and Development Direction - The company aims to expand its U.S. presence by focusing on law enforcement agencies and has started hiring local sales teams and participating in industry conferences [16][19] - The strategy includes a balanced approach to capital allocation, focusing on operational flexibility, share buybacks, and small tuck-in acquisitions to expand market reach [42][44] Management's Comments on Operating Environment and Future Outlook - Management highlighted that the world is not becoming safer, leading to increased demand for their technology [12][55] - The company has a strong reputation and long-standing relationships with customers, which is expected to support continued growth [13][56] Other Important Information - The company is investing in AI capabilities to enhance its technology, including the ability to uncover hidden insights from encrypted data [35][38] - The company is currently offering solutions in both perpetual licenses and subscription models, with a gradual shift expected towards subscription [40][41] Q&A Session Summary Question: How do the three drivers (data, adversaries, technology) rank in importance? - Management stated that all three drivers are interconnected and influence each other, making it difficult to rank them separately [46][48] Question: What is the current mix of on-premises versus cloud solutions for government customers? - Most of the business is currently on-premises with a minor portion in subscription, but there is a growing interest in moving to cloud solutions due to benefits like no downtime and easier upgrades [50][53]

Summary of Cognite Conference Call Company Overview - Cognite is a software-led technology vendor specializing in investigative analytics, primarily serving security agencies such as law enforcement, national security, and military intelligence [7][8] - The company has been in the market for over three decades and operates in nearly 100 countries with hundreds of customers [8] Financial Performance - For fiscal year 2025, Cognite reported a revenue growth of approximately 12% year-over-year, totaling $351 million [10] - Non-GAAP gross profit increased by approximately 15% year-over-year, with adjusted EBITDA reaching $29 million, reflecting more than three times the previous fiscal year's performance [11] - Strong cash flow from operations was reported at $47 million, indicating robust business execution and customer value delivery [11][12] Growth Projections - Cognite anticipates a compound annual growth rate (CAGR) of approximately 13% over the next few years, primarily driven by organic growth and an expanding customer base [14] - The company aims to achieve revenue of $392 million for fiscal year 2026, representing around 12% year-over-year growth [29] Market Demand and Customer Insights - The demand for Cognite's solutions is driven by increasing security threats and the need for advanced analytics capabilities among customers [18][21] - Customers are increasingly adopting AI technologies to enhance their investigative capabilities and uncover hidden insights [20][22] - The geopolitical landscape has heightened the urgency for security agencies to address evolving threats, which is expected to further drive demand for Cognite's solutions [20][22] Customer Engagement and Sales Dynamics - Cognite has not observed any elongation in deal cycles or shrinking contract sizes despite economic uncertainties; customer engagement remains consistent [24][25] - The company has successfully gained nearly 60 new logos in the past year and continues to penetrate the U.S. market [14][39] Strategic Initiatives - Key growth initiatives include investing in technology, leveraging existing customer relationships for upgrades and expansions, acquiring new customers, and increasing presence in the U.S. market [39] - Cognite's strategy involves a combination of direct and indirect sales approaches, particularly in the U.S. market, where they are gradually building brand awareness and customer relationships [70][76] Competitive Landscape and Technology - The competitive landscape is fragmented, with Cognite facing various competitors in different regions [79] - The integration of GenAI and AI technologies is seen as a significant opportunity for Cognite, enhancing their ability to provide valuable insights and streamline investigative processes [80][81] Conclusion - Cognite is well-positioned for future growth, driven by strong demand for its technology, a solid customer base, and strategic initiatives aimed at expanding its market presence and enhancing its product offerings [12][22][39]

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 ...