Cognyte Software Ltd. (NASDAQ:CGNT) Q3 2024 Earnings Conference Call December 13, 2023 8:30 AM ET Dean Ridlon - Head of IR David Abadi - CFO Mike Cikos - Needham Operator I will now hand the conference over to your speaker host, Dean Ridlon, Head of Investor Relations. Please go ahead. Thank you, operator. Hello, everyone. I'm Dean Ridlon, Cognyte's Head of Investor Relations. Thank you for joining us today. I'm here with Elad Sharon, Cognyte's CEO; and David Abadi, Cognyte's CFO. For a more detailed discus ...

[Cognyte Q3 FYE24 Earnings Release](index=1&type=section&id=Cognyte%20Announces%20Third%20Quarter%20Fiscal%202024%20Results) Cognyte reported strong Q3 FYE24 results, surpassing expectations and raising its full-year outlook, fueled by strategic deal wins and AI innovations [Financial Highlights](index=1&type=section&id=Q3%20FYE24%20Financial%20Highlights) Cognyte reported Q3 FYE24 results that surpassed expectations, with revenue of $79.4 million and a significant turnaround in profitability, achieving a Non-GAAP diluted EPS of $0.34 compared to a loss in the prior year. Year-to-date performance also showed improvement, though still at a net loss on a GAAP basis - The company announced third-quarter results that were **ahead of expectations** and **raised its full-year outlook**[36](index=36&type=chunk) Q3 FYE24 Financial Highlights (Three Months Ended October 31, 2023) | Metric | GAAP | Non-GAAP | | :--- | :--- | :--- | | Revenue | $79,394 | $79,394 | | Gross Margin | 69.7% | 70.2% | | Diluted EPS | $0.07 | $0.34 | YTD FYE24 Financial Highlights (Nine Months Ended October 31, 2023) | Metric | GAAP | Non-GAAP | | :--- | :--- | :--- | | Revenue | $229,713 | $229,825 | | Gross Margin | 68.8% | 69.3% | | Diluted EPS | $(0.19) | $0.02 | [Management Commentary](index=1&type=section&id=Management%20Commentary) The CEO highlighted strong execution, significant deal wins driven by differentiated technology, and the potential for future growth through AI innovations. The CFO confirmed that Q3 results were ahead of expectations and noted that full-year revenue is expected to grow by approximately 10% and gross profit by over 20% on an SIS Adjusted non-GAAP basis - CEO Elad Sharon stated the company is executing well, winning significant deals due to its differentiated technology, and is well-positioned for future growth and profitability by leveraging AI innovations[38](index=38&type=chunk) - CFO David Abadi noted that Q3 revenue, gross margin, operating income, and Adjusted EBITDA **exceeded expectations**. For the full year, the company anticipates revenue growth of about **10%** and gross profit growth over **20%** (YoY on an SIS Adjusted non-GAAP basis)[39](index=39&type=chunk) [Updated FYE24 Outlook](index=2&type=section&id=Updated%20FYE24%20Outlook) Cognyte raised its full-year guidance for fiscal 2024, projecting revenue of approximately $311 million, representing about 10% year-over-year growth on an SIS Adjusted non-GAAP basis. The company now expects an adjusted EBITDA of about $8 million for the year and a non-GAAP diluted loss per share of $0.24 FYE24 Non-GAAP Outlook | Metric | Outlook | | :--- | :--- | | Revenue | $311 million at the midpoint (+/-1%) | | Diluted EPS | Loss of $0.24 at the midpoint | - Adjusted EBITDA for the full year is now expected to be about **$8 million**[39](index=39&type=chunk) - The non-GAAP outlook for FYE24 excludes expected stock-based compensation of **$11.5** to **$12.5 million** and amortization of intangible assets of approximately **$0.4 million**[15](index=15&type=chunk)[60](index=60&type=chunk) [Consolidated Financial Statements](index=5&type=section&id=Consolidated%20Financial%20Statements) Consolidated financial statements detail Cognyte's improved Q3 FYE24 performance, reflecting increased revenue, net income, and strengthened cash flow [Consolidated Statements of Operations (Unaudited)](index=5&type=section&id=Table%201%20COGNYTE%20SOFTWARE%20LTD.%20Condensed%20Consolidated%20Statements%20of%20Operations) For the three months ended October 31, 2023, Cognyte reported total revenue of $79.4 million, an increase from $71.3 million in the prior-year period. The company recorded a net income attributable to Cognyte of $5.2 million, a significant improvement from a net loss of $27.8 million in Q3 2022. For the nine-month period, revenue was $229.7 million, and the net loss was $13.0 million Statement of Operations Highlights (in thousands) | Metric | Q3 2023 | Q3 2022 | YTD 2023 | YTD 2022 | | :--- | :--- | :--- | :--- | :--- | | Total Revenue | $79,394 | $71,254 | $229,713 | $238,801 | | Gross Profit | $55,335 | $44,207 | $158,051 | $147,279 | | Operating Loss | $(2,775) | $(26,001) | $(15,200) | $(82,402) | | Net (Loss) Income to Cognyte | $5,223 | $(27,786) | $(12,956) | $(87,028) | | Diluted EPS | $0.07 | $(0.41) | $(0.19) | $(1.29) | [Consolidated Balance Sheets](index=6&type=section&id=Table%202%20COGNYTE%20SOFTWARE%20LTD.%20Condensed%20Consolidated%20Balance%20Sheets) As of October 31, 2023, Cognyte had total assets of $445.6 million and total liabilities of $239.1 million. Total stockholders' equity stood at $206.5 million. Key current assets include $49.6 million in cash and cash equivalents and $110.6 million in accounts receivable Balance Sheet Highlights (in thousands) | Metric | Oct 31, 2023 | Jan 31, 2023 | | :--- | :--- | :--- | | **Assets** | | | | Cash and cash equivalents | $49,594 | $34,579 | | Accounts receivable, net | $110,571 | $113,201 | | Total current assets | $261,366 | $251,724 | | Total assets | $445,594 | $443,078 | | **Liabilities & Equity** | | | | Total current liabilities | $206,450 | $193,856 | | Total liabilities | $239,105 | $233,304 | | Total stockholders' equity | $206,489 | $209,774 | [Consolidated Statements of Cash Flows (Unaudited)](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) For the nine months ended October 31, 2023, net cash provided by operating activities was $24.8 million, a substantial improvement from the $46.1 million used in the same period last year. Net cash used in investing activities was $9.5 million. The company ended the period with $53.8 million in total cash, cash equivalents, and restricted cash Cash Flow Summary (Nine Months Ended, in thousands) | Metric | Oct 31, 2023 | Oct 31, 2022 | | :--- | :--- | :--- | | Net cash provided by (used in) operating activities | $24,798 | $(46,137) | | Net cash used in investing activities | $(9,531) | $(13,199) | | Net cash used in financing activities | $0 | $(51,443) | | Net increase (decrease) in cash | $14,796 | $(111,262) | | Cash, cash equivalents, restricted cash at end of period | $53,840 | $46,958 | [Reconciliation of GAAP to Non-GAAP Measures](index=8&type=section&id=Table%204%20COGNYTE%20SOFTWARE%20LTD.%20Reconciliation%20of%20GAAP%20to%20Non-GAAP%20Measures) The company provides a detailed reconciliation from GAAP to Non-GAAP results, adjusting for items like stock-based compensation, amortization of intangibles, and restructuring expenses. For Q3 FYE24, this reconciliation transformed a GAAP operating loss of $2.8 million into a Non-GAAP operating income of $1.2 million. Adjusted EBITDA for the quarter was $4.6 million, compared to a loss of $15.4 million in the prior year Reconciliation to Adjusted EBITDA (in thousands) | Metric | Q3 2023 | Q3 2022 | YTD 2023 | YTD 2022 | | :--- | :--- | :--- | :--- | :--- | | GAAP Net (loss) income to Cognyte | $5,223 | $(27,786) | $(12,956) | $(87,028) | | Adjusted EBITDA | $4,623 | $(15,403) | $4,673 | $(46,706) | | Adjusted EBITDA margin | 5.8% | (21.5)% | 2.0% | (19.5)% | Reconciliation to Non-GAAP Operating (Loss) Income (in thousands) | Metric | Q3 2023 | Q3 2022 | YTD 2023 | YTD 2022 | | :--- | :--- | :--- | :--- | :--- | | GAAP Operating loss | $(2,775) | $(26,001) | $(15,200) | $(82,402) | | Non-GAAP operating (loss) income | $1,229 | $(19,383) | $(5,223) | $(58,897) | | Non-GAAP operating margin | 1.5% | (27.1)% | (2.3)% | (24.6)% | Reconciliation to Non-GAAP Diluted EPS | Metric | Q3 2023 | Q3 2022 | YTD 2023 | YTD 2022 | | :--- | :--- | :--- | :--- | :--- | | GAAP diluted net (loss) income per share | $0.07 | $(0.41) | $(0.19) | $(1.29) | | Non-GAAP diluted net income (loss) per share | $0.34 | $(0.25) | $0.02 | $(1.08) | [Supplemental Information](index=12&type=section&id=Supplemental%20Information) Supplemental information provides adjusted financial metrics, including SIS-adjusted and constant currency figures, for clearer insights into underlying business performance [SIS Adjusted Non-GAAP Measures](index=12&type=section&id=Table%205%20COGNYTE%20SOFTWARE%20LTD.%20Reconciliation%20of%20Non-GAAP%20to%20SIS%20Adjusted%20Non-GAAP%20Measures) To provide a clearer comparison of ongoing business performance, the company presents SIS Adjusted Non-GAAP measures, which exclude the contribution from the Situational Intelligence Solutions (SIS) business divested on December 1, 2022. For Q3, SIS Adjusted non-GAAP revenue was $79.4 million, compared to $61.5 million in the prior year, showing strong underlying growth - SIS Adjusted Non-GAAP measures are used to provide better comparability by excluding the financial contribution of the Situational Intelligence Solutions (SIS) business, which was divested on December 1, 2022[28](index=28&type=chunk)[33](index=33&type=chunk)[83](index=83&type=chunk) SIS Adjusted Non-GAAP Revenue and Gross Profit (in thousands) | Metric | Q3 2023 | Q3 2022 (SIS Adj.) | | :--- | :--- | :--- | | Total SIS Adjusted non-GAAP revenue | $79,394 | $61,477 | | SIS Adjusted non-GAAP gross profit | $55,744 | $37,574 | | SIS Adjusted non-GAAP gross margin | 70.2% | 61.1% | [Constant Currency Analysis](index=13&type=section&id=Table%206%20COGNYTE%20SOFTWARE%20LTD.%20Calculation%20of%20Change%20in%20Revenue%20on%20a%20Constant%20Currency%20Basis) The company provides a constant currency analysis to isolate underlying business performance from foreign exchange rate volatility. For Q3 FYE24, reported GAAP revenue growth was 11.4%, while constant currency growth was 9.9%, indicating a positive impact from currency fluctuations of 1.5% - Constant currency measures are calculated by translating current-period foreign currency results into U.S. dollars using prior-period average exchange rates to facilitate assessment of underlying business trends[57](index=57&type=chunk)[72](index=72&type=chunk) Q3 Revenue Change vs. Prior Year | Metric | GAAP | Non-GAAP | | :--- | :--- | :--- | | Reported period-over-period revenue change | 11.4% | 11.0% | | % impact from change in foreign currency | (1.5)% | (1.5)% | | Constant currency period-over-period revenue change | 9.9% | 9.6% | [Explanation of Non-GAAP Measures](index=16&type=section&id=About%20Non-GAAP%20Financial%20Measures) Management believes non-GAAP measures provide useful supplemental information by facilitating period-to-period and peer comparisons. Key adjustments include excluding stock-based compensation, amortization of acquired intangibles, restructuring costs, acquisition expenses, and certain other non-recurring items to better reflect ongoing operational performance - The company uses non-GAAP financial measures to facilitate comparison of its financial results between periods and with other software companies, and to allow investors to see key supplementary metrics used by management[24](index=24&type=chunk)[73](index=73&type=chunk) - Key adjustments to GAAP measures include the exclusion of: * Revenue adjustments from fair value accounting in acquisitions * Stock-based compensation expenses * Amortization of acquired technology and other intangible assets * Acquisition expenses and restructuring costs * Separation expenses related to the spin-off from Verint * Gains or losses from business divestitures[80](index=80&type=chunk)[54](index=54&type=chunk)[25](index=25&type=chunk)

Cognyte Software Ltd. (NASDAQ:CGNT) Q2 2024 Earnings Conference Call September 12, 2023 8:30 AM ET Company Participants Dean Ridlon - Head of Investor Relations Elad Sharon - Chief Executive Officer David Abadi - Chief Financial Officer Conference Call Participants Mike Cikos - Needham Operator Good day and thank you for standing-by. Welcome to the Cognyte Q2 FYE '24 Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question ...

Financial Performance - Q2 FYE24 revenue was $77,053,000, with a gross margin of 68.7% and a diluted EPS loss of $(0.13) on a GAAP basis[2] - For H1 FYE24, revenue reached $150,319,000, with a gross margin of 68.3% and a diluted EPS loss of $(0.26) on a GAAP basis[6] - The company expects full-year non-GAAP revenue to be approximately $307 million, reflecting an 8.5% growth year-over-year[9] - Gross profit is projected to grow faster than revenue, exceeding 15% year-over-year on an SIS Adjusted non-GAAP basis[7] - Non-GAAP diluted EPS is expected to be a loss of $(0.33) at the midpoint of the revenue outlook[9] - The company is raising its outlook for non-GAAP revenue, gross margin, and EPS based on positive Q2 results[2] - Total revenue for the six months ended July 31, 2023, was $150,319,000, a decrease of 10.3% from $167,547,000 in the same period of 2022[24] - Software service revenue decreased to $81,313,000, down 10.9% from $91,269,000 year-over-year[24] - Total GAAP revenue for the six months ended July 31, 2023, was $150,319,000, a decrease of 10.3% compared to $167,547,000 in 2022[30] - Non-GAAP revenue for the six months ended July 31, 2023, was $150,431,000, reflecting a period-over-period decline of 10.5%[51] - Revenue for the three months ended July 31, 2023, was $77,053,000, unchanged from the previous year, while non-GAAP revenue for the same period was $77,053,000[51] Profitability and Loss - The company anticipates annual positive Adjusted EBITDA of about $2 million at the midpoint of the revenue range[7] - The net loss attributable to Cognyte Software Ltd. for the six months ended July 31, 2023, was $18,179,000, an improvement from a net loss of $59,242,000 in the same period of 2022[24] - GAAP operating loss improved to $(12,425,000) for the six months ended July 31, 2023, compared to $(56,401,000) in the same period of 2022[30] - The company reported a net loss of $(15,941,000) for the six months ended July 31, 2023, an improvement from $(57,095,000) in 2022[33] - Non-GAAP operating loss was $(6,452,000) for the six months ended July 31, 2023, compared to $(39,514,000) in the same period of 2022[30] - Adjusted EBITDA for the six months ended July 31, 2023, was $50,000, a significant improvement from $(31,303,000) in 2022[37] Expenses and Cost Management - Total operating expenses for the six months ended July 31, 2023, were $115,141,000, a reduction of 28.0% compared to $159,473,000 in the prior year[24] - Research and development expenses decreased to $54,850,000 for the six months ended July 31, 2023, down from $76,526,000 in the prior year[24] - Selling, general and administrative expenses were $60,110,000, accounting for 40.0% of GAAP revenue, compared to 49.2% in 2022[30] - Research and development expenses for the six months ended July 31, 2023, were $53,609,000, representing 35.6% of non-GAAP revenue, down from 42.8% in 2022[43] - Stock-based compensation expenses for the six months ended July 31, 2023, were $4,628,000, a decrease from $11,463,000 in 2022[37] Cash Flow and Liquidity - Cash and cash equivalents increased to $48,472,000 as of July 31, 2023, compared to $34,579,000 at January 31, 2023[26] - Cash and cash equivalents at the end of the period increased to $52,772,000 from $37,214,000 in the previous year[33] - Net cash provided by operating activities was $25,245,000 for the six months ended July 31, 2023, compared to a net cash used of $(27,492,000) in 2022[33] - Total cash used in investing activities was $(11,552,000) for the six months ended July 31, 2023, compared to $(13,413,000) in 2022[33] Balance Sheet - Total assets decreased to $433,560,000 as of July 31, 2023, down from $443,078,000 at January 31, 2023[26] - Total liabilities were $230,940,000 as of July 31, 2023, a slight decrease from $233,304,000 at January 31, 2023[26] Strategic Outlook and Market Position - The company emphasizes the strength of its innovative technology and recent AI developments as key growth drivers[2] - The company has secured deals with both existing and new strategic customers, indicating strong market demand[2] - The outlook for FYE24 excludes potential impacts from business acquisitions and reflects current foreign currency exchange rates[11] - The company divested its Situational Intelligence Solutions (SIS) business on December 1, 2022, impacting financial measures such as non-GAAP revenue and gross profit[65] - Future financial outlook reflects foreign currency exchange rates consistent with those in effect at the time of the outlook provision[74] Non-GAAP Financial Measures - Non-GAAP gross profit for the six months ended July 31, 2023, was $103,519,000, with a non-GAAP gross margin of 68.8%, compared to 62.9% in 2022[30] - The company excludes stock-based compensation expenses from non-GAAP measures to facilitate meaningful comparisons of operating results[62] - Non-GAAP financial measures are provided to give investors a clearer understanding of the company's financial performance and trends[49] - Adjusted EBITDA is defined as net income attributable to non-controlling interest before interest, taxes, depreciation, and other adjustments, providing a clearer view of operating performance[69] Currency Impact - The impact from changes in foreign currency exchange rates on revenue was a decrease of 0.6% for the six months ended July 31, 2023[51] - Constant currency revenue change for the six months ended July 31, 2023, was a decline of 10.9%[51]

22 Revenue for the three months ended April 30, 2023, at constant currency is calculated by translating current-period GAAP or non-GAAP foreign currency revenue (as applicable) into U.S. dollars using average foreign currency exchange rates for the three months April 30, 2022, rather than actual current-period foreign currency exchange rates. We believe these non-GAAP financial measures, used in conjunction with the corresponding GAAP measures, provide investors with useful supplemental information about th ...

Financial Data and Key Metrics Changes - The company reported Q1 revenue of $73 million, which is an increase of $2 million from Q4, representing 6% sequential growth and 11% year-over-year growth [49] - Gross margin for Q1 was 68.4%, up 250 basis points from Q4 and up 800 basis points from Q1 last year, primarily due to an increase in software revenue [75] - Non-GAAP operating expenses for Q1 were $55.7 million, slightly higher than Q4, with a non-GAAP operating loss of $5.5 million and a non-GAAP adjusted EBITDA loss of $2.3 million [50] Business Line Data and Key Metrics Changes - Software gross profit grew faster than software revenue, increasing 90% sequentially and 80% year-over-year [49] - The company expects to raise its full-year revenue outlook to $303 million, reflecting approximately 7% year-over-year growth at the midpoint of the range [52][70] Market Data and Key Metrics Changes - The company noted a strong backlog with total RPO at the end of Q1 being $581 million, and short-term RPO at $283 million, approximately the same level as Q4 [51] - There is a noticeable change in market dynamics, with more customers expressing confidence in their budgets and plans compared to the previous year [47] Company Strategy and Development Direction - The company aims to leverage the latest technologies, including AI, to enhance its investigative analytics solutions and drive long-term growth [5][48] - The focus is on addressing complex customer challenges and improving the speed and accuracy of investigations through advanced analytics [26][27] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the positive momentum and demand for their solutions, expecting continued growth and margin expansion [72] - The company anticipates positive cash flow from operations for the full year, driven by improved financial results and strong cash collection [4][71] Other Important Information - The company generated a significant positive cash flow from operations of $19 million during Q1, entering the quarter with cash of about $73 million and no debt [51] - The company is focused on balancing short-term and long-term growth opportunities while maintaining a strong cost structure [33][40] Q&A Session Summary Question: Can you help us think about how the revenue came together in the quarter that was able to help you deliver that outperformance? - Management indicated that healthy demand and backlog conversion scheduling contributed to the revenue outperformance in Q1 [9][12] Question: What has the typical cadence been for RPO and current RPO from Q4 to Q1? - Management noted that RPO can grow quarter-on-quarter, and the strong RPO supports future growth [14] Question: Can you elaborate on the drivers for margin expansion and the trade-offs involved? - Management discussed the need to balance increased investment in operating expenses with growth opportunities, emphasizing a well-organized structure to capture growth when it occurs [33][40] Question: What internal steps have been taken to prepare for potential growth? - Management highlighted a focus on high-opportunity markets, restructuring the organization, and adjusting operating expenses to enhance customer value [39][40]

Exhibit 99.1 Press Release Investor Relations Contact Dean Ridlon Cognyte Software Ltd. IR@cognyte.com Cognyte Announces First Quarter Fiscal 2024 Results • Stock-based compensation is expected to be between approximately $10.0 million and $13.0 million, assuming market prices for our ordinary shares are generally consistent with current levels. For additional information about our expectations for FYE24, please refer to the Q1 FYE24 conference call we will conduct on June 15, 2023. Our non-GAAP outlook doe ...

Cognyte Software Ltd. (NASDAQ:CGNT) Q4 2022 Earnings Conference Call April 11, 2023 8:30 AM ET Company Participants Dean Ridlon - Head of IR Elad Sharon - CEO David Abadi - CFO Conference Call Participants Mike Cikos - Needham Peter Levine - Evercore Brian Ruttenbur - Imperial Capital Dean Ridlon Thank you, operator. Hello, everyone. I'm Dean Ridlon, Cognyte's Head of Investor Relations. Thank you for joining us today. I'm here with Elad Sharon, Cognyte's CEO; and David Abadi, Cognyte's CFO. Before getting ...

• risks relating to claims by third parties that our solutions infringe their terms of use or other proprietary rights; • 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, claim infringement on their intellectual property rights, or claim a violation of their license rights, including relative to free or open source components we may use; • risks associated with our failure to comply with anti-corrup ...

Exhibit 99.1 Investor Relations Contact Dean Ridlon Cognyte Software Ltd. IR@cognyte.com Herzliya, Israel, April 11, 2023 - Cognyte Software Ltd. (NASDAQ: CGNT) (the "Company," "Cognyte," "we," "us" and "our"), a global leader in investigative analytics software, today announced results for the three months and year ended January 31, 2023 ("Q4 FYE23", "FYE23" and "Fiscal 2023"). | --- | --- | --- | --- | |-------------------------------------------------|--------------|---------------------------|---------- ...