Cognyte Software Ltd. (NASDAQ:CGNT) Q3 2023 Earnings Conference Call December 20, 2022 8:30 AM ET Company Participants Dean Ridlon - Head, Investor Relations Elad Sharon - Chief Executive Officer David Abadi - Chief Financial Officer Conference Call Participants Mike Cikos - Needham & Company Peter Levine - Evercore ISI Brian Ruttenbur - Imperial Capital Operator Good day. Thank you for standing by. Welcome to Cognyte’s Third Quarter Fiscal Year 2023 Earnings Conference Call. [Operator Instructions] Please ...

[Executive Summary & Business Overview](index=1&type=section&id=Executive%20Summary%20%26%20Business%20Overview) [Company Introduction](index=1&type=section&id=Company%20Introduction) Cognyte Software Ltd. is a global leader in investigative analytics software, empowering governments and enterprises with actionable intelligence to accelerate and improve the effectiveness of investigations against national security threats, personal safety risks, and criminal activities - Cognyte Software Ltd. is a global leader in investigative analytics software that empowers governments and enterprises with **Actionable Intelligence for a Safer World™**[15](index=15&type=chunk) - The company's open software helps customers accelerate and conduct investigations, deriving insights to identify, neutralize, and tackle threats to national security, personal safety, and various forms of criminal activity[15](index=15&type=chunk) [Q3 & YTD FYE23 Financial Highlights](index=1&type=section&id=Q3%20%26%20YTD%20FYE23%20Financial%20Highlights) Cognyte reported Q3 FYE23 non-GAAP revenue of $71.5 million and a non-GAAP diluted EPS of $(0.25); for the nine months ended October 31, 2022 (YTD FYE23), non-GAAP revenue reached $239.5 million, with a non-GAAP diluted EPS of $(1.08) Q3 FYE23 Financial Highlights | Metric | GAAP | Non-GAAP | | :----- | :--- | :------- | | Revenue | $71.3 million | $71.5 million | | Gross Margin | 62.0% | 63.4% | | Diluted EPS | $(0.41) | $(0.25) | YTD FYE23 Financial Highlights | Metric | GAAP | Non-GAAP | | :----- | :--- | :------- | | Revenue | $238.8 million | $239.5 million | | Gross Margin | 61.7% | 63.0% | | Diluted EPS | $(1.29) | $(1.08) | [Management Commentary](index=1&type=section&id=Management%20Commentary) Despite a sequential revenue decline in Q3 FYE23 due to slow backlog conversion, the CEO anticipates a turning point with sequential revenue growth in Q4 FYE23 and targets approximately 5% revenue growth for FYE24; the company also completed the divestiture of Situational Intelligence solutions and aims for breakeven cash flow from operations for Q4 and full FYE24 - CEO Elad Sharon expects sequential revenue growth to resume in Q4 FYE23, which is believed to be a turning point[4](index=4&type=chunk) - The company is targeting revenue to grow by approximately **5% for fiscal year 2024** compared to the current year[4](index=4&type=chunk) - Successfully completed the divestiture of Situational Intelligence solutions on December 1, 2022, as part of efforts to simplify and improve company focus during challenging macro-economic conditions[5](index=5&type=chunk) - CFO David Abadi stated the company is targeting about **breakeven cash flow from operations** in the current quarter and for the full year ending January 31, 2024, based on revenue growth outlook and cost structure improvements[6](index=6&type=chunk) [Financial Outlook](index=2&type=section&id=Financial%20Outlook) Cognyte projects non-GAAP revenue for Q4 FYE23 to be between $65 million and $74 million, including approximately $2 million from Situational Intelligence solutions; for FYE24, GAAP revenue is expected to grow by approximately 5% from FYE23 revenue, excluding Situational Intelligence solutions Q4 FYE23 Non-GAAP Revenue Outlook | Metric | Range | | :----- | :---- | | Revenue | $65 to $74 million | - The Q4 FYE23 non-GAAP revenue outlook includes approximately **$2 million of revenue** from one month of Situational Intelligence solutions[8](index=8&type=chunk) - For FYE24, GAAP revenue is targeted to grow by approximately **5% from FYE23 revenue**, excluding Situational Intelligence solutions[10](index=10&type=chunk) [GAAP Financial Statements](index=5&type=section&id=GAAP%20Financial%20Statements) [Condensed Consolidated Statements of Operations](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) For the nine months ended October 31, 2022, Cognyte reported a significant decline in total GAAP revenue to $238.8 million from $349.1 million in the prior year, resulting in a net loss of $(83.9) million and a diluted EPS of $(1.29), a reversal from net income in the previous year Condensed Consolidated Statements of Operations (GAAP) - Nine Months Ended October 31 (in thousands) | Metric | 2022 | 2021 | Change (YoY) | | :-------------------- | :--- | :--- | :----------- | | Total revenue | $238,801 | $349,085 | -31.6% | | Gross profit | $147,279 | $251,864 | -41.5% | | Operating (loss) income | $(82,402) | $6,571 | N/A (loss from income) | | Net (loss) income | $(83,900) | $1,267 | N/A (loss from income) | | Diluted EPS | $(1.29) | $(0.04) | N/A (loss from income) | Condensed Consolidated Statements of Operations (GAAP) - Three Months Ended October 31 (in thousands) | Metric | 2022 | 2021 | Change (YoY) | | :-------------------- | :--- | :--- | :----------- | | Total revenue | $71,254 | $118,360 | -39.8% | | Gross profit | $44,207 | $86,076 | -48.6% | | Operating (loss) income | $(26,001) | $7,239 | N/A (loss from income) | | Net (loss) income | $(26,805) | $3,508 | N/A (loss from income) | | Diluted EPS | $(0.41) | $0.03 | N/A (loss from income) | [Condensed Consolidated Balance Sheets](index=6&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) As of October 31, 2022, Cognyte's total assets decreased to $507.3 million from $664.6 million at January 31, 2022, primarily driven by reductions in cash and cash equivalents, accounts receivable, and goodwill; total liabilities also decreased by $86.2 million over the same period Condensed Consolidated Balance Sheets (GAAP) (in thousands) | Metric | October 31, 2022 | January 31, 2022 | Change | | :-------------------- | :--------------- | :--------------- | :----- | | Cash and cash equivalents | $42,643 | $152,590 | $(109,947) | | Accounts receivable, net | $124,261 | $179,198 | $(54,937) | | Goodwill | $115,398 | $158,233 | $(42,835) | | Total assets | $507,253 | $664,605 | $(157,352) | | Short-term loan | $50,000 | $100,000 | $(50,000) | | Total liabilities | $279,315 | $365,516 | $(86,201) | | Total stockholders' equity | $227,938 | $299,089 | $(71,151) | [Condensed Consolidated Statements of Cash Flows](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) For the nine months ended October 31, 2022, Cognyte experienced a net cash outflow of $(46.1) million from operating activities, a significant decrease from the $9.6 million inflow in the prior year; financing activities used $(51.4) million, largely due to a $50 million repayment of a short-term loan Condensed Consolidated Statements of Cash Flows (GAAP) - Nine Months Ended October 31 (in thousands) | Metric | 2022 | 2021 | Change | | :-------------------- | :--- | :--- | :----- | | Net cash (used in) provided by operating activities | $(46,137) | $9,589 | $(55,726) | | Net cash used in investing activities | $(13,199) | $(18,358) | $5,159 | | Net cash used in financing activities | $(51,443) | $(39,780) | $(11,663) | | Net decrease in cash, cash equivalents, restricted cash, and restricted cash equivalents | $(111,262) | $(48,834) | $(62,428) | - A significant financing outflow in 2022 was the repayment of a **$50 million short-term loan**[25](index=25&type=chunk) [Non-GAAP Financial Measures & Reconciliations](index=8&type=section&id=Non-GAAP%20Financial%20Measures%20%26%20Reconciliations) [Non-GAAP Revenue](index=8&type=section&id=Non-GAAP%20Revenue) Non-GAAP revenue for the nine months ended October 31, 2022, was $239.5 million, slightly higher than GAAP revenue due to fair value adjustments from business acquisitions; for the three months, non-GAAP revenue was $71.5 million Non-GAAP Revenue Reconciliation (in thousands) | Metric | Nine Months Ended Oct 31, 2022 | Three Months Ended Oct 31, 2022 | | :-------------------- | :----------------------------- | :------------------------------ | | Total GAAP revenue | $238,801 | $71,254 | | Revenue adjustments | $732 | $244 | | **Total non-GAAP revenue** | **$239,533** | **$71,498** | [Non-GAAP Gross Profit and Gross Margin](index=8&type=section&id=Non-GAAP%20Gross%20Profit%20and%20Gross%20Margin) Non-GAAP gross profit for the nine months ended October 31, 2022, was $151.0 million, with a non-GAAP gross margin of 63.0%, an improvement over the GAAP gross margin of 61.7%; for the three months, non-GAAP gross margin was 63.4% compared to GAAP's 62.0% Non-GAAP Gross Profit and Gross Margin Reconciliation - Nine Months Ended Oct 31 (in thousands) | Metric | 2022 | 2021 | | :----- | :--- | :--- | | GAAP gross profit | $147,279 | $251,864 | | GAAP gross margin | 61.7% | 72.1% | | Adjustments (Revenue, Amortization, Stock-based comp, Restructuring, Separation) | $3,734 | $4,812 | | **Non-GAAP gross profit** | **$151,013** | **$256,676** | | **Non-GAAP gross margin** | **63.0%** | **73.3%** | Non-GAAP Gross Profit and Gross Margin Reconciliation - Three Months Ended Oct 31 (in thousands) | Metric | 2022 | 2021 | | :----- | :--- | :--- | | GAAP gross profit | $44,207 | $86,076 | | GAAP gross margin | 62.0% | 72.7% | | Adjustments (Revenue, Amortization, Stock-based comp, Restructuring) | $1,118 | $1,409 | | **Non-GAAP gross profit** | **$45,325** | **$87,485** | | **Non-GAAP gross margin** | **63.4%** | **73.7%** | [Non-GAAP Operating Expenses](index=8&type=section&id=Non-GAAP%20Operating%20Expenses) Non-GAAP operating expenses, including Research and Development (R&D) and Selling, General and Administrative (SG&A), are presented after adjustments for items such as stock-based compensation, restructuring, acquisition, and separation expenses, providing a more focused view of core operational costs [Non-GAAP Research and Development, Net](index=8&type=section&id=Non-GAAP%20Research%20and%20Development%2C%20Net) Non-GAAP Research and Development, Net Reconciliation - Nine Months Ended Oct 31 (in thousands) | Metric | 2022 | 2021 | | :----- | :--- | :--- | | GAAP R&D, net | $109,655 | $105,069 | | Stock-based compensation expenses | $(5,043) | $(6,014) | | Restructuring expenses, net | $(1,329) | $(189) | | Separation expenses, net | — | $(67) | | Other adjustments | $2 | $40 | | **Non-GAAP R&D, net** | **$103,285** | **$98,839** | | As a percentage of non-GAAP revenue | 43.1% | 28.2% | [Non-GAAP Selling, General and Administrative Expenses](index=8&type=section&id=Non-GAAP%20Selling%2C%20General%20and%20Administrative%20Expenses) Non-GAAP Selling, General and Administrative Expenses Reconciliation - Nine Months Ended Oct 31 (in thousands) | Metric | 2022 | 2021 | | :----- | :--- | :--- | | GAAP SG&A expenses | $119,273 | $139,019 | | Stock-based compensation expenses | $(9,192) | $(17,343) | | Acquisition (expenses) benefit, net | $(656) | $(432) | | Restructuring (expenses) benefit, net | $(2,707) | $(429) | | Separation expenses, net | $(52) | $(10,987) | | Provision for legal claim | $(37) | $(1,391) | | Other adjustments | $(4) | $(766) | | **Non-GAAP SG&A expenses** | **$106,625** | **$107,671** | | As a percentage of non-GAAP revenue | 44.5% | 30.7% | [Non-GAAP Operating (Loss) Income, Operating Margin and Adjusted EBITDA](index=8&type=section&id=Non-GAAP%20Operating%20(Loss)%20Income%2C%20Operating%20Margin%20and%20Adjusted%20EBITDA) For the nine months ended October 31, 2022, Cognyte reported a non-GAAP operating loss of $(58.9) million and an Adjusted EBITDA of $(46.7) million, with corresponding margins of (24.6)% and (19.5)%; this reflects significant adjustments from GAAP operating loss of $(82.4) million Non-GAAP Operating (Loss) Income and Adjusted EBITDA Reconciliation - Nine Months Ended Oct 31 (in thousands) | Metric | 2022 | 2021 | | :----- | :--- | :--- | | GAAP operating (loss) income | $(82,402) | $6,571 | | Total adjustments | $23,505 | $43,595 | | **Non-GAAP operating (loss) income** | **$(58,897)** | **$50,166** | | Non-GAAP operating margin | (24.6)% | 14.3% | | Depreciation and amortization | $12,191 | $11,592 | | **Adjusted EBITDA** | **$(46,706)** | **$61,758** | | Adjusted EBITDA margin | (19.5)% | 17.6% | Non-GAAP Operating (Loss) Income and Adjusted EBITDA Reconciliation - Three Months Ended Oct 31 (in thousands) | Metric | 2022 | 2021 | | :----- | :--- | :--- | | GAAP operating (loss) income | $(26,001) | $7,239 | | Total adjustments | $6,618 | $10,884 | | **Non-GAAP operating (loss) income** | **$(19,383)** | **$18,124** | | Non-GAAP operating margin | (27.1)% | 15.3% | | Depreciation and amortization | $3,980 | $3,999 | | **Adjusted EBITDA** | **$(15,403)** | **$22,123** | | Adjusted EBITDA margin | (21.5)% | 18.6% | [Non-GAAP Net (Loss) Income and Diluted EPS](index=9&type=section&id=Non-GAAP%20Net%20(Loss)%20Income%20and%20Diluted%20EPS) For the nine months ended October 31, 2022, non-GAAP net loss attributable to Cognyte was $(73.2) million, resulting in a non-GAAP diluted EPS of $(1.08), an improvement compared to the GAAP net loss of $(87.0) million and diluted EPS of $(1.29) Non-GAAP Net (Loss) Income and Diluted EPS Reconciliation - Nine Months Ended Oct 31 (in thousands, except per share data) | Metric | 2022 | 2021 | | :----- | :--- | :--- | | GAAP net (loss) income attributable to Cognyte Software Ltd. | $(87,028) | $(2,458) | | Total adjustments | $13,821 | $41,102 | | **Non-GAAP net (loss) income attributable to Cognyte Software Ltd.** | **$(73,207)** | **$38,644** | | GAAP diluted net (loss) income per share attributable to Cognyte Software Ltd. | $(1.29) | $(0.04) | | **Non-GAAP diluted net (loss) income per share attributable to Cognyte Software Ltd.** | **$(1.08)** | **$0.58** | Non-GAAP Net (Loss) Income and Diluted EPS Reconciliation - Three Months Ended Oct 31 (in thousands, except per share data) | Metric | 2022 | 2021 | | :----- | :--- | :--- | | GAAP net (loss) income attributable to Cognyte Software Ltd. | $(27,786) | $2,216 | | Total adjustments | $10,919 | $11,686 | | **Non-GAAP net (loss) income attributable to Cognyte Software Ltd.** | **$(16,867)** | **$13,902** | | GAAP diluted net (loss) income per share attributable to Cognyte Software Ltd. | $(0.41) | $0.03 | | **Non-GAAP diluted net (loss) income per share attributable to Cognyte Software Ltd.** | **$(0.25)** | **$0.21** | [Non-GAAP Tax Provision](index=9&type=section&id=Non-GAAP%20Tax%20Provision) The non-GAAP provision for income taxes for the nine months ended October 31, 2022, was $10.1 million, with a non-GAAP effective income tax rate of (16.9)%, significantly differing from the GAAP provision of $2.1 million and an effective tax rate of (2.6)% Non-GAAP Tax Provision Reconciliation - Nine Months Ended Oct 31 (in thousands) | Metric | 2022 | 2021 | | :----- | :--- | :--- | | GAAP provision for income taxes | $2,089 | $4,123 | | GAAP Effective income tax rate | (2.6)% | 76.5% | | Non-GAAP tax adjustments | $8,024 | $1,764 | | **Non-GAAP provision (benefit) for income taxes** | **$10,113** | **$5,887** | | **Non-GAAP effective income tax rate** | **(16.9)%** | **12.2%** | [Revenue on a Constant Currency Basis](index=12&type=section&id=Revenue%20on%20a%20Constant%20Currency%20Basis) For the nine months ended October 31, 2022, reported GAAP revenue decreased by (31.6)%, but on a constant currency basis, the decrease was (30.0)%, indicating a 1.6% negative impact from foreign currency exchange rates; a similar trend was observed for the three-month period Revenue Change on a Constant Currency Basis - Nine Months Ended Oct 31 | Metric | GAAP Revenue | Non-GAAP Revenue | | :----- | :----------- | :--------------- | | Reported period-over-period revenue change | (31.6)% | (31.6)% | | % impact from change in foreign currency exchange rates | 1.6% | 1.6% | | **Constant currency period-over-period revenue change** | **(30.0)%** | **(30.1)%** | Revenue Change on a Constant Currency Basis - Three Months Ended Oct 31 | Metric | GAAP Revenue | Non-GAAP Revenue | | :----- | :----------- | :--------------- | | Reported period-over-period revenue change | (39.8)% | (39.8)% | | % impact from change in foreign currency exchange rates | 1.8% | 1.8% | | **Constant currency period-over-period revenue change** | **(38.0)%** | **(37.9)%** | [Supplemental Information & Disclosures](index=3&type=section&id=Supplemental%20Information%20%26%20Disclosures) [About Non-GAAP Financial Measures](index=3&type=section&id=About%20Non-GAAP%20Financial%20Measures) Cognyte provides non-GAAP financial measures to offer investors useful supplemental information, facilitate comparisons, and align with management's internal metrics; these measures exclude items such as revenue adjustments, amortization of acquired intangibles, stock-based compensation, acquisition/restructuring/separation expenses, legal claims, and other adjustments, as well as using a non-GAAP effective income tax rate to present a clearer view of core operational performance - Non-GAAP financial measures are used to provide investors with useful supplemental information, facilitate comparison of financial results and business trends between periods, and align with key metrics used by management[41](index=41&type=chunk)[42](index=42&type=chunk) - Adjustments to GAAP measures include revenue adjustments, amortization of acquired technology and other acquired intangible assets, stock-based compensation expenses, acquisition expenses, restructuring expenses, separation expenses, provision for legal claim, and other adjustments[44](index=44&type=chunk)[45](index=45&type=chunk)[48](index=48&type=chunk)[49](index=49&type=chunk)[50](index=50&type=chunk)[51](index=51&type=chunk)[52](index=52&type=chunk) - Adjusted EBITDA is defined as net income (loss) attributable to non-controlling interest before interest expense, interest income, income taxes, depreciation expense, amortization expense, and other non-GAAP adjustments[54](index=54&type=chunk) [About Constant Currency](index=14&type=section&id=About%20Constant%20Currency) Constant currency calculations are employed to assess financial performance by excluding the impact of foreign currency exchange rate fluctuations; this is achieved by translating current-period foreign currency results into U.S. dollars using prior-period average exchange rates, thereby facilitating the assessment of underlying business trends - Constant currency calculations translate current-period foreign currency revenue into U.S. dollars using prior-period average foreign currency exchange rates to exclude the effect of fluctuations[38](index=38&type=chunk)[55](index=55&type=chunk) - This method facilitates the assessment of underlying business trends by removing the impact of changes in foreign currency exchange rates[55](index=55&type=chunk) [Caution About Forward-Looking Statements](index=3&type=section&id=Caution%20About%20Forward-Looking%20Statements) This press release contains forward-looking statements that are subject to various known and unknown risks, uncertainties, assumptions, and factors, including customer behavior, supply chain disruptions, macroeconomic conditions, regulatory constraints, and competition, which could cause actual results to differ materially from expectations; the company disclaims any obligation to update these statements unless legally required - Forward-looking statements are based on management's expectations and involve known and unknown risks, uncertainties, assumptions, and other important factors that could cause actual results or conditions to differ materially[16](index=16&type=chunk) - Key risk factors include customer delays or cancellations, global supply chain disruptions, macroeconomic and global conditions (e.g., military actions, COVID-19), regulatory constraints, competition, and risks associated with international operations[16](index=16&type=chunk) - The company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events, changed circumstances, or any other reason, except as otherwise required by law[18](index=18&type=chunk)

Financial Performance - Q2 FYE23 revenue reached $81.1 million[7] - Software revenue was $27.0 million, software services revenue was $45.4 million, and professional services & other revenue was $8.6 million[7] - RPO (Remaining Performance Obligation) at the end of Q2 was $534 million, a sequential increase of approximately $20 million[7] - Non-GAAP gross margin was 65.1%, up approximately 400bps from Q1[7] - Non-GAAP operating expenses were $70.4 million, a sequential reduction of $4.4 million[7] Growth and Strategy - The company experienced a significant revenue decline[4] - Bookings were higher than revenue, driving a higher backlog[4] - The company is focusing resources on high-potential geographies and use cases[5] - Actions are being taken to reduce cost structure and improve backlog conversion visibility[5] Market Position and Outlook - The long-term opportunity remains intact due to pervasive security threats[5] - The company is a market leader with a long history of growth and a strong track record with customers[5] - The board and management are focused on returning to growth and profitability[5]

Financial Data and Key Metrics Changes - Q2 revenue was reported at $81 million, reflecting a significant decline year-over-year and sequentially due to adverse changes in customer behavior [10][28] - The remaining performance obligation (RPO) increased to $534 million, up approximately $20 million from the end of Q1, indicating a significant backlog [11][30] - Gross margin improved to 65.1% on a non-GAAP basis, up approximately 400 basis points sequentially, primarily due to a better software mix [31] Business Line Data and Key Metrics Changes - Software revenue for Q2 was $27 million, a decline of $20.9 million year-over-year but an increase of $2.1 million sequentially [28] - Software services revenue decreased by $8.5 million year-over-year, while professional services and other revenue declined by $5.5 million year-over-year [30] Market Data and Key Metrics Changes - The company experienced longer sales cycles and delays in closing deals across all geographies, attributed to reduced funding and budget constraints faced by customers [18][19] - The company is focusing on geographical priorities, particularly the U.S. government market, which has shown resilience amid budget cuts in other regions [21][22] Company Strategy and Development Direction - The company is implementing three main initiatives: maximizing bookings in high-potential areas, reducing operating expenses to below $70 million in Q3 and below $65 million in Q4, and improving visibility for backlog deployments [21][23][24] - The management emphasized the importance of adapting to changing customer behavior and macroeconomic conditions while maintaining a focus on security solutions [20][26] Management's Comments on Operating Environment and Future Outlook - Management noted that the global economic slowdown is impacting near-term performance, but they are taking actions to focus on territories and use cases with the highest potential [26] - The company expects Q3 revenue to be similar to or lower than Q2, with Q4 revenue anticipated to increase above Q3 levels [25][36] Other Important Information - The company ended the quarter with approximately $55 million in cash and cash equivalents, with cash used in operations amounting to $18.8 million, including a one-time payment of $6.2 million related to a patent settlement [34] - The company has renegotiated some credit facility covenants to provide more future flexibility amid ongoing uncertainties [35] Q&A Session Summary Question: What is the revenue expectation for Q3 and Q4? - Management expects Q3 revenue to be similar or lower than Q2, and Q4 to be better than Q3 [38][39] Question: What is being done to convert the pipeline and drive visibility? - The company is focusing on high-potential areas and has strengthened its management team to adapt to market changes [42][44] Question: Has there been higher sales churn within the sales force? - Yes, the company has experienced higher sales churn this year compared to historical levels [51] Question: Can you provide specifics on cost reduction plans? - Cost reductions are primarily in R&D, with a focus on not impacting customer commitments or growth potential [52] Question: What is the outlook for cash burn in the next quarters? - The company aims to reduce operating expenses to under $70 million in Q3 and under $65 million in Q4, while also accelerating backlog conversion to improve cash flow [54][56]

Exhibit 99.1 Press Release Investor Relations Contact Dean Ridlon Cognyte Software Ltd. IR@cognyte.com Cognyte Announces Second Quarter Results Herzliya, Israel, September 28, 2022 - 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 and six months ended July 31, 2022 ("Q2 FYE23" and "H1 FYE23"). "Security threats are pervasive, and customers need innovative security solutions to ad ...

Financial Data and Key Metrics Changes - Q1 non-GAAP revenue was $87 million, reflecting a significant decline year-over-year [10][28] - Non-GAAP gross margin was 60.8%, with gross profit declining approximately $31 million year-over-year [30] - Non-GAAP operating loss was $22.1 million, with adjusted EBITDA loss of $18.2 million [30][31] - Cash balance at the end of the quarter was $107 million, reflecting solid collections and a $50 million repayment from the credit facility [32] Business Line Data and Key Metrics Changes - Software revenue was $24.9 million, a sharp decline year-over-year due to customer deployment delays and slow pipeline conversion [28][29] - Software services revenue was $45.8 million, down by $4.9 million year-over-year primarily due to federal customers reducing support and subscription spending [29] Market Data and Key Metrics Changes - Total RPO (remaining performance obligations) was slightly above $512 million at the end of Q1, indicating a sequential increase despite year-over-year revenue decline [15][24] - The company faced supply chain challenges that impacted the ability to deliver on quarterly expectations, leading to delays in revenue recognition [16][17] Company Strategy and Development Direction - The company is focused on improving execution and cost structure to navigate current challenges and emerge stronger [9][24] - A new Chief Revenue Officer (CRO) has been hired to enhance internal execution and accelerate pipeline conversion [19][47] - The company aims to maintain its market leadership in investigative analytics and strengthen customer relationships [26][45] Management's Comments on Operating Environment and Future Outlook - Management expressed disappointment in Q1 results but believes the challenges are temporary and are taking steps to address them [9][24] - There is a low visibility period with a broad range of potential outcomes, and guidance cannot be provided at this time [37][24] - Management noted that the pipeline remains healthy, but conversion rates are low due to supply chain issues and macroeconomic factors [38][46] Other Important Information - The company has reduced its headcount by approximately 5% to lower costs [25][48] - Inventory levels have been increased to provide flexibility in addressing market demands [33] Q&A Session Summary Question: Changes in pipeline conversion or supply chain constraints - Management indicated that the situation remains volatile with low visibility and a healthy pipeline but lower conversion rates [37][38] Question: Composition of RPO - Management stated that typically two-thirds of RPO is expected to be recognized within the next 12 months [40] Question: Inventory levels - Management confirmed that current inventory levels are sufficient, with plans for redesign processes to be completed in Q3 [41] Question: Competitive landscape - Management noted no significant changes in competition and emphasized strong customer relationships and technology [45][46] Question: Cost reduction areas - Cost reductions were made across the board, including R&D, totaling about 5% [48] Question: Reasons for government customers delaying orders - Management speculated that delays are related to supply chain issues and macroeconomic factors, rather than COVID-19 [54] Question: Revenue from perpetual vs. term-based licenses - Management confirmed that over 75% of revenue comes from perpetual licenses [56] Question: Maintenance revenue decline - Management indicated that customers reducing support and subscriptions is not uncommon and may be reallocating budgets [59]

| --- | --- | --- | |--------------------------|-------|-------| | | | | | | | | | | | | | | | | | Q1 FYE23 Conference Call | | | 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 guarantees of future performance and they are based on management's ex ...

Exhibit 99.1 Press Release Investor Relations Contact Dean Ridlon Cognyte Software Ltd. IR@cognyte.com Cognyte Announces First Quarter Results Herzliya, Israel, June 28, 2022 - 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 ended April 30, 2022 ("Q1 FYE23"). "Cognyte has more than two decades of delivering innovative solutions, strong customer relationships, profitable gr ...

Exhibit 99.1 Press Release Investor Relations Contact Dean Ridlon Cognyte Software Ltd. IR@cognyte.com Cognyte Announces Fourth Quarter and Fiscal Year Ended January 31, 2022 Results Herzliya, Israel, April 5, 2022 - 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, 2022 ("Q4 FYE22" and "FYE22"). "In the fourth quarter, revenue was $125 million, up ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 20-F o REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OF THE SECURITIES EXCHANGE ACT OF 1934 OR þ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended January 31, 2022 OR o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 OR o SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Commission File ...