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nyte Software .(CGNT) - 2025 Q4 - Earnings Call Transcript
CGNTnyte Software .(CGNT)2025-04-02 14:49
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Financial Data and Key Metrics Changes - Revenue for Q4 grew by 13% year-over-year to 94.5million,withnon−GAAPgrossprofitincreasingby1794.5 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 29million,morethanthreetimesthepreviousfiscalyear[12][13]−Non−GAAPgrossmarginfortheyearwas7129 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 186.6million,or53186.6 million, or 53% of total revenue [27] - In Q4, software revenue was 37.4 million, an increase of 6millionyear−over−year,whilesoftwareservicesrevenuewas6 million year-over-year, while software services revenue was 45.9 million, up by 3.6million[33][35]−RecurringrevenueinQ4reached3.6 million [33][35] - Recurring revenue in Q4 reached 47.3 million, or 50% of total revenue, compared to 42.9millioninthesameperiodlastyear[35]MarketDataandKeyMetricsChanges−Geographicrevenuemixfortheyearwas5542.9 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 45millionversuslastyear,withshort−termRPOincreasingto45 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 392millionforfiscal′26[17][44]−ThestrategyincludessignificantinvestmentsintheU.S.market,focusingonstate,local,andfederallawenforcementagencies,withplanstohiremoresalespersonnelandincreasemarketingefforts[56][79]Management′sCommentsonOperatingEnvironmentandFutureOutlook−ManagementexpressedconfidenceintheU.S.marketdespitecurrentpolicyuncertainties,notingstrongengagementwithfederalagenciesandpositivefeedbackfromdemonstrations[56][58]−Thecompanyanticipatescontinuedglobaldemandandevolvingmarketconditions,believingthattheirstrategywilldrivesustainedprofitablegrowth[13][18]OtherImportantInformation−Thecompanyendedtheyearwithastrongbalancesheet,cashpositionof392 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 47million[31][32]−Thecompanyinitiatedastockrepurchaseprogram,buyingabout586,000sharesforapproximately47 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]