nyte Software .(US:CGNT)2025-09-09 13:32Financial Data and Key Metrics Changes - Revenue for Q2 grew by approximately 16% year-over-year to about $98 million, with software revenue increasing by 35.9% year-over-year to $36.6 million [5][17] - Non-GAAP gross profit increased by about 17% year-over-year, with a gross margin of 72.1%, expanding by 81 basis points year-over-year [5][19] - Adjusted EBITDA for the quarter was approximately $11 million, representing a growth of about 33% compared to the previous year [5][20] - Cash flow from operating activities was negative $6 million, primarily due to expected seasonal expenses [5][22] - For the fiscal year ending January 31, 2026, the company expects revenue of approximately $397 million, representing about 13% year-over-year growth [15][24] Business Line Data and Key Metrics Changes - Total software revenue for the quarter was approximately $83.3 million, representing 85.5% of total revenue [17] - Professional services revenue in Q2 was $14.2 million, an increase of $2 million over last year [18] - Recurring revenue for Q2 was $47.4 million, representing 48.7% of total revenue [18] Market Data and Key Metrics Changes - The U.S. remains a cornerstone of the growth strategy, with ongoing efforts to expand presence and strategic partnerships [10][11] - Total remaining performance obligations (RPO) at the end of Q2 was $574.5 million, up from $567.7 million at the same period last year [23] - Q2 billings were $93 million, an increase of about 20% compared to the same period last year [24] Company Strategy and Development Direction - The company aims for $500 million in revenue by the fiscal year ending January 31, 2028, with gross margins of about 73% and adjusted EBITDA margins above 20% [14] - The technology stack is built on three layers: signal processing, insight mining, and investigative analytics, focusing on operational intelligence solutions [8][9] - The company is actively preparing for key upcoming conferences to showcase capabilities and strengthen relationships [13] Management's Comments on Operating Environment and Future Outlook - Management noted that the global environment is marked by heightened security challenges, creating sustained demand for advanced intelligence solutions [7][10] - The company is confident in achieving its financial targets due to growing market needs and proven technology leadership [14][15] - Management acknowledged temporary challenges in U.S. agency procurement but remains optimistic about future growth [11][12] Other Important Information - The class action lawsuit was fully dismissed with no additional appeals possible [27] - The company completed a share repurchase program, repurchasing about 2.1 million ordinary shares for a total of $20 million [22] Q&A Session Summary Question: Can you help us think through your updated assumptions around the U.S. federal environment? - Management indicated that while the U.S. represents a significant opportunity, it currently contributes a small portion of the business, with expectations for growth over time [29][30] Question: Are budgets starting to open up at all? - Management acknowledged headwinds in U.S. budgets but noted successful customer acquisitions and follow-on orders [33][34] Question: How much of the growth came from existing customers versus new products? - Growth primarily comes from existing customers, with new customers starting small and growing over time [41][42] Question: What is driving the displacement of incumbents? - The company attributes displacement to advanced technology, R&D investments, and successful proof-of-concept demonstrations [44][46] Question: How is the overall deal pipeline turning versus six to twelve months ago? - Management reported a healthy demand environment, with increasing traction from existing customers seeking modernization [63][64]