Cognyte Reports Fourth Quarter and Fiscal Year 2026 Financial Results
Cognyte Software Ltd. (NASDAQ: CGNT) (the “Company,” “Cognyte,” “we,” “us” and “our”), a global leader in software-driven technology for investigative analytics, today announced re...
Reports strong Q4 and full-year results with double-digit growth, and operating leverage driving faster profitability growth
Guides to fiscal 2027 revenue of approximately $448 million with additional margin expansion
HERZLIYA, Israel: Cognyte Software Ltd. (NASDAQ: CGNT) (the “Company,” “Cognyte,” “we,” “us” and “our”), a global leader in software-driven technology for investigative analytics, today announced results for the three months and year ended January 31, 2026 ("Q4 FYE26" and "FYE26").
Financial Summary for Three Months Ended January 31, 2026
- Q4 FYE26 Revenue was $106.2 million, up approximately 12.4% compared to the same period last year.
- Q4 FYE26 GAAP operating income was $5.2 million, compared to operating income of $0.7 million in the same period last year.
- Q4 FYE26 Non-GAAP operating income was $12.1 million, compared to operating income of $6.0 million in the same period last year.
- Q4 FYE26 GAAP Net income was $5.1 million, compared to a net loss of $0.2 million in the same period last year. The improvement is largely due to the significant increase in operating income.
- Q4 FYE26 Adjusted EBITDA was $15.0 million, compared to $9.3 million in the same period last year, up 62.5% and growing significantly faster than revenue.
Financial Summary for the Year Ended January 31, 2026
- FYE26 Revenue was $400.0 million, up approximately 14.1% compared to last year.
- FYE26 GAAP operating income was $13.3 million, a significant turnaround from an operating loss of $5.1 million last year.
- FYE26 Non-GAAP operating income was $36.7 million, more than doubling the $15.7 million generated last year.
- FYE26 GAAP Net income was $4.6 million, compared to a net loss of $7.2 million last year.
- FYE26 Adjusted EBITDA was $48.2 million, compared to $29.1 million last year, representing an increase of approximately 66%.
Balance Sheet and Net Cash Provided by Operating Activities
- During Q4 FYE26, the Company bought approximately 592,000 ordinary shares for an aggregate purchase price of approximately $5.5 million under the share repurchase program approved by the board of directors in July 2025.
- In early March, the board approved a $20 million increase to the Company’s existing share repurchase program. This authorization reflects the board’s ongoing commitment to long-term shareholder value creation and confidence in the Company’s growth prospects. Since the initiation of the Company’s first repurchase program in November 2024, until the end of Q4, the Company has repurchased a total of approximately $26.7 million worth of shares, out of total programs authorized for $60 million.
- During the fourth quarter, we further strengthened our cash position, which increased to $116.9 million, with no debt, reflecting disciplined working-capital management and strong collections.
- During the three months ended January 31, 2026, net cash provided by operating activities was $20.0 million, compared to $18.7 million in the same period last year, benefiting from strong collections and higher profitability.
Management Commentary
“Cognyte’s mission – to help make the world a safer place – continues to guide everything we do,” said Elad Sharon, Cognyte’s chief executive officer. “We translated that mission into strong growth, higher margins and improved profitability. At the same time, we continued to advance our technology, particularly in AI-driven analytics, enabling our customers to make faster and more effective decisions in critical moments. As global threats become more complex and dynamic, the need for trusted, mission-critical intelligence is increasing. We believe Cognyte is well positioned at the intersection of data, analytics and operational impact, and we remain confident in our path toward our fiscal 2028 targets.”
“Our fiscal 2026 performance demonstrates the durability of our financial model, the strength of our differentiated solutions and the financial discipline that drives our results,” said David Abadi, Cognyte’s chief financial officer. “With our strong balance sheet, we continue to allocate cash to the highest return opportunities, including returning capital to shareholders. For fiscal 2027, we expect another year of double-digit revenue growth, with operating leverage driving profitability at a significantly faster pace.”
FYE27 Outlook
Our outlook for the year ending January 31, 2027 (“FYE27” and “Fiscal 2027”) is as follows:
- Revenue: $448 million, with a range of +/- 3%, which represents approximately 12% year-over-year growth at the midpoint of the range.
- Adjusted EBITDA: Approximately $68 million at the midpoint of our revenue range, representing approximately 40% year-over-year growth.
- Non-GAAP Diluted EPS: $0.47 at the midpoint of our revenue range.
Additional Financial and Operational Data for the Fourth Quarter and Year Ended January 31, 2026
- Q4 FYE26 and FYE26 Total Software revenue, which is the combination of software and software services revenue, increased by $11.9 million and $42.7 million, up 14.2% and 13.9%, respectively, compared to the same period last year.
- Q4 FYE26 and FYE26 Software revenue increased by $8.5 million and $35.9 million, up 22.6% and 28.6%, respectively, compared to the same period last year. The increase was mainly driven by increased demand for our software solutions.
- Q4 FYE26 and FYE26 Software services revenue increased by $3.4 million and $6.7 million, respectively, compared to the same period last year.
- Q4 FYE26 and FYE26 Professional services and other revenue decreased by $0.1 million and increased by $6.7 million, respectively, compared to the same period last year primarily related to revenue recognition timing.
- Q4 FYE26 Recurring Revenue(1) increased by 5.6% to $50.0 million, compared to the same period last year and was 47.1% of total revenue.
- FYE26 Recurring Revenue(1) increased by 3% to $192.1 million, compared to the same period last year and was 48% of total revenue.
- Q4 FYE26 Non-GAAP Gross profit and margin were $79.4 million and 74.7%, respectively, a significant increase of $11.8 million and 319 bps improvement compared to the same period last year. The increase is primarily driven by scale and operational efficiencies.
- FYE26 Non-GAAP Gross profit and margin were $292.0 million and 73.0%, respectively, an increase of $43.0 million and approximately 200 bps improvement compared to the same period last year.
- Q4 FYE26 Billings(2) increased by 15.6% to $109.9 million compared to the same period last year.
- Total Backlog(3) at the end of Q4 FYE26 was $433.4 million and short-term Backlog was $267.0 million.
- Total RPO(4) was $557.2 million at the end of Q4 FYE26 compared to $545.8 million at the end of Q4 FYE25.
- Short-term RPO(4) at the end of Q4 FYE26 increased to $369.5 million, providing solid visibility into revenue over the next 12 months.
For information about the non-GAAP financial measure or key metric, please see “Supplemental Information About Non-GAAP Financial Measures and Other Key Metrics” at the end of this release.
(1) Recurring Revenue – Recurring revenue is comprised primarily of revenue from support contracts as well as revenue from subscription offerings.
(2) Billings – Revenue plus the change in contract liabilities, contract assets and unbilled balances.
(3) Backlog represents unbilled amounts contracted under contracts deemed certain to be invoiced.
(4) RPO, or remaining performance obligations, represents contracted revenue that has not yet been recognized that will be invoiced and recognized as revenue in future periods.
Conference Call Information
We will conduct a conference call today at 8:30 a.m. ET to discuss our results for the three months and full year ended January 31, 2026. A real-time webcast of the conference call with presentation slides will be available in the Investor Relations section of Cognyte’s website. Those interested in participating in the question-and-answer session need to register at: https://register-conf.media-server.com/register/BI7b356f5102fb48b38b4b5e933448cc70 to receive the dial-in numbers and unique PIN to access the call seamlessly. It is recommended that you join 10 minutes prior to the event start (although you may register and dial in at any time during the call). An archived webcast of the conference call will also be available in the “Investors” section of the company’s website.
About Cognyte Software Ltd.
Cognyte is a leading software-led technology company, focused on investigative analytics solutions that help customers generate actionable intelligence from large volumes of complex data, across diverse operational domains, in order to enhance public safety and security. Our solutions are used primarily by law enforcement, national security, national and military intelligence agencies, and other organizations to address a wide range of investigative and operational challenges. Drawing on decades of investigative analytics domain expertise, our platforms and solutions enable customers to ingest, fuse and analyze structured and unstructured data from multiple sources, uncover hidden patterns and connections, and make faster, better-informed decisions. Our offerings leverage state-of-the-art Artificial Intelligence (AI), including big data analytics and advanced machine learning, as well as generative and AI-assisted capabilities that enhance user productivity and accelerate investigative workflows, together with proven investigative methodologies, to support retrospective investigations and real time, near real-time and predictive decision making. Hundreds of customers rely on our solutions to accelerate investigations, improve resolution rates and better anticipate, predict and mitigate threats with greater precision. Learn more at www.cognyte.com.
About Non-GAAP Financial Measures and Other Key Metrics
This press release and the accompanying tables include non-GAAP financial measures and other key metrics. For a description of these non-GAAP financial measures and other key metrics, including the reasons management uses each measure and metric, and reconciliations of non-GAAP financial measures presented for completed periods to the most directly comparable financial measures prepared in accordance with GAAP, please see the tables below as well as "Supplemental Information About Non-GAAP Financial Measures" at the end of this press release.
Our non-GAAP outlook for FYE27 excludes the following GAAP measures for which we are able to provide a range of probable significance:
- Stock-based compensation is expected to be between approximately $22.5 and $24 million, assuming market prices for our ordinary shares are generally consistent with current levels.
- Amortization expense of other acquired intangible assets is expected to be approximately $0.6 million.
For additional information about our expectations for FYE27, please refer to the Q4 FYE26 conference call we will conduct on March 25, 2026.
Our non-GAAP outlook, unless otherwise specified, reflects foreign currency exchange rates approximately consistent with current rates, and does not include the potential impact of any business acquisitions that may close after the date hereof.
We are unable, without unreasonable effort, to provide a reconciliation for other GAAP measures which are excluded from our non-GAAP outlook, including the impact of future business acquisitions or future acquisition expenses, future restructuring expenses, and non-GAAP income tax adjustments due to the level of unpredictability and uncertainty associated with these items. For these same reasons, we are unable to assess the probable significance of these excluded items. While historical results may not be indicative of future results, actual amounts for the three months and year ended January 31, 2026, and 2025, respectively, for the GAAP measures excluded from our non-GAAP outlook appear in Table 4 of this press release.
Caution About Forward-Looking Statements
This press release contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995 and Section 21E of the United States Securities Exchange Act of 1934. Forward-looking statements include statements regarding expectations, predictions, views, opportunities, plans, strategies, beliefs, and statements of similar effect relating to Cognyte. All statements contained in this press release that do not relate to matters of historical fact should be considered forward-looking statements. These forward-looking statements do not guarantee any future performance and are based solely on management's expectations that involve a number of known and unknown risks, uncertainties, assumptions and other important factors, any of which could cause our actual results or conditions to differ materially from those expressed in or implied by the forward-looking statements. Some of the factors that could cause our actual results or conditions to differ materially from current expectations include, among others: uncertainties regarding the impact of changes in macroeconomic and/or global conditions; risks related to geopolitical changes and investor visibility constraints; risks related to new tariffs and retaliatory measures that may adversely affect the economy and reduce government spending; risks related to the impact of inflation and related volatility on our financial performance; risks relating to adverse changes to the regulatory constraints to which we are subject; risks related to the impact of disruptions to the global supply chain; risks related to conditions in Israel including conflicts in the Middle East; risks resulting from health crises; risks associated with customer concentration and challenges associated with our ability to accurately forecast revenue and expenses; risks associated with political and reputational factors related to our business or operations; risks associated with our ability to keep pace with technological advances and challenges and evolving industry standards; risks relating to proprietary rights infringement claims; risks relating to defects, operational problems, or vulnerability to cyber-attacks of our products or any of the components used in our products; risks related to the strengths of our intellectual property rights protection; risks that we may be unable to establish and maintain relationships with key resellers, partners, and system integrators and risks associated with our reliance on limited number of suppliers for certain key components and hardware used in our solutions; risks due to the aggressive competition in all of our markets; risks associated with the implementation and use of artificial intelligence tools and technology, including competitive, technological, regulatory, intellectual property, data protection and cybersecurity risks; challenges associated with our long sales cycles and with the sophisticated nature of our solutions; risks associated with our ability or costs to retain, recruit and train qualified personnel; risks relating to our ability to properly manage investments in our business and operations, and execute on growth or strategic initiatives; risks associated with acquisitions, strategic investments, partnerships or alliances; risks of security vulnerabilities or lapses, including cyber-attacks, information technology system breaches, failures or disruptions; risks associated with the mishandling or perceived mishandling of sensitive, confidential or classified information; risks associated with our failure to comply with applicable laws; risks associated with our credit facilities or that we may experience liquidity or working capital issues and related risks that financing sources may be unavailable to us on reasonable terms; risks associated with changing applicable tax laws and regulations, tax rates, and the continuing availability of expected tax benefits in the countries in which we operate; risks associated with our significant international operations, including due to our Israeli operations, fluctuations in foreign exchange rates, and exposure to regions subject to political or economic instability; risks associated with complex and changing regulatory environments relating to our operations and the markets we operate in; risks relating to the adequacy of our existing infrastructure, systems, processes, policies, procedures, internal controls and personnel for our current and future operations and reporting needs; risks related to the tax treatment of our spin-off from Verint; risks related to our share repurchase programs; risks associated with different corporate governance requirements applicable to Israeli companies; risks associated with being a foreign private issuer; and other risks set forth in Section 3.D - “Risk Factors” in our latest annual report on Form 20-F for the fiscal year ended January 31, 2026, which is being filed with the Securities and Exchange Commission (the "SEC") on March 25, 2026, and in our subsequent filings with the SEC. In addition, we operate in a very competitive and rapidly changing environment. New risks and uncertainties emerge from time to time. It is not possible for our management to predict all risks and uncertainties, nor can we assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements that we may make. In light of these risks, uncertainties and assumptions, the forward-looking events and circumstances discussed in this release are inherently uncertain and may not occur, and actual results could differ materially and adversely from those anticipated or implied in the forward-looking statements. Accordingly, you should not rely upon forward-looking statements as predictions of future events. Any forward-looking statement made in this press release speaks only as of the date hereof. Except as otherwise required by law, 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.
Table 1 COGNYTE SOFTWARE LTD. Condensed Consolidated Statements of Operations | ||||||||||||||||
|
|
|
|
| ||||||||||||
|
| Year Ended January 31, |
| Three Months Ended January 31, | ||||||||||||
|
|
| 2026 |
|
|
| 2025 |
|
|
| 2026 |
|
|
| 2025 |
|
(in thousands except share data) |
| (Audited) |
| (Audited) |
| (Unaudited) |
| (Unaudited) | ||||||||
Revenue: |
|
|
|
|
|
|
|
| ||||||||
Software |
| $ | 161,760 |
|
| $ | 125,815 |
|
| $ | 45,904 |
|
| $ | 37,435 |
|
Software service |
|
| 187,589 |
|
|
| 180,872 |
|
|
| 49,318 |
|
|
| 45,914 |
|
Professional service and other |
|
| 50,692 |
|
|
| 43,945 |
|
|
| 11,020 |
|
|
| 11,156 |
|
Total revenue |
|
| 400,041 |
|
|
| 350,632 |
|
|
| 106,242 |
|
|
| 94,505 |
|
Cost of revenue: |
|
|
|
|
|
|
|
| ||||||||
Software |
|
| 24,935 |
|
|
| 19,988 |
|
|
| 8,142 |
|
|
| 6,173 |
|
Software service |
|
| 44,420 |
|
|
| 45,184 |
|
|
| 11,562 |
|
|
| 11,833 |
|
Professional service and other |
|
| 40,985 |
|
|
| 38,538 |
|
|
| 7,790 |
|
|
| 9,460 |
|
Total cost of revenue |
|
| 110,340 |
|
|
| 103,710 |
|
|
| 27,494 |
|
|
| 27,466 |
|
Gross profit |
|
| 289,701 |
|
|
| 246,922 |
|
|
| 78,748 |
|
|
| 67,039 |
|
Operating expenses: |
|
|
|
|
|
|
|
| ||||||||
Research and development, net |
|
| 122,336 |
|
|
| 108,274 |
|
|
| 32,621 |
|
|
| 28,077 |
|
Selling, general and administrative |
|
| 153,651 |
|
|
| 143,516 |
|
|
| 40,871 |
|
|
| 38,225 |
|
Amortization of other acquired intangible assets |
|
| 453 |
|
|
| 258 |
|
|
| 96 |
|
|
| 40 |
|
Total operating expenses |
|
| 276,440 |
|
|
| 252,048 |
|
|
| 73,588 |
|
|
| 66,342 |
|
Operating income (loss) |
|
| 13,261 |
|
|
| (5,126 | ) |
|
| 5,160 |
|
|
| 697 |
|
Other (expenses) income, net: |
|
|
|
|
|
|
|
| ||||||||
Interest income |
|
| 2,033 |
|
|
| 2,470 |
|
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