Cognyte Reports Strong Second Quarter Results with Accelerating Software Growth and Expanding Profitability

Revenue grew 12% to $109.2 million; adjusted EBITDA grew 35.7% to $14.9 million; non-GAAP diluted EPS nearly doubled to $0.15; total software revenue grew 21% and recurring revenue grew 18% The Company reiterates its FYE27 outlook and remains on track to achieve its FYE28 targetsHERZLIYA, Israel--(BUSINESS WIRE)--Cognyte Software Ltd. (NASDAQ: CGNT) (the “Company,” “Cognyte,” “we,” “us” and “our”), a global leader in AI-powered investigative analytics solutions, today announced results for the three and six months ended July 31, 2026 ("Q2 FYE27"). Financial Summary for Three Months Ended July 31, 2026 Q2 FYE27 revenue was $109.2 million, up approximately 12.0% compared with the same period last year, reflecting consistent demand for the Company’s software. Q2 FYE27 total software revenue, which is the combination of software and software services revenue, increased 20.9% to $100.8 million and represented more than 92% of total revenue, compared with approximately 86% in the same period last year. The increase was driven by healthy demand for our software solutions. Q2 FYE27 recurring revenue(1) increased by 18.4% to $56.2 million and represented 51.4% of total revenue. The growth was primarily driven by the adoption of the Company’s subscription offerings and provides enhanced visibility into future revenue streams. Q2 FYE27 non-GAAP operating income was $12.2 million, an increase of $4.2 million or 52.5% from $8.0 million in the same period last year, significantly outpacing revenue growth. Q2 FYE27 adjusted EBITDA was $14.9 million, compared to $11.0 million in the same period last year, up 35.7% and growing significantly faster than revenue. Q2 FYE27 diluted non-GAAP EPS nearly doubled to $0.15 per share compared with $0.08 per share in the same period last year. Q2 FYE27 GAAP operating income was $4.7 million, an increase of $1.9 million or 69.7% from operating income of $2.7 million in the same period last year. Q2 FYE27 GAAP net income attributable to Cognyte was $4.1 million, compared with $1.5 million in the same period last year. Q2 FYE27 diluted GAAP EPS tripled to $0.06 per share, compared with $0.02 the same period last year. Q2 FYE27 net cash provided by operating activities was $1.1 million, compared with net cash used in operating activities of $6.3 million in the same period last year. This improvement reflects stronger collections, improved profitability and disciplined working-capital management. The quarter also included annual incentive payments and other seasonal working-capital uses. Financial Summary for Six Months Ended July 31, 2026 H1 FYE27 revenue was $214.7 million, up approximately 11.2% compared to the same period last year. H1 FYE27 total software revenue, which is the combination of software and software services revenue, was $198.1 million, up approximately 19.8% compared to the same period last year. H1 FYE27 recurring revenue(1) was $108.1 million, up 14.2% compared to the same period last year. H1 FYE27 non-GAAP operating income was $22.9 million, an increase of $7.3 million or 47.2% from operating income of $15.6 million in the same period last year. We achieved these results despite approximately $7 million of net unfavorable foreign exchange impact on operating profitability in the first half of the year. H1 FYE27 adjusted EBITDA was $28.5 million, compared to $21.3 million in the same period last year, up 33.7% and growing significantly faster than revenue. H1 FYE27 diluted non-GAAP EPS increased to $0.19 per share compared with $0.15 per share in the same period last year. H1 FYE27 GAAP operating income was $9.1 million, up 85.1% from operating income of $4.9 million in the same period last year. H1 FYE27 GAAP net income attributable to Cognyte was $1.1 million, compared to $0.5 million in the same period last year. During the first half of FYE27, the Company added 40 new customers, compared with 31 in the same period last year. Balance Sheet The Company ended the second quarter with $102.2 million in cash and no debt, providing significant flexibility. During H1 FYE27, the company repurchased approximately 1.5 million ordinary shares for an aggregate purchase price of approximately $13.5 million under the share repurchase program approved by the board of directors in July 2025. Since launching its first repurchase program in November 2024, the Company has repurchased approximately $40.2 million of shares through the end of Q2 FYE27, out of the $60 million authorized across the Company’s repurchase programs. The Company’s capital allocation priorities remain unchanged: investing organically to support growth, evaluating strategic M&A opportunities with the potential to create returns significantly in excess of the Company’s cost of capital, and using share repurchases opportunistically when they represent a compelling use of capital. Management Commentary “Cognyte delivered a strong quarter, with broad global momentum and continued progress across our strategic growth pillars,” said Elad Sharon, Cognyte’s Chief Executive Officer. “The market is moving directly toward what we have built for: mission-critical intelligence in complex, high-stakes environments, powered by trusted AI and sovereign control, and grounded in deep innovation and domain expertise. Our strategy is working, our execution is strong, and the quality of our business continues to improve. We are moving forward with confidence and ambition.” “Our second quarter results demonstrate the continued strength of our financial model,” said David Abadi, Cognyte’s Chief Financial Officer. “Total software revenue grew 21% and recurring revenue grew 18%, both significantly faster than total revenue, while profitability again expanded substantially faster than revenue. Combined with expected renewals of recurring business and commercial activity since quarter-end, we have visibility into approximately 85% of the next 12 months' revenue. This visibility, combined with our strong execution, reinforces our confidence in our full-year outlook and our FYE28 targets.” FYE27 Outlook The company narrowed its FYE27 revenue range around an unchanged midpoint and reaffirmed its profitability outlook for the year ending January 31, 2027 (“FYE27” and “Fiscal 2027”), as follows: Revenue: $448 million, with a range of +/- 2%, 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 Second Quarter and Six Months Ended July 31, 2026 Q2 FYE27 and H1 FYE27 total software revenue, which is the combination of software and software services revenue, increased by $17.5 million, and $32.8 million, up 20.9% and 19.8%, respectively, compared to the same period last year. Q2 FYE27 and H1 FYE27 software revenue increased by $12.6 million and $22.5 million, up 34.5% and 30.5%, respectively, compared to the same period last year. Q2 FYE27 and H1 FYE27 software services revenue increased by $4.8 million and $10.2 million, up 10.3% and 11.2%, respectively, compared to the same period last year. Q2 FYE27 and H1 FYE27 professional services and other revenue decreased by $5.7 million and $11.1 million, respectively, compared with the same period last year. Professional services represented less than 8% of total revenue during the second quarter, compared with approximately 15% in the comparable period last year, reflecting the increasing software content of the business. This mix shift supports higher-quality revenue, stronger margins and greater scalability. Q2 FYE27 non-GAAP gross profit and margin were $80.5 million and 73.7%, respectively, a significant increase of $10.1 million and 154 bps improvement compared to the same period last year. The increase is primarily driven by revenue mix, scale, and operational efficiencies. Q2 FYE27 billings(2) were $76.3 million compared to $93.0 million in the same period last year. Billings may vary between quarters based on contract timing. On a trailing twelve-month basis, billings were approximately 95% of revenue, which we believe reflects the underlying strength of the business. 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. Conference Call InformationRead the full story here

Cognyte Reports Strong Second Quarter Results with Accelerating Software Growth and Expanding Profitability

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