Herzliya, Israel, December 20, 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 nine months ended October 31, 2022 (“Q3 FYE23” and “YTD FYE23”).
- Revenue: $71.3 million (GAAP) and $71.5 million (non-GAAP)
- Gross Margin: 62.0% (GAAP) and 63.4% (non-GAAP)
- Diluted EPS: $(0.41) (GAAP) and $(0.25) (non-GAAP)
YTD FYE23 Highlights
- Revenue: $238.8 million (GAAP) and $239.5 million (non-GAAP)
- Gross Margin: 61.7% (GAAP) and 63.0% (non-GAAP)
- Diluted EPS: $(1.29) (GAAP) and $(1.08) (non-GAAP)
“In the third quarter, we continued to win large orders and our backlog increased sequentially. At the same time, slow backlog conversion drove a sequential revenue decline. We expect to resume sequential revenue growth in the fourth quarter of fiscal year 2023, which we believe will be a turning point. For fiscal year 2024, we are targeting revenue to grow by approximately 5% compared to the current year,” said Elad Sharon, Cognyte’s chief executive officer.
“Operationally, we simplified and improved the focus of the Company during challenging macro-economic conditions. As part of that effort, we successfully completed the previously announced divestiture of our Situational Intelligence solutions on December 1, 2022. Looking forward, we believe our differentiated technology and strong customer relations position us for long-term growth and profitability,” continued Mr. Sharon.
“We took actions to improve our cost structure and improve cash flow from operations. Based on our revenue growth outlook and the actions we have taken, we are targeting about breakeven cash flow from operations in the current quarter and for the full year ending January 31, 2024,” said David Abadi, Cognyte’s chief financial officer.
Q4 FYE23 Revenue Outlook
Our non-GAAP outlook for the three months ending January 31, 2023 (“FYE23”) is as follows:
- Revenue: $65 to $74 million (includes approximately $2 million of revenue from one month of Situational Intelligence solutions)
Our non-GAAP outlook for Q4 FYE23 excludes the following GAAP measures which we are able to quantify with reasonable certainty, as described further below under “Supplemental Information About non-GAAP Financial Measures and Operating Metrics”:
- Revenue adjustments are expected to be approximately $0.2 million.
- Amortization of intangible assets of approximately $0.3 million.
Our non-GAAP outlook for Q4 FYE23 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 $4.6 million and $5.0 million, assuming market prices for our ordinary shares are generally consistent with current levels.
FYE24 Revenue Outlook
Our GAAP outlook for the year ending January 31, 2024 (“FYE24”) is as follows:
- Revenue: Approximately 5% growth from FYE23 revenue excluding Situational Intelligence solutions
For additional information about our expectations for Q4 FYE23 and FYE24, please refer to the Q3 FYE23 conference call we will conduct on December 20, 2022.
Our non-GAAP outlook does not include the potential impact of any in-process business acquisitions that may close after the date hereof, and, unless otherwise specified, reflects foreign currency exchange rates approximately consistent with current rates.
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 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 and nine months ended October 31, 2022, and 2021, respectively, for the GAAP measures excluded from our non-GAAP outlook appear in Table 4 of this press release.
Conference Call Information
We will conduct a conference call today at 8:30 a.m. ET to discuss our results for the three and nine months ended October 31, 2022. 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.vevent.com/register/BI819f08c48b61449b99a651dbe78c5140 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.
This press release and the accompanying tables include non-GAAP financial measures. For a description of these non-GAAP financial measures, including the reasons management uses each measure, 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.
About Cognyte Software Ltd.
We are a global leader in investigative analytics software that empowers governments and enterprises with Actionable Intelligence for a Safer World™. Our open software is designed to help governments and enterprises accelerate and improve the effectiveness of investigations. Hundreds of government and enterprise customers rely on our solutions to accelerate and conduct investigations and derive insights, with which they identify, neutralize, and tackle threats to national security, personal safety, and various forms of criminal activity.
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