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- **Revenue Beat & Guidance Raise**: Q3 revenue $100.7M (+13.2% YoY), full-year $400M (+14% YoY) with EBITDA $47M (+60% YoY).
- **AI-Driven Growth**: 73.1% gross margin, 60% EBITDA expansion, and $5M follow-on deal highlight recurring revenue strength.
- **U.S. Expansion Progress**: LexisNexis partnership training underway, with federal agencies resuming post-shutdown discussions.
- **Margin Expansion**: Gross margin 73%, targeting 20%+ EBITDA margin by FY28 through reduced services dependency.


**【Management Opening Remarks】**
- Dean Ridlon introduced the call, emphasizing the importance of the earnings release and the risks associated with forward-looking statements. He highlighted the company's focus on non-GAAP financial measures for comparability with peers.

**【CEO Summary Section】**
- **Revenue Growth**: Q3 revenue of $100.7 million (+13.2% YoY), driven by software solutions. Full-year guidance raised to $400 million (+14% YoY) with adjusted EBITDA of $47 million (+60% YoY).
- **Major Deals**: Secured a $5 million follow-on subscription with a Tier 1 military intelligence organization, building on a $10 million perpetual award. Renewals and expansions from existing customers reflect strong repeat business.
- **U.S. Expansion**: New partnership with LexisNexis Risk Solutions to broaden reach in federal and state markets. Q3 included joint training for LexisNexis sales teams, with early-stage customer engagement.
- **AI Differentiation**: Emphasized the company's ability to correlate multi-domain data to uncover hidden threats, leading to 13% YoY revenue growth and 60% YoY EBITDA expansion.

**【CFO Financial Commentary】**
- **Gross Margin**: 73.1% (up 297bps YoY), driven by software revenue growth and cost efficiencies. Non-GAAP operating income tripled to $9 million, with cash flow from operations at $25 million.
- **Recurring Revenue**: 47.1% of total revenue, supported by $117.9 million in deferred revenue and $458.7 million in backlog.
- **Tax & FX**: Higher tax expenses due to regional revenue mix and currency fluctuations, but annual tax guidance remains $11 million.
- **Share Repurchases**: $1.3 million spent on 152,000 shares, with plans to continue disciplined capital allocation.

**【Q&A Highlights】**
- **Deal Recognition Timing**: Large deals take 2-5 quarters to deploy. Subscription elements are excluded from RPO, while perpetual licenses are recognized upfront or over time based on customer adoption.
- **U.S. Federal Dynamics**: Government shutdown delayed engagements but federal agencies resumed discussions post-shutdown. LexisNexis partnership is progressing with early-stage salesforce training.
- **Margin Expansion**: Gross margin at 73% (vs. 72.3% full-year target) reflects premium pricing for AI solutions. Adjusted EBITDA margin expected to exceed 12% in FY26, with gradual expansion toward 20%+ by FY28.
- **Professional Services**: 13% of total revenue annually, with Q3 decline due to timing of deployment projects. Long-term focus on reducing services dependency through self-service tools.


Cognyte Software Ltd.(CGNT)-20251209-2026 Q3 Earnings call transcript

Revenue

Sales and Services Revenue

Financing Services Revenue

Other Revenue

Cost of Revenue

Cost of Goods and Services

Cost of Financing Services

Other Cost

Gross Profit

Other Operating Income

Operating Expenses

Selling, General and Administrative Expenses

Selling and Marketing Expenses

General and Administrative Expenses

Research and Development Expenses

Loss on Bad Debts

Loss on Impairment of Other Assets

Loss on Disposal of Assets

Other Operating Expenses

Operating Income

Non-Operating Income (Loss)

Income (Loss) from Affiliates

Income (Loss) from Associates

Income (Loss) from Joint ventures

Gain (Loss) on Other Investment

Gain (Loss) on Change in Fair Value

Gain (Loss) on Foreign Currency Exchange

Other Non-Operating Income (Loss)

Net Interest Expense

Interest Expense

Interest Income

Pretax Income From Continuing Operations

Income Tax Expense

Current Income Tax

Deferred Income Tax

Income Tax Adjustments

Net Income from Continuing Operations

Income from Discontinued Operations

Other Items Before Net Income

Net Income

Net Income Attributable to Minority Interests

Net Income Attributable to Owners of the Company

Preferred Stock Dividends

Other Adjustments

Net Income Attributable to Common Stockholders

Other Comprehensive Income

Total Comprehensive Income

Total Comprehensive Income Attributable to Minority Interests

Total Comprehensive Income Attributable to Owners of the Company

Basic EPS

Basic EPS from Continuing Operations

Basic EPS from Discontinued Operations

Diluted EPS

Diluted EPS from Continuing Operations

Diluted EPS from Discontinued Operations

CGNT

CGNT fundamentals

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