Cognyte Reports Strong Q1 FY26 Growth, Boosted by AI and Advanced Analytics Innovations

Cognyte Software Ltd., a global leader in software-driven technology for investigative analytics, reported strong financial results for the first quarter of fiscal 2026 (Q1 FYE26), which ended on April 30, 2025. The company's performance reflects solid progress against its strategic priorities, driven by a focus on innovation and advanced analytics. Key Financial Highlights Total Revenue: $95.5 million, a 15.5% increase from $82.7 million in the same period last fiscal year. Software Revenue: $37.4 million, up from $31.4 million, marking a 19% increase. This growth was primarily due to higher sales of software perpetual licenses. Software Services Revenue: $44.7 million, a minimal increase of 0.7% from $44.4 million. Professional Services and Other Revenue: $13.5 million, up significantly from $6.9 million, a 95.5% increase. This increase was mainly attributed to revenue recognition timing and the scale of deployments. Recurring Revenue: $47.2 million, a 3.2% increase from the same period last year. Non-GAAP Gross Profit Margin: Improved by 80 basis points to 71.9%. Total Backlog: $484.9 million, with short-term backlog at $260.1 million. Total Remaining Performance Obligations (RPO): Increased by $52 million to $597.8 million, with short-term RPO at $346.9 million, providing solid visibility into FYE26 revenue. Financial Metrics and Adjustments GAAP Operating Income: $2.2 million, compared to a loss of $2.3 million in Q1 FYE25. Non-GAAP Operating Income: $7.6 million, reflecting an improvement from $1.8 million in the corresponding period of the previous year. Adjusted EBITDA: $10.3 million, up from $5.0 million in the same quarter last year. Net Income (Loss): GAAP net loss was $0.981 million, significantly improved from a loss of $5.117 million in Q1 FYE25. On a non-GAAP basis, the company reported net income of $5.030 million, compared to a loss of $2.494 million. Cash, Cash Equivalents, and Restricted Cash: Decreased to $102.9 million from $113.1 million at the end of January 2025. The decline was largely due to share repurchases totaling 952,000 ordinary shares for $9 million. Net Cash Provided by Operating Activities: $1.7 million, a substantial decrease from $21.5 million in Q1 FYE25, primarily due to the timing of collections. Strategic Initiatives and Acquisitions Share Repurchase Program: Cognyte continued to execute its share repurchase program, buying back 952,000 ordinary shares for $9 million. Acquisition of GroupSense: In May 2025, Cognyte acquired GroupSense, a U.S.-based cyber threat intelligence company. This move enhances Cognyte's offerings by integrating human and automated capabilities to deliver customer-specific intelligence. The acquisition brings a highly skilled team and a robust U.S. customer base, reinforcing Cognyte's U.S. growth strategy. Management Commentary Elad Sharon, CEO: "Our first quarter performance reflects solid progress against our strategic priorities. As threats evolve, so does our commitment to innovation, particularly in applying AI and advanced analytics to help our customers stay ahead. We’re focused on shaping the future of investigative analytics while creating lasting value for all our stakeholders." David Abadi, CFO: "We continue to secure major deals globally from both existing and new customers, reflecting the growing demand for and the value of our cutting-edge investigative analytics solutions. With clear revenue visibility and a strong balance sheet, we have the financial flexibility to capitalize on the opportunities ahead. This solid foundation supports our focus on driving long-term growth and increasing profitability this year and beyond." Conference Call and Webcast Cognyte will host a conference call on June 11, 2025, at 8:30 a.m. ET to discuss the Q1 FYE26 results. Participants can find the dial-in details and webcast link on the company's Investor Relations page. An archive of the webcast will be available following the call. Industry Insights and Company Profile Industry insiders view Cognyte's Q1 FYE26 results positively, highlighting the company's strategic alignment with market demands and its robust financial position. They note that the acquisition of GroupSense is a significant move that strengthens Cognyte's competitive edge, especially in the U.S. market. Cognyte Software Ltd. is a leading provider of software solutions for data processing and investigative analytics. Founded on a mission to enable customers to generate actionable intelligence from their data, Cognyte's offerings are widely used by law enforcement, national security, intelligence agencies, and other organizations to navigate complex threats. The company leverages cutting-edge technologies like Artificial Intelligence (AI), big data analytics, and machine learning to accelerate investigations and enhance threat anticipation. Cognyte's commitment to innovation and customer success is evident in its growing customer base and expanding product portfolio. Overall, Cognyte's Q1 FYE26 results demonstrate a strong foundation and strategic foresight, positioning the company well for continued growth and profitability.