Cognyte Reports Q1 2026 Results: Strong Revenue Growth and Increased Profitability Despite Modest Cash Flow

Cognyte Software Ltd., a global leader in software-driven technology for investigative analytics, announced its financial results for the first quarter of fiscal year 2026 (Q1 FYE26) ended April 30, 2025. The company reported strong financial momentum, with double-digit revenue growth and increased profitability. Financial Highlights: - Total Revenue: Increased to $95.5 million in Q1 FYE26 from $82.7 million in the same period last year, marking a 15.5% growth. - Software Revenue: Rose by $6.2 million to $37.4 million, primarily driven by higher sales of software perpetual licenses. - Recurring Revenue: Grew by 3.2% to $47.2 million. - Gross Profit: Increased to $68.1 million, a hike of $9.8 million from the previous year. - Non-GAAP Operating Income: Reached $7.6 million, compared to $1.8 million in Q1 FYE25, demonstrating a substantial improvement in profitability. - Non-GAAP Net Income Attributable to Cognyte: Reported at $5.0 million, compared to a loss of $2.5 million in the prior year. - Cash Position: As of April 30, 2025, Cognyte had $102.9 million in cash, cash equivalents, and restricted cash, down from $113.1 million at the start of the fiscal year. The decrease was mainly due to the share repurchase program. - Share Repurchase: The company bought back about 952,000 ordinary shares for approximately $9 million. - Operating Cash Flow: Net cash provided by operating activities was $1.7 million, down from $21.5 million in Q1 FYE25. This reduction was attributed to the timing of collections, as Q4 FYE25 saw strong collection activity. Operational Milestones: - Acquisition of GroupSense: In May 2025, Cognyte acquired GroupSense, a cyber threat intelligence company. The move strengthens Cognyte's U.S. presence and enhances its offerings with human and automated intelligence capabilities. - Global Deals: The company secured significant contracts from both new and existing customers, highlighting the growing demand for its advanced investigative analytics solutions. - Backlog and RPO: Total backlog was $484.9 million at the end of Q1 FYE26, with short-term backlog at $260.1 million. Additionally, total remaining performance obligations (RPO) stood at $597.8 million, up $52 million from the end of Q4 FYE25, indicating strong future revenue visibility. Management Commentary: CEO Elad Sharon highlighted that the first-quarter performance reflects the company's solid progress in executing strategic priorities, particularly in AI and advanced analytics to stay ahead of evolving threats. CFO David Abadi noted the company's financial flexibility, with a strong balance sheet and clear revenue visibility, positioning Cognyte for long-term growth and enhanced profitability. Outlook for FYE26: Cognyte updated its outlook for FYE26, incorporating the recent acquisition of GroupSense. The company anticipates continued growth and profitability, supported by its robust balance sheet and strategic focus on innovations in investigative analytics. Industry Insider Evaluation: Technology analysts commend Cognyte's strategic moves, particularly the acquisition of GroupSense, which bolsters the company's cybersecurity portfolio and aligns with the growing need for comprehensive threat intelligence solutions. The integration of AI and advanced analytics in Cognyte's offerings is seen as a significant competitive advantage, enabling customers to handle complex data more efficiently and effectively. Company Profile: Cognyte is a leading provider of software solutions for data processing and investigative analytics, serving law enforcement, national security, and intelligence agencies worldwide. The company's cutting-edge products utilize AI, big data analytics, and machine learning to generate actionable intelligence, enabling faster and more accurate decision-making in a dynamic security landscape. Hundreds of organizations rely on Cognyte to uncover insights and anticipate threats. In summary, Cognyte's Q1 FYE26 financial results showcase the company's strong market position and strategic focus on innovation and growth. The acquisition of GroupSense and the ongoing securing of major contracts are pivotal steps in maintaining and building upon this success. The company remains well-equipped to navigate future challenges and exploit new opportunities in the cybersecurity and investigative analytics sectors.