Cognyte Software Ltd., a global leader in security analytics software, today announced results for the three and six months ended July 31, 2021. Elad Sharon, Cognyte’s Chief Executive Officer, commented:
“We are pleased with our strong Q2 and first-half results which came in ahead of our expectations. We are particularly pleased with our double-digit revenue growth and gross margin expansion driving more than 13% gross profit growth in Q2, which reflects the successful execution of our software strategy. Following a strong start to the year, we believe we are well-positioned for a strong second half and are also pleased to be raising our annual outlook for profitability.”
- Revenue: $116.0 million and $116.4 million
- Gross Margin:72.3% and 73.5%
- Gross Profit: $83.9 million and $85.6 million
- Diluted EPS: ($0.00) (GAAP) and $0.17 (non-GAAP)
- Revenue: $230.7 million (GAAP) and $231.5 million (non-GAAP)
- Gross Margin:71.9% (GAAP) and 73.1% (non-GAAP)
- Gross Profit: $165.8 million (GAAP) and $169.2 million (non-GAAP)
- Diluted EPS: ($0.07) (GAAP) and $0.37 (non-GAAP)
David Abadi, Cognyte’s Chief Financial Officer, also said:
“During the quarter, we received multiple seven and eight-figure orders and we continue to see strong market demand for security analytics. Both our Q1 and Q2 results came in ahead of expectations, reflecting our successful transition to a software model. We have an improved annual outlook for gross margin and adjusted EBITDA and are pleased to be raising guidance for EPS.”
The non-GAAP outlook for the year ending January 31, 2022, is as follows:
- Revenue: Up ~10% to $490 million with a range of +/- 2
It is expected that Q3 revenue will be in a range of $112 million to $117 million and to finish the year with the typical strong Q4.
- Diluted EPS: $0.82 at the midpoint of our revenue outlook
It is expected that Q3 EPS will be $0.10 and the company will finish the year with its typical strong Q4.
The non-GAAP outlook for the three months ending October 31, 2021, and FYE22 excludes the following GAAP measures which the company is 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 $0.4 million and $1.6 million for the three months ending October 31, 2021, and FYE22, respectively.
- Amortization of intangible assets of approximately $0.4 million and $1.8 million for the three months ending October 31, 2021, and FYE22, respectively.
The non-GAAP outlook for the three months ending October 31, 2021, and FYE22 excludes the following GAAP measures for which Cognyte is able to provide a range of probable significance:
- Costs to complete separation of Cognyte from Verint Systems Inc. (hereafter “Verint”) and establish Cognyte as an independent public company of between approximately $0.5 million and $1 million and between approximately $11 million and $12 million for the three months ending October 31, 2021, and FYE22, respectively.
- Stock-based compensation is expected to be between approximately $8 million and $9 million and $33 million and $36 million, for the three months ending October 31, 2021, and FYE22, respectively, assuming market prices for our ordinary shares are generally consistent with the current levels.
The 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.
Cognyte is unable, without unreasonable effort, to provide a reconciliation for other GAAP measures which are excluded from its 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, the company is unable to assess the probable significance of these excluded items.