Cognyte Software Ltd. (CGNT): Financial results for Q2 2026
Cognyte Software Ltd. (CGNT) furnished an SEC Form 6-K — earnings release. Exhibit 99.1 Press Release Investor Relations Contact Dean Ridlon Cognyte Software Ltd. IR@cognyte.com C ognyte Reports Strong Second Quarter Results with Accelerating Software Growth and Expanding Profitabilit y Revenue grew 12% to $109.2 million; adjusted EBITDA grew 35.7% to $
How this was made
The 30-second read
Why it matters
The earnings beat and reaffirmed outlook suggest continued momentum for the stock, though investors should watch cash usage and future guidance.
Market read
First‑report earnings with solid growth and reaffirmed guidance provide fresh trading insight for CGNT and related AI software stocks.
What to watch
Foreign‑exchange headwinds and upcoming competitive pressures in AI analytics.
Revenue grew 12% to $109.2 million; adjusted EBITDA grew 35.7% to $14.9 million; non-GAAP diluted EPS nearly doubled to $0.15; total software revenue grew 21% and recurring revenue grew 18%.
Revenue growth accelerated in software and recurring revenue, profitability expanded materially faster than revenue, GAAP profitability improved, and the company reiterated its FYE27 outlook.
Key metrics
as reported| Metric | Value | q/q | y/y |
|---|---|---|---|
| Total revenue, Q2 FYE27GAAP | $109.2 million | – | approximately 12.0% |
| Software revenue, Q2 FYE27GAAP | $49,231 (in thousands) | – | 34.5% |
| Software service revenue, Q2 FYE27GAAP | $51,563 (in thousands) | – | 10.3% |
| Professional service and other revenue, Q2 FYE27GAAP | $8,443 (in thousands) | – | – |
| Total software revenue, Q2 FYE27other | $100.8 million | – | 20.9% |
| Recurring revenue, Q2 FYE27other | $56.2 million | – | 18.4% |
| Gross profit, Q2 FYE27GAAP | $79,635 (in thousands) | – | – |
| Non-GAAP gross profit, Q2 FYE27non-GAAP | $80.5 million | – | – |
| Non-GAAP gross margin, Q2 FYE27non-GAAP | 73.7% | – | 154 bps improvement |
| Total operating expenses, Q2 FYE27GAAP | $74,976 (in thousands) | – | – |
| Research and development, net, Q2 FYE27GAAP | $31,973 (in thousands) | – | – |
| Selling, general and administrative, Q2 FYE27GAAP | $42,852 (in thousands) | – | – |
| GAAP operating income, Q2 FYE27GAAP | $4.7 million | – | 69.7% |
| GAAP operating margin, Q2 FYE27GAAP | 4.3% | – | – |
| Non-GAAP operating income, Q2 FYE27non-GAAP | $12.2 million | – | 52.5% |
| Non-GAAP operating margin, Q2 FYE27non-GAAP | 11.2% | – | – |
| Adjusted EBITDA, Q2 FYE27non-GAAP | $14.9 million | – | 35.7% |
| Adjusted EBITDA margin, Q2 FYE27non-GAAP | 13.6% | – | – |
| GAAP net income attributable to Cognyte Software Ltd., Q2 FYE27GAAP | $4.1 million | – | – |
| Non-GAAP net income attributable to Cognyte Software Ltd., Q2 FYE27non-GAAP | $11,360 (in thousands) | – | – |
| Diluted GAAP EPS, Q2 FYE27GAAP | $0.06 per share | – | – |
| Diluted non-GAAP EPS, Q2 FYE27non-GAAP | $0.15 per share | – | – |
| Billings, Q2 FYE27other | $76.3 million | – | – |
| Total revenue, H1 FYE27GAAP | $214.7 million | – | approximately 11.2% |
| Total software revenue, H1 FYE27other | $198.1 million | – | approximately 19.8% |
| Recurring revenue, H1 FYE27other | $108.1 million | – | 14.2% |
| GAAP operating income, H1 FYE27GAAP | $9.1 million | – | 85.1% |
| Non-GAAP operating income, H1 FYE27non-GAAP | $22.9 million | – | 47.2% |
| Adjusted EBITDA, H1 FYE27non-GAAP | $28.5 million | – | 33.7% |
| GAAP net income attributable to Cognyte Software Ltd., H1 FYE27GAAP | $1.1 million | – | – |
| Diluted non-GAAP EPS, H1 FYE27non-GAAP | $0.19 per share | – | – |
| Net cash provided by operating activities, Q2 FYE27GAAP | $1.1 million | – | – |
| Net cash used in operating activities, H1 FYE27GAAP | $3,586 (in thousands) | – | – |
Segments
| Segment | Revenue | q/q | y/y |
|---|---|---|---|
| SoftwareSoftware revenue increased by $12.6 million, driven by healthy demand for software solutions. | $49,231 (in thousands) | – | 34.5% |
| Software serviceSoftware services revenue increased by $4.8 million. | $51,563 (in thousands) | – | 10.3% |
| Professional service and otherRevenue decreased by $5.7 million; professional services represented less than 8% of total revenue, compared with approximately 15% in the comparable period last year. | $8,443 (in thousands) | – | – |
FYE27, year ending January 31, 2027 outlook
- Revenue$448 million, with a range of +/- 2%, which represents approximately 12% year-over-year growth at the midpoint of the range.
- NoteAdjusted EBITDA: Approximately $68 million at the midpoint of our revenue range, representing approximately 40% year-over-year growth.
- NoteNon-GAAP Diluted EPS: $0.47 at the midpoint of our revenue range.
- NoteStock-based compensation is expected to be between approximately $23.5 and $25.5 million.
- NoteAmortization expense of other acquired intangible assets is expected to be approximately $0.6 million.
Capital returns
- During H1 FYE27, the company repurchased approximately 1.5 million ordinary shares for an aggregate purchase price of approximately $13.5 million.
- Since launching its first repurchase program in November 2024, the Company has repurchased approximately $40.2 million of shares through the end of Q2 FYE27, out of the $60 million authorized across the Company’s repurchase programs.
- Capital allocation priorities are investing organically to support growth, evaluating strategic M&A opportunities, and using share repurchases opportunistically.
What drove it
- Q2 total software revenue increased 20.9% to $100.8 million and represented more than 92% of total revenue, compared with approximately 86% in the same period last year.
- Q2 recurring revenue increased 18.4% to $56.2 million, primarily driven by adoption of subscription offerings.
- Q2 non-GAAP gross profit and margin increased primarily because of revenue mix, scale, and operational efficiencies.
- The company added 40 new customers during H1 FYE27, compared with 31 in the same period last year.
- Management cited expected renewals of recurring business and commercial activity since quarter-end, with visibility into approximately 85% of the next 12 months' revenue.
Concerns
- Q2 billings were $76.3 million compared to $93.0 million in the same period last year; the company stated billings may vary between quarters based on contract timing.
- H1 FYE27 operating profitability included approximately $7 million of net unfavorable foreign exchange impact.
- The Q2 quarter included annual incentive payments and other seasonal working-capital uses.
- Professional services and other revenue decreased by $5.7 million in Q2 FYE27.
What to watch
- Execution against the reiterated FYE27 revenue outlook of $448 million, with a range of +/- 2%.
- Progress toward approximately $68 million of adjusted EBITDA and $0.47 of non-GAAP diluted EPS at the midpoint of the FYE27 revenue range.
- The pace of recurring revenue growth and renewal activity supporting approximately 85% visibility into the next 12 months' revenue.
- Billings trends following Q2 FYE27 billings of $76.3 million.
- The impact of foreign currency exchange rates on operating profitability.
Balance sheet and cash flow
- Cash and cash equivalents were $102.2 million at the end of the second quarter.
- The Company ended the second quarter with $102.2 million in cash and no debt.
- Total assets were $505,851 (in thousands) at July 31, 2026, compared with $521,066 (in thousands) at January 31, 2026.
- Total liabilities were $286,355 (in thousands) at July 31, 2026, compared with $292,203 (in thousands) at January 31, 2026.
- Purchases of treasury stock were $13,443 (in thousands) during H1 FYE27.
- Purchases of property and equipment were $3,996 (in thousands) during H1 FYE27.
- Net decrease in cash, cash equivalents, restricted cash and restricted cash equivalents was $14,707 (in thousands) during H1 FYE27.
Analysis
Cognyte reported Q2 FYE27 revenue of $109.2 million, up approximately 12.0% from the same period last year. Growth was concentrated in higher-software-content revenue: total software revenue increased 20.9% to $100.8 million and recurring revenue increased 18.4% to $56.2 million. Software revenue increased 34.5%, while professional services and other revenue declined by $5.7 million. Total software revenue represented more than 92% of total revenue, compared with approximately 86% in the prior-year period.
Profitability expanded faster than revenue. Q2 non-GAAP operating income increased 52.5% to $12.2 million, adjusted EBITDA increased 35.7% to $14.9 million, and non-GAAP gross margin was 73.7%, an improvement of 154 bps. GAAP operating income increased 69.7% to $4.7 million, while GAAP net income attributable to Cognyte was $4.1 million. Diluted GAAP EPS was $0.06 per share and diluted non-GAAP EPS was $0.15 per share.
First-half performance showed the same mix and profitability trend. H1 FYE27 revenue was $214.7 million, up approximately 11.2%, while total software revenue increased approximately 19.8% to $198.1 million and recurring revenue rose 14.2% to $108.1 million. H1 non-GAAP operating income rose 47.2% to $22.9 million and adjusted EBITDA rose 33.7% to $28.5 million, despite approximately $7 million of net unfavorable foreign exchange impact on operating profitability.
Cash flow remains an area requiring attention. Q2 net cash provided by operating activities was $1.1 million, compared with net cash used in operating activities of $6.3 million in the prior-year quarter, but H1 net cash used in operating activities was $3,586 (in thousands). Q2 billings were $76.3 million compared with $93.0 million in the prior-year period. The company attributed quarterly billings variability to contract timing and reported trailing-twelve-month billings of approximately 95% of revenue.
The balance sheet ended Q2 with $102.2 million in cash and no debt. Cognyte repurchased approximately 1.5 million ordinary shares for approximately $13.5 million during H1 FYE27, bringing aggregate repurchases since November 2024 to approximately $40.2 million out of $60 million authorized. The company narrowed its FYE27 revenue range around an unchanged midpoint and reaffirmed its profitability outlook, citing expected recurring-business renewals, commercial activity since quarter-end, and visibility into approximately 85% of the next 12 months' revenue.
Management, verbatim
Cognyte delivered a strong quarter, with broad global momentum and continued progress across our strategic growth pillars.
Elad Sharon, Chief Executive Officer
Total software revenue grew 21% and recurring revenue grew 18%, both significantly faster than total revenue, while profitability again expanded substantially faster than revenue.
David Abadi, Chief Financial Officer
This visibility, combined with our strong execution, reinforces our confidence in our full-year outlook and our FYE28 targets.
David Abadi, Chief Financial Officer
Not in the filing
stated, not guessed- Previous-release outlook was not provided, so comparison with prior guidance is unavailable.
- Quarter-over-quarter comparisons were not reported for the listed metrics.
- Free cash flow was not reported.
- Dividend information was not reported.
- GAAP gross margin was not reported.
- FYE27 guidance for gross margin, operating expenses, and tax rate was not reported.
- A complete Q2 statement of cash flows was not reported in the filing tables; only six-month cash-flow data and selected Q2 operating cash flow were provided.
AlphAI analysis generated from the company’s SEC earnings filing (Form 8-K Item 2.02, or Form 6-K for a foreign private issuer). Every figure was cross-checked against the filing text; consensus estimates, price targets and share-price reactions are not shown because they are not in the filing. AI-generated research, not investment advice.
Background
Cognyte Software Ltd. (NASDAQ: CGNT) filed a Form 6‑K with its Q2 2026 earnings release.
Ticker impact
Cognyte reported Q2 2026 results with 12% revenue growth, 35.7% adjusted EBITDA increase and reaffirmed its FY27 outlook.
Modest upside as investors price in higher profitability and reaffirmed guidance.
Revenue and earnings beat prior period, cash balance strong, no debt, and guidance reaffirmed suggest continued buying pressure.
Market effects
Strong software revenue growth may boost sentiment in AI‑analytics and enterprise software sector.
Positive for Israeli tech firms and broader US-listed AI software stocks.
Reinforces demand for AI‑driven investigative analytics globally.
Counterpoint
Growth may be unsustainable if macro demand softens; valuation could be stretched.
Key entities
- companyCognyte Software Ltd.
AI‑powered investigative analytics provider.
- executiveElad Sharon
Chief Executive Officer of Cognyte.
