Cognyte Software Ltd. Q3 FY2025 earnings call

• Cognite delivered solid execution with double-digit revenue growth and adjusted EBITDA expanding faster than revenue.
• Deepened and broadened engagements with existing customers, securing four significant orders from existing customers in Q3, including two over $20M and two over $10M.
• Signed nine new customers in Q3, including five over $1M and one $5M contract.
• Hosted the global Cognite Intelligence Summit in Europe, introducing AI-powered innovations and highlighting the need for advanced analytics to address complex security challenges.
• Technology addresses challenges like organized crime by enabling analysis of vast data to uncover hidden connections and accelerate investigations.

In Q3 2025, Cognite grew revenue by 12% year-over-year to $89 million. Software revenue (including software and software services) was $75.3 million, representing about 85% of total revenue, with incremental subscription revenue contributing ~40% of software revenue growth. Recurring revenue was $46.9 million (53% of total revenue) in Q3. Professional services revenue was $13.7 million, up $5.9 million YOY. Non-GAAP gross margin for the quarter was 70.1%, non-GAAP operating income was $3.4 million, and adjusted EBITDA was $6.6 million, showing 42% YOY growth.

• Raised full-year fiscal 2025 outlook: revenue expected to be approximately $349 million (+11% YOY at midpoint), adjusted EBITDA ~$26 million, non-GAAP EPS positive $0.05 at midpoint, and cash from operations ~$37 million.
• Board approved a share buyback program of up to $20 million in ordinary shares over 18 months, with repurchases starting December 15.
• Total software revenue expected to be ~$304 million (87% of total revenue), professional services revenue ~13% of total revenue.

Forward-looking statements are subject to risks discussed in Cognite's annual report on Form 20-F for the fiscal year ended January 31, 2024, and other SEC filings, as actual results could differ materially from forward-looking statements.

Q: Can you talk about the profile of large customer announcements and if features/products differ from other customers?

A: Complexity customers face is similar across the market, driven by need to analyze growing volume and diverse data. Demand drivers include expanding capacity and improving functionality. Larger deals aren't every quarter but demand drivers continue.

Q: Talk about R&D initiatives from the summit, what customers are asking and what's being built?

A: 5G is a demand driver as it increases data bandwidth, customers need to handle vast growing data. R&D focuses on expanding solution capacity and improving AI capabilities for uncovering hidden insights.

Q: Guidance for fiscal 2026 and US expansion plans?

A: Well-positioned for future growth with strong CRPO and RPO. North American market is a good opportunity, with continued growth expected in fiscal 2026 and beyond as seen from customer feedback and follow-on orders.