Cognyte Software (CGNT) investor relations material

Executive summary

• Q2 FYE27 revenue grew 12% year-over-year to $109.2 million, driven by strong demand for software and recurring revenue streams, with software and recurring revenue both outpacing total revenue growth.

• Profitability expanded significantly faster than revenue, with non-GAAP operating income up 52.5% to $12.2 million, adjusted EBITDA up 35.7% to $14.9 million, and non-GAAP diluted EPS nearly doubling to $0.15.

• The company added 40 new customers in H1 FYE27, up from 31 in the prior year, including a tier 1 national security agency in a NATO country.

• The business is executing well on its growth strategy, with broad global momentum and additional significant agreements signed post-Q2.

• Commercial traction and customer engagement remain robust, with agencies relying on deployed solutions.

Financial highlights

• Q2 FYE27 revenue was $109.2 million, up 12% year-over-year; total software revenue grew 20.9% to $100.8 million (over 92% of total); recurring revenue increased 18.4% to $56.2 million (51.4% of total).

• Q2 FYE27 non-GAAP gross margin was 74%, up 154 basis points; non-GAAP gross profit was $80.5 million; GAAP gross margin was 72.9%.

• GAAP operating income for Q2 FYE27 was $4.7 million (up 69.7% YoY); non-GAAP operating income was $12.2 million (up 52.5% YoY); adjusted EBITDA was $14.9 million (up 35.7% YoY).

• Non-GAAP EPS was $0.15, nearly double last year; GAAP diluted EPS was $0.06, up from $0.02.

• H1 FYE27 revenue was $214.7 million, up 11.2% YoY; H1 non-GAAP operating income was $22.9 million, up 47.2%; H1 adjusted EBITDA was $28.5 million, up 33.7%.

Outlook and guidance

• Full-year FYE27 revenue expected at $448 million ±2%, about 12% year-over-year growth; recurring revenue is expected to grow faster than total revenue.

• Non-GAAP gross margin for the year expected at 73.5%, up 50 basis points; non-GAAP operating income expected at $66 million (+50% YoY); adjusted EBITDA at $68 million (+40% YoY); annual non-GAAP EPS of $0.47.

• Q3 revenue expected to be slightly higher than Q2, with sequential growth in Q4.

• Significant positive operating cash flow expected for the full year, though timing affected by deliberate inventory investments.

• FY 2028/FYE28 revenue target of $500 million reaffirmed, with ~20% adjusted EBITDA margin.