Cognyte Software (CGNT) Q1 2025 earnings summary

Executive summary

• Q1 revenue reached $82.7 million, up 13% year-over-year, with gross profit growing 17% and margin expansion reflecting strong execution.

• Adjusted EBITDA was $5 million (6.1% margin), and positive cash flow from operations totaled $21.5 million for the quarter.

• Ended Q1 with $107 million in cash and no debt, supporting operational flexibility and a robust financial position.

• Recurring revenue comprised $45.8 million, or 55% of total revenue, reflecting a stable revenue base.

• Continued innovation and expansion in North America, with several follow-on orders from national security and intelligence customers, each valued at $5 million or more.

Financial highlights

• Q1 revenue: $82.7 million, up 12.7%–13% year-over-year; software revenue grew 13.9% to $75.8 million.

• Gross margin improved to 71.1%, up from 68.4% year-over-year; gross profit was $58.8 million, up $8.6 million.

• Adjusted EBITDA margin improved to 6.1% in Q1 FYE25 from -3.1% in Q1 FYE24.

• GAAP net loss attributable was $(5.1) million (EPS $(0.07)), improved from $(8.8) million (EPS $(0.13)) year-over-year.

• Short-term remaining performance obligations (RPO) increased to $312.4 million.

Outlook and guidance

• Fiscal 2025 revenue expected to be approximately $344 million ±2%, representing about 10% year-over-year growth.

• Adjusted EBITDA guidance increased to $22 million, more than double the prior year.

• Cash from operations forecast raised to $37 million for the year.

• Annual net GAAP EPS loss expected to be 7% at the midpoint of the revenue range; non-GAAP diluted EPS projected at a loss of $0.07.

• Q2 revenue expected to be slightly above Q1, with sequential increases each quarter.