Cognyte (CGNT) Q2 FY2027 Earnings Call: Software Revenue Rises 20.9%
Source Tradingkey
Key Takeaways
- Cognyte reported approximately $109 million in Q2 FY2027 revenue, up 12% year over year. Total software revenue increased 20.9% to $100.8 million and represented more than 92% of revenue.
- Recurring revenue rose 18.4% to $56.2 million, or 51.4% of total revenue. Management said the shift toward subscription arrangements is improving visibility but can delay reported revenue compared with perpetual licensing.
- Profitability grew substantially faster than revenue. Non-GAAP operating income increased 52.5% to $12.2 million, adjusted EBITDA rose 35.7% to $14.9 million, and non-GAAP EPS nearly doubled to $0.15.
- Management narrowed its FY2027 revenue outlook around an unchanged midpoint of approximately $448 million, plus or minus 2%. It maintained targets of about $56 million in non-GAAP operating income and $68 million in adjusted EBITDA.
- Total RPO was $470.2 million, including $313.4 million of short-term RPO. Including expected renewals and contracts signed after quarter-end, the company said it has visibility into approximately 85% of the revenue required over the next 12 months.
- Cognyte added 40 new customers in the first half, compared with 31 a year earlier. Management said the company remains on track to sign $20 million of U.S. deals during FY2027.
Key Financial Data
| Metric | Q2 FY2027 | Year-over-year change | Commentary |
|---|---|---|---|
| Revenue | Approximately $109 million | +12% | Software and recurring revenue outpaced total growth |
| Total software revenue | $100.8 million | +20.9% | More than 92% of total revenue |
| Software revenue | $49.2 million | +34.5% | Includes perpetual licenses, appliances and term-based subscription licenses |
| Software services revenue | $51.6 million | +10.3% | Primarily support contracts, with a smaller SaaS contribution |
| Recurring revenue | $56.2 million | +18.4% | 51.4% of total revenue |
| Professional services revenue | $8.4 million | Down from $14.2 million | Less than 8% of revenue versus approximately 15% a year earlier |
| Non-GAAP gross margin | 73.7% | +154 basis points | Supported by the higher software mix |
| Non-GAAP gross profit | $80.5 million | +14.4% | Grew faster than revenue |
| GAAP operating income | $4.7 million | +69.7% | Reflects increased operating leverage |
| Non-GAAP operating income | $12.2 million | +52.5% | Operating expenses grew more slowly than revenue |
| Adjusted EBITDA | $14.9 million | +35.7% | — |
| GAAP diluted EPS | $0.06 | Up from $0.02 | — |
| Non-GAAP EPS | $0.15 | Up from $0.08 | — |
| Operating cash flow | $1.1 million | Up from negative $6.3 million | Included annual incentive payments and seasonal working-capital uses |
Disclaimer: For information purposes only. Past performance is not indicative of future results.
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