revenue
448 $million
FY 2027
official guidance
COGNYTE SOFTWARE LTD.
Last · NASDAQ$8.38-0.36 (-4.12%)close · yahoo · 11h ago
Market cap$618.82M73.8M sh
P/E · TTM-838fwd 10.9 · eps -0.01 · loss
Beta1.59vs S&P 500
Div yield0.00%annual · TTM
52w range
$6.29$12.31
Volume578.9Ksession
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OpenFilings analyst
Our analyst
Agentic read of the latest earnings call — recommendation updates when we process a new transcript. Research synthesis, not investment advice.
Strong BuyBuyHoldSellStrong Sell
Strong growth quality and operating leverage outweigh near-term RPO and cash-flow uncertainty.
Buy: Cognyte delivered a high-quality quarter, with software revenue up 20.9% to $100.8 million, recurring revenue up 18.4% to $56.2 million, and non-GAAP operating income up 52.5% to $12.2 million despite a $7 million first-half FX headwind. FY2027 guidance was maintained at approximately $448 million of revenue, $56 million of non-GAAP operating income, and $0.47 of EPS, while the shift toward software, subscriptions, and AI-enabled sovereign intelligence supports the longer-term thesis. The key tension is that RPO has declined for two consecutive quarters and management withdrew its prior $45 million cash-flow quantification because inventory investment is difficult to size.
Themes
- Software Mix Shift
- Recurring Revenue
- Sovereign Ai
- Us Federal Growth
- Rpo Visibility
- Inventory Investment
Near term
U.S. federal and state/local procurement activity, including proof-of-concept conversions, must translate into the targeted $20 million of FY2027 signed deals.
Q3 revenue is expected to be slightly above Q2, followed by sequential growth in Q4; contract timing and subscription recognition could still create quarterly volatility.
Inventory buildup to support customer deliveries and mitigate longer supply lead times may pressure operating cash flow and working capital.
The next several weeks of disclosed customer wins will test whether the reported U.S. and global momentum is converting into material bookings.
Longer term
Software revenue now represents more than 92% of total revenue versus approximately 86% a year ago, supporting structurally higher gross margins and operating leverage.
Cognyte’s potential moat rests on domain-specific, explainable AI embedded in mission workflows and sovereign/on-premise deployment, rather than generic AI functionality.
Subscription adoption should improve visibility and customer retention, but reported growth may remain muted versus the underlying economics because some term-based licenses are recognized at a point in time.
The FY2028 $500 million revenue target remains credible only if new-logo growth, customer expansions, and U.S. execution sustain current momentum.
Red flags
Total RPO fell to $470.2 million, with management attributing approximately $30 million of the change to consumption of multiyear support contracts and noting that $42 million of future subscription revenue is excluded because it is cancelable.
Management did not quantify the impact of the planned inventory investment on full-year operating cash flow and replaced the prior $45 million expectation with only 'significant positive' cash flow.
Recurring revenue is not equivalent to ARR: part of it is term-based licensing recognized at a point in time, creating quarter-to-quarter volatility.
Management cited strong demand and a few percentage points of hypothetical additional growth under a perpetual-license mix, but did not quantify the conversion impact on cash generation or provide a bookings outlook above the $20 million U.S. target.
Forward outlook
revenue growth
12 pct
FY 2027
official guidance
gross margin
73.5 pct
FY 2027
official guidance
operating margin
56 $million
FY 2027
official guidance
ebitda
68 $million
FY 2027
official guidance
eps diluted
0.47 $per share
FY 2027
official guidance
revenue
500 $million
FY 2028
management target
OpenFilings analyst view from primary-source filings and earnings calls — not investment advice.
Upcoming earnings
1:30 PM UTC+1
Period
Oct 2026
Est. EPS
$0.12
Est. revenue
113.4M
Earnings transcripts
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