Cognyte Announces Second Quarter Results
HERZLIYA, Israel–(BUSINESS WIRE)–Cognyte Software Ltd. (NASDAQ: CGNT) (the “Company,” “Cognyte,” “we,” “us” and “our”), a global leader in investigative analytics software, today announced results for the three and six months ended July 31, 2022 (“Q2 FYE23” and “H1 FYE23”).
“Security threats are pervasive, and customers need innovative security solutions to address evolving threats. However, the global economic slowdown is affecting our near-term performance. In the second quarter, our revenue was disappointing, but we are encouraged with bookings coming in higher than revenue and contributing to a substantial increase in backlog,” said Elad Sharon, Cognyte’s Chief Executive Officer.
“We are taking actions to focus our resources on the highest potential opportunities, to reduce our cost structure, and to regain visibility. Cognyte has a long history of delivering profitable growth, strong customer relationships and a significant backlog. Leveraging our assets, the management team is laser focused on returning to growth and profitability,” Mr. Sharon added.
Q2 Highlights
- Revenue: $81.1 million (GAAP) and $81.3 million (non-GAAP)
- Gross Margin: 63.4% (GAAP) and 65.1% (non-GAAP)
- Diluted EPS: $(0.43) (GAAP) and $(0.04) (non-GAAP)
H1 Highlights
- Revenue: $167.5 million (GAAP) and $168.0 million (non-GAAP)
- Gross Margin: 61.5% (GAAP) and 62.9% (non-GAAP)
- Diluted EPS: $(0.88) (GAAP) and $(0.83) (non-GAAP)
Conference Call Information
We will conduct a conference call today at 8:30 a.m. ET to discuss our results for the three and six months ended July 31, 2022. A real-time webcast of the conference call with presentation slides will be available in the Investor Relations section of Cognyte’s website. Those interested in participating in the question-and-answer session need to register here to receive the dial-in numbers and unique PIN to access the call seamlessly. It is recommended that you join 10 minutes prior to the event start (although you may register and dial in at any time during the call). An archived webcast of the conference call will also be available in the “Investors” section of the company’s website.
About Non-GAAP Financial Measures
This press release and the accompanying tables include non-GAAP financial measures. For a description of these non-GAAP financial measures, including the reasons management uses each measure, and reconciliations of non-GAAP financial measures presented for completed periods to the most directly comparable financial measures prepared in accordance with GAAP, please see the tables below as well as “Supplemental Information About Non-GAAP Financial Measures” at the end of this press release.
About Cognyte Software Ltd.
We are a global leader in investigative analytics software that empowers governments and enterprises with Actionable Intelligence for a Safer World™. Our open software is designed to help governments and enterprises accelerate and improve the effectiveness of investigations. Over 1,000 government and enterprise customers rely on our solutions to accelerate and conduct investigations and derive insights, with which they identify, neutralize, and tackle threats to national security, personal safety, business continuity and various forms of criminal activity. Our government customers consist of national, regional, and local government agencies in more than 100 countries around the world. Our enterprise customers consist of commercial customers and physical security customers.
Caution About Forward-Looking Statements
This press release contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995 and Section 21E of the United States Securities Exchange Act of 1934. Forward-looking statements include statements regarding expectations, predictions, views, opportunities, plans, strategies, beliefs, and statements of similar effect relating to Cognyte. All statements contained in this press release that do not relate to matters of historical fact should be considered forward-looking statements. These forward-looking statements do not guarantee future performance, and are based on management’s expectations that involve a number of known and unknown risks, uncertainties, assumptions and other important factors, any of which could cause our actual results or conditions to differ materially from those expressed in or implied by the forward-looking statements. Some of the factors that could cause our actual results or conditions to differ materially from current expectations include, among others: risks that our customers may delay, cancel, or refrain from placing orders, refrain from renewing subscriptions or service contracts, or may be unable to honor contractual or payment obligations; risks related to the impact of disruptions to the global supply chain; uncertainties regarding the impact of changes in macroeconomic and/or global conditions, including as a result of military actions involving Russia and Ukraine and COVID-19; risks related to the effects of the COVID-19 pandemic on our business and results, including customer readiness, deployment, marketing and sale abilities; risks relating to the global regulatory constraints to which we are subject; risks associated with larger orders and customer concentration; risks related to claims by third parties that our solutions infringe their terms of use or other propriety rights; risks associated with political and reputational factors related to our business or operations; risks that we may be unable to establish and maintain relationships with key resellers, partners, systems integrators and third-party suppliers; risks associated with our ability to keep pace with technological advances and challenges and evolving industry standards; risks due to aggressive competition in all of our markets; challenges associated with selling sophisticated solutions, including with respect to longer sales cycles and more complex sales processes; risks associated with significant customer and significant partners concentration, including risks related to significant amounts of our business coming from government customers around the world; risks associated with our ability to retain, recruit, and train qualified personnel in regions in which we operate; risks relating to our ability to properly manage investments in our business and operations; risks associated with acquisitions, strategic investments, partnerships or alliances; risks associated with our significant international operations, including geopolitical risks, the relationship to Israel and fluctuations in foreign exchange rates; risk of security vulnerabilities or lapses, including cyber-attacks, information technology system breaches, failures or disruptions; risks that our products or services, or those of third-parties contain defects, develop operational problems, or are vulnerable to cyber-attacks; risks associated with the mishandling or perceived mishandling of sensitive, confidential or classified information; risks associated with complex and changing regulatory environments relating to our operations and solutions; risks associated with our failure to comply with anti-corruption, trade compliance, anti-money-laundering and economic sanctions laws and regulations; risks related to the complex and evolving regulatory requirements that we are subject to, which may be difficult and expensive to comply with; risks that our intellectual property rights may not be adequate to protect our business or assets or that others may make claims on our intellectual property, claim infringement on their intellectual property rights, or claim a violation of their license rights, including relative to free or open source components we may use; risks associated with changing tax laws and regulations; risks associated with our credit facilities, liquidity and the discontinuation of LIBOR; risks associated with exchange rate fluctuations between the U.S. dollar and the New Israeli Shekel and other non-U.S. currencies; risks relating to the adequacy of our existing infrastructure, systems, processes, policies, procedures, internal controls, and personnel for our current and future operations and reporting needs; risk that the spin-off does not achieve the benefits anticipated, does not qualify as a tax-free transaction, or exposes us to unexpected claims or liabilities; risks associated with the agreements with Verint entered into in connection with the spin-off, and our indemnification obligations to Verint; risks associated with market volatility in the price of our shares; risks associated with different corporate governance requirements applicable to Israeli companies; risks related to our limited operating history as an independent public company and risks associated with being a foreign private issuer; and other risks detailed from time to time in filings that we make with the Securities and Exchange Commission (the “SEC”). For a detailed discussion of these risk factors, see our latest annual report on Form 20-F for the fiscal year ended January 31, 2022, and our other SEC filings. In addition, we operate in a very competitive and rapidly changing environment. New risks emerge from time to time. It is not possible for our management to predict all risks, nor can we assess the impact of all factors on its business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements that we may make. In light of these risks, uncertainties and assumptions, the forward-looking events and circumstances discussed in this release are inherently uncertain and may not occur, and actual results could differ materially and adversely from those anticipated or implied in the forward-looking statements. Accordingly, you should not rely upon forward-looking statements as predictions of future events. Any forward-looking statement made in this press release speaks only as of the date hereof. Except as otherwise required by law, the Company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events, changed circumstances, or any other reason.
Table 1
COGNYTE SOFTWARE LTD.
Condensed Consolidated Statements of Operations
(Unaudited)
|
|
|
Six Months Ended |
|
Three Months Ended |
||||||||||||
|
|
|
July 31, |
|
July 31, |
||||||||||||
|
(in thousands except share and per share data) |
|
|
2022 |
|
|
|
2021 |
|
|
|
2022 |
|
|
|
2021 |
|
|
Revenue: |
|
|
|
|
|
|
|
|
||||||||
|
Software |
|
$ |
51,903 |
|
|
$ |
99,628 |
|
|
$ |
27,019 |
|
|
$ |
47,964 |
|
|
Software service |
|
|
91,269 |
|
|
|
104,690 |
|
|
|
45,437 |
|
|
|
53,923 |
|
|
Professional service and other |
|
|
24,375 |
|
|
|
26,407 |
|
|
|
8,649 |
|
|
|
14,104 |
|
|
Total revenue |
|
|
167,547 |
|
|
|
230,725 |
|
|
|
81,105 |
|
|
|
115,991 |
|
|
Cost of revenue: |
|
|
|
|
|
|
|
|
||||||||
|
Software |
|
|
9,017 |
|
|
|
13,860 |
|
|
|
4,099 |
|
|
|
5,970 |
|
|
Software service |
|
|
25,397 |
|
|
|
25,312 |
|
|
|
13,254 |
|
|
|
13,359 |
|
|
Professional service and other |
|
|
29,720 |
|
|
|
25,424 |
|
|
|
12,151 |
|
|
|
12,632 |
|
|
Amortization of acquired technology |
|
|
341 |
|
|
|
341 |
|
|
|
170 |
|
|
|
170 |
|
|
Total cost of revenue |
|
|
64,475 |
|
|
|
64,937 |
|
|
|
29,674 |
|
|
|
32,131 |
|
|
Gross profit |
|
|
103,072 |
|
|
|
165,788 |
|
|
|
51,431 |
|
|
|
83,860 |
|
|
Operating expenses: |
|
|
|
|
|
|
|
|
||||||||
|
Research and development, net |
|
|
76,526 |
|
|
|
69,542 |
|
|
|
38,547 |
|
|
|
36,130 |
|
|
Selling, general and administrative |
|
|
82,445 |
|
|
|
95,960 |
|
|
|
39,043 |
|
|
|
45,142 |
|
|
Amortization of other acquired intangible assets |
|
|
502 |
|
|
|
954 |
|
|
|
251 |
|
|
|
650 |
|
|
Total operating expenses |
|
|
159,473 |
|
|
|
166,456 |
|
|
|
77,841 |
|
|
|
81,922 |
|
|
Operating (loss) income |
|
|
(56,401 |
) |
|
|
(668 |
) |
|
|
(26,410 |
) |
|
|
1,938 |
|
|
Other expense, net: |
|
|
|
|
|
|
|
|
||||||||
|
Interest income |
|
|
340 |
|
|
|
65 |
|
|
|
193 |
|
|
|
42 |
|
|
Interest expense |
|
|
(789 |
) |
|
|
(10 |
) |
|
|
(340 |
) |
|
|
(6 |
) |
|
Other income (expense), net |
|
|
202 |
|
|
|
(417 |
) |
|
|
(827 |
) |
|
|
(550 |
) |
|
Total other expense, net |
|
|
(247 |
) |
|
|
(362 |
) |
|
|
(974 |
) |
|
|
(514 |
) |
|
(Loss) income before provision for income taxes |
|
|
(56,648 |
) |
|
|
(1,030 |
) |
|
|
(27,384 |
) |
|
|
1,424 |
|
|
Provision for income taxes |
|
|
447 |
|
|
|
1,211 |
|
|
|
312 |
|
|
|
382 |
|
|
Net (loss) income |
|
|
(57,095 |
) |
|
|
(2,241 |
) |
|
|
(27,696 |
) |
|
|
1,042 |
|
|
Net income attributable to noncontrolling interest |
|
|
2,147 |
|
|
|
2,433 |
|
|
|
1,178 |
|
|
|
1,327 |
|
|
Net loss attributable to Cognyte Software Ltd. |
|
$ |
(59,242 |
) |
|
$ |
(4,674 |
) |
|
$ |
(28,874 |
) |
|
$ |
(285 |
) |
|
|
|
|
|
|
|
|
|
|
||||||||
|
Net loss per share attributable to Cognyte Software Ltd.: |
||||||||||||||||
|
Basic |
|
$ |
(0.88 |
) |
|
$ |
(0.07 |
) |
|
$ |
(0.43 |
) |
|
$ |
(0.00 |
) |
|
Diluted |
|
$ |
(0.88 |
) |
|
$ |
(0.07 |
) |
|
$ |
(0.43 |
) |
|
$ |
(0.00 |
) |
|
|
|
|
|
|
|
|
|
|
||||||||
|
Weighted-average shares outstanding: |
|
|
|
|
|
|
|
|
||||||||
|
Basic |
|
|
67,494 |
|
|
|
66,128 |
|
|
|
67,677 |
|
|
|
66,405 |
|
|
Diluted |
|
|
67,494 |
|
|
|
66,128 |
|
|
|
67,677 |
|
|
|
66,405 |
|
|
|
|
|
|
|
|
|
|
|
||||||||
Table 2
COGNYTE SOFTWARE LTD.
Condensed Consolidated Balance Sheets
|
|
|
July 31, |
|
January 31, |
||||
|
(in thousands) |
|
|
2022 |
|
|
|
2022 |
|
|
|
|
(Unaudited) |
|
(Audited) |
||||
|
Assets |
|
|
|
|
||||
|
Current assets: |
|
|
|
|
||||
|
Cash and cash equivalents |
|
$ |
32,884 |
|
|
$ |
152,590 |
|
|
Restricted cash and cash equivalents and restricted bank time deposits |
|
|
4,416 |
|
|
|
3,597 |
|
|
Short-term investments |
|
|
17,386 |
|
|
|
10,434 |
|
|
Accounts receivable, net of allowance for credit losses of $1.8 million and $2.1 million, respectively |
|
|
133,290 |
|
|
|
179,198 |
|
|
Contract assets, net |
|
|
32,147 |
|
|
|
27,908 |
|
|
Inventories |
|
|
21,307 |
|
|
|
14,366 |
|
|
Prepaid expenses and other current assets |
|
|
35,000 |
|
|
|
31,970 |
|
|
Total current assets |
|
|
276,430 |
|
|
|
420,063 |
|
|
Property and equipment, net |
|
|
29,611 |
|
|
|
30,839 |
|
|
Operating lease right-of-use assets |
|
|
20,576 |
|
|
|
25,031 |
|
|
Goodwill |
|
|
158,310 |
|
|
|
158,233 |
|
|
Intangible assets, net |
|
|
2,320 |
|
|
|
3,162 |
|
|
Deferred income taxes |
|
|
1,561 |
|
|
|
1,548 |
|
|
Other assets |
|
|
25,005 |
|
|
|
25,729 |
|
|
Total assets |
|
$ |
513,813 |
|
|
$ |
664,605 |
|
|
|
|
|
|
|
||||
|
Liabilities and stockholders’ equity |
|
|
|
|
||||
|
Current liabilities: |
|
|
|
|
||||
|
Short-term loan |
|
$ |
20,000 |
|
|
|
100,000 |
|
|
Accounts payable |
|
|
31,545 |
|
|
|
36,664 |
|
|
Accrued expenses and other current liabilities |
|
|
79,177 |
|
|
|
99,774 |
|
|
Contract liabilities |
|
|
87,594 |
|
|
|
83,158 |
|
|
Total current liabilities |
|
|
218,316 |
|
|
|
319,596 |
|
|
Long-term contract liabilities |
|
|
12,214 |
|
|
|
14,520 |
|
|
Deferred income taxes |
|
|
3,475 |
|
|
|
3,447 |
|
|
Operating lease liabilities |
|
|
13,852 |
|
|
|
17,179 |
|
|
Other liabilities |
|
|
11,336 |
|
|
|
10,774 |
|
|
Total liabilities |
|
|
259,193 |
|
|
|
365,516 |
|
|
Commitments and Contingencies |
|
|
|
|
||||
|
Stockholders’ equity: |
|
|
|
|
||||
|
Common stock – $0 par value; Authorized 300,000,000 shares. Issued and outstanding 67,860,387 and 67,217,688 at July 31, 2022 and January 31, 2022, respectively |
|
|
— |
|
|
|
— |
|
|
Additional paid-in capital |
|
|
329,147 |
|
|
|
316,706 |
|
|
Accumulated deficit |
|
|
(74,132 |
) |
|
|
(14,890 |
) |
|
Accumulated other comprehensive loss |
|
|
(16,196 |
) |
|
|
(16,679 |
) |
|
Total Cognyte Software Ltd. stockholders’ equity |
|
|
238,819 |
|
|
|
285,137 |
|
|
Noncontrolling interest |
|
|
15,801 |
|
|
|
13,952 |
|
|
Total stockholders’ equity |
|
|
254,620 |
|
|
|
299,089 |
|
|
Total liabilities and stockholders’ equity |
|
$ |
513,813 |
|
|
$ |
664,605 |
|
Table 3
COGNYTE SOFTWARE LTD.
Condensed Consolidated Statements of Cash Flows
(Unaudited)
|
|
|
Six Months Ended July 31, |
||||||
|
(in thousands) |
|
|
2022 |
|
|
|
2021 |
|
|
Cash flows from operating activities: |
|
|
|
|
||||
|
Net loss |
|
$ |
(57,095 |
) |
|
$ |
(2,241 |
) |
|
Adjustments to reconcile net loss to net cash (used in) provided by operating activities: |
|
|
|
|
||||
|
Depreciation and amortization |
|
|
9,092 |
|
|
|
11,966 |
|
|
Allowance for credit losses |
|
|
415 |
|
|
|
373 |
|
|
Stock-based compensation, excluding cash-settled awards |
|
|
11,463 |
|
|
|
18,642 |
|
|
Provision from deferred income taxes |
|
|
(60 |
) |
|
|
— |
|
|
Non-cash gains on derivative financial instruments, net |
|
|
(222 |
) |
|
|
(169 |
) |
|
Other non-cash items, net |
|
|
(326 |
) |
|
|
(119 |
) |
|
Changes in operating assets and liabilities: |
|
|
|
|
||||
|
Accounts receivable |
|
|
44,733 |
|
|
|
15,605 |
|
|
Contract assets |
|
|
(4,409 |
) |
|
|
(392 |
) |
|
Inventories |
|
|
(7,715 |
) |
|
|
(2,068 |
) |
|
Prepaid expenses and other assets |
|
|
(2,535 |
) |
|
|
1,912 |
|
|
Accounts payable and accrued expenses |
|
|
(23,809 |
) |
|
|
(9,814 |
) |
|
Contract liabilities |
|
|
1,911 |
|
|
|
(35,212 |
) |
|
Other liabilities |
|
|
1,395 |
|
|
|
938 |
|
|
Other, net |
|
|
(330 |
) |
|
|
957 |
|
|
Net cash (used in) provided by operating activities |
|
$ |
(27,492 |
) |
|
$ |
378 |
|
|
|
|
|
|
|
||||
|
Cash flows from investing activities: |
|
|
|
|
||||
|
Purchases of property and equipment |
|
|
(4,795 |
) |
|
|
(4,767 |
) |
|
Purchases of short-term investments |
|
|
(28,438 |
) |
|
|
(32,995 |
) |
|
Maturities and sales of short-term investments |
|
|
21,210 |
|
|
|
18,930 |
|
|
Settlements of derivative financial instruments not designated as hedges |
|
|
153 |
|
|
|
(340 |
) |
|
Cash paid for capitalized software development costs |
|
|
(1,695 |
) |
|
|
(3,491 |
) |
|
Change in restricted bank time deposits, including long-term portion |
|
|
150 |
|
|
|
5,616 |
|
|
Other investing activities |
|
|
2 |
|
|
|
512 |
|
|
Net cash used in investing activities |
|
$ |
(13,413 |
) |
|
$ |
(16,535 |
) |
|
|
|
|
|
|
||||
|
Cash flows from financing activities: |
|
|
|
|
||||
|
Repayment of credit facility – presented as short-term loan |
|
|
(80,000 |
) |
|
|
— |
|
|
Dividend paid to former parent |
|
|
— |
|
|
|
(35,000 |
) |
|
Payments of contingent consideration for business combinations (financing portion) |
|
|
— |
|
|
|
(949 |
) |
|
Other financing activities |
|
|
— |
|
|
|
(181 |
) |
|
Net cash used in financing activities |
|
$ |
(80,000 |
) |
|
$ |
(36,130 |
) |
|
Foreign currency effects on cash, cash equivalents, restricted cash, and restricted cash equivalents |
|
|
(101 |
) |
|
|
273 |
|
|
Net decrease in cash, cash equivalents, restricted cash and restricted cash equivalents |
|
|
(121,006 |
) |
|
|
(52,014 |
) |
|
Cash, cash equivalents, restricted cash, and restricted cash equivalents, beginning of period |
|
|
158,220 |
|
|
|
114,657 |
|
|
Cash, cash equivalents, restricted cash, and restricted cash equivalents, end of period |
|
$ |
37,214 |
|
|
$ |
62,643 |
|
|
|
|
|
|
|
||||
|
Reconciliation of cash, cash equivalents, restricted cash and restricted cash equivalents at end of period: |
|
|
|
|
||||
|
Cash and cash equivalents |
|
$ |
32,884 |
|
|
$ |
49,814 |
|
|
Restricted cash and cash equivalents included in restricted cash and cash equivalents and restricted bank time deposits |
|
|
4,146 |
|
|
|
10,585 |
|
|
Restricted cash and cash equivalents included in other assets |
|
|
184 |
|
|
|
2,244 |
|
|
Total cash, cash equivalents, restricted cash, and restricted cash equivalents |
|
$ |
37,214 |
|
|
$ |
62,643 |
|
Table 4
COGNYTE SOFTWARE LTD.
Reconciliation of GAAP to Non-GAAP Measures
(Unaudited)
|
|
|
Six Months Ended |
|
Three Months Ended |
||||||||||||
|
(in thousands, except per share data) |
|
|
2022 |
|
|
|
2021 |
|
|
|
2022 |
|
|
|
2021 |
|
|
Revenue |
||||||||||||||||
|
Total GAAP revenue |
|
$ |
167,547 |
|
|
$ |
230,725 |
|
|
$ |
81,105 |
|
|
$ |
115,991 |
|
|
Revenue adjustments |
|
|
488 |
|
|
|
820 |
|
|
|
244 |
|
|
|
387 |
|
|
Total non-GAAP revenue |
|
$ |
168,035 |
|
|
$ |
231,545 |
|
|
$ |
81,349 |
|
|
$ |
116,378 |
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
Gross profit and gross margin |
|
|
|
|
|
|
|
|
||||||||
|
GAAP gross profit |
|
|
103,072 |
|
|
|
165,788 |
|
|
|
51,431 |
|
|
|
83,860 |
|
|
GAAP gross margin |
|
|
61.5 |
% |
|
|
71.9 |
% |
|
|
63.4 |
% |
|
|
72.3 |
% |
|
Revenue adjustments |
|
|
488 |
|
|
|
820 |
|
|
|
244 |
|
|
|
387 |
|
|
Amortization of acquired technology |
|
|
341 |
|
|
|
341 |
|
|
|
170 |
|
|
|
170 |
|
|
Stock-based compensation expenses |
|
|
1,471 |
|
|
|
2,211 |
|
|
|
814 |
|
|
|
1,175 |
|
|
Restructuring expenses, net |
|
|
316 |
|
|
|
1 |
|
|
|
283 |
|
|
|
1 |
|
|
Separation expenses, net |
|
|
— |
|
|
|
30 |
|
|
|
— |
|
|
|
(1 |
) |
|
Non-GAAP gross profit |
|
$ |
105,688 |
|
|
$ |
169,191 |
|
|
$ |
52,942 |
|
|
$ |
85,592 |
|
|
Non-GAAP gross margin |
|
|
62.9 |
% |
|
|
73.1 |
% |
|
|
65.1 |
% |
|
|
73.5 |
% |
|
|
|
|
|
|
|
|
|
|
||||||||
|
Research and development, net |
|
|
|
|
|
|
|
|
||||||||
|
GAAP research and development, net |
|
|
76,526 |
|
|
|
69,542 |
|
|
|
38,547 |
|
|
|
36,130 |
|
|
As a percentage of GAAP revenue |
|
|
45.7 |
% |
|
|
30.1 |
% |
|
|
47.5 |
% |
|
|
31.1 |
% |
|
Stock-based compensation expenses |
|
|
(3,702 |
) |
|
|
(3,982 |
) |
|
|
(1,877 |
) |
|
|
(1,933 |
) |
|
Restructuring expenses, net |
|
|
(933 |
) |
|
|
(189 |
) |
|
|
(933 |
) |
|
|
(189 |
) |
|
Separation expenses, net |
|
|
— |
|
|
|
(67 |
) |
|
|
— |
|
|
|
— |
|
|
Other adjustments |
|
|
2 |
|
|
|
40 |
|
|
|
— |
|
|
|
11 |
|
|
Non-GAAP research and development, net |
|
$ |
71,893 |
|
|
$ |
65,344 |
|
|
$ |
35,737 |
|
|
$ |
34,019 |
|
|
As a percentage of non-GAAP revenue |
|
|
42.8 |
% |
|
|
28.2 |
% |
|
|
43.9 |
% |
|
|
29.2 |
% |
|
|
|
|
|
|
|
|
|
|
||||||||
|
Selling, general and administrative expenses |
|
|
|
|
|
|
|
|
||||||||
|
GAAP selling, general and administrative expenses |
|
|
82,445 |
|
|
|
95,960 |
|
|
|
39,043 |
|
|
|
45,142 |
|
|
As a percentage of GAAP revenue |
|
|
49.2 |
% |
|
|
41.6 |
% |
|
|
48.1 |
% |
|
|
38.9 |
% |
|
Stock-based compensation expenses |
|
|
(6,290 |
) |
|
|
(12,449 |
) |
|
|
(3,667 |
) |
|
|
(6,314 |
) |
|
Acquisition (expenses) benefit, net |
|
|
(97 |
) |
|
|
(560 |
) |
|
|
(12 |
) |
|
|
96 |
|
|
Restructuring (expenses) benefit, net |
|
|
(2,666 |
) |
|
|
(344 |
) |
|
|
(692 |
) |
|
|
111 |
|
|
Separation expenses, net |
|
|
(42 |
) |
|
|
(10,768 |
) |
|
|
(10 |
) |
|
|
(2,155 |
) |
|
Provision for legal claim |
|
|
(37 |
) |
|
|
(142 |
) |
|
|
(7 |
) |
|
|
— |
|
|
Other adjustments |
|
|
(4 |
) |
|
|
107 |
|
|
|
(3 |
) |
|
|
(29 |
) |
|
Non-GAAP selling, general and administrative expenses |
|
$ |
73,309 |
|
|
$ |
71,804 |
|
|
$ |
34,652 |
|
|
$ |
36,851 |
|
|
As a percentage of non-GAAP revenue |
|
|
43.6 |
% |
|
|
31.0 |
% |
|
|
42.6 |
% |
|
|
31.7 |
% |
|
|
|
|
|
|
|
|
|
|
||||||||
|
Operating (loss) income, operating margin and adjusted EBITDA |
||||||||||||||||
|
GAAP operating (loss) income |
|
|
(56,401 |
) |
|
|
(668 |
) |
|
|
(26,410 |
) |
|
|
1,938 |
|
|
GAAP operating margin |
|
|
(33.7 |
)% |
|
|
(0.3 |
)% |
|
|
(32.6 |
)% |
|
|
1.7 |
% |
|
Revenue adjustments |
|
|
488 |
|
|
|
820 |
|
|
|
244 |
|
|
|
387 |
|
|
Amortization of acquired technology |
|
|
341 |
|
|
|
341 |
|
|
|
170 |
|
|
|
170 |
|
|
Amortization of other acquired intangible assets |
|
|
502 |
|
|
|
954 |
|
|
|
251 |
|
|
|
650 |
|
|
Stock-based compensation expenses |
|
|
11,463 |
|
|
|
18,642 |
|
|
|
6,358 |
|
|
|
9,422 |
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
|
|
Six Months Ended |
|
Three Months Ended |
||||||||||||
|
(in thousands, except per share data) |
|
|
2022 |
|
|
|
2021 |
|
|
|
2022 |
|
|
|
2021 |
|
|
Acquisition expenses (benefit), net |
|
|
97 |
|
|
|
560 |
|
|
|
12 |
|
|
|
(96 |
) |
|
Restructuring expenses, net |
|
|
3,915 |
|
|
|
534 |
|
|
|
1,908 |
|
|
|
79 |
|
|
Separation expenses, net |
|
|
42 |
|
|
|
10,865 |
|
|
|
10 |
|
|
|
2,154 |
|
|
Provision for legal claim |
|
|
37 |
|
|
|
142 |
|
|
|
7 |
|
|
|
— |
|
|
Other adjustments |
|
|
2 |
|
|
|
(147 |
) |
|
|
3 |
|
|
|
18 |
|
|
Non-GAAP operating (loss) income |
|
$ |
(39,514 |
) |
|
$ |
32,043 |
|
|
$ |
(17,447 |
) |
|
$ |
14,722 |
|
|
Depreciation and amortization |
|
|
8,211 |
|
|
|
7,593 |
|
|
|
4,305 |
|
|
|
3,802 |
|
|
Adjusted EBITDA |
|
$ |
(31,303 |
) |
|
$ |
39,636 |
|
|
$ |
(13,142 |
) |
|
$ |
18,524 |
|
|
Non-GAAP operating margin |
|
|
(23.5 |
)% |
|
|
13.8 |
% |
|
|
(21.4 |
)% |
|
|
12.7 |
% |
|
Adjusted EBITDA margin |
|
|
(18.6 |
)% |
|
|
17.1 |
% |
|
|
(16.2 |
)% |
|
|
15.9 |
% |
|
|
|
|
|
|
|
|
|
|
||||||||
|
Other (expense) income reconciliation |
||||||||||||||||
|
GAAP other loss, net |
|
|
(247 |
) |
|
|
(362 |
) |
|
|
(974 |
) |
|
|
(514 |
) |
|
Change in fair value of equity investment |
|
|
(1,660 |
) |
|
|
(729 |
) |
|
|
— |
|
|
|
— |
|
|
Non-GAAP other loss, net |
|
$ |
(1,907 |
) |
|
$ |
(1,091 |
) |
|
$ |
(974 |
) |
|
$ |
(514 |
) |
|
|
|
|
|
|
|
|
|
|
||||||||
|
Tax provision reconciliation |
||||||||||||||||
|
GAAP provision for income taxes |
|
|
447 |
|
|
|
1,211 |
|
|
|
312 |
|
|
|
382 |
|
|
Effective income tax rate |
|
|
(0.8 |
)% |
|
|
(117.6 |
)% |
|
|
(1.1 |
)% |
|
|
26.9 |
% |
|
Non-GAAP tax adjustments |
|
|
12,325 |
|
|
|
2,565 |
|
|
|
(17,060 |
) |
|
|
1,351 |
|
|
Non-GAAP provision for income taxes (1) |
|
$ |
12,772 |
|
|
$ |
3,776 |
|
|
$ |
(16,748 |
) |
|
$ |
1,733 |
|
|
Non-GAAP effective income tax rate |
|
|
(30.8 |
)% |
|
|
12.2 |
% |
|
|
90.9 |
% |
|
|
12.2 |
% |
|
|
|
|
|
|
|
|
|
|
||||||||
|
Net (loss) income attributable to Cognyte software Ltd. reconciliation |
||||||||||||||||
|
GAAP net loss attributable to Cognyte Software Ltd. |
|
$ |
(59,242 |
) |
|
$ |
(4,674 |
) |
|
$ |
(28,874 |
) |
|
$ |
(285 |
) |
|
Revenue adjustments |
|
|
488 |
|
|
|
820 |
|
|
|
244 |
|
|
|
387 |
|
|
Amortization of acquired technology |
|
|
341 |
|
|
|
341 |
|
|
|
170 |
|
|
|
170 |
|
|
Amortization of other acquired intangible assets |
|
|
502 |
|
|
|
954 |
|
|
|
251 |
|
|
|
650 |
|
|
Stock-based compensation expenses |
|
|
11,463 |
|
|
|
18,642 |
|
|
|
6,358 |
|
|
|
9,422 |
|
|
Acquisition expenses (benefit), net |
|
|
97 |
|
|
|
560 |
|
|
|
12 |
|
|
|
(96 |
) |
|
Restructuring expenses, net |
|
|
3,915 |
|
|
|
534 |
|
|
|
1,908 |
|
|
|
79 |
|
|
Separation expenses, net |
|
|
42 |
|
|
|
10,865 |
|
|
|
10 |
|
|
|
2,154 |
|
|
Provision for legal claim |
|
|
37 |
|
|
|
142 |
|
|
|
7 |
|
|
|
— |
|
|
Other adjustments |
|
|
2 |
|
|
|
(147 |
) |
|
|
3 |
|
|
|
18 |
|
|
Change in fair value of equity investment |
|
|
(1,660 |
) |
|
|
(729 |
) |
|
|
— |
|
|
|
— |
|
|
Non-GAAP tax adjustments |
|
|
(12,325 |
) |
|
|
(2,565 |
) |
|
|
17,060 |
|
|
|
(1,351 |
) |
|
Total adjustments |
|
|
2,902 |
|
|
|
29,417 |
|
|
|
26,023 |
|
|
|
11,433 |
|
|
Non-GAAP net (loss) income attributable to Cognyte Software Ltd. |
|
$ |
(56,340 |
) |
|
$ |
24,743 |
|
|
$ |
(2,851 |
) |
|
$ |
11,148 |
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
Table comparing GAAP diluted net loss per share attributable to Cognyte Software Ltd. to Non-GAAP diluted net loss (income) per share attributable to Cognyte Software Ltd. |
||||||||||||||||
|
GAAP diluted net loss per share attributable to Cognyte Software Ltd. |
|
$ |
(0.88 |
) |
|
$ |
(0.07 |
) |
|
$ |
(0.43 |
) |
|
|
(0.00 |
) |
|
Non-GAAP diluted net (loss) income per share attributable to Cognyte Software Ltd. |
|
$ |
(0.83 |
) |
|
$ |
0.37 |
|
|
$ |
(0.04 |
) |
|
$ |
0.17 |
|
|
GAAP weighted-average shares used in computing diluted net loss per share attributable to Cognyte Software Ltd. |
|
|
67,494 |
|
|
|
66,128 |
|
|
|
67,677 |
|
|
|
66,405 |
|
|
Additional weighted-average shares applicable to non-GAAP diluted net income per share attributable to Cognyte Software Ltd. |
|
|
— |
|
|
|
805 |
|
|
|
— |
|
|
|
646 |
|
|
Non-GAAP diluted weighted-average shares used in computing net (loss) income per share attributable to Cognyte Software Ltd. |
|
|
67,494 |
|
|
|
66,933 |
|
|
|
67,677 |
|
|
|
67,051 |
|
|
|
|
Six Months Ended |
|
Three Months Ended |
||||||||||||
|
(in thousands, except per share data) |
|
|
2022 |
|
|
|
2021 |
|
|
|
2022 |
|
|
|
2021 |
|
|
Table of reconciliation from GAAP net loss attributable to Cognyte Software Ltd. to adjusted EBITDA |
||||||||||||||||
|
GAAP net loss attributable to Cognyte Software Ltd. |
|
$ |
(59,242 |
) |
|
$ |
(4,674 |
) |
|
$ |
(28,874 |
) |
|
$ |
(285 |
) |
|
As a percentage of GAAP revenue |
|
|
(35.4 |
)% |
|
|
(2.0 |
)% |
|
|
(35.6 |
)% |
|
|
(0.2 |
)% |
|
Net income attributable to noncontrolling interest |
|
|
2,147 |
|
|
|
2,433 |
|
|
|
1,178 |
|
|
|
1,327 |
|
|
GAAP provision for income taxes |
|
|
447 |
|
|
|
1,211 |
|
|
|
312 |
|
|
|
382 |
|
|
GAAP other expense (income), net |
|
|
247 |
|
|
|
362 |
|
|
|
974 |
|
|
|
514 |
|
|
Amortization of acquired technology |
|
|
341 |
|
|
|
341 |
|
|
|
170 |
|
|
|
170 |
|
|
Amortization of other acquired intangible assets |
|
|
502 |
|
|
|
954 |
|
|
|
251 |
|
|
|
650 |
|
|
Depreciation and amortization |
|
|
8,211 |
|
|
|
7,593 |
|
|
|
4,305 |
|
|
|
3,802 |
|
|
Revenue adjustments |
|
|
488 |
|
|
|
820 |
|
|
|
244 |
|
|
|
387 |
|
|
Stock-based compensation expenses |
|
|
11,463 |
|
|
|
18,642 |
|
|
|
6,358 |
|
|
|
9,422 |
|
|
Acquisition expenses (benefit), net |
|
|
97 |
|
|
|
560 |
|
|
|
12 |
|
|
|
(96 |
) |
|
Restructuring expenses, net |
|
|
3,915 |
|
|
|
534 |
|
|
|
1,908 |
|
|
|
79 |
|
|
Separation expenses, net |
|
|
42 |
|
|
|
10,865 |
|
|
|
10 |
|
|
|
2,154 |
|
|
Provision for legal claim |
|
|
37 |
|
|
|
142 |
|
|
|
7 |
|
|
|
— |
|
|
Other adjustments |
|
|
2 |
|
|
|
(147 |
) |
|
|
3 |
|
|
|
18 |
|
|
Adjusted EBITDA |
|
$ |
(31,303 |
) |
|
$ |
39,636 |
|
|
$ |
(13,142 |
) |
|
$ |
18,524 |
|
|
As a percentage of non-GAAP revenue |
|
|
(18.6 |
)% |
|
|
17.1 |
% |
|
|
(16.2 |
)% |
|
|
15.9 |
% |
Contacts
Investor Relations Contact
Dean Ridlon
Cognyte Software Ltd.
