Thank you, operator. Hello, everyone.

I'm Dean Ridlon, Cognyte's Head of Investor Relations. Thank you for joining us today.

I'm here with Elad Sharon, Cognyte CEO, and David Abadi, Cognyte CFO. Before getting started, I would like to mention that accompanying our call today is a presentation.

If you'd like to view these slides in real time during the call, please visit the Investor section of our website at cognyte.com, click on Upcoming Events, then the webcast link for today's conference call. I would also like to draw your attention to the fact that certain matters discussed on this call may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 and other provisions of the federal securities laws.

These forward-looking statements are based on management's current expectations and are not guarantees of future performance. Actual results could differ materially from those expressed in or implied by these forward-looking statements.

The forward-looking statements are made as of the date of this call, and except as required by law, Cognyte assumes no obligation to update or revise them. Investors are cautioned not to place undue reliance on these forward-looking statements.

For a more detailed discussion of how these and other risks and uncertainties could cause Cognyte's actual results to differ materially from those indicated in these forward-looking statements, please see our annual report on Form 20-F for the fiscal year ended January 31st, 2026, and other filings we make with the SEC. The financial measures discussed today include non-GAAP measures.

We believe investors focus on non-GAAP financial measures in comparing results between periods and among our peer companies that publish similar non-GAAP measures. Please see today's presentation slides, our earnings release, and the Investor section of our website at cognyte.com for a reconciliation of non-GAAP financial measures to GAAP measures.

Non-GAAP financial information should not be considered in isolation from, as a substitute for, or superior to GAAP financial information, but is included because management believes it provides meaningful information about the financial performance of our business and is useful to investors for informational and comparative purposes. The non-GAAP financial measures that the company uses have limitations and may differ from those used by other companies.

Now I would like to turn the call over to Elad.

Thank you, Dean, and hello, everyone. Q2 was a strong quarter for Cognyte.

We are growing, executing against our operating plan, and strengthening the business as we scale. Total software revenue grew 21% year-over-year, and recurring revenue grew 18%, both meaningfully faster than total revenue.

Profitability expanded significantly faster than revenue, reflecting the leverage we have built into the model. Behind that performance is a healthy environment across the markets we serve.

Governments in our markets are prioritizing national security, military intelligence, border security, and public safety, and they're investing to build the intelligence capabilities these missions now require. Threats are moving faster, data volumes are growing, and agencies need technology they can trust, explain, and control.

That is why AI and sovereignty are now the center of customer discussions. First, AI is reshaping how intelligence work is done, transforming both the threat and the opportunity.

As investigative environments become more data intensive and time-sensitive, customers are looking for AI and agentic capabilities embedded directly within their operational workflows. AI helps agencies not only work faster, but differently: uncovering hidden connections, surfacing insights that would otherwise be missed, taking the routine work off analysts so their expertise goes where it counts.

A commercial AI engine on its own does not do that. It is only a starting point.

What turns it into something an agency can use are two things. The first is domain expertise: knowing how intelligence work is done, what the data means, and where the answer is likely to be.

The second is governance. In mission-critical work, an analyst has to know why the technology reached a conclusion and be able to stand behind it.

Agencies do not accept a black box, they're not buying AI tools. They're buying platforms powered by AI, built by domain experts who understand the mission.

That is much harder thing to build, and the reason it is hard is the nature of the work. Intelligence work is not made of common cases.

It is the rare, the obscure, and the deliberately hidden. A general-purpose model handles the common well; that is not where our customers' investigations live.

Second, sovereignty. Agencies want their intelligence capabilities under their own control: their data, their infrastructure, their operations.

Security agencies cannot afford to depend on systems they do not own and control. They want the data to stay where they decide, the systems to run where they decide, and the ability to keep operating whatever happens around them.

Putting AI and sovereignty together with what we shared with you before, the growth in the volume and complexity of data and how fragmented most agencies' environments have become, you can see why the Cognyte platform is such a strong fit. Agencies need to work with more data than ever, faster than ever, with AI they can trust and explain, and on infrastructure they control.

This is the environment our platform is built to serve. We win for a few reasons.

Agencies choose us because we cover the whole spectrum, from the field to the decision. They can run it under their own control in the environments they are actually operating.

We bring domain expertise, built from working with government customers around the world, which we then keep feeding back into our solutions. These advantages are helping us win against competitors, including in-house built systems, and we saw that translate into strong commercial traction across expansions, upgrades, and new logos.

New logo activity remained strong across geographies, with 40 new customers in H1 compared to 31 in the same period last year. One of them is a Tier 1 national security agency in a NATO-member nation, who were referred to us by another agency we serve.

We expanded within our customer base. Among our expansions this quarter, two in Asia-Pacific stand out: one to expand its network intelligence capabilities, another to secure its borders, including mitigating unmanned aerial threats.

In the US, we made progress across all priority segments. In federal, several opportunities have moved into procurement following strong proof-of-concepts and operational demonstration.

In state and local, we won with both new and existing customers. We are on target to achieve $20 million of signed deals in the US this year.

That momentum across our growth pillars has continued since quarter end, with several additional significant agreements signed. We'll provide more details on these wins in the coming weeks.

The takeaway is simple: our growth strategy is working, and the momentum is broad and global. We took part in major events across four continents.

These events spanned a range of intelligence missions, including law enforcement, military intel, and national security. In the US, at the largest law enforcement event, NATIA, inbound interest was high.

In addition, agencies are approaching us directly after reading about Cognyte in the trade and business press, or on referrals from other agencies or from industry experts. In this market, agencies rely on what their peers have already deployed, and that works in our favor.

Reputation is key. What we hear from prospects and customers in these engagements is the same thing we have been describing to you for several quarters.

Agencies are drowning in data they already hold, the environment is fragmented, they are under pressure to move faster than their systems allow, and now, on top of that, they have to decide how to bring AI into work where every conclusion has to be defensible on infrastructure they control. These are the problems we are built to address.

Customers are bringing us into strategic conversations early as they shape their future plans and think through what next-generation intelligence solutions should look like. That engagement works both ways.

They look to us for perspective and innovative solutions, and we listen closely to their priorities, using that insight to help shape where we invest. Those relationships take years to build, and the trust behind them is what lets us keep growing with customers as their missions evolve.

On the organization: Adam Philpott joined us as Chief Revenue Officer early last month to lead our global commercial organization. Adam brings deep experience building and scaling go-to-market teams in the security industry globally, and he joins Cognyte at an important time, with strong customer momentum and a healthy demand environment that presents a significant opportunity.

His priorities are the same three growth drivers: expanding with existing customers, winning new agencies, and accelerating our growth in the United States. I'm excited to have Adam on the team and look forward to working with him as we build on the momentum across the business.

In closing, Cognyte is stronger, more focused, and better positioned than a year ago. The market is moving directly towards what we have built for: mission-critical intelligence in complex, high-stakes environment, powered by trusted AI, sovereign control, and continuous innovation, all grounded in deep domain expertise earned through long-term relationships with customers around the world.

Our strategy is working, our momentum is global, and the quality of our business continues to improve. With strong execution and clear visibility ahead, we remain confident in our full-year outlook and fiscal '28 targets.

We have built the platform, the expertise, and the trust this market now demands, and we are moving forward with confidence and ambition. With that, I'll turn the call over to David for a deeper review of our results and outlook.

Thank you, Elad, and hello, everyone. Elad talked about the quality of the business improving.

That is exactly what our financial model is designed to deliver. We drive profitable growth by increasing the contribution from software and recurring revenue, expanding gross margins, and maintaining discipline around operating expenses.

That model is working. Revenue was approximately $109 million, up 12% year-over-year.

Total software revenue grew 20.9% to $100.8 million and represent more than 92% of total revenue in Q2. Recurring revenue grew 18.4% year-over-year to $56.2 million and represented 51.4% of total revenue.

Professional services represented less than 8% of total revenue, compared with approximately 15% a year ago, reflecting the increasing software content of our business. This ongoing mix shift supports higher-quality revenue, stronger margins, and greater scalability.

Put simply, software revenue grew at nearly twice the company overall growth rate, while recurring revenue also grew significantly faster. The result: both are becoming larger contributors to our overall revenue mix.

A point to note about recurring revenue is that our model is different from a traditional SaaS model. A portion of our recurring revenue comes from term-based licensing arrangements that are recognized at a point in time rather than ratably over the life of the contract.

As a result, recurring revenue is not the same as ARR and can fluctuate between quarters based on the timing of revenue recognition. What matters strategically is that recurring revenue is growing faster than the company overall and becoming a larger part of our business, enhancing revenue visibility and supporting long-term growth.

Now, I will review the results in more details. Breaking down the revenue mix: software revenue grew 34.5% year-over-year to $49.2 million.

Software revenue is comprised of perpetual licenses, appliances, and term-based subscription license. Software services revenue grew by $4.8 million, or 10.3% year-over-year, to $51.6 million, coming mainly from support contracts and, to a lesser extent, cloud-based SaaS subscriptions.

Total software revenue was $100.8 million, up 20.9%, growing significantly faster than total revenue and up by $17.5 million year-over-year. Software revenue now represents more than 92% of total revenue versus approximately 86% one year ago.

Professional services revenue was $8.4 million in Q2 compared to $14.2 million last year. Recurring revenue increased by 18.4% to $56.2 million, representing 51.4% of total revenue.

On gross margins and profit: we continue to improve year-over-year. Q2 non-GAAP gross margin was 73.7%, an expansion of 154 basis points.

Non-GAAP gross profit grew 14.4%, or $10.1 million, to a total of $80.5 million, again faster than revenue. Our model continues to deliver strong financial leverage, and profitability is expanding significantly faster than revenue.

The majority of the year-over-year increase in operating expenses reflected foreign exchange movements, primarily the weaker US dollar against the Israeli shekel. We continued to partially hedge future periods.

We partially offset that impact through ongoing efficiency initiatives across the organization, including increased use of enterprise AI. Despite the FX headwinds, operating expenses grew more slowly than revenue, allowing profitability to grow significantly faster.

Q2 non-GAAP operating expenses were $68.2 million. GAAP operating income increased 69.7% year-over-year to $4.7 million against revenue growth of 12%.

Non-GAAP operating income increased 52.5% to $12.2 million. Adjusted EBITDA increased 35.7% to $14.9 million.

Non-GAAP EPS was 15 cents, nearly double the 8 cents we generated last year. GAAP diluted EPS was 6 cents compared with 2 cents a year ago, reflecting the significant improvement in our profitability.

These results demonstrate the operating leverage we have been working to build. Revenue grew 12%, while non-GAAP operating income grew more than four times as fast.

Looking at the first half, the same trends are evident. H1 revenue was $214.7 million, up 11.2%.

Total software revenue was $198.1 million, up 19.8%. Recurring revenue was $108.1 million, up 14.2%.

GAAP operating income was $9.1 million, up 85.1% year-over-year. Non-GAAP operating income was $22.9 million, up 47.2%.

Importantly, we achieved these results despite approximately $7 million of net unfavorable foreign exchange impact on operating profitability in the first half of the year. Across both the quarter and the first half, we are seeing consistent execution against our financial model.

Compared with a year ago, Cognyte is generating more revenue with higher quality: more software revenue, higher recurring revenue, higher gross margins, and meaningfully greater profitability. Turning to RPO: total RPO at quarter end was $470.2 million, including $313.4 million of short-term RPO.

As we discussed previously, RPO remains an indicator of future contracted revenue, but movement in the metric can also reflect contract structure, duration, renewals, and the consumption of large, multi-year agreements. Reported RPO excludes the cancelable portion of subscription contracts.

At July 31, approximately $42 million of future revenue associated with those arrangements was therefore not included in reported RPO. In addition, approximately $30 million of the change in the RPO reflected the consumption of large, multi-year support contracts as we delivered against those agreements and recognized the associated revenue.

Short-term RPO is an important component of our revenue visibility, but it does not capture the full picture. When we combine short-term RPO with expected renewals of recurring business and contracts signed since quarter end, we have visibility into approximately 85% of the revenue required to support our plan over the next 12 months.

The remaining approximately 15% is expected to come primarily from normal book-and-ship activity. That level is well within our historical execution range and supports our confidence in our growth objectives.

This level of visibility is one of the reasons we believe we remain on track to achieve our FY27 outlook and FY28 revenue target of $500 million. Q2 billings were $76.3 million.

As billings can vary significantly quarter-to-quarter based on contract terms, we believe the trailing-12-months measure is more informative. On that basis, billings were approximately 95% of revenue, which we believe reflects the underlying strength of the business.

Turning to cash flow: we generated $1.1 million of positive cash flow from operations in Q2, compared to net cash used in operating activity of $6.3 million in Q2 last year. This improvement reflects stronger collections and profitability, as well as disciplined working capital management.

The second quarter also includes our annual incentive payments and other seasonal working capital uses. Turning to our balance sheet: our financial position remains strong.

We ended the quarter with $102.2 million in cash and no debt, providing us with significant flexibility. During the first six months of fiscal '27, we repurchased approximately 1.5 million ordinary shares for $13.5 million.

Since launching our first repurchase program in November 2024, we have repurchased approximately $40.2 million of shares through the end of Q2 FY27, out of the $60 million authorized across the company's repurchase programs. Our capital allocation priorities remain unchanged.

We'll continue investing organically to support growth, evaluate strategic M&A opportunities where we see the potential to create returns significantly in excess of our cost of capital, and use share repurchases opportunistically when we believe they represent a compelling use of capital. Turning to our outlook: our first-half performance remains strong, and the demand environment is healthy.

Based on our execution to date and the visibility we have into the remainder of the year, we are narrowing our full-year revenue range around an unchanged midpoint. We now expect full-year revenue of approximately $448 million, plus or minus 2%, representing approximately 12% year-over-year growth at the midpoint.

We continue to expect recurring revenue to grow faster than total revenue and become a larger contributor to overall business. As we have discussed, the increasing adoption of subscription agreements can shift the timing of reported revenue recognition compared with our historical perpetual model.

While this can affect reported growth in a particular period, we believe the continued shift toward recurring arrangement strengthens the long-term visibility and durability of our revenue base. Total software represented a particularly high percentage of revenue in Q2.

We expect quarterly mix to continue to fluctuate based on the timing and composition of customer activity, and our full-year outlook does not assume the Q2 mix persists throughout the second half. From a quarterly cadence perspective, we currently expect Q3 revenue to be slightly higher than Q2, followed by sequential growth in Q4, consistent with the seasonality reflected in our full-year outlook.

We also remain confident in our profitability outlook. We expect non-GAAP gross margin of approximately 73.5% for the year, an improvement of 50 basis points from last year.

We continue to expect non-GAAP operating income to be about $56 million, growth of more than 50% year-over-year, and adjusted EBITDA of approximately $68 million, growth of about 40%. We continue to expect annual non-GAAP EPS of 47 cents at the midpoint of the range.

On cash flow, we continue to expect significant positive operating cash flow for the full year. Given the customer demand and future growth opportunities, we are making targeted inventory investments to support expected customer deliveries.

As a result, the timing and the level of cash generation this year is expected to be affected. It reflects a deliberate working capital investment rather than any change in the underlying performance of the business.

To close, the progress we are making reflects the strength of our strategy and the discipline of our execution. We are building a higher-quality business: one with a greater contributions from software, a growing recurring revenue base, stronger margins, and increasing operating leverage as we scale.

This is not only about the first half or even the fiscal year; it's about building a more durable, more predictable, and more profitable Cognyte for the long term. With healthy demand, strong customer momentum, and clear visibility into the opportunities ahead, we remain confident in our FY27 outlook and on track to achieve our FY28 targets.

Operator, we are ready to take questions.

A couple of questions. First off, Elad, for the US federal pipeline, you talked about there's good success there, you've got some transactions that are in the procurement phase.

Just curious to know if these are transactions that you expect to be awarded during the current fiscal year, the government fiscal year ended September 30th, or if that's something that's further out on the horizon? Hi

Eric, good morning, and thanks for the question. Yes, actually we have progress with federal agencies.

We had POCs with a few law enforcement fed agencies, very successful results, very good feedback from customers, and I do expect some deals already in this fiscal year.

Okay. Then for David, the RPO number that you gave, that $470 million total RPO number, that was down versus the April quarter, which was down versus the January quarter.

Are we expecting that to trough and recover here? Can you give me a little bit more insight on the total RPO number?

Sure. It's important to say that demand is very strong, and it's aligned to our strategy.

I think it's reflected in the strong customer expansions we discussed and we shared with you, and also with new logos that we have acquired. We also see growing customer preference for subscription-based arrangements.

This also improves the quality and visibility of the business, but has some shifts that are affecting the reported RPO. RPO is important indicator for visibility, but given the business dynamics today, it doesn't tell the full story by its own.

You need to look at it in a wider perspective. This includes RPO that excludes subscription periods, as David mentioned earlier, that remain subject to cancellations, and it's about $42 million by the end of Q2.

You have a large multi-year contracts that are recognized and consumed over time. We shared a few times before that we have very large renewals for 3 years.

Every year we consume one-third of it, you see that the consumption takes the RPO down. If you look at it specifically for this quarter, actually this year, it's about $30 million.

Other two indicators that are related to RPO are renewals. Renewals are not included in RPO until they are contractually committed.

It's important to understand that it doesn't really matter whether the customers are buying perpetual or buying subscription. Still, the solutions that we deliver to them are integrated in their environment, deliver a lot of value, there will be renewals.

Until it's committed by the contracts, it's not part of the RPO. Also the timing of large deals impact the quarter-end balance.

If you have to look at visibility more broadly, you should take the RPO, the expected renewals, the customer activity, the strong start we have seen in Q3 that we'll share more color in the next few weeks. We believe we have very strong visibility over the next 12 months, and as David mentioned before, it's about 85% coverage for the next 12 months revenues, and we remain confident in our outlook for this year and also for fiscal '28 target.

We are seeing a very healthy demand, very strong market, and a very strong execution into this market.

Understand. Appreciate the insight from the questions, and congrats on the quarter.

Thank you, Eric.

Hey guys, thanks for taking my question. A couple of clarifications.

Number one for David: if I look at the cRPO bookings, David, it accelerated. It was strong this quarter again, similar to last quarter.

I think if I'm doing my math right, the cRPO bookings grew 16%. You're guiding to revenues growth of 12% this year and 12% next year.

Typically the cRPO bookings are a good leading indicator of revenues. Given the gap between your revenue guide and cRPO bookings that we've seen for the last two quarters, are you just being conservative or there's something else that we should be mindful of given the cRPO bookings are growing at 16%, but you're guiding to revenue growth of only 12% for this year and for next year?

Thank you, Taso. Actually, we are seeing a few things that happening in the business, and we actually very pleased from that.

We spoke during the call about the quality of the revenue. You see that we have more and more subscription revenue that's coming, and much more software.

If you look at the overall mix, software is becoming very significant portion, and we have the growth of 21%, and it's a consistent growth that we see over the last few periods. This is something that we see as a trend.

As for the demand and what we have in our hands, it give a lot of confidence into the end of this year and also when we entering into the next year. The visibility is high.

You mentioned percentage, 12% and 15%. The way that we look at that is that we are working with our customer to see deployment and what can be done, and based on that, putting our guidance.

We are feeling comfortable with the guidance, and if we will need to update, we will be more than happy to do it.

Taso, let me add on this that actually, while we are growing top line, we're improving the quality of the revenue a lot. As David mentioned, software mix is growing, the recurring revenue is growing, profitability is expanding.

Actually, if you would compare the perpetual equivalent versus the subscription that we see today, actually the growth would be higher if you would continue to deliver the same as perpetual license in a few points. Actually, the growth rate is faster than it looks in the numbers.

No, fair point. Then, David, last quarter we had a little bit of weakness on the operating cash flow due to, I guess, the shift to subscriptions and also FX.

This quarter also, the cash flow looks negative. Any comment on the I know last year you last quarter you said the full-year guide was maintained at 45 million.

Any comment on the full-year expectations for for cash flow for this year?

Thank you, Taso. The cash actually in Q2 was strong.

What we see in Q2 that we were able to generate positive cash flow from operation, and actually we pleased from the quarter. Q1 Q2, actually, is the Q that we have some specific expenses that related to annual bonus and stuff like that, taking place usually in Q2.

Although these seasonal payments, we were able to drive a strong cash flow from operation. Actually, if you look this year, generating $1.1 million of cash from operation; last year, Q2 was negative 6.3.

Actually, if you look at Q2 versus Q2 last year, you're seeing a strong cash from operation. On the other perspective, given the trends that we see in the business and given what we see actually in hardware and the needs for inventory and supply chain that required a different planning, we are making a deliberate decision to increase a level of inventory, and it's mainly to support what we see customer demands and deliverables, and we don't want to have any risk related to execution and deliverables.

We made a decision to increase the level of the inventory, so that also impact the way that we're looking into this year cash flow. We think that the right things is to make the right decision in the short term of increasing inventory levels to support future growth and execution and customer deliverables.

Just to clarify, we are still expecting cash flow of 45 million for the year?

No, we said what we are planning is that we would like to increase the inventories level. As you can see, the balances in the end of Q2, and we continue to do this decisions.

We believe that this is the right thing to do in this time of the year. It allow us to better plan, better support future demand.

We see significant demand in front of us, and we want to be able to deliver to our customer on time, and that create for us the right, in our view, the right decision to increase inventory. We will invest in the right things to make the growth into the future.

Guys, thanks. One last one.

I think, Elad, last quarter you had mentioned that you expect about 20 million of bookings from US for fiscal '27. Are we still on track of that or is that we could be slightly better than what you had expected last quarter for the US?

Actually, yeah, we are on track. We are on track to achieve the $20 million signed deals this year.

Expect this to come from state, local, and also some federal contracts should land this fiscal year. We are doing a good progress in the US.

Thanks, guys.

Thanks, Taso.

Hey guys, it's Matthew Calitri over at Needham. Thank you for taking the questions.

David, I want to stay on the cash flow for a second there. Understood with the inventory purchases, and obviously that's a prudent decision by you guys, credit there.

There was a slight change in language there from significant positive operating cash flow versus the 45 million. How should we think about the impact of that level of inventory purchasing?

Matt, I'll start, and then I'll let David continue. I think it's important to understand that we want to be in a position to be able to grow as the demand is growing, and for that reason, we want to be able to invest in inventory for two reasons, actually.

The first one is related to demand, and the second one is related to the supply environment. Supply environment today, the delivery times are long, and the prices are going up, and we want to be in a position that we are able to fulfill the demand, the growing demand of the customers.

That's the rationale behind it. It's quite difficult to predict how far we'll go with inventory increase, but we'll do it, of course, in a cautious manner in a way that balances, of course, the level of inventory we have in stock, but also the ability to fulfill the demand on time and to be able to deliver to customers as contracted.

That's the logic and the rationale behind it. Now I'll let David answer specifically to the question.

Given that we cannot quantify in this stage, the impact of the incremental inventory and what we see changing in this area, and taking a session that we've seen much more subscription, we are not quantified what will be the cash flow of operation, but overall, we think that it will be significantly positive. The question, how much exactly we'll invest in the inventory levels, it's will be based on what we see in the market.

Currently, what we see in the market, we see strong demand. You can see that we already increased the level of the inventory in the first half of the year significantly.

Against this inventory, you actually a strong demand, and we have customer planning to be delivered for this inventory. Actually, we are in a very good situation that allow us to satisfy our customer, to plan ahead, and avoid disruption that related from supply chain that it's not under our control.

Got it. That makes sense.

Then the other part to that is obviously the impact from the subscription recognition, and great to see the continued adoption of subscription. Is there a way to think about what growth might look like had we not have that sort of revenue recognition headwind?

More to that, kind of just trying to square away the strong results and underlying currents here with the visibility with you guys keeping the guide unchanged and some of this RPO and billings dynamics that you spoke about earlier.

Matt, first of all, I'll share why some customers moving to subscription, and then I'll give you our view of how it would be different if it would be perpetual. Threats are moving quickly, we said that earlier in the call, agencies need the latest capabilities.

Governments, when they go to perpetual license and buy a solution, later on to upgrade and expand, it's a new cycle of purchasing, which is a headache for them. Actually, the fact that some of them are moving to subscription gives them the flexibility to get the latest and greatest technology and expand without being required to go through the entire process.

We see it happening gradually, but faster than expected. Issue one.

Second, we continue to sell both perpetual and subscription, and perpetual is still the dominant portion, okay? It's moving to subscription faster than expected, but we have heavy portions that is still perpetual.

It's also important to understand that regardless of contract structure, whether it's subscription or perpetual, our solutions are deeply integrated and embedded into customer operational environments. If you heard earlier in the call, I mentioned AI and sovereignty.

Sovereignty, some of it means that customers want on-prem deployment. It could be that they'll go for subscription agreement, but still it will be on-prem.

That's usually what happens. Subscription is something that gives the customers flexibility while being able to run faster in terms of technology and make sure that they maintain advantages versus the adversary.

That's the rationale of moving to subscription for customers. Our view is that if we would be in the same pace as last year, for example, selling perpetual versus subscription, or mix is not changing, we would see a few percentage more in growth rate.

I think that it's great news that we maintain the top-line growth outlook, while more of the revenue is coming from recurring. This is, I think, a good indication that the market is growing faster than it looks in the numbers, and the predictability and the visibility are improving over time.

It's reflected in recurring, it's reflected in software mix, and it's also reflected in the profitability levels. I think that the business is improving.

Great, thank you, guys.

Thanks, Matt.

Thank you, Livia, and thank you all for participating in today's call. Should you have any questions, please feel free to reach out to me, and we look forward to speaking with you again next quarter.