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's CEO, and David Abadi, Cognyte's 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. Hello, everyone, and thank you for joining us today.

We delivered a solid start to fiscal 2027, reflecting steady execution across the business and sustained demand for Cognyte's investigative analytics solutions. Revenue grew with double-digit year-over-year, supported by strong customer activity and better-than-expected adoption of our subscription offerings, momentum that is driving the growth of recurring revenue.

Gross margin remained strong. Profitability improved significantly, growing faster than revenue and reflecting the leverage in our model.

This successful outcome also reflected our proactive management of macro pressures, notably foreign exchange movements and rising hardware-related costs, which we'll continue to monitor closely and work to offset. Across the world, agencies are undergoing pressure to resolve increasingly complex investigations and turn fragmented data into intelligence and intelligence into operational action.

Before turning to our customer activity, a few words on the trends shaping demand. First, the intelligence environment is growing more complex.

Threats are moving faster, data volumes are expanding rapidly, information is increasingly fragmented across domains, and adversaries are becoming more interconnected and sophisticated. As a result, agencies must generate actionable intelligence faster and operate more effectively in highly dynamic environments.

Second, agencies across law enforcement, national security, defense, and other public safety organizations are advancing and expanding their intelligence and investigative capabilities and investing in advanced technologies to meet evolving mission requirements. This includes growing investments in integrated intelligence capabilities for use cases such as border security, operational intelligence, multi-domain investigations, financial crime, and cyber-related threats.

Third, AI is reshaping how intelligence work gets 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 operational workflows, with the governance, oversight, explainability, and accountability required for mission-critical environments, rather than standalone AI tools.

It helps agencies not only work faster, but also uncover hidden connections, surface insights that would otherwise be missed, and improve decision-making. These are not abstract trends.

They show up directly in how our customers describe their challenges to us: in our customer conversations, in competitive evaluations, and in expansion conversations. Agencies that came to us a few years ago for a single use case are now asking how to extend across domains, integrate additional data sources, and enable broader investigative and operational workflows through our unified intelligence platform.

This pull from the installed base is one of the clearest signals of platform stickiness we see. These trends align closely with Cognyte's strengths and are increasingly visible in customer demand across our business.

Day in and day out, customers depend on our cutting-edge AI-driven analytics to solve problems that matter most to their missions. During Q1, we executed against the key pillars of our growth strategy.

What drives both new and existing customer wins is straightforward: we collapse work that used to take weeks of manual correlation into one cohesive environment, fusing data across sources, surfacing connections, and delivering actionable intelligence. When agencies evaluate us against alternatives, the combination of value, speed, and integration is what wins the deal.

Importantly, once deployed, the platform becomes deeply embedded in how their missions operate. As a result, we are displacing incumbents, including in-house built systems, as agencies recognize that fragmented and manually intensive workflows cannot keep pace with the scale, speed, and complexity of modern investigations.

With that background, the Q1 results show real traction. We saw strong customer engagement globally: new logos, competitive deals, expansions, and upgrades.

We extended within our customer base, including a new three-year subscription agreement valued at over $20 million, which we recently announced, as well as a large expansion deal valued at over $10 million. New logo activity remained robust across geographies, and we are encouraged by the pace and quality of customers we are bringing on.

In the US, we made good progress. In state and local, we secured a number of new logos.

In federal, we advanced multiple opportunities through proof of concepts and live operational demonstrations with excellent feedback. The pipeline is maturing, including opportunities that we developed directly and through our partnerships.

This year, we expect to generate $20 million in deals and believe there is a significant long-term opportunity in the largest and most sophisticated security market in the world. We evolve our solutions in line with where our customers' missions are heading and have, over time, shared some examples from our portfolio with you.

Today, I want to highlight financial investigations, another growing domain where we are bringing significant innovation. We recently introduced new capabilities in this area, addressing rising demand around transnational illicit financing and the broader evolution of financial crime.

They help agencies follow the money across traditional and digital currencies, expose the hidden networks behind sanctions evasion and terror financing, the networks that bad actors work hard to conceal. This innovation is already delivering in the field.

As we previously announced, Tier 1 military intelligence agencies in EMEA used our platform to counter terror financing with successful results and even earned a national Ministry of Defense innovation award for their operational impact. This reflects how we operate across every domain: we listen closely to our customers, monitor the evolving threat landscape through our domain specialists, identify where missions are heading, and deliver integrated solutions that address emerging operational needs, the same engine behind border intelligence, financial investigations, and what comes next.

Moving to guidance: based on our performance and customer engagement, we remain confident in our full-year fiscal 2027 outlook. We are reaffirming total revenue guidance, while at the same time lifting our recurring revenue growth expectations and improving visibility.

We are focused on execution, innovation, and market opportunities that support sustainable, profitable growth. In summary, we delivered another quarter of solid results while growing recurring revenue.

We operate in a growing, mission-critical market with high barriers to entry. We continue to expand with both new and existing customers.

We are making encouraging progress in the US, with approximately $20 million of business expected this year. AI continues to strengthen the value and differentiation of our platform, and we remain well-positioned for continued growth and expanding profitability.

At the core of everything we do is a simple proposition: we help the people responsible for keeping the world safe do their job faster, more effectively, and with greater confidence in their intelligence. That mission only becomes more critical as the threat environment grows more complex.

The more complex the threat environment becomes, the more indispensable our platform becomes to the agencies that rely on it. With that, I will turn the call over to David for a deeper view of our results.

David?

Thank you, Elad, and hello, everyone. We started fiscal 2027 with another quarter of solid execution across the business.

Our results this quarter reflect the substantial value our differentiated solutions deliver to customers and the ongoing operational discipline with which we are running the business. Perpetual deployments remained a critical component of our business, reflecting customer preferences driven by workflow and stringent security requirements.

At the same time, we are seeing a clear and growing shift towards subscription adoption across parts of our customer base. This shift is strengthening recurring revenue and increasing long-term visibility, while naturally introducing timing dynamics across RPO, billings, and cash generation.

Revenue for Q1 FY2027 was $105.5 million, up $9.9 million or 10.4% year-over-year, reflecting a continuing healthy demand environment. Breaking down the revenue mix: software revenue was $47.3 million, an increase of $9.9 million or 26.5% year-over-year.

Software revenue is comprised of perpetual licenses, appliances, and some term-based subscription licenses. Software services revenue grew by $5.4 million or 12.1% year-over-year to $50.1 million.

Software services revenue comes mainly from support contracts and, to a lesser extent, cloud-based SaaS subscriptions. Total software revenue grew by $15.3 million year-over-year, or 18.6%, significantly faster than total revenue, reflecting the increasing contribution of software revenue within our business mix.

Professional services revenue was $8.2 million in Q1, down from $13.5 million in Q1 last year. Quarterly fluctuations in professional services revenue is expected and are primarily a result of revenue recognition timing.

Recurring revenue increased by 10% to $51.9 million, representing 49.2% of total revenue. The growth was driven by the stronger-than-expected adoption of our subscription offerings, where we have seen an increased momentum recently.

This supports the expansion of our recurring revenue base and visibility. Looking at gross margin and profit, we continued to make meaningful improvement.

Q1 non-GAAP gross margin was 72.9%, an expansion of 100 basis points year-over-year. Non-GAAP gross profit continued to grow faster than revenue and increased by $8.2 million or 12% year-over-year to $76.9 million.

On profitability: Q1 non-GAAP operating expenses were $66.2 million. The majority of the year-over-year increase in opex is due to the continuing weakness of the US dollar mainly versus Israeli shekel.

GAAP operating income was $4.4 million, doubling from $2.2 million last year. Non-GAAP operating income reached $10.7 million, an increase of $3.1 million or 41.5% year-over-year.

Adjusted EBITDA continues to expand significantly faster than revenue. It was $13.6 million, up 31.5% from the $10.3 million generated in Q1 last year.

As a result of the FX dynamics, Q1 FY2027 non-GAAP other expenses were a loss of $2.2 million. While we maintain our annual non-GAAP tax expenses outlook for the year to be about $15 million, in Q1, our non-GAAP tax expenses were $5.1 million.

As a result, Q1 non-GAAP EPS was 3 cents, reflecting the timing of the tax accruals, which are weighted towards the first half of the year, and FX-related other expenses. We continue to expect annual non-GAAP EPS of 47 cents.

Our Q1 performance again highlights that as software revenue grows, the leverage in our model generates significantly higher profitability. As recurring revenue becomes a larger part of the business, some of our operational metrics increasingly reflect the timing characteristics of subscription arrangements.

Q1 billings grew 31.2% year-over-year to $102.7 million. RPO, or remaining performance obligations, is contracted revenue to be recognized in future periods and remains an important indicator of our revenue visibility.

It is influenced by factors including deal cycles, subscription deals, deployment timing, contract duration, renewal timing, and seasonality. RPO continues to reflect the increasing contribution of subscription-based arrangement within our business mix.

As a reminder, our RPO calculation excluded $42 million of cancellable subscription amounts as of January 31st, 2026, and accounts for the proportional annual consumption of multi-year large support contracts. Taking these factors into account, the strength of our reported RPO remains clear.

While fluctuation from quarter to quarter are expected in RPO, current levels support our growth expectations. At the end of Q1, total RPO was $528.8 million.

Total RPO is sum of contract liabilities of $128.9 million and backlog of $399.8 million. Short-term RPO was $363.4 million, providing solid visibility into revenue over the next 12 months.

Turning to cash performance: we ended the quarter with $109.2 million in cash and no debt, providing significant strategic flexibility. During Q1, we generated $6.5 million from the sales of a minority investment.

Recent FX and hardware cost dynamics and the demand for subscription offering affect the timing profile of cash generation and collections. In Q1, we had negative cash flow from operations of $4.7 million and negative free cash flow of $6.1 million, primarily driven by adoption of subscription offering, FX dynamics, and inventory build-up to support future revenue.

We are actively monitoring the various dynamics and continue to expect cash flow from operations to be about $45 million for the full year. The board remains committed to long-term shareholder value creation and has confidence in our growth prospects.

Our capital allocation approach is disciplined and focused on returns. Cash above what we maintain for liquidity and working capital is deployed to the opportunities we believe offer the strongest long-term returns, including acquisitions and share repurchases.

During Q1, we bought about 1 million ordinary shares for an aggregate purchase price of approximately $8.2 million. Since launching our first repurchase program in November 2024, we have repurchased approximately $35 million of shares through the end of Q1, out of the $60 million authorized across our repurchase programs.

We remain focused on balancing investment in innovation and market expansion while improving operating efficiency. Our financial model continues to scale well, and as revenue grows, we see opportunities for additional leverage.

For fiscal 2027, we are reiterating the outlook we provided at year-end: expect full-year revenue of about $448 million, plus or minus 3%. This represents approximately 12% year-over-year growth at the midpoint of the revenue range.

While we are reaffirming our total revenue outlook for FY2027, the recurring revenue is increasing faster than expected. We now expect recurring revenue to become a larger contributor to overall growth and to grow faster than total revenue.

The fact that we are reiterating our revenue outlook while recurring revenue is growing faster than anticipated reflects the underlying strength of customer demand and the increasing predictability of our business. We believe that our strong short-term RPO, together with the growing recurring revenue and the continuing favorable demand environment, support this revenue outlook.

We continue to expect sequential growth each quarter through the balance of the year, aligned with the seasonality of previous years. We continue to expect non-GAAP gross margin to increase year-over-year to approximately 73.5%.

This reflects an improvement of 50 basis points from last year. Gross margin may fluctuate between quarters based on our revenue mix.

As a result of the improved gross margin, we expect gross profit to increase at a faster rate than revenue growth. Given the FX environment, we took proactive action, and as a result, we continue to expect non-GAAP operating income to be about $56 million, more than 50% growth year-over-year.

We expect adjusted EBITDA to be about $68 million, representing about 40% year-over-year growth, all at the midpoint of the revenue range. We continue to expect annual non-GAAP EPS to come in at 47 cents at the midpoint of the revenue range.

While we remain on track to achieve our FY2028 adjusted EBITDA target on a constant currency basis, we decided to update the target to approximately 23% to reflect exchange rate changes, and we'll continue to monitor and take action accordingly. Based on the progress we continue to make across our three growth pillars: expanding within our installed base, winning new logos, and growing our presence in the US market, we believe we remain on track to meet our revenue target of approximately $500 million for the fiscal year ending January 31st, 2028.

To conclude, we entered the year with solid performance across the business, and our execution remains focused and consistent. AI continues to enhance the value and operational impact of our solutions.

We are performing well in the US and expect $20 million of business this year. Our balance sheet remains robust, providing flexibility and stability.

Our RPO and recurring revenue drive visibility and predictability. Overall, we are executing effectively against our strategy and delivering consistent growth even in dynamic environments.

This underscores the resilience of our business, the mission-critical nature of our solutions, and the enduring trust of our customers. We are well-positioned to deliver sustained, profitable growth and significant value creation.

Thank you again for joining us today and for your continued support of Cognyte. Operator, we are ready to take questions.

Hey, guys. Morning.

Thanks for taking my question. Two questions.

Number one, if you look at the current RPO, the current RPO bookings looks like that accelerated almost to 60%. Given the strong performance in the quarter, given the acceleration in the current bookings, you're still maintaining your full-year guide.

David, the question is, is it just conservatism or is it something that you're seeing that makes you maintain the guide for the full year?

Hi, Taz. Thank you for the question.

Yes, we had a good progress that we're doing across the business, and as you can see from the results that we deliver in Q1, we ended Q1 with strong results across our revenue and profitability lines. If you refer to the RPO, it's not about conservatism or not.

As part as looking at RPO, we are looking at deployment cycle and timing, and based on that, we defined the guidance. We are very pleased that we keep the guidance as is, while we're increasing recurring revenue.

In Q1, we already delivered 10% year-over-year growth in recurring revenue, and giving the fact that we believe that it will continue with us, we are very pleased with these trends that we are able to keep the guidance and increasing the recurring revenue.

Very helpful. Then cash flow came a little bit lighter, I think, than the Street was expecting.

Can you just walk us through what exactly happened there with the cash flow? You said there was an impact from FX and subscription revenues.

You're keeping your full-year guide intact at $45 million. Maybe just given the weakness or given like a slight shortfall in Q1 cash flow, what gives you the confidence to maintain the the $45 million full-year full-year cash flow guide?

Before going to the cash flow, let's speak a little bit about the dynamics. From an FX perspective, we're seeing in the last few weeks a significant weakness of the US dollar mainly versus the shekel, that creates some impact on also in Q1.

On top of that, we're seeing that more subscription sales. When you have subscription, the profile of cash generation and collection related to that is changing.

On top of that, giving what we see from cost of hardware, and giving the demand we see in front of us and what we expect to deliver, we decided to increase the inventory levels. If you look at Q1 already, you can see that the inventory level increased by $3 million, and this is something that we did to support this year already demand.

We will continue to do it as long as we see the demand is growing, and we believe that this is the trend that we are facing right now. Why we believe that we will continue to deliver the $45 million?

Because when we look at the expectation that we have, and what going to be billed and collect within this year, we believe that we'll be able to achieve the $45 million. It will be back-ended.

It will be more on the second half of the year. Usually Q2 is negative, and Q3 and Q4 are strong, and we believe that it will be the same this year, and we'll be able to achieve our guidance.

Obviously, we're monitoring carefully the FX dynamics and what's going on in the market to make sure that we're going to achieve it.

Yep. Very helpful.

Then maybe one last one for Elad. Elad, you gave us you you're expecting about $20 million of deals to come from the US this year.

I believe last quarter you said that out of the incremental $100 million revenues you'll get, almost a quarter of that will come from the US. Given what you saw in Q1, given your your guide for $20 million in in this year, are we still on track to achieve what you told us last last quarter for for for US revenues?

Yes. Actually, our confidence level in the US is increasing.

The US represent one of the largest, most strategic, advanced markets globally, including in security, of course. There are many security agencies in state and local and federal level.

We are in this market for quite a while now. We discuss the demand for many customers.

We do see that our technology is clearly resonating. We have great customer feedback and also prospects.

Customers feedback, those that already operational, and prospects that are running demos and POC with us, including in the federal side. We are scaling our market presentation, we are growing sales and marketing efforts, and actually, our visibility is much stronger today than before.

We are leveraging partners more effectively. If I look at the US market, I always believed in this market.

Today, I also have the confidence to quantify it. I think that for this year, for next year, we should see strong results in this market: $20 million of deals in this year, and the 25 on top of it next year.

Also, I see a potential for an overachievement. For now, we guide on what we see.

Generally speaking, the confidence level and the market traction is very good.

Just to be clear, the $20 million, is that bookings, or is that revenues this year from the US?

The $20 million is deals that we expect to get in the US. We expect that a significant portion of it will translate into revenue.

If it will be exactly or not, it's too early to state, but we believe that $20 million of deals will be executed this year.

Yep. Got it.

Thank you, guys. Very helpful.

Hey, guys. This is Matt Calitri over at Needham.

Thank you for taking our questions, and good to see the software and recurring revenue strength during the quarter. Given the outperformance delivered in the first quarter, are you still expecting an 87/13% split between software and professional services, or is that going to skew a little bit now?

Actually, as you mentioned, you can see that the software revenue is growing fast, and actually, we saw this pattern also last year that the software revenue is going fast. Actually, this year, we're seeing software is going fast and recurring revenue is going fast and software services is going fast.

From a mix perspective, we keep our same view about the year, about the mix. Obviously, Q1 is a very strong from a mix perspective that we have much less professional services, and this is what we want over time.

We in this phase keeping the mix as is in the level of around, I would say, 87% to 13%, but it can be a little bit better, but this is the range.

Okay. That would imply a pretty material deceleration in software revenue as we go through the rest of the year.

Was there anything one-time in nature included in that, or is it just conservative? How are you thinking about that?

Actually, it's related to the recurring revenue. Think about the idea that we have much more recurring revenue, which is something that we didn't have before.

If you look at last year, last year, the growth from recurring revenue was 3.5%. This year, we expect that it will be more than the total revenue growth.

We expect that recurring revenue will grow more than 12%. Which in practically, when you are having more recurring revenue and that growing fast, and you keep your your top-line your top-line growth, it's indicated on a very healthy business while we doing transition and being able to keep growing.

Sorry, David. I'm not sure I'm following there.

With the recurring revenue growth would be driven by software growth, my question is just sort of on the implied decel in software if to get from the strength in the first quarter to still that same 87% mix would imply most of the strength in the back of the year would come from professional services.

The reason behind it, think that in this software, you will have more recurring. The portion of the recurring will be higher.

Although the growth rate of the total software will be slightly less than what you saw in Q1, but the mix, the share of the recurring revenue will be higher, because in the end, we expect to grow more than 12% on total recurring revenue this year. It's about what building the software revenue.

You will have within the software revenue more recurring revenue.

Okay. Then on that point with the more recurring revenue: so last quarter you guys had mentioned that while you were seeing more subscription wins, you weren't ready to call it a pattern.

Clearly, that's continued, which is great to see, as you mentioned. What changed this quarter to sort of drive this continued strength and the expectation that it's going to continue?

Yeah.

Hi, Matt. This is Elad.

Our customers are operating in a very dynamic and evolving threat environment. When moving to subscription, they actually benefit from faster tech refresh, and they are able to maintain high value of the solutions they have and, of course, do better job and be more successful in what they do.

If you remember, we discussed quite a long time that we are offering our solutions both perpetual and subscription, and the reception of customers is gradually growing, but their purchasing behavior for most of them is still perpetual. They used to buy in capex and actually buy the license and then support contracts.

Recently, I do believe that it's also related a little bit to AI, but also to the tech refresh, because the changes in the technology are faster than before. They want to be able to benefit from the innovation and the availability of new technologies that we offer them.

For that reason, I believe they are more receptive to recurring revenue and to subscription. I also want to remind you that also when they buy perpetual, they still have reoccurring purchasing behavior.

They expand with us, upgrade with us. Actually, it's a real land and expand.

The tech refresh is much slower than whether if you had subscriptions. As David mentioned, we are very pleased that we are able to grow the recurring revenue and, in parallel, to maintain the overall top-line growth.

I think it's a good indication that customers benefit from the value, and also we are able to increase profitability much faster than revenue. If you look at the fundamentals of the business, we do see top-line growing, we're maintaining guidance, while recurring revenue is growing, and we maintain very strong profitability leverage.

This is an indication, I think, on market health and execution.

Awesome. That's great to hear.

Thank you, guys.

Thank you.

Thank you, Shannon, 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.