Cognyte Software Shares Drop On Weak Q3 Outlook

Security analytics software firm Cognyte Software Ltd CGNT reported second-quarter revenue growth of 9.5% year-on-year on a non-GAAP basis to $116.38 million, beating the consensus of $115.57 million.
Segments: Software revenue was flattish at $47.96 million. Software service revenue grew 20.7% Y/Y to $53.9 million. Professional service and other revenue increased 10.4% Y/Y to $14.1 million.
The non-GAAP gross margin expanded 260 bps to 73.5%.
Non-GAAP EPS of $0.17 beat the consensus of $0.15.
Cognyte held $79.1 million in cash and equivalents. It generated $0.378 million in operating cash flow during the six months ended July 31.
"During the quarter, we received multiple seven and eight figure orders and we continue to see strong market demand for security analytics. Both our Q1 and Q2 results came in ahead of expectations, reflecting our successful transition to a software model," said CFO David Abadi.
Outlook: Cognyte sees Q3 revenue of $112 million - $117 million, below the consensus of $123.93 million.
It sees a Q3 EPS of $0.10, below the consensus of $0.19.
For the full year ending January 31, 2022, the company sees revenue up ~10% to $490 million, +/- 2%, representing $480.2 million - $499.8 million, versus the consensus of $489.98 million.
It sees FY EPS of $0.82 at the midpoint of its revenue outlook, compared to the consensus of $0.80.
Price Action: CGNT shares traded lower by 5.93% at $26.5 in the premarket session on the last check Monday.

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