What's Going On With Cognyte Software Shares After Q1 Results?

Cognyte Software Ltd. CGNT reported first-quarter fiscal 2025 sales growth of 12.9% year over year to $82.714 million, beating the consensus of $82.046 million.

Adjusted EPS loss of $0.04 beats the consensus loss of $0.06.

Gross margin expanded 265 bps to 70.6%, and the adjusted gross margin jumped to 71.1% from $68.4% YoY.

Adjusted EBITDA margin improved to 6.1%, compared with a 3.1% loss a year ago.

Cognyte held $107 million in cash and equivalents at the end of the quarter. The company’s operating cash flow for the quarter totaled $21.45 million, up from $18.93 million a year ago.

“Given our momentum and good visibility, we increased our outlook for FYE25. We continue to be excited about the opportunities in front of us and believe we are positioned for sustainable growth and continuing improvement in profitability,” commented Elad Sharon, Cognyte’s chief executive officer.

“With the leverage we have in our business model, we now expect Adjusted EBITDA to be about $22 million and to generate about $37 million of cash from operations,” Sharon added

2025 Outlook: Cognyte expects fiscal revenue of $344 million (prior $340 million) at the midpoint with a range of +/-2% versus the consensus of $339.02 million.

The company sees an Adjusted EPS loss of $0.07 (prior view $0.13 loss) at the midpoint of its revenue outlook versus a consensus loss of $0.13 and an Adjusted EBITDA of $22 million (prior view about $19 million) at the midpoint of its revenue outlook.

Stock-based compensation is expected to be between approximately $16 and $18 million.

Price Action: CGNT shares are trading lower by 5.63% at $7.55 at the last check Tuesday.

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