Cognyte Analyst Leaves Estimates Unchanged Over Divestment Update

Needham analyst Mike Cikos reiterated a Hold on Cognyte Software Ltd CGNT.
Cognyte agreed to sell its Situational Intelligence solutions to Volaris for $47.5 million, with performance-based earnout payments of up to $35.0 million over three years.
The deal will likely close in 4Q23. Cikos leaves his estimates intact until the sale closes.
Adjusting for the asset sale, Cognyte's revenue in FY22 grew 9.9% to $439.5 million, implying the Situational Intelligence business declined 23.5% to $36.1 million, he noted.
On a year-to-date basis, Situational Intelligence has contributed 10% of revenue (or $16.8 million), indicating a stabilization of the business versus FY22 performance.
He added that the sale of Situational Intelligence further reduces Cognyt's Enterprise exposure (12% of revenue in FY22) to sub-5%.
Price Action: CGNT shares traded higher by 8.14% at $2.85 on the last check Wednesday.

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