- $5M EMEA Military Intelligence Deal: Secured a follow-on subscription agreement with a tier-one military intelligence organization in EMEA, reinforcing AI-driven technology leadership and growth potential in defense sectors.
- Q3 Revenue Growth: Revenue reached $100.7M (+13.2% YoY), with software revenue at $41.9M (+39.6% YoY), driven by strong demand for software solutions and profitable growth.
- Revised FY 2026 Outlook: Raised full-year revenue guidance to $400M (+14% YoY) and adjusted EBITDA to $47M (+60% YoY), reflecting confidence in momentum and market expansion.
- Customer Wins Momentum: Announced $65M ACV in customer wins YTD, with RPO growing ~10% YoY, highlighting a robust backlog and recurring revenue model for sustained growth.
- Gross Margin Expansion: Achieved 73% gross margin in Q3, up from 72.3% FY target, driven by 80%+ margins in software/services and improved professional services efficiency.
Revenue Growth Drivers
The revenue growth was driven by the company's software solutions, with software revenue growing 39.6% year over year. The company's software services revenue also increased, up $1.6 million from last year. As David Abadi, CFO, noted, "We continue to see a strong foundation inside each agency is ultimately what makes wider collaborations possible." The company's platform ingests, normalizes, enriches, and correlates data, creating a coherent, connected operational picture of actionable intelligence.
Valuation Metrics
Looking at Cognyte Software's valuation metrics, the company's P/S Ratio stands at 1.77, indicating a relatively reasonable valuation compared to its revenue. The EV/EBITDA ratio is 31.7, which may indicate a relatively high valuation compared to its earnings before interest, taxes, depreciation, and amortization. Analysts estimate next year's revenue growth at 14.5%, which may justify the current valuation to some extent.
Guidance and Outlook
Cognyte Software raised its full-year outlook for the fiscal year ending January 2026, expecting revenue of approximately $400 million, representing year-over-year growth of approximately 14%, and adjusted EBITDA of approximately $47 million, representing overall growth of approximately 60%. The company's strong RPO growth, up 10% year over year, provides confidence in its future growth prospects.
Operational Performance
The company's operational performance was also strong, with a significant win in the military intelligence domain, a $5 million follow-on subscription agreement with a tier-one military intelligence organization in EMEA. The company's AI-driven technology gives it a clear edge in this space, and its team is executing with precision and purpose.