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1. Company Snapshot

1.a. Company Description

Cognyte Software Ltd.provides an investigative analytics software to governments and enterprises worldwide.Its Actionable Intelligence for a Safer World, an open software designed to help governments and enterprises accelerate and enhance the effectiveness of investigations.


The company also offers network intelligence analytics, open source and threat intelligence analytics, and operational intelligence analytics solutions.Its solutions are designed to support various use cases and support a range of users, including data analysts, investigation managers, and security operations center operators, as well as operational field teams.In addition, the company provides customer support, professional, and integration services.


Its government customers include national, regional, and local government agencies; and enterprise customers consist of commercial and physical security customers.The company was incorporated in 2020 and is headquartered in Herzliya, Israel.

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1.b. Last Insights on CGNT

Negative drivers behind Cognyte Software Ltd.'s recent performance include a decline in revenue growth, partly attributed to increased competition in the national security and law enforcement sectors. The company's Q4 2025 earnings call transcript revealed a slowdown in sales, with CEO Elad Sharon citing a "challenging" market environment. Additionally, the recent $5 million investment by a national security agency in the EMEA region, while a positive development, may not be sufficient to offset the company's declining revenue growth. Furthermore, the Cognyte 2025 Threat Landscape Report highlights the increasing sophistication of cyberattacks, ransomware, and stolen credentials, which may pose a significant threat to the company's customers and, by extension, its business.

1.c. Company Highlights

2. Cognyte Software's Earnings Beat Expectations with Strong Revenue Growth

Cognyte Software Ltd. reported a strong third-quarter earnings, with revenue reaching $100.7 million, up 13.2% year over year, driven by ongoing demand for its software solutions. Software revenue was $41.9 million, an increase of $11.9 million or 39.6% year over year. The company delivered a non-GAAP EPS of $0.03, beating estimates of -$0.02. Gross margin stood at 73%, with the company guiding for a gross margin of 72.3% for the full year, representing an improvement of almost 130 basis points over last year.

Publication Date: Dec -20

📋 Highlights
  • $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.

3. NewsRoom

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Cognyte Secures $5+ Million Subscription Deal with APAC National Security Agency

Feb -12

Source: businesswire.com

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Cognyte to Participate in 28th Annual Needham Growth Conference

Jan -06

Source: businesswire.com

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New Cognyte Report Examines How Gen Z & Alpha Are Reshaping Crime

Dec -18

Source: businesswire.com

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Cognyte Software: Margins Are Expanding As Backlog Builds

Dec -12

Source: seekingalpha.com

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Cognyte Software: Inflecting Profits On Operating Leverage And Mix

Dec -10

Source: seekingalpha.com

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Cognyte Software Ltd. (CGNT) Q3 2026 Earnings Call Transcript

Dec -09

Source: seekingalpha.com

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Cognyte Reports Third Quarter Fiscal 2026 Financial Results

Dec -09

Source: businesswire.com

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Cognyte to Announce Third Quarter FYE26 Financial Results on December 9, 2025

Nov -25

Source: businesswire.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (5.79%)

6. Segments

Software Service

Expected Growth: 5.5%

Cognyte Software Ltd.'s 5.5% growth in Software Services is driven by increasing demand for cybersecurity solutions, expansion into new markets, and strategic partnerships. The company's innovative products, such as threat intelligence and incident response, are in high demand. Additionally, the growing need for digital transformation and cloud migration is fueling growth in the software services segment.

Software

Expected Growth: 6.2%

Cognyte Software Ltd.'s 6.2% growth is driven by increasing demand for cybersecurity solutions, expansion into new markets, and strategic partnerships. The company's software provides advanced threat intelligence and analytics, appealing to enterprises seeking enhanced security measures. Additionally, the growing need for digital transformation and cloud migration fuels the adoption of Cognyte's software, contributing to its rapid growth.

Professional Service and Other

Expected Growth: 5.8%

Cognyte Software Ltd.'s 5.8% growth in Professional Service and Other is driven by increasing demand for cybersecurity services, expansion into new markets, and strategic partnerships. Additionally, the company's investments in digital transformation and cloud-based solutions have improved operational efficiency, leading to higher margins and revenue growth.

7. Detailed Products

Investigate

A comprehensive investigative analytics platform that helps organizations to identify, disrupt, and prevent threats in real-time.

Voyance

An AI-powered analytics platform that enables organizations to detect, prevent, and respond to cyber threats in real-time.

WebIntelli

A web intelligence platform that provides real-time insights and alerts on online threats, risks, and opportunities.

Horizon

A physical security information management (PSIM) platform that integrates and analyzes data from various security systems to provide real-time situational awareness.

8. Cognyte Software Ltd.'s Porter Forces

Forces Ranking

Threat Of Substitutes

The threat of substitutes for Cognyte Software Ltd. is medium, as there are some alternative solutions available in the market, but they are not highly attractive to customers.

Bargaining Power Of Customers

The bargaining power of customers for Cognyte Software Ltd. is low, as the company has a strong brand presence and customers are loyal to its products.

Bargaining Power Of Suppliers

The bargaining power of suppliers for Cognyte Software Ltd. is medium, as the company has a diverse supplier base and is not heavily dependent on a single supplier.

Threat Of New Entrants

The threat of new entrants for Cognyte Software Ltd. is high, as the industry is rapidly evolving and new companies are entering the market with innovative solutions.

Intensity Of Rivalry

The intensity of rivalry for Cognyte Software Ltd. is high, as the company operates in a highly competitive industry with many established players.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 14.43%
Debt Cost 3.95%
Equity Weight 85.57%
Equity Cost 12.47%
WACC 11.24%
Leverage 16.86%

11. Quality Control: Cognyte Software Ltd. passed 3 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Stock-Card
F-Secure

A-Score: 4.1/10

Value: 4.3

Growth: 4.1

Quality: 6.7

Yield: 3.1

Momentum: 2.5

Volatility: 4.0

1-Year Total Return ->

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Stock-Card
Spirent Communications

A-Score: 4.0/10

Value: 0.8

Growth: 1.7

Quality: 5.1

Yield: 3.1

Momentum: 6.5

Volatility: 7.0

1-Year Total Return ->

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Stock-Card
HUB Cyber Security

A-Score: 3.3/10

Value: 10.0

Growth: 0.9

Quality: 5.0

Yield: 0.0

Momentum: 4.0

Volatility: 0.0

1-Year Total Return ->

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Stock-Card
XBP Europe Holdings

A-Score: 3.2/10

Value: 9.2

Growth: 1.6

Quality: 3.4

Yield: 0.0

Momentum: 5.0

Volatility: 0.0

1-Year Total Return ->

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Stock-Card
Radware

A-Score: 3.1/10

Value: 1.4

Growth: 3.6

Quality: 6.1

Yield: 0.0

Momentum: 3.0

Volatility: 4.3

1-Year Total Return ->

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Stock-Card
Cognyte Software

A-Score: 3.0/10

Value: 3.2

Growth: 4.7

Quality: 4.4

Yield: 0.0

Momentum: 4.0

Volatility: 2.0

1-Year Total Return ->

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

6.45$

Current Price

6.45$

Potential

-0.00%

Expected Cash-Flows