Cognyte Software Ltd. · NASDAQ:CGNT
Cognyte Software — Q3 FYE23 Earnings Presentation
30 slides from Cognyte Software's earnings presentation, Dec 20, 2022
Slide 1: Q3 FYE23 Conference Call
Q3 FYE23 Conference Call December 20, 2022 1
Slide 2: Disclaimers
Disclaimers Forward Looking Statements This presentation contains "forward-looking statements," including statements regarding expectations, predictions, views, opportunities, plans, strategies, beliefs, and statements of similar effect relating to Cognyte Software Ltd. These forward-looking stateme
Slide 3: Overview
Overview + Regained visibility + Achieved a turning point + Driving sequential revenue growth in Q4 and FY2024 + Targeting breakeven cash flow from operations in Q4 and FY2024 3
Slide 4: Q3 Large Deal Wins
Q3 Large Deal Wins National Security National Intelligence National Security Competitive Win Expansion Expansion >$20 Million Deal ~$3 Million Deal ~$3 Million Deal Selected based on: Selected based on: Selected based on: Superior technology & Technology strength & Track record of success domain exp
Slide 5: Backlog Conversion
Backlog Conversion + Engaged with customers to firm up Total RPO deployment schedules (Excluding SIS) $540 $530 $527 + Q3 Total RPO of $527M $520 $510 $507 + Q3 Short-term RPO of $248M $500 $490 $485 $480 $470 $460 Q1 FYE23 Q2 FYE23 Q3 FYE23 5
Slide 6: Operating Expense Reductions
Operating Expense Reductions Quarterly Non-GAAP OPEX (Excluding SIS) $75 $70 $69.1 $65.4 $65 $59.6 $60 $55.0 $55 $50 $45 $40 $35 $30 Q1 FYE23A Q2 FYE23A Q3 FYE23A Q4 FYE23E GAAP operating expense for Q1 FYE23 was $81.6 million, Q2 FYE23 was $77.8 million, Q3 FYE23 was $70.2 million 6
Slide 7: Q4 Outlook
Q4 Outlook Quarterly Non-GAAP Revenue (Excluding SIS) $90 $80 $77.5 $72.9 $63-$72 $70 $61.5 $60 $50 $40 $30 $20 $10 $- Q1 FYE23A Q2 FYE23A Q3 FYE23A Q4 FYE23E GAAP revenue for Q1 FYE23 was $86.4 million, Q2 FYE23 was $81.1 million, Q3 FYE23 was $71.3 million 7
Slide 8: Initial FY2024 Outlook
Initial FY2024 Outlook Approximately 5% Targeting breakeven year-over-year revenue growth cash flow from operations 8
Slide 9: Turning Point
Turning Point + Regained visibility – resuming guidance + Driving sequential revenue growth in Q4 and FY2024 + Targeting breakeven cash flow from operations in Q4 and FY2024 + Long-term opportunity ‒ Security threats are pervasive ‒ Leading innovative technology 9
Slide 10: Financial Summary
Financial Summary 10 10
Slide 11: Q3 FYE23 Financials (excluding SIS)
Q3 FYE23 Financials (excluding SIS) + Non-GAAP Revenue: $61.5 million + RPO: $527 million ‒ Sequential increase of $20 million + Non-GAAP Gross Margin 61.1% ‒ Opportunities for future improvement + Operating expense structure improved ‒ $9.5 million lower than Q1 FYE23 GAAP revenue for Q3 FYE23 was
Slide 12: Situational Intelligence Solutions ("SIS") Divestiture
Situational Intelligence Solutions (“SIS”) Divestiture + SIS historically about 10% of revenue + Gross cash proceeds of $42.3 million received in Q4 − Expect to receive additional post-closing adjustment proceeds − Potential future earnout proceeds + More SIS details available in Financial Dashboard
Slide 13: Q4 Outlook
Q4 Outlook Quarterly Non-GAAP Revenue (Excluding SIS) $90 $80 $77.5 $72.9 $63-$72 $70 $61.5 $60 $50 $40 $30 $20 $10 $- Q1 FYE23A Q2 FYE23A Q3 FYE23A Q4 FYE23E GAAP revenue for Q1 FYE23 was $86.4 million, Q2 FYE23 was $81.1 million, Q3 FYE23 was $71.3 million 13
Slide 14: Initial FY2024 Outlook
Initial FY2024 Outlook + Approximately 5% year-over-year revenue growth − Modest sequential revenue increases quarter to quarter + Improved cost structure year-over-year + Targeting breakeven cash flow from operations 14
Slide 15: Summary
Summary Regained Achieved a Driving sequential Targeting breakeven visibility turning point revenue growth in cash flow from Q4 and FY2024 operations in Q4 and FY2024 15
Slide 16: Thank you
Thank you cognyte.com 16
Slide 17: Appendix
Appendix 17 17
Slide 18: Summary metrics
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Slide 19: Summary metrics – Excluding SIS
Summary metrics – Excluding SIS 19
Slide 20: Revenue metrics
Nine Months Three Months Ended Year Ended Three Months Ended Ended (§ in millions) 473012021 173112021 10/31/2021 113112022 13172022 43012022 T3202 10/31/2022 10/31/2022 ‘Software and software services revenue - GAAP. 1024 401.9 100.0 707 725 65.0 Professional services and other revenue - GAAP. 123
Slide 21: Constant currency metrics
Constant currency metrics 21
Slide 22: Gross profit
Nine Months Three Months Ended Year Ended Three Months Ended Ended ($in millions) 4130/2021 713112021 40/31/2024 4131/2022 4131/2022 f 7131/2022 10/31/2022 40531 Total GAAP gross profit s 819 $ 83.9 $ 86.1 $ ao8 $ ais S 516 $ 514 $ 442 147.3. Total GAAP gross margin 71.4% 72.3% 72.7% 71.8% 72.1% 59.
Slide 23: Operating expenses
‘Three Months Ended Three Months Ended ($n millions) 4/30/2024 7131/2024 103112021 13 1342022 Restructuring expenses ‘Separation expenses Other adjustments Non-GAAP research and development, net ‘as a % of non-GAAP revenue GAAP selling, general and administrative expenses: $ 508 $ 45.1 ¢ 43.1 $ 46.8
Slide 24: Operating and EBITDA margins
Operating and EBITDA margins 24
Slide 25: Other Income, Tax and Net Income
Other Income, Tax and Net Income 25
Slide 26: EPS
[GAAP diluted net income (loss) per share attributable to Connvte software Ltc. Non-GAAP diluted net income (loss) per share attrioutable to Cognyte software Ltd. GAAP weighted-average shares used in computing diluted net income (loss) per common share ‘Additional weighted-average shares applicable
Slide 27: Footnotes
Footnotes Note: Amounts may not foot throughout the workbook due to rounding. The actual cash tax paid, net of refunds, was $9.5 million and $1.8 million for the nine and three months ended October 31, (1) 2022, respectively, and $6.1 million and $2.8 million for the nine and three months ended Octo
Slide 28: Supplemental information and non-GAAP measures
Supplemental information and non-GAAP measures Supplemental Information About Non-GAAP Financial Measures and Operating Metrics The press release includes reconciliations of certain financial measures not prepared in accordance with GAAP, consisting of non-GAAP revenue, non-GAAP gross profit and gro
Slide 29: Supplemental information and non-GAAP measures
Supplemental information and non-GAAP measures Amortization of acquired technology and other acquired intangible assets. When we acquire an entity, we are required under GAAP to record the fair values of the intangible assets of the acquired entity and amortize those assets over their useful lives.
Slide 30: Supplemental information and non-GAAP measures
Supplemental information and non-GAAP measures Non-GAAP income tax adjustments. We exclude our GAAP provision (benefit) for income taxes from our non-GAAP measures of net income attributable to Cognyte Software Ltd., and instead include a non-GAAP provision for income taxes, determined by applying a