Slide 1: Q1 FYE23 Conference Call
Q1 FYE23 Conference Call June 28, 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: Q1 Results
Q1 Results + Results impacted by temporary challenges − Revenue shortfall − Profitability impact + Taking steps to navigate current environment − Improving execution − Reducing costs 3
Slide 4: Q1 Continued to Win Large Deals
Q1 Continued to Win Large Deals National Security Law Enforcement National Intelligence Expansion Expansion Expansion >$15 Million Deal >$5 Million Deal >$5 Million Deal Selected based on: Selected based on: Selected based on: Ability to scale and keep pace Positive prior experiences with Positive p
Slide 5: Current Challenges
Current Challenges + Supply chain Short-Term Challenges Well Positioned for Long-Term Growth + Slow pipeline conversion − Internal execution − Macroeconomic and geopolitical environment 5
Slide 6: Actions in Progress
Actions in Progress + Addressing internal execution − High-potential territories Short-Term Challenges − Consultative approach to sales − Comprehensive pipeline inspection + Insights from customer meetings 6
Slide 7: Long-term Opportunity
Long-term Opportunity + Security threats are pervasive + Market leader in investigative analytics + Deep customer relationships 7
Slide 8: Financial Summary
Financial Summary 88
Slide 9: Q1 FYE23 Revenue
Q1 FYE23 Revenue + Revenue – GAAP: $86.4 million – Non-GAAP: $86.7 million + Revenue Mix (GAAP) – Software: $24.9 million, significantly impacted by: • Supply chain • Pipeline conversion – Software Services: $45.8 million – Professional Services & Other: $15.7 million 9
Slide 10: Q1 FYE23 Gross Profit & OPEX
Q1 FYE23 Gross Profit & OPEX + Non-GAAP Gross Profit Decline of $31 million year over year − Primarily driven by software revenue decline + Non-GAAP Operating Expenses of $74.8 million, similar to Q4 FYE22 − Cost reduction initiated in early Q2 GAAP gross profit for Q1 FYE23 is $51.6 million GAAP gr
Slide 11: Balance Sheet on April 30, 2022
Balance Sheet on April 30, 2022 + Cash, cash equivalents and short-term investments of $107 million + Total Debt of $50 million from line of credit + Inventory of $18 million − Increased flexibility to address market demand 11
Slide 12: Long-term Opportunity
Long-term Opportunity Security Threats are Pervasive Market Leader in Investigative Analytics Deep Customer Relationships 12
Slide 13: Thank you
Thank you cognyte.com 13
Slide 14: Appendix
Appendix 14 14
Slide 15: Summary metrics
Summary metrics Three Months Ended Year Ended Three Months Ended GAAP to Non-GAAP 4/30/2021 7/31/2021 10/31/2021 1/31/2022 1/31/2022 4/30/2022 Reconciliation ($ in millions, except share and per share data; shares in thousands) GAAP Non-GAAP GAAP Non-GAAP GAAP Non-GAAP GAAP Non-GAAP GAAP Non-GAAP GA
Slide 16: Revenue metrics
Revenue metrics Three Months Three Months Ended Year Ended Ended ($ in millions) 4/30/2021 7/31/2021 10/31/2021 1/31/2022 1/31/2022 4/30/2022 Software and software services revenue - GAAP 102.4 101.9 100.0 107.3 411.6 70.7 Professional services and other revenue - GAAP 12.3 14.1 18.4 17.7 62.5 15.7
Slide 17: Constant currency metrics
Constant currency metrics Three Months Three Months Ended Year Ended Ended ($ in millions) 4/30/2021 7/31/2021 10/31/2021 1/31/2022 1/31/2022 4/30/2022 GAAP Revenue for the prior period ended $ 101.4 $ 105.0 $ 113.0 $ 124.0 $ 443.5 $ 114.7 Revenue for the current period ended $ 114.7 $ 116.0 $ 118.4
Slide 18: Gross profit
Gross profit Three Months Three Months Ended Year Ended Ended ($ in millions) 4/30/2021 7/31/2021 10/31/2021 1/31/2022 1/31/2022 4/30/2022 Total GAAP gross profit $ 81.9 $ 83.9 $ 86.1 $ 89.8 $ 341.6 $ 51.6 Total GAAP gross margin 71.4% 72.3% 72.7% 71.8% 72.1% 59.7% Revenue adjustments 0.4 0.4 0.4 0.
Slide 19: Operating expenses
Operating expenses Three Months Three Months Ended Year Ended Ended ($ in millions) 4/30/2021 7/31/2021 10/31/2021 1/31/2022 1/31/2022 4/30/2022 GAAP research and development, net $ 33.4 $ 36.1 $ 35.5 $ 38.3 $ 143.4 $ 38.0 as a % of GAAP revenue 29.1% 31.1% 30.0% 30.6% 30.2% 43.9% Stock-based compen
Slide 20: Operating and EBITDA margins
Operating and EBITDA margins Three Months Three Months Ended Year Ended Ended ($ in millions) 4/30/2021 7/31/2021 10/31/2021 1/31/2022 1/31/2022 4/30/2022 GAAP operating profit (loss) $ (2.6) $ 1.9 $ 7.2 $ 4.4 $ 11.0 $ (30.0) GAAP operating margin -2.3% 1.7% 6.1% 3.5% 2.3% -34.7% Revenue adjustments
Slide 21: Other expense, tax and net income
Other expense, tax and net income Three Months Three Months Ended Year Ended Ended ($ in millions) 4/30/2021 7/31/2021 10/31/2021 1/31/2022 1/31/2022 4/30/2022 Other income (expense) reconciliation GAAP other income (expense), net $ 0.2 $ (0.5) $ (0.8) $ (1.5) $ (2.7) $ 0.7 Change in fair value of e
Slide 22: EPS
EPS Three Months Three Months Ended Year Ended Ended (Shares in thousands) 4/30/2021 7/31/2021 10/31/2021 1/31/2022 1/31/2022 4/30/2022 GAAP diluted net income (loss) per share attributable to Cognyte software Ltd. $ (0.07) $ - $ 0.03 $ (0.19) $ (0.22) $ (0.45) Non-GAAP diluted net income (loss) per
Slide 23: Footnotes
Footnotes Footnotes Note: Amounts may not foot throughout the workbook due to rounding. The actual cash tax paid, net of refunds, was $3.0 million in the three months ended April 30, 2022 and $0.4 million in the (1) three months ended April 30, 2021. Revenue for the three months ended April 30, 2022
Slide 24: 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 25: 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 26: 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