Key Highlights

● Cognyte announced a one-year renewal worth over $20 million with an EMEA security agency.

● Second-quarter revenue was $109.2 million, up about 12.0%, with software revenue up 20.9%.

● Adjusted EBITDA rose 35.7% to $14.9 million, and non-GAAP gross margin was 73.7%.

● The company held $102.2 million of cash and no debt at 31 July 2026.

Latest verified development

Cognyte Software Ltd. (NASDAQ:CGNT) announced on 30 September 2026 a one-year renewal worth more than $20 million with a top-tier national security agency in the EMEA region. The agency has used Cognyte's platform for over a decade across counterterrorism, national security threats and organised crime work, and the renewal covers ongoing support and access to new AI-powered capabilities. Chief executive Elad Sharon said the agency has relied on Cognyte for more than a decade.

It followed two other contract announcements in September: an expansion of about $20 million with an EMEA national security customer on 22 September, and a contract of about $10 million with a long-standing APAC national security customer on 15 September. Customers are not named, and contract values are the company's own descriptions. The announcements give values for single deals rather than recognised revenue, and the timing of revenue depends on delivery.

Latest reported results

Results for the second quarter of fiscal 2027, ended 31 July 2026, came on 9 September. Revenue was $109.2 million, up about 12.0%, and first-half revenue was $214.7 million, up about 11.2%. Total software revenue rose 20.9% to $100.8 million, more than 92% of the total, and recurring revenue was $56.2 million, up 18.4%, or 51.4% of revenue.

Non-GAAP gross margin was 73.7%, up 154 basis points, and adjusted EBITDA, a non-GAAP measure, was $14.9 million, up 35.7%. GAAP net income attributable to Cognyte was $4.1 million against $1.5 million a year earlier, equal to $0.06 per diluted share. Non-GAAP diluted earnings per share were $0.15, against $0.08.

Compared with the first quarter, reported on 3 June at $105.5 million, second-quarter revenue was about 3.5% higher, and adjusted EBITDA rose from $13.6 million to $14.9 million. The profit improvement is therefore visible both year on year and sequentially, though the quarterly sums involved are small.

Cash, buybacks and guidance

Cognyte held $102.2 million of cash and no debt at quarter-end. Operating cash flow was $1.1 million, compared with an outflow of $6.3 million a year earlier. About 1.5 million shares were repurchased in the first half for roughly $13.5 million, and since November 2024 about $40.2 million has been used under a $60 million authorisation.

For fiscal 2027 the company narrowed its revenue range to $448 million plus or minus 2%, leaving the midpoint unchanged, and reaffirmed adjusted EBITDA of about $68 million and non-GAAP diluted earnings per share of $0.47. It said it remains on track for its fiscal 2028 targets, though all of these are forecasts.

Cash fell from $109.2 million at the end of April to $102.2 million at the end of July, a decline that sits alongside share repurchases and a still-modest operating cash inflow.

Software growth and contract run in fiscal 2027

Software revenue growing at 20.9% against 12.0% for total revenue is the central feature of the quarter, and the September contract run is the most visible evidence of demand behind it. The 73.7% non-GAAP gross margin and the reiterated adjusted EBITDA of about $68 million set the yardstick for the second half.

With operating cash flow only just positive at $1.1 million, the question is whether cash generation catches up with the improvement in reported profit.