Cognyte Software (CGNT) Q2 2026 earnings summary

Executive summary

• Q2 FYE26 revenue grew 16% year-over-year to $98 million, with adjusted EBITDA up 33% to $11 million and GAAP net income of $2.7 million; cash flow from operations was negative $6 million due to seasonal expenses.

• Strong demand for mission-critical intelligence solutions, highlighted by major $10 million military intelligence deals in Asia-Pacific and EMEA, including competitive wins over incumbents.

• Technology platform integrates signal processing, insight mining, and investigative analytics, with AI-powered solutions recognized by Gartner for predictive analytics and public safety.

• U.S. market expansion is a strategic priority, supported by a new alliance with LexisNexis Risk Solutions and ongoing customer engagement, despite temporary procurement delays.

• Completed a $20 million share repurchase program and authorized a new $20 million buyback over 18 months.

Financial highlights

• Q2 FYE26 revenue was $97.5 million, up 15.5% year-over-year; software revenue grew 35.9% to $36.6 million, and software services revenue rose to $46.7 million.

• Professional services revenue increased to $14.2 million; recurring revenue was $47.4 million, representing 48.7% of total revenue.

• Non-GAAP gross margin expanded to 72.1%, with gross profit of $70.3 million, up 16.8% year-over-year.

• Q2 non-GAAP operating income was $8 million, adjusted EBITDA $11 million, and GAAP net income $2.7 million (EPS $0.02).

• H1 FYE26 revenue reached $193.1 million, up 15.5% year-over-year; H1 adjusted EBITDA was $21.3 million, and non-GAAP EPS was $0.15.

Outlook and guidance

• FY26 revenue guidance raised to $397 million (+/-2%), representing 13% year-over-year growth; adjusted EBITDA expected at $45 million, up 55% year-over-year.

• Annual non-GAAP gross margin expected at 72%, with non-GAAP EPS projected at $0.23.

• Q3 and Q4 revenues expected to grow sequentially; operating cash flow for FY26 projected at $45 million.

• Long-term targets reaffirmed: $500 million revenue, 73% gross margin, and >20% adjusted EBITDA margin by FY28.