Q4 2025 Cognyte Software Ltd Earnings Call
Yeah.
Operator: Good day, ladies and gentlemen. Thank you for standing by. Welcome to Cognyte's fourth quarter and fiscal year-end 2025 earnings conference call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you would need to press star 11 on your telephone. You would then hear an automated message advising your hand is raised. To withdraw your question, please press star 11 again. Please note that today's conference may be recorded.
Speaker Change: Good day, ladies and gentlemen, thank you for standing by welcome to cognate fourth quarter and fiscal year end 2025 earnings conference call.
Speaker Change: At this time all participants are in a listen only mode.
Speaker Change: After the speaker's presentation, there will be a question and answer session to ask a question do we this session you would need to press star one on your telephone you wouldn't hear an automated message of bites in your hand, just raised to withdraw your question. Please press star one again.
Speaker Change: Please note that today's conference maybe recorded.
Operator: I would now like to hand the conference over to your speaker host, Dean Ridlon, Head of Investor Relations. Please go ahead.
redline: I would now like to hand, the conference over to your speaker hosting redline head of Investor Relations. Please go ahead.
Dean Ridlon: Thank you, Operator.
Dean Ridlon: Hello, everyone. I'm Dean Ridlon, Cognyte's Head of Investor Relations. Thank you for joining us.
redline: Thank you operator, Hello, everyone I'm, Dean Ridlon cognates head of Investor Relations.
redline: Thank you for joining us today.
Dean Ridlon: I'm here with Elad Sharon, Cognyte CEO, and David Abadi, Cognyte CEO. Before getting started, I would like to mention that accompanying our call today is a presentation If you'd like to view these slides in real time during the call, please visit the investor section of our website at cognyte.com. Click on Upcoming Events. then the webcast link for today's I would also like to draw your attention to the fact that certain matters discussed on this call may contain forward-looking... within the meaning of the Private Securities Litigation Reform Act. and other provisions of the Federal Securities Law.
Speaker Change: I'm here with a large shrunk cognate CEO and David a body cognate CFO.
Before getting started I would like to mention that accompanying our call today is a presentation.
Speaker Change: If you'd like to view these slides in real time during the call.
Speaker Change: Visit the investors section of our website at Cognex Dot com click.
Speaker Change: Click on upcoming events than.
Speaker Change: And then the webcast link for today's conference call.
Speaker Change: I would also like to draw your attention to the fact that certain matters discussed on this call may contain forward looking statements within the meaning of the private Securities Litigation Reform Act of 1995 and.
Speaker Change: And other provisions of the federal Securities laws.
Dean Ridlon: These forward-looking statements are based on management's current expectations. Actual results could differ materially from those expressed are implied by these forward lines. The forward-looking statements are made as of the date of this call and accept as required by law. Cognyte assumes no obligation to update or revise.
Speaker Change: These forward looking statements are based on management's current expectations and are not guarantees of future performance.
Actual results could differ materially from those expressed in or implied by these forward looking statements.
Speaker Change: The forward looking statements are made as of the date of this call and except as required by law.
Speaker Change: Cognate assumes no obligation to update or revise them.
Dean Ridlon: Investors are cautioned not to place undue reliance for a more detailed discussion of how these and other risks and uncertainties could cause Cognyte's actual results to differ materially. indicated in these forward-looking statements.
Speaker Change: Investors are cautioned not to place undue reliance on these forward looking statements.
Speaker Change: For a more detailed discussion of how these and other risks and uncertainties could cause cognates actual results to differ materially from those indicated in these forward looking statements.
Dean Ridlon: Please see our annual report on Form 20-F for the fiscal year ended January 31st, 2025, which we filed today, and other filings we make with the SEC. financial measures discussed today. include non-GAP measures. We believe investors focus on non-GAAP financial... Comparing Results Between Periods, and among our peer companies that publish similar non-GAP metrics. Please see today's presentation slides. earnings release, and the investor section of our website at Cognyte.com for a reconciliation of non-GAAP financial measures to GAAP. Non-GAAP financial information should not be considered in isolation from as a substitute for, or superior to GAP Financial.
Speaker Change: Please see our annual report on form 20-F for the fiscal year ended January 31, 2025, which we filed today and other filings we make with the SEC.
Speaker Change: The financial measures discussed today.
Speaker Change: Include non-GAAP measures.
We believe investors focus on non-GAAP financial measures and comparing results between periods and.
Speaker Change: Our peer companies that publish similar non-GAAP measures.
Speaker Change: Please see todays presentation slides, our earnings release and the investors section of our website at Cognex Dot com for a reconciliation of non-GAAP financial measures to GAAP measures.
Speaker Change: non-GAAP financial information should not be considered in isolation from as.
Speaker Change: As a substitute for.
Speaker Change: Or superior to GAAP financial information, but is included because management believes it provides meaningful information about the financial performance of our business and it's useful to investors for informational and comparative purposes.
Dean Ridlon: Included because management believes it provides meaningful information about the financial performance of our business and is useful to investors for informational and comparative The non-GAAP financial measures that the company uses have limitations and may differ from those used by other companies.
Speaker Change: The non-GAAP financial measures that the company uses have limitations and may differ from those used by other companies.
Elad Sharon: Now I would like to turn the call over to Elad. Thank you, Dean. Welcome, everyone, to our fourth quarter conference call. Cloud Fiscal 25 strong, delivering double-digit revenue growth and a significant year-over-year increase in profitability. UFO came in ahead of our expectations. Group Revenue was 13% over a year to $94.5 million. Nangab Gross Profit increased by 17% year-over-year. generated more than $9 million of positive adjusted EBITDA for the quarter, representing 114% of their growth. And cash flow from operations was approximately 19 million dollars. Looking at our fully results, revenue grew by approximately 12% over a year to $351 million.
Speaker Change: Now I would like to turn the call over to allot.
Allot: Thank you, Dan and welcome everyone to a fourth quarter conference call.
Allot: We closed fiscal 'twenty, five strong delivering double digit revenue growth and a significant year over year increase in profitability.
Allot: Q4 came in ahead of our expectations, we grew revenue by 13% year over year to $94 $5 million.
Allot: non-GAAP gross profit increased by 17% year over year.
Allot: We generated more than $9 million of positive adjusted EBITDA for the quarter, representing 114% Youre very cool.
Allot: Cash flow from operations was approximately $19 million.
Allot: Looking at our full year results revenue grew by approximately 12% year over year to $351 million.
Elad Sharon: Our profitability grows significantly faster than revenue. Non-GAAP gross profit increased by approximately 15% over a year. We generated adjusted EBITDA of $29 million, more than 3 times what we delivered last fiscal year. and you had very strong cash flow for operations of $47 million.
Allot: Our profitability grew significantly faster than revenue.
Allot: non-GAAP gross profit increased by approximately 15% year over year.
Allot: We generated adjusted EBITDA of $29 million more than three times, what we delivered last fiscal year.
Allot: And you had very strong cash flow from operations of $47 million.
Elad Sharon: These results highlight the significant value we deliver to our customers, our sound execution, and the strength of our business. With our expectations of continuing global demand and the market evolving as expected, we believe our strategy of deepening customer relationships while expanding our footprint will drive continued growth. In Q4, we secured a series of significant deals across a diverse customer base. This included a deal worth over $10 million for technology upgrade and a multi-year support agreement with a long-standing law enforcement agency customer in Iberia. In addition, we signed five deals worth $5 million or more with customers in a variety of geographic.
Allot: These results highlight the significant value, we deliver to our customers our sound execution and the strength of.
Allot: Our business model.
Allot: With our expectations of continued global demand and the market evolving as expected, we believe our strategy of deepening customer relationships, while expanding our footprint will drive continued growth.
Allot: In Q4, we secured a series of significant deals across a diverse customer base.
Allot: This included the deal was over $10 million for technology upgrade and a multi year support agreement with the long studying law enforcement agency customer in E Mail.
Allot: In addition, we signed five deals over $5 million of mall with customers in a variety of geographies.
Elad Sharon: These deals include new solutions, expansions, and renewal of the support agreement. Our customer base continues to grow. Over the full year, we added over 60 new customers across multiple regions, about twice as many as we signed last fiscal year. This momentum reinforced a significant market opportunity ahead. In the U.S., we continue to strengthen our position, expanding our footprint in this key market. This quarter, we signed several new customers and secured follow-on deals with existing These wins underscore the meaningful value our solutions deliver to our customers. We continue to actively pursue opportunities in the U.S. federal law enforcement market.
Allot: These deals include new solutions expansions and you all have a support agreement.
Allot: Our customer base continues to grow over.
Allot: Over the full year, we added over 60, new customers across multiple regions about twice as many as we signed last fiscal year.
Allot: This momentum reinforces the significant market opportunity ahead.
Allot: In the U S. We continue to strengthen our position expanded our footprint in this key market.
Allot: This quarter, we signed several new customers and secured follow on deals with existing ones.
Allot: These wins underscore the meaningful value our solutions deliver to our customers.
Allot: We continue to actively pursue opportunities in the U S Federal law enforcement markets.
Elad Sharon: While the sales cycle with these customers is longer than what we have experienced with state and local law enforcement agencies, we are pleased with the level of engagement we have with potential customers in this market.
Allot: While the sales cycle with these customers is longer than what we have experienced with state and local law enforcement agencies. We are pleased with the level of engagements we have with potential customers in this market segment.
Elad Sharon: Looking ahead to Fiscal 26, we are focused on driving growth through new advanced capabilities, deepening customer relationships, and expanding our market. We believe these initiatives continue to position us to drive sustained, profitable growth. For Fiscal 26, we expect revenue to be approximately $392 million, plus or minus 2%, representing about 12% year-over-year growth at the midpoint of the revenue year. We continue to expect GoSofi to grow faster than we have anticipated. We also expect adjusted EBITDA for the year to be about $43 million at the midpoint of the revenue range, approximately 45% year-over-year growth, a result of the leverage we have in our model.
Allot: Looking ahead to fiscal 'twenty six we are focused on driving growth through new advanced capabilities deepening customer relationships and expanding our market reach.
Allot: We believe these initiatives continue to position us to drive sustained profitable growth.
Allot: For fiscal 'twenty, six we expect revenue to be approximately $392 million, plus or minus 2% representing about 12% year over year growth at the midpoint of the range.
Allot: We continue to expect gross profit to grow faster than revenue.
Allot: We also expect adjusted EBITDA for there to be about $43 million at the midpoint of the revenue range approximately 45% year over year growth, a result of the leverage of having them with them.
Elad Sharon: We remain committed to long-term growth, increased profitability, and operational excellence while strengthening our market leadership.
Allot: We remain committed to long term growth increased profitability and operational excellence, while strengthening our market leadership.
Elad Sharon: We believe you are well positioned to seize opportunities and drive lasting value for both our customers and shareholders.
Allot: We believe we are well positioned to seize opportunities and drive lasting value for both our customers and shareholders.
Elad Sharon: Next, I want to take this opportunity to thank Richard Nutenberg for his contributions and guidance during his tenure on the Cognyte board. played a key role in establishing Cognyte as an independent company with market-leaning technology and a solid foundation for sustainable growth.
Guy: Next I want to take this opportunity to thank Richard Northern bed for his contributions and Guy that's doing is to know on the Coke Diebold.
Guy: Play the Q1 and established nickel ignite as an independent company with market, leading technology and a solid foundation for sustainable growth.
Elad Sharon: And I would like to welcome Matthew O'Neill and Noreen Benjamini as the two newest members of our board. The appointments reflect our commitment to strengthen the Board of Directors with relevant industry and business activities. Matthew brings extensive domain expertise in security, with a strong understanding of U.S. federal agency operations and products. served until December 23 as the Deputy Special Agent in Charge of Cyber Operations at the United States Secret Service. He directed the agency's global cyber-investigative strategies and oversaw efforts to dismantle transnational criminal investigations.
Matthew O'Neill: And I would like to welcome Matthew O'neill, and Nobody's been Germany as the two newest members of our board.
Matthew O'Neill: The appointments reflect our commitment to strengthen the board of directors, which relevant industry and business experience.
Matthew O'Neill: Matthew brings extensive domain expertise and security with a strong understanding of U S Federal agency operations and protocols.
Speaker Change: Seven until December 'twenty, three as the Deputy special agent in charge of cyber operations and United States Secret service.
Speaker Change: Either regulatory agencies global submarine investigative strategies.
Speaker Change: So airports the smarter transnational created man out of networks.
Elad Sharon: These insights will be instrumental as we continue to expand our market presence in the Dean Ridd brings extensive experience in the software sector, having led finance, operations, legal and strategic initiatives across multiple roles and roles. Your expertise will be invaluable as we continue to scale and execute our GOAT project.
Speaker Change: These insights will be instrumental as we continue to expand our market presence in the U S.
Speaker Change: No rich brings extensive experience in the software sector, having good finance operations legal and strategic initiatives across multiple roles in domains.
Speaker Change: Our expertise will be invaluable as we continue to scale and execute our growth strategy.
Elad Sharon: We are excited to welcome both Matthew and Rui to the board as we remain focused on driving consistent long-term growth at Cognitech.
Speaker Change: We are excited to welcome both module and the way to the board as we remain focused on driving consistent long term growth at Guggenheim.
Elad Sharon: Lastly, I invite you to our Virtual Analyst and Investor Day on Tuesday, April 8, at 8am Eastern Time. We will provide a deeper look into the challenges our customers face and how our solutions and technology help them succeed. The event will feature insights into market dynamics and Cognyte's position. We will also share our long-term financial targets, outlining how we plan to scale revenue and further drive profitability. We know that many of you are looking for deeper insights, and the event is designed to provide exactly that. We are confident in Cognite's future, and we believe we are well positioned for near-term and long-term success.
Speaker Change: Lastly, I invite you to our virtual analyst and Investor day on Tuesday F relate at eight a M eastern time.
Speaker Change: We will provide a deeper look into the challenges customers face and how our solutions and technology help them succeed.
Speaker Change: The event will feature insight into market dynamics and cognex positioning.
Speaker Change: We will also share our long term financial targets outlining how we plan to scale revenue and further drive profitability.
Speaker Change: We know that many of you are looking for deeper insights and the vantage is not to provide exactly that we are confident that future and we believe we are well positioned for near term and long term success.
Elad Sharon: This event will showcase the significant opportunities in our markets, and I hope it leaves you as excited about our potential as I am. I hope to see you all there.
Speaker Change: This event will showcase the significant opportunities in our markets and I hope. It leaves you is excited about our potential as I am.
Speaker Change: I hope to see all there now.
David Abadi: Now, let me turn the call over to David to provide more details about our Q4 results and Fiscal 26 outlook. David? Thank you, Elad, and hello, everyone. We delivered strong fourth quarter and fiscal 25 financial results driven by market demand and solid economy. with our highly differentiated solution. Healthy Demand and a large and loyal customer base, we entered Fiscal 26 with good momentum. Revenue for the full year was $350.6 million. Our total software revenue was $306.7 million, representing about 87% of total revenue, aligned with our target. The current revenue for the full year was $186.6 million, representing 53% of the total Our geographic revenue mix for the year was 55% from EMEA, 31% from APAC, and 14% from the Americas.
Speaker Change: Now, let me turn the call over to David to provide more details about our Q4 results and fiscal 'twenty six outlook.
Speaker Change: David.
Speaker Change: Thank you allowed and Hello, everyone, we delivered strong fourth quarter and fiscal 'twenty five financial results driven by market demand and solid execution.
Speaker Change: With our IDT finish it solutions healthy demand in the large and loyal customer base, we entered fiscal 'twenty six with good momentum.
Speaker Change: Revenue for the full year with stranded and $56 million, an increase of approximately 12% year over year.
Speaker Change: Yeah.
Our total software revenue was $306 $7 million, representing about 87% of total revenue in line with our target mix.
Speaker Change: Recurring revenue for the full year was $186 $6 million, representing 53% of total revenue.
Speaker Change: Our geographic revenue mix for the year was 55% from EMEA and 31% from APAC and 14% from the Americas.
David Abadi: makes in any given period is primarily impacted by the size of the deals and timing of revenue Our revenue from the Americas region declined modestly last year, our revenue from the U.S. increased many times. Non-Gap Growth Margin for the Year was 71%. expending by 180 basis points year Fully Gross Profit, Outpaced Revenue reaching $249 million, an increase of about 15% We believe this improvement reflects the significant value customers place on our innovative technology. Competitive differentiation, and our optimized... Revenue growth and our business model drove significant year-over-year improvements in profitability, underscoring our ability to drive operational level.
Speaker Change: Mix in any given period is primarily impacted by the size of the deals and timing of revenue recognition.
Speaker Change: Revenue from the Americas region declined modestly last year, our revenue from the U S in creative meaningfully.
non-GAAP gross margin for the year was 71% expanding by 180 basis points year over year.
Speaker Change: Full year gross profit outpaced revenue growth, reaching $249 million, an increase of about 15% year over year.
Speaker Change: We believe this improvement reflects the significant value customers place on our innovative technology, our competitive differentiation and our optimized cost structure.
Speaker Change: Revenue growth and our business model drove significant year over year improvement in profitability.
Speaker Change: <unk>, our ability to drive operational leverage.
David Abadi: non-corporating income and adjusted EBITDA grew much faster than before. Fisca 2025, which generated $15.7 million. Non-GAP Operator almost five times higher than last year's loss of $4.2 million. $29.1 million in adjusted EBITDA, more than three times higher than last year's gain of $9 million. resulting in NANGA PPS of 6.0. End of the year with a strong bye. short- and long-term contract liabilities, commonly referred to as deferred revenue.
Speaker Change: non-GAAP operating income and adjusted EBITDA grew much faster than revenue.
Speaker Change: Fiscal 2025, we generated $15 $7 million.
Speaker Change: non-GAAP operating income.
Speaker Change: Most five times higher than last year's loss of $4 $2 million.
Speaker Change: And $29 $1 million in adjusted EBITDA more than three times higher than last year, a gain of $9 million, resulting in non-GAAP EPS of <unk>.
Speaker Change: We ended the year with a stronger balance sheet.
Speaker Change: Our short and long term contract liabilities.
Speaker Change: Commonly referred to as deferred revenue remained robust at $133 million at the end of Q4 versus $123 1 million a day.
David Abadi: Thank you. versus $123.1 million at the end of last year. Our cash position remains strong at $113.3 million, an increase of over $30 million since the end of last fiscal year. This cash growth was primarily fueled by strong annual cash flow from operations of about $47 million. Again, our stock repurchase. buying about 586,000 ordinary shares for an aggregate purchase price of approximately $5.3 million. As a reminder, last November... and the Board of Directors. dollars in ordinary shares over 18 years.
Speaker Change: End of last fiscal year.
Speaker Change: Our cash position remains strong at $113 3 million, an increase of over $30 million since the end of last fiscal year no debt.
<unk> growth was primarily fueled by strong annual cash flow from operations of about $47 million.
Speaker Change: During Q4, we began our stock repurchase program.
Speaker Change: Buying about 586000 ordinary shares for an aggregate purchase price of approximately $5 $3 million.
Speaker Change: As a reminder, last November our board of directors.
Speaker Change: <unk> share repurchase program of up to $20 million in ordinary shares over 18 months.
David Abadi: Now let me share with you more color. The value for revenue grew by 12.9% year over year to $94.5 million The total revenue was $37.4 million, an increase of $6 million year-over-year. Software Services, where I've 45.9 million. and Tata Software. Includes software and software services. Karen Gervanew, Remans reaching 47.3 million dollars. for primarily from support contracts and some subscription offers. Enhance visibility and support long-term. Professional Services Revenue was $11.2 million. The increase of 1.2 million dollars over last year. Nangab growth margin for the quarter was 71.5%. Total Software NAND Gap Growth Margin Improved versus 77.4%.
Speaker Change: Now, let me share with you more color on Q4 results.
Speaker Change: Q4 revenue grew by 12, 9% year over year to $94 $5 million.
Speaker Change: Software revenue was $37 $4 million, an increase of $6 million year over year.
Speaker Change: Software services revenue was $45 $9 million, an increase of $3.6 million over last year.
Speaker Change: Total software revenue, which include software and software services was $83 3 million, an increase of $9 $6 million compared to last year, representing about 88% of total revenue.
Speaker Change: Okay, Great and you remains a strength, reaching $47 $3 million or 50% of total revenue in Q4 compared to $42 $9 million in the same period last year.
Speaker Change: Recurring revenue primarily from support contract and some subscription offerings.
Speaker Change: Enhanced visibility and support long term growth.
Speaker Change: Professional services revenue was $11 2 million, an increase of one $2 million over last year.
Speaker Change: non-GAAP gross margin for the quarter was 71, 5%, our total software and non-GAAP gross margin improved to 78, 9% versus 77, 4% last year to.
David Abadi: year-over-year non-GAF gross margin was 16.3% versus 6.8% last year. These improvements reflect the competitive differentiation of our... ongoing deployment. forcing our strong. We generated 6 million dollars in NANDGAP operations. 9.3 million dollars of adjusted EBITDA. resulting in NADGAP EPS of 3,000. Thank you for regenerating 14.4 million dollars in free cash flow. Trends of our Financial Model and Operationalism. Delivered Better Than Expected Collection and Working Capital driving higher cash conversions than we're expecting.
Speaker Change: The year over year improvement of one of the 50 basis points.
Speaker Change: Our professional services non-GAAP gross margin was 16, 3% versus six 8% last year.
Speaker Change: These improvements reflect the competitive differentiation of our solutions.
Speaker Change: Ongoing deployment efficiency and better cost structure.
Speaker Change: Increase in non-GAAP operating income and adjusted EBITDA outpaced revenue growth.
Speaker Change: Enforcing our strong financial model.
Speaker Change: In Q4, we generated $6 million in non-GAAP operating income increase of more than 500% versus last year.
Speaker Change: $903 million of adjusted EBITDA, an increase of 140%.
Speaker Change: Versus last year, resulting in non-GAAP EPS of <unk> <unk>.
Speaker Change: During Q4, we generated $18 $7 million in cash flow from operations.
Speaker Change: And $14 $4 million in free cash flow demonstrating.
Speaker Change: Demonstrating the strength of our financial mode, there and operational efficiency.
Speaker Change: We delivered better than expected collection and working capital efficiencies in the fourth quarter.
Speaker Change: Driving higher cash conversion and we are expecting in future periods.
David Abadi: Let me walk you through our performance against some of our key performance RPO, or Remaining Performance to present Contracted Revenue to be recognized IPO fluctuations are not necessarily indicative of future revenue growth. Total RPO is sum of deferred revenue of $130.3 million. and Q4. Totala. 545.8 million dollars. down by about $45 million versus last year. Total up... years support contract is expected to continue to fluctuate due to renewal At the end of fiscal 25, our total RPO has been boosted by a significant support contract renewal with an annual value of over $20 million for three years.
Speaker Change: Let me walk you through our performance against some of our key performance indicators.
Speaker Change: I appeal or remaining performance obligations represent contracted revenue to be recognized in future periods.
Speaker Change: Influenced by factors such as sales cycles deployment timelines.
Speaker Change: Clint renewal timing and seasonality.
Speaker Change: I feel fluctuation and not necessarily indicate the future revenue growth rate.
Speaker Change: Total appeal is sum of deferred revenue of one of the $33 million and backlog of $415 $5 million.
Speaker Change: At the end of Q4 total appeal was $545 $8 million down by about $45 million versus last year.
Speaker Change: Total appeal, which also include multi years could support contract is expected to continue to fluctuate due to renewal timing.
Speaker Change: Since the end of fiscal 'twenty five hour total apio has been boosted by significant support contract renewal, we didnt I know the value of over $20 million for three years.
David Abadi: This long-term agreement underscores the long-standing customer confidence. Expertise. delivery of customer. As an example of how div size, contract length, and renewal timing can impact Short Demo and Q4 increased to 335,000. provide solid visibility into revenue over the next 12 months. East Healthy RPO Leverage validate the strength and resilience of our for Billings worth $95 million. and Aligned with our experience. The increase of 9.8 million dollars, or 17% year-over-year. for non-GAAP operating expenses were $61.6 million. The combination of revenue growth, improved margins, ongoing cost management drove a notable increase in... We generated 9.3 million dollars of adjusted EBITDA and 6 million dollars in NADGAP operations.
Speaker Change: This long term agreement underscores the longstanding customer confidence and Koch Knight technology foresight domain expertise and continued delivery of customer value.
Speaker Change: It is an example of how do you size contract clients and renewal timing can impact our apio.
Speaker Change: Short term appeal at the end of Q4 increased to $335.
Speaker Change: $3 million.
Speaker Change: Do you believe provide solid visibility into revenue over the next 12 months.
Speaker Change: These healthy our P O levels reinforce our growth expectation and validate the strength and resilience of our business model.
Speaker Change: Q4, billings were $95 million consistent with last year and the law.
Speaker Change: Aligned with our expectations.
Speaker Change: Our non-GAAP gross profit for the quarter was 67 $6 million.
Speaker Change: An increase of $9 $8 million or 17% year over year.
Speaker Change: Q4, non-GAAP operating expenses were $61 $6 million and aligned with our expectations.
Speaker Change: The combination of revenue growth improved margins and ongoing cost management drove a notable increase in profitability.
Speaker Change: Q4, we generated $93 million of adjusted EBITDA and $6 million in non-GAAP operating income.
David Abadi: We remained focused on driving further financial Turning to Guide. Fiscal 26, we expect full year revenue. Our team represents approximately 12% of year-over-year growth at the midpoint of revenue. We expect total software revenue to be about 340 million dollars. 87% of total revenue. Professional Services Revenue to represent about 13% of total revenue, aligned with our strategic objectives. We believe that our strong short-term RPO of $335 million favorable demand environment support this. We expect Q1 revenue to be similar. for more information.
Speaker Change: We remained focused on driving further financial improvement and continuing to expand our margins.
Speaker Change: Turning to guidance for.
Speaker Change: For fiscal 'twenty, six we expect full year revenue of approximately $392 million plus or minus 2%.
Speaker Change: This represents approximately 12% year over year growth at the midpoint of the revenue range.
Speaker Change: We expect total software revenue to be about $340 million, representing approximately 87% of total revenue.
Speaker Change: Professional services revenue to represent about 13% of total revenue in line with our strategic goals.
Speaker Change: We believe that our strong short term appeal of $335 million in.
Speaker Change: And favorable demand environment support this outlook.
Speaker Change: We expect Q1 revenue to be similar to the Q4 levels. We are reporting today with sequential growth each quarter throughout the year.
David Abadi: Thank you. with sequential growth each quarter throughout the year aligned with the seasonality We expect NANDGAP growth margin to increase year-over-year to approximately 71.5%, reflecting Gross margin may fluctuate between quarters based on our revenue. As a result of their improved gross margin, we expect gross In the full year, we expect our non-gap operating expenses to grow meaningfully slower than the revenue. reaching approximately. Operating expenses and annuality should remain in line with period years. Slight fluctuations throughout We expect NANDGAP operating income to be about $30 million. We expect Adjusted EBITDA to be about $43 million dollars, represented by...
Speaker Change: And with the seasonality of previous years.
Speaker Change: We expect non-GAAP gross margin to increase year over year to approximately 71, 5%, reflecting an improvement of 50 basis points.
Speaker Change: Gross margin may fluctuate between quarters based on our revenue mix.
Speaker Change: As a result of the improved gross margin, we expect gross profit to increase at a faster rate than revenue growth.
Speaker Change: For the full year, we expect our non-GAAP operating expenses to grow meaningfully slower than the revenue.
Speaker Change: <unk> approximately $250 million, an increase of about 7%.
Speaker Change: Operating expenses seasonality should remain in line with prior years.
Speaker Change: Slight fluctuations throughout the year.
Speaker Change: We expect non-GAAP operating income to be about $30 million.
Speaker Change: Nearly doubling year over year.
Speaker Change: We expect adjusted EBITDA to be about $43 million, representing 45% year over year growth.
David Abadi: 45% year-over-year growth. We expect our non-GAAP taxes to be about 40% or $13 million. non-controlling minority interest of about $5 million.
Speaker Change: We expect our non-GAAP taxes to be about 40% or $13 million.
Speaker Change: Non controlling minority interest was about $5 million.
David Abadi: As a result, we expect annual NANGA PPS to come Turning to cash flow as a main. Fiscal 25, our cash flow from operations, benefited from very strong collections and working capital. Although we don't expect to maintain the same pace of cash conversion this year, we expect to generate $45 million of cash flow from operations in fiscal year 2022. For the full year, we expect a total capex of approximately $13 million.
Speaker Change: As a result, we expect annual non-GAAP EPS to come in at 60% at the midpoint of the revenue range best on weighted average of approximately 76 million fully diluted shares in FY 'twenty six.
Speaker Change: Turning to cash flow as I mentioned.
Speaker Change: In fiscal 'twenty five our cash flow from operations benefited from very strong collections and working capital efficiencies.
Speaker Change: Although we don't expect to maintain the same pace of cash conversion this year.
Speaker Change: Expect to generate $45 million of cash flow from operation in fiscal 'twenty six.
Speaker Change: For the full year, we expect total capex of approximately $13 million.
David Abadi: Summarized, we delivered a consistent execution, driving strong results for fiscal 2020. The value of our cutting-edge investigative analysis. ongoing commitment to innovation and expansion of our advanced including Leveraging AI. continues to enhance the value we provide. We entered FISTA 2026 with positive momentum, reflecting the health of our business.
Speaker Change: To summarize we delivered a consistent execution driving strong is that for fiscal 2025.
Speaker Change: We secured a major deal from both existing and new customers, which we believe reflects the growing demand for and the value of our cutting edge. Mr gave analytic solutions.
Speaker Change: Our ongoing commitment to innovation and expansion of our advanced solutions, including leveraging AI continues to enhance the value we provide for customers.
Speaker Change: We entered fiscal 2026 with positive momentum, reflecting the health of our business.
David Abadi: The Clear Revenue Visibility and a Robust Balance Sheet, including a Solid Cash With this strong foundation, we believe we are well positioned to capitalize on the opportunities in front of us and deliver profitable growth this year and beyond.
Speaker Change: Our clear revenue visibility and a robust balance sheet, including a solid cash position ensures financial flexibility.
Speaker Change: With Destock Foundation, we believe we are well positioned to capitalize on the opportunities in front of us and deliver profitable growth this year and beyond.
Speaker Change: Lastly, I would like once again to invite everyone to attend our virtual analyst and Investor day on Tuesday appeal eight eight.
David Abadi: We would like once again to invite everyone to attend our Virtual Analysts and Investors Tuesday, April 8 8 a.m. This event will provide deeper insight into our long-term growth. expected future drivers.
Speaker Change: Eight a M eastern time.
Speaker Change: This event will provide deeper insight into our long term growth strategy and expected future drivers of profitability.
Operator: With that, I would like to end the call over to the operator to open the lines for questions. Thank you. As a reminder, to ask a question, please press star one one on your telephone and wait for your name to be announced. To withdraw your question, please press star 11 again.
With that I would like to end the call over to the operator to open the lines for questions operator.
Speaker Change: Thank you as a reminder to ask a question. Please press star one on your telephone and wait for your name to be announced to withdraw. Your question. Please press star one one again and our first question comes from Mike Seacoast with Needham Your line.
Mike Cikos: And our first question comes from Mike Cikos with Needham. Your line is open. Thanks for taking the questions here, guys. Congrats on the quarter. I wanted to cycle back to the demand trends. I know that you broke out the EMEA versus APJ Americas and U.S. business, but Can you help us think about what you guys are seeing in the U.S. market specifically, just given the current policy uncertainty? that's currently.
Speaker Change: So then.
Mike Seacoast: Great. Thanks for taking my question to you guys and congrats on the quarter.
Speaker Change: Wanted to cycle back to the demand trends I know that you broke out the EMEA versus a P. J Americas and U S business, but can you help us think about what you guys are seeing in the U S market, specifically just given the current policy uncertainty that's.
Mike Seacoast: That's currently in the headlines.
Speaker Change: Yeah.
Elad Sharon: Yeah, thank you, Mike. So we continue to believe that the U.S. presents a good opportunity for us. We increased investments over the years to improve the market reach. We started with state and local law enforcement agencies. We're able to acquire new customers and also get some few follow-on orders already. And we continue the efforts also to penetrate to the federal agencies. We do have a very good engagement with some federal agencies already. Including a proof of concept and demonstration with some of them. Results are very good and we get very positive feedback. So in terms of the product market fit and the superiority of our technology and the very strong results of the demonstration, I think we are in a very good position to continue and expand our presence in the U.S.
Speaker Change: Yeah. Thank you Mike. So we continue to believe that the U S presents a good opportunity for us.
Speaker Change: We increased investments over the years to improve our market reach.
Speaker Change: We started with the state and local law enforcement agencies were able to acquire new customers and also get some follow on orders already.
Speaker Change: And we continue therefore, it's also to penetrate with the federal agencies.
Speaker Change: We do have a very good engagements with some federal agencies already.
Speaker Change: Including proof of concept demonstration I mean some of them.
Speaker Change: The result is very good and we got some very positive feedback so in terms of the product market fit and the superiority of our technology and the very strong results of the demonstration I think.
Speaker Change: Very good position to continue and expand our presence in the U S.
Elad Sharon: In terms of the results, we did see an increase in the U.S. or growth in the U.S. last year. We expect this growth to continue and be faster than the rest of the territories, and we continue to see this opportunity as a growth initiative for us also for the next few years. Given the current situation, we don't really think, given that we just started in a penetration mode, I don't think the unrest in the U.S. will impact our efforts. I do believe that what we feel is very healthy market dynamics, a strong need, and our position in the U.S.
Speaker Change: In terms of the results we did see an increase in the U S. So both in the U S last year.
Speaker Change: We expect this growth to continue and be faster than.
Speaker Change: The rest of the territories and we continue to see this opportunity as the growth initiatives for US also for the next few years.
Speaker Change: Given the current situation. We don't we don't really think you know given that we just start there Brendan penetration mode I don't think.
Speaker Change: And even though the unrest in the U S will impact our efforts.
Speaker Change: I do believe that the what we feel is a very healthy market dynamics are strong and our position in the U S. It will take us to where we want to be.
Elad Sharon: will take us to where we want to be. We continue to invest for this year to continue and expand our presence in the U.S. in state and local as well as federal. Got it. Thanks for that. Maybe if I could just try another one on that, but... But based on what you're seeing or hearing from your sales team, are sales cycles extending or is there a potential that It's almost late. Is there a potential impact to that sales cycle? because of attrition with the folks that you guys are working with. Yes, so first of all, to begin with, the sell cycle in the U.S.
Speaker Change: For this year to continue.
Speaker Change: Expand our presence in the U S in state and local as well as Federer.
Speaker Change: Got it thanks for that maybe if I could just try and another one on that but.
Speaker Change: Based on what Youre seeing or hearing from your sales team.
Speaker Change: Our sales cycles, extending or is there potential that.
Speaker Change: It's almost like it.
Speaker Change: Is there a potential impact.
Speaker Change: Cycle basically.
Speaker Change: Yeah.
Speaker Change: On attrition with the folks that you guys are working with.
Speaker Change: Yeah. So first of all to begin with the sale cycle in New York is longer than what we see in the territories because we haven't been that there's been long. So it took us for some time you know to get the brand.
Elad Sharon: is longer than what we see in other territories because we are in a penetration mode. So it took us some time, you know, to get the brand awareness, to access the market, to have the customers take our solutions and try it. So to begin with, the sell cycles in the U.S. are longer. I cannot predict what will be the situation in the U.S. given what's going on there right now, but because we just started and the market is very large compared to what we generate from the U.S., I don't think it will have a negative impact on us, but it's hard to predict, you know.
Speaker Change: Brendan warn us too.
Speaker Change: To access the market and to have the customer is a takeover of solutions and the right. So to begin with the long sales cycles in the U S. A.
Speaker Change: Longer and I cannot predict what will be you know the situation in the U S. Given what's going on there right now, but because we just start there then the market is a very large compared to what.
Speaker Change: We generate from the U S. I don't think it will be.
Speaker Change: And then going to have impact on us.
Speaker Change: But it's hard to predict.
Elad Sharon: Regardless, we continue the efforts full gear. We do not blink. We will continue to invest. We will continue to hire more people over time. We will continue to increase our demonstration and POC capacity over time. We are also presenting and participating in relevant conferences in the U.S. that are relevant for our industry. So I do believe that the U.S. will be a growth engine for us for the long term, but also expect it to grow in fiscal 26.
Speaker Change: Regardless, we continue the efforts.
Full gear, where we do not we don't not Blink we will continue to invest we will continue to hire more salespeople over time, and we will continue to increase our demonstration at POC capacity over time.
Speaker Change: So.
Speaker Change: Vantiv again participating relevant conferences in the U S. A.
Speaker Change: The relevance of our industry. So I do believe that the U S.
Speaker Change: There will be a growth engine for us for the long term, but also expect it to grow in fiscal 'twenty six.
David Abadi: David Abadi, Elad Sharon, Dean Ridlon, Cognyte Software Billing for Q4 was $95 million, and if you may recall, the billing in Q3 was $103 million or $105 million, if I recall correctly, much higher than revenue. If you look in the line of basis, you can see that the overall billing was strong. We continue to bill our customers as planned. As part of our overall quality of the revenue, and you can see it in the way that we actually deliver our results, the pace of billing is, I would say, in a good place. Also, $95 million on the $94.5 million, it's a good billing indicator, so we are actually pleased with the billing figures.
Speaker Change: Got it and maybe just for David just a quick question.
Speaker Change: Billings in the quarter can.
Speaker Change: Can you help us think about I guess, what drove that that decline on a year over year basis in the buildings and then secondly, as we think about next year why is the cash flow from operations is expected to decline as well.
Speaker Change: The billing for Q4 was $95 million and if you may recall the billing in Q3 was a one O 301, five if I recall correctly much higher than our revenue. If you look in an annual basis, you can see that those all billing was strong.
Speaker Change: We continue to build our customer as planned.
Speaker Change: As part of the summer.
Speaker Change: The overall quality of the revenue and you can see it in the way that we actually deliver a result.
Speaker Change: Debt.
Speaker Change: The pace of billing day today, I would say in a good place and also $95 million on the 94 and a half million Deloitte and good day billing indicators. So we are actually pleased with them with their billing GAAP figures.
David Abadi: And also, if you may recall, on Q3, we were speaking about that Q3 was abnormal and was extremely higher because we were able to bill faster. As for the cash flow from operation, so actually, cash flow from operation was very strong this year. We ended the year with $47 million of cash flow from operation. It mainly was driven from efficiencies related to our working capital and cash collection that was much faster than we planned. So we end the year with a very strong balance sheet and cash from OPS. Looking into next year, we are forecasting $45 million of cash from operation, while our profit is, our operating income is $30 million.
Speaker Change: And also if you may recall in Q3, we were speaking about that Q3 was abnormal.
Speaker Change: Extremely ire, because we were able to to build faster.
Speaker Change: As for the cash flow from operation, So actually cash flow from operation was very strong. This year. We ended the year with $47 million of cash flow from operation. It's mainly was driven from efficiencies related to our working capital and cash collection that was much faster than we are.
Speaker Change: Glenn.
Speaker Change: So we ended the year with a very strong balance sheet and cash.
Speaker Change: Cash format.
Speaker Change: Amongst looking into next year.
Speaker Change: Forecasting $45 million of cash.
Speaker Change: From operation, while we our properties.
Speaker Change: Operating income is $30 million, so actually we expect that even next year, we will have some benefit from.
David Abadi: So actually we expect that even next year, we will have some benefit from working capital and collection. So overall cash generation is very strong.
Speaker Change: Working capital and collections. So overall cash generation is very strong.
David Abadi: I'll turn it over to my colleagues.
Speaker Change: Terrific I will turn it over to my colleagues. Thank you.
David Abadi: Thank you.
Peter Levine: And the next question comes from Peter Levine with Evercore. Your line is open. Thank you guys for taking my questions. You know, maybe to piggyback off of Mike's prior question, U.S. demand, you know, with the administration, obviously they're pushing immigration, you know, they're fighting against the cartel and how they're classifying them now as a terrorist organization. Can you maybe just help us understand, like, what are the U.S. demand drivers? Is it different than what you're seeing internationally?
Speaker Change: And the next question comes from Peter Levine with Evercore. Your line is open.
Peter Levine: Okay. Thank you guys for taking my question, maybe to piggyback off of Mike.
Speaker Change: Prior question U S demand.
Speaker Change: The administration, obviously, there theyre pushing immigration.
Speaker Change: They were Friday against the cartels, how they're classifying them now as a tourist organization can you maybe just help us understand like what are the U S demand drivers differ from what you're seeing internationally.
Elad Sharon: Maybe I'll start there. Yes, so there is commonality in the demand globally, which is related to, you know, I would say the criminal activities that are ongoing criminal activities, you know, organized crime, terror, kidnapping, child kidnapping, border controls, many customers around the world are facing the same thing. In certain areas, Some cases are putting more pressure on the agencies than the others. In the U.S. now, what we hear is that border control is becoming more important, but it's not only border control, because if you look at the day-to-day work of law enforcement agencies, they still have to deal with organized crime, they still have to deal with funding of criminal activities, they still have to deal with local crimes.
Speaker Change: Maybe I'll start there.
Speaker Change: Yeah. So there is commonality in the demand globally, which is related to you know I would say the criminal activities that are ongoing criminal activities organized crime, there isn't a big chunk of kidnapping.
Speaker Change: Border controls are many customers around the globe are facing the same thing.
Speaker Change: Hum.
Speaker Change: In certain areas.
Speaker Change: In some cases.
Speaker Change: Right.
Speaker Change: Brett.
Speaker Change: Putting more pressure on the agencies and then the <unk>.
Others.
Speaker Change: And do you know what we hear is that the border control is becoming more important but it's not only border control. It because if you look at the day to day work of law enforcement agencies.
Speaker Change: They still have to deal with organized crime, they still have to deal with the funding.
Speaker Change: I mean, all activities they still have to deal.
Speaker Change: Deal with local crimes and so so this is something that is an ongoing and will continue forever.
Elad Sharon: So this is something that is ongoing and will continue forever. In addition to that, we do hear that maybe requirements or demand related to border control should increase over time in the U.S. We haven't seen this converted into demand yet, but maybe this will happen. But generally speaking, the demand in the U.S. in terms of the use cases that they have to deal with is similar to the rest of the world.
Speaker Change: In addition to that we do here that are may be.
Speaker Change: No requirements or demand related to border control should increase over time in the U S. We haven't seen this thing you know converted into.
Speaker Change: And demand yet, but maybe this will happen, but generally speaking the demand in the U S. In terms of the use cases that they have today.
Speaker Change: It is yeah.
Speaker Change: Similar to the rest of the world.
Elad Sharon: And then, you know, if you think about, again, you talked about sales cycles, you know, what investments are you making, what are you changing to the go-to-market to kind of accelerate those sales cycles? I know it's a newer market for you, but are there any priorities this year that you're kind of focused in on to shorten that sales cycle? Is it partnering, building out an ecosystem of partners to kind of leverage the sales? Just help us understand, like, what are you doing to kind of double down on the U.S. market? Yes, so the efforts in the US market in terms of sales are disproportional to the rest of the world.
Speaker Change: Okay.
Speaker Change: Then if you think about.
Speaker Change: Again, you talked about sales cycle, what what investments are you, making what are you changing go to market to kind of accelerate the sales cycle I know, it's a newer market for you.
Speaker Change: But are there any priorities. This year that you were kind of focused in on because shorten that sales cycle is partnering.
Speaker Change: Building out an ecosystem of partners to kind of leverage the sales just help us understand like what are you doing to kind of double down on the U S market.
Speaker Change: Yeah. So the airports in the U S market in terms of sands are disproportionate to the rest of the world given the penetration mode.
Elad Sharon: Given that we are in a penetration mode, the amount of efforts and investments we put on sales and marketing are higher than on average. For example, we hired a local sales team that some of them are coming from those agencies. So they have the relationship and they know the needs. This is one example. Second example is that we participate more in local conferences that are actually focused for the requirements, specific requirements of the local agencies. Another area is marketing. The marketing efforts are much higher in the U.S. than in the rest of the world. We had recently a board member, Matthew O'Neill, that came from the U.S.
Speaker Change: The amount of effort and investments, we've put on sales and marketing as a higher than average.
Speaker Change: For example, we.
Speaker Change: Higher or lower.
Speaker Change: Our local sales team that though some of them are coming from those agencies.
Speaker Change: So they have the relationship and they know their needs. This is one example, the second example, I believe that we are.
Speaker Change: Participating more in local conferences.
Speaker Change: Actually it's focused for the requirements specifically one of the local agencies.
Speaker Change: Another area is our marketing and the marketing efforts is much much higher in the U S than in the rest of the world and we hired recently.
Recent.
Speaker Change: Our board member unmet medical need and that came from the U S secret service to help us.
Elad Sharon: Secret Service to help us understand the federal market even further. We do expand our partner network in the U.S. so we actually focus on both the go-to-market strategies, direct but also indirect with partners. We are looking for contract vehicles that can help us accelerate the sales cycle. So the efforts and the investments we do in the U.S. are significantly higher than in other territories and also the requirements there and the size of the market are much higher. So we take all of it into consideration in our planning and that's the reason we invest more. We are highly focused on this market and I believe it will pay for us.
Speaker Change: I understand the the federal market even further.
Speaker Change: We do.
Speaker Change: <unk> our partner network in the U S. So we actually focus on the on both the go to market strategies and direct but also in direct retail partners and we are.
Speaker Change: Looking for a contract vehicle does that kind of help us accelerate the sales cycle. So the airports and the investments we're doing in the U S.
Speaker Change: A significantly higher than in other territories.
Speaker Change: And also the requirement there.
Speaker Change: And the you know.
Speaker Change: The size of the market are much higher so we took all of it into consideration.
Speaker Change: Our planning and that's the reason we invest more we are highly focused on this market.
Speaker Change: And I believe.
Speaker Change: Yeah.
Elad Sharon: I expect the U.S. to continue and grow faster than the rest of the world.
Speaker Change: You'll pay for us I mean I.
Speaker Change: <unk> to the U S to continue and grow faster than the rest of the world.
Speaker Change: Okay, and if I could squeeze one last one David I know, we will have to wait until Tuesday, but can you maybe just give US an example, or maybe just help us understand that.
Speaker Change: In terms of model.
Speaker Change: What should we expect or are we getting a royalty model near term model.
Speaker Change: Obviously, 12% growth for next year, or so really I don't know if I wait for Tuesday, but the durability of double digit growth is that sustainable longer term post fiscal 'twenty six.
David Abadi: Peter, if I will share with you the target for the three years, probably I will lose all the audience for the investor day. So you will need to wait for next Tuesday, but in general, the fundamentals of the business are very healthy. You can see it in the last nine quarters in a row, we're able to drive much better profitability, gross margin is growing, gross profit is growing even faster than the top line growth. In last year, we were able to grow our gross profit 15% while the top line was growing 12%. So in any, I would say, parameter that you look for profitability, you can see the benefit on the model.
Speaker Change: Hey, Terry if I will share with you the target for the three years, probably will lose all the audience for you.
Speaker Change: For the Investor day, so so.
Speaker Change: You bet I need to.
Speaker Change: You you would need to wait for next Tuesday, but in general the fundamental of the business are very healthy you can see.
Speaker Change: In the last I'd say, the nine quarters in a row, we're able to drive much better profitability gross margin is growing gross profit is growing even faster than the planned growth in last year, we were able to.
Speaker Change: Our gross profit 50 percentage, while the top line was going to 12%.
Speaker Change: So in any I would said permit that you look for profitability.
Speaker Change: See that benefit on the model. So gross gross profit gross margin is one thing you can see that R&D.
David Abadi: So gross profit, gross margin is one thing. You can see the R&D to revenue ratio is declining and we believe this trend will continue with us. Obviously, we're investing in sales and market. Elad was speaking about the US market required investment. We are investing, but we are always investing in our thought about top line growth with increasing profitability, the balance of the two of them. Actually, you can see next year, we guided for 12% top line growth and EBITDA growth of 45% on the 12% growth. So I think that the model itself, the way that we are investing and the way that we're deciding align with this understanding.
Speaker Change: Revenue ratio is declining and we believe this trend will continue with US obviously, we're investing in sales and market that I was speaking about it.
Speaker Change: The U S market required investment we are investing but we are always investing.
Speaker Change: In our <unk>.
Speaker Change: So.
Speaker Change: Top line growth with increasing profitability the balance of the two of them actually you can see next year, we guided for at 12% top line growth and EBITDA growth of 43%, 45% on the on that 12% and growth. So I think that the model itself. The way that we are investing and boy did we deciding.
Speaker Change: Aligned with this understanding.
David Abadi: Obviously, there is room for improvement over time in the next week in the investor day. I need some work there, so I will give you the target for the 2028. Thank you very much.
Speaker Change: And obviously there is there room for improvement over time in that in the next day or we can the investor day, and it's a work there. So I will give you the targets for the 2028.
Speaker Change: Great. Thank you very much.
Operator: As a reminder, to ask a question, please press star 11 on your telephone.
Speaker Change: As a reminder to ask a question. Please press star one one on your telephone and then next question comes from Shaul Eyal with TD Cowen Your line is open.
Shaul Eyal: And the next question comes from Shaul Eyal with TD Cohen. Your line is open. Thank you, hi. Good morning, good afternoon. Elad, I think we're all hearing the excitement and the growing focus on the U.S. market, but maybe can you talk to us about some of the market dynamics you're seeing outside of the U.S. right now? Thank you.
Shaul Eyal: Thank you hi.
Speaker Change: Good morning, good afternoon.
Speaker Change: I think we were all hearing the excitement.
Speaker Change: The growing focus on the U S market, but maybe can you talk to us about some of the market dynamics, you're seeing outside of the U S. Right now thank you.
Elad Sharon: Hi Shaul, thank you. So the demand drivers globally remains healthy. We see the data that continues to grow in volumes and diversity. And actually, customers have to convert it into insight. So they need much stronger technology tools in order to do that. We do see that adversaries are more sophisticated. They also use advanced technology in order to evade detection. So they use cryptocurrencies that are anonymized, they don't talk to each other in usual means. So actually it's very difficult to put their hands on them. And we have to remember that it's becoming more and more global.
Speaker Change: Hi, Thank you.
Speaker Change: The demand drivers globally remains healthy.
Speaker Change: See the data that continues to grow in volumes and diversity and actually customers have to convert it into insights. So they need a much stronger technology tools in order to do that.
Speaker Change: We do see that the adversaries are more sophisticated they also use advanced technology there in order to have any churn.
So do you just keep the currency at that time, only mandato anonymised and they don't talk to each other unusual means so actually it's very difficult to put their hands on them.
Speaker Change: We have to remember that it's becoming more and more global.
Elad Sharon: The technology is evolving, AI is an example. So if you look at technology and AI, it presents to our customers opportunity and risk. A risk because also the bad guys are using it, but opportunity because they can use AI for two main advantages. One is to uncover even more hidden insights out of the same data sets customers have today, but also use gen AI in order to improve dramatically the efficiency of the investigator and the users. So the demand remains, demand drivers remain very strong. Our customers derive significant value from our technology. We get very positive feedback.
Speaker Change: And the technology is evolving.
Speaker Change: As an example, so if you look at our <unk>.
Speaker Change: It presents to our customers opportunity and a risk a risk because also the bad because they're using it but the opportunity because they can use AI for two main.
Speaker Change: The advantage is one is to uncover even more hidden insights out of the same that customers have today.
But also your journey in order to improve dramatically the efficiency of the investigator end users. So the demand there.
Speaker Change: Remains.
Speaker Change: Main drivers remained very strong.
Speaker Change: Our customers do.
Speaker Change: Significant value from our technology.
Speaker Change: It's very positive feedback and we are in this market for three decades. Some are some of the customers are with us almost three decades.
Elad Sharon: We are in this market for three decades. Some of the customers are with us almost three decades. Some of them share with us impressive success stories on being able to save lives, being able to prevent significant financial damage to the countries and nations. And I believe that the combination of the healthy demand drivers and what we see in the market, what we hear from our customers and the value our technology generates for them, this one will create the growth also going forward. And I believe we're well positioned for continued growth.
Speaker Change: There are some of them are shared with us impressive success stories on being able to save lives.
Speaker Change: Being able to prevent a significant financial damage to the countries of nations and I believe that the combination of the healthy demand drivers and what we've seen in the market what we hear from our customers.
Speaker Change: The value of technology generates for them.
Speaker Change: This one will create the growth also going forward and I believe we are well positioned for continued growth.
Growth.
Speaker Change: Okay.
Dean Ridlon: I show no further questions in the queue at this time. I would now like to turn the call back over to Dean for closing remarks. Thank you, Michelle, and thank you, everyone, for joining us on today's call. In addition, in next week's Analyst and Investor Day, Elad, David, and I will be in New York in May to meet with investors and hope to see some of you then. In the meantime, please feel free to reach out to me should you have any questions, and we look forward to speaking with you again next quarter. This concludes today's conference call.
Dean Ridlon: I show no further questions in the queue at this time I would now like to turn the call back over to Dean for closing remarks.
Dean Ridlon: Thank you Michelle and thank you everyone for joining us on today's call. In addition to next week's analyst and Investor Day, David and I will be in New York in May to meet with investors and hope to see some event.
Dean Ridlon: In the meantime, please feel free to reach out to me should you have any questions.
Dean Ridlon: We look forward to speaking with you again next quarter.
Dean Ridlon: Okay.
Dean Ridlon: This concludes today's conference call. Thank you so much for participating you may now disconnect.
Operator: Thank you so much for participating. You may now disconnect.
Dean Ridlon: Okay.
Dean Ridlon: [music].
Dean Ridlon: Okay.
Dean Ridlon: Okay.
Dean Ridlon: [music].