HERZLIYA, Israel – Cognyte Software (ETR:SOWGn) Ltd. (NASDAQ: CGNT), a provider of investigative analytics software, has announced a share repurchase program with plans to buy back up to $20 million of its ordinary shares. The program is set to extend over the next 18 months, concluding by June 12, 2026.
This strategic move reflects the company's belief in its own growth trajectory and its ability to generate substantial cash flow. The repurchase initiative is part of a broader capital allocation strategy aimed at enhancing shareholder value. The company will fund the repurchases using its available cash balance and cash generated from operations.
The timing and volume of share repurchases will be contingent on various factors, including the market price of Cognyte's shares, prevailing market conditions, and other economic factors. The company has the flexibility to execute these repurchases through open market transactions, private agreements, or other methods compliant with U.S. securities regulations.
Cognyte has highlighted that this program does not obligate it to acquire a specific number of shares and may be modified or halted at the company's discretion. The plan will commence following a 30-day creditor objection period, as required by Israeli regulations.
Shares acquired through this program will be available for use in general corporate purposes, potentially providing the company with additional flexibility in its operational and financial strategies.
The press release also included cautionary language regarding forward-looking statements, emphasizing that actual results could differ from current expectations due to various risks and uncertainties. These include, but are not limited to, Cognyte's ability to meet its financial and business objectives and to successfully implement its strategies to drive shareholder value.
Investors are encouraged to consider the risks detailed in Cognyte's filings with the SEC, including its most recent annual report on Form 20-F and subsequent reports, when evaluating the company's prospects.
This news is based on a press release statement from Cognyte Software Ltd.
In other recent news, Cognyte has reported a robust Q2 performance for the fiscal year 2025, resulting in an upward revision of its full-year revenue outlook. The company's revenue increased by 10% year-over-year to $84 million, with non-GAAP gross profit rising to $60.2 million. The company's balance sheet shows $100 million in cash and no debt. The strong performance has led to a revised full-year revenue outlook of approximately $347 million, indicating an 11% growth.
Recent developments include significant contracts with international security and law enforcement agencies and a focus on expanding customer engagement with AI-driven solutions. However, the company reported a sequential decline of 5% in software and software service revenue. Despite this, recurring revenue grew to $46.6 million in Q2, a 40% increase year-over-year.
The company's management conveyed optimism for sustainable growth and future profitability improvements, particularly due to the transition towards subscription-based revenue models. These recent developments reflect Cognyte's strategic focus on AI-driven solutions and customer engagement.
InvestingPro Insights
Cognyte Software's recent announcement of a share repurchase program aligns with several key insights from InvestingPro. According to InvestingPro data, the company's market capitalization stands at $511.17 million, providing context for the $20 million repurchase plan. This move could be seen as a strategic use of the company's cash, especially considering that one of the InvestingPro Tips highlights that Cognyte "holds more cash than debt on its balance sheet."
The repurchase program may also be a response to the company's stock performance. InvestingPro data shows a significant 1-year price total return of 71.33%, indicating strong market interest. However, another InvestingPro Tip notes that "stock price movements are quite volatile," which could explain the company's decision to implement a buyback program to potentially stabilize share prices.
It's worth noting that despite the positive cash position and stock performance, InvestingPro Tips reveal that Cognyte is "not profitable over the last twelve months" and "analysts do not anticipate the company will be profitable this year." This context adds depth to the company's decision to repurchase shares, possibly signaling management's confidence in future profitability despite current challenges.
For investors seeking a more comprehensive analysis, InvestingPro offers 5 additional tips for Cognyte Software, providing a broader perspective on the company's financial health and market position.
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