Cognyte Software Ltd.

Good day, ladies and gentlemen, thank you for standing by welcome to the cognate first quarter fiscal year 2025 earnings conference call. At this time, all participants are in a listen only mode after the speakers presentation, there will be a question and answer session to ask a question during this session you'll need to press star one one on your telephone. You will then hear an automated message advising you your hand is raised. To withdraw your question, please press star 11 again. Please note that today's conference is being recorded. I would now like to hand the conference over to your host, Dean Ridland, Head of Investor Relations. Please go ahead.

Thank you, operator. Hello, everyone. I'm Dean Ridland, Cognite's Head of Investor Relations. Thank you for joining us today. I'm here with Elad Sharom, Cognite's CEO, and David Abadi, Cognite CFO. 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 cognite.com. Click on the investors tab, click on the webcast link, and select today's conference call. 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 other provisions of the federal securities laws. 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. The forward-looking statements are made as of the date of this call and, except as required by law, Cognite assumes no obligation to update or revise them. Investors are cautioned not to place undue reliance on these forward-looking statements. For a more detailed discussion of how these and other risks, uncertainties, could cause Cognite's actual results to differ materially from those indicated in these forward-looking statements, please see our annual report on Form 20F for the fiscal year ended January 31, 2024, and other filings we make with the SEC. The financial measures discussed today include non-GAAP measures. We believe investors focus on non-GAAP financial measures in comparing results between periods and among our peer companies that publish similar non-GAAP measures. Please see today's presentation slides, our earnings release, and the investor section of our website at cognite.com for a reconciliation of non-GAAP financial measures to GAAP measures. Non-GAAP financial information should not be considered in isolation from, as a substitute for or superior to GAAP financial information, but is included because management believes it provides meaningful information about the financial performance of our business and is useful to investors for informational and comparative purposes. The non-GAAP financial measures that the company uses have limitations and may differ from those used by other companies. Now, I would like to turn the call over to Elad.

Thank you, Dean. Welcome, everyone, to our first quarter conference call. We delivered a strong start to our fiscal year as we continue to generate consistent and profitable financial results. Q1 revenue and gross profit both grew by double digits year-over-year. We delivered Q1 revenue of $83 million, up approximately 13% year-over-year. Gross profit increased 17% year-over-year, going faster than revenue, consistent with our focus on margin expansion. We also generated $5 million of positive adjusted EBITDA in the quarter, along with about $21 million of positive cash flow operations. We remain focused on delivering sustainable and profitable growth. We have a lengthy track record of delivering powerful investigative analytics solutions to hundreds of customers in more than 100 countries around the globe. Our customers view us as domain experts, and we have ongoing dialogues across our global customer base about their growing needs and how our solutions can help them. We continue to innovate and build on our technology leadership. We believe our advanced technology, including artificial intelligence, enables faster and more effective investigations across a wide variety of use cases by fusing data at scale and detecting patterns, relationships, and other hidden insights that would be nearly impossible to find otherwise. These capabilities generate unique value for our customers and are generating increased interest in our solutions. We continue to expand our presence in North America, securing competitive deals and displacing incumbent providers. Our ongoing investments in sales and marketing include growing our demonstration proof of concept capacity. Our experience shows that when customers use our solutions in real-world settings, they recognize the high value our technology delivers. Further testament to our solution's high value and customer satisfaction, is evident in the repeat business from customers who signed deals in previous quarters and have returned to place follow-on orders. In addition, some of these customers are becoming valuable references and enhancing our brand with other agencies. I'll now talk about other significant wins we had during the quarter. We won several noteworthy deals during the quarter, including three follow-on orders from existing national security and national intelligence customers. While none of these wins were related, and each obviously had its own unique characteristics, all were $5 million or more in value and were driven by customers who wanted more capacity and functionality to improve outcomes. These wins continue to demonstrate our strong position with our customers and our ability to drive significant repeat business. Our investigative analytics solutions are sold to national security, national intelligence, law enforcement, and other organizations to enable them to perform more effective investigations. We believe our customers view Cognite as a strategic, trusted partner, providing innovative solutions that help them improve the speed, accuracy, and success rate of their investigations, and make timely and high-quality decisions. The long-term relationships we have with our customers gives us insights into the challenges they are facing, which helps us optimize our technology roadmap. We regularly meet with our customers at their facilities, industry conferences, and other events to maintain close relationships. Recently, we participated in a key industry conference in Europe where we engaged with many customers and prospects to discuss with them current and future needs and demonstrated our new capabilities. Customers continue to appreciate our market-leading position and innovative technology. We find frequent touchpoints with customers highly valuable and contribute to our growth. In addition to our ongoing regular marketing initiatives, we occasionally perform more formal research, and we recently commissioned a survey of law enforcement agencies referred to in the industry as LIAs, such as police, financial intelligence units, border police, and others. We issued a press release about this survey last week, and a summary of the results is available on our website. The aim of this survey was to validate some of our working assumptions regarding the challenges faced by the LIA stakeholders around data analytics, as well as to learn more about their current priorities and future needs and plans for dealing with them. Here are a few of the key findings from the survey. First, about 75% of LIAs utilize more than one solution for analyzing the data. This makes it harder for them to connect the dots between desperate data sources and uncover crucial insights for resolving cases. Second, approximately half of the LIAs claim that their current solution's lack of support for unstructured data is one of the top challenges. This is a significant issue given that many of the data sources LIAs need to analyze are unstructured and include, among others, images, text, and video. Third, existing data analytic solutions from low-enforcement organizations are often limited and outdated, making it difficult for investigators and analysts to keep up with changes in data formats and volumes. Therefore, it's no surprise that about 75% of low-enforcement organizations indicated they are planning to expand, upgrade, or replace their existing data analytic solutions. The findings also show there is correlation between the number of siloed solutions within LIAs and the plans to change them. The more solutions used by the organizations, the higher the need for a comprehensive investigative analytic solution in an effort to streamline and optimize the investigation process. Lastly, 99% of respondents consider AI to be beneficial for law enforcement data analysis, and 85% believe that AI is either critical or very important to the future of law enforcement investigations. The most important capabilities include pattern recognition, image analysis, and risk assessment. The outcome of this research with law enforcement is consistent with what we hear from our national security and national intelligence customers and validates our market opportunity and roadmap. Our solutions directly address customer needs around fusing and analyzing structured and unstructured data at scale to uncover hidden insights. We continue to leverage R&D, including implementing advanced R&D capabilities to bring innovations to our customers, maintain our differentiation, generate demand, and drive long-term growth. Turning to our outlook for fiscal 25. Given our momentum and good visibility, we are now expecting revenue to be approximately $344 million, plus or minus 2%, representing about 10% of our growth at the midpoint. Given the leverage in our financial model, we increased our adjusted EBITDA guidance, and we now expect it to be about $22 million at the midpoint of the variant range, more than double what we generated in fiscal 24. David will provide more detailed guidance during his remarks. To summarize, we started very strong, continue to deliver consistent financial performance, and demonstrate the leverage we have in our model. Our visibility is stronger, and the market is healthy. Our customers continue to face significant, growing, and evolving challenges and look to us for solutions that help them accelerate investigations, make decisions faster, and mitigate a wide variety of threats. We believe Cognite is well established as market leader, domain expert, and trusted partner. Our customers frequently tell us that our solutions significantly improve the results, enabling them to effectively perform their missions and make the world safer. Our long-term customer relationships continue to be a significant asset for us, as they help drive repeat business. Given our momentum and good visibility, we increased our outlook for the year. We believe CookNight is positioned for sustainable growth and continuing improvement in profitability. Now let me turn the call over to David to provide more details about our Q1 results and updated fiscal 25 outlook.