Cognyte Software Ltd.

Good day, ladies and gentlemen. Thank you for standing by. Welcome to the Cognite third quarter fiscal year 2025 for news conference call. At this time, all participants on the list are in only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you will need to press star one one on your telephone. You will then hear an automatic message advising your hand is raised. Please note that today's conference may be recorded. I will now hand the conference over to your speaker 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 Jaron, Cognite's CEO, and David Abadi, Cognite's 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 Upcoming Events, then the webcast link for 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 and 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 31st, 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 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 Alaa.

Thank you, Dean. Welcome everyone to our third quarter conference call. This was another quarter of solid execution for Cognite. We continue to deliver on our business plan, advance our growth initiatives, and drive improved profitability. The market for our solutions remains robust and is evolving as anticipated, driving predictable and sustainable growth. Our execution resulted in another quarter of double-digit revenue growth, with adjusted EBITDA expanding more rapidly than revenue. Our day-to-day performance, combined with solid visibility and sustained demand, reinforces our confidence in the business. As a result, we are pleased to again raise our full-year outlook. During Q3, we grew revenue by 12% year-over-year to $89 million. Non-GAAP gross profit increased by 12% year-over-year. We generated approximately $7 million of positive adjusted EBITDA for the quarter, representing 42% year-over-year growth highlighting the strength of our financial model, and we believe our momentum went strong, fueled by significant deal wins during the quarter. These results and deal wins validated the strength of our technology, the differentiated value we provide to our customers, and the substantial opportunities that we believe lie ahead. A key pillar of our growth strategy is deepening and broadening engagements with our existing customers. We achieved this by increasing the number of groups and the number of users leveraging our solutions and by offering additional capabilities to address emerging threats and evolving priorities. One of the trends that is driving expansions is enabling our customers to handle the rapidly growing volume and variety of data they need to analyze. An example is the explosion in mobile data driven by the transition to 5G, which has significantly increased the complexity and scale of their challenges. According to a report recently issued by Ericsson, mobile data traffic is growing at an annual rate exceeding 20%. This surge in data volumes and diversity underscores the need for advanced analytics, including AI-powered solutions, to extract actionable and timely insight from the expanding data landscape. By delivering the solutions that address this need, we strengthen our customers' relationships and drive sustained demand. In Q3, we secured four significant orders from existing customers. Two deals were valued at more than $20 million. The other two were valued at over $10 million. We issued press releases announcing these notable deals over the past few weeks. These longstanding customers have consistently derived substantial value from our solutions over the years. We believe this demonstrates the indispensable role our solutions play in addressing our customers' evolving challenges delivering the quality, reliability, and power such customers require to operate effectively in complex environments. We continue to expand our customer base, signing nine new customers this quarter alone. This includes five contracts valued at over $1 million each, and one significant contract worth $5 million. These new customers span across different regions and segments, highlighting the broad opportunity in the market. Additional wins in North America underscored our steady progress in establishing our foothold in this market. A few weeks ago, we announced a full loan order valued at over $2 million from a highly respected and influential North American law enforcement agency. This agency initially selected our solutions just over a year ago to replace their incumbent provider solution. Since then, the agency has recognized the superior operational intelligence value our solutions deliver. With this latest order, The customer's total investment exceeds $3 million, highlighting their trust in Cognite and in our solution's ability to meet their critical operational needs. We anticipate that future potential North American customers will likely follow a similar trajectory, starting with smaller initial orders and expanding their investments over time as they realize measurable improvements in efficiency and outcomes. We continue to actively pursue opportunities in North American federal markets. Federal customers explore and rigorously test potential new solutions for long periods of time to validate their effectiveness before making the purchase. As a result, the sales cycle with these customers is expected to be longer than what you've experienced with state and local law enforcement agencies. Nonetheless, we are pleased with the level of engagement we have with these potential customers in this important market segment. To further strengthen our efforts in the U.S., we recently welcomed Timothy O'Callaghan, a retired U.S. Marshall branch chief, to help lead our initiatives aimed at expanding our presence. His extensive experience and deep understanding of operations will be invaluable as we build our momentum in this market. We continuously engage with our customers around the globe to understand better and help them address their challenges. Recently, we hosted our Global Cognite Intelligence Summit in Europe, a landmark event where we introduced our latest AI-powered innovations. Over 300 attendees from about 70 countries representing law enforcement, national intelligence, and national security agencies explored today's critical security challenges and the transformative role of our technology. The event featured a keynote by retired Admiral Mike Rogers, former commander of the United States Cyber Command, director of the NSA, and chief of the Central Security Service, who shared insights into the intersection of intelligence and technology. The Admiral underscored the challenges agencies face are not getting any easier. However, adversaries must engage with a broader environment. They need to communicate, they need to move, and they need to access and transfer money. He highlighted that with the right technology, these interactions present opportunities. And this is where Cognite's advantage lies, leveraging technology to transform these interactions into actionable intelligence. He also noted, agencies work to generate deep knowledge about the environment and operational landscape, transforming information into actionable outcomes. He emphasized two things, excelling in addressing present challenges while proactively positioning themselves for future success with the right tools and technology. These are the exact principles that we use to align our focus in product development, advanced tools for actionable insights and future readiness. At the summit, we also hosted 10 external speakers, including former heads of agencies, counterterrorism experts, and representatives from global think tanks, both reinforcing our position as a thought leader and fostering discussions on the evolving threat landscape. The key insight from the summit underscores how the world's challenges are becoming more complex and the lines between different types of crime are increasingly blurred. Criminals and terrorists are adopting each other's tactics, creating diversified and globalized networks that evade traditional defenses. Bad actors exploit advanced technologies like encrypted communications, dark web networks, and cryptocurrency to evade detection. Increasingly, They are leveraging AI to obscure their operations, creating unprecedented challenges for security agencies tasked with protecting citizens and combating crime. This quarter, I want to highlight how our technology addresses the critical challenges posed by organized crime. Agencies face the task of identifying members of criminal organizations and mapping their networks, including leadership structures, funding sources, and intentions. Despite the efforts to conceal activities, this group inevitably leaves behind valuable digital footprints. However, as the volume and diversity of digital information grow exponentially, extracting actionable insights becomes increasingly complex. This is where leveraging advanced technology is no longer optional, it is essential. With the right solutions, like ours, agencies can efficiently analyze vast amounts of structured and unstructured data uncover hidden connections, and accelerate investigations to achieve successful outcomes. To illustrate, a few months ago in Central America, our solutions enabled authorities to dismantle one of the continent's largest drug trafficking networks. By providing the right insights at the right time, security agencies intercepted seven tons of cocaine off the coast. This example demonstrates the decisive impact our solutions have in combating organized crime on a global scale. We are making a meaningful difference for our customers, empowering them to address significant and evolving threats. Our mission to make the world a safer place drives everything we do. By combining cutting edge technology with proven methodologies, we enable faster decision making, accelerate investigations, and help mitigate a wide range of threats. This is why customers around the globe continue to place their trust in our solution. In summary, We continue to grow by introducing new advanced capabilities, deepening our relationships with existing customers, as well as expanding our reach with new ones. These accomplishments strengthen our ability to deliver growth. With solid execution during the first three quarters of fiscal 25, we are once again in a position to raise our fully-routed outlook for revenue and adjusted EBITDA. We now expect revenue to be approximately $349 million, plus or minus 1%, representing about 11% overall growth at the midpoint of the range. Given the leverage in our financial model, we increased our adjusted EBITDA guidance, and we now expect it to be about $26 million at the midpoint of the revenue range, almost three times what we generated in fiscal 24. Looking beyond this year, our focus remains on driving resilient growth for the long term, increased profitability, operational excellence, and deepening our market leadership. We believe that our strategy positions us well to capitalize on the server market conditions and create value for both our customers and shareholders. Now, let me turn the call over to David to provide more details about our Q3 results and updated fiscal 25 outlook. David.

Thank you, Elad, and hello, everyone. We continue to deliver results that underscore our discipline, execution, and strategic focus. Tutorial revenue grew by 12.1% year-over-year and was $89 million. This quarter, software revenue was $30 million, slightly over year, with more subscription revenue than we had in the same quarter last year. Software service revenue was $45.3 million, an increase of $3.9 million over the last year. Total software revenue, which includes software and software services, was $75.3 million, an increase of $3.7 million compared to last year, representing about 85% of total revenue. It is not worthy that approximately 40% of total software revenue growth came from incremental subscription revenue, underscoring the strength of our strong recurring revenue base. Recurring revenue remains a key strength and was $46.9 million or 53% of total revenue in Q3 compared to $42 million in the same period last year. Recurring revenue comprised primarily of support contracts and some subscription offering is a cornerstone of our business. It provides strong visibility and support long-term growth. Professional services revenue was $13.7 million, an increase of $5.9 million over last year. Professional services as a percentage of revenue in Q3 was high due to the timing of revenue recognition. We expect that its share on an annual basis will be lower and blend at about 13% of total revenue. Later on this call, I will provide additional insights into our different revenue stream and our FOE25 revenue mix outlook. Non-GAAP gross margin for the quarter was 70.1%. Our total non-GAAP software gross margin improved to 80.3% versus 78.9% last year, a year-over-year improvement of 140 basis points. Our non-DAP professional services growth margin was 14.4% versus negative 9.7% last year. Our strong growth margin highlights the value and competitive differentiation of our solutions, as well as the benefit of an optimized cost structure. Non-GAAP operating income and adjusted EBITDA grew faster than revenue, reflecting the strength of our financial model. In Q3, we generated $3.4 million of non-GAAP operating income, an increase of 180% versus last year, and $6.6 million of adjusted EBITDA, an increase of about 42% versus last year, resulting in positive non-GAAP EPS of 2 cents. Looking at our year-to-date results, our revenue was $256.1 million, up 11.5% year-over-year, with non-GAAP gross profit growing 13.9%, outpacing revenue growth. Software revenue year-to-date was $88.4 million, an increase of 7.6% versus last year. Software services revenue year-to-date was $135 million, an increase of 10% versus last year. About 30% of total software revenue growth of $18.5 million, or 9%, was driven by incremental subscription revenue supporting our recurring revenue growth. Professional services and other revenue year-to-date was $32.8 million, an increase of 31.7% versus last year. Total software revenue was 87% of our revenue during the first nine months of the year. The inherent leverage in our business model drove significant year-over-year improvements in profitability, underscoring our ability to scale efficiently while delivering strong financial results. Our year-to-date non-GAAP operating income was $9.7 million, an improvement of $14.9 million compared to a non-GAAP operating loss of $5.2 million during the first nine months of last fiscal year. Similarly, our year-to-date adjusted EBITDA was $19.9 million, an increase of $15.2 million compared to $4.7 million in the same period of this previous year. The strong performance this year combined with the leverage inherent in our business model has enabled us to strengthen our balance sheet. Our short and long-term contract liabilities, commonly referred to as deferred revenue, remained robust at $132.2 million at the end of Q3. reflecting a significant increase versus previous periods driven by strong billings performance during the quarter. Our cash position remains strong at $107.3 million, an increase of over $24 million since year end, with no debt. This growth in our cash balance was primarily fueled by cash flow from operations during the first nine months of the year. During Q3, we generated $12.3 million in cash from operations and $7.6 million in free cash flow, reflecting the strengths of our financial model and operational efficiency. Over the past few quarters, we have introduced new KPIs to provide greater transparency and demonstrate how our business is progressing.

Let me walk you through our performance against each of these key indicators.

RPO, or remaining performance obligations, which represents contracted revenue to be recognized in future periods, are influenced by factors such as sales cycle, deployment timelines, contract length, renewal timing, and seasonality. Total RPO is the sum of deferred revenue of $132.2 million and backlog of $435.4 million. At the end of Q3, total RPO was $567.6 million, consistent with previous quarter. Long-term RPO, which also includes multi-year support contracts, is expected to continue to fluctuate due to renewal timing. Interests in RPO in a given quarter are not necessarily indicative of future revenue growth rates. Short-term RPO at the end of Q3 increased to $325.9 million, providing solid visibility into revenue over the next 12 months. We believe these healthy RPO levels support our growth expectations, further validating the strength and the resilience of our business model. During Q3, we secured several significant deals and achieved key billing milestones, resulting in billings of $104.7 million, significantly higher than our revenue for the quarter. This strong performance reflects the impact of both ongoing business and a few larger deals that may not occur every quarter, making this figure higher than what might typically be expected. Billings are calculated as revenue plus the change in contract liabilities, contract assets, and unbilled balances. This strong billing performance contributed to an increase in deferred revenue, which stood at $132.2 million, at the end of the quarter, further strengthening our financial foundation and revenue visibility. Our non-GAAP gross profit for the quarter was $62.4 million, an increase of $6.7 million, or 12% year over year. Q3 non-GAAP operating expenses were $59 million, aligned with our expectations. The combination of revenue growth, improved margins, and effective cost structure drove a notable increase in profitability. During Q3, we achieved $6.6 million of adjusted EBITDA and $3.4 million in non-GAAP operating income. We remained focused on driving further and financial improvements and continuing to expand our margins. And before I turn to our improved FY25 outlook, I want to provide additional insight into our revenue streams. We generate revenue from three main streams. Software revenue is primarily perpetual licenses and appliances with some term licenses subscription. Software services, which is largely support contracts and to a lesser extent, cloud-based SaaS subscription offering, and professional services and other revenue reflecting mainly deployment, development, hardware selling, and training. All revenue streams can fluctuate from quarter to quarter, mainly due to timing of revenue recognition related to customer readiness and percentage of completion accounting. In addition, the signing of new or renewed support of subscription contracts may impact revenue recognition timing. We manage and evaluate the business by focusing on total software revenue, which combines software and software services. This holistic approach reflects the value we deliver through our technology and the services that support and enhance its adoption. This metric better reflects sales performance as it captures the full revenue contribution from a customer. It includes perpetual licenses, appliances, and subscriptions, as well as support contracts.

On an annual basis, we expect total software revenue to continue to be a growth driver. Professional services revenue

which we target to be in the low teams as a percentage of total revenue, is crucial. These services help customers extract greater value from our solutions and enable them to operationalize more quickly, ultimately driving additional opportunities with those customers. It is important to point out that professional services revenue various quarter-to-quarter due to several factors, including the timing and the scale of deployments. These fluctuations are natural and we look at the overall share of professional services revenue on an annual basis to ensure it aligns with our strategic and financial goals. Turning to guidance. Based on our strong year-to-date performance and favorable market conditions, we are raising our full year outlook for fiscal 2025. We now expect full year revenue to be approximately $349 million, plus or minus 1%, representing year-over-year growth of approximately 11% at the midpoint of the range. Out of this revenue outlook, we expect Total software revenue to be about $304 million, representing approximately 87% of total revenue. And professional services revenue to represent about 13% of total revenue, aligned with our strategic goals. We now expect adjusted EBITDA to be about $26 million at the midpoint of the revenue range, up from $9 million last year. reflecting the inherent leverage in our business model. We have made progress with our strategic tax planning and now expect non-GAAP tax expenses to be about $6 million, an improvement from our initial estimate of $10 million.

With this updated improved outlook,

We now project annual NALGA PPS to be positive $0.05 at the midpoint of the revenue range. Finally, we continue to expect to generate about $37 million of cash from operations for this year, reflecting the strong cash generating capability of our business. In November, our Board of Directors approved a share buyback program of up to $20 million in ordinary shares over the next 18 months, reaffirming our commitment to delivering value to shareholders. Following the required 30-day notice period at the daily low, share repurchases can begin on Friday, December 13th. To summarize, we have demonstrated consistent execution, delivering strong results through the first nine months of the year. Our ongoing commitment to innovation and expanding our advanced solutions, leveraging the latest technologies, including AI, continues to enhance the value we provide for customers. Reflecting this progress, we have again raised revenue and profitability outlook for fiscal 25. Looking beyond this year, we anticipate meaningful growth, significant improvement in profitability, and strong cash flow from operations. We believe that we are well positioned for sustainable growth with additional leverage in our business model We expect revenue and gross profit to continue growing faster than operating expenses. We also expect to continue to generate meaningful positive free cash flow. In closing, this quarter as a result drew a positive momentum across key indicators reflecting the health of our business and the opportunities that lie ahead. Our visibility into future revenue and robust balance sheet, including a solid cash position, ensure financial flexibility. With this strong foundation, we are well positioned to seize opportunities ahead and deliver sustainable growth. With that, I would like to hand the call over to the operator to open the lines for questions. Operator?

Thank you. Ladies and gentlemen, to ask a question, you will need to press star 1-1 on your telephone and wait for your name to be announced. To withdraw your question, simply press star 1-1 again. Please stand by while we compile the Q&A roster. Now, first question coming from the lineup. Mike Sickles with Needham & Company. Your line is now open.

Great. Thank you for taking the questions, guys. And congrats on the quarter as well. Wanted to first come back to the large customer announcements that came through the quarter. You announced some $10 million and $20 million agreements with some of these customers. Can you just talk about the profile of these customers? If a customer is signing a $10 or $20 million deal with you guys, do the features or products that they're looking at from Cognite differ materially from other customers or not necessarily? Absolutely.

Yeah, thanks Mike. So actually the complexity customers are facing is similar in the market. If you look at the demand drivers, the demand drivers are related to the complexity of finding the bad guys, which is related to them being able to better hide. It's related to the data that is growing in volume and diversity. And actually it's more difficult now to put your hands on them. So customers have to do two things. The first one is to expand in terms of capacity, to allow more users to use the solution, which means more licenses, and also to increase capacity in terms of data volumes and diversity, and also to improve functionality, which means that if you increase data sources and you have to uncover more hidden insights, You also need to modernize the solution with more analytics, including AI-driven capabilities. And by that, uncover even more hidden insights. Some of them are predictive insights to allow you actually not just to investigate backward, but to find anomalies that are going into the future and intentions and prevent and neutralize threats. So this is something that is relevant for many customers, not only for those. Obviously, national security customers sometimes are larger than law enforcement, for example. So in certain segments, it is more relevant. And it depends also in the capacity of the data customers have. We don't expect it to, you know, to come every quarter, this kind of four large deals. But we do expect the demand drivers to continue to intensify and more and more customers to upgrade either in expansion or in functionality or both. This is something that we expect also in the future.

Thanks for that, Elad. And I just wanted to build on that last point, starting to touch on macro there. But can you help us think? It sounds like the secular... demand drivers remain intact if not accelerating from where we stand today. But what are you hearing from customers as far as budgets? Are these budgets significantly expanding from where we stand today? Are there incremental dollars flowing into this area from other pockets? Can you help us think about that budget item?

Yes, sure, Mike. So maybe I'll give you a wider view on what we see in the market. So it will give you data points and also our judgment on how we see the market. So first of all, we see a very healthy demand from existing and new customers. If you look at the new logos, here to date, we added about 30 new customers compared to 29 in full fiscal 24. So we do see more new logos this year already. We see that more customers are budgeting with higher budgets, and this is reflected in the larger upgrades and expansions that we see. We also discussed the intensified demand drivers that I just mentioned earlier. And we continuously engage with customers, and what we hear is that the challenges are growing and increasing. and they are asking for budgets, and we do see that the momentum is healthy, and we see a tailwind in terms of demand. Another data point that can help you understand where we stand is the Cognite Intelligence Summit, which we discussed earlier in the call and also in the press release. This is not an industry general event. This is an event for Cognite only, and you can imagine that 300 attendees from almost 70 countries, about 70 countries, came to listen to what we have to say, to see the solutions, to see the innovation, to see the eye-driven new solutions that we have. So it means that the demand is there. Customers are willing to listen and to get more insights of what's new. They're willing to put orders for expansions and upgrades, and new logos are coming to us. So overall, we feel very good about the the market health. And, you know, if you look overall, the demand drivers combined with our advanced technology and high value and what we hear from the customers that we engage frequently in general and also in the summit that we recently had and the recent large deals, all of it together gives us a very high confidence that we are well positioned for future growth.

Terrific. Thank you very much, guys.

Thanks, Mike.

Thank you. And as a reminder, to ask a question, please press star 11 and wait for your name to be announced. And our next question, coming from the line of Peter Levine with Evercore ISI, your line is now open.

Great. Thank you for taking my question. You know, Elad, Elad, sorry. You mentioned in your prepared remarks, you know, mobile data traffic becoming top of mind, meaning the need for advanced data analytics. I know there's a lot you can't say around your product, but maybe talk about some of the R&D initiatives from your summit. What are your customers asking? What are you building? And I'll start with that one.

Yes, Shupit. So I mentioned 5G as a demand driver because actually what our customers are doing is trying to convert certain activities of the adversaries into insights. So adversaries, they have to move, they have to transfer money and to get money, they have to put their hands on material, they have to communicate between themselves, and all of it is actually digital data. So 5G, in this respect actually, is increasing the bandwidth of data, so customers have to deal with vast amounts of data that are increasing. And I also mentioned that Eric Son shared with us that actually in the report that the data is growing in more than 20% year-over-year. So this is a significant challenge for our customers because when the bandwidth is growing, it means that they have to deal with more data. It means that new applications will be launched, that now the bandwidth is increasing, so new applications will come. So they can communicate in different and more varied ways. They can hide better. And for our customer, this is a challenge. So in order for them to be able to address it, first of all, they need to expand the capacity of the solutions to get more data. And second thing, they have to improve the AI capabilities and analytics in order to uncover more hidden insights out of the same data sets that they have. And by that, being able, first of all, to prioritize and to predict and later on to neutralize threats before they unfold. So 5G is one example of how the demand drivers are evolving in the market, driving demand for expansions and functionality upgrades and analytics.

David, you mentioned you didn't give a guide for fiscal 26 next year, but you mentioned meaningful growth. Faster than operating expenses, call it operating expense growth in Q3 here was 7%. Can you just kind of provide some guardrails around how you're thinking about next year? Could we see double-digit growth? Are you on track to do that? Kind of just walk us through how you're thinking about next year. obviously factoring in the environments, but would love to know if you can give us a little bit more guidance on how you're thinking about it here.

Thank you, Peter. So if you look at about our performance, you can see that in the last quarter, quarter over quarter, we were able to drive more and more profitability. If you look at the year-to-date result, we grew our top line by 11.5%. Our Gross profit grew by 14% on the nine-month basis, and the OPEX only grew by 4.5%. So you can see that there is a lot of leverage. We started the year with a certain guidance, and then we increased incremental $9 million to the top line, while $7 million out of the $9 million went to profitability. So the leverage exists in the model. Looking ahead, we are very well positioned for the future. We have very strong CRPO and total RPO, which are giving us the confidence that we can go in the future. And we believe that we'll be able to go faster than revenue and gross profit in the profitability, meaning that the revenue and the gross profit will go in a much faster pace versus OPEX. and that will drive a strong result and better profitability also next year.

Thanks. And sorry if I can squeeze one last thing. Last quarter, you talked a lot about U.S., expanding to the U.S., go to market. Can you maybe just give us an update on how that kind of trended in the quarter and then maybe plans for calendar 25 in terms of further evolving or expanding your reach here in the U.S.? Thank you.

Yes, sure. So first of all, we continue to believe that North America market presents a good opportunity for us. Obviously, there are many potential customers and it's a wealthy market. So we are focusing on expanding presence there. And we execute our plan. We make progress. I can tell you that I continue visiting existing and potential customers in the US and I get very, very good feedback on our technology. Some of the customers became already reference customers. For some customers, we got already follow-on orders, which is another testimonial that it's not just a honeymoon. They don't just come to us for the first deal, but they're happy with what they get. They generate lots of value compared to competition, and for that reason, they come to us and expand. And I mentioned it also earlier in the call. I can also tell you that a few weeks ago I visited another law enforcement agency, a very significant one in the U.S., and I got very good feedback also in a very significant success story using our technology. So given the execution so far, the recent wins we see, customers' feedback that I get, I do expect that the North American business will continue to grow in fiscal 26 and beyond and become a more significant business for Cognite.

Thank you very much.

Thank you. And again, if you'd like to ask a question, please press star 1-1 on your touch-tone phone. We'll give a moment. I'm showing off for the questions in the queue at this time. I will now turn the call back over to Dean for any closing remarks.

Thank you, Operator, and thank you, everyone, for joining us on today's call. Alad, David, and I will be in New York in January 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. Thank you all for joining us.

Ladies and gentlemen, that does end our conference for today. Thank you for your participation, and you may now disconnect.