Cognyte Software Ltd (CGNT) 2024 Q2 法說會逐字稿

Good day, and thank you for standing by. Welcome to the Cognyte Q2 FYE '24 Earnings Conference Call. (Operator Instructions) Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Dean Ridlon, Head of Investor Relations. Please go ahead.

美好的一天，感謝您的支持。歡迎參加 Cognyte 24 財年第二季財報電話會議。 （操作員指示）請注意，今天的會議正在錄製中。現在我想將會議交給今天的發言人、投資者關係主管 Dean Ridlon。請繼續。

Thank you, operator. Hello, everyone. I'm Dean Ridlon, Cognyte's Head of Investor Relations. Thank you for joining us today. I'm here with Elad Sharon, Cognyte's CEO; and David Abadi, Cognyte's CFO.

謝謝你，接線生。大家好。我是 Cognyte 投資人關係主管 Dean Ridlon。感謝您今天加入我們。我和 Cognyte 執行長 Elad Sharon 一起來到這裡。以及 Cognyte 財務長 David Abadi。

Before getting started, I would like to mention that accompanying our call today is a presentation. If you would like to view these slides in real-time during the call, please visit the Investors section of our website at cognyte.com. Click on the Investors tab, click on the webcast link and select today's conference call.

在開始之前，我想提一下，伴隨我們今天的電話會議的是一個演示。如果您想在電話會議期間即時查看這些投影片，請造訪我們網站 cognyte.com 的投資者部分。點擊“投資者”選項卡，點擊網路廣播連結並選擇今天的電話會議。

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 as except as required by law, Cognyte assumes no obligation to update or revise them. Investors are cautioned not to place undue reliance on these forward-looking statements.

我還想提請您注意，本次電話會議中討論的某些事項可能包含 1995 年《私人證券訴訟改革法案》和聯邦證券法其他條款含義內的前瞻性陳述。這些前瞻性陳述是基於管理階層目前的預期，並非對未來業績的保證。實際結果可能與這些前瞻性陳述中所表達或暗示的結果有重大差異。前瞻性陳述是在本次電話會議之日做出的，除非法律要求，Cognyte 不承擔更新或修改這些陳述的義務。請投資人不要過度依賴這些前瞻性陳述。

For a more detailed discussion of how these and other risks and uncertainties could cause Cognyte's actual results to differ materially from those indicated in these forward-looking statements. Please see our annual report on Form 20-F for the fiscal year ended January 31, 2023, and other filings we make with the SEC.

更詳細地討論這些及其他風險和不確定性如何導致 Cognyte 的實際結果與這些前瞻性陳述中所示的結果有重大差異。請參閱我們截至 2023 年 1 月 31 日的財政年度的 20-F 表格年度報告以及我們向 SEC 提交的其他文件。

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.

今天討論的財務指標包括非公認會計準則指標。我們認為，投資者在比較不同時期以及發布類似非公認會計原則財務指標的同業公司之間的結果時，會重點關注非公認會計原則財務指標。

Please see today's presentation slides. Our earnings release and the Investors section of our website at cognyte.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 the company uses have limitations and may differ from those used by other companies.

請參閱今天的簡報投影片。我們的收益發布和我們網站 cognyte.com 的投資者部分，用於調整非 GAAP 財務指標與 GAAP 指標。非GAAP 財務資訊不應被孤立地視為GAAP 財務資訊的替代品或優於GAAP 財務信息，而是包含在內，因為管理層認為它提供了有關我們業務財務業績的有意義的信息，並且對投資者提供資訊和比較有用。目的。本公司使用的非公認會計準則財務指標有其局限性，並且可能與其他公司使用的不同。

Now I'd like to turn the call over to Elad.

現在我想把電話轉給埃拉德。

Thank you, Dean. Welcome, everyone, to our second quarter conference call. I'm pleased to report that our positive momentum continues.

謝謝你，迪恩。歡迎大家參加我們的第二季電話會議。我很高興地報告，我們的積極勢頭仍在繼續。

During the quarter, we continue to win deals with existing customers as well as with new strategic customers, recognize strength of our innovative technology and the value it delivers. Our team executed very well, and we had another quarter of solid results.

在本季度，我們繼續贏得與現有客戶以及新策略客戶的交易，並認識到我們創新技術的實力及其所提供的價值。我們的團隊執行得非常好，又一個季度取得了紮實的成果。

Revenue grew both year-over-year and sequentially on an SIS adjusted non-GAAP basis, and came in ahead of our expectations at $77 million. We also saw further improvements in gross margin, which was up 450 basis points over Q2 last year and gross profit increased 13% year-over-year on an SIS adjusted non-GAAP basis.

根據 SIS 調整後的非 GAAP 基礎，營收年比和季比均有所成長，超出了我們的預期，達到 7,700 萬美元。我們也看到毛利率進一步改善，比去年第二季成長了 450 個基點，以 SIS 調整後的非 GAAP 基礎計算，毛利年增 13%。

Adjusted EBITDA was positive for the quarter, 2 quarters earlier than projected. And free cash flow was positive again this quarter due to the positive EBITDA and continuing strong collections. As a reminder, we took many actions last year to address the challenge that we faced and put the business back on track. We focused the business of few agendas, divested SIS, adjusted the cost structure, improved our capital structure and focused our investment on high potential opportunities in R&D and sales including investing in AI. We are realizing the benefits of our actions and improved execution. We regain visibility, resumed guidance and raise our outlook for the year 3 quarters in a row. We believe the positive momentum will continue, and we are on a path of sustainable growth.

本季調整後 EBITDA 為正，比預期提早兩季。由於 EBITDA 為正值且收款持續強勁，本季自由現金流再次為正值。提醒一下，我們去年採取了許多行動來應對我們面臨的挑戰，並將業務重回正軌。我們專注於少數議程的業務，剝離了SIS，調整了成本結構，改善了我們的資本結構，並將我們的投資集中在研發和銷售方面的高潛力機會，包括投資人工智慧。我們正在認識到我們的行動和改進執行力的好處。我們重新獲得可見性，恢復了指引，並連續三個季度上調了對今年的展望。我們相信積極的勢頭將會持續下去，我們正走在可持續成長的道路上。

Now I will start with a review of our significant wins, then I'll share with you a few use cases that illustrates how our use of AI and other innovations differentiate our solutions and delivers this significant value to our customers. And lastly, I'll discuss our updated outlook for the year. I will now review some of our recent significant wins that highlight our market-leading differentiated technology.

現在，我將首先回顧我們的重大勝利，然後我將與您分享一些用例，說明我們對人工智慧和其他創新的使用如何使我們的解決方案脫穎而出，並為我們的客戶提供這一重要價值。最後，我將討論我們今年的最新展望。現在，我將回顧我們最近的一些重大勝利，這些勝利突顯了我們市場領先的差異化技術。

Our investigative analytics solutions help national security, law enforcement, national intelligence and other security organizations to accelerate and perform more effective investigations. The first win is for more than $20 million with a new national security customer for its mission to combat terrorism and national threats. We believe we were selected because of our cutting-edge technology, including how we leverage artificial intelligence, which delivers the impactful results. We consistently outperform solutions from other vendors during a variety of real-world operational scenarios. In addition, we believe the customer valued our deep domain expertise and use us as a strategic partner to help them address their long-term evolving needs.

我們的調查分析解決方案可協助國家安全、執法、國家情報和其他安全組織加速並執行更有效的調查。第一個勝利是與新的國家安全客戶贏得超過 2000 萬美元的獎金，以履行其打擊恐怖主義和國家威脅的使命。我們相信我們被選中是因為我們的尖端技術，包括我們如何利用人工智慧來提供有影響力的結果。在各種實際操作場景中，我們的解決方案始終優於其他供應商的解決方案。此外，我們相信客戶重視我們深厚的領域專業知識，並將我們視為策略合作夥伴來幫助他們滿足長期不斷變化的需求。

The second win is for approximately $4 million from a new unit inside an existing national intelligence customer to combat their activities. We replaced an incumbent vendor and believe we were selected because of our higher investigation value. The customer was seeking a state-of-the-art solution to address the evolving needs by enabling a broader group of users, with varying skill set and expertise to maximize the intelligence value delivered.

第二項勝利是從現有國家情報客戶內部的一個新單位獲得約 400 萬美元，以打擊他們的活動。我們更換了一家現有供應商，並相信我們被選中是因為我們具有更高的調查價值。客戶正在尋求一種最先進的解決方案，透過支援更廣泛的使用者群體（具有不同的技能和專業知識）來滿足不斷變化的需求，從而最大限度地提高所提供的情報價值。

The third win is with a new national intelligence customer for approximately $2.5 million to identify and prevent threats during operations. The customer chose us as a competitive process due to our superior technology. We delivered better operational results during comprehensive field trial in different operational scenarios. Also, we recently had another new customer win in the U.S.

第三項勝利是與新的國家情報客戶合作，獲得約 250 萬美元的資金，用於識別和預防行動期間的威脅。由於我們卓越的技術，客戶選擇了我們作為競爭流程。透過不同營運場景的綜合外場試驗，取得了較好的營運效果。此外，我們最近在美國贏得了另一個新客戶。

We replaced an incumbent vendor following competitive bid, and we continue our focus on expanding in the U.S. market over time. Our cutting-edge solutions and deep domain expertise drive our leadership position and help us to continue to win significant deals from both existing and new customers. Customers view us as a strategic trusted partner that provides innovative solutions that help them generate timely critical insights from the data, accelerate investigations and improve the speed and accuracy of the decision-making.

我們在競標後更換了一家現有供應商，隨著時間的推移，我們將繼續專注於在美國市場的擴張。我們的尖端解決方案和深厚的領域專業知識推動了我們的領導地位，並幫助我們繼續贏得現有和新客戶的重大交易。客戶將我們視為值得信賴的策略合作夥伴，提供創新的解決方案，幫助他們從數據中及時產生關鍵見解，加速調查並提高決策的速度和準確性。

In our last call, I talked about our use of artificial intelligence in our solutions. Now I'll drill down a bit more on our innovative technology and examples of a few customer use cases. Cognyte's focus is on investigative analytics to help our customers improve the speed and success rate of their investigations by effectively analyzing enormous amounts of structured and unstructured data and generating timely impactful insights.

在我們上次的電話會議中，我談到了我們在解決方案中使用人工智慧的情況。現在，我將進一步深入了解我們的創新技術和一些客戶用例的範例。 Cognyte 的重點是調查分析，透過有效分析大量結構化和非結構化資料並及時產生有影響力的見解，幫助我們的客戶提高調查速度和成功率。

We have been doing this for many years and developed unique domain expertise and the vast technology in investigative analytics. We believe that recent investment in AI technology is accelerating our innovation and positions us as a highly differentiated leader in the investigative analytics market. We have embedded their models in our solutions to improve velocity and accuracy of customers' insight from data.

我們已經這樣做了很多年，並在調查分析方面開發了獨特的領域專業知識和廣泛的技術。我們相信，最近對人工智慧技術的投資正在加速我們的創新，並使我們成為調查分析市場上高度差異化的領導者。我們將他們的模型嵌入到我們的解決方案中，以提高客戶從數據中洞察的速度和準確性。

For example, the introduction of cutting-edge AI technology for pattern recognition, enables our customers to reveal previously undiscoverable connections among entities under investigation, such as bad actors and financial transactions. This technological advancement improved investigation, success rates and accelerate time to resolution. Customers are reacting positively to these recent advancements.

例如，引入尖端人工智慧技術進行模式識別，使我們的客戶能夠揭示被調查實體之間以前無法發現的聯繫，例如不良行為者和金融交易。這項技術進步提高了調查、成功率並加快了解決問題的時間。客戶對這些最新進展做出了積極反應。

To help illustrate customers benefit from our solutions, let's look at two security use cases. The first use case is for combating drug trafficking. Law enforcement units better responsibility of detecting and preventing drug-trafficking activities along the major international borders. This illicit trade often involves organized groups that exploit well-established routes, conceal their identities and attempts to master illegal activities as legitimate ones. Within our solutions, AI models play a pivotal role in expediting the analysis of our customers' data sources.

為了幫助說明客戶從我們的解決方案中受益，讓我們來看看兩個安全用例。第一個用例是打擊販毒。執法部門更有責任偵查和防止主要國際邊界沿線的販毒活動。這種非法交易往往涉及有組織的團體，他們利用既定的路線，隱藏自己的身份，並試圖將非法活動偽裝成合法活動。在我們的解決方案中，人工智慧模型在加快客戶資料來源分析方面發揮關鍵作用。

Our software helps customers identify suspicious activities such as unusual behavior and automatically trigger alert for user by using AI pattern recognition. In addition, our use of AI enables our solutions to more quickly predict potential hotspot and routes for drug smuggling activities. Those valuable insights help investigation units in closing cases faster and more effectively.

我們的軟體可以幫助客戶識別可疑活動，例如異常行為，並透過人工智慧模式識別自動觸發使用者警報。此外，我們對人工智慧的使用使我們的解決方案能夠更快地預測毒品走私活動的潛在熱點和路線。這些寶貴的見解有助於調查單位更快、更有效地結案。

The second use case is related to detection and prevention of terror activities. Financial Intelligence units are tasked with detecting and disrupting the flow of funds to terror organizations. Terror funding involves illicit financial transactions, money laundering and other covert activities that facilitate terrorist activities. The challenge lied in the fact that these transactions often mask as donations, charity and fraudulent purchasing of goods.

第二個用例與偵測和預防恐怖活動有關。金融情報部門的任務是偵查和阻止資金流向恐怖組織。恐怖融資涉及非法金融交易、洗錢和其他為恐怖活動提供便利的秘密活動。挑戰在於，這些交易往往偽裝成捐贈、慈善和欺詐性購買商品。

Our solution utilizes algorithms to analyze vast amounts of financial transaction data from various customer data sources, including bank records, money transfer services and cryptocurrency exchanges. The system utilizes AI pattern recognition algorithms to continuously monitor these data streams to identify partners and anomalies in financial transactions that may indicate potential terror funding activities. We continue to leverage the latest AI developments for commercially available models in our own AI research lab.

我們的解決方案利用演算法來分析來自各種客戶資料來源的大量金融交易數據，包括銀行記錄、匯款服務和加密貨幣交易。該系統利用人工智慧模式識別演算法持續監控這些資料流，以識別可能表明潛在恐怖融資活動的合作夥伴和金融交易中的異常情況。我們繼續在自己的人工智慧研究實驗室中利用最新的人工智慧開發成果來開發商業模型。

Looking ahead, we believe our ability to embed the latest innovations quickly together with our domain expertise in investigative analytics will further enhance our differentiation and the value we provide to our customers. We continue to invest in AI to generate demand and contribute to driving growth and growth.

展望未來，我們相信，我們快速嵌入最新創新的能力以及我們在調查分析領域的專業知識將進一步增強我們的差異化以及我們為客戶提供的價值。我們繼續投資人工智慧以產生需求並為推動成長和成長做出貢獻。

Turning to our outlook for this fiscal year. Given the improved visibility and our performance during Q2, we are raising our revenue guidance for the year to $307 million, plus or minus 2%, representing 8.5% year-over-year growth at the midpoint on an SIS adjusted non-GAAP basis. With revenue expected to grow by 8.5%, we now expect gross profit to grow faster at more than 15% year-over-year on an SIS adjusted non-GAAP basis. Given our positive adjusted EBITDA in Q2 and our improved revenue outlook and profitability, we are now expecting positive adjusted EBITDA for the year.

轉向我們對本財年的展望。鑑於第二季可見度和業績的改善，我們將今年的營收指引上調至 3.07 億美元，上下浮動 2%，即按 SIS 調整後的非 GAAP 基礎計算，年增 8.5%。由於營收預計將成長 8.5%，我們現在預期毛利將在 SIS 調整後的非 GAAP 基礎上年增超過 15%。鑑於我們第二季調整後的 EBITDA 為正值，以及營收前景和獲利能力的改善，我們現在預計今年調整後的 EBITDA 為正值。

Looking beyond this year, given the recent innovations in AI, we have identified potential opportunities to expand our business with both existing and new customers. We believe that the combination of positive industry trends, our innovative technology and our large global customer base position us well for growth.

展望今年，鑑於人工智慧領域的最新創新，我們已經確定了與現有客戶和新客戶擴展業務的潛在機會。我們相信，積極的行業趨勢、我們的創新技術和龐大的全球客戶群相結合，為我們的成長奠定了良好的基礎。

Before I summarize, I would like to recognize the significant contribution Dan Bodner has made to Cognyte over the last 3 decades in his role as Verint's CEO and after the spin-off as Cognyte's, Chairman of our Board. Dan had a tremendous impact on the creation and growth of our business over the years and his wisdom and knowledge were a great asset to Cognyte. I personally am appreciative for all his support and advice. With Dan stepping down as a director, I'm looking forward to collaborating with Earl Shanks in his new role as our Chairman and with the rest of the Board to continue to drive growth and profitability at Cognyte.

在我進行總結之前，我想感謝 Dan Bodner 在過去 3 年裡擔任 Verint 執行長以及在分拆後擔任 Cognyte 董事會主席期間為 Cognyte 做出的重大貢獻。多年來，Dan 對我們業務的創建和發展產生了巨大影響，他的智慧和知識是 Cognyte 的寶貴財富。我個人非常感謝他的所有支持和建議。隨著 Dan 辭去董事職務，我期待與 Earl Shanks 擔任我們的董事長的新職位以及董事會其他成員合作，繼續推動 Cognyte 的成長和盈利。

To summarize, our customers continue to face significant challenges across many use cases and look to us to help them accelerate investigations and mitigate the right variety of threats. We have established long-term relationships with many of our customers and they view us as domain experts and trusted partners. These relationships will continue to be a significant asset for us. We are pleased with our second quarter results and positive momentum and are raising guidance for the current year. Long term, we expect continued growth and improved profitability.

總而言之，我們的客戶在許多用例中繼續面臨重大挑戰，並期望我們幫助他們加速調查並減輕各種威脅。我們與許多客戶建立了長期合作關係，他們將我們視為領域專家和值得信賴的合作夥伴。這些關係將繼續成為我們的重要資產。我們對第二季度的業績和積極的勢頭感到滿意，並提高了今年的指導。從長遠來看，我們預計持續成長並提高獲利能力。

Now let me turn the call over to David to provide more details about our Q2 results and outlook. David?

現在讓我將電話轉給 David，以提供有關我們第二季業績和前景的更多詳細資訊。大衛？

Thank you, Elad, and hello, everyone. Our discussion today will include non-GAAP financial measures. Reconciliation between our GAAP and non-GAAP financial measures is available, as Dean mentioned, in our earnings release and in the Investors section of our website. Our website also includes a financial dashboard with a tab that detail our historical results, excluding divested Situation Intelligence Solutions. We are very pleased with our improved performance over the last few quarters.

謝謝你，埃拉德，大家好。我們今天的討論將包括非公認會計準則財務指標。正如 Dean 所提到的，我們的 GAAP 和非 GAAP 財務指標之間的調整可以在我們的收益發布和我們網站的投資者部分中找到。我們的網站還包括一個財務儀表板，其中有一個選項卡詳細說明了我們的歷史結果，不包括剝離的態勢情報解決方案。我們對過去幾季業績的改善感到非常滿意。

In Q2, revenue, gross margin, adjusted EBITDA and cash from operations came in ahead of our expectations. We continue to win deals from both existing and new customers, reflecting the demand for our cutting-edge investigative analytics solutions. Q2 revenue grew both sequentially and year-over-year coming in at $77 million, up $3.7 million from Q1 and $4.2 million from Q2 last year. About 87% of our revenue was software. Gross profit grew faster than revenue and was up 6.2% sequentially and 13.1% year-over-year. Q2 gross margin was 69.2%, up 450 basis points from Q2 last year, primarily due to the increase in software revenue.

第二季度，營收、毛利率、調整後 EBITDA 和營運現金都超出了我們的預期。我們繼續贏得現有和新客戶的交易，反映了對我們尖端調查分析解決方案的需求。第二季營收季增 370 萬美元，比去年第二季成長 420 萬美元，比第一季成長 370 萬美元，比去年第二季成長 420 萬美元。我們大約 87% 的收入來自軟體。毛利成長快於收入，季增 6.2%，年增 13.1%。第二季毛利率為69.2%，較去年第二季成長450個基點，主要得益於軟體營收的成長。

We are pleased with our software gross margin of 77.4% and our professional services gross margin of 16.1%. Our gross margin inflects our competitive differentiation and ability to continuously create value for our customers. All the metrics I just discussed are on SIS adjusted non-GAAP basis.

我們對 77.4% 的軟體毛利率和 16.1% 的專業服務毛利率感到滿意。我們的毛利率反映了我們的競爭優勢和持續為客戶創造價值的能力。我剛才討論的所有指標都是在 SIS 調整後的非 GAAP 基礎上得出的。

Our Q2 non-GAAP operating expense were $54.3 million, similar to Q1 level. Over the last few quarters, we focused the organization and improve our cost structure, resulting in sequential revenue growth, higher gross margin and returned to positive adjusted EBITDA and significantly reduced operating loss. Our Q2 non-GAAP operating loss was $0.9 million and adjusted EBITDA was positive $2.3 million. We generated breakeven adjusted EBITDA for the first half of the year, ahead of our expectations.

我們第二季的非 GAAP 營運費用為 5,430 萬美元，與第一季的水平相似。在過去的幾個季度中，我們集中精力組織並改善了成本結構，從而實現了收入連續增長、毛利率提高、調整後的 EBITDA 恢復為正值並顯著減少了營運損失。我們第二季的非 GAAP 營運虧損為 90 萬美元，調整後 EBITDA 為正 230 萬美元。我們上半年實現了盈虧平衡調整後 EBITDA，超出了我們的預期。

Turning to cash. During Q2, we delivered positive cash flow from operations of $6.3 million. For the first half of the year, we had positive cash flow from operation of $25.2 million. The positive cash flow from operation was driven by our improved financial results and strong cash collection. In terms of balance sheet, we ended the quarter with cash of about $77 million and no debt. Our long and short-term RPO continued to be strong. Total RPO at the end of Q2 was $581 million and short-term RPO was $282 million, approximately the same level of Q1. This healthy backlog coupled with our continued solid results, allow us to increase our outlook for the current year for the third consecutive quarter.

轉向現金。第二季度，我們的營運現金流為 630 萬美元。今年上半年，我們的營運現金流為 2,520 萬美元。營運產生的正現金流是由我們改善的財務表現和強勁的現金回籠所推動的。就資產負債表而言，本季末我們擁有約 7,700 萬美元的現金，沒有債務。我們的長期和短期恢復點目標仍然強勁。第二季末的總 RPO 為 5.81 億美元，短期 RPO 為 2.82 億美元，與第一季大致相同。這種健康的積壓加上我們持續穩健的業績，使我們能夠連續第三個季度提高對今年的展望。

For fiscal 2024, we are now raising our revenue outlook to $307 million, plus or minus 2%, reflecting approximately 8.5% year-over-year growth on a SIS adjusted non-GAAP basis at the midpoint of the range.

對於 2024 財年，我們目前將營收預期上調至 3.07 億美元，上下浮動 2%，按 SIS 調整後的非 GAAP 基礎計算，同比增長約 8.5%，處於該範圍的中點。

Now let me share with you more color on how we see the remainder of the year evolving. For revenue, we expect Q3 to be at a similar level to Q2. We're increasing our full year non-GAAP gross margin expectation to 68%, an improvement of 150 basis points versus our previous outlook and year-over-year improvement of 520 basis points on a SIS adjusted non-GAAP basis. Gross margin may fluctuate between quarters based on the revenue mix.

現在讓我與大家分享更多關於我們如何看待今年剩餘時間的演變的資訊。就收入而言，我們預計第三季將與第二季持平。我們將全年非 GAAP 毛利率預期提高至 68%，與先前的預期相比提高了 150 個基點，在 SIS 調整後的非 GAAP 基礎上同比提高了 520 個基點。毛利率可能會根據收入組合而在季度之間波動。

For our non-GAAP operating expense, we expect total expenses of approximately $220 million for the full year. Our improved cost structure combined with revenue growth, will allow us to improve operating margins over time. Given our strong performance in Q2 and our expectations for the second half of the year, we now expect to have positive adjusted EBITDA of about $2 million for the full year at the midpoint of the revenue range. We continue to work on optimizing our cash tax payment. As a result of this work, we are expecting to record a non-GAAP tax provision of about $9 million for the year versus our initial estimation of $12 million.

對於我們的非 GAAP 營運費用，我們預計全年總費用約為 2.2 億美元。我們改進的成本結構與收入成長相結合，將使我們能夠隨著時間的推移提高營業利潤率。鑑於我們第二季度的強勁表現以及對下半年的預期，我們現在預計全年調整後 EBITDA 約為 200 萬美元，處於收入範圍的中點。我們持續致力於優化現金納稅。這項工作的結果是，我們預計今年將記錄約 900 萬美元的非 GAAP 稅收撥備，而我們最初估計為 1200 萬美元。

In terms of EPS, we are now expecting a $0.33 annual non-GAAP EPS loss at the midpoint of the revenue range, an improvement of $0.20 versus our previous outlook. Our non-GAAP EPS for the second half of the year is expected to be about 0, due to fluctuation in our non-GAAP tax expenses, we currently expect Q3 non-GAAP EPS to be slightly positive and offset by similar negative non-GAAP EPS in Q4.

就每股收益而言，我們目前預計非 GAAP 年度每股收益將損失 0.33 美元，處於收入範圍的中點，比我們之前的預期提高了 0.20 美元。我們下半年的非 GAAP 每股盈餘預計約為 0，由於我們的非 GAAP 稅務費用的波動，我們目前預計第三季非 GAAP 每股盈餘將小幅為正，並被類似的非 GAAP 負值所抵消第四季的每股盈餘。

To summarize, we are very pleased with our improved performance over the last few quarters. We continue to leverage our financial results and drive revenue growth and margin expansion. Our healthy backlog coupled with our continuing solid results allow us to increase our outlook for the current year for the third consecutive quarter. We are a market leader in investigative analytics and there is a strong and lengthy track record with customers around the world. We continue to have capabilities and improve the performance of our solution by leveraging the latest technologies, including emerging innovation in artificial intelligence. We believe these technological innovations increase the operational value our customers generate from our solutions and help drive demand.

總而言之，我們對過去幾季業績的改善感到非常滿意。我們繼續利用我們的財務表現並推動收入成長和利潤率擴張。我們健康的積壓訂單加上持續穩健的業績使我們連續第三個季度提高了今年的前景。我們是調查分析領域的市場領導者，與世界各地的客戶有著良好且長期的合作記錄。透過利用最新技術（包括人工智慧領域的新興創新），我們將繼續擁有能力並提高解決方案的效能。我們相信，這些技術創新增加了客戶從我們的解決方案中產生的營運價值，並有助於推動需求。

Looking beyond FY '24, we believe our financial results will continue to benefit from the recent positive momentum. The combination of our cutting-edge technology, large and loyal customer base, and the opportunity to address the needs of existing and new customer position us well for growth.

展望 24 財年之後，我們相信我們的財務表現將繼續受益於近期的正面動能。我們的尖端技術、龐大且忠誠的客戶群以及滿足現有和新客戶需求的機會相結合，為我們的發展奠定了良好的基礎。

With that, I would like to hand the call over to the operator to open the line for questions. Operator?

至此，我想將電話轉交給接線員，以開通提問線路。操作員？

(Operator Instructions) Our first question comes from Mike Cikos from Needham.

（操作員說明）我們的第一個問題來自 Needham 的 Mike Cikos。

Mike Cikos here from Needham. And I have 2 questions here. The first to Elad, so Elad congratulations on that, that new customer went for over $20 million. I wanted to ask, can you give us additional insight? I know that you discussed use cases for AI, like drug trafficking as an example. But for this customer specifically, that $20 million new customer, some of the use cases or some of the AI capabilities that the Cognyte has, which allowed you to win that new customer. And also any commentary you have as far as how competitive this competition was versus maybe other solutions out there on the market? That would be very helpful.

麥克·西科斯（Mike Cikos）來自尼達姆。我這裡有兩個問題。第一個是給 Elad 的，所以 Elad 對此表示祝賀，這位新客戶的花費超過了 2000 萬美元。我想問一下，您能給我們更多的見解嗎？我知道您討論了人工智慧的用例，例如販毒。但具體來說，對於這個客戶，那個價值 2000 萬美元的新客戶，Cognyte 擁有的一些用例或一些 AI 功能，使您能夠贏得該新客戶。對於這場競爭與市場上其他解決方案的競爭程度，您有何評論？這將非常有幫助。

Yes, sure. Thanks, Mike. So our customer's mission is mainly to increase the speed, accuracy and the success rate of the investigations and time is of essence here. And actually, it was a competitive bid with a few bidders. The need was actually to be able to uncover hidden insights relations between entities and patterns and anomalies in behavior out of this data. Over the competitive process, we're able to demonstrate over POC, our capabilities, the competitors did the same. And actually, over time, both of them were disqualified and we were the last one to meet the technical needs. So the win was a competitive win, a new customer, a National Security One. His main challenge was -- is related to investigate terror activities and predict terror risks. The data is a large amount of data that he has to deal with. And the idea is to be able to accelerate investigation in a way that they'll be able to find actually hidden relations and hidden behaviors that cannot be done with legacy technology.

是的，當然。謝謝，麥克。因此，我們客戶的任務主要是提高調查的速度、準確性和成功率，而時間在這裡至關重要。事實上，這是一次有幾個投標者參與的競爭性投標。實際上，我們的需求是能夠從這些數據中揭示實體和模式之間隱藏的洞察關係以及行為異常。在競爭過程中，我們能夠透過POC展示我們的能力，競爭對手也做了同樣的事情。事實上，隨著時間的推移，他們都被取消了資格，而我們是最後一個滿足技術需求的。因此，這場勝利是一場競爭性的勝利，一個新客戶，一個國家安全一號。他的主要挑戰是——與調查恐怖活動和預測恐怖風險有關。數據是他要處理的大量數據。我們的想法是能夠加速調查，使他們能夠發現傳統技術無法完成的實際隱藏關係和隱藏行為。

So AI, in this case, was playing a major role. In addition to being able to deal with a large amount of data and diversify data and also being able to do this in a very efficient manner in terms of user flows. So this is a very important win for us, and we are pleased to have another new customer, a large one. And also the others are wins from -- one of them is from another new customer. The other one is a new department of existing customers. So it's very good to see that the customers appreciate our technology differentiation and advanced technology.

因此，在這種情況下，人工智慧發揮了重要作用。除了能夠處理大量資料和使資料多樣化之外，還能夠在用戶流量方面以非常有效的方式做到這一點。因此，這對我們來說是一次非常重要的勝利，我們很高興有另一個新客戶，一個大客戶。其他的勝利也是來自──其中一個是來自另一位新客戶。另一個是現有客戶的新部門。因此，很高興看到客戶欣賞我們的技術差異化和先進技術。

That's great. And congratulations again on that large customer win. If I just turn to the financials for a second and probably a follow-up here for David. But one of the things that kind of struck when we were going through this is the spike in professional services revenue. And I just wanted to get a better sense. When we see pro serv revenues jump like this. Is it fair to think that, that is a reflection of the new customer wins that Cognyte is talking to here? Or is there something at play where you might have an incremental professional service benefit tied to servicing, let's say, existing customers. Can you help us think about that as well as potentially what benefited that professional services revenue during the second quarter here?

那太棒了。再次恭喜您贏得了大客戶。如果我只看一下財務狀況，可能是大衛的後續行動。但當我們經歷這種情況時，令人震驚的事情之一是專業服務收入的飆升。我只是想獲得更好的感覺。當我們看到專業服務收入像這樣激增時。公平地說，這反映了 Cognyte 在這裡談論的新客戶獲勝情況？或者是否有任何因素在起作用，您可能會獲得與服務（比方說，現有客戶）相關的增量專業服務優勢。您能否幫助我們思考這一點以及第二季專業服務收入可能受益的因素是什麼？

Yes. So in Q2, actually, we had slightly more revenue that's coming from professional services, and they came also with the 60% of gross margin. But again, like the majority of the revenue, 87% of the revenue came from software. When we -- looking from a trend perspective, you can have at a given quarter a little bit more professional services. But if you look at the H numbers, you will see that almost 88% or 89% of the total revenue came from software. So I don't think that it's a peak. It's just a fluctuation that may take place between quarter-over-quarter.

是的。因此，實際上，在第二季度，我們來自專業服務的收入略多，而且毛利率也達到了 60%。但同樣，與大部分收入一樣，87% 的收入來自軟體。當我們從趨勢的角度來看時，您可以在特定季度獲得更專業的服務。但如果你看一下 H 數字，你會發現總收入的幾乎 88% 或 89% 來自軟體。所以我不認為這是一個高峰。這只是季度與季度之間可能發生的波動。

As for the wins, the wins took place this quarter, but obviously, the revenue will be recognized over a future period. Usually, this type of deals that are large deals can recognize over multiple quarters. So it didn't impact Q2 revenue.

至於勝利，勝利發生在本季度，但顯然，收入將在未來一段時間內得到確認。通常，此類大型交易可以在多個季度內確認。所以這並沒有影響第二季的營收。

Got it. And one quick follow-up as well. I know that you guys are taking up the gross margins for the full year as well. That improvement that we're seeing, it seems to be a reflection of the growing software revenue mix. Is there anything else that you guys are doing internally to help that software gross margin? And I'm wondering if it's just a matter of tighter procurement from your vendors or engineering on your side to figure out a better way to drive efficiencies in your own cost in delivering these solutions to your customers? Anything there on the (inaudible) gross margins and what you guys are doing to drive that improvement would be beneficial as well? And then I'll turn it over to my colleagues.

知道了。還有一個快速跟進。我知道你們也在計算全年的毛利率。我們看到的這種改進似乎反映了軟體收入組合的不斷增長。你們內部還做了什麼其他事情來提高軟體的毛利率嗎？我想知道是否只是從您的供應商或您這邊進行更嚴格的採購來找出更好的方法來提高您向客戶提供這些解決方案的成本效率？ （聽不清楚）毛利率方面的任何事情以及你們為推動這項改進所做的事情也會是有益的嗎？然後我會把它交給我的同事。

So we are very pleased with the gross margin in H1 and Q2. And actually, we are very pleased that we are able to increase our gross margin to 68% for the full year, and it represents 520 basis points more than our initial plan.

所以我們對上半年和第二季的毛利率非常滿意。事實上，我們非常高興能夠將全年毛利率提高到 68%，這比我們最初的計劃高出 520 個基點。

Looking at the trends and what drives the gross margin, I think the gross margin is the clear evidence of our differentiated solution and how the customers appreciate the value we provided. Elad mentioned the deals that we win, and those are not in the revenue, but they consist with what we see in the market and how the backlog looks. We're seeing good backlog with the high quality that will allow us to drive gross margin. So from that perspective, this will be -- have also an impact in the future.

看看趨勢和毛利率的驅動因素，我認為毛利率是我們差異化解決方案以及客戶如何欣賞我們提供的價值的明確證據。埃拉德提到了我們贏得的交易，這些交易並不計入收入，但它們與我們在市場上看到的情況以及積壓訂單的情況相符。我們看到良好的積壓和高品質，這將使我們能夠提高毛利率。因此，從這個角度來看，這也會對未來產生影響。

When we're looking what changed, you could see that one of the things that changed this quarter is the professional services and it's basically as a result of actions that we took to improve our professional services cost structure to allow us to be in a better position. Overall, when we look at the gross margin, we're monitoring carefully if it's like from a cost perspective, but I think that the major thing that impacts gross margin is the ability to sell our solution as a premium solution, the customer demonstration of our appreciation for this value that allow us to sell it in the right pricing.

當我們查看發生的變化時，您可以看到本季度發生的變化之一是專業服務，這基本上是我們為改善專業服務成本結構而採取的行動的結果，以使我們能夠更好地位置。總體而言，當我們考慮毛利率時，我們會仔細監控是否從成本角度來看，但我認為影響毛利率的主要因素是將我們的解決方案作為優質解決方案進行銷售的能力，客戶演示我們對這種價值的讚賞使我們能夠以正確的價格出售它。

(Operator Instructions) And I'm not showing any further questions at this time. I'd like to turn the call back over to Dean.

（操作員說明）我目前不會提出任何進一步的問題。我想把電話轉回給迪恩。

Thank you, operator, and thank you, everyone, for joining us on today's call. Elad, David and I are planning to visit Boston and New York early next month and hope we can see some of you then. In the meantime, should you have any questions, please feel to reach out to me, and we look forward to speaking with you again next quarter.

謝謝接線員，也謝謝大家參加今天的電話會議。埃拉德、大衛和我計劃在下個月初訪問波士頓和紐約，希望屆時能見到你們中的一些人。同時，如果您有任何疑問，請隨時與我聯繫，我們期待下個季度再次與您交談。

Thank you. Ladies and gentlemen, this does conclude today's presentation. You may now disconnect, and have a wonderful day.

謝謝。女士們、先生們，今天的演講到此結束。您現在可以斷開連接，並度過美好的一天。