Cognyte Software Ltd CGNT is witnessing an increase in recurring revenues. In the fourth quarter of fiscal 2026, recurring revenues were up 5.6% to $50 million, representing 47.1% of total revenues. CGNT provides data processing and AI-driven investigative analytics solutions primarily to governments and law enforcement agencies.
Increasing recurring mix highlights a gradual shift toward more predictable revenue sources and is likely to boost revenue visibility. Recurring revenues at Cognyte are primarily driven by support contracts, as well as sub time-based and SaaS subscription offerings.
A few days back, CGNT announced that it won a $20 million plus, three-year subscription contract with a “long-standing customer” in the Europe/Middle East/Africa region, underscoring both demand visibility and customer stickiness.
A key supporting metric is remaining performance obligations (“RPO”). Total RPO stood at $557.2 million, with a backlog of $433.4 million at the end of fiscal 2026. Total RPO is the sum of contract liabilities and backlog.
Cognyte Software Ltd. Revenue (Quarterly)
Cognyte Software Ltd. revenue-quarterly | Cognyte Software Ltd. Quote
Cognyte’s strong repeat business further complements this trend. The company delivered double-digit revenue growth, with fiscal 2026 revenues rising 14.1% year over year. Demand from repeat customers, as well as increasing new customers, cushioned the top-line performance. Management noted that the installed base forms a significant portion of revenues, highlighting customer stickiness.
As a result, the company now expects fiscal 2027 revenues to be $448 million (+/-3%) compared with $400 million in fiscal 2026. However, macro uncertainty, competition, rising operating expenses and dependence on government spending cycles remain concerns.
Mapping the Competitive Terrain
Simmering geopolitical tensions are giving rise to complex and massive volumes of data, driving demand for investigative analytics solutions. While peers such as Palantir PLTR have a large share of the market, Cognyte is steadily closing the gap.
Palantir’s software platforms – Gotham, Foundry, Apollo and AIP – offer the infrastructure that customers need to integrate data and operations and run their software on any environment. First-quarter revenues surged 85% year over year to $1.633 billion, buoyed by strong momentum in the U.S. business. PLTR closed 47 deals of at least $10 million, 72 deals of at least $5 million and 206 deals of at least $1 million in the last reported quarter. For 2026, PLTR raised its revenue guidance and now expects the metric to be between $7.65-$7.662 billion.
Elbit Systems ESLT is another Israel-based company that develops innovative solutions across several domains, including cybersecurity. Through its C4I and Cyber segment, ESLT delivers command, control, communications, computer, intelligence, surveillance and reconnaissance (C4ISR) systems along with data links and radio communication systems, among others. It has four other reportable segments: Aerospace, Intelligence, Surveillance, Target Acquisition and Reconnaissance and Electronic Warfare, Land and ESA.
For 2025, the company reported revenues of $7.9 billion, with $931 million coming from its C4I & Cyber unit. Revenues from the unit surged 16% year over year, driven by higher sales of radio systems and command and control systems in Israel and Europe.
CGNT Price Performance, Valuation & Estimates
Shares of Cognyte have lost 2.7% in the past month compared with the Internet-Software industry’s decline of 5.4%.
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Regarding the price/book ratio, CGNT is trading at 3.13, lower than the sector’s multiple of 4.16.
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The Zacks Consensus Estimate for CGNT’s earnings for fiscal 2027 has been significantly revised upward over the past 60 days.
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CGNT currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
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This article originally published on Zacks Investment Research (zacks.com).