Cognyte at Oppenheimer Conference: Security Solutions in Focus

On Wednesday, 13 August 2025, Cognyte Software Ltd (NASDAQ:CGNT) presented at the Oppenheimer 28th Annual Technology, Internet & Communications Conference. Elad, the CEO, outlined ambitious growth targets while highlighting the company’s strengths in delivering sophisticated security solutions. Despite robust revenue goals, challenges remain in navigating complex market dynamics and growing competition.

Key Takeaways

• Cognyte targets $500 million in revenue by fiscal year 2028, with a 73% gross margin.
• The company emphasizes AI-driven solutions for security agencies to generate actionable intelligence.
• Sales cycles range from two to eight quarters, with deal sizes varying significantly.
• Expansion into the US market and other segments beyond security is a strategic priority.
• The competitive landscape includes both global players and internal solutions.

Financial Targets

• Cognyte aims to reach $500 million in revenue by fiscal year 2028.
• The company projects a gross margin of 73%.
• Adjusted EBITDA is expected to exceed 20%.

Operational Updates

• Cognyte operates in nearly 100 countries, employing over 1,500 people, with 800 dedicated to R&D.
• The technology stack processes chaotic signals into organized data, converting them into actionable insights.
• Solutions are deployed on-premise and in private clouds, with a growing trend towards cloud-based models.

Future Outlook

• Expansion in the US market is a key initiative.
• The company is exploring opportunities outside of security, aiming to maintain technology leadership.
• Deal sizes range from a few hundred thousand dollars to tens of millions, with a focus on partnerships and innovation.

Q&A Highlights

• Data sources include dark web data, social media, and criminal records.
• The platform is cloud-ready, but most deployments are on-premise due to security concerns.
• Professional services, including deployment and training, account for about 15% of revenue.
• Competitors include global companies like JSI and internal solutions.

Cognyte’s detailed presentation at the conference underscores its commitment to growth and innovation in the security sector. For a deeper dive, readers can refer to the full transcript below.

Full transcript - Oppenheimer 28th Annual Technology, Internet & Communications Conference:

Itay Kidron, Security Software Analyst, Oppenheimer: Okay. Welcome, everybody, and thanks for joining us on the third day of Oppenheimer’s virtual conference. So I guess good afternoon, I guess, at this point. My name is Itay Kidron, and I’m a security software analyst here at Oppenheimer. I’ve got the pleasure of hosting Cognite, more specifically Elad, the CEO, and David, the CFO.

The guys, Elad and David, are gonna give us a presentation about the company. And, of course, needless to say, we’d like to get all of you involved as well. And so feel free to post your questions, and I’ll be making sure to watch for the site and look for your questions and incorporate them in the discussion as we go. And so with that, Elad, David, thanks for joining us today. The floor is yours.

Looking forward to it.

Elad, CEO, Cognite: Thank you, Thay. Good morning. Good afternoon, everyone. Thank you for joining us today. Before I’ll start presenting Cognite, I may make some forward looking statements that are subject to risks as outlined in our filings with the SEC.

Maybe I’ll start with a big picture. The global security environment our customers face is more complex and fast moving than ever. Common terror accelerating. We do see that it’s becoming more global. The actually, more than 70% of organized crime groups are operating in more than three countries.

We do see that the borders between terror and crime are blurring. They use same smuggling routes. They do have fund similar funding resources, and, actually, some of them are cooperating, and the stack is high. We do see that the potential damage actually, the actual damage is over $2,000,000,000,000 a year. And this presents a high risk going forward and the threats for the security and the safety of our societies is growing.

And this is exactly where Cognite comes in. Our solutions deliver faster, more accurate decision making capabilities. We help organizations, primarily security agencies, to generate actionable intelligence in order to accelerate and enhance the investigation and operations. What it means is that we help them actually to be able to accelerate the speed, accuracy, and success rate of investigations and uncover insights in order for them to take the right decisions on time and neutralize threats. We deliver our solutions to customers globally and primarily security agencies such as law enforcement.

Law enforcement is the blue police. Actually, they’re fighting a crime. They have to get a warrant from court and investigate and put their hands on the bad guys. We also have military intelligence customers. Those customers need real time intelligence on the field during missions, and this has to be robust and real time analytics of data they have in order for them, first of all, to keep their themselves safe, but but also understand the environment around them.

We have customers in the national intelligence segment. National intelligence are usually those intelligence guys that are looking for potential threats that are coming from outside of the country, and those threats may become significant threats for the safety of the citizens and and and the and the forces and the assets of the country. And national security agencies, those agencies are actually focusing on threats, primarily terror threats, that are coming from inside the countries. All those organizations need technology in order for them to be able to accelerate investigations and make sure that they are successful in the missions. Our our customers actually are challenged on three fronts at the same time.

First is data. In order to generate intelligence, you need to analyze data. And we all know that data is growing in volumes and diversity and very fast. And this presents actually a challenge for our customers that needs first to be able to analyze lots of data and do it very efficiently in near real time with strong analytics. The second one is the adversaries themselves.

Actually, are becoming more sophisticated. They’re well funded. They’re well organized. They know how to hide better, and it’s becoming harder and harder for security agencies to put their hands on the bad guys. And the technology is running fast, and this presents opportunity but also risk to our customers.

Opportunity because if they are ahead of the curve and utilize the new technology faster than the bad guys, of course, they’ll be in an advantage position in order for them to be able to find the bad guys and put their hands on them. On the other side, if they are lagging behind, the bad guys are also using technology. For example, AI, in order to generate fake identities, fake entities, and and hide better. So this is actually a race between the security agencies and the adversaries. We offer solutions that enable agencies to investigate, identify, mitigate, and prevent threats.

Actually, if you look at the the the overall threat environment, there are many many different use cases, and you have only a few examples here, that our customers have to address. It’s counter terror. It’s organized crime. It’s financial crime that is also in the cryptocurrency environment, which is anonymized. It’s a violence.

It’s a cyber threats. It’s military threats, border control, illegal immigration, drug smuggling, trafficking, human smuggling, many, many different use cases our customers have to deal with. But all of them need to be able to analyze data in a very sophisticated manner in order to investigate what already happened and actually understand and put their hands on the bad guys, but more importantly, sometimes to identify potential threats and mitigate them before they unfold. And this allows them also to prevent threats. We all hear in the news the threats that happened, okay, that materialized and created damage.

Unfortunately, lives are lost because of that and also, financial damage is significant. But we don’t hear many many threats that, have been identified and prevented before, they unfold. So, when customers have technology, they have the advantage and they can do a lot in order to keep the the societies and also the assets safe. Now let’s look at the three layers that form the backbone of our solutions. So it start with signal processing.

Actually, we take chaotic, sometimes encrypted signals and turn them into organized data, and then we convert the data into insights and the insights into action by the intelligence, and it’s becoming more and more complicated. If twenty years ago, each person or each bad guy had one identity, which is his phone, a wire wire phone, Today, have many different identities, many virtual identities, sometimes fake. The funding sources are anonymized, and, actually, customers have lots of data that has no meaning unless you use a sophisticated technology in order to uncover insights out of it. Another challenge was that lots of data converted and became encrypted, And encryption actually helps the bad guys better hide. And today with sophisticated analytics and AI, you can generate we can generate actually or unhide hidden connections, hidden relations, hidden identities in order to convert this signal processing later on to data and actionable intelligence.

And when we say actionable intelligence, eventually, the those security agencies have to take the the right decisions on time in order to secure the societies. And if they get the insights on time, and we’ll discuss immediately what I mean by insights, They can save lots of lives and actually mitigate financial damage. Together, actually, those three layers I just showed you give our customers the ability to conduct complex, mission critical investigations with speed and confidence, and we see data differently. Before, just mentioned that, actually, customers have to get actionable insights in order for them to do the job or be successful in the missions. So what they need to do, the w and the h questions.

Who is going to do what, when, with whom, where, and why, what’s the rationale behind it, what are the motivations, what are their funding sources. So they have to answer many, many different questions in order to be able to mitigate risks and and uncover threats and actually neutralize it before it unfold. So actually, the ability of sophisticated technology to take signals that have no meaning and convert it into organized data and convert the data later on to actual insights gives the customers, our customers, security agencies, the ability to answer those questions. And if they have the answers for those questions, actually, they can mitigate risks. Now maybe a bit about Cognite, the company itself.

So we are in this market for over three decades. We are operating in nearly 100 countries. We have hundreds of customers. Overall, we have about 1,500 plus employees, and a significant amount of them are r and d experts. Actually, 800 employees are in r and d.

And we are located in 13 global offices, out of which six are global r and d centers. So as you can see, we are global, and we have a long track record in this in this market. But what really sets us apart is our real world experience. Our solutions have saved many of many lives over the years, and you can see that it’s not just about technology. It’s also three decades of breakthrough technology, but we also have veterans coming from different security agencies, from law enforcement, national security, employees that know how investigation looks like, what are the pains of our customers, what they need today, what they may need potentially in the future.

And this combination of domain expertise and technology is very important. In addition to that, we are working with many customers, including tier one customers, very sophisticated and vast customers. So we have the luxury to have our customers as our partners, design partners, share with them our road map, get the feedback, and actually purify and focus the technology development and evolvement to exactly what customers need. We are also implementing new technologies frequently, including, of course, the AI, machine learning in order to gain two things. The first advantage that is generated by using AI is to make the utilization of our technology much more efficient, which means that actually simple users can query the solution with natural language rather than being required to understand the data the the data exactly and to have to query the solution in a very sophisticated manner.

So, actually, many simple user can do a lot of work much more efficiently and faster and get into conclusive outcomes successfully. The other side of AI is actually helping us to uncover more hidden insights. I mentioned before that some of the signals are encrypted and we cannot decrypt, But we can run analytics on top of it to find relations hidden relations and connections, so this is done by AI. Another example is the anonymization of entities that are running transactions in a cryptocurrency environment. This is also done using AI.

And we are partnering with our hundreds of customers around the globe, deliver to them a very advanced technology, but also learning from them continuously what they need in order to be able to maintain our leadership position. And when I say partner with our customers, it it includes also being able to engage with them frequently, but we also have an intelligence summit that we invite all our customers. You know, there are usually industry conferences that many different vendors and many different customers are coming to the same plans to see what what’s new. In addition to that, we have our own global intelligence summit where we cognite only invite our customers globally to join us in order to first to get the idea of what’s new, the the latest and greatest releases that we have, but also learn from them. And the recent one was back in November 24 when 300 guests joined us from nearly 70 countries, and this kind of events keeps us highly engaged with customers, but also give us the ability to really understand their current and future needs.

In back in April year, April 8, we conducted our investor day. This was an investor day in which we were able to present the market, the technology, and also the long term targets. So our fiscal twenty eight financial target is to become half a bit half a million dollar billion dollar revenue company with a gross margin of 73% and adjusted EBITDA to cross the 20%. So as you can see, this reflects actually continuous top line growth, but also margin expansion. We have financial leverage in our model, and we are going to grow to $500,000,000 in top line, but the profitability will grow much faster.

And this is the target for fiscal twenty eight. Closing on what matters most, our customers on the frontline keeping the world safe. The testimonial speaks volume about our impact. You can read it. Actually, our customers are saving lives every day.

They are preventing financial damage and damage to critical assets every day, and they do a lot of it using our technology, and we are really happy to be in this this market and to help our customers to achieve successful outcomes. And this is actually summarize our purpose. Our purpose, Cognite’s purpose, is to help our customers make the world a safer place. We have proven track record of impact, long standing customers. Some of them I know personally for over two decades.

They are with us for many years. They continue to expand with us in addition to acquiring new logos that we have, and we actually, we’ll we’ll restless drive for innovation. So so, actually, it’s a combination of understanding the market, engaging with customers, delivering high value, continue to evolve and innovate, and make sure that the customers are successful in their mission. And that’s what we do at Goodnight. With that, I concluded the presentation, and we can move to q and a.

Thank you all.

Itay Kidron, Security Software Analyst, Oppenheimer: Elad, if you can keep the slides on there was go back to the third of this fourth slide that shows your the product, the three layers of your product. I I wanna make sure I understand the stack, more accurately. Yeah. Specifically, can you elaborate a little bit about the technology that you’re using? What are the types of signals that you’re collecting?

Is your architecture some sort of a data lake architecture that collects and creates some baselines of behaviors? And try to help me understand the fundamental technologies that are used in each

David, CFO, Cognite: and every one of these layers.

Elad, CEO, Cognite: Sure. So actually our customers different customers have different data sources. Some of them is less regulated, but generally speaking, customers have many different data sources and I can give you examples. They have data coming from the dark web. They have data coming from social media.

They have data coming from their own databases, criminal records, vehicle records, weapon holders records, etcetera. They have data coming from historical investigations they’ve done. They have forensics data that they have, actually devices that they put their hands on and actually took data out of it. They have communication, telcos data. So there are many, many different data sources that our customers have.

Some of the data sources are structured like databases. Criminal record is database with structured forms. And some and other data sources are unstructured. It’s video, it’s images, it’s, you know, it’s a type of data that is unstructured, and you have to run engines in order to understand what’s inside. So when we say signal processing, signal could be data coming from telcos, for example.

Okay? It’s signals that some of them the metadata is encrypted, and actually customers need to know who is talking to whom, who is part of an organized criminal group, and they have to connect the dots. So they have to take those data sources that they have, the structured ones and the unstructured ones. In addition to that, they have to analyze what’s inside and be able to understand that one piece of data here is connected to one piece of data there. And then they get the intelligence picture in order for them to be able to take actions.

Itay Kidron, Security Software Analyst, Oppenheimer: Got it.

Elad, CEO, Cognite: Signals could be telcos, could be pieces of data that has no meaning, and then there are data sources that are structured. The combination of those is fused in a very smart manner. Actually, we have a a fusion layer takes all data sources and makes sense out of it, and then the analytics layer is running on the data that was structured in a certain way. And then customers can make sense out of it and get the real insights that they need.

Itay Kidron, Security Software Analyst, Oppenheimer: And is this deployed in the cloud, or can this be deployed in a private data center that those customers have?

Elad, CEO, Cognite: We offer flexible deployments. Actually, today, given that most of our customer security agencies, they prefer to host their data given the sensitivity on prem. I do believe that over time, the cloud vendors will provide, you know, cloud space that is secured enough for governments to be to feel comfortable with and to move. Right. But for now, it’s on prem.

The technology itself is cloud ready. So if the customer has a private cloud in his premises, we can deploy it on private cloud. If it’s a standard hardware, we can deploy it on standard hardware. And then public cloud will be relevant, secured public cloud. The the platform is ready for that as well.

Itay Kidron, Security Software Analyst, Oppenheimer: Got it. And how much of the solution as you provided to customers is how shall I call it? A cookie cutter, every customer gets the same thing versus there’s there’s a need for a lot of customization. Like, you know, I’m sure, like, for example, a weapon database, right, that you mentioned. I’m sure for every country, it just looks very different, that database, no matter what.

Right? So I’m trying to think how easy is it to implement this quickly within one customer to another, or it requires a certain amount of services and integration and customization to make this useful.

Elad, CEO, Cognite: Yes. So the the technology is productized, and the layer of the data and the the data connections is very flexible and configurable. So the vast majority of the of the solution is is generic and productized. So if you look at our revenue streams, you’ll see software software services and professional services. Actually, the professional services, which is deployment, training, is about 15%.

Okay? So you can imagine that most of it is productized and not customized. We do have some customizations for key customers when it’s required in order to keep them with us for many years, and they’re with us for many years and continue to buy from us. The repeat business is very strong. But generally speaking, it’s productized, and the gross margin is also reflecting it.

I mean, the gross margin is over 70%. It’s not a it’s not a customized one time projects for each customer. A project. Got

Itay Kidron, Security Software Analyst, Oppenheimer: it. Can you talk about the go to market? And one of the questions I’m getting here is around go to market motion. Can you explain the go to market motion and and how long sales cycles are in in this in this market?

Elad, CEO, Cognite: Yes. So first of all, we do have the flexibility to allow customers to start with point solutions, which means a small solution by capacity that actually address one, two use cases and start with the deal that is about a few hundreds of k dollars. K? And it goes up to tens of millions of dollars. If you look at our earnings calls, I I shared very large deals, but also very small deals that are coming from new logos that they start small and and expand over time.

So it varies the deal size varies between a few 100 k dollars to tens of millions of dollars. The sales cycle is between two quarters to six to eight quarters when it comes to a very large solution that involves lots of data, and also customer needs to prepare himself for that. Usually, the customer needs to prepare the anti the IT environment and also to get the data available for us, and then we can deploy. So it takes time for in the sales process to define everything, to better understand what they need exactly, and then the deal comes. So it’s between two quarters to a six to eight quarters.

That’s the that’s the more or less sales cycle timeline.

Itay Kidron, Security Software Analyst, Oppenheimer: When I think about the the space that you’re kinda stepping into, how often are you walking into a situation where your customers have tried to make something by themselves, you just couldn’t get that going versus

David, CFO, Cognite: there’s a complete lack of knowledge, don’t know how to do it, we just need someone to please help and stand it up for us because we don’t know where to start.

Elad, CEO, Cognite: Yes. So, actually, some customers, advanced customers had their own r and d centers or used their own IT capabilities in order to try and build solutions that help them in some way. It doesn’t work anymore, and the reason it doesn’t work anymore is because the technology is running so fast. The data is growing so fast, and it’s very difficult for one customer to invest in order to keep pace with the technology and with the data that are evolving very fast. Right.

So they need to come to companies like like us and and get the technology that is proven in Huddl with hundreds of customers that is ready, that has all the governance and security, that has the entire investigation layer. So so it’s very difficult to to okay. If it’s NSA, they can do it their their own, I assume. Okay? But if it’s a usual customer global customers that are coming from, you know, standard countries, National Security National Agency, it’s very difficult for them to do what we do.

We have the luxury to talk to many customers, to build a very strong road map, to predict what will be the changes in the environment, in the technology environment, in the data environment, and to be ready ahead of time. For one customer to do it for himself, unless he’s very huge with very deep pockets, it’s also impossible almost impossible. And for that reason, we see customers with HomeCon solutions moving to to us. Interesting.

David, CFO, Cognite: I’m just wondering if there’s have you thought about more, how shall I call it, commercial applicability of your technology with commercial customers and not necessarily national defense agencies, state nations, and and, you know, police like type of agencies? How do all? Is there a commercial angle,

Itay Kidron, Security Software Analyst, Oppenheimer: yeah, to this as well?

Elad, CEO, Cognite: The product itself was initially designed to be IT ready, cloud ready also for enterprises. So technically speaking, we designed it in a flexible manner in order for us to be able to support other segments outside of the security market over time. For now, today, our focus is security agencies, as I mentioned before, globally. Having said that, we do explore other use cases outside of the security market that our product can fit. So we are checking what are the potential markets, whether they have the budgets to pay for this kind of technology, and whether we have the access of domain expertise either inside or maybe outside in order to to address it.

There is no concrete plan for now, but the exploration is in process.

Itay Kidron, Security Software Analyst, Oppenheimer: Got it. Okay. So TBD on that. David, can you talk about the business model when you deploy with a customer? You charge them by what?

David, CFO, Cognite: So, actually, our offering itself is mainly perpetual, and the reason that it’s perpetual is because in most of the cases, we’re talking about an on prem solution and giving the sensitivity of the solution and the and the security organization needs. Although, we do see a trend that more and more agencies are considering to move to the cloud and move us to this type of solution. But currently, most of the deployment are on prem and the model is perpetual model. We do have an offering in subscription in which we also in incentivize our sales organization. This type of transition may take place, but it will take a long time.

So the pace we don’t know what will be the pace, but it may take a longer period. And the offering itself the the way that we generate revenue, we have three types of three streams of revenue. We have our software revenue, which is mainly software embed the software and some term based. Usually, it’s recognized based on delivery acceptance or percentage of completion. And the other revenue is our software services, which is the vast majority is support contract, which recognize over time.

And we have a small portion of less than 15% of professional services and other, which recognize upon the service we provide.

Itay Kidron, Security Software Analyst, Oppenheimer: Got it. But the perpetual component, is that set by the amount of data that gets processed by your system? What what decides if I pay a million dollars or $10,000,000 to you?

David, CFO, Cognite: Pricing is mainly depends on data capacity and functionality. So this is the major impact on the on the on the pricing. You can see that the customer may do expansion of few million dollars. It could be even above $10,000,000. The set the the size of the deals may be few 100 of thousands of dollars to even few millions of dollar, depend on the deployment itself, where the what portion of the platforms they hold, and how much they would like to process within our solution.

Itay Kidron, Security Software Analyst, Oppenheimer: Got it. Elad, if you and I talk, say, three years down the road, in what way would you think the company would look differently than it does today?

Elad, CEO, Cognite: First of all, we have an an initiative to expand presence in The US. Historically, as part of Verint, we didn’t focus on The US. We’ve decided as a stand alone company to focus on The US. So we hired our own team in The US. We’re working on on on acquiring partners network in The US.

We already started and started local law enforcement agencies. We want to move forward also with federal agencies. We already engaged with some of them. So The US is one vector. Another vector is technology wise to maintain leadership in a way that we are able to uncover more hidden insights out of the same datasets of our customers, and this will give us the opportunity to come up with very strong uplift path for the entire customer base.

This is the second one, so product and technology. And the last one is we are an exploration of other market segments. I don’t know to predict how long it will take, but it might be that in this time frame, we’ll be able to several segments that are not necessarily the the ones that we serve today. So Mhmm. The US market, market leadership, maintain market leadership, and acquire more new customers globally, and maybe other segments that we can serve.

Itay Kidron, Security Software Analyst, Oppenheimer: Got it. Makes sense. Maybe we’ll wrap up with the competitive front. What’s out there, really? I mean, I understand that some try to do it themselves and fail, but are there other solutions available from similar competitors out there in the world?

How does that look like?

Elad, CEO, Cognite: So given that we are global and we address many different use cases, and we also support many different departments within the units, is the operational units, the special forces, the intelligence headquarter. So we do see in certain territories and in certain use cases, different competitors. We can see competitors global competitors like, like, from time to time, like, in certain cases, like, JSI. So there are different I would say that the market is very fragmented because there are different use cases and there are different geographies. And given that we do global operation and many use cases, it is changing from one territory to the other.

And as you mentioned before, ongoing solution is also a kind of competition that we are converting customers from in house solution to solutions of ours.

Itay Kidron, Security Software Analyst, Oppenheimer: Fantastic. That’s great. Guys, I I appreciate it. Super interesting. I really appreciate your time, and thanks for presenting the company here today.

And good luck, and looking forward to working with you and connecting with you in the future.

David, CFO, Cognite: Thank you. Thank you.

Itay Kidron, Security Software Analyst, Oppenheimer: Thanks, guys. Have a good one.

Elad, CEO, Cognite: Thank you.

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