Cognyte Stock Jumps On Divesting Assets

  • Cognyte Software Ltd CGNT agreed to sell its Situational Intelligence solutions, which are part of Cognyte's Threat Intelligence Analytics offering, to the Volaris Group for $47.5 million plus a performance-based earn-out of up to $35.0 million
  • The transaction will likely close in Cognyte's fourth quarter.
  • "Given the overall environment this year, we decided to increase our focus on fewer use cases in order to accelerate growth and improve margins, and we believe we will benefit from sharpening our focus," Cognyte CEO Elad Sharon said.
  • For the fiscal year ending January 31, 2022, excluding the divested assets in all periods, the revenue would have been $439.5 million, representing 9.9% year-over-year growth.
  • In the fiscal year's first half, the divested assets represented around 10% of its total revenue. 
  • The divested assets include products and intellectual property, customer contracts, and employees.
  • Approximately 10% of its employees will likely be transferred with the business across R&D, Sales and Marketing, Operations and Services, and G&A.
  • Cognyte reported a second-quarter FY23 non-GAAP revenue decline of 30.1% year-on-year to $81.3 million, missing the consensus of $92.5 million.
  • Non-GAAP EPS loss of $(0.04) beat the consensus loss of $(0.17).
  • Price Action: CGNT shares traded higher by 13.40% at $3 on the last check Wednesday.
Market News and Data brought to you by Benzinga APIs
Posted In: NewsPenny StocksAsset SalesMoversTechTrading IdeasBriefswhy it's moving
Benzinga simplifies the market for smarter investing

Trade confidently with insights and alerts from analyst ratings, free reports and breaking news that affects the stocks you care about.

Join Now: Free!