HERZLIYA, Israel – Cognyte Software Ltd. (NASDAQ:CGNT), a global leader in research analytics software, announced that it plans to appoint a new independent director with relevant U.S. experience and enhance its disclosure practices. The company’s Board of Directors made the announcement in a letter to shareholders ahead of its annual meeting scheduled for September 4, 2024.
In the letter, the Board urged shareholders to vote in favor of incumbent Chairman Earl Shanks and CEO Elad Sharon, as well as proposed changes to the CEO’s compensation plan. The Board emphasized the company’s return to growth and profitability, with a total shareholder return of 55% over the past 12 months and recently raised expectations for fiscal 2025.
The Board’s announcement comes amid a challenge from Value Base Fund, a shareholder seeking to replace Mr. Shanks with its own candidate, Tal Yaacobi. The Board expressed concern that Mr. Yaacobi lacked relevant experience in software, defense, intelligence or other relevant industries and warned that his election could disrupt the company’s momentum.
The Board’s position was supported by Institutional Shareholder Services (ISS), a leading proxy advisory firm. ISS recommended that shareholders vote in favor of the re-election of Mr. Shanks and Mr. Sharon, and in favor of the CEO compensation plan, noting that Value Base had not provided a compelling rationale for a change in management.
The Board also committed to improving transparency, including developing disclosures to provide shareholders with greater insight into the company’s activities. The Board emphasized that approximately 80% of the CEO’s compensation is risk-bearing and highly dependent on the company’s performance, in line with the interests of shareholders.
Shareholders were directed to the company’s website for more information and were provided with contact information for the company’s proxy solicitor, Saratoga Proxy Consulting, for assistance with voting.
Cognyte Software Ltd. is recognized for providing research analysis software that supports government and other organizations in their efforts to ensure safety and security. This news is based on a press release from the company.
In other recent news, Cognyte Software Ltd. reported significant year-over-year growth in both revenue and gross profit for the first quarter of fiscal 2025. The company’s revenue increased 13% to $83 million, while gross profit saw an even larger increase of 17%. Cognyte also raised its outlook for fiscal 2025, predicting revenue to increase 10% year-over-year to approximately $344 million.
Cognyte recently confirmed that it has received a nomination from Value Base Ltd., a shareholder. The board and the nomination committee will review the candidate proposed by Value Base and their recommendation will be shared with shareholders in due course.
The company also secured a $10 million follow-on order from a national security agency in the Europe-Middle East-Africa (EMEA) region, demonstrating customer satisfaction with Cognyte’s solutions. The company’s use of AI technology is driving demand for its solutions and helping to drive more efficient and effective investigations.
These are recent developments that highlight the company’s ability to capitalize on market opportunities and continue its trajectory of sustainable growth and improving profitability.
InvestmentPro Insights
As Cognyte Software Ltd. (NASDAQ:CGNT) prepares for its annual meeting, financial figures and insights from InvestingPro analysts provide a detailed picture of the company’s current status. With a market cap of $535.61 million, Cognyte’s financial health appears robust, with more cash than debt on its balance sheet. This is a reassuring sign for shareholders concerned about the company’s financial stability.
InvestingPro data shows that Cognyte has experienced 8.02% revenue growth over the past twelve months as of Q1 2025, with quarterly revenue growth of 12.9% in Q1 2025. This growth trajectory supports the Board’s statement about the company’s return to growth. Furthermore, Cognyte’s gross profit margin of 69.39% demonstrates its ability to maintain profitability at an operational level.
Despite the fact that Cognyte does not pay a dividend, which is in line with the company’s focus on reinvestment and growth, the stock has delivered a strong return over the past year, with a total shareholder return of 59.53%. This is in line with the 55% return stated by the Board of Directors and shows the company’s strong performance in the market. However, it is important to note that analysts do not expect the company to be profitable this year, which may be a point of consideration for investors looking at long-term profitability.
InvestingPro Tips indicate that two analysts have revised their earnings estimates upward for the coming period, indicating a positive outlook for Cognyte’s financial future. In addition, InvestingPro offers a range of other tips to better understand Cognyte’s financial health and outlook. For those interested in further insight, six additional InvestingPro Tips are available for Cognyte at https://www.investing.com/pro/CGNT.
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