HERZLIYA, Israel - Cognyte Software Ltd. (NASDAQ:CGNT), a global leader in investigative analytics software, announced its intention to appoint a new independent director with relevant U.S. experience and to enhance its disclosure practices. The company's Board of Directors made the announcement in a letter to shareholders ahead of the 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 for the proposed amendments to the CEO's compensation plan. The Board highlighted the company's return to growth and profitability, citing a 55% total shareholder return over the past 12 months and recently raised guidance for fiscal year 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 concerns that Mr. Yaacobi lacks the relevant experience in software, defense, intelligence, or other pertinent industries and warned that his election could disrupt company momentum.
Support for the Board's position has come from Institutional Shareholder Services (ISS), a leading proxy advisory firm. ISS recommended that shareholders vote for the reelection of Mr. Shanks and Mr. Sharon, and for the CEO compensation plan, stating that Value Base had not provided a compelling rationale for board change.
The Board also committed to improving transparency, including evolving disclosures to provide shareholders with greater insight into the company's operations. The Board emphasized that about 80% of the CEO's compensation is at-risk and heavily dependent on the company's performance, aligning with shareholder interests.
Shareholders were directed to the company's website for more information and were provided contact details for the company's proxy solicitor, Saratoga Proxy Consulting, for assistance with voting.
Cognyte Software Ltd. is recognized for providing investigative analytics software that supports government and other organizations in their efforts to ensure safety and security. This news is based on a press release statement from the company.
In other recent news, Cognyte Software Ltd. has reported significant year-over-year growth in both revenue and gross profit for the first quarter of fiscal year 2025. The company's revenue rose by 13% to $83 million, while gross profit saw an even larger increase of 17%. Cognyte has also raised its outlook for fiscal year 2025, projecting a 10% year-over-year increase in revenue, amounting to approximately $344 million.
Cognyte recently acknowledged the receipt of a board nomination from shareholder Value Base Ltd. The board and the nominating committee will review the nominee proposed by Value Base, with their recommendation to 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, reflecting the customer's satisfaction with Cognyte's solutions. The company's use of AI technology is driving demand for its solutions, aiding in more efficient and effective investigations.
These are recent developments that highlight the company's ability to capitalize on market opportunities and maintain its trajectory of sustainable growth and profitability improvement.
InvestingPro Insights
As Cognyte Software Ltd. (NASDAQ:CGNT) gears up for its Annual Meeting, the financial metrics and analyst insights from InvestingPro paint a detailed picture of the company's current standing. With a market capitalization of $535.61 million, Cognyte's financial health appears robust, holding 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 an 8.02% revenue growth over the last twelve months as of Q1 2025, with a quarterly revenue growth of 12.9% in Q1 2025. This growth trajectory supports the Board's statement regarding the company's return to growth. Moreover, with a gross profit margin of 69.39%, Cognyte demonstrates its ability to maintain profitability at the operational level.
Despite not paying dividends, which aligns with the company's focus on reinvestment and growth, Cognyte's stock has yielded a high return over the last year, with a 59.53% total shareholder return. This is consistent with the Board's mention of a 55% return, showcasing the company's strong performance in the market. However, it's 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 upwards for the upcoming period, suggesting a positive outlook on Cognyte's financial future. Additionally, InvestingPro offers a range of other tips for a more comprehensive understanding of Cognyte's financial health and prospects. For those interested in further insights, there are six additional InvestingPro Tips available for Cognyte at https://www.investing.com/pro/CGNT.
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