Great. And thank you to everyone for joining us today. My name is Mike Cikos. I'm the lead analyst here covering infrastructure software. And I'm proud to say that we have with us the management team from Cognyte, CEO Elad Sharon and CFO David Abadi. So thank you to both of you guys for joining us today. Thank you, Mike. Just for the audience who's tuned in, while we have the management team here, obviously, I want to best serve your time and interests. There should be some Q&A function. So if you want to lob in questions to the team while we have them, feel free. We'll make sure we get to that. If it's easier for you to email me, I'm at mcikos@needhamco.com. All right, logistics out of the way. Thank you guys again for joining. First, just to level set, because I feel like we're all coming out of the 3Q earnings cycle that just happened. I know that you guys have a little bit more time before we get those numbers, but maybe if we go back to 2Q. As a refresher for some of the clients here, can you just start high level? What some of the key metrics or takeaways were from that release? Yeah, thanks, Mike. So the positive momentum continued in Q2, and it was another strong quarter. Revenue came in at $84 million, and it's reflecting 10% year-over-year growth. Gross profit grew faster than revenue at 13%. And also, EBITDA came at $8.3 million, representing a significant year-to-year growth. Overall, it represents the leverage we have in our model. Also, we continue to see strong customer traction and healthy demand. Actually, we recently shared significant wins. Our visibility is good. Our backlog is good, reflected in a very strong CRPO. And our current revenue is also growing. As a result of the market environment and the strong CRPO, we again raised our full-year outlook. And we now expect to be $347 million at the midpoint, which represents 11% year-over-year growth, with EBITDA of $25 million compared to the initial guide of $19 million. We continue to expect strong cash from operations of $37 million. Overall, the strong momentum continues. Excellent. And I know we're going to hit on a number of those factors over the course of the fireside as well. But that leverage and the sustained execution has been something that's, I guess, we've been building on that now for a number of quarters here. I think if I turn to the guide, let's start with revenue first. Obviously, you just said. But 11% revenue growth is what we're looking for this year, maybe to help investors better understand. But what visibility does Cognyte have into that 11% growth? And maybe what are some of the key metrics that you guys are evaluating when determining that outlook? Yeah, so when looking at our guidance, we look at a few factors. First of all is the current performance, and then the CRPO, the recurring revenue, and the demand environment. So all those factors are reflected in our guidance. And if you look one by one, we had a strong H1. We ended Q2 with a strong CRPO of $320 million. The recurring revenue is also growing, and it's now representing about 55% of our revenue. And we continue to see healthy demand. And this gave us the confidence level to raise our guidance. Great. And I know another element of this business, too, is it's not just those perpetual licenses, but you guys obviously have the support contracts behind them, right, which must give you greater visibility and predictability. Is there any way to think about the renewal cycle here for this business? Like, is that renewal pretty steady from one year to the next, or does it show any swings one way or the other? Yeah, so we sell our solutions primarily as perpetual license. And the reason for that is actually the government purchasing behavior. And usually, when a customer buys a perpetual license, and given that we are delivering mission-critical solutions, it comes with a support contract. And usually, in a typical deal, customers will buy the perpetual license together with one, up to three support years. And after this period of time, they usually renew. Sometimes within this period of the support contract, customers already start upgrading and expanding. Of course, this depends on their requirements and pressure. So if you look at support and subscription, which are subject to renewals, this actually reflects the recurring revenue. And recurring revenue is growing. In Q2, it was $47 million versus $41 million last year. And this indicates, I believe, the customer trust and the high value we deliver to them. Excellent, and I know another piece that you had spoken to as well beyond just those leading metrics was the demand environment that you guys are seeing, too. Maybe you can help us think about the demand environment from where we sit today, and just for background, obviously, it remains an uncertain spending environment, especially in the private sector, but it feels like the agencies and governments you guys are working with might be a little bit more insulated. Can you talk to the demand environment you're seeing from your customer base today and how that's playing out from a ground view? Yeah, so if we look at the demand drivers, they are strong, and they are actually intensified, so one demand driver is related to the bad guys, the adversaries. Actually, they are becoming more sophisticated, using more advanced technology, better hiding, organized, better funded, and this makes the challenge of our customers to become harder to detect and actually prevent threats. The second demand driver is related to the data customers have to analyze, so data is growing in diversity and volumes, and customers have to continue and expand their solutions over time, and actually, we gave a few examples in press releases of large deals from recent periods, and the third one is related to the technology disruption. Actually, technology is evolving, and it can be a challenge, but also an opportunity to our customers. If you take AI as an example, customers that will use AI will have better efficiency because they can use natural language in order to query the system or the solution in a simple way, but it also helps under the hood to uncover more hidden insights, so those demand generators continue to grow, and the pressure on our customers continues to grow, and for that reason, the demand is growing. The traction with our customers is very strong. We do meet our customers frequently. We are global. We have our sales force all around. We use also resellers. So in general, we do see a very healthy market, a very healthy demand, and it's reflected in our CRPO and RPO. Terrific, and that's the top line star as far as guidance with revenue. If I jump to EBITDA, and maybe for David, because it's unfair I haven't asked you a question yet, but when thinking about that EBITDA guidance of about $25 million at the midpoint, it implies about a 7% EBITDA margin, meaningful expansion year-on-year. Can you help us understand the levers that Cognyte has behind this margin improvement? Yeah, so we have leverage in our financial model. And if you think what created this leverage, it's, I would say, two main pillars. One of them is the gross margin, and the other one is the R&D. And if you look at our result over the last few quarters, you will see that we demonstrate this leverage quarter-over-quarter. So from a gross margin, you can see that the gross profit grew faster than the revenue. So if we take just H1 for the reference, in H1, the top line grew by 11%, while gross profit grew by 15%. And we are able to do it by strong software gross margin and professional services gross margin that's improving. If I'm looking at overall OPEX, we have also there some leverage. And many of the leverage can come from the R&D to revenue ratio. And if you look at H1 result, the adjusted EBITDA for the first half was $13 million versus almost zero or break even in the previous year. So we are able to drive most of the top line to the bottom line. And when we look at this year, as we mentioned, we guided adjusted EBITDA to be $25 million, which is almost three times what we had last year. Last year, we ended with $9 million. Now we are at $25 million guiding. And we believe that this leverage will continue with us for the future. OK, great. And I know we're highlighting specifically gross margin and R&D. Maybe on the R&D front, can you talk about how you guys view that line item, the potential to maintain, if not demonstrate further leverage on that line item, given the product leadership and the portfolio of products you're currently delivering to the market? So we have a very strong portfolio. If you think about, we are leading the market across our use cases. And we invest a lot of R&D because we believe that we can win with our technology. We provide incremental value versus the competition. And actually, when we compete, one of the items that we take into consideration is that we would like to do proof of concept. Once we do proof of concept, I can demonstrate the value that we provide. And it's mainly driven by R&D capability, advanced technology, and domain expertise. So the investment is high, and you can see it as a ratio. But any top line that we can sell, new customer, new regions, new customers, that creates for us incremental top line without incremental cost on the R&D. And I think, again, this leverage will continue. Great, and if we pivot real quickly to sales and marketing, I know that you guys have made some investments in different geographies, different personnel, different partnerships. Maybe one thing just super high level, because we'll eventually come back to go-to-market, but is the company seeing increased sales productivity from the go-to-market today, or is there more to come? Where are we in recognizing the fruits of some of those investments the company's made? Yeah, so yes, we do see the productivity improving. Obviously, productivity of sales differs from one area to the other. There are mature markets. There are new markets. There are markets that are in penetration mode, like in the U.S., that we invest disproportionately. But generally speaking, we do see the productivity improving. We continue to drive healthy growth and continuously reviewing and optimizing our go-to-market approach according to the matureness level of a specific market. OK, metrics, key metrics, and I know that, again, Elad, you were talking about this when we got the Q2 key takeaways, but RPO and CRPO are two of the more striking metrics coming out of the past couple of quarters here. CRPO meaningfully grew in Q2, substantially outpacing revenue growth. What does management attribute that acceleration to? The CRPO is strong, and I believe it's a result of the combination of market environment and demand and our leadership and execution, so both of them give us strong growth in CRPO and the confidence level for the future periods. Understood. And for RPO, been a little bit more steady to down slightly. Is there a way to think about what's causing that dynamic for RPO? Is it just, hey, maybe RPO balance was elevated. We should be focusing more on CRPO? Is it potentially customers opting for shorter-term contracts? How do we think about the RPO dynamic versus CRPO? So the long-term RPO, as our offering is primarily perpetual, is related to support contracts, long-term support contracts. So customers can, as I mentioned before, you ask about the typical deal. So a customer is buying a perpetual license, and then they can buy one, usually one to three years of support contract before renews again. So it's not about customer opting for short term. It's a normal behavior for the long-term RPO to fluctuate between periods. And there are a few factors, or primary factors, that impact RPO in a given quarter and cause this fluctuation, which, again, is normal. One of them is the sales cycle. The other one is the deployment cycle. The third one is the length of contracts. If customers now renew a large support contract for three years, you will see a jump in the long-term RPO. Same for renewal timing. If a customer is in the second year out of the three years of support contract, you will see a negative impact on the long-term RPO, but once the next year he renewed his contract, you will see again a jump, and of course, we have the seasonality, so looking at long-term RPO fluctuation, it's normal behavior. You should look at both of them, generally speaking, to see that long-term RPO is in a reasonable level, and more importantly, that the CRPO supports growth, and I believe that both the CRPO and total RPO we have today are very strong and give us good visibility. Great. And just rounding out the metrics here, but I know on the most recent call, management had introduced Billings as a new KPI. And I'm just trying to get a better sense as to the why. Why is management now viewing Billings as a core KPI for Cognyte versus what's changed to bring about that call out? Let's start with what is billing. So in our business, billing is revenue plus the changes that we have in contract liability, contract assets, and unbilled balances. So this represents the overall billings. If you think about we providing multiple KPIs, so adding now billings gives you an indication about insight about the revenue, what's going on from the other side of the revenue that we are able to bill the customers, and after that, we'll be able to collect. And it's all related to our effort to be, I would say, to provide more color on our business and to provide more metrics to our investors. I think it's important. It gives them an ability to be able to track the business and understand how we progress. And again, billing as KPI standalone, it's not enough. I think that we need to take Billings and other KPIs and together everything give you about the progress that we are making and our ability to achieve our overall goals. Thanks for that, David. If we go over to the go-to-market side of the house, Cognyte's obviously made some investments in the North American market. Can you provide the audience here an update as far as that expanded presence? Where is the company making those investments? Again, are we seeing a growing contribution today, or should we think about that more as a medium-term payoff for the business? Yes, so we believe that North America market presents growth opportunity for us, and we have decided to start with the operational units within the state and local law enforcement agencies, and over time to continue to the federal law enforcement agencies, and we make a progress. Our technology fits market needs and differentiated. So investments today are primarily related to sales and marketing efforts, which, as I mentioned before, the investment in North America sales and marketing is disproportionate to the rest of the world. If we look at execution, in H1, we added eight new logos in North America, state and local law enforcement agencies. We participated in one competitive bids. Actually, every time we come to a new customer, we have to push out incumbents, and we already got some follow-on orders from customers that just joined us recently. I can also tell you that I visited the U.S. a few times this year, including last month. I was talking to customers that are using our solution, and the feedback is amazing. Actually, in their words, they say that it presents unmatched capabilities. Given the execution so far, customers' feedback, I expect the North America business to continue to grow in FY 26 and beyond. It will be gradual growth because it's a penetration mode, but the opportunity there is significant. Great. So significant opportunity. But maybe one thing I'd like to tease out a little bit more. I love the fact that you're already seeing follow-on orders from some of those new customers. Is that follow-on order potentially quicker versus what you see from customers in EMEA or APJ, or is it more consistent with global customer behavior? Yes, so for acquiring new customers in the U.S., the sales cycle is longer compared to other territories. When it comes to follow-on orders, it's similar. So the second, actually, the second PO from an existing customer will be faster than the first PO we got from him. And there are a few reasons for that. Some of them are related to purchasing processes they have. They have to approve new vendors. They have to test your equipment. They have to make sure that they have a backup for support and everything they need. Again, it's a mission-critical solution. And once they check all of this, the next PO will come faster. So that's how we see the market today. Can you also discuss the sales cycles that you see? Obviously, we've seen more traction in SLED just because you guys have been there longer, but how the customer behaviors differ for SLED versus federal? Yes, so federal, in state and local, actually, the sales cycle for acquiring new customers is about four to six quarters, and again, we are focusing on the operational units of the state and local law enforcement agencies. When you look at the federals, the approval process is much longer, and we started. We had some discussions with some federal agencies. We are discussing with them pilots, so they try our technology, and I can't say how long it will take, but as it looks now, it will take longer than in the law enforcement area, state and local law enforcement, but there is feedback from the other side. I mean, they're talking to us. They are willing to take the technology. They're willing to test it. So I do believe that it will take longer, but eventually, there is an interest from the other side to catch up with the technology that we have. For that North American sales force today, is most of the investment behind Cognyte at this time as far as the buildup of personnel, or is there still more to do in building up the size of that team today? Actually, the sales force, the investment is primarily in the sales. The reason is that the technology itself fits the U.S. market, which is the main focus in the North American side, and for that reason, we don't need any major R&D investments in order to be relevant in this market, so we are already presenting very strong results, so the main effort is sales, marketing, events, this kind of efforts in order to, first, strengthen the brand awareness, and second, to increase market reach. Those are the main focus areas when we invest in the North American market. For the federal business as well in the North American market, I know that you guys have obviously entered into a partner arrangement as well. Maybe just taking a higher-level view of Cognyte, can you talk about the partner network itself? How much business is sourced through partners versus direct, and why the choice of going with a partner for U.S. federal? Yes, so for U.S. federal, we have an agreement with a local partner. And the reason for that was that they came from those organizations, some of them from the technical side, others from the operational side. So first, they could help us better understand the exact needs and the field requirements. And second, they have market reach to those kinds of agencies. And this was the reason, actually two reasons, to do federal indirect. We didn't do it first in state and local because when we penetrated the market, we wanted to make sure that firsthand we see that the customers are appreciating our products and we deliver superior technology. Generally speaking, worldwide, about half of our sales are indirect. And as we offer advanced solutions, they usually require high-touch sales. So our experts are involved in the vast majority of sales processes, including the indirect ones. We see it as a benefit because, first, it helps us optimize the sales process and get feedback from the customers firsthand, but also to maintain a long-term relationship with them that later on results in more expansions, upgrades, and cross-selling for other use cases. Great. And the order momentum has been strong, very strong. I know in the July quarter, Cognyte announced three substantial follow-ons, each over $10 million. We don't have results yet for the most recent quarter, but the company has issued a number of press releases highlighting one-year support agreement for $20 million, another expansion for $10 million. I just wanted to get some more color. What is helping Cognyte land these larger deals? Is it selling new product? Are existing customers consolidating towards Cognyte? How do you think about those pieces? Yes, so first, as I mentioned before, the demand drivers are very strong. So customers need to go for more advanced technology. Otherwise, they will not be able to address the needs. As I mentioned before, bad guys are more sophisticated. They're better hyped. They're more organized. It's very difficult to put your hands on them, so that is growing, and you need more analytics, and you need to uncover more hidden insights out of the same data sets that you have, and technology is evolving. If you will not catch up, you'll lose because I mentioned before that AI is a challenge, but it's also an opportunity. AI is a challenge because the bad guys are also using it. They use it to create fake identities. They use it to mimic human actions, so they're better hiding using AI. On the other side, if customers will use AI, they'll use it in two areas. The first one is to use the solution in a more efficient manner so they can actually use, I would say, usual users and not super technology users to query the technology and get quick answers with natural language, but also under the hood. So first of all, it's related to the healthy demand in the market. Secondly, I think that we presented, and as David mentioned before, we present superiority in the market. Actually, when there is a competitive bid, not all bids are competitive. Sometimes we are a sole vendor. But when it comes to competitive bids, we usually encourage customers to go for a POC. You know, in presentations and documents, everything is perfect. But when it comes to the real life, it's more complicated. That's the reason we encourage customers to go for a proof of concept, try it themselves, see the value we can generate for them. Actually, we get lots of points by doing that. When we win, we win new logos. In H1, we had 20 new logos in total, which usually start with small deals and then expand over time. We see very large expansions that are results of data volumes and diversity. We see significant upgrades that are results for new capabilities that we offer them, actually more analytics and more AI in order for them to uncover more hidden insights and also cross-selling to our existing customer base. It's a combination of market demand, our superior technology, and new logos and upgrades and expansions of existing customers. The demand drive, as I mentioned before, intensified. Actually, the data is growing faster. The technology is running faster. And the challenges of our customers are also growing faster. So they need us. On the new logo piece, because that's something I wanted to touch on as well, understood on the market dynamics and the background there, but is there something that Cognyte is doing differently today to help attract and win over those new logos? Or maybe it's from a competitive standpoint, are the incumbents or competing solutions falling further behind or not innovating as quickly? How would you parse out the success that Cognyte is seeing with those new logos? Yes, so acquiring new logos requires, I believe, two main things. The first one is that you are better than competition and what customers have today. And the second one is related to the market reach, how much coverage you have in the market. And actually, we're investing in both. In terms of R&D, you saw the investment in R&D that we have. Actually, our technology is very strong and generates the value our customers need. And in terms of market reach, in sales and marketing, we invest more. And we have more partners. We have more salespeople. We are participating in more marketing events. So overall, this helps acquire new customers. So in H1, we want 20 new customers, of which eight are in North America. And I think it speaks for the demand and for the execution. Got it. Terrific. And on the North American market, just to better tease that out, I know we're talking about the competitors that you guys are facing, but do those competitors change if I think about the U.S. SLED versus the U.S. federal? Again, just because you guys are obviously seeing traction with the U.S. SLED logos, but wondering if we can start to maybe think about U.S. federal, just given a similar competitive dynamic for that sector as well. Yes, so given that we are focusing on the operational units of those agencies in the State and Local as well as in the Federal, we are talking about a similar competitive landscape. Great to hear. Okay. And capital allocation. I know in recent weeks, Cognyte just authorized an 18-month, $20 million buyback program. I think that's indicative of some of the earlier success we were talking about, whether it was margin leverage, sustainable adjusted EBITDA, and free cash flow. How does management think about its capital allocation strategy holistically? Yes. So first of all, the board considers capital allocation periodically. We do it every time we meet. And the idea is to maintain financial flexibility and take the right decisions at the right time. At this time, considering the cash generation, the fact that we have noted the business performance and visibility, and our belief that the company is undervalued, the board has decided to initiate this share purchase program. And we'll continue to monitor with the capital allocation. As for inorganic growth and M&A, this is a relevant agenda for us. We always look at the market to see if there is something relevant. I can tell you that in terms of technology, we are at the top. So if there is something opportunistic that can help us even more, we'll look at it. But the focus in M&As is more about market reach. So if we look at an M&A that helps us more, R&D versus market reach, market reach is more relevant for us at this time. And for that market reach dynamic as well, should we be thinking particular geographies or not necessarily? It's more just a matter of finding the right customer that fits Cognyte's customer profile. Yeah. We look globally. We are operating globally. Obviously, we look also at the U.S. now because we're in a penetration mode, and if we find something that can accelerate it, it would be great. Okay. Terrific. I'm looking at the Q, and I don't see any questions lined up right now, but thank you to both of you guys for your time. Good luck with the rest of the day. I hope everyone enjoys the rest of the conference. Thank you. Thank you, Mike. Bye-bye. Thanks a lot. Bye-bye. Bye.