Good day, ladies and gentlemen. Thank you for standing by. Welcome to the Cognyte First Quarter Fiscal Year 2026 Earnings Conference Call. [Operator Instructions] Please note that today's conference may be recorded. I will now hand the conference over to your speaker host, Dean Ridlon, Head of Investor Relations. Please go ahead.

Thank you, operator. Hello, everyone. I'm Dean Ridlon, Cognyte's Head of Investor Relations. Thank you for joining us today. I'm here with Elad Sharon, Cognyte's CEO; and David Abadi, Cognyte's CFO. Before getting started, I would like to mention that accompanying our call today is a presentation. If you'd like to view these slides in real-time during the call, please visit the Investors section of our website at cognyte.com. Click on upcoming events, then the webcast link for today's conference call. I would also like to draw your attention to the fact that certain matters discussed on this call may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 and other provisions of the federal securities laws. These forward-looking statements are based on management's current expectations and are not guarantees of future performance. Actual results could differ materially from those expressed in or implied by these forward-looking statements. The forward-looking statements are made as of the date of this call, and except as required by law, Cognyte assumes no obligation to update or revise them. Investors are cautioned not to place undue reliance on these forward-looking statements. For a more detailed discussion of how these and other risks and uncertainties could cause Cognyte's actual results to differ materially from those indicated in these forward-looking statements, please see our annual report on Form 20-F for the fiscal year ended January 31, 2025, and other filings we make with the SEC. The financial measures discussed today include non-GAAP measures. We believe investors focus on non-GAAP financial measures in comparing results between periods and among our peer companies that publish similar non-GAAP measures. Please see today's presentation slides, our earnings release and the Investors section of our website at cognyte.com for a reconciliation of non-GAAP financial measures to GAAP measures. Non-GAAP financial information should not be considered in isolation from, as a substitute for, or superior to GAAP financial information, but is included because management believes it provides meaningful information about the financial performance of our business and is useful to investors for informational and comparative purposes. The non-GAAP financial measures that the company uses have limitations and may differ from those used by other companies. Now I would like to turn the call over to Elad.

Thank you, Dean. Welcome, everyone, to our first quarter fiscal '26 conference call. We are pleased to report a strong start to the year. Our Q1 performance reflects consistent execution against our strategy, strong customer engagement and healthy demand for our solutions. In the first quarter, we grew revenue by approximately 16% year-over-year to $95.5 million. Non-GAAP gross profit increased by about 17% year-over-year. We generated approximately $10 million of adjusted EBITDA for the quarter, more than double what we generated in Q1 last year. And cash flow from operations was approximately $1.7 million. These results underscore the strength of our business, the value of our technology and the increasing relevance of our offerings in a rapidly evolving threat environment. Let me share a few examples of our Q1 customer wins, high-impact deals that demonstrate the strength of our technology and the solid progress we are making in deepening our relationships with customers. We signed a multi-year support agreement with longstanding National Security customer. We have had a partnership with for over two decades. This 3-year agreement valued at over $20 million per year reinforces the critical role of our investigating analytics solutions play in helping the agency protect national interest and secure public safety. We also signed a new 3-year subscription agreement valued at over $10 million per year with another long-standing national security customer. By moving to a subscription model, the agency gains faster access to our latest AI power capabilities, continuous innovation and an expanded suite of solutions. This shift enhances their operational agility and ensures they went ahead of emerging threats in a rapidly evolving landscape. In addition, we closed 5 more deals valued at approximately $5 million each from new and existing customers. These included new solutions and upgrades. Together, these wins reflect our ability…

Thank you, Elad, and hello, everyone. With consistent execution, healthy demand and large loyal customer base, we delivered strong financial results in the first quarter of fiscal 2026. Revenue for Q1 was $95.5 million, an increase of 15.5% year-over-year. Software revenue was $37.4 million, an increase of $5.9 million or 19% year-over-year. Software Service revenue was $44.7 million, roughly even with last year. Our total software revenue for the quarter was approximately $82 million, representing about 86% of total revenue. We continue to expect software revenue to be about 87% of total revenue on an annual basis. Professional services revenue in Q1 was $13.5 million, an increase of $6.6 million over last year. Professional services revenue is expected to fluctuate between quarters due to revenue recognition timing. We continue to expect professional services revenue to be about 13% of total revenue on an annual basis. Recurring revenue for Q1 was $47.2 million representing 49% of total revenue. Recurring revenue, primarily from support contract and some subscription offering, improves our visibility both near and long term. Non-GAAP gross margin for the quarter was 71.9%, expanding by 80 basis points year-over-year. Gross margin may fluctuate between quarters based on our revenue mix. Gross profit in the first quarter outpaced revenue growth and was $68.7 million, an increase of about 17% year-over-year. We believe the steady improvement we have made in gross profit is the result of the significant value customer derived from our innovative solutions, our competitive differentiation and our improved cost structure. The combination of revenue growth and our business model continued to deliver meaningful year-over-year improvement in profitability showing our ability to continue to drive operational leverage. Once again, non-GAAP operating income and adjusted EBITDA both grew significantly faster than revenue. In Q1, we generated $7.6 million of non-GAAP operating…

[Operator Instructions] We have a question coming from the line of Mike Cikos from Needham.

Congrats on the solid start to the year. I just wanted to come back to the guidance for a second, and we'll work, I guess, revenue first, but just to make sure I'm clear. Q1, obviously, you guys outperformed the sell-side projection. But how did the quarter itself play out versus plan? Was there anything to call out is it sounds like you guys took a positive tone on macro and the demand. But can you just speak to those points specifically?

Hi, Mike. So in Q1, we -- the top line came a little bit ahead of expectation, but this can happen between quarters. We still expect the sequential growth quarter-on-quarter along the year. As of the demand and market environment, we do see similar momentum as we shared before. We do see very good traction with customers. It's evidenced also in conferences we are participating, including the recent one. The demand drivers remains very healthy. The data is growing volume diversity, the adversaries are most sophisticated, better hide, and the technology is running fast. So we do see the momentum continues, and we continue to expect to continue and grow along there quarter-over-quarter and improve profitability for the...

Got it. And for the -- I know you guys had cited some of these recent contract signings, right? I think we have more than $40 million in TCV you guys have announced in press releases. And so just a question, if we're seeing the volume of contract value that's being signed again $40 million, call it about $20 million is reflected in financials today based on some of these [indiscernible], which were not captured in today's numbers. Why isn't that necessarily impacting fiscal '26 to a greater extent? Is it the timing of some of these renewals or expansions? Maybe they're a little bit further out? Can you provide us an update on that front?

Yes, sure. So we mentioned actually two large deals. One is related to a renewal of very large contract contracts. We expected this to come in. So it was already baked in our guidance. And the second one is the larger subscription deal of over $10 million per deal, and the deployment is planned to take place in Q1 next year, fiscal '27. And that's the reason it's not relevant in terms of top line for this year.

I see. And on that $10 million-plus deal, if I heard correctly in David's prepared remarks, that's a 3-year deal, and the other -- so I was just going to say, so it's a 3-year deal, but only the first year of the dealer is currently included in the total RPO. Can you just help us think about like why isn't the remaining duration of that contract reflected in the RPO?

Yes, Mike. It's correct. It's a 3-year deal with annual value of $10 million. The deal from an RPO perspective only the first year is included. It's related to the terms and conditions within the deal, which only the first year is qualified for our RPO definition.

I see. Okay. And the final question I have for your topic is GroupSense with the acquisition here. I know that you're seeing the updated guidance today, primarily attributable to the GroupSense acquisition. Can you help us think about what is the revenue impact when we think about the $3 million raise here for full year? What is the associated OpEx increase by taking on the employee base from GroupSense?

So in general, it's a small transaction. It's a breakeven business. We added the $3 million to the top line. The model that they are selling is a subscription model. So it's a recurring revenue of $3 million that were added to the top line. And this is something that we saw to the guidelines. From an OpEx perspective, we have additional $2 million because of some other savings that come from different areas. So in general, it's a breakeven. We believe that over time, due to synergies and other elements, we can create profitability and it will allow us to grow in the U.S.

Great. And that U.S. piece, loud and clear on the increased exposure there. I know you're talking about the, call it, 50-ish customers being brought over as a result of GroupSense. Are all 50 of those customers in the U.S.? Or is it just the vast majority? Is there any customer overlap with Cognyte's traditional customer base?

All customers are in the U.S. And the solution -- actually, the GroupSense provide to those customers is in the domain of cyber threat intelligence. We do believe that for some of the customers, and this was also the main rationale for the deal, we can leverage our technology and being able to deliver to the Cognyte's technology in addition to what GroupSense delivers to them today. And by that expand presence -- continue to expand our presence in the U.S., this is one element in our strategy to increase presence in the U.S.

[Operator Instructions] And I'm showing no further questions in the queue at this time. I'll turn the call back to Dean for any closing remarks.

Thank you, Olivia, and thank you, everyone, for joining us on today's call. Please feel free to reach out to me should you have any questions. And we look forward to speaking with you again next quarter. Have a good day.

This concludes the conference call. Thank you for your participation, and you may now disconnect.