Shares of Cognyte Software Ltd. (NASDAQ: CGNT) plummeted 11.26% in intraday trading on Wednesday, despite the company reporting better-than-expected first-quarter results for fiscal 2026. The sharp decline suggests that while the quarterly performance exceeded expectations, the company's outlook for the full fiscal year may have fallen short of market hopes.

For the first quarter ended April 30, 2025, Cognyte reported a significant improvement in its financial results. The company's revenue increased by 15.5% year-over-year to $95.5 million, surpassing analysts' expectations of $93.96 million. Adjusted earnings per share came in at $0.07, significantly higher than the consensus estimate of $0.01 and marking a substantial improvement from the loss of $0.04 per share in the same quarter last year.

However, investors seemed to focus on Cognyte's outlook for fiscal 2026, which appears to have disappointed the market. The company projected full-year revenue of $395 million at the midpoint, representing approximately 13% growth from the previous year. While this indicates continued growth, it may not have met the more optimistic expectations of some investors. Additionally, Cognyte forecasted non-GAAP diluted earnings per share of $0.19 at the midpoint of its revenue outlook. The market's negative reaction suggests that these projections may have fallen short of Wall Street's expectations, despite the strong quarterly results.