Shares of Cognyte Software Ltd. (NASDAQ: CGNT) surged 13.50% in pre-market trading on Wednesday, following the release of its fourth quarter and full fiscal year 2025 financial results. The company reported robust revenue growth, improved profitability, and provided an optimistic outlook for fiscal year 2026, sparking investor enthusiasm.

For the fourth quarter ended January 31, 2025, Cognyte reported revenue of $94.5 million, up approximately 13% compared to the same period last year. The company's Q4 GAAP operating income reached $0.7 million, a substantial improvement from an operating loss of $2.9 million in the prior year period. Adjusted EBITDA for the quarter more than doubled to $9.3 million, demonstrating the company's strengthening financial position.

Elad Sharon, Cognyte's CEO, expressed confidence in the company's performance, stating, "Our strong performance in fiscal year 2025 speaks to the value our innovation provides and the trust customers place in Cognyte. Our strategy of deepening relationships with existing customers and expanding into new accounts is reflected in our momentum."

Looking ahead, Cognyte provided a positive outlook for fiscal year 2026, guiding for revenue of approximately $392 million at the midpoint, representing a 12% year-over-year growth. The company also expects a significant increase in profitability, with projected Adjusted EBITDA of around $43 million. This optimistic forecast has likely contributed to the stock's substantial pre-market rally.

Wall Street analysts have maintained a cautious stance on Cognyte, with the current average rating being "hold." However, the strong financial results and upbeat outlook may prompt some analysts to reassess their positions in the coming days. The median 12-month price target for Cognyte Software Ltd is $7.50, suggesting potential upside from current levels.