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STOCKHOLDERS' EQUITY
 6 Months Ended
Jul. 31, 2022
Equity [Abstract]  
STOCKHOLDERS' EQUITY STOCKHOLDERS’ EQUITY
 
Common Stock Dividends

We did not declare or pay any cash dividends on our common stock during the six months ended July 31, 2022 and 2021. Under the terms of our Credit Agreement, we are subject to certain restrictions on declaring and paying cash dividends on our common stock.

In connection with the Spin-Off, each holder of Verint’s common stock received one ordinary share of Cognyte for every share of common stock of Verint held of record as of the close of business on January 25, 2021.

Stock Repurchase Programs
On March 31, 2021, we announced that our board of directors had authorized a stock repurchase program whereby we were authorized to repurchase up to a number of shares of common stock approximately equal to the number of shares to be issued as equity compensation during the fiscal year ending January 31, 2022. During the three months ended April 30, 2021, we repurchased 1,600,000 shares of our common stock at a cost of $75.4 million under this program. There were no repurchases under this program subsequent to April 30, 2021, and this program expired on January 31, 2022.

On December 2, 2021, we announced that our board of directors had authorized a new stock repurchase program for the fiscal year ending January 31, 2023 whereby we may repurchase up to 1,500,000 shares of common stock to offset dilution from our equity compensation program for such fiscal year. To further offset such dilution as well as other dilutive transactions, on March 22, 2022, our board of directors authorized an additional 500,000 shares of common stock to be repurchased under this program. During the six months ended July 31, 2022, we repurchased 2,000,000 shares of our common stock at a cost of $105.7 million under this program. Repurchases were financed with available cash in the United States.

Treasury Stock
 
Repurchased shares of common stock are typically recorded as treasury stock, at cost, but may from time to time be retired at management’s discretion, as approved by the board of directors in March 2021. From time to time, we have purchased common stock from our directors, officers, and other employees to facilitate income tax withholding by us or the payment of income taxes by such holders upon vesting of equity awards occurring during a Company-imposed trading blackout or lockup period. When treasury shares are reissued, they are recorded at the average cost of the treasury shares acquired.

During the six months ended July 31, 2022, we repurchased 2,000,000 shares of our common stock for a cost of $105.7 million under the 2022 stock repurchase program described above as well as an insignificant number of shares to facilitate income tax withholding or payments as described above. During the six months ended July 31, 2022, we retired all 2,000,000 shares with a cost of $105.7 million, which was recorded as a reduction of additional paid-in capital and common stock. These shares were returned to the status of authorized and unissued shares.

During the six months ended July 31, 2021, we repurchased approximately 1,602,000 shares of our common stock for a cost of $75.5 million, which included $75.4 million of stock repurchases under the 2021 stock repurchase program described above and other repurchases to facilitate income tax withholding or payments as described above. During the six months ended July 31, 2021, we retired 1,058,300 shares that had been repurchased under the 2021 stock repurchase program described above with a cost of $49.6 million, which was recorded as a reduction of common stock and additional paid-in capital. These shares were returned to the status of authorized and unissued shares.

During the three months ended July 31, 2021, in connection with the maturity of our 2014 Notes, we issued approximately 1,250,000 treasury shares with an average cost of $47.30 per share to the holders of the 2014 Notes in satisfaction of the conversion premium, which was recorded as a $59.1 million reduction of treasury stock and additional paid-in capital. Additionally, we received approximately 1,250,000 shares of our common stock having a value of $57.7 million from the counterparties under the Note Hedges, as well as approximately 42,000 shares of our common stock having a value of $2.0 million from the counterparties related to the reimbursement for the in-the-money portion of the Repurchased 2014 Notes under the Note Hedge agreements, which was recorded as an increase to treasury stock and additional paid-in capital.

Issuance of Convertible Preferred Stock

On December 4, 2019, in conjunction with the planned separation of our businesses into two independent publicly traded companies, we announced that an affiliate of Apax Partners would invest up to $400.0 million in us, in the form of convertible preferred stock. Under the terms of the Investment Agreement, the Apax Investor purchased $200.0 million of our Series A Preferred Stock, which closed on May 7, 2020. In connection with the completion of the Spin-Off, the Apax Investor purchased $200.0 million of our Series B Preferred Stock, which closed on April 6, 2021. As of July 31, 2022, Apax’s ownership in us on an as-converted basis was approximately 12.7%. Please refer to Note 9, “Convertible Preferred Stock” for a more detailed discussion of the Apax investment.

Accumulated Other Comprehensive Loss
 
Accumulated other comprehensive loss includes items such as foreign currency translation adjustments and unrealized gains and losses on certain marketable securities and derivative financial instruments designated as hedges. Accumulated other comprehensive loss is presented as a separate line item in the stockholders’ equity section of our condensed consolidated balance sheets. Accumulated other comprehensive loss items have no impact on our net income (loss) as presented in our condensed consolidated statements of operations.
The following table summarizes changes in the components of our accumulated other comprehensive loss for the six months ended July 31, 2022:
(in thousands)Unrealized Losses on Foreign Exchange Contracts Designated as HedgesForeign Currency Translation AdjustmentsTotal
Accumulated other comprehensive loss at January 31, 2022$(48)$(118,467)$(118,515)
Other comprehensive loss before reclassifications(379)(43,673)(44,052)
Amounts reclassified out of accumulated other comprehensive loss(260)— (260)
Net other comprehensive loss(119)(43,673)(43,792)
Accumulated other comprehensive loss at July 31, 2022$(167)$(162,140)$(162,307)

All amounts presented in the table above are net of income taxes, if applicable. The accumulated net losses in foreign currency translation adjustments primarily reflect the strengthening of the U.S. dollar against the British pound sterling, which has resulted in lower U.S. dollar-translated balances of British pound sterling-denominated goodwill and intangible assets.

The amounts reclassified out of accumulated other comprehensive loss into the condensed consolidated statements of operations, with presentation location, for the three and six months ended July 31, 2022 and 2021 were as follows:

Three Months Ended
July 31,		Six Months Ended
July 31,
(in thousands)2022202120222021Financial Statement Location
Unrealized (losses) gains on derivative financial instruments:
Foreign currency forward contracts$— $— $— $1 Cost of recurring revenue
(22)1 (31)13 Cost of nonrecurring revenue
(138)7 (187)72 Research and development, net
(73)3 (97)31 Selling, general and administrative
(233)11 (315)117 Total, before income taxes
41 (2)55 (21)Benefit from (provision for) income taxes
$(192)$9 $(260)$96 Total, net of income taxes
Interest rate swap agreement$— $— $— $(1,014)Interest expense
— — — (15,655)Other income (expense), net
— — — (16,669)Total, before income taxes
— — — 3,638 Benefit from income taxes
$— $— $— $(13,031)Total, net of income taxes

On April 13, 2021, we paid $16.5 million to settle the 2018 Swap agreement prior to its June 2024 maturity, and reclassified the remaining $15.7 million of pretax accumulated deferred losses from accumulated other comprehensive loss within stockholders’ equity to other income (expense) on our consolidated statement of operations for the six months ended July 31, 2021. The associated $3.7 million deferred tax asset was reclassified from accumulated other comprehensive loss and netted against income taxes receivable during the year ended January 31, 2022. Please refer to Note 13, “Derivative Financial Instruments” for further information regarding the 2018 Swap.