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STOCKHOLDERS' EQUITY
 6 Months Ended
Jul. 31, 2021
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, 2021 and 2020. Under the terms of our 2017 Credit Agreement, we are subject to certain restrictions on declaring and paying 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 the Record Date.

Stock Repurchase Programs

On December 4, 2019, we announced that our board of directors had authorized a stock repurchase program whereby we were authorized to repurchase up to $300.0 million of common stock over the period ending on February 1, 2021. We made $34.0 million and $116.1 million in repurchases under the program during the years ended January 31, 2021 and January 31, 2020, respectively. This program expired on February 1, 2021.

On March 31, 2021, we announced that our board of directors had authorized a new 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 during the three months ended July 31, 2021, and no further repurchases are expected under this program for the year ending January 31, 2022.

Treasury Stock
 
Repurchased shares of common stock are typically recorded as treasury stock, at cost, but may from time to time be retired. We periodically purchase common stock from directors, officers, and other employees to facilitate income tax withholding by us or the payment of required income taxes by such holders in connection with the vesting of equity awards. When treasury shares are reissued, they are recorded at the average cost of the treasury shares acquired.

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 includes $75.4 million of share repurchases under the 2021 share repurchase program described above, and other repurchases to facilitate income tax withholding upon vesting of equity awards. On March 30, 2021, our board of directors approved the retirement of such repurchased shares of common stock and any other shares held as treasury stock, at management’s discretion. During the six months ended July 31, 2021, we retired 1,058,300 shares with a cost of $49.6 million that had been repurchased under the 2021 share repurchase program described above, 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.

During the six months ended July 31, 2020, we repurchased approximately 613,000 shares of our common stock for a cost of $34.0 million under the 2019 share repurchase program described above.

At July 31, 2021, we held approximately 4,990,000 shares of treasury stock with a cost of $234.5 million. At January 31, 2021, we held approximately 4,404,000 shares of treasury stock with a cost of $208.1 million.

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, 2021, Apax’s ownership in us on an as-converted basis is approximately 12.7%. Please refer to Note 9, “Convertible Preferred Stock” for a more detailed discussion of the Apax investment.

Accumulated Other Comprehensive Income (Loss)
 
Accumulated other comprehensive income (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 income (loss) is presented as a separate line item in the stockholders’ equity section of our condensed consolidated balance sheets. Accumulated other comprehensive income (loss) items have no impact on our net income (loss) as presented in our condensed consolidated statements of operations.

The following table summarizes changes to our accumulated other comprehensive income (loss) by component for the six months ended July 31, 2021:

(in thousands)Unrealized Gains (Losses) on Foreign Exchange Contracts Designated as HedgesUnrealized Loss on Interest Rate Swap Designated as HedgeForeign Currency Translation AdjustmentsTotal
Accumulated other comprehensive income (loss) at January 31, 2021$634 $(13,031)$(124,481)$(136,878)
Distribution of Cognyte Software Ltd.(559)— 17,682 17,123 
Other comprehensive income before reclassifications51 — 4,261 4,312 
Amounts reclassified out of accumulated other comprehensive income (loss)96 (1,014)— (918)
Amounts reclassified upon partial early retirement of the 2017 Term Loan— (12,017)— (12,017)
Net other comprehensive (loss) income(604)13,031 21,943 34,370 
Accumulated other comprehensive income (loss) at
July 31, 2021		$30 $— $(102,538)$(102,508)

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.

On May 1, 2020, our interest rate swap agreement no longer qualified as a cash flow hedge for accounting purposes and as such, accumulated deferred losses on our interest rate swap that were previously recorded as a component of accumulated other comprehensive loss were being reclassified to the condensed consolidated statement of operations as interest expense over the remaining term of the interest rate swap, as the previously hedged interest payments occurred. On April 13, 2021, we paid $16.5 million to the counterparty to settle the interest rate 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 payable, which are included within other liabilities on our condensed consolidated balance sheet as of July 31, 2021. Please refer to Note 13, “Derivative Financial Instruments” for further information regarding our interest rate swap agreement.

The amounts reclassified out of accumulated other comprehensive income (loss) into the condensed consolidated statements of operations, with presentation location, for the three and six months ended July 31, 2021 and 2020 were as follows:
Three Months Ended
July 31,		Six Months Ended
July 31,
(in thousands)2021202020212020Location
Unrealized gains (losses) on derivative financial instruments:
Foreign currency forward contracts$— $— $1 $— Cost of recurring revenue
1 — 13 — Cost of nonrecurring revenue
7 — 72 — Research and development, net
3 — 31 — Selling, general and administrative
11 — 117 — Total, before income taxes
(2)— (21)— Provision for income taxes
$9 $— $96 $— Total, net of income taxes
Interest rate swap agreement$— $(1,120)$(1,014)$(1,711)Interest expense
— — (15,655)— Other income (expense), net
— (1,120)(16,669)(1,711)Total, before income taxes
— 244 3,638 372 Benefit from income taxes
$— $(876)$(13,031)$(1,339)Total, net of income taxes