DIVESTITURE

12 Months Ended

Jan. 31, 2024

Discontinued Operations and Disposal Groups [Abstract]

DIVESTITURE

DIVESTITURE

On December 1, 2022 Cognyte sold SIS to Volaris group (“Volaris”). The sale was accomplished by $42.4 million in cash purchase and $4.7 million in hold back (recorded in Prepaid expenses and other current assets as of January 31, 2023) which was paid during the year ended January 31, 2024. The sale included equity interests, assets and liabilities attributable to the SIS business for a total consideration of $47.1 million, plus a performance based earn-out, if and to the extent earned. As of January 31, 2024 performance targets were not reached. The SIS sale resulted in a pre-tax gain on sale of $5.8 million, net of $4.7 million closing costs included in Other income (expenses), net in the consolidated statements of operations. The sale price is subject to adjustment based on changes in actual closing net working capital. Final potential working capital adjustments are pending. The sale price was adjusted during the year ended January 31, 2024 based on changes in actual closing net working capital and the completion of asset transfer which resulted in an additional pre-tax gain of $4.8 million recorded within other income.

In connection with the sale, the Company and Volaris entered into a transition services agreement whereby the Company provides certain post-closing services to Volaris related to the business of SIS.

The transaction did not meet the criteria set forth in ASC 205-20 for discontinued operations as it did not reflect a significant strategic shift that would have a major effect on the Company's operations or financial results.

The following is a summary of the assets and liabilities distributed as part of the SIS completed sale as of January 31, 2024:

	As of January 31,
(in thousands)	2024
Current assets:
Accounts receivable	$	5,719
Contract assets, net	2,091
Inventories	731
Prepaid expenses and other current assets	407
Total current assets	8,948
Property and equipment, net	1,424
Operating lease right-of-use assets	710
Goodwill	31,865
Intangible assets, net	415
Deferred income taxes	162
Other assets	3,392
Total assets	$	46,916
Current liabilities:
Accounts payable	$	1,327
Accrued expenses and other current liabilities	1,257
Contract liabilities	5,863
Total current liabilities	8,447
Long-term contract liabilities	946
Operating lease liabilities	510
Total liabilities	$	9,903