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01/11 07:33
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Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
The earnings call reflects a mixed outlook: while there are positives like the mega bank deal and share repurchases, the lowered revenue guidance, client losses, and declining margins overshadow these. The Q&A reveals extended sales cycles and some management vagueness on key details. The market may react negatively, especially with revenue and income guidance lowered, despite some positive developments.
Earnings Per Share (EPS) $0.03, up from $0.01 year-over-year.
Total Revenue $21 million, down 6% year-over-year due to the impact of two large client losses last year.
SaaS Revenue 93% of total revenue, with a year-over-year decline reflecting the previous client losses.
SaaS Gross Margin 77%, down from 78% year-over-year.
Total Gross Margin 69%, down from 71% year-over-year.
Non-GAAP Operating Costs $13.8 million, flat year-over-year.
Non-GAAP Net Income $765,000 or $0.03 per share, down from $2.6 million or $0.08 per share year-over-year.
Adjusted EBITDA Margin 6%, down from 10% year-over-year.
Cash Flow from Operations $2.2 million, up from $1.7 million year-over-year.
Total Cash and Cash Equivalents $68.7 million at the end of the quarter.
SaaS ARR for Knowledge Customers Increased 11% year-over-year.
Total SaaS ARR Decreased 6% year-over-year.
LTM Dollar-Based SaaS Net Retention for Knowledge Customers 97%.
LTM Dollar-Based SaaS Net Expansion Rate for Knowledge Customers 103.
Remaining Performance Obligations (RPO) Total RPO decreased 2% year-over-year.
Short-Term RPO $44.3 million, down 7% year-over-year.
New Product Launch: In March, eGain launched the eGain AI Agent for Contact Center, a conversational assistant that guides agents in resolving customer issues across various touchpoints.
Product Offering Expansion: The eGain AI Agent for Contact Center is the second offering in the AI Agent product capability, following the eGain AI Agent for Customer Self Service.
Market Expansion: eGain secured a significant deal with a US mega bank, expanding its AI knowledge platform across more than half of the bank, impacting over 100,000 users.
Market Positioning: Gartner rated eGain as a leader in their first emerging market quadrant for generative AI knowledge management apps.
Operational Efficiency: SaaS revenue accounted for 93% of total revenue, with improvements leading to faster deployments and reduced need for low-margin professional services.
Cost Management: Non-GAAP operating costs were $13.8 million, down 6% sequentially, indicating effective cost optimization.
Strategic Shift: eGain is focusing on establishing itself as the trusted knowledge foundation for AI enterprises, with increased R&D investments.
Sales Cycle Delays: Bookings for the quarter were impacted by extended sales cycles, which may affect revenue growth and client acquisition.
Client Losses: The year-over-year revenue decline reflects the impact of two large client losses from the previous year, which could hinder future revenue growth.
Macro Economic Uncertainty: Macro uncertainty impacted the timing of closing new deals, which may lead to fluctuations in revenue and profitability.
Regulatory Challenges: As eGain operates in the financial sector, potential regulatory changes could impact operations and client relationships.
Competitive Pressures: The company faces competition in the AI knowledge management space, which could affect market share and pricing strategies.
Supply Chain Issues: While not explicitly mentioned, the broader economic environment may pose supply chain challenges that could affect product delivery and service implementation.
Largest Deal Secured: eGain secured one of its largest deals with the US Consumer Group of a major US bank, expanding its AI knowledge platform across more than half the bank, impacting over 100,000 users.
AI Agent Launch: Launched the eGain AI Agent for Contact Center, aimed at improving agent performance and compliance, with positive customer interest.
Gartner Recognition: eGain was rated a leader in Gartner's emerging market quadrant for generative AI knowledge management apps.
R&D Investment: Increased R&D investments to capitalize on emerging market opportunities.
Q4 Revenue Guidance: Expect total revenue of between $22.8 million to $23.3 million for Q4.
Fiscal 2025 Revenue Guidance: Revised total revenue guidance to between $88 million to $88.5 million, down from $88.5 million to $90 million.
Q4 GAAP Net Income Guidance: Expect GAAP net income of $1.1 million to $1.6 million or $0.04 to $0.06 per share.
Fiscal 2025 GAAP Net Income Guidance: Increased GAAP net income guidance to $2.5 million to $3 million or $0.09 to $0.10 per share.
Fiscal 2025 Non-GAAP Net Income Guidance: Expect non-GAAP net income of $5.1 million to $5.6 million or $0.18 to $0.20 per share.
Share Repurchase Program: During the quarter, under our share repurchase program, we repurchased 895,000 shares at an average price of $5.61 per share, totaling $5 million. At the end of the quarter, $5 million of the $40 million of authorized remaining available remained available under the program.
The earnings call summary shows strong financial performance, with impressive SaaS revenue growth, margin expansion, and increased cash flow. The positive outlook is reinforced by optimistic guidance for fiscal 2026, including revenue and EBITDA growth. The Q&A reveals a focus on strategic investments and partnerships, like the JPMorgan deployment, and plans to utilize cash for buybacks or acquisitions. Although some responses were vague, the overall sentiment is positive, suggesting a stock price increase of 2% to 8% over the next two weeks.
The earnings call presents a mixed outlook. While there's a strong focus on AI and SaaS growth, with improved customer retention and a significant deal with JPMorgan, there are concerns about messaging product churn and reduced revenue guidance. The Q&A section highlights strategic shifts and operational improvements, but also reveals uncertainties, particularly around product transitions and specific financial details. The absence of market cap data limits precise prediction, but overall, the mixed signals suggest a neutral stock price movement in the short term.
The earnings call reflects a mixed outlook: while there are positives like the mega bank deal and share repurchases, the lowered revenue guidance, client losses, and declining margins overshadow these. The Q&A reveals extended sales cycles and some management vagueness on key details. The market may react negatively, especially with revenue and income guidance lowered, despite some positive developments.
The earnings call reveals several negative indicators: lowered revenue and net income guidance, a decline in total revenue and gross margins, and increased operating costs. Despite some positive developments like new enterprise logos and share repurchases, these are overshadowed by competitive pressures, economic factors affecting client retention, and operational challenges. The Q&A highlights uncertainties in professional services, adding to concerns. Given the overall negative sentiment and the lack of market cap information, a 'Negative' stock price movement is anticipated over the next two weeks.
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