Earnings call transcript: E2open Q4 2025 beats EPS, stock jumps
Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
Overview
The earnings call reveals declining revenues, margins, and increased net losses, despite some improvements in retention. The guidance reflects a conservative outlook with expected declines in subscription and total revenue. The Q&A section highlights concerns over client satisfaction, churn, and global trade challenges. The lack of a shareholder return plan and cautious investment approach further contribute to a negative sentiment. Given the small market cap, the stock is likely to experience a negative reaction in the range of -2% to -8% over the next two weeks.
Key Financial Performance
Subscription Revenue Q4 FY25 $133,000,000 (declined 1% year-over-year); decline attributed to slower bookings and elevated churn experienced in FY24 and Q1 FY25, partially offset by improvements in retention and bookings in the second half of FY25.
Subscription Revenue FY25 $528,000,000 (declined 1.6% year-over-year); impacted by slower bookings and elevated churn in FY24 and Q1 FY25, but improvements in retention and bookings starting in Q2 FY25.
Professional Services Revenue Q4 FY25 $19,700,000 (declined 18.3% year-over-year); decline due to the end of large service projects in the first half of FY24 and targeted investments in client satisfaction.
Professional Services Revenue FY25 $79,700,000 (declined 18.4% year-over-year); decline attributed to the end of large service projects and investments in client satisfaction.
Total Revenue Q4 FY25 $152,700,000 (declined 3.6% year-over-year); decline driven by lower subscription and professional services revenue.
Total Revenue FY25 $607,700,000 (declined 4.2% year-over-year); decline due to lower subscription and professional services revenue.
Non-GAAP Gross Profit Q4 FY25 $104,200,000 (decreased 6.1% year-over-year); decrease driven by lower subscription and professional services revenue.
Non-GAAP Gross Margin Q4 FY25 68.2% (down from 70% year-over-year); lower margins due to reduced revenue.
Non-GAAP Gross Margin FY25 68.5% (down from 69.4% year-over-year); decrease attributed to lower subscription and professional services revenue.
Adjusted EBITDA Q4 FY25 $56,300,000 (36.9% margin); reflects ongoing commitment to operational efficiency.
Adjusted EBITDA FY25 $215,500,000 (decreased 2.2% year-over-year); margin improved to 35.5% from 34.7% due to cost control.
Net Loss Q4 FY25 $268,500,000; includes a noncash goodwill impairment charge of $245,000,000 due to decline in share price.
Net Loss FY25 $725,800,000; includes a noncash goodwill impairment charge of $614,100,000.
Adjusted Operating Cash Flow Q4 FY25 $56,700,000; reflects strong cash generation capability.
Adjusted Operating Cash Flow FY25 $111,400,000; year-over-year increase in cash balance by $63,000,000.
Cash Balance FY25 $197,400,000 (increase of $46,000,000 from Q3 FY25); record sequential cash build due to improvements in accounts receivable collection.
You have reached the limit. Sign up to access full content
Get started
Operating Highlights
New AI Tools Launch: In March, E2Open announced the launch of new AI tools across its global trade technology suite, aimed at enhancing productivity, compliance assurance, and cycle times.
Generative AI Integration: E2Open is investing in generative AI to enhance automation, decision-making, and user experience in its software.
Client Base Expansion: E2Open's network reached over half a million enterprises in FY '25, the highest in the company's history.
New Client Acquisitions: E2Open secured new business with clients in diverse sectors including automotive, consumer electronics, and retail.
Customer Support Improvement: E2Open reduced its customer support backlog of aged support tickets by more than 60%.
Retention Rate Improvement: E2Open achieved a gross retention rate of 91% and net retention of 99%, showing improvement from previous fiscal years.
Focus on Client Satisfaction: E2Open's strategy emphasizes client satisfaction and retention, leading to improved renewal rates and upselling opportunities.
Investment in Product Development: E2Open is making targeted investments in product development and sales structure to enhance client offerings and drive growth.
You have reached the limit. Sign up to access full content
Get started
Risk or Challenges
Forward Looking Statements: The company cautions that forward-looking statements regarding future events and financial performance are subject to known and unknown risks and uncertainties.
Regulatory Issues: The ongoing tariff volatility poses significant challenges, potentially creating supply chain disruptions similar to those experienced during the COVID pandemic.
Economic Factors: The company has adopted a conservative revenue guidance approach due to broader macroeconomic volatility, particularly related to tariffs.
Client Retention and Satisfaction: While gross and net retention rates have improved, they are still below historical levels, indicating ongoing challenges in client satisfaction and retention.
Supply Chain Challenges: The complexity of global trade and tariff changes is increasing, requiring clients to navigate these challenges effectively, which may impact their reliance on E2Open's solutions.
Professional Services Revenue: Professional services revenue has declined significantly, indicating challenges in maintaining service levels and client satisfaction.
Churn Rates: Churn rates are expected to be highest in Q1 due to elevated renewals, which may impact subscription revenue.
Investment Risks: The company is evaluating targeted investments in commercial and product development, which may carry risks if not executed effectively.
You have reached the limit. Sign up to access full content
Get started
Guidance & Outlook
Client Retention: Achieved the highest renewal percentage of any FY '25 quarter, with gross and net retention rates of 91% and 99%, respectively.
Subscription Revenue Growth: Recorded modest sequential growth in subscription revenue over the past three quarters, with Q4 year-over-year subscription growth rate adjusted for currency impacts coming within 0.5 percentage points of flat growth.
AI and Product Innovation: Investing in AI capabilities to enhance software, including automated classification of products and natural language summaries.
Global Trade Management: E2Open's global trade application suite is positioned as a first line of defense against tariff volatility, with significant updates to the global trade content database.
Operational Improvements: Reduced customer support backlog of aged support tickets by more than 60% and improved implementation speed.
FY '26 Subscription Revenue Guidance: Expected to be in the range of $525 million to $535 million, representing a year-over-year growth rate of -1% to +1%.
Q1 FY '26 Subscription Revenue Guidance: Expected in the range of $129 million to $132 million, representing a year-over-year decline of 1.8% to an increase of 0.5%.
Total Revenue Guidance FY '26: Expected to be within the range of $600 million to $618 million, representing a year-over-year growth rate of 0.2% at the midpoint.
FY '26 Adjusted EBITDA Guidance: Expected to be within the range of $200 million to $210 million, implying an adjusted EBITDA margin of 33% to 34%.
FY '26 Gross Profit Margin Guidance: Expected to be within a range of 68% to 68.5%.
You have reached the limit. Sign up to access full content
Get started
Shareholder Return Plan
Shareholder Return Plan: E2Open did not announce any specific share buyback program or dividend program during the earnings call.
You have reached the limit. Sign up to access full content
Get started
Key Q&A
Q:On the fiscal year 2026 revenue guide, how should we think about the linearity throughout the year? Will it be steady improvement or more improvement in the second half?
A:We should expect similar kind of style going forward as we saw in FY25, with room for improvement and continued execution.
Q:What gives you confidence and visibility into improvement on the PS side?
A:We’ve stabilized the business and seen a nice pickup in bookings and backlog.
Q:What exactly are you making those investments in for FY26?
A:Investments include a client-specific data platform, next-generation planning, improving implementation speed, and enhancing AI tools for global trade.
Q:Can you provide additional details around customer conversations regarding global trade?
A:Clients are focused on processing customs and navigating complexities, which may limit new feature discussions for now.
Q:What are the factors driving the sequential decline in Q1 subscription revenue guidance?
A:Churn is generally more front-end loaded, and Q1 typically sees higher churn due to renewals.
Q:Would you describe the full year subscription revenue guidance as conservatism?
A:Yes, it’s appropriate to be somewhat conservative in the current environment.
Q:To what extent does E2Open have exposure to changes in global trade volumes?
A:Pure volume-based revenue exposure is at 2%, down from 4% two years ago.
Q:Review of Unclear Management Responses
A:Management avoided giving a direct answer regarding the specific timeline for returning to normalized churn rates and the exact impact of tariff volatility on future revenue.
You have reached the limit. Sign up to access full content
Get started
Earnings Word Cloud
The most frequently occurring keywords in this quarter's earning call
Armstrong Chief
Bank America
COVID
EOpen quarter
EOpen question
FY
Officer EOpen
PS
area
booking
change
churn
client
complexity
couple
end
environment
exposure
improvement rate
investment product
job
kind
lot
month
people
period
point
remark
scenario
side
speed
step
subscription
supply chain
tariff
trade
volatility
volume
work
ETWO Transcript
Earnings call transcript: E2open Q4 2025 beats EPS, stock jumps
Unknown4-29
The earnings call reveals declining revenues, margins, and increased net losses, despite some improvements in retention. The guidance reflects a conservative outlook with expected declines in subscription and total revenue. The Q&A section highlights concerns over client satisfaction, churn, and global trade challenges. The lack of a shareholder return plan and cautious investment approach further contribute to a negative sentiment. Given the small market cap, the stock is likely to experience a negative reaction in the range of -2% to -8% over the next two weeks.
E2open Parent Holdings, Inc. (ETWO) Q4 2025 Earnings Call Transcript
Unknown4-29
The earnings call highlights several negative aspects: declining subscription and professional services revenues, significant net losses due to impairment charges, and a conservative outlook due to macroeconomic uncertainties. Although there are improvements in retention, bookings, and cash flow, the overall sentiment remains negative. The Q&A session further underscores concerns with cautious guidance and unclear responses. Given the company's small-cap status, the stock is likely to react negatively, falling in the -2% to -8% range over the next two weeks.
E2open Parent Holdings, Inc. (ETWO) Q3 2025 Earnings Call Transcript
Unknown1-10
The earnings call reveals several challenges: declining subscription revenue, professional services revenue pressure, and a significant goodwill impairment charge. Despite slight improvements in revenue decline rates and cash flow, weak guidance and lack of a shareholder return plan weigh negatively. The Q&A section highlights ongoing challenges like retention issues and longer sales cycles. The market cap suggests moderate sensitivity to these factors, leading to a negative stock price prediction over the next two weeks.
E2open Parent Holdings, Inc. (ETWO) Q2 2025 Earnings Call Transcript
Unknown10-10
The earnings call reveals a decline in both subscription and total revenue year-over-year, with competitive pressures and economic factors delaying large deals. The company faces challenges in professional services and cash flow, with no shareholder return plan announced. Despite some improvement in bookings and churn, the outlook remains conservative. The Q&A highlights concerns over deal delays and unclear management responses. Given the market cap of approximately $1.3 billion, the stock price is likely to react negatively, falling between -2% to -8% over the next two weeks.
ETWO Report
Frequently Asked Questions
Where does this earnings call transcript come from?
All transcripts are sourced directly from the official live webcast or the company’s official investor relations website. We use the exact words spoken during the call with no paraphrasing of the core discussion.
How soon is the transcript available after the earnings call ends?
Full verbatim transcripts are typically published within 4–12 hours after the call ends. Same-day availability is guaranteed for all S&P 500 and most mid-cap companies.
Is the transcript edited or altered in any way?
No material content is ever changed or summarized in the “Full Transcript” section. We only correct obvious spoken typos (e.g., “um”, “ah”, repeated 10 times”, or clear misspoken ticker symbols) and add speaker names/titles for readability. Every substantive sentence remains 100% as spoken.
Why do some answers appear as “Unclear” or “Inaudible”?
When audio quality is poor or multiple speakers talk over each other, we mark the section instead of guessing. This ensures complete accuracy rather than introducing potential errors.
Who creates the AI Summary and Key Q&A highlights shown above the transcript?
They are generated by a specialized financial-language model trained exclusively on 15+ years of earnings transcripts. The model extracts financial figures, guidance, and tone with 97%+ accuracy and is regularly validated against human analysts. The full raw transcript always remains available for verification.
