• eGain Reports Improved Profitability and Operating Cash Flow in Q1 2024

    ソース: Nasdaq GlobeNewswire / 02 11 2023 16:05:01   America/New_York

    SUNNYVALE, Calif., Nov. 02, 2023 (GLOBE NEWSWIRE) -- eGain (Nasdaq: EGAN), a knowledge automation platform for customer engagement, today announced financial results for its fiscal 2024 first quarter ended September 30, 2023.

    “We delivered top and bottom-line results ahead of both our projections and street expectations,” said Ashu Roy, eGain’s CEO. “Our disciplined execution significantly improved profitability and operating cash flow in the quarter. And our recently launched eGain AssistGPT™ solution, the first-of-its-kind to automate knowledge for customer engagement, is being enthusiastically received by the market.”

    Fiscal 2024 First Quarter Financial Highlights

    • Total revenue was $24.2 million, down 2% year over year.
    • GAAP net income was $2.6 million, or $0.08 per share on a basic and diluted basis, up from GAAP net loss of $16,000, or $0.00 per share on a basic and diluted basis in Q1 2023.
    • Non-GAAP net income was $3.8 million, or $0.12 per share on a basic and diluted basis, up from non-GAAP net income of $2.0 million, or $0.06 per share on a basic and diluted basis in Q1 2023.
    • Cash provided by operations was $8.1 million, or an operating cash flow margin of 34%.
    • Total cash and cash equivalents were $79.8 million, up from $73.2 million in Q4 2023.
    • Adjusted EBITDA was $2.8 million compared to $1.6 million in Q1 2023.
    • Total shares purchased through the repurchase program were approximately 83,000 at an average cost per share of $6.23, totaling $517,000.

    Fiscal 2024 Second Quarter Financial Guidance
    For the second quarter of fiscal 2024 ending December 31, 2023, eGain expects:

    • Total revenue of between $23.0 million to $23.6 million.
    • GAAP net income of $800,000 to $1.4 million, or $0.03 to $0.04 per share.
      • Includes stock-based compensation expense of approximately $1.5 million.
      • Includes depreciation and amortization of approximately $125,000.
    • Non-GAAP net income of $2.3 million to $2.9 million, or $0.07 to $0.09 per share.

    Fiscal 2024 Financial Guidance
    For the fiscal 2024 full year ending June 30, 2024, eGain expects:

    • Total revenue of between $96.0 million to $98.0 million.
    • GAAP net income of $6.6 million to $7.1 million, or $0.20 to $0.22 per share.
      • Includes stock-based compensation expense of approximately $5.5 million.
      • Includes depreciation and amortization of approximately $500,000.
    • Non-GAAP net income of $12.1 million to $12.6 million, or $0.37 to $0.39 per share.

    Guidance Assumption:

    • Weighted average shares outstanding are expected to be approximately 31.6 million for the second quarter of fiscal 2024 and 32.3 million for the full fiscal year 2024.

    Extension of Stock Repurchase Program

    Our board of directors has amended our stock repurchase program that was originally effective on November 14, 2022, to extend the term by an additional year, until November 14, 2024. Under the stock repurchase program, eGain may purchase shares up to an aggregate of $20 million shares of common stock on a discretionary basis from time to time through open market transactions or privately negotiated transactions at prices deemed appropriate by eGain. In addition, at the discretion of eGain, open market repurchase of common stock may also be made under a Rule 10b5-1 plan, which would permit common stock to be repurchased when the company might otherwise be precluded from doing so under insider trading laws or self-imposed trading restrictions.

    The timing and number of shares repurchased will be determined based on an evaluation of market conditions and other factors, including stock price, trading volume, general business and market conditions, and the availability of capital. The extended stock repurchase program is effective immediately, does not obligate eGain to acquire a specified number of shares and may be modified, suspended, or discontinued at any time at eGain’s discretion without notice. 

    The stock repurchase program will be funded using existing cash or future cash flows.

    Non-GAAP Financial Measures

    This press release includes certain non-GAAP financial measures as supplemental information relating to our operating results, including non-GAAP net income. Non-GAAP net income measure is adjusted for stock-based compensation expense. eGain’s management has analyzed the effect of these non-GAAP adjustments on our income tax provision and believes the change in our income tax provision would be minimal due to these non-GAAP adjustments being attributed to the U.S. jurisdiction where it has recorded full valuation allowance against the deferred taxes. Non-GAAP results are presented for supplemental informational purposes only and should not be considered a substitute for financial information presented in accordance with generally accepted accounting principles, or GAAP, and may be different from non-GAAP measures used by other companies. eGain’s management uses these non-GAAP measures to compare our performance to that of prior periods for trend analysis and for budgeting and planning purposes. eGain believes that the use of these non-GAAP financial measures provides an additional tool for investors to use in evaluating ongoing operating results and trends and in comparing our financial measures with other software companies, many of which present similar non-GAAP financial measures to investors, and that it allows for greater transparency with respect to key metrics used by management in our financial and operational decision-making. Reconciliation tables of the most comparable GAAP financial measures to the non-GAAP financial measures used in this press release are included with the financial tables at the end of this release. eGain urges investors to review the reconciliation and not to rely on any single financial measure to evaluate our business. In addition, this presentation includes eGain’s projected non-GAAP net income for future periods, a non-GAAP measure used to describe eGain’s expected performance. We have not presented a reconciliation to eGain’s projected net income, the most comparable GAAP financial measure, because the reconciliations could not be prepared without unreasonable effort. The information necessary to prepare the reconciliations is not available on a forward-looking basis and cannot be accurately predicted. The unavailable information could have a significant impact on the calculation of the comparable GAAP financial measure.

    Conference Call Information

    eGain will discuss its fiscal 2024 first quarter results today via a teleconference at 2:00 p.m. Pacific Time. To access the live call, dial 844-481-2704 (U.S. toll free) or +1 412-317-0660 (International) and ask to join the eGain earnings call. A live and archived webcast of the call will also be accessible on the “Investor relations” section of eGain’s website at www.eGain.com. In addition, a phone replay of the conference call will be available starting two hours after the call and will remain in effect for one week. To access the phone replay, dial 877-344-7529 (U.S. toll free) or +1 412-317-0088 (International). The replay access code is 9305614.

    About eGain

    eGain Knowledge Hub automates and orchestrates customer engagement across touch points. Powered by AI and analytics, our secure cloud solution delivers personalized digital-first experiences, quick business value, and easy innovation. Visit www.eGain.com for more info.

    Cautionary Note Regarding Forward-Looking Statements

    This press release contains forward-looking statements within the meaning of the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995, including without limitation: our financial guidance for the second quarter of fiscal 2024 and fiscal 2024 full year ending June 30, 2024; our market opportunity; and statements regarding the timing, scope, and funding of our stock repurchase program. The achievement or success of the matters covered by such forward-looking statements, including future financial guidance, involves risks, uncertainties, and assumptions, many of which involve factors or circumstances that are beyond our control. If any such risks or uncertainties materialize or if any of the assumptions prove incorrect, our actual results could differ materially from the results expressed or implied by the forward-looking statements we make, including our ability to achieve our targets for the second quarter of fiscal 2024 and fiscal 2024 full year ending June 30, 2024. The risks and uncertainties referred to above include, but are not limited to: risks to our business, operating results, and financial condition; risks associated with new product releases and new services and products features; risks that customer demand may fluctuate or decrease; risks that we are unable to collect unbilled contractual commitments, particularly in the current economic environment; risks that our lengthy sales cycles may negatively affect our operating results; currency risks; our ability to capitalize on customer engagement; risks related to our reliance on a relatively small number of customers for a substantial portion of our revenue; our ability to compete successfully and manage growth; our ability to develop and expand strategic and third party distribution channels; risks related to our international operations; our ability to continue to innovate; our strategy of making investments in sales to drive growth; general political or destabilizing events, including war, intensified international hostilities, conflict or acts of terrorism; the effect of legislative initiatives or proposals, statutory changes, governmental or other applicable regulations and/or changes in industry requirements, including those addressing data privacy, cyber-security and cross-border data transfers; and other risks detailed from time to time in eGain’s public filings, including eGain’s annual report on Form 10-K for the fiscal year ended June 30, 2023 and subsequent reports filed with the Securities and Exchange Commission, which are available on the Securities and Exchange Commission’s website at www.sec.gov. These forward-looking statements are based on current expectations and speak only as of the date hereof. We assume no obligation and do not intend to update these forward-looking statements, except as required by law.

    eGain, the eGain logo, and all other eGain product names and slogans are trademarks or registered trademarks of eGain Corporation in the United States and/or other countries. All other company names and products mentioned in this release may be trademarks or registered trademarks of the respective companies.

    MKR Investor Relations
    Todd Kehrli or Jim Byers
    Phone: 323-468-2300
    Email: egan@mkr-group.com

    eGain Corporation
    Condensed Consolidated Balance Sheets
    (in thousands, except par value data)
    (unaudited)

     September 30,  June 30, 
     2023    2023
    ASSETS     
    Current assets:     
    Cash and cash equivalents$79,827  $73,201 
    Restricted cash 7   7 
    Accounts receivable, less provision for credit losses of $121 and $237 as of September 30, 2023 and June 30, 2023, respectively 18,420   31,569 
    Costs capitalized to obtain revenue contracts, net 1,231   1,317 
    Prepaid expenses 2,578   2,466 
    Other current assets 1,304   1,268 
    Total current assets 103,367   109,828 
    Property and equipment, net 551   633 
    Operating lease right-of-use assets 2,497   2,797 
    Costs capitalized to obtain revenue contracts, net of current portion 1,938   2,318 
    Goodwill 13,186   13,186 
    Other assets, net 1,427   1,355 
    Total assets$122,966  $130,117 
          
    LIABILITIES AND STOCKHOLDERS' EQUITY      
    Current liabilities:     
    Accounts payable$853  $2,044 
    Accrued compensation 5,931   7,697 
    Accrued liabilities 4,406   5,387 
    Operating lease liabilities 689   832 
    Deferred revenue 41,959   47,762 
    Total current liabilities 53,838   63,722 
    Deferred revenue, net of current portion 2,413   2,101 
    Operating lease liabilities, net of current portion 1,617   1,762 
    Other long-term liabilities 833   836 
    Total liabilities 58,701   68,421 
    Stockholders' equity:     
    Common stock, par value $0.001 - authorized: 60,000 shares; issued: 32,269 and 32,268 shares; outstanding: 31,400 and 31,482 shares as of September 30, 2023 and June 30, 2023, respectively 32   32 
    Additional paid-in capital 402,299   401,087 
    Treasury stock, at cost: 869 and 786 common shares as of September 30, 2023 and June 30, 2023, respectively. (6,280)  (5,763)
    Notes receivable from stockholders (64)  (97)
    Accumulated other comprehensive loss (2,877)  (2,122)
    Accumulated deficit (328,845)  (331,441)
    Total stockholders' equity 64,265   61,696 
    Total liabilities and stockholders' equity$122,966  $130,117 
            

    eGain Corporation
    Condensed Consolidated Statements of Operations
    (in thousands, except per share data)
    (unaudited)

     Three Months Ended
     September 30, 
     2023    2022
    Revenue:     
    Subscription$22,323  $22,923 
    Professional services 1,853   1,840 
    Total revenue 24,176   24,763 
    Cost of revenue:     
    Cost of subscription 5,047   3,978 
    Cost of professional services 1,791   2,304 
    Total cost of revenue 6,838   6,282 
    Gross profit 17,338   18,481 
          
    Operating expenses:     
    Research and development 6,632   6,874 
    Sales and marketing 6,104   9,459 
    General and administrative 3,186   2,818 
    Total operating expenses 15,922   19,151 
    Income (loss) from operations 1,416   (670)
    Interest income 949   286 
    Other income, net 610   810 
    Income before income tax provision 2,975   426 
    Income tax provision (379)  (442)
    Net income (loss)$2,596  $(16)
          
    Per share information:     
    Earnings (loss) per share:     
    Basic$0.08  $(0.00)
    Diluted$0.08  $(0.00)
    Weighted-average shares used in computation:     
    Basic 31,479   31,933 
    Diluted 32,136   31,933 
          
    Summary of stock-based compensation included in costs and expenses above:     
    Cost of revenue$297  $430 
    Research and development 397   571 
    Sales and marketing 159   531 
    General and administrative 355   533 
    Total stock-based compensation$1,208  $2,065 
          

    eGain Corporation
    GAAP to Non-GAAP Reconciliation Table
    (in thousands, except per share data)
    (unaudited)

     Three Months Ended
    September 30,
     2023 2022
    Income (loss) from operations$1,416  $(670)
    Add:      
    Stock-based compensation 1,208   2,065 
    Non-GAAP income from operations$2,624  $1,395 


     Three Months Ended
    September 30,
     2023 2022
    Net income (loss)$2,596  $(16)
    Add:      
    Stock-based compensation 1,208   2,065 
    Non-GAAP net income$3,804  $2,049 
           
    Per share information:      
    Non-GAAP earnings per share:      
    Basic$0.12  $0.06 
    Diluted$0.12  $0.06 
    Weighted-average shares used in computation:      
    Basic 31,479   31,933 
    Diluted 32,136   32,891 


     Three Months Ended
     September 30,
     2023 2022
    Net income (loss)$2,596  $(16)
    Add:     
    Depreciation and amortization 107   126 
    Stock-based compensation expense 1,208   2,065 
    Interest income (949)  (286)
    Provision for income taxes 379   442 
    Other income, net (610)  (810)
    Severance and related charges 81   65 
    Adjusted EBITDA$2,812  $1,586 
            

    eGain Corporation
    Other GAAP to Non-GAAP Supplemental Financial Information
    (in thousands)
    (unaudited)

     Three Months Ended
    September 30,
     Growth Rates Constant Currency Growth Rates [1]
     2023 2022      
    Revenue:           
    SaaS revenue$22,256  $22,628   (2%)  (3%)
    Legacy revenue 67   295   (77%)  (78%)
    GAAP subscription 22,323   22,923   (3%)  (4%)
    GAAP professional services 1,853   1,840   1%  (1%)
    Total GAAP revenue$24,176  $24,763   (2%)  (4%)
                
    SaaS and professional services revenue:           
    SaaS revenue$22,256  $22,628   (2%)  (3%)
    Professional Services 1,853   1,840   1%  (1%)
    Total SaaS and professional services revenue$24,109  $24,468   (1%)  (3%)
                
    Cost of Revenue:           
    GAAP subscription$5,047  $3,978       
    Add back:           
    Non-GAAP subscription$5,047  $3,978       
                
    GAAP professional services$1,791  $2,304       
    Add back:           
    Stock-based compensation (297)  (430)      
    Non-GAAP professional services$1,494  $1,874       
                
    GAAP total cost of revenue$6,838  $6,282       
    Add back:           
    Stock-based compensation (297)  (430)      
    Non-GAAP total cost of revenue$6,541  $5,852   12%  11%
                
    Gross Profit:           
    Non-GAAP subscription$17,276  $18,945       
    Non-GAAP professional services 359   (34)      
    Non-GAAP gross profit$17,635  $18,911   (7%)  (9%)
                
    Operating expenses:           
    GAAP research and development$6,632  $6,874       
    Add back:           
    Stock-based compensation expense (397)  (571)      
    Non-GAAP research and development$6,235  $6,303   (1%)  (1%)
                
    GAAP sales and marketing$6,104  $9,459       
    Add back:           
    Stock-based compensation expense (159)  (531)      
    Non-GAAP sales and marketing$5,945  $8,928   (33%)  (35%)
                
    GAAP general and administrative$3,186  $2,818       
    Add back:           
    Stock-based compensation expense (355)  (533)      
    Non-GAAP general and administrative$2,831  $2,285   24%  22%
                
    GAAP operating expenses$15,922  $19,151       
    Add back:           
    Stock-based compensation expense (911)  (1,635)      
    Non-GAAP operating expenses$15,011  $17,516   (14%)  (15%)
                    

    [1] Constant currency growth rates presented are derived from converting the current period results for entities reporting in currencies other than U.S. Dollars into U.S. Dollars at the exchange rates in effect during the prior period presented rather than the actual exchange rates in effect during the current period.


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