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eGain Reports Record Revenue in Second Quarter of Fiscal 2022, Up 20% Year Over Year, and Raises Revenue Guidance for Full Fiscal Year

·15 min read

SUNNYVALE, Calif., Feb. 03, 2022 (GLOBE NEWSWIRE) -- eGain (NASDAQ: EGAN), a leading cloud platform provider of customer engagement automation, today announced financial results for its fiscal 2022 second quarter ended December 31, 2021.

“Strong bookings drove record revenue in the quarter, well ahead of our guidance and consensus estimates,” said Ashu Roy, eGain’s CEO. “Knowledge management is the #1 technology recommended by Gartner for Customer Service in 2022. We are leading the charge to add omnichannel solve capabilities to customer engagement with the eGain Knowledge Hub. Also, we heartily congratulate BT Consumer, one of our marquee clients, for winning the 2021 KM Reality award. And we thank the IRS whose agency sponsorship helped us receive FedRAMP authorization for our SaaS suite.”

Fiscal 2022 Second Quarter Financial Highlights

  • Total revenue was $23.1 million, up 20% year over year.

  • SaaS revenue was $20.5 million, up 26% year over year.

  • Subscription non-GAAP gross margin was 83%, up 100 basis points year over year.

  • Total non-GAAP gross margin was 78%, up 200 basis points year over year.

  • GAAP net loss was $826,000, or $0.03 per share on a basic and diluted basis, compared to GAAP net income of $1.6 million, or $0.05 per share on a basic and diluted basis, in Q2 2021.

  • Non-GAAP net income was $3.0 million, or $0.10 per share on a basic and diluted basis, compared to non-GAAP net income of $2.0 million, or $0.07 per share on a basic basis and $0.06 per share on a diluted basis, in Q2 2021.

  • Total cash and cash equivalents were $68.5 million, compared to $54.2 million in Q2 2021.

Fiscal 2022 First Six Months Financial Highlights

  • Total revenue was $44.5 million, up 16% year over year.

  • SaaS revenue was $39.6 million, up 23% year over year.

  • Subscription non-GAAP gross margin was 83%, up 100 basis points year over year.

  • Total non-GAAP gross margin was 78%, up 200 basis points year over year.

  • GAAP net loss was $275,000, or $0.01 per share on a basic and diluted basis, compared to GAAP net income of $3.7 million, or $0.12 per share on a basic basis and $0.11 per share on a diluted basis, in Q2 2021.

  • Non-GAAP net income was $5.7 million, or $0.18 per share on a basic and diluted basis, compared to non-GAAP net income of $4.6 million, or $0.15 per share on a basic basis and $0.14 per share on a diluted basis, in Q2 2021.

  • Cash provided from operations was $4.7 million, or an operating cash flow margin of 11%.

Fiscal 2022 Third Quarter Financial Guidance

For the third quarter of fiscal 2022 ending March 31, 2022, eGain expects:

  • Total revenue of between $22.9 million to $23.5 million, representing growth of 16% to 19% year over year.

  • GAAP net loss of $3.0 million to $4.0 million, or $0.10 to $0.13 per share.

    • Includes stock-based compensation expense of approximately $3.0 million.

    • Includes depreciation and amortization of approximately $120,000.

  • Non-GAAP net loss of breakeven to $1.0 million, or $0.00 to $0.03 per share.

Fiscal 2022 Financial Guidance

For the fiscal 2022 full year ending June 30, 2022, eGain expects:

  • Total revenue of between $90.5 million to $92.0 million, representing growth of 16% to 18% year over year and is an increase from its previous annual revenue guidance of $89.0 million to $90.5 million.

  • GAAP net loss of $9.0 million to $10.5 million, or $0.29 to $0.33 per share.

    • Includes stock-based compensation expense of approximately $12.0 million.

    • Includes depreciation and amortization of approximately $500,000.

  • Non-GAAP net income of $1.5 million to $3.0 million, or $0.05 to $0.10 per share.

Guidance Assumption:

  • Basic and diluted weighted average shares outstanding are expected to be approximately 31.5 million for the third quarter of fiscal 2022 and 31.4 million for fiscal year 2022.

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 and non-GAAP gross margin. Such non-GAAP financial measures are adjusted for stock-based compensation expense and amortization of acquired intangible assets. 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, and may be different from non-GAAP measures used by other companies. eGain’s management uses these non-GAAP measures to compare the Company’s 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 the Company’s 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 its 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 the Company’s business.

Conference Call Information

eGain will discuss its fiscal 2022 second quarter results today via teleconference at 2:00 p.m. Pacific Time. To access the live call, dial 888-204-4368 (US and Canada) or +1 773-305-6853 (international) and give the participant passcode 7733025. A live and archived webcast of the call will also be accessible on the “Investor relations” section of the Company’s website at www.egain.com. In addition, a phone replay will be available approximately two hours following the end of the call and will remain available for one week. To access the replay dial-in information, please click here.

About eGain

Our knowledge-powered customer engagement software automates digital-first, omnichannel experiences for global brands. Infused with AI and analytics, eGain’s top-rated cloud platform enables effortless customer journeys with virtual assistance, customer self-service, and modern agent tools. To learn more, visit www.egain.com.

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 third quarter of fiscal 2022 ending March 31, 2022 and full year of fiscal 2022 ending June 30, 2022; our continued investment in sales and marketing and market opportunity; and expectations regarding our growth prospects. 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, the Company’s 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 third quarter of fiscal 2022 ending March 31, 2022 and full year of fiscal 2022 ending June 30, 2022. The risks and uncertainties referred to above include, but are not limited to: risks to our business, operating results, financial condition, and prospects from the COVID-19 pandemic and related economic downturns, including but not limited to, its effect on customer demand for the Company’s products and services and the impact of potential delays in customer payments; 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 filed on September 10, 2021 and subsequent reports filed with the Securities and Exchange Commission, which are available on the Securities and Exchange Commission’s web site at www.sec.gov. These forward-looking statements are based on current expectations and speak only as of the date hereof. The Company assumes no obligation and does 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)
(unaudited)

December 31,

June 30,

2021

2021

ASSETS

Current assets:

Cash and cash equivalents

$

68,481

$

63,231

Restricted cash

7

7

Accounts receivable, less allowance for doubtful accounts of $227 and $384 as of December 31, 2021 and June 30, 2021, respectively

14,773

26,311

Costs capitalized to obtain revenue contracts, net

1,473

1,323

Prepaid expenses

1,916

3,028

Other current assets

842

778

Total current assets

87,492

94,678

Property and equipment, net

750

705

Operating lease right-of-use assets

4,420

2,191

Costs capitalized to obtain revenue contracts, net of current portion

3,102

2,612

Goodwill

13,186

13,186

Other assets, net

1,378

1,191

Total assets

$

110,328

$

114,563

LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:

Accounts payable

$

1,580

$

3,068

Accrued compensation

6,396

8,444

Accrued liabilities

2,978

4,352

Operating lease liabilities

1,178

1,466

Deferred revenue

39,009

46,211

Total current liabilities

51,141

63,541

Deferred revenue, net of current portion

2,543

3,332

Operating lease liabilities, net of current portion

3,091

797

Other long-term liabilities

889

832

Total liabilities

57,664

68,502

Commitments and contingencies

Stockholders' equity:

Common stock, par value $0.001 - authorized: 60,000 and 50,000 shares; outstanding: 31,493 and 31,231 shares as of December 31, 2021 and June 30, 2021, respectively

31

31

Additional paid-in capital

385,467

378,451

Notes receivable from stockholders

(94

)

(92

)

Accumulated other comprehensive loss

(1,356

)

(1,220

)

Accumulated deficit

(331,384

)

(331,109

)

Total stockholders' equity

52,664

46,061

Total liabilities and stockholders' equity

$

110,328

$

114,563

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

Three Months Ended

Six Months Ended

December 31,

December 31,

2021

2020

2021

2020

Revenue:

Subscription

$

21,306

$

17,699

$

41,451

$

35,447

Professional services

1,787

1,534

3,092

2,849

Total revenue

23,093

19,233

44,543

38,296

Cost of revenue:

Cost of subscription

3,521

3,248

7,008

6,470

Cost of professional services

2,580

1,463

4,392

2,873

Total cost of revenue

6,101

4,711

11,400

9,343

Gross profit

16,992

14,522

33,143

28,953

Operating expenses:

Research and development

6,186

4,508

11,795

9,013

Sales and marketing

8,155

6,266

15,558

11,897

General and administrative

3,281

1,852

5,730

3,796

Total operating expenses

17,622

12,626

33,083

24,706

(Loss) Income from operations

(630

)

1,896

60

4,247

Interest income, net

2

2

4

6

Other expense, net

(29

)

(160

)

(19

)

(323

)

(Loss) Income before income tax provision

(657

)

1,738

45

3,930

Income tax provision

(169

)

(132

)

(320

)

(280

)

Net (loss) income

$

(826

)

$

1,606

$

(275

)

$

3,650

Per share information:

(Loss) Earnings per share:

Basic

$

(0.03

)

$

0.05

$

(0.01

)

$

0.12

Diluted

$

(0.03

)

$

0.05

$

(0.01

)

$

0.11

Weighted-average shares used in computation:

Basic

31,430

30,967

31,355

30,910

Diluted

31,430

32,732

31,355

32,605

Stock-based compensation included in above costs and expenses:

Cost of revenue

$

1,006

$

80

$

1,524

$

155

Research and development

988

144

1,527

302

Sales and marketing

750

175

1,259

306

General and administrative

1,077

27

1,618

133

$

3,821

$

426

$

5,928

$

896

Amortization of intangible assets included in above costs and expenses:

Cost of revenue

$

$

$

$

26

$

$

$

$

26

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

Three Months Ended
December 31,

Six Months Ended
December 31,

2021

2020

2021

2020

(Loss) Income from operations

$

(630

)

$

1,896

$

60

$

4,247

Add:

Stock-based compensation

3,821

426

5,928

896

Amortization of intangibles assets

26

Non-GAAP income from operations

$

3,191

$

2,322

$

5,988

$

5,169

Net (loss) income

$

(826

)

$

1,606

$

(275

)

$

3,650

Add:

Stock-based compensation

3,821

426

5,928

896

Amortization of intangibles assets

26

Non-GAAP net income

$

2,995

$

2,032

$

5,653

$

4,572

Per share information:

Non-GAAP earnings per share:

Basic

$

0.10

$

0.07

$

0.18

$

0.15

Diluted

$

0.10

$

0.06

$

0.18

$

0.14

Weighted-average shares used in computation:

Basic

31,430

30,967

31,355

30,910

Diluted

31,430

32,732

31,355

32,605

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

Three Months Ended
December 31,

Growth Rates

Constant Currency
Growth Rates [1]

2021

2020

Revenue:

SaaS revenue

$

20,451

$

16,177

26

%

26

%

Legacy revenue

855

1,522

(44

%)

(44

%)

GAAP subscription

21,306

17,699

20

%

20

%

GAAP professional services

1,787

1,534

16

%

16

%

Total GAAP revenue

$

23,093

$

19,233

20

%

19

%

SaaS and professional services revenue:

SaaS revenue

$

20,451

$

16,177

26

%

26

%

Professional Services

1,787

1,534

16

%

16

%

Total SaaS and professional services revenue

$

22,238

$

17,711

26

%

25

%

Cost of Revenue:

GAAP subscription

$

3,521

$

3,248

Add back:

Non-GAAP subscription

$

3,521

$

3,248

GAAP professional services

$

2,580

$

1,463

Add back:

Stock-based compensation

(1,006

)

(80

)

Non-GAAP professional services

$

1,574

$

1,383

GAAP total cost of revenue

$

6,101

$

4,711

Add back:

Stock-based compensation

(1,006

)

(80

)

Non-GAAP total cost of revenue

$

5,095

$

4,631

10

%

10

%

Gross Profit:

Non-GAAP subscription

$

17,785

$

14,451

Non-GAAP professional services

213

151

Non-GAAP gross profit

$

17,998

$

14,602

23

%

22

%

Operating expenses:

GAAP research and development

$

6,186

$

4,508

Add back:

Stock-based compensation expense

(988

)

(144

)

Non-GAAP research and development

$

5,198

$

4,364

19

%

19

%

GAAP sales and marketing

$

8,155

$

6,266

Add back:

Stock-based compensation expense

(750

)

(175

)

Non-GAAP sales and marketing

$

7,405

$

6,091

22

%

21

%

GAAP general and administrative

$

3,281

$

1,852

Add back:

Stock-based compensation expense

(1,077

)

(27

)

Non-GAAP general and administrative

$

2,204

$

1,825

21

%

20

%

GAAP operating expenses

$

17,622

$

12,626

Add back:

Stock-based compensation expense

(2,815

)

(346

)

Non-GAAP operating expenses

$

14,807

$

12,280

21

%

20

%

[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.


eGain Corporation

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

Six Months Ended
December 31,

Growth Rates

Constant Currency
Growth Rates [1]

2021

2020

Revenue:

SaaS

$

39,645

$

32,148

23

%

22

%

Legacy revenue

1,806

3,299

(45

%)

(47

%)

GAAP subscription

41,451

35,447

17

%

16

%

GAAP professional services

3,092

2,849

9

%

7

%

Total GAAP revenue

$

44,543

$

38,296

16

%

15

%

SaaS and professional services revenue:

SaaS

$

39,645

$

32,148

23

%

22

%

Professional Services

3,092

2,849

9

%

7

%

Total SaaS and professional services revenue

$

42,737

$

34,997

22

%

21

%

Cost of Revenue:

GAAP subscription

$

7,008

$

6,470

Add back:

Amortization of intangible assets

(26

)

Non-GAAP subscription

$

7,008

$

6,444

GAAP professional services

$

4,392

$

2,873

Add back:

Stock-based compensation

(1,524

)

(155

)

Non-GAAP professional services

$

2,868

$

2,718

GAAP total cost of revenue

$

11,400

$

9,343

Add back:

Stock-based compensation

(1,524

)

(155

)

Amortization of intangible assets

(26

)

Non-GAAP total cost of revenue

$

9,876

$

9,162

8

%

7

%

Gross Profit:

Non-GAAP subscription

$

34,443

$

29,003

Non-GAAP professional services

224

131

Non-GAAP gross profit

$

34,667

$

29,134

19

%

18

%

Operating expenses:

GAAP research and development

$

11,795

$

9,013

Add back:

Stock-based compensation expense

(1,527

)

(302

)

Non-GAAP research and development

$

10,268

$

8,711

18

%

17

%

GAAP sales and marketing

$

15,558

$

11,897

Add back:

Stock-based compensation expense

(1,259

)

(306

)

Non-GAAP sales and marketing

$

14,299

$

11,591

23

%

22

%

GAAP general and administrative

$

5,730

$

3,796

Add back:

Stock-based compensation expense

(1,618

)

(133

)

Non-GAAP general and administrative

$

4,112

$

3,663

12

%

11

%

GAAP operating expenses

$

33,083

$

24,706

Add back:

Stock-based compensation expense

(4,404

)

(741

)

Non-GAAP operating expenses

$

28,679

$

23,965

20

%

19

%

[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.