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eGain Reports SaaS Revenue Growth of 19% for First Nine Months of Fiscal 2021

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eGain (NASDAQ: EGAN) reported strong financial results for Q3 of fiscal 2021, with SaaS revenue reaching $16.9 million, up 14% year over year. Total revenue increased by 8% to $19.7 million. Non-GAAP gross margins also improved, with subscription margins at 82%. Despite a decrease in GAAP net income to $1.3 million ($0.04 per diluted share), the company celebrated a 63% year-over-year rise in million-dollar SaaS customers and launched its AI-driven Virtual Financial Coach, now piloted by over 25 credit unions. Fiscal 2021 guidance projects SaaS revenue of $66.0-$66.4 million, anticipating 16%-17% growth.

Positive
  • SaaS revenue rose to $16.9 million, 14% increase year over year.
  • Total revenue increased to $19.7 million, an 8% growth.
  • 63% year-over-year growth in million-dollar SaaS customers.
  • Non-GAAP gross margin improved to 76%, up 500 basis points.
Negative
  • GAAP net income decreased to $1.3 million from $1.9 million year over year.
  • Non-GAAP net income fell to $1.6 million from $2.4 million year over year.

SUNNYVALE, Calif., May 11, 2021 (GLOBE NEWSWIRE) -- eGain (NASDAQ: EGAN), a leading provider of digital customer engagement solutions, today announced financial results for its fiscal 2021 third quarter ended March 31, 2021.

“We delivered strong financial results in the third quarter, ahead of guidance and street consensus” said Ashu Roy, eGain’s CEO. “Our SaaS logo wins were up more than 100% year over year for both the third quarter and year to date. We grew the number of our million-dollar SaaS customers by 63% year over year. In March, we launched our Virtual Financial Coach, an AI-powered proactive engagement solution. It is now being piloted by over 25 credit unions across the country.”

Fiscal 2021 Third Quarter Financial Highlights

  • SaaS revenue was $16.9 million, up 14% year over year.
  • Total revenue was $19.7 million, up 8% year over year.
  • Subscription non-GAAP gross margin was 82%, up 400 basis points year over year.
  • Total non-GAAP gross margin was 76%, up 500 basis points year over year.
  • GAAP net income was $1.3 million, or $0.04 per diluted share, compared to GAAP net income of $1.9 million, or $0.06 per diluted share, in the year ago quarter.
  • Non-GAAP net income was $1.6 million, or $0.05 per diluted share, compared to non-GAAP net income of $2.4 million, or $0.07 per diluted share, in the year ago quarter.
  • Total cash and cash equivalents were $53.4 million, compared to $40.7 million, in the year ago quarter.

Fiscal 2021 First Nine Months Financial Highlights

  • SaaS revenue was $49.0 million, up 19% year over year.
  • Total revenue was $58.0 million, up 8% year over year, with 92% being subscription based.
  • Subscription non-GAAP gross margin was 82%, up 400 basis points year over year.
  • Total non-GAAP gross margin was 76%, up 500 basis points year over year.
  • GAAP net income was $4.9 million, or $0.15 per diluted share, compared to GAAP net income of $5.1 million, or $0.16 per diluted share, in the year ago quarter.
  • Non-GAAP net income was $6.2 million, or $0.19 per diluted share, compared to non-GAAP net income of $6.7 million, or $0.21 per diluted share, in the year ago quarter.
  • Cash provided by operations was $5.0 million, or 9% operating cash flow margin.

Fiscal 2021 Financial Guidance

For the fiscal 2021 full year ending June 30, 2021, eGain expects:

  • SaaS revenue of between $66.0 million to $66.4 million, which would represent growth of 16% to 17% year over year.
  • Total revenue of between $77.3 million to $77.9 million, which would represent growth of 6% to 7% year over year.
  • GAAP net income of $4.4 million to $5.3 million, or $0.13 to $0.16 per share.
  • Non-GAAP net income of $6.2 million to $7.1 million, or $0.19 to $0.22 per share.

Guidance Assumptions:

  • Includes stock-based compensation expense of approximately $500,000.
  • Includes depreciation and amortization of approximately $100,000.
  • Weighted average shares outstanding of approximately $32.7 million.

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 2021 third quarter results today via teleconference at 2:00 p.m., Pacific Time. To access the live call, dial 800-367-2403 (US and Canada) or +1 334-777-6978 (international) and give the participant passcode 6020236. 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

eGain customer engagement solutions deliver digital transformation for leading brands – powered by virtual assistance, AI, knowledge, and analytics. Our comprehensive suite of applications helps clients deliver memorable, digital-first customer experiences in an omnichannel world. To find out more about eGain, visit http://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. These forward-looking statements are based on current expectations and include our expectations with respect to revenue and GAAP and non-GAAP net income for the fiscal year ending June 30, 2021. 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 fiscal year ending June 30, 2021. The risks and uncertainties referred to above include, but are not limited to: risks associated with current economic uncertainties tied to the COVID-19 pandemic, 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, conflict or acts of terrorism; the effect of evolving domestic and foreign government regulations, including those addressing data privacy 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 11, 2020 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 Corp. 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: 213-277-5550
Email: egan@mkr-group.com

 

       
eGain Corporation
Condensed Consolidated Balance Sheets
(in thousands)
(unaudited)
       
       
  March 31,  June 30, 
  2021
    2020
ASSETS      
Current assets:      
Cash and cash equivalents $53,413  $46,609 
Restricted cash  7   6 
Accounts receivable, net  16,016   22,708 
Costs capitalized to obtain revenue contracts, net  1,270   1,066 
Prepaid expenses  1,945   2,514 
Other current assets  647   617 
Total current assets  73,298   73,520 
Property and equipment, net  774   713 
Operating lease right-of-use assets  2,604   2,962 
Costs capitalized to obtain revenue contracts, net of current portion  2,511   2,380 
Intangible assets, net     26 
Goodwill  13,186   13,186 
Other assets  807   918 
Total assets $93,180  $93,705 
       
LIABILITIES AND STOCKHOLDERS' EQUITY       
Current liabilities:      
Accounts payable $1,112  $2,429 
Accrued compensation  7,413   7,916 
Accrued liabilities  3,030   3,423 
Operating lease liabilities  1,768   1,753 
Deferred revenue  31,704   36,644 
Total current liabilities  45,027   52,165 
Deferred revenue, net of current portion  3,814   4,826 
Operating lease liabilities, net of current portion  933   1,385 
Other long-term liabilities  817   688 
Total liabilities  50,591   59,064 
Commitments and contingencies      
Stockholders' equity:      
Common stock  31   31 
Additional paid-in capital  377,115   374,399 
Notes receivable from stockholders  (92)  (90)
Accumulated other comprehensive loss  (1,308)  (1,631)
Accumulated deficit  (333,157)  (338,068)
Total stockholders' equity  42,589   34,641 
Total liabilities and stockholders' equity $93,180  $93,705 
       


             
eGain Corporation
Condensed Consolidated Statements of Operations
(in thousands, except per share data)
(unaudited)
             
             
  Three Months Ended  Nine Months Ended
  March 31,  March 31, 
  2021
    2020
 2021
    2020
Revenue:            
Subscription $18,078  $16,919  $53,525  $48,834 
Professional services  1,665   1,435   4,514   4,865 
Total revenue  19,743   18,354   58,039   53,699 
Cost of revenue:            
Cost of subscription  3,341   3,739   9,811   11,046 
Cost of professional services  1,505   1,761   4,378   5,012 
Total cost of revenue  4,846   5,500   14,189   16,058 
Gross profit  14,897   12,854   43,850   37,641 
Operating expenses:            
Research and development  4,371   4,205   13,384   12,255 
Sales and marketing  6,927   5,064   18,824   14,622 
General and administrative  2,022   1,828   5,818   5,911 
Total operating expenses  13,320   11,097   38,026   32,788 
Income from operations  1,577   1,757   5,824   4,853 
Interest income, net  5   113   10   384 
Other income (expense), net  (378)  65   (700)  44 
Income before income tax (provision) benefit  1,204   1,935   5,134   5,281 
Income tax (provision) benefit  57   (68)  (223)  (224)
Net income $1,261  $1,867  $4,911  $5,057 
Per share information:            
Earnings per share:            
Basic $0.04  $0.06  $0.16  $0.17 
Diluted $0.04  $0.06  $0.15  $0.16 
Weighted-average shares used in computation:            
Basic  31,068   30,662   30,962   30,580 
Diluted  32,618   31,987   32,646   31,935 
             
Stock-based compensation included in above costs and expenses:            
Cost of revenue $88  $62  $243  $148 
Research and development  92   171   394   549 
Sales and marketing  169   144   475   422 
General and administrative  19   83   152   274 
  $368  $460  $1,264  $1,393 
             
Amortization of intangible assets included in above costs and expenses:            
Cost of revenue $  $67  $26  $201 
             


                 
eGain Corporation
GAAP to Non-GAAP Reconciliation Table
(in thousands)
(unaudited)
                 
                 
  Three Months Ended March 31, Nine Months Ended March 31,
  2021 2020 2021 2020
Income from operations $1,577  $1,757  $5,824  $4,853 
Add:                
Stock-based compensation  368   460   1,264   1,393 
Amortization of intangibles assets     67   26   201 
Non-GAAP income from operations $1,945  $2,284  $7,114  $6,447 
                 
Net income $1,261  $1,867  $4,911  $5,057 
Add:                
Stock-based compensation  368   460   1,264   1,393 
Amortization of intangibles assets     67   26   201 
Non-GAAP net income $1,629  $2,394  $6,201  $6,651 
Per share information:                
Non-GAAP earnings per share:                
Basic $0.05  $0.08  $0.20  $0.22 
Diluted $0.05  $0.07  $0.19  $0.21 
Weighted-average shares used in computation:                
Basic  31,068   30,662   30,962   30,580 
Diluted  32,618   31,987   32,646   31,935 
                 


 
eGain Corporation
Other GAAP to Non-GAAP Supplemental Financial Information
(in thousands)
(unaudited)
           
  Three Months Ended
March 31,
 Growth Rates Constant Currency
Growth Rates [1]
  2021
 2020
    
Revenue:          
SaaS revenue $16,875  $14,817  14% 11%
Legacy revenue  1,203   2,102  (43%) (45%)
GAAP subscription  18,078   16,919  7% 4%
GAAP professional services  1,665   1,435  16% 13%
Total GAAP revenue $19,743  $18,354  8% 5%
           
SaaS and professional services revenue:          
SaaS revenue $16,875  $14,817  14% 11%
Professional Services  1,665   1,435  16% 13%
Total SaaS and professional services revenue $18,540  $16,252  14% 11%
           
Cost of Revenue:          
GAAP subscription $3,341  $3,739     
Add back:          
Amortization of intangible assets     (67)    
Non-GAAP subscription $3,341  $3,672     
           
GAAP professional services $1,505  $1,761     
Add back:          
Stock-based compensation  (88)  (62)    
Non-GAAP professional services $1,417  $1,699     
           
GAAP total cost of revenue $4,846  $5,500     
Add back:          
Stock-based compensation  (88)  (62)    
Amortization of intangible assets     (67)    
Non-GAAP total cost of revenue $4,758  $5,371  (11%) (13%)
           
Gross Profit:          
Non-GAAP subscription $14,737  $13,247     
Non-GAAP professional services  248   (264)    
Non-GAAP gross profit $14,985  $12,983  15% 12%
           
Operating expenses:          
GAAP research and development $4,371  $4,205     
Add back:          
Stock-based compensation expense  (92)  (171)    
Amortization of acquired intangible assets          
Non-GAAP research and development $4,279  $4,034  6% 5%
           
GAAP sales and marketing $6,927  $5,064     
Add back:          
Stock-based compensation expense  (169)  (144)    
Amortization of acquired intangible assets          
Non-GAAP sales and marketing $6,758  $4,920  37% 35%
           
GAAP general and administrative $2,022  $1,828     
Add back:          
Stock-based compensation expense  (19)  (83)    
Amortization of acquired intangible assets          
Non-GAAP general and administrative $2,003  $1,745  15% 13%
           
GAAP operating expenses $13,320  $11,097     
Add back:          
Stock-based compensation expense  (280)  (398)    
Amortization of acquired intangible assets          
Non-GAAP operating expenses $13,040  $10,699  22% 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)
           
  Nine Months Ended
March 31,
 Growth Rates Constant Currency
Growth Rates [1]
  2021
 2020
    
Revenue:          
SaaS $49,023  $41,279  19% 17%
Legacy revenue  4,502   7,555  (40%) (41%)
GAAP subscription  53,525   48,834  10% 8%
GAAP professional services  4,514   4,865  (7%) (9%)
Total GAAP revenue $58,039  $53,699  8% 6%
           
SaaS and professional services revenue:          
SaaS $49,023  $41,279  19% 17%
Professional Services  4,514   4,865  (7%) (9%)
Total SaaS and professional services revenue $53,537  $46,144  16% 14%
           
Cost of Revenue:          
GAAP subscription $9,811  $11,046     
Add back:          
Amortization of intangible assets  (26)  (201)    
Non-GAAP subscription $9,785  $10,845     
           
GAAP professional services $4,378  $5,012     
Add back:          
Stock-based compensation  (243)  (148)    
Non-GAAP professional services $4,135  $4,864     
           
GAAP total cost of revenue $14,189  $16,058     
Add back:          
Stock-based compensation  (243)  (148)    
Amortization of intangible assets  (26)  (201)    
Non-GAAP total cost of revenue $13,920  $15,709  (11%) (12%)
           
Gross Profit:          
Non-GAAP subscription $43,740  $37,989     
Non-GAAP professional services  379   1     
Non-GAAP gross profit $44,119  $37,990  16% 14%
           
Operating expenses:          
GAAP research and development $13,384  $12,255     
Add back:          
Stock-based compensation expense  (394)  (549)    
Amortization of acquired intangible assets          
Non-GAAP research and development $12,990  $11,706  11% 11%
           
GAAP sales and marketing $18,824  $14,622     
Add back:          
Stock-based compensation expense  (475)  (422)    
Amortization of acquired intangible assets          
Non-GAAP sales and marketing $18,349  $14,200  29% 27%
           
GAAP general and administrative $5,818  $5,911     
Add back:          
Stock-based compensation expense  (152)  (274)    
Amortization of acquired intangible assets          
Non-GAAP general and administrative $5,666  $5,637  1% 0%
           
GAAP operating expenses $38,026  $32,788     
Add back:          
Stock-based compensation expense  (1,021)  (1,245)    
Amortization of acquired intangible assets          
Non-GAAP operating expenses $37,005  $31,543  17% 16%
           
[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.
           

FAQ

What were eGain's Q3 financial results for fiscal 2021?

eGain reported Q3 revenue of $19.7 million, an 8% increase year over year, with SaaS revenue at $16.9 million, rising 14%.

What is eGain's guidance for fiscal 2021?

For fiscal 2021, eGain expects SaaS revenue between $66.0 million and $66.4 million, projecting 16% to 17% growth year over year.

How did eGain's net income change in Q3 fiscal 2021?

GAAP net income decreased to $1.3 million, or $0.04 per diluted share, from $1.9 million, or $0.06 per diluted share, in the prior year.

What new product did eGain launch?

eGain launched its Virtual Financial Coach, an AI-driven proactive engagement solution, now piloted by over 25 credit unions.

eGain Corporation

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