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

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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.


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