Sunnyvale, California (November 09, 2011) – eGain Communications (NASDAQ: EGAN), a leading provider of cloud and on-premise customer interaction hub software, today announced financial results for its fiscal 2012 first quarter ended September 30, 2011.
“We are pleased with the strong growth in our recurring revenue, especially our hosting revenue which was up 38% year over year,” said Ashutosh Roy eGain’s CEO. “We knew it would be difficult to match new bookings from the year-ago quarter, which included signing the largest license deal in the company’s history. However, while our bookings are off to a seasonally slow start, our sales pipeline is building nicely for the year. We see good demand for our eGain 10 offering that features an interactive sales suite unified with robust multichannel service. Our direct sales expansion is proceeding to plan. We expect to double our sales capacity in calendar 2011.”
Fiscal first quarter total revenue was $10.4 million, a decrease of 21% from the comparable year-ago quarter. License revenue for the fiscal first quarter was $2.9 million, a decrease of 61% from the comparable year-ago quarter. The year-over-year decrease in total and license revenue is directly attributable to a large one-time license fee received in the first quarter of fiscal 2011 that represented the largest license agreement in the company’s history. Recurring revenue for the fiscal first quarter was $5.8 million, an increase of 30% over the comparable year-ago quarter. Professional services revenue for the fiscal first quarter was $1.7 million, an increase of 35% from the comparable year-ago quarter.
Gross profit for the fiscal first quarter was $7.6 million, a decrease of 29% from the comparable year-ago quarter. Gross margin for the fiscal first quarter decreased to 73%, from 81% in the comparable year-ago quarter. This decrease was due to the decrease in license revenue as a percent of total revenue. The gross margins for both recurring revenue and professional services improved when compared to the year-ago quarter. The recurring revenue gross margin for the first fiscal quarter increased to 78%, from 72% in the comparable year-ago quarter. The professional services gross margin for the first fiscal quarter increased to 10%, from 4% in the comparable year-ago quarter.
Net income for the fiscal first quarter was $574,000, or $0.02 per share on a basic and diluted basis, compared to $4.8 million, or $0.22 per share on a basic and diluted basis, for the comparable year-ago quarter. Net income for the fiscal first quarter included stock-based compensation expense of $130,000 and interest and tax expense of $206,000, compared to stock-based compensation expense of $54,000 and interest and tax expense of $315,000, in the comparable year-ago quarter.
Total cash and cash equivalents increased to $15.4 million at September 30, 2011, from $12.4 million at June 30, 2011. Cash provided by operations was $4.3 million for the fiscal first quarter, compared to cash used in operations of $600,000 for the comparable year-ago quarter. Deferred revenue increased to $7.0 million at September 30, 2011, compared to $5.8 million at June 30, 2011.
¹We define Gross Bookings as contractual commitments (including new hosting bookings, new license bookings, new support bookings, billed professional services and hosting and support renewals) received by the company. We define New Bookings as new contractual commitments (including new hosting bookings and new license and support bookings) received by the company. Such contracts are not cancelable for convenience but may be subject to termination by our customers for cause or breach of contract by us. As we offer a hybrid delivery model, the mix of new hosting and license business in a quarter could have an impact on our revenue in a particular quarter. Due to effects that these trends have on our short-term revenue and profitability, we believe that it is useful to disclose the bookings detail in this and future financial releases. We use these bookings metrics internally to focus management on the productivity of the sales team and period-to-period changes in our core business. Therefore, we believe that this information is meaningful and helpful in allowing individuals to better assess the ongoing nature of our core operations.
eGain will discuss its quarterly results today via teleconference at 5:00 p.m. Eastern Standard Time. To access the live call, please dial (866) 282-2803, or outside the U.S. (703) 639-1266, at least five minutes prior to the start time. A live webcast of the call can be accessed from the investors section at www.egain.com. An audio replay of the conference call can be accessed at (888) 266-2081 (U.S. toll-free) or (703) 925-2533 (international). The replay will be available starting two hours after the call and remain in effect for one week. The required pass code is #11556861. An archive of the webcast will also be available on the investors section at www.egain.com.
eGain (EGAN) is the leading provider of customer service and contact center software for cloud and on-premise deployment. Trusted by prominent enterprise worldwide, eGain has been helping businesses achieve and sustain customer service excellence for more than a decade.
To find out more about eGain, visit www.eGain.com or call the company’s offices: 800-821-4358 (United States), 1753-464646 (UK and Continental Europe).
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Cautionary Note Regarding Forward-looking Statements
All statements in this release that involve eGain’s forecasts (including the above stated guidance), beliefs, projections, expectations, including but not limited to our financial performance and guidance, the anticipated growth of our business, market trends, plans to invest in our business and expectations regarding the market acceptance of our products, are forward-looking statements within the meaning of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements, which are based on information available to eGain at the time of this release, are not guarantees of future results; rather, they are subject to risks and uncertainties that may cause actual results to differ materially from those set forth in this release. These risks include, but are not limited to, the uncertainty of demand for eGain products, including our guidance regarding bookings and revenue; our expectations related to our operations; our ability to invest resources to improve our products and continue to innovate; our partnerships; our future markets; and other risks detailed from time to time in eGain’s filings with the Securities and Exchange Commission, including eGain’s annual report on Form 10-K filed on September 27, 2011, and eGain’s quarterly reports on Form 10-Q. eGain assumes no obligation to update these forward-looking statements.
Note: eGain is a registered trademark, and the other eGain product and service names appearing in this release are trademarks or service marks, of eGain Communications Corp. All other company names and products are trademarks or registered trademarks of their respective companies.
Charles Messman or Todd Kehrli
MKR Group, Inc