eGain reports record revenue in first quarter of fiscal 2023, up 20% year over year
Announces $20 Million stock repurchase program
Sunnyvale, CA (November 14, 2022) – eGain (Nasdaq: EGAN), the leading AI knowledge platform for customer engagement automation, today announced financial results for its fiscal 2023 first quarter ended September 30, 2022.
“We delivered record revenue and top and bottom-line results that exceeded our guidance and street consensus,” said Ashu Roy, eGain’s CEO. “Inbound interest and market demand remain high for our industry-leading Knowledge Hub, as businesses continue to invest in improving agent experience and customer satisfaction technologies.”
“We are building a healthy new business pipeline, but in the current economic environment we see sales cycles lengthening, accordingly we are optimizing our growth and profitability targets for full year fiscal 2023 guidance. We remain excited about the tremendous market opportunity.
“As such, we are announcing a $20 million stock repurchase plan. Given our strong balance sheet and positive cash flow, we have sufficient reserves to invest in our long-term growth.”
Fiscal 2023 First Quarter Financial Highlights
- Total revenue was $24.8 million, up 15% year over year (20% in constant currency).
- SaaS revenue was $22.6 million, up 18% year over year (23% in constant currency).
- GAAP net loss was $16,000, or $0.00 per share, compared to GAAP net income of $551,000, or $0.02 per share in Q1 2022.
- Non-GAAP net income was $2.0 million, or $0.06 per share, compared to non-GAAP net income of $2.7 million, or $0.08 per share in Q1 2022.
- Cash flow from operations was $760,000, or 3% operating cash flow margin.
- Cash and cash equivalents were $71.5 million on September 30, 2022.
Fiscal 2023 Second Quarter Financial Guidance
For the second quarter of fiscal 2023 ending December 31, 2022, eGain expects:
- Total revenue of between $25.0 million to $25.4 million, representing growth of 8% to 10% year over year.
- Non-GAAP total revenue, adjusted for constant currency, of between $25.8 million to $26.2 million, representing growth of 12% to 13%.
- GAAP net loss of $700,000 to $1.0 million, or $0.02 to $0.03 per share.
- Includes stock-based compensation expense of approximately $2.0 million.
- Includes depreciation and amortization of approximately $130,000.
- Non-GAAP net income of $1.1 million to $1.4 million, or $0.03 to $0.04 per share.
Fiscal 2023 Financial Guidance
For the fiscal 2023 full year ending June 30, 2023, eGain expects:
- Total revenue of between $100.0 million to $102.0 million, representing growth of 9% to 11% year over year.
- Non-GAAP total revenue, adjusted for constant currency, of between $102.1 million to $104.2 million, representing growth of 11% to 13%.
- GAAP net loss of $2.2 million to $3.2 million, or $0.07 to $0.10 per share.
- Includes stock-based compensation expense of approximately $8.5 million.
- Includes depreciation and amortization of approximately $550,000.
- Non-GAAP net income of $5.3 million to $6.3 million, or $0.16 to $0.19 per share.
- Weighted average shares outstanding are expected to be approximately 32.0 million for the second quarter of fiscal 2023 and for the full fiscal year 2023.
Stock Repurchase Program
eGain also announced today that its Board of Directors has authorized a stock repurchase program under which eGain may purchase up to $20 million of its outstanding common stock.
Under the stock repurchase program, eGain may purchase 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 stock repurchase program is effective immediately, has a term of one year from adoption unless extended, 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 total revenue that is only adjusted for constant currency to provide better visibility into the underlying business trends and non-GAAP net income. The 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.
Conference Call Information
eGain will discuss its fiscal 2023 first quarter results today via teleconference at 2:00 p.m. Pacific Time. To access the live call, dial +1 877-270-2148 (U.S. toll free) or +1 412-902-6510 (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 our website at www.egain.com. In addition, a phone replay of the conference call will be available starting two hours after the call and remain in effect for one week. To access the phone replay, dial 877-344-7529 (U.S. toll free) or 412-317-0088 (International). The replay access code is 5786413.
Infused with AI, our knowledge-powered software automates digital-first experiences for enterprises and government agencies. Pre-connected with leading CRM and contact center systems, the eGain platform delivers quick value and easy innovation with virtual assistance, customer self-service, and modern agent desktop tools. Visit www.egain.com for more information.
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 2023 ending December 31, 2022 and fiscal 2023 full year ending June 30, 2023; our market opportunity; and expectations regarding our growth prospects for fiscal 2023 year ending June 30, 2023; 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 2023 ending December 31, 2022, and fiscal 2023 full year ending June 30, 2023. 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 our 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 13, 2022 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. 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.
September 2022 quarter financial data
MKR Investor Relations
Todd Kehrli or Jim Byers
Email: [email protected]