eGain reports SaaS revenue growth of 26% year over year in fiscal third quarter and raises SaaS revenue guidance for fiscal 2020
Sunnyvale, CA (May 7, 2020) – eGain (NASDAQ: EGAN), a leading provider of omnichannel customer engagement solutions, today announced financial results for its fiscal 2020 third quarter ended March 31, 2020.
“We delivered strong top and bottom line results ahead of our guidance and Street consensus, with healthy bookings in the quarter,” said Ashu Roy, eGain CEO. “Several deals slipped in March because of COVID-19. Some of them have since closed in April and most others remain engaged. While the short-term outlook is somewhat uncertain and dependent on the broader economy, we remain bullish in the medium-term, thanks to accelerating demand for digital-first customer engagement and our product leadership.”
Fiscal 2020 Third Quarter Financial Highlights
- SaaS revenue was $14.8 million, up 26% year over year.
- SaaS and professional services revenue was $16.3 million, up 20% year over year and comprised 89% of total revenue, up from 79% in Q3 2019.
- Total revenue was $18.4 million, up 8% year over year.
- Non-GAAP gross margin was 71%, compared to 70% in Q3 2019.
- GAAP net income was $1.9 million, or $0.06 per share, compared to GAAP net income of $1.4 million, or $0.05 per share, for Q3 2019.
- Non-GAAP net income was $2.4 million, or $0.08 per share on a basic and $0.07 per share on a diluted basis, compared to non-GAAP net income of $2.0 million, or $0.07 per share on a basic and $0.06 per share on a diluted basis, for Q3 2019.
- Cash provided by operations for the quarter was $415,000 and $8.5 million year-to-date
Fiscal 2020 Financial Guidance
For the fiscal 2020 full year ending June 30, 2020, eGain is providing updated guidance for:
- SaaS revenue of between $56.0 million to $56.5 million (on a constant currency basis), which would represent growth between 25% and 26% year over year;
- SaaS and professional services revenue of between $62.3 million and $63.0 million (on a constant currency basis), which would represent growth of between 20% and 21% year over year;
- Total revenue for the fiscal 2020 full year of between $71.7 million to $72.4 million (on a constant currency basis), which would represent growth of between 7% and 8% year over year; and
- Non-GAAP net income of between $6.5 million to $7.5 million, or $0.20 to $0.23 per diluted share.
Over the last several weeks, eGain has been focused on supporting its employees, customers, and community during the COVID-19 pandemic. The Company has implemented business continuity plans to ensure it takes care of the health and safety of its employees while continuing to deliver its digital customer experience solutions on all committed service levels.
Non-GAAP Financial Measures
This press release includes non-GAAP operating income and non-GAAP net income as supplemental information relating to our operating results. Non-GAAP net income is defined as net income 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. Defined in the supplemental information is SaaS and legacy revenue, where legacy revenue is defined as license, maintenance and support contracts on perpetual license arrangements that we no longer sell. 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 2020 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 1556820. A live and archived webcast of the call will be accessible on the “Investors” 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.
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 https://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 beliefs regarding demand for our products and services, including, without limitation: our beliefs that we continue to see positive business and customer momentum and strong bookings; that our engagements delayed in March due to the COVID-19 pandemic will continue to close; that businesses will continue to shift to a digital-first approach to customer service and that we will maintain our product leadership; and our expectations with respect to revenue growth and non-GAAP net income for the fiscal year ending June 30, 2020 and the fourth quarter of fiscal year 2020. 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, 2020 and fourth quarter of fiscal year 2020. 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 the transition to a work-from-home environment; 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; current general economic and market conditions associated with the Covid-19 pandemic and otherwise, which may adversely affect our industry; 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 12, 2019 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