GlobeNewswire Inc | May 11, 2021 04:05PM EDT

May 11, 2021

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, eGains 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. eGains management uses these non-GAAP measures to compare the Companys 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 Companys 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 Companys 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 Companys 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 Companys 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 Companys 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 eGains public filings, including eGains 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 Commissions 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 RelationsTodd Kehrli or Jim ByersPhone: 213-277-5550Email: egan@mkr-group.com



eGain CorporationCondensed Consolidated Balance Sheets(in thousands)(unaudited) March31, June30, 2021 2020ASSETS 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, 1,270 1,066 netPrepaid 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, 2,511 2,380 net of current portionIntangible 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 933 1,385 portionOther 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 CorporationCondensed Consolidated Statements of Operations(in thousands, except per share data)(unaudited) Three Months Ended Nine Months Ended March31, March31, 2021 2020 2021 2020Revenue: 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 1,505 1,761 4,378 5,012 servicesTotal 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 4,371 4,205 13,384 12,255 developmentSales and marketing 6,927 5,064 18,824 14,622 General and 2,022 1,828 5,818 5,911 administrativeTotal operating 13,320 11,097 38,026 32,788 expensesIncome from 1,577 1,757 5,824 4,853 operationsInterest income, net 5 113 10 384 Other income (378 ) 65 (700 ) 44 (expense), netIncome before incometax (provision) 1,204 1,935 5,134 5,281 benefitIncome tax 57 (68 ) (223 ) (224 )(provision) benefitNet 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-averageshares used in computation:Basic 31,068 30,662 30,962 30,580 Diluted 32,618 31,987 32,646 31,935 Stock-basedcompensation included in above costs andexpenses:Cost of revenue $ 88 $ 62 $ 243 $ 148 Research and 92 171 394 549 developmentSales and marketing 169 144 475 422 General and 19 83 152 274 administrative $ 368 $ 460 $ 1,264 $ 1,393 Amortization ofintangible assets included in abovecosts and expenses:Cost of revenue $ ? $ 67 $ 26 $ 201

eGain CorporationGAAP to Non-GAAP Reconciliation Table(in thousands)(unaudited) Three Months Ended Nine Months Ended March March 31, 31, 2021 2020 2021 2020Income from operations $ 1,577 $ 1,757 $ 5,824 $ 4,853 Add: Stock-based compensation 368 460 1,264 1,393 Amortization of intangibles ? 67 26 201 assetsNon-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 ? 67 26 201 assetsNon-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 CorporationOther GAAP to Non-GAAP Supplemental Financial Information(in thousands)(unaudited) Constant Three Months Ended Growth Currency March 31, Rates 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 $ 18,540 $ 16,252 14% 11%services revenue Cost of Revenue: GAAP subscription $ 3,341 $ 3,739 Add back: Amortization of intangible ? (67 ) assetsNon-GAAP subscription $ 3,341 $ 3,672 GAAP professional services $ 1,505 $ 1,761 Add back: Stock-based compensation (88 ) (62 ) Non-GAAP professional $ 1,417 $ 1,699 services GAAP total cost of revenue $ 4,846 $ 5,500 Add back: Stock-based compensation (88 ) (62 ) Amortization of intangible ? (67 ) assetsNon-GAAP total cost of $ 4,758 $ 5,371 (11%) (13%)revenue Gross Profit: Non-GAAP subscription $ 14,737 $ 13,247 Non-GAAP professional 248 (264 ) servicesNon-GAAP gross profit $ 14,985 $ 12,983 15% 12% Operating expenses: GAAP research and $ 4,371 $ 4,205 developmentAdd back: Stock-based compensation (92 ) (171 ) expenseAmortization of acquired ? ? intangible assetsNon-GAAP research and $ 4,279 $ 4,034 6% 5%development GAAP sales and marketing $ 6,927 $ 5,064 Add back: Stock-based compensation (169 ) (144 ) expenseAmortization of acquired ? ? intangible assetsNon-GAAP sales and marketing $ 6,758 $ 4,920 37% 35% GAAP general and $ 2,022 $ 1,828 administrativeAdd back: Stock-based compensation (19 ) (83 ) expenseAmortization of acquired ? ? intangible assetsNon-GAAP general and $ 2,003 $ 1,745 15% 13%administrative GAAP operating expenses $ 13,320 $ 11,097 Add back: Stock-based compensation (280 ) (398 ) expenseAmortization of acquired ? ? intangible assetsNon-GAAP operating expenses $ 13,040 $ 10,699 22% 20% [1] Constant currency growth rates presented are derived from converting thecurrent period results for entities reporting in currencies other than U.S.Dollars into U.S. Dollars at the exchange rates in effect during the priorperiod presented rather than the actual exchange rates in effect during thecurrent period.

eGain CorporationOther GAAP to Non-GAAP Supplemental Financial Information(in thousands)(unaudited) Constant Nine Months Ended Growth Currency March 31, Rates 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 $ 53,537 $ 46,144 16% 14%services revenue Cost of Revenue: GAAP subscription $ 9,811 $ 11,046 Add back: Amortization of intangible (26 ) (201 ) assetsNon-GAAP subscription $ 9,785 $ 10,845 GAAP professional services $ 4,378 $ 5,012 Add back: Stock-based compensation (243 ) (148 ) Non-GAAP professional $ 4,135 $ 4,864 services GAAP total cost of revenue $ 14,189 $ 16,058 Add back: Stock-based compensation (243 ) (148 ) Amortization of intangible (26 ) (201 ) assetsNon-GAAP total cost of $ 13,920 $ 15,709 (11%) (12%)revenue Gross Profit: Non-GAAP subscription $ 43,740 $ 37,989 Non-GAAP professional 379 1 servicesNon-GAAP gross profit $ 44,119 $ 37,990 16% 14% Operating expenses: GAAP research and $ 13,384 $ 12,255 developmentAdd back: Stock-based compensation (394 ) (549 ) expenseAmortization of acquired ? ? intangible assetsNon-GAAP research and $ 12,990 $ 11,706 11% 11%development GAAP sales and marketing $ 18,824 $ 14,622 Add back: Stock-based compensation (475 ) (422 ) expenseAmortization of acquired ? ? intangible assetsNon-GAAP sales and marketing $ 18,349 $ 14,200 29% 27% GAAP general and $ 5,818 $ 5,911 administrativeAdd back: Stock-based compensation (152 ) (274 ) expenseAmortization of acquired ? ? intangible assetsNon-GAAP general and $ 5,666 $ 5,637 1% 0%administrative GAAP operating expenses $ 38,026 $ 32,788 Add back: Stock-based compensation (1,021 ) (1,245 ) expenseAmortization of acquired ? ? intangible assetsNon-GAAP operating expenses $ 37,005 $ 31,543 17% 16% [1] Constant currency growth rates presented are derived from converting thecurrent period results for entities reporting in currencies other than U.S.Dollars into U.S. Dollars at the exchange rates in effect during the priorperiod presented rather than the actual exchange rates in effect during thecurrent period.