GlobeNewswire Inc | Sep 1, 2021 04:05PM EDT

September 01, 2021

SUNNYVALE, Calif., Sept. 01, 2021 (GLOBE NEWSWIRE) -- eGain (NASDAQ: EGAN), a leading provider of digital customer engagement solutions, today announced financial results for its fiscal 2021 fourth quarter and full year ended June 30, 2021.

We delivered solid financial performance to end our fiscal 2021, with top and bottom-line results ahead of our guidance and street consensus, said Ashu Roy, eGains CEO. Even as we stepped up our investments in fiscal 2021, our improved gross margins resulted in better-than-expected bottom-line results for the fiscal year. We are taking actions to translate our product leadership into market dominance in knowledge management and digital customer engagement, including continuing to invest in the coming year to further build out our platform API offerings, develop our partner ecosystem and expand our market coverage. We expect these investments to accelerate our growth trajectory in fiscal 2022 and beyond.

Fiscal 2021 Fourth Quarter Financial Highlights

-- SaaS revenue was $17.9 million, up 15% year over year. -- Total revenue was $20.2 million, up 6% year over year. -- Subscription non-GAAP gross margin was 80%. -- Total non-GAAP gross margin was 75%, up 100 basis points year over year. -- GAAP net income was $2.0 million, or $0.06 per share on a diluted basis, compared to GAAP net income of $2.2 million, or $0.07 per share on a diluted basis, for Q4 2020. -- Non-GAAP net income was $2.5 million, or $0.08 per share on a diluted basis, compared to non-GAAP net income of $2.7 million, or $0.08 per share on a diluted basis, for Q4 2020. -- Cash provided by operations was $8.9 million, up 59% from cash provided by operations of $5.6 million in Q4 2020.

Fiscal 2021 Full Year Financial Highlights

-- SaaS revenue was $66.9 million, up 18% year over year. -- Total revenue was $78.3 million, up 8% year over year. -- Subscription non-GAAP gross margin was 81%, up 200 basis points year over year. -- Total non-GAAP gross margin was 76%, up 400 basis points year over year. -- GAAP net income was $7.0 million, or $0.21 per diluted share, compared to GAAP net income of $7.2 million, or $0.23 per diluted share, for fiscal 2020. -- Non-GAAP net income was $8.7 million, or $0.27 per diluted share, compared to non-GAAP net income of $9.3 million, or $0.29 per diluted share, for fiscal 2020. -- Cash provided by operations for the year was $13.9 million, or 18% operating cash flow margin. -- Total cash and cash equivalents, as of June 30, 2021, was $63.2 million, up 36% compared to $46.6 million as of June 30, 2020.

Fiscal 2022 First Quarter Financial Guidance

For the first quarter of fiscal 2022 ending September 30, 2021, eGain expects:

-- Total revenue of between $20.9 million to $21.3 million, which would represent growth of 10% to 12% year over year. -- GAAP net income of breakeven to $1.0 million, or $0.00 to $0.03 per share. -- Non-GAAP net income of $500,000 to $1.5 million, or $0.02 to $0.05 per share.

Fiscal 2022 Financial Guidance

For the fiscal 2022 full year ending June 30, 2022, eGain expects:

-- Total revenue of between $88.2 million to $89.8 million, which would represent growth of 13% to 15% year over year. -- GAAP net loss of $3.5 million to $4.5 million, or a loss of $0.11 to $0.14 per share. -- Non-GAAP net loss of $1.0 million to breakeven, or a loss of $0.03 to $0.00 per share.

Guidance Assumptions:

-- Includes stock-based compensation expense of approximately $500,000 for the first quarter of fiscal 2022 and $3.5 million for fiscal year 2022. -- Includes depreciation and amortization of approximately $120,000 for the first quarter of fiscal 2022 and $500,000 for fiscal year 2022. -- Weighted average shares outstanding of approximately 32.8 million for the first quarter of fiscal 2022 and 33.1 million for fiscal year 2022.

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 fourth quarter and full year results today via teleconference at 2:00 p.m., Pacific Time. To access the live call, dial 800-437-2398 (US and Canada) or +1 856-344-9206 (international) and give the participant passcode 8932708. 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 platform automates digital-first, omnichannel experiences across all touch points. Powered by AI, machine learning, knowledge, and analytics, our top-rated software optimizes customer journeys with virtual assistance, messaging hub, and desktop to serve customers, reduce cost, and improve compliance. To learn more, visitwww.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, including without limitation our financial guidance for the first quarter of fiscal 2022 ending September 30, 2021 and fiscal 2022 full year ending June 30, 2022; our plans to continue to invest in the coming year to further build out our platform API offerings, develop our partner ecosystem and expand our market coverage; and expectations regarding our growth prospects. 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, 2022 and first quarter of fiscal 2022. 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 current COVID-19 pandemic and related economic downturns, 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, 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 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)

June30, June30, 2021 2020 ASSETS Current assets: Cash and cash equivalents $ 63,231 $ 46,609 Restricted cash 7 6 Accounts receivable, net 26,311 22,708 Costs capitalized to obtain revenue 1,323 1,066 contracts, netPrepaid expenses 3,028 2,514 Other current assets 778 617 Total current assets 94,678 73,520 Property and equipment, net 705 713 Operating lease right-of-use assets 2,191 2,962 Costs capitalized to obtain revenue 2,612 2,380 contracts, net of current portionIntangible assets, net ? 26 Goodwill 13,186 13,186 Other assets, net 1,191 918 Total assets $ 114,563 $ 93,705 LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable $ 3,068 $ 2,429 Accrued compensation 8,444 7,916 Accrued liabilities 4,352 3,423 Operating lease liabilities 1,466 1,753 Deferred revenue 46,211 36,644 Total current liabilities 63,541 52,165 Deferred revenue, net of current portion 3,332 4,826 Operating lease liabilities, net of current 797 1,385 portionOther long term liabilities 832 688 Total liabilities 68,502 59,064 Stockholders' equity: Common stock 31 31 Additional paid-in capital 378,451 374,399 Notes receivable from stockholders (92 ) (90 )Accumulated other comprehensive loss (1,220 ) (1,631 )Accumulated deficit (331,109 ) (338,068 )Total stockholders' equity 46,061 34,641 Total liabilities and stockholders' equity $ 114,563 $ 93,705

eGain CorporationCondensed Consolidated Statements of Operations(in thousands, except per share data)(unaudited)

Three Months Ended Year Ended June30, June30, 2021 2020 2021 2020 Revenue: Subscription $ 18,846 $ 17,296 $ 72,371 $ 66,129 Professional 1,402 1,734 5,916 6,600 servicesTotal revenue 20,248 19,030 78,287 72,729 Cost of revenue: Cost of 3,696 3,352 13,507 14,398 subscriptionCost ofprofessional 1,383 1,671 5,760 6,683 servicesTotal cost of 5,079 5,023 19,267 21,081 revenue Gross profit 15,169 14,007 59,020 51,648 Operating expenses:Research and 4,549 4,383 17,933 16,638 developmentSales and 7,176 5,001 25,999 19,623 marketingGeneral and 1,930 2,070 7,749 7,981 administrativeTotal operating 13,655 11,454 51,681 44,242 expensesIncome 1,514 2,553 7,339 7,406 fromoperationsInterest income, 2 11 13 395 netOther income 144 141 (559 ) 185 (expense), netIncome beforeincome tax 1,660 2,705 6,793 7,986 benefit(provision)Income taxbenefit 388 (554 ) 166 (778 )(provision)Net income $ 2,048 $ 2,151 $ 6,959 $ 7,208 Per share information:Earnings income per share:Basic $ 0.07 $ 0.07 $ 0.22 $ 0.24 Diluted $ 0.06 $ 0.07 $ 0.21 $ 0.23 Weighted averageshares used in computation:Basic 31,144 30,742 31,007 30,620 Diluted 32,561 32,159 32,597 31,956 Summary ofstock-basedcompensation included in thecosts andexpenses above:Cost of revenue $ 83 $ 57 $ 326 $ 205 Research and 115 158 509 706 developmentSales and 182 129 657 551 marketingGeneral and 56 125 208 399 administrativeTotal stock-based $ 436 $ 469 $ 1,700 $ 1,861 compensation Summary ofamortization ofpurchasedintangibles from businesscombinations inthe costs andexpenses above:Cost of revenue $ ? $ 67 $ 26 $ 268 Research and ? ? ? ? developmentTotalamortization of $ ? $ 67 $ 26 $ 268 intangible assets

eGain CorporationGAAP to Non-GAAP Reconciliation Table(in thousands, except per share data)(unaudited)

Three Months Ended Year Ended June30, June30, 2021 2020 2021 2020Incomefromoperations $ 1,514 $ 2,553 $ 7,339 $ 7,406Add: Stock-based 436 469 1,700 1,861compensationAmortization of ? 67 26 268intangible assetsNon-GAAP income from $ 1,950 $ 3,089 $ 9,065 $ 9,535operations Three Months Ended Year Ended June30, June30, 2021 2020 2021 2020Net income $ 2,048 $ 2,151 $ 6,959 $ 7,208Add: Stock-based 436 469 1,700 1,861compensationAmortization of ? 67 26 268intangible assetsNon-GAAP net income $ 2,484 $ 2,687 $ 8,685 $ 9,337Per share information: Non-GAAP earnings per share:Basic $ 0.08 $ 0.09 $ 0.28 $ 0.30Diluted $ 0.08 $ 0.08 $ 0.27 $ 0.29Weighted-average shares used in computation:Basic 31,144 30,742 31,007 30,620Diluted 32,561 32,159 32,597 31,956

eGain CorporationOther GAAP to Non-GAAP Supplemental Financial Information(in thousands)(unaudited)

Constant Three Months Ended Growth Currency June 30, Rates Growth Rates [1] 2021 2020 Revenue: SaaS revenue $ 17,906 $ 15,515 15 % 11 %Legacy revenue 940 1,781 (47 %) (48 %)GAAP subscription 18,846 17,296 9 % 5 %GAAP professional 1,402 1,734 (19 %) (22 %)servicesTotal GAAP revenue $ 20,248 $ 19,030 6 % 3 % SaaS and professional services revenue:SaaS revenue $ 17,906 $ 15,515 15 % 11 %Professional Services 1,402 1,734 (19 %) (22 %)Total SaaS andprofessional services $ 19,308 $ 17,249 12 % 8 %revenue Cost of Revenue: GAAP subscription $ 3,696 $ 3,352 Add back: Amortization of ? (67 ) intangible assetsNon-GAAP subscription $ 3,696 $ 3,285 GAAP professional $ 1,383 $ 1,671 servicesAdd back: Stock-based compensation (83 ) (57 ) Non-GAAP professional $ 1,300 $ 1,614 services GAAP total cost of $ 5,079 $ 5,023 revenueAdd back: Stock-based compensation (83 ) (57 ) Amortization of ? (67 ) intangible assetsNon-GAAP total cost of $ 4,996 $ 4,899 2 % 0 %revenue Gross Profit: Non-GAAP subscription $ 15,150 $ 14,011 Non-GAAP professional 102 120 servicesNon-GAAP gross profit $ 15,252 $ 14,131 8 % 4 % Operating expenses: GAAP research and $ 4,549 $ 4,383 developmentAdd back: Stock-based compensation (115 ) (158 ) expenseAmortization of acquired ? ? intangible assetsNon-GAAP research and $ 4,434 $ 4,225 5 % 2 %development GAAP sales and marketing $ 7,176 $ 5,001 Add back: Stock-based compensation (182 ) (129 ) expenseAmortization of acquired ? ? intangible assetsNon-GAAP sales and $ 6,994 $ 4,872 44 % 39 %marketing GAAP general and $ 1,930 $ 2,070 administrativeAdd back: Stock-based compensation (56 ) (125 ) expenseAmortization of acquired ? ? intangible assetsNon-GAAP general and $ 1,874 $ 1,945 (4 %) (7 %)administrative GAAP operating expenses $ 13,655 $ 11,454 Add back: Stock-based compensation (353 ) (412 ) expenseAmortization of acquired ? ? intangible assetsNon-GAAP operating $ 13,302 $ 11,042 20 % 17 %expenses

[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 CorporationOther GAAP to Non-GAAP Supplemental Financial Information(in thousands)(unaudited)

Constant Twelve Months Ended Growth Currency June 30, Rates Growth Rates [1] 2021 2020 Revenue: SaaS revenue $ 66,929 $ 56,793 18 % 15 %Legacy revenue 5,442 9,336 (42 %) (46 %)GAAP subscription 72,371 66,129 9 % 7 %GAAP professional 5,916 6,600 (10 %) (13 %)servicesTotal GAAP revenue $ 78,287 $ 72,729 8 % 5 % SaaS and professional services revenue:SaaS revenue $ 66,929 $ 56,793 18 % 15 %Professional Services 5,916 6,600 (10 %) (13 %)Total SaaS andprofessional services $ 72,845 $ 63,393 15 % 12 %revenue Cost of Revenue: GAAP subscription $ 13,507 $ 14,398 Add back: Amortization of (26 ) (268 ) intangible assetsNon-GAAP subscription $ 13,481 $ 14,130 GAAP professional $ 5,760 $ 6,683 servicesAdd back: Stock-based compensation (326 ) (205 ) Non-GAAP professional $ 5,434 $ 6,478 services GAAP total cost of $ 19,267 $ 21,081 revenueAdd back: Stock-based compensation (326 ) (205 ) Amortization of (26 ) (268 ) intangible assetsNon-GAAP total cost of $ 18,915 $ 20,608 (8 %) (10 %)revenue Gross Profit: Non-GAAP subscription $ 58,890 $ 51,999 Non-GAAP professional 482 122 servicesNon-GAAP gross profit $ 59,372 $ 52,121 14 % 11 % Operating expenses: GAAP research and $ 17,933 $ 16,638 developmentAdd back: Stock-based compensation (509 ) (706 ) expenseAmortization of acquired ? ? intangible assetsNon-GAAP research and $ 17,424 $ 15,932 9 % 8 %development GAAP sales and marketing $ 25,999 $ 19,623 Add back: Stock-based compensation (657 ) (551 ) expenseAmortization of acquired ? ? intangible assetsNon-GAAP sales and $ 25,342 $ 19,072 33 % 31 %marketing GAAP general and $ 7,749 $ 7,981 administrativeAdd back: Stock-based compensation (208 ) (399 ) expenseAmortization of acquired ? ? intangible assetsNon-GAAP general and $ 7,541 $ 7,582 (1 %) (2 %)administrative GAAP operating expenses $ 51,681 $ 44,242 Add back: Stock-based compensation (1,374 ) (1,656 ) expenseAmortization of acquired ? ? intangible assetsNon-GAAP operating $ 50,307 $ 42,586 18 % 16 %expenses

[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.