GlobeNewswire Inc | Sep 2, 2020 04:05PM EDT

September 02, 2020

SUNNYVALE, Calif., Sept. 02, 2020 (GLOBE NEWSWIRE) -- eGain (NASDAQ: EGAN), a leading provider of omnichannel customer engagement solutions, today announced financial results for its fiscal 2020 fourth quarter and full year ended June 30, 2020.

We are pleased to report strong financial performance across the board for our fiscal 2020 fourth quarter and full year, said Ashu Roy, eGains CEO. While the short-term economic outlook is uncertain, given the COVID-19 pandemic, we are bullish thanks to accelerating demand for digital customer engagement and our product leadership.

Fiscal 2020 Fourth Quarter Financial Highlights

-- SaaS revenue was $15.5 million, up 34% year over year. -- SaaS and professional services revenue was $17.2 million, up 30% year over year and comprised 91% of total revenue. -- Total revenue was $19.0 million, up 13% year over year. -- GAAP net income was $2.2 million, or $0.07 per share on a diluted basis, compared to GAAP net income of $166,000, or $0.01 per share on a diluted basis, for Q4 2019. -- Non-GAAP net income was $2.7 million, or $0.08 per share on a diluted basis, compared to non-GAAP net income of $659,000, or $0.02 per share on a diluted basis, for Q4 2019. -- Cash provided by operations was $5.6 million, compared to cash used in operations of $1.0 million in Q4 2019.

Fiscal 2020 Full Year Financial Highlights

-- SaaS revenue was $56.8 million, up 27% year over year. -- SaaS and professional services revenue was $63.4 million, up 22% year over year, and comprised 87% of total revenue. -- Total revenue was $72.7 million, up 8% year over year. -- GAAP net income was $7.2 million, or $0.23 per share on a diluted basis, compared to GAAP net income of $4.2 million, or $0.14 per share on a diluted basis, for fiscal 2019. -- Non-GAAP net income was $9.3 million, or $0.29 per share on a diluted basis, compared to non-GAAP net income of $6.2 million, or $0.21 per share on a diluted basis, for fiscal 2019. -- Cash provided by operations for the year was $14.1 million, up 100% from cash provided by operations of $7.0 million in fiscal 2019. -- Total cash and cash equivalents, as of June 30, 2020, was $46.6 million, up 46% compared to $31.9 million as of June 30, 2019.

Fiscal 2021 First Quarter Financial Guidance

For the first quarter of fiscal 2021 ending September 30, 2020, eGain expects:

-- SaaS revenue of between $15.5 million to $16.0 million, which would represent growth between 25% and 29% year over year; -- SaaS and professional services revenue of between $17.0 million and $17.6 million, which would represent growth of between 21% and 25% year over year; -- Total revenue of $18.6 million to $19.3 million, which would represent growth between 8% and 12% year over year; -- GAAP net income of $1.1 million to $2.1 million, or $0.03 to $0.06 per share on a diluted basis; and -- Non-GAAP net income of $1.6 million to $2.6 million, or $0.05 to $0.08 per share on a diluted basis.

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. 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 2020 fourth quarter and full year 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 7989267. 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.

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 beliefs regarding demand for our products and services, including, without limitation: our beliefs regarding solid business pipeline and our market opportunity; and our expectations with respect to revenue growth and non-GAAP net income for the first quarter of fiscal year 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 first quarter of fiscal year 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 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 eGains public filings, including eGains annual report on Form 10-K filed on September12, 2019 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: 323-468-2300Email: egan@mkr-group.com

eGain CorporationCondensed Consolidated Balance Sheets(in thousands)(unaudited) June30, June30, 2020 2019ASSETS Current assets: Cash and cash equivalents $ 46,609 $ 31,860 Restricted cash 6 7 Accounts receivable, net 22,708 20,411 Costs capitalized to obtain revenue 1,066 740 contracts, netPrepaid expenses 2,514 2,517 Other current assets 617 1,054 Total current assets 73,520 56,589 Property and equipment, net 713 525 Operating lease right-of-use assets 2,962 ? Costs capitalized to obtain revenue 2,380 1,777 contracts, net of current portionIntangible assets, net 26 294 Goodwill 13,186 13,186 Other assets 918 1,383 Total assets $ 93,705 $ 73,754 LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable $ 2,429 $ 4,173 Accrued compensation 7,916 5,480 Accrued liabilities 3,423 2,353 Operating lease liabilities 1,753 ? Deferred revenue 36,644 30,688 Total current liabilities 52,165 42,694 Deferred revenue, net of current portion 4,826 5,801 Operating lease liabilities, net of current 1,385 ? portionOther long term liabilities 688 952 Total liabilities 59,064 49,447 Stockholders' equity: Common stock 31 31 Additional paid-in capital 374,399 371,099 Notes receivable from stockholders (90 ) (88 )Accumulated other comprehensive loss (1,631 ) (1,459 )Accumulated deficit (338,068 ) (345,276 )Total stockholders' equity 34,641 24,307 Total liabilities and stockholders' equity $ 93,705 $ 73,754

eGain CorporationCondensed Consolidated Statements of Operations(in thousands, except per share data)(unaudited) Three Months Ended Year Ended June30, June30, 2020 2019 2020 2019 Revenue: Subscription $ 17,296 $ 15,144 $ 66,129 $ 60,013 Professional 1,734 1,679 6,600 7,219 servicesTotal revenue 19,030 16,823 72,729 67,232 Cost of revenue:Cost of 3,352 4,265 14,398 14,976 subscriptionCost ofprofessional 1,671 1,502 6,683 6,865 servicesTotal cost of 5,023 5,767 21,081 21,841 revenueGross 14,007 11,056 51,648 45,391 profitOperating expenses:Research and 4,383 3,593 16,638 14,369 developmentSales and 5,001 4,596 19,623 17,302 marketingGeneral and 2,070 2,016 7,981 8,198 administrativeTotal operating 11,454 10,205 44,242 39,869 expensesIncome 2,553 851 7,406 5,522 fromoperationsInterest income 11 130 395 (319 )(expense), netOther income 141 (13 ) 185 (202 )(expense), netIncome beforeincome tax 2,705 968 7,986 5,001 provisionIncome tax (554 ) (802 ) (778 ) (833 )provisionNet income $ 2,151 $ 166 $ 7,208 $ 4,168 Per share information:Earnings income per share:Basic $ 0.07 $ 0.01 $ 0.24 $ 0.15 Diluted $ 0.07 $ 0.01 $ 0.23 $ 0.14 Weightedaverage shares used incomputation:Basic 30,742 30,344 30,620 28,579 Diluted 32,159 31,915 31,956 30,363 Summary ofstock-basedcompensation included in thecosts andexpenses above:Cost of revenue $ 57 $ 82 $ 205 $ 323 Research and 158 132 706 519 developmentSales and 129 132 551 313 marketingGeneral and 125 80 399 468 administrativeTotalstock-based $ 469 $ 426 $ 1,861 $ 1,623 compensation Summary ofamortization ofpurchasedintangibles from businesscombinations inthe costs andexpenses above:Cost of revenue $ 67 $ 67 $ 268 $ 268 Research and ? ? ? 170 developmentTotalamortization of $ 67 $ 67 $ 268 $ 438 intangibleassets

eGain CorporationGAAP to Non-GAAP Reconciliation Table(in thousands)(unaudited) Three Months Ended Year Ended June30, June30, 2020 2019 2020 2019Incomefromoperations $ 2,553 $ 851 $ 7,406 $ 5,522Add: Stock-based compensation 469 426 1,861 1,623Amortization of 67 67 268 438intangible assetsNon-GAAP income from $ 3,089 $ 1,344 $ 9,535 $ 7,583operations Three Months Ended Year Ended June30, June30, 2020 2019 2020 2019Net income $ 2,151 $ 166 $ 7,208 $ 4,168Add: Stock-based compensation 469 426 1,861 1,623Amortization of 67 67 268 438intangible assetsNon-GAAP net income $ 2,687 $ 659 $ 9,337 $ 6,229Per share information: Non-GAAP earnings per share:Basic $ 0.09 $ 0.02 $ 0.30 $ 0.22Diluted $ 0.08 $ 0.02 $ 0.29 $ 0.21Weighted-average shares used in computation:Basic 30,742 30,344 30,620 28,579Diluted 32,159 31,915 31,956 30,363

eGain CorporationOther GAAP to Non-GAAP Supplemental Financial Information(in thousands)(unaudited) Three Months Ended Growth Constant June 30, Rates Currency Growth Rates [1] 2020 2019 Revenue: SaaS revenue $ 15,515 $ 11,572 34% 35%Legacy revenue 1,781 3,572 (50%) (50%)GAAP subscription 17,296 15,144 14% 15%GAAP professional 1,734 1,679 3% 4%servicesTotal GAAP revenue $ 19,030 $ 16,823 13% 14% SaaS andprofessional services revenue:SaaS revenue $ 15,515 $ 11,572 34% 35%Professional 1,734 1,679 3% 4%ServicesTotal SaaS andprofessional $ 17,249 $ 13,251 30% 31%services revenue Cost of Revenue: GAAP subscription $ 3,352 $ 4,265 Add back: Amortization of (67 ) (67 ) intangible assetsNon-GAAP $ 3,285 $ 4,198 subscription GAAP professional $ 1,671 $ 1,502 servicesAdd back: Stock-based (57 ) (82 ) compensationNon-GAAPprofessional $ 1,614 $ 1,420 services GAAP total cost of $ 5,023 $ 5,767 revenueAdd back: Stock-based (57 ) (82 ) compensationAmortization of (67 ) (67 ) intangible assetsNon-GAAP total cost $ 4,899 $ 5,618 (13%) (11%)of revenue Gross Profit: Non-GAAP $ 14,011 $ 10,946 subscriptionNon-GAAPprofessional 120 259 servicesNon-GAAP gross $ 14,131 $ 11,205 26% 27%profit Operating expenses: GAAP research and $ 4,383 $ 3,593 developmentAdd back: Stock-based (158 ) (132 ) compensation expenseAmortization ofacquired intangible - - assetsNon-GAAP research $ 4,225 $ 3,461 22% 24%and development GAAP sales and $ 5,001 $ 4,596 marketingAdd back: Stock-based (129 ) (132 ) compensation expenseAmortization ofacquired intangible ? - assetsNon-GAAP sales and $ 4,872 $ 4,464 9% 15%marketing GAAP general and $ 2,070 $ 2,016 administrativeAdd back: Stock-based (125 ) (80 ) compensation expenseAmortization ofacquired intangible ? ? assetsNon-GAAP general and $ 1,945 $ 1,936 0% 1%administrative GAAP operating $ 11,454 $ 10,205 expensesAdd back: Stock-based (412 ) (344 ) compensation expenseAmortization ofacquired intangible ? ? assetsNon-GAAP operating $ 11,042 $ 9,861 12% 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.

eGain CorporationOther GAAP to Non-GAAP Supplemental Financial Information(in thousands)(unaudited) Twelve Months Ended Growth Constant June 30, Rates Currency Growth Rates [1] 2020 2019 Revenue: SaaS revenue $ 56,793 $ 44,788 27% 28%Legacy revenue 9,336 15,225 (39%) (38%)GAAP subscription 66,129 60,013 10% 11%GAAP professional 6,600 7,219 (9%) (8%)servicesTotal GAAP revenue $ 72,729 $ 67,232 8% 9% SaaS andprofessional services revenue:SaaS revenue $ 56,793 $ 44,788 27% 28%Professional 6,600 7,219 (9%) (8%)ServicesTotal SaaS andprofessional $ 63,393 $ 52,007 22% 23%services revenue Cost of Revenue: GAAP subscription $ 14,398 $ 14,976 Add back: Amortization of (268 ) (268 ) intangible assetsNon-GAAP $ 14,130 $ 14,708 subscription GAAP professional $ 6,683 $ 6,865 servicesAdd back: Stock-based (205 ) (323 ) compensationNon-GAAPprofessional $ 6,478 $ 6,542 services GAAP total cost of $ 21,081 $ 21,841 revenueAdd back: Stock-based (205 ) (323 ) compensationAmortization of (268 ) (268 ) intangible assetsNon-GAAP total cost $ 20,608 $ 21,250 (3%) (2%)of revenue Gross Profit: Non-GAAP $ 51,999 $ 45,305 subscriptionNon-GAAPprofessional 122 678 servicesNon-GAAP gross $ 52,121 $ 45,983 13% 14%profit Operating expenses: GAAP research and $ 16,638 $ 14,369 developmentAdd back: Stock-based (706 ) (519 ) compensation expenseAmortization ofacquired intangible - (170 ) assetsNon-GAAP research $ 15,932 $ 13,680 16% 17%and development GAAP sales and $ 19,623 $ 17,302 marketingAdd back: Stock-based (551 ) (313 ) compensation expenseAmortization ofacquired intangible ? ? assetsNon-GAAP sales and $ 19,072 $ 16,989 12% 14%marketing GAAP general and $ 7,981 $ 8,198 administrativeAdd back: Stock-based (399 ) (468 ) compensation expenseAmortization ofacquired intangible ? ? assetsNon-GAAP general and $ 7,582 $ 7,730 (2%) (1%)administrative GAAP operating $ 44,242 $ 39,869 expensesAdd back: Stock-based (1,656 ) (1,300 ) compensation expenseAmortization ofacquired intangible ? (170 ) assetsNon-GAAP operating $ 42,586 $ 38,399 11% 12%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.