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CST: 25/05/2019 10:17:10   

eGain Reports 31% SaaS Revenue Growth in Fiscal Third Quarter

16 Days ago

SUNNYVALE, Calif., May 08, 2019 (GLOBE NEWSWIRE) -- eGain (NASDAQ: EGAN), a leading provider of cloud customer engagement solutions, today announced financial results for its fiscal 2019 third quarter ended March 31, 2019.

Ashu Roy, eGain CEO, commented, “We are pleased with our financial performance in the third quarter, with healthy SaaS revenue, net income and cash flow from operations. We also completed a successful equity raise to strengthen our balance sheet, positioning us well to capitalize on strong market demand for AI-powered digital customer engagement.”

Fiscal 2019 Third Quarter Financial Highlights – ASC 606 (standard adopted effective July 1, 2018):

  • Total revenue was $17.0 million, up 8% year over year.
  • SaaS revenue was $11.8 million, up 31% year over year.
  • Subscription revenue, which includes SaaS and legacy support revenue, was $15.3 million, up 15% year over year and comprises of 90% of total revenue.
  • GAAP net income was $1.4 million, or $0.05 per share on a basic and diluted basis, compared to a GAAP net loss of $99,000, or $(0.00) per share on a basic and diluted basis, for Q3 2018.
  • Non-GAAP net income was $2.0 million, or $0.07 per share on a basic basis and $0.06 on a diluted basis, compared to non-GAAP net income of $713,000, or $0.03 per share on a basic basis and $0.02 on a diluted basis, for Q3 2018.
  • Cash provided by operations in the third quarter was $3.8 million, compared to cash used in operations of $189,000 in Q3 2018.
  • Total cash and cash equivalents as of March 31, 2019 was $31.1 million, compared to $11.5 million as of June 30, 2018.

Non-GAAP Financial Measures
This press release includes non-GAAP operating income/(loss) and non-GAAP net income/(loss) as supplemental information relating to our operating results. Non-GAAP net income/(loss) is defined as net income/(loss) 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. 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.

Quarterly Conference Call Information
eGain will discuss its quarterly results today via teleconference at 2:00 p.m. Pacific Daylight Time. To access the live call, please dial (800) 667-5617 (U.S. toll free) or (334) 323-0509 (international), and give the participant pass code 9335927. A live webcast of the call and slide presentation can be accessed from the investors section at www.egain.com. A replay of the conference call will also be available via telephone beginning approximately two hours after conclusion of the call and remain in effect for one week. An archive of the webcast will also be available on the investors section at www.egain.com.

About eGain
eGain customer engagement solutions power digital transformation for leading brands. Our top-rated cloud applications for social, mobile, web, and contact centers help clients deliver connected customer journeys in an omnichannel world. To learn more about eGain, visit 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 include our beliefs regarding demand for our products, including our belief that we see positive business and customer momentum and that our pipeline and the demand for our AI-powered customer engagement platform offering is strong and positions us for enhanced growth opportunities, among other matters.  These forward-looking statements also include our beliefs with respect to SaaS revenue growth and Subscription revenue growth for the current fiscal year. The achievement or success of the matters covered by such forward-looking statements involves risks, uncertainties and assumptions. If any such risks or uncertainties materialize or if any of the assumptions prove incorrect, the Company’s results could differ materially from the results expressed or implied by the forward-looking statements we make. The risks and uncertainties referred to above include, but are not limited to: risks associated with new product releases; risks that customer demand may fluctuate or decrease; risks that we are unable to collect unbilled contractual commitments; risks that our SaaS based revenue model and lengthy sales cycles may negatively affect our operating results; currency risks; our ability to capitalize on customer engagement; the success of organization changes; 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 invest resources to improve our products and continue to innovate; 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, 2018 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 to update these forward-looking statements.

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 Group Investor Relations
Todd Kehrli or Jim Byers
Phone: 323-468-2300
Email: egain@mkr-group.com

             
             
eGain Corporation
  Condensed Consolidated Balance Sheets  
(in thousands)
(unaudited)
             
    March 31,
2019 (*)
  June 30,
2018
ASSETS            
Current assets:            
Cash and cash equivalents   $ 31,078     $ 11,498  
Restricted cash     6       6  
Accounts receivable, net     15,139       7,389  
Costs capitalized to obtain revenue contracts, net     734       986  
Prepaid expenses     2,217       2,374  
Other current assets     497       285  
Total current assets     49,671       22,538  
Property and equipment, net     456       559  
Costs capitalized to obtain revenue contracts, net of current portion     1,928       891  
Intangible assets, net     362       733  
Goodwill     13,186       13,186  
Other assets     2,171       1,715  
Total assets   $ 67,774     $ 39,622  
             
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)            
Current liabilities:            
Accounts payable   $ 3,683     $ 3,905  
Accrued compensation     6,007       5,706  
Accrued liabilities     2,290       2,285  
Deferred revenue     26,316       18,364  
Capital lease obligations     1       42  
Bank borrowings, net of deferred financing costs     7       259  
Total current liabilities     38,304       30,561  
Deferred revenue, net of current portion     6,985       7,833  
Bank borrowings, net of current portion and deferred financing costs           8,941  
Other long-term liabilities     969       1,000  
Total liabilities     46,258       48,335  
Commitments and contingencies            
Stockholders' equity (deficit):            
Common stock     30       28  
Additional paid-in capital     368,599       346,222  
Notes receivable from stockholders     (87 )     (85 )
Accumulated other comprehensive loss     (1,584 )     (1,618 )
Accumulated deficit     (345,442 )     (353,260 )
Total stockholders' equity (deficit)     21,516       (8,713 )
Total liabilities and stockholders' equity (deficit)   $ 67,774     $ 39,622  
(*) Includes the impact from the adoption of ASU 2014-09 (Topic 606)            
             

 

eGain Corporation
Condensed Consolidated Statements of Operations
(in thousands, except per share data)
(unaudited)
                         
    Three Months Ended     Nine Months Ended  
    March 31,   March 31,
    2019     2018     2019     2018  
Revenue:                        
Subscription   $ 15,318     $ 13,364     $ 44,868     $ 37,823  
Professional services     1,686       2,381       5,540       7,895  
Total revenue     17,004       15,745       50,408       45,718  
Cost of revenue:                        
Cost of subscription     3,625       3,317       10,711       9,543  
Cost of professional services     1,672       2,118       5,362       6,907  
Total cost of revenue     5,297       5,435       16,073       16,450  
Gross profit     11,707       10,310       34,335       29,268  
Operating expenses:                        
Research and development     3,622       3,641       10,777       10,780  
Sales and marketing     4,320       4,360       12,706       13,255  
General and administrative     1,976       1,865       6,180       5,439  
Total operating expenses     9,918       9,866       29,663       29,474  
Income (loss) from operations     1,789       444       4,672       (206 )
Interest expense, net     (120 )     (215 )     (449 )     (798 )
Other expense, net     (199 )     (188 )     (189 )     (349 )
Income (loss) before income tax expense     1,470       41       4,034       (1,353 )
Income tax expense     (72 )     (140 )     (32 )     (102 )
Net income (loss)   $ 1,398     $ (99 )   $ 4,002     $ (1,455 )
Per share information:                        
Earnings (loss) per share:                        
Basic   $ 0.05     $ (0.00 )   $ 0.14     $ (0.05 )
Diluted   $ 0.05     $ (0.00 )   $ 0.13     $ (0.05 )
Weighted-average shares used in computation:                        
Basic     28,426       27,350       27,993       27,258  
Diluted     30,229       27,350       29,909       27,258  
                         
Stock-based compensation included in above costs and expenses:                        
Cost of revenue   $ 97     $ 51     $ 241     $ 260  
Research and development     163       59       387       444  
Sales and marketing     81       74       181       266  
General and administrative     158       124       388       393  
    $ 499     $ 308     $ 1,197     $ 1,363  
                         
Amortization of intangible assets included in above costs and expenses:                        
Cost of revenue   $ 67     $ 67     $ 201     $ 201  
Research and development           437       170       1,310  
    $ 67     $ 504     $ 371     $ 1,511  
                         
                         

 

eGain Corporation
GAAP to Non-GAAP Reconciliation Table
(in thousands)
(unaudited)
                         
    Three Months Ended
March 31,
  Nine Months Ended
March 31,
    2019   2018     2019   2018  
Income (loss) from operations   $ 1,789   $ 444     $ 4,672   $ (206 )
Add:                        
Stock-based compensation     499     308       1,197     1,363  
Amortization of acquired intangibles     67     504       371     1,511  
Non-GAAP income from operations   $ 2,355   $ 1,256     $ 6,240   $ 2,668  
                         
Net income (loss)   $ 1,398   $ (99 )   $ 4,002   $ (1,455 )
Add:                        
Stock-based compensation     499     308       1,197     1,363  
Amortization of acquired intangibles     67     504       371     1,511  
Non-GAAP net income   $ 1,964   $ 713     $ 5,570   $ 1,419  
Per share information:                        
Non-GAAP earnings per share:                        
Basic   $ 0.07   $ 0.03     $ 0.20   $ 0.05  
Diluted   $ 0.06   $ 0.02     $ 0.19   $ 0.05  
Weighted-average shares used in computation:                        
Basic     28,426     27,350       27,993     27,258  
Diluted     30,229     29,048       29,909     27,518  
                         

 

eGain Corporation
Other GAAP to Non-GAAP Supplemental Financial Information
(in thousands)
(unaudited)
                                   
    Three Months Ended
March 31,
  Growth Rates
    2019   2018           
    Reported under
Topic 606
  Topic 606
Impact
  Excluding
Topic 606 Impact
  Reported under
Topic 605
  Reported under
Topic 606
  Excluding Topic
606 Impact
Total deferred revenue:                                  
GAAP deferred revenue   $ 33,301     $ (3,670 )   $ 29,631   $ 29,586            
Unbilled and uncollected contractual commitments (off-balance sheet)     30,516       5,998       36,514     41,525            
Total deferred revenue:   $ 63,817     $ 2,328     $ 66,145   $ 71,111       (10 %)   (7 %)
                                   
Revenue:                                  
SaaS   $ 11,849     $ 84     $ 11,933   $ 9,062       31 %   32 %
Legacy support     3,469       (21 )     3,448     4,302       (19 %)   (20 %)
GAAP subscription     15,318       63       15,381     13,364       15 %   15 %
GAAP professional services     1,686       70       1,756     2,381       (29 %)   (26 %)
Total non-GAAP revenue   $ 17,004     $ 133     $ 17,137   $ 15,745       8 %   9 %
                                   
Cost of Revenue:                                  
GAAP subscription   $ 3,625                 $ 3,317            
Add back:                                  
Amortization of intangible assets     (67 )                 (67 )          
Non-GAAP subscription   $ 3,558                 $ 3,250            
                                   
GAAP professional services   $ 1,672                 $ 2,118            
Add back:                                  
Stock-based compensation     (97 )                 (51 )          
Non-GAAP professional services   $ 1,575                 $ 2,067            
                                   
GAAP total cost of revenue   $ 5,297                 $ 5,435            
Add back:                                  
Stock-based compensation     (97 )                 (51 )          
Amortization of intangible assets     (67 )                 (67 )          
Non-GAAP total cost of revenue   $ 5,133                 $ 5,317       (3 %)    
                                   
Gross Profit:                                  
Non-GAAP subscription   $ 11,760                 $ 10,114            
Non-GAAP professional services     111                   314            
Non-GAAP gross profit   $ 11,871                 $ 10,428       14 %    
                                   
Operating expenses:                                  
GAAP research and development   $ 3,622                 $ 3,641            
Add back:                                  
Stock-based compensation expense     (163 )                 (59 )          
Amortization of acquired intangible assets     -                   (437 )          
Non-GAAP research and development   $ 3,459                 $ 3,145       10 %    
                                   
GAAP sales and marketing   $ 4,320     $ 146     $ 4,466   $ 4,360            
Add back:                                  
Stock-based compensation expense     (81 )                 (74 )          
Amortization of acquired intangible assets                       -            
Non-GAAP sales and marketing   $ 4,239                 $ 4,286       (1 %)    
                                   
GAAP general and administrative   $ 1,976                 $ 1,865            
Add back:                                  
Stock-based compensation expense     (158 )                 (124 )          
Amortization of acquired intangible assets                                  
Non-GAAP general and administrative   $ 1,818                 $ 1,741       4 %    
                                   
GAAP operating expenses   $ 9,918                 $ 9,866            
Add back:                                  
Stock-based compensation expense     (402 )                 (257 )          
Amortization of acquired intangible assets                       (437 )          
Non-GAAP operating expenses   $ 9,516                 $ 9,172       4 %    
                                   
                                   

 

eGain Corporation
Other GAAP to Non-GAAP Supplemental Financial Information
(in thousands)
(unaudited)
                                   
    Nine Months Ended
March 31,
  Growth Rates
    2019   2018
         
    Reported under
Topic 606
  Topic 606
Impact
  Excluding
Topic 606 Impact
  Reported under
Topic 605
  Reported under
Topic 606
  Excluding Topic
606 Impact
Total deferred revenue:                                  
GAAP deferred revenue   $ 33,301     $ (3,670 )   $ 29,631   $ 29,586            
Unbilled and uncollected contractual commitments (off-balance sheet)     30,516       5,998       36,514     41,525            
Total deferred revenue:   $ 63,817     $ 2,328     $ 66,145   $ 71,111       (10 %)   (7 %)
                                   
Revenue:                                  
SaaS   $ 33,448     $ 124     $ 33,572   $ 23,754       41 %   41 %
Legacy support     11,420       (90 )     11,330     14,069       (19 %)   (19 %)
GAAP subscription     44,868       34       44,902     37,823       19 %   19 %
GAAP professional services     5,540       (735 )     4,805     7,895       (30 %)   (39 %)
Total non-GAAP revenue   $ 50,408     $ (701 )   $ 49,707   $ 45,718       10 %   9 %
                                   
Cost of Revenue:                                  
GAAP subscription   $ 10,711                 $ 9,543            
Add back:                                  
Amortization of intangible assets     (201 )                 (201 )          
Non-GAAP subscription   $ 10,510                 $ 9,342            
                                   
GAAP professional services   $ 5,362                 $ 6,907            
Add back:                                  
Stock-based compensation     (241 )                 (260 )          
Non-GAAP professional services   $ 5,121                 $ 6,647            
                                   
GAAP total cost of revenue   $ 16,073                 $ 16,450            
Add back:                                  
Stock-based compensation     (241 )                 (260 )          
Amortization of intangible assets     (201 )                 (201 )          
Non-GAAP total cost of revenue   $ 15,631                 $ 15,989       (2 %)    
                                   
Gross Profit:                                  
Non-GAAP subscription   $ 34,358                 $ 28,481            
Non-GAAP professional services     419                   1,248            
Non-GAAP gross profit   $ 34,777                 $ 29,729       17 %    
                                   
Operating expenses:                                  
GAAP research and development   $ 10,777                 $ 10,780            
Add back:                                  
Stock-based compensation expense     (387 )                 (444 )          
Amortization of acquired intangible assets     (170 )                 (1,310 )          
Non-GAAP research and development   $ 10,220                 $ 9,026       13 %    
                                   
GAAP sales and marketing   $ 12,706     $ 438     $ 13,144   $ 13,255            
Add back:                                  
Stock-based compensation expense     (181 )                 (266 )          
Amortization of acquired intangible assets                       -            
Non-GAAP sales and marketing   $ 12,525                 $ 12,989       (4 %)    
                                   
GAAP general and administrative   $ 6,180                 $ 5,439            
Add back:                                  
Stock-based compensation expense     (388 )                 (393 )          
Amortization of acquired intangible assets                                  
Non-GAAP general and administrative   $ 5,792                 $ 5,046       15 %    
                                   
GAAP operating expenses   $ 29,663                 $ 29,474            
Add back:                                  
Stock-based compensation expense     (956 )                 (1,103 )          
Amortization of acquired intangible assets     (170 )                 (1,310 )          
Non-GAAP operating expenses   $ 28,537                 $ 27,061       5 %    
                                   

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