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CST: 19/09/2019 08:22:35   

eGain Reports 37% Growth in SaaS Revenue for Fiscal 2019; Exceeds Full Year Revenue Guidance

15 Days ago

SUNNYVALE, Calif., Sept. 03, 2019 (GLOBE NEWSWIRE) -- eGain (NASDAQ: EGAN), a leading provider of customer engagement hubs, today announced financial results for its fiscal 2019 fourth quarter and full year ended June 30, 2019.

Ashu Roy, eGain CEO, commented, “We had a solid fiscal 2019 with revenue ahead of guidance and strong cash flow. Demand for AI-powered digital automation continues to strengthen and we are stepping up growth investment, especially in the partner ecosystem. The new fiscal year is off to a good start, with strong bookings early in the first quarter.”

Fiscal 2019 Full Year Financial Highlights

  • SaaS revenue was $44.8 million, up 37% year over year (39% in constant currency).
  • Subscription revenue, which includes SaaS and legacy revenue, was $60.0 million, up 17% year over year (19% in constant currency) and comprised 89% of total revenue.
  • Total revenue was $67.2 million, up 10% year over year (12% in constant currency).
  • GAAP net income was $4.2 million, or $0.15 per share on a basic and $0.14 on a diluted basis, compared to a GAAP net loss of $2.0 million, or $(0.07) per share on a basic and diluted basis, for fiscal 2018.
  • Non-GAAP net income was $6.2 million, or $0.22 per share on a basic basis and $0.21 on a diluted basis, compared to non-GAAP net income of $1.7 million, or $0.06 per share on a basic and diluted basis, for fiscal 2018.
  • Cash provided by operations was $7.0 million, up from cash provided by operations of $6.6 million in fiscal 2018.
  • Total cash and cash equivalents, as of June 30, 2019, was $31.9 million, compared to $11.5 million as of June 30, 2018.

Fiscal 2019 Fourth Quarter Financial Highlights

  • SaaS revenue was $11.6 million, up 24% year over year (26% in constant currency).
  • Subscription revenue, which includes SaaS and legacy revenue, was $15.1 million, up 12% year over year (14% in constant currency) and comprised 90% of total revenue.
  • Total revenue was $16.8 million, up 8% year over year.
  • GAAP net income was $166,000, or $0.01 per share on a basic and diluted basis, compared to a GAAP net loss of $536,000, or $(0.02) per share on a basic and diluted basis, for Q4 2018.
  • Non-GAAP net income was $659,000, or $0.02 per share on a basic and diluted basis, compared to non-GAAP net income of $300,000, or $0.01 per share on a basic and diluted basis, for Q4 2018.

Fiscal 2020 Financial Guidance

For the fiscal year ending June 30, 2020, eGain expects full year SaaS revenue of $53.8 million to $55.4 million (on a constant currency basis), which would represent growth between 20% and 24% year over year, total revenue of $72.0 million to $73.6 million (on a constant currency basis), which would represent growth between 7% and 10% year over year and to generate non-GAAP net income of breakeven to $2.0 million, or $0.00 to $0.06 per diluted share.

For the first quarter of fiscal 2020, eGain expects SaaS revenue of $11.8 million to $12.1 million (on a constant currency basis), which would represent growth between 23% and 26% year over year, total revenue of $16.8 million to $17.2 million (on a constant currency basis), which would represent growth between 7% and 10% year over year and to generate non-GAAP net income of $0.5 million to $1.0 million, or $0.02 to $0.03 per diluted share.

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. Defined in the supplemental information is SaaS and legacy revenue, where legacy revenue is defined as legacy license and associated legacy support revenue 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 2019 fourth quarter and full year results today via teleconference at 2:00 p.m. Pacific Daylight Time. To access the live call, dial 888-254-3590 (US and Canada) or +1 323-994-2093 (international) and give the participant passcode 9906755. 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. To access the call 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 help 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, including, without limitation: our belief that we see positive business and customer momentum; our belief that our pipeline and the demand for our AI-powered customer engagement platform offering is strong; expected increase in growth investment, including the partner ecosystem; and our beliefs with respect to SaaS revenue growth and net income growth for the fiscal year ending June 30, 2020 and the first quarter of fiscal 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 first quarter of fiscal 2020. 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; weakened global economic conditions which may adversely affect our industry, general political or destabilizing events, including war, conflict or acts of terrorism, 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 Investor Relations
Todd Kehrli or Jim Byers
Phone: 323-468-2300
Email: egan@mkr-group.com



eGain Corporation
  Condensed Consolidated Balance Sheets  
(in thousands)
(unaudited)
           
  June 30,
2019 (*)
  June 30,
2018
ASSETS          
Current assets:          
Cash and cash equivalents $ 31,860     $ 11,498  
Restricted cash   7       6  
Accounts receivable, net   20,411       7,389  
Costs capitalized to obtain revenue contracts, net   740       986  
Prepaid expenses   2,517       2,374  
Other current assets   1,054       285  
Total current assets   56,589       22,538  
Property and equipment, net   525       559  
Costs capitalized to obtain revenue contracts, net of current portion   1,777       891  
Intangible assets, net   294       733  
Goodwill   13,186       13,186  
Other assets   1,383       1,715  
Total assets $ 73,754     $ 39,622  
           
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)          
Current liabilities:          
Accounts payable $ 4,173     $ 3,905  
Accrued compensation   5,480       5,706  
Accrued liabilities   2,353       2,285  
Deferred revenue   30,688       18,364  
Capital lease obligations         42  
Bank borrowings, net of deferred financing costs         259  
Total current liabilities   42,694       30,561  
Deferred revenue, net of current portion   5,801       7,833  
Bank borrowings, net of current portion and deferred financing costs         8,941  
Other long-term liabilities   952       1,000  
Total liabilities   49,447       48,335  
Commitments and contingencies          
Stockholders' equity (deficit):          
Common stock   31       28  
Additional paid-in capital   371,099       346,222  
Notes receivable from stockholders   (88 )     (85 )
Accumulated other comprehensive loss   (1,459 )     (1,618 )
Accumulated deficit   (345,276 )     (353,260 )
Total stockholders' equity (deficit)   24,307       (8,713 )
Total liabilities and stockholders' equity (deficit) $ 73,754     $ 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       Year Ended  
  June 30,      June 30, 
  2019     2018       2019     2018  
Revenue:                        
Subscription $ 15,144     $ 13,529       $ 60,013     $ 51,352  
Professional services   1,679       2,060         7,219       9,955  
Total revenue   16,823       15,589         67,232       61,307  
Cost of revenue:                        
Cost of subscription   4,265       3,609         14,976       13,152  
Cost of professional services   1,502       2,277         6,865       9,184  
Total cost of revenue   5,767       5,886         21,841       22,336  
Gross profit   11,056       9,703         45,391       38,971  
Operating expenses:                        
Research and development   3,593       3,931         14,369       14,711  
Sales and marketing   4,596       4,426         17,302       17,681  
General and administrative   2,016       2,128         8,198       7,567  
Total operating expenses   10,205       10,485         39,869       39,959  
Income (loss) from operations   851       (782 )       5,522       (988 )
Interest expense, net   130       (185 )       (319 )     (983 )
Otherincome (expense), net   (13 )     143         (202 )     (206 )
Income (loss) before income tax benefit (provision)   968       (824 )       5,001       (2,177 )
Income tax expense (provision)   (802 )     288         (833 )     186  
Net income (loss) $ 166     $ (536 )     $ 4,168     $ (1,991 )
Per share information:                        
Earnings (loss) per share:                        
Basic $ 0.01     $ (0.02 )     $ 0.15     $ (0.07 )
Diluted $ 0.01     $ (0.02 )     $ 0.14     $ (0.07 )
Weighted-average shares used in computation:                        
Basic   30,344       27,559         28,579       27,333  
Diluted   31,915       27,559         30,363       27,333  
                         
Summary of stock-based compensation included in the costs and expenses above:                        
Cost of revenue $ 82     $ 63       $ 323     $ 323  
Research and development   132       49         519       493  
Sales and marketing   132       75         313       341  
General and administrative   80       145         468       538  
  $ 426     $ 332       $ 1,623     $ 1,695  
                         
Summary of amortization of purchased intangibles from business combinations in the costs and expenses above:                        
Cost of revenue $ 67     $ 67       $ 268     $ 268  
Research and development         437         170       1,747  
  $ 67     $ 504       $ 438     $ 2,015  

 

eGain Corporation
GAAP to Non-GAAP Reconciliation Table
(in thousands)
(unaudited)
                       
  Three Months Ended
June 30,
  Year Ended
June 30,
    2019     2018       2019     2018  
Income (loss) from operations $ 851   $ (782 )   $ 5,522   $ (988 )
Add:                      
Stock-based compensation   426     332       1,623     1,695  
Amortization of acquired intangibles   67     504       438     2,015  
Non-GAAP income from operations $ 1,344   $ 54     $ 7,583   $ 2,722  
                       
Net income (loss) $ 166   $ (536 )   $ 4,168   $ (1,991 )
Add:                      
Stock-based compensation   426     332       1,623     1,695  
Amortization of acquired intangibles   67     504       438     2,015  
Non-GAAP net income $ 659   $ 300     $ 6,229   $ 1,719  
Per share information:                      
Non-GAAP earnings per share:                      
Basic $ 0.02   $ 0.01     $ 0.22   $ 0.06  
Diluted $ 0.02   $ 0.01     $ 0.21   $ 0.06  
Weighted-average shares used in computation:                      
Basic   30,344     27,559       28,579     27,333  
Diluted   31,915     29,771       30,363     27,579  

 

eGain Corporation
Other GAAP to Non-GAAP Supplemental Financial Information
(in thousands)
(unaudited)
                                       
    Three Months Ended
June 30,
  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 Constant currency growth rates [1]
Revenue:                                      
SaaS   $ 11,572     $ 187     $ 11,759   $ 9,343       24%   26%   26%
Legacy     3,572       (116 )     3,456     4,186       (15%)   (17%)   (12%)
GAAP subscription     15,144       71       15,215     13,529       12%   12%   14%
GAAP professional services     1,679       203       1,882     2,060       (18%)   (9%)   (16%)
Total non-GAAP revenue   $ 16,823     $ 274     $ 17,097   $ 15,589       8%   10%   10%
                                       
Cost of Revenue:                                      
GAAP subscription   $ 4,265                 $ 3,609                
Add back:                                      
Amortization of intangible assets     (67 )                 67                
Non-GAAP subscription   $ 4,198                 $ 3,676                
                                       
GAAP professional services   $ 1,502                 $ 2,277                
Add back:                                      
Stock-based compensation     (82 )                 63                
Non-GAAP professional services   $ 1,420                 $ 2,340                
                                       
GAAP total cost of revenue   $ 5,767                 $ 5,886                
Add back:                                      
Stock-based compensation     (82 )                 63                
Amortization of intangible assets     (67 )                 67                
Non-GAAP total cost of revenue   $ 5,618                 $ 6,016       (7%)       1%
                                       
Gross Profit:                                      
Non-GAAP subscription   $ 10,946                 $ 9,853                
Non-GAAP professional services     259                   (280 )              
Non-GAAP gross profit   $ 11,205                 $ 9,573       17%       16%
                                       
Operating expenses:                                      
GAAP research and development   $ 3,593                 $ 3,931                
Add back:                                      
Stock-based compensation expense     (132 )                 (49 )              
Amortization of acquired intangible assets     -                   437                
Non-GAAP research and development   $ 3,461                 $ 4,319       (20%)       7%
                                       
GAAP sales and marketing   $ 4,596     $ 117     $ 4,713   $ 4,426                
Add back:                                      
Stock-based compensation expense     (132 )                 (75 )              
Amortization of acquired intangible assets                       -                
Non-GAAP sales and marketing   $ 4,464                 $ 4,351       3%       6%
                                       
GAAP general and administrative   $ 2,016                 $ 2,128                
Add back:                                      
Stock-based compensation expense     (80 )                 (145 )              
Amortization of acquired intangible assets                                      
Non-GAAP general and administrative   $ 1,936                 $ 1,983       (2%)       (3%)
                                       
GAAP operating expenses   $ 10,205                 $ 10,485                
Add back:                                      
Stock-based compensation expense     (344 )                 (269 )              
Amortization of acquired intangible assets                       437                
Non-GAAP operating expenses   $ 9,861                 $ 10,653       (7%)       4%
                                       
                                       
                                       
[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 Corporation
Other GAAP to Non-GAAP Supplemental Financial Information
(in thousands)
(unaudited)
                                     
    Year Ended
June 30,
  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 Constant currency
growth rates [1]
Revenue:                                    
SaaS   $ 44,788     $ 338     $ 45,126   $ 32,694     37%   38%   39%
Legacy     15,225       (232 )     14,993     18,658     (18%)   (20%)   (16%)
GAAP subscription     60,013       106       60,119     51,352     17%   17%   19%
GAAP professional services     7,219       (533 )     6,686     9,955     (27%)   (33%)   (26%)
Total non-GAAP revenue   $ 67,232     $ (427 )   $ 66,805   $ 61,307     10%   9%   12%
                                     
Cost of Revenue:                                    
GAAP subscription   $ 14,976                 $ 13,152              
Add back:                                    
Amortization of intangible assets     (268 )                 (268 )            
Non-GAAP subscription   $ 14,708                 $ 12,884              
                                     
GAAP professional services   $ 6,865                 $ 9,184              
Add back:                                    
Stock-based compensation     (323 )                 (323 )            
Non-GAAP professional services   $ 6,542                 $ 8,861              
                                     
GAAP total cost of revenue   $ 21,841                 $ 22,336              
Add back:                                    
Stock-based compensation     (323 )                 (323 )            
Amortization of intangible assets     (268 )                 (268 )            
Non-GAAP total cost of revenue   $ 21,250                 $ 21,745     (2%)       0%
                                     
Gross Profit:                                    
Non-GAAP subscription   $ 45,305                 $ 38,468              
Non-GAAP professional services     678                   1,094              
Non-GAAP gross profit   $ 45,983                 $ 39,562     16%       18%
                                     
Operating expenses:                                    
GAAP research and development   $ 14,369                 $ 14,711              
Add back:                                    
Stock-based compensation expense     (519 )                 (493 )            
Amortization of acquired intangible assets     (170 )                 (1,747 )            
Non-GAAP research and development   $ 13,680                 $ 12,471     10%       13%
                                     
GAAP sales and marketing   $ 17,302     $ 555     $ 17,857   $ 17,681              
Add back:                                    
Stock-based compensation expense     (313 )                 (341 )            
Amortization of acquired intangible assets                       -              
Non-GAAP sales and marketing   $ 16,989                 $ 17,340     (2%)       0%
                                     
GAAP general and administrative   $ 8,198                 $ 7,567              
Add back:                                    
Stock-based compensation expense     (468 )                 (538 )            
Amortization of acquired intangible assets                                    
Non-GAAP general and administrative   $ 7,730                 $ 7,029     10%       11%
                                     
GAAP operating expenses   $ 39,869                 $ 39,959              
Add back:                                    
Stock-based compensation expense     (1,300 )                 (2,626 )            
Amortization of acquired intangible assets     (170 )                 (1,747 )            
Non-GAAP operating expenses   $ 38,399                 $ 35,586     8%       6%
                                     
                                     
                                     
[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.

 

 

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