Here are three stocks with buy rank and strong momentum characteristics for investors to consider today, October 7th:eGain Corporation (EGAN) : This company that provides an AI-powered knowledge hub designed to automate and enhance customer experiences has a Zacks Rank #1 and witnessed the Zacks Consensus Estimate for its current year earnings increasing 52.2% over the last 60 days.eGain’s shares gained 51.4% over the last three months compared with the S&P 500’s advance of 7.8%. The company possesses a Mom ...

As a former researcher in knowledge management, many years ago I took interest in eGain Corporation (NASDAQ: EGAN ), a software provider of knowledge management solutions. However, I could never reconcile what sounded like a solid business story with the relatively poor performanceDr. Duru has blogged about financial markets since the year 2000. A veteran of the dot-com bubble and bust, the financial crisis, and the coronavirus pandemic, he fully appreciates the value in trading and investing around the ext ...

Group 1 - eGain (EGAN) is outperforming the Computer and Technology sector with a year-to-date return of 43.3%, compared to the sector's average return of 20.6% [4] - eGain is ranked 2 (Buy) in the Zacks Rank system, indicating a strong earnings outlook with a 220% increase in the consensus estimate for its full-year earnings over the past three months [3] - The Internet - Software industry, to which eGain belongs, has an average return of 23.6% this year, further highlighting eGain's strong performance within its industry [5] Group 2 - Draganfly Inc. (DPRO) has also shown strong performance in the Computer and Technology sector with a year-to-date return of 30.2% [4] - Draganfly Inc. is also ranked 2 (Buy) in the Zacks Rank system, with a 37.9% increase in its current year EPS consensus estimate over the past three months [5] - The Computers - IT Services industry, where Draganfly Inc. is categorized, has underperformed with a return of -15.1% since the beginning of the year [6]

[Forward-Looking Statements](index=5&type=section&id=Forward-Looking%20Statements) The report contains forward-looking statements subject to risks and uncertainties, covering future financial performance, market expectations, and business plans - The report contains forward-looking statements regarding future periods, events, and financial performance, identified by words like "believe," "expect," "target," and conditional verbs; these statements are subject to various risks and uncertainties that could cause actual results to differ materially from projections[10](index=10&type=chunk)[11](index=11&type=chunk) - Key forward-looking statements include beliefs about non-GAAP operating income, expected benefits of solutions, market opportunities, customer and market expectations, sales cycles, financial metrics, AI automation in contact centers, business plans, technology changes (including AI), product development, competition, demand for solutions, customer composition, reliance on partnerships, cybersecurity risks, regulatory compliance, tax legislation effects, privacy laws, trade policies, intellectual property, capital resources, international operations, foreign currency fluctuations, inflation, and health epidemics[10](index=10&type=chunk) [Summary Risk Factors](index=7&type=section&id=Summary%20Risk%20Factors) The company faces numerous risks including operational unpredictability, SaaS model challenges, intense competition, and regulatory changes, which could impact its strategy and financial results - The company's business is exposed to numerous risks and uncertainties that could impact its strategy and financial results; key risks include the ability to manage business plans, improve solutions, innovate, execute sales and marketing, ensure customer acceptance, predict subscription renewals, adapt to new legislation, compete effectively, manage partnerships, obtain capital, manage growth, retain key personnel, protect intellectual property, and mitigate impacts from foreign currency fluctuations, inflation, global economic environment, trade policies, and public health pandemics[13](index=13&type=chunk)[14](index=14&type=chunk) - Specific operational risks highlighted are the inherent unpredictability of factors beyond control, risks associated with the SaaS business model, revenue and operating result fluctuations due to deferred revenue recognition, inability to accurately predict subscription renewal rates, lengthy and unpredictable sales cycles, dependence on a small number of key customers, intense competition in the customer engagement software market (including generative AI), and challenges in expanding sales and marketing[15](index=15&type=chunk) - Further risks include difficulties in customer product implementation, significant international operations exposure, unplanned system interruptions or capacity issues in third-party data centers, costly software errors, increased costs/liabilities from Service Level Agreements, dependence on broad market acceptance of applications and business model, inability to respond to rapid technological change, reliance on third-party technologies, and challenges in managing offshore product development and services[15](index=15&type=chunk) - Cybersecurity breaches, changes in privacy and data protection laws (e.g., GDPR), evolving regulations for cloud computing and AI, and changes in domestic and foreign trade policies (e.g., tariffs) also pose significant risks[16](index=16&type=chunk) [PART I](index=12&type=section&id=PART%20I) [ITEM 1. BUSINESS](index=12&type=section&id=ITEM%201.%20BUSINESS) eGain Corporation automates customer experience with an AI knowledge hub SaaS solution for enterprises, operating globally to enhance service and reduce costs through integrated AI Agent, AI Knowledge Hub, and Conversation Hub - eGain automates customer experience with an AI knowledge hub SaaS solution, aiming to improve customer experience and reduce costs for enterprises by synthesizing and delivering trusted answers[18](index=18&type=chunk) - The company's solution is structured into three main hubs: eGain AI Agent (for agent assistance), eGain AI Knowledge Hub (for centralized, guided knowledge), and eGain Conversation Hub (for omnichannel interaction management)[27](index=27&type=chunk)[28](index=28&type=chunk)[29](index=29&type=chunk)[30](index=30&type=chunk) - eGain's solutions offer benefits such as enhanced customer experience, reduced operating costs through self-service automation and improved agent productivity, ensured compliance, and delivery of insights for service and product improvement[32](index=32&type=chunk) - The company primarily sells to large enterprises (over **$1 billion** in annual revenue or government organizations), which accounted for over **87%** of its annual recurring cloud revenue in fiscal year 2025; North America and EMEA collectively generated **78%** and **22%** of total revenue, respectively, in FY2025[37](index=37&type=chunk) - eGain competes with application software providers like LivePerson, NICE, and Verint, and occasionally with platform partners such as Five9, Genesys, Microsoft, Salesforce, and ServiceNow[39](index=39&type=chunk) - Growth strategies include advancing product and platform leadership (especially in AI), investing in direct sales and marketing, developing new partner relationships, and expanding within existing enterprise accounts[42](index=42&type=chunk)[43](index=43&type=chunk)[44](index=44&type=chunk)[45](index=45&type=chunk) - As of June 30, 2025, eGain had **446 employees** (**444 full-time**), with significant portions in product development (**173**) and services/support (**176**)[59](index=59&type=chunk) [ITEM 1A. RISK FACTORS](index=25&type=section&id=ITEM%201A.%20RISK%20FACTORS) eGain faces diverse risks from its business model, market competition, international operations, and technology, including revenue fluctuations, intense AI-driven competition, global operational exposure, cybersecurity threats, and evolving data privacy and AI regulations - The SaaS business model is subject to risks, including customer non-renewal or reduction of subscriptions, which can adversely affect operating and financial results; revenue recognition over time means downturns are not immediately reflected[68](index=68&type=chunk)[72](index=72&type=chunk)[74](index=74&type=chunk) - The market for customer engagement software, including generative AI, is highly competitive; failure to compete successfully against established and new entities with greater resources could adversely affect the business[82](index=82&type=chunk)[83](index=83&type=chunk)[84](index=84&type=chunk) - Significant international operations (**22%** of revenue from EMEA, **43%** of workforce in India) expose the company to risks like foreign currency fluctuations, changes in data privacy laws (e.g., GDPR), geopolitical conflicts, and increased compensation costs in regions like India[95](index=95&type=chunk)[97](index=97&type=chunk)[99](index=99&type=chunk) - Cybersecurity breaches, unauthorized access to data, and system interruptions at third-party data centers or PaaS providers could harm reputation, lead to customer attrition, and incur significant legal and financial liabilities[100](index=100&type=chunk)[101](index=101&type=chunk)[130](index=130&type=chunk)[131](index=131&type=chunk)[136](index=136&type=chunk) - Evolving data privacy laws (e.g., GDPR, CCPA, CPRA, India's DPDP) and AI regulations (e.g., EU AI Act) increase compliance costs, create legal uncertainties, and may limit the use and adoption of eGain's solutions[137](index=137&type=chunk)[141](index=141&type=chunk)[142](index=142&type=chunk)[143](index=143&type=chunk)[150](index=150&type=chunk) - The development and use of AI technologies carry risks such as flawed algorithms, biased datasets, and potential for harmful content, which could lead to reputational harm, regulatory scrutiny, or legal liability[148](index=148&type=chunk)[149](index=149&type=chunk)[150](index=150&type=chunk) - Dependence on a relatively small number of customers for a substantial portion of revenue means the loss of any significant customer could materially and adversely affect financial condition and results of operations[81](index=81&type=chunk) [ITEM 1B. UNRESOLVED STAFF COMMENTS](index=58&type=section&id=ITEM%201B.%20UNRESOLVED%20STAFF%20COMMENTS) There are no unresolved staff comments from the SEC regarding the company's filings - The company has no unresolved staff comments from the Securities and Exchange Commission[176](index=176&type=chunk) [ITEM 1C. CYBERSECURITY](index=58&type=section&id=ITEM%201C.%20CYBERSECURITY) eGain maintains a robust cybersecurity framework aligned with NIST and ISO27001, overseen by a CISO and the Audit Committee, conducting third-party evaluations and managing risks, with no material impact from past incidents - eGain has an enterprise cybersecurity risk mitigation and governance process, detailed in its Information Security Protection Program (Security Plan), which aligns with NIST and ISO27001 frameworks[177](index=177&type=chunk)[179](index=179&type=chunk)[180](index=180&type=chunk) - The company engages third-party providers for security control evaluations, including penetration testing and independent audits, to test the design and operational effectiveness of its security controls[178](index=178&type=chunk) - A Third-Party Cyber Risk Management Plan ensures due diligence on third parties, including security and privacy clauses in contracts and regular reviews[181](index=181&type=chunk) - A Cyber Incident Response Plan outlines processes for detecting, identifying, prioritizing, and analyzing security events, involving the CISO, legal counsel, and business stakeholders for appropriate response and mitigation[182](index=182&type=chunk) - The CISO, with over **25 years** of experience in IT and security, leads the company's cybersecurity strategy and reports to the Chief Financial Officer; the Audit Committee of the board oversees data privacy and cybersecurity risks, receiving annual updates from the CISO[185](index=185&type=chunk)[186](index=186&type=chunk)[187](index=187&type=chunk) - As of the report date, eGain is not aware of any material risks from cybersecurity threats or past incidents that have materially affected or are likely to materially affect its business strategy, financial condition, results of operations, or cash flows[184](index=184&type=chunk) [ITEM 2. PROPERTIES](index=60&type=section&id=ITEM%202.%20PROPERTIES) eGain leases all its facilities, including headquarters in Sunnyvale, California, and offices in Newbury, England, and Pune, India, which are considered adequate for current and near-future operations - eGain leases all its facilities, including corporate headquarters in Sunnyvale, California, and offices in Newbury, England, and Pune, India[188](index=188&type=chunk) - The company believes its current offices are adequate for its present and near-future operating needs[188](index=188&type=chunk) [ITEM 3. LEGAL PROCEEDINGS](index=60&type=section&id=ITEM%203.%20LEGAL%20PROCEEDINGS) eGain is not a party to any material legal proceedings and is unaware of significant pending or threatened actions, though it evaluates claims including intellectual property infringement and indemnifies customers - eGain is not currently a party to any legal proceedings, nor is it aware of any pending or threatened legal proceedings that could have a material adverse effect on its business, consolidated operating results, or financial condition[189](index=189&type=chunk) - In the ordinary course of business, the company is involved in various legal proceedings and claims, including alleged infringement of third-party patents and other intellectual property rights, commercial, labor, and employment matters[189](index=189&type=chunk) - The company indemnifies its customers against third-party intellectual property infringement claims, which could increase costs in the event of an adverse ruling[190](index=190&type=chunk) [ITEM 4. MINE SAFETY DISCLOSURES](index=60&type=section&id=ITEM%204.%20MINE%20SAFETY%20DISCLOSURES) This item is not applicable to eGain Corporation - The disclosure requirement for mine safety is not applicable to eGain Corporation[191](index=191&type=chunk) [PART II](index=62&type=section&id=PART%20II) [ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES](index=62&type=section&id=ITEM%205.%20MARKET%20FOR%20REGISTRANT%27S%20COMMON%20EQUITY%2C%20RELATED%20STOCKHOLDER%20MATTERS%20AND%20ISSUER%20PURCHASES%20OF%20EQUITY%20SECURITIES) eGain's common stock trades on Nasdaq under 'EGAN', with approximately 120 stockholders as of June 30, 2025; the company has never paid cash dividends and has a $40.0 million stock repurchase program with $1.2 million remaining - eGain's common stock is traded on the Nasdaq Stock Market under the symbol "**EGAN**"[194](index=194&type=chunk) - As of June 30, 2025, there were approximately **120 stockholders of record**[195](index=195&type=chunk) - The company has never declared or paid any cash dividends on its common stock and does not intend to in the foreseeable future, planning to retain all available funds for business operations[196](index=196&type=chunk) - On May 31, 2024, the board authorized a **$20.0 million** increase in its stock repurchase program, bringing the aggregate amount to **$40.0 million**; as of June 30, 2025, approximately **$1.2 million** remained available[197](index=197&type=chunk) Stock Repurchase Activity (Q4 FY2025) | Period | Total Number of Shares Purchased | Average Price Paid per Share | Approximate Dollar Value of Shares That May Yet Be Purchased Under the Program (in thousands) | | :--- | :--- | :--- | :--- | | April 1, 2025 to April 30, 2025 | 183,906 | $5.38 | $3,962 | | May 1, 2025 to May 31, 2025 | 215,648 | $5.87 | $2,696 | | June 1, 2025 to June 30, 2025 | 230,858 | $6.53 | $1,188 | | **Total** | **630,412** | | | Cumulative Total Stockholder Return (FY2020-FY2025) | Index | 6/30/2020 | 6/30/2021 | 6/30/2022 | 6/30/2023 | 6/30/2024 | 6/30/2025 | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | eGain Corporation | $100.00 | $103.33 | $87.76 | $67.42 | $56.80 | $56.26 | | Nasdaq Composite | $100.00 | $145.56 | $111.46 | $140.60 | $182.23 | $210.79 | | S&P Software & Services Select Industry Index | $100.00 | $154.47 | $100.40 | $120.90 | $137.30 | $172.80 | [ITEM 6. RESERVED](index=65&type=section&id=ITEM%206.%20RESERVED) This item is intentionally reserved and contains no information [ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS](index=65&type=section&id=ITEM%207.%20MANAGEMENT%27S%20DISCUSSION%20AND%20ANALYSIS%20OF%20FINANCIAL%20CONDITION%20AND%20RESULTS%20OF%20OPERATIONS) eGain's total revenue decreased by **$4.4 million (4.7%)** to **$88.4 million** in FY2025, while net income significantly increased to **$32.3 million** due to a **$26.6 million** deferred tax valuation allowance release, with stable liquidity of **$62.9 million** in cash - eGain automates customer experience with an AI knowledge hub solution, selling its SaaS solution to enterprises to improve customer experience and reduce costs[210](index=210&type=chunk) Total Revenue (FY2025 vs. FY2024) | Revenue Category | FY2025 (in thousands) | FY2024 (in thousands) | Change (in thousands) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | SaaS revenue | $81,921 | $85,082 | $(3,161) | (4)% | | Professional services | $6,510 | $7,721 | $(1,211) | (16)% | | **Total revenue** | **$88,431** | **$92,803** | **$(4,372)** | **(4.7)%** | Non-GAAP Operating Income (FY2025 vs. FY2024) | Metric | FY2025 (in thousands) | FY2024 (in thousands) | | :--- | :--- | :--- | | Income from operations (GAAP) | $4,433 | $5,971 | | Add: Stock-based compensation | $2,449 | $4,529 | | **Non-GAAP income from operations** | **$6,882** | **$10,500** | - Net income significantly increased to **$32.3 million** in FY2025 from **$7.8 million** in FY2024, primarily due to an income tax benefit of **$26.6 million** in FY2025 (compared to a provision of **$1.9 million** in FY2024) resulting from the release of a deferred tax valuation allowance[285](index=285&type=chunk)[319](index=319&type=chunk) - Total costs and operating expenses decreased by **$2.8 million** in FY2025, mainly due to decreases in personnel-related expenses, legal expenses, outside consulting costs, and credit loss expenses, partially offset by increases in cloud computing and lead generation costs[281](index=281&type=chunk) Key Financial Measures (FY2025 vs. FY2024) | Metric | FY2025 (in thousands) | FY2024 (in thousands) | Change (in thousands) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Income from operations | $4,433 | $5,971 | $(1,538) | (26)% | | Operating margin | 5% | 6% | -1% | | | Interest income, net | $2,469 | $3,798 | $(1,329) | (35)% | | Other expense, net | $(1,265) | $(51) | $(1,214) | 2380% | | Income before income tax benefit (provision) | $5,637 | $9,718 | $(4,081) | (42)% | | Benefit from (provision for) income taxes | $26,617 | $(1,938) | $28,555 | -1473% | | Net income | $32,254 | $7,780 | $24,474 | 315% | | Basic EPS | $1.15 | $0.25 | $0.90 | 360% | | Diluted EPS | $1.13 | $0.25 | $0.88 | 352% | Liquidity and Capital Resources (FY2025 vs. FY2024) | Metric | June 30, 2025 (in thousands) | June 30, 2024 (in thousands) | | :--- | :--- | :--- | | Cash and cash equivalents | $62,909 | $70,003 | | Restricted cash | $8 | $8 | | Total liquidity sources | $95,700 | $101,700 | | Working capital | $38,400 | $44,500 | | Deferred revenue | $50,531 | $49,269 | Cash Flows (FY2025 vs. FY2024) | Cash Flow Activity | FY2025 (in thousands) | FY2024 (in thousands) | Change (in thousands) | | :--- | :--- | :--- | :--- | | Net cash provided by operating activities | $5,263 | $12,454 | $(7,191) | | Net cash used in investing activities | $(565) | $(198) | $(367) | | Net cash used in financing activities | $(14,393) | $(15,391) | $998 | | Effect of exchange rate differences on cash and cash equivalents | $2,601 | $(62) | $2,663 | | Net decrease in cash, cash equivalents and restricted cash | $(7,094) | $(3,197) | $(3,897) | | Cash, cash equivalents and restricted cash at end of year | $62,917 | $70,011 | $(7,094) | [ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK](index=85&type=section&id=ITEM%207A.%20QUANTITATIVE%20AND%20QUALITATIVE%20DISCLOSURES%20ABOUT%20MARKET%20RISK) eGain faces market risks from foreign currency fluctuations, particularly USD, Euro, GBP, and INR, and interest rate changes, but does not use derivatives, with a 10% USD increase potentially decreasing foreign assets by **$2.6 million** - eGain is exposed to foreign currency exchange risk, principally from fluctuations between the U.S. Dollar, Euro, British Pound, and Indian Rupee, as international sales are made in local currencies[299](index=299&type=chunk) - As of June 30, 2025, identifiable assets denominated in foreign currency totaled approximately **$25.9 million**; a **10%** increase in the U.S. dollar's value relative to other currencies would decrease these assets by **$2.6 million**[299](index=299&type=chunk) - The company does not currently use derivative instruments to hedge against foreign exchange risk[299](index=299&type=chunk)[301](index=301&type=chunk) - eGain's exposure to interest rate risk relates primarily to interest earned on cash and cash equivalents; the company's investment policy focuses on short-term, low-risk investment-grade debt instruments[300](index=300&type=chunk) - A hypothetical **10%** change in market interest rates is not expected to have a material impact on the fair value of securities or cash flows/income[301](index=301&type=chunk) [PART III](index=141&type=section&id=PART%20III) [ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE](index=141&type=section&id=ITEM%2010.%20DIRECTORS%2C%20EXECUTIVE%20OFFICERS%20AND%20CORPORATE%20GOVERNANCE) Information on eGain's directors, executive officers, and corporate governance, including an insider trading policy, is incorporated by reference from the 2025 Annual Meeting of Stockholders Proxy Statement - Information on directors, executive officers, and corporate governance is incorporated by reference from the 2025 Annual Meeting of Stockholders Proxy Statement[477](index=477&type=chunk) - Specific information about executive officers is also provided in Part I, Item 1 of this report[478](index=478&type=chunk) - eGain has adopted an insider trading policy designed to promote compliance with insider trading laws, rules, and Nasdaq listing standards[479](index=479&type=chunk) [ITEM 11. EXECUTIVE COMPENSATION](index=141&type=section&id=ITEM%2011.%20EXECUTIVE%20COMPENSATION) Executive compensation details are incorporated by reference from the Proxy Statement, with the company not granting equity awards in anticipation of material nonpublic information and historically limiting stock option grants to named executive officers - Information on executive compensation is incorporated by reference from the Proxy Statement[480](index=480&type=chunk) - eGain does not grant equity awards in anticipation of material nonpublic information, nor does it time the release of such information based on equity award grant dates[481](index=481&type=chunk) - Historically, including in fiscal year 2025, the compensation committee has not granted stock options, stock appreciation rights, or similar option-like instruments to named executive officers, except in certain circumstances like hiring or promotion[481](index=481&type=chunk) [ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS](index=141&type=section&id=ITEM%2012.%20SECURITY%20OWNERSHIP%20OF%20CERTAIN%20BENEFICIAL%20OWNERS%20AND%20MANAGEMENT%20AND%20RELATED%20STOCKHOLDER%20MATTERS) Security ownership information is incorporated by reference from the Proxy Statement; as of June 30, 2025, eGain had **3,954,716** outstanding options and rights with a weighted-average exercise price of **$8.80**, and **2,089,443** shares available for future issuance - Information on security ownership of certain beneficial owners and management is incorporated by reference from the Proxy Statement[482](index=482&type=chunk) Equity Compensation Plan Summary (as of June 30, 2025) | Plan Category | Number of securities to be issued upon exercise of outstanding options and rights (a) | Weighted-average exercise price of outstanding options and rights (b) | Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a)) (c) | | :--- | :--- | :--- | :--- | | Equity compensation plans approved by security holders (2005 Stock Incentive Plan) | 3,477,199 | $9.67 | 2,089,443 | | Equity compensation plans not approved by security holders (2005 Management Stock Option Plan) | 477,517 | $2.49 | — | | **Total** | **3,954,716** | **$8.80** | **2,089,443** | [ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS AND DIRECTOR INDEPENDENCE](index=142&type=section&id=ITEM%2013.%20CERTAIN%20RELATIONSHIPS%20AND%20RELATED%20TRANSACTIONS%20AND%20DIRECTOR%20INDEPENDENCE) Information regarding certain relationships, related party transactions, and director independence is incorporated by reference from the Proxy Statement - Information on related party transactions, director independence, and board meetings/committees is incorporated by reference from the Proxy Statement[484](index=484&type=chunk) [ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES](index=142&type=section&id=ITEM%2014.%20PRINCIPAL%20ACCOUNTING%20FEES%20AND%20SERVICES) Information concerning principal accounting fees and services is incorporated by reference from the Proxy Statement - Information on principal accounting fees and services is incorporated by reference from the Proxy Statement[485](index=485&type=chunk) [PART IV](index=143&type=section&id=PART%20IV) [ITEM 15. EXHIBIT AND FINANCIAL STATEMENT SCHEDULES](index=143&type=section&id=ITEM%2015.%20EXHIBIT%20AND%20FINANCIAL%20STATEMENT%20SCHEDULES) This section details the financial statements, schedules, and exhibits filed with the Form 10-K, including consolidated financial statements, a valuation and qualifying accounts schedule, and a comprehensive list of corporate documents and certifications - The report includes consolidated financial statements as of June 30, 2025 and 2024, and for the years ended June 30, 2025 and 2024, as listed in Item 8[488](index=488&type=chunk) Schedule II—Valuation and Qualifying Accounts (FY2025 vs. FY2024) | Provision for Credit Losses | Balance at Beginning of Period | Additions Charged to Expense | Written Off, Net of Recoveries | Balance at End of Period | | :--- | :--- | :--- | :--- | :--- | | Year ended June 30, 2025 | $59 | $63 | $(115) | $7 | | Year ended June 30, 2024 | $237 | $93 | $(271) | $59 | - A comprehensive list of exhibits is provided, including organizational documents, stock plans, lease agreements, insider trading policy, and various certifications[492](index=492&type=chunk)[493](index=493&type=chunk)[494](index=494&type=chunk) [ITEM 16. FORM 10-K SUMMARY](index=147&type=section&id=ITEM%2016.%20FORM%2010-K%20SUMMARY) This item is not applicable to the report - The Form 10-K Summary is not applicable[497](index=497&type=chunk) [SIGNATURES](index=148&type=section&id=SIGNATURES) The report is signed by eGain Corporation's CEO, Ashutosh Roy, and CFO, Eric N. Smit, along with other directors, as of September 12, 2025, granting power of attorney for amendments - The report is signed by Ashutosh Roy (Chief Executive Officer) and Eric N. Smit (Chief Financial Officer) on September 12, 2025[502](index=502&type=chunk)[505](index=505&type=chunk) - A power of attorney is granted to the Chief Executive Officer and Chief Financial Officer to sign and file any amendments to this annual report[503](index=503&type=chunk)

Company Performance - eGain (EGAN) has seen a significant increase in its stock price, rising 39.6% over the past month and reaching a new 52-week high of $8.41 [1] - Year-to-date, eGain's stock has gained 31.3%, outperforming the Zacks Computer and Technology sector's 16.8% and the Zacks Internet - Software industry's 22.7% returns [1] Earnings and Revenue - eGain has a strong track record of positive earnings surprises, beating the Zacks Consensus Estimate in the last four quarters [2] - In the latest earnings report on September 4, 2025, eGain reported an EPS of $0.09, exceeding the consensus estimate of $0.07 [2] - For the current fiscal year, eGain is projected to achieve earnings of $0.35 per share on revenues of $91.74 million, indicating a 75% increase in EPS with a 3.74% change in revenues [2] Valuation Metrics - eGain's current valuation metrics show it trading at 23.4X current fiscal year EPS estimates, below the peer industry average of 31.6X [5] - On a trailing cash flow basis, eGain trades at 22.7X compared to the peer group's average of 27X, suggesting it is not among the top value stocks [5] Zacks Rank and Style Scores - eGain holds a Zacks Rank of 2 (Buy), supported by rising earnings estimates, which positions it favorably for potential gains [6] - The stock has a Value Score of C, a Growth Score of C, and a Momentum Score of A, resulting in a combined VGM Score of B [5][6] Industry Comparison - The Internet - Software industry is performing well, ranking in the top 31% of all industries, providing favorable conditions for eGain and its peers [9] - CLEAR Secure, Inc. (YOU), a peer in the industry, also shows strong performance with a Zacks Rank of 2 (Buy) and a projected EPS of $1.07 on revenues of $889.15 million for the current fiscal year [7][8]

Core Insights - eGain Corporation has appointed John Copeland as Vice President of Marketing, bringing extensive experience in marketing analytics and digital transformation from leading technology companies [1][2] - Copeland's appointment is expected to drive eGain's marketing transformation and accelerate growth in the AI CX automation market [2] Company Background - eGain is a provider of AI CX automation powered by Trusted Knowledge™, aiming to improve business experiences and reduce costs through consumable answers [5] - The company is positioned to leverage the convergence of AI and enterprise knowledge to transform customer experiences [5] Executive Experience - John Copeland previously held leadership roles at ServiceNow, Adobe, eBay, and consulting firms like McKinsey & Company, where he focused on marketing analytics and customer-centric strategies [2][3][4] - At ServiceNow, he optimized global marketing activities and led the activation of Generative AI use cases [2] - His tenure at Adobe included leading teams to enhance digital capabilities and optimize marketing investments across various business segments [3]

Core Insights - eGain Corporation, listed on NASDAQ as EGAN, specializes in customer engagement solutions within the Internet - Software industry, competing with other software companies in the same domain [1] Financial Performance - eGain reported earnings per share (EPS) of $0.09 for the quarter ending June 2025, exceeding the estimated EPS of $0.07, resulting in a 28.57% earnings surprise [2] - The company's revenue for the same quarter was $23.23 million, slightly above the estimated $23.22 million, marking a 1.55% increase over the Zacks Consensus Estimate and an improvement from $22.46 million in the same period last year [3][6] - eGain has consistently outperformed consensus EPS estimates over the past four quarters and surpassed consensus revenue estimates twice in the last four quarters [2][3] Valuation Metrics - eGain's price-to-earnings (P/E) ratio stands at approximately 59.81, indicating that investors are willing to pay $59.81 for every dollar of earnings [4] - The price-to-sales ratio is 1.93, and the enterprise value to sales ratio is 1.18, reflecting the company's valuation relative to its revenue [4] Financial Health - The company maintains a low debt-to-equity ratio of 0.07, indicating a conservative approach to leveraging its equity [5][6] - eGain's current ratio of 1.72 demonstrates a good level of liquidity to cover its short-term liabilities, highlighting its strong financial health [5][6]

Group 1 - eGain reported quarterly earnings of $0.09 per share, exceeding the Zacks Consensus Estimate of $0.07 per share, and showing an increase from $0.08 per share a year ago, resulting in an earnings surprise of +28.57% [1] - The company achieved revenues of $23.23 million for the quarter ended June 2025, surpassing the Zacks Consensus Estimate by 1.55% and increasing from $22.46 million year-over-year [2] - eGain has surpassed consensus EPS estimates in all four of the last quarters and has topped consensus revenue estimates two times during the same period [2] Group 2 - The stock's immediate price movement will depend on management's commentary during the earnings call and the sustainability of earnings expectations [3][4] - eGain shares have increased by approximately 0.2% since the beginning of the year, while the S&P 500 has gained 9.6% [3] - The current consensus EPS estimate for the upcoming quarter is $0.04 on revenues of $23.73 million, and for the current fiscal year, it is $0.23 on revenues of $97.93 million [7] Group 3 - The Zacks Industry Rank indicates that the Internet - Software sector is in the top 29% of over 250 Zacks industries, suggesting a favorable outlook for stocks in this category [8] - Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can be tracked by investors [5] - The estimate revisions trend for eGain was mixed ahead of the earnings release, resulting in a Zacks Rank 3 (Hold) for the stock, indicating expected performance in line with the market [6]

Financial Data and Key Metrics Changes - Total revenue for Q4 was $23.2 million, up 11% sequentially and up 3% year over year, marking the first year-over-year increase in revenue in eight quarters [17] - Non-GAAP gross margin for Q4 was 73%, up from 71% a year ago, while sales gross margin was 80%, up from 76% [17] - For the full year, total revenue was $88.4 million, down 5% year over year, primarily due to churn in the messaging business [19] - Non-GAAP net income for the full year was $5.7 million or $0.20 per share, compared to $4.3 million or $0.40 per share in the prior year [20] Business Line Data and Key Metrics Changes - AI knowledge ARR grew by 25% year over year, with expectations of 20% growth in fiscal 2026 [11] - Sales ARR for knowledge customers increased 25% year over year, while sales ARR for all customers increased 11% [22] - Non-GAAP operating costs for the full fiscal year were $56 million, flat compared to the prior year [19] Market Data and Key Metrics Changes - The company signed significant clients, including the largest nonprofit healthcare network in New Jersey and a major credit union, indicating strong market demand for AI knowledge solutions [5][6] - The partnership with JPMorgan Chase is expected to enhance customer experience and drive AI efficiencies across their business [9][10] Company Strategy and Development Direction - The company plans to focus on AI knowledge solutions, defocusing from less strategic products, such as messaging, which will be sunset in fiscal 2026 [12] - R&D spending is expected to increase by 6% year over year to extend product leadership in the AI knowledge infrastructure market [11][27] - The company aims to achieve gross margin expansion to between 74% and 75% for the year, up from 71% in fiscal 2025 [26] Management's Comments on Operating Environment and Future Outlook - Management noted that AI investments are not showing significant ROI due to a lack of trusted knowledge, which is critical for delivering value [10] - The company expressed optimism about the growing demand for trusted knowledge to support AI initiatives, which is reflected in their bookings for fiscal 2025 [11] - Guidance for fiscal 2026 indicates total revenue is expected to return to growth, with projections between $90.5 million and $92 million [25] Other Important Information - The company repurchased 2.6 million shares at an average price of $6.03 per share during fiscal 2025, with a total of $15.8 million spent [21] - An investor and analyst day event is scheduled for October 14th and 15th in Chicago, providing opportunities for engagement with customers and insights into the business [27] Q&A Session Summary Question: Timing on the sunsetting of the messaging products - Management indicated that the decision was driven by the need to focus on AI knowledge, which is expected to yield better ROI [29] Question: Expected impact of messaging product sunsetting on numbers - The impact is expected to begin in Q2, with a run rate reduction of roughly 50% by the end of fiscal 2026 [31] Question: Details on the partnership with JPMorgan Chase - The partnership is seen as a strategic opportunity to strengthen the relationship and gain insights into customer needs [33] Question: Trends in AI pilot to conversion rates - The conversion rate for AI solutions is currently stable at about two out of three [35] Question: Sustainability of cost reductions in OpEx and COGS - Management noted improvements in COGS due to migration to a new cloud platform and automation processes [37][38] Question: Breakdown of SaaS ARR components - Approximately 60% of total ARR is now from AI knowledge, with the remainder from eGain Analytics Hub and eGain Conversation Hub [44] Question: Competitive position on the Conversation Hub - Management expressed optimism about the Conversation Hub's growth potential as the AI Knowledge Hub expands [48] Question: Pipeline status for mega deals - Currently, there are no deals of JPMorgan Chase's size in the pipeline, but there are several attractive seven-figure opportunities [49] Question: Services gross margins outlook - The goal is to bring services margins closer to break even as efficiencies improve [50]

AI Knowledge Platform & Market Opportunity - eGain helps companies reduce customer service costs by 75% while improving experience by 20 NPS points using AI Knowledge[7] - The AI Knowledge market represents a $20B+ SaaS opportunity for service[12] - Potential cost savings of $400 billion annually through AI Knowledge solutions[11] Financial Performance & Growth - AI Knowledge ARR grew 25% year-over-year in Q425[37] - AI Knowledge ARR represents 59% of SaaS ARR, up from 52% a year ago[38] - AI Knowledge net retention of 115%, up from 98% a year ago[38] - Total revenue for Q425 was $23.2 million, up 3% year-over-year[42] - SaaS revenue for Q425 was $21.7 million, up 6% year-over-year[42] - The company bought back $3.8 million in stock in Q425[42] FY26 Outlook - Targeting 20+% growth in ARR Knowledge business, with ARR of $44.8M in FY25[48]