eGain Corporation ( EGAN ) recently reported its Q1 earnings, and since the company’s share price performed quite well over the past year, it piqued my interest to look into it. The company has been steadily growing itsMSc in Finance. Long-term horizon investor mostly with 5-10 year horizon. I like to keep investing simple. I believe a portfolio should consist of a mix of growth, value, and dividend-paying stocks but usually end up looking for value more than anything. I also sell options from time to time. ...

Core Insights - eGain Corporation has been selected by OCCU || Oregon Community Credit Union to implement its AI Knowledge Hub and AI Agent software to enhance service delivery and member experience [1][3]. Company Overview - OCCU is a not-for-profit financial cooperative with over $3.5 billion in assets, serving approximately 284,000 member-owners [7]. - The credit union aims to modernize its knowledge management system to address operational inefficiencies and improve member service [2]. Solution Details - The eGain AI Knowledge Hub will support over 700 users, including contact center representatives and enterprise users, through a unified platform [3]. - The solution is designed to optimize authoring and governance procedures, enhancing compliance and operational efficiency while improving user experience [4]. Expected Outcomes - The implementation of eGain's solutions is anticipated to increase efficiency by allowing technical writers to focus on strategic initiatives and reduce onboarding time for new agents [4]. - The unified knowledge management system is expected to empower service teams with instant access to trusted answers, thereby improving employee productivity and member experience [5].

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Core Insights - eGain is set to participate in the 14th Annual Roth Technology Conference on November 19, 2025, where CFO Eric Smit and VP of Finance Gautam Garg will meet with institutional investors [1] - The company reported a strong start to the fiscal year with a 23% year-over-year growth in Annual Recurring Revenue (ARR) for its AI Knowledge Hub and a 21% EBITDA margin [2] - eGain recently launched three new AI products at the Solve25 event, which have garnered significant interest from customers and partners, indicating a positive market response [2] Company Overview - eGain provides an AI CX automation platform aimed at enhancing customer experience and reducing operational costs through its AI Knowledge Hub [3]

Group 1 - The article does not provide any relevant content regarding company or industry insights [1]

Core Insights - eGain (EGAN) reported quarterly earnings of $0.17 per share, exceeding the Zacks Consensus Estimate of $0.11 per share, and showing a significant increase from $0.04 per share a year ago, resulting in an earnings surprise of +54.55% [1][2] - The company achieved revenues of $23.51 million for the quarter ended September 2025, surpassing the Zacks Consensus Estimate by 1.15% and up from $21.8 million year-over-year [2] - eGain shares have appreciated approximately 142.4% since the beginning of the year, significantly outperforming the S&P 500's gain of 16.4% [3] Earnings Outlook - The future performance of eGain's stock will largely depend on management's commentary during the earnings call and the company's earnings outlook [4][6] - The current consensus EPS estimate for the upcoming quarter is $0.05 on revenues of $21.54 million, and for the current fiscal year, it is $0.35 on revenues of $91.74 million [7] Industry Context - The Internet - Software industry, to which eGain belongs, is currently ranked in the top 24% of over 250 Zacks industries, indicating a favorable outlook compared to the bottom 50% [8] - Empirical research suggests a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can impact eGain's stock performance [5]

Financial Data and Key Metrics Changes - Total revenue for Q1 was RMB23.5 million, an increase of 8% year over year, reaching the high end of guidance [24] - SaaS revenue increased by 10% year over year, accounting for 93% of total revenue compared to 91% in the previous year [24] - Non-GAAP gross margin for the quarter was 76%, up 600 basis points from 70% a year ago, driven by SaaS gross margin expansion [25] - Non-GAAP net income was RMB4.7 million or $0.17 per share, significantly up from RMB1.3 million or $0.04 per share in the year-ago quarter [27] - Adjusted EBITDA margin for the quarter was 21%, exceeding guidance and up from 6% in the previous year [28] - Cash flow from operations was RMB10.4 million, representing a 44% operating cash flow margin compared to 4% in the year-ago quarter [28] Business Line Data and Key Metrics Changes - ARR for AI knowledge products increased by 23% year over year, while SaaS ARR for all customers increased by 8% [29] - SaaS net retention for knowledge customers was 104%, up from 103% a year ago, while net retention for all customers was 102%, up from 90% [30] Market Data and Key Metrics Changes - Total remaining performance obligations (RPO) increased by 23% year over year, with short-term RPO up 7% [30] Company Strategy and Development Direction - The company is focusing on product-led growth and has made significant product announcements, including the eGain AI knowledge method and eGain AI agent [12][13][15] - The introduction of the Composer product aims to target developers and partners, allowing for a composable platform to operationalize AI solutions [17][21] - The company is investing in building out its leadership team to support growth and product innovation [19][23] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the strong start to the fiscal year, with solid results that beat consensus across the board [33] - The company anticipates a sequential decline in revenue due to the sunsetting of the messaging platform business and delays from government shutdowns affecting professional services [31] - For Q2, the company expects GAAP net income of $1.2 million to $1.7 million and non-GAAP net income of $1.9 million to $2.4 million [31] Other Important Information - The company bought back $1.5 million in stock at an average price of $6.38 per share during the quarter [28] - The balance sheet remains strong, with total cash and cash equivalents at RMB70.9 million, up from RMB62.9 million [29] Q&A Session Summary Question: Sales trends and marketing spend - Management noted a summer slowdown in marketing spend but expects to increase sales hiring investment in the second half of the fiscal year [36][37] Question: Proliferation of AI agents - Management believes that while many companies are experimenting with AI agents, they will ultimately seek to integrate with trusted knowledge systems for serious applications [38][39][40] Question: Composer product integration - The Composer product is designed to allow developers to integrate various AI engines easily, with a focus on providing a trusted knowledge backend [41][42][43] Question: Cash balance strategy - Management indicated that while buybacks will continue, they are also open to tuck-in acquisitions but primarily focus on investing in the business [45][46][47] Question: Update on large knowledge hub opportunities - Management reported steady progress in large opportunities and increased partner engagement in the knowledge hub category [51][52] Question: JPMorgan deployment update - Management confirmed that the first phase of the JPMorgan deployment has gone live, with plans for the next phase underway [54][55]

AI CX Automation Platform November 2025 INVESTOR PRESENTATION Powered by Trusted Knowledge NASDAQ: EGAN Safe Harbor statement This presentation contains forward-looking statements within the meaning of the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995, including without limitation: our financial guidance for the second quarter of fiscal 2026 and fiscal 2026 full year ending June 30, 2026; our focus; demand for our products and market opportunity; our sales pipeline; exp ...

Revenue Performance - SaaS revenue for the three months ended September 30, 2025, was $21.9 million, representing a 10% increase from $19.82 million in the same period of 2024[124]. - Total revenue for the same period was $23.51 million, an 8% increase from $21.8 million year-over-year[124]. - Total revenue for the three months ended September 30, 2025, was $23.5 million, an increase of $1.7 million or 8% compared to $21.8 million in the same period of 2024[147]. - SaaS revenue accounted for 93% of total revenue, increasing by $2.1 million or 10% to $21.9 million, while professional services revenue decreased by $371,000 or 19% to $1.6 million[149][151]. Profitability and Expenses - Non-GAAP income from operations for the three months ended September 30, 2025, was $4.71 million, compared to $1.14 million in 2024[128]. - Gross profit margin improved to 75% for the three months ended September 30, 2025, compared to 69% in the same period of 2024, driven by a reduction in total cost of revenue[146][156]. - Operating income increased significantly to $2.8 million with an operating margin of 12%, up from $509,000 and 2% in the prior year[171]. - Research and development expenses decreased by $106,000 to $7.3 million, representing 31% of total revenue, down from 34% in the previous year[162]. - Sales and marketing expenses decreased by $731,000 to $4.0 million, accounting for 17% of total revenue, down from 22% in the prior year[165]. - General and administrative expenses increased by $1.1 million to $3.5 million, representing 15% of total revenue, up from 11% in the previous year[168]. Cash Flow and Investments - Net cash provided by operating activities rose by $9.5 million to $10,432,000 for the three months ended September 30, 2025, compared to $954,000 in 2024[179][180]. - Net cash used in investing activities increased by $115,000 to $224,000 for the three months ended September 30, 2025, primarily for equipment purchases[182]. - Net cash used in financing activities decreased by $3.2 million to $1.5 million for the three months ended September 30, 2025, compared to $4.6 million in 2024[183]. - Cash and cash equivalents, along with restricted cash, totaled $70.9 million as of September 30, 2025, down from $62.9 million as of June 30, 2025[177]. Market and Operational Insights - The company believes that contact centers offer significant opportunities for automation using AI technology[115]. - The company operates in the U.S., U.K., and India, indicating a diverse geographical presence[121]. - The company expects SaaS revenue to continue increasing, reflecting positive market opportunities[115]. Risks and Liabilities - The company faces risks related to cybersecurity, including potential breaches that could impact customer trust and financial exposure[125]. - The company relies on a relatively small number of customers for a substantial portion of its revenue, which poses a risk if significant customers are lost[119]. - Future non-cancelable minimum payments under lease commitments were approximately $4.3 million as of September 30, 2025[184]. - Identifiable assets denominated in foreign currency totaled approximately $27.5 million as of September 30, 2025, with a potential $2.7 million decrease in value from a 10% increase in the dollar[188]. - The company does not currently hedge against foreign exchange risk, exposing it to market fluctuations[188]. Other Financial Metrics - Interest income decreased to $462,000 from $771,000 due to lower interest rates and reduced funding in money market accounts[174]. - Other income increased to $455,000 compared to an expense of $140,000 in the prior year, primarily due to foreign exchange rate fluctuations[175]. - Income tax provision increased to $930,000 for the three months ended September 30, 2025, compared to $488,000 for the same period in 2024[176]. - The company has not experienced a loss of principal on investments, which are primarily in short-term, low-risk, investment-grade debt instruments[190]. - The company expects that changes in market interest rates would not materially impact the fair value of its securities or cash flows[190].

Financial Performance - Total revenue for Q1 2026 was $23.5 million, representing an 8% year-over-year increase[4] - GAAP net income was $2.8 million, or $0.10 per share, compared to $652,000, or $0.02 per share, in Q1 2025[4] - Non-GAAP net income was $4.7 million, or $0.17 per share, compared to $1.3 million, or $0.04 per share, in Q1 2025[4] - Adjusted EBITDA was $5.0 million, with a margin of 21%, compared to $1.4 million, with a margin of 6%, in Q1 2025[4] - Cash provided by operations was $10.4 million, reflecting an operating cash flow margin of 44%[4] - Total cash and cash equivalents increased to $70.9 million from $67.2 million in Q1 2025[4] - Non-GAAP income from operations for Q3 2025 reached $4,706,000, a significant increase from $1,141,000 in Q3 2024, representing a growth of 312%[16] - Total GAAP revenue for Q3 2025 was $23,508,000, up 8% from $21,799,000 in Q3 2024[18] - Non-GAAP gross profit increased by 16% to $17,772,000 in Q3 2025, compared to $15,363,000 in Q3 2024[18] - Adjusted EBITDA for Q3 2025 was $5,017,000, a substantial rise from $1,357,000 in Q3 2024[16] - Non-GAAP net income for Q3 2025 was $4,693,000, compared to $1,284,000 in Q3 2024, marking a growth of 267%[16] - Basic non-GAAP earnings per share for Q3 2025 was $0.17, compared to $0.04 in Q3 2024, indicating a 325% increase[16] Revenue Projections - eGain expects total revenue for Q2 2026 to be between $22.3 million and $22.8 million[4] - For the full fiscal year 2026, eGain anticipates total revenue between $90.5 million and $92.0 million[4] Product Development - The company unveiled three new AI products at the Solve25 event, indicating strong customer interest in its expanded AI knowledge solutions[2] Operating Expenses - Non-GAAP operating expenses decreased by 8% to $13,066,000 in Q3 2025, down from $14,222,000 in Q3 2024[18] - GAAP professional services revenue decreased by 19% to $1,608,000 in Q3 2025, down from $1,979,000 in Q3 2024[18] SaaS Revenue - AI Knowledge Hub Annual Recurring Revenue (ARR) grew 23% year-over-year to $45.9 million, contributing 60% of total SaaS ARR[4] - GAAP SaaS revenue for Q3 2025 was $21,900,000, reflecting a 10% increase from $19,820,000 in Q3 2024[18] Stock and Income Contributions - The issuance of common stock warrants for services contributed $1,350,000 to both net income and operating income in Q3 2025[16]