eGain Corporation (NASDAQ:EGAN) Q2 2023 Earnings Conference Call February 14, 2023 5:00 PM ET Company Participants Jim Byers - MKR Investor Relations Ashu Roy - Chief Executive Officer Eric Smit - Chief Financial Officer Conference Call Participants Richard Baldry - ROTH Capital Jeff Van Rhee - Craig Hallum Operator Good day, and welcome to the eGain Fiscal 2023 Second Quarter Financial Results Call. All participants will be in listen-only mode. [Operator Instructions] After today's presentation, there will ...

[PART I. FINANCIAL INFORMATION](index=4&type=section&id=PART%20I.%20FINANCIAL%20INFORMATION) [Financial Statements (Unaudited)](index=4&type=section&id=Item%201.%20Financial%20Statements%20(Unaudited)) The unaudited condensed consolidated financial statements detail financial positions for the periods ended December 31, 2022, and 2021 Key Financial Highlights (Six Months Ended Dec 31, 2022 vs 2021) | Metric | Six Months Ended Dec 31, 2022 | Six Months Ended Dec 31, 2021 | | :--- | :--- | :--- | | **Total Revenue** | $50.4 million | $44.5 million | | **Gross Profit** | $37.3 million | $33.1 million | | **Income (Loss) from Operations** | ($0.46 million) | $0.06 million | | **Net Loss** | ($0.12 million) | ($0.28 million) | | **Net Cash from Operations** | $8.2 million | $4.7 million | - As of December 31, 2022, the company held **$80.9 million in cash and cash equivalents**, an increase from $72.2 million at June 30, 2022[11](index=11&type=chunk) - On November 14, 2022, the Board of Directors authorized a **stock repurchase program of up to $20 million**, with no shares repurchased as of December 31, 2022[115](index=115&type=chunk)[117](index=117&type=chunk) [Condensed Consolidated Balance Sheets](index=4&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) The balance sheet shows total assets of $122.7 million and total stockholders' equity of $61.4 million as of December 31, 2022 Condensed Consolidated Balance Sheet Data (in thousands) | Account | Dec 31, 2022 | June 30, 2022 | | :--- | :--- | :--- | | **Total Current Assets** | $101,511 | $104,135 | | **Total Assets** | $122,675 | $126,009 | | **Total Current Liabilities** | $55,501 | $62,022 | | **Total Liabilities** | $61,304 | $69,152 | | **Total Stockholders' Equity** | $61,371 | $56,857 | [Condensed Consolidated Statements of Operations](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) Revenue grew 13% to $50.4 million for the six-month period, significantly narrowing the net loss from the prior year Statement of Operations Summary (in thousands, except per share data) | Metric | Q2 FY2023 (3 mo) | Q2 FY2022 (3 mo) | H1 FY2023 (6 mo) | H1 FY2022 (6 mo) | | :--- | :--- | :--- | :--- | :--- | | **Total Revenue** | $25,600 | $23,093 | $50,363 | $44,543 | | **Gross Profit** | $18,848 | $16,992 | $37,329 | $33,143 | | **Income (Loss) from Operations** | $213 | ($630) | ($457) | $60 | | **Net Loss** | ($104) | ($826) | ($120) | ($275) | | **Basic & Diluted Loss per Share** | ($0.00) | ($0.03) | ($0.00) | ($0.01) | [Condensed Consolidated Statements of Cash Flows](index=12&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Net cash from operating activities increased to $8.2 million for the six-month period, driven by working capital changes Cash Flow Summary (Six Months Ended Dec 31, in thousands) | Cash Flow Activity | 2022 | 2021 | | :--- | :--- | :--- | | **Net cash provided by operating activities** | $8,175 | $4,681 | | **Net cash used in investing activities** | ($293) | ($276) | | **Net cash provided by financing activities** | $1,005 | $1,088 | | **Net increase in cash** | $8,694 | $5,250 | [Notes to Condensed Consolidated Financial Statements](index=13&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) Notes highlight the successful SaaS transition, with SaaS revenue growing 16% and significant remaining performance obligations Disaggregation of Revenue (Six Months Ended Dec 31, in thousands) | Revenue Type | 2022 | 2021 | | :--- | :--- | :--- | | SaaS revenue | $46,057 | $39,645 | | Legacy revenue | $480 | $1,806 | | **Total subscription revenue** | **$46,537** | **$41,451** | | Professional services revenue | $3,826 | $3,092 | | **Total revenue** | **$50,363** | **$44,543** | - As of December 31, 2022, **remaining performance obligations were $92.1 million**, of which $56.5 million is expected to be recognized as revenue within one year[90](index=90&type=chunk) - For the three months ended December 31, 2022, **two customers accounted for 19% and 10% of total revenue**, respectively, with one being a partner[59](index=59&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=37&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management's analysis highlights a successful SaaS transition, revenue growth, and a strong liquidity position despite increased operating expenses - The company has transitioned to a **SaaS-only business model for new clients** and is actively migrating legacy perpetual license clients to SaaS, expecting legacy revenue to continue its decline[130](index=130&type=chunk) SaaS and Legacy Revenue Growth (Six Months Ended Dec 31) | Revenue Type | 2022 (in thousands) | 2021 (in thousands) | Change (%) | | :--- | :--- | :--- | :--- | | SaaS revenue | $46,057 | $39,645 | 16% | | Legacy revenue | $480 | $1,806 | (73)% | - As of December 31, 2022, **remaining performance obligations were $92.1 million**, with $56.5 million expected to be recognized as revenue within one year[150](index=150&type=chunk) - The company believes its existing capital resources, including **$80.9 million in cash and cash equivalents**, are sufficient to maintain operations for at least the next 12 months[202](index=202&type=chunk)[203](index=203&type=chunk) [Results of Operations](index=51&type=section&id=Results%20of%20Operations) Revenue increased 13% driven by SaaS growth, though higher operating expenses led to a small operating loss for the six-month period Revenue by Geography (Six Months Ended Dec 31, in thousands) | Region | 2022 | 2021 | Change (%) | | :--- | :--- | :--- | :--- | | North America | $38,922 | $31,992 | 22% | | Europe, Middle East, & Africa | $11,441 | $12,551 | (9)% | - Cost of subscription revenue increased by 20% for the six months ended Dec 31, 2022, primarily due to a **$1.4 million increase in cloud-computing costs**[174](index=174&type=chunk)[177](index=177&type=chunk) - For the six months ended Dec 31, 2022, **R&D expenses increased 19% to $14.1 million** and **Sales & Marketing expenses increased 18% to $18.4 million** compared to the prior year period[185](index=185&type=chunk)[189](index=189&type=chunk) [Liquidity and Capital Resources](index=62&type=section&id=Liquidity%20and%20Capital%20Resources) The company maintains strong liquidity with $80.9 million in cash and cash equivalents, with operating cash flow improving year-over-year - As of December 31, 2022, principal sources of liquidity were **cash and cash equivalents of $80.9 million** and accounts receivable of $16.5 million[202](index=202&type=chunk)[11](index=11&type=chunk) - **Net cash from operating activities increased to $8.2 million** for the six months ended Dec 31, 2022, compared to $4.7 million in the prior year, driven by timing of payments for accounts payable and accrued liabilities[204](index=204&type=chunk)[205](index=205&type=chunk) [Quantitative and Qualitative Disclosures about Market Risk](index=65&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) The company's primary market risks involve foreign currency exchange and interest rates, with no current use of hedging instruments - The company is exposed to foreign currency risk, with **identifiable assets denominated in foreign currency totaling approximately $19.1 million** as of December 31, 2022[213](index=213&type=chunk) - A hypothetical **10% increase in the value of the U.S. dollar** relative to other currencies would decrease the value of these foreign assets by $1.9 million[213](index=213&type=chunk) - Interest rate risk is related to cash and cash equivalents, and management believes a **10% change in interest rates would not have a material impact** on fair value or income[215](index=215&type=chunk) [Controls and Procedures](index=65&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were effective as of December 31, 2022, with no material internal control changes - The CEO and CFO concluded that as of December 31, 2022, the company's **disclosure controls and procedures were effective** at the reasonable assurance level[217](index=217&type=chunk) - There were **no material changes** to the company's internal control over financial reporting during the last fiscal quarter[219](index=219&type=chunk) [PART II. OTHER INFORMATION](index=68&type=section&id=PART%20II.%20OTHER%20INFORMATION) [Legal Proceedings](index=68&type=section&id=Item%201.%20Legal%20Proceedings) The company is not party to any material legal proceedings but is involved in routine matters in the ordinary course of business - The company is **not currently a party to any material legal proceedings**[221](index=221&type=chunk) - In the ordinary course of business, the company is involved in various legal proceedings and claims, including those related to alleged infringement of third-party intellectual property rights[221](index=221&type=chunk) [Risk Factors](index=68&type=section&id=Item%201A.%20Risk%20Factors) Significant risks include intense competition, customer concentration, international operations, cybersecurity threats, and substantial CEO stock ownership - The company faces **intense competition** from larger software companies like Microsoft, Oracle, and Salesforce, and depends on a relatively small number of customers for a substantial portion of its revenue[236](index=236&type=chunk)[237](index=237&type=chunk) - The company conducts a significant portion of its business internationally, with **23% of revenue from EMEA** in Q2 FY23 and **43% of its workforce in India** as of Dec 31, 2022, exposing it to geopolitical and currency risks[247](index=247&type=chunk)[249](index=249&type=chunk) - **Cybersecurity breaches and evolving data privacy regulations**, such as GDPR and CCPA, pose significant risks of noncompliance, financial penalties, and reputational damage[284](index=284&type=chunk)[293](index=293&type=chunk)[299](index=299&type=chunk) - As of December 31, 2022, the CEO, Ashutosh Roy, beneficially owned approximately **27% of the company's outstanding capital stock**, giving him significant control over matters requiring stockholder approval[323](index=323&type=chunk) [Exhibits](index=100&type=section&id=Item%206.%20Exhibits) Filed exhibits include required CEO/CFO certifications under Sarbanes-Oxley and Interactive Data Files (XBRL) - The exhibits filed include Rule 13a-15(e)/15d-15(e) certifications from the CEO and CFO, Section 1350 certifications, and Inline XBRL data files[325](index=325&type=chunk)

Financial Data and Key Metrics Changes - Total revenue for Q1 2023 was a record $24.8 million, up 20% year-over-year in constant currency [7][20] - SaaS revenue grew 23% year-over-year in constant currency, reaching $22.6 million [7][20] - Non-GAAP operating income was $1.4 million, with an operating margin of 6%, compared to 13% in the prior year [23] - Non-GAAP net income for Q1 was $2 million, or $0.06 per share, down from $2.7 million or $0.08 per share in the year-ago quarter [23] - Cash flow from operations was $760,000, with a 3% operating cash flow margin [24] Business Line Data and Key Metrics Changes - Legacy revenue decreased to $295,000, now accounting for less than 2% of total revenue [20] - The knowledge hub now constitutes 50% of total SaaS ARR, with knowledge deals accounting for two-thirds of new bookings in the last 12 months [26] Market Data and Key Metrics Changes - North America accounted for 77% of total revenue, up from 71% in the year-ago quarter, with revenue from North America increasing by 26% year-over-year [20] - Total revenue from Europe was $5.7 million, a decrease of 9% year-over-year [20] - The LTM dollar-based net retention rate was 103%, down from 113% a year ago, with U.S. retention closer to 110 and European retention dropping below 100 [25] Company Strategy and Development Direction - The company plans to take a more balanced approach to growth and profitability, pausing the hiring of new sales reps to focus on current rep productivity [16][17] - The company remains optimistic about the market opportunity in knowledge management and AI-powered automation [17][18] - A $20 million stock repurchase program was announced, indicating confidence in the current stock price and a strong balance sheet [27][28] Management's Comments on Operating Environment and Future Outlook - Management noted that decision-making timelines are extending due to economic uncertainty, particularly in Europe [15][19] - There is a healthy pipeline with new inbound interest, but caution is advised due to the current economic environment [15][18] - The company expects total revenue for Q2 2023 to be between $25 million to $25.4 million, representing growth of 8% to 10% year-over-year [29] Other Important Information - The company received accolades for its eGain knowledge hub, including a perfect score from Gartner and the 2022 Readers' Choice Award from KMWorld [14] - The eGain marketplace was announced, showcasing value-added solutions built by the company and partners [13] Q&A Session Summary Question: Changes to the sales funnel and slower sales cycles - Management indicated that the primary issue is the delaying of decision-making rather than a decrease in interest levels [37] Question: Legacy maintenance revenue sunset - Management stated that there are no significant cost impacts from the remaining legacy revenue, which is minimal [38] Question: Decision to slow down hiring - Management explained that they want to see stabilization in decision cycles before resuming hiring [40] Question: EMEA NRR and customer behavior - Management noted that larger customers in Europe are reducing spend, impacting NRR significantly [43] Question: Lengthening sales cycles - Management observed that budgets expected in fiscal calendar '22 have been pushed to calendar '23, contributing to longer decision cycles [47] Question: Channel-related sales momentum - Both direct and channel sales efforts are experiencing similar changes, with potential for channel sales to be beneficial in the future [48] Question: Customer trading down to lower quality services - Management confirmed that some customers are opting for lower-priced solutions, which may not meet their needs [50] Question: Overall industry impact - Management believes that the macroeconomic effects are more pronounced in Europe, with potential impacts on contact centers [53]

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Form 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2022 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File No. 001-35314 eGain Corporation (Exact name of registrant as specified in its charter) Delaware 77-0466366 (State or ...

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-K (Mark One) ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Fiscal Year Ended June 30, 2022 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File Number: 001-35314 eGain Corporation (Exact name of registrant as specified in its charter) Delaware 77-0466366 (State or other jur ...

eGain Corporation (NASDAQ:EGAN) Q4 2022 Earnings Conference Call September 7, 2022 5:00 PM ET Company Participants Jim Byers - MKR Investor Relations Ashu Roy - Co-Founder, Executive Chairman, CEO and President Eric Smit - CFO Conference Call Participants Richard Baldry - ROTH Capital Partners Jeff Van Rhee - Craig-Hallum Capital Group Tim Horan - Oppenheimer Operator Hello, and welcome to the eGain 2022 Fourth Quarter and Full Year Financial Results Conference Call. All participants will be in a listen- ...

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Form 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2022 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File No. 001-35314 eGain Corporation (Exact name of registrant as specified in its charter) Delaware 77-0466366 (State or othe ...

eGain Corporation (NASDAQ:EGAN) Q3 2022 Earnings Conference Call May 5, 2022 5:00 PM ET Company Participants Jim Byers – MKR, Investor Relations Ashu Roy – Chief Executive Officer Eric Smit – Chief Financial Officer Conference Call Participants Richard Baldry – ROTH Capital Jeff Van Rhee – Craig-Hallum Operator Good day and welcome to the eGain Fiscal 2022 Third Quarter Financial Results Conference Call. Today's conference is being recorded. At this time, I would like to turn the conference over to Jim Byer ...

Revenue Performance - SaaS revenue for the three months ended December 31, 2021, was $20,451,000, representing a 26% increase from $16,177,000 for the same period in 2020[151] - Total subscription revenue for the six months ended December 31, 2021, was $41,451,000, a 17% increase from $35,447,000 for the same period in 2020[151] - Total SaaS and professional services revenue for the three months ended December 31, 2021, was $22,238,000, a 26% increase from $17,711,000 for the same period in 2020[152] - Total revenue for the three months ended December 31, 2021, was $23.1 million, a 20% increase from $19.2 million in the same period in 2020[176] - Subscription revenue increased by $3.6 million (20%) to $21.3 million for the three months ended December 31, 2021, compared to $17.7 million in the same period in 2020[176] - SaaS revenue represented 88% of total revenue for the three months ended December 31, 2021, up from 84% in the same period in 2020, with a 26% increase year-over-year[182] - Total revenue increased by $3.9 million (20%) for the three months ended December 31, 2021, and by $6.2 million (16%) for the six months ended December 31, 2021, compared to the same periods in 2020[189] - North America sales revenue increased by 27% to $16.8 million for the three months ended December 31, 2021, and by 19% to $32.0 million for the six months ended December 31, 2021, compared to the same periods in 2020[190] Legacy Revenue - Legacy revenue for the three months ended December 31, 2021, decreased by 44% to $855,000 from $1,522,000 in the same period in 2020[151] - The company anticipates that legacy revenue will continue to decline as it migrates remaining perpetual license clients to SaaS[151] - Legacy revenue decreased by $667,000 (44%) to $855,000 for the three months ended December 31, 2021, compared to $1.5 million in the same period in 2020[184] - Legacy revenue decreased by $661,000 and $1.5 million during the three and six months ended December 31, 2021, respectively, compared to the same periods in 2020[185] Expenses and Costs - Total cost of revenue for the three months ended December 31, 2021, was 26% of total revenue, compared to 24% in the same period in 2020[174] - Research and development expenses were 27% of total revenue for the three months ended December 31, 2021, compared to 23% in the same period in 2020[174] - Operating expenses increased to 76% of total revenue for the three months ended December 31, 2021, from 66% in the same period in 2020[174] - Research and development expenses increased by 37% to $6.2 million for the three months ended December 31, 2021, and by 31% to $11.8 million for the six months ended December 31, 2021, compared to the same periods in 2020[204] - Sales and marketing expenses increased by 30% to $8.2 million for the three months ended December 31, 2021, and by 31% to $15.6 million for the six months ended December 31, 2021, compared to the same periods in 2020[209] - General and administrative expenses increased by 77% to $3.3 million for the three months ended December 31, 2021, and by 51% to $5.7 million for the six months ended December 31, 2021, compared to the same periods in 2020[214] - The company expects subscription revenue gross margins to improve despite an increase in absolute dollar terms for subscription revenue costs[198] - The company anticipates an increase in sales and marketing expenses as a percentage of total revenue in future quarters based on the current business plan[213] - General and administrative expenses increased by 77% to $3.3 million for the three months ended December 31, 2021, compared to $1.9 million in the same period in fiscal year 2020[216] Operational Performance - Non-GAAP income from operations for the three months ended December 31, 2021, was $3.2 million, compared to $2.3 million in the same period in 2020[156] - Loss from operations was $630,000 with an operating loss margin of 2% during the three months ended December 31, 2021, which included $3.8 million of stock-based compensation[219] - Income from operations was $60 million with a break-even margin of 0% during the six months ended December 31, 2021, including $5.9 million of stock-based compensation[220] Cash and Assets - Net cash provided by operating activities decreased by $1.3 million during the six months ended December 31, 2021, compared to the same period in 2020[230] - As of December 31, 2021, cash, cash equivalents, and restricted cash totaled $68.5 million, compared to $63.2 million as of June 30, 2021[225] - Identifiable assets denominated in foreign currency as of December 31, 2021, totaled approximately $20.9 million, with a potential decrease of $2.1 million if the dollar increases by 10% against other currencies[237] Other Considerations - The transition to a SaaS-only business model is expected to provide recurring revenue visibility and more predictability for the company[141] - The impact of COVID-19 has not had a material adverse effect on the company's business operations[145] - The company operates in the US, UK, and India, primarily serving large enterprises across various sectors[140] - The provision for income taxes was $46,000 and $198,000 for the three and six months ended December 31, 2021, respectively[224] - Future non-cancelable minimum payments under lease commitments were approximately $4.7 million as of December 31, 2021[233] - Other expense, net was $29,000 during the three months ended December 31, 2021, compared to $160,000 in the same period in 2020[223] - Foreign exchange rate fluctuations contributed an increase of $121,000 to total revenue during the three months ended December 31, 2021[178] - Remaining performance obligations as of December 31, 2021, were $89.8 million, with $58.7 million expected to be recognized as revenue within one year[167]

eGain Corporation (NASDAQ:EGAN) Q2 2022 Earnings Conference Call February 3, 2022 5:00 PM ET Company Participants Ashu Roy – Chief Executive Officer Eric Smit – Chief Financial Officer Jim Byers – MKR, Investor Relations Conference Call Participants Richard Baldry – Roth Capital Tim Horan – Oppenheimer Aaron Spychalla – Craig-Hallum Capital Group Operator Good day and welcome to the eGain Fiscal 2022 Second Quarter Financial Results Conference Call. Today's conference is being recorded. At this time, I woul ...