Market Potential - The company reported a significant total addressable market (TAM) for supply chain management (SCM) software in North America and Europe, indicating substantial growth potential[20] - The company operates in a complex supply chain management (SCM) industry with a total addressable market (TAM) that includes significant whitespace within its current client base, indicating strong growth potential[20] Product and Technology - The SaaS platform integrates advanced algorithms with artificial intelligence (AI) to enhance decision-making across supply chain functions, organized into five product families: Channel, Planning, Global Trade, Logistics, and Supply[28] - The software architecture allows for seamless integration of acquisitions and new product applications into a consolidated SaaS solution, enhancing scalability[35] - The SaaS platform offers end-to-end supply chain visibility and is designed to help clients improve efficiency, reduce waste, and operate sustainably, leveraging advanced algorithms and artificial intelligence[21][28] Client Relationships and Growth Strategy - The company aims to expand within existing clients, leveraging cross-selling opportunities due to substantial whitespace within the current client base[40] - The company’s focus on client satisfaction and long-term relationships with a diversified Fortune 1000 client base is central to its growth strategy[37][39] - The client base includes diversified Fortune 1000 companies across various industries, highlighting the software's critical role in managing complex supply chain needs[37] Strategic Partnerships and Acquisitions - The company is focusing on winning new clients through strategic partnerships with system integrators to enhance market reach and identify clients with supply chain software needs[42] - The company evaluates strategic acquisition opportunities to broaden product offerings and expand technology capabilities, focusing on mission-critical solutions and complementary cloud applications[43] Operational and Financial Management - The company aims to maintain a strong operational and financial resource base to support growth and navigate market uncertainties[18] - The company conducts regular enterprise risk assessments to evaluate risks and determine necessary oversight, involving the board of directors and relevant committees[47] - The company operates under an umbrella partnership C corporation structure, allowing equity ownership retention while providing voting rights through Class V common stock[46] Employee Engagement and Culture - The company promotes a culture of diversity and inclusion, reinforced through annual training programs[49] - The company offers a competitive Total Rewards and Health Benefits Program, including unlimited paid time off and retirement plan matching[54] - The company maintains regular communication with employees through All Hands meetings and utilizes internal tools for engagement and feedback[57] - The company utilizes employee feedback from global surveys to improve the employee experience[57] - E2WIN aims to increase the attraction, retention, and promotion of women at the company through various initiatives[53] - E2unite is an employee resource group designed to connect remote employees and enhance their sense of well-being[56] Innovation and Development - The company fosters innovation through an annual contest aimed at developing cost-saving and cutting-edge solutions[55] - The annual e2opennovation contest encourages innovation that aligns with the company's three-year strategic goals[55] Transparency and Reporting - Electronic copies of SEC filings are available on the company's website for investor transparency[59] - The company operates in one reportable segment consisting of cloud-based, end-to-end SCM software and related professional services[58]

Revenue Performance - Q4 FY25 GAAP subscription revenue was $133.0 million, a decrease of 1.0% year-over-year, representing 87.0% of total revenue[3] - Total GAAP revenue for Q4 FY25 was $152.7 million, down 3.6% from the previous year[3] - For fiscal year 2025, GAAP subscription revenue was $528.0 million, a decrease of 1.6% from the prior year[6] - Total GAAP revenue for fiscal year 2025 was $607.7 million, down 4.2% from the previous fiscal year[6] - Total revenue for the fiscal year ended February 28, 2025, was $607,688,000, a decrease of 4.3% from $634,554,000 in the previous year[23] - Subscription revenue decreased to $527,958,000 from $536,792,000, reflecting a decline of 1.5% year-over-year[23] - Total GAAP Revenue for Q4 FY2025 was $152.7 million, a decrease of $5.8 million or 3.6% compared to Q4 FY2024[31] - GAAP Subscription Revenue decreased by $1.4 million or 1.0% year-over-year, totaling $133.0 million in Q4 FY2025[31] Profitability and Loss - GAAP net loss for Q4 FY25 was $268.5 million, compared to a net loss of $45.5 million in the same period last year[6] - Net loss attributable to E2open Parent Holdings, Inc. was $659,830,000, compared to a net loss of $1,070,024,000 in the prior year, indicating an improvement of 38.3%[23] - The company reported a net loss of $268.5 million in Q4 FY2025, compared to a loss of $45.5 million in Q4 FY2024[31] - For the fiscal fourth quarter of 2025, the GAAP net loss was $268.5 million, contributing to a total net loss of $725.8 million for the fiscal year[44] Adjusted Metrics - Adjusted EBITDA for Q4 FY25 was $56.3 million, an increase of 2.3% year-over-year, with an adjusted EBITDA margin of 36.9%[6] - The adjusted EBITDA for Q4 2025 was $56.3 million, with a total adjusted EBITDA of $215.5 million for FY2025[44] - The adjusted net income for Q4 2025 was $20.2 million, leading to an adjusted net income of $66.2 million for the entire fiscal year[44] - The adjusted earnings per share for Q4 2025 was $0.06, with a total of $0.19 for FY2025[44] - The adjusted free cash flow for Q4 2025 was $50.0 million, resulting in a total adjusted free cash flow of $86.2 million for FY2025[46] Expenses and Cash Flow - Total operating expenses for the fiscal year were $952,059,000, down from $1,511,299,000, a reduction of 37%[23] - Total operating expenses for FY2025 were $952.1 million, with a significant portion attributed to goodwill impairment[39] - The total operating expenses for Q4 2025 amounted to $322.3 million, with a significant goodwill impairment charge of $245 million[44] - The company reported a net cash provided by operating activities of $99,137,000, compared to $84,871,000 in the previous year, an increase of 16.8%[29] - The company reported a GAAP operating cash flow of $53.0 million for Q4 2025, contributing to a total of $99.1 million for FY2025[46] Goodwill and Assets - Goodwill decreased significantly to $1,213,794,000 from $1,843,477,000, a decline of 34.2%[27] - Goodwill impairment charge for Q4 FY2025 was $245.0 million, significantly impacting net income[36] Future Projections - The company expects GAAP subscription revenue for fiscal 2026 to be in the range of $525 million to $535 million, reflecting a 0.4% growth rate at the mid-point[7] - Total GAAP revenue for fiscal 2026 is projected to be between $600 million and $618 million, indicating a positive 0.2% growth rate at the mid-point[8] - Non-GAAP gross profit margin for fiscal 2026 is expected to be in the range of 68% to 68.5%[10] Operational Metrics - E2open expanded its multi-enterprise network to 500,000 connected enterprises and 18 billion annual supply chain transactions, up from 480,000 and 16 billion in FY24[12] - The company reported a gross profit of $299,684,000, down from $317,691,000, a decrease of 5.7%[23] - The gross profit for Q4 2025 was $76.6 million, representing a gross margin of 68.2%[42] - The total cost of revenue for Q4 2025 was $76.0 million, with subscription costs accounting for 25.0% of revenue[42] - Research and development expenses for Q4 2025 were $23.9 million, representing 11.8% of revenue[42] - Non-GAAP gross profit for Q4 FY2025 was $104.2 million, down $6.7 million or 6.1% from Q4 FY2024[31] - The weighted-average common shares outstanding increased to 308,268,000 from 303,751,000, reflecting a growth of 1.7%[23]

Core Viewpoint - The market anticipates E2open Parent Holdings, Inc. (ETWO) to report flat earnings of $0.05 per share for the quarter ended February 2025, with revenues expected to decline by 4.4% to $151.44 million compared to the previous year [1][3]. Earnings Expectations - The upcoming earnings report is scheduled for April 29, and the stock price may increase if actual results exceed expectations, while a miss could lead to a decline [2]. - The consensus EPS estimate has been revised down by 20% over the last 30 days, indicating a reassessment by analysts [4]. Earnings Surprise Prediction - The Zacks Earnings ESP model indicates that the Most Accurate Estimate matches the Zacks Consensus Estimate, resulting in an Earnings ESP of 0%, which complicates predictions of an earnings beat [10][11]. - The stock currently holds a Zacks Rank of 3, suggesting a neutral outlook [11]. Historical Performance - In the last reported quarter, E2open was expected to post earnings of $0.06 per share but delivered only $0.05, resulting in a surprise of -16.67% [12]. - Over the past four quarters, the company has only beaten consensus EPS estimates once [13]. Conclusion - E2open does not appear to be a strong candidate for an earnings beat, and investors should consider additional factors before making investment decisions [16].

Company Overview - E2open Parent Holdings, Inc. (NYSE: ETWO) is a significant player in the cloud-based supply chain management software sector, known for its extensive acquisitions since 2000 [1] - The company has strategically acquired other firms to enhance its market position, with notable acquisitions contributing to its growth [1] Investment Focus - The mission of Grassroots Trading emphasizes providing objective and balanced research, focusing on small- to mid-cap companies while also identifying opportunities in larger firms [1]

Group 1 - The core viewpoint is that E2open Parent Holdings (NYSE: ETWO) is recommended as a buy due to a belief that the temporary setback in 2Q25 does not reflect the underlying positive demand [1] - The ideal investment is characterized by core business performance in a sector expected to experience structural growth exceeding GDP growth over the next 5-10 years [1] - Profits should stem from sustainable competitive advantages that lead to attractive unit economics, managed by competent and ethical long-term thinkers, and offered at a fair valuation [1]

Financial Data and Key Metrics - No specific financial data or key metrics changes mentioned in the provided content [1][2][3] Business Line Data and Key Metrics - No specific business line data or key metrics changes mentioned in the provided content [1][2][3] Market Data and Key Metrics - No specific market data or key metrics changes mentioned in the provided content [1][2][3] Company Strategy and Industry Competition - No specific company strategy or industry competition details mentioned in the provided content [1][2][3] Management Commentary on Operating Environment and Future Outlook - The company will be making forward-looking statements regarding future events and financial performance, including guidance for the fiscal fourth quarter and full year 2025 [2] - These forward-looking statements are subject to known and unknown risks and uncertainties, and the company cautions that these statements are not guarantees of future performance [2] Other Important Information - A replay and transcript of the call will be available on the company's investor relations website at investors.e2open.com [1] - Information to access the replay is listed in the press release available on the investor relations website [1] Q&A Session Summary - No Q&A session details provided in the content [1][2][3]

Core Insights - E2open Parent Holdings, Inc. (ETWO) reported quarterly earnings of $0.05 per share, missing the Zacks Consensus Estimate of $0.06 per share, representing an earnings surprise of -16.67% [1] - The company posted revenues of $151.66 million for the quarter ended November 2024, surpassing the Zacks Consensus Estimate by 1.04%, but down from $157.5 million year-over-year [2] - E2open shares have increased by approximately 1.9% since the beginning of the year, outperforming the S&P 500's gain of 0.6% [3] Earnings Outlook - The current consensus EPS estimate for the upcoming quarter is $0.06 on revenues of $153.54 million, and for the current fiscal year, it is $0.19 on revenues of $606.98 million [7] - The estimate revisions trend for E2open is mixed, resulting in a Zacks Rank 3 (Hold), indicating expected performance in line with the market in the near future [6] Industry Context - The Internet - Software industry, to which E2open belongs, is currently in the top 12% of over 250 Zacks industries, suggesting a favorable outlook compared to lower-ranked industries [8] - Empirical research indicates a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can be tracked by investors [5]

Revenue Performance - Total revenue for the three months ended November 30, 2024, was $151.7 million, a decrease of $5.8 million, or 4%, compared to $157.5 million for the same period in 2023[162]. - Subscriptions revenue was $132.0 million for the three months ended November 30, 2024, a decrease of $0.8 million, or 1%, compared to $132.8 million for the same period in 2023[162]. - Professional services and other revenue decreased by $5.0 million, or 20%, to $19.7 million for the three months ended November 30, 2024, compared to $24.7 million for the same period in 2023[163]. - Subscriptions revenue for the nine months ended November 30, 2024, was $395.0 million, a decrease of $7.5 million, or 2%, compared to $402.4 million in the prior year[182]. - Professional services and other revenue decreased by $13.6 million, or 18%, to $60.1 million for the nine months ended November 30, 2024, from $73.7 million in the prior year[183]. - Total revenue for the nine months ended November 30, 2024, was $455.0 million, a decrease of $21.1 million, or 4%, compared to $476.1 million in the prior year[182]. Profitability and Expenses - Gross profit for the three months ended November 30, 2024, was $75.7 million, a decrease of $2.8 million, or 4%, compared to $78.6 million for the same period in 2023[161]. - Gross profit for the nine months ended November 30, 2024, was $223.0 million, a decrease of $14.1 million, or 6%, compared to $237.2 million in the prior year[186]. - Research and development expenses were $23.3 million for the three months ended November 30, 2024, a decrease of $1.7 million, or 7%, compared to $24.9 million for the same period in 2023[168]. - Sales and marketing expenses were $21.5 million for the three months ended November 30, 2024, a decrease of $1.1 million, or 5%, compared to $22.6 million in the prior year[169]. - General and administrative expenses decreased by $3.9 million, or 16%, to $20.8 million for the three months ended November 30, 2024, compared to $24.7 million in the prior year[170]. - General and administrative expenses were $65.8 million, a decrease of $19.7 million, or 23%, compared to $85.4 million in the prior year, primarily due to a $17.8 million accrual related to an unfavorable arbitration ruling[192]. Impairment Charges - The company recognized an impairment charge of $369.1 million to goodwill during the three and nine months ended November 30, 2024[158]. - Goodwill impairment charge was $369.1 million for the three months ended November 30, 2024, a decrease of $318.6 million, or 46%, compared to $687.7 million in the prior year[173]. - Intangible asset impairment charge was $10.0 million for the three months ended November 30, 2024, down from $30.0 million in the prior year, representing a 67% decrease[174]. - Goodwill impairment charge was $369.1 million for the nine months ended November 30, 2024, a decrease of $728.6 million, or 66%, compared to $1,097.7 million in the prior year[195]. - Intangible asset impairment charge was $10.0 million, a decrease of $24.0 million, or 71%, compared to $34.0 million in the prior year[196]. Cash Flow and Financing - The company had $151.2 million in cash and cash equivalents and $155.0 million of unused borrowing capacity as of November 30, 2024[221]. - Net cash provided by operating activities for the nine months ended November 30, 2024 was $46.1 million, a decrease of $10.5 million compared to $56.7 million for the same period in 2023[229]. - Cash, cash equivalents, and restricted cash at the end of the period was $168.4 million, an increase of $19.4 million from $149.0 million as of February 29, 2024[228]. - The company plans to seek additional equity or debt financing for future acquisitions or investments in complementary businesses[222]. - As of November 30, 2024, the principal balance of the 2021 Term Loan was $1,059.0 million, with an interest rate of 8.19%[225]. Tax and Other Liabilities - Income tax benefit was $2.4 million for the three months ended November 30, 2024, a decrease of $2.98 million, or 55%, compared to $5.4 million in the prior year[181]. - The Tax Receivable Agreement liability was $66.9 million as of November 30, 2024, reflecting potential future tax benefits[233]. - The company paid $1.8 million to Tax Receivable Agreement holders during the nine months ended November 30, 2024[232]. Market Position and Future Outlook - The company operates in a growing industry with a significant total addressable market, driven by the need for modern cloud-based supply chain solutions[156].

Financial Performance - GAAP subscription revenue for Q3 FY25 was $132.0 million, a decrease of 0.6% year-over-year, representing 87.0% of total revenue[4] - Total GAAP revenue for Q3 FY25 was $151.7 million, down 3.7% from the same period last year[4] - GAAP net loss for Q3 FY25 was $381.6 million, compared to a net loss of $740.0 million in the year-ago period[4] - Adjusted EBITDA for Q3 FY25 was $53.6 million, a decrease of 3.2% year-over-year, with an adjusted EBITDA margin of 35.3%[4] - Full year 2025 GAAP subscription revenue is expected to be in the range of $526 million to $529 million, reflecting a negative 1.7% growth rate at the mid-point[7] - Total GAAP revenue for fiscal 2025 is projected to be between $607 million and $611 million, indicating a negative 4.0% organic growth rate at the mid-point[8] - Adjusted EBITDA for fiscal 2025 is anticipated to be approximately $215 million, with an implied adjusted EBITDA margin of around 35%[10] - GAAP net loss for Q3 2025 was $381.6 million, with an adjusted net income of $16.5 million, resulting in adjusted earnings per share of $0.05[36] - Adjusted EBITDA for Q3 2025 was reported at $53.6 million, indicating a recovery from the negative EBITDA of ($322.8) million[36] Revenue and Profitability - Non-GAAP gross profit margin for fiscal 2025 is expected to be in the range of 68% to 70%[9] - Non-GAAP gross profit for Q3 FY2025 was $104.3 million, down 4.9% from $109.7 million in Q3 FY2024[27] - Non-GAAP gross margin for Q3 FY2025 was 68.8%, slightly down from 69.6% in Q3 FY2024[27] - Total revenue cost was $75.9 million, leading to a gross profit of $75.7 million, which represents a gross margin of 68.8%[34] Expenses and Liabilities - Total operating expenses amounted to $450.5 million, with a significant goodwill impairment charge of $369.1 million[34] - Research and development expenses were $23.3 million, accounting for 11.3% of total revenue[34] - Sales and marketing expenses totaled $21.5 million, representing 12.9% of total revenue[34] - Total liabilities decreased from $1,556,528,000 on February 29, 2024, to $1,475,546,000 on November 30, 2024, a reduction of approximately 5.2%[23] Cash Flow and Assets - Cash, cash equivalents, and restricted cash at the end of the period increased to $168,434,000 from $129,938,000 year-over-year[25] - Adjusted operating cash flow for Q3 2025 was $21.1 million, with an adjusted free cash flow of $14.9 million[38] - Total assets decreased from $3,141,655,000 on February 29, 2024, to $2,622,144,000 on November 30, 2024, representing a decline of approximately 16.5%[23] Strategic Developments - E2open has appointed Pawan Joshi as chief strategy officer and Rachit Lohani as chief product and technology officer to enhance strategic client engagement and innovation[3] - E2open secured new logo and cross-sell business with large global companies across various sectors, including industrial manufacturing and consumer retail[7] Goodwill and Impairment - Goodwill impairment charge for the nine months ended November 30, 2024, was $369,100,000, significantly lower than $1,097,741,000 in the same period of 2023[25]

Core Viewpoint - Goldman Sachs analyst Adam Hotchkiss downgraded E2open Parent Holdings (ETWO) from Neutral to Sell, lowering the price target from $3.5 to $2.9 due to concerns over organic growth visibility and execution risks [1] Group 1: Financial Performance and Projections - E2open Parent's stock has underperformed year-to-date, and the company faces challenges in organic growth turnaround and execution risk [1] - Hotchkiss projected third-quarter revenue of $151.7 million and adjusted EPS of $0.04 [10] - The stock is currently down 3.51% at $3.02 [11] Group 2: Debt and Leverage Concerns - The company's elevated leverage in a high-interest rate environment limits its ability to pay down debt and meet leverage targets [2] - This cycle restricts E2open Parent's capacity to invest in growth initiatives, including acquisitions [3] Group 3: Growth Challenges - E2open Parent has doubled in size through acquisitions over the last four years, resulting in a doubled requirement for new Annual Recurring Revenue (ARR) to accelerate growth [4] - The company has experienced four consecutive quarters of declines in subscription revenue growth and has lowered fiscal 2025 guidance, indicating a need for caution [8] - Meeting the required levels of net new ARR is challenging, especially as larger transformation projects are being deferred [9] Group 4: Valuation and Market Position - E2open Parent's valuation is considered undemanding, but a rerating higher is unlikely without improvements in fundamentals [6] - Hotchkiss awaits evidence of progress towards management's goals of debt reduction and organic growth before becoming more positive on the stock [7]