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]

Group 1 - The core recommendation is a buy rating for E2open Parent Holdings (NYSE: ETWO) based on the belief that the growth slowdown in 1Q25 is not due to structural reasons [1] - The investment is considered ideal if it operates in a sector projected to experience organic growth exceeding GDP growth over the next 5-10 years [1] - The company should have sustainable competitive advantages that lead to attractive unit economics [1] Group 2 - The investment should be managed by competent, ethical, and long-term thinkers [1] - A fair valuation is essential for the investment to be considered ideal [1]

Financial Performance - E2open Parent Holdings, Inc. (NYSE: ETWO) reported an EPS of -$0.10, missing expectations by $0.02 [1] - The company's revenue was $152.19 million, falling short by $2.62 million and down 3.97% year-over-year [1] Investment Focus - The mission of Grassroots Trading emphasizes providing objective and unbiased research, focusing on small- to mid-cap companies, and identifying potential opportunities in larger companies [1]

Financial Data and Key Metrics Changes - Subscription revenue for Q2 2025 was $131.6 million, a decline of 2.3% year-over-year, but an improvement from Q1's decline [31] - Total revenue for Q2 was $152.2 million, representing a 4.0% decrease compared to the prior year [31] - Non-GAAP gross profit was $105.0 million, a 4.1% decrease year-over-year, with a gross margin of 69.0% [32] - Adjusted EBITDA for Q2 was $54.9 million, with a margin of 36.1%, compared to $56.1 million and 35.4% margin in the prior year [32] - Adjusted operating cash flow was negative $5.5 million for Q2, with a year-to-date adjusted operating cash flow of $33.6 million [34] Business Line Data and Key Metrics Changes - Professional services revenue for Q2 was $20.6 million, a year-over-year decline of 13.1%, below expectations [31] - Subscription bookings increased year-over-year and sequentially, indicating positive progress despite delays in large deals [6][19] Market Data and Key Metrics Changes - The company noted strong market demand for supply chain software, particularly in logistics, global trade, and supply chain orchestration [19][21] - The company hosted a successful Connect 2024 conference, indicating a shift in client focus towards core vision and innovation [9][10] Company Strategy and Development Direction - The company is focused on improving client retention and satisfaction, with a goal of reducing churn and increasing long-term partnerships [11][13] - A strategic review is ongoing, led by the Board of Directors, to evaluate options for the company's future [18] - The company aims to enhance sales productivity and pipeline growth to accelerate commercial momentum [7][24] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the operational changes and cultural shifts within the company, which are expected to drive higher bookings and retention [5][17] - The company is taking a conservative view on full-year bookings and revenue due to longer deal cycles, but remains optimistic about future growth [17][39] Other Important Information - The company is implementing a defined cost reduction plan and focusing on operational efficiencies to improve margins [33][37] - The company expects to generate strong positive adjusted operating cash flow in FY '25, despite a lower revenue outlook [38] Q&A Session Summary Question: How did Q2 deal delays compare to Q1? - Management noted that while there were delays, Q2 showed improvement over Q1 in terms of bookings and churn, but not to the expected degree [41][42] Question: What is the outlook for SAP customers? - There is increased demand from clients undergoing ERP upgrades, creating opportunities for the company to engage and provide value [43][44] Question: What are the expectations from systems integrators? - The company is focusing on partnerships with systems integrators to drive transformation and growth, rather than just implementation support [49][50] Question: What is driving the professional services revenue outlook? - The volatility in professional services revenue is attributed to the timing of large projects and the need for operational improvements [52][53] Question: What are the strongest areas of new bookings? - The company is seeing strong demand in logistics and global trade management, reflecting its competitive differentiation in these markets [66]

Group 1: Earnings Performance - E2open reported quarterly earnings of $0.05 per share, matching the Zacks Consensus Estimate, and an increase from $0.04 per share a year ago [1] - The company had a surprise of -20% in the previous quarter, where it was expected to post earnings of $0.05 but only delivered $0.04 [1] - Over the last four quarters, E2open has surpassed consensus EPS estimates only once [1] Group 2: Revenue Performance - E2open's revenues for the quarter ended August 2024 were $152.19 million, missing the Zacks Consensus Estimate by 0.09%, and down from $158.49 million year-over-year [2] - The company has topped consensus revenue estimates just once over the last four quarters [2] Group 3: Stock Performance and Outlook - E2open shares have declined approximately 8.7% since the beginning of the year, while the S&P 500 has gained 20.6% [3] - The future stock performance will largely depend on management's commentary during the earnings call and the earnings outlook [3][4] - The current consensus EPS estimate for the upcoming quarter is $0.06 on revenues of $161.18 million, and for the current fiscal year, it is $0.20 on revenues of $635.04 million [7] Group 4: Industry Context - The Internet - Software industry, to which E2open belongs, is currently ranked in the top 29% of over 250 Zacks industries, indicating a favorable outlook [8] - Research shows that the top 50% of Zacks-ranked industries outperform the bottom 50% by more than 2 to 1 [8]

On October 9, 2024, E2open Parent Holdings Inc (ETWO, Financial) released its 8-K filing detailing its fiscal second quarter 2025 financial results. E2open, a cloudbased supply chain management SaaS platform, reported a total GAAP revenue of $152.2 million, which fell short of the analyst estimate of $154.82 million. The company also reported a GAAP net loss of $32.9 million, translating to a loss of $0.10 per share, compared to the estimated loss of $0.08 per share. Company Overview E2open Parent Holdings ...