eGain(US:EGAN)2025-02-13 21:01Revenue Performance - SaaS revenue for Q2 2024 was $20,847,000, a decrease of 5% from $21,996,000 in Q2 2023, and for the first half of 2024, it was $40,667,000, down 8% from $44,319,000 in the same period last year[149] - Professional services revenue for Q2 2024 was $1,542,000, a decline of 15% from $1,819,000 in Q2 2023, and for the first half of 2024, it was $3,521,000, down 4% from $3,672,000 in the same period last year[149] - Total SaaS and professional services revenue for Q2 2024 was $22,389,000, a decrease of 6% from $23,815,000 in Q2 2023, and for the first half of 2024, it was $44,188,000, down 8% from $47,991,000 in the same period last year[149] - Total revenue for the three months ended December 31, 2024 decreased by $1.4 million (6%) to $22.4 million, while SaaS revenue decreased by $1.1 million (5%) to $20.8 million[170] - Total revenue for the six months ended December 31, 2024 decreased by $3.8 million (8%) to $44.2 million, with SaaS revenue down by $3.7 million (8%)[170] - Revenue from North America decreased by 8% to $17.3 million for the three months ended December 31, 2024, primarily due to a $1.1 million decrease in SaaS revenue[177] Operating Performance - Non-GAAP income from operations for Q2 2024 was $1,272,000 compared to $3,620,000 in Q2 2023, and for the first half of 2024, it was $2,413,000 compared to $6,244,000 in the same period last year[152] - Income from operations was $650,000 for the three months ended December 31, 2024, down 73% from $2.4 million in the same period in 2023[203] - Income from operations for the six months ended December 31, 2024, was $1.2 million, a decrease of 70% from $3.8 million in the same period in 2023[204] - Net cash provided by operating activities decreased by $8.4 million to $7.4 million for the six months ended December 31, 2024, from $15.8 million in the same period in 2023[214] Cost and Expenses - Cost of revenue for the three months ended December 31, 2024 was $6.7 million, a decrease of $310,000 (4%) compared to the same period in 2023[182] - Gross profit margin for the three months ended December 31, 2024 was 70%, down from 71% in the same period in 2023[168] - Operating expenses increased to 67% of total revenue for the three months ended December 31, 2024, compared to 60% in the same period in 2023[168] - Research and development expenses increased by 16% to $7.7 million for the three months ended December 31, 2024, compared to $6.7 million in the same period in 2023[193] - Research and development expenses for the six months ended December 31, 2024, rose by 14% to $15.1 million from $13.3 million in the same period in 2023[194] - Sales and marketing expenses decreased by 2% to $5.3 million for the three months ended December 31, 2024, compared to $5.3 million in the same period in 2023[198] - Sales and marketing expenses for the six months ended December 31, 2024, decreased by 13% to $10.0 million from $11.5 million in the same period in 2023[199] - General and administrative expenses decreased by 12% to $2.1 million for the three months ended December 31, 2024, from $2.4 million in the same period in 2023[201] - General and administrative expenses for the six months ended December 31, 2024, decreased by 19% to $4.5 million from $5.6 million in the same period in 2023[202] Market and Competitive Environment - The company operates in a competitive market for customer engagement software, including generative AI product offerings, which may impact future revenue growth[142] - The lengthy sales cycles and reliance on a small number of customers for a significant portion of revenue pose risks to the company's financial stability[142] - The company is focused on expanding its SaaS and professional services revenue streams to enhance overall business valuation[148] - The company is exposed to risks related to cybersecurity, regulatory changes, and market demand fluctuations that could affect operational performance[140] - The company aims to innovate and respond to rapid technological changes to maintain competitive advantages in the market[142] Future Obligations and Liquidity - As of December 31, 2024, remaining performance obligations were $73.6 million, with $50.9 million expected to be recognized as revenue within one year[163] - As of December 31, 2024, the company's principal sources of liquidity totaled $86.3 million, down from $101.7 million as of June 30, 2024[211] Legal and Compliance - The company is not currently involved in any legal proceedings that could materially affect its business or financial condition[228] - The company evaluates all claims and lawsuits for their potential merits and expected effects on operations[229] - The company may face injunctions if its technologies are found to infringe third-party rights[229] - The company is required to indemnify customers for third-party intellectual property infringement claims, which could increase costs[229] Internal Controls - As of December 31, 2024, the company's disclosure controls and procedures were effective at the reasonable assurance level[225] - There were no changes in internal control over financial reporting that materially affected the company during the last fiscal quarter[226]