E2open(ETWO) - 2026 Q1 - Quarterly Results

E2open Fiscal 2026 First Quarter Financial Results Executive Summary E2open reported a return to year-over-year subscription revenue growth in Q1 FY26, exceeding guidance, with strong cash generation and progress towards sustainable growth, anticipating acquisition by WiseTech Global by year-end and confirming full-year guidance - The company returned to year-over-year subscription revenue growth for the first time since mid-FY24, demonstrating a strengthening core business[2] - Management is focused on client satisfaction, product delivery, and innovation, which they believe positions the company well for its pending acquisition by WiseTech Global[2] - The acquisition by WiseTech Global is expected to close by the end of the current calendar year[2] - Full-year guidance for fiscal 2026, originally issued on April 29, 2025, has been confirmed[2] Q1 FY2026 Financial Highlights E2open's Q1 FY26 saw total GAAP revenue increase by 1.0% to $152.6 million, driven by a 1.1% rise in subscription revenue, while significantly narrowing its GAAP net loss and expanding Adjusted EBITDA margin Q1 FY2026 Key Financial Metrics (GAAP) | Metric | Q1 FY2026 | Q1 FY2025 | YoY Change | | :--- | :--- | :--- | :--- | | Subscription Revenue | $132.9M | $131.4M | +1.1% | | Total Revenue | $152.6M | $151.2M | +1.0% | | Gross Profit | $73.6M | $72.7M | +1.3% | | Gross Margin | 48.2% | 48.1% | +10 bps | | Net Loss | ($15.5M) | ($42.8M) | +63.8% | | EPS (Loss) | ($0.05) | ($0.13) | +61.5% | Q1 FY2026 Key Non-GAAP Metrics | Metric | Q1 FY2026 | Q1 FY2025 | YoY Change | | :--- | :--- | :--- | :--- | | Non-GAAP Gross Profit | $102.4M | $102.6M | -0.2% | | Non-GAAP Gross Margin | 67.1% | 67.8% | -70 bps | | Adjusted EBITDA | $52.2M | $50.7M | +3.0% | | Adjusted EBITDA Margin | 34.2% | 33.6% | +60 bps | | Adjusted EPS | $0.05 | N/A | N/A | Recent Business Highlights E2open announced its acquisition by WiseTech Global, secured new and expanded business with global companies across various sectors, and successfully implemented key solutions for major clients - Announced the company's acquisition by WiseTech Global, which concluded a strategic review process[7] - Secured new logo and cross-sell deals with major global companies in diverse industries such as manufacturing, high-tech, retail, and consumer packaged goods[7] - A significant cross-sell expansion with a global health and wellness company added Demand Planning, Supply Planning, and Multi-Echelon Inventory Optimization (MEIO) applications to their existing E2open solutions[7] - A large multinational food manufacturer successfully implemented E2open's Transportation Management solution in its Mexico division, enhancing control over its North American transportation network[7] Fiscal Year 2026 Financial Outlook E2open reiterated its full-year fiscal 2026 guidance, projecting GAAP subscription revenue between $525 million and $535 million, total GAAP revenue from $600 million to $618 million, and Adjusted EBITDA between $200 million and $210 million FY2026 Full-Year Guidance | Metric | Guidance Range | Mid-point Growth Rate | | :--- | :--- | :--- | | GAAP Subscription Revenue | $525M - $535M | 0.4% | | Total GAAP Revenue | $600M - $618M | 0.2% | | Non-GAAP Gross Profit Margin | 68.0% - 68.5% | N/A | | Adjusted EBITDA | $200M - $210M | N/A | | Implied Adjusted EBITDA Margin | 33% - 34% | N/A | Financial Statements The unaudited condensed consolidated financial statements for Q1 FY26 show increased total revenue, a significantly reduced net loss, a stable asset base, and positive cash flow from operations Condensed Consolidated Statements of Operations For Q1 FY26, total revenue grew to $152.6 million, gross profit increased, and a notable reduction in operating expenses led to a significantly smaller loss from operations and net loss attributable to the company Q1 FY2026 Statement of Operations Highlights (in thousands) | Line Item | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Total revenue | $152,610 | $151,163 | | Gross Profit | $73,591 | $72,660 | | Total operating expenses | $76,038 | $89,505 | | Loss from operations | $(2,447) | $(16,845) | | Net loss | $(15,523) | $(42,788) | | Net loss attributable to E2open | $(14,126) | $(38,862) | | Diluted loss per share | $(0.05) | $(0.13) | Condensed Consolidated Balance Sheets As of May 31, 2025, E2open's balance sheet shows total assets of $2.38 billion, an increase in cash, a slight decrease in total liabilities, and an increase in total stockholders' equity Balance Sheet Highlights (in thousands) | Account | May 31, 2025 | February 28, 2025 | | :--- | :--- | :--- | | Cash and cash equivalents | $230,197 | $197,350 | | Total current assets | $383,928 | $379,596 | | Goodwill | $1,243,848 | $1,213,794 | | Total assets | $2,377,809 | $2,371,035 | | Total current liabilities | $366,284 | $333,402 | | Notes payable (current & long-term) | $1,040,827 | $1,042,444 | | Total liabilities | $1,476,985 | $1,493,865 | | Total stockholders' equity | $900,657 | $876,979 | Condensed Consolidated Statements of Cash Flows For Q1 FY26, the company generated $41.8 million in net cash from operating activities, used $7.3 million in investing activities, and saw a net increase in cash, cash equivalents, and restricted cash of $27.9 million Q1 FY2026 Cash Flow Highlights (in thousands) | Cash Flow Activity | Three Months Ended May 31, 2025 | Three Months Ended May 31, 2024 | | :--- | :--- | :--- | | Net cash provided by operating activities | $41,795 | $35,916 | | Net cash used in investing activities | $(7,326) | $(6,084) | | Net cash used in financing activities | $(3,896) | $(3,006) | | Net increase in cash, cash equivalents and restricted cash | $27,880 | $26,902 | Reconciliation of GAAP to Non-GAAP Measures This section provides detailed reconciliations of GAAP to non-GAAP financial measures, including adjustments for revenue, gross profit, Adjusted EBITDA, expenses, Adjusted EPS, and Adjusted Free Cash Flow, to offer a clearer view of ongoing business performance Reconciliation of Pro Forma Information (Revenue, Gross Profit, Adjusted EBITDA) In Q1 FY26, after currency adjustments, non-GAAP subscription revenue grew 0.9%, non-GAAP gross profit was $102.4 million, and Adjusted EBITDA increased 3.0% to $52.2 million, with significant adjustments from net loss Adjusted EBITDA Reconciliation (in millions) | Line Item | Q1 FY2026 | Q1 FY2025 | | :--- | :--- | :--- | | Net loss | $(15.5) | $(42.8) | | Interest expense, net | 22.1 | 24.7 | | Income tax expense (benefit) | 2.2 | (1.9) | | Depreciation and amortization | 36.7 | 53.6 | | EBITDA | $45.4 | $33.6 | | Share-based compensation | 11.3 | 11.8 | | Other adjustments | (1.4) | 8.3 | | Adjusted EBITDA | $52.2 | $50.7 | Reconciliation of Non-GAAP Expenses For Q1 FY26, total GAAP cost of revenue and operating expenses were adjusted down to non-GAAP figures, primarily by excluding depreciation & amortization, acquisition-related expenses, and share-based compensation Q1 FY2026 Expense Reconciliation (in millions) | Expense Category | GAAP | Non-GAAP (Adjusted) | Key Adjustments | | :--- | :--- | :--- | :--- | | Total cost of revenue | $79.0 | $50.2 | Depreciation & Amortization ($26.4) | | Total operating expenses | $76.0 | $50.2 | Amortization ($10.3), Share-Based Comp ($9.6), Acquisition Expenses ($5.5) | Reconciliation of Adjusted Earnings Per Share E2open reported an Adjusted EPS of $0.05 for Q1 FY26, derived from GAAP net loss with adjustments to reach Adjusted EBITDA, then subtracting depreciation, interest, and normalized income taxes to yield Adjusted Net Income Q1 FY2026 Adjusted EPS Calculation (in millions, except per share) | Line Item | Amount | | :--- | :--- | | GAAP Net loss | $(15.5) | | Adjustments to reach Adjusted EBITDA | +$67.7 | | Adjusted EBITDA | $52.2 | | Depreciation | $(7.3) | | Interest and other expense, net | $(22.1) | | Normalized income taxes | $(5.5) | | Adjusted Net Income | $17.4 | | Adjusted basic shares outstanding | 349.1 | | Adjusted earnings per share | $0.05 | Adjusted Free Cash Flow For Q1 FY26, E2open calculated an Adjusted Free Cash Flow of $40.7 million, derived from GAAP operating cash flow adjusted for non-recurring payments and changes in client deposits, less capital expenditures Q1 FY2026 Adjusted Free Cash Flow (in millions) | Line Item | Amount | | :--- | :--- | | GAAP operating cash flow | $41.8 | | Add: Non recurring cash payments | $1.3 | | Add: Change in channel client deposits payable | $5.0 | | Adjusted operating cash flow | $48.0 | | Capital expenditures | $(7.3) | | Adjusted free cash flow | $40.7 | Consolidated Capital Structure As of May 31, 2025, E2open's capital structure included approximately 312.4 million shares outstanding, with an adjusted basic share count of 349.1 million and a fully converted share count of approximately 403.9 million Capital Structure as of May 31, 2025 (in thousands) | Description | Shares | | :--- | :--- | | Shares outstanding | 312,397 | | Common Units | 30,692 | | Adjusted Basic Shares | 349,089 | | Warrants | 29,080 | | Options (vested/unvested) | 6,177 | | Restricted Shares (vested/unvested) | 19,578 | | Fully Converted Shares | 403,924 | Disclaimers and Forward-Looking Statements The press release includes non-GAAP financial measures and forward-looking statements regarding the proposed acquisition and future performance, which are subject to numerous risks and uncertainties including those related to the merger, macroeconomic conditions, and operational challenges - The report uses non-GAAP measures like adjusted EBITDA and adjusted EPS, which are not prepared in accordance with GAAP and may not be comparable to similar measures from other companies[11][12] - Forward-looking statements are subject to significant risks, including uncertainties related to the proposed merger with WiseTech Global, potential litigation, and restrictions on business conduct during the merger period[14][16] - Key operational risks include volatile macroeconomic conditions, potential impairment of goodwill, challenges in developing new products, client churn, and cybersecurity threats[16]