eGain(US:EGAN)2022-02-06 16:00Revenue 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]