E2open(US:ETWO)2023-10-09 16:00Revenue Performance - Total revenue for the three months ended August 31, 2023, was $158.5 million, a decrease of $2.2 million, or 1%, compared to $160.7 million for the same period in 2022[179]. - Subscription revenue increased by $3.1 million, or 2%, to $134.7 million for the three months ended August 31, 2023, driven by new organic subscription sales[180]. - Professional services and other revenue decreased by $5.3 million, or 18%, to $23.8 million for the three months ended August 31, 2023, due to macroeconomic impacts and lower order volume[182]. - Total revenue for the six months ended August 31, 2023, was $318.6 million, a decrease of $2.4 million, or 1%, compared to $321.1 million in the prior year[206]. - Subscriptions revenue increased by $8.5 million, or 3%, to $269.6 million for the six months ended August 31, 2023, driven by new organic subscription sales[206]. - Professional services and other revenue decreased by $10.9 million, or 18%, to $49.0 million, attributed to macroeconomic impacts and lower order volume[207]. Profitability Metrics - Gross profit for the three months ended August 31, 2023, was $79.2 million, an increase of $1.7 million, or 2%, compared to $77.4 million for the same period in 2022[179]. - The gross margin for total revenue increased to 50% for the three months ended August 31, 2023, compared to 48% for the same period in 2022[184]. - Gross profit for the six months ended August 31, 2023, was $158.6 million, a slight decrease of $0.5 million compared to $159.1 million in the prior year[209]. - Non-GAAP gross profit for the three months ended August 31, 2023, was $109.5 million, a $2.7 million, or 3%, increase compared to $106.9 million for the same period in 2022[235]. - Adjusted EBITDA for the three months ended August 31, 2023, was $56.1 million, a $7.8 million, or 16%, increase compared to $48.3 million for the same period in 2022[237]. - EBITDA for the three months ended August 31, 2023, was $37.8 million, a $489.6 million increase compared to a negative $451.8 million for the same period in 2022[236]. Expenses Overview - Research and development expenses for the three months ended August 31, 2023, were $24.9 million, a decrease of $0.6 million, or 3%, compared to $25.6 million for the same period in 2022[190]. - Sales and marketing expenses were $21.6 million, a decrease of $1.2 million, or 5%, from $22.7 million in the prior year, primarily due to a $3.5 million decrease in marketing expenses[192]. - General and administrative expenses increased by $15.2 million, or 65%, to $38.6 million, mainly due to a $17.8 million unfavorable arbitration ruling[193]. - Research and development expenses increased by $2.7 million, or 6%, to $50.8 million for the six months ended August 31, 2023, representing 16% of revenue[213]. - Sales and marketing expenses decreased by $5.8 million, or 12%, to $41.1 million for the six months ended August 31, 2023, accounting for 13% of revenue[215]. - General and administrative expenses rose by $21.0 million, or 48%, to $64.7 million for the six months ended August 31, 2023, which is 20% of revenue[216]. Impairment Charges - The company recognized a goodwill impairment charge of $410.0 million in the first quarter of fiscal 2024 due to a significant decline in market capitalization[176]. - The fair value of E2open's indefinite-lived intangible asset was determined to be less than its carrying amount, resulting in a $4.0 million impairment charge for the same period[177]. - The company recorded a goodwill impairment charge of $514.8 million in the second quarter of fiscal 2023, with no impairment charge in the second quarter of fiscal 2024[196]. - Goodwill impairment charge was $410.0 million for the six months ended August 31, 2023, a decrease of $104.8 million compared to $514.8 million in the prior year[219]. Cash Flow and Financing - Cash and cash equivalents as of August 31, 2023, totaled $134.6 million, reflecting a $30.3 million increase from $104.3 million at the beginning of the period[250]. - Net cash provided by operating activities for the six months ended August 31, 2023, was $51.3 million, a significant increase from $2.2 million in the same period of 2022[251]. - Net cash used in investing activities decreased to $16.1 million in the six months ended August 31, 2023, compared to $158.7 million in the same period of 2022[251]. - The company had $111.8 million in cash and cash equivalents and $155.0 million of unused borrowing capacity under its 2021 Revolving Credit Facility as of August 31, 2023[243]. - The principal balance of the 2021 Term Loan was $1,072.7 million as of August 31, 2023, with an interest rate of 8.95%[247]. - The company plans to seek additional equity or debt financing for potential acquisitions or investments in complementary businesses[244]. Tax and Other Liabilities - The income tax benefit was $2.1 million, or 5.2%, for the three months ended August 31, 2023, compared to $113.7 million, or 21.7%, in the prior year[205]. - The Tax Receivable Agreement liability was $64.3 million as of August 31, 2023, reflecting potential future tax benefits[254]. - The contingent consideration liability was $19.3 million as of August 31, 2023, down from $29.5 million in February 2023[260]. Accounting and Reporting - The company prepares its financial statements in accordance with U.S. GAAP, requiring management to make significant judgments and estimates[264]. - Recent accounting pronouncements are detailed in the Notes to the Unaudited Condensed Consolidated Financial Statements[266].