Core Insights - eGain is set to participate in the 14th Annual Roth Technology Conference on November 19, 2025, where CFO Eric Smit and VP of Finance Gautam Garg will meet with institutional investors [1] - The company reported a strong start to the fiscal year with a 23% year-over-year growth in Annual Recurring Revenue (ARR) for its AI Knowledge Hub and a 21% EBITDA margin [2] - eGain recently launched three new AI products at the Solve25 event, which have garnered significant interest from customers and partners, indicating a positive market response [2] Company Overview - eGain provides an AI CX automation platform aimed at enhancing customer experience and reducing operational costs through its AI Knowledge Hub [3]

Core Insights - eGain has launched eGain Composer, a modular AI knowledge platform designed to enhance customer experience (CX) automation through Trusted Knowledge™ [1][5] - The platform addresses the fragmentation and inflexibility of current AI knowledge systems, providing a comprehensive solution for developers to create scalable AI CX applications [2] Benefits - eGain Composer offers robust APIs, Model Context Protocol (MCP) servers, and SDKs in Python and TypeScript, facilitating the integration of trusted enterprise knowledge in various formats [4] - The platform supports diverse environments through OpenAPI specifications, enabling flexible integrations and enhancing the overall development experience [4][7] - It provides granular API controls throughout the content management lifecycle, ensuring effective content lifecycle management from authoring to deprecation [7] Security and Compliance - eGain Composer adheres to high security and authentication standards, including OAuth 2.0, HTTPS, SOC 2, HIPAA, GDPR, and FedRAMP, ensuring advanced compliance for enterprises [7] Integration and Optimization - The platform is designed for seamless integration with AI agents, enabling enterprise search, answers, and reliable agentic actions across customer-facing platforms [7] - eGain Composer ensures ongoing improvement in search effectiveness and agentic reliability through closed-loop optimization cycles, maintaining content completeness, accuracy, and compliance [7]

Core Insights - eGain Corporation introduced its eGain AI Agent 2 for Omnichannel CX Automation, focusing on enhancing reliability and consistency in customer experience through a hybrid AI approach [1][2][3] Group 1: Product Features - eGain AI Agent 2 utilizes a hybrid AI model that combines probabilistic reasoning for natural conversations and deterministic reasoning for precise, multi-step workflows, particularly in compliance-sensitive areas [8] - The solution is built on the eGain AI Knowledge Hub, ensuring that interactions are based on accurate and up-to-date information [3] - The PrismEval Service continuously optimizes the alignment between the knowledge base and AI-generated responses, enhancing quality assurance and reducing inaccuracies [4] Group 2: Customer Experience - eGain AI Agent 2 delivers "Assured Actions," providing consistent and reliable experiences across various contexts, which is crucial for building customer trust and meeting regulatory standards [5] - The solution integrates with CCaaS systems, offering real-time trusted answers and guidance for contact center agents, thereby improving both customer and agent experiences [6] Group 3: Deployment and Availability - eGain AI Agent 2 supports omnichannel interactions across phone, email, chat, messaging, and social media, with rapid deployment capabilities [9] - Organizations can configure an AI agent quickly, with the process taking as little as five minutes [9] - The product is currently available for interested organizations to learn more and configure through eGain's website [7]

Financial Data and Key Metrics Changes - Total revenue for Q4 was $23.2 million, up 11% sequentially and up 3% year over year, marking the first year-over-year increase in revenue in eight quarters [17] - Non-GAAP gross margin for Q4 was 73%, up from 71% a year ago, while sales gross margin was 80%, up from 76% [17] - For the full year, total revenue was $88.4 million, down 5% year over year, primarily due to churn in the messaging business [19] - Non-GAAP net income for the full year was $5.7 million or $0.20 per share, compared to $4.3 million or $0.40 per share in the prior year [20] Business Line Data and Key Metrics Changes - AI knowledge ARR grew by 25% year over year, with expectations of 20% growth in fiscal 2026 [11] - Sales ARR for knowledge customers increased 25% year over year, while sales ARR for all customers increased 11% [22] - Non-GAAP operating costs for the full fiscal year were $56 million, flat compared to the prior year [19] Market Data and Key Metrics Changes - The company signed significant clients, including the largest nonprofit healthcare network in New Jersey and a major credit union, indicating strong market demand for AI knowledge solutions [5][6] - The partnership with JPMorgan Chase is expected to enhance customer experience and drive AI efficiencies across their business [9][10] Company Strategy and Development Direction - The company plans to focus on AI knowledge solutions, defocusing from less strategic products, such as messaging, which will be sunset in fiscal 2026 [12] - R&D spending is expected to increase by 6% year over year to extend product leadership in the AI knowledge infrastructure market [11][27] - The company aims to achieve gross margin expansion to between 74% and 75% for the year, up from 71% in fiscal 2025 [26] Management's Comments on Operating Environment and Future Outlook - Management noted that AI investments are not showing significant ROI due to a lack of trusted knowledge, which is critical for delivering value [10] - The company expressed optimism about the growing demand for trusted knowledge to support AI initiatives, which is reflected in their bookings for fiscal 2025 [11] - Guidance for fiscal 2026 indicates total revenue is expected to return to growth, with projections between $90.5 million and $92 million [25] Other Important Information - The company repurchased 2.6 million shares at an average price of $6.03 per share during fiscal 2025, with a total of $15.8 million spent [21] - An investor and analyst day event is scheduled for October 14th and 15th in Chicago, providing opportunities for engagement with customers and insights into the business [27] Q&A Session Summary Question: Timing on the sunsetting of the messaging products - Management indicated that the decision was driven by the need to focus on AI knowledge, which is expected to yield better ROI [29] Question: Expected impact of messaging product sunsetting on numbers - The impact is expected to begin in Q2, with a run rate reduction of roughly 50% by the end of fiscal 2026 [31] Question: Details on the partnership with JPMorgan Chase - The partnership is seen as a strategic opportunity to strengthen the relationship and gain insights into customer needs [33] Question: Trends in AI pilot to conversion rates - The conversion rate for AI solutions is currently stable at about two out of three [35] Question: Sustainability of cost reductions in OpEx and COGS - Management noted improvements in COGS due to migration to a new cloud platform and automation processes [37][38] Question: Breakdown of SaaS ARR components - Approximately 60% of total ARR is now from AI knowledge, with the remainder from eGain Analytics Hub and eGain Conversation Hub [44] Question: Competitive position on the Conversation Hub - Management expressed optimism about the Conversation Hub's growth potential as the AI Knowledge Hub expands [48] Question: Pipeline status for mega deals - Currently, there are no deals of JPMorgan Chase's size in the pipeline, but there are several attractive seven-figure opportunities [49] Question: Services gross margins outlook - The goal is to bring services margins closer to break even as efficiencies improve [50]

AI Knowledge Platform & Market Opportunity - eGain helps companies reduce customer service costs by 75% while improving experience by 20 NPS points using AI Knowledge[7] - The AI Knowledge market represents a $20B+ SaaS opportunity for service[12] - Potential cost savings of $400 billion annually through AI Knowledge solutions[11] Financial Performance & Growth - AI Knowledge ARR grew 25% year-over-year in Q425[37] - AI Knowledge ARR represents 59% of SaaS ARR, up from 52% a year ago[38] - AI Knowledge net retention of 115%, up from 98% a year ago[38] - Total revenue for Q425 was $23.2 million, up 3% year-over-year[42] - SaaS revenue for Q425 was $21.7 million, up 6% year-over-year[42] - The company bought back $3.8 million in stock in Q425[42] FY26 Outlook - Targeting 20+% growth in ARR Knowledge business, with ARR of $44.8M in FY25[48]

Core Insights - eGain reported solid bookings and strong profitability for fiscal 2025, with a significant deal signed in the fourth quarter and healthy demand in the pipeline [2][3] - The company is well-positioned to capitalize on opportunities in AI customer experience automation [2] Fiscal 2025 Fourth Quarter Financial Highlights - Total revenue for Q4 2025 was $23.2 million, representing an 11% increase sequentially and a 3% increase year over year [5] - GAAP net income was $30.9 million, or $1.13 per share on a basic basis, compared to $1.5 million, or $0.05 per share in Q4 2024 [5] - Adjusted EBITDA for Q4 2025 was $4.5 million, reflecting a 19% margin, compared to $2.4 million and an 11% margin in Q4 2024 [5] Fiscal 2025 Full Year Financial Highlights - Total revenue for fiscal 2025 was $88.4 million, down 5% year over year [5] - GAAP net income for the full year was $32.3 million, or $1.15 per share on a basic basis, compared to $7.8 million, or $0.25 per share in fiscal 2024 [5] - Adjusted EBITDA for the full year was $8.6 million, with a 10% margin, compared to $11.2 million and a 12% margin in fiscal 2024 [5] Fiscal 2026 Financial Guidance - For Q1 of fiscal 2026, eGain expects total revenue between $23.0 million to $23.5 million and GAAP net income of $900,000 to $1.6 million [4] - For the full fiscal year 2026, total revenue is expected to be between $90.5 million to $92.0 million, with GAAP net income projected at $3.5 million to $5.0 million [4] Stock Repurchase Program - eGain's Board of Directors approved a $20 million increase in its stock repurchase program, raising the total authorization to $60 million [6] - The program will be funded using existing cash or future cash flows, reflecting the company's belief that its shares are undervalued [7] Non-GAAP Financial Measures - The company provided non-GAAP financial measures, including adjusted EBITDA and non-GAAP net income, to offer additional insights into its operating results [8] - Adjusted EBITDA is defined as net income adjusted for various expenses, while non-GAAP net income excludes certain tax benefits and stock-based compensation [8]

Core Insights - eGain announced findings from a survey on the state of AI in 2025, highlighting significant concerns regarding AI adoption among executives and knowledge managers [1][2] AI Adoption Challenges - 61% of respondents identified erroneous or inconsistent answers as the primary barrier to successful AI adoption [2] - Gartner warns that all generative AI projects lacking integration with modern knowledge management systems are likely to fail in achieving customer experience and operational cost-reduction goals [2] Importance of Trusted Content - eGain's CEO emphasized the necessity of trusted content for successful AI applications, stating that both AI and knowledge are essential for organizations to thrive [3] - The survey results underscore the critical role of trusted content in driving successful AI initiatives [3] Performance Improvements - Companies utilizing the eGain AI Knowledge Hub reported significant operational improvements, including a 24% reduction in Average Handle Time (AHT) and a 57% decrease in Average Wait Time (AWT) for member calls [4] - Additionally, agent satisfaction scores increased by 22% as a result of implementing trusted knowledge solutions [4]

AI Knowledge Platform & Market Opportunity - eGain is positioned as the 1 AI Knowledge Platform[5] - AI Knowledge helps companies reduce customer service costs by 75% and improve experience by 20 NPS points[9] - The AI Knowledge SaaS market for service is estimated to be over $20 billion[16] - Gartner predicts that by 2025, 100% of generative AI virtual customer assistant and virtual agent assistant projects lacking integration with modern knowledge management systems will fail[17] Financial Performance & Guidance - Q3FY25 total revenue was $21.0 million, a 6% decrease year-over-year[48] - Q3FY25 Non-GAAP net income was $0.8 million, representing a 4% margin[48] - Q3FY25 operating cash flow was $2.2 million, an 11% margin[48] - The company holds $68.7 million in cash and equivalents[48] - AI Knowledge ARR grew 11% year-over-year in Q3FY25[43] - AI Knowledge ARR represents 54% of SaaS ARR, up from 46% a year ago[44] - The company projects total revenue between $22.8 million and $23.3 million for Q4FY25 and between $88.0 million and $88.5 million for the full fiscal year 2025[59] Product & Customer Success - eGain AI Agent for Contact Center was launched in March 2025[47] - eGain AI Knowledge Hub is now KCS-Verified[46] - One customer achieved a 97% search success rate and a 10x speed to answer improvement using AI Knowledge[37]

Core Viewpoint - eGain reported its fiscal 2025 third quarter results, highlighting a decline in revenue but an increase in profitability and cash flow, alongside significant business developments including a major expansion deal and product launch [2][5]. Financial Highlights Fiscal 2025 Third Quarter - Total revenue was $21.0 million, a decrease of 6% year over year [5]. - GAAP net income was $66,000, or $0.00 per share, compared to $1.5 million, or $0.05 per share in Q3 2024 [5]. - Non-GAAP net income was $765,000, or $0.03 per share, down from $2.6 million, or $0.08 per share in Q3 2024 [5]. - Cash provided by operating activities was $2.2 million, with an operating cash flow margin of 11% [5]. - Adjusted EBITDA was $1.2 million, compared to $2.3 million in Q3 2024 [5]. Fiscal 2025 First Nine Months - Total revenue for the first nine months was $65.2 million, down 7% year over year [5]. - GAAP net income was $1.4 million, or $0.05 per share, compared to $6.3 million, or $0.20 per share in the same period last year [5]. - Non-GAAP net income was $3.3 million, or $0.12 per share, down from $9.8 million, or $0.31 per share in the same period last year [5]. - Adjusted EBITDA was $4.2 million, compared to $8.8 million in the same period last year [5]. Fourth Quarter Financial Guidance - eGain expects total revenue for Q4 to be between $22.8 million to $23.3 million [5]. - GAAP net income is projected to be between $1.1 million to $1.6 million, or $0.04 to $0.06 per share [5]. - Non-GAAP net income is expected to be between $1.7 million to $2.2 million, or $0.06 to $0.08 per share [5]. - Full year revenue guidance has been lowered to $88.0 million to $88.5 million, while GAAP net income guidance has been raised to $2.5 million to $3.0 million [5]. Business Developments - eGain secured one of its largest expansion deals with a U.S. megabank shortly after the quarter closed [2]. - The company launched its AI Agent for Contact Center, which assists agents in real-time using trusted knowledge and reasoning [2]. - eGain was recognized by Gartner as an emerging leader in the Generative AI Technologies market [2].