Financial Data and Key Metrics Changes - Total revenue for Q2 was $23 million, up 3% year-over-year, exceeding guidance and street consensus [14] - SaaS revenue increased by 5% year-over-year, accounting for 95% of total revenue, up from 93% in Q2 last year [14] - Non-GAAP net income was $3 million or $0.11 per share, up from $1.3 million or $0.05 per share in the year-ago quarter [16] - Adjusted EBITDA margin for the quarter was 14%, up from 7% in the year-ago quarter [16] - Operating cash flow was $10.1 million, representing a 44% operating cash flow margin, compared to $6.4 million at 29% in the year-ago quarter [17] Business Line Data and Key Metrics Changes - SaaS ARR for AI knowledge customers increased 27% year-over-year, now representing 64% of total SaaS ARR [18][22] - SaaS ARR for all customers increased 7% year-over-year, and 11% when excluding non-core messaging products [18] - LTM dollar-based SaaS net retention for AI knowledge customers was 116%, up from 99% a year ago [18] Market Data and Key Metrics Changes - More than 50% year-over-year increase in top-of-the-funnel AI knowledge leads [4] - Partner-sourced leads in the first half of fiscal 2026 increased 80% year-over-year [10] Company Strategy and Development Direction - The company is focused on becoming a leader in AI-driven knowledge automation, with a strategy centered around customer experience (CX) and extending to enterprise use cases [12][39] - The introduction of the eGain Composer is aimed at driving product sales and attracting new ecosystem partners [11] - The company is investing in product innovation while reducing spending on legacy products [16] Management's Comments on Operating Environment and Future Outlook - Management noted strong business momentum and positive results from go-to-market strategies, with expectations for continued growth [12][22] - The company anticipates total revenue for Q3 to be between $22.2 million and $22.7 million, and for the full year to be between $90.5 million and $92 million [19][21] - Management expressed confidence in capturing market leadership in AI-driven knowledge automation [22] Other Important Information - The company has a strong balance sheet with total cash and cash equivalents at $83.1 million, up from $62.9 million as of June 30, 2025 [17] - The company did not repurchase any shares during the quarter and has $19.7 million remaining under the buyback program [17] Q&A Session Summary Question: Can you provide more details about the large software deal? - The deal involved a long sales cycle of about a year and a half, replacing a lack of an enterprise-wide knowledge platform [26] Question: Can you clarify the impact of the non-core messaging products? - 50% of the non-core messaging revenue was reduced in Q2, with the remainder to be phased out in Q1 2027 [29] Question: What is driving the strength in partner-driven lead generation? - Momentum is seen from small boutique knowledge consulting firms and contact center knowledge deals [30] Question: What are the barriers to replicating the company's software platform? - Key barriers include architecture, understanding use cases, and non-functional requirements like reliability and scalability [36] Question: How is the company planning to deploy its cash reserves? - The focus will remain on internal investments to drive top-line growth, with share buybacks and opportunistic inorganic options being considered [40][41] Question: What are the hiring plans moving forward? - The company is reallocating resources towards high-end engineering and technology talent while increasing marketing investments [44]

Financial Data and Key Metrics Changes - Total revenue for Q2 was $23 million, up 3% year-over-year, exceeding guidance and Street consensus [14] - SaaS revenue increased by 5% year-over-year, accounting for 95% of total revenue, up from 93% in Q2 last year [14] - Non-GAAP net income was $3 million or $0.11 per share, up from $1.3 million or $0.05 per share in the year-ago quarter [16] - Adjusted EBITDA margin for the quarter was 14%, up from 7% in the year-ago quarter [16] - Operating cash flow was $10.1 million, representing a 44% operating cash flow margin, compared to $6.4 million at 29% in the year-ago quarter [17] Business Line Data and Key Metrics Changes - ARR from AI Knowledge Hub customers increased 27% year-over-year, now representing 64% of total SaaS ARR [4][18] - SaaS ARR for all customers increased 7% year-over-year, and 11% when excluding non-core messaging products [18] - LTM dollar-based SaaS net retention for AI knowledge customers was 116%, up from 99% a year ago [18] Market Data and Key Metrics Changes - More than 50% year-over-year increase in top-of-the-funnel AI knowledge leads [4] - Partner-sourced leads in the first half of fiscal 2026 increased 80% year-over-year [10] Company Strategy and Development Direction - The company is focused on becoming a leader in AI-driven knowledge automation, with a strategy centered around customer experience (CX) and extending to enterprise use cases [12][39] - The introduction of the eGain Composer is aimed at driving product sales and attracting new ecosystem partners [11] - The company is investing in product innovation while reducing spending on legacy products [16] Management's Comments on Operating Environment and Future Outlook - Management noted strong business momentum and positive results from go-to-market strategies, with expectations for continued growth [12][22] - There is an acknowledgment of potential pricing pressure in the future, but the company aims to capture market leadership in AI initiatives [38][39] - The company plans to host events to showcase new products and capabilities, indicating a proactive approach to market engagement [49] Other Important Information - The company has a strong balance sheet with total cash and cash equivalents at $83.1 million, up from $62.9 million as of June 30, 2025 [17] - The company did not repurchase any shares during the quarter, with $19.7 million remaining under the buyback program [17] Q&A Session Summary Question: Can you provide more details about the large software deal? - The deal involved a long sales cycle of about a year and a half, replacing a lack of an enterprise-wide knowledge platform [26] Question: Can you clarify the impact of the non-core messaging products? - The company had a 50% reduction in non-core messaging in Q2, with the remainder to be phased out in Q1 2027 [29] Question: What is the focus of partner-driven lead generation? - The company is seeing momentum from small knowledge consulting shops and contact center knowledge deals [30] Question: What are the barriers to replicating the company's software platform? - The company highlighted that while basic programming is becoming easier, challenges remain in architecture and understanding use cases [36] Question: How is the company planning to utilize its cash reserves? - The focus will be on internal investments to drive top-line growth, with share buybacks and potential inorganic options being considered [40][41] Question: What are the hiring plans moving forward? - The company is reallocating resources towards high-end engineering and technology talent while increasing marketing investments [44]

Financial Data and Key Metrics Changes - Total revenue for Q2 was $23 million, up 3% year-over-year, exceeding guidance and street consensus [15] - SaaS revenue increased by 5% year-over-year, accounting for 95% of total revenue, up from 93% in Q2 last year [15] - Non-GAAP net income was $3 million or $0.11 per share, up from $1.3 million or $0.05 per share in the year-ago quarter [17] - Adjusted EBITDA margin for the quarter was 14%, up from 7% in the year-ago quarter [17] - Operating cash flow was $10.1 million, representing a 44% operating cash flow margin, compared to $6.4 million at 29% in the year-ago quarter [18] Business Line Data and Key Metrics Changes - SaaS ARR for AI knowledge customers increased 27% year-over-year, now representing 64% of total SaaS ARR [19][22] - SaaS ARR for all customers increased 7% year-over-year, and 11% when excluding non-core messaging products [19] - LTM dollar-based SaaS net retention for AI knowledge customers was 116%, up from 99% a year ago [19] Market Data and Key Metrics Changes - More than 50% year-over-year increase in top-of-the-funnel AI knowledge leads [4] - Partner-sourced leads in the first half of fiscal 2026 increased 80% year-over-year [10] Company Strategy and Development Direction - The company is focused on expanding its AI Knowledge Hub and driving product-led growth strategies [12] - There is a convergence of customer service and enterprise use case-oriented buying, driven by corporate AI teams [5] - The company aims to capture market leadership in AI-driven knowledge automation [22] Management's Comments on Operating Environment and Future Outlook - Management noted strong business momentum and positive results from go-to-market strategies [12] - The company expects total revenue for Q3 to be between $22.2 million and $22.7 million, with full-year revenue guidance unchanged at $90.5 million to $92 million [20][21] - Management anticipates continued pressure on pricing but sees opportunities for growth in enterprise knowledge solutions [37] Other Important Information - The company has a strong balance sheet with total cash and cash equivalents at $83.1 million, up from $62.9 million [18] - The company is investing in hiring high-end engineering and technology talent while reallocating resources from distributed teams [42] Q&A Session Summary Question: Can you provide more details about the large software deal? - The deal involved a long sales cycle of about a year and a half, replacing a lack of an enterprise-wide knowledge platform [26] Question: How does the March quarter compare to the December quarter? - The March quarter will be a clean, sequential comparison, with the non-core messaging products being phased out [28] Question: What partners are driving strength in partner-driven lead generation? - Strong momentum is seen from small boutique knowledge consulting shops and contact center knowledge deals [30] Question: What are the barriers to replicating the software platform? - Barriers include architecture, understanding use cases, and non-functional requirements like reliability and scalability [36] Question: How is the company planning to deploy its cash reserves? - The focus will be on internal investments to drive top-line growth, with share buybacks and opportunistic inorganic options being considered [39] Question: What are the hiring plans moving forward? - The company is investing in product talent while reducing from other distributed teams, with increased activity in marketing expected [42]

Financial Data and Key Metrics Changes - Total revenue for Q1 was RMB23.5 million, an increase of 8% year over year, reaching the high end of guidance [24] - SaaS revenue increased by 10% year over year, accounting for 93% of total revenue compared to 91% in the previous year [24] - Non-GAAP gross margin for the quarter was 76%, up 600 basis points from 70% a year ago, driven by SaaS gross margin expansion [25] - Non-GAAP net income was RMB4.7 million or $0.17 per share, significantly up from RMB1.3 million or $0.04 per share in the year-ago quarter [27] - Adjusted EBITDA margin for the quarter was 21%, exceeding guidance and up from 6% in the previous year [28] - Cash flow from operations was RMB10.4 million, representing a 44% operating cash flow margin compared to 4% in the year-ago quarter [28] Business Line Data and Key Metrics Changes - ARR for AI knowledge products increased by 23% year over year, while SaaS ARR for all customers increased by 8% [29] - SaaS net retention for knowledge customers was 104%, up from 103% a year ago, while net retention for all customers was 102%, up from 90% [30] Market Data and Key Metrics Changes - Total remaining performance obligations (RPO) increased by 23% year over year, with short-term RPO up 7% [30] Company Strategy and Development Direction - The company is focusing on product-led growth and has made significant product announcements, including the eGain AI knowledge method and eGain AI agent [12][13][15] - The introduction of the Composer product aims to target developers and partners, allowing for a composable platform to operationalize AI solutions [17][21] - The company is investing in building out its leadership team to support growth and product innovation [19][23] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the strong start to the fiscal year, with solid results that beat consensus across the board [33] - The company anticipates a sequential decline in revenue due to the sunsetting of the messaging platform business and delays from government shutdowns affecting professional services [31] - For Q2, the company expects GAAP net income of $1.2 million to $1.7 million and non-GAAP net income of $1.9 million to $2.4 million [31] Other Important Information - The company bought back $1.5 million in stock at an average price of $6.38 per share during the quarter [28] - The balance sheet remains strong, with total cash and cash equivalents at RMB70.9 million, up from RMB62.9 million [29] Q&A Session Summary Question: Sales trends and marketing spend - Management noted a summer slowdown in marketing spend but expects to increase sales hiring investment in the second half of the fiscal year [36][37] Question: Proliferation of AI agents - Management believes that while many companies are experimenting with AI agents, they will ultimately seek to integrate with trusted knowledge systems for serious applications [38][39][40] Question: Composer product integration - The Composer product is designed to allow developers to integrate various AI engines easily, with a focus on providing a trusted knowledge backend [41][42][43] Question: Cash balance strategy - Management indicated that while buybacks will continue, they are also open to tuck-in acquisitions but primarily focus on investing in the business [45][46][47] Question: Update on large knowledge hub opportunities - Management reported steady progress in large opportunities and increased partner engagement in the knowledge hub category [51][52] Question: JPMorgan deployment update - Management confirmed that the first phase of the JPMorgan deployment has gone live, with plans for the next phase underway [54][55]

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]