E2open(US:ETWO)2021-10-14 01:38Financial Data and Key Metrics Changes - E2open achieved total revenue of $92.3 million in Q2 2022, representing a 12.8% increase from Q2 2021 [36] - Subscription revenue was $75.9 million, up 10% year-over-year, while professional services revenue increased by 27.9% to $16.4 million [37] - Adjusted EBITDA for the quarter was $33.5 million, compared to $26.2 million in the prior year, with an adjusted EBITDA margin of 36.3% [41][42] Business Line Data and Key Metrics Changes - Subscription revenue growth was driven by new organic sales across the customer portfolio, while services revenue reflected a return to normal levels post-COVID [38] - The services margin improved due to the return to pre-COVID levels, despite increased headcount for rising service demand [39] Market Data and Key Metrics Changes - The supply chain software market is valued at over $50 billion and is growing at double digits, with a significant shift towards cloud-based solutions [15] - E2open's core client base consists of large global companies that are increasingly focused on supply chain visibility and control [7][8] Company Strategy and Development Direction - E2open aims to become the leading supply chain operating platform for large companies, capitalizing on the fragmented nature of supply chain technology [14] - The company is focused on four growth levers: effective bundling and packaging of solutions, building a new logo sales team, developing strategic partnerships, and monetizing its network [21][25] Management's Comments on Operating Environment and Future Outlook - Management noted that supply chain challenges have heightened the focus on global supply chains, leading to increased demand for E2open's solutions [8][9] - The company expects to achieve between 50% to 60% of run-rate savings from the BlueJay acquisition by the end of fiscal 2022, with total synergies projected at $25 million [33][34] Other Important Information - E2open released its first ESG report, highlighting its commitment to making supply chains more environmentally friendly [13][31] - The company has made significant progress in integrating BlueJay Solutions, with the first release of combined solutions expected in February [29] Q&A Session Summary Question: Can you bridge the gap between bookings growth of 22% and 80% last quarter? - Management clarified that the 22% figure refers to upsell growth from previous periods, not overall bookings growth, which remains strong [49] Question: How has the business been trending from a bookings perspective? - Management indicated that the pipeline continues to expand, with record bookings in the first half of the year [50] Question: What is the cross-sell potential with BlueJay? - Management noted minimal overlap between the two businesses, with significant cross-sell opportunities due to similar customer bases [56] Question: Have client sales cycles changed due to supply chain pressures? - Management observed that projects are moving through customer systems faster, with decisions now being made at higher organizational levels [61] Question: What areas are seeing the strongest demand currently? - Transportation logistics and collaboration solutions are experiencing the greatest uplift in demand [63] Question: When will supply chain pressures improve? - Management anticipates that supply chain issues will gradually improve over the next 6-9 months [64] Question: Is there increased interest in intra-ocean shipping platforms? - Management noted that visibility into shipping processes is a hot topic, with continued strong demand for ocean bookings [67] Question: How is the partnership with Maersk progressing? - Management reported positive momentum and significant demand from the partnership with Maersk [70] Question: Are pipeline yields expected to continue improving? - Management confirmed that pipeline yields are growing, which is positive for future business [71]