E2open(US:ETWO)2024-10-10 00:37Financial Data and Key Metrics Changes - Subscription revenue for Q2 2025 was $131.6 million, a decline of 2.3% year-over-year, but an improvement from Q1's decline [31] - Total revenue for Q2 was $152.2 million, representing a 4.0% decrease compared to the prior year [31] - Non-GAAP gross profit was $105.0 million, a 4.1% decrease year-over-year, with a gross margin of 69.0% [32] - Adjusted EBITDA for Q2 was $54.9 million, with a margin of 36.1%, compared to $56.1 million and 35.4% margin in the prior year [32] - Adjusted operating cash flow was negative $5.5 million for Q2, with a year-to-date adjusted operating cash flow of $33.6 million [34] Business Line Data and Key Metrics Changes - Professional services revenue for Q2 was $20.6 million, a year-over-year decline of 13.1%, below expectations [31] - Subscription bookings increased year-over-year and sequentially, indicating positive progress despite delays in large deals [6][19] Market Data and Key Metrics Changes - The company noted strong market demand for supply chain software, particularly in logistics, global trade, and supply chain orchestration [19][21] - The company hosted a successful Connect 2024 conference, indicating a shift in client focus towards core vision and innovation [9][10] Company Strategy and Development Direction - The company is focused on improving client retention and satisfaction, with a goal of reducing churn and increasing long-term partnerships [11][13] - A strategic review is ongoing, led by the Board of Directors, to evaluate options for the company's future [18] - The company aims to enhance sales productivity and pipeline growth to accelerate commercial momentum [7][24] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the operational changes and cultural shifts within the company, which are expected to drive higher bookings and retention [5][17] - The company is taking a conservative view on full-year bookings and revenue due to longer deal cycles, but remains optimistic about future growth [17][39] Other Important Information - The company is implementing a defined cost reduction plan and focusing on operational efficiencies to improve margins [33][37] - The company expects to generate strong positive adjusted operating cash flow in FY '25, despite a lower revenue outlook [38] Q&A Session Summary Question: How did Q2 deal delays compare to Q1? - Management noted that while there were delays, Q2 showed improvement over Q1 in terms of bookings and churn, but not to the expected degree [41][42] Question: What is the outlook for SAP customers? - There is increased demand from clients undergoing ERP upgrades, creating opportunities for the company to engage and provide value [43][44] Question: What are the expectations from systems integrators? - The company is focusing on partnerships with systems integrators to drive transformation and growth, rather than just implementation support [49][50] Question: What is driving the professional services revenue outlook? - The volatility in professional services revenue is attributed to the timing of large projects and the need for operational improvements [52][53] Question: What are the strongest areas of new bookings? - The company is seeing strong demand in logistics and global trade management, reflecting its competitive differentiation in these markets [66]