E2open(ETWO) - 2024 Q4 - Earnings Call Transcript

Financial Data and Key Metrics Changes - For the fiscal fourth quarter, subscription revenue was $134.4 million, representing a 1.8% decline year-over-year but an increase sequentially for the first time in four quarters [78] - Total revenue for the fourth quarter was$ 158.5 million, reflecting a decline of 4.7% over the prior year quarter, while full fiscal year 2024 total revenue was $634.6 million, a decline of 2.7% year-over-year [81] - Non-GAAP gross profit for the fourth quarter was$ 110.9 million, a 4.9% decline year-over-year, with a non-GAAP gross margin of 70.0% [53] - The net loss for the fourth quarter was $45.5 million, and for the full fiscal year, the net loss was$ 1.2 billion, which included a non-cash goodwill impairment of $1.1 billion [54] Business Line Data and Key Metrics Changes - Professional services and other revenue in the fourth quarter was$ 24.1 million, reflecting an 18.0% decline [80] - Subscription revenue for the full fiscal year was $536.8 million, growing 0.7% [51] Market Data and Key Metrics Changes - The platform now has 480,000 connected parties and processes 16 billion supply chain transactions annually [36] - The logistics ecosystem handles 21% of all ocean freight bookings, and the global trade solution provides trade compliance in 230 jurisdictions [36] Company Strategy and Development Direction - The company is focused on returning to strong sustainable organic growth, emphasizing client-centricity and long-term partnerships [34][42] - A new SVP of Global Services has been appointed to lead the Professional Services business, aiming to enhance strategic differentiation [20] - The company is implementing targeted changes to its go-to-market model to align sales capacity with high-growth opportunities [21] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the demand for supply chain solutions due to global supply chain volatility [7] - The company aims to stabilize churn and improve retention, with gross retention at approximately 90% and net retention at approximately 99% [41] - The guidance for FY '25 expects subscription revenue in the range of$ 532 million to $542 million, indicating a slight decline or modest growth [56] Other Important Information - The company is conducting a strategic review, but no further comments will be made until appropriate [90] - The management team is focused on executing the growth plan and serving customers effectively [90] Q&A Session Summary Question: What product areas is the company focusing on for market share growth? - The company has a competitive product platform and can win in each of its five key product families across multiple industries [93] Question: Where is the expected growth coming from among cross-selling, SI partners, or new logos? - The SI partnerships have been the most effective in driving new logos, contributing significantly to growth [94] Question: How is the company addressing sales productivity and turnover? - The company is reallocating resources to specialized product sellers and has not seen attrition issues outside of normal industry standards [105][128] Question: What is the outlook for churn and retention? - The company is implementing clear management practices to reduce churn, with a focus on client-centricity [116] Question: What is the expected impact of the growth reacceleration plan on revenue? - The company anticipates that improvements in execution and pipeline growth will lead to higher subscription revenue growth in FY '25 [123]