SUNNYVALE, CA -- (Marketwired) -- 09/08/16 -- eGain (NASDAQ: EGAN), a leading provider of cloud customer engagement solutions, today announced financial results for its fiscal 2016 fourth quarter and full year ended June 30, 2016.
Fiscal 2016 Fourth Quarter Financial Highlights
- Total revenue was $17.6 million, up 3% from $17.1 million in the same quarter a year ago (up 8% on a constant currency basis)
- Subscription and support revenue was $10.8 million, up 8% from $10.1 million in the same quarter a year ago (up 12% on a constant currency basis)
- Gross margin increased to 69%, compared to 63% in the year ago quarter
- GAAP net income was $1.4 million, or $0.05 per share on a basic and diluted basis (which included a $1.5 million income tax benefit), compared to a GAAP net loss of $2.9 million, or a loss of $0.11 per share on a basic and diluted basis, for the year ago quarter
- Adjusted EBITDA improved to $1.9 million, up from an Adjusted EBITDA loss of $307,000 in the year ago quarter
- Cash flow generated from operations in the fourth quarter was $2.2 million, compared to cash flow used in operations of $3.6 million in the year ago quarter
- New subscription ACV (non-GAAP), which is the annualized value of new cloud and term license contractual obligations signed in the quarter, was $3.4 million, up 76% year over year
Fiscal 2016 Full Year Financial Results
- Total revenue was $69.4 million, down 9% from $75.9 million in fiscal 2015 (down 6% on a constant currency basis) as the company transitioned to a cloud only offering
- Subscription and support revenue was $42.8 million, up 1% from $42.3 million in fiscal 2015 (up 4% on a constant currency basis)
- Gross margin increased to 66%, compared to 61% in the prior year
- GAAP net loss was $6.2 million, or a loss of $0.23 per share on a basic and diluted basis, compared to net loss of $12.4 million, or a loss of $0.47 per share on a basic and diluted basis, for fiscal 2015
- Adjusted EBITDA improved to $1.9 million, up from an Adjusted EBITDA loss of $1.4 million for the prior fiscal year
- Cash flow generated from operations for fiscal 2016 was $1.9 million, compared to cash used in operations of $10.5 million for fiscal 2015
- Total cash, cash equivalents and restricted cash as of June 30, 2016 was $11.8 million, up from $9.3 million as of June 30, 2015
- New subscription ACV (non-GAAP) for the full year fiscal 2016 was $7.7 million, up 113% year over year
- Total subscription ACV (non-GAAP) for the full year fiscal 2016 was $25.4 million, up 10% year over year (up 17% on a non-GAAP constant currency basis)
Ashu Roy, eGain CEO, commented, "Our solid bookings growth reflects our continued business transition to the cloud. We aligned our sales and business operations this year around a land and expand strategy that is showing positive early results. We are excited to see the enterprise market increasingly preferring our broad and deep customer engagement suite delivered via the secure eGain cloud."
Eric Smit, eGain CFO, added, "While successfully executing our cloud transition through the year, we improved our gross margin. We also delivered significantly improved net loss of $6.2 million for the full year, compared to a $12.4 million net loss a year ago, and an Adjusted EBITDA of $1.9 million for the full year, compared to a $1.4 million loss a year ago. In addition, we generated $1.9 million in cash flow from operations for the year compared to using cash of $10.5 million in the prior year."
Non-GAAP Financial Measures
These reported results include Annual Contract Value (ACV), Constant Currency and Adjusted EBITDA as supplemental information relating to our operating results. Adjusted EBITDA is a non-GAAP financial measure, defined as net income/(loss), adjusted for the impact of purchase accounting adjustments to deferred revenue related to acquisitions, depreciation and amortization, stock-based compensation expense, interest expense, net, income tax provision (benefit), amortization of acquired intangible assets, acquisition-related expenses and severance and related charges. We define ACV as being the annualized value of new cloud and term license contractual obligations signed in the quarter. Constant currency growth rates presented are derived from converting the current period results for entities reporting in currencies other than U.S. Dollars into U.S. Dollars at the exchange rates in effect during the prior period presented rather than the actual exchange rates in effect during the current period. Non-GAAP results are presented for supplemental informational purposes only and should not be considered a substitute for financial information presented in accordance with generally accepted accounting principles, and may be different from non-GAAP measures used by other companies. eGain's management uses these non-GAAP measures to compare the company's performance to that of prior periods for trend analyses, and for budgeting and planning purposes. eGain believes that the use of these non-GAAP financial measures provides an additional tool for investors to use in evaluating ongoing operating results and trends and in comparing the company's financial measures with other software companies, many of which present similar non-GAAP financial measures to investors, and that it allows for greater transparency with respect to key metrics used by management in its financial and operational decision-making. Reconciliation tables of the most comparable GAAP financial measures to the non-GAAP financial measures used in this press release are included with the financial tables at the end of this release. eGain urges investors to review the reconciliation and not to rely on any single financial measure to evaluate the company's business.
Quarterly Conference Call
eGain will discuss its quarterly results today via teleconference at 2:00 p.m. Pacific Daylight Time. To access the live call, please dial (888) 710-4011 (U.S. toll free) or (913) 312-0380 (international), and give the participant pass code 3077138. A live webcast of the call and slide presentation can be accessed from the investors section at www.egain.com. A replay of the conference call will also be available via telephone beginning approximately two hours after conclusion of the call and remain in effect for one week. To access the replay dial-in information, please click here. An archive of the webcast will also be available on the investors section at www.egain.com.
About eGain
eGain's customer engagement solutions power digital transformation for leading brands. Our top-rated cloud applications for social, mobile, web, and contact centers help clients deliver connected customer journeys in a multichannel world. To find out more about eGain Corporation, visit http://www.egain.com/company/investors/
Headquartered in Sunnyvale, California, eGain has operating presence in North America, EMEA, and APAC. To learn more about us, visit www.eGain.com or call our offices: +1-800-821-4358 (US), +44-(0)-1753-464646 (EMEA), or +91-(0)-20-6608-9200 (APAC).
Cautionary Note Regarding Forward-Looking Statements. This press release contains forward-looking statements within the meaning of the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements include our belief that we are seeing and will continue to see benefits of the Company's transition to a cloud-based business and will continue to see success in implementing a land and expand sales model, and that the enterprise market is increasingly preferring our broad and deep customer engagement suite delivered via the secure eGain cloud, among other matters. The achievement or success of the matters covered by such forward-looking statements involves risks, uncertainties and assumptions. If any such risks or uncertainties materialize or if any of the assumptions prove incorrect, the Company's results could differ materially from the results expressed or implied by the forward-looking statements we make. The risks and uncertainties referred to above include, but are not limited to: our ability to capitalize on customer engagement; the success of organization changes; risks that our hybrid revenue model and lengthy sales cycles may negatively affect our operating results; risks related to our reliance on a relatively small number of customers for a substantial portion of our revenue; our ability to compete successfully and manage growth; our ability to develop and expand strategic and third party distribution channels; risks associated with new product releases; risks related to our international operations; our ability to invest resources to improve our products and continue to innovate; and other risks detailed from time to time in eGain's filings with the Securities and Exchange Commission, including eGain's quarterly report on Form 10-Q for the quarter ended March 31, 2016 and its annual report on Form 10-K filed on September 11, 2015" which are available on the Securities and Exchange Commission's Web site at www.sec.gov. These forward-looking statements are based on current expectations and speak only as of the date hereof. The Company assumes no obligation to update these forward-looking statements.
Note: eGain is a registered trademark, and the other eGain product and service names appearing in this release are trademarks or service marks, of eGain. All other company names and products are trademarks or registered trademarks of their respective companies.
eGain Corporation
Condensed Consolidated Balance Sheets
(in thousands)
(unaudited)
June 30, June 30,
2016 2015
---------- ----------
ASSETS
Current assets:
Cash and cash equivalents $ 11,780 $ 8,633
Restricted cash 5 676
Accounts receivable, net 11,876 13,118
Deferred commissions 787 633
Prepaid expenses 1,480 906
Other current assets 426 719
---------- ----------
Total current assets 26,354 24,685
Property and equipment, net 1,688 3,136
Deferred commissions, net of current portion 325 297
Intangible assets, net 4,839 7,620
Goodwill 13,186 13,186
Other assets 1,671 807
---------- ----------
Total assets $ 48,063 $ 49,731
========== ==========
LIABILITIES AND STOCKHOLDERS' (DEFICIT) EQUITY
Current liabilities:
Accounts payable $ 2,099 $ 1,779
Accrued compensation 5,642 6,910
Accrued liabilities 5,670 2,664
Deferred revenue 12,672 14,395
Capital lease obligations 329 471
Bank borrowings 828 505
---------- ----------
Total current liabilities 27,240 26,724
Deferred revenue, net of current portion 3,045 1,417
Capital lease obligations, net of current portion 153 295
Bank borrowings, net of current portion 20,223 18,259
Other long term liabilities 1,679 1,937
---------- ----------
Total liabilities 52,340 48,632
---------- ----------
Stockholders' (deficit) equity:
Common stock 27 27
Additional paid-in capital 342,689 341,329
Notes receivable from stockholders (81) (78)
Accumulated other comprehensive loss (1,663) (1,170)
Accumulated deficit (345,249) (339,009)
---------- ----------
Total stockholders' (deficit) equity (4,277) 1,099
---------- ----------
Total liabilities and stockholders' (deficit)
equity $ 48,063 $ 49,731
========== ==========
eGain Corporation
Condensed Consolidated Statements of Operations
(in thousands, except per share data)
(unaudited)
Three Months Ended Tweleve Months Ended
June 30, June 30,
-------------------- --------------------
2016 2015 2016 2015
--------- --------- --------- ---------
Revenue:
Subscription and support $ 10,828 $ 10,070 $ 42,783 $ 42,311
License 3,807 2,784 14,466 18,325
Professional services 2,987 4,220 12,126 15,277
--------- --------- --------- ---------
Total revenue 17,622 17,074 69,375 75,913
--------- --------- --------- ---------
Cost of subscription and
support 3,065 2,918 12,401 12,082
Cost of license 5 3 29 61
Cost of professional services 2,450 3,442 11,259 16,998
--------- --------- --------- ---------
Total cost of revenue 5,520 6,363 23,689 29,141
--------- --------- --------- ---------
Gross profit 12,102 10,711 45,686 46,772
--------- --------- --------- ---------
Operating expenses:
Research and development 3,939 3,999 16,063 16,042
Sales and marketing 6,311 6,716 27,722 32,703
General and administrative 1,743 1,986 7,774 9,313
--------- --------- --------- ---------
Total operating expenses 11,993 12,701 51,559 58,058
--------- --------- --------- ---------
Income (loss) from operations 109 (1,990) (5,873) (11,286)
Interest expense, net (437) (256) (1,958) (834)
Other income (expense), net 217 (157) 728 11
--------- --------- --------- ---------
Loss before income tax benefit
(provision) (111) (2,403) (7,103) (12,109)
Income tax benefit (provision) 1,488 (530) 863 (320)
--------- --------- --------- ---------
Net income (loss) $ 1,377 $ (2,933) $ (6,240) $ (12,429)
========= ========= ========= =========
Per share information:
Basic net income (loss) per
common share $ 0.05 $ (0.11) $ (0.23) $ (0.47)
========= ========= ======== =========
Weighted average shares used
in computing basic net income
(loss) per common share 27,096 26,890 27,056 26,609
======== ========= ======== =========
Diluted net income (loss) per
common share $ 0.05 $ (0.11) $ (0.23) $ (0.47)
========= ========= ======== =========
Weighted average shares used
in computing diluted net
income (loss) per common
share 27,607 26,890 27,056 26,609
======== ========= ======== =========
Summary of amortization of
purchased intangibles from
businesscombinations in the
costs and expenses above:
Cost of revenue $ 67 $ 67 $ 268 $ 242
Research and development $ 437 $ 437 $ 1,748 $ 1,577
Sales and marketing $ 173 $ 172 $ 690 $ 623
General and administrative $ 18 $ 19 $ 75 $ 68
Summary of stock-based
compensation included in the
costs and expenses above:
Cost of revenue $ 45 $ 67 $ 249 $ 476
Research and development $ 98 $ 142 $ 472 $ 736
Sales and marketing $ 53 $ 153 $ 169 $ 574
General and administrative $ 4 $ 125 $ 298 $ 531
eGain Corporation
GAAP to Non-GAAP Reconciliation Table
(in thousands)
(unaudited)
Three Months Ended Tweleve Months Ended
June 30, June 30,
---------------------- ----------------------
2016 2015 2016 2015
---------- ---------- ---------- ----------
Revenue $ 17,622 $ 17,074 $ 69,375 $ 75,913
Add: Purchase accounting
adjustments to deferred
revenue related to
acquisitions 19 53 77 372
---------- ---------- ---------- ----------
Non-GAAP Revenue $ 17,641 $ 17,127 $ 69,452 $ 76,285
---------- ---------- ---------- ----------
Adjusted EBITDA
Net income (loss) $ 1,377 $ (2,933) $ (6,240) $ (12,429)
Add: Purchase accounting
adjustments to deferred
revenue related to
acquisitions 19 53 77 372
Depreciation and
amortization 459 605 2,057 2,503
Stock-based
compensation expense 200 487 1,188 2,317
Interest expense, net 437 256 1,958 834
Income tax provision
(benefit) (1,488) 530 (863) 320
Amortization of
acquired intangible
assets 695 695 2,781 2,510
Acquisition-related
expenses - - - 844
Severance and related
charges 224 - 959 1,294
---------- ---------- ---------- ----------
Adjusted EBITDA $ 1,923 $ (307) $ 1,917 $ (1,435)
---------- ---------- ---------- ----------
Per share information:
Basic Adjusted EBITDA
per common share $ 0.07 $ (0.01) $ 0.07 $ (0.05)
========== ========== ========== ==========
Diluted Adjusted EBITDA
per common share $ 0.07 $ (0.01) $ 0.07 $ (0.05)
========== ========== ========== ==========
Weighted average shares
used in computing basic
Adjusted EBITDA per
common share 27,096 26,890 27,056 26,609
========== ========== ========== ==========
Weighted average shares
used in computing
diluted Adjusted EBITDA
per common share 27,607 26,890 27,615 26,609
========== ========== ========== ==========
eGain Corporation
Other GAAP to Non-GAAP Supplemental Financial Information
(in thousands)
(unaudited)
Constant
June 30, currency
-------------------- Growth rates
2016 2015 rates [5]
--------- ---------
Total subscription and support
revenue ACV[1]:
Subscription $ 25,437 $ 23,152 10% 17%
Support 18,020 20,027 -10% -1%
--------- ---------
Total subscription and support
revenue ACV $ 43,457 $ 43,179 1% 9%
========= =========
Backlog [2] $ 46,812 $ 42,273 11% 18%
========= =========
Three Months Ended Constant
June 30, currency
-------------------- Growth rates
2016 2015 rates [5]
--------- ---------
New subscription and support ACV [3]
Subscription $ 3,378 $ 1,916 76% 93%
Support 559 374 49% 51%
--------- ---------
Total new subscription and support
ACV $ 3,937 $ 2,290 72% 86%
========= =========
Gross bookings [4] $ 26,900 $ 21,300 26% 42%
========= =========
Revenue:
GAAP Subscription and support $ 10,828 $ 10,070 8% 12%
GAAP License 3,807 2,784
GAAP Professional services 2,987 4,220
--------- ---------
GAAP total revenue 17,622 17,074
Purchase accounting adjustments to
deferred revenue related to
acquisitions 19 53
--------- ---------
Non-GAAP revenue $ 17,641 $ 17,127 3% 8%
========= =========
Cost of revenue:
GAAP subscription and support $ 3,065 $ 2,918
Add back:
Depreciation and amortization (288) (364)
Amortization of acquired
intangible assets (67) (67)
Severance and related charges - -
--------- ---------
Non-GAAP subscription and support $ 2,710 $ 2,487
========= =========
GAAP professional services $ 2,450 $ 3,442
Add back:
Depreciation and amortization (37) (80)
Stock-based compensation expense (45) (67)
Severance and related charges - -
--------- ---------
Non-GAAP professional services $ 2,368 $ 3,295
========= =========
GAAP total cost of revenue $ 5,520 $ 6,363
Add back:
Depreciation and amortization (325) (444)
Stock-based compensation expense (45) (67)
Amortization of acquired
intangible assets (67) (67)
Severance and related charges - -
--------- ---------
Non-GAAP total cost of revenue $ 5,083 $ 5,785 -12% -7%
========= =========
Gross profit:
Non-GAAP subscription and support $ 8,137 $ 7,636
Non-GAAP license 3,802 2,781
Non-GAAP professional services 619 925
--------- ---------
Non-GAAP gross profit $ 12,558 $ 11,342 11% 16%
========= =========
Operating expenses:
GAAP research and development $ 3,939 $ 3,999
Add back:
Depreciation and amortization (53) (76)
Stock-based compensation expense (98) (142)
Amortization of acquired
intangible assets (437) (437)
Severance and related charges - -
--------- ---------
Non-GAAP research and development $ 3,351 $ 3,344 0% 3%
========= =========
GAAP sales and marketing $ 6,311 $ 6,716
Add back:
Depreciation and amortization (52) (62)
Stock-based compensation expense (53) (153)
Amortization of acquired
intangible assets (173) (172)
Severance and related charges (141) -
--------- ---------
Non-GAAP sales and marketing $ 5,892 $ 6,329 -7% 1%
========= =========
GAAP general and administrative $ 1,743 $ 1,986
Add back:
Depreciation and amortization (29) (23)
Stock-based compensation expense (4) (125)
Amortization of acquired
intangible assets (18) (19)
Severance and related charges (83) -
Acquisition-related expenses - -
--------- ---------
Non-GAAP general and
administrative $ 1,609 $ 1,819 -12% -8%
========= =========
GAAP operating expenses $ 11,993 $ 12,701
Add back:
Depreciation and amortization (134) (161)
Stock-based compensation expense (155) (420)
Amortization of acquired
intangible assets (628) (628)
Severance and related charges (224) -
Acquisition-related expenses - -
--------- ---------
Non-GAAP operating expenses $ 10,852 $ 11,492 -6% 0%
========= =========
Adjusted EBITDA
Net income (loss) $ 1,377 $ (2,933)
Add: Purchase accounting
adjustments to deferred revenue
related to acquisitions 19 53
Depreciation and amortization 459 605
Stock-based compensation expense 200 487
Interest expense, net 437 256
Income tax provision (benefit) (1,488) 530
Amortization of acquired
intangible assets 695 695
Acquisition-related expenses - -
Severance and related charges 224 -
--------- ---------
Adjusted EBITDA $ 1,923 $ (307)
--------- ---------
Per share information:
Basic Adjusted EBITDA per common
share $ 0.07 $ (0.01)
========= =========
Diluted Adjusted EBITDA per common
share $ 0.07 $ (0.01)
========= =========
Weighted average shares used in
computing basic Adjusted EBITDA
per common share 27,096 26,890
========= =========
Weighted average shares used in
computing diluted Adjusted EBITDA
per common share 27,607 26,890
========= =========
Twelve Months Ended Constant
June 30, currency
-------------------- Growth rates
2016 2015 rates [5]
--------- ---------
New subscription and support ACV [3]
Subscription $ 7,667 $ 3,595 113% 124%
Support 3,615 3,656 -1% 3%
--------- ---------
Total new subscription and support
ACV $ 11,282 $ 7,251 56% 63%
========= =========
Gross bookings [4] $ 73,900 $ 78,500 -6% 1%
========= =========
Revenue:
GAAP Subscription and support $ 42,783 $ 42,311 1% 4%
GAAP License 14,466 18,325
GAAP Professional services 12,126 15,277
--------- ---------
GAAP total revenue 69,375 75,913
Purchase accounting adjustments to
deferred revenue related to
acquisitions 77 372
--------- ---------
Non-GAAP revenue $ 69,452 $ 76,285 -9% -6%
========= =========
Cost of revenue:
GAAP subscription and support $ 12,401 $ 12,082
Add back:
Depreciation and amortization (1,259) (1,466)
Amortization of acquired
intangible assets (268) (242)
Severance and related charges (36) (4)
--------- ---------
Non-GAAP subscription and support $ 10,838 $ 10,370
========= =========
GAAP professional services $ 11,259 $ 16,998
Add back:
Depreciation and amortization (210) (344)
Stock-based compensation expense (249) (476)
Severance and related charges (26) (269)
--------- ---------
Non-GAAP professional services $ 10,774 $ 15,909
========= =========
GAAP total cost of revenue $ 23,689 $ 29,141
Add back:
Depreciation and amortization (1,469) (1,810)
Stock-based compensation expense (249) (476)
Amortization of acquired
intangible assets (268) (242)
Severance and related charges (62) (273)
--------- ---------
Non-GAAP total cost of revenue $ 21,641 $ 26,340 -18% -14%
========= =========
Gross profit:
Non-GAAP subscription and support $ 32,022 $ 32,313
Non-GAAP license 14,437 18,264
Non-GAAP professional services 1,352 (632)
--------- ---------
Non-GAAP gross profit $ 47,811 $ 49,945 -4% -2%
========= =========
Operating expenses:
GAAP research and development $ 16,063 $ 16,042
Add back:
Depreciation and amortization (261) (306)
Stock-based compensation expense (472) (736)
Amortization of acquired
intangible assets (1,748) (1,577)
Severance and related charges (5) (35)
--------- ---------
Non-GAAP research and development $ 13,577 $ 13,388 1% 4%
========= =========
GAAP sales and marketing $ 27,722 $ 32,703
Add back:
Depreciation and amortization (229) (297)
Stock-based compensation expense (169) (574)
Amortization of acquired
intangible assets (690) (623)
Severance and related charges (718) (843)
--------- ---------
Non-GAAP sales and marketing $ 25,916 $ 30,366 -15% -9%
========= =========
GAAP general and administrative $ 7,774 $ 9,313
Add back:
Depreciation and amortization (98) (90)
Stock-based compensation expense (298) (531)
Amortization of acquired
intangible assets (75) (68)
Severance and related charges (174) (143)
Acquisition-related expenses - (844)
--------- ---------
Non-GAAP general and
administrative $ 7,129 $ 7,637 -7% -4%
========= =========
GAAP operating expenses $ 51,559 $ 58,058
Add back:
Depreciation and amortization (588) (693)
Stock-based compensation expense (939) (1,841)
Amortization of acquired
intangible assets (2,513) (2,268)
Severance and related charges (897) (1,021)
Acquisition-related expenses - (844)
--------- ---------
Non-GAAP operating expenses $ 46,622 $ 51,391 -9% -5%
========= =========
Adjusted EBITDA
Net income (loss) $ (6,240) $ (12,429)
Add: Purchase accounting
adjustments to deferred revenue
related to acquisitions 77 372
Depreciation and amortization 2,057 2,503
Stock-based compensation expense 1,188 2,317
Interest expense, net 1,958 834
Income tax provision (benefit) (863) 320
Amortization of acquired
intangible assets 2,781 2,510
Acquisition-related expenses - 844
Severance and related charges 959 1,294
--------- ---------
Adjusted EBITDA $ 1,917 $ (1,435)
--------- ---------
Per share information:
Basic Adjusted EBITDA per common
share $ 0.07 $ (0.05)
========= =========
Diluted Adjusted EBITDA per common
share $ 0.07 $ (0.05)
========= =========
Weighted average shares used in
computing basic Adjusted EBITDA
per common share 27,056 26,609
========= =========
Weighted average shares used in
computing diluted Adjusted EBITDA
per common share 27,615 26,609
========= =========
[1] Annual Contract Value (ACV) is defined as the annualized value of the
contractual obligations in place at the end of the reporting period.
[2] Backlog presented are derived from the deferred revenue on our balance
sheets plus unbilled and uncollected contractual commitments.
[3] New subscription and support ACV is defined as the annualized value of
new cloud, term license and support contractual obligations signed in the
reporting period.
[4] Gross bookings presented are derived from GAAP revenue plus the change
in Backlog from the beginning and the end of the reporting period.
[5] Constant currency growth rates presented are derived from converting the
current period results for entities reporting in currencies other than U.S.
Dollars into U.S. Dollars at the exchange rates in effect during the prior
period presented rather than the actual exchange rates in effect during the
current period.
MKR Group Investor Relations
Todd Kehrli or Jim Byers
Phone: 323-468-2300
Email: egain@mkr-group.com
