eGain Announces Fiscal 2014 Second Quarter Financial Results

eGain Announces Fiscal 2014 Second Quarter Financial Results 
SUNNYVALE, CA -- (Marketwired) -- 02/05/14 --  eGain (NASDAQ: EGAN)  


 
--  Total quarterly revenue of $17.7 million, up 20% year-over-year
--  Quarterly cloud software revenue up 49% year-over-year
--  Six months total revenue of $33.3 million, up 31% year-over-year
--  Six months cloud revenue up 55% year-over year
--  eGain updates guidance for fiscal 2014 annual cloud revenue growth of
    between 35% and 40% year-over-year
--  eGain reiterates guidance for fiscal 2014 annual total revenue growth
    of between 20% and 25% year-over-year

  
eGain (NASDAQ: EGAN), a leading provider of cloud customer engagement
solutions, today announced results for its fiscal 2014 second quarter
ended December 31, 2013. 
Ashu Roy, eGain's CEO, commented, "We made good progress in our
second quarter toward our fiscal 2014 targets. We are seeing a
positive demand shift with larger opportunities in our pipeline and
growing partner leverage, especially through our developing Cisco
SolutionsPlus program. In the near term, this shift is lengthening
our sales cycle, particularly when we are part of a client's larger
digital transformation initiative. As a result, we are adjusting our
annual cloud revenue guidance while reiterating our total annual
revenue guidance."  
Fiscal 2014 Second Quarter Results: 
Revenue: Total revenue for the fiscal second quarter was $17.7
million, an increase of 20% on a year-over-year basis. Subscription
and support revenue for the fiscal second quarter was $10.2 million,
an increase of 31% on a year-over-year basis. The cloud portion of
the subscription and support revenue was $6.7 million, an increase of
49% on a year-over-year basis. License revenue for the fiscal second
quarter was $3.1 million, a decrease of 11% on a year-over-year
basis. Professional services revenue for the fiscal second quarter
was $4.4 million, an increase of 24% on a year-over-year basis. 
For the six months ended December 31, 2013, total revenue was $33.3
million, an increase of 31% for the same period last year.
Subscription and support revenue was $19.7 million, an increase of
32% for the same period last year. The cloud portion of the
subscription and support revenue was $12.8 million, an
 increase of
55% for the same period last year. License revenue was $6.9 million,
an increase of 67% for the same period last year. Professional
services revenue was $6.7 million, an increase of 6% for the same
period last year. 
Gross Profit: Gross profit for the fiscal
second quarter was $11.8 million, compared to $10.5 million for the
second quarter of fiscal 2013. Gross margin for the fiscal second
quarter was 67%, compared to 71% in the second quarter last year. The
subscription and support revenue gross margin for the fiscal second
quarter was 81%, compared to 85% in the second quarter last year.  
For the six months ended December 31, 2013, gross profit was $22.0
million, compared to $16.9 million for the same period last year.
Gross margin was 66%, compared to 66% for the same period last year.
The subscription and support revenue gross margin for the six months
ended December 31, 2013 was 80%, compared to 83% for the same period
last year.  
Earnings per Share: Net loss for the fiscal second quarter was $1.2
million, or a loss of $0.05 per share on a basic and diluted basis,
compared to net income of $641,000, or $0.03 per share on a basic and
$0.02 per share on a diluted basis, for the second quarter of last
year. Net loss for the fiscal second quarter includes stock-based
compensation expense of $394,000 and interest and tax expense of
$91,000, compared to stock-based compensation expense of $281,000 and
interest and tax expense of $265,000 in the second quarter last year. 
For the six months ended December 31, 2013, net loss was $3.2
million, or a loss of $0.13 per share on a basic and diluted basis,
compared to net loss of $2.2 million, or $0.09 per share on a basic
and diluted basis, for the same period last year. Net loss for the
six months ended December 31, 2013 includes stock-based compensation
expense of $740,000 and interest and tax expense of $277,000,
compared to stock-based compensation expense of $585,000 and interest
and tax expense of $479,000 for the same period last year. 
Cash: Total cash, cash equivalents and restricted cash decreased to
$13.5 million at December 31, 2013, from $19.9 million at December
31, 2012. Cash provided by operations was $1.2 million for the six
months ended December 31, 2013 compared to cash provided by
operations of $9.9 million for the same period last year.  
Deferred Revenue: Total deferred revenue (which includes both
deferred revenue on the balance sheet of $20.0 million and unbilled
deferred revenue that remains off balance sheet of $17.7 million,
collectively representing contractual commitments that have not been
recognized as revenue) was $37.7 million at December 31, 2013,
compared to $40.5 million at December 31, 2012. 
Fiscal 2014 Guidance: eGain reiterates its fiscal 2014 guidance for
annual total revenue growth of between 20% and 25% and updates annual
cloud revenue growth from between 40% and 45% to between 35% and 40%. 
Quarterly Conference Call 
 eGain will discuss its quarterly results
today via teleconference at 5:00 p.m. Eastern Daylight Time. To
access the live call, please dial (877) 941-1429 (U.S. toll free) or
(480) 629-9857 (international), and request the "eGain" call. A live
webcast of the call can be accessed from the investors section at
www.egain.com. An audio replay of the conference call can be accessed
at (800) 406-7325 (U.S. toll-free) or (303) 590-3030 (international).
The replay will be available starting two hours after the call and
remain in effect for one week. The required pass code is #4661729. 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 the company's 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, among
other matters, statements about the Company's market opportunities,
statements about the Company's partnership with Cisco, statements
about the Company's expected financial results for the fiscal second
quarter ended December 31, 2013 with respect to total revenue,
subscription and support revenue, license revenue and statements
regarding our fiscal 2014 guidance, including sources of revenue and
business mix. 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 stateme
nts we make. The risks and uncertainties
referred to above include - but are not limited to - 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 annual report on Form 10-K filed on
September 23, 2013, and eGain's quarterly reports on Form 10-Q, 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 Statements of Operations               
                   (in thousands, except per share data)                    
                                (unaudited)                                 
                                                                            
                                  Three Months Ended     Six Months Ended   
                                     December 31,          December 31,     
                                 --------------------  -------------------- 
                                    2013       2012       2013       2012   
                                 ---------  ---------  ---------  --------- 
Revenue:                                                                    
  Subscription and support       $  10,246  $   7,806  $  19,712  $  14,980 
  License                            3,065      3,426      6,903      4,139 
  Professional services              4,354      3,505      6,732      6,341 
                                 ---------  ---------  ---------  --------- 
    Total revenue                   17,665     14,737     33,347     25,460 
                                 ---------  ---------  ---------  --------- 
  Cost of subscription and                                                  
   support                           1,951      1,208      3,922      2,604 
  Cost of license                       26         46         52         91 
  Cost of professional services      3,859      3,012      7,395      5,915 
                                 ---------  ---------  ---------  --------- 
  Total cost of revenue              5,836      4,266     11,369      8,610 
                                 ---------  ---------  ---------  --------- 
    Gross profit                    11,829     10,471     21,978     16,850 
                                 ---------  ---------  ---------  --------- 
Operating expenses:                                                         
  Research and development           2,390      2,142      4,496      4,092 
  Sales and marketing                8,617      5,946     16,012     11,495 
  General and administrative         1,930      1,570      4,136      3,077 
                                 ---------  ---------  ---------  --------- 
    Total operating expenses        12,937      9,658     24,644     18,664 
                                 ---------  ---------  ---------  --------- 
Income / (loss) from operations     (1,108)       813     (2,666)    (1,814)
Interest expense, net                  (37)      (136)      (129)      (277)
Other income (expense), net            (18)        93       (278)        50 
                                 ---------  ---------  ---------  --------- 
Income / (loss) before income                                               
 tax provision                      (1,163)       770     (3,073)    (2,041)
Income tax provision                   (54)      (129)      (148)      (202)
                                 ---------  ---------  ---------  --------- 
Net income / (loss)              $  (1,217) $     641  $  (3,221) $  (2,243)
                                 =========  =========  =========  ========= 
                                                                            
Per share information:                                                      
  Basic net income / (loss) per                                             
   common share                  $   (0.05) $    0.03  $   (0.13) $   (0.09)
                                 =========  =========  =========  ========= 
  Diluted net income / (loss)                                               
   per common share              $   (0.05) $    0.02  $   (0.13) $   (0.09)
                                 =========  =========  =========  ========= 
  Weighted average shares used                                              
   in computing basic net income                                            
   / (loss) per common share        25,356     24,670     25,267     24,593 
                                 =========  =========  =========  ========= 
  Weighted average shares used                                              
   in computing diluted net                                                 
   income / (loss) per common                                               
   share                            25,356     26,099     25,267     24,593 
                                 =========  =========  =========  ========= 
                                                                            
Summary of stock-based compensation included in the costs and               
 expenses above:                                                            
Cost of revenue                  $      85  $      30  $     152  $      59 
Research and development         $      52  $      78  $      99  $     155 
Sales and marketing              $     160  $      90  $     293  $     186 
General and administrative       $      97  $      83  $     196  $     185 
                                                                            
                                                                            
                             eGain Corporation                              
                   Condensed Consolidated Balance Sheets                    
                   (in thousands, except par value data)                    
                                                                            
                                                December 31,     June 30,   
                                                    2013           2013     
                                               -------------  ------------- 
ASSETS                                          (unaudited)                 
Current assets:     
                                                        
  Cash and cash equivalents                    $      12,491  $      16,206 
  Restricted cash                                         29             29 
  Accounts Receivable, net                             9,372         12,307 
  Deferred commissions                                 1,410          1,745 
  Prepaid and other current assets                     1,766          2,377 
                                               -------------  ------------- 
    Total current assets                              25,068         32,664 
Property and equipment, net                            4,323          3,544 
Deferred commission, net of current portion              435            776 
Goodwill                                               4,880          4,880 
Restricted cash, net of current portion                1,000          1,000 
Other assets                                             712            672 
                                               -------------  ------------- 
    Total assets                               $      36,418  $      43,536 
                                               =============  ============= 
                                                                            
LIABILITIES AND STOCKHOLDERS' EQUITY                                        
Current Liabilities:                                                        
  Accounts Payable                             $       2,304  $       2,583 
  Accrued compensation                                 4,147          4,339 
  Accrued liabilities                                  1,433          2,478 
  Deferred revenue                                    18,045         15,679 
  Capital lease obligation                               176              - 
  Bank borrowings                                      1,833          2,667 
  Related party notes payable                              -          2,897 
                                               -------------  ------------- 
    Total current liabilities                         27,938         30,643 
Deferred revenue, net of current portion               1,966          4,057 
Capital lease obligation, net of current                                    
 portion                                                 187              - 
Bank borrowings, net of current portion                1,500          2,000 
Other long term liabilities                              717            848 
                                               -------------  ------------- 
    Total liabilities                                 32,308         37,548 
                                               -------------  ------------- 
Stockholders' equity:                                                       
  Common stock                                            25             25 
  Additional paid-in capital                         329,749        328,552 
  Notes receivable from stockholders                     (89)           (87)
  Accumulated other comprehensive loss                (1,020)        (1,168)
  Accumulated deficit                               (324,555)      (321,334)
                                               -------------  ------------- 
    Total stockholders' equity                         4,110          5,988 
                                               -------------  ------------- 
    Total liabilities and stockholders' equity $      36,418  $      43,536 
                                               =============  ============= 

  
eGain
Charles Messman
VP Finance 
Phone: 408-636-4500 
Email: iregain@egain.com 
MKR Group Investor Relations
Todd Kehrli or Jim Byers
Phone: 323-468-2300
Email: egan@mkr-group.com 
 
 
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