eGain Announces Fiscal 2014 Third Quarter Financial Results

eGain Announces Fiscal 2014 Third Quarter Financial Results 
SUNNYVALE, CA -- (Marketwired) -- 05/06/14 --  eGain (NASDAQ: EGAN)  


 
--  Total quarterly revenue of $18.0 million, up 17% year-over-year
--  Quarterly cloud software revenue up 35% year-over-year
--  Nine months total revenue of $51.4 million, up 26% year-over-year
--  Nine months cloud revenue up 47% year-over year
--  eGain reiterates 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 third quarter
ended March 31, 2014.  
Ashu Roy, eGain's CEO, commented, "Our partner activity continues to
grow, particularly with Cisco. In the quarter, we secured our first
seven-figure Cisco SolutionsPlus deal. Also, with Cisco's recent
announcement of eGain Cloud through SolutionsPlus, we look forward to
tapping cloud-based demand through this channel.   
"From a new business standpoint, we saw a number of deals slip into
the fourth quarter, several of which have since closed.  To improve
forecasting and execution, we have reorganized and strengthened our
sales leadership."  
Fiscal 2014 Third Quarter Results:  
Revenue: Total revenue for the fiscal third quarter was $18.0
million, an increase of 17% on a year-over-year basis. Subscription
and support revenue for the fiscal third quarter was $10.6 million,
an increase of 27% on a year-over-year basis. The cloud portion of
the subscription and support revenue was $7.0 million, an increase of
35% on a year-over-year basis. License revenue for the fiscal third
quarter was $2.5 million, a decrease of 39% on a year-over-year
basis. Professional services revenue for the fiscal third quarter was
$4.9 million, an increase of 62% on a year-over-year basis.  
For the nine months ended March 31, 2014, total revenue was $51.4
million, an increase of 26% from the same period last year.
Subscription and support revenue was $30.3 million, an increase of
30% from the same period last year. The cloud portion of the
subscription and support revenue was $19.8 million, an increase of
47%
 from the same period last year. License revenue was $9.4 million,
an increase of 14% from the same period last year. Professional
services revenue was $11.6 million, an increase of 24% from the same
period last year.  
Gross Profit: Gross profit for the fiscal third quarter was $12.0
million, compared to $10.9 million for the third quarter of fiscal
2013. Gross margin for the fiscal third quarter was 67%, compared to
70% in the third quarter last year. The subscription and support
revenue gross margin for the fiscal third quarter was 79%, compared
to 84% in the third quarter last year.  
For the nine months ended March 31, 2014, gross profit was $34.0
million, compared to $27.7 million for the same period last year.
Gross margin was 66%, compared to 68% for the same period last year.
The subscription and support revenue gross margin was 80%, compared
to 83% for the same period last year.  
Earnings per Share: Net loss for the fiscal third quarter was $1.0
million, or a loss of $0.04 per share on a basic and diluted basis,
compared to net income of $1.0 million, or $0.04 per share on a basic
and diluted basis, for the third quarter of last year. Net loss for
the fiscal third quarter includes stock-based compensation expense of
$470,000 and interest and tax expense of $242,000, compared to
stock-based compensation expense of $225,000 and interest and tax
expense of $137,000 in the third quarter last year.  
For the nine months ended March 31, 2014, net loss was $4.2 million,
or a loss of $0.17 per share on a basic and diluted basis, compared
to net loss of $1.2 million, or $0.05 per share on a basic and
diluted basis, for the same period last year. Net loss for the nine
months ended March 31, 2014 includes stock-based compensation expense
of $1.2 million and interest and tax expense of $519,000, compared to
stock-based compensation expense of $810,000 and interest and tax
expense of $616,000 for the same period last year.  
Cash: Total cash, cash equivalents and restricted cash decreased to
$8.8 million as of March 31, 2014, from $17.2 million as of March 31,
2013. Cash used in operations was $2.5 million for the nine months
ended March 31, 2014, compared to cash provided by operations of $9.0
million for the same period last year.  
Deferred Revenue: Total deferred revenue (which includes both
deferred revenue on the balance sheet of $15.8 million and unbilled
deferred revenue that remains off balance sheet of $15.7 million,
collectively representing contractual commitments that have not been
recognized as revenue) was $31.5 million at March 31, 2014, compared
to $40.8 million at March 31, 2013.  
Fiscal 2014 Guidance: eGain reiterates its fiscal 2014 guidance for
annual total revenue growth of between 20% and 25% and annual cloud
revenue growth of 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) 941-1428 (U.S. toll free) or (480) 629-9665 (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 #4680957. 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 pertaining to Company's partnership with Cisco, statements
referring to organizational changes, statements about the Company's
expected financial results for the fiscal third quarter ended March
31, 2014 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 statements we
make. The risks and uncertainties referred to above include, but a
re
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     Nine Months Ended  
                                       March 31,             March 31,      
                                 --------------------  -------------------- 
                                    2014       2013       2014       2013   
                                 ---------  ---------  ---------  --------- 
Revenue:                                                                    
  Subscription and support       $  10,608  $   8,346  $  30,320  $  23,326 
  License                            2,519      4,098      9,422      8,237 
  Professional services              4,899      3,016     11,631      9,357 
                                 ---------  ---------  ---------  --------- 
    Total revenue                   18,026     15,460     51,373     40,920 
                                 ---------  ---------  ---------  --------- 
  Cost of subscription and                                                  
   support                           2,238      1,355      6,160      3,959 
  Cost of license                       28         34         80        125 
  Cost of professional services      3,716      3,180     11,111      9,095 
                                 ---------  ---------  ---------  --------- 
  Total cost of revenue              5,982      4,569     17,351     13,179 
                                 ---------  ---------  ---------  --------- 
    Gross profit                    12,044     10,891     34,022     27,741 
                                 ---------  ---------  ---------  --------- 
Operating expenses:                                                         
  Research and development           2,668      2,101      7,164      6,193 
  Sales and marketing                8,628      6,027     24,640     17,522 
  General and administrative         1,436      1,852      5,572      4,929 
                                 ---------  ---------  ---------  --------- 
      Total operating expenses      12,732      9,980     37,376     28,644 
                                 ---------  ---------  ---------  --------- 
Income (loss) from operations         (688)       911     (3,354)      (903)
Interest expense, net                  (17)       (99)      (146)      (376)
Other income (expense), net            (77)       256       (355)       306 
                                 ---------  ---------  ---------  --------- 
Income (loss) before income tax                                             
 provision                            (782)     1,068     (3,855)      (973)
Income tax provision                  (225)       (38)      (373)      (240)
                                 ---------  ---------  ---------  --------- 
Net income (loss)                $  (1,007) $   1,030  $  (4,228) $  (1,213)
                                 =========  =========  =========  ========= 
                                                                            
Per share information:                                                      
  Basic net income (loss) per                                               
   common share                  $   (0.04) $    0.04  $   (0.17) $   (0.05)
                                 =========  =========  =========  ========= 
  Diluted net income (loss) per                                             
   common share                  $   (0.04) $    0.04  $   (0.17) $   (0.05)
                                 =========  =========  =========  ========= 
  Weighted average shares used                                              
   in computing basic net income                                            
   (loss) per common share          25,418     24,889     25,316     24,690 
                                 =========  =========  =========  ========= 
  Weighted average shares used                                              
   in computing diluted net                                                 
   income (loss) per common                                                 
   share                            25,418     26,373     25,316     24,690 
                                 =========  =========  =========  ========= 
                                                                            
                                                                            
                                                                            
                                                                            
                             eGain Corporation                              
                   Condensed Consolidated Balance Sheets                    
                               (in thousands)                               
                                                                            
                                                                            
                                                   March 31,     June 30,   
                                                     2014          2013     
                                                 ------------  ------------ 
ASSETS                                            (unaudited)               
Current assets:                                                             
  Cash and cash equivalents                      $      7,769  $     16,206 
  Restricted cash                                          30            29 
  Accounts receivable, net                              9,495        12,307 
  Deferred commissions                                  1,111         1,745 
  Prepaid and other current assets                      1,583         2,377 
                                                 ------------  ------------ 
    Total current assets                               19,988        32,664 
Property and equipment, net                             4,308         3,544 
Deferred commission, net of current portion               336           776 
Goodwill                                                4,880         4,880 
Restricted cash, net of current portion                 1,000         1,000 
Other assets                                              738           672 
                                                 ------------  ------------ 
    Total assets                                 $     31,250  $     43,536 
                                                 ============  ============ 
                                                                            
                         
                                                   
LIABILITIES AND STOCKHOLDERS' EQUITY                                        
Current liabilities:                                                        
  Accounts payable                               $      2,194  $      2,583 
  Accrued compensation                                  4,423         4,339 
  Accrued liabilities                                   1,300         2,478 
  Deferred revenue                                     14,973        15,679 
  Capital lease obligation                                176             - 
  Bank borrowings                                       1,417         2,667 
  Related party notes payable                               -         2,897 
                                                 ------------  ------------ 
    Total current liabilities                          24,483        30,643 
Deferred revenue, net of current portion                  871         4,057 
Capital lease obligation, net of current portion          187             - 
Bank borrowings, net of current portion                 1,250         2,000 
Other long term liabilities                               761           848 
                                                 ------------  ------------ 
    Total liabilities                                  27,552        37,548 
                                                 ------------  ------------ 
Stockholders' equity:                                                       
  Common stock                                             25            25 
  Additional paid-in capital                          330,321       328,552 
  Notes receivable from stockholders                      (89)          (87)
  Accumulated other comprehensive loss                   (997)       (1,168)
  Accumulated deficit                                (325,562)     (321,334)
                                                 ------------  ------------ 
    Total stockholders' equity                          3,698         5,988 
                                                 ------------  ------------ 
    Total liabilities and stockholders' equity   $     31,250  $     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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