eGain, Corp. (NASDAQ:EGAN) Announces Fiscal 2017 First Quarter Financial Results, How Will Investors React?

Leading provider of cloud customer engagement solutions, eGain, Corp. (NASDAQ:EGAN), announced its financial results from Q1, 2017.

SUNNYVALE, CA–(Marketwired – Nov 9, 2016) – eGain ( NASDAQ : EGAN ), a leading provider of cloud customer engagement solutions, today announced financial results for its fiscal 2017 first quarter ended September 30, 2016.

Fiscal 2017 First Quarter Financial Summary

    Total revenue was $14.7 million ($16.0 million on a constant currency basis), compared to $16.5 million in the same quarter a year ago

    Subscription and support revenue was $10.9 million ($11.7 million on a constant currency basis), compared to $10.8 million in the same quarter a year ago

    Professional services revenue was $2.2 million, down from $3.2 million in the prior year quarter, with margin improving to 5% compared to negative 6% in the prior year quarter

    License revenue was $1.7 million, down from $2.4 million in the same quarter a year ago, as the company continued its transition to a SaaS based business

    Gross margin increased to 66%, compared to 61% in the year ago quarter

    GAAP net loss improved to $2.4 million, or $0.09 per share on a basic and diluted basis, compared to a GAAP net loss of $3.2 million, or a loss of $0.12 per share on a basic and diluted basis, for the year ago quarter

    Adjusted EBITDA improved to $75,000, compared to an adjusted EBITDA loss of $769,000 in the year ago quarter

    Cash flow generated from operations in the first quarter improved to $2.4 million, compared to cash flow used in operations of $5.6 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 $1.9 million, up 63% year over year (82% on a constant currency basis)

    New subscription and support ACV (non-GAAP), which is the annualized value of new cloud, support and term license contractual obligations signed in the quarter, was $2.1 million, up 15% year over year (30% on a constant currency basis)

Ashu Roy, eGain CEO, commented, “We are pleased with the continued acceleration in our shift to a SaaS based business model. As a result, during the quarter we saw a decrease in license revenue, reflecting our business mix shift to a SaaS model.”

Eric Smit, eGain CFO, added, “As we successfully transition to a SaaS based business, we drove significant year-over-year improvement in gross margin and net loss in the first quarter. Despite the reduction in quarterly revenue, we achieved breakeven on an adjusted EBITDA basis and generated significant improvement in our cash flow from operations in the first quarter compared to 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 Standard Time. To access the live call, please dial (888) 278-8471 (U.S. toll free) or (913) 312-1471 (international), and give the participant pass code 3718892. 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 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 an omnichannel world. To learn more about eGain, visit www.egain.com.

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 SaaS based business, 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 annual report on Form 10-K filed on September 13, 2016, which is 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.

eGain, the eGain logo, and all other eGain product names and slogans are trademarks or registered trademarks of eGain Corp. in the United States and/or other countries. All other company names and products mentioned in this release may be trademarks or registered trademarks of the respective companies.

Original Source

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Shares of eGain, Corp. (NASDAQ:EGAN) are actively moving -3.92% thus far today on the news and have traded in the range of $2.34 – 2.55 during the session.  A number of research firms have recently weighed in on the stock, providing future price targets. The covering firms currently have a consensus one-year price target of $3.58 on the stock.  This is according to brokerage analysts polled by Thomson Reuters First Call.  This is the average number from the individual targets provided by the firms.  Analysts are projecting earnings per share of $-0.05 for the next fiscal quarter.  For the current year, analysts are predicting earnings of $-0.21 per share according to First Call.

In looking at where the stock is trading on a technical level, the stock is trading -15.79% away from its 50-day moving average of $2.91.  Based on the most recent available data, the equity is -51.00% off of its 52-week high of $5.00 and +15.57% away from its 52-week low which is $2.12.

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Today, the stock opened at $2.55 and the last bid at the time of writing stood at $2.45.  During the session thus far, the equity dipped down to $2.34 and touched $2.55 as the high point eGain, Corp. (NASDAQ:EGAN) has a market cap of $66.41M and has seen an average daily volume of 27,337 over the past three months.

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