EGAN - Earnings call transcript Q1 2018

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Operator

Good day and welcome to the eGain Fiscal 2018 First Quarter Financial Results Conference Call. Today's conference is being recorded. At this time, I'd like to turn the conference over to Jim Byers of MKR Group. Please go ahead, sir.

Jim Byers

Thank you, operator and good afternoon, everyone. XXXX financial fiscal conference eGain's to first results quarter call. Welcome

Chief call Eric Ashu today the Executive Smit. are Officer, On Financial eGain's Officer, Chief Roy; and

Before financial which contain that expectations, beliefs, remind management we objectives, make performance. management's like regarding and conference future will statements this operational call everyone forward-looking certain plans begin, I'd and during to

such expect anticipate intend, statements Forward-looking believe, as are generally preceded plan, similar by expressions. words or

Commission. XXXX. Litigation These Harbor Safe results the statements provisions statements, in with Reform could by these Act a the protected Securities reports or of XX, affect could as cause conference to risks of are statements subject in detailed differ actual in Forward-looking today, of results of on any are Information update and that forward-looking and to eGain's forward-looking publicly is information various obligation respect. that the eGain this assumes November revise are no making contained range to Private and company's wide material Exchange XXXX factors in uncertainties filed the Securities call.

results, will to GAAP non-GAAP income. financial call such we this addition also as operating non-GAAP discuss measures In in certain conference

be financial the over of Ashu will like this GAAP measures the I'd included to now the eGain's non-GAAP of call the that be And found release replay Release CEO, comparable Roy. at link And earnings turn Relations conference with News a press in the to eGain's the with section Website. press directly call eGain's financial earnings measures. available at www.egain.com. Our of also reconciliation Investor historical the can of page tables Relations on Website The release include most Investor to said,

Ashutosh Roy

and up to for SaaS Todd, They executing make is we year. are hello, of well together seeing. to forward finally the are activity a and model and our Head We're that new uniformly we ramped be start good everyone. new excited seem Jim, you, has we're with pleased executing. some about customer off adjustments Thank the our nicely to and our Sales, working starting look with new solutions and to We're

the revenue up was our quarterly to Turning XX% highlights, SaaS year-over-year.

a also million our cash non-GAAP first XXX% from quarter from operations the strong generated we income improvement a operating and saw was We up ago. a in X% $X.X the year

we net transition. As a model cash a pleased great conclusion a the to the in result, mark are end position. quarter It's very our way of to business

this finance, Looking at in targeted our business, logos new most our were and healthcare quarter of retail. verticals; telco,

you as now based. wins new are know our SaaS of All

customer investment, to seeing terms and in of thanks renewal as customer improvement renewals as terms our success rate. expansion, In now retention a we well our are steady

to channels. of disrupt $XX that estimated transition the engagement. of from about is year to Looking called Gartner agent population This worldwide will and analytics million. customer management, The upfront, and at us. knowledge on the new Gartner as CRM market report out to market Quadrant digital agent is Magic customer an from this million XXXX the digital service phone Digital intelligence, phone-centric artificial positions predicts world requirements. broader coming continue X.X

you So, and self-service is automation wave desktops. now ahead. market on can building agent new And digital extreme across to the opportunity the see drive foundation of this AI

them are these these by a is almost for they and outcomes business who proof leveraging their need platform. For times. as partner technologies a part solution of are on challenging enterprises, What a to want, they There disruptive exciting guide what no success. future aspirational proven templates can

to leveraging then cases. steadily enhancing we years feedback to have we XX fashionable. ago. digital customer them started and transformational eGain Then these virtual was used before on solutions it knowledge at we AI deliver and met in enterprises, XXXX, know and with continued assistance you As years technologies Since

sales improve powerful same and the partners observing an to focus drive trends, these sales customers Based As we should exactly last over time, will together with this sales now amazing of few based experience sustain To market and our and target in a brings fit At running the Head activity win refined hit a now. our participating the market front opportunity collaborative customer the that enterprise our which in our has market. a go collaboration for and weeks, broader to success market after we are go from enterprise best us is solution program. expanding our has is approach and new rate. on gain moving moves have must for of nice our Sales on us, channel a partner to this Todd, the more two to me have, ground be toward to put our across enablement and teams. years, better he market the have,

omnichannel eGain eGain desktop. front, enterprise as On a easiest our excite Solve XX market. and solution Solution, functionality rich innovative integrated, unique the with it product and the continues They see digital-first to the

in move In to applies our our business GDPR that though of these from to all addition, kick it, urgency are of compliance of May are the assurance creating like expected among on-premise who cloud compliance in Europe, to clients, GDPR sense to heard now even program. to like who XXXX European I'm would benefit serve a eGain requirements most of requirements have sure GDPR but you consumers,

on to is present digital leaders transmission will want Among other you which to digital Comcast powered about Chicago in I highlights, journey going our upcoming by Digital their from tell December Day, be X. eGain. Finally, AI

us best And with Smit, our our latest visit to As want practices also do register will or Eric website Officer to color attend. around add Financial and always, for if operations, that, I'll and to we clients new our you contact be ask and our finance Chief Eric. more showcasing platform, Please partners. products

Eric Smit

joining Ashu you, We're with us fiscal for start to we're pleased to Thank our pleased today. -- thanks and start XXXX.

revenue and revenue total legacy our For in license. SaaS the quarter, reported we growth health first excluding year-over-year

Financially generated improved the margin see three non-GAAP in Our to solid ended cash this basis time flow market on us year-over-year. on years. and We in us. operating first million we cash puts front of position, this we and net in points a opportunity capitalize operating well-positioned in by quarter large XXX $X.X almost footing over the

to Turning $XX.X excluding legacy for license revenue the year-over-year. total quarter, up our was first XX% million results

Our recurring revenue was $XX.X up million year-over-year. X%

was accounted revenue As last we QX SaaS X% Recurring noted revenue year-over-year. XX% from XX% our recurring support ago quarter. items. catch-up the approximately was up sequentially. call, million $X.X year Breaking revenue the in in of year-over-year our total $X.X items up QX down on Though up recurring revenue X% XX% the legacy components, QX was these revenue revenue $XXX,XXX of revenue excluding million for comparable out included recurring and

accounted license services the legacy which was Our legacy $XXX,XXX $X.X license quarter. revenue down total year-over-year. XX% revenue, million quarter for the year-over-year and of down X% only revenue was up for year-ago from XX% Professional XX% is our revenue comparable in

at margin and was a XX%. gross Now profit ago million non-GAAP the in quarter a of gross year a This comparable $X.X or for for XX% compares $X.X profit looking our margin profit to gross gross million margins, quarter. of gross the gross of

the quarter. breakout type, year quarter our ago X% services the at up from revenue gross of for revenue by for margin margin quarter. year gross recurring quarter look in comparable from the ago gross was margin Professional comparable the the was you XX%, unchanged XX% If

quarter. came at On in operations, million, income decrease XX% the to a non-GAAP basis, for turning $XXX,XXX operating ago operating improved non-GAAP Now in $X.X loss comparable a year to quarter non-GAAP the $XXX,XXX a costs operating operating year-over-year. from of

tax and interest interest comparable year our reported to a down at Looking a on taxes, a and and GAAP was compared the expense per XX% of net ago of million tax diluted in expense basis, share quarter the or benefit year-over-year $XXX,XXX comparable taxes, of or on quarter. year $XXX,XXX GAAP $X.XX we loss $XXX,XXX loss basic a compared $XXX,XXX net quarter. for ago in $X.X $X.XX was to the

Now the balance as compared $X.X during of debt to was down million total sheet cash flows, XX, paid equivalents company XX, XXXX, in XXXX. $XX.X September million turning $XX.X June and of to quarter. million cash as approximately our cash The and

increase but sets Ashu the expecting flow for us payments this positive quarter, up Total XX, accounts flow XXXX, repeat year. million XXXX. operations achieving noted, to cash improved operating not every of being from well was level this from of certain million $X.X timing generated this quarter to we $X.X the compared the As receivable of We at our cash of XX, from a net September at flow guidance and quarter non-renewal June to as million year-over-year. operations $X.X our XXX% cash in benefited

of to DSOs see million improved both revenue quarter, rather up XXs the million mid-XXs at deferred collection revenue XX off and range. as in $XX.X XX XX, first Our the pleased return We're million sheet but it on in very September quarter days $XX.X of historically includes that year. to where our last from QX we've the revenue unbilled XX, this quarter million. level, this efforts of revenue both expect Total XXXX, balance to XX% remains to don't for Deferred our with the DSOs deferred balance of of deferred $XX XXXX. and September as sheet from but days stay was $XX.X

we our reiterating provided guidance, our for expectations Now turning are XXXX. fiscal to previously

excluded revenue than XXXX, growth expect business to of between total perpetual X% less be XX% transition. legacy in and annual XX%. reflecting X% our revenue growth total model excluding from to We've XX% SaaS of as calculation the of legacy continue this we license revenue revenue to We license and to between report our expected fiscal

investor Relations front, upcoming Finally, the Investor will on be at conferences. participating several eGain

next taking in investors XX Select XX will at We November Access Technology with New on be York Next to the some Conference the Craig see of we York. Corporate in November Alpha hope then place the Hallum you week these Day conferences. Roth New at also meeting and day at

We as Roundtable. results. seeing prepared and great your as second to Customer presentations be fiscal event continued forward hosting our you prospective new we look Analyst Plus Day events on of In conjunction open Chicago operator? December report XXXX of remarks event for our an concludes Sales will will on we quarter to in have our on call addition, This This updating will the XX. AI progress now at a and as senior investors the these then from Digital current or we our analysts Day with attend questions, managements Head is some or well as for in including

Operator

we'll first Craig-Hallum. Jeff from Thank ahead. question Please go with Van you. [Operator Rhee instructions] And our take

Austin Williams

on Austin is Jeff. this guys, Hey for

direct XX Just the a days, you last about just and me changed maybe what's pipeline, the there? maybe and XXX Cisco the through over to through channel the what's can channel question around to talk changed

Ashutosh Roy

business of looking we set the looking sources been three been us, about One is as which years at it had sources, ago. at have the we as pipeline two it up for direct more we've historically, all is was So, separate channel.

The other direct sales. was

is is The and do as was now has Todd other mentioned, more the change want to channel was looking that And third where something to selling. accounts. that we collaborative I that he existing

account, opportunities them. existing going you'll through to partners let's we're if and which be all well So, enterprise these an customer is maximize it's sales team, channel going say success as to as driving these have working the opportunities channel,

So is result, we've seeing the in that we're behavior. month as so, been changing last or a what that

something OEM cloud-based the interest in updated, so embedded we is more solution through seeing more and accounts version the as are existing in the we on we've in very, then embedded the we're we're talked have, have the OEM. which side, developing in our out our are seeing and in that's us complementary of to the channel integration and very product been for that good fiscal go-to-market the that rolling past opportunities We driving to we

So those seeing areas where we're interesting two are demand. more

Austin Williams

Okay.

accrued And in sense you can the the give Okay. any of pipeline? growth

Ashutosh Roy

something have been about. talking not That's we that

do So, that. wouldn't to able no, I be

Austin Williams

question Okay. the months duration around XX just or Have another last kind so? typical And duration I specific to or renewals to of of contracts contracts. any guess you the six over I in seen the of change have contracts new

Ashutosh Roy

settled in. what that contract we've we've three-year really seen a is is standard So, of where

well I concerted to a renewals. we've this that as both new for made is something that's I think as towards. know move effort

So that's it's going. definitely that the direction

Austin Williams

Thank Great. you. Okay.

Operator

gentlemen, and thank And have today's time. does and for call it we appears, no participation. questions conclude Ladies we further at this you your this

disconnect. You may now

Ashutosh Roy

you. Thank

eGain (EGAN) 8 Nov 172018 Q1 Earnings call transcript