EGAN - Earnings call transcript Q1 2022

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Operator

Good day, and welcome to the eGain Fiscal 2022 First Quarter Financial Results Conference Call. Today's conference is being recorded. At this time, I would like to turn the conference over to Jim Byers of MKR, Investor Relations. Please go ahead, sir.

Jim Byers

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

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

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

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

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

to operating addition included comparable The results, In historical the the non-GAAP discuss measures reconciliation financial the non-GAAP GAAP with include press of income. earnings release tables measures. as such financial we financial measures directly certain to GAAP non-GAAP will most

conference replay this Relations the earnings eGain's Our of news week. the will website a press release for can page X at Investor phone www.egain.com, on link on be be release found at available and call

with over Roy. the to call said, eGain's to Ashu like turn Now, CEO, that I'd

Ashu Roy

and Thank good you, Jim, everyone. afternoon,

million, is the first good start revenue XX%, very year-over-year fiscal quarter, of to In record off 'XX. are a We growth. we delivered that $XX.X to

revenue we in sales XX% grew marketing XX% by increased Our investment our year-over-year. and SaaS quarterly the quarter and year-over-year,

around on knowledge the nicely of eGain So our powered solution launched raises knowledge building engagement. the hub, bar that recently momentum automation is our business customer

of just knowledge quote, the quote. Gartner main published knowledge good the for that, I the during sales cited, the ago, businesses the of operations agent now because one early we That service. technology are for employee operational seeing of yield getting paused are number had prioritized What keep CX year In in now enhancing stage about are deals all to began analysts in of we coming a experience, life. a and management focus to and is because service them pandemic, is their a statement value and from recently back performance, heightened timing X experience perspectives parallel, report, running, is over marketing and service quite the that starting Investment Our our to automation and again. customer is virtualize is investments customer end results.

now year market are productive. are cohort in late in who now of the increased complete we are our It's the hired reps first last being terms roughly, and of substantially Our And timing good up. trained a and cohort, with all who onboarded, our ramped process of of we the investment. hiring sales second

performance. that's to our starting of in Some show

in wins exciting the logo new quarter. some logos. added to Turning We new

hypergrowth to committed One They well. the as Salesforce We Let platform. crypto in some did QX call them was examples. a me mention were share exchange CRM our business.

existing The and functionality, for of to their Retirement. IBM Health The agents, next won did investment they capabilities last to and critical was The want of new implementing from for just Watson wanted ended providers, the the their are a both this our business. integrations, by competing We I want knowledge state we Salesforce Health, architecture also modernize given proven the communication of up their option. one with their not to departments, nature open BOT security. business X not logos cloud So the other, with a other knowledge knowledge highlight leading but of Department in citizen of but Department them, technology. walk our Department away item

our So while BOT existing unique hub, technology easily leveraging we of with which bring architecture, investments their meet our is their requirements, part BOT your in own IBM.

one, the away of The face-to-face. Department Retirement. They second shift of to interaction to online wanted citizen their interaction more from

secure Our navigation filling. support agency capability engagement and through co-browsing this digital will website retirees form to enable and

I Europe. to company insurance Another is about new want in a fast-growing logo talk

implementing mention an technology knowledge and customer them, decided to of customer years a omnichannel compared capability couple that, expensive deliver eGain particular client when What's digital multiple is For seemed in come logo are less create is to that service advanced is AI. this extra are we differentiated client analytics. to solutions a point on omnichannel had powered And experiences. bundled a point replacing to by about this the this basis an to upcoming telecom decided solution. They will us, demand to implement to back and ago I'll they our face, one sporting when lost we leading omnichannel the to opportunity an an which are last EMEA. solutions, total X sweet with now in those going all years deploying solution capability provider They integrated and delivering global ago. the support we be event, And for be selected

logos. So good, new SaaS of lots enterprise

contact SAP center our we just interest manufacturing. actively our the connectors CRM clients we are prioritizing for starting some seeing of proposition With opportunity continue are clients. With their front, new good market by existing are are SAP, utilities new to we recently serve Genesis campaigns also it mentioning who we alignment. and sell. partner telephony case are and also to client build connectors Genesis. joint partners, for to our from develop base, investing go-to-market in and building joint particularly go-to-market we announced the platforms, connector and of X In in certification, to worth On and and Genesis,

basis. And business Our to our a Cisco Avaya a it's point our and partnership to new to the steady partnership where we see on getting deliver continues new Avaya board partnership good generating expansion. also logos to is are logos starting with deliver now logos. And across on new

interest, partner to are the expect end year. growing interest, FedRAMP seeing as before calendar inbound global SI, we on get to of from we this our something front, receive Finally, is certification. the closer This we inbound

of In global state the the highlighted fact, wins I demand some department the iceberg. earlier, of are tip

providers We we are this are once that expect at certified, many not too there certified time. the category FedRAMP in

after. is us, are and and In already opportunity to are marketing we it have of investment government So that sourcing opportunities. up anticipation our vertical, a bulked we actively we that, in the going significant sales

we for are selling the progress. since On market X about the now Virtual we have Financial launch, Coach front, months very that good making been something

revenue part start March this quarters. momentum. And that our are Our are to to growing signed clients are count. turnkey are in unique off institutions proposition, AI-powered These in aware and especially new unions XX client our team strong as focusing in code coach market coming date, we summarize, SaaS to clients logo for over in is increasingly not are this our solution small Note the on credit financial To wellness enterprise has we of, for banks, all sign-ups a record of year. and new our accelerate market clients. financial for we launch the up 'XX, these a small with To customers. compelling and since fiscal expect their to mid-sized mid-market U.S.

the productive sales in is Our hires first is cohort cohort of and second ramp.

now We and partnerships. our ecosystem out go-to-market with actively connectors are building product

to We expect FedRAMP end the calendar certification our by this of be done year.

to exciting in our Financial around So forward an we Officer, growth to Eric? Eric look financial me ask Chief accelerating and with color products, market. Smit, more all add top-rated that, our let operations. this With our

Eric Smit

Thanks, Ashu, for us joining and thanks, everybody, today.

fiscal we bottom line guidance with top our and results a to noted, Street ahead good off Ashu start that exceeded are and to we're As of very consensus. year new our

to of revenue. at Looking We up of was XX% record double-digit for and revenue generated with financial million, total year-over-year total sequentially. growth year-over-year XX% results. X% revenue $XX.X of XX% $XX.X million, and accounted return revenue our up SaaS a

of $XX.X points up margins. year XX% a non-GAAP Looking gross XX%, profits for was basis XXX profit at gross ago. the or from and gross million quarter margin Gross a

Now The year compared in $XX.X in turning increased to driven investments which by operating at Non-GAAP million million in quarter. primarily $XX.X marketing, the for XX% year-over-year. operations. was the and came quarter increase sales ago costs to

line. XX% compared This per bottom in of income operating in an Non-GAAP million margin our non-GAAP quarter. net to quarter to or year of compares Non-GAAP $X.X at per operating share quarter Looking $X.XX the share. XX% margin $X.XX an or in was the ago net income of was million ago million operating the quarter. or $X.X $X.X income for year the

sheet cash flows. Turning and to balance our

Our balance sheet remains strong.

$X.X Total was million million, XX% million XX% cash cash the year During flow quarter. and the year equivalents from margin flow an or of cash from $XX.X generated $X.X of in a operating ago margin XX%, quarter ago. from the quarter, end of up we operations or at up cash the

to turning metrics. customer Now our

Ashu combination As good is customer renewals. enterprise by highlighted the bookings of expansion in new our the had in a metrics. we improvement This of quarter, key very mentioned, deals and logos, several

Our rates significant sequentially with and the was year QX quarter, to from retention LTM up ago from increased dollar-based churn the no SaaS in net XXX% quarter. in XXX%

and increased million. increased ago ARR RPO and $X number XXX% year The XX% from Our from QX. to up to $XX.X short-term LTM XXX% rate customers the SaaS also expansion of sequentially in quarter million year-over-year increased year-over-year, our XX%

to on and outlook our guidance. financial Now,

As priority I be noted growth. on top call, our will on line focus in year coming last our the

our have awareness marketing market upon we brand front this, continue this to massive opportunity in our from market increase of great see investments early us. penetrate we and based and results of plan further capture to We more investments, our seen share and and sales

and In plan maintain competitive out in increase our product-led advantage R&D to strategy. addition, growth investment our to we build

be in plan scale planned. as processes to invest will that internal the also to needed and systems business We

the in quarter even guidance. bottom drive want making to as we changes updated raising few year. color for last the a I sustainable positive and the top fiscal our start bottom though the highlight QX committed around line and better Before on strong in our investments sharing issued the stock-based for adjusting line fiscal than came revenue remain line to finally, necessary quarter. our expected, some to the growth. guidance, are not we compensation are our And we projected we guidance, increase our outlook Based But guidance annual year, to

resulted As Driven important a stock-based we and line, are attracting updated existing hires. we'll we these stock standards. to grow industry them reviewed This to our new long-term be goals. as equity critical top talent, compensation key our company-wide in to stock-based never has option this it bring incentive up quarter, grants for achieve tool retain before guidelines new and this, attract employees to plans to drive and by to aggressively awards and been using

incentive, new increased able this from by in motivated employees talent high-quality existing recruiting attract from their with feedback managers and stock-based the positive early seeing components are We to offers.

Now, on guidance. to the

between of the loss of of $X.X which $X.X $X.XX we GAAP million, share, $XX.X to million of where second represent to estimate million and fiscal million XX% $X.XX to income approximately to per quarter For $X.XX net XX% million year-over-year. $XXX,XXX. and compensation amortization revenue to approximately XXXX, Non-GAAP per $XX.X of or $X of total a $X.XX of or expense net to would million depreciation share expense $X.XX growth share-based of loss million $X and expect we

loss $X full $XX.X revenue would or compensation a where represent expense net expect to expense of loss $X.XX to XX% XXXX, million, growth XX, a amortization of $XX.X total to between XXXX, and which the and of we loss year-over-year. $X.XX to $XX $X.XX year share, approximately of $XX.X of to depreciation of XX% fiscal approximately net to or we per ending $XX of Non-GAAP million For million share, estimate loss breakeven $XXX,XXX. June GAAP per $X.XX and share-based million, million of

through to the investments, platform record saw continue summary, with base results, and see in the and installed continued And is flow customers. very partner around customer delivered opportunities a sales engagement ecosystem. revenue both in We even resulting expansion our the expanded quarter. bookings, marketing. with and in the sales we're direct off the So start our investment building from and bottom strong We line we our our strong in strong year powered with cash our are momentum to to marketplace, top-rated sales fiscal in knowledge increased pipeline in enterprise our of continued

in our Investor So calendar. Relations at lastly, looking closing,

conferences investor in we participating be week, we be this U.S. last the virtual As CEO announced Tomorrow, will Berenberg X we'll conference. in month. participating

some Thursday, questions. Next November concludes ROTH Operator, Alpha these of be week, in now to you we'll on we conferences. the Tuesday, participating And open on Select prepared XX. will Craig-Hallum November call hope the virtually for Conference, see This Conference We then Technology XX. our remarks. the at

Operator

question And from [Operator the first with line of we'll Tim take Oppenheimer. Instructions] the Horan

Edward Gang

actually This is Gang for Horan. Edward Tim

was your I hear year-end. interested by FedRAMP to Ashu the was -- very comment about certification

demand You could of tip a opportunity? if that you iceberg. mentioned it's I wondering up the quantify size was or

Ashu Roy

I can give Sure. you Yes. color. some

So existing area. government the is -- and what of our the clients space capabilities we agent And improve transformation from how to part going tools. that as so and more into more improving agent experience of digital that figure of investment sort in are seeing self-service the is the trying out as well automation to whole

And one about to agencies. our in ago and going doing talked talking a a automating a citizen then agent knowledge few experience For example, we're AI be of how CIOs of where one as release well. the out and we days again, improving just agencies, with be as press client I'm put keynote engagement federal we going to about the used

is anecdotally are much market as be investment that's in don't the definitely, and at increasing customer our our the local, So engagement stat, but what we yet. area, seeing federal are more seeing well coming certification in citizen as looking FedRAMP from. Plus the just their we seem not really we completed -- confidence when to so activity have and where and the even state state federal that pipeline, and

are people it are FedRAMP to close it we aware they the course, because can see that website. Of on very

confidence of around put opportunity. incremental all added So kind us gives that the together that

Edward Gang

sales And rose a sequentially. the your And could Eric. the was a -- of in and questions for couple maybe CapEx quarter? provide for And the What if revenue just modeling you D&A projection legacy actually year? revenue

wondering So the line rest look was would the year. item what for I the of like cadence on that

Eric Smit

Sure.

last your I'll First to just respond off, question.

There a was So legacy was catch-up a business, correct. you're actually This a for renewal. uptick. the slight customer from

as decline. this will number that look Although, expectation to we is forward, certainly, continue the

So as them cloud. -- at customers we've the moving we're actively stage, legacy discussed this remaining the on working on previous calls, to

internal to I the for have expect decline. year, question -- them then, remainder at have overall, the this the of the move, through we continue that IT when around Some to would but requirements And delayed look the of number CapEx,

Edward Gang

CapEx, D&A.

Eric Smit

yes. Sorry,

So G&A.

So G&A the be the -- clear just for sorry, to on question.

On the G&A -- question, the

Edward Gang

amortization? and meant I D&A depreciation

Eric Smit

Sorry.

Okay.

we $XXX,XXX. a payment year. the from -- quarter, was for just close for for about the expect to and the -- that depreciation amortization quarter and that So again, about $XXX,XXX over And modeling perspective, the

Edward Gang

And CapEx?

Eric Smit

again, was year And $X.X range. CapEx probably just over about the And for $XXX,XXX. in million that

Operator

appears It time. for at are Instructions] back [Operator management no turn closing comments further questions remarks. any additional to or over eGain will this I there call the

Eric Smit

today. Well, thanks, listening everybody, for and thanks, operator,

As got I've investor we've mentioned, conferences. several upcoming

our and the to forward have you. update one opportunity we'll Thank those look you providing to we connect hopefully, you events, we with an when announce So at financial of results. QX

Operator

call. today's conclude does your you disconnect this And now gentlemen, and may lines. Thank you your for Ladies participation.

eGain (EGAN) 10 Nov 212022 Q1 Earnings call transcript