EGAN - Earnings call transcript Q2 2022

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Operator

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

Jim Byers

good and Operator, you, afternoon, everyone. Thank eGain's conference call. to Second Quarter results Financial XXXX Fiscal of Welcome

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

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

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

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

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

Call And Along available phone website posted to the of www.egain.com. of by also site. for lastly, Earnings eGain's investor release presentation week. link the press we Our be Conference at the replay Relations found the on Relations one release clicking can a page updated this of press Investor page earnings eGain's will an be Investor have with release,

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

Ashu Roy

Jim. And you, good Thank everyone. afternoon,

have a good quarter. had We

and We flatness. are rating top-line growth our actually

in sequentially. and up Our grew up the X% sequentially. year-over-year SaaS $XX.X million Quarterly was year-over-year, second X% XX% revenue quarter revenue total and XX%

are increasing and our we which it. deep flux execution an it's on are So speed we into, cycle

me selected A reps tens in new some center They few service the company, At insurance finalist. of they we that knowledge [Indiscernible] recipients moving with share of ago. across our for deploy to this engagement. of go notable were field thousands chosen had customer company quarter. Let it to letter provider, number logos hub plan as contact top years U.S. the and time, another Interestingly, unfortunate agents. the the and

want Avaya. program. their They client our So U.S. this is And to Also, for modernization financial some major win member selected us. conversation I contact hub client, we is have large touch notifications all of with U.S. quarter, to center A interestingly, of services the won interesting proactive, in w of the use part of as them. expanding airline. across couple sweet a partnership this billions points. X. mention platform in they're personalized our a deliver expansions

this is composable bringing architecture of for are clients API capabilities more of ecosystem. is like and which something together One, very unique more experiences we they best-in-class within attractive quite And Our because looking customers interesting. new hub are this. to compose by the an conversation is seeing to

are the The Cisco. noteworthy -- U.S. They contact the we here eGain. footprint is as large want based center customer of second that use a large significantly this utility with to expanding modernization a one is expansion in is are partnership And that I company. Again, expanding mention part of program.

APIs. center using We're progress. and our of while. open front, CRM is our So making on the we've something to -- a from leading we working goal platforms the is And most for good integrate ecosystem which been with contact

new I So here. to three that ones want mention noteworthy are

The is and available out the want hub AppFoundry. to next published have certified one about the service connected is and CX marketplace. is which is we their connector And XX, the now one certified knowledge our to want Genesys. Genesys, one now. The With I bring on I now Genesys knowledge capability, is our talk XX first on third

than knowledge, announced which What is our attractive now, need it certified playing given And the Just across super we new platform, contact as for and CRM for building these connector to really more is contact all CRM Though, is with those most all investments. horizontal easy simple, current This earlier enterprise to our and customers and see companies management time, where connectors the use deploy and our market, CRM with it operational. ServiceNow, are our our and the platform to than partners all platforms. which CRM even we center approach more solution CRM customer a contact is goal have In make and XX today, one our at contact center way, BuiltOn investments. customers platform. center for their across contact alongside are being engagement. knowledge once any plans we we their their leading center underlying execute transformation they our make center is and migration platform we

were big award we're the BT a this that huge in winners deal for our for clients, XXXX. On us. front, Awards in Reality very sole Consumer, last of This November XXXX KM the Interestingly, year. pleased is deal them success won they customer the a and

the have you that moment, that on website. award CareMore go checkout a article If announced the

it's that quarterly. out hyperlinked press release our -- we for our fact, inside the In put to

scale with hub you business will and you impressed, eGain the generate the share, of think that detail I value and they all knowledge they the across. that be at with

center XX,XXX just contact they're year, amazing value was million XX nearly it's really quite handling week say, the over every over inquiries inquiries XX,XXX X.X little million every they getting. agents -- As a

that that's achieved composable. and is hub have knowledge now are fact, is and In for. for accomplish, value asking looking is a What what that that exactly been conversational, operational it's automated, our the they have that business streamlining they able the shared now everyone's modern to this prospects intelligent,

FedRAMP the that's a on have may received authorization. press exciting And us product I for you So news front releases. some story. our great which through us, know We've seen to

best imagined the we And since process authorization came our been gift product private this of have to team. holiday in late to the It's months achieve XX congratulations start our for could road, suite. December. this a long through Just

In us fact, I service want to particularly revenue the call thank this out leadership and team, sponsoring IRS process. team, internal for the leadership in

our as platforms one approved to to continue knowledge we partner tax marketplace. in modernize with authorization are help know, We with of Currently, of experience the them powered very few FedRAMP the solution. the you

us state are sector, our last fit. long cycles from that we into in the are the month, they know, in attractive. in inviting federal, now management, are government mix. are need the opportunities we quite as competitors authorized of markets, digital for FedRAMP FedRAMP knowledge the seeing seeing our knowledge growing sales capability who partners best And as well inbound federal As none we're are that track a understandably on particularly these where we closely focused And and while engagement. And as opportunities good is solution interest

financial that, Smit, this continuing With momentum I'll our operations. to FedRAMP that we're sales we add Chief Eric ecosystem conclusion, marketing second Financial So year. ask our scaled-up of forward capability Eric. and with this in our are authorization, is exciting. our continued half the capability, around and expanding to our building, connectors more that product looking Officer, the In our leadership, color

Eric Smit

joining everybody thanks us and Ashu Thanks, today. for

up As million, of sequentially noted, XX% of total delivered and in X% up was we ahead estimates. revenue year-over-year, Ashu record up quarter $XX.X guidance and XX% year-over-year, the $XX.X consensus total million, for well of revenue accounted XX% our SaaS revenue.

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

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

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

balance the cash flows, Turning operations XX% months remains to cash flow operating of and margin. six for Quarter cash a the $XX.X year, XX% equivalents our flow strong first year from $X.X million cash ended million cash We sheet with our and Second balance ago. of total or up sheet from the fiscal with of

the the mentioned, a improvements by renewals Ashu This as booking as in in customer reflected wins, for metrics, strong expansions metrics and customer well new our the our is highlighted as quarter. customers. with customer quarter existing of to several turning Now

a XXX% SaaS year net rates retention LTM XXX% dollar-based to increased from up ago. Our

SaaS XXX% a ago. LTM year XXX% increased rates Our to expansion from

year-over-year. excluding ARR Our SaaS XX% increased OEM customers,

Our $XX.X million. our increased $XX.X to million. long-term increased year-over-year year-over-year XX% short-term RPO to And XX% RPO

and onto Now, outlook our financial guidance.

As I is last noted top-line call, our our primary on growth. on focus

We upon investing have of and share sales in Based penetrate see marketing to opportunity and brand increased results investments. we awareness continue increase to capture us. positive further early plan this of and we front success, in from our market seen greater the our massive

would positive we I raising updated Based annual Before strong in guidance. for year, and results to on few the our are our like sharing fiscal a highlight our guidance, revenue changes. outlook QX

to while to updating top-line sustainable our make our growth. remaining drive performance necessary also We are reflect bottom-line the investments to guidance year-to-date committed

Now on to the guidance.

not XXXX, has quarter, $XXX,XXX bookings which loaded be the to account the revenue the in that third between Note, fiscal Also days growth in million, to the of start quarter quarter takes XX% we year, fewer this tend approximately XX% $XX.X that's than expected this QX, expect year-over-year. materially new guidance would For note which quarter. back-end revenue this of and more current into represent translates $XX.X to to into million revenue. that to of total with of contribute less calendar

or to be $X.XX $X $XXX,XXX third per net will $X will to depreciation million $X.XX loss a to of $X.XX approximately non-GAAP, quarter the share $X million expect of to compensation and share. expense per X or breakeven GAAP a million a of approximately share. base loss be of amortization loss and expense net million, estimate And loss quarter. We We for

of net the of increase million, $X approximately XXXX, from or amortization of between $XX.X XX% which year-over-year, expense million $X.X million for share. $XXX,XXX loss For of ending to year $XX and estimate our per or a $XX.X of compensation approximately million share, total million $X.XX of revenue previous per to to million to XXth, revenue expense year. loss share-based income guidance, expect XX% an of $X.XX $X $XX $X.XX we June to to non-GAAP $X.XX GAAP fiscal depreciation and where growth represent annual would net the we full million, XXXX,

consecutive second a So of revenue summary, with quarter in saw in continued positive momentum growth. double-digit record we total QX reflecting

continue market on and with investments ecosystem. track sales expand marketing to our We our partner and coverage

increased to and leadership large knowledge Our already customer solutions authorization generating in engagement federal pipeline. and from product business for management government clients. build continues interest are And with our demand activity potential our and recent in agency we increased digital state our seeing FedRAMP momentum,

on can IR be accessed the opportunity, included are this updating market website. model based significant our investor in and our from target the we of recent that So our section QX performance also presentation

years, For our our in one two to define XX%. annual which XX% we rate from revenue interim growth as are targets, raising we to

define as targets, revenue years we from our X long-term rate to XX% to X we annual years, which our growth raising XX%. are For in

meeting remarks, calendar, eGain place more with Conference California. Relations there details will and we be now person. Dana Investor the open the investors XXth you of see Point, and in as Operator, to and at concludes XXth Roth taking the we to presenting questions. call provide will We'll date on March for prepared get in our This Annual Lastly, that hope some closer

Operator

questions. opportunity for pause [Operator moment an Instructions] allow just for We'll everyone to a to signal

We take Baldry first Mr. from our question Roth from Richard will Capital. now

is open. Please line Your ahead. go

Richard Baldry

you're ramp newer about Thanks. sales that's levels Thanks. sales cohorts? What's And well or cohort seeing? the Can progress we then to start made the talk the fiscal 'XX? as second new and your for half productivity as the that building being ones teams longer-termed

Ashu Roy

Yes. here, Ashu Rich. is This Sure.

[Indiscernible] sales that year team, plus, is which holding on year, So that new first the now have fiscal earlier productivity now. hiring we're ready for our fiscal second kind group back of doing the has as to cohort the of been going the we now, steady, core brought which this -- around is the pipeline that's cohort And which well. a The is we this started in good. year;

on-boarding six every for So is months part apart now, and going do we now will year and have training this which the essentially X well. working cadence cohorts fiscal quite

Richard Baldry

going the revenues so about side. are you up an more you there think professional went should revenue things feel services hiring or the line Do one-time that any see than in maybe are the probably And number? that support to like meaningfully quarter swerve costs Are in fairly skew there the acceleration? we to that there

Ashu Roy

take want to do you that? Eric,

Eric Smit

Sure. Definitely Rich. a good point,

the We and well. expectation that are increasing the business investments that increase we see as certainly line PS scale, our that's would

I growth the the the driven But the you on. focusing made like revenue investments think by little some increased there were number that increasing periods that the to we around variations for the drive end that a and point have one year, of that holiday think higher. might contribute being overall, I is the to

Richard Baldry

Do on at fairly but we've stub to long it you. see a those takes about quarters. now maybe that's under a a that into to slow we still are then that a want it you versus see to seen customers get long could still like side, and bit of Cloud come that important this in are transitioned to out what fairly do feel pace sequentially, gone that? down a could do prior disappear? that small, legacy for And but the maintenance It's you phase because multiyear It's talk you some how some year be think or came a revenue little

Ashu Roy

ahead license Eric. Different -- go

Eric Smit

I pushing it the done to year. think we're get certainly within

balance we concentrated. fairly function is of As the remaining we the expect because have see mentioned past, step is in a to what somewhat

or when flattening a move we've meaningful So be they larger accounts two of might then fairly we seen as will one these see before, decline.

So say you we that. of Ashu sort would continue, have further if color that's I'd Petnet the expect to to any but

Ashu Roy

down That stop, XX it would it at just in next months XX% gross and is that whittle we to we we exactly right, that will I probably the probably. venture point, guess ignore by

Richard Baldry

third that implying patterns we're Thanks. Lastly, of feel is can guidance win as sequential the a data flattish again, what are be heads quarter, need a inside thing at you talk number look odds as accelerating the bit to seasonality, the we that the about with growth that ramping. because rates the getting, or at we you -- one-time Do just thinking conservatism? there's are about any which appropriate

Eric Smit

early Rich quarter. from benefited is that in I I've mentioned think the the in we to just QX the in one numbers, reiterate item that really remarks, closing business

from So closed deals the of ended in we had definitely expected. certainly recognizing ahead revenue we quarter up where

to of I think what enterprise we've we're put into the guidance and expectations cycles customers closing for QX, selling the just that many budget annual have are that now.

QX. So in already not of lot stage, bookings in of we really significant numbers, significant modeling recognized QX QX fair this that from on, we're a those the Whereas so that a bookings increase bookings. that at in from because impact aren't the planned the QX expectation upside seeing amount the a revenue happen we a saw already sequential we in

Richard Baldry

the Great. Congrats accelerating on momentum.

Eric Smit

Thank you.

Operator

next We Horan, Oppenheimer. Tim from will from now question take the

Your open. line Please ahead. go is

Tim Horan

little you give on I to bit Can a some don't base where that pretty mostly the that's go guys. just customer had churn more dollar customer potential it net improvement? or that guess, less I overtime? color for you from is the Is to year-over-year And spending churn, much money? retention, more a big is Thanks, customer think

Ashu Roy

Thanks, Tim.

so points both are correct. think I

increased of team customer on investments existing an focus our success about talked we've the ultimately and customers. the think retention I in within our expansion

some you the still is that business think good a churn then, I we certainly, since pleased obviously and from to good are perspective, of contributed may that in at that time, Since to haven't had over quite we a just area. we from number news, year a then. I number reduced fairly underpenetrated, believe that that ago. recall, We continue doing over through likelihood the significant reductions is we churn is as grow for a us had report job think team level that to to the are that so ability least good seen significant my standpoint. comparable we The

Tim Horan

can this we you're a about? to XX% to Can we've to or kind that it or XXX% of talking mean, growth, up get I seen, improve drive continue next, year like

Ashu Roy

line Yes. We sight. of certainly see that as the

again I to certainly we're an improvement that the of we element -- this this hopefully in would business, investments think the metric. making expansion that continued see look

Tim Horan

Great, and of those bottlenecks just when care the so get and and then customer better reduced overall think lastly, customers experiences, do or to is better start digital what better interactivity getting you better can revenue for bottleneck customer growth? have to quality the services or overall industry do and

Ashu Roy

question You're asking very here. big a

people reasonable which recommending limited, lines and In technology in along -- it is the money in sounds doesn't think saying about have because they predict, but bizarre other customer is of the a sound enterprise -- view I management knowledge they're most service. spent here companies which not what stuff very on outside technology, of they're the a of fact for only is one you process only not apps. what The explicitly see much it Gartner have that service. very connectivity really recommending Our is is XXXX digital said is ton customer

conversation, Okay? -- a analogue once What instead the connection, or all And you flows still is legacy through do broken. the move. is of are that you do the cloud realize they pipes you content digital also that, connection. that The have

thing is need and has to you that modern which customer capability then management experience, because intelligence which So better service create drive automated, next is can knowledge the knowledge for the big experience. which customer you conversational the

Tim Horan

to experience? customer What What's really do at bottleneck does that adopting the the to think you and is point? what need industry this better seeing do -- or this

Ashu Roy

I'm again, if report, essentially I'm management, the from digital in management this But knowledge not invest leaders knowledge is not paraphrase, quoting quote says now. right that which Gartner are I'm sure then disproportionately higher them. But I'll investing transformation in in slipping, but being their

extent and all can, but effect, that's cause kind the of don't So the and I to indication. if you know

Tim Horan

Makes sense. you. Thank

Operator

gentlemen, instructions]. and [Operator once Ladies again,

Group. the question Jeff now We from Capital from will Craig-Hallum next take Winfrey,

open. Please go ahead. Your is line

Aaron Spychalla

Hey guys. I This is my on Jeff. questions. Aaron for taking you appreciate

I First capture. around the new question. logo you've some past given in know bounds

some metrics broken if of you that is then looks that far have those curious quarter color versus partners? in direct like kind and Just what more how broadly, Maybe as there? as the down on

Ashu Roy

the question. this for Thanks we we're so the seen, the because really that Yeah, now. really now where you focus seeing have now as -- number as right sharing systematic We're right not biggest enterprise returns is

And quality that at but time, for that get result investment that this not we're so to go at The closing quality in us. for are But our we time. every it's presentation. in the nicely. big focus targeting Eric at we're logos talked it, is like than which logos the closing the logos. able But again of average where this advantage say to time not of new is close hundreds back quarter logos we're numbers not moving to this should it's know the drive ARR customer up and about let's is I

kind as So we that, versus part working it's far the of that's well That's direct and have for Perfect. I makes sense. And to focusing It point. as then say. of good partner? are a where us, second

and of kind think logos, them right continue partner both both sustained, the to we think direct, XX/XX driving are it's them. on and of of I so do I new right around well, now probably

Aaron Spychalla

to. Got helpful. everything's you. management moving the what area that knowledge as as seeing, And That's is obviously far then you're

You've alluded to that.

there future? you what amongst your mix that management we knowledge as towards move like the use how How traditional much do curious care? into change your out you've would the seen revenue versus look Just then skew think the and customer might customers cases

Ashu Roy

Okay. Good question.

the digital. for knowledge, I trend is also think up for but toward it's definitely pretty good

are first. right it's digital is fashion. towards That's are bigger of that, trend out So leaning not now. like the knowledge the what you is It's just opportunities more seeing

Aaron Spychalla

having one talked Last for about of on kind it. those Got per year. the cohorts front, hiring me two you

still that forward? that previously kind you're think I XX% thinking and this Is going the trend year adding is about about capacity. true that you talked of

Ashu Roy

more is that bigger in going But go going a a to way. after number, We're yes. a Definitely, for think I number. than it that. XX% definitely conservative We're

Aaron Spychalla

That's Got helpful. you. Thanks, guys. from That's it me.

Ashu Roy

you. Thank

Operator

back no remarks. Ladies and Instructions]. to for appears or will questions time. like additional management closing the gentlemen, are eGain to at any there It I further [Operator turn conference this

Ashu Roy

to QX thanks Operator, starting everybody taking some out look person in Thanks for getting updating look Quarter. to time roads results listen today, we your you. meetings the coming and to on in to get Thank the the forward -- the and excited update for to you

Operator

call. today's concludes for participation. Thank This you your

You disconnect. may now

eGain (EGAN) 4 Feb 222022 Q2 Earnings call transcript