Earnings call transcript Q4 2023

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Operator

Good day and welcome to the eGain Fiscal 2023 Fourth Quarter and Full Year Financial Results Conference Call. All participants will be in a listen-only mode. [Operator Instructions] After today's presentation, there will be an opportunity to ask questions. [Operator Instructions] Please note, this event is being recorded.

I would now like to turn the conference over to Jim Byers with MKR Investor Relations. ahead. go Please

Jim Byers

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

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

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

and on anticipate, forward-looking words by are statements that such results factors September believe, to call. material of or preceded similar harbor generally and differ information any expect, securities expressions, could Reform company's filed Act of safe the are Information in these in statements by forward-looking of Forward-looking the detailed in results forward-looking XXXX. a XX, are to uncertainties and of Private publicly exchange no statements wide conference subject Litigation plan, with respects. protected making risks as could as contained revise eGain's and is that reports obligation These or actual the the intend, provisions this to in are assumes range update statements Securities today, XXXX, eGain cause affect commission. various

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

investor And earnings page And to be page the phone for Relations release, be conference of eGain's release on Relations call link of release this with a addition, of an will will Investor available eGain's In post the press eGain's egain.com. at the press found website. replay updated we week. one by the lastly, can presentation clicking earnings website Investor along

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

Ashu Roy

environment through difficult Jim, the year hello, despite a fiscal economic We've everyone. solid had and year. you, Thank a

revenue fiscal year-over-year grew $XX XXXX for total X% to million. Our

diluted income of stock share. just net flow non-GAAP per million the fiscal cash bought million, or to while million we above of $X.XX from of good operations own at $XX year And Our still the our generating balance growing cash back year. was $X.X $X.X the for $X.X end million our

as the at acquisition results consensus. as planning are pushed that want and be Looking in what trends, street as decisions quarter our ARR to get ahead fiscal same share I We continued in and from big quarter, the operate dollar multi-million both the back, saw continue market out. our at to several renewals XXXX. to the how impacts good fourth during our customers bottom-line and top clients. guidance existing quarter, I challenging At logo new were Stepping including look see ones, time, the I of to year, we

enterprise As forward. already scrutinizing in you ChatGPT businesses investments were logo how paused and more investments. and announcement ChatGPT of broadly Many definitely acquisition macroeconomic late in challenging retrenching active calendar, were engagement to new AI XXXX, customer they technology environment opportunities would when impacting up an their plans impact all our our their going the know, generative ended assess

contribute from to again, reliable a several of the we prioritizing And we seeing exercise. of would to and their as last serve are and that run are, of source for compliance-ready generative which seem over interestingly, AI hub, learn couple a Now, through assessment knowledge months, businesses to. mostly tools initial them content have see

these systems working At they are which generative looking to time, with AI legacy some of IP are seem seeing capabilities can be to Specifically, generative for play as the be seem now internally. on businesses looking to we well. advantage Those re-platform. enterprises platforms we AI businesses these modern plug and knowledge knowledge they seeing hub where that cannot their take same

generative of experience AI of last the pilot to is quarter. the seems drive trends, essentially knowledge is optimize engagement to of AI-powered seems in resulting X.X RFP that increased this nicely are with importance to be So customer and productivity the and two, elevating And Businesses in us rejuvenating sort their that. beachhead the activity popular What these demand months, for has to for they're looking current business two hubs. volume ramped and us, up which start automation. a

Looking continue clients, them. do to well we our very with at

on website. levels the Our are of on a all-time peer client satisfaction an X at X.X reviews to Gartner scale about up inching high,

in Our well clients both as as invest all to self-service. automation customer across more looking drive to points, strategies assisted agent more are implementing knowledge their touch

Turning to outlook fiscal for XXXX. business

about demand optimistic trend. are We the

mentioned, the opportunities Fortune in. that XXX have several I companies here. And half about in it's compared the talking As see We our last X.X jumped coming see I'm And pipeline. new first months ones up we XXXX. calendar of re-engagement from to in stalled

will believe So we XXXX. do see we global momentum in improving new fiscal that

we However, environment because cautious a continues believe macroeconomic forecasting planning perspective and to remain prudent it's be from the to somewhat uncertain.

continue of couple innovation reflect we like adjustments are invest do prosecute what well slow have quarters, market we and the made sales our with still necessary customer caution through half to in business back view as success that environment opportunities and it these of product we can but our to seems where the past the down. navigating an effectively, the to operation still align Over a as

on London. registrations are are this us and holding sales event, our This Solve all-time excited for annual sharing eGain, have eGain front, is the we we, are On customer an partners. high as and marketing many, for Conference at very which actually six announcing conference successes XX. journeys We'll stories And them, conference, be new clients, of includes clients, capabilities will which customer eGain, demonstrating about at innovation. prospects, we exciting September upcoming in well. with some and and the XX, the

knowledge back up. on working activity, improved based conclude, that market pipeline for is the our To recent hubs believe we

I last engaged now we more pilots, been we in in fact, are months. than RFPs and XX more As in have ever mentioned, the

broader be mindful and economic to the of cautious continue we However, uncertainty.

so, with place invest innovation coming these are in product we have that customer with that feel and to the in. while made, enterprise we and the opportunities us in adjustments ones pursuing are reengaged And that can success operational continue that new we

super if we are to XXth. this you event on excited and us September you Finally, in about we at invite XX Solve London join can

Eric Smit, Chief With financial Officer, to color add around that, Eric? Financial ask I'll operations. our more our

Eric Smit

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

quarter year, $XX QX $XX.X currency. XXXX. guidance was in million, in highlights or X% year-over-year, currency. up million, revenue year or up full revenue full helped constant quarter Let was and guidance. revenue the from million, XX% me down revenue for $XX.X our in for SaaS constant was was getting the year-over-year, before revenue and or $XX.X fourth And for Total X% for sequentially. million, Contribution the $XX,XXX. year-over-year, X% up quarter for fiscal to XX% for year just positive SaaS above and drive total year-over-year. revenue was up some XX% And up into was financial OEM up X% outlook share QX full the our and Cisco this up legacy

total year-ago quarter. accounted North region. In in quarter, revenue QX, of looking at by XX% for the America this revenue up When XX% from

revenue, total year. full a from up For year, of contrast, million, XX% of North QX, XX% was $XX.X In the from was year-over-year, North decrease for million, accounted the year-over-year. total revenue from in up where XX% prior Europe revenue XX% in America America total $X

a quarter. gross and Gross profits year-over-year margins. but for last from fourth gross up non-GAAP the million, compared year at XX% $XX.X for Looking XX% for profit margin to XX% quarter prior gross of was up X% quarter, the

profit million, or margin of a to For fiscal for a of XX% margin prior XX% gross compared year. XXXX, gross $XX.X gross the was

in quarter down at operations, costs Now for quarter, XX% $XX.X reflecting have fourth controls expense in million, year-ago we the turning to million from operating the came non-GAAP implemented. the $XX.X

or at QX, X% up Non-GAAP of last margin quarter for quarter. an fourth in $X.X for or was operating the income million quarter. X% year-ago the the the million Looking year-ago as per net or of non-GAAP income the compared bottom to in $X.XX was per XX% in compared EBITDA our share year-ago quarter. net for $XXX,XXX $X.X non-GAAP $X.XX quarter income and X% margin quarter was Adjusted operating from significantly XX%, for QX line share to diluted

Non-GAAP in was full a fiscal margin year basis per operating the $X.XX basic operating the the margin share fiscal of X% in non-GAAP was for This income $X.XX year. net operating per share on million income to for margin For non-GAAP X% basic of $X.X a an per net on fiscal or year, diluted million XX% share on fiscal for $X.XX fiscal income a prior basis basis. share and year was the a Adjusted an diluted per year. to of to XX% or compared compared $X.XX year. the and on EBITDA $X.X million prior or the prior compares $X.X

Turning to our and sheet flows. balance cash

buying generate of our while We continued operations cash back flows shares from to stock. good

from fiscal million, $X.X cash X% was For the full flow year, operations operating a flow cash or margin.

totaling the program million year. share During Of XXX,XXX available the approximately authorized, fiscal X.X under FY program of our million. we at end under million ‘XX, $XX shares, purchased $XX.X repurchase remain the the

up million Total was balance cash ago. a the $XX.X improvements remains end at the year year and fiscal strong. Our cash sheet million, of $XX.X from

LTM strong saw from as increased on compared due our X%. net year-over-year, in retention North NRR, North for on SaaS increased million year EMEA previous a XX retention Now to our constant continued for have share ARR million two-thirds customer ARR calls, rate, some I during total below year-over-year. turning of to discussed And basis. America bookings hub, total in $X mentioned retention knowledge metric. focus had makes I our the SaaS calls, accounted we We America And increased months. by with markets, as number existing XXX% churn to last looking XXX%, The ARR customers XXX% $XX will up customer in resulting product American total remained while X% of new dropping now of SaaS knowledge renewals renewing deals ARR ago. over was SaaS metrics quarter. the relatively customers a at XXX% for net ARR, dollar-based XX% had customer's on given to our customer base on ARR regional North additional previous while customers the

million, RPO. strong million, in renewals but our at RPO the was the $XX.X renewals X% our again, year-over-year the to with the quarter. due up decreased And but in short-term Total year-over-year, quarter. Looking sequentially, sequentially $XX.X increased to XX% X% strong XX% up closed RPO

our guidance. to turning Now,

of For to the million. $XX expect fiscal we $XX.X between million revenue quarter XXXX, of total first

approximately of Turning we per depreciation million expense to share, of $XXX,XXX to of $X.X to income $XXX,XXX. includes and and expect the GAAP million net bottom QX, approximately amortization $X.XX line, $X.XX stock-based which $X for or compensation

non-GAAP million We to share. net $X.XX per million to income of expect $X.X $X.X or $X.XX

revenue the million, at June fiscal we $X.XX million total million non-GAAP XXXX million, Looking to XXXX, $XX ending full of to $XX between net XX, $X.X income year to of $XX.X $X.XX or income million, where or of expense amortization per approximately $X.X per estimate $X.X $XXX,XXX. $X.X share, depreciation approximately $X.XX and to and GAAP to of $X.XX and of compensation net million share-based share, million, expect we

shares million expect quarter average outstanding, for for of the weighted and at Looking year fiscal first the XX.X approximately ‘XX. full we

can we environment. summary, adjusted operate to operations we a where in have current profitably the our in level So business

strong doing the marketing some right in is to come by developed well, in pipeline. Overall, quarter. is and implemented and event to we positioned Solve We announcements and month. investments continue on our fiscal capitalize London opportunity this sales cash generation. Our share more for customer opportunities existing are track we flow ‘XX. in significant. the as booked plan a the program Innovation XX sheet our evidenced with expanding we on with eGain remain renewals and our well repurchase our is seeing And healthy exciting market the that the in level, at We opportunity to business later at are balance

Annual eGain November We at Craig-Hallum November Alpha on hope in see Annual Relations the XXth. also New will some Select person. with on Invest Conference and York meeting New there York investors Conference the in XXth to XXth on of ROTH you Lastly, calendar, be the

call This concludes for Operator, the our prepared now questions. remarks. we open will

Operator

go We MKM. with the session. begin Instructions] Baldry Please Our will question comes Richard [Operator question-and-answer now ROTH from ahead. first

Richard Baldry

sort signals coming you pausing, included want the Thanks. about that's of interact think either back are analysis talk of demonstration stop APIs, the people getting to capable some the process? about generative of are is talking new accelerate, with telling to RFPs to AI that ability through the are RFP AI Thanks. starting the of When you pipeline the that whatever that it, one engines, sort their or you about of functionality, explicitly

Ashu Roy

Richard. That's exactly right,

of questions knowledge been you plug working in-built there of those I have any in? Do three RFPs in you people or in but have were every AI seeing it what can you two different? months right, asking now because cases, do we're to option up. yet. had cases is of generative with, other not, were Or we generative do platform? pretty they would that an kind have what In RFP you in last But one is So have conversations, else whether sort in been So they of those right? three invest some no come all or can that issued your configurations have single deciding RFPs that lots RFP as something there do, say structured going I not much reissued. that were still the those is

Richard Baldry

takes And with staffed in and RFPs pace and growth running? see costs would RFP the handle and back it go recently the maybe you to What it you adding marketing to them or get now? up some Do streamlined say, volume head counts, of of that you for the back, you're and start your to appropriately like sales should coming feel we to kind signals in time need of side. given some

Ashu Roy

yeah. Yeah,

we're this knittings, sort the close So opportunities. large which staying time is, around, our to of

I next that time, headroom need we'll don't of say headcount. I so add to gives And good more think that this the quarters, couple us for at would

things maybe assuming in to to time ramp, continue So headcount. be the at additional fiscal fourth that quarter, the would look

Richard Baldry

do about of that Is how that opportunities should capital? to about in deploy? to M&A since allocated on you been -- How a it talk do your of Thanks. see? flow And theory you've to much have cash active how back. expect the we think buy stepped up you profitability Can might return be dependent of we buyback

Eric Smit

was good question. That a

I way that's the exactly think evaluating we're it.

area likely exploring think certainly that we is pay environment, this in an to. I inorganic opportunities closer attention will

given that funds at sort execute we about structure, given sheets our to done certainly the comfortable we carefully we'll would with think, current say, we've and balance in run at stock others to having of done and if strong challenges I accelerate given to than want this the in available marketplace, current the the price have current sort cost are that plan the look past. I our of, and But hopefully we've rate the given feel sort more the optimized it is. rate, certainly continuing to possible of where said,

Richard Baldry

how or the AI use maybe, AI table, are our looking that'd versus last, think able you M&A you would looking it be into plug Thanks. much best look in are do think when something you wants the of if of is to sort that in-house breed, the world to do whatever, important of with to functionality of to And interesting? or at, about for, side provide you'd customers around to able be that things being And the bespoke be whichever there other externally? to customer were be work APIs, the

Ashu Roy

Right.

our is that's and is fine (ph), and those [daily place they tune it it applied have we clearly the we but the ourselves, want look not several we I to can worlds. would I of to so core But will necessarily the place innovation. larger around of intend don't they and way are advantage capability, in technology, to for compose but think get to the generative solutions, except the Rich, companies, -- which are believe, there How these going invest things of both our plug one but we And it, the invest of all generative core how knowledge technology high very, own absolutely. So work] not who that market, in different, but in. say, the solutions way connect of of the best all loops prospects have capability, the take -- end Those absolutely. dots for you platform do very improvement we very the the the being want optimization, to most our generative clearly into tightly we their then be and not

the are level So that's we playing at.

have have we'll capability. generative with their connect own way think and then fine to -- someone have I our optimization tuning So the the as may differentiate ability and who and into contextual own to compose

Richard Baldry

when be forward? I to of inside we if revenue recurring any last looking could. there up Maybe The that sort line sequentially one-time-oriented strongly. about careful need one that one, we're quite Was impacts of Thanks. was modeling

Eric Smit

I out the if and variability call, some we you pointed OEM. Cisco to of, from quarter quarter I recall sort as the previous see think, on on do

came the the sort last quarter it given that. to this positive of and resulted that healthy in commentary on extent, business below uptick that side saw So where decline and we'd of journey been what in number quarter, some a we flip heard the the in sort had had was expected we as

comes definitely that the be we quarter. that repeating OEM necessarily that there's coming from So mindful Cisco business of again fluctuation that not would in

make. one the I that's So that call-out would

Richard Baldry

for Thanks help. your Great.

Operator

Our go ahead. Van Craig-Callum. comes Jeff with next Rhee question Please from

Jeff Van Rhee

for my questions. Great, yeah, taking thanks

that's below well on Talk to giving pipeline of see it's that's cetera, et through respects, sequentials the not any for to the into really you that your annual guides guide because stream. you the can me pipeline, I beyond mean out forward what while. to the guide causing commented obviously the it yet put for talk a flat in guide, essentially positive you what you else pilots really be many So the about might are seeing in that you breaking caution.

Ashu Roy

several timing evidence starting some more of predictable we that need macroeconomic the, deals thing challenge is is to deepen question. have question is when have discussion the to opportunities seems quarter where navigate the the those okay, we this going -- little So where sign? this are to in And next is, with right? trying close, is to we're on that's and and so, is the closing process say, but be everything big deals we the more influenced, Yeah, Jeff, to So a the bit fine, agreement cadence closed we still and this right?

Jeff Van Rhee

came look you GPT ones that some deals didn't come then, what took more mean, Okay. Of AI away, of did do it, went do at as did out, of a came kind That's I back. what well? helpful. people and how back, And lot react a froze to choose the things, to learn? customers to mentioned, attractive you they potentially make you to that the those yourself

Ashu Roy

problem? always line and the put that's and [share one could ways good (ph) a It's to effectiveness, the of both believe cost companies generative can exact decided on crossovers it going school with compliance that I the answer. just that, been sense point] don't apply quality over what substitute, they that be the a is there. is I question. seeing I but content that And stores that honest, that GPT thought works don't existing know there's time. you of if so will is of is the there or it, kind have be on we think -- some that's things We GPT -- have, that But that solve they My are capability to on and So is broadly have that right?

Jeff Van Rhee

ebbing And flowing. then kind and just touched partners, Yeah, for I you on Cisco think of helpful. the me, last

feel just a Cisco showing You've of about two that on are key are why, how of about other either outlook Maybe traction and year, key the out? both got for relationships. then the that or worthy and spend your a lot three second you or that talking calling

Ashu Roy

I I [what’s Cisco, think say. that, on Eric, more (ph) anything modest flat wouldn't but, probably your] to kind so of Yeah, it's take? I upside, say flat, than would

Eric Smit

Yeah.

that consistent. seems think I

Ashu Roy

year-over-year. that seen We've

which of are kind -- engagements larger would on is this their So stalled of in that but there invested at have getting you're last they big equally be the few are other the the probably that investments challenged right, large over quarters. SIs, we partners of the yeah, outlook and projects Many time. clients some not with have

as fact, So not I in starting their Maybe much. more engagement. We are see deep have to we think into don't visibility that we are that. into pipeline

talking the be these to really that But been So to in that. insurance think integration are some those perking who have with interesting and well. back companies seem working who the as us, comment and partners, partners wouldn’t to especially financial of -- partnerships do I quite on are services, up banks seem prospects system we

Jeff Van Rhee

Okay. my taking Got it. Great. it. Thanks Appreciate for questions.

Ashu Roy

You're welcome.

Operator

further back I no questions show any the call the turn like would I time, remarks. to management at to this As for over closing

Eric Smit

for call joining and the We conferences in Thanks, investor we'll hopefully operator, QX. Thanks and customer once to then event out of and thanks, our be update some at seeing the today. look very everyone, London close the an you forward we much. upcoming providing

Ashu Roy

Thank you.

Operator

This concludes today. attending the you conference today's for Thank presentation.

now all disconnect. Thank you. may You

eGain (EGAN) 14 Sep 232023 Q4 Earnings call transcript