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Subscription Revenue: $132.0 million, declined 0.6% year over year.
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Professional Services and Other Revenue: $19.7 million, declined 20.4% year over year.
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Total Revenue: $151.7 million, declined 3.7% year over year.
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Non-GAAP Gross Profit: $104.3 million, decreased 4.9% year over year.
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Non-GAAP Gross Margin: 68.8%, down from 69.6% in the prior-year quarter.
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Adjusted EBITDA: $53.6 million, 35.3% margin.
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Net Loss: $381.6 million, includes a non-cash goodwill impairment charge of $369.1 million.
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Adjusted Operating Cash Flow: $21.1 million for Q3, $54.7 million year-to-date.
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Cash and Cash Equivalents: $151.2 million, increased by $9.0 million from the second quarter.
Release Date: January 10, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
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E2open Parent Holdings Inc (NYSE:ETWO) reported a solid increase in subscription revenue compared to the previous quarter, indicating stabilization in their subscription business.
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The company successfully closed several strategically important subscription deals with both existing and new clients, showcasing their ability to attract high-caliber global clients.
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E2open's retention results were positive and consistent with internal targets, suggesting that the company is past peak churn and moving towards industry benchmarks.
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The company is actively incorporating emerging technologies like generative AI into their product suite, enhancing the functionality and appeal of their software solutions.
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E2open has strengthened its executive team with the appointment of a new Chief Strategy Officer and Chief Product and Technology Officer, aiming to accelerate innovation and growth.
Negative Points
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Subscription revenue still declined year over year, although the rate of decline has improved compared to previous quarters.
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Professional Services and Other Revenue saw a significant year-over-year decline of 20.4%, impacting overall revenue performance.
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Total revenue for the fiscal third quarter declined by 3.7% compared to the prior-year quarter, reflecting ongoing challenges in revenue growth.
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The company recorded a substantial non-cash goodwill impairment charge of $369.1 million, contributing to a net loss for the quarter.
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Large deals continue to take longer to close, affecting the timing and realization of potential revenue from these deals.
Q & A Highlights
Q: Can you explain the improvements in subscription billings and deferred revenue, which seem to be up year over year? A: Marje Armstrong, CFO, noted that the year-over-year increase in Q3 was mainly driven by timing related to renewal and billing of large deals. This improvement is expected to normalize in Q4.