In This Article:
Release Date: November 12, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
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eGain Corp (NASDAQ:EGAN) reported first quarter revenue and profitability ahead of consensus estimates.
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The company experienced significant year-over-year growth in new bookings, particularly in the AI knowledge business.
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eGain Corp (NASDAQ:EGAN) saw good renewals with no significant churn during the quarter.
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The company is witnessing a trend towards centralized knowledge hubs, which is positively impacting their market position.
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eGain Corp (NASDAQ:EGAN) launched a new AI agent solution aimed at improving customer self-service, which is expected to drive significant adoption.
Negative Points
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Total revenue for the first quarter was down 10% year over year, primarily due to the loss of two large clients in the conversation and analytics business.
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Gross margin decreased to 70% from 73% a year ago, indicating a decline in profitability.
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Non-GAAP net income decreased to $1.3 million from $3.8 million in the year-ago quarter.
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Operating cash flow margin dropped to 4% from 8.1% in the previous year.
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The company anticipates a net loss for the second quarter of fiscal 2025, reflecting ongoing financial challenges.
Q & A Highlights
Q: Can you provide an update on the improvements in your go-to-market strategy, specifically regarding sales cycles, RFPs, and conversion rates? A: Ashu Roy, CEO: The RFP pace remains steady, with a noticeable pickup in October following the summer slowdown. Eric Smith, CFO: Compared to a year ago, we've seen significant improvement in bookings, although this quarter remains seasonally slow. We expect bookings to increase as the year progresses.
Q: Could you elaborate on the additional investments in marketing and R&D, and why S&M expenses were down sequentially? A: Ashu Roy, CEO: Marketing expenses are influenced by seasonality, with spikes during major events like the one in October. R&D spending is increasing as we prepare for new announcements, such as the AI agent in early 2025. Eric Smith, CFO: We've made good progress with our investments, and while there might be some incremental spending, we've started the year well.
Q: How is the company progressing in focusing on generative AI products, and where are you in terms of product and market development? A: Ashu Roy, CEO: We are advanced in product development, having invested in it for the past two years. Our AI agent is a result of this investment. We see a sequential process where product innovation leads to a growing pipeline, and we expect to invest more in market development in the second half of the fiscal year.