eGain (NASDAQ:EGAN) Releases Earnings Results, Beats Estimates By $0.03 EPS

eGain (NASDAQ:EGAN) issued its quarterly earnings data on Thursday. The technology company reported $0.09 earnings per share for the quarter, topping the consensus estimate of $0.06 by $0.03, FiscalAI reports. The company had revenue of $21.87 million for the quarter, compared to analysts’ expectations of $21.11 million. eGain had a net margin of 9.74% and a return on equity of 11.75%.

Here are the key takeaways from eGain’s conference call:

• First-quarter revenue was $21.9 million, above guidance but down 7% year over year as legacy revenue declined. AI customer revenue rose 7% to $14.4 million, while AI customer ARR grew 11% to $54.5 million and reached 74% of SaaS ARR.
• Management highlighted eGain’s recognition as a leader in Gartner’s first Magic Quadrant for customer service knowledge management, and cited customer examples of improved accuracy, fewer escalations, and reduced misrouted contacts.
• The company reported new customer wins and expansions, while Gartner-related marketing and event-sourced leads increased. Management plans to invest more in marketing and sales development to convert that awareness into pipeline.
• Legacy business revenue fell about 28%, and management expects the legacy business to decline approximately 30% for the full year, with the runoff becoming more pronounced in Q2.
• eGain reiterated full-year guidance, including 8% to 10% growth in AI customer revenue and a target of approximately 20% AI customer ARR growth by year-end, but expects higher sales and marketing spending to reduce near-term profitability. Q2 adjusted EBITDA is forecast at break-even to $500,000.

eGain Price Performance

Shares of eGain stock traded up $0.05 on Friday, hitting $5.95. 120,211 shares of the company’s stock traded hands, compared to its average volume of 194,522. The company has a fifty day moving average of $5.79 and a two-hundred day moving average of $7.36. eGain has a one year low of $5.02 and a one year high of $15.95. The company has a market capitalization of $150.59 million, a price-to-earnings ratio of 21.25 and a beta of 0.82.

Analyst Upgrades and Downgrades

Several brokerages have commented on EGAN. B. Riley Financial reaffirmed a “neutral” rating on shares of eGain in a report on Tuesday, September 8th. Weiss Ratings reissued a “hold (c)” rating on shares of eGain in a research note on Wednesday. Finally, Roth Capital cut eGain from a “buy” rating to a “neutral” rating and decreased their price target for the company from $21.00 to $7.00 in a research note on Tuesday, September 8th. Three analysts have rated the stock with a Hold rating. According to MarketBeat, the company currently has an average rating of “Hold” and an average target price of $6.50.

About eGain

eGain Corporation develops cloud-based software for enterprise knowledge management and customer service operations. Its platform combines artificial intelligence (AI), knowledge management, workflow automation, and analytics to help organizations manage information and support customer interactions.

The company’s products and services include knowledge management systems, conversational AI, digital engagement tools, agent-assistance software, and customer service analytics.