EGAIN Corp Q1 FY2025 earnings call

• Business highlights: New bookings up significantly YOY. Examples of clients include a multibillion-dollar data center builder improving field service engineering productivity and a client expanding use of AI Knowledge Hub. Renewals were good with no significant churn. - Event: Solve 24 event in Chicago in October was successful with clients sharing success stories. Announced eGain AI Agent, a conversational self-service offering using trusted knowledge from eGain Hub and enterprise data connectors to drive customer self-service adoption. - Market trend: Businesses recognizing value of centralized knowledge hub using AI and experts to deliver trusted answers across enterprise.

Total revenue for the first quarter was $21.8 million, down 10% year-over-year. North America accounted for 75% of total revenue. Gross profit was $15.4 million with a gross margin of 70%. For Knowledge customers, SaaS ARR increased 16% year-over-year. Total SaaS ARR for all customers decreased 4% year-over-year but was up 2% sequentially. LTM dollar-based SaaS net retention for Knowledge customers was 103%, up from 98% in the previous quarter, while net retention for all customers was 90%, up from 88%. Net expansion rate was 108% for both Knowledge customers and all customers.

• Fiscal 2025 Q2: Expected total revenue between $22.2 million to $22.6 million. GAAP net loss expected $400,000 to $900,000 or $0.01 to $0.03 per share, non-GAAP net income breakeven to $500,000 or $0.00 to $0.02 per share. - Fiscal year 2025: Reiterated revenue guidance $92 million to $93 million, with SaaS revenue approximately 90% of total. Non-GAAP net income expected $5 million to $6 million or $0.17 to $0.20 per share, GAAP net income breakeven to $1 million or $0.00 to $0.03 per share.

Q: Briefly speak to improvements in go-to-market like sales cycles, RFPs, conversion rates, new bookings quantification, R&D investment, marketing, and geographical splits.

A: Ashu Roy noted RFP pace steady with post-summer pickup. Eric Smit mentioned current quarter a year ago was slow, booking number expected to increase. Ashu Roy discussed marketing impacted by event timing, R&D spend increasing with steady pickup for AI Agent. Eric Smit said North America still engine of growth with revenue decline due to US-based customer losses.

Q: Talk about AI confusion in sales cycle, new competitors, large customers' pipelines, and trial conversion rates.

A: Ashu Roy said market realizing need for more thoughtful AI solutions, new entrants continue, but trend of knowledge centralization positive. More large trials underway, cycle time still 9-12 months for large deals, and conversion of pilots to customers still in favorable ballpark.