Summary
eGain closed fiscal 2024's third quarter with revenue of $22.35 million, down 2.9% from the prior-year quarter. Gross profit of $15.49 million was flat year over year, and gross margin rose to 69.3%, up 2.3 percentage points. The bottom line improved sharply. Operating income was $0.94 million, up from an operating loss in the prior-year quarter, and operating margin was 4.2%, up 6.4 percentage points. Net income reached $1.49 million, up from a net loss a year earlier, and diluted earnings per share was $0.05, up from a loss per share. Operating cash flow of $1.75 million rose 93.1%. On a non-GAAP basis, net income was $2.6 million, or $0.08 per diluted share, against $1.1 million, or $0.03 per diluted share, a year ago. Adjusted EBITDA was $2.3 million, up from $1.1 million.
The first nine months carried the same pattern: a smaller top line and much better profitability. Revenue was $70.34 million, down 4.1%. Gross profit fell 5.9% to $49.66 million, and gross margin slipped to 70.6%, down 1.3 percentage points. Operating income was $4.78 million, a swing from a loss, with operating margin of 6.8%, up 8.1 percentage points. Net income was $6.27 million and diluted earnings per share was $0.20, both up from losses a year earlier. Operating cash flow was $17.57 million, up 93.5%. Non-GAAP net income was $9.8 million, or $0.31 per diluted share, compared with $4.8 million, or $0.15 per diluted share. Adjusted EBITDA came in at $8.8 million, up from $4.9 million.
Backlog metrics deserve scrutiny. Deferred revenue was $37.50 million at the end of the quarter, and remaining performance obligations were $67.70 million, down 22.5% from the prior-year quarter. A shrinking RPO base puts pressure on future revenue, even as the cost base comes down. Management tied the quarterly revenue decline to the timing of revenue recognition from the Cisco OEM agreement rather than to demand. New logo acquisition through the first nine months grew 50% year over year, helped by AssistGPT, the company's AI knowledge product. eGain also cited a new knowledge win at a U.S. megabank.
For the fourth quarter of fiscal 2024 ending June 30, 2024, management guided non-GAAP net income of $200,000 to $800,000, or $0.01 to $0.03 per share. For the full fiscal year 2024 ending June 30, 2024, it guided non-GAAP net income of $10.0 million to $10.6 million, or $0.32 to $0.34 per share. The company also issued GAAP guidance and a revenue outlook for both periods. The fourth-quarter GAAP outlook is for a loss, while the full-year GAAP outlook is for income. The quarterly projection assumes about 30.5 million weighted average shares, and the full-year projection assumes about 31.6 million.
Risks are familiar for a company of this size. eGain depends on a relatively small number of customers for a substantial portion of revenue, and long sales cycles make deal timing hard to predict. Competition in customer engagement software, including generative AI offerings, remains intense, and currency swings affect reported results. The company bought back roughly 881,000 shares at an average price of $6.26, spending $5.5 million. That supports per-share results but cuts the share count and uses cash. With RPO down and legacy revenue still fading, the AI knowledge story has to keep producing new logos to steady growth.
Forecast
Reported figures
GAAP, from SEC filings| Metric | Q3 FY2024 | Q2 FY2024 | QoQ | Q3 FY2023 | YoY |
|---|---|---|---|---|---|
| Revenue | $22.4M | $23.8M | -6.2% | $23.0M | -2.9% |
| Gross profit | $15.5M | $16.8M | -7.9% | $15.4M | +0.5% |
| Gross margin | 69.3% | 70.7% | -1.3 pp | 67.0% | +2.3 pp |
| Research & development | $6.7M | $6.7M | -0.1% | $6.7M | -0.5% |
| Sales & marketing | $5.4M | $5.3M | +1.9% | $6.8M | -20.3% |
| General & administrative | $2.5M | $2.4M | +2.5% | $2.4M | +1.9% |
| Total operating expenses | $14.6M | $14.4M | +1.1% | $15.9M | -8.6% |
| Operating income (loss) | $938.0K | $2.4M | -61.3% | -$512.0K | +283.2% |
| Operating margin | 4.2% | 10.2% | -6.0 pp | -2.2% | +6.4 pp |
| Net income (loss) | $1.5M | $2.2M | -31.7% | -$372.0K | +501.3% |
| Net margin | 6.7% | 9.2% | -2.5 pp | -1.6% | +8.3 pp |
| Diluted EPS | $0.05 | $0.07 | -$0.02 | -$0.01 | +$0.06 |
Risks
Risk Factors state the global economic climate, credit tightening, and government or corporate spending curtailment could cause customers to reduce technology budgets or delay, decrease, or cancel purchases. Total revenue decreased 2.9% in FY2024 Q3 and 4.1% year to date, per reported figures.
Risk Factors state the SaaS only model increases reliance on channel partners and subscription renewals, and revenue recognition over longer periods means declines in new or renewed agreements are felt in future quarters. MD&A states legacy revenue decreased 63% for the three months ended March 31, 2024 and 73% for the nine months ended March 31, 2024, and expects legacy fees to continue to decline.
Risk Factors state revenue and operating results have fluctuated and are likely to fluctuate, and because subscription revenue is recognized over time, downturns may not be immediately reflected. Total revenue decreased 2.9% in FY2024 Q3 and 4.1% year to date, per reported figures.
Risk Factors state the sales cycle can be six months or more, with a large amount of quarterly business coming in the last few weeks or days of each quarter, complicating revenue prediction. Remaining performance obligations decreased 22.5% in FY2024 Q3 versus the prior-year quarter, per reported figures.
Risk Factors state the company derives a substantial portion of revenue from a relatively small number of customers, and the loss of any significant customer or a decline in business with one would materially and adversely affect financial condition and results. The composition of these customers has varied and is expected to continue to vary.
Risk Factors state the customer engagement software market, including generative AI offerings, is intensely competitive and names larger competitors such as Microsoft, Oracle, Salesforce, and ServiceNow. The company expects significant development and operational costs for generative AI, with competitive pressure potentially causing decreased sales volumes, price reductions, and lower gross margins and operating income.
Risk Factors state customers may elect not to renew subscriptions, renew for fewer subscriptions, or renew for shorter contract lengths, and renewal rates may decline due to dissatisfaction, spending cuts, or pricing changes. If customers do not renew or reduce paying subscriptions, revenue will decline.
Risk Factors state employees or contractors have introduced vulnerabilities in and enabled exploitation of IT environments in the past and may do so again. A successful attack could result in theft of proprietary or personal data, contractual disputes, litigation, or regulatory action.
Risk Factors state the invalidation of Safe Harbor and Privacy Shield requires reliance on alternative transfer mechanisms, and a significant repapering exercise is required for updated standard contractual clauses. The company may face enforcement actions or customer reluctance if EEA or UK data transfers are not legitimized.
Risk Factors state AI technologies are complex and rapidly evolving, with uncertain intellectual property ownership and evolving laws that may subject the company to new regulatory scrutiny, litigation, or copyright infringement claims. Compliance costs could increase operating expenses and harm financial condition.
Risk Factors state approximately 46% of the workforce was in India as of March 31, 2024, with about 50% of those employees in research and development. Increased competition for skilled workers in India has caused increased compensation costs, which the company expects to increase in the future.
Risk Factors note EMEA sales were 22% and 21% of revenue for the three and nine months ended March 31, 2024, exposing the company to currency, GDPR, and geopolitical risks. MD&A reports foreign exchange rate fluctuation increased total revenue by $226,000 in the quarter and $999,000 year to date.
Risk Factors state growth depends on expanding the sales force and retaining highly trained sales and marketing personnel. MD&A reports sales and marketing expense decreased 20% for the three months ended March 31, 2024 and 33% for the nine months ended March 31, 2024, which may affect execution.
Risk Factors state directors and executive officers beneficially owned approximately 33% of outstanding capital stock as of March 31, 2024, with CEO Ashutosh Roy owning approximately 29%. This concentration gives insiders significant control over stockholder votes and corporate transactions.
SaaS KPIs
All quarters →Remaining Performance Obligations
SaaS Revenue
Operating Cash Flow Margin
Total SaaS and Professional Services Revenue
Adjusted EBITDA
Non-GAAP Income from Operations
Cash Provided by Operations
Non-GAAP Net Income
Summary, forecast, risks and KPIs are extracted from EGAIN Corp's SEC filings for Q3 FY2024 (10-Q / 10-K and the 8-K earnings release); GAAP figures in the summary are checked against the reported XBRL data. They can contain errors; the filings are authoritative. Processed Oct 2, 2026.