Summary
eGain closed fiscal 2026 with a weaker fourth quarter than the prior-year period. Revenue was $22.15 million, down 4.7%. Gross profit was $15.86 million, down 6.0%. Operating income was $1.08 million, down 66.8%. Net income was $1.30 million, down 95.8%. The prior-year quarter's net income was $30.86 million, a figure that reflected a tax benefit. Gross margin was 71.6%, down 1.0 percentage point. Operating margin was 4.9%, down 9.1 percentage points. Operating cash flow was $2.42 million, up 155.9% from a negative $4.32 million in the prior-year quarter. Capital expenditures were $0.10 million, down 55.4%. The quarter's profit decline was much sharper than the revenue decline, and margin compression was the main reason.
For the full fiscal year, the picture was mixed. Revenue was $91.14 million, up 3.1%. Gross profit was $66.85 million, up 7.8%. Operating income was $7.96 million, up 79.7%. Net income was $8.88 million, down 72.5%. Diluted EPS was $0.32, down 71.7%. Gross margin was 73.4%, up 3.2 percentage points. Operating margin was 8.7%, up 3.7 percentage points. Operating cash flow was $21.15 million, up 301.9%. Capital expenditures were $0.62 million, up 9.2%. Deferred revenue was $48.50 million, down 4.0%. Remaining performance obligations were $87.00 million, down 5.0%.
Management highlighted a Gartner recognition. In July 2026, Gartner named eGain a Leader in the first-ever Magic Quadrant for Customer Service Knowledge Management Systems. The company was positioned highest for Ability to Execute and furthest for Completeness of Vision. The filing says eGain sells AI-driven knowledge management to enterprises that want trusted answers for customers, employees, and AI agents. Management expects AI customer revenue to grow as the customer base expands. It also expects professional services revenue to vary with project volume and timing of recognition. The company believes existing capital resources will support current and planned operations for at least the next 12 months.
Risks remain familiar for a SaaS knowledge management vendor. The MD&A cites forward-looking uncertainty and estimates tied to revenue recognition, stock-based compensation, credit losses, goodwill, deferred tax allowance, and legal contingencies. Foreign exchange rate fluctuations between the U.S. dollar, euro, and British pound affected reported revenue. Customer purchasing and payment patterns, renewal timing, contract duration and size, and variable billing cycles can shift deferred revenue and remaining performance obligations. Tax changes, including the Inflation Reduction Act, California's NOL suspension, and the One Big Beautiful Bill Act, add another layer of uncertainty. No goodwill impairment was recorded in fiscal 2026 or 2025.
Forecast
Reported figures
GAAP, from SEC filings| Metric | Q4 FY2026 | Q3 FY2026 | QoQ | Q4 FY2025 | YoY |
|---|---|---|---|---|---|
| Revenue | $22.1M | $22.5M | -1.6% | $23.2M | -4.7% |
| Gross profit | $15.9M | $16.5M | -3.9% | $16.9M | -6.0% |
| Gross margin | 71.6% | 73.4% | -1.8 pp | 72.7% | -1.0 pp |
| Research & development | $7.3M | $7.6M | -3.6% | $7.0M | +4.7% |
| Sales & marketing | $5.6M | $4.6M | +21.2% | $4.6M | +21.3% |
| General & administrative | $1.9M | $2.3M | -18.5% | $2.0M | -8.3% |
| Total operating expenses | $14.8M | $14.5M | +2.0% | $13.6M | +8.4% |
| Operating income (loss) | $1.1M | $2.0M | -46.3% | $3.2M | -66.8% |
| Operating margin | 4.9% | 8.9% | -4.0 pp | 14.0% | -9.1 pp |
| Net income (loss) | $1.3M | $2.4M | -46.0% | $30.9M | -95.8% |
| Net margin | 5.9% | 10.7% | -4.9 pp | 132.8% | -127.0 pp |
| Diluted EPS | $0.05 | $0.09 | -$0.04 | $1.08 | -$1.03 |
Risks
The market for customer engagement software, including generative AI, is intensely competitive with NICE, Verint, KMS Lighthouse, Shelf, Talkdesk, Upland, USU, Five9, Genesys, Microsoft, Salesforce, ServiceNow, and general-purpose AI platforms. eGain is investing significantly in AI, and competitive pressure has resulted and may continue to result in decreased sales volumes, price reductions, and increased operating costs, which could lower revenue, gross margins, and operating income.
Most revenue each quarter comes from recognition of deferred revenue from agreements entered in previous quarters, so declines in new or renewed subscriptions are felt in future periods. Deferred revenue was down 4.0% and RPO was down 5.0% in FY2026 Q4 versus FY2025 Q4, which may signal future revenue pressure.
The sales cycle for eGain's complex, deeply integrated solutions can be six months or more and has lengthened as customer approval processes became more complicated, which has prevented closure of sales believed likely to close. This contributes to quarterly revenue fluctuations; Q4 revenue was down 4.7% versus the prior-year quarter.
Ten largest customers accounted for approximately 56% of total revenue in FY2026, compared with approximately 58% in FY2025, and the largest customer accounted for approximately 15% and 16%, respectively. Loss of any significant customer could materially and adversely affect financial condition and results of operations.
Global economic climate, credit tightening, and government or corporate spending curtailment have caused and may continue to cause customers to reduce technology budgets, delay, decrease, or cancel purchases, or delay payment. EMEA revenue was down 4% in FY2026, and total Q4 revenue was down 4.7% versus the prior-year quarter.
Approximately 44% of workforce was in India as of June 30, 2026, with 57% of India employees in R&D; competition for skilled workers there has increased compensation costs and may continue to do so. Reliance on India also exposes eGain to infrastructure disruptions and U.S.-India trade policy uncertainty, including 2025 tariffs on certain Indian goods and 2026 modifications.
Evolving AI and privacy laws, including the EU AI Act, Colorado AI Act, California ADMT regulations, GDPR, CCPA, and India's DPDP Act, may require transparency, impact assessments, and additional safeguards. Compliance could increase costs, limit functionality or availability of solutions, and lengthen sales cycles.
EMEA represented 21% of FY2026 revenue, and EMEA revenue was down 4% year over year. Geopolitical instability, including the ongoing U.S.-Iran conflict and Russia-Ukraine war, plus tariffs and trade restrictions, could delay purchasing decisions, reduce demand, impair collections, and disrupt operations.
Factors that could harm gross margins include increased third-party software and data center costs, competitive pricing pressure, customer attrition spreading data center costs over fewer customers, and delayed revenue recognition. Q4 gross margin was down 1.0 pp versus the prior-year quarter, though FY2026 gross margin was up 3.2 pp.
SaaS KPIs
All quarters →Remaining Performance Obligations
Remaining Performance Obligations (within one year)
Summary, forecast, risks and KPIs are extracted from EGAIN Corp's SEC filings for Q4 FY2026 (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 1, 2026.