8-K - EGAN - Equibles

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities and Exchange Act of 1934

Date of Report: May 11, 2021

(Date of earliest event reported)

eGain Corporation

(Exact name of registrant as specified in its charter)


Delaware	001-35314	77-0466366

(State or other jurisdiction	(Commission	(I.R.S. employer
of incorporation)	File Number)	Identification Number)

1252 Borregas Avenue, Sunnyvale, California 94089

(Address of principal executive offices, including zip code)

(Former Name or Former Address, if Changed Since Last Report)<br><br>
(408) 636-4500<br><br>(Registrant’s telephone number, including area code)<br><br>(Former Name or Former Address, if Changed Since Last Report)<br><br>

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

◻ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

◻ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

◻ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

◻ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter). Emerging growth company ◻

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ◻

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of exchange on which registered
Common Stock, par value $0.001 par value	EGAN	The Nasdaq Stock Market LLC

Item 2.02Results of Operations and Financial Condition.

The following information in this Item 2.02 is being furnished and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section, or incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing.

On May 11, 2021, eGain Corporation (“eGain” or the “Company”) issued a press release announcing results for its fiscal third quarter March 31, 2021. The press release contains forward-looking statements regarding eGain and includes cautionary statements identifying important factors that may cause actual results to differ materially from those anticipated. A copy of the press release is furnished herewith as Exhibit 99.1.

Item 9.01 Financial Statements and Exhibits.

(d) Exhibits.


EXHIBIT NO.		DESCRIPTION
99.1		Press release, dated May 11, 2021, of eGain Corporation

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

<br><br>		<br><br>
<br><br>Date: May 11, 2021		<br><br>eGain Corporation
		<br><br>
	By:	/s/ Eric N. Smit
		Eric N. Smit<br><br>Chief Financial Officer <br>(Duly Authorized Officer and<br><br>Principal Financial and Accounting Officer)

Exhibit 99.1

eGain Reports SaaS Revenue Growth of 19% for First Nine Months of Fiscal 2021

Sunnyvale, CA (May 11, 2021) – eGain (NASDAQ: EGAN), a leading provider of digital customer engagement solutions, today announced financial results for its fiscal 2021 third quarter ended March 31, 2021.

“We delivered strong financial results in the third quarter, ahead of guidance and street consensus” said Ashu Roy, eGain’s CEO. “Our SaaS logo wins were up more than 100% year over year for both the third quarter and year to date. We grew the number of our million-dollar SaaS customers by 63% year over year. In March, we launched our Virtual Financial Coach, an AI-powered proactive engagement solution. It is now being piloted by over 25 credit unions across the country.”

Fiscal 2021 Third Quarter Financial Highlights

●	SaaS revenue was $16.9 million, up 14% year over year.
●	Total revenue was $19.7 million, up 8% year over year.
---	---
●	Subscription non-GAAP gross margin was 82%, up 400 basis points year over year.
---	---
●	Total non-GAAP gross margin was 76%, up 500 basis points year over year.
---	---
●	GAAP net income was $1.3 million, or $0.04 per diluted share, compared to GAAP net income of $1.9 million, or $0.06 per diluted share, in the year ago quarter.
---	---
●	Non-GAAP net income was $1.6 million, or $0.05 per diluted share, compared to non-GAAP net income of $2.4 million, or $0.07 per diluted share, in the year ago quarter.
---	---
●	Total cash and cash equivalents were $53.4 million, compared to $40.7 million, in the year ago quarter.
---	---

Fiscal 2021 First Nine Months Financial Highlights

●	SaaS revenue was $49.0 million, up 19% year over year.
●	Total revenue was $58.0 million, up 8% year over year, with 92% being subscription based.
---	---
●	Subscription non-GAAP gross margin was 82%, up 400 basis points year over year.
---	---
●	Total non-GAAP gross margin was 76%, up 500 basis points year over year.
---	---
●	GAAP net income was $4.9 million, or $0.15 per diluted share, compared to GAAP net income of $5.1 million, or $0.16 per diluted share, in the year ago quarter.
---	---
●	Non-GAAP net income was $6.2 million, or $0.19 per diluted share, compared to non-GAAP net income of $6.7 million, or $0.21 per diluted share, in the year ago quarter.
---	---
●	Cash provided by operations was $5.0 million, or 9% operating cash flow margin.
---	---

Fiscal 2021 Financial Guidance

For the fiscal 2021 full year ending June 30, 2021, eGain expects:

●	SaaS revenue of between $66.0 million to $66.4 million, which would represent growth of 16% to 17% year over year.
●	Total revenue of between $77.3 million to $77.9 million, which would represent growth of 6% to 7% year over year.
---	---
●	GAAP net income of $4.4 million to $5.3 million, or $0.13 to $0.16 per share.
---	---
●	Non-GAAP net income of $6.2 million to $7.1 million, or $0.19 to $0.22 per share.
---	---

Guidance Assumptions:

●	Includes stock-based compensation expense of approximately $500,000.
●	Includes depreciation and amortization of approximately $100,000.
---	---
●	Weighted average shares outstanding of approximately $32.7 million.
---	---

Non-GAAP Financial Measures

This press release includes certain non-GAAP financial measures as supplemental information relating to our operating results, including non-GAAP net income and non-GAAP gross margin. Such non-GAAP financial measures are adjusted for stock-based compensation expense and amortization of acquired intangible assets. Non-GAAP results are presented for supplemental informational purposes only and should not be considered a substitute for financial information presented in accordance with generally accepted accounting principles, and may be different from non-GAAP measures used by other companies. eGain’s management uses these non-GAAP measures to compare the Company’s performance to that of prior periods for trend analysis and for budgeting and planning purposes. eGain believes that the use of these non-GAAP financial measures provides an additional tool for investors to use in evaluating ongoing operating results and trends and in comparing the Company’s financial measures with other software companies, many of which present similar non-GAAP financial measures to investors, and that it allows for greater transparency with respect to key metrics used by management in its financial and operational decision-making. Reconciliation tables of the most comparable GAAP financial measures to the non-GAAP financial measures used in this press release are included with the financial tables at the end of this release. eGain urges investors to review the reconciliation and not to rely on any single financial measure to evaluate the Company’s business.

Conference Call Information

eGain will discuss its fiscal 2021 third quarter results today via teleconference at 2:00 p.m., Pacific Time. To access the live call, dial 800-367-2403 (US and Canada) or +1 334-777-6978 (international) and give the participant passcode 6020236. A live and archived webcast of the call will also be accessible on the “Investor relations” section of the Company’s website at www.egain.com. In addition, a phone replay will be available approximately two hours following the end of the call and will remain available for one week. To access the replay dial-in information, please click here.

About eGain

eGain customer engagement solutions deliver digital transformation for leading brands – powered by virtual assistance, AI, knowledge, and analytics. Our comprehensive suite of applications helps clients deliver memorable, digital-first customer experiences in an omnichannel world. To find out more about eGain, visit http://www.egain.com.

Cautionary Note Regarding Forward-Looking Statements.

This press release contains forward-looking statements within the meaning of the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements are based on current expectations and include our expectations with respect to revenue and GAAP and non-GAAP net income for the fiscal year ending June 30, 2021. The achievement or success of the matters covered by such forward-looking statements, including future financial guidance, involves risks, uncertainties and assumptions, many of which involve factors or circumstances that are beyond our control. If any such risks or uncertainties materialize or if any of the assumptions prove incorrect, the Company’s actual results could differ materially from the results expressed or implied by the forward-looking statements we make, including our ability to achieve our targets for the fiscal year ending June 30, 2021. The risks and uncertainties referred to above include, but are not limited to: risks associated with current economic uncertainties tied to the COVID-19 pandemic, including but not limited to its effect on customer demand for the Company’s products and services and the impact of potential delays in customer payments; risks associated with new product releases and new services and products features; risks that customer demand may fluctuate or decrease; risks that we are unable to collect unbilled contractual commitments, particularly in the current economic environment; risks that our lengthy sales cycles may negatively affect our operating results; currency risks; our ability to capitalize on customer engagement; risks related to our reliance on a relatively small number of customers for a substantial portion of our revenue; our ability to compete successfully and manage growth; our ability to develop and expand strategic and third party distribution channels; risks related to our international operations; our ability to continue to innovate; our strategy of making investments in sales to drive growth; general political or destabilizing events, including war, conflict or acts of terrorism; the effect of evolving domestic and foreign government regulations, including those addressing data privacy and cross-border data transfers; and other risks detailed from time to time in eGain’s public filings, including eGain’s annual report on Form 10-K filed on September 11, 2020 and subsequent reports filed with the Securities and Exchange Commission, which are available on the Securities and Exchange Commission’s web site at www.sec.gov. These forward-looking statements are based on current expectations 2

and speak only as of the date hereof. The Company assumes no obligation and does not intend to update these forward-looking statements, except as required by law.

eGain, the eGain logo, and all other eGain product names and slogans are trademarks or registered trademarks of eGain Corp. in the United States and/or other countries. All other company names and products mentioned in this release may be trademarks or registered trademarks of the respective companies.

MKR Investor Relations

Todd Kehrli or Jim Byers

Phone: 213-277-5550

Email: [email protected]

eGain Corporation

Condensed Consolidated Balance Sheets

(in thousands)

(unaudited)


	March 31,			June 30,
	2021		****	2020
ASSETS
Current assets:
Cash and cash equivalents	$	53,413		$	46,609
Restricted cash		7			6
Accounts receivable, net		16,016			22,708
Costs capitalized to obtain revenue contracts, net		1,270			1,066
Prepaid expenses		1,945			2,514
Other current assets		647			617
Total current assets		73,298			73,520
Property and equipment, net		774			713
Operating lease right-of-use assets		2,604			2,962
Costs capitalized to obtain revenue contracts, net of current portion		2,511			2,380
Intangible assets, net		—			26
Goodwill		13,186			13,186
Other assets		807			918
Total assets	$	93,180		$	93,705
****
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable	$	1,112		$	2,429
Accrued compensation		7,413			7,916
Accrued liabilities		3,030			3,423
Operating lease liabilities		1,768			1,753
Deferred revenue		31,704			36,644
Total current liabilities		45,027			52,165
Deferred revenue, net of current portion		3,814			4,826
Operating lease liabilities, net of current portion		933			1,385
Other long-term liabilities		817			688
Total liabilities		50,591			59,064
Commitments and contingencies
Stockholders' equity:
Common stock		31			31
Additional paid-in capital		377,115			374,399
Notes receivable from stockholders		(92)			(90)
Accumulated other comprehensive loss		(1,308)			(1,631)
Accumulated deficit		(333,157)			(338,068)
Total stockholders' equity		42,589			34,641
Total liabilities and stockholders' equity	$	93,180		$	93,705

eGain Corporation

Condensed Consolidated Statements of Operations

(in thousands, except per share data)

(unaudited)


	Three Months Ended						Nine Months Ended
	March 31,						March 31,
	2021		****	2020		****	2021		****	2020
Revenue:
Subscription	$	18,078		$	16,919		$	53,525		$	48,834
Professional services		1,665			1,435			4,514			4,865
Total revenue		19,743			18,354			58,039			53,699
Cost of revenue:
Cost of subscription		3,341			3,739			9,811			11,046
Cost of professional services		1,505			1,761			4,378			5,012
Total cost of revenue		4,846			5,500			14,189			16,058
Gross profit		14,897			12,854			43,850			37,641
Operating expenses:
Research and development		4,371			4,205			13,384			12,255
Sales and marketing		6,927			5,064			18,824			14,622
General and administrative		2,022			1,828			5,818			5,911
Total operating expenses		13,320			11,097			38,026			32,788
Income from operations		1,577			1,757			5,824			4,853
Interest income, net		5			113			10			384
Other income (expense), net		(378)			65			(700)			44
Income before income tax (provision) benefit		1,204			1,935			5,134			5,281
Income tax (provision) benefit		57			(68)			(223)			(224)
Net income	$	1,261		$	1,867		$	4,911		$	5,057
Per share information:
Earnings per share:
Basic	$	0.04		$	0.06		$	0.16		$	0.17
Diluted	$	0.04		$	0.06		$	0.15		$	0.16
Weighted-average shares used in computation:
Basic		31,068			30,662			30,962			30,580
Diluted		32,618			31,987			32,646			31,935

Stock-based compensation included in above costs and expenses:
Cost of revenue	$	88		$	62		$	243		$	148
Research and development		92			171			394			549
Sales and marketing		169			144			475			422
General and administrative		19			83			152			274
	$	368		$	460		$	1,264		$	1,393

Amortization of intangible assets included in above costs and expenses:
Cost of revenue	$	—		$	67		$	26		$	201

eGain Corporation

GAAP to Non-GAAP Reconciliation Table

(in thousands, except per share data)

(unaudited)


	Three Months EndedMarch 31,				Nine Months EndedMarch 31,
	2021		2020		2021		2020
Income from operations	$	1,577	$	1,757	$	5,824	$	4,853
Add:
Stock-based compensation		368		460		1,264		1,393
Amortization of intangibles assets		—		67		26		201
Non-GAAP income from operations	$	1,945	$	2,284	$	7,114	$	6,447

Net income	$	1,261	$	1,867	$	4,911	$	5,057
Add:
Stock-based compensation		368		460		1,264		1,393
Amortization of intangibles assets		—		67		26		201
Non-GAAP net income	$	1,629	$	2,394	$	6,201	$	6,651
Per share information:
Non-GAAP earnings per share:
Basic	$	0.05	$	0.08	$	0.20	$	0.22
Diluted	$	0.05	$	0.07	$	0.19	$	0.21
Weighted-average shares used in computation:
Basic		31,068		30,662		30,962		30,580
Diluted		32,618		31,987		32,646		31,935

eGain Corporation

Other GAAP to Non-GAAP Supplemental Financial Information

(in thousands)

(unaudited)


	Three Months EndedMarch 31,				Growth Rates		Constant Currency Growth Rates [1]
	2021		2020
Revenue:
SaaS revenue	$	16,875	$	14,817		14%		11%
Legacy revenue		1,203		2,102		(43%)		(45%)
GAAP subscription		18,078		16,919		7%		4%
GAAP professional services		1,665		1,435		16%		13%
Total GAAP revenue	$	19,743	$	18,354		8%		5%

SaaS and professional services revenue:
SaaS revenue	$	16,875	$	14,817		14%		11%
Professional Services		1,665		1,435		16%		13%
Total SaaS and professional services revenue	$	18,540	$	16,252		14%		11%

Cost of Revenue:
GAAP subscription	$	3,341	$	3,739
Add back:
Amortization of intangible assets		—		(67)
Non-GAAP subscription	$	3,341	$	3,672

GAAP professional services	$	1,505	$	1,761
Add back:
Stock-based compensation		(88)		(62)
Non-GAAP professional services	$	1,417	$	1,699

GAAP total cost of revenue	$	4,846	$	5,500
Add back:
Stock-based compensation		(88)		(62)
Amortization of intangible assets		—		(67)
Non-GAAP total cost of revenue	$	4,758	$	5,371		(11%)		(13%)

Gross Profit:
Non-GAAP subscription	$	14,737	$	13,247
Non-GAAP professional services		248		(264)
Non-GAAP gross profit	$	14,985	$	12,983		15%		12%

Operating expenses:
GAAP research and development	$	4,371	$	4,205
Add back:
Stock-based compensation expense		(92)		(171)
Amortization of acquired intangible assets		—		—
Non-GAAP research and development	$	4,279	$	4,034		6%		5%

GAAP sales and marketing	$	6,927	$	5,064
Add back:
Stock-based compensation expense		(169)		(144)
Amortization of acquired intangible assets		—		—
Non-GAAP sales and marketing	$	6,758	$	4,920		37%		35%

GAAP general and administrative	$	2,022	$	1,828
Add back:
Stock-based compensation expense		(19)		(83)
Amortization of acquired intangible assets		—		—
Non-GAAP general and administrative	$	2,003	$	1,745		15%		13%

GAAP operating expenses	$	13,320	$	11,097
Add back:
Stock-based compensation expense		(280)		(398)
Amortization of acquired intangible assets		—		—
Non-GAAP operating expenses	$	13,040	$	10,699		22%		20%

[1] Constant currency growth rates presented are derived from converting the current period results for entities reporting in currencies other than U.S. Dollars into U.S. Dollars at the exchange rates in effect during the prior period presented rather than the actual exchange rates in effect during the current period. 7

eGain Corporation

Other GAAP to Non-GAAP Supplemental Financial Information

(in thousands)

(unaudited)


	Nine Months EndedMarch 31,				Growth Rates		Constant Currency Growth Rates [1]
	2021		2020
Revenue:
SaaS	$	49,023	$	41,279		19%		17%
Legacy revenue		4,502		7,555		(40%)		(41%)
GAAP subscription		53,525		48,834		10%		8%
GAAP professional services		4,514		4,865		(7%)		(9%)
Total GAAP revenue	$	58,039	$	53,699		8%		6%

SaaS and professional services revenue:
SaaS	$	49,023	$	41,279		19%		17%
Professional Services		4,514		4,865		(7%)		(9%)
Total SaaS and professional services revenue	$	53,537	$	46,144		16%		14%

Cost of Revenue:
GAAP subscription	$	9,811	$	11,046
Add back:
Amortization of intangible assets		(26)		(201)
Non-GAAP subscription	$	9,785	$	10,845

GAAP professional services	$	4,378	$	5,012
Add back:
Stock-based compensation		(243)		(148)
Non-GAAP professional services	$	4,135	$	4,864

GAAP total cost of revenue	$	14,189	$	16,058
Add back:
Stock-based compensation		(243)		(148)
Amortization of intangible assets		(26)		(201)
Non-GAAP total cost of revenue	$	13,920	$	15,709		(11%)		(12%)

Gross Profit:
Non-GAAP subscription	$	43,740	$	37,989
Non-GAAP professional services		379		1
Non-GAAP gross profit	$	44,119	$	37,990		16%		14%

Operating expenses:
GAAP research and development	$	13,384	$	12,255
Add back:
Stock-based compensation expense		(394)		(549)
Amortization of acquired intangible assets		—		—
Non-GAAP research and development	$	12,990	$	11,706		11%		11%

GAAP sales and marketing	$	18,824	$	14,622
Add back:
Stock-based compensation expense		(475)		(422)
Amortization of acquired intangible assets		—		—
Non-GAAP sales and marketing	$	18,349	$	14,200		29%		27%

GAAP general and administrative	$	5,818	$	5,911
Add back:
Stock-based compensation expense		(152)		(274)
Amortization of acquired intangible assets		—		—
Non-GAAP general and administrative	$	5,666	$	5,637		1%		0%

GAAP operating expenses	$	38,026	$	32,788
Add back:
Stock-based compensation expense		(1,021)		(1,245)
Amortization of acquired intangible assets		—		—
Non-GAAP operating expenses	$	37,005	$	31,543		17%		16%