eGain Announces Fiscal 2012 Third Quarter Financial Results

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Tuesday, May 8th 2012
New Bookings Up 98% From Year Ago Third Quarter; New Hosting Bookings Up 186% From Year Ago Third Quarter; Total Revenue of $11.5 Million Up 29% From Year Ago Third Quarter
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SUNNYVALE, CA -- (Marketwire) -- 05/08/12 -- eGain Communications (NASDAQ: EGAN), a leading provider of cloud and on-site customer interaction software, today announced financial results for its fiscal 2012 third quarter ended March 31, 2012.

"Our increased revenue and new bookings in the fiscal third quarter reflect the positive momentum we are generating with our solutions in the marketplace," said Ashu Roy, eGain's CEO. "We are seeing early returns from sales force investments and distribution partnerships, and our sales pipeline continues to grow. During the quarter we signed a significant new agreement with a Fortune 50 global technology company that represents the first deal through our new partnership with SAP AG. We are optimistic about the potential of this partnership. We continue to experience a significant increase in demand for our hosted service solutions compared to our on-premise solution, which will result in more predictable revenue growth going forward. With our industry leading solutions and improved distribution, we are excited about our prospects for continued growth through the remainder of our fiscal year."

Fiscal Q3 Financial Highlights
Fiscal third quarter total revenue was $11.5 million, an increase of 29% from the comparable year-ago quarter. License revenue for the fiscal third quarter was $2.8 million, an increase of 67% from the comparable year-ago quarter. Recurring revenue for the fiscal third quarter was $5.8 million, an increase of 12% over the comparable year-ago quarter. Professional services revenue for the fiscal third quarter was $2.9 million, an increase of 40% from the comparable year-ago quarter.

Gross profit for the fiscal third quarter was $8.0 million, an increase of 31% from the comparable year-ago quarter. Gross margin for the fiscal third quarter increased to 70%, from 69% in the comparable year-ago quarter. The recurring revenue gross margin for the fiscal third quarter increased to 77%, from 74% in the comparable year-ago quarter. The professional services gross margin for the fiscal third quarter decreased to 26%, from 31% in the comparable year-ago quarter.

Net loss for the fiscal third quarter was $1.2 million, or a loss of $0.05 per share, compared to net income of $567,000, or $0.03 per share on a basic and $0.02 on a diluted basis, for the comparable year-ago quarter. Net loss for the fiscal third quarter included stock-based compensation expense of $255,000 and interest and tax expense of $253,000, compared to stock-based compensation expense of $54,000 and interest and tax expense of $302,000 in the comparable year-ago quarter.

Fiscal YTD Financial Highlights
Total revenue for the nine months ended March 31, 2012 was $32.7 million, an increase of 4% from the same period last year. License revenue for the nine months ended March 31, 2012 was $8.8 million, a decrease of 25% from the same period last year. The year-over-year decrease in license revenue is attributable to a large one-time license fee received in the first quarter of fiscal 2011. Recurring revenue for the nine months ended March 31, 2012 was $17.3 million, an increase of 16% from the same period last year. Professional services revenue for the nine months ended March 31, 2012 was $6.7 million, an increase of 36% from the same period last year.

Gross profit for the nine months ended March 31, 2012 was $23.2 million, a decrease of 1% from the same period last year. Gross margin for the nine months ended March 31, 2012 decreased to 71%, from 75% for the same period last year. This decrease was due to the decrease in license revenue. The recurring revenue gross margin for the nine months ended March 31, 2012 increased to 77%, from 74% for the same period last year. The professional services gross margin for the nine months ended March 31, 2012 was 16% unchanged from the same period last year.

Net loss for the nine months ended March 31, 2012 was $1.5 million, or a loss of $0.06 per share, compared to a net income of $6.4 million, or $0.29 per share on a basic and $0.27 on a diluted basis, for the same period last year. Net loss for the nine months ended March 31, 2012 included stock-based compensation expense of $520,000 and interest and tax expense of $720,000, compared to stock-based compensation expense of $158,000 and interest and tax expense of $948,000, for the same period last year.

Total cash, cash equivalents and restricted cash decreased to $12.2 million at March 31, 2012, from $12.4 million at June 30, 2011. Cash provided by operations was $1.8 million for the nine months ended March 31, 2012, compared to cash provided by operations of $7.4 million for the same period last year. Deferred revenue increased to $6.4 million at March 31, 2012, compared to $5.8 million at June 30, 2011.

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