eGain Corporation Q1 FY2026 earnings call

• New logo wins: Signed a large NY health insurer serving 2 million members and a multinational energy company serving over 20 million customers, both went live within 100 days.
• Expansion: Existing knowledge clients are adding AI agent products for contact centers or self-service, e.g., a branded manufacturing client expanded into customer self-service.
• Product announcements: Announced three new capabilities at Solve 25 event, including eGain Corporation AI knowledge method with AI-powered knowledge intelligence, second version of AI agent with hybrid AI and inbound expert assurance, and eGain Corporation Composer for developers.
• Team hires: Hired new VP of Marketing, VP of product marketing, and VP of Finance, focusing on driving growth and product execution.

Total revenue for the first quarter was $23.5 million, up 8% year over year. SaaS revenue increased by 10% year over year and accounted for 93% of total revenue. The ARR for the AI knowledge line of product business was up 23% year over year. Total gross margin for the quarter was 76%, up 600 basis points from 70% a year ago. SaaS gross margin was 81%, up from 77% a year ago. Non-GAAP operating costs were down 9% year over year. Non-GAAP net income was $4.7 million or $0.17 per share, up significantly from the year-ago quarter. Adjusted EBITDA margin for the quarter was 21%.

• Q2 2026: Expect GAAP net income of $1.0 million to $1.7 million or $0.04 to $0.06 per share (includes ~$700k stock-based comp expense), non-GAAP net income of $1.9 million to $2.4 million or $0.07 to $0.08 per share, and adjusted EBITDA of $2.7 million to $3.2 million (12%-14% margin).
• Full year 2026: Expect total revenue between $90.5 million and $92 million, GAAP net income $3.5 million to $5 million or $0.12 to $0.17 per share, non-GAAP net income $8.3 million to $9.8 million or $0.29 to $0.34 per share, and adjusted EBITDA $10.4 million to $11.9 million (11%-13% margin).

• Sunset of messaging platform business causing approximately $600k revenue reduction.
• Government shutdown introducing delays and near-term uncertainty for certain professional services engagements with government customers.

Q: Sales trends are firming up but sales and marketing spend stepped down. Talk about strategy.

A: There was a summer slowdown in marketing spend; marketing spend will increase in the second half. People-wise, have good capacity with product-led sales motion, and will step up sales hiring investment in the second half of the fiscal year.

Q: Proliferation of dumb agents, help or commoditize?

A: Believe it helps as people playing with AI agentic AI come to them for serious solutions needing connection to critical data systems for nontrivial experiences.

Q: Completeness of Composer product, integration with GenAI engines?

A: First version, but made trusted knowledge back end available easily via APIs/SDKs, and enabled bring your own model architecture for plugging in choice models.

Q: Cash balance, strategic deployment?

A: Continue with buyback, open to tuck-in acquisitions but not primary focus, and have comfort with business viability with strong cash balance.

Q: Update on 7 figure knowledge hub opportunities and JPMorgan deployment?

A: Progress is good with steady pipeline progression and more partner interest. JPMorgan deployment went to plan, first phase deployed in half the originally agreed time.