eGain Corporation Q2 FY2026 earnings call

• Business momentum: Revenue and profitability exceeded guidance, strong bookings including multiple Global 1000 logos and expansions. AI Knowledge Hub ARR from customers up 27% YOY, accounting for 64% of SaaS ARR. Top-of-the-funnel AI Knowledge leads up over 50% YOY.
• Trends: 25% of new logos in H1 '26 sourced by partners (doubled YOY). Enterprise buying converging with CX deals, accelerated by corporate AI teams' interest in knowledge.
• Booking highlights: Won enterprise knowledge mandate for a large global business software provider; signed deals with a kitchen cabinet manufacturer, insurance company Achmea, and Oregon Community Credit Union.
• Partnerships: Partner-sourced leads in H1 '26 up 80% YOY. eGain Composer driving product sales and ecosystem partners.
• Awards: Named in Gartner Emerging MQ for generative AI knowledge apps and KM World's Readers' Choice Award.

Total revenue for the second quarter was $23 million, ahead of guidance and up 3% year-over-year. SaaS revenue increased by 5% year-over-year and accounted for 95% of total revenue. Excluding noncore messaging products (sunsetting this fiscal year), total revenue was up 5% YOY and SaaS revenue was up 8% YOY. AI Knowledge ARR from customers increased 27% year-over-year, with total AI Knowledge ARR representing 64% of total SaaS ARR. SaaS ARR for AI Knowledge customers had an LTM dollar-based SaaS net retention rate of 116% (up from 99% YOY), while total SaaS ARR net retention was 101% (up from 89% YOY). Total remaining performance obligations (RPO) increased 15% year-over-year, with short-term RPO at $53 million up 4% YOY.

• Q3 2026: Total revenue expected $22.2M - $22.7M. GAAP net income $1M - $1.5M ($0.04 - $0.05 per share). Non-GAAP net income $1.8M - $2.3M ($0.06 - $0.08 per share). Adjusted EBITDA $2.6M - $3.1M (12% - 14% margin).
• FY 2026: Total revenue expected $90.5M - $92M. GAAP net income $4.5M - $6M ($0.16 - $0.21 per share). Non-GAAP net income $8.8M - $10.3M ($0.31 - $0.36 per share). Adjusted EBITDA $10.9M - $12.4M (12% - 13% margin).

Forward-looking statements are subject to a wide range of risks and uncertainties that could cause actual results to differ, as detailed in the company's SEC filings.

Q: Congrats on the large software deal, cycle, competitive landscape, what you're replacing?

A: Fairly long sales cycle (1.5 years+), replacing existing non-enterprise-wide knowledge platform; competitors had AI search in functional groups but no enterprise-wide knowledge solution.

Q: On partner-driven leads, concentrated areas?

A: Boutique knowledge consulting shops (refreshing platforms for clients) and contact center knowledge deals through TSD networks.

Q: AI and software development barriers, moats?

A: Barriers include architecture, use case understanding, nonfunctional aspects (reliability, scalability); differentiators are focus, use case understanding, and track record.

Q: Cash pile deployment thoughts?

A: Focus on internal investments to drive top-line growth, continue share buyback, opportunistically evaluate inorganic options.

Q: Hiring plans?

A: Investment in product (high-end engineering, AI), marketing (new head, increased activity), sales (expert/specialist-led motions, investing in composer proposition).

Q: JPMorgan deployment status and other use cases?

A: Deployment halfway, expect full rollout later this year; Europe customer event in May to share new capabilities; other use cases concentric around customer operations expanding to enterprise-facing areas.

Q: Win types (greenfield vs displacing)?

A: Replacing tactical solutions (SharePoint/RAG issues, salesforce limitations, outdated point knowledge management solutions).