eGain (EGAN) Q1 2026 earnings summary

Executive summary

• Fiscal Q1 2026 delivered 8% year-over-year revenue growth to $23.5 million, driven by a 10% increase in SaaS revenue and robust AI Knowledge product performance.

• AI Knowledge ARR grew 23% year-over-year, now representing 60% of SaaS ARR, with net retention rate at 112%.

• Major product launches at the Solve 25 event included AI Knowledge Method, AI Agent 2, and Composer, generating strong customer and partner interest.

• Leadership team expanded with key hires in marketing, product marketing, and finance to support growth initiatives.

Financial highlights

• SaaS revenue reached $21.9 million (93% of total), up 10% year-over-year; professional services revenue was $1.6 million, down 19%.

• Non-GAAP gross margin improved to 76% from 70% a year ago; GAAP gross margin was 75%.

• Non-GAAP net income was $4.7 million ($0.17/share), up from $1.3 million ($0.04/share) last year; GAAP net income was $2.8 million ($0.10/share).

• Adjusted EBITDA margin was 21%, up from 6% a year ago.

• Operating cash flow was $10.4 million (44% margin), up from $1 million (4% margin) last year; cash and equivalents ended at $70.9 million.

• $1.5 million in stock repurchased during the quarter.

Outlook and guidance

• Q2 2026 revenue expected between $22.3M–$22.8M, with sequential decline due to sunsetting messaging platform and government shutdown impacts.

• Q2 GAAP net income guidance: $1.2M–$1.7M ($0.04–$0.06/share); non-GAAP net income: $1.9M–$2.4M ($0.07–$0.08/share); Adjusted EBITDA: $2.7M–$3.2M (12%–14% margin).

• FY 2026 revenue expected at $90.5M–$92M, with GAAP net income of $3.5M–$5M and non-GAAP net income of $8.3M–$9.8M.

• Adjusted EBITDA for FY 2026 projected at $10.4M–$11.9M (11%–13% margin).

• Diluted shares outstanding expected at 28.8M for Q2 and full year, impacting EPS guidance by 1%.