eGain (EGAN) Q2 2025 earnings summary

Executive summary

• AI Knowledge Hub ARR grew 17% year-over-year, now representing 55% of total SaaS ARR, with several new enterprise wins and a growing pipeline of large deals, though sales cycles are lengthening.

• Q2 total revenue was $22.4 million, down 6% year-over-year, mainly due to prior client losses; SaaS revenue accounted for 93% of total revenue.

• Non-GAAP net income for Q2 was $1.3 million ($0.05 per basic share), down from $3.4 million a year ago; GAAP net income was $671,000 ($0.02/share).

• Cash and equivalents stood at $70.5 million as of December 31, 2024, reflecting share repurchases and operating cash flows.

• Launched new product, eGain AI Agent, with strong customer interest and on track for release in the current quarter.

Financial highlights

• SaaS revenue accounted for 93% of total revenue and exceeded internal expectations.

• Non-GAAP SaaS gross margin was 78%; total gross margin was 70–71%, down slightly year-over-year.

• Adjusted EBITDA margin was 7% in Q2, down from 16% in the prior year.

• Operating cash flow for Q2 was $6.4 million (29% margin), with $7.4 million for the six months.

• Deferred revenue as of December 31, 2024, was $37.4–$40.4 million.

Outlook and guidance

• Fiscal 2025 revenue guidance lowered to $88.5–$90 million; SaaS expected to be 93% of total revenue.

• Non-GAAP net income guidance reduced to $4.1–$4.7 million ($0.14–$0.16/share); GAAP net income guidance raised to $1.1–$1.7 million ($0.04–$0.06/share).

• Q3 revenue expected at $21–$21.5 million; Q3 GAAP net loss of $0.3–$0.8 million, non-GAAP net income of $0–$0.5 million.