eGain (EGAN) Q2 2026 earnings summary

Executive summary

• Q2 FY26 revenue was $23.0 million, up 3% year-over-year, with SaaS revenue of $21.8 million, up 5% year-over-year, and strong operating cash flow and bookings, including major enterprise and insurance wins.

• AI Knowledge Hub ARR grew 27% year-over-year, now representing 64% of total SaaS ARR, with net retention rate for AI knowledge customers at 116%.

• Non-GAAP net income for Q2 was $3.0 million ($0.11/share), up from $1.3 million ($0.05/share) a year ago; GAAP net income was $2.3 million ($0.09/share), up from $671,000 ($0.02/share).

• Adjusted EBITDA margin improved to 14% from 7% year-over-year, with operating cash flow margin at 44% and cash and equivalents rising to $83.1 million.

• Product-led growth and increased partner activity drove a 50%+ increase in AI knowledge leads and robust new logo acquisition.

Financial highlights

• SaaS revenue comprised 95% of total revenue, up from 93% a year ago; professional services revenue declined 23% year-over-year.

• Non-GAAP gross margin was 74% (up from 71%), SaaS gross margin was 80% (up from 78%), and GAAP gross margin was 73% (up from 70%).

• Operating income for the quarter was $2.0 million, up from $650,000 a year ago; operating margin expanded to 9% from 3%.

• Deferred revenue was $44.4 million as of December 31, 2025; total RPO was $84.9 million, up 15% year-over-year.

• Cash and cash equivalents increased to $83.1 million as of December 31, 2025.

Outlook and guidance

• Q3 FY26 revenue expected between $22.2M–$22.7M; non-GAAP net income $1.8M–$2.3M ($0.06–$0.08/share); adjusted EBITDA $2.6M–$3.1M (12%–14% margin).

• FY26 revenue guidance is $90.5M–$92.0M; non-GAAP net income $8.8M–$10.3M ($0.31–$0.36/share); adjusted EBITDA $10.9M–$12.4M (12%–13% margin).

• FY26 GAAP net income expected at $4.5M–$6.0M ($0.16–$0.21/share), including $2.9M stock-based comp and $1.4M warrant expense.

• Management expects SaaS revenue to continue increasing, focusing on AI-enabled solutions and maintaining strong margins.

• Remaining performance obligations were $84.9 million as of December 31, 2025, with $53.0 million expected to be recognized within one year.