eGain (EGAN) Q4 2024 earnings summary

Executive summary

• Fiscal 2024 revenue was $92.8 million, down 5% year-over-year, but non-GAAP net income rose to $12.3 million, exceeding projections and up 47% from the prior year.

• AI Knowledge offerings drove a 50% increase in new logo wins and RFPs, with major new clients secured and the strongest pipeline activity in four years.

• Knowledge Hub ARR grew 8% year-over-year and now represents 50% of total revenue, reflecting a strategic shift and increased R&D investment.

• Cash and equivalents ended fiscal 2024 at $70 million, with $17.3 million in stock buybacks during the year.

• The company is positioned as a leading AI Knowledge Platform, serving major brands and investing in market expansion.

Financial highlights

• Q4 revenue was $22.5 million, down 9% year-over-year due to large client losses in Conversation and Analytics Hubs.

• Full-year non-GAAP gross profit was $66.4 million (72% margin); GAAP gross margin declined to 69% by Q4FY24.

• Q4 non-GAAP net income was $2.5 million ($0.08/share); full-year non-GAAP net income was $12.3 million ($0.39–$0.40/share), up from $8.4 million prior year.

• Adjusted EBITDA margin was 11% for Q4 and 12–13% for the year, both higher than the prior year.

• Operating cash flow for the year was $12.4–$12.5 million (13% margin).

Outlook and guidance

• Fiscal 2025 revenue guidance is $92–$93 million, with non-GAAP net income expected at $5–$6 million ($0.17–$0.20 per share).

• Q1 2025 revenue expected between $21.4–$21.8 million; non-GAAP net loss of $0.4 million to net income of $0.5 million.

• Revenue recognition shift in Cisco OEM business will defer $1.3 million in revenue, mostly impacting Q1 2025.

• Share-based compensation for 2025 estimated at $5 million; depreciation/amortization at $400,000.