Q1 2022 eGain Corp Earnings Call
You're currently on hold for this new game physical 2022 first quarter financial results Conference call. At this time are still gathering additional participants and plan to be a new way. Shortly we appreciate your patience and please remain on the line.
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Good day and welcome to the he gained fiscal 2022 first quarter financial results Conference call. Today's conference is being recorded at this time I'd like to turn the conference over to Jim buyers M care Investor Relations. Please go ahead Sir.
[noise]. Thank you operator, and good afternoon, everyone. Welcome to your gains first quarter of fiscal 20 twenty-two financial results conference call on the call. Today are you gains Chief Executive Officer, Ashy, Roy and Chief Financial Officer, Eric Smith.
Four we begin I would like to remind everyone that during this conference call management will make.
Certain forward looking statements, which convey management's expectations beliefs plans and objectives regarding future financial and operational performance.
Forward looking statements are generally preceded by words, such as believe plan intend expect anticipate or similar expressions.
Forward looking statements are protected by Safe Harbor provisions contained in the private Securities Litigation Reform Act of 1995, and he's forward looking statements are subject to a wide range of risks and uncertainties that could cause actual results to differ in material respects.
Information on various factors that could affect he gains the results.
As detailed in the company's reports filed with the Securities and Exchange Commission you gain is making these statements as of today November 9th 2021, and assumes no obligation to publicly update or revise any of the forward looking information on this conference call.
In addition to GAAP results, we will discuss certain non-GAAP financial measures such as non-GAAP operating income. The tables included with the earnings press release include reconciliation of the historical non-GAAP financial measures to the most directly comparable GAAP financial measures.
Our earnings press release can be found on the news release link on the Investor Relations page if he gains website at www.
Dot com and a phone replay of this conference call will be available for one week.
No that said I'd like to turn the call over to eat gains C. E O S U Roy.
Thank you you have a good afternoon everyone.
We're off to a very good stock the physical 22 and.
In the first quarter will be delivered the core driving you know.
Of $21.5 million that is 13%.
One three per cent you got over your growth.
Quarterly fast revenue route 20 per cent yoda legal and we increased our sales and marketing investment in the courthouse by 25% gutter window.
So our business momentum is building nicely around but you gain knowledge hop Ah recently launched solution.
That raises the bar.
On knowledge powered automation of customer engagement.
What time is good because.
And the recently published report.
A doctor of analysts lighted and I quote.
Knowledge management is the number one technology put enhancing the three main customer service perspectives of operational performance.
The X and employee experience and a coke.
That is quite a statement about the value of knowledge for customer service.
Well see the thing now is that deal that had paused during the early stage of the pandemic because of the heightened focus from businesses too Virtualized, there's always operations and keep them running are all coming back to life.
Investment an agent experience and automation is getting prioritized again.
In parallel.
Our sales and marketing investments, we began just over a year ago are now starting to yield results.
Our first cohort of sales reps will be hired late last year or roughly are now productive.
And now we are substantially complete with the hiring of our second court.
Who are all in the process of being on board are trained and wrapped up.
It's a good timing in terms of the market.
And I was intrigued investment.
So I will stop starting to show in our performance.
So let me do some U logo wins in the corner.
He added exciting new logos, let me shed some examples.
One was a hypo girls Crypto exchange Christmas, we did mentioned them in our queue for a call as well.
They were committed to the Salesforce C. R. M platform. So we ended up competing with.
Not just the other knowledge providers, but also the salesforce knowledge option.
We won this business with our leading functionality are open architecture for integration.
Uhm proven cloud <unk>.
The last item was critical for them given the nature of their business.
The next two new logos I want to highlight or.
Both state departments, one a department of health and the other.
Department of retirement.
The department of health wanted to Modernise.
They are a citizen communication by implementing knowledge capabilities. So the agents.
But they did not want to walk away from their existing investment in I B M Watson box technology.
So it's how we're unique bring your own bark architecture.
Which is part of our hub, we easily meet their requirements, while leveraging that existed block technology investments it might be M.
The second one the department of retirement, they wanted to shift more of their citizen interaction online interaction away from face to face.
Our secure cold browsing in digital engagement capability will enable this agency to support the authorities to web site navigation and <unk>.
Another new logo I want to talk about is a fast growing insurance company in Europe.
For them technology, as a basis to deliver differentiate the customer experiences.
They are implementing egon, but create omnichannel customer service capability powered by knowledge N E R.
What's extra sweet about this particular logo is that we lost this opportunity a couple of years ago, when the flight decided to implement multiple points solutions.
Which on the face seemed less expensive total compared to our solution.
I'm, Linda Kline decided to come back to US now we are gonna be replacing all of those points solutions that they have selected two years ago.
The last one I mentioned as a leading telecom provider in the meal they.
They are deploying an advanced omnichannel solution to support demand for the upcoming global sporting event.
And we will be delivering an omni travels capability with integrated digital and bundled analytics.
Lots of good new enterprise fast logos.
On the purple frog.
We had investing in building connectors to new contact center and see how can platforms.
Probably at housing it by market opportunity and go to market alignment.
Two new connectors worth mentioning all four S. A P and four Genesis in the case of S. A P. We're also starting to build joint go to market campaigns to serve.
Their client base, particularly and utilities and manufacturing.
With Genesis.
We just recently announced our connector certification and we're seeing good interest from some of our clients who are also Genesis telephony science.
With existing partners, we continue to develop our joined proposition actively salt.
Our Cisco partnership continues to deliver across the board with new logos and business expansion.
<unk> Avaya partnership is now also generate a new logos.
Good to see I would've I a partnership getting.
To a point, where we are stopping could deliver a new logo was on a steady basis.
Finally on the partner Shrugged, we are C inbound interest growing inbound interest from global that size as we get closer to our Fedramp certification.
This is something we expect to receive before the end of this calendar year.
In fact, some of the state Department's logo wins I highlighted Olivia are the tip of the day Ma'am Bye sport.
We expect.
Once we are certified.
They're not they're not too many providers in.
In the.
<unk> certified.
Category.
At this time so.
<unk> it is a significant opportunity that we are going after.
Anticipation of that we have <unk>, our sales and marketing investment in the government vertical and we are already actively sourcing opportunities.
On the virtual financial coach front, something that we have been now selling for about nine months since the market lunch.
We're making very good progress.
Oh turnkey a I powered coach.
Is a compelling and unique proposition, especially for small to mid sized credit unions and banks.
As we are all aware off.
Financial institutions that increasingly focusing on financial wellness for their customers.
To date.
Alright theme I signed up 33 33, new clients.
For a good solution in the U S. Since market lunch in March this year.
Note that these clients are not part of our enterprise fast client comp. These are small COVID-19 market times.
And we expect to accelerate our new logo of sign ups in this market over the coming quarters.
To summarize.
We're off to a strong start in fiscal 22.
With record revenue and drawing momentum.
First go heart of sales hires a productive and the second cohort as in Frank.
We are now actively building out our ecosystem with product connectors and go to market partnerships.
We expect our federal certification.
To be done by the end of this calendar you go.
So.
With all of this and our top rated products.
We look forward to accelerating growth and unexciting market.
With that let me ask Eric Smith, Chief Financial Officer, right more color around our financial operations.
Thanks, <unk> and thanks to everybody for joining us today.
Is actually noted we're off to a very good start to a new school, yeah was top and bottom line results that exceeded our guidance where to hit US and we're ahead of street consensus.
Looking at our furniture results generated record revenue of 21.5 million with a return to double digit total revenue growth of 13% year over year end up 6% sequentially.
<unk> revenue was 19.2 million up 20% year over year and accounted for 89% of total revenue.
Looking at <unk> get gross profits and gross margins gross profit for the quarter was 16.7 billion or a gross margin of 78% up 200 basis points from 726% a year ago.
No 22 operations non-GAAP operating costs with a quarter came in at 13.9 million compared to 11.7 billion in the year ago quarter increase was primarily driven by investments in sales and marketing, which increased 25% year over yeah.
Looking at a bottom line don't get operating income in the quarter was 2.8 million or an operating budget of 13% compared to an operating budget of 15% in the year ago quarter.
Non-GAAP net income for the quarter was 2.7 billion or eight cents per share. This compares to non-GAAP net income with 2.5 million or eight cents per share in the year ago quarter.
Turning to our balance sheet and cash flows are better shoot remains strong during the quarter, we generated cash flow from operations of 7.2 million or operating cash flow margin of 33% up from 5.8 million or 30% larger in the year ago quarter.
Total cash and cash equivalents at the end of the quarter was 70.4 million up 73% from a year ago.
No turning to our customer matrix is actually mentioned, we had very good bookings in the quarter. The combination of new logos expansion deals and renewals. This.
This is highlighted by the improvement in several of our key enterprise customer matrix.
Oh L. T M dollar based says extra attention rate increased to 112% from 102% in the year ago quarter and was up sequentially from two four with no significant tune in the quarter.
Oh L. T M says expansion rate increased to 122% from 111% in the year ago quarter and also up sequentially from two four.
The number of 1 billion dollar a all all customers increased 30% year over year.
And I'll shorten all P O increased 18% year over year 252.8 million.
Now, what's your financial outlook and guidance.
As I noted on last cool probably focus in the coming yeah, we'll be on top line growth.
We have seen great early results from a sales and marketing investments and based upon this we plan to continue.
Investments to further increase the brand awareness and penetrates and kept you Moonwalker chair of this message <unk> Chutki, we see in front of us.
In addition, we plan to increase investment in order to maintain a competitive advantage and build out product lit growth strategy.
We also plan to invest in internal systems and processes that will be needed to scale the business is Kent.
Before sharing updated guidance I went to highlight a few changes to the guidance issued last quarter.
Based on a strong start and positive outlook for the fiscal yeah, we are raising our annual revenue guidance.
But even though O Q1 bottom line came in better than expected, we are not suggesting a borderline guidance as we remain committed to making the necessary investments to drive sustainable top line growth.
And finally, some color around.
Around the increase in stock based compensation projected for the quarter and the fiscal yeah.
As me drive aggressively to grow out topline debit before has it been as important to attract and retain key talent installed based award sort of critical tool.
Tool to achieve these goals driven by this we reviewed and updated a longterm an equity incentive plans to bring them up to industry standards. This resulted in company wide stock option grants to existing employees this quarter.
And your stock based compensation guidelines will be using for attracting new hires we're seeing early positive feedback from existing employees motivated by this new incentive.
And from recruiting managers able to attract high quality talent with the increased stock-based components in their office.
No one to the guidance for the second quarter of fiscal 20 twenty-two. We expect total revenue of between 21.9 million to 22.3 million, which would represent growth of 14% to 16% year over year.
Non-GAAP net income of 300000 to 1 million Oh, one sent to three cents per share.
And get Nip loss of 2.9 billion to 3.6 million or.
The loss of night since 211 cents per share.
Where we estimate share based compensation expensive approximately 4 million.
And depreciation an invitation extensive approximately 120000.
For the physical 2022 full year ending June 30th 2022, we expect total revenue of between 89 million to 90.5 billion, which would represent growth of 14% to 16% year over year.
<unk> net loss of breakeven to a million or.
Zero sense too.
Most of the three cents per share.
And get Nip loss of 12.1 million to 13.1 million or a loss of 37 cents to 40 cents for sure where we estimate sure based compensation expensive approximately 12 million and depreciation in imitation amortization expense of approximately 500000.
So in summary.
Off to a strong start to the fiscal year with record revenue in the quarter, we delivered strong cash flow in Bolton blood results, even without continued investment in sales and marketing we.
So a very strong bookings and continue to see expansion from the installed base of enterprise customers.
And without continued sales investment momentum we are building around October it's it knowledge proud customer basement platform in the marketplace is resulting in increased opportunities in both direct sales pipeline and through our extended appointment ecosystem.
So in closing.
Mostly looking at an Investor relations calendar.
As we announced last week will be participating in three virtual and fish to conferences. This month tomorrow will be participating in the bed bug you wish you a conference next week will be participating in the Craig's Helen Ultra Slick conference on Tuesday November 16th and then the Ross Technology Conference on Thursday November the 18th.
We hope to see some of you virtually at these conferences.
This concludes our prepared remarks upgrade so we will not open the call for questions.
Thank you, ladies and gentlemen, if you'd like to ask a question. Please signaled by pressing star one on your telephone keypad hip.
If you're using a speaker phone. Please make sure you mute function as turned off by your single three chair equipment again press Star one to ask a question.
We'll pause for just a moment till now everyone in opertaneous signal for questions.
Hen will take the first question from the line of Tim Horan with Oppenheimer. Please go ahead.
Hi, This is actually Edward gang for Tim Iran. Issue was I was very interested to hear your comment about the Fedramp certification by your N. You mentioned, it's a tip of the demand iceberg and I was wondering if you could quantify it or size up that opportunity.
Yeah sure I do I can give you some color so what we're seeing from our existing clients and the and the government space. So that is more and more investment going into the whole sort of digital transformation area and part of that is trying to figure it out.
<unk>.
Improve.
Automation off the self service capabilities as well as improving the agent experience an agent tools. For example, we we just put out a press release a.
A few days ago, we we talked about how I'm gonna be doing a keynote with one of the C. I OS off one of our client agencies federal agencies, and they're gonna be talking about.
Again knowledge in a I used in automating the citizen engagement and improving agent experience as well. So what we are seeing just anecdotally as well as I'm looking at the market stop that the federal and state.
Not so much local but definitely federal and state seemed to be increasing that investment in the customer and citizen engagement area and that's really where all our confidence is coming from plus we are seeing more activity in our pipeline, even when we don't have the fedramp certification complete.
It yet of course people are aware that we are very close to it because they can see it on the Fedramp website. So all that put together kind of gives us that added confidence around the incremental up with you.
And maybe just a couple of modeling questions for Eric what was the D N a in capex and a quarter and if you could provide a projection for the year.
And your legacy revenue sales revenue actually rose sequentially. So I was wondering what the cadence would look like on that line on them for the rest of the year. Thank you.
Sure first of all so I'm just respond to your last question. So.
For the legacy business, you're correct. It was a slight uptick this was actually the ketchup from.
Customer renewal, Oh, well, though as we look forward certainly the expectation is that this number will continue to decline so.
We've discussed on previous calls you know at this stage.
Uhm the remaining legacy customers, we're working on actively moving them to the cloud some of them have been tunnel I T requirements that have delayed the move but overall.
Through the remainder of the year, we would expect this this number to continue to decline.
And then for the.
Christian around Catholics.
When I look at it.
Yeah.
So yeah. So G N a so for the G N a.
So just to be clear on the question on the G. N. A question the the the spill <unk> and that's all that I.
I I meant DNA depreciation and amortization Oh, sorry, okay.
So for the court to the depreciation and amortization uhm.
Okay I'm in.
Was about just over 100000 and again from the modeling perspective, we expect that close to that for the courtroom about 500000 for the.
And Capex.
And Catholics was probably just over 100 to about 150000 and again for the in that 12 million rage.
Thank you very much.
Once again, ladies and gentlemen, if you'd like to ask you. A question. Please single by pressing star one on your telephone keypad, if you're using a speaker phone. Please make sure you meet functions turned off by your signal to reach our equipment again press Star one task of question what possible just a moment, while everyone an opportunity to signal for questions.
Ladies and gentlemen, if there are any additional questions. At this time. Please press the star four by the one and if you're using a speaker phone. Please make sure you mute function is turned off by your signal to reach our equipment.
It appears there are no further questions at this time I will turn the call back over to eat game management for any additional comments or closing remarks.
Okay, well, thanks, operator, and thanks to everybody for listening today does that I've mentioned, we got several upcoming investor conference's. So hopefully we'll have the option to connect with you. That's one of those events and we look forward to providing you an update can.
Can be announced so key to financial results. Thank you.
Ladies and gentlemen, this does conclude today's call. Thank you for your participation and you may now disconnect your lines.
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