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eGain Corporation (EGAN) Q2 2024 Earnings Call Transcript

eGain Corporation (EGAN)

Q2 2024 Earnings Conference Call

Company Participants

Jim Byers - MKR IR

Ashu Roy - CEO

Eric Smit - CFO

Conference Call Participants

Richard Baldry - ROTH MKM

Jeff Van Rhee - Craig-Hallum

Presentation

Operator

Good day and welcome to the eGain Fiscal 2024 Second Quarter Financial Results Call. All participants will be in listen-only mode. [Operator Instructions] After today's presentation, there will be an opportunity to ask questions. Please note this event is being recorded.

I would now like to turn the conference over to Jim Byers of MKR Investor Relations. Please go ahead.

Jim Byers

Thank you, operator and good afternoon everyone. Welcome to eGain's fiscal 2024 second quarter financial results conference call. On the call today are eGain's Chief Executive Officer, Ashu Roy; and Chief Financial Officer, Eric Smit.

Before 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.

These 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 eGain's results are detailed on the company's reports filed with the Securities and Exchange Commission.

eGain is making these statements as of today, February 8, 2024, and assumes no obligation to publicly update or revise any of the forward-looking information in this conference call.

In addition to GAAP results, we will also discuss certain non-GAAP financial measures such as non-GAAP operating income. Tables included with the earnings press release issued today include reconciliation of the historical non-GAAP financial measures to the most directly comparable GAAP financial measures.

And our earnings press release can be found by clicking the Press Release link on the Investor Relations page of eGain's website at egain.com. And along with the earnings release, we will post an updated investor presentation to the Investor Relations page of eGain's website. And lastly, a phone replay of this conference call will be available for one week.

And now, with that said, I'd like to turn the call over to eGain's CEO, Ashu Roy.

Ashu Roy

Thank you, Jim and good afternoon everyone. Our top and bottom-line results for the quarter have exceeded our guidance, and our AssistGPT AI offering is being well-received by the market and helping us win new logos.

Turning to business, we signed several new logos in the quarter. Some notable wins here. A global investment management company chose eGain to modernize their knowledge management capability. Their services staff was struggling to find answers in what are long, complex documents in their business, spread across many silos. They selected eGain based on our ability to unify that knowledge and deliver consumable answers using generative AI in a safe, auditable way.

Another new logo is a membership-based primary care practice, which is in hyper-growth mode. They selected eGain to enable their associates with a unified knowledge platform.

Again, they will integrate all their content and knowledge sources on the eGain platform and use our AssistGPT capability to deliver easy answers and ramp up the new hires.

And lastly, I mentioned a pioneering US-based mutual auto insurance company. They selected us to streamline their agent experience and therefore, improve their customer experience. They've gone live with eGain already for the service group and are now looking to rollout the knowledge capability across the enterprise.

We also saw good expansion from existing customers during the quarter. A couple of notable ones, a large P&C insurance company and the global electronic component distributor.

Turning to renewals. In the current macro environment, we are working hard to serve and retain customers as they look to reduce their operating costs. We've had good renewals in the quarter, including large health care insurance clients, an industry-leading HCM SaaS solution provider, and a large multinational bank.

At the same time, we have received notice from two large clients about their intent to not renew with us. The first is a Conversation Hub client. They're choosing to consolidate vendors for all their digital customer communications. The second is an Analytics Hub client. They are choosing to build out their homegrown capability to measure and manage their contact centers. The combined ARR of these two accounts is approximately $8 million. These churn events are challenging as they are not factored in our fiscal 2024 plan.

At the same time, we are very encouraged by the growing interest in our AssistGPT proposition. Our new logo pipeline is growing nicely with knowledge and AI opportunities....

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