eGain — Fiscal 2026 Earnings Summary

Financial Performance

• Total revenue for fiscal 2026 was $91.1 million, up 3% year-over-year from $88.4 million; Q4 fiscal 2026 revenue was $22.2 million, down from $23.2 million in Q4 fiscal 2025.
• AI customer revenue grew 20% year-over-year for the full fiscal 2026 and 11% year-over-year in Q4 fiscal 2026.
• GAAP net income for fiscal 2026 was $8.9 million ($0.33 basic, $0.32 diluted per share), compared to $32.3 million ($1.15 basic, $1.13 diluted) in fiscal 2025, a decrease largely due to a $29.0 million tax benefit from valuation allowance release in fiscal 2025.
• Non-GAAP net income for fiscal 2026 was $13.0 million ($0.48 basic, $0.47 diluted per share), up from $5.7 million ($0.20 per share) in fiscal 2025.
• Adjusted EBITDA for fiscal 2026 was $13.6 million (15% margin), compared to $8.6 million (10% margin) in fiscal 2025; Q4 fiscal 2026 Adjusted EBITDA was $2.2 million (10% margin) versus $4.5 million (19% margin) in Q4 fiscal 2025.
• GAAP gross margin for fiscal 2026 was 73% (up from 70% in fiscal 2025); Q4 fiscal 2026 GAAP gross margin was 72% (down from 73% in Q4 fiscal 2025).
• Non-GAAP gross margin for fiscal 2026 was 74% (up from 71% in fiscal 2025); Q4 fiscal 2026 Non-GAAP gross margin was 72% (down from 73% in Q4 fiscal 2025).
• Cash provided by operating activities for fiscal 2026 was $21.2 million, representing a 23% operating cash flow margin.
• Total cash and cash equivalents were $73.3 million as of June 30, 2026, compared to $62.9 million as of June 30, 2025.
• Deferred revenue was $46.478 million (current) and $2.062 million (non-current) as of June 30, 2026, compared to $48.765 million (current) and $1.766 million (non-current) as of June 30, 2025.
• Total shares repurchased in fiscal 2026 were approximately 1,607,000 at an average price of $7.16 per share, totaling $11.5 million.

Guidance and Future Outlook

• For Q1 fiscal 2027 (ending September 30, 2026), total revenue is expected to be between $20.9 million and $21.4 million; AI customer revenue is expected to be between $13.7 million and $14.0 million.
• Q1 fiscal 2027 GAAP net income is projected between $500,000 and $1.1 million ($0.02–$0.04 per share), including approximately $900,000 in stock-based compensation.
• Q1 fiscal 2027 Non-GAAP net income is projected between $1.4 million and $2.0 million ($0.05–$0.08 per share); Adjusted EBITDA is projected between $1.4 million and $1.9 million (7%–9% margin).
• For full fiscal 2027 (ending June 30, 2027), total revenue is expected to be between $84.5 million and $86.0 million; AI customer revenue is expected to be between $59.5 million and $60.5 million.
• Full fiscal 2027 GAAP net loss is projected between $2.0 million and $3.0 million ($0.08–$0.11 per share), including approximately $4.0 million in stock-based compensation.
• Full fiscal 2027 Non-GAAP net income is projected between $1.0 million and $2.0 million ($0.04–$0.07 per share); Adjusted EBITDA is projected between $650,000 and $1.4 million (1%–2% margin).
• Weighted average shares outstanding are expected to be approximately 26.6 million for Q1 fiscal 2027 and 26.8 million for full fiscal 2027.

Business Segments and Product Lines

• AI customer annual recurring revenue (ARR) grew 13% year-over-year and represented 72% of total SaaS ARR as of June 30, 2026.
• SaaS revenue for fiscal 2026 was $85.286 million (up 4% year-over-year); Professional services revenue was $5.850 million (down 10% year-over-year).
• Management described AI Knowledge as an emerging distinct operating layer in the enterprise, serving as infrastructure for other AI initiatives.

Market and Competitive Landscape

• eGain was named a Leader in Gartner's inaugural Magic Quadrant for Customer Service Knowledge Management Systems.
• Management stated the market is still early in recognizing the foundational nature of trusted knowledge infrastructure for enterprise AI.

Risks and Challenges

• The press release notes a managed decline in the profitable legacy business as a factor in total revenue growth.
• Forward-looking statements include risks such as the pace of generative AI advancements, market demand fluctuations, lengthy sales cycles, currency risks, and reliance on a relatively small number of customers.

Management Commentary and Tone

• CEO Ashu Roy characterized fiscal 2026 as a "pivotal year" and stated the company is "all in on the AI Knowledge opportunity" for fiscal 2027.
• Management noted that the Gartner validation validates the category and the company's position built over years.
• The tone indicates confidence in the AI Knowledge strategy despite a slight decline in total revenue driven by the legacy business transition.

Analyst Questions and Answers

• No specific analyst questions and answers are included in the provided press release text.

Other Key Points

• The fiscal 2025 GAAP net income included a significant one-time tax benefit of approximately $29.0 million from the release of a majority of the company's valuation allowance.
• The company utilizes specific definitions for AI customer ARR and AI customer revenue, which include all offerings associated with a customer, not solely AI offerings.
• Non-GAAP financial measures are presented for supplemental informational purposes, including adjustments for stock-based compensation, issuance of common stock warrants for services, and tax benefits related to valuation allowances.