EGain Announces Fiscal 2012 First Quarter Financial Results

eGain Communications, a leading provider of cloud and on-premise customer interaction hub software, today announced financial results for its fiscal 2012 first quarter ended September 30, 2011.

The strong growth in our recurring revenue

"We are pleased with the strong growth in our recurring revenue, especially our hosting revenue which was up 38% year-over-year," said Ashutosh Roy, eGain's CEO. "We knew it would be difficult to match new bookings from the year-ago quarter, which included signing the largest license deal in the company's history. But, during our bookings are off to a seasonally slow start, our sales pipeline is building nicely for the year. We see good demand for our eGain 10 offering that features an interactive sales suite unified with robust multichannel service. Our direct sales expansion is proceeding to plan. We expect to double our sales capacity in calendar 2011."

Fiscal first quarter total revenue was $10.4 million, a decrease of 21% from the comparable year-ago quarter. License revenue for the fiscal first quarter was $2.9 million, a decrease of 61% from the comparable year-ago quarter. The year-over-year decrease in total and license revenue is directly attributable to a large one-time license fee received in the first quarter of fiscal 2011 that represented the largest license agreement in the company's history. Recurring revenue for the fiscal first quarter was $5.8 million, an increase of 30% over the comparable year-ago quarter. Professional services revenue for the fiscal first quarter was $1.7 million, an increase of 35% from the comparable year-ago quarter.

The fiscal first quarter

Gross profit for the fiscal first quarter was $7.6 million, a decrease of 29% from the comparable year-ago quarter. Gross margin for the fiscal first quarter decreased to 73%, from 81% in the comparable year-ago quarter. This decrease was due to the decrease in license revenue as a percent of total revenue. The gross margins for both recurring revenue and professional services improved when compared to the year-ago quarter. The recurring revenue gross margin for the first fiscal quarter increased to 78%, from 72% in the comparable year-ago quarter. The professional services gross margin for the first fiscal quarter increased to 10%, from 4% in the comparable year-ago quarter.

Total cash and cash equivalents increased to $15.4 million at September 30, 2011, from $12.4 million at June 30, 2011. Cash provided by operations was $4.3 million for the fiscal first quarter, compared to cash used in operations of $600,000 for the comparable year-ago quarter. Deferred revenue increased to $7.0 million at September 30, 2011, compared to $5.8 million at June 30, 2011.

(1) We define Gross Bookings as contractual commitments received by the company. We define New Bookings as new contractual commitments received by the company. Such contracts are not cancelable for convenience nevertheless may be subject to termination by our clients for cause or breach of contract by us. As we offer a hybrid delivery model, the mix of new hosting and license business in a quarter could have an impact on our revenue in a particular quarter. Due to effects that these trends have on our short-term revenue and profitability, we believe that it is useful to disclose the bookings detail in this and future financial releases. We use these bookings metrics internally to focus management on the productivity of the sales team and period-to-period changes in our core business. Conclusively, we believe that this information is meaningful and helpful in allowing individuals to better assess the ongoing nature of our core operations.

The leading provider of customer service

About eGain Communications Corporation eGain is the leading provider of customer service and contact center software for cloud and on-premise deployment. Trusted by prominent enterprise worldwide, eGain has been helping businesses achieve and sustain customer service excellence for more than a decade.

Note: eGain is a registered trademark, and the other eGain product and service names appearing in this release are trademarks or service marks, of eGain Communications Corp. All other company names and products are trademarks or registered trademarks of their respective companies.