eGain Corporation (NASDAQ:EGAN) Q2 2019 Earnings Conference Call Transcript

Feb 07, 2019 • 05:00 pm ET

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eGain Corporation (NASDAQ:EGAN) Q2 2019 Earnings Conference Call Transcript

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Presentation
Operator
Operator

Good day, and welcome to the eGain Fiscal 2019 Second Quarter Financial Results Conference Call. Today's conference is being recorded.

At this time, I would like to turn the conference over to Jim Byers of MKR Group. Please go ahead, sir.

Executive
Jim Byers

Thank you, operator, and good afternoon, everyone. Welcome to eGain's second quarter fiscal 2019 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 in the Company's reports filed in the Securities and Exchange Commission. eGain is making these statements as of today, February 7, 2019, 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 in this conference call, such as non-GAAP operating income. Our earnings press release can be found on the news release link on the Investor Relations page at eGain's website at www.egain.com. And 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. In addition, a replay of this conference call will also be available on the Investor Relations section of eGain's website.

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

Executive
Ashutosh Roy

Thank you, Jim, and good afternoon, everyone. We are very pleased to report a solid second quarter with strong performance on both the top and bottom line. And our execution continues to improve as we see positive momentum in the business.

Now let me share some financial highlights from the quarter. SaaS revenue growth for the quarter on a year-over-year basis was 53%. Subscription revenue growth year-over-year was 25%. Gross margin in the quarter was 69%, up from 65% in Q2 last year. In addition, we were GAAP profitable for the quarter. Net income of $2 million compared to a net loss in Q2 last year. And finally, given our results to date and positive momentum, we will raise our guidance for the year.

So looking at the business, we are optimistic about customer activity and demand we're seeing. Q2 included a healthy mix of new levels and expansion within the installed base. Our continued investment in customer success and products is paying off. We are now engaging our clients better than ever, and we are starting