For eGain It’s All About Subscription Revenue

The market for predictable revenue streams continues to heat up and when a CEO is focused on growing those streams, investors take notice. eGain has been around since the late 1990s and went public fairly early in the company’s lifecyle. When it was slow to transition to a SaaS model, public investors were quick to penalize the Company, which saw a marked decline in market capitalization. These days the organization is hyper focused on growing subscription revenue and quickly.

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eGain provides customer engagement solutions for leading business to consumer brands. It is powered by virtual assistance, AI, knowledge and analytics. The comprehensive suite it offers assists clients in delivering memorable, digital-first customer experiences in an omnichannel world. It’s recognizable customers include Virgin, Barclays, Vodafone and Rust-oleum. Recently, the company announced its Q4 2019 financial results and showed a 37% growth in SaaS Revenue for Fiscal 2019, which exceeds full year revenue guidance.

eGain Chairman and CEO Ashutosh Roy was particularly positive in announcing the news, “Let me share some financial highlights from the full year. We grew our SaaS revenue 37% over the prior year to almost $45 million. Our subscription revenue grew 17% year-over-year to $60 million and comprised 89% of our total revenue. We were GAAP profitable, with net income of $4.2 million compared to a net loss for the prior year and our non-GAAP net income increased to $6.2 million…”

He later went on to discuss more about the company’s business dynamics and what was driving its growth. He shares a client example, “Using rich capabilities in the eGain platform for virtual assistant, chat and cobrowse, we rolled out in three months a new solution for their website and mobile properties. The solution delivered over 50% automated service resolution rates and improved NPS, in their latest tax season in 2019. Since then, this clients has rolled out two more virtual assistants on the eGain platform, one for enterprise-facing IP and another for human resources, each time improving their compact deflection rates. So much so -- that now the client is standardizing on the eGain platform across its entire business. All this was delivered at scale in less than nine months.”

eGain’s path to the success it’s experiencing today was not without its challenges. For an extended period of time, its stock price was held down by a gravitational pull some thought it would never escape. In fact in early 2017, its stock was less than $1.50. But the company persisted on its quest for more subscription revenue and it looks like they’ve truly turned the corner.

CFO Eric Smit comments, “Looking ahead, our customer base, we believe is healthy. We see a strong market demands in particular with our partner ecosystem, then in this large and growing markets. And with our strength -- strengthened balance sheet, we are beginning to increase that investment in sales, marketing and product development, which we believe will allow us to capture market share in fiscal 2020 and beyond.”