eGain announces financial results for the second fiscal quarter ended December 31, 2006
Mountain View, Calif. (February 12, 2007) - eGain Communications (OTC BB: EGAN.OB), a leading provider of customer service and contact center software, today announced financial results for the second fiscal quarter ended December 31, 2006.
Total revenue for the second quarter of fiscal year 2007 was $5.7 million, a decrease of 5% from the comparable year-ago quarter. License revenue was $850,000, a decrease of 58% from the comparable year-ago quarter. Support and services revenue was $4.8 million, an increase of 21% from the comparable year-ago quarter.
Cost of revenue for the second quarter of fiscal year 2007 was $2.2 million, an increase of 30% from the comparable year-ago quarter. Gross margin for the quarter was 61% compared to 72% in the comparable year-ago quarter. Research and development expense for the quarter was $833,000, an increase of 18% from the comparable year-ago quarter. Sales and marketing expense for the quarter was $2.9 million, an increase of 29% from the comparable year-ago quarter. General and administrative expense for the quarter was $484,000, a decrease of 38% from the comparable year-ago quarter.
Net loss for the second quarter of fiscal year 2007 was $1.1 million, or $(0.07) per share, compared to a net income of $245,000, or $0.02 per share, for the comparable year-ago quarter. Net loss for the quarter included stock-based compensation of $77,000 and interest and tax expense of $330,000 compared to stock-based compensation expense of $75,000 and interest and tax expense of $313,000, for the comparable year-ago quarter.
Total cash and cash equivalents were $6.0 million at December 31, 2006 compared to $6.9 million at June 30, 2006. Days sales outstanding in receivables for the quarter ended December 31, 2006 were 41 days compared to 75 days for the comparable year-ago quarter. Deferred revenues totaled $5.2 million at December 31, 2006, up from $4.3 million at June 30, 2006.
“We are disappointed that several large transactions we had forecast to close in the quarter slipped but our sales team is working diligently to bring these deals to closure in the current quarter” said Ashu Roy, eGain CEO. “Despite this short-term disappointment, we are pleased with the growth in our recurring revenue base which is due in part to the increase in hosting bookings we have experienced in recent quarters. The planned ramp-up in hiring of our direct sales force is complete. We are also very focused on training the expanded sales team to get them productive as quickly as possible. Lastly, we are pleased to report that we successfully delivered the first major milestone under the Cisco OEM agreement and we are continuing our channel development to support this important relationship.”
Business highlights
Over the last six months, eGain has continued to invest in its sales force by adding headcount, ramping up its European presence, and structuring the sales force into industry verticals and geographic groups.
eGain successfully released eGain Service™ 7.6, a product eGain jointly conceived and developed with its blue chip customers. With nine new applications, Service 7.6 is the first to address short message service (SMS) customer service interactions, as well as next-generation web self-service including chat bot, agent-assisted chat, cobrowsing, email, fax, postal mail, notification management, call tracking and resolution, knowledge management, and service fulfillment, all based on a common platform.
eGain’s offerings continue to be one of the most acclaimed in the industry. eGain recently won Customer Interaction Solutions magazine’s Product of the Year award, and was named to Software Magazine’s Software 500 list. In addition, eGain’s deployment at ABN AMRO was selected as an InfoWorld 100 award winner.
The company also made significant progress in laying the foundation for expanding its partnerships and distribution channels. The company joined the EMC Documentum Application Developer Program. As an EMC Documentum partner, eGain will receive specialized design consultation and guidance, along with access to dedicated Documentum technical resources to ensure that the integration of eGain’s customer interaction hub (CIH) software suite with Documentum’s solutions meet the highest quality standard. In addition, the company entered into several new partnerships in Europe and Africa, including agreements with 4C Consulting to cover customer service project implementations in Belgium and France and with HappyCustomers to collaborate on customer service project implementations in the Netherlands.
Finally, the company held its annual customer summit in November 2006 with active participation from customers and industry thought leaders.
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