Connect More Dots Investor Presentation - #1 Digital Customer Engagement Solution - eGain
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NASDAQ : EGAN
Connect More Dots
#1 Digital Customer Engagement Solution
Gartner & Forrester
Investor Presentation
Q1 FY22
SAFE HARBOR STATEMENT This presentation contains forward-looking statements within the meaning of the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995, including without limitation our financial guidance for the second quarter of fiscal 2022 ending December 31, 2021 and full year of fiscal 2022 ending June 30, 2022; our plans to continue our momentum and grow our market share; and expectations regarding our growth prospects. The achievement or success of the matters covered by such forward-looking statements, including future financial guidance, involves risks, uncertainties and assumptions, many of which involve factors or circumstances that are beyond our control. If any such risks or uncertainties materialize or if any of the assumptions prove incorrect, the Company’s actual results could differ materially from the results expressed or implied by the forward-looking statements we make, including our ability to achieve our targets for the second quarter of fiscal 2022 ending December 31, 2021 and full year of fiscal 2022 ending June 30, 2022. The risks and uncertainties referred to above include, but are not limited to: risks to our business, operating results, financial condition, and prospects from the COVID-19 pandemic and related economic downturns, including but not limited to, its effect on customer demand for the Company’s products and services and the impact of potential delays in customer payments; risks associated with new product releases and new services and products features; risks that customer demand may fluctuate or decrease; risks that we are unable to collect unbilled contractual commitments, particularly in the current economic environment ; risks that our lengthy sales cycles may negatively affect our operating results; currency risks; our ability to capitalize on customer engagement; risks related to our reliance on a relatively small number of customers for a substantial portion of our revenue; our ability to compete successfully and manage growth; our ability to develop and expand strategic and third party distribution channels; risks related to our international operations; our ability to continue to innovate; our strategy of making investments in sales to drive growth; general political or destabilizing events, including war, intensified international hostilities, conflict or acts of terrorism; the effect of legislative initiatives or proposals, statutory changes, governmental or other applicable regulations and/or changes in industry requirements, including those addressing data privacy, cyber-security and cross- border data transfers; and other risks detailed from time to time in eGain’s public filings, including eGain’s annual report on Form 10-K filed on September 10, 2021 and subsequent reports filed with the Securities and Exchange Commission, which are available on the Securities and Exchange Commission’s web site at www.sec.gov. These forward-looking statements are based on current expectations and speak only as of the date hereof. The Company assumes no obligation and does not intend to update these forward-looking statements, except as required by law. These forward-looking statements are based on current expectations and speak only as of November 9, 2021. The Company assumes no obligation and does not intend to update these forward-looking statements, except as required by law. NASDAQ: EGAN Q1 FY22 INVESTOR PRESENTATION 2
WHO WE ARE
Top-rated,
knowledge-powered
customer engagement platform
for enterprise and gov
NASDAQ: EGAN Q1 FY22 INVESTOR PRESENTATION 3
WH O W E A R E
AT A GLANCE
COMPANY OVERVIEW FINANCIAL SNAPSHOT (FY2022 Q1)
1997 ~180 ~600 $21.5M 25% 112%
Founded SaaS Customers Employees TOTAL REVENUE SAAS REVENUE TTM SAAS CUSTOMER
CAGR PAST 3 YEARS NET RETENTION1
Enterprise Clients
Financial services, telco, retail, health, government
14% $7M $70M
ADJUSTED CASH FROM CASH ASSETS
Sunnyvale, CA EBITDA OPERATIONS NO DEBT
Global offices in UK & India
MISSION INVESTING FOR GROWTH
Automate Customer Engagement Sales & Marketing investment up 25% YoY
1 Net Retention is the percentage of SaaS ARR retained from existing customers in a defined time period, including expansion revenue, downgrades, and cancels.
NASDAQ: EGAN Q1 FY22 INVESTOR PRESENTATION 4
THE TIME IS NOW
The market opportunity
is massive and we are
in position to dominate
NASDAQ: EGAN Q1 FY22 INVESTOR PRESENTATION 5
MASSIVE MARKET DISRUPTED BY 3 MEGATRENDS…
THE TIME IS NOW
Voice to
Digital Shift
Automation
On-Prem to
with AI and
Cloud Shift
Knowledge
$19.4 B
Customer
Service Gartner Market Share: Customer
Market
Experience and Relationship
Management, Worldwide, 2019
NASDAQ: EGAN Q1 FY22 INVESTOR PRESENTATION 6
…ACCELERATED BY COVID-19
THE TIME IS NOW
Automation
Voice to Digital
with AI and
Shift
Knowledge
Guidance and
On-Prem to Compliance
Cloud Shift for Hybrid
$19.4 B Workforce
Customer
Service
Market
Gartner Market Share: Customer
Experience and Relationship
Management, Worldwide, 2019
NASDAQ: EGAN Q1 FY22 INVESTOR PRESENTATION 7THE TIME IS NOW
Growing Knowledge Gap in the Enterprise
Knowledge silos increasing in the enterprise, not decreasing
Businesses (and partners) struggle with complexity and fragmentation
Functional platforms create new knowledge silos – CRM, CC, UC, ITSM, HR…
Knowledge unification (with personalization) is a critical unaddressed need
NASDAQ: EGAN Q1 FY22 INVESTOR PRESENTATION 8WHAT WE DO MATTERS
Gartner analysts cite Knowledge
Management (KM) as the #1
technology for enhancing the three
main customer service perspectives of
operational performance, CX and
employee experience
NASDAQ: EGAN Q1 FY22 INVESTOR PRESENTATION 9WHA T WE DO MA TTERS
EGAIN PRODUCT IS TOP-RATED
#1 #1
Digital Engagement + Current Product
Knowledge Management + Offering
Engagement Automation —
— Forrester New Wave Report on
Digital-first Customer Service, 2020
Gartner Critical Capabilities Report
on Customer Engagement, 2021
NASDAQ: EGAN Q1 FY22 INVESTOR PRESENTATION 10WHA T WE DO MA TTERS
HOW WE MAKE IT HAPPEN
180+ enterprises
use our platform to engage customers every day
Social SMS
Chat App
Google
Email Business
Virtual Messaging
Assistant Twitter
DM
Apple
Voice Business
CUSTOMER ENGAGEMENT PLATFORM Chat
Facebook
WSS Portal
CONVERSATION HUB | KNOWLEDGE HUB | ANALYTICS HUB Messenger
AI + ML
Website IVR
ECOMMERCE • CRM • CMS • INTRANET • CC TELEPHONY 11WHA T WE DO MA TTERS
WHAT SETS US APART
Knowledge Digital-first, Composable, Innovation
Management + AI Omnichannel Secure Platform at Scale + Speed
Parallel reasoning Conversation Hub, Integrated with Unique “innovation
— BYOB architecture Cisco, Avaya, in 30 Days” offer
Personalized — Amazon, Genesys —
content Virtual Assistance — Deep analytics to
— across touch points Connectors to SFDC, measure & optimize
Machine learning — MS Dynamics, SAP, —
— Modern advisor SNOW, Adobe Turnkey virtual
Built-in collaboration desktop — coach solution for
Open APIs financial services
99.9%+ Cloud Uptime Over Past 15 Years
—
Built on AWS and Azure IaaS. PCI, HIPAA, SOC2, FedRAMP Compliant
NASDAQ: EGAN Q1 FY22 INVESTOR PRESENTATION 12INDUSTRY LEADING CUSTOMERS
WHA T WE DO MA TTERS
F I NANCIAL S E R V I CE S T E LE C O M R E T A IL & F E D E R AL & S T A T E H E A LTHCARE
& I N S URANCE & MEDIA MA N UFACT URING GOV E RNE M E NT
NASDAQ: EGAN Q1 FY22 INVESTOR PRESENTATION 13WE DELIVER WOW
We deliver quick value
and easy innovation to
transform CX
NASDAQ: EGAN Q1 FY22 INVESTOR PRESENTATION 14WE DELI VER WO W
CASE STUDY: PAYLOCITY
“Easy Self-Service, Empowered Agents” CLIENT SUCCESS
35%
CHALLENGE
• Hyper growth
• Proliferating products Better first-time
• Increasing need to escalate to experts right answer
SOLUTION
• Web self-service to deflect assisted service requests
• Knowledge and AI guidance portal within Salesforce desktop 67%
• Knowledge embedded in SaaS products for in-band answers Better time
to answer
60%
EGAIN SOLUTION
Better agent
confidence in answer
Contact Knowledge AI Process
Center Guidance
NASDAQ: EGAN Q1 FY22 INVESTOR PRESENTATION 15WE DELI VER WO W
CASE STUDY: IRS
“Modernizing Taxpayer Engagement” CLIENT SUCCESS
CHALLENGE
• 20 million unanswered phone calls per year
• Long phone hold times and in person office wait times
400%
More taxpayers
• Answers given to taxpayers were inconsistent
handled per hour
SOLUTION
70%
• Modernized taxpayer communications with secure messaging
• Virtual assistant guides taxpayers and IRS employees to self-service
• Chat supports general queries, applications, and payment options Call deflection
using Knowledge
EGAIN SOLUTION
25%
Reduction in overall case
handle time
Virtual Assistant Chat Mail Analytics Self Service Knowledge
NASDAQ: EGAN Q1 FY22 INVESTOR PRESENTATION 16WHO ELSE IS OUT THERE
eGain is the industry leader
according to Gartner and
Forrester
NASDAQ: EGAN Q1 FY22 INVESTOR PRESENTATION 17WHO ELSE I S O UT THERE
WHAT ELSE IS OUT THERE
Many competitors claim to do what we do, but when it comes down to it,
they all have major gaps compared to our full solution suite.
CATEGORY eGain Liveperson Genesys Zendesk SFDC
CEC Suite
Mobile Apps. For Customer Service
KM for Customer Service
Customer Self-Service Suite
Virtual Customer Assistants
Consumer Messaging Apps
Live Chat
Co-Browsing
Recorded Video
Performance Management
Source: The Gartner Customer Service Technology Vendor Guide, 2019
NASDAQ: EGAN Q1 FY22 INVESTOR PRESENTATION 18FY22Q1 HIGHLIGHTS
20% SaaS growth in FY22Q1
driven by increased demand
from new and existing
customers
NASDAQ: EGAN Q1 FY22 INVESTOR PRESENTATION 19Q1 FY22 HIGHLIGHTS
Q1 FY22 FINANCIAL HIGHLIGHTS
METRIC PERFORMANCE (year-over-year)
SaaS revenue $19.2 million, up 20%
Total revenue $21.5 million, up 13%
Non-GAAP Gross Margin 78%, compared to 76%
GAAP net income $0.6 million, or $0.02 per diluted share
Non-GAAP net income $2.7 million, or $0.08 per diluted share
Cash from operations $7.2 million, or 33% cash flow margin
Cash and equivalents $70.4 million, up 33%
NASDAQ: EGAN Q1 FY22 INVESTOR PRESENTATION 20FY22Q1 HIGHLIGHTS
POSITIVE ENTERPRISE SAAS METRICS
H I GH- E ND G R O WING A RR P E R GR OWING CU S T O ME R
CUSTOMER BASE S A A S C U S T O ME R SUCCESS
~90% ~$360k 122%
ARR1 is with large ARR1 TTM
$1B+ annual per SaaS
revenue enterprise SaaS Net expansi on
clients and customer rate 2
government orgs
1Excluding OEM
2 NetExpansion Rate is calculated as the ARR at the end of the period for the base set of customers from which we had ARR at the beginning of the
period, divided by the ARR at the beginning of the period for the same customer base.
NASDAQ: EGAN Q1 FY22 INVESTOR PRESENTATION 21FY21 HIGHLIGHTS
SAAS GROWTH + MARGIN EXPANSION + STRONG CASH FLOW
S A A S R E V E N UE G R O S S M A R GIN O P E R AT ING C A S H A N D MA RGIN
76%
72%
68%
65%
19%
11% 18%
$66.9
$56.8 $59.4 10%
$44.8
$52.1
$32.7 $46.0 $14.1 $13.9
$39.6 $6.6 $7.0
FY18 FY19 FY20 FY21 FY18 FY19 FY20 FY21 FY18 FY19 FY20 FY21
$ IN MILLIONS $ IN MILLIONS $ IN MILLIONS
NASDAQ: EGAN Q1 FY22 INVESTOR PRESENTATION 22WHERE WE’RE GOING
We intend to be the
#1 Customer Engagement
Automation Company
NASDAQ: EGAN Q1 FY22 INVESTOR PRESENTATION 23WHERE WE’ RE GO I NG
INVESTING TO GROW FASTER
Enter adjacent
Acquire new markets
Retain and expand enterprise SaaS logos
enterprise SaaS clients
Ramp investment
in sales & marketing
• Drive knowledge hub
• Focus sales hires on new standardization across
logo acquisition the enterprise, beyond
customer service
• Expand in our 180 plus • Expand connectors to
• Sales and marketing CRM and CC platforms • Virtual Financial Coach,
enterprise SaaS accounts
investment increased to tap new market pools a vertical solution for
with more investment in
25% year over year mid-market. Added 33
PS & managed services • Develop SI partnerships new mid-market logos
to penetrate G1000 since debut in Mar 21
• Currently expect
FedRAMP certification by
CY21 end to grow in gov
NASDAQ: EGAN Q1 FY22 INVESTOR PRESENTATION 24WHERE WE’ RE GO I NG
TARGET OPERATING MODEL
Investments expected to accelerate revenue growth trajectory
I n t e ri m Lo n g T e rm
Q1 T a rg e t T arge t
FY2021
FY2022 Model Mo d e l
(1 – 2 y e a rs) (3 – 5 y e a rs)
Total Revenue Growth 8% 13% 15% 25%
Non-GAAP Gross Margin1 76% 78% 76% 81%
S&M1 32% 32% 38% 38%
R&D1 22% 24% 24% 20%
G&A1 10% 8% 10% 8%
Adjusted EBITDA1 12% 14% 4% 15%
1. As of % revenue and excludes depreciation, intangibles amortization, stock-based compensation and unusual transactions.
NASDAQ: EGAN Q1 FY22 INVESTOR PRESENTATION 25KEY TAKEAWAYS
Multi-billion market Knowledge, AI & Digital #1 Digital Customer
undergoing digital driving demand for our Engagement Solution
transformation Platform —
Gartner & Forrester
Proven, scalable solution Accelerating top-line
delivers quick value growth in FY22
NASDAQ: EGAN Q1 FY22 INVESTOR PRESENTATION 26© 2021 eGain Corporation. All rights reserved. NASDAQ: EGAN Q1 FY22 INVESTOR PRESENTATION 27
APPENDIX NASDAQ: EGAN Q1 FY22 INVESTOR PRESENTATION 28
APPENDIX
GAAP P&L LAST 5 QUARTERS
$ in thousands
For the Period Ending Q1FY21 Q2FY21 Q3FY21 Q4FY21 Q1FY22
Subscription 17,747 17,699 18,078 18,846 20,145
Professional services 1,316 1,534 1,665 1,402 1,306
Total Revenue 19,063 19,233 19,743 20,248 21,451
Cost of revenue 4,631 4,711 4,846 5,076 5,298
Gross Profit 14,432 14,522 14,897 15,169 16,153
Gross Profit % 76% 76% 75% 75% 75%
Research and development 4,505 4,508 4,371 4,549 5,609
Sales and marketing 5,631 6,266 6,927 7,176 7,404
General and administrative 1,944 1,852 2,022 1,930 2,449
Total Operating Expense 12,080 12,626 13,320 13,655 15,462
Operating Income 2,352 1,896 1,577 1,514 691
Interest income 3 2 5 2 2
Currency exchange gain/(loss)
Other non-operating income/(exp.) (163) (160) (378) 144 10
EBT 2,192 1,738 1,204 1,660 703
Income tax benefit/(provision) (148) (132) 57 388 (152)
Net Income 2,044 1,606 1,261 2,048 551
NASDAQ: EGAN Q1 FY22 INVESTOR PRESENTATION 29APPENDIX
GAAP TO NON-GAAP RECONCILIATION
$ in thousands Q1 FY21 Q2 FY21 Q3 FY21 Q4 FY21 Q1 FY22
Gross profit $14,432 $14,522 $14,897 $15,169 $16,153
Gross profit % 76% 76% 75% 75% 75%
Stock-based compensation expense 74 80 88 83 518
Amortization of acquired intangible assets 26 0 0 0 0
Non-GAAP gross profit $14,532 $14,602 14,985 15,252 16,671
Non-GAAP gross profit % 76% 76% 76% 75% 78%
Operating income $2,352 $1,896 $1,577 $1,514 $691
Stock-based compensation expense 470 426 368 436 2,107
Amortization of acquired intangible assets 26 0 0 0 0
Non-GAAP operating income $2,848 $2,322 $1,945 $1,950 $2,798
NASDAQ: EGAN Q1 FY22 INVESTOR PRESENTATION 30APPENDIX
GAAP TO NON-GAAP RECONCILIATION
in thousands Q1FY21 Q2FY21 Q3FY21 Q4FY21 Q1FY22
GAAP Cost of subscription $3,222 $3,248 $3,341 $3,696 $3,487
Stock-based compensation expense - - - - -
Amortization of acquired intangible assets (26) - - - -
Non-GAAP cost of subscription $3,196 $3,248 $3,341 $3,696 $3,487
GAAP Cost of professional services $1,409 $1,463 $1,505 $1,383 $1,811
Stock-based compensation expense (74) (80) (88) (83) (518)
Amortization of acquired intangible assets - - - - -
Non-GAAP cost of professional services $1,335 $1,383 $1,417 $1,300 $1,293
GAAP research and development $4,505 $4,508 $4,371 $4,549 $5,609
Stock-based compensation expense (158) (144) (92) (115) (540)
Amortization of acquired intangible assets - - - - -
Non-GAAP research and development $4,347 $4,364 $4,279 $4,434 $5,069
GAAP sales and marketing $5,631 $6,266 $6,927 $7,176 $7,404
Stock-based compensation expense (133) (175) (169) (182) (509)
Amortization of acquired intangible assets - - - - -
Non-GAAP sales and marketing $5,498 $6,091 $6,758 $6,994 $6,895
GAAP general and administration $1,944 $1,852 $2,022 $1,930 $2,449
Stock-based compensation expense (105) (27) (19) (56) (540)
Amortization of acquired intangible assets - - - - -
Non-GAAP general and administration $1,839 $1,825 $2,003 $1,874 $1,909
NASDAQ: EGAN Q1 FY22 INVESTOR PRESENTATION 31APPENDIX
GAAP TO NON-GAAP RECONCILIATION
$ in thousands Q1FY21 Q2FY21 Q3FY21 Q4FY21 Q1FY22
Net income $2,044 $1,606 $1,261 $2,048 $551
Depreciation and amortization expense 93 106 114 115 111
Stock-based compensation expense 470 426 368 436 2,107
Interest expense (income), net (3) (2) (5) (2) (2)
Income tax provision (benefit) 148 132 (57) (388) 152
Amortization of acquired intangible assets 26 0 0 0 0
Severance and related charges 11 0 0 3 13
Adjusted EBITDA $2,789 $2,268 $1,681 $2,212 $2,932
% of total revenue 15% 12% 9% 11% 14%
NASDAQ: EGAN Q1 FY22 INVESTOR PRESENTATION 32APPENDIX
BALANCE SHEET
$ in thousands as of: SEP-30-2021 Jun-30-2021 $ in thousands as of: Sep-30-2021 Jun-30-2021
Current Assets Current Liabilities
Cash and Cash Equivalents 70,414 63,231 Accounts Payable 1,721 3,068
Accounts Receivables 11,400 26,311 Accrued Expenses 9,578 12,795
Prepaid & Other C/A 4,514 5,129 Operating Lease Liabilities 1,328 1,466
Restricted Cash 7 7 Deferred Revenue 40,590 46,211
Total Current Assets 86,335 94,678 Total Current Liabilities 53,217 63,541
Non-Current Assets Non-Current Liabilities
PPE, Net 751 705
Operating Lease Liabilities, Net of
Operating lease right-of-use assets 4,696 2,191 Current 3,348 797
Goodwill 13,186 13,186 Deferred Revenue, Net of Current 2,720 3,332
Intangible Assets, Net 0 0 Other Long-term Liabilities 830 832
Other Assets, Net 4,175 3,803 Total Non-Current Liabilities 6,898 4,961
Total Assets 109,143 114,563
Shareholders' Equity
Common Stock 31 31
APIC 379,555 377,141
Retained Earnings (330,558) (331,109)
Total Shareholders Equity 49,028 46,061
Total Liabilities & Shareholders Equity 109,143 114,563
NASDAQ: EGAN Q1 FY22 INVESTOR PRESENTATION 33You can also read
