eGain Corporation

Good day and welcome to the EGAIN Fiscal 2022 Third Quarter Financial Results Conference Call. Today's conference is being recorded. At this time, I'd like to turn the conference over to Jim Byers, MKR Group. Please go ahead.

Thank you, Operator, and good afternoon, everyone. Welcome to EGAIN's Third Quarter Fiscal 2022 Financial Results Conference Call. On the call today are EGAIN's Chief Executive Officer, Ashu Roy. and Chief Financial Officer Eric Smith. 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. These 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 with the Securities and Exchange Commission. EGAIN is making these statements as of today, May 5, 2022. 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 discuss certain non-GAAP financial measures such as non-GAAP operating income. 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. Our earnings press release can be found by clicking the press release link in the investor relations page of eGain's website at eGain.com. Along with the earnings release, we have also posted an updated investor presentation on the investor relations page of eGain's site. And lastly, a phone replay of this conference call will be available for one week. And now with that said, I'd like to turn the call over to eGain's CEO, Ashu Roy.

Thank you, Jim. And hello, everyone. We executed well to deliver another quarter of record revenue in the third quarter. Our total revenue was $23.9 million, up 21% year-over-year, and up 4% sequentially from our record revenue in Q2. Revenue was ahead of our guidance and street consensus, and our quarterly SaaS revenue grew 23% year-over-year. Finally, we were cash flow positive, ending the quarter with more than $70 million in cash. So that was nice. Let me share some notable new SaaS wins for the quarter. We had some good ones. A leading crypto exchange selected our Knowledge Hub to deliver customer service across the globe in compliance with country-specific regulations. Another one, a Fortune 500 investment management firm selected us to replace a legacy knowledge solution. Another one, a global vehicle leasing business, it's a multi-billion-dollar business, selected EAN knowledge, again, to improve agent experience. Another one, this one, a state agency in the U.S. responsible for workforce development selected us to deliver better citizen service. And then one more I want to bring out, which is not a new logo for us, but moved from our on-premise solution to the latest and greatest in the eGain Cloud, but this is a top five U.S. insurance company where we have been serving them in the on-premise world. As you know, we have a few customers left in that mode, and this one now has decided to move to the eGain Cloud, so that was good for us. Overall, our demand is is still good in the enterprise, particularly in sectors like financial services, insurance, healthcare, and government. On the demand side, our sales team, as planned, continues to grow. We have now hired two cohorts this fiscal year, one in the first quarter and one in Q3. The first cohort is now shaping up. We believe they will start running new logos early in the coming fiscal year. The second thing which is interesting on the demand side is that with our FedRAMP certification, We are now seeing increasing interest in the government sector, both federal and state, both direct as well as through partners. So I know that that was a big investment for us, and we are one of the very few providers with a combination of knowledge and digital capabilities that is FEDTRAMP certified. So this is an area that we believe will work out well for us. Another area which is going as planned is the whole expanded contact center ecosystem partnerships with all the connectors that we have. As you all may recall, we talked about the connector we added last quarter, 459. So we are now connected for our knowledge solution, we are connected pretty much to all the significant enterprise contact center providers. And with that expansion, we are now seeing more activity in that CCAS market. The way it is is that more and more of these contact center RFPs seem to require not just digital channels alongside voice, but also agent-facing knowledge. And so that's an interesting one for us in terms of demand growth. And then the final one I want to bring out, which is relatively new, but it's kind of interesting and exciting, that we're building a couple of new partnerships with global system indicators. These are focused around common enterprise clients and some new opportunities. And it is early days, but the potential is high. And the fit is good, so we are excited, we are investing. Just something that is another iron in the fire for us as we drive our growth. On the product front, in April, we released the first version of our eGain marketplace for partners to certify and publish apps on the eGain platform. At the same time, we refresh the eGain developer portal with enhanced APIs, SDKs, and event models. This is a significant milestone for us because it provides us the foundation to launch new product-led growth initiatives in the medium term, and in the short term, benefit from the ecosystem awareness effects. And I'm pleased to say that the partner interest is strong. In fact, we have several new apps that are already in the development pipeline. Also in April, we launched the eGain Knowledge Academy, a part of the eGain University, our online learning center for customers. What's new and different about the Knowledge Academy is that using the usual self-paced learning content and techniques, focuses on teaching knowledge management practitioners how to solution, how to implement, and how to operate on the eGain knowledge platform. This is not about features and functionality. It's about how to make it easy for practitioners and also partners to solution, implement, and operate. As far as we know, this academy is the first of its kind in the knowledge space. Now, just to step back, we've made these investments in response to what we see as a gap in the market of knowledge. Now, we have shared this before with all of you. Knowledge management as a technology is recommended by Gartner Research as the number one investment area for technology in customer service in 2022. At the same time, we feel that the corresponding rate of knowledge technology adoption is still limited by the lack of what we believe is lack of whole product capabilities around knowledge management beyond the functionality. So now with our triad of this knowledge academy, the new partner marketplace, and the enhanced developer portal, We believe that we are now going to go beyond just functionality, which we do feel we have a strong advantage in, but to go to the next level of offering the whole product capability to help clients easily select, implement, and adopt knowledge platforms, of course, focusing on the EA platform. This is a big shift for us. That whole ecosystem enablement, big step up. In conclusion, we are pleased with our overall execution over the last couple of quarters. And despite the macro headwinds, which we are all very familiar with, as far as we can see, demand for technology for effective desktop tools for customer service and contact center agents still seems to be strong. And so our knowledge-powered portfolio benefits from that. Moving forward, we are going to continue to invest in brand awareness and sales expansion, as we have said before. And underpinned by the platform build-out, which we just talked about around the marketplace and the academy and the developer portal, which will lead to ecosystem expansion, we believe that this is going to help us accelerate our top-line growth. With that, I'll ask Eric Smith, our Chief Financial Officer, to add more color around our financial operations. Eric?