eGain Corporation

Good day, and welcome to the eGain Fiscal 2026 Third Quarter Financial Results Call. All participants will be in a listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key, followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star, then one on a touch-tone phone. To withdraw your question, please press star, and then two. Please note this event is being recorded. I would now like to turn the conference over to Jim Byers, Pondell Wilkinson, Investor Relations. Please go ahead.

Jim Byers Thank you, operator, and good afternoon, everyone. Welcome to EGAIN's Fiscal 2026 Third Quarter Financial Results Conference Call. On the call today are EGAIN's Chief Executive Officer, Ashley Roy, and Chief Financial Officer, Eric Schmidt. 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 report filed with the Securities and Exchange Commission. eGAIN is making these statements as of today, May 14th, 2026, 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, such as non-GAAP operating income. The tables included with the earnings press release include a reconciliation of the historical non-GAAP financial measures to the most directly comparable GAAP financial measures. eGain's earnings press release can be found by clicking the press releases link on the investor relations page of eGain's website at eGain.com. And along with the earnings release, we will post an updated investor presentation to the investor relations page of eGain's website. 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 good afternoon, everyone. Thanks for joining us. We delivered a strong third quarter with continued momentum in our AI knowledge business, driven by customer expansion, growing partner engagement, and new products. Revenue was in line with expectations, and profitability remained strong. Year-to-date, our AI knowledge ARR has grown 26%, and we have generated $18.7 million in operating cash flow year-to-date, which is a 27% margin. Let me share some of the interesting highlights that we are seeing in the business. In the last 60 days, we've seen a meaningful increase in RFP activity in the U.S., most of it from Fortune 1000 BFSI, which is banking and insurance and healthcare enterprises. These RFPs almost always seem to focus on AI readiness of knowledge, an open architecture for APIs and MCPs and deep integration into the customer service, customer experience stack. Equally importantly, many of these RFPs are coming through our partners. Year to date, our partner source opportunities are up 67%. We see the growing interest in AI knowledge as a natural progression from an early adopter phase to an early majority phase. of the adoption curve. Knowledge management we see is being increasingly seen as a core AI infrastructure, a must-have, not a nice-to-have. Switching to customers, we had a very nice quarter for product adoption and expansion. These expansions reflect a pattern of customers standardizing on eGain as their enterprise knowledge platform. Let me highlight some examples. The first one is a top 10 U.S. insurance company. This client expanded from an initial deployment of about 3,000 licenses in one business unit to an additional 5,600 licenses in a second major business unit. This creates a single knowledge hub across these divisions, replacing the fragmented and siloed content and knowledge they had before. With this platform, the client is now establishing consistent taxonomy, knowledge workflows, and content lifecycle governance across these business units, while analytics and AI help them continuously refine knowledge. This client is also piloting AI agents which is one of our products for the contact center. I would buy the trusted knowledge coming from our platform. The second example I want to share is Top10 Global Airline. To support growth in their customer care department, the client has added licenses to ensure consistent knowledge access across all the new teams, reinforcing eGain as the single platform for knowledge-powered service and operational efficiencies. We're also seeing rapid follow-on expansion from newer clients. I'll give you a couple of examples. After selecting eGain to support a large-scale digital transformation a few months ago, this European financial services conglomerate is now expanding usage across other business units beyond customer service in the contact center to look at self-service options for all their touch points. Another example is a global engineering services leader. They initially deployed our solution for field service knowledge, and now they're expanding to assist all their service personnel, including contact centers and partners. Across these examples, there is a theme And that is that once we are deployed in a CX or customer service use case, the eGain platform naturally expands to become the centralized enterprise knowledge platform, both for AI and humans. Looking at product during the quarter, we introduced several innovations to deliver greater value in some of our strong verticals and also deepen our ecosystem integrations. First, we launched the eGain AI Knowledge Suite for retail banking. The solution is purpose-built for banks and credit unions to unify knowledge and enable AI-driven service and needs-based guided selling. Early clients like Rogue Credit Union are very excited about the positive user adoption and accelerated time for value, something they shared during a joint webinar last month. Then we introduced our AI agent for Cisco WebEx Contact Center, strengthening our proposition in the Cisco ecosystem. Third, we announced connectors into UCaaS platforms, Microsoft Teams, Slack, and Zoom Team Chat, all with the goal to enhance employee collaboration with the same trusted knowledge. These connectors will help our clients build knowledge once for CX use cases and then reuse it for employee-facing use cases across the business. And it's, again, a pattern that we're seeing emerging where we land into the CX world, which is customer service or contact center. And once we show our solution and deploy the success of that, then it drives customers. a natural extension of that knowledge platform across the rest of the use cases which are more employee-facing. Finally, we announced enterprise AI connectors to agentic development environments, including Copilot, Plod, Gemini, and Cursor. These connectors enable developers to tap into trusted knowledge managed within the eGain platform via APIs and MCP protocols. right from their favorite development environment as i said before this idea of a trusted government knowledge base and a hub is very compelling it connects and controls all the ai projects including prototypes and offers offers provenance explainability observability to developers and business users alike in the business they zoom out of the customers and specific products that we announced last quarter, all of us will agree that the pace of innovation is accelerating in the market, and so it is with eGain. We see lots of opportunity to increasingly automate the capture, curation, and consumption of knowledge, that loop, as it relates to customer service and contact centers in regulated businesses and companies with complex products. Last week, we hosted our annual Solve26 event in London. We have another annual event in Chicago in October, but this one is a European event in London for customers and partners. The event reinforced what we are seeing across the market. Trusted knowledge is becoming the essential foundation for enterprise AI. The reason is simple. Conventional wisdom says that knowledge is nothing more than unstructured data. Not true. Knowledge is the instruction layer for AI. It provides the what, the how, and occasionally the why that is used by the models to then deliver automated experiences that are reliable. To build these agentic systems, enterprises must first centralize, govern, and improve this knowledge. So, the quality of knowledge determines the quality of AI outcomes. This is especially important in customer service and contact centers, which represents one of the largest near-term opportunities for AI transformation. At the same time, our research shows that more than 80% of organizations are still in the very early stages of their AI knowledge maturity and transformation journey, and that creates a significant opportunity for eGain. At our Solve event, we also launched several new products beyond the ones we announced last quarter. And these help our clients consume the knowledge more easily in agentic workflows. They enable our clients to evaluate and ensure quality of the AI knowledge pipelines they're building, all the way from content to begin with and automated experiences that the AI tools deliver. We also launched an IBA product, which brings accurate conversational self-service to the voice channel. And finally, we announced an AI agent for Salesforce version 2, which is a pluggable solution that activates our AI agent with full context of Salesforce content and data within the Salesforce Service Cloud desktop. Customers and partners love the new capabilities, and what they appreciated the most was their fellow customers sharing their knowledge journey and AI ROI stories. Customers like Acmea, BT, PMI, Specialized Bikes, WorldPay, they shared their insights, including tips and tricks. Very, very valuable for attendees. And for us, it was gratifying and inspiring. On the team front, during the quarter, we strengthened our leadership team with the appointment of Steve Pappas as head of innovation. He brings deep expertise in knowledge management, AI, and customer experience, along with a strong track record of scaling enterprise SaaS businesses with a sharp focus on helping clients modernize their knowledge in architecture. His leadership will help us deliver more consumable innovation and accelerate market expansion as we continue to shape the AI knowledge category. To conclude, we delivered strong financial performance standard within customers, and are building a high-quality pipeline driven by growing enterprise demand for AI-powered knowledge. As the market increasingly recognizes trusted knowledge as the foundation for enterprise AI, we are well-positioned to lead this category. With that, I'll hand it over to Eric.