E2open Parent Holdings, Inc.

Greetings. Welcome to the E2 Open second quarter fiscal year 25 earnings call. At this time, all participants are in a listen-only mode. A question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. Please note, this conference is being recorded. I will now turn the conference over to your host, Dusty Beal, Head of Investor Relations. You may begin.

Good afternoon, everyone. At this time, I would like to welcome you all to the E2 Open Fiscal Second Quarter 2025 Earnings Conference Call. I am Dusty Beal, Head of Investor Relations here at E2 Open. Today's call will include recorded comments from our Chief Executive Officer, Andrew Appel, our Chief Commercial Officer, Greg Randolph, and our Chief Financial Officer, Marie Armstrong. Following those comments, we'll open the call for a live Q&A session. A replay and transcript of this call will be available on the company's investor relations website at investors.e2open.com. Information to access this replay is listed in today's press release, which is also available on our investor relations website. Before we begin, I'd like to remind everyone that during today's call, we will be making forward-looking statements regarding future events and financial performance, including guidance for our fiscal third quarter and full year 2025. These forward-looking statements are subject to known and unknown risks and uncertainties. E2 Open cautions that these statements are not guarantees of future performance. We encourage you to review our most recent reports, including our 10-K or any applicable amendments, for a complete discussion of these factors and other risks that may affect the future results or market price of our stock. And finally, we are not obligating ourselves to revise our results or these forward-looking statements in light of new information or future events. Also, during today's call, we'll refer to certain non-GAAP financial measures. Reconciliations of non-GAAP to GAAP measures and certain additional information are included in today's earnings press release, which can be viewed and downloaded from our investor relations website at investors.e2open.com. And with that, we'll begin by turning the call over to our CEO, Andrew Appel.

Thank you, Dusty. And thanks to everyone for joining today's call. I'll begin with my thoughts on our fiscal second quarter performance, as well as some broader commentary on how our return to growth work is progressing. I'll then ask Greg to update you on our commercial highlights. Finally, Marie will review our Q2 results and discuss our Q3 and full year guidance. Then we'll open the call for questions. Overall, our second quarter subscription revenue performance was solid. And while still down year over year, we saw signs of progress from the prior quarter. From my perspective, our subscription business feels like it has stabilized and is poised to improve further in the coming quarters. This represents real progress from where we were several quarters ago and gives me confidence in the operational cultural changes we continue to implement at E2Open. That said, we recognize that we are on a multi-period journey to fully develop our capabilities to drive higher bookings and maximize retention. Doing so will put E2Open back on a path to consistent performance and much higher revenue growth. I am pleased to say that we recorded a number of important new subscription wins, both with existing and new logo clients during Q2. Overall, we increased quarterly subscription bookings year-over-year and sequentially, which is a positive. Greg will share some of the highlights of these wins in a moment, but they demonstrate clearly the healthy market demand for supply chain software and the distinctive value that E2Open solutions are capable of delivering. Our entire E2Open team should be very proud that major companies continue to select our software to manage their mission-critical supply chain functions. Although these wins helped us increase Q2 subscription bookings compared to Q1, During the second quarter, we continued to see large deals taking longer than expected to close, mainly due to extended customer timelines, which seems to be a common issue across the software sector. Although we have closed a very high percentage of the deals that have been delayed in the past several quarters, while losing very few, our overall pace of new subscription bookings while moving in the right direction is still not at the level needed to support double-digit growth. While our evolution to sustainable organic growth is on track and advancing according to plan, it is progressing at a slightly slower pace than we had expected. Because our win rates on deals at advanced stages of development remain high, we expect to close many delayed Q2 deals in the coming months. As we do so, we will maintain our strong focus on increasing sales team productivity and driving pipeline growth in order to accelerate our commercial momentum. During Q2, we continue to make steady progress on all aspects of the comprehensive growth plan we outlined for you on the last several earnings calls. We are building repeatable processes and stronger competencies in multiple key areas, including sales execution, pipeline management, solution delivery, and partner relations. And while some work streams are taking slightly longer than we initially expected, I am very pleased that our employees have embraced a culture of delighting clients and delivering distinctive value that our clients expect and deserve. Our strong client focus is now at the core of everything we do. Last week, E2Open hosted our Connect 2024 conference with over 160 companies and 360 clients from North American region in attendance. The tone of the event, according to numerous clients that I met with, was marketably different from the past few years. Instead of focusing on service and delivery issues, for example, Clients at this year's conference focus on our core vision, which is to be the best at helping the world's largest and most sophisticated companies build and run efficient and effective supply chains. During the conference, we made four concrete commitments to our clients, that we will be their innovation and supply chain transformation partner, particularly in embedded AI, where we announced a set of new products and solutions. We will bring the world's best capabilities in each of our application families to help clients navigate change, risk, and complexity in the ever-changing global business environment as quickly and as efficiently as possible. We will deliver measurable business and client value. And most importantly, we will be client-centric versus e2open-centric, which is the essence of my core philosophy of delighting our clients. Since becoming E2Open CEO, I've personally spoken to hundreds of our clients, and they have reacted very positively to our renewed focus on client satisfaction, flawless solution delivery, and maximum value realization, a strategy that we think is unique in our space. Our ultimate goal is much higher organic growth, and our entire global team now understands that having a broad base of highly satisfied, reference-ready clients is an essential first step in reaching this goal. As I previously noted, improving our retention performance has been one of my top priorities since becoming E2Open CEO. During Q2, we delivered a material reduction in churn from the first quarter, and we remain on track to reduce churn and increase retention further as we move through the end of the year. This increases my confidence that we are past peak quarterly churn and are continuing to make good progress on our goal of getting our client retention metrics back to their previously strong levels. The success we have achieved in this critical area is the result of the strong operational cadence we've put in place around renewals, as well as a distinct shift in E2Open's underlying client-centric culture. For a client relations standpoint, our number one priority is now building long-term partnerships and ensuring that our clients receive distinctive value from our solutions and innovations. This new mindset, supported by broad executive engagement and a willingness to constructively and flexibly address value gaps identified by our clients as contracts come up for renewal, is enabling us to save at-risk accounts and turn them into mutually beneficial success stories. This is positive for E2Open in two respects. First, we retain the business that we worked so hard to book in the first place, and second, Many clients have reacted to our new client-centric approach by opening up new dialogues on the next set of supply chain challenges that they need to solve. The underlying business logic of our new approach is simple and powerful. Happy clients stay longer, buy more, and are the foundation of a sustainable growth strategy. During Q2, our professional services organization continued to play an important role in delighting clients and supporting our growth. PS revenue for the second quarter improved modestly versus Q1, where it was still below our expectations for that business. That was partly due to the impact of delayed first half subscription bookings on attached services work, but also reflects the execution improvements our new PS leadership is still working to achieve. We continue to view professional services as a strategic component of our overall business, and Greg will talk more in detail about our PS performance in a moment. I'm also pleased to say that as the operational changes we have made at E2Open have become more ingrained, I have personally been able to allocate more time to strategic client relationships and long-term opportunity development. We now have underway a growing number of senior executive level dialogues with major new potential clients in industry segments, including consumer packaged goods, food and beverage, automotive, industrial, and high tech, where we know We offer deep experience and a proven track record. We have developed some of these relationships on our own. Others were facilitated by partners, including our strategic integrators. What we consistently find as we engage with our clients is that our distinctive capabilities in the areas of supply chain visibility, connectivity, and orchestration resonate extremely well with these large global companies. These long-term roadmap discussions involving complex supply chain challenges are an essential component of our future growth plans. While developing these opportunities will take time, in some cases longer than we'd like, they provide a foundation for us to expand our business scope into new service areas and industries. The changes we are implementing at E2Open, combined with healthy market demand for supply chain solutions, should position us well to accelerate bookings as we move through FY25 and into the next fiscal year. But as Marie will describe for you, based on the longer deal cycles we have seen so far this fiscal year, we are taking a somewhat more conservative view of our likely full-year bookings and revenue results. From my perspective, this change is largely a timing adjustment reflecting delayed deals as well as the pace of our ongoing go-to-market transformation. I remain very confident that our business is getting better and stronger every day, and that our focus on client centricity and value delivery is the right strategy to return E2Open to strong organic growth. Before I turn the call over to Greg, I want to comment on the strategic review that we announced in March. The review, which is led by our board of directors, is ongoing. Our directors are committed to a careful and thorough evaluation of the options we have available to us. While we will not comment further on the review today, we look forward to sharing its outcome as soon as possible. With that, I'll ask Greg to provide our commercial update.