EGAIN Corp

Previous wording

Management’s Discussion and Analysis of Financial Condition and Results of Operations discusses our consolidated financial statements, which have been prepared in accordance with GAAP. The preparation of these financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period.

Current wording

Management’s Discussion and Analysis of Financial Condition and Results of Operations discusses our condensed consolidated financial statements, which have been prepared in accordance with GAAP. The preparation of these financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period.

Previous wording

As of December 31, 2025, our remaining performance obligations were $84.9 million, of which we expect to recognize $53.0 million and $31.9 million as revenue within one year and beyond one year, respectively.

Current wording

As of March 31, 2026, our remaining performance obligations were $74.1 million, of which we expect to recognize $48.5 million and $25.6 million as revenue within one year and beyond one year, respectively.

Previous wording

The following table presents our total revenue during the three and six months ended December 31, 2025 and 2024, respectively:

Current wording

The following table presents our total revenue during the three and nine months ended March 31, 2026 and 2025, respectively:

Previous wording

Total revenue for the three months ended December 31, 2025 increased by $590,000, compared to the same period in fiscal year 2025, due to an increase of SaaS revenue by $952,000, partially offset by a decrease of $362,000 in professional services revenue. Total revenue for the six months ended December 31, 2025 increased by $2.3 million, compared to the same period in fiscal year 2025, due to an increase of SaaS revenue by $3.0 million, partially offset by a decrease of $733,000 in professional services revenue.

Current wording

Total revenue for the three months ended March 31, 2026 increased by $1.5 million, compared to the same period in fiscal year 2025, due to an increase of SaaS revenue by $1.4 million and an increase of professional services revenue by $136,000. Total revenue for the nine months ended March 31, 2026 increased by $3.8 million, compared to the same period in fiscal year 2025, due to an increase of SaaS revenue by $4.4 million, partially offset by a decrease of $597,000 in professional services revenue.

Previous wording

Our revenue was impacted by foreign exchange rate fluctuation between the U.S. Dollar, Euro, and British Pound. We recalculate our current period results using the comparable prior period exchange rates to exclude the impact of foreign exchange rate fluctuation. Foreign exchange rate fluctuation resulted in an increase of $202,000 and $151,000 in total revenue during the three months ended December 31, 2025 and 2024, respectively. Foreign exchange rate fluctuation resulted in an increase of $395,000 and an increase of $298,000 for the six months ended December 31, 2025 and 2024, respectively.

Current wording

Our revenue was impacted by foreign exchange rate fluctuation between the U.S. Dollar, Euro, and British Pound. We recalculate our current period results using the comparable prior period exchange rates to exclude the impact of foreign exchange rate fluctuation. Foreign exchange rate fluctuation resulted in an increase of $318,000 and a decrease of $33,000 in total revenue during the three months ended March 31, 2026 and 2025, respectively. Foreign exchange rate fluctuation resulted in an increase of $717,000 and $271,000 for the nine months ended March 31, 2026 and 2025, respectively.

Previous wording

SaaS revenue includes revenue from cloud delivery arrangements, term licenses and embedded OEM royalties and associated support. Revenue from SaaS increased by $952,000 and $3.0 million during the three and six months ended December 31, 2025, respectively, compared to the same periods in fiscal year 2025. This represented an increase in SaaS revenue of 5% and 7% for the three and six months ended December 31, 2025, respectively, compared to the same periods in fiscal year 2025.

Current wording

SaaS revenue includes revenue from cloud delivery arrangements, term licenses and embedded OEM royalties and associated support. Revenue from SaaS increased by $1.4 million and $4.4 million during the three and nine months ended March 31, 2026, respectively, compared to the same periods in fiscal year 2025. This represented an increase in SaaS revenue of 7% for each of the three and nine months ended March 31, 2026, compared to the same periods in fiscal year 2025.

Previous wording

SaaS revenue represents 95% and 94% of total revenue for the three and six months ended December 31, 2025, respectively, compared to 93% and 92% for the same periods in fiscal year 2025.

Current wording

SaaS revenue represents 93% and 94% of total revenue for the three and nine months ended March 31, 2026, respectively, compared to 93% and 92% for the same periods in fiscal year 2025.

Previous wording

Excluding an increase of $190,000 and an increase of $372,000 due to foreign exchange rate fluctuation, SaaS revenue increased by $762,000 and $2.7 million during the three and six months ended December 31, 2025, respectively, compared to the same periods in fiscal year 2025.

Current wording

Excluding an increase of $306,000 and $678,000 due to foreign exchange rate fluctuation, SaaS revenue increased by $1.0 million and $3.7 million during the three and nine months ended March 31, 2026, respectively, compared to the same periods in fiscal year 2025. We expect SaaS revenue to continue to grow as we expand our customer base and usage of existing customers, reflecting continued demand for our SaaS offering.

Previous wording

Professional services revenue includes consulting, implementation, training, and managed services. Revenue from professional services decreased by $362,000 and $733,000 during the three and six months ended December 31, 2025, respectively, compared to the same periods in fiscal year 2025. We expect professional revenue to vary dependent on the volume and timing of recognition.

Current wording

Professional services revenue includes consulting, implementation, training, and managed services. Revenue from professional services increased by $136,000 and decreased by $597,000 during the three and nine months ended March 31, 2026, respectively, compared to the same periods in fiscal year 2025.

Previous wording

Excluding an increase of $12,000 and an increase of $23,000 due to foreign exchange rate fluctuation, professional services revenue decreased by $374,000 and $756,000 during the three and six months ended December 31, 2025, respectively, compared to the same periods in fiscal year 2025.

Current wording

Excluding an increase of $12,000 and $38,000 due to foreign exchange rate fluctuation, professional services revenue increased by $124,000 and decreased by $635,000 during the three and nine months ended March 31, 2026, respectively, compared to the same periods in fiscal year 2025. We expect professional services revenue to vary dependent on the volume and timing of recognition.

Previous wording

Revenue from North America sales increased by 6% from $17.3 million during the three months ended December 31, 2024 to $18.4 million during the three months ended December 31, 2025, due to an increase of $1.3 million in SaaS revenue, partially offset by a decrease of $285,000 in professional services revenue.

Current wording

Revenue from North America sales increased by 7% from $16.5 million during the three months ended March 31, 2025 to $17.6 million during the three months ended March 31, 2026, due to an increase of $1.5 million in SaaS revenue, partially offset by a decrease of $368,000 in professional services revenue.

Previous wording

Revenue from North America sales increased by 11% from $33.8 million during the six months ended December 31, 2024 to $37.3 million during the six months ended December 31, 2025, due to an increase of $4.0 million in SaaS revenue, partially offset by a decrease of $451,000 in professional services revenue.

Current wording

Revenue from North America sales increased by 9% from $50.2 million during the nine months ended March 31, 2025 to $54.9 million during the nine months ended March 31, 2026, due to an increase of $5.5 million in SaaS revenue, partially offset by a decrease of $820,000 in professional services revenue.

Previous wording

Revenue from EMEA sales decreased by 9% from $5.1 million for the three months ended December 31, 2024 to $4.6 million during the three months ended December 31, 2025, due to decreases of (i) $356,000 in SaaS revenue and (ii) $75,000 in professional services revenue.

Current wording

Revenue from EMEA sales decreased by 6% from $15.0 million for the nine months ended March 31, 2025 to $14.1 million during the nine months ended March 31, 2026, due to a decrease of $1.1 million in SaaS revenue, partially offset by an increase of $222,000 in professional services revenue.

Previous wording

Cost of SaaS revenue decreased by $188,000 during the three months ended December 31, 2025, from the same period in fiscal year 2025. This decrease was primarily due to decreases of (i) $369,000 in cloud-computing costs and (ii) $31,000 in outside consulting costs, partially offset by an increase of $224,000 in personnel-related costs.

Current wording

Cost of SaaS revenue decreased by $62,000 during the three months ended March 31, 2026, from the same period in fiscal year 2025. This decrease was primarily due to decreases of (i) $351,000 in cloud-computing costs and (ii) $31,000 in outside consulting costs, partially offset by an increase of $313,000 in personnel-related costs.

Previous wording

Cost of SaaS revenue decreased by $539,000 during the six months ended December 31, 2025, from the same period in fiscal year 2025. This decrease was primarily due to decreases of (i) $729,000 in cloud-computing costs and (ii) $126,000 in outside consulting costs, partially offset by an increase of $332,000 in personnel-related costs.

Current wording

Cost of SaaS revenue decreased by $601,000 during the nine months ended March 31, 2026, from the same period in fiscal year 2025. This decrease was primarily due to decreases of (i) $1.1 million in cloud-computing costs and (ii) $157,000 in outside consulting costs, partially offset by an increase of $648,000 in personnel-related costs.

Previous wording

Excluding a decrease of $12,000 and $16,000 due to foreign exchange rate fluctuation, cost of SaaS revenue decreased by $176,000 and $523,000 during the three and six months ended December 31, 2025, respectively, from the same periods in fiscal year 2025.

Current wording

Excluding an increase of $2,000 and a decrease of $15,000 due to foreign exchange rate fluctuation, cost of SaaS revenue decreased by $64,000 and $586,000 during the three and nine months ended March 31, 2026, respectively, from the same periods in fiscal year 2025.

Previous wording

Research and development expense decreased by 4% to $14.6 million for the six months ended December 31, 2025, from $15.1 million in the same period in fiscal year 2025. Excluding a decrease of $30,000 due to foreign exchange rate fluctuation, research and development expense decreased primarily due to a decrease of $537,000 in personnel-related costs.

Current wording

Research and development expense decreased by 2% to $22.2 million for the nine months ended March 31, 2026, from $22.6 million in the same period in fiscal year 2025. Excluding a decrease of $23,000 due to foreign exchange rate fluctuation, research and development expense decreased primarily due to a decrease of $518,000 in personnel-related costs, partially offset by an increase of $55,000 in outside consulting costs.

Previous wording

Sales and marketing expenses decreased by 8% to $9.2 million for the six months ended December 31, 2025, from $10.0 million in the same period in fiscal year 2025. Excluding an increase of $89,000 due to foreign exchange rate fluctuation, sales and marketing expense decreased primarily due to decreases of (i) $727,000 in personnel-related costs and (ii) $161,000 in outside consulting costs.

Current wording

Sales and marketing expenses decreased by 1% to $4.6 million for the three months ended March 31, 2026, from $4.7 million in the same period in fiscal year 2025. Excluding an increase of $76,000 due to foreign exchange rate fluctuation, sales and marketing expense decreased primarily due to a decrease of $143,000 in personnel-related costs, partially offset by an increase of $17,000 in outside consulting costs.

Previous wording

Sales and marketing expenses decreased by 1% to $5.2 million for the three months ended December 31, 2025, from $5.3 million in the same period in fiscal year 2025. Excluding an increase of $47,000 due to foreign exchange rate fluctuation, sales and marketing expense decreased primarily due to decreases of (i) $100,000 in personnel-related costs and (ii) $56,000 in outside consulting costs.

Current wording

Sales and marketing expenses decreased by 6% to $13.8 million for the nine months ended March 31, 2026, from $14.7 million in the same period in fiscal year 2025. Excluding an increase of $164,000 due to foreign exchange rate fluctuation, sales and marketing expense decreased primarily due to decreases of (i) $870,000 in personnel-related costs and (ii) $143,000 in outside consulting costs.

Previous wording

General and administrative expenses increased by 10% to $2.3 million for the three months ended December 31, 2025, from $2.1 million in the same period in fiscal year 2025. Excluding an increase of $8,000 due to foreign exchange rate fluctuation, general and administrative expense increased primarily due to an increase of $246,000 in legal related costs.

Current wording

General and administrative expenses increased by 12% to $2.3 million for the three months ended March 31, 2026, from $2.0 million in the same period in fiscal year 2025. Excluding an increase of $15,000 due to foreign exchange rate fluctuation, general and administrative expense increased primarily due to an increase of $311,000 in legal related costs, partially offset by a decrease of $100,000 in accounting, audit, and administrative fees.

Previous wording

General and administrative expenses increased by 28% to $5.8 million for the six months ended December 31, 2025, from $4.5 million in the same period in fiscal year 2025. Excluding an increase of $14,000 due to foreign exchange rate fluctuation, general and administrative expense increased primarily due to increases of (i) $1.4 million in warrant expense and (ii) $376,000 in legal related costs, partially offset by decreases of (i) 275,000 in outside-consulting costs and (ii) $77,000 in credit loss expense.

Current wording

General and administrative expenses increased by 23% to $8.1 million for the nine months ended March 31, 2026, from $6.6 million in the same period in fiscal year 2025. Excluding an increase of $29,000 due to foreign exchange rate fluctuation, general and administrative expense increased primarily due to increases of (i) $1.4 million in warrant expense and (ii) $687,000 in legal related costs, partially offset by decreases of (i) $339,000 in outside-consulting costs and (ii) $101,000 in personnel-related costs.

Previous wording

Income from operations was $2.0 million and $650,000 with an operating margin of 9% and 3% during the three months ended December 31, 2025 and 2024, respectively. This is primarily due to an increase in gross margin.

Current wording

Income from operations was $2.0 million and $27,000 with an operating margin of 9% and 0% during the three months ended March 31, 2026 and 2025, respectively. This is primarily due to an increase in gross margin.

Previous wording

Income from operations was $4.9 million and $1.2 million with an operating margin of 10% and 3% during the six months ended December 31, 2025 and 2024, respectively. This is primarily due to an increase in gross margin.

Current wording

Income from operations was $6.9 million and $1.2 million with an operating margin of 10% and 2% during the nine months ended March 31, 2026 and 2025, respectively. This is primarily due to an increase in gross margin.

Previous wording

Interest income primarily consists of interest earned on money market accounts which have decreased rates compared to prior years. Interest income was $624,000 and $661,000 during the three months ended December 31, 2025 and 2024, respectively. Interest income was $1.1 million and $1.4 million during the six months ended December 31, 2025 and 2024, respectively.

Current wording

Interest income primarily consists of interest earned on money market accounts. Interest income was $603,000 and $597,000 during the three months ended March 31, 2026 and 2025, respectively. Interest income was $1.7 million and $2.0 million during the nine months ended March 31, 2026 and 2025, respectively.

Previous wording

Other income (expense), net was an expense of $32,000 and $431,000 during the three months ended December 31, 2025 and 2024, respectively. Other income (expense), net was income of $423,000 and expense of $571,000 during the six months ended December 31, 2025 and 2024, respectively. Other income (expense), net primarily included foreign exchange rate fluctuations on international trade receivables, net of transactions.

Current wording

Other income (expense), net was an income of $176,000 and expense of $304,000 during the three months ended March 31, 2026 and 2025, respectively. Other income (expense), net was income of $599,000 and expense of $875,000 during the nine months ended March 31, 2026 and 2025, respectively. Other income (expense), net primarily included foreign exchange rate fluctuations on international trade receivables, net of transactions.

Previous wording

Provision for income taxes consists of federal, state, and foreign income taxes. We recorded income tax provision of $302,000 and $1,232,000 for the three and six months ended December 31, 2025, respectively. We recorded income tax provision of $209,000 and $697,000 for the three and six months ended December 31, 2024, respectively. We released a majority of our valuation allowance against U.S. deferred tax assets on June 30, 2025 and recorded higher income before tax provision in the three and six months ended December 31, 2025.

Current wording

Provision for income taxes consists of federal, state, and foreign income taxes. We recorded income tax provision of $371,000 and $1.6 million for the three and nine months ended March 31, 2026, respectively. We recorded income tax provision of $254,000 and $951,000 for the three and nine months ended March 31, 2025, respectively. We released a majority of our valuation allowance against U.S. deferred tax assets on June 30, 2025 and recorded higher income before tax provision in the nine months ended March 31, 2026.

Previous wording

As of December 31, 2025 and June 30, 2025, our principal sources of liquidity were cash and cash equivalents, restricted cash, and accounts receivable totaling $96.8 million and $95.7 million, respectively. Our cash, cash equivalents and restricted cash were $83.1 million and $62.9 million as of December 31, 2025 and June 30, 2025, respectively.

Current wording

As of March 31, 2026 and June 30, 2025, our principal sources of liquidity were cash and cash equivalents, restricted cash, and accounts receivable totaling $89.2 million and $95.7 million, respectively. Our cash, cash equivalents and restricted cash were $80.5 million and $62.9 million as of March 31, 2026 and June 30, 2025, respectively.

Previous wording

For the six months ended December 31, 2025 and 2024, our cash flows were as follows (in thousands):

Current wording

For the nine months ended March 31, 2026 and 2025, our cash flows were as follows (in thousands):

Previous wording

Net cash provided by operating activities increased by $13.2 million during the six months ended December 31, 2025, from the same period in fiscal year 2025, driven primarily by the change in net income, the timing of collections for accounts receivable, the timing of payments for accrued liabilities, and recognition of deferred revenue.

Current wording

Net cash provided by operating activities increased by $9.1 million during the nine months ended March 31, 2026, from the same period in fiscal year 2025, driven primarily by the change in net income and the timing of collections for accounts receivable.

Previous wording

Net cash used in investing activities increased by $210,000 during the six months ended December 31, 2025, from the same period in fiscal year 2025, driven primarily by activities related to the purchase of equipment for employees and facility expenditures. Historically, cash used in investing activities has been used to purchase equipment and software to support our business and growth.

Current wording

Net cash used in investing activities increased by $170,000 during the nine months ended March 31, 2026, from the same period in fiscal year 2025, driven primarily by activities related to the purchase of equipment for employees and facility expenditures. Historically, cash used in investing activities has been used to purchase equipment and software to support our business and growth.

Previous wording

Net cash provided by (used in) financing activities increased by $7.2 million during the six months ended December 31, 2025, from the same period in fiscal year 2025. Our current proceeds consist primarily of the exercise of employee stock options, our employee stock purchase plan, and funds used for repurchases of our common stock. Funds used for repurchases of our common stock was $1.4 million and $7.0 million during the six months ended December 31, 2025 and 2024, respectively.

Current wording

Net cash provided by (used in) financing activities increased by $12.4 million during the nine months ended March 31, 2026, from the same period in fiscal year 2025. Our current proceeds consist primarily of the exercise of employee stock options, our employee stock purchase plan, and funds used for repurchases of our common stock. Funds used for repurchases of our common stock was $1.4 million and $12.0 million during the nine months ended March 31, 2026 and 2025, respectively.

Previous wording

Our principal commitments consist of obligations under leases for office space. Lease agreements are evaluated to determine whether an arrangement is or contains a lease in accordance with ASC 842,Leases. As of December 31, 2025, the future non-cancelable minimum payments under these commitments were approximately $4.4 million.

Current wording

Our principal commitments consist of obligations under leases for office space. Lease agreements are evaluated to determine whether an arrangement is or contains a lease in accordance with ASC 842,Leases. As of March 31, 2026, the future non-cancelable minimum payments under these commitments were approximately $3.9 million.