eGain's Q3 2025 Earnings Call: Conflicting Signals on Sales Cycles, Professional Services, and Investment Strategies

Sales cycle length expectations, professional services revenue and growth forecasts, revenue growth strategy and visibility, investment and spending strategy are the key contradictions discussed in eGain Corporation's latest 2025Q3 earnings call.



Revenue Performance and Customer Losses:
- eGain Corporation reported total revenue of $21 million for Q3, down 6% year-over-year.
- The decline reflects the impact of two large customer losses last year, one from a conversation hub customer and the other from an analytics customer.
- This will be the final quarter with year-over-year comparisons affected by these former customers.

Product Innovation and Customer Acquisitions:
- eGain launched its AI Agent for Contact Center, with very good interest from businesses struggling with first-wave AI solutions.
- One existing banking client is already rolling out the solution, aiming to reduce variability in agent performance and improve compliance.
- The company secured a significant deal with a US mega bank, expanding its knowledge offering across the bank's enterprise.

Financial Profitability and Cash Flow:
- eGain reported non-GAAP net income of $765,000 or $0.03 per share, ahead of the high-end of guidance for the quarter.
- The company generated $2.2 million in cash flow from operations, achieving an 11% operating cash flow margin.
- Profitability exceeded projections, and solid operating cash flow was delivered despite extended sales cycles impacting deal closures.

Customer Metrics and Growth Opportunities:
- SaaS ARR for eGain's knowledge customers increased 11% year-over-year, while total SaaS ARR decreased 6%.
- LTM dollar-based SaaS net retention for knowledge customers was 97%, with an LTM dollar-based SaaS net expansion rate of 103.
- The company aims for year-over-year growth in total SaaS ARR for fiscal 2025, driven by strong deal closure and customer interest in AI Agent offerings.