E2open's Stock Price Hovers Below Acquisition Price Amid Quiet Earnings Call

E2open, a supply chain software provider, held its quarterly earnings call on Thursday, which was notably quiet due to the company's impending acquisition by WiseTech Global. The acquisition, expected to be finalized by the end of the year, will result in the delisting of E2open's publicly traded stock. Since the acquisition was announced in late May, E2open's stock price has hovered below the agreed-upon transaction price of 3.30 dollars per share.

Analysts were notably absent from the call, as the management had previously stated that there would be no public Q&A session. The call's transcript showed no analysts had signed in. Additionally, the market showed little reaction to E2open's earnings report for the first quarter of fiscal year 2026, ending May 31, as the sale price of the stock had already been determined.

Prior to the acquisition announcement, E2open's stock had hit a low of 1.75 dollars in early April. The stock price recovered to approximately 2.55 dollars the day before the deal was disclosed. E2open went public through a special purpose acquisition company (SPAC) around five years ago, with an initial valuation of 2.57 billion dollars. Despite the stock price surge following the WiseTech acquisition news, its current market capitalization is just over 1.1 billion dollars. At its peak in June 2021, the company's stock price briefly surpassed 14 dollars per share.

The company's struggles led to the dismissal of its CEO in October 2023. Industry veteran Andrew Appel took over as interim CEO and was formally appointed in February 2024. During the earnings call, the company reported financial results that, while not dramatically different from the previous year, were seen as a success given the circumstances. The company's GAAP subscription revenue for the quarter was 132.9 million dollars, a modest 1.1% increase from the same period last year. However, this figure exceeded the company's previously provided guidance range of 129 million to 132 million dollars.

Total GAAP revenue for the quarter was 152.6 million dollars, a 1% year-over-year increase. GAAP gross profit grew by 1.3% year-over-year, while non-GAAP gross profit was 102.4 million dollars, a slight 0.2% decrease from the previous quarter. The GAAP gross margin was 48.2%, marginally higher than the 48.1% reported in the same period last year. Several profitability metrics showed improvement. The company reported a GAAP net loss of 15.5 million dollars for the quarter, compared to a net loss of 42.8 million dollars in the same period last year. Adjusted EBITDA was 52.2 million dollars, a 3% year-over-year increase, with an adjusted EBITDA margin of 24.3%, up 60 basis points from the same period a year ago.

Appel highlighted several positive aspects during the call, noting that the sequential growth in subscription revenue was the first since the middle of fiscal year 2024, "directly demonstrating the progress we've made." He stated that the company had "successfully stabilized the business and put it back on a growth trajectory." Appel also mentioned that customer retention rates had "significantly improved," and the company's software products and go-to-market strategies had seen "significant enhancements."

The CFO, Marj Armstrong, attributed the growth in subscription revenue to progress made in customer retention and orders in the second half of fiscal year 2025, a momentum that continued into the start of fiscal year 2026. Appel also mentioned that the company had launched exciting new products, such as the supply network discovery tool and generative AI-driven enhancements to its industry-leading transportation management and global trade solutions, with more products planned for release in the coming months.

Appel noted that WiseTech's core business focuses on international freight forwarding, an area where they have achieved significant success. He stated that by merging with E2open, WiseTech would expand its traditional focus to include E2open's broad supply chain suite, encompassing planning, channel, and supply applications, while adding highly complementary capabilities in domestic logistics, carrier integration, and global trade.