1min read E2open Inc (ETWO), a leading provider of cloud-based supply chain management solutions, announced its Q3 (Nov) earnings report. The company posted earnings of $0.04 per share, which aligned with consensus. Revenues fell 4.5% year-over-year to $157.5 million, slightly outpacing Street expectations. Subscription revenue, which comprised 84.3% of total revenue, decreased 1.5% compared to the same period last year.
Despite the decline in revenues, E2open's management remains optimistic about the company's growth prospects. The Q3 report highlighted better sales execution in both subscription and professional services. This improvement in third -quarter execution gives the company confidence in its ongoing efforts to re-accelerate growth.
The company reported Non -GAAP gross profit totaled $109.7 million, down 3.4% and 4.0% on a constant currency basis. Non-GAAP gross margin, on an organic and constant currency basis, improved to 69.6% in the current quarter compared to 68.9% in the comparable period last year.
E2open's adjusted EBITDA for the quarter was $55.4 million, indicating a slight decrease of 1.4% and 1.5% on a constant currency basis. The adjusted EBITDA margin improved to 35.4%, compared to 34.1% in the same quarter last year.
Looking ahead, E2open provided in-line guidance for FY24, with revenues expected to be in the range of $628 million to $633 million, reflecting a 3.3% year-over-year decrease at the mid -point. The company expects GAAP subscription revenue for FY24 to be in the range of $533 million to $536 million, indicating a 0.3% organic growth rate at the mid-point.
Despite the challenging market conditions and uncertain end-markets, E2open's management expressed confidence in the steps being taken to re-ignite growth. The company acknowledges the need for ongoing transformation of its go-to-market and client engagement model, but the improved sales execution in Q3 is a promising sign.
Shares of ETWO are up 12% in after hours on extremely light volume. Investors are taking a favorable view on the narrowing of the company"s outlook as it was simply better-than-feared. Shares of ETWO fell 15% in the five sessions ahead of this report. It has recovered a significant portion of that loss in the after hours but we would prefer to see more volume come into play. The 200-sma ($4.61) should offer some resistance tomorrow.
