- **Revenue recovery**: Q1 subscription revenue growth of 1.1% YoY marks return to growth after multi-year decline.
- **AI innovation driving differentiation**: Generative AI tools for transportation/logistics highlight strategic investment in next-gen capabilities.
- **Strategic acquisition**: Pending WiseTech merger positions E2open to become part of global supply chain OS, with closing expected by end-2025.
- **Financial stability**: Strong cash generation ($48M Q1) and cautious FY '26 guidance reflecting cautious outlook despite acquisition.

**【CEO Summary Section】**
- **Return to growth**: Achieved first year-over-year subscription revenue growth since mid-FY '24, driven by improved client retention and product innovation.
- **Client retention focus**: Shifted from short-term gains to long-term partnerships, stabilizing the business.
- **AI and product innovation**: Launched generative AI tools for transportation and trade solutions, with more products planned for FY '26.
- **Pending WiseTech acquisition**: Expected to close by end-2025, combining E2open's supply chain suite with WiseTech's logistics expertise. New entity will serve full value chain from sourcing to end customer.
- **Employee and customer value**: WiseTech acquiring E2open for its product suite, employee expertise, and customer base; E2open team remains focused on execution until close.

**【CFO Financial Commentary】**
- **Q1 FY '26 Results**:
  - Subscription revenue: $132.9M (+1.1% YoY), above guidance range
  - Total revenue: $152.6M (+1.0% YoY)
  - Adjusted EBITDA: $52.2M (34.2% margin, +0.6ppt YoY)
  - Cash flow: $48.0M, ending Q1 with $230.2M cash
- **Gross margin**: 67.1% (-0.7ppt YoY) due to lower PS margins, but expects improvement in FY '26
- **Full Year FY '26 Guidance**:
  - Subscription revenue: $525-535M (-1.0% to +1.0% YoY)
  - Total revenue: $600-618M (-1.3% to +1.7% YoY)
  - Gross margin: 68.0-68.5%
  - Adjusted EBITDA: $200-210M (33-34% margin)
  - Cash flow as % of EBITDA: ~FY '25 levels

E2open Parent Holdings, Inc. (ETWO) Q1 2026 Earnings Call Transcript

- **Subscription recovery underway**: FY 2025 subscription revenue decline of 1.6% narrowed from prior years, with Q4 showing flat growth on a constant currency basis.
- **Retention gains**: Gross and net retention improved to 91% and 99%, with key wins driving $133 million Q4 subscription bookings.
- **AI-powered differentiation**: New Global Trade AI tools and cross-platform integrations are driving upsell opportunities and client loyalty.
- **FY 2026 inflection point**: Guidance for $525-535 million subscription revenue reflects a 1% growth inflection, supported by stabilized PS and targeted commercial investments.
- **Cash generation strength**: $197 million cash balance and $56.7 million Q4 operating cash flow highlight E2open’s liquidity resilience despite macro challenges.


**【CEO Summary Section】**
- FY 2025 subscription revenue declined 1.6% to $528 million, with Q4 showing year-over-year growth of 0.5% on a constant currency basis.
- Gross and net retention rates improved to 91% and 99%, respectively, up 1 percentage point from FY 2024.
- Key wins in Q4 included expansions with a global health company, a European freight forwarder, and a U.S. food/beverage distributor, driving sequential and year-over-year booking growth.
- E2open’s Global Trade Management suite is critical for clients navigating tariff volatility, with updates to 2 million landed cost records and 24/7 client support.
- FY 2026 subscription revenue guidance of $525-535 million reflects a 1% growth inflection, driven by improved retention and bookings momentum.

**【CCO Commercial Update】**
- Q4 subscription bookings were the highest since Q4 2023, with sequential and year-over-year growth, and a 20%+ increase in conversion rates.
- Professional Services bookings stabilized, with Q4 PS revenue above the recent run rate, supporting client satisfaction and renewals.
- FY 2026 total revenue guidance of $600-618 million includes a focus on PS growth through targeted campaigns and client-centric solutions.
- New AI tools in Global Trade (e.g., automated product classification, unstructured document processing) are driving upsell opportunities.

**【CFO Financial Review】**
- FY 2025 total revenue declined 4.2% to $607.7 million, with adjusted EBITDA of $215.5 million (35.5% margin).
- Q4 non-GAAP gross margin was 68.2%, impacted by investments in customer care and PS implementations.
- FY 2026 guidance includes subscription revenue growth of -1% to +1%, and adjusted EBITDA of $200-210 million (33-34% margin).
- Cash balance increased to $197.4 million, with a record $46 million sequential build driven by AR collections improvements.

**【Q&A Highlights】**
- FY 2026 subscription growth will be front-loaded, with Q1 2026 revenue guidance of $129-132 million reflecting seasonally higher churn.
- PS revenue stabilization and backlog growth provide confidence in FY 2026 recovery.
- Investments in product innovation (e.g., client-specific data platforms, real-time planning) aim to differentiate E2open in the supply chain software market.
- Customer satisfaction improvements (60% reduction in aged support tickets) are reducing legacy churn and enabling upsell opportunities.
- Global Trade Management revenue exposure to tariff volatility is limited to ~2% of total revenue, with volumetric contracts converted to fixed pricing.


E2open Parent (ETWO)-29 Apr 25-2025 Q4 Earnings call transcript

- **Stabilization in Subscription Revenue**: Q3 subscription revenue decline narrowed to 0.6% YoY vs. 4.3% in Q2, with retention rate >100% for 2nd straight quarter
- **Key Wins**: $10M+ upsell to industrial equipment manufacturer and cross-sell to consumer goods giant highlight cross-sell momentum
- **New Leadership**: Pawan Joshi (Chief Strategy Officer) and Rachit Lohani (Chief Product & Technology Officer) to drive innovation and client-centric growth
- **FY25 Outlook**: Target to return to subscription growth by Q4 FY25, with FY25 subscription revenue expected to decline 1.5-2.0% YoY
- **Trade Policy Impact**: 20% pipeline growth in global trade solutions amid U.S. administration trade policy uncertainty

**【CEO Opening Remarks】**
- Subscription revenue improved sequentially, with a 0.6% YoY decline in Q3, marking the first quarter of stabilization after multi-year decline. 
- Retention metrics improved, with gross retention stabilizing and net retention rate exceeding 100% for the second consecutive quarter.
- Key wins included a $10M+ upsell to a global industrial equipment manufacturer and a cross-sell to a major consumer goods company, demonstrating strong cross-sell momentum.
- New executive appointments (Chief Strategy Officer Pawan Joshi, Chief Product & Technology Officer Rachit Lohani) aim to accelerate innovation and client engagement.

**【CFO Financial Highlights】**
- Q3 subscription revenue: $132M (0.6% YoY decline vs. 4.3% YoY decline in Q2)
- Professional Services revenue: $19.7M (-20.4% YoY due to delayed deal closings)
- Gross margin: 68.8% (down 0.8pts YoY due to lower PS revenue)
- Adjusted EBITDA: $53.6M (35.3% margin, flat YoY)
- FY25 guidance: Subscription revenue $526-529M (-2.0% to -1.5% YoY)

**【Commercial Update】**
- Cross-sell success: 25% of Q3 bookings came from existing clients
- New logo wins: $10M+ deal with a major consumer retail group for ocean freight management
- Mid-market strategy: New leader appointed to focus on $100K-$500K deals, with early pipeline growth in global trade and TMS
- Professional Services: $19.7M revenue (-20.4% YoY) due to delayed deal closings and strategic investments in renewals

**【Q&A Key Takeaways】**
- Subscription billings up 8% YoY, deferred revenue up 6% YoY, driven by timing of renewals
- 70% of slip deals from Q2 closed in Q3, with remaining 30% expected to close in Q4
- Trade policy uncertainty driving demand for global trade management solutions (+20% pipeline growth)
- TMS business stabilizing after 2-year decline, with 10% sequential growth in Q3
- 2025 target: Return to subscription revenue growth by Q4 FY25

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