10-Q · May 14, 2026
eGain reported solid Q3 fiscal 2026 results, with revenue of $22.5 million and diluted EPS of $0.11, both above expectations. This marks a modest increase from both the previous quarter and the prior year. However,…
Earnings analysis · 10-K
EGAN earnings analysis
Filed September 10, 2026 · Our reading of the company's report
The latest report
eGain strengthened its strategic positioning in AI-driven knowledge management, with Gartner recognition, 20% AI-customer revenue growth, improving gross margin, and operating cash flow of $21.150 million. However,…
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eGain strengthened its strategic positioning in AI-driven knowledge management, with Gartner recognition, 20% AI-customer revenue growth, improving gross margin, and operating cash flow of $21.150 million. However, total revenue growth was only 3%, non-AI customer revenue fell 21%, EMEA SaaS revenue declined, and the prior-year tax benefit did not recur. The separate fiscal 2027 outlook calls for lower revenue and profitability, so the improving operating profile is outweighed by near-term growth and earnings risk.
Gross and operating margin
How much of each revenue dollar the business keeps.
One point per quarterly or annual filing. Both margins are shares of that report's revenue.
From revenue to operating profit
Where each $100 of revenue went in this report.
Cost of sales, operating expenses, and what remained. Figures are rounded to whole dollars.
Where revenue came from
The business segments reported by the company.
Shares of the segments disclosed in this filing, largest first.
How we read each report
Our analysis across the last few reports.
Our model's reading of each filing, not the share price or the market's reaction. Annual and quarterly reports each occupy one position.
Reported figures
- Earnings per share
- $0.32
What stood out
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AI knowledge-management positioning strengthened
eGain describes its strategy as powering AI-driven enterprise knowledge management, with a platform that centralizes knowledge for customer service, employee support, and AI-powered automation. Gartner named eGain a Leader in July 2026 and positioned it highest for Ability to Execute and furthest for Completeness of Vision in the first Magic Quadrant for Customer Service Knowledge Management Systems.
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SaaS mix drove annual growth
Fiscal 2026 revenue increased $2.705 million to $91.136 million from $88.431 million. SaaS revenue rose 4% to $85.286 million and represented 94% of total revenue, while professional services declined 10% to $5.850 million.
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AI customer adoption accelerated
AI-customer revenue increased 20%, or $9.209 million, to $55.129 million from $45.920 million. Cisco OEM revenue also increased 3% to $10.930 million, partially offsetting a 21% decline in Other-customer revenue to $25.077 million.
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Profitability improved materially
Gross profit increased to $66.850 million from $62.008 million, lifting gross margin to approximately 73.4% from 70.1%. GAAP operating income rose to $7.965 million from $4.433 million, and operating margin improved to approximately 8.7% from 5.0%.
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Operating cash generation strengthened
Net cash provided by operating activities increased to $21.150 million from $5.263 million, primarily due to the timing of accounts receivable collections and accrued-liability payments. Capital expenditures were $617,000, and cash, cash equivalents, and restricted cash ended the year at $73.3 million.
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Buybacks remain the primary return of capital
eGain repurchased 1.606 million shares for $11.510 million in fiscal 2026, reducing shares outstanding from 27.083 million to 26.171 million. Approximately $9.7 million remained available under the $60 million authorization at June 30, 2026; the company has never paid a cash dividend.
What to watch
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Non-AI customer base is contracting
Revenue from customers that do not actively use AI offerings fell $6.851 million, or 21%, to $25.077 million in fiscal 2026. This concentration of growth in AI customers raises execution risk if AI adoption or the conversion of legacy customers slows.
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EMEA SaaS revenue weakened
EMEA revenue declined 4% to $18.807 million from $19.653 million, driven by a $1.4 million decrease in SaaS revenue. North America represented approximately 79% of total revenue at $72.329 million, increasing geographic concentration.
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Unhedged foreign-exchange exposure
Foreign-currency-denominated assets increased to approximately $38.8 million from $25.9 million. The company states that a 10% increase in the dollar relative to other currencies would reduce the value of those assets by $3.9 million, and eGain does not use derivative instruments to hedge this exposure.
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Tax benefit reversal pressures earnings
The company recorded a $1.920 million income-tax provision in fiscal 2026 versus a $26.617 million tax benefit in fiscal 2025. The California-related deferred-tax valuation allowance increased to approximately $6.219 million from $5.529 million, creating a materially less favorable tax contribution.
Management's outlook
The 10-K does not provide quantitative fiscal 2027 guidance; annual outlook was provided separately in the fiscal 2026 earnings press release and call.
Earlier filings 4
10-Q · May 14, 2025
eGain reported quarter revenue of $21,009,000, down $1,341,000 (−6.0%) versus the prior-year quarter, with gross margin compressing to 68.0% and operating income collapsing to $27,000. Net income declined to $66,000 and…
10-Q · February 13, 2025
eGain reported revenue of $22,389,000 for the quarter ended December 31, 2024, down $1,426,000 (−6.0%) versus the prior year quarter. Gross margin was roughly 70.2% while operating income declined to $650,000 and…
10-Q · May 9, 2024
eGain reported three months ended March 31, 2024 revenue of $22,350,000, down $663,000 (2.9%) versus $23,013,000 a year earlier, while returning to profitability with net income of $1,493,000 and diluted EPS of $0.05…
This is our reading of a public filing, not the filing itself. Analysis can contain errors; check the source document for full context.