What changed in this filing

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Item 1. Financial Statements

2025-11-12 compared with 2025-05-14 · 125 added, 287 removed, 405 unchanged (50% of the section changed)

3 unchanged sentences

(in thousands, except par value data)

September 30,

Current assets:

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Restricted cash

Accounts receivable, less provision for credit losses of $ 7 and $ 59 as of March 31, 2025 and June 30, 2024, respectively

Accounts receivable, less provision for credit losses of $ 8 and $ 7 as of September 30, 2025 and June 30, 2025, respectively

Costs capitalized to obtain revenue contracts, net

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60,000 shares;

33,122 and 32,698 shares;

27,598 and 29,160 shares as of March 31, 2025 and June 30, 2024, respectively

33,299 and 33,237 shares as of September 30, 2025 and June 30, 2025, respectively;

26,914 and 27,083 shares as of September 30, 2025 and June 30, 2025, respectively

Additional paid-in capital

Treasury stock, at cost:

5,524 and 3,538 shares of common stock as of March 31, 2025 and June 30, 2024, respectively

Notes receivable from stockholders

6,385 and 6,154 shares of common stock as of September 30, 2025 and June 30, 2025, respectively

Accumulated other comprehensive loss

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Three Months Ended

Nine Months Ended

September 30,

Professional services

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Income from operations

Interest income, net

Interest income

Other income (expense), net

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Three Months Ended

Nine Months Ended

September 30,

Other comprehensive income, net of taxes:

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(in thousands)

Three Months Ended March 31, 2025

Treasury Stock

Notes Receivable

Comprehensive

Stockholders'

Balances as of December 31, 2024

Issuance of common stock upon exercise of stock options

Repurchase of common stock

Stock-based compensation

Foreign currency translation adjustments

Balances as of March 31, 2025

See accompanying notes to condensed consolidated financial statements.

EGAIN CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(in thousands)

Three Months Ended March 31, 2024

Treasury Stock

Notes Receivable

Comprehensive

Stockholders'

Balances as of December 31, 2023

Interest on stockholder notes

Issuance of common stock upon exercise of stock options

Repurchase of common stock

Stock-based compensation

Foreign currency translation adjustments

Balances as of March 31, 2024

See accompanying notes to condensed consolidated financial statements.

EGAIN CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (cont.)

(in thousands)

Nine Months Ended March 31, 2025

Three Months Ended September 30, 2025

Additional Paid-in

Treasury Stock

Notes Receivable

Comprehensive

Stockholders'

Accumulated Other Comprehensive

Total Stockholders'

Balances as of June 30, 2025

Issuance of common stock upon exercise of stock options

Issuance of common stock upon vesting of restricted stock units

Issuance of common stock in connection with employee stock purchase plan

Issuance of common stock warrant for services

Repurchase of common stock

1 unchanged sentence

Foreign currency translation adjustments

Balances as of March 31, 2025

See accompanying notes to condensed consolidated financial statements.

EGAIN CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (cont.)

(in thousands)

Nine Months Ended March 31, 2024

Balances as of September 30, 2025

Three Months Ended September 30, 2024

Additional Paid-in

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Notes Receivable From

Accumulated Other

Comprehensive

Accumulated Other Comprehensive

Total Stockholders'

Balances as of June 30, 2024

Interest on stockholder notes

Repayment of stockholder notes

Issuance of common stock upon exercise of stock options

Issuance of common stock in connection with employee stock purchase plan

Repurchase of common stock

1 unchanged sentence

Foreign currency translation adjustments

Balances as of March 31, 2024

Balances as of September 30, 2024

See accompanying notes to condensed consolidated financial statements.

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(in thousands)

Nine Months Ended

Three Months Ended

September 30,

Cash flows from operating activities:

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Stock-based compensation

Gain on disposal of property and equipment

Issuance of common stock warrant for services

Changes in operating assets and liabilities:

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Proceeds from exercise of stock options

Proceeds from employee stock purchase plan

Repurchases of common stock

Interest on stockholder notes

Repayment of stockholder notes

Net cash used in financing activities

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Cash paid for taxes

Right-of-use assets and lease liabilities recognized from lease modification

Non-cash items:

Purchases of equipment included in accounts payable

Purchases of equipment through trade accounts payable

See accompanying notes to condensed consolidated financial statements.

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Organization and Nature of Business

eGain Corporation (eGain, the Company, our, we or us) automates customer engagement with an AI knowledge hub SaaS solution.

We sell to enterprises who want to better serve customers at scale by delivering trusted answers across self-service, contact centers, and field staff.

True to our mantra of AX + BX + CX = DX™ , our AI knowledge hub orchestrates effortless Digital eXperience (DX) as it assists Agent eXperience (AX), empowers Business eXperience (BX) and assures Customer eXperience (CX).

Many global brands use eGain to improve experience and reduce costs.

We are headquartered in Sunnyvale, California in the United States (U.S.).

eGain automates customer experience with an AI knowledge hub solution.

We sell our SaaS solution to enterprises who want to improve customer experience while reducing cost, by using AI to synthesize and deliver trusted, consumable answers from a knowledge hub.

We are headquartered in Sunnyvale, California, USA.

We also operate in the United Kingdom and India.

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Basis of Presentation

The accompanying condensed consolidated balance sheet as of March 31, 2025 and the condensed consolidated statements of operations, comprehensive income, and stockholders’ equity for the three and nine months ended March 31, 2025 and cash flows for the nine months ended March 31, 2025 are unaudited.

The accompanying condensed consolidated balance sheet as of September 30, 2025 and the condensed consolidated statements of operations, comprehensive income, stockholders’ equity, and cash flows for the three months ended September 30, 2025 and 2024, are unaudited.

The condensed consolidated balance sheet as of June 30, 2025 was derived from audited consolidated financial statements as of that date but does not include all the information and footnotes required by generally accepted accounting principles (GAAP) for complete financial statements.

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● Fair value of stock-based awards;

● Fair value of warrants;

● Lease term and incremental borrowing rate for lease liabilities.

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Pronouncements Not Yet Adopted

In November 2023, the Financial Accounting Standards Board (FASB) issued ASU 2023-07, Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosures, which requires disclosures on expanded information about their reportable segments’ significant expenses and other segment items on an interim and annual basis.

The ASU is effective for fiscal years beginning after December 15, 2024 (our fiscal year 2026), with early adoption permitted.

The ASU is required to be applied retrospectively to all prior periods presented in the financial statements once adopted.

We are currently evaluating the impact of this update on our condensed consolidated financial statements and related disclosures.

In December 2023, the FASB issued ASU 2023-08, Intangibles – Goodwill and Other – Crypto Assets (Subtopic 350-60):

Accounting for and Disclosure of Crypto Assets, which requires fair value measurement of certain crypto assets each reporting period with changes in fair value reflected in net income.

The amendments also require disclosure about significant holdings, contractual sale restrictions, and changes during the reporting period.

The ASU is effective for fiscal years beginning after December 15, 2024 (our fiscal year 2026), with early adoption permitted.

The ASU is required to be applied retrospectively to all prior periods presented in the financial statements once adopted.

We are currently evaluating the impact of this update on our condensed consolidated financial statements and related disclosures.

In November 2024, the FASB issued ASU 2024-03, Income Statement-Reporting Comprehensive Income-Expense Disaggregation Disclosures (Subtopic 220-40):

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This ASU is effective for fiscal years beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027 (our fiscal year 2028), with early and retrospective adoption permitted.

We are currently evaluating the impact of this update on our condensed consolidated financial statements and related disclosures.

We are currently evaluating the impact of this update on our consolidated financial statements and related disclosures.

Revenue Recognition

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Significant Judgment Applied in the Determination of Revenue Recognition

We enter into contractual arrangements with customers that may include promises to transfer multiple services, such as subscription, support, or professional services.

We enter into contractual arrangements with customers that may include promises to transfer multiple services, such as subscription, support and professional services.

With respect to our business, a performance obligation is a promise to transfer a service to a customer that is distinct.

Significant judgment is required to determine whether services are distinct performance obligations that should be accounted for separately or combined as one unit of accounting.

Significant judgment is required to determine whether services are distinct

performance obligations that should be accounted for separately or combined as one unit of accounting.

Additionally, significant judgment is required to determine the timing of revenue recognition.

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These embedded OEM royalties are included as SaaS revenue.

Under Topic 606 revenue guidance, since these arrangements are for usage-based licenses of intellectual property, for which the guidance in paragraph ASC 606-10-55-65 applies, we estimate revenue recognized only as the performance obligation of the OEM

royalties has been satisfied or partially satisfied.

Differences between actual results and estimated amounts are adjusted in the following period as such sales are reported by the customer with a quarter in arrears.

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Contracts with Multiple Performance Obligations

We enter into contracts that can include various combinations of subscriptions, professional services, or maintenance and support, which are generally distinct and accounted for as separate performance obligations.

For contracts with multiple performance obligations, we allocate the transaction price of the contract to each performance obligation on a relative basis using the respective SSP for each performance obligation.

The Company enters into contracts that can include various combinations of subscriptions, professional services and maintenance and support, which are generally distinct and accounted for as separate performance obligations.

For contracts with multiple performance obligations, the Company allocates the transaction price of the contract to each performance obligation on a relative basis using the respective SSP for each performance obligation.

Costs Capitalized to Obtain Revenue Contracts, Net

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The capitalized amounts consist primarily of sales commissions paid to our direct sales force.

Capitalized amounts also include (i) amounts paid to employees other than the direct sales force who earn incentive payouts under annual compensation plans that are tied to the value of contracts acquired and (ii) the associated payroll taxes and fringe benefit costs associated with the payments to our employees.

Capitalized amounts also

include (i) amounts paid to employees other than the direct sales force who earn incentive payouts under annual compensation plans that are tied to the value of contracts acquired and (ii) the associated payroll taxes and fringe benefit costs associated with the payments to our employees.

Costs capitalized related to new revenue contracts are generally deferred and amortized on a straight-line basis over a period of benefit that we estimate to be five years .

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Amortization of costs to obtain revenue contracts is included as a component of sales and marketing expenses in our condensed consolidated statements of operations.

During the three and nine months ended March 31, 2025, we capitalized $ 24,000 and $ 542,000 of costs to obtain revenue contracts, respectively, and amortized $ 362,000 and $ 1.0 million to sales and marketing expense, respectively.

During the three and nine months ended March 31, 2024, we capitalized $ 36,000 and $ 522,000 of costs to obtain revenue contracts, respectively, and amortized $ 325,000 and $ 1.2 million to sales and marketing expense, respectively.

Capitalized costs to obtain revenue contracts, net were $ 2.6 million and $ 3.1 million as of March 31, 2025 and June 30, 2024, respectively, on our condensed consolidated balance sheets.

During the three months ended September 30, 2025 and 2024, we capitalized $ 97,000 and $ 189,000 of costs to obtain revenue contracts, respectively, and amortized $ 320,000 and $ 354,000 to sales and marketing expense, respectively.

Capitalized costs to obtain revenue contracts, net were $ 2.4 million and $ 2.6 million as of September 30, 2025 and June 30, 2025, respectively, on our condensed consolidated balance sheets.

Deferred Revenue

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The deferred revenue balance does not represent the total contract value of annual or multi-year, non-cancelable cloud or maintenance and support agreements.

Deferred revenue is

influenced by several factors, including seasonality, the compounding effects of renewals, invoice duration, invoice timing and new business linearity within the financial reporting period.

Deferred revenue is influenced by several factors, including seasonality, the compounding effects of renewals, invoice duration, invoice timing and new business linearity within the financial reporting period.

Segment Information

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Operating segments are identified as components of an enterprise for which discrete financial information is available and regularly reviewed by our Chief Operating Decision-Maker in order to make decisions about resources to be allocated to the segment and assess its performance.

Our chief operating decision-makers under ASC 280, Segment Reporting , are our executive management team.

Our chief operating decision-makers review financial information presented on a consolidated basis for purposes of making operating decisions and assessing financial performance.

Our chief operating decision-makers (CODMs) under ASC 280, Segment Reporting , are our executive management team.

Our CODMs review financial information presented on a consolidated basis for purposes of making operating decisions and assessing financial performance.

The CODMs regularly evaluate non-GAAP operating income, which is defined as income from operations as presented on the condensed consolidated statements of operations and adding back stock-based compensation, along with significant revenue and expense categories aligned with those presented on our condensed consolidated statement of operations, and the accounting policies governing our segment are the same as those described in Note 1, “Summary of Business and Significant Accounting Policies.”

Our revenue is derived from North America and combined Europe, Middle East, and Africa (EMEA) and is disclosed in Note 2.

However, we incur operating expenses in the North America, EMEA, and Asia Pacific regions.

The following table presents our income from operations among our three operating regions (in thousands):

The following table presents our income (loss) from operations among our three operating regions (in thousands):

Three Months Ended

Nine Months Ended

Income from operations:

September 30,

Income (loss) from operations:

North America

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The following table presents our long-lived assets, corresponding to our geographic areas are as follows (in thousands):

September 30,

Long-lived assets:

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We also partner with system integrators and managed service providers.

One customer, who is also one of our resell partners, accounted for more than 10% of total revenue during the three and nine months ended March 31, 2025.

Two customers, one of which is also a resell partner, accounted for more than 10% of total revenue during the three and nine months ended March 31, 2024.

Two customers, one of which is our resell partner, accounted for 10% or more of our gross accounts receivable balance, less provision for credit losses as of March 31, 2025.

Four customers, one of which is our resell partner, accounted for 10% or more of our gross account receivable balance, less provision for credit losses as of June 30, 2024.

One customer, including one of our partners, accounted for 15 %, of total revenue during the three months ended September 30, 2025.

Two customers, including one of our partners, accounted for 15 % and 10 %, respectively, of total revenue during the three months ended September 30, 2024.

Two and three customers accounted for more than 10% of our gross accounts receivable, less provision for credit losses balance as of September 30, 2025 and 2024, respectively.

Accounts Receivable and Provision for Credit Losses

We extend unsecured credit to our customers on a regular basis.

Our accounts receivable are derived from revenue earned from customers and are not interest bearing.

We also maintain a provision for credit losses to reserve for potential uncollectible trade receivables.

We extend unsecured credit to customers on a regular basis.

Our accounts receivable is derived from revenue earned from customers and are not interest bearing.

We also maintain provision for credit losses to reserve for potential uncollectible trade receivables.

We review our trade receivables by aging category to identify specific customers with known disputes or collectability issues.

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and internationally, and changes in customer financial conditions.

We write off a receivable after collection efforts have been exhausted and the amount is deemed uncollectible.

Recovered written off receivables are recorded as they occur.

If we make different judgments or utilize different estimates, then material differences may result in additional reserves for trade receivables, which would be reflected by charges in general and administrative expenses for any period presented.

We write-off receivables after all collection efforts have been exhausted and the amounts are deemed uncollectible.

In certain revenue contracts, contractual billings do not coincide with revenue recognized on the contract.

Unbilled accounts receivables are recorded when revenue recognized on the contract exceeds billings, pursuant to contract provisions, and becomes billable upon certain criteria being met.

Unbilled accounts receivables, for which the Company has the unconditional right to consideration, totaled $ 1.3 million and $ 3.6 million as of March 31, 2025 and June 30, 2024, respectively, and are included in the gross accounts receivable balance, less provision for credit losses on the accompanying condensed consolidated balance sheets.

Unbilled accounts receivables, for which the Company has the unconditional right to consideration, totaled $ 1.4 million, as of September 30, 2025 and June 30, 2025, and are included in the accounts receivable, provision for credit losses, balance on the accompanying condensed consolidated balance sheets.

Stock-Based Compensation

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The ESPP provides that eligible employees may purchase the Company’s common stock through payroll deductions at a price equal to 85 % of the lower of the fair market value at the entry date of the applicable offering period or at the end of each applicable purchasing period.

The offering period, meaning a period with respect to which the right to purchase shares of our common stock may be granted under the ESPP, will not exceed twenty-seven months and consist of a series of six-month purchase periods.

The offering period, meaning a period with respect to which the right to purchase shares

of our common stock may be granted under the ESPP, will not exceed twenty-seven months and consist of a series of six-month purchase periods.

Eligible employees may join the ESPP at the beginning of any six-month purchase period.

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Three Months Ended

Nine Months Ended

September 30,

Stock-Based Compensation Expense:

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Total stock-based compensation expense

Total stock-based compensation includes expense related to non-employee awards of $ 11,000 and $ 42,000 during the three and nine months ended March 31, 2025, respectively.

Total stock-based compensation includes expense related to non-employee awards of $ 26,000 and $ 77,000 during the three and nine months ended March 31, 2024, respectively.

Total stock-based compensation includes expense related to the ESPP of $ 84,000 and $ 245,000 for the three and nine months ended March 31, 2025, respectively.

Total stock-based compensation includes expense related to the ESPP of $ 102,000 and $ 268,000 for the three and nine months ended March 31, 2024, respectively.

Total stock-based compensation includes expense related to non-employee awards of $ 2,700 and $ 20,000 during the three months ended September 30, 2025 and 2024, respectively.

Total stock-based compensation includes expense related to the ESPP of $ 60,000 and $ 80,000 for the three months ended September 30, 2025 and 2024, respectively.

We utilize the Black-Scholes valuation model for estimating the fair value of the stock-based compensation of options granted and ESPP stock purchase rights.

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All shares of our common stock issued pursuant to our stock option, RSUs, and ESPP plans are only issued out of an authorized reserve of shares of common stock which were previously registered with the SEC on Registration Statements on Form S-8.

During the three months ended March 31, 2025 and 2024, we granted options to purchase 149,700 and 9,600 shares of common stock with a weighted-average grant date fair value of $ 2.52 and $ 3.17 per share, respectively.

During the nine months ended March 31, 2025 and 2024, we granted options to purchase 513,467 and 60,000 shares of common stock with a weighted-average grant date fair value of $ 2.66 and $ 3.27 per share, respectively.

During the three months ended September 30, 2025 and 2024, we granted options to purchase 115,700 and 26,700 shares of common stock with a weighted-average fair value of $ 3.65 and $ 3.52 per share, respectively.

We used the following weighted-average assumptions as inputs into the Black-Scholes valuation model to estimate the fair value of the options granted:

Three Months Ended

Nine Months Ended

September 30,

Expected volatility

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Treasury Strips rate with maturities approximating the expected lives of the awards during the period, which approximate the rate in effect at the time of the grant.

On December 1, 2024, certain employees were granted the right to purchase an aggregate of 103,618 shares under the ESPP.

Stock-based compensation expense for the three and nine months ended March 31, 2025 was $ 84,000 and $ 115,000 , respectively.

On December 1, 2023, certain employees were granted the right to purchase an aggregate of 87,332 shares under the ESPP.

Stock-based compensation expense for the three and nine months ended March 31, 2024 was $ 102,000 and $ 136,000 , respectively.

As of March 31, 2025, there were 674,749 shares of common stock available for issuance under the ESPP.

On June 1, 2025 and 2024, employees were granted the right to purchase an aggregate of 82,635 and 90,792 shares under the ESPP, respectively.

During each of the three months ended September 30, 2025 and 2024, no ESPP grants or purchase occurred.

As of September 30, 2025, there were 589,695 shares of common stock available for issuance under the ESPP.

We base our estimate of expected life of a stock option on the historical exercise behavior and cancellations of all past option grants made by the Company during the time period which its equity shares have been publicly traded, the contractual term of the option, the vesting period and the expected remaining term of the outstanding options.

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Improvements to Employee Share-Based Accounting , we elected to continue to estimate forfeitures in the calculation of stock-based compensation expense.

As of March 31, 2025, there was approximately $ 998,000 of total unrecognized compensation cost, net of expected forfeitures, related to unvested stock options, which is expected to be recognized over the weighted-average period of 1.06 years.

There were 11,800 and 60,992 options exercised during the three months ended March 31, 2025 and 2024, respectively.

There were 161,117 and 184,492 options exercised during the nine months ended March 31, 2025 and 2024, respectively.

As of March 31, 2025, there was approximately $ 740,000 of total unrecognized compensation cost, net of expected forfeitures, related to unvested RSUs, which is expected to be recognized over the weighted-average period of 0.63 years.

There were no RSUs granted during the three months ended March 31, 2025.

There were 226,654 RSUs granted during the nine months ended March 31, 2025, with a weighted average grant date fair value of $ 5.71 per share.

There were no RSUs granted during the three months ended March 31, 2024.

There were 200,821 RSUs with a weighted average grant date fair value of $ 7.55 per share granted during the nine months ended March 31, 2024.

As of September 30, 2025, there was approximately $ 894,000 of total unrecognized compensation cost, net of expected forfeitures, related to unvested stock options, which is expected to be recognized over the weighted-average period of 1.6 years.

There were 62,106 and 32,317 options exercised during the three months ended September 30, 2025 and 2024 , respectively.

As of September 30, 2025, there was approximately $ 125,000 of total unrecognized compensation cost, net of expected forfeitures, related to unvested RSUs, which is expected to be recognized over the weighted-average period of 0.1 years.

There were no RSUs granted during the three months ended September 30, 2025 and 2024.

We account for warrants as either equity-classified or liability-classified instruments based on an assessment of the warrant’s specific terms and applicable authoritative guidance in FASB ASC Topic 480, Distinguishing Liabilities from Equity , and ASC Topic 815, Derivatives and Hedging .

The assessment considers whether the warrants are freestanding financial instruments pursuant to ASC Topic 480, meet the definition of a liability pursuant to ASC 480, and whether the warrants meet all of the requirements for equity classification under ASC Topic 815, including whether the warrants are indexed to our own common shares and whether the warrant holders require mandatory cash settlement, among other conditions for equity classification.

This assessment, which requires the use of professional judgment, is conducted at the time of warrant issuance.

For warrants that meet all of the criteria for equity classification, the warrants are recorded as a component of additional paid-in capital at the time of issuance.

The grant date fair value of the warrants were estimated using a Black Scholes valuation model.

Lease agreements are evaluated to determine whether an arrangement is or contains a lease in accordance with ASC 842, Leases.

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We operate under a single reporting unit and accordingly, all of our goodwill is associated with the entire company.

We had no indicators of impairment during the three and nine months ended March 31, 2025.

We had no indicators of impairment during the three months ended September 30, 2025.

REVENUE RECOGNITION

Disaggregation of Revenue

The following table presents our SaaS and professional services revenue during the three and nine months ended March 31, 2025 and 2024, respectively (in thousands):

The following table presents our SaaS and professional services revenue during the three months ended September 30, 2025 and 2024, respectively (in thousands):

Three Months Ended

Nine Months Ended

September 30,

Professional services revenue

Total revenue

The following table presents our revenue recognized over-time and at a point-in-time during the three and nine months ended March 31, 2025 and 2024, respectively (in thousands):

The following table presents our revenue recognized over-time and at a point-in-time during the three months ended September 30, 2025 and 2024, respectively (in thousands):

Three Months Ended

Nine Months Ended

September 30,

Point-in-time

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Three Months Ended

Nine Months Ended

September 30,

North America

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The following table presents our contract liabilities (in thousands):

March 31, 2025

Balance as of

September 30, 2025

June 30, 2025

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Total deferred revenue

$ 7.9 million and $ 30.6 million of deferred revenue as of June 30, 2024 was recognized as revenue during the three and nine months ended March 31, 2025, respectively.

$ 19.3 million of deferred revenue as of June 30, 2025 was recognized as revenue during the three months ended September 30, 2025.

Remaining Performance Obligations

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The transaction price allocated to the remaining performance obligation is influenced by a variety of factors, including seasonality, timing of renewals, average contract terms and foreign currency exchange rates.

As of March 31, 2025, our remaining performance obligations were $ 66.5 million, of which we expect to recognize $ 44.3 million and $ 22.2 million as revenue within one year and beyond one year, respectively.

As of September 30, 2025, our remaining performance obligations were $ 86.9 million, of which we expect to recognize $ 58.4 million and $ 28.5 million as revenue within one year and beyond one year, respectively.

EARNINGS PER SHARE

Basic earnings per share is computed using the weighted-average number of shares of common stock outstanding.

In periods where net income is reported, the weighted-average number of shares is increased by stock options in the money and shares issuable for RSUs subject to service-based vesting requirements to calculate diluted earnings per share.

The following table represents the calculation of basic and diluted earnings per share (unaudited;

in thousands, except per share data):

In periods where net income is reported, the weighted-average number of shares is increased by stock options in the money, shares issuable for RSUs subject to service-based vesting requirements, and the warrants in the money to calculate diluted earnings per share.

The following table represents the calculation of basic and diluted earnings per share (unaudited, in thousands, except per share data):

Three Months Ended

Nine Months Ended

September 30,

Per share information:

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Effect of dilutive options and RSUs

Weighted-average shares of stock options to purchase 3,527,358 and 3,458,040 shares of common stock for the three months ended March 31, 2025 and 2024, respectively, and weighted-average shares of stock options to purchase 3,458,061 and 3,504,202 shares of common stock for the nine months ended March 31, 2025 and 2024, respectively, were not included in the computation of diluted earnings per share due to their anti-dilutive effect.

Weighted-average shares of stock options to purchase 2,861,639 and 3,386,960 shares of common stock and warrants to purchase 500,000 and 0 shares of common stock for the three months ended September 30, 2025 and 2024, respectively, were not included in the computation of diluted net income per share due to their anti-dilutive effect.

Such securities could have a dilutive effect in future periods.

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Under this method, deferred tax liabilities and assets are recognized for the estimated future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases.

We assess our ability to realize the deferred tax assets on a quarterly basis and we establish a valuation allowance if it is more-likely-than-not that some portion of the deferred tax assets will not be realized.

For the legacy eGain business in the U.S., based upon the weight of available evidence, which includes our historical operating performance, our future investment plans, and the uncertainty in the current market and economic environment, we have provided a full valuation allowance against our net deferred tax assets.

Performance improvement in the U.S.

could result in a change in the realization of the deferred tax assets in the next twelve months, which would result in a release of the valuation allowance for such jurisdiction.

The reversal of such valuation allowance would result in an income tax benefit for the quarterly and annual fiscal periods in which we release the valuation allowance.

However, the exact timing and amount of the valuation allowance release are subject to change on the basis of the positive evidence that exists at such time.

For the legacy eGain business in the United States, based upon the weight of available evidence, which includes our historical operating performance, our future investment plans, and the uncertainty in the current market and economic environment, we have determined that it is more likely than not that we will be able to utilize the deferred tax assets and as such, do not have a valuation allowance against our net deferred tax assets except for the California net operating losses and research and development credits.

For the legacy eGain business in the United Kingdom, based on the positive evidence, the Company has determined it would be able to utilize the deferred tax assets and does not have a valuation allowance against the deferred tax assets.

The remaining eGain foreign operations, including its wholly-owned subsidiary Exony Limited, have historically been profitable and we believe it is more likely than not that those assets will be realized.

Our tax provision primarily relates to foreign activities as well as state income taxes.

Our income tax rate differs from the statutory tax rates primarily due to the change in valuation allowance, stock-based compensation, Section 267 inclusion, research and development tax credits, and our foreign operations.

Our tax provision primarily relates to foreign activities as well as federal and state income taxes.

Our income tax rate differs from the statutory tax rates primarily due to stock-based compensation, Subpart F income,research and development tax credits, and our foreign operations.

We account for uncertain tax positions according to the provisions of ASC 740.

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We consider many factors when evaluating and estimating tax positions and tax benefits, which may require periodic adjustments and which may not accurately anticipate actual outcomes.

As of March 31, 2025, utilization of the net operating loss (NOL) or tax credit carryforwards to offset future taxable income and taxes, respectively, are subject to an annual limitation under the Internal Revenue Code of 1986 and similar state provisions, which is determined by first multiplying the value of the Company’s stock at the time of the ownership change by the applicable long-term, tax-exempt rate, and then could be subject to additional adjustments such as built in gain or built in loss, as required.

As of September 30, 2025, utilization of the net operating loss (NOL) or tax credit carryforwards to offset future taxable income and taxes, respectively, are subject to an annual limitation under the Internal Revenue Code of 1986 and similar state provisions, which is determined by first multiplying the value of the Company’s stock at the time of the ownership change by the applicable long-term, tax-exempt rate, and then could be subject to additional adjustments such as built in gain or built in loss, as required.

Any limitation may result in expiration of all or a portion of its NOL and or tax credit carryforwards before utilization.

The Company has not identified a change in ownership as of March 31, 2025 that would significantly limit the NOL carryovers.

Under the Tax Cuts and Jobs Act, enacted on December 22, 2017, federal NOLs incurred in 2018 and in future years may be carried forward indefinitely, but generally may not be carried back, and the deductibility of such NOLs is limited to 80% of taxable income.

In 2024, California enacted legislation including S.B.167, which suspends the use of NOLs by businesses for tax years 2024 through 2026, limits the use of tax credits by businesses to $5 million for tax years 2024 through 2026, and clarifies that income not included in apportionable business income is excluded from the sales factor of the apportionment formula.

S.B.175, provides some relief from the $5 million credit limitation in S.B.

167 by allowing taxpayers subject to the limit to elect to later receive a refund of credits they would have otherwise used to reduce tax liabilities during the limitation period.

The Company has not identified a change in ownership as of September 30, 2025 that would significantly limit the NOL carryovers.

We lease our office facilities under non-cancelable operating leases that expire on various dates through fiscal year 2033.

We modified two of our existing operating leases by extending the terms under such leases, which resulted in an increase in operating lease ROU assets and operating lease liabilities in the amount of approximately $ 71,000 and $ 677,000 during the three and nine months ended March 31, 2025, respectively.

All of our office leases are classified as operating leases with lease expense recognized on a straight-line basis over the lease term.

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As our leases do not provide an implicit rate, we use our incremental borrowing rate based on information available at the commencement date to determine the present value of lease payments.

Total operating lease costs were $ 330,000 and $ 353,000 for the three months ended March 31, 2025 and 2024, respectively.

Total operating lease costs remained consistent at $ 1.0 million for the nine months ended March 31, 2025 and 2024.

For the three and nine months ended March 31, 2025, operating cash outflows for operating leases were $ 287,000 and $ 883,000 , respectively.

For the three and nine months ended March 31, 2024, operating cash outflows for operating leases were $ 310,000 and $ 900,000 , respectively.

Total operating lease costs were $ 332,000 and $ 300,000 for the three months ended September 30, 2025 and 2024, respectively.

For the three months ended September 30, 2025 and 2024, operating cash outflows for operating leases were $ 287,000 and $ 274,000 , respectively.

The following tables present information about leases on our condensed consolidated balance sheets (in thousands):

September 30, 2025

June 30, 2025

Operating lease right-of-use assets

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The following table presents information about the weighted average lease term and discount rate as follows:

September 30, 2025

June 30, 2025

Weighted average remaining lease term (in years)

Weighted average discount rate

As of March 31, 2025, remaining maturities of lease liabilities are as follows (in thousands):

As of September 30, 2025, remaining maturities of lease liabilities are as follows (in thousands):

Fiscal Period:

Remaining three months of fiscal year 2025

Remaining nine months of fiscal year 2026

Fiscal year 2027

44 unchanged sentences

Our money market funds are measured at fair value on a recurring basis based on quoted market prices in active markets and are classified as level 1 within the fair value hierarchy.

As of March 31, 2025 and June 30, 2024, cash equivalents classified as level 1 instruments, including money market account investments, were measured at $ 48.8 million and $ 58.4 million, respectively.

As of September 30, 2025 and June 30, 2025, cash equivalents classified as level 1 instruments, including money market account investments, were measured at $ 47.6 million and $ 43.0 million, respectively.

SHARE REPURCHASE PROGRAM

On November 14, 2022, our board of directors authorized a stock repurchase program under which we may purchase up to $ 20.0 million of our outstanding common stock.

On May 31, 2024, our board of directors authorized a $ 20.0 million increase in its stock repurchase program, bringing the aggregate amount we may purchase thereunder from $ 20.0 million to $ 40.0 million of its outstanding common stock.

As of March 31, 2025, approximately $ 5.0 million remained available for stock repurchases pursuant to our stock repurchase program.

On November 14, 2022, eGain’s Board of Directors authorized a stock repurchase program under which the Company may purchase up to $ 20 million of its own outstanding common stock.

On May 24, 2024, the Board of Directors approved a $ 20 million increase in its stock repurchase program, bringing the aggregate amount eGain may purchase thereunder from $ 20 million to $ 40 million of its outstanding common stock.

On September 3, 2025, the Board of Directors approved an additional $ 20 million increase in its stock repurchase program, bringing the aggregate amount eGain may purchase thereunder from $ 40 million to $ 60 million of its outstanding common stock.

As of September 30, 2025, approximately $ 19.7 million, including associated trading fees and estimated taxes, remained available for stock repurchases pursuant to our stock repurchase program.

Under the stock repurchase program, we may purchase shares of common stock on a discretionary basis from time to time through open market transactions or privately negotiated transactions at prices deemed appropriate by us.

In addition, at our discretion, open market repurchase of common stock may also be made under a Rule 10b5-1 plan, which would permit common stock to be repurchased when we might otherwise be precluded from doing so under insider trading laws or self-imposed trading restrictions.

In addition, at the discretion of eGain, open market repurchase of common stock may also be made under a Rule 10b5-1 plan, which would permit common stock to be repurchased when the Company might otherwise be precluded from doing so under its insider trading laws or self-imposed trading restrictions.

The timing and number of shares repurchased will be determined based on an evaluation of market conditions and other factors, including stock price, trading volume, general business and market conditions, and the availability of capital.

The original stock repurchase program became effective on November 14, 2022, and was amended on November 14, 2024 to extend the term until the earlier of (i) the date the aggregate amount of shares that can be repurchased under the stock repurchase program have been repurchased and (ii) November 14, 2025, unless further extended.

On September 3, 2025, the Board of Directors also approved to extend the stock repurchase program until the earlier of (i) the date the aggregate amount of shares that can be repurchased under the stock repurchase program have been repurchased and (ii) the date the Board of Directors decides to terminate the stock repurchase program.

The stock repurchase program does not obligate us to acquire a specified number of shares and may be modified, suspended, or discontinued at any time at our discretion without notice.

The stock repurchase program will be funded using existing cash or future cash flows.

During the three months ended March 31, 2025, 894,620 shares have been repurchased for an average acquisition cost per share of $ 5.61 , totaling $ 5.0 million.

During the nine months ended March 31, 2025, 1,985,978 shares have been repurchased for an average acquisition cost per share of $ 6.05 , totaling $ 12.0 million.

230,734 shares have been repurchased for an average acquisition cost per share of $ 6.38 , totaling $ 1.5 million during the three months ended September 30, 2025.

We intend to reissue repurchased shares at a later date and therefore carry the shares as treasury stock, at cost.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with the condensed consolidated financial statements and the related notes included in Item 1 of Part I of this Quarterly Report on Form 10-Q, and with our audited financial statements and the related notes included in our Annual Report on Form 10-K for the year ended June 30, 2024.

This Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995.

These statements relate to future periods, future events or our future operating or financial plans or performance.

Often, these statements include the words “believe,” “expect,” “target,” “anticipate,” “intend,” “plan,” “seek,” “estimate,” “potential,” or words of similar meaning, or future or conditional verbs such as “will,” “would,” “should,” “could,” “might,” or “may,” or the negative of these terms, and other similar expressions.

These forward-looking statements that involve risks and uncertainties include statements as to:

● our belief that it is useful to exclude certain non-cash charges and non-core operational charges from non-GAAP operating income;

● expected benefits of our solutions to our clients and partners;

● our value proposition;

● customer and market expectations in the market in which we operate, and our ability to meet expectations and satisfy such needs;

● our lengthy sales cycles and the difficulty in predicting timing of sales or delays;

● our expectations with respect to revenue, cost of revenue, expenses and other financial metrics;

● our business plans, strategies, targets, and outlook;

● changes in technology, including AI technology and services;

● our expectations related to our product development plan;

● competition in the markets in which we do business and our competitive advantages;

● our beliefs regarding our prospects for our business;

● changes in demand for our solutions;

● our expectations regarding the composition of our customers and the result of a loss of a significant customer;

● our reliance on strategic and third-party distribution partnerships;

● the risk of unauthorized access to a customer’s data or our data or our IT systems and cybersecurity attacks;

● our ability to timely adapt and comply with changing European regulatory and political environments;

● the effect of recent changes in U.S.

tax legislation;

● the effect of compliance with privacy laws and regulations on our business and our customers;

● our ability to take adequate precautions against claims or lawsuits made by third parties, including alleged infringement of proprietary rights;

● the adequacy of our capital resources and our ability to raise additional financing;

● the risks related to our international operations;

● the potential impact of foreign currency fluctuations and inflation;

● the potential impact of health epidemics.

These forward-looking statements reflect our current views with respect to future events, are based on assumptions and are subject to risks and uncertainties.

These risks and uncertainties could cause actual results to differ materially from those projected and include, but are not limited to:

● our ability to manage our business plans, strategies, target and outlooks and any business-related forecasts or projections;

● our ability to improve our current solutions;

● our ability to innovate and respond to rapid technological change and competitive challenges;

● our ability to execute our sales and marketing strategy;

● customer acceptance of our existing and future solutions;

● our ability to predict subscription renewals;

● the impact of new legislation or regulations on our business;

● the impact of accounting pronouncements and our critical accounting policies, judgments, estimates, models and assumptions on our financial results;

● our ability to compete;

● the success of our strategic and distribution partnerships;

● our ability to obtain capital when needed;

● our ability to manage future growth;

● our ability to retain key personnel and hire additional personnel;

● risks related to protection of our intellectual property;

● foreign currency fluctuations and inflation;

● the global economic environment;

● risks related to public health pandemics;

● the risks set forth under “Risk Factors.”

Given these risks and uncertainties, you should not place undue reliance on these forward-looking statements.

Except as required by federal securities laws, we undertake no obligation to update any forward-looking statements for any reason, even if new information becomes available or other events occur in the future.

All references to “eGain”, the “Company”, “our”, “we” or “us” mean eGain Corporation and its subsidiaries, except where it is clear from the context that such terms mean only eGain and exclude its subsidiaries.

eGain and eGain® are trademarks of eGain Corporation.

We also refer to trademarks of other corporations and organizations in this report.

Summary Risk Factors

Our business is subject to numerous risks and uncertainties that could affect our ability to successfully implement our business strategy and affect our financial results.

You should carefully consider all of the information in this report and, in particular, the following principal risks and all of the other specific factors described in Item 1A.

of this report, “Risk Factors,” before deciding whether to invest in our company:

● Our business is influenced by a range of factors that are beyond our control and that we have no comparative advantage in forecasting.

● Our SaaS business model is subject to certain risks.

● Our revenue and operating results have fluctuated in the past and are likely to fluctuate in the future, and because we recognize revenue from subscriptions over a period of time, downturns in revenue may not be immediately reflected in our operating results.

● We cannot accurately predict subscription renewal rates and the impact these rates may have on our future revenue and operating results.

● Our lengthy sales cycles and the difficulty in predicting timing of sales or delays may impair our operating results.

● Because we depend on a relatively small number of customers for a substantial portion of our revenue, the loss of any of these customers or our failure to attract new significant customers could adversely impact our revenue and harm our business.

● The market for customer engagement software, including generative AI product offerings, is competitive, and our business will be adversely affected if we are unable to successfully compete.

● If we fail to expand and improve our sales performance and marketing activities, or retain our sales and marketing personnel, we may be unable to grow our business, which could negatively impact our operating results and financial condition.

● Our failure to maintain, develop or expand strategic and third-party distribution channels would impede our revenue growth.

● Difficulties and delays in customers implementing our products could harm our revenue and margins.

● We conduct a significant portion of our business and operations outside of the U.S., which exposes us to additional risks that may not exist in the U.S.

These risks in turn could cause our operating results and financial condition to suffer.

● Unplanned system interruptions, delays in service or inability to increase capacity, including internationally, at our third-party data center facilities could impair the use or functionality of our cloud operations and harm our business.

● Software errors could be costly and time-consuming for us to correct, and could harm our reputation and impair our ability to sell our solutions.

● The terms we agree to in our Service Level Agreements or other contracts may result in increased costs or liabilities, which would in turn affect our results of operations.

● If we are unable to increase the profitability of SaaS revenue, if we experience significant customer attrition, or if we are required to delay recognition of revenue, our operating results could be adversely affected.

● We depend on broad market acceptance of our applications and of our business model.

If our expectations regarding the market for our applications are not met, our business could be seriously harmed.

● We may be unable to respond to the rapid technological change and changing customer preferences in the online sales, marketing, customer service, and/or online consumer services industries and this may cause our business to suffer.

● We employ third-party technologies for use in or with our platform and the inability to license such technologies on commercially reasonable terms or the inability to maintain these licenses or errors in the software we license could result in increased costs, or reduced service levels, which could adversely affect our business.

● Our offshore product development, support and professional services may prove difficult to manage or may not allow us to realize our cost reduction goals, produce effective new solutions and provide professional services to drive growth.

● If our cybersecurity systems or the systems of our vendors, partners and suppliers are breached and unauthorized access is obtained to a customer’s data or our data or IT systems, our service may be perceived as not being secure, customers may curtail or stop using our service and we may incur significant legal and financial exposure and liabilities.

● Changes in the European regulatory environment regarding privacy and data protection regulations, such as the GDPR, could expose us to risks of noncompliance and costs associated with compliance.

● Privacy concerns and laws, evolving regulation of cloud computing and other domestic or foreign regulations may limit the use and adoption of our solutions and adversely affect our business.

eGain automates customer engagement with an AI knowledge hub SaaS solution.

We sell to enterprises who want to better serve customers at scale by delivering trusted answers across self-service, contact centers, and field staff.

Many global brands use eGain to improve experience and reduce costs.

We are headquartered in Sunnyvale, California in the U.S.

We also operate in the United Kingdom and India.

Key Financial Measures

We monitor the key financial performance measures set forth below as well as cash and cash equivalents and available debt capacity, which are discussed in “Liquidity and Capital Resources,” to help us evaluate trends, establish budgets, measure the effectiveness of our sales and marketing efforts and assess operational effectiveness and efficiencies.

We believe total revenue is a useful measure to value our business.

SaaS revenue is defined as revenue from cloud delivery arrangements, term licenses, embedded OEM royalties and associated support.

Professional services revenue includes system implementation, consulting, training, and managed services.

The following table presents total revenue for each of the following periods:

Three Months Ended

Nine Months Ended

(in thousands)

Professional services revenue

Total revenue:

Non-GAAP Operating Income

Non-GAAP operating income is defined as income from operations, adjusted for the impact of stock-based compensation expense.

Management believes that it is useful to exclude certain non-cash charges and non-core operational charges from non-GAAP operating income because (i) the amount of such expenses in any specific period may not directly correlate to the underlying performance of our business operations;

and (ii) such expenses can vary significantly between periods as a result of the timing of new stock-based awards.

The presentation of the non-GAAP financial measures is not intended to be considered in isolation or as a substitute for, or superior to, the financial information prepared and presented in accordance with GAAP.

The following table presents a reconciliation of GAAP income from operations to non-GAAP income from operations for each of the following periods:

Three Months Ended

Nine Months Ended

(in thousands)

Income from operations

Stock-based compensation

Non-GAAP income from operations

Critical Accounting Policies and Estimates

On August 14, 2025, the Company issued a warrant (Warrant) to JPMC Strategic Investments I Corporation (JPMC) to acquire 500,000 shares of the Company’s common stock at an exercise price of $ 7.10 per share.

The fully vested Warrant was issued without cash consideration and is exercisable through the fifth anniversary of issuance.

The offer and issuance of the Warrant is expected to be exempt from registration under the Securities Act of 1933 (Securities Act), pursuant to Section 4(a)(2) of the Securities Act.

JPMC has represented to the Company that it is an “accredited investor” as defined in Regulation D and that the Warrant is being acquired for investment purposes and not with a view to, or for sale in connection with, any distribution thereof.

The Warrant was first evaluated under ASC Topic 480, Distinguishing Liabilities from Equity , and determined that it does not meet the criteria for a liability classification.

The Warrant was then evaluated under ASC 815-40, Derivatives and Hedging—Contracts in Entity’s Own Equity , and determined to be an equity-classified instrument.

Accordingly, the fair value of the warrant at grant date was recognized in additional paid-in capital within stockholders’ equity.

The grant-date fair value of the Warrant was estimated at $ 2.70 per warrant using the Black-Scholes valuation model with the following assumptions:

expected volatility of 54 %, risk-free interest rate of 2.87 %, expected term of 5 years, and no expected dividends.

The total fair value of the Warrant was $ 1.35 million and was recognized as a non-cash general and administrative expense during the three months ended September 30, 2025.

No warrants were exercised or expired during the three months ended September 30, 2025.

SUBSEQUENT EVENTS

The Company evaluated subsequent events and transactions that occurred after the balance sheet date up to the date that the condensed consolidated financial statements were issued.

The Company did not identify any other subsequent events, other than as described below, that would have required adjustment or disclosure in the condensed consolidated financial statements that are not already previously disclosed.

On September 29, 2025, the Company entered into a lease agreement in Sunnyvale, California.

The term of the lease expires on March 31, 2027 and requires an average monthly rent of approximately $ 21,000 for 18 months from the lease commencement date in October 2025.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements