What changed in this filing

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Item 1A. Risk Factors

2026-02-03 compared with 2025-11-12 · 27 added, 34 removed, 448 unchanged (12% of the section changed)

16 unchanged sentences

Because we recognize revenue when we have satisfied performance obligations to customers in connection with our sales contracts, most of our revenue each quarter results from recognition of deferred revenue related to agreements entered into during previous quarters.

Consequently, declines in new or renewed subscription agreements that occur in one quarter will

largely be felt in future quarters, both because we may be unable to generate sufficient new revenue to offset the decline and because we may be unable to adjust our operating costs and capital expenditures to align with the changes in revenue.

Consequently, declines in new or renewed subscription agreements that occur in one quarter will largely be felt in future quarters, both because we may be unable to generate sufficient new revenue to offset the decline and because we may be unable to adjust our operating costs and capital expenditures to align with the changes in revenue.

In addition, our subscription model makes it more difficult for us to increase our revenue rapidly in any period, because revenue from new customers must be recognized over the applicable subscription term.

25 unchanged sentences

In addition, our customers may choose to renew for fewer subscriptions (in quantity or products) or renew for shorter contract lengths.

We cannot accurately predict renewal rates given our varied customer base of enterprise and the number of multiyear

subscription contracts.

We cannot accurately predict renewal rates given our varied customer base of enterprise and the number of multiyear subscription contracts.

Our renewal rates may decline or fluctuate as a result of a number of factors, including customer dissatisfaction with our service, decreases in customers’ spending levels, decreases in the number of users at our customers, pricing changes and general economic conditions.

25 unchanged sentences

Many of our current and potential competitors have longer operating histories, larger customer bases, broader brand recognition, and significantly greater financial, marketing and other resources.

With more established and better-financed competitors, these companies may be able to undertake more extensive marketing campaigns, adopt more aggressive pricing policies, and make more attractive offers to businesses to induce them to use their products or services.

more established and better-financed competitors, these companies may be able to undertake more extensive marketing campaigns, adopt more aggressive pricing policies, and make more attractive offers to businesses to induce them to use their products or services.

If we are unable to compete successfully, our business will be adversely affected.

1 unchanged sentence

We expect AI technology and services to be a highly competitive and rapidly evolving market.

We will bear significant development and operational costs to build and support the generative AI capabilities, products, and

services necessary to meet the needs of our customers.

We will bear significant development and operational costs to build and support the generative AI capabilities, products, and services necessary to meet the needs of our customers.

To compete effectively, we must also be responsive to technological change, potential regulatory developments, and public scrutiny.

23 unchanged sentences

If an arrangement requires significant customization or implementation services from us, recognition of the associated subscription and service revenue could be delayed.

The timing of the commencement and completion of these services is subject to factors that may

be beyond our control, as this process may require access to the customers’ facilities and coordination with the customer’s personnel after delivery of the software obligations.

The timing of the commencement and completion of these services is subject to factors that may be beyond our control, as this process may require access to the customers’ facilities and coordination with the customer’s personnel after delivery of the software obligations.

In addition, customers could cancel or delay product implementations.

9 unchanged sentences

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

We derived 19% and 25% of our revenue from EMEA sales during the three months ended September 30, 2025 and 2024.

Revenue from EMEA sales was 20% of our total revenue during the three months ended December 31, 2025 compared to 23% during the three months ended December 31, 2024.

Revenue from EMEA sales was 20% of our total revenue during the six months ended December 31, 2025 compared to 24% during the six months ended December 31, 2024.

In addition to those discussed elsewhere in this section, our EMEA sales operations are subject to a number of specific risks, such as:

6 unchanged sentences

● various international trade restrictions and tax consequences;

● hostilities or geopolitical conflicts in various parts of the world, such as the ongoing conflict between Russia and Ukraine and the evolving events in Israel and Gaza;

● hostilities or geopolitical conflicts in various parts of the world, such as the ongoing conflict between Russia and Ukraine and the evolving events around Greenland;

● reduced intellectual property protections in some countries.

Any of the above risks could adversely affect our international operations, reduce our revenue from customers outside of the United States or increase our operating costs, each of which could adversely affect our business, results of operations, financial condition, and growth prospects.

As of September 30, 2025, approximately 64% of our workforce was employed in India.

As of December 31, 2025, approximately 44% of our workforce was employed in India.

Of our employees in India, 61% are allocated to research and development.

3 unchanged sentences

Our reliance on our workforce in India makes us particularly susceptible to disruptions in the business environment in that region.

In particular, sophisticated

telecommunications links, high-speed data communications with other eGain offices and customers, and overall consistency and stability of our business infrastructure are vital to our day-to-day operations, and any impairment of such infrastructure will cause our financial condition and results to suffer.

In particular, sophisticated telecommunications links, high-speed data communications with other eGain offices and customers, and overall consistency and stability of our business infrastructure are vital to our day-to-day operations, and any impairment of such infrastructure will cause our financial condition and results to suffer.

In addition, the maintenance of stable political relations between the U.S., the European Union (EU) and India are also of great importance to our operations.

28 unchanged sentences

We have entered into support obligations with our customers that require minimum performance standards, including standards regarding the response time of our support services.

If we fail to meet these standards, our customers could terminate their relationships with us, and we could be subject to contractual refunds, and exposure to claims for losses from our customers.

If we fail to meet these standards, our customers could

terminate their relationships with us, and we could be subject to contractual refunds, and exposure to claims for losses from our customers.

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.

Our solutions are based on complex software that may contain errors, or “bugs,” that could be costly to correct, harm our reputation and impair our ability to sell our solutions to new customers.

Moreover, customers relying on our solutions

may be more sensitive to such errors and potential security vulnerabilities and business interruptions for these applications.

Moreover, customers relying on our solutions may be more sensitive to such errors, and potential security vulnerabilities and business interruptions for these applications.

If we incur substantial costs to correct any errors of this nature, our operating margins could be adversely affected.

17 unchanged sentences

While we believe the potential to be very large, we cannot accurately estimate the size or growth rate of the potential market for such product and service offerings generally, and we do not know whether our products and services in particular will achieve broad market acceptance.

The market for customer engagement software is rapidly evolving, and concerns over the security and reliability of online transactions, the privacy of users and quality of service or other issues may inhibit the growth of the Internet and commercial online services.

The market for customer engagement software is rapidly evolving, and concerns over the security and reliability of online transactions, the privacy of users and quality

of service or other issues may inhibit the growth of the Internet and commercial online services.

If the market for our applications fails to grow or grows more slowly than we currently anticipate, our business will be seriously harmed.

56 unchanged sentences

In the past, we have experienced collection delays from certain customers, and we cannot predict whether we will continue to experience similar or more severe delays in the future.

Although we have established a

provision to cover losses due to delays or inability to pay, there can be no assurance that such reserves will be sufficient to cover our losses.

Although we have established a provision to cover losses due to delays or inability to pay, there can be no assurance that such reserves will be sufficient to cover our losses.

If losses due to delays or inability to pay are greater than our reserves, it could harm our business, operating results and financial condition.

45 unchanged sentences

In addition, our ability to defend against and mitigate cyberattacks depends in part on prioritization decisions that we and third parties upon whom we rely on to address vulnerabilities and security defects.

While we endeavor to address all identified vulnerabilities in our products, we must make determinations as to how we prioritize developing and deploying the respective fixes, and we may be unable to do so prior to an attack.

While we endeavor to address all identified vulnerabilities in our

products, we must make determinations as to how we prioritize developing and deploying the respective fixes, and we may be unable to do so prior to an attack.

In addition, our customers may authorize third-party access to their customer data located in our cloud environment.

2 unchanged sentences

If these attacks are successful, they could result in the theft of proprietary, personally identifiable, confidential and sensitive information of ours, our employees, our customers and our business partners, and could materially disrupt business for us, our customers and our business partners.

A successful cybersecurity attack involving our data center, network or software

products could also negatively impact the market perception of the effectiveness of our products or lead to contractual disputes, litigation or government regulatory action against us, any of which could materially adversely affect our business, reputation and resulting operations.

A successful cybersecurity attack involving our data center, network or software products could also negatively impact the market perception of the effectiveness of our products or lead to contractual disputes, litigation or government regulatory action against us, any of which could materially adversely affect our business, reputation and resulting operations.

We may also experience disruptions, outages, and other performance problems on our systems due to service attacks, unauthorized access, or other security-related incidents.

33 unchanged sentences

Our publication of our privacy policy and other public statements that provide promises and assurances about privacy and security can subject us to potential governmental action or reputational harm if they are found to be deceptive or misrepresentative of our practices.

Further, the costs of compliance with, and other burdens imposed by, such laws,

regulations and policies that are applicable to us may limit the use and adoption of our products and solutions and could have a material adverse impact on our results of operations .

Further, the costs of compliance with, and other burdens imposed by, such laws, regulations and policies that are applicable to us may limit the use and adoption of our products and solutions and could have a material adverse impact on our results of operations.

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

6 unchanged sentences

Compliance with these laws increases operational complexity and costs, and failure to comply could result in investigations, fines, litigation, contractual liability, or reputational harm.

Internationally, global “digital” regulations continue to develop and evolve, including the EU’s GDPR, ePrivacy Directive, Network and Information Systems 2 Directive, Digital Operational Resiliance Act, Data Act, and Digital Services Act.

In addition, India’s Digital Personal Data Protection Bill (DPDP), published in 2023, but with an implementation timeline that remains uncertain, applies broadly to personal data processed within India and personal data outside the territory of India if such processing is in connection with any activity related to offering of goods or services to data subjects.

38 unchanged sentences

Our customers and potential customers conduct business in a variety of industries, including financial services, the public sector, healthcare, telecommunications and other highly regulated industries.

Regulators in certain industries have adopted and may in the future adopt regulations or interpretive positions regarding the use of cloud computing, AI and other outsourced services.

Regulators in certain industries have adopted and may in the future adopt regulations or interpretive positions regarding the use of cloud computing, AI and other

outsourced services.

The costs of compliance with, and other burdens imposed by, industry-specific laws, regulations and interpretive positions may limit customers’ use and adoption of our services and reduce overall demand for our services.

1 unchanged sentence

If we are unable to comply with these guidelines or controls, or if our customers are unable to obtain regulatory approval to use our service where required, our business may be harmed.

Our business may also be affected by evolving regulatory frameworks, including those focused on AI, cybersecurity, outsourcing, and data governance, such as the AI

Act, Digital Services Act, Network and Information Systems 2 Directive, and Digital Operational Resiliance Act in the EU, as well as U.S.

Our business may also be affected by evolving regulatory frameworks, including those focused on AI, cybersecurity, outsourcing, and data governance, such as the AI Act, Digital Services Act, Network and Information Systems 2 Directive, and Digital Operational Resilience Act in the EU, as well as U.S.

and international initiatives incorporating the NIST AI Risk Management Framework.

15 unchanged sentences

Changes to current accounting policies could have a significant effect on our reported financial results or the way in which we conduct our business.

Generally accepted accounting principles and the related accounting pronouncements, implementation guidelines and interpretations for some of our significant accounting policies are highly complex and require subjective judgments and assumptions.

Some of our more significant accounting policies that could be affected by changes in the accounting rules and the related implementation guidelines and interpretations include:

26 unchanged sentences

In addition, defending our intellectual property rights might entail significant expense.

Any of our trademarks or other intellectual property rights may be challenged by others or invalidated through administrative

process or litigation.

Any of our trademarks or other intellectual property rights may be challenged by others or invalidated through administrative process or litigation.

While we have some U.S.

28 unchanged sentences

Our insiders who are significant stockholders have the ability to exercise significant control over matters requiring stockholder approval, including the election of our board of directors, and may have interests that conflict with those of other stockholders.

Our directors and executive officers, together with their affiliates and members of their immediate families, beneficially owned, in the aggregate, approximately 39% of our outstanding capital stock as of September 30, 2025, of which our Chief

Executive Officer, Ashutosh Roy, beneficially owned approximately 34% as of such date.

Our directors and executive officers, together with their affiliates and members of their immediate families, beneficially owned, in the aggregate, approximately 36% of our outstanding capital stock as of December 31, 2025, of which our Chief Executive Officer, Ashutosh Roy, beneficially owned approximately 32% as of such date.

As a result of these concentrated holdings, Mr.

1 unchanged sentence

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 1A. Risk Factors