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Item 1A. Risk Factors

2025-05-14 compared with 2025-02-13 · 34 added, 17 removed, 468 unchanged (10% of the section changed)

106 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 customer’s 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.

7 unchanged sentences

In addition, negative publicity related to our customer relationships, regardless of its accuracy, may further damage our business by affecting our ability to compete for new business with current and prospective customers .

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

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.

We derived 23% and 24% of our revenue from EMEA sales during the three and six months ended December 31, 2024 respectively, which is consistent with the three and six months ended December 31, 2023.

Revenue from EMEA sales remained consistent at 22% of our total revenue during the three months ended March 31, 2025 and 2024.

Revenue from EMEA sales was 23% during the nine months ended March 31, 2025 of our total revenue compared to 21% during the nine months ended March 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:

8 unchanged sentences

● 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 December 31, 2024, approximately 46% of our workforce was employed in India.

Any of the above risks could adversely affect our international operations, reduce our revenue from customers outside of the U.S.

or increase our operating costs, each of which could adversely affect our business, results of operations, financial condition, and growth prospects.

As of March 31, 2025, approximately 43% of our workforce was employed in India.

Of our employees in India, 49% are allocated to research and development.

Although the movement of certain operations internationally was principally motivated by cost cutting, the continued management of these remote operations requires significant management attention

and financial resources that could adversely affect our operating performance.

Although the movement of certain operations internationally was principally

motivated by cost cutting, the continued management of these remote operations requires significant management attention and financial resources that could adversely affect our operating performance.

In addition, with the significant increase in the numbers of foreign businesses that have established operations in India, the competition to attract and retain employees there has increased significantly.

2 unchanged sentences

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 United States, the European Union (EU) and India are also of great importance to our operations.

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.

Any of these risks could have a significant impact on our product development, customer support, or professional services.

8 unchanged sentences

Our success largely depends on the efficient and uninterrupted operation of our computer and communications hardware and network systems.

We currently serve our customers from third-party data center facilities operated by third parties in the United States and other international locations.

We currently serve our customers from third-party data center facilities operated by third parties in the U.S.

and other international locations.

Any damage to, or failure of, our systems generally could interrupt service or impair the use or functionality of our cloud operations.

39 unchanged sentences

Our business model assumes that both customers and companies will increasingly elect to communicate through multiple channels, as well as demand integration of the online channels into the traditional telephone-based call center.

If any of these assumptions is incorrect or if customers and companies do not adopt digital technology in a timely manner, our business will be seriously harmed and our stock price will decline.

If any of these assumptions are incorrect or if customers and companies do not adopt digital technology in a timely manner, our business will be seriously harmed and our stock price will decline.

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.

96 unchanged sentences

While we have security measures in place that are designed to protect customer information and prevent data loss and other security breaches, these security measures may be breached as a result of third-party action, including intentional misconduct by computer hackers (which may involve nation states and individuals sponsored by them), employee error, malfeasance or otherwise and result in someone obtaining unauthorized access to our customers’ data or our data, including our intellectual property and other confidential business information, or our IT systems.

Additionally, third parties may attempt to fraudulently induce employees or customers into disclosing sensitive information such as user names, passwords or other information in order to gain access to our customers’ data or our data or IT systems.

Additionally, third parties may attempt to fraudulently induce employees or customers into disclosing sensitive information such as usernames, passwords or other information in order to gain access to our customers’ data or our data or IT systems.

Employees or contractors have introduced vulnerabilities in, and enabled the exploitation of, our IT environments in the past and may do so in the future.

2 unchanged sentences

Further, if unauthorized access or sabotage remains undetected for an extended period of time, the effects of such breach could be exacerbated.

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 make to address vulnerabilities and security defects.

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.

118 unchanged sentences

We face risks related to pandemic and public health emergencies which could have a material adverse effect on our business, financial condition and results of operations .

Pandemics, such as the COVID-19 pandemic, and other public health emergencies, and preventative measures taken to contain or mitigate such crises have caused, and may in the future cause, business slowdown or shutdown in affected areas and significant disruption in the financial markets, both globally and in the United States.

These events have led to and could again lead to adverse impacts to our business, results of operations, financial conditions, and cash flows.

We cannot predict whether, and to what degree, our sales, operations and financial results could in the future be affected by the pandemic and preventative measures.

● Risks presented by pandemics and other public health emergencies include, but are not limited to:

the rate of information technology spending and the ability of our customers to purchase our offerings could be adversely impacted.

● Risks presented by pandemics and other public health emergencies include, but are not limited to the rate of information technology spending and the ability of our customers to purchase our offerings could be adversely impacted.

Further, the impact of a pandemic or public health emergency could delay prospective customers’ purchasing decisions and cause them to become less inclined to trade-up from existing solutions, impact customers’ pricing expectations for our offerings, lengthen payment terms, reduce the value or duration of their subscription contracts, or adversely impact renewal rates;

12 unchanged sentences

Changes in these or other rules, or scrutiny of our current accounting practices, or a determination that our judgments or assumptions in the application of these accounting principles were incorrect, could have a significant adverse effect on our reported operating results or the way in which we conduct our business.

Changes in domestic and foreign trade policies, including the imposition of tariffs and retaliatory tariffs, and other factors beyond our control may adversely impact our business, financial condition, and results of operations.

government recently announced changes to its trade policies, including increasing tariffs on imports, in some cases significantly, and potentially negotiating or terminating existing trade agreements.

The current tariff environment is dynamic and uncertain, as the U.S.

government has announced widespread tariff reform, with the effectiveness delayed in many cases.

Changes to tariffs and other trade restrictions can be announced at any time with little or no notice.

We cannot predict with certainty the future trade policies of the U.S.

or other countries.

Additionally, potential tariffs or other U.S.

trade policy measures have triggered retaliatory actions by other countries.

Increased tariffs and trade restrictions may cause the prices of our customers, vendors, partners and suppliers’ products to increase, which could reduce demand for such products, or reduce our customers, vendors, partners and suppliers’ margins, and adversely impact their revenues, financial results, and ability to service debt.

This, in turn, could adversely impact our financial condition and results of operations.

Tariffs or other trade restrictions may lead to continuing uncertainty and volatility in U.S.

and global financial markets and economic conditions.

Disruptions and volatility in the financial markets may lead to adverse changes in the availability, terms and cost of capital, all of which could have a material adverse effect on our business, financial condition, results of operations and prospects.

Risks Related to Intellectual Property

28 unchanged sentences

We may be subject to legal proceedings and claims from time to time in the ordinary course of our business, including claims of alleged infringement of the patents and other intellectual property rights of third parties.

Our products may infringe on issued patents that may relate to our products because patent applications in the United States are not publicly disclosed until the patent is issued, and hence applications may have been filed which relate to our software products.

Our products may infringe on issued patents that may relate to our products because patent applications in the U.S.

are not publicly disclosed until the patent is issued, and hence applications may have been filed which relate to our software products.

Intellectual property litigation is expensive, time consuming, and could divert management’s attention away from running our business.

13 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 34% of our outstanding capital stock as of December 31, 2024, of which our Chief Executive Officer, Ashutosh Roy, beneficially owned approximately 31% 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 35% of our outstanding capital stock as of March 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