Slide 1: AI Knowledge for Service
INVESTOR PRESENTATION AI Knowledge for Service NASDAQ: EGAN May 2024
Slide 2: Safe Harbor statement
Safe This presentation contains forward-looking statements within the meaning of the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995, including without limitation: our financial guidance for the fourth quarter of fiscal 2024 and fiscal 2024 full year ending June 3
Slide 3: Who we are
Who we are We are the #1 AI Knowledge Platform for enterprise customer service Slide 3
Slide 4: The problem
The problem Businesses worldwide spend $1.5 trillion annually on customer service* 1 Financial challenge Businesses must reduce costs to expand profitability Lack of trusted answers leads to ineffective customer self- 2 Operational challenge service and poor agent performance Knowledge systems canno
Slide 5: The solution
The solution AI Knowledge will revolutionize the entire customer service function Technology Solution AI Knowledge delivers trusted answers to customers & agents Trusted answers lead to high customer self-service and all Operational Impact agents can effectively resolve all contacts Financial Outcom
Slide 6: The opportunity
The opportunity $20B+ SaaS Market for AI Knowledge for Service Customer Service Market Enterprise Service Market 17 Million Conversational 100 Million CC Agents Self Service Employees = $5B = $5B = $10B $10k/agent/year saving $5/contact saving $1k/employee/year saving with with a $300/agent/year wit
Slide 7: Why eGain
Why eGain Slide 7
Slide 8: Top-rated by analysts and customers
Top-rated #1 #1 by Knowledge Management + Peer Insights analysts Digital Engagement + Composable Architecture Customer Review —— and Gartner Critical Capabilities Report on Customer Engagement, 2023 customers #1 Current Product Offering —— Forrester New Wave Report on Digital-first Customer Service
Slide 9: eGain Knowledge Hub orchestrates AI + Expert in the Loop to deliver trusted answers
eGain Knowledge Hub orchestrates AI + Expert in the Loop to deliver trusted answers to customers and agents Knowledge Hub Customer Help Center Self Service SharePoint Single AI source of powered truth creation Contact Center Websites Composable Expert in Architecture the loop curation Field PDF Serv
Slide 10: Client Success
eGain AssistGPT slashes knowledge build cost Challenge How we are solving it European Energy Company Tools could not Gen AI powered Intelligent content address evolving process to create authoring to boost 5X customer inquiries AI knowledge findability and use Client Success faster Knowledge Base K
Slide 11: Our competition
Our competition Knowledge Digital Automation of Vendors Management Engagement Engagements Composability Total 4.8 4.7 4.4 4.2 18.1 4.0 4.4 4.5 3.1 16.0 4.5 4.1 4.4 3.7 16.7 4.2 4.0 3.9 2.7 14.8 4.0 4.5 4.5 4.0 17.0 4.0 4.7 4.1 2.9 15.7 Not evaluated Not evaluated Not evaluated Gartner 2023 CEC Criti
Slide 12: Progress report
Progress report Slide 12
Slide 13: Knowledge business growth indicators
Knowledge business growth indicators 1 RFPs up over 50% in first 9 months of FY24 AI Knowledge solves long- standing technology and operational challenges for customer service and 2 Pilot conversion rate at 75% delivers on the financial promise of AI by increasing productivity and significantly lowe
Slide 14: Business growth plan
Business growth plan Conversation Hub Analytics Hub Knowledge Hub Cisco OEM 50%* 50%* • Add new logos from • Cross-sell Knowledge Hub growing pipeline to existing customers • Expand within existing customers *~percentage of total revenue Slide 14
Slide 15: $83M in net cash to invest in growth
$83 M Invest in AI Knowledge • R&D in net cash • Marketing • Sales to invest in growth Buy back stock • Purchased $8.5 M in first 9 months of FY24 Slide 15
Slide 16: © 2024 eGain Corporation. All rights reserved.
© 2024 eGain Corporation. All rights reserved.
Slide 17: Q3FY24 financial highlights
Q3FY24 Metric Performance financial Total Revenue $22.4 million, down 3% year-over-year highlights Ending SaaS ARR $74.1 million, down 1% year-over-year Non-GAAP Gross Margin 71% compared to 69% in Q3FY23 Non-GAAP Net Income $2.6 million, up ~140% year-over-year Operating Cash Flow $1.7 million, or
Slide 18: Revenue and gross margin
Revenue REVENUE (YOY%) GROSS MARGIN 1 and gross 5% 74% -2% 73% margin -4% -3% 72% 71% 69% -7% $24.6 $23.8 $22.4 $23.0 $24.2 $18.2 $17.6 $17.1 $15.8 $15.8 Q3FY23 Q4FY23 Q1FY24 Q2FY24 Q3FY24 Q3FY23 Q4FY23 Q1FY24 Q2FY24 Q3FY24 $ IN MILLIONS $ IN MILLIONS 1. Excludes stock-based compensation. Slide 18
Slide 19: Net income and EBITDA margin
Net income and EBITDA NON-GAAP NET INCOME (DILUTED EPS) ADJUSTED EBITDA MARGIN1 margin $0.11 $0.12 $0.11 $0.08 16% 16% $0.03 12% 10% 5% $3.4 $2.6 $3.6 $3.8 $4.0 $3.8 $2.8 $2.3 $1.1 $1.1 Q3FY23 Q4FY23 Q1FY24 Q2FY24 Q3FY24 Q3FY23 Q4FY23 Q1FY24 Q2FY24 Q3FY24 $ IN MILLIONS $ IN MILLIONS 1. Excludes depr
Slide 20: Q4FY24 and FY24 guidance
Q4FY24 and FY24 Q4FY24 FY2024 guidance Total Revenue $21.1M – $21.4M $91.5M – $91.8M GAAP Net Income ($0.4M) – ($0.9M) $5.4M – $6.0M GAAP Net Income EPS ($0.01) – ($0.03) $0.17 – $0.19 Non-GAAP Net Income $0.2M – $0.8M $10.0M – $10.6M Non-GAAP Net Income EPS $0.01 – $0.03 $0.32 – $0.34 Slide 20
Slide 21: GAAP P&L last 5 quarters
GAAP P&L last 5 quarters $ in thousands For the Period Ending Q3FY23 Q4FY23 Q1FY24 Q2FY24 Q3FY24 Subscription 20,980 22,807 22,323 21,996 20,324 Professional services 2,033 1,828 1,853 1,819 2,026 Total Revenue 23,013 24,635 24,176 23,815 22,350 Cost of revenue 7,595 6,686 6,838 6,990 6,858 Gross Pr
Slide 22: GAAP to Non-GAAP reconciliation
GAAP to Non-GAAP reconciliation Q4 Q1 Q2 Q3 $ in thousands Q3 FY23 FY23 FY24 FY24 FY24 Gross profit $15,418 $17,949 $17,338 $16,825 $15,492 Gross profit % 67% 73% 72% 71% 69% Stock-based compensation expense 371 256 297 284 343 Non-GAAP gross profit 15,789 18,205 17,635 17,109 15,835 Non-GAAP gross
Slide 23: GAAP to Non-GAAP reconciliation
GAAP to Non-GAAP reconciliation in thousands Q3FY23 Q4FY23 Q1FY24 Q2FY24 Q3FY24 GAAP Cost of subscription $5,393 $4,882 $5,047 $5,109 $4,487 Stock-based compensation expense - - - - - Non-GAAP cost of subscription $5,393 $4,882 $5,047 $5,109 $4,487 GAAP Cost of professional services $2,202 $1,804 $1
Slide 24: GAAP to Non-GAAP reconciliation
GAAP to Non-GAAP reconciliation $ in thousands Q3FY23 Q4FY23 Q1FY24 Q2FY24 Q3FY24 Net (loss) income ($372) $2,601 $2,596 $2,185 $1,493 Depreciation and amortization expense 124 115 107 97 92 Stock-based compensation expense 1,447 963 1,208 1,195 1,110 Interest income (818) (768) (949) (982) (1,002)
Slide 25: Balance sheet
Balance sheet $ in thousands as of: Mar-31-2024 Jun-30-2023 $ in thousands as of: Mar-31-2024 Jun-30-2023 Current Assets Current Liabilities Cash and Cash Equivalents 82,982 73,201 Accounts Payable 1,534 2,044 Accounts Receivables 10,950 31,569 Accrued Expenses 12,548 13,084 Prepaid & Other C/A 4,95