eGain Corporation

Q3 total revenue was $22.5 million, up 7% year over year. SaaS revenue grew 7% year over year and represented 93% of total revenue; excluding about $600,000 of noncore messaging products being sunset, total revenue would have been up 13% and SaaS revenue up 14% year over year. Total gross margin was 74%, up 500 basis points from 69% a year ago, and SaaS gross margin was 78%, up 100 basis points year over year. Non-GAAP net income was $3.2 million, or $0.11 per diluted share, versus $765,000, or $0.03 per diluted share, a year ago. For the first 9 months, operating cash flow was $18.7 million with a 27% margin, and the company ended with $80.5 million in cash and no debt. For Q4 FY2026, management expects revenue of $21.5 million to $22 million, non-GAAP net income of $600,000 to $1.3 million, and adjusted EBITDA of $500,000 to $1 million, or 2% to 5%. For full-year FY2026, revenue is expected to be $90.5 million to $91 million, GAAP net income $7 million to $7.8 million, non-GAAP net income $11.3 million to $12.1 million, and adjusted EBITDA margin 13%.

Ashu Roy said the quarter showed strong momentum in AI Knowledge, driven by customer expansion, partner engagement, and new products. He emphasized that trusted knowledge is becoming the foundation for enterprise AI, especially in regulated industries and complex customer service environments. His tone was optimistic and confident, with repeated references to the market moving from early adopters toward early majority and to eGain’s platform expanding from CX into broader enterprise use cases.

Eric Smit focused on the financial improvement: revenue growth, gross margin expansion, operating discipline, and cash generation. He cited Q3 gross margin of 74%, SaaS gross margin of 78%, non-GAAP operating costs of $13.9 million, and non-GAAP net income of $3.2 million, while noting $18.7 million of operating cash flow year to date and $80.5 million in cash with no debt. He also highlighted that the company used $1.8 million of cash in Q3 due to seasonal collection timing, and said Q4 spending should rise as eGain invests in go-to-market and customer events, while the company remains open to buybacks and opportunistic acquisitions.

Analysts pressed on the surge in RFP activity, why it is happening, and whether it could translate into faster growth in FY2027. Management said RFP volume in the last 60 days was about double the normal pace, attributed both to market awareness that AI initiatives need better knowledge foundations and to eGain’s own outreach; they also said decisions on these RFPs typically take 2 to 4 months. On the competitive side, management said Salesforce’s push deeper into contact centers has not changed conversations materially, and that Salesforce’s open ecosystem still leaves room for eGain as a best-in-class knowledge layer. They also said Cisco remains an active, healthy relationship with more opportunity to expand, and on cash they signaled a cautious but flexible stance: invest in the core business, consider buybacks, and stay open to M&A if attractive.