eGain Corporation (EGAN)

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eGain Communications (EGAN)

Q4 2008 Earnings Call

September 15, 2008 5:00 pm ET


Eric Smit – CFO

Ashu Roy – Chairman & CEO



Good day ladies and gentlemen and welcome to the eGain Communications press release conference call. (Operator Instructions) I would now like to introduce your host for today’s conference, Mr. Eric Smit, Chief Financial Officer for eGain Communications; sir you may begin.

Eric Smit

Good afternoon ladies and gentlemen and thank you for joining us for eGain’s conference call. Today eGain will discuss the results for the fourth quarter and fiscal year ended June 30, 2008.

Please note this call is being recorded and will be available for replay from the Investor Relations section of our website at for seven days following this call.

I will start by reading a Safe Harbor Statement.

All statements on this call that involve eGain's plans, forecasts, including the guidance provided on this call, beliefs, projections, expectations, strategies and intentions are forward-looking statements within the meaning of the Safe Harbor Provisions of the Private Securities Litigation Reform Act of 1995.

These forward-looking statements, which are based on information available to eGain at the time of this call, are not guarantees of future results; rather, they are subject to risks and uncertainties that may cause actual results to differ materially from those set forth on this call.

These risks include, but are not limited to, the uncertainty of demand for eGain products including our guidance regarding bookings and revenue; the actual mix in new business between hosting and license transactions when compared with management's projections; the increased complexity of certain transactions and the timing of revenue recognition on such transactions; and other risks detailed from time to time in the company's filings with the Securities and Exchange Commission, including the company's Annual Report on Form 10-K filed on September 28, 2007, and the company's Quarterly Reports on Form 10-Q. eGain assumes no obligations to update these forward-looking statements.

The company also believes that it is useful to disclose new hosting and license bookings details on this call in addition to the information contained in the GAAP presentation of financial information. We internally use this metric to focus management on the productivity of the sales teams and period-to-period changes in the company’s core business.

Therefore we believe that this information is meaningful and helpful in allowing individuals to better assess the ongoing nature of our core operations. The presentation of this additional non-GAAP financial information is not intended to be considered in isolation or as a substitute for the financial information prepared and presented in accordance with GAAP.

With me today is Ashu Roy, Chairman and Chief Executive Officer of eGain Communications. To begin management’s discussion, I would now like to turn the call over Ashu Roy.

Ashu Roy

Thank you Eric, good afternoon everyone. Overall we are pleased with our growth in fiscal 2008. Our total revenue was up 34% from the prior year, license revenue was up 93% from the prior year, professional services revenue was up 40% from the prior year, and hosting revenue was up 34% from the prior year.

That was good, on the other hand new licensed and hosted bookings in the fourth quarter suffered due to several large deals slipping. Given our focus on the enterprise market, fluctuation in quarterly bookings because of the timing of a few large deals is natural, as long as the deals do materialize. So we are happy to report that most of the large deals that slipped in the fourth quarter have now closed.

Turning to the significant milestones and industry recognition during fiscal 2008, eGain marked its 10th anniversary of delivering on-demand customer service software for the enterprise. eGain is the only company in the market to have offered both on-demand and on-premise deployment of customer service software to enterprises for over a decade.

The company conducted a unique state of customer service study that included a holistic measurement of single channel and cross channel customer service offered by leading North American companies. The study strongly validated the need for a robust customer service solution such as eGain's.

The company introduced powerful multilingual capabilities to the eGain Service suite including user interface and content support for Dutch, German, French, Italian, and Spanish languages.

eGain Service was ranked the #1 customer service software in the annual survey of the top 500 US-based web retailers conducted by Internet Retailer magazine in 2007.

eGain Service was selected as a Product of the Year for 2007 by Customer Interaction magazine.

eGain was named to the Software 500 list for the fifth year in a row. The Software 500 is the Software magazine list of the world's premier software and services providers.

eGain was included in the 2008 list of 100 Companies that Matter in Knowledge Management by KMWorld magazine.

And finally the company was named as the One to Watch for 2008 by CRM magazine in the web interaction management category in recognition of its comprehensive, innovative, and unified solution for multichannel interaction management.

Building and developing partnerships to expand our market reach has been a focus for over the past fiscal year and we are making steady progress in this regard. Specifically eGain delivered the second phase of its multi-phase OEM product delivery agreement with Cisco in December 2007.

Early customer response to Cisco's multichannel offering based on eGain technology is encouraging. Based on strong customer feedback and demand for specific industry-leading capabilities, Cisco and eGain have expanded the scope of the integrated product capabilities, resulting in a delay in the third and final deliverable that is now targeted for the second half of fiscal year 2009, as opposed to the earlier target of the end of fiscal year 2008.

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