eGain Corporation reported its fiscal 2026 second‑quarter results, showing a 27% year‑over‑year increase in AI Knowledge Hub annual recurring revenue (ARR). The growth lifted the AI Knowledge Hub’s share of total SaaS ARR to 64%, up from 55% at the end of fiscal 2025, underscoring the company’s shift toward its AI‑driven platform.
Total revenue reached $23.0 million, a 3% year‑over‑year rise from $22.0 million in the same quarter last year and a $1.13 million beat on the consensus estimate of $21.87 million. The increase was driven by a 5% year‑over‑year rise in SaaS revenue, which now accounts for 95% of total revenue, reflecting the company’s successful transition to a subscription‑based model.
Gross margin expanded to 74% from 71% a year earlier, a 300‑basis‑point lift that reflects higher pricing power and a more favorable product mix. SaaS gross margin rose to 80% from 78%, further highlighting the profitability of the AI Knowledge Hub and other high‑margin SaaS offerings.
Adjusted EBITDA margin climbed to 14% from 7% YoY, a 700‑basis‑point improvement driven by disciplined cost management and the higher margin mix of the AI Knowledge Hub. Non‑GAAP earnings per share were $0.11, beating the $0.07 estimate by $0.04 or 57%, a result attributed to strong demand and efficient execution across the business.
The company announced a significant new customer win with Achmea, a European insurance and financial services group, which will support 21,000 users across contact center and enterprise teams. This deal illustrates the growing adoption of eGain’s AI platform in large, complex organizations.
eGain is winding down legacy messaging products, which will reduce ARR by approximately $600,000 per quarter. The company’s guidance for full‑year revenue remains unchanged at $90.5 million to $92 million, indicating confidence in continued growth of its AI‑centric business.
Management highlighted that 25% of new logos in the first half of fiscal 2026 were sourced through partners, more than doubling partner‑sourced new logos year‑over‑year. The company also noted a 116% net retention rate for AI Knowledge Hub customers, underscoring strong customer loyalty and upsell opportunities.
"Both revenue and profitability exceeded our guidance and street consensus, and we delivered strong operating cash flow," said CEO Ashu Roy. CFO Eric Smit added, "Total gross margin for the quarter was 74%, up 300 basis points from 71% a year ago, and SaaS gross margin was 80%, up 200 basis points from 78% a year ago."
The results demonstrate that eGain’s strategic pivot to AI and SaaS is translating into higher revenue, improved margins, and stronger customer retention, positioning the company for continued growth in the competitive customer engagement market.
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