eGain Q4 Earnings Call Highlights

eGain NASDAQ: EGAN reported fiscal 2026 revenue growth of 3% to $91.1 million as revenue from customers using its artificial intelligence offerings increased 20%. The company said it is shifting its reporting focus toward “AI customers,” defined as customers actively using one or more AI offerings, while its legacy non-AI business continues to decline. Chief Executive Officer Ashu Roy said Gartner’s July publication of its first Magic Quadrant for Customer Service Knowledge Management Systems represented a significant market development. Gartner named eGain a leader and positioned it highest for ability to execute and furthest for completeness of vision, according to Roy. Roy said enterprises increasingly view knowledge management as essential infrastructure for AI deployments because AI tools rely on current policies, procedures and operational know-how. “Wrong knowledge equals wrong AI,” Roy said, describing the company’s approach as “AI Knowledge Ops,” or the ongoing engineering, governance and operation of knowledge used to instruct AI systems. AI Customer Mix Expands eGain said AI customer annual recurring revenue, or ARR, rose 13% year over year and represented 72% of total SaaS ARR at the end of fiscal 2026, compared with 63% at the midpoint of the fiscal year. Total SaaS ARR declined 1%, which Chief Financial Officer Eric Smit attributed to declines among legacy non-AI customers. The company has changed its metrics to report AI customer revenue and ARR at the customer level rather than by product hub. Under the new definition, AI customer ARR includes all SaaS ARR from customers using at least one AI offering, while AI customer revenue includes their SaaS and professional-services revenue. Smit said eGain believes customer-wide adoption of its AI capabilities is a stronger indicator of retention and expansion potential than the initial product a customer purchased. Trailing-12-month dollar-based net retention for AI customers was 104%, compared with 120% a year earlier. The prior-year figure benefited from a significant expansion deal with JPMorgan Chase completed in the fourth quarter of fiscal 2025, Smit said. Net retention across all customers was 93%, down from 105%. Roy said new-logo wins increased 27% during fiscal 2026, while the number of pipeline opportunities valued at $500,000 in ARR or more doubled year over year. Pipeline opportunities in compliance-heavy sectors including banking, financial services, insurance and healthcare rose 40%. Fourth-Quarter and Full-Year Results Fourth-quarter revenue totaled $22.2 million, down from $23.2 million a year earlier but above the company’s guidance and Wall Street consensus, according to Smit. The year-over-year decline reflected lower revenue from legacy conversation and analytics customers. AI customer revenue increased 11% in the quart.