EGAIN Corp (EGAN)

CIK: 0001066194. SIC: 7372 Services-Prepackaged Software. Latest 10-K as of: 2025-09-12.

SIC breadcrumb: Services > Business Services > SIC 7372 Services-Prepackaged Software

SEC company page: https://www.sec.gov/edgar/browse/?CIK=1066194. Latest filing source: 0001104659-25-089540.

Selected Fundamentals

Financials

Annual standardized facts from SEC companyfacts as of latest extracted filing date 2025-09-12. Source: https://data.sec.gov/api/xbrl/companyfacts/CIK0001066194.json. Derived margins, ratios, and free cash flow are computed from the extracted annual SEC facts.

Flow metrics use full-year FY periods from 10-K/10-K/A filings; balance-sheet metrics use FY-end instants. Free cash flow = operating cash flow - capital expenditures. Missing metrics are omitted rather than fabricated.

Ratios

ROE and ROA use period-end equity/assets. Liabilities / equity uses total liabilities divided by stockholders' equity. Current ratio uses current assets divided by current liabilities when both are reported.

Financial Charts

Quarterly

Quarterly standardized facts from SEC companyfacts as of latest extracted filing date 2026-05-14. Source: https://data.sec.gov/api/xbrl/companyfacts/CIK0001066194.json.

Flow metrics use discrete quarter-length periods from 10-Q/10-Q/A filings. Q4 revenue and net income are derived only when annual FY and nine-month YTD facts exist for the same fiscal year; derived Q4 values are labeled. EPS Q4 is not derived.

Quarterly Charts

Macro Cross-References

• CPIAUCSL - Consumer Price Index for All Urban Consumers: All Items in U.S. City Average
• UNRATE - Unemployment Rate
• FEDFUNDS - Federal Funds Effective Rate
• CES0500000003 - Average Hourly Earnings of All Employees, Total Private
• DFEDTARU - Federal Funds Target Range - Upper Limit
• DFEDTARL - Federal Funds Target Range - Lower Limit
• DGS3MO - Market Yield on U.S. Treasury Securities at 3-Month Constant Maturity
• DGS2 - Market Yield on U.S. Treasury Securities at 2-Year Constant Maturity
• DGS10 - Market Yield on U.S. Treasury Securities at 10-Year Constant Maturity
• DGS30 - Market Yield on U.S. Treasury Securities at 30-Year Constant Maturity
• T10Y2Y - 10-Year Treasury Constant Maturity Minus 2-Year Treasury Constant Maturity
• CPILFESL - Consumer Price Index for All Urban Consumers: All Items Less Food and Energy
• CPIUFDSL - Consumer Price Index for All Urban Consumers: Food
• CPIENGSL - Consumer Price Index for All Urban Consumers: Energy
• CUSR0000SAH1 - Consumer Price Index for All Urban Consumers: Shelter
• PCEPI - Personal Consumption Expenditures: Chain-type Price Index
• PCEPILFE - Personal Consumption Expenditures Excluding Food and Energy: Chain-type Price Index
• PPIACO - Producer Price Index by Commodity: All Commodities
• T10YIE - 10-Year Breakeven Inflation Rate
• U6RATE - Total Unemployed, Plus All Marginally Attached Workers Plus Total Employed Part Time for Economic Reasons
• PAYEMS - All Employees, Total Nonfarm
• CIVPART - Labor Force Participation Rate
• EMRATIO - Employment-Population Ratio
• UNEMPLOY - Unemployed
• CE16OV - Employment Level
• ICSA - Initial Claims
• JTSJOL - Job Openings: Total Nonfarm
• JTSQUR - Quits: Total Nonfarm
• GDPC1 - Real Gross Domestic Product
• A191RL1Q225SBEA - Real Gross Domestic Product: Percent Change from Preceding Period
• INDPRO - Industrial Production: Total Index
• TCU - Capacity Utilization: Total Index
• HOUST - New Privately-Owned Housing Units Started: Total Units
• PERMIT - New Privately-Owned Housing Units Authorized in Permit-Issuing Places: Total Units
• RSAFS - Advance Retail Sales: Retail Trade
• PCE - Personal Consumption Expenditures
• DSPIC96 - Real Disposable Personal Income
• PSAVERT - Personal Saving Rate
• M2SL - M2
• BOPGSTB - U.S. International Trade in Goods and Services: Balance
• MSPUS - Median Sales Price of Houses Sold for the United States
• HSN1F - New One Family Houses Sold: United States
• RHORUSQ156N - Homeownership Rate in the United States
• TTLCONS - Total Construction Spending: Total Construction in the United States
• RRVRUSQ156N - Rental Vacancy Rate in the United States
• TOTALSL - Total Consumer Credit Owned and Securitized
• REVOLSL - Revolving Consumer Credit Owned and Securitized
• DRCCLACBS - Delinquency Rate on Credit Card Loans, All Commercial Banks
• GDP - Gross Domestic Product
• GPDI - Gross Private Domestic Investment
• GCE - Government Consumption Expenditures and Gross Investment
• PCEC - Personal Consumption Expenditures
• NETEXP - Net Exports of Goods and Services
• GFDEBTN - Federal Debt: Total Public Debt
• GFDEGDQ188S - Federal Debt: Total Public Debt as Percent of Gross Domestic Product
• FYFSD - Federal Surplus or Deficit
• FGRECPT - Federal Government Current Receipts
• FGEXPND - Federal Government: Current Expenditures
• MANEMP - All Employees, Manufacturing
• USCONS - All Employees, Construction
• USTRADE - All Employees, Retail Trade
• USFIRE - All Employees, Financial Activities
• USGOVT - All Employees, Government
• AWHAETP - Average Weekly Hours of All Employees, Total Private
• DGORDER - Manufacturers' New Orders: Durable Goods
• NEWORDER - Manufacturers' New Orders: Nondefense Capital Goods Excluding Aircraft
• BUSINV - Total Business Inventories
• EXPGS - Exports of Goods and Services
• IMPGS - Imports of Goods and Services
• IR - Import Price Index (End Use): All Commodities
• PPIFIS - Producer Price Index by Commodity: Final Demand

Latest quarter (10-Q)

Latest 10-Q source: 0001104659-26-061184.

Extracted structurally from real Item 2 body heading to real Item 3/4 boundary. Confidence: high. Filing date: 2026-05-14. Report date: 2026-03-31.

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

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The following discussion and analysis of our financial condition and results of operations should be read in conjunction with the condensed consolidated financial statements and the related notes included in Item 1 of Part I of this Quarterly Report on Form 10-Q, and with our audited financial statements and the related notes included in our Annual Report on Form 10-K for the year ended June 30, 2025.

This Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements relate to future periods, future events or our future operating or financial plans or performance. Often, these statements include the words “believe,” “expect,” “target,” “anticipate,” “intend,” “plan,” “seek,” “estimate,” “potential,” or words of similar meaning, or future or conditional verbs such as “will,” “would,” “should,” “could,” “might,” or “may,” or the negative of these terms, and other similar expressions. These forward-looking statements that involve risks and uncertainties include statements as to:

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our belief that it is useful to exclude certain non-cash charges and non-core operational charges from non-GAAP operating income;

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our expectation that SaaS revenue will continue to increase;

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expected benefits of our solutions;

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our value proposition;

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our market opportunities;

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customer and market expectations in the market in which we operate, and our ability to meet expectations and satisfy such needs;

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our lengthy sales cycles and the difficulty in predicting timing of sales or delays;

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our expectations with respect to revenue, cost of revenue, expenses and other financial metrics;

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our business plans, strategies, target, goals and outlook;

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changes in technology, including artificial intelligence (AI) technology and services;

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our expectations related to our product development plan;

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competition in the markets in which we do business and our competitive advantages;

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our beliefs regarding our prospects for our business;

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changes in demand for our solutions;

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our expectations regarding the composition of our customers;

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our reliance on strategic and third-party distribution partnerships;

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the risk of unauthorized access to a customer’s data or our data or our IT systems and cybersecurity attacks;

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our ability to timely adapt and comply with changing European regulatory and political environments;

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the effect of recent changes in U.S. tax legislation;

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the effect of compliance with privacy laws and regulations on our business and our customers;

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the effect of recent changes to trade policies;

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our ability to take adequate precautions against claims or lawsuits made by third parties, including alleged infringement of proprietary rights;

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the adequacy of our capital resources and our ability to raise additional financing;

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the risks related to our international operations;

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the potential impact of foreign currency fluctuations and inflation; and

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the potential impact of health epidemics.

These forward-looking statements reflect our current views with respect to future events, are based on assumptions and are subject to risks and uncertainties. These risks and uncertainties could cause actual results to differ materially from those projected and include, but are not limited to:

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our ability to manage our business plans, strategies, targets, and outlooks and any business-related forecasts or projections;

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our ability to improve our current solutions;

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our ability to innovate and respond to rapid technological change and competitive challenges;

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our ability to execute our sales and marketing strategy;

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customer acceptance of our existing and future solutions;

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our ability to predict subscription renewals;

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the impact of new legislation or regulations on our business;

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the impact of accounting pronouncements and our critical accounting policies, judgments, estimates, models and assumptions on our financial results;

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our ability to compete;

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the success of our strategic and distribution partnerships;

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our ability to obtain capital when needed;

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our ability to manage future growth;

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our ability to retain key personnel and hire additional personnel;

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risks related to protection of our intellectual property;

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foreign currency fluctuations and inflation;

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the global economic environment, including trade policies and tariffs;

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risks related to public health pandemics; and

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the risks set forth under “Risk Factors.”

Given these risks and uncertainties, you should not place undue reliance on these forward-looking statements. Except as required by federal securities laws, we undertake no obligation to update any forward-looking statements for any reason, even if new information becomes available or other events occur in the future.

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All references to “eGain”, the “Company”, “our”, “we” or “us” mean eGain Corporation and its subsidiaries, except where it is clear from the context that such terms mean only eGain and exclude its subsidiaries.

eGain and eGain® are trademarks of eGain Corporation. We also refer to trademarks of other corporations and organizations in this report.

Summary Risk Factors

Our business is subject to numerous risks and uncertainties that could affect our ability to successfully implement our business strategy and affect our financial results. You should carefully consider all of the information in this report and, in particular, the following principal risks and all of the other specific factors described in Item 1A. of this report, “Risk Factors,” before deciding whether to invest in our company:

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Our business is influenced by a range of factors that are beyond our control and that we have no comparative advantage in forecasting.

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Our SaaS business model is subject to certain risks.

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Our revenue and operating results have fluctuated in the past and are likely to fluctuate in the future, and because we recognize revenue from subscriptions over a period of time, downturns in revenue may not be immediately reflected in our operating results.

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We cannot accurately predict subscription renewal rates and the impact these rates may have on our future revenue and operating results.

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Our lengthy sales cycles and the difficulty in predicting timing of sales or delays may impair our operating results.

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Because we depend on a relatively small number of customers for a substantial portion of our revenue, the loss of any of these customers or our failure to attract new significant customers could adversely impact our revenue and harm our business.

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The market for customer engagement software, including generative AI product offerings, is competitive, and our business will be adversely affected if we are unable to successfully compete.

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If we fail to expand and improve our sales performance and marketing activities, or retain our sales and marketing personnel, we may be unable to grow our business, which could negatively impact our operating results and financial condition.

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Our failure to maintain, develop or expand strategic and third-party distribution channels would impede our revenue growth.

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Difficulties and delays in customers implementing our products could harm our revenue and margins.

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We conduct a significant portion of our business and operations outside of the U.S., which exposes us to additional risks that may not exist in the U.S. These risks in turn could cause our operating results and financial condition to suffer.

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Unplanned system interruptions, delays in service or inability to increase capacity, including internationally, at our third-party data center facilities or third-party Platform-as-a-Service (PaaS) provider could impair the use or functionality of our cloud operations and harm our business.

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Software errors could be costly and time-consuming for us to correct, and could harm our reputation and impair our ability to sell our solutions.

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The terms we agree to in our Service Level Agreements or other contracts may result in increased costs or liabilities, which would in turn affect our results of operations.

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If we are unable to increase the profitability of SaaS revenue, if we experience significant customer attrition, or if we are required to delay recognition of revenue, our operating results could be adversely affected.

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We depend on broad market acceptance of our applications and of our business model. If our expectations regarding the market for our applications are not met, our business could be seriously harmed.

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We may be unable to respond to the rapid technological change and changing customer preferences in digital customer engagement, marketing, and service and this may cause our business to suffer.

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We employ third-party technologies for use in or with our platform and the inability to license such technologies on commercially reasonable terms or the inability to maintain these licenses or errors in the software we license could result in increased costs, or reduced service levels, which could adversely affect our business.

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Our offshore product development, support and professional services may prove difficult to manage or may not allow us to realize our cost reduction goals, produce effective new solutions and provide professional services to drive growth.

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If our cybersecurity systems or the systems of our vendors, partners and suppliers are breached and unauthorized access is obtained to a customer’s data, our data or IT systems, our service may be perceived as not being secure, customers may curtail or stop using our service and we may incur significant legal and financial exposure and liabilities.

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Changes in privacy and data protection laws and regulations, including in the European Union (such as the GDPR), the United Kingdom, and other jurisdictions in which we operate, could expose us to risks of noncompliance and costs associated with compliance.

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Privacy concerns and laws, evolving regulation of cloud computing, AI and other domestic or foreign regulations may limit the use, functionality and adoption of our solutions and adversely affect our business.

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Changes in domestic and foreign trade policies, including the imposition of tariffs and retaliatory tariffs, and other factors beyond our control may adversely impact our business, financial condition, and results of operations.

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Geopolitical instability, including the risk of military conflict involving Iran and broader escalation in the Middle East, could adversely affect our business, financial condition, and results of operations.

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Overview

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eGain powers AI-driven knowledge management for the enterprise. We sell our SaaS platform to enterprises that want to deliver trusted, consumable answers to customers, employees, and AI agents — aiming to reduce cost and improve outcomes across every knowledge-intensive workflow. Our platform centralizes enterprise knowledge and puts it to work across customer service, employee support, and AI-powered automation. We are headquartered in Sunnyvale, California, USA. We also operate in the United Kingdom and India.

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Key Financial Measures

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We monitor the key financial performance measures set forth below as well as cash and cash equivalents and available debt capacity, which are discussed in “Liquidity and Capital Resources,” to help us evaluate trends, establish budgets, measure the effectiveness of our sales and marketing efforts and assess operational effectiveness and efficiencies.

Revenue

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We believe total revenue is a useful measure to value our business. SaaS revenue is defined as revenue from cloud delivery arrangements, term licenses, embedded OEM royalties and associate

[Excerpt truncated for page length; source filing is linked above.]

Latest 10-K MD&A

Extracted structurally from real Item 7 body heading to real Item 7A/8 boundary. Confidence: high. Filing date: 2025-09-12. Report date: 2025-06-30.

ITEM 7.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion of eGain’s financial condition and results of operations should be read together with the consolidated financial statements and related notes in this Annual Report on Form 10-K. This discussion may contain forward-looking statements based upon current expectations that involve risks and uncertainties. These risks and uncertainties may cause actual results to differ materially from those discussed in the forward-looking statements.

Overview

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eGain automates customer experience with an AI knowledge hub solution. We sell our SaaS solution to enterprises who want to improve customer experience while reducing cost, by using AI to synthesize and deliver trusted, consumable answers from a knowledge hub. We are headquartered in Sunnyvale, California, USA. We also operate in the United Kingdom and India.

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Key Financial Measures

We monitor the key financial performance measures set forth below as well as cash and cash equivalents and available debt capacity, which are discussed in Liquidity and Capital Resources, to help us evaluate trends, establish budgets, measure the effectiveness of our sales and marketing efforts and assess operational effectiveness and efficiencies.

Revenue

We believe total revenue is a useful measure to value our business. SaaS revenue is defined as revenue from cloud delivery arrangements, term licenses, embedded OEM royalties and associated support. Professional services revenue includes system implementation, consulting, training, and managed services.

The following table presents total revenue for each of the following periods:

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Fiscal Year Ended June 30

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​

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2025

2024

Change

Revenue

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(in thousands, except percentages)

SaaS revenue

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$

81,921

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$

85,082

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$

(3,161)

(4)

%  

Professional services

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6,510

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7,721

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(1,211)

(16)

%  

Total revenue

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$

88,431

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$

92,803

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$

(4,372)

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​

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Non-GAAP Operating Income

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Non-GAAP operating income is defined as income from operations, adjusted for the impact of stock-based compensation expense.

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Management believes that it is useful to exclude certain non-cash charges and non-core operational charges from non-GAAP operating income because (i) the amount of such expenses in any specific period may not directly correlate to the underlying performance of our business operations; and (ii) such expenses can vary significantly between periods as a result of the timing of new stock-based awards. The presentation of the non-GAAP financial measures is not intended to be considered in isolation, or as a substitute for, or superior to, the financial information prepared and presented in accordance with generally accepted accounting principles in the United States of America (GAAP).

The following table presents a reconciliation of GAAP income from operations to non-GAAP income from operations for each of the following periods:

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Fiscal Year Ended June 30

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2025

2024

Income from operations

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$

4,433

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$

5,971

Add:

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​

​

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Stock-based compensation

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​

2,449

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​

4,529

Non-GAAP income from operations

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$

6,882

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$

10,500

Critical Accounting Policies and Estimates

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Management’s Discussion and Analysis of Financial Condition and Results of Operations discusses our consolidated financial statements, which have been prepared in accordance with GAAP in the United States. The preparation of these financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period.

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We believe that the assumptions and estimates associated with revenue recognition, stock-based compensation, provision for credit losses, the valuation of goodwill, the valuation of deferred tax allowance, and legal contingencies have the greatest potential impact on our consolidated financial statements. We evaluate these estimates on an ongoing basis. Management bases its estimates and judgments on historical experience and on various other factors that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.

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Sources of Revenues

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Our revenue is comprised of two categories including SaaS and professional services. SaaS revenue includes cloud delivery arrangements, term licenses, embedded OEM royalties, and associated support. An immaterial amount of SaaS revenue is comprised of our legacy revenue which is associated with license, maintenance, and support contracts on perpetual license arrangements that we no longer sell. Professional services include consulting, implementation, training, and managed services.

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SaaS Revenue

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For our cloud delivery arrangements, our maintenance and support arrangements and our term license subscriptions that incorporate substantial cloud functionality, the combined performance obligation is recognized ratably over the contract term as the obligation is delivered. For contracts involving distinct software licenses, the license performance obligation is satisfied at a point in time when control is transferred to the customer.

We typically invoice our customers in advance upon execution of the contract or subsequent renewals. Invoiced amounts are recorded in accounts receivable, deferred revenue or revenue, depending on when control is transferred to our customers based on each arrangement.

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We have a royalty revenue agreement with a customer related to our embedded intellectual property. Under the terms of the agreement, the customer is to provide a combined fixed fee, per agent, for each software license sold containing the

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embedded software to us. These embedded OEM royalties are included as SaaS revenue. Under revenue guidance, since these arrangements are for sales-based licenses of intellectual property, we recognize revenue only as the subsequent sale occurs. However, since such sales are reported by the customer with a quarter in arrears, such revenue is recognized at the time it is reported and paid by the customer. Any estimated variable consideration would have to be fully constrained due to the unpredictability of such estimates and the risk of significant revenue reversals.

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Professional Services Revenue

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Professional services revenue includes system implementation, consulting, training, and managed services. The transaction price is allocated to various performance obligations based on their SSP. Revenue allocated to each performance obligation is recognized as work is performed. Managed services include a comprehensive set of processes and activities that range from implementation to monitoring the evolution and support of our solutions in a company. Our consulting and implementation service contracts are bid either on a time-and-material basis or on a fixed-fee basis. Managed services contracts are bid on a time-and-material basis. Fixed fees are generally paid on milestone billing at pre-determined points in the contract. Amounts that have been invoiced are recorded in accounts receivable and in deferred revenue or revenue, depending on whether transfer of control to customers has occurred.

Training revenue that meets the criteria to be accounted for separately is recognized when training is provided.

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Remaining Performance Obligations

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Remaining performance obligations represent contracted revenue that have not yet been recognized, and include billed deferred revenue, consisting of amounts invoiced to customers whether collected or uncollected which have not been recognized as revenue, as well as unbilled amounts that will be invoiced and recognized as revenue in future periods.  The transaction price allocated to the remaining performance obligation is influenced by a variety of factors, including seasonality, timing of renewals, average contract terms and foreign currency exchange rates. As of June 30, 2025, our remaining performance obligations were $91.6 million, of which we expect to recognize $63.0 million and $28.6 million as revenue within one year and beyond one year, respectively.

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We expect our remaining performance obligations to change quarterly for several reasons including the timing of new contracts and renewals, duration and size of our subscription and support arrangements, variable billing cycles and foreign exchange rate fluctuation. We typically issue renewal invoices in advance of the renewal service period. Depending on timing, the initial invoice and subsequent renewal invoices may occur in different quarters. This may result in an increase or decrease to our accounts receivable and deferred revenue.

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Costs Capitalized to Obtain Revenue Contracts

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Under Topic 606, we capitalize incremental costs to obtain non-cancelable subscription and maintenance and support revenue contracts with amortization periods that may extend longer than the non-cancelable subscription and maintenance and support revenue contract terms.

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We capitalize incremental costs of obtaining a non-cancelable subscription and maintenance and support revenue contract with amortization periods of one year or more. The capitalized amounts consist primarily of sales commissions paid to our direct sales force. Capitalized amounts also include (i) amounts paid to employees other than the direct sales force who earn incentive payouts under annual compensation plans that are tied to the value of contracts acquired and (ii) the associated payroll taxes and fringe benefit costs associated with the payments to our employees.

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Costs capitalized related to new revenue contracts are generally deferred and amortized on a straight-line basis over a period of benefit that we estimate to be five years. We determine the period of benefit by taking into consideration the period from initial contract through renewal, which constitutes the length of our customer relationship or customer life. Amortization of costs capitalized related to new revenue contracts is included as a component of sales and marketing expense in our operating results.

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Stock-Based Compensation

We account for stock-based compensation in accordance with Accounting Standards Codification (ASC) 718, Compensation — Stock Compensation. Under the fair value recognition provisions of ASC 718, stock-based compensation cost is measured at the grant date based on the fair value of the award and is recognized as an expense over the vesting period. Determining the fair value of the stock-based awards at the grant date requires significant judgment and the use of estimates, particularly surrounding Black-Scholes valuation assumptions such as stock price volatility and expected option lives. We determine the appropriate measure of expected volatility by reviewing historic volatility in the share price of our common stock, as adjusted for certain events that management deems to be non-recurring and non-indicative of future events. We base our estimate of expected life on the historical exercise behavior, cancellations of all past option grants made by us during the time period in which our common stock has been publicly traded, the contractual term, the vesting period and the expected remaining term of the option. Based on our historical experience of option pre-vesting cancellations, we have assumed an annualized forfeiture rate for our stock options. We record additional expense if the actual forfeiture rate is lower than we estimated and record a recovery of prior expense if the actual forfeiture rate is higher than what we estimated.

Goodwill

We review goodwill annually for impairment or sooner whenever events or changes in circumstances indicate that it may be impaired. These events or circumstances could include a significant change in the business climate, legal factors, operating performance indicators, competition, or sale or disposition of a significant portion of a reporting unit. We operate under a single reporting unit and accordingly, all of our goodwill is associated with the entire company. We had no impairment for fiscal years ended June 30, 2025 and 2024.

Accounts Receivable and Provision for Credit Losses

We extend unsecured credit to customers on a regular basis. Our accounts receivable is derived from revenue earned from customers and are not interest bearing. We also maintain provision for credit losses to reserve for potential uncollectible trade receivables. We review our trade receivables by aging category to identify specific customers with known disputes or collectability issues. We exercise judgment when determining the adequacy of these reserves as we evaluate historical bad debt trends, general economic conditions in the U.S. and internationally, and changes in customer financial conditions. If we make different judgments or utilize different estimates, then material differences may result in additional reserves for trade receivables, which would be reflected by charges in general and administrative expenses for any period presented. We write-off receivables after all collection efforts have been exhausted and the amounts are deemed uncollectible.

As described in Note 1 of Notes to Consolidated Financial Statements included in Item 8 Financial Statements and Supplementary Data of this Annual Report, certain Company contracts have contractual billings which do not coincide with revenue recognized on the contract. Unbilled accounts receivables are recorded when revenue recognized on the contract exceeds billings, pursuant to contract provisions, and become billable at contractually specified dates.

Tax Legislation

On August 16, 2022, the Inflation Reduction Act of 2022 (IRA) was signed into law and is effective for taxable years beginning after December 31, 2022. The IRA includes multiple incentives to promote clean energy with tax provisions primarily focused on implementing a 15% minimum tax on global adjusted financial statement income and a 1% excise tax on share repurchases. These measures may affect our consolidated financial statements and we will continue to evaluate the applicability and effect of the IRA as more guidance is issued. In 2024, California enacted legislation, with the first being S.B.167, which suspends the use of NOLs by businesses and individuals for tax years 2024 through 2026, limits the use of tax credits by businesses and individuals to $5 million for tax years 2024 through 2026, and clarifies that income not included in apportionable business income is excluded from the sales factor of the apportionment formula. The second, S.B.175, provides some relief from the $5 million credit limitation in S.B. 167 by allowing taxpayers subject to the limit to elect to later receive a refund of credits they would have otherwise used to reduce tax liabilities during the limitation period.

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On July 4, 2025, the One Big Beautiful Bill Act (OBBBA) was enacted in the U.S. The OBBBA includes significant provisions, such as the permanent extension of certain expiring provisions of the Tax Cuts and Jobs Act, modifications to the international tax framework and the restoration of favorable tax treatment for certain business provisions. This new legislation has multiple effective dates, with certain provisions becoming effective in 2025 and others implemented through 2027. We are currently assessing the impact of OBBBA on our consolidated financial statements.

Fiscal Year 2025 Compared with Fiscal Year 2024

Our effective tax rate for both fiscal years 2025 and 2024 was a tax benefit of $26.6 million and a tax provision of $1.9 million, respectively. The change in our effective tax rate for fiscal year 2025 as compared to fiscal year 2024 was primarily due to the decrease in valuation allowance, foreign rate differential, Section 267, stock-based compensation and the research and development tax credits.

The income before income tax benefit (provision) between the U.S. and foreign countries impacted our effective tax rate as a result of the geographic distribution and customer demand related to our products and services. In fiscal year 2025, our U.S. and foreign income before our income tax benefit was an income of $3.6 million and $2.0 million, respectively. In fiscal year 2024, our U.S. and foreign income before our income tax was an income of $6.2 million and $3.5 million, respectively.

Deferred Tax Valuation Allowance

When we prepare our consolidated financial statements, we estimate our income tax liability for each of the various jurisdictions where we conduct business. This requires us to estimate our actual current tax exposure and to assess temporary differences that result from differing treatment of certain items for tax and accounting purposes. The net deferred tax assets are reduced by a valuation allowance if, based upon weighted available evidence, it is more likely than not that some or all of the deferred tax assets will not be realized. We make significant judgments to determine our provision for income taxes, our deferred tax assets and liabilities and any valuation allowance to be recorded against our net deferred tax assets. In the year ended June 30, 2025, we concluded that the valuation allowance related to the U.S. federal and state (excluding certain California tax attributes) deferred tax assets was no longer required due to the assessment of our recent income/loss and forecast future taxable income. As of June 30, 2025, we had a valuation allowance of approximately $5.5 million attributable to California net operating losses and research and development credit carryforwards.

We apply ASC 740, Income Taxes, in determining any uncertain tax positions. The guidance seeks to reduce the diversity in practice associated with certain aspects of measurement and recognition in accounting for income taxes and prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position that an entity takes or expects to take in a tax return. Additionally, ASC 740 provides guidance on de-recognition, classification, interest and penalties, accounting in interim periods, disclosure and transition. Under ASC 740, an entity may only recognize or continue to recognize tax positions that meet a “more likely than not” threshold. In accordance with our accounting policy, we recognize accrued interest and penalties related to unrecognized tax benefits as a component of other (expense) income, net in the consolidated statements of operations.

We consider the earnings of certain non-U.S. subsidiaries to be indefinitely invested outside the United States, on the basis of estimates, that future domestic cash generation will be sufficient to meet future domestic cash needs and our specific plans for reinvestments of those subsidiary earnings. We have not recorded a deferred tax liability related to state income taxes and foreign withholding taxes of approximately $28.2 million of undistributed earnings of foreign subsidiaries indefinitely invested outside the United States. If we decide to repatriate the foreign earnings, we would need to adjust our income tax provision in the period we determined that the earnings will no longer be indefinitely invested outside the United States.

Fair Value of Financial Instruments

Our financial instruments consist of cash and cash equivalents, restricted cash, accounts receivable, accounts payable and accrued liabilities. We do not have any derivative financial instruments. We believe the reported carrying amounts of these financial instruments approximate fair value, based upon their short-term nature and comparable market information available at the respective balance sheet dates.

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Table of Contents

Results of Operations

​

The following table sets forth certain items reflected in our consolidated statements of operations expressed as a percent of total revenue for the periods indicated:

​

​

​

​

​

​

​

​

​

2025

2024

Revenue:

​

​

​

​

​

SaaS

93

%  

​

92

%  

Professional services

7

​

​

8

​

Total revenue

100

​

​

100

​

Cost of revenue:

​

​

​

​

​

​

Cost of SaaS

20

​

​

21

​

Cost of professional services

10

​

​

9

​

Total cost of revenue

30

​

​

30

​

Gross profit

70

​

​

70

​

Operating Expenses:

​

​

​

​

​

Research and development

33

​

​

29

​

Sales and marketing

22

​

​

24

​

General and administrative

10

​

​

11

​

Total operating expenses

65

​

​

64

​

Income from operations

5

%

​

6

%

​

Revenue

​

We classify our revenue into two categories; SaaS and professional services revenue.

​

The following table presents our SaaS and professional services revenue during the fiscal years indicated:

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Fiscal Year Ended June 30,

​

​

​

​

​

​

​

2025

​

2024

​

​

Change

Revenue

​

(in thousands, except percentages)

SaaS

​

$

81,921

​

​

$

85,082

​

​

$

(3,161)

(4)

%  

Professional services

​

6,510

​

​

7,721

​

​

​

(1,211)

(16)

%  

Total revenue

​

$

88,431

​

​

$

92,803

​

​

$

(4,372)

​

​

​

Total Revenue

Total revenue decreased $4.4 million during the fiscal year ended June 30, 2025, from the same period in fiscal year 2024, largely due to decreased SaaS revenue of $3.2 million and decreased professional services revenue of $1.2 million in fiscal year 2025.

​

Our revenue was impacted by foreign exchange rate fluctuation between the U.S. Dollar, Euro, and British Pound. We recalculate our current period results using the comparable prior period exchange rates to exclude the impact of foreign exchange rate fluctuation. Foreign exchange rate fluctuation resulted in an increase of $546,000 and $1.0 million in total revenue during the fiscal years ended June 30, 2025 and 2024, respectively.

​

40

Table of Contents

SaaS Revenue

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Fiscal Year Ended June 30,

​

​

​

​

​

​

2025

​

2024

​

Change

Revenue

​

(in thousands, except percentages)

SaaS revenue

​

$

81,921

​

$

85,082

​

$

(3,161)

(4)

%  

Percentage of total revenue

​

93

%  

92

%  

​

​

​

​

​

SaaS revenue includes revenue from cloud delivery arrangements, term licenses and embedded OEM royalties and associated support. Revenues from SaaS decreased by $3.2 million during the fiscal year ended June 30, 2025, from the same period in fiscal year 2024.

​

SaaS revenue was $81.9 million and $85.1 million during the fiscal years ended June 30, 2025 and 2024, respectively, which represented a decrease of 4% or $3.2 million. SaaS revenue represents 93% and 92% of total revenue for the fiscal years ended June 30, 2025 and 2024, respectively.

​

Excluding an increase of $510,000 due to foreign exchange rate fluctuation, SaaS revenue decreased by $3.7 million during the fiscal year ended June 30, 2025, from the same period in fiscal year 2024.

​

Professional Services Revenue

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Fiscal Year Ended June 30,

​

​

​

​

​

​

​

2025

2024

Change

Revenue

​

(in thousands, except percentages)

Professional services revenue

​

$

6,510

​

$

7,721

​

$

(1,211)

(16)

%  

Percentage of total revenue

​

7

%  

8

%  

​

​

​

​

Professional services revenue includes consulting, implementation, training, and managed services. Revenues from professional services decreased by $1.2 million during the fiscal year ended June 30, 2025, from the same period in fiscal year 2024.

​

Professional services revenue was $6.5 million and $7.7 million during the fiscal years ended June 30, 2025 and 2024, respectively, which represented a decrease of 16% or $1.2 million. Professional services revenue represents 7% and 8% of total revenue for the fiscal years ended June 30, 2025 and 2024, respectively.

​

Excluding an increase of $36,000 due to foreign exchange rate fluctuation, professional services revenues decreased by $1.2 million during the fiscal year ended June 30, 2025, from the same period in fiscal year 2024.

​

Revenue by Geography

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Fiscal Year Ended June 30,

​

​

​

​

​

​

2025

2024

​

Change

Revenue

​

(in thousands, except percentages)

North America

​

$

68,778

​

$

72,611

​

$

(3,833)

(5)

%  

Europe, Middle East, & Africa

​

19,653

​

20,192

​

​

(539)

(3)

%  

Total revenue

​

$

88,431

​

$

92,803

​

$

(4,372)

​

​

​

Revenue from North America sales decreased by 5% from $72.6 million during the fiscal year ended June 30, 2024 to $68.8 million during the fiscal year ended June 30, 2025 due to decreases of (i) $2.6 million in SaaS revenue and (ii) $1.2 million in professional service revenue.

​

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Table of Contents

Revenue from EMEA sales decreased by 3% from $20.2 million during the fiscal year ended June 30, 2024 to $19.7 million during the fiscal year ended June 30, 2025 due to a decrease of $570,000 in SaaS revenue; partially offset by an increase of $32,000 in professional services revenue.

​

Cost of Revenue

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Fiscal Year Ended June 30,

​

​

​

​

​

​

​

2025

2024

Change

Cost of revenue

​

(in thousands, except percentages)

SaaS

​

$

17,975

​

$

19,514

​

$

(1,539)

(8)

%  

Professional services

​

8,448

​

8,078

​

​

370

5

%  

Total cost of revenue

​

$

26,423

​

$

27,592

​

$

(1,169)

​

​

Percentage of total revenue

​

30

%  

30

%  

​

​

​

Gross margin

​

70

%  

70

%  

​

​

​

​

SaaS

​

Cost of SaaS revenues consist primarily of expenses related to our cloud services and support provided to customers.  These expenses are comprised of cloud computing costs, personnel-related costs directly associated with cloud operations, and customer support, including salaries, benefits, bonuses and stock-based compensation and allocated overhead.  

​

Cost of SaaS revenues decreased by $1.5 million or 8% during the fiscal year ended June 30, 2025 from the same period in fiscal year 2024. The decrease is primarily due to decreases in (i) personnel related costs of $1.5 million and (ii) outside consulting cost of $258,000; partially offset by an increase in cloud computing cost of $279,000 during the fiscal year ended June 30, 2025, from the same period in fiscal year 2024. Foreign exchange rate fluctuation had an immaterial impact on cost of SaaS revenues when comparing fiscal year ended June 30, 2025 and 2024.

​

​

Professional Services

​

Cost of professional services consists primarily of personnel-related costs directly associated with our professional services and training departments, including salaries, benefits, bonuses, and stock-based compensation and allocated overhead.

​

Cost of professional services increased by $370,000 or 5% during the fiscal year ended June 30, 2025 from the same period in fiscal year 2024. This increase is due to increases in (i) personnel-related costs of $339,000 and (ii) outside consulting cost of $13,000 from the same period in fiscal year 2024.

​

Excluding an increase of $17,000 due to foreign exchange rate fluctuation, cost of professional services revenue increased by $353,000 for the fiscal year ended June 30, 2025, from the same period in fiscal year 2024.

​

Operating Expenses

​

Research and Development

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Fiscal Year Ended June 30,

​

​

​

​

​

​

​

2025

2024

Change

​

​

(in thousands, except percentages)

Research and development

$

29,604

$

26,626

$

2,978

11

%  

Percentage of total revenue

​

33

%  

29

%  

​

​

​

​

Research and development expense primarily consists of personnel-related expenses directly associated with our engineering, product management and development, and quality assurance staff. Included in these costs are salaries,

42

Table of Contents

benefits, bonuses, stock-based compensation and allocated overhead. Research and development expense also includes outside consulting services contracted for research and development.

​

Research and development expense increased by $3.0 million or 11% during the fiscal year ended June 30, 2025, from the same period in fiscal year 2024. The increase is primarily due to increases in (i) $2.8 million in personnel-related costs and (ii) $197,000 in outside consulting costs.

​

Excluding a decrease of $5,000 due to foreign exchange rate fluctuation, research and development expense increased by $3.0 million for the fiscal year ended June 30, 2025, from the same period in fiscal year 2024.

​

Sales and Marketing

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Fiscal Year Ended June 30,

​

​

​

​

​

​

​

2025

2024

Change

​

​

(in thousands, except percentages)

Sales and marketing

$

19,356

$

22,115

$

(2,759)

(12)

%  

Percentage of total revenue

​

22

%  

24

%  

​

​

​

Sales and marketing expense primarily consists of personnel-related expenses directly associated with our sales, marketing, and business development staff. Included in these costs are salaries, benefits, bonuses, and stock-based compensation and allocated overhead. Sales and marketing expenses also include amortization of commissions paid to our sales staff, lead generation activities, advertising, trade show and other promotional costs and, to a lesser extent, occupancy costs and related overhead.

​

Sales and marketing expenses decreased by $2.8 million or 12% during the fiscal year ended June 30, 2025 from the same period in fiscal year 2024. The decrease is primarily due to a decrease of $3.4 million in personnel-related costs; partially offset by increases of (i) $273,000 in lead generation costs and (ii) $145,000 in outside consulting costs.

​

Excluding an increase of $205,000 due to foreign exchange rate fluctuation, sales and marketing expense decreased $3.0 million for the fiscal year ended June 30, 2025, from the same period in fiscal year 2024.

​

General and Administrative

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Fiscal Year Ended June 30,

​

​

​

​

​

​

​

2025

2024

Change

​

​

(in thousands, except percentages)

General and administrative

$

8,615

$

10,499

$

(1,884)

(18)

%  

Percentage of total revenue

​

10

%  

11

%  

​

​

​

​

General and administrative expense primarily consists of personnel-related expenses directly associated with our finance, human resources, administrative and legal personnel. Included in these costs are salaries, benefits, bonuses, and stock-based compensation and allocated overhead. General and administrative expenses also include fees for professional services, provision for credit losses and, to a lesser extent, occupancy costs and related overhead.

​

General and administrative expense decreased by $1.9 million or 18% during the fiscal year ended June 30, 2025, from the same period in fiscal year 2024. The decrease is primarily due to decreases in (i) $992,000 in legal expenses, (ii) $608,000 in personnel-related expenses, (iii) $296,000 in accounting, audit, and administrative expenses, and (iv) $28,000 in credit loss expenses.

​

Excluding an increase of $39,000 due to foreign exchange rate fluctuation, general and administrative expense increased $1.9 million for the fiscal year ended June 30, 2025, from the same period in fiscal year 2024.

​

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Table of Contents

​

Stock-Based Compensation

​

Stock-based compensation expense is accounted for in accordance with the provisions of the accounting guidance which requires the measurement and recognition of compensation expense for all equity-based payment awards made to employees, members of our board of directors and consultants, based upon the grant-date fair value of those awards.  We value our share-based payments under ASC 718, and record compensation expense for all share-based payments made to employees based on the fair value at the date of the grant.

The effect of recording stock-based compensation for fiscal year 2025 and 2024 is as follows:

​

​

​

​

​

​

​

​

​

​

Fiscal Year Ended June 30,

​

​

2025

2024

Stock-based compensation by type of award

​

(in thousands)

Stock options

$

1,113

$

3,348

Restricted stock units

​

1,033

​

819

Employee stock purchase plan

​

303

​

362

Total stock-based compensation

​

$

2,449

​

$

4,529

​

Determining the fair value of the equity-based payment awards at the grant date required significant judgment and the use of estimates, particularly surrounding the Black-Scholes valuation assumptions such as stock price volatility and expected option term.

​

Below is a summary of stock-based compensation included in the cost and expenses:

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Fiscal Year Ended June 30,

​

​

​

​

​

​

​

2025

2024

Change

​

​

(in thousands, except percentages)

Cost of revenue

$

865

$

1,237

$

(372)

(30)

%  

Research and development

​

640

​

1,424

​

(784)

(55)

%  

Sales and marketing

​

352

​

645

​

(293)

(45)

%  

General and administrative

​

592

​

1,223

​

(631)

(52)

%  

Total stock-based compensation

​

$

2,449

​

$

4,529

​

$

(2,080)

(46)

%  

​

Stock-based compensation expense includes the amortization of the fair value primarily of stock options awarded to employees, members of our board of directors and consultants. The fair value of stock options granted is recognized as an expense over their respectable vesting schedule. The decrease in our stock-based compensation expense in fiscal year 2025 compared to fiscal year 2024 was primarily due to decreases in stock option vesting over their respectable periods, company-wide headcount, and equity grant activity.

​

We expect to review our share-based payment awards annually, as necessary.  

​

Income from Operations

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Fiscal Year Ended June 30,

​

​

​

​

​

​

​

2025

2024

​

Change

​

​

(in thousands, except percentages)

Income from operations

$

4,433

​

$

5,971

​

$

(1,538)

(26)

%

Operating margin

​

5

%  

​

6

%  

​

​

​

​

​

​

44

Table of Contents

Results from operations was income of $4.4 million in fiscal year 2025, compared to income of $6.0 million in fiscal year 2024. We recorded a positive operating margin of 5% in fiscal year 2025, and a positive operating margin of 6% in fiscal year 2024.

During the fiscal year ended June 30, 2025, SaaS revenue decreased by $3.2 million to $81.9 million compared to $85.1 million in fiscal year 2024.

The decrease in total costs and operating expenses in fiscal year ended June 30, 2025 was $2.8 million primarily due to decreases of (i) $2.4 million in personnel-related expenses, (ii) $992,000 in legal expenses, (iii) $199,000 in outside consulting costs, and (iv) $28,000 in credit loss expenses; partially offset by increases in (i) $279,000 in cloud computing costs and (ii) $273,000 in lead generation costs.

Excluding an increase from foreign exchange fluctuation of $257,000, total costs and operating expenses decreased by $3.1 million for the fiscal year ended June 30, 2025, from the same period in fiscal year 2024.

Interest Income

​

Interest income consists primarily of interest earned on money market accounts, which have decreased in rates compared to prior year. Interest income, was income of $2.5 million and $3.8 million for the fiscal years ended June 30, 2025 and 2024, respectively.

​

Other Expense, Net

​

Other expense, net primarily included foreign exchange rate fluctuations on international trade receivables. Other expense, net was $1.3 million and $51,000 for the fiscal years ended June 30, 2025 and 2024, respectively.

​

Income Tax Benefit (Provision)

​

Provision for income taxes consists of federal, state and foreign income taxes and the release of a substantial portion of our valuation allowance against U.S. deferred tax assets as of June 30, 2025. We consider all available evidence, both positive and negative, including but not limited to earnings history, expiring attributes, projected future outcomes, industry and market trends and the nature of each of the deferred tax assets. We recorded an income tax benefit of $26.6 million and provision of $1.9 million in the fiscal years ended June 30, 2025 and 2024, respectively.

​

New Accounting Pronouncements

For information with respect to recent accounting pronouncements and the impact of these pronouncements on our consolidated financial statements, see Note 1 of Notes to Consolidated Financial Statements included in Item 8 Financial Statements and Supplementary Data of this Annual Report.

Liquidity and Capital Resources

​

Overview

​

Our principal sources of liquidity were cash and cash equivalents, and accounts receivable, net. Our liquidity sources were $95.7 million compared to $101.7 million as of June 30, 2025 and 2024, respectively. Our cash, cash equivalents, and restricted cash were $62.9 million and $70.0 million as of June 30, 2025 and 2024, respectively.

​

Our working capital was $38.4 million and $44.5 million as of June 30, 2025 and 2024, respectively. Our deferred revenue was $50.5 million and $49.3 million as of June 30, 2025 and 2024, respectively.

​

Based upon our current business plan, we believe that existing capital resources will enable us to maintain current and planned operations for at least the next 12 months. From time to time, however, we may consider opportunities for raising additional capital. We can make no assurances that such opportunities will be available to us on economic terms we consider favorable, if at all.

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Table of Contents

​

Our expectations as to our future cash flows and our future cash balances are subject to a number of assumptions, including assumptions regarding anticipated increases in our revenue, our ability to retain existing customers and customer purchasing and payment patterns, many of which are beyond our control.

​

Cash Flows

For the fiscal years ended June 30, 2025 and 2024, our cash flows were as follows (in thousands):

​

​

​

​

​

​

​

​

Fiscal Year Ended June 30,

​

2025

2024

Net cash provided by operating activities

$

5,263

​

$

12,454

Net cash used in investing activities

​

(565)

​

​

(198)

Net cash used in financing activities

​

(14,393)

​

​

(15,391)

​

Cash provided by operating activities mainly consists of net income adjusted for non-cash expense items such as depreciation and amortization, expense associated with stock-based awards, the timing of employee related costs including costs capitalized to obtain revenue contracts, amortization of right-of-use assets, and changes in operating assets and liabilities during the year.

​

Cash provided by operating activities decreased by $7.2 million during the fiscal year ended June 30, 2025, driven primarily by the decreases in deferred income taxes related to our valuation release, stock-based compensation, and accrued liabilities mainly offset by the increase in net income.

​

Net cash used in investing activities increased by $367,000 during the fiscal year ended June 30, 2025, driven primarily by increased activities related to the purchase of equipment for employees and facility expenditures. Historically, cash used in investing activities has been used to purchase equipment and software to support our business and growth.  

Net cash used in financing activities decreased by $1.0 million during the fiscal year ended June 30, 2025. The changes consist primarily of proceeds from the exercise of employee stock options, our employee stock purchase plan, and a decrease of funds used with repurchases of our common stock of approximately $1.5 million.

​

Commitments

Our principal commitments consist of obligations under leases for office space. Lease agreements are evaluated to determine whether an arrangement is or contains a lease in accordance with ASC 842, Leases.

​

​

The following table summarizes our contractual obligations as of June 30, 2025 and the effect such obligations are expected to have on its liquidity and cash flow in future periods (in thousands):

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Payments Due by Period

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Total

​

1 – 3 Years

​

3 – 5 Years

​

More than 5 Years

Operating leases

$

4,705

$

2,921

$

728

$

1,056

Total

​

$

4,705

​

$

2,921

​

$

728

​

$

1,056

Off-Balance Sheet Arrangements

As of June 30, 2025, we had no significant off-balance sheet arrangements as defined in Item 303(a)(4) of Regulation S-K.

​

​

​

​

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