eGain extends stock repurchase program to 2025

SUNNYVALE, Calif. - eGain (NASDAQ:EGAN) Corporation (NASDAQ:EGAN), a provider of AI Knowledge Management solutions for businesses, has announced an extension to its stock repurchase program. The program, initially set to expire on November 14, 2024, will now continue until the same date in 2025 or until the allocated funds for repurchase are exhausted, whichever comes first.

The decision, approved by eGain's Board of Directors, reflects the company's belief in the undervaluation of its shares and its confidence in the future growth of the AI knowledge market. CEO Ashu Roy commented on the extension, stating that eGain's solid financial standing supports the company's efforts to expand its market presence and simultaneously deliver shareholder value through the buyback initiative.

As of Monday, eGain has repurchased approximately $27.6 million of its common stock, leaving around $12.4 million available for further repurchases. The program permits eGain to acquire shares on an opportunistic basis, either through open market transactions or privately negotiated deals, with the timing and volume of repurchases being subject to market conditions, stock price, trading volume, and capital availability.

The company may also engage in repurchases under a Rule 10b5-1 plan, which allows for stock buybacks at times when eGain might otherwise be restricted from such actions due to insider trading laws or self-imposed trading blackout periods.

eGain's repurchase program is not bound to acquire any specific number of shares and may be modified, suspended, or discontinued at the discretion of the company without prior notice. The funding for the buybacks will come from eGain's existing cash reserves or future cash flows.

This announcement is based on a press release statement from eGain Corporation and contains forward-looking statements within the meaning of the U.S. Private Securities Litigation Reform Act of 1995. These statements involve risks and uncertainties that could cause actual results to differ materially from those projected.

In other recent news, eGain Corporation reported mixed Q1 2025 results, with a 10% decrease in total revenue year-over-year, amounting to $21.8 million. Despite this, the company has witnessed a surge in new bookings for its AI Knowledge Hub product. The launch of the eGain AI Agent, a product aimed at improving customer interactions, was also announced. CFO Eric Smit reported a non-GAAP net income of $1.3 million, a drop from $3.8 million in the prior year, but maintained the revenue guidance for the upcoming quarter and the full fiscal year.

Furthermore, eGain reported a robust balance sheet with $67.2 million in cash and cash equivalents, and a strong performance in its Knowledge business, with a 16% increase in SaaS Annual Recurring Revenue (ARR) for Knowledge customers. However, there was a 15% decrease in total remaining performance obligations (RPO) year-over-year, mainly due to two customer losses. In the near future, eGain is set to participate in the 13th Annual ROTH Technology Conference.

These recent developments indicate a strong demand for eGain's AI Knowledge Hub, despite a decrease in total revenue and net income. The company's focus on product innovation in AI Knowledge offerings has been well received by clients, as demonstrated by the growth in new bookings and SaaS ARR.

InvestingPro Insights

eGain Corporation's decision to extend its stock repurchase program aligns with several key financial indicators and market trends. According to InvestingPro data, eGain's market capitalization stands at $147.47 million, reflecting its position as a smaller player in the AI Knowledge Management space. The company's P/E ratio of 27.22 suggests that investors are willing to pay a premium for its future earnings potential, possibly due to its involvement in the growing AI market.

One of the InvestingPro Tips highlights that management has been aggressively buying back shares, which is consistent with the company's announcement to extend its repurchase program. This strategy often signals management's confidence in the company's future prospects and their belief that the stock is undervalued.

Another relevant InvestingPro Tip indicates that eGain holds more cash than debt on its balance sheet. This strong financial position supports CEO Ashu Roy's statement about the company's solid financial standing, enabling it to pursue both market expansion and share repurchases simultaneously.

The company's high shareholder yield, as noted in another InvestingPro Tip, further underscores the value being returned to shareholders through these buybacks. This approach to capital allocation may be particularly appealing to investors given that eGain does not pay a dividend, according to InvestingPro.

It's worth noting that eGain's stock price has fallen significantly over the last three months, with a 3-month price total return of -32.4%. This decline may have influenced the decision to extend the buyback program, as the company sees an opportunity to repurchase shares at what it considers to be attractive prices.

For investors seeking a more comprehensive analysis, InvestingPro offers additional tips and insights beyond those mentioned here. In fact, there are 5 more InvestingPro Tips available for eGain Corporation, providing a deeper understanding of the company's financial health and market position.

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