eGain shares soar after swinging to a profit in fiscal 2Q thanks to software sales

Sales from SaaS (software as a service) were strong, climbing 53% year-over-year to $15.8 million

metaphor for computer connecting to the cloud
eGain specializes in providing cloud applications for social media as well as for mobile phones and the web

Shares of eGain Corp (NASDAQ:EGAN) soared Friday after the cloud application company swung to a profit in its fiscal second quarter and whizzed past analysts’ estimates.

In its latest quarter ended December 31, the Sunnyvale, California-based company reported net income of $2 million, or $0.07 per share, on revenue of $17.7 million. The results trounced the estimates of Wall Street’s analysts who had called for the company to break-even on sales of $16.28 billion.

READ: Cloud software company Pareteum sees revenue double in 3Q, raises full-year outlook

Investors applauded the news, sending eGain shares up 21% to $9.00 before the opening bell on Thursday.

Analyst Richard Baldry of Roth Capital Partners was also bullish on the results, keeping a Buy rating on the stock along with an $18 price target.

"EGAN's 2QF19 results were well above our forecasts for both revenues and adjusted earnings, leaving a clear view that the company is gaining momentum," Baldry wrote in a note to investors. "By contrast, its shares are down over 60% from their 52-week highs even as revenues and earnings have set new highs. ... [We] believe EGAN warrants a sharply higher valuation."

The quarterly showing also compares well to the year-ago quarter when eGain reported a loss of $788,000 on sales of $15.4 million.

Revenue from SaaS (software as a service) was a bright spot, climbing 53% year-over-year to $15.8 million.

Subscription revenue, which includes SaaS and legacy support sales, rose 25% year-over-year to $15.8 million, accounting for 89% of total sales.

eGain specializes in providing cloud applications for social media as well as for mobile phones and the web.

Contact Ellen Kelleher at [email protected]

Quick facts: eGain

Price: $7.07

Market: NASDAQ
Market Cap: $214.35 m

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