EGAIN Guides Fiscal 2027 Revenue Below Fiscal 2026 as Legacy Business Shrinks

eGain (EGAN) reported fiscal 2026 results on September 3, 2026, posting full-year total revenue of $91.1 million, up roughly 3% from $88.4 million a year earlier, with AI customer revenue up 20% year over year. The Sunnyvale-based knowledge management vendor simultaneously guided fiscal 2027 revenue to $84.5 million to $86.0 million, below the year just ended, as its legacy business continues to shrink.

The fourth quarter showed the crosscurrents clearly. Total revenue was $22.2 million, down from $23.2 million in the year-ago quarter, while AI customer revenue rose 11%. GAAP gross margin slipped to 72% from 73%, and adjusted EBITDA fell to $2.2 million, a 10% margin, versus $4.5 million and a 19% margin a year earlier.

Fourth-quarter GAAP net income was $1.3 million, or $0.05 per share, against $30.9 million, or $1.13 basic, in Q4 fiscal 2025 — a comparison distorted by a roughly $29.0 million tax benefit from the release of most of the company's valuation allowance in that prior quarter. Non-GAAP net income was $2.1 million, or $0.08 per share, versus $2.4 million and $0.09 last year.

For the full year, non-GAAP net income more than doubled to $13.0 million, or $0.47 diluted, from $5.7 million and $0.20. Adjusted EBITDA reached $13.6 million, a 15% margin, up from $8.6 million and 10%. Operating cash flow was $21.2 million, a 23% margin, and cash stood at $73.3 million on June 30, 2026, versus $62.9 million a year earlier, despite $11.5 million spent buying back about 1,607,000 shares at an average $7.16.

AI customer annual recurring revenue grew 13% and made up 72% of total SaaS ARR at year-end. CEO Ashu Roy said Gartner's decision to create a dedicated Magic Quadrant for Customer Service Knowledge Management Systems, and to name eGain a Leader in its inaugural edition published July 16, 2026, validates both the category and the position we've spent years building toward.

Guidance points to a profitability reset. For fiscal 2027, eGain expects AI customer revenue of $59.5 million to $60.5 million, a GAAP net loss of $2.0 million to $3.0 million, non-GAAP net income of just $1.0 million to $2.0 million, and adjusted EBITDA of $650,000 to $1.4 million — a margin of only 1% to 2%, down sharply from 15% in fiscal 2026.

For the first quarter ending September 30, 2026, the company guided to revenue of $20.9 million to $21.4 million, GAAP net income of $500,000 to $1.1 million, and adjusted EBITDA of $1.4 million to $1.9 million. Weighted average shares are seen at about 26.6 million for the quarter and 26.8 million for the year.

Roy framed the coming year as a deliberate trade-off, saying eGain is all in on the AI Knowledge opportunity and describing the shrinking older revenue stream as a managed decline in our profitable legacy business.

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