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eGain
© eGain Corporation. All Rights Reserved.
Customer Engagement Hubsfor a Multichannel World
January15,2013
All statements in this presentation that involve eGain's beliefs and expectationsincluding but not limited to our future growth of our business, our growth strategy,market trends, product attributes and benefits to customers, plans to invest in ourbusiness and expectations regarding the market acceptance of our products, areforward‐looking statements within the meaning of the safe harbor provisions of thePrivate Securities Litigation Reform Act of 1995. These forward‐looking statements arenot guarantees of future results; rather, they are subject to risks and uncertainties thatmay cause actual results to differ materially from those set forth in this presentation.These risks include, but are not limited to, the uncertainty of demand for eGainproducts, our guidance regarding bookings and revenue and mix of new license andcloud contracts; our expectations related to our operations; our ability to investresources to improve our products and continue to innovate; our partnerships; ourfuture markets; and other risks detailed from time to time in eGain’s filings with theSecurities and Exchange Commission, including eGain’s annual report on Form 10‐Kfiled on September 25, 2012, and eGain’s quarterly reports on Form 10‐Q. The forwardlooking statements in the presentation are made as of January 15, 2013 and eGainassumes no obligation to update these forward‐looking statements.
Slide 2
Forward Looking Statements
Who is eGain?
Slide 3
EGAIN OVERVIEW
Slide 4
Employees • ~500 employees world‐wide
Background
• Founded in 1997• Public in September 1999 (NASDAQ: EGAN)• Headquarters: Sunnyvale, CA
Customers• Global, diversified customer base of ~250 direct customers• 200+ OEM customers
Markets• CRM: Customer Service and Support• CRM: Sales
Solutions• eGain Customer Engagement Hub• eGain Interactive Sales Suite• eGain Service Suite
Why should you care?
Slide 5
WORLD is going MULTICHANNEL
46%40%
1. Researchonline2. Thenbuyinstore
51%
32%1. Researchonline2. Thenvisitstore3. Finallybuyonline
Source: Google research study (2012)
Slide 6
Look up blog posts by other moms
Buy online
Look up FAQ
Video Chat about claims
Like the company’s Facebook Page
LauraAndrewsAge:35BusyMom
“ Angie’sBigDealisgreatforinsurance!
eGain Self Service
eGain Cobrowse
eGain Social for Facebook
eGain SuperChat
WE HELP DESIGN AND DELIVER SMART, CONNECTED JOURNEYS
Slide 7
ADRESSING THIS FUNDAMENTAL SHIFT DRIVES A GROWING, MULTI-BILLION DOLLAR OPPORTUNITY
E‐Commerce Ecosystem CRM Market Forecast
SALES
$4.3 $4.6 $5.0 $5.4 $5.8
$5.5 $6.0$6.6
$7.2$7.9
$3.1$3.4
$3.8$4.2
$4.7
$12.9$14.1
$15.4$16.9
$18.4
0
5
10
15
$20
2012 2013 2014 2015 2016
Customer Service and Support Sales Marketing Automation
‘12‐16CAGR
9.3%
11.0%
9.4%
8.0%
eGainsitswithinthe$13billionCRMmarketatthenexusofhigh‐valuecustomerengagements
Slide 8
AND EGAIN’S CUSTOMER ENGAGEMENT HUB IS THE MOST COMPLETE OFFERING BUILT FROM THE GROUND UP
Slide 9
InnovationLayer
DifferentiationLayer
SystemofRecordLayer
CRM/ERPContent
ManagementCTI
eCommerce System
GartnerPaceLayerArchitecture
InnovationLayer
DifferentiationLayer
SystemofRecordLayer
2010 2011
GARTNER WEB CUSTOMER SERVICE MQ LEADER FOUR YEARS IN A ROW
Most visionaryin2010and2011
Slide 10
eGain is the only pure‐play Web Customer Service vendor with material scale and market leading technology
Competitors eGain Advantages
Slide 11
SCA
LELA
RG
EN
ICH
E
Large‐Cap CRM Vendors
Niche Vendors
Contact Center Specialists
• eGainplaystheplatformcardagainstnicheplayers• eGain’ssolutionsprovideastrategicframeworktoimplementcustomer
experiencetransformation• LowerTCOandfastertime‐to‐value(lowintegrationcost/effort)combined
withglobalreachandservicecapabilityappealtolarge,multi‐regionalenterprises
• Contactcentervendors“checktheboxes”formultichannelcustomerinteractioncapabilities,butfunctionalityisveryweakoutsideofvoice‐basedchannels
• Individualapplicationsofferedbylarge‐capCRMvendorslackdepthoffunctionality
• Salesandservicesolutionsarepoorlyintegrated
WHY WE WIN
TELCO SUCCESSmultichannel, multilingual service platform
Businessobjectives• Providecustomerschoiceofinteractionchannels
• Reducecostofserveandsharebestpracticesthroughasharedplatformacrossoperatingcompanies
• Acceleratecustomerexperienceinnovationwithaninnovativeglobalpartner
Solutionsdeployed Web,Mobile,Social
Chatbot GuidedHelp SelfService Widgets Facebook
ContactCenter Mail Chat Knowledge
eGainpowersVodafoneGroup’sAskOnlinePlatform• Self‐servicedeflectionupby28%• FirstContactResolutionupby12%• DeployedacrosseightVodafoneoperatingcompanies
Slide 12
INSURANCE SUCCESSco-innovation with industry customer service leader
Businessobjectives• EffectivelyhandlememberinquiriesoriginatingfromtheUSAAwebsite(constitutesmorethan50%ofallinquiriesintoUSAA)
• Improveonlinesalesandonboardingexperience
• Scalable,agile,robust,andinnovativeplatform
Solutiondeployed• Chat• Clicktocall• Cobrowse
Groupsenabled• Bank• Newmembersolutions• Financialadvicesolutions• Property&Casualty
eGainenrichesUSAA’snext‐gencustomeracquisitionandonboardingprocesses• 200%improvementinonlineformcompletion– 25%conversionto75%• 7,000associatesenabledwithinteractivesalescapability
Slide 13
RETAIL SUCCESSreplaced multiple point tools with eGain platform
Businessobjectives• Provideconsistentanswersacross
allchannels– web,phone,email,chat
• Suggestproductsandservicesinpre‐salesphase
• Increasecustomersatisfactionwithoutincreasingstaff
• Bothreactiveandproactivechat• Multilingualrequirement
Solutionsdeployed• Web
– SelfService• ContactCenter
– KnowledgeAgent– Mail
CanonpresentedsolutionsuccessatGartner360conferenceWitheGainanditsunderlyingCustomerInteractionHubplatform,ourcustomerservicewillbeconsistent,effective,andefficientacrossalltouchpoints.Moreover,wecanpluginnewcommunicationmediaascustomerpreferencesevolve.
‐ JosephWarren,VP/GM,CustomerSupportOperations,CanonUSA
Slide 14
GROWTH STRATEGY
Slide 15
Expand direct sales
Expand in existing accounts
Establish new distribution partners
Push into mid‐market
Product innovation
Are we a good investment?
Slide 16
FISCAL SECOND QUARTER SELECTED PRELIMINARY FINANCIAL RESULTS Total revenue expected to exceed $14.5 million, up 33%
sequentially and 35% year-over-year.
Cloud revenue expected to exceed $4.3 million, up 15% sequentially and 65% year-over-year.
Total deferred revenue of approx. $40.0 million, up 21% sequentially and 110% year-over-year.
Cash equivalents and restricted cash of approx. $19.9 million, up from $11.4 million at September 30, 2012.
Increasing guidance for growth in annual cloud revenue for fiscal 2013 from 40% to at least 50%.
Slide 17
STARTING IN FY2011 INCREASING INVESTMENT IN SALES & MARKETING…
Slide 18
Historical Quarterly Sales & Marketing Expense
$2.9 $3.2
$4.3 $4.0
$5.0
$6.0 $6.2
Q22011
Q32011
Q42011
Q12012
Q22012
Q32012
Q42012
($ in millions)
CONTRIBUTING TO STRONG BOOKINGS GROWTH…
Slide 19
Historical Quarterly Gross Bookings
$8.4
$14.1 $12.6
$19.6
$14.9
$22.9
(34%)
24% 27% 36%
77% 63%
Q12012
Q22012
Q32012
Q42012
Q12013
Q22013E
Gross Bookings YoY Growth
($ in millions)
WITH MIGRATION TO CLOUD…
Slide 20
New Cloud & License Bookings Mix
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
FY2011A FY2012A 1st HALF 2013
Cloud License
RESULTING IN A GROWING BACKLOG…
Slide 21
Historical Deferred and Unbilled Deferred Revenue
$19.2 $20.3
$28.8
$33.0
$40.0 44% 51% 62%
108% 109%
Q22012
Q32012
Q42012
Q12013
Q22013E
Deferred and Unbilled Deferred Revenue YoY Growth
($ in millions)
ACCELERATING REVENUE GROWTH IN FY13…
Slide 22
Quarterly Total Revenue and Growth($ in millions)
(a)Quarterly Cloud Revenue and Growth
$10.8 $11.5
$10.6 $10.7
$14.5
14% 29%
(16%)3%
34%
Q22012
Q32012
Q42012
Q12013
Q22013E
Total Revenue YoY Growth
$2.6 $2.8
$3.3
$3.7
$4.3
4% 12%
35% 42%
68%
Q22012
Q32012
Q42012
Q12013
Q22013E
Recurring Revenue YoY Growth
eGain Renewal Rates ($) SaaS Industry Renewal Rates
WITH HEALTHY RENEWAL RATESkey to our success
Slide 23
100%+92%
83%83% 83% 80%
74%
MKTG LPSN VOCS N CRM LOGM CTCT
Source: Company filings and Wall Street research
87% 90% 91% 92%
FY2009A FY2010A FY2011A FY2012A
Median: 83%
PROVEN AND SCALABLE GLOBAL OPERATING MODELsustained comparative advantage
Slide 24
eGainhasdevelopedandrefinedafunction‐specificglobaloperatingmodeloveradecade
HEADCOUNT BY LOCATION
COGS / HEAD G&A / HEADR&D / HEAD S&M / HEAD
$86k
$170k
eGain Comparables
$56k
$207k
eGain Comparables
$156k
$261k
eGain Comparables
$125k
$259k
eGain Comparables
Hosting & Support 13
Professional Services 28
R&D 22
S&M 50
G&A 19
Hosting & Support 15
Professional Services 32
R&D 0
S&M 49
G&A 8 Hosting & Support 18
Professional Services 40
R&D 87
S&M 37
G&A 1951% of services & support, 40% of professional services, 80% of R&D, 27% of S&M
and 41% of G&A headcount are located in India as of Jun‐30‐12
Source: Company filingsNote: eGain headcount and financials are LTM as of 6/30/12. CRM comparables include CRM, JIVE, ET, BV, LPSN, DWRE, CTCT, MKTG and VOCS. Comparables headcount and financials are as of last fiscal
year. Financials are GAAP
NORTH AMERICA EMEA
ASIA-PACIFIC
MARGIN POTENTIAL FIRMLY ESTABLISHED
Slide 25© eGain Communications Corp. All rights reserved.
($ in millions)
Recurring Revenue Gross Profit and Margin
$4.4 $4.4 $4.8
$5.8 $6.2
77% 77% 77% 81% 82%
Q22012
Q32012
Q42012
Q12013
Q22013E
Gross Profit Gross Margin
FISCAL SECOND QUARTER SELECTED PRELIMINARY FINANCIAL RESULTS Total revenue expected to exceed $14.5 million, up 33%
sequentially and 35% year-over-year.
Cloud revenue expected to exceed $4.3 million, up 15% sequentially and 65% year-over-year.
Total deferred revenue of approx. $40.0 million, up 21% sequentially and 110% year-over-year.
Cash equivalents and restricted cash of approx. $19.9 million, up from $11.4 million at September 30, 2012.
Increasing guidance for growth in annual cloud revenue for fiscal 2013 from 40% to at least 50%.
Slide 26
© eGain 2013. All Rights Reserved.
