{"url_path":"/sec/egan/10-q/2026/item-1","section_key":"item-1","section_title":"Item 1 Financial Statements**","topic":"sec","document":{"doc_type":"10-Q","doc_date":"2026-05-14","source_url":"https://www.sec.gov/Archives/edgar/data/1066194/0001104659-26-061184-index.html","accession_number":"0001104659-26-061184","cik":"0001066194","ticker":"EGAN","issuer_name":"EGAIN Corp","edgar_url":"https://www.sec.gov/Archives/edgar/data/1066194/0001104659-26-061184-index.html","primary_entity_key":"0001066194","primary_entity_name":"EGAIN Corp"},"word_count":18506,"has_tables":true,"body_markdown":"**Item 1. Financial Statements**\n\n**EGAIN CORPORATION**\n\n**CONDENSED CONSOLIDATED BALANCE SHEETS**\n\n(in thousands, except par value data)\n\n(unaudited)\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n**March 31, **\n\n​\n\n**June 30, **\n\n​\n\n  ​ ​ ​\n\n**2026**\n\n**  ​ ​ ​**\n\n**2025**\n\n**ASSETS**\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\nCurrent assets:\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\nCash and cash equivalents\n\n​\n\n$\n\n80,462\n\n​\n\n$\n\n62,909\n\nRestricted cash\n\n​\n\n \n\n8\n\n​\n\n \n\n8\n\nAccounts receivable, less provision for credit losses of $25 and $7 as of March 31, 2026 and June 30, 2025, respectively\n\n​\n\n \n\n8,715\n\n​\n\n \n\n32,775\n\nCosts capitalized to obtain revenue contracts, net\n\n​\n\n \n\n876\n\n​\n\n \n\n1,148\n\nPrepaid expenses\n\n​\n\n​\n\n2,182\n\n​\n\n​\n\n2,841\n\nOther current assets\n\n​\n\n \n\n903\n\n​\n\n \n\n886\n\nTotal current assets\n\n​\n\n \n\n93,146\n\n​\n\n \n\n100,567\n\nProperty and equipment, net\n\n​\n\n \n\n880\n\n​\n\n \n\n670\n\nOperating lease right-of-use assets\n\n​\n\n​\n\n2,862\n\n​\n\n​\n\n3,530\n\nCosts capitalized to obtain revenue contracts, net of current portion\n\n​\n\n \n\n1,274\n\n​\n\n \n\n1,460\n\nGoodwill\n\n​\n\n \n\n13,186\n\n​\n\n \n\n13,186\n\nOther assets, net\n\n​\n\n \n\n28,337\n\n​\n\n \n\n28,592\n\nTotal assets\n\n​\n\n$\n\n139,685\n\n​\n\n$\n\n148,005\n\n****​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n**LIABILITIES AND STOCKHOLDERS' EQUITY**\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\nCurrent liabilities:\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\nAccounts payable\n\n​\n\n$\n\n1,524\n\n​\n\n$\n\n2,596\n\nAccrued compensation\n\n​\n\n \n\n4,925\n\n​\n\n \n\n6,749\n\nAccrued liabilities\n\n​\n\n \n\n3,505\n\n​\n\n \n\n2,821\n\nOperating lease liabilities\n\n​\n\n​\n\n1,505\n\n​\n\n​\n\n1,220\n\nDeferred revenue\n\n​\n\n \n\n31,872\n\n​\n\n \n\n48,765\n\nTotal current liabilities\n\n​\n\n \n\n43,331\n\n​\n\n \n\n62,151\n\nDeferred revenue, net of current portion\n\n​\n\n \n\n2,180\n\n​\n\n \n\n1,766\n\nOperating lease liabilities, net of current portion\n\n​\n\n​\n\n1,630\n\n​\n\n​\n\n2,449\n\nOther long-term liabilities\n\n​\n\n \n\n987\n\n​\n\n \n\n908\n\nTotal liabilities\n\n​\n\n \n\n48,128\n\n​\n\n \n\n67,274\n\nCommitments and contingencies (Note 6)\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\nStockholders' equity:\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\nCommon stock, par value $0.001 per share - authorized: 60,000 shares; issued: 33,835 and 33,237 shares as of March 31, 2026 and June 30, 2025, respectively; outstanding: 27,450 and 27,083 shares as of March 31, 2026 and June 30, 2025, respectively\n\n​\n\n \n\n34\n\n​\n\n \n\n33\n\nAdditional paid-in capital\n\n​\n\n \n\n417,270\n\n​\n\n \n\n411,253\n\nTreasury stock, at cost: 6,385 and 6,154 shares of common stock as of March 31, 2026 and June 30, 2025, respectively\n\n​\n\n​\n\n(40,252)\n\n​\n\n​\n\n(38,812)\n\nAccumulated other comprehensive loss\n\n​\n\n \n\n(1,660)\n\n​\n\n \n\n(336)\n\nAccumulated deficit\n\n​\n\n \n\n(283,835)\n\n​\n\n \n\n(291,407)\n\nTotal stockholders' equity\n\n​\n\n \n\n91,557\n\n​\n\n \n\n80,731\n\nTotal liabilities and stockholders' equity\n\n​\n\n$\n\n139,685\n\n​\n\n$\n\n148,005\n\n​\n\n**See accompanying notes to condensed consolidated financial statements.**\n\n2\n\n[Table of Contents](#Toc)\n\n​\n\n**EGAIN CORPORATION**\n\n**CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS**\n\n(in thousands, except per share data)\n\n(unaudited)\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n**Three Months Ended**\n\n​\n\n**Nine Months Ended**\n\n​\n\n​\n\n**March 31, **\n\n​\n\n**March 31, **\n\n​\n\n  ​ ​ ​\n\n**2026**\n\n**  ​ ​ ​**\n\n**2025**\n\n​\n\n**2026**\n\n**  ​ ​ ​**\n\n**2025**\n\n**Revenue:**\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\nSaaS\n\n​\n\n$\n\n20,917\n\n​\n\n$\n\n19,563\n\n​\n\n$\n\n64,616\n\n​\n\n$\n\n60,230\n\nProfessional services\n\n​\n\n \n\n1,582\n\n​\n\n \n\n1,446\n\n​\n\n \n\n4,370\n\n​\n\n \n\n4,967\n\nTotal revenue\n\n​\n\n \n\n22,499\n\n​\n\n \n\n21,009\n\n​\n\n \n\n68,986\n\n​\n\n \n\n65,197\n\nCost of revenue:\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\nCost of SaaS\n\n​\n\n \n\n4,532\n\n​\n\n \n\n4,594\n\n​\n\n \n\n13,141\n\n​\n\n \n\n13,742\n\nCost of professional services\n\n​\n\n \n\n1,462\n\n​\n\n \n\n2,129\n\n​\n\n \n\n4,856\n\n​\n\n \n\n6,327\n\nTotal cost of revenue\n\n​\n\n \n\n5,994\n\n​\n\n \n\n6,723\n\n​\n\n \n\n17,997\n\n​\n\n \n\n20,069\n\nGross profit\n\n​\n\n \n\n16,505\n\n​\n\n \n\n14,286\n\n​\n\n \n\n50,989\n\n​\n\n \n\n45,128\n\n**Operating expenses:**\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\nResearch and development\n\n​\n\n \n\n7,566\n\n​\n\n \n\n7,514\n\n​\n\n \n\n22,158\n\n​\n\n \n\n22,643\n\nSales and marketing\n\n​\n\n \n\n4,644\n\n​\n\n \n\n4,704\n\n​\n\n \n\n13,847\n\n​\n\n \n\n14,715\n\nGeneral and administrative\n\n​\n\n \n\n2,287\n\n​\n\n \n\n2,041\n\n​\n\n \n\n8,097\n\n​\n\n \n\n6,584\n\nTotal operating expenses\n\n​\n\n \n\n14,497\n\n​\n\n \n\n14,259\n\n​\n\n \n\n44,102\n\n​\n\n \n\n43,942\n\nIncome from operations\n\n​\n\n \n\n2,008\n\n​\n\n \n\n27\n\n​\n\n \n\n6,887\n\n​\n\n \n\n1,186\n\nInterest income\n\n​\n\n \n\n603\n\n​\n\n \n\n597\n\n​\n\n \n\n1,689\n\n​\n\n \n\n2,029\n\nOther income (expense), net\n\n​\n\n \n\n176\n\n​\n\n \n\n(304)\n\n​\n\n \n\n599\n\n​\n\n \n\n(875)\n\nIncome before income tax provision\n\n​\n\n \n\n2,787\n\n​\n\n \n\n320\n\n​\n\n \n\n9,175\n\n​\n\n \n\n2,340\n\nIncome tax provision\n\n​\n\n \n\n(371)\n\n​\n\n \n\n(254)\n\n​\n\n \n\n(1,603)\n\n​\n\n \n\n(951)\n\nNet income\n\n​\n\n$\n\n2,416\n\n​\n\n$\n\n66\n\n​\n\n$\n\n7,572\n\n​\n\n$\n\n1,389\n\n**Per share information:**\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\nEarnings per share:\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\nBasic\n\n​\n\n$\n\n0.09\n\n​\n\n$\n\n0.00\n\n​\n\n$\n\n0.28\n\n​\n\n$\n\n0.05\n\nDiluted\n\n​\n\n$\n\n0.09\n\n​\n\n$\n\n0.00\n\n​\n\n$\n\n0.27\n\n​\n\n$\n\n0.05\n\nWeighted-average shares used in computation:\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\nBasic\n\n​\n\n \n\n27,420\n\n​\n\n \n\n28,065\n\n​\n\n \n\n27,187\n\n​\n\n \n\n28,439\n\nDiluted\n\n​\n\n \n\n28,140\n\n​\n\n \n\n28,482\n\n​\n\n \n\n27,955\n\n​\n\n \n\n28,949\n\n​\n\n**See accompanying notes to condensed consolidated** **financial statements**.\n\n​\n\n3\n\n[Table of Contents](#Toc)\n\n**EGAIN CORPORATION**\n\n**CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME**\n\n(in thousands)\n\n(unaudited)\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n**Three Months Ended**\n\n​\n\n**Nine Months Ended**\n\n​\n\n​\n\n**March 31, **\n\n​\n\n**March 31, **\n\n​\n\n  ​ ​ ​\n\n**2026**\n\n  ​ ​ ​\n\n**2025**\n\n \n\n**2026**\n\n  ​ ​ ​\n\n**2025**\n\nNet income\n\n​\n\n$\n\n2,416\n\n​\n\n$\n\n66\n\n​\n\n$\n\n7,572\n\n​\n\n$\n\n1,389\n\nOther comprehensive income, net of taxes:\n\n​\n\n​\n\n​\n\n​\n\n \n\n​\n\n​\n\n​\n\n​\n\n​\n\n \n\n​\n\nForeign currency translation adjustments\n\n​\n\n \n\n(656)\n\n​\n\n \n\n555\n\n​\n\n \n\n(1,324)\n\n​\n\n \n\n853\n\nTotal comprehensive income\n\n​\n\n$\n\n1,760\n\n​\n\n$\n\n621\n\n​\n\n$\n\n6,248\n\n​\n\n$\n\n2,242\n\n​\n\n**See accompanying notes to condensed consolidated financial statements.**\n\n​\n\n​\n\n4\n\n[Table of Contents](#Toc)\n\n**EGAIN CORPORATION**\n\n**CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY**\n\n(in thousands)\n\n(unaudited)\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n**Three Months Ended March 31, 2026**\n\n​\n\n**Common Stock**\n\n​\n\n**Additional********Paid-in**\n\n​\n\n**Treasury Stock**\n\n​\n\n**Accumulated********Other********Comprehensive**\n\n​\n\n**Accumulated**\n\n​\n\n**Total********Stockholders'**\n\n​\n\n**Shares**\n\n**  ​ ​ ​**\n\n**Amount**\n\n**  ​ ​ ​**\n\n**Capital**\n\n**  ​ ​ ​**\n\n**Shares**\n\n**  ​ ​ ​**\n\n**Amount**\n\n**  ​ ​ ​**\n\n**Loss**\n\n**  ​ ​ ​**\n\n**Deficit**\n\n**  ​ ​ ​**\n\n**Equity**\n\nBalances as of December 31, 2025\n\n27,381\n\n​\n\n$\n\n34\n\n​\n\n$\n\n416,258\n\n​\n\n6,385\n\n​\n\n$\n\n(40,252)\n\n​\n\n$\n\n(1,004)\n\n​\n\n$\n\n(286,251)\n\n​\n\n$\n\n88,785\n\nIssuance of common stock upon exercise of stock options\n\n69\n\n​\n\n​\n\n—\n\n​\n\n​\n\n223\n\n​\n\n—\n\n​\n\n​\n\n—\n\n​\n\n​\n\n—\n\n​\n\n​\n\n—\n\n​\n\n​\n\n223\n\nStock-based compensation\n\n—\n\n​\n\n​\n\n—\n\n​\n\n​\n\n789\n\n​\n\n—\n\n​\n\n​\n\n—\n\n​\n\n​\n\n—\n\n​\n\n​\n\n—\n\n​\n\n​\n\n789\n\nForeign currency translation adjustments\n\n—\n\n​\n\n​\n\n—\n\n​\n\n​\n\n—\n\n​\n\n—\n\n​\n\n​\n\n—\n\n​\n\n​\n\n(656)\n\n​\n\n​\n\n—\n\n​\n\n​\n\n(656)\n\nNet income\n\n—\n\n​\n\n​\n\n—\n\n​\n\n​\n\n—\n\n​\n\n—\n\n​\n\n​\n\n—\n\n​\n\n​\n\n—\n\n​\n\n​\n\n2,416\n\n​\n\n​\n\n2,416\n\nBalances as of March 31, 2026\n\n27,450\n\n​\n\n$\n\n34\n\n​\n\n$\n\n417,270\n\n​\n\n6,385\n\n​\n\n$\n\n(40,252)\n\n​\n\n$\n\n(1,660)\n\n​\n\n$\n\n(283,835)\n\n​\n\n$\n\n91,557\n\n​\n\n​\n\n​\n\n​\n\n**See accompanying notes to condensed consolidated financial statements.**\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n5\n\n[Table of Contents](#Toc)\n\n**EGAIN CORPORATION**\n\n**CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY**\n\n(in thousands)\n\n(unaudited)\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n**Three Months Ended March 31, 2025**\n\n​\n\n**Common Stock**\n\n​\n\n**Additional********Paid-in**\n\n​\n\n**Treasury Stock**\n\n​\n\n**Notes Receivable********From**\n\n​\n\n**Accumulated********Other********Comprehensive**\n\n​\n\n**Accumulated**\n\n​\n\n**Total********Stockholders'**\n\n​\n\n**Shares**\n\n**  ​ ​ ​**\n\n**Amount**\n\n**  ​ ​ ​**\n\n**Capital**\n\n**  ​ ​ ​**\n\n**Shares**\n\n**  ​ ​ ​**\n\n**Amount**\n\n​\n\n**Stockholders**\n\n**  ​ ​ ​**\n\n**Loss**\n\n**  ​ ​ ​**\n\n**Deficit**\n\n**  ​ ​ ​**\n\n**Equity**\n\nBalances as of December 31, 2024\n\n28,481\n\n​\n\n$\n\n33\n\n​\n\n$\n\n409,551\n\n​\n\n4,629\n\n​\n\n$\n\n(30,025)\n\n​\n\n$\n\n(21)\n\n​\n\n$\n\n(1,942)\n\n​\n\n$\n\n(322,338)\n\n​\n\n$\n\n55,258\n\nIssuance of common stock upon exercise of stock options\n\n12\n\n​\n\n​\n\n—\n\n​\n\n​\n\n31\n\n​\n\n—\n\n​\n\n​\n\n—\n\n​\n\n​\n\n—\n\n​\n\n​\n\n—\n\n​\n\n​\n\n—\n\n​\n\n​\n\n31\n\nRepurchase of common stock\n\n(895)\n\n​\n\n​\n\n—\n\n​\n\n​\n\n—\n\n​\n\n895\n\n​\n\n​\n\n(5,023)\n\n​\n\n​\n\n—\n\n​\n\n​\n\n—\n\n​\n\n​\n\n—\n\n​\n\n​\n\n(5,023)\n\nStock-based compensation\n\n—\n\n​\n\n​\n\n—\n\n​\n\n​\n\n699\n\n​\n\n—\n\n​\n\n​\n\n—\n\n​\n\n​\n\n—\n\n​\n\n​\n\n—\n\n​\n\n​\n\n—\n\n​\n\n​\n\n699\n\nForeign currency translation adjustments\n\n—\n\n​\n\n​\n\n—\n\n​\n\n​\n\n—\n\n​\n\n—\n\n​\n\n​\n\n—\n\n​\n\n​\n\n—\n\n​\n\n​\n\n555\n\n​\n\n​\n\n—\n\n​\n\n​\n\n555\n\nNet income\n\n—\n\n​\n\n​\n\n—\n\n​\n\n​\n\n—\n\n​\n\n—\n\n​\n\n​\n\n—\n\n​\n\n​\n\n—\n\n​\n\n​\n\n—\n\n​\n\n​\n\n66\n\n​\n\n​\n\n66\n\nBalances as of March 31, 2025\n\n27,598\n\n​\n\n$\n\n33\n\n​\n\n$\n\n410,281\n\n​\n\n5,524\n\n​\n\n$\n\n(35,048)\n\n​\n\n$\n\n(21)\n\n​\n\n$\n\n(1,387)\n\n​\n\n$\n\n(322,272)\n\n​\n\n$\n\n51,586\n\n​\n\n​\n\n​\n\n​\n\n**See accompanying notes to condensed consolidated financial statements.**\n\n​\n\n6\n\n[Table of Contents](#Toc)\n\n**EGAIN CORPORATION**\n\n**CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (cont.)**\n\n(in thousands)\n\n(unaudited)\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n**Nine Months Ended March 31, 2026**\n\n​\n\n**Common Stock**\n\n​\n\n**Additional********Paid-in**\n\n​\n\n**Treasury Stock**\n\n​\n\n**Accumulated********Other********Comprehensive**\n\n​\n\n**Accumulated**\n\n​\n\n**Total********Stockholders'**\n\n​\n\n**Shares**\n\n**  ​ ​ ​**\n\n**Amount**\n\n**  ​ ​ ​**\n\n**Capital**\n\n**  ​ ​ ​**\n\n**Shares**\n\n**  ​ ​ ​**\n\n**Amount**\n\n**  ​ ​ ​**\n\n**Loss**\n\n**  ​ ​ ​**\n\n**Deficit**\n\n**  ​ ​ ​**\n\n**Equity**\n\nBalances as of June 30, 2025\n\n27,083\n\n​\n\n$\n\n33\n\n​\n\n$\n\n411,253\n\n​\n\n6,154\n\n​\n\n$\n\n(38,812)\n\n​\n\n$\n\n(336)\n\n​\n\n$\n\n(291,407)\n\n​\n\n$\n\n80,731\n\nIssuance of common stock upon vesting of restricted stock units\n\n162\n\n​\n\n​\n\n—\n\n​\n\n​\n\n—\n\n​\n\n—\n\n​\n\n​\n\n—\n\n​\n\n​\n\n—\n\n​\n\n​\n\n—\n\n​\n\n​\n\n—\n\nIssuance of common stock upon exercise of stock options\n\n366\n\n​\n\n​\n\n1\n\n​\n\n​\n\n2,390\n\n​\n\n—\n\n​\n\n​\n\n—\n\n​\n\n​\n\n—\n\n​\n\n​\n\n—\n\n​\n\n​\n\n2,391\n\nIssuance of common stock in connection with employee stock purchase plan\n\n70\n\n​\n\n​\n\n—\n\n​\n\n​\n\n320\n\n​\n\n—\n\n​\n\n​\n\n—\n\n​\n\n​\n\n—\n\n​\n\n​\n\n—\n\n​\n\n​\n\n320\n\nIssuance of common stock warrant for services\n\n—\n\n​\n\n​\n\n—\n\n​\n\n​\n\n1,350\n\n​\n\n—\n\n​\n\n​\n\n—\n\n​\n\n​\n\n—\n\n​\n\n​\n\n—\n\n​\n\n​\n\n1,350\n\nRepurchase of common stock\n\n(231)\n\n​\n\n​\n\n—\n\n​\n\n​\n\n—\n\n​\n\n231\n\n​\n\n​\n\n(1,440)\n\n​\n\n​\n\n—\n\n​\n\n​\n\n—\n\n​\n\n​\n\n(1,440)\n\nStock-based compensation\n\n—\n\n​\n\n​\n\n—\n\n​\n\n​\n\n1,957\n\n​\n\n—\n\n​\n\n​\n\n—\n\n​\n\n​\n\n—\n\n​\n\n​\n\n—\n\n​\n\n​\n\n1,957\n\nForeign currency translation adjustments\n\n—\n\n​\n\n​\n\n—\n\n​\n\n​\n\n—\n\n​\n\n—\n\n​\n\n​\n\n—\n\n​\n\n​\n\n(1,324)\n\n​\n\n​\n\n—\n\n​\n\n​\n\n(1,324)\n\nNet income\n\n—\n\n​\n\n​\n\n—\n\n​\n\n​\n\n—\n\n​\n\n—\n\n​\n\n​\n\n—\n\n​\n\n​\n\n—\n\n​\n\n​\n\n7,572\n\n​\n\n​\n\n7,572\n\nBalances as of March 31, 2026\n\n27,450\n\n​\n\n$\n\n34\n\n​\n\n$\n\n417,270\n\n​\n\n6,385\n\n​\n\n$\n\n(40,252)\n\n​\n\n$\n\n(1,660)\n\n​\n\n$\n\n(283,835)\n\n​\n\n$\n\n91,557\n\n​\n\n​\n\n​\n\n​\n\n**See accompanying notes to condensed consolidated financial statements.**\n\n7\n\n[Table of Contents](#Toc)\n\n**EGAIN CORPORATION**\n\n**CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (cont.)**\n\n(in thousands)\n\n(unaudited)\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n**Nine Months Ended March 31, 2025**\n\n​\n\n**Common Stock**\n\n​\n\n**Additional Paid-in**\n\n​\n\n**Treasury Stock**\n\n​\n\n**Notes Receivable From**\n\n​\n\n**Accumulated**** ****Other********Comprehensive**\n\n​\n\n**Accumulated**\n\n​\n\n**Total Stockholders'**\n\n​\n\n**Shares**\n\n**  ​ ​ ​**\n\n**Amount**\n\n**  ​ ​ ​**\n\n**Capital**\n\n​\n\n**Shares**\n\n**  ​ ​ ​**\n\n**Amount**\n\n​\n\n**Stockholders**\n\n​\n\n**Loss**\n\n​\n\n**Deficit**\n\n​\n\n**Equity**\n\nBalances as of June 30, 2024\n\n29,160\n\n​\n\n$\n\n33\n\n​\n\n$\n\n407,416\n\n​\n\n3,538\n\n​\n\n$\n\n(23,031)\n\n​\n\n$\n\n(21)\n\n​\n\n$\n\n(2,240)\n\n​\n\n$\n\n(323,661)\n\n​\n\n$\n\n58,496\n\nIssuance of common stock upon exercise of stock options\n\n161\n\n​\n\n​\n\n—\n\n​\n\n​\n\n488\n\n​\n\n—\n\n​\n\n​\n\n—\n\n​\n\n​\n\n—\n\n​\n\n​\n\n—\n\n​\n\n​\n\n—\n\n​\n\n​\n\n488\n\nIssuance of common stock upon vesting of restricted stock units\n\n169\n\n​\n\n​\n\n—\n\n​\n\n​\n\n—\n\n​\n\n—\n\n​\n\n​\n\n—\n\n​\n\n​\n\n—\n\n​\n\n​\n\n—\n\n​\n\n​\n\n—\n\n​\n\n​\n\n—\n\nIssuance of common stock in connection with employee stock purchase plan\n\n94\n\n​\n\n​\n\n—\n\n​\n\n​\n\n424\n\n​\n\n—\n\n​\n\n​\n\n—\n\n​\n\n​\n\n—\n\n​\n\n​\n\n—\n\n​\n\n​\n\n—\n\n​\n\n​\n\n424\n\nRepurchase of common stock\n\n(1,986)\n\n​\n\n​\n\n—\n\n​\n\n​\n\n—\n\n​\n\n1,986\n\n​\n\n​\n\n(12,017)\n\n​\n\n​\n\n—\n\n​\n\n​\n\n—\n\n​\n\n​\n\n—\n\n​\n\n​\n\n(12,017)\n\nStock-based compensation\n\n—\n\n​\n\n​\n\n—\n\n​\n\n​\n\n1,953\n\n​\n\n—\n\n​\n\n​\n\n—\n\n​\n\n​\n\n—\n\n​\n\n​\n\n—\n\n​\n\n​\n\n—\n\n​\n\n​\n\n1,953\n\nForeign currency translation adjustments\n\n—\n\n​\n\n​\n\n—\n\n​\n\n​\n\n—\n\n​\n\n—\n\n​\n\n​\n\n—\n\n​\n\n​\n\n—\n\n​\n\n​\n\n853\n\n​\n\n​\n\n—\n\n​\n\n​\n\n853\n\nNet income\n\n—\n\n​\n\n​\n\n—\n\n​\n\n​\n\n—\n\n​\n\n—\n\n​\n\n​\n\n—\n\n​\n\n​\n\n—\n\n​\n\n​\n\n—\n\n​\n\n​\n\n1,389\n\n​\n\n​\n\n1,389\n\nBalances as of March 31, 2025\n\n27,598\n\n​\n\n$\n\n33\n\n​\n\n$\n\n410,281\n\n​\n\n5,524\n\n​\n\n$\n\n(35,048)\n\n​\n\n$\n\n(21)\n\n​\n\n$\n\n(1,387)\n\n​\n\n$\n\n(322,272)\n\n​\n\n$\n\n51,586\n\n​\n\n​\n\n​\n\n​\n\n**See accompanying notes to condensed consolidated financial statements.**\n\n​\n\n​\n\n8\n\n[Table of Contents](#Toc)\n\n**EGAIN CORPORATION**\n\n**CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS**\n\n(in thousands)\n\n(unaudited)\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n**Nine Months Ended**\n\n​\n\n​\n\n**March 31, **\n\n​\n\n**  ​ ​ ​**\n\n**2026**\n\n**  ​ ​ ​**\n\n**2025**\n\n**Cash flows from operating activities:**\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\nNet income\n\n​\n\n$\n\n7,572\n\n​\n\n$\n\n1,389\n\nAdjustments to reconcile net income to net cash provided by operating activities:\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\nAmortization of costs capitalized to obtain revenue contracts\n\n​\n\n \n\n907\n\n​\n\n \n\n1,046\n\nAmortization of right-of-use assets\n\n​\n\n​\n\n877\n\n​\n\n​\n\n803\n\nDepreciation and amortization\n\n​\n\n \n\n285\n\n​\n\n \n\n263\n\nProvision for credit losses\n\n​\n\n \n\n18\n\n​\n\n \n\n63\n\nDeferred income taxes\n\n​\n\n​\n\n164\n\n​\n\n​\n\n(250)\n\nStock-based compensation\n\n​\n\n \n\n1,957\n\n​\n\n \n\n1,953\n\nIssuance of common stock warrant for services\n\n​\n\n​\n\n1,350\n\n​\n\n​\n\n—\n\nGain on disposal of property and equipment\n\n​\n\n​\n\n—\n\n​\n\n​\n\n(5)\n\nChanges in operating assets and liabilities:\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\nAccounts receivable\n\n​\n\n \n\n23,853\n\n​\n\n \n\n19,422\n\nCosts capitalized to obtain revenue contracts\n\n​\n\n \n\n(491)\n\n​\n\n \n\n(542)\n\nPrepaid expenses\n\n​\n\n​\n\n1,153\n\n​\n\n​\n\n433\n\nOther current assets\n\n​\n\n \n\n18\n\n​\n\n \n\n248\n\nOther non-current assets\n\n​\n\n​\n\n(7)\n\n​\n\n​\n\n137\n\nAccounts payable\n\n​\n\n \n\n(1,585)\n\n​\n\n \n\n(763)\n\nAccrued compensation\n\n​\n\n \n\n(1,764)\n\n​\n\n \n\n(443)\n\nAccrued liabilities\n\n​\n\n \n\n1,184\n\n​\n\n \n\n(764)\n\nDeferred revenue\n\n​\n\n \n\n(16,159)\n\n​\n\n \n\n(12,758)\n\nOperating lease liabilities\n\n​\n\n​\n\n(742)\n\n​\n\n​\n\n(673)\n\nOther long-term liabilities\n\n​\n\n \n\n141\n\n​\n\n \n\n29\n\nNet cash provided by operating activities\n\n​\n\n \n\n18,731\n\n​\n\n \n\n9,588\n\n**Cash flows from investing activities:**\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\nPurchases of property and equipment\n\n​\n\n​\n\n(522)\n\n​\n\n \n\n(352)\n\nNet cash used in investing activities\n\n​\n\n \n\n(522)\n\n​\n\n \n\n(352)\n\n**Cash flows from financing activities:**\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\nProceeds from exercise of stock options\n\n​\n\n \n\n2,391\n\n​\n\n \n\n488\n\nProceeds from employee stock purchase plan\n\n​\n\n​\n\n320\n\n​\n\n​\n\n424\n\nRepurchases of common stock\n\n​\n\n​\n\n(1,440)\n\n​\n\n​\n\n(12,017)\n\nNet cash provided by (used in) financing activities\n\n​\n\n \n\n1,271\n\n​\n\n \n\n(11,105)\n\nEffect of change in exchange rates on cash and cash equivalents\n\n​\n\n \n\n(1,927)\n\n​\n\n \n\n603\n\nNet increase in cash, cash equivalents and restricted cash\n\n​\n\n \n\n17,553\n\n​\n\n \n\n(1,266)\n\nCash, cash equivalents and restricted cash at beginning of period\n\n​\n\n \n\n62,917\n\n​\n\n \n\n70,011\n\nCash, cash equivalents and restricted cash at end of period\n\n​\n\n$\n\n80,470\n\n​\n\n$\n\n68,745\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n**Supplemental cash flow disclosures:**\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\nCash paid for taxes\n\n​\n\n$\n\n427\n\n​\n\n$\n\n920\n\nRight-of-use (ROU) assets and lease liabilities recognized from lease modification\n\n​\n\n$\n\n338\n\n​\n\n$\n\n677\n\n**Non-cash items:**\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\nPurchases of equipment included in accounts payable\n\n​\n\n$\n\n8\n\n​\n\n$\n\n4\n\n​\n\n**See accompanying notes to condensed consolidated financial statements.**\n\n​\n\n9\n\n[Table of Contents](#Toc)\n\n**EGAIN CORPORATION**\n\n**NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**\n\n(unaudited)\n\n​\n\n**1. SUMMARY OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES**\n\n​\n\n**Organization and Nature of Business**\n\n​\n\neGain 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.\n\n​\n\n**Fiscal Year**\n\n​\n\nThe Company’s fiscal year ends on June 30. References to fiscal year 2026 refers to the Company’s fiscal year ending June 30, 2026. References to fiscal year 2025 refers to the Company’s fiscal year ended June 30, 2025.\n\n​\n\n**Basis of Presentation**\n\n​\n\nThe accompanying condensed consolidated balance sheet as of March 31, 2026 and the condensed consolidated statements of operations, comprehensive income, and stockholders’ equity for the three and nine months ended March 31, 2026 and cash flows for the nine months ended March 31, 2026 and 2025, are unaudited. The condensed consolidated balance sheet as of June 30, 2025 was derived from audited consolidated financial statements as of that date but does not include all the information and footnotes required by generally accepted accounting principles (GAAP) for complete financial statements.\n\n​\n\nCertain information and footnote disclosures, normally included in consolidated financial statements prepared in accordance with GAAP, have been condensed or omitted pursuant to such rules and regulations, although we believe that the disclosures made are adequate to make the information not misleading. In our opinion, the unaudited condensed consolidated financial statements reflect all adjustments (consisting only of normal recurring adjustments) necessary for a fair presentation of our financial position, results of operations, and cash flows for the periods presented.\n\n​\n\nThese condensed consolidated financial statements and notes should be read in conjunction with our audited consolidated financial statements and accompanying notes for the fiscal year ended June 30, 2025, included in our Annual Report on Form 10-K. The results of our operations for the interim periods presented are not necessarily indicative of results that may be expected for any other interim period or for the full fiscal year ending June 30, 2026.\n\n​\n\n**Principles of Consolidation**\n\n​\n\nWe prepared the condensed consolidated financial statements pursuant to the rules and regulations of the Securities and Exchange Commission (SEC) and included the accounts of our wholly-owned subsidiaries. All significant intercompany balances and transactions have been eliminated.\n\n​\n\n​\n\n10\n\n[Table of Contents](#Toc)\n\n**Use of Estimates**\n\n​\n\nThe preparation of financial statements requires us to make estimates and assumptions in the condensed consolidated financial statements and accompanying notes. Actual results could differ significantly from estimates. We make estimates that we believe to be reasonable based on historical experience and other assumptions. Significant estimates and assumptions made by management include the following:\n\n​\n\n●Standalone selling price (SSP) of performance obligations for contracts with multiple performance obligations;\n\n●Estimate of variable consideration for performance obligations in connection with Topic 606;\n\n●Period of benefit associated with capitalized costs to obtain revenue contracts;\n\n●Valuation, measurement and recognition of current and deferred income taxes;\n\n●Fair value of stock-based awards;\n\n●Fair value of warrants; and\n\n●Lease term and incremental borrowing rate for lease liabilities.\n\n​\n\n**Recent Accounting Pronouncements**\n\n​\n\n*Pronouncements Not Yet Adopted*\n\n​\n\nIn November 2024, the FASB issued ASU 2024-03, Income Statement-Reporting Comprehensive Income-Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses, which requires disaggregated disclosure of income statement expenses for public business entities. The objective of this guidance is to improve the disclosures about a public business entity’s expenses and address requests from investors for more detailed information about the types of expenses (including purchases of inventory, employee compensation, depreciation, amortization, and depletion) included in each relevant expense caption. This ASU is effective for fiscal years beginning after December 15, 2026 (our fiscal year 2028), and interim reporting periods beginning after December 15, 2027, with early and retrospective adoption permitted. We are currently evaluating the impact of this update on our condensed consolidated financial statements and related disclosures.\n\n​\n\n**Revenue Recognition**\n\n*Revenue Recognition Policy*\n\n​\n\nOur revenue is comprised of two categories including SaaS and professional services. SaaS revenue includes cloud delivery arrangements, term licenses, embedded original equipment manufacturer (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.\n\n​\n\n*Significant Judgment Applied in the Determination of Revenue Recognition*\n\n​\n\nWe enter into contractual arrangements with customers that may include promises to transfer multiple services, such as subscription, support, and professional services. With respect to our business, a performance obligation is a promise to transfer a service to a customer that is distinct. Significant judgment is required to determine whether services are distinct performance obligations that should be accounted for separately or combined as one unit of accounting. Additionally, significant judgment is required to determine the timing of revenue recognition.\n\n​\n\nWe allocate the transaction price to each performance obligation based on relative SSP. The SSP is the price at which we would sell a promised service separately to one of our customers. Judgment is required to determine the SSP for each distinct performance obligation.\n\n​\n\nWe determine the SSP by considering our pricing objectives in relation to market demand. Consideration is placed based on our history of discounting prices, size and volume of transactions involved, customer demographics and geographic locations, price lists, contract prices, and our market strategy.\n\n11\n\n[Table of Contents](#Toc)\n\n​\n\n*Determination of Revenue Recognition*\n\n​\n\nUnder Topic 606, we recognize revenue upon the transfer of control of promised services to our customers in the amount that is commensurate with the consideration that we expect to receive in exchange for those services. If consideration includes a variable amount in the arrangement, such as service level credits or contingent fees, then we include an estimate of the amount that we expect to receive for the total transaction price.\n\nThe amount of revenue that we recognize is based on (i) identifying the contract with a customer; (ii) identifying the performance obligations in the contract; (iii) determining the transaction price; (iv) allocating the transaction price to the performance obligations in the contract on a relative SSP basis; and (v) recognizing revenue when, or as, we satisfy each performance obligation in the contract typically through delivery or when control is transferred to the customer.\n\n​\n\n*SaaS Revenue*\n\n​\n\nThe following customer arrangements are recognized ratably over the contract term as the performance obligations are delivered:\n\n●Cloud delivery arrangements;\n\n●Maintenance and support arrangements; and\n\n●Term licenses which incorporate on-premise software licenses and a subscription to substantial cloud functionalities.\n\nFor contracts involving distinct software licenses, the license performance obligation is satisfied at a point in time when control is transferred to the customer.\n\nWe typically invoice our customers in advance upon execution of the contract or subsequent renewals with payment terms generally between 30 and 45 days. Invoiced amounts are recorded in accounts receivable, deferred revenue or revenue, depending if control transferred to our customers based on each arrangement.\n\n​\n\nWe 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 us with a combination of fixed fee and per agent fee, for each software license sold containing the embedded software. These embedded OEM royalties are included as SaaS revenue. Under Topic 606 revenue guidance, since these arrangements are for usage-based licenses of intellectual property, for which the guidance in paragraph ASC 606-10-55-65 applies, we estimate revenue recognized only as the performance obligation of the embedded OEM royalties has been satisfied or partially satisfied. Differences between actual results and estimated amounts are adjusted in the following period as such sales are reported by the customer with a quarter in arrears.\n\n​\n\n*Professional Services Revenue*\n\n​\n\nProfessional 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 at the earlier of satisfaction of discrete performance obligations, or as work is performed on a time and material basis. Managed services include a comprehensive set of processes and activities that range from implementation to monitoring the evolution and support of eGain 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 upon milestone billing or customer acceptance 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.\n\nTraining revenue that meets the criteria to be accounted for separately is recognized when training is provided.\n\n12\n\n[Table of Contents](#Toc)\n\n*Contracts with Multiple Performance Obligations*\n\n​\n\nThe Company enters into contracts that can include various combinations of subscriptions, professional services and maintenance and support, which are generally distinct and accounted for as separate performance obligations. For contracts with multiple performance obligations, the Company allocates the transaction price of the contract to each performance obligation on a relative basis using the respective SSP for each performance obligation.\n\n**Costs Capitalized to Obtain Revenue Contracts, Net**\n\n​\n\nUnder Topic 606, we capitalize incremental costs of obtaining non-cancelable subscription and support revenue contracts. 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.\n\n​\n\nCosts 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 historical and expected durations of our customer contracts, the expected useful lives of our technologies, and other factors. Commissions for renewal contracts relating to our cloud-based arrangements are expensed when incurred, as we do not consider renewal contracts to be commensurate with initial customer contracts. Historically, any commission associated with renewals have been immaterial. Amortization of costs to obtain revenue contracts is included as a component of sales and marketing expenses in our condensed consolidated statements of operations.\n\n​\n\nDuring the three and nine months ended March 31, 2026, we capitalized $194,000 and $491,000 of costs to obtain revenue contracts, respectively, and amortized $281,000 and $907,000 to sales and marketing expense, respectively.\n\n​\n\nDuring the three and nine months ended March 31, 2025, we capitalized $24,000 and $542,000 of costs to obtain revenue contracts, respectively, and amortized $362,000 and $1.0 million to sales and marketing expense, respectively.\n\n​\n\nCapitalized costs to obtain revenue contracts, net were $2.2 million and $2.6 million as of March 31, 2026 and June 30, 2025, respectively, on our condensed consolidated balance sheets.\n\n​\n\n**Deferred Revenue**\n\nDeferred revenue primarily consists of payments received in advance of revenue recognition from cloud, term and ratable licenses, and maintenance and support services and is recognized as the revenue recognition criteria are met. We generally invoice customers in annual or quarterly installments. The deferred revenue balance does not represent the total contract value of annual or multi-year, non-cancelable cloud or maintenance and support agreements. Deferred revenue is influenced by several factors, including seasonality, the compounding effects of renewals, invoice duration, invoice timing and new business linearity within the financial reporting period.\n\n​\n\n**Segment Information**\n\nWe operate in one segment - the development, license, implementation, and support of our customer service infrastructure software solutions. Operating segments are identified as components of an enterprise for which discrete financial information is available and regularly reviewed by our Chief Operating Decision-Maker (CODM) in order to make decisions about resources to be allocated to the segment and assess its performance. Our CODMs under ASC 280, Segment Reporting, are our executive management team. Our CODMs review financial information presented on a consolidated basis for purposes of making operating decisions and assessing financial performance. The CODMs regularly evaluate non-GAAP operating income, which is defined as income from operations as presented on the condensed consolidated statements of operations and adding back stock-based compensation, along with significant revenue and expense categories aligned with those presented on our condensed consolidated statement of operations, and the accounting policies governing our segment are the same as those described in Note 1, “Summary of Business and Significant Accounting Policies.”\n\n​\n\n13\n\n[Table of Contents](#Toc)\n\nOur revenue is derived from North America and combined Europe, Middle East, and Africa (EMEA) and is disclosed in Note 2. However, we incur operating expenses in the North America, EMEA, and Asia Pacific regions.\n\n​\n\nThe following table presents our income (loss) from operations among our three operating regions (in thousands):\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n**Three Months Ended**\n\n​\n\n**Nine Months Ended**\n\n​\n\n**March 31, **\n\n​\n\n**March 31, **\n\n​\n\n**2026**\n\n**  ​ ​ ​**\n\n**2025**\n\n​\n\n**2026**\n\n**  ​ ​ ​**\n\n**2025**\n\n**Income (loss) from operations:**\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\nNorth America\n\n$\n\n818\n\n​\n\n$\n\n(153)\n\n​\n\n$\n\n4,286\n\n​\n\n$\n\n215\n\nEurope, Middle East, & Africa\n\n \n\n2,820\n\n​\n\n \n\n1,636\n\n​\n\n \n\n7,341\n\n​\n\n \n\n5,797\n\nAsia Pacific\n\n \n\n(1,630)\n\n​\n\n \n\n(1,456)\n\n​\n\n \n\n(4,740)\n\n​\n\n \n\n(4,826)\n\nIncome from operations\n\n$\n\n2,008\n\n​\n\n$\n\n27\n\n​\n\n$\n\n6,887\n\n​\n\n$\n\n1,186\n\n​\n\nThe following table presents our long-lived assets, corresponding to our geographic areas are as follows (in thousands):\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n**March 31, **\n\n​\n\n**June 30, **\n\n​\n\n  ​ ​ ​\n\n**2026**\n\n**  ​ ​ ​**\n\n**2025**\n\n**Long-lived assets:**\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\nNorth America\n\n​\n\n$\n\n497\n\n​\n\n$\n\n390\n\nEurope, Middle East, & Africa\n\n​\n\n \n\n130\n\n​\n\n \n\n63\n\nAsia Pacific\n\n​\n\n \n\n253\n\n​\n\n \n\n217\n\nLong-lived assets\n\n​\n\n$\n\n880\n\n​\n\n$\n\n670\n\n​\n\nFor the purposes of entity-wide geographic area disclosures, long-lived assets consist of computers and equipment, furniture and fixtures, and leasehold improvements, net of accumulated depreciation and amortization. These items are included in property and equipment, net, on the accompanying Company’s condensed consolidated balance sheets.\n\n​\n\n**Concentration of Credit Risk and Significant Customers**\n\n​\n\nOur financial instruments that are exposed to concentrations of credit risk include cash and cash equivalents, restricted cash, and accounts receivable. We complement direct sales with resell partnerships based on product connectors into cloud contact center platforms. We also partner with system integrators and managed service providers. One customer accounted for more than 10% of total revenue during the three and nine months ended March 31, 2026 and 2025. One customer accounted for 10% or more of our accounts receivable balance, less provision for credit losses, as of March 31, 2026. Three customers accounted for 10% or more of our accounts receivable balance, less provision for credit losses, as of June 30, 2025.\n\n****​\n\n​\n\n14\n\n[Table of Contents](#Toc)\n\n**Accounts Receivable and Provision for Credit Losses**\n\n​\n\nWe 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.\n\n​\n\nIn certain revenue contracts, contractual billings 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 becomes billable upon certain criteria being met. Unbilled accounts receivables, for which the Company has the unconditional right to consideration, totaled $1.5 million and $1.4 million, as of March 31, 2026 and June 30, 2025, respectively, and are included in the accounts receivable, less provision for credit losses balance on the accompanying condensed consolidated balance sheets.\n\n​\n\n**Stock-Based Compensation**\n\n​\n\nWe account for stock-based compensation in accordance with 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 expense over the vesting period, net of expected forfeitures. Stock-based compensation expense consists of expenses for stock options, restricted stock units (RSUs), and discounted employee common stock granted under our Amended and Restated 2005 Management Stock Option Plan, our Amended and Restated 2005 Stock Incentive Plan, and our 2017 Employee Stock Purchase Plan (ESPP).\n\n​\n\nThe ESPP provides that eligible employees may purchase the Company’s common stock through payroll deductions at a price equal to 85% of the lower of the fair market value at the entry date of the applicable offering period or at the end of each applicable purchasing period. The offering period, meaning a period with respect to which the right to purchase shares of our common stock may be granted under the ESPP, will not exceed twenty-seven months and consist of a series of six-month purchase periods. Eligible employees may join the ESPP at the beginning of any six-month purchase period. Under the terms of the ESPP, employees can choose to have between 1% and 15% of their base earnings withheld to purchase the Company’s common stock.  \n\n​\n\nDetermining 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 term.\n\n​\n\nBelow is a summary of stock-based compensation included in the costs and expenses (in thousands):\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n**Three Months Ended**\n\n​\n\n**Nine Months Ended**\n\n​\n\n​\n\n**March 31, **\n\n​\n\n**March 31, **\n\n​\n\n**  ​ ​ ​**\n\n**2026**\n\n**  ​ ​ ​**\n\n**2025**\n\n​\n\n**2026**\n\n**  ​ ​ ​**\n\n**2025**\n\n**Stock-based compensation expense:**\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\nCost of revenue\n\n​\n\n$\n\n149\n\n​\n\n$\n\n217\n\n​\n\n$\n\n377\n\n​\n\n$\n\n679\n\nResearch and development\n\n​\n\n \n\n369\n\n​\n\n \n\n272\n\n​\n\n \n\n912\n\n​\n\n \n\n523\n\nSales and marketing\n\n​\n\n \n\n156\n\n​\n\n \n\n98\n\n​\n\n \n\n382\n\n​\n\n \n\n277\n\nGeneral and administrative\n\n​\n\n \n\n115\n\n​\n\n \n\n112\n\n​\n\n \n\n286\n\n​\n\n \n\n474\n\nTotal stock-based compensation expense\n\n​\n\n$\n\n789\n\n​\n\n$\n\n699\n\n​\n\n$\n\n1,957\n\n​\n\n$\n\n1,953\n\n​\n\n15\n\n[Table of Contents](#Toc)\n\nTotal stock-based compensation includes expenses related to non-employee awards of $2,900 and $8,500 during the three and nine months ended March 31, 2026, respectively. Total stock-based compensation includes expenses related to non-employee awards of $11,000 and $42,000 during the three and nine months ended March 31, 2025, respectively.\n\n​\n\nTotal stock-based compensation includes expenses related to the ESPP of $93,000 and $221,000 for the three and nine months ended March 31, 2026, respectively. Total stock-based compensation includes expenses related to the ESPP of $84,000 and $245,000 for the three and nine months ended March 31, 2025, respectively.\n\n​\n\nWe utilize the Black-Scholes valuation model for estimating the fair value of the stock-based compensation of options granted and ESPP stock purchase rights. We estimate the fair value for stock based RSU awards based on the closing market price of grant date. All shares of our common stock issued pursuant to our stock option, RSUs, and ESPP plans are only issued out of an authorized reserve of shares of common stock which were previously registered with the SEC on Registration Statements on Form S-8.\n\n​\n\nDuring the three months ended March 31, 2026 and 2025, we granted options to purchase 280,416 and 149,700 shares of common stock with a weighted-average grant date fair value of $4.90 and $2.52 per share, respectively.\n\n​\n\nDuring the nine months ended March 31, 2026 and 2025, we granted options to purchase 499,916 and 513,467 shares of common stock with a weighted-average grant date fair value of $4.93 and $2.66 per share, respectively.\n\n​\n\nWe used the following weighted-average assumptions as inputs into the Black-Scholes valuation model to estimate the fair value of the options granted:\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n**Three Months Ended**\n\n​\n\n**Nine Months Ended**\n\n​\n\n​\n\n**March 31, **\n\n​\n\n**March 31, **\n\n​\n\n**  ​ ​ ​**\n\n**2026**\n\n​\n\n**2025**\n\n​\n\n**2026**\n\n​\n\n**2025**\n\nExpected volatility\n\n​\n\n55\n\n%  \n\n​\n\n53\n\n%  \n\n​\n\n54\n\n%  \n\n​\n\n54\n\n%\n\nAverage risk-free interest rate\n\n​\n\n3.77\n\n%  \n\n​\n\n4.25\n\n%  \n\n​\n\n3.76\n\n%  \n\n​\n\n4.15\n\n%\n\nExpected life (in years)\n\n​\n\n4.53\n\n​\n\n​\n\n4.55\n\n​\n\n​\n\n4.52\n\n​\n\n​\n\n4.56\n\n​\n\nDividend yield\n\n​\n\n—\n\n​\n\n​\n\n—\n\n​\n\n​\n\n—\n\n​\n\n​\n\n—\n\n​\n\n​\n\nThe dividend yield of zero is based on the fact that we have never paid cash dividends and have no present intention to pay cash dividends. We determined 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 deemed to be non-recurring and non-indicative of future events. The risk-free interest rate is derived from the average U.S. Treasury Strips rate with maturities approximating the expected lives of the awards during the period, which approximate the rate in effect at the time of the grant.\n\n​\n\nOn December 1, 2025, certain employees were granted the right to purchase an aggregate of 60,914 shares under the ESPP. Related stock-based compensation expense for the three and nine months ended March 31, 2026 was $93,000 and $124,000, respectively.\n\nOn December 1, 2024, certain employees were granted the right to purchase an aggregate of 103,618 shares under the ESPP. Related stock-based compensation expense for the three and nine months ended March 31, 2025 was $84,000 and $115,000, respectively.\n\n​\n\nAs of March 31, 2026, there were 519,491 shares of common stock available for issuance under the ESPP.  \n\n​\n\nWe base our estimate of expected life of a stock option on the historical exercise behavior and cancellations of all past option grants made by the Company during the time period which its equity shares have been publicly traded, the contractual term of the option, the vesting period and the expected remaining term of the outstanding options.\n\n​\n\nIn accordance with ASU 2016-09, *Compensation—Stock Compensation: Improvements to Employee Share-Based Accounting*, we elected to continue to estimate forfeitures in the calculation of stock-based compensation expense.\n\n16\n\n[Table of Contents](#Toc)\n\n​\n\nAs of March 31, 2026, there was approximately $1.9 million of total unrecognized compensation cost, net of expected forfeitures, related to unvested stock options, which is expected to be recognized over the weighted-average period of 1.60 years. There were 69,205 and 11,800 options exercised during the three months ended March 31, 2026 and 2025, respectively. There were 365,929 and 161,117 options exercised during the nine months ended March 31, 2026 and 2025, respectively.\n\n​\n\nAs of March 31, 2026, there was approximately $875,000 of total unrecognized compensation cost, net of expected forfeitures, related to unvested RSUs, which is expected to be recognized over the weighted-average period of 0.63 years. There were no RSUs granted during the three months ended March 31, 2026 and 2025. There were 123,767 and 226,654 RSUs granted during the nine months ended March 31, 2026 and 2025, with a weighted average grant date fair value of $13.58 and $5.71 per share, respectively.\n\n​\n\n**Warrants**\n\n​\n\nWe account for warrants as either equity-classified or liability-classified instruments based on an assessment of the warrant’s specific terms and applicable authoritative guidance in FASB ASC Topic 480, *Distinguishing Liabilities from Equity*, and ASC Topic 815, *Derivatives and Hedging*. The assessment considers whether the warrants are freestanding financial instruments pursuant to ASC Topic 480, meet the definition of a liability pursuant to ASC 480, and whether the warrants meet all of the requirements for equity classification under ASC Topic 815, including whether the warrants are indexed to our own common stock and whether the warrant holders require mandatory cash settlement, among other conditions for equity classification. This assessment, which requires the use of professional judgment, is conducted at the time of warrant issuance.\n\n​\n\nFor warrants that meet all of the criteria for equity classification, the warrants are recorded as a component of additional paid-in capital at the time of issuance. The grant date fair value of the warrants were estimated using a Black-Scholes valuation model.\n\n​\n\n**Leases**\n\n​\n\nLease agreements are evaluated to determine whether an arrangement is or contains a lease in accordance with ASC 842, *Leases*.\n\n​\n\nOperating leases are included in operating lease right-of-use (ROU) assets, current operating lease liabilities, and noncurrent operating lease liabilities in the condensed consolidated financial statements. ROU assets represent the Company’s right to use leased assets over the agreed upon term. Lease liabilities represent the Company’s contractual obligation to make lease payments over the lease term.\n\n​\n\nFor operating leases, ROU assets and lease liabilities are recognized at the commencement date of the lease. The lease liability is measured as the present value of the lease payments over the lease term, using the rate implicit in the lease if readily determinable. If the rate implicit in the lease cannot be readily determined, the Company uses its incremental borrowing rate at lease commencement. The operating lease ROU assets are calculated as the present value of the remaining lease payments plus unamortized initial direct costs and any prepayments, less unamortized lease incentives received.\n\n​\n\nOperating leases typically include non-lease components such as common-area maintenance costs. We have elected to include non-lease components with lease payments for the purpose of calculating lease ROU assets and liabilities, to the extent that they are fixed. Non-lease component payments that are not fixed are expensed as incurred as variable lease payments.\n\n​\n\nLease terms may include renewal or extension options to the extent they are reasonably certain to be exercised. The assessment of whether renewal or extension options are reasonably certain to be exercised is made at lease commencement. Factors considered in determining whether an option is reasonably certain of exercise include, but are not limited to, the value of any leasehold improvements, the value of renewal rates compared to market rates, and the presence of factors that\n\n17\n\n[Table of Contents](#Toc)\n\nwould cause a significant economic penalty to the Company if the option were not exercised. Lease expense is recognized on a straight-line basis over the lease term. The Company has elected not to recognize ROU assets and obligations for leases with an initial term of twelve months or less, and has applied a capitalization threshold to recognize a lease on the condensed consolidated balance sheet. The expense associated with short-term leases and leases that do not meet the Company’s capitalization threshold are recorded to lease expense in the period it is incurred.  \n\n​\n\n**Goodwill**\n\n​\n\nWe 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 indicators of impairment during the three and nine months ended March 31, 2026.\n\n​\n\n​\n\n**2. REVENUE RECOGNITION**\n\n​\n\n*Disaggregation of Revenue*\n\nThe following table presents our revenue recognized over-time and at a point-in-time during the three and nine months ended March 31, 2026 and 2025, respectively (in thousands):\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n**Three Months Ended**\n\n​\n\n​\n\n**Nine Months Ended**\n\n​\n\n​\n\n**March 31, **\n\n​\n\n​\n\n**March 31, **\n\n​\n\n**2026**\n\n​\n\n**2025**\n\n​\n\n**2026**\n\n​\n\n**2025**\n\n**Revenue:**\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\nOver-time\n\n$\n\n21,183\n\n​\n\n$\n\n19,977\n\n​\n\n$\n\n65,068\n\n​\n\n$\n\n60,829\n\nPoint-in-time\n\n​\n\n1,316\n\n​\n\n​\n\n1,032\n\n​\n\n​\n\n3,918\n\n​\n\n​\n\n4,368\n\nTotal revenue\n\n$\n\n22,499\n\n​\n\n$\n\n21,009\n\n​\n\n$\n\n68,986\n\n​\n\n$\n\n65,197\n\n​\n\nThe following table presents our revenue by geography. Revenue by geography is generally determined on the region of our contracting entity rather than the region of our customer. The relative proportion of our total revenue between each geographic region as presented in the table below was materially consistent across each of our operating regions’ revenue for the periods presented (in thousands):\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n**Three Months Ended**\n\n​\n\n**Nine Months Ended**\n\n​\n\n**March 31, **\n\n​\n\n**March 31, **\n\n​\n\n**2026**\n\n**  ​ ​ ​**\n\n**2025**\n\n​\n\n**2026**\n\n**  ​ ​ ​**\n\n**2025**\n\n**Revenue:**\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\nNorth America\n\n$\n\n17,584\n\n​\n\n$\n\n16,452\n\n​\n\n$\n\n54,899\n\n​\n\n$\n\n50,205\n\nEurope, Middle East, & Africa\n\n​\n\n4,915\n\n​\n\n \n\n4,557\n\n​\n\n \n\n14,087\n\n​\n\n \n\n14,992\n\nTotal revenue\n\n$\n\n22,499\n\n​\n\n$\n\n21,009\n\n​\n\n$\n\n68,986\n\n​\n\n$\n\n65,197\n\n​\n\n*Contract Balances*\n\nContract assets, if any, consist of unbilled receivables for completed performance obligations which have not been invoiced, and for which we do not have an unconditional right to consideration. Unbilled receivables are included in accounts receivable, less provision for credit losses on our condensed consolidated balance sheets. Contract liabilities consist of deferred revenue for which we have an obligation to transfer services to customers and have received consideration in advance or the amount is due from customers. Once the obligations are fulfilled, then deferred revenue is recognized to revenue in the respective period.\n\n18\n\n[Table of Contents](#Toc)\n\n​\n\nThe following table presents our contract liabilities (in thousands):\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n  ​ ​ ​\n\n**March 31, 2026**\n\n​\n\n**June 30, 2025**\n\n**Contract liabilities:**\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\nDeferred revenue\n\n​\n\n$\n\n31,872\n\n​\n\n$\n\n48,765\n\nDeferred revenue, net of current portion\n\n​\n\n​\n\n2,180\n\n​\n\n \n\n1,766\n\nTotal deferred revenue\n\n​\n\n$\n\n34,052\n\n​\n\n$\n\n50,531\n\n​\n\n$8.9 million and $41.8 million of deferred revenue as of June 30, 2025 was recognized as revenue during the three and nine months ended March 31, 2026, respectively.\n\n*Remaining Performance Obligations*\n\nRemaining performance obligations represent contracted revenue that has not yet been recognized, and include deferred revenue, invoices that have been issued to customers but are uncollected and not yet recognized as revenue, and 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 March 31, 2026, our remaining performance obligations were $74.1 million, of which we expect to recognize $48.5 million and $25.6 million as revenue within one year and beyond one year, respectively.\n\n​\n\n**3. EARNINGS PER SHARE**\n\n​\n\nBasic earnings per share is computed using the weighted-average number of shares of common stock outstanding. In periods where net income is reported, the weighted-average number of shares is increased by stock options in the money, shares issuable for RSUs subject to service-based vesting requirements, and the warrants in the money to calculate diluted earnings per share.\n\n​\n\nThe following table represents the calculation of basic and diluted earnings per share (unaudited; in thousands, except per share data):\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n**Three Months Ended**\n\n​\n\n**Nine Months Ended**\n\n​\n\n​\n\n**March 31, **\n\n​\n\n**March 31, **\n\n​\n\n​\n\n**2026**\n\n​\n\n**2025**\n\n​\n\n**2026**\n\n​\n\n**2025**\n\nNet income\n\n  ​ ​ ​\n\n$\n\n2,416\n\n  ​ ​ ​\n\n$\n\n66\n\n​\n\n$\n\n7,572\n\n  ​ ​ ​\n\n$\n\n1,389\n\n**Per share information:**\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\nEarnings per share:\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\nBasic\n\n​\n\n$\n\n0.09\n\n​\n\n$\n\n0.00\n\n​\n\n$\n\n0.28\n\n​\n\n$\n\n0.05\n\nDiluted\n\n​\n\n$\n\n0.09\n\n​\n\n$\n\n0.00\n\n​\n\n$\n\n0.27\n\n​\n\n$\n\n0.05\n\nWeighted-average shares used in computation:\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\nBasic\n\n​\n\n \n\n27,420\n\n​\n\n \n\n28,065\n\n​\n\n \n\n27,187\n\n​\n\n \n\n28,439\n\nEffect of dilutive instruments\n\n​\n\n​\n\n720\n\n​\n\n​\n\n417\n\n​\n\n​\n\n768\n\n​\n\n​\n\n510\n\nDiluted\n\n​\n\n \n\n28,140\n\n​\n\n \n\n28,482\n\n​\n\n \n\n27,955\n\n​\n\n \n\n28,949\n\n​\n\nWeighted-average shares of stock options to purchase 2,415,544 and 3,527,358 shares of common stock for the three months ended March 31, 2026 and 2025, respectively, and weighted-average shares of stock options to purchase 2,367,628 and 3,458,061 shares of common stock for the nine months ended March 31, 2026 and 2025, respectively, were not included in the computation of diluted earnings per share due to their anti-dilutive effect. Such securities could have a dilutive effect in future periods.\n\n​\n\n​\n\n​\n\n19\n\n[Table of Contents](#Toc)\n\n**4. INCOME TAXES**\n\n​\n\nIncome taxes are accounted for using the asset and liability method in accordance with ASC 740, Income Taxes. Under this method, deferred tax liabilities and assets are recognized for the estimated future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. For the legacy eGain business in the United States, based upon the weight of available evidence, which includes our historical operating performance, our future investment plans, and the uncertainty in the current market and economic environment, we  have determined that it is more likely than not that we will be able to utilize the deferred tax assets and as such, do not have a valuation allowance against our net deferred tax assets except for the California net operating losses and research and development credits. For the legacy eGain business in the United Kingdom, based on the positive evidence, the Company has determined it would be able to utilize the deferred tax assets and does not have a valuation allowance against the deferred tax assets. The remaining eGain foreign operations, including its wholly-owned subsidiary Exony Limited, have historically been profitable and we believe it is more likely than not that those assets will be realized. Our tax provision primarily relates to federal, foreign, and state income taxes. Our income tax rate differs from the statutory tax rates primarily due to stock-based compensation, research and development tax credits, and our foreign operations.\n\nWe account for uncertain tax positions according to the provisions of ASC 740. ASC 740 contains a two-step approach for recognizing and measuring uncertain tax positions. Tax positions are evaluated for recognition by determining if the weight of available evidence indicates that it is probable that the position will be sustained on audit, including resolution of related appeals or litigation. Tax benefits are then measured as the largest amount which is more than 50% likely of being realized upon ultimate settlement. We consider many factors when evaluating and estimating tax positions and tax benefits, which may require periodic adjustments and which may not accurately anticipate actual outcomes.\n\n​\n\nAs of March 31, 2026, utilization of the net operating loss (NOL) or tax credit carryforwards to offset future taxable income and taxes, respectively, are subject to an annual limitation under the Internal Revenue Code of 1986 and similar state provisions, which is determined by first multiplying the value of the Company’s stock at the time of the ownership change by the applicable long-term, tax-exempt rate, and then could be subject to additional adjustments such as built in gain or built in loss, as required. Any limitation may result in expiration of all or a portion of its NOL and or tax credit carryforwards before utilization. The Company has not identified a change in ownership as of March 31, 2026 that would significantly limit the NOL carryovers.\n\n​\n\n**5. LEASES**\n\n​\n\nWe lease our office facilities under non-cancelable operating leases that expire on various dates through fiscal year 2033. On September 29, 2025, the Company entered into a lease agreement in Sunnyvale, California. The term of the lease expires on March 31, 2027 and requires an average monthly rent of approximately $21,000 for 18 months from the lease commencement date in October 2025. In January 2026, the Company entered into a sublease agreement as a sublessor for a certain office space and which sublease agreement is set to expire in January 2031. All of our office leases are classified as operating leases with lease expense recognized on a straight-line basis over the lease term. Lease ROU assets and liabilities are recognized on the commencement date at the present value of lease payments over the lease term. As our leases do not provide an implicit rate, we use our incremental borrowing rate based on information available at the commencement date to determine the present value of lease payments.\n\n​\n\nTotal operating lease costs were $383,000 and $330,000 for the three months ended March 31, 2026 and 2025, respectively. Total operating lease costs were $1.1 million and $1.0 million for the nine months ended March 31, 2026 and 2025, respectively.\n\n​\n\nOperating lease amounts above do not include sublease income. The Company recognized sublease income of $17,000 for the three and nine months ended March 31, 2026.\n\n​\n\nFor the three and nine months ended March 31, 2026, operating cash outflows for operating leases were $386,000 and $961,000, respectively. For the three and nine months ended March 31, 2025, operating cash outflows for operating leases were $287,000 and $883,000, respectively.\n\n20\n\n[Table of Contents](#Toc)\n\nThe following tables present information about leases on our condensed consolidated balance sheets (in thousands):\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n**March 31, **\n\n​\n\n**June 30, **\n\n​\n\n​\n\n**2026**\n\n​\n\n**2025**\n\n**Assets:**\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\nOperating lease right-of-use assets\n\n​\n\n$\n\n2,862\n\n​\n\n$\n\n3,530\n\n**Liabilities:**\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\nOperating lease liabilities\n\n​\n\n​\n\n1,505\n\n​\n\n​\n\n1,220\n\nOperating lease liabilities, net of current portion\n\n​\n\n​\n\n1,630\n\n​\n\n​\n\n2,449\n\n​\n\nThe following table presents information about the weighted average lease term and discount rate as follows:\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n**March 31, **\n\n​\n\n**June 30, **\n\n​\n\n​\n\n**2026**\n\n​\n\n**2025**\n\nWeighted average remaining lease term (in years)\n\n​\n\n4.69\n\n​\n\n​\n\n5.14\n\n​\n\nWeighted average discount rate\n\n​\n\n8.61\n\n%\n\n​\n\n8.41\n\n%\n\n​\n\nAs of March 31, 2026, remaining maturities of lease liabilities are as follows (in thousands):\n\n​\n\n​\n\n​\n\n​\n\n​\n\n**Fiscal Period:**\n\n​\n\n​\n\n​\n\nRemaining three months of fiscal year 2026\n\n​\n\n$\n\n378\n\nFiscal year 2027\n\n​\n\n​\n\n1,289\n\nFiscal year 2028\n\n​\n\n \n\n555\n\nFiscal year 2029\n\n​\n\n \n\n403\n\nFiscal year 2030\n\n​\n\n​\n\n291\n\nFiscal year 2031\n\n​\n\n​\n\n291\n\nFiscal year 2032 and thereafter\n\n​\n\n​\n\n725\n\nTotal minimum lease payments\n\n​\n\n​\n\n3,932\n\nLess: Imputed interest\n\n​\n\n​\n\n(797)\n\nTotal operating lease liabilities\n\n​\n\n​\n\n3,135\n\nLess: Current operating lease liabilities\n\n​\n\n​\n\n(1,505)\n\nTotal operating lease liabilities, net of current portion\n\n​\n\n$\n\n1,630\n\n​\n\n​\n\n**6. COMMITMENTS AND CONTINGENCIES**\n\n​\n\n*Litigation*\n\n​\n\nIn the ordinary course of business, we are involved in various legal proceedings and claims related to alleged infringement of intellectual property rights, commercial, corporate and securities, labor and employment, wage and hour, and other claims that are not expected to have a material impact on our business or our condensed consolidated financial statements. We have been, and may in the future be, put on notice and/or sued by third parties for alleged infringement of their proprietary rights, including patent infringement.\n\n​\n\nWe evaluate all claims and lawsuits with respect to their potential merits, our potential defenses and counterclaims, settlement or litigation potential and the expected effect on us. Our technologies may be subject to injunction if they are found to infringe the rights of a third-party. In addition, our agreements require us to indemnify our customers for third-party intellectual property infringement claims, which could increase the cost to us of an adverse ruling on such a claim.\n\n21\n\n[Table of Contents](#Toc)\n\n​\n\n*Warranty*\n\n​\n\nWe generally warrant that the program portion of our software will perform substantially in accordance with certain specifications for a period up to one year from the date of delivery. Our liability for a breach of this warranty is either a return of the license fee or providing a fix, patch, work-around or replacement of the software.\n\n​\n\nWe also provide standard warranties against and indemnification for the potential infringement of third-party intellectual property rights to our customers relating to the use of our products, as well as indemnification agreements with certain officers and employees under which we may be required to indemnify such persons for liabilities arising out of their duties to us. The terms of such obligations vary. Generally, the maximum obligation is the amount permitted by law. Historically, cost related to these warranties have not been significant. However, we cannot guarantee that a warranty reserve will not become necessary in the future.\n\n​\n\n*Indemnification*\n\n​\n\nWe have agreed to indemnify our directors and executive officers for costs associated with any fees, expenses, judgments, fines and settlement amounts incurred by any of these persons in any action or proceeding to which any of those persons is, or is threatened to be, made a party by reason of the person’s service as a director or officer, including any action by us, arising out of that person’s services as our director or officer or that person’s services provided to any other company or enterprise at our request.\n\n​\n\n*Transfer Pricing*\n\n​\n\nWe have received transfer-pricing assessments from tax authorities with regard to transfer pricing issues for certain fiscal years, which we have appealed with the appropriate authority. We review the status of each significant matter and assess its potential financial exposure. We believe that such assessments are without merit and would not have a significant impact on our condensed consolidated financial statements.\n\n​\n\n*Contractual Commitments*\n\n​\n\nOur principal contractual 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*.\n\n​\n\n**7. FAIR VALUE MEASUREMENT**\n\n​\n\nASC 820, *Fair Value Measurement* (ASC 820), defines fair value, establishes a framework for measuring fair value of assets and liabilities, and expands disclosures about fair value measurements. Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability in the principal or most advantageous market for the assets or liabilities in an orderly transaction between market participants on the measurement date. Subsequent changes in fair value of these financial assets and liabilities are recognized in earnings or other comprehensive income when they occur. ASC 820 applies whenever other statements require or permit assets or liabilities to be measured at fair value.\n\n​\n\nASC 820 includes a fair value hierarchy, of which the first two are considered observable and the last unobservable, that is intended to increase the consistency and comparability in fair value measurements and related disclosures. Valuation techniques used to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs. Observable inputs reflect assumptions market participants would use in pricing an asset or liability based on market data obtained from independent sources while unobservable inputs reflect a reporting entity’s pricing based upon their own market assumptions.\n\n​\n\n22\n\n[Table of Contents](#Toc)\n\nThe fair value hierarchy consists of the following three levels:\n\n​\n\nLevel 1 – instrument valuations are obtained from real-time quotes for transactions in active exchange markets involving identical assets.\n\n​\n\nLevel 2 – instrument valuations are obtained from readily-available pricing sources for comparable instruments.\n\n​\n\nLevel 3 – instrument valuations are obtained without observable market value and require a high level of judgment to determine the fair value.\n\n​\n\nOur money market funds are measured at fair value on a recurring basis based on quoted market prices in active markets and are classified as level 1 within the fair value hierarchy. As of March 31, 2026 and June 30, 2025, cash equivalents classified as level 1 instruments, including money market account investments, were measured at $59.6 million and $43.0 million, respectively.\n\n​\n\n**8. SHARE REPURCHASE PROGRAM**\n\n​\n\nOn November 14, 2022, eGain’s Board of Directors authorized a stock repurchase program under which the Company may purchase up to $20 million of its own outstanding common stock. In May 2024 and again in September 2025, the Board of Directors approved a $20 million increase in its stock repurchase program, bringing the aggregate amount eGain may purchase thereunder from $20 million to $60 million of its outstanding common stock. As of March 31, 2026, approximately $19.7 million remained available for stock repurchases pursuant to our stock repurchase program.\n\n​\n\nUnder the stock repurchase program, we may purchase shares of common stock on a discretionary basis from time to time through open market transactions or privately negotiated transactions at prices deemed appropriate by us. In addition, at the discretion of eGain, open market repurchase of common stock may also be made under a Rule 10b5-1 plan, which would permit common stock to be repurchased when the Company might otherwise be precluded from doing so under its insider trading laws or self-imposed trading restrictions.\n\n​\n\nThe timing and number of shares repurchased will be determined based on an evaluation of market conditions and other factors, including stock price, trading volume, general business and market conditions, and the availability of capital. On September 3, 2025, the Board of Directors also approved to extend the stock repurchase program until the earlier of (i) the date the aggregate amount of shares that can be repurchased under the stock repurchase program have been repurchased and (ii) the date the Board of Directors decides to terminate the stock repurchase program. The stock repurchase program does not obligate us to acquire a specified number of shares and may be modified, suspended, or discontinued at any time at our discretion without notice. The stock repurchase program will be funded using existing cash or future cash flows. During the three months ended March 31, 2026, there were no share repurchases. During the nine months ended March 31, 2026, 230,734 shares have been repurchased for an average acquisition cost per share of $6.24, totaling $1.4 million. We intend to reissue repurchased shares at a later date and therefore carry the shares as treasury stock, at cost.\n\n​\n\n**9. WARRANTS**\n\n​\n\nOn August 14, 2025, the Company issued a warrant (Warrant) to JPMC Strategic Investments I Corporation (JPMC) to acquire 500,000 shares of the Company’s common stock at an exercise price of $7.10 per share. The fully vested Warrant was issued without cash consideration and is exercisable through the fifth anniversary of issuance. The offer and issuance of the Warrant is expected to be exempt from registration under the Securities Act of 1933 (Securities Act), pursuant to Section 4(a)(2) of the Securities Act. JPMC has represented to the Company that it is an “accredited investor” as defined in Regulation D and that the Warrant is being acquired for investment purposes and not with a view to, or for sale in connection with, any distribution thereof.\n\n​\n\nThe Warrant was first evaluated under ASC Topic 480, *Distinguishing Liabilities from Equity*, and determined that it does not meet the criteria for a liability classification. The Warrant was then evaluated under ASC 815-40, *Derivatives and Hedging—Contracts in Entity’s Own Equity*, and determined to be an equity-classified instrument. Accordingly, the fair value of the warrant at grant date was recognized in additional paid-in capital within stockholders’ equity.\n\n23\n\n[Table of Contents](#Toc)\n\n​\n\nThe grant-date fair value of the Warrant was estimated at $2.70 per warrant using the Black-Scholes valuation model with the following assumptions: expected volatility of 54%, risk-free interest rate of 2.87%, expected term of 5 years, and no expected dividends. No warrant expenses were recognized during the three months ended March 31, 2026. The total fair value of the Warrant was $1.4 million and was recognized as a non-cash general and administrative expense during the nine months ended March 31, 2026.\n\n​\n\nNo warrants were exercised or expired during the three and nine months ended March 31, 2026.\n\n​\n\n**Item ****2. Management’s Discussion and Analysis****of Financial Condition and Results of Operations**\n\n​\n\n*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.*\n\n*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:*\n\n●*our belief that it is useful to exclude certain non-cash charges and non-core operational charges from non-GAAP operating income;*\n\n●*our expectation that SaaS revenue will continue to increase;*\n\n●*expected benefits of our solutions;*\n\n●*our value proposition;*\n\n●*our market opportunities;*\n\n●*customer and market expectations in the market in which we operate, and our ability to meet expectations and satisfy such needs;*\n\n●*our lengthy sales cycles and the difficulty in predicting timing of sales or delays;*\n\n●*our expectations with respect to revenue, cost of revenue, expenses and other financial metrics;*\n\n●*our business plans, strategies, target, goals and outlook;*\n\n●*changes in technology, including artificial intelligence (AI) technology and services;*\n\n●*our expectations related to our product development plan;*\n\n●*competition in the markets in which we do business and our competitive advantages;*\n\n●*our beliefs regarding our prospects for our business;*\n\n●*changes in demand for our solutions;*\n\n●*our expectations regarding the composition of our customers;*\n\n●*our reliance on strategic and third-party distribution partnerships;*\n\n●*the risk of unauthorized access to a customer’s data or our data or our IT systems and cybersecurity attacks;*\n\n●*our ability to timely adapt and comply with changing European regulatory and political environments;*\n\n24\n\n[Table of Contents](#Toc)\n\n●*the effect of recent changes in U.S. tax legislation;*\n\n●*the effect of compliance with privacy laws and regulations on our business and our customers;*\n\n●*the effect of recent changes to trade policies;*\n\n●*our ability to take adequate precautions against claims or lawsuits made by third parties, including alleged infringement of proprietary rights;*\n\n●*the adequacy of our capital resources and our ability to raise additional financing;*\n\n●*the risks related to our international operations;*\n\n●*the potential impact of foreign currency fluctuations and inflation; and*\n\n●*the potential impact of health epidemics.*\n\n*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:*\n\n●*our ability to manage our business plans, strategies, targets, and outlooks and any business-related forecasts or projections;*\n\n●*our ability to improve our current solutions;*\n\n●*our ability to innovate and respond to rapid technological change and competitive challenges;*\n\n●*our ability to execute our sales and marketing strategy;*\n\n●*customer acceptance of our existing and future solutions;*\n\n●*our ability to predict subscription renewals;*\n\n●*the impact of new legislation or regulations on our business;*\n\n●*the impact of accounting pronouncements and our critical accounting policies, judgments, estimates, models and assumptions on our financial results;*\n\n●*our ability to compete;*\n\n●*the success of our strategic and distribution partnerships;*\n\n●*our ability to obtain capital when needed;*\n\n●*our ability to manage future growth;*\n\n●*our ability to retain key personnel and hire additional personnel;*\n\n●*risks related to protection of our intellectual property;*\n\n●*foreign currency fluctuations and inflation;*\n\n●*the global economic environment, including trade policies and tariffs;*\n\n●*risks related to public health pandemics; and*\n\n●*the risks set forth under “Risk Factors.”*\n\n*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.*\n\n25\n\n[Table of Contents](#Toc)\n\n*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.*\n\n*eGain and eGain® are trademarks of eGain Corporation. We also refer to trademarks of other corporations and organizations in this report.*\n\n**Summary Risk Factors**\n\nOur 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:\n\n​\n\n●Our business is influenced by a range of factors that are beyond our control and that we have no comparative advantage in forecasting.\n\n●Our SaaS business model is subject to certain risks.\n\n●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.\n\n●We cannot accurately predict subscription renewal rates and the impact these rates may have on our future revenue and operating results.\n\n●Our lengthy sales cycles and the difficulty in predicting timing of sales or delays may impair our operating results.\n\n●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.\n\n●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.\n\n●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.\n\n●Our failure to maintain, develop or expand strategic and third-party distribution channels would impede our revenue growth.\n\n●Difficulties and delays in customers implementing our products could harm our revenue and margins.\n\n●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.\n\n●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.\n\n●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.\n\n●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.\n\n●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.\n\n26\n\n[Table of Contents](#Toc)\n\n●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.\n\n●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.\n\n●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.\n\n●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.\n\n●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.\n\n●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.\n\n●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.\n\n●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.\n\n●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.\n\n​\n\n**Overview**\n\n​\n\neGain 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.\n\n​\n\n**Key Financial Measures**\n\n​\n\nWe 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.\n\n*Revenue*\n\n​\n\nWe 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.\n\n​\n\n27\n\n[Table of Contents](#Toc)\n\nThe following table presents total revenue for each of the following periods:\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n**Three Months Ended**\n\n​\n\n​\n\n​\n\n​\n\n​\n\n** **\n\n​\n\n**Nine Months Ended**\n\n​\n\n​\n\n​\n\n​\n\n​\n\n** **\n\n​\n\n​\n\n**March 31, **\n\n​\n\n​\n\n​\n\n​\n\n​\n\n** **\n\n​\n\n**March 31, **\n\n** **\n\n** **\n\n** **\n\n** **\n\n** **\n\n** **\n\n**(in thousands)**\n\n**  ​ ​ ​**\n\n**2026**\n\n  ​ ​ ​\n\n**2025**\n\n  ​ ​ ​\n\n**Change**\n\n​\n\n**2026**\n\n  ​ ​ ​\n\n**2025**\n\n  ​ ​ ​\n\n**Change**\n\nSaaS revenue\n\n​\n\n$\n\n20,917\n\n​\n\n$\n\n19,563\n\n​\n\n$\n\n1,354\n\n​\n\n7\n\n%  \n\n​\n\n$\n\n64,616\n\n​\n\n$\n\n60,230\n\n​\n\n$\n\n4,386\n\n​\n\n7\n\n%\n\nProfessional services revenue\n\n​\n\n \n\n1,582\n\n​\n\n \n\n1,446\n\n​\n\n \n\n136\n\n​\n\n9\n\n%  \n\n​\n\n \n\n4,370\n\n​\n\n \n\n4,967\n\n​\n\n \n\n(597)\n\n​\n\n(12)\n\n%\n\nTotal SaaS and professional services revenue:\n\n​\n\n$\n\n22,499\n\n​\n\n$\n\n21,009\n\n​\n\n$\n\n1,490\n\n​\n\n7\n\n%  \n\n​\n\n$\n\n68,986\n\n​\n\n$\n\n65,197\n\n​\n\n$\n\n3,789\n\n​\n\n6\n\n%\n\n​\n\n*Non-GAAP Operating Income*\n\n​\n\nNon-GAAP operating income is defined as income from operations, adjusted for the impact of warrants and stock-based compensation expense.\n\nManagement believes that it is useful to exclude certain non-cash charges and non-core operational charges from non-GAAP operating income because (i) the amount of such expenses in any specific period may not directly correlate to the underlying performance of our business operations; and (ii) such expenses can vary significantly between periods as a result of the timing of new stock-based awards. The presentation of the non-GAAP financial measures is not intended to be considered in isolation, or as a substitute for, or superior to, the financial information prepared and presented in accordance with GAAP.\n\n​\n\nThe following table presents a reconciliation of GAAP income (loss) from operations to non-GAAP income from operations for each of the following periods:\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n**Three Months Ended**\n\n​\n\n**Nine Months Ended**\n\n​\n\n**March 31, **\n\n​\n\n**March 31, **\n\n**(in thousands)**\n\n**2026**\n\n**  ​ ​ ​**\n\n**2025**\n\n​\n\n**2026**\n\n**  ​ ​ ​**\n\n**2025**\n\nIncome from operations\n\n$\n\n2,008\n\n​\n\n$\n\n27\n\n​\n\n$\n\n6,887\n\n​\n\n$\n\n1,186\n\nAdd:\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\nIssuance of common stock warrant for services\n\n​\n\n—\n\n​\n\n​\n\n—\n\n​\n\n​\n\n1,350\n\n​\n\n​\n\n—\n\nStock-based compensation\n\n​\n\n789\n\n​\n\n​\n\n699\n\n​\n\n​\n\n1,957\n\n​\n\n​\n\n1,953\n\nNon-GAAP income from operations\n\n$\n\n2,797\n\n​\n\n$\n\n726\n\n​\n\n$\n\n10,194\n\n​\n\n$\n\n3,139\n\n​\n\n**Critical Accounting Policies and Estimates**\n\n​\n\nManagement’s Discussion and Analysis of Financial Condition and Results of Operations discusses our condensed consolidated financial statements, which have been prepared in accordance with GAAP. 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.\n\n​\n\nWe believe that the assumptions and estimates, which are described in Note 1 “Summary of Business and Significant Accounting Policies” to our condensed consolidated financial statements, 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 condensed 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.\n\n​\n\n28\n\n[Table of Contents](#Toc)\n\n**Sources of Revenue**\n\nOur 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.\n\n​\n\n*SaaS Revenue*\n\n​\n\nFor 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.\n\nWe 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.\n\n​\n\nWe 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 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.\n\n​\n\n*Professional Services Revenue*\n\n​\n\nProfessional 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.\n\nTraining revenue that meets the criteria to be accounted for separately is recognized when training is provided.\n\n​\n\n**Remaining Performance Obligations**\n\nRemaining 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.\n\n​\n\nAs of March 31, 2026, our remaining performance obligations were $74.1 million, of which we expect to recognize $48.5 million and $25.6 million as revenue within one year and beyond one year, respectively.\n\n​\n\nWe 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\n\n29\n\n[Table of Contents](#Toc)\n\ntiming, 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.\n\n​\n\n**Costs Capitalized to Obtain Revenue Contracts**\n\nUnder 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.\n\n​\n\nWe 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.\n\n​\n\nCosts 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.\n\n​\n\n**Results of Operations**\n\n​\n\nThe following table sets forth certain items reflected in our condensed consolidated statements of operations expressed as a percent of total revenue for the periods indicated:\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n**Three Months Ended**\n\n​\n\n**Nine Months Ended**\n\n​\n\n​\n\n**March 31, **\n\n​\n\n**March 31, **\n\n​\n\n**  ​ ​ ​**\n\n**2026**\n\n​\n\n**2025**\n\n​\n\n**2026**\n\n​\n\n**2025**\n\n**Revenue:**\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\nSaaS\n\n​\n\n93\n\n%  \n\n​\n\n93\n\n%  \n\n​\n\n94\n\n%  \n\n​\n\n92\n\n%\n\nProfessional services\n\n​\n\n7\n\n%  \n\n​\n\n7\n\n%  \n\n​\n\n6\n\n%  \n\n​\n\n8\n\n%\n\nTotal revenue\n\n​\n\n100\n\n%  \n\n​\n\n100\n\n%\n\n​\n\n100\n\n%  \n\n​\n\n100\n\n%\n\nCost of revenue:\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\nCost of SaaS\n\n​\n\n20\n\n%  \n\n​\n\n22\n\n%\n\n​\n\n19\n\n%  \n\n​\n\n21\n\n%\n\nCost of professional services\n\n​\n\n6\n\n%  \n\n​\n\n10\n\n%  \n\n​\n\n7\n\n%  \n\n​\n\n10\n\n%\n\nTotal cost of revenue\n\n​\n\n26\n\n%  \n\n​\n\n32\n\n%  \n\n​\n\n26\n\n%  \n\n​\n\n31\n\n%\n\nGross profit\n\n​\n\n74\n\n%  \n\n​\n\n68\n\n%  \n\n​\n\n74\n\n%  \n\n​\n\n69\n\n%\n\n**Operating expenses:**\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\nResearch and development\n\n​\n\n34\n\n%  \n\n​\n\n36\n\n%  \n\n​\n\n32\n\n%  \n\n​\n\n35\n\n%\n\nSales and marketing\n\n​\n\n21\n\n%  \n\n​\n\n22\n\n%  \n\n​\n\n20\n\n%  \n\n​\n\n23\n\n%\n\nGeneral and administrative\n\n​\n\n10\n\n%  \n\n​\n\n10\n\n%  \n\n​\n\n12\n\n%  \n\n​\n\n10\n\n%\n\nTotal operating expenses\n\n​\n\n65\n\n%  \n\n​\n\n68\n\n%  \n\n​\n\n64\n\n%  \n\n​\n\n68\n\n%\n\nIncome from operations\n\n​\n\n9\n\n%\n\n​\n\n0\n\n%\n\n​\n\n10\n\n%\n\n​\n\n2\n\n%\n\n​\n\n30\n\n[Table of Contents](#Toc)\n\n**Revenue**\n\n​\n\nThe following table presents our total revenue during the three and nine months ended March 31, 2026 and 2025, respectively:\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n**Three Months Ended**\n\n​\n\n​\n\n​\n\n​\n\n​\n\n** **\n\n​\n\n**Nine Months Ended**\n\n​\n\n​\n\n​\n\n​\n\n​\n\n** **\n\n​\n\n​\n\n**March 31, **\n\n​\n\n​\n\n​\n\n​\n\n​\n\n** **\n\n​\n\n**March 31, **\n\n** **\n\n** **\n\n** **\n\n** **\n\n** **\n\n** **\n\n**(in thousands, except percentages)**\n\n**  ​ ​ ​**\n\n**2026**\n\n  ​ ​ ​\n\n**2025**\n\n  ​ ​ ​\n\n**Change**\n\n​\n\n**2026**\n\n  ​ ​ ​\n\n**2025**\n\n  ​ ​ ​\n\n**Change**\n\nSaaS\n\n​\n\n$\n\n20,917\n\n​\n\n$\n\n19,563\n\n​\n\n$\n\n1,354\n\n​\n\n7\n\n%  \n\n​\n\n$\n\n64,616\n\n​\n\n$\n\n60,230\n\n​\n\n$\n\n4,386\n\n​\n\n7\n\n%\n\nProfessional services\n\n​\n\n \n\n1,582\n\n​\n\n \n\n1,446\n\n​\n\n \n\n136\n\n​\n\n9\n\n%  \n\n​\n\n \n\n4,370\n\n​\n\n \n\n4,967\n\n​\n\n \n\n(597)\n\n​\n\n(12)\n\n%\n\nTotal revenue\n\n​\n\n$\n\n22,499\n\n​\n\n$\n\n21,009\n\n​\n\n$\n\n1,490\n\n​\n\n7\n\n%  \n\n​\n\n$\n\n68,986\n\n​\n\n$\n\n65,197\n\n​\n\n$\n\n3,789\n\n​\n\n6\n\n%\n\n​\n\nTotal revenue for the three months ended March 31, 2026 increased by $1.5 million, compared to the same period in fiscal year 2025, due to an increase of SaaS revenue by $1.4 million and an increase of professional services revenue by $136,000. Total revenue for the nine months ended March 31, 2026 increased by $3.8 million, compared to the same period in fiscal year 2025, due to an increase of SaaS revenue by $4.4 million, partially offset by a decrease of $597,000 in professional services revenue.\n\n​\n\nOur 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 $318,000 and a decrease of $33,000 in total revenue during the three months ended March 31, 2026 and 2025, respectively. Foreign exchange rate fluctuation resulted in an increase of $717,000 and $271,000 for the nine months ended March 31, 2026 and 2025, respectively.\n\n​\n\n**SaaS Revenue**\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n**Three Months Ended**\n\n​\n\n​\n\n​\n\n​\n\n​\n\n** **\n\n​\n\n**Nine Months Ended**\n\n​\n\n​\n\n​\n\n​\n\n​\n\n** **\n\n​\n\n​\n\n**March 31, **\n\n​\n\n​\n\n​\n\n​\n\n​\n\n** **\n\n​\n\n**March 31, **\n\n​\n\n​\n\n​\n\n​\n\n​\n\n** **\n\n**(in thousands, except percentages)**\n\n**  ​ ​ ​**\n\n**2026**\n\n​\n\n**2025**\n\n​\n\n**Change**\n\n​\n\n**2026**\n\n​\n\n**2025**\n\n​\n\n**Change**\n\nSaaS revenue\n\n​\n\n$\n\n20,917\n\n​\n\n​\n\n$\n\n19,563\n\n​\n\n​\n\n$\n\n1,354\n\n​\n\n7\n\n%\n\n​\n\n$\n\n64,616\n\n​\n\n​\n\n$\n\n60,230\n\n​\n\n​\n\n$\n\n4,386\n\n​\n\n7\n\n%\n\nPercentage of total revenue\n\n​\n\n \n\n93\n\n%  \n\n​\n\n \n\n93\n\n%  \n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n \n\n94\n\n%  \n\n​\n\n \n\n92\n\n%  \n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\nSaaS revenue includes revenue from cloud delivery arrangements, term licenses and embedded OEM royalties and associated support. Revenue from SaaS increased by $1.4 million and $4.4 million during the three and nine months ended March 31, 2026, respectively, compared to the same periods in fiscal year 2025. This represented an increase in SaaS revenue of 7% for each of the three and nine months ended March 31, 2026, compared to the same periods in fiscal year 2025.\n\n​\n\nSaaS revenue represents 93% and 94% of total revenue for the three and nine months ended March 31, 2026, respectively, compared to 93% and 92% for the same periods in fiscal year 2025.\n\n​\n\nExcluding an increase of $306,000 and $678,000 due to foreign exchange rate fluctuation, SaaS revenue increased by $1.0 million and $3.7 million during the three and nine months ended March 31, 2026, respectively, compared to the same periods in fiscal year 2025. We expect SaaS revenue to continue to grow as we expand our customer base and usage of existing customers, reflecting continued demand for our SaaS offering.\n\n​\n\n31\n\n[Table of Contents](#Toc)\n\n**Professional Services Revenue**\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n**Three Months Ended**\n\n​\n\n​\n\n​\n\n​\n\n​\n\n** **\n\n​\n\n**Nine Months Ended**\n\n​\n\n​\n\n​\n\n​\n\n​\n\n** **\n\n​\n\n​\n\n**March 31, **\n\n​\n\n​\n\n​\n\n​\n\n​\n\n** **\n\n​\n\n**March 31, **\n\n​\n\n​\n\n​\n\n​\n\n​\n\n** **\n\n**(in thousands, except percentages)**\n\n**  ​ ​ ​**\n\n**2026**\n\n​\n\n**2025**\n\n​\n\n**Change**\n\n​\n\n**2026**\n\n​\n\n**2025**\n\n​\n\n**Change**\n\nProfessional services revenue\n\n​\n\n$\n\n1,582\n\n​\n\n​\n\n$\n\n1,446\n\n​\n\n​\n\n$\n\n136\n\n​\n\n9\n\n%\n\n​\n\n$\n\n4,370\n\n​\n\n​\n\n$\n\n4,967\n\n​\n\n​\n\n$\n\n(597)\n\n​\n\n(12)\n\n%\n\nPercentage of total revenue\n\n​\n\n \n\n7\n\n%  \n\n​\n\n \n\n7\n\n%  \n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n \n\n6\n\n%  \n\n​\n\n \n\n8\n\n%  \n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\nProfessional services revenue includes consulting, implementation, training, and managed services. Revenue from professional services increased by $136,000 and decreased by $597,000 during the three and nine months ended March 31, 2026, respectively, compared to the same periods in fiscal year 2025.\n\n​\n\nExcluding an increase of $12,000 and $38,000 due to foreign exchange rate fluctuation, professional services revenue increased by $124,000 and decreased by $635,000 during the three and nine months ended March 31, 2026, respectively, compared to the same periods in fiscal year 2025. We expect professional services revenue to vary dependent on the volume and timing of recognition.\n\n​\n\n**Revenue by Geography**\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n**Three Months Ended**\n\n​\n\n​\n\n​\n\n​\n\n​\n\n** **\n\n​\n\n**Nine Months Ended**\n\n​\n\n​\n\n​\n\n​\n\n​\n\n** **\n\n​\n\n​\n\n**March 31, **\n\n​\n\n​\n\n​\n\n​\n\n​\n\n** **\n\n​\n\n**March 31, **\n\n​\n\n​\n\n​\n\n​\n\n​\n\n** **\n\n**(in thousands, except percentages)**\n\n**  ​ ​ ​**\n\n**2026**\n\n  ​ ​ ​\n\n**2025**\n\n  ​ ​ ​\n\n**Change**\n\n​\n\n**2026**\n\n  ​ ​ ​\n\n**2025**\n\n  ​ ​ ​\n\n**Change**\n\nNorth America\n\n​\n\n$\n\n17,584\n\n​\n\n$\n\n16,452\n\n​\n\n$\n\n1,132\n\n​\n\n7\n\n%  \n\n​\n\n$\n\n54,899\n\n​\n\n$\n\n50,205\n\n​\n\n$\n\n4,694\n\n​\n\n9\n\n%\n\nEurope, Middle East, & Africa\n\n​\n\n \n\n4,915\n\n​\n\n \n\n4,557\n\n​\n\n \n\n358\n\n​\n\n8\n\n%  \n\n​\n\n \n\n14,087\n\n​\n\n \n\n14,992\n\n​\n\n \n\n(905)\n\n​\n\n(6)\n\n%\n\nTotal revenue\n\n​\n\n$\n\n22,499\n\n​\n\n$\n\n21,009\n\n​\n\n$\n\n1,490\n\n​\n\n7\n\n%  \n\n​\n\n$\n\n68,986\n\n​\n\n$\n\n65,197\n\n​\n\n$\n\n3,789\n\n​\n\n6\n\n%\n\n​\n\nRevenue from North America sales increased by 7% from $16.5 million during the three months ended March 31, 2025 to $17.6 million during the three months ended March 31, 2026, due to an increase of $1.5 million in SaaS revenue, partially offset by a decrease of $368,000 in professional services revenue.\n\n​\n\nRevenue from North America sales increased by 9% from $50.2 million during the nine months ended March 31, 2025 to $54.9 million during the nine months ended March 31, 2026, due to an increase of $5.5 million in SaaS revenue, partially offset by a decrease of $820,000 in professional services revenue.\n\n​\n\nRevenue from EMEA sales increased by 8% from $4.6 million for the three months ended March 31, 2025 to $4.9 million during the three months ended March 31, 2026, due to an increase of $504,000 in professional services revenue, partially offset by a decrease of $146,000 in SaaS revenue.\n\n​\n\nRevenue from EMEA sales decreased by 6% from $15.0 million for the nine months ended March 31, 2025 to $14.1 million during the nine months ended March 31, 2026, due to a decrease of $1.1 million in SaaS revenue, partially offset by an increase of $222,000 in professional services revenue.\n\n​\n\n32\n\n[Table of Contents](#Toc)\n\n**Cost of Revenue**\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n**Three Months Ended**\n\n​\n\n​\n\n​\n\n​\n\n​\n\n** **\n\n​\n\n**Nine Months Ended**\n\n​\n\n​\n\n​\n\n​\n\n​\n\n** **\n\n​\n\n​\n\n**March 31, **\n\n​\n\n​\n\n​\n\n​\n\n​\n\n** **\n\n​\n\n**March 31, **\n\n​\n\n​\n\n​\n\n​\n\n​\n\n** **\n\n**(in thousands, except percentages)**\n\n**  ​ ​ ​**\n\n**2026**\n\n**  ​ ​ ​**\n\n**2025**\n\n**  ​ ​ ​**\n\n**Change**\n\n​\n\n**2026**\n\n**  ​ ​ ​**\n\n**2025**\n\n**  ​ ​ ​**\n\n**Change**\n\nSaaS\n\n​\n\n$\n\n4,532\n\n  ​ ​ ​\n\n$\n\n4,594\n\n  ​ ​ ​\n\n$\n\n(62)\n\n  ​ ​ ​\n\n(1)\n\n%  \n\n​\n\n$\n\n13,141\n\n  ​ ​ ​\n\n$\n\n13,742\n\n  ​ ​ ​\n\n$\n\n(601)\n\n  ​ ​ ​\n\n(4)\n\n%\n\nProfessional services\n\n​\n\n \n\n1,462\n\n​\n\n \n\n2,129\n\n​\n\n \n\n(667)\n\n \n\n(31)\n\n%  \n\n​\n\n \n\n4,856\n\n​\n\n \n\n6,327\n\n​\n\n \n\n(1,471)\n\n \n\n(23)\n\n%\n\nTotal cost of revenue\n\n​\n\n$\n\n5,994\n\n​\n\n$\n\n6,723\n\n​\n\n$\n\n(729)\n\n \n\n(11)\n\n%  \n\n​\n\n$\n\n17,997\n\n​\n\n$\n\n20,069\n\n​\n\n$\n\n(2,072)\n\n \n\n(10)\n\n%\n\nPercentage of total revenue\n\n​\n\n \n\n26\n\n%  \n\n \n\n32\n\n%  \n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n \n\n26\n\n%  \n\n \n\n31\n\n%  \n\n​\n\n​\n\n​\n\n​\n\n​\n\nGross margin\n\n​\n\n \n\n74\n\n%  \n\n \n\n68\n\n%  \n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n \n\n74\n\n%  \n\n \n\n69\n\n%  \n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n*SaaS*\n\n​\n\nCost of SaaS revenue consists 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.\n\n​\n\nCost of SaaS revenue decreased by $62,000 during the three months ended March 31, 2026, from the same period in fiscal year 2025. This decrease was primarily due to decreases of (i) $351,000 in cloud-computing costs and (ii) $31,000 in outside consulting costs, partially offset by an increase of $313,000 in personnel-related costs.\n\n​\n\nCost of SaaS revenue decreased by $601,000 during the nine months ended March 31, 2026, from the same period in fiscal year 2025. This decrease was primarily due to decreases of (i) $1.1 million in cloud-computing costs and (ii) $157,000 in outside consulting costs, partially offset by an increase of $648,000 in personnel-related costs.\n\n​\n\nExcluding an increase of $2,000 and a decrease of $15,000 due to foreign exchange rate fluctuation, cost of SaaS revenue decreased by $64,000 and $586,000 during the three and nine months ended March 31, 2026, respectively, from the same periods in fiscal year 2025.\n\n​\n\n*Professional Services*\n\n​\n\nCost 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. **\n\n​\n\nCost of professional services decreased by $667,000 during the three months ended March 31, 2026, from the same period in fiscal year 2025. This decrease was primarily due to a decrease of $831,000 in personnel-related costs, partially offset by an increase of $147,000 in outside consulting costs.\n\n​\n\nExcluding an increase of $19,000 due to foreign exchange rate fluctuation, cost of professional services revenue decreased by $686,000 during the three months ended March 31, 2026, compared to the same period in fiscal year 2025.\n\n​\n\nCost of professional services decreased by $1.5 million during the nine months ended March 31, 2026, from the same period in fiscal year 2025. This decrease was primarily due to a decrease of $1.7 million in personnel-related costs, partially offset by an increase of $153,000 in outside consulting costs.\n\n​\n\nExcluding an increase of $44,000 due to foreign exchange rate fluctuation, cost of professional services revenue decreased by $1.5 million during the nine months ended March 31, 2026, compared to the same period in fiscal year 2025.\n\n​\n\n33\n\n[Table of Contents](#Toc)\n\n**Operating Expenses**\n\n​\n\n*Research and Development*\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n**Three Months Ended**\n\n​\n\n​\n\n​\n\n​\n\n​\n\n** **\n\n​\n\n**Nine Months Ended**\n\n​\n\n​\n\n​\n\n​\n\n​\n\n** **\n\n​\n\n​\n\n**March 31, **\n\n​\n\n​\n\n​\n\n​\n\n​\n\n** **\n\n​\n\n**March 31, **\n\n​\n\n​\n\n​\n\n​\n\n​\n\n** **\n\n**(in thousands, except percentages)**\n\n**  ​ ​ ​**\n\n**2026**\n\n​\n\n**2025**\n\n​\n\n** ** **Change**\n\n​\n\n**2026**\n\n​\n\n**2025**\n\n​\n\n**Change**\n\nResearch and development\n\n​\n\n$\n\n7,566\n\n​\n\n​\n\n$\n\n7,514\n\n​\n\n​\n\n$\n\n52\n\n​\n\n1\n\n%  \n\n​\n\n$\n\n22,158\n\n​\n\n​\n\n$\n\n22,643\n\n​\n\n​\n\n$\n\n(485)\n\n​\n\n(2)\n\n%\n\nPercentage of total revenue\n\n​\n\n \n\n34\n\n%  \n\n​\n\n \n\n36\n\n%  \n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n \n\n32\n\n%  \n\n​\n\n \n\n35\n\n%  \n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\nResearch 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, benefits, bonuses, and stock-based compensation and allocated overhead. Research and development expense also includes outside consulting services contracted for research and development.\n\n​\n\nResearch and development expense increased by 1% to $7.6 million for the three months ended March 31, 2026, from $7.5 million in the same period in fiscal year 2025. Excluding an increase of $11,000 due to foreign exchange rate fluctuation, research and development expense increased primarily due to increases of (i) $25,000 in outside consulting costs and (ii) $14,000 in personnel-related costs.\n\n​\n\nResearch and development expense decreased by 2% to $22.2 million for the nine months ended March 31, 2026, from $22.6 million in the same period in fiscal year 2025. Excluding a decrease of $23,000 due to foreign exchange rate fluctuation, research and development expense decreased primarily due to a decrease of $518,000 in personnel-related costs, partially offset by an increase of $55,000 in outside consulting costs.\n\n​\n\n*Sales and Marketing*\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n**Three Months Ended**\n\n​\n\n​\n\n​\n\n​\n\n​\n\n** **\n\n​\n\n**Nine Months Ended**\n\n​\n\n​\n\n​\n\n​\n\n​\n\n** **\n\n​\n\n​\n\n**March 31, **\n\n​\n\n​\n\n​\n\n​\n\n​\n\n** **\n\n​\n\n**March 31, **\n\n​\n\n​\n\n​\n\n​\n\n​\n\n** **\n\n**(in thousands, except percentages)**\n\n**  ​ ​ ​**\n\n**2026**\n\n​\n\n**2025**\n\n​\n\n** ** **Change**\n\n​\n\n**2026**\n\n​\n\n**2025**\n\n​\n\n**Change**\n\nSales and marketing\n\n​\n\n$\n\n4,644\n\n​\n\n​\n\n$\n\n4,704\n\n​\n\n​\n\n$\n\n(60)\n\n​\n\n(1)\n\n%  \n\n​\n\n$\n\n13,847\n\n​\n\n​\n\n$\n\n14,715\n\n​\n\n​\n\n$\n\n(868)\n\n​\n\n(6)\n\n%\n\nPercentage of total revenue\n\n​\n\n \n\n21\n\n%  \n\n​\n\n \n\n22\n\n%  \n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n \n\n20\n\n%  \n\n​\n\n \n\n23\n\n%  \n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\nSales 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.\n\n​\n\nSales and marketing expenses decreased by 1% to $4.6 million for the three months ended March 31, 2026, from $4.7 million in the same period in fiscal year 2025. Excluding an increase of $76,000 due to foreign exchange rate fluctuation, sales and marketing expense decreased primarily due to a decrease of $143,000 in personnel-related costs, partially offset by an increase of $17,000 in outside consulting costs.\n\n​\n\nSales and marketing expenses decreased by 6% to $13.8 million for the nine months ended March 31, 2026, from $14.7 million in the same period in fiscal year 2025. Excluding an increase of $164,000 due to foreign exchange rate fluctuation, sales and marketing expense decreased primarily due to decreases of (i) $870,000 in personnel-related costs and (ii) $143,000 in outside consulting costs.\n\n​\n\n34\n\n[Table of Contents](#Toc)\n\n*General and Administrative*\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n**Three Months Ended**\n\n​\n\n​\n\n​\n\n​\n\n​\n\n** **\n\n​\n\n**Nine Months Ended**\n\n​\n\n​\n\n​\n\n​\n\n​\n\n** **\n\n​\n\n​\n\n**March 31, **\n\n​\n\n​\n\n​\n\n​\n\n​\n\n** **\n\n​\n\n**March 31, **\n\n​\n\n​\n\n​\n\n​\n\n​\n\n** **\n\n**(in thousands, except percentages)**\n\n**  ​ ​ ​**\n\n**2026**\n\n​\n\n**2025**\n\n​\n\n**Change**\n\n​\n\n**2026**\n\n​\n\n**2025**\n\n​\n\n**Change**\n\nGeneral and administrative\n\n​\n\n$\n\n2,287\n\n​\n\n​\n\n$\n\n2,041\n\n​\n\n​\n\n$\n\n246\n\n​\n\n12\n\n%  \n\n​\n\n$\n\n8,097\n\n​\n\n​\n\n$\n\n6,584\n\n​\n\n​\n\n$\n\n1,513\n\n​\n\n23\n\n%\n\nPercentage of total revenue\n\n​\n\n \n\n10\n\n%  \n\n​\n\n \n\n10\n\n%  \n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n \n\n12\n\n%  \n\n​\n\n \n\n10\n\n%  \n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\nGeneral 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, warrants, provision for credit losses and, to a lesser extent, occupancy costs and related overhead.\n\n​\n\nGeneral and administrative expenses increased by 12% to $2.3 million for the three months ended March 31, 2026, from $2.0 million in the same period in fiscal year 2025. Excluding an increase of $15,000 due to foreign exchange rate fluctuation, general and administrative expense increased primarily due to an increase of $311,000 in legal related costs, partially offset by a decrease of $100,000 in accounting, audit, and administrative fees.\n\n​\n\nGeneral and administrative expenses increased by 23% to $8.1 million for the nine months ended March 31, 2026, from $6.6 million in the same period in fiscal year 2025. Excluding an increase of $29,000 due to foreign exchange rate fluctuation, general and administrative expense increased primarily due to increases of (i) $1.4 million in warrant expense and (ii) $687,000 in legal related costs, partially offset by decreases of (i) $339,000 in outside-consulting costs and (ii) $101,000 in personnel-related costs.\n\n​\n\n**Income from Operations**\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n**Three Months Ended**\n\n​\n\n​\n\n​\n\n​\n\n​\n\n** **\n\n​\n\n**Nine Months Ended**\n\n​\n\n​\n\n​\n\n​\n\n​\n\n** **\n\n​\n\n​\n\n**March 31, **\n\n​\n\n​\n\n​\n\n​\n\n​\n\n** **\n\n​\n\n**March 31, **\n\n​\n\n​\n\n​\n\n​\n\n​\n\n** **\n\n**(in thousands, except percentages)**\n\n**  ​ ​ ​**\n\n**2026**\n\n​\n\n**2025**\n\n​\n\n**Change**\n\n​\n\n**2026**\n\n​\n\n**2025**\n\n​\n\n**Change**\n\nIncome from operations\n\n​\n\n$\n\n2,008\n\n \n\n​\n\n$\n\n27\n\n \n\n​\n\n$\n\n1,981\n\n​\n\n7,337\n\n%  \n\n​\n\n$\n\n6,887\n\n \n\n​\n\n$\n\n1,186\n\n \n\n​\n\n$\n\n5,701\n\n​\n\n481\n\n%  \n\nOperating margin\n\n​\n\n \n\n9\n\n%  \n\n​\n\n \n\n0\n\n%  \n\n​\n\n \n\n​\n\n​\n\n​\n\n​\n\n​\n\n \n\n10\n\n%  \n\n​\n\n \n\n2\n\n%  \n\n​\n\n \n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\nIncome from operations was $2.0 million and $27,000 with an operating margin of 9% and 0% during the three months ended March 31, 2026 and 2025, respectively. This is primarily due to an increase in gross margin. \n\n​\n\nIncome from operations was $6.9 million and $1.2 million with an operating margin of 10% and 2% during the nine months ended March 31, 2026 and 2025, respectively. This is primarily due to an increase in gross margin.\n\n​\n\n**Interest Income**\n\nInterest income primarily consists of interest earned on money market accounts. Interest income was $603,000 and $597,000 during the three months ended March 31, 2026 and 2025, respectively. Interest income was $1.7 million and $2.0 million during the nine months ended March 31, 2026 and 2025, respectively.\n\n​\n\n**Other Income (Expense), Net**\n\n​\n\nOther income (expense), net was an income of $176,000 and expense of $304,000 during the three months ended March 31, 2026 and 2025, respectively. Other income (expense), net was income of $599,000 and expense of $875,000 during the nine months ended March 31, 2026 and 2025, respectively. Other income (expense), net primarily included foreign exchange rate fluctuations on international trade receivables, net of transactions.\n\n​\n\n35\n\n[Table of Contents](#Toc)\n\n**Income Tax Provision**\n\n​\n\nProvision for income taxes consists of federal, state, and foreign income taxes. We recorded income tax provision of $371,000 and $1.6 million for the three and nine months ended March 31, 2026, respectively. We recorded income tax provision of $254,000 and $951,000 for the three and nine months ended March 31, 2025, respectively. We released a majority of our valuation allowance against U.S. deferred tax assets on June 30, 2025 and recorded higher income before tax provision in the nine months ended March 31, 2026.\n\n​\n\n**Liquidity and Capital Resources**\n\n​\n\n*Overview*\n\n​\n\nAs of March 31, 2026 and June 30, 2025, our principal sources of liquidity were cash and cash equivalents, restricted cash, and accounts receivable totaling $89.2 million and $95.7 million, respectively. Our cash, cash equivalents and restricted cash were $80.5 million and $62.9 million as of March 31, 2026 and June 30, 2025, respectively.\n\n​\n\nBased upon our current business plan, we believe that existing capital resources will enable us to maintain current and planned operations for at least the next 12 months. From time to time, however, we may consider opportunities for raising additional capital. We can make no assurances that such opportunities will be available to us on economic terms we consider favorable, if at all. Our expectations as to our future cash flows and our future cash balances are subject to a number of assumptions, including assumptions regarding anticipated increases in our revenue, our ability to retain existing customers and customer purchasing and payment patterns, many of which are beyond our control.\n\n​\n\n*Cash Flows*\n\nFor the nine months ended March 31, 2026 and 2025, our cash flows were as follows (in thousands):\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n**Nine Months Ended**\n\n​\n\n**March 31, **\n\n​\n\n**2026**\n\n**  ​ ​ ​**\n\n**2025**\n\nNet cash provided by operating activities\n\n$\n\n18,731\n\n​\n\n$\n\n9,588\n\nNet cash used in investing activities\n\n​\n\n(522)\n\n​\n\n​\n\n(352)\n\nNet cash provided by (used in) financing activities\n\n​\n\n1,271\n\n​\n\n​\n\n(11,105)\n\n​\n\nCash 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 and warrants, the timing of employee related costs including commissions and bonus payments, and changes in operating assets and liabilities during the year.\n\n​\n\nNet cash provided by operating activities increased by $9.1 million during the nine months ended March 31, 2026, from the same period in fiscal year 2025, driven primarily by the change in net income and the timing of collections for accounts receivable.\n\n​\n\nNet cash used in investing activities increased by $170,000 during the nine months ended March 31, 2026, from the same period in fiscal year 2025, driven primarily by 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.\n\nNet cash provided by (used in) financing activities increased by $12.4 million during the nine months ended March 31, 2026, from the same period in fiscal year 2025. Our current proceeds consist primarily of the exercise of employee stock options, our employee stock purchase plan, and funds used for repurchases of our common stock. Funds used for repurchases of our common stock was $1.4 million and $12.0 million during the nine months ended March 31, 2026 and 2025, respectively.\n\n​\n\n36\n\n[Table of Contents](#Toc)\n\n*Commitments*\n\n​\n\nOur 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*. As of March 31, 2026, the future non-cancelable minimum payments under these commitments were approximately $3.9 million.\n\n​\n\n*Off-Balance Sheet Arrangements*\n\n​\n\nAs of March 31, 2026, we had no significant off-balance sheet arrangements as defined in Item 303(a)(4) of Regulation S-K.\n\n​\n\n**New Accounting Pronouncements**\n\nSee Note 1 “Summary of Business and Significant Accounting Policies” to the condensed consolidated financial statements for our discussion of new accounting pronouncements adopted and those pending.\n\n​"}