Financial Analysis

7. COMMITMENTS AND CONTINGENCIES Employee benefit plans Defined Contribution Plans We sponsor an employee savings and retirement plan, the 401(k) Plan, as allowed under Section 401(k) of the Internal Revenue Code. The 401(k) Plan is available to all domestic employees who meet minimum age and service requirements, and provides employees with tax deferred salary deductions and alternative investment options. Employees may contribute up to 60% of their salary, subject to certain limitations. We, at the discretion of our board of directors, may contribute to the 401(k) Plan. In fiscal years 2025 and 2024, we contributed approximately $651,000 and $680,000 to the 401(k) Plan, respectively. We also have a defined contribution plan related to our foreign subsidiaries. Amounts expensed under this plan were $623,000 and $679,000, for the fiscal years ended June 30, 2025 and 2024, respectively. Gratuity PlanIndia In accordance with Gratuity Act of 1972, we sponsor a defined benefit plan (Gratuity Plan) for all of our India employees. The Gratuity Plan is required by local law, which provides a lump sum payment to vested employees upon retirement or termination of employment in an amount based on each employees salary and duration of employment with the Company. The Gratuity Plan benefit cost for the year is calculated on an actuarial basis. Current service costs and actuarial gains or losses, or prior service cost, for the Gratuity Plan were $140,000 and $103,000, for the fiscal years …

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Fiscal Year Ended June 30, 2025 2024 (in thousands) Revenue: SaaS revenue $ 81,921 $ 85,082 Professional services 6,510 7,721 Total revenue $ 88,431 $ 92,803 Fiscal Year Ended June 30, 2025 2024 (in thousands) Revenue: Over-time $ 82,549 $ 81,415 Point-in-time 5,882 11,388 Total revenue $ 88,431 $ 92,803 …

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4. INCOME TAXES Income before income tax benefit (provision) consisted of the following (in thousands): Fiscal Year Ended June 30, 2025 2024 United States $ 3,636 $ 6,248 Foreign 2,001 3,470 Income before income tax benefit (provision) $ 5,637 $ 9,718 The reconciliation of income tax expense at the statutory federal income tax rate and the Companys effective tax rate is as follows (in thousands): Fiscal Year Ended June 30, 2025 2024 Federal statutory income tax rate $ (1,184) $ (2,041) Current state taxes, net of federal benefit (713) 632 Foreign rate differential (222) (292) Research and development credits (127) 599 Foreign withholding tax (23) Stock-based compensation (981) (410) Deferred return to provision 51 (175) Section 267 payables 1,294 Other items (41) (52) Net change in valuation allowance 30,079 (1,470) Foreign income (245) Benefit from (provision for) income taxes $ 26,617 $ (1,938) The components of the income tax benefit (provision) are as follows (in thousands): Fiscal Year Ended June 30, 2025 2024 Current provision: Federal $ (14) $ State (101) (897) Foreign (521) (951) Total current: (636) (1,848) Deferred: Federal 24,280 State 3,094 Foreign (121) (90) Total deferred: 27,253 (90) Income tax benefit (provision) $ 26,617 $ (1,938) As of June 30, 2025, we had zero federal and approximately $11.5 million state net operating loss carryforwards. The net operating loss carryforwards will expire at various dates beginning in fiscal year ending June 30, 2036, if not …

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8. LITIGATION In the ordinary course of business, we are involved in various legal proceedings and claims related to alleged infringement of third-party patents and other 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 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. We 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.

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6. LEASES During our fiscal year ended June 30, 2025, we leased our office facilities under non-cancelable operating leases that expire on various dates through the fiscal year 2033. We also modified two of our existing operating leases by extending the terms under such leases, which resulted in an increase in operating lease right-of-use assets and operating lease liabilities in the amount of approximately $677,000 during our fiscal year ended June 30, 2025. 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. The following table presents information about the weighted average lease term and discount rate as follows: As of June 30, 2025 As of June 30, 2024 Weighted average remaining lease term (in years) 5.14 5.52 Weighted average discount rate 8.41 % 7.66 % The following table presents information about leases on our consolidated statement of operations (in thousands): Years ended June 30, 2025 2024 Operating lease expense $ 1,346 $ 1,345 The following table presents supplemental cash flow information about our leases (in thousands): Years ended June 30, 2025 2024 Operating …

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Recent Accounting Pronouncements Pronouncements Recently Adopted In November 2023, the Financial Accounting Standards Board (FASB) issued ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures, which requires disclosures on expanded information about their reportable segments significant expenses and other segment items on an interim and annual basis. The ASU is effective for fiscal years beginning after December 15, 2023 (our fiscal year 2025), with early adoption permitted. The ASU is required to be applied retrospectively to all prior periods presented in the financial statements once adopted. We adopted this guidance as of our fourth quarter of fiscal year 2025 with no material impact on our consolidated financial statements. Pronouncements Not Yet Adopted In 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 entitys 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 Decem …

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3. REVENUE RECOGNITION Disaggregation of Revenue The following table presents our SaaS and professional services revenue during the fiscal years ended June 30, 2025 and 2024, respectively: Fiscal Year Ended June 30, 2025 2024 (in thousands) Revenue: SaaS revenue $ 81,921 $ 85,082 Professional services 6,510 7,721 Total revenue $ 88,431 $ 92,803 The following table presents our revenue recognized over-time and at a point-in-time during the fiscal years ended June 30, 2025 and 2024, respectively: Fiscal Year Ended June 30, 2025 2024 (in thousands) Revenue: Over-time $ 82,549 $ 81,415 Point-in-time 5,882 11,388 Total revenue $ 88,431 $ 92,803 The 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 revenues between each geographic region as presented in the table below was materially consistent across each of our operating segments revenues for the periods presented. Fiscal Year Ended June 30, 2025 2024 (in thousands) Revenue: North America $ 68,778 $ 72,611 Europe, Middle East, & Africa 19,653 20,192 Total revenue $ 88,431 $ 92,803 Contract Balances Contract 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 …

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5. STOCKHOLDERS EQUITY On December 8, 2021, our board of directors authorized the amended and restated Certificate of Incorporation which increased the total authorized shares of common stock from 50,000,000 to 60,000,000 shares. As of June 30, 2025 and 2024, the Company had 33,237,000 and 32,698,000 shares of common stock issued, respectively, and 27,083,000 and 29,160,000 shares of common stock outstanding, respectively. Common Stock We have reserved shares of common stock for issuance as of June 30, 2025 as follows: Common Stock Reserves Stock options outstanding 3,954,716 Restricted stock units outstanding 179,155 Stock available for future grants or issuance: 2005 Stock Incentive Plan 2,089,443 2017 Employee Stock Purchase Plan 589,695 Total reserved shares of common stock for issuance 6,813,009 Preferred Stock We are authorized to issue 5,000,000 shares of preferred stock with a par value of $0.001 per share. As of June 30, 2025 and 2024, no shares of preferred stock are issued or outstanding. Our board of directors has the authority, without further action by our stockholders, to issue up to 5,000,000 shares of preferred stock in one or more series and to fix the rights, preferences, privileges and restrictions thereof. These rights, preferences and privileges could include dividend rights, conversion rights, voting rights, terms of redemption, liquidation preferences, sinking fund terms and the number of shares constituting any series or the designation of such series …

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11. SUBSEQUENT EVENTS The Company evaluated subsequent events and transactions that occurred after the balance sheet date up to the date that the consolidated financial statements were issued. The Company did not identify any other subsequent events, other than as described below, that would have required adjustment or disclosure in the consolidated financial statements that are not already previously disclosed. JPMC Warrant On August 14, 2025, the Company issued a warrant (Warrant) to JPMC Strategic Investments I Corporation (JPMC) to acquire 500,000 shares of the Companys common stock at an exercise price of $7.10 per share. The offer and issuance of the Warrant is expected to be exempt from registration under the 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. In connection with the issuance of the Warrant, the Company and JPMC have entered into a board observer agreement under which a senior executive of JPMC was granted the right to attend meetings of the board of directors in a non-voting observer capacity. Shares Repurchase On September 3, 2025, the Companys board of directors approved a $20 million increase in its stock repurchase program, bringing the aggregate amount eGain may purchase thereunder from $40 mill …

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6. COMMITMENTS AND CONTINGENCIES Litigation In 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. We 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. Warranty We 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. We also provide standard warranties against and indemnification for the potential infri …

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The following table presents our revenue recognized over-time and at a point-in-time during the three and six months ended December 31, 2025 and 2024, respectively (in thousands): Three Months Ended Six Months Ended December 31, December 31, 2025 2024 2025 2024 Revenue: Over-time $ 22,040 $ 20,950 $ 43,885 $ 40,852 Point-in-time 939 1,439 2,602 3,336 Total revenue $ 22,979 $ 22,389 $ 46,487 $ 44,188 …

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4. INCOME TAXES Income 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 …

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5. LEASES We 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. 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. Total operating lease costs were $390,000 and $383,000 for the three months ended December 31, 2025 and 2024, respectively. Total operating lease costs were $722,000 and $683,000 for the six months ended December 31, 2025 and 2024, respectively. For the three and six months ended December 31, 2025, operating cash outflows for operating leases were $288,000 and $575,000, respectively. For the three and six months ended December 31, 2024, operating cash outflows for operating leases were $322,000 and $596,000, respectively. The following tables present information about leases on our condensed consolidated balance sheets (in thousands …

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2. REVENUE RECOGNITION Disaggregation of Revenue The following table presents our revenue recognized over-time and at a point-in-time during the three and six months ended December 31, 2025 and 2024, respectively (in thousands): Three Months Ended Six Months Ended December 31, December 31, 2025 2024 2025 2024 Revenue: Over-time $ 22,040 $ 20,950 $ 43,885 $ 40,852 Point-in-time 939 1,439 2,602 3,336 Total revenue $ 22,979 $ 22,389 $ 46,487 $ 44,188 The 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): Three Months Ended Six Months Ended December 31, December 31, 2025 2024 2025 2024 Revenue: North America $ 18,353 $ 17,330 $ 37,315 $ 33,753 Europe, Middle East, & Africa 4,626 5,059 9,172 10,435 Total revenue $ 22,979 $ 22,389 $ 46,487 $ 44,188 Contract Balances Contract 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 revenu …

RevenueFromContractWithCustomerTextBlock · excerpt; the full note is in the filing