EGAN

MKT CAP $148.4MP/E 17.7DIV YIELD —FCF YIELD 13.84%REV TTM $91.1M +3.1%NET INCOME $8.9M −72.5%NET CASH $53.1M52W 5.11 – 15.46SEC XBRL · TTM TO Invalid Date

How EGAN rewrote its risk factors

10-K ITEM 1A · FY2025 → FY2026

Text kept

25%

of sentences unchanged

Added

158

new sentences

Dropped

654

sentences removed

Length

−25,420

words, now 13,677

New in FY2026

These macroeconomic developments have negatively affected our business, operating results and financial condition in the past, and may continue to do so in the future.
A general weakening of, and related declining corporate confidence in, the global economy or the curtailment in government or corporate spending has caused, and may in the future cause, certain current or potential customers to reduce their technology budgets or be unable to fund software or services purchases, which has resulted, and may in the future result, in customers delaying, decreasing or cancelling purchases of our products and services or delaying payment for previously purchased products and services.
Other factors that have caused, and may in the future cause, our revenue and operating results to fluctuate include: ● timing of customer budget cycles; ● the priority our customers place on our products compared to other business investments; ● size, timing and contract terms of new customer contracts, and unpredictable and often lengthy sales cycles; ● reduced renewals; ● competitive factors, including new product introductions, upgrades and discounted pricing or special payment terms offered by our competitors, as well as strategic actions by us or our competitors, such as acquisitions, divestitures, spin-offs, joint ventures, strategic investments or changes in business strategy; ● technical difficulties, errors or service interruptions in our solutions that cause customer dissatisfaction with our solutions; ● consolidation among our customers, which may alter their buying patterns, or business failures that may reduce demand for our solutions; ● operating expenses associated with expansion of our sales force or business, and our product development efforts; ● cost, timing and management efforts related to the introduction of new features to our solutions; ● our ability to obtain, maintain and protect our intellectual property rights and adequately safeguard the information imported to our solutions or otherwise provided to us by our customers; and ● extraordinary expenses such as impairment charges, litigation or other payments related to settlement of disputes. Any of these developments may adversely affect our revenue, operating results and financial condition.
We have experienced instances in which customers have failed to make required payments, and in such cases, we may be required to defer revenue recognition on sales to affected customers.
We have recorded, and may in the future be required, to record additional reserves or write-offs, or defer revenue on sales transactions, which could negatively impact our financial results.
Some customers have elected not to renew their subscriptions, and customers have reduced, and may in the future reduce, their subscriptions.
If customers choose not to renew, or further reduce, their subscriptions, our operating results and financial results will suffer. The deferral or loss of one or more significant orders has adversely affected, and may in the future materially adversely affect our operating results, especially in a given quarter.
In addition, our business is subject to seasonal factors that have caused, and may continue to cause, our results to fluctuate from quarter to quarter. We cannot accurately predict subscription renewal rates and the impact these rates may have on our future revenue and operating results.
In addition, some customers have renewed, and other customers may in the future renew, for fewer subscriptions (in quantity or products) or for shorter contract lengths.
We cannot accurately predict renewal rates given our varied customer base of enterprise customers and the number of multiyear subscription contracts.
Our renewal rates have fluctuated and may decline or fluctuate as a result of a number of factors, including customer dissatisfaction with our service, decreases in customers’ spending levels, decreases in the number of users at our customers, pricing changes and general economic conditions.
If our customers do not renew their subscriptions for our service or reduce the number of paying subscriptions at the time of renewal, our revenue will be adversely affected, and our business may suffer.
The long sales cycle for our products has caused, and may continue to cause, SaaS revenue and operating results to vary significantly from period to period.
This has contributed, and may continue to contribute, to the uncertainty and fluctuations in our future operating results.
We derive a substantial portion of our revenue from sales to a relatively small number of customers.
For the fiscal year ended June 30, 2026, our ten largest customers accounted for approximately 56% of our total revenue, compared with approximately 58% for the fiscal year ended June 30, 2025.
Our largest customer accounted for approximately 15% and 16% of our total revenue for fiscal 2026 and fiscal 2025, respectively.
The loss of any significant customer or a decline in business with any significant customer has adversely affected, and could in the future materially and adversely affect our financial condition and results of operations.
We compete with application software providers, including NICE Ltd. and Verint Systems Inc.
In the knowledge management systems market specifically, we also compete with providers of knowledge management systems, including KMS Lighthouse, Shelf, Talkdesk, Upland Software, Inc., and USU.
In addition, we occasionally compete with some of our platform partners where some of our product capabilities overlap, including Five9, Genesys, Microsoft, Salesforce, and ServiceNow.
We also compete with providers of general-purpose generative AI platforms and with enterprises that develop knowledge management, AI and related capabilities using their own internal resources.
Our brand awareness and market visibility may also be more limited than that of certain larger or more established competitors, which has adversely affected, and may continue to adversely affect, our ability to attract prospective customers and compete for enterprise opportunities.
With more established and better-financed competitors, these companies have been, and may continue to be, able to undertake more extensive marketing campaigns, adopt more aggressive pricing policies, and make more attractive offers to businesses to induce them to use their products or services.
AI technology and services are highly competitive and rapidly evolving markets.
We have incurred, and expect to continue to incur, significant development and operational costs to build and support the generative AI capabilities, products, and services necessary to meet the needs of our customers.
Such competitive pressure has resulted, and may continue to result, in decreased sales volumes, price reductions, and/or increased operating costs, such as for research and development, marketing, and sales activities.
This has adversely affected, and may continue to adversely affect, lower revenue, gross margins, and operating income.
In addition, customers are currently assessing and evolving their AI utilization strategy, so it is difficult to estimate with any reasonable degree of precision the impact of generative AI product offerings on our future revenue, the expected timing or demand for our products and services, and the extent to which customer investment in AI-enabled solutions may displace or accelerate purchases of our existing offerings.
For example, we have experienced workforce reductions and turnover, and additional reductions or turnover may limit our capacity to develop and maintain awareness of our products in a cost-effective manner.
This could hinder widespread adoption of our existing and future products and could result in a failure to expand and attract new customers and enhance relationships with existing customers.
This could impede our efforts to improve operations in our other areas and may result in declines in the market price of our common stock.
We have experienced, and may in the future experience, instances in which distribution partners have not marketed, resold, implemented or supported our products to the extent anticipated, or have devoted greater resources to competing products and services.
If we are unable to develop, maintain and expand these relationships for any reason, including as a result of any change in the leadership of our distribution partners, or if any existing or future distribution partners fail to successfully market, resell, implement or support our products for their customers, or if distribution partners represent multiple providers and devote greater resources to market, resell, implement and support competing products and services, our future revenue growth could be impeded.
We have devoted resources to partnerships that have not always proceeded or generated revenue or other results as anticipated, and this may occur again in the future.
Once partnerships are forged, some relationships may not be renewed, and we may be unable to renew other relationships in the future or may only be able to renew them on less favorable terms.
If an arrangement requires significant customization or implementation services from us, recognition of the associated subscription and service revenue has been, and may in the future be, delayed.
Some customers have required, and may in the future require, us to develop customized features or capabilities.
We derived 21% and 22% of our revenue from EMEA sales during the fiscal years ended June 30, 2026 and 2025 , respectively .
In addition to those discussed elsewhere in this section, our EMEA sales operations are subject to a number of specific risks, such as: ● general economic conditions in each country or region in which we do or plan to do business; ● foreign currency fluctuations and imposition of exchange controls; ● changes in data privacy laws including European Union’s General Data Protection Regulation (GDPR) and other emerging privacy or AI-related regulations; ● difficulty and costs in staffing and managing our international operations; ● difficulties in collecting accounts receivable and longer collection periods; ● health or similar issues, such as a pandemic or epidemic; ● various international trade restrictions and tax consequences; ● hostilities or geopolitical conflicts in various parts of the world, such as the ongoing war between the United States and Iran, the ongoing war between Russia and Ukraine, and continuing geopolitical instability and hostilities in the Middle East; and ● reduced intellectual property protections in some countries.

and 118 more.

Gone since FY2025

These macroeconomic developments negatively affected, and could continue to negatively affect, our business, operating results or financial condition which, in turn, could adversely affect our stock price.
A general weakening of, and related declining corporate confidence in, the global economy or the curtailment in government or corporate spending could cause current or potential customers to reduce their technology budgets or be unable to fund software or services purchases, which could cause customers to delay, decrease or cancel purchases of our products and services or cause customers to not pay us or to delay paying us for previously purchased products and services.
Other factors that may cause our revenue and operating results to fluctuate include: ● timing of customer budget cycles; ● the priority our customers place on our products compared to other business investments; ● size, timing and contract terms of new customer contracts, and unpredictable and often lengthy sales cycles; ● reduced renewals; ● competitive factors, including new product introductions, upgrades and discounted pricing or special payment terms offered by our competitors, as well as strategic actions by us or our competitors, such as acquisitions, divestitures, spin-offs, joint ventures, strategic investments or changes in business strategy; ● technical difficulties, errors or service interruptions in our solutions that may cause customer dissatisfaction with our solutions; ● consolidation among our customers, which may alter their buying patterns, or business failures that may reduce demand for our solutions; ● operating expenses associated with expansion of our sales force or business, and our product development efforts; ● cost, timing and management efforts related to the introduction of new features to our solutions; ● our ability to obtain, maintain and protect our intellectual property rights and adequately safeguard the information imported to our solutions or otherwise provided to us by our customers; and ● extraordinary expenses such as impairment charges, litigation or other payments related to settlement of disputes. Any of these developments may adversely affect our revenue, operating results and financial condition.
In such cases, we may be required to defer revenue recognition on sales to affected customers.
In the future, we may have to record additional reserves or write-offs, or defer revenue on sales transactions, which could negatively impact our financial results.
If customers choose not to renew, or reduce, their subscriptions, our operating results and financial results will suffer. The deferral or loss of one or more significant orders can also materially adversely affect our operating results, especially in a given quarter.
In addition, our business is subject to seasonal factors that may also cause our results to fluctuate from quarter to quarter. We cannot accurately predict subscription renewal rates and the impact these rates may have on our future revenue and operating results.
In addition, our customers may choose to renew for fewer subscriptions (in quantity or products) or renew for shorter contract lengths.
We cannot accurately predict renewal rates given our varied customer base of enterprise and the number of multiyear subscription contracts.
Our renewal rates may decline or fluctuate as a result of a number of factors, including customer dissatisfaction with our service, decreases in customers’ spending levels, decreases in the number of users at our customers, pricing changes and general economic conditions.
If our customers do not renew their subscriptions for our service or reduce the number of paying subscriptions at the time of renewal, our revenue will decline, and our business will suffer.
The long sales cycle for our products may cause SaaS revenue and operating results to vary significantly from period to period.
This contributes to the uncertainty and fluctuations in our future operating results.
We have in the past and expect in the future to derive a substantial portion of our revenue from sales to a relatively small number of customers.
The loss of any significant customer or a decline in business with any significant customer would materially and adversely affect our financial condition and results of operations.
While software internally developed by enterprises represents indirect competition, we also compete directly with packaged application software vendors, including Genesys Telecommunications Laboratories, Inc., LivePerson, Inc., NICE Ltd., and Verint Systems Inc.
In addition, we face actual or potential competition from larger software companies such as Microsoft Corporation, Oracle Corporation, salesforce.com, Inc., ServiceNow, Inc., and similar companies that may attempt to sell customer engagement software to their installed base.
With more established and better-financed competitors, these companies may be able to undertake more extensive marketing campaigns, adopt more aggressive pricing policies, and make more attractive offers to businesses to induce them to use their products or services.
We expect AI technology and services to be a highly competitive and rapidly evolving market.
We will bear significant development and operational costs to build and support the generative AI capabilities, products, and services necessary to meet the needs of our customers.
Such competitive pressure may cause decreased sales volumes, price reductions, and/or increased operating costs, such as for research and development, marketing, and sales activities.
This may lead to lower revenue, gross margins, and operating income.
In addition, customers are currently assessing their AI utilization strategy, so it is difficult to estimate with any reasonable degree of precision the impact of generative AI product offerings on our future revenue, the expected timing or demand for our products and services, and the extent to which customer investment in AI-enabled solutions may displace or accelerate purchases of our existing offerings.
For example, workforce reductions and turnover as recently as late fiscal year ended June 30, 2025 may limit our capacity to develop and maintain awareness of our products in a cost-effective manner, which could hinder widespread adoption of our existing and future products.
This may result in a failure to expand and attract new customers and enhance relationships with existing customers.
This may impede our efforts to improve operations in our other areas and may result in declines in the market price of our common stock.
If we are unable to do so for any reason, including as a result of any change in the leadership of our distribution partners, or if any existing or future distribution partners fail to successfully market, resell, implement or support our products for their customers, or if distribution partners represent multiple providers and devote greater resources to market, resell, implement and support competing products and services, our future revenue growth could be impeded.
To the extent we devote resources to these relationships and the partnerships do not proceed as anticipated or provide revenue or other results as anticipated, our business may be harmed.
Once partnerships are forged, there can be no guarantee that such relationships will be renewed in the future or available on acceptable terms.
If an arrangement requires significant customization or implementation services from us, recognition of the associated subscription and service revenue could be delayed.
Some customers may also require us to develop customized features or capabilities.
Revenue from EMEA sales remained consistent at 22% of our total revenue during the fiscal years ended June 30, 2025 and 2024.
In addition to those discussed elsewhere in this section, our EMEA sales operations are subject to a number of specific risks, such as: ● general economic conditions in each country or region in which we do or plan to do business; ● foreign currency fluctuations and imposition of exchange controls; ● changes in data privacy laws including European Union’s General Data Protection Regulation (GDPR) and other emerging privacy or AI-related regulations; ● difficulty and costs in staffing and managing our international operations; ● difficulties in collecting accounts receivable and longer collection periods; ● health or similar issues, such as a pandemic or epidemic; ● various international trade restrictions and tax consequences; ● hostilities or geopolitical conflicts in various parts of the world, such as the ongoing conflict between Russia and Ukraine and the evolving events in Israel and Gaza; and ● reduced intellectual property protections in some countries.
Any of the above risks could adversely affect our international operations, reduce our revenue from customers outside of the U.S. or increase our operating costs, each of which could adversely affect our business, results of operations, financial condition, and growth prospects.
As of June 30, 2025, approximately 43% of our workforce was employed in India.
Of our employees in India, 45% are allocated to research and development.
Although the movement of certain operations internationally was principally motivated by cost cutting, the continued management of these remote operations requires significant management attention and financial resources that could adversely affect our operating performance.
In addition, with the significant increase in the numbers of foreign businesses that have established operations in India, the competition to attract and retain employees there has increased significantly.
As a result of the increased competition for skilled workers, we experienced increased compensation costs and expect these costs to increase in the future.
In particular, sophisticated telecommunications links, high-speed data communications with other eGain offices and customers, and overall consistency and stability of our business infrastructure are vital to our day-to-day operations, and any impairment of such infrastructure will cause our financial condition and results to suffer.

and 614 more.

Sentence-level comparison of Item 1A in the two most recent 10-Ks (FY2025 ↗, FY2026 ↗). A reworded sentence counts as one dropped and one added, so heavy edits read as low “kept”. Headings and page furniture are stripped; nothing is summarised by a model.

Watch EGAN. Know when insiders buy.

One email the day a filing lands. Free.