eGain Q4 Revenue Up With JPMorgan Win

eGain(NASDAQ:EGAN) reported fourth quarter 2025 results on Sept. 4, 2025, with total revenue (GAAP) rising 11% sequentially and 3% year over year to $23.2 million, and a record non-GAAP Software-as-a-Service (SaaS) gross margin of 80%. The company announced a marquee design partnership with JPMorgan Chase (NYSE:JPM) in April, outlined the sunset of its legacy messaging product, and guided for a return to full-year revenue growth in fiscal 2026 (period ending June 30, 2026), with annual recurring revenue (ARR) in its core AI knowledge business expected to grow 20% or more.

AI knowledge ARR accelerates as legacy messaging sunsets

ARR from AI knowledge customers increased 25% year over year, reaching nearly 60% of total company ARR as of September 2025. Net dollar-based SaaS retention for these customers improved to 115% for the last twelve months, up from 98% a year earlier. Management guided for approximately $4.7 million in current ARR from the legacy messaging product to run off throughout fiscal 2026, beginning in the second quarter.

"SaaS ARR from knowledge customers increased 25% year over year or 22% in constant currency, while SaaS ARR for all customers increased 11% year over year or 9% in constant currency. Turning to our net retention rates, LTM dollar-based SaaS net retention for knowledge customers was 115% or 112% in constant currency, up from 98% a year ago, while net retention for all customers was 105% or 103% in constant currency, up from 88% a year ago."
-- Eric Smith, CFO

This rapid growth in AI knowledge ARR and improved retention rates (now at 115%) highlights the company's successful transition away from legacy products and its ability to drive higher-value, recurring revenue streams.

JPMorgan Chase partnership expands eGain’s strategic reach

The partnership with JPMorgan Chase represents one of the largest deals in company history, expanding eGain’s footprint from discrete business units to a company-wide AI knowledge hub. The agreement included collaborative product development, warrant grants to JPMorgan Chase in August, and the addition of a JPMorgan Chase board observer to inform next-generation product direction for the broader market.

"Our AI Knowledge Hub will now serve all bank employees in their U.S. Chase business. What is exciting for us is that we are now actively partnering with JPMorgan Chase to improve customer experience and drive AI efficiencies across the business. To strengthen this partnership, we issued warrants to JPMC in August, and they agreed to nominate a senior executive to join our eGain board as an observer."
-- Ashu Roy, CEO

This strategic relationship positions eGain to benefit from JPMorgan Chase’s scale and expertise, while also accelerating product innovation and enhancing credibility with other large enterprise customers.

Gross margin expands as cloud migration and automation drive efficiency

Total gross margin rose to 73% in the fourth quarter, up from 71% a year ago, with non-GAAP SaaS gross margin reaching 80%, up from 76%. Non-GAAP operating costs declined 2% year over year, even as research and development (R&D) spending increased 15% for the full year. The migration of all customers to a new cloud architecture and increased AI-driven automation have resulted in sustained improvements to the company’s cost structure.

"We completed our migration of all clients over to the new architecture, the new cloud platform that we have been working on for a few couple of years now. So we had mentioned that in the past. So that is one place where we are seeing benefits, which now will continue to be there. Right? So, that's one. But the second one is, with not just AI, but also our ability to develop new product and capabilities faster, we are automating the process of supporting and operating our cloud and being much more efficient on the cloud resources that we are using. All three of those. And so that is another big chunk of improvement if we are able to create on a sustainable basis."
-- Ashu Roy, CEO

These operational improvements are expected to support further gross margin expansion and enable continued investment in product development without increasing the overall cost base.

Looking Ahead

Management guides for total revenue of $90.5 million to $92 million in fiscal 2026 (ending June 30, 2026), GAAP net income of $3.5 million to $5 million, adjusted EBITDA of $10.4 million to $11.9 million, and non-GAAP net income of $8.3 million to $9.8 million. Gross margin is forecasted to expand to 74% to 75%, and core AI knowledge ARR is expected to grow 20% or more year over year, partially offset by the full-year wind-down of approximately $4.7 million ARR from legacy messaging. R&D investment will increase by about 6% year over year, while adjusted EBITDA is targeted to rise by 20% to 40% year over year.

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JPMorgan Chase is an advertising partner of Motley Fool Money. Motley Fool Markets Team is a Foolish AI, based on a variety of Large Language Models (LLMs) and proprietary Motley Fool systems. The Motley Fool takes ultimate responsibility for the content of these articles. Motley Fool Markets Team cannot own stocks and so it has no positions in any stocks mentioned. The Motley Fool has positions in and recommends JPMorgan Chase. The Motley Fool has a disclosure policy.