eGain EGAN shares have rallied 31.6% in the past three months, outperforming the broader Zacks Computer & Technology sector’s return of 8.4% and the Zacks Internet - Software industry’s appreciation of 8.6%.

BILL shares have beat industry peers, including DoubleVerify DV and Blend Labs BLND.

DoubleVerify and Blend Labs shares have returned 16.6% and 7.9% over the same timeframe.

EGAN shares are benefiting from strong business momentum in the first quarter of 2025, driven by 16% year-over-year growth in annual recurring revenues for the AI Knowledge Hub segment.

eGain is focusing on product innovation and enhancing client relationships to capitalize on market opportunities wherein AI intersects with knowledge management. This strategy is aimed at driving growth and expanding its position in the AI-driven knowledge management sector.

AI Knowledge Hub Segment to Aid EGAN’s Prospects

eGain's revenue composition highlights the significant role of its AI Knowledge Hub, which contributes 50% of its total revenues. The remaining 50% is jointly generated by the Conversation Hub and Analytics Hub, showcasing a well-balanced product portfolio.

In the first quarter of fiscal 2025, EGAN achieved a 16% year-over-year increase in SaaS annual recurring revenues for its AI Knowledge Hub customers, indicating strong demand and customer retention in this segment. There was a significant rise in new bookings, reflecting robust demand for eGain's AI Knowledge Hub solutions.

eGain's AI Knowledge Hub has played a key role in attracting clients, with Virginia529 adopting the solution to enhance customer and advisor experiences. This highlights eGain's expanding presence in the financial services sector and the growing demand for AI-powered knowledge management solutions.

Product Innovation & Client Growth Drive eGain's Success

eGain launched the eGain AI Agent — an innovative conversational self-service product designed to strengthen customer self-service capabilities, positioning the company to capture the growing demand for AI-driven solutions in customer engagement.

In February 2024, eGain launched AssistGPT — a generative AI-driven solution aimed at automating tasks for knowledge authors, managers and customer service agents. By integrating generative AI into workflows, AssistGPT significantly reduces knowledge-building costs by up to 5X and doubles agent productivity, reflecting its potential to transform operational efficiency.    

EGAN serves a wide range of industries and organizations, showcasing its versatility and adaptability across different sectors. It highlights the company's credibility by showing that trusted brands like Goodyear (GT), Vodafone VOD, Barclays and Virgin Money rely on its products and services.

eGain achieved a 50% increase in client acquisitions in 2024 from the previous year. This growth highlights the rising demand for AI-driven knowledge management solutions.

EGAN Provides Cautious Optimism

For the second quarter of fiscal 2025, eGain expects total revenues between $22.2 million and $22.6 million. Non-GAAP earnings are anticipated between break-even to 2 cents per share.

The Zacks Consensus Estimate for revenues is pegged at $22.46 million, indicating a 5.71% year-over-year decline. The consensus mark for earnings is pegged at a loss of 1 cent per share, unchanged over the past 30 days.

For fiscal 2025, eGain expects total revenues between $92 million and $93 million. Non-GAAP earnings are projected between 17 cents and 20 cents per share.

The Zacks Consensus Estimate for revenues is pegged at $92.13 million, indicating a 0.73% year-over-year decline. The consensus mark for 2025 earnings is pegged at 6 cents per share, which has moved up 5 cents over the past 60 days.

EGAN has outperformed the Zacks Consensus Estimate in the trailing four quarters, with an impressive average earnings surprise of 187.50%. 

Find the latest EPS estimates and surprises on Zacks Earnings Calendar.

Conclusion

eGain's robust recurring revenue growth, strong new bookings and effective cost management showcase its operational excellence. By focusing on AI-driven solutions and consistently surpassing financial expectations, the company has positioned itself as a leader in service automation.

With its operational advancements and market positioning, EGAN demonstrates strong potential for sustained growth, making it a compelling choice for investors.

eGain currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

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