eGain offers a cash-backed, governed-AI turnaround with 26% core ARR growth, expanding margins and substantial upside if enterprise RFP conversion accelerates.
Overview
eGain Corporation (EGAN) is a subscription-led SaaS provider of AI-powered knowledge management and customer engagement automation for Global 2000 enterprises and government institutions. Approximately 93% of revenue is SaaS, 78% comes from North America, and more than 87% of cloud ARR is generated by customers with over $1 billion of annual revenue or equivalent public-sector organizations. **The core AI Knowledge business is growing 26% year over year to $48.0 million of ARR**, now 64% of SaaS ARR, while legacy product sunsetting makes consolidated growth appear modest. FQ3 2026 revenue rose 7% to $22.5 million, non-GAAP diluted EPS was $0.11 versus a $0.07 consensus estimate, adjusted EBITDA margin expanded to 14% from 6%, and year-to-date operating cash flow reached $18.7 million. **The balance sheet provides unusual downside protection**, with $80.5 million of cash and zero debt reported. At $6.57, the stock implies approximately 1.17x FY26 EV/sales and 15.7x non-GAAP EPS, versus a 3.5x sector P/S average. Near-term catalysts include U.S. RFP conversion, completion of legacy sunsetting, Agentic Studio adoption and buybacks; the principal counterweight is competition from native Salesforce and Zendesk AI.