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| Share Name | Share Symbol | Market | Type |
|---|---|---|---|
| E2open Parent Holdings Inc | NYSE:ETWO | NYSE | Common Stock |
| Price Change | % Change | Share Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|
| 0.01 | 0.33% | 3.07 | 3.12 | 3.04 | 3.07 | 622,735 | 01:00:00 |
From Sep 2024 to Nov 2024
GAAP subscription revenue of $131.6 million at the high end of Q2 FY25 guidance range
E2open Parent Holdings, Inc. (NYSE: ETWO) (“e2open” or the “Company”), the connected supply chain SaaS platform with the largest multi-enterprise network, today announced financial results for its fiscal second quarter ended August 31, 2024.
“During the second fiscal quarter, e2open continued to execute our comprehensive, client-focused plan to re-position the company for strong organic growth, and we made important progress in key areas,” said Andrew Appel, e2open chief executive officer. “Notably, we met our plan for sequential improvement in our Q2 retention performance and are on track to improve further in Q3. Rigorous operational cadence around client management, as well as a cultural shift to make client success our top priority, are making a difference in this vital area. During Q2, we closed important subscription wins with cross-sell and new logo clients in diverse industries and increased quarterly subscription bookings both year over year and compared to the prior quarter, although we also experienced delays in closing certain large, complex deals due to extended client decision timelines. While we have more work to do to return to sustainable double-digit growth, we enjoy a strong market foundation of highly competitive solutions and an impressive blue-chip customer base that we will build on going forward.”
“In Q2 FY25, e2open delivered subscription revenue above the mid-point of our guidance and our adjusted EBITDA margins remained strong,” said Marje Armstrong, chief financial officer of e2open. “Our focused work to improve client retention, sales execution, and implementation excellence is resonating very well with our customer base. Given the extended timeline of large deal closures that we have experienced in the first half of this fiscal year, we are adjusting our FY25 subscription and services revenue guidance to take a more conservative view of full-year performance. We remain well positioned to build revenue momentum and close many of the delayed deals as we move through the fiscal year and as we work to complete our ongoing strategic review.”
Fiscal Second Quarter 2025 Financial Highlights
Recent Business Highlights
Financial Outlook for Fiscal Year 2025
As of October 9, 2024, e2open is updating full year 2025 guidance previously provided on April 29, 2024, and providing third quarter 2025 guidance as follows:
Fiscal 2025 and Fiscal Third Quarter GAAP Subscription Revenue
Fiscal 2025 Total GAAP Revenue
Fiscal 2025 Non-GAAP Gross Profit Margin
Fiscal 2025 Adjusted EBITDA
Quarterly Conference Call
E2open will host a conference call today at 5:00 p.m. ET to review fiscal second quarter 2025 financial results, in addition to discussing the Company’s outlook for the full fiscal year 2025. To access this call, dial 888-506-0062 (domestic) or 973-528-0011 (international). The conference ID is 101565. A live webcast of the conference call will be accessible in the “Investor Relations” section of e2open’s website at www.e2open.com. A replay of this conference call can also be accessed through October 23, 2024, at 877-481-4010 (domestic) or 919-882-2331 (international). The replay passcode is 51226. An archived webcast of this conference call will also be available after the completion of the call in the “Investor Relations” section of the Company’s website at www.e2open.com.
About e2open
E2open is the connected supply chain software platform that enables the world’s largest companies to transform the way they make, move, and sell goods and services. With the broadest cloud-native global platform purpose-built for modern supply chains, e2open connects more than 480,000 manufacturing, logistics, channel, and distribution partners as one multi-enterprise network tracking over 16 billion transactions annually. Our SaaS platform anticipates disruptions and opportunities to help companies improve efficiency, reduce waste, and operate sustainably. Moving as one.™ Learn More: www.e2open.com.
E2open and “Moving as one.” are the registered trademarks of E2open, LLC. All other trademarks, registered trademarks and service marks are the property of their respective owners.
Non-GAAP Financial Measures
This press release includes certain financial measures not presented in accordance with generally accepted accounting principles (“GAAP”) including non-GAAP revenue, non-GAAP subscription revenue, non-GAAP professional services and other revenue, adjusted EBITDA, adjusted EBITDA margin, non-GAAP gross profit, non-GAAP net income, non-GAAP gross margin, adjusted free cash flow and adjusted earnings per share. These non-GAAP financial measures are not a measure of financial performance in accordance with GAAP and may exclude items that are significant in understanding and assessing the Company’s financial results. Therefore, these measures should not be considered in isolation or as an alternative to net income, cash flows from operations or other measures of profitability, liquidity, or performance under GAAP. You should be aware that the Company’s presentation of these measures may not be comparable to similarly titled measures used by other companies.
The Company believes this non-GAAP measure of financial results provides useful information to management and investors regarding certain financial and business trends relating to the Company’s financial condition and results of operations. The Company believes that the use of these non-GAAP financial measures provides an additional tool for investors to use in evaluating ongoing operating results and trends in comparing the Company’s financial measures with other similar companies, many of which present similar non-GAAP financial measures to investors. These non-GAAP financial measures are subject to inherent limitations as they reflect the exercise of judgments by management about which expense and income are excluded or included in determining these non-GAAP financial measures.
NOTE: E2open is unable to quantify certain amounts that would be required to be included in the most directly comparable GAAP financial measures for non-GAAP gross profit margin or adjusted EBITDA without unreasonable effort, and therefore no reconciliation of certain forward-looking non-GAAP financial measures for non-GAAP gross profit margin or adjusted EBITDA is included.
Safe Harbor Statement
Certain statements in this press release are "forward-looking statements" within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended, and are subject to the safe harbor created thereby. These statements relate to future events or the Company's future financial performance and involve known and unknown risks, uncertainties and other factors that may cause the actual results, levels of activity, performance or achievements of the Company or its industry to be materially different from those expressed or implied by any forward-looking statements. In particular, statements about the Company's expectations, beliefs, plans, objectives, assumptions, future events or future performance contained in this press release are forward-looking statements. In some cases, forward-looking statements can be identified by terminology such as "may," "will," "could," "would," "should," "expect," "plan," "anticipate," "intend," "believe," "estimate," "predict," "potential," "outlook," "guidance" or the negative of those terms or other comparable terminology.
Please see the Company's documents filed or to be filed with the Securities and Exchange Commission, including the annual report filed on Form 10-K, and any amendments thereto for a discussion of certain important risk factors that relate to forward-looking statements contained in this press release. The Company has based these forward-looking statements on its current expectations, assumptions, estimates and projections. While the Company believes these expectations, assumptions, estimates, and projections are reasonable, such forward-looking statements are only predictions and involve known and unknown risks and uncertainties, many of which are beyond the Company's control. These and other important factors may cause actual results, performance or achievements to differ materially from those expressed or implied by these forward-looking statements. Any forward-looking statements are made only as of the date hereof, and unless otherwise required by applicable securities laws, the Company disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.
E2OPEN PARENT HOLDINGS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
Three Months Ended August 31,
(In thousands, except per share amounts)
2024
2023
Revenue
Subscriptions
$
131,555
$
134,734
Professional services and other
20,637
23,754
Total revenue
152,192
158,488
Cost of Revenue
Subscriptions
36,317
36,780
Professional services and other
16,531
17,844
Amortization of acquired intangible assets
24,699
24,698
Total cost of revenue
77,547
79,322
Gross Profit
74,645
79,166
Operating Expenses
Research and development
25,979
24,945
Sales and marketing
20,325
21,551
General and administrative
21,579
38,550
Acquisition-related expenses
1,720
18
Amortization of acquired intangible assets
20,143
19,993
Goodwill impairment
—
—
Intangible asset impairment
—
—
Total operating expenses
89,746
105,057
Loss from operations
(15,101
)
(25,891
)
Other income (expense)
Interest and other expense, net
(25,150
)
(25,517
)
Gain (loss) from change in tax receivable agreement liability
2,908
7,927
Gain from change in fair value of warrant liability
4,399
1,489
Gain (loss) from change in fair value of contingent consideration
2,040
1,260
Total other expense
(15,803
)
(14,841
)
Loss before income tax provision
(30,904
)
(40,732
)
Income tax (expense) benefit
(1,949
)
2,103
Net loss
(32,853
)
(38,629
)
Less: Net loss attributable to noncontrolling interest
(2,990
)
(3,757
)
Net loss attributable to E2open Parent Holdings, Inc.
$
(29,863
)
$
(34,872
)
Weighted-average common shares outstanding:
Basic
308,059
303,220
Diluted
308,059
303,220
Net loss attributable to E2open Parent Holdings, Inc. common shareholders per share:
Basic
$
(0.10
)
$
(0.12
)
Diluted
$
(0.10
)
$
(0.12
)
E2OPEN PARENT HOLDINGS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
(In thousands)
August 31, 2024
February 29, 2024
Assets
Cash and cash equivalents
$
142,164
$
134,478
Restricted cash
16,593
14,560
Accounts receivable, net
112,592
161,556
Prepaid expenses and other current assets
35,974
28,843
Total current assets
307,323
339,437
Goodwill
1,858,263
1,843,477
Intangible assets, net
753,166
841,031
Property and equipment, net
65,167
67,177
Operating lease right-of-use assets
17,658
21,299
Other noncurrent assets
29,903
29,234
Total assets
$
3,031,480
$
3,141,655
Liabilities, Redeemable Share-Based Awards and Stockholders' Equity
Accounts payable and accrued liabilities
$
82,234
$
90,594
Channel client deposits payable
16,593
14,560
Deferred revenue
170,990
213,138
Current portion of notes payable
11,283
11,272
Current portion of operating lease obligations
6,746
7,378
Current portion of financing lease obligations
2,171
1,448
Income taxes payable
8,756
584
Total current liabilities
298,773
338,974
Long-term deferred revenue
1,513
2,077
Operating lease obligations
13,563
17,372
Financing lease obligations
4,209
3,626
Notes payable
1,034,389
1,037,623
Tax receivable agreement liability
62,760
67,927
Warrant liability
6,553
14,713
Contingent consideration
18,268
18,028
Deferred taxes
48,952
55,586
Other noncurrent liabilities
1,052
602
Total liabilities
1,490,032
1,556,528
Commitments and Contingencies
Redeemable share-based awards
1,710
—
Stockholders' Equity
Class A common stock
31
31
Class V common stock
—
—
Series B-1 common stock
—
—
Series B-2 common stock
—
—
Additional paid-in capital
3,425,542
3,407,694
Accumulated other comprehensive loss
(32,178
)
(46,835
)
Accumulated deficit
(1,942,428
)
(1,873,703
)
Treasury stock, at cost
(2,473
)
(2,473
)
Total E2open Parent Holdings, Inc. equity
1,448,494
1,484,714
Noncontrolling interest
91,244
100,413
Total stockholders' equity
1,539,738
1,585,127
Total liabilities, redeemable share-based awards and stockholders' equity
$
3,031,480
$
3,141,655
E2OPEN PARENT HOLDINGS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
Six Months Ended August 31,
(In thousands)
2024
2023
Cash flows from operating activities
Net loss
$
(75,641
)
$
(399,513
)
Adjustments to reconcile net loss to net cash from operating activities:
Depreciation and amortization
107,058
107,168
Amortization of deferred commissions
4,400
2,758
Provision for credit losses
1,054
1,294
Amortization of debt issuance costs
2,640
2,640
Amortization of operating lease right-of-use assets
3,492
3,890
Share-based compensation
24,710
11,887
Deferred income taxes
(7,865
)
(72,721
)
Right-of-use assets impairment charge
576
549
Goodwill impairment charge
—
410,041
Indefinite-lived intangible asset impairment charge
—
4,000
Loss (gain) from change in tax receivable agreement liability
1,066
(5,467
)
Gain from change in fair value of warrant liability
(8,160
)
(16,169
)
Loss (gain) from change in fair value of contingent consideration
240
(10,260
)
Gain on operating lease termination
(126
)
(189
)
Loss (gain) on disposal of property and equipment
78
(147
)
Changes in operating assets and liabilities:
Accounts receivable
47,910
51,394
Prepaid expenses and other current assets
(9,482
)
(3,338
)
Other noncurrent assets
(5,069
)
(4,172
)
Accounts payable and accrued liabilities
(16,827
)
(7,825
)
Channel client deposits payable
2,033
11,451
Deferred revenue
(42,711
)
(33,296
)
Changes in other liabilities
(949
)
(2,714
)
Net cash provided by operating activities
28,427
51,261
Cash flows from investing activities
Capital expenditures
(12,277
)
(16,057
)
Net cash used in investing activities
(12,277
)
(16,057
)
Cash flows from financing activities
Repayments of indebtedness
(5,617
)
(5,587
)
Repayments of financing lease obligations
(841
)
(2,243
)
Proceeds from exercise of stock options
155
—
Net cash used in financing activities
(6,303
)
(7,830
)
Effect of exchange rate changes on cash and cash equivalents
(128
)
2,885
Net increase in cash, cash equivalents and restricted cash
9,719
30,259
Cash, cash equivalents and restricted cash at beginning of period
149,038
104,342
Cash, cash equivalents and restricted cash at end of period
$
158,757
$
134,601
E2OPEN PARENT HOLDINGS, INC.
RECONCILIATION OF PRO FORMA INFORMATION
TABLE I
(in millions)
Q2
Q2
$ Var
% Var
FY2025
FY2024
PRO FORMA REVENUE RECONCILIATION
Total GAAP Revenue
152.2
158.5
(6.3)
(4.0%)
Constant currency FX impact (1)
-
-
-
n/m
Total non-GAAP revenue (constant currency basis) (2)
$152.2
$158.5
($6.3)
(3.9%)
GAAP Subscription Revenue
131.6
134.7
(3.1)
(2.3%)
Constant currency FX impact (1)
-
-
-
n/m
Non-GAAP subscription revenue (constant currency basis) (2)
$131.6
$134.7
($3.1)
(2.3%)
GAAP Professional Services and other revenue
20.6
23.8
(3.1)
(13.1%)
Constant currency FX impact (1)
-
-
-
n/m
Non-GAAP professional services and other revenue (constant currency basis) (2)
$20.6
$23.8
($3.1)
(13.1%)
PRO FORMA GROSS PROFIT RECONCILIATION
GAAP Gross profit
74.6
79.2
(4.5)
(5.7%)
Depreciation and amortization
28.2
28.8
(0.6)
(2.0%)
Share-based compensation (3)
1.8
1.1
0.7
57.9%
Non-recurring/non-operating costs (4)
0.3
0.4
(0.1)
(23.3%)
Non-GAAP gross profit
$105.0
$109.5
($4.5)
(4.1%)
Non-GAAP Gross Margin %
69.0%
69.1%
Constant currency FX impact (1)
(0.1)
-
(0.1)
n/m
Total non-GAAP gross profit (constant currency basis) (2)
$104.9
$109.5
($4.6)
(4.2%)
Non-GAAP Gross Margin % (constant currency basis) (2)
68.9%
69.1%
PRO FORMA ADJUSTED EBITDA RECONCILIATION
Net income (loss)
(32.9)
(38.6)
5.8
n/m
Interest expense, net
24.5
24.7
(0.2)
(0.9%)
Income tax benefit
2.0
(2.1)
4.1
n/m
Depreciation and amortization
53.5
53.9
(0.4)
(0.7%)
EBITDA
$47.0
$37.8
$9.2
24.4%
Share-based compensation (3)
12.9
7.4
5.5
73.7%
Non-recurring/non-operating costs (4)
2.0
3.6
(1.6)
(44.7%)
Acquisition-related adjustments (5)
1.7
-
1.7
n/m
Change in tax receivable agreement liability (6)
(2.9)
(7.9)
5.0
(63.3%)
Change in fair value of warrant liability (7)
(4.4)
(1.5)
(2.9)
195.3%
Change in fair value of contingent consideration (8)
(2.0)
(1.3)
(0.8)
61.9%
Right-of-use assets impairment charge (9)
0.6
0.2
0.4
205.3%
Legal settlement (10)
-
17.8
(17.8)
n/m
Adjusted EBITDA
$54.9
$56.1
($1.2)
(2.2%)
Adjusted EBITDA Margin %
36.1%
35.4%
Constant currency FX impact (1)
(0.2)
-
(0.2)
n/m
Total adjusted EBITDA (constant currency basis) (2)
$54.7
$56.1
($1.4)
(2.5%)
Adjusted EBITDA Margin % (constant currency basis) (2)
35.9%
35.4%
(1) Constant Currency refers to pro forma amounts excluding the impact of translating foreign currencies into U.S. dollars. To calculate foreign currency translation on a constant currency basis, operating results for the current year period for entities reporting in currencies other than the U.S. dollar are translated into U.S. dollars at the exchange rates in effect during the comparable period of the prior year (rather than the actual exchange rates in effect during the current year period).
(2) Constant Currency refers to pro forma amounts excluding translation and transactional impacts from foreign currency exchange rates.
(3) Reflects non-cash, long-term share-based compensation expense.
(4) Primarily includes non-recurring expenses such as the non-acquisition severance related to cost reduction initiatives, reorganizations and executive transition costs; foreign currency transaction gains and losses; systems integrations; legal entity rationalization and non-recurring consulting and advisory fees.
(5) Primarily includes advisory, consulting, accounting and legal expenses incurred in connection with the strategic review.
(6) Represents the fair value adjustment at each balance sheet date for the Tax Receivable Agreement along with the associated interest.
(7) Represents the fair value adjustment at each balance sheet date of the warrant liability related to our warrants.
(8) Represents the fair value adjustment at each balance sheet date of the contingent consideration liability related to the restricted B-2 common stock and Series 2 RCUs.
(9) Represents the impairment on our operating lease ROU assets and leasehold improvements due to vacating certain facilities.
(10) Represents the $17.8 million litigation settlement for the unfavorable arbitration ruling related to the Kewill customer case.
E2OPEN PARENT HOLDINGS, INC.
RECONCILIATION OF NON-GAAP EXPENSES
TABLE II
Fiscal Second Quarter 2025
(in millions)
GAAP
Non-
recurring(1)
Depreciation
&
Amortization
Share-Based
Compensation
Non-
GAAP
(Adjusted)
% of
Revenue
Impairment
Charges(2)
COST OF GOODS
Subscriptions
36.3
(0.2)
-
(3.3)
(1.1)
31.7
24.1%
Professional services and other
16.5
(0.2)
-
(0.2)
(0.7)
15.5
74.9%
Amortization of intangibles
24.7
-
-
(24.7)
-
-
Total cost of revenue
$77.6
($0.3)
-
($28.2)
(1.8)
$47.2
31.0%
Gross Profit
$74.6
$0.3
-
$28.2
$1.8
$105.0
69.0%
OPERATING COSTS
Research & development
26.0
(0.6)
-
(4.6)
(2.5)
18.3
12.0%
Sales & marketing
20.3
(0.2)
-
(0.3)
(2.3)
17.5
11.5%
General & administrative
21.6
(0.1)
(0.6)
(0.2)
(6.4)
14.4
9.4%
Acquisition related expenses
1.7
(1.7)
-
-
-
-
Amortization of intangibles
20.1
-
-
(20.1)
-
-
Total operating expenses
$89.7
($2.6)
($0.6)
($25.3)
($11.1)
$50.1
32.9%
(1) Primarily includes non-recurring expenses such as the non-acquisition severance related to cost reduction initiatives, reorganizations and executive transition costs; foreign currency transaction gains and losses; systems integrations; legal entity rationalization and non-recurring consulting and advisory fees.
(2) Represents the impairment on our operating lease ROU assets and leasehold improvements due to vacating certain facilities.
E2OPEN PARENT HOLDINGS, INC.
RECONCILIATION OF ADJUSTED EARNINGS PER SHARE
TABLE III
(in millions, except per share amounts)
Q2 25
GAAP Net income (loss)
(32.9)
Interest expense, net
24.5
Income taxes benefit
2.0
Depreciation & amortization
53.5
EBITDA
$47.0
Share-based compensation
12.9
Non-recurring/non-operating costs
2.0
Acquisition-related adjustments
1.7
Change in tax receivable agreement liability
(2.9)
Change in fair value of warrant liability
(4.4)
Change in fair value of contingent consideration
(2.0)
Right-of-use assets impairment charge
0.6
Adjusted EBITDA
$54.9
Depreciation
(8.6)
Interest and other expense, net
(24.5)
Normalized income taxes (1)
(5.2)
Adjusted Net Income
$16.6
Adjusted basic shares outstanding
345.3
Adjusted earnings per share
$0.05
(1) Income taxes calculated using 24% effective rate.
E2OPEN PARENT HOLDINGS, INC.
ADJUSTED FREE CASH FLOW
TABLE IV
(in millions)
Q1 25
Q2 25
Q2 YTD
GAAP operating cash flow
35.9
(7.5)
28.4
Add: Non-recurring cash payments (1)
4.3
2.9
7.2
Add: Change in channel client deposits payable (2)
(1.2)
(0.9)
(2.0)
Adjusted operating cash flow
$39.1
($5.5)
$33.6
Capital expenditures
(6.1)
(6.2)
(12.3)
Adjusted free cash flow
$33.0
($11.6)
$21.3
(1) Primarily includes non-recurring expenses such as the non-acquisition severance related to cost reduction initiatives, reorganizations and executive transition costs; foreign currency transaction gains and losses; systems integrations; legal entity rationalization and non-recurring consulting and advisory fees.
(2) Channel Client Deposits Payable represents client deposits for the incentive payment program associated with the Company's channel shaping application. The Company offers services to administer incentive payments to partners on behalf of the Company’s clients. The Company’s clients deposit these funds into a restricted cash account with an offset included as a liability in incentive program payable in the Consolidated Balance Sheets.
E2OPEN PARENT HOLDINGS, INC.
CONSOLIDATED CAPITAL
TABLE V
Description
Shares (000's)
Notes
Shares outstanding as of August 31, 2024
308,605
Shares outstanding
Common Units
30,692
Units issued in the Business Combination that have not been converted from common units to Class A common stock (Common units are represented by Class V shares).
Series B-2 Shares (unvested)
3,372
Represents the right to acquire shares of Class A common stock when the 20-day VWAP reaches $15.00 per share.
Restricted Common Units Series 2 (unvested)
2,628
Represents the right in E2open Holdings, LLC that converts into common units when the 20-day VWAP reaches $15.00. Upon conversion to common units, the holders can elect to convert the common units to Class A common stock.
Adjusted Basic Shares
345,297
Warrants
29,080
Outstanding warrants with an exercise price of $11.50.
Options (vested/unreleased and unvested)
6,305
Options issued to management under the long-term incentive plan.
Restricted Shares (vested/unreleased and unvested)
17,802
Restricted shares issued to employees, management and directors under the long-term incentive plan.
Fully Converted Shares
398,484
View source version on businesswire.com: https://www.businesswire.com/news/home/20241009461585/en/
Investor Contact Dusty Buell dusty.buell@e2open.com investor.relations@e2open.com
Media Contact 5W PR for e2open e2open@5wpr.com 408-504-7707
Corporate Contact Kristin Seigworth VP Communications, e2open kristin.seigworth@e2open.com pr@e2open.com
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