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E2open Announces Fiscal 2025 First Quarter Financial Results

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E2open reported its fiscal first quarter 2025 results, with GAAP subscription revenue at $131.4 million, within the guidance range but a decrease of 2.6% year-over-year. Total GAAP revenue was $151.2 million, down 5.6% from the previous year. GAAP gross profit was $72.7 million, an 8.5% decline, and GAAP net loss was $42.8 million, improving from a $360.9 million loss last year. Adjusted EBITDA was $50.7 million, down 5.7%, with a margin of 33.6%.

E2open emphasized its ongoing strategy to boost organic growth and client retention, with significant long-term contracts and new subscription business secured. Strategic review efforts continue, with results expected soon. The company reiterated its fiscal 2025 guidance, projecting flat GAAP subscription revenue growth and a 0.5% increase in total GAAP revenue year-over-year.

Key achievements include a new global trade program with a top retailer, major client contract renewals, and the launch of the Supply Network Discovery solution.

Positive
  • Secured long-term contract extensions and new subscription business in Q1 FY25.
  • Adjusted EBITDA margin remained strong at 33.6%.
  • GAAP net loss improved significantly from $360.9 million to $42.8 million year-over-year.
  • Launched Supply Network Discovery solution aiding compliance and supply assurance.
  • Secured a new global trade program with a leading retailer.
Negative
  • GAAP subscription revenue decreased by 2.6% year-over-year.
  • Total GAAP revenue declined by 5.6% from the previous year.
  • GAAP gross profit dropped by 8.5% year-over-year.
  • Adjusted EBITDA decreased by 5.7% year-over-year.
  • GAAP gross margin declined from 49.6% to 48.1% year-over-year.

Key Financials and Projections: E2open's first quarter financial results highlight several important trends. GAAP subscription revenue stood at $131.4 million, which is within the company’s guidance but represents a decrease of 2.6% from the previous year. Total GAAP revenue also dipped by 5.6%. However, the company's commitment to its growth plan is evident. Notably, the GAAP net loss reduction from $360.9 million to $42.8 million reflects a significant improvement. The adjusted EPS of $0.04 demonstrates a modest profit in non-GAAP terms.

Cash Flow and Margins: E2open generated strong cash flow in Q1 FY25, signaling robust operational efficiency. The GAAP gross margin slippage from 49.6% to 48.1% and adjusted EBITDA margin consistency at 33.6% might concern some investors but indicates a stable underlying business.

Forward Guidance: The affirmation of FY25 guidance with flat growth projected for GAAP subscription revenue at $532-$542 million and marginal growth in total GAAP revenue is a conservative but realistic outlook. Investors should be mindful of the anticipated 0.5% total revenue growth, indicating the company is focusing more on strategic improvements rather than aggressive expansion.

In conclusion, the financial landscape of E2open suggests cautious optimism. The company is stabilizing and laying groundwork for future growth, but the current declines in revenue and gross profit highlight the challenges ahead.

Market Position and Strategy: E2open's ability to secure long-term contract renewals and win new business, particularly with major global clients, speaks volumes about its market reputation and strategic direction. The recent win with one of the world's largest retailers and expanded business with significant players in the automotive and technology sectors indicate the firm's strong competitive position.

Product Innovation: The launch of the Supply Network Discovery solution showcases E2open's commitment to addressing client needs through innovative solutions. This product is designed to enhance regulatory compliance and supply chain resilience, which are critical factors for modern enterprises. The integration with global trade automation and customs filing solutions adds substantial value for existing and potential customers.

Client-Centric Focus: The emphasis on client satisfaction and retention is a strategic move. E2open's proactive approach to improving client relationships and securing contract extensions is likely to pay off in the long term. This strategy not only helps in stabilizing current revenue streams but also sets the stage for organic growth.

Overall, E2open's market strategy and product innovation are important strengths. The company's focus on client relationships and regulatory compliance solutions aligns well with market needs, positioning it favorably for future growth.

GAAP subscription revenue of $131.4 million within Q1 FY25 guidance range

Strong cash flow generation in Q1 FY25

AUSTIN, Texas--(BUSINESS WIRE)-- 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 first quarter ended May 31, 2024.

“During the fiscal first quarter, e2open continued to make progress on our multi-quarter plan to return to strong, sustainable organic growth,” said Andrew Appel, e2open chief executive officer. “We have successfully put in place a disciplined operational cadence and a client-centric mindset designed to restore retention to our normal historical levels. Due to our proactive approach, we are on track for material improvements in retention metrics through the end of FY25. We are prioritizing and investing in e2open’s most important asset – our client relationships – and in Q1, this enabled us to improve client satisfaction and secure long-term contract extensions to support future growth. We closed important new subscription business in Q1, and although we experienced some temporary deal closure delays, we have already closed a number of those delayed deals in June. We remain confident in our strong market position and are moving forward aggressively with our client-focused growth re-acceleration plan.”

“In Q1 FY25, e2open delivered subscription revenue at the mid-point of our guidance,” said Marje Armstrong, chief financial officer of e2open. “Adjusted EBITDA margins remained strong and our Q1 cash generation was very robust. Our sound underlying business fundamentals provide important support for the changes we are making to improve client retention, sales execution, and implementation excellence. Gaining traction with these changes, we remain well positioned to build booking and revenue momentum as we move through the fiscal year.”

Armstrong also noted continued engagement in the strategic review that e2open announced in March, anticipating its completion in the near future. “We look forward to being able to share the outcome of the review with our customers, employees, and shareholders as soon as appropriate.”

Fiscal First Quarter 2025 Financial Highlights

  • Revenue
    • GAAP subscription revenue for the first quarter of 2025 was $131.4 million, a decrease of 2.6% from the year-ago comparable period and 86.9% of total revenue.
    • Total GAAP revenue for the first quarter of 2025 was $151.2 million, a decrease of 5.6% from the year-ago comparable period.
  • GAAP gross profit for the first quarter of 2025 was $72.7 million, a decrease of 8.5% from the year-ago comparable period. Non-GAAP gross profit was $102.6 million, down 7.1%.
  • GAAP gross margin for the first quarter of 2025 was 48.1% compared to 49.6% from the year-ago comparable period. Non-GAAP gross margin was 67.8% compared to 69.0% from the comparable year-ago period.
  • GAAP Net loss for the first quarter of 2025 was $42.8 million compared to $360.9 million from the year-ago comparable period. Adjusted EBITDA for the first quarter of 2025 was $50.7 million, a decrease of 5.7% from the year-ago comparable period. Adjusted EBITDA margin was 33.6% consistent with the comparable year-ago period.
  • GAAP EPS for the first quarter of 2025 was a loss of $0.13. Adjusted EPS for the first quarter of 2025 was $0.04.

Recent Business Highlights

  • Selected by one of the world’s largest retailers in a new logo win for e2open, to provide a global trade program with customs filing and trade automation solutions in multiple countries to support their business priorities.
  • Expanded business with several major clients including a large, multi-year renewal with a global technology manufacturer, and a top multinational manufacturer in the automotive industry that selected e2open’s Supplier Network Discovery solution to address regulatory compliance and supply assurance risk.
  • Launched Supply Network Discovery, a new solution that helps clients meet regulatory compliance requirements and strengthen their supply assurance with capabilities to discover, map, trace, and assess multiple tiers of suppliers. The e2open Supply Network Discovery application and its supply collaboration platform help brand owners and their supply partners share the strategic information necessary to get components, raw materials, and products where they are needed most and avoid risk of disruptions.
  • Released quarterly product update 24.2, including the launch of Supply Network Discovery plus enhancements across the platform including: updates to customs filing capabilities supporting modernization initiatives for the US 21st Century Customs Framework (21CCF), the United Kingdom Customs Declaration System, Germany ATLAS, Netherlands AES, Italy NCTS and the EU’s ICS2 Import Control System; sustainability calculation tools to support tariff due diligence and decision-making considerations to reduce carbon footprint; upgraded capabilities for shippers to view and take action on electronic bills of lading via e2open’s ocean booking platform.
  • Recognized customers and partners at annual award program during international customer conference for supply chain innovations and transformations that accelerate their business outcomes, including: JLR for Connected Supply Chain; Sanofi for Supply Chain Innovator; RS Group for Supply Chain Visibility; Goikid Consulting for Connected Supply Chain Partner; and Shippeo for Supply Chain Alliance Partner.
  • Achieved interoperability certification on Catena-X, an open data ecosystem for the automotive industry to support multi-tier supplier collaboration. E2open is the first supply chain software provider to be certified outside of founding Catena-X members.

Financial Outlook for Fiscal Year 2025

As of July 10, 2024, e2open is reiterating full year 2025 guidance previously provided on April 29, 2024, and providing second quarter 2025 guidance as follows:

Fiscal 2025 and Second Quarter GAAP Subscription Revenue

  • GAAP subscription revenue for fiscal 2025 is expected to be in the range of $532 million to $542 million, reflecting flat growth year over year at the mid-point.
  • GAAP subscription revenue for the fiscal second quarter of 2025 is expected to be in the range of $129 million to $132 million, reflecting a negative 3.1% organic growth rate at the mid-point.

Fiscal 2025 Total GAAP Revenue

  • Total GAAP revenue for fiscal 2025 is expected to be in the range of $630 million to $645 million, reflecting a 0.5% organic growth rate at the mid-point.

Fiscal 2025 Non-GAAP Gross Profit Margin

  • Non-GAAP gross profit margin for fiscal 2025 is expected to be in the range of 68% to 70%.

Fiscal 2025 Adjusted EBITDA

  • Adjusted EBITDA for fiscal 2025 is expected to be in the range of $215 million to $225 million, reflecting an implied adjusted EBITDA margin in the range of 34% to 35%.

Quarterly Conference Call

E2open will host a conference call today at 5:00 p.m. ET to review fiscal first 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 721473. 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 July 24, 2024, at 877-481-4010 (domestic) or 919-882-2331 (international). The replay passcode is 50762. 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 May 31,

(In thousands, except per share amounts)

2024

2023

Revenue

Subscriptions

$

131,404

 

$

134,903

 

Professional services and other

 

19,759

 

 

25,217

 

Total revenue

 

151,163

 

 

160,120

 

Cost of Revenue

Subscriptions

 

37,099

 

 

36,544

 

Professional services and other

 

16,752

 

 

19,528

 

Amortization of acquired intangible assets

 

24,652

 

 

24,630

 

Total cost of revenue

 

78,503

 

 

80,702

 

Gross Profit

 

72,660

 

 

79,418

 

Operating Expenses

Research and development

 

24,797

 

 

25,866

 

Sales and marketing

 

20,996

 

 

19,558

 

General and administrative

 

23,343

 

 

22,125

 

Acquisition-related expenses

 

283

 

 

389

 

Amortization of acquired intangible assets

 

20,086

 

 

20,128

 

Goodwill impairment

 

 

 

410,041

 

Intangible asset impairment

 

 

 

4,000

 

Total operating expenses

 

89,505

 

 

502,107

 

Loss from operations

 

(16,845

)

 

(422,689

)

Other income (expense)

Interest and other expense, net

 

(25,373

)

 

(25,726

)

Loss from change in tax receivable agreement liability

 

(3,974

)

 

(2,460

)

Gain from change in fair value of warrant liability

 

3,761

 

 

14,680

 

(Loss) gain from change in fair value of contingent consideration

 

(2,280

)

 

9,000

 

Total other expense

 

(27,866

)

 

(4,506

)

Loss before income tax benefit

 

(44,711

)

 

(427,195

)

Income tax benefit

 

1,923

 

 

66,311

 

Net loss

 

(42,788

)

 

(360,884

)

Less: Net loss attributable to noncontrolling interest

 

(3,926

)

 

(35,489

)

Net loss attributable to E2open Parent Holdings, Inc.

$

(38,862

)

$

(325,395

)

 

Weighted-average common shares outstanding:

Basic

 

306,732

 

 

302,502

 

Diluted

 

306,732

 

 

302,502

 

Net loss attributable to E2open Parent Holdings, Inc. common
shareholders per share:

Basic

$

(0.13

)

$

(1.08

)

Diluted

$

(0.13

)

$

(1.08

)

E2OPEN PARENT HOLDINGS, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)

 

(In thousands)

May 31, 2024

February 29, 2024

Assets

Cash and cash equivalents

$

160,203

 

$

134,478

 

Restricted cash

 

15,737

 

 

14,560

 

Accounts receivable, net

 

111,359

 

 

161,556

 

Prepaid expenses and other current assets

 

33,072

 

 

28,843

 

Total current assets

 

320,371

 

 

339,437

 

Goodwill

 

1,845,209

 

 

1,843,477

 

Intangible assets, net

 

796,551

 

 

841,031

 

Property and equipment, net

 

65,638

 

 

67,177

 

Operating lease right-of-use assets

 

19,629

 

 

21,299

 

Other noncurrent assets

 

29,669

 

 

29,234

 

Total assets

$

3,077,067

 

$

3,141,655

 

Liabilities, Redeemable Share-Based Awards and Stockholders' Equity

Accounts payable and accrued liabilities

$

85,112

 

$

90,594

 

Channel client deposits payable

 

15,737

 

 

14,560

 

Deferred revenue

 

187,197

 

 

213,138

 

Current portion of notes payable

 

11,277

 

 

11,272

 

Current portion of operating lease obligations

 

6,996

 

 

7,378

 

Current portion of financing lease obligations

 

1,473

 

 

1,448

 

Income taxes payable

 

5,748

 

 

584

 

Total current liabilities

 

313,540

 

 

338,974

 

Long-term deferred revenue

 

1,615

 

 

2,077

 

Operating lease obligations

 

15,799

 

 

17,372

 

Financing lease obligations

 

3,248

 

 

3,626

 

Notes payable

 

1,036,007

 

 

1,037,623

 

Tax receivable agreement liability

 

72,394

 

 

67,927

 

Warrant liability

 

10,952

 

 

14,713

 

Contingent consideration

 

20,308

 

 

18,028

 

Deferred taxes

 

49,767

 

 

55,586

 

Other noncurrent liabilities

 

1,052

 

 

602

 

Total liabilities

 

1,524,682

 

 

1,556,528

 

Commitments and Contingencies

Redeemable share-based awards

 

930

 

 

 

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

 

3,415,627

 

 

3,407,694

 

Accumulated other comprehensive loss

 

(44,341

)

 

(46,835

)

Accumulated deficit

 

(1,912,565

)

 

(1,873,703

)

Treasury stock, at cost

 

(2,473

)

 

(2,473

)

Total E2open Parent Holdings, Inc. equity

 

1,456,279

 

 

1,484,714

 

Noncontrolling interest

 

95,176

 

 

100,413

 

Total stockholders' equity

 

1,551,455

 

 

1,585,127

Total liabilities, redeemable share-based awards and stockholders' equity

$

3,077,067

 

$

3,141,655

E2OPEN PARENT HOLDINGS, IN

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

 

Three Months Ended May 31,

(In thousands)

2024

2023

Cash flows from operating activities

Net loss

$

(42,788

)

$

(360,884

)

Adjustments to reconcile net loss to net cash from operating activities:

Depreciation and amortization

 

53,605

 

 

53,319

 

Amortization of deferred commissions

 

2,109

 

 

1,344

 

Provision for credit losses

 

151

 

 

69

 

Amortization of debt issuance costs

 

1,320

 

 

1,320

 

Amortization of operating lease right-of-use assets

 

1,722

 

 

1,946

 

Share-based compensation

 

11,787

 

 

4,445

 

Deferred income taxes

 

(5,972

)

 

(67,833

)

Right-of-use assets impairment charge

 

 

 

362

 

Goodwill impairment charge

 

 

 

410,041

 

Indefinite-lived intangible asset impairment charge

 

 

 

4,000

 

Loss from change in tax receivable agreement liability

 

3,974

 

 

2,460

 

Gain from change in fair value of warrant liability

 

(3,761

)

 

(14,680

)

Loss (gain) from change in fair value of contingent consideration

 

2,280

 

 

(9,000

)

Loss (gain) on disposal of property and equipment

 

79

 

 

(154

)

Changes in operating assets and liabilities:

Accounts receivable

 

50,047

 

 

48,176

 

Prepaid expenses and other current assets

 

(3,905

)

 

(1,304

)

Other noncurrent assets

 

(2,544

)

 

(1,772

)

Accounts payable and accrued liabilities

 

(10,702

)

 

(12,228

)

Channel client deposits payable

 

1,177

 

 

2,539

 

Deferred revenue

 

(26,403

)

 

(23,401

)

Changes in other liabilities

 

3,740

 

 

(2,306

)

Net cash provided by operating activities

 

35,916

 

 

36,459

 

Cash flows from investing activities

Capital expenditures

 

(6,084

)

 

(6,552

)

Net cash used in investing activities

 

(6,084

)

 

(6,552

)

Cash flows from financing activities

Repayments of indebtedness

 

(2,808

)

 

(2,741

)

Repayments of financing lease obligations

 

(353

)

 

(223

)

Proceeds from exercise of stock options

 

155

 

 

 

Net cash used in financing activities

 

(3,006

)

 

(2,964

)

Effect of exchange rate changes on cash and cash equivalents

 

76

 

 

2,105

 

Net increase in cash, cash equivalents and restricted cash

 

26,902

 

 

29,048

 

Cash, cash equivalents and restricted cash at beginning of period

 

149,038

 

 

104,342

 

Cash, cash equivalents and restricted cash at end of period

$

175,940

 

133,390 

E2OPEN PARENT HOLDINGS, INC.

RECONCILIATION OF PRO FORMA INFORMATION

TABLE I

 

(in millions)

Q1

Q1

$ Var

% Var

FY2025

FY2024

PRO FORMA REVENUE RECONCILIATION

 

 

 

 

Total GAAP Revenue

151.2

160.1

(9.0)

(5.6%)

Constant currency FX impact (1)

0.1

-

0.1

n/m

Total non-GAAP revenue (constant currency basis) (2)

$151.2

$160.1

($8.9)

(5.6%)

 

 

 

 

GAAP Subscription Revenue

131.4

134.9

(3.5)

(2.6%)

Constant currency FX impact (1)

-

-

-

n/m

Non-GAAP subscription revenue (constant currency basis) (2)

$131.4

$134.9

($3.5)

(2.6%)

 

 

 

 

GAAP Professional Services and other revenue

19.8

25.2

(5.5)

(21.6%)

Constant currency FX impact (1)

-

-

-

n/m

Non-GAAP professional services and other revenue (constant currency basis) (2)

$19.8

$25.2

($5.5)

(21.6%)

 

 

 

 

PRO FORMA GROSS PROFIT RECONCILIATION

 

 

 

 

GAAP Gross profit

72.7

79.4

(6.8)

(8.5%)

Depreciation and amortization

28.5

28.6

(0.1)

(0.5%)

Share-based compensation (3)

1.2

0.6

0.6

92.1%

Non-recurring/non-operating costs (4)

0.2

1.7

(1.5)

(88.5%)

Non-GAAP gross profit

$102.6

$110.4

($7.9)

(7.1%)

Non-GAAP Gross Margin %

67.8%

69.0%

 

 

Constant currency FX impact (1)

(0.1)

-

(0.1)

n/m

Total non-GAAP gross profit (constant currency basis) (2)

$102.4

$110.4

($8.0)

(7.2%)

Non-GAAP Gross Margin % (constant currency basis) (2)

67.7%

69.0%

 

 

 

 

 

 

PRO FORMA ADJUSTED EBITDA RECONCILIATION

 

 

 

 

Net loss

(42.8)

(360.9)

318.1

n/m

Interest expense, net

24.7

24.3

0.4

1.8%

Income tax benefit

(1.9)

(66.3)

64.4

(97.1%)

Depreciation and amortization

53.6

53.3

0.3

0.5%

EBITDA

$33.6

($349.6)

$383.2

n/m

Share-based compensation (3)

11.8

4.5

7.3

164.3%

Non-recurring/non-operating costs (4)

2.6

5.3

(2.8)

(52.0%)

Acquisition-related adjustments (5)

0.3

0.4

(0.1)

(28.2%)

Change in tax receivable agreement liability (6)

4.0

2.5

1.5

61.4%

Change in fair value of warrant liability (7)

(3.8)

(14.7)

10.9

(74.4%)

Change in fair value of contingent consideration (8)

2.3

(9.0)

11.3

n/m

Goodwill impairment (9)

-

410.0

(410.0)

n/m

Intangible asset impairment charge (10)

-

4.0

(4.0)

n/m

Right-of-use assets impairment charge (11)

-

0.4

(0.4)

n/m

Adjusted EBITDA

$50.7

$53.8

($3.0)

(5.7%)

Adjusted EBITDA Margin %

33.6%

33.6%

 

 

Constant currency FX impact (1)

(0.3)

-

(0.3)

n/m

Total adjusted EBITDA (constant currency basis) (2)

$50.4

$53.8

($3.3)

(6.2%)

Adjusted EBITDA Margin % (constant currency basis) (2)

33.4%

33.6%

 

 

 

 

 

 

(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 other non-recurring expenses such as non-acquisition related severance, foreign currency transaction gains and losses, systems integrations, legal entity rationalization, expenses related to retention of key employees from acquisitions and non-recurring consulting and advisory fees.

(5) Primarily includes advisory, consulting, accounting and legal expenses and severance incurred in connection with mergers and acquisitions activities, including related valuation, negotiation and integration costs and capital-raising activities, related to the Business Combination, acquisitions of BluJay and Logistyx and 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 Series B-1 and B-2 common stock and Sponsor Side Letter and Series 1 and 2 RCUs. The Series B-1 common stock, Sponsor Side Letter and Series 1 RCUs were automatically converted into our Class A Common Stock on a one-to-one basis as of June 8, 2021.

(9) Represents the goodwill impairment taken in the first quarter of fiscal 2024.

(10) Represents the indefinite-lived trademark/trade name impairment taken in the first quarter of fiscal 2024.

(11) Represents the impairment on our operating lease ROU assets and leasehold improvements due to vacating certain facilities.

E2OPEN PARENT HOLDINGS, INC.

RECONCILIATION OF NON-GAAP EXPENSES

TABLE II

 

Fiscal First Quarter 2025

 

 

 

 

 

 

(in millions)

GAAP

Non-
Recurring(1)

Depreciation
&
Amortization

Share-Based
Compensation

Non-
GAAP
(Adjusted)

% of
Revenue

Subscriptions

37.1

(0.0)

(3.6)

(0.7)

32.7

24.9%

Professional services and other

16.8

(0.2)

(0.2)

(0.5)

15.9

80.5%

Amortization of intangibles

24.7

-

(24.7)

0.0

-

 

Total cost of revenue

$78.5

($0.2)

($28.5)

(1.2)

$48.6

32.2%

 

 

 

 

 

 

 

Gross Profit

$72.7

$0.2

$28.5

$1.20

$102.5

67.8%

 

 

 

 

 

 

 

OPERATING COSTS

 

 

 

 

 

 

Research & development

24.8

(0.1)

(4.5)

(1.9)

18.2

12.0%

Sales & marketing

21.0

(0.8)

(0.3)

(1.6)

18.3

12.1%

General & administrative

23.3

(0.8)

(0.2)

(7.1)

15.3

10.1%

Acquisition related expenses

0.3

(0.3)

-

-

-

 

Amortization of intangibles

20.1

-

(20.1)

-

-

 

Total operating expenses

$89.5

($2.0)

($25.1)

($10.6)

$51.8

34.3%

 

 

 

 

 

 

 

(1) Primarily includes other non-recurring expenses such as non-acquisition related severance, foreign currency transaction gains and losses, systems integrations, legal entity rationalization, expenses related to retention of key employees from acquisitions and non-recurring consulting and advisory fees.

E2OPEN PARENT HOLDINGS, INC.

RECONCILIATION OF ADJUSTED EARNINGS PER SHARE

TABLE III

 

(in millions, except per share amounts)

Q1 25

GAAP Net loss

(42.8)

Interest expense, net

24.7

Income taxes benefit

(1.9)

Depreciation & amortization

53.6

EBITDA

$33.6

Share-based compensation

11.8

Non-recurring/non-operating costs

2.6

Acquisition-related adjustments

0.3

Change in tax receivable agreement liability

4.0

Change in fair value of warrant liability

(3.8)

Change in fair value of contingent consideration

2.3

Adjusted EBITDA

$50.7

Depreciation

(8.9)

Interest and other expense, net

(24.7)

Normalized income taxes (1)

(4.1)

Adjusted Net Income

$13.0

Adjusted basic shares outstanding

344.4

Adjusted earnings per share

$0.04

 

(1) Income taxes calculated using 24% effective rate.

E2OPEN PARENT HOLDINGS, INC.

ADJUSTED FREE CASH FLOW

TABLE IV

 

(in millions)

Q1 25

GAAP operating cash flow

35.9

 

Add: Non recurring cash payments (1)

4.3

Add: Change in channel client deposits payable (2)

(1.2)

Adjusted operating cash flow

$39.1

 

Capital expenditures

(6.1)

Adjusted free cash flow

$33.0

 

 

(1) Primarily includes other non-recurring expenses such as non-acquisition related severance, foreign currency transaction gains and losses, systems integrations, legal entity rationalization, expenses related to retention of key employees from acquisitions 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 May 31, 2024

307,516

 

Shares outstanding

Common Units

30,919

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

344,435

 

 

 

Warrants

29,080

 

Outstanding warrants with an exercise price of $11.50.

Options (vested/unreleased and unvested)

6,322

Options issued to management under the long-term incentive plan.

Restricted Shares (vested/unreleased and unvested)

16,779

 

Restricted shares issued to employees, management and directors under the long-term incentive plan.

Fully Converted Shares

396,616

 

Investor Contact

Dusty Buell

dusty.buell@e2open.com

investor.relations@e2open.com

Media Contact

5W PR for e2open

e2open@5wpr.com

718-757-6144

Corporate Contact

Kristin Seigworth

VP Communications, e2open

kristin.seigworth@e2open.com

pr@e2open.com

Source: E2open Parent Holdings, Inc.

FAQ

What were E2open's GAAP subscription revenues for Q1 FY25?

E2open's GAAP subscription revenues for Q1 FY25 were $131.4 million, a decrease of 2.6% from the same period last year.

How did E2open's total GAAP revenue for Q1 FY25 compare to last year?

E2open's total GAAP revenue for Q1 FY25 was $151.2 million, down 5.6% compared to the same quarter last year.

What was E2open's GAAP net loss for Q1 FY25?

E2open reported a GAAP net loss of $42.8 million for Q1 FY25, compared to a net loss of $360.9 million in the same period last year.

What is E2open's fiscal 2025 guidance for GAAP subscription revenue?

E2open expects GAAP subscription revenue for fiscal 2025 to be in the range of $532 million to $542 million, reflecting flat growth year-over-year at the mid-point.

What new solutions did E2open launch in Q1 FY25?

E2open launched the Supply Network Discovery solution, which helps clients with regulatory compliance and supply assurance by discovering, mapping, tracing, and assessing multiple tiers of suppliers.

E2open Parent Holdings, Inc.

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