E2open Parent (ETWO) Q1 2025 earnings summary

Executive summary

• Q1 FY25 total revenue was $151.2M, down 5.6%–6% year-over-year, with subscription revenue at $131.4M, at the midpoint of guidance.

• Adjusted EBITDA was $50.7M (33.6%–34% margin), down 5.7%–6% year-over-year, with margin steady.

• Net loss narrowed to $38.9M–$42.8M from $325.4M–$360.9M prior year, which included $410M goodwill and $4M intangible asset impairments.

• Strong cash flow generation in Q1; cash and equivalents increased to $160.2M, with $155M in unused borrowing capacity.

• Strategic review process ongoing, with completion anticipated soon.

Financial highlights

• Subscription revenue was $131.4M, down 2.6%–3% year-over-year; professional services revenue was $19.8M, down 21.6%–22%.

• GAAP gross profit was $72.7M, down 8.5%–9% year-over-year; non-GAAP gross profit was $102.6M, down 7.1%.

• GAAP gross margin was 48%–48.1%; non-GAAP gross margin was 67.8%–68%.

• Adjusted operating cash flow was $39.1M, up year-over-year; adjusted free cash flow was $33.0M.

• Ended Q1 with $160.2M in cash and equivalents, up $25.7M–$40.7M year-over-year.

Outlook and guidance

• FY25 subscription revenue guidance reaffirmed at $532M–$542M; total revenue $630M–$645M.

• FY25 gross margin expected at 68%–70%; adjusted EBITDA $215M–$225M (34%–35% margin).

• Q2 FY25 subscription revenue expected at $129M–$132M, a 2%–4.3% year-over-year decline.

• Adjusted operating cash flow expected to grow in FY25; CapEx ~5% of revenue.

• Year-end FY25 net leverage expected below 4x.