E2open Parent (ETWO) Q2 2025 earnings summary

Executive summary

• Q2 FY2025 total revenue was $152.2 million, down 4% year-over-year, with subscription revenue at $131.6 million, down 2.3% year-over-year but at the high end of guidance.

• Adjusted EBITDA was $54.9 million, a 2.2% decrease year-over-year, with margin improving to 36.1% from 35.4% last year.

• Net loss narrowed to $29.9 million from $34.9 million in the prior year; GAAP EPS was a loss of $0.10.

• Client retention and bookings improved sequentially, though large deal closures faced delays due to extended client timelines.

• Strategic review by the board is ongoing, with a continued focus on client-centricity and operational improvements.

Financial highlights

• Professional services revenue was $20.6 million, down 13.1% year-over-year.

• GAAP gross profit was $74.6 million (49% margin), non-GAAP gross profit was $105.0 million (69% margin), both down year-over-year.

• Cash and cash equivalents at quarter-end were $142.2 million, up $30.4 million year-over-year.

• Adjusted free cash flow for the first half was $21.3 million.

• Operating expenses decreased 15% year-over-year, mainly due to the absence of a prior year litigation settlement.

Outlook and guidance

• Q3 FY25 subscription revenue expected between $130 million and $133 million, representing -2.1% to +0.2% year-over-year.

• FY25 subscription revenue guidance revised to $526 million-$532 million (-2% to -1% year-over-year).

• FY25 total revenue expected at $607 million-$617 million (-4% to -3% year-over-year).

• FY25 non-GAAP gross margin expected at 68%-70%; Adjusted EBITDA at the lower end of $215 million-$225 million, margin ~35%.

• Management expects existing cash, cash flow from operations, and available credit to be sufficient for at least the next twelve months.