Sign in

You're signed outSign in or to get full access.

EP

E2open Parent Holdings, Inc. (ETWO)·Q1 2026 Earnings Summary

Executive Summary

  • Q1 FY26 GAAP subscription revenue was $132.9M, above the high end of prior quarterly guidance ($129–$132M) and +1.1% y/y; total GAAP revenue was $152.6M, +1.0% y/y .
  • Adjusted EBITDA was $52.2M with a 34.2% margin (+60 bps y/y), while non-GAAP gross margin dipped to 67.1% on lower PS margins; GAAP EPS was -$0.05 and adjusted EPS was $0.05 .
  • Cash generation remained strong: GAAP operating cash flow was $41.8M and adjusted free cash flow was $40.7M; ending cash was $230.2M, up $33M q/q .
  • Management reiterated all FY26 guidance ranges for subscription revenue, total revenue, non-GAAP gross margin, and adjusted EBITDA; no quarterly guidance will be provided going forward due to the pending WiseTech acquisition (expected to close by year-end) .
  • Near-term stock narrative is driven by the announced sale to WiseTech ($3.30/share cash, 68% premium to unaffected price), with fundamentals stabilizing and subscription growth returning; catalyst path hinges on deal closure and integration optics .

What Went Well and What Went Wrong

What Went Well

  • Subscription revenue beat: “e2open delivered subscription revenue above the high end of our guidance, marking our first year-over-year subscription revenue growth since mid-FY24” ; Q1 subscription revenue $132.9M (+1.1% y/y) .
  • Profitability and cost discipline: Adjusted EBITDA rose to $52.2M (+3% y/y) with margin up to 34.2% as OpEx declined from cost discipline and optimized offshore R&D .
  • Cash strength: Adjusted operating cash flow of $48.0M and adjusted free cash flow of $40.7M, driven by strong collections and working capital efficiency; cash balance increased to $230.2M .

What Went Wrong

  • Margin pressure in PS: Non-GAAP gross margin fell to 67.1% (from 67.8% y/y), with CFO citing lower professional services margins in Q1; expects improvement later in FY26 .
  • GAAP net loss persists: GAAP net loss was -$15.5M (vs -$42.8M y/y), reflecting ongoing interest expense and fair-value adjustments despite operational stabilization .
  • Transaction-related overhang and expenses: Acquisition-related costs were $5.5M in Q1, and management paused quarterly guidance and Q&A amid pending sale to WiseTech, limiting near-term visibility .

Financial Results

Consolidated Performance (oldest → newest)

MetricQ3 FY25Q4 FY25Q1 FY26
Total GAAP Revenue ($USD Millions)$151.7 $152.7 $152.6
Subscription Revenue ($USD Millions)$132.0 $133.0 $132.9
Professional Services & Other ($USD Millions)$19.7 $19.7 $19.7
GAAP Gross Profit ($USD Millions)$75.7 $76.6 $73.6
Non-GAAP Gross Profit ($USD Millions)$104.3 $104.2 $102.4
GAAP Gross Margin %49.9% 50.2% 48.2%
Non-GAAP Gross Margin %68.8% 68.2% 67.1%
Adjusted EBITDA ($USD Millions)$53.6 $56.3 $52.2
Adjusted EBITDA Margin %35.3% 36.9% 34.2%
GAAP Net Loss ($USD Millions)$(381.6) $(268.5) $(15.5)
GAAP EPS ($USD)$(1.12) $(0.79) $(0.05)
Adjusted EPS ($USD)$0.05 $0.06 $0.05
GAAP Operating Cash Flow ($USD Millions)$17.7 $53.0 $41.8
Adjusted Free Cash Flow ($USD Millions)$14.9 $50.0 $40.7

Revenue Mix

MetricQ3 FY25Q4 FY25Q1 FY26
Subscription Revenue Share of Total (%)87.0% 87.0% 87.0%

Balance Sheet / KPIs

MetricQ3 FY25Q4 FY25Q1 FY26
Cash & Cash Equivalents ($USD Millions)$151.2 $197.4 $230.2
Deferred Revenue – Current ($USD Millions)$187.5 $216.7 $203.1
Notes Payable ($USD Millions)$1,032.8 $1,031.2 $1,029.6

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
GAAP Subscription Revenue ($M)FY26$525–$535 $525–$535 Maintained
Total GAAP Revenue ($M)FY26$600–$618 $600–$618 Maintained
Non-GAAP Gross Margin %FY2668%–68.5% 68%–68.5% Maintained
Adjusted EBITDA ($M)FY26$200–$210; margin 33%–34% $200–$210; margin 33%–34% Maintained
Adjusted Operating Cash Flow (% of Adjusted EBITDA)FY26Not specifiedRoughly in line with FY25 Maintained qualitative
Net Leverage RatioFY26 YENot specified~3.8x at FY26 YE New disclosure
GAAP Subscription Revenue ($M)Q1 FY26$129–$132 Ceased quarterly guidance; actual $132.9 (above high end) Beat vs prior guidance

Earnings Call Themes & Trends

TopicPrevious Mentions (Q3 FY25, Q4 FY25)Current Period (Q1 FY26)Trend
Client retention and bookingsRetention improved; return-to-growth plan on track ; ending FY25 gross/net retention improved Subscription growth driven by improved retention and bookings Improving
AI/Technology initiativesProduct updates and AI-driven planning; recognized in IDC/Gartner Generative AI-driven tools augment TMS/global trade; on track for more announcements Expanding
Macro/tariffsTariff-related uncertainty spotlighted platform value Continued focus on resilience across volatile environment Ongoing
Professional services marginNo explicit prior margin calloutLower PS margins pressured consolidated gross margin; expected to improve through year Near-term headwind improving
Strategic review / M&AStrategic review ongoing (Q4) Pending WiseTech acquisition, expected close by year-end Transition to combined entity
Guidance cadenceProvided quarterly guidance (Q4) No quarterly guidance; only full-year reiterated Reduced cadence due to M&A

Management Commentary

  • CEO: “Our first quarter results… returned to year-over-year subscription revenue growth… well positioned for the next chapter… pending acquisition by WiseTech Global” .
  • CFO: “Subscription revenue above the high end… continued trend of strong adjusted EBITDA and cash flow… confirming all elements of our full-year guidance” .
  • CEO on WiseTech: “These two great companies will be coming together… uniquely positioned to serve a broader array of clients… becoming the operating system for global supply chains” .
  • CFO on efficiency: “OpEx spend was down year over year due to ongoing cost discipline… and optimizing our use of offshore R&D resources” .

Q&A Highlights

  • No live Q&A conducted due to pending WiseTech acquisition; prepared remarks only and cessation of quarterly guidance commentary .
  • Clarifications delivered in prepared remarks included reiteration of FY26 guidance ranges and disclosure of expected YE net leverage (~3.8x) .

Estimates Context

  • S&P Global consensus estimates were unavailable for ETWO at the time of analysis due to missing mapping in the SPGI CIQ company table; therefore, we cannot present consensus revenue or EPS comparisons for Q1 FY26 [SpgiEstimatesError from tool].
  • Proxy for “beat/miss”: subscription revenue came in above the prior company quarterly guidance range ($132.9M vs $129–$132M) .

Key Takeaways for Investors

  • Subscription revenue inflected to y/y growth and beat prior guidance, signaling stabilization in core SaaS fundamentals and improved retention/booking momentum .
  • Profitability remains solid with adjusted EBITDA margin in the mid-30s and strong cash conversion, supporting deleveraging toward ~3.8x by FY26 YE .
  • Near-term margin cadence hinges on professional services margin recovery; management expects improvement through FY26, which should support consolidated gross margin .
  • Full-year guidance reaffirmation (revenue, margin, EBITDA) provides visibility into steady-state performance pending deal closure .
  • Transaction optics dominate the stock setup: $3.30/share cash consideration from WiseTech with anticipated close by year-end; focus shifts to timing/regulatory approvals and deal spread .
  • Operational discipline (OpEx control, offshore R&D optimization) and product innovation (generative AI, trade compliance) underpin medium-term competitiveness regardless of transaction outcome .
  • Liquidity is strong ($230.2M cash), and working capital management continues to be an internal lever for cash generation during the transition period .