Executive Summary

Q4 FY25 delivered stabilization with GAAP subscription revenue of $133.0M (above guidance midpoint), total revenue $152.7M (-3.6% YoY), and adjusted EBITDA $56.3M with a 36.9% margin; GAAP net loss was $268.5M driven by a $245.0M non-cash goodwill impairment .
Management guided FY26 to near-flat growth: subscription revenue $525–$535M, total revenue $600–$618M, non-GAAP gross margin 68–68.5%, adjusted EBITDA $200–$210M (33–34% margin); Q1 FY26 subscription revenue guided to $129–$132M .
Operational “green shoots”: improved retention (year-end gross/net 91%/99%), sequentially improving bookings, and record sequential cash build via collections; non-GAAP margins remained high despite PS revenue headwinds .
Stock reaction catalysts: strategic review continuing in Q4; post-quarter, ETWO announced a definitive agreement to be acquired by WiseTech Global for $3.30 per share cash (enterprise value $2.1B), concluding the review and likely anchoring near-term price action pending close .

What Went Well and What Went Wrong

What Went Well

Subscription stabilization and margin resilience: Q4 subscription revenue above guidance midpoint ($133.0M) and adjusted EBITDA grew to $56.3M (36.9% margin) on disciplined cost control .
Retention and bookings momentum: “highest renewal percentage” of any FY25 quarter; year-end gross/net retention at 91%/99% (+~1 pt YoY), with sequential bookings improvement and upsell successes across industries .
Product and AI innovation recognized by analysts; new AI-driven global trade compliance capabilities launched to ease classification, due diligence, and unstructured document processing .

Quote: “Our fourth quarter results showed continued stabilization… and highlight the meaningful progress… repositioning e2open for future growth.” — Andrew Appel, CEO .
Quote: “In Q4 FY25, e2open delivered subscription revenue above the mid-point… along with strong adjusted EBITDA and record-high cash flow.” — Marje Armstrong, CFO .

What Went Wrong

GAAP loss widened on impairment: Q4 GAAP net loss of $268.5M vs $45.5M prior year, primarily due to $245.0M goodwill impairment triggered by share price decline .
Professional services weakness: Q4 PS revenue down 18.3% YoY; PS margins pressured by targeted unbilled work to improve customer outcomes and renewals .
Non-GAAP gross margin compression: Q4 non-GAAP gross margin 68.2% vs 70.0% prior year on lower revenue and PS mix; subs margin also modestly lower YoY .

Financial Results

Quarterly Revenue, EPS, Margins (Q2 FY25 → Q4 FY25)

Metric	Q2 FY25	Q3 FY25	Q4 FY25
Total Revenue ($M)	$152.2	$151.7	$152.7
Subscription Revenue ($M)	$131.6	$132.0	$133.0
Professional Services & Other ($M)	$20.6	$19.7	$19.7
GAAP Gross Profit ($M)	$74.6	$75.7	$76.6
GAAP Gross Margin (%)	49.0%	49.9%	50.2%
Non-GAAP Gross Profit ($M)	$105.0	$104.3	$104.2
Non-GAAP Gross Margin (%)	69.0%	68.8%	68.2%
Adjusted EBITDA ($M)	$54.9	$53.6	$56.3
Adjusted EBITDA Margin (%)	36.1%	35.3%	36.9%
GAAP EPS ($)	$(0.10)	$(1.12)	$(0.79)
Adjusted EPS ($)	$0.05	$0.05	$0.06

Year-over-Year Comparison (Q4 FY24 vs Q4 FY25)

Metric	Q4 FY24	Q4 FY25	YoY Δ
Total Revenue ($M)	$158.449	$152.678	-3.6%
Subscription Revenue ($M)	$134.355	$132.999	-1.0%
Professional Services & Other ($M)	$24.094	$19.679	-18.3%
GAAP Gross Margin (%)	50.8%	50.2%	-60 bps
Non-GAAP Gross Margin (%)	70.0%	68.2%	-180 bps
Adjusted EBITDA ($M)	$55.1	$56.3	+2.3%
Adjusted EBITDA Margin (%)	34.8%	36.9%	+210 bps
GAAP Net Loss ($M)	$(45.535)	$(268.500)	n/m (impairment)
Adjusted EPS ($)	N/A	$0.06	N/A

Note: Adjusted EPS for Q4 FY24 not disclosed in these documents.

Segment Breakdown (Subscriptions vs PS & Other)

Segment Revenue ($M)	Q2 FY25	Q3 FY25	Q4 FY25
Subscriptions	$131.555	$132.000	$132.999
Professional Services & Other	$20.637	$19.655	$19.679

KPIs and Cash

KPI	Q4 FY25	FY25
Gross Retention (%)	91% (year-end)	91% (year-end)
Net Retention (%)	99% (year-end)	99% (year-end)
Adjusted Operating Cash Flow ($M)	$56.7	$111.4
Adjusted Free Cash Flow ($M)	$50.0	$86.2
Cash & Equivalents ($M)	$197.350	$197.350
Net Leverage (Adj. EBITDA, x)	~4.0x (end FY25)	~4.0x

Estimate Comparison

Wall Street consensus via S&P Global was unavailable for ETWO in this period; therefore, comparisons versus consensus cannot be provided. Values would have been retrieved from S&P Global if available.

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Subscription Revenue ($M)	FY26	N/A	$525–$535	New
Total Revenue ($M)	FY26	N/A	$600–$618	New
Non-GAAP Gross Margin (%)	FY26	N/A	68–68.5	New
Adjusted EBITDA ($M)	FY26	N/A	$200–$210 (33–34%)	New
Subscription Revenue ($M)	Q1 FY26	N/A	$129–$132	New

Management characterized the FY26 ranges as conservative given tariff-led uncertainty and typical Q1 churn seasonality, with improvement expected through the year .

Earnings Call Themes & Trends

Topic	Previous Mentions (Q2 FY25)	Previous Mentions (Q3 FY25)	Current Period (Q4 FY25)	Trend
AI/Technology initiatives	Launched applied AI across platform; TMS, planning enhancements	IDC recognition; continued AI-driven automation	New AI tools for global trade: automated classification, NLP summaries, screening, unstructured docs	Increasing product velocity
Supply chain/tariffs/macro	Client decision delays; conservative FY25 guide	Impairments amid macro; stabilization	Tariff volatility as “moment of truth”; content database updates across >2M landed cost records; holistic global trade solution	Elevated focus; demand driver
Product performance & platform breadth	Connect conference; new wins across industries	Cross-sell with global retailer, pharma go-lives	Upsell on renewals; freight forwarder TMS expansion; CPG logistics upsell	Positive adoption
Commercial execution & retention	Sequential retention improvement; bookings up YoY/QoQ	Sequential bookings; targeted PS usage	Highest renewal %, sequential bookings up; GRR/NRR 91%/99%	Improving
Professional services	PS down YoY; focus on implementations	PS bookings above revenue run rate; stabilize	PS revenue down YoY; unbilled PS stabilizing; backlog improving	Stabilizing
Regulatory/legal	—	Prior litigation settlement (FY24) referenced in tables	Strategic review ongoing; post-Q4 definitive acquisition agreement by WiseTech	Strategic change

Management Commentary

Strategic progress: “We’ve increased retention, grown ARR… and reduce our customer support backlog of aged support tickets by more than 60%… green shoots are positive signs that our strategy is working.” — Andrew Appel .
Tariffs as demand catalyst: “E2open’s global trade application suite provides the first line of tariff-related defense… only provider of a holistic global trade solution… connect activities end-to-end to evaluate landed cost scenarios and execute” — Andrew Appel .
FY26 posture: “We expect our business to gradually return to revenue growth driven by continued improvements in retention and sales productivity.” — Marje Armstrong .
Cash discipline: “Record sequential cash build… thanks to process improvements in accounts receivable collections.” — Marje Armstrong .

Q&A Highlights

FY26 linearity and PS visibility: Management expects continued year-over-year improvement through FY26, with conservative ranges due to macro/tariff uncertainty; PS backlog/ bookings improving despite conservative guide .
Targeted investments: Early, targeted product initiatives (client data clean rooms, real-time planning, faster implementations, complex logistics co-creation, enhanced AI for landed cost) and willingness to invest in commercial org .
Q1 seasonal churn and sequential step-down: Q1 typically highest churn due to renewal seasonality; churn front-loaded, bookings back-loaded; Q1 sequential step-down expected but improving YoY .
Exposure to trade volumes: Pure volume-based revenue ~2% (down from ~4% two years ago); volumetric tiering largely converted to fixed-price, leaving total revenue exposure ~3% .
Retention normalization timing: “Fifth or sixth inning”; legacy churn issues tapering with normalization toward GRR ~93–95% over 4–5 quarters .

Estimates Context

S&P Global consensus estimates for ETWO were unavailable in our data pull; as a result, we cannot provide beat/miss versus Street. If available, comparisons would have been anchored on S&P Global consensus. Values would have been retrieved from S&P Global.

Key Takeaways for Investors

Subscription stabilization with sequential improvement and strong adjusted margins signals execution progress; the main GAAP loss driver remains non-cash impairment rather than operating deterioration .
Guidance implies a cautious, near-flat FY26 trajectory with room for upside if retention and bookings momentum continue; watch Q1 churn seasonality and Q2/Q3 sequential trends .
Tariff volatility is a tangible near-term demand driver for global trade solutions; E2open’s comprehensive content+execution stack could catalyze upsell and new logos in 2H FY26 .
PS revenue headwinds are stabilizing; improved backlog and targeted unbilled work should aid renewals and implementations, with potential PS growth later in the year .
Balance sheet and cash generation improved, with record sequential cash build and end-year cash of ~$197M; management expects net leverage to decline to ~3.8x by end FY26 on cash conversion .
Strategic review culminated post-quarter with a definitive sale to WiseTech Global at $3.30 cash per share, likely anchoring near-term stock dynamics pending regulatory approvals and close .
Near-term trading: stock likely driven by merger spread and closing risk rather than quarterly fundamentals; medium-term thesis shifts to integration and combined platform synergies if the deal completes .

E2open Parent Holdings, Inc. (ETWO)·Q4 2025 Earnings Summary