Strong Momentum Drives Conviction in Long Term Organic Growth Acceleration
Reaffirms Fiscal Year 2022 Guidance of 10% Organic Revenue Growth
E2open Parent Holdings, Inc. (NYSE: ETWO), a leading network-based provider of 100% cloud-based, mission-critical, end-to-end supply chain management software, today announced financial results for its fiscal first quarter 2022 ended May 31, 2021.
“We had a very strong start to our fiscal year 2022, with strong revenue, gross margin, and EBITDA performance as well as subscriptions bookings,” said Michael Farlekas, president and chief executive officer at E2open. “We exceeded our plan on the operating metrics of revenue, gross margin, EBITDA margin, and gross and net bookings. In addition, we announced the transformational and accretive acquisition of BluJay Solutions, a strategic partnership with Dun & Bradstreet, and formed a strategic partnership with a leader in US healthcare procurement and supply chain.”
“We are pleased with our strong financial results for our first quarter, and given the forward revenue visibility of the business, we remain confident that our fiscal year 2022 organic revenue growth will be 10 percent as we have projected and be in excess of 10% in that back half of this year,” said Farlekas.
“In addition, we are very excited to welcome the BluJay team and clients to E2open at closing, which is anticipated to occur in the calendar year third quarter,” said Farlekas.
Fiscal First Quarter 2022 Financial Highlights
NOTE: Non-GAAP revenue adds back amortization of the fair value adjustment to deferred revenue resulting from the business combination with CC Neuberger Principal Holdings I (CCNB1) as required by GAAP. The Company is adding this back to provide better comparability in the calculation of our organic growth rate.
- Revenue: Total GAAP revenue for fiscal first quarter 2022 reached $66.3 million, a decrease of 20.2% from $83.1 million in the fiscal first quarter of 2021. Total non-GAAP revenue was $88.8 million, an increase of 6.9% compared to $83.1 million in the fiscal first quarter of 2021.
Subscription revenue for the fiscal first quarter of 2022 was $51.0 million compared to $69.6 million in the prior year period. Fiscal first quarter 2022 non-GAAP subscription revenue was up 5.6% to $73.5 million compared to $69.6 million from the prior fiscal first quarter.
- Gross Profit: Gross profit for the fiscal first quarter of 2022 was $28.2 million, a decrease of 46.2% compared with $52.3 million in the same quarter of 2021. Non-GAAP gross profit for the fiscal first quarter of 2022 was $65.4 million, an increase of 10.2% compared to $59.4 million in the prior year’s first quarter.
- Gross Margin: Gross margin was 42.5% versus 63.0% in the fiscal first quarter of 2022 versus 2021, respectively. Non-GAAP gross margin was 73.7% versus 71.4% when compared to fiscal first quarter of 2021.
- EBITDA: EBITDA for the fiscal first quarter of 2022 was a loss of $141.6 million compared with $20.2 million in the same quarter of 2021. Adjusted EBITDA was $29.2 million with a margin of 32.9%, an increase from $27.0 million in the fiscal first quarter 2021 with a margin of 32.4%.
- Net Loss: Net loss for the fiscal first quarter of 2022 was $169.4 million compared with a net loss of $23.8 million in the same quarter of 2021.
- Cash flow and Net debt: Net cash provided by operating activities was $39.3 million for the first quarter of fiscal 2022, compared to cash provided by operating activities of $29.8 million in the prior year period. Net debt as of May 31, 2021, as defined in the non-GAAP reconciliation Table II, was $296.4 million. E2open’s net debt forward leverage ratio is approximately 2.4 times adjusted EBITDA as of May 31, 2021 based on projected 2022 adjusted EBITDA.
Recent Business Highlights
- E2open recently announced the acquisition of BluJay Solutions, a leading cloud-based, logistics execution platform, which is anticipated to close during the third calendar quarter of 2021. The combination will provide more robust capabilities in the areas of global trade and transportation management driving value to our customers while accelerating our long-term growth.
- As a component of E2open’s growth levers, the Company has entered into strategic partnership agreements with Dun & Bradstreet and a leader in healthcare procurement and supply chain. These agreements will leverage each company’s unique capabilities and utilize E2open’s platform and network to expand the Company’s market reach.
- E2open announced a large new logo win with Tesco, the leading UK retailer, representing a significant start to a strategic relationship with Tesco.
- E2open’s new account logo sales team continues to augment our current go to market strategy focused on our existing client base. The combination with BluJay Solutions will strengthen the cross-sell, upsell opportunity and significantly accelerate our new logo sales initiative.
Financial Outlook for Fiscal Year 2022
As of July 14, 2021, E2open is reaffirming its guidance for its full fiscal year 2022, which ends February 28, 2022, as follows:
- Total non-GAAP revenue is expected to be in the range of $369 million to $371 million.
- Non-GAAP gross profit is expected to be in the range of $268 million to $270 million.
- Adjusted EBITDA is expected to be in the range of $120 million to $122 million.
- These estimates reflect approximately 10% organic revenue growth and an adjusted gross margin in the range of 72 to 73%.
Quarterly Conference Call
E2open will host a video webinar today at 5:00 p.m. ET to discuss fiscal first quarter 2022 financial results, in addition to discussing the Company’s outlook for the full fiscal year 2022. The video webinar will be available live on the Investor Relations section of the Company’s website at www.e2open.com. A replay will be available within 12 hours after the conclusion of the live event.
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