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    Top OTC Watch – eGain Communications Soars on Solid Preliminary Q1 FY2011 Results

    eGain Communications Corp. (OTC BB: EGAN) shares spiked 43.75% yesterday on optimistic preliminary results for the first fiscal quarter ended September 30, 2010. eGain currently expects to report total revenue between $12.5 million and $13.0 million for the quarter ended September 30, 2010, an increase of 56% to 63% from the comparable year-ago quarter. The company also expects to report operating profits between $4.3 million and $4.8 million for first quarter fiscal 2011 compared to $1.1 million for first quarter fiscal 2010.  The trading volume on October 7 session exceeded 132,000 compared to the average of 4,300 shares traded daily over the last three months.

    eGain provides customer service and contact center software for in-house or on-demand SaaS (software as a service) deployment.  The company helps its customers transform their traditional call centers, help desks and Web customer service operations into multichannel customer interaction hubs. Based on the Power of One™, the concept of one unified platform for multichannel customer interaction and knowledge management, these hubs enable dramatically improved customer experience, end-to-end service process efficiencies, increased sales and enhanced contact center performance.

    Proven in cloud and on-site deployments for over a decade, the company’s eGain® Customer Interaction Hub suite is recognized as a comprehensive solution for multichannel customer service and knowledge management. Modular applications, built on a unified platform, enable businesses to offer rich interactions on company Web sites, through contact centers, and on the Social Web.

    As an acknowledgment of the service quality, eGain has been positioned by Gartner Inc. in the “leaders” quadrant of the “Magic Quadrant for Web Customer Service” in 2010. Gartner defines “leaders” as vendors who “demonstrate market-defining vision and the ability to execute against that vision through products, services, demonstrable sales figures, and solid new references for multiple geographies and vertical industries.

    The company’s social experience management solution eGain® Social was recently named to KMWorld Magazine’s list of Trend-Setting Products for 2010. eGain® Social enables businesses to listen to conversations on social networks such as Facebook® and Twitter® for customer queries, analyze and route them intelligently, and post a response. eGain’s eGain Knowledge 10 solution has achieved SAP certification, confirming that it integrates with the SAP NetWeaver Process Integration offering to exchange critical data with instances of SAP Business Suite software.

    The company’s revenue for the fiscal year 2010 was $29.9 million, a decrease of 10% from the prior year. License revenue for the fiscal year 2010 was $7.4 million, a decrease of 14% from the prior year. Recurring services revenue for the fiscal year 2010 was $16.6 million, an increase of 8% from the prior year. Professional services revenue for the fiscal year 2010 was $5.9 million, a decrease of 36% from the prior year.

    eGain reported that a very significant license transaction of more than $5 million dollars has slipped during fourth quarter ended June 30, 2010. However, the company succeeded to close the deal in August 2010 and accordingly expects to report stronger growth and revenue in the range of $13 million for the first quarter of fiscal 2011. For entire fiscal year 2011 eGain expects an increase in new total revenue of 20% when compared to fiscal year 2010. In addition, the company expects to generate positive cash flows from operations, while planning to invest a significant portion of anticipated top-line growth back into growing the distribution capability.

    The recent announcement of solid revenue growth for the first quarter of 2011 combined with increasing recurring revenue stream and a proven and recognized portfolio of cloud and on-site customer interaction hub software position well the company for further appreciation of its stock.

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