E2open Parent Q4 2025 Earnings Report

E2open Parent EPS Results

• Actual EPS: $0.06
• Consensus EPS: $0.05
• Beat/Miss: Beat by +$0.01
• One Year Ago EPS: N/A

E2open Parent Revenue Results

• Actual Revenue: $153.50 million
• Expected Revenue: $153.01 million
• Beat/Miss: Beat by +$489.00 thousand
• YoY Revenue Growth: N/A

E2open Parent Announcement Details

• Quarter: Q4 2025
• Date: 4/29/2025
• Time: After Market Closes
• Conference Call Date: Tuesday, April 29, 2025
• Conference Call Time: 5:00PM ET

E2open Parent (NYSE:ETWO) provides cloud-based and end-to-end supply chain management and orchestration SaaS platform in the Americas, Europe, and the Asia Pacific. Its SaaS platform includes various key strategic and operational areas, including omni-channel, demand sensing, supply planning, global trade management, transportation and logistics and manufacturing and supply management. The company's software combines networks, data, and applications to provide a deeply embedded and mission-critical platform that allows its clients to optimize their channel and supply chains. It serves consumer goods, food and beverage, manufacturing, retail, industrial and automotive, aerospace and defense, technology and transportation, and other industries. The company was incorporated in 2020 and is headquartered in Austin, Texas.

E2open Parent Q4 2025 Earnings Call Transcript

Key Takeaways

• Operational improvements: E2Open boosted client retention, grew ARR, enhanced implementation speed and Net Promoter Score, and cut aged support tickets by over 60%, driving modest sequential subscription revenue growth in Q4.
• Subscription stability: Q4 subscription revenue of $133 M was flat year-over-year on a constant currency basis, with gross and net retention improving to 91% and 99%, respectively (up ~1 point vs FY24).
• Commercial momentum: Subscription bookings in Q4 rose both sequentially and year-over-year to the highest quarterly level since FY23, supported by stronger conversion rates and upsells across planning, logistics and trade solutions.
• Product leadership & AI: E2Open was named a leader by IDC and Gartner in multiple supply chain segments, launched AI-driven global trade innovations (e.g., automated classification, NLP summaries, enhanced screening), and is advancing real-time planning and a client-centric data platform.
• FY26 outlook: The company projects subscription revenue of $525–535 M (−1% to +1% yoy), total revenue of $600–618 M, non-GAAP gross margin of 68–68.5%, and adjusted EBITDA of $200–210 M, aiming for a return to positive growth.

Presentation

[Operator]

Welcome to the E2 Open Fourth Quarter Fiscal Year twenty twenty five Earnings Call. At this time, all participants are in a listen only mode. A question and answer session will follow the formal presentation. Please note this conference is being recorded.

[Operator]

I will now turn the conference over to your host, Russell Johnson, Head of Investor Relations. You may begin.

[Russell Johnson, SVP - Treasurer & Investor Relations at E2open Parent]

Good afternoon, everyone, and welcome to the E2 Open Fiscal Fourth Quarter and Full Year twenty twenty five Earnings Conference Call. Today's call will include recorded comments from our Chief Executive Officer, Andrew Appel our Chief Commercial Officer, Greg Randolph and our Chief Financial Officer, Marie Armstrong. Following these comments, we'll open the call for a live Q and A session. A replay and transcript of this call will be available on the company's Investor Relations website at investors.e2open.com. Information to access this replay is listed in today's press release, which is also available on our Investor Relations website.

[Russell Johnson, SVP - Treasurer & Investor Relations at E2open Parent]

Before we begin, I'd like to remind everyone that during today's call, we will be making forward looking statements regarding future events and financial performance, including guidance for our fiscal first quarter and full year 2026. These forward looking statements are subject to known and unknown risks and uncertainties. E2Open cautions that these statements are not guarantees of future performance. We encourage you to review our most recent reports, including our 10 ks or any applicable amendments for a complete discussion of these factors and other risks that may affect our future results or the market price of our stock. And finally, we are not obligating ourselves to revise our results or these forward looking statements in light of new information or future events.

[Russell Johnson, SVP - Treasurer & Investor Relations at E2open Parent]

Also during today's call, we'll refer to certain non GAAP financial measures. Reconciliations of non GAAP to GAAP measures and certain additional information are included in today's earnings press release, which can be viewed and downloaded from our Investor Relations website at investors.e2open.com. And with that, we'll begin by turning the call over to our CEO, Andrew Appel.

[Andrew Appel, CEO at E2open Parent]

Thank you, Russell, and thanks to everyone for joining today's call. I'll begin with comments on how I see our business positioned as we start the new fiscal year, and then I'll ask Greg to update you on recent commercial highlights. Finally, Marie will review our fiscal fourth quarter and FY 'twenty five financial results and provide our FY 'twenty six guidance. Then we will open up the call for questions. When I moved into the permanent CEO role at E2Open a bit more than a year ago, my primary focus was on delighting our clients, stabilizing our core business with a particular emphasis on improving retention, enhancing the client experience through better implementations, and laying the groundwork for durable growth.

[Andrew Appel, CEO at E2open Parent]

Since then, I am proud to say we've made meaningful progress on all fronts. We've increased retention, grown ARR, delivered a material better implementation experience, seen rising client satisfaction in the form of improved Net Promoter Score, and reduced our customer support backlog of aged support tickets by more than 60%. Our focus on operational discipline and client value has begun to yield results. These early wins, what I'll refer to as green shoots, are positive signs that our strategy is working. Looking ahead, I firmly believe that we have the right ingredients to grow our business, a unique platform, a client and value driven culture, a world class team, and a clear strategic focus.

[Andrew Appel, CEO at E2open Parent]

While we still have work to do, our momentum is real and our commitment to long term value creation is strong. I want to sincerely thank our employees for their passion and dedication to strengthening e2Open's performance. And I want to thank all of our clients and shareholders for their continued trust in our teams and the path we are pursuing. While our FY 'twenty '5 performance showed that we still have work to do to realize the company's full potential, I am pleased that we have recorded modest sequential growth in subscription revenue over the past three quarters. I'm also encouraged that our Q4 year over year subscription growth rate, when adjusted for currency impacts, came within a zero five percentage point of flat growth.

[Andrew Appel, CEO at E2open Parent]

This progress is the direct result of our strong focus on client satisfaction, retention and go to market execution during FY 'twenty five, and it shows that our subscription business is stabilizing and moving in the right direction. I also want to highlight our Q4 retention performance. Our rate of churn peaked during Q1 of this fiscal year. However, through the balance of the fiscal year, our disciplined management cadence and cultural shift to delighting clients enabled us to improve our retention results. In the fourth quarter, we had a large book of business up for renewal.

[Andrew Appel, CEO at E2open Parent]

I am pleased to say that our focus on this critically important aspect of our business served us very well. And in Q4, we achieved the highest renewal percentage of any FY 'twenty five quarter. I'll let Greg speak more about bookings in a moment, but I also want to note the progress we made in this area during FY '20 '20 '5, as Q4 bookings again improved sequentially and year over year. Thanks to our combined performance on renewals and bookings, we ended the fiscal year with gross and net retention of 9199%, respectively, which represents about a one percentage improvement in each compared to the end of FY24. While these metrics are not yet back to our historically high levels and are still below what we need to drive strong growth, the trends in these metrics is another green shoot in our business.

[Andrew Appel, CEO at E2open Parent]

Improving gross and net retention is the direct result that multiple teams across the company have worked very hard to deliver. As we move into FY 'twenty six, I'm very excited about how we have positioned our business from a client and product perspective. During FY 'twenty five, we worked intensively to delight our customers and ensure that they received the maximum value from our software. We also markedly improved the quality and speed of our implementations and significantly enhanced our customer care delivery. The reaction of our clients to these efforts has been very positive, with follow-up benefits to our business performance.

[Andrew Appel, CEO at E2open Parent]

In Q4, we were particularly successful at upselling clients upon renewal of their legacy subscription business, a clear sign of happier clients. I firmly believe that E2 Open can only succeed when our clients succeed, and rising client satisfaction is another critically important green shoot in our business. During Q1 of this year, we launched our latest and most comprehensive survey of client sentiment. We expect this rigorous exercise will document and quantify the progress we've made with client satisfaction and loyalty and provide client specific feedback on areas that we need to improve to serve them better. On the product front, E2Open continues to be recognized for our unique software assets.

[Andrew Appel, CEO at E2open Parent]

Our end to end platform combines proven field applications with robust execution capabilities and allows our clients to leverage the world's largest network of interconnected supply chain partners, which in FY 'twenty '5 reached over a half a million enterprises, the highest number in our company's history. Our technology received high marks from industry analysts. As of FY 'twenty five, E2Open was ranked a leader in 11 of the 16 industry quadrants across major functional areas that we compete in. And the recognitions keep coming. In January, E2Open was named by IDC as a leader in multiple market segments for worldwide supply chain planning.

[Andrew Appel, CEO at E2open Parent]

In awarding this distinction, IDC highlighted the ability of E2Open's network based platform to enable large global companies to successfully carry out digital transformations. And in March, Gartner named E2Open's transformation management solution as a leader for the third consecutive year. Gartner's evaluation emphasized the company's overall completeness of vision and our ability to execute. Of course, to stay in the top ranks of supply chain providers, we must continue to innovate. This is especially true with respect to artificial intelligence.

[Andrew Appel, CEO at E2open Parent]

Generative AI is providing us with a unique opportunity to add capabilities to our software that can increase automation, enable better and faster decision making, and enhance the user experience. Taking advantage of AI to drive product innovation is not merely a source of competitive advantage in our market. It is a requirement to stay relevant. E2Open was a pioneer in embedding AI and machine learning and advanced decision making frameworks into supply chain software, and we are continuing to push these boundaries today and intend to stay that way, for example, through significant advancements to our data environments and multiple applications of client centric and guided AI journeys. For example, in March, we announced the launch of new AI tools across our global trade technology suite that will unlock higher productivity, shorter cycle times, and greater compliance assurance for companies in a wide range of industries.

[Andrew Appel, CEO at E2open Parent]

This latest technology release includes AI driven innovations such as automated classification of products, natural language based summaries of global trade content, enhanced counterparty screening and due diligence, and unstructured processing of trade documents. This is just one example of how we are investing in our industry leading products to make them even more valuable for our clients. We also have a number of other major enhancements to our platform scheduled for this year, and we are very excited by the work that our new Chief Product and Technology Officer, Rachit Lohani, is doing to develop our technology base and ensure our products provide maximum value to our world class clients. In fact, a very compelling example of how E2Open's products create value for clients is the current situation with tariff. No one knows exactly how recent tariff volatility will play out, but it has the potential to create the supply chain challenges comparable to what global companies experienced during the COVID pandemic.

[Andrew Appel, CEO at E2open Parent]

E2 opens a global trade application suite, provides the first line of tariff related defense for many of our clients. This solution combines cutting edge trade execution applications with the industry's most complete global trade content database. It is already proving to be an invaluable asset for clients seeking to navigate the new tariff landscape. In response to the new tariffs, e2Open's global team of trade experts has worked literally around the clock to update our global trade content database with evolving tariff levels for both export and import across all countries that have introduced new rates or retaliatory responses. The process has impacted over 2,000,000 landed cost records that our clients access from our platform in order to determine the total all in costs of bringing products to a final destination.

[Andrew Appel, CEO at E2open Parent]

In addition, our customer facing trade and product teams are working directly with dozens of the largest manufacturing and logistics clients who are using our Global Trade application to create and file shipment level customs documents that accurately reflect the cargoes crossing the border based on their effective dates. While other software firms may be able to help clients with narrow aspects of the new tariffs, E2Open is the only provider of a holistic global trade solution that combines comprehensive trade data with seamless execution capabilities. And beyond our global trade applications, rapid changes to tariffs and trade flows will have profound impacts across the entire value chain served by E2Open's broad family of solutions, from end to end planning and supplier collaboration to logistics and transportation. By connecting all of these activities, E2Open's platform gives our clients clear and measurable advantage over their peers through a much more comprehensive landed cost and much more effective and efficient flows across their supply chain. As tariffs change, our clients can use our end to end platform to quickly evaluate alternative scenarios for inventory levels, sourcing locations, shipping modes and routes, and all in landed costs.

[Andrew Appel, CEO at E2open Parent]

And not only can they model it, but they can take immediate actions to keep shipments moving and business running. In a world where constant change is the norm, E2Open is proud to be a much needed source of supply chain adaptability and resilience for the world's largest global companies. Before I turn the call over to Greg, I want to add that the strategic review that we initiated last year is still ongoing. As with prior quarters, we will not take questions or comment further on the review today. With that, I'd like to now ask my friend Greg Randolph to provide our commercial update.

[Andrew Appel, CEO at E2open Parent]

Over to you, Greg.

[Greg Randolph, Chief Commercial Officer at E2open Parent]

Thank you, Andrew. During the fourth quarter, E2Open's commercial organization continued to execute company's Return to Growth playbook, and I'm very proud of the way our teams maintained their focus and enthusiasm as we closed out the fiscal year. Since I joined E2Open a year and a half ago, our mission has been very clear, to put in place the structure, the processes, and the capabilities needed by our commercial organization to drive consistent organic growth. Over that period, we've made notable progress on multiple fronts, particularly in areas such as operational cadence, sales training and enablement, and performance management. And perhaps most importantly, we have realigned our organizational culture to one that values above all else, delighting our clients and building long term, mutually beneficial relationships with the companies that use our software.

[Greg Randolph, Chief Commercial Officer at E2open Parent]

As a result of these and other improvements, E2Open's performance has stabilized and started to turn the corner back to growth. And while change is never easy and progress isn't always as fast as we want, we have a solid foundation for moving forward. Our fourth quarter subscription bookings were solid and provide further evidence of positive momentum in our go to market strategy. Subscription bookings were up sequentially as well as year over year and were the highest quarterly total we've achieved since the end of FY 'twenty three. And I'm also pleased that in Q4, we logged our second quarter in a row of strong conversion rates, marking a notable improvement in our deal closure rate in the second half of the fiscal year as compared to the first half.

[Greg Randolph, Chief Commercial Officer at E2open Parent]

With that said, we are not satisfied with these results. We know that we still have work to do to return to double digit top line growth and to win our fair share of the fast growing, highly attractive supply chain software market. We knew what we need to do and are committed to investing in the right areas across the commercial organization to accelerate our progress. Our Q4 wins included many important highlights, several of which I'll describe today. First, a global active health and wellness company that distributes its branded products in over 125 countries selected E2 Open to expand our strategic partnership for broad based digital supply chain transformation.

[Greg Randolph, Chief Commercial Officer at E2open Parent]

This existing user of E2 Open Transportation Management, Parcel, and Global Trade Management applications will now deploy our solutions for demand planning, supply planning, and multi echelon inventory optimization. This relationship is a model for how E2 Open wins by consistently growing our clients' adoption of our end to end connected platform so that they can build truly connected supply chains and rapidly scale their businesses. In another significant Q4 win, a major Europe based global freight forwarder and existing E2Open customer since 02/2023 signed on for a significant expansion of our relationship. The customer is using E2Open's transportation management solution as a single integrated platform to connect its large carrier network and multi region footprint to support future rapid growth. The expanded relationship will allow this highly strategic customer to further optimize operations across multiple modes of transportation, reduce freight and operational cost, and broaden its global rollout of TMS functionality.

[Greg Randolph, Chief Commercial Officer at E2open Parent]

In another strategically important deal closed in Q4, a major U. S. Manufacturer and distributor of branded food and beverage products and long tenured E2Open customer selected us to provide additional software based logistics and support services in addition to renewing their existing business. This expanded relationship demonstrates that E2Open has multiple ways to win in our competitive markets, and that focusing on client satisfaction and seamless renewals opens many doors to upsell existing clients and monetize our install base. It also shows that the consumer packaged goods industry remains a top opportunity for future E2 Open growth.

[Greg Randolph, Chief Commercial Officer at E2open Parent]

Rounding out our wins for the fourth quarter, we booked new business with name brand customers in diverse industry segments, including automotive, consumer electronics, high-tech, and retail across a broad array of applications, such as logistics, supply collaboration, global trade management, and planning. We did a particularly effective job of upselling existing customers as we processed a large renewal volume in the quarter. Finally, during Q4, we added new logo customers to the long list of users of our Parcel, Global Trade Management and TMS applications. Looking back on FY 'twenty five, I'm very proud of the way our commercial teams handled multiple priorities at once, driving new sales while at the same time leaning in hard to solve legacy customer satisfaction issues and improve our renewal performance. While the work we have done to stabilize and strengthen retention during FY '25 was absolutely necessary, I'm excited to say that in FY '20 '6, our commercial organization should be largely freed up to focus its full attention on expanding our pipeline and winning new opportunities.

[Greg Randolph, Chief Commercial Officer at E2open Parent]

We are also taking other important steps to make FY 'twenty six a year of intensive focus on improving sales productivity. For example, our marketing and sales operations teams have collaborated on a deep dive examination of the key attributes and characteristics of E2Open's most successful long term client relationships and most meaningful recent wins. We are now rolling out what we call looks like campaigns. These are highly refined and targeted demand generation strategies designed to engage high value accounts that look like our best customers. These campaigns will focus on selling our most successful products into the industries and markets where the data tells us we have the best chance to win.

[Greg Randolph, Chief Commercial Officer at E2open Parent]

This type of targeted selling based on ideal customer profiles and field driven solution use cases should increase our ability to take advantage of our single largest market opportunity, which is monetizing our existing installed base, as well as to drive more new logo wins. Additionally, our commercial teams are taking the opportunity provided by recent tariff changes to amplify and leverage E2Open's thought leadership and technical expertise around global trade management. For example, we have made the import cost calculator embedded in our global trade application available to prospective clients on a trial basis. These companies can load their data into the tool and use it to evaluate multiple scenarios for landed cost estimates based on alternative trade lanes and sourcing destinations. We are supplementing this activity for potential new customers with educational and outreach efforts around tariff management, such as webinars and white papers.

[Greg Randolph, Chief Commercial Officer at E2open Parent]

This and other campaigns we have undertaken are designed to capitalize on growing demand for our global trade management application, which is the industry's most powerful and complete tool for streamlining international trade processes and compliance. Before handing off to Marie, I'll close with a few comments around our professional services business. Our professional services business has stabilized sequentially despite declining year over year, and Q4 bookings were above the recent revenue run rate. We are continuing to utilize unbilled PS resources to address specific client satisfaction issues and will continue to do so as necessary to benefit our consolidated business. However, unbilled PS activity has stabilized as well.

[Greg Randolph, Chief Commercial Officer at E2open Parent]

And I'll reiterate what I said to our entire commercial team during our recent global field kickoff. Because of our progress, focus, and the important steps we are taking together, I am optimistic about our future and excited for FY '26. With that, I'll turn the call over to Marie.

[Marje Armstrong, CFO & CHRO at E2open Parent]

Thank you, Greg. Today, I will review our fiscal fourth quarter and full year '20 '20 '5 results, and then close with a discussion of our FY 'twenty six guidance. First, I would like to recognize and thank our E2Open team members around the world for their dedication to our clients and our company this past year and every day. Thank you for all that you do. Now on to our reported results.

[Marje Armstrong, CFO & CHRO at E2open Parent]

Subscription revenue in the fiscal fourth quarter twenty twenty five was $133,000,000 above the midpoint of our $131 to $134,000,000 guidance. On a year over year basis, subscription revenue declined 1%. On a constant currency basis, the year over year decline was only 0.5%, which represents another improvement in our subscription growth rate, both sequentially and versus the prior year quarter. This improving growth performance was driven by our continued progress on retention and bookings in the second half of FY 2025. For full fiscal year 2025, subscription revenue was $528,000,000 declining 1.6%.

[Marje Armstrong, CFO & CHRO at E2open Parent]

FY 'twenty five revenue growth was impacted by the slower bookings and elevated churn we experienced in FY 'twenty four and Q1 FY 'twenty five, partially offset by the improvements we have made in both of these areas of our business starting in Q2 FY25 and continuing through fiscal year end. Professional services and other revenue in the fiscal fourth quarter was $19,700,000 a year over year decline of 18.3%. The end of certain large service projects in the first half of FY24 had a continuing impact on Q4 PS revenue performance, as did targeted PS related investments in client satisfaction and renewals. Professional services revenue for full fiscal year 2025 was 79,700,000.0 a decline of 18.4%. Total revenue for the fiscal fourth quarter was $152,700,000 reflecting a decline of 3.6% over the prior year quarter.

[Marje Armstrong, CFO & CHRO at E2open Parent]

For full fiscal year 2025, total revenue was $607,700,000 reflecting a growth rate of negative 4.2% over the prior year. Turning to gross profit, in the fiscal fourth quarter of twenty twenty five, our non GAAP gross profit was $104,200,000 a 6.1% decrease year over year. Non GAAP gross margin was 68.2% in Q4 versus 70% in the prior year quarter. Non GAAP gross margin for full fiscal year 2025 was 68.5% compared to 69.4% in the prior year. For both the quarter and the full year, lower subscription and PS revenue drove the reductions in consolidated margin.

[Marje Armstrong, CFO & CHRO at E2open Parent]

In addition, on the PS side, as previously noted, we have invested in unbilled work to improve client satisfaction, secure renewals, and strengthen implementations. In our subscription business, we have also invested in our customer care organization in order to provide high quality customer service. We expect the impact from these investments to normalize as we return to growth. Turning to EBITDA. Our fourth quarter adjusted EBITDA was $56,300,000 a 36.9% margin compared to $55,100,000 and 34.8% margin in the prior year quarter.

[Marje Armstrong, CFO & CHRO at E2open Parent]

Our continued strong adjusted EBITDA margins reflect our ongoing commitment to operational efficiency. Q4 G and A expenses were lower year over year due to continued efforts to streamline corporate support functions, control discretionary spend such as external consulting and T and E, and refocus our marketing spend around more productive client centric activities. R and D expense benefited from cost efficiencies that we continue to realize by optimizing onshore versus offshore development headcount. For full fiscal year 2025, adjusted EBITDA was $215,500,000 compared to $220,300,000 in the prior fiscal year, a decrease of 2.2%. Adjusted EBITDA margin for full fiscal 2025 was 35.5%, up from 34.7% in the prior year.

[Marje Armstrong, CFO & CHRO at E2open Parent]

The full year margin performance is further evidence of our ability to control costs in our business. Finishing up on profitability, net loss for the fiscal fourth quarter of twenty twenty five was $268,500,000 This net loss includes a noncash goodwill impairment charge of $245,000,000 Similar to impairments we reported in previous quarters, the trigger event for this latest impairment was a decline in our share price during the fourth quarter. For the full fiscal 2025, net loss was $725,800,000 The full year net loss figure included a noncash goodwill impairment charge of $614,100,000 taken in the third and fourth quarters of this fiscal year. Now turning to FY '25 cash flow. Adjusted operating cash flow was $56,700,000 in the fourth quarter and $111,400,000 for the full fiscal year.

[Marje Armstrong, CFO & CHRO at E2open Parent]

We ended the fiscal year with a cash balance of $197,400,000 an increase of $46,000,000 from the third quarter, which is a record sequential cash build for E2Open, thanks to process improvements we have made in our accounts receivable collection function. Year over year, our cash balance increased by $63,000,000 which further highlights the robust cash generation capability of our business. This completes my remarks on our fiscal Q4 and full year FY 'twenty five financial results. At this point, I'd like to introduce our FY 'twenty six and first quarter financial guidance and provide our thoughts around key drivers of our forecasted performance. We expect FY 'twenty six subscription revenue to be in the range of $525,000,000 to $535,000,000 representing a year over year growth rate of negative one point zero to positive 1%.

[Marje Armstrong, CFO & CHRO at E2open Parent]

In terms of key performance drivers, we expect client retention to improve year over year and bookings momentum to build as we move through FY 'twenty six. Overall, these FY 'twenty six trends of improving sales execution and continued retention focus should position the business well to return to positive growth as we move through the fiscal year. For the first quarter of FY 'twenty six, we expect subscription revenue in the range of $129,000,000 to $132,000,000 representing a 1.8% decline to a 0.5% increase on a year over year basis. For Q1, we expect continued year over year improvements in bookings and churn with further momentum from there as we go through the year, as Q1 is typically our highest level of upward renewals and churn. We expect FY twenty twenty six total revenue to be within the range of 600,000,000 to $618,000,000 representing a year over year growth rate of 0.2% at the midpoint.

[Marje Armstrong, CFO & CHRO at E2open Parent]

This guidance range is wider than we normally provide at this time of the year in order to incorporate a more conservative view given the current tariff led economic uncertainty. Our total revenue forecast includes our professional services business, which stabilized during FY25 and is positioned to build on improved bookings momentum as we move through FY '20 '20 '6. Our PS business will continue its current focus on driving client satisfaction, delivering flawless implementations and supporting new subscription sales. However, we also intend to look for opportunities to grow the PS business as we move forward. We expect FY twenty six gross profit margin to be within a range of 68% to 68.5%.

[Marje Armstrong, CFO & CHRO at E2open Parent]

As we return to growth, we expect to realize upside to our gross margin given the significant operating leverage inherent in our business, particularly relating to our subscription business gross margin, but also to our ability to proactively control services gross margin as needed. We expect FY 'twenty six adjusted EBITDA to be within the range of 200,000,000 to $210,000,000 implying an adjusted EBITDA margin of 33% to 34%. Given our revenue guidance and our proven ability to control expenses, as demonstrated by several years of increasing EBITDA margin, we feel very comfortable with our ability to continue generating strong adjusted EBITDA in FY 'twenty six. That said, accelerating our top line growth is our primary focus for this year and beyond. Our FY 'twenty six adjusted EBITDA guidance reflects the fact that we're evaluating a number of targeted, prudent investments in our commercial and product development organizations to support our future growth, with some projects and incremental spend getting underway in Q1.

[Marje Armstrong, CFO & CHRO at E2open Parent]

As evidenced by our FY 2025 performance, cash generation continues to be a top priority for our management team. In FY 2026, we expect adjusted operating cash flow as a percentage of adjusted EBITDA to be roughly in line with FY 2025, implying that our net leverage ratio should decline from four point zero times adjusted EBITDA at the end of FY 2025 to approximately 3.8 times by the end of FY '26. In conclusion, during FY '25, we made meaningful progress in positioning E2Open for a return to sustainable growth, and we see many reasons to be optimistic about our business in this new fiscal year. We made material improvements in retention in FY '25, and subscription bookings gained momentum throughout the fiscal year. As Andrew noted, we see many other green shoots of progress across our company, which are a direct result of our renewed commitment to client centricity and value realization.

[Marje Armstrong, CFO & CHRO at E2open Parent]

This has enabled us to move very close to an inflection point where our growth turns positive again, which will be a very important milestone. This progress, as well as the very high quality of business we win each quarter, gives us confidence as we continue executing our growth plan. That concludes our prepared remarks. Operator, please open the line and begin the Q and A session.

[Operator]

Thank you. At this time, we will be conducting a question and answer you. And the first question comes from Chris Quintero with Morgan Stanley. Please proceed.

[Chris Quintero, Analyst at Morgan Stanley]

Hey, Andrew, Greg, Marie. Thanks for taking the questions here. I wanted to ask on the fiscal year 2026 revenue guide. Really great to see the implied return back to positive growth there. But kind of a two part question.

[Chris Quintero, Analyst at Morgan Stanley]

On the subscription side, how should we think about the linearity throughout the year? Will it be kind of more steady improvement like we saw in 2025? Or would there be more improvement in the second half of the year? And then the second part of the question is on the PS side. Looks like that guide also implies a nice improvement in the year over year growth rate throughout the year.

[Chris Quintero, Analyst at Morgan Stanley]

Just curious kind of what gives you the confidence and visibility into improvement on the PS side?

[Marje Armstrong, CFO & CHRO at E2open Parent]

Yes. Thank you so much for the questions. This is Marie. So first on the subscription revenue guidance side, so if you

[Marje Armstrong, CFO & CHRO at E2open Parent]

look

[Marje Armstrong, CFO & CHRO at E2open Parent]

at our FY25, just what we've reported for the last fiscal year, we've shown sequential and year over year improvement as we went through the year, so we should expect similar kind of style going forward. There is a lot more room for us to improve and we continue to make those improvements. You should expect to see our year over year growth rates just improve from execution as we go forward. Obviously, you look at the overall guidance, we're not baking in any sort of heroic numbers here and keep in mind the broader macro picture as well. So, trying to balance all the different areas here.

[Marje Armstrong, CFO & CHRO at E2open Parent]

When you look at our PS guidance which is implied in our full year guidance, we've actually taken a more conservative view here. Typically when you look at our overall total revenue guidance, it's a $15,000,000 range to start the year. This year the range is $18,000,000 to take into account again the broader macro volatility, at the midpoint sort of flat for PS, But quite frankly for our PS revenue, now that we've stabilized the business, we've actually seen nice pickup in sort of bookings and backlog as we mentioned in our prepared remarks. So again, we're trying to be conservative in our guidance, but there's definitely opportunity to build on PS revenue as well as we get through the year.

[Chris Quintero, Analyst at Morgan Stanley]

Got it. That's very helpful, Marie. And then you also mentioned some investments for '26 around the commercial business and making some product developments as well. So, just wondering if you could kind of unpack that. What exactly are you making those investments in?

[Andrew Appel, CEO at E2open Parent]

Yeah, Hey, this is Andrew. How are you?

[Chris Quintero, Analyst at Morgan Stanley]

Doing well, Andrew. How about you?

[Andrew Appel, CEO at E2open Parent]

Good. So we're at the beginning of, I think, clarifying our investments in product and our strategy of expanding our differentiation in the marketplace. But it started with bringing on Ratchet, as you know from last year, and moving Powell onto a head of strategy role. And the two of them have been working for the last three or four months to begin to put together a preliminary set of investments or initiatives that will extend our differentiation with our clients. Now,

[Andrew Appel, CEO at E2open Parent]

at this point, I

[Andrew Appel, CEO at E2open Parent]

think this year, it's not really spending some of the savings we've generated from prior periods. And I'd say these are the early obvious ones. They're not significant marginal dollars, but there are significant chance to make a real difference in the industry and our clients. So for example, there's three or four areas that I thought I would just describe. One is we're moving very quickly towards a client specific data platform around clean rooms so that we can consolidate all their data into one location when they're multi application users.

[Andrew Appel, CEO at E2open Parent]

And that's going to create a huge opportunity for AI and LLM models, analytics that they want to do on their supply chain, and linking in any other reporting engines because it's a very flexible platform. Another one is next generation planning. We have a view that we can make planning a real time experience rather than a scenario based experience. And over time, if you can get real time demand and real time supply on a multi echelon supply chain, then planning can become part of the execution life cycle versus a corporate exercise for scenario modeling, for example. So we're working on connecting those two sides of our platform together in real time.

[Andrew Appel, CEO at E2open Parent]

A third area is improving implementation speed. So Greg and I both are big believers that if we can half the time it takes to get an implementation in, clients get impact twice as fast. It usually takes six months and it takes three or nine months and it takes four and a half. That's just speed to impact is much higher. And speed to cross sell is much higher because in general, a client doesn't buy a second product or a third product unless the two that they have or the one that they have is already working.

[Andrew Appel, CEO at E2open Parent]

So that's always a waiting period. We can cut the implementation time in half. We'll increase speed to impact. The fourth is a co creation with a client around complex logistics management across modes of transport to enhance our ability to support end to end logistics. And we did that in cooperation with one of our biggest clients.

[Andrew Appel, CEO at E2open Parent]

And then finally, just as the last example, you obviously know what's going on with tariffs and global trade, so we are continuing to invest and we've made some announcements around automation. The next level is to enhance the AI and the tools for accelerating the speed through what is becoming a much more complicated set of calculations around landed costs and then building some optimizers.

[Chris Quintero, Analyst at Morgan Stanley]

Excellent. Super helpful, Andrew. Thank you.

[Operator]

The next question comes from Mark Stappel with Loop. Please proceed.

[Mark Schappel, Managing Director at Loop Capital Markets LLC]

Hi. Thank you for taking my question. Andrew, starting with you, I appreciate your commentary in your prepared remarks around your global trade capabilities. But I was wondering if you could provide some additional details around some of the customer conversations you're having regarding global trade. For instance, is opening discussions to get you in the door?

[Mark Schappel, Managing Director at Loop Capital Markets LLC]

And then once you're in the door, is it opening up just a broader discussion around your just digital transformation capabilities for supply chains in general? Any further help or any further insight would be helpful.

[Andrew Appel, CEO at E2open Parent]

Yeah. The first thing I'd say about the uncertainty in the environment and the constant rapid change to tariff rates, the first thing it is is what I've told our own teams. This is kind of a moment of truth. Every five to ten years, your clients look at you and you say, are you there for us when we most need you? And so this is one of those moments where the world has gotten infinitely more complicated when it comes to global trade, and they're expecting us to basically help them navigate these very difficult and complex times.

[Andrew Appel, CEO at E2open Parent]

And our teams are working night and day. We have hundreds of people keeping up with all the changes and thousands plus people serving our clients. So the impact of that is that clients right now are, quote, heads down delivering and trying to make sure they can process customs. And so they're not calling us about new features or new things unless it speeds up, unless it's an accuracy question or a speed question. Because the complexity of all the work has increased dramatically.

[Andrew Appel, CEO at E2open Parent]

And so we have to process more and less time. And so that's what we're really focused on now is how to do it. So we're not likely, I think, in this period of uncertainty to see clients change who they're using for global trade, at least in the next, call it, two to six months. And so for us, it's a chance to prove we are the market leader that we are, make sure that all of our existing clients are dealing with the complexities better than any other software vendor player in the space. And then that will open up, I think, a lot of opportunities in the second half of the year.

[Andrew Appel, CEO at E2open Parent]

A bit akin to how things played out, different scenarios with COVID. So there was a lockdown period, and there was a whole bunch of supply chain impacts, out of stocks, issues of getting things around the world. And we saw once the steady state didn't disappear, which unless our president wakes up and changes his whole philosophy overnight, the complexity plays through the supply chain. So job one is I've to get my stuff through customs, got to pay the tariff, I got to have the right cost. Then it becomes like, well, what does my supply chain actually look like?

[Andrew Appel, CEO at E2open Parent]

And how do I optimize when I'm not just solving for like I got stuff in a port that I got to get through, but I'm going to optimize around medium term cost of delivery, inventory, all the things that we do great at. That is how I think Greg and I look at it. It's like now's the time to deliver. And then I think as we evolve into the second half of the year, you're going to see a lot of people asking, are we with the right partner?

[Mark Schappel, Managing Director at Loop Capital Markets LLC]

Great, thanks. And then with respect to the demand environment, I was wondering if you could just comment on what you're seeing on the trucking or the freight side of your business.

[Greg Randolph, Chief Commercial Officer at E2open Parent]

Yeah, mean, hey, Mark, it's Greg. Good to connect with you. We're not seeing, at least near term, any significant movements. It's been pretty stable, both in terms of road transportation as well as ocean transportation, so there hasn't been a significant shift, at least with our clients.

[Mark Schappel, Managing Director at Loop Capital Markets LLC]

Great. Thank you.

[Operator]

The next question comes from Andrew with Bank of America. Please proceed.

[David Ridley-Lane, Analyst at Bank of America]

Hi, this is David Ridley Lane on for Andrew Obin. The first question on the first quarter subscription revenue guidance, what are the kind of factors that are driving it down sequentially?

[Marje Armstrong, CFO & CHRO at E2open Parent]

Yeah. Hi, Marie. So if you look at our last couple of years, you've seen sort of Q1 sequential dollar based step down. And it's really a factor of a couple of things. First, when you think about our churn versus bookings, so within a quarter, churn is generally more front end loaded versus bookings is more back end loaded.

[Marje Armstrong, CFO & CHRO at E2open Parent]

As mentioned in our prepared remarks, for Q1, there is generally churn is elevated just because of higher overall renewals. Again, Q4 being our largest bookings quarter, generally that kind of spills over to Q1. So when we look at our Q1 from sort of churn perspective, we expect that to be the highest for the year and then improve from there with again Q1 churn still being down year over year, so continued improvements, but just seasonally higher point for the year.

[David Ridley-Lane, Analyst at Bank of America]

Got it. And then on the, you know, on the full year subscription revenue guidance, I mean, if I understand you right, your net retention rate is 99%. Bookings are growing year over year. It's sort of putting the midpoint at kind of flat. Would you describe that as conservatism?

[David Ridley-Lane, Analyst at Bank of America]

What are some other potential offsets to that?

[Marje Armstrong, CFO & CHRO at E2open Parent]

Yeah, I mean, think if you I think it's appropriate to be somewhat conservative in the current environment. If you look at our Q1 guidance, right, the high point implies we already get back to growth, right? So depending on where we land Q1, we expect to return to positive growth and then to continue to make incremental improvements in our year over year growth rates from there for the full year.

[David Ridley-Lane, Analyst at Bank of America]

Got it and then the investments in product, is there a similar willingness to invest in Salesforce structure and headcount?

[Marje Armstrong, CFO & CHRO at E2open Parent]

Yes, absolutely. So, you know, this is consistent with what we've sort of communicated for the last several quarters where, you know, we've been systematically looking for efficiencies, you know, especially sort of in the back office areas and then looking for ways to invest in our client facing organizations, so including commercial customer care, and then importantly also our product organizations. So those are the areas we're targeting investment.

[David Ridley-Lane, Analyst at Bank of America]

All right. Thank you very much.

[Marje Armstrong, CFO & CHRO at E2open Parent]

Absolutely. Thanks for the questions.

[Operator]

Okay. If there are any remaining questions, please indicate so now by pressing star one. We have a question coming from Adam Hotchkiss with Goldman Sachs. Please proceed.

[Adam Hotchkiss, VP - Emerging Software Equity Research at Goldman Sachs]

Great. Thanks so much for squeezing me in here. I just wanted to touch on the legacy customer satisfaction piece. I know that gross retention has been at or around 90% for a little while now, improved a little bit to 91%. And I think that's still a couple of points behind where you were back during 2021 and 2022.

[Adam Hotchkiss, VP - Emerging Software Equity Research at Goldman Sachs]

So how would you characterize what inning you're in now? I know you mentioned the 60% reduction in support tickets and some continued unbilled professional services flowing through. But sort of where are we in the process of getting back to normalized churn? And sort of how much longer should we expect there to be on some of these support ticket reductions and unbilled PS in order to sort of get back to where you were historically?

[Andrew Appel, CEO at E2open Parent]

Yeah, I would I don't know about inning, but if had to pick one, I'd say somewhere between the fifth and sixth inning. So whatever, 55 to twothree of the way there. I think as we look at churn issues, if we look back at last year, still frustratingly 30% to 40% of those losses were situations where we were informed of them in 'twenty three and 'twenty four. So it's still the tail end of mistakes made back then. Not much you can do about it, but that is down from 50% to 60% last year.

[Andrew Appel, CEO at E2open Parent]

And I think heading down to zero probably in FY middle, early middle of FY 'twenty seven. With that, once we basically eliminate what I'd call sins of the past, then you get to a normalized level of GRR of 93% to 95% if you just take out that

[Adam Hotchkiss, VP - Emerging Software Equity Research at Goldman Sachs]

Got it. So that's really helpful.

[Andrew Appel, CEO at E2open Parent]

Four or five more quarters, I'd say. But on a continued on a declining basis, right, just because I think the biggest lumps are behind us or will be behind us by the end of next quarter or this quarter.

[Adam Hotchkiss, VP - Emerging Software Equity Research at Goldman Sachs]

Yep, that's really helpful. And Marie, would you just remind us I know there's the potential for volatility in global trade volumes. To what extent E2 Open has exposure to changes in those volumes within your product?

[Marje Armstrong, CFO & CHRO at E2open Parent]

So to changes in our products. If

[Adam Hotchkiss, VP - Emerging Software Equity Research at Goldman Sachs]

you Sorry. The revenue. Yeah. Yeah. Revenue.

[Adam Hotchkiss, VP - Emerging Software Equity Research at Goldman Sachs]

Any, like, revenue exposure to volatility in the closed trade volume.

[Marje Armstrong, CFO & CHRO at E2open Parent]

Yeah, absolutely. So when you look at our public disclosures as well, our pure volume based revenue exposure is at 2% now, down from about four percent two years ago. But there's a lot of different businesses that are in that. And as you can imagine, we've spent quite a bit of time making sure that we understand that. It's not fully clear given all the volatilities that even that part of the business really is impacted.

[Marje Armstrong, CFO & CHRO at E2open Parent]

But again, that's 2% of our total revenue. We do also have, if you recall, following COVID, we do have some what we've called previously tiered or volumetric revenue where depending on the volumes, there is annual potential step ups or step downs for that contract. We have our commercial team has done an incredible job converting most of those contracts into fixed price. So different from what we saw sort of at the end of FY24 surprise there at those tier step functions that impact now is really minimal. So when you think about those just volume or volumetric fluctuations like including even those it's probably around 3% or something like that of total revenue.

[Adam Hotchkiss, VP - Emerging Software Equity Research at Goldman Sachs]

Okay. That's really helpful color. Thanks, Marie. Thanks, Andrew.

[Marje Armstrong, CFO & CHRO at E2open Parent]

Absolutely. Thanks for getting on the call.

[Operator]

Okay. We have no further questions in the queue. I would like to turn the call back over to management for any closing remarks.

[Andrew Appel, CEO at E2open Parent]

Thank you very much. First, think hopefully a number of our employees that are listening out, just a big shout out for all your hard work. Thank you for hanging with us. I think this organization has a really bright future. Right?

[Andrew Appel, CEO at E2open Parent]

We do important things for important companies. Change is hard and we've been working very hard at improving on all the dimensions that matter, the most important of which is serving clients with distinction. If we do terrific work for clients and we exceed their expectations, given our portfolio and the area that we work in, we have a really bright future. And I'm really excited about our progress. Nothing is ever fast enough if you're a CEO.

[Andrew Appel, CEO at E2open Parent]

It kind of comes with the job. So I wish it was faster, but I couldn't be more prouder of all the people that work for you to open and all their hard work to keep us moving forward despite occasional headwinds or changes. We're excited about the journey we're on, and I think we're starting to make real progress. So thank you. Thank you for the investors for sticking with us, and thank you to our employees for fighting hard for us every day.

[Operator]

Thank you. This concludes today's conference and you may disconnect your lines at this time. Thank you for your participation.

Participants

Executives

• Russell Johnson, SVP - Treasurer & Investor Relations
• Andrew Appel, CEO
• Greg Randolph, Chief Commercial Officer
• Marje Armstrong, CFO & CHRO

Analysts

• Chris Quintero, Analyst at Morgan Stanley
• Mark Schappel, Managing Director at Loop Capital Markets LLC
• David Ridley-Lane, Analyst at Bank of America
• Adam Hotchkiss, VP - Emerging Software Equity Research at Goldman Sachs