E2open Parent Holdings Inc Q1 2025 Earnings Call Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Adam Hotchkiss - Goldman Sachs Group, Inc. - Analyst : I'm curious just to start, you give more specifics on what gives you the confidence on churn improvement throughout the year? Is this just a result of new going out and getting soft commitments well ahead of renewals or just scrubbing and engaging with your pipeline more aggressively than you've done in the past. Just any specifics on what gives you confidence on the improvement and acceleration there relative to what you printed in the first quarter would be useful?

Question: Adam Hotchkiss - Goldman Sachs Group, Inc. - Analyst : And then I just wanted a quick follow up on the resource reallocation away from professional services. Could you just maybe talk about the puts and takes and what those were around the competition, just pushing out some of this PSP backlog even more have an offsetting impact on satisfaction for customers who are waiting on that? Or how do you think about sort of the puts and takes there?

Question: Chris Quintero - Morgan Stanley & Co LLC - Analyst : I want to ask about the deal closure delays. Great to see almost half of those already closed in June, but just curious to hear your thoughts and expectations for the rest of the year. Do you think these delays will continue throughout the year? Or do you think it was more of a one-time impact given Q1 is always a seasonally weak quarter?

Question: Chris Quintero - Morgan Stanley & Co LLC - Analyst : Got it. That's super helpful, Greg. And then I want to follow up on the pro services change Can you go into a little bit more detail about maybe what some of those specific examples of that non-billable work that you did for customers? And maybe what are some of the positive results that resulted from that work?

Question: Taylor McGinnis - UBS Investment Bank - Analyst : The first one is just in terms of the cause of the deal delays, I'd love to get a little bit more color there. So do you think it was more macro-related weighing on those decision. Was there potentially any disruption from like the sales changes that you guys have made? And then as a second part to that question, as we think about these deal delays and how that might play into the trajectory of subscription billings growth throughout the year compared to the 1Q decline of 6%, any additional color you can give there? Thanks.

Question: Taylor McGinnis - UBS Investment Bank - Analyst : And then my last question is so you talked about the deals that were pushed from 1Q into 2Q, and it sounds like you are expecting churn and bookings to start to improve in 2Q but when I look at the subscription revenue guidance it still implies a quarter over quarter decline. So can you just help us square those comments? Is that maybe the guide just reflects additional conservatism. Is there a risk that some deals get delayed further? I guess what are the assumptions driving that guide?

Question: Mark Schappel - Loop Capital Markets LLC - Analyst : Greg, in response to an earlier question around the slipped deals, you noted that you don't expect that to utilize to be an issue going forward. Just wondering if you could just provide additional color around what gives you this confidence? Was it because the slipped deals are just more of an internal execution issue rather than a macro concern? Maybe just provide additional color around that.

Question: Mark Schappel - Loop Capital Markets LLC - Analyst : And then Andrew, you've been with the company about almost nine months now with EBITDA margins kind of hovering in the low to mid 30% range. Do you believe the firm needs to go through another investment cycle just to bring sales execution closer to market growth rates?

Question: David Ridley-Lane - BofA Securities - Analyst : Hey, this is David Ridley-Lane on for Andrew. Quick question, your competitor of yours, Blue Yonder is acquiring one network competing supply chain network. I believe it's the second largest behind you. How do you think that might change the competitive landscape for the company going forward?

Question: David Ridley-Lane - BofA Securities - Analyst : And then just wanted to clarify. So first here is the peak level of churn that you expect, returning to normalized levels by the beginning of fiscal year '26? I guess, I may have had it wrong, but I thought there was more of a pronounced step-down in churn in the second half. Are you sort of saying, it's more ratable as we go through the next three or four quarters? Or is there still kind of a step-down, non-linear step down in the second half on churn? Thank you.