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eGain Corporation (NASDAQ:EGAN)
Q2 2020 Earnings Call
Feb 6, 2020, 5:00 p.m. ET

Contents:

  • Prepared Remarks
  • Questions and Answers
  • Call Participants

Prepared Remarks:

Operator

Good day, and welcome to the eGain Fiscal 2020 Second Quarter Financial Results Conference Call. Today's call is being recorded.

At this time, I would like to turn the conference over to Jim Byers at MKR Investor Relations. Please go ahead.

Jim Byers -- Investor Relations

Thank you, operator, and good afternoon, everyone. Welcome to eGain's second quarter fiscal 2020 financial results conference call.

On today's call are eGain's Chief Executive Officer, Ashu Roy; and Chief Financial Officer, Eric Smit.

Before we begin, I would like to remind everyone that during this conference call, management will make certain forward-looking statements, which convey management's expectations, beliefs, plans and objectives regarding future financial and operational performance. Forward-looking statements are generally preceded by words such as believe, plan, intend, expect, anticipate, or similar expressions. Forward-looking statements are protected by safe harbor provisions contained in the Private Securities Litigation Reform Act of 1995. These forward-looking statements are subject to a wide range of risks and uncertainties and could cause actual results to differ in material respects. Information on various factors that could affect eGain's results are detailed on the Company's reports filed with the Securities and Exchange Commission. eGain is making these statements as of today, February 6, 2020, and assumes no obligation to publicly update or revise any forward-looking information in this conference call.

In addition to GAAP results, we will discuss certain non-GAAP financial measures such as non-GAAP operating income. Our earnings press release can be found on the News Release link on the Investor Relations page at eGain's website at www.egain.com. And the tables included with the earnings press release include reconciliation of the historical non-GAAP financial measures to the most directly comparable GAAP financial measures.

A replay of this conference call will also be available at the Investor Relations section of eGain's website.

And now with that said, I'd like to turn the call over to eGain's CEO, Ashu Roy.

Ashutosh Roy -- Chairman and Chief Executive Officer

Thank you, Jim, and good afternoon, everyone. We are quite pleased with our financial results for the second quarter. Both on the top line and the bottom line, we exceeded our guidance, and we're ahead of Street consensus. And we saw solid growth in SaaS revenue, both sequentially and year-over-year. We also continued to rapidly march toward the SaaS-only business model. In fact, SaaS plus professional services revenue, which is essentially our go-forward business represents 87% of our total revenue in Q2. This is up from 77% of total revenue in the same quarter last year, a good progress. And our SaaS plus professional services revenue grew 16% this quarter year-over-year.

As we drive our legacy customers actively to adopt our SaaS solution, even at the risk of attrition, sometimes -- we have talked about this for a few quarters now. Going forward, we believe this is the relevant top line number, which is SaaS plus professional services revenue. The relevant top line number for our business. So we focus on that from a growth and value standpoint.

Looking at business in the quarter. Our customer health remained strong. We booked good business in the quarter as well across new logos and existing customers. One of our exciting new logos last quarter was a very large retailer, where we partnered with Cisco.

Turning to the market, we see a couple of trends in terms of vertical and geography. The positive financial services continue to be our number one vertical, as always, and they're growing the fastest. Especially in the US, financial services clients are investing heavily in customer engagement and intelligent self-service. On the negative, we see Europe slowing down in terms of technology investment. Given the strength, we anticipate increased efficient risk in our European customer base. Accordingly, we are investing more in the financial services vertical and more so in the US than in Europe.

Our sales and marketing investment, as you may have seen, stands at 26% of revenue in Q2 with continued hiring and increased marketing, we expect it to move closer to 30% in Q3 and then move up into the low 30% range in Q4. As we have mentioned before, our sales and marketing investment falls in three buckets. First, customer success, which includes customer success teams partnering closely with our expanding professional services team that deliver continuous value to our SaaS customers. Second, demand generation, which includes more marketing, both people and programs, as well as expanded partner recruiting, enablement and training. And third, the sales capacity expansion, both inside and field. So we are tracking nicely to the growth plan in terms of increased investment in sales and marketing across these three trends.

The next topic I want to share an update on is our progress on go-to-market around our new Sales Advisor solution. As you all know, we launched the Sales Advisor solution to very good reception last October in Chicago. Since then, market feedback has been very encouraging and broad-based cross megabanks, regional banks, credit unions, mortgage funds, insurance companies, and fintechs. So very broad-based. In fact, our team led by Evan Siegel, has conducted over 25 demos to interested prospects in the last three months, including the holidays.

Solution is also attracting good conversations and interest with vertically focused teams in both large and mid-sized SI and consulting organizations. These are potential partners for us. They are interested in our solution because they are looking to provide interesting approaches to C-suite clients who they are advising on how to move the growth needle. This is an interesting approach for us to be relevant in these C-suite conversations working with some of the partners. What we are hearing consistently that our Sales Advisor solution is addressing three outstanding strategic pain points: number one, sales effectiveness, how do you drive it up? Second, client adherence, how do you ensure it better and in auditable, proveable way? And third, operationalizing the -- what is now almost a universal corporate mission in fintech and financial services companies of improving customer "financial health." So these three pain points are strategic. They seem to be getting broad-based and we seem to be addressing them in a way that is quite compelling and differentiated compared to what is available out there. That's what we hear.

So we have now landed two other customers, both in the SMB area because their decision making is faster, as you know. Interestingly, both of those, we are in direct relationship and conversation with the CEO of the two clients, they are the sponsors of our engagement. And now our team is actively deploying the solution.

Overall, sales-focused customer engagement, which is what Sales Advisor is, is proving to be a natural expansion of our current business, which is centered around customer service. We are super excited about the potential.

Third and finally, I want to share an update around our partnership with Avaya. Today, we announced that we have entered into an OEM agreement with Avaya, which will enable Avaya to offer our cloud-based digital engagement capabilities branded Avaya to Avaya Workspaces for elite customers. This solution is currently slated to be generally available later this quarter. Avaya announced this capability at their customer event, Avaya ENGAGE in Phoenix earlier this week. We are thrilled about this agreement. We see this as a very nice opportunity to jointly serve Avaya clients with integrated best-in-class solutions across voice and digital.

Early interest at the field level in Avaya and their partner ecosystem is strong. We believe this partnership, just like our successful Cisco partnership will over time enable us to serve many more global businesses with which easy solutions that we offer.

As market analysts and our customers tell us, our solutions are best-in-class in terms of feature, feasibility, scale. What we are focused on now with an example of this Avaya partnership and, of course, our successful Cisco partnership is to increasingly deliver these cloud-based solutions to these partnerships with complementary technology platforms and the ecosystems as well as direct to clients, so we're driving both.

With that, I'll Eric Smit, our Chief Financial Officer, to add more color around financial operations. Eric?

Eric Smit -- Chief Financial Officer

Thanks, Ashu. As Ashu noted, we achieved top and bottom line results in Q2 that exceeded our guidance and we're ahead of Street consensus.

Looking at the financial highlights for Q2. SaaS revenue was up 19% year-over-year and 13% sequentially. Our non-GAAP gross margins were 72% for the quarter, a 300 basis point improvement year-over-year and well on pace to achieve our long-term target of 75%. Non-GAAP net income was $2.5 million, or $0.08 per share and we generated $5.3 million in cash from operations during the quarter, with cash flow margin of 29%.

Now, looking at our quarterly results in more detail. As we have shifted to 100% SaaS business, substantially all of our professional services is now for our SaaS customers. So we believe, as Ashu mentioned, the combination of SaaS revenue and professional service revenue is a useful measure to value our business on a forward-looking basis. For Q2, our SaaS and professional services revenue of $15.9 million comprised 87% of our total revenue. This leaves 13% of our total revenue in the legacy bucket, something that we are comfortably attracting to get down to 10% of total revenue on a quarterly basis by the end of calendar 2020.

Further, our Q2 SaaS plus professional services revenue grew at 16% year-over-year and on a year-to-date basis grew 18% year-over-year. This highlights our progress toward our long-term target model of total revenue growth of between 20% to 25% per year as we increase investments in sales and marketing in line with our plan.

Looking at the revenue components. SaaS revenue was $14 million, up 19% year-over-year and accounted for 77% of our total revenue in Q2. While we were up against a tough comp from Q2 last year, given one-time $900,000 seasonal benefit we experienced last year, on a sequential basis, SaaS revenue grew 13% over Q1. And year-to-date, SaaS revenue is up 24% year-over-year. As expected, the seasonal impact was down significantly when compared to a year ago. The amount of seasonal benefits we estimate to be approximately $150,000 in this quarter.

When looking at the sequential growth rates, the primary drivers lumped into three categories: we saw new bookings, expansion of our store base, and the migration of the large legacy customers to SaaS. Our renewals and retentions continue to be positive in the quarter. The trailing 12-month SaaS retention rates remained healthy with gross retention in the low 90% range. And our net retention, which includes upsell and uplift, continued to be above 100%.

Legacy revenue was $2.3 million, down 42% from the year ago quarter, driven primarily by the large customer migration. And legacy accounted for 13% of our total revenue in the quarter. And as we've noted on past calls, we are driving the transition of our remaining on-premise customers to our SaaS offering, and as such, we expect to see a further decline in legacy revenue over the next several quarters.

Professional services revenue was $1.8 million, or 10% of total revenue, down 4% from $1.9 million. As we've noted before, our goal was to get our PS revenue in the high-single digits as a percentage of total revenue. Now that we've achieved this goal, we would expect our PS revenue to remain in this range as a percentage of total revenue going forward.

Now, looking at our non-GAAP gross profits and gross margins. We saw a healthy improvements in our margins in Q2. Gross profit for the second quarter was $13 million, or a gross margin of 72%, up from a gross profit of $12.3 million or a gross margin of 69% a year ago. The 300 basis point improvement year-over-year in our overall gross margin reflects a combination of the benefits we are starting to see, the scale and efficiencies around our SaaS operations, and the growth in our higher margin SaaS revenue, while our lower margin PS revenue has declined.

Now, turning to operations. Non-GAAP operating costs for the second quarter came in at $10.5 million compared to $9.8 million in the year ago quarter. We continue to prudently increase our investments in sales and marketing, and while the December quarter was quieter in terms of hiring due to the holidays, and Ashu noted, hiring activity has increased and our planned investments is very much under way. We expect sales and marketing as a percentage of revenue to get close to 30% in Q3, up from 26% in Q2.

Our non-GAAP operating income in the second quarter was $2.6 million or an operating margin of 14% compared to $2.5 million or a margin of 14% in the year ago quarter.

Looking at net income. Net -- non-GAAP net income for the second quarter was $2.5 million, or $0.08 per share on a basic and diluted basis. This compares to non-GAAP net income of $2.4 million, or $0.09 per share on a basic and $0.08 per share on a diluted basis in the year ago quarter.

GAAP net income for the second quarter was $2 million, or $0.06 per share, compared to GAAP net income of $2 million, or $0.07 per share in the year ago quarter.

Now, turning to our balance sheet and cash flows. Total cash and cash equivalents as of December 31, 2019, was $40.3 million, compared to $31.9 million at June 30, 2019. During the quarter, we generated cash flow from operations of $5.3 million, up significantly from $863,000 in Q2 last year. Our operating cash flow margin improved to 29% for the quarter.

Now, turning to our financial outlook and guidance. As Ashu stated, we see a large opportunity for our best-in-class product offering. With a healthy balance sheet, we are well positioned to increase our investments, particularly around sales and marketing to support expansion opportunities with our installed base, new business through partners and ramping our inside sales.

Before providing our revenue guidance, a few points to highlight. First, we are excited about the Avaya announcement, but have not factored it into our FY'20 guidance. As expected, our Q2 seasonal increase was not as great as last year, but we still saw about $150,000 of seasonality that we do not expect to reoccur in Q3. SaaS revenue plus professional services is a metric that is becoming increasingly relevant, we believe the best measure of the overall growth rate of our core business going forward. And our total revenue will continue to be negatively impacted with our migration, which to drop legacy business below 10% before the end of calendar year '20.

And again, as Ashu mentioned, in EMEA, we are seeing some softness and we expect to see a reduction in some of the accounts that were up for renewal in Q3. And this would impact SaaS revenue by approximately $300,000 in the quarter.

Year-to-date, the FX impact on our SaaS revenue is a negative $267,000 and for total revenue, a negative $362,000, which we have factored into our guidance. If the US dollar to British pound exchange rate remains at the current levels, we don't anticipate a significant further impact on the revenue for the remainder of the year.

Now, onto our guidance. For the fiscal year ending June 30, 2020, we are increasing the bottom end of our previously provided range for full-year SaaS revenue from $53.8 million up to $54.8 million. The new guidance range for SaaS revenue for the full 2020 is between $54.8 million to $55.4 million on a constant currency basis, which would represent growth between 22% and 24% year-over-year. Further, we expect SaaS and professional services revenue of between $61.2 million and $62.4 million on a constant currency basis, which would represent growth of between 18% and 20% year-over-year. We expect total revenue for the fiscal 2020 year to be at the lower end of our previously provided guidance, which was $72 million to $73.6 million on a constant currency basis, which would represent growth of 7% year-over-year.

And finally, we are raising our previously provided guidance for non-GAAP net income of between breakeven to $2 million or $0.00 to $0.06 per diluted share. The new guidance for the full fiscal year for non-GAAP net income of between $3.1 million to $4.5 million, or $0.10 to $0.14 per diluted share.

For the third fiscal quarter of fiscal '20, we are initiating guidance of SaaS revenue of $13.8 million to $14.1 million. SaaS and professional services revenue of $15.5 million to $15.8 million. Total revenue of $17.5 million to $17.8 million and to generate non-GAAP net income of breakeven to $500,000, or $0.00 to $0.01 per diluted share. We are now assuming a diluted share count of 32.6 million for the third fiscal quarter and for the fiscal year.

Lastly, on the Investor Relations front, later this month, again, we'll be presenting at the JMP Securities Technology Conference taking place February 24 in San Francisco. And then next month, we will be presenting at the fourth Annual ROTH Conference in Orange County, California on March 17. We hope to see some of you there.

This concludes our prepared remarks. Operator, we will now open the call for questions.

Questions and Answers:

Operator

Thank you. [Operator Instructions] And our first question comes from Koji Ikeda with Oppenheimer.

Chad Schoening -- Oppenheimer & Co. Inc. -- Analyst

Hi. This is Chad Schoening on for Koji. Thanks for taking the question, guys. Congrats on good quarter. Can you give us a split -- an idea of the split between new versus existing ARR signed up during the quarter? I know in the past you've mentioned customers increasingly starting small and growing. So, to that end, I'd be curious to hear kind of what products customers are most excited about in terms of upsell opportunities going forward? And then I have one more question. Thanks.

Ashutosh Roy -- Chairman and Chief Executive Officer

Okay. This is Ashu Roy here. So, yeah, I think the -- that trend is still very much the case, which is something we are kind of accustomed to now. So the level we see now is more like, in terms of dollars, we see more like two-thirds is expansion, one-third is new, but not in terms of new logos. We still acquire new logos, but they tend to build over time, which is something that has been a trend for some time now. Does that answer your question?

Chad Schoening -- Oppenheimer & Co. Inc. -- Analyst

Yeah. Thank you. That's great. And then in terms of kind of what customers are most excited about having that upsell motion? If anything kind of comes to mind, that would be great.

Ashutosh Roy -- Chairman and Chief Executive Officer

Right now, I would say, the most -- the highest level of interest we see is in intelligent self-service around virtual assistance and messaging. Those are the two areas we see a lot of interest in the market. And other than that, of course, the whole omni-channel capability where you don't have the silos of capability. That is always a steady increase. But in terms of real ability to pull the trigger quickly, I would say, those two that I mentioned are top.

Chad Schoening -- Oppenheimer & Co. Inc. -- Analyst

Great. Thank you.

Operator

Our next question comes from Mark Schappel with Benchmark.

Mark Schappel -- The Benchmark Company -- Analyst

Hi. Thank you for taking my question. Ashu, I was wondering if you could just address a little bit more detail the slowing in Europe that you noted in your prepared remarks, particularly where in Europe you're noticing the slowing.

Ashutosh Roy -- Chairman and Chief Executive Officer

Sure. So, I would say, differentially if you looked at it, mainland Europe is definitely slower than UK. But even in UK we are seeing decisions are just taking longer. So, that's kind of one observation. The other is that, US continues to be quite active and therefore, in comparison, I think it's even more apparent, right? So those are the two comments, I would say.

Mark Schappel -- The Benchmark Company -- Analyst

Okay, great. Thank you. And then, Eric, in your prepared remarks you noted a large legacy customer migrating to SaaS. I was wondering what the Company's outlook was for additional sales migrations for the remainder of the year?

Eric Smit -- Chief Financial Officer

That's actually very good. I think this for us, obviously, the number is coming down, as we've been communicating, as this is a very high focus for us. And I think we're encouraged to see that most of the top accounts that we're engaged with or interested in and are in different stages of that migration. So absolutely, we'll continue -- we expect to continue to see that through the remainder of the calendar year.

Mark Schappel -- The Benchmark Company -- Analyst

Okay, great. Thank you. That's good news. And then, Ashu, just -- finally one last question. I realized it's still early, but I was wondering if you could just give us an update on your recently released messaging hub and maybe any progress you're making there.

Ashutosh Roy -- Chairman and Chief Executive Officer

Sure. So that's kind of been adopted very well by the market. It's -- we are selling it not just as messaging but messaging as part of the overall omni-channel. So, in fact, a couple of customers we signed up recently, which I didn't mention in the mid-market, they started out with interested on messaging, but eventually ended up buying the entire suite. So, we've seen messaging as part of the omni-channel story, but it's a great entry point in terms of interest in demand, just like I mentioned to the prior question. Messaging and virtual assistance and conversational bots, those are the two things we are seeing a lot of interest in.

Mark Schappel -- The Benchmark Company -- Analyst

Great. Thank you. Very helpful. That's all for me.

Operator

Thank you. Our next question comes from Richard Baldry with ROTH Capital.

Richard Baldry -- ROTH Capital Partners -- Analyst

Thanks. It looks like recurring costs fell on the quarter, even with the revenues rising and that be the second quarter in a row for that. Is there anything unusual happening in there? How do you see that trending as the second half and maybe next year unfold?

Eric Smit -- Chief Financial Officer

Good point, Rich. So, consistent with what we've seen in previous years, the impact of many of our employees in California, in particular reaching their social security cap provides a positive benefits from a reduction in tax expenses, it may flake expenses. And then that combined with people taking time off toward the end of the calendar year as well resulted in reduction. So, certainly, I would estimate that there was probably $600,000 to $700,000 worth of benefit that we received on those two components that will obviously would not repeat in Q3.

Richard Baldry -- ROTH Capital Partners -- Analyst

And maybe can you talk a little bit more about the Avaya OEM, sort of maybe compare and contrast that to your Cisco relationship? What type of resources you will need to allocate to that or commitments from Avaya to allocate to that? So we kind of understand what its outlook could be, maybe size what you think the market opportunity would be? Thanks.

Ashutosh Roy -- Chairman and Chief Executive Officer

Sure. So many questions in that. Let me see if I can kick off one at a time. In terms of market opportunity, I would say that, the Avaya installed base in the enterprise, as you well know, is very large, probably the largest even now, despite some historic attrition that they've had. So that's the first point. Second is that, the solution we announced and -- rather Avaya has announced, and we are the provider in that is a cloud-based eGain capability that integrates into the enterprise solution from Avaya. So that is different from what our current OEM arrangement is with Cisco, as you know.

In the Cisco partnership, the OEM component of that is not from -- from eGain is not served from the cloud. The resell components of eGain -- branded eGain are served from the cloud. So that is an important distinction. We think that, as the market has now moved into the cloud model and adoption is good, that we will, comparatively speaking, be able to deliver greater customer success in this arrangement, just given the nature of a cloud implementation and the ability to control the eventual experience for the client. So that's the second point.

The third is, the partnership, the way it stands now is unlike the Cisco partnership, which is a bundled OEM, which has its own price points and attach rate, unlike that, this partnership, the OEM arrangement is an optional one. In other words, the customer would buy something additional to get the digital capabilities, which will be Avaya branded and we would be the provider for that. So, those are three kind of comparison points I can bring up.

In terms of our sense of the opportunity here, it's early days at Avaya, but Cisco is our number one partner, very successful. We've been working very closely with them for a number of years and clearly, we have joint customers and business success. Avaya, we're just building that, looks very promising but it's still early days. So, as Eric mentioned, for fiscal '20, we are not factoring anything from that partnership, but we do think that in fiscal '21, we should see the positive impact from them.

Eric, do you want to...

Richard Baldry -- ROTH Capital Partners -- Analyst

And last thing...

Eric Smit -- Chief Financial Officer

No. I think that's it. Thanks, Ashu.

Richard Baldry -- ROTH Capital Partners -- Analyst

Maybe lastly, the cash on the balance sheet has been growing nicely, any thoughts about like tuck-in acquisition, small buybacks, any other way to deploy that cash that's building up? Thanks.

Eric Smit -- Chief Financial Officer

Again, good point, Rich. It's something that we're obviously pleased with the progress. And so, definitely those are all options that we're considering, but nothing at this stage that we would want to highlight.

Richard Baldry -- ROTH Capital Partners -- Analyst

Thanks. Congrats on a good quarter.

Eric Smit -- Chief Financial Officer

Thank you.

Operator

Our next question comes from Jeff Van Rhee with Craig-Hallum Capital Group.

Rudy Kessinger -- Craig-Hallum Capital Group -- Analyst

Hey, guys. This is Rudy on for Jeff. Couple of questions for me. First, Eric, I want to go back to that weakness in Europe. If I heard correctly, I think you said that it's going to be a $300,000 headwind in Q3 from customers coming up for renewal. Is that from attrition or customers taking less product at renewal, less seats? Just a bit more color there would be great.

Eric Smit -- Chief Financial Officer

Yeah. I think there's a bit of both, but I think the most part was up at renewal or reduction was the primary driver, so it was taking less as opposed to a loss.

Rudy Kessinger -- Craig-Hallum Capital Group -- Analyst

Got it. Got it. Helpful. And then with the Avaya OEM, great color there, but just one more thing. So you guys' solutions, their OEMs into their workspace offering and that's the target their on-prem installed base or your guys' solutions also available? I know it's early for them in the cloud, but are your guys' solutions also available for their cloud contact center seats as well or just the on-prem?

Ashutosh Roy -- Chairman and Chief Executive Officer

So we have not announced anything or Avaya has not announced anything in that regard. We obviously looking at all those things as part of the partnership.

Rudy Kessinger -- Craig-Hallum Capital Group -- Analyst

Okay. Got it. And then, lastly, just want to look at the deferred revenues on the balance sheet, and obviously, we'll get the RPOs in the 10-Q. As I look over the last four or five quarters, revenues going up and sort of the divergence between the short-term RPOs and the guided revenue has gotten wider. How should we think about how deferred revenue in the RPO should trend from here going forward?

Eric Smit -- Chief Financial Officer

Yeah. So, I know we've addressed this in the past, Rudy. I think just sort of given our current business structure, unfortunately, this is a metric that's -- since it's been adopted, we haven't seen some obvious patents as it would sort of provides useful leading indicators. And I think as I've said in the past, the main factors that impact this is because we have a relatively concentrated group of customers, one or two large renewals that could be done on a multi-year in the past or renewed on an annual basis is going to sway [Phonetic] thing. So, I think it's really around the timing of when these big renewals come up. And so, from one quarter to the next, you may have fluctuations that are going on, as you point out, it's really aren't an indication of where the revenue growth is happening. So, I think to your point, these numbers really haven't moved around much. But again, more, I would say, a function of the timing of -- and the length of the renewals more so than anything else.

Rudy Kessinger -- Craig-Hallum Capital Group -- Analyst

Got it. Helpful. Got it. That's it for me.

Operator

Thank you. Our next question comes from Ryan McDonald with Needham & Company.

Alex Narum -- Needham & Company -- Analyst

Hey, this is Alex Narum on for Ryan. And I was hoping to get an update on the partnership with Amazon and if you're seeing any traction on that front?

Ashutosh Roy -- Chairman and Chief Executive Officer

So, yeah, we continue to work with Amazon. So we have been doing some joint marketing and working with their partners, and that's kind of an ongoing progress, just like an Avaya case, right, and we work with Avaya for some time. And then now we have something to share and we shared, damaging [Phonetic] that mode with Amazon, we are working with them. When we have something worthwhile to share in terms of real progress and milestone, we'll certainly bring it up. But as of now, they are one of the top three partners we are working with. Cisco and Avaya being the other two.

Alex Narum -- Needham & Company -- Analyst

Okay, great. And then, could you give us an update on the investment in the mid-market? And how you're building out the sales organization and when we'll be able to see some of that revenue contribution from that?

Ashutosh Roy -- Chairman and Chief Executive Officer

So, good question. So the mid-market is already starting to contribute on the booking side. And what we are really working now is how do we systematically scale that sales and the customer acquisition engine. My expectation -- as a team, our expectation is that, in fiscal '21, we should be able to show real sort of attributable evidence to the kind of impact that we can have on the new logo acquisition. I think from a total booking standpoint, they'll obviously make a difference. But the real interesting bet to me is going to be the increase in new logo acquisition. So, yeah, that's something we would look forward to sharing at that time.

Alex Narum -- Needham & Company -- Analyst

Okay, great. Thank you.

Operator

All right, gentlemen, there are no further questions in the queue at this time.

Ashutosh Roy -- Chairman and Chief Executive Officer

Okay. Thanks, everybody.

Operator

[Operator Closing Remarks]

Duration: 36 minutes

Call participants:

Jim Byers -- Investor Relations

Ashutosh Roy -- Chairman and Chief Executive Officer

Eric Smit -- Chief Financial Officer

Chad Schoening -- Oppenheimer & Co. Inc. -- Analyst

Mark Schappel -- The Benchmark Company -- Analyst

Richard Baldry -- ROTH Capital Partners -- Analyst

Rudy Kessinger -- Craig-Hallum Capital Group -- Analyst

Alex Narum -- Needham & Company -- Analyst

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