Good day, ladies and gentlemen, and welcome to the eGain second quarter fiscal 2012 financial results conference call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session and instructions will be given at that time. (Operator instructions). I would now like to turn the call over to Charles Messman of BMKR Group.

Good afternoon, ladies and gentlemen, and thank you for joining us today for eGain’s conference call to discuss results for the fiscal 2012 second quarter ended December 31, 2011. Please note, this call is being recorded and will be available to replay form the Investor Relations section of our website at www.egain.com for seven days following this call. Before I begin, I’d like to remind all listeners that all statements in this release and call that involve eGain’s forecasts including, above-stated guidance, beliefs, projections, expectations, including but not limited to our financial performance and guidance, the anticipated growth of our business, market trends, plans to invest in our business and expectations regarding the market acceptance of our products are forward-looking statements within the meaning of the Safe Harbor Provision of the Private Security Litigation Reform Act of 1995. These forward-looking statements, which are based on information available to eGain at the time of this release and call are not guarantees of future results. Rather, they are subject to risk and uncertainties that may cause actual results to differ materially from those set forth from this release and call. These risks include, but are not limited to, the uncertainty and demand for eGain’s products including our guidance regarding bookings and revenue, our expectations related to our operations, our ability to invest resources to improve our products and continue to innovate, our partnerships, our future markets and other risk-related details from time to time and engaged filings with the Securities and Exchange Commission including eGain’s annual report on Form 10-K, filed on September 27, 2011 and eGain’s quarterly reports on Form 10-Q. eGain assumes no obligation to update these forward-looking statements. With me today are Ashu Roy, Chairman and Chief Executive Officer and Eric Smit, CFO of eGain Communications. To begin management’s discussions, I’d now like to turn the call over to Ashu Roy. Ashu?

Thank you, Charles. Good afternoon, everyone. Thank you for joining us today. We are pleased with our new bookings this quarter, it’s up about 44% from the same quarter a year ago. Consistent with our fiscal 2012 booking growth plan, our pipeline is building nicely. As you may recall, we ramped up our sales and marketing investment in calendar 2011. Now we are starting to see some early benefit from it. We continue to systematically invest in our distribution capabilities to capitalize on the substantial market opportunity ahead, especially, in light of the recent market consolidation we all saw happen in late 2011. An exciting trend we are seeing is the increasing demand for enterprise customers for our hosted solutions compared to our on-premise solutions. As you know, we have always been economically indifferent to deployment options. This trend towards more hosting business, however, will depress revenue growth in the short term, even as it results in better and more predictable revenue growth in the medium term. I also want to update everyone on our new relationship with SAP that we signed in January of this year. We are excited about this partnership where we will enhance the SAP CRM application suite with eGain software for customer interaction and knowledge management. SAP and eGain share a vision of delivering radical improvement in business performance powered by software innovation. Our teams are now actively engaged on product integration and go-to market initiatives. We believe that our integrated solutions will redefine CRM in a multichannel world. While the relationship is new, we are optimistic about this potential and we look forward to providing updates in the coming quarters. I also want to point out that this is a revenue share partnership between eGain and SAP, so all the customers that we sign up through this sponsorship will be eGain customers. As we stated earlier in the year, a key growth initiative for the company is expanding our distribution capabilities. We see more partnership opportunities ahead in the coming fiscal year. Looking at market trends, I want to share a quote from a recently published Gartner’s 2012 CIO survey that validates our excitement around the growing imperative for multi-channeled customer experience solutions. Here I quote Dave Aaron, Vice President and Gartner’s Fellow from this Gartner’s report. “The 2012 Gartner CIO agenda survey results show that CIO believes that customer experience is the greatest opportunity for IT-enabled innovation. As business executives see the potential of technology to transform customer channels and the customer experience, their view of technology have leapfrogged conventional ideas of IT”. We could not say them better. Turning to products, we launched eGain 10 for Cisco Unified Compact Center Express, which targets a new market in the mid-market compact center space. The solution enhances Cisco’s Unified CCX with robust web customer service capabilities including applications to manage customer interactions through email, chat, click-to- call, agent knowledge and web-self-service, all seamless integrated with Cisco Unified CCX. We see growing demand for integrated multi-channel capability in the mid-size compact center space. One that is not being served well by existing vendors who mostly seem to have check-box capabilities for non-point channels. At the same time, initial deal visors tend to be small in the market and hence cost-effective market reach is a challenge. We believe that our strategy of aligning with strong resellers in the Cisco partner network will help us develop a cost-effective scalable channel to serve this market. We will keep you apprised of our progress in the coming quarters. But so far, we are pleased with the initial response we’re seeing. On the customer front, during the second quarter, we signed up multi-channel retailer, standardizing on the eGain platform to improve multi-channel customer experience. Over the next several years, they plan to tightly integrate eGain with their existing investment in SAP Business Suite and IBM Commerce to create a seamless experience across the lifecycle of customers. And we also signed up a U.S. subsidiary of a leading Japanese bank as a new client. They selected eGain Knowledge Solution to provide consistent, accurate customer service across their product line. This need for consistent accurate knowledge to improve customer service continues to grow as businesses look for efficiencies based on their agents servicing all inquiry types across multiple product lines in a compliance manner. Turing to existing plans, the Vodafone Group extended their eGain platform deployment into a new operating company, one of their largest in business size. We are pleased with increase adoption of our solution by this marquee plan of ours. Also a large U.S. based insurance company significantly increased their eGain investment to rapidly deliver a contemporary brand experience across customer touch points. To do so with speed and skill, they’ve opted to migrate from their existing on-premise eGain deployment to the eGain hosted option. Our proven ability to offer both on-premise and hosted models is important to such clients. Finally, Cannon USA went live on the eGain platform in record time, replacing legacy point application and migrating existing knowledge and process and designing new digital customer journeys. Cannon and eGain executives present this success story and share future plans at the Gartner 360 Summit in Orlando, Florida on March 14, 2012. Now, before I ask Eric Smit, or CFO, to discuss our financial performance of the quarter and fiscal year, I want to take a moment to congratulate the entire eGain team for their perseverance and performance that resulted in eGain’s return to NASDEQ in October last year. Our team, we all look forward to building shareholder value by better serving clients with innovative products, complimentary partnership and strong execution. On that note, Eric.

Thank you, Ashu. Before I walk you through our GAAP financial details, I want to provide you a quick overview of some of the other business metrics. New bookings, or new contractual commitments for new license and recurring bookings, and in the recurring bookings we include new hosting bookings and new support bookings. The other metric that I’ll be using is gross bookings and gross bookings are a combination of new bookings plus renewals from hosting and support customers as well as build professional services. We believe these are important metrics because in our primary target markets of large business-to-consumer organizations, we find that a number of them have not completely embraced the SaaS hosted option and therefore our hybrid model let’s them decide what deployment offer fits them best. As Ashu mentioned, we are seeing a trend towards more hosted business. In fiscal 2011, the license hosted splits were 76/24 and in the first six months, we saw that mix move to 62/38 license hosting respectively. And looking ahead, we expect the trend towards even more hosting deals in the second half of fiscal 2012. Based upon this trend, we now estimate that our bookings mix for fiscal 2012 will be approximately 45% license and 55% hosting. Now turning to our bookings for the quarter, new bookings for fiscal second quarter were 8.4 million, an increase of 24% from the comparable year ago quarter. New bookings for the six months ended December 31, 2011 were 13.6 million, a decrease of 10% from the same period last year. Note that the six-month comparison was adversely impacted by this very large license deal in the first quarter of fiscal 2011. Of the total new bookings in the fiscal second quarter, 46% were from new recurring bookings and 54% were from new license bookings. This is comparing to 48% from new recurring bookings at 52% from new license bookings in the comparable year-ago quarter. With the new license bookings up 4.6 million in the quarter, approximately 1.3 million was deferred and is expected to be recorded as revenue in the second half of fiscal 2012. Of the total new bookings for the six months ended December 31, 2011, 45% were from new recurring bookings and 55% were from new license hosted bookings compared to 52% from new recurring bookings and 68% from new license bookings in the same period last year. Gross bookings for the fiscal second quarter were 14.1 million, an increase of 24% from the comparable year-ago quarter. Gross bookings for the six months ended December 31, 2011 were 22.5 million, a decrease of 6% from the same period last year. Now, turning to our financial results, total revenue for the quarter was $10.8 million, an increase of 14% from the comparable year-ago quarter. Total revenue for the six months ended December 31, 2011 was $21.2 million, a decrease of 6% from the same period last year. License revenue for the quarter was $3 million, an increase of 13% from the comparable year-ago quarter, and license revenue represented 28% of total revenue for both quarters ended December 31, 2011 and 2010. License revenue for the six months ended December 31, 2011 was $5.9 million, a decrease of 41% from the same period last year. While the number of license transaction increased in the quarter, license revenue decreased due to large one-time license fee that we recorded in the first quarter of fiscal 2011. License revenue represented 28% and 44% of total revenue for the six months ended December 31, 2011 and 2010 respectively. Our recurring revenue for the quarter was $5.7 million, an increase of 9% from the comparable year-ago quarter. Looking at the recurring revenue in more detail, hosting revenue was up 4% and support revenue was up 14% from the comparable year-ago quarter. Recurring revenue represented 53% and 55% of total revenue for the quarter ended December 31, 2011 and 2010 respectively. Recurring revenue for the six months ended December 31, 2011 was $11.5 million, an increase of 19% from the same period last year. Our [inaudible] and support revenue was up 19% from the same period last year. And recurring revenue represented 54% and 43% of total revenue for the six months ended December 31, 2011 and 2010 respectively. Professional services revenue for the quarter was $2.1 million, a 53% increase from the comparable year-ago quarter. Professional services revenue represented 19% and 17% of total revenue for the quarter ended December 31, 2011 and 2010 respectively. Professional services revenue for the six months ended December 31, 2011 was $3.8 million, a 34% increase from the same period last year. Professional services revenue represented 18% and 13% of total revenue for the first six months ended December 31, 2011 and 2010 respectively. Looking at our gross margins and gross profits; gross profit for the quarter were $7.6 million, or gross margin of 70%, up from $6.7 million for a gross margin of 71% in the comparable year-ago quarter. If you look at the gross margin for each revenue type, recurring revenue gross margin improved to 77% from 75% in the comparable year-ago quarter. And the professional services margin improved to 6% from 5% in the comparable year-ago quarter. Gross profit for the six months ended December 31, 2011 was $15.2 million for a gross margin of 71%. This was down from $17.3 million or a gross margin of 77% for the same period last year. This decrease we due to the decrease in license revenues of percentage of total revenue. The recurring revenue gross margin for the six months ended December 31, 2011 improved to 78% from 74% in the same period last year. But first professional service gross margin for the six months ended December 31, 2011 improved to 8% from 5% in the same period last year. Now, turning to our operating costs, total operating costs and expenses for the quarter were $8.1 million or 75% of total revenue compared to $5 million or 53% of revenue in the comparable year-ago quarter. Most of this increase came from a planned increase investment in sales and marketing, but there were approximately $400,000 of one-time G&A expenses. Included in these expenses, there were certain legal costs related to a legal dispute that we’ve recently settled; the fees and expenses associated with the Form S3 filing that was completed in the quarter, and also the NASDAQ initial listing fee. Total operating costs and expenses for the six months ended December 31, 2011 were $14.7 million or 69% of total revenue compared to $10.8 million or 48% of revenue for the same period last year. Included in the total cost of expenses for stock-based compensation expense for the quarter was $135,000 compared to $50,000 in the comparable year-ago quarter. Stock-based compensation for the six months ended December 31, 2011 was $265,000, up from $104,000 in the same period last year. GAAP loss from operations for the quarter was $530,000 or a net operating loss of 5% compared to income from operations of $1.7 million or an operating margin of 17% in the comparable year-ago quarter. Income from operations for the six months ended December 31, 2011 was $460,000 or an operating margin of 2% down from 6.5 million or 29% for the same period last year. Net loss for the quarter was $842,000 or $0.03 per share compared to net income of $1 million or $0.05 per share on a basic and $0.04 per share on a diluted basis for the comparable year-ago quarter. Net loss for the six months ended December 31, 2011 was $268,000 for a loss of $0.01 per share compared to net income of $5.9 million, or $0.27 per share on a basic and $0.24 per share on a diluted basis for the same period last year. Turning to our balance sheet, and cash flows, total cash, cash from restricted cash were $12.5 million at the end of the quarter, up from $12.4 million at June 30, 2011. Cash provided by operations was $1.3 million for the first six months compared to $7.8 million in the comparable year-ago period. Total net to account receivable was $5.5 million at the end of the quarter, compared to $8.2 million at June 30, 2011. Day sales outstanding in receivables for the quarter was 46 days compared to 28 days in the comparable year-ago quarter. Net deferred revenue was$ 5.1 million at the end of the quarter compared to $5.8 million at June 30, 2011. Looking at our data operations, our bank debt was $4.2 million at the end of the quarter compared to$ 5 million at June 30, 2011. Related foreign debt was $5.3 million at the end of the quarter compared to $5 million at June 30, 2011. Now, turning to our guidance, as we stated in our press release, although we are reiterating our bookings guidance, which is a key metric for our business, for fiscal 2012, we continue to expect a year-over-year increase in new hosting and license bookings of between 40 and 50%. However, based on expected shift towards more hosting deals, we now estimate our booking mix for fiscal 2012 will be approximately 45% license and 55% hosting. So this our initial estimates of 65% license and 35% hosting. This mixed shift in bookings is expect to result in fiscal 2012 revenue growth in the range of 5 to 10%, a reduction, from our earlier guidance. This mixed shift will, however, also increase revenue and revenue growth in future fiscal years as these hosting bookings are recognized as revenues. This ends management’s presentation. We will now open up the call for questions. Operator, we will now turn back to you to open up the call for questions.

(Operator instructions). And it looks like we do have one question from Jon Hickman.

I was wondering, can you talk about the license sale that was deferred, the $1.3 million. Is that…

Sure. Again, there were actually two different transactions in this particular quarter where just from revenue recognition standpoint. In one instance there was just some paperwork that wasn’t completed by the end of the quarter and it was the second purchase order that we received in January, so we were expecting to recognize that portion in this quarter. The second transaction was a budgetary requirement where the customer was looking for extended payment terms for the second portion and so when we get that follow-on purchase order in the fourth quarter, we’ll be recognizing that portion. So we received the contractual commitment but there was still some of the payment obligations weren’t quite fixed yet.

And then can you - I missed your comments, Eric. Did you generate cash in the quarter?

We did not generate cash in the quarter. Again, on the year-to-date basis, we’ve generated 1.3 million. So the cash was down in the quarter, again, from the time difference standpoint primarily due to renewals for the maintenance and support and hosting contracts.

Could you talk about this look into the future of more hosting deals? This is quite a difference - I mean, it’s quite different from your earlier predictions of what the license versus hosting revenues would be. And do you see that like - is that going to be the future? Are we going to get to maybe 25% license and 75% hosted?

Good question, Jon. This is Ashu here. We have already said that we want to provide that choice to our customers and as we are watching the performance through the last two quarters, where we have seen a shift as we shared the data, and when we look at the pipeline, at least for the next six months, we see more hosting opportunities than license. But there’s also a level of, you know, choice that customers seem to like to have, especially in the larger enterprises, like there’s one account that we are working on in the pipeline where the customer just in the last two weeks or so has finally decided to go hosted for that. The whole decision and discussion process was around the license deployment, but when their IT organization looked at the timeframe that they needed to launch the initial implementation, they said, well, we cannot meet the timeline eGain can you help us? And so I think having that flexibility gives us a lot of - I would say an advantage in servicing these larger accounts. It’s hard for us to predict very confidentially. All we can say is what we see in the pipeline, but what we would like to do and make sure we do is keep you all apprised of any changes and anything that becomes more hosting oriented, obviously helps us in the future and so that’s something we just want to be transparent on.

At this time, I show no further questions. (Operator instructions). And there do appear to be no further questions. I would like to know turn the conference back over to you. Ladies and Gentlemen that does conclude the conference for today. Again, thank you for your participation. You may all disconnect. Have a good day.