ETWO E2open Parent Holdings Inc

Delaware

001-39272

86-1874570

(State or other jurisdiction of incorporation)

(Commission File Number)

(IRS Employer Identification No.)

14135 Midway Road, Suite G300

Addison, TX

(address of principal executive offices)

75001

(zip code)

866-432-6736

(Registrant’s telephone number, including area code)

☐

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐

Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐

Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐

Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Title of each class

Trading Symbol(s)

Name of each exchange on which registered

Class A Common Stock, par value $0.0001 per share

ETWO

New York Stock Exchange

Warrants to purchase one share of Class A Common Stock

ETWO-WT

New York Stock Exchange

Exhibit

Number

Description

99.1*

—

Press release, dated January 10, 2025

104

—

Cover Page Interactive Data File (formatted in Inline XBRL)

E2open Parent Holdings, Inc.

Date: January 10, 2024

By:

/s/ Susan E. Bennett

Susan E. Bennett

Chief Legal Officer and Secretary

Three Months Ended November 30,

(In thousands, except per share amounts)

2024

2023

Revenue

Subscriptions

 $ 132,000

 $ 132,800

Professional services and other

                19,655

                24,697

Total revenue

             151,655

             157,497

Cost of Revenue

Subscriptions

                35,640

                36,689

Professional services and other

                16,546

                17,642

Amortization of acquired intangible assets

                23,727

                24,590

Total cost of revenue

                75,913

                78,921

Gross Profit

                75,742

                78,576

Operating Expenses

Research and development

                23,259

                24,937

Sales and marketing

                21,529

                22,583

General and administrative

                20,831

                24,739

Acquisition-related expenses

                     187

                          9

Amortization of acquired intangible assets

                  5,611

                20,014

Goodwill impairment

             369,100

             687,700

Intangible asset impairment

                10,000

                30,000

Total operating expenses

             450,517

             809,982

Loss from operations

           (374,775)

           (731,406)

Other income (expense)

Interest and other expense, net

              (25,423)

              (24,643)

Gain from change in tax receivable agreement liability

                  2,530

                  2,888

Gain from change in fair value of warrant liability

                  4,893

                  2,617

Gain from change in fair value of contingent consideration

                  8,700

                  5,100

Total other expense

                (9,300)

              (14,038)

Loss before income tax provision

           (384,075)

           (745,444)

Income tax benefit

                  2,431

                  5,413

Net loss

           (381,644)

           (740,031)

Less: Net loss attributable to noncontrolling interest

              (34,734)

              (72,475)

Net loss attributable to E2open Parent Holdings, Inc.

 $ (346,910)

 $ (667,556)

Weighted-average common shares outstanding:

Basic

             308,904

             303,848

Diluted

             308,904

             303,848

Net loss attributable to E2open Parent Holdings, Inc. common
    shareholders per share:

Basic

 $ (1.12)

 $ (2.20)

Diluted

 $ (1.12)

 $ (2.20)

(In thousands)

November 30, 2024

February 29, 2024

Assets

Cash and cash equivalents

 $ 151,213

 $ 134,478

Restricted cash

                    17,221

                    14,560

Accounts receivable, net

                   133,960

                   161,556

Prepaid expenses and other current assets

                    31,159

                    28,843

Total current assets

                   333,553

                   339,437

Goodwill

                1,467,584

                1,843,477

Intangible assets, net

                   711,569

                   841,031

Property and equipment, net

                    63,045

                    67,177

Operating lease right-of-use assets

                    16,627

                    21,299

Other noncurrent assets

                    29,766

                    29,234

Total assets

 $ 2,622,144

 $ 3,141,655

Liabilities, Redeemable Share-Based Awards and Stockholders' Equity

Accounts payable and accrued liabilities

 $ 77,129

 $ 90,594

Channel client deposits payable

                    17,221

                    14,560

Deferred revenue

                   187,526

                   213,138

Current portion of notes payable

                    11,288

                    11,272

Current portion of operating lease obligations

                      6,597

                      7,378

Current portion of financing lease obligations

                      2,207

                      1,448

Income taxes payable

                      7,360

                         584

Total current liabilities

                   309,328

                   338,974

Long-term deferred revenue

                      2,581

                      2,077

Operating lease obligations

                    12,335

                    17,372

Financing lease obligations

                      3,643

                      3,626

Notes payable

                1,032,770

                1,037,623

Tax receivable agreement liability

                    60,627

                    67,927

Warrant liability

                      1,660

                    14,713

Contingent consideration

                      9,568

                    18,028

Deferred taxes

                    41,999

                    55,586

Other noncurrent liabilities

                      1,035

                         602

Total liabilities

                1,475,546

                1,556,528

Commitments and Contingencies

Redeemable share-based awards

                      2,481

                          —

Stockholders' Equity

Class A common stock

                          31

                          31

Class V common stock

                          —

                          —

Series B-1 common stock

                          —

                          —

Series B-2 common stock

                          —

                          —

Additional paid-in capital

                3,433,910

                3,407,694

Accumulated other comprehensive loss

                   (54,523)

                   (46,835)

Accumulated deficit

               (2,289,338)

               (1,873,703)

Treasury stock, at cost

                     (2,473)

                     (2,473)

Total E2open Parent Holdings, Inc. equity

                1,087,607

                1,484,714

Noncontrolling interest

                    56,510

                   100,413

Total stockholders' equity

                1,144,117

                1,585,127

Total liabilities, redeemable share-based awards and stockholders' equity

 $ 2,622,144

 $ 3,141,655

Nine Months Ended November 30,

(In thousands)

2024

2023

Cash flows from operating activities

Net loss

 $ (457,285)

 $ (1,139,544)

Adjustments to reconcile net loss to net cash from operating activities:

Depreciation and amortization

                   144,896

                   160,758

Amortization of deferred commissions

                      6,921

                      4,452

Provision for credit losses

                      2,087

                      2,657

Amortization of debt issuance costs

                      3,961

                      3,961

Amortization of operating lease right-of-use assets

                      4,932

                      5,454

Share-based compensation

                     35,124

                     18,728

Deferred income taxes

                   (13,060)

                   (79,791)

Right-of-use assets impairment charge

                         576

                         619

Goodwill impairment charge

                   369,100

                1,097,741

Indefinite-lived intangible asset impairment charge

                     10,000

                     34,000

Gain from change in tax receivable agreement liability

                     (1,464)

                     (8,355)

Gain from change in fair value of warrant liability

                   (13,053)

                   (18,786)

Gain from change in fair value of contingent consideration

                     (8,460)

                   (15,360)

Gain on operating lease termination

                        (126)

                        (187)

Loss (gain) on disposal of property and equipment

                         135

                         (16)

Changes in operating assets and liabilities:

Accounts receivable

                     25,509

                     44,822

Prepaid expenses and other current assets

                     (4,482)

                     (3,972)

Other noncurrent assets

                     (7,453)

                     (7,351)

Accounts payable and accrued liabilities

                   (23,676)

                   (16,712)

Channel client deposits payable

                      2,661

                      8,349

Deferred revenue

                   (25,108)

                   (27,244)

Changes in other liabilities

                     (5,588)

                     (7,568)

Net cash provided by operating activities

                     46,147

                     56,655

Cash flows from investing activities

Capital expenditures

                   (18,465)

                   (22,301)

Net cash used in investing activities

                   (18,465)

                   (22,301)

Cash flows from financing activities

Repayments of indebtedness

                     (8,427)

                     (8,366)

Repayments of financing lease obligations

                     (1,370)

                     (2,432)

Proceeds from exercise of stock options

                         155

                           —

Net cash used in financing activities

                     (9,642)

                   (10,798)

Effect of exchange rate changes on cash and cash equivalents

                      1,356

                      2,040

Net increase in cash, cash equivalents and restricted cash

                     19,396

                     25,596

Cash, cash equivalents and restricted cash at beginning of period

                   149,038

                   104,342

Cash, cash equivalents and restricted cash at end of period

 $ 168,434

 $ 129,938

Fiscal Third Quarter 2025

(in millions)

Q3

Q3

$ Var

% Var

 FY2025

 FY2024

PRO FORMA REVENUE RECONCILIATION

Total GAAP Revenue

151.7

157.5

(5.8)

(3.7%)

Constant currency FX impact (1)

(0.6)

-

(0.6)

n/m

Total non-GAAP revenue (constant currency basis) (2)

$151.0

$157.5

($6.5)

(4.1%)

GAAP Subscription Revenue

132.0

132.8

(0.8)

(0.6%)

Constant currency FX impact (1)

(0.6)

-

(0.6)

n/m

Non-GAAP subscription revenue (constant currency basis) (2)

$131.4

$132.8

($1.4)

(1.0%)

GAAP Professional Services and other revenue

19.7

24.7

(5.0)

(20.4%)

Constant currency FX impact (1)

(0.1)

-

(0.1)

n/m

Non-GAAP professional services and other revenue (constant currency basis) (2)

$19.6

$24.7

($5.1)

(20.6%)

PRO FORMA GROSS PROFIT RECONCILIATION

GAAP Gross profit

75.7

78.6

(2.8)

(3.6%)

Depreciation and amortization

27.0

28.7

(1.7)

(5.8%)

Share-based compensation (3)

1.5

1.3

0.2

14.5%

Non-recurring/non-operating costs (4)

0.0

1.1

(1.1)

(96.4%)

Non-GAAP gross profit

$104.3

$109.7

($5.4)

(4.9%)

Non-GAAP Gross Margin %

68.8%

69.6%

Constant currency FX impact (1)

(0.2)

-

(0.2)

n/m

Total non-GAAP gross profit (constant currency basis) (2)

$104.1

$109.7

($5.6)

(5.1%)

Non-GAAP Gross Margin % (constant currency basis) (2)

68.9%

69.6%

PRO FORMA ADJUSTED EBITDA RECONCILIATION

Net income (loss)

(381.6)

(740.0)

358.4

n/m

Interest expense, net

23.4

24.9

(1.5)

(6.2%)

Income tax benefit

(2.4)

(5.4)

3.0

(55.1%)

Depreciation and amortization

37.8

53.6

(15.8)

(29.4%)

EBITDA

($322.8)

($666.9)

$344.1

n/m

Share-based compensation (3)

10.4

6.8

3.6

52.2%

Non-recurring/non-operating costs (4)

2.8

8.3

(5.4)

(65.7%)

Acquisition-related adjustments (5)

0.2

0.0

0.2

n/m

Change in tax receivable agreement liability (6)

(2.5)

(2.9)

0.4

(12.5%)

Change in fair value of warrant liability (7)

(4.9)

(2.6)

(2.3)

86.6%

Change in fair value of contingent consideration (8)

(8.7)

(5.1)

(3.6)

70.6%

Goodwill impairment (9)

369.1

687.7

(318.6)

(46.3%)

Right-of-use assets & Intangible impairment charge (10)

10.0

30.1

(20.1)

(66.8%)

Adjusted EBITDA

$53.6

$55.4

($1.8)

(3.2%)

Adjusted EBITDA Margin %

35.3%

35.1%

Constant currency FX impact (1)

0.2

-

0.2

n/m

Total adjusted EBITDA (constant currency basis) (2)

$53.8

$55.4

($1.6)

(2.9%)

Adjusted EBITDA Margin % (constant currency basis) (2)

35.6%

35.1%

(1) Constant Currency refers to pro-forma amounts excluding the impact of translating foreign currencies into U.S. dollars. To calculate foreign currency translation on a constant currency basis, operating results for the current year period for entities reporting in currencies other than the U.S. dollar are translated into U.S. dollars at the exchange rates in effect during the comparable period of the prior year (rather than the actual exchange rates in effect during the current year period).

(2) Constant Currency refers to pro forma amounts excluding translation and transactional impacts from foreign currency exchange rates.

(3) Reflects non-cash, long-term share-based compensation expense.

(4) Primarily includes non-recurring expenses such as the non-acquisition severance related to cost reduction initiatives, reorganizations and executive transition costs; foreign currency transaction gains and losses; systems integrations; legal entity rationalization and non-recurring consulting and advisory fees.

(5) Primarily includes advisory, consulting, accounting and legal expenses incurred in connection with the strategic review.

(6) Represents the fair value adjustment at each balance sheet date for the Tax Receivable Agreement along with the associated interest.

(7) Represents the fair value adjustment at each balance sheet date of the warrant liability related to our warrants.

(8) Represents the fair value adjustment at each balance sheet date of the contingent consideration liability related to the restricted B-2 common stock and Series 2 RCUs.

(9) Represents the goodwill impairment taken in the third quarters of fiscal 2024 and 2025.

(10) The company recognized an intangible impairment charge of $10.0M in Q3 FY25 and $30.0M in Q3 FY24, and a right-of-use asset impairment charge of $0.1M in G&A in Q3 FY24

Fiscal Third Quarter 2025

(in millions)

GAAP

Non-recurring(1)

Depreciation & Amortization

Share-Based Compensation

Non-GAAP (Adjusted)

% of Revenue

Impairment
Charges(2)

COST OF GOODS

Subscriptions

35.6

-

-

(3.1)

(0.9)

31.6

23.9%

Professional services and other

16.6

-

-

(0.2)

(0.6)

15.8

80.1%

Amortization of intangibles

23.7

-

-

(23.7)

-

-

Total cost of revenue

$75.9

($0.1)

-

(27.0)

(1.5)

$47.3

31.2%

Gross Profit

$75.7

$0.1

-

$27.0

$1.5

$104.3

68.8%

OPERATING COSTS

Research & development

23.3

(0.2)

-

(4.8)

(1.1)

17.1

11.3%

Sales & marketing

21.5

-

-

(0.2)

(1.7)

19.6

12.9%

General & administrative

20.8

(0.5)

-

(0.2)

(6.1)

14.1

9.3%

Acquisition related expenses

0.2

(0.2)

-

-

-

 -

Amortization of intangibles

5.6

-

-

(5.6)

-

-

Intangible impairment charge

10.0

-

(10.0)

-

-

-

Goodwill impairment

369.1

-

(369.1)

-

-

 -

Total operating expenses

$450.5

($1.0)

($379.1)

($10.8)

($8.9)

$50.8

33.5%

(1) Primarily includes other non-recurring expenses such as non-acquisition related severance, systems integrations, legal entity rationalization, and non-recurring consulting and advisory fees.

(2) Represents the goodwill impairment and intangible impairment taken in the third quarter of fiscal 2025.

Fiscal Third Quarter 2025

(in millions, except per share amounts)

Q3 25

GAAP Net income (loss)

(381.6)

Interest expense, net

23.4

Income taxes benefit

(2.4)

Depreciation & amortization

37.8

EBITDA

($322.8)

Share-based compensation

10.4

Non-recurring/non-operating costs

2.8

Acquisition-related adjustments

0.2

Change in tax receivable agreement liability

(2.5)

Change in fair value of warrant liability

(4.9)

Change in fair value of contingent consideration

(8.7)

Goodwill impairment

369.1

Intangible asset impairment charge

10.0

Adjusted EBITDA

$53.6

Depreciation

(8.5)

Interest and other expense, net

(23.4)

Normalized income taxes (1)

(5.2)

Adjusted Net Income

$16.5

Adjusted basic shares outstanding

345.9

Adjusted earnings per share

0.05

(1) Income taxes calculated using 24% effective rate.

Fiscal Third Quarter 2025

(in millions)

Q1 25

Q2 25

Q3 25

Q3 YTD

GAAP operating cash flow

35.9

(7.5)

17.7

46.1

Add: Non-recurring cash payments (1)

4.3

2.9

4.0

11.2

Add: Change in channel client deposits payable (2)

(1.2)

(0.9)

(0.6)

(2.7)

Adjusted operating cash flow

$39.1

($5.5)

$21.1

$54.7

Capital expenditures

(6.1)

(6.2)

(6.2)

(18.5)

Adjusted free cash flow

$33.0

($11.6)

$14.9

$36.2

(1)  Primarily includes other non-recurring expenses such as non-acquisition related severance, systems integrations, legal entity rationalization, and non-recurring consulting and advisory fees.

(2)   Channel Client Deposits Payable represents client deposits for the incentive payment program associated with the Company's channel shaping application. The Company offers services to administer incentive payments to partners on behalf of the Company’s clients. The Company’s clients deposit these funds into a restricted cash account with an offset included as a liability in incentive program payable in the Consolidated Balance Sheets.

Fiscal Third Quarter 2025

Description

Shares (000's)

Notes

Shares outstanding as of November 30, 2024

309,173

Shares outstanding

Common Units

30,692

Units issued in the Business Combination that have not been converted from common units to Class A common stock (Common units are represented by Class V shares).

Series B-2 Shares (unvested)

3,372

Represents the right to acquire shares of Class A common stock when the 20-day VWAP reaches $15.00 per share.

Restricted Common Units Series 2 (unvested)

2,628

Represents the right in E2open Holdings, LLC that converts into common units when the 20-day VWAP reaches $15.00. Upon conversion to common units, the holders can elect to convert the common units to Class A common stock.

Adjusted Basic Shares

345,865

Warrants

29,080

Outstanding warrants with an exercise price of $11.50.

Options (vested/unreleased and unvested)

6,151

Options issued to management under the long-term incentive plan.

Restricted Shares (vested/unreleased and unvested)

15,937

Restricted shares issued to employees, management and directors under the long-term incentive plan.

Fully Converted Shares

397,033