E2open Parent Holdings, Inc. is a leading provider of cloud-based, end-to-end supply chain management solutions. With its comprehensive software platform and extensive multi-enterprise network, the company has established itself as a dominant force in the increasingly complex and volatile global supply chain landscape.
Company Background
E2open Parent Holdings, Inc. was originally formed as CC Neuberger Principal Holdings I (CCNB1), a blank check company, in January 2020. CCNB1 completed its initial public offering in April 2020. On February 4, 2021, CCNB1 completed a business combination with E2open Holdings, LLC and its operating subsidiaries, with CCNB1 changing its name to E2open Parent Holdings, Inc. and becoming the parent company of the combined entity.
E2open was founded in 2000 as a pioneer in the use of cloud-based, multi-enterprise supply chain software. Over the years, the company grew through a series of acquisitions, expanding its capabilities in areas like global trade management, transportation management, and omni-channel fulfillment. In the early years, E2open experienced strong growth as it established itself as a leader in cloud-based supply chain management solutions. However, the company faced challenges in recent years as it integrated the various acquisitions and worked to streamline its operations. This led to a slowdown in growth and some operational missteps.
Product Offerings
E2open's software suite spans critical areas such as channel management, planning, global trade, logistics, and supply management. By integrating these functionalities into a cohesive, cloud-native platform, the company enables its clients to achieve unprecedented visibility, agility, and efficiency across their supply chains. This holistic approach has become increasingly valuable as global supply networks have grown more complex, with disruptions from geopolitical tensions, trade policies, and natural disasters becoming more frequent.
Business Overview
E2open is a world-class connected supply chain software platform that enables the largest companies to transform the way they make, move and sell goods and services. With the broadest cloud-native global platform purpose-built for modern supply chains, E2open connects manufacturing, logistics, channel and distributing partners as one multi-enterprise network. The company's software as a service (SaaS) platform anticipates disruptions and opportunities to help companies improve efficiency, reduce waste and operate sustainably.
Product Segments
E2open operates through two main product segments: Subscriptions and Professional Services.
The Subscriptions segment represents the majority of E2open's revenue, accounting for 87% of total revenue in the third quarter of fiscal 2025 and 85% in the prior year period. This segment includes E2open's cloud-based supply chain management software solutions that are sold on a subscription basis. These solutions enable the largest companies to transform the way they make, move, and sell goods and services by connecting their manufacturing, logistics, channel, and distribution partners.
The Professional Services segment generated the remaining 13% of total revenue in the third quarter of fiscal 2025 and 15% in the prior year period. This segment includes revenue from professional services, consulting, and other implementation and support activities related to E2open's software solutions. The professional services team assists clients with deploying and integrating E2open's software into their existing systems and workflows.
Financials
Financially, E2open has demonstrated resilience in the face of challenges. In its fiscal year 2024, the company reported revenue of $634.55 million, a 3.3% year-over-year increase, despite broader macroeconomic headwinds. Gross profit margins remained healthy at 50.1%, while the company generated $84.87 million in operating cash flow and $55.62 million in free cash flow.
However, the company's path has not been without obstacles. In fiscal 2023 and 2024, E2open faced significant goodwill and intangible asset impairment charges totaling $1.13 billion, driven by declines in its share price and market capitalization. This led to net losses of $1.07 billion and $648.70 million, respectively, for those fiscal years.
In the third quarter of fiscal 2025, E2open reported total revenue of $151.66 million, a 4% decrease compared to $157.50 million in the prior year period. This decline was driven by a 1% decrease in Subscriptions revenue to $132.00 million and a 20% decrease in Professional Services and other revenue to $19.66 million. The company's gross margin was 50% in the third quarter of fiscal 2025, flat compared to the prior year period. Non-GAAP gross margin, which excludes depreciation, amortization, and other non-cash items, was 69% in the third quarter of fiscal 2025 compared to 70% in the prior year.
E2open reported an operating loss of $374.77 million in the third quarter of fiscal 2025, which included a $369.10 million goodwill impairment charge and a $10.00 million intangible asset impairment charge. These impairment charges were driven by a significant decline in the company's stock price and market capitalization. Adjusted EBITDA, which excludes the impact of these and other non-recurring items, was $53.58 million, or 35% of revenue, in the third quarter of fiscal 2025 compared to $55.36 million, or 35%, in the prior year period.
Performance by Geographic Markets
Revenue from the Americas region, which includes the United States, was $130.12 million in Q3 FY 2025, representing 85% of total revenue. Revenue from Europe was $16.61 million and revenue from Asia Pacific was $4.93 million.
Liquidity
As of the most recent quarter, E2open had $151.21 million in cash and cash equivalents and $155.00 million of available borrowing capacity under its $155 million revolving credit facility. The company's debt-to-equity ratio was 0.98, while its current ratio and quick ratio both stood at 1.08. E2open believes its existing cash, cash flows from operations, and borrowing capacity will be sufficient to meet its working capital, debt, and capital expenditure requirements for at least the next twelve months.
Strategic Initiatives
E2open has remained steadfast in its commitment to innovation and client success. In fiscal 2025, the company is focused on stabilizing its subscription revenue growth and improving client retention, which had weakened in recent years. To this end, E2open has strengthened its executive team, appointing industry veteran Pawan Joshi as Chief Strategy Officer and welcoming Rachit Lohani as Chief Product and Technology Officer.
Joshi, who has been with E2open since 2003, will work closely with CEO Andrew Appel to shape the company's strategic direction and deepen its engagement with its largest, most complex clients. Lohani, meanwhile, will oversee a unified organization encompassing product management, engineering, and SaaS infrastructure, with the goal of accelerating E2open's pace of innovation.
Market Opportunity
These leadership changes, combined with E2open's ongoing focus on enhancing its technology offerings, suggest the company is well-positioned to capitalize on the significant opportunities in the supply chain software market. Industry analysts forecast this market to grow at a compound annual rate of 11.2% between 2023 and 2028, driven by the increasing need for visibility, automation, and resilience in global supply chains.
E2open's unique position as a provider of an integrated, multi-enterprise platform has become a key competitive advantage. Its ability to connect manufacturers, logistics providers, and distribution partners into a single, data-rich network enables clients to optimize decisions, improve delivery performance, and mitigate disruptions more effectively.
Technological Advancements
Moreover, the company's strategic investments in emerging technologies, such as generative AI, are poised to further enhance the capabilities of its applications. By embedding AI-powered functionality into areas like logistics tendering and global trade compliance, E2open aims to deliver even greater value to its customers.
Industry Trends
The supply chain software industry has seen strong secular growth driven by factors such as increasing supply chain complexity, ERP cloud migrations, and vendor consolidation. The total addressable market for E2open's solutions remains large with significant whitespace within their current client base.
Guidance and Outlook
For Q4 2025, E2open expects subscription revenue in the range of $131 to $134 million, representing a decline of 2.5% to 0.3% year-over-year. For the full fiscal year 2025, the company anticipates subscription revenue to be in the range of $526 to $529 million, representing a year-over-year growth rate of -2.0% to -1.5%. Total revenue for FY2025 is expected to be within the range of $607 to $611 million, representing a year-over-year growth rate of -4.3% to -3.7%.
E2open expects FY2025 gross profit margin to be within the range of 68% to 70%, with adjusted EBITDA finishing near the low end of the original guidance range of $215 to $225 million, representing an adjusted EBITDA margin of approximately 35%. The company also anticipates generating strong positive adjusted operating cash flow in FY2025, with second-half cash flow significantly higher than the first half. Year-end FY2025 net leverage is expected to be around 4.1 times.
Investment Outlook
Despite the challenges faced in recent years, E2open remains a compelling investment opportunity. The company's market-leading position, diversified client base, and focus on innovation and operational excellence position it well to navigate the increasingly complex global supply chain landscape. As the world's businesses continue to grapple with supply chain disruptions, E2open's solutions will likely remain in high demand, driving sustainable growth and value creation for shareholders in the years ahead.