LPSN - Earnings call transcript Q1 2019

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Operator

Good afternoon, ladies and gentlemen. Thank you for standing by. Welcome to LivePerson's First Quarter 2019 Results Conference Call. My name is Deidre and I will be your conference call operator today. [Operator Instructions] As a reminder, this conference call is being recorded. to Company's conference Relations. Vice like Matthew over now the Kempler, President would turn call the to I of Investor go ahead, Please sir.

Matthew Kempler

Deirdre. much, very Thanks

and we and forward-looking reports non-GAAP discuss with obligation in from time-to-time assume XX-Qs call, SEC. financial risks Joining the statements will Please in future this note and supplemental LivePerson's during Robert and statements to today's highlights our With Chris of I press on any website. expectations financial assumptions me about to are include current differ will subject non-GAAP press A update of today call today slides, call the this due the in which file measures results. release predictions, will XX-Ks, the of including to that our and during make press projections Actual GAAP release. we forward-looking other statements various Greiner, Officer. Both CEO; and LivePerson's today's are Rob. on included are we We LoCascio, Financial Investor are Relations to no reconciliation and available Chief that, based call, the call this section in materially uncertainties. certain as and made is which may today's the These results factors, measures. of Founder is during Also release, other statements. comments over to turn conference quarter, those earnings earnings described or in

Robert LoCascio

for is fueled of customers Trailing evident and by metrics. first quarter, most being XX% on measures again with joining trend LivePerson's in revenue new in and growth. than record growth. fourth increasing year-over-year set large enterprise QX target the XXX% going we generated Matt. than greater mid-market enterprise earnings is XX% to quarter. marks strategy, per and for retention existing wider raised brands. the target ARPU our in and revenue the retention In XXX% combination for executed The XXX% XXXX growth range XXXX. and revenue This average the to Thanks, our and XX% first in $XXX,XXX. once We Thank and greater in customers the profit call. higher a of adding deeper XX-month XXXX, the quarter first met LivePerson This year-over-year quarter, From consecutive meeting guidance mid-market you with to a

Investor financial competitive discuss for Day Next we Wednesday model. York long-term will vision in City, an differentiation our and LivePerson's technology, our commerce, will where host New conversational

of company, indicator quarter, on teens first both a into how As capacity the the particularly is today's digital a the conversational I'll in two development the commerce, this go-to-market new our progressing we XX% focused on with signings a logos our into enterprises become part about major align years businesses. our quarter, in hiring fourth XXXX. change keep this Strong as comments and has increased called We good in of business now and to at least leading portion on the it demand specifically to standard After increasing industry the of clear result, overall the XX% growth revenue contract we that the the future of high shift. on see of how new their think can with pipelines. of portion plan This by overall resources. engineering major we focused accelerate spent QX a with a is are

three in Australia. the LivePerson five telco three position and manufacturer companies and top a telco tax in technology, cable reasons power wins is a we a the computer some to first our the is a the Working of software three top the in of market. this five share commerce of of why the accounting of company top a conversational in top storage a Some top believe one largest with up-sells quarter capture U.S., in Japan, large three Canada, a in U.S., five a telco airline of top pole world include provider and and top

Let me customers. hold. attending This history, start to signing few from with just wins a And on This phone days. continue our airline now than Clearly, a vertical, programs. travel signing powerful will Customer powered incredible January In call proposal payback a these customer we is marketing we these a from the airline rather conversation XXX closing was months top of five one in after committed opportunities signed to another a one highlight Delta. the XX U.S. Dallas. waiting fastest new enterprise reduce launch X-year in messaging it solution, the messaging center seven to instantly our ability see voice the need in to of satisfaction. the to on customer by improving annual contract, by call while kind, deflection giving a with Summit to figure than consumers motivated costs our They less

commerce. and commerce. ARPU highlight double were than conversational they our enterprise to Australia I'll this chat quarter Australia. to a This of that gratifying few to the similar seven-figure than new Kudos years the conversational another deal like business. the They of team a customer a them the during in win enterprise businesses of nothing win. communicate is is with X,XXX significant, now the this but one, the was in no moving There's win-backs, customer this who back, our fourth that Having with of the left and because with five on validation messaging companies also it future consumer launching key us one comeback, present. of our once more to a new U.S. for be X-year matured strategic the top leading for they potential, are chat customer's how will returned is yet commerce sole more as shift part one messaging Another vision when a means contract as other of point the represents a win us. after cable as mainstream. in technology about a revenue in the the with with because customer a win which go wireless how was in pivot into not our were just major telcos is there is launching a this in with the launch numbers thinking can a conversational This impact for marks strategy the core

one brands we to that marketing. strengths cases is like use and sales care expand myriad into a are the LiveEngage One and Maven new can of for the of beyond AI many support beginning is And of this that just engine of our areas businesses.

to message marketing with to on from our With at pace these others, go-to-market wins, in enter a the quarter, sales of percentage up expanding programs. velocity record accelerate XX% the far demand of capacity We've enterprise first a a the been in and many hiring by and plan so we year increasing XXXX ago. XX% customers increased our rising, XXXX. With breadth

of increase sales June. on carrier by capacity. We and are target This to channel end in track reps adding than approximate represents – XX of more reps XX% partners development an total the quota our meet sales our

full more airline revenue a with have scale. as and fourth from expect to proven of earlier. meaningful we quarter new by and the of marketing the to to they quarter productivity be win the of in hires contribution an for the also mentioned contribution third start as modest see enterprise, LivePerson's guided, XXXX previously a As XXXX, accelerant programs growth illustrated

at record events these a powering are We in pace XXXX.

Berlin, conferences, had pipeline, quarter, key we summits, brands participating as and influence significant we alone in Federation the impact at Southwest. of XXX opportunity. ability industry trajectory World Contact these one met South and and large one by Center our Congress such which overall on approximately total, events, First hosted In Dallas scope to leading and with National our Week, Retail Mobile two in

fact, six summit seven of first top brands the In with in prior customer the months. in ten quarter deals we signed attended the that our were

These first increasing number Seattle we in learning, key capacity. and and capacity are quarter, complementing investments bringing the a further our our added and fuel Technology extend which commerce to the AI We our returns conversational our product data by engineering our map, of at engineers competitive team this programs XXX. In lead. customers, will Center, serve on platform are for adoption, a for marketing our as of automation the size Advanced people high sales delivering road our science over machine catalyst

we moat data leads to Maven the me this introduced one these Conversational We engine machine our are humans leverages platform of bought long that specifically of legacy and fourth flows. millions and in both for a solution the AI when and algorithms by we flaws knew that technologies quarter solve groundbreaking combines create We of designed commerce, awaited. industry powerful the and and Now have providing our products Builder. AI a conversational hundreds dialog superior learning building conversation for to

pipeline, hold, early, We largest have bots. already new customers, general had we mature manage win and of of of saw seeing development Conversation to in the every Builder. bot enough. AI The approached quarter strategy, the and back with Maven Fortune built a AI-based a by a with seeing we large put automation saw company, already went substantial on Conversational and solutions. we trend industry a and added empowering a incredible didn't agents it deploy millions an these and marketplace. not In the in dozen replaced quarter contact one When they telco, us forward. the TAM. only availability we weeks, a first the hospitality points eager existing impact reinforce of mold but than cable world, company in couple market also they're to software day metrics developers, that the spoke Maven, growing but their see opportunities design enterprise build, major and XXX to of have broke regarding to banks for European demand in and dollars they we train, including global the the first of tied company data Builder you I into a was matter center more are move an years the Leading solutions what they because a The are new

leading new a by and of the meet record towards turn pace, fourth or revenue for groundbreaking holding sales and accelerate events, XX% we share to groundwork investment product marketing capitalize the record In discussed plan, first position our we earnings As we that are order accelerating this hiring in and at of executing a we sales, to on market. capture of and started dynamic In exceed introducing XXXX the our development XXXX. products. XX% our have of capacity pipeline quarter, laid conversions a number large on quarter last on pace which call, generate in

of conversational Our hope dive one economy in we this companies that incredible will continue and us seize I to who a to call is to now this be do foundation new overall largest the will Chris? opportunity. hand over outlook. deeper to the position our financial the technology on Chris, will build

Chris Greiner

a tailwinds included Rob. clear growing solutions. of with launching and multiple activities share launches, a of plan areas, capture to generated on Thanks, quarter multi-billion and number new we Conversational a pipeline capacity. robust blocks technical to dollar of and Several and a millions in addressable Maven new very brought first sales product, entered tied live set ramping a key of well. dollars opportunities that and executed We gaining these market. traction In product these XXXX plan of marketing building we In of of up Builder each investment total customers

pipeline from hiring a outstanding did growth heard to of during and the And marketing recruiting XX% number as This which opportunities events with remember, front, meeting is prospects. to an quarter, you scale processes. a first the last that than rate are the our of greater in perspective, summits, than nearly customer for laying we onboarding year. record convert our from job quarter a fuel On from more we Rob, XXX the progression. XX% groundwork period hosted and same customers wins up and the the And

through entire quarter. lens candidate company, over company XX experienced in processed the impressive You screening the the in the the for of our view can of in demand applicants We resulting best in of the career days X,XXX year. funnel first that this opportunities our

are than X,XXX added onboarded the marketing managers we times we faster velocity. told, As us capacity a well position market we're quarter XXX areas interviews and and majority allowing of in that talent, which pipeline investments hiring onboard over new employees our internal The quarter employees. and over in processes, we leading accelerating could support this and and development of seeing all All influx one more XXXX. than product these of in AI sales, conducted were automated carriers, ago to engineers. our we two I'll quota elaborate. did extending now indications To first generators already result, just sales

You'll half of function to Their method we sales efficient recall measurable. and American establishing North testing SDR enterprise leads qualify development in for the XXXX, been early scalable market. – sales feed more second the sales impact or create began a by representative has and a

First, converting. these a deals we resources continuation to by second XXXX, heavy quarter-over-quarter, half XX% which are more increasing contributors saw those the SDR sales pipeline, throughout and our is trend of of now were the than

year-over-year is signings, count recognition by the by team contract in and we commerce brand two leveraging enterprise now during to is American adding In helping our quarter, nearly SDRs deal to dedicated teams new This as to of the propel a And which are new to fact, customer initiated during mid-market by XXX% in terms grew customers. also cover as in our the signings, value LivePerson's largest team. including target and EMEA, first planned, SDR leader of base resulted as cover for XX% APAC leads quarter. well. investment This and from qualified of over wins, increasing customer XX% and our North enterprise in extending first annual nearly conversational

to contract the channel, mid-market, partner also enterprise, continue SMB. quarter, approximately XX% ramp in in We across our which of influenced signings first up

indication summits transformation proposal partners reduce enterprise commerce training the XX at conversational attribute cycle. programs new enrolling by our Two the our we're at And LivePerson enterprise our workshops. We less our formed and took light relationships to quarter and our sales these model strengthening Institute. effectiveness recently exciting, to of the program, brought client our now is are starting most deals than from of and We first customer investment in to to days signing. this in sales

at the XX% quarter the expectations. of perspective, mid-teens revenue growth, marking prior a as the against growth and XX%. a in pace, broader and at the first in for comparison. fourth acceleration the year-over-year international first of for quarter, delivered U.S. our XX% our generated consumer continued quarter and breakdown from accounted BXB Looking grew of of From steep our revenue year growth accounted expected, with the XX% results, And financial segments sales right both geographic XX% line

pace. Our industry in quarter, as at followed financial at revenue, XX%, auto by revenue. at of and XX% consumer at follows. continued telcos lead growth at a of and other was Telco was services than the at X%, XX%, increasing industries to largest vertical XX% first financial XX% growth at hi-tech services quarter in faster XX%, The retail the

to the adjusted adjusted within first in were loss Finally, and in profit year-over-year, for first of a communicated of quarter, previously our by $X.XX, million, to terms share revenue deferred XX% all half influenced of $X.X the our net million, $XX.X quarter-over-quarter $X.X plan increased investments. sheet, loss million. EBITDA GAAP per XX% of ranges, loss and operating guidance balance issued record With respect

reaffirming capped first our and separately in LivePerson $XXX.X issue we price for XXXX, XXXX. conversion adjusted net our to $XXX.X date. call We flexibility also to closing premium with cash outlook, to million, placement $XX million the notes convertible debt, revenue successful strengthened X.XX% $XX.XX XXX% full senior increased million of materially price including the year of of million by and quarter, to million, is $XXX negotiated $XX the Cash financial million. on effective a EBITDA the in guidance million notes, Transitioning of due hand year-over-year. the $XXX shares $X convertible on of or increased on The private are following the transactions

the our quarter execution the investments. reflects in plan, strong ramping outlook first metrics support of to Our confidence and our that underlying

towards the as then our XXXX added begin for by products in and scale. a and revenue programs, of fourth the growth quarter XXXX, reminder, a marketing As growth calls ramp half new of guidance sales capacity first mid-teens to XX%

in-year of investments of renewed year. we of designed opportunity for Our Because double-digit leverage and adjusted first the in to loaded EBITDA continue maximize margin the in XXXX anticipate this, losses half are a with the half second to productivity. the XXXX and front-end

and details refer to assumptions. guidance can year our full You and our additional on release XQ

up wrap take close we points I to As your want questions, to that summarize with overarching emphasize few and a call. our

is executing systems drive extremely robust strong we're leveraging First, our we're management the data-driven company Alignment well plans. across quarterly weekly, daily, monthly to on performance. and and

in as growing. Second, is leader commerce our position market a conversational

verticals. continues and end, the XX% to York allowing renewed the in operator unlocking With XX% that deliver customer to take is and We week. the win industry fourth to May To And looking leverage. back growth differentiation us hand to high full join platforms you Investor vision, long-range XXXX us also the of platform, for next to well momentum model. hope Day bring and experiences rapidly third, visibility financial at XXXX into growth forward to customers of I'll new to our quarter position additional new questions. with year can City least our teens your our on Deidre? to that, call Our us by X operating

Operator

And comes Oppenheimer. first Koji from with Ikeda question [Operator your Instructions]

Koji Ikeda

Hi, my questions, thanks for a quarter taking nice guys.

Chris Greiner

Thanks.

Koji Ikeda

any Maybe marketing mean of half. infrastructure there? spending target year XXXX maybe high Thanks. the or we of Chris, spend how the in yet. headcount that the next or I the level, sort said, commentary, expect or events. Rob that in about we like achieving really profile? a margin from of about should Question here you're hey, think, to how you linearity know guiding in double-digit think as patterns target for we And that terms I do about Chris do not the sustainability second EBITDA But We margin target. margin seasonal

Chris Greiner

for be and save dedicated time go. it maybe XXXX your linearity to question, rest X. I'll it. some signaling I crumbs see of XXXX will where the cadence the and to But May could more the let is for the bread of walk There think we through think or to me what beyond I – some

in our lot the of hiring those quarter, summits, you will in continue marketing what second half. successful saw our a and First, first the

during hiring starting in numbers Our first March. the really scale quarter to in

that see combination full for the we'll first flow-through hires the spending front-end the you're quarterly programs the benefits first. the by fall into were then in flow that quarter of design, marketing half. of a than second half and So From as really we'll full payroll marketing second there, impact off we'll a bit a will if loading step-down, the step-down March, second in that a as well then driven effect half summits taxes. the a see from quarter, in our by of not the same, second those seeing in will in to hold That's and year, the done we payroll the the did of more

Koji Ikeda

it. where of point one XXX% clarification be net XXX%. on – here, revenue wanted guys range I of that gave the just it just I to revenue the bottom? near taking that or was did or here range the fell was Got know it my it of Thank And that in at that questions. for right clear I you for Thanks the that. quarter, to the you rate, higher right middle at end in first was hear retention

Chris Greiner

in range. Right the

Solidly in the range.

Operator

Lenschow question next Barclays. your comes And with from Raimo

Mohit Gogia

year. as guess Gogia first Mohit to My can for Again, A taking Rob. for it's I Raimo. in my guys. well. nice is start chime question question the Chris Hi, for Thanks on

terms are customers towards move the was of trend I great also landing growth see, like as like so which both sounds I we'll So marquee and cycles shortening, to key a sales in is prospects. guess, – performance accelerating you

Chris. shortening were rest the question wondering things if Thank terms Then worked do Just sales how I will for cycles, you. you some to have and you well a that discuss the for the of year? can trend what follow-up as of expect that really in the of

Robert LoCascio

Yes.

about yes, into we Group so Hunter lot of now that had logo in, I company we on large ago, mentioned remember two a we're as logos, quarters – and So, new group added list. the new you adding

two there that where there's that things certain it. think I now One we enterprises is a driving have maturity are is XXX over are live.

events, almost to there's or verticals, that are of when one those accelerates usually of showing two those the main so and every having that in And successes, successes our we do one customers then that. customer, kind of potential

to take You're something to be and first not that going the do risk.

in more the this we can going – to be get You're scale. implemented in

is in total reinvest the thing other are that program. starting take what we where we gain share The to call we

to – But and work the on the and So the let's those we'll contact those scale be own we take that customers going with partners. challenges we versus and center, we because whole they're of we're they to working take agents the don't operational take agents we own some the our have work office transformation moving call their Obviously, to we'll the including able with and not we're may back seems things and agent partners. solution, labor within agents. payroll, it, also, with the

that we new me, have biz now, was some one related these this to airline model share telco, So the model. especially, things shorter excuse that the what sales cycles. an with drove The gain are

Mohit Gogia

for follow-up Chris. a Understood,

growth. of in Just terms deferred revenue

growth, in the you that deferred look last from as That's year, growth somewhat mentioned accelerating should you. but comps half of or we year, of what guys. you expect forward? I the towards acknowledge me Thank going XX% in back So, sort all wondering growth linearity trend that, tough from revenue like

Chris Greiner

that And XXXX. the in deal company large comps. recognized we you advance; top We in the three-year very glad I'm wins had fourth had exciting really a quarter that certainly paid comp. the drives – that, on a of just a Yes, of some multi-year

issues general, are overall But growth should we should than terms it some keep full choose you when should grow around pay. margin, company's growth, deferred revenue the think company. the the faster especially how It In rate, in about There if up, to ramp. customers outpace around of as not

Operator

Your next ISI. Peter with comes question from Evercore Levine

Peter Levine

for of Thank on a you and year. the congrats taking and questions my Rob Chris good start

you about So I that on guys looking think the reps newer And sales quarter, which in for talked terms Board. this first is, productivity is you good of mentioned question coming great. obviously, bookings

kind how remind of sales then us talk dividing productivity think how how on track and about about and plan? if territories folks just you of you're So made with up sort the newer or or these you comp these you maybe newer reps you can allocating coming any changes to

Robert LoCascio

territory On America, obviously so business North all the is side, have there's APAC. territory they're base, we three and lines, main geographical – some which EMEA,

some South the the lot a QX them we will we There hiring hitting going, look When we impact board, productivity, numbers. still in it's pipeline. in productivity. future. today the That's America, in we with their at them get of partners, do productivity why wanted is serve look we full so months everyone about of direct six get now, primarily the but their have to at to train demand on and them that get at the

as a rep. close investments because pipeline capacity them, quite to deals is for capacity SDR more and has ramp or We the those to those well just six-month so a which reason about work to group, making a these the but we're it's is doing growing. So been at about – full get quarter that someone close up need is

Peter Levine

center, my today, of service, sold sales traditional customer we these Thanks. last where support think if question and seeing you're is, into directly here contact about you I departments technologies. are right, the now organizations, guess deploying where kind marketing you where

motion right? So audience now I XX mean, organization, budget So, guess of I more after. I past go over curious have has to see a a an broader you the sales like assume changed have months? within you to the

within So are comes into sale or a you selling an from are turn if seeing you more larger a the organization, organization, to CFO down directly it it CEO, you into the meaning level? go department transformational

Robert LoCascio

enterprise, aligned business it's we I always on large I always to say, the would conversational – a Yes, mean, transformation.

as work And into like got conversational we'll and airline be live then to walk through, an do conversations agents So, airline. that. of automate deal, have we a you how then you've part

enterprises a most the we we're a we greater then reason to to be a So only vision. large it's could internal it reason, likely in, table – very I beachheading a groups will bring marketing think to you reason, sales if the care. But align see,

deal we how so beachhead sign these sort that's big and do a we're that of to still we North And Star have transformation We of we a landing when the why organization, go deals. with into is still the that's we great live full And voice old care. really XXX beyond because many calls. In and number. cases doing that experiences can agents care the consumer of show place productivity overall great

major that's think of the I So focus business. still the

craft we your that messaging order though, cool, I the working got really up these stadiums beverage with now U.S. and that [indiscernible]. go casual what's pick to casual think is quick really the the like all can at deal and through happening Aramark at order start. rollout and quick didn't of ordering Like, then our deals, on where restaurants, food to We've restaurant. in you

cases are coming that as of now used cold in becomes everyone's and bots of conversational commerce lot a there's sort these up mind. So

first these large weren't focused two think with we ago of I the there's when other LiveEngage. all as is launch now there deals So these doing the transformation we started on – verticals and years interesting that

Peter Levine

thank taking my you for Great questions.

Operator

Jefferies. Your from Samad with next question Samana comes

Samad Samana

afternoon. Hi you my couple. a good questions, for Thank taking

much ARPU larger attribute First, of customers and channels. to how would larger using impressive curious trend it on you customers enterprise the versus customers signing Rob, there, I'm more growth,

So maybe like a follow-up then same-store one sales And just growth number. question.

Chris Greiner

take this the a back the onion really both new are It's bigger. kind Investor really – that But and X. ahead neat deals logos getting on at peel our May go one. and I'll way think on new Chris it's Day Hey, of the in we'll I

customer in up my the new of was prepared those XXX% greater. lot, greater I only and XX%, value deal than customers count the up a As was mentioned not new remarks, but annual contract

go extending to you continuing existing then getting customers up for our are existing new the by and that time, ability have. customers we're and spigot, opening already same our we wider at then, and So will, the the to if endpoints bigger deeper with hone endpoints

Samad Samana

that as That's helpful. group about in you come what are opportunity what generally, be about left – may curious customers and think the those can a replacing, but back have as I'm them And – we about just just transition, out, is. we're you a that they you think think the is bring of guess, their called big what customers coming during not big back, what as of back then that maybe customers with handful you I people curious? and terms, the ARPU that that

Robert LoCascio

we've I get if the is the said, of this we things also transition, but a smaller ones, chat look like when awesome us back, to It's handful left win. big it, provider. when They got four and and them you pure like we some is chat for but I Yes, large some lost a and mean very we ones. a There we that. – telcos time enterprise, through want to wrap banks went

stopped the all in we platform. going developing chat our through LiveEngage we As were products, on on the transition, bet we

replacing chat them it's are But years said up. think back go don't around. people ago, and cool two now So basically what our be to I [ph], platform we I really caught should we

we I way think it's to aligned a new There's it. consumer proving behavior with do are obviously, things, messaging synchronous. and to

actually same us, with – the mouth, – leaves it's to So us, a like your saying, cool. pretty our is cancel and coming and buying taste on This back whatever transform business. they're will that they people this as in into nothing are

it's voice in businesses past we some how chat these commerce of great a think technology the enable a future. messaging and for of sort great and how So to view business conversational they're and do that I will just and marker the transformation

Samad Samana

Great, helpful next to That’s thanks. looking really forward and seeing you week.

Robert LoCascio

see week, yes. you Yes next

Operator

Your next Ryan with question comes from Needham. MacDonald

Ryan MacDonald

and AI can impact Can in afternoon good XX%, that then, on initial towards role it a now And Rob AI Conversational Conversational Chris. you're looking ARPU the that and you've track towards just guess, Maven about what had have talk your road and Maven that towards like solutions have bit, as this Builder out, traction for Yes available. expectations? at two, map one, starting what it's does re-acceleration nice growth? the some Builder, you I seems generally and

Robert LoCascio

usually our close volume show of half total is So there that’s today XX% or today looks of is our slide – I'm it, presenting, and which I when XX% volume at messaging a to it automated.

many automation cases that some in provider. So come would other technology with

you and So of us is at waited, the big we just bad Builder good, that with and Conversational would automation of we're Maven a some sort and the out in at technologies ahead work. as work there there. work to look it's it and looked that what large agents, at could some built always like front we and the saw the we ugly went obviously, getting them, this which of partners that We of got to focused didn't looked and us. as potential who and – AI and volume. when strategic I – is the lose just be We threat, we think live of amount, But then

So I XX% XX% get very Ultimately, stabilize. I very, automated will conversations think of will and believe important. it's

agents is but manage, they working have – thousands can size and just our It on and of AI very in, a Maven bots. conversations agent can the up will that this – now conversation, Maven deal, about can The want unique deploying very Every most The an is I Obviously, technologists, about consumer a they this too, scale of these us as but cost that good is automation think build, hints. the is perspective, deals. contact I work one strength. them platform gives we're we – the guides within automate. and creating create really sits interesting product, for also guys deploy, Maven allows from tell it's but what actually it with you the agents build a you important is and do, drive and the is help because Builder, a LiveEngage conversation Maven the power automation. the the to Conversational you that always part makes how enterprises it So can saving there center

live a really and agents API, it the chat product – And to the so deploying crafting catalog, use should and bots. AI a with intent, the this that's and messages product a an with live to use – with efficient catalog, building helps that's also more that's be wants – you and

Ryan MacDonald

it. generally shortening accelerator a sounds customers Got to results full see Can continuing sort strong rates sort and you're It out follow-up. the scale about hosting sales quick guess of, converting cycles, of implementations? I you're sales qualitatively, And you mix talk these shortening that conversion between both sort of is, packs what that you're or like cycles. the and Thanks. summits as of terms in and of

Chris Greine

that and the we open are You had we're and we sales year bigger closed the become quickly and them to thought know, learn allow do. us volumes taken was quarter would, and ago, although a the conversational have and of very we sales you they mature intent positive of A, the pack basically had in, accelerator otherwise finding on the our longer-term kind power over make arguably in and our SDR we for became B, commitments. come would the as on came cycle some this benefit, us teams you Many sales test year and to we're to accelerate solution not accelerating opportunity material has than began interesting it's create doors door It's our as pack. it as customers accelerator scale, the that and cycle, through. would up opened more expected the that willing see it's the on quickly longer while accelerator interesting. opening finding commerce and the it our But architects longer-term an is doors. then thesis And to launched What actually the A when mainstream, as impact really deals. showed deals, when it came as more it deals but last does more that just have

Ryan MacDonald

much. very you thank Great,

Operator

from Zukin question next Aleksandr Your comes with Piper Jaffray.

Aleksandr Zukin

Hey or curious maybe you the or driving think, strategic follow-up terms the to I two just there a stood of quarter that and and guys you different for providers. thanks if called channels Chris. providers for successes taking in last out was interactions, one, channels, my customers quick one, any I out bringing by Rob, I've messaging the first questions. was really either or got

Robert LoCascio

right driving up now what's outside so the a is U.S. Yes, lot of volume, mostly

if the it's of on like so, people look device. their XX% you – is, at reason have And WhatsApp Germany,

out Chat, IVR tremendous so on volume of we went other WhatsApp. of and telco the a Business to the live has over went moved on WhatsApp have then originally them And amount Business they a there, they out then start German we Chat SMS, went we Apple that of dominated Apple And WhatsApp. have they and channels.

going well. because here. quite that's is then going Chat not that, Business So Facebook behind is And Apple well quite encrypted. it's

for hard that to on be the large it's So encryption. platform without enterprises data

how that's finished integration, So out. WeChat. of and just we We've kind it's line got playing also

already but And we so I first our we'll within – WeChat. be taking the of couple weeks just last took think we one live, finished

LiveEngage. live take some in with Asia to So over on enterprises WeChat starting we're

Aleksandr Zukin

top – the It year? anything there or that it take perspective we discussed trends quarter. or is are constrained I Chris, the sounds doing was from really accelerating timing into there guidance a a Just in should helpful be constrained – just would raising a for rate retention you've from XX% the that account given the like on anything look the the from that growth pipeline keep or there anything maybe you full in some positive or XX% for are call, FX? transition pipelines anything your of customer perspective, – of either at growth they quarter just performance, Perfect. when a like But last on stepping that strong. sounds were guidance of back second, the bookings really it, outperforming

Chris Greiner

multiply Yes, – it level be That's that were that of an can't as to you during mean a expected if made you metrics the it, sat was maintain second quarter impressed the first but that what once with no. also fact throughout employees when quarter, quite you're to and see time we quarter conducting what that sales literally. and our interviews you, necessary legitimate quarter, AI, entering them. them that street plan times decision, would if for would then applicants the into live, that Susan X,XXX I all we're a and job in X,XXX went Joe, be onboarding off was – consumer look had any really all and was who a time the the ramp, plus now had goes and that and equally at and we a it with team, hiring X,XXX this And for confidence. visibility that that took the and for first we part seat hire would to of good underlying was level Seattle was you're you from the training the we of scrupulous the of engineering of hiring just according that that starting kind support quarters or in role, over hiring and want was a you the that we're my year I very of commitment there of us volume that we anything like. tell

into was and building have built a us, onboarding. begun to muscles was time the it that us necessary it's it for but So consumer, to laid year, for very have that those of assumptions impressed our groundwork,

well Second Bob every the training and incorporating quarter Live rolled at quarter. we're creating it weeks. of is sales We training spend up, what AI house. heavy market. two want from the holding all I our engineers out specked us it done our into on experts reps, our up the with be Person G&A time have even curriculum at folks presents hires, a we the sales be on going to a around job, stood a from them, differentiates to Institute up them side We new them, on has well present to our the a in conversational and newest phenomenal team company program, who over everybody commerce, some specked to

we of we in wouldn't that say our talked I about with line – expected. what So there's were anything all right metrics

Aleksandr Zukin

follow-up, that guided quick as of margin that a the remind can the year? the from seasonality you that some you've as revenue of both maybe gross in improvement the in perspective, visibility half the us of just back just for then And the well half the acceleration for you a Perfect. drivers, year, second give of

Chris Greiner

gross start me margin. let with so Sure, the

we're margin, the XX%, quarter for quarter the the investing in first seeing the and XX% of expecting So the is, reason on why gross revenue, second in technical range resources. in cost that you're again

brands experience onboard those are and near that charged once the was great. sure you making delivery do we instant that you So resources that how that make are,

that's more half the technical to So scales revenue our in the surrounding second as that the begin but industry of skills, not skills will scale with investment an the increasingly just customers, year.

markets momentum lift and drive will is what we're that would we range. that's productivity driven the of that's margins, really no you'd fourth real – but there say wouldn't seasonality XX% not be the full building, that So Yes, in the something that's comes mean gross in with the net, that seasonality continue share we'll what sales build is with expect There in gain to material. to the second bookings quarter, is in I reps. half consumer that said year I by our of the seasonality the our there's it year revenue, some on of the

Aleksandr Zukin

guys. you thank Perfect,

Chris Greiner

Al. Thanks

Operator

Jeff Van from comes question next with Rhee Your Craig-Hallum.

Jeff Van Rhee

on sort to that's of returns taking next take satisfaction apples how for quarters with several the overwhelmed and sales guys. can you about apples investment. to deal, maxed kind have trended the– I driving of from seeing me. and the rep, know talk questions of of that big to thanks counts had go I they this step. my and timing from deal it per wave want to respect capacity obviously With you're driving the the last an couple your A of to sign out, Great, the folks timeline? After that, the level live sort signed, in that when

Robert LoCascio

you're Jeff, to employee the customers' asking clear, on or the to ramp time? be just time

Jeff Van Rhee

On sign. customer customer's so the – on time no, the

sales until how get to lines expected live? a overwhelmed, to customers, and sense concern get the I how just know underlying is sign, that's by from how time is they get changed? able because with they there trying the has up So of that implementation long I'm trending, keep essentially the

Robert LoCascio

it's sign Yes, I about area obviously talking to eight live, kickoff am to today. about about – you've large, I'll think if I pretty go got meetings the put commercial much that can enterprises, large quicker. eight-week it weeks. go But an about in

Jeff Van Rhee

steady? that's And been

Robert LoCascio

steady. the like We got we pretty of of Apple by building it's It's got internal now, it's The AI, resources. the been the integrating it's of the AI, mostly end their It's because implementation to driven much training Yes, these Chat all may app. front easier pieces an be those reps, and into easier. still it. Business stuff, the

Jeff Van Rhee

Yes.

and just I On there is an the the commented more were focus you've that update expected of and for give you us there. a to you've Can appropriate that? quarters of on know that side, you see going BXB recent lot to reasons product that, in the acceleration about now and SMB side

Robert LoCascio

Yes, so be. exactly getting product it I say, too, the want It's there in XXX% to not is line. where definitely would we

lot on well. doing or a very, well, We focus have of very that does. group like excitingly it They're

live go a it. But on businesses on of really, color really of they're and is lot quite capacity doing that in lot of messaging want because and their just doing a a there's tremendous to give amount small platforms. get don't these well, we bookings well So added there, we've mid-market, and

that to we a doing a really impactful were a they're we could new focused and can for start the many It's accelerated And about turnaround, years, place They the started impactful and because taken year on in it ago, it really the to didn't a be with year. on So we enterprise. throughout leader invest he group where it growth. has to be it well.

Chris Greiner

business small confident are we XXXX. Jeff, Yes, that will mid-market, this grow in

Robert LoCascio

it's grow. to Yes, going

Jeff Van Rhee

more little on POC packs. the it. accelerator last And got Yes, you a quarter then, commented detail

give still trajectory? ramp you a If had update is track, great, XX, to guess, that mentioned think stayed XXX ramp specific there? number XX, on any just deals. willing trajectory of I you're the I on that

Chris Greiner

as were the of internal the that speaking coded accelerator, Jeff triggers Yes, systems. the of as that And deal. of you're pipeline they're coded our in that when accelerator. size number was that opportunities an an One, two of the trajectory

call size it deal. So then duration in XXXK of the the to XXXK and

cycles deal and this lower What like. at nine a traditional three sales interestingly more is in – to a in there size responded the I months. those in to now look up what during not finding convert So are tactics though, half. that the found prone value, staying just question to – earlier, to but sales are We them There they're loaded process we and we've cut pipeline of would or the other go a shortening new that is willingness it able continuing a us concept that we're very go impactful them. large is demoing go left one doors using is to But isn't once this in sales now ROIs, with that we're a to we're compelling finding to But very bigger. cycles, that sizing enterprises in point. be and opening – price but with we're a there of the are we accelerator either to to are

Jeff Van Rhee

me, mix in on viewed could cases. specifically pipeline, from then back the there, last And to of if circle the just deals you from Okay. use pipe,

of the increases channels sort talk changing. in to the And use versus meaningful kind other the what's you and So IVR are cases seeing of in-app and call deflection so channels? versus just

Robert LoCascio

we'll deflect live that driver our of one number part It's any now. deflect the messaging. to still platform to IVR channel Yes, and is the

can deflect WhatsApp, Facebook, get SMS. So that then the phone and a number we can we

So problem the our that's strategically where we'll that care in, chatting it's and use be driver. is calls of still still still are all the cases because biggest The still those focus.

sales through focus in. rid we always calls. interesting one the there's of They verticals dining marketing are as and stuff mentioned didn't casual once getting driver kind is I then deals. before, we very they're Although, to really messaging, interesting that again, quick and – coming of coming align are the number voice up, is like that and still interesting on, voice but But those folks,

Jeff Van Rhee

think displaced existing solutions one AI. you three It's I If or this did early. couple, two a AI displace? in you mentioned, one Maven there, interesting in displacement deals, I could What hear to quick you of last sneak said

Robert LoCascio

You mean the actual won't vendors – are ours they partners I of too.

Jeff Van Rhee

Okay, leave there. it That's fine.

Robert LoCascio

problem is, So these to think using of them are And there digital say then thing they'll a is the you they being be of very because I'm let's set now that together not solutions, a usually get interesting you is AI, are that particular number can. as had put they them they now routed saw use. done have appropriately. they quick they're they deploy and happens, I'll there. sometimes they was, is front deployed the a no group and onto a bots found live an the make What are they havoc, I thinking what one one else one They happening a are deployed, wreak agent. are live the the not technology is, don't and hard times, they – that a are or I a – in technology not resources. lot leave of we years what's implements group – and they engineer, failing A of But of what then routed bot. improving it we've enough, as so lot a two APIs you agent because way APIs and And because

projects. working So XX are on these valuable engineering resources

to the back contact of a and the from then it agents kind center come month they'll suffer So and suffers.

and contact get the move allows of confidence has now control the we So that a of and bot. then the very over the them the agents in can experience, to we'd idea XXs a high move full to center aside, And end-to-end quickly. completion rate

start very four weeks into the high will the but agents. we quickly get XXs, We using within in like the 'XXs

folks that on are get not it. improving technical who You focused with won't

– winning now. doing So that's the what's that's the solution right winning

Chris Greiner

in four was Jeff, telco from that just banking software hospitality. to it to enterprise grade ranging displaced we there to those were industries wins, wins and

Robert LoCascio

the we But people them And platform. as implement we Yes and will that’s can. are open we an support helpful. do the to we'll Thanks Jeff. them, still experience consumer best want technologies, because we want other

Chris Greiner

Jeff. Thanks

Jeff Van Rhee

you. Thank

Operator

question next Cummings comes from B. Zach Riley. Your with

Zach Cummings

Thanks afternoon. Hi, my good question. for taking

you you've these map coming you any quarters, that center. give your within technology up couple us into the then after Thanks. ramping going long-term technology AI your insight be saw out to platforms? were is hiring new So additional any Can here into, and hiring in rolled insight road Seattle of there

Robert LoCascio

from brought Amazon, then lot CTO, people of the he region. people our who running in was Alex and Alexa, Yes, from Spinelli company came he in that a Seattle other

really Now, a globalized focus of which also was he operations, ours.

we but Germany today York operations Austin, and Texas. So got Seattle, and Atlanta, City we've had Mannheim, now originally only in New in Israel, Israel, really into

So he that. quickly driven operations globalized and is all analysis

So we'll has Seattle those continue to and Data Data Group. hire of in areas. group, specifically in That our like all Head Science Science

they very on area. So focused are that

So in out that's people of the where we engineers. hundred couple total like machine a area data learning have XXX science

Chris Greiner

got June. got still go second to done the quarter, we'll more Zach, – in We've by we've be but materially And it's Chris. hiring

Zach Cummings

the substantial And Understood, cash tuck-in a final considering balance be then that's M&A, sheet additional are technology more something it open all from more in more or whether scale? you on acquisition question of to the helpful. now, with me,

Robert LoCascio

help the opportunity. thought looking raised this vision can be to the now. we to But going and right are opportunity. it's a come that in we and our Yes, strategy. is us I be we accelerate what because a up things anything future, there saying imminent big capital, very mean, have out don't huge We There will

So felt there we sheet, probably future. we on because opportunity it did like put there's the in out the balance

Zach Cummings

Well, my thanks look week. taking Understood. And next to seeing for forward questions. everyone

Robert LoCascio

Thanks Zach.

Operator

question Benchmark. Mark next with Schappel comes from Your

Mark Schappel

growing rapidly, force the company go questions I wondering detail that been Nice have to just of the Chris Most manage And respect wished quarter. a I what my doing could growth. if bit say prior And I to organizationally here of evening. about sales one question. your good to so on that. little the question. have job is Hi, but a question and sales answered, force just was with do on building into one you

Chris Greiner

up for been We've Yes, compliment. thanks for the this. gearing

plan So team dates investment around and with and the that year of board. we last in our to the management it strategizing back place with put our June

making, An other many cost. to first even sure an recruiting interesting CapEx quarter quarter, the of see to process investments office space, there is we reduced the agencies benefits than obviously making and than capability. fourth in we've of the building that a by out been internal XX%. from we've So by as mundane piece that our And need our way to from is books you'll fact, our for which more that onboarding got

build… You

Robert LoCascio

agency. Recruiting

Chris Greiner

to Recruiting There's a priorities initiatives, those different every the the aligned around the benefits not employee with a agency, down sales engineer, to set priorities rep. just to but yes – the deal in we company. done thank you. of to to company company align great many near-term that, but All long-term to priorities, for have the are the of attorney,

time I all So and fit this process. And sure they our and is be combination the them of do programs company. that making on around they part speaks in focused to possible. contribute, of been infrastructure productive have half. that as what in is, them we've where as have across in the the that as mentioned, to we're now we're place putting And what cut successful to to on-boarding get know how training able that they you they exactly that And

Mark Schappel

Okay great. helpful. Thank you. That’s

Operator

– question comes Latimore your and last last question Mike your And Northland. from with

Vijay Devar

hi. Mike is Latimore. Devar Vijay This Yes, for

question over trending deals been or your wins, how trending? you terms on rates, and but has it of whom positive comments do there answered. seen large helpful? on most should in wins, win comment questions any a think pretty You've Is rates be really been one generally could your some win encounter I you any rates? have of good your my have I win

Chris Greiner

that the in rate first. really and in a quarter had nice we the Yes, win fourth persisted

on a high what percentage the was that basis, rate So persisted, win was so watermark good.

company, we're In terms displacing the vendors. open all mentioned. mixed it to prospects, competition, They way be an sales leads not creating by created event, I a to have the these the we're of do our proactively with going cycles, voice that the SDR across continues need, are really in creating teams

front. has competitive the material you. on nothing Thank So changed

Vijay Devar

you. Thank

Operator

I for will now turn over the closing call Mr. LoCascio Rob to remarks.

Robert LoCascio

Thank you, operator.

to by end velocity commerce to by at a on least One is, XXXX, with plan XXXX on we a plan. and I'll the in go-to-market emphasizing capitalize industry products. And So XX% call that to our mainstream by points. into accelerate conversational the few key entered growth investing new we shifted and we're executing

product this dollar substanding LivePerson even around our opportunity. competitive share multi-billion moat, an Our initiatives emerging bots of take to greater AI positioning and market

good go and areas. job in investments product and of so focused And lines, market things resources those we're really think technology ending technology, it’s doing those adding company, beginning and the a and I our together, a to

face opportunity to and So one some next they've and holding the coming present, have leadership five do presentations May some one New had. successes week, first are if customers presentations, Investor X also the and York face see of you'll that to product we on on you and in think in we'll with to like you'll meet have – obviously I Day an team our we're years many to City –

it you can X you're Matt him yet, and interested to up with reach just pissed get night, brand, Kempler within at you me. call done wife and to keep at o'clock his at signing off don't and it at him XXX-XXX-XXXX, if text Kempler LivePerson coming, So out you in haven't can will

you. you continue see week. appreciate next Thank all support with to and that execute your guys I So we'll and

Chris Greiner

Thank you.

End of Q&A

Thank conference your This participation, you you Operator does now disconnect. call. may conclude for today's

LivePerson (LPSN) 3 May 192019 Q1 Earnings call transcript