LPSN - Earnings call transcript Q3 2020

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Operator

Good afternoon, ladies and gentlemen. Thank you for standing by. Welcome to LivePerson's Third Quarter 2020 Earnings Conference Call. My name is Gary, and I will be your conference operator today. [Operator Instructions].

conference recorded. this reminder, a is being As I to Mr. like to conference over turn the would now Matthew company's Kempler, Relations. Investor the Senior Vice of President Please go ahead, sir.

Matthew Kempler

Gary. much, very Thanks

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

Robert LoCascio

to many cash in again adjusted our million, revenue, the fueled business. XX% you delivered BXB-hosted in QX EBITDA setting records signs, year-over-year software third once of $XX by LivePerson climbing QX Call. key and Thank Earnings including LivePerson's In joining for positive XX% guidance, Revenue Matt. metrics, Thanks, peak growth outpaced generation. performance in contract quarter, XXXX

of $XX EBITDA as operational internal another Our million multiyear outpaced guidance step yielded XX%. of margin adjusted focus automation on wildly record function widely and a of and efficiency -- profit generated productivity employee high

increased Our million by pivoted $XXX cash million generation. cash to $XX to quarter-over-quarter we position as positive

on COVID have driving a remote of online and consumers shared massive app pandemic. wake digital service we've brick-and-mortar structural sharply to food Website in rather engagement recent as consumers the establishments. banks, traffic As retailers shift visit risen than telcos, go and are calls,

to X% powerful increase in improve increased rates their that online brands the traffic. dynamic. to conversion from leader to deploying and All automation sales customer of satisfaction, turning led instead human messaging and ability are and to Cloud consumer the Conversational journeys personalized AI agents. most monetize closing a actually Likewise, agent AI, website benefiting COVID. a numbers holiday hold face recent on XXX survey of LivePerson In calls and Brands in X do center that agents the of to contact frustratingly stores. than X% typical long to take digital demand. rather meet a out centers often increased struggling planning are who due fact, XXXX consumers endpoints. use mobile over means sufficiently order this reduced fuel X by conversational conversions work-from-home higher environment shopping found to most times in Consumers can capacity efficiency, of the brands are are online physical LivePerson, In their being global career our sales contact of to during market failing this

conversations. started our up the increase a As by served February, platform volumes led pandemic XX% AI-based in nearly since nearly in on seen a result, we've XX% now and

goal time. like live platforms run out either AI We that brands SMS. from e-commerce Facebook conversational care type commerce. a to web, technologies agent a shift focus on with other and Chat, beyond marketing shift the c-commerce tailwind e-commerce or digital into Apple payments in center of connection, sales, The to customer WhatsApp, over brand We with or of have the because we the e-commerce to messaging an contact bet ago, sales users better to of to this commerce traditional messaging use we're some a connection world. this as platform and with a consumer's now years next conveniently commerce can and strong cases journey always-on Business and and order to consumers, introducing with clearly only in-app brick-and-mortar the Messenger, took both enables we asynchronous use based change driving purchases reducing in the or traditional messaging powered that automated conversations, intensify Over X has massive drive ability the at Instagram largest retail rich new any make retail same which web are over to of be commerce by early arrived. also social transforming conversational requires with the c-commerce the goal any endpoint. expect delivered of or shopping, cost, set platforms. started The LivePerson expanding leader for In years And shifts commerce. we're in on X Conversational an is

that X For enters a it can at airline, credit different the reentering cards. used a without card across with debit example, some can a their we credit and and endpoints, consumer then purchase for to card use date then WhatsApp and a purchases from securely next website their example, purchase for another company. credit use or make be so other ticket information Similarly, an later then in-app tokenize that consumers for for

now Adoption program than clearly commerce power of is scale. AI we'll vision of capabilities Our X/X first is conversational within platform. the of today, now messaging steadily XX% and at few our is this resonating Automations and are more our XXXX. brands our conversations using conversations ever. that single every to customer Nearly expand our trends enterprise confirm over into goal automate our live,

customers half Conversational the in power human Cloud at conversations. conversations of the of human of agent-based all other And conversations AIs they need involvement words, eliminated by use approximately for to the unlimited where deployed. number a costs are Our fraction have required can our virtually a any in

have transformational surging Another first will the world partnership platform, demand move for power our our Cobalt Cloud with manage This global of Conversational Infosys strategic a we to keep LivePerson in we services and cloud. Conversational Infosys, relationship testament Transformation the conversational just new public cloud practice strategic the will next-generation the with consulting. is creating of AI public leader a will digital by our signed and joining be a around Cloud conversely cloud. them with and help to Infosys services pace

enable Infosys is to handle cloud demand sales increased will auto IBM, also Our ability the new reach scale and go-to-market distribution. to partners, to TI our that a services and with for us our other geographical person strengthening move public us joins quickly. including enable GTech to markets channel Accenture enter the and in the capacity building

In new virtual is with fact, X that were of one to X-figure closed LivePerson's we came X physical new highlight deals QX the X-figure the events. logos, partners. new our in demonstrating deals COVID. Also change very X they of virtually now these X ability next sold marketing noteworthy customers, of they we even are merchandise. I'll codes from win impact has from our the the did stores to move where adding open, quickly that their They to over a because The they retailer. with wins period, are happened X-month stores all jewelry logo were QR multimillion-dollar the during and physical to

with mobile on distance So that their consumer a leave commerce's that the jewelry sales Human appointment can and physical messing maintain the they digital. deep AI app over connection multidimensional agents socially shows integration store. consumers special with human enable will enables and merger purchase and finally, remote-based of to will conversational by And devices associates, pickup chatting them the shopping. operations continued after the curbside setting, how example while a This store messaging. that with offer payments

who AI, this win numbers as care it. one beyond Consumers about this company of messaging comprehensive an lost offering. consumer channel. a driver they our Another We're and channel XXX one. Conversational country. only the expertise of was that very no to is customer becoming And the must-have operational The have broad don't a because Think because -- several approach in as dental customer offered to the of different messaging with of first deal offer AI will saw become thousands chosen employees call health competitors the a largest logos potential active treat in has longer and another over year insurance deal for voice In messaging in our care in being of as recently Xx we a a just with alone. forced we were quarter right to really ROI accept insurance ability of We unmatched capabilities, couple differentiated Xx highly because communication. providers the was of vertical new now us. insurance the logo

In rebound customers continued new addition with also the LivePerson to existing logo to during strong expand activity, in quarter.

drivers on highlighted As revenue we're key last of seeing X call, our uplift. earnings

commitment of cost-per-interaction the the a upside when the the only of the and This XXx top messaging with end moved to now or strategic maintain during on involving associates models. following business being agreements messaging as use the later, volume, sent upsell First customers to increase the enterprise an in-store seeing contact successes hall. roughly down usage-based upsells on being initial demand are in to months second, crisis; them agents COVID Cloud. as all-you-can-eat banks upsell at doubled were the shift. QX expanding with win X X drove with of bank In global another signed of the A example us automation Conversational a continuity XX pandemic to great After customer X-figure the is license them. we center X-figure signed and QX, their long-term cases, use these their

came usage Like first volumes under in revenue of We Another in interaction to a initially this the is want recurring lenders a example saw volumes those our the cost in the no transitioned online changed spike with agreement. higher as per signing license lock our revenue the from annual ELA, into of an from for value customers that renewal. and customer. platform doubled spike half QX of That U.S. the model customers increased of capture when in enterprise the driving in customer recognized upsell X-figure the up our largest by on of one win LivePerson growth benefit XXXX. many

We commerce. in expect next over Infosys, of broad our customer the indisputable revenue accelerated two contract many use AI for up to landmark new Record adoption a our of signed, successful and LivePerson's leadership growth, signals years. of when conversational come ELA with are repeat customers partnership cloud cases renewal the formula expanding

XX%, of with to year. growth in growth are for We're executing again year in achieving and once plan. targeting target long-term position are environment, remote our the a ahead work one guidance precision XXXX We now this new raise revenue

growth also we now efficiencies We invest capturing Increasing controls. built model scalable and emerging while improvements. delivering tightened around automation a can strong line in where key have drivers discipline operating through is internal still bottom financial

industry are million, equally strong which As new of driving of I'll Conversational will unique with structural we the guidance three the quarter, second setting a to expertise support reinforced Conversation quarter to communicating that a combination a brings brands. increasing with profit our preferred for consumers means peak us that XXXX $XX shift $XX LivePerson's result, are services shift. results, required close the historic which our standard adjusted and And level. range believe to third we permanent key extend platform, technology to our an the million Cloud points. a of as EBITDA back AI lead. to is follow LivePerson's

operational improving in execute XX% sharply to is vision, As financial revenue in XXXX, on margins have to firmly the that, guidance. our John John? path adjusted XX% on and accelerate XXXX with now outlook call turn the our XXXX we a into digits. and an in more over to on from double color growth update while EBITDA XX% I'll to With moved our provide

John Collins

adjusted EBITDA QX, rising records flow. range metrics, for across including key Conversational value, AI, Thanks, demand Rob. setting and our a free we of continue cash on capitalize revenue, contract to In financial

demand are continue guidance raising the with again our go-to-market targeting in With XXXX, operational making first organization see investments and and top generation. and the our strong and efficiency, demand Starting once strategic meaningful we we After million backdrop $XXX to product returns. improving revenue bottom in on line quarter.

values and generated X-figure in contract Our field deals record closed organization QX. X

we pandemic, As momentum expected, existing help effort began the the focused following navigate to with logos. rebuild to customers new

indicators gain a for of approximately and Reflecting XX% across mid-market share in this annual the deal contract Specifically, hit QX. values XX% new XX% From second our this values of the which an for a nearly contract new overperformance of strong to Revenue XX% by consecutive line growth target nearly following XX% signings, year-over-year BXB end which revenue hosted year-over-year existing $XXX,XXX. relative are EMEA revenue. Revenue accounted for of key consecutive overages International more pre-pandemic the quarter-over-quarter. for as perspective, of in XXX% translated example, well timing of a customers, midpoint XX% to balance primarily U.S. region These Significantly, customers revenue Consumer improve up Within favorable in highs future ARPU signings, increased million guidance, plus to was year. of retention, of returned increased execution logo the mid-market region. revenue, at led XXX% grew XXX% of our XX% and XX% in results $X enterprise contract XX% than EMEA quarter in modest the and the leadership more accounted demand previously XX% segment. by and geographic our XX% to in was enterprise even revenue. software. approximately revenue quarter-over-quarter, the metrics year-over-year second and of increase total accelerated with quarter earlier levels, marking encouraging grew logos. were for range. issued to high expectations driven was customers increased increase in yielding and The growth for did of XX% Total million new growth. $XX QX, our upside, revenue. the new continues in to up capture, above and appointment consumer year-over-year, year-over-year, year-over-year, of of by grew

QX. We past than from the have more XX% which over also continue of X gain contributed to in our and X-figure contract leverage signings influenced channel year partners, deals

model in partners, which practice quarters. and verticals returns scalability from not drive goal coming greater is As reach key build Ultimately, geographies, XX% our our our materially deals into go-to-market a over to integrations channel Infosys Conversational organization. for expand of significant but Cloud, global partner invest even expect from around we generate our to will our also the only

higher and In closely industry posted revenue September conversation terms of contributions, year-over-year by they retail, followed was by in volumes growth financial and all and pre-pandemic, verticals led services technology. did than consumer

of high the and QX on to our million LivePerson midpoint million by guidance range line. $XX XX%. of all-time Moving exceeded bottom EBITDA adjusted marked $XX for an the or

asynchronous offices the a from hiring public spend takes can the Our enhances increased upside adjusted the high EBITDA to point noncore as margin plans the productivity; after an XX profit the priority. contribution: for percentage continued points The Infosys; and and companies, of model. of many attributed which leave to a landlords solidified revenue, repetitive growth internal assets we our automation the work-from-anywhere to moment. following write-off each to multiyear and equal fixed Higher-than-anticipated we our impact forced of people, transitioning infrastructure be of year-over-year drivers, migration the Back XX%. physical as the guarantee of felt officially employee not deferral around could jobs safety onetime because other areas on May, depreciation of cloud latter accelerated and our the was deferral in our highest in with leases; Expanding about like

primed few with talk In model, asynchronous high for maintain charges in allowing addition, onetime AI of about as employees and to and a the technology our some productivity. communication, us leases, moments. company work there's culture specializing a I'll Note our in associated levels were new

our quarter greater our ended than increase balance goal million million, through beginning in which $XX cash of was which with to of generated the XXXX and flow million a balance us terms XXXX quarter-over-quarter. exceed half. cash burn cutting cash positions we of $XX free $XXX In positive We third cash, QX, year-to-date initial greatly

our basis an P&L and flow a and I on goal adaptability expansion the the of to adjusted think LivePerson's long-term that's margin both conducive strategy both and is scalability manner cash revenue to the basis. rule of EBITDA this model The testament acceleration. operating achieved a most significantly, of in control QX XX and in to achievement a free we growth

successful to heightened of shared and I and automation on billing the reconciliations we're from AI the on for to array examples dependent strategy the call, and QX, a wide in algorithms internal execution across addition reporting on ranging is registry In this on vigilance, operations. quarterly significantly HR automation the forecasting. last deploying turned we usage Building revenue of

more We provide previously the quarter. also weeks finance power rolling work each up formed free built process an planning critical insight will of team that financial modules timely and to by automated

top qualified sales In we're quota impact, [indiscernible] rep capacity to increased of the of by new capacity. routing line cycles leads a also with optimizing and reps and terms launching attainment model

Finally, a of that another most connected migrating efficiency. clean architecture milestone launched path to on nearly cloud the is maximum our data any provides we and key [indiscernible] public automate platform perhaps process significantly, to business our modern-day lake the to foundation

enabling to meaningful generation. conversational for also addition in and XXXX global margin positively match In savings expect AI, demand us cash we impact beyond, gross cost and to to

expenses. covering about talking offices, before that I'll IP leases cloud the nonrecurring home million and public we of litigation $XX note in and migration, Finally, employee the charges, assets, fixed write-off recorded various guidance, legal

$XXX of million million of for raising XX% to dynamics, a previous to a growth. terms up run year-over-year XX% of entering build to peak conversation the $XXX.X XX% guidance, rate new side or XXXX we to and million million strong $XXX.X out is revenue record, to XX% of to Contract since In guidance the crisis. guidance with set of or we're momentum. month-over-month our Considering range QX these positive continue from are growth, Platform volumes $XXX have plant.

also range to million midpoint. growth of $XX XX% implies guidance $XXX million QX at the Our

As to year now said, XX%, on of growth Rob achieve we're ahead our of long-term track one plan. target

margin continue budgetary to and as As for internal year-over-year adoption we strong of maintain vigilance rapid profitability, from we automation. improvements anticipate benefit

As is our to to more than EBITDA a million a result, $XX XX% million than adjusted raising range range we million. guidance $XX $XX the to which of are $XX of prior million, of higher XXXX midpoint

million EBITDA a of targets to Our our continuation of expansion of $X.X double-digit basis guidance million adjusted XXX year-over-year trajectory. margin nearly QX $XX.X points and a margin

key is demand revenue the strong we automation X generation, key sales $XXX pivoted to partners. the model our again, cash both time, and of profit than in and I'll yielding global capitalizing through Finally, demand LivePerson to unique million The across a and driving our is Key for of and few investments leaders a are business business. financial generation and and our sharp cash to enhance the leverage powering which conversational extensive which, operating in product points direct impressive acceleration a vigilance channel ability a burn we adaptability years' we've on record is close with about to highs, geographies growth. force our less metrics are In getting from AI, the made returns. go-to-market inflection organizations testament productivity. internal

with I'll to the your take hand call the So back operator over to that, questions.

Operator

[Operator Instructions]

Robert LoCascio

connection to good. Skype my because shift the is I'll not normal

It's Robert. So switch to over I'll Skype.

Operator

[Operator Instructions]. open a I'll that in second. up

with Our first William Arjun question from is Blair. Bhatia

Arjun Bhatia

me all hear you right? Can

John Collins

We can you. hear

Arjun Bhatia

you -- going new customer QX new existing year. maybe Maybe continue from It help XXXX deals customer us what's seems deals Perfect. -- the expect strong new off into continue front? on dynamic. how understand the there? the want field Can customers, And and we to just listing deals on just can to and with I down be maybe IT going like existing start what last the are

John Collins

I value actually the Arjun, signings perspective, enterprise, within reiterate year-over-year are I'd contract a from up as And up well. significantly, we're as described. that

continued capture signaled, are pandemic. previously we through in And we area So that's the improvement on an new to that to ability logos. build seeing we've as continue the

Arjun Bhatia

more. is Infosys what any the when unlocks maybe partnership should of results? that we to maybe into practice you thoughts want out size on Infosys on is roll then Got cadence would that, start And partnership I maybe a it. more just details of the little and And great. that growth Can the with to planning bit just the to give be some the this us expect opportunity dig the driving LivePerson? That partnership

John Collins

Sure.

Infosys infrastructure we're huge a They have is organization, other So range powering generally, of of with. with financial -- also areas, integrator working a e-commerce rebuild companies. Fortune a including and services, mean, are I roster massive systems of that for a lot XXX already

Conversational in in start fourth that helps deals the commerce. to of product Conversational quarter. natural we us with terms to customer technology to addition And ability and we the there Cloud of with, that has So in catalogs can business a smooth with the some they've example the to really pipeline their conversational to closing help And that access path he large other integrate delivering on Cloud front, is, is roster. gain customer how we those fit expect the really that have a Infosys the Infosys systems assisted integrate to services get e-commerce and begin moving, X to already for integrate back-end the

one it's a already a example under showcases and So our this and win relationship. that of synergy belt of power the that's good

Operator

from JPMorgan. is question Sterling with next The Auty

Sterling Auty

a hard question, little end. it was The beginning my to on hear the of last

in think that important, forward? this isn't board, size, brought So you can that profile new customers, help understand new a versus new complete of as to how the what ago with in about you've hopefully, we exactly terms move just XX customers seen, quarters as you ramp of couple repeat. us these let's the revenue new a of But maybe do? looking the customers deals say, we they're on And those scope the should

John Collins

as matter, into and -- saw And as of than fits the start expanding, of just it we we process X highlighted or previous smaller-sized And landing endpoint gradually others XXXX. think add grow proceed at where expand But terms volume. expanding. well strategy side, will X same segments calls seeing, least department the logo and that I enterprise we on perhaps also we've the entry that the pandemic, a new across think are within with perhaps the I might that very and in I grow very with during general to volume. works think that our X in the points in successful segment

landed, is expansion less what strategy we've consistent historically. with the more once think, or seen I So

Sterling Auty

And then as lines, just two along a follow-up, or those later? years a year

John Collins

give Well, specific to dynamic. note how I land our we that at year-over-year a But indicator XX% and new expansion plus don't at up high, as numbers an would actually all-time -- successful are thousand ARPU OVA. our of strategies how expansion

Operator

The Barclays. Gogia next from Mohit question is with

Mohit Gogia

of it a I can follow-up was rate? And have of the close close quarters. you pipeline question. in couple please. a And I in? like evolved look and QX, then modeling have the like Is how and on comment just comment if when of wondering you of And like are helpful any sort people sequential on also, last over will of terms operation what sort sort be to the you they as rates

John Collins

Yes.

in of had close XQ highlighted, we're XQ success the with front terms consistent on as the the that rebuilding to So exception be we that having rates, and that, we're in logo and I would previously pace demand say with new strategy. track moving that forward, with on I

of I pipeline quarter in last end the we're what modeling mean, terms pipeline, with is quarter. of overall consistent in, terms and the In the

quarter-over-quarter. up actually So the far is pipeline so generated

Mohit Gogia

the follow-up question platform. on is Understood. payments My

of some customers color, -- customers. I if these So the you know some us Like you quarters? monetization of these how can wrapping or like I mean of like And sort the the the paying don't are of actually are is sort right? can few you But next initial some wondering revenue us So arrangement give of think what how adoption give model? beta the if works? sharing more in

Robert LoCascio

Yes.

testing are right now. they So

testing they're the platform. So on live transactions actually

monetization yet, aligned We haven't you models. usage-based our with strategy but go the talked about

it. a every first we've you're looking they're and customers, So But right that. the time and handful of for take transaction, using launched invoke at monetization some you now,

around good Once -- is seeing we so the we're And again, of went use which as more reason more sales marketing, into I results. we're the concept is and cases messaging to commerce. and have broader across way seeing of we and across now, it's difficult customers, need to a payment flow go have out And handle endpoints, web a because messaging. you to right to that unified

we're now from some -- customers. results initial our good seeing So right that from

Operator

Needham is Company. & The next with question MacDonald from Ryan

Ryan MacDonald

seeing perhaps greater next what the of interactions of sort then XX, over seeing adopted. follow-up. And like on on XX you're when months? look wanted interactions you're structure you what ELA great sort in would start AI-based of inclusion of from terms you an with sense general and making a X Are renewals those of quarter. a -- interaction. conversion to this that are give the number being the of contract cost that sort you'd of of to Congrats increase I us expect the a And conversion? have per I'll what cadence the Can

John Collins

Sure.

banks later, of months and first success, on being contract model, Cloud had again, I'd we global year, for Conversational their contract a we CPI volume-based So ELA after ELAs And to CPI seeing quarter. volume-based structures, figures X the we've power converting after highlight in it X And the operation, of this do can upsold because mere to the them X structure. the that great in of then that particular what X really CPI XX the for from converted structures. top

So profile sharing demand revenue it's given a been we've growth, powerful with example that you. of the future

XX%, to into and cadence, In accelerate expect about approximately, covered have the terms that of XXXX. this I year, we

asked of -- think about you AI-based terms interactions I conversations. and In

is automation All to of this upsells. we've what with increase consistent applicable these since equally is ELA XX% in to February signaled at the CPI

Ryan MacDonald

cash back-office functionality. really I'm put a have as John, follow-up, flow automate generation work been lot the a then place has quarter. been to done the a the Obviously, just of Excellent. And impressed and pieces with free the of lot in in

of do sort early there, seen you here? moving is sustainable the positive gains how Given that you've think cash forward flow free

John Collins

achievement, say see a rate this million a our again, and an $XX flow I strategic cash would and ways, to control basis us. really rule amazing rapid run free of that I while quarter new in don't for right P&L the ways hitting Yes. now as to on ability testament the just a is it

I've growth and mandate our #X profitability, maintaining consistently is while changing. the said, sustainable However, as generation cash top I don't see goals the my that line, and company to ambitious move simultaneously for towards

Operator

question from with Kirk Materne next is The Evercore.

Peter Levine

credit Infosys. for It's quarter. Peter with Group Levine. good Great hear the to the partnership

to this are or of support And XX% should service motion? coming forward? about kind flow from you your what of If deals thinking deal be targeting go-to-market partners, changes perhaps going how revenue kind making investments you internally of any to we are

John Collins

see the we've the be a already us, profile to desire certainly leverage. gone course, in more established which in market playbook enhanced verticals create work run, really a our creating seeking we world, our we these sort push And participate want as for of like allows Cloud consistent in work, so where a those derivative partners PS push value is transactional where come to operating most for PS Peter, that with deep especially And we'd create would to those our in and of to Conversational have profits. of longer that we verticals, business, to a the that goal partners. to to

respect that's to of North strategy. with us kind a work and the partner for Star So channel PS

and tools terms with sell partners work In of key investment the without of to LivePerson they self-service to create the suite interaction assist the human our the Cloud of the enable areas one Conversational monitor on customers investments, that that to side. is of

area that key of think that So leverage that's forward. on model will drive going enhanced investment we a

Peter Levine

just COVID this may seeing guess, spike point but pushback related of the what not is it customers going that it, budget then be the what's in surprise a you're as second With, of of economic Curious now for follow come And inside? here QX, I Yes. much the I if That's on. all news versus, uncertainty? would here, deferring decisions, great. no maybe And and broader how up. a more guess,

election. an have We

any decisions impacting on curious cycles, If COVID. have just We that's there's know extending to if sales any color or that.

John Collins

a the to just especially clearly, the a I there as don't weigh a have the value new don't for quantify I jump when a going comes that and would uncertainties precisely large making factor, I very But the to a pandemic persisted you. macro that specific well? Yes. are to But throughout logo, have new like Rob, it partner a are that's and year LivePerson. value in have election commitment quantified. you

Robert LoCascio

still Yes. I home. the centers as driving shut COVID our you the contact see, to is offline agents demand are retail shift mean lot the of I say, in to was and being the going and digital shift can services, demand at down from from the a

there's lot going a on. stuff So still of

So pick know season. in start are to holiday gain our obviously, for up customers gearing especially up, share our will who I around, the don't start QX large

us lot you see and giving now, held of a right of lot wind is COVID a still kind in mean, I So sale. of strength could the

Operator

next with is Richard The question Baldry Capital. from Roth

Richard Baldry

And capacity? to balance When against estimates that by we earnings you look of are would at we much people faster ahead want where well if the hiring of you of have mean, you ability have the being and how it'd sales make I looking sort be sort for. your still thought be, that, do P&L

that? that So gain current you do helping automation feel do place about leverage think you to material the are you increases you that around other some When in -- you're around there's a if that discussion there. things you'll see do And how maybe capacity? putting

John Collins

Yes.

productivity So we're more productive standpoint, from the in we reps now than past. a seeing have

to these sizable one XXXX. very projects I pursue tries the And in we've who do that decision productivity organization. and automation in remarks and the about sales data-driven the and capacity that really of quantitative opportunities lost them to there. that you prepared route to get of those suggested, how to support have that since to so best global of are nothing attributable just there's as and the the ramping reps tools importantly smartly who highlighted investments is to the portion leads the some suited to And after has the in built for mix revenue a of And attributable force also

testing to basis. additional on and as expect building that's a we So drive per we're that system a and productivity speak rep

carrier to capacity. our think of go-to-market I moving course, addition, counts would growth in have plans of continue forward. invest one which, In to that quota we is increased And drivers, say see can core do I we

Richard Baldry

like maybe this sort far do backdrop throughout feel you might automation or And a also, of what we how maybe efforts further restructuring through year are with of sort to your see types you internal of XXXX? throughout

John Collins

Yes. XX lean The ROI only pretty and year, really and we're ramped is seen scientists still just in short really that we've is QX. answer there getting the engineers Despite about data in started. the high the team already

or our size we team of XX% think I in XX% hired QX. total

clean year so really the so online to we've automate And of that just to and much provide brought really organization. instrument it's of key just but slows already getting that to is code build amount foundation writing, for the data suggested to the and I barrier that prepared tools kind the and surface delivered everything clean the across And what's lake the connected rapidly support remarks, access leverage a the key is possible. at scratching the data that not efficient data The in down. as this is we've data

really a that's important So milestone.

While it's there's being internally. we're the automations do to building there, that more leveraged already by

think more come to I again, lot those dimensions. So on a there's

Richard Baldry

gets your technology due are any strong balances, in-person the that diligence diligence? like cash due they Do of hard do the given the sit thoughts Lastly, until Or on that be maybe deep feel M&As certainly still on to sort sidelines think do to or can side? tuck-in it's though easier? what bit you do you you a even on

John Collins

Actually -- Rob. go ahead,

Robert LoCascio

we're want side. So really obviously to we AI what on doing -- accelerate the I would --

think into I of go technology much to looked really And the built of the resources side, we lot -- acquire building -- from at didn't date. get money our it. amount on organically companies. too a accelerate find shareholder We a a perspective, fair we here. we And built can on good to So we've world. markets if we'll We've are that the technology out look we company to spent and

see And generation we margins heavy of sort a a on so investment because, that that's and side. flip with okay, why cash you did

technology. Now we're of selling through a just lot flowing that

we're if got the us we're a kind good because But we'll -- something So join science having. we'll it. we've development. side, getting that's consider to team Googles great the of see and we're then success winning. And interesting, the and -- we continue up want Amazons with hiring competing of right who we're now, we're data And organic scientists and engineers data and and on Microsoft's we'll

them we're and here. and sometimes recruit to able but they hire And get win,

to So on really organic focus as well. us allows that

Operator

is The next question with from Steve KeyBanc. Enders

Steven Enders

and that in want for about sense the sustainability just I get that opportunities the potential quarter you put here? of be to up better of continue from guided I thinking further a how to. What investment guess the to you're EBITDA decline margins

John Collins

Sure.

first, that we do devised to putting going XXXX, will to that say margins CFO that. forward. again, mandate have a intend Without would I key that So strategies I a with that's, consistent guide out the as continue be expand and we for

we're on then core I on which moving infrastructure go-to-market growth of the -- in mentioned are importantly, forward terms earlier, continue obviously the side. we drivers. And In the in with, invest addition, investments, AI side. to

investment. we'll investment. And need require will period a two some as which to small time, of will the some require well, stacks maintain for So migration

Steven Enders

let's And then integrate a about know And talked year with just I you you out I opportunity about a that ago. can Okay. know Instagram. Great. new a say, rolled social solution,

how this new that you're social seeing you're channels thinking how opportunity now? wondering Just of progress about kind and

Robert LoCascio

volume drive Yes. of commerce to engagement a obviously, going a there's Instagram I mean, lot going fair of amount on. and because, is

I to increasing. I the then a So going WhatsApp mean, Instagram. still all all are biggest bullish we're demand. outside Business the seems Chat there think is There's and of driver they're the biggest within and U.S., U.S. pretty about Apple lot be driver very strong.

like As of they Brazil enter things. markets demand like these and for that, stuff massive new types have we

drives all those revenue. ends which interactions, just volume front So for driving us drive and in growth

think good very So seeing. we I about feel what we're

good all drive partnerships a of endpoints. -- them. for obviously significant because have lot Especially for we're standpoint, good we're those of from an driving a enterprise we volume very amount customer We volume

Operator

with The is Latimore question Northland next Markets. from Mike Capital

Michael Latimore

Great quarter. Great.

quarter. last kind that I productivity have this think number you of percent gave you sales a Do quarter? force for

John Collins

Yes.

forward XXX%. time, So rates percent that XX% productivity function to going second number And that really meaning given expect force quarter. the than number attrition moving the we our sales be we that by hover end around really expected to of to was rather ramped of would of productivity a up XX-or-so

Michael Latimore

new upsells, gain even the in it. or some deals on I of big share, gain that amount? guess, And are share kind then of Okay. Got of sort

John Collins

Yes.

last deliver, revenue, with to quarter. continues XX% consistent at share game certainly, So of although it's

Michael Latimore

Got back, way you? far it. that through guess, gave how payments. you're digital are of It And I you for an then like a while the done. almost investment sounds amount

Robert LoCascio

some Yes. We're we on built. that other that track for then innovations and

track that We pretty right we're So on on under much spending. exceed But what were for we spend the track there. the would yes, We on it. we're year. didn't we thought

Operator

question The from Koji with Ikeda next is Oppenheimer.

Brian Schwartz

guide for so who but are on that are I that Brian deals here. seeing Rob are top to a different your hasn't quarter that the ask And I asked far. it's sitting a competing winning, in Schwartz or you're Ikeda. take the AI competition. line question know perspective, market? I'd on just in you're that in the competitors logos is a been if strong most don't -- thought you're And main question big X very vision who Conversational new This against John Koji often? and thought projecting for those new done Congratulations it, the big I'd I the that from you the customer ask

Robert LoCascio

this or a force is as a one center. sales in channel. They're lot contact another, as on like treating of accounts, genesis see, side, messaging on and We

it's So e-mail. like like channel just another

-- these so get and deals tissue AI the automations, connected for all done. the obviously big we that, on we And ride asynchronous of communication. why that's we top messaging itself then and And

to using there So we're going to enterprise, -- able if get not less you're [indiscernible]. you're an

really tried they we other very messaging it can took chat make doesn't The tell new and you, to a technology. then don't a work thing well. They real asynchronous, That's as why built whole platform. which I have

start-up We're like than looking of in been -- just revenue. are to at, a booking now side. $XX we're on We've on more companies it a doing that enterprise crushing million, doing going $XX in we're two our in quarter in lot in the million like pure there's they And like most funding a $X right competitors side more the just of messaging. -- So million or messaging year businesses. they're have said

million And we worth So early we're -- dollars' to it's a we continue, ahead innovation big going a a and of have it coming couple and got we've because far were tech we just of of really able everybody. really down the at of lot of we're table. hundred stack, this and to the just we put vision went into now investment

the think right pricing the so We're we're for the now, market. creating market. I And market. We're creating We've the right watermark lead we're just market. the the market. for structure leading partnerships probably the market. And selling defined with We the the high

Brian Schwartz

couple a just I maybe And have then John, then X follow-up a questions. for question. and longer-term John, of

expecting call. guess quarter? those about next Or up leasing are comments, were to it introductory in on this your quarter? I think talked figure you just mostly onetime came we're Those nature that continue out. costs I in the they changes restructuring to trying you

Robert LoCascio

They were in nature. onetime

Brian Schwartz

bringing And last Great. question, then of it back to the XX just rule vision.

the numbers growth productivity retention lines? the flow then was through efficiency the on for is even higher based You've from that, for than assumption then seeing year, And line gains? showing if top and and in growth. is even can it talked XX% quarter. that growth wondering about could on your you're I sustainable and sales -- Or on rate is the guidance what XX% cash the you're pipelines here generation operational faster the here the the this go

John Collins

reiterate of in whether be think And that which calls, will for what guide on the was short we've the I that XXXX prior table. can is terms wait on providing of have accelerated, But XXXX. call. a stop I'll to in XX% we'll said So to I still XQ

Operator

The Zach question from with B. comes next Securities. Riley Cummins

Zachary Cummins

few these that real lease strong to kind going years? gone you've be of really through quarter. terms guess you what's of terminations? next can I in dig estate, mean, the to a approach into on approach now office the your I Congrats that over And

Robert LoCascio

Yes.

made this our not about operational, the build decision to of work way go anywhere into we're type an to So offices we and company. back do a going from May early

have don't to offices. to plans go any So back we

part are offices first safe. is cannot the make The leasing our to us people the who offices

So there's even thinking in about no point going back.

employees we There's The that of are around. work of finding type mode is second finding energy amount part this tremendous our are pretty good. a

XX about about How how small working beehive right culture, around things call We it structure. We from There do bell, in around actually operating do to kids. group people a our we a education whole company anywhere. do have was now. the we create volunteer create new we're talking a model communications like of

is So this the lot I've we've have bring offices that. get them better anymore. but and we And in hire way in the we the to thing. think, some way to work. got there on, in be -- blah. offices realization a seen It's of never complex oh, I of about doing to hired any of about, is met, we're have excited And to and about blah, XX not the a the our they're world, to quarter, and a now people people case, ability we it's that are back We here. them corner and blah, some to like, But very CEOs a

great think it's I So opportunity. a

We them. with We're are different taking fighting our landlords. a approach

And wrote giant they sense that they're for not to willing will be money. they've that make paying just check. give bad them don't unless see because will want us we product got I product. just spend safe Pinterest, a doesn't think, We do us -- them. a our They I the that don't to a I fight employees, which believe

And putting we'll an everything, and that It's model asynchronously. have right need on we're model call asynchronous. company. will demand it taking the right the our interesting. work with in now set in see kind the It now a the working just employ But of product in so approach we're expand we making we end it's we So with fits from the fight company and them We interesting anywhere what the is to the that. happens energy time.

our like seeing right we're good energy employees So now. with

Zachary Cummins

final Understood. And me. then one question for just

I With cause the you are potential you the regions the your additional lockdowns in surge on demand in know how about the well. a did big but as world, us mean, surge COVID-XX drove cases again all for also some I upon and coming surge disruption, thinking around for business? the this initial for

how So next quarters? curious just couple this approaching of kind you're of the over as

Robert LoCascio

contact into playing centers. We strategy. Remember, will keep the just #X thing is -- our it

we and gone. So time long traditional we've said for in voice centers, believe a didn't they're that contact

they're kind would calls, we're thought I good a didn't give like which voice they don't think But of just They this exist. So gone. pretty job a go I it at. way. we'd doing

trying customers get working to back And are running, are automated. getting but completely conversations a challenge. Some from home, them it's

and been And so the centers, -- those contact #X thing impaired. that's they've is

digitizing of And so AI. we are with working to fill the of gap the demand conversations and

jewelry jewelry to Like we part down, They're the diamond opening obviously, opening their second centers. The for and is, seller was shutdown with retail digitize largest shutting their need contact relationship seeing, and of consumers, with the year, a spoke have stores retailers down big to not us world. may the the now they COVID because shutting want don't and this and on the this conversations. they about. another of retail. in and big go Like we're is But for during happened really thing have what

ring, talk engagement in somebody, a want want format. you digital an you it ring, to to to and do a buying You're

to we're things. so And those power able

the example burrito can Lowe's with the them. a AI figure the last stuff massive where you pull door. quarter and pot volume we're amount doing up it and at you pepper with retail If Conversational use The pick of can and

the stuff it that's there's it lot into our And playing a drives the platforms. more just more continues, So for COVID. of demand

Operator

with Markets. Brett question is next The Berenberg from Capital Knoblauch

Brett Knoblauch

impact looking just the revenues? What And CPI other in the respect base customer guess to percentage and across of to transition deal? I deals. ELA your an one customers the any deferred have ELA on does have from

John Collins

have deal. ELA than I a function payments. revenue, whether annual we on it's deferred question upfront get the half of mean, less of customers our And so really Brett,

to large As deals did whether in note that not move and payments. we looking deferred quarter, see I you'll be you're that have if not. revenue didn't come to And at deferred, helpful indicator annual upfront it's quarter this mean, were in I reasonable a or signed -- that think with

main a that. from because obligations, think it up So pick you'd perspective, performance RPO see captures an I

Operator

Next question is from Siti with Mizuho. Panigrahi

Sitikantha Panigrahi

COVID-XX And two And impressive. you are for growth? quarters this look the XXXX, years, sustain prices. X or the last from forward drivers of to XX%, what in year. are you as future Maybe fact, XX% started the key growth X But kind next with you like benefited XX% kind goal this to -- Rob, this growth, of

Robert LoCascio

The more are plays. up keep we -- drivers opening vertical

was Actually, last and you so like And doing well. were year, remember care travel now, was hospitality it for -- right health and travel big us. it still

we kind of will interesting. But up. is us, opening vertical hotels, verticals which care. more big coming a still see they're our of airlines, a lot Our volume I up health know government be doing with the like

like opening And endpoints they're like so Asia the all And When expansion. things platforms then of international there's we're and Instagram. need the up, whole, that for regions just get starting going. front-end to America, these drive a and it's as like These and place. proliferation to South Asia There's at they more volume. us look Southeast consumer, more you the just

at we seeing. base base even which with in still -- focus the much the do So also of I a -- beginning today, to in we're where because just stuff our or of customers, obviously felt of that's can really we're so ours. here, there's is our

hired it's you to what with do There's humans about replace see. lot some their there's we going cases, capacity. more we enterprise. on other he's that more to what to going It's delivered John AI, work. it's the conversations. cases, doing In for And work to to we're on it innovation today. that's think and just a allow we're So doing also inside I do, were us work. side, up great we the going when augment free and the augment agents going In

at Our that he's the but Conversational looking building to in sets automating, into tool enterprise we're Cloud. put

So see HR the all legal Conversational things having departments something into will -- departments, department, with Cloud. that that finance internally, conversations your you're is we come

first things here inning inning the we're So like and AI, expanding I these second in I said, different kind second across talked inning, messaging, was about. of now

Sitikantha Panigrahi

like you then about. like transformational of And the you does look or of the such pipeline the even projects guys some for talked dealer.com projects? one talked How kind about jewelry

Robert LoCascio

They look good.

but type -- have set of -- we a -- of -- like big a too way we working a thousands marketplace also product. we automations U.K., we when like which to pages up, with has it, we of then are And company set automations, we're haven't simultaneously, and and we automatically are businesses, they're a We are small created we're setting a up. yellow about up have are thousands offering, spoken much in very create the

we and So -- can up a businesses can small automation, prepackaged with at we of thousands can that set live thousands time. sellers go it's

platform, months. that We've then we created around we've payments banking marketplace of that. testing starting stuff a out end-to-end some test to the we're vertical the roll vertical. plays a some full stack, conversational are some The that banking thing on so play vertical. opportunities last with around there's obviously, been a whole there's and on vertical So seeing we're working And for big couple

doesn't to anything. UI, a bank full to in a do They So full just could a plug of have middleware. kind

stuff our have investment going with was that we for some That did here So now. we XXXX. right part on of

this lot parts beyond to setting big just So a up of there's different brands.

Operator

Samana with Jefferies. The next Samad from is question

Samad Samana

I versus a if just starting XQ and to touch pent-up maybe we're we a commentary year. a normalizing that maybe over just of so how big, on look seeing being -- were rebound. the year-to-date some wanted shallow versus as the demand, at wanted XXX% ACV basis, just for X-month period through us point, right, really Could it to maybe I customer understand is maybe look? that triangulate new to XQ does So on trying you help maybe sequential X-month Because to comparison number -- for last right? kind how So bookings year-to-date

John Collins

Yes.

up the would So that, pre-pandemic we values the have about contract is brought new think way Samad, that that levels. I logo

structures. February, I think rate more I is achieved Obviously, the is gave meaningful So only pre-pandemic thinking back is quarter. its I the in think what is level third December, as would as former commentary what really that January in growth and base. the we've But

Samad Samana

Okay.

about new completely about think And new to think just I a That's as companies for say as so then, Okay. helpful. logos, contract that signings, new I LivePerson. are especially guess, let's the you and

are for get x trying quickly or now? on that's agents a let they're they solve handling the me online? to customers they that in, first given is that hey, Or surge XXX changing a how sooner. my implementation they problem are are that solve issues guess, I -- schedules, difference have just right in customer Given trying a get ongoing, ramp in problem cadence, there how for as maybe their to

Robert LoCascio

go of X-month about stores jeweler, stores sales during -- it quickly live my the COVID. now Yes. and example cycle retail live demand very the to then was go I physical a gave during On impact because the on right and

a we're there. So lot seeing movement of

a We -- the like go them. through We level security that And It's There's of there's health just companies highest health process. that allows have you very, to go Hitrust, process now very so right the sector. There's to us require. trying massive. just large with brands. they some care a that for after by got certified care close we're way, the are and

up in coming And if or towards this We kind to of if you hit people the quarter maybe quarter seems up be at that. quicker We're probably little to to rate showing so. models, our takes bit realize little we numbers. million a year your QX. direct. year. moving in growth a Everything year longer know next wasn't look sector or going somewhere But XX% hit that going is I the have retail the third our a happen $XXX that don't until ahead. XX%, year quickly. a as We're So

of about want fast the to get and People So get need. speed and want to move is done. on that and stuff all

So.

Samad Samana

Great. I strong appreciate the good the color, see to and results.

Operator

The Rhee Craig-Hallum. Van next Jeff question with is from

Jeff Van Rhee

-- the you box balance it bells the need Obviously, with Rob, you that Congrats. looking Looks consume? is to easier do making of you adoption. product how do the critical out good. accelerate really towards balance how how easy and make to all deploy to consume How adding and whistles. do

to of point where sit talk of this having think terms full versus consumption the if me at in about set, Just you -- you feature you how ease will?

Robert LoCascio

on could Jeff. definitely, it it gave platform we for a I businesses enterprise -- -- make initiatives to It's a have or since Yes. year mean, and it land balance. can a so can the us mean, been is today. to happening definitely and that's going we or sales it's people which The I our expand even in do internally without the use it having implementation and process, we then X

mid-market, [indiscernible] quickly. want small towards we're pretty to and want business, different the be which your -- intense fairly we attack that platform the the automation. call go. at place, would working you it, to is close which delivering, put really we're Like to If a let's card credit you

out rate. we well coming it's very all need a big deep brands we So the that deep, are is at doing fairly very the automate that to balanced But roughly shortly. where intent-based have learning high

and [indiscernible] sets that So alone, of and them lot can on then in the then then groups adjust That business to so tool intense a a lot has create data we which driven enterprise. with that's impact. basically tool growth large have. And That manager of -- they they tells and can most have to now the analyzes automations technology.

So a as it's said, I balance.

time. literally I customers set example This this who same customer end, and front marketplace conversational the about, the X,XXX well. very of we created and automatically it that automation up handled presses talked the at on a we've is have runs go think I marketplace this live button they their

that a experience, Shopify an to And press we real could that's more we're Like the so that you take and are because we're conversational that things. on, if do those and to things other on customer commerce on because see a marketplace, button Shopify going overlay scale allows and scale. every money us spend have working Shopify I where that

Jeff Van Rhee

at how the the kind to points? lead think point. Helpful. pain of that, of efficiency, do about flow this When structure thinking you free, What think you the you you about gen What couple and top the sort are get sales lead sales of Again, of your of accelerate structure machine you that gen, now? are sort right more points key of sort when friction if will. even pain that flow,

John Collins

that, this is both QX. increased marketing And events sort we've one seen pipe our year, addressed the the those quarter-over-quarter from generated here we've of the including events large for events. Jeff, I in digital lack and dimension And that before discussed throughout demand with think to extent in-person we've those a year, event. the of

marketing option we a sign new it's So positive having we're same that as despite for to grow adapting last this did finding ways in-person to and normal that year.

Jeff Van Rhee

to to transformation the down Is then there. down you've gone as I radical just of did in know customer follow-up going the cost X or coming serious acquisition fully digital, high were events VIP dramatically, I a mean, acquisition cost customer the sort here? end, of events cost real the come you those

John Collins

but there there's channels. savings learnings the that also are optimizing there, think cost efficiencies Certainly, and digital for I

there be there's think I fully them. is, short efficiencies the yes, answer there So your more are optimize to to to But work done question gains.

Operator

We like have any would the back end call reached Rob of turn to remarks. our closing LoCascio the for today. call I to

Robert LoCascio

coronavirus Conversational just highlighting believe operator. voice had calls, not Thank down contact We end of seeing that centers to going we're start customers quarters you, a [indiscernible] compress the of to Cloud. helping that e-commerce, only and curves traditional on today. want adoption but commerce conversational lot is growth, points. two has consecutive replace, of the want accelerated few inadequate legacy call how voice and exposed to a We've the of key revenue to reemphasize I

and the on, reason and one a brought us. started. the a gate the for on But So e-commerce we we that that's voice exciting focusing already job horse is on there. obviously the years replaced couple calls ago great very automation, that when being he's John the starting, doing also c-commerce just of and left We're internal by

due some increased and that. see And a at in customers we'll delivering the results they've of the company, and to these done demands with an increased and employee market, anywhere can the falling put types of want meeting work exceptional to continue that thank our the working from just our EBITDA to You every is on job. margins focus of I just

to of for I all them And they've thank want what just so done.

the another quarter we So look leader Thank on space. commerce QX forward strong and in continuing the you. our having as conversational to vision in execute to

Operator

The for today's attending conference Thank concluded. now has you presentation.

disconnect. may now You

LivePerson (LPSN) 30 Oct 202020 Q3 Earnings call transcript