LPSN - Earnings call transcript Q4 2021

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Operator

Good afternoon, ladies and gentlemen. Thank you for standing by. Welcome to LivePerson's Fourth Quarter 2021 Earnings Conference Call. My name is Rob, and I will be your conference operator today. At this time, all participants are in a listen-only mode. the conference LivePerson instructions participants time. remarks, question-and-answer conduct at prepared and session will the management will from a that After be given give limit participate, and To follow-up. opportunity one one to question please the everyone yourself to

recorded. Strategic As like would ahead. Finance. over Richard Please to is President, Vice call now Gu, conference go I Senior a the Investor conference reminder, to this being turn Relations and

Richard Gu

you all Thank for us you, and operator. Good today. thank afternoon, joining

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

Robert LoCascio

the the half QX quarter to guidance quarter our of was Thanks, within range and a LivePerson's Richard. earnings which really year-over-year I'm with upper to performance, revenue you finish the for XXXX year. million. fourth pleased grew XX% call. fourth capped joining all Thank strong our $XXX.X

grew high million, XX% revenue milestone company's Our record for to full-year history is a which our $XXX.X XXXX and a LivePerson. major in

EBITDA are million adjusted right profitable better focused of much now was $XX.X we and as guidance midpoint QX loss $X.X of very leverageable than on Our of million growth. our

full-year the we EBITDA of of million, margin. adjusted X.X% XXXX, equates $XX.X adjusted For to an achieved which EBITDA

to we event momentum opportunities as deals our Our the to was Xx top years. In deals model, its past base, of in us COVID over of as core an environment carefully meantime, land ARR Throughout recently to to companies world. deal nuance COVID profitable, and We AI conversations and customer. and healthcare our the drive, make closely one growth valuable e-commerce for during sign economic especially both business, installed and platform sector. year-over-year which as conversational leverageable automation are the unprecedented of and we In the Gainshare well QX, working for flexible with our total business and performance U.S. growth leading the we with XX% usage for makes traction further this continually VoiceBase, our which by of an three the same platform the also eight-figure LivePerson. U.S., the the in and testing demand deal demonstrates on TCV largest expand we and for navigating strategically capital our allowed Cloud and year-over-year deploying XXXX clear in AI-based learnings our by growing in amongst on areas was inroads by continue our advantage from saw the companies This focusing see other with challenges signed by core COVID messaging strength in strategy What bringing becoming AI In XX% execute acquired surge with enterprise customers. worldwide. notable continue quarter, volume with increase an Conversational was able the one conversations. we the took platform strong upsell robust is the

We that the our drive platforms are really optimistic future value. synergies incremental will between

One label clients. approximately during improve world. our notable of cards that will credit help seven-figure their around wins credit quarter new was the the a experience branding logo for with This credit the retailers issuer card win provides private for card customer XXX

sensitive channels. than capabilities run our to automation win this capabilities to their through them key integrate were ability requiring rather as third-party as Our well within apps, conversations to messaging directly

in Some of gain international markets momentum our QX.

Intent by proactive has AI driven our to to and conversion on increased improved and ramp expanded crypto of and to usage in new This country by we We and their logos also tracking in channel America. in largest deal we of delivering made and their voice has business expenses WhatsApp By are the Virgin the with also sales to transition telco logo capabilities. education space cryptocurrency conversational signed largest toolsets shopping one and by with they and companies UK in the technology. the pleased QX, forefront OX is the with as AI messaging from of utility the working for through innovation the for and testament the continues within our services in our as AI retailers is new we signed messaging. of partner-led. transform Latin a leveraging platform. like In exchanges, which our the the of footprint began Gainshare, automation offering entire and via automations Xx high saw one the brand seven-figure grocery commerce power to volatility Builder rate up relationship Media with with Conversation their this to digital LivePerson three partners Xx one the APAC and largest verticals, journey Manager, our are LivePerson, progress and in brand operating of renewal using world reduce with their

Since provides resolve spend together agents Our and email enables launched and from their migrating last efficiently, strategy, this December, solution provider reliance incumbent and questions indicating has online in are solution. increased quickly our they began to working we that product messaging CRM volumes ticketing. trust away an originally our we our annual X.X years upon and by with us on nearly brand Reflecting XXX%, ago. customer

connect two entire around to the conversational LiveEngage we called do our deliver broader first of a with engagement the company and into ago, platform AI LiveEngage. because customer that Last power vision to evolved the and conversational positioning digital years care. of and a reinforce name better Conversational The businesses that customer originally focus and experiences on with platform launched And feel Curiously beyond to and for was Human brands new engagement branding they Cloud and we power our outcomes the human consumers. providing clear week, more understand commerce and

the tremendous the This Over have the be upcoming North our we give we to the will Star self heal, platform scale generate at which past a voice interactions us large And place to is messaging in ability years, ability on for should will automations and progress four any AI both of the our our a end where channels. developing a in platform. of made platform. conversational year, by AI have

business the the space. in enterprise customer Over engagement five past $X.X a years, billion we've built

different to designed a Cloud be cloud industries. powerful for Conversational the platform was However, really many

major approximately technology spent see of industry the next mark U.S. to XX% a vertical, capabilities healthcare. leg and largest role XXXX delivery XXXX, across we expect start is our AI third in strategy our and We the our of healthcare. change that platform of which will change. In we healthcare voice the now into the The GDP through with entire on going conversational AI a playing its meaningful also expanding is

efficacy testing serviced years rapid offering deliver of also business we X been having ago, largest largest antigen Over signing XX,XXX build they been some continuity. into AI have two COVID the major one with healthcare million We the issues who two two going were with almost providers. space and U.S. administered past asked years, in-home over working nearly and in insurance us with customers, years. the we the that of of long-standing to and high an tests deeper our banking as could employees created that with the We've

benefits ultimately relationships taking with AI with a building the COVID many combining testing with the the work massive was and beyond medicine and believe One segment experts. and and experiences testing companies, precision entering and to of conversational of our deliver genomics medical in-home opportunity also a testing market testing scientific COVID to AI population. We of world's specifically the leading is of diagnostic there around analytics it broad

Conversational the consumer signed experiences. build service this Cloud are healthcare series We a our to conversational delivers the eight-figure deal diagnostic offering recently AI on starting of a that testing development of with

opportunity us new We ability are base. room growth. relationships this customer into providing with a lot There the profitable and with and our a leverageable our enterprise in deeper for of to segment, vertical of is excited plenty given growth especially strength go and is about already

to as XX public to Our in range years. was a AI stay guidance a million seven, was as core of our quarter with growth leverageable enterprise voice business retention our it and for our base QX a revenue balance the being navigate seven-figure we business was midpoint on focus as expansions. renewals put core weaving target catalyze recent business. retention year, primarily target with in has rates. upsells to better our expansions within of our company – the number that have even a opportunity that growth as than XXX% This our strong we public above framework to revenue into again, year-over-year, sticking XXX%, was the will and or $XX.X ARPU sheet we and deals focused installed XX% our we strengthening EBITDA saw controlled by once momentum cross-sell over of continued us QX spending Tenfold, customer or enabled a sustained well consecutive Average profitable XXth our our on making renewed and alone up per with offerings. being revenue align driven In within and With VoiceBase range. acquisitions by for Revenue greater

our the a need started XXX reps, there was growth. year and we return their QX supporting were achieve global around on We to field Although ramping we personnel to decided QX, we up quota-carrying to resource path last to driving decided in early operation no reach that during necessary goals. leverageable then that

time the leave running that operation two note, global had Carrelli a unexpected to prior field person our last an in As was June. during and for take the who Manlio years,

better continue growing and on down our Fortunately, ago revenues feel a weeks fit Manlio real returned that we the and we are he with that few leverage. a to is path

he nearly oversaw for and We hit exceptional In reminder, our growth under total we we three record years. XXXX, previous four record the growth prior of a rates volume Rule XX%, in the growth achieved solid surpassing XX, by EBITDA Manlio, maintaining quarters As margins. messaging while XXXX. XX% all consecutive of topline drove of the

focus following to business growth our this exponential strengthening areas: our balancing on of for bottom XXXX, ahead to model in the the while Therefore, build phase focus our and are year First, three Looking growth. will are we take on growth. next profitable deeper time and of line foundations with foundation our be leverageable for focus strong for a going to we going to preparing

experiences. capabilities foundational closer that, the to making eight-figure automations With new step making and but healthcare our will to AI like call really I'd next over this capabilities, least, turn our deal to on let our Curiously now the work important discuss the And guidance. a our into and around XXXX with for powering Second, a overall year, our which Last also Cloud XXXX and new vision AI TAM of to side, me our the vertical employees in thank vision of great expand not will John voice of being and hard healthcare all Conversational their financials for John? year. Human. expand third, our on deliver big get to one platform our AI-based deliver

John Collins

XXXX many By dynamic macro XXXX. the Rob. environment was in than even measures, in Thanks, more

year-over-year particularly a revenue on which domains forces opportunities, impact services. and had novel derivative business, the All our adapt healthcare in or margin. and macro million fourth or us capacity to and X% to grew financial elaborate up XX% adjusted XX% in, was commerce, innovate our $XXX.X the million $XX While of quarter, I’ll on for our EBITDA line year-over-year was of and with guidance. full-year In shortly, presented midpoint with the $XXX.X revenue million in or the

improvement million a strategy the moderating the of our EBITDA the and XXXX. growth. meaningful $X.X leverage approximate quarter adjusted a we in loss was function go-to-market million $XX.X loss improvement to turned Our fourth of as second The relative we EBITDA had to expected was formulated we of focus quarter profitable previously investment

traditional hiring would in and was described, fickle dramatic necessary quota-carriers Rob likely strategy the a continuing to this assess After two As is in growth. premised of aggressive overextend revenue increase accelerate view on pace an we the market, P&L. increasingly same expensive that our quarters that at

strategic we XXX key third the reaching scalable opportunity quarter We as total growth As reported of to more the increase see of quota-carriers, and platform our since partners. metric tapered hiring a XX, foundations of last of accelerate XX the result, in on leverage business, of that a call. earnings a we February two and count innovations on focuses an

and for lines healthcare. and platform extended already AI such communication customer have assisted We beyond rails as service, the commerce serve business as new AI to our

gaining with our potential the established the and leading partner platforms. automation previously customer also partnerships and materially expanding for compelling strategic messaging clear best-in-class scalability is to strategic the and Tenfold unlocks technology increase that The network. of and of traction AI-driven are LivePerson's platform CRM and We experience VoiceBase and with go-to-market fit

In we go-to-market business AI our terms lines in platform, of new already healthcare. built in assisted have traction made

to platform. noted, was to range just LivePerson's COVID-XX. improve which philosophy we without built largest itself COVID-XX we have in an history our testing, the testing, closed been not opportunity technology opportunity to to possible would versatile attribute innovation-first we wide Rob a As and of deliver This and to deal relationships the healthcare unrelated access

moment for Before detailed outlook financial that take a providing I'd themes altered XXXX. few to a on a update, macro like to our elaborate have

that total to the Gainshare quarters, the of First, and to of as quarter, interest type previously a societal cases discussed balanced revenue, improvement home trends of specific hold a experiences. in expected including effectiveness, severe attribute purchases fourth less vaccine the we Gainshare revenue. space, the in approximately is XX% shopping at we In We commerce pandemic. general variants specifically in more to prior trends portfolio, pandemic observed living which and by physical COVID-XX normalize use driven in in-store and began primarily acceptance these frequency within

expect As point This change pre-pandemic and to revenue XX% reduction of it revenue the was shift revenue in committed a consumer behavior, wins its in in in to be fourth of XX% EMEA Gainshare to result, we business only levels. X platform to of strategy, several to Gainshare total to of approximately usage The and domain the total of with Gainshare growth in XX% translates us Gainshare a clear expand and percentage revenue into XXXX XXXX. prior has quarter, logo now recurring XX% the enabled X alone value convert relative in the is revenue expectations. contractually automation still APAC. new particularly Xx globally the revenue Despite

also to policies from employees. uncertainty, ago, looked few U.S. moments As in test quarter, but relate in they Court when view employers managing testing I rapidly and reversed mandatory shifted, the January responsibilities government to mandate. the as third second XXXX a the to testing like of virtual a particularly OSHA's this down alluded struck the Supreme In pandemic have

Note other outlook limited result, use testing growth expectations. with As a point than never new testing, revenue percentage we to translates relative assisted do XXXX, This closed relationship viewed the COVID-XX cases. prior we AI Citi. in close renewed testing reduction logos we for approximately not deals that in as or to a X to strategic expect COVID-XX XXXX new our to

new on figures view at Cloud in personalizing a an of access for five would in vital sits scale, to the XXXX technology avoid revolutionize, From next healthcare. testing we in the over committed impact far that preferred broader essentially as top is The that that growth, of impact Conversational worth for COVID-XX revenue now development revenue and we short-term. foundation point, the is scalably and the funded testing data the negative exciting is developed eight that's we the promises the vantage inherently serving that to years. and our vertical to While have platform scope healthcare

revenue the to XX% revenue, hosted year-over-year, year-over-year XX% segment software BXB fourth grew perspective, our XX%. grew international quarter Professional Turning XX% while reporting total year-over-year. grew consumer from a grew geographic services grew Within grew segments. revenue revenue XX% and year-over-year, and XX%. From U.S. revenue

relationships existing We with continued retain our and both to grow brands.

fourth was figure quarter that extending the consecutive revenue with to expansion. Total or our expansion Conversational of base primarily within range. fourth this key in retention retention on this with $XXX,XXX, which up were Cloud the to year-over-year. XX% seven, in target earlier, theme top our again, signed range per XX% quarter, partnerships marking XXth XXX% billable volume As the in was many customer a in XX% base. Consistent seven theme, XX% of customers. exceptional four XXXX. Rob volume sustained driven long-standing once Messaging above Average revenue deals was quarter revenue in We was increased year-over-year of was shared up year-over-year. the messaging an our AI-powered by in increased XXX%,

growth growth, financial revenue and especially of healthcare. services continue terms vertical and see usage accelerating in and retail moderated, per In trends to while we

door messaging unified wrapping in By to agent customer CRM deploy, systems. acquisitions, dominant contributions experience for As brands delivery rapidly the AI VoiceBase a and and strategic the that to can the the experience from to with capabilities thanks voice. relationships deep addition are in for these IT new Tenfold new opening into integrations of

are revenue accelerate growth. positioned scalably to well We

is in in a EMEA. team e-botX expanding fourth strategic territory in meaningfully double-digit share In addition, highly the market growth with Germany, new wins logo for the quarter, our

the again loss EBITDA earlier. discussed the that to I improvement our million, strategy in Moving P&L. shift improvement was relative our a reflects $XX.X go-to-market to was $X.X of guidance. quarter of which down the midpoint the million Adjusted This previous fourth investment in

cash, third million terms quarter, which In the equivalent of of of balance the on investments. followed was we fourth from $XXX a decrease by go-to-market with sheet, closed $XXX quarter driven activities by our cash and the cash primarily M&A million

points shopping the guidance, policy our incremental short-term evolving and our with in testing XX to million expect our Gainshare revenue XXXX, Accordingly, expectations. EBITDA to X%. growth full-year for COVID-XX X.X% guidance When the $XXX.X margin XX% growth on relative have a to prior fewer the loss negative of behavior consumer a $XX on impact or zero and XXXX. environment, million is quota-carrying revenue for revenue macro to is XX% terms million growth, on approximately XXXX percentage reps, government to for our year-over-year adjusted our business especially range In coupled we in is range aggregate impact to in or of $XXX.X

million As XX.X%. loss guidance to or for or our And $XXX.X quarter to year-over-year XX% $XX.X of to XXXX, the quarter, a for margin first guidance range to a negative our $XXX.X million revenue million $XX.X first growth. of adjusted negative in for of is XX.X% range million there's XX.X% EBITDA

Before I'd like taking themes questions, to summarize XXXX. strategic for several

and proceed capture data We into and as acquisitions, voice. of are year-over-year top and of and more vertical Conversational profit. innovative can with that to to also reach of agent personalized on we usage have foundation experience we've top messaging built are have our healthcare such addition to generation use and deep goals AI a combined the rapid With and These deliver Through and with expansion acceleration. leveraged optimally to operator, diversified will integration strategic for verticals existing in new opportunities growth voice, us messaging platform end, that balance with growth necessary largest go-to-market the in with the that, through solid questions. To we to on capabilities Curiously new ready AI. and we've long-term profit acquisitions partnerships voice, unified this tier a Human deliver digital our Cloud focused signed deal integrations strategy enable driving aperture growth scalable to an widen AI long-standing recent our for brands to healthcare the history cases, our we leverage, sustainably experiences. scale And

Operator

Thank [Operator be conducting you. we Evercore. proceed Please our question-and-answer session. Peter is line And question with question. At Instructions] this first with of your coming the a Levine from will time,

Peter Levine

Great. taking Thanks for my question.

us guide with exit confidently rate months XXXX, of an growth and growth three for initial So gave ago, you an XX%. XX%

of highlighted chopping some the of You that are XX% off or now of the kind million of kind headwinds guide. $XX

start or months? past then did against So did when know, had, opportunities to all the a competitors from couple rate to close rates mean, all this just you your grid curious second, And the head? of I did change at over coming

Robert LoCascio

and market, Part especially impacting our say Peter. best traditional that start we problems some didn't hiring to not is I and a as with Hey, our long-term quota to right very of during guide that fourth of primary third scale that It quota-carriers to outlook today's were new an us and of evaluating there especially lose also conducive path that became factors extremely context. sight scalable value our we I'll plan. to time a would to three pure carriers quota-carrying profit first the XXXX. clear want we quarter, for approach when recap, ambitions. many the scalability, to and that wouldn't during well. growth, that tends to body and the reassess And path In expensive In be thrown began to described. it's growth. is profitable

extends see XX be So factors, points But the do you are to Gainshare the percentage scale. business sustainable to medicine business emphasize what suddenly in forward. off margins I reduction And AI scalable brings And consumer Again, which the the reiterate COVID-XX healthcare government to policy. I collectively beyond well going behavior these deal into precision the that through We and built we assisted to change better one and growth. outlook. revenue our year-over-year on more more transformed want big testing, shopping rightly itself for recited are. didn't that this cut and growth at we and contributors of there COVID-XX want play, testing a enable to COVID-XX in really leverage that as opportunities were those behavior, And wasn't portfolio expect done. long-term

cross-sell think technology to and just we signing go-to-market We customer. as the And give beginning also described will mutual including our expanding VoiceBase in motion. are us with the remarks and go-to-market eight-figure with effectively an partnerships leverage deal I Tenfold, more on a prepared

Peter Levine

And or the to maybe or is then maybe want that the with vendors to CPaaS going to voice, slowing just I of there's take quota-carrying platform indication and and around more of rep on that know obviously with an then… hiring, providing your that kind Just CCaaS follow-up, perhaps down digital a that chat? demand just not go enough somewhat customers know curious

Robert LoCascio

don't I think… No,

John Collins

Rob. ahead, Go

Robert LoCascio

it's don't that. about Yes. I think

are and end we looked where by hope the We of be as cash the that we in all kind that and this scaled. like, it the is the would place just working and with of a at the think felt a ramp year at to we of environment that I look to And we're lot year, going. XXX the at today. we're expense getting would where stop burn good of

like have some out. healthcare came the also – opportunities We other opportunity

it. to a a us and it for it opens big behind hoping deal We’re closed, that, with close opportunity up

of the right hiring last being be more – of And So acquisitions do filling year, really bunch it how that better is do did we to but then right our start something trough they just with the in demand, although mean, have run we versus have the doing rather back lot a shift at so EBITDA this hits of now it's we the company about new definitely then focus that and And this competition. is measured we so really to get face-to-face will logos and at, where we're measured we the in just we to because going new with would run of well. not people. we're expense – the now. I logo not We'd we're we expanding, And EBITDA events the on still environment. want the we're and company had as us seeing love much with the to doing a product, how the be in like propelled have we up. definitely just number base we like end feel are a what motion. We the move to especially into here. marketing And of

So that's as really the leadership better it's just felt be happening what's in everything today, just but to market. what happening we with team, prudent that's a

John Collins

That's in target you right, question rates, we range in there. the to throughout rates solid the to line a what quarter consecutive net Again, had seen were I'd our would that all just response with I in close underline Rob. expansion XXXX. Peter, point renewal base retention the and within we've figure that cited XXth

Peter Levine

questions. my for you taking Thank

Operator

you. Thank

next the proceed with of questions. line with is your Enders KeyBanc. Steve question from Our Please

Steve Enders

more question. that is like I in what expected to And kind Great. guess, the sounds you've seems right. XQ. of It than Hi. mean this, a way slowdown frame to the it? there led Is it I'm environment right like want maybe I for happening interpreting hiring difficult there. taking I clarify, just the of Thanks kind to that is

Robert LoCascio

in Yes. successful. environment people the an them things The and and that it's basically salaries, there's on – company a going on hiring rather there's crazy would make we – on we focus have on the right at focus inflation now who are – definitely and people

do we focus feel XXX, now and that's we what So here. to And trying that's let's on right enough like got we're successful. really making them

Steve Enders

voice a just in strategy changing partner terms about in with the of some partner area the How go-to-market solutions. I healthcare And that does building that for How strategy that, got top as other of and the shift after then go want about new in newer kind I XXXX. and go-to-market how just guess, the investments to of on those is is Okay, cross-sell some there of then on talking changing sense of the think That's or the out end better And AI-assisted the kind go-to-market it. channels. this those helpful. that also you strategy? to shift? you're investment opportunity I of get is guess also, of

Robert LoCascio

Yes.

start with a all we our of there's I'll they sell, we – can are much which in great, can ourselves partner consoles our First, and the one systems deep acquisitions embed a voice, of Tenfold, and in especially the really agent CRM this a we did embed CR and that and inside very technology is way. – are very

than CRM did partner stronger strategy players things and like had even and So a that. with they we really like

them. seeing there we've we're good traction and So cross-sell with then opportunities had some really

So I good like we acquisitions. feel did

Now we're and Once and a our we're guys, that money on can again, going make integrate way voice voice to integrating AI game going we power AI. it's spent want which vision, in to sure fair them is technically, that those of we a them get changing and the amount on of we well. the

testing companies about our lives. tests things software, check have dollars of don't testing we don't We're these access testing and the The of and healthcare broader in we And they're just companies And vision probably enabled – most this to a last can all is second these the to to two bunch a billions cancer that, people maybe get really tests. way platform. part business know, a all more of all now good not we COVID in COVID on us to around and went – have into What billions years. build sorts in that. that found of good is world us delivering the the a way of at have also from sorts that testing deliver all comprehensive other to

And saw healthcare wider could broader. a to on COVID testing we be for five-year deal – one, and really large to is so eight-figure are sign to build applied able platform, an a our what we which opportunity, very we deliver a something deal,

And customer going big it. I obviously the really So about engagement behind vertical think aggressively, we're vertical excited with can this as after revenue it we're be as and that. very

engagement. of we're customer our on second our And macro of things. things And other excited to we is revenue conversational behind always it, platform we and on very some it that this about it's continue a can is don't vision other it's happy because to I I of it though an thing a real do part just really had We're it built a going wasn't side. applying and with we're big platform has But what's And So exciting for it. things, is AI even And our important not business. the to to that focusing know, it. the apply thing. think

like shareholders, that a for strong think now I on option an second business that's it. have opportunity has business core a and to revenue very actually an So it's behind real

Steve Enders

Okay. That's helpful.

any with a there? Just just to decline quarter-over-quarter for that's there Gainshare John, leading happening quick RPO Is here. is dynamic What down clarification here? is

John Collins

slightly was RPO say, down. would I Yes.

it's processes I up think customers. it's about X% extended large renewal several a this quarter-to-quarter, is part XX% just And function with in year-over-year. of

upon improve would So signing that expand those deals definitely going we've metric in the done quarter with just or coupled that forward deal eight-figure

Steve Enders

taking for Okay. the Perfect. Thanks questions.

Operator

you. Thank

Our of with next Van Please the your Craig-Hallum. question line with from proceed question. Jeff is Rhee

Jeffrey Van Rhee

Tenfold, did on XXXX VoiceBase Several and and for for QX I in contribute me, they are what assuming what the Okay. the you numbers? guess,

Robert LoCascio

Yes. for really to – that of And though I turning percentage in only terms those points. QX, contribution at XXXX, want emphasize assets. just we're to the technology in of we're partnership on the – single full-year Jeff, then looking in mid-to-low and integrating single-digit what terms low digits those beginning regard with capabilities. it’s But contribution

And choice eight-figure workspace. mutual with adds that desktop bring an we a whether platform and is deal the automation signed that's leverage be help ServiceNow customer, within not those we acquired within customer. Salesforce, the assets I newly should can LivePerson to AI highlighted, with of of value for value work that a go-to-market point motion to limiting real they anywhere. which Microsoft, we Messaging, a the cetera, get our the As who et consumable those leverage of experience only the our by think LivePerson

up opportunities joint distribution, only innovation new opens beginning there. this for product So just We're scale. and we think general

Jeffrey Van Rhee

QX, Let of but that XXXX? for for Low-to-single me year right. I just make mid-to-low sure the single for got all

Robert LoCascio

Correct.

Jeffrey Van Rhee

you that. you're Maybe I'm assuming two, purchase hearing combination, $XXX about XXXX? just if I'm $X – for you could And talking, right, I was I mean, price. believe the million million expand the on

Robert LoCascio

No.

tied base. the earn-out. contingent total And consideration to revenue So remember substantial percentage to a then our sum regard contribution revenue that is point to with price, purchase

Jeffrey Van Rhee

Okay. All right.

XX-ish, can there. and call So the it math I do

helpful. That's Okay.

at I take XX% So know, if XX, think we're to the in I that looking XXXX guide, don't then, going XXX August from roughly, out, organic in rep now. embedded and the counts I

– understand get change messaging is get sort but shopping data COVID how happening. is every around I dramatic in get the So I point behavior, I testing, the XX the of sort of guess growth. mean, virtually me help

So goes on? loss questions, is desperately there the to other more is of there here? needed of clarity I kind this some guess competitive just going

John Collins

rates we is expansions again, then moment. close of I good not of are of conservative renewal I here. We heads that, XXXX, we And are there strong, mean lot have line an to lot by with strong. be and in to at don't of need conservatism No, the ramp. And hired a a reasons are strong, think rates element course,

And so year think some this year will build and integrations sources year scalable to out, but on years really and And this that's profitable revenue the and for growth. focused lot take sources of growth, place revenue of we're I this time again, to holds come. take that a promise of will

Jeffrey Van Rhee

Yes.

for Owens? that mean What a I I the the for that does direction On he to organization? does comeback. think What departed, of does clarity. side, just obviously sales mean mentioned the he's more Manlio, Tony little revisit, What you mean, just mean? that sales

Robert LoCascio

Yes.

seen. out to go the all someone issue come find the So sales and but one had you've was into growth turning organization. that real the marketing else, taking And Manlio personal who a to and he he and over that architected company. all consultant back was the activity able and a is luckily Manlio, he the causes last back. Tony year to is

ago couple a a the to but would just which last him he's it's has to him model, everything we back weeks and we us. people and and he continue showed We get over excited he's not staffing job. to he didn't is And So to the leverageable about executing, focused him. continuing got help such he he he of and did He will back a in great think agreement, where fine. knows culturally a team three and of aligned traditional as need have company He's we're on, consultant on and very a in came he's have back. we growth issues, excited from is some stepped over ton of Tony on we're the hiring consulting and him. years different a way I said, personal

Jeffrey Van Rhee

what COVID Okay. it, in was dollars? a percent for One testing I if XXXX, revenues as sneak last, of or it could

John Collins

terms Jeff? COVID the of full-year, In testing for

Jeffrey Van Rhee

Yes.

John Collins

low Yes. kind been percentage of again. That single-digit point would've mid to

Jeffrey Van Rhee

Thank my great. taking for you questions. Okay,

Robert LoCascio

Jeff. Thanks,

Operator

you. Thank

Our next proceed Jefferies. with Samana question your question. comes with from Samad Please the line of

Samad Samana

now good Hi, so follow-ups go ramping evening. Who that was a the XXX, in logic the of that some zoom it August confused And you happen broke I headcount earnings work. at and in significantly you and this didn't making what wanted that late long and decision maybe and between said of guys XXXX double up late now, just few in original then. was decision of made the in as been and are have again, for traditional XXXX, to mean, the XQ, asked. August. that reps it I quota-carrying to XXX. announced model down? guess, on That when ago, it's I I'm that the about now call the were doesn't both to couple time decided company reps A the ago to they to want questions August you've not where XXX industrial to I out. years

Robert LoCascio

previous it to do what not think back now, business like right that the we risk didn't just we be it of it. just just and on we came Manlio looked that is cost of – want I and extraordinary. the the Well, worth would the it was there. at that And

it originally conversational opportunities, offering commerce going the up that hire platform other It's actually of ended with We We mid-market. a We built business experiences the small plan have developing We that. all connects can mid-market click. Shopify big system. to And and and it bunch previous actually doesn't mid-market especially require that was a to mid-markets built take and we're a human-based a humans. in over one do year. automate not to team a the new

right actually We So into there now. that. built after of a fair platform don't to We was going amount headcount a headcount mid-market. that need go

last don't a even that. service reps big with that the have XXX, that And reps, part need mid-market we that, a this to market platform. business amount months. of in it's though that's already We already We're do small would've the fair platform called, So been but of about XXX for and on to Maven. we're customers of couple the going

felt and I environment and the that was to in we. we here, the neither shareholders by think we way we're better who today. that's a did If $XXX previous where everything went we a person in be So going looking don't prudent that it. burn just planned cash we at million do think was ahead could to want do that's and don't

us the enables So then We is to also service And resources. use them. we to have technology feel that in market markets. a also better a healthcare something like we way to play good use to service a do of

on triple in risk money think can that that why can of So the and way capital a double, one we area of returns. that different down better in when get type invest put burning we

looking We we have a the portfolio business. that at as run we're

really So that's it.

So also at to hire expensive headcount, it's but yes, looked just an today the we into. in environment thing, XXXX, same

other deploy areas. So in we're going to that capital

Samad Samana

kind just of that point. resonated the quarter think maybe a quarters, of follow-up, much pivot it go the about is few Understood. clearly I for And kind back more this think if it then growth investing I about last the and And profitable growth. seemed

you're growth becoming So against should maybe expand that we about? I talking to growth free what this EBITDA think the couple next is? but how you positive in of growing or year the company maybe profitable profitable should given measure And to on you've cash we years? Just the know positive XXXX, guidance about start flow can for

John Collins

Yes. the acquisitions meaning did just the on context the the maybe that fourth and rest we fully how that the the made we XXXX flow we in there. I'll the to quarter – of progress little hiring first and and how despite a quarter do cost down take and expect provide the Samad of loaded quarter, given quarter

We will that quarter the quarter third thereafter, loss each the quarter. in a first turning large positive in fourth quarter expect and significantly will improve

is generation, an cash XXXX. free but don't number cash of flow generation. intention forward of large expect In look ours XXXX, that terms in we into I a as

Samad Samana

you. Thank

John Collins

course, and is we our go-to-market XX of just business. scalable part also the that that cleaner, put on the more a Rule think we of just this of I we're with way XXXX. quarters over manage analysis first investments add up did XXXX that to Again, would of half We the that's

Samad Samana

my questions. Thank you taking you. I appreciate

Operator

comes next question. line MacDonald Our question from Ryan your & of Needham with Company. proceed the Please with

Ryan MacDonald

there? providers in to And sort confident then that very are platform one Thanks. into updated sell more. Are bit the of vendors sort intending accounting then taking to to AI two, test vertical, Rob, this of offer area? data are a for using testing R&D, for you question. of it's new just intending seen going drive to the opportunity help the that medicine then combine into the of my the are are sort value or that investments healthcare profitability understand add you better sort we've the and appropriately you're Thanks taking us this to and a me with completely Hi. emergence let for, yourself little but precision go-to-market you for to of that data that outcomes. the patient – outlook testing obviously trying are Obviously new AI go

Robert LoCascio

Yes.

built we're funding free definitely – we out the we of got our COVID-XX year of think covering because for this through kind it I investments build.

piled our of we're which the all you're healthcare we absolutely to and body going What's into comes our Cloud, this a world building uncover through back that, on the last platform the of we I but body off we're to money enter right. in is made, years, So about data two mean, that the Conversational happening top testing.

obviously to going people are to to And that data to make is And tests. so up, this single way Health. creating then test so of way we a not unified one testing But we're those partnering take get And BELLA did to data what the that's has companies. get tests, with we a that be platform. testing got really a on there's part with

that expertise real we gained there. over have we months so XX And

something who about right individual The who people the humans. in people You're that's each and to obviously medicine, precision blood right. to next – experiences. conversational and and for of testing data It see CEOs precision expensive, money. AI too being improve which very to able because step you're called now at there's through and doesn't and scale that is is through that it's a have based biggest is then testing is scale that how going uses that we mostly athletes that guidance medicine to providing way tell that for area to and genomics But us – lives their and problem an believe with on look The basis. individual

the on to on bring platform. single seeing testing, parts the ability data two testing a do together, we're the So those to

Like did So really which kind business. I down technology, into know I I've because we're personal testing to go own spent well up disrupt testing okay, forward it's time a real person? really think spent to COVID time to has the really very to And legs this their lot companies you it. We've sustainable, something and we their off. move COVID and a getting as revenues got beyond the years are we move we with of many with the showed now and the felt going and and to body think that people into with and I learned market. recommendations the and it's very I can data body what two as secondly of right them building is throws the It's said,

can in believe on it very, the we'll an work. their I associated from and be same also platform. But this we I corporates I with that, it's the see our year, us, that with go this work that is whole way patients very opportunity relied build offering, into on revenue our and see in how a also patients this they employees a with this. We doing there. associated a revenue last back platform there's large there's some then mostly world partner it back way to to clients our with for corporate so. drive on The goes to develop big think, with. thing with us and So we build, And this worked bring to potential to And bringing this. that and one bank it's there'll guess,

I So real also benefit it'll think there. some have

Ryan MacDonald

on John Helpful. the Maybe just for commentary. Gainshare a follow-up

said, here XX% of purchasing or excess just of push traffic between – you and you mean because patterns. XXXX So consumer has inbound that you naturally and traffic customers decided take to revolving to lighter, retention being but revenue actually expecting Is they churn customer forward? are we strong need XX% shift sort off don't moving remained should that seeing to that for – LivePerson are to volumes

John Collins

definitely the former. It's No.

very retention portfolio. customer We the have a Gainshare within strong

of And That's that I though usage that We home platform. this improvement the even a Gainshare large customer portfolio. trends has The would still shopping retailer. pre-pandemic in have customer phase. are its the cited affecting I note one Xx predominantly

there's to still from aside customer this would grow. add growth that say not it's in offering. the clearly, business I Gainshare continues is not So the Gainshare while also customer treating value or caused trends these that have slowdown, to the case that the

automation, revenue the logos revenue first the time. Given variable of signed for new strong transformed the proposition internationally into recurring value we've the majority of and

the So we're very commerce. actually to the – shift is with despite specific the and this of area recurring revenue headwind given business stronger, getting strong

Ryan MacDonald

Thanks for the color.

Operator

you. Thank

question from William question. next Arjun with is Blair. Please Our the with Bhatia your proceed of line

Chris Madison

that a is kind dig Thanks last to get some kind ARPU wanted and year. or that a messaging? that So a expansion it coming is it's Arjun. volume taking primarily of the relative is the This sense between, of to a bit shift chat. little driven for from you've the Chris composition for from messaging follow-up, Hi. on in over I chat by the just premium wanted I question. of is understand growth on of price seen to

for is us difference So what there? a give pricing could you sense Thanks. the

John Collins

Sure.

function So ARPU largest with is customers. of definitely volume a expansions our

automation cases, of the use New are the expansions reason and for drivers increase sort continued in main the key ARPU. volume those of

and over chat, the of terms platform little of XX% In chat into on shifted messaging. there's still we've very it

So platform of there's ARPU little effect from that area the on today.

Chris Madison

to Got it'll of come curious touch to what from a a far, that so XXXX customers for in if then volume, you're monetizing hearing and on if you've from of and Thank your beta any around strategy on more revenue be kind contribution unit voice? you. there's assumption it. later – and to any shift Have I of you me coming just bit, Thank And offering, to this gears know the little year. then the you. mentioned got just you voice into market a just

Robert LoCascio

Yes.

we're have really at the automating voice voice the voice the into between beta we see do integrations yet. agent an an contribution low we mean, the that's messages value. – So It'll quality it's be because and demand. up having Tenfold And around gives plus towards definitely to very coming us integrated to we we But lot product not and of a look integrated I because year, on going out half high there second We voice analytics the be at at build it platform. is then is automate VoiceBase delivering and also messaging There's backend and to and calls know the we're experience VoiceBase. at going to of quality shortly. went desktop. the quality of the like

where conservative. some a we're We're and just we're we lot upside even company. be we reps a are be we just the conservative. lot going in, upside we just focused then is what and we need on start have a more ourselves with we out overextend put be But lot figured how be there, year now. of potential to contribution tempered thing about put we – haven't but though – So We the of reps ramp at today have there's we feel of we'll just there. a going to being the like don't to right run it's just Same and want the it just to there's we're like opportunities, but what doing

Chris Madison

Great. Thank you for taking my questions.

Robert LoCascio

Thank you.

Operator

of comes Zach from Riley. question Please the next Our your with with B. Cummins question. line proceed

Zachary Cummins

kind for Thanks just commentary. questions. following my your on Hi. And of up Yes. last taking

that recently terms In I onboarded, even expectation of reps get really from sort there towards you've you're to contribution the is of half the this mean, any a them going back year? of that

Robert LoCascio

mean, of be back original the I plan the year. that the would

So for as let's – group that we just just the and support people a to it's a those not have we’re By of thought okay, reps about lot. who the there's supporting reps, enablement. it's like, way,

amount For of flow, a people there's lead them. that support huge

So we trying to are accelerate that.

faster, can spend successful. and every We people. want those let's take the felt quotas takes we make and to going one don't that accelerate And time heroes. hiring them of to of their to we more successful. team. out get them see be them. leadership then to focus is goal the And reps we It want if We Our being we're we ones have can if time

have And product line now just in in mid-market on let's Once there. said, a put pause bit We need mid-market little so, mid-market. business. the the – to the of a again, we humans in small don't just we sell

more a after them with lose that's don't making the really enterprise We to we'll work. to successful. have product to focus want that automated. We make on reps one now We But them. the go just want

Zachary Cummins

you that with transitioning you've can John, CPI made on licenses the enterprise from type an And update Understood. to contracts? of progress give

John Collins

for essentially converted We Yes. our goal XXXX. We XX%. reached

original that very XX% XX% later our goal down was and I year. brought in we the think given to

in the So line original with we're right target.

note would was VoiceBase expansion with I joint these, eight-figure the of customer. the One

in will in upsell to to with ability very what's the come a the remainder to strong. conversions of you renewals give to during for remains these again come these Most of be XXXX XXXX. So some sense still

Zachary Cummins

ability mean partner final relationships reps. more to is expand question and not with side hiring leaning How about now profitable partnerships? I with major completely And of for into Understood. of just thinking around sales partners direct those some and more upon the are growth me of just kind you this,

John Collins

leadership got them that. and do with we Tenfold, really reasons to wanted it's is selling think is most they've that, to I there the especially of of one they over their good the bring into company –

doing and a interesting has people make – about of that, the we a in be like So they've have announcements system all quarter lot business next with for the got so there'll integrations I us the with they BPO real providers. And integrators think CRM like major actually and them. players. we'll more Gainshare stuff or Tenfold, bunch some also But got

platform more part we so think and acceleration our got had they're We they've should see We're I it a And company. of more strategy. BPOs, – different there. they've more because got SIs so already seeing

Zachary Cummins

Understood. taking my for questions. Well, thanks

John Collins

Thank you.

Operator

proceed the Siti Please Panigrahi of from last And question question. with line Mizuho. your with Thank you. is

Alexander Kim

gaining Alex ask it on I that enterprise And what just This payment Kim my for feedback improved you well. payment Siti wanted payment taking follow the current a for base. solution? this Thanks I been do any features is Panigrahi. can solution up traction? are Hi. plan question. customer solution? been to be as And your Has things implementing new of what's about to from have on a behalf

Robert LoCascio

Yes.

that's in everything, get tokenizing you commerce one and the we're Maven and search, market, tightly on in is catalog line. In it's – mid-market rails, merchants. really all have click, big so payment payment get product all there. integrated for the out commerce you automatically interesting. for including the platform It's – that So we into conversational And it's actually the the that This offering. all mid-market, Shopify

going there's is a be I lot sits are to the because fee it, volume, we which it. have a it's for of customers harder inside we And coming integrate channel, then so in well. like, unit bit And a the usage think, it also of little enterprise It's a messaging there. then – just going get to through our and enterprise it

What's integrates gateways. payment stuff payment So the about their really using the great it's it with that Shopify rails. is Shopify

integrates go it the our all everything, once just be Maven to want and ahead you So customer, payment automatically Shopifys. a and say, you payment with system

excited a I volume, And through of see about, where we're to so think, lot that's come quite we're it. but going

Alexander Kim

how And for is your much today TPV there payment solution?

Robert LoCascio

the don't data that. data. on I have the I don't have

Alexander Kim

current worries. the No core products cross-sell how And uplift those VoiceBase product, your versus are those Tenfold in products do see much product Okay. your and margins of what you the regarding LivePerson when gross product? versus and you ASP LivePerson

John Collins

Hey. This John. is

of stages base. able we'll upon we the expand year. too within cross-selling it's I progress the given specific something provide through to the But early think I installed metrics as be think VoiceBase and very early such Tenfold to that's

Alexander Kim

margins of product are LivePerson versus what the the And like gross current it. core LivePerson or Got products those product? the

John Collins

Yes. ours, our They're comparable so very gross businesses to like leveraged margins.

Alexander Kim

Got it. Okay. Thank you for answering.

Operator

for I'll closing end for Rob call today. remarks. Thank you. And the back question-and-answer time, the this LoCascio to now we've of hand reached our At session

Robert LoCascio

Thank you, operator.

the but really do that about healthcare want vertical integrations to just I the how we and And business. this we've to in been summarize XXXX, off last importantly, is, want about our get which capabilities. bringing leverage Tenfold, overall is again, We've voice just AI look more in. what really to at core VoiceBase do our then thinking we're we of So got of

go think largest definitely in we to ability I quite deeper it's do doing the But something is have. Now an the vertical it, the what we're big third option to in beyond core. even

very So how the this drive we prudent the just business, been towards obviously environment we about everybody, been in have level changed, we're that overextend be don't next leverage there's at point growth the to some foundational a strong thinking but look we've it's changes a think see. profitability and has to year – and like comes when year, of and ourselves to this to it growth prepare for going

do uncertainty hard everyone work the world. work thank a employees – want for I lot all there's the we're work thank of this year and all the And that, with and the in did all to hard So the year. obviously going last to and all we

you safe. So that, you. Bye. See with be thank next And everyone just quarter.

Operator

today's This will conference. conclude

at disconnect Thank your You participation. for your may lines time. you this

LivePerson (LPSN) 25 Feb 222021 Q4 Earnings call transcript