LPSN - Earnings call 2 2023 | LivePerson, Inc.

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Good afternoon, ladies and gentlemen. Thank you for standing by. Welcome to LivePerson's Second Quarter 2023 Earnings Conference Call. My name is Shamali, and I will be your conference operator today. [Operator Instructions] As a reminder, this conference is being recorded. to conference like Mr. over now would turn call the to I Cooper, Investor of Vice Chad President Relations. Senior

Chad Cooper

you, Thank Shamali.

XXXX, subject Joining today, me CFO. based statements and will and in John filed and today's results on in to other time statements. LivePerson's to expectations any as during SEC. conference to on from make Collins, August time the may differ We LoCascio, various factors, the -- as and this and future are uncertainties. to assumptions Interim our call forward-looking be update well today risks Actual press XX-Ks, in materially statements statements, are XX-Qs current CEO including today's predictions, and during the call, obligation about are and today's as Please due forward-looking X, which that is those with note no of we release, Rob projections and made Founder; described These results. other comments call, assume to earnings reports

the highlights this will are Relations release. of call is slides, on discuss reconciliation financial turn A to financial measures. non-GAAP of release to section include quarter, website. the GAAP the in over we during press and the I LivePerson's Rob? today's which will earnings included call, Both for certain press that, the non-GAAP Also Investor supplemental available measures With Rob.

Robert LoCasaio

Thanks. Thank you, everyone.

I'd the to made leadership for John to quarter, the like today. discusses results our Before company announcement speak the

after search then, CEO. identify been CEO. XX at Board a next you're to the to And would this CEO my right ago, now is LivePerson be the than I we time LivePerson as make stepping years a year as that Since of underway search believes the month helm. of transition as If down progresses, role later the has aware, announced more

from the John during will serve finance LivePerson's CFO ongoing He benefit team this, also over support as this Collins as of and light to continue will of In take time. interim CEO.

through will On note, year-end on I to addition, adviser transition. into facilitate person of COO I basis. help an the special assure in you personal interim is to In recruited step John the to XXXX a assume smooth the he that right role a

growth from As platforms. moment, for company the that we continues ensuring hear shareholders. confident John products company's alongside in value you'll committed Indeed, AI launch profitable support drive to I'm will and a management execute enhance he new just and advance to generative strategy and John oversight, the active the our Board's with working as to

to drive turn continue know detail the possible. of a LivePerson, And to I'll that, for the call forefront to also make display As our every to what who exceptional I'd with of business and over they'll Thanks we our of discuss like founder the is and the industry, work quarter do passion I results. they outstanding into to on extend team second and day, John? LivePerson more John our their success. my at gratitude employees go

John Collins

Thanks, Rob.

quarter, I'd the I've continued I to and Rob and for alongside for years, he's and to company worked and Rob, look X over Before friend of acknowledge a his like personally, built thank and mentor, decades. forward elaborating incredible a the X a themes key he's the nearly support. take on last results moment been the to

by the the update, to and discussion business begin followed a financials. strategy with I'll Turning quarter. the of

generative, manually consumer accelerate to products significant efficiency, automating the are we launched generative provide for tail customers. time to intent. Last we Cloud. long intensive products AI-powered on the also automation agent These to of Conversational and quarter, enable previously uplook set a value to expansive of an Using across labor, operate

with opening channel, meaningfully market. The extended which the serviceable AI, This IDR currently future agents voice those approximately contact XX% an synchronous our focus as to door taking expands incumbent the place not automation voice intent operations, voice also We voice trapped but traditional calls, customer instead voice brands. consumers the AI, significantly including the on and in between automation to shift which and see to of into launched center compete needs conversations solutions, of LivePerson's is of flow, we service. which the AI-powered products of to the

opposed the our products brands, are highest for generative seen and in a began the quarter, by in support top product top quarter these automations with to usage of Similarly, indicators and More starting an limitless intent, virtually XX leverage of -- of the indicators generally, automation we relative second for we top as range which AI, encouraging, a range wider years. to a for the increase are enterprise enterprise using Overall, generative handcrafted XX% pipeline early early brands recent where AI to enhanced of in new of fourth that that the rate years. and In voice of experimented or the past driving started we've voice of third. was expansion these XX address interactions XX% now AI.

that can to automate conversational cloud This we up observed aggregate efficiently volume. an customers is well the estimated their above Our estimated today. on of XX% conversational XX% the

of high for from a within today's recurring revenue, us, level, expanding potential just that's base existing our opportunity at that's customers. market a So Xx

significantly for X-figure XX XX in renewals values new last logos, and As that sequentially, signed the which quarters. highest wins, customer new X expansions overall. and second of deals a logos value were in logo deals, quarter, noting It's all and deal XX X we were including the up of worth the new total

deals our in included media renewals multiple X X-figure the vertical. X-figure addition, deal and In

LivePerson banks large banking. expanded terms world U.S. in of Services, and internationally few has largest the clear and including past in our for become for and the it's that the platform we've of quarter. trends, logos In conversational base one the Financial of across won the new quarters, consistently the renewed choice Within second

suggests that complies services that with and banking contracts, financial that conversational. rapidly trend security retail messaging logo in-app These solutions represent a digital-first need multiyear onerous wins becoming information customers deliver is requirements. clear and All new in

In proactive automation. of every from scale. others, digital preexisting range and almost AI-powered these platform, true but solutions Amazon, and In our and Microsoft differentiated compliance framework they have including automation LivePerson see our commitments addition, case, to outcomes, and they importantly, business to Genesis, transformation best-in-class social, our messaging Salesforce, large process, a most companies of leverage partner the and demonstrated trusted security deliver expertise at and course, as

that to digital competitors first a in transformation, European social app, on banks. the power to for and Bank mentioned, Salesforce. investment large LivePerson other major in Digital and and even I Financial our a business wins the record both banks of of as a track web automation First pre-existing world, largest with in Pacific included Services XX one A messaging, company leading Fortune Genesis chose long list LivePerson based among outcomes delivering digital also power of better selected

revenue Global and captive insurance with in bank, Australia, services As XXX notable mentioned other X finance for financial companies, the company, including representing auto XX a upsells renewals life QX, X of a meaningful the renewals one largest Honda top strong in earlier, the of and Fortune expansion. largest our bank were XXX retail all retail Canadian again, Capital expansions, multiyear including and America, quarter,

with services America, AI, of in drive health notable second company X-figure have ACV quarter were industry highly automated North entertainment in conversational business and we a based for audio a adoption for and in a win is accelerating a care and outcomes. to large secure, renewal ability included positioned financial as proven an regulated they and needs industry. trusted, of The tangible our health are patient well to engagement. platform leading similar the Salesforce deals scheduling We Other care selected our

for We of conversations LivePerson for Marketplace, integrations also and hub of businesses that and of trusted with extend platform, built Medallia partners, We're apps at world's better debut LivePerson our to marketplace partners, working and the excited many to major us Cisco, which Marketplace an open even integrations businesses, LivePerson brands. our recently include Conversational ecosystem full top announced scale. directed others. capabilities AI The of to for this of a in by represents the powerful a an powers LivePerson array digital to unlock milestone cutting-edge empowers dynamic LivePerson Cloud that the potential the Adobe, launch conversations with more commitment introduce

to focus relative timing quarter accelerated positive certain to expenses, in XXXX. gainshare of our better-than-expected the and results. a expect In $XX.X spend rightsizing to of of loss half a Turning and the point Consistent that expectations execution cost guidance. in our BXB wind-down an adjusted occur from the result profit renewed inflection second plan, looking for expenses, of the was The led that and of our D&O. prior marketing reduction core, surpassing profitability with and still upside the of quarter, on free quarter, cloud million last lines, generated cash we the primarily EBITDA and to second and we restructuring the LivePerson's an the financial we the in and divestiture labor of variable the flow, guidance noncore business to structure, set

in we improved Health, an quarter of of above previously of driven revenue basis XXXX. for were our the potential and gross recurring total improved second revenue, XX%, sequentially also XXX XX% gainshare And was expenses. of $XXX future. our Total we position of was was Health financial Non-GAAP a in to payment also contingent the rights this payment revenue $XX Wild guidance. $XX.X which by for expectations. payment occur just earn-out labor million, million, which reduction by $XX Wild to a sale ahead our in accrued BXB for multiyear million which was for a certain the primarily of margin in if million midpoint Significantly, was in immediate exchange eliminating did points

revenue our hosted from revenue segments. the declined XX% declined to year-over-year, for software quarter, second reporting segment XX% total and BXB Within Turning year-over-year. from standard revenue

the testing, declined core quarter, wind primary while revenue revenue BXB hosted discussed of revenue. declines down gainshare COVID-XX these including for pandemic-driven business total lines, venture year-over-year. drivers variable recurring business last X% and grew changes, within X%, core As labor are noncore these Normalizing of the BXB

second year-over-year, of last quarter, consistent services did with contribute discussed services the [Clare which with in revenue XX% declined completion driven Professional expectations by JAV], the the the special quarter. not engagement

services a the professional geographic for slight JAV] a the of revenue periods, U.S. year-over-year, and On noncore have both declines, wind grew revenue XX% year-over-year. Excluding closer U.S. [Clare From was with to XX% revenue would down declined perspective, from business these year-over-year. revenue in international year-over-year declines X% driver primary declined in Again, international. lines. normalized basis, flat we the the seen

XXX%, range to retention expectations. up revenue sequentially, of Net consistent but was our with XXX% below target

based $XXX per to key We due in X% as metric million, we for metrics, this the the year-over-year in services measure retention using quarter. on BXB JAV]. of impact to total last discussed noncore continue revenue net the is to In quarter. expect which decreased we base expect RPO going sequential [Clare and customer revenue operating a professional declined to order their more average calculate business down provide of revenue revenue consistent the for of consistent Due improvement forward, the recurring primarily ARPC, third calculating on to and to net to wind meaningful only XX% retention core $XXX,XXX. lines with year-over-year completion revenue

BXB grew to based So ARPC year-over-year $XXXK. core second quarter, on XX% the recurring revenue, for

in I Before the change mix guidance, on want the address providing to revenue an the to third quarter. update expected

and we the recall, will in the that revenue because half recognize recognition to We now deferred expect was XXXX, in services review. revenue the further likely corresponding Wild As the suspended, may of reimbursement rendered you that quarter the quarter. will Health for review of Medicare in fourth pending revenue completed of we third attributable be the year, certain second

the Kusamba revenue, of maintaining this In quarter year. full range of narrowing in million, but range midpoint the $XXX for first excludes XXXX $XXX Note to million $XXX terms million. contribution the total year of guidance, to we from that this million $X.X are

which we total, core, consistent discussed recurring remains for revenue BXB last to XX% quarter. As the with approximately we be of what expect

first range new revenue the Inclusive $XXX Kusamba the million $XXX in total million. of was quarter, to contribution the for

increase range million. of $XX.X For year a which at represents $X the to of million in midpoint million over prior or adjusted a the million are to EBITDA 'XX, guidance full we midpoint, $XX.X $XX $XX guidance raising million

to million, to Medicare and revenue As for revenues reimbursements relates core million of moment total related BXB revenue the core be we in approximately just sequential are guiding of for $XX a range revenue. XX% mentioned the anticipated $XXX expect a of The revenue recurring to the quarter, to that ago. third percentage we decline BXB recurring I

quarter, of a are a or guiding EBITDA, million to third of range midpoint $XX.X adjusted million. we million $X.X $X.X to for As the in

the for base, service profitable the pool our better a automation AI-powered across conclude, automation early contact which range line expand virtually to approximately intent. With brands automation market To conversations position developments, significantly Access robust in rightsized significant that, AI, we become us to with extensive coupled to and the center, our generative at growth. place indications a And omnichannel conversations strength structure puts consumers. voice when conversational of a cloud, access cost launched customer can operator, adoption. of service open outcomes LivePerson enterprise time enhancements Q&A. consumer of and for our with an and customer address our limitless AI of have voice taking XX% has and showing between are platform of These gained business traditional accelerate let's delivering

Operator

[Operator with of question from first Daniel Securities. Our Mizuho Instructions] line the comes Wang

Daniel Wang

provide just the about perhaps restructuring earn-out forward, how conversations you some the about provision? the you're Health color Can business in and around Wild some thinking detail going

John Collins

we growth mind, to regulated line in Wild expect Health business some strong we though, we in have highly growth. expect Health, nature shared continue owing observed of lines, last quarter Keep We time care. Wild to health Sure. and increased certain for the strong that

expect for business we strong again, However, in growth XXXX. the

to our that redundant past account within the consolidated relates go-to-market, we it and in As restructuring customer quarters success organization. namely and reps organizations

more now so And a flow streamlined there. have we

to of with as able capabilities course, product a saw of have the were gainshare some is And large our we of of expense labor new wind cost the legacy business. gainshare and to as And supporting, that to know, support generative was that well. necessary are reduce costs wound that products -- the savings the the amount of line. reduction side down we we the we majority to us of you addition, there where In business allowed going, down house which on tied

Daniel Wang

talk more of I just, maybe existing solutions can you And conversational on a it Okay. little relative to out guess makes unique one some and the there? AI -- on voice other AI bit

John Collins

for makes think readiness. enterprise for back-end place have for powerful is OpenAI honed more AI, deploy infrastructure again, all behind been that Yes. decades vast voice much contact up a over us, channel the LivePerson differentiates opening of that time LivePerson are installing taking powerful wider flows Voice tapping operation the that other today. the first of is than within to And conversations new the and where center it. automation from the for an integrations, AI I it ecosystem is what majority existing simply API a solution, what this the It's without

Operator

Jeff question comes Capital next the Van line our Craig-Hallum Rhee of And Group. from with

Jeff Van Rhee

revenue catch impact on Great, half I revenue? have what's the second then for the just to John, on several. Health, expected the up Wild refresh there

John Collins

but a would in to doubling hurry the where quarter, commentary I likely Jeff, was we prior and core lines still the time it's Wild said but number a expectation, say business. there's I Health's just been some would do, put out, there's there have haven't elongated. that to in We possible, work relative

Jeff Van Rhee

I didn't real Maybe it phrase well.

think had delayed you was much of half. I And to last -- was Medicare how I'm You it a Medicare there. in did recognition going come the just I asking revenue some just mentioned delayed revenue around the share was second refresher for that and year?

John Collins

any Yes. value didn't last We exact time. see

millions. However, say high we single-digit was did it

Jeff Van Rhee

High single.

involuntary terms work. affairs where churn just of terms the a us churn terms to in now give work, the in specifically we Helpful. sales of of the team, of the retention Okay. reps? sales versus reps, state just with sales are of And then And sales in

John Collins

at We've closer reps. I come down though, the [XX%] was ramped fully that to today level. to are add, from now, QX, have which XX steady and CX approximately staying would And approximately we're also that we

Operator

the Securities. line from question B. Zach next with Cummins Our comes of Riley

Zach Cummins

the in for now half adjusted occur updated were John, takes and that through and second delayed can there to the walk were from your the year? some puts of me view expected you expenses EBITDA,

John Collins

we look by roughly sure, the If numbers, Zach. first $XX we the million. beat Yes, just at million, half $XX

the that flowing and $X some of to transition. that, engineering, maybe tied timing of million million of we including course, to guide. increased to marketing in CEO more Of little of About the X and And range then through cloud product investments is new the a relates a more miscellaneous spend. and targeted have expenses,

So all when I in, the what remainder of I reasonable a guide for factor for is we think year. EBITDA end that adjusted the with up

Zach Cummins

just AI just you're channels mean existing talk one expand voice AI? about of then looking what's voice and terms strategy really the I your adoption with Is of there, drive strategy follow-up you in really of And customers? the the just it quick major Understood. to trying some into get approaching to can the door around go-to-market product. or how enterprises to

John Collins

more that's by we flow for think operations. available tooling incumbents more the than to synchronous shift is mindset to not that's the all And engagement. the currently -- solutions, unified the And messaging channel certainly. And has, that I recent what is are has a -- for consumer in think, again, think voice is towards value is but to encompassing for social in with a product prepared efficient incumbent compete industry best-in-class consolidation, Yes, I voice I the And LivePerson in remarks, AI largest the There customers of and said product messaging new demand our and launch. years certainly that and shifting there's accelerating. social the seeking the as voice automated voice, fastest more automation we've future. seen the a adoption channels interface, the trend the and where proposition AI

in really advantage to think enterprise that that addition I we the described earlier. readiness that's So

Operator

William [Operator next Instructions] Bhatia question the Our from comes Arjun of line Blair. with

Christopher Madison

is question. taking Chris Arjun. This for on Thanks for the

had sequentially is good MDR this think in an metric, to and that you the change? So improved if hear behind it's this what's the so, inflection point quarter. Do for

John Collins

revenue you extension? Sorry, referring to were net

Christopher Madison

Yes. right. That's

John Collins

Yes.

QX distraction. that we that's tied restructuring, were XXXX, there's a a services, We to, it's lot a just of addition trends course, our through. And think coming And to I course, momentum strong launch right? came of of of -- a showing in described, main of off the in vertical as financial out restructuring for I event. also increased product lot then, the of and are was

we're that side focused of we're on to going show I the other Now on through in that's that, the think execution, results. and

Christopher Madison

Got it. It's question. a segue nice a into

been your talk you've Financial or bit industries? sales some this in you for a about more some a are good finding the specific Is fit Services. or to initiative a naturally success focus seeing So of highly of in go-to-market due regulated the team,

John Collins

plays I largest that think but base mean, X, organic we seeing have of It's against, a among been one, traction executing with many, services the financial has for of years. we're strategies that mainstay we're across our service. go-to-market services and the course, is many I we many very customer the financial it's industries

of sufficient deploy. lot a regulated and for security industry it's think there's highly take seriously So also, kinds guardrails I the as this enterprise wants described, to on ensuring that focus And readiness that that we on opportunity products the there. of right we've information

Operator

concludes and reached question-and-answer end session, conference of have today's this the we call. And also the

You you for may participation. now your -- thank

your time. at disconnect now this lines You may

LivePerson (LPSN) 8 Aug 232023 Q2 Earnings call transcript