LPSN - Earnings call transcript Q2 2024

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Operator

Good afternoon, ladies and gentlemen. Thank you for standing by. Welcome to LivePerson's Second Quarter 2024 Earnings Conference Call. My name is Irene, 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 Perachio, Relations. Investor Director Jon of Senior Please go ahead.

Jon Perachio

Irene. you, Thank

risks Joining are me These assumptions during July on John today's statements expectations which call is John and and projections based subject and will forward-looking XXXX, and other Please XX, on are we current predictions, Collins, future uncertainties. Sabino, today, COO. note are call, as that results. to of today's about make and statements, statements CFO CEO; and our

Also Actual and to we described reports XX-Ks, A results during financial call, certain the non-GAAP call various factors, of in today's you, measures in discuss reconciliation this differ We materially other may due filed made obligation with conference including earnings the to statements. this SEC. as and we'll those press measures. to during no well Irene. Thank release assume non-GAAP GAAP as financial update forward-looking any XX-Qs comments

Sabino, to included during today's reconciliation financial certain this forward-looking we'll reports as the described of earnings non-GAAP A Collins, are predictions, press today's those other statements. July other today's make including which We call statements, Joining measures. note future COO. assume Also in no with call forward-looking in statements call, release. XXXX, today's is comments we during expectations and and today, during earnings conference our These and CFO CEO; discuss statements any non-GAAP is projections current obligation GAAP factors, differ about measures as SEC. Actual made to of are and as to are various on call, XX-Qs assumptions to results filed uncertainties. results. financial release me based that update Please risks in this and subject will on John may due press John and well and we XX, materially and XX-Ks, the

for the I'll and Sabino. section the include release LivePerson's website that, the John to supplemental quarter, are over slides, LivePerson's the on highlights turn Investor Relations call which available With of the Both CEO, press ir.livepersons.com. at

John Sabino

Thank today. you joining so all for John. you much, us Thank

a what remain are delivered business last May. strategy, have touch a and since priority. on and our earnings we call, notes today on addressing briefly On detailed providing key where we call we Before our let last update XXXX our reiterated that our convertible in me

that a since has structure has announced transaction have capital Lake, long-term closed deal our significantly customers early We our given partner. Lynrock June. and with strategic be which LivePerson improved will partners confidence our in and This

I we I the them Moving group conversations with contributed to installed with to in on and customers. have last from process want to quarters. that I've with over XXX, continue validating have the call, our of with success, they focus past transformation. customer value and on also better, our from their product that improve opportunity now over to partner added X hear met and heard serve us time to digital doubling our select an which has rigor

track strategic is opportunities our I Avaya, about partnership report also am excitement have Customers with pleased with the their in to on expressed which pipeline. building addressable

go-to-market packaging Supporting schedule, been detail of call. omnichannel, later well also our to able about as pricing improve ahead which partnerships. out More in and strategic in strategic customers with partnerships, to and to voice pivot on I greater other will discuss with motion and are our which GA, roll importantly, the aligns partners strategy our customers embrace voice our activity excited new we with have

leadership who With track new started a go-to-market Finally, driving record growth, Chief team retention in early our as new go-to-market Revenue what she acknowledge see Hogan position commercial execute to expansion is in organization wait June. I driving cannot in bring proven business. as significant LivePerson of to experience joining and With place, I our well our to Sandy of want will LivePerson. on decades Officer, as and to

since our shared our call. last I've summary progress that Now that of

Let to the you in on was guidance quarter quarter me by the second at-risk successful customers company during mainly of guidance results. Revenue end $XX.X million, as that high high adjusted million, has our EBITDA second costs. above driven of And range, taken briefly actions update the result our the at retain quarter. to our the the end a largely $X.X of reduce was range, efforts

detail consecutive second and out quarter the our in guidance represents set we financial our that on results second of our that maintenance wanted achieved a do section, reiterate Collins John what more and will in full execution of quarter provide strategy. to to we on his but results I these year

Now key like detail areas I to on would our progress the focus in provide transformation more our of X strategy.

our is First structure. capital

customers with we business a their the As LivePerson's our renewing the quarter, who partner. first confidence transaction, addressing about discussed increased expanding which notes, second us. customers to earlier, this some our and of as completed in viability our long-term largest in are concerns with XXXX Prior raised step

renewal in one X and the which in banks investment telecommunications enabled us, excess in since the renewals. announced, has partnering being the figures was customers But key world. of transaction the companies These of included largest top strategically have expressed of confidence the world, in X with one

but to the way new our renewals long these go step direction. to right a challenges, systemically a address are have in We

motion. let me on you our go-to-market Second, update

significant already announcement back go-to-market our in of removed I May the a motion. transaction discussed, has As the hurdle in have

the The strategic and frameworks more and addition, success allowed be application put customers. has providing improvements In to us the our of enterprise in value. for models adoption structure in place customer maturity with forecasting operational are increasingly rigorous more

highest return use investment are several vendors. of of LLMs ability on across adoption the deliver to increased driving broader frameworks and including BUs, the purpose-built and platform, These our to usage by cases capabilities the orchestrate

and The third-party to LLMs add-on easy bring their and without surprises. new been alongside capabilities, pricing schedule. is customer now value and As highlighted own provided incurring additional this scope AI pricing pricing and X Services to simple also model projects innovation. price In able of the no thanks were brands XX, packaging capabilities with our launched best win meters are June all-inclusive and have better and other packaging to on no packages This integrations. with with The new It earlier, our care pricing was bundled allows extremely significant almost as and costs. new good, has with ahead our pricing GA faster straightforward provider. to into such months and platform analytics a scaling. major cost. only strong structure that product health our along vendors, showcase we expand Unlike most that found LivePerson streamlined back part,

this We expect momentum future continue quarters. in to

on strategy. you our I would like now to partner update

unifying had glass unifying like and have digital for by leaning the -- brands our voice for plan, Avaya, dozens workspace AI agent the that We becomes transformation. best-in-class workspace, vision unified navigate a enterprise with brands they analytics as but into single within integrates pane solutions of of the omnichannel to LivePerson their LivePerson conversational voice

following third generative and expansion to and GA CCaaS end focus, to rapid integrated release of of of area QX a anticipate We integration The who generative top me XX capabilities grown in by number XXX paying our our with quarter. in vendors AI, quarters. adopted we of last including XX% partnerships more the functionality advantage come AI these have customers. have product of the orchestration. over brings of This a customers Today, since extending and our for has XX customers

struggle capabilities, outcomes drive generative we systems, and better Additionally, agents service. million AI over helps which our that and conversations robotic, generative Unlike business X often XXX% quarter-over-quarter. AI box with Bots personalized quarter, engage in customer in sophisticated conversations powered which legacy complex the with have up they over a sound last is interaction LivePerson's chat provide

X,XXX telecommunications quarter, operational customers by by response seeing X Our A and the major improving AI North A capabilities LivePerson's LivePerson's the American to satisfaction reducing highlights In provider AI points. and significantly, improved generative their and over generative deploying Net has capabilities adoption copilot grown customer of provider using the our include: leading efficiency. agents. higher last telecommunications European Score average Promoter now minutes X times AI report

by AI U.S. average operational XX XX%. large a utilizing costs top a retailer by and is union times response their Another LivePerson's lowering XX% credit to cut

base that getting is throughout AI generative show driving deployed it's customer because real-world results globally our These results.

We also in conference innovation Spark at record product our continue our May. track of

to During this Amazon operational designed own increased large agent customer refines event, from new LivePerson. achieve introduced AI Highlights efficiencies. exceptional included brands language others agents the helping and messages with to bringing their innovations several event for experiences Google, customer experience. and OpenAI clarity LLM, professionalism, we CoPilot allows models deliver which which and the your own from better Rewrite, integrate and

from data gather bot AI The that agents, information we've which customers understand of the accurate. customer accurately appropriate We routing customer agent. customers route more efficient a or have to And the generative innovations care. at human whether in remain our and will Spark AI effectively at that a the collection data resources, help launched and them collection making agents generative forefront process needs efficiently be created

more next the improving and will Over on agent person AI AI LivePerson integrating into from copilot quarters, several continue voice workspace. agents, live the our the focus innovation building coming

team I time for I this long-term Collins, a handing to out want execute reiterate transformation rapid February. to laid take multi-quarter in want execution that turnaround will John their strong thank continuing the commitment Before the the on we've are to that call strategy to results. LivePerson the we to that and see

leadership, expectations pricing advancing continuing strides We and with set Avaya our others. continue and new partnerships capital structure to packaging adding make to new deliver the by launching improving and and in our by go-to-market we

continued with the drive in to to digital-first continuing incremental update you to future. strengths look forward as to product quarters our come. value solutions on we to in our customers progress I with also have work We our to their exciting our deliver increase

me to our John? and CFO Now this Collins. let John COO, pass call

John Collins

discussion I'll begin our of operational brief a performance with by update, guidance. financial and John. a Thanks, followed

with by price Lynrock debt new of Lake. closed deleveraging. facilitate of the improved announced, previously some maturity following schedules our extend the notes, our XXXX holder, convertible enabling to us structure transaction capital our further That current call, significantly As raise capture to earnings largest we new market discounted May the and capital

value end, With creation to customer accelerate quarter. us the sheet, transaction business in the needs positioned and our Lake to, better are of to run the a alluded we To the renew customers Lynrock to partners and as for confidence balance expand for this second and of John shareholders. long with meet reinforced stronger

Note operating I was would of accretive we the also divested business set significant guidance. retain to an estimated Because update $X WildHealth. obligations LivePerson full year consistent in to in with like did which liabilities tied timing interest million the previously. which a to in not divestiture provide we was this we million WildHealth, In patient or quarter, claims. WildHealth, to for on previously earnings, the to materially loss, second for that a at the brief expenses, expectations limits the $X potential accounted future saving any

to significant deals, XX terms over signed In and in deals renewals. including X expansions and quarter, customer the build XX of and momentum. We second logos we wins continued new

number value of quarter, of streaming the Expansions a with was these from deals company. with was upsell and the first deals audio While upsell down global global company sequentially. and X-figure X% financial the services an renewals XX% a included the up

large included a large and a U.S. company wins Zealand-based company. logo telecommunications New mortgage New

contributed by second lower-than-expected the the quarter. high of our for revenue total million customer $XX.X was million, at revenue WildHealth primarily range, results, guidance quarter end to turn. total in second financial driven $X.X As

of do going we any forward, not in was cost or revenue prior impact our WildHealth, expect the reflected With guidance. divestiture which

was down driven second services primarily we in our was onetime and down million, the $XX.X above BXB by settlement XX% driven discussed higher-than-expected for year-over-year, $X.X customer benefit Revenue the vendor by quarter and million, million, XX% recurring guidance BXB core revenue range hosted quarter. EBITDA revenue. year-over-year. from Adjusted first a from that a cancellations was at downsells $XX

revenue or same by Professional $XX.X a XX% was [indiscernible]. total impacting services international $XX.X revenue million, of revenue XX% was was From respectively. U.S. the from revenue, driven revenue primarily perspective, million geographic year-over-year, down factors XX% $XX.X million, and and

customer revenue. XX% with XX%, largest in our up revenue customers to per in the the decline revenue million, RPO to quarter. the by Average XX% declined was the driven $XXX in factors driven compared underlying and $XXX,XXX, in also XX% again part by Net retention quarter sequentially expansions churn. same second was by first customer

lagging a is being of strategy NRR discussed, our previously to As on revenue. of it in-period function progress a indicator due

full year Given to realized. decline in customer year the timing size as impact we this churn cancellations the expect half, the and continue quarter of of first the is through fourth revenue sequentially to to this

of annualized as view is the our bookings a of In and contrast churn strategy. to NRR, on that leading revenue indicator net annualized recurring we annual new progress

from quarter, the While expect in continue first improvement quarter, third still the negative and to a value improved to we in quarter ARR second quarter. new further the the second

$XXX announced in sheet, from Finally, of quarter transaction second with the cash of proceeds, inclusive transaction of million terms the balance cash, of the previously with on we costs the net Lake. Lynrock ended

for the a the approximately expect cancellations and midpoint, discussed, range to the of decline quarter, downsells driven guidance $XX is in we of the is $X terms third the million lesser extent, sequential million. in This at In million and, by divestiture of first revenue as which primarily a $XX to customer be WildHealth. of half to

the quarter. approximately of expected to is total in third revenue revenue core BXB be recurring XX%

EBITDA expect the sequential step in down million. driven almost $X down adjusted is range the for EBITDA quarter, we a to million by entirely As step in $X of in adjusted third The revenue. sequential

full the of range year, are our revenue we $XXX For maintaining to million. guidance $XXX million

As for quarter, XX% be third the revenue full expect consistent recurring approximately total for BXB core it we of with the revenue, year. to

to adjusted year. are be $XX of at continue cash the range EBITDA we a expect positive maintaining to million, flow and million to also for full Finally, business $XX free the our BXB guidance we

confidence focusing questions, or and noncore taking quarters. of during to largest the We've cash onboarded further progress closed to facilitate debt, the made Before giving We've reduced the it and are holder We've who the flow. all prior business generation like completed expanding new wind accelerating us. briefly and the business to cost significantly our our down and CRO lines, closer one summarize CCO with a of and renewing commercial capital our that the on maturities continue reduced deleveraging, of step extended bringing transaction our a operations. we've strategy structure divestiture customers rebuild with a sustainable our business I'd to X raised

Collectively, partners ongoing progress, foundation. integrations related with coupled this into investment in voice LivePerson's strengthen

execution customer our transformation voice reinforce partner continued a the of strategic confidence strategy trusted to service. We of LivePerson digital to expect as in for enterprise

operator back the for And the with pass I'll call that, to questions...

Operator

Thank you.

and will answer have The of now question We be conducting Instructions] session. we first Rhee Craig-Hallum. [Operator Jeffrey is a Van question

Jeff Van Rhee

A couple for me.

more churn your and expectations expand just pick. of on So trying the Johns, just to the in guess, I maybe on new and deconstruct expectations, expectations. start the mentioned bookings or churn I to churn higher than heard quarter. if net either a you But ARR, little take there. in relative a meet I'm The bit them passing, but bit

heard on if the think would. for second, but say just retouch bookings I you were a you I that ahead,

John Collins

considerably what new ARR improving that expected. quarter speaking, Yes, a than in were though, were Jeff, second. I'll the the new from than on we start little previously we we Broadly better XX% all, lower churn And on All the a sequentially, little to up previously deals, expected. we here. while first had was

Jeff Van Rhee

I talk into and just direct obviously going changes months with obviously, over sales is trending? there's last talk CRO, you're partners. on, to how about pushing X the observation and the new on respect -- bit new rates harder the deal mean, But the -- win And seeing, you're front, that's motion a some

John Sabino

feel want to start, I'll you if add please more free. and details, John,

so the and logos. Sandy also rebuild motion of we structural partner can it's more ability is pricing reason new to that Hogan we improve packaging our new really that part it when be a improvement comes acquire to to And So business, brought with to competitive. in and

capabilities customers quarters and of improving still And for CS rate the ways on looking with the motion ramp new But new there. and rate and we're are go, to the to a some quarter-over-quarter. up. win going with to win engaging stronger a improvement been improved attractive rollout Sandy is it and our quarter-over-quarter. actually quicker the see to releasing fully to take some initial So it's further of that has that We have [indiscernible] logos, we're the indications few has packaging, pricing

Jeff Van Rhee

I it was think than just you're but I That's better helpful. rolling and on packaging, it expected. that said bit a new out seems pricing you churn, the And know hit.

improved what the would you to? attribute just So churn curious

John Collins

The commentary free Again, add extra I'll too. one, -- that feel to improvement John, here. on some jump

conversation So able of more Jeff, to this have, just goes offers unto in how back versus with and exactly out to the itself. being we platform. or having LivePerson that what customers, messaging initial getting about the improve We to on spoke additional engage with use cases value isolated use we of

We and forward now our use do motions these a we organization. that. spoke paths with move few with months frameworks that value had to about of all CS So the customers conversational to

So retention being being the of the that capabilities, well. of organization. more driving is our with really and in the Lynrock portfolio up value Meeks with driven improvements opening as driven that playing by into customers And we're transaction seeing that additional is our Lake course, activities CS is also the we're our by AI Kevin seeing this some of to

I had partnering concern longer customers the in strategically may think of some have it with removes term. us

Operator

you. joining thank the reached Thank end that, call we and With of you the for us. have today,

LivePerson (LPSN) 31 Jul 242024 Q2 Earnings call transcript