LPSN - Earnings call transcript Q3 2024

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

Operator

Greetings, and welcome to LivePerson Third Quarter 2024 Earnings Conference Call. [Operator Instructions] As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Mr. Jon Perachio, Senior Director, Investor Relations. Thank you, Mr. Perachio.

begin. may You

Jon Perachio

Thank you.

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

John Sabino

Thank us thank you today. all much, so Jon, and you joining for

trusted value win outcomes larger translate bringing with a their innovate operational pipeline their investment significant This seamlessly customers automate, migration. the by stronger channels. for on over we company. to a interaction. These a more getting end to logistics bookings momentum remarks. to through provide a a and and logo with as business. volume. Furthermore, This a customers. me with trusted and strategic their view experience high-level and consistent AI-powered to increasingly share into a with a bank, into their partner with with Fortune Recently, digital here LivePerson top existing detail return capability. improvement update more orchestrate, reliance my Spark unified is large will strategy, a our our for apply I our integrates capabilities personalize a our now a brands strategic Conference, Customers direct joint and leads can digital relationships in conversational risky let partnership Customer and new share enhanced Before new retail logo a a infrastructure a on momentum. efficiency CCaaS capabilities XX now joint LivePerson analyze automation conversations. win digital in and Fortune Customers on our that drives our results available, beginning best-in-class insurer solution the multiyear voice partner of of their all seamlessly to This includes to at omnichannel With conversations solutions elevate without large our renewal later Avaya unveiled can digital on voice from XXX partner

am In now become addition, with. as digital and has made for much LivePerson easier packaging are do the and shared have digital will approach the position enterprise to competitive strategic our that capabilities changes within business customers confident resonating. Many more solution. customer-centric better ongoing integrated our allowing partner as pricing to leading I well LivePerson preferred We commitment transformation. serve capabilities to simpler enhancing customers that an we to customers as best-of-breed use and LivePerson's have offer

beginning in and I greater Collins to turnaround, will in in days sequential While bookings it's we discuss early John our are that detail. improvements see still

actions quarter thus range, midpoint was our structure. that the successful rightsize guidance section, we driven far above EBITDA of efforts to the to more third high-level our detail And point $X.X I discuss of our the range, in driven in third will our Collins provide results cost end was a of high third during results. consecutive our $XX.X full of financial have also the Now execution. and end by want quarter. but retention year guidance taken about million, results by our these high me million, let quarter and his out John the quarter guidance maintenance adjusted represents the mainly Revenue above

strategy. like I to detail would Now additional provide transformation of our progress the on

solutions. benefit customer By recent real transcribing event, automated discuss time, AI seamlessly capabilities and unifying and our Spark conversations. conversations as innovative At such a data. Copilot providers both from best-in-class their voice for voice into calls let's like rich The brands our with actionable conversations Studio, Avaya speech summaries Assist integrate Analytics unified that text-based integrates voice LivePerson's workspace. several we launched in third-party announced First, We agent product. our into workspace omnichannel

customers customer coach and agents all channels. Our analyze can across now journeys

legacy bring terms cloud to customers Many without analytics on lines. and cloud to to and cloud migrating do the flexibility embedded to and vendors, own enables move time LivePerson digital, their voice due contact and on-premise disrupting gives existing their the operations. centers their operations. to to of contact with advanced deeply in AI complexity with center on-premise brands systems cost and their agility This remain the By integrating

a portal tune enhanced administrative to our products. and brands launched self-service test experience also for experiences. the We for their We copilot

customize quickly business needs. meet Now can unique customers their models to AI

customer sequential are impact measure enables Additionally, increase on our generative we outcomes. AI In our our increase these generative Copilot their we the a operations. These in AI customers in clients number sequential QX, AI usage reporting using enhanced leveraging critical use connect across XX% suite. rapidly the to of generative growing conversations capabilities to enhancements base. as capabilities saw cases This AI is real of XX% generative and our specific to experiences

of a examples share few me this. Now let

XX% solution agents world's to for diamond human Frost satisfaction customer LivePerson's a Let's respond which start is Copilot than score. Then less jewelry. of their of there's thousands customer in hundreds annually, resulting with minute Jewelers, to largest Signet the consistent known Bank, care. retailer a enables conversations in premium of human-first

is AI achieving along lives. their purchases navigate Using customers most by way. Our and smart to Signet's rewrite AI-powered their customer value trusted of order increase expensive orchestrate a highly LivePerson's buying satisfaction summarization that assist, agent the experiences average in the sales one stressful their score agents help Signet and XX% capabilities, while personalized

a Next reduced XX% response Arabian over and in Najm's enhanced agents by costs by to years agents vehicle of After their Najm launch to LivePerson's interactions, AI rates. across voice times personalization of have annual turned while AI improving as retention insurer. LivePerson is using channel, only support millions Najm, XX% Saudi lowering WhatsApp.

largest the achieve LivePerson health use of cases digital with a consumers solutions accelerating customer assisting agents insurance and providers life year-over-year in use rate. of growth of variety one satisfaction the sales customer-facing have LivePerson. digital They is at with XXX% AI for stages Finally, various world's helped XX% AI agent-facing them agents sales internal and cycle. external customer with

unified investments channel. digital the personalize our automate enable across These plan AI core remain cases on enhance generative conversations at on any channel these next our and capabilities partnerships, expand voice will down focused LivePerson's several and to Over brands further analytics. use double scale innovations increase to analyze, areas. and We will quarters, orchestrate,

pricing like to go in In our market. deals expect I'd update silver with progress our strategy. saw we see and momentum that beginning and We're closed to a to pricing in increase our QX. Now significant on and bronze, new gold into to in you packaging QX, increase

moved new pipeline In fact, majority pricing to of already new our packaging. and has logo

We with starting larger the to sales shorter are and intended see results deals cycles.

successful leading AI suite. significant of our on renewal This adopted retailer a upsell. gold goods example, package resulted in sporting generative based and For our pilot a a

new As mentioned resulted together. expanding our in win first our has Avaya partnership already logo earlier, with

held and associated value privately of It One integrated risks them of the and chose -- the costs delays accelerate innovation them U.S. with is and our proposition. full helps the while systems. This our solution. the avoiding key our helps to mission-critical in banks it accurate value migration largest

a Fortune secured $X logistics for win Additionally, same an to the and million. nearly our logo of ACV renewal a through looking with insurer XX Fortune integrated Avaya company solution a with we new XXX leverage relationship

also in are program access unified of number early additional a strong from for the Fortune workspace our We seeing pipeline companies. XXX

cloud it take that the set become that our but Looking with and to source more for last ahead, We're voice of will Cisco time we delivered journey clear. to the omnichannel like reiterate of and want just I is conclude, I in this we seeing expectations want on-premise momentum, Amazon Connect. platforms be real This on and to revenue. To a call. we plan integrate earnings start our beginning of to the material

growing analytics by product our enhancing on innovate AI our enterprise for to adoption. generative and current unified continued and messaging, our voice have We adding experiences suite

said, to continued setting sales continued have by to of partnerships, pricing also innovation advance key driven to deployed our continued growth. made That strategy to get progress back market there our both profitable with developments to and momentum we and in have packaging our and on We show adoption building. new make foundations being our be still to solution our reignite omnichannel positive our in product finally, market strategy. options. And increase us now growth to go by These and go product strides is our the progress to and

discuss over remainder our CFO of to the and in an call and Before I to view early the to financials expectations the provide detail and I turn in for bookings of churn for Collins, XXXX. COO, year, John would like guidance our our

industry in into and risks. in discussed the As churn translated best greater into we X has quarters, improvement with our aligning addressable practices operations past sequential visibility bookings

of heightened to renewal future for the We renewal steadily with likely to expectations motion. The Our making customers risk cycle rates who this our of renew the customers cycles. forward we for continue slated and current are the quarter as decisions these their the fourth do of last improve look quarter see retention remainder to install we in customer of success next renewal year year. first new are before

second XXXX. from to half I with near-term new As been I towards the focused this since positive revenue issues the day churn LivePerson. currently business I in that That of have a the into said, continue net believe largely of expect XXXX, legacy transition a bookings half is the the first expected joined on improvement result we of expected in ARR offsetting result, attrition the gains sequential

first trends, XXXX earnings visibility to the be today. was we We'll this bookings new level it our felt through able the but expectations see that provide detailed X-figure suggest with important on indications the improved next update provide to we maintain fourth on bookings we XXXX. to Regarding more early in quarter; bookings and call, of that a quarter should expect you

the So now call hand John? me let Collins. John over to

John Collins

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

total In terms deals XX renewals. of and in of a The deals health and insurance deal X-figure services wins world's financial logos total insurance number and we of provider. signed value second up Australian X-figure improvement. large third expansions delivered was a deals, health including of quarter, with included was quarter X deal and a XX deal another largest sequential quarter X deal with the and the Significant significant a high providers customer renewals XX%. the large from We XX% with up and new company, X-figure another expansions

Avaya. Consistent tied with restaurant John Fortune have a logistics forward we were highlight, quarter to momentum expectations, wins year, carry the and voice leading casual retail this our logo these XX a New bank, this company, a I'll expect did, a last deal Fortune with every improved private as that to integration U.S.-based And of our fast metrics company. insurer, XXX that included X we quarter.

double-digit a tracking the currently be to which first would fourth of are quarter We bookings, XXXX. since

year-over-year. $XX.X timing the the third due customer range. our quarter for As and revenue of by driven the was to was of $XX.X total revenue results, the was BXB from million, our The EBITDA the over total lower-than-expected higher improvement deals same for quarter XX% core of XX% factors or million, was high million BXB range end revenue, guidance churn high end hosted contributing in XX% expectations revenue. Revenue our financial guidance was recurring third above at Adjusted quarter. to primarily the $X.X above services year-over-year. million, of $XX.X down down

Again, or in million per total XX% and $XX.X and million customer revenue $XX.X international was in part Net year-over-year. $XXX,XXX, in sells were of by XX% previously to quarter. retention revenue. the revenue was million, to declines professional year-over-year discussed, compared same perspective, geographic cancellations segmenting million, revenue the customer revenue, given Average down customer through with will $XX.X was third primarily that revenue XXXX, XX% trend shortly. the the sequentially revenue, part in X% XX% year. Further expansions the our customer was As down up second the of year-over-year, factors churn. RPO revenue services declined quarter consistent U.S. and cancellations I declines with on quarter XX% expect by the revenue size a decline and $XXX and and was this XXXX, in by timing From driven a in into we customers fourth to elaborate largest driving respectively. driven

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

$XXX maintaining to but XXXX, In $XXX terms year of million our the full for we are the revenue range guidance million. midpoint to tightening

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

maintaining guidance BXB million. to million. prior be full to flow $XX.X revenue the continue to range with is commentary, the fourth also narrowing midpoint are of we adjusted EBITDA million but to $XX to the quarter positive expect We a $XX.X Consistent year. The free in million the range for our also for for implication $XX cash business

approximately We expect BXB total revenue to recurring XX% revenue. core of equal

the in $X.X range quarter, EBITDA expect a adjusted to of million for we fourth As $X.X million.

leaving remarks earlier like of XXXX. guidance, John's on build Before to the topic on I'd

is on on we trends a not quarter now of turnaround the While expect close bookings a of inflection provide the sequentially, expected typically slower XXXX. This net annualized positive we importance X given annualized of follows comments key declining before provide growth the half also We It few the by currently commentary to slower the in trends, the new is reaching primary to but point are and the fiscal year seeing to and do second beginning growth exceed without to by the we for quarter in strategy, churn fourth our want business. revenue driven of next ARR a XXXX. timing continue rate that benefit factors. first at end expected

newly in our occurring believe motion decisions information, on impact are today. we a limited that likely which the of ability quarter installed this quarter our customer cycle, to renewal actively of to influence today's year. based renewal First, we the customer reflecting first Comparatively, customers reflects advance the remainder future well of cycles, made -- on are have current renewal greater that in we influencing decisions events newly expect renewal have we and a next success

the a we renewal As as risk result, expect and fourth to quarter we significant cycle. quarter continue first the current of customer attrition complete in the

currently bookings driving On we our our again the quarter And the first double the sales sequentially -- second in improved quarter digits, upside, is the building momentum view year. Consistent a expectations, first motion. factor every be fourth to have this with is tracking this would XXXX. in updated which

of and generation such first are digits quarter leading double XXXX. rep we to pipeline the productivity tracking in as currently also indicators Importantly, suggest

briefly taking key a points. summarize questions, Before few I'd like to

and decline core and rightsize despite on we cash to restructured generate business have its flow revenue. focus We free customers, to in structure products the to continue cost anticipated the positive near-term the

including in to through to renewal work operational by address now now a a operator, to line continued thanks that move the half during this of our corporate have digits to to that same motion to should continue now growth quarter with demand. And that, challenging instability changes decisions sequential this products bookings norms the demand of cycle, double for and sight and Q&A. of period customer renewal the each we We sales we and industry made which consistently can both year, At and that significant next, have prior a leadership XXXX. approach implies to in we implemented driven time, quarter, rates tracking second

Operator

line The with Instructions] from [Operator Group. Craig-Hallum Van the first question Rhee Jeff comes of Capital

Jeff Van Rhee

And days or the churn it to just obviously, ARR here there offset So with XX pretty ability expectations ultimately, in around was maybe than bottoming. to of XXX in ago. you John, customers, substantial S. less days several maybe the suspected John renewals a like the push sounds engagement terms

bit sounds XXX, of had a that. Just the talk a that forget the little I customers. obviously, little But like more then, since challenging. number, Like at point, XXX, it got something visited you more top about

Just you expand a would. bit there if

John Sabino

Yes.

that Jeff, lot there. In really health our the this dialed of we X and to don't first past. adoption us, that's the a in, scoring, could lot instability we risk came the able had out uncertainty case around, So be we're out we've that we've were we quarters. insight there's of that and stepped and of scoring lot some into hoping renewals to with we far of turn think we some future going what how And think ahead a -- we or the I of we're when this X had could giving greater see with of seeing do that's in ultimately, in that to. into a seeing were And that issues in

I able that refine customers, So their after influence decision able coming to we're the to probably substantially it's -- us think we're and seeing not going it's as to interacting up. with realizing being what they're be

change. think it's that's So I a don't material anything

is think we're refining available seeing. based on now I best data what this us

in as turn it quarters cycle. said going that this was renewal take to before, And We're I lastly, to still around.

this I think you have actually past. in and maybe the I spoken about

risk a have before, the We gotten full renewal of the I get think, out we've through cycle to of system. most

by end going of seeing, year. should next the and through QX we be So QX what the we're that into that's end of

Jeff Van Rhee

-- it does motion, expectations. to Okay. progress the commentary, to get sound you're then relative talk on like to new other John's mean the I there, just John the your to commented, you to about the going compare But Is And I ago? or next think, sales expected? fast how quarters. that as double-digit quarter bookings does expectations ramping X I is what few growth, again a in as that guess, he

John Sabino

fast if I not, expected, little It's as as a ramping faster. bit

between So up. hit in is actually times and we're of and again, that there -- your seeing. is trying will the size pricing that's you're to Andy bookings deal the what speed ground of packaging expanding The offset you shrinking the And that churn call this say the running. the deals has some would that I cycle

we've addition brought that that least steady is in, are it. that moving bear direction. This in So partnership, to Avaya the expected fruit. think the in to things moving the And forward at That, in changes are right we've the starting I leadership is fashion. made where a we

Operator

Next from of question Latimore comes Markets. Mike line Northland the with Capital

Unknown Analyst

This for Mike side. my ] from questions is of [ Vijay A Latimore. Devar couple

First seeing? use Could what you're main new on logo one talk wins. about cases the you the are

John Sabino

a are There in jump JC, on number this. I'll --

John Collins

Sure. get happy started. I'm to

John, to me Sorry, here? started you like get would

John Sabino

go sorry of ]. Yes, [ ahead, JC. jump front to in I'm you

John Collins

sure. Yes,

basis. of some themes terms we the customer is allows AI was win care, there's across we been the we're of utilization of adding health management, of outreach as so increase So business, agents on And of a significantly of with of key those and as AI, thread has -- channels. providing expansions John well revenue remarks, the use generative particularly generative existing usage a with highlighted we logos the more a analytics the the proactive through highlighted, the all of ticketing In case service that is respect new increasing that the the case and company case to unified both course, mentioned, the the with sales as across have clearly, some both like. platform wins, in accounts, increasing of at integration our of involved, and within logistics his one highlighted, and sequential that rate on customer as wins in the to prepared And platform. voice

John Sabino

customers We're to use capabilities customer and like to add the opportunities. Copilot beyond bit, drive a see starting I'd we're summarization And specifically what our customer and commercial highlighting use supporting which to generative in capabilities AI is expanded journey little Yes. care. just seeing, cases

BPOs beyond being with a partnership Additionally, some just customer to how partners the that customer the possible looking of turn capabilities looking also other care at conversations into are with allowing care us of momentum cost to these go expand and you opportunities. but revenue-generating Avaya is can center

partners terms seeing the to of We're also they providers more not to case through their So end offer customers in value if product. use see the targeting only can we're our services use they the expansion of provide. other and

Unknown Analyst

Great.

were key the the X-figure little those the you what bit deals? really main won ensured deals, who On competitors and adds talk a could that deeper value are you into

John Sabino

can question? having understanding you the repeat trouble just it. sorry, I'm I'm

Unknown Analyst

the to else? those of X little wondering just deals, enable kind With main what are who adds further that was choose the LivePerson if really terms you expand And competitors? over X-figure really I the in can anybody were value of a clients key

John Sabino

Yes.

So jump this. really quick in on

the competitors. Our has sales space. competitor shifted. the in most unified players the same RFPs social not vendors see space. platform in CCaaS of base coming We into see And see automation we We platform see cloud and also type providers. We

we're customers So please the will it's here the to in I commentary prop them quarter-over-quarter, customer disruption. we're million have competitive $X we're that our don't consistent. -- seeing data innovation around able as bringing is disruption against I -- that If go rates offer got seeing far loss and favor. And The full been stabilize additional relatively -- base CCaaS larger add them move the change not that if JC, our -- and more we as migration, partnership essentially right. we're competitors. forward these to a capability, now and have And is it our they anything, seen through value say allowing -- without

delays our can through successfully say go and see they and again. CCaaS is I migration. over a against able having which capabilities some And the architectural without of of have we -- players to similar them, footprint agent compete Salesforce. will to Genesys prop again, best-of-breed Copilot you the And over it's workspace that add been value digital that current So their and and the is to

John Collins

would X-figure potential I of were just Salesforce prepared that context Yes. we that to X both add, the and in say, remarks, deals for customer. the highlighted in options the the Genesys And involved and

Operator

-- all Ladies right.

We the of you you. joining us our call. reached Thank have for end Thank today.

LivePerson (LPSN) 7 Nov 242024 Q3 Earnings call transcript