Earnings call transcript Q1 2023

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Operator

Good afternoon, and welcome to the LiveVox First Quarter 2023 Conference Call. [Operator Instructions] Please note, this event is being recorded.

I would now like to turn the conference over to Alexis Waadt. Please go ahead.

Alexis Waadt

Good afternoon, and thank you for your participation today.

call Vice John Officer. President the Gregg CEO; on Executive Clevenger, and me today DiLullo, are and With Chief Financial

limitation, or a guarantee we verified. And Act of conference uncertainties. would forward-looking comments listed I meaning risks of also Certain from no Factors forward-looking has get X, XX-K this those conditions, and independently past been including other our remind XXXX. is information. call projections Any a characterizations statements respect future in expectations, Securities information not the statement that company's and financial Before Risk market refers the to such in events, third-party our such statements. that Litigation the could obligation with sources no filings, update from performance are Private company you The derived to or Reform warranty statements like statement. without projections within made XXXX future and results conference differ call is to the forward-looking on section to filed including in this of forward-looking this representation future those any any LiveVox accordingly, makes Please reason, SEC March that SEC including, was the not webcast of note of to contain during actual on and started, discussed subject results. or for future assumes materially expressed

and measures is comparable earnings found be on materials, Relations website, measure of by release the website. each on press be the be company will investors.livevox.com. to also available non-GAAP non-GAAP defined measures XX, quarter on A will Investor discuss financial in release, reconciliation will Regulation related During call, replay call, Investor with these available LiveVox's Relations this XX-Q earnings ended directly can SEC investors.livevox.com. which March Form for GAAP XXXX, most the website, our the the available this together the conference of financial recorded as A of G. company's

call I'll With the to turn begin. that, to over John

John DiLullo

for Thanks, earnings joining our to Alexis, and thanks call. everyone quarterly

glean As had comfortably our accomplishments nearly extremely broadly notably was we of earlier exceeded proud, track. that are strong or met our above every the new and high we end customers guidance. the this a a on revenue QX quarter afternoon, most expectations metric can we quarter you release of from that press with of including winning XX It finishing which full

Board I'd investors, suppliers, these partners, our like especially supportive to customers, the For and achievements, our our employees. thank LiveVox of dedicated Directors

XXXX In you year a more Clevenger, Gregg guidance full our for an few financial the update moments, and and to with share our going is results to provide about quarter details CFO, current our outlook.

and contact solutions. energetic X-K of today, I with the some team, I in QX resilience a testimonial have the we in brief This of occur is and trip was the and global However, force color that around-the-world tailwinds timed that share are to a met with in performance and all and January our I'd employees cases, that In our I in offices the initiated our to with XX% of the many heels like time with QX facing efforts the the visited XX filed the most culture spending center of reduction in days, combination that the last in After our restructuring superiority on in of market. detailed to the in you time on XX. adaptability our headwinds feel customers. LiveVox we our on

undertook restructuring customers. materialize. not I performance continue jar company-wide in the availability Concerns do attrition that opportunity organization not I disturb in last and see Throughout priority we shortened, to meaningfully announced improved they such industry-leading expand and ongoing our optimize, transformative, that we on our had did substantial X executed ahead were about and to our targets. resulting churn the uptime time or ticket resolution nor QX potential already we but distract or QX, they as proceeded loyal installations precision an did leverage preserve, initiatives company. customer our The expected, with open unwanted that remain quarter our that changes from for

executed to proud team well Regarding the that say first quarter. last very tenet, preserve, I'm the

the calling remained QX despite Our can seasonality volumes throughout which quarter constant unpredictable. trends, be

their with it quarter demonstrated especially institutions transaction a largest the million bank with large platform, a that top experiencing this of Serendipitously, was a superior BPO U.S. experience the bank. $X.X large logo reliability, on our when Our win cloud-native are LiveVox. its our U.S. regulated support embracing CCaaS regional gained even center. now After our win deployed partners XX agents product with enjoy Zero X-year This was contact solutions. would new bank that to of outsourced as had one our small insightful Trust architecture financial the LiveVox productivity standardized and secure

for tide as As long-term highlighted this as the turning segment. and earlier enacted pandemic credit a is Normalization consumer forgiveness wins lenders I for may during markets a cycle such finance the in the forbearance, reminder, that and tailwind consumer be payment one programs. potential of became us quite challenging indicate deferral the LiveVox

unexpectedly deemed has unified One of and explicit and greater text without SMS Securing practice, to including delivery sales of us of of CRM determining decision evolving areas is or of appropriateness capabilities, integrated On of solutions undesirable. eliminating lacked consent and and we the and an otherwise faster prohibiting delivery noncompliant of nuisance SMS spam exception. that the remain content messages. of messages were to public integration growth largest committed messaging messaging agent that of one April but good desktop management traffic consent reduce significantly SMS the our omnichannel aggregators leverage their notified for X, been our us the

and the on revenues, impact that experts our customers believe aggregators. SMS LiveVox to with this carriers, evolving needs consumers redistribute current QX this decision and other and will of we Nevertheless, was and customers' year traffic while traffic full SMS regulations. routinely an help have compliant our our we preferences navigate

disruption they expect few these the share in not changes a impair our in should moments, will And be provided to guidance. Gregg nature. temporary from as We previously annual

XX Version These we exploit auto-scaling. our We actions versions newer workloads second of that XX. execute the customers release and gross plan of migrate have expansion optimize our product migration tenet better margin to also continue on sunset to workloads legacy to as XX happy to to from operations. future to the fuel our report recently our Version I'm accelerated action Version promised of and ongoing that

and last Medellin, worldwide. extensively As leverage these our to I efforts we and in manager team provide excellence employees benefits. All are mentioned quarter, leadership of long-lasting per also to centers test our expanded expected economic ratios lower-cost Colombia, to continue accept responsibilities improve our have to Bangalore

and in XX,XXX is of practices. QX, in and resellers, third deep firms The became pipeline business is X and and XX% is contact than and one has accelerate sales and the consulting come. the tenet In partner of marketing largest also practice our center sales collaboratively services our partners many we CGI, processes we to QX, current of utilize to with to of our of IT member for quarters professionals new our financial to the plan go-to-market a lead with management internal program. each and we better engagements. integration complementary meaningfully Working streamline more deployment and highly productivity leverage like software. action channels improve efforts. activating and of to partnerships expect generation world CGI began consultants Today, nearly expertise CGI's vendor from which derived value-added well-established In channel efforts a

areas tenet finance, strategic LiveVox initiative collections. and of opportunities our a and expand historically The of market our narrow of replete X-element domestic last consumer outbound to outside is credit in with operates grow. focus

We to the products in segments. customer care for and our in to grow international markets, to of the adoption and adapt traditional to certify segment, more have use sector more government exciting our participate mid-market products opportunities in improve in

of the beginning, are engine open to are go-to-market efforts our great making our Although aperture progress. we just

customer one and gain AI-powered ability and overflow flexible maintaining transcription inbound any and to cut win offers cloud-based a store, value index One ability by in into This simultaneously customers while of inbound highlights will score productivity. $XXX,XXX productivity services interaction. locations, of were to calls how invaluable provide its a automate wins We efficiency of new efforts. LiveVox this case, customer the these center, to win. retailer QX a In improve its contract can personnel and annual automotive capability insights selected every our to help care costs, glimpse deployment impact customer solution U.S. customer improve XX many platform, directing retail agent record, the the LiveVox's the by

And Sales a brands managing metrics, VP debut to new proud a such brand, in President well to efforts sizes. significant center In the legacy days, was XX Altogether, center pedigrees made global Vice have engagement am Engineering experience. installed of large strides channels we traffic this spent QX, and in with as and operations and new Subsequently, year-over-year. quarter, organic as I and past to social launch in in of our wave. extensive all from for substantially Key of that go-to-market We we environments addition a Senior other as new competitive website VP of channel Forrester the CCaaS quarter marketing competitive also provider. creation. new with website. extensive grow the we particularly last team programs care, channel and multi-tier share pipeline continued customer the contact a shapes this a CCaaS time Sales messaging our lead record from combines and sales accepted channels, experience, made opportunity QX and our customer new in contact hired of Channels

promises I to our to report standard, that that we I'm Whisper customers. open.ai wrap platform, and features opens announce early are Spanish and front, On agents product further being support initiate support tools. the center international dialing, excited E.XXX. happy to the enhance for including international offering contact their to administrators. support international LiveVox. for to our to ability also and existing quality with automated have international considered which ITU international release tools automated telecommunications predictive of to integration are in entered management summary this capability and scheduled the system participating package recently French Also, our scheduling nearly agent of status, market billion by AI-powered important $XX analysis the for program supervised alpha and feature public and all includes and am many agent both This the sentiment assist for Introducing demonstrated several currently agent addressable assist, callbacks,

is solutions. These and of AI contact It a center to hold AI We our extremely and similar accelerate a the enjoying difficult productive tools emerging enhancing more capabilities, significantly improving of tailwind tools the the agents public are related that the already believe and promise leverage to other customer we technologies the ChatGPT on-premises self-service interactions contact serve growth from pipeline in inquiries movement experience. of in to reducing cost and center, popularity legacy only cloud. of help can workloads the to making

beta synergies celebrated the introduces replicate of In and energy Facebook-like LiveVox and ways difficult of to agent real-time wins, practice of social work window many on agents product. With help together are critical the retention. to notifications sharing, person desktop working collaborative being enabling the the the and request of in often LiveVox engagement a collaborative center release that maintaining environment. morale, tightly to QX, traditional still chat other and major Connect Connect many packed so contact dynamics in distributed in from best we home, important our a for agent's by functions also emulates

opportunity the before, capitalize the macro we and of enjoy we This, contact with to foundation centers said of to future by with the are and LiveVox customer legacy to our success, that in are the the well enjoys forms movement together obsession cloud. created I've As committed enduring, expect employees the positioned growth periods. powerful trend on and

now pleasure the numbers. through our my Officer, It's walk introduce us Chief today. Gregg Clevenger, time will who your to for again Gregg? Thanks Financial

Gregg Clevenger

Thanks, and afternoon, John, everyone. good

the reconciled I issued press want Relations financial in posted are all on website, the today release non-GAAP a just Investor that on with call our in a to the solid and I'll guidance the I and quarter, on that a our of recap for prior discuss figures 'XX. year before very section remind this first off presentation to in moving you our start quarter on XX-Q. call to second full

above quarter of first to than the $X.X $XX million. Total million, revenue the guided year for $XX.X range million quarter and the high end first of XX% our $XX million was last higher of

which million revenue was higher by versus is retention revenue XXX%, quarter in the X% XXXX. XX% last typical as revenue, minus Our quarter nonrecurring stayed nonrecurring more some all the ARR annualized total ARR, recognition first about lower-margin million than million, $X.X well of total than revenue of Net or of for quarter last us, at the $XXX for project-related is revenue $XXX.X had of this driven in revenue. XXX% both quarter the as first year quarter. steady of revenue

gross basis and points last first nearly for points increase first than year. the XXX an Adjusted margin better was XX XX.X%, basis versus quarter quarter quarter last the of of

gross adjusted lower XX%. would quarter nonrecurring was gross without revenue performance margin margin been impacted Our this amount have adjusted in higher the over quarter our negatively of which recognized margin the by

a of also was range. $XXX,XXX, quarter guided positive the high for our EBITDA above end the Adjusted

some an particular range $XXX,XXX, unusually well bad expense expenses this in a expenses customer, nearly EBITDA been quarter Our million. $X.X debt as adjusted our included have about to all the without as totaling which nonrecurring in of the quarter high would related legal

a were $X.XX both for a negative the our diluted related on year January quarter U.S. share GAAP a first quarter share of our $X.XX of $X.X onetime space. basis in the the last the restructuring the and and office costs negative for when reduction basic to closure headcount were versus earnings of per and million $X.XX some of underused negative in quarter a adjusted

prepayment had $XX high capital-light XXX% cloud our public nature quarter million the $XX of million employee that with $X with of ended XXXX. lastly, obligations And of of of cash associated only use in seasonal securities. our the vendor annual and of the expected and equivalents and payment totaled we of restructuring, product but We the performance quarter January platform. quarter, certain $X,XXX, debt a cash cash reflecting and million during for payments were by achieved the for cash and the relatively CapEx about marketable accrued bonuses driven

at end the guided quarter of the remained of low $XX $XX million cash to the we cash for above the quarter. Our million point well

to guidance. So let's turn now forward-looking

SMS on from some longer-term messaging our traffic and John impact collections disruption customers. mentioned the earlier, and have to quarter second have As impact a profitability will of revenue will our a revenue our negative on remaining have to revenue disproportionate our In million] a million this of total, experienced we X year [$X to of second quarters to in expect it amount with $X this a impact quarter. in the the

on issue second at While is material this that business, our come the profitability expected is cash inflection impact to not flow, of in an terms quarter. free in important and does a business especially the for an it have point

the to revenue So of total $XX with that context, over XX we to be quarter X% million, expect between and X% growth second second quarter XXXX.

the expect impacted in lower the lost and quarter than first traffic. the adjusted contribution to the we little $X expect and adjusted SMS our to XX%, $XXX,XXX, from We to profit our margin gross second EBITDA be between exceed a quarter due

full are our for revenue million guidance million In provided we maintaining guidance terms for $XXX year the to XXXX, $XXX previously of year. of

XX% gross our margin trend million full in expect to XX% the are guidance an X adjusted towards now quarter. between continue year, EBITDA by and to by fourth $X approaching our adjusted fourth the $X million adjusted and quarter, we be with to We for EBITDA increasing margin the

line With that, for operator, open Q&A? you please the can

Operator

[Operator Instructions] with Lane The first question comes Parker Stifel. from

Parker Lane

begun to the new that John, the VARs ramping good here. about hear you've with

start emphasize pipeline channel motion? anticipate go-to-market these said on you you that goes I to X quarter. VARs a as where today, driven and was and bring XX% think With the new as that more that the by of more you figure it during do

John DiLullo

quality that, and far of like our through we or and we're the My I'd different My opportunities or progress of bringing. really hope, so as today. to Parker, the about to joining much and MSPs they're VARs, see those hope for call thanks is whether be continues the channels, leads XX% types SIs customers coming the originate that but climb. the that of excited as

on front. ahead it's think that I blue So skies

Parker Lane

as of then, impact base, opportunity isolated And channel, is any customers across us And if related that there dynamic OTT if is a be a cetera? customer felt to hear. to subset that to million the recapture particularly another customers? revenue et as messaging, impact Gregg, concerned $X from is you to of Great been potentially this can has it whether to million Yes. messaging, to give is far going sense that $X a voice,

Gregg Clevenger

aggregator carry anymore. Yes, not across Parker. to Yes, traffic was chose the felt our particular a impact that

wanted was consent our And consent. customers so they upon that recertify -- that the based to

we diligently move aggregators. to and that do other traffic so onto to And that been have working

in And and well. it will largely continue will so the it as rest the and expect and fourth second have to we then an over we'll the quarter then that impact of third -- quarter next

John DiLullo

there second are there, the messages, of send any we nor SMS traffic. -- I really that on included potential customers it we're not those to Parker, voice suppose their may there's able part if banking a that that. question have not of your is also, increase But

Operator

The next [ph] Vivek Northland question is Capital. from with Balaji

Unidentified Analyst

on Vivek a with from questions have of Latimore. Mike me. [ph] I couple I'm

is pipeline... how The first one is, the

John DiLullo

Operator, audio. we lost

Operator

Yes, queue, podium get to will ask back Jim the have I'm Fish I'm the and to now. into put sorry. right going to I Vivek so on

podium So [Vivek with you are now? Northland Balaji] Capital, on the

Unidentified Analyst

Am now? I audible

Gregg Clevenger

Yes, we you. can hear

Unidentified Analyst

Mike couple I with for on questions of a [Vivek] have I'm Yes. Latimore. me.

how in the is the pipeline The vertical? one is, government first

Gregg Clevenger

that in how you what the Is was pipeline asked is the I think government right? vertical?

Unidentified Analyst

Yes.

Gregg Clevenger

that opportunities this fiscal we're on but one all would are it's I -- couple have counting that is from our not anything segment. initiatives, slow probably year most in looking We And still growing. coming. the of we of in that say a It's certainly at,

Unidentified Analyst

are this is, more adding sales headcount? what second the And my And year? question is you right. All

John DiLullo

We disclose of of but government, growth on we've Yes. those channels headcount are the the of over see that actual outlined, kind actually we resources as and we sales areas our forward. on you are the around upon don't growth year. the touched the adding of sales, focusing the are course We're international. headcount And factors going which

And investing where so we're that's resources.

Operator

Jim The with Piper is Sandler. Instructions] from question next [Operator Fish

Jim Fish

with bank hear going have Obviously, that quarter. win to given about just sector the large some pauses a about the great are that's on that the of investors So in little bit worried spending. a been

about what financial So talk kind of your of like? a in customers? spending can of maybe out seeing exposed changes kind they What's there? trended have pause Do of kind in you of pause you're services broad call from Anything QX? any terms spending sort or to their

John DiLullo

to boring didn't response, Jim, hate we in different. really anything be dramatically Yes, I but my see

QX. We continue say But in optimistic we of cycle. a pipeline expected normalization just the credit We remain as performed the in vertical about to in build. the the financial see I'd potential recovery about we

Jim Fish

off really bottoming we maybe metric it. Got a then of forward this looking at NRR helpful. that That's from work trickle here is can that's cycle? slowly kind something And 'XX looking in base of and and over then down you're credit metric, the potentially going sort is some of to into Or we we this renewal 'XX work in that the as beyond? time see until

Gregg Clevenger

is we it is what were but is XXX% it points, XXX%, pretty what should I in is as year. would quarter, last trend more X longer it were I have the basis the last reported been is, quarter, fact it steady. which but mean we which is this think we term, higher,

some a out that recovery So And credit expect the level. extent that higher. within And space a continue at on will cycle our it is around then invest it's yes, of penetrating help as steady base, all that ever kind we of metrics relatively point there, know, we lot resources as to you the metric at white that customer existing well. given which drive to will this to there help

John DiLullo

We're particularly Yes. you a lot And as an segment. well would And segments I seeing verticals logos. in say and with care other new auto services we're in doing we're new one, doing the of well the retailer, logos. but shared I of with collection activity real and Jim,

Operator

with Rangan The Goldman Sachs. next question is from Kash

Jacob Staffel

It just on apologize, how on differed late, is I in quarter might might maybe vertical, touch Jacob on going out? to sales from anything Kash. have touch on cycles on call activity else and wanted the This last you little a there. can government I and sounds like there's hopped for quarter? But I quickly, that but the not you those much

John DiLullo

we had And -- the and a I yes, saw a Jacob, in sales we cycles in sales proceeded way. pretty a time. actually cycle -- slight improvement quarter like orderly said, fairly

the in and say, that's quarters. about that's pipeline And persist But we creation improvement encouraging, even the going clear if I cycle And to not the times. slight coming were quarter. in the predictability excited so like in the

Operator

Thank it today's you This concludes and the attending for our question-and-answer session, concludes also presentation. conference.

You may now disconnect.

LiveVox (LVOX) 9 May 232023 Q1 Earnings call transcript