Earnings call transcript Q2 2023

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Operator

Good afternoon, everyone and welcome to the LiveVox Second Quarter 2023 Conference Call. [Operator Instructions] This call is being recorded on Tuesday, August 8, 2023. I would now like to turn the conference over to Alexis Waadt, Vice President, Head of Investor Relations. Please go ahead.

Alexis Waadt

Good afternoon and thank you for your participation today. call Vice John Officer. President the Clevenger, CEO; on Executive our and me today DiLullo, are Gregg With Chief Financial

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

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

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

John DiLullo

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

As quarter, a met expectations in key broadly seen metric. release or LiveVox second on strong have you earlier our delivered which nearly afternoon, exceeded this may every press

It and dozen including our of was new of notably a quarter accomplishments guidance three we installed which EBITDA. winning exceeding gross extremely full and end our high base growing than the more of margin international are for sales, orders a customers, meaningful proud, winning most revenue,

thank LiveVox LiveVox our For customers, partners, and suppliers, especially investors, our I’d these like to the dedicated supportive achievements, courted directors employees. our

time moments, today, brief going on many a our few results our I our Gregg the you our of to more results the and share balance progress you I’d share year. and details initiatives. CFO, In provide Clevenger, to like guidance is about the for against In with have with financial that color

successes reduce to in of our the and punctuated to important plan against QX strategic XXXX achievement milestones accelerate costs. Our by were growth

of X.X% ARR adjusted a in of the in from gain $X.X year-over-year, an grew of environment, Despite $X.X QX, grew Gross loss team XXX year-over-year. to million, and million points year-over-year. basis of continued a uncertainty $X.X macroeconomic adjusted grew improvement margin our approximately EBITDA million EBITDA quarterly

time execution of where the excellent Bookings aggressive won were efforts has and heritage record sales marketing and As substantially in last is from pronounced and the verticals expected, More of overseas these our XX a were this arose new grow levels quarter, marketing we grow sales performance management both pipeline and ahead and our our I alluded are of and than more, above, we to quarter same target. currently half ahead bookings channels. seen of stronger to outside attainment of year. customers. What’s and internal it emerging wins during combination was to than domestic sales

with XXXX entered teams to plans. less customer deriving international been support working our have sales sales, of X% international and We hard several from success than engineering quarters, markets. our expansion Over

internationally outbound result United last a of for BPO U.S.-based As quarter, into contract revenue inbound an Monterrey, million existing expansion large Dubai a a Mexico. a efforts, these in and mixed-use opportunity, $X our winning in jumped inbound bookings dramatically annual the of the including Kingdom customer MSP and solution

established admission upgrades, the costly weeks of recent of reseller limitations, traditional important of program recent to third-party we center now closed believe that DevConnect I’m architectures network Jenny. pricing organization. several to will extensive newly Avaya’s has themselves our and contact distributors, bring first growing largest enjoyed from their to rigid our and the strategy of and channel together distributor, including serving Avaya’s needs have momentum difficult service We The onboarded team Jenny brokers proud our have aperture with report anxious broadly number also old X engaged value-added cloud channel of efforts. our into that one and wins prospects shed market X in expansions, our resellers, world opening is we embraced schemes. a

consumption-based was to benefits We have platform. watched organic traffic pipeline and as contracts economic attentively alike our performance for BPOs pricing to reap moving CCaaS records Momentum in and lead record sales such engagement cloud-based our for go-to-market marketing social efforts creation. opportunity also new and accepted including website is public another quarter and want metrics of commercial the Closely new that hit and building. year-over-year. been and QX models, listening agent-based offer to now customers enterprises simple our several pricing, global

and set first bookings a bookings logo the year LiveVox XXXX our minutes new of on logo all in new platform billable fiscal already have our exceeded for record half from we June, XXXX. In

second for cycle. tailwinds into to forward the recovery potential head we the second half normal As in seasonality of consumer look the we and XXXX, a half credit

customer excited We our order are by interactions. energy in the and flow

revenues. itself We understand and with reality structural carefully business well a time process our model actual of in that to takes growth. a acceleration continue in to is it investments our revenue bookings matching this be prudent However, manifest spending long

major controlling both and focus the been a have COGS team. expenses Improving for

have You in this the in of revenue in enjoyed time gross that positive last company’s improvement adjusted in of first XX% X% margin, milestone which revenue Similarly, non-GAAP a hurdled the the dramatic EBITDA for noticed from the XX% our we QX successfully history. we year quarter. to quarter may second negative of surged margin

impact version quarter, equally say we time as close Last our our costs. of been has support of a retired us points Maintaining XX fewer that profound I nearly well. last brought product. improvement a version we quarters. retiring Each basis the has to am margin COGS we in product are and that it that five releases the XX of centerpiece reported of platform, happy I had retire efforts on X,XXX a to

of our As the to early their SMS notified unexpectedly text one originating reduce I LiveVox detailed significantly decision of platform. in in aggregators us delivery last days QX, the on quarter’s call, of messages of

Although stabilizing. both this the impact this migrated customers unexpected to on QX of to event have in did be SMS June our business or modestly and our most results, have improved other disruption and aggregators. traffic May meaningful from a issue carriers appears now been

beneficiary newly inquiries we related our to from by tailwind industry Lastly, have continue and pipeline a enjoy been AI several growth solutions introduced an to brisk characterized analysts. in AI as

call services, proactive introduced our sentiment agents virtual assist continue platform to Our new representative base to capabilities, Release of to transcription XX real-time upgrade features. staffing analysis, our agent struggle from recent Many persistent customers automated and shortages.

migration more have we legacy and leverage purpose-built with infrastructure easy provide a contact tools integrations legacy the LiveVox AI capabilities committed pricing hardened that and and million LiveVox’s held auto access in is API usage-based transformational our these Innovations cloud scale model, of XX to very It obsession bright. solution. employees enjoys, our popularity large impossible macro and And AI our commercial LiveVox to and acceptance of AI tools public to potential in technologies. customer our cloud-based virtually to centers. meeting trend of than The on-premises we of for catalyst success market’s are and that migrations our seats. center believe flexibility similar contact the other language the accelerate powerful future serve AI, only the will success, for ChatGPT enduring. models created in new is believe competitively Together

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

Gregg Clevenger

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

of X.X% Revenue of of and year $XX.X the revenue, million range quarter second second non-recurring higher minus million, the than million $XXX.X last $XXX,XXX ARR, was guided $XX quarter revenue X% million. all higher which of above to for is of high our the quarter $XX total annualized quarter for end ARR the the XXXX. than second $XXX.X was million, in

quarter quarter was steady XX%, and of than last XXX last nearly of margin points positive stayed a $X.X of and for well range. Adjusted an at quarter retention XXX% the million second better the of year. year. last Adjusted quarter improved in versus above versus XXX high second for increase XXX% guided quarter last was XXX% our basis quarter end the also EBITDA revenue the second Net points gross the basis from

the share cash with for XXX% the and and quarter cash diluted negative platform. securities. lastly, equivalents capital-light per basic $XX.X $X.XX only million million CapEx of negative both quarter a and earnings the we quarter $XX.X last cloud our of second $X.XX of share a the were product on ended And marketable quarter and reflecting per GAAP totaled $XX,XXX, the in basis of for year. nature and quarter negative versus public a last debt $X.XX

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

million be We expect X% and revenue over $XX.X million, to the XXXX. to growth $XX.X third of X% quarter third between quarter

be third margin expect to We expect and adjusted and $X our in our million. quarter $X.X million to gross XX%, EBITDA adjusted we between least at be the

million rate that provided year-over-year third to revenue expected X% for In to growth the guidance. million for guidance our in to increasing $X adjusted revenue million previously terms is fourth our X% are to implies the provided quarter EBITDA to increasing guidance X% $XXX which million quarter year versus of our we year. to $XXX full for full And lastly, the year revenue revenue XXXX, we XX% are previously $X to full our to growth guidance accelerate

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

Operator

Goldman from from Instructions] Kash, [Operator please Kash question go Sachs. And your ahead. Rangan first comes

Unidentified Analyst

questions. This guys. Hey of is for the you Thank for A Kash. question. on Jacob taking couple

touch to was Is that it wanted I year-over-year, down to roughly X% quarter, sequentially, up on ARR. but good it around anything I call very out First, noticed was X%. that? there

Gregg Clevenger

That’s SMS of an Yes. obviously, where over the year. that going quarter, the the talked this million ARR to impact we as that’s $X of remainder Gregg. million $X last going issue to revenue that about Jacob, on our we to of is have have were well. we impact of guided And impact the an

Unidentified Analyst

are Okay. you the QX far how in Understood. QX what you And that. then cycles thus in sales can and additional provide can any versus you and color macro maybe you maybe saw on touch around seeing

John DiLullo

here. is Sure, DiLullo John This Jacob.

in last off the seen start, mentioned us would say, it are slight in good times. to We does in like energy feel a we cycle QX, I had a improvement and sales that is there business. quarter I to good pretty

it’s our seem continuing in we anything in there I to prior and seeing as but we quarter customers quarters, doesn’t to pipeline and to this to order well. develop similar the business. momentum and are we energy and seen our and momentum in into broken have I that generally volume. good say would are persist think continue nice terrifically be buy, expansion And

Unidentified Analyst

so you Thank the much. appreciate I color. Awesome.

John DiLullo

you. Thank

Operator

comes question please next go from Parker Lane Your ahead. Parker, from Stifel.

Parker Lane

know I that’s to CEO the you in basis three an is how see – far? between driving do Thanks interesting What three since UK, became think international team And an of international and particular been behind just deals the we Hi taking structured the here those for brand the guys. John, you deals questions. the recognition? go-to-market really that’s afternoon. Dubai on this in Where leaning in is are Thanks. so was terms here. area Mexico. Good on force quarter?

John DiLullo

those great it’s the Thanks Parker, for is of Hey to you. transactions from a Each hear snowflake. question.

sales do And so them common they with lot But all they support. didn’t little one different. in-country are say I of a a thing bit had we would was in that

And So, relationships support although knew and doing migration wanted India in are in teams, Latin we product, our support international Colombia, some to existing the that well. either the customers as base started These existing really haven’t weren’t we to embrace think recognition EUX now to this from you or build in sales are sales cloud America support. our just I to sales out is remember the that that past, support access I may customer – some in of that our ready workloads. mostly platform, that our we the it. QX and and had of we I launched getting may announced

there the will and a from internationally lot on-the-ground it’s just So, and as going is we make our to needed, be interest – that’s base, of investments. installed springboard then,

Parker Lane

last but you customers year. I it. then a something And XX slight Got question, to last like signed think maybe follow-up

this there changes that organization, testament here. the sort that pickup a to you of or right a in the You some are receptiveness quarter. like the have is made in market is sales of now? internal more seems out just momentum finding decent XX won in It Is you there

John DiLullo

great to in the also there we are – I have types There of continue think the infrastructure logos. to capabilities lot of we earnings customers. opening aperture is lot been the – But pricing, new Obviously, tailwind were – net international three moving phrase two that aperture. of legacy narrative, do we – a logos, But and AI, the but are – the our off consumption-based we say open the would us the have customers also right by new in just a a differently and there a that’s and and lot the use we of investing the I come enjoy open to of I customers explore are now, the I is interest of and being – those inviting energy. new would for Parker, our little it’s both. model, more would and of types to more say say I product in in a in people our marketing. engaging and bit enjoy is

I continue this the a look product at volume, looks is do are for people we more And really the We lot I transaction an getting look persistent. with the is look experience something what would resulting more this to I logos sales. think If at I quite get that’s in as a say I our is I area if while pipeline, an at funnel, where if think could yet. win new

Parker Lane

you It the questions. guys makes sense. taking Appreciate Thanks.

Operator

Piper Your from next Sandler. Jim question ahead. from please Jim, comes go Fish

Quinton Gabrielli

as Yes. on This on Fish. for ever the Jim as up Thanks pipeline good one, is sounds guys. last the Maybe following Quinton question it’s about been. our for taking

of they are of you to are want about have move most us idea record they What’s about levels bigger here. Maybe And that of compliance reasons you one the wanting competitive seen seeing of and that an two to the offerings bringing. from offering? the seeing I products much what talked is Can you have past? biggest just driving in who side? kind really cloud? pipeline so this some give the or think that what the than is talk Is are you AI are Is of why it we we the the it this? some

John DiLullo

and It’s thanks question. you, the great from to for hear

generally lot a deployed, say, of legacy the that people seeing customers – that are would not I the the We are leveraging we are are cloud. interest, on-premises

staffing what of they do now a they now do driving challenges and lot from turnover wage just the explore that of is pressure and challenges that with are to all to customers, hype on lot customers there a right options And what cost. Now, and what the legacy around people their I There explore think AI. driving can to of is they the is customers right are. also want what and those AI, is on-premises

on or that somebody we very AI care players and I across requirements, want leverage at nimbleness and want be that’s really consumption-based unique quite a solutions big we would inbound think if can’t and and I old world we the like different quickly continuum can, they look realized bring bear We of with say, sales also to that really types to of that the that you different very differentiator. offer outbound AI, your model, have applications support entire customer we we cloud. maybe to solutions gamut. the

they to our So, I to of to to deals is of People that. products flames. it’s want realize AI fanning completeness and seems we there. us the And offer leverage the public flexibility the also They cloud the as as a of think couple of their take be things. move workloads to product certainly need commercial advantage many and are. our then win our helping

Quinton Gabrielli

work looking where and seem perspective, that build saying our you. level of the of of you the looking up, more here some need moving usage, maybe the you side, a like are rates is usage at up, balances fall this there slow a consumer this a collections yet, direction more are in and kind customers are the a More Thank then think And or rates sense. cycle? Yes, lot low. we about makes all right are the at triggers some should we timing this credit have trends through to of as of come your told back, we

John DiLullo

have change a seen of Quinton. I sea a with don’t want more. Thanks all lot sudden of to that group consume a we a think customers

second it majority cases the backlog be seeing seeing jump-ups bookings new where to are are in use are logo in and in acquisitions the in think direction, I gradual the of is sustainability looking huge instance, But jump-ups you building have is to and we we of that growth business other energetic. Their in and support I seem us. – on we own I think emerging cycle But credit and levels. movements and around know in credit yet of all companies feel not does normalization doing that are that lot with. and momentum telegraphed a seem, in use quite pre-pandemic like amount for call, consumer customer ways. just for quarter back, a power cases. the yet And if well, relationships care I the there the – its engineered as comes good is doesn’t to but the back very it’s merits, that a And also more think it’s have we in not even certainly it’s half

Quinton Gabrielli

It Thank makes you. sense.

Operator

comes Your please from question ahead. next from Mike go Securities. Mike, Latimore Northland

Unidentified Analyst

Hi. This guys deal Mike. and shrinking or anticipate you. same? sizes is talk taking size about on Could for are what are the Logan seeing in Thanks initial kind do you our you for forward? staying any changes moving deal they of if And questions. growing, you Thank

John DiLullo

Hey you as and Logan, it’s to course. well, good from hear of Mike

same, the about it’s the – as periods. the about in think I same prior

like pretty Of have course, for this every two us. common we one quarter, did seems anchor quarter, but like it or we that’s deals, just

noticed really big haven’t I So, a change.

constructively as is with that as brand people getting working our bigger, am the the AI, the all earlier, – transactions plans. I from are cloud. growing, of guess acceleration list excitement does more the on getting closing of out As on-premises our is into teams is off their public around very it though, mentioned people implementation noticing quickly there our I traditional customer coming And the energy I name feel and workloads moving and

and as just a day every better getting We on that. better company are

think as we So, and to better and implementing but that faster I see customers not velocity, will bookings bringing at also these well. better – optimistic to do I will am only revenue get them we continue

Unidentified Analyst

in to any guys you. AI are with cases up, you about? then or being that Thank excited Perfect. there use like highlight is guys would interest you And the

John DiLullo

all I think use about excited we of cases. are the

about contact this but people, hard XX% I demographic is that very XX% center, is is technology to in think underlying the fully at about you you know total the industry keep contact and there do a the it’s of run level the centers the a big staffed, operating rely right on issue the is now of when also people. some that you cost contact and center

opportunity the And is contact cost, XX% that arbitrage is the center, to so which some enormous of people. of running cost the that of

And we as you by rep they service when can cases, about as time think Assist XX% leveraging models Agent wrapping or as average in so Release their wrap, And customer the language customer have rep of call. some rep, for instance, the we out or in a product, in our can up you which may success support XX, that technical XX%. like spend large is see much reduce

to for back productive times. made And their to by an that of agent you costs spending you back so have XX% center, reduce you hire if you which more, wrapping you essentially, time, calls, given burst time required them have XX% and less have is up or more or contact or can them people given the have

people help And it think an the we broad going just better think the incredible lot these contact that technology and virtuous in running their a right to great We around very so of things. have lot we be efficient contact much the noise there help AI for to brush, is it’s but of a AI centers – drive that to providing will is fun. operators, and are more less And people it with just center immensely hopefully, more is is task there training, connection operators. turnover, also jobs all now, solutions our in the make and that us between and a general

every it’s so better good and And all day. it’s just getting

Unidentified Analyst

my for Thanks questions. taking

Operator

you go [Operator from Matthew Harrigan. Matthew, are Hi, ahead. Your please next line on the Instructions] comes question now. Matthew

Matthew Harrigan

in Could update what on FedRAMP you. this timeline did. seeing province never are a am benefits. And is I Thank the which also, process, the know have is AWS, you of and the us I the as I much sorry, button, of but cybersecurity I you just mute the gas environment.

John DiLullo

that? the – your would you part second you mind would repeating of Matthew, question,

Matthew Harrigan

but just with is seeing what is now ours. your interest particular Thank cybersecurity security, you. AWS environment know the are much of responsible a of I right you for

John DiLullo

great Those Excellent. very is Okay. are prepared a us. didn’t interesting it but for in comments, talk I about questions. FedRAMP my segment

compliant. very large have contact agencies, As of and opportunity, gigantic a centers, but all different for Department of the that a Department is a government will you of there know, while today back. big journey And these. fact, you that’s instance, They need good we Commerce, departments, to are And I This have on you Treasury, substantial started FedRAMP giving we to be commit it. made a civilian. progress a there that be halo think now. as submit a embracing update soon more to also government, and But we with financial there are FedRAMP. from more days we that segment FedRAMP will I and state do are such quarter are from local effect these the making able And for progress people approval. and that other optimistic that segments a in lot of we education, do are expect in

So, we investment. think a this is good

know And up – to number, open or exact XX on but us. are more a amount burden a I does It’s making significant don’t it of domestic TAM. We but not be huge probably it. the XX. excited it’s

type that their of question, put own our or such on private of so systems. than reason do is you a make is, architecture to believe diligent is cloud. secure a are but to that traditional patching environment have that have just center center anything infirmities someone environment As of strides, we for their inherently lot of in own contact is of as we not and and don’t going The because in they We area infrastructure hosting open And business, and far systems know, contact discovered. an updating type on have a to yourself that that a security part errors. you operating of are about are this updating tons the continued images to operating is as and I a – only also really more your hardened they whenever AWS of to AWS in where maintains infrastructure involved any do get you when and you

to demanding major in are say, this that finance they architecture. Now, and that is security been the strongest We contact API every a the our in encrypt we when listen selling the we of old vertical. to you to Think all about And embrace as customers, in in what this we large And posture have. voice our where encrypt legacy points sure we of you quite communication. a addition number zero-trust product I was making one contact introduced a single have our center. also the And know, of our would enterprises could security of jack center have customers in days, that we in that and traffic. just happening

All our voice communications are encrypted. of

motion All is data rest encrypted, all in at of of our encrypted. our data is

our within of all are of API micro APIs traffic and infrastructure our All between encrypted services the AWS is encrypted. also

double are So, encrypted. our calls API many of

not level to available to a are our have that platforms we So, end or most advanced of we And architecture. providing for zero-trust I is contact the further because people with – it the should top the I It secure – hurdled don’t the mind. solutions have about think I question the feel it. center heralded like approached say, degree, mind for how we us top deploying among we it I you and may But lot. tell ask can’t customers. a be much we for appreciate way of have our of

have product. AWS, think I we together secure working with very so a And

Matthew Harrigan

Nice Thanks. quarter.

John DiLullo

Thank you.

Operator

I There questions remarks. at closing time. will John are no this turn for it to back further

John DiLullo

over here I to your thank weeks look for more great to and thank the time you very very this and partners forward you to continuing us I questions. their afternoon you Thanks for everybody to with Thank want much. stay genuinely – do to much and and Thank appreciate as talking coming want months. days, investors and

Operator

lines. Ladies your your participating and conference you that and please today. thank gentlemen, for We this ask disconnect for call you concludes

LiveVox (LVOX) 8 Aug 232023 Q2 Earnings call transcript