Release Date: May 08, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- LivePerson Inc (LPSN, Financial) reported Q1 revenue of $85.1 million, surpassing the high end of its guidance range, driven by successful efforts to retain at-risk customers.
- Adjusted EBITDA for Q1 was $0.5 million, above the midpoint of the guidance range, reflecting effective cost reduction measures.
- The company successfully repaid the full outstanding $72.5 million principal amount of the 2024 notes, improving its capital structure.
- LivePerson Inc (LPSN) is set to announce a strategic partnership with a major global CCaaS player, aiming to enhance its go-to-market capabilities and product offerings.
- The company has introduced new pricing and packaging strategies to simplify customer transactions and is seeing positive early results from pilot testing.
Negative Points
- Despite the revenue beat, Q1 revenue was down 21% year-over-year, primarily due to customer churn and the exit of non-core business lines.
- Net revenue retention decreased to 89% in Q1 from 95% in the previous quarter, indicating challenges in maintaining existing customer revenue.
- Professional services revenue declined by 33% year-over-year, largely due to the completion of a major engagement in Q1 2023.
- The company experienced a significant decrease in deal counts and values in Q1, with deals down 43% year-over-year and 35% sequentially.
- LivePerson Inc (LPSN) is facing ongoing challenges with its debt structure, particularly concerning the 2026 notes, which may affect customer and market confidence.
Q & A Highlights
Q: Can you expand on the common traits of customers that churned off the platform?
A: (Jon Perachio) - Some customers churned because they sought enhanced functionality, specifically the ability to customize the agent workspace, which was not on our roadmap. Others churned due to platform consolidation needs, which we aim to address with our upcoming strategic partnership.
Q: What caused the disruption to Q1 sales cycles and bookings?
A: (John Sabino, CEO) - The disruptions were partly due to customers waiting for updates on our debt situation. Additionally, necessary restructuring and new processes in our go-to-market strategy temporarily slowed things down but are expected to yield positive changes in the upcoming quarters.
Q: How is the new pricing and packaging strategy expected to impact sales?
A: (John Sabino, CEO) - The new strategy simplifies the deal-closing process, offers more economic value, and is competitively priced, which should enhance deal velocity and win rates.
Q: Can you provide details on the financial impact of Wild Health for the quarter?
A: (John Deneen Collins, CFO) - The losses from Wild Health are expected to be well under $10 million for the year, with further reductions from actions being taken to sell or wind down the business.
Q: What are the expectations for the strategic partnership mentioned?
A: (John Sabino, CEO) - The partnership with a major global CCaaS provider aims to meet customer demands for an AI-powered, unified customer service platform across voice and digital channels, which should help reduce churn and enhance customer retention.
Q: What are the projected financial results for the upcoming quarters?
A: (John Deneen Collins, CFO) - For Q2, revenue is expected to be between $76 million and $80 million, with adjusted EBITDA ranging from $0 to $5 million. The full-year revenue guidance remains at $300 million to $315 million, with adjusted EBITDA guidance of $15 million to $26 million.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
