Release Date: July 31, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- LivePerson Inc (LPSN, Financial) successfully closed a deal with Lynrock Lake, significantly improving its capital structure.
- The company reported revenue of $79.9 million for Q2 2024, at the high end of its guidance range.
- Adjusted EBITDA for Q2 2024 was $8.2 million, above the high end of the guidance range.
- LivePerson Inc (LPSN) launched new pricing and packaging ahead of schedule, simplifying contracts and reducing add-on costs.
- The company saw a 20% increase in the number of customers adopting Generative AI, with over 6 million conversations powered by this technology in the last quarter.
Negative Points
- Revenue from B2B hosted services was down 17% year over year.
- Net revenue retention was 83% in Q2 2024, down from 89% in the previous quarter.
- The number of deals signed in Q2 2024 was down 8% from the first quarter.
- Revenue is expected to decline sequentially through the year due to customer cancellations and down sales.
- The company divested Wild Health, which was operating at a significant loss, impacting overall revenue.
Q & A Highlights
Q: Can you expand on the net new ARR, bookings, and churn relative to expectations in the quarter? Did churn meet expectations? Were bookings ahead?
A: Broadly speaking, churn was a little better than previously expected. New deals were up 58% sequentially, though slightly lower than expected. Overall, new ARR improved considerably from the first quarter to the second. β John Collins, CFO and COO
Q: Regarding the direct sales motion and win rates, how has this trended over the last six months?
A: The win rate has improved quarter over quarter. The quick rollout of new pricing and packaging, along with stronger customer success motions and new AI capabilities, have been attractive to new logos. We expect further improvement as our new CRO, Sandy Hogan, ramps up. β John Sabino, CEO
Q: What would you attribute the improved churn to?
A: The improvement in churn is driven by better customer engagement, additional value from our AI capabilities, and the strategic partnership confidence post the Lynrock Lake transaction. β John Sabino, CEO
Q: Can you provide more details on the financial impact of the Wild Health divestiture?
A: The divestiture was accretive to earnings, saving an estimated $3 million to $5 million in full-year expenses. LivePerson did not retain any interest or obligations to Wild Health, limiting potential liabilities. β John Collins, CFO and COO
Q: What are the key highlights from the second quarter in terms of deals and customer wins?
A: We signed over 37 deals, including 9 new logos and 28 expansions and renewals. Notable wins include a 7-figure upsell with a global financial services company and a new logo win with a large New Zealand-based telecommunications company. β John Collins, CFO and COO
Q: How has the new pricing and packaging impacted customer acquisition and retention?
A: The new pricing and packaging, launched ahead of schedule, has been well-received. It simplifies contracts and reduces add-on costs, making it easier for customers to scale and see value, contributing to improved retention and new customer acquisition. β John Sabino, CEO
Q: What progress has been made in the go-to-market strategy and partnerships?
A: The transaction with Lynrock Lake removed significant hurdles, and operational improvements have added value. The new pricing and packaging, along with strategic partnerships like Avaya, have strengthened our go-to-market motion. β John Sabino, CEO
Q: Can you elaborate on the adoption and impact of Generative AI among your customers?
A: Over 70 customers, including 23 of our top 100, are using Generative AI. Adoption has grown 20% since last quarter, with significant improvements in customer satisfaction and operational efficiency reported by users. β John Sabino, CEO
Q: What are the financial expectations for the third quarter and full year?
A: For Q3, we expect revenue between $69 million to $73 million and adjusted EBITDA between $0 million to $5 million. For the full year, we maintain our revenue guidance of $300 million to $315 million and adjusted EBITDA guidance of $15 million to $26 million. β John Collins, CFO and COO
Q: How has the transaction with Lynrock Lake impacted customer confidence and business renewals?
A: The transaction has reinforced customer confidence, leading to key renewals and expansions, including with two of the largest telecommunications companies and a top investment bank. β John Collins, CFO and COO
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
