LivePerson, Inc. Q1 FY2025 earnings call

Product Strategy - Differentiation: Focus on agentic orchestration with advanced AI tooling and generative insights, e.g., a health insurance provider boosted intent match rates. - High-Value Innovation: 14% increase in customers using generative AI tools and 25% sequential increase in generative AI-powered conversations; global luxury fashion company and large bank renewed/expanded partnerships. - Foundational Capabilities: Continued contact center/communication capabilities, e.g., integration with Amazon Connect launched, and partnerships to reimagine mobile experiences. ### Go-to-Market: Partnerships growing, on track for 35% partner attached goal; simplified pricing strategy with bronze, silver, gold packages; large deals shifted to Q2 due to extended buying cycles but positive momentum in Q2 and strong pipeline. ### Customer Wins: 50 deals in Q1, including 5 new logos and 45 expansions/renewals, leveraging generative AI capabilities.

Total revenue in the first quarter was $64.7 million. Hosted services revenue was $55.1 million, down 23% year-over-year. Recurring revenue was $60.4 million, or 93% of total revenue, and down 22% year-over-year. Professional services revenue was $9.6 million, down 30% year-over-year. Geographically, U.S. revenue was $40 million (62% of total) and international revenue was $24.7 million (38% of total). Average revenue per customer was $640,000, up 2% year-over-year. RPO declined to $221 million. Net revenue retention was 80% in the first quarter.

Full-Year - Reaffirmed revenue guidance: $240 million to $255 million, ~93% recurring. - Q2 revenue expected: $57 million to $60 million (sequential decline). - Adjusted EBITDA full-year guidance: loss of $14 million to break even. - Q2 adjusted EBITDA expected: loss of $4 million to $2 million. - Net new ARR expected positive in the second half of the year.

• Macro environment causing elongation of sales cycles. - AI demand adding new approval gates for risk and compliance, which may impact deal timing.

Q: Ryan McDonald asks about sales cycle elongation from deals slipping from Q1 to Q2 and progress on those slipped deals.

A: John Collins and John Sabino say macro environment plays a role, but deals didn't shrink, some expanded; Q2 progress on those deals is on track.

Q: Ryan asks about Amazon Connect integration launch in Q2.

A: Early interest, aligns with differentiation, positive impact on go-to-market.

Q: Mike Latimore asks about renewal rate trend and pipeline.

A: Renewal rate improving, pipeline improved over last year; no specific quantification of pipeline but improving across the board.