LivePerson, Inc. Q3 FY2025 earnings call

• Debt refinancing agreement closed, resolving customer concerns. - Cost restructuring executed to reduce cash burn. - Revenue for Q3 was $60.2 million, above guidance; adjusted EBITDA was $4.8 million, also above guidance. - Generve AI suite adoption growing, with nearly 20% of conversations using generative AI. - Recognized in Gartner Magic Quadrants for conversational AI and digital customer service. - Partnership with Google: integrated with RCS platform, launched Copilot Translate. - Introduced Conversation Simulator, a transformative product for testing/training AI and human agents. - 28 deals signed in the quarter, including 2 new logos and 26 expansions/renewals, with 14% sequential increase in deal value. - Traction in regulated industries like banking, healthcare, telecom; significant renewals/expansions, e.g., 7-figure deal with a US health plan provider.

Total revenue for the third quarter was $60.2 million, exceeding the high end of guidance. Hosted services revenue was $51.2 million, down 18% year over year. Recurring revenue was $55.1 million, accounting for 92% of total revenue. Professional services revenue was $9 million, down 23% year over year. U.S. revenue was $37 million (61% of total), and international revenue was $23.2 million (39% of total). Average revenue per customer was $665,000, up 6% year over year. Net revenue retention was 80.4%, up from 78.2% in the second quarter. RPO declined to $182 million.

• Raised full-year revenue guidance to $235 million to $240 million (up $2.5 million midpoint). - Raised full-year adjusted EBITDA guidance to $7.5 million to $12.5 million (up $8 million midpoint). - Q4 revenue guidance: $50.5 million to $55.5 million. - Q4 adjusted EBITDA guidance: $0 to $5 million.

Q: Geoff Henry (via Daniel Hipschman) asked about factors driving revenue upside.

A: John Collins said it was due to timing of deals (some moving from Q4 to Q3) and variable revenue.

Q: Follow-up on competitive landscape for Conversation Simulator.

A: John Sabino discussed that Conversation Simulator is unique as it addresses both AI and human agents, has an open architecture, and provides dual capabilities in a unified platform.

Q: Question on modeling and Q4 EBITDA beat.

A: John Collins explained that the timing of cost restructuring effects led to the beat in Q4, with the full effects being felt in Q4 and 2026.