LivePerson, Inc.

Good afternoon, ladies and gentlemen. Thank you for standing by. Welcome to LivePerson's second quarter 2021 earnings conference call. My name is Victor, and I will be your operator today. At this time, all participants are in a listen-only mode. After the prepared remarks, the management from LivePerson will conduct a question and answer session, and conference participants will be given instructions at that time. To give everyone the opportunity to participate, Please limit yourself to one question and one follow-up only. As a reminder, this conference is being recorded. I would now like to turn the conference over to Mr. Alan Katz, Vice President of Investor Relations.

Thank you. Joining me on the call today is Rob Lacascio, LivePerson founder and CEO, and John Collins, Chief Financial Officer. Please note that during today's call, we will make forward-looking statements which are predictions, projections, and other statements about future results. These statements are based on our current expectations and assumptions as of today, August 3, 2021, and are subject to risks and uncertainties. Actual results may differ materially due to various factors, including those described in today's earnings press release and in the comments made during this conference call, as well as in 10-Ks, 10-Qs, and other reports we file from time to time with the SEC. We assume no obligation to update any forward-looking statements. Also during this call, we will discuss certain non-GAAP financial measures. A reconciliation of non-GAAP, GAAP to non-GAAP financial measures is included in today's earnings press release. Both this press release and supplemental slides, which include highlights for the quarter, are available in the investor relations section of LivePerson's website. With that, I will turn the call over to Rob.

Thanks, Alan. Thank you all for joining our second quarter earnings call today. The past few years have been proven our clear leadership in conversational AI and now conversational commerce. Q2 continued that trend as live person once again delivered another very strong quarter. Revenue grew by 30.6% year over year, exceeding the top end of our guidance range. Overall volume on the conversational cloud increased by 15%, and conversations with AI-based automations also grew by 40% compared with Q2 of 2020. Our results reflect the conversational AI market continuing its strong momentum as we're crossing into a wide adoption phase. Brands are looking at conversational commerce as the next big opportunity in digital commerce as they recognize that conversational AI is the key to creating scale, personalized, unique digital experiences. Five years ago, we made a big bet to go after the space, and our first mover advantage puts us in a unique position to drive even greater growth. We're now looking to expand our go-to-market investments to capitalize on the massive opportunity we see ahead of us. Part of that investment is bringing on leaders that can drive the next phase of our growth. Tony Owens, one of the most senior sales leaders in the cloud software space, recently joined LivePerson as president of Worldwide Field Operations. Tony has a proven track record of leading sales at some of the largest high growth enterprise software companies in the world. He most recently led the field operations for Salesforce in the Americas, its largest territory. With Tony on board, we expect to ramp capacity to meet the next level of demand by aiming to more than double our quarter carrying reps and other go-to-market resources over the next six months. We believe that these investments will give us the capacity to capture an even greater share of the market. As these reps ramp up and begin to contribute, we expect to see a meaningful impact for them and are now targeting revenue growth of at least 27% in 2022. We expect these investments to help us continue to grow our base in customer care and accelerate our move into marketing, sales, commerce, and retail. Strategically, we're also doing something quite unique in how we are leveraging our conversational cloud platform to develop consumer-facing services in very large dynamic markets. One of the biggest industries that is going to be transformed by AI is healthcare. The idea that we can truly personalize healthcare and put consumers at the center of their own data will reshape the healthcare industry. In a recent health tech report, Deloitte noted that in 2020, over $14 billion of venture funding was invested in health tech companies, and more than $6 billion went into digital solutions for data and platform innovators or remote monitoring solutions with AI or machine learning capabilities, seen as table stakes. At the beginning of this year, we quickly entered into the AI health space. In the first half of the year, we developed and launched a diagnostics and testing platform called Bella Health, built on top of the conversational cloud. We were able to move very quickly because 80% of this new offering was built using the power of our core platforms. As we discussed last quarter, the first contract for our offering was related to rapid in-home COVID-19 tests, and COVID testing has become an overall catalyst for increased development of new offerings for the entire medical diagnostic industry. We delivered the Bella Health app and the first set of corresponding tests ahead of schedule, and the timing of these deliveries led to some of the outperformance versus guidance we achieved in Q2. The business model for Bella Health is we charge each time the app is used to administer a test. We're paid from the partner test diagnostic company. Although this revenue is a little more variable than our core business model, It enables us to quickly catch more upside, as we saw in Q2. Given that we're still early in developing this business, we're going to see how volumes materialize over the next few quarters before we embed any potential upside from testing into our long-term outlook. The Bella Health platform will also be used to deliver other testing solutions for things like flu, strep, HIV, as we're partnering with a few global medical diagnostic companies on the next phase of other testing solutions. Beyond testing, we've also launched a messaging and AI automation solution for a number of global healthcare companies. We also signed a new logo deal and one of the largest urgent care provider networks in the US to implement a fully automated customer interaction system to ensure they can schedule appointments and answer patient inquiries remotely. It's still early, but the medical diagnostic and healthcare markets generally represent a significant opportunity for us. So more to come on this over the next few quarters. Another vertical we are seeing tremendous opportunity and we have a first mover advantage in is the blockchain and crypto space. This is an industry that has been expanding by 80% to 100% annually with over 100 million people now involved in buying cryptocurrency. We signed a contract with one of the world's largest cryptocurrency exchanges last quarter and have already signed a new expansion opportunity during the quarter with them. We also signed an agreement in Q2 with ConsenSys. a leading blockchain technology company to provide conversational AI support for its blockchain and crypto communities. We're going to start with their crypto wallet MetaMask, which has over 8 million monthly active users, providing them with a simple and convenient option to start an immediate conversation with an AI and access educational information on demand. This new AI-powered conversational support will add onto existing extensive support for MetaMask users, and it aims to improve the speed in which support is delivered. Brands in the crypto blockchain space are fast moving with incredible technology, but they're generally not equipped to handle the customer engagement and communication needs of a sophisticated consumer base that's tech savvy. These consumers are looking for 24-7 immediate, intelligent, and asynchronous customer care from these brands. Our platform allows them to be on-device and always-on, leveraging messaging-based AI-first approach to meet consumer needs. Our early success is being driven by both our technology and our ability to scale quickly and effectively to match the fast growth of these brands. We're also continuing to see tremendous demand in traditional brick and mortar retail sector as there is continued move to create personalized scale digital commerce experiences over messaging using conversational AI. In Q2, we signed a seven figure deal with a leading retail marketplace and are deploying our gain share model to manage both messaging and voice. We're seeing more opportunities to take over voice operations of our brand, which gives us greater control over transforming voice to messaging using conversational AI. By working with us on voice as well as messaging, this brand is aiming to drive consumers to automated messaging interactions to increase self-service and improve response times. They're using our platform for both care and commerce, and we see this as a great long-term relationship with the potential to expand in the near future. This brand is also using our advanced AI-powered analytics and management tools, including Intent Manager, to build out traditional automations and ultimately to drive strategic business decisions. We also signed and implemented one of the largest brands in the paint and coat manufacturing industry. We started with a care use case focused on automating answers to common inquiries and driving transactions by engaging buyers in messaging while they were shopping online. Using our messaging platform, they have seen a three and a half times increase in conversion to sales compared with their prior self-service approach and also an increase in local store sales. They are also going to use our messaging platform for proactive marketing engagement and additional integration with some of their other marketing tools. When we were originally looking at our TAM back five years ago, we did not have companies like this in it. And what we're really seeing is messaging being used not only for communications, but as a framework for deploying a myriad of unique digital experiences. In Q2, we also started to see increased demand from brands using our newly released social media integrations as we push into adjacent channels. By adding social, we are able to deliver a more seamless consumer experience and enable brands to consolidate consumer connections into a single platform. Social media communications market is estimated to be a $5 billion market and growing. Brands are coming to us for a fully integrated automated messaging solution, which can also incorporate social data trends into the intelligence of using AI for targeting consumers around specific intents. Along the same trend of managing end user engagements through a single platform, we had several brands that are power users of social media move their social media communications to us. One of those brands is a leader in streaming music. They had a very large social media implementation with a well-known entrenched competitor, and they decided to consolidate the social onto our conversational cloud. This enables them to fully integrate it with all their other messaging communication channels that they do with us. This is a big win on top of a handful of others in the space that we will leverage to accelerate our go to market and social. We had a vision five years ago that messaging would become more pervasive than web and apps one day in delivering unique and powerful digital consumer experiences. We started out competing in traditional voice contact center market, and now we see a host of other opportunities in the consumer experience area. This quarter marked a new chapter in reaching our vision, and we're excited about this new phase in our company's journey. And with that, I'll now turn the call over to our CFO, John Collins, for an operational update and a discussion on our guidance. John?