LivePerson, Inc.

Good afternoon, ladies and gentlemen. Thank you for standing by. Welcome to LivePerson's first quarter 2023 earnings conference call. My name is John, and I'll be your conference operator today. At this time, all participants are in a listen-only mode. After the prepared remarks, the management team 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. As a reminder, this conference is being recorded. And I would now like to turn the conference call over to Mr. Chad Cooper, Senior Vice President of Investor Relations. Thank you. Please go ahead.

Thank you, John. Good afternoon, everyone, and thank you for joining us today. On the call with me today are Rob Lacascio, five-person founder and CEO, and John Collins, Chief Financial Officer. Please note that during today's call, we will make forward-looking statements with our predictions, projections, and other statements about future results. These statements are based on our current expectations and assumptions as of today 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 the comments made during this conference call and 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 non-GAAP financial measures. Reconciliations of GAAP to non-GAAP financial measures are included in today's earnings press release and the supplemental slides where applicable. Both the press release and supplemental slides, which include highlights of the quarter, are available on the investor relations section of LivePerson's website. Finally, I'd like to remind everyone that we are here today to talk about our first quarter of fiscal year 2023. As you may be aware, a shareholder has announced its intent to nominate candidates for election as directors at the company's 23 annual meeting of stockholders. The company intends to file definitive proxy materials related to the 2023 annual meeting in due course. Stockholders of the company are strongly encouraged to read the company's definitive proxy statement, the accompanying proxy card, and all other documents filed with the SEC carefully and in their entirety, as they contain important information. Information regarding the identity of the company's participants and their direct or indirect interests by security holdings or otherwise will be set forth in the definitive proxy statement and other materials filed by the company with the SEC. Stockholders may obtain copies of these documents for free through the company's website or through the SEC's website at sec.gov. We will not comment further on this matter on this call. We appreciate you keeping your questions focused on live persons' performance and results. With that, I will turn the call over to Rob. Rob?

Thanks, Chad. Good afternoon, and thank you for joining us for our first quarter 2023 earnings call. LivePerson had a really good quarter, generating revenue of $108 million while narrowing our EBITDA loss to $1 million as we continue to execute on our profitability goals. Total revenue was at the high end of the range, and adjusted EBITDA was well ahead of the guidance range. We continue progressing on the business initiatives crucial for our next phase of growth, including a narrowed focus on our B2B core and right-sizing our expenses. We are reaffirming total revenue and adjusted EBITDA guidance for the full year, and John will provide more detail on the financials shortly. For the company, our employees, and our customers, May 2nd was the start of the next leg of our journey with the launch of our new generative AI products and platforms. The changes we implemented over the past five quarters, including removing non-core revenue divesting of our consumer business gives us a solid operating foundation to support our growth and focus on the opportunity we see from the core business. We've always completed, we also completed the consolidation of certain go-to-market functions, which will meaningfully improve our P&L going forward. Our company is at an inflection point, and with the changes we have implemented, we are poised to accelerate profitable growth in the periods ahead. We have set our sights on becoming one of the largest and most effective enterprise AI companies as we have the advantage of our early entrance into AI five years ago. We believe that generative AI will significantly accelerate our existing traction in delivering high-quality automation and business outcomes to the enterprise. Most AI models are trained with tens of thousands of AI-generated conversations labeled by employees or freelancers. Live person hosts billions of conversation with our enterprises and consumer conversations with the input of 350,000 live experts on our platform, coupled with 250,000 API endpoints that enable not only engagements but also transactions, this approach is imperative to enable generative AI in the enterprise. Our generative AI advantages are rooted in our precision data set and 350,000 customer surveyed agents on our platform generating the quality data, our secure guardrails protecting our customers and their data, and integrations into our customers' backend systems, which allows us to do transactions and outcomes. Those of you who joined our product launch event last week saw that LivePerson could customize and tailor responses to suit the situation and reflect the brand's voice. with the largest customer conversational dataset and a very strong platform for handling the data. Additionally, the voice-based acquisition has been a key accelerant to driving the efficacy of our data and allowing it to be prepared to scale with the new AI large language models. LivePerson is a global leader in conversational AI. Hundreds of the world's leading brands, including HSBC, Virgin Media, Chipotle, use our conversational cloud. We power nearly a billion conversation interactions every month, providing a uniquely rich dataset to build connections that reduce costs, increase revenue, and are anything but artificial. We use this dataset and expertise to act as the assembler so that the responses are grounded and the large language models only use these to generate high-quality responses. It can't be overstated how important it is that LivePerson can leverage the humans in the loop on our platform. Over 350,000 skilled humans are using the live person platform, continually training and refining answers to provide the risk mitigation or guardrails necessary to help enterprises safely leverage generative AI. This ensures that all AI conversations are grounded in facts and relevant to our brands, that we reduce what they call hallucinations. And I really feel that one day, if we look at the asset value of the company, our data set alone has such a tremendous value because of its uniqueness in providing high-quality outcomes. One of the most important aspects of our platform is that they combine high-quality conversation using large language models and AI actions that generate sales and service outcomes due to our deep integration to the backend systems. And our tenfold acquisition also supports these integrations as a key pillar. And when we look at working with brands, I've been out with them recently, many of them talking about this. The biggest part they're looking for is the outcome of the action. What we're seeing in most things when it comes to large language models is we see that the conversation is natural and it gives good responses, but we don't see usually an outcome like a sale or service outcome. And that's where we really shine. We have over 250,000 APIs integrated into our system today that provide those outcomes. So as many of you watched on May 2nd, you may have also saw that we have plans to delivering AI in a different way, which we call an EIA framework. And the E indicates our commitment to AI that is equal, enterprise grade, and for everyone. And unlike what we talk about with open AI and just openness as a general term, we think EAI is much more focused on what our customers want in the enterprise. It takes the power of generative AI and large language models, but assembles them with the right data set and training that allows us to deliver outcomes in a safe and responsible way. And with the release now of our voice AI platform, we can integrate all of that into voice platforms like a Genesis or Amazon Connect or Five9. And this will help us accelerate what we set out to do seven years ago. As you know, I fundamentally believe that Traditional voice calls with agents was never the way of the future. And now we will accelerate those conversations to get automated at a very high rate. It's about a $60 billion TAM. And what I could see now is I think we can get to a place where 80% of those conversations can get automated, that we don't need human beings anymore taking those calls. And I think that'll happen over the next five years. So we're really excited about the opportunities. And obviously, all the work we did in the last couple of months is really about restructuring the business to be able to focus on this big opportunity. And obviously, we had to put a lot of effort into that restructuring. But now we can put 100% of our focus into growth. And that's where we are today. When we look at the quarter, we signed 70 new deals in the quarter, including four seven-figure deals, 50 expansions, renewals. 20 new logo deals, and we completed the restructuring of our go-to-market teams in Q1. We did put a focus on more and higher quality logos than we usually do in the mid-market and small business. We're shifting in that area because we see with this technology now, we can do a lot more transformation. So we are focused on that during the quarter, and that'll continue forth into Q2. We did sign a four-year, seven-figure deal with Europe's largest bank and financial services company. Our immediate goal with this brand is to plan a generative AI strategy that puts LP at the core of everything, how they engage with their customers and their employees. And they serve 23 markets today. I think what's interesting about this deal, it's our third, I believe, second or third renewal with them. And even in the face of everything going on with generative AI, they want to put it on a platform that can allow them to do it in a way that generates the outcome in a safe and secure way. And so I think it's just a testament once again of how are we playing in the market with this new shiny object and how do we make it real when it comes to bringing it to the enterprise. We also signed a seven-figure renewal deal with one of the largest multinational telecommunications companies in the world. This brand increased customer adoption of messaging with comprehensive use of our AI suite, like Conversation Builder, Conversational Assist, and Proactive Messaging. We're now going across care, obviously sales, retention complaints, and we're expanding our relationship with them once again as we expand using this new technology. We also landed a seven-figure renewal deal with a multinational financial services company and the largest bank in Canada. This brand doubled its LP investment in the spring of last year, leveraging our automation services. In four months, our automation already powers 35% of all their conversations, which is climbing daily as we optimize the operation with our dedicated automation team. Volume is critical for them, but also the quality of the conversations is what we deliver on a day-by-day basis. In that deal, we beat out Salesforce and Genesis for this engagement and are pleased what we're doing with them on deployment so far. Also important to note that one of our large Fortune 500 health insurance providers set a global goal to shift 50% of their call volume to messaging to achieve further operational efficiencies, providing meaningful upside to our engagement with the client. And this is also with, we're taking that volume out of one of the traditional contact center players. We landed a seven-figure deal with a large healthcare service provider. We'll begin their journey with web messaging and move quickly into IVR deflection and proactive messaging. Finally, a large retailer in the UK has embarked on a five-year transformational plan with digital technology playing a key component. Phase one is to deploy our technology for care, focusing on reducing the contact center costs. And then phase two is to remove one of the ticketing platforms and turn that into an asynchronous integration where we're delivering the large language models and delivering a better consumer experience than traditional ticketing. The final restructuring Q1 enables us to focus on driving profitable growth at a scale that will match the demand now in the market for enterprise AI. Now that we have that you know, restructuring behind us, we can return to focusing on all efforts on engaging the growth engines and bringing our new products and platforms to our brands. We're in a really unique position right now when it comes to generative AI and bringing it to the enterprise because of our history with them and our trust with them. And they've used these tools with us, so now they just want to accelerate the use of these technologies when it comes to scaling their operations, especially in the contact centers. But it's not only limited there. There's already a bunch of customers that are using us for, like, HR use cases and IT use cases. So I think as we see where we want to go with the platform, we will continue to expand into use cases that leverage what we've learned in the contact center to go after other business units. And with that, let me now turn the call over to John, who will discuss the financial results. John?