LivePerson, Inc.

Good afternoon, ladies and gentlemen. Thank you for standing up. Welcome to LivePerson's first quarter 2025 earnings conference call. My name is Jamie, and I will 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 the conference participants will be given instructions at that time. To give everyone the opportunity to participate, Please limit yourselves to one question and one follow-up. As a reminder, today's conference call is being recorded. At this time, I'd like to turn the floor over to Mr. John Perracchio, Vice President, Investor Relations.

Thank you, Jamie. Joining me on today's call is John Sabino, CEO, and John Collins, CFO and COO. Please note that during today's call, we'll 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, May 7, 2025, 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 the conference call, as well as in any 10-Ks, 10-Qs, and other reports we file with the SEC. We assume no obligation to update any forward-looking statements. Also during this call, we'll discuss certain non-GAAP financial measures. A reconciliation of GAAP to non-GAAP is included in today's earnings press release. Both the press release and the supplemental slides, which include highlights for the quarter, are available on the investor relations section of LivePerson's website, ir.liveperson.com. With that, I'll turn the call over to LivePerson CEO, John Sabino.

Thank you so much, John. Thank you all for joining us today. Let me begin by highlighting what sets LivePerson apart in today's rapidly evolving market. LivePerson has a proven track record of partnering with enterprise brands across both regulated industries, such as financial services, healthcare, telecommunications, and non-regulated industries, including retail, travel, and hospitality. As organizations accelerate their digital and AI transformations, they rely on LivePerson as a trusted partner to help guide them through their journey forward. Our strength lies in combining deep first-party expertise with a broad ecosystem of trusted partners to deliver a unified AI-powered platform for voice and digital engagement. The live person platform brings together live agents, intelligent automation, and advanced analytics seamlessly orchestrated across all channels and third-party systems. The result is consistent, contextual customer experiences that drive real business outcomes. Our value is clear to enterprises weighed down by legacy CX infrastructure, like outdated chat systems, on-prem technology, and early generation CCaaS platforms. LivePerson provides the flexibility to adopt AI and digital capabilities within a single platform without the need for a costly rip and replace. We call this innovation without disruption. This strategy positions LivePerson as the partner of choice for enterprises addressing today's customer and workforce experience challenges. Whether they're out front with AI looking to scale their advantage or stuck behind legacy tech and internal blockers, we meet them where they are and help them move forward. By addressing the full spectrum of enterprise needs with speed, flexibility, and focus on outcomes, we are well positioned to lead in the rapidly evolving market. Before we dive deeper into our product and go-to-market updates, let me briefly discuss our high-level results for the first quarter. Revenue in the first quarter of $64.7 million was above the midpoint of our guidance range. And adjusted EBITDA of 0.2 million was above the high end of our guidance range. John Collins will provide more detail about our financials, but I want to underscore that we are continuing to deliver on our financial commitments and executing on our turnaround. Now let me move to our product update. We structure our product strategy around three core dimensions. each essential to delivering greater value for our customers and reinforcing live person's position as a market leader in enterprise digital engagement and conversational AI. These dimensions are differentiation, high value innovation, and foundational capabilities. Our differentiation comes from a focus on agentic orchestration with leadership in advanced AI tooling and unified analytics and generative insights. A great example of this is a health insurance provider that wanted to improve the accuracy of their inquiry routing while reducing maintenance labor. By implementing our AI agent capabilities, they boosted intent match rates from 70% to 90% in just two weeks and cut human agent conversation times by 30%. The results were more efficient operations, enhanced customer experiences, and substantial cost savings. Our platform integrates generative AI with customer data, business logic, and third-party agentic bots and tools to power personalized, context-aware interactions at scale. This keeps LivePerson at the center of the customer experience, orchestrating engagements even as the ecosystem around us continues to shift. It's our core driver of differentiation and competitive advantage, establishing LivePerson as a system of action and intelligence for enterprises. This is not just about automation. It's about delivering real-time, goal-driven experiences that span digital channels, voice, and backend systems. Much of this is what we're doing now, and our roadmap is designed to accelerate it, keeping pace with new technologies and evolution of foundational models. Second, we're delivering on our high-value ad capabilities that extend our leadership and generative AI. This includes our AI Builder and AI Blueprints, next-gen tools for building and managing and analyzing AI-driven conversations, along with core generative AI agents for key use cases like FAQs, data collection, and routing. We'll also continue to expand our industry-leading offerings with unified analytics for real-time AI-powered insights and AI assistance and agent co-pilots that significantly improve agent productivity. These are capabilities that are already driving measurable impact. In Q1, we saw a 14% increase in the number of customers using our generative AI tools and a 25% sequential increase in conversations powered by generative AI. These are not abstract metrics. They represent real value delivered to real customers. For example, a UK-based telecom company and a leading solar company are now using generative AI in 80% and 90%, respectively, their customer conversations. In addition, a global luxury fashion company and one of the world's largest banks renewed and expanded their partnership with us, deciding our leadership in generative AI and enterprise-grade guardrails. The final dimension of our product strategy is about maintaining our foundations with evolving consumer expectations. We continue to deliver the essential contact center and communication capabilities our customers depend on. This foundation is critical to running day-to-day operations and delivering a consistent, reliable customer experience. It includes a broad range of connectivity across digital, social, voice, and email channels. We also offer standardized APIs and SDKs that make integration easier for enterprises, partners, and developers. For example, our previously discussed integration with Avaya allows brands to unify digital and voice experiences without disrupting existing IT environments. This quarter, We're launching the same integration with Amazon Connect and building new connectors that make it easy to bring virtually any voice system into our AI environment. We're also preparing to launch and innovate an email solution, recognizing the continued importance of this channel and positioning ourselves ahead of the AI revolution within it. In addition, we've partnered with a leading global bank to reimagine in-app mobile experiences using our SDK. and it's already powering millions of customer interactions every day. These are just a few examples of how our foundational innovations continue to drive strategic value for our enterprise customers. Executing on our product strategy and evolving it over time will ensure that we continue to support enterprises at scale with AI-powered orchestration across all touchpoints. It will help accelerate adoption of our product and strengthen our partnerships with our enterprise customers. I am confident that this strategy, closely aligned with our customers' priorities, will position LivePerson as a partner of choice for brands seeking to innovate and lead in an AI-driven customer engagement, driving meaningful growth in both new business and retention for LivePerson. Next, let's discuss our go-to-market. Partnerships continue to be part of our go-to-market strategy. We're seeing growing momentum, driven by our flexible architecture, LLM agnostic approach, and strong track record of successful implementations. As previously discussed, we are excited to launch our Amazon Connect integration in the second quarter, and we're already seeing early customer interest. We're also on track to hit our goal of 35% partner attached for the year, which reflects the growing strength of our partner ecosystem. Ultimately, these partnerships will allow us to reach more customers, accelerate innovation, and deliver greater value at scale. Regarding pricing, We continue to see momentum in our simplified customer-centric bronze, silver, and gold packaging and pricing strategy. IBM recognized the value in our gold package, which gives them access to our full generative AI suite and the flexibility to bring IBM Watson X technology into our platform. The combination led to successful renewal and an expanded partnership. We're continuing to actively explore refinements to our pricing and packaging to deliver greater value to our enterprise customers. A key area of focus is creating incentives for brands and partners to bring their third-party bots to our platform. Today, this represents approximately 20% of total bot usage. And by aligning pricing closer to the investments customers are already making in their own tech stacks, we can help them unlock the full potential of our analytics and agentic orchestration capabilities while also driving meaningful cost savings. Finally, let me touch on bookings for the quarter. While retention continues to improve and exceed our expectations in the quarter, several large deals initially expected to close in Q1 are now expected to close in Q2. The shift was primarily driven by extended enterprise buying cycles. However, we're already seeing positive momentum on these deals in the second quarter, along with a strong growing pipeline. We remain confident in our expectation for positive net new AAR in the second half of this year. In closing, We delivered on our Q1 financial guidance and remain on track to achieve our full year targets. As expected, we faced headwinds in Q1 related to the prior cycle, but we're now seeing more favorable renewable trends and expect that to continue. In addition, we're seeing new pipeline momentum building through our partner ecosystem and our direct sales efforts. Our priorities remain unchanged and consistent with what we outlined in our Q4 call. driving commercial performance through growth and bookings and improved retention. Second, maintaining disciplined cost control while strengthening our capital structure. And third, accelerating innovation across our product. I remain confident in our trajectory, and I firmly believe in the future performance of the company. Now let me hand the call over to John Collins, our COO and CFO. John?