Financial Data and Key Metrics Changes - Revenue for Q4 2024 was $73.2 million, and adjusted EBITDA was $8.1 million, both exceeding the high end of guidance ranges [19][20][46] - Full year revenue reached $312.5 million, with adjusted EBITDA of $24.1 million, also above guidance [20][46] - Recurring revenue constituted 94% of total revenue, with a slight increase in average revenue per customer to $625,000, up 2% year-over-year [48] Business Line Data and Key Metrics Changes - Revenue from hosted services was $60.2 million, down 23% year-over-year, while professional services revenue was $13 million, also down 23% year-over-year [46][47] - Net revenue retention improved to 82% in Q4, up from 79% in Q3, driven by favorable timing of deals [49] Market Data and Key Metrics Changes - U.S. revenue was $48.4 million, representing 66% of total revenue, while international revenue was $24.8 million, or 34% [48] - The company signed 39 deals in Q4, including 9 new logos and 30 expansions and renewals, translating to an 18% quarter-over-quarter increase in total deal value [43] Company Strategy and Development Direction - The company is focusing on three core pillars: enhancing go-to-market capabilities, innovating product offerings, and strengthening capital structure [10][13] - The vision for 2025 and beyond includes creating AI-powered workspaces that integrate digital capabilities and shift customer engagement from reactive to proactive [18] Management's Comments on Operating Environment and Future Outlook - Management acknowledged ongoing challenges from legacy issues but expressed confidence in achieving positive net new ARR in the second half of 2025 [40] - The company anticipates a decline in revenue through most of 2025 before reaching an inflection point for sequential growth by year-end [51] Other Important Information - The company executed a transformative agreement with Lynrock Lake, enhancing its capital structure [13] - The integration of large language models has allowed the company to develop competitive products, driving significant cost savings and improved customer satisfaction [17] Q&A Session Summary Question: Clarification on partner attach target for 2025 - The target is for 35% of total bookings value to be driven by partners, with steady improvement expected from previous years [60] Question: Insights on Avaya integration and partnerships with Cisco and Amazon - The Avaya partnership is progressing well, with a 7-figure deal closed and additional opportunities in the pipeline [65] - Partnerships with Cisco and Amazon are part of a broader strategy to enhance voice capabilities [67] Question: Incremental spend on sales and marketing - There is no incremental investment relative to 2024; the focus is on maintaining spending in sales and marketing while reducing costs in other areas [72] Question: Update on debt situation and strategy - No updates or changes to the debt strategy were provided, but developments are expected throughout the year [75] Question: Sustainability of gross margin increase - The increase in gross margin is influenced by reduced consulting costs, but some pressure is expected in 2025 due to cloud migration costs [79] Question: Customer renewal cycle status - The legacy renewal cycle is expected to end in the first half of 2025, with most customer losses occurring in Q1 [82] Question: System overhaul implications for customers - The company allows customers to retain existing contact center infrastructure while integrating best-in-class digital solutions [86]

Financial Data and Key Metrics Changes - Revenue for Q4 2024 was $73.2 million, exceeding the high end of guidance, with full-year revenue at $312.5 million, also above guidance [19][20][46] - Adjusted EBITDA for Q4 was $8.1 million, above guidance, with full-year adjusted EBITDA at $24.1 million [19][20][46] - Recurring revenue constituted 94% of total revenue, with average revenue per customer increasing by 2% year-over-year to $625,000 [48][52] Business Line Data and Key Metrics Changes - Revenue from hosted services was $60.2 million, down 23% year-over-year, while professional services revenue was $13 million, also down 23% year-over-year [46][47] - Net revenue retention improved to 82% in Q4, up from 79% in Q3, driven by favorable timing of deals [49] Market Data and Key Metrics Changes - U.S. revenue was $48.4 million, representing 66% of total revenue, while international revenue was $24.8 million, making up 34% [48] - The company signed 39 deals in Q4, including 9 new logos and 30 expansions and renewals, with total deal value increasing by 18% quarter-over-quarter [43][44] Company Strategy and Development Direction - The company is focusing on three core pillars: enhancing go-to-market capabilities, innovating product offerings, and strengthening capital structure [10][13] - LivePerson aims to leverage AI-driven solutions to transform customer engagement from reactive to proactive, integrating AI automation throughout the customer journey [18][24] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the groundwork laid in 2024, positioning the company for sustainable and profitable growth despite anticipated challenges in the first half of 2025 [19][40] - The company expects to see positive net new ARR in the second half of 2025 as it moves past the legacy renewal cycle [40][50] Other Important Information - The company has made significant advancements in AI capabilities, with a 17% sequential increase in customers using generative AI and a 37% increase in conversations utilizing the AI suite [28][31] - The partnership with Lynrock Lake has significantly enhanced the company's capital structure [13][50] Q&A Session Summary Question: Clarification on partner attach target for 2025 - The target is for 35% of total bookings value to be driven by partners, with steady improvement expected from previous years [60] Question: Insights on Avaya integration and partnerships with Cisco and Amazon - The Avaya partnership is progressing well, with a significant deal closed and more in the pipeline, while partnerships with Cisco and Amazon are aimed at expanding market reach [65][67] Question: Incremental spend on sales and marketing - There is no incremental investment relative to 2024; instead, the focus is on maintaining spending in sales and marketing while reducing costs in other areas [72] Question: Updates on debt situation and strategy - No updates or changes to the debt strategy were provided, but developments are expected as the year progresses [75] Question: Sustainability of gross margin increase - The increase in gross margin is influenced by reduced consulting costs and labor, but some pressure is expected in 2025 due to cloud migration costs [78][79] Question: Customer attrition and renewal cycle - The legacy renewal cycle is expected to end in the first half of 2025, with most customer losses occurring in Q1 [82] Question: System overhaul implications for customers - The company allows customers to retain existing contact center infrastructure while integrating best-in-class digital solutions [86]

Core Viewpoint - LivePerson reported break-even quarterly earnings per share, surprising analysts who expected a loss, indicating a potential turnaround for the company [1][2] Financial Performance - The company achieved revenues of $73.21 million for the quarter ended December 2024, exceeding the Zacks Consensus Estimate by 7.18%, but down from $95.47 million year-over-year [2] - Over the last four quarters, LivePerson has surpassed consensus revenue estimates four times, but only once for EPS estimates [2] Stock Performance - LivePerson shares have declined approximately 30.9% since the beginning of the year, contrasting with the S&P 500's decline of 1.8% [3] - The stock currently holds a Zacks Rank 3 (Hold), suggesting it is expected to perform in line with the market in the near future [6] Earnings Outlook - The current consensus EPS estimate for the upcoming quarter is -$0.05 on revenues of $66.92 million, and for the current fiscal year, it is -$0.19 on revenues of $258.13 million [7] - The trend of earnings estimate revisions is mixed, which could change following the recent earnings report [6] Industry Context - The Internet - Services industry, to which LivePerson belongs, is currently ranked in the top 34% of over 250 Zacks industries, indicating a favorable environment for potential growth [8]

Core Insights - LivePerson reported total revenue of $73.2 million for Q4 2024, a decrease of 23.3% year-over-year due to customer cancellations and downsells [2][6] - The company signed 39 deals in total during the fourth quarter, including 30 expansions and renewals, and 9 new customers [3][6] - Adjusted EBITDA for Q4 2024 was $8.1 million, an increase from $3.7 million in Q4 2023 [7] Financial Performance - Net loss for Q4 2024 was $112.1 million, or $1.27 per share, compared to a net loss of $40.5 million, or $0.48 per share, in Q4 2023 [6][26] - Adjusted operating income for Q4 2024 was $1.0 million, compared to an adjusted operating loss of $4.0 million in Q4 2023 [6] - Cash and cash equivalents at the end of Q4 2024 were $183.2 million, down from $210.8 million at the end of Q4 2023 [9] Strategic Developments - The CEO highlighted 2024 as a transformative year for LivePerson, emphasizing progress in go-to-market capabilities and product innovation [4] - The CFO noted increasing demand for AI agents and orchestration, indicating a positive trend for the company in 2025 [5] - The company expects total revenue for Q1 2025 to range from $63 million to $65 million, representing a year-over-year decline of 24% to 26% [11] Revenue Breakdown - For Q4 2024, hosted services revenue was $60.2 million, down from $78.6 million in Q4 2023, while professional services revenue was $12.99 million, down from $16.87 million [13] - For the full year 2024, total revenue was $312.5 million, compared to $402.0 million in 2023 [26] Future Guidance - For the full year 2025, total revenue is expected to range from $240 million to $255 million, reflecting a year-over-year decline of 18% to 23% [12] - Adjusted EBITDA for the full year 2025 is projected to range from $(14) million to $0 million [12]

Financial Performance - Total revenue for Q4 2024 was $73.2 million, a decrease of 23.3% compared to the same period last year[3]. - Revenue for Q4 2024 was $73,206,000, a decrease of 23.3% compared to $95,468,000 in Q4 2023[31]. - Total revenue for the year ended December 31, 2024, was $312,474,000, down 22.2% from $401,983,000 in 2023[31]. - For Q1 2025, total revenue is expected to range from $63 million to $65 million, representing a year-over-year decline of 24% to 26%[12]. - For the full year 2025, total revenue is expected to range from $240 million to $255 million, a decline of 18% to 23% year-over-year[13]. Net Loss and Earnings - Net loss for Q4 2024 was $112.1 million, or $1.27 per share, compared to a net loss of $40.5 million, or $0.48 per share, in Q4 2023[8]. - Net loss for Q4 2024 was $112,128,000, compared to a net loss of $40,525,000 in Q4 2023, representing an increase in loss of 176.5%[31]. - GAAP net loss for Q4 2024 was $112.1 million, compared to a loss of $40.5 million in Q4 2023, representing an increase of 176%[36]. Adjusted EBITDA - Adjusted EBITDA for Q4 2024 was $8.1 million, up from $3.7 million in Q4 2023[9]. - Adjusted EBITDA for Q4 2024 was $8.1 million, up from $3.7 million in Q4 2023, indicating a growth of 118%[36]. - The company anticipates adjusted EBITDA for the full year 2025 to range from $(14) million to $0 million[15]. Cash and Liquidity - Cash balance at December 31, 2024, was $183.2 million, down from $210.8 million at the end of 2023[10]. - Cash, cash equivalents, and restricted cash at the end of 2024 were $183,237,000, down from $212,925,000 at the end of 2023, reflecting a decrease of 13.9%[34]. - Cash and cash equivalents decreased to $183.2 million in Q4 2024 from $210.8 million in Q4 2023, a decline of 13%[44]. - Total Free Cash Flow for the year ended December 31, 2024, was $(40.3) million, an improvement from $(48.4) million in 2023[41]. Costs and Expenses - The total costs, expenses, and other for Q4 2024 were $174,200,000, an increase of 28% from $136,137,000 in Q4 2023[31]. - Interest expense for the year ended December 31, 2024, was $14,486,000, significantly higher than $4,882,000 in 2023[31]. - Interest expense increased to $6.3 million in Q4 2024 from $0.8 million in Q4 2023[42]. - The company incurred restructuring costs of $3,263,000 in Q4 2024, down from $6,665,000 in Q4 2023[31]. - The company incurred restructuring costs of $3.3 million in Q4 2024, down from $6.7 million in Q4 2023[36]. Impairment and Goodwill - The company reported an impairment of goodwill amounting to $56,924,000 in Q4 2024, compared to no impairment in Q4 2023[31]. - The company reported impairment of goodwill amounting to $56.9 million for Q4 2024, compared to no impairment in Q4 2023[36]. Business Development - The company signed 39 deals in total for Q4 2024, including 30 expansions and renewals, and 9 new customers[4]. - Average revenue per enterprise and mid-market customer (ARPC) increased by 2.5% to $625,000 for Q4 2024[4]. - The company has seen increasing demand for AI agents and AI orchestration, indicating a positive trend for future growth[6]. Assets and Liabilities - Total assets decreased to $607.8 million in Q4 2024 from $835.5 million in Q4 2023, a reduction of 27%[44]. - Total liabilities decreased to $675.1 million in Q4 2024 from $787.4 million in Q4 2023, a decline of 14%[44]. Financing Activities - The company issued $100,000,000 in 2029 convertible senior notes during the year, contributing to financing activities[34]. - Operating cash flow for the year ended December 31, 2024, was a net cash used of $15,130,000, an improvement from $19,765,000 used in 2023[34]. - The company plans to focus on IT transformation costs, which amounted to $0.1 million in Q4 2024, as part of its strategy to enhance operational efficiency[36].

Core Insights - LivePerson, Inc. is set to release its fourth quarter financial results on March 5, 2025, after market close [1] - The conference call will be hosted by CEO John Sabino and CFO & COO John Collins at 5:00 p.m. Eastern Time on the same day [1] Company Overview - LivePerson is a leader in enterprise conversational AI and digital transformation, serving major brands like HSBC, Chipotle, and Virgin Media [3] - The company facilitates nearly one billion conversational interactions monthly, providing data analytics and safety tools to enhance business outcomes [3] - LivePerson has been recognized as the 1 Most Innovative AI Company in the world by Fast Company [3]

Momentum Investing Strategy - Momentum investing focuses on buying high and selling higher, rather than buying low and selling high, aiming to make more money in less time [7] - Fast-moving trending stocks can be risky as they may lose momentum when valuations exceed future growth potential, leading to limited upside or downside [1] - The Zacks Momentum Style Score is useful for identifying stocks with strong price or earnings trends [4] LivePerson (LPSN) Analysis - LPSN has gained 14.4% over the past 12 weeks, demonstrating strong momentum [2] - The stock has a beta of 1.59, indicating it moves 59% higher than the market in either direction [2] - LPSN has a Momentum Score of A, suggesting it is a good time to enter the stock to capitalize on its momentum [5] - The stock has a four-week price change of 62.2%, reflecting growing investor interest [8] - LPSN has a Zacks Rank 2 (Buy) due to upward earnings estimate revisions, which often attract more investors and drive price increases [9] - The stock is trading at a reasonable valuation with a Price-to-Sales ratio of 0.36, meaning investors pay 36 cents for each dollar of sales [9] Other Momentum Stocks and Tools - Several other stocks pass the 'Fast-Paced Momentum at a Bargain' screen, offering potential investment opportunities [3] - Zacks Premium Screens, including over 45 options, can help investors find winning stocks based on their personal investing style [6] - The Zacks Research Wizard allows investors to backtest strategies and access successful stock-picking strategies [10]

Company Announcement - LivePerson announced the appointment of Christopher Mina as Chief Technology & Product Officer, responsible for setting the company's product vision and overseeing engineering and product operations to enhance customer experience and accelerate innovation [1] - Christopher Mina previously held leadership roles at Vonage, LivePerson, and RingCentral, with expertise in UCaaS, CCaaS, Conversational AI, and enterprise software [2] - The CEO highlighted Mina's strategic vision for leveraging AI across communication channels and his experience in guiding global enterprise brands through digital transformations [3] Industry and Technology - LivePerson is a leader in enterprise conversational AI and digital transformation, serving major brands like HSBC, Chipotle, and Virgin Media [4] - The company's Conversational Cloud platform powers nearly a billion conversational interactions monthly, providing rich data analytics and safety tools [4] - LivePerson was named the 1 Most Innovative AI Company by Fast Company, emphasizing its cutting-edge AI technology and digital expertise [4] Strategic Vision - Christopher Mina expressed excitement about rejoining LivePerson to guide product strategy and unlock value for customers through meaningful and connected consumer engagement across voice and digital touchpoints [3] - The company aims to transform customer experiences by combining its extensive digital experience with best-of-breed systems and AI technologies [3]

Core Insights - LivePerson, Inc. has appointed two new board members, Dan Fletcher and Karin-Joyce (K.J.) Tjon, to enhance its board's expertise in business turnarounds and financial execution [1][2][3] Group 1: Board Appointments - Dan Fletcher has over 17 years of experience in financial, strategic, and operational transformations within the SaaS industry, currently serving as CFO of Planful and as an Operating Principal at Vector Capital Management, L.P., LivePerson's largest investor [2] - Karin-Joyce (K.J.) Tjon brings over 25 years of executive and board leadership experience in technology and SaaS industries, with a strong background in business transformation and financial restructuring [3] - Following these appointments, LivePerson's Board now consists of eight directors, with seven being independent and six having joined in the past two years, reflecting a significant refresh of the board [4] Group 2: Company Overview - LivePerson is a leader in enterprise conversational AI and digital transformation, serving major brands like HSBC, Chipotle, and Virgin Media, and facilitating nearly a billion conversational interactions monthly [5] - The company has been recognized as the 1 Most Innovative AI Company in the world by Fast Company, highlighting its impact and leadership in the conversational AI space [5]

Core Insights - Project Management Institute (PMI) has partnered with LivePerson to enhance its customer support model through AI and automation, resulting in improved efficiency and customer interaction [1][4] - PMI aims to expand support options across preferred customer channels and leverage AI for better outcomes and workforce upskilling [2][3] Group 1: Partnership and Objectives - PMI selected LivePerson to expand support options and achieve meaningful outcomes from AI and automation [2] - The collaboration focuses on enhancing customer interactions through digital messaging and channel expansion, including web messaging, WhatsApp, and SMS [2] Group 2: AI Implementation and Results - PMI has implemented an AI virtual assistant using LivePerson's capabilities, which includes AI-guided routing based on intent recognition and interaction history [3] - The partnership has led to over 1.5 million customer interactions with the virtual assistant and a 51% year-over-year improvement in containment rates [4] - 28.5% of support volume is now fully handled by AI, showcasing significant efficiency gains [4] Group 3: Future Plans and Innovations - PMI plans to expand its virtual assistant to multiple languages to cater to a global audience and utilize additional generative AI tools from LivePerson [4] - The partnership has enabled the creation of new roles such as Bot Monitors, fostering further innovation within PMI's team [4] Group 4: Industry Impact - LivePerson's CEO highlighted the success of PMI's customer support transformation as a model for businesses prioritizing customer conversations [5] - LivePerson's Conversational Cloud platform is utilized by leading brands to enhance customer interactions and drive contact center transformation [6]