Revenue and Financial Performance - Subscription revenue accounted for 99.6% and 98.5% of total revenue for the three and nine months ended September 30, 2023, respectively[241]. - Annualized Recurring Revenue (ARR) for the three months ended September 30, 2023, was $140.8 million, a 2.2% increase from $137.8 million in the same period of 2022[250]. - Revenue for the three months ended September 30, 2023, increased by $0.1 million, or 0.3%, to $35.4 million compared to $35.3 million in the same period of 2022, primarily driven by an increase in subscription revenue of $0.8 million[277]. - Revenue increased by $7.3 million, or 7.2%, to $107.6 million for the nine months ended September 30, 2023, compared to $100.3 million in the same period of 2022[289]. - Net loss for the three months ended September 30, 2023, was $5.7 million, compared to a net loss of $7.8 million in the same period of 2022, indicating an improvement in financial performance[276]. - Net loss for the nine months ended September 30, 2023, was $18.6 million, compared to a net loss of $31.5 million in the same period of 2022[287]. Restructuring Plans - The Company initiated a 2022 Restructuring Plan, resulting in a reduction of approximately 3% of its global workforce, with restructuring charges totaling $0.9 million[245]. - The 2023 Restructuring Plan included a reduction of approximately 16% of the global workforce, with total restructuring charges of $3.2 million[246]. - The company is undergoing restructuring plans initiated in 2022 and 2023, with total restructuring costs amounting to $3.5 million for the nine months ended September 30, 2023[260]. - The unpaid balance of restructuring charges from the 2022 Restructuring Plan was $0.1 million as of September 30, 2023[245]. Operating Expenses - Total operating expenses for the three months ended September 30, 2023, were $28.4 million, slightly down from $28.6 million in the same period of 2022[276]. - Sales and marketing expenses for the three months ended September 30, 2023, decreased to $11.0 million from $13.8 million in the same period of 2022[276]. - General and administrative expense increased by $2.8 million, or 38.6%, to $10.1 million for the three months ended September 30, 2023, compared to $7.3 million in the same period of 2022[282]. - Research and development expenses for the three months ended September 30, 2023, were $7.3 million, compared to $7.6 million in the same period of 2022[276]. - Sales and marketing expense decreased by $7.0 million, or 16.4%, to $35.8 million for the nine months ended September 30, 2023, compared to $42.8 million in the same period of 2022[292]. - General and administrative expense increased by $5.8 million, or 25.2%, to $28.6 million for the nine months ended September 30, 2023, from $22.9 million in the same period of 2022[293]. - Research and development expense decreased by $2.0 million, or 8.4%, to $22.2 million for the nine months ended September 30, 2023, from $24.2 million in the same period of 2022[294]. Profitability Metrics - Adjusted EBITDA for the three months ended September 30, 2023, was $2.458 million, compared to a loss of $1.493 million in the same period of 2022[258]. - Gross profit for the three months ended September 30, 2023, was $24.1 million, compared to $22.4 million in the same period of 2022, reflecting an increase of $1.7 million[276]. - Non-GAAP gross profit for the three months ended September 30, 2023, was $24.7 million, compared to $23.4 million in the same period of 2022, resulting in a Non-GAAP gross margin of 69.9%[264]. - Gross profit increased by $10.7 million, or 17.4%, to $71.9 million for the nine months ended September 30, 2023, from $61.3 million in the same period of 2022[291]. Cash Flow and Financial Position - Net cash used in operating activities decreased by $13.5 million to cash outflows of $9.8 million for the nine months ended September 30, 2023, from $23.3 million in the same period of 2022[305]. - Net cash provided by investing activities increased by $5.4 million to cash inflows of $4.5 million for the nine months ended September 30, 2023, compared to cash outflows of $0.9 million in the same period of 2022[306]. - The term loan commitment was $54.5 million, with a revolving credit facility commitment of $5.0 million and a letter of credit sublimit of $1.5 million as of September 30, 2023[298]. - The Company held AFS debt securities of $44.2 million as of September 30, 2023, down from $48.2 million as of December 31, 2022[298]. - The Company expects cash generated by operating cash flows and debt to be sufficient to meet anticipated cash requirements for at least the next 12 months[302]. Mergers and Acquisitions - The NICE Merger Agreement was entered into on October 3, 2023, with the merger expected to close in the first half of 2024[242][244]. - Each share of the Company Stock will be converted into the right to receive $3.74 upon the Effective Time of the NICE Merger[243]. Customer and Market Information - The Company derived approximately 1.6% of its revenue from professional services, which are billed on a fixed-price or time and material basis[320]. - The Company recorded reductions to revenue for estimated customer credits at the time the related revenue is recognized, although such credits have not been significant to date[321]. - As of September 30, 2023, no single issuer represented more than 10% of the Company's marketable securities, and no single customer represented more than 10% of total accounts receivable[336]. - One vendor accounted for approximately 21.0% of accounts payable as of September 30, 2023, down from 37.7% at December 31, 2022[337]. Debt and Interest Rates - The interest rate for the term loan portion of the Credit Facility was 10.0% as of September 30, 2023, following the transition to an adjusted SOFR benchmark[338]. Equity and Compensation - The Company has adopted a 2021 Equity Incentive Plan, granting RSUs and PSUs to employees, with vesting periods ranging from one to six years[327]. - The Company recognizes stock-based compensation expense for Management Incentive Units (MIUs) over a five-year service period, with vesting at 20% annually[326]. Tax and Impairment - Deferred tax assets and liabilities are recognized for future tax consequences from temporary differences, with a valuation allowance provided for assets not expected to be realized[323]. - The Company recognized an impairment charge of $0.7 million for the nine months ended September 30, 2023, related to the closure of certain underutilized physical offices[312]. International Operations - The Company has international sales denominated in foreign currencies, with translation adjustments recorded in stockholders' equity unless there is a sale or liquidation of foreign investments[340]. Credit Risk Management - The Company performs ongoing credit evaluations of its customers' financial condition to mitigate credit risk associated with cash and cash equivalents[335]. - The Company evaluates acquisitions to determine if they should be accounted for as business combinations or asset acquisitions, requiring significant judgment[328].
LiveVox (LVOX) - 2023 Q3 - Quarterly Report