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Financial Data and Key Metrics Changes - Revenue for Q3 2025 was $60.2 million, exceeding the high end of the guidance range of $60 million [5][17] - Adjusted EBITDA was $4.8 million, significantly above the high end of the guidance range, reflecting strong cost discipline [5][17] - Recurring revenue accounted for 92% of total revenue, amounting to $55.1 million [17] - Cash on the balance sheet at the end of Q3 was $107 million [18] Business Line Data and Key Metrics Changes - Revenue from hosted services was $51.2 million, down 18% year-over-year [17] - Professional services revenue was $9 million, down 23% year-over-year [18] - Average revenue per customer increased by 6% year-over-year to $665,000 [18] - RPO (Remaining Performance Obligations) declined to $182 million [18] Market Data and Key Metrics Changes - U.S. revenue was $37 million, representing 61% of total revenue, while international revenue was $23.2 million, or 39% of total revenue [18] - Net revenue retention improved to 80.4%, up from 78.2% in the previous quarter [18] Company Strategy and Development Direction - The company has closed a debt refinancing agreement and executed a cost restructuring to reduce cash burn, stabilizing its financial foundation [4][15] - The launch of the Conversation Simulator product aims to address challenges in deploying and scaling AI and human agent workforces, representing a significant new opportunity [8][10] - The partnership with Google enhances the company's market reach and product offerings, particularly through the integration with Google's RCS platform [6][14] Management's Comments on Operating Environment and Future Outlook - Management noted a shift in customer conversations towards increased confidence in the company's financial stability, leading to improved renewal discussions [12][14] - The company raised its full-year revenue guidance to a range of $235 million-$240 million and adjusted EBITDA guidance to $7.5 million-$12.5 million, reflecting better-than-anticipated performance [15][19] - The company expects to see continued strong adoption of its generative AI capabilities and early traction with the Conversation Simulator [14][15] Other Important Information - The market for training, simulation, and compliance related to AI and human agents is projected to grow from $10 billion today to $20 billion by 2030 [11] - The company signed a total of 28 deals in the quarter, including two new logos and 26 expansions and renewals, indicating a sequential increase in total deal value of 14% [16] Q&A Session Summary Question: What drove the upside in the quarter? - Management indicated that the upside was primarily due to timing, with some deals recognized in Q3 that would have otherwise occurred in Q4, along with variable revenue [22][23] Question: What is the competitive landscape for the Conversation Simulator? - Management noted that while there are competitors, LivePerson uniquely addresses both human and bot training, providing a comprehensive customer experience perspective [24][25][26] Question: What are the implications of the cost restructuring? - The cost restructuring effects began in Q3 and are expected to fully materialize in Q4 and for the full year 2026, contributing to improved EBITDA guidance [27]

Financial Performance - 3Q25 revenue reached $60.2 million, exceeding the high-end of the guidance range of $56 million to $59 million[8] - Adjusted EBITDA for 3Q25 was $4.8 million, also surpassing the high-end of the guidance range of $(4) million to $(2) million[8] - Recurring revenue accounted for 92% of total revenue in 3Q25, amounting to $55.1 million[8] - The company anticipates adjusted EBITDA to exceed Capex in FY25[8] Customer Metrics - The average revenue per customer (ARPC) increased to $665,000 in 3Q25[16] - Net revenue retention rate for recurring revenue was 78% in 3Q25[16] - Remaining performance obligations stood at $197 million in 3Q25[16] Guidance - 4Q25 revenue is projected to be between $50.5 million and $55.5 million, representing a year-over-year decline of (31)% to (24)%[19] - Full year 2025 revenue is guided to be in the range of $235 million to $240 million, a year-over-year decrease of (25)% to (23)%[19] - Adjusted EBITDA for 4Q25 is expected to be between $(0.3) million and $4.7 million, with a margin of (0.6)% to 8.5%[19] - Full year 2025 adjusted EBITDA is projected to be between $7.5 million and $12.5 million, with a margin of 3.2% to 5.2%[19]

Core Insights - LivePerson reported total revenue of $60.2 million for Q3 2025, which is a decrease of 19.0% compared to the same period last year, primarily due to customer cancellations and downsells [2][3] - The company achieved adjusted EBITDA of $4.8 million for Q3 2025, down from $7.3 million in Q3 2024 [8][29] - LivePerson signed 28 deals in total during the quarter, including 26 expansions and renewals, and 2 new customers [3][6] Financial Performance - Total revenue for Q3 2025 was $60.2 million, a decrease of 19.0% year-over-year [2] - Net income for Q3 2025 was $8.7 million, or $0.98 per share, compared to a net loss of $28.3 million, or $4.74 per share, in Q3 2024 [7][25] - Adjusted operating loss for Q3 2025 was $0.7 million, compared to adjusted operating income of less than $0.1 million in Q3 2024 [7][29] - Cash and cash equivalents at the end of Q3 2025 were $106.7 million, down from $183.2 million at the end of 2024 [10][32] Customer and Market Developments - The average revenue per enterprise and mid-market customer (ARPC) increased by 5.6% to $665,000 in Q3 2025, up from approximately $630,000 in the prior year [3] - The company emphasized its commitment to strengthening its financial foundation and enhancing customer confidence through product innovation, including a partnership with Google and the launch of Conversation Simulator [4][5] Future Guidance - For Q4 2025, LivePerson expects total revenue to range from $50.5 million to $55.5 million, representing a year-over-year decline of 31% to 24% [13][15] - For the full year 2025, total revenue is expected to range from $235 million to $240 million, a decrease of 25% to 23% year-over-year [14][15]

Core Insights - LivePerson has launched the Conversation Simulator, a platform designed to test, train, and analyze AI and human agents in a risk-free environment, addressing key barriers to generative AI (GenAI) adoption such as accuracy, compliance, and risk [1][2][3] Group 1: Product Features and Benefits - The Conversation Simulator allows brands to validate AI before customer interactions, making generative AI more predictable and measurable for enterprise use [3][4] - It employs synthetic customers to mimic real behaviors, helping to identify risks, test performance, and ensure compliance with brand standards [3][4] - The platform aims to transform AI deployment from a leap of faith into a repeatable, proven process, addressing challenges that often stall AI programs at the pilot stage [4] Group 2: Market Reception and Use Cases - Early adopters like Telstra, Australia's leading telecom provider, are already utilizing the Conversation Simulator and reporting positive results [3] - The platform is vendor-agnostic, serving as a comprehensive testing and governance tool for a brand's entire conversational ecosystem [3] Group 3: Operational Efficiency - The Conversation Simulator automates training for human agents, significantly reducing onboarding time from weeks to hours by using real-world scenarios [8] - It continuously monitors AI and agent performance to ensure compliance with evolving regulations, such as the EU AI Act [8]