LivePerson(LPSN)2025-03-06 05:25Financial Data and Key Metrics Changes - Revenue for Q4 2024 was 312.5 million, also above guidance [19][20][46] - Adjusted EBITDA for Q4 was 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 60.2 million, down 23% year-over-year, while professional services 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]