LivePerson, Inc. (LPSN)
Q2 2010 Earnings Call Transcript
August 4, 2010 5:00 pm ET
Tim Bixby – President and CFO
Robert LoCascio – Chairman and CEO
Jeff Van Rhee – Craig-Hallum
Brad Whitt – Gleacher & Company
Mike Latimore – Northland Securities
Craig Nankervis – First Analysis
Nathan Schneiderman – Roth Capital
Good evening, my name is Jerry and I will be your conference operator today. At this time, I would like to welcome everyone to the LivePerson second quarter review conference call. (Operator Instructions) Thank you. Mr. Tim Bixby, President and Chief Financial Officer, you may begin your conference.
Okay, thanks very much. Before we begin, I would like to remind listeners that during this conference call, comments that we make regarding LivePerson that are not historical facts are forward-looking statements and are subject to risks and uncertainties that could cause such statements to differ materially from actual future events or results.
These statements are made pursuant to the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995. The internal projections and beliefs upon which we base our expectations today may change overtime and we undertake no obligation to inform you if they do. The results that we report today should not be considered as indication of future performance.
Changes in economic, business, competitive, technology, regulatory and other factors could cause LivePerson's actual results to differ materially from those expressed or implied by the projections or forward-looking statements made today.
For more detailed information about these factors and other risks that may affect our business, please review the reports and documents filed from time to time by LivePerson with the Securities and Exchange Commission.
Also please note that on the call today we will discuss some non-GAAP financial measures when talking about the company's financial performance. We report our GAAP results as well as provide a reconciliation of these non-GAAP measures to GAAP financial measures in our earnings release. You can obtain a copy of our earnings release by visiting the investor relations section of our web site.
Now I would like to turn the call over to LivePerson 's Chief Executive Officer, Robert LoCascio.
Thanks, Tim. Good afternoon, everyone, and thank you for joining us as we review our second quarter business. We had another solid quarter of topline growth as revenue increased 29% year-over-year to 26.4 million. This represents 4% sequential growth over Q1.
We also had near record bookings and record new names within the quarter indicating that there are plenty of untapped opportunities for our core offerings. In fact the recent Forrester study on proactive chat indicated that only 5% of online retailers are using such a service today, but that 21% intend to implement a proactive chat program within a year.
In addition, the research firm found that 44% of online consumers say that having questions answered in real-time while in the middle of an online purchase is one of the most important features a website can offer.
We think this study is a positive indicator of further market opportunity for our business.
EBITDA per share for the quarter was $0.10, in line with our guidance for the quarter of $0.10 to $0.11 per share. EPS for Q2 was $0.03, also in line with our guidance of $0.02 to $0.03 per share. Tim will provide more detail on this shortly.
Our B to B business performed well this quarter generating 23 million of revenue in Q2 which represents a 29% year-over-year increase. The enterprise group grew 6% sequentially and the mix of customers remains a balance of telecom, banking, retail, high tech, travel and health care providers.
Activity in Europe continues to expand with the majority of business still coming out of the UK. We have also started to invest in resources that will focus on countries where we see opportunity including France and Germany. During the quarter, we saw 18 new enterprise customers including Vitamin Shop, Toshiba America Information Systems, and the pipeline looks strong as we head into Q3.
While some of the vendors may include chat as part of a larger E-commerce solution, customers prefer to spend their time with LivePerson because of our ability to deliver real-time business results.
Just this quarter we announced an expansion with Omni Hotels whereby they deployed proactive chat in the Meetings and Events section of their website to help improve the RFP process. Meetings and events comprises 45% of their business. To date Omni has achieved more than 16,000 conversions from their click-to-chat program with a conversion rate of 18.5% for chatters compared to 4.5% for non chatters. These conversions are leading to increased revenue opportunities for the luxury hotel brand.
Results like the ones achieved by Omni indicate that chat is a critical communication channel for online businesses and that the ability to make real-time connections with customers and prospects delivers positive business results.
We also began taking more aggressive steps to expand into the Asia-Pacific region during Q2. We see significant opportunity in the region, particularly within our traditional verticals of telecom, so we expect to see continued expansion in the region. Tim will provide more details on our Asia-Pacific expansion shortly.
Our small business group had a solid quarter, achieving 3% sequential growth on a quarter-over-quarter. While much of the growth in this area of the business comes from new accounts, we are seeing opportunities to expand and grow existing accounts. This is due to the fact that we added additional resources to the team in the first half of the year. These resources now squarely focus on up selling customers to a more comprehensive multi-channel suite that includes chat, email, voice and knowledge base.