LivePerson, Inc. (LPSN)

Q3 2011 Earnings Call

November 3, 2011 5:00 p.m. ET


Robert LoCascio – CEO

Daniel Murphy – CFO


Nathan Schneiderman – Roth Capital

Richard Baldry – Wunderlich Securities

Richard Fetyko – Janney Capital

Jeff Van Rhee – Craig-Hallum Capital

Brian Schwartz – Thinkequity

Craig Nankervis – First Analysis

Ron McDowell – Northland Capital Management

Jon Hickman – Ladenburg



Welcome to the third quarter 2011 LivePerson conference call. With us today, we have Robert LoCascio, CEO of LivePerson, and Dan Murphy, Chief Financial Officer of LivePerson. After the speakers remarks, there will be a question and answer session. (Operator Instructions).

Now, I like to turn call over to Mr. Murphy.

Daniel Murphy

Thanks Kristen. 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 or 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 over time and we undertake no obligation to inform you if they do. The results that we report today should not be considered as an indication of future performance.

Changes in economic business, competitive, technological, 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 impact our business, please review 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 in 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 relation section of our website.

Now, I’d like to turn the call over to LivePerson’s Chief Executive Officer, Robert LoCascio.

Robert LoCascio

Thanks, Dan. Good afternoon, everyone, glad you could join us today. I’m pleased to report third quarter was another solid one with revenues reach record levels once again, increasing 22% from the prior year quarter to 33.4 million, and 8% sequential quarter-over-quarter basis.

More importantly, we’re on track with our goal of delivering our platform for intelligent engagement. We unveiled our new platform and products two weeks ago at our Global Customer Summit called Aspire, which took place in New York City. The summit represents a very important for LivePerson from both a cultural and product strategy standpoint.

For those of you who did not attend or watch the live online broadcast, I want to share some highlights of Aspire with you. Over 400 attended, a mix of customers, partners, and employees gathered from across the country and the world, eager to share and experience the latest innovations in intelligent engagement.

Some highlights from the conference were Frank Eliason, SVP of social media at our longstanding Citibank, shared how LivePerson’s chat based social media integration enabled Citi to securely provide high quality, high touch customer service through this increasingly important channel.

Bill Canada shared the long-term successes they realized as LivePerson customer over the past seven years. Another customer, a major global electronics provider shared their remarkable results just a few months after deploying LP Marketer.

We’ve been very focused on leveraging all the great assets around our LP chat product, to ultimately provide a unified way for companies to deliver all their customer engagements, whether it’s through chat, click-to-call, or LP marketer.

Our new platform is engineered to help customers drive conversions and create meaningful connections through a variety of different online channels. I’m incredibly excited about what the future holds, as our new products take hold over the next several years.

During the quarter, our core real-time engagement products continue to grow at a strong pace. Excluding our consumer business, revenue from business operations were up 25% from the previous year’s quarter. LivePerson has more than 8,500 customers right now, and during 2011, we seen a considerable amount of growth including some of our largest deployments.

There’s still a great deal of opportunity inherent in the value proposition of our core chat products. According to a recent Forrester Survey, both company’s cited that chat solutions as being critical to their future success. More than 75% named improved online customer experience a top priority when making investments in their customer engagement strategy. As LivePerson continues to transform into depth and usability of our product offerings, we should be in a strong position to capitalize on this trend.

We’re also deepening the breath of our offerings through our API partner ecosystem. As of the third quarter we had a total of 25 partners developing on our platform and added 29 new [inaudible] integrations during the quarter. Several of which were some of our bigger enterprise deployments in the financial technology verticals. APIs are a great way to create stickiness with our customers base, as many APIs are being used to integrate with other customer application.

One of the many great examples is the new mobile chat application implemented by our long-time customer Cisco, which leverages our APIs to integrate technology from platform partner Filibus. All the chat interactions on Cisco’s mobile site are powered by our platform APIs.

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