LivePerson's CEO Discusses Q1 2012 Results - Earnings Call Transcript

LivePerson, Inc. (LPSN)

Q1 2012 Earnings Call

May 8, 2012 5:00 PM

Executives

Dan Murphy – CFO

Robert LoCascio – Chairman and CEO

Analysts

Nathan Schneiderman – ROTH Capital

Shyam Patil – Raymond James

Richard Fetyko – Janney Capital

Ryan McDonald – Northland Capital

Presentation

Operator

Good afternoon, ladies and gentlemen. My name is Martina and I will be your conference operator today. At this time I would like to welcome everyone to LivePerson’s First Quarter 2012 Earnings Call. All lines have been placed on mute to prevent any background noise. After the speakers’ remarks, there will be a question-and-answer session.

(Operator Instructions)

I would now like to turn the call to LivePerson’s CFO, Dan Murphy; and Robert LoCascio, Chairman and CEO. You may begin your conference.

Dan Murphy

Thanks very much. Before we begin, I’d 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 over time and we undertake no obligation to inform you if they do. 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 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 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 and thanks everyone for joining us today. I’m pleased to report we are starting the year off on a strong note. During the quarter, our core business demonstrated continued strength with B2B revenue increasing 23% over the prior year period. We also had a very strong bookings quarter.

First quarter bookings came in an unseasonably high at $6.1 million, which represents more than a 60% increase from the prior year’s first quarter and around 10% of the pipeline consisted of new products.

As we have discussed in the past, in the first half of 2012, we are focused on continue to build our new product pipeline. We remain focused on rolling out the products more broadly across our customer base, while expanding the depth and reach of our core chat product offerings.

Along those lines, we continue to make considerable investment in building out our sales team and training them on the value-based selling model we implemented last year.

During the quarter, we added six quota-carrying sales reps, which is in addition to six head during the fourth quarter. We’re also starting to increase our overall marketing investment in order to build awareness and demand in the marketplace. To that end, I just got back from UK, where we kicked off the first three Aspire customers summits.

Our Aspire events bring customers together to share success stories and best practices and to learn about our latest innovations. With over 300 people on attendance, it was an important opportunity for us to connect with these leading European companies and really give them an opportunity to exchange ideas, learn about our new products and connect with each other. It definitely was one common threat among these organizations, a strong desire to create deeper, more meaningful relationships with their customers. And they are looking to LivePerson to help achieve this.

We look forward to continue to connect with our customers and will be hosting our next Aspire event in Australia at the end of May and then one in New York during mid-June. As part of our overall strategy, we continue to evolve our core chat products. We are in the process of launching a new connection framework that combines chat with full integration of voice, video, screen sharing and even real-time language translation.

From the consumer’s perspective, they are able to switch between these communication channels seamlessly and from our customer’s perspective, all these technologies easily plug into the agent console. We preview this connection framework at our EMEA Aspire event last week.

An early adopter of this new connection framework is a major consumer electronics company. They launched a very exciting deployment a few weeks ago on a few of their emerging market websites. Our technologies enabling them to create an online customer experience that very much replicates the same high-touch experience that consumer get when they are in one of their stores. They’re also going to use the video webcam to conduct sales, support and product configurations in real-time.

They will feel very much like their in-store experience and this enables them to cover markets where they don’t have significant store penetration. Our goal with the connection framework is to accelerate the adoption of our technologies among contact centers where voice 1-800 numbers are still the dominant form of communication. Our expectation is to rolling up the connection framework to the standard offering with our chat products starting at the beginning of Q3.

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