LivePerson Inc. (NASDAQ:LPSN) Q3 2019 Earnings Conference Call Transcript

Nov 07, 2019 • 05:00 pm ET

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LivePerson Inc. (NASDAQ:LPSN) Q3 2019 Earnings Conference Call Transcript

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Presentation
Operator
Operator

Good afternoon, ladies and gentlemen. Thank you for standing by. Welcome to LivePerson's Third Quarter 2019 Earnings Conference Call. My name is Katherine, and I'll be your conference operator today. [Operator Instructions]

I would now like to turn the conference over to Mr. Matthew Kempler, the Company's Senior Vice President of Investor Relations and Planning. Please go ahead, sir.

Executive
Matthew Kempler

Thanks very much, Katherine. This is Matthew Kempler, SVP of Planning and Investor Relations. Joining me on the call today is Rob LoCascio, LivePerson's Founder and CEO; and Chris Greiner, our Chief Financial Officer. Please note that during today's call we will make forward-looking statements, which are predictions, projections, and other statements about future results. These statements are based on our current expectations and assumptions as of today and are subject to risks and uncertainties. Actual results may differ materially due to various factors, including those described in today's earnings press release, in the comments made during this conference call, and in 10-Ks, 10-Qs, and other reports we file from time to time with the SEC. We assume no obligation to update any forward-looking statements.

Also, during this call we will discuss certain non-GAAP financial measures. A reconciliation of GAAP to non-GAAP financial measures is included in today's earnings press release. Both this press release and supplemental slides, which include highlights for the quarter, are available in the Investor Relations section of LivePerson's website.

With that, I will turn the call over to Rob.

Executive
Robert LoCascio

Thanks, Matt. And thank you for joining LivePerson's third Quarter 2019 conference call. This is another milestone for the company as we deliver our second consecutive quarter of revenue growth acceleration. Revenue increased 17% year-over-year in the third quarter, up from 15% growth in the second quarter, and 14% growth in the first quarter. We expect this trend to continue as reflected in our guidance for acceleration to 17% to 22% growth in the fourth quarter, at least 20% growth in 2020. We're really excited to have this goal of 20% growth now within our sites.

LivePerson's third quarter activity metrics also reflect the positive growth inflection. LivePerson Signs 7, seven-figure deals in the quarter, more than double than a year ago. The number of deals signed increased nearly 50% year-over-year. The value of contracts signed also continues to grow at a significantly faster pace than our overall revenue, which is a great leading indicator of future acceleration, half of our enterprise customers have now begun the transformation of messaging from Chat, up from 35% a year ago, and more than 50% of those messaging conversations rely on automation.

We've always stated that AI was a key to scaling conversational commerce and we are now seeing its adoption drive platform usage. In fact, ARPUs for messaging brands with AI is nearly double that of customers without AI. These trends reflect exactly how we expected the quarter to play out. Demand for conversational commerce is inflecting because consumers are seeking a better alternative to wasting time on hold with