LivePerson Inc. (NASDAQ:LPSN) Q3 2020 Earnings Conference Call - Final Transcript
Oct 29, 2020 • 05:00 pm ET
conversational AI, we also expect meaningful cost savings in 2022 and beyond, to positively impact gross margin and cash generation. Finally, before talking about guidance, I'll note that we recorded $28 million in nonrecurring charges, covering the write-off of leases and fixed assets, the public cloud migration, employee home offices, IP litigation and various legal expenses. In terms of guidance, we're entering Q4 with strong momentum. Platform conversation volumes continue to build month-over-month since the peak of the crisis. Contract side have set a new record, and our revenue run rate is out of plant. Considering these positive dynamics, we are raising guidance for 2020 to a range of $362.5 million to $364.5 million or 24% to 25% year-over-year growth, up from previous guidance of $357 million to $361 million or 22% to 24% growth. Our Q4 guidance range of $98 million to $100 million also implies 25% growth at the midpoint. As Rob said, we're now on track to achieve our long-term growth target of 25%, one year ahead of plan. As for profitability, we continue to anticipate strong year-over-year margin improvements as we maintain budgetary vigilance and benefit from rapid adoption of internal automation. As a result, we are raising 2020 adjusted EBITDA guidance to a range of $29 million to $31 million, which is more than 70% higher than the midpoint of our prior range of $16 million to $19 million. Our Q4 adjusted EBITDA guidance of $9.3 million to $11.3 million targets a year-over-year margin expansion of nearly 900 basis points and a continuation of our double-digit margin trajectory.
Finally, I'll close with a few key points about the business. LivePerson is capitalizing on a global demand inflection for conversational AI, which is powering a sharp acceleration in both revenue and profit growth. The investments we've made in our product and go-to-market organizations are yielding impressive returns. Key financial metrics getting record highs, and we are driving strong demand generation across key geographies through our direct sales force and channel partners. In less than one year's time, we pivoted from $100 million cash burn to cash generation, which, again, is a testament to the adaptability of our operating model and the extensive vigilance of our business leaders and the unique ability to leverage internal automation to enhance productivity.
So with that, I'll hand the call back over to the operator to take your questions.