LivePerson - Earnings Call - Q1 2016
May 4, 2016
Transcript
Speaker 0
Good afternoon, and welcome to the LivePerson First Quarter twenty sixteen Earnings Call. My name is Liliana, and I'll be facilitating the audio portioning of today's interactive broadcast. All lines have been placed on mute to prevent any background noise. For those of you on the stream, please take note of the options available in your event console. At this time, I would like to turn the show over to our LivePerson's founder and CEO, Rob LoCascio and CFO, Dan Murphy.
Speaker 1
Thanks very much. Before we begin, please note that we will make forward looking statements during today's call, which are predictions, projections or 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 and 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, which is now available in the Investor Relations section of our website. Now I'll turn the call over to Robert Lecascio.
Speaker 2
Thanks, Dan, and thank you for joining LivePerson's first quarter twenty sixteen conference call. We're pleased to report that first quarter revenue profit were within and above LivePerson's previous issued guidance ranges. Our vision and strategy are starting to intersect with the demands of the market as there has been a lot of public discussion around mobile messaging, bots, etcetera, all in the context of customer care. The companies like Facebook are reinforcing our vision regarding the inevitability of messaging between brands and consumer. Working closely with Facebook Messenger, LivePerson revealed new integrations with Messenger and chatbots at Facebook's F8 conference last month.
We now provide consumers the ability to message a brand directly when bots fail to deliver successful self-service outcome. A long standing customer of one-eight 100 Flowers was highlighted as a first adopter of these new capabilities in Mark Zuckerberg's keynote speech. 1800Flowers is leveraging the scalability, security and intelligence of LiveEngage and our integration with Messenger to offer hundreds of millions of consumers the option to message the contact center. Zuckerberg echoed our company's vision on the F8 stage stating that consumers should be able to message a business just they do with their friends and not have to call them. The aggressive promotional messaging by Facebook and others as a primary means of connection between consumer and business should only help to accelerate our own efforts to fuel mobile adoption across brands.
The consumer is already there. According to a recent study by IDC, U. S. Smartphone owners spend 84% of their communication time on digital channels such as text and social apps versus only 16% of communication through phone calls. Brands are responding to these industry forces.
They're expressing strong interest in aligning with how consumers prefer to connect, which is through digital channels on mobile devices. In fact, in the second quarter, we're set to deploy our first enterprise mobile customer. The millions of consumers of this brand will soon have an alternative to voice that gives them back their time to deliver a more connected experience. The large telco in EMEA that launched our SMS mobile capabilities in the first quarter is already delivering these benefits to its customers. Impressed by initial outcomes, the brand is promoting SMS in its IVR, on the web, on Facebook and in app.
This leading brand is now looking to expand our mobile offerings into new lines of business. We plan to launch several new pilots in the coming weeks across mobile channels. One of the greatest advantages of LiveEngage's ability to provide a single interface that measures and analyzes all mobile and online customer conversations across digital channels. Those learnings continuously improve the success of our customers' engagement program. Brands across the globe are increasingly recognizing LivePerson for the strategic impact these capabilities deliver to their business goals and customer relationships.
Liberty Global, the largest international cable company with 27,000,000 consumers across 14 countries signed a 7 figure three year contract to deploy LiveEngage worldwide. The selection was part of Liberty's new transformative initiative, which is tasked with standardizing best practices and best in class technologies across all their brands. Orange, a global leader in telecommunications services, replaced a competitive solution with LiveEngage in France last month. Telco immediately saw a meaningful decrease in handle time, increased agent satisfaction and materially simplified administration of campaigns and engagement. LiveEngage scalability was key as the platform was initially deployed across multiple geographies and hundreds of agents and is targeted to power millions of digital conversations each year.
In addition, Orange is clearly aligned with our vision for using mobile messaging to transform customer care. Industry peers are also recognizing the strength of LivePerson's position After winning the CODI for Best Customer Success Management Solution 2015, LiveEngage has been selected as a CODI finalist in three categories this year. We're up for best sales and marketing mobile application, best customer service solution and best sales and marketing intelligence solution. Across the board, we are making significant progress on the three objectives that will turn our vision into reality and position LivePerson for stronger performance, fueling mobile adoption, upgrade customers to LiveEngage and improving our operational leverage. The company saw strong momentum across mobile in the first quarter with mobile chat interactions on LiveEngage increasing 60% sequentially.
Nearly one quarter of all digital conversations on LiveEngage were mobile in the first quarter, up from 21% in the 2015 and eighteen percent in the 2015. Our momentum also continued on the upgrade front. LivePerson ended the first quarter with 57% of customers on the platform, up from 45% at year end and 20% a year ago to the quarter. We will be deeper into our mid market enterprise customer base and began upgrading the first lines of business for many of our largest brands. The data we have seen from these first set of mid market enterprise customers is that there is a 10% plus increase in usage by the third month.
These solid usage trends are similar to those that we reported in 2015 when the LiveEngage base was primarily small business. The validation of the value added from customers moving up to LiveEngage is remarkable. And a few examples are: hospitality customers saw greater than 20% increase in average order value and a 5% increase in conversion rates just in the first month of its upgrade. A telco customer realized a greater than 50% increase in engagements per hour and a nearly 20% increase in conversions. Fairhaven Health, an online fertility and wellness company tripled engagements after upgrading by increasing chat usage and adding content to mobile campaigns.
Another customer, Global Pharma, has been so impressed with LiveEngage that they are now proactively demoing platform to other internal lines of business. Interactions on LiveEngage platform increased more than tenfold. The scalability is proven. The largest LiveEngage customer is on track to power 7,000,000 in interactions. We remain focused on the upgrading process and you see line of sight to the end of the customers.
With large investment in LiveEngage, we're almost we're halfway through it. Operating expenses were 7% lower in the first quarter. We continue to expect year over year margin expansion and to our historic 20% plus EBITDA. We're pleased with significant progress made on our company objectives in 2016, and remain focused on upgrading our customers, strengthening retention rates and moving our customers to our vision. As a company, we're excited about the industry transformation that now appears imminent.
We expect to lead this shift in customer care and powering brands to meet consumers in the channel of their choice with communication experience that forges meaningful connections. And with that, I'll turn the call over to Dan, who will first give us our first quarter results and outlook in more detail. Dan?
Speaker 1
Thanks, Rob. The key takeaway from this call is that we're on track with our primary objectives in 2016. We are focused on upgrading our remaining customers to LiveEngage and now have more than half the base on our platform. We are advancing our mobile strategy as evidenced by a 60% quarter over quarter increase in LiveEngage and mobile chat interactions. We're also on schedule to deploy in the coming weeks our first enterprise using a purely mobile offering for connecting with consumers.
We have kept our cost in check, which is prepping the business for increased profitability with the growth in revenue. With that, I will turn your attention to our first quarter twenty sixteen operating results. Revenue of $55,500,000 at the midpoint of our guidance expectations. The 7% year over year decline primarily reflects the loss of the previously disclosed customer relationship that ended in the 2015 and the effect of foreign currency. The company's customer renewal rate stabilized sequentially in the first quarter and our trailing twelve month customer renewal rate of 83% met our internal expectations.
We continue to anticipate returning to a 90% plus customer renewal rate we convert more customers to LiveEngage. Our trailing twelve month average revenue per enterprise and mid market customer reached $200,000 in the 2016, up from $170,000 in the 2015. The trailing twelve month revenue figures are pro form a to exclude contributions from the previously disclosed customer contract that ended in the 2015. We signed 84 sales in the first quarter and 20 of those was new enterprise or mid market brands. The trend we discussed in prior quarters continues with the total deal count narrowing due to sales pipeline that was more heavily weighted to larger, more strategic deals and our near term focus on upgrading rather than upselling existing customers.
B2B revenue declined 8% to 51,700,000 and consumer revenue increased 2% to $3,800,000 The B2B revenue breakdown by industry was retail at 23%, financial services 21%, telecommunications 17% technology 10% and other 30%. Revenue from our international operations was roughly flat in constant currency in the first quarter and accounted for approximately 32% of total revenue. First quarter GAAP net loss per share of $05 was better than previously issued guidance. Adjusted EBITDA per share of $08 and breakeven adjusted net income were both within our previously issued guidance ranges. First quarter gross margin was 71.4%.
The company's cash balance, including restricted cash, decreased to $48,500,000 at the end of the first quarter from $54,200,000 at 2015. Cash from operations increased by $2,200,000 in the 2016 compared to a decline of $7,600,000 in the 2015. The shift is primarily due to our ability to move more customers to cash payments in advance on annual billings. As a result, deferred revenue more than doubled year over year to $21,900,000 in the first quarter from $10,200,000 a year ago. The company repurchased approximately 637,000 shares of stock for 3,200,000 in the first quarter.
An additional $16,900,000 remains available under the share repurchase authorization. Capital expenditures totaled $4,500,000 which includes the cost to consolidate offices in Atlanta and data center upgrades. Turning your attention to LivePerson's 2016 outlook. Our year to date progress has been in line with our guidance and our financial expectations are unchanged. Our detailed financial expectations are as follows: for the 2016, we expect revenue of $56,000,000 to 57,000,000 adjusted EBITDA of 4.5 to $5,400,000 or $08 to $0.10 per share adjusted net loss of $03 to $01 per share and GAAP net loss per share of $09 to $07 For the full year 2016, our expectations remain unchanged.
Revenue of $230,000,000 to $235,000,000 Revenue guidance includes a negative foreign currency impact of approximately 1,500,000.0 adjusted EBITDA of $23,000,000 to $26,000,000 or $0.40 to $0.45 per share adjusted net income per share of $0.5 to $0.10 and a GAAP net loss per share of $0.17 to $0.12 We expect to pay cash taxes of between $1,000,000 and $3,000,000 in 2016. Recall, however, that in 2016, we began applying the standardized 35% tax rate to all non GAAP add backs and calculated adjusted net income. For comparison, the tax rate on non GAAP add backs was effectively 0% in 2015. This change has no effect on cash taxes, but accounts for a $0.12 per share increase in our estimated 2016 adjusted taxes as compared to our 2015 actuals. Furthermore, as a percent of revenue for the year, we anticipate gross profit to be approximately 70 percent sales and marketing, 40% G and A, 15% and R and D, 16%.
Please refer to LivePerson's earnings release issued earlier today for details on our full year 2016 assumption. We have also published a supplemental presentation on the Investor Relations page of our website that reviews key points from the earnings call. In the first quarter, we captured efficiencies from past investments and scalability of LiveEngage, reducing expenses even as we advanced our priorities of upgrading our customer base and fueling mobile adoption. We continue to expect to exit 2016 with a low to mid teens adjusted EBITDA margin, putting the company on track to return to subsequent and subsequent years to our previous peak of 20 plus percent adjusted EBITDA margins. Our objectives for the remainder of 2016 are clear.
We want to move the majority of our customers base to LiveEngage, which we believe, in turn, will strengthen our renewal rate, fuel mobile adoption, drive usage and deliver cost efficiency. Our focus for the rest of the year is on successful execution of these priorities. With that, I'll open the call to questions. Operator?
Speaker 0
Your first question comes from Richard Baldry from ROTH Capital.
Speaker 3
Curious in your customer migration effort, if there's any consistent trend that the customers that are actually choosing to drop off and not move over to the live feed platform, it's geographic vertical, sort of their strategic high margin, low margin? Anything to think about so we kinda understand what that, where that lives. We
Speaker 2
we haven't had anyone that didn't wanna convert yet. So who's ever converting, they've got dates, and they're going across. So we haven't had someone say, I don't want to convert or I'm leaving because of live engagement.
Speaker 3
Thanks.
Speaker 1
Yeah.
Speaker 0
Your next question comes from Jeff Van Rhee from Craig Hallum.
Speaker 4
Great. A couple of questions. Maybe first just on the pace of signings. I mean, we can see the customer accounts. You talked about the deals getting a little larger, and obviously, you're focused on migrations as well.
But just I think I have two questions along those lines, bookings versus expectations and then retention of your, say, your upper 50% in terms of performing salespeople thus far? Any changes in churn in the sales adds?
Speaker 1
So bookings versus expectation, we did what we expected. From a bookings perspective, We knew going into this. We were focused on migrating customers. And Jeff, as you know, a good portion of our bookings come from existing customers and a smaller portion from new customers. So they're where we expected.
And then as far as churn in the sales organization, we've got the people that are part of the group and have been consistently part of the group. There's no significant churn that I'm aware of related to the group. And we've actually brought back a couple of people that have left us in the past and rejoined.
Speaker 4
And I guess with the percent of the base that is migrated over to LiveEngage, particularly those that are a bit more mature, you've talked about the increased interactions and a lot of other metrics that are reflecting increased usage
Speaker 1
of the
Speaker 4
platform. Can you translate that at all into some sense of revenue uplift for people that have been around six months, twelve months? Obviously, I think if you recall the pricing, you'll reflect the increased usage on a trailing basis. Maybe you can just give me some sense of how the usage translates into potentially increased revenue from customers that are on LiveGauge on some sort of annualized basis.
Speaker 1
Yes. So Jeff, the way that our contracts work, they're usually annual related contracts, and we're not trying to move people over on the renewal dates. We're actually moving them over mid contract. So we are seeing an increase in usage, and many of our mid market or enterprise customers are on annual versus monthly usage cap. So as that usage as they move over, we're absolutely seeing an increase in usage on these customers and the adoption of mobile is strong as well.
But you won't see that start to hit the revenue until future periods when they either come up for renewal or they need to actually up make an adjustment or an upsell on their contract.
Speaker 4
But I guess at this point, even if they aren't up for renewals, you got somebody that's been on six, nine months, maybe approaching twelve months. You don't have enough of a sample just to say it looks like on an annualized basis we'd see this kind of uplift?
Speaker 1
We do, and that's something that we look at on a regular basis. And again, just recall, in the migration, it's mostly small business customers that we started with. And I wouldn't see I would see increased usage from those small business customers. And then on the mid markets and enterprise, we started to move over those mid market customers and some of the ones that have gone live in this platform longer than others, you can see the increase in usage over time and our expectation over time that we would expect to see a correlation to revenue.
Speaker 2
Okay. Thanks.
Speaker 0
And your next question comes from Mike Latimore from Northland Capital Markets.
Speaker 5
Yes, I think Danny said one of your goals for the year was to get the majority of customers over LiveEngage. I guess in your slide, it looks like you're kind of already there, I believe. So like are we talking closer to, I don't know, 75% by year end?
Speaker 1
Yes. I mean, listen, the key is to move as many customers as you possibly over the LiveEngage platform. And one of the things Rob talked about in his script is, you know, we've got enterprise customers that may have multiple lines of business. And so when we migrate those customers, we're migrating the first line of business, and we don't count that as a customer migration until we move, all of the business around the LiveEngage platform. So we went after the small business customers, good number of customers, maybe not a lot of revenue.
Now we're really focused on the mid market and enterprise guys and bringing this over. So we're at 57% so far through the first quarter. And our goal is to get more over as continue throughout the year. And our expectation is that we'll be above that 75% range.
Speaker 2
Well, we'll finish the small businesses finishing in the next two months or so. So we're done with small business. And now we're focused mid market has been moving for a while and then enterprise is going. So we're now focused on those two. But I would say above 75% is obviously where we're trying to go.
The other thing is there's a cost structure of supporting the old platform, and we know it's a it's a different cost structure than we have for the new one. So we wanna move 100% of the customers over, obviously, so that we can get the benefits of that and the benefits of the scale on the technology in LiveEngage. And then LiveEngage is obviously focused on our vision of mobile and being mobile first. So it's it's sort of like a get them moved, get them into the vision. So we want everyone across.
And and it and the customers love the product. The ones that are on it, whether greenfield or they're the new custom existing customers, when they go on it, it's a great product. And it took three years to develop, but it's it's working quite well, and they automatically move to getting more usage, especially around mobile. They can go from zero to, like, 16 to 20% when they move. And so it gives them a lot of, abilities to focus on where their consumers are today.
Speaker 5
Yeah. Yeah. Okay. And then are there any, key features you wanna add to LiveEngage to maybe, you know, make make it, more amenable to some very big customers or certain verticals, or do you feel like the the features are kind of catnated?
Speaker 2
It's pretty rich right now, and it's got a lot in it. So there's not too much. I mean, we're we're gonna there's a lot to build. We have a a road map for the next, you know, eighteen months that's already locked down. There's a lot going on the mobile side.
There's a lot going on with the bot side now with the stuff we're doing with Facebook and and integration of bots and stuff like that. Now co browsing all that basic stuff is in the platform across everybody has access to it. So, there are some unique things that we'll deliver around the mobile side. We won't talk about them today, but as we get them out into the market, we'll talk more and more about the mobile features, I think.
Speaker 5
Got it. And then just last one, CAO Contact Air One, how is that trending relative to your expectation?
Speaker 2
They they did well. They, have really bounced back. The automotive vertical is doing really well. There's some exciting deals in there. They're they're starting to pick up on the housing side even outside of the we started with one large aggregator.
Now they're moving into, one or two others. So they're they're really doing good as a team. The consumer team did good. The, even small business had its best it's had sort of, like, its best months on net ads. Usage in the small business segment was up, because of the LiveEngage platform.
There's extra billing there. So those parts are going quite well. Obviously, the enterprise now is where we're focused on on moving that across and getting that to the next level, but the other pieces in the company are doing quite well. Even consumer did it well. Your
Speaker 0
next question comes from Mark Chappell from Benchmark.
Speaker 6
Hi, good evening. Robert, in your prepared remarks, you provided some metrics around your mobile chat. I think, for example, mobile interactions were up 60% live engage. Nonetheless, I didn't catch all those. I was wondering if you could just go through those metrics one more time.
Speaker 2
Yes, let me get those here. So the company we had 60% I'll just read it. So the company saw strong momentum across the first quarter. Interactions on LiveEngage were up 60% sequentially. And then nearly onefour of all digital conversations on LiveEngage were mobile in the first quarter, up from 21% in the fourth quarter and 18% in the third quarter.
Speaker 6
Okay, great then. Great. And then as you start to move the bulk of all your customers, well, it looks like the bulk of all your customers are on LiveEngage now. Could you just review one more time how you're going to be increasing your wallet share from your customer base? A lot of that, I know, has to do with your usage based payment model.
Speaker 2
Yeah. The the mobile, obviously, is is one of our the biggest strategies because it's really attacking the, the 800 number and the call center and voice, where chat, at its best, we're doing about 10% of interactions come through chat. We think with mobile, we can take a larger share of the 90% that's left over in the voice category. So we're very focused on the mobile side and attacking that. Obviously, there's other things like content and content targeting, which is being used.
But mobile is the focus of the platform, and really, we're putting a lot of the efforts.
Speaker 6
Great. Thank you.
Speaker 0
And your next question comes from Glenn Mattson from Ladenburg Thalmann.
Speaker 7
Yes. Hi. Just curious on the migration. Last quarter, you mentioned that most everyone at this point has had firm dates set up for when they're going to convert over if they haven't already. As you get closer to those dates, as they come along, are you seeing any pushback or any people getting cold feet at the last minute just kind of kicking the can down the road at all?
Or any color on that?
Speaker 2
No. There's some. You're going to have a little bit of pushback sometimes and maybe four weeks off or eight weeks. But so far, the customers that we have down with time frames are excited to go. And they've had to allocate resources.
So we're pretty much on their time frame and ours, but so far, it looks very good.
Speaker 7
Right. And the 83% customer retention rate, can you remind us what that was last quarter? And any forecast for when that number would bottom and start turning back up?
Speaker 1
So last quarter, was 84%, Glenn. We stabilized, and we actually had a slight uptick in Q1 over Q4. So our stated goal is when you get over 90%, and this is a trailing twelve month metric. So when you take out one quarter and add another quarter, and you have a little bit of movement. But we think we're turning in the right direction, and we're encouraged by Q1.
It's met our internal expectations, and we're focused now on Q2 and executing in Q2.
Speaker 7
Okay. Great. Thanks. Good luck,
Speaker 1
Thanks.
Speaker 0
Your next question comes from Brian Schwartz from Oppenheimer.
Speaker 3
Hi. This is Koji Keta for Brian Schwartz. Thank you for taking my questions. First question on the consumer revenue segment. It looks like this is the first time it's grown in, I think, a couple of quarters here.
Just maybe a bit of color on what contributed to that consumer segment returning to growth? And is that return to growth in the consumer segment something that's sustainable for the remainder of the year?
Speaker 2
Yes. Hate to be a broken record, but they created a mobile app and launched their own mobile app and have you can get experts on the mobile device. And so that's what's actually been fueling their growth. It looks pretty good right now. So, you know, we have to see how it plays out.
But their mobile app they put out there is getting good use, and, there's little there's good excitement about it. So, but I think I'd like to see another quarter, but I feel good about what we're seeing right now.
Speaker 3
Got it. Thanks. And then last quarter, talked about a couple of good bookings, customers that happened in the third quarter, fourth quarter of last year looking to make a meaningful impact in the second quarter. Were those on track to go live in the second quarter? Maybe an update on those customers?
Speaker 2
Yes. The one that's the mobile only customer is on track. And I'm trying to think of the other one and the other one. Yes, they're both on track. I got nods from around the room.
So yes, they're both on track.
Speaker 3
Great. And then maybe a question for Dan or Rob. Just trying to think about the international opportunity here with you're disrupting the 800 number internationally, is that opportunity the same? I mean is the customer or consumer interaction with brands out there? Is it pretty similar to what you see in North America?
Or maybe it's a little bit different where maybe even the live engagement platform offers an even better engagement channel for those types of consumers.
Speaker 2
Yeah. You know, I mean, if we if we start over in Asia, you've got a mobile first world. So they're already sort of mentally there about how mobile should work and mobile engagement. Europe's pretty similar to The US. And so I I we pretty much see, like, if you look at there's an even bucket of pipeline building in each of the big regions that we have our offices in and our sales sales operations and partners.
So I feel pretty good. You know, right now, we're very focused on the, telco space, and I'd like to see that we bring up some large telcos in each region around the vision, you know, within the next quarter or two. So that's kind of where our focus is. But Europe's actually, I think, quite different even now in the last two years. There's a lot more aggressive competitive behavior and companies that are being very innovative, even against their U.
S. Counterparts. So I feel very good about what I see globally right now.
Speaker 3
Great. Thank you for taking my questions.
Speaker 0
Your next question comes from Craig McElroy from First Analysis.
Speaker 8
Thanks. Good afternoon. Most of my questions have been asked actually. I wasn't clear, I mean you made a variety of comments about the migration in Q1. Did you actually say that the quantity that you wanted to migrate in Q1, did that play out versus your plan?
I'm not sure if you really said that or not, I'm curious about that.
Speaker 1
Yes. So that actually did play out. We're at 57% of the number of customers as of the end of the first quarter. So yes, that did play out to our expectations. And we stated we want to get the majority over, and I think there was an earlier question.
Our target is to be better than 75% of our customer base over, and we're working diligently in Q1 and Q2 and Q3 on the mid markets and enterprise.
Speaker 8
Is there any particular lumpiness amongst the quarters coming ahead for migrations? Or that may not be a good question, but I'm curious how is there a crucial period for you that you want to get past that will make you feel like you're going to achieve your goal for the year? Or is that sort of not necessarily the case?
Speaker 1
No. Our goal right now is we're we're trying to space them out to the best of our ability, the best way we possibly can. You know, the only thing that would come up a little bit is q four when, you get to that October late October, early November time frame where customers want to lock things down. So our goal is to make as much progress as we can, Q1, Q2 and Q3, knowing that, that potential lockdown of pharmacies from our customers will happen in that late October, early November time frame.
Speaker 2
But I think we're trying to bring as many as we can. Obviously, it's focused. Right? So we we we know once you move everyone to LiveEngage, then we get to sort of we have a new company in many ways. We're very focused on accelerating that, but as we were balancing bookings and stuff like that.
But the focus and number one goal is to get everyone on it. Because once they're on it, we got a very stable base, a committed customer, and they can grow into the vision. So if we can accelerate it, we'll put more into it. You know, it's just we're moving as quick as we can.
Speaker 8
Okay. And then just thinking about Q4, as you were mentioning, I don't remember if there is particular seasonality to your enterprise renewals. Obviously for some enterprises it can
Speaker 1
be
Speaker 8
Q4. Does that is that a dynamic that you also would have to balance there at the end of the year versus getting the migrations or is that not necessarily a factor?
Speaker 1
Our renewals are pretty much spaced out throughout the year. The Q4 is a little bit heavier than Q3 and Q2. So it is a little bit of a balancing act. But as we talked about a little bit earlier, one of the comments earlier is, you know, our goal is to migrate these or upgrade these customers, sorry, bid contract, not to do it on a renewal date. So that is our goal, and that's what we're focused on.
Speaker 0
And you have a follow-up from Jeff Vonary from Craig Allen.
Speaker 4
Okay. Yes. Just one. So the target is 75% migrated end of year. Are you able to hazard a guess or give us even an outline of how you think about the dollar migration?
I mean at what point would it be reasonable to think you'd have 80% -ish of the dollars migrated? Obviously, that goes to the revenues are top heavy. You get into the meat of your enterprise guys. Just sort of trying to logically map out when you how you're thinking about when you cross that threshold with respect to dollars as opposed to just customer count.
Speaker 1
Yes, Jeff, that's a very good question. One, look at internally quite a bit and to measure, of course, we use internally. So as we move throughout the year and we've stated that we're going after the larger customers in Q1, Q2 and Q3, starting with mid market and going into the enterprises. So not ready to give a time frame or an actual percentage, sorry, on revenue. But obviously, we get north of that 75%, a good number of our customers, our larger customers will be in that bucket.
The second piece, and this is an important one, is if I have a financial services company, it's known as one company, maybe at a current level, but we might be in 10 lines of business. And, you know, our goal is to move over those lines of business onto the LiveEngage platform. That may not count as a customer count, but may have an impact on revenue. So it's an important distinction to make as we're doing our analysis and counting internally and obviously reporting to you guys externally. But the key here in 2016 is to get as much revenue on the LiveEngage platform as possible.
We spent 2015 moving small business customers over, getting some learnings, understanding the product, informing the product roadmap. And as we move into 2016, we have to focus on mid market and enterprise customers. And those customers generate, obviously, a decent chunk of our
Speaker 2
revenue. Okay. Got it. Thanks.
Speaker 0
There are no questions at this time.
Speaker 2
Thank you for joining our Q1 call, and we'll see you on the next quarter. Thank you. Thanks a guys.
Speaker 0
This does conclude today's conference call. You may now