LivePerson - Earnings Call - Q1 2017

Transcript

Speaker 0

Good afternoon. My name is Adam, and I'll be your conference operator today. At this time, I'd like to welcome everyone to the LivePerson First Quarter twenty seventeen Conference Call. On the call today are LivePerson's Founder and CEO, Rob LoCascio and CFO, Dan Murphy. All lines have been placed on mute to prevent any background noise.

And after the speakers' remarks, there will be a question and answer session. Thank you. LivePerson CFO, Dan Murphy, you may begin your conference.

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 available in the Investor Relations section of our website. I will now turn the meeting over to Robert LoCascio, CEO and Founder of LivePerson.

Speaker 2

Thanks, Dan. Thank you for joining LivePerson's first quarter conference call. 2017 marks a new chapter for LivePerson as we execute on our LiveEngage growth strategy. With LiveEngage, we're giving brands the power to reap huge efficiencies and strengthen customer relationships while replacing outdated voice contact center technology. LivePerson is creating a real industry buzz as our mobile messaging platform gains momentum.

We signed several new messaging deals in the first quarter and are now scaling multiple large enterprise customers in each region of the globe. These include several of the world's largest telcos and will still include many leading financial service institutions. Our ability to power an always on digital connection with consumers is already spurring transformation of the customer care industry. Our announcement last week of LiveEngage for bots further unlocks the potential of our platform, exposing a true game changing scenario. This revolutionary extension of our platform treats bots and AI just like traditional agents and enables enterprise brands to manage multiple bots at scale in tandem with human agents.

It's what we call Tango. AI and human agents seamlessly hand off conversations to each other with bots providing instantaneous, intelligent responses to consumer queries and human agents supervising the exchanges. By marrying messaging with bots and AI, brands can virtually eliminate capacity constraints, multiplying the benefits generated from a digital connection with consumers. And with LiveEngage, large enterprise can leverage one platform to power, measure and report on all messaging conversations regardless of channel or if they are led by human agents, AI or a combination of the two. Over the next few years, we expect every leading brand to shift voice agents and even store based employees to messaging.

We also expect brands to leverage LiveEngage to add robust AI and bot capabilities into their messaging communication. Early adopters are already leading the way, and the masses are looking to follow. They just don't know how to implement these new solutions in a scalable successful way, but we are proving we know how to do this at scale. In fact, we shared our vision, our strategy and success stories just last week when we held the customer care industry's first AI Bot Summit at Carnegie Mellon's prestigious Human Computer Interaction Institute. This was an amazing event.

Attendance exceeded our planned capacity as approximately 130 senior leaders from 80 of the top brands across the globe heard firsthand from their peers how messaging is a killer app and brands who deployed messaging with AI now and deploy it quickly. LivePerson customers, Vodafone and Royal Bank of Scotland, shared to some of their successes embracing LiveEngage and AI to manage the tango between AI and human agent. According to Vodafone's UK Head of Contact Center Transformation, the combination of person and chatbot is where the real magic lies. We also introduced our customers to some of the many AI and chatbot providers already running live with leading brands on the platform, including IBM Watson, Toshiba and Chatfuel, the spot integrated with LiveEngage was recently showcased at Facebook's F8 conference. This is the power of our open platform where APIs enable third party developers to rapidly integrate new capabilities into LiveEngage.

This sophisticated combination of bot technology and messaging is just one of LivePerson's key differentiators. We have been a leader in digital transformation for the past twenty years, and we have the foresight to build LiveEngage from the ground up to manage unique challenges of running an always on enterprise messaging connection center versus a traditional inefficient call center. We understand the changes that have to happen in the workflows, analytics and measurements to capture the transformative potential of messaging. And we are extending our lead in messaging by rapidly expanding our list of enterprise referenceable customers. For example, in the first quarter, we won back one of Europe's largest broadband providers who left a few years ago to try a Me Too chat solution from a voice vendor.

I'm satisfied they joined one of our mobile messaging events and immediately aligned with our vision. The brand is now live on a 7 figure deal that's substantially larger than the web based chat program we once had with them. We signed another 7 figure deal in the first quarter with an existing multibillion dollar financial services provider. This leading brand views messaging as a primary destination where customer service will happen and is looking to use it to reduce phone volume substantially. They're also using messaging to replace our competitor's e mail solution.

We achieved a milestone in the Asia Pacific region by signing an expansion that landed us our first 7 figure customer in Japan. This leading telco started working with LivePerson a little over a year ago with just a handful of agents. Today, they are blazing the trail for other brands in Japan by focusing on digital transformation of their contact center. Other mid to high 6 figure contracts include one of the world's largest music subscription services, a leading automotive financial services firm and a global provider of corporate travel services. As we emerge from our transition and execute on this tremendous opportunity, we sought to enhance our Board with new directors that have track records for developing high growth operating cultures, outstanding customer experiences.

We recently added two directors who exemplify these skill sets, Jill Layfield, the former CEO of Backcountry and current CEO of Tamara Mellon and Fred Mosler, who was at Zappos from the beginning and ran day to day operations at Zappos and was instrumental in growing it to be a multibillion dollar revenue company and further to its sale of Amazon. Jill and Fred's guidance will be invaluable as LivePerson sets its sights on capturing a meaningful share of the multibillion dollar brand to consumer messaging market. Our strategy to win in this market is clear. In each region of the globe, we have identified a select group of brands that hold the power to change the face of customer care. Each of these brands have thousands of agents in their contact centers.

They collectively connect with billions of consumers every year. Our regional sales teams are intimately familiar with these target customers. Many are already customers with local relationships. As a result, over the last six months, we have empowered the sales directors in each of our regions to direct their own local selling efforts. This places the decision making closer to the customer, aiding execution and speed to market.

LivePerson has reinforced the local selling effort with a globally driven marketing program that brings customers, prospects and field organization together through high touch, high value regional events such as the messaging AI bot we just recently did. These events showcase the power of LiveEngage platform and how our thought leadership is already helping enterprise shed their roots in analog voice to embrace a digital connection that transforms customer care. This combination of regional sales approach and targeted marketing efforts are providing success are being successful and have been key to our win so far with messaging and AI in 2017. As the effort solidified, it has become apparent that maintaining an overlay of a global sales manager role is no longer necessary for executing on our strategy. As such, Dustin Dean has decided to pursue new opportunities.

We want to thank Dustin for his incredible contributions to LivePerson over these past years, especially the last two, where he was instrumental in helping us successfully navigate the transition to our new platform. Our field and marketing structure is gelling nicely. We are focused on building momentum through 2017 and growing second half revenue over first half. This should position LivePerson for a return to year over year revenue growth. First quarter results set us on a path to meet this target.

Selling activity accelerated sharply over last year's pace, returning to pre migration levels. We set a record for average selling prices, and we delivered revenue at the high end of our guidance range. We also saw Q1 metrics that continue to validate our key assumptions on the LiveEngage platform and our vision. Mobile usage is expanding rapidly on LiveEngage and averaged 35% of interactions in the first quarter as compared to about 710% historically on legacy. Same customer interaction on LiveEngage continued to grow faster than 10% year over year.

The dollar retention rate remained greater than 100 over the trailing twelve months, a solid indicator of the future potential growth of LivePerson once our entire customer base is online engaged. It is encouraging to see such healthy metrics even before messaging adoption becomes fully reflected in the numbers. Customers are only able to reap the benefits of mobile messaging, AI and bots once we move them onto a low eyed engaged platform. As such, we continue to aggressively migrate customers. We ended the first quarter with less than 20% of revenue on legacy and on target with our migration schedule.

We expect to end the second quarter with approximately 12% of revenue on legacy and then to complete our platform transition in the third quarter with less than 5% of revenue on legacy. The remaining legacy customers will be SandBox to maximize profitability. LivePerson also remains a target to generate between 16,000,019 of savings in 2017, excluding onetime restructuring and noncash expenses as we wind down our legacy infrastructure and realign our operations. This is on top of the nearly $15,000,000 of savings captured in 2016. It's exciting to see our vision, strategy and execution come together in 2017.

The investments we made in our LiveEngage platform and in customer migration are paying off as leading brands across the world are now relying on LivePerson to change how they connect with their consumers. With the migration winding down, our sales engine revitalized, and our primary focus is to send our lead in messaging and to shift a portion of the two seventy billion one-eight 100 calls made each year onto our platform. We look forward to building on the progress we have already seen in 2017. I will now turn the call over to Dan, who will discuss our first quarter results and outlook in more detail. Dan?

Thanks, Rob. We are pleased with

Speaker 1

the start to 2017 as we entered the year with four key priorities and hit the mark on each of them. Our first priority is to refocus on selling and growth as we put migrations behind us, and we successfully shifted back into that mode in the first quarter, accelerating selling activity back to pre migration levels and generating a record average selling price. Our second priority is to extend our lead in the mobile messaging space, and we did make solid progress here as well. We signed multiple messaging rooms in the first quarter, launched LiveEngage for bots and held the customer care industry's first summit on leveraging AI and bots alongside alongside messaging for customer care. LivePerson's third priority is to complete the platform transition to LiveEngage, and we're on track with that goal.

We exited the first quarter with less than 20% of revenue on legacy. We're now on target to end the migration in the third quarter with less than 5% remaining on legacy. Finally, we aim to position LivePerson for steady margin improvement as we are trying to grow by capturing savings and efficiencies as we wind down legacy and realign on LiveEngage. We are executing on this goal and expect to reduce total expenses, excluding onetime restructuring and noncash charges, by 16,000,000 to $19,000,000 in 2017. This is in addition to the nearly $15,000,000 we saved in 2016.

As Rob stated earlier, LivePerson has started a new chapter in 2017, and we are looking forward to capitalizing on the investments we have made in our product, customers and infrastructure these past few years. I will now review our first quarter operating results and 2017 financial guidance. Total revenue of $50,900,000 was at the high end of our guidance range and consisted of B2B revenue of 46,700,000.0 and consumer revenue of $4,200,000 As outlined on last quarter's call, we set a clean start for LivePerson in the 2017, recognizing the majority of the final revenue impacts from winding down our legacy offering. We expect the first quarter to mark the bottom of our platform transition and for revenue to build sequentially as we move through the remainder of 2017. Trailing twelve month average revenue per enterprise and mid market customer was above $200,000 in the first quarter, in line with our 2016 average.

We signed 74 deals in the 2017 compared to 84 in the 2016. The lower deal count reflects our LiveEngage growth strategy, which is to focus on a targeted list of leading global brands where we have the opportunity to drive transformation. Our strategy is working as LivePerson's average selling price increased significantly versus the first quarter of last year. We also signed 25 new customers, up from 20 a year ago. For the trailing twelve months ended March 3137, the dollar retention rate for customers online and usage exceeded 100.

This measure takes into account the full impact of upsells, down sells, renewals and cancellations from our existing customer base. The B2B revenue breakdown by industry was retail 25%, financial services 20%, telecommunications 17%, auto 15%, technology 8% and other at 15%. International operations accounted for approximately 38% of total revenue in the first quarter of this year. As planned, we continue to wind down infrastructure and realign our organization around our LiveEngage growth strategy. We recorded $240,000 of charges in the first quarter tied to this effort.

We also incurred approximately $1,800,000 of nonrecurring litigation costs. Total first quarter charges of $2,000,000 were within our guidance range of $1,900,000 to $2,300,000 Excluding onetime restructuring and noncash charges, total LivePerson operating expenses decreased $3,400,000 year over year. Gross margin increased 150 basis points to 72.9% in the first quarter from 71.4% a year ago. Excluding onetime charges, the gross margin was 73.1%, an increase of 170 basis points. This improvement primarily reflects the diminishing cost of our legacy operations and lower production costs for LiveEngage as the platform matures at the enterprise level.

First quarter GAAP net loss per share of $0.10 adjusted net income per share of $01 and adjusted EBITDA per share of $06 were all within the respective guidance ranges. At the end of the first quarter, cash on hand, including restricted cash, was $51,700,000 or approximately $0.92 per share, approximately $3,000,000 higher than the year ago period. Live person used cash from operations was 3,100,000.0 in the first quarter, reflecting typical first quarter cash flow patterns. Deferred revenue increased more than 50% to $33,100,000 in the first quarter and $21,900,000 a year ago, primarily based on moving customers to cash payments in advance. Capital expenditures totaled $2,700,000 in the first quarter.

The company also spent approximately $1,000,000 to repurchase 142,000 shares of its common stock in the first quarter. An additional $19,200,000 remains available under the share repurchase authorization. As we turn our attention to guidance, we are raising the low end of our previously issued revenue guidance range due to solid initial traction with the efforts to reignite our sales engine and our continued progress winding down legacy. We expect modestly higher revenue in the 2017 than in the first and continue to target 2017 revenue better than the first half. Our goal is to exit 2017 and to run rate that positions LivePerson for reduced growth in 2018.

Full year guidance for 2017 net income, adjusted net income and adjusted EBITDA is unchanged. However, as efforts to wind down legacy infrastructure and realign on LiveEngage to pursuing slightly ahead of plan, the pacing of forecast of restructuring and severance charges is likely to pull forward a bit. Our revised expectations are as follows: restructuring and severance charges of $300,000 to $500,000 in the second quarter and $2,000,000 to $2,200,000 in the third quarter. This compares with the prior guidance for the entire 2,300,000.0 to $2,500,000 of charges that took place in the third quarter. Counting of nonrecurring legal expenses tied to IP litigation is unchanged and expected to total $6,000,000 to $6,500,000 for the full year of 2017.

Our intent remains to maintain, if not improve, GAAP and non GAAP margins in 2017 relative to 2016 and position LivePerson with a leaner and more nimble footprint as we prepare for growth in the years ahead. I will now review our more detailed financial expectations. For the 2017, we expect revenue of $51,000,000 to 52,000,000 GAAP net loss per share of $0.12 to $0.10 adjusted net income per share of $01 to $02 and adjusted EBITDA of $3,300,000 to $4,200,000 or $06 to $07 per share. For the full year 2017, our expectations are as follows: revenue was $2.00 $4,000,000 to $2.00 $9,000,000 from $2.00 $1,000,000 to $2.00 $9,000,000 previously Revenue guidance includes a negative foreign currency impact of $3,000,000 GAAP net loss per share of $0.40 to $0.31 which includes 16 percent $0.16 per share in onetime and restructuring adjusted net income per share of $07 to $0.12 and adjusted EBITDA of $17,300,000 to $21,300,000 or $0.30 to $0.37 per share. Furthermore, as a percent of revenue of the year, excluding onetime charges, we anticipate gross profit to be approximately 73.5%, sales and marketing of 38.5%, G and A of 16.5% and R and D to be 20%.

Note that these margins exclude the above discussed onetime restructuring and litigation charges. Also, as a reminder, we have updated the methodology for calculating adjusted net profit per share in 2017. Whereas we previously incorporated the GAAP tax rate into our calculation, we now start with GAAP pretax profit loss, add back restructuring onetime and noncash expenses and then apply a standardized 35% tax rate. The goal of the revised calculation is to limit the volatility of GAAP tax rate fluctuations and to more closely align non GAAP taxes with cash taxes. Please refer to LivePerson's earnings release issued earlier today for details on our full year 2017 assumptions.

We have also published a supplemental presentation on the Investor Relations page of our website that reviews key points from the earnings call and a full reconciliation of 2016 adjusted EPS under the historical and updated methodologies. You may find the presentation on the Investor Relations section of the company's website. I'll close with what I view as a summary of key takeaways. The migration to LiveEngage is on track to end in 2017, improving our visibility to target the first half of the bottom in revenue for LivePerson transition. This visibility, along with the initial traction from reigniting our sales engine, has enabled us to raise the low end of our revenue guidance range in 2017.

We are extending our leadership in messaging and now building on our value proposition by integrating the management, measurement and reporting of bots and AI at scale for enterprises. We continue to see greater than 100% dollar retention rate on LiveEngage for full service customers, a solid indicator of future growth potential. We are on target to shed approximately $16,000,000 to $19,000,000 in 2017 expenses. And by the 2017, we build our gross margin back to 75%, in line with historical peaks. We have a healthy capital structure with $52,000,000 in cash and no debt, providing us with ample resources to execute on our vision.

With that, I will open the call to questions. Operator?

Speaker 0

Our first question comes from the line of Koji Ikeda from Oppenheimer. Koji, your line is open.

Speaker 3

Hi. Thanks for taking my questions. Just a quick question here on the looks like there was a pretty big jump in the percentage of recurring revenue that is being generated on the LiveEngage platform in Q1. Was there anything in particular in the quarter that was contributing to that good pace of that recurring revenue migration? I guess just thinking about that remaining that less than 20% out there that's left, is the profile of these revenue transitions more or less the same as what has been going on over the past few months?

Or is the profile of these transitions a little different?

Speaker 2

So I'll answer the

Speaker 1

second first the second question first. The profile of these customers is relatively the same. We've gone through a lot of migrations with enterprise clients, mid market clients, and these transitions are relatively the same. It's just timing for us. And as far as the first part of the question, just remember, Cozy, on the RMR, there's two things that are occurring.

We're selling, obviously, LiveEngage to new customers, so that has an impact on the RMR. And the second thing is that we're migrating customers over from our legacy onto the LiveEngage platform, which has an impact on RMR as well. So we made quite a bit of headway from Q4 into Q1. And as we've talked about in previous calls, our expectation is to be done with the migration and have less approximately 5% or less of revenue on the legacy platform, which, of course, will sandbox and manage for profit.

Speaker 3

And I guess just a follow-up. I think you had about $10,000,000 of those $10,000,000 in recurring revenue that you say you're going to be sandboxing in the third quarter. And I believe you mentioned on a couple of calls before that some of the timing of those transitions is due to new product features. And if you could, could you please give an update on those updates and how to think about the product road map going forward?

Speaker 2

Yes. We're very focused on those road map items to move that revenue back onto the LiveEngage platform. So mean, we are juggling between features that they want to make the move from the old platform to the new one, and then also all the new features that we have around messaging and AI and all that stuff. So but, you know, they're they're being prioritized around the revenue opportunities. So we're very focused on, obviously, migrating all those customers as much as we can onto the platform.

That's why we're seeing we're on target. We'll be down to less than 5% of revenue in Q3 because of all the capabilities that we delivered in LiveEngage.

Speaker 3

Great. Thank you for taking my questions today.

Speaker 1

Thank you.

Speaker 0

The next question comes from the line of Richard Baldry from ROTH Capital. Richard, your line is open. Thanks. Can you talk a bit about the breadth of sales on the messaging, maybe across your sales quoted teams, how well you think that's spread around them and maybe geographically as well so we get a feel for how that's playing out across your go to market?

Speaker 2

Yes. I mean, we're seeing the high demand around the world, U. S. And Europe being the largest segments of customer demand. And, you know, the the enterprise sales reps are just focused on that.

They're just focused on new sales. We've, put their compensation against selling, messaging, and and all the capabilities. So that's it's a it's a pretty it's a very high focus, obviously, for each of them. As we know, last year, they were very focused on migrations and and not really new revenue opportunities. There's a a big focus on new revenue opportunities, and we we had a very strong q one from a bookings perspective, and so we're seeing some good traction with those guys.

Speaker 0

You've had a lot of success with telcos like Orange, T Mobile, Telstra. Can you talk about whether you see them as a really strong channel for you to get into their own customer bases on a go forward as sort of a leverage channel for you?

Speaker 2

Not today. I mean, it's a possibility in the future. We're just very focused on, as you point out, telcos. Have the largest telcos in every region now, except for South America. We're really not active direct.

We have some partners, but we have the largest telcos that are on messaging. So they were the first to adopt and go live. Part of it is because they have control over their devices. They have very active apps, and they understand messaging because they see it all day on on those apps. So so that's that's really a focal point from selling.

I think there's other areas that you're gonna see some channel pickup for us, especially in the AI space and the cognitive space. And there's some partners there that we'll be announcing in the next quarter. So I think there's some exciting things happening on that side. We're also becoming because we built the platform, it's truly an open platform. We have many companies that are integrating with us now, too.

So if we look at go back to bots, mean, it's it's it's kind of like there's a lot of talk about them. But actually implementing them and managing them and getting them onto a platform where they're transparent, most of the platforms don't do that. They just provide core AI technology. But we're able to put them onto a platform, and you're measuring them and deploying them like an agent. And so where we've been very direct in the past, I think you're going to see more indirect opportunities for us coming up shortly.

That's what I can see.

Speaker 0

And last one would be, if you look at the customer that you won back, was there anything unique about that customer that made that an opportunity to bring them back? Or something that would be more of a pattern that you think you could take that same sort of characteristics and look at the customers that have churned and put a concerted effort on bringing them back because of something that's consistent across the base?

Speaker 2

I think the most unique thing about this customer is that the person who let us go is the person who signed the deal. And so two years ago, you know, he he went to, one of the voice platforms that he has. You know, they threw chat in, and he didn't think it was strategic. And if you look, we worked with our customer for four or five years, and we got it to a certain place. Well, you know, a few years later, we just fit the strategy that he was thinking.

And he signed with the deal at at the start, which was the size of what chat was at its end. And and there's an excitement around really, you know, attacking voice. In that instance, we're up to about, five, six hundred agents already in a matter of weeks. So that's really I I don't think it's I think the unique part is usually that doesn't happen. Like, somebody fired you twenty four months ago, usually, they don't they they believe you're not gonna have something new and cool.

But our platform is so different and, so unique in what it can provide that this person do that. So I do think there's opportunity to go back. We are inviting customers back to look at what we have, on the platform. And so that's that's a very exciting opportunity in those customers who maybe left us that we can bring back.

Speaker 0

Thanks. Thanks. And your next question comes from the line of Jeff Van Rhee from Craig Hallum. Jeff, your line is now open.

Speaker 4

Great. Thanks. Rob, a couple of questions. Just first on the box, I don't know how to best frame the question, but I guess I'm curious in terms of the cycles that you're working on, what the frequency is where sort of this one of the key or central features of that cycle revolves around your ability to cope or handle with bots? I'm just curious where the adoption cycle is among the target customer base.

Speaker 2

Fundamentally, what I'm seeing today is that most deals will include AI. And so we've termed that as a bot. So I believe we're going to see a pretty heavy mix of bot and human together. And the way we built the platform is is pretty unique in that they they actually live together side by side. So the the agent can come in, and and there's no transfer.

Agent comes in when a bot's not working. An agent can watch a bot and see its performance. And, actually, we have we have a a system to manage the performance and and rate the performance on a scale, which we're using the Meaningful Connection score that we developed in the platform. And then we also have the ability for the human to pull in the bot if they wanna run an automated process. So they could be talking and messaging, and then they say, okay.

You wanna pay your bill? Let me bring in the bill pay bot, and we'll run the automated process on that. So we, you know, we have Watson. We worked with Watson. We showcased Watson, with a couple of clients at the conference last week, and it's a pretty a pretty integrated, very comprehensive experience that the consumer gets with it and will bring power of Labatt to care.

So I think we have a really good offering there. But I would suspect going forward, we'll see a lot most of our deals having both.

Speaker 4

Okay. And then with respect to sales, Dustin's departure, just can you expand on this a little bit, the timing? He obviously, haven't had a lot of outbound sales. You've been much more focused on migration. Given his sort of core expertise in the outbound, let's go book new business kind of mode, it would seem he would just be coming into a window that fits him really well.

So I guess two things. One, just the timing and a little more color as to what led that departure. And then two, churn. I'm just curious how the churn in the sales order has trended over the last two, three quarters.

Speaker 2

So there's been a little churn over the last couple of quarters. So we have a stable enterprise customer base. Dustin's been with us close to ten years. He went from a sales rep to running Asia and then, you know, really came back during the transition and helped with the migration. But we really are not gonna go back to a global role.

So we we have a very small group of customers that we are focused on. We have strong regional heads that are working those deals. And I hired a new global head of marketing ten months ago who's really doing a fantastic job overlaying all these conferences and go to markets. And marketing is playing a far greater role on a global way on a global way to to bring the expertise to our customers and bring them together. So it's kind of like for him, and it's there's not much to do here anymore.

And unless you were gonna go back to run a rep or run a region, and and we have people doing that. So, you know, it just seemed like a good time that we're exiting our migrations, and, you know, we wish him the best, and it's it's all on, very friendly terms. And we wanna thank him for all the service they did. But today, we have to align to where the business is, and that's more of a regional focused head, very targeted group of accounts.

Speaker 4

Last one for me then. Where are you with the rep count now? And how do you think about it, I guess, at year end?

Speaker 1

We're at about 45, 46 reps right now quota carrying. Based on where we are in the first quarter, we're comfortable with that number. But as the quarters pick up, we can add to it if we think it's necessary.

Speaker 2

But once again, our goal is to do a very targeted group of enterprise customers that run very large contact centers, and that's where we are. This is a very targeted list. So we don't need a ton of reps to do it. It's more of a very focused approach to those reps owning telcos, banks, cable, some retail, health care in these different regions. There

Speaker 0

are no further questions in the queue at this point. I'll turn the call back over to the presenters.

Speaker 2

Thank you, everyone, and we will see you on the next Q2 call. Thank you. Thanks, everybody. This

Speaker 0

concludes today's conference call. You may now disconnect.