Hi, everyone. Thank you for joining today. My name is Jeremy Sezler, and I work with Samad Samana. We're pleased to have John DiLullo here, DiLullo here today. He is the CEO of LiveVox. John, thank you for joining us today. Jeremy, thanks for having us. Absolutely. It's our pleasure. Maybe just for the audience to level set, maybe some people aren't entirely familiar with LiveVox story. Can you maybe walk us through, you know, what is LiveVox and what do you guys do? LiveVox is a contact center as a service product that is 100% based in the public cloud, and we support inbound and outbound contact center activities in major enterprise customers predominantly in the United States. Got it. All right, maybe just to dig a little more on that last part. Mainly enterprise customers, United States, I guess. Can you talk a little bit more, I guess, about who are your customers specifically, or is there any kind of vertical that you guys serve, or just a little more background on your customers? The company's founding was in early 2000s or so. Where we really came into being was during the economic crisis and the Great Recession, 2008, 2009, 2010. During that period, a lot of people were leveraging our product in consumer finance, and that became a big vertical for us. A large portion of our install base is consumer finance. That might be origination, could be collections, could be account maintenance. We also have largely because of our the way we're built, we're a almost 100% sold in a pay-as-you-go format or a usage-based format. Business process outsourcers, the big BPOs, have really loved working with us because as their workloads go up and down, we go up and down. That's probably our second largest tranche of customers, the third are, I would say, your run-of-the-mill enterprises. Our average customer bills with us about $400,000 a year, with 30 or 40 customers doing more than $1 million a year with us. It's mostly enterprise, but lots of BPO, lots of consumer finance. Excellent. That's very helpful. Maybe just to get a deeper understanding of the business, how do you look at the business, and what are some of the key metrics that you use to kind of gauge your success? I think the key metrics are probably the same that you use for most SaaS businesses, in that, you know, we're maniacal about ARR and watching our annual recurring revenue grow, but we care immensely about EBITDA and being a profitable enterprise. We watch gross margins. That's a particular strength of ours. We lead our category from a gross margins perspective. In fact, we've improved gross margins more than 900 basis points in just the last year. A lot of that is because we leverage the public cloud the way we do, and we can have an accordion model with our cost structure. Got it. That's, that's interesting and definitely, you know, I'll dig a little more into that later. Something I kind of want to start off with right out the gate, and I know it was gonna come eventually, so I might as well get ahead of it. You know, AI has been one of the biggest buzzwords, kind of in all of the CCaaS space. Can you talk about, you know, what is your AI strategy and how has it been impacting your business? Yeah, I'm pretty excited that the rest of the world is, has gotten excited about AI because it's something that has inspired us, and we've been lighting candles around the office waiting for this to catch on because it's such a profound impetus for our business. AI, and I think where it really got explosive is when people started to look at large language models, pseudo cognition, generative chat, all these areas. We've been in AI for a while. About a third of all of our customers use one or more of our AI products. The real power of AI is dealing with a greater social crisis or a greater crisis that we're all kind of dealing with, which is a shortage of people that are willing, able, desirous of working in a contact center. If you talk to people that are trying to deliver customer success stories and customer success, customer support, they're all struggling with the same thing. They can't find workers. You see this in the news every single day. The ability and the opportunity to automate some of these workloads is hugely liberating for our customers. The for instance that I'll use that makes this so exciting for us is that when you look at the total addressable market of people that are delivering contact center solutions, about 10% is on software and products that they build in the contact center. 90% is in payroll and the cost of staffing the contact center. Any opportunity to arbitrage that, any opportunity to take what was a costly, laborious process and turn it into something that's automated, is a big win for all of us. As you can imagine, the TAM is 10x. Just a couple of other data points, 'cause I know you'll ask them. You know, we since we're almost 100% usage-based, it's a very natural progression for us to move into AI, and then in that usage-based element, we see anywhere from 2-4x that we're able to bill for an automated agent, as you would expect, because there's such a wonderful arbitrage of the labor cost. We're 100%, you know, we're excited to see what's happening with AI. We, we believe it's a tailwind for us, and it's generating a lot of excitement in our customer base as well. Yeah, that's interesting. It's, it's interesting to hear that you've kind of been, you know, banging the table on AI for maybe a lot longer than others have. I guess, how has that fact itself, that maybe you guys have been investing in this versus, you know, kind of some players that are probably playing catch up now, how has that kind of, you know, given you either a competitive edge, or how have you kind of seen that play out? One of the things people are now that AI is so sexy, people are starting to really try to understand it. I think the first acknowledgment that technology evaluators see when they get up to the brink, is, you, I can't really deploy this in my traditional on-premises legacy. You really can't, unless you're gonna start racking and stacking computers and building out huge databases and everything, and the integrations into different delivery vehicles are difficult as well. I would say the same of my competitors that are in hosted solutions. They have a very difficult time accessing the tools and the massive resources of data that are available to a company like ourselves, which is built on the AWS backbone. We're 100% native, built in the AWS framework, 100% microservices, 100% API-driven, and the APIs that we use to communicate to our own services are the same that we allow everybody that's developing AI services to interface with as well. I know you're waiting for the punchline. Here's the punchline: What was people sweating customers and CIOs sweating their old legacy on-premises investments, has now become, "I need to move." All of a sudden, inbound, our website, everything, we feel the activity because people are saying, "I can't stay on-premises anymore," or, "I can't stay in this proprietary," may not be on-prem, but it's a proprietary hosted data center. Got it. That definitely makes sense. You mentioned that uplift that you get from AI with your usage-based model. I guess maybe to kind of dig a little deeper, I guess, which products of yours do use AI, and how exactly does AI kind of flow through in the product? Well, AI today. I mean, we have all the products you would think we have, like bots, like two-way chat, and all of those get some benefit from that. In reality, perhaps the area that we're seeing the most explosive opportunities are in those that are associated with speech, and specifically, I'd say speech transcription. Because once you start to transcribe speech, you have flat files that you can search against, and you start to collect a lot of data. I can collect in a textual way, every word spoken in a contact center, and in some cases, every word spoken at a branch that day, week, month. That's the type of data that all of a sudden I can start to run different types of supervised or unsupervised queries against in the AI speak, to try to discover themes, threads. Why are people canceling? What are people calling about? What was the number one thing people visited my stores about today? Why was the number one reason that people asked for a return? Incredibly powerful tool. You know, the second one is, of course, our Virtual Agents. Anything that can automate, as I mentioned, anything that takes that 9/10 of the budget associated with running a contact center and gives the operator the chance to automate is a huge money-saving opportunity. That's where we go every time. Gotcha. Yeah, that's fascinating. Just to pivot a little bit, I think, you know, the other kind of hot topic right now is the demand environment with the kind of the macro that we're facing. Can you talk a little bit about maybe what you're seeing in the demand environment, maybe versus six months ago, 12 months ago, and then kind of what you're seeing in terms of customer behavior? I know that there is a demand environment question out there. To me, it's a box full of Wisconsin air, in the sense that we're not seeing it because we're not generally agent-based. A lot of people are concerned about pressure on... Well, a lot of people consume products like ours based on seats. "I need this many seats." One of our really unique differentiators is our consumption-based model. We don't really care, and you don't have to pay for our product all night long while your agents are back home sleeping. We build our models based on consumption. We haven't felt that I need less seats, I wanna go back down on my seats, because most of our platforms are very on-demand anyway. You know, as you saw from our last quarterly earnings report, we continue to grow, our usage on the network continues to grow. Our customers are consuming our product, and I think actually, the more variable the environment gets economically, the better companies like ourselves are gonna do, because we're a safe bet when you're not really sure about what's happening in the macroeconomic environment. Got it. That's, that's good to hear. Kind of to pivot again, you know, I think you guys have made a lot of changes to your go-to-market. Maybe can you talk about, like, what is your go-to-market strategy, and kind of what changes have you made? Well, our go-to-market strategy, the company was founder-led for more than 20 years. We had found an incredible amount of success in going after certain markets, certain verticals with great success. Some of it's retail, credit and collections, different type of telecom, for instance, is another strong market for us. We were very specific about that. There comes a point where you have to look for more. We kicked off, about 6 months ago, a collection of initiatives to help us branch out into different segments. Today, 99% of our business comes from domestic, whereas more than 60% of the addressable market is overseas. We're charging after that. 75% or 80% of all business today comes through different channels. Last year, that was zero for us, or essentially zero, a couple percent, we're charging hard against that. We also had restricted ourselves to very large accounts. We're looking at more of the mid-market. Our product has just gotten much easier to use over the years, mid-markets love our product, especially with the help of a good systems integrator. We don't do any work in the government, state, local, any of that, those areas. These are all expansion areas for us. That's why I think people are so excited about the LiveVox story. Got it. there's a few threads I guess I want to pull on there. I guess that's a huge change to hear so much coming from channel versus, you know, virtually not as much before. Is that related to kind of the sales changes you've made in terms of, like, your sales leadership? Can you talk about that? Well, I certainly hope so. We believe in channel. I believe in channels. I've been in channels, my whole career, and the people that were talking before also talked about the importance of alliances. I believe in all of this. I mean, I do. I think it's this notion of I'm gonna stimulate demand, sell it, install it, maintain it, all of that, you end up getting... I think you unnaturally limit your commercial opportunities. We are working with alliances, the likes of Jack Henry, the likes of CGI, the likes of Salesforce, as someone else mentioned. But we're also working with systems integrators. We're working with managed service providers. We're running the whole gamut thoughtfully, and we've added 5 value-added resellers this year. We've added 1 managed service provider. We just turned up our first international data center in the AWS instance in Dublin, Ireland. We're moving. I'm keeping it all within the expense envelope that we can manage and making sure that we can grow in a profitable way, but there's almost limitless opportunity. Got it. That makes sense. You mentioned some of your partners that you work with. I guess, what type of partnerships, I guess, what is the nature of the partnerships? What are you doing with them? You know, I guess what if you can just dig a little deeper into those? One of the things that we're famous for, I think, or our customers love about us, is that we focus a lot on the agent experience and what does the agent see, how productive can the agent be? If you're having trouble filling all your seats in a contact center, and LiveVox can make your agents 20% more productive, which we routinely do, then we are. That's really an important element of that. We have built a workflow experience management interface for the agents, where they can leverage those different tools that we mentioned, all those different feeds and sources of record. We are not going to replace. A lot of the largest U.S. banks leverage us in their consumer credit operations. We're not gonna replace their source of truth. We're not gonna replace their workforce management solutions. We need to interface with them. Some of that's architectural because we are, as I mentioned, I mean, 100% API-based, and we even leverage our own APIs for our own product, so these are tested, battle-hardened APIs. We open that up, and we work with companies like OpenAI. We work with companies like Verint. We also work with companies like CGI and Jack Henry, as I mentioned, that are sources of truth in finance verticals and others. That's the power of the platform. Got it. We've talked a bit about sales and go-to-market. I kinda wanna talk about marketing. It seems like there's been kind of a sharp increase in recognition, and you guys are showing up in a lot of third-party analyst reports. What's driving this? Has there been any change to strategy? Well, I think what's driving the recognition that we're getting from all the third parties is the quality of the product. Is there a change in strategy? I mean, I think you're talking about Frost and Forrester and Aragon and DMG. Everybody, all of a sudden, is banging the drum about LiveVox. Yes, I mean, we're paying attention to those teams, but they're paying attention to us, too. I think part of that was maybe when we went public. Part of that was, you know, we're really doing very well in certain verticals. Our company continues to grow, and we are from a marketing perspective, I'd say we've sharpened our edge a little bit. It used to be when you went to our website, you saw a screenshot, and that was kind of old world. We've modernized a lot, and we've really turned the whole company into a force. You know, I like to think of it as a force for good with our clients, that we are going to make the people that are operating contact centers, heroes and game changers. That's that essence has followed through everything. It's followed through our collateral, it's followed through our website, it's followed through all our media, and it's resonating with customers, and I think it's resonating with the technical analyst community as well. Got it. That's very helpful. Just to pivot again, for the sake of time, I wanna talk a bit about the competitive environment, I guess. Who else do you see out there in RFPs? Who are you, who you typically see as yourselves competing against? Well, the universal donor is Avaya, probably, right? I mean that in the nicest, most professional way possible, but they are, you know, they are having a difficult time. They're having a difficult time, you know, from all, everything that you hear, but also they have, I don't know, how much? 1.5 million seats or 2 million seats. Whatever they have, they have a large install-based contact center. I worked there for 5 years, I can speak to that. They're global, they're everywhere, and their customers really wanna move, and they don't necessarily have the most elegant solution, and there's... The customers are trying to figure out what to do next. I think at that time, people start to say, "I really want to embrace AI technology. I don't want to be on premises anymore. I don't want all these BTUs, I don't want all these trunking costs. I don't want all these critical service vulnerability. I don't want all this. I want to be in a cloud. That is what is pulling, that is what's pulling people. Now, it's not just, it's not just Avaya, it's Alvaria, it's Noble, it's all the old Nortel kit that's out there still. There's a bunch of... I do think what I really, and I said I light a candle every day, but I do believe it's AI that is, has turned the light bulb on for a lot of people and are saying, "Okay, I wasn't really sure that what I got different other than it moved from on premises to in the cloud." Now, I think people are saying, "Wait a second, I do understand what I get different. I get the opportunity to really begin to, you know, arbitrage or change out some of these very expensive payroll costs for some automated processes and procedures that, by the way, also give me much better forensics, much better telemetry. I can really see what's going on in my, in my business. Got it. That's fascinating. Just for the sake of time, 'cause I, there's a lot I really wanna dig into. You touched on the gross margin expansion. That's really impressive, I think. Can you kinda talk about the levers there that you pulled, and kind of how much further expansion can we expect? How much further expansion? That sounds like a forward-leading statement, right? I'll go there. What are the levers you can kinda pull to drive? We have, like I said, we've marched up 900 basis points in just the last year. A lot of that has been by fully moving to AWS and fully moving to this, and I've said it over and over again, but this microservices serverless environment that we live in AWS. We're able to really minimize our compute costs much better than anybody else that's running their own data center. The other thing that's happened as part of that is we have the ability to burst. While somebody else may want to take I don't know, let's use it for sake of argument, I have 100 agents, but I wanna be able to handle 20 or 30 virtual agent sessions. I could handle 200, 300, 400 virtual. There's no limit, essentially, when you're in the AWS environment, as to how much you can burst. Same thing on outbound. I can launch 100 calls, 1,000 calls simultaneously, there's an incredible amount of scale without cost, and that's why you see the gross margins getting so much better. I think we're in our last quarterly earnings report, we were just right around 69% gross margin. I will remind you, we spent... I'm gonna get this number wrong. We spent about $5,000 of CapEx last quarter. We're not building clouds anywhere. Everything is variable. In fact, all last year, we had less than $1 million of CapEx, and that's whiteboards and computers, and chairs, and all that kind of stuff. As far as getting cost out, the scalability, working in the AWS on-demand environment, as our volume gets heavier, our opportunities to get that better, you know, continue. In fact, AWS, they're notable about it, but they've had, like, 100 price reductions since 2006. If all these trends continue, you know, we see a potential path that is, you know, certainly over 70% gross margin, but maybe as high as 75%. That's fantastic. Can you talk about maybe, like, what are your key areas of investments kind of for the next, you know, next year or two, and how are you balancing growth and growth on your investments? Well, we're balancing growth and investment by really watching all the different levers, especially EBITDA. I mean, the company's been profitable now 2 quarters in a row. We've given a, you know, an outlook that we expect to be profitable. Again, this is, you know, this is kind of a first for us beginning in Q4. We want to stay there, and then we wanna balance our growth. The areas that I talked with you about are. You may have saw that in January we did a reduction in force. That reduction in force opened up a lot of oxygen in our P&L for us, and the response to it was very good. I mean, nothing really suffered from. in the business. It gave us the opportunity to invest in some of the areas that I mentioned, like channels, which is a high leverage investment area, like international. Working with channels is another high leverage investment area. Some of the R&D work that we've done in the past 2 years is also making it easier for us to go down market, which is also another high leverage investment area. I think we're gonna focus on that for now. That and giving oxygen to some of the AI solutions that we already have on the platform and, you know, as appropriate, bringing more into the fold. Yeah, absolutely. We have a few minutes left. I have a few more questions, but if anyone has a question, please feel free to let me know. You mentioned earlier, there's been, you know, that, you know, you primarily target enterprise, but the middle market likes your products as well. Can you talk about, is there any pull down market, or is there room to expand into other, kind of customer demographics? There's lots of pull down market, and you have to think about what you mean by down market. I don't think the market, the customer that has maybe 10 agents, that might be too far below us to do efficiently, effectively, but it's not too far below our managed service providers and our value-added resellers and systems integrators. I don't really think there's any contact center size that's off-limits, provided that we're using the right kind of partner. As I mentioned, we were 100% direct install, service, maintenance, activation, everything, up until about 6 months ago. Making that change opens up a huge amount of addressable market for us, and a lot of customers. We said no to a lot of customers. Every day, we said, "No, you're too small, you're too this, you're too that." Now, we're more of the inclusive party. Gotcha. Interesting. We're just about out of time. I guess just to kind of wrap it up, I guess, kind of looking forward, I guess, what are you most excited about for LiveVox? I guess, if you can kinda, you know, kinda put a capstone on that. Well, I think we've been, we've been chopping a lot of wood for the last, six months or so, moving the company in a collection of different vectors. What we talk around, about around the virtual water cooler is opening the aperture. The company has so many incredible assets. It has this incredibly forward-thinking architecture and deployment. The marketing message is tuned in. We think if we just open the aperture, give the company, the business, a little bit more oxygen, we're gonna see some great results. We signed 10 new enterprise customers last quarter. That was after, you know, a year where we were pretty flat on customers. I'm excited about the next year, and like I say, I think a lot of the heavy lifting is probably behind us. We've got this AI tailwind, as I mentioned, if there is, to the extent that there's uncertainty in the economic environment, that's probably a positive for us as well. It seems like a perfect storm, but in a good way. Got it. Yeah, that's exciting. All right, we're just about out of time. John, thank you again, and, thank you everyone for listening in. Thank you, everyone.