LivePerson Inc (LPSN) 2016 Q1 法說會逐字稿

Good afternoon and welcome to the LivePerson First Quarter 2016 Earnings Call. My name is Lilli Anna and I'll be facilitating the audio portion of today's interactive broadcast. (Operator Instructions) At this time I would like to turn the show over to our LivePerson founder and CEO, Rob LoCascio,?and its CFO, Dan Murphy.

Thank you very much. Before we being, 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. Actually 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'll 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 LoCascio.

Thanks, Dan. And thank you for joining LivePerson's First Quarter 2016 Conference Call. We're pleased to report that first quarter revenue and profit measures were within or 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, et cetera, all in the context of customer care. 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 chat bots 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 outcomes.

A longstanding customer, 1-800-Flowers, was highlighted as a first adopter of these new capabilities in Mark Zuckerberg's keynote speech. 1-800-Flowers 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 as 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, US 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 and mobile devices. In fact, in the second quarter we're set to deploy our first enterprise mobile customer. Millions of consumers of this brand will soon have an alternative to voice that gives them back their time and delivers a more connected experience.

The large telecom 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 is its 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 customer engagement programs. 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 million consumers across 14 countries signed a seven-figure, three year contract to deploy LiveEngage worldwide. The selection was part of Liberty's new transformation initiative which is tasked with standardizing best practices and best in class technologies across all their brands.

Orange, a global leader in telecommunication services replaced a competitive solution with LiveEngage in France last month. The 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 CODiE for Best Customer Success Management Solution in 2015, LiveEngage has been selected as a CODiE 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, upgrading 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 conversation on LiveEngage were mobile in the first quarter, up from 21% in the fourth quarter of 2015 and 18% in the third quarter of 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 moved deeper into our midmarket 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 midmarket enterprise customers is that there's 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: a hospitality customer saw a 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 & mobile campaigns. Another customer, a global pharma, has been so impressed with LiveEngage that they are now proactively demoing the platform to other internal lines of business.

Interactions on the LiveEngage platform increased more than tenfold year over year. The scalability is proved. Our largest LiveEngage customer is on track to power several million interactions this year. We remain focused on the upgrading process and we see line of sight to the end of the customer upgrades.

With large investment in LiveEngage, we're almost halfway through it. Operating expenses were 7% lower in the first quarter. We continue to expect year over year margin expansion in 2016 and to return to our historic 20% plus adjusted EBITDA margin in subsequent years. We're pleased with significant progress made on our company objectives in 2016 and we 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, empowering brands to meet consumers in the channel of their choice. With a communication experience that forges meaningful connections.

With that, I'll turn the call over to Dan who will give us our first quarter results and outlook in more detail. Dan?

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 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 costs in check which is prepping the business for increased profitability with growth in revenue.

With that I will turn your attention to our first quarter 2016 operating results. Revenue of $55.5 million is at the midpoint of our guidance expectations. The 7% year over year decline primarily reflects the loss of a previously disclosed customer relationship that ended in the second quarter of 2015 and the effect of foreign currency. The company's customer renewal rates stabilized sequentially in the first quarter and our trailing 12 month customer renewal rate of 83% met our internal expectations. We continue to anticipate returning to a 90% plus customer renewal rate as we convert more customers to LiveEngage.

Our trailing 12 month average revenue for enterprise and midmarket customer reached $200,000 in the first quarter of 2016, up from $170,000 in the first quarter of 2015. The trailing 12 month revenue figures are pro forma to exclude contributions from a previously disclosed customer contract that ended in the second quarter of 2015.

We signed 84 deals in the first quarter and 20 of those were with new enterprise or midmarket brands. The trend we discussed in prior quarters continues with a total deal count down due to a sales pipeline that is more heavily weighted to larger, more strategic deals and our near-term focus on upgrading rather than up selling existing customers.

B2B revenue declined 8% to $51.7 million and consumer revenue increased 2% to $3.8 million. The B2B revenue breakdown by industry was retail at 23%, financial services, 21%, telecommunication, 17%, technology, 10%, and other at 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 $0.05 was better than previously issued guidance, adjusted EBITDA per share of $0.08 and break even 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 $48.5 million at the end of the first quarter from $54.2 million at year end of 2015.

Cash from operations increased by $2.2 million in the first quarter of 2016 compared to a decline of $7.6 million in the first quarter of 2015. The shift was 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 $21.9 million in the first quarter from $10.2 million a year ago.

The company repurchased approximately 637,000 shares of stock for $3.2 million in the first quarter and an additional $16.9 million remains available under the share repurchase authorization. Capital expenditures totaled $4.5 million 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, in the second quarter of 2016, we expect revenue of $56 million to $57 million, adjusted EBITDA of $4.5 million to $5.4 million, or $0.08 to $0.10 per share, adjusted net loss of $0.03 to $0.01 per share, and GAAP net loss per share of $0.09 to $0.07.

For the full year 2016, our expectations remain unchanged. Revenue of $230 million to $235 million. Revenue guidance includes the negative foreign currency impact of approximately $1.5 million. Adjusted EBITDA of $23 million to $26 million, $0.40 to $0.45 per share. Adjusted net income per share of $0.05 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 million and $3 million in 2016. Recall however that in 2016 we began applying a standardized 35% tax rate to all non-GAAP add backs when calculating 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 actual.

Furthermore, as a percent of revenue for the year, we anticipate gross profit to be approximately 70%, sales and marketing, 40%, G&A, 15%, and R&D, 16%. Please refer to LivePerson's earnings release issued earlier today for details on our full year 2016 assumptions. 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 the 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 in subsequent years to our previous peak of 20% plus adjusted EBITDA margins.

Our objectives for the remainder of 2016 are clear. We want to move the majority of our customer base to LiveEngage which we believe in turn will strengthen our renewal rate, fuel mobile adoption, drive usage, and deliver cost efficiencies. 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?

(Operator Instructions) Richard Baldry, ROTH Capital.

Curious on your customer migration effort, if there is any consistent trend in the customers that are actually choosing to drop off and not move over to the LiveEngage platform, whether it's geographic vertical, sort of they're strategic, high margin, low margin? Anything to think about so we kind of understand where that lives? Thanks.

We haven't had anyone that didn't want to convert yet. So, whoever's converting, they've got dates and they are going across. So, we haven't had someone say, I don't want to convert or I'm leaving because of LiveEngage.

Okay. Thanks.

Jeff Van Rhee, Craig-Hallum Capital Group.

Couple of questions, maybe first just on either the pace of signings and when we see the customer counts, you talked about the deals getting a little larger and obviously you're focused on migrations as well, but just I guess two questions along those lines. Bookings versus expectations and then retention of your upper 50% in terms of performing sales people thus far, any changes in churn in the sales?

So, bookings versus expectations, 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, we'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 is 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.

And I guess with the percent of the base that is migrated over to LiveEngage, and 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 of the platform. Can you translate that at all into some sense of revenue uplift for people that have been around 6 months, 12 months? Obviously, I think if I 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 potential increased revenue from customers that are on LiveEngage on some sort of annualized basis?

Yeah. So, Jeff, the way that our contracts work, they're usually annual contracts and we're not trying to move people over on their renewal dates, we're actually moving them over mid-contract. So, we are seeing an increase in usage and many of our midmarket or enterprise customers are on annual versus monthly usage. So, as they move over, we are 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 make an adjustment or an up sell in their contract.

But I guess at this point, even if they aren't up for renewals, you've got somebody that's been on six, nine months, maybe approaching 12 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?

We do and that's something that we look at on a regular basis. And again, just recalling the migration, it was mostly small business customers that we started with and I would see increased usage from those small business customers. And then on the midmarkets and enterprise, we're starting to renew those midmarket customers and some of the ones that have been on the LiveEngage platform longer than others, you can see we increased the usage over time, and our expectation over time that we would expect to see a correlation to revenue.

Okay. Thanks.

Mike Latimore, Northland Capital.

I think Dan said one of your goals for the year was to get the majority of customers over to LiveEngage. I guess in your slide, it looks like you're kind of already there, I believe. Are we talking closer to, I don't know, 75% by year end?

I mean, listen, the key is to move as many customers as we possibly can over to the LiveEngage platform, and one of the things Rob talked about in the script was we've got enterprise customers that may have multiple lines of business. And so when we migrate those customers who are migrating a first line of business and we don't count that as a customer migration until we move all of the business over on to the LiveEngage platform. So, we run after the small business customers, a good number of customers, maybe not a lot of revenue, now we're focused on the midmarket and enterprise guys and moving those over. So, we're at 57% so far through the first quarter and our goal is to get more over as we continue throughout the year, and our expectation is that we'll be above that 75% range.

We'll finish, the small business is finishing in the next two months or so. So, we are done with small business and now we're focused, midmarket has been moving for a while and then enterprise is going. So, we are now focused on those two, but I would say above 75% is obviously where we are trying to go.

The other thing is, there's a cost structure of supporting the old platform and we know it's a different cost structure than we have for the new one. So, we want to 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 sort of like, get them moved, get them into the vision. So, we want everyone across. And the customers love the product. The ones that are on it, whether they're greenfield or they're the existing customers, when they go on it, it's a great product.

And it took three years to develop, but 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.

Okay. And then are there any key features you want to add to LiveEngage to maybe make it more amenable to some of the very big customers or certain verticals or do you feel like the features there are kind of as needed?

It's pretty rich right now and it's got a lot in it. So, there's not too much. I mean, there's a lot to build. We have a roadmap for the next 18 months that's locked down. There's a lot going on in the mobile side. There is a lot going on with the bot side now with the stuff we're doing with Facebook 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 those, the mobile features I think.

And just last on CAO, Contact At Once, how is that trending relative to your expectation?

They did well. They really bounced back. The automotive vertical is doing really well. There are some exciting deals in there. They are starting to pick up on the housing side, even outside of -- we had started with one large aggregator, now they're moving into one or two others. So, they are really doing good as a team.

The consumer team did good. Even small business had its best months on net adds. Usage in the small business segment was up because of the LiveEngage platform and there's extra billing there. So, those parts are going quite well. Obviously the enterprise now is where we're focused 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 well also.

Thanks.

Mark Schappel, Benchmark.

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% with LiveEngage. Nonetheless, I didn't catch all those. I was wondering if you could just go through those metrics one more time?

Yeah. Let me get those here. So, the company, we had 60% -- I'll just read it. The company saw strong momentum across the first quarter. Mobile chat interactions of LiveEngage were up 60% sequentially. And then nearly one quarter of all digital conversation on LiveEngage were mobile in the first quarter, up from 21% in the fourth quarter and 18% in the third quarter.

Okay, great. And then as you start to move the bulk of all your customers, it looks like the bulk of 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.

The mobile obviously is one of the biggest strategies because it's really attacking the 800 number and the call center and voice. With 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 leftover 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 where we're putting a lot of the efforts.

Great. Thank you.

Glenn Mattson, Ladenburg Thalmann.

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 the year, are you seeing any pushback or any people getting cold feet at the last minute and just kind of kicking the can down the road at all, or any color on that?

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 timeframes are excited to go and they've had to allocate resources. So, we're pretty much on their timeframe, but so far it looks very good.

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?

So, last quarter was 84%, Glenn. We stabilized and we actually had a slight uptick in Q1 over Q4. So, our stated goal has been to get over 90% and this is a trailing 12-month metric. So, when you take out one quarter and add another quarter, you have a little bit of movement. But we think we're trending in the right direction and we're encouraged by Q1. It's met our internal expectations and we are focused now on Q2 and executing in Q2.

Okay. Great. Thanks. Good luck, guys.

(Operator Instructions) Brian Schwartz, Oppenheimer.

This is Koji Ikeda for Brian Schwartz. Thank you for taking my questions. First question on the consumer revenue segment, it looked 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?

I hate to be a broken record but they created a mobile app and launched their own mobile app and you can get experts on the mobile device and that's what's actually been fueling their growth. It looks pretty good right now. So, we have to see how it plays out, but their mobile app they put out there is getting good use and there's good excitement about it. But I think I'd like to see another quarter. But I feel good about what we're seeing right now.

Got it, thanks. And then last quarter you talked about a couple of good bookings customers that happened in the third quarter or 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?

The one that's the mobile-only customer is on track, and I'm trying to think of the other one. Yeah, they're both on track. They got nods from around the room. So, yes, they are both on track.

Great. Thank you. 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 LiveEngage platform offers an even better engagement channel for those types of consumers?

If we start over in Asia, you've got a mobile first world. So, they're already mentally there, about how mobile should work and mobile engagement. Europe is pretty similar to the US. And so we pretty much see if you look at it, there's an even bucket of pipeline building in each of the big regions that we have our offices in and our sales operations and partners. So, I feel pretty good. 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 within the next quarter or two. So, that's kind of where our focus is. But Europe is actually, I think, quite different even now in the last two years. There's a lot more aggressive competitive behavior and companies there are being very innovative even against their US counterparts. So, I feel very good about what I see globally right now.

Great. Thank you for taking my questions.

(Operator Instructions) Craig Nankervis, First Analysis.

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 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, and I'm curious about that?

Yes, it 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 move better than 75% of our customer base over and we are working diligently in Q1 and Q2 and Q3 on the midmarkets and enterprises.

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?

No, our goal right now is we're trying to space them out to the best of our ability in the best way we possibly can. The only thing that would come up a little bit is Q4, when you get to that, October, late October or early November timeframe 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 from our customers will happen in that late October or early November timeframe.

I think we're trying to bring as many as we can. Obviously it's focus, right. We know once we move everyone on LiveEngage then we have a new company in many ways. We're very focused on accelerating that, but as to balancing bookings and stuff like that, but the focus and number one goal is to get everyone on it, because once they are on it, we know we got a very stable base, a committed customer and then they can grow into the vision. So, if we can accelerate it, we'll put more into it. It's just we're moving as quick as we can.

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 be Q4. 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?

Our renewals are pretty well spaced out throughout the year but 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 it a little bit earlier, one of the comments earlier, our goal is to migrate -- upgrade these customers, sorry, mid-contract, not to do it on a renewal date. So, that is our goal and that's what we're focused on.

Thank you for the help.

Jeff Van Rhee, Craig-Hallum.

Great. Yeah. Just one. So, the target, 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% 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?

Yeah, Jeff, that's a very good question, one we look at internally quite a bit and it's a measure, of course, we use internally. So, as we move throughout the year and we have stated that we're going after the larger customers in Q1, Q2, and Q3, starting with midmarkets and going to the enterprises. So, I'm not ready to give a timeframe or an actual percentage, sorry, on revenue, but obviously if you 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 parent level. But we might be in ten lines of business. And our goal is to move over those lines of business onto the LiveEngage platform. So, 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 onto the LiveEngage platform as possible. We spent 2015 moving the small business customers over, getting some learnings, understanding the product, and forming a product roadmap. And as we into 2016, it's a focus on midmarket and enterprise customers and those customers generate obviously a decent chunk of our revenue.

Okay, got it. Thanks.

(Operator Instructions) There are no questions at this time.

?Thank you for joining our Q1 call and we'll see you on the next quarter.

Thank you.

This does conclude today's conference call. You may now disconnect.