Good afternoon, ladies and gentlemen, and thank you for standing by. Welcome to LivePerson's First Quarter 2024 Earnings Conference Call. My name is Judith [indiscernible}, and I will be your conference operator [Operator Instructions] As a reminder, this conference is being recorded. I would now like to turn the conference call over to Jon Perachio, Senior Director, Investor Relations. Please go ahead.

Thank you, Judith. Joining me on today's call is John Sabino, CEO; and John Collins, CFO and COO. Please note that during today's call, we will make forward-looking statements, which are predictions, projections and other statements about future results. These statements are based on our current expectations and assumptions as of today, May 8, 2024, 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 and in the comments made during this conference call as well as in 10-Ks, 10-Qs and other reports we file 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. Both the press release and the supplemental slides, which include highlights for the quarter, are available on the Investor Relations section of LivePerson's website at ir.liveperson.com. With that, I'll turn the call over to LivePerson's CEO, John Sabino.

Thank you, John, and thank you all for joining us today. Before providing a detailed update on the business and our strategy, let me briefly review where we are in our transformation journey and what we have delivered since last time we spoke. One of my first priorities in coming into the company was to establish a clear and transparent plan to align our efforts in people with the key focus areas necessary to improve our business performance and deliver profitable growth. We formalized and launched this plan in February and are measuring and tracking how we are progressing with our plan across the business. Another priority was striking our capital structure. As we discussed during our last call, giving the market and our customers' confidence that LivePerson is a long-term partner by proactively addressing our debt profile remains a top priority for the company. In our first quarter, we repaid in full the outstanding 72.5 million principal amount of the 2024 notes. In addition, we have spent a great deal of time on the topic of the 2026 notes in recent weeks and currently expect to have an update with respect to these efforts this month. The last priority I will briefly discuss is how we are improving our go-to-market capabilities. I've now met with well over 100 customers, having discussions consistent with what I shared with you on our last call. Customers continue to value our products and are excited to partner with us in their digital transformation. Additionally, I have learned that there are a number of customers interested in partnering with LivePerson and a bundled offering with voice. And to that end, we will soon be announcing a strategic partnership with our major global CCaaS player that I will detail later in this call. Lastly, we…

Thanks, John. I'll begin with a brief operational update, followed by a discussion of our financial performance and guidance. First, I would like to emphasize John's remarks on our capital structure. Deleveraging remains a strategic imperative for the company. As planned, we fully repaid the $72.5 million remaining balance of the 2024 notes that matured in March. We have also spent a considerable amount of time and effort on addressing the 2026 notes, and we currently expect to provide an update on these efforts later this month. In terms of deals and customer wins, we signed a total of 40 deals in the first quarter, including 12 new logos and 28 expansions and renewals. First quarter deals included upsells with a large Astra based bank and a fast casual restaurant chain. New logo wins included a global digital entertainment company and a global distributor of electrical products and services. Consistent with the plans we shared last quarter, we embarked on a significant rebuild of our go-to-market operations in the first quarter, hiring new leadership restructuring teams and improving processes has a short-term cost. While we mitigated some expected customer churn in the first quarter, midstream changes to our go-to-market operations translated to below average deal counts and values in the first quarter. In total, deals were down 43% year-over-year and 35% sequentially. To reiterate some of the critical changes, we installed new leadership, including a new Chief Customer Officer and a VP of sales operations, and we have hired a new Chief Revenue Officer. Collectively, these new leaders, coupled with industry standard processes and greater clarity and roles and responsibilities establishes a solid foundation for our return to profitable growth. For example, we can now evaluate customer health across technical and strategic dimensions 5 quarters into the future, giving us…

Thanks so much, John. Before turning the call over to Q&A, I want to emphasize to this audience that everything we told you we were going to execute during our last call, we have done or we're executing imminently. As I've said before, we'll take time to see these results of these operational improvements. But the changes that drive the results we see are happening today and will continue to happen as we transform this company and progress on our journey to profitable growth. At this point, I'd like to hand the call over to the operator for Q&A.

[Operator Instructions] Oour first question comes from Jeffrey Van Rhee of Craig-Hallum Capital Group.

Maybe the first one for John [indiscernible] John. In terms of the -- you've been out talking to a lot of the customer base, just take a minute and expand on what you've learned in terms of the common traits of those that churned off the platform? I know you had some suspicion last time we spoke, but I imagine you know a lot more now.

Yes. So some of the customers that have churned were looking for enhanced functionality that we did not plan to provide on our road map, specifically the ability to completely customize or build custom interface on our agent workspace. So there are some that fall into that category where they are looking for enhancements that we are not willing to bring at this point in time. That's definitely one category of customer. The other ones are very similar to what we spoke about before, which is we're seeing that the consolidation around CCaaS and digital. And this is where this partnership that we're referencing, I think, will be a very, very important way of going to market in the future to counteract that churn. So it falls into 2 central categories, one being feature and functionality that a specific customer might want and need for their business. That's not really on a road map at this point and the other being platform consolidation, which we've discussed in the past, and we feel that this partnership that we'll be announcing very shortly will definitely assist us in counteracting.

In the quarter, I think you commented on the -- obviously, it's in the deal counts as you said your bookings value also missed expectations. Just talk about the disruption to Q1 sales cycles and bookings and maybe with a lens of losses, your win rates may be declining versus maybe changes you made that disrupted cycles, possibly buyer reluctance due to balance sheet kind of what you saw? Because obviously, I'm sure you'd want to leave deals in flight, not disrupt those deals, if you could help it. So just talk through what led to the weaker bookings in the quarter.

Yes. Correct. We -- so the commercial headwind wins around the debt, of course, played a role. Customers are waiting to hear back from us on how we're progressing on that debt discussion. So some of the bookings opportunities push. And then we've -- as I discussed before, we've retooled the front end of our go-to-market. Everything from restructuring to the team, bringing in new leadership, establishing new processes. And this has a disruptive effect. And as John Collins stated, it really was essential to slow down, put these changes in place, and we're starting to see those green shoots fall-through in this coming quarter. Additionally, I've said in the past, the customers have felt at times it's difficult to do business with us. We definitely have turned the corner, I think, in our pricing and packaging in a way that will allow us now to start experimenting with what I spoke about in my prepared remarks, to simplify the actual process of closing deals with our customers, give them more economic value and have a competitive price in the marketplace. So these pieces of also were not in place in Q1. We had a lot of work to do. We worked very rapidly at it. And now we have most of them in place and we're doing well on the pilot side of it as well with the new pricing and packaging. And again, we're starting to see some positive results there.

I guess, last for me then. You gave the revenue number for Wild Health. Can you give a sense of where it was for the quarter, loss-wise, annualized expected loss? Just wondering how that's impacting the bottom line?

Yes. So in terms of losses from Wild health, in general, for the full year, as we discussed last quarter, we're expecting well under -- well under $10 million for the year, and we further reduced that through the actions we're taking right now with respect to the decision to sell or wind down the business. And I expect to have more of an update on that topic later this month.

Thank you. Ladies and gentlemen, we have reached the end of the call. Thank you for joining us, and you may now disconnect your lines.