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Good afternoon, ladies and gentlemen. Thank you for standing by. Welcome to LivePerson's Fourth Quarter 2025 Earnings Conference Call. My name is Joe, and I will be your conference operator today. [Operator Instructions] As a reminder, this conference is being recorded. I would now like to turn the conference over to Mr. Jon Perachio, Vice President of Investor Relations. Please go ahead.

Thank you, Joe. Joining me on today's call is John Sabino, CEO; and John Collins, CFO and COO. Please note that during today's call, we'll 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, March 12, 2026, 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, ir.liveperson.com. With that, I'll turn the call over to LivePerson's CEO, John Sabino.

Thank you so much, Jon, and thank you all for joining us today. 2026 marks a clear transition for LivePerson from rebuilding to execution. Over the past year, we've strengthened our foundation by improving our balance sheet, optimizing our cost base and sharpening our operations across the company. We are now carrying this discipline into 3 primary areas of focus that we believe can drive LivePerson towards a return to growth. First, we are continuing to prioritize customer growth and retention by leveraging our leading technology and improved balance sheet to solidify customer confidence in LivePerson's a stable long-term strategic partner. Second, we're continuing to innovate our core Conversational Cloud platform while scaling our recently launched Syntrix platform to offer best-in-class AI-led engagement and assurance. And third, we continue to expand our technology partnerships to broaden our platform's reach and unlock new commercial opportunities. We believe that our disciplined execution across these 3 areas of focus can drive LivePerson towards a return to growth in the future. Turning to our results. We outperformed our Q4 guidance on both the top and bottom lines. Revenue was $59.3 million, above the high end of our range, driven by higher variable revenue. Adjusted EBITDA was $10.8 million, also above the high end of our guidance range, driven by our improved cost structure and disciplined operational execution in the quarter. Now let me provide an update on our product strategy. Last week, we reached a significant milestone with the launch of Syntrix. Syntrix is our simulation and evaluation platform that allows brands to launch customer-facing AI agents with confidence and validate human agent readiness at scale. It provides the critical assurance brands need to unlock the value of AI across their customer journey. This emphasis on assurance addresses a clear gap we see in the market. Many brands are not limited by AI capability, but by trust. They struggle to move high potential AI initiatives to production because they lack the confidence in performance, governance and compliance. They also lack a structured way to evaluate AI agent outputs and continually verify adherence to their governance guardrails. As a result, innovation stalls and business impact remains unrealized. Syntrix is our direct response to this challenge. It provides the orchestration and assurance layer enterprises need to confidently deploy AI at scale. Originally introduced in November, Conversation Simulator is now the first capability within the Syntrix platform. It enables enterprises to safely and continuously test, evaluate and validate AI behavior by identifying drift and failures before they reach real customers. With the formal launch of Syntrix earlier last week, we are expanding beyond simulation into a broader assurance vision. Over the coming quarters, we plan to add additional capabilities across simulation, analytics, governance and auditability to support compliance. As the road map unfolds, we expect that Syntrix will become a comprehensive assurance layer that makes AI more predictable at the enterprise scale. Importantly, Syntrix was built to integrate seamlessly into existing enterprise ecosystems. Syntrix is designed to work in concert with our core Conversational Cloud platform, but it is also model and platform agnostic. Our Conversational Cloud remains the system of engagement where customers' interactions occur. Syntrix provides an assurance layer for a safer, more predictable and compliant interactions as AI usage scales. Together, they form a unified platform that allows enterprises to deploy Conversational AI with confidence. Syntrix does not replace Conversational Cloud, it supercharges it. Additionally, Syntrix is designed to deliver the same level of assurance whether customers are using Conversational Cloud or other CX or CCaaS platforms, including those we compete with. This allows enterprises to apply a consistent governance standard across increasingly complex technology and CX stacks. We plan to continue expanding our out-of-the-box integrations throughout the year while also enabling partners and customers to integrate Syntrix with their preferred platforms and AI technologies. Commercially, Syntrix is already gaining traction. We have successfully moved from early access to general availability with paying enterprise customers across banking, telecommunications and technology. This early response, combined with a significant addressable market, positions us to accelerate commercial execution. At this time, we continue to see deeper AI adoption across our core Conversational Cloud platform. In Q4, over 20% of all conversations leveraged our generative AI suite. We're also seeing strong traction with Copilot Translate, the newest addition to our Agent Assist portfolio. It enables brands to eliminate language barriers by embedding real-time AI native translation directly into the agent workflow. We also remain on track to complete our multiyear platform modernization in the first half of this year. This milestone is foundational to our long-term scalability. We are transitioning to a unified architecture designed to support significantly higher generative AI traffic with improved resiliency. Completing this work positions us to reallocate resources towards accelerating product innovation in 2026. Moving to our go-to-market performance. We are seeing continued confidence from our largest enterprise customers. This is reflected in several significant renewals this quarter, including 7 major financial services institutions, 2 major airline carriers, 3 leading telecom and internet service providers and a major health care provider. These renewals underscore the durability of our platform, the strength of our enterprise relationships and our ability to deliver measurable value across highly regulated and customer-centric industries. Our partnership with Google Cloud is also delivering significant early results. In the fourth quarter, we secured a multimillion dollar renewal with an upsell, the major European telecommunications provider through the Google Cloud Marketplace. Based on conversations with several customers, we now expect a material amount of revenue to flow through marketplace by the end of 2026, delivering measurable improvements in churn. This validates our strategy to simplify procurement, leverage existing cloud commitments and expand LivePerson's adoption through partner-led channels. Our momentum with Google continues to deepen across both products and go-to-market. We've standardized on Google Gemini as a default LLM across our platforms and launched LivePerson's RCS channel. Together, these efforts strengthen LivePerson's position within Google's ecosystem and expand the joint opportunities that we can pursue. We're also scaling our Google marketplace motion to enable enterprise customers to seamlessly procure our solutions using their existing cloud commitments. Our teams are now aligned with Google's field organizations to streamline procurement and accelerate sales cycles. While still a phased rollout, we are already seeing tangible traction with multiple marketplace transactions in process and a growing pipeline of joint opportunities. Today, this motion is performing as a high-impact retention lever. By enabling our customers to tap into their existing Google Cloud commitments, we're moving LivePerson directly into the heart of the CTO's strategic spend. This is a fundamentally different relationship that elevates our strategic conversations with current and future customers. As we continue to scale these transactions and strengthen our position within Google's own ecosystem, we are creating a direct incentive for their field organizations to move beyond renewals and begin transacting net new business with us. Complementing this is our strategic collaboration with IT solutions, which has been a significant win for our mid-market segment. By reallocating resources in 2025, we have created immediate value and efficiency in this channel, reflected in improved renewal rates and expansion. As we move into 2026, we intend to deepen this relationship further. We've also launched LivePerson Sync in partnership with Coral Active, a leader in enterprise contact center integrations. This solution enables seamless integrations with systems like Salesforce, Microsoft and ServiceNow, bringing CRM data and workflows directly into the conversation and creating a single unified workspace for agents. By eliminating the swivel chair effect, we've embedded LivePerson deeper into our customer service operations, improving productivity and overall agent experience. As brands streamline their technology stacks and demand tighter integrations between engagement and execution, LivePerson Sync expands our strategic footprint within the enterprise by differentiating our platform, deepening customer relationships and creating new long-term growth opportunities. We're already seeing strong interest with a healthy pipeline of opportunities. While there is still work to be done with retention and growth, we're beginning to see the benefits of more focused and disciplined approach. We are encouraged by the traction with our partnerships and an ecosystem as these alliances are already expanding our market reach and simplifying how customers do business with us. As we move further into 2026, we remain focused on rigorous execution to convert this early traction into long-term stabilization and growth. In conclusion, 2025 was a defining year for LivePerson. I am incredibly proud of the resilience and discipline our team demonstrated throughout this period. We successfully stabilized our foundation, improved our balance sheet and delivered a strong finish to the year. We launched the first phase of Syntrix with Conversation Simulator and opened a critical new growth channel with Google's Marketplace. We also made significant progress in our platform modernization, which is on track for completion in the first half of 2026. This unified architecture is designed to support significantly higher generative AI traffic with improved resiliency. Building on this, we are now focused on scaling Syntrix and accelerating high-velocity partnerships that expand our market reach. While there is still work to be done to further improve our capital structure, we are better positioned today to execute our strategy. For the full year of 2026, we're providing the following guidance. We expect revenue to be in the range of $195 million to $207 million, and we expect adjusted EBITDA to be between a loss of $4 million and positive $7 million. While this guidance implies a year-over-year decline in revenue, we expect to achieve positive net new ARR in the second half of the year. With disciplined focus on executing our strategy, we're positioning LivePerson as the foundational layer for governable AI at scale and building the path for long-term sustainable growth and shareholder value. With that, I'll turn the call over to John Collins. John?

Thanks, John. The fourth quarter marked a strategic and financial inflection point for LivePerson. We have rationalized the cost structure and improved the balance sheet, transitioning us from a period of rebuilding to one focused on innovation and commercial execution. Our fourth quarter results were driven by increased commercial traction within our enterprise customer base, including usage overages and high-value renewals and expansions. This traction reflects customer plans to move beyond AI experimentation to secure high-volume production applications. It also evidences growing customer confidence that our platform can enable that transition now and support evolving demands in the long run. While the fourth quarter's results and the guidance I'll discuss shortly are anchored by customer demand for our core platform, we believe the launch of Syntrix is an important innovation in the market today and represents a meaningful strategic growth opportunity. Syntrix is increasingly central to customer discussions on AI deployment across many use cases, creating the potential to capture broader AI spend across the enterprise. In terms of deals, we signed 40 in the quarter, including 4 new logos and 36 expansions, which translated to a slight sequential increase in total deal value. We also continue to see strong adoption within the banking, telecommunications and airline sectors. These regulated industries rely on our leading technology for centralized AI-agnostic orchestration layers that ensure AI deployments are secure and effective. Improving customer retention, including renewals with 7 financial services institutions, 2 major airlines and several leading telecom and health care providers underscores the strength of our platform amid a rapidly evolving market. These brands continue to commit to us because of our enterprise-ready platform and our improved financial foundation. Notably, over 40% of these renewals included expanding commitments. Complementing our direct sales motion, we are seeing clear validation of our partnership strategy through Google Cloud. A multimillion dollar renewal and expansion we closed this quarter via the Google Cloud Marketplace is early proof of the potential opportunities. This partnership simplifies the customer procurement process and allows customers to optimize the return on pre-existing Google commitments. While this partnership is still early, customer reception has been strong, and we now expect that a material fraction of total revenue will flow through this channel by the end of 2026. Beyond Google, our partnerships with IT Solutions and Core Active are contributing meaningfully to our commercial motion. These collaborations allow us to embed our technology more deeply into enterprise CRM workflows and deliver a high level of support down market, leading to improved renewal rates, especially within our SMB and MMB customer segments, all while incurring minimal additional overhead. This commercial strategy also helps us avoid the opportunity costs associated with the direct sales team taking time away from enterprise accounts. As for our fourth quarter financial results, total revenue was $59.3 million, above the high end of our guidance range. Note that the upside relative to guidance was driven primarily by higher variable revenue. Adjusted EBITDA was $10.8 million, also above the high end of our guidance range, driven by the benefits of the cost restructuring executed in the third quarter and ongoing disciplined operational execution. Revenue from hosted services was $51 million, down 15% year-over-year. Recurring revenue was $52.9 million or 89% of total revenue. Professional services revenue was $8.3 million, down 36% year-over-year. Average revenue per customer was $680,000, up 9% year-over-year, driven in part by expansions with our largest customers and in part by customer retention. RPO declined to $176 million, consistent with the same factors driving declines in revenue. Net revenue retention was 78% in the fourth quarter, down from 80% in the third quarter. As a reminder, net revenue retention is a function of in-period revenue, meaning this metric will generally continue to decline until revenue begins to grow. Finally, in terms of cash, we ended the fourth quarter with $95 million of cash on the balance sheet. Turning to revenue guidance. We expect positive net ARR in the second half of the year. While we believe this leading indicator supports the path to future growth, the corresponding positive revenue impact in 2026 will be offset by negative net ARR in recent periods. As a result, we expect revenue to decline through the year with the rate of decline flattening in the second half. For the full year 2026, we expect revenue to range from $195 million to $207 million, approximately 92% of which we expect to be recurring. Note that commercial traction with newly launched Syntrix primarily represents upside to the guide. For the first quarter, we expect revenue to range from $53 million to $55 million, a sequential decline of approximately $5 million at the midpoint from the fourth quarter. As for adjusted EBITDA for the full year 2026, we expect a range from a loss of $4 million to a gain of $7 million. It follows that we do not expect adjusted EBITDA less CapEx to be positive in 2026. As for the first quarter, we expect adjusted EBITDA to range from $2 million to $5 million. Our expectation for slightly negative free cash flow reflects our attempt to balance many competing factors in order to increase long-term value creation rather than merely optimize for the near term. Making balanced investments in our go-to-market motion and product innovation will help us achieve positive net ARR in the second half of this year and sustain it going forward. Before taking questions, I'll briefly summarize a few key points. The fourth quarter marked a significant turning point, transitioning us from a period of stabilization to one of targeted execution. Our results confirm that the LivePerson platform is essential to our enterprise customers and their planned AI deployments. We are now effectively leveraging high-efficiency channels such as Google Marketplace to drive both customer retention and future growth. Rigorous cost management has allowed us to operate efficiently while still maintaining investment in 3 strategic priorities: retaining and expanding our customer base, continuously developing new features and capabilities for our customers, including delivering on the Syntrix road map and strengthening our partner network. Looking ahead, we remain committed to the disciplined execution of these pillars. With our cost structure now appropriately aligned to our expected revenue base and the fundamental value of our platform affirmed by our largest customers, we are confident in our trajectory to achieve positive net ARR in the second half. With that, operator, we can move to Q&A.

[Operator Instructions] And the first question comes from the line of Jeff Van Rhee with Craig-Hallum Capital Group.

This is Daniel on for Jeff Van Rhee. Just on -- maybe starting off with the bottom line and the current OpEx level. Could you walk us through sort of what -- really nice decrease in the total OpEx for the quarter sequentially here in Q4. Is there anything onetime about the OpEx in Q4? And then maybe just walking us a little bit about how you expect that to -- it looks like scale back up to '26?

Daniel, I'll start there. So the results in the fourth quarter for the bottom line were primarily driven, as we said in the prepared remarks, by the large restructuring that we executed in the prior quarter. And there may be some onetime items, but it was primarily a structural change to our cost base. As we look forward and as we described in the prepared remarks, we are looking to make investments in innovation on the product side as well as our commercial presence. So those are, we view necessary investments to ensure we're on a path to positive net ARR in the second half.

Yes. And then on positive net new ARR in the second half, maybe you could walk me through -- I think you said you expected revenue to continue posting sequential declines as you're adding net new ARR. Not sure -- maybe I missed something there, not sure how that works out. Are you saying that ARR will grow sequentially in the back half, but nonrecurring elements are going to show sequential declines just that revenue would still dip? Or maybe you could just walk through that again? And then just expanding a little bit on your confidence, whether that's what you're seeing in quotas or what you're seeing in the pipeline in terms of visibility out there to the back half?

Yes. Let me reconcile the revenue comment with the positive net ARR. So in recent quarters, we've had a large negative net ARR the revenue impact we are feeling throughout 2026. That revenue impact will offset completely the positive revenue from the net ARR we expect to generate in the second half. So that's the reason for the revenue to sequentially decline. It's because historical customer losses are still playing through the P&L throughout 2026. As it relates to our visibility and pipeline, I'll say a few words and pass it over to John Sabino. I mean our guide reflects a healthy pipeline for the first quarter, and that includes some deals for the new product launch Syntrix that we described. But importantly, most of the guide is predicated on demand for the core platform, which continues to be robust as we've described in the prepared remarks.

I'll second John Collins' comments. LP Sync and just add a little bit of additional color, LP Sync and Syntrix are new into the market. Syntrix just becoming generally available last week. So we're going to -- it's going to take a little bit of time to build that up, but we are starting to see some of the efforts improving from the marketing and outreach that we've started to do with our commercial teams. So we believe that, that will continue to improve throughout the year.

Yes. And maybe last for me, just on Syntrix. If you could expand a little bit on the marketplace, the competitive landscape, what you were seeing there in terms of the need for Syntrix? Was that customers coming inbound saying, "Hey, I need this sort of thing." Where was sort of the ideation? When did the development of that begin? And then maybe last of all, just how do you expect that to evolve from here in terms of the road map it sounded. Maybe you could expand a little bit. I think you talked about additional functionality you wanted to add to that platform.

Yes. Let me start with demand. We initially saw a request for simulation capability to train both Live reps and train AI agents. Simulations was our initial response to that. But what we started to see was that broadly just about every AI initiative, whether it's LivePerson's AI or someone else's, has had a number of challenges throughout an enterprise organization and its deployment and ability to create value for the customer. And this is due to compliance challenges and ability to enforce guardrails and just understand how a model is going to perform in the real world before it gets there. So we stepped back and took a holistic view of what the real challenge was. And essentially, what you're seeing is that it's not whether or not you can deploy AI or have a Conversational Platform that's digital for your customers. It's really your ability to look at the quality of that and assure that it's going to work the way that you expect before it ever gets in front of a customer. So Syntrix as a platform is a response to work with the LivePerson platform and any one of our competitors, whether they be AI providers or CCaaS providers to actually simulate, produce analytics, intelligent insights that can either self-heal or improve performance of a model. These are future things that we're working on to ultimately provide an adherence to a compliance framework. And ultimately, this would lead to overall governance for any AI or orchestrated digital customer journey across a varied tech stack. So that's the evolution of Syntrix. It's really moved from I just want to be able to simulate, train my people and/or a bot into a much broader problem set that we believe that we can solve across a LivePerson ecosystem or a broader digital CX ecosystem where analytics, intelligent identification of issues and/or compliance failures can be reported on and ultimately resolved either before a bot or a customer agent is deployed or catching it if there is something after the fact.

The next question comes from the line of Ryan MacDonald with Needham & Company.

John, maybe just to follow up on Syntrix off of that last response. Can you just talk about the pricing model for Syntrix and whether you're going to be sort of looking at token-based pricing? If so, what kind of visibility does that give you into sort of the revenue stream as sort of Syntrix adoption grows? And then from, I guess, any sort of early signs from some of the first few deals for Syntrix in terms of what sort of uplift this potentially creates within the renewals on the core customer base?

So let's start with the pricing model. The pricing model is conversation-based. So you can think of it as a consumption model. It's not necessarily seat-based as you may have seen in some places in the past. And in order to build the model for the customer, we really do look at the number of bots and/or agents they're trying to train and how many campaigns or things that they may be looking to either bring through an AI interaction and/or human interaction. And so we propose a number of different models that represent a statistically significant simulation capability. So it's really based on the consumption and what the customer is trying to achieve. Now with the early customers that we have, we have seen that this is an upsell opportunity as well as a retention capability. So early indications are that customers are using it in line with our model so that the conversation-based pricing accurately reflects what we believe we can do with the customer and is driving improvements that we've published publicly in terms of velocity of training new customers and savings -- excuse me, velocity and training of new agents and savings for customers. So we're confident that this is going to drive bottom line value for customers. Right now, we have dozens of opportunities that we're looking at. And now that we're GA with the product, we're hoping to see some of that as upside in the pipeline going forward. And it represents millions, not hundreds of thousands.

Excellent. I appreciate all the color there. And then on Google Cloud Marketplace, obviously, continuing to see some nice progress there and sort of growth in pipeline. Can you just give us a sense in terms of the, I guess, mix of pipeline sort of heading into '26 here that GCM represents sort of relative to maybe the direct sales channel or other channels? And then what kind of incremental leverage sort of continued sort of growth and success with Google Cloud Marketplace can sort of provide on your direct sales efforts?

I'll start and then, John, if you want to add, please feel free. Right now, Google Marketplace really does represent a retention lever for us. It's simplifying procurement, and it's now elevating where the LivePerson spend is typically being allocated within a technology budget inside of some of the large enterprises that we serve. So we see this representing a significant portion of how we do renewals going forward in the future because of the simplification of purchasing and/or an already allocated portion of funding inside of our larger enterprise customers. As far as growth goes, we're starting to see those joint opportunities with Google. We have aligned our commercial teams and theirs, and there's incentives in place for them to work with us now and drive some of the spend for LivePerson through Google Marketplace. So again, we see this as potential upside, right, to be very clear, right now, it's a renewal and expansion play for us, but we believe it to be only natural to create additional new opportunities and potentially new customers through ease of transaction and aligned incentives with Google's field as well as our own. I think it will be...

The only...

Yes, go ahead, John. I'm sorry. I didn't stop there.

The only addition I would make to that is just to emphasize that it exposes us to a new set of stakeholders. And so where we have previously been predominantly working with the head of care, we now have more access to CIOs, which could change the conversation for us by way of both renewals and potentially growth in the future.

Very helpful. I appreciate it. Maybe one more for you, John Collins. Can you just help us understand from sort of the quarterly flow on adjusted EBITDA? I mean, I know historically, you've sort of ramped as you've gone throughout the year. But can you just help us understand, obviously, you're making some incremental investments this year to try to drive that return to net new ARR growth in the second half. But how we should think about -- it seems like Q1 is sort of the high watermark based on sort of the Q1 and fiscal '26 EBITDA guidance, but how we should expect that to sort of flow throughout the year?

That is approximately correct. I expect Q1 to be the high point for the year as we emphasize that there is a need for investment on the product side and the commercial side, which we've already begun executing. So that will be additional costs relative to the Q4 run rate that's added this quarter, and we'll see that manifest per the guidance we provided throughout the year.

Thank you. This concludes the question-and-answer session, and this will conclude today's conference call as well. You may disconnect your lines at this time, and we thank you for your participation.

Thank you.