Loading...
01/10 16:26
Loading...
Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
The earnings call reveals challenges: declining revenue and customer retention, financial instability, and competitive pressures. Despite some positive aspects like increased average revenue per customer and successful cost management, these are overshadowed by macroeconomic uncertainties and debt concerns. The Q&A section highlights delayed decision-making and competitive headwinds, further impacting sentiment. Without market cap data, a conservative 'Negative' prediction is made, considering the company's struggles with financial stability and customer retention.
Revenue $59.6 million, down 25% year-over-year. Reasons for the decline include macroeconomic uncertainty and slower bookings due to customer concerns about financial stability.
Adjusted EBITDA $2.9 million, exceeding the high end of guidance. This was driven by ongoing cost discipline and operational efficiencies.
Recurring Revenue $55 million, representing 92% of total revenue. This is part of the hosted services revenue, which declined year-over-year.
Professional Services Revenue $9.3 million, down 26% year-over-year. The decline is consistent with the overall revenue trends.
Average Revenue Per Customer $655,000, up 4% year-over-year. This increase was driven by expansions with the largest customers and customer retention.
Net Revenue Retention 78%, down from 80% in the first quarter. This decline is attributed to the overall revenue decline.
RPO (Remaining Performance Obligations) $197 million, reflecting the same factors driving revenue declines.
Cash on Balance Sheet $162 million, inclusive of proceeds from the Lynrock Lake transaction last year.
Generative AI Suite: 45% sequential increase in conversations powered by the suite. Over 17% of all conversations on the platform now leverage at least one Generative AI feature, up 5 percentage points from the previous quarter. New customer use cases are emerging, validating the product strategy.
AI-powered routing and summarization: Premier diagnostic provider saw a 7x increase in messaging volumes and achieved 97% routing accuracy. A major media technology company contained 20% of conversations without human intervention, achieving an 86% first contact resolution rate. A technology services organization reduced errors by 38% and resolved 62% more unique requests on the first attempt.
Strategic partnerships with Google Cloud and Databricks: Deepened relationship with Google Cloud, integrating conversational platform with Google’s AI innovations. Expanded relationship with Databricks to unify conversational data into a high-performance system, enabling smarter analytics and faster AI use case development.
Revenue and EBITDA: Revenue of $59.6 million, above midpoint of guidance. Adjusted EBITDA of $2.9 million, exceeding high-end of guidance.
Cost management: Significant adjustments to cost structure and cash preservation efforts, leading to an increase in full-year adjusted EBITDA guidance midpoint to $2 million.
Refinancing agreement: Refinanced $341 million of notes maturing in 2026, reducing total indebtedness by $226 million and extending maturities to 2029. This strengthens the capital structure and addresses customer concerns about financial stability.
Market challenges: Slower bookings and renewal hesitation due to macroeconomic uncertainty and concerns about financial stability. Full-year revenue guidance revised down by 5%.
Macroeconomic Uncertainty: Broader macroeconomic uncertainty is extending enterprise buying cycles, especially for high-value AI solutions. This has led to slower bookings and renewal hesitation from large customers.
Financial Stability Concerns: Uncertainty around the company's capital structure has been a headwind in commercial processes, causing hesitation among enterprise customers to commit to long-term contracts.
Debt Maturity: The $361 million debt maturity in 2026 created significant concerns among customers and stakeholders, impacting commercial progress and renewal rates.
Revenue Decline: Total revenue and recurring revenue have declined year-over-year, with hosted services revenue down 25% and professional services revenue down 26%.
Customer Retention Challenges: Net revenue retention dropped to 78%, and renewal friction has been observed, particularly with larger customers.
Competitive Pressures in AI: The influx of new AI offerings and the establishment of AI committees have slowed decision-making processes, introducing new decision-makers and compliance processes.
Operational Efficiency Risks: While cost discipline has improved adjusted EBITDA, the company faces challenges in balancing cost reductions with the need to invest in innovation and infrastructure modernization.
Revenue Guidance: The company has revised its full-year revenue guidance to a range of $230 million to $240 million, representing a decrease of approximately 5% at the midpoint. For Q3, revenue is expected to range from $56 million to $59 million, a sequential decline of approximately $2 million at the midpoint relative to Q2.
Recurring Revenue: Recurring revenue is expected to be approximately 93% of total revenue for both Q3 and the full year.
Adjusted EBITDA Guidance: The company has raised its full-year adjusted EBITDA guidance to a range of a loss of $3 million to a profit of $7 million, a significant improvement from the prior range of a loss of $14 million to 0. For Q3, adjusted EBITDA is expected to range from a loss of $4 million to a loss of $2 million.
Market Conditions and Buying Cycles: Macroeconomic uncertainty continues to extend enterprise buying cycles, particularly for high-value AI solutions. The influx of new AI offerings and the establishment of AI committees have introduced new decision-makers, further slowing decision-making processes.
Strategic Partnerships: The company is expanding its strategic partnerships with Google Cloud and Databricks to enhance its platform's AI capabilities and market presence. These partnerships aim to deliver smarter, faster outcomes for clients, accelerate AI use case development, and enable enterprises to build their own AI solutions on the platform.
Generative AI Adoption: The company experienced a 45% sequential increase in conversations powered by its Generative AI Suite in Q2. Over 17% of all conversations on the platform now leverage at least one form of Generative AI feature, up 5 percentage points from the previous quarter.
The selected topic was not discussed during the call.
The earnings call presents mixed signals: revenue exceeded guidance, and adjusted EBITDA improved, but revenue guidance has been lowered, indicating potential challenges. Strategic partnerships and customer renewals are positive, but economic uncertainties and longer deal cycles pose risks. The Q&A suggests management is addressing competitive differentiation and financial stability, but concerns about restructuring and slower bookings remain. Overall, the sentiment is balanced, leading to a neutral outlook for stock price movement.
The earnings call reveals challenges: declining revenue and customer retention, financial instability, and competitive pressures. Despite some positive aspects like increased average revenue per customer and successful cost management, these are overshadowed by macroeconomic uncertainties and debt concerns. The Q&A section highlights delayed decision-making and competitive headwinds, further impacting sentiment. Without market cap data, a conservative 'Negative' prediction is made, considering the company's struggles with financial stability and customer retention.
The earnings call presents a mixed picture: strong AI innovations and reaffirmed revenue guidance are positives, but the company faces competitive pressures, macroeconomic challenges, and declining revenue trends. The absence of a share buyback program and a drop in net revenue retention further temper optimism. Although Q1 revenue exceeded guidance, the sequential decline in revenue and EBITDA loss guidance indicate caution. The Q&A suggests some improvement in deal closures and renewal rates, but uncertainties remain. Thus, the overall sentiment is neutral, with no significant short-term catalysts for a strong positive or negative reaction.
The earnings call reveals several concerning factors: a significant EPS miss, anticipated revenue decline due to customer cancellations, and elevated attrition rates. Despite some positive developments like improved EBITDA and strategic partnerships, the lack of a share repurchase program and unclear responses about debt strategy add to investor uncertainty. The company's guidance indicates financial instability, and competitive pressures further compound the risks. Consequently, the stock price is likely to experience a negative reaction in the short term.
All transcripts are sourced directly from the official live webcast or the company’s official investor relations website. We use the exact words spoken during the call with no paraphrasing of the core discussion.
Full verbatim transcripts are typically published within 4–12 hours after the call ends. Same-day availability is guaranteed for all S&P 500 and most mid-cap companies.
No material content is ever changed or summarized in the “Full Transcript” section. We only correct obvious spoken typos (e.g., “um”, “ah”, repeated 10 times”, or clear misspoken ticker symbols) and add speaker names/titles for readability. Every substantive sentence remains 100% as spoken.
When audio quality is poor or multiple speakers talk over each other, we mark the section instead of guessing. This ensures complete accuracy rather than introducing potential errors.
They are generated by a specialized financial-language model trained exclusively on 15+ years of earnings transcripts. The model extracts financial figures, guidance, and tone with 97%+ accuracy and is regularly validated against human analysts. The full raw transcript always remains available for verification.
