LiveVox Announces Third Quarter 2022 Financial Results

Third quarter total revenue year-over-year growth of 15.6% to $35.3 million

Third quarter contract revenue year-over-year growth of 21.4% to $28.0 million

LiveVox Holdings, Inc. ("LiveVox" or the "Company") (NASDAQ:LVOX), a leading global enterprise cloud communications company, today announced financial results for the third quarter ended September 30, 2022.

"We were encouraged by the early success of our pivot to a balanced growth strategy, especially beating the high end of our guidance for gross margin and Adjusted EBITDA," said Louis Summe, co-founder and former CEO. "I believe the company is well positioned for its next phase of growth. I look forward to supporting the team in my new role as Board Vice Chairman."

Third Quarter 2022 Financial Highlights

• Revenue: Total revenue was $35.3 million for the third quarter of 2022, up 15.6% compared to $30.5 million for the third quarter of 2021.
• Contract Revenue: Contract revenue was $28.0 million for the third quarter of 2022, up 21.4% compared to $23.1 million for the third quarter of 2021.
• Gross Profit and Gross Margin: Gross profit was $22.4 million for the third quarter of 2022, up 31.3% compared to $17.0 million for the third quarter of 2021; Gross margin was 63.4% for the third quarter of 2022, compared to 55.8% for the third quarter of 2021.
• Non-GAAP Gross Profit* and Non-GAAP Gross Margin*: Non-GAAP gross profit was $23.4 million for the third quarter of 2022, up 28.9% compared to $18.1 million for the third quarter of 2021; Non-GAAP gross margin was 66.3% for the third quarter of 2022, compared to 59.5% for the third quarter of 2021.
• Net loss: Net loss was $7.8 million for the third quarter of 2022, compared to net loss of $11.3 million for the third quarter of 2021.
• Adjusted EBITDA*: Adjusted EBITDA loss was $1.5 million for the third quarter of 2022, compared to Adjusted EBITDA loss of $6.3 million for the third quarter of 2021.

* Additional information regarding the non-GAAP financial measures discussed in this release, including an explanation of these measures and how each is calculated, is included below under the heading "Non-GAAP Financial Measures." A reconciliation of GAAP to non-GAAP financial measures has also been provided in the financial tables included below.

Business Outlook

In determining the financial guidance to provide to investors, the Company considered its recent business trends and financial results, current growth plans, strategic initiatives, global economic outlook and the continued uncertainty of COVID-19 and its potential impact on the Company's results. LiveVox emphasizes that the guidance provided is subject to various important cautionary factors referenced in the section entitled "Forward-Looking Statements" below. As such, LiveVox is providing guidance for its fourth quarter of 2022 and updating its full year 2022 guidance and reaffirming its contract revenue and Adjusted EBITDA guidance:

• Fourth Quarter of 2022 Guidance:
  • Total revenue is expected to be in the range of $33.7 million to $35.2 million, representing growth of 6% to 10% year-over-year.
  • Contract revenue is expected to be in the range of $28.0 million to $29.0 million, representing growth of 15% to 19% year-over-year.
  • Excess usage revenue is expected to be in the range of $5.7 million to $6.2 million, representing decline of 24% to 18% year-over-year.
  • Adjusted EBITDA is expected to be in the range of $(1.6) million to $0.4 million.
• Full Year 2022 Guidance:
  • Total revenue is expected to be in the range of $134.0 million to $135.5 million, representing growth of 12% to 14% year-over-year.
  • Contract revenue is expected to be in the range of $108.0 million to $109.0 million, representing growth of 19% to 20% year-over-year.
  • Excess usage revenue is expected to be in the range of $26.0 million to $26.5 million, representing decline of 10% to 8% year-over-year.
  • Adjusted EBITDA loss is now expected to be in the range of $17.0 million to $15.0 million.

A reconciliation of non-GAAP guidance measures to corresponding GAAP measures is not available on a forward-looking basis without unreasonable effort due to the uncertainty regarding, and the potential variability of, many of the future costs and expenses for which the Company adjusts, such as depreciation and amortization, long-term equity incentive bonus, stock-based compensation expense, interest income (expense), change in the fair value of warrant liability, other income (expense), provision for income taxes and severance costs, the effect of which may be significant.

Quarterly Conference Call

LiveVox will host a conference call today at 4:30 p.m. Eastern Time to review the Company's financial results for the third quarter ended September 30, 2022. To access this call, dial 877-300-8521 for the U.S. or Canada, or 412-317-6026 for callers outside the U.S. or Canada. A live webcast of the conference call will be accessible from the Investor Relations section of LiveVox's website, and a recording will be archived. An audio replay of this conference call will also be available through 11:59 p.m. Eastern Time, November 22, 2022, by dialing 844-512-2921 for the U.S. or Canada (or 412-317-6671 for callers outside the U.S. or Canada) and entering passcode 10171791.

About LiveVox, Inc.

LiveVox (NASDAQ:LVOX) is a next generation contact center platform that powers more than 14 billion omnichannel interactions a year. By seamlessly unifying blended omnichannel communications, CRM, AI, and WEM capabilities, the Company's technology delivers exceptional agent and customer experiences, while helping to mitigate compliance risk. With 20 years of cloud experience and expertise, LiveVox's CCaaS 2.0 platform is at the forefront of cloud contact center innovation. The Company has more than 600 global employees and is headquartered in San Francisco, with offices in Atlanta; Columbus; Denver; St. Louis; Medellin, Colombia; and Bangalore, India. To stay up to date with everything LiveVox, follow us at @LiveVox or visit http://www.livevox.com.

Forward-Looking Statements

Certain statements made in this release are "forward looking statements" within the meaning of the "safe harbor" provisions of the United States Private Securities Litigation Reform Act of 1995. When used in this press release, the words "estimates," "projected," "expects," "anticipates," "forecasts," "plans," "intends," "believes," "seeks," "may," "will," "would," "should," "future," "propose," "target," "goal," "objective," "outlook" and variations of these words or similar expressions (or the negative versions of such words or expressions) are intended to identify forward-looking statements. These forward-looking statements include, but are not limited to, the quotations of management, statements relating to expected bookings, expected revenue and annual recurring revenue from contracts, growth expectations, and future financial results, including guidance for the 2022 fourth quarter and full fiscal year. These statements are not guarantees of future performance, conditions or results, and involve a number of known and unknown risks, uncertainties, assumptions and other important factors, many of which are outside LiveVox's control, that could cause actual results or outcomes to differ materially from those discussed in the forward-looking statements. Any such forward-looking statements are made pursuant to the safe harbor provisions available under applicable securities laws and speak only as of the date of this presentation. LiveVox assumes no obligation to update or revise any such forward-looking statements except as required by law.

Important factors, among others, that may affect actual results or outcomes include risks or liabilities assumed as a result of our ability to meet financial and operating guidance, ability to achieve financial targets, and successfully manage capital expenditures; risks related to the high level of competition in the cloud contact center industry and the intense competition and competitive pressures from other companies in the industry in which the Company operates; risks related to the Company's reliance on information systems and the ability to properly maintain the confidentiality and integrity of data; risks related to the occurrence of cyber incidents or a deficiency in cybersecurity protocols; risks related to the ability to obtain third-party software licenses for use in or with the Company's products; general economic and business conditions, including but not limited to challenges associated with a tight labor market, inflationary pressures, volatility in foreign exchange rates, supply chain constraints, recessionary fears, and impacts from the invasion of Ukraine by Russia; the impact of COVID-19 on LiveVox's business; risks related to our intellectual property rights, risks related to our ability to secure additional financing on favorable terms, or at all, to meet our capital needs; increased taxes and surcharges (including Universal Service Fund, whether labeled a "tax," "surcharge," or other designation) on our products which may increase our customers' cost of using our products and/or increase our costs and reduce our profit margins to the extent the costs are not passed through to our customers, and our potential liability for past sales and other taxes, surcharges and fees; changes in government regulation applicable to the collections industry or any failure of us or our customers to comply with existing regulations; changes in base interest rates and significant market volatility on the Company's business, the Company's industry and the global economy; the Company's ability to successfully manage its recent leadership transition; as well as those factors described under the captions "Risk Factors" and "Management's Discussion and Analysis of Financial Condition and Results of Operation" and elsewhere in the Company's most recent filings with the Securities and Exchange Commission ("SEC"), including the Company's most recently filed reports on Form 10-K and Form 10-Q and subsequent filing.

The information contained in this press release is summary information that is intended to be considered in the context of LiveVox's SEC filings and other public announcements that LiveVox may make, by press release or otherwise, from time to time. LiveVox also uses its website to distribute company information, including performance information, and such information may be deemed material. Accordingly, investors should monitor LiveVox's website (http://www.livevox.com). LiveVox undertakes no duty or obligation to publicly update or revise the forward-looking statements or other information contained in this presentation. These materials contain information about LiveVox and its affiliates and certain of their respective personnel and affiliates, information about their respective historical performance and general information about the market. You should not view information related to the past performance of LiveVox or information about the market, as indicative of future results, the achievement of which cannot be assured.

Reconciliation of cash, cash equivalents and restricted cash to the consolidated balance sheets (dollars in thousands):

Non-GAAP Financial Measures

Management uses non-GAAP financial measures to evaluate operating performance. We believe non-GAAP financial measures provide useful information to investors and others to understand and evaluate our operating results in the same manner as our management and board of directors and allows for better comparison of financial results among our competitors.

There are material limitations associated with the use of non-GAAP financial measures since they exclude significant expenses and income that are required by GAAP to be recorded in our financial statements. The definitions of our non-GAAP measures may differ from the definitions used by other companies and therefore comparability may be limited. In addition, other companies may utilize metrics that are not similar to ours. We compensate for these limitations by analyzing current and future results on a GAAP basis as well as a non-GAAP basis and by providing specific information regarding the GAAP items excluded from these non-GAAP financial measures.

Adjusted EBITDA

We monitor Adjusted EBITDA, a non-generally accepted accounting principle ("Non-GAAP") financial measure, to analyze our financial results and believe that it is useful to investors, as a supplement to U.S. GAAP measures, in evaluating our ongoing operational performance and enhancing an overall understanding of our past financial performance. We believe that Adjusted EBITDA helps illustrate underlying trends in our business that could otherwise be masked by the effect of the income or expenses that we exclude from Adjusted EBITDA. Furthermore, we use this measure to establish budgets and operational goals for managing our business and evaluating our performance. We also believe that Adjusted EBITDA provides an additional tool for investors to use in comparing our recurring core business operating results over multiple periods with other companies in our industry. Adjusted EBITDA should not be considered in isolation from, or as a substitute for, financial information prepared in accordance with U.S. GAAP, and our calculation of Adjusted EBITDA may differ from that of other companies in our industry. We compensate for the inherent limitations associated with using Adjusted EBITDA through disclosure of these limitations, presentation of our consolidated financial statements in accordance with U.S. GAAP and reconciliation of Adjusted EBITDA to the most directly comparable U.S. GAAP measure, net loss. We calculate Adjusted EBITDA as net loss before (i) depreciation and amortization, (ii) long-term equity incentive bonus, (iii) stock-based compensation expense, (iv) interest expense, net, (v) change in the fair value of warrant liability, (vi) other expense (income), net, (vii) provision for income taxes, and (viii) other items that do not directly affect what we consider to be our core operating performance.

Non-GAAP Gross Profit and Non-GAAP Gross Margin Percentage

U.S. GAAP defines gross profit as revenue less cost of revenue. Cost of revenue includes all expenses associated with our various product offerings. We define Non-GAAP gross profit as gross profit after adding back the following items: (i) depreciation and amortization; (ii) long-term equity incentive bonus and stock-based compensation expenses; and (iii) severance costs. We add back depreciation and amortization, long-term equity incentive bonus and stock-based compensation expenses and severance costs because they are one-time or non-cash items. We eliminate the impact of these one-time or non-cash items because we do not consider them indicative of our core operating performance. Their exclusion facilitates comparisons of our operating performance on a period-to-period basis. Therefore, we believe showing Non-GAAP gross margin to remove the impact of these one-time or non-cash expenses is helpful to investors in assessing our gross profit and gross margin performance in a way that is similar to how management assesses our performance. We calculate Non-GAAP gross margin percentage by dividing Non-GAAP gross profit by revenue, expressed as a percentage of revenue.

Management uses Non-GAAP gross profit and Non-GAAP gross margin percentage to evaluate operating performance and to determine resource allocation among our various product offerings. We believe Non-GAAP gross profit and Non-GAAP gross margin percentage provide useful information to investors and others to understand and evaluate our operating results in the same manner as our management and board of directors and allows for better comparison of financial results among our competitors. Non-GAAP gross profit and Non-GAAP gross margin percentage may not be comparable to similarly titled measures of other companies because other companies may not calculate Non-GAAP gross profit and Non-GAAP gross margin percentage or similarly titled measures in the same manner as we do.

Please see tables below for a reconciliation of non-GAAP measures to the most directly comparable GAAP measures for the periods presented.

The following table presents the stock-based compensation expenses included in Company's results of operations for the three and nine months ended September 30, 2022 and 2021 (dollars in thousands):

The following table presents the long-term equity incentive bonus included in Company's results of operations for the three and nine months ended September 30, 2022 and 2021 (dollars in thousands):

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