Welcome to the third quarter 2011 LivePerson conference call. With us today, we have Robert LoCascio, CEO of LivePerson, and Dan Murphy, Chief Financial Officer of LivePerson. After the speakers remarks, there will be a question and answer session. (Operator Instructions). Now, I like to turn call over to Mr. Murphy.

Thanks Kristen. Before we begin, I would like to remind listeners that during this conference call, comments that we make regarding LivePerson that are not historical facts are forward-looking statements and are subject to risks and uncertainties that could cause such statements to differ materially from actual or future events or results. These statements are made pursuant to the Safe Harbor Provisions of the Private Securities Litigation Reform Act of 1995. The internal projections and beliefs upon which we base our expectations today may change over time and we undertake no obligation to inform you if they do. The results that we report today should not be considered as an indication of future performance. Changes in economic business, competitive, technological, regulatory and other factors could cause LivePerson's actual results to differ materially from those expressed or implied by the projections or forward-looking statements made today. For more detailed information about these factors and other risks that may impact our business, please review reports and documents filed from time to time by LivePerson with the Securities and Exchange Commission. Also, please note that on the call today, we will discuss some non-GAAP financial measures in talking about the company’s financial performance. We report our GAAP results as well as provide a reconciliation of these non-GAAP measures to GAAP financial measures in our earnings release. You can obtain a copy of our earnings release by visiting the investor relation section of our website. Now, I’d like to turn the call over to LivePerson’s Chief Executive Officer, Robert LoCascio.

Thanks, Dan. Good afternoon, everyone, glad you could join us today. I’m pleased to report third quarter was another solid one with revenues reach record levels once again, increasing 22% from the prior year quarter to 33.4 million, and 8% sequential quarter-over-quarter basis. More importantly, we’re on track with our goal of delivering our platform for intelligent engagement. We unveiled our new platform and products two weeks ago at our Global Customer Summit called Aspire, which took place in New York City. The summit represents a very important for LivePerson from both a cultural and product strategy standpoint. For those of you who did not attend or watch the live online broadcast, I want to share some highlights of Aspire with you. Over 400 attended, a mix of customers, partners, and employees gathered from across the country and the world, eager to share and experience the latest innovations in intelligent engagement. Some highlights from the conference were Frank Eliason, SVP of social media at our longstanding Citibank, shared how LivePerson’s chat based social media integration enabled Citi to securely provide high quality, high touch customer service through this increasingly important channel. Bill Canada shared the long-term successes they realized as LivePerson customer over the past seven years. Another customer, a major global electronics provider shared their remarkable results just a few months after deploying LP Marketer. We’ve been very focused on leveraging all the great assets around our LP chat product, to ultimately provide a unified way for companies to deliver all their customer engagements, whether it’s through chat, click-to-call, or LP marketer. Our new platform is engineered to help customers drive conversions and create meaningful connections through a variety of different online channels. I’m incredibly excited about what the future holds, as our new products take hold over the…

Thanks, Robert. We are pleased with the strong performance we delivered in the year this far, and we were in line in Q3 with our stated revenue, adjusted EBITDA per-share, EPS and adjusted EPS guidance provided last quarter. I will provide further details on these metrics in a minute. As Rob discussed, we had another strong quarter in all of our key financial metrics, and in late October we hosted Aspire, which was our first large scale customer event, where we brought together thought leaders from our customer base representing some of the world’s leading brands to share successes and best practices in customer engagement. We also officially launched [inaudible], our new product innovation, and showcased leading-edge applications from our partner ecosystem. Our new products continue to gain awareness with our existing customers. We also continue to see strong sequential and year-over-year growth in our core business. At the end of the third quarter, LP marketer had roughly a dozen customers in data, in addition, we tested additional use cases beyond couponing, such as free shipping, registrations, up sales, cross-sales, and inventory in customer service notifications. LP Insights continue to gain traction and as of the end of the third quarter, we had five signed proof of concepts. In addition, Analytics Driven Engagement continues to gain momentum in our small business segment. While we are excited to see our new offerings into the marketplace, we are at the very early stages of their introductions to the market. I’ve said in the past, we expect minimal revenue contribution from these products during 2011. Revenue in the quarter was $34.3 million, an increase of 22% as compared to the prior year and 8% sequentially quarter-over-quarter. Year-to-date our revenue grew by 21% over the same period last year. Revenue from business operations for…

(Operator Instructions). The first question is from the line of Nathan Schneiderman with Roth Capital. Nathan Schneiderman – Roth Capital: Hey, Rob and Dan. Thanks very much for taking my questions. In the press release, you highlight that you’re seeing more and more standardization deals. And I was curious to what – maybe if you could share with us how many standardization deals you did achieve in the quarter. And I was wondering if you could mention some of the customers that have standardized on your platform. And how new is this dynamic just in general?

More and more of our customers are starting to get on the platform. But what standardization I’m just digging into exactly what you’re talking about. Relating to chat or to platform? Nathan Schneiderman – Roth Capital: It was just something in your press release. More customers were choosing to standardize on your technology. What I was interpret your meaning like enterprise standardization deals or just customers that chose your solution?

No, it was the general statement of just that when people are looking at chat across the organization, in the past, they may have looked at there was a couple different vendors. Maybe they have an email vendor doing one, and they put the chat in on one division. But what they’re doing now is just standardizing. We’ve had a couple of places where they took out competitors in certain divisions and said, “Okay, we want you across the whole enterprise.” So it’s really on the core products and going across. I think there was two or three in the quarter that do that. And that’s kind of what’s naturally happening now. They want to stick with one vendor with a leading provider. And they move the other vendors out. Nathan Schneiderman – Roth Capital: Got it. In terms of the pipeline and how that’s looking, what percent has that grown on a sequential and a year-over-year basis?

The overall pipeline for the normal deals? $5.2 million was the bookings. Nathan Schneiderman – Roth Capital: I’m talking more about pipeline rather than bookings.

I mean the pipelines remain strong just for all products across the board. And as we ramp up our sales guys and start to sell multi-product solutions, our expectations of the pipeline will continue to increase. But from a bookings perspective on a quarterly basis, we’re comfortable with the bookings being in that $5 million range. I mean we’re on track for the year, more on track with our pipeline and where it stands. Nathan Schneiderman – Roth Capital: Great, and my final question area for you, that was a pretty impressive number on the sequential growth in the enterprise business of 13%. I don’t think I recall seeing that kind of growth out of you in a long, long time. And that’s obviously the most important sub-segment you sell into. So if you can talk about what specifically you feel drove that unusually strong growth. And are you, do you feel like you’re at an inflection? Do you think this kind of unusually strong growth will continue, or is this more of an anomaly? Thanks very much.

So I’ll start and Rob can jump in. Just on the growth, I mean we talked a little bit about last call with mid markets starting to ramp up and continue to grow. So we’ve seen opportunity in midmarket. And at the enterprise level as Rob eluded to before, we’re seen some of our larger customers standardize on one platform. And so we have an opportunity to displace a couple of competitors to continue to grow our core business within a few best customers.

And I think as we’ve seen, some competitors who have had chat as just a part of a bigger solution, they’re starting to get some consolidation happening in the industry. I think that creates a lot of opportunity for us because for us, it’s our focus. And real time engagement is very important. Even a lot of you guys were at the Aspire conference, you could see a lot of our customers just thinking how can they engage their customers in different ways whether it’s mobile, social, or on the web on their site. So I think we’re in a really good place to continue expanding the pipeline and expanding it with new products.

And just one other point, the third quarter typically is a quarter where our customers are ramping up and getting ready for the Q4 selling season. So it was a good opportunity for us as well.

Your next question is from the line of Richard Baldry with Wunderlich. Richard Baldry – Wunderlich Securities: Can you talk a little bit about how you follow up the Aspire to move those products and to other GA’s or into broader deployments? Maybe qualitatively or quantitatively where you’d expect to see I think like the dozens of customers and could that up 50% in the fourth quarter? Could that double or triple? It sounds like attendance is pretty strong in that event. Thanks.

I think we’re very happy with out of that conference came up a lot of activity for all three new products. And so the follow-up is now each rep takes that and goes after the customers and now we’re doing demos with them. And as we mentioned before, Aspire was really our coming out for the platform in new products. We have a whole new website. If you go to our website, it’s totally different and it has all the new products in it. So all the marketing activities will start to kick in, so we going into the beginning of next year, and that was our goal, we’re on track right now to really start bringing those new products and start building a pipeline in Q1. So we feel we got a very good reception at the Aspire. The other thing is we’re lucky to have a couple of those beta customers gave presentations of their successes. So it wasn’t like we were just presenting when we had customers actually present their results, which were really pretty tangible and exciting. Richard Baldry – Wunderlich Securities: And could you talk about each of the three new product lines in terms of ASP’s or how you think those will price, or fold into the revenue line from volume or thing etcetera to give us an idea of how that will loop it dial as the number of live contracts start to grow? Thanks.

Yeah, as I said a little bit earlier, I mean we have minimal revenue in 2011 for our new products. And we’re continuing to build a pipeline and we’ll expect to see revenue in 2012. But right now, we’re not giving projections on 2012. I’m sorry, was there another part to that question too? Richard Baldry – Wunderlich Securities: That’s it. Thanks.

Okay, thank you.

The next question is from the line of Richard Fetyko with Janney Capital. Richard Fetyko – Janney Capital: Good evening, gents. A couple of questions on the PSP. It looks like it was quite strong in the third quarter. Just curious, the source of that strength, if that was the same customer you had, the large customer, or perhaps new customers contributed to that. And then secondly, with respect to fourth quarter guidance, what kind of PFP assumptions are you banking in?

So from a PFP perspective, we did have a strong quarter. The nature of PFP is customers do cycle into PFP and they also cycle out at points in time. So we have a strong quarter from the PFP perspective. There was no one specific customer that carried the quarter as far as growth is concerned. They actually all did fairly well. As far as looking ahead to Q4, we don’t actually give specific guidance on PFP in Q4. But we would expect as in prior quarters for PFP to be in that 17% to 19% range, probably not as high in Q4 of 2011. Richard Fetyko – Janney Capital: Thank you.

The next question is from the line of Jeff Van Rhee from Craig-Hallum. Jeff Van Rhee – Craig-Hallum Capital: Thanks, just a couple clean ups here. The growth rates, I think you gave as being market sequentially. What were they year-over-year?

For which one? Jeff Van Rhee – Craig-Hallum Capital: SMB and mid-market.

So SMB was about 11.5% year-over-year, and the mid-market was I think year-over-year probably about 7% or 8% year-over-year. Jeff Van Rhee – Craig-Hallum Capital: Okay, and then just circling back to one of the other questions, I just want to make sure that I got it right. I think the question I’d ask you what the pricing looks like on the new products. And you had talked about not giving overall revenue guidance for the products, but I just want to be clear. Can you give us some color around you’ve at least learned some things in the last three to six months about how broadly people are interested in deploying this. You know, how you’re going to price it and what applications it’s really relevant for. What do those data points tell you about potential deal sizes that you can share?

Sure, just real quick Jeff, I just want to clarify something on the growth rates over mid-market quarter-over-quarter. Sorry, the growth rate in the mid-market quarter-over-quarter was pretty high because we had just started the mid-market probably about 18 months to 21 months ago. So the growth rate was in the double digits probably around the 60% level quarter-over-quarter. Jeff Van Rhee – Craig-Hallum Capital: Okay, thank you.

As far as color around the new products, from a pricing perspective, the pricing model around LP market will be fixed fee, a combination of fixed fee with usage. On the insights business, it will be predominately a fixed fee related to how many chats that you actually want to translate. And for ADE, analytics driven engagements, on a perceived basis and then for – I’d say those are just the three from a financial perspective from a model perspective. And then on the API, we charge in two ways. We charge our customer an API connector fee, and then we do a rev share with a third party that’s developing off of the platform. So those are kind of the three, four ways that we’ll price our products. As far as adoption is concerned, we’ve got 8,500 customers. We can implement these products, at least LP marketer, without having chat implement it, but we will focus on our existing customer base first where we have relationships, strong relationships, and we’re already deployed. But LP marketer, it’s a little bit easier for us when we go to a chat customer because we’ve got the tags deployed on their site, so it’s easier for us to get the product up and running. Obviously with LPN sites, we’re translating chat transcripts so it helps when they’re a chat customer. But we can do other types of unstructured data. For the API’s, obviously we’re building off our stack, so again focusing on existing customers. So most of this will be around existing customers in the short term. And the pricing models you know, fix fee with usage for LP marketer and as I discussed before. Jeff Van Rhee – Craig-Hallum: Okay, and then I guess one last one. Can you just in terms of sales head count, you’ve got the different breakdowns. Where are we now if you can just clarify that for me? And then I missed, you talked about intentions to continue hiring. Can you give us a sense of magnitude in terms of where you think headcount’s going to end the year or where you’ll take them in the forward as far out as you’re willing to go, into ’12 in the early quarters at least?

Sure, so we’re relatively flat quarter-on-quarter on Q3 to Q2. If you remember, I think we added five, maybe six heads in Q2. We spent a quarter adjusting those heads and training those heads as well as training the whole sales force to sell multiple products. And as we look forward to Q4, our goal is to continue to add sales people. Without giving a specific number, we think there’s opportunity to add sales capacity in both the mid-market and enterprise level as we roll our new products and focus on growth for 2012. Jeff Van Rhee – Craig-Hallum: Okay, thank you.

The next question is from the line of Brian Schwartz with Thinkequity. Brian Schwartz – Thinkequity: Yeah, hi, thank you for taking my questions this afternoon. Rob, I was hoping that you could maybe give us some color from what you’re hearing from the sales force at least out on the field. Is there any sense or any signs at all that potentially sales cycles are lengthening or close rates are having to take an additional hurdle? Did you see any variation at all in the most recent quarter?

No, bookings are still quite strong. And right now, we don’t see any real impact. And I kind of feel like during a weakening economy, people are looking for things to increase their sales. And because our tools are really focused on optimization of the traffic and increasing incremental sales, that’s what we’re seeing right now, so we still feel very good about the business. And I think widening the product lines, what we’re seeing allows us to really go after even things like the LP marketer. What I like about it is it doesn’t have any labor attached to it. So unlike the core, which is still people want to chat, with marketer, you set it up, and you go, and you can increase sales without adding that headcount. So it has an efficiency element to it too. So yeah, so far, so good. Brian Schwartz – Thinkequity: Great, thank you for that additional color. And Dan, I just wanted to follow up on the statement that you had made I think when you were talking about the bookings here this quarter. I think you mentioned that the $5 million range was certainly right on target. When you gave that number, is that a target or a range that you’re looking for here in this current quarter in Q4, or were you specifically just referring to the Q3 net finished?

I was specifically referring to Q3 net finished from a bookings perspective. And when we look at bookings, I’ve explained this I think before. But when we look at bookings, it only really represents a portion of our business. We only, from a bookings perspective in the calculation, we only include committed deals in our mid-market and enterprise space. Professional services, small business, consumer are all on a monthly, and PFP, sorry, are committed from a contractual perspective. But on small business, you have 90 days out. Consumer is transactional. Professional service is transactional. And PFP obviously is transactional and can swing up or swing down. So we’re comfortable with where the bookings, and we’re on track with our bookings for Q3. So we’re comfortable with where it is. Brian Schwartz – Thinkequity: Good to hear, and last question just back to Rob. I just wanted to ask you a question really about the management team that you have there and where we’re at right now. I think we saw the press release here that your CPO is moving onto something new. I believe you also still have an opening right now for someone to head up the sales team over there. I guess my question really is around that head of sales position. I was just wondering if it’s possible to get an update on where you’re at there, if you think that you’re getting closer and closer to filling that position here in the near future. Thanks.

So on the technology side, we have a GM whose been with us for many years. And basically runs the operation in Israel. And what we want to do now on the CPO side is really align the leadership side with around data and intelligence and around having a large organization multi-product. So we thought it was a good opportunity now. So right now, the team still reports into Ellie who has been with us for many years, and then that will go out and find another person to lead on this data intelligence stack. In the sales, we basically divided up this quarter all the regions globally and by size to three different people who have been here. And they’ve been here for many years. And we sort of solidified their position and their leadership, and so far, so good. So we’re kind of happy with the organizational structure we have right now. As overall business, we’ve gone to more flat structure, and it’s working for us. And so these guys are doing a great job. And we kind of just said, “Okay, let’s divide up everything and continue having you guys expand your roles here.” And that’s kind of what we’re going to do right now. Brian Schwartz – Thinkequity: Thank you for that information and taking my questions. Thanks.

Thanks, Brian.

The next question is from the line of Craig Nankervis with First Analysis. Craig Nankervis – First Analysis: Yes, thank you very much. First of all I guess tagging on from a couple of the most recent questions. The bookings comment and your comfort, if we look to Q4, the comps for last year is sort of a tall one because I believe you had one particularly large deal. So I guess in your mind, would you not be surprised to have a down bookings quarter year-over-year in the current quarter if maybe you can shed a little bit of light on your thinking on that. Start there.

From a bookings perspective, we did one large booking in Q4 of 2010. I would not expect our bookings in Q4 of this year to be at that level. I think we reported $6 million last quarter in Q4 of 2010 if I’m not mistaken with one large deal in there. I wouldn’t expect to be at that $6 million level, but we’re comfortable with where we are. And we’re on track for the quarter. Craig Nankervis – First Analysis: Just in terms of the linearity in Q3 relative to the new business you brought on, is there any particular color that’s worth noting there. How the quarter played out, or how it was towards the end of the quarter in particular, or was it pretty normal from your perspective?

It’s pretty normal. So the new products, the good and bad about the business model as you guys know is that as the new products ramp, they have to ramp. So we’re starting to take in some revenues from these new products, but they’re coming in on a monthly basis. And they’ll start to ramp up, and it takes a little time on the recurring revenue model. So as Dan said, we’re basically not going to see much impact in those numbers, in the overall numbers now. Starting at the beginning of next year, we should see some impact. And then ramping up towards the latter half of the year. But I think the exciting part is we created these products only a couple quarters ago. And customers just take them. And what we expected was because we don’t have to do any really big implementations because we have those tags on the pages and we have the relationships, we’re able to fire these products up and get them going on them. That’s a huge competitive advantage. There are other companies in the market with, small companies with an LP marketer type of offer, but they don’t have the tags. They don’t have the relationships. They don’t also have chat and other brings they can bring. Because this is ultimately going to be sweet of marketing intelligence, sweeter marketing products, but provide intelligent engagement. So that’s the exciting part about it. Craig Nankervis – First Analysis: Do you envision closing any LP marketer deals in Q4 regardless of whether you’re generating revenue? Do you think you’re going to be closing LP marketer deals this quarter?

We already did. So there’s paper out on LP marketer deals. So they’ve started to close and ship betas into contracts. And so that already started. So when we talk about GA, these products, they’re rolling out and they are starting to generate revenue from them. But we did sign our first contracts only a couple weeks ago. Craig Nankervis – First Analysis: Okay, thank you. And then I guess lastly, maybe for Dan, it strikes me that your revenue guidance range for the current quarter is probably a little bit narrower than I might have envisioned. I think it’s $500,000. And just given the variability of some of your revenue streams whether it’s PSP, whether it’s consumer, whether it’s SMB, or whatever, it seems to me that in general, I would have considered there to be perhaps more latitude to the guidance. And I wondered at least in my mind if you could talk through the narrowness of the guidance range and where you’re coming from on that.

So there is some variability in our products especially on PSP and small business peaks, but we’ve got some good visibility into where we are. We’re in November, so we’ve got some good visibility into the quarter. And it’s still from a sequential growth perspective. It’s still strong sequential growth quarter-over-quarter. So we’re comfortable with where the revenue guidance is as we look at the numbers today.

Next question is from the line of Mike Latimore with Northland Capital Management. Ron McDowell – Northland Capital Management: Hi, guys, I’m Ron McDowell in for Mike. Thanks for taking my questions. I was just curious kind of back to the bookings, did you see any region or vertical that was particularly strong or weak during the quarter?

No, nothing particular. I mean in Q2, we had a very strong quarter out of Europe. Europe wasn’t as high in the third quarter, but that wasn’t for anything other than a specific deal that happened out of Europe in Q2. So it’s in line with what we expected, and good business coming out of the U.S., good business coming out of Europe. And Asia Pacific is still pushing along and growing nicely on a percentage base. But absolute dollars, we’ve got some work to do. Ron McDowell – Northland Capital Management: Okay, and then I’m looking at the consumer segment. I mean it said it was pretty flat year-over-year and it decreased sequentially. I mean where do you view that going forward? Do you think it will remain relatively stable?

We think it will remain relatively stable. I mean Q3 typically has been a bit of a down quarter, but we think it will be relatively stable. And we’re still generating a nice amount of cash coming out of the business.

Q3, the down on Q3 is usually around education and tutoring. So that quarter, there isn’t a lot of education and tutoring, and then it bounces back on a nice side on Q4. So we’re seeing sort of the normal pattern back on Q4. And we’re still optimizing that business for cash flow, and so that’s where we’re really focused on that business. Ron McDowell – Northland Capital Management: Okay, and then I guess just one last clarifying. I think you mentioned during your comments or your statements about the kind of the customer breakdown by annual revenues. Could you kind of clarify that again?

So as far as the number of customers? Ron McDowell – Northland Capital Management: Yes.

Is that what you’re talking about? Sure, let me just get the page real quick. We had 30 plus customers over $500,000 annualized spend. We were able to move four customers from the $500 to $1 million bucket to the above $1 million bucket. And as consistent with prior quarters, we have one customer that’s north of $10 million. Ron McDowell – Northland Capital Management: All right, thanks a lot guys.

The final question is from the line of Jon Hickman with Ladenburg Jon Hickman – Ladenburg: One question for you Dan. Could you just clarify the number of customers or beta customers that you have on LP marketer? I think you gave a – if you can.

Was there more to the question? Jon Hickman – Ladenburg: No, that’s it. Because you talked about ADA customers and ADI customers.

As of the end of the fourth quarter, we had nine base customers assigned and live. Sorry, in the third quarter. Did I say, end of the third quarter, sorry. Jon Hickman – Ladenburg: I knew what you meant. That’s okay. Thank you very much.

There are no further questions at this time. I’d like to turn the call back to management for any closing remarks.

Thank you for being on the call, and we will see you next quarter.

Thanks everybody.

Good-bye.

This concludes today’s conference call. Thank you for your participation. You may now disconnect.