Good afternoon, ladies and gentlemen. Thank you for standing by. Welcome to LivePerson's third quarter 2018 results conference call. My name is Deidre, and I will be your conference operator today. At this time, all participants are in a listen-only mode. After the prepared remarks, the management from LivePerson will conduct a question- and- answer session, and conference call participants will be given instructions at that time. As a reminder, this conference call is being recorded. I would now like to turn the conference call over to Mr. Matt Kempler, the company's Vice President of Investor Relations. Please go ahead, sir.
Thanks very much. Joining me on the call today is Robert LoCascio, LivePerson's Founder and CEO, and Chris Greiner, our Chief Financial Officer. Please note that during today's call, we will make forward-looking statements, which are predictions, projections, or other statements about future results. These statements are based on our current expectations and assumptions as of today 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 the comments made during this conference call and in 10-Ks, 10-Qs, and other reports we file from time to time with the SEC. We assume no obligation to update any forward-looking statements. Also, during this call, we will discuss certain non-GAAP financial measures. A reconciliation of GAAP to non-GAAP financial measures is included in today's earnings press release.
Both this press release and supplemental slides, which include highlights of the quarter, are available in the investor relations section of LivePerson's website. With that, I will turn the call over to Rob.
Thanks, Matt. Thank you for joining LivePerson's third quarter earnings call. Revenue increased 14% year-over-year to a record $64.2 million in the third quarter. This marks our sixth consecutive quarter of sequential growth and the continuation of our mid-teens year-over-year growth trajectory. We are once again raising revenue guidance for 2018, and Chris will share those details shortly. Our results reflect another strong quarter for demand generation contract signings, increased 12% over the second quarter and nearly 40% year-over-year. We signed three seven-figure contracts, one of which was with T-Mobile, which is the largest in our history. I want to take this quarter call to spend some time reflecting on the past two years of progress. As many of you know, T-Mobile was our first messaging customer when we launched in 2016.
At that time, messaging wasn't even on the radar of executives overseeing digital customer care. Strategically, we started with the idea that consumer behavior had shifted to platforms like messaging and that the days of calling were over. No more IVR. T-Mobile went live, and none of us knew what to expect. Results were phenomenal. Consumers loved being able to message directly with T-Mobile agents instead of being forced to call. We realized it wasn't a simple communication channel. It was a new way to do all things digital. A few weeks ago, we hosted a conference with T-Mobile in Charleston, South Carolina, with over 100 executives from some of the largest brands in the world. This event was T-Mobile's showcase for brands to see up close their Un-carrier move, called Team of Experts, which eliminates the need for voice IVR.
Team of Experts is foundationally built on the power of the LiveEngage platform and the work we have done with T-Mobile over the past 24 months. It is rare in the world of B2B software that you have the chance to develop a partnership where the customer reaches a level they're willing to acknowledge publicly with a nationwide advertising campaign, the work you've done. It was really meaningful for myself and for the entire company. It was a recognition of all the great work we've done over the past 24 months. T-Mobile did it their way for customer care, there are over 200 other businesses on the LiveEngage platform that have done it in a totally different way for customer care, sales, and even marketing.
Seven of these companies presented at the conference in Charleston, each showed not only amazing operational results but also unique digital conversational commerce experiences. Let me share some of those companies' stories. The CEO of buddybank , a subsidiary of one of Europe's largest banks, UniCredit, talked about how they made life easier for customers by launching a conversational messaging-only bank that is built 100% on the LiveEngage platform. They offer a concierge service wrapped around checking accounts and credit cards, they create a unique consumer experience for banking. Aramark, one of the largest food service providers in the world, shared how they reinvented stadium concessions with an in-seat experience called Brew to You, which gave baseball fans the ability to order food and beverages via messaging in their seats using Apple Business Chat and Apple Pay.
The final example is the Cosmopolitan Hotel in Las Vegas, which deployed an AI-powered bot called Rose that rolls out the red carpet for guests when they check in, playfully helps them find restaurants, order unique cocktails, and even skip the line at the club at the hotel. Rose is changing the game in guest services, driving higher wallet share and peak bookings for the Cosmopolitan. Also, since we launched T-Mobile, something really transformational happened. The leading consumer technology companies like Apple, Facebook, and Google began reaching out to us about wiring LiveEngage into their messaging front ends. This gave us access to billions of consumers, we also recently extended our reach to WhatsApp, Alexa, Google Home, a new ad format from Google called Google AdLingo, and LINE, Japan's leading messaging platform.
These are just some of the amazing changes that have been happening in our market. There's a broader theme to what we are seeing in the overall market. 1995 is where we got started and also Amazon. We have to ask ourselves why only recently did Amazon become one of the largest companies in the world? I would say a lot of it has to do with the fact that in 1995, there were no digital natives. It was people like myself who grew up on phone calls and retail stores that had the buying power. Today, millennials are the largest population, and their influence on all consumers and their collective buying power is now driving a seismic change in the world.
They grew up dating on an app versus going to a bar or club. Shopping online versus going into a store, and more importantly, messaging their friends and family versus calling them. The massive change we are seeing in our business over the past 24 months is being driven by them, and it feels like we're just at the beginning of the demand cycle. There are some key metrics that are showing the momentum that we are building. By the end of 2018, we will have over 30% of our enterprise customers using messaging on LiveEngage. It's a very strong adoption curve is driving greater ARPU as we ship more voice calls to our platform within each of our customers. ARPU has grown from about $200,000 in 2016 to more than $270,000 in the third quarter.
The ARPU for customers that have adopted messaging is more than a half a million dollars, which is more than double what we're seeing with chat even after 20 years. Overall, when you segment our enterprise revenue, it's forecasted to grow more than 20% in 2018. Underlying our messaging adoption is a very powerful statistic as nearly 50% of all interactions are automated in some fashion. AI and machine learning is not a feature of our platform, it is what powers it. At the conference, we introduced a new set of AI capabilities in our platform that include an AI-powered agent workspace called Conversation Builder, AI-powered intent analysis that enables a brand to better understand what are the key things that consumers are asking for and what conversations to automate.
We're also introducing shortly out-of-the-box, vertical-based AI solutions that will help customers successfully scale conversational commerce with minimal effort and expertise. This is all possible because one of our most powerful assets, which I would venture to say is our moat, are the hundreds of millions of end-to-end business to consumer conversations that we have access to on our platform. This is a priceless asset when developing AI and creating machine learning algorithms. Also at the conference, we launched LivePerson Studios. This is where we'll do the highest form of conversational commerce, not only for our customers, but also for well-known personalities. We kicked it off by launching Deepak Chopra a few weeks ago on Amazon Alexa. We developed his skill on Alexa, and by simply saying, Alexa, open Deepak's Reflections, you can hear a daily meditation that lasts about 30 seconds.
We develop a portable way in which every day you can share an idea and upload it to LiveEngage and then to Alexa. We have a video on our website if you're interested in hearing Deepak's perspective on what it is like to work with LivePerson in developing something like this. I've seen the company through many different cycles over the past 20 years, and this feels very different than what I've ever experienced when we scaled even our chat business. The past two years were about doing the foundational work with our product, our people, and our customers so that we could prepare to really scale the business. We definitely have a pole position on conversational commerce today. Now we need to aggressively attack this market and this great opportunity.
I will now hand the call over to Chris, who will do a deeper dive on our financial outlook. Chris?
Thanks, Rob, and good afternoon to all of you. I too couldn't be more pleased with the pace at which we're bringing leading technological capabilities to our customers. I'm also excited by our consistent execution, especially as we build a go-to-market engine that scalably addresses our rapidly expanding opportunity. I'll focus my commentary on the leading indicators continuing to guide our investment decisions. These are the same ones that also underpin the strong results we delivered in the quarter and support our continued growth outlook for the business. Specifically, in the third quarter, we generated record revenue of $64.2 million, up 14% year-over-year and 4% sequentially. Both of our segments delivered double-digit year-over-year growth, with B2B rising 14% and consumer 12%. Our industry expertise in telecommunications and financial services once again translated into strong growth contribution, with both of those verticals generating greater than 30% and 15% respectively.
Let me highlight two of the many key wins in these industries where we continue to win share. The first was a seven-figure expansion with a Fortune 100 multinational financial institution. This customer will be deploying Apple Business Chat as they seek to modernize consumer interactions through new engagement methods. The second was another seven-figure win with a leading telco in Germany. They began working with us under an accelerator pilot program in the first quarter. After seeing strong consumer preference for messaging, they signed an expanded contract with us to add many new consumer endpoints, including Apple Business Chat, WhatsApp, in-app and web messaging. From a geographic perspective, our international markets once again delivered an excellent quarter, posting year-over-year growth of 30% and accounting for 42% of revenue.
Overall, our U.S. revenue grew 4% year-over-year, which was in line with our expectations and worth breaking down further as a market. First, the U.S. enterprise business is already growing faster than the overall company's growth rate, as we made this our main focus over the past 24 months. This quarter, we even had one of the largest telcos return that had left us during the transition a few years back. We're now going to add capacity to this market where we see growing demand and leverage a great base of referenceable customers. The SMB group wasn't a strategic imperative 24 months ago, and naturally, we didn't see growth, which put a lag on overall U.S. growth rates.
With that said, in January, we started to invest in this group as we also believe there'd be demand by SMBs for messaging. We are also seeing good traction now, and we expect this quarter to be a record in contract signings. We are also looking at increasing capacity into this market segment. The combination of these results translate into great deal flow this quarter, with total deals signed increasing nearly 40% to over 105 wins. This is a good illustration of the momentum we're seeing from our investments to expand our channel ecosystem and the early success of our accelerator pilot programs. You'll recall that these accelerator packs are designed entirely around making it easier for our customers to deploy LiveEngage and immediately realize the benefits of our platform. Recent wins in the U.S. include one of the leading telcos, top 10 bank, and a Fortune 500 insurance company.
On the back of its early successes in the U.S., we began expanding this strategy globally. In fact, since the first quarter, we've gone from 25 of these accelerator opportunities to more than 65 today and growing. In terms of revenue retention, for the seventh straight quarter, our mid-market and enterprise customers generated retention rates over our 100% target. Another metric that you heard from Rob that we're encouraged by is ARPU, which accelerated to a record $270,000, up 25% year-over-year. In terms of profit, we saw solid gross profit leverage accompanying our growth in the third quarter, with gross margins increasing 130 basis points year-over-year to 75.6%. On a per-share basis, GAAP net loss of $0.12, adjusted net income of $0.02, and adjusted EBIT of $0.09 were all within our issued guidance ranges.
At the end of the quarter, cash on hand was $66.4 million, or approximately $1.06 per share. All in, we delivered another very strong quarter, and we're seeing compelling proof points of healthy returns to which we're reinvesting our profits. With that, I'd like to take a moment here to give a shout-out to the sales organization. We placed a lot on that team's shoulders, mostly in the form of executing on a rapidly increasing demand environment where total quota-carrying headcount is actually below 2016 levels. They've really just done an awesome job of executing. You'll recall at the beginning of the year, I conveyed our intention to direct investment into two primary areas. The first, in advancing our platform capabilities. Think of these in two principal areas of globalizing our technology capacity and advancing our leadership in automation.
The second, increasing our go-to-market capabilities and capacity through ramping our top-of-funnel activities and building out a channel ecosystem. Starting with our investment in the top of the funnel, over the past few months, we've seen the pace of pipeline creation double on the back of powerful sales use cases, marketing programs, investments in demand generation teams, and globally scaled customer summits. Further, the increased diversity from where these opportunities are being generated has also expanded. We believe this is a clear reflection of the significant opportunity, our unique platform capabilities, and our strategy for creating demand. Second, our conversion rates from our hosted customer summits, in which nearly 250 unique brands have participated in over the last two years, has been over 40%. In fact, as you heard from Rob, we just concluded one of our most successful events in our history with T-Mobile.
More than 100 of our customers and prospects spread over an entire week learned firsthand how they can leverage LiveEngage to connect with consumers conversationally through messaging. These customer summits are a critical component of our industry creation strategy, providing LivePerson the opportunity to showcase its leadership and differentiation. Third, since investing in our channel capabilities, which really up until recently was largely exclusive to EMEA, we've seen a growing pipeline contribution from a diverse mix of strategic partners. In all, we've created more than $30 million of partner-influenced pipeline this year, and it's ramping. The volume of partner-created pipeline in the third quarter was nearly three times higher than in the first quarter. In fact, in the third quarter, a partner helped us secure a mid six-figure deal in Europe with one of the largest insurance companies in the world.
We also signed our first partner-related deals in Japan and Singapore. Fourth, from a product perspective, in July, we opened our advanced technology center in Seattle and have ramped up quickly to over 70 engineers and counting. With that investment, we further globalized R&D across key development hubs, and with it, bolstered our technical infrastructure as well. This added capacity, as you just heard from Rob, is enabling us to release new AI technologies that we can aggressively bring to market. I think in recapping this, it's worth reiterating that these investments have been pointed towards advancing our product leadership, along with the creation of a new market that is now seeing pipeline opportunity increase rapidly. All this translates to updated guidance in the following ways. We're once again raising guidance for 2018.
We now forecast revenue in a range of $248 million-$250 million, up from our previous guidance of $245.5 million-$247.5 million. Updated guidance implies year-over-year growth of 14% at the midpoint, demonstrating continued acceleration towards our 20% + growth target. We're also updating 2018 adjusted EBITDA guidance to a range of $18 million-$20 million from $22 million-$25 million. This update reflects three new investments not previously in our guidance. The first two account for the acquisitions of Conversable and AdvantageTec. Although these acquisitions will impact EBITDA near term and they don't contribute materially to revenue this year, they do offer tremendous strategic value. Conversable added a team of highly skilled AI and bot developers, brought deep vertical expertise in the quick service restaurant industry, as well as social marketing capabilities.
We also made an investment in the automotive space with the acquisition of AdvantageTec, bringing us the only industry solution that supports the entire automotive life cycle, from research to sale to aftermarket service and parts.
AdvantageTec doubles our TAM in the automotive space and provides significant cross-selling opportunity to our roughly 14,000 automotive dealer customers. The balance relates to the cost associated with the significant upsizing of our customer event with T-Mobile in Charleston, which we did not have in our original plan because it was driven by T-Mobile's August launch of their Un-carrier move. It was well worth the investment. As I just discussed, these customer summits are a proven method of driving higher conversion rates and creating market momentum. You can refer to our earnings release for additional details on our full year 2018 assumptions. As we close our comments and move to take your questions, I'll quickly wrap up with a few summarizing points. First, our execution remains really strong, as evidenced by both our operational and financial results in the quarter.
Second, we're here to expand our lead and to win the conversational commerce market, not just participate in it. As Rob discussed, in just the past 24 months, we've transformed how brands communicate with consumers, and we've just begun to scratch the surface of the opportunity in front of us. Third, we have strong conviction in the areas with which we've been investing, and the early results demonstrate the opportunity for significant returns. With that, I'll turn the call back to the operator to take your questions. Deidre?
At this time, if you would like to ask a question, please press star followed by the number one on your telephone keypad. Again, that is star followed by the number one on your telephone keypad. We'll pause for just a moment to compile the Q&A roster. Our first question comes from Ryan MacDonald with Needham & Company.
Good afternoon, everyone. Congrats on the quarter. Just quickly, I guess first question on the acquisitions you made with AdvantageTec and Conversable. Is this sort of a, I guess, a shift in strategy as we're seeing, as we're driving towards that 20% growth target, that you're going to continue to look for some of these additional acquisitions that can add value or help accelerate you toward that target?
It's not really a shift. It's just we're adding in with the car automotive vertical right now, we had all the parts to discover, do discovery, search for cars, and then actually buy them through messaging. This gives us the last part of the process, which is all the servicing, post-sales, oil changes, and all that. They have about 500 customers. We've got north of 10,000. It gives us an area to really sell into that, but it creates the end-to-end journey in that vertical. Conversable, on the other side, they have some very good technology, and they're very focused on the quick casual restaurant vertical. We have OnStar, so they have retailers. It gives us a foothold in that area. They have outbound targeting capabilities for marketing, and that will accelerate some development on our platform versus us building it organically.
We picked up about a little over 20 engineers in Austin and gives us a hub in Austin now for our developers. It's not really a shift. It just is an acceleration of we're trying to get more technology, it creates an end-to-end vertical. You should start to see more, I said it in my speech, which is we are getting very focused on filling out verticals when it comes to the consumer experience. We're looking at areas to invest in, to organically and not organically to sort of fill that out.
Got it. Just a quick follow-up on sort of the Apple Business Chat and the updates we saw during the quarter. It seems like obviously there's some really nice and strong success here in signing up additional customers. Do you think longer term, I guess strategically as customers look at this, that this would be an area where Apple Business Chat is at adding incremental chat lines, or do you think it's more replacing volumes from other channels? Thanks.
If you look at Apple's strategy from a year ago when they launched it was really about what aligns ours, which is replacing the phone call, so to customer care operations and sales. I think we're very aligned in that area. The ability to on-device securely, and this is an encrypted communication channel to message to our platform to a brand, is a very powerful thing. We also have Google with RCS and Google Rich Business Messaging, which is the other, obviously big device and a big operating system. These two, I think will drive a tremendous amount of adoption. This seven-figure deal is predicated on Apple Business Chat. Right now, I think it's a little north of 50% of the customers on Apple Business Chat are riding on our platform, and we're obviously doing very big deals, and we're doing, more importantly, great consumer experiences.
Like I said, even the Aramark deal that we did with the Brew to You experience was purely on Apple Business Chat. We see it as just, it's another way to drive consumer demand, which then drives business adoption.
Our next question comes from Mark Schappel with The Benchmark Company.
Hi, good evening. Thank you for taking my questions and nice job on the quarter, especially the top line. Chris, starting with you, appreciate your comments about your channel programs in your prepared remarks. I was just wondering if you could just provide us some additional details around maybe some of the initiatives that are taking place or that are underway at the company regarding building up your channel ecosystem and building up that pipeline.
Sure, Mark and thanks for the kind words. Let's start with how channels are evolving at the company. Our channel prowess was really isolated to Europe, where about on average, 50% of our bookings have been partner-generated. What that's given us, we believe, is a very good blueprint for how to replicate it in North America and Asia Pacific. The results you're seeing right now and the newly created pipeline is heavily in North America. We have not yet started with the same level of capacity in Asia. What we've done is we've brought in a terrific team of partner leadership. If you look at how we're partnering with very valuable strategics like IBM and Accenture, we're not just pushing LivePerson, we're increasingly being pulled.
I think it's the combination of the capacity in North America, a really good blueprint from Europe, and as Rob mentioned, this theme of conversational commerce is pulling us towards those engagements rather than us having to push and emphasize our capabilities.
Great, thank you. Also in your prepared remarks, you noted, if I recall correctly, a telco customer that left the company years ago, but has now returned to the LivePerson fold. I was wondering if you'd just give us some details around how that deal progressed. Obviously, I'm sure one of your sales reps or even sales teams have been calling on that customer for a while, but maybe just give us a few more details on that.
Yeah. Rob can give some color, but this was all about creating an opportunity for the customer to take a bite at the capabilities in an easy way. We went direct with it. It had been a, as you correctly point out, a pretty long engagement cycle, but for good reason, right? This is a large telco. They're already on the platform, and we're excited about the opportunity to grow it.
Your next question comes from Koji Ikeda with Oppenheimer.
Oh, great. Congrats on the quarter, guys. Just a question on the EBITDA guidance here going forward. I know the guidance, you're taking it down for the two acquisitions here and the upsizing of the T-Mobile event, which makes complete sense. I know you're not giving out any 2019 guidance today. Just thinking about some of the commentary that you've had with the investments that you're making and the go-to-market strategy and the technology too, curious if you could talk real high level on how to think about EBITDA margin expansion going forward here as we set our models. Thank you.
Yeah. Hey, Koji. Thanks. Hope things are going well at the new one. We thought it was really important, and you've seen us add it to the last two scripts that we have obviously increased our rate of investment as we've seen the market continue to expand with opportunity. It's been important for us to be very clear and transparent as to where that investment is going. As you saw on this call, point directly back to the proof points as to why we believe they continue to be the right places to put our reinvested profit. If you think back for the year, I'll use rough numbers. For the year, we will have reinvested about eight points of adjusted EBITDA margin.
If you go back to the initial growth rates on the top line that we expected this year, right around 10% at the midpoint, we currently see ourselves at 14%. Already within the course of a year from a ramping set of investments and 8 points of margin, we have gotten back already 4 points of incremental growth. Most of those investments to this point have been directed towards enhancing our product capabilities and building out our top of the funnel. There is a logical next step now to, as we have a great pipeline, to go close the heck out of it and progress the heck out of it. That will require some capacity. I think you are going to continue to see the company in an investment mode. The demand in the market right now compels that we do that.
Not ready to obviously give future guidance on margins, the theme of growth and market demand outstretching our current capacity right now will continue for the foreseeable future. It is organic, to make that point. These are organic capabilities we are going to deliver on.
Got it, Chris. Thank you for that color. Next question for either Rob or Chris, just real high level here, a question on the work that you are doing with Google and its Rich Communication Services initiatives, how is that progressing? At a very high level, I am not too familiar with it, how does it compare to, say, Apple iMessage or Facebook Messenger, and what does that potentially mean for increased interactions for LiveEngage?
Yeah, we took one of the first banks live here in the U.S. Was it announced, the bank, or no?
Yeah.
It was one of the big banks. Not announced yet publicly, but we did that with them. We've done some other launches with them. When you look at RCS globally, there are basically two parts to it. One is they've got to upgrade all the carriers to the RCS service, and then they've got a client that sits on the mobile device, which they've gotten Samsung now to commit to, and they've got Rich Business Messaging, which is the business part of that. They definitely have to do a little bit more work to scale it. The bottom line is, every telco around the world wants to increase SMS. SMS is an old technology. They want to use RCS because it makes it very much in parity, if not better than WhatsApp or Facebook Messenger.
They're very aggressively pursuing this, and we're seeing them as a great partner. Obviously, with Apple and iMessage, you just get it. They don't have to go to a carrier. It's there. It's a closed system. Google has to do a lot more work, but the bottom line is more people are on SMS today. There are 5.3 billion people who use it. It's 60 billion messages a day. It's larger than any single OTT, over-the-top, messaging service like WhatsApp or Facebook Messenger. Once that thing hits, it's going to create a tremendous amount of impact in the world. We are just working with our customers, and we're creating services around RCS, and obviously doing that with Google's version and also working on other versions. Like in Japan, they don't use Google's version, and we have KDDI.
They have their own version of RCS that the Japanese provided, and we're integrating into these services. That's how it's playing out today.
Your next question comes from Jeff Van Rhee with the Craig-Hallum Capital Group.
Jeff? Hey, Jeff, we can't hear you. If you're there. You're on mute.
Yeah, try it again. How's that?
There you are. We can hear you.
There we go, the old mute button. All right, sorry about that. A couple of quick ones from me. As I look at the $4 million EBITDA reduction for Q4, can you dial that in at least a little bit more so we have a sense of what is Conversable and AdvantageTec versus the T-Mobile event? We're not getting forward guidance. I think it's important to understand what's really driving that.
Hey, Jeff. I'll take that one. Obviously, we didn't go into the specifics of it. Both Conversable and AdvantageTec are very early-stage sub-scale companies. As a result, you can imagine what the P&L profile of it looks like. Then the T-Mobile event, as you've heard us say in the past, we typically spend on these events in the neighborhood of $1 million. That's over a day and a half, and call it 50 - 70 of our customers and prospects. We did this one over a week. We included a heavy presence of our technologies and a demonstration of them, and we increased the size of it to well over 100. I'll let you deduct the math from there. Roughly speaking, the change in EBITDA is pretty evenly associated with the combination of Conversable and AdvantageTec and the significantly upsized T-Mobile event.
Got it. Thank you. That's helpful. You talked about a couple things on pipeline. I just want to make sure I got this right. I think you said signings were up 12%, sequential 40% year-over-year. Is that count or value, and is there a meaningful difference between them both?
That's value. What Rob spoke to in his prepared remarks was the dollar representation of growth. What I spoke to in my remarks, in terms of deal count, we did 105 deals this quarter, which was up almost 40% year-over-year.
Your next question comes from Glenn Mattson with Ladenburg Thalmann.
Hey, Glenn. You may be on mute.
Sorry, I'd heard the last caller do that, and I said I won't make that same mistake, and there it is. Interesting about Rob's comments on ARPU and the guys using messaging on LiveEngage and what a significant difference that was. I missed, though, the figure as to when you'll get to 30%. I'm just curious about the growth rate of that, I guess, as you see it over the next few years, where you can get bigger in that to drive that number higher.
Yeah. By year-end, we'll be over 30% of the enterprise customers that are on LiveEngage will be using messaging. We're already going to be at 30%, or we're already at 30%. We're going above it by year-end. What that tells us is a couple of things. One is we still have a lot of room. We've got a lot of customers out there, large customers, that we can move to messaging and obviously upsell, cross-sell. The other thing is we can go very deep with them. Once we get them on, then we spend a lot of time just getting very deep, which drives the ARPU number. As Chris said, we didn't really add capacity in the last couple of years of headcount because we were focused on the last two years of doing it right, spending time with our customers.
To get T-Mobile where they were to do this big launch a couple of weeks ago, it took us going very deep with them. Now with those learnings, we can really focus on bringing new people onto the platform, taking that 70% that's not there, accelerating that, and with that, we'll add additional capacity into the field group because now we have good frameworks for growing and expanding the business.
We're motivated by how much more broadly our customers use the platform once they get on messaging. I think there were some good data points that Rob provided. At a total mid-market enterprise level, average portfolio ARPU right now is $270,000. We see ARPU greater than a half a million dollars when we have customers on messaging. As we've conveyed in the past, as we bring our customers more and more endpoints, which again, part of the strategy is the expansion to Apple Business Chat, WhatsApp, Google RCS Business Messaging, the Facebook Messenger list will go on.
As clients go from just messaging, they expand with more and more endpoints, there's actually an exponential change in the revenue per customer to the point where when we have customers on three or more endpoints, now you start to picture in your mind's eye how does the company continue to penetrate the white space in our accounts?
When customers are on three or more endpoints, that average ARPU can be as high as $2.9 million compared to the today average of $270,000. Our capacity is stretched between how do you go cross-sell and upsell the base while also acquiring new logos. We're motivated on both fronts. There's nice leverage with each.
Great. Thanks. That's good color. I'm curious on the other, there were comments about the fact that there was less capacity added in the SMB space in the past, maybe that's changing now as far as on the domestic side and helping to boost growth there. Can you remind us what the breakdown is, I guess, between enterprise and SMB and, I guess, besides those two, will help us understand what it's going to take to change the trajectory of the U.S. growth rate overall?
We don't break it out today. What we want to highlight is, because actually last call, when we said 4%, people were like, what's going on with the enterprise? They kind of related that to the enterprise. I wanted to break it out to just explain that obviously our strategy was enterprise care, and that's still our focal point. We've grown that, which will be over 20% this year, the growth rate. That's our focus. We kind of didn't put any investment into the SMB space because it's just dollars. We wanted to invest and make a bet and focus that bet. As of January, we started to reinvest. Matter of fact, we took a leader who did the migrations, and now he's now running that SMB business. He's focused on accelerating them.
We're going to have one of our biggest bookings quarter coming up. We see now demand in that area, and we started those investments in January. We should start to see them forward, and that should start to pick up the overall North American growth rate going into 2019. If you look at enterprise, it's pretty amazing. It went from zero, obviously, because we were migrating to 20%. I wanted to break that out for you guys. Obviously that business is flat to negative. It was flat to negative in the year. Now it'll start to pick up.
Your next question comes from Mike Latimore with Northland Capital Markets.
Great. Thanks. Yeah, nice quarter there. Just want to clarify, the deal count growth, is that a decent proxy for bookings growth?
It's mixed, right? Because the deal sizes are going to be a mixed bag. What we specifically highlighted in the deal counts was just how impressed we were with the contribution of our channels and our accelerator packs. These accelerator packs were something that we launched very early in the year. We had 25 opportunities. That's tripled in size. We are having great success in this type of an offering. Making it very easy is the bottom line for customers to get on the platform and allow us to prove what our customers say at our events, that we can drive real value for them.
This is Matt. I agree with what Chris is saying. In this quarter, they were pretty closely related, that's not necessarily always tied together. We actually had very strong deal value coming from existing customers. We had a lot of volume coming from new customers tied to the accelerator in our partner programs.
We built out, if you guys remember, we started to build out a hunter team a few months ago. That hunter team, which is new logo only, has started to produce. You're going to see logos, just pure logo count, probably move up because we got a team focused on it, and they're expanding themselves too, because there's opportunities out there.
Great. Rob, did you say that 50% of all Apple chat volume is going across the LiveEngage platform?
Close to it. It's not volume, it's the customer count. It's those customers are using the LiveEngage platform. Yeah.
Your next question comes from Zach Cummins with B. Riley.
Hi, good afternoon. Thanks for taking my questions and congrats on the really strong Q3 results. In terms of Apple Business Chat, you had a press release out earlier talking about a new wave of customers coming on and going live with that messaging service. Do you anticipate that the adoption and the amount of customers going live is going to accelerate here over these next couple of quarters?
Yeah, it's definitely, if you are a business in the world, you have the ability to be wired into an iOS device, it makes sense to wire in. I believe that it's going to drive tremendous traction. It's really is at stage one because there's so much more discoverability that Apple, I believe, will do on device right now. To find a brand, you have to search them and put them in. I think they're on Maps and there's some other areas, I think there's going to be a lot more that even they're going to do in the future. Apple is very committed to it. Obviously now Google with RBM and RCS, there's going to be a lot of demand in the market for this type of stuff. They're driving it.
They drive adoption, they're recommending partners to work with. I believe we are preferred in many ways because we do a very good job and we're focused on this. They're a great partner of ours.
Great. That's helpful. Last question for me is just around the new Google AdLingo opportunity. I know it's pretty early days, but have you seen any sort of indication of interest or potential demand for a lot of your customers to potentially be able to communicate directly with consumers through display ads?
I don't want to give any stats that I don't have any data. It's definitely around. We've got a handful of customers, or a hand of customers, I'd say. Not full, just one hand. It's really interesting. From the display ad, you can message. You can think about the possibilities. I really feel like, and this is some stuff, even with the Conversable acquisition, if you sort of knit it together, there's an edge in advertising through messaging. We have seen much higher conversion rates. If you take an ad unit on Facebook and you drive it to Facebook Messenger for business, we see a much higher conversion rate than you would if you clicked and sent it to a landing page.
All those messaging front ends and the ability to use advertising to drive to them, it's going to create a whole set of business opportunities. I can feel it, there's going to be brands that will just use it to build a business. You could get such an edge if you could do it right. Now, the flip side is it's a very creative process today. You can't stamp it out. When we're using it, how do you create the ad? What does it look like? How do you get people to click? It's very different in setting expectations. I think it's a pretty major step on the conversational commerce side to drive adoption.
Again, if you would like to ask a question, simply press star, followed by the number one on your telephone keypad. That's star one on your telephone keypad. We have reached the end of our call today. I will now turn the call over to Mr. Rob LoCascio for closing remarks.
Thank you, operator. I'd like to end the call by re-emphasizing a few key points. LivePerson's strengthening outlook is directly proportional to our execution on the goal of being one of the biggest and most recognized companies in the world of conversational commerce. As I said many times, I fundamentally believe that conversational commerce is going to be one of the biggest transformations in digital. It'll assume, obviously, voice calls. We can see it assume parts of the web and especially apps. These are things that are going to get pulled in.
If you can simply go on an Apple device and say, I want to buy a car, and you get shown the car you want to buy, then you buy it, then it comes to your house, then you want to get your oil changed, you say, I want to get my oil changed, then you get it. That's what we're talking about. It's simple and it's powerful. I think we have a very clear roadmap on how we can go after this multi-billion dollar industry. We have I think hired a tremendous group of people in the last year. We have all the people who have been here to get here. We've got a platform that's powerful, and we've got people behind it to deliver on that.
We have this unique asset, which is every month, 50 million- 60 million new conversations happen on our platform, end-to-end business conversations. If you're creating AI, using AI, or trying to create a machine learning algorithm, and you look at a conversation, like we could take a vertical like telco, and we have biggest telcos around the world, and we look at how do you do bill pay right? I know we're going to be able to automate bill pay, which is like 30% of all voice calls in telcos. It's hundreds of millions, billions and billions of dollars a year globally spent on how can I pay my bill? We're going to automate that. That gives us a real edge in the market. I'm very excited and very bullish about where we are.
Now I feel like we just have this opportunity to bet down on it because we have the metrics. We know what makes a successful customer. We know how to take an AE and get them to sell, and now we just want to bet down for the next level. I look forward to the next quarter and taking this journey with you as we build the business to the next level. Thank you.
This does conclude today's conference call. Thank you for your participation. You may now disconnect.