LivePerson Announces Second Quarter 2024 Financial Results

-- Total Revenue of $79.9M, at the high-end of our guidance range --

-- Adjusted EBITDA above the high-end of our guidance range  --

NEW YORK, July 31, 2024 /PRNewswire/ -- LivePerson, Inc. (NASDAQ: LPSN) ("LivePerson", the "Company", "we" or "us"), the enterprise leader in digital customer conversations, today announced financial results for the second quarter ended June 30, 2024.

Second Quarter Highlights

Total revenue was $79.9 million for the second quarter of 2024, a decrease of 18.1% as compared to the same period last year driven by customer cancellations and downsells.

LivePerson signed 37 deals in total for the second quarter, consisting of 28 existing and 9 new customers, including 1 seven-figure deal. Trailing-twelve-months average revenue per enterprise and mid-market customer (ARPC) increased 9.6% for the second quarter to $630,000, up from approximately $575,000 for the comparable prior-year period. ARPC is calculated using only B2B Core recurring revenue, which is consistent with the revenue base for calculating Net Revenue Retention.

"In the second quarter we continued to deliver on our guidance and advance across all key focus areas. We meaningfully improved our capital structure with our debt transaction and bolstered our go-to-market motion by adding an accomplished Chief Revenue Officer while instituting new pricing and packaging. In addition, we took significant steps towards launching our omnichannel partnership and solutions with partners while continuing to innovate on our product with new capabilities and integrations showcased at our Spark event," said CEO John Sabino. "With a best-in-class product and strong commercial leadership now in place to deliver the digital capabilities enterprises need, we are continuing to execute on our strategy as demonstrated over the past two quarters."

"We have the right strategy and leadership team to execute it," said CFO and COO John Collins. "We delivered sequential improvement in deal values and other key operating metrics in the second quarter and we expect continued execution of our strategy to unlock further progress in the third quarter."

Customer Expansion

During the second quarter, the Company signed 37 total deals for the quarter, including 1 seven-figure deal, 28 expansion & renewals and 9 new logo deals. New logo deals included:

• A large New Zealand-based telecommunications company; and
• A large U.S. mortgage company.

The Company also expanded/renewed business with:

• A global financial services company; and
• A global audio streaming company.

Net Income and Adjusted Operating Income 

Net income for the second quarter of 2024 was $41.8 million or $0.47 per share, as compared to a net income of $10.8 million or $0.14 per share for the second quarter of 2023.  Adjusted operating income, a non-GAAP financial measure, for the second quarter of 2024 was $0.5 million, as compared to $0.4 million adjusted operating income for the second quarter of 2023. Adjusted operating income excludes amortization of purchased intangibles and finance leases, stock-based compensation expense, other litigation, consulting and other employee costs, restructuring costs, impairment of goodwill, impairment of intangibles and other assets, leadership transition costs, working capital adjustment related to the Kasamba divestiture, IT transformation costs, loss (gain) on divestiture, contingent earn-out adjustments, acquisition and divestiture costs,  interest expense (income) net, gain on debt extinguishment, and other income, net.

A reconciliation of non-GAAP financial measures to GAAP measures has been provided in the financial tables included in this press release. An explanation of the non-GAAP financial measures and how they are calculated is included below under the heading "Non-GAAP Financial Measures."

Adjusted EBITDA

Adjusted EBITDA, a non-GAAP financial measure, for the second quarter of 2024 was $8.2 million as compared to adjusted EBITDA of $10.2 million for the second quarter of 2023. Adjusted EBITDA excludes amortization of purchased intangibles and finance leases, stock-based compensation expense, depreciation, other litigation, consulting and other employee costs, restructuring costs, impairment of goodwill, impairment of intangibles and other assets, leadership transition costs, working capital adjustment related to the Kasamba divestiture, IT transformation costs, loss (gain) on divestiture, contingent earn-out adjustments, provision for (benefit from) income taxes, acquisition and divestiture costs, interest expense (income), net, gain on debt extinguishment, and other income, net.

A reconciliation of non-GAAP financial measures to GAAP measures has been provided in the financial tables included in this press release. An explanation of the non-GAAP financial measures and how they are calculated is included below under the heading "Non-GAAP Financial Measures." 

Cash and Cash Equivalents

The Company's cash balance was $146.0 million at June 30, 2024, as compared to $210.8 million as of December 31, 2023.

Financial Expectations

The following forward-looking measures and the underlying assumptions involve significant known and unknown risks and uncertainties, and actual results may vary materially from these forward-looking measures. The Company does not present a quantitative reconciliation of the forward-looking non-GAAP financial measures, adjusted EBITDA and adjusted EBITDA margin to the most directly comparable GAAP financial measures (or otherwise present such forward-looking GAAP measures) because it is impractical to forecast certain items without unreasonable efforts due to the uncertainty and inherent difficulty of predicting, within a reasonable range, the occurrence and financial impact of and the periods in which such items may be recognized. In particular, these non-GAAP financial measures exclude certain items, including amortization of purchased intangibles and finance leases, stock-based compensation expense, depreciation, other litigation, consulting and other employee costs, restructuring costs, impairment of goodwill, impairment of intangibles and other assets, leadership transition costs, working capital adjustment related to the Kasamba divestiture, IT transformation costs, loss (gain) on divestiture, contingent earn-out adjustments, provision for (benefit from) income taxes, acquisition and divestiture costs, interest expense (income), net, gain on debt extinguishment, and other income, net, which depend on future events that the Company is unable to predict. Depending on the size of these items, they could have a significant impact on the Company's GAAP financial results.

For the third quarter of 2024, we expect total revenue to range from $69M - $73M or (32)% to (28)% year over year. We expect B2B Core recurring revenue to represent 92% of total revenue. For the third quarter of 2024, we expect adjusted EBITDA to range from $0M to $5M, or a margin of 0.0% to 6.8%.

For the full year 2024, we continue to expect total revenue to range from $300M - $315M or (24)% to (20)% year over year (excluding $7.2M of Kasamba revenue generated in Q1 2023). In addition, we expect B2B Core recurring revenue to represent 92% of total revenue. For the full year 2024, we expect adjusted EBITDA to range from $15M to $26M, or a margin of 5.0% to 8.3%.

For the tables below, year-over-year growth rates are on a like-for-like basis (excluding Kasamba contribution from 2023).

Disaggregated Revenue

Included in the accompanying financial results are revenues disaggregated by revenue source, as follows:

Stock-Based Compensation

Included in the accompanying financial results are expenses related to stock-based compensation, as follows:

Amortization of Purchased Intangibles and Finance Leases 

Included in the accompanying financial results are expenses related to the amortization of purchased intangibles and finance leases, as follows:

Supplemental Second Quarter 2024 Presentation

LivePerson will post a presentation providing supplemental information for the second quarter 2024 on the investor relations section of the Company's web site at www.ir.liveperson.com.

Earnings Teleconference Information

The Company will discuss its second quarter of 2024 financial results during a teleconference today, July 31, 2024, at 5:00 PM ET. To participate via telephone, callers should dial in five to ten minutes prior to the 5:00 p.m. Eastern start time; domestic callers (U.S. and Canada) should dial 1-877-407-0784, while international callers should dial 1-201-689-8560, and both should reference the conference ID "13747340."

The conference call will also be simulcast live on the Internet and can be accessed by logging onto the investor relations section of the Company's web site at www.ir.liveperson.com.

If you are unable to participate in the live call, the teleconference will be available for replay approximately two hours after the call until August 14, 2024. To access the replay, please call 1-844-512-2921 (U.S. and Canada) or 1-412-317-6671 (international). Please reference the conference ID "13747340." A replay will also be available on the investor relations section of the Company's web site at www.ir.liveperson.com.

About LivePerson, Inc.

LivePerson (NASDAQ: LPSN) is the enterprise leader in digital customer conversations. The world's leading brands — including HSBC, Chipotle, and Virgin Media — use our award-winning Conversational Cloud platform to connect with millions of consumers. We power nearly a billion conversational interactions every month, providing a uniquely rich data set and AI-powered solutions to accelerate contact center transformation, supercharge agent productivity, and deliver more personalized customer experiences. Fast Company named us the #1 Most Innovative AI Company in the world. To talk with us or our AI, please visit liveperson.com.

Non-GAAP Financial Measures

Investors are cautioned that the following financial measures used in this press release and on our earnings call are "non-GAAP financial measures": (i) adjusted EBITDA, or net income (loss) before provision for (benefit from) income taxes, interest expense (income), net, other income, net, gain on debt extinguishment, depreciation, amortization of purchased intangibles and finance leases, stock-based compensation expense, contingent earn-out adjustments, restructuring costs, impairment of goodwill, impairment of intangibles and other assets, leadership transition costs, working capital adjustment related to the Kasamba divestiture, IT transformation costs, loss (gain) on divestiture, acquisition and divestiture costs and other litigation, consulting and other employee costs; (ii) adjusted EBITDA margin, or net income (loss) before provision for (benefit from) income taxes, interest expense (income), net, other income, net, gain on debt extinguishment, depreciation, amortization of purchased intangibles and finance leases, stock-based compensation expense, contingent earn-out adjustments, restructuring costs, impairment of goodwill, impairment of intangibles and other assets, leadership transition costs, working capital adjustment related to the Kasamba divestiture, IT transformation costs, loss (gain) on divestiture, acquisition and divestiture costs and other litigation, consulting and other employee costs divided by revenue; (iii) adjusted operating income (loss), or income (loss) before provision for (benefit from) income taxes excluding interest expense (income), net, gain on debt extinguishment, other income, net, amortization of purchased intangibles and finance leases, stock-based compensation expense, contingent earn-out adjustments, restructuring costs, impairment of goodwill, impairment of intangibles and other assets, leadership transition costs, IT transformation costs, working capital adjustment related to the Kasamba divestiture, loss (gain) on divestiture, acquisition and divestiture costs, and other litigation, consulting and other employee costs and (iv) free cash flow, or net cash used in operating activities less purchases of property and equipment, including capitalized software.

Non-GAAP financial information should not be construed as an alternative to any other measures of performance determined in accordance with GAAP, or as an indicator of our operating performance, liquidity or cash flows generated by operating, investing and financing activities as there may be significant factors or trends that it fails to address. We present non-GAAP financial information because we believe that it is helpful to some investors as one measure of our operations.

Forward-Looking Statements

Statements in this press release and on our earnings call regarding LivePerson that are not historical facts are forward-looking statements and are subject to risks and uncertainties that could cause actual future events or results to differ materially from such statements. Any such forward-looking statements, including but not limited to financial guidance, changes to our capital structure, our ability to execute on our transformation strategy, the effects of our cost-reduction efforts and the impact of our new hires, are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. With respect to our financial guidance, we note that it is routine for our internal projections and expectations to change as the quarter and year progress, and therefore it should be clearly understood that the internal projections and beliefs upon which we base our expectations may change. Although these expectations may change, we are under no obligation to inform you if they do. Some of the factors that could cause actual results to differ materially from the forward-looking statements contained herein include, without limitation: strain on our personnel resources and infrastructure from supporting our customer base; our ability to retain existing customers and cause them to purchase additional services and to attract new customers; our ability to retain key personnel, attract new personnel and to manage staff attrition; our ability to successfully integrate acquisitions; our ability to refinance our substantial indebtedness before it becomes due or to secure necessary additional financing on commercially reasonable terms, or at all; lengthy sales cycles; delays in our implementation cycles; payment-related risks; potential fluctuations in our quarterly revenue and operating results; limitations on the effectiveness of our controls; non-payment or late payment of amounts due to us from a significant number of customers; volatility in the capital markets; recognition of revenue from subscriptions; customer retention and engagement; our ability to develop and maintain successful relationships with partners, service partners, social media and other third-party consumer messaging platforms and endpoints; our ability to effectively operate on mobile devices; the highly competitive markets in which we operate; general economic conditions; failures or security breaches in our services, those of our third party service providers, or in the websites of our customers; regulation or possible misappropriation of personal information belonging to our customers' Internet users; US and international laws and regulations regarding privacy data protection and AI and increased public scrutiny of privacy, security and AI issues that could result in increased government regulation and other legal obligations; ongoing litigation and legal matters; new regulatory or other legal requirements that could materially impact our business; governmental export controls and economic sanctions; industry-specific regulation and unfavorable industry-specific laws, regulations or interpretive positions; future regulation of the Internet or mobile devices; technology-related defects that could disrupt the LivePerson services; our ability to protect our intellectual property rights or potential infringement of the intellectual property rights of third parties; the use of AI in our product offerings or by our vendors; the presence of, and difficulty in correcting, errors, failures or "bugs" in our products; our ability to license necessary third party software for use in our products and services, and our ability to successfully integrate third party software; potential adverse impact due to foreign currency and cryptocurrency exchange rate fluctuations; additional regulatory requirements, tax liabilities, currency exchange rate fluctuations and other risks if and as we expand; risks related to our operations in Israel; potential failure to meeting service level commitments to certain customers; legal liability and/or negative publicity for the services provided to consumers via our technology platforms; technological or other defects that could disrupt or negatively impact our services; our ability to maintain our reputation; changes in accounting principles generally accepted in the United States; natural catastrophic events and interruption to our business by man-made problems; potential limitations on our ability to use net operating losses to offset future taxable income; and risks related to our common stock being traded on more than one securities exchange; and other factors described in the "Risk Factors" section of the Company's Annual Report on Form 10-K for the year ended December 31, 2023, filed with the SEC on March 4, 2024 (as amended on April 29, 2024). This list is intended to identify only certain of the principal factors that could cause actual results to differ from those discussed in the forward-looking statements. Readers are referred to the Company's reports and documents filed from time to time by us with the Securities and Exchange Commission for a discussion of these and other important factors that could cause actual results to differ from those discussed in forward-looking statements.

Investor Relations contact
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SOURCE LivePerson