LivePerson: LivePerson Announces Fourth Quarter 2024 Financial Results

-- Total Revenue of $ 73.2M, above the high-end of our guidance range -- -- Adjusted EBITD A above the high-end of our guidance range - NEW YORK , March 5, 2025 /PRNewswire/ -- LivePerson, Inc. (NASDAQ: LPSN) ("LivePerson", the "Company", "we" or "us"), a leading provider of trusted enterprise conversational AI and outcome-driven digital transformation, today announced financial results for the fourth quarter ended December 31, 2024 . Fourth Quarter Highlights Total revenue was $73.2 million for the fourth quarter of 2024, a decrease of 23.3% as compared to the same period last year driven by customer cancellations and downsells. LivePerson signed 39 deals in total for the fourth quarter, consisting of 30 existing and 9 new customers. Trailing-twelve-months average revenue per enterprise and mid-market customer (ARPC) increased 2.5% for the fourth quarter to $625,000 , up from approximately $610,000 for the comparable prior-year period. ARPC is calculated using recurring revenue which is consistent with the revenue base for calculating Net Revenue Retention. "2024 was a transformative year for LivePerson, marked by strong progress against our strategy. We have reinvigorated our go-to-market capabilities and continued to innovate on our product offerings, resulting in three consecutive quarters of bookings increases, strong adoption of our Generative AI features and the launch of our voice and digital strategy. While our transformation is ongoing, I remain confident that the strong foundation we have built, combined with continued execution, position us for sustainable growth and profitability in the future." said CEO John Sabino . "We are seeing increasing demand for AI agents and AI orchestration, traction for LivePerson as a leading solution for large enterprises in regulated industries, and growing interest from partners as three key themes influencing our results and validating our strategy. With three consecutive quarters of sequential bookings growth and improvement in other key commercial metrics, we expect to see continued improvement in the business in 2025," said CFO and COO John Collins . Customer Expansion During the fourth quarter, the Company signed 39 total deals for the quarter, including 30 expansion & renewals and 9 new logo deals. Expansions & renewals included: A U.S.- based financial services company; A British retail bank; and A leading British broadcast and communications company. New logos included: A multinational consulting company to deploy Generative AI for key enterprise clients; A leading African insurance company, through a partnership; and A leading luxury fashion brand, through a partnership. Net Loss and Adjusted Operating Income (Loss) Net loss for the fourth quarter of 2024 was $112.1 million or $1.27 per share, as compared to a net loss of $40.5 million or $0.48 per share for the fourth quarter of 2023. Adjusted operating income, a non-GAAP financial metric, for the fourth quarter of 2024 was $1.0 million, as compared to a $4.0 million adjusted operating loss for the fourth quarter of 2023. Adjusted operating income (loss) excludes provision for income taxes, other litigation, consulting and other employee costs, restructuring costs, amortization of purchased intangibles and finance leases, impairment of goodwill, impairment of intangibles and other assets, stock-based compensation expense, leadership transition costs, contingent earn out adjustments, working capital adjustment related to the Kasamba divestiture, IT transformation costs, acquisition and divestiture costs, gain on debt extinguishment, change in fair value of warrants, interest expense, interest income, loss (gain) on divestiture, and other expense (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 fourth quarter of 2024 was $8.1 million as compared to an adjusted EBITDA of $3.7 million for the fourth quarter of 2023. Adjusted EBITDA excludes provision for income taxes, other litigation, consulting and other employee costs, restructuring costs, amortization of purchased intangibles and finance leases, impairment of goodwill, impairment of intangibles and other assets, stock-based compensation expense, leadership transition costs, contingent earn out adjustments, working capital adjustment related to the Kasamba divestiture, IT transformation costs, acquisition and divestiture costs, gain on debt extinguishment, change in fair value of warrants, interest expense, interest income, loss (gain) on divestiture, and other expense (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 $183.2 million at December 31, 2024, as compared to $210.8 million at 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 depreciation, other litigation, consulting and other employee costs, restructuring costs, amortization of purchased intangibles and finance leases, impairment of goodwill, impairment of intangibles and other assets, stock-based compensation expense, leadership transition costs, contingent earn out adjustments, provision for income taxes, working capital adjustment related to the Kasamba divestiture, IT transformation costs, acquisition and divestiture costs, gain on debt extinguishment, change in fair value of warrants, interest expense, interest income, loss (gain) on divestiture, and other expense (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 first quarter of 2025, we expect total revenue to range from $63 million - $65 million or (26)% to (24)% year over year. We expect recurring revenue, formerly referred to as B2B Core recurring revenue, to represent 94% of total revenue. For the first quarter of 2025, we expect adjusted EBITDA to range from $(3) million to $(1) million , or a margin of (4.8)% to (1.5)%. For the full year 2025, we expect total revenue to range from $240 million - $255 million or (23)% to (18)% year over year. In addition, we expect recurring revenue to represent 93% of total revenue. For the full year 2025, we expect adjusted EBITDA to range from $(14) million to $0 million , or a margin of (5.8)% to 0.0%. First Quarter 2025 Guidance Revenue (in millions) $63 - $65 Revenue growth (year-over-year) (26)% - (24)% Adjusted EBITDA (in millions) $(3) - $(1) Adjusted EBITDA margin (%) (4.8)% - (1.5)% Full Year 2025 Guidance Revenue (in millions) $240 - $255 Revenue growth (year-over-year) (23)% - (18)% Adjusted EBITDA (in millions) $(14) - $0 Adjusted EBITDA margin (%) (5.8)% - 0.0% Disaggregated Revenue Included in the accompanying financial results are revenues disaggregated by revenue source, as follows: Three Months Ended December 31, Year Ended December 31, 2024 2023 2024 2023 (In thousands) Revenue: Hosted services (1) $ 60,216 $ 78,600 $ 261,682 $ 332,971 Professional services 12,990 16,868 50,792 69,012 Total revenue $ 73,206 $ 95,468 $ 312,474 $ 401,983 (1) On March 20, 2023, the Company completed the sale of Kasamba and therefore ceased recognizing revenue related to Kasamba effective on the transaction close date. Further, this sale eliminated the entire Consumer segment, as a result of which revenue is presented within a single consolidated segment. Hosted services included $7.1 million for the year ended December 31, 2023, relating to Kasamba. Stock-Based Compensation Included in the accompanying financial results are expenses related to stock-based compensation, as follows: Three Months Ended December 31, Year Ended December 31, 2024 2023 2024 2023 (In thousands) Cost of revenue $ 198 $ 577 $ 1,080 $ 1,456 Sales and marketing 903 2,925 7,394 10,354 General and administrative 948 364 6,789 (5,706) Product development 1,107 3,508 6,726 5,750 Total $ 3,156 $ 7,374 $ 21,989 $ 11,854 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: Three Months Ended December 31, Year Ended December 31, 2024 2023 2024 2023 (In thousands) Cost of revenue $ 20 $ 4,966 $ 9,217 $ 18,691 Amortization of purchased intangibles 357 861 2,745 3,505 Total $ 377 $ 5,827 $ 11,962 $ 22,196 Supplemental Fourth Quarter 2024 Presentation LivePerson will post a presentation providing supplemental information for the fourth quarter of 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 fourth quarter of 2024