Core Viewpoint - LivePerson (LPSN) has experienced a bearish trend recently, losing 11.1% in the past week, but the formation of a hammer chart pattern suggests a potential trend reversal as buying interest may be increasing [1][2]. Technical Analysis - The hammer chart pattern indicates a potential bottom in a downtrend, characterized by a small candle body and a long lower wick, suggesting that bears may be losing control [4][5]. - The occurrence of a hammer pattern at the bottom of a downtrend signals a possible trend reversal, as buying interest emerges after reaching a new low [5]. Fundamental Analysis - There is rising optimism among Wall Street analysts regarding LPSN's future earnings, with a 14.4% increase in the consensus EPS estimate over the last 30 days, indicating improved earnings potential [2][8]. - LPSN holds a Zacks Rank of 2 (Buy), placing it in the top 20% of over 4,000 ranked stocks, which historically outperform the market [9].

PART I. FINANCIAL INFORMATION [Item 1. Financial Statements](index=4&type=section&id=Item%201.%20Financial%20Statements) This section presents the unaudited condensed consolidated financial statements for Q1 2025 and 2024, including balance sheets, statements of operations, comprehensive loss, stockholders' equity, and cash flows, highlighting a **24% revenue decline** to **$64.7 million**, a narrowed net loss of **$14.1 million**, and **negative cash flow** from operations of **$3.1 million** Condensed Consolidated Balance Sheets (in thousands) | | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | **Total current assets** | $221,754 | $231,224 | | **Total assets** | $596,220 | $607,778 | | **Total current liabilities** | $134,202 | $139,940 | | **Total liabilities** | $671,164 | $675,094 | | **Total stockholders' equity** | $(74,944) | $(67,316) | Condensed Consolidated Statements of Operations (in thousands, except per share amounts) | | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :--- | :--- | :--- | | **Revenue** | $64,700 | $85,149 | | **Loss from operations** | $(16,944) | $(36,364) | | **Net loss** | $(14,133) | $(35,631) | | **Net loss per share (Basic)** | $(0.15) | $(0.40) | | **Net loss per share (Diluted)** | $(0.24) | $(0.40) | Condensed Consolidated Statements of Cash Flows (in thousands) | | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :--- | :--- | :--- | | **Net cash (used in) provided by operating activities** | $(3,096) | $1,099 | | **Net cash used in investing activities** | $(4,145) | $(12,710) | | **Net cash used in financing activities** | $(26) | $(72,697) | | **Net decrease in cash and cash equivalents** | $(6,983) | $(83,908) | | **Cash, cash equivalents and restricted cash - end of period** | $176,254 | $129,017 | - The company operates as a single operating and reportable segment, with the Chief Executive Officer acting as the chief operating decision maker (CODM)[65](index=65&type=chunk) - The company's revenue is primarily generated from hosted services, which amounted to **$55.1 million** in Q1 2025, down from **$71.5 million** in Q1 2024, with professional services contributing an additional **$9.6 million**[47](index=47&type=chunk)[48](index=48&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=38&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management reports a **24% year-over-year revenue decrease** for Q1 2025 due to customer cancellations, while significantly reducing operating expenses across all categories through cost-saving measures, and anticipates continued customer attrition in the first half of 2025 before a projected shift to positive net new annual recurring revenue in the second half, with current cash of **$176.3 million** deemed sufficient for the next 12 months - Key metrics show mixed performance, with Average Annual Revenue Per Customer (ARPC) increasing to approximately **$640,000** for the trailing twelve months, up from **$625,000** YoY, but revenue retention remaining low at approximately **80%**, below the target range of 105% to 115%[164](index=164&type=chunk) - The company expects short-term customer attrition to continue through the first half of 2025, with a transition toward positive net new annual recurring revenue expected in the second half of 2025[165](index=165&type=chunk) Revenue and Expense Comparison (Q1 2025 vs Q1 2024) | Category | Q1 2025 ($M) | Q1 2024 ($M) | % Change | | :--- | :--- | :--- | :--- | | **Revenue** | $64.7 | $85.1 | (24)% | | Cost of Revenue | $18.2 | $24.5 | (26)% | | Sales and Marketing | $23.5 | $29.2 | (20)% | | General and Administrative | $16.8 | $21.6 | (22)% | | Product Development | $16.0 | $24.6 | (35)% | - As of March 31, 2025, the company had **$176.3 million** in cash and cash equivalents, which management anticipates will be sufficient to satisfy working capital and capital requirements for at least the next 12 months[196](index=196&type=chunk)[203](index=203&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=45&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company identifies its main market risks as foreign currency exchange, collection, interest rate, and inflation, managing collection risk through an allowance for credit losses of **$7.7 million** as of March 31, 2025, while not using derivatives for hedging and believing interest rate and inflation risks are not material - The company monitors foreign currency exchange risks related to the NIS, Pound Sterling, Euro, Australian dollar, and Japanese Yen but does not currently use derivative financial instruments to mitigate this risk[207](index=207&type=chunk) - Collection risk is managed through an allowance for credit losses, which decreased by **$0.9 million** to **$7.7 million** during Q1 2025[208](index=208&type=chunk) - The company does not believe that inflation or changes in market interest rates have had a material effect on its business or financial results[210](index=210&type=chunk)[211](index=211&type=chunk) [Item 4. Controls and Procedures](index=47&type=section&id=Item%204.%20Controls%20and%20Procedures) Based on an evaluation as of March 31, 2025, the company's management, including the CEO and CFO, concluded that its disclosure controls and procedures were effective, with no material changes made to internal control over financial reporting during Q1 2025 - The Chief Executive Officer and Chief Financial Officer concluded that the company's disclosure controls and procedures were effective as of March 31, 2025[213](index=213&type=chunk) - There were no changes in the company's internal control over financial reporting during the quarter ended March 31, 2025, that have materially affected, or are reasonably likely to materially affect, the company's internal control over financial reporting[215](index=215&type=chunk) PART II. OTHER INFORMATION [Item 1. Legal Proceedings](index=47&type=section&id=Item%201.%20Legal%20Proceedings) This section refers to Note 13 of the financial statements, detailing ongoing legal matters including a putative stockholder class action, related derivative actions, a lawsuit from Starboard Value LP alleging fraud, and government inquiries concerning discontinued COVID-19 related products and services - The company is involved in a stockholder class action (Damri v. LivePerson), which was dismissed but is now pending appeal[146](index=146&type=chunk) - Starboard Value LP filed a lawsuit alleging common law fraud and fraudulent inducement related to the settlement of a 2022 proxy contest, with the case scheduled for trial in June 2025[150](index=150&type=chunk) - The company has received inquiries from Medicare, the Department of Justice, and the FDA regarding its previous COVID-19 testing products and services, which have since been discontinued[151](index=151&type=chunk)[152](index=152&type=chunk) [Item 1A. Risk Factors](index=47&type=section&id=Item%201A.%20Risk%20Factors) A new material risk factor is disclosed regarding the company's failure to comply with Nasdaq's minimum bid price requirement, potentially leading to delisting and triggering a 'Fundamental Change' under its convertible note indentures, which could accelerate debt repayment - On May 1, 2025, the company received a notification from Nasdaq for failing to maintain a minimum closing bid price of **$1.00** for 30 consecutive trading days[220](index=220&type=chunk) - The company has 180 calendar days from the notification to regain compliance by maintaining a closing bid price of at least **$1.00** for a minimum of ten consecutive trading days[220](index=220&type=chunk) - A potential delisting would negatively affect the stock price, impair trading ability, and constitute a 'Fundamental Change' under the indentures for the 2026 and 2029 Notes, which could lead to accelerated debt obligations[222](index=222&type=chunk)[223](index=223&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=48&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company reports that there were no unregistered sales or repurchases of its equity securities during the three-month period ended March 31, 2025 - There were no unregistered sales of equity securities by the company during the three months ended March 31, 2025[226](index=226&type=chunk) - There were no repurchases of equity securities by the company during the three months ended March 31, 2025[227](index=227&type=chunk) [Item 3. Defaults Upon Senior Securities](index=48&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) The company reports that there have been no defaults upon its senior securities - None[229](index=229&type=chunk) [Item 4. Mine Safety Disclosures](index=48&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the company - Not applicable[230](index=230&type=chunk) [Item 5. Other Information](index=48&type=section&id=Item%205.%20Other%20Information) The company reports no other material information and states that no director or executive officer adopted or terminated a Rule 10b5-1 trading arrangement during the first quarter of 2025 - During the three months ended March 31, 2025, no director or executive officer of the Company adopted or terminated a 'Rule 10b5-1 trading arrangement' or 'non-Rule 10b5-1 trading arrangement'[233](index=233&type=chunk) [Item 6. Exhibits](index=49&type=section&id=Item%206.%20Exhibits) This section lists the exhibits filed with the Form 10-Q, including certifications by the principal executive officer and principal financial officer as required by the Sarbanes-Oxley Act of 2002, and the Inline XBRL data files - The exhibits filed with this report include CEO and CFO certifications pursuant to Sarbanes-Oxley Act Sections 302 and 906, as well as Inline XBRL documents[235](index=235&type=chunk)

Core Points - LivePerson, Inc. held its Q1 2025 Earnings Conference Call on May 7, 2025, with key participants including CEO John Sabino and CFO John Collins [1][3] - The call included forward-looking statements regarding the company's future results, which are based on current expectations and assumptions [3][4] - The company provided a reconciliation of GAAP to non-GAAP financial measures in its earnings press release [5]

LivePerson (LPSN) Q1 2025 Earnings Call May 07, 2025 05:00 PM ET Company Participants Jon Perachio - Vice President, Investor RelationsJohn Sabino - CEOJohn Collins - CFO & COO Conference Call Participants Ryan Macdonald - Senior AnalystMike Latimore - Managing Director & Senior Research Analyst Operator Good afternoon, ladies and gentlemen. Thank you for standing by. Welcome to First Quarter twenty twenty five Earnings Conference Call. My name is Jamie and I will be your conference operator today. At this ...

Earnings Call Supplemental Slides First Quarter 2025 John Sabino, Chief Executive Officer John Collins, Chief Financial Officer and Chief Operating Officer May 7, 2025 Disclaimer This presentation as well as the associated earnings release and earnings call contain and will contain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended and Section 21E of the Securities Exchange Act of 1934, as amended. You can generally identify forward-looking statements by o ...

[First Quarter 2025 Financial Results and Business Highlights](index=1&type=section&id=LivePerson%20Announces%20First%20Quarter%202025%20Financial%20Results) LivePerson's Q1 2025 results show a revenue decline to $64.7 million, a narrowed net loss, and strategic customer expansions [Q1 2025 Financial Performance](index=1&type=section&id=First%20Quarter%20Highlights) LivePerson's Q1 2025 revenue decreased to $64.7 million, while net loss significantly narrowed to $14.1 million, with cash at $176.3 million Q1 2025 Key Financial Metrics vs. Q1 2024 (in millions) | Metric | Q1 2025 | Q1 2024 | Change | | :--- | :--- | :--- | :--- | | Total Revenue | $64.7M | $85.1M | -24.0% | | Net Loss | $(14.1)M | $(35.6)M | Improved | | Net Loss Per Share | $(0.15) | $(0.40) | Improved | | Adjusted EBITDA | $0.2M | $0.5M | -60.0% | | Adjusted Operating Loss | $(5.4)M | $(7.7)M | Improved | Disaggregated Revenue (Three Months Ended March 31, in thousands) | Revenue Source | 2025 | 2024 | | :--- | :--- | :--- | | Hosted services | $55,134 | $71,495 | | Professional services | $9,566 | $13,654 | | **Total revenue** | **$64,700** | **$85,149** | - The company's cash balance was **$176.3 million** at March 31, 2025, compared to **$183.2 million** at December 31, 2024[9](index=9&type=chunk) [Business and Customer Update](index=1&type=section&id=Customer%20Expansion) LivePerson secured 50 deals in Q1, including new logos and expansions, while ARPC grew 2.4% and strategic AI integrations advanced - Signed **50 deals** in Q1, comprising **45** with existing customers and **5** with new customers[4](index=4&type=chunk)[6](index=6&type=chunk) - Trailing-twelve-months average revenue per enterprise and mid-market customer (ARPC) grew **2.4%** to **$640,000** from **$625,000** in the prior-year period[4](index=4&type=chunk) - Key customer deals included expansions with IBM and one of the world's largest banks, and new logos such as one of Canada's largest retailers[6](index=6&type=chunk) - The company is advancing strategic partnerships, with a planned launch of an integration with Amazon Connect in the second quarter, noting growing enterprise demand for AI agents[5](index=5&type=chunk) [Financial Outlook](index=2&type=section&id=Financial%20Expectations) LivePerson provides Q2 and full-year 2025 guidance, anticipating continued revenue decline but stable adjusted EBITDA [Second Quarter 2025 Guidance](index=2&type=section&id=Second%20Quarter%202025) LivePerson projects Q2 2025 revenue between $57 million and $60 million, with an adjusted EBITDA loss ranging from $(4) million to $(2) million Q2 2025 Guidance (in millions) | Metric | Guidance | | :--- | :--- | | Revenue | $57 - $60 | | Revenue growth (YoY) | (29)% - (25)% | | Adjusted EBITDA | $(4) - $(2) | | Adjusted EBITDA margin (%) | (7.0)% - (3.3)% | - Recurring revenue is expected to constitute **93%** of total revenue for the second quarter[11](index=11&type=chunk) [Full Year 2025 Guidance](index=2&type=section&id=Full%20Year%202025) LivePerson reaffirms full-year 2025 revenue guidance of $240 million to $255 million and adjusted EBITDA between $(14) million and $0 million Full Year 2025 Guidance (in millions) | Metric | Guidance | | :--- | :--- | | Revenue | $240 - $255 | | Revenue growth (YoY) | (23)% - (18)% | | Adjusted EBITDA | $(14) - $0 | | Adjusted EBITDA margin (%) | (5.8)% - 0.0% | - The full-year expectations are unchanged from the previous earnings release, with recurring revenue expected to represent **93%** of total revenue for the full year[12](index=12&type=chunk) [Consolidated Financial Statements](index=6&type=section&id=Consolidated%20Financial%20Statements) This section presents LivePerson's detailed statements of operations, cash flows, and balance sheets for the reporting period [Condensed Consolidated Statements of Operations](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) Q1 2025 operations show revenue decreased to $64.7 million, total costs significantly reduced, leading to a narrowed net loss of $(14.1) million Statement of Operations Summary (in thousands) | Line Item | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Revenue | $64,700 | $85,149 | | Total costs, expenses and other | $81,644 | $121,513 | | Loss from operations | $(16,944) | $(36,364) | | Net loss | $(14,133) | $(35,631) | | Net loss per share, basic | $(0.15) | $(0.40) | [Condensed Consolidated Statements of Cash Flows](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Q1 2025 cash flows show net cash used in operating activities of $(3.1) million, reduced investing outflows, and a $7.0 million decrease in cash to $176.3 million Cash Flow Summary (in thousands) | Activity | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net cash (used in) provided by operating activities | $(3,096) | $1,099 | | Net cash used in investing activities | $(4,145) | $(12,710) | | Net cash used in financing activities | $(26) | $(72,697) | | **Net decrease in cash and cash equivalents** | **$(6,983)** | **$(83,908)** | | **Cash and cash equivalents - end of period** | **$176,254** | **$129,017** | [Condensed Consolidated Balance Sheets](index=11&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) As of March 31, 2025, total assets were $596.2 million, total liabilities $671.2 million, resulting in a stockholders' equity deficit of $(74.9) million Balance Sheet Summary (in thousands) | Account | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Cash and cash equivalents | $176,254 | $183,237 | | Total current assets | $221,754 | $231,224 | | **Total assets** | **$596,220** | **$607,778** | | Total current liabilities | $134,202 | $139,940 | | Convertible senior notes | $528,858 | $527,070 | | **Total liabilities** | **$671,164** | **$675,094** | | **Total stockholders' equity** | **$(74,944)** | **$(67,316)** | [Reconciliation of Non-GAAP Financial Measures](index=8&type=section&id=Reconciliation%20of%20Non-GAAP%20Financial%20Information%20to%20GAAP) This section reconciles GAAP financial metrics to non-GAAP measures like Adjusted EBITDA, Adjusted Operating Loss, and Free Cash Flow [Reconciliation of Adjusted EBITDA and Adjusted Operating Loss](index=8&type=section&id=Reconciliation%20of%20Adjusted%20EBITDA%20and%20Adjusted%20Operating%20Loss) Q1 2025 GAAP net loss of $(14.1) million was reconciled to Adjusted EBITDA of $0.2 million, with key adjustments including litigation costs and warrant fair value changes Reconciliation of GAAP Net Loss to Adjusted EBITDA (in thousands) | Description | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | **GAAP net loss** | **$(14,133)** | **$(35,631)** | | Add: Interest, taxes, D&A, etc. | $14,300 | $19,214 | | Add: Litigation, restructuring, SBC, etc. | $11,183 | $18,252 | | Less: Change in fair value of warrants | $(8,824) | $0 | | **Adjusted EBITDA** | **$167** | **$477** | - Litigation, consulting, and other employee costs were a significant adjustment at **$5.2 million** in Q1 2025, up from **$3.8 million** in Q1 2024[30](index=30&type=chunk)[32](index=32&type=chunk) [Calculation of Free Cash Flow](index=9&type=section&id=Calculation%20of%20Free%20Cash%20Flow) Q1 2025 free cash flow was an outflow of $(6.9) million, an improvement from the prior year, derived from operating activities and capital expenditures Free Cash Flow Calculation (in thousands) | Description | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net cash (used in) provided by operating activities | $(3,096) | $1,099 | | Purchases of property and equipment | $(3,759) | $(11,501) | | **Total Free Cash Flow** | **$(6,855)** | **$(10,402)** | [Reconciliation of Non-GAAP Cost and Expense Items](index=10&type=section&id=Reconciliation%20of%20Non-GAAP%20Cost%20and%20Expense%20Items) This section details adjustments to non-GAAP cost and expense items, notably reducing GAAP general and administrative expenses by excluding litigation and stock-based compensation Q1 2025 GAAP vs. Non-GAAP Expenses (in thousands) | Expense Category | GAAP | Non-GAAP | | :--- | :--- | :--- | | Cost of revenue | $18,218 | $17,922 | | Sales and marketing | $23,485 | $22,107 | | General and administrative | $16,784 | $9,842 | | Product development | $16,034 | $14,662 |

Financial Performance - Total revenue for the first quarter of 2025 was $64.7 million, a decrease of 24.0% compared to the same period last year, primarily due to customer cancellations and downsells [2][5] - Net loss for the first quarter of 2025 was $14.1 million, or $0.15 per share, compared to a net loss of $35.6 million, or $0.40 per share, for the first quarter of 2024 [5][24] - Adjusted EBITDA for the first quarter of 2025 was $0.2 million, down from $0.5 million in the first quarter of 2024 [6][24] Customer Activity - The company signed a total of 50 deals in the first quarter, including 45 expansions and renewals and 5 new customers [3][5] - The trailing-twelve-months average revenue per enterprise and mid-market customer increased by 2.4% to $640,000 from approximately $625,000 in the prior year [3] Strategic Initiatives - The CEO highlighted the company's "innovation without disruption" approach, which allows customers to adopt AI and digital capabilities seamlessly [4] - The company is advancing strategic partnerships, including a planned integration with Amazon Connect in the second quarter [4] Financial Guidance - For the second quarter of 2025, total revenue is expected to range from $57 million to $60 million, representing a year-over-year decline of 29% to 25% [11] - For the full year 2025, total revenue is projected to be between $240 million and $255 million, reflecting a year-over-year decline of 23% to 18% [12] Cash Position - The company's cash balance was $176.3 million at March 31, 2025, down from $183.2 million at December 31, 2024 [9][32]

Core Viewpoint - LivePerson, Inc. is set to release its first quarter financial results on May 7, 2025, with a conference call scheduled for the same day to discuss the results [1]. Group 1: Financial Results Announcement - The planned release of the first quarter financial results will occur after market close on May 7, 2025 [1]. - CEO John Sabino and CFO & COO John Collins will host a conference call at 5:00 p.m. Eastern Time on the same day [1]. Group 2: Conference Call Details - The conference call will be available via live simulcast on the investor relations section of LivePerson's website [2]. - Participants can join the call by dialing in five to ten minutes before the start time, with specific numbers provided for domestic and international callers [2]. - A replay of the teleconference will be available approximately three hours after the call until May 21, 2025, with access details provided [2]. Group 3: Company Overview - LivePerson is recognized as a leader in enterprise conversational AI and digital transformation, serving major brands like HSBC, Chipotle, and Virgin Media [3]. - The company facilitates nearly a billion conversational interactions monthly, offering data analytics and safety tools to enhance business outcomes [3]. - LivePerson has been named the 1 Most Innovative AI Company in the world by Fast Company [3].

Core Insights - LivePerson has been recognized as a Leader in multiple categories by G2, including AI Agents, Chatbots, Conversational Marketing, Bot Platforms, Live Chat, and Customer Self-Service, based on real customer reviews [1][2][3] Company Overview - LivePerson (NASDAQ: LPSN) is a prominent provider of enterprise conversational AI and digital transformation solutions, serving major brands like HSBC, Chipotle, and Virgin Media [5] - The company facilitates nearly a billion conversational interactions monthly, leveraging rich data analytics and safety tools to enhance business outcomes [5] Recognition and Achievements - The Leader designation from G2 is awarded to vendors that consistently receive high ratings from users and demonstrate significant market presence [2] - LivePerson's CEO, John Sabino, expressed pride in the recognition, highlighting the company's commitment to delivering connected and personalized experiences [3] Product Offerings - LivePerson's solutions include AI Agents, Chatbots, Conversational Marketing, Bot Platforms, Live Chat, and Customer Self-Service, which enable businesses to engage with customers in a human-like manner [7]

Customer Engagement and AI Solutions - LivePerson powers over one billion conversational interactions each month, enhancing customer engagement and driving revenue growth for brands[16]. - The LivePerson Platform enables agents to manage dozens of messaging conversations simultaneously, achieving labor efficiency gains of at least 200% compared to voice agents[21]. - The company’s AI-driven solutions have been shown to increase customer satisfaction scores by double-digit percentage points and improve sales conversion rates by double-digit percentages[29]. - LivePerson's Conversational AI, developed from billions of interactions, allows for real-time intent recognition and classification, enhancing customer service and marketing automation[36]. - The Conversational Flywheel framework helps brands improve customer engagement by analyzing conversational data and automating responses, leading to increased first-contact resolution rates[32]. - The platform supports billions of conversations across various industries, utilizing machine learning models to enhance conversational understanding and generative AI customization[53]. Market Position and Strategy - The company has established itself as a market leader in AI-enhanced customer interaction, focusing on technological innovation and enterprise-class capabilities[52]. - The company targets key markets including telecommunications, financial services, and healthcare, with a focus on expanding its presence in the U.S., Canada, Latin America, Europe, and APAC[39]. - LivePerson's cloud-based SaaS model offers lower up-front costs and faster implementation, providing significant advantages over traditional on-premise software[22]. - The platform integrates with over 40 APIs, facilitating robust integration into back-end systems and enabling custom program development[18]. - No single customer accounted for or exceeded 10% of total revenue for the years 2024, 2023, or 2022, indicating a diversified customer base[40]. Financial Performance and Risks - The company reported an accumulated deficit of $991.3 million as of December 31, 2024, indicating potential future losses[72]. - The company relies heavily on monthly and interaction-based fees for revenue, which may lead to revenue variability based on customer interactions[76]. - Customer retention is critical, as customers typically subscribe for a twelve-month term and can terminate with 30 to 90 days' notice, impacting revenue if significant customers leave[75]. - The company experiences significant fluctuations in quarterly revenue and operating results, influenced by customer demand and sales cycles[107]. - The sales cycle for the company's products can take several months, particularly for enterprise customers, complicating revenue predictions[98]. - The company has historically seen a disproportionate percentage of sales occur in the last month of each quarter, increasing revenue prediction uncertainty[99]. Technology and Infrastructure - The company is migrating its technology infrastructure to the public cloud, enhancing scalability and service quality[56]. - The transition to a public cloud infrastructure is underway, but it poses risks such as service interruptions, data loss, and increased costs, which could negatively impact operations[91]. - The company is investing in infrastructure, research and development, and customer support to scale operations, which will increase the cost base and may affect future profitability[78]. Competition and Market Challenges - The company faces competition from various technology providers, including eGain, Genesys, and Salesforce.com, which could impact market share[58]. - The competitive landscape for mobile and online business messaging is intensifying, with significant pressure from existing competitors and new entrants[123]. - Economic downturns in key industries such as telecommunications and financial services could adversely affect the company's business and financial condition[129]. Regulatory and Compliance Risks - The company is subject to various regulatory risks, including privacy and data protection laws, which could adversely affect its business operations[9]. - The company must comply with evolving U.S. and international privacy laws, which could increase operational complexity and costs, potentially leading to legal proceedings[162]. - The company is subject to the E.U. GDPR, which imposes fines up to €20 million or 4% of global annual revenue for noncompliance[163]. - The company faces potential penalties and operational impacts due to evolving U.S. state privacy laws, with comprehensive laws expected to be enacted between 2024 and 2026[168]. - Regulatory scrutiny of AI is increasing, which may necessitate modifications to AI-driven functionalities in the company's products and services[178]. Cybersecurity and Data Protection - The company is dependent on maintaining the security of its systems and those of third-party providers, with potential risks from cyber-attacks and data breaches[134]. - The transition to a remote workforce post-COVID-19 may increase cybersecurity risks, particularly from countries with higher rates of cybercrime[137]. - The company’s insurance coverage for cybersecurity risks may be insufficient to cover all losses from potential breaches[143]. - Security vulnerabilities and failures in service reliability could lead to significant legal and financial exposure, damaging the company's reputation[138]. Intellectual Property and Innovation - The company has a portfolio of patents and regularly files applications to protect its intellectual property, which is crucial for its business strategy[205]. - The company is investing in AI technologies, which are expected to grow, but faces challenges related to data quality and ethical implications[210]. - The evolving regulatory landscape regarding AI may increase operational costs and compliance risks, potentially affecting the adoption of AI solutions[211]. Legal and Operational Liabilities - Ongoing actions and potential legal liabilities could materially affect the company's financial condition and operational results[9]. - Legal liabilities may arise from the services provided through the company's technology platforms, which could result in negative publicity and significant defense costs[213]. - The company faces risks related to the technological capabilities of its services, including potential system failures and degraded response times due to increased customer interactions[154].