Part I [Business](index=5&type=section&id=Item%201.%20Business) LivePerson leads in AI-powered digital customer conversations, leveraging its Conversational Cloud platform to enhance efficiency and personalization - LivePerson positions itself as the enterprise leader in digital customer conversations, using its AI-powered Conversational Cloud platform to manage over **one billion connections monthly**[16](index=16&type=chunk) - The company's strategy involves a "tango" of humans, bots, and LLMs to improve agent efficiency and customer experience, leveraging a vast dataset of **billions of conversations** to train its AI[19](index=19&type=chunk)[34](index=34&type=chunk) - Key target industries include telecommunications, financial services, travel/hospitality, technology, healthcare, automotive, and consumer/retail[39](index=39&type=chunk)[46](index=46&type=chunk) - No single customer accounted for more than **10%** of total revenue in 2023, 2022, or 2021[40](index=40&type=chunk) - As of December 31, 2023, the company held **286 issued patents** and had **307 pending patents** globally, covering areas like Conversational AI, messaging, and analytics[58](index=58&type=chunk) - The company had approximately **1,095 full-time employees** worldwide as of December 31, 2023[62](index=62&type=chunk) [Risk Factors](index=12&type=section&id=Item%201A.%20Risk%20Factors) The company faces significant financial, operational, competitive, and regulatory risks, including a history of losses and substantial debt - The company has a history of losses, with an accumulated deficit of **$857.0 million** as of December 31, 2023, and may incur future losses[70](index=70&type=chunk)[105](index=105&type=chunk) - There is a significant risk related to refinancing the **$517.5 million** in 0% Convertible Notes due in December 2026, with no assurance that financing will be available on reasonable terms[92](index=92&type=chunk) - The business is highly dependent on retaining existing customers and attracting new ones, as contracts are typically for one year and can sometimes be terminated with 30-90 days' notice[76](index=76&type=chunk) - The markets for AI-enhanced customer interaction are **intensely competitive**, with rivals including Genesys, Oracle, Salesforce.com, and Twilio, as well as large tech companies like Meta and Google[49](index=49&type=chunk)[118](index=118&type=chunk)[119](index=119&type=chunk) - Failures or security breaches in systems, including cyber-attacks, could harm the business. The company is subject to numerous evolving U.S. and international laws regarding data privacy, data protection, and AI, which could increase costs and liability[71](index=71&type=chunk)[128](index=128&type=chunk)[153](index=153&type=chunk) - A substantial portion of product development staff is located in **Israel**, making operations vulnerable to political, economic, and military conditions in the region[217](index=217&type=chunk) [Unresolved Staff Comments](index=43&type=section&id=Item%201B.%20Unresolved%20Staff%20Comments) The company has no unresolved staff comments to report - None[243](index=243&type=chunk) [Cybersecurity](index=43&type=section&id=Item%201C.%20Cybersecurity) LivePerson maintains a comprehensive cybersecurity program with Board oversight, regularly assessing and mitigating threats - The company maintains a cybersecurity program managed by a team led by the **Chief Security Officer (CSO)**, with oversight from the **Board of Directors' Cybersecurity and Technology Committee**[244](index=244&type=chunk)[251](index=251&type=chunk) - The program includes regular risk assessments, policies aligned with ISO 27001 and PCI DSS, endpoint detection, firewalls, employee training, and a Security Incident Response Plan[246](index=246&type=chunk) - The company engages external parties for penetration testing, threat hunting, cyber threat intelligence, and audits against standards like SOC 2, ISO 27001, and PCI[247](index=247&type=chunk)[248](index=248&type=chunk) - As of the report date, the company is **not aware of any cybersecurity threats that have materially affected** or are reasonably likely to materially affect its business, strategy, or financial condition[249](index=249&type=chunk) [Properties](index=45&type=section&id=Item%202.%20Properties) LivePerson operates with a remote workforce, headquartered in New York City, with leased data centers globally - The company's headquarters are in **New York City**, but it primarily operates with a **globally distributed, remote workforce**[252](index=252&type=chunk) - Data centers are leased in the **United States, Europe, and Australia**[253](index=253&type=chunk) [Legal Proceedings](index=45&type=section&id=Item%203.%20Legal%20Proceedings) The company is involved in multiple legal proceedings, including stockholder class actions and governmental inquiries - The company is subject to a **stockholder class action** (Damri v. LivePerson) alleging violations of federal securities laws related to 2022 financial disclosures[535](index=535&type=chunk) - **Starboard Value LP** filed a lawsuit in February 2024 alleging common law fraud and fraudulent inducement related to the settlement of its 2022 proxy contest[538](index=538&type=chunk) - The company and its subsidiary WildHealth have been subject to **governmental inquiries** regarding prior COVID-19 testing services. A **Medicare payment suspension was terminated**, and reimbursements were released in late 2023[539](index=539&type=chunk)[540](index=540&type=chunk) [Mine Safety Disclosures](index=45&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the company's operations - Not applicable[255](index=255&type=chunk) Part II [Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities](index=46&type=section&id=Item%205.%20Market%20for%20Registrant%27s%20Common%20Equity%2C%20Related%20Stockholder%20Matters%20and%20Issuer%20Purchases%20of%20Equity%20Securities) LivePerson's common stock trades on Nasdaq and TASE, with no history or plans for cash dividends - The company's common stock trades on the **Nasdaq (LPSN)** and the **Tel Aviv Stock Exchange (LPSN TA)**[256](index=256&type=chunk) - The company has **not paid any cash dividends** since its inception and does not anticipate paying any in the foreseeable future[257](index=257&type=chunk) - There were **no repurchases** of the Company's equity securities during the three months ended December 31, 2023[258](index=258&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=47&type=section&id=Item%207.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Revenue declined by 22% in 2023, but net loss improved due to cost reductions, while liquidity decreased from note repurchases [Results of Operations](index=49&type=section&id=Results%20of%20Operations) Revenue decreased by 22% in 2023, but net loss significantly improved due to reduced operating expenses and a gain on divestiture Consolidated Statements of Operations Summary | Financial Metric | 2023 (in thousands USD) | 2022 (in thousands USD) | 2021 (in thousands USD) | YoY Change (2022-2023) | | :--- | :--- | :--- | :--- | :--- | | **Revenue** | **$401,983** | **$514,800** | **$469,624** | **(22)%** | | Cost of revenue | $142,823 | $184,699 | $156,880 | (23)% | | Sales and marketing | $125,677 | $214,027 | $165,421 | (41)% | | General and administrative | $91,619 | $120,625 | $76,757 | (24)% | | Product development | $124,792 | $193,688 | $158,390 | (36)% | | Impairment of goodwill | $11,895 | $0 | $0 | N/A | | Restructuring costs | $22,664 | $19,967 | $3,397 | 14% | | **Loss from operations** | **($111,375)** | **($221,884)** | **($93,266)** | **50%** | | **Net loss** | **($100,435)** | **($225,747)** | **($124,974)** | **55%** | | **Net loss per share (Basic & Diluted)** | **($1.28)** | **($3.03)** | **($1.80)** | **58%** | - Revenue decreased by **22%** in 2023, primarily from a **$79.5 million** drop in hosted services and a **$33.3 million** drop in Professional Services. The sale of the Kasamba (Consumer) segment also contributed to the decline[279](index=279&type=chunk)[280](index=280&type=chunk) - The company recorded a non-cash goodwill impairment charge of **$11.9 million** related to the WildHealth reporting unit in Q3 2023, driven by slower growth and reduced investment plans[274](index=274&type=chunk)[304](index=304&type=chunk) - Restructuring costs increased to **$22.7 million** in 2023, up from **$20.0 million** in 2022, including **$5.7 million** in IT infrastructure contract termination costs and costs related to headcount reduction enabled by LLM efficiencies[300](index=300&type=chunk) [Liquidity and Capital Resources](index=54&type=section&id=Liquidity%20and%20Capital%20Resources) Cash decreased to $212.9 million due to note repurchases, with an accumulated deficit of $857.0 million, and plans to refinance 2026 notes Cash Flow Summary | Cash Flow Activity | 2023 (in thousands USD) | 2022 (in thousands USD) | | :--- | :--- | :--- | | Net cash (used in) provided by operating activities | $(19,765) | $(62,101) | | Net cash used in investing activities | $(18,842) | $(56,860) | | Net cash (used in) provided by financing activities | $(151,142) | $1,618 | - Cash and cash equivalents decreased by **$179.3 million** to **$212.9 million** at year-end 2023, primarily due to the cash repurchase of **$157.5 million** in principal of the 2024 Notes for approximately **$149.7 million**[313](index=313&type=chunk) - The company has an accumulated deficit of approximately **$857.0 million** as of December 31, 2023[318](index=318&type=chunk) - Management plans to **refinance the 2026 Notes** (due December 2026) on or prior to their maturity and is currently reviewing its capital structure to achieve this[319](index=319&type=chunk) - As of December 31, 2023, the company had non-cancellable unconditional purchase obligations of approximately **$36.0 million**, primarily for IT infrastructure and cloud services[326](index=326&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=56&type=section&id=Item%207A.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company faces foreign currency risk, particularly from NIS exposure, and manages credit losses, while interest rate and inflation risks are minimal - The company has **foreign currency risk**, particularly from its **Israeli operations**. A 1% change in the U.S. dollar vs. the New Israeli Shekel (NIS) would impact income before taxes by approximately **$0.3 million**[328](index=328&type=chunk) - The allowance for credit losses on accounts receivable was **$9.3 million** as of December 31, 2023, a slight increase from **$9.2 million** at the end of 2022[330](index=330&type=chunk) - Interest rate risk is considered **minimal** as investments consist of cash and cash equivalents[332](index=332&type=chunk) [Financial Statements and Supplementary Data](index=58&type=section&id=Item%208.%20Financial%20Statements%20and%20Supplementary%20Data) This section presents the audited consolidated financial statements for 2023, with an unqualified auditor's opinion [Consolidated Balance Sheets](index=61&type=section&id=Consolidated%20Balance%20Sheets) Total assets decreased to $835.5 million, driven by reduced cash and convertible notes, impacting stockholders' equity Consolidated Balance Sheet Summary (in thousands USD) | Account | Dec 31, 2023 | Dec 31, 2022 | | :--- | :--- | :--- | | **Total current assets** | **$321,708** | **$533,466** | | Goodwill | $285,631 | $296,214 | | **Total assets** | **$835,513** | **$1,088,940** | | **Total current liabilities** | **$267,549** | **$251,558** | | Convertible senior notes, net | $511,565 | $737,423 | | **Total liabilities** | **$787,375** | **$1,020,852** | | **Total stockholders' equity** | **$48,138** | **$68,088** | [Consolidated Statements of Operations](index=62&type=section&id=Consolidated%20Statements%20of%20Operations) Revenue declined 22% to $402.0 million, but net loss significantly improved to $100.4 million due to cost reductions Statement of Operations Highlights (in thousands USD, except per share data) | Metric | 2023 | 2022 | 2021 | | :--- | :--- | :--- | :--- | | Revenue | $401,983 | $514,800 | $469,624 | | Loss from operations | $(111,375) | $(221,884) | $(93,266) | | Net loss | $(100,435) | $(225,747) | $(124,974) | | Net loss per share (basic and diluted) | $(1.28) | $(3.03) | $(1.80) | [Consolidated Statements of Cash Flows](index=65&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) Net cash used in operations improved to $19.8 million, but financing activities led to a $151.1 million cash outflow Cash Flow Summary (in thousands USD) | Cash Flow Activity | 2023 | 2022 | 2021 | | :--- | :--- | :--- | :--- | | Net cash (used in) provided by operating activities | $(19,765) | $(62,101) | $3,247 | | Net cash used in investing activities | $(18,842) | $(56,860) | $(140,249) | | Net cash (used in) provided by financing activities | $(151,142) | $1,618 | $11,843 | | Net decrease in cash, cash equivalents, and restricted cash | $(189,284) | $(121,323) | $(130,620) | [Notes to Consolidated Financial Statements](index=67&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) Notes detail the Kasamba divestiture, goodwill impairment, note repurchases, restructuring charges, legal matters, and NOL carryforwards - The company divested its Consumer segment (Kasamba) on March 20, 2023, for cash proceeds of **$16.9 million** and a deferred payment of **$2.6 million**, resulting in a gain of **$17.6 million**. The company now operates as a **single reportable segment**[434](index=434&type=chunk)[574](index=574&type=chunk) - In March 2023, the company repurchased **$157.5 million** in principal of its 2024 Notes for **$149.7 million** in cash, recognizing a **$7.2 million** gain on debt extinguishment. As of Dec 31, 2023, **$72.5 million** of 2024 Notes and **$517.5 million** of 2026 Notes remain outstanding[467](index=467&type=chunk)[471](index=471&type=chunk) - A goodwill impairment charge of **$11.9 million** was recorded in Q3 2023 for the WildHealth reporting unit due to slower growth forecasts. An additional **$3.0 million** impairment was recorded for WildHealth's developed technology[442](index=442&type=chunk)[447](index=447&type=chunk) - The company has federal Net Operating Loss (NOL) carryforwards of approximately **$583.1 million** to offset future taxable income, though their use may be subject to limitations under Section 382[550](index=550&type=chunk) - In January 2024, the company adopted a **Tax Benefits Preservation Plan** (a "poison pill") to protect its NOLs from being impaired by an "ownership change"[577](index=577&type=chunk) [Changes in and Disagreements With Accountants on Accounting and Financial Disclosure](index=102&type=section&id=Item%209.%20Changes%20in%20and%20Disagreements%20With%20Accountants%20on%20Accounting%20and%20Financial%20Disclosure) This item is not applicable to the company - Not applicable[580](index=580&type=chunk) [Controls and Procedures](index=102&type=section&id=Item%209A.%20Controls%20and%20Procedures) Disclosure controls were effective, and a prior material weakness in internal control over financial reporting has been remediated - Management concluded that disclosure controls and procedures were **effective** as of December 31, 2023[581](index=581&type=chunk) - A material weakness in internal control over financial reporting identified as of December 31, 2022, has been **remediated** as of December 31, 2023[582](index=582&type=chunk)[584](index=584&type=chunk) - Remediation actions included enhancing policies for journal entries, improving review of complex transactions, and strengthening segregation of duties[584](index=584&type=chunk) - The independent auditor, BDO USA, P.C., issued an **unqualified opinion** on the effectiveness of the company's internal control over financial reporting as of December 31, 2023[586](index=586&type=chunk)[591](index=591&type=chunk) [Other Information](index=106&type=section&id=Item%209B.%20Other%20Information) No other information or Rule 10b5-1 trading arrangements were reported for Q4 2023 - **No director or executive officer adopted or terminated a Rule 10b5-1 trading arrangement** in Q4 2023[598](index=598&type=chunk) Part III [Directors, Executive Officers and Corporate Governance](index=106&type=section&id=Item%2010.%20Directors%2C%20Executive%20Officers%20and%20Corporate%20Governance) Information on directors, executive officers, and corporate governance is incorporated by reference from the 2024 proxy statement - Required information is **incorporated by reference** from the definitive proxy statement for the 2024 Annual Meeting of Stockholders[601](index=601&type=chunk) [Executive Compensation](index=106&type=section&id=Item%2011.%20Executive%20Compensation) Executive compensation information is incorporated by reference from the 2024 proxy statement - Required information is **incorporated by reference** from the definitive proxy statement for the 2024 Annual Meeting of Stockholders[604](index=604&type=chunk) [Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters](index=106&type=section&id=Item%2012.%20Security%20Ownership%20of%20Certain%20Beneficial%20Owners%20and%20Management%20and%20Related%20Stockholder%20Matters) Security ownership information is incorporated by reference from the 2024 proxy statement - Required information is **incorporated by reference** from the definitive proxy statement for the 2024 Annual Meeting of Stockholders[605](index=605&type=chunk) [Certain Relationships and Related Transactions, and Director Independence](index=106&type=section&id=Item%2013.%20Certain%20Relationships%20and%20Related%20Transactions%2C%20and%20Director%20Independence) Related party transactions and director independence information is incorporated by reference from the 2024 proxy statement - Required information is **incorporated by reference** from the definitive proxy statement for the 2024 Annual Meeting of Stockholders[606](index=606&type=chunk) [Principal Accountant Fees and Services](index=106&type=section&id=Item%2014.%20Principal%20Accountant%20Fees%20and%20Services) Principal accountant fees and services information is incorporated by reference from the 2024 proxy statement - Required information is **incorporated by reference** from the definitive proxy statement for the 2024 Annual Meeting of Stockholders[607](index=607&type=chunk) Part IV [Exhibits and Financial Statement Schedules](index=107&type=section&id=Item%2015.%20Exhibits%20and%20Financial%20Statement%20Schedules) This section lists all financial statements, schedules, and exhibits filed with the Form 10-K - This section lists **all financial statements, schedules, and exhibits** filed with the Form 10-K[609](index=609&type=chunk) [Form 10-K Summary](index=107&type=section&id=Item%2016.%20Form%2010-K%20Summary) No Form 10-K summary is provided by the company - None[609](index=609&type=chunk)

Financial Data and Key Metrics Changes - Total revenue for Q4 2023 was $95.5 million, exceeding the midpoint of guidance, with a year-over-year decline in Hosted Services revenue of 7% [41][66] - B2B core recurring revenue was $83 million, up 2% year-over-year, driven by customer expansions [41] - Adjusted EBITDA for Q4 was $3.7 million, slightly above the midpoint of guidance [66] - Net revenue retention (NRR) was 95% in Q4, down from 98% in Q3, indicating challenges in customer retention [68] Business Line Data and Key Metrics Changes - Professional Services revenue was $16.8 million, down 41% year-over-year, primarily due to the completion of a major engagement [41] - The company signed a total of 62 deals in Q4, including 46 expansions and renewals, with total bookings up 33% year-over-year [64] Market Data and Key Metrics Changes - U.S. revenue was $68.3 million, representing 72% of total revenue, while international revenue was $27.2 million, or 28% [67] - The financial services vertical was a primary driver of strong results in Q4, with significant renewals from major banks and financial institutions [64] Company Strategy and Development Direction - The company is refocusing its go-to-market strategies, product development, and strategic partnerships to unlock a new phase of growth [4][6] - A key priority is strengthening the capital structure to support strategic initiatives and improve financial performance [8][18] - The strategy includes enhancing product integration and orchestration capabilities to avoid vendor lock-in and improve customer flexibility [15][34] Management's Comments on Operating Environment and Future Outlook - Management acknowledged that the lack of a robust customer success motion has led to increased cancellations and down-sells [69][96] - The company is committed to improving customer engagement and retention through a more consultative customer success approach [104] - Future guidance reflects a significant transformation, with expectations for revenue in the range of $300 million to $315 million for the full year [44] Other Important Information - The company is actively marketing the sale of its non-core asset, Wild Health, which contributed $3.4 million to total revenue in Q4 [38][66] - The company plans to settle a $73 million balance of notes maturing in 2024 using cash from the balance sheet [36] Q&A Session Summary Question: Can you repeat the bookings growth commentary? - Total bookings in Q4 were up 33% year-over-year and 27% sequentially, marking the highest bookings quarter since Q3 2022 [48] Question: What drove the renewal challenges over the past year? - The cancellations were primarily due to a lack of robust customer success engagement and corporate instability affecting customer satisfaction [52][96] Question: Can you elaborate on potential changes to pricing and packaging? - The company aims to simplify pricing and packaging to enhance customer experience and retention, making it easier for clients to utilize the full suite of products [85][104]

| --- | --- | |-------------------------------------------------------------------------------------------------------------------------------------------------------------|-------| | | | | | | | | | | | | | Fourth Quarter 2023 | | | Earnings Call Supplemental Slides | | | John Sabino, Chief Executive Officer John Collins, Chief Financial Officer and Chief Operating Officer Jon Perachio, Senior Director, Investor Relations | | | February 28, 2024 | | This presentation as well as the associated earnings rele ...

LivePerson Announces Fourth Quarter 2023 Financial Results -- Total Revenue of $95.5M, above the midpoint of our guidance range -- -- Adjusted EBITDA above the midpoint of our guidance range -- NEW YORK, February 28, 2024, -- LivePerson, Inc. (NASDAQ: LPSN) ("LivePerson" the "Company", "we" or "us"), the enterprise leader in digital customer conversations, today announced financial results for the fourth quarter ended December 31, 2023. Fourth Quarter Highlights Total revenue was $95.5 million for the fourt ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2023 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from __________ to __________. Commission File Number: 000-30141 LIVEPERSON, INC. (Exact name of registrant as specified in its charter) (State or other jurisd ...

LivePerson, Inc. (NASDAQ:LPSN) Q3 2023 Earnings Conference Call November 8, 2023 5:00 PM ET Company Participants Chad Cooper - Senior Vice President, Investor Relations John Collins - Interim Chief Executive Officer and Chief Financial Officer Conference Call Participants Ryan MacDonald - Needham Peter Levine - Evercore Zach Cummins - B. Riley Securities Mark Schappel - Loop Capital Markets Jeff Van - Craig Hallum Operator Good afternoon, ladies and gentlemen. Thank you for standing by. Welcome to LivePerso ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2023 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from __________ to __________. Commission File Number: 000-30141 LIVEPERSON, INC. (Exact name of registrant as specified in its charter) Delaware 13-3861628 (State ...

LivePerson, Inc. (NASDAQ:LPSN) Q2 2023 Earnings Conference Call August 8, 2023 5:00 PM ET Company Participants Chad Cooper - Senior Vice President, Investor Relations Rob LoCascio - Founder John Collins - Interim Chief Executive Officer & Chief Financial Officer Conference Call Participants Daniel Wang - Mizuho Securities Jeff Van Rhee - Craig-Hallum Capital Group Zach Cummins - B. Riley Securities Operator Good afternoon, ladies and gentlemen. Thank you for standing by. Welcome to LivePerson's Second Quart ...

Note 2: Quarterly Revenue by Geography excludes Kasamba revenue Second Quarter Financial & Operational Highlights (cont'd) Revenue Retention Rate for Recurring Revenue1 Below our target range of Average Revenue per Customer (ARPC) 2Q22 3Q22 4Q22 $505K$525K $545K 1Q23 $560K 2Q23 $575K Remaining Performance Obligation | --- | --- | --- | --- | |---------------------------------------------------------------------|------------------------------------------------------------------------------------------------- ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2023 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from __________ to __________. Commission File Number: 000-30141 LIVEPERSON, INC. (Exact name of registrant as specified in its charter) Delaware 13-3861628 (State ...