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, 2025 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 ...

Company Performance - LivePerson reported a quarterly loss of $0.11 per share, better than the Zacks Consensus Estimate of a loss of $0.20, and a significant improvement from a loss of $0.69 per share a year ago, resulting in an earnings surprise of +45.00% [1] - The company posted revenues of $59.6 million for the quarter ended June 2025, surpassing the Zacks Consensus Estimate by 2.19%, although this represents a decline from year-ago revenues of $79.88 million [2] - Over the last four quarters, LivePerson has exceeded consensus EPS estimates three times and topped consensus revenue estimates four times [2] Stock Performance - LivePerson shares have declined approximately 20.4% since the beginning of the year, contrasting with the S&P 500's gain of 8.6% [3] - The current consensus EPS estimate for the upcoming quarter is -$0.18 on revenues of $57.56 million, and for the current fiscal year, it is -$0.63 on revenues of $240.99 million [7] Industry Outlook - The Internet - Services industry, to which LivePerson belongs, is currently ranked in the top 38% of over 250 Zacks industries, indicating a favorable outlook compared to the bottom 50% [8] - Empirical research suggests a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can impact LivePerson's stock performance [5]

Financial Data and Key Metrics Changes - The company reported revenue of $59.6 million, which was above the midpoint of their guidance range [6][23] - Adjusted EBITDA was $2.9 million, exceeding the high end of the guidance range [6][23] - Full year revenue guidance was revised down to $235 million at the midpoint, a decrease of approximately 5% [17][27] - Cash on the balance sheet at the end of the second quarter was $162 million [27] Business Line Data and Key Metrics Changes - Revenue from hosted services was $50.3 million, down 25% year over year [24] - Professional services revenue was $9.3 million, down 26% year over year [24] - Recurring revenue accounted for 92% of total revenue, amounting to $55 million [24] - Average revenue per customer increased by 4% year over year to $655,000 [25] Market Data and Key Metrics Changes - U.S. revenue was $36.7 million, while international revenue was $22.9 million, representing 62% of total revenue [24] - Net revenue retention declined to 78%, down from 80% in the first quarter [25][26] Company Strategy and Development Direction - The company is focusing on strengthening its capital structure through a refinancing agreement, which extends debt maturities to 2029 [5][6] - Strategic partnerships with Google Cloud and Databricks are being deepened to enhance product offerings and market presence [12][14] - The vision is to embed AI into every interaction, transforming customer interactions into real business outcomes [8][12] Management's Comments on Operating Environment and Future Outlook - Management noted that macroeconomic uncertainty is extending enterprise buying cycles, particularly for high-value AI solutions [15][16] - The refinancing agreement is expected to alleviate concerns regarding financial stability and improve customer confidence [16][21] - The company anticipates that the strategic partnerships will amplify market presence and deliver integrated solutions to a wider range of enterprises [15][14] Other Important Information - The company signed a total of 38 deals in the second quarter, including three new logos and 35 expansions and renewals [21][22] - The refinancing agreement is expected to shift a greater proportion of enterprise value to equity holders by significantly reducing total indebtedness [5][21] Q&A Session Summary Question: How are win rates trending for new logo capture? - Management indicated that win rates remain consistent, but decision-making processes are being delayed due to RFPs being pushed out [32] Question: What is the impact of new AI-based competitors on decision-making cycles? - Management acknowledged that new competitors are increasing headwinds, contributing to longer decision-making cycles [34] Question: Are large customers primarily responsible for renewal pressures? - Yes, management confirmed that large customers are hesitant due to financial concerns, impacting renewal discussions [35] Question: What is the impact of macroeconomic uncertainty versus balance sheet issues? - Both factors are interrelated, with financial instability exposing the company to increased competition [42] Question: When will the migration to Google Cloud be fully completed? - Some customers will see benefits around October this year, with most migrations expected to be completed early next year [44]

Financial Performance - Second quarter 2025 revenue reached $59.6 million, exceeding the midpoint of the guidance range of $57 million to $60 million[8] - Adjusted EBITDA for 2Q25 was $2.9 million, surpassing the high end of the guidance range of $(4) million to $(2) million[8] - Recurring revenue accounted for 92% of total revenue in 2Q25, amounting to $55.0 million[8] - The company anticipates revenue between $56 million and $59 million for 3Q25, representing a year-over-year decline of 25% to 21%[19] - Full year 2025 revenue is projected to be in the range of $230 million to $240 million, a year-over-year decrease of 26% to 23%[19] Key Transactions - The company entered into an agreement to exchange $341.1 million of its outstanding 2026 Convertible Senior Notes for $45.0 million in cash, $115.0 million of 2029 Senior Subordinated Secured Notes, and Common and Preferred Equity[8] Customer Metrics - The average revenue per customer (ARPC) for 2Q25 was $655,000[16] - Net revenue retention rate for recurring revenue in 2Q25 was 78%[16] - Remaining performance obligations totaled $197 million in 2Q25[16] Business Updates - Total deal count in 2Q25 was 38, including 35 expansion & renewal deals and 3 new logo wins[8] - There was a 45% sequential increase in conversations leveraging LivePerson Generative AI capabilities[8]

[Second Quarter 2025 Highlights](index=1&type=section&id=Second%20Quarter%20Highlights) [Key Financial Highlights](index=1&type=section&id=Key%20Financial%20Highlights) LivePerson reported Q2 2025 total revenue of **$59.6 million**, a **25.4% year-over-year decrease**, with Adjusted EBITDA exceeding guidance Q2 2025 Key Financial Highlights | Metric | Q2 2025 Value | | :------------------------------------ | :------------ | | Total Revenue | $59.6 million | | Total Revenue Growth (YoY) | (25.4)% | | Adjusted EBITDA | Above high-end of guidance | | Trailing-twelve-months ARPC (YoY) | +4.0% | | Trailing-twelve-months ARPC (Value) | $655,000 | [Strategic and Operational Commentary](index=1&type=section&id=Strategic%20and%20Operational%20Commentary) The company secured a refinancing agreement, deleveraging its balance sheet by **$226 million** and extending its runway through 2029, alongside a **45% sequential increase** in Generative AI conversations - Secured a refinancing agreement that significantly deleverages the balance sheet and provides a clear runway to execute strategy through 2029[5](index=5&type=chunk)[6](index=6&type=chunk) - Achieved a **45% sequential increase** in conversations powered by the Generative AI suite[5](index=5&type=chunk) - Deepened strategic partnership with Google Cloud[5](index=5&type=chunk) Debt Deleveraging Impact | Metric | Value | | :-------------------- | :------------ | | Debt Discount Captured | $181 million | | Balance Sheet Deleveraging | $226 million | [Customer Expansion](index=1&type=section&id=Customer%20Expansion) LivePerson signed **38 deals** in Q2, including **35 expansions** and renewals with existing customers, and **3 new logo deals** with major global clients - Signed **38 total deals** in Q2 2025[4](index=4&type=chunk)[7](index=7&type=chunk) - **35 deals** were with existing customers (expansions and renewals)[7](index=7&type=chunk) - **3 deals** were with new customers, including a global financial services company, a major European retailer, one of Australia's largest retail groups, and a leading U.S. health plan provider[7](index=7&type=chunk)[8](index=8&type=chunk) [Condensed Consolidated Financial Statements](index=6&type=section&id=Condensed%20Consolidated%20Financial%20Statements) [Condensed Consolidated Statements of Operations](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) For Q2 2025, LivePerson reported a net loss of **$15.7 million**, a significant decline from Q2 2024's net income, primarily due to a prior year gain on debt extinguishment Condensed Consolidated Statements of Operations (Selected Metrics, in thousands) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :------------------------------------ | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Revenue | $59,600 | $79,875 | $124,300 | $165,024 | | Cost of revenue | $18,038 | $16,432 | $36,256 | $40,887 | | Sales and marketing | $19,888 | $25,733 | $43,373 | $54,963 | | General and administrative | $7,945 | $24,415 | $24,729 | $46,009 | | Product development | $13,843 | $19,674 | $29,877 | $44,309 | | Loss from operations | $(6,433) | $(29,799) | $(23,377) | $(66,163) | | Gain on debt extinguishment | — | $73,083 | — | $73,083 | | Net (loss) income | $(15,710) | $41,795 | $(29,843) | $6,164 | | Basic Net (loss) income per share | $(0.17) | $0.47 | $(0.32) | $0.07 | | Diluted Net (loss) income per share | $(0.17) | $(0.33) | $(0.37) | $(0.70) | [Condensed Consolidated Statements of Cash Flows](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Net cash used in operating activities improved to **$(14.8) million** for the six months ended June 30, 2025, with financing activities shifting to net cash provided Condensed Consolidated Statements of Cash Flows (Selected Metrics, in thousands) | Metric | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :------------------------------------ | :----------------------------- | :----------------------------- | | Net (loss) income | $(29,843) | $6,164 | | Stock-based compensation expense | $8,969 | $13,458 | | Gain on debt extinguishment | — | $(73,083) | | Net cash used in operating activities | $(14,772) | $(16,832) | | Net cash used in investing activities | $(7,947) | $(17,716) | | Net cash provided by (used in) financing activities | $444 | $(31,797) | | Net decrease in cash and cash equivalents | $(21,274) | $(66,968) | | Cash and cash equivalents - end of period | $161,963 | $145,957 | [Condensed Consolidated Balance Sheets](index=11&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Total assets slightly decreased to **$605.0 million** as of June 30, 2025, while total liabilities increased and stockholders' equity remained negative Condensed Consolidated Balance Sheets (Selected Metrics, in thousands) | Metric | June 30, 2025 | December 31, 2024 | | :------------------------------------ | :------------ | :---------------- | | Cash and cash equivalents | $161,963 | $183,237 | | Accounts receivable, net | $23,505 | $28,737 | | Prepaid expenses and other current assets | $46,158 | $19,250 | | Total current assets | $231,626 | $231,224 | | Total assets | $605,041 | $607,778 | | Total current liabilities | $141,438 | $139,940 | | Convertible senior notes | $537,866 | $527,070 | | Total liabilities | $687,453 | $675,094 | | Total stockholders' equity | $(82,412) | $(67,316) | [Disaggregated Revenue](index=3&type=section&id=Disaggregated%20Revenue) [Disaggregated Revenue by Source](index=3&type=section&id=Disaggregated%20Revenue%20by%20Source) Hosted services revenue decreased by **25.3%** to **$50.3 million** in Q2 2025, while professional services revenue also declined by **26.1%** Disaggregated Revenue by Source (in thousands) | Revenue Source | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Hosted services | $50,321 | $67,316 | $105,455 | $138,811 | | Professional services | $9,279 | $12,559 | $18,845 | $26,213 | | Total revenue | $59,600 | $79,875 | $124,300 | $165,024 | [Non-GAAP Financial Measures and Reconciliations](index=2&type=section&id=Non-GAAP%20Financial%20Measures%20and%20Reconciliations) [Adjusted EBITDA and Adjusted Operating (Loss) Income Reconciliation](index=2&type=section&id=Net%20(Loss)%20Income%2C%20Adjusted%20Operating%20(Loss)%20Income%20and%20Adjusted%20EBITDA) Adjusted EBITDA for Q2 2025 was **$2.9 million**, down from **$8.2 million** in Q2 2024, with adjusted operating loss at **$2.7 million** Adjusted EBITDA and Adjusted Operating (Loss) Income (in thousands) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :------------------------------------ | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | GAAP net (loss) income | $(15,710) | $41,795 | $(29,843) | $6,164 | | Adjusted EBITDA | $2,919 | $8,208 | $3,086 | $8,685 | | Adjusted operating (loss) income | $(2,659) | $494 | $(8,079) | $(7,254) | [Free Cash Flow and Non-GAAP Expense Reconciliations](index=10&type=section&id=Reconciliation%20of%20Non-GAAP%20Financial%20Information%20to%20GAAP%20-%20Free%20Cash%20Flow%20and%20Non-GAAP%20Expenses) Free Cash Flow for Q2 2025 improved to **$(14.8) million**, and non-GAAP expenses exclude items like stock-based compensation Free Cash Flow (in thousands) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :------------------------------------ | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Net cash used in operating activities | $(11,676) | $(17,931) | $(14,772) | $(16,832) | | Purchases of property and equipment, including capitalized software | $(3,136) | $(4,956) | $(6,895) | $(16,457) | | Total Free Cash Flow | $(14,812) | $(22,887) | $(21,667) | $(33,289) | Non-GAAP Expenses (Three Months Ended June 30, 2025, in thousands) | Expense Category | GAAP Amount | Non-GAAP Amount | | :------------------------------------ | :---------- | :-------------- | | Cost of revenue | $18,038 | $17,725 | | Sales and marketing expenses | $19,888 | $18,829 | | General and administrative expenses | $7,945 | $7,736 | | Product development expenses | $13,843 | $12,391 | [Financial Expectations](index=2&type=section&id=Financial%20Expectations) [Third Quarter 2025 Guidance](index=2&type=section&id=Third%20Quarter%202025%20Guidance) Q3 2025 revenue is projected between **$56 million** and **$59 million**, with Adjusted EBITDA expected to be a loss between **$(4) million** and **$(2) million** Third Quarter 2025 Guidance | Metric | Guidance | | :-------------------- | :----------------- | | Revenue (in millions) | $56 - $59 | | Revenue growth (YoY) | (25)% - (21)% | | Adjusted EBITDA (in millions) | $(4) - $(2) | | Adjusted EBITDA margin (%) | (7.1)% - (3.4)% | | Recurring revenue | 93% of total revenue | [Full Year 2025 Guidance](index=2&type=section&id=Full%20Year%202025%20Guidance) Full year 2025 revenue is anticipated between **$230 million** and **$240 million**, with Adjusted EBITDA ranging from **$(3) million** to **$7 million** Full Year 2025 Guidance | Metric | Guidance | | :-------------------- | :------------------------ | | Revenue (in millions) | $230 - $240 | | Revenue growth (YoY) | (26)% - (23)% | | Adjusted EBITDA (in millions) | $(3) - $7 | | Adjusted EBITDA margin (%) | (1.3)% - 2.9% | | Recurring revenue | 93% of total revenue | [Additional Information](index=3&type=section&id=Additional%20Information) [About LivePerson, Inc.](index=4&type=section&id=About%20LivePerson%2C%20Inc.) LivePerson leads enterprise conversational AI and digital transformation, powering nearly a billion monthly interactions and recognized as a top innovative AI company - LivePerson is a leader in trusted enterprise conversational AI and digital transformation[2](index=2&type=chunk)[23](index=23&type=chunk) - Powers nearly a **billion conversational interactions** every month for leading brands like HSBC and Virgin Media[23](index=23&type=chunk) - Named the **1 Most Innovative AI Company** in the world by Fast Company[23](index=23&type=chunk) [Non-GAAP Financial Measures Definition](index=4&type=section&id=Non-GAAP%20Financial%20Measures) This section defines non-GAAP measures like Adjusted EBITDA and Free Cash Flow, cautioning they are not alternatives to GAAP for performance indication - Defines non-GAAP financial measures such as **Adjusted EBITDA**, **Adjusted EBITDA margin**, **Adjusted Operating (Loss) Income**, **Free Cash Flow**, and non-GAAP expenses for various operational categories[24](index=24&type=chunk) - These measures exclude items like interest, taxes, depreciation, amortization, stock-based compensation, litigation costs, restructuring costs, and gain/loss on debt extinguishment[24](index=24&type=chunk) - Non-GAAP information should not be construed as an alternative to GAAP measures or as an indicator of operating performance, liquidity, or cash flows[25](index=25&type=chunk) [Forward-Looking Statements](index=4&type=section&id=Forward-Looking%20Statements) The report contains forward-looking statements, subject to risks and uncertainties that could cause actual results to differ materially from projections - Statements regarding LivePerson's future, including financial guidance and capital structure changes, are forward-looking[26](index=26&type=chunk) - These statements are subject to risks and uncertainties that could cause actual results to differ materially[26](index=26&type=chunk)[27](index=27&type=chunk) - Key risk factors include customer retention, personnel management, debt refinancing, lengthy sales cycles, payment-related risks, market competition, general economic conditions, security breaches, regulatory changes, and intellectual property protection[27](index=27&type=chunk) [Earnings Teleconference and Supplemental Presentation](index=3&type=section&id=Earnings%20Teleconference%20Information) LivePerson discussed Q2 2025 results via teleconference on **August 11, 2025**, with a replay and supplemental information available online - A teleconference to discuss Q2 2025 financial results was held on **August 11, 2025**, at 5:00 PM ET[20](index=20&type=chunk) - A replay of the teleconference is available until **August 25, 2025**[21](index=21&type=chunk) - Supplemental information for Q2 2025 is posted on the investor relations section of the Company's website at www.ir.liveperson.com[19](index=19&type=chunk)[22](index=22&type=chunk)

Core Insights - LivePerson reported total revenue of $59.6 million for Q2 2025, a decrease of 25.4% year-over-year, primarily due to customer cancellations and downsells [2][3] - The company signed 38 deals in total during the quarter, including 35 expansions and renewals, and 3 new customers [3][6] - LivePerson's adjusted EBITDA for Q2 2025 was $2.9 million, down from $8.2 million in Q2 2024 [8][28] Financial Performance - Net loss for Q2 2025 was $15.7 million, or $0.17 per share, compared to net income of $41.8 million, or $0.47 per share, in Q2 2024 [7][24] - Adjusted operating loss for Q2 2025 was $2.7 million, compared to adjusted operating income of $0.5 million in Q2 2024 [7][28] - Cash and cash equivalents at the end of Q2 2025 were $162.0 million, down from $183.2 million at the end of 2024 [9][31] Strategic Developments - The company secured a refinancing agreement that reduced its debt by $226 million and extended its runway through 2029 [4][5] - LivePerson experienced a 45% sequential increase in conversations powered by its Generative AI suite [4] - The company expects total revenue for Q3 2025 to range from $56 million to $59 million, representing a year-over-year decline of 25% to 21% [13][14] Customer and Market Dynamics - The average revenue per enterprise and mid-market customer increased by 4.0% to $655,000 for Q2 2025, up from approximately $630,000 in the prior year [3] - The company continues to deepen its strategic partnership with Google Cloud, enhancing its market position [4]

Core Viewpoint - LivePerson has entered into an agreement to exchange $341.1 million of its outstanding 2026 Convertible Senior Notes for a combination of cash, new secured notes, and equity, aiming to deleverage its balance sheet and enhance shareholder value [1][2]. Group 1: Exchange Details - The exchange involves $45.0 million in cash, $115.0 million of 10.0% Senior Subordinated Secured Notes due 2029, and shares of Series B Preferred Stock and Common Equity Shares, which will represent 39.0% of the Company's fully diluted common stock post-exchange [1][2]. - The New Secured Notes will be guaranteed by certain subsidiaries and secured by a second-priority lien on substantially all assets, maturing on December 15, 2029, with an interest rate of 10.0% per annum [3]. Group 2: Financial Impact - The transaction is expected to capture a $181 million debt discount for shareholders and reduce the balance sheet debt by $226 million, extending the company's financial runway through 2029 [2]. - Regular dividends on the Series B Preferred Stock will accrue at a rate of 15.0%, increasing to 20.0% if any shares remain outstanding after one year from the closing date [4]. Group 3: Corporate Strategy - The exchange is part of a multi-year strategy to deleverage the balance sheet, shifting a greater proportion of enterprise value to shareholders and providing time for the company to execute its long-term strategy [2]. - The company's executive officers support the transaction and plan to vote in favor of a proposed charter amendment to increase authorized share capital [4].

The core of this collaboration, driven by the integration of market-leading AI capabilities, lies in empowering businesses to move from reactive support to anticipatory and personalized customer interactions across all digital channels. Key industry-shaping components include: By partnering with Google Cloud, LivePerson is uniquely positioned to redefine enterprise customer experiences, enhancing its platform with unparalleled AI sophistication and solidifying its leadership in conversational AI and digital ...

Core Insights - LivePerson, Inc. is set to release its second quarter financial results on August 11, 2025, after market close [1] - The conference call will be hosted by CEO John Sabino and CFO & COO John Collins at 5:00 p.m. Eastern Time [1] Company Overview - LivePerson is a leader in enterprise conversational AI and digital transformation, serving major brands like HSBC and Virgin Media [3] - The company facilitates nearly a billion conversational interactions monthly, providing data analytics and safety tools for improved business outcomes [3] - LivePerson has been recognized as the 1 Most Innovative AI Company in the world by Fast Company [3]

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].