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].

Core Insights - LivePerson has announced a significant expansion of its partnership with Google Cloud to integrate advanced AI capabilities into its Connected Experience Platform, enhancing customer interactions and self-service options [1][5]. Partnership Expansion - The collaboration with Google Cloud is seen as a pivotal moment for LivePerson, enabling businesses to transition from reactive support to proactive, intelligent customer interactions [2][4]. - This partnership aims to redefine enterprise customer experiences by embedding Google's AI technologies, thereby solidifying LivePerson's leadership in conversational AI and digital transformation [5]. AI Capabilities and Features - The integration will allow enterprise customers to utilize Google Cloud's advanced AI, including large language models and natural language understanding, directly within LivePerson's platform [3][6]. - Key features include: - Intelligent Conversational Automation to enhance self-service capabilities [6]. - Real-time AI assistance for contact center agents to improve service delivery [6]. - AI-powered customer journey optimization for deeper insights into customer sentiment [6]. - An embedded model-agnostic LLM gateway for seamless access to various AI models [6]. - AI agent blueprints for rapid deployment of autonomous agents without coding [6]. - AI guardrails to ensure governance and security in AI adoption [6]. - Launching on Google Cloud Marketplace to expand reach and integration [6]. Market Position and Impact - LivePerson is positioned to leverage this partnership to enhance its platform's AI sophistication, aiming for a new era of efficient and personalized customer interactions globally [5][6]. - The collaboration includes joint go-to-market strategies and integrated marketing campaigns to attract enterprises seeking AI-driven transformation [6].

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].

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]

Financial Data and Key Metrics Changes - Total revenue for Q1 2025 was $64.7 million, above the midpoint of guidance, with adjusted EBITDA of $200,000 exceeding the high end of guidance [9][25][26] - Revenue from hosted services was $55.1 million, down 23% year-over-year, while recurring revenue was $60.4 million, accounting for 93% of total revenue and down 22% year-over-year [26] - Average revenue per customer increased by 2% year-over-year to $640,000, while net revenue retention decreased to 80% from 82% in the previous quarter [27] Business Line Data and Key Metrics Changes - The company signed a total of 50 deals in Q1, including five new logos and 45 expansions and renewals, representing a 25% quarter-over-quarter increase [22] - Professional services revenue was $9.6 million, down 30% year-over-year [26] Market Data and Key Metrics Changes - U.S. revenue was $40 million, while international revenue was $24.7 million, representing 38% of total revenue [26] - The company observed increasing demand for AI agents and orchestration, with significant renewals and expansions from major clients in regulated industries [23][24] Company Strategy and Development Direction - The company focuses on delivering a unified AI-powered platform for voice and digital engagement, emphasizing innovation without disruption [5][6][7] - Partnerships are a key part of the go-to-market strategy, with an expected launch of integration with Amazon Connect in Q2 [17][18] Management's Comments on Operating Environment and Future Outlook - Management noted that while the macro environment is uncertain, it has not led to deal shrinkage, and many deals have expanded in size [36][37] - The company expects positive net new annual recurring revenue (ARR) in the second half of the year, driven by improved renewal rates and new logos [20][30] Other Important Information - The company reaffirmed its full-year revenue guidance range of $240 million to $255 million, with approximately 93% expected to be recurring [28] - Cash on the balance sheet at the end of Q1 was $176 million, including proceeds from a previous transaction [28] Q&A Session Summary Question: Can you talk about the progress on the slipped Q1 deals in Q2 and any potential additional deal slippage? - Management indicated that they are on track to close the slipped deals in Q2, which have actually expanded in size [34][35] Question: Can you discuss the enthusiasm for the Amazon Connect integration and its potential impact? - Management expressed optimism about early interest in the integration, viewing it as a positive alignment with their strategy [39][41] Question: Can you elaborate on the trend in renewal rates over the last few quarters? - Management noted a significant improvement in renewal rates for Q2, approaching industry norms, and attributed this to changes in customer success efforts [46][48]