Press Release
LivePerson Announces Second Quarter 2022 Financial Results
-- Revenue of
-- Adjusted EBITDA at the high end of guidance –
-- Signed 45 new logo deals, including one of the largest new logo deals in LivePerson's history --
-- Maintains expectation of positive cash flow in the fourth quarter --
Second Quarter Highlights
Total revenue was
LivePerson signed 5 seven-figure deals and 104 deals in total for the second quarter, comprising of 45 new and 59 existing customer contracts. Trailing-twelve-months average revenue per enterprise and mid-market customer increased 23% for the second quarter to another record high of
"For the second quarter, LivePerson delivered on its commitments to re-accelerate new logo growth while cutting costs. We signed 104 total deals in the second quarter, including 45 new logos, which was up 55% Year over Year and up 73% sequentially, and achieved adjusted EBITDA at the top end of our guidance range," said founder and CEO
"Our second quarter results demonstrate strong execution against our profitable growth plan, " added CFO
Customer Expansion
During the second quarter, the Company signed 5 seven-figure deals out of 104 total deals for the quarter with new customers, including:
- Capitec, the largest retail bank in
South Africa - The largest bank in
Canada - One of the largest Automotive OEM finance companies in
the United States - A global leader in household appliances
The Company also expanded business with:
- One of the world's largest telecommunications companies
- A major airline
- One of the largest consumer banks in the midwest
- The largest telecommunications company in the
UK
Net Loss and Adjusted Operating (Loss) Income
Net loss for the second quarter of 2022 was
Adjusted EBITDA (Loss)
Adjusted EBITDA, a non-GAAP financial measure, for the second quarter of 2022 was
A reconciliation of non-GAAP financial measures to GAAP measures has been provided in the financial tables included in this press release. An explanation of the non-GAAP financial measures and how they are calculated is included below under the heading "Non-GAAP Financial Measures."
Cash and Cash Equivalents
The Company's cash balance was
Financial Expectations
The following forward-looking measures and the underlying assumptions involve significant known and unknown risks and uncertainties, and actual results may vary materially from these forward-looking measures. The Company does not present a quantitative reconciliation of the forward-looking non-GAAP financial measures, adjusted EBITDA, adjusted EBITDA margin, and non-GAAP gross margin to the most directly comparable GAAP financial measures (or otherwise present such forward-looking GAAP measures) because it is impractical to forecast certain items without unreasonable efforts due to the uncertainty and inherent difficulty of predicting, within a reasonable range, the occurrence and financial impact of and the periods in which such items may be recognized. In particular, these non-GAAP financial measures exclude certain items, including amortization of purchased intangibles, stock-based compensation, depreciation, other litigation and consulting costs, restructuring costs, contingent earn-out adjustments, benefit from income taxes, interest income (expense), and other expense (income), which depend on future events that the Company is unable to predict. Depending on the size of these items, they could have a significant impact on the Company's GAAP financial results.
In the short term, due to the P&L optimizations we are undertaking as we execute on our profitable growth plan, including reduction in costs and intentional elimination of low margin revenue, and our ramping sales force, we are revising down our 2022 revenue guidance from
With the strong cost out results of the second quarter demonstrating early signs of building leverage in the business and the Company's commitment to execution on its profitable growth strategy, the Company is maintaining its 2022 adjusted EBITDA guidance to a range of
Third Quarter 2022
Guidance |
|
Revenue (in millions) |
|
Revenue growth (year-over-year) |
1.8% - 4.5% |
Adjusted EBITDA (in millions) |
|
Adjusted EBITDA margin (%) |
0% - 3.5% |
Full Year 2022
Updated Guidance |
Previous Guidance |
|
Revenue (in millions) |
|
|
Revenue growth (year-over-year) |
8.0% - 10.4% |
16.0% - 20.0% |
Adjusted EBITDA (in millions) |
|
|
Adjusted EBITDA margin (%) |
0.0% - 2.0% |
0.0% - 2.0% |
The Company is raising guidance of non-GAAP gross margin from 70% - 72% to 72% - 74% for the full year 2022 and the third quarter of 2022.
Stock-Based Compensation
Included in the accompanying financial results are expenses related to stock-based compensation, as follows:
Three Months Ended |
Six Months Ended |
||||||
|
|
||||||
2022 |
2021 |
2022 |
2021 |
||||
(In thousands) |
|||||||
Cost of revenue |
$ 4,120 |
$ 1,386 |
$ 6,251 |
$ 3,281 |
|||
Sales and marketing |
5,942 |
3,373 |
12,591 |
7,155 |
|||
General and administrative |
13,231 |
3,110 |
23,669 |
5,760 |
|||
Product development |
13,224 |
7,218 |
25,872 |
13,502 |
|||
Total |
$ 36,517 |
$ 15,087 |
$ 68,383 |
$ 29,698 |
Amortization of Purchased Intangibles and Finance Leases
Included in the accompanying financial results are expenses related to the amortization of purchased intangibles and finance leases, as follows:
Three Months Ended |
Six Months Ended |
||||||
|
|
||||||
2022 |
2021 |
2022 |
2021 |
||||
(In thousands) |
|||||||
Cost of revenue |
$ 4,561 |
$ 1,184 |
$ 8,977 |
$ 2,359 |
|||
Amortization of purchased intangibles |
923 |
374 |
1,822 |
749 |
|||
Total |
$ 5,484 |
$ 1,558 |
$ 10,799 |
$ 3,108 |
Supplemental Second Quarter 2022 Presentation
LivePerson will post a presentation providing supplemental information for the second quarter 2022 on the investor relations section of the Company's web site at www.ir.liveperson.com.
Earnings Teleconference Information
The Company will discuss its second quarter 2022 financial results during a teleconference today,
The conference call will also be simulcast live on the Internet and can be accessed by logging onto the investor relations section of the Company's web site at www.ir.liveperson.com.
If you are unable to participate in the live call, the teleconference will be available for replay approximately two hours after the call. To access the replay, please call 1-844-512-2921 (
About LivePerson
LivePerson (NASDAQ: LPSN) is a global leader in customer engagement solutions. We create AI-powered digital experiences that feel Curiously Human. Our customers — including leading brands like HSBC, Orange, and GM Financial — have conversations with millions of consumers as personally as they would with one. Our Conversational Cloud platform powers nearly a billion conversational interactions every month, providing a uniquely rich data set to build connections that reduce costs, increase revenue, and are anything but artificial.
Non-GAAP Financial Measures
Investors are cautioned that the following financial measures used in this press release are "non-GAAP financial measures": (i) adjusted EBITDA, or earnings/(loss) before (benefit from) income taxes, interest income (expense), other expense (income), depreciation, amortization, stock-based compensation, restructuring costs, acquisition costs and other costs; (ii) adjusted EBITDA margin, or earnings/(loss) before (benefit from) income taxes, interest income (expense), other expense (income), depreciation, amortization, stock-based compensation, restructuring costs, acquisition costs and other costs divided by revenue; (iii) adjusted operating (loss) income, or operating income (loss) excluding amortization, stock-based compensation, restructuring costs, acquisition costs, deferred tax asset valuation allowance, and other costs; (iv) free cash flow, or net cash provided by operating activities less purchases of property and equipment, including capitalized software; and (v) non–GAAP gross profit and non–GAAP gross margin, or GAAP gross profit and GAAP gross margin, respectively, adjusted to exclude, as applicable, certain expenses as presented the Reconciliation of Adjusted EBITDA.
Non-GAAP financial information should not be construed as an alternative to any other measures of performance determined in accordance with GAAP, or as an indicator of our operating performance, liquidity or cash flows generated by operating, investing and financing activities as there may be significant factors or trends that it fails to address. We present non-GAAP financial information because we believe that it is helpful to some investors as one measure of our operations.
Forward-Looking Statements
Statements in this press release and on our earnings call regarding LivePerson that are not historical facts are forward-looking statements and are subject to risks and uncertainties that could cause actual future events or results to differ materially from such statements. Any such forward-looking statements, including but not limited to financial guidance, are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. It is routine for our internal projections and expectations to change as the quarter and year progress, and therefore it should be clearly understood that the internal projections and beliefs upon which we base our expectations may change. Although these expectations may change, we are under no obligation to inform you if they do. Some of the factors that could cause actual results to differ materially from the forward-looking statements contained herein include, without limitation: major public health issues, and specifically the pandemic caused by the spread of COVID-19, and their effects on the
Condensed Consolidated Statements of Operations (In Thousands, Except Share and Per Share Data) Unaudited |
|||||||
Three Months Ended |
Six Months Ended |
||||||
|
|
||||||
2022 |
2021 |
2022 |
2021 |
||||
Revenue |
$ 132,565 |
$ 119,605 |
$ 262,762 |
$ 227,496 |
|||
Costs and expenses: |
|||||||
Cost of revenue |
45,049 |
40,063 |
94,616 |
73,582 |
|||
Sales and marketing |
59,983 |
38,622 |
118,115 |
75,575 |
|||
General and administrative |
30,246 |
16,105 |
59,981 |
30,591 |
|||
Product development |
55,752 |
37,526 |
111,824 |
70,981 |
|||
Restructuring costs |
10,861 |
493 |
10,838 |
3,225 |
|||
Amortization of purchased intangibles |
923 |
374 |
1,822 |
749 |
|||
Total costs and expenses |
202,814 |
133,183 |
397,196 |
254,703 |
|||
Loss from operations |
(70,249) |
(13,578) |
(134,434) |
(27,207) |
|||
Other (expense) income, net: |
|||||||
Interest expense, net |
(682) |
(9,281) |
(2,114) |
(18,410) |
|||
Other (expense) income , net |
(3,266) |
2,338 |
(3,206) |
3,050 |
|||
Total other expense, net |
(3,948) |
(6,943) |
(5,320) |
(15,360) |
|||
Loss before provision for (benefit from) income taxes |
(74,197) |
(20,521) |
(139,754) |
(42,567) |
|||
Provision for (benefit from) income taxes |
1,214 |
598 |
1,021 |
(253) |
|||
Net loss |
$ (75,411) |
$ (21,119) |
$ (140,775) |
$ (42,314) |
|||
Net loss per share of common stock: |
|||||||
Basic |
$ (0.98) |
$ (0.31) |
$ (1.84) |
$ (0.62) |
|||
Diluted |
$ (0.98) |
$ (0.31) |
$ (1.84) |
$ (0.62) |
|||
Weighted-average shares used to compute net loss |
|||||||
Basic |
77,290,465 |
69,057,129 |
76,555,518 |
68,482,653 |
|||
Diluted |
77,290,465 |
69,057,129 |
76,555,518 |
68,482,653 |
Condensed Consolidated Statements of Cash Flows (In Thousands) Unaudited |
|||
Six Months Ended |
|||
|
|||
2022 |
2021 |
||
OPERATING ACTIVITIES: |
|||
Net loss |
$ (140,775) |
$ (42,314) |
|
Adjustments to reconcile net loss to net cash (used in) provided by operating activities: |
|||
Stock-based compensation expense |
68,383 |
29,698 |
|
Depreciation |
14,351 |
13,578 |
|
Amortization of purchased intangibles and finance leases |
10,799 |
3,108 |
|
Amortization of debt issuance costs |
1,885 |
1,228 |
|
Accretion of debt discount on convertible senior notes |
— |
16,374 |
|
Allowance for credit losses |
3,477 |
1,599 |
|
Gain on settlement of leases |
— |
(3,322) |
|
Deferred income taxes |
926 |
(1,408) |
|
Changes in operating assets and liabilities: |
|||
Accounts receivable |
(32,734) |
(11,665) |
|
Prepaid expenses and other current assets |
(7,981) |
(3,938) |
|
Contract acquisition costs noncurrent |
(4,758) |
(3,557) |
|
Other assets |
(111) |
597 |
|
Accounts payable |
6,816 |
(6,548) |
|
Accrued expenses and other current liabilities |
3,941 |
20,527 |
|
Deferred revenue |
13,049 |
20,126 |
|
Operating lease liabilities |
(1,721) |
(3,312) |
|
Other liabilities |
86 |
(157) |
|
Net cash (used in) provided by operating activities |
(64,367) |
30,614 |
|
INVESTING ACTIVITIES: |
|||
Purchases of property and equipment, including capitalized software |
(25,197) |
(23,172) |
|
Investment in joint venture |
(3,651) |
— |
|
Payments for acquisition, net of cash acquired |
(3,458) |
— |
|
Purchases of intangible assets |
(1,129) |
(1,375) |
|
Net cash used in investing activities |
(33,435) |
(24,547) |
|
FINANCING ACTIVITIES: |
|||
Principal payments for financing leases |
(1,849) |
(1,728) |
|
Proceeds from issuance of common stock in connection with the exercise of options and ESPP |
895 |
9,001 |
|
Payments on conversion of convertible senior notes |
— |
(2) |
|
Net cash (used in) provided by financing activities |
(954) |
7,271 |
|
Effect of foreign exchange rate changes on cash and cash equivalents |
1,578 |
(1,882) |
|
Net (decrease) increase in cash, cash equivalents, and restricted cash |
(97,178) |
11,456 |
|
Cash, cash equivalents, and restricted cash - beginning of year |
523,532 |
654,152 |
|
Cash, cash equivalents, and restricted cash - end of period |
$ 426,354 |
$ 665,608 |
Reconciliation of Non-GAAP Financial Information to GAAP (In Thousands) Unaudited |
|||||||
Three Months Ended |
Six Months Ended |
||||||
|
|
||||||
2022 |
2021 |
2022 |
2021 |
||||
Reconciliation of Adjusted EBITDA: |
|||||||
GAAP net loss |
$ (75,411) |
$ (21,119) |
$ (140,775) |
$ (42,314) |
|||
Add/(less): |
|||||||
Amortization of purchased intangibles and finance |
5,483 |
1,558 |
10,799 |
3,108 |
|||
Stock-based compensation |
36,517 |
15,087 |
68,383 |
29,698 |
|||
Contingent earn-out adjustments |
— |
— |
— |
132 |
|||
Restructuring costs (1) |
10,861 |
493 |
10,838 |
3,225 |
|||
Depreciation |
7,127 |
6,973 |
14,351 |
13,578 |
|||
Other litigation and consulting costs (2) |
3,053 |
2,835 |
4,804 |
4,182 |
|||
Provision for (benefit from) income taxes |
1,214 |
598 |
1,021 |
(253) |
|||
Acquisition costs |
1,703 |
— |
2,122 |
— |
|||
Interest expense, net |
682 |
9,281 |
2,114 |
18,410 |
|||
Other (income) expense, net (3) |
3,266 |
(2,338) |
3,206 |
(3,050) |
|||
Adjusted EBITDA (loss) |
$ (5,505) |
$ 13,368 |
$ (23,137) |
$ 26,716 |
|||
Reconciliation of Adjusted Operating (Loss) Income: |
|||||||
Loss before provision for income taxes: |
$ (74,197) |
$ (20,521) |
$ (139,754) |
$ (42,567) |
|||
Add/(less): |
|||||||
Amortization of purchased intangibles and finance |
5,483 |
1,558 |
10,799 |
3,108 |
|||
Stock-based compensation |
36,517 |
15,087 |
68,383 |
29,698 |
|||
Restructuring costs (1) |
10,861 |
493 |
10,838 |
3,225 |
|||
Other litigation and consulting costs (2) |
3,053 |
2,835 |
4,804 |
4,182 |
|||
Contingent earn-out adjustments |
— |
— |
— |
132 |
|||
Acquisition costs |
1,703 |
— |
2,122 |
— |
|||
Interest expense, net |
682 |
9,281 |
2,114 |
18,410 |
|||
Other (income) expense, net (3) |
3,266 |
(2,338) |
3,206 |
(3,050) |
|||
Adjusted operating (loss) income |
$ (12,632) |
$ 6,395 |
$ (37,488) |
$ 13,138 |
—————————————— |
|
(1) |
Includes severance costs and other compensation related costs of |
(2) |
Includes consulting costs of |
(3) |
Includes |
Reconciliation of Non-GAAP Financial Information to GAAP (In Thousands) Unaudited |
|||||||
Three Months Ended |
Six Months Ended |
||||||
|
|
||||||
2022 |
2021 |
2022 |
2021 |
||||
Calculation of Free Cash Flow: |
|||||||
Net cash provided by operating activities |
$ (41,495) |
$ 5,385 |
$ (64,367) |
$ 30,614 |
|||
Purchases of property and equipment, including |
(12,062) |
(12,542) |
(25,197) |
(23,172) |
|||
Total free cash flow |
$ (53,557) |
$ (7,157) |
$ (89,564) |
$ 7,442 |
Condensed Consolidated Balance Sheets (In Thousands) Unaudited |
|||
|
|
||
ASSETS |
|||
CURRENT ASSETS: |
|||
Cash and cash equivalents |
$ 425,944 |
$ 521,846 |
|
Accounts receivable, net |
121,728 |
93,804 |
|
Prepaid expenses and other current assets |
26,799 |
20,626 |
|
Total current assets |
574,471 |
636,276 |
|
Operating lease right of use assets |
3,064 |
1,977 |
|
Property and equipment, net |
133,709 |
124,726 |
|
Contract acquisition costs |
43,387 |
40,675 |
|
Intangibles, net |
86,002 |
85,554 |
|
|
303,268 |
291,215 |
|
Deferred tax assets |
4,600 |
5,034 |
|
Investment in joint venture |
3,651 |
— |
|
Other assets |
2,521 |
1,199 |
|
Total assets |
$ 1,154,673 |
$ 1,186,656 |
|
LIABILITIES AND STOCKHOLDERS' EQUITY |
|||
CURRENT LIABILITIES: |
|||
Accounts payable |
$ 22,615 |
$ 16,942 |
|
Accrued expenses and other current liabilities |
120,916 |
104,297 |
|
Deferred revenue |
110,594 |
98,808 |
|
Operating lease liability |
4,100 |
3,380 |
|
Total current liabilities |
258,225 |
223,427 |
|
Deferred revenue, net of current portion |
— |
54 |
|
Convertible senior notes, net |
735,530 |
574,238 |
|
Operating lease liability, net of current portion |
1,167 |
2,733 |
|
Deferred tax liability |
2,541 |
2,049 |
|
Other liabilities |
36,455 |
34,718 |
|
Total liabilities |
1,033,918 |
837,219 |
|
Commitments and contingencies |
|||
Total stockholders' equity |
120,755 |
349,437 |
|
Total liabilities and stockholders' equity |
$ 1,154,673 |
$ 1,186,656 |
Investor Relations contact
ir-lp@liveperson.com
212-609-4214
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