SEC Filing | LivePerson, Inc.

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lpsn-20210331

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, 2021

☐ 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 or other jurisdiction of incorporation or organization)						(IRS Employer Identification No.)

475 Tenth Avenue, 5th Floor
New York, New York						10018
(Address of principal executive offices)						(Zip Code)

(212) 609-4200

(Registrant’s telephone number, including area code)


Securities registered pursuant to Section 12(b) of the Act:
Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, par value $0.001 per share	LPSN	The Nasdaq Stock Market LLC

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large Accelerated Filer

☒

Accelerated Filer

☐

Non-accelerated Filer

☐

Smaller Reporting Company

☐

Emerging Growth Company

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

On May 4, 2021, 68,953,584 shares of the registrant’s common stock were outstanding.

LIVEPERSON, INC.

March 31, 2021

FORM 10-Q

INDEX


		PAGE
Part I.	Financial Information	4

Item 1.	Financial Statements (Unaudited):	4

	Condensed Consolidated Balance Sheets as of March 31, 2021 and December 31, 2020	5

	Condensed Consolidated Statements of Operations for the Three Months Ended March 31, 2021 and 2020	6

	Condensed Consolidated Statements of Comprehensive Loss for the Three Months Ended March 31, 2021 and 2020	7

	Condensed Consolidated Statements of Stockholders' Equity for the Three Months Ended March 31, 2021 and 2020	8

	Condensed Consolidated Statements of Cash Flows for the Three Months Ended March 31, 2021 and 2020	9

	Notes to Condensed Consolidated Financial Statements	10

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	36

Item 3.	Quantitative and Qualitative Disclosures about Market Risk	56

Item 4.	Controls and Procedures	58

Part II.	Other Information	58

Item 1.	Legal Proceedings	58

Item 1A.	Risk Factors	59

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	59

Item 3.	Defaults Upon Senior Securities	59

Item 4.	Mine Safety Disclosures	59

Item 5.	Other Information	59

Item 6.	Exhibits	60

Signatures		61

FORWARD-LOOKING STATEMENTS

Statements in this Quarterly Report on Form 10-Q about LivePerson, Inc. (“LivePerson”) that are not historical facts are forward-looking statements. These forward-looking statements are based on our current expectations, assumptions, estimates and projections about LivePerson and our industry. Our expectations, assumptions, estimates and projections are expressed in good faith, and we believe there is a reasonable basis for them, but we cannot assure you that our expectations, assumptions, estimates and projections will be realized. Examples of forward-looking statements include, but are not limited to, statements regarding future business, future results of operations or financial condition (including based on examinations of historical operating trends), management strategies and the COVID-19 pandemic. Many of these statements are found in the “Management’s Discussion and Analysis of Financial Condition and Results of Operations” section of this Form 10-Q. When used in this Form 10-Q, the words “estimates,” “expects,” “anticipates,” “projects,” “plans,” “intends,” “believes” and variations of such words or similar expressions are intended to identify forward-looking statements. However, not all forward-looking statements contain these words. Forward-looking statements are subject to risks and uncertainties that could cause actual future events or results to differ materially from those expressed or implied in the forward-looking statements. Important factors that could cause our actual results to differ materially from the forward-looking statements we make in this Form 10-Q include those set forth in our Annual Report on Form 10-K filed with the SEC on March 8, 2021 in the section entitled “Item 1A — Risk Factors.” It is routine for our internal projections and expectations to change as the year or each quarter in the year progresses, and therefore it should be clearly understood that the internal projections and beliefs upon which we base our expectations may change prior to the end of each quarter or the year. Although these expectations may change, we are under no obligation to inform you if they do. Our policy is generally to provide our expectations only once per quarter, and not to update that information until the next quarter. We do not undertake any obligation to revise forward-looking statements to reflect future events or circumstances. All forward-looking statements are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995.

Part I. Financial Information

Item 1. Financial Statements

LIVEPERSON, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS)

(UNAUDITED)


	March 31, 2021		December 31, 2020
			(Note 1)
ASSETS
CURRENT ASSETS:
Cash and cash equivalents	$	668,225	$	654,152
Accounts receivable, net of allowances of $5,396 and $5,344 as of March 31, 2021 and December 31, 2020, respectively	92,263		80,423
Prepaid expenses and other current assets	19,965		14,236
Total current assets	780,453		748,811
Operating lease right of use asset	437		614
Property and equipment, net	111,314		106,055
Contract acquisition costs	40,855		41,021
Intangibles, net	11,058		10,927
Goodwill	95,087		95,192
Deferred tax assets	3,620		2,032
Other assets	1,713		1,780
Total assets	$	1,044,537	$	1,006,432

LIABILITIES AND STOCKHOLDERS’ EQUITY
CURRENT LIABILITIES:
Accounts payable	$	13,626	$	14,115
Accrued expenses and other current liabilities	96,346		99,870
Deferred revenue	108,415		88,848
Operating lease liability	5,097		5,718
Total current liabilities	223,484		208,551
Deferred revenue, net of current portion	573		409
Convertible senior notes, net	547,159		538,432
Other liabilities	5,411		6,304
Operating lease liability, net of current portion	6,170		7,180
Deferred tax liability	1,723		1,622
Total liabilities	784,520		762,498

Commitments and contingencies (Note 11)
STOCKHOLDERS’ EQUITY:
Preferred stock, $0.001 par value - 5,000,000 shares authorized, none issued	—		—
Common stock, $0.001 par value - 200,000,000 shares authorized, 71,351,202 and 70,264,265 shares issued, 68,641,372 and 67,554,435 shares outstanding as of March 31, 2021 and December 31, 2020, respectively	71		70
Additional paid-in capital	674,695		635,672
Treasury stock; 2,709,830 shares	(3)		(3)
Accumulated deficit	(413,080)		(391,885)
Accumulated other comprehensive (loss) income	(1,666)		80
Total stockholders’ equity	260,017		243,934
Total liabilities and stockholders’ equity	$	1,044,537	$	1,006,432

See Notes to Condensed Consolidated Financial Statements (unaudited).

LIVEPERSON, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)

(UNAUDITED)


	Three Months Ended
	March 31,
	2021		2020
Revenue	$	107,891	$	78,088
Costs and expenses (1) (2)
Cost of revenue (3)	33,519		22,820
Sales and marketing	36,953		42,680
General and administrative	14,486		16,469
Product development	33,455		25,716
Restructuring costs	2,732		3,190
Amortization of purchased intangibles	375		405
Total costs and expenses	121,520		111,280
Loss from operations	(13,629)		(33,192)
Other (expense) income, net
Interest expense, net	(9,129)		(2,791)
Other income (expense), net	712		(667)
Total other (expense) income, net	(8,417)		(3,458)
Loss before (benefit from) provision for income taxes	(22,046)		(36,649)
(Benefit from) provision for income taxes	(851)		352
Net loss	$	(21,195)	$	(37,001)

Net loss per share of common stock:
Basic	$	(0.31)	$	(0.57)
Diluted	$	(0.31)	$	(0.57)

Weighted-average shares used to compute net loss per share:
Basic	67,901,809		64,388,850
Diluted	67,901,809		64,388,850


(1) Amounts include stock-based compensation expense, as follows:
Cost of revenue	$	1,895	$	1,249
Sales and marketing	3,782		5,138
General and administrative	2,650		2,727
Product development	6,284		5,581

(2) Amounts include depreciation expense, as follows:
Cost of revenue	$	2,534	$	2,373
Sales and marketing	603		667
General and administrative	60		105
Product development	3,408		2,392

(3) Amounts include amortization of purchased intangibles, as follows:
Cost of revenue	$	1,175	$	284

See Notes to Condensed Consolidated Financial Statements (unaudited).

LIVEPERSON, INC.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS

(IN THOUSANDS)

(UNAUDITED)


	Three Months Ended
	March 31,
	2021		2020
Net loss	$	(21,195)	$	(37,001)
Foreign currency translation adjustment	(1,746)		2,469
Comprehensive loss	$	(22,941)	$	(34,532)

See Notes to Condensed Consolidated Financial Statements (unaudited).

LIVEPERSON, INC.

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(IN THOUSANDS, EXCEPT SHARE DATA)

(UNAUDITED)


Three Months Ended March 31, 2021

	Common Stock			Treasury Stock			Additional Paid-in Capital		Accumulated Deficit		Accumulated Other Comprehensive Loss
	Shares	Amount		Shares	Amount								Total
Balance at December 31, 2020	70,264,265	$	70	(2,709,830)	$	(3)	$	635,672	$	(391,885)	$	80	$	243,934
Common stock issued upon exercise of stock options	209,185	—		—	—		2,617		—		—		2,617
Common stock issued upon vesting of restricted stock units	454,508	1		—	—		(1)		—		—		—
Stock-based compensation	—	—		—	—		9,225		—		—		9,225
Cash awards settled in shares of the Company's common stock	400,700	—		—	—		25,925		—		—		25,925
Common stock issued under Employee Stock Purchase Plan	22,544	—		—	—		1,257		—		—		1,257
Net loss	—	—		—	—		—		(21,195)		—		(21,195)
Other comprehensive loss	—	—		—	—		—		—		(1,746)		(1,746)
Balance at March 31, 2021	71,351,202	$	71	(2,709,830)	$	(3)	$	674,695	$	(413,080)	$	(1,666)	$	260,017


Three Months Ended March 31, 2020

	Common Stock			Treasury Stock			Additional Paid-in Capital		Accumulated Deficit		Accumulated Other Comprehensive Loss
	Shares	Amount		Shares	Amount								Total
Balance at December 31, 2019	66,543,073	$	67	(2,709,830)	$	(3)	$	436,557	$	(283,562)	$	(4,524)	$	148,535
Common stock issued upon exercise of stock options	199,215	—		—	—		1,955		—		—		1,955
Common stock issued upon vesting of restricted stock units	203,690	—		—	—		—		—		—		—
Common stock as earn-out payment in connection with AdvantageTec Inc.	11,508	1		—	—		293		—		—		294
Stock-based compensation	—	—		—	—		9,519		—		—		9,519
Cash awards settled in shares of the Company's common stock	991,905	—		—	—		24,656		—		—		24,656
ASU 2016-13 (Topic 326) Adjustment (See note 1)	—	—		—	—		—		(729)		—		(729)
Common stock issued under Employee Stock Purchase Plan	50,818	—		—	—		1,626		—		—		1,626




Net loss	—	—		—	—		—		(37,001)		—		(37,001)
Other comprehensive loss	—	—		—	—		—		—		$	(2,469)	(2,469)
Balance at March 31, 2020	68,000,209	$	68	(2,709,830)	$	(3)	$	474,606	$	(321,292)	$	(6,993)	$	146,386

See Notes to Condensed Consolidated Financial Statements (unaudited).

LIVEPERSON, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(IN THOUSANDS)

(UNAUDITED)


	Three Months Ended
	March 31,
	2021		2020
OPERATING ACTIVITIES:
Net loss	$	(21,195)	$	(37,001)
Adjustments to reconcile net loss to net cash provided by operating activities:
Stock-based compensation expense	14,611		14,695
Depreciation and amortization	6,605		5,538
Amortization of tenant allowance	—		(129)
Amortization of purchased intangibles and finance leases	1,550		689
Amortization of debt issuance costs	609		298
Accretion of debt discount on convertible senior notes	8,118		2,368
Changes in fair value of contingent consideration	—		(263)
Provision for doubtful accounts, net	801		615
Deferred income taxes	(1,595)		212

Changes in operating assets and liabilities:
Accounts receivable	(13,658)		24,112
Prepaid expenses and other current assets	(5,822)		(1,878)
Contract acquisition costs noncurrent	(436)		(2,445)

Other assets	47		(7)
Accounts payable	(1,920)		(3,412)
Accrued expenses and other current liabilities	17,208		2,987
Deferred revenue	21,642		(2,473)
Operating lease liabilities	(1,441)		390
Other liabilities	105		(3)
Net cash provided by operating activities	25,229		4,293

INVESTING ACTIVITIES:
Purchases of property and equipment, including capitalized software	(10,630)		(10,805)
Payments for intangible assets	(807)		(225)
Net cash used in investing activities	(11,437)		(11,030)

FINANCING ACTIVITIES:
Principal payments for financing leases	(859)		—

Proceeds from issuance of common stock in connection with the exercise of options and ESPP	3,874		3,098




Net cash provided by financing activities	3,015		3,098
EFFECT OF FOREIGN EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS	(2,734)		(1,405)
CHANGE IN CASH AND CASH EQUIVALENTS	14,073		(5,044)
CASH AND CASH EQUIVALENTS - Beginning of the period	654,152		176,523
CASH AND CASH EQUIVALENTS - End of the period	$	668,225	$	171,479



SUPPLEMENTAL DISCLOSURE OF OTHER CASH FLOW INFORMATION:
Cash paid for income taxes	$	329	$	1,337
Cash paid for interest	$	957	$	863

SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING AND FINANCING ACTIVITIES:
Purchase of property and equipment recorded in accounts payable	$	1,530	$	1,408
Issuance of 11,508 shares of common stock as earn-out payment in connection with AdvantageTec Inc.	$	—	$	294
Issuance of shares of common stock to settle cash awards	$	25,925	$	24,656
Right of use assets obtained in exchange for operating lease liabilities (1)	$	—	$	1,406
Fair value of contingent earn-out in connection with the acquisition of AdvantageTec Inc. recorded in accrued expenses	$	132	$	—


(1) Includes leases that commenced during the year ended December 31, 2020, as well as balances related to leases in existence as of the date of the adoption of Topic 842.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

1. Description of Business and Basis of Presentation

LivePerson, Inc. (“LivePerson”, the “Company”, “we” or “us”) makes life easier for people and brands everywhere through trusted Conversational AI. Conversational AI allows humans and machines to interact using natural language, including speech or text. During the past decade, consumers have made mobile devices the center of their digital lives, and they have made mobile messaging the center of communication with friends, family and peers. This trend has been significantly accelerated by the COVID-19 pandemic and can now be viewed as a permanent, structural shift in consumer behavior. Our technology enables consumers to connect with businesses through these same preferred conversational interfaces, including Facebook Messenger, SMS, WhatsApp, Apple Business Chat, Google Rich Business Messenger and Alexa. These messaging conversations harness human agents, bots and Artificial Intelligence (AI) to power convenient, personalized and content-rich journeys across the entire consumer lifecycle, from discovery and research, to sales, service and support, and increasingly marketing, social, and brick and mortar engagements. For example, consumers can look up product info like ratings, images and pricing, search for stores, see product inventory, schedule appointments, apply for credit, approve repairs, and make purchases or payments - all without ever leaving the messaging channel. These AI and human-assisted conversational experiences constitute the Conversational Space, within which LivePerson has strategically developed one of the industry's largest ecosystems of messaging endpoints and use cases.

The Conversational Cloud, our enterprise-class cloud-based platform, enables businesses to become conversational by securely deploying AI-powered messaging at scale for brands with tens of millions of customers and many thousands of agents. The Conversational Cloud powers conversations across each of a brand’s primary digital channels, including mobile apps, mobile and desktop web browsers, short message service (SMS), social media and third-party consumer messaging platforms. Brands can also use the Conversational Cloud to message consumers when they dial a 1-800 number instead of forcing them to navigate interactive voice response systems (IVRs) and wait on hold. Similarly, the Conversational Cloud can ingest traditional emails and convert them into messaging conversations, or embed messaging conversations directly into web advertisements, rather than redirect consumers to static website landing pages. Agents can manage all conversations with consumers through a single console interface, regardless of where the conversations originated.

LivePerson's robust, cloud-based suite of rich messaging, real-time chat, AI and automation offerings features consumer and agent facing bots, intelligent routing and capacity mapping, real-time intent detection and analysis, queue prioritization, customer sentiment, analytics and reporting, content delivery, Payment Card Industry (PCI) compliance, cobrowsing and a sophisticated proactive targeting engine. An extensible application programming interface (API) stack facilitates a lower cost of ownership by facilitating robust integration into back-end systems, as well as enabling developers to build their own programs and services on top of the platform. More than 40 APIs and software development kits are available on the Conversational Cloud.

For your reference:

•Conversational AI: Conversational AI allows humans and machines to interact using natural language, including speech or text.

•Conversational Space: In the Conversational Space, consumers message with brands on their own schedule, using natural language, to resolve their intents - all on their preferred messaging service. The core capabilities of the Conversational Space are voice and text-based interfaces, powered by AI and humans working together. Conversational Space is the simplest, most intuitive interface of all.

•Conversational Cloud: LivePerson's enterprise-class, AI-powered Conversational Cloud platform empowers consumers to message their favorite brands, just as they do with friends and family.

LivePerson’s Conversational AI offerings put the power of bot development, training, management and analysis into the hands of the contact center and its agents, the teams most familiar with how to structure sales and service conversations to drive successful outcomes. The platform enables what we call “the tango” of humans, AI and bots, whereby human agents act as bot managers, overseeing AI-powered conversations and seamlessly stepping into the flow when a personal touch is needed. Agents become ultra-efficient, leveraging the AI engine to serve up relevant content, define next-best actions and take over repetitive transactional work, so that the agent can focus on relationship building. By seamlessly integrating messaging with our proprietary Conversational AI, as well as third-party bots, the Conversational Cloud offers brands a comprehensive approach to scaling automations across their millions of customer conversations.

Complementing our proprietary messaging and Conversational AI offerings are teams of technical, solutions and consulting professionals that have developed deep domain expertise in the implementation and optimization of conversational services across industries and messaging endpoints. We are a leading authority in the Conversational Space. LivePerson’s

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

products, coupled with our domain knowledge, industry expertise and professional services, have been proven to maximize the effectiveness of the Conversational Space and deliver measurable return on investment. Certain of our customers have achieved the following advantages from our offerings:

•the ability for each agent to manage as many as 40 messaging conversations at a time, as compared to one at a time for a voice agent and two to four at a time for a good chat agent. Adding AI and bots provides even greater scale to the number of conversations managed;

•labor efficiency gains of at least two times that of voice agents, effectively cutting labor costs by at least 50%;

•improving the overall customer experience, thereby fueling customer satisfaction score increases of up to 20 percentage points, and enhancing retention and loyalty;

•more convenient, personalized and content-rich conversations that increase sales conversion by up to 20%, increase average order value and reduce abandonment;

•more satisfied contact center agents, thereby reducing agent churn by up to 50%;

•a valued connection with consumers via mobile devices, either through native applications, websites, text messages, or third-party messaging platforms;

•leverage of spending that drives visitor traffic by increasing visitor conversions;

•refinement and improvement of performance by understanding which initiatives deliver the highest rate of return; and

•increased lead generation through a single platform that engages consumers through advertisements and listings on branded and third-party websites.

As a “cloud computing” or software-as-a-service (SaaS) provider, LivePerson provides solutions on a hosted basis. This model offers significant benefits over premise-based software, including lower up-front costs, faster implementation, lower total cost of ownership, scalability, cost predictability, and simplified upgrades. Organizations that adopt a fully-hosted, multi-tenant architecture that is maintained by LivePerson eliminate the majority of the time, server infrastructure costs, and IT resources required to implement, maintain, and support traditional on-premise software.

To further enhance our platform, in September 2020 LivePerson signed a partnership with Infosys, a leader in next-generation digital services and consulting. The Company is working with Infosys to transform our technology infrastructure on the public cloud, to build integrated solutions and a global practice around our Conversational Cloud to sell into their channels and global enterprise customer base, and to redefine how the world’s top brands communicate.

More than 18,000 businesses, including HSBC, Orange, The Home Depot, and GM Financial use our conversational solutions to orchestrate humans and AI, at scale, and create a convenient, deeply personal relationship with their customers.

LivePerson's consumer services offering is an online marketplace that connects independent service providers (Experts) who provide information and knowledge for a fee via mobile and online messaging with individual consumers (Users). Users seek assistance and advice in various categories including personal counseling and coaching, computers and programming, education and tutoring, spirituality and religion, and other topics.

LivePerson was incorporated in the State of Delaware in November 1995 and the LivePerson service was introduced in November 1998. In April 2000, the Company completed an initial public offering and is currently traded on the NASDAQ Global Select Market and the Tel Aviv Stock Exchange. LivePerson is headquartered in New York City. In light of the COVID-19 pandemic and the Company’s strong performance working remotely, LivePerson has adopted an “employee-centric” workforce model that does not rely on traditional offices.

Basis of Presentation

The accompanying condensed consolidated financial statements as of March 31, 2021 and for the three months ended March 31, 2021 and 2020 are unaudited. In the opinion of management, the unaudited condensed consolidated financial statements have been prepared on the same basis as the annual financial statements and reflect all adjustments, which include only normal recurring adjustments, necessary to present fairly the consolidated financial position of LivePerson as of March 31, 2021, and the consolidated results of operations, comprehensive loss and cash flows for the interim periods ended March 31, 2021 and 2020. The financial data and other information disclosed in these notes to the condensed consolidated financial statements related to these periods are unaudited. The results of operations for any interim period are not necessarily indicative of the results of operations for any other future interim period or for a full fiscal year. The condensed consolidated balance sheet as of December 31, 2020 has been derived from audited consolidated financial statements at that date.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

Certain information and note disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles in the United States (“GAAP”) have been condensed or omitted pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”). These unaudited interim condensed consolidated financial statements should be read in conjunction with the Company’s audited consolidated financial statements and notes thereto for the year ended December 31, 2020 included in the Company’s Annual Report on Form 10-K filed with the SEC on March 8, 2021.

Principles of Consolidation

The condensed consolidated financial statements include the Company and its wholly-owned subsidiaries. All intercompany balances and transactions have been eliminated.

Use of Estimates

The preparation of the Company’s condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements and the reported amounts of income and expenses during the reporting period. These estimates are based on information available as of the date of the condensed consolidated financial statements; therefore, actual results could differ from management’s estimates.

Many of the Company’s estimates require increased judgment due to the significant volatility, uncertainty and economic disruption of the COVID-19 pandemic. The Company will continue to monitor the effects of the COVID-19 pandemic, and its estimates and judgments may change materially as new events occur or additional information becomes available.

Recently Issued Accounting Standards

In August 2020, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2020-06, “Debt - Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging - Contracts in Entity's Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity's Own Equity”, which simplifies the accounting for convertible instruments by eliminating existing accounting models that require separation of a cash conversion or beneficial conversion feature from the host contract. Accordingly, a convertible debt instrument will be accounted as a single liability measured at its amortized cost and a convertible preferred stock will be accounted as a single equity instrument measured at its historical cost, as long as no other embedded features require bifurcation as derivatives and the convertible debt was not issued at a substantial premium. The ASU also simplifies the derivative scope exception for accounting for contracts in an entity's own equity by:

•removing certain conditions required to meet the settlement criterion

•clarifying that instruments that are not indexed to the issuer's own stock must be remeasured at fair value through earnings at each reporting period

•clarifying the scope of reassessment guidance and disclosure requirements in Subtopic 815-40.

The ASU also makes targeted improvements to the disclosure requirements for convertible instruments and earnings-per-share guidance.

For SEC filers, excluding smaller reporting companies, the ASU is effective for fiscal years beginning after December 15, 2021, including interim periods within those fiscal years. The ASU specifies that the guidance should be adopted as of the beginning of the annual fiscal year. The Company is assessing what impact ASU 2020-06 will have on its condensed consolidated financial statements.

Recently Adopted Accounting Pronouncements

In December 2019, the FASB issued ASU 2019-12, “Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes.” The new guidance is intended to simplify the accounting for income taxes by removing certain exceptions and by updating accounting requirements around franchise taxes, goodwill recognized for tax purposes, the allocation of current and deferred tax expenses among legal entities, among other minor changes. The ASU is effective for fiscal years beginning after December 15, 2020, including interim periods within those fiscal years. Early adoption is permitted. The Company has adopted ASU 2019-12 in the first quarter of 2021 and determined that the ASU had no material impact on its condensed consolidated financial statements.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

2. Revenue Recognition

The majority of the Company’s revenue is generated from monthly service revenues and related professional services from the sale of the LivePerson services. Revenues are recognized when control of these services is transferred to the Company’s customers, in an amount that reflects the consideration the Company expects to be entitled to in exchange for those services. No single customer accounted for 10% or more of the Company’s total revenue for the three months ended March 31, 2021.

The Company determines revenue recognition through the following steps:

•identification of the contract, or contracts, with a customer;

•identification of the performance obligations in the contract;

•determination of the transaction price;

•allocation of the transaction price to the performance obligations in the contract; and

•recognition of revenue when, or as, the Company satisfies a performance obligation.

Total revenue of $107.9 million and $78.1 million was recognized during the three months ended March 31, 2021 and 2020, respectively.

Under Topic 606, the Company defers all incremental commission costs to obtain the contract (contract acquisition costs). The contract acquisition costs, which consist of prepaid sales commissions, have balances as of March 31, 2021 and December 31, 2020 of $40.9 million and $41.0 million, respectively. The Company amortizes these costs over the related period of benefit using the expected life of the customer contract, which the Company determines to be three to five years, which is consistent with the transfer to the customer of the services to which the asset relates. The Company classifies contract acquisition costs as long-term unless they have an original amortization period of one year or less.

Hosted Services- Business Revenue

Hosted Services- Business Revenue is reported at the amount that reflects the ultimate consideration expected to be received and primarily consists of fees that provide customers access to the Conversational Cloud, the Company’s enterprise-class, cloud-based platform. The Company has determined such access represents a stand-ready service provided continually throughout the contract term. As such, control and satisfaction of this stand-ready performance obligation is deemed to occur over time. The Company recognizes this revenue over time on a ratable basis over the contract term, beginning on the date that access to the Conversational Cloud platform is made available to the customer. The passage of time is deemed to be the most faithful depiction of the transfer of control of the services as the customer simultaneously receives and consumes the benefit provided by the Company’s performance. Subscription contracts are generally one year or longer in length, billed monthly, quarterly or annually in advance. There is no significant variable consideration related to these arrangements. Additionally, for certain of the Company’s larger customers, the Company may provide call center labor through an arrangement with one or more of several qualified vendors. For most of these customers, the Company passes the fee the Company incurs with the labor provider and its fee for the hosted services through to the Company’s customers in the form of a fixed fee for each order placed via the Company’s online engagement solutions. For these Gainshare (formerly “Pay for Performance”) arrangements in accordance with ASC-606, “Principal Agent Considerations,” the Company acts as a principal in a transaction if the Company controls the specified goods or services before they are transferred to the customer.

Professional Services Revenues

Professional Services Revenues primarily consists of fees for deployment and optimization services, as well as training delivered on an on-demand basis which is deemed to represent a distinct stand-ready performance obligation. Professional Services Revenues are reported at the amount that reflects the ultimate consideration the Company expects to receive in exchange for such services. Control for the majority of the Company Professional Services contracts passes over time to the customer and is recognized ratably over the contracted period, as the passage of time is deemed to be the most faithful depiction of the transfer of control. For certain deployment services, which are not deemed to represent a distinct performance obligation, revenue will be recognized in the same manner as the fee for access to the Conversational Cloud platform, and as such will be recognized on a straight-line basis over the contract term. For services billed on a fixed price basis, revenue is recognized over time based on the proportion performed using time and materials as the measure of progress toward complete satisfaction of the performance obligation. Professional service contracts are generally one year or longer in length, billed monthly, quarterly or annually in advance. There is no significant variable consideration related to these arrangements.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

Remaining Performance Obligation

As of March 31, 2021, the aggregate amount of the total transaction price allocated in contracts with original duration of greater than one year to the remaining performance obligations was $330.6 million. Approximately 90% of the Company’s remaining performance obligations is expected to be recognized during the next 24 months, with the balance recognized thereafter. The aggregate balance of unsatisfied performance obligations represents contracted revenue that has not yet been recognized, and does not include contract amounts that are cancellable by the customer, amounts associated with optional renewal periods, and any amounts related to performance obligations, which are billed and recognized as they are delivered. The Company has elected the optional exemption, which allows for the exclusion of the amounts for remaining performance obligations that are part of contracts with an original expected duration of one year or less. Such remaining performance obligations represent unsatisfied or partially unsatisfied performance obligations pursuant to ASC 606.

Contracts with Multiple Performance Obligations

Some of the Company’s contracts with customers contain multiple performance obligations. For these contracts, the Company accounts for individual performance obligations separately if they are distinct. The transaction price is allocated to the separate performance obligations on a relative standalone selling price basis. The Company determines the standalone selling prices based on its overall pricing objectives, taking into consideration market conditions and other factors, including the value of its contracts, the cloud applications sold, and the number and types of users within its contracts.

Hosted Services- Consumer Revenue

For revenue from the Company’s Consumer segment generated from online transactions between Experts and Users, revenue is recognized at an amount net of Expert fees in accordance with ASC 606, “Principal Agent Considerations,” primarily because the Expert is the primary obligor. The Company does not act as a principal in a transaction since the Company does not control the specified goods or services before they are transferred to the customer. Additionally, the Company performs as an agent without any risk of loss for collection, and is not involved in selecting the Expert or establishing the Expert’s fee. The Company collects a fee from the consumer and retains a portion of the fee, and then remits the balance to the Expert. Revenue from these transactions is recognized at the point in time when the transaction is complete and no significant performance obligations remain.

Deferred Revenues

The Company records deferred revenues when cash payments are received or due in advance of the Company’s performance. The increase in the deferred revenue balance as of March 31, 2021 is primarily driven by cash payments received or due in advance of the Company’s performance obligations, partially offset by $46.7 million of revenues recognized that were included in the deferred revenue balance as of December 31, 2020.

The following table presents deferred revenue by revenue source (amounts in thousands):


	Deferred Revenue
	As of March 31, 2021		As of December 31, 2020
Hosted services – Business	$	105,900	$	86,144
Hosted services – Consumer	875		835
Professional services – Business	1,640		1,869
Total deferred revenue - short term	$	108,415	$	88,848


Professional services – Business	573		409
Total deferred revenue - long term	$	573	$	409

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

Disaggregated Revenue

The following table presents the Company’s revenues disaggregated by revenue source (amounts in thousands):


	Three Months Ended
	March 31,
	2021		2020
Revenue:
Hosted services – Business	$	83,640	$	61,051
Hosted services – Consumer	9,011		6,240
Professional services	15,240		10,797
Total revenue	$	107,891	$	78,088

Revenue by Geographic Location

The following table presents the Company’s revenues attributable to domestic and foreign operations for the periods presented (amounts in thousands):


	Three Months Ended
	March 31,
	2021		2020
United States	$	68,782	$	48,549
Other Americas (1)	3,913		2,020
Total Americas	72,695		50,569
EMEA (2) (4)	21,760		19,491
APAC (3)	13,436		8,028
Total revenue	$	107,891	$	78,088

(1) Canada, Latin America and South America

(2) Europe, the Middle East and Africa (“EMEA”)

(3) Asia-Pacific (“APAC”)

(4) Includes revenues from the United Kingdom of $13.3 million and $12.6 million for the three months ended March 31, 2021 and 2020, respectively, and from the Netherlands of $1.3 million for the three months ended March 31, 2021 and 2020.

Information about Contract Balances

Amounts collected in advance of services being provided are accounted for as deferred revenue. Nearly all of the Company’s deferred revenue balance is related to Hosted Services - Business Revenue.

In some arrangements, the Company allows customers to pay for access to the Conversational Cloud over the term of the software license. The Company refers to these as subscription transactions. Amounts recognized as revenue in excess of amounts billed are recorded as unbilled receivables. Unbilled receivables, anticipated to be invoiced in the next twelve months, are included in accounts receivable on the condensed consolidated balance sheet. Contract acquisition costs represent prepaid sales commissions. The opening and closing balances of the Company’s accounts receivable, unbilled receivables, contract acquisition costs and deferred revenues are as follows (amounts in thousands):


	Accounts Receivable		Unbilled Receivable		Contract Acquisition Costs noncurrent		Deferred Revenue (current)		Deferred Revenue (long term)
Opening Balance as of December 31, 2020	$	61,801	$	18,622	$	41,021	$	88,848	$	409
(Decrease) Increase, net	6,576		5,264		(166)		19,567		164
Ending Balance as of March 31, 2021	$	68,377	$	23,886	$	40,855	$	108,415	$	573

Accounts Receivable, Net

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

The timing of revenue recognition, billings and cash collections results in billed accounts receivable, unbilled receivables (contract assets), and customer advances and deposits (contract liabilities, which are included in accrued liabilities and other long-term liabilities) on the condensed consolidated balance sheet. Under the typical payment terms of the Company’s over time contracts, the customer pays the Company either performance-based payments or progress payments. Amounts billed and due from the Company’s customers are classified as receivables on the condensed consolidated balance sheet. Accounts receivable is presented net of an allowance for doubtful accounts and sales reserve of $5.4 million and $2.7 million as of March 31, 2021, respectively and $5.3 million and $3.4 million as of December 31, 2020, respectively.

An allowance for doubtful accounts is established to recognize expected credit losses on accounts receivable balances. Judgment is required in the estimation of the allowance and the Company evaluates the collectability of its accounts receivable based on a combination of factors. If the Company becomes aware of a customer’s inability to meet its financial obligations, a specific allowance is recorded to reduce the net receivable to the amount reasonably believed to be collectible from the customer. For all other customers, the Company uses an aging schedule and recognizes allowances for doubtful accounts based on the creditworthiness of the debtor, the age and status of outstanding receivables, the current business environment and the Company’s historical collection experience adjusted for current expectations for the customer or industry. Accounts receivable are written off against the allowance for uncollectible accounts when the Company determines amounts are no longer collectible.


	Three Months
Allowance for doubtful accounts (in thousands):	March 31, 2021
Balance at beginning of the year	$	5,344
Additions Charged to Costs and Expenses	801
Deductions/Write-offs	(749)
Balance as of March 31, 2021	$	5,396

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

3. Net Loss Per Share

The Company calculates earnings per share (“EPS”) in accordance with the provisions of ASC 260-10. Under the guidance, basic EPS excludes dilution for common stock equivalents and is computed by dividing net income or loss attributable to common stockholders by the weighted average number of shares of common stock outstanding for the period. All options, warrants or other potentially dilutive instruments issued for nominal consideration are required to be included in the calculation of basic and diluted net income attributable to common stockholders. Diluted EPS is calculated using the treasury stock method and reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock and resulted in the issuance of common stock.

Diluted net loss per share of common stock for the three months ended March 31, 2021 does not include the effect of 6,703,307 outstanding common stock awards, as the effect of their inclusion is anti-dilutive. Diluted net loss per share of common stock for the three months ended March 31, 2020 does not include the effect of 9,128,000 outstanding common stock awards, as the effect of their inclusion is anti-dilutive.

A reconciliation of shares used in calculating basic and diluted net loss per share follows:


	Three Months Ended
	March 31,
	2021	2020
Basic	67,901,809	64,388,850
Effect of assumed exercised options	—	—
Diluted	67,901,809	64,388,850

In December 2020, the Company issued $517.5 million aggregate principal amount of 0% Convertible Senior Notes due 2026 (“2026 Notes”) in a private placement, which amount includes $67.5 million aggregate principal amount of the 2026 Notes issued pursuant to the exercise in full by the initial purchasers of their option to purchase additional 2026 Notes. Upon conversion, the Company will pay or deliver, as the case may be, cash, shares of its common stock or a combination of cash and shares of its common stock, at the Company’s election. It is the Company’s current intent to settle the principal amount of its outstanding 2026 Notes upon conversion in cash and any excess over the principal amount in shares of the Company’s common stock. The Company uses the treasury stock method for calculating any potential dilutive effect of the conversion spread on diluted net income per share, if applicable. The conversion spread will have a dilutive impact on diluted net income per share of common stock when the average market price of the Company’s common stock for a given period exceeds the initial conversion price of $75.23 per share. The conversion rate is subject to adjustment upon the occurrence of certain specified events but will not be adjusted for any accrued and unpaid special interest. Holders of the 2026 Notes may convert their 2026 Notes at their option at any time prior to the close of business on the business day immediately preceding August 15, 2026, in multiples of $1,000 principal amount, only under the following circumstances: (1) during any calendar quarter commencing after the calendar quarter ending on March 31, 2021 (and only during such calendar quarter), if the last reported sale price of the Company’s common stock for at least 20 trading days (whether or not consecutive) during a period of 30 consecutive trading days ending on, and including, the last trading day of the immediately preceding calendar quarter is greater than or equal to 130% of the conversion price for the 2026 Notes on each applicable trading day as determined by the Company; (2) during the five business day period after any five consecutive trading day period (the “measurement period”) in which the “trading price” (as defined in the indenture governing the 2026 Notes) per $1,000 principal amount of 2026 Notes for each trading day of the measurement period was less than 98% of the product of the last reported sale price of the Company’s common stock and the conversion rate for the 2026 Notes on each such trading day; (3) with respect to any Notes that LivePerson calls for redemption, at any time prior to the close of business on the scheduled trading day immediately preceding the redemption date; or (4) upon the occurrence of specified corporate events. On or after August 15, 2026, holders may convert all or any portion of their 2026 Notes at any time prior to the close of business on the second scheduled trading day immediately preceding the maturity date, regardless of the foregoing circumstances.

In March 2019, the Company issued $230.0 million aggregate principal amount of 0.750% Convertible Senior Notes due 2024 (“2024 Notes” and, together with the 2026 Notes, the “Notes”) in a private placement, which amount includes $30.0 million aggregate principal amount of the 2024 Notes issued pursuant to the exercise in full by the initial purchasers of their option to purchase additional 2024 Notes. Upon conversion, the Company will pay or deliver, as the case may be, cash, shares of its common stock or a combination of cash and shares of its common stock, at the Company’s election. It is the Company’s current intent to settle the principal amount of its outstanding 2024 Notes in cash and any excess over the principal amount in shares of the Company’s common stock. The Company uses the treasury stock method for calculating any potential

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

dilutive effect of the conversion spread on diluted net income per share, if applicable. The conversion spread will have a dilutive impact on diluted net income per share of common stock when the average market price of the Company’s common stock for a given period exceeds the initial conversion price of 130% of $38.58 per share for the 2024 Notes. The conversion rate is subject to adjustment upon the occurrence of certain specified events but will not be adjusted for any accrued and unpaid interest. Holders of the 2024 Notes may convert their 2024 Notes at their option at any time prior to the close of business on the business day immediately preceding November 1, 2023, in multiples of $1,000 principal amount, only under the following circumstances: (1) during any calendar quarter commencing after the calendar quarter ending on June 30, 2019 (and only during such calendar quarter), if the last reported sale price of the Company’s common stock for at least 20 trading days (whether or not consecutive) during a period of 30 consecutive trading days ending on, and including, the last trading day of the immediately preceding calendar quarter is greater than or equal to 130% of the conversion price for the 2024 Notes on each applicable trading day as determined by the Company; (2) during the five business day period after any five consecutive trading day period (the “measurement period”) in which the “trading price” (as defined in the indenture governing the 2024 Notes) per $1,000 principal amount of 2024 Notes for each trading day of the measurement period was less than 98% of the product of the last reported sale price of the Company’s common stock and the conversion rate for the 2024 Notes on each such trading day; or (3) upon the occurrence of specified corporate events. On or after November 1, 2023, holders may convert all or any portion of their 2024 Notes at any time prior to the close of business on the second scheduled trading day immediately preceding the maturity date, regardless of the foregoing circumstances.

See Note 8 for a full description of the Notes.

4. Segment Information

The Company accounts for its segment information in accordance with the provisions of ASC 280-10, “Segment Reporting.” ASC 280-10 establishes annual and interim reporting standards for operating segments of a company. ASC 280-10 requires disclosures of selected segment-related financial information about products, major customers, and geographic areas based on the Company’s internal accounting methods. The Company is organized into two operating segments for purposes of making operating decisions and assessing performance. The Business segment enables brands to leverage the Conversational Cloud’s sophisticated intelligence engine to connect with consumers through an integrated suite of mobile and online business messaging technologies. The Consumer segment facilitates online transactions between independent service providers (“Experts”) and individual consumers (“Users”) seeking information and knowledge for a fee via mobile and online messaging. Both segments currently generate their revenue primarily in the United States. The chief operating decision maker, who is the chief executive officer, evaluates performance, makes operating decisions, and allocates resources based on the operating income of each segment. The reporting segments follow the same accounting polices used in the preparation of the Company’s condensed consolidated financial statements which are described in the summary of Critical Accounting Policies and Estimates. The Company allocates cost of revenue, sales and marketing and amortization of purchased intangibles to the segments, but it does not allocate product development expenses, general and administrative expenses, restructuring costs and income tax expense because management does not use this information to measure performance of the operating segments. There are currently no inter-segment sales.

Summarized financial information by segment for the three months ended March 31, 2021, based on the Company’s internal financial reporting system utilized by the Company’s chief operating decision maker, follows (amounts in thousands):


	Business		Consumer		Corporate		Consolidated
Revenue:
Hosted services – Business	$	83,640	$	—	$	—	$	83,640
Hosted services – Consumer	—		9,011		—		9,011
Professional services	15,240		—		—		15,240
Total revenue	98,880		9,011		—		107,891
Cost of revenue	31,610		1,909		—		33,519
Sales and marketing	30,203		6,750		—		36,953
Amortization of purchased intangibles	375		—		—		375
Unallocated corporate expenses	—		—		50,672		50,672
Operating income (loss)	$	36,692	$	352	$	(50,672)	$	(13,629)

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

Summarized financial information by segment for the three months ended March 31, 2020, based on the Company’s internal financial reporting system utilized by the Company’s chief operating decision maker, follows (amounts in thousands):


	Business		Consumer		Corporate		Consolidated
Revenue:
Hosted services – Business	$	61,051	$	—	$	—	$	61,051
Hosted services – Consumer	—		6,240		—		6,240
Professional services	10,797		—		—		10,797
Total revenue	71,848		6,240		—		78,088
Cost of revenue	21,345		1,475		—		22,820
Sales and marketing	37,469		5,211		—		42,680
Amortization of purchased intangibles	405		—		—		405
Unallocated corporate expenses	—		—		45,375		45,375
Operating income (loss)	$	12,629	$	(446)	$	(45,375)	$	(33,192)

Geographic Information

The Company is domiciled in the United States and has international operations around the globe. The following table presents the Company’s long-lived assets by geographic region as of the dates presented (amounts in thousands):


	March 31,		December 31,
	2021		2020
United States	$	207,165	$	202,275
Israel	18,672		16,657
Australia	13,494		13,792
Netherlands	7,962		8,301
Other (1)	16,791		16,596
Total long-lived assets	$	264,084	$	257,621

(1) United Kingdom, Germany, Japan, France, and Italy

5. Goodwill and Intangible Assets

Goodwill

The changes in the carrying amount of goodwill for the three months ended March 31, 2021 are as follows (amounts in thousands):


	Business		Consumer		Consolidated
Balance as of December 31, 2020	$	87,168	$	8,024	$	95,192
Adjustments to goodwill:
Foreign exchange adjustment	(105)		—		(105)
Balance as of March 31, 2021	$	87,063	$	8,024	$	95,087

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

Intangible Assets

Intangible assets are summarized as follows (amounts in thousands):


	As of March 31, 2021
	Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount		Weighted Average Amortization Period
Amortizing intangible assets:
Technology	$	30,460	$	(27,183)	$	3,277	5.3 years
Customer relationships	16,974		(14,186)		2,788		8.4 years
Patents	5,876		(962)		4,914		13.2 years
Other	314		(235)		79		2.2 years
Total	$	53,624	$	(42,566)	$	11,058


	As of December 31, 2020
	Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount		Weighted Average Amortization Period
Amortizing intangible assets:
Technology	$	30,499	$	(26,818)	$	3,681	5.4 years
Customer relationships	16,981		(13,982)		2,999		8.4 years
Patents	5,076		(908)		4,168		12.5 years
Other	314		(235)		79		2.2 years
Total	$	52,870	$	(41,943)	$	10,927

Amortization expense is calculated over the estimated useful life of the asset. Aggregate amortization expense for intangible assets was $1.6 million and $0.7 million for the three months ended March 31, 2021 and 2020, respectively. For the three months ended March 31, 2021 and 2020, respectively, a portion of this amortization is included in cost of revenue. Estimated amortization expense for the next five years is as follows (amounts in thousands):


	Estimated Amortization Expense
Remaining 2021	$	1,977
2022	2,266
2023	985
2024	784
2025	223
Thereafter	4,823
Total	$	11,058

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

6. Property and Equipment

The following table presents the detail of property and equipment for the periods presented (amounts in thousands):


	March 31, 2021		December 31, 2020
Computer equipment and software	$	111,709	$	107,666

Internal-use software development costs	94,614		86,454
Finance lease right-of-use assets	9,157		10,045
	215,480		204,165
Less: accumulated depreciation	(104,166)		(98,110)
Total	$	111,314	$	106,055

7. Accrued Expenses and Other Current Liabilities

The following table presents the detail of accrued expenses and other current liabilities for the periods presented (amounts in thousands):


	March 31, 2021		December 31, 2020
Payroll and other employee related costs	$	27,299	$	39,820
Professional services and consulting and other vendor fees	48,477		38,796
Unrecognized tax benefits	2,032		2,039
Sales commissions	3,680		6,988

Restructuring (see Note 13)	4,914		4,732