lpsn-20210630
0001102993--12-312021Q1falseP1YP5YP10YP3YP4YP5Y00011029932021-01-012021-06-30xbrli:shares00011029932021-08-02iso4217:USD00011029932021-06-3000011029932020-12-31iso4217:USDxbrli:shares00011029932021-04-012021-06-3000011029932020-04-012020-06-3000011029932020-01-012020-06-300001102993us-gaap:CostOfSalesMember2021-04-012021-06-300001102993us-gaap:CostOfSalesMember2020-04-012020-06-300001102993us-gaap:CostOfSalesMember2021-01-012021-06-300001102993us-gaap:CostOfSalesMember2020-01-012020-06-300001102993us-gaap:SellingAndMarketingExpenseMember2021-04-012021-06-300001102993us-gaap:SellingAndMarketingExpenseMember2020-04-012020-06-300001102993us-gaap:SellingAndMarketingExpenseMember2021-01-012021-06-300001102993us-gaap:SellingAndMarketingExpenseMember2020-01-012020-06-300001102993us-gaap:GeneralAndAdministrativeExpenseMember2021-04-012021-06-300001102993us-gaap:GeneralAndAdministrativeExpenseMember2020-04-012020-06-300001102993us-gaap:GeneralAndAdministrativeExpenseMember2021-01-012021-06-300001102993us-gaap:GeneralAndAdministrativeExpenseMember2020-01-012020-06-300001102993us-gaap:ResearchAndDevelopmentExpenseMember2021-04-012021-06-300001102993us-gaap:ResearchAndDevelopmentExpenseMember2020-04-012020-06-300001102993us-gaap:ResearchAndDevelopmentExpenseMember2021-01-012021-06-300001102993us-gaap:ResearchAndDevelopmentExpenseMember2020-01-012020-06-300001102993us-gaap:CommonStockMember2020-12-310001102993us-gaap:TreasuryStockMember2020-12-310001102993us-gaap:AdditionalPaidInCapitalMember2020-12-310001102993us-gaap:RetainedEarningsMember2020-12-310001102993us-gaap:AccumulatedOtherComprehensiveIncomeMember2020-12-310001102993us-gaap:CommonStockMember2021-01-012021-03-310001102993us-gaap:AdditionalPaidInCapitalMember2021-01-012021-03-3100011029932021-01-012021-03-310001102993us-gaap:RetainedEarningsMember2021-01-012021-03-310001102993us-gaap:AccumulatedOtherComprehensiveIncomeMember2021-01-012021-03-310001102993us-gaap:CommonStockMember2021-03-310001102993us-gaap:TreasuryStockMember2021-03-310001102993us-gaap:AdditionalPaidInCapitalMember2021-03-310001102993us-gaap:RetainedEarningsMember2021-03-310001102993us-gaap:AccumulatedOtherComprehensiveIncomeMember2021-03-3100011029932021-03-310001102993us-gaap:CommonStockMember2021-04-012021-06-300001102993us-gaap:AdditionalPaidInCapitalMember2021-04-012021-06-300001102993us-gaap:RetainedEarningsMember2021-04-012021-06-300001102993us-gaap:AccumulatedOtherComprehensiveIncomeMember2021-04-012021-06-300001102993us-gaap:CommonStockMember2021-06-300001102993us-gaap:TreasuryStockMember2021-06-300001102993us-gaap:AdditionalPaidInCapitalMember2021-06-300001102993us-gaap:RetainedEarningsMember2021-06-300001102993us-gaap:AccumulatedOtherComprehensiveIncomeMember2021-06-300001102993us-gaap:CommonStockMember2019-12-310001102993us-gaap:TreasuryStockMember2019-12-310001102993us-gaap:AdditionalPaidInCapitalMember2019-12-310001102993us-gaap:RetainedEarningsMember2019-12-310001102993us-gaap:AccumulatedOtherComprehensiveIncomeMember2019-12-3100011029932019-12-310001102993us-gaap:CommonStockMember2020-01-012020-03-310001102993us-gaap:AdditionalPaidInCapitalMember2020-01-012020-03-3100011029932020-01-012020-03-310001102993srt:CumulativeEffectPeriodOfAdoptionAdjustmentMemberus-gaap:RetainedEarningsMember2019-12-310001102993srt:CumulativeEffectPeriodOfAdoptionAdjustmentMember2019-12-310001102993us-gaap:RetainedEarningsMember2020-01-012020-03-310001102993us-gaap:AccumulatedOtherComprehensiveIncomeMember2020-01-012020-03-310001102993us-gaap:CommonStockMember2020-03-310001102993us-gaap:TreasuryStockMember2020-03-310001102993us-gaap:AdditionalPaidInCapitalMember2020-03-310001102993us-gaap:RetainedEarningsMember2020-03-310001102993us-gaap:AccumulatedOtherComprehensiveIncomeMember2020-03-3100011029932020-03-310001102993us-gaap:CommonStockMember2020-04-012020-06-300001102993us-gaap:AdditionalPaidInCapitalMember2020-04-012020-06-300001102993us-gaap:RetainedEarningsMember2020-04-012020-06-300001102993us-gaap:AccumulatedOtherComprehensiveIncomeMember2020-04-012020-06-300001102993us-gaap:CommonStockMember2020-06-300001102993us-gaap:TreasuryStockMember2020-06-300001102993us-gaap:AdditionalPaidInCapitalMember2020-06-300001102993us-gaap:RetainedEarningsMember2020-06-300001102993us-gaap:AccumulatedOtherComprehensiveIncomeMember2020-06-3000011029932020-06-30xbrli:pure0001102993lpsn:HostedServicesBusinessMember2021-06-300001102993lpsn:HostedServicesBusinessMember2020-12-310001102993lpsn:HostedServicesConsumerMember2021-06-300001102993lpsn:HostedServicesConsumerMember2020-12-310001102993lpsn:ProfessionalServicesMember2021-06-300001102993lpsn:ProfessionalServicesMember2020-12-310001102993lpsn:HostedServicesBusinessMember2021-04-012021-06-300001102993lpsn:HostedServicesBusinessMember2020-04-012020-06-300001102993lpsn:HostedServicesBusinessMember2021-01-012021-06-300001102993lpsn:HostedServicesBusinessMember2020-01-012020-06-300001102993lpsn:HostedServicesConsumerMember2021-04-012021-06-300001102993lpsn:HostedServicesConsumerMember2020-04-012020-06-300001102993lpsn:HostedServicesConsumerMember2021-01-012021-06-300001102993lpsn:HostedServicesConsumerMember2020-01-012020-06-300001102993lpsn:ProfessionalServicesMember2021-04-012021-06-300001102993lpsn:ProfessionalServicesMember2020-04-012020-06-300001102993lpsn:ProfessionalServicesMember2021-01-012021-06-300001102993lpsn:ProfessionalServicesMember2020-01-012020-06-300001102993country:US2021-04-012021-06-300001102993country:US2020-04-012020-06-300001102993country:US2021-01-012021-06-300001102993country:US2020-01-012020-06-300001102993lpsn:OtherAmericasMember2021-04-012021-06-300001102993lpsn:OtherAmericasMember2020-04-012020-06-300001102993lpsn:OtherAmericasMember2021-01-012021-06-300001102993lpsn:OtherAmericasMember2020-01-012020-06-300001102993srt:AmericasMember2021-04-012021-06-300001102993srt:AmericasMember2020-04-012020-06-300001102993srt:AmericasMember2021-01-012021-06-300001102993srt:AmericasMember2020-01-012020-06-300001102993us-gaap:EMEAMember2021-04-012021-06-300001102993us-gaap:EMEAMember2020-04-012020-06-300001102993us-gaap:EMEAMember2021-01-012021-06-300001102993us-gaap:EMEAMember2020-01-012020-06-300001102993exch:XPST2021-04-012021-06-300001102993exch:XPST2020-04-012020-06-300001102993exch:XPST2021-01-012021-06-300001102993exch:XPST2020-01-012020-06-300001102993country:GB2021-04-012021-06-300001102993country:GB2020-04-012020-06-300001102993country:NL2021-04-012021-06-300001102993country:NL2020-04-012020-06-300001102993country:GB2021-01-012021-06-300001102993country:GB2020-01-012020-06-300001102993country:NL2021-01-012021-06-300001102993country:NL2020-01-012020-06-300001102993us-gaap:BilledRevenuesMember2020-12-310001102993us-gaap:UnbilledRevenuesMember2020-12-310001102993us-gaap:BilledRevenuesMember2021-01-012021-06-300001102993us-gaap:UnbilledRevenuesMember2021-01-012021-06-300001102993us-gaap:BilledRevenuesMember2021-06-300001102993us-gaap:UnbilledRevenuesMember2021-06-300001102993lpsn:SharesSubjectToOutstandingCommonStockOptionsAndEmployeeStockPurchasePlanMember2021-01-012021-06-300001102993lpsn:SharesSubjectToOutstandingCommonStockOptionsAndEmployeeStockPurchasePlanMember2020-01-012020-06-300001102993us-gaap:RestrictedStockUnitsRSUMember2021-01-012021-06-300001102993us-gaap:RestrictedStockUnitsRSUMember2020-01-012020-06-300001102993us-gaap:ConvertibleDebtMemberlpsn:ConvertibleSeniorNotesDue2024Member2019-03-012019-03-310001102993us-gaap:ConvertibleDebtMemberlpsn:ConvertibleSeniorNotesDue2024Member2019-03-310001102993us-gaap:ConvertibleDebtMemberlpsn:ConvertibleSeniorNotesDue2026Member2020-12-31lpsn:segment0001102993us-gaap:OperatingSegmentsMemberlpsn:BusinessMemberlpsn:HostedServicesBusinessMember2021-04-012021-06-300001102993us-gaap:OperatingSegmentsMemberlpsn:ConsumerMemberlpsn:HostedServicesBusinessMember2021-04-012021-06-300001102993us-gaap:CorporateNonSegmentMemberlpsn:HostedServicesBusinessMember2021-04-012021-06-300001102993us-gaap:OperatingSegmentsMemberlpsn:BusinessMemberlpsn:HostedServicesConsumerMember2021-04-012021-06-300001102993us-gaap:OperatingSegmentsMemberlpsn:HostedServicesConsumerMemberlpsn:ConsumerMember2021-04-012021-06-300001102993us-gaap:CorporateNonSegmentMemberlpsn:HostedServicesConsumerMember2021-04-012021-06-300001102993lpsn:ProfessionalServicesMemberus-gaap:OperatingSegmentsMemberlpsn:BusinessMember2021-04-012021-06-300001102993lpsn:ProfessionalServicesMemberus-gaap:OperatingSegmentsMemberlpsn:ConsumerMember2021-04-012021-06-300001102993lpsn:ProfessionalServicesMemberus-gaap:CorporateNonSegmentMember2021-04-012021-06-300001102993us-gaap:OperatingSegmentsMemberlpsn:BusinessMember2021-04-012021-06-300001102993us-gaap:OperatingSegmentsMemberlpsn:ConsumerMember2021-04-012021-06-300001102993us-gaap:CorporateNonSegmentMember2021-04-012021-06-300001102993us-gaap:OperatingSegmentsMemberlpsn:BusinessMemberlpsn:HostedServicesBusinessMember2020-04-012020-06-300001102993us-gaap:OperatingSegmentsMemberlpsn:ConsumerMemberlpsn:HostedServicesBusinessMember2020-04-012020-06-300001102993us-gaap:CorporateNonSegmentMemberlpsn:HostedServicesBusinessMember2020-04-012020-06-300001102993us-gaap:OperatingSegmentsMemberlpsn:BusinessMemberlpsn:HostedServicesConsumerMember2020-04-012020-06-300001102993us-gaap:OperatingSegmentsMemberlpsn:HostedServicesConsumerMemberlpsn:ConsumerMember2020-04-012020-06-300001102993us-gaap:CorporateNonSegmentMemberlpsn:HostedServicesConsumerMember2020-04-012020-06-300001102993lpsn:ProfessionalServicesMemberus-gaap:OperatingSegmentsMemberlpsn:BusinessMember2020-04-012020-06-300001102993lpsn:ProfessionalServicesMemberus-gaap:OperatingSegmentsMemberlpsn:ConsumerMember2020-04-012020-06-300001102993lpsn:ProfessionalServicesMemberus-gaap:CorporateNonSegmentMember2020-04-012020-06-300001102993us-gaap:OperatingSegmentsMemberlpsn:BusinessMember2020-04-012020-06-300001102993us-gaap:OperatingSegmentsMemberlpsn:ConsumerMember2020-04-012020-06-300001102993us-gaap:CorporateNonSegmentMember2020-04-012020-06-300001102993us-gaap:OperatingSegmentsMemberlpsn:BusinessMemberlpsn:HostedServicesBusinessMember2021-01-012021-06-300001102993us-gaap:OperatingSegmentsMemberlpsn:ConsumerMemberlpsn:HostedServicesBusinessMember2021-01-012021-06-300001102993us-gaap:CorporateNonSegmentMemberlpsn:HostedServicesBusinessMember2021-01-012021-06-300001102993us-gaap:OperatingSegmentsMemberlpsn:BusinessMemberlpsn:HostedServicesConsumerMember2021-01-012021-06-300001102993us-gaap:OperatingSegmentsMemberlpsn:HostedServicesConsumerMemberlpsn:ConsumerMember2021-01-012021-06-300001102993us-gaap:CorporateNonSegmentMemberlpsn:HostedServicesConsumerMember2021-01-012021-06-300001102993lpsn:ProfessionalServicesMemberus-gaap:OperatingSegmentsMemberlpsn:BusinessMember2021-01-012021-06-300001102993lpsn:ProfessionalServicesMemberus-gaap:OperatingSegmentsMemberlpsn:ConsumerMember2021-01-012021-06-300001102993lpsn:ProfessionalServicesMemberus-gaap:CorporateNonSegmentMember2021-01-012021-06-300001102993us-gaap:OperatingSegmentsMemberlpsn:BusinessMember2021-01-012021-06-300001102993us-gaap:OperatingSegmentsMemberlpsn:ConsumerMember2021-01-012021-06-300001102993us-gaap:CorporateNonSegmentMember2021-01-012021-06-300001102993us-gaap:OperatingSegmentsMemberlpsn:BusinessMemberlpsn:HostedServicesBusinessMember2020-01-012020-06-300001102993us-gaap:OperatingSegmentsMemberlpsn:ConsumerMemberlpsn:HostedServicesBusinessMember2020-01-012020-06-300001102993us-gaap:CorporateNonSegmentMemberlpsn:HostedServicesBusinessMember2020-01-012020-06-300001102993us-gaap:OperatingSegmentsMemberlpsn:BusinessMemberlpsn:HostedServicesConsumerMember2020-01-012020-06-300001102993us-gaap:OperatingSegmentsMemberlpsn:HostedServicesConsumerMemberlpsn:ConsumerMember2020-01-012020-06-300001102993us-gaap:CorporateNonSegmentMemberlpsn:HostedServicesConsumerMember2020-01-012020-06-300001102993lpsn:ProfessionalServicesMemberus-gaap:OperatingSegmentsMemberlpsn:BusinessMember2020-01-012020-06-300001102993lpsn:ProfessionalServicesMemberus-gaap:OperatingSegmentsMemberlpsn:ConsumerMember2020-01-012020-06-300001102993lpsn:ProfessionalServicesMemberus-gaap:CorporateNonSegmentMember2020-01-012020-06-300001102993us-gaap:OperatingSegmentsMemberlpsn:BusinessMember2020-01-012020-06-300001102993us-gaap:OperatingSegmentsMemberlpsn:ConsumerMember2020-01-012020-06-300001102993us-gaap:CorporateNonSegmentMember2020-01-012020-06-300001102993country:US2021-06-300001102993country:US2020-12-310001102993country:IL2021-06-300001102993country:IL2020-12-310001102993country:AU2021-06-300001102993country:AU2020-12-310001102993country:NL2021-06-300001102993country:NL2020-12-310001102993lpsn:UnitedKingdomGermanyJapanFranceItalyMember2021-06-300001102993lpsn:UnitedKingdomGermanyJapanFranceItalyMember2020-12-310001102993lpsn:BusinessMember2020-12-310001102993lpsn:ConsumerMember2020-12-310001102993lpsn:BusinessMember2021-01-012021-06-300001102993lpsn:ConsumerMember2021-01-012021-06-300001102993lpsn:BusinessMember2021-06-300001102993lpsn:ConsumerMember2021-06-300001102993lpsn:TechnologyMember2021-06-300001102993lpsn:TechnologyMember2021-01-012021-06-300001102993us-gaap:CustomerContractsMember2021-06-300001102993us-gaap:CustomerContractsMember2021-01-012021-06-300001102993us-gaap:PatentsMember2021-06-300001102993us-gaap:PatentsMember2021-01-012021-06-300001102993us-gaap:OtherIntangibleAssetsMember2021-06-300001102993us-gaap:OtherIntangibleAssetsMember2021-01-012021-06-300001102993lpsn:TechnologyMember2020-12-310001102993lpsn:TechnologyMember2020-01-012020-12-310001102993us-gaap:CustomerContractsMember2020-12-310001102993us-gaap:CustomerContractsMember2020-01-012020-12-310001102993us-gaap:PatentsMember2020-12-310001102993us-gaap:PatentsMember2020-01-012020-12-310001102993us-gaap:OtherIntangibleAssetsMember2020-12-310001102993us-gaap:OtherIntangibleAssetsMember2020-01-012020-12-310001102993lpsn:ComputerEquipmentAndSoftwareMember2021-06-300001102993lpsn:ComputerEquipmentAndSoftwareMember2020-12-310001102993us-gaap:SoftwareDevelopmentMember2021-06-300001102993us-gaap:SoftwareDevelopmentMember2020-12-310001102993us-gaap:ConvertibleDebtMemberlpsn:ConvertibleSeniorNotesDue2024Member2019-12-310001102993us-gaap:ConvertibleDebtMemberlpsn:ConvertibleSeniorNotesDue2024Member2019-06-30lpsn:equity_instrument00011029932019-06-30lpsn:day0001102993lpsn:ConvertibleSeniorNotesDue2024Member2019-06-300001102993lpsn:ConvertibleSeniorNotesDue2024Member2019-03-012019-03-310001102993lpsn:CappedCallsMember2019-06-3000011029932019-03-012019-03-310001102993us-gaap:ConvertibleDebtMemberlpsn:ConvertibleSeniorNotesDue2024Member2021-01-012021-06-300001102993us-gaap:ConvertibleDebtMemberlpsn:ConvertibleSeniorNotesDue2026Member2020-01-012020-12-310001102993us-gaap:ConvertibleDebtMemberlpsn:ConvertibleSeniorNotesDue2026Member2020-12-012020-12-310001102993lpsn:ConvertibleSeniorNotesDue2026Member2020-12-310001102993us-gaap:ConvertibleDebtMemberlpsn:ConvertibleSeniorNotesDue2026Member2021-01-012021-06-300001102993lpsn:CappedCallsMember2020-12-3100011029932020-12-012020-12-310001102993us-gaap:ConvertibleDebtMemberlpsn:ConvertibleSeniorNotesMember2021-06-300001102993us-gaap:ConvertibleDebtMemberlpsn:ConvertibleSeniorNotesMember2020-12-310001102993us-gaap:ConvertibleDebtMemberlpsn:ConvertibleSeniorNotesMember2021-04-012021-06-300001102993us-gaap:ConvertibleDebtMemberlpsn:ConvertibleSeniorNotesMember2020-04-012020-06-300001102993us-gaap:ConvertibleDebtMemberlpsn:ConvertibleSeniorNotesMember2021-01-012021-06-300001102993us-gaap:ConvertibleDebtMemberlpsn:ConvertibleSeniorNotesMember2020-01-012020-06-300001102993srt:MinimumMember2021-06-300001102993srt:MaximumMember2021-06-30lpsn:lease00011029932020-01-012020-12-310001102993us-gaap:FairValueInputsLevel1Memberus-gaap:FairValueMeasurementsRecurringMember2021-06-300001102993us-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel2Member2021-06-300001102993us-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsRecurringMember2021-06-300001102993us-gaap:FairValueMeasurementsRecurringMember2021-06-300001102993us-gaap:FairValueInputsLevel1Memberus-gaap:FairValueMeasurementsRecurringMemberlpsn:ContingentEarnOutMember2021-06-300001102993us-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel2Memberlpsn:ContingentEarnOutMember2021-06-300001102993us-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsRecurringMemberlpsn:ContingentEarnOutMember2021-06-300001102993us-gaap:FairValueMeasurementsRecurringMemberlpsn:ContingentEarnOutMember2021-06-300001102993us-gaap:FairValueInputsLevel1Memberus-gaap:FairValueMeasurementsRecurringMember2020-12-310001102993us-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel2Member2020-12-310001102993us-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsRecurringMember2020-12-310001102993us-gaap:FairValueMeasurementsRecurringMember2020-12-310001102993us-gaap:FairValueInputsLevel1Memberus-gaap:FairValueMeasurementsRecurringMemberlpsn:ContingentEarnOutMember2020-12-310001102993us-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel2Memberlpsn:ContingentEarnOutMember2020-12-310001102993us-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsRecurringMemberlpsn:ContingentEarnOutMember2020-12-310001102993us-gaap:FairValueMeasurementsRecurringMemberlpsn:ContingentEarnOutMember2020-12-310001102993us-gaap:SeniorDebtObligationsMemberus-gaap:FairValueMeasurementsRecurringMember2021-06-300001102993lpsn:ConversableIncAndAdvntageTecIncMember2018-12-310001102993lpsn:ContingentEarnOutMember2020-01-012020-12-310001102993lpsn:ContingentEarnOutMemberlpsn:AdvantageTecIncMember2020-01-012020-12-310001102993lpsn:ContingentEarnOutMember2021-01-012021-06-300001102993lpsn:ContingentEarnOutMember2020-12-310001102993lpsn:ContingentEarnOutMember2019-12-310001102993lpsn:ContingentEarnOutMemberlpsn:AdvantageTecIncMember2021-01-012021-06-300001102993lpsn:ContingentEarnOutMemberlpsn:AdvantageTecIncMember2020-01-012020-09-300001102993lpsn:ContingentEarnOutMember2020-01-012020-09-300001102993lpsn:ContingentEarnOutMember2021-06-300001102993lpsn:MatchingTrancheOneMember2021-01-012021-06-300001102993lpsn:MatchingTrancheTwoMember2021-01-012021-06-300001102993us-gaap:LetterOfCreditMemberlpsn:LetterOfCreditForSecurityDepositMember2021-06-300001102993us-gaap:EmployeeStockOptionMember2021-06-300001102993us-gaap:EmployeeStockOptionMember2021-01-012021-06-300001102993lpsn:EmployeeStockPurchasePlanMember2021-06-300001102993lpsn:IncentiveStockOptionMember2021-06-300001102993us-gaap:RestrictedStockUnitsRSUMember2020-12-310001102993us-gaap:RestrictedStockUnitsRSUMember2021-01-012021-06-300001102993us-gaap:RestrictedStockUnitsRSUMember2021-06-300001102993srt:MinimumMemberus-gaap:RestrictedStockUnitsRSUMember2021-01-012021-06-300001102993us-gaap:RestrictedStockUnitsRSUMembersrt:MaximumMember2021-01-012021-06-300001102993lpsn:OtherRestructuringRightOfUseAssetWriteDownMember2021-04-012021-06-300001102993lpsn:OtherRestructuringRightOfUseAssetWriteDownMember2020-04-012020-06-300001102993lpsn:OtherRestructuringRightOfUseAssetWriteDownMember2021-01-012021-06-300001102993lpsn:OtherRestructuringRightOfUseAssetWriteDownMember2020-01-012020-06-300001102993lpsn:OtherRestructuringPropertyAndEquipmentAbandonmentMember2021-04-012021-06-300001102993lpsn:OtherRestructuringPropertyAndEquipmentAbandonmentMember2020-04-012020-06-300001102993lpsn:OtherRestructuringPropertyAndEquipmentAbandonmentMember2021-01-012021-06-300001102993lpsn:OtherRestructuringPropertyAndEquipmentAbandonmentMember2020-01-012020-06-300001102993lpsn:OtherRestructuring.OtherLeaseRestructuringMember2021-04-012021-06-300001102993lpsn:OtherRestructuring.OtherLeaseRestructuringMember2020-04-012020-06-300001102993lpsn:OtherRestructuring.OtherLeaseRestructuringMember2021-01-012021-06-300001102993lpsn:OtherRestructuring.OtherLeaseRestructuringMember2020-01-012020-06-300001102993us-gaap:OtherRestructuringMember2021-04-012021-06-300001102993us-gaap:OtherRestructuringMember2020-04-012020-06-300001102993us-gaap:OtherRestructuringMember2021-01-012021-06-300001102993us-gaap:OtherRestructuringMember2020-01-012020-06-300001102993us-gaap:EmployeeSeveranceMember2021-04-012021-06-300001102993us-gaap:EmployeeSeveranceMember2020-04-012020-06-300001102993us-gaap:EmployeeSeveranceMember2021-01-012021-06-300001102993us-gaap:EmployeeSeveranceMember2020-01-012020-06-3000011029932021-05-242021-05-240001102993us-gaap:ForeignCountryMember2020-01-012020-12-310001102993us-gaap:ForeignCountryMember2021-01-012021-06-30

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(Mark One)
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 2021
or
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from ____________________ to ____________________

Commission File Number: 000-30141
LIVEPERSON, INC.
(Exact name of registrant as specified in its charter)
Delaware13-3861628
(State or other jurisdiction of incorporation or organization)(IRS Employer Identification No.)
530 7th Ave, Floor M1
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 classTrading Symbol(s)Name of each exchange on which registered
Common Stock, par value $0.001 per shareLPSNThe 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 FilerAccelerated Filer
Non-accelerated FilerSmaller 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 August 2, 2021, 69,765,416 shares of the registrant’s common stock were outstanding.
1


LIVEPERSON, INC.
June 30, 2021
FORM 10-Q
INDEX
PAGE
   
Item 1.
   
 
as of June 30, 2021 and December 31, 2020
   
 
for the Three and Six Months Ended June 30, 2021 and 2020
   
 
for the Three and Six Months Ended June 30, 2021 and 2020
   
for the Three and Six Months Ended June 30, 2021 and 2020
   
 
for the Six Months Ended June 30, 2021 and 2020
 
   
Item 2.
   
Item 3.
   
Item 4.
   
   
Item 1.
   
Item 1A.
   
Item 2.
   
Item 3.
   
Item 4.
   
Item 5.
   
Item 6.

2


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.


3


Part I. Financial Information
Item 1. Financial Statements
LIVEPERSON, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
 June 30,
2021
December 31,
2020
(In thousands)
ASSETS  
Current assets:  
Cash and cash equivalents$664,334 $654,152 
Accounts receivable, net of allowances of $5,837 and $5,344 as of June 30, 2021 and December 31, 2020, respectively
89,807 80,423 
Prepaid expenses and other current assets19,348 14,236 
Total current assets773,489 748,811 
Operating lease right of use assets (Note 9)
307 614 
Property and equipment, net (Note 6)
115,647 106,055 
Contract acquisition costs43,462 41,021 
Intangibles, net (Note 5)
10,970 10,927 
Goodwill (Note 5)
95,116 95,192 
Deferred tax assets3,600 2,032 
Other assets1,166 1,780 
Total assets$1,043,757 $1,006,432 
LIABILITIES AND STOCKHOLDERS’ EQUITY  
Current liabilities:  
Accounts payable$8,106 $14,115 
Accrued expenses and other current liabilities (Note 7)
97,567 99,870 
Deferred revenue (Note 2)
107,671 88,848 
Operating lease liability (Note 9)
2,711 5,718 
Total current liabilities216,055 208,551 
Deferred revenue, net of current portion (Note 2)
489 409 
Convertible senior notes, net (Note 8)
556,032 538,432 
Operating lease liability, net of current portion (Note 9)
3,250 7,180 
Deferred tax liability1,782 1,622 
Other liabilities4,457 6,304 
Total liabilities782,065 762,498 
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, 72,017,145 and 70,264,265 shares issued, 69,307,315 and 67,554,435 shares outstanding as of June 30, 2021 and December 31, 2020, respectively
72 70 
Additional paid-in capital696,923 635,672 
Treasury stock - 2,709,830 shares
(3)(3)
Accumulated deficit(434,199)(391,885)
Accumulated other comprehensive (loss) income(1,101)80 
Total stockholders’ equity261,692 243,934 
Total liabilities and stockholders equity
$1,043,757 $1,006,432 
See accompanying notes to condensed consolidated financial statements.
4


LIVEPERSON, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
    
Three Months EndedSix Months Ended
June 30,June 30,
 2021202020212020
(In thousands, except share and per share amounts)
Revenue$119,605 $91,603 $227,496 $169,691 
Costs and expenses: (1) (2)
  
Cost of revenue (3)
40,063 27,707 73,582 50,526 
Sales and marketing38,622 34,618 75,575 77,298 
General and administrative16,105 16,353 30,591 32,822 
Product development37,526 26,967 70,981 52,681 
Restructuring costs493  3,225 3,193 
Amortization of purchased intangibles374 404 749 809 
Total costs and expenses133,183 106,049 254,703 217,329 
Loss from operations(13,578)(14,446)(27,207)(47,638)
Other (expense) income, net:
Interest expense, net(9,281)(3,211)(18,410)(6,002)
Other income (expense), net2,338 (1,309)3,050 (1,975)
Total other (expense) income, net(6,943)(4,520)(15,360)(7,977)
Loss before provision for (benefit from) income taxes(20,521)(18,966)(42,567)(55,615)
Provision for (benefit from) income taxes598 (339)(253)13 
Net loss$(21,119)$(18,627)$(42,314)$(55,628)
Net loss per share of common stock:
Basic $(0.31)$(0.28)$(0.62)$(0.86)
Diluted $(0.31)$(0.28)$(0.62)$(0.86)
Weighted-average shares used to compute net loss per share:
Basic 69,057,129 65,650,782 68,482,653 65,023,302 
Diluted69,057,129 65,650,782 68,482,653 65,023,302 
(1)Amounts include stock-based compensation expense, as follows:
Cost of revenue $1,386 $2,199 $3,281 $3,448 
Sales and marketing 3,373 2,525 7,155 7,664 
General and administrative 3,110 4,083 5,760 6,811 
Product development 7,218 7,138 13,502 12,719 
(2)Amounts include depreciation expense, as follows:
Cost of revenue $2,634 $2,537 $5,168 $4,909 
Sales and marketing 615 620 1,218 1,287 
General and administrative 28 49 88 154 
Product development 3,696 2,532 7,104 4,924 
(3)Amounts include amortization of purchased intangibles, as follows:
Cost of revenue $1,184 $284 $2,359 $569 
See accompanying notes to condensed consolidated financial statements.
5


LIVEPERSON, INC.
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS
(UNAUDITED)

Three Months EndedSix Months Ended
June 30,June 30,
 2021202020212020
(In thousands)
Net loss$(21,119)$(18,627)$(42,314)$(55,628)
Foreign currency translation adjustment565 (1,931)(1,181)538 
Comprehensive loss$(20,554)$(20,558)$(43,495)$(55,090)
See accompanying notes to condensed consolidated financial statements.

6


LIVEPERSON, INC.
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY
(UNAUDITED)
Common StockTreasury StockAdditional
Paid-in
Capital
Accumulated
Deficit
Accumulated
Other
Comprehensive
Loss
SharesAmountSharesAmountTotal
(In thousands, except share data)
Balance as of December 31, 202070,264,265 $70 (2,709,830)$(3)$635,672 $(391,885)$80 $243,934 
Common stock issued upon exercise of stock options209,185 — — — 2,617 — — 2,617 
Common stock issued upon vesting of restricted stock units (RSU)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 Plan22,544 — — — 1,257 — — 1,257 
Net loss— — — — — (21,195)— (21,195)
Other comprehensive loss— — — — — — (1,746)(1,746)
Balance as of March 31, 202171,351,202 $71 (2,709,830)$(3)$674,695 $(413,080)$(1,666)$260,017 
Common stock issued upon exercise of stock options252,155 — — — 3,999 — — 3,999 
Common stock issued upon vesting of RSU252,218 1 — — (1)— —  
Stock-based compensation— — — — 9,524 — — 9,524 
Cash awards settled in shares of the Company’s common stock
137,300 — — — 7,578 — — 7,578 
Common stock issued under Employee Stock Purchase Plan24,270 — — — 1,128 — — 1,128 
Net loss— — — — — (21,119)— (21,119)
Other comprehensive loss— — — — — — 565 565 
Balance as of June 30, 202172,017,145 $72 (2,709,830)$(3)$696,923 $(434,199)$(1,101)$261,692 
See accompanying notes to condensed consolidated financial statements.
7


LIVEPERSON, INC.
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY - CONTINUED
(UNAUDITED)
Common StockTreasury StockAdditional
Paid-in
Capital
Accumulated
Deficit
Accumulated
Other
Comprehensive
Loss
SharesAmountSharesAmountTotal
(In thousands, except share data)
Balance as of December 31, 201966,543,073 $67 (2,709,830)$(3)$436,557 $(283,562)$(4,524)$148,535 
Common stock issued upon exercise of stock options199,215 — — — 1,955 — — 1,955 
Common stock issued upon vesting of RSU203,690 — — — — — —  
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 stock991,905 — — — 24,656 — — 24,656 
ASU 2016-13 (Topic 326) Adjustment (Note 1)— — — — — (729)— (729)
Common stock issued under Employee Stock Purchase Plan50,818 — — — 1,626 — — 1,626 
Net loss— — — — — (37,001)— (37,001)
Other comprehensive loss— — — — — — (2,469)(2,469)
Balance as of March 31, 202068,000,209 $68 (2,709,830)$(3)$474,606 $(321,292)$(6,993)$146,386 
Common stock issued upon exercise of stock options403,443 — — — 5,079 — — 5,079 
Common stock issued upon vesting of RSU298,114 1 — — — — — 1 
Stock-based compensation— — — — 7,433 — — 7,433 
Common stock issued under Employee Stock Purchase Plan29,711 — — — 1,111 — — 1,111 
Net loss— — — — — (18,627)— (18,627)
Other comprehensive loss— — — — — — 1,931 1,931 
Balance as of June 30, 202068,731,477 $69 (2,709,830)$(3)$488,229 $(339,919)$(5,062)$143,314 
See accompanying notes to condensed consolidated financial statements.
8


LIVEPERSON, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)    
Six Months Ended
June 30,
 20212020
(In thousands)
OPERATING ACTIVITIES:  
Net loss$(42,314)$(55,628)
Adjustments to reconcile net loss to net cash provided by operating activities:  
Stock-based compensation expense29,698 30,642 
Depreciation13,578 11,274 
Amortization of tenant allowance (258)
Amortization of purchased intangibles and finance leases3,108 1,378 
Amortization of debt issuance costs1,228 600 
Accretion of debt discount on convertible senior notes16,374 4,777 
Changes in fair value of contingent consideration (263)
Allowance for credit losses1,599 1,953 
Gain on settlement of leases(3,322) 
Deferred income taxes(1,408)54 
Changes in operating assets and liabilities: 
Accounts receivable(11,665)10,051 
Prepaid expenses and other current assets(3,938)(5,377)
Contract acquisition costs noncurrent(3,557)(4,348)
Other assets597 (28)
Accounts payable(6,548)(3,026)
Accrued expenses and other current liabilities20,527 14,235 
Deferred revenue20,126 5,979 
Operating lease liabilities(3,312)270 
Other liabilities(157)21 
Net cash provided by operating activities30,614 12,306 
INVESTING ACTIVITIES:  
Purchases of property and equipment, including capitalized software(23,172)(23,611)
Payments for intangible assets(1,375)(648)
Net cash used in investing activities(24,547)(24,259)
FINANCING ACTIVITIES:  
Principal payments for financing leases(1,728) 
Proceeds from issuance of common stock in connection with the exercise of options and ESPP9,001 9,123 
Payments on conversion of convertible senior notes(2) 
Net cash provided by financing activities7,271 9,123 
Effect of foreign exchange rate changes on cash and cash equivalents(1,882)(516)
Net increase (decrease) in cash, cash equivalents, and restricted cash11,456 (3,346)
Cash, cash equivalents, and restricted cash - beginning of year654,152 176,523 
Cash, cash equivalents, and restricted cash - end of year$665,608 $173,177 
Reconciliation of cash, cash equivalents, and restricted cash to condensed consolidated balance sheets
Cash and cash equivalents$664,334 $173,177 
Restricted cash in prepaid expenses and other current assets1,274  
Total cash, cash equivalents, and restricted cash$665,608 $173,177 
9


Six Months Ended
June 30,
 20212020
(In thousands)
Supplemental disclosure of other cash flow information:
Cash paid for income taxes$686 $3,124 
Cash paid for interest1,041 863 
Supplemental disclosure of non-cash investing and financing activities:
Purchase of property and equipment recorded in accounts payable$640 $1,198 
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 awards33,503 24,656 
Right of use assets obtained in exchange for operating lease liabilities (1)
 (1,050)
——————————————
(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.
See accompanying notes to condensed consolidated financial statements.
10

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)






Note 1. Description of Business and Basis of Presentation

LivePerson, Inc. (“LivePerson”, the “Company”, “we”, “our” 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.

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.

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, the Company has adopted an “employee-centric” workforce model that does not rely on traditional offices. During the second quarter of 2021, the Company decided to reoccupy some of its leased space to provide its employees with the option of working in an office space environment if they choose to do so.
11

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)






Basis of Presentation

The accompanying condensed consolidated financial statements as of June 30, 2021 and for the three and six months ended June 30, 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 June 30, 2021, and the consolidated results of operations, comprehensive loss, and cash flows for the interim periods ended June 30, 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.

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. We continue to monitor the effects of the COVID-19 pandemic, and our estimates and judgments may change materially as new events occur or additional information becomes available.

Foreign Currency Translation

The Company’s operations are conducted in various countries around the world and the financial statements of its foreign subsidiaries are reported in the applicable foreign currencies (functional currencies). Financial information is translated from the applicable functional currency to the U.S. dollar (the reporting currency) for inclusion in the Company’s consolidated financial statements. Income, expenses, and cash flows are translated at weighted average exchange rates prevailing during the fiscal period, and assets and liabilities are translated at fiscal period-end exchange rates. Resulting translation adjustments are included as a component of Accumulated other comprehensive income (loss) in stockholders’ equity. Foreign exchange transaction gain or losses are included in Other income (expense), net in the accompanying consolidated statements of operations.

Recently Issued Accounting Standards

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. In August 2020, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2020-06 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
12

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)





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. We are assessing what impact ASU 2020-06 will have on our condensed consolidated financial statements.     

Recently Adopted Accounting Pronouncements

Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes. In December 2019, the FASB issued ASU 2019-12, which 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. We adopted ASU 2019-12 in the first quarter of 2021 and determined that the ASU had no material impact on our condensed consolidated financial statements.

Note 2. Revenue Recognition 

The majority of our revenue is generated from monthly service revenues, which is inclusive of our platform usage pricing model, and related professional services from the sale of our services. Revenues are recognized when control of these services is transferred to our customers, in an amount that reflects the consideration we expect to be entitled to in exchange for those services. No single customer accounted for 10% or more of our total revenue for the six months ended June 30, 2021.

Remaining Performance Obligation

As of June 30, 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 $345.8 million. Approximately 92% of our 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.

Deferred Revenues

We record deferred revenues when cash payments are received or due in advance of our performance. The increase in the deferred revenue balance as of June 30, 2021 is primarily driven by cash payments received or due in advance of our performance obligations, partially offset by $81.9 million of revenues recognized that were included in the deferred revenue balance as of December 31, 2020.

13

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)





The following table presents deferred revenue by revenue source:
Deferred Revenue
June 30,
2021
December 31,
2020
(In thousands)
Hosted services – Business$105,239 $86,144 
Hosted services – Consumer889 835 
Professional services – Business1,543 1,869 
Total deferred revenue - short term$107,671 $88,848 
Professional services – Business489 409 
Total deferred revenue - long term$489 $409 
    
Disaggregated Revenue

The following table presents the Company’s revenues disaggregated by revenue source:
Three Months EndedSix Months Ended
June 30,June 30,
2021202020212020
(In thousands)
Revenue:
Hosted services – Business$95,092 $72,382 $178,732 $133,435 
Hosted services – Consumer9,810 7,587 18,821 13,826 
Professional services – Business14,703 11,634 29,943 22,430 
Total revenue$119,605 $91,603 $227,496 $169,691 

Revenue by Geographic Location

The following table presents the Company’s revenues attributable to domestic and foreign operations for the periods presented:
Three Months Ended June 30,Six Months Ended
June 30,June 30,
2021202020212020
(In thousands)
United States$80,924 $59,559 $149,706 $108,109 
Other Americas (1)
3,995 3,048 7,908 5,068 
Total Americas84,919 62,607 157,614 113,177 
EMEA (2) (4)
22,933 19,692 44,693 39,182 
APAC (3)
11,753 9,304 25,189 17,332 
Total revenue$119,605 $91,603 $227,496 $169,691 
—————————————
(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 $14.8 million and $12.5 million for the three months ended June 30, 2021 and 2020, respectively, and from the Netherlands of $1.2 million and $0.6 million for the three months ended June 30, 2021 and 2020, respectively. Includes revenues from the United Kingdom of $28.1 million and $25.1 million for the six months ended June 30, 2021 and 2020, respectively, and from the Netherlands of $2.5 million and $1.9 million for the six months ended June 30, 2021 and 2020, respectively.

14

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)





Information about Contract Balances

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

In some arrangements, we allow customers to pay for access to the Conversational Cloud over the term of the software license. We refer 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 our accounts receivable, unbilled receivables, contract acquisition costs, and deferred revenues are as follows:
Accounts ReceivableUnbilled ReceivableContract Acquisition
Costs
(Non-current)
Deferred Revenue (Current)Deferred Revenue
(Non-current)
(In thousands)
Opening balance as of December 31, 2020$61,801 $18,622 $41,021 $88,848 $409 
(Decrease) increase, net(2,936)12,320 2,441 18,823 80 
Ending balance as of June 30, 2021$58,865 $30,942 $43,462 $107,671 $489 

Accounts Receivable, Net

Accounts receivable are recorded at the invoiced amount and do not bear interest. The allowance for doubtful accounts is the Company’s best estimate of the amount of probable credit losses in the Company’s existing accounts receivable. The Company determines the allowance based on historical write-off experience. The Company reviews its allowance for doubtful accounts monthly. Past due balances over 90 days and over a specified amount are reviewed individually for collectability. All other balances are reviewed on a pooled basis. Account balances are charged off against the allowance after all means of collection have been exhausted and the potential for recovery is considered remote. Accounts receivable are written off against the allowance for uncollectible accounts when we determine amounts are no longer collectible.
Allowance for Doubtful Accounts
(In thousands)
Balance as of December 31, 2020$5,344 
Additions charged to costs and expenses1,599 
Deductions/write-offs(1,106)
Balance as of June 30, 2021$5,837 

Note 3. Net Loss Per Share
Basic earnings per share (“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.

A reconciliation of shares used in calculating basic and diluted net loss per share follows:
Three Months EndedSix Months Ended
June 30,June 30,
2021202020212020
Net loss (in thousands)$(21,119)$(18,627)$(42,314)$(55,628)
Weighted average number of shares outstanding, basic and diluted69,057,129 65,650,782 68,482,653 65,023,302 
Net loss per share, basic and diluted$(0.31)$(0.28)$(0.62)$(0.86)

15

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)





The anti-dilutive securities excluded from the shares used to calculate diluted net loss per share are as follows:
 As of June 30,
20212020
Shares subject to outstanding common stock options and employee stock purchase plan4,252,817 5,481,824 
Restricted stock units3,023,476 3,349,966 
7,276,293 8,831,790 

We expect to settle the principal amount of our 0.750% Convertible Senior Notes due 2024 (the “2024 Notes”) and our 0% Convertible Senior Notes due 2026 (the “2026 Notes” and together with the 2024 Notes, the “Notes”) upon conversion in cash and any excess over the principal amount in shares of our common stock. We use 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 our common stock for a given period exceeds the initial conversion price of 130% of $38.58 per share for the 2024 Notes and $75.23 per share for the 2026 Notes.

See Note 8 – Convertible Senior Notes and Capped Call Transactions for a full description of the Notes.

Note 4. Segment Information

We are 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 Experts and 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 our condensed consolidated financial statements which are described in Note 1 –Description of Business and Basis of Presentation. We allocate cost of revenue, sales and marketing, and amortization of purchased intangibles to the segments, but we do not allocate product development expenses, general and administrative expenses, restructuring costs, or 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 June 30, 2021, based on our internal financial reporting system utilized by our chief operating decision maker, follows:
BusinessConsumerCorporateConsolidated
(In thousands)
Revenue:
Hosted services – Business$95,092 $ $ $95,092 
Hosted services – Consumer 9,810  9,810 
Professional services – Business14,703   14,703 
Total revenue109,795 9,810