Summary
LivePerson's first quarter of fiscal 2024 showed a business in transition. Revenue was $85.1 million, down 20.9% from the prior-year quarter. Customer churn and the exit of non-core business lines drove the decline. The MD&A also pointed to lower hosted services and professional services, and the March 2023 sale of Kasamba removed the Consumer segment. Operating loss was $36.4 million, down 11.3%, with the loss widening. Net loss was $35.6 million, down 104.5%, with the loss widening. Diluted EPS was a loss of $0.40, down 73.9%, with the loss widening. Operating margin was negative 42.7%, down 12.4 percentage points. The company still carries a heavy expense base against a smaller revenue base.
Non-GAAP results looked steadier. Adjusted EBITDA was $0.5 million, compared with a loss of $1.3 million in the prior-year quarter. Adjusted operating loss was $7.7 million, compared with an adjusted operating loss of $8.7 million. Operating cash flow was $1.1 million, up 118.6% from the prior-year quarter. Capital expenditures were $11.5 million, up 19.5%. Free cash flow was negative $10.4 million, compared with negative $15.5 million in the prior-year quarter. The company repaid $72.5 million in aggregate principal amount of its 2024 Notes on March 1, 2024. Management said the quarter demonstrated swift execution on strategic and financial priorities.
The company signed 40 deals in the quarter, including 12 new logos and 28 expansion renewals. New logo deals included a multinational digital entertainment company and a global distributor of electrical products and services. Expansion renewals included a large bank based in Australia and a global fast casual restaurant company. Trailing-twelve-months average revenue per enterprise and mid-market customer increased 11.6% to $625,000, up from approximately $560,000 in the comparable prior-year period. Revenue retention for enterprise and mid-market customers on the Conversational Cloud was approximately 89%, below the company's target range of 105% to 115% and below the comparable period in 2023. Deferred revenue was $92.4 million, down 15.8%. Remaining performance obligations were $296.7 million, down 19.3%. The installed base is shrinking even as average spend per customer rises.
For the second quarter of 2024, management guides to a year-over-year decline of (22)% to (18)% and adjusted EBITDA of $0 million to $5 million, a margin of 0% to 6.3%. For the full year 2024, the guide is a year-over-year decline of (24)% to (20)% and adjusted EBITDA of $15 million to $26 million, a margin of 5.0% to 8.3%. B2B Core recurring revenue is expected to represent 92% of total revenue in both periods. The full-year figures are on a like-for-like basis, excluding Kasamba contribution from 2023. The company does not provide a quantitative reconciliation of forward-looking adjusted EBITDA to GAAP because it cannot predict certain items without unreasonable efforts. CEO John Sabino said it will take time to see the financial results of operational improvements. CFO and COO John Collins pointed to a rightsized cost structure and an improved capital structure on the horizon.
The company still faces customer churn, a revenue retention rate below target, and a history of net losses and negative cash flows. It plans to refinance its 2026 Notes and may need additional financing. Named risks include lengthy sales cycles, delays in implementation cycles, payment-related risks, volatility in quarterly revenue and operating results, and regulation of privacy, data protection, and AI. The quarter showed progress on cost controls and cash flow, but the revenue decline and wider losses leave the turnaround unproven.
Forecast
Reported figures
GAAP, from SEC filings| Metric | Q1 FY2024 | Q4 FY2023 | QoQ | Q1 FY2023 | YoY |
|---|---|---|---|---|---|
| Revenue | $85.1M | $95.5M | -10.8% | $107.7M | -20.9% |
| Gross profit | $55.7M | $58.6M | -5.0% | $64.6M | -13.8% |
| Gross margin | 65.4% | 61.4% | +4.0 pp | 60.0% | +5.4 pp |
| Research & development | $30.1M | $29.9M | +0.9% | $36.5M | -17.5% |
| Sales & marketing | $30.1M | $32.4M | -6.9% | $34.5M | -12.6% |
| General & administrative | $21.8M | $21.6M | +0.9% | $31.4M | -30.8% |
| Total operating expenses | $121.5M | $136.1M | -10.7% | $140.3M | -13.4% |
| Operating income (loss) | -$36.4M | -$40.7M | +10.6% | -$32.7M | -11.3% |
| Operating margin | -42.7% | -42.6% | -0.1 pp | -30.3% | -12.4 pp |
| Net income (loss) | -$35.6M | -$40.5M | +12.1% | -$17.4M | -104.5% |
| Net margin | -41.9% | -42.5% | +0.6 pp | -16.2% | -25.7 pp |
| Diluted EPS | -$0.40 | -$0.52 | +$0.12 | -$0.23 | -$0.17 |
Risks
On May 10, 2024, the company received a Nasdaq notification that its closing bid price was below $1.00 for 30 consecutive trading days, and it has 180 calendar days to regain compliance. A delisting could impair trading liquidity and would constitute a fundamental change under the indenture governing the 2026 Notes.
Revenue decreased 21% to $85.1 million for the three months ended March 31, 2024 from $107.7 million in the comparable 2023 period, driven by decreases in hosted services of $15.8 million and professional services of approximately $6.7 million. The prior-year period included $7.1 million of hosted services from Kasamba, which was sold on March 20, 2023.
Revenue retention for enterprise and mid-market customers on the Conversational Cloud was approximately 89% in the first quarter of 2024, below the target range of 105% to 115% and below the comparable period in 2023. This metric reflects trailing twelve month changes from upsells, downsells and attrition.
MD&A states that the changing technology landscape related to the evolution of LLMs created opportunities for cost savings because the latest generation of LLMs can build a bot in minutes, reducing headcount previously devoted to bot-building. This shift may pressure the company's product differentiation and pricing as conversational AI becomes easier to replicate.
Cash, cash equivalents, and restricted cash were approximately $129.0 million as of March 31, 2024, a decrease of approximately $83.9 million from December 31, 2023, primarily due to repayment of $72.5 million in aggregate principal amount of the 2024 Notes. The company plans to refinance the 2026 Notes and had an accumulated deficit of approximately $892.6 million as of March 31, 2024.
Net loss widened to $35.6 million for the first quarter of 2024 from $17.4 million in the prior-year quarter, and operating loss widened to $36.4 million from $32.7 million. Operating margin declined to -42.7% from -30.3% over the same periods.
The company recorded a $3.6 million goodwill impairment and a $2.2 million impairment of intangibles and other assets in the first quarter of 2024, both attributable to the WildHealth reporting unit. These non-cash charges followed interim impairment tests.
The current portion of deferred revenue decreased 15.8% to $92.4 million and remaining performance obligations decreased 19.3% to $296.7 million at March 31, 2024 compared with the prior-year quarter. These declines may indicate reduced future revenue visibility.
SaaS KPIs
All quarters →Adjusted EBITDA
Free Cash Flow
Adjusted Operating Loss
Total Deals Signed
Expansion Renewals
Revenue Retention
Summary, forecast, risks and KPIs are extracted from LIVEPERSON INC's SEC filings for Q1 FY2024 (10-Q / 10-K and the 8-K earnings release); GAAP figures in the summary are checked against the reported XBRL data. They can contain errors; the filings are authoritative. Processed Oct 1, 2026.