Summary
LivePerson reported first quarter 2025 revenue of $64.7 million, down 24.0% from the prior-year quarter. The decline came primarily from customer cancellations and downsells. The company narrowed its operating loss to $16.9 million, an improvement of $19.4 million. Net loss narrowed to $14.1 million, an improvement of $21.5 million. Diluted EPS was -$0.24, an improvement of $0.16. Operating margin improved to -26.2%, up 16.5 percentage points. Adjusted EBITDA was $0.2 million, compared with $0.5 million in the prior-year quarter. Adjusted operating loss was $5.4 million, compared with $7.7 million. The cost base is smaller, but revenue is shrinking faster than the company can cut.
Operational activity offered some bright spots. LivePerson signed 50 deals in the quarter, consisting of 45 existing and 5 new customers. Expansions and renewals included IBM, one of the world's largest banks, and a global financial technology platform. New logos included one of Canada's largest retailers and a digital entertainment company. Trailing-twelve-months average revenue per enterprise and mid-market customer increased 2.4% to $640,000, up from approximately $625,000 in the comparable prior-year period. Management said adoption of the Generative AI suite continued to grow among enterprise customers. The company plans to launch an integration with Amazon Connect in the second quarter. Headcount at period end fell across major functions: cost of revenue to 179 from 229, sales and marketing to 229 from 287, general and administrative to 137 from 143, and product development to 351 from 468. The deal mix shows the company is still winning new logos, but the total deal count of 50 is modest relative to the installed base.
Guidance points to more near-term pressure. For the second quarter of 2025, management expects total revenue to decline (29)% to (25)% year over year. Recurring revenue is expected to represent 93% of total revenue. Second quarter adjusted EBITDA is guided to $(4) million to $(2) million, a margin of (7.0)% to (3.3)%. For the full year 2025, management expects total revenue to decline (23)% to (18)% year over year. Recurring revenue is again expected to be 93% of total revenue. Full year adjusted EBITDA is guided to $(14) million to $0 million, a margin of (5.8)% to 0.0%. The full year expectations are unchanged from the previous earnings release. Management kept the full year outlook unchanged, which suggests no change to its plan despite the first quarter revenue decline.
The biggest risk is customer retention. Revenue retention for enterprise and mid-market customers was approximately 80% in the first quarter, below the company's target range of 105% to 115% and below the comparable period in 2024. Management sees heightened risk for the remainder of the current renewal cycle with customers who likely made renewal decisions before the new customer success motion was installed. The last set of customers in this risk category has renewal dates in the first half of 2025. As a result, the company expects short-term attrition to continue through the first half of 2025 and revenue to decline sequentially, with a transition toward positive net new annual recurring revenue expected in the second half of 2025. Cash flow weakened. Operating cash flow was -$3.1 million, down 381.7% from the prior-year quarter. Capital expenditures were $3.8 million, down 67.3%. Deferred revenue was $61.4 million, down 33.6% from the prior-year quarter. Remaining performance obligations were $221.1 million, down 25.5%. The company plans to refinance the remaining balance of the 2026 Notes on or prior to maturity. If more than $60.0 million principal amount of 2026 Notes remains outstanding 91 days prior to maturity, the 2029 Notes become due and payable. The indenture governing the 2029 Notes requires a minimum cash balance of $60 million. AI risk and compliance are adding deal complexity, and the company operates in highly competitive markets with ongoing regulatory scrutiny.
Forecast
Reported figures
GAAP, from SEC filings| Metric | Q1 FY2025 | Q4 FY2024 | QoQ | Q1 FY2024 | YoY |
|---|---|---|---|---|---|
| Revenue | $64.7M | $73.2M | -11.6% | $85.1M | -24.0% |
| Gross profit | $46.5M | $55.0M | -15.5% | $55.7M | -16.5% |
| Gross margin | 71.8% | 75.2% | -3.3 pp | 65.4% | +6.4 pp |
| Research & development | $16.0M | $22.0M | -27.2% | $30.1M | -46.8% |
| Sales & marketing | $23.5M | $21.0M | +11.7% | $30.1M | -22.1% |
| General & administrative | $16.8M | $16.1M | +4.2% | $21.8M | -22.8% |
| Total operating expenses | $81.6M | $174.2M | -53.1% | $121.5M | -32.8% |
| Operating income (loss) | -$16.9M | -$101.0M | +83.2% | -$36.4M | +53.4% |
| Operating margin | -26.2% | -138.0% | +111.8 pp | -42.7% | +16.5 pp |
| Net income (loss) | -$14.1M | -$112.1M | +87.4% | -$35.6M | +60.3% |
| Net margin | -21.8% | -153.2% | +131.3 pp | -41.9% | +20.0 pp |
| Diluted EPS | -$0.24 | -$1.26 | +$1.02 | -$0.40 | +$0.16 |
Risks
On May 1, 2025, the company received a Nasdaq notification that its closing bid price was below $1.00 for 30 consecutive trading days, giving it 180 calendar days to regain compliance. A delisting could impair trading liquidity and constitute a Fundamental Change under the indentures governing the 2026 Notes and 2029 Notes.
Revenue retention for enterprise and mid-market customers on the LivePerson Platform was approximately 80% in Q1 2025, below the target range of 105% to 115% and below the comparable 2024 period. Management expects short-term attrition to continue through the first half of 2025 and revenue to decline sequentially as a result.
The company plans to refinance the remaining 2026 Notes before maturity; if more than $60.0 million principal remains outstanding 91 days prior to maturity, the 2029 Notes become immediately due and payable. The 2029 Notes indenture also requires a minimum cash balance of $60 million, and accumulated deficit was $1,005.4 million as of March 31, 2025. Operating cash flow was -$3.1 million for Q1 2025 versus $1.1 million in the prior-year quarter.
Revenue decreased 24% to $64.7 million for Q1 2025 from $85.1 million in the prior-year quarter, while deferred revenue declined 33.6% and remaining performance obligations declined 25.5% versus the prior-year quarter. Management expects revenue to decline sequentially through the first half of 2025 before a transition toward positive net new annual recurring revenue in the second half.
SaaS KPIs
All quarters →Adjusted EBITDA
Free Cash Flow
Adjusted Operating Loss
Total Deals Signed
Revenue Retention
Summary, forecast, risks and KPIs are extracted from LIVEPERSON INC's SEC filings for Q1 FY2025 (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.