Summary
LivePerson's second quarter 2025 revenue was $59.6 million, down 25.4% from the prior-year quarter. The decline came from customer cancellations and downsells. The company signed 38 deals in the quarter, including 35 existing customers and 3 new logos. Trailing-twelve-months average revenue per enterprise and mid-market customer increased 4.0% to $655,000, up from about $630,000 a year earlier. Revenue retention was about 78%, below the company's target range of 105% to 115% and below the comparable period in 2024. Management pointed to heightened renewal hesitation and slower new business bookings, driven by customer uncertainty about LivePerson's financial stability and broader macroeconomic factors that extended enterprise buying cycles. Headcount in cost of revenue fell to 176 from 202, sales and marketing to 221 from 250, and product development to 358 from 424, while general and administrative headcount was flat at 138. The company also reported a 45% sequential increase in conversations powered by its Generative AI suite and a deepened strategic partnership with Google Cloud.
The operating loss was $6.4 million, narrowed from $29.8 million in the prior-year quarter, and operating margin improved to negative 10.8% from negative 37.3%. Net loss was $15.7 million, or $0.17 per diluted share, compared with net income of $41.8 million in the prior-year quarter. The swing to a net loss was primarily due to a gain on debt extinguishment recorded in the second quarter of 2024. On a non-GAAP basis, adjusted operating loss was $2.7 million, compared with adjusted operating income of $0.5 million a year earlier. Adjusted EBITDA was $2.9 million, down from $8.2 million. For the first six months of 2025, the operating loss was $23.4 million, narrowed from $66.2 million, and operating margin improved to negative 18.8% from negative 40.1%. Net loss for the six months was $29.8 million, compared with net income of $6.2 million in the prior-year period. Diluted loss per share for the six months was negative $0.37, compared with negative $0.70 in the prior-year period.
Operating cash flow was negative $11.7 million for the quarter, up 34.9% from the prior-year quarter. Capital expenditures were $3.1 million, down 36.7% from the prior-year quarter. Free cash flow, a non-GAAP measure, was negative $14.8 million, compared with negative $22.9 million a year earlier. Deferred revenue was $57.2 million, down 28.0% from the prior-year quarter. Remaining performance obligations were $197.2 million, down 30.3% from the prior-year quarter. For the first six months of 2025, revenue was $124.3 million, down 24.7% from the first six months of 2024. Operating cash flow for the six months was negative $14.8 million, up 12.2% from the prior-year period. Capital expenditures for the six months were $6.9 million, down 58.1% from the prior-year period. Free cash flow for the six months was negative $21.7 million, compared with negative $33.3 million in the prior-year period.
Guidance for the third quarter of 2025 calls for a revenue decline of 25% to 21% year over year. Recurring revenue is expected to represent 93% of total revenue. Adjusted EBITDA guidance for the third quarter is negative $4 million to negative $2 million. For the full year 2025, the company guides to a revenue decline of 26% to 23% year over year. Full-year adjusted EBITDA guidance is negative $3 million to $7 million. The company also expects recurring revenue to be 93% of total revenue for the full year.
LivePerson completed a refinancing that captures $181 million of debt discount, deleverages the balance sheet by $226 million, and extends its runway through 2029. Management said the exchange shifts a greater proportion of enterprise value to shareholders. Risks remain. Revenue retention is well below target. Renewal hesitation and slower bookings persist. The company must refinance the remaining balance of its 2026 Notes on or prior to maturity. If more than $60.0 million principal amount of 2026 Notes remains outstanding 91 days before maturity, the 2029 Notes become immediately due and payable. The indenture for the 2029 Notes requires a minimum cash balance of $60 million at all times. The company also cited lengthy sales cycles, payment-related risks, competition, regulation and AI scrutiny, litigation, and risks related to its operations in Israel.
Forecast
Reported figures
GAAP, from SEC filings| Metric | Q2 FY2025 | Q1 FY2025 | QoQ | Q2 FY2024 | YoY |
|---|---|---|---|---|---|
| Revenue | $59.6M | $64.7M | -7.9% | $79.9M | -25.4% |
| Gross profit | $41.6M | $46.5M | -10.6% | $58.7M | -29.2% |
| Gross margin | 69.7% | 71.8% | -2.1 pp | 73.4% | -3.7 pp |
| Research & development | $13.8M | $16.0M | -13.7% | $24.8M | -44.3% |
| Sales & marketing | $19.9M | $23.5M | -15.3% | $26.5M | -24.9% |
| General & administrative | $7.9M | $16.8M | -52.7% | $24.4M | -67.5% |
| Total operating expenses | $66.0M | $81.6M | -19.1% | $109.7M | -39.8% |
| Operating income (loss) | -$6.4M | -$16.9M | +62.0% | -$29.8M | +78.4% |
| Operating margin | -10.8% | -26.2% | +15.4 pp | -37.3% | +26.5 pp |
| Net income (loss) | -$15.7M | -$14.1M | -11.2% | $41.8M | -137.6% |
| Net margin | -26.4% | -21.8% | -4.5 pp | 52.3% | -78.7 pp |
| Diluted EPS | -$0.17 | -$0.24 | +$0.07 | -$0.33 | +$0.16 |
Risks
On May 1, 2025, the company received a Nasdaq notification that the closing bid price of its common stock was less than $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 indentures governing the 2026 Notes and 2029 Notes.
Revenue retention for enterprise and mid-market customers on the LivePerson Platform was approximately 78% in Q2 2025, below the target range of 105% to 115% and below the comparable period in 2024. MD&A attributes heightened renewal hesitation and slower new business bookings to customer uncertainty about the company's financial stability and broader macroeconomic factors extending enterprise buying cycles.
As of June 30, 2025, the company had an accumulated deficit of $1,021.1 million and plans to refinance the remaining balance of the 2026 Notes. If more than $60.0 million principal amount of 2026 Notes remains outstanding 91 days prior to maturity, the 2029 Notes become immediately due and payable, and the 2029 Notes indenture requires a minimum cash balance of $60 million.
MD&A states that broader macroeconomic factors are extending enterprise buying cycles, contributing to slower than anticipated new business bookings. This pressure is reflected in revenue decreasing 25.4% to $59.6 million for FY2025 Q2 and 24.7% to $124.3 million for FY2025 year to date.
SaaS KPIs
All quarters →Adjusted EBITDA
Free Cash Flow
Adjusted Operating Loss
Total Deals Signed
Summary, forecast, risks and KPIs are extracted from LIVEPERSON INC's SEC filings for Q2 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.