Summary
LivePerson reported third quarter 2022 revenue of $129.6 million, up 9.5% from $118.3 million in the prior-year quarter. Year-to-date revenue reached $392.3 million, up 13.4% from $345.8 million. The backlog looks sturdier than the income statement. Remaining performance obligations were $430.5 million at September 30, 2022, up 16.3% from $370.3 million a year earlier. Deferred revenue, current portion only, came in at $103.2 million, flat against the prior-year quarter with a 0.3% increase.
Profitability moved the other way. The operating loss was $48.5 million for the quarter, wider than the $20.8 million loss a year earlier, and operating margin fell to negative 37.4% from negative 17.6%, a drop of 19.9 percentage points. Net loss was $43.2 million, or $0.56 per diluted share, against $32.8 million, or $0.47 per diluted share, in the prior-year quarter. For the first nine months, the net loss was $184.0 million, or $2.39 per diluted share, compared with $75.1 million, or $1.09 per diluted share, a year earlier. Management attributed much of the gap to a cost realignment program launched in the second quarter that reoriented the global product and engineering organization and shifted spending toward customer success and go-to-market work.
Non-GAAP results look better. Adjusted EBITDA was $9.1 million for the quarter, up from $6.9 million a year earlier, and adjusted operating income was $2.0 million against an immaterial adjusted operating loss in the prior-year quarter. The CFO said the cost reductions should support double-digit adjusted EBITDA margins and positive free cash flow in 2023.
Cash generation remains the weak spot. Operating cash flow was negative $15.1 million for the quarter, down from positive $5.0 million in the prior-year quarter, and negative $79.5 million for the first nine months, down from positive $35.6 million. Capital expenditures were $10.0 million in the quarter, down 6.0%, and $35.2 million year to date, up 4.1%. Free cash flow, which the company defines as operating cash flow less purchases of property and equipment, was negative $25.1 million for the quarter and negative $114.7 million for the nine months.
Sales activity held up in parts of the business. LivePerson signed 7 seven-figure deals among 86 total deals in the quarter, split between 29 new and 57 existing customer contracts. The aggregate number of new logo deals fell year over year, but enterprise new logos rose 14% and dollar bookings on new logos rose 20%. Trailing-twelve-month average revenue per enterprise and mid-market customer climbed 18% to $675,000 from roughly $570,000. Revenue retention for enterprise and mid-market customers sat just below the company's 105% to 115% target range.
Guidance for the fourth quarter of 2022 calls for revenue growth of approximately 1% to 4% year over year and adjusted EBITDA of $14.9 million to $24.0 million, a 12% to 19% margin at the midpoint of the revenue range. For the full year 2022, the company raised its revenue growth outlook to 10% to 11% year over year from a prior range of 8% to 10.4%, and reaffirmed full-year adjusted EBITDA of $1.0 million to $10.0 million. Non-GAAP gross margin guidance stays at 72% to 74% for both the fourth quarter and the full year.
Risks cluster around demand and cost. Management tied slower sales cycles to current macro-environmental factors, and retention sits below target. Litigation and consulting costs, restructuring charges and stock-based compensation all weigh on GAAP results. The company also carries currency exposure, integration risk from recent acquisitions, competition in a crowded conversational AI market, and operations in Israel and Ukraine. Management said current cash and cash equivalents should cover working capital needs for at least the next 12 months, while noting it may seek additional financing if needed.
Forecast
Reported figures
GAAP, from SEC filings| Metric | Q3 FY2022 | Q2 FY2022 | QoQ | Q3 FY2021 | YoY |
|---|---|---|---|---|---|
| Revenue | $129.6M | $132.6M | -2.3% | — | — |
| Gross profit | $85.9M | $87.5M | -1.9% | — | — |
| Gross margin | 66.3% | 66.0% | +0.3 pp | — | — |
| Research & development | $44.7M | $55.8M | -19.7% | — | — |
| Sales & marketing | $49.4M | $60.0M | -17.6% | — | — |
| General & administrative | $32.2M | $30.2M | +6.4% | — | — |
| Total operating expenses | $178.1M | $202.8M | -12.2% | — | — |
| Operating income (loss) | -$48.5M | -$70.2M | +30.9% | — | — |
| Operating margin | -37.4% | -53.0% | +15.6 pp | — | — |
| Net income (loss) | -$43.2M | -$75.4M | +42.7% | — | — |
| Net margin | -33.4% | -56.9% | +23.5 pp | — | — |
| Diluted EPS | -$0.56 | -$0.98 | +$0.42 | — | — |
Risks
Operating loss widened to $48.5 million in FY2022 Q3 from $20.8 million in FY2021 Q3, and net loss widened to $43.2 million from $32.8 million, with operating margin down 19.9 pp to -37.4% for the quarter. Year-to-date operating loss widened to $183.0 million from $48.0 million.
Operating cash flow fell to -$15.1 million in FY2022 Q3 from $5.0 million in FY2021 Q3, and to -$79.5 million year to date from $35.6 million, with an accumulated deficit of approximately $650.6 million as of September 30, 2022. Management notes it may need to raise additional equity or debt if current cash is insufficient.
Enterprise and mid-market revenue retention on the Conversational Cloud was just below the 105% to 115% target range for Q3 2022, and management attributed sales cycles to current macro-environmental factors. Consumer revenue decreased 1% year to date on lower consumer demand.
Restructuring costs rose 449% to $17.9 million for the nine months ended September 30, 2022, driven by a Q2 2022 initiative to realign the cost structure and reorient the global product and engineering organization. Severance and related compensation costs were $7.1 million in the quarter alone.
The allowance for doubtful accounts increased to approximately $8.5 million as of September 30, 2022 from $6.3 million at December 31, 2021, and one customer exceeded 10% of total accounts receivable as of September 30, 2022. A significant write-off from a large customer could materially affect results.
Recent acquisitions of e-bot7, VoiceBase, Tenfold and WildHealth drove higher amortization of purchased intangibles and contingent consideration, with general and administrative expenses up 93% year to date partly on $30.5 million of contingent consideration. Goodwill is tested annually and impairment could be required if cash flow assumptions change.
SaaS KPIs
All quarters →Adjusted EBITDA
Free Cash Flow
Adjusted Operating Income
Total Customers
Remaining Performance Obligations (RPO)
Total Deals
Summary, forecast, risks and KPIs are extracted from LIVEPERSON INC's SEC filings for Q3 FY2022 (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.