Summary
LivePerson reported third quarter 2025 total revenue of $60.2 million, down 19.0% from the prior-year quarter. Year-to-date revenue was $184.5 million, down 22.9%. The decline came from customer cancellations and downsells, with hosted services and professional services both lower. Operating loss narrowed to $14.6 million, a 9.0% improvement from the prior-year quarter. Operating margin was -24.2%, down 2.6 percentage points. For the first nine months, operating loss narrowed 53.8% to $38.0 million, and operating margin improved to -20.6%, up 13.8 percentage points. Net income was $8.7 million, swinging to a profit from a net loss in the prior-year quarter. A gain on troubled debt restructuring drove that swing. Year-to-date net loss narrowed 4.6% to $21.1 million. Diluted EPS was a loss of $2.76, narrower than the prior-year quarter. Year-to-date diluted EPS loss widened 91.4% to $7.16.
Cash generation weakened. Operating cash flow was -$6.0 million for the quarter, down 224.7% from the prior-year quarter. Year-to-date operating cash flow was -$20.8 million, down 73.0%. Capital expenditures were $2.9 million, down 42.8%, and year-to-date capital expenditures were $9.8 million, down 54.5%. Deferred revenue was $56.0 million, down 25.9% from the prior-year quarter. Remaining performance obligations were $182.4 million, down 41.7%. Those declines point to pressure on future billings and backlog. On a non-GAAP basis, adjusted EBITDA was $4.8 million, compared with $7.3 million in the prior-year quarter. Adjusted operating loss was $0.7 million, compared with adjusted operating income of less than $0.1 million in the prior-year quarter.
Operational metrics offered a mixed picture. Trailing-twelve-months average revenue per enterprise and mid-market customer rose 5.6% to $665,000, up from approximately $630,000. Revenue retention was approximately 80%, above the comparable period in 2024 but below the target range of 105% to 115%. LivePerson signed 28 deals in the quarter, including 26 existing customer expansions and renewals and 2 new logos. New logos included a global industrial company, while expansions included a leading U.S. health plan provider, a leading amusement park and entertainment company, and Sanlam. For the fourth quarter of 2025, guidance calls for revenue to decline 31% to 24% year over year. Recurring revenue is expected to represent 93% of total revenue. Adjusted EBITDA is guided to negative $0.3 million to $4.7 million, or a margin of (0.6)% to 8.5%. For the full year 2025, guidance calls for revenue to decline 25% to 23% year over year. Recurring revenue is expected to represent 93% of total revenue. Adjusted EBITDA is guided to $7.5 million to $12.5 million, or a margin of 3.2% to 5.2%.
Management flagged several risks. Renewal hesitation and slower than anticipated new business bookings continue, driven by customer uncertainty about LivePerson's financial stability and broader macroeconomic factors that extend enterprise buying cycles. High-value AI solutions face additional compliance approvals. Competition is intense, with aggressive investment in artificial intelligence by rivals. Restructuring costs rose because of the 2025 Restructuring Plan, which is expected to be substantially complete by December 31, 2025. The indenture for the 2029 notes requires a minimum cash balance of $60.0 million. The company also carries a substantial accumulated deficit. Those factors keep the path to sustainable free cash flow uncertain even as cost cuts and product launches continue.
Forecast
Reported figures
GAAP, from SEC filings| Metric | Q3 FY2025 | Q2 FY2025 | QoQ | Q3 FY2024 | YoY |
|---|---|---|---|---|---|
| Revenue | $60.2M | $59.6M | +0.9% | $74.2M | -19.0% |
| Gross profit | $42.9M | $41.6M | +3.3% | $49.7M | -13.6% |
| Gross margin | 71.4% | 69.7% | +1.6 pp | 66.9% | +4.4 pp |
| Research & development | $13.4M | $13.8M | -3.4% | $22.9M | -41.6% |
| Sales & marketing | $18.2M | $19.9M | -8.3% | $22.8M | -20.2% |
| General & administrative | $11.0M | $7.9M | +38.0% | $17.7M | -38.0% |
| Total operating expenses | $74.7M | $66.0M | +13.2% | $90.3M | -17.2% |
| Operating income (loss) | -$14.6M | -$6.4M | -126.8% | -$16.0M | +9.0% |
| Operating margin | -24.3% | -10.8% | -13.5 pp | -21.6% | -2.6 pp |
| Net income (loss) | $8.7M | -$15.7M | +155.4% | -$28.3M | +130.8% |
| Net margin | 14.5% | -26.4% | +40.8 pp | -38.1% | +52.6 pp |
| Diluted EPS | -$2.76 | -$0.17 | -$2.59 | -$0.32 | -$2.44 |
Risks
On October 13, 2025, the Company effected a 1-for-15 reverse stock split to regain compliance with Nasdaq's minimum $1.00 bid price requirement. If it fails to satisfy the minimum bid price requirement again before October 13, 2026, it will not be eligible for a 180-day compliance period and Nasdaq will take steps to delist, which would also constitute a fundamental change under the indentures governing the 2026 Notes, 2029 Notes and Second Lien Notes.
Revenue decreased by 19% to $60.2 million for the three months ended September 30, 2025 and by 23% to $184.5 million for the nine months ended September 30, 2025, primarily due to customer cancellations and downsells and a decrease in professional services.
Revenue retention for enterprise and mid-market customers was approximately 80% in the third quarter of 2025, above the comparable period in 2024 but below the target range of 105% to 115%. The Company observes heightened renewal hesitation and slower than anticipated new business bookings, driven by customer uncertainty regarding financial stability and broader macroeconomic factors extending enterprise buying cycles.
The Company operates in a competitive environment characterized by aggressive investment in artificial intelligence and other technological innovation by competitors with significant resources and investment capital, requiring continued investment in public cloud migration and the LivePerson Platform.
The indenture governing the 2029 Notes requires a minimum cash balance of $60.0 million at all times (excluding proceeds of the 2029 Notes). The 2026 Notes, 2029 Notes and Second Lien Notes are subject to repurchase at holder option upon a Fundamental Change, and events of default could result in acceleration of amounts owed. The Company had an accumulated deficit of $1,012.4 million as of September 30, 2025.
Net cash used in operating activities was $20.8 million for the nine months ended September 30, 2025, compared to $12.0 million used in the prior-year period. Cash and cash equivalents decreased by $76.6 million from December 31, 2024 to $106.7 million as of September 30, 2025.
Restructuring costs increased by 543% to $9.3 million for the three months ended September 30, 2025 and by 42% to $11.2 million for the nine months ended September 30, 2025, primarily due to the 2025 Restructuring Plan. The Company expects the 2025 restructuring activities to be substantially completed by December 31, 2025, but execution risks remain.
No goodwill impairment was recorded in the three and nine months ended September 30, 2025. However, if financial performance does not meet expectations or a prolonged decline occurs in the market price of common stock, it may cause a material change in the impairment assessment and result in future goodwill impairment.
SaaS KPIs
All quarters →Adjusted EBITDA
Free Cash Flow
Adjusted Operating Loss
Summary, forecast, risks and KPIs are extracted from LIVEPERSON INC's SEC filings for Q3 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 2, 2026.