Summary
LivePerson closed fiscal 2024 with a much smaller revenue base and a far wider loss. Fourth-quarter revenue fell 23.3% to $73.2 million. Full-year revenue dropped 22.3% to $312.5 million. The fourth-quarter operating loss was $101.0 million, and the operating margin was negative 138.0%, down 95.4 percentage points from the prior-year quarter. For the full year, the operating loss was $183.2 million, and the operating margin was negative 58.6%, down 30.9 percentage points. Net loss was $112.1 million in the quarter and $134.3 million for the full year. Diluted EPS for the full year was negative $1.51, and the loss widened by $0.23. The quarter and the year both show a business that is shrinking faster than it can cut costs. Hosted services and professional services both declined, with hosted services hit by customer cancellations and downsells.
Cash flow and backlog tell a similar story. Fourth-quarter operating cash flow was negative $3.1 million, down 168.7% from the prior-year quarter. Full-year operating cash flow was negative $15.1 million, up 23.5% from the prior year. Capital expenditures were $3.6 million in the quarter, down 41.5%, and $25.1 million for the full year, down 12.3%. Deferred revenue was $58.0 million, down 29.2% from the prior-year quarter. Remaining performance obligations were $232.3 million, down 26.8%. The company also faces a minimum cash covenant of $60 million on its 2029 Notes and plans to refinance the remaining 2026 Notes. Those obligations keep liquidity and refinancing risk near the center of the story.
Operational metrics show retention pressure. Average annual revenue per enterprise and mid-market customer increased to approximately $625,000 in 2024 from approximately $610,000 in 2023. Revenue retention for enterprise and mid-market customers was approximately 82% in 2024, below the target range of 105% to 115%, down from 95% in 2023 and up from 79% for the trailing twelve months ended September 30, 2024. Management expects short-term attrition to continue into 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. The company sees heightened risk with customers whose renewal dates fall in the first half of 2025. The retention rate remains far below the target range, and the renewal cycle is the key swing factor for 2025. ARPC rose even as retention fell, which suggests the remaining customer base is larger on average but less sticky.
Cost cuts and impairments shaped the full-year results. Revenue declines came from customer cancellations and downsells. Management has been restructuring the organization to align with a smaller business model. Goodwill impairment and impairment of intangibles and other assets weighed heavily on full-year results. The company also sold WildHealth in June 2024 and Kasamba in March 2023. The company has cut costs across sales and marketing, general and administrative, and product development, and headcount is down in those functions. It continued to invest in public cloud migration and new platform features. Liquidity remains a focus. The company had an accumulated deficit and has historically incurred net losses and negative cash flows. It plans to refinance the remaining 2026 Notes and must maintain a minimum cash balance under the 2029 Notes indenture.
Execution on the new customer success motion and the 2025 renewal cycle will determine whether the business stabilizes. The company expects short-term attrition to continue into the first half of 2025 and revenue to decline sequentially. It expects a transition toward positive net new annual recurring revenue in the second half of 2025. The retention rate of approximately 82% remains well below the target range of 105% to 115%. The company sees heightened risk with customers whose renewal dates fall in the first half of 2025. The cost base is smaller, but revenue is falling faster. The balance sheet and debt maturities add another layer of risk. Until retention improves and net new annual recurring revenue turns positive, the path back to growth remains uncertain.
Forecast
Reported figures
GAAP, from SEC filings| Metric | Q4 FY2024 | Q3 FY2024 | QoQ | Q4 FY2023 | YoY |
|---|---|---|---|---|---|
| Revenue | $73.2M | $74.2M | -1.4% | $95.5M | -23.3% |
| Gross profit | $55.0M | $49.7M | +10.7% | $58.6M | -6.1% |
| Gross margin | 75.2% | 66.9% | +8.2 pp | 61.4% | +13.8 pp |
| Research & development | $22.0M | $22.9M | -3.9% | $29.9M | -26.2% |
| Sales & marketing | $21.0M | $22.8M | -8.0% | $32.4M | -35.0% |
| General & administrative | $16.1M | $17.7M | -9.0% | $21.6M | -25.3% |
| Total operating expenses | $174.2M | $90.3M | +93.0% | $136.1M | +28.0% |
| Operating income (loss) | -$101.0M | -$16.0M | -529.7% | -$40.7M | -148.3% |
| Operating margin | -138.0% | -21.6% | -116.4 pp | -42.6% | -95.4 pp |
| Net income (loss) | -$112.1M | -$28.3M | -296.1% | -$40.5M | -176.7% |
| Net margin | -153.2% | -38.1% | -115.0 pp | -42.5% | -110.7 pp |
| Diluted EPS | -$1.26 | -$0.32 | -$0.94 | -$0.52 | -$0.74 |
Risks
Revenue retention for enterprise and mid-market customers on the LivePerson Platform was approximately 82% in 2024, below the target range of 105% to 115%, a decline from the 95% retention rate in 2023. MD&A expects short-term attrition to continue into 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.
Revenue decreased 22.3% year to date to $312.47 million for FY2024 from $401.98 million for FY2023, and Q4 revenue decreased 23.3% to $73.21 million from $95.47 million. Operating loss widened to $183.20 million year to date from $111.38 million, and net loss widened to $134.27 million from $100.44 million.
The company has $361.2 million aggregate principal amount of 0% Convertible Notes due December 2026 and $207.1 million of First Lien Convertible Senior Notes due 2029; the 2029 Notes come due 91 days before the 2026 Notes if more than $60.0 million principal of 2026 Notes remains outstanding. MD&A states it continues to plan to refinance the remaining 2026 Notes and cannot assure funding will be available on favorable terms.
The 2029 Notes indenture requires a minimum cash balance of $60.0 million at all times and restricts dispositions, mergers, debt, liens, dividends, and investments. Failure to comply could result in an event of default and acceleration of debt.
Goodwill impairment was $60.6 million for FY2024, primarily $56.9 million from the October 1, 2024 test, and intangibles and other assets impairment was $46.9 million. Risk factors note past impairments and possible significant future charges if stock price, market capitalization, or cash flow estimates decline.
The common stock closing bid price was below $1.00 for six trading days as of the filing and on multiple occasions during 2024. Continued trading below $1.00 may fail Nasdaq continued listing requirements, and delisting would constitute a fundamental change under the 2026 and 2029 Notes indentures.
Markets for mobile and online business messaging, digital engagement, and AI technology are intensely competitive; competitors include eGain, Genesys, Nuance, Oracle, Salesforce.com, Twilio, Meta Platforms, Google, and WeChat, many with greater resources. Failure to innovate or integrate AI could cause loss of revenue and market share.
As of December 31, 2024, the company had an accumulated deficit of $991.3 million and recorded a net loss of $134.3 million for FY2024. Operating cash flow was negative $15.13 million year to date, though it improved 23.5% versus the prior-year period.
The business depends on sales to telecommunications, financial services, retail, travel, consumer/retail, automotive, and technology industries. A downturn in one or more of these industries could cause cancellations, non-renewal, reduced demand, and customer payment difficulties.
The sales cycle can be several months or more, with a disproportionate percentage of quarterly sales occurring in the last month, weeks, and days of each quarter. Implementation lag has historically ranged from 30 to 90 days but may take longer, and delays could materially impact the timing of revenue.
The company experiences cyber-attacks regularly, and prior to public cloud migration its legacy infrastructure has customization, aging, obsolescence, and embedded risk. Remote work arrangements and use of contractors in countries with higher cybercrime rates may increase the risk of cybersecurity incidents or data breaches.
The business is subject to GDPR, UK GDPR, e-Privacy, and evolving AI laws; noncompliance could result in fines up to the higher of 20 million Euros or 4% of global annual revenue. Increased public scrutiny of privacy, security, and AI issues could increase compliance costs and legal obligations.
Success depends on senior management and key sales and development personnel, and the technology industry has substantial competition for key personnel. Remote work arrangements may present workplace culture challenges, and staff attrition could harm the ability to provide services and innovate.
The contingent pricing arrangement program ties pricing to customer financial objectives such as increased revenue or reduced operating costs. If the company is unsuccessful in achieving these objectives, recognized revenue could be reduced and the program could operate at a financial loss.
As of December 31, 2024, the company had 68 full-time employees in Israel, and political, economic, and military conditions, including the Israel-Hamas war, could negatively impact operations. Escalation may require military reserve service by Israeli employees and harm business.
The company is the subject of a number of ongoing actions that have resulted in significant expense. Adverse developments in ongoing or future actions could have a material adverse effect on business, results of operations, and financial condition.
As of December 31, 2024, the company had federal net operating loss carryforwards of $644.0 million, and the ability to use them may be limited by Section 382 ownership changes. The Tax Benefits Preservation Plan may not prevent an ownership change and could deter a third party from acquiring the company.
SaaS KPIs
All quarters →Summary, forecast, risks and KPIs are extracted from LIVEPERSON INC's SEC filings for Q4 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.