Summary
LivePerson closed fiscal 2025 with a smaller loss but a much smaller revenue base. Fourth-quarter revenue fell 19.0% to $59.29 million from $73.21 million in the prior-year quarter. For the full year, revenue dropped 22.0% to $243.74 million from $312.47 million. The top-line pressure came from slower renewals and new business bookings. Management tied that to customer uncertainty about the company's financial stability and broader macroeconomic and industry factors that are extending enterprise buying cycles, including for high-value AI solutions that can require additional compliance reviews. Hosted services and professional services both declined.
The loss narrowed sharply. Fourth-quarter operating loss was $40.74 million, an improvement from an operating loss of $100.99 million in the prior-year quarter. Full-year operating loss was $78.70 million, better than the $183.20 million operating loss in 2024. Net loss for the quarter was $46.10 million, compared with a net loss of $112.13 million a year earlier. Full-year net loss was $67.23 million, down from $134.27 million. Diluted EPS for the full year was -$12.39, compared with -$22.70 in 2024. Operating margin improved to -68.7% in the quarter from -138.0%, and to -32.3% for the full year from -58.6%.
Cash generation remains a weak spot. Operating cash flow was -$9.65 million in the quarter, worse than -$3.12 million in the prior-year quarter. For the full year, operating cash flow was -$30.44 million, compared with -$15.13 million in 2024. Capital expenditures were $2.30 million in the quarter, down from $3.64 million a year earlier, and $12.09 million for the full year, down from $25.14 million. Deferred revenue, current portion, was $54.30 million at year-end, down 6.4% from $57.98 million a year earlier. Remaining performance obligations were $175.60 million, down 24.4% from $232.30 million. Those declines point to a smaller backlog and less visibility.
Management's key performance metrics show the same strain. Average annual revenue per enterprise and mid-market customer rose to $680,000 in 2025 from $625,000 in 2024. Revenue retention for enterprise and mid-market customers on the LivePerson Platform was 78%, below the long-range target of 105% to 115%, and down from 82% in 2024. The company said it expects current cash and cash equivalents to satisfy working capital and capital requirements for at least the next 12 months. It also expects current cash and cash equivalents and cash from operations to fund capital expenditures for at least the next 12 months. The indenture governing the 2029 Notes requires a minimum cash balance of $60.0 million at all times, excluding proceeds of the 2029 Notes.
LivePerson has cut costs through restructuring. The 2025 restructuring activities were substantially completed by December 31, 2025. Headcount fell across cost of revenue, sales and marketing, general and administrative, and product development. The company also continued to invest in public cloud migration and the LivePerson Platform. Management noted that competitors are investing aggressively in artificial intelligence and other technological innovation, which raises the competitive bar. Those actions helped narrow losses, but they have not yet stabilized revenue. The main risks are clear: continued customer concern about financial stability, renewal and booking delays, retention well below target, negative operating cash flow, and debt covenants that restrict liquidity. Management may need to refinance or repurchase debt, and the 2026 Notes, 2029 Notes, and Second Lien Notes are subject to repurchase at the option of holders upon a fundamental change.
Forecast
No forward guidance in this quarter's filings.
Reported figures
GAAP, from SEC filings| Metric | Q4 FY2025 | Q3 FY2025 | QoQ | Q4 FY2024 | YoY |
|---|---|---|---|---|---|
| Revenue | $59.3M | $60.2M | -1.4% | $73.2M | -19.0% |
| Gross profit | $43.4M | $42.9M | +1.0% | $55.0M | -21.2% |
| Gross margin | 73.2% | 71.4% | +1.8 pp | 75.2% | -2.0 pp |
| Research & development | $11.5M | $13.4M | -14.4% | $22.0M | -48.0% |
| Sales & marketing | $14.2M | $18.2M | -22.2% | $21.0M | -32.5% |
| General & administrative | $8.7M | $11.0M | -20.2% | $16.1M | -45.7% |
| Total operating expenses | $100.0M | $74.7M | +33.8% | $174.2M | -42.6% |
| Operating income (loss) | -$40.7M | -$14.6M | -179.3% | -$101.0M | +59.7% |
| Operating margin | -68.7% | -24.3% | -44.5 pp | -138.0% | +69.3 pp |
| Net income (loss) | -$46.1M | $8.7M | -629.2% | -$112.1M | +58.9% |
| Net margin | -77.8% | 14.5% | -92.2 pp | -153.2% | +75.4 pp |
| Diluted EPS | -$5.34 | -$2.76 | -$2.58 | -$1.26 | -$4.08 |
Risks
MD&A reports revenue retention for enterprise and mid-market customers was 78% in 2025, below the long-range target of 105% to 115% and down from 82% in 2024. It attributes slower renewals and new business bookings to customer uncertainty about LivePerson's financial stability and broader macroeconomic and industry factors extending enterprise buying cycles, including for high-value AI solutions.
Cash and cash equivalents were $95.0 million as of December 31, 2025, a decrease of $88.2 million from December 31, 2024. FY2025 year-to-date operating cash flow was negative $30.44 million, down 101.2% from negative $15.13 million in the prior-year period, and net loss was $67.2 million.
The 2029 Notes indenture requires a minimum cash balance of $60.0 million at all times, and outstanding debt includes $20.1 million of 2026 Notes, $221.9 million of 2029 Notes, and $182.0 million of Second Lien Notes accruing 10.0% interest. Failure to comply could cause default and acceleration.
MD&A states LivePerson operates in a competitive environment characterized by aggressive investment in artificial intelligence and other technological innovation by competitors with significant resources and investment capital. Risk factors also cite AI-native companies and emerging startups using generative AI and LLMs that may bypass traditional workflows or displace established interfaces.
LivePerson effected a 1-for-15 reverse stock split on October 13, 2025 to regain compliance with Nasdaq's minimum bid price requirement. If it fails the minimum bid price requirement again before or on October 13, 2026, it will not be eligible for a 180-day compliance period and Nasdaq will take steps to delist, which could also trigger a fundamental change under its notes.
The filing says sales cycles can be several months or more and that high-value AI solutions can require additional approvals related to compliance reviews, extending enterprise buying cycles. It also notes quarterly sales are uneven with a disproportionate percentage occurring in the last month, weeks, and days of each quarter.
LivePerson recorded $41.6 million of goodwill impairment for the year ended December 31, 2025 as a result of its fourth-quarter interim impairment test. The filing notes prior impairments and that future impairment could require significant charges to earnings.
Restructuring costs were $11.7 million for the year ended December 31, 2025, up 5% from $11.1 million in 2024, and the filing says there can be no assurance further restructuring will not be necessary or that intended operational efficiencies and cost savings will be realized. It warns restructuring may cause loss of institutional knowledge, strain the workforce, and reduce ability to pursue innovation.
The company is migrating its technology infrastructure to the public cloud, a major undertaking that could disrupt business processes, financial reporting, information systems, and internal controls. The filing warns of customer migration issues, service interruptions, increased cyber threats, and unanticipated implementation costs.
The business is subject to evolving U.S. and international privacy, data protection, and AI laws, including GDPR fines of up to 20 million Euros or 4% of global annual revenue. The UK Data (Use and Access) Act 2025 and the EU digital omnibus initiative increase uncertainty and may require changes to processes and procedures.
Prior to completing public cloud migration, LivePerson is exposed to risks from legacy infrastructure, prior customization, aging systems, and third-party technologies. It also notes its globally distributed remote workforce and use of contractors in higher cybercrime countries may increase cybersecurity and insider risk.
SaaS KPIs
All quarters →Summary, forecast, risks and KPIs are extracted from LIVEPERSON INC's SEC filings for Q4 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.