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LPSN Nasdaq· LivePerson Inc.
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LPSN Nasdaq· LivePerson Inc.
Earnings report Q3 2023

LivePerson's Revenue Declines 22% in Latest Quarter

Segments of revenue

LivePerson's revenue for the three months ended September 30, 2023, decreased by 22% to $101.3 million compared to $129.6 million in the same period last year. The company's Business segment, which enables brands to connect with consumers through the Conversational Cloud, generated all of the revenue.

Strengths

Despite the decline in revenue, LivePerson's gross profit margin increased to 68% from 66%, indicating improved profitability. The company also managed to reduce its cost and expenses by 19% to $145.0 million from $178.1 million, which contributed to the higher gross profit margin. Additionally, LivePerson's Average Annual Revenue per enterprise and mid-market customer (ARPC) increased by approximately 13% to $595,000 for the trailing twelve months ended September 30, 2023, compared to $525,000 for the same period last year. This growth in ARPC suggests that LivePerson is successfully generating more revenue from each customer.

Challenges

LivePerson faced a net loss of $53.3 million in the latest quarter, an increase from the net loss of $43.2 million in the same period last year. This indicates that the company's expenses and costs reduction was not sufficient to offset the decline in revenue. Furthermore, LivePerson's revenue retention for enterprise and mid-market customers on the Conversational Cloud was below the target range of 105% to 115% for the third quarter of 2023 and comparable period in 2022. This suggests that the company struggled to retain its existing customers and generate additional revenue from them.

Noteworthy

LivePerson's revenue decline of 22% in the latest quarter is a significant decrease. However, the company's increase in gross profit margin and ARPC growth indicate some positive aspects of its financial performance. It is worth noting that LivePerson's revenue retention for enterprise and mid-market customers fell below the target range, which could be a cause for concern.

Summary

LivePerson experienced a 22% decline in revenue for the three months ended September 30, 2023. Despite this decline, the company managed to increase its gross profit margin and ARPC. However, LivePerson faced challenges with a net loss and revenue retention below the target range. The company will need to address these weaknesses and focus on customer retention to improve its financial performance in the future.

Source documents

Form 10-Q  filed on Nov 09, 2023
104 pages scanned

Reference data

Company financials Q3 revenue 95.5M
Analyst estimates Q3 EPS missed by -407.81%
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