LPSN stock rose 14% in after-hours trading on August 4, 2020, after the company released its quarterly report.

LivePerson, Inc. (NASDAQ: LPSN), a leading provider of conversational solutions, today announced financial results for the second quarter ended June 30, 2020.

Second Quarter Highlights:

Total revenue was $91.6 million for the second quarter of 2020, an increase of 29% as compared to the same period last year. Within total revenue, business operations revenue for the second quarter of 2020 increased 30% year over year to $84.0 million, and revenue from consumer operations increased 24% year over year to $7.6 million.

LivePerson signed 7 seven-figure deals and 134 deals in total in the second quarter, including the addition of 47 new and 87 existing customer contracts. Trailing-twelve-months average revenue per enterprise and mid-market customer increased by greater than 25% in the second quarter to $395,000, up from $310,000 in the equivalent prior-year period.

“LivePerson delivered one of the best quarters in its history as it helped leading brands navigate one of the most challenging events in history,” said CEO and Founder, Rob LoCascio. “With work from home and social distancing the new normal, the concept of the traditional voice call center has become obsolete. Demand for our platform rose significantly in the second quarter as brands rushed to fill the void with AI-powered messaging. In fact, bot-powered conversations on our platform have doubled since year end. LivePerson’s leadership in Conversational AI has crystallized in this new environment, and I believe the launch of our Conversational Cloud marks another major milestone in what will become one of the greatest shifts in digital commerce and care.”

“LivePerson’s solid execution during one of the worst macro environments in modern history demonstrated the strength and agility of our business model,” added CFO John Collins. “Our strategy to protect our customer base and move upstream to larger opportunities paid off in the second quarter, as a greater than 25% increase in enterprise and mid-market ARPU and a revenue retention rate above our target range more than offset fewer planned deal signings. We also proved the leverage of our financial model, as internal automation initiatives and a healthy expense rigor helped the Company return to adjusted EBITDA profitability and deliver its first double-digit adjusted EBITDA margin in three years. With these favorable operating tailwinds, our outlook is strengthening, and we are raising guidance for 2020.”

Customer Expansion

During the second quarter, the Company signed contracts with the following new customers:

  • A multi-billion dollar global beauty retailer
  • A top 10 global automobile manufacturer
  • One of the largest global manufacturers of exercise equipment
  • A Fortune 500 consumer goods company
  • A top 10 U.S. Bank

The Company also expanded business with:

  • A top 3 U.S. property and casualty insurer
  • One of the 25 largest banks in the world
  • One of the largest e-commerce retailers in Japan
  • A multi-billion dollar global cosmetics company
  • One of the premier subscription music providers
  • Net Loss and Adjusted Operating Income (Loss)

Net loss for the second quarter of 2020 was $18.6 million or $0.28 per share, as compared to a net loss of $24.0 million or $0.38 per share in the second quarter of 2019. Adjusted operating income for the second quarter of 2020 was $3.5 million, as compared to an adjusted operating loss of $9.1 million in the second quarter of 2019. Adjusted operating income (loss) excludes amortization of purchased intangibles, stock-based compensation, other litigation and consulting costs, restructuring costs, acquisition costs, interest income (expense), and other expense (income).

Net loss in the second quarter of 2020 includes charges of $4.2 million or $0.06 per share. These charges are comprised of $2.8 million of non-cash interest expense, $1.0 million of IP litigation costs, and $0.3 million of consulting expenses. Net loss in the second quarter of 2019 included charges of $4.5 million or $0.07 per share, primarily associated with IP litigation costs, consulting services and non-cash interest expense.

LivePerson is entering the second half of 2020 with a favorable backdrop comprised of strong year-to-date contract signings, better-than-anticipated conversation volumes on our platform and a robust sales pipeline. The Company continues to balance this strengthening outlook with a healthy respect for the potential risks that may arise from a poor macroeconomic environment.

Considering these factors, the Company is raising revenue guidance for the full year 2020 to a range of $357.0 million to $361.0 million, up from previous guidance of $340.0 million to $355.0 million. The Company is targeting full year growth of 22% to 24%, up from 17% to 22% previously.

With regards to the bottom line, we expect that our focus on internal automation and a tight discipline around expense controls will enable the Company to continuing driving year-over-year profit improvements and margin expansion even while investing in key growth drivers of AI, product innovation, go-to-market capacity and tech infrastructure. With this in mind, the Company is raising guidance for 2020 adjusted EBITDA to a range of $16.0 million to $19.0 million, up from prior guidance of $3.5 million to $10.5 million.

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