LivePerson Shows Growth in Revenue and EBITDA vs. Prior Quarter

Cash Balance Holds Steady at $10.4 Million

NEW YORK, NY - July 25, 2002 - LivePerson, Inc. (NASDAQ: LPSN), a leading Application Service Provider (ASP) of technology facilitating real-time sales and customer service for companies doing business on the Internet, today announced financial results for the quarter ended June 30, 2002.

Revenue for the three months ended June 30, 2002 was $1.9 million, a 2.6% increase from $1.8 million in the prior quarter ended March 31, 2002, and flat vs. $1.9 million in the corresponding period of 2001.

EBITDA, or earnings/(loss) before interest, taxes, depreciation and amortization, for the three months ended June 30, 2002, was $122,000, as compared to $47,000 for the three months ended March 31, 2002, and $(3.2) million in the corresponding quarter of 2001.

Commenting on the results for the second quarter, Chief Executive Officer Robert LoCascio said, "We are pleased that we continued to make steady operating progress on both revenue and the bottom line this quarter. We increased EBITDA vs. the prior quarter and announced a number of new customers, including new contracts or added business with eBay, American Airlines Credit Union, EarthLink and Kinko's. We expect revenue to grow by approximately 15% in the third quarter, driven by both organic sales growth from new and existing clients, as well as from the previously announced acquisition of certain client contracts of NewChannel, Inc."

For the three months ended June 30, 2002, net loss was $(51,000) as compared to $(5.4) million for the three months ended March 31, 2002, and $(4.3) million in the corresponding quarter of 2001. Net loss included non-cash depreciation and stock compensation amortization charges of $207,000 for the quarter ended June 30, 2002, and $192,000 and $454,000 for the quarters ended March 31, 2002 and June 30, 2001, respectively. Net loss for the quarter ended March 31, 2002 also included a $5.3 million charge for the cumulative effect of an accounting change related to goodwill implemented in that quarter. Net loss for the quarter ended June 30, 2001 also included non-cash amortization of goodwill of $0.7 million and restructuring charges of $0.1 million.

Basic and diluted net loss per share for the three months ended June 30, 2002 was $(0.00), as compared to $(0.16) for the three months ended March 31, 2002, and $(0.13) for the corresponding quarter in 2001. Net loss per share for the period ending March 31, 2002 included a $(0.16) loss per share due to the cumulative effect of an accounting change related to goodwill implemented during that quarter.

The Company's cash balance at June 30, 2002 remained flat vs. the prior quarter at $10.4 million.

                             LivePerson, Inc.
             Condensed Consolidated Statements of Operations
             (In Thousands, Except Share and Per Share Data)

                                 Three Months Ended       Six Months Ended
                                       June 30,                June 30,
                                     (Unaudited)             (Unaudited)
                                   2002        2001        2002        2001

  Total revenues                 $1,873      $1,915      $3,699      $4,283

  Operating expenses:
    Cost of revenues                318       2,144         656       4,826
    Product development             281         883         577       2,135
    Sales and marketing             493       1,178       1,057       3,294
    General and
     administrative                 750       1,626       1,421       3,568
    Amortization of goodwill
     and other intangibles           --         743          --       1,485
    Non-cash compensation,
     net of reversals               116        (332)        218          43
    Non-cash compensation
     credit related to
     restructuring, net              --          --          --      (1,720)
    Restructuring charges            --         117          --       3,508
       Total operating
        expenses                  1,958       6,359       3,929      17,139

  Loss from operations              (85)     (4,444)       (230)    (12,856)

  Other income, net                  34         185          71         418

  Net loss before cumulative
   effect of accounting
   change                           (51)     (4,259)       (159)    (12,438)
  Cumulative effect of
   accounting change                 --          --      (5,338)         --

  Net loss                         $(51)    $(4,259)    $(5,497)   $(12,438)

  Basic and diluted net loss
   per share:
    Loss before cumulative
     effect of accounting
     change                      $(0.00)     $(0.13)     $(0.00)     $(0.37)

    Cumulative effect of
     accounting change               --          --       (0.16)         --

    Net loss                     $(0.00)     $(0.13)     $(0.16)     $(0.37)

  Weighted average shares
   outstanding used in basic
   and diluted
    net loss per share
     calculation             34,029,588  33,992,277  34,016,671  33,972,180


  Unaudited Supplemental Data
    The following information is not a financial measure under generally
    accepted accounting principles. In addition, it should not be construed
    as an alternative to any other measures of performance determined in
    accordance with generally accepted accounting  principles, or as an
    indicator of our operating performance, liquidity or cash flows
    generated by operating, investing and financing activities as there may
    be significant factors or trends that it fails to address. We present
    this financial information because we believe that it is helpful to some
    investors as one measure of our operations. We caution investors that
    this type of information departs from traditional accounting
    conventions; accordingly, its use can make it difficult to compare our
    results with our results from other reporting periods and with the
    results of other companies.

  Net loss in accordance
    with generally
    accepted accounting
    principles                         $(51)  $(4,259)  $(5,497)  $(12,438)
  Add/(Less)
    (a) Amortization of goodwill and
         other intangibles               --       743        --      1,485
    (b) Non-cash compensation, net of
         reversals                      116      (332)      218         43
    (c) Non-cash compensation credit
         related to restructuring, net   --        --        --     (1,720)
    (d) Depreciation                     91       786       181      1,642
    (e) Cumulative effect of
         accounting change               --        --     5,338         --
    (f) Interest income, net            (34)     (185)      (71)      (418)
  EBITDA (1)                           $122   $(3,247)     $169   $(11,406)

  (1)  Earnings before interest, taxes, depreciation and amortization.


                             LivePerson, Inc.
                  Condensed Consolidated Balance Sheets
             (In Thousands, Except Share and Per Share Data)



                                           June 30, 2002   December 31, 2001
                                              (unaudited)
  ASSETS

  Current assets:
    Cash, cash equivalents and
     marketable securities                       $10,426            $10,136
    Accounts receivable, net                         245                620
    Prepaid expenses and
     other current assets                            509                389
      Total current assets                        11,180             11,145

    Property and equipment, net                      763                915
    Goodwill and other
     intangibles, net                                 --              5,338
    Security deposits                                119                122
    Other assets                                     148                107
      Total assets                               $12,210            $17,627

  LIABILITIES AND STOCKHOLDERS' EQUITY

  Current liabilities:
    Accounts payable                                $672               $592
    Accrued expenses                               1,879              2,115
    Deferred revenue                                 527                560
      Total current liabilities                    3,078              3,267

  Other liabilities                                  129                 89

  Commitments and contingencies

  Total stockholders' equity                       9,003             14,271
          Total liabilities and
           stockholders' equity                  $12,210            $17,627


  About LivePerson

LivePerson (http://www.liveperson.com/) is a leading Application Service Provider (ASP) of technology facilitating real-time sales and customer service for companies doing business on the Internet. The LivePerson service enables online businesses to communicate with Internet users in real time, thereby enhancing the online experience. The LivePerson services, consisting of Chat, FAQ, Email and Document Management tools, offer clients the opportunity to increase sales, reduce customer service costs and increase responsiveness to customer needs. LivePerson is headquartered in New York City.

EBITDA Financial Disclosure:

Investors are cautioned that the EBITDA, or earnings/(loss) before interest, taxes, depreciation and amortization, information contained in this press release is not a financial measure under generally accepted accounting principles. In addition, it should not be construed as an alternative to any other measures of performance determined in accordance with generally accepted accounting principles, or as an indicator of our operating performance, liquidity or cash flows generated by operating, investing and financing activities, as there may be significant factors or trends that it fails to address. We present this financial information because we believe that it is helpful to some investors as one measure of our operations. We caution investors that non-GAAP financial information such as EBITDA, by its very nature, departs from traditional accounting conventions; accordingly, its use can make it difficult to compare our results with our results from other reporting periods and with the results of other companies.

Forward-Looking Statements:

Statements in this press release regarding LivePerson, Inc. that are not historical facts are forward-looking statements and are subject to risks and uncertainties that could cause such statements to differ materially from actual future events or results. Any such forward-looking statements are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. It is routine for our internal projections and expectations to change as the quarter progresses, and therefore it should be clearly understood that the internal projections and beliefs upon which the Company bases its expectations may change prior to the end of the quarter. Although these expectations may change, we are under no obligation to inform you if they do. Our company policy is generally to provide our expectations only once per quarter, and not to update that information until the next quarter. Actual events or results may differ materially from those contained in the projections or forward-looking statements. The following factors, among others, could cause LivePerson's actual results to differ materially from those described in a forward-looking statement: our possible delisting from the Nasdaq Small Cap Market; the limited history of providing the LivePerson services; our limited historical annual revenue and history of losses; the possible unavailability of financing as and if needed; an unproven business model; our dependence on the success of the LivePerson chat service; continued use by our clients of the LivePerson services; potential fluctuations in our quarterly and annual results; risks related to adverse business conditions experienced by our clients; our dependence on key employees; risks related to our international operation, particularly our operations in Tel Aviv, Israel, and the current civil and political unrest in that region; competition both for qualified personnel and in the market for real-time sales and customer service technology; building awareness of the LivePerson brand name; technology systems beyond LivePerson's control and technology-related defects that could disrupt the LivePerson services; our dependence on the growth of the Internet as a medium for commerce and the viability of the infrastructure of the Internet; and responding to rapid technological change. This list is intended to identify only certain of the principal factors that could cause actual results to differ from those discussed in the forward-looking statements. Readers are referred to the reports and documents filed from time to time by LivePerson with the Securities and Exchange Commission for a discussion of these and other important risk factors that could cause actual results to differ from those discussed in forward-looking statements.

   Contact:
   Maria Gomez
   LivePerson, Inc.
   212-609-4200
   mgomez@liveperson.com

                        Special Offer - Click Here
             http://tbutton.prnewswire.com/prn/28696X88223635

SOURCE: LivePerson

CONTACT: Younjee Kim, +1-212-609-4222, ykim@liveperson.com

Web site: http://www.liveperson.com/