LivePerson Second Quarter Revenue Increases 51%; Raises 2003 Revenue Guidance

Company posts first quarterly GAAP profit and generates $0.4 million in net cash

NEW YORK, NY - July 23, 2003 - LivePerson, Inc. (NASDAQ: LPSN), a provider of technology facilitating real-time online customer interaction, today announced financial results for the second quarter ended June 30, 2003.

Revenue for the quarter was $2.8 million, a 51% increase from the prior year, and a 12% sequential increase versus the first quarter of 2003. Revenue growth from the prior year was driven by a combination of new clients, existing client growth and the impact of the NewChannel asset acquisition that occurred in July 2002. Revenue growth from the prior quarter was driven by expansion in all product lines, including Sales Edition, Service Edition, and LivePerson Pro for small businesses.

"Sales momentum with large corporate clients enabled LivePerson to more than double our growth expectations to 12% sequential growth for the quarter," CEO Robert LoCascio stated. "We are beginning to see the impact of investments we've made over the past two years in product development, sales staff and direct marketing efforts. As a result, we're increasing our revenue expectation for 2003 from $11.0 million to $11.5 million, representing a 40% increase in revenue from 2002."

As in the first quarter, a combination of new customer wins, increased revenue from existing clients and a greater proportion of new clients purchasing the higher-priced Sales Edition drove LivePerson's sequential growth. New clients added during the quarter include GeoLearning, Hewlett-Packard and Toyota, while growth continued within existing clients including eBay, Forex and Kaplan Education.

Net income for the quarter was $4,000 or $0.00 per share, as compared to a net loss of $(83,000) or $(0.00) per share in the prior quarter, and a net loss of $(51,000), or $(0.00) per share in the second quarter of 2002. A non-cash stock compensation charge and the costs of the Company's first Customer Summit reduced net income in the quarter by approximately $0.1 million.

Earnings before interest, taxes, depreciation and amortization (EBITDA) for the second quarter was $409,000 versus $122,000 in the second quarter of 2002. A reconciliation of the differences between EBITDA and the most comparable financial measure calculated and presented in accordance with generally accepted accounting principles (GAAP) is located under the heading "Reconciliation of Non-GAAP Financial Information to GAAP" immediately following the Condensed Consolidated Statements of Operations included in this press release.

LivePerson considers EBITDA and cash from operations to be important financial indicators of the Company's operational strength and the performance of its business. These measures should be considered in addition to results prepared in accordance with GAAP, but should not be considered a substitute for, or superior to, GAAP results. The non-GAAP measures included in this press release have been reconciled to the nearest GAAP measure.

The Company's cash balance increased by $0.4 million in the quarter to $8.8 million, in line with EBITDA and cash flow from operations for the quarter.

  Financial Expectations
  The Company currently expects the following financial results:
   * Sequential quarterly revenue growth of 8%, to $3.1 million for Q3 2003
   * Annual revenue growth of 40%, to $11.5 million for the full year 2003
   * EBITDA of $0.01 per share and breakeven EPS in Q3 2003
   * EBITDA of $0.05 per share and EPS of $0.01 for the full year 2003

The difference between EBITDA per share, a non-GAAP measure, and EPS, is interest, taxes, depreciation and amortization. This difference is expected to equal $0.01 per share in Q3 and $0.04 per share for the full year 2003.

                             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)
                                2003        2002        2003        2002
  Total revenue                $  2,826    $  1,873    $  5,355    $  3,699

  Operating expenses:
    Cost of revenue                 514         318       1,006         656
    Product development             419         281         751         577
    Sales and marketing             856         493       1,583       1,057
    General and administrative      744         750       1,550       1,421
    Amortization of other
     intangibles                    253          --         507          --
    Non-cash compensation,
     net of reversals                42         116          48         218
       Total operating expenses   2,828       1,958       5,445       3,929

  Loss from operations               (2)        (85)        (90)       (230)

  Other income, net                   6          34          11          71

  Income (loss) before
   cumulative effect of
   accounting change                  4         (51)        (79)       (159)
  Cumulative effect of
   accounting change                 --          --          --       5,338

  Net income (loss)            $      4    $    (51)   $    (79)   $ (5,497)

  Basic net income (loss)
   per share:
    Income (loss) before
     cumulative effect of
     accounting change         $   0.00    $  (0.00)   $  (0.00)   $  (0.00)

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

    Net income (loss)          $   0.00    $  (0.00)   $  (0.00)   $  (0.16)

  Diluted net income (loss)
   per share:
    Income (loss) before
     cumulative effect of
     accounting change         $   0.00    $  (0.00)   $  (0.00)   $  (0.00)

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

    Net income (loss)          $   0.00    $  (0.00)   $  (0.00)   $  (0.16)

  Weighted average shares
   outstanding used in basic
   net income (loss) per
   share calculation         34,229,236  34,029,588  34,192,755  34,016,671

  Weighted average shares
   outstanding used in
   diluted net income (loss)
   per share calculation     35,605,738  34,029,588  34,192,755  34,016,671


                             LivePerson, Inc.
         Reconciliation of Non-GAAP Financial Information to GAAP
             (In Thousands, Except Share and Per Share Data)

  Unaudited Supplemental Data
    The following information is not a financial measure under generally
    accepted accounting principles (GAAP). In addition, it should not be
    construed as an alternative to any other measures of performance
    determined in accordance with GAAP, 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, by
    its 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.


                               Three Months Ended       Six Months Ended
                                    June 30,                June 30,
                                  (Unaudited)             (Unaudited)
                                2003        2002        2003        2002
  Net income (loss) in
   accordance with generally
    accepted accounting
     principles                  $    4      $  (51)     $  (79)    $(5,497)
    Add/(less):
    (a) Amortization of other
         intangibles                253          --         507          --
    (b) Non-cash compensation,
         net of reversals            42         116          48         218
    (c) Depreciation                116          91         208         181
    (d) Cumulative effect of
         accounting change           --          --          --       5,338
    (e) Interest income, net         (6)        (34)        (18)        (71)
  EBITDA (1)                     $  409      $  122      $  666      $  169
  Fully diluted EBITDA per share $ 0.01      $ 0.00      $ 0.02      $ 0.00

  Weighted average shares
   used in EBITDA per share
   calculation
    Fully diluted            35,605,738  34,323,837  35,369,170  34,239,704

  EBITDA                         $  409      $  122      $  666      $  169
    Add/(less):
    Changes in operating
     assets and liabilities         (64)       (163)         (1)         68
    Provision for doubtful
     accounts                        --          --          15          --
    Interest income, net              6          34          18          71
  Net cash provided by/(used
   in) operating activities      $  351      $   (7)     $  698      $  308

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


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

                                          June 30, 2003    December 31, 2002
                                          (unaudited)
  ASSETS

  Current assets:
    Cash and cash equivalents                  $   8,782          $   8,004
    Accounts receivable, net                         585                607
    Prepaid expenses and other current assets        445                299
      Total current assets                         9,812              8,910

    Property and equipment, net                      402                595
    Other intangibles, net                           507              1,014
    Security deposits                                130                124
    Other assets                                     252                194
      Total assets                             $  11,103          $  10,837

  LIABILITIES AND STOCKHOLDERS' EQUITY

  Current liabilities:
    Accounts payable                           $     197          $     136
    Accrued expenses                               1,457              1,837
    Deferred revenue                               1,264                800
      Total current liabilities                    2,918              2,773

  Other liabilities                                  233                176

  Commitments and contingencies

  Total stockholders' equity                       7,952              7,888
    Total liabilities and stockholders' equity $  11,103          $  10,837

  About LivePerson

LivePerson is a leading provider of technology facilitating real-time online customer interaction. LivePerson services enable online businesses to communicate securely with Internet users in real time, thereby enhancing the online experience. With real-time solutions consisting of chat, marketing and selling tools, a self-service FAQ product and email management, LivePerson offers clients the opportunity to increase sales, lower 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 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 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 actual future events or results to differ materially from such statements. 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: 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 for qualified personnel; competition in the real-time sales and customer service technology market; 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.

   Media Contacts:

   Jennifer Regnault              Budd Zuckerman
   LivePerson, Inc.               Genesis Select Corp.
   (212) 609-4213                 (303) 415-0200
   jregnault@liveperson.com       budd@genesisselect.com

SOURCE: LivePerson, Inc.

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

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