LivePerson Third Quarter Revenue Increases 25% Versus Prior Year On Strength of NewChannel Transaction

Expects 5% Sequential Revenue Growth in Q4, and 12% Annual Revenue Growth in 2003 with 12% EBITDA Margin

NEW YORK, NY - October 31, 2002 - LivePerson, Inc. (NASDAQ: LPSN), a leading provider of technology facilitating real-time online customer interaction, today announced financial results for the quarter ended September 30, 2002.

Revenue for the three months ended September 30, 2002 was $2.2 million, a 15% increase from $1.9 million in the second quarter, and up 25% versus the prior year period. Net loss for the period narrowed to $(28,000) or $(0.00) per share, as compared to a net loss of $(51,000) or $(0.00) per share in the prior quarter, and net loss of $(13.7) million, or $(0.40) per share in the third quarter of 2001.

Net loss included non-cash depreciation and amortization charges of $265,000 for the period, versus $207,000 in the prior period and $1.9 million in the third quarter of 2001. Net loss per share for the three months ended September 30, 2001 included a $(0.7) million loss per share related to amortization of goodwill prior to the Company's adoption of FAS 142 in the first quarter of 2002.

Earnings/(loss) before interest, taxes, depreciation and amortization (EBITDA) for the third quarter was $211,000, as compared to $122,000 in the second quarter, and versus $(11.9) million in the third quarter of 2001. Figures for the third quarter of 2001 included a restructuring charge of $9.2 million.

The Company's cash balance at September 30, 2002 was $10.0 million, down slightly from the prior quarter primarily due to payments related to the NewChannel transaction that closed on July 1, 2002. Excluding the impact of those payments, cash flow for the quarter was $0.3 million.

"The successful integration of former NewChannel clients, combined with organic growth from clients such as eBay and new client acquisitions including Computer Associates, enabled us to deliver solid revenue gains, and to again deliver positive cash flow from operations," CEO Robert LoCascio stated. "We exceeded growth expectations from the beginning of the quarter, and we expect an improving sales pipeline going forward. Given our increasing visibility, we expect 5% top line sequential growth in the fourth quarter, and annual revenue growth of 12% in 2003 with 12% EBITDA margins."

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


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

  Current assets:
  Cash and cash equivalents                        $ 9,986        $10,136
  Accounts receivable, net                             299            620
  Prepaid expenses and other current assets            392            389
  Total current assets                              10,677         11,145

  Property and equipment, net                          682            915
  Goodwill and other intangibles, net                1,163          5,338
  Security deposits                                    119            122
  Other assets                                         169            107
  Total assets                                     $12,810        $17,627

  LIABILITIES AND STOCKHOLDERS' EQUITY

  Current liabilities:
  Accounts payable                                    $625           $592
  Accrued expenses                                   2,599          2,115
  Deferred revenue                                     408            560
  Total current liabilities                          3,632          3,267

  Other liabilities                                    150             89

  Commitments and contingencies

  Total stockholders' equity                         9,028         14,271
  Total liabilities and stockholders' equity       $12,810        $17,627


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

                            Three Months Ended          Nine Months Ended
                               September 30,             September 30,
                                (Unaudited)                (Unaudited)
                            2002          2001         2002          2001
  Total revenues          $2,161        $1,734       $5,860        $6,017

  Operating expenses:
  Cost of revenues           480         1,586        1,136         6,412
  Product development        303           865          880         3,000
  Sales and marketing        600         1,133        1,657         4,427
  General and
   administrative            660         1,464        2,081         5,032
  Amortization of goodwill
   and other intangibles     125           745          125         2,230
  Non-cash compensation,
   net of reversals           47           526          265           569
  Non-cash compensation
   credit related to
   restructuring, net         --            --           --        (1,720)
  Restructuring charges       --         9,232           --        12,740
  Total operating
   expenses                2,215        15,551        6,144        32,690

  Loss from operations       (54)     (13,817)          (284)     (26,673)

  Other income, net           26           161           97           579

  Loss before cumulative
   effect of accounting
   change                   (28)       (13,656)         (187)    (26,094)
  Cumulative effect of
   accounting change          --            --        (5,338)          --

  Net loss                 $(28)      $(13,656)     $ (5,525)   $(26,094)

  Basic and diluted
   net loss per share:
  Loss before cumulative
   effect of accounting
   change                $(0.00)       $(0.40)       $(0.00)      $(0.77)

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


  Net loss               $(0.00)       $(0.40)       $(0.16)      $(0.77)

  Weighted average shares
   outstanding used in
   basic and diluted
  net loss per share
   calculation        34,046,504    34,003,501   34,021,670    33,982,599

  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     $(28)     $(13,656)    $ (5,525)    $(26,094)
  Add/(Less)
   (a) Amortization of
    goodwill and other
    intangibles              125           745          125         2,230
   (b) Non-cash compensation,
    net of reversals          47           526          265           569
   (c) Non-cash compensation
    credit related to
    restructuring, net        --            --           --        (1,720)
   (d) Depreciation           93           617          273         2,259
   (e) Cumulative effect
    of accounting change      --            --        5,338            --
   (f) Interest income,
     net                     (26)         (118)         (97)         (470)
  EBITDA (1)                $211      $(11,886)        $379      $(23,226)

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

  About LivePerson

LivePerson is a leading provider of technology facilitating real-time online customer interaction. The LivePerson service enables online businesses to communicate securely with Internet users in real time, thereby enhancing the online experience. With real-time solutions consisting of chat, real-time 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/(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.

   Media Contacts:
   Jennifer Regnault
   LivePerson, Inc.
   (212) 609-4213
   jregnault@liveperson.com

   Jane Hynes
   OutCast Communications
   (415) 392-8282
   jane@outcastpr.com

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SOURCE: LivePerson, Inc.

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

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