LivePerson Reports Third Quarter Revenue of $5.7 Million

Quarterly Revenue Increases 31% from Prior Year

NEW YORK, NY - November 1, 2005 - LivePerson, Inc. (NASDAQ: LPSN), a provider of communication solutions for online sales, marketing and customer service, today announced financial results for the third quarter ended September 30, 2005.

Revenue for the third quarter was $5.7 million, a 31% increase from the third quarter of 2004, and an 8% sequential increase versus the second quarter of 2005. Revenue growth was due primarily to new deployments of Timpani™ Sales & Marketing, and continuing strong sales of LivePerson Pro to small business customers. Timpani Sales & Marketing enables LivePerson clients to analyze website traffic in real time, and then to proactively engage high-value buyers based on their shopping behavior, thereby increasing online customer conversion rates.

"We are very pleased with the results for the quarter," CEO Robert LoCascio said. "Our sequential growth trends are continuing, and we have a strong roster of both recently signed contracts and pipeline deals, as well as recent expansion within several larger clients."

LivePerson signed several new top-tier clients during the quarter, adding leaders in industries as diverse as mortgage lending, asset management, diet and nutrition services, computer equipment distribution and online bill payment processing. LivePerson also recently expanded business with major US financial institution clients, as well as Bell Canada, Overstock.com and Verizon.

Net income for the third quarter of 2005 was $0.7 million or $0.02 per share as compared to net income of $0.4 million or $0.01 per share in the third quarter of 2004, and net income of $0.4 million or $0.01 per share in the second quarter of 2005.

Earnings before interest, taxes, depreciation, amortization and non-cash compensation (EBITDA) for the third quarter of 2005 was $1.2 million as compared to $0.7 million in the third quarter of 2004 and $0.8 million in the second quarter of 2005.

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 Income 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. EBITDA 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 in the table below.

  Financial Expectations
  The company currently expects the following financial results:
    -- Revenue of $6.1 - $6.2 million for the fourth quarter of 2005
    -- EBITDA of $0.03 per share and GAAP EPS of $0.02 for the fourth
       quarter of 2005
    -- Revenue of $22.0 - $22.2 million for the full year 2005
    -- EBITDA of $0.10-$0.11 per share and GAAP EPS of $0.05 for the full
       year 2005

The difference between EBITDA per share, a non-GAAP measure, and GAAP EPS, is interest, taxes, depreciation, amortization and non-cash compensation. The company expects an effective tax rate of approximately 35% for 2005.

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

                                 Three Months Ended      Nine Months Ended
                                   September 30,           September 30,
                                  2005        2004        2005        2004

  Total revenue                  $5,724      $4,381     $15,960     $12,796

  Operating expenses:
    Cost of revenue               1,114         730       2,997       2,116
    Product development             663         515       2,027       1,470
    Sales and marketing           1,715       1,327       4,889       3,721
    General and
     administrative               1,034       1,222       3,400       3,131
    Amortization of other
     intangibles                    232         204         699         563
       Total operating
        expenses                  4,758       3,998      14,012      11,001

  Income from operations            966         383       1,948       1,795

  Other income, net                  81          18         184          41

  Income before provision
   for income taxes               1,047         401       2,132       1,836

  Provision for income taxes        358          25         738          58

  Net income                       $689        $376      $1,394      $1,778

  Basic net income per
   common share                   $0.02       $0.01       $0.04       $0.05

  Diluted net income per
   common share                   $0.02       $0.01       $0.04       $0.04

  Weighted average shares
   outstanding used in basic
   net income per common
   share calculation         37,555,696  37,336,792  37,492,285  37,222,428

  Weighted average shares
   outstanding used in
   diluted net income per
   common share
   calculation               39,839,001  39,294,832  39,528,089  39,535,593



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


  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      Nine Months Ended
                                    September 30,           September 30,
                                   2005        2004        2005        2004

  Net income in accordance
   with generally accepted
   accounting principles           $689        $376      $1,394      $1,778
    Add/(less):
    (a) Amortization of other
        intangibles                 232         204         699         563
    (b) Non-cash compensation         -          58           -         187
    (c) Depreciation                 23          56         115         172
    (d) Provision for income
        taxes                       358          25         738          58
    (e) Interest income, net        (81)        (18)       (184)        (41)
  EBITDA (1)                     $1,221        $701      $2,762      $2,717
  Diluted EBITDA per common
   share                          $0.03       $0.02       $0.07       $0.07

  Weighted average shares
   used in diluted EBITDA
    per common share         39,839,001  39,294,832  39,528,089  39,535,593

  EBITDA                         $1,221        $701      $2,762      $2,717
    Add/(less):
    Changes in operating
     assets and liabilities         736         577           9        (923)
    Provision for doubtful
     accounts                         -           -          30          15
    Provision for income
     taxes                         (358)        (25)       (738)        (58)
    Deferred income taxes           345           -         697           -
    Interest income, net             81          18         184          41
  Net cash provided by
   operating activities          $2,025      $1,271      $2,944      $1,792

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



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

                                      September 30, 2005  December 31, 2004

  ASSETS

  Current assets:
    Cash and cash equivalents                    $15,242            $12,425
    Accounts receivable, net                       1,482              1,641
    Prepaid expenses and other current
     assets                                          567                475
      Total current assets                        17,291             14,541

    Property and equipment, net                      509                384
    Intangibles, net                               1,022              1,721
    Security deposits                                170                166
    Other assets                                     404                338
      Total assets                               $19,396            $17,150

  LIABILITIES AND STOCKHOLDERS' EQUITY

  Current liabilities:
    Accounts payable                                $158               $262
    Accrued expenses                               1,375              1,666
    Deferred revenue                               1,701              1,330
      Total current liabilities                    3,234              3,258

  Other liabilities                                  404                338

  Commitments and contingencies

  Total stockholders' equity                      15,758             13,554
          Total liabilities and
           stockholders' equity                  $19,396            $17,150


  About LivePerson

LivePerson is a provider of communication solutions for online sales, marketing and customer service. LivePerson's Timpani™ platform enables online businesses to identify and engage the right customer with the right communication channel at the right time, thereby enhancing the online experience. Chat, marketing and selling tools, a self-service knowledgebase and email management are combined with channel matching technology, rules-based intelligence, routing and reporting, to offer clients the opportunity to increase sales, lower customer service costs and enhance the customer experience. Many among the company's roster of more than 3,000 customers, including EarthLink, Microsoft, Hewlett-Packard, Qwest, Verizon and AT&T, have reported significant savings, increased sales and high customer satisfaction using LivePerson's technologies. LivePerson is headquartered in New York City.

EBITDA Financial Disclosure

Investors are cautioned that the EBITDA, or earnings before interest, taxes, depreciation, amortization and non-cash compensation, 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 performance. 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 current 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 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 we base our 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 our actual results to differ materially from those described in a forward-looking statement: our history of losses; potential fluctuations in our quarterly and annual results; responding to rapid technological change and changing client preferences; competition in the real-time sales, marketing and customer service solutions market; continued use by our clients of the LivePerson services and their purchase of additional services; technology systems beyond our control and technology-related defects that could disrupt the LivePerson services; risks related to adverse business conditions experienced by our clients; our dependence on key employees; competition for qualified personnel; the impact of new accounting rules, including the requirement to expense stock options; the possible unavailability of financing as and if needed; risks related to the operational integration of acquisitions; risks related to our international operations, particularly our operations in Israel, and the current civil and political unrest in that region; risks related to protecting our intellectual property rights or potential infringement of the intellectual property rights of third parties; our dependence on the continued use of the Internet as a medium for commerce and the viability of the infrastructure of the Internet; and risks related to the regulation or possible misappropriation of personal information. 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 us 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.

SOURCE: LivePerson, Inc.

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

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