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NEW YORK, NY - August 6, 2008 - LivePerson, Inc. (NASDAQ: LPSN), a provider of online engagement solutions that facilitate real-time assistance and expert advice, today announced financial results for the second quarter ended June 30, 2008.
Revenue
Revenue for the second quarter was $18.6 million, a 59% increase from the second quarter of 2007, and a 9% sequential increase as compared to the first quarter of 2008. Excluding the impact of the acquisition of Kasamba, Inc., revenue for the second quarter was $15.8 million, a 35% increase from the second quarter of 2007, and a 10% sequential increase as compared to the preceding quarter.
Sequential revenue growth was due to strong demand and growth from enterprise customers in the United Kingdom, the continued adoption of LivePerson's proactive chat solution by clients in the global high-tech sector and continued healthy performance of the small business product line.
"We were very pleased with the results in the second quarter," CEO Robert LoCascio said. "Our revenue growth exceeded our internal expectations, with all three primary growth drivers performing well. Our consumer revenue growth was in line with our expectations, while our enterprise and small business revenue combined delivered 10% quarterly sequential revenue growth."
Client and Partner Expansion LivePerson added several new clients in the US, including: -- Sun Microsystems -- Nestle USA -- Cricket Communications, a subsidiary of Leap Wireless
The company also signed new clients and expanded business with customers in the UK, including:
-- Harrods, one of the world's most famous department stores -- Boots, the UK's leading pharmacy-led health and beauty retailer -- One of Europe's leading credit card providers
In addition, a leading global provider of systems, software and services entered into a company-wide agreement establishing LivePerson as its preferred technology platform for live chat and voice solutions.
Net Income and Loss
Net loss for the second quarter of 2008 was $0.2 million or $0.00 per share as compared to net income of $0.9 million or $0.02 per share in the second quarter of 2007, and a net loss of $0.2 million or $0.00 per share in the first quarter of 2008.
Adjusted Net Income and EBITDA
LivePerson considers adjusted net income and earnings before interest, taxes, depreciation and amortization (EBITDA) to be important financial indicators of the company's operational strength and the performance of its business. These results should be considered in addition to results prepared in accordance with generally accepted accounting principles (GAAP), but should not be considered as a substitute for, or superior to, GAAP results.
A reconciliation of the differences between EBITDA and adjusted net income, and the most comparable financial measure calculated and presented in accordance with GAAP, is presented under the heading "Reconciliation of Non-GAAP Financial Information to GAAP" immediately following the Condensed Consolidated Statements of Operations included below.
The difference between EBITDA per share, a non-GAAP measure, and GAAP EPS, is interest, taxes, depreciation, amortization and stock-based compensation. The difference between adjusted net income per share and GAAP EPS is amortization of intangible assets and stock-based compensation.
Adjusted net income for the second quarter of 2008 was $1.7 million or $0.04 per share, as compared to $2.1 million or $0.05 per share in the comparable period in 2007, and $1.4 million or $0.03 per share in the first quarter of 2008.
EBITDA for the second quarter of 2008 was $1.9 million or $0.04 per share, as compared to $2.2 million or $0.05 per share in the second quarter of 2007, and $1.7 million or $0.03 per share in the first quarter of 2008.
Cash
The company's cash balance grew to $23.5 million at June 30, 2008 as compared to $21.5 million as of March 31, 2008. The company generated approximately $4.0 million from operations. Also during the second quarter, the company repurchased stock resulting in a cash outlay of approximately $1.6 million, and purchased computer hardware related primarily to its colocation facility resulting in a cash outlay of approximately $0.5 million.
Financial Expectations Third Quarter 2008 -- Revenue of $19.0 -- $20.0 million -- EBITDA of $0.04 -- $0.05 per share -- Adjusted net income of $0.03 -- $0.04 per share -- GAAP EPS of $0.00 -- $0.01 -- Fully diluted share count of approximately 50 million Full Year 2008 -- Revenue of $75.5 -- $77.0 million -- EBITDA of $0.19 -- $0.21 per share -- Adjusted net income of $0.14 -- $0.16 per share -- GAAP EPS of $0.00 -- $0.01 -- Fully diluted share count of approximately 50 million -- Estimated full year cash income taxes of approximately $0.5 million Stock-Based Compensation
Included in the accompanying financial results are expenses related to stock-based compensation, as follows (in thousands):
Q2 2008
Cost of revenue $161
Product development 422
Sales and marketing 300
General and administrative 321
Total $1,204
Amortization of Intangible Assets
Included in the accompanying financial results are expenses related to the amortization of intangible assets, as follows (in thousands):
Q2 2008
Cost of revenue $307
General and administrative 391
Total $698
LivePerson, Inc.
Condensed Consolidated Statements of Operations
(In Thousands, Except Share and Per Share Data)
Unaudited
Three Months Ended Six Months Ended
June 30, June 30,
2008 2007 2008 2007
Total revenue $18,588 $11,661 $35,673 $22,630
Operating expenses:
Cost of revenue 5,234 3,105 10,120 5,894
Product development 3,503 2,044 6,577 3,864
Sales and marketing 6,443 3,512 12,241 6,914
General and administrative 3,455 2,057 6,635 4,079
Amortization of other
intangibles 391 242 782 483
Total operating expenses 19,026 10,960 36,355 21,234
(Loss) income from operations (438) 701 (682) 1,396
Other income, net 108 212 189 435
(Loss) income before
benefit from income taxes (330) 913 (493) 1,831
Benefit from income taxes (139) - (90) -
Net (loss) income $(191) $913 $(403) $1,831
Basic net (loss) income
per common share $(0.00) $0.02 $(0.01) $0.04
Diluted net (loss) income
per common share $(0.00) $0.02 $(0.01) $0.04
Weighted average shares
outstanding used in basic
net (loss) income per
common share calculation 47,182,068 43,011,309 47,537,385 42,159,146
Weighted average shares
outstanding used in
diluted net (loss) income
per common share
calculation 47,182,068 46,726,357 47,537,385 45,757,843
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 Six Months Ended
June 30, June 30,
2008 2007 2008 2007
Net (loss) income in
accordance with generally
accepted accounting
principles $(191) $913 $(403) $1,831
Add/(less):
(a) Amortization of
intangibles 698 325 1,396 650
(b) Stock-based
compensation 1,204 898 2,164 1,712
(c) Depreciation 475 229 798 438
(d) Benefit from income
taxes (139) - (90) -
(e) Interest income, net (108) (212) (189) (435)
EBITDA (1) $1,939 $2,153 $3,676 $4,196
Diluted EBITDA per common
share $0.04 $0.05 $0.07 $0.09
Weighted average shares
used in diluted EBITDA per
common share 48,732,780 46,726,357 49,260,216 45,757,843
Net (loss) income in
accordance with generally
accepted accounting
principles $(191) $913 $(403) $1,831
Add:
(a) Amortization of
intangibles 698 325 1,396 650
(b) Stock-based
compensation 1,204 898 2,164 1,712
Adjusted net income $1,711 $2,136 $3,157 $4,193
Diluted adjusted net income
per common share $0.04 $0.05 $0.06 $0.09
Weighted average shares
used in diluted adjusted
net income per common
share 48,732,780 46,726,357 49,260,216 45,757,843
EBITDA $1,939 $2,153 $3,676 $4,196
Add/(less):
(a) Changes in operating
assets and
liabilities 1,983 191 (168) (386)
(b) Provision for
doubtful accounts - - 68 20
(c) Benefit from income taxes 139 - 90 -
(d) Deferred income taxes (167) (1,054) (251) (2,084)
(e) Interest income, net 108 212 189 435
Net cash provided by
operating activities $4,002 $1,502 $3,604 $2,181
(1) Earnings before interest, taxes, depreciation, amortization and
stock-based compensation.
LivePerson, Inc.
Condensed Consolidated Balance Sheets
(In Thousands)
Unaudited
June 30, 2008 Dec. 31, 2007
ASSETS
Current assets:
Cash and cash equivalents $23,450 $26,222
Accounts receivable, net 6,665 6,026
Prepaid expenses and other current assets 2,167 1,802
Deferred tax assets, net 2,302 42
Total current assets 34,584 34,092
Property and equipment, net 6,064 3,733
Intangibles, net 5,557 6,953
Goodwill 48,775 51,684
Deferred tax assets, net 4,838 4,202
Security deposits 348 499
Other assets 1,615 1,325
Total assets $101,781 $102,488
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $4,990 $3,067
Accrued expenses 7,206 9,191
Deferred revenue 4,865 4,000
Deferred tax liabilities, net - 193
Total current liabilities 17,061 16,451
Other liabilities 1,615 1,325
Commitments and contingencies
Total stockholders' equity 83,105 84,712
Total liabilities and stockholders'
equity $101,781 $102,488
About LivePerson
LivePerson is a provider of online engagement solutions that facilitate real-time assistance and expert advice. Connecting businesses and experts with consumers seeking help on the Web, LivePerson's hosted software platform creates more relevant, compelling and personalized online experiences. Every month, LivePerson's intelligent platform helps millions of people succeed online; more than 6,000 companies, including EarthLink, Hewlett-Packard, Microsoft, Qwest, and Verizon, rely on LivePerson to maximize the impact of the online channel. LivePerson is headquartered in New York City.
Non-GAAP Financial Disclosure
Investors are cautioned that the EBITDA, or earnings before interest, taxes, depreciation, amortization and stock-based compensation, and adjusted net income, or net income excluding amortization of intangible assets and stock-based compensation, information contained in this press release are not financial measures under generally accepted accounting principles. In addition, they should not be construed as alternatives to any other measures of performance determined in accordance with generally accepted accounting principles, or as indicators of our operating performance, liquidity or cash flows generated by operating, investing and financing activities, as there may be significant factors or trends that they fail to address. We present this financial information because we believe that it is helpful to some investors as a measure of our performance. 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 current results with our results from other reporting periods and with the results of other companies.
Safe Harbor Provision
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 and year progresses, and therefore it should be clearly understood that the internal projections and beliefs upon which we base our expectations may change. Although these expectations may change, we are under no obligation to inform you if they do. Actual events or results may differ materially from those contained in the projections or forward-looking statements. Some of the factors that could cause actual results to differ materially from the forward-looking statements contained herein include, without limitation: risks related to the operational integration of acquisitions; risks related to our increased operations in the direct-to-consumer market; risks related to our international operations, particularly our operations in Israel, and the civil and political unrest in that region; volatility of the value of certain currencies in relation to the US dollar, particularly the New Israeli Shekel, U.K. pound and Euro; our history of losses; potential fluctuations in our quarterly and annual results; impairments to goodwill that result in significant charges to earnings; responding to rapid technological change and changing client preferences; competition in the real-time sales, marketing, customer service and online engagement 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 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/
Mike Tague
mtague@liveperson.com