LivePerson Inc (LPSN) Reports Q4 Earnings: Revenue Beats Guidance Amidst Challenges
Total Revenue: $95.5 million, surpassing the midpoint of guidance but down 22.1% YoY.
Adjusted EBITDA: Positive $3.7 million, a significant improvement from a loss of $5.2 million in Q4 2022.
Net Loss: Reduced to $40.5 million from $41.7 million in the same quarter last year.
Deals Signed: 62 in total, including 16 new customer contracts and 3 seven-figure deals.
Cash and Cash Equivalents: Ended the year with $210.8 million, down from $391.8 million at the end of 2022.
2024 Revenue Guidance: Projected to be between $300M - $315M, representing a decline of 20% to 24% YoY.
On February 28, 2024, LivePerson Inc (NASDAQ:LPSN) released its 8-K filing, announcing its financial results for the fourth quarter ended December 31, 2023. The company, a leader in cloud-based conversational solutions, reported a total revenue of $95.5 million for the quarter, which was above the midpoint of their prior guidance. This figure represents a 22.1% decrease compared to the same period last year, attributed to the strategic exit from lower-margin and non-core business lines.
LivePerson Inc operates primarily through its Business segment, offering a sophisticated intelligence engine that allows brands to connect with consumers via mobile and online messaging technologies. Despite the revenue decline, the company signed 62 deals in the quarter, including 16 new logos and 46 expansions and renewals, signaling a continued demand for its conversational solutions.
The company's net loss narrowed slightly to $40.5 million, or $0.48 per share, from a net loss of $41.7 million, or $0.55 per share, in the fourth quarter of the previous year. A notable positive shift was seen in the adjusted EBITDA, which turned positive at $3.7 million, compared to a loss of $5.2 million in the prior year's quarter. This improvement reflects the company's efforts in improving operational efficiency and cost management.
LivePerson's cash balance at the end of the quarter stood at $210.8 million, a decrease from $391.8 million at the end of 2022. Looking forward, the company expects total revenue for the full year 2024 to range between $300 million and $315 million, with adjusted EBITDA projected to be between $15 million and $26 million.
Financial Performance Analysis
The company's strategic decision to exit certain business lines is reflected in the year-over-year revenue decline. However, the increase in average revenue per enterprise and mid-market customer, which rose by 11.9% to $610,000, indicates a stronger focus on high-value clients. The positive adjusted EBITDA is a critical metric, as it suggests that LivePerson is moving towards a more sustainable financial model, despite the challenges of a strategic transformation.
LivePerson's CEO, John Sabino, expressed confidence in the company's trajectory, stating,
This is a critical time in LivePersons history, and Im honored to be leading the company through its transformation by driving results through improved commercial and operational execution."
CFO and COO John Collins echoed this sentiment, highlighting the company's growth opportunity and product validation by customers and investors.
The company's focus on customer expansion, particularly through new logo deals and significant renewals, demonstrates its ability to attract and retain customers even as it navigates through a period of transition. The reduction in net loss and the positive adjusted EBITDA are important indicators of the company's improving financial health and operational efficiency.
As LivePerson Inc continues to execute its go-to-market strategy and strengthen its capital structure, investors and stakeholders will be closely monitoring the company's progress towards achieving profitable growth and capitalizing on the multi-billion dollar market opportunity ahead.
For more detailed financial information and future updates on LivePerson Inc, stay tuned to GuruFocus.com.
Explore the complete 8-K earnings release (here) from LivePerson Inc for further details.
This article first appeared on GuruFocus.
