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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(Mark One)
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 2022
or
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from __________ to __________.
Commission File Number: 000-30141
LIVEPERSON, INC.
(Exact name of registrant as specified in its charter)
Delaware13-3861628
(State or other jurisdiction of incorporation or organization)(IRS Employer Identification No.)
530 7th Ave, Floor M1
New York, New York
10018
(Address of principal executive offices)(Zip Code)
(212) 609-4200
(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading Symbol(s)Name of each exchange on which registered
Common Stock, par value $0.001 per shareLPSNThe Nasdaq Stock Market LLC
Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes No
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes No
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large Accelerated FilerAccelerated Filer
Non-accelerated FilerSmaller Reporting Company
Emerging Growth Company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes No
On November 3, 2022, 75,328,068 shares of the registrant’s common stock were outstanding.
1


LIVEPERSON, INC.
September 30, 2022
FORM 10-Q
INDEX
PAGE
   
Item 1.
   
 
as of September 30, 2022 and December 31, 2021
   
 
for the Three and Nine Months Ended September 30, 2022 and 2021
   
 
for the Three and Nine Months Ended September 30, 2022 and 2021
   
for the Three and Nine Months Ended September 30, 2022 and 2021
   
 
for the Nine Months Ended September 30, 2022 and 2021
 
   
Item 2.
   
Item 3.
   
Item 4.
   
   
Item 1.
   
Item 1A.
   
Item 2.
   
Item 3.
   
Item 4.
   
Item 5.
   
Item 6.
2


FORWARD-LOOKING STATEMENTS
 
Statements in this Quarterly Report on Form 10-Q about LivePerson, Inc. (“LivePerson”, the “Company”, “our”, “we” or “us”) that are not historical facts are forward-looking statements. These forward-looking statements are based on our current expectations, assumptions, estimates and projections about LivePerson and our industry. Our expectations, assumptions, estimates and projections are expressed in good faith, and we believe there is a reasonable basis for them, but we cannot assure you that our expectations, assumptions, estimates and projections will be realized. Examples of forward-looking statements include, but are not limited to, statements regarding future business, future results of operations or financial condition (including based on examinations of historical operating trends), management strategies and the COVID-19 pandemic. Many of these statements are found in the “Management’s Discussion and Analysis of Financial Condition and Results of Operations” section of this Quarterly Report on Form 10-Q. When used in this Quarterly Report on Form 10-Q, the words “anticipates,” “believes,” “estimates,” “expects,” “intends,” “plans,” “projects” and variations of such words or similar expressions are intended to identify forward-looking statements. However, not all forward-looking statements contain these words. Forward-looking statements are subject to risks and uncertainties that could cause actual future events or results to differ materially from those expressed or implied in the forward-looking statements. Important factors that could cause our actual results to differ materially from the forward-looking statements we make in this Quarterly Report on Form 10-Q include those set forth in our Annual Report on Form 10-K filed with the Securities and Exchange Commission (the “SEC”) on February 28, 2022 in the section entitled Part I, Item 1A. “Risk Factors.” It is routine for our internal projections and expectations to change as the year or each quarter in the year 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 each quarter or the year. Although these expectations may change, we are under no obligation to inform you if they do. Our policy is generally to provide our expectations only once per quarter, and not to update that information until the next quarter. We do not undertake any obligation to revise forward-looking statements to reflect future events or circumstances. All forward-looking statements are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995.


3


Part I. Financial Information
Item 1. Financial Statements
LIVEPERSON, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
 September 30,
2022
December 31,
2021
(In thousands)
ASSETS  
Current assets:  
Cash and cash equivalents$393,330 $521,846 
Accounts receivable, net of allowances of $8,511 and $6,338 as of September 30, 2022 and December 31, 2021, respectively
100,741 93,804 
Prepaid expenses and other current assets31,919 20,626 
Total current assets525,990 636,276 
Operating lease right of use assets (Note 10)
2,270 1,977 
Property and equipment, net (Note 6)
135,830 124,726 
Contract acquisition costs39,903 40,675 
Intangibles, net (Note 5)
81,457 85,554 
Goodwill (Note 5)
300,578 291,215 
Deferred tax assets4,570 5,034 
Investment in joint venture3,993  
Other assets2,487 1,199 
Total assets$1,097,078 $1,186,656 
LIABILITIES AND STOCKHOLDERS’ EQUITY  
Current liabilities:  
Accounts payable$11,975 $16,942 
Accrued expenses and other current liabilities (Note 7)
118,421 104,297 
Deferred revenue (Note 2)
103,219 98,808 
Operating lease liability (Note 10)
3,221 3,380 
Total current liabilities236,836 223,427 
Deferred revenue, net of current portion (Note 2)
287 54 
Convertible senior notes, net (Note 8)
736,475 574,238 
Operating lease liability, net of current portion (Note 10)
698 2,733 
Deferred tax liability2,355 2,049 
Other liabilities30,916 34,718 
Total liabilities1,007,567 837,219 
Commitments and contingencies (Note 12)
Stockholders equity:
  
Preferred stock, $0.001 par value - 5,000,000 shares authorized, none issued
  
Common stock, $0.001 par value - 200,000,000 shares authorized, 77,934,440 and 74,980,546 shares issued, 75,188,197 and 72,234,303 shares outstanding as of September 30, 2022 and December 31, 2021, respectively
78 75 
Additional paid-in capital757,162 871,788 
Treasury stock - 2,746,243 shares
(3)(3)
Accumulated deficit(650,638)(516,859)
Accumulated other comprehensive loss(17,088)(5,564)
Total stockholders’ equity89,511 349,437 
Total liabilities and stockholders equity
$1,097,078 $1,186,656 
         See accompanying notes to unaudited condensed consolidated financial statements.
4


LIVEPERSON, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
    
Three Months EndedNine Months Ended
September 30,September 30,
 2022202120222021
(In thousands, except share and per share amounts)
Revenue$129,561 $118,327 $392,323 $345,823 
Costs and expenses: (1) (2)
  
Cost of revenue (3)
43,681 38,795 138,297 112,377 
Sales and marketing49,448 40,852 167,563 116,427 
General and administrative32,171 17,193 92,152 47,784 
Product development44,744 41,734 156,568 112,715 
Restructuring costs7,111 44 17,949 3,269 
Amortization of purchased intangibles920 488 2,742 1,237 
Total costs and expenses178,075 139,106 575,271 393,809 
Loss from operations(48,514)(20,779)(182,948)(47,986)
Other income (expense), net:
Interest income (expense), net401 (9,442)(1,713)(27,852)
Other income (expense), net5,114 (48)1,908 3,002 
Total other income (expense), net5,515 (9,490)195 (24,850)
Loss before provision for income taxes(42,999)(30,269)(182,753)(72,836)
Provision for income taxes249 2,538 1,270 2,285 
Net loss$(43,248)$(32,807)$(184,023)$(75,121)
Net loss per share of common stock:
Basic $(0.56)$(0.47)$(2.39)$(1.09)
Diluted $(0.56)$(0.47)$(2.39)$(1.09)
Weighted-average shares used to compute net loss per share:
Basic 77,784,346 69,798,839 76,969,629 68,926,203 
Diluted77,784,346 69,798,839 76,969,629 68,926,203 
(1) Amounts include stock-based compensation expense, as follows:
Cost of revenue $2,905 $1,337 $9,156 $4,618 
Sales and marketing 6,021 4,228 18,612 11,383 
General and administrative 12,034 4,103 35,703 9,863 
Product development 10,980 8,601 36,852 22,103 
(2) Amounts include depreciation expense, as follows:
Cost of revenue $2,402 $2,552 $7,398 $7,720 
Sales and marketing 637 602 1,794 1,820 
General and administrative 109 15 342 103 
Product development 3,915 3,724 11,880 10,828 
(3) Amounts include amortization of purchased intangibles and finance leases, as follows:
Cost of revenue $4,811 $1,343 $13,788 $3,702 
See accompanying notes to unaudited condensed consolidated financial statements.
5


LIVEPERSON, INC.
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS
(UNAUDITED)

Three Months EndedNine Months Ended
September 30,September 30,
 2022202120222021
(In thousands)
Net loss$(43,248)$(32,807)$(184,023)$(75,121)
Foreign currency translation adjustment(5,026)(3,056)(11,524)(4,237)
Comprehensive loss$(48,274)$(35,863)$(195,547)$(79,358)

See accompanying notes to unaudited condensed consolidated financial statements.

6


LIVEPERSON, INC.
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY
(UNAUDITED)
Common StockTreasury StockAdditional
Paid-in
Capital
Accumulated
Deficit
Accumulated
Other
Comprehensive
Loss
Total
Equity
SharesAmountSharesAmount
(In thousands, except share data)
Balance as of December 31, 202174,980,546 $75 (2,746,243)$(3)$871,788 $(516,859)$(5,564)$349,437 
Cumulative adjustment due to adoption of ASU 2020-06— — — — (209,651)50,244 — (159,407)
Common stock issued upon exercise of stock options40,483 — — — 506 — — 506 
Common stock issued upon vesting of restricted stock units (“RSUs”)
444,043 — — — — — —  
Stock-based compensation— — — — 20,522 — — 20,522 
Cash awards settled in shares of the Company’s common stock735,519 1 — — 17,298 — — 17,299 
Common stock issued under Employee Stock Purchase Plan82,100 — — — 1,415 — — 1,415 
Issuance of common stock in connection with acquisitions779,946 1 — — 17,636 — — 17,637 
Net loss— — — — — (65,364)— (65,364)
Other comprehensive loss— — — — — — (1,699)(1,699)
Balance as of March 31, 202277,062,637 $77 (2,746,243)$(3)$719,514 $(531,979)$(7,263)$180,346 
Common stock issued upon exercise of stock options25,295 — — — 389 — — 389 
Common stock issued upon vesting of RSUs372,500 1 — —  — — 1 
Stock-based compensation— — — — 18,826 — — 18,826 
Common stock issued under Employee Stock Purchase Plan99,495 — — — 1,403 — — 1,403 
Net loss— — — — — (75,411)— (75,411)
Other comprehensive loss— — — — — — (4,799)(4,799)
Balance as of June 30, 202277,559,927 $78 (2,746,243)$(3)$740,132 $(607,390)$(12,062)$120,755 
Common stock issued upon exercise of stock options134,423 — — — 343 — — 343 
Common stock issued upon vesting of RSUs161,272 — — — — — —  
Stock-based compensation— — — — 15,843 — — 15,843 
Common stock issued under Employee Stock Purchase Plan78,818 — — — 844 — — 844 
Net loss— — — — — (43,248)— (43,248)
Other comprehensive loss— — — — — — (5,026)(5,026)
Balance as of September 30, 202277,934,440 $78 (2,746,243)$(3)$757,162 $(650,638)$(17,088)$89,511 

See accompanying notes to unaudited condensed consolidated financial statements.
7


Common StockTreasury StockAdditional
Paid-in
Capital
Accumulated
Deficit
Accumulated
Other
Comprehensive
Loss
Total
Equity
SharesAmountSharesAmount
(In thousands, except share data)
Balance as of December 31, 202070,264,265 $70 (2,709,830)$(3)$635,672 $(391,885)$80 $243,934 
Common stock issued upon exercise of stock options209,185 — — — 2,617 — — 2,617 
Common stock issued upon vesting of RSUs454,508 1 — — (1)— —  
Stock-based compensation— — — — 9,225 — — 9,225 
Cash awards settled in shares of the Company’s common stock400,700 — — — 25,925 — — 25,925 
Common stock issued under Employee Stock Purchase Plan22,544 — — — 1,257 — — 1,257 
Net loss— — — — — (21,195)— (21,195)
Other comprehensive loss— — — — — — (1,746)(1,746)
Balance as of March 31, 202171,351,202 $71 (2,709,830)$(3)$674,695 $(413,080)$(1,666)$260,017 
Common stock issued upon exercise of stock options252,155 — — — 3,999 — — 3,999 
Common stock issued upon vesting of RSUs252,218 1 — — (1)— —  
Stock-based compensation— — — — 9,524 — — 9,524 
Cash awards settled in shares of the Company’s common stock137,300 — — — 7,578 — — 7,578 
Common stock issued under Employee Stock Purchase Plan24,270 — — — 1,128 — — 1,128 
Net loss— — — — — (21,119)— (21,119)
Other comprehensive loss— — — — — — 565 565 
Balance as of June 30, 202172,017,145 $72 (2,709,830)$(3)$696,923 $(434,199)$(1,101)$261,692 
Common stock issued upon exercise of stock options191,693 — — — 3,036 — — 3,036 
Common stock issued upon vesting of RSUs142,867 — — — — — —  
Issuance of common stock in connection with acquisitions351,462 1 — — 20,012 — — 20,013 
Stock-based compensation— — — — 12,148 — — 12,148 
Common stock issued under Employee Stock Purchase Plan19,882 — — — 1,083 — — 1,083 
Net loss— — — — — (32,807)— (32,807)
Other comprehensive loss— — — — — — (3,056)(3,056)
Balance as of September 30, 202172,723,049 $73 (2,709,830)$(3)$733,202 $(467,006)$(4,157)$262,109 
See accompanying notes to unaudited condensed consolidated financial statements.
8


LIVEPERSON, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)    
Nine Months Ended
September 30,
 20222021
(In thousands)
OPERATING ACTIVITIES:  
Net loss$(184,023)$(75,121)
Adjustments to reconcile net loss to net cash (used in) provided by operating activities:  
Stock-based compensation expense100,323 47,967 
Depreciation21,414 20,471 
Amortization of purchased intangibles and finance leases16,530 4,939 
Amortization of debt issuance costs2,831 1,858 
Accretion of debt discount on convertible senior notes 24,770 
Allowance for credit losses4,669 2,431 
Changes in fair value of contingent consideration(8,568) 
Gain on settlement of leases (3,483)
Deferred income taxes770 (1,129)
Changes in operating assets and liabilities: 
Accounts receivable(13,856)(5,827)
Prepaid expenses and other current assets(13,519)(10,269)
Contract acquisition costs noncurrent(2,842)(4,765)
Other assets(123)741 
Accounts payable(4,229)(354)
Accrued expenses and other current liabilities(12,234)22,176 
Deferred revenue7,450 14,925 
Operating lease liabilities(2,148)(4,018)
Other liabilities8,084 330 
Net cash (used in) provided by operating activities(79,471)35,642 
INVESTING ACTIVITIES:  
Purchases of property and equipment, including capitalized software(35,212)(33,821)
Investment in joint venture(3,993) 
Payments for acquisition, net of cash acquired(3,458)(23,014)
Repayment of debt acquired in acquisition (1,955)
Payments for intangible assets(1,394)(1,931)
Net cash used in investing activities(44,057)(60,721)
FINANCING ACTIVITIES:  
Principal payments for financing leases(2,785)(2,604)
Proceeds from issuance of common stock in connection with the exercise of options and ESPP1,238 13,127 
Payments on conversion of convertible senior notes (2)
Net cash (used in) provided by financing activities(1,547)