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1. Company Snapshot

1.a. Company Description

LivePerson, Inc., together with its subsidiaries, provides conversational commerce software and Gainshare solutions.It operates in two segments, Business and Consumer.The Business segment enables brands to leverage LiveEngage's intelligence engine to connect with consumers through an integrated suite of mobile and online business messaging technologies.


The Consumer segment facilitates online transactions between experts and users seeking information and knowledge through mobile and online messaging.The company offers the Conversational Cloud, an enterprise-class and cloud-based platform, which enables businesses and consumers to connect through conversational interfaces, such as in-app and mobile messaging.It also provides professional services and value-added business consulting services.


The company sells its products through direct and indirect sales channels to Fortune 500 companies, Internet businesses, online merchants, small businesses, automotive dealers, universities, libraries, government agencies, and not-for-profit organizations.It operates in the United States, Canada, Latin America, South America, Europe, and the Asia-Pacific region.The company has strategic partnerships with TTEC that focuses on customer experience; and DMI to redefine customer experience with digital engagement, messaging, and artificial intelligence driven automation.


LivePerson, Inc.was incorporated in 1995 and is headquartered in New York, New York.

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1.b. Last Insights on LPSN

LivePerson's recent performance was negatively impacted by a 24.0% year-over-year decline in total revenue, driven primarily by customer cancellations and downsells. The company's Q1 2025 earnings release revealed a loss of $0.19 per share, although this was better than the Zacks Consensus Estimate of a loss of $0.20. Adjusted EBITDA was above the high-end of guidance, but this was not enough to offset the decline in revenue. The company's recent inducement grants under the NASDAQ Listing Rule 5635(c)(4) may indicate ongoing hiring efforts, but this has not yet translated to improved financial performance.

1.c. Company Highlights

2. LivePerson's Q3 2025 Earnings: A Stabilization Story

LivePerson reported revenue of $60.2 million, exceeding the high end of its guidance range, and adjusted EBITDA of $4.8 million. The company's actual EPS came out at -$4.55, relative to estimates at -$2.3. The revenue figure was driven by the timing of certain deals and variable revenue recognition, as stated by CFO John Collins. The company's net revenue retention was 80.4%, up from 78.2% in the second quarter, and average revenue per customer was $665,000, up 6% year over year.

Publication Date: Nov -23

📋 Highlights
  • Financial Outperformance: Revenue hit $60.2M, surpassing $60M guidance, while adjusted EBITDA reached $4.8M, reflecting disciplined cost reductions.
  • Generative AI Adoption Growth: 20% of platform conversations now use LivePerson's Generve AI, validated by 2025 Gartner Magic Quadrant recognition.
  • Guidance Raised: Full-year revenue guidance lifted to $235M–$240M (+$2.5M midpoint), with adjusted EBITDA raised to $7.5M–$12.5M (+$8M midpoint).
  • Product Innovation: Launched Conversation Simulator, enabling real-world AI/human agent testing with open architecture, differentiating in the conversational AI market.
  • Financial Health: Closed Q3 with $107M cash, $80.4% net revenue retention (up from 78.2% Q2), and sequential revenue per customer growth of 6% YoY.

Financial Discipline and Cost Reductions

The company's financial discipline and continued cost reductions have been key drivers of its performance. The cost restructuring that began in Q3 is expected to drive a sequential change in OpEx, resulting in an EBITDA guide for Q4 that is a few million ahead of the street. The company's cash balance sheet stood at $107 million at the end of the quarter.

Product Momentum and Validation

LivePerson's product momentum continues to grow, with nearly 20% of all conversations on its platform now using generative AI. The company was recognized in the 2025 Gartner Magic Quadrant for conversational AI platforms and the 2025 Gartner report for digital customer service. Its partnership with Google has created additional paths to market, and it has launched Copilot Translate built on Google's Gemini 2.5.

New Product Developments

The company introduced Conversation Simulator, a transformative product that enables brands to safely test, train, and validate AI agents in real-world conditions. This product has a fundamentally open architecture designed to serve as the vendor-agnostic testing and insurance hub for a business' AI and human conversational ecosystem. John Sabino stated that the company's experience in verticals and businesses gives it a unique dataset and knowledge to train scenarios and personas for customers, separating it from competitors.

Valuation Metrics

LivePerson's valuation metrics indicate a mixed picture. The company's P/S Ratio stands at 0.12, while its EV/EBITDA is -7.37. The ROE is 235.8%, and the Net Debt / EBITDA is -6.65. These metrics suggest that the market is pricing in significant growth expectations, but also highlighting the company's current financial challenges.

Outlook and Guidance

The company has raised its full-year revenue guidance range to $235 million to $240 million, up $2.5 million at the midpoint, and its full-year adjusted EBITDA guidance to a range of $7.5 million to $12.5 million, up $8 million at the midpoint. Analysts estimate next year's revenue growth at -15.5%, indicating a challenging ahead, but the company's decisive actions to stabilize its business and its product momentum are expected to drive long-term growth.

3. NewsRoom

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Former LivePerson CEO Launches KID®, a Safe Creative AI Device Amid Alarming AI Toy Safety Findings

Dec -03

Source: businesswire.com

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Tripp Lane Joins LivePerson Board of Directors

Nov -17

Source: prnewswire.com

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LivePerson (LPSN) Reports Q3 Loss, Tops Revenue Estimates

Nov -11

Source: zacks.com

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LivePerson, Inc. (LPSN) Q3 2025 Earnings Call Transcript

Nov -11

Source: seekingalpha.com

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LivePerson Announces Third Quarter 2025 Financial Results

Nov -10

Source: prnewswire.com

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LivePerson Launches Conversation Simulator to De-risk Generative AI and Accelerate AI Adoption

Nov -06

Source: prnewswire.com

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Analysts Estimate LivePerson (LPSN) to Report a Decline in Earnings: What to Look Out for

Nov -04

Source: zacks.com

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LivePerson to Announce Third Quarter 2025 Financial Results on November 10, 2025

Oct -28

Source: prnewswire.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (11.87%)

6. Segments

Hosted Services

Expected Growth: 11.95%

LivePerson's Hosted Services growth is driven by increasing demand for AI-powered conversational solutions, expansion into new industries, and strategic partnerships. The 11.95% growth rate is also fueled by the rising adoption of cloud-based customer experience platforms, growing need for automation and efficiency in customer service, and the company's continued innovation in messaging and chatbots.

Professional Services

Expected Growth: 11.47%

LivePerson's Professional Services segment growth of 11.47% is driven by increasing demand for digital transformation, adoption of conversational AI, and expansion of existing client relationships. Additionally, the company's strategic partnerships, innovative product offerings, and strong sales execution are contributing to this growth.

7. Detailed Products

Conversational AI

LivePerson's Conversational AI is a platform that enables businesses to automate conversations with customers using artificial intelligence and machine learning.

Messaging Platform

LivePerson's Messaging Platform allows businesses to engage with customers across various messaging channels, including SMS, WhatsApp, Facebook Messenger, and more.

LiveEngage

LiveEngage is a cloud-based platform that enables businesses to manage customer conversations across multiple channels, including messaging, voice, and email.

Knowledge Center

LivePerson's Knowledge Center is a knowledge management platform that enables businesses to create, manage, and share knowledge bases with customers and agents.

Agent Workspace

LivePerson's Agent Workspace is a unified desktop that enables agents to manage customer conversations across multiple channels, including messaging, voice, and email.

Analytics and Reporting

LivePerson's Analytics and Reporting provides businesses with insights into customer conversations, enabling them to optimize their customer engagement strategies.

8. LivePerson, Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

LivePerson, Inc. operates in a niche market, providing conversational AI solutions, which reduces the threat of substitutes. However, the increasing adoption of automation and AI in customer service may lead to the development of alternative solutions.

Bargaining Power Of Customers

LivePerson, Inc.'s customers are primarily large enterprises, which may have some bargaining power. However, the company's strong brand reputation and the complexity of its solutions reduce the bargaining power of customers.

Bargaining Power Of Suppliers

LivePerson, Inc. has a diversified supplier base, which reduces the bargaining power of suppliers. The company's strong financial position also gives it the ability to negotiate favorable terms with its suppliers.

Threat Of New Entrants

The conversational AI market is rapidly growing, and new entrants may be attracted to the market. However, LivePerson, Inc.'s strong brand reputation, patented technology, and established customer base create barriers to entry for new entrants.

Intensity Of Rivalry

The conversational AI market is highly competitive, with several established players. However, LivePerson, Inc.'s strong brand reputation, patented technology, and established customer base help the company to differentiate itself from its competitors.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 92.45%
Debt Cost 3.95%
Equity Weight 7.55%
Equity Cost 12.02%
WACC 4.56%
Leverage 1225.05%

11. Quality Control: LivePerson, Inc. passed 1 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Stock-Card
Cepton

A-Score: 4.8/10

Value: 8.4

Growth: 4.1

Quality: 5.2

Yield: 0.0

Momentum: 7.5

Volatility: 3.7

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E2open

A-Score: 3.9/10

Value: 7.5

Growth: 3.2

Quality: 2.8

Yield: 0.0

Momentum: 6.0

Volatility: 3.7

1-Year Total Return ->

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Digital Turbine

A-Score: 3.4/10

Value: 6.0

Growth: 3.4

Quality: 1.6

Yield: 0.0

Momentum: 9.0

Volatility: 0.3

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LivePerson

A-Score: 3.3/10

Value: 10.0

Growth: 2.3

Quality: 6.2

Yield: 0.0

Momentum: 0.5

Volatility: 0.7

1-Year Total Return ->

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Phunware

A-Score: 3.0/10

Value: 7.5

Growth: 4.3

Quality: 3.4

Yield: 0.0

Momentum: 1.5

Volatility: 1.3

1-Year Total Return ->

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Upland Software

A-Score: 3.0/10

Value: 7.6

Growth: 3.1

Quality: 2.2

Yield: 0.0

Momentum: 4.0

Volatility: 1.0

1-Year Total Return ->

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

4.93$

Current Price

4.93$

Potential

-0.00%

Expected Cash-Flows