LivePerson Announces Fourth Quarter 2022 Financial Results

The following forward-looking measures and the underlying assumptions involve significant known and unknown risks and uncertainties, and actual results may vary materially from these forward-looking measures. The Company does not present a quantitative reconciliation of the forward-looking non-GAAP financial measures, adjusted EBITDA, adjusted EBITDA margin, and non-GAAP gross margin to the most directly comparable GAAP financial measures (or otherwise present such forward-looking GAAP measures) because it is impractical to forecast certain items without unreasonable efforts due to the uncertainty and inherent difficulty of predicting, within a reasonable range, the occurrence and financial impact of and the periods in which such items may be recognized. In particular, these non-GAAP financial measures exclude certain items, including amortization of purchased intangibles, stock-based compensation, depreciation, other litigation and consulting costs, restructuring costs, contingent earn-out adjustments, benefit from income taxes, interest income (expense), and other expense (income), which depend on future events that the Company is unable to predict. Depending on the size of these items, they could have a significant impact on the Company’s GAAP financial results.

For the first quarter of 2023 guidance, we expect total revenue to range from $106 million to $109 million or (18.5%) to (16.1%) year over year.  We also expect Adjusted EBITDA loss to range from $(8) million to $(5.5) million, or a margin of (7.4)% to (5.1)%.   The year over year decrease in revenue and the sequential decrease in adjusted EBITDA are both driven primarily by decreases in non-Core revenue expected beginning in the first quarter including decreasing Gainshare labor and variable revenue and decreasing professional services revenue from healthcare. We also observed smaller-than-expected deal sizes in the fourth quarter relative to the third quarter of 2022, indicating friction in our sales cycle from the macroenvironment. Lower deal sizes in the fourth quarter also negatively impacted our expectations for the first quarter.

For full year 2023 guidance, we expect total revenue to range from $422 million to $436 million or (18)% to (15)% year over year.  We also expect Adjusted EBITDA to range from $15 million to $32 million, or a margin of 4% to 7%. 

Consistent with the themes of transparency and focus on B2B Core, we think providing guidance on B2B Core recurring revenue would also be instructive for investors.

For the first quarter of 2023, we expect recurring revenue to range from $80 million to $83 million or (6.9)% to (3.4)% year over year.  For adjusted EBITDA, we expect a loss in the range of $(8.3) million to (5) million, or a margin of (9.6)% to (5.8)%.

For the full year of 2023, we expect recurring revenue to range from $334 million to $347 million or 0% to 4% growth year over year and adjusted EBITDA to range from $27 million to $40 million, or a margin of 7.6% to 10.9%.

On an annualized basis, we expect the B2B Core to exit the year with 16% to 19% adjusted EBITDA margins and 7% to 10% free cash flow margins. 

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