Liveperson ((LPSN)) has held its Q1 earnings call. Read on for the main highlights of the call.
The recent earnings call for LivePerson presented a balanced sentiment, highlighting both achievements and challenges. The company exceeded its revenue and EBITDA guidance, showcasing significant growth in AI tool adoption and strategic partnerships. However, it also faced hurdles such as revenue decline, net revenue retention issues, and elongated sales cycles. This mixed sentiment reflects the company’s current position, with notable successes tempered by ongoing challenges.
Revenue and EBITDA Exceed Guidance
In the first quarter of 2025, LivePerson reported a revenue of $64.7 million, surpassing the midpoint of their guidance range. Additionally, the adjusted EBITDA was $0.2 million, exceeding the high end of their expectations. This financial performance indicates a strong start to the year, demonstrating the company’s ability to manage its operations effectively despite market challenges.
Growth in AI Tool Adoption
LivePerson experienced a 14% increase in the number of customers using generative AI tools during Q1. Moreover, there was a 25% sequential increase in conversations powered by generative AI. This growth underscores the company’s successful focus on AI innovation and its increasing importance in customer interactions.
Significant Customer Wins
The company secured 50 deals in the first quarter, including five new logos and 45 expansions and renewals. This marks a 25% increase quarter-over-quarter, highlighting LivePerson’s ability to expand its customer base and strengthen existing relationships.
Successful Partnerships and Integrations
LivePerson is launching an integration with Amazon Connect, which has already garnered early customer interest. Additionally, the company achieved a successful renewal and expanded partnership with IBM. These strategic partnerships are expected to enhance LivePerson’s capabilities and market reach.
Revenue Decline
Despite positive developments, LivePerson reported a decline in hosted services revenue, which was $55.1 million, down 23% year-over-year. Recurring revenue also saw a 22% year-over-year decline, indicating areas where the company needs to focus on reversing the trend.
Net Revenue Retention Decline
Net revenue retention fell to 80% in Q1, down from 82% in the previous quarter. The company anticipates continued decline until revenue growth resumes, signaling the need for strategic adjustments to improve retention rates.
Extended Buying Cycles
Several large deals expected to close in Q1 were delayed to Q2 due to extended enterprise buying cycles and new approval gates for risk and compliance. This shift highlights the challenges LivePerson faces in closing deals within expected timelines.
Forward-Looking Guidance
Looking ahead, LivePerson reaffirmed its full-year revenue guidance of $240 million to $255 million, with approximately 93% expected to be recurring. Despite anticipating a sequential decline in revenue through the year, the company expects net new ARR to turn positive in the second half. LivePerson also aims for a 35% partner attach rate and is focused on driving commercial performance, controlling costs, and accelerating product innovation.
In summary, LivePerson’s earnings call revealed a balanced sentiment with both achievements and challenges. The company exceeded revenue and EBITDA expectations and made strides in AI adoption and partnerships. However, it faces ongoing challenges with revenue decline and retention. Looking forward, LivePerson remains optimistic about its growth prospects and strategic initiatives.