LivePerson Reports First Quarter 2025 Financial Results Amidst Challenges

LivePerson Announces First Quarter 2025 Financial Results

On May 7, 2025, LivePerson, Inc. (NASDAQ: LPSN) publicly disclosed its earnings results for the first quarter ending March 31, 2025. As a recognized leader in enterprise conversational AI, the company reported total revenue of $64.7 million. This figure, while above the midpoint of the company's guidance range, represents a decline of 24.0% compared to the same quarter in the previous year. The revenue drop can largely be attributed to customer cancellations and reduced service agreements.

During this quarter, LivePerson secured a total of 50 contracts, breaking down into 45 renewals and five new client acquisitions. The average revenue per enterprise and mid-market customer for the trailing twelve months saw a modest increase of 2.4%, rising to $640,000 from approximately $625,000 in the previous year. This metric focuses solely on recurring revenue, directly linked to the company’s net revenue retention strategy.

John Sabino, CEO of LivePerson, stated, "We delivered on our financial guidance during this quarter and made significant strides towards our strategic objectives. Our innovative approach, allowing clients to integrate AI and digital capabilities smoothly, has resonated well, especially as they are choosing to enhance their existing frameworks rather than entirely replace them. We are particularly excited about our impending integration with Amazon Connect, which we view as pivotal for growth."

The need for AI-driven solutions has grown significantly among enterprises, reinforcing LivePerson's focus on developing AI safeguards and remaining a trusted partner in highly regulated sectors, as noted by CFO John Collins.

Customer Acquisitions and Renewals

In the first quarter, noteworthy expansions included major clients such as IBM, a leading global financial institution, and a renowned fintech platform. New clients added during this quarter featured one of Canada’s largest retailers and a key player in digital entertainment.

Financial Challenges Ahead

Despite these developments, the company reported a net loss of $14.1 million or $0.15 per share, a substantial improvement compared to a loss of $35.6 million or $0.40 per share during the same quarter in 2024. The adjusted operating loss decreased to $5.4 million from $7.7 million in Q1 2024. However, adjusted EBITDA slightly improved to $0.2 million from $0.5 million the prior year, highlighting the ongoing financial strain while exhibiting early signs of recovery.

The cash balance stood at $176.3 million as of March 31, 2025, indicating a decrease from $183.2 million at the end of 2024. Looking ahead, the company projects total revenue for Q2 2025 to be between $57 million and $60 million, projecting a year-over-year decline of 29% to 25%. For the full year 2025, expected revenue ranges from $240 million to $255 million, which reflects a decrease of 23% to 18% compared to 2024.

Conclusion

In light of the reported results, LivePerson is actively working to address the challenges posed by customer attrition and is committed to innovating its offerings while maintaining robust partnerships. The strategic focus on AI integration is anticipated to yield positive results in customer engagement and operational efficiency moving forward. Investors and stakeholders will be keen to monitor the company's next steps as it navigates a complex market environment and seeks sustainable growth.

For further insights, LivePerson plans to host an earnings teleconference later today to elaborate on its financials and future outlook. Stakeholders are encouraged to participate via the investor relations page on LivePerson's website to gain insights directly from the leadership team.