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LivePerson Reports Third Quarter 2025 Financial Results

LivePerson, Inc. (NASDAQ: LPSN), a pioneer in conversational AI and digital transformation solutions, recently shared its financial outcomes for the third quarter ending September 30, 2025. While the company surpassed its projected revenue estimates, the reported figures still reflect a notable year-over-year decline, shedding light on the challenges it faces in a competitive market.

Financial Highlights

For the third quarter of 2025, LivePerson reported total revenues of $60.2 million, which, while higher than its expectations, marked a decrease of 19% compared to the same quarter last year. The primarily attributable factors for this decline included customer cancellations and downsells.

The company successfully secured 28 new agreements in total during this quarter, including 26 renewals and 2 new logos. Notably, the average revenue per customer, particularly in the enterprise segment, demonstrated an encouraging rise, with a 5.6% increase from the previous year to $665,000. This metric remains vital as it is calculated based solely on recurrent revenue.

CEO and CFO Insights

John Sabino, LivePerson’s CEO, expressed optimism about the company's future, citing ongoing efforts to bolster its financial stability and maintain customer trust. He emphasized that the company's resilience is supported by ongoing product innovation, such as the expanded partnership with Google and the introduction of the new Conversation Simulator. According to Sabino, these advancements not only enhance customer confidence but also pave the way for new growth avenues.

Similarly, CFO and COO John Collins explained that the third quarter involved significant cost rationalization and improvements to the capital structure, aiming to achieve sustainable free cash flow moving forward. The continued product innovation and on-schedule transitions to Google Cloud Platform (GCP) are expected to further enhance the company's profitability prospects.

Customer Expansion Efforts

The ongoing customer expansion initiative has borne fruit, with notable deals being signed with prominent organizations, including a major U.S. health plan provider and a leading amusement park. Additionally, the entry of new clients, such as a global industrial company, showcases LivePerson’s growing acceptance in various sectors.

Adjusted Financial Metrics

LivePerson's third-quarter net income stood at $8.7 million, essentially a recovery from the net loss of $28.3 million incurred during the same quarter of the previous year. This substantial turnaround largely stemmed from a $27.7 million gain on troubled debt restructuring. However, adjusted operating loss for the same period showed a deficit of $0.7 million, compared to an adjusted operating income of virtually zero in Q3 2024.

Adjusted EBITDA for the third quarter was $4.8 million, reflecting a decrease from $7.3 million year-over-year. These figures denote that although revenue figures were above expectations, profitability remains a distinct challenge for LivePerson.

Cash and Future Guidance

The company's cash reserves have significantly diminished, standing at $106.7 million as of September 30, 2025, down from $183.2 million at the end of 2024. Looking ahead, LivePerson expects revenues for Q4 2025 to fluctuate between $50.5 million and $55.5 million, projecting a year-over-year decrease of 24% to 31%. For the entire year, anticipated total revenue is estimated to range from $235 million to $240 million, showcasing another considerable year-over-year decline.

Conclusion

In summary, LivePerson's results for Q3 2025 encapsulate both a mixed bag of achievements and ongoing struggles within the evolving AI landscape. With several strategic initiatives underway to regain momentum, the company aims to build on its innovative capacities while addressing the significant revenue challenges ahead.