LivePerson Announces Third Quarter 2012 Financial Results

-- Reports Revenue of $39.7 Million --

-- Adjusted EPS of $0.08; GAAP EPS of $0.03 --

-- Posts Record Bookings of $8.1 Million; Signs Record Number of Deals --

NEW YORK, Nov. 6, 2012 /PRNewswire/ -- LivePerson, Inc. (Nasdaq: LPSN), a provider of real-time intelligent engagement solutions that increase conversions and improve customer experience, today announced financial results for the third quarter ended September 30, 2012.

(Logo:  photos.prnewswire.com/prnh/20110105/NY24753LOGO-a )

Revenue

Revenue from business operations (B2B) for the third quarter was $36.1 million, a 17% increase as compared to the third quarter of 2011.  Total revenue for the third quarter was $39.7 million, a 16% increase from the third quarter of 2011.  Revenue from consumer operations for the third quarter was $3.6 million, flat versus the third quarter of 2011.

"During the quarter we saw continued strength in many of our key business and financial metrics, all indicators that point to the overall health of the business.  We signed a record number of deals and bookings topped $8 million.  We also continued to strengthen our core product offerings, making substantial progress with the integration of our advanced predictive targeting capabilities, rolling out a fortified turnkey mobile solution and advancing with our overall platform strategy," said CEO Robert LoCascio. 

Customer Expansion

LivePerson added 51 new enterprise and midmarket clients during the quarter, including:

• Tupperware
• Smith & Wesson
• Seamless
• Restaurant.com

The Company also expanded business with:

• Virgin Atlantic
• Deutsche Telekom
• Forex Capital Markets
• PR Newswire

Net Income

Net income for the third quarter of 2012 was $1.6 million or $0.03 per share as compared to net income of $2.7 million or $0.05 per share in the third quarter of 2011. Net income during the third quarter of 2012 was impacted by deal and litigation related expenses of approximately $0.7 million.

Adjusted Net Income and Adjusted EBITDA

LivePerson considers adjusted net income and adjusted earnings before other income/(expense), taxes, depreciation, amortization, stock-based compensation and other non-cash charges, if any (adjusted EBITDA) to be important financial indicators of the Company's operational strength and the performance of its business. These results should be considered in addition to results prepared in accordance with generally accepted accounting principles (GAAP), but should not be considered as a substitute for, or superior to, GAAP results.

The difference between adjusted EBITDA per share, a non-GAAP measure, and GAAP EPS, is other income/(expense), taxes, depreciation, amortization, stock-based compensation and other non-cash charges, if any.  The difference between adjusted net income per share and GAAP EPS is amortization of intangible assets and stock-based compensation.

A reconciliation of the differences between adjusted EBITDA and adjusted net income, and the most comparable financial measure calculated and presented in accordance with GAAP, is presented under the heading "Reconciliation of Non-GAAP Financial Information to GAAP" immediately following the Condensed Consolidated Statements of Income included below.

Adjusted net income for the third quarter of 2012 was $4.6 million or $0.08 per share, as compared to adjusted net income of $4.8 million or $0.09 per share in the third quarter of 2011. Adjusted Net income during the third quarter of 2012 was impacted by deal and litigation related expenses of approximately $0.7 million.

Adjusted EBITDA for the third quarter of 2012 was $7.4 million or $0.13 per share, as compared to adjusted EBITDA of $8.9 million or $0.16 per share in the third quarter of 2011. Adjusted EBITDA during the third quarter of 2012 was impacted by deal and litigation related expenses of approximately $0.7 million.

Cash

The Company's cash balance was $103.3 million at September 30, 2012 as compared to $100.6 million as of June 30, 2012.  The Company generated $3.4 million of cash from operations in the third quarter, and incurred planned capital expenditures related primarily to the purchase of servers and computer networking equipment, resulting in a cash outlay of approximately $3.9 million. 

Financial Guidance

The Company's 2012 guidance reflects previously disclosed deal related expenses including amortization, as well as expenses associated with ongoing litigation and international expansion. The following is the Company's current expectations for financial and operating performance:

Fourth Quarter 2012

• Revenue of $41.5 - $42 million
• Adjusted EBITDA of $0.12 - $0.14 per share
• Adjusted net income per share of $0.07 - $0.09
• GAAP EPS of $0.02 - $0.04
• Fully diluted share count of approximately 58.3 million

Full Year 2012

• Revenue of $156.5 - $157 million
• Adjusted EBITDA of $0.51 - $0.54 per share
• Adjusted net income per share of $0.30 - $0.33
• GAAP EPS of $0.10 - $0.13
• Fully diluted share count of approximately 57.5 million

Other Full Year 2012 Assumptions

• Amortization of intangibles of approximately $0.6 million
• Stock-compensation expense of approximately $10.7 million
• Depreciation of approximately $7.8 million
• Effective tax rate of approximately 39%
• Cash tax rate of approximately 37%
• Capital expenditures of approximately $10.4 million
• Costs associated with acquisitions, litigation and international expansion of approximately $5 million
• Acquisition-related operating expenses of $1.5M from the acquisitions of Amadesa and Look.io

Stock-Based Compensation

Included in the accompanying financial results are expenses related to stock-based compensation, as follows (in thousands):