LivePerson Announces Fourth Quarter and Full Year 2011 Financial Results
NEW YORK, Feb. 13, 2012 /PRNewswire/ -- LivePerson, Inc. (Nasdaq: LPSN), a provider of real-time chat, voice and content solutions that increase conversions and improve customer experience, today announced financial results for the fourth quarter and year ended December 31, 2011.
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Revenue
Revenue from business operations (B2B) for the fourth quarter was $32.9 million, a 26% increase as compared to the fourth quarter of 2010 and a 7% increase as compared to the third quarter of 2011. Total revenue for the fourth quarter was $36.5 million, a 22% increase from the fourth quarter of 2010, and a 6% sequential increase as compared to the third quarter of 2011.
B2B revenue for the full year was $118.6 million, a 24% increase from 2010. Total revenue, which includes our consumer operations, was $133.1 million for the full year, a 21% increase over 2010.
Revenue from consumer operations for the fourth quarter and full year was $3.6 million and $14.5 million, respectively.
"The fourth quarter was marked by consistently strong growth rates and operating margins as well as solid cash flow generation, which was on par with the year as a whole," said CEO Robert LoCascio.
"2011 was a noteworthy year for LivePerson as we began to shift from the framework of a single product to a multi-product platform offering our customers even more ways to meaningfully engage their customers. A big focus in 2012 and beyond will be continuing to build on the strength of our core and working to establish LivePerson as a leader in the data intelligence field."
Customer Expansion
LivePerson added 25 new enterprise and midmarket clients during the quarter, including:
-- BMC Software
-- A leading online travel agency
-- A major utility company in the Northeast
-- A leading provider of property casualty insurance
-- A top motor vehicle manufacturer
The Company also expanded business with:
-- Petco
-- Telefonica O2
-- Aviva
-- Hewlett Packard
-- EDF Energy
-- Royal Bank of Scotland
Net Income
Net income for the fourth quarter of 2011 was $3.9 million or $0.07 per share as compared to $2.7 million or $0.05 per share in the fourth quarter of 2010, and net income of $2.7 million or $0.05 per share in the third quarter of 2011. Net income for the full year was $12.0 million or $0.22 per share, as compared to $9.3 million or $0.18 per share in the prior year.
Adjusted Net Income and Adjusted EBITDA
LivePerson considers adjusted net income and adjusted earnings before other income/(expense), taxes, depreciation, amortization and stock-based compensation (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.
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.
The difference between adjusted EBITDA per share, a non-GAAP measure, and GAAP EPS, is interest, 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.
Adjusted net income for the fourth quarter of 2011 was $5.8 million or $0.10 per share, as compared to $4.6 million or $0.09 per share in the fourth quarter of 2010, and $4.8 million or $0.09 per share in the third quarter of 2011. Adjusted net income for the full year was $19.8 million or $0.36 per share, as compared to $15.9 million or $0.30 per share in the prior year.
Adjusted EBITDA for the fourth quarter of 2011 was $9.6 million or $0.17 per share, as compared to $7.9 million or $0.15 per share in the fourth quarter of 2010, and $8.9 million or $0.16 per share in the third quarter of 2011. Adjusted EBITDA for the full year was $34.0 million or $0.62 per share, as compared to $26.8 million or $0.51 per share in the prior year.
Cash
The Company's cash balance was $93.3 million at December 31, 2011 as compared to $80.9 million as of September 30, 2011, and $61.3 million at December 31, 2010. The Company generated $7.6 million of cash from operations during the fourth quarter.
For the full year, the Company generated $25.1 million of cash from operations, and incurred planned capital expenditures primarily related to the purchase of servers and computer networking equipment and the relocation of its corporate headquarters, resulting in a cash outlay of approximately $7.3 million.
Financial Expectations
Following is the Company's current expectation for financial and operating performance:
First Quarter 2012
-- Revenue of $37.0 - $37.5 million
-- Adjusted EBITDA of $0.15 - $0.17 per share
-- Adjusted net income per share of $0.08 - $0.10
-- GAAP EPS of $0.04 - $0.06
-- Fully diluted share count of approximately 56 million
Full Year 2012
-- Revenue of $160 - $165 million
-- Adjusted EBITDA of $0.66 - $0.70 per share
-- Adjusted net income per share of $0.40 - $0.44
-- GAAP EPS of $0.21 - $0.25
-- Fully diluted share count of approximately 57 million
Other Full Year 2012 Assumptions
-- Amortization of intangibles of approximately $0.5 million
-- Stock-compensation expense of approximately $10.5 million
-- Depreciation of approximately $8.5 million
-- Effective tax rate of approximately 37%
-- Cash tax rate of approximately 37%
-- Capital expenditures of approximately $10 million
Stock-Based Compensation
Included in the accompanying financial results are expenses related to stock-based compensation, as follows (in thousands):
3 months
ended Year ended
December 31, December 31,
2011 2011
------------- -------------
Cost of revenue $265 $1,023
Product
development 404 1,703
Sales and
marketing 463 1,668
General and
administrative 689 2,377
--- -----
Total $1,821 $6,771
Amortization of Intangible Assets
Included in the accompanying financial results are expenses related to the amortization of intangible assets, as follows (in thousands):
3 months
ended Year ended
December 31, December 31,
2011 2011
------------- -------------
Cost of revenue $0 $920
General and
administrative 77 109
--- ---
Total $77 $1,029
Earnings Teleconference and Video Discussion Information
The Company will discuss its fourth quarter and full year 2011 financial results during a teleconference today, February 13, 2012, at 5:00 p.m. EST. To participate via telephone domestic callers (U.S. and Canada) should dial 877-507-3684, while International callers should dial 706-634-9559, both should reference the conference ID "49460448." The conference call will also be simulcast live on the Internet and can be accessed by logging onto the investor relations section of the Company's web site at http://www.liveperson.com/about/ir.
If you are unable to participate on the live call, the teleconference will be available for replay approximately two hours after the call. To access the replay, please call 855-859-2056 (U.S. and Canada) or 404-537-3406 (international). Please reference the conference ID "49460448."
The Company will also post a video discussion of its fourth quarter and full year 2011 results on YouTube. To view, click on the following link: http://www.youtube.com/user/myliveperson.
About LivePerson
LivePerson, Inc. (Nasdaq: LPSN) offers a cloud-based platform that enables businesses to proactively connect in real-time with their customers via chat, voice, and content delivery at the right time, through the right channel, including websites, social media, and mobile devices. This "intelligent engagement" is driven by real-time behavioral analytics, producing connections based on a true understanding of business objectives and customer needs.
More than 8,500 companies rely on LivePerson's platform to increase conversions and improve customer experience, including Hewlett-Packard, IBM, Microsoft, Verizon, Sky, Walt Disney, PNC, QVC and Orbitz.
LivePerson received the CODiE award for Best Ecommerce Solution in 2011, and has been named one of America's 25 Fastest-Growing Tech Companies by Forbes in 2011 and a Company of the Year by Frost and Sullivan in 2011. LivePerson is headquartered in New York City with offices in San Francisco, Tel Aviv, Atlanta, London and Melbourne, Australia.
For more information, please visit www.liveperson.com.
Non-GAAP Financial Disclosure
Investors are cautioned that the adjusted EBITDA, or earnings/(loss) before other income/(expense), taxes, depreciation, amortization and stock-based compensation, and adjusted net income, or net income excluding amortization of intangible assets and stock-based compensation, information contained in this press release are not financial measures under generally accepted accounting principles. In addition, they should not be construed as alternatives to any other measures of performance determined in accordance with generally accepted accounting principles, or as indicators of our operating performance, liquidity or cash flows generated by operating, investing and financing activities, as there may be significant factors or trends that they fail to address. We present this financial information because we believe that it is helpful to some investors as a measure of our performance. We caution investors that non-GAAP financial information, by its nature, departs from traditional accounting conventions; accordingly, its use can make it difficult to compare our current results with our results from other reporting periods and with the results of other companies.
Safe Harbor Provision
Statements in this press release regarding LivePerson that are not historical facts are forward-looking statements and are subject to risks and uncertainties that could cause actual future events or results to differ materially from such statements. Any such forward-looking statements are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. It is routine for our internal projections and expectations to change as the quarter and year progresses, and therefore it should be clearly understood that the internal projections and beliefs upon which we base our expectations may change. Although these expectations may change, we are under no obligation to inform you if they do. Actual events or results may differ materially from those contained in the projections or forward-looking statements. Some of the factors that could cause actual results to differ materially from the forward-looking statements contained herein include, without limitation: potential fluctuations in our quarterly and annual results; the adverse effect that the global recession may have on our business; competition in the real-time sales, marketing, customer service and online engagement solutions market; our ability to retain existing clients and attract new clients; risks related to new regulatory or other legal requirements that could materially impact our business; impairments to goodwill that result in significant charges to earnings; volatility of the value of certain currencies in relation to the US dollar, particularly the New Israeli Shekel, U.K. pound and Euro; risks related to our international operations, particularly our operations in Israel, and the civil and political unrest in that region; responding to rapid technological change and changing client preferences; our ability to retain key personnel and attract new personnel; risks related to the operational integration of acquisitions; technology systems beyond our control and technology-related defects that could disrupt the LivePerson services; privacy concerns relating to the Internet that could result in new legislation or negative public perception; risks related to the regulation or possible misappropriation of personal information; legal liability and/or negative publicity for the services provided to consumers via our technology platforms; risks related to protecting our intellectual property rights or potential infringement of the intellectual property rights of third parties; and risks related to our common stock being traded on more than one market, which may result in additional variations in the trading price of our common stock. This list is intended to identify only certain of the principal factors that could cause actual results to differ from those discussed in the forward-looking statements. Readers are referred to the reports and documents filed from time to time by us with the Securities and Exchange Commission for a discussion of these and other important risk factors that could cause actual results to differ from those discussed in forward-looking statements.
LivePerson, Inc.
Condensed Consolidated Statements of Income
(In Thousands, Except Share and Per Share Data)
Unaudited
Three Months Ended Twelve Months Ended
December 31, December 31,
------------ ------------
2011 2010 2011 2010
---- ---- ---- ----
Revenue $36,509 $29,935 $133,089 $109,862
------- ------- -------- --------
Operating
expenses:
Cost
of
revenue 8,047 8,235 33,195 29,640
Product
development 5,563 4,257 20,222 15,711
Sales
and
marketing 10,738 8,404 38,884 32,835
General
and
administrative 6,008 4,931 21,044 17,077
Amortization
of
intangibles 77 11 109 259
--- --- --- ---
Total
operating
expenses 30,433 25,838 113,454 95,522
------ ------ ------- ------
Income
from
operations 6,076 4,097 19,635 14,340
Other
expense,
net (117) (43) (485) (7)
---- --- ---- ---
Income
before
provision
for
income
taxes 5,959 4,054 19,150 14,333
Provision
for
income
taxes 2,083 1,312 7,112 5,074
----- ----- ----- -----
Net
income $3,876 $2,742 $12,038 $9,259
====== ====== ======= ======
Basic
net
income
per
common
share $0.07 $0.05 $0.23 $0.18
===== ===== ===== =====
Diluted
net
income
per
common
share $0.07 $0.05 $0.22 $0.18
===== ===== ===== =====
Weighted
average
shares
outstanding
used
in
basic
net
income
per
common
share
calculation 53,563,396 51,133,917 52,876,999 50,721,880
========== ========== ========== ==========
Weighted
average
shares
outstanding
used
in
diluted
net
income
per
common
share
calculation 55,756,350 53,831,339 55,008,742 52,907,541
========== ========== ========== ==========
LivePerson, Inc.
Reconciliation of Non-GAAP Financial Information to GAAP
(In Thousands, Except Share and Per Share Data)
Unaudited
Unaudited Supplemental Data
---------------------------
The following information is not a financial measure under generally
accepted accounting principles (GAAP). In addition, it should not be
construed as an alternative to any other measures of performance determined
in accordance with GAAP, or as an indicator of our operating performance,
liquidity or cash flows generated by operating, investing and financing
activities as there may be significant factors or trends that it fails to
address. We present this financial information because we believe that it
is helpful to some investors as one measure of our operations. We caution
investors that non-GAAP financial information, by its nature, departs from
traditional accounting conventions; accordingly, its use can make it
difficult to compare our results with our results from other reporting
periods and with the results of other companies.
Three Months Ended Twelve Months Ended
December 31, December 31,
------------ ------------
2011 2010 2011 2010
---- ---- ---- ----
Net income in accordance with
generally
accepted accounting principles $3,876 $2,742 $12,038 $9,259
Add/(less):
(a) Amortization of intangibles 77 318 1,029 1,486
(b) Stock-based compensation 1,821 1,539 6,771 5,142
(c) Depreciation 1,634 1,903 6,563 5,791
(d) Provision for income taxes 2,083 1,312 7,112 5,074
(e) Other expense, net 117 43 485 7
---
Adjusted EBITDA (1) $9,608 $7,857 $33,998 $26,759
====== ====== ======= =======
Diluted Adjusted EBITDA per
common share $0.17 $0.15 $0.62 $0.51
===== ===== ===== =====
Weighted average shares used in
diluted adjusted EBITDA
per common share 55,756,350 53,831,339 55,008,742 52,907,541
========== ========== ========== ==========
Net income in accordance with
generally
accepted accounting principles $3,876 $2,742 $12,038 $9,259
Add:
(a) Amortization of intangibles 77 318 1,029 1,486
(b) Stock-based compensation 1,821 1,539 6,771 5,142
-----
Adjusted net income $5,774 $4,599 $19,838 $15,887
====== ====== ======= =======
Diluted adjusted net income per
common share $0.10 $0.09 $0.36 $0.30
===== ===== ===== =====
Weighted average shares used in
diluted adjusted net income
per common share 55,756,350 53,831,339 55,008,742 52,907,541
========== ========== ========== ==========
Adjusted EBITDA $9,608 $7,857 $33,998 $26,759
Add/(less):
Changes in operating assets and
(a) liabilities (132) 585 (1,849) (7,127)
(b) Provision for doubtful accounts 60 101 290 166
(c) Provision for income taxes (2,083) (1,312) (7,112) (5,074)
(d) Deferred income taxes 291 694 234 832
(e) Other expense, net (117) (43) (485) (7)
-----
Net cash provided by operating
activities $7,627 $7,882 $25,076 $15,549
====== ====== ======= =======
(1) Earnings/(loss) before other income/(expense), taxes,
depreciation, amortization, stock-based compensation and other non-
cash charges.
LivePerson, Inc.
Condensed Consolidated Balance Sheets
(In Thousands)
Unaudited
December 31, 2011 December 31, 2010
----------------- -----------------
ASSETS
Current assets:
Cash and cash equivalents $93,278 $61,336
Accounts receivable, net 20,999 16,491
Prepaid expenses and other
current assets 5,390 6,341
Deferred tax assets, net 2,342 1,529
----- -----
Total current assets 122,009 85,697
Property and equipment, net 13,879 12,762
Intangibles, net 1,095 2,124
Goodwill 24,090 24,015
Deferred tax assets, net 2,829 3,876
Deferred implementation costs,
net of current 247 164
Security deposits 356 499
Other assets 1,546 2,006
----- -----
Total assets $166,051 $131,143
========
LIABILITIES AND STOCKHOLDERS'
EQUITY
Current liabilities:
Accounts payable $8,258 $6,416
Accrued expenses 12,019 12,111
Deferred revenue 5,378 5,570
----- -----
Total current
liabilities 25,655 24,097
Deferred revenue, net of current 1,152 513
Other liabilities 1,546 1,890
----- -----
Total liabilities 28,353 26,500
------
Commitments and contingencies
Total stockholders' equity 137,698 104,643
------- -------
Total liabilities and
stockholders' equity $166,051 $131,143
===========================
Investor contact:
Stacey Yonkus
212-609-4236
SOURCE LivePerson, Inc.