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LIVEPERSON, INC.
|
(Exact Name of Registrant as Specified in Its Charter)
|
Delaware
|
|
13-3861628
|
(State or Other Jurisdiction of
Incorporation or Organization)
|
|
(IRS Employer Identification No.)
|
|
|
|
475 Tenth Avenue, 5th Floor
New York, New York
|
|
10018
|
(Address of Principal Executive Offices)
|
|
(Zip Code)
|
(212) 609-4200
|
(Registrant’s Telephone Number, Including Area Code)
|
Large accelerated filer
¨
|
Accelerated filer
ý
|
Non-accelerated filer
¨
|
Smaller reporting company
¨
|
(Do not check if a smaller reporting company)
|
Emerging growth company
¨
|
LIVEPERSON, INC.
September 30, 2017
FORM 10-Q
INDEX
|
||
|
|
PAGE
|
Part I.
|
Financial Information
|
|
|
|
|
Item 1.
|
Financial Statements (Unaudited):
|
|
|
|
|
|
Condensed Consolidated Balance Sheets as of September 30, 2017 and December 31, 2016
|
|
|
|
|
|
Condensed Consolidated Statements of Operations for the Three and Nine Months Ended September 30, 2017 and 2016
|
|
|
|
|
|
Condensed Consolidated Statements of Comprehensive Loss for the Three and Nine Months Ended September 30, 2017 and 2016
|
|
|
|
|
|
Condensed Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 2017 and 2016
|
|
|
|
|
|
Notes to Condensed Consolidated Financial Statements
|
|
|
|
|
Item 2.
|
Management’s Discussion and Analysis of Financial Condition and Results of Operations
|
|
|
|
|
Item 3.
|
Quantitative and Qualitative Disclosures about Market Risk
|
|
|
|
|
Item 4.
|
Controls and Procedures
|
|
|
|
|
Part II.
|
Other Information
|
|
|
|
|
Item 1.
|
Legal Proceedings
|
|
|
|
|
Item 1A.
|
Risk Factors
|
|
|
|
|
Item 2.
|
Unregistered Sales of Equity Securities and Use of Proceeds
|
|
|
|
|
Item 3.
|
Defaults Upon Senior Securities
|
|
|
|
|
Item 4.
|
Mine Safety Disclosures
|
|
|
|
|
Item 5.
|
Other Information
|
|
|
|
|
Item 6.
|
Exhibits
|
|
|
|
|
Signatures
|
|
LIVEPERSON, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS)
(UNAUDITED)
|
|||||||
|
September 30,
2017 |
|
December 31,
2016 |
||||
|
|
|
(Note 1)
|
||||
ASSETS
|
|
|
|
|
|
||
CURRENT ASSETS:
|
|
|
|
|
|
||
Cash and cash equivalents
|
$
|
54,361
|
|
|
$
|
50,889
|
|
Cash held as collateral
|
1,451
|
|
|
3,962
|
|
||
Accounts receivable, net of allowance for doubtful accounts of $1,299 and $1,732 as of September 30, 2017 and December 31, 2016, respectively
|
32,180
|
|
|
31,823
|
|
||
Prepaid expenses and other current assets
|
7,734
|
|
|
5,477
|
|
||
Total current assets
|
95,726
|
|
|
92,151
|
|
||
Property and equipment, net
|
32,183
|
|
|
28,397
|
|
||
Intangibles, net
|
12,974
|
|
|
16,510
|
|
||
Goodwill
|
80,499
|
|
|
80,245
|
|
||
Deferred tax assets
|
699
|
|
|
773
|
|
||
Other assets
|
1,487
|
|
|
1,562
|
|
||
Total assets
|
$
|
223,568
|
|
|
$
|
219,638
|
|
|
|
|
|
||||
LIABILITIES AND STOCKHOLDERS’ EQUITY
|
|
|
|
|
|
||
CURRENT LIABILITIES:
|
|
|
|
|
|
||
Accounts payable
|
$
|
3,443
|
|
|
$
|
7,288
|
|
Accrued expenses and other current liabilities
|
37,207
|
|
|
40,250
|
|
||
Deferred revenue
|
35,694
|
|
|
27,145
|
|
||
Total current liabilities
|
76,344
|
|
|
74,683
|
|
||
Other liabilities
|
2,745
|
|
|
3,147
|
|
||
Deferred tax liability
|
4,082
|
|
|
3,332
|
|
||
Total liabilities
|
83,171
|
|
|
81,162
|
|
||
|
|
|
|
||||
Commitments and contingencies
|
|
|
|
|
|
||
STOCKHOLDERS’ EQUITY:
|
|
|
|
|
|
||
Common stock
|
59
|
|
|
58
|
|
||
Additional paid-in capital
|
301,614
|
|
|
289,524
|
|
||
Treasury stock
|
(3
|
)
|
|
(2
|
)
|
||
Accumulated deficit
|
(159,414
|
)
|
|
(144,944
|
)
|
||
Accumulated other comprehensive loss
|
(1,859
|
)
|
|
(6,160
|
)
|
||
Total stockholders’ equity
|
140,397
|
|
|
138,476
|
|
||
Total liabilities and stockholders’ equity
|
$
|
223,568
|
|
|
$
|
219,638
|
|
LIVEPERSON, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)
(UNAUDITED)
|
||||||||||||||||
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
|
|
September 30,
|
|
September 30,
|
||||||||||||
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Revenue
|
|
$
|
56,493
|
|
|
$
|
54,518
|
|
|
$
|
161,486
|
|
|
$
|
166,662
|
|
Costs and expenses
(1) (2)
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Cost of revenue
(3)
|
|
14,541
|
|
|
14,837
|
|
|
43,456
|
|
|
48,210
|
|
||||
Sales and marketing
|
|
21,603
|
|
|
22,067
|
|
|
66,695
|
|
|
67,831
|
|
||||
General and administrative
|
|
10,398
|
|
|
10,069
|
|
|
30,528
|
|
|
29,758
|
|
||||
Product development
|
|
9,726
|
|
|
9,495
|
|
|
29,011
|
|
|
29,428
|
|
||||
Restructuring costs
|
|
—
|
|
|
(384
|
)
|
|
2,315
|
|
|
(384
|
)
|
||||
Amortization of purchased intangibles
|
|
470
|
|
|
1,013
|
|
|
1,412
|
|
|
2,954
|
|
||||
Total costs and expenses
|
|
56,738
|
|
|
57,097
|
|
|
173,417
|
|
|
177,797
|
|
||||
Loss from operations
|
|
(245
|
)
|
|
(2,579
|
)
|
|
(11,931
|
)
|
|
(11,135
|
)
|
||||
Other income (expense), net
|
|
191
|
|
|
(123
|
)
|
|
412
|
|
|
(135
|
)
|
||||
Loss before provision for income taxes
|
|
(54
|
)
|
|
(2,702
|
)
|
|
(11,519
|
)
|
|
(11,270
|
)
|
||||
Provision for income taxes
|
|
1,256
|
|
|
3,177
|
|
|
3,000
|
|
|
5,038
|
|
||||
Net loss
|
|
$
|
(1,310
|
)
|
|
$
|
(5,879
|
)
|
|
$
|
(14,519
|
)
|
|
$
|
(16,308
|
)
|
|
|
|
|
|
|
|
|
|
||||||||
Net loss per share of common stock:
|
|
|
|
|
|
|
|
|
||||||||
Basic
|
|
$
|
(0.02
|
)
|
|
$
|
(0.10
|
)
|
|
$
|
(0.26
|
)
|
|
$
|
(0.29
|
)
|
Diluted
|
|
$
|
(0.02
|
)
|
|
$
|
(0.10
|
)
|
|
$
|
(0.26
|
)
|
|
$
|
(0.29
|
)
|
|
|
|
|
|
|
|
|
|
||||||||
Weighted-average shares used to compute net loss per share:
|
|
|
|
|
|
|
|
|||||||||
Basic
|
|
56,524,990
|
|
|
56,047,645
|
|
|
56,153,428
|
|
|
56,131,818
|
|
||||
Diluted
|
|
56,524,990
|
|
|
56,047,645
|
|
|
56,153,428
|
|
|
56,131,818
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
|
|
|
|
|
|
|
|
|
||||||||
(1)
Amounts include stock-based compensation expense, as follows:
|
|
|
|
|
|
|
|
|||||||||
Cost of revenue
|
|
$
|
108
|
|
|
$
|
121
|
|
|
$
|
301
|
|
|
$
|
342
|
|
Sales and marketing
|
|
576
|
|
|
502
|
|
|
1,984
|
|
|
1,936
|
|
||||
General and administrative
|
|
622
|
|
|
759
|
|
|
2,058
|
|
|
2,552
|
|
||||
Product development
|
|
537
|
|
|
873
|
|
|
1,760
|
|
|
2,770
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
(2)
Amounts include depreciation expense, as follows:
|
|
|
|
|
|
|
|
|||||||||
Cost of revenue
|
|
$
|
1,715
|
|
|
$
|
1,756
|
|
|
$
|
5,350
|
|
|
$
|
6,469
|
|
Sales and marketing
|
|
417
|
|
|
212
|
|
|
1,206
|
|
|
1,012
|
|
||||
General and administrative
|
|
321
|
|
|
435
|
|
|
911
|
|
|
1,215
|
|
||||
Product development
|
|
726
|
|
|
247
|
|
|
1,550
|
|
|
749
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
(3)
Amounts include amortization of purchased intangibles, as follows:
|
|
|
|
|
|
|
|
|||||||||
Cost of revenue
|
|
$
|
639
|
|
|
$
|
697
|
|
|
$
|
2,556
|
|
|
$
|
2,091
|
|
|
|
|
|
|
|
|
|
|
LIVEPERSON, INC.
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS
(IN THOUSANDS)
(UNAUDITED)
|
|||||||||||||||
|
Three Months Ended
|
|
Nine months ended
|
||||||||||||
|
September 30,
|
|
September 30,
|
||||||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Net loss
|
$
|
(1,310
|
)
|
|
$
|
(5,879
|
)
|
|
$
|
(14,519
|
)
|
|
$
|
(16,308
|
)
|
Foreign currency translation adjustment
|
317
|
|
|
1,848
|
|
|
(4,301
|
)
|
|
(650
|
)
|
||||
Comprehensive loss
|
$
|
(993
|
)
|
|
$
|
(4,031
|
)
|
|
$
|
(18,820
|
)
|
|
$
|
(16,958
|
)
|
LIVEPERSON, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(IN THOUSANDS)
(UNAUDITED)
|
|||||||
|
Nine Months Ended
|
||||||
|
September 30,
|
||||||
|
2017
|
|
2016
|
||||
OPERATING ACTIVITIES:
|
|
|
|
|
|
||
Net loss
|
$
|
(14,519
|
)
|
|
$
|
(16,308
|
)
|
Adjustments to reconcile net loss to net cash provided by operating activities:
|
|
|
|
|
|
||
Stock-based compensation expense
|
6,103
|
|
|
7,600
|
|
||
Depreciation
|
9,017
|
|
|
9,445
|
|
||
Amortization of purchased intangibles
|
3,968
|
|
|
5,045
|
|
||
Amortization of tenant allowance
|
(125
|
)
|
|
—
|
|
||
Deferred income taxes
|
823
|
|
|
163
|
|
||
Provision for doubtful accounts, net
|
1,363
|
|
|
1,240
|
|
||
Changes in operating assets and liabilities:
|
|
|
|
|
|
||
Accounts receivable
|
(1,719
|
)
|
|
(340
|
)
|
||
Prepaid expenses and other current assets
|
(2,248
|
)
|
|
(1,627
|
)
|
||
Other assets
|
75
|
|
|
(32
|
)
|
||
Accounts payable
|
(4,352
|
)
|
|
(1,404
|
)
|
||
Accrued expenses and other current liabilities
|
(2,954
|
)
|
|
(1,690
|
)
|
||
Deferred revenue
|
8,549
|
|
|
12,593
|
|
||
Other liabilities
|
(463
|
)
|
|
1,865
|
|
||
Net cash provided by operating activities
|
3,518
|
|
|
16,550
|
|
||
|
|
|
|
||||
INVESTING ACTIVITIES:
|
|
|
|
|
|
||
Purchases of property and equipment, including capitalized software
|
(12,176
|
)
|
|
(9,251
|
)
|
||
Cash held as collateral for foreign exchange forward contracts
|
2,511
|
|
|
1,443
|
|
||
Payments for acquisitions and intangible assets, net of cash acquired
|
(345
|
)
|
|
(411
|
)
|
||
Net cash used in investing activities
|
(10,010
|
)
|
|
(8,219
|
)
|
||
|
|
|
|
||||
FINANCING ACTIVITIES:
|
|
|
|
|
|
||
Proceeds from issuance of common stock in connection with the exercise of options
|
7,748
|
|
|
838
|
|
||
Repurchase of common stock
|
(1,741
|
)
|
|
(5,773
|
)
|
||
Net cash provided by (used in) financing activities
|
6,007
|
|
|
(4,935
|
)
|
||
EFFECT OF FOREIGN EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS
|
3,957
|
|
|
(794
|
)
|
||
CHANGE IN CASH AND CASH EQUIVALENTS
|
3,472
|
|
|
2,602
|
|
||
CASH AND CASH EQUIVALENTS - Beginning of the period
|
50,889
|
|
|
48,803
|
|
||
CASH AND CASH EQUIVALENTS - End of the period
|
$
|
54,361
|
|
|
$
|
51,405
|
|
|
|
|
|
||||
SUPPLEMENTAL DISCLOSURE OF OTHER CASH FLOW INFORMATION:
|
|
|
|
||||
Cash paid for income taxes
|
$
|
540
|
|
|
$
|
628
|
|
|
|
|
|
||||
SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING AND FINANCING ACTIVITIES:
|
|
|
|
||||
Purchase of property and equipment recorded in accounts payable
|
$
|
507
|
|
|
$
|
53
|
|
Leasehold improvements funded by landlord
|
$
|
—
|
|
|
$
|
107
|
|
1.
|
Description of Business and Basis of Presentation
|
2.
|
Revenue Recognition
|
3.
|
Net Loss Per Share
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||
|
September 30,
|
|
September 30,
|
||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||
Basic
|
56,524,990
|
|
|
56,047,645
|
|
|
56,153,428
|
|
|
56,131,818
|
|
Effect of assumed exercised options
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Diluted
|
56,524,990
|
|
|
56,047,645
|
|
|
56,153,428
|
|
|
56,131,818
|
|
4.
|
Segment Information
|
|
Business
|
|
Consumer
|
|
Corporate
|
|
Consolidated
|
||||||||
Revenue:
|
|
|
|
|
|
|
|
||||||||
Hosted services – Business
|
$
|
46,378
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
46,378
|
|
Hosted services – Consumer
|
—
|
|
|
4,355
|
|
|
—
|
|
|
4,355
|
|
||||
Professional services
|
5,760
|
|
|
—
|
|
|
—
|
|
|
5,760
|
|
||||
Total revenue
|
52,138
|
|
|
4,355
|
|
|
—
|
|
|
56,493
|
|
||||
Cost of revenue
|
13,681
|
|
|
860
|
|
|
—
|
|
|
14,541
|
|
||||
Sales and marketing
|
19,554
|
|
|
2,049
|
|
|
—
|
|
|
21,603
|
|
||||
Amortization of purchased intangibles
|
470
|
|
|
—
|
|
|
—
|
|
|
470
|
|
||||
Unallocated corporate expenses
|
—
|
|
|
—
|
|
|
20,124
|
|
|
20,124
|
|
||||
Operating income (loss)
|
$
|
18,433
|
|
|
$
|
1,446
|
|
|
$
|
(20,124
|
)
|
|
$
|
(245
|
)
|
|
Business
|
|
Consumer
|
|
Corporate
|
|
Consolidated
|
||||||||
Revenue:
|
|
|
|
|
|
|
|
||||||||
Hosted services – Business
|
$
|
44,553
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
44,553
|
|
Hosted services – Consumer
|
—
|
|
|
4,044
|
|
|
—
|
|
|
4,044
|
|
||||
Professional services
|
5,921
|
|
|
—
|
|
|
—
|
|
|
5,921
|
|
||||
Total revenue
|
50,474
|
|
|
4,044
|
|
|
—
|
|
|
54,518
|
|
||||
Cost of revenue
|
14,215
|
|
|
622
|
|
|
—
|
|
|
14,837
|
|
||||
Sales and marketing
|
20,278
|
|
|
1,789
|
|
|
—
|
|
|
22,067
|
|
||||
Amortization of purchased intangibles
|
1,013
|
|
|
—
|
|
|
—
|
|
|
1,013
|
|
||||
Unallocated corporate expenses
|
—
|
|
|
—
|
|
|
19,180
|
|
|
19,180
|
|
||||
Operating income (loss)
|
$
|
14,968
|
|
|
$
|
1,633
|
|
|
$
|
(19,180
|
)
|
|
$
|
(2,579
|
)
|
|
Business
|
|
Consumer
|
|
Corporate
|
|
Consolidated
|
||||||||
Revenue:
|
|
|
|
|
|
|
|
||||||||
Hosted services – Business
|
$
|
131,798
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
131,798
|
|
Hosted services – Consumer
|
—
|
|
|
12,985
|
|
|
—
|
|
|
12,985
|
|
||||
Professional services
|
16,703
|
|
|
—
|
|
|
—
|
|
|
16,703
|
|
||||
Total revenue
|
148,501
|
|
|
12,985
|
|
|
—
|
|
|
161,486
|
|
||||
Cost of revenue
|
40,794
|
|
|
2,662
|
|
|
—
|
|
|
43,456
|
|
||||
Sales and marketing
|
60,338
|
|
|
6,357
|
|
|
—
|
|
|
66,695
|
|
||||
Amortization of purchased intangibles
|
1,412
|
|
|
—
|
|
|
—
|
|
|
1,412
|
|
||||
Unallocated corporate expenses
|
—
|
|
|
—
|
|
|
61,854
|
|
|
61,854
|
|
||||
Operating income (loss)
|
$
|
45,957
|
|
|
$
|
3,966
|
|
|
$
|
(61,854
|
)
|
|
$
|
(11,931
|
)
|
|
Business
|
|
Consumer
|
|
Corporate
|
|
Consolidated
|
||||||||
Revenue:
|
|
|
|
|
|
|
|
||||||||
Hosted services – Business
|
$
|
137,240
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
137,240
|
|
Hosted services – Consumer
|
—
|
|
|
12,048
|
|
|
—
|
|
|
12,048
|
|
||||
Professional services
|
17,374
|
|
|
—
|
|
|
—
|
|
|
17,374
|
|
||||
Total revenue
|
154,614
|
|
|
12,048
|
|
|
—
|
|
|
166,662
|
|
||||
Cost of revenue
|
46,145
|
|
|
2,065
|
|
|
—
|
|
|
48,210
|
|
||||
Sales and marketing
|
62,606
|
|
|
5,225
|
|
|
—
|
|
|
67,831
|
|
||||
Amortization of purchased intangibles
|
2,954
|
|
|
—
|
|
|
—
|
|
|
2,954
|
|
||||
Unallocated corporate expenses
|
—
|
|
|
—
|
|
|
58,802
|
|
|
58,802
|
|
||||
Operating income (loss)
|
$
|
42,909
|
|
|
$
|
4,758
|
|
|
$
|
(58,802
|
)
|
|
$
|
(11,135
|
)
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
|
September 30,
|
|
September 30,
|
||||||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
United States
|
$
|
35,519
|
|
|
$
|
35,114
|
|
|
$
|
101,282
|
|
|
$
|
111,177
|
|
Other Americas
(1)
|
1,744
|
|
|
2,073
|
|
|
5,684
|
|
|
5,165
|
|
||||
Total Americas
|
37,263
|
|
|
37,187
|
|
|
106,966
|
|
|
116,342
|
|
||||
EMEA
(2) (4)
|
14,175
|
|
|
12,588
|
|
|
41,640
|
|
|
36,468
|
|
||||
APAC
(3)
|
5,055
|
|
|
4,743
|
|
|
12,880
|
|
|
13,852
|
|
||||
Total revenue
|
$
|
56,493
|
|
|
$
|
54,518
|
|
|
$
|
161,486
|
|
|
$
|
166,662
|
|
|
September 30,
|
|
December 31,
|
||||
|
2017
|
|
2016
|
||||
United States
|
$
|
94,476
|
|
|
$
|
93,845
|
|
Israel
|
12,728
|
|
|
13,940
|
|
||
Australia
|
9,184
|
|
|
9,496
|
|
||
Netherlands
|
8,051
|
|
|
7,495
|
|
||
Other
(1)
|
3,403
|
|
|
2,711
|
|
||
Total long-lived assets
|
$
|
127,842
|
|
|
$
|
127,487
|
|
5.
|
Goodwill and Intangible Assets
|
|
Business
|
|
Consumer
|
|
Consolidated
|
||||||
Balance as of December 31, 2016
|
$
|
72,221
|
|
|
$
|
8,024
|
|
|
$
|
80,245
|
|
Adjustments to goodwill:
|
|
|
|
|
|
||||||
Foreign exchange adjustment
|
254
|
|
|
—
|
|
|
254
|
|
|||
Balance as of September 30, 2017
|
$
|
72,475
|
|
|
$
|
8,024
|
|
|
$
|
80,499
|
|
|
As of September 30, 2017
|
||||||||||||
|
Gross
Carrying
Amount
|
|
Accumulated
Amortization
|
|
Net Carrying Amount
|
|
Weighted
Average
Amortization
Period
|
||||||
Amortizing intangible assets:
|
|
|
|
|
|
|
|
||||||
Technology
|
$
|
28,252
|
|
|
$
|
(22,290
|
)
|
|
$
|
5,962
|
|
|
5.3 years
|
Customer relationships
|
15,856
|
|
|
(9,966
|
)
|
|
5,890
|
|
|
8.0 years
|
|||
Trade names
|
1,299
|
|
|
(1,290
|
)
|
|
9
|
|
|
2.1 years
|
|||
Non-compete agreements
|
1,449
|
|
|
(1,427
|
)
|
|
22
|
|
|
2.3 years
|
|||
Patents
|
1,525
|
|
|
(461
|
)
|
|
1,064
|
|
|
13.0 years
|
|||
Other
|
262
|
|
|
(235
|
)
|
|
27
|
|
|
2.7 years
|
|||
Total
|
$
|
48,643
|
|
|
$
|
(35,669
|
)
|
|
$
|
12,974
|
|
|
|
|
As of December 31, 2016
|
||||||||||||
|
Gross
Carrying
Amount
|
|
Accumulated
Amortization
|
|
Net Carrying Amount
|
|
Weighted
Average
Amortization
Period
|
||||||
Amortizing intangible assets:
|
|
|
|
|
|
|
|
||||||
Technology
|
$
|
28,018
|
|
|
$
|
(19,736
|
)
|
|
$
|
8,282
|
|
|
5.3 years
|
Customer relationships
|
16,009
|
|
|
(8,857
|
)
|
|
7,152
|
|
|
8.0 years
|
|||
Trade names
|
1,295
|
|
|
(1,277
|
)
|
|
18
|
|
|
2.1 years
|
|||
Non-compete agreements
|
1,446
|
|
|
(1,220
|
)
|
|
226
|
|
|
2.3 years
|
|||
Patents
|
1,180
|
|
|
(376
|
)
|
|
804
|
|
|
12.4 years
|
|||
Other
|
263
|
|
|
(235
|
)
|
|
28
|
|
|
2.7 years
|
|||
Total
|
$
|
48,211
|
|
|
$
|
(31,701
|
)
|
|
$
|
16,510
|
|
|
|
|
Estimated Amortization Expense
|
||
2017
|
$
|
719
|
|
2018
|
2,594
|
|
|
2019
|
2,386
|
|
|
2020
|
2,190
|
|
|
2021
|
1,980
|
|
|
Thereafter
|
3,105
|
|
|
Total
|
$
|
12,974
|
|
6.
|
Property and Equipment
|
|
September 30,
2017 |
|
December 31,
2016 |
||||
Computer equipment and software
|
$
|
95,152
|
|
|
$
|
82,477
|
|
Furniture, equipment and building improvements
|
15,155
|
|
|
15,027
|
|
||
|
110,307
|
|
|
97,504
|
|
||
Less: accumulated depreciation
|
(78,124
|
)
|
|
(69,107
|
)
|
||
Total
|
$
|
32,183
|
|
|
$
|
28,397
|
|
7.
|
Accrued Expenses and Other Current Liabilities
|
|
September 30,
2017 |
|
December 31,
2016 |
||||
Payroll and other employee related costs
|
$
|
13,345
|
|
|
$
|
13,887
|
|
Professional services and consulting and other vendor fees
|
11,494
|
|
|
14,559
|
|
||
Unrecognized tax benefits
|
4,772
|
|
|
4,240
|
|
||
Sales commissions
|
1,876
|
|
|
3,312
|
|
||
Restructuring (see Note 11)
|
2,526
|
|
|
2,551
|
|
||
Contingent earnout (see Note 8)
|
—
|
|
|
210
|
|
||
Other
|
3,194
|
|
|
1,491
|
|
||
Total
|
$
|
37,207
|
|
|
$
|
40,250
|
|
8.
|
Fair Value Measurements
|
•
|
Level 1: Observable inputs that reflect quoted prices (unadjusted) for identical assets or liabilities in active markets.
|
•
|
Level 2: Inputs reflect: quoted prices for identical assets or liabilities in markets that are not active; quoted prices for similar assets or liabilities in active markets; inputs other than quoted prices that are observable for the assets or liabilities; or inputs that are derived principally from or corroborated by observable market data by correlation or other means.
|
•
|
Level 3: Unobservable inputs reflecting the Company’s assumptions incorporated in valuation techniques used to determine fair value. These assumptions are required to be consistent with market participant assumptions that are reasonably available.
|
|
September 30, 2017
|
|
December 31, 2016
|
||||||||||||||||||||||||||||
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||||||||||
Assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Cash equivalents:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Money market funds
|
$
|
2,798
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
2,798
|
|
|
$
|
3,076
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
3,076
|
|
Foreign currency derivative contracts
|
—
|
|
|
861
|
|
|
—
|
|
|
861
|
|
|
—
|
|
|
108
|
|
|
—
|
|
|
108
|
|
||||||||
Total assets
|
$
|
2,798
|
|
|
$
|
861
|
|
|
$
|
—
|
|
|
$
|
3,659
|
|
|
$
|
3,076
|
|
|
$
|
108
|
|
|
$
|
—
|
|
|
$
|
3,184
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Contingent earn-outs
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
210
|
|
|
$
|
210
|
|
Foreign currency derivative contracts
|
—
|
|
|
5
|
|
|
—
|
|
|
5
|
|
|
—
|
|
|
66
|
|
|
—
|
|
|
66
|
|
||||||||
Total liabilities
|
$
|
—
|
|
|
$
|
5
|
|
|
$
|
—
|
|
|
$
|
5
|
|
|
$
|
—
|
|
|
$
|
66
|
|
|
$
|
210
|
|
|
$
|
276
|
|
|
Contingent Earn-Out
|
||||||
|
September 30, 2017
|
|
December 31, 2016
|
||||
Balance, Beginning of Period
|
$
|
210
|
|
|
$
|
377
|
|
Cash payments
|
(210
|
)
|
|
(167
|
)
|
||
Balance, End of Period
|
$
|
—
|
|
|
$
|
210
|
|
|
As of September 30, 2017
|
|
As of December 31, 2016
|
||||
Notional amount of foreign currency derivative contracts
|
$
|
12,506
|
|
|
$
|
44,438
|
|
Fair value of foreign currency derivatives contracts
|
$
|
856
|
|
|
$
|
42
|
|
|
|
|
Fair Value of Derivative Instruments
|
||||||
|
Balance Sheet Location
|
|
As of September 30, 2017
|
|
As of December 31, 2016
|
||||
Derivative Assets
|
|
|
|
|
|
||||
Derivatives not designated as hedging instruments:
|
|
|
|
|
|
||||
Foreign currency derivatives contracts
|
Prepaid expenses and other current assets
|
|
$
|
861
|
|
|
$
|
108
|
|
Derivative Liabilities
|
|
|
|
|
|
||||
Derivatives not designated as hedging instruments:
|
|
|
|
|
|
||||
Foreign currency derivatives contracts
|
Accrued expenses and other liabilities
|
|
$
|
5
|
|
|
$
|
66
|
|
|
|
Gain (losses) on Derivative Instruments Recognized in Statements of Operations
|
||||||||||||||||
|
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
|
|
Location
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Foreign currency derivatives contracts
|
|
Other (income) expense
|
|
$
|
(19
|
)
|
|
$
|
44
|
|
|
$
|
194
|
|
|
$
|
132
|
|
9.
|
Commitments and Contingencies
|
10.
|
Stockholders
’
Equity
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||
|
September 30,
|
|
September 30,
|
||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
Dividend yield
|
0.0%
|
|
0.0%
|
|
0.0%
|
|
0.0%
|
Risk-free interest rate
|
1.8%
|
|
1.1%
|
|
1.7% - 1.9%
|
|
1.0% - 1.4%
|
Expected life (in years)
|
5
|
|
5
|
|
5
|
|
5
|
Historical volatility
|
47.3%
|
|
47.9%
|
|
46.6% - 47.6%
|
|
47.3% - 48.2%
|
|
Stock Option Activity
|
|
Weighted Average Remaining Contractual Term (in years)
|
|
Aggregate Intrinsic Value (in thousands)
|
|||||||
|
Options (in thousands)
|
|
Weighted
Average
Exercise Price
|
|
|
|||||||
Balance outstanding at December 31, 2016
|
7,769
|
|
|
$
|
10.88
|
|
|
|
|
|
||
Granted
|
1,553
|
|
|
8.47
|
|
|
|
|
|
|||
Exercised
|
(777
|
)
|
|
8.86
|
|
|
|
|
|
|||
Cancelled or expired
|
(841
|
)
|
|
12.14
|
|
|
|
|
|
|||
Balance outstanding at September 30, 2017
|
7,704
|
|
|
$
|
10.47
|
|
|
6.14
|
|
$
|
26,888
|
|
Options vested and expected to vest
|
7,045
|
|
|
$
|
10.66
|
|
|
5.85
|
|
$
|
23,517
|
|
Options exercisable at September 30, 2017
|
5,151
|
|
|
$
|
11.18
|
|
|
4.86
|
|
$
|
15,315
|
|
|
|
Options Outstanding
|
|
Options Exercisable
|
||||||||||||
Range of Exercise Prices
|
|
Number of Shares Outstanding (in thousands)
|
|
Weighted-Average Remaining Contractual Life (Years)
|
|
Weighted-Average Exercise Price
|
|
Number of Shares (in thousands)
|
|
Weighted-Average Exercise Price
|
||||||
$1.79 - $7.02
|
|
892
|
|
|
3.79
|
|
$
|
5.23
|
|
|
674
|
|
|
$
|
4.81
|
|
$7.04 - $7.45
|
|
356
|
|
|
7.81
|
|
7.26
|
|
|
227
|
|
|
7.22
|
|
||
$7.60 - $7.60
|
|
875
|
|
|
9.59
|
|
7.60
|
|
|
—
|
|
|
—
|
|
||
$7.95 - $9.24
|
|
775
|
|
|
6.28
|
|
8.97
|
|
|
601
|
|
|
9.16
|
|
||
$9.34 - $10.05
|
|
853
|
|
|
7.53
|
|
9.75
|
|
|
502
|
|
|
9.82
|
|
||
$10.13 - $10.31
|
|
781
|
|
|
6.12
|
|
10.14
|
|
|
585
|
|
|
10.13
|
|
||
$10.53 - $11.96
|
|
795
|
|
|
6.68
|
|
11.03
|
|
|
394
|
|
|
11.17
|
|
||
$12.09 - $13.28
|
|
1,041
|
|
|
4.20
|
|
13.05
|
|
|
997
|
|
|
13.04
|
|
||
$13.34 - $16.98
|
|
1,042
|
|
|
5.50
|
|
15.24
|
|
|
877
|
|
|
15.56
|
|
||
$17.88 - $18.24
|
|
294
|
|
|
4.33
|
|
18.06
|
|
|
294
|
|
|
18.06
|
|
||
|
|
|
|
|
|
|
|
|
|
|
||||||
|
|
7,704
|
|
|
6.14
|
|
$
|
10.47
|
|
|
5,151
|
|
|
$
|
11.18
|
|
|
Restricted Stock Unit Activity
|
|
|
|||||||
|
Number of Shares (in thousands)
|
|
Weighted Average
Grant Date Fair Value (Per Share)
|
|
Aggregate Fair Value (in thousands)
|
|||||
Balance outstanding at December 31, 2016
|
1,188
|
|
|
$
|
8.44
|
|
|
$
|
—
|
|
Awarded
|
317
|
|
|
7.87
|
|
|
—
|
|
||
Released
|
(312
|
)
|
|
8.40
|
|
|
—
|
|
||
Forfeited
|
(244
|
)
|
|
8.46
|
|
|
—
|
|
||
Non-vested and outstanding at September 30, 2017
|
949
|
|
|
$
|
8.24
|
|
|
$
|
12,865
|
|
Expected to vest
|
719
|
|
|
$
|
8.44
|
|
|
$
|
9,744
|
|
11.
|
Restructuring
|
|
September 30, 2017
|
|
December 31, 2016
|
||||
Balance, Beginning of the year
|
$
|
2,551
|
|
|
$
|
1,328
|
|
Severance and other associated costs
|
368
|
|
|
1,585
|
|
||
Cash payments
|
(2,340
|
)
|
|
(1,328
|
)
|
||
Wind down cost legacy platform
|
1,947
|
|
|
966
|
|
||
Balance, End of period
|
$
|
2,526
|
|
|
$
|
2,551
|
|
|
September 30, 2017
|
|
September 30, 2016
|
||||
Severance and other associated costs
|
$
|
(31
|
)
|
|
$
|
—
|
|
Wind down cost legacy platform
|
31
|
|
|
(384
|
)
|
||
Total restructuring costs
|
$
|
—
|
|
|
$
|
(384
|
)
|
|
September 30, 2017
|
|
September 30, 2016
|
||||
Severance and other associated costs
|
$
|
368
|
|
|
$
|
—
|
|
Wind down cost legacy platform
|
1,947
|
|
|
(384
|
)
|
||
Total restructuring costs
|
$
|
2,315
|
|
|
$
|
(384
|
)
|
12.
|
Legal Matters
|
•
|
Strengthening Our Position in both Existing and New Markets and Growing Our Recurring Revenue Base.
LivePerson plans to continue to develop its market position by increasing its customer base, and expanding within its installed base. We will continue to focus primarily on key target markets: automotive, financial services, retail, technology, telecommunications, and travel/hospitality within both our enterprise and midmarket sectors, as well as the small business (SMB) sector. Healthcare, insurance, real estate and energy utilities are new target industries and natural extensions of our primary target markets. We plan to leverage our new LiveEngage platform to replace a portion of calls traditionally made to 1-800 numbers with text and mobile messaging, and to increase adoption of real-time, compaign-based messaging across our customers' online properties. We intend to collaborate with our large installed customer base to optimize the value and effectiveness that brands derive from our services. We are also focused on strengthening our recurring revenue stream by signing larger, long-term, and more strategic deals.
|
•
|
Fuel Increased Usage by Expanding our Engagement Tools and Offering Platform Pricing.
In 2011, we began expanding on our market leading real-time chat messaging product by adding new technologies that augment digital consumer engagement, including targeted content delivery and transcript analytics. In 2014, we introduced LiveEngage, whereby we seamlessly integrated into a single platform an expanded suite of mobile and online business messaging technologies, including traditional desktop chat messaging, mobile chat messaging, content delivery, analytics, cobrowse, PCI, customer sentiment, and mobile messaging via in-app, SMS, browser-based search and Facebook Messenger. LiveEngage delivers rich, contextually aware targeting and personalized experiences across mobile and desktop devices. We also began offering a new platform pricing model, which provides brands access to our entire suite of messaging technologies across their entire
|
•
|
Leveraging Partners to Enhance our Offering.
In addition to developing our own applications, we continue to cultivate a partner eco-system capable of offering additional applications and services to our customers. For example, in 2015 we integrated LiveEngage with one of the leading consumer messaging platforms and in 2016 we integrated LiveEngage with one of the leading mobile search ad extensions, enabling consumers to initiate SMS messaging conversations with brands directly out of their mobile search results. In 2017, we launched LiveEngage for Bots, a platform extension that allows artificial intelligence/bots vendors to integrate their solutions to LiveEngage. We also launched a developer community that enables third parties to develop on top of our platform and products by accessing application programming interfaces.
|
•
|
Maintaining Market Leadership in Technology and Security Expertise.
As described above, we are devoting significant resources to creating new products and enabling technologies designed to accelerate innovation and delivery of new products and technologies to our customer base. We evaluate emerging technologies and industry standards and continually update our technology in order to retain our leadership position in each market we serve. We monitor legal and technological developments in the area of information security and confidentiality to ensure our policies and procedures meet or exceed the demands of the world’s largest and most demanding corporations. We believe that these efforts will allow us to effectively anticipate changing customer and consumer requirements in our rapidly evolving industry.
|
•
|
International Presence.
LivePerson is focused on expanding our international revenue contribution, which increased to 34% of total revenue in 2016, from 33% in 2015, despite approximately $3.5 million of adverse foreign currency exchange impact. LivePerson generated positive results from previous investments in direct sales and services personnel in the United Kingdom and Western Europe. We also continued to focus on expanding our presence in the Asia Pacific region, leveraging our relationships with partners such as NTT Solco, a subsidiary of telecom firm NTT Docomo and Information Services International-Dentsu, Ltd. (ISID).
|
•
|
Continuing to Build Brand Recognition.
As a pioneer of brand-to-consumer digital messaging, LivePerson enjoys strong brand recognition and credibility. Our focus on creating meaningful connections among employees, with our customers, and between brands and their consumers, is a key component of our culture and our market strategy. We strategically target decision makers and influencers within key vertical markets, leveraging customer successes to generate increased awareness and demand for brand-to-consumer messaging. In addition, we continue to develop relationships with the media, industry analysts and relevant business associations to enhance awareness of our leadership within the industry. Our brand name is also visible to both business users and consumers. When a consumer messages a customer care professional on a brand’s website, our brand name is usually displayed on the dialog messaging window. We believe that this high-visibility placement will continue to create brand awareness for our solutions.
|
•
|
Increasing the Value of Our Service to Our Customers.
We believe the introduction of LiveEngage marks the most important product launch in our history, as it empowers brands to deploy messaging at scale for customer care and sales, instead of demanding that consumers use email or call a 1-800 number. Furthermore, our platform strategy makes available the full suite of LivePerson’s capabilities through a single solution. In addition, the open architecture of LiveEngage will enable LivePerson to rapidly add new capabilities either directly or through partners. For example, we see opportunities for additional efficiencies in the contact center through the integration of artificial intelligence and bots. Because we directly manage the server infrastructure, we can make new features available to our customers immediately upon release, without customer or end-user installation of software or hardware. Our strategy is to continue to enhance the LiveEngage messaging platform and to leverage the substantial amount of mobile and online consumer data we collect, with the aim of increasing agent efficiency, decreasing customer care costs, improving the customer experience and increasing customer lifetime value.
|
•
|
Evaluating Strategic Alliances and Acquisitions When Appropriate.
We have successfully integrated several acquisitions over the past decade. While we have in the past, and may from time to time in the future, engage in discussions regarding acquisitions or strategic transactions or to acquire other companies that can accelerate our growth or broaden our product offerings, we currently have no binding commitments with respect to any future acquisitions or strategic transactions.
|
•
|
Total revenue increased
4%
to
$56.5 million
from
$54.5 million
.
|
•
|
Revenue from our Business segment increased
3%
to
$52.1 million
from
$50.5 million
.
|
•
|
Gross profit margin increased to
74%
from
73%
.
|
•
|
Cost and expenses decreased
1%
to
$56.7 million
from
$57.1 million
.
|
•
|
Net loss decreased to
$1.3 million
from net loss of
$5.9 million
.
|
•
|
Average annual revenue per enterprise and mid-market customer was greater than $215,000 over the trailing twelve months ended
September 30, 2017
, as compared to greater than $200,000 for the trailing twelve months ended
September 30, 2016
.
|
•
|
The dollar retention rate for full service customers on LiveEngage was greater than
100%
over the trailing twelve months ended
September 30, 2017
, in line with the trailing twelve months ended June 30, 2017. Dollar retention rate measures the percentage of revenue retained at quarter end, from full service customers that were on LiveEngage at the same period a year ago.
|
•
|
although depreciation and amortization are non-cash charges, the assets being depreciated and amortized may have to be replaced in the future, and adjusted EBITDA does not reflect cash capital expenditure requirements for such replacements or for new capital expenditure requirements;
|
•
|
adjusted EBITDA does not reflect changes in, or cash requirements for, our working capital needs;
|
•
|
adjusted EBITDA does not consider the potentially dilutive impact of equity-based compensation;
|
•
|
adjusted EBITDA does not consider the potentially dilutive impact of restructuring cost;
|
•
|
adjusted EBITDA does not consider the potentially dilutive impact of other non-recurring costs;
|
•
|
adjusted EBITDA does not reflect tax payments that may represent a reduction in cash available to us; and
|
•
|
other companies, including companies in our industry, may calculate adjusted EBITDA differently, which reduces its usefulness as a comparative measure.
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
|
||||||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
|
||||||||
Reconciliation of Adjusted EBITDA
|
|
|
|
|
|
|
|
|
||||||||
GAAP net loss
|
$
|
(1,310
|
)
|
|
$
|
(5,879
|
)
|
|
$
|
(14,519
|
)
|
|
$
|
(16,308
|
)
|
|
Amortization of purchased intangibles
|
1,109
|
|
|
1,710
|
|
|
3,968
|
|
|
5,045
|
|
|
||||
Stock-based compensation
|
1,843
|
|
|
2,255
|
|
|
6,103
|
|
|
7,600
|
|
|
||||
Depreciation
|
3,179
|
|
|
2,650
|
|
|
9,017
|
|
|
9,445
|
|
|
||||
Other non-recurring costs
|
1,640
|
|
(1)
|
930
|
|
(2)
|
4,998
|
|
(1)
|
3,368
|
|
(5)
|
||||
Restructuring costs
|
—
|
|
|
(384
|
)
|
(3)
|
2,315
|
|
(4)
|
(384
|
)
|
(3)
|
||||
Provision for income taxes
|
1,256
|
|
|
3,177
|
|
|
3,000
|
|
|
5,038
|
|
|
||||
Other income, net
|
(191
|
)
|
|
123
|
|
|
(412
|
)
|
|
135
|
|
|
||||
Adjusted EBITDA
|
$
|
7,526
|
|
|
$
|
4,582
|
|
|
$
|
14,470
|
|
|
$
|
13,939
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
(1)
Includes litigation costs of $1.6 million and $5.0 million for the three and nine months ended September 30, 2017, respectively.
|
||||||||||||||||
(2)
Includes litigation costs of $0.9 million for the three months ended September 30, 2016.
|
||||||||||||||||
(3)
Includes $0.4 million of cash collected on previously written off bad debt.
|
||||||||||||||||
(4)
Includes wind down costs of legacy platform of $1.9 million and severance costs of $0.4 million for the nine months ended September 30, 2017.
|
||||||||||||||||
(5)
Includes litigation costs of $2.9 million and severance costs of $0.5 million for the nine months ended September 30, 2016.
|
•
|
although amortization is a non-cash charge, the assets being amortized may have to be replaced in the future, and adjusted net income does not reflect cash capital expenditure requirements for such replacements or for new capital expenditure requirements;
|
•
|
adjusted net income does not consider the potentially dilutive impact of equity-based compensation;
|
•
|
adjusted net income does not consider the potentially dilutive impact of restructuring cost;
|
•
|
adjusted net income does not consider the potentially dilutive impact of other non-recurring costs;
|
•
|
adjusted net income does not consider the potentially dilutive impact of deferred tax asset valuation allowance; and
|
•
|
other companies, including companies in our industry, may calculate adjusted net income differently, which reduces its usefulness as a comparative measure.
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
|
||||||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
|
||||||||
Reconciliation of Adjusted Net Income
(6)
|
|
|
|
|
|
|
|
|
||||||||
Pre-tax GAAP loss
(6)
|
$
|
(54
|
)
|
|
$
|
(2,702
|
)
|
|
$
|
(11,519
|
)
|
|
$
|
(11,270
|
)
|
|
Amortization of purchased intangibles
|
1,109
|
|
|
1,710
|
|
|
3,968
|
|
|
5,045
|
|
|
||||
Stock-based compensation
|
1,843
|
|
|
2,255
|
|
|
6,103
|
|
|
7,600
|
|
|
||||
Other non-recurring costs
|
1,640
|
|
(1)
|
930
|
|
(2)
|
4,998
|
|
(1)
|
3,718
|
|
(5)
|
||||
Deferred tax asset valuation allowance
|
—
|
|
|
—
|
|
|
—
|
|
|
692
|
|
|
||||
Restructuring costs
|
—
|
|
|
(384
|
)
|
(3)
|
2,315
|
|
(4)
|
(384
|
)
|
(3)
|
||||
Pre-tax adjusted net income
|
4,538
|
|
|
1,809
|
|
|
5,865
|
|
|
5,401
|
|
|
||||
Income tax effect of non-GAAP items
(6)
|
(1,588
|
)
|
|
(633
|
)
|
|
(2,053
|
)
|
|
(1,890
|
)
|
|
||||
Adjusted net income
|
$
|
2,950
|
|
|
$
|
1,176
|
|
|
$
|
3,812
|
|
|
$
|
3,511
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
(1)
Includes litigation costs of $1.6 million and $5.0 million for the three and nine months ended September 30, 2017, respectively.
|
|
|||||||||||||||
(2)
Includes litigation costs of $0.9 million for the three months ended September 30, 2016.
|
|
|||||||||||||||
(3)
Includes $0.4 million of cash collected on previously written off bad debt.
|
|
|||||||||||||||
(4)
Includes wind down costs of legacy platform of $1.9 million and severance costs of $0.4 million for the nine months ended September 30, 2017.
|
|
|||||||||||||||
(5)
Includes litigation costs of $2.9 million, write off of office facility depreciation of $0.3 million and severance costs of $0.5 million for the nine months ended September 30, 2016.
|
|
|||||||||||||||
(6)
During 2017, the Company updated the methodology for calculating adjusted net income. In 2016, the Company incorporated the GAAP tax rate into the calculation, whereas in 2017, the Company now starts the calculation with GAAP pre-tax (loss) income, then adds back amortization, stock-based compensation, other non-recurring, restructuring, and then applies a standardized 35% long-term projected tax rate. The prior period, September 30, 2016, was adjusted to conform to the current period presentation.
|
|
•
|
compensation costs relating to employees who provide customer support and implementation services to our customers;
|
•
|
outside labor provider costs;
|
•
|
compensation costs relating to our network support staff;
|
•
|
depreciation of certain hardware and software;
|
•
|
allocated occupancy costs and related overhead;
|
•
|
the cost of supporting our infrastructure, including expenses related to server leases, infrastructure support costs and Internet connectivity;
|
•
|
the credit card fees and related payment processing costs associated with consumer and self-service customers; and
|
•
|
amortization of certain intangibles.
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
|
(in thousands)
|
|
(in thousands)
|
||||||||||||
Stock-based compensation expense
|
$
|
1,843
|
|
|
$
|
2,255
|
|
|
$
|
6,103
|
|
|
$
|
7,600
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||||||||
|
2017
|
|
2016
|
|
% Change
|
|
2017
|
|
2016
|
|
% Change
|
||||||||||
|
(in thousands)
|
|
|
|
(in thousands)
|
|
|
||||||||||||||
Revenue by Segment:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Business
|
$
|
52,138
|
|
|
$
|
50,474
|
|
|
3
|
%
|
|
$
|
148,501
|
|
|
$
|
154,614
|
|
|
(4
|
)%
|
Consumer
|
4,355
|
|
|
4,044
|
|
|
8
|
%
|
|
12,985
|
|
|
12,048
|
|
|
8
|
%
|
||||
Total
|
$
|
56,493
|
|
|
$
|
54,518
|
|
|
4
|
%
|
|
$
|
161,486
|
|
|
$
|
166,662
|
|
|
(3
|
)%
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||||||||
|
2017
|
|
2016
|
|
% Change
|
|
2017
|
|
2016
|
|
% Change
|
||||||||||
|
($ in thousands)
|
|
|
|
($ in thousands)
|
|
|
||||||||||||||
Cost of revenue - business
|
$
|
13,681
|
|
|
$
|
14,215
|
|
|
(4
|
)%
|
|
$
|
40,794
|
|
|
$
|
46,145
|
|
|
(12
|
)%
|
Percentage of total revenue
|
24
|
%
|
|
26
|
%
|
|
|
|
25
|
%
|
|
28
|
%
|
|
|
||||||
Headcount (at period end):
|
228
|
|
|
251
|
|
|
(9
|
)%
|
|
228
|
|
|
251
|
|
|
(9
|
)%
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||||||||
|
2017
|
|
2016
|
|
% Change
|
|
2017
|
|
2016
|
|
% Change
|
||||||||||
|
($ in thousands)
|
|
|
|
($ in thousands)
|
|
|
||||||||||||||
Cost of revenue - consumer
|
$
|
860
|
|
|
$
|
622
|
|
|
38
|
%
|
|
$
|
2,662
|
|
|
$
|
2,065
|
|
|
29
|
%
|
Percentage of total revenue
|
2
|
%
|
|
1
|
%
|
|
|
|
2
|
%
|
|
1
|
%
|
|
|
||||||
Headcount (at period end)
|
18
|
|
|
18
|
|
|
—
|
%
|
|
18
|
|
|
18
|
|
|
—
|
%
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||||||||
|
2017
|
|
2016
|
|
% Change
|
|
2017
|
|
2016
|
|
% Change
|
||||||||||
|
($ in thousands)
|
|
|
|
($ in thousands)
|
|
|
||||||||||||||
Sales and marketing - business
|
$
|
19,554
|
|
|
$
|
20,278
|
|
|
(4
|
)%
|
|
$
|
60,338
|
|
|
$
|
62,606
|
|
|
(4
|
)%
|
Percentage of total revenue
|
35
|
%
|
|
37
|
%
|
|
|
|
37
|
%
|
|
38
|
%
|
|
|
||||||
Headcount (at period end):
|
288
|
|
|
317
|
|
|
(9
|
)%
|
|
288
|
|
|
317
|
|
|
(9
|
)%
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||||||||
|
2017
|
|
2016
|
|
% Change
|
|
2017
|
|
2016
|
|
% Change
|
||||||||||
|
($ in thousands)
|
|
|
|
($ in thousands)
|
|
|
||||||||||||||
Sales and marketing - consumer
|
$
|
2,049
|
|
|
$
|
1,789
|
|
|
15
|
%
|
|
$
|
6,357
|
|
|
$
|
5,225
|
|
|
22
|
%
|
Percentage of total revenue
|
4
|
%
|
|
3
|
%
|
|
|
|
4
|
%
|
|
3
|
%
|
|
|
||||||
Headcount (at period end):
|
13
|
|
|
10
|
|
|
30
|
%
|
|
13
|
|
|
10
|
|
|
30
|
%
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||||||||
|
2017
|
|
2016
|
|
% Change
|
|
2017
|
|
2016
|
|
% Change
|
||||||||||
|
($ in thousands)
|
|
|
|
($ in thousands)
|
|
|
||||||||||||||
General and administrative
|
$
|
10,398
|
|
|
$
|
10,069
|
|
|
3
|
%
|
|
$
|
30,528
|
|
|
$
|
29,758
|
|
|
3
|
%
|
Percentage of total revenue
|
18
|
%
|
|
18
|
%
|
|
|
|
19
|
%
|
|
18
|
%
|
|
|
||||||
Headcount (at period end):
|
101
|
|
|
113
|
|
|
(11
|
)%
|
|
101
|
|
|
113
|
|
|
(11
|
)%
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||||||||
|
2017
|
|
2016
|
|
% Change
|
|
2017
|
|
2016
|
|
% Change
|
||||||||||
|
($ in thousands)
|
|
|
|
($ in thousands)
|
|
|
||||||||||||||
Product development
|
$
|
9,726
|
|
|
$
|
9,495
|
|
|
2
|
%
|
|
$
|
29,011
|
|
|
$
|
29,428
|
|
|
(1
|
)%
|
Percentage of total revenue
|
17
|
%
|
|
17
|
%
|
|
|
|
18
|
%
|
|
18
|
%
|
|
|
||||||
Headcount (at period end):
|
306
|
|
|
312
|
|
|
(2
|
)%
|
|
306
|
|
|
312
|
|
|
(2
|
)%
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||||||||
|
2017
|
|
2016
|
|
% Change
|
|
2017
|
|
2016
|
|
% Change
|
||||||||||
|
($ in thousands)
|
|
|
|
($ in thousands)
|
|
|
||||||||||||||
Restructuring costs
|
$
|
—
|
|
|
$
|
(384
|
)
|
|
(100
|
)%
|
|
$
|
2,315
|
|
|
$
|
(384
|
)
|
|
(703
|
)%
|
Percentage of total revenue
|
—
|
%
|
|
(1
|
)%
|
|
|
|
1
|
%
|
|
—
|
%
|
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||||||||
|
2017
|
|
2016
|
|
% Change
|
|
2017
|
|
2016
|
|
% Change
|
||||||||||
|
($ in thousands)
|
|
|
|
($ in thousands)
|
|
|
||||||||||||||
Amortization of purchased intangibles
|
$
|
470
|
|
|
$
|
1,013
|
|
|
(54
|
)%
|
|
$
|
1,412
|
|
|
$
|
2,954
|
|
|
(52
|
)%
|
Percentage of total revenues
|
1
|
%
|
|
2
|
%
|
|
|
|
1
|
%
|
|
2
|
%
|
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||||||||
|
2017
|
|
2016
|
|
% Change
|
|
2017
|
|
2016
|
|
% Change
|
||||||||||
|
($ in thousands)
|
|
|
|
($ in thousands)
|
|
|
||||||||||||||
Other income (expense), net
|
$
|
191
|
|
|
$
|
(123
|
)
|
|
(255
|
)%
|
|
$
|
412
|
|
|
$
|
(135
|
)
|
|
(405
|
)%
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||||||||
|
2017
|
|
2016
|
|
% Change
|
|
2017
|
|
2016
|
|
% Change
|
||||||||||
|
($ in thousands)
|
|
|
|
($ in thousands)
|
|
|
||||||||||||||
Provision for income taxes
|
$
|
1,256
|
|
|
$
|
3,177
|
|
|
(60
|
)%
|
|
$
|
3,000
|
|
|
$
|
5,038
|
|
|
(40
|
)%
|
|
Nine Months Ended
|
||||||
|
September 30,
|
||||||
|
2017
|
|
2016
|
||||
|
(in thousands)
|
||||||
Consolidated Statements of Cash Flows Data:
|
|
|
|
||||
Cash flows provided by operating activities
|
$
|
3,518
|
|
|
$
|
16,550
|
|
Cash flows used in investing activities
|
(10,010
|
)
|
|
(8,219
|
)
|
||
Cash flows provided by (used) in financing activities
|
6,007
|
|
|
(4,935
|
)
|
|
Payments due by period
|
||||||||||||||||||
|
(in thousands)
|
||||||||||||||||||
Contractual Obligations
|
Total
|
|
Less than 1
year
|
|
1-3 years
|
|
3-5 years
|
|
More than 5
years
|
||||||||||
Operating leases
|
$
|
25,434
|
|
|
$
|
8,845
|
|
|
$
|
11,492
|
|
|
$
|
4,392
|
|
|
$
|
705
|
|
Period
|
|
Total Number of
Shares Purchased
(1) (2)
|
|
Average Price Paid per
Share
(1) (2)
|
|
Total Number of
Shares Purchased
as Part of Publicly
Announced Plans or
Programs
(1) (2)
|
|
Approximate Dollar
Value of Shares that
May Yet Be
Purchased Under
the Plans or
Programs
(1) (2) (3)
|
||||||
|
|
|
|
|
|
|
|
$
|
18,460,776
|
|
||||
7/1/2017 – 7/31/2017
|
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
18,460,776
|
|
|
8/1/2017 – 8/31/2017
|
|
—
|
|
|
—
|
|
|
—
|
|
|
18,460,776
|
|
||
9/1/2017 – 9/30/2017
|
|
—
|
|
|
—
|
|
|
—
|
|
|
18,460,776
|
|
||
Total
|
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
$
|
18,460,776
|
|
(1)
|
On December 10, 2012, we announced that our Board of Directors approved a share repurchase program through June 30, 2014. Under the stock repurchase program, we were authorized to repurchase shares of the our common stock, in the open market or privately negotiated transactions, at times and prices considered appropriate by the Board of Directors depending upon prevailing market conditions and other corporate considerations.
|
(2)
|
As of June 30, 2014, approximately $1.1 million remained available for purchases under the program as in effect at that time. On July 23, 2014, our Board of Directors extended the expiration date of the program out to December 31, 2014 and also increased the aggregate purchase price of the stock repurchase program from
$40.0 million
to
$50.0 million
. On March 5, 2015, our Board of Directors extended the expiration date of the program out to December 31, 2016. On February 16, 2016, our Board of Directors increased the aggregate purchase price of the total stock repurchase program by an additional
$14.0 million
. On November 21, 2016, our Board of Directors increased the aggregate purchase price of the stock repurchase program from $64.0 million to $74.0 million and extended the expiration date of the program out to December 31, 2017. As of
September 30, 2017
, approximately
$18.5 million
remained available for purchases under the program.
|
(3)
|
Transaction fees related to the share purchases are deducted from the total remaining allowable expenditure amount.
|
10.5 (b)
|
|
Separation Agreement and General Release between LivePerson and Dan Murphy, dated as of November 9, 2017
|
|
|
|
31.1
|
|
Certification by Chief Executive Officer pursuant to Exchange Act Rule 13a-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
|
|
|
|
31.2
|
|
Certification by Chief Financial Officer pursuant to Exchange Act Rule 13a-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
|
|
|
|
32.1**
|
|
Certification by Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
|
|
|
|
32.2**
|
|
Certification by Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
|
|
|
|
101.INS†
|
|
XBRL Instance Document
|
|
|
|
101.SCH†
|
|
XBRL Taxonomy Extension Schema Document
|
|
|
|
101.CAL†
|
|
XBRL Taxonomy Extension Calculation Linkbase Document
|
|
|
|
101.DEF†
|
|
XBRL Taxonomy Extension Definition Linkbase Document
|
|
|
|
101.LAB†
|
|
XBRL Taxonomy Extension Label Linkbase Document
|
|
|
|
101.PRE†
|
|
XBRL Taxonomy Extension Presentation Linkbase Document
|
|
|
LIVEPERSON, INC.
|
|
|
|
(Registrant)
|
|
|
|
|
|
Date:
|
November 9, 2017
|
By:
|
/s/ ROBERT P. LOCASCIO
|
|
|
Name:
|
Robert P. LoCascio
|
|
|
Title:
|
Chief Executive Officer (principal executive officer)
|
|
|
|
|
Date:
|
November 9, 2017
|
By:
|
/s/ DANIEL R. MURPHY
|
|
|
Name:
|
Daniel R. Murphy
|
|
|
Title:
|
Chief Financial Officer (principal financial and accounting officer)
|
Number
|
|
Description
|
|
|
|
10.5 (b)
|
|
|
|
|
|
31.1
|
|
|
|
|
|
31.2
|
|
|
|
|
|
32.1**
|
|
|
|
|
|
32.2**
|
|
|
|
|
|
101.INS†
|
|
XBRL Instance Document
|
|
|
|
101.SCH†
|
|
XBRL Taxonomy Extension Schema Document
|
|
|
|
101.CAL†
|
|
XBRL Taxonomy Extension Calculation Linkbase Document
|
|
|
|
101.DEF†
|
|
XBRL Taxonomy Extension Definition Linkbase Document
|
|
|
|
101.LAB†
|
|
XBRL Taxonomy Extension Label Linkbase Document
|
|
|
|
101.PRE†
|
|
XBRL Taxonomy Extension Presentation Linkbase Document
|
No information found
* THE VALUE IS THE MARKET VALUE AS OF THE LAST DAY OF THE QUARTER FOR WHICH THE 13F WAS FILED.
FUND | NUMBER OF SHARES | VALUE ($) | PUT OR CALL |
---|
DIRECTORS | AGE | BIO | OTHER DIRECTOR MEMBERSHIPS |
---|
No information found
Customers
Customer name | Ticker |
---|---|
Anthem, Inc. | ANTM |
No Suppliers Found
Price
Yield
Owner | Position | Direct Shares | Indirect Shares |
---|