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Liveperson (LPSN)
NASDAQ:LPSN
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Liveperson
(NASDAQ:LPSN)
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Rating:44Neutral
Price Target:
$2.50
▼(-6.02% Downside)
Action:ReiteratedDate:03/17/26
The score is primarily held down by weak financial performance (shrinking revenue, ongoing losses/cash burn, and balance-sheet strain with negative equity and high debt). Technicals also remain bearish with the stock below major moving averages and negative MACD. The earnings call adds some offset from improved adjusted EBITDA and new product/partner catalysts, but guidance still points to near-term revenue pressure and continued cash-flow constraints.
Positive Factors
High recurring revenue mix
A ~90% recurring revenue base creates durable, predictable top-line cash flow that supports long-term planning. For a SaaS company, high recurring mix reduces revenue volatility, improves visibility for investment and sales motions, and helps convert platform upgrades (AI, Syntrix) into steady subscription streams.
Strong gross margins
Gross margins near 72% indicate scalable software economics and allow more operating leverage as revenue stabilizes. High gross margin supports reinvestment into R&D and customer success while enabling potential path to profitability if operating expenses are managed and recurring revenue growth resumes.
Strategic partnerships and marketplace traction
Strong partnership with Google Cloud and marketplace distribution reduces sales friction and broadens procurement channels for enterprise customers. Marketplace and standardization on Google tech create a structural go-to-market lever that can scale sales, accelerate procurement cycles, and embed LivePerson inside large cloud ecosystems.
Negative Factors
Balance-sheet strain and leverage
Negative equity and sizable debt materially constrain financial flexibility and raise refinancing risk. Until LivePerson generates sustained positive free cash flow and retained earnings, elevated leverage limits the company's ability to invest, makes it more sensitive to interest and covenant pressure, and reduces strategic optionality.
Multi-year revenue decline and weak retention
Persistent top-line contraction undermines operating leverage and the economics of subscription models; coupled with sub‑80% net revenue retention (78% reported), this indicates customers churn or downsize and weakens ARR growth prospects. Restoring durable revenue growth is necessary for scalable margins and reduced reliance on cost cuts.
Negative operating and free cash flow
Ongoing cash burn increases dependence on external financing and limits runway for R&D and sales investments. Even with improved burn versus prior years, negative free cash flow and guidance for slightly negative FCF in 2026 mean the company must either materially improve organic cash generation or secure funding, which raises dilution or refinancing risks.
Liveperson (LPSN) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$32.06M
Dividend YieldN/A
Average Volume (3M)407.39K
Price to Earnings (P/E)―
Beta (1Y)1.93
Revenue Growth-23.03%
EPS Growth-107.34%
CountryUS
Employees928
SectorTechnology
Sector Strength88
IndustrySoftware - Application
Share Statistics
EPS (TTM)-0.47
Shares Outstanding12,053,603
10 Day Avg. Volume553,535
30 Day Avg. Volume407,389
Financial Highlights & Ratios
PEG Ratio<0.01
Price to Book (P/B)-0.68
Price to Sales (P/S)0.12
P/FCF Ratio-0.71
Enterprise Value/Market Cap10.24
Enterprise Value/Revenue1.35
Enterprise Value/Gross Profit2.17
Enterprise Value/Ebitda11.33
Forecast
1Y Price Target
$3.00Price Target Upside12.78% Upside
Rating ConsensusHold
Number of Analyst Covering2
EPS Forecast (FY)-5.33
Revenue Forecast (FY)$200.20M
Liveperson Business Overview & Revenue Model
Company DescriptionLivePerson, Inc., together with its subsidiaries, provides conversational commerce software and Gainshare solutions. It operates in two segments, Business and Consumer. The Business segment enables brands to leverage LiveEngage's intelligence engine to connect with consumers through an integrated suite of mobile and online business messaging technologies. The Consumer segment facilitates online transactions between experts and users seeking information and knowledge through mobile and online messaging. The company offers the Conversational Cloud, an enterprise-class and cloud-based platform, which enables businesses and consumers to connect through conversational interfaces, such as in-app and mobile messaging. It also provides professional services and value-added business consulting services. The company sells its products through direct and indirect sales channels to Fortune 500 companies, Internet businesses, online merchants, small businesses, automotive dealers, universities, libraries, government agencies, and not-for-profit organizations. It operates in the United States, Canada, Latin America, South America, Europe, and the Asia-Pacific region. The company has strategic partnerships with TTEC that focuses on customer experience; and DMI to redefine customer experience with digital engagement, messaging, and artificial intelligence driven automation. LivePerson, Inc. was incorporated in 1995 and is headquartered in New York, New York.
How the Company Makes MoneyLivePerson primarily makes money by selling access to its conversational AI and messaging software platform to business customers on a subscription basis (software-as-a-service). Revenue is generated through recurring fees for platform usage and associated capabilities (e.g., automation/conversational AI features, agent tools, and analytics), typically priced via contracted commitments and/or usage-based components tied to the volume of interactions, seats, or other consumption metrics (specific metric details vary by contract and are not always publicly disclosed). The company also earns revenue from professional services and implementation-related work that helps customers deploy, integrate, and optimize the platform (for example, onboarding, configuration, and integration support), which is generally lower-margin and more variable than subscriptions. In addition, LivePerson’s platform can connect to third-party communication channels and enterprise systems; while these integrations can support customer adoption and retention, the extent to which LivePerson earns direct partner-related revenue or channel referral fees is not consistently disclosed publicly and is therefore null.
Liveperson Earnings Call Summary
Earnings Call Date:Mar 12, 2026
(Q4-2025)
| % Change Since: |
Next Earnings Date:May 13, 2026
Earnings Call Sentiment Neutral
The call reflects cautious optimism: clear execution wins (Q4 beat, positive adjusted EBITDA, product launch of Syntrix, accelerating AI adoption, meaningful enterprise renewals, and stronger partnerships especially with Google) balanced against material near-term revenue headwinds (hosted and professional services declines, sub-80% net revenue retention trend, RPO declines) and guidance that implies year-over-year revenue pressure in 2026. Management framed 2026 as a transition year with investments to achieve positive net new ARR in H2; upside depends on scaling Syntrix and marketplace motions.Q4-2025 Updates
Positive Updates
Beat Guidance on Top and Bottom Lines
Q4 revenue of $59.3M came in above the high end of guidance (driven by higher variable revenue). Adjusted EBITDA was $10.8M, also above the high end of guidance, reflecting benefits from the prior restructuring and disciplined cost execution.
Product Launch — Syntrix Generally Available
Launched Syntrix (simulation and assurance platform) with Conversation Simulator as GA; moved from early access to paying enterprise customers across banking, telecommunications and technology. Syntrix uses conversation-based (consumption) pricing and management stated early opportunities are 'millions, not hundreds of thousands.'
Growing Generative AI Adoption and Platform Modernization
Over 20% of Q4 conversations leveraged LivePerson's generative AI suite. Multiyear platform modernization remains on track for completion in H1 2026 to support higher generative AI traffic and improved resiliency.
Strong Strategic Partnerships and Marketplace Traction
Deepening Google Cloud partnership (standardized on Google Gemini, launched RCS channel) and a multimillion-dollar renewal via Google Cloud Marketplace; expecting a material amount of revenue to flow through marketplace by end of 2026. Partnerships with IT Solutions and Coral Active (LivePerson Sync) expanding market reach and simplifying procurement.
Commercial Traction and Enterprise Renewals
Signed 40 deals in Q4 (4 new logos, 36 expansions). Notable renewals included 7 major financial services institutions, 2 airlines, 3 telecom/ISPs and a major health care provider. Over 40% of renewals included expansion commitments. Average revenue per customer increased to $680K, up 9% year-over-year.
Improved Balance Sheet and Cost Structure
Ended Q4 with $95M cash and reported improved cost structure from prior quarter restructuring that materially improved adjusted EBITDA. Management emphasized disciplined spending and targeted reinvestments to drive future growth.
High Recurring Revenue Mix
Recurring revenue was $52.9M, representing 89% of total revenue (company expects ~92% recurring for full-year 2026), highlighting a durable subscription-like revenue base.
Negative Updates
Guidance Implies Year‑over‑Year Revenue Decline
Full-year 2026 revenue guidance of $195M to $207M implies a year-over-year decline (company explicitly said guidance implies Y/Y revenue decline). Q1 2026 revenue guide $53M–$55M implies a sequential decline of about $5M at the midpoint vs Q4.
Hosted and Professional Services Declines
Revenue from hosted services was $51M, down 15% year-over-year. Professional services revenue was $8.3M, down 36% year-over-year — both substantial declines that weighed on overall revenue.
Net Revenue Retention and RPO Weakness
Net revenue retention was 78% in Q4, down from 80% in Q3. Remaining performance obligations (RPO) declined to $176M, reflecting the same pressures driving revenue declines.
Near‑term Profit/Cash Flow Constraints
For full-year 2026, adjusted EBITDA guidance ranges from a loss of $4M to a gain of $7M; company does not expect adjusted EBITDA less CapEx to be positive in 2026 and expects slightly negative free cash flow as it balances investments and near-term capital optimization.
Historical Negative Net ARR Impacting 2026
Company noted recent large negative net ARR that will continue to offset positive net new ARR expected in H2 2026, causing revenue to decline through much of 2026 despite anticipated improvement later in the year.
Syntrix and Marketplace Upside Early‑Stage
While Syntrix and Google Marketplace are promising upside avenues, both are early in commercialization; management acknowledged it will take time to scale these channels and convert pipeline to material revenue.
Company Guidance
LivePerson guided full-year 2026 revenue of $195M–$207M (≈92% recurring) with adjusted EBITDA of a loss of $4M to a gain of $7M (and does not expect adjusted EBITDA less CapEx to be positive in 2026); the company expects positive net new ARR in H2 but said prior negative net ARR will cause revenue to decline through the year with the rate of decline flattening in H2. For Q1 2026 it guided revenue of $53M–$55M (roughly a $5M midpoint sequential decline vs Q4’s $59.3M) and adjusted EBITDA of $2M–$5M, expects slightly negative free cash flow, finished Q4 with $95M cash, and noted that Syntrix commercialization and Google Cloud Marketplace represent upside to the guidance.Liveperson Financial Statement Overview
Summary
Multi-year revenue contraction, continued operating/net losses, and negative operating/free cash flow weigh heavily. Balance-sheet risk is elevated with negative equity and sizable debt despite some improvement in cash burn versus prior years.Income Statement
Revenue has been shrinking for several years (2023: -21.9%, 2024: -0.2%, 2025: -5.4%), which keeps pressure on operating leverage. Gross margin is relatively strong and improved in 2025 (about 71.5%), but profitability remains weak with continued operating losses and a sizable net loss (2025 net margin about -27.6%). Net losses narrowed versus 2024, yet the business is still not demonstrating consistent progress toward sustained profitability.24
Negative
Balance Sheet
Leverage is a key concern: total debt remains high (about $392M in 2025) while equity is negative in 2024–2025, indicating balance-sheet strain and limited financial flexibility. Total assets have also declined meaningfully from prior years (from about $1.19B in 2021 to about $455M in 2025). While debt has come down from 2022–2023 levels, the negative equity position increases refinancing and downturn risk until profitability and retained losses improve.18
Very Negative
Cash Flow
Cash generation remains challenged, with negative operating cash flow in recent years (2025 about -$30M) and consistently negative free cash flow (2025 about -$43M). A positive sign is that free cash flow burn improved materially versus 2022 and is better than 2023, suggesting some cost and working-capital progress. However, the company is still consuming cash, which can heighten dependence on external funding given the stressed balance sheet.28
Negative
| Breakdown | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|
Income Statement | |||||
| Total Revenue | 243.74M | 312.47M | 401.98M | 514.80M | 469.62M |
| Gross Profit | 151.62M | 192.81M | 231.17M | 303.90M | 293.46M |
| EBITDA | -580.00K | -70.74M | -36.64M | -164.12M | -53.12M |
| Net Income | -67.23M | -134.27M | -100.44M | -225.75M | -124.97M |
Balance Sheet | |||||
| Total Assets | 454.67M | 607.78M | 835.51M | 1.09B | 1.19B |
| Cash, Cash Equivalents and Short-Term Investments | 95.00M | 183.24M | 212.93M | 391.78M | 521.85M |
| Total Debt | 391.78M | 527.23M | 591.89M | 742.83M | 584.09M |
| Total Liabilities | 499.16M | 675.09M | 787.38M | 1.02B | 837.22M |
| Stockholders Equity | -44.49M | -67.32M | 48.14M | 68.09M | 349.44M |
Cash Flow | |||||
| Free Cash Flow | -42.52M | -40.27M | -48.42M | -110.59M | -42.46M |
| Operating Cash Flow | -30.43M | -15.13M | -19.77M | -62.10M | 3.25M |
| Investing Cash Flow | -13.73M | -28.22M | -18.84M | -56.86M | -140.25M |
| Financing Cash Flow | -45.50M | 14.97M | -151.14M | 1.62M | 11.84M |
Liveperson Technical Analysis
Negative
2.66
Price Trends
3.07
Negative
4.05
Negative
8.24
Negative
Market Momentum
-0.12
Positive
39.48
Neutral
12.92
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For LPSN, the sentiment is Negative. The current price of 2.66 is below the 20-day moving average (MA) of 2.87, below the 50-day MA of 3.07, and below the 200-day MA of 8.24, indicating a bearish trend. The MACD of -0.12 indicates Positive momentum. The RSI at 39.48 is Neutral, neither overbought nor oversold. The STOCH value of 12.92 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for LPSN.
Liveperson Risk Analysis
Liveperson disclosed 62 risk factors in its most recent earnings report. Liveperson reported the most risks in the "Finance & Corporate" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Liveperson Peers Comparison
UnderperformOutperform
Sector (61)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
78 Outperform | $232.78M | 29.94 | 47.38% | ― | -0.32% | 557.28% | |
66 Neutral | $345.51M | -11.71 | -20.20% | ― | -6.23% | 28.57% | |
64 Neutral | $629.87M | -28.39 | -8.42% | ― | 6.54% | -19.17% | |
61 Neutral | $37.18B | 12.37 | -10.20% | 1.83% | 8.50% | -7.62% | |
59 Neutral | $345.32M | -15.25 | -22.88% | ― | 13.09% | 32.34% | |
54 Neutral | $305.64M | -6.33 | -25.34% | ― | -24.30% | -181.62% | |
44 Neutral | $32.06M | -0.25 | 132.32% | ― | -23.03% | -107.34% |
* Technology Sector Average
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Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.