LivePerson (LPSN) Q4 2004 earnings summary

Executive summary

• FY04 revenue rose 45% YoY to $17.392M; net income was $2.092M versus a $0.816M loss in FY03, with reported diluted EPS of $0.05.

• Growth reflected higher sales to existing clients, new client additions and, to a lesser extent, Island Data and FaceTime customer contracts.

• Quarterly profitability continued from Q3 2003; Q4 2004 revenue was $4.596M and net income was $376K.

Financial highlights

• FY04 revenue $17.392M vs. $12.023M in FY03; operating income $2.073M vs. an operating loss of $849K.

• FY04 cost of revenue was $2.888M; product development $2.000M; sales and marketing $5.183M; G&A $4.456M; intangible amortization $792K.

• FY04 net income $2.092M vs. net loss $816K in FY03; basic EPS $0.06 and diluted EPS $0.05, compared with $(0.02) for both in FY03.

• FY03 included a $1.024M restructuring charge; FY04 had no restructuring charge.

• Following audit adjustments, FY04 net income decreased $76K and diluted weighted-average shares increased by 2.363M; diluted EPS was revised from $0.06 to $0.05.

Outlook and guidance

• Prioritize market-share gains and continued product development aimed at delivering client business value; management viewed growth opportunities as favorable for the year ahead.

• FY04 cash and cash equivalents were expected to cover working capital and capital requirements for at least 12 months; additional financing might be needed for faster expansion, product investment or acquisitions.

• 2005 capital expenditures were not expected to exceed $500K; operating lease commitments were $1.484M, including $609K due in 2005.

• Potential adoption of SFAS 123(R), effective for the first fiscal quarter beginning after June 15, 2005, was still being evaluated; impact of SFAS 153, effective for qualifying exchanges from 2006, was also under review.