LivePerson (LPSN) Q4 2005 earnings summary

Executive summary

• FY05 revenue rose 28% to $22.3M; net income was $2.5M, and Q4 sequential revenue growth reached 10%.

• More than 4,000 customers used the hosted online engagement platform; nearly 3M consumers clicked and chatted through the service monthly.

Financial highlights

• Revenue was $22.277M vs. $17.392M in FY04; new clients contributed ~$3.9M, existing clients ~$0.5M and professional services ~$0.4M of the increase.

• Operating income reached $2.917M vs. $2.073M; net income was $2.542M vs. $2.092M.

• Diluted EPS was $0.06 vs. $0.05; reported basic EPS was $0.07 vs. $0.06.

• Cost of revenue rose 49% to $4.3M, including higher account support and hosting costs; full-year gross margin remained above 80% for the fourth consecutive year but declined YoY.

Outlook and guidance

• Cash and cash equivalents were expected to cover working capital and capital needs for at least 12 months; 2006 capital expenditures were expected below $500K.

• FY06 adoption of SFAS 123(R) was expected to reduce net income per common share by ~$0.05, subject to option grants and methodology changes.

• 2006 priorities included expanding the client base and recurring revenue, extending product capabilities and pursuing international growth.