LivePerson (LPSN) Q4 2008 earnings summary

Executive summary

• FY 2008 revenue grew 43% to $74.7M, while a $23.5M goodwill impairment drove a $23.8M net loss, versus $5.8M net income in 2007.

• Hosted online-engagement services handled 72M+ chat interactions; customer additions and expansion supported growth despite recessionary conditions.

Financial highlights

• Revenue was $74.655M in FY 2008, up from $52.228M in 2007; operating expenses increased to $97.280M from $49.014M.

• Operating loss was $22.625M, versus operating income of $3.214M in 2007; the loss included a $23.501M goodwill impairment charge.

• Net loss was $23.837M, or $0.50 per basic and diluted share, versus net income of $5.821M, or $0.13 basic and $0.12 diluted EPS, in 2007.

• Operating cash flow was $7.985M; cash and equivalents ended FY 2008 at $25.5M, down $722K YoY.

Outlook and guidance

• Cash and cash equivalents were expected to fund working capital and capital needs for at least 12 months; additional financing may be needed if expansion or other funding needs exceed resources.

• FY 2009 capital expenditures were expected not to exceed $8.0M, following $6.7M spent on the eastern U.S. co-location facility through 2008.

• Amortization expense was estimated at $1.954M for FY 2009; management cited recessionary challenges but expressed confidence in continued growth prospects.