LivePerson (LPSN) Q4 2009 earnings summary

Executive summary

• FY09 revenue rose 17% to $87.5M; net income was $7.8M versus a $23.8M loss in FY08, which included a $23.5M goodwill impairment. Cash reached $45.6M, with no debt.

• More than 8,000 organizations used the hosted engagement platform; business and consumer operations both grew, while consumer operations turned cash positive.

Financial highlights

• Q4 revenue increased 26% YoY to $24.8M; FY09 revenue increased 17% to $87.5M from $74.7M.

• Q4 net income was $3.1M, or $0.06 diluted EPS, versus a $23.8M loss and $(0.50) diluted EPS in Q4 2008; FY09 net income was $7.8M versus a $23.8M loss.

• FY09 operating income was $12.8M versus an operating loss of $22.6M in FY08; excluding FY08's $23.5M goodwill impairment, operating income improved, with both segments profitable.

• Operating expenses fell 23% to $74.7M in FY09, primarily reflecting the absence of FY08's goodwill impairment; gross margin rose to 76% from 73% in FY08.

Outlook and guidance

• Current cash and cash equivalents plus expected operating cash flow were projected to fund working capital and capital needs for at least 12 months.

• FY10 capital expenditures were expected not to exceed $7M, primarily for U.S. and U.K. hosting and backup infrastructure; amortization expense was forecast at $1.5M.

• FY10 priorities included platform and reporting upgrades, a consumer billing platform, expanded Western European sales and services, and a broader middle-market sales effort.

• An agreement to acquire NuConomy was entered into in January 2010 to add R&D capacity and strengthen visitor targeting and behavioral analytics.