LivePerson (LPSN) Q4 2010 earnings summary

Executive summary

• FY 2010 revenue rose 26% to $109.9M and net income increased 19% to $9.3M, while investment in infrastructure, product development, and international expansion supported an intelligent engagement platform strategy.

• Q4 revenue grew 21% YoY to $29.9M, but net income fell 11% to $2.7M as operating expenses increased.

Financial highlights

• FY revenue was $109.862M vs. $87.490M in 2009; operating income was $14.340M vs. $12.786M; net income was $9.259M vs. $7.763M.

• Q4 revenue was $29.935M vs. $24.768M YoY; operating income was $4.097M vs. $4.619M, and net income was $2.742M vs. $3.091M.

• FY operating expenses increased 28% to $95.5M; gross margin declined to 73% from 76% in 2009.

Outlook and guidance

• Current cash and expected operating cash flows were projected to cover working capital and capital needs for at least 12 months; 2011 capital expenditures were expected not to exceed $8.0M.

• Planned priorities included expansion in the UK, Western Europe and Asia-Pacific, continued R&D investment, broader engagement tools beyond chat, and partner-developed applications.

• Strategic goals included accelerating growth, expanding margins, and developing the intelligent engagement platform across websites, social media, mobile, and other channels.