LivePerson (LPSN) Q4 2012 earnings summary

Executive summary

• FY 2012 revenue rose 18% to $157.4M; growth was led by Business services, while higher investment and expenses cut net income 47% to $6.4M.

• Adoption of multiple solutions expanded: ~575 customers used more than one product at year-end vs. 275 in 2011; more than 600 deals were signed, including 150 new logos.

• Strategic focus centered on integrating engagement products through LiveEngage, expanding international reach, and growing recurring revenue through existing and new customers.

Financial highlights

• FY revenue was $157.4M, up 18% YoY; Q4 revenue was $42.5M, up 16% YoY.

• FY operating income was $10.3M vs. $19.6M in 2011; net income was $6.4M vs. $12.0M, and diluted EPS was $0.11 vs. $0.22.

• Q4 operating income was $2.4M vs. $6.1M; net income was $1.5M vs. $3.9M, with diluted EPS of $0.03 vs. $0.07.

• FY gross margin increased to 77% from 75%; Q4 gross margin decreased to 76% from 78%.

• FY bookings increased 42% to $29.7M; Q4 bookings rose 38% to $8.7M. Bookings exclude one-time implementation and consulting fees and may not convert to revenue.

Outlook and guidance

• Broader LiveEngage rollout was planned for 2013, with the goal of increasing multi-product adoption across the customer base.

• 2013 capital expenditures were expected not to exceed $12.0M; available cash and operating cash flow were expected to fund planned capital needs.

• Expected intangible amortization expense was $4.3M in FY 2013.

• Cash and cash equivalents were expected to cover working capital and capital requirements for at least 12 months; additional financing could be sought if needed.