Why LivePerson shares fell today
Shares of LivePerson (NHPA -21.00%) plunged today after the conversational artificial intelligence company missed the mark in its second-quarter earnings report and lowered its guidance for the year.
As of 11:17 a.m. ET Tuesday, the stock was down 21.9%.
LivePerson, a software-as-a-service company that powers chatbots and other messaging tools for businesses, said revenue in the quarter rose 11% to $132.6 million, which was lower. estimated at $135.6 million.
Revenue growth has been slow in part due to the company’s efforts to eliminate “poor quality revenue streams” in order to focus on larger transactions with high-value customers to increase its margins.
The company signed five seven-figure deals in the quarter and 104 deals in total, including 45 for new customers, showing it continues to expand its customer base. Average revenue per enterprise (large customers) and mid-market customers increased 23% to $660,000, which may better reflect underlying revenue growth.
Higher spending on marketing, salaries and other corporate overhead led LivePerson to post an adjusted EBITDA loss of $5.5 million in the quarter, which was at the upper end of its previous guidance. , but worse than its result of the previous year with a profit of 13.4 dollars. million.
Its adjusted operating loss was $12.6 million, or $0.16 per share, compared to estimates of a loss of $0.17 per share. Based on generally accepted accounting principles (GAAP), LivePerson lost $0.95 per share.
CEO Robert LoCascio said, “We continue to make substantial changes to our [profit and loss] – focusing on the most differentiated, high-value components of our business – intended to generate high gross margins, strong operating margins and high-quality revenue growth. We believe we are putting in place the right operational framework to drive innovation and grow the business in a strong and sustainable way.”
The company cut its guidance as part of its margin improvement plan. For the full year, it now expects revenue of $507.1 million to $518.3 million, up 8% to 10%, down from its previous forecast of $544.8 million. dollars to $563.3 million, an increase of 16% to 20%. For the third quarter, he forecasts revenue growth of just 1.8% to 4.5%. While it plans to cut costs, management maintained its full-year adjusted EBITDA guidance of $1 million to $10 million.
Shares of LivePerson have plunged over the past year and its turnaround strategy has yet to pay off. Given the lower outlook and the large GAAP loss, it’s no surprise to see the stock plunge again today.