Company: LPSN
Filing Date: 2025-03-14
Form Type: 10-K
Source: 0001102993-25-000018
Chunk: 102

Company: LIVEPERSON INC
Filing Date: 2025-03-14
Form: 10-K
Item: Item 7
Chunk 102
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Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations

General

You should read the following discussion of our financial condition and results of operations in conjunction with the financial statements and the notes thereto included elsewhere in this report. The following discussion contains forward-looking statements that reflect our plans, estimates and beliefs. Our actual results could differ materially from those discussed in the forward-looking statements. Factors that could cause or contribute to these differences include those discussed below and elsewhere in this report, particularly in “Risk Factors.”

This section of this Form 10-K generally discusses 2024 and 2023 items and year over year comparisons between 2024 and 2023. Discussions of 2022 items and the year over year comparisons between 2023 and 2022 that are not included in this Form 10-K can be found in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Part II, Item 7 of the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2023.

Key Metrics and Current Trends

Average Annual Revenue Per Enterprise and Mid-market Customer (“ARPC”) and revenue retention are currently the key performance metrics our management uses to assess the health and trajectory of the Company. These metrics should be viewed independently of revenue, deferred revenue and remaining performance obligations. ARPC increased to approximately $625,000 in 2024, as compared to approximately $610,000 in 2023. Revenue retention for our enterprise and mid-market customers on the LivePerson Platform, which represents the trailing-twelve-month change in total revenue from existing customers after upsells, downsells and attrition, was approximately 82%, below our target range of 105% to 115% in 2024, a decline from the 95% retention rate in 2023 and an increase from the 79% retention rate for the trailing twelve months ended September 30, 2024.

While our expectations for retention rates continue to improve as we look forward to the 2025 renewal cycle, we see heightened risk for the remainder of the current renewal cycle with customers who were likely making their renewal decisions before we installed our new customer success motion. The last set of customers we have identified in this risk category has renewal dates in the first half of 2025. As a result, we currently expect short-term attrition to continue into the first half of 2025 and revenue to decline sequentially as a consequence, with a transition toward positive net new annual