Company: LPSN
Filing Date: 2025-11-13
Form Type: 10-Q
Source: 0001102993-25-000187
Chunk: 90

Company: LIVEPERSON INC
Filing Date: 2025-11-13
Form: 10-Q
Item: Part I, Item 1
Chunk 90
---
 years in which those temporary differences are expected to be recovered or settled. In assessing the realizability of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences are expected to become deductible. Management considers the scheduled reversal of deferred tax liabilities, projected future taxable income and tax planning strategies in making this assessment.The Company includes interest accrued on the underpayment of income taxes and certain interest expense and penalties, if any, related to unrecognized tax benefits as a component of the income tax provision. The Company recorded a valuation allowance against its U.S., e-bot7 Germany, and Bulgaria deferred tax assets as it considered its cumulative losses in recent years as a significant piece of negative evidence. Since valuation allowances are evaluated by jurisdiction, the Company believes that the deferred tax assets related to LivePerson Australia Pty. Ltd., Engage Pty. Ltd., LivePerson (UK) Ltd., LivePerson Japan, and LivePerson Ltd. (Israel) are more likely than not to be realized as these jurisdictions have positive cumulative pre-tax book income after adjusting for permanent and one-time items.The One Big Beautiful Bill was signed into law on July 4th, 2025, and makes changes to the deductibility of certain business expenditures including interest expense, research and development expenditures, and property and equipment, and makes changes to elements of U.S. cross-border taxation. The Company’s third quarter provision incorporates these changes in law including the acceleration of historical domestic research and development expenditures previously capitalized and the immediate expense of domestic research and development expenses. For the three and nine months ended September 30, 2025, the Company recorded a tax provision of $0.4 million and $0.4 million respectively. This consists of a tax provision on operating earnings of non-U.S. subsidiaries, a tax benefit on an increase in tax receivables, and interest accrual on unrecognized tax benefits in Israel.The Company had a valuation allowance on certain deferred tax assets for the year ended December 31, 2024 of $234.6 million. Inherent in the Company’s 2025 annual effective tax rate is an estimated decrease in the valuation allowance of $2.6 million, all of which would be recorded through the consolidated statements of operations. During 2024, an increase in the valuation allowance in the amount of $23.4 million was recorded as an expense.