LivePerson Inc (LPSN)

[JohnCM]

LivePerson cut to Hold at Needham as guidance disappoints

Feb. 25, 2022
By:Preeti Singh, SA News

LivePerson (NASDAQ:LPSN) shares have plummeted 36.94% pre-market after the tech firm reported its Q4 financial results Thursday (Feb 24, 2022).

Q4 revenue grew 21% Y/Y to $123.8M, and was within the upper half of the company's guidance range. The company signed seven seven-figure deals and 107 deals in the quarter, comprising 27 new and 80 existing customer contracts.

Business operations revenue and consumer operations revenue each grew 21% Y/Y to $114.1M and $9.8M, respectively.

However, LivePerson incurred losses, with Q4 adjusted operating loss totaling $11.4M, vs. $12.6M income in Q420. Adjusted EBITDA for the quarter was -$4.4M as compared to $18.2M in the prior year quarter.

Following the results, Needham downgraded LivePerson to a Hold rating, citing a FY22 revenue outlook weighed down by growth headwinds related to the company's gainshare and Bella Health offerings.

Needham analyst Ryan MacDonald said: "Investors are likely to come away frustrated by the poor outlook and shift in strategy only 2 quarters after LPSN outlined its intent to invest incrementally to accelerate revenue growth in FY22. While we like the shift towards more profitable growth, we expect the stock to be in the penalty box in the near term while management works to rebuild investor trust through consistent quarterly execution of this new strategy."

LivePerson has guided to a FY22 revenue range of $544.8M- $563.3M, up 16% to 20% Y/Y (vs consensus $595.12M). For Q122, it expects revenue in the range of $124.6M- $126.8M, up 15.5% to 17.5% Y/Y (vs. consensus $131.71M). The company also issued an adj. EBITDA guidance range of -$20M to $0.0M for FY22.