LivePerson (LPSN 3.33%) is showing year-over-year top-line growth ahead of schedule and even boosting its revenue guidance for all of 2017, but it wasn't a perfect quarterly report posted shortly after Thursday's market close. The provider of high-tech customer support is seeing its full-year outlook for the bottom line going the other way, and it's also announcing that its CFO will be leaving the company by early next year.
Revenue clocked in at $56.5 million for the third quarter, a modest 4% uptick from a year earlier but well ahed of the $54 million to $55 million that it was targeting back in mid-August. LivePerson landed smack-dab in the middle of that range a year earlier -- generating $54.5 million in revenue for the third quarter of 2016 -- so it could've just as easily posted a decline on the top line. Landing north of last year's showing is significant, as it's LivePerson's first fiscal period of growth since late 2015.
Image source: LivePerson.
Pointing in the right direction
Putting an end to a six-quarter streak of year-over-year declining revenue is encouraging. LivePerson has also now pieced together back-to-back quarters of sequential revenue growth for the first time in two years. Keeping that streak going may not be easy, but this is a company that once had a string of 51 consecutive quarters of sequential revenue growth.
The bottom line remains challenging, as LivePerson is posting its eighth straight quarterly deficit. However, it did narrow its deficit, and its reported loss of $0.02 a share would've actually been a profit if not for non-recurring charges related primarily to IP litigation. LivePerson's adjusted profit of $0.05 a share is in line with the guidance it offered up three months ago.
LivePerson keeps signing up new companies turning to its platform that provides proactive customer support through various channels. It inked 76 new deals during the quarter, including 30 new customers. The average revenue per enterprise and midmarket client also keeps growing, up to $215,000 over the past four quarters.
Signing up new clients is something that LivePerson prefers to talk about than going over those that got away, but a good reason for the declining revenue in the six previous reports was the shift to its LiveEngage platform. LivePerson had to let some legacy customers go that weren't a good fit for the migration to LiveEngage. That is now in the past, and LivePerson expects to keep growing albeit slowly. Its guidance calls for $56 million to $57 million in revenue for the third quarter, giving it a good chance to grow modestly off its $56.1 million effort a year earlier. It barely expects to break even on an adjusted basis, targeting a profit of $0.00 to $0.01 a share.
LivePerson is pushing its full-year revenue guidance higher for the second year in a row. It's now gunning for $217.5 million to $218.5 million on the top line, up from the $213 million to $216 million it was modeling three months ago and the $204 million to $209 million that it was projecting the quarter before that. The soft adjusted profit forecast for the current quarter is weighing on its bottom-line outlook. LivePerson is now eyeing an adjusted profit per share of $0.07 to $0.08 for all of 2017, down from $0.07 to $0.11 over the summer. Adjusted EBITDA per share is also being revised lower.
The resignation of CFO Dan Murphy is another pressure point, but the parting seems uneventful. Murphy will be sticking around for a few months to help with the transition.
LivePerson has been a big winner for investors this year. The stock has more than doubled since bottoming out in February as of yesterday's close. The softening of its adjusted earnings and EBITDA guidance as well as Murphy's pending departure weighed on the stock with a lower open on Thursday, but the stock remains one of this year's biggest winners.
