LivePerson (LPSN 11.27%) shareholders lost ground to the market as shares dove 26% by 1:15 p.m. ET, even as the S&P 500 soared 2%. The digital-communications specialist, which had seen fantastic sales growth through earlier phases of the pandemic, released earnings results that point to slower gains ahead.
In an earnings report released before the market opened, LivePerson revealed that sales trends held up well through late 2021. Sales rose 21% to $114 million and rose 28% for the full year, thanks to robust demand for its automated messaging platform.
LivePerson's management team highlighted the company's expanding customer footprint and elevated engagement. However, the company signaled a shift in that growth strategy ahead.
"While we are pleased with our performance in 2021," CEO Robert LoCascio said in a press release, "we see a more leveraged and scalable opportunity to accelerate profitable growth." In other words, LivePerson is focusing more on generating earnings in 2022 rather than simply gaining more enterprise customers.
To that end, management predicted that sales in the first quarter will land at about $125 million, translating into a 16% boost. Revenue for the full year will climb by less than 20% to about $560 million, too. Most Wall Street pros were looking for that 2022 sales figure to be closer to $600 million, so the stock fell along with those expectations.
LivePerson is targeting improving financial metrics like gross profitability and adjusted operating margin. However, the slower growth profile, powered by a steady return toward more normal in-person working trends, will translate into weaker earnings than some investors had been hoping to see from the business.