LivePerson First Quarter Revenue Increases 22% from Prior Year

Dow Jones & Company, Inc. -- May 5, 2005

NEW YORK, May 5 /PRNewswire-FirstCall/ -- LivePerson, Inc. (Nasdaq:
LPSN), a provider of software solutions for online communications including sales, marketing and customer service, today announced financial results for the first quarter ended March 31, 2005.

Revenue for the first quarter was $5.0 million, a 22% increase from the first quarter of 2004, and an 8% sequential increase versus the fourth quarter of 2004. Revenue growth was due to new sales of LivePerson's Timpani Sales & Marketing product, sales to new small business customers, and increased revenue from existing clients.

"Our revenue growth accelerated nicely in the first quarter primarily due to the addition of new clients," CEO Robert LoCascio stated. "We feel that our sales momentum is on track and supported by a sales pipeline with great potential."

LivePerson added several new top-tier clients during the quarter, including two of the ten largest US financial services companies, one of Europe's 15 largest financial services companies, as well as Hitachi, Starwood Vacations and Neteller, a secure online funds transfer provider.

Net income for the first quarter of 2005 was $0.3 million or $0.01 per share, as compared to net income of $0.3 million or $0.01 per share in the fourth quarter of 2004, and net income of $0.7 million, or $0.02 per share in the first quarter of 2004. As compared to the prior year, the Company invested more in sales and marketing, incurred higher accounting professional services fees related to Sarbanes-Oxley compliance, and was subject to a higher effective tax rate.

Earnings before interest, taxes, depreciation, amortization and non-cash compensation (EBITDA) for the first quarter of 2005 was $0.7 million as compared to $0.6 million in the fourth quarter of 2004 and $1.0 million in the first quarter of 2004.

A reconciliation of the differences between EBITDA and the most comparable financial measure calculated and presented in accordance with generally accepted accounting principles (GAAP) is located under the heading "Reconciliation of Non-GAAP Financial Information to GAAP"
immediately following the Condensed Consolidated Statements of Operations included in this press release.

LivePerson considers EBITDA and cash from operations to be important financial indicators of the Company's operational strength and the performance of its business. EBITDA should be considered in addition to results prepared in accordance with GAAP, but should not be considered a substitute for, or superior to, GAAP results. The non-GAAP measures included in this press release have been reconciled to the nearest GAAP measure in the table below.

Financial Expectations

The Company currently expects the following financial results:

* Sequential quarterly revenue growth of 6%, to $5.2 million for Q2 2005
* Revenue of $22.0 million for the full year 2005
* EBITDA of $0.02 per share and GAAP EPS of $0.01 in Q2 2005
* EBITDA of $0.11 per share and GAAP EPS of $0.05 for the full year 2005

The difference between EBITDA per share, a non-GAAP measure, and GAAP EPS, is interest, taxes, depreciation, amortization and non-cash compensation. The Company expects an effective tax rate of approximately 35% for 2005.

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