What changed in this filing

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Item 5. Market for Registrant’s Common Equity

2022-02-28 compared with 2021-03-08 · 16 added, 145 removed, 12 unchanged (93% of the section changed)

1 unchanged sentence

Price Range of Common Stock.

The principal United States market on which our common stock is traded is The NASDAQ Global Select Market under the symbol LPSN.

Our shares of common stock are also traded on the Tel Aviv Stock Exchange under the symbol LPSN TA.

The principal United States market on which our common stock is traded is the Nasdaq under the symbol LPSN.

Our shares of common stock are also traded on the TASE under the symbol LPSN TA.

As of February 10, 2022, there were approximately 197 holders of record of our common stock.

1 unchanged sentence

We intend to retain earnings, if any, to finance the operation and expansion of our business and do not anticipate paying any cash dividends in the foreseeable future.

Unregistered Sales of Securities.

On October 18, 2021, the Company sold a total of 698,987 shares of its common stock as partial consideration of the Company’s acquisition of Tenfold in a transaction exempted from registration under Section 4(a)(2) of the Securities Act of 1933.

On October 25, 2021, the Company sold a total of 1,078,610 shares of its common stock as partial consideration of the Company’s acquisition of VoiceBase in a transaction exempted from registration under Section 4(a)(2) of the Securities Act of 1933.

Issuer Purchases of Equity Securities.

There were no repurchases of the Company's equity securities during the year ended December 31, 2020.

A summary of the Company’s repurchase activity for the three months ended December 31, 2021 is as follows:

Period Total Number of Shares Purchased (1)

Average Price Paid per Share Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs

Oct 1, 2021 - Oct 31, 2021 — $ — — $ —

Nov 1, 2021 - Nov 30, 2021 30,344 23.37 — —

Dec 1, 2021 - Dec 31, 2021 — — — —

Total 30,344 $ 23.37 —

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(1) In November 2021, the Company repurchased 30,344 options to buy an aggregate of 30,344 shares from John Collins.

Stock Performance Graph.

The graph depicted below compares the annual percentage changes in LivePerson’s cumulative total stockholder return with the cumulative total return of the Standard & Poor’s SmallCap 600 Index and the Standard & Poor’s Information Technology Index.

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(1) The graph covers the period from December 31, 2016 to December 31, 2021.

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(3) Stockholder returns over the indicated period should not be considered indicative of future stockholder returns.

Notwithstanding anything to the contrary set forth in any of our previous or future filings under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, that might incorporate by reference this Annual Report on Form 10-K or future filings made by the Company under those statutes, the Stock Performance Graph above is not deemed filed with the Securities and Exchange Commission, is not deemed soliciting material and shall not be deemed incorporated by reference into any of those prior filings or into any future filings made by us under those statutes, except to the extent that we specifically incorporate such information by reference into a previous or future filing, or specifically request that such information be treated as soliciting material, in each case under those statutes.

Selected Consolidated Financial Data

The selected consolidated financial data with respect to our consolidated balance sheets as of December 31, 2020 and 2019 and the related consolidated statements of operations for the years ended December 31, 2020, 2019 and 2018 have been derived from our audited consolidated financial statements which are included herein.

The selected financial data with respect to our balance sheets as of December 31, 2018, 2017 and 2016 and the related statements of operations for the years ended December 31, 2017 and 2016 have been derived from our audited financial statements which are not included herein.

Due to our acquisitions of AdvantageTec, Conversable, and Bot Central in 2018, we believe that comparisons of our operating results with each other, or with those of prior periods, may not be meaningful.

The following selected consolidated financial data should be read in conjunction with the consolidated financial statements and the notes thereto and the information contained in Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations.”

Year Ended December 31,

2020 2019 2018 2017 2016

(In Thousands, Except Share and per Share Data)

Consolidated Statement of Operations Data:

Revenue $ 366,620 $ 291,609 $ 249,838 $ 218,876 $ 222,779

Costs and expenses:

Cost of revenue 106,268 78,878 62,479 58,205 63,161

Sales and marketing

149,773 156,814 103,344 90,905 89,529

General and administrative

60,557 56,967 45,873 43,124 43,046

Product development

108,414 82,145 55,707 40,034 40,198

Restructuring costs

29,420 2,043 4,468 2,594 2,369

Amortization of purchased intangibles

1,639 1,794 1,670 1,840 3,885

Total costs and expenses

456,071 378,641 273,541 236,702 242,188

Loss from operations (89,451) (87,032) (23,703) (17,826) (19,409)

Other (expense) income, net

Interest (expense) income

(14,334) (7,407) 22 26 5

Other (expense) income, net (1,343) 1,213 (493) 110 (535)

Other (expense) income (15,677) (6,194) (471) 136 (530)

Loss before provision for income taxes (105,128) (93,226) (24,174) (17,690) (19,939)

Provision for income taxes 2,466 2,845 858 501 5,934

Net loss $ (107,594) $ (96,071) $ (25,032) $ (18,191) $ (25,873)

Net loss per share of common stock:

Basic $ (1.63) $ (1.53) $ (0.42) $ (0.32) $ (0.46)

Diluted $ (1.63) $ (1.53) $ (0.42) $ (0.32) $ (0.46)

Weighted-average shares used to compute net loss per share:

Basic 65,888,450 62,593,026 59,203,400 56,358,017 56,063,777

Diluted 65,888,450 62,593,026 59,203,400 56,358,017 56,063,777

Other Financial and Operational Data:

Adjusted EBITDA (1)

$ 37,931 $ (13,612) $ 19,090 $ 18,400 $ 19,198

Adjusted operating income (loss) (2)

$ 15,105 $ (29,978) $ 4,902 $ 6,042 $ 7,503

(1) We define adjusted EBITDA as net loss before provision for (benefit from) income taxes, other (expense) income, net, depreciation and amortization, stock-based compensation, restructuring costs, acquisition costs and other charges.

Please see “Adjusted EBITDA” below for more information and for a reconciliation of adjusted EBITDA to net (loss) income, the most directly comparable financial measure calculated and presented in accordance with U.S.

generally accepted accounting principles, or (“GAAP”).

(2) We define adjusted operating income as income (loss) before provision for income taxes excluding amortization, stock-based compensation, restructuring costs, acquisition costs, contingent earn-out adjustments, other charges and other (expense) income.

Please see “Adjusted Operating Income” below for more information and for a reconciliation of adjusted operating income to income (loss) before provision for income taxes, the most directly comparable financial measure calculated and presented in accordance with U.S.

generally accepted accounting principles or GAAP.

Stock-based compensation included in the statements of operations above was as follows (amounts in thousands):

Year Ended December 31,

2020 2019 2018 2017 2016

Cost of revenue $ 6,511 $ 4,218 $ 996 $ 448 $ 429

Sales and marketing 16,106 10,010 5,374 2,500 2,515

General and administrative 15,772 12,216 4,921 3,691 3,304

Product development 27,557 17,661 3,550 2,305 3,488

Total stock-based compensation $ 65,946 $ 44,105 $ 14,841 $ 8,944 $ 9,736

As of December 31,

2020 2019 2018 2017 2016

(In Thousands)

Consolidated Balance Sheet Data:

Cash and cash equivalents $ 654,152 $ 176,523 $ 66,449 $ 56,115 $ 50,889

Working capital 540,260 107,674 7,873 13,789 17,548

Total assets 1,006,432 512,710 290,103 232,799 219,638

Total stockholders’ equity 243,934 148,535 170,729 140,063 138,476

Adjusted EBITDA and Adjusted Operating Income

To provide investors with additional information regarding our financial results, we have disclosed adjusted EBITDA and adjusted operating income which are non-GAAP financial measures.

The tables below present a reconciliation of adjusted EBITDA and adjusted operating income to net (loss) income, the most directly comparable GAAP financial measures.

We have included adjusted EBITDA and adjusted operating income in this Annual Report on Form 10-K because these are key measures used by our management and board of directors to understand and evaluate our core operating performance and trends, to prepare and approve our annual budget and to develop short and long-term operational plans.

In particular, the exclusion of certain expenses in calculating adjusted EBITDA and adjusted operating income can provide a useful measure for period-to-period comparisons of our core business.

Additionally, adjusted EBITDA is a key financial measure used by the compensation committee of our board of directors in connection with the payment of bonuses to our executive officers.

Accordingly, we believe that adjusted EBITDA and adjusted operating income provide useful information to investors and others in understanding and evaluating our operating results in the same manner as our management and board of directors.

Our use of adjusted EBITDA has limitations as an analytical tool, and you should not consider it in isolation or as a substitute for analysis of our results as reported under GAAP.

Some of these limitations are:

• although depreciation and amortization are non-cash charges, the assets being depreciated and amortized may have to be replaced in the future, and adjusted EBITDA does not reflect cash capital expenditure requirements for such replacements or for new capital expenditure requirements;

• adjusted EBITDA does not reflect changes in, or cash requirements for, our working capital needs;

• adjusted EBITDA does not consider the impact of acquisition costs;

• adjusted EBITDA does not consider the impact of restructuring costs;

• adjusted EBITDA does not consider the impact of other costs;

• adjusted EBITDA does not reflect tax payments that may represent a reduction in cash available to us;

• other companies, including companies in our industry, may calculate adjusted EBITDA differently, which reduces its usefulness as a comparative measure.

Because of these limitations, you should consider adjusted EBITDA alongside other financial performance measures, including various pre-tax GAAP loss and our other GAAP results.

The following table presents a reconciliation of adjusted EBITDA for each of the periods indicated (amounts in thousands):

Year Ended December 31,

2020 2019 2018 2017 2016

Reconciliation of Adjusted EBITDA:

GAAP Net loss $ (107,594) $ (96,071) $ (25,032) $ (18,191) $ (25,873)

Amortization of purchased intangibles and finance leases 3,552 2,932 2,813 4,682 6,673

Stock-based compensation 65,946 44,105 14,841 8,944 9,736

Contingent earn-out adjustments 263 — — — —

Restructuring costs 29,420 (1)

Depreciation and amortization 22,826 16,366 14,188 12,358 12,011

Other litigation and consulting costs 5,375 (5)

Provision for income taxes 2,466 2,845 858 501 5,934

Acquisition costs — — 555 — —

Interest expense (income) 14,334 7,407 (22) (26) (5)

Other expense (income) 1,343 (1,213) 493 (110) 535

Adjusted EBITDA (loss) $ 37,931 $ (13,612) $ 19,090 $ 18,400 $ 19,198

Our use of adjusted operating income has limitations as an analytical tool, and you should not consider it in isolation or as a substitute for analysis of our results as reported under GAAP.

Some of these limitations are:

• although amortization is a non-cash charge, the assets being amortized may have to be replaced in the future, and adjusted operating income does not reflect cash capital expenditure requirements for such replacements or for new capital expenditure requirements;

• adjusted operating income does not consider the impact of acquisition costs;

• adjusted operating income does not consider the impact of restructuring costs;

• adjusted operating income does not consider the impact of other non-recurring costs;

• other companies, including companies in our industry, may calculate adjusted operating income differently, which reduces its usefulness as a comparative measure.

Because of these limitations, you should consider adjusted operating income (loss) alongside other financial performance measures, including various pre-tax GAAP loss and our other GAAP results.

The following table presents a reconciliation of adjusted operating income (loss) for each of the periods indicated (amounts in thousands):

Year Ended December 31,

2020 2019 2018 2017 2016

Reconciliation of Adjusted Operating Income (Loss)

Loss before provision for income taxes $ (105,128) $ (93,226) $ (24,174) $ (17,690) $ (19,939)

Amortization of purchased intangibles and finance leases 3,552 2,932 2,813 4,682 6,673

Stock-based compensation 65,946 44,105 14,841 8,944 9,736

Restructuring costs 29,420 (1)

Other litigation and consulting costs 5,375 (5)

Contingent earn-out adjustments 263 — — — —

Acquisition costs — — 555 — —

Interest expense (income) 14,334 7,407 (22) (26) (5)

Other expense (income) 1,343 (1,213) 493 (110) 535

Adjusted operating income (loss) $ 15,105 $ (29,978) $ 4,902 $ 6,042 $ 7,503

(1) Includes lease restructuring costs of $24.3 million and severance and other compensation related costs of $5.1 million for the year ended December 31, 2020.

As detailed in Note 14 of the Notes to the Consolidated Financial Statements, the Company’s lease restructuring costs relate to a transition to an employee-centric workforce model that does not rely on traditional offices, while the severance and other compensation costs relate to the Company re-prioritizing and reallocating resources to focus on areas showing high growth potential.

(2) These costs include severance and associated costs of $2.0 million for the year ended December 31, 2019.

The restructuring costs relate to resource reallocation for the Company’s platform transformation.

(3) Consists of severance costs of $4.5 million for the year ended December 31, 2018.

Please refer to footnote (2) above for additional information related to the nature of these restructuring and severance costs.

(4) Includes wind down costs of legacy platform of $1.9 million and severance costs of $0.7 million for the year ended December 31, 2017.

Please refer to footnote (2) above for additional information related to the nature of these restructuring and severance costs.

(5) Includes other litigation costs of $5.4 million for the year ended December 31, 2020.

Other litigation costs relate to lease restructuring costs, along with other general legal matters.

6) Includes other litigation costs of $4.4 million, consulting costs of $3.2 million, and fair value earn-out adjustment of $0.3 million for the year ended December 31, 2019.

The Company's other litigation costs relate to the Company’s intellectual property lawsuit against [24]7 Customer, Inc.

(7) Includes litigation costs of $4.1 million, consulting costs of $1.3 million, executive recruitment costs of $0.3 million, and executive relocation costs of $0.2 million for the year ended December 31, 2018.

Please refer to footnote (6) above for additional information related to the nature of these other litigation costs.

(8) Includes litigation costs of $6.2 million, executive one-time compensation payment of $1.0 million, and executive separation cost of $0.5 million for the year ended December 31, 2017.

Please refer to footnote (6) above for additional information related to the nature of these other litigation costs.

(9) Includes severance costs of $1.6 million, wind down costs of legacy platform of $1.2 million and a benefit of $0.4 million of cash collected on previously written off bad debt for the year ended December 31, 2016.

Please refer to footnote (2) above for additional information related to the nature of these restructuring and severance costs.

(10) Includes litigation costs of $4.7 million, write off of technology licenses of $2.6 million, severance costs of $0.5 million, and write off of office facility depreciation of $0.3 million for the year ended December 31, 2016.

Please refer to footnote (6) above for additional information related to the nature of these other litigation costs.

Notwithstanding anything to the contrary set forth in any of our previous or future filings under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, that might incorporate by reference this Annual Report on Form 10-K or future filings made by the Company under those statutes, the Stock Performance Graph above is not deemed filed with the SEC, is not deemed soliciting material and shall not be deemed incorporated by reference into any of those prior filings or into any future filings made by us under those statutes, except to the extent that we specifically incorporate such information by reference into a previous or future filing, or specifically request that such information be treated as soliciting material, in each case under those statutes.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 5. Market for Registrant’s Common Equity