What changed in this filing

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Item 8. Financial Statements and Supplementary Data

2026-03-16 compared with 2025-03-14 · 518 added, 576 removed, 910 unchanged (55% of the section changed)

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Consolidated Statements of Comprehensive Loss for the three years ended December 31, 2025, 2024, and 2023

Consolidated Statements of Stockholders’ Equity for the three years ended December 31, 2024, 2023, and 2022

Consolidated Statements of Stockholders’ Equity (Def icit) for the three years ended December 31, 2025, 2024, and 2023

Consolidated Statements of Cash Flows for the three years ended December 31, 2025, 2024, and 2023

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We have audited the accompanying consolidated balance sheets of LivePerson, Inc.

(the “Company”) as of December 31, 2024 and 2023, the related consolidated statements of operations, comprehensive loss, stockholders’ equity, and cash flows for each of the three years in the period ended December 31, 2024, and the related notes (collectively referred to as the “consolidated financial statements”).

(the “Company”) as of December 31, 2025 and 2024, the related consolidated statements of operations, comprehensive loss, stockholders’ equity (deficit), and cash flows for each of the three years in the period ended December 31, 2025, and the related notes (collectively referred to as the “consolidated financial statements”).

In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at December 31, 2025 and 2024, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2025 , in conformity with accounting principles generally accepted in the United States of America.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company's internal control over financial reporting as of December 31, 2025, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) and our report dated March 13, 2026 expressed an unqualified opinion thereon.

Basis for Opinion

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Our responsibility is to express an opinion on the Company’s consolidated financial statements based on our audits.

We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S.

We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S.

federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

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Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud.

The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting.

As part of our audits we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting.

Accordingly, we express no such opinion.

Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks.

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The communication of the critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.

Evaluation of Embedded Features in 2029 Notes

As described in Notes 1 and 8 to the consolidated financial statements, in June 2024, the Company issued $150 million aggregate principal amount of its 2029 Notes including $100 million aggregate principal amount issued in exchange for $146 million aggregate principal amount of 2026 Notes and $50 million aggregate principal amount issued for cash.

Evaluation of Embedded Features in Second Lien Notes

As described in Notes 1 and 8 to the consolidated financial statements, on the Exchange Closing Date, the Company issued $115.0 million in aggregate principal amount of Second Lien Notes as part of the September 2025 Debt Exchange transaction.

The Company evaluates convertible debt instruments and related transactions at inception to determine if those contracts include embedded features that should be bifurcated as an embedded derivative.

The 2029 Notes include certain embedded features requiring bifurcation, which did not have material values as of December 31, 2024 due to management’s estimates of the likelihood of triggering events, but that may have value in the future should those estimates change, with any change in fair value recorded in the Company’s consolidated statements of operations.

We identified the evaluation of whether the embedded features included in the 2029 Notes should be bifurcated as embedded derivatives as a critical audit matter.

Determining whether the embedded features included in the 2029 Notes should be bifurcated and accounted for separately as derivatives involved the use of significant judgment in the application of highly complex

accounting standards.

Auditing these elements involved especially challenging and complex auditor judgment due to the nature and extent of audit effort required to evaluate management’s application of highly complex accounting standards to these elements.

The primary procedures we performed to address this critical audit matter included:

• Reading and analyzing the relevant agreements to identify relevant terms and conditions that affect whether embedded features should be bifurcated.

• With the assistance of professionals in our firm having expertise in accounting for derivatives, we evaluated the Company’s conclusions regarding whether the embedded features should be bifurcated and accounted for as derivatives under accounting principles generally accepted in the United States of America.

Impairment Testing of Goodwill and Long-Lived Assets

As described in Notes 1, 5 and 6 to the consolidated financial statements, the Company’s consolidated goodwill, intangible assets and property and equipment, net balances as of December 31, 2024 were $222.6 million, $15.1 million and $100.6 million, respectively.

Prior to testing goodwill for impairment, the Company first tests its long-lived assets for impairment.

Recoverability of these assets is measured by a comparison of the carrying amounts to the future undiscounted cash flows the assets are expected to generate from their use and eventual disposition.

If such review indicates that the carrying amount of an asset is not recoverable and the asset's fair value is less than the carrying amount, an impairment charge is recognized.

In connection with the annual goodwill impairment completed as of October 2024, using the quantitative “Step 1” assessment, the Company determined the fair value of its reporting unit, using both an income approach and a market approach.

The fair value determination using an income approach requires management to make significant estimates and assumptions that related to forecasts of future revenues, earnings before interest, taxes, depreciation, and amortization (“EBITDA”) and the discount rate.

As a result of the impairment tests in the fourth quarter of 2024, the Company recorded non-cash impairment charges of $56.9 million for goodwill and $35.2 million for intangible assets which is included in Impairment of goodwill and Impairment of intangibles and other assets in the consolidated statements of operations, respectively.

We identified the Company’s impairment testing of its long-lived assets and goodwill in the fourth quarter of 2024 as a critical audit matter.

The cash flows used in determining the fair value of the Company’s reporting unit and recoverability of the asset group required the use of significant judgment due to the subjectivity and uncertainty of the forecasts of future revenues for certain years and EBITDA.

Auditing these elements involved especially challenging and subjective auditor judgment due to the nature and extent of audit effort required to address these matters.

The terms of the Second Lien Notes provide for redemption at the option of the Company or the Holder in certain circumstances.

No embedded features were bifurcated from the Second Lien Notes as the September 2025 Debt Exchange was accounted for as a troubled debt restructuring and the Company recognized a gain in connection with the issuance of the Second Lien Notes.

We identified the evaluation of whether the embedded redemption features included in the Second Lien Notes should be bifurcated as embedded derivatives as a critical audit matter.

Determining whether the embedded features included in the Second Lien Notes should be bifurcated and accounted for separately as derivatives involved the use of significant judgment in the application of highly complex accounting standards.

Auditing these elements involved especially complex auditor judgment due to the nature and extent of audit effort required to evaluate management’s application of complex accounting standards.

The primary procedures we performed to address this critical audit matter included:

• Evaluating the reasonableness of the assumptions regarding forecasts of future revenues for certain years and EBITDA by:

i) evaluating the consistency of the forecasts of future revenues and EBITDA with historical results, and ii) evaluating the consistency of the forecasts of future revenues and EBITDA with the Company’s objectives and strategies.

• Testing the accuracy and completeness of information used by management to determine the forecasts of future revenues for certain years.

• Reading and analyzing the relevant agreements to identify relevant terms and conditions that affect whether the embedded redemption features in the Second Lien Notes should be bifurcated.

• With the assistance of professionals in our firm having expertise in the relevant technical accounting, we evaluated the Company’s conclusions regarding whether the embedded features should be bifurcated and accounted for as derivatives under accounting principles generally accepted in the United States of America.

Impairment Testing of Goodwill

As described in Note 5 to the consolidated financial statements, the Company’s consolidated goodwill, net balance as of December 31, 2025 was $184.9 million.

In connection with the annual impairment test completed as of October 1, 2025 and the interim impairment test performed at December 31, 2025, the Company determined the fair value of its reporting unit using both an income approach and a market approach.

The fair value determination using an income approach requires management to make significant estimates and assumptions related to forecasts of future revenues, earnings before interest, taxes, depreciation, and amortization (“EBITDA”) and the discount rate.

The discount rate used in the income approach model in connection with the interim impairment testing included a risk premium.

As a result of the annual impairment test, no impairment was identified, as the fair value of the Company’s reporting unit exceeded its carrying value.

As a result of the interim impairment test, the Company recorded a non-cash impairment charge of $41.6 million in the consolidated statements of operations during the year ended December 31, 2025, to recognize the impairment of goodwill in the Company’s one reporting unit.

We identified the annual impairment test and interim impairment test as critical audit matters.

Determining the fair value of the reporting unit for the annual impairment test and interim impairment test using an income approach required significant judgment due to the subjectivity and uncertainty involved in making significant assumptions related to (i) forecasts of future revenues for certain years used in the annual impairment test and the (ii) discount rates used in both the annual and December 31, 2025 interim impairment tests.

Auditing these elements involved especially challenging and subjective auditor judgment due to the nature and extent of audit effort required to address these matters, including the extent of specialized skills and knowledge needed.

The primary procedures we performed to address these critical audit matters included:

• Evaluating the reasonableness of the assumptions regarding forecasts of future revenues for certain years used in the annual impairment test by evaluating the assumptions for consistency with:

(i) historical results and recent experience, taking into account changes in conditions and events affecting the Company and (ii) the Company’s objectives and strategies and by recomputing forecasted revenue.

• Testing the accuracy and completeness of expiring customer contracts on a sample basis by agreeing the information to the customer contracts used by management to determine the forecasts of future revenues for certain years used in the annual impairment test.

• Utilizing personnel with specialized knowledge and skills in valuation to evaluate the reasonableness of the discount rates utilized in the income approach in connection with the annual impairment testing and interim impairment testing by (i) using certain market information to develop an expectation of the discount rate for comparison to management’s selected discount rate, and (ii) assessing the risk premium based on qualitative facts and circumstances.

/s/ BDO USA, P.C.

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CONSOLIDATED BALANCE SHEETS

ASSETS (In thousands)

(in thousands, except share amounts)

Current assets:

Cash and cash equivalents $ 95,004 $ 183,237

Restricted cash — 2,143

Accounts receivable, net of allowances of $ 4,451 and $ 8,627 as of December 31, 2025 and 2024, respectively

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Total current assets 137,118 231,224

Operating lease right-of-use assets (Note 9)

Property and equipment, net (Note 6) 90,389 100,557

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Total assets $ 454,667 $ 607,778

LIABILITIES AND STOCKHOLDERS’ EQUITY

LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)

Current liabilities:

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Deferred revenue (Note 2) 54,295 57,980

Convertible senior notes (Note 8) — 72,393

Operating lease liabilities (Note 9)

Current portion of long-term debt (Note 8) 20,052 —

Total current liabilities 122,569 139,940

Convertible senior notes, net of current portion (Note 8) 527,070 511,565

Operating lease liabilities, net of current portion (Note 9)

Senior notes, net of current portion (Note 8) 371,732 527,070

Deferred tax liabilities (Note 14) 4,196 3,542

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Total liabilities 499,162 675,094

Commitments and contingencies (Note 11)

Stockholders’ equity:

Commitments and contingencies (Notes 10 and 13)

Stockholders’ equity (deficit):

Preferred stock, $ 0.001 par value - 5,000,000 shares authorized;

Common stock, $ 0.001 par value - 200,000,000 shares authorized;

none issued and outstanding as of both December 31, 2025 and 2024

Common stock, $ 0.001 par value - 20,000,000 and 13,333,333 shares authorized;

12,223,729 and 6,263,782 shares issued, and 12,039,325 and 6,079,378 shares outstanding as of December 31, 2025 and 2024, respectively

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Accumulated other comprehensive loss ( 7,247 ) ( 12,193 )

Total stockholders’ equity ( 67,316 ) 48,138

Total liabilities and stockholders’ equity $ 607,778 $ 835,513

Total stockholders’ equity (deficit) ( 44,495 ) ( 67,316 )

Total liabilities and stockholders’ equity (deficit) $ 454,667 $ 607,778

See accompanying notes to consolidated financial statements.

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CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except share and per share amounts)

Year Ended December 31,

2025 2024 2023

(In thousands, except share and per share amounts)

Revenue $ 243,742 $ 312,474 $ 401,983

Costs, expenses and other:

Cost of revenue 93,404 142,823 184,699

Cost of revenue (exclusive of depreciation and amortization shown separately below) 69,392 77,395 116,060

Sales and marketing 75,800 97,337 122,574

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Product development 54,706 79,784 103,863

Depreciation and amortization 22,732 42,272 54,753

Restructuring costs 11,667 11,139 22,664

Impairment of goodwill

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2,108 46,872 7,974

Restructuring costs 11,139 22,664 19,967

Loss (gain) on divestiture

— 558 ( 17,591 )

Amortization of purchased intangible assets 2,745 3,505 3,678

Total costs, expenses and other 322,441 495,669 513,358

Loss from operations ( 78,699 ) ( 183,195 ) ( 111,375 )

Other income (expense), net:

Other income, net:

Interest expense

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4,751 5,860 9,551

Gain on troubled debt restructuring 27,720 — —

Gain on debt extinguishment

— 73,083 7,200

Other (expense) income, net

( 12,800 ) 3,234 ( 1,784 )

Total other income (expense), net 51,657 15,103 ( 2,136 )

Other income (expense), net 13,977 ( 12,800 ) 3,234

Total other income, net 14,918 51,657 15,103

Loss before provision for income taxes ( 63,781 ) ( 131,538 ) ( 96,272 )

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CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS

(in thousands)

Year Ended December 31,

2025 2024 2023

(In thousands)

Net loss $ ( 67,233 ) $ ( 134,273 ) $ ( 100,435 )

Other comprehensive (loss) income:

Foreign currency translation adjustment 4,946 ( 3,709 ) 2,193

Comprehensive loss $ ( 137,982 ) $ ( 98,242 ) $ ( 230,860 )

Total comprehensive loss $ ( 62,287 ) $ ( 137,982 ) $ ( 98,242 )

See accompanying notes to consolidated financial statements.

LIVEPERSON, INC.

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (DEFICIT)

(in thousands, except share amounts)

Common Stock Treasury Stock Additional

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Comprehensive

Loss Total Equity

Loss Total Equity (Deficit)

Shares Amount Shares Amount

(In thousands, except share data)

Balance as of December 31, 2021

74,980,546 $ 75 ( 2,746,243 ) $ ( 3 ) $ 871,788 $ ( 516,859 ) $ ( 5,564 ) $ 349,437

Cumulative adjustment due to adoption of ASU 2020-06

— — — — ( 209,651 ) 50,244 — ( 159,407 )

Common stock issued upon exercise of stock options 272,770 — — — 1,327 — — 1,327

Common stock issued upon vesting of restricted stock units 1,204,430 1 — — ( 1 ) — — —

Stock-based compensation — — — — 68,630 — — 68,630

Bonus cash payment settled in shares of the Company’s common stock 735,519 1 — — 17,299 — — 17,300

Common stock repurchase — — ( 19,830 ) — ( 222 ) — — ( 222 )

Issuance of common stock in connection with acquisitions 837,965 1 — — 17,636 — — 17,637

Common stock issued under the Company’s employee stock purchase plan (“ESPP”)

319,754 — — — 4,246 — — 4,246

Net loss — — — — — ( 225,747 ) — ( 225,747 )

Other comprehensive loss — — — — — — ( 5,113 ) ( 5,113 )

Balance as of December 31, 2022 78,350,984 $ 78 ( 2,766,073 ) $ ( 3 ) $ 771,052 $ ( 692,362 ) $ ( 10,677 ) $ 68,088

Balance at December 31, 2022 5,223,399 $ 78 ( 184,404 ) $ ( 3 ) $ 771,052 $ ( 692,362 ) $ ( 10,677 ) $ 68,088

Common stock issued upon exercise of stock options 4,449 — — — 175 — — 175

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Issuance of common stock in connection with acquisitions 686,492 10 — — 38,418 — — 38,428

Common stock issued under ESPP 355,199 1 — — 1,715 — — 1,716

Common stock issued under Employee Stock Purchase Plan (“ESPP”) 23,680 1 — — 1,715 — — 1,716

Activity related to divestiture — — — — 66,681 ( 64,191 ) 57 2,547

— — — — 66,681 ( 64,191 ) 57 2,547

Net loss — — — — — ( 100,435 ) — ( 100,435 )

Other comprehensive income — — — — — — 2,136 2,136

— — — — — — 2,136 2,136

Balance as of December 31, 2023 90,603,519 $ 91 ( 2,766,073 ) $ ( 3 ) $ 913,522 $ ( 856,988 ) $ ( 8,484 ) $ 48,138

Balance at December 31, 2023 6,040,234 $ 91 ( 184,404 ) $ ( 3 ) $ 913,522 $ ( 856,988 ) $ ( 8,484 ) $ 48,138

Common stock issued upon exercise of stock options 1 — — — — — — —

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Other comprehensive loss — — — — — — ( 3,709 ) ( 3,709 )

Balance as of December 31, 2024 93,956,738 $ 94 ( 2,766,073 ) $ ( 3 ) $ 936,047 $ ( 991,261 ) $ ( 12,193 ) $ ( 67,316 )

Balance at December 31, 2024 6,263,782 $ 94 ( 184,404 ) $ ( 3 ) $ 936,047 $ ( 991,261 ) $ ( 12,193 ) $ ( 67,316 )

Common stock issued in connection with debt transaction 3,698,788 56 — — 49,325 — — 49,381

Conversion of preferred stock to common stock 1,547,840 15 — — 20,648 — — 20,663

Common stock issued upon vesting of restricted stock units 592,507 7 — — ( 7 ) — — —

Stock-based compensation — — — — 14,105 — — 14,105

Common stock issued under ESPP 120,812 1 — — 958 — — 959

Net loss — — — — — ( 67,233 ) — ( 67,233 )

Other comprehensive income — — — — — — 4,946 4,946

Balance at December 31, 2025 12,223,729 $ 173 ( 184,404 ) $ ( 3 ) $ 1,021,076 $ ( 1,058,494 ) $ ( 7,247 ) $ ( 44,495 )

See accompanying notes to consolidated financial statements.

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CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

Year Ended December 31,

2025 2024 2023

(In thousands)

OPERATING ACTIVITIES:

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Stock-based compensation expense 14,256 21,989 11,854

Depreciation 30,310 32,557 32,284

Depreciation and amortization 21,975 30,310 32,557

Reduction of operating lease right-of-use assets 17 4,059 —

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Change in fair value of Warrants

( 13,202 ) 12,232 —

Change in fair value of contingent consideration — — 4,629

Gain on troubled debt restructuring

( 42,429 ) — —

Gain on debt extinguishment — ( 73,083 ) ( 7,200 )

Paid-in-kind interest expense

Non-cash interest expense 15,263 5,810 —

Allowance for credit losses 866 14,959 3,319

Loss (gain) on divestiture — 558 ( 17,591 )

Gain on settlement of leases — — ( 242 )

Deferred income taxes 622 623 1,046

Equity loss in joint venture — — 2,264

Changes in operating assets and liabilities, net of acquisitions:

Changes in operating assets and liabilities:

Accounts receivable 1,160 37,548 1,457

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INVESTING ACTIVITIES:

Purchases of property and equipment, including capitalized software ( 25,142 ) ( 28,657 ) ( 48,486 )

Purchases of property and equipment, including capitalized internal-use software development costs ( 12,088 ) ( 25,142 ) ( 28,657 )

Proceeds from divestiture — — 13,819

Payments for acquisitions, net of cash acquired — — ( 3,430 )

Purchases of intangible assets ( 1,639 ) ( 3,074 ) ( 4,004 )

Investment in joint venture — — ( 2,264 )

Net cash used in investing activities ( 13,727 ) ( 28,216 ) ( 18,842 )

FINANCING ACTIVITIES:

Payment on settlement of warrants ( 1,297 ) — —

Payment in connection with troubled debt restructuring ( 45,000 ) — —

Proceeds from issuance of 2029 convertible senior notes

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( 26 ) ( 401 ) ( 3,330 )

Proceeds from issuance of common stock in connection with the exercise of options and ESPP 350 1,890 5,573

Repurchase of common stock — — ( 221 )

Net cash provided by (used in) financing activities 14,972 ( 151,142 ) 1,618

Year Ended December 31,

2025 2024 2023

(In thousands)

Proceeds from issuance of common stock in connection with the exercise of options and ESPP 820 350 1,890

Net cash (used in) provided by financing activities ( 45,503 ) 14,972 ( 151,142 )

Effect of foreign exchange rate changes on cash and cash equivalents 1,432 ( 1,314 ) 465

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Supplemental disclosure of non-cash investing and financing activities:

Increase in convertible senior notes, net upon adoption of ASU 2020-06

$ — $ — $ ( 159,407 )

Issuance of Second Lien Notes due 2029 in connection with troubled debt restructuring $ 115,000 $ — $ —

Issuance of preferred stock in connection with troubled debt restructuring 20,664 — —

Issuance of common stock in connection with troubled debt restructuring 49,380 — —

Purchase of property and equipment and intangible assets in accounts payable 264 1,093 2,088

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Right-of-use assets obtained in exchange for finance lease liabilities — — 3,693

Issuance of shares of common stock to settle cash awards — — 17,300

Supplemental disclosure of non-cash financing activities related to acquisitions

Fair value of contingent earn-out in connection with e-bot7 transaction $ — $ — $ 7,362

Fair value of contingent earn-out in connection with Tenfold transaction — — 6,558

Fair value of contingent earn-out in connection with VoiceBase transaction — — 16,067

Issuance of shares of common stock in connection with WildHealth transaction — — 17,675

Fair value of contingent earn-out in connection with WildHealth transaction — — 42,234

See accompanying notes to consolidated financial statements.

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(the “Company”) is a leader in digital customer conversation.

Since 1998, LivePerson has enabled connections between consumers and its customers through digital and artificial intelligence (“AI”)-powered conversations.

The LivePerson Platform powers conversations across each of a brand’s primary digital channels, including mobile apps, mobile and desktop web browsers, short messaging service (“SMS”), social media and third-party consumer messaging platforms.

Since 1998, LivePerson has enabled meaningful connections between consumers and its customers through digital and artificial intelligence (“AI”)-powered conversations.

Our customers’ existing investments in Generative AI and Large Language Models (“LLMs”) are fully compatible with LivePerson’s enterprise-class digital customer conversation platform (the “LivePerson Platform”).

The LivePerson Platform powers conversations across each of a brand’s primary digital channels, including mobile apps, mobile and desktop web browsers, short messaging service, social media and third-party consumer messaging platforms.

Brands can also use the LivePerson Platform to connect conversations across voice and digital channels to give customers additional options and ensure their interactions with brands are integrated no matter where they choose to reach out.

The LivePerson Platform enables what the Company calls “the tango” of humans, LivePerson bots, third-party bots and LLMs, whereby humans act as bot managers, overseeing AI-powered conversations and seamlessly stepping into the flow when a personal touch is needed.

Agents are able to leverage the AI engine (including generative AI capabilities) to surface relevant content, define next-best actions.

The LivePerson Platform enables what the Company calls “the tango” of humans, LivePerson bots, third-party bots and LLMs, in which humans oversee and are assisted by AI and can seamlessly step into conversations as needed.

Agents become highly efficient, as they are able to leverage the AI engine (including generative AI capabilities) to surface relevant content, define next-best actions and take over repetitive transactional work so that the agent can focus on relationship building.

By integrating customer engagement channels, LivePerson’s proprietary AI, and third-party bots and AI, the LivePerson Platform offers brands a comprehensive approach to scaling automations across customer conversations.

Basis of Presentation

In October 2025, the Company effected a 1-for-15 reverse stock split (the “Reverse Stock Split”) of its issued common stock.

As a result, every 15 shares of its issued common stock were combined into one share of common stock.

No fractional shares of the Company’s common stock were issued as a result of the Reverse Stock Split.

Each stockholder who would otherwise have been entitled to receive a fractional share as a result of the Reverse Stock Split received a cash payment equal to the product obtained by multiplying the number of shares of common stock held by such stockholder before the Reverse Stock Split that would otherwise have been exchanged for such fractional share interest by the closing price per share of the common stock as reported on the Nasdaq Global Select Market on October 10, 2025.

As a result of the Reverse Stock Split, proportionate adjustments were made to the per share exercise price and the number of shares issuable upon the exercise of, or notional shares underlying, all outstanding warrants to purchase shares of the Company’s common stock.

In addition, the number of authorized shares of common stock was proportionately reduced.

Proportionate adjustments were also made to (i) the number of shares of common stock available for issuance under the Company’s equity plans, (ii) the number of shares underlying, and the exercise prices of, outstanding equity awards, as applicable, that have been previously granted under such equity plans or other arrangements, (iii) the number of shares or notional shares underlying, and the exercise prices of, the Company’s outstanding warrants, (iv) the number of shares or notional shares underlying, and the conversion prices of, the Company’s outstanding convertible notes and (v) the number of rights outstanding pursuant to the Company’s Tax Benefits Preservation Plan, in each case in accordance with their respective terms.

The Reverse Stock Split did not affect the par value of the common stock or the number of shares of preferred stock that the Company is authorized to issue under its certificate of incorporation.

These notes to the consolidated financial statements and the accompanying consolidated financial statements give retroactive effect to the Reverse Stock Split for all periods presented.

Principles of Consolidation

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All intercompany balances and transactions have been eliminated in consolidation.

Equity Method Investment

The Company utilizes the equity method to account for investments when it possesses the ability to exercise significant influence, but not control, over the operating and financial policies of the investee.

The ability to exercise significant influence is presumed when an investor possesses 20% or more of the voting interests of the investee, and conversely, the ability to exercise significant influence is presumed not to exist when an investor possesses less than 20% of the voting interests of the investee.

These presumptions may be overcome based on specific facts and circumstances that demonstrate an ability to exercise significant influence is restricted or demonstrate an ability to exercise significant influence notwithstanding a smaller voting interest, such as with the Company’s 19.2 % equity method investment in Claire Holdings, Inc.

(“Claire”), due to the Company’s seat on the entity’s board of directors which provides the Company the ability to exert significant influence.

In applying the equity method, the Company records the investment at cost and subsequently increases or decreases the carrying amount of the investment by its proportionate share of the net earnings or losses.

The Company records dividends or other equity distributions as reductions in the carrying value of the investment.

The Company assesses the carrying value of equity method investment on a periodic basis to see if there has been a decline in carrying value that is not temporary.

When deciding whether a decline in carrying value is more than temporary, a number of factors are considered, including the investee’s financial condition and business prospects, as well as the Company’s investment intentions.

The Company’s equity method investment in joint venture was reduced to zero during 2023 based on 2023 losses, and remained at zero on the consolidated balance sheet as of December 31, 2024.

The Company recorded its ownership percentage of losses of Claire in Other (expense) income, net in the amount of $2.3 million for the year ended December 31, 2023.

Variable Interest Entities

The consolidated financial statements include the financial statements of LivePerson, its wholly-owned subsidiaries, and each variable interest entity (“VIE”) for which the Company is the primary beneficiary.

The Company consolidates entities in which it has a controlling financial interest.

All intercompany balances and transactions have been eliminated in consolidation.

The Company evaluates whether an entity in which it has a variable interest is considered a variable interest entity.

VIEs are generally entities that have either a total equity investment that is insufficient to permit the entity to finance its activities without additional subordinated financial support, or whose equity investors lack the characteristics of a controlling financial interest (i.e., ability to make significant decisions through voting rights and a right to receive the expected residual returns of the entity or an obligation to absorb the expected losses of the entity).

Certain prior period amounts have been reclassified to conform to current period presentation.

These reclassifications had no effect on previously reported net loss or equity.

Related Parties

Related parties include entities related to the Company’s directors or main stockholders as well as, in the past, equity method affiliates.

During the year ended December 31, 2023, the Company provided services to Claire Holdings, Inc.

(“Claire”), an equity method affiliate, in exchange for fees through certain commercial arrangements.

These arrangements facilitated Claire’s build out and operations.

LIVEPERSON, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Under the provisions of Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 810, “Consolidation”, an entity consolidates a VIE if it is determined to be the primary beneficiary of the VIE.

The primary beneficiary has both (a) the power to direct the activities of the VIE that most significantly impact the entity’s economic performance, and (b) the obligation to absorb losses or the right to receive benefits from the VIE that could potentially be significant to the VIE.

The Company periodically reassesses whether it is the primary beneficiary of a VIE.

See Note 17 – Variable Interest Entities for the Company’s assessment of VIEs.

In connection with the joint venture agreement relating to the formation of Claire, the Company entered into commercial agreements with Claire, under which the Company agreed to provide custom software development and managed services in exchange for fees governed by the terms and conditions set forth therein.

In accordance with guidance under ASC 606, Claire was considered a customer of the Company.

No services were provided to Claire for the years ended December 31, 2025 or 2024, compared to revenues of $ 3.8 million for the year ended December 31, 2023.

Use of Estimates

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• valuation of the cash-settled and share-settled warrants (together, “Warrants”);

• valuation of features embedded in 2029 Notes;

• valuation of features embedded in the 2029 Notes (as defined below);

• income taxes;

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Income, expenses, and cash flows are translated at weighted average exchange rates prevailing during the fiscal period, and assets and liabilities are translated at fiscal period-end exchange rates.

Resulting translation adjustments are included as a component of accumulated other comprehensive loss in stockholders’ equity.

Foreign exchange transaction gains or losses are included in Other (expense) income, net in the accompanying consolidated statements of operations, and were not material for the years ended December 31, 2024, 2023 and 2022.

Resulting translation adjustments are included as a component of accumulated other comprehensive loss in stockholders’ equity (deficit).

Foreign exchange transaction gains or losses are included in Other income (expense), net in the accompanying consolidated statements of operations, and were not material for the years ended December 31, 2025, 2024 and 2023.

Cash, Cash Equivalents and Restricted Cash

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Restricted cash primarily related to funds held in connection with the divestiture of Kasamba.

See Note 19 – Divestitures for additional information.

Risks associated with cash and cash equivalents are mitigated by banking with creditworthy institutions.

Such balances with any one institution may, at times, be in excess of federally insured amounts.

LIVEPERSON, INC.

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Prepaid software maintenance $ 8,788 $ 9,868

$ 9,868 $ 8,592

VAT receivable 3,279 2,452

Prepaid server maintenance

Prepaid - other

Other prepaid expenses 1,550 2,910

Other current assets 1,483 4,020

Total prepaid expenses and other current assets $ 15,100 $ 19,250

Goodwill represents the excess of the aggregate purchase price over the fair value of net identifiable assets acquired in a business combination.

The Company evaluates goodwill for impairment on an annual basis on October 1, and more frequently whenever events or substantive changes in circumstances indicate that it is more likely than not that the carrying value of a reporting unit exceeds its fair value in accordance with ASC 820, Fair Value Measurements .

In performing the goodwill impairment test, the Company first assesses qualitative factors to determine the existence of impairment.

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In performing the quantitative test, impairment loss is recorded to the extent that the carrying value of the reporting unit exceeds its assessed fair value.

In connection with the annual impairment test completed as of October 1, 2024 using the quantitative “Step 1” assessment, the Company determined the fair value of the reporting unit, using both an income approach and a market approach.

The income approach uses a discounted cash flow model that reflects the Company’s assumptions regarding revenue growth rates, operating margins, risk-adjusted discount rate, economic and market trends and other expectations about the anticipated operating results of the reporting unit.

Under the market approach, the Company estimates the fair value based on market multiples of revenues derived from comparable publicly traded companies with operating characteristics similar to the reporting unit.

During the fourth quarter of 2023, the Company voluntarily changed its annual goodwill testing date from September 30 to October 1.

The Company believes this change of method of applying the accounting principle is preferable, as it more closely aligns the annual impairment testing date with the most current information from the budgeting and strategic planning process and provides management with sufficient time to complete its annual assessment.

The change was applied prospectively and did not have a material impact on the Company.

In the second quarter of 2024, the Company entered into an agreement for and completed the sale of 100% of the equity in WildHealth with a third party.

WildHealth was part of the Business segment and was a separate reporting unit.

Subsequent to WildHealth divestiture, the Company has one reporting unit.

See Note 19 – Divestitures for additional information.

In connection with the annual impairment test performed as of October 1, 2025 and the interim test performed as of December 31, 2025 using the quantitative “Step 1” assessment, the Company determined the fair value of its reporting unit, using both an income approach and a market approach.

The income approach uses a discounted cash flow model that reflects our assumptions regarding revenue growth rates, operating margins, risk-adjusted discount rate, economic and market trends and other expectations about the anticipated operating results of the reporting unit.

Under the market approach, we estimate the fair value based on market multiples of revenues derived from comparable publicly traded companies with operating characteristics similar to the reporting unit.

See Note 5 – Goodwill and Intangible Assets, Net for additional information.

Long-lived Assets

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Intangible assets with estimable useful lives are amortized over their respective estimated useful lives to their estimated residual values, and reviewed for impairment in accordance with ASC 360-10-35, Accounting for Impairment or Disposal of Long-Lived Assets .

Acquired intangible assets consist of identifiable intangible assets, primarily developed technology and customer relationships, resulting from the Company’s acquisitions.

Intangible assets are recorded at fair value on the date of acquisition and are amortized on a straight-line basis over their estimated economic lives, which are generally 3 to 15 years.

The Company’s capitalized patents are stated at cost, which approximates fair value at inception, and are amortized on a straight-line basis over their estimated economic lives, which are generally 12 to 13 years.

See Note 5 – Goodwill and Intangible Assets, Net for additional information.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Property and Equipment, Net

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The Company capitalizes its costs to develop its internal-use software when preliminary development efforts are successfully completed, management has authorized and committed project funding, and it is probable that the project will be completed and the software will be used as intended.

These costs are included in Property and equipment in the Company’s consolidated balance sheets and are amortized on a straight-line basis over the estimated useful life of the related asset, which approximates five years .

These costs are included in Property and equipment in the Company’s

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

consolidated balance sheets and are amortized on a straight-line basis over the estimated useful life of the related asset, which approximates five years .

Costs incurred prior to meeting these criteria, together with costs incurred for training and maintenance, are expensed as incurred.

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See Note 6 – Property and Equipment, Net for additional information.

Prior to testing goodwill for impairment, the Company first tests its long-lived assets for impairment.

The carrying values are adjusted, if necessary, for the result of each impairment test prior to performing the next test.

Recoverability of these assets is measured by a comparison of the carrying amounts to the future undiscounted cash flows the assets are expected to generate from their use and eventual disposition.

If such review indicates that the carrying amount of an asset is not recoverable and the asset's fair value is less than the carrying amount, an impairment charge is recognized.

Convertible Senior Notes

Long-lived assets, such as property and equipment including internal-use software development costs, right of use assets and intangible assets subject to amortization, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable.

Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to estimated undiscounted future cash flows expected to be generated by the asset.

If the carrying amount of an asset exceeds its estimated undiscounted future cash flows, an impairment charge is recognized at the amount by which the carrying amount of the asset exceeds its fair value.

Assets to be disposed of would be separately presented in the consolidated balance sheets and reported at the lower of the carrying amount or fair value less costs to sell, and would no longer be depreciated.

Senior Notes and Warrants

Second Lien Senior Subordinated Secured Notes due 2029

The Company issued Second Lien Notes as part of the troubled debt restructuring in 2025.

They are accounted for as a liability and a troubled debt restructuring gain was recorded in other income (expense), net.

The Company paid third party fees in connection with the transaction, which reduced the gain recorded.

Convertible Notes

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The Company evaluates convertible debt instruments and related transactions at inception to determine if those contracts include embedded features that should be bifurcated as an embedded derivative.

The 2029 Notes issued during the current year are accounted for as a liability.

The First Lien Convertible Senior Notes due 2029 (the “2029 Notes”) issued during 2024 were accounted for as a liability.

The transaction was accounted for as a debt extinguishment and a gain on extinguishment was recorded.

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The Company estimates the fair value of these features on a quarterly basis by assessing the likelihood of triggering events.

The features do not have material values as of December 31, 2024, but they may have value in the future, should the estimates change, with any change in fair value recorded in the Company’s consolidated statements of operations.

The features do not have material values as of December 31, 2025 and 2024, but they may have value in the future, should the estimates change, with any change in fair value recorded in the Company’s consolidated statements of operations.

The Company accounts for warrants as either stock-settled or cash-settled instruments based on an assessment of the specific terms of the warrants and applicable authoritative guidance in Financial Accounting Standards Board ASC 480, Distinguishing Liabilities from Equity and ASC 815-40, Contracts in Entity’s Own Equity.

The assessment considers whether the warrants are freestanding financial instruments pursuant to ASC 480, meet the definition of a liability pursuant to ASC 480, and meet all of the requirements for equity classification under ASC 815-40, including whether the warrants are indexed to the Company’s own stock and whether the events where holders of the warrants could potentially require net cash settlement are within the Company’s control, among other conditions for equity classification.

This assessment, which requires the use of professional judgment, is conducted at the time of warrant issuance.

Warrants that meet all of the criteria for equity classification are recorded as a component of additional paid-in capital at the time of issuance and are not remeasured.

Warrants that do not meet the required criteria for equity classification are classified as liabilities.

The Company adjusts such warrants to fair value at each reporting period until the warrants are exercised or expire.

The Warrants issued by the Company are classified as current liabilities in the consolidated balance sheets and recorded at their fair value.

Changes in fair value are recorded in the Company’s consolidated statements of operations.

See Note 8 – Convertible Senior Notes, Net of Current Portion, Capped Call Transactions, and Warrants and Note 10 – Fair Value Measurements for additional information.

The Company classifies long-lived assets and liabilities to be disposed of as held for sale in the period in which they are available for immediate sale in their present condition and the sale is probable and expected to be completed within one year.

The Company initially measures assets and liabilities held for sale at the lower of their carrying value or fair value less costs to sell.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

See Note 8 – Senior Notes, Capped Call Transactions, Warrants and Preferred Stock and Note 9 – Fair Value Measurements for additional information.

The Company initially measures assets and liabilities held for sale at the lower of their carrying value or fair value less costs to sell.

When the divestiture represents a strategic shift that has (or will have) a major effect on the Company’s operations and financial results, the disposal is presented as a discontinued operation.

Fiscal 2024 Divestiture

In the second quarter of 2024, the Company completed the sale to a third party of 100% of the equity in its WildHealth reporting unit (“WildHealth”), which was created by the acquisition of WildHealth, Inc.

Pursuant to ASC Subtopic 205-20 , Presentation of Financial Statements - Discontinued Operations , the divestiture did not meet the criteria for presentation as a discontinued operation.

WildHealth was part of the Business segment and was a separate reporting unit.

The transaction resulted in a loss of $ 0.6 million which was recognized and presented separately in Loss (gain) on divestiture on the Company’s consolidated statements of operations for the year ended December 31, 2024.

Subsequent to the closing, the Company does not have ongoing involvement or arrangements with WildHealth.

Fiscal 2023 Divestiture

In the first quarter of 2023, the Company completed the sale of Kasamba, Inc.

and Kasamba LTD (together, “Kasamba”) to Ingenio, LLC, for $ 16.9 million which was received in cash upon closing;

and $ 2.6 million deferred payment to be received within a year of the close transaction date.

Cash of $ 2.0 million was classified as Cash and cash equivalents on the consolidated balance sheet as of December 31, 2024 and was released in June 2024.

The transaction resulted in a gain of $ 17.6 million, which was presented separately in Loss (gain) on divestiture on the Company’s consolidated statements of operations during the year ended December 31, 2023.

During the year ended December 31, 2024, the Company recognized $ 1.8 million of post-closing adjustments pertaining to the final agreement amount which is recorded in General and administrative expenses in the consolidated statements of operations.

The Company expenses the cost of advertising and promoting its services as incurred in Sales and marketing expense on the consolidated statements of operations.

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The valuation of these RSUs is based solely on the Company’s stock price on the date of grant, and the corresponding compensation expense is amortized on a straight-line basis.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Performance-Vesting Restricted Stock Units (“PRSUs”) granted are generally subject to both a service-based vesting condition and a performance-based vesting condition.

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See Note 11 – Stockholders’ Equity for additional information.

The Company determines if an arrangement is or contains a lease at contract inception.

In certain of the Company’s lease arrangements, judgment is required in determining if a contract contains a lease.

For these arrangements, there is judgment in evaluating if the arrangement involves an identified asset that is physically distinct or whether the Company has the right to substantially all of the capacity of an identified asset that is not physically distinct.

In arrangements that involve an identified asset, there is also judgment in evaluating if the Company has the right to direct the use of that asset.

Operating leases are recorded in the consolidated balance sheets.

Right-of-use (“ROU”) assets and lease liabilities are measured at the lease commencement date based on the present value of the remaining lease payments over the lease term, determined using the discount rate for the lease at the commencement date.

Because the rate implicit in the leases is not readily determinable, the Company uses its incremental borrowing rate as the discount rate, which approximates the interest rate at which the Company could borrow on a collateralized basis with similar terms and payments and in similar economic environments.

Optional periods to extend the lease, including by not exercising a termination option, are included in the lease term when it is reasonably certain that the option will be exercised.

The Company accounts for lease and non-lease components, principally common area maintenance for the facilities leases, as a single lease component.

Variable costs, such as maintenance and utilities based on actual usage, are not included in the measurement of ROU assets and lease liabilities but are expensed when the event determining the amount of variable consideration to be paid occurs.

The lease expense is recognized on a straight-line basis over the lease term.

The Company’s real estate leases asset class with an initial expected term of 12 months or less (short-term) is not accounted for on the consolidated balance sheets.

The Company’s finance leases are recorded in Property and equipment, net in the consolidated

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

balance sheets.

For finance leases, interest expense on lease liabilities is recognized based on the incremental borrowing rate and the ROU assets are amortized on a straight-line basis over the shorter of the lease term or the useful life of the ROU assets.

The Company has non-cancelable operating and finance leases for its corporate offices and other service agreements.

Its leases have remaining lease terms of approximately 1 year, some of which include options to extend.

The Company uses the non-cancelable lease term when recognizing the right-of-use (“ROU”) assets and lease liabilities, unless it is reasonably certain that a renewal or termination option will be exercised.

Lease costs were $ 9.4 million, $ 10.6 million and $ 15.3 million for the years ended December 31, 2025, 2024 and 2023, respectively.

Weighted average remaining lease terms for operating leases were 1.1 years and 0.3 years as of December 31, 2025 and 2024, respectively, and for finance leases were 0.0 years and 0.8 years as of December 31, 2025 and 2024, respectively.

The weighted average discount rates were 7 % for operating and finance leases as of both December 31, 2025 and 2024.

Operating and finance ROU assets, and operating and finance lease liabilities were not material as of December 31, 2025 and 2024, and f uture minimum lease payments under non-cancelable operating and finance leases are not material.

Income taxes are accounted for under the asset and liability method.

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Recently Adopted Accounting Pronouncements

In November 2023, the FASB issued Accounting Standards Update (“ASU”) 2023-07, Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosures , which expands annual and interim disclosure requirements for reportable segments, primarily through enhanced disclosures about significant segment expenses.

The updated standard is effective for annual periods beginning after December 15, 2023.

The Company adopted this guidance in the fourth quarter of 2024, which did not have a material impact on the Company’s consolidated financial statements and related disclosures.

In June 2022, the FASB issued ASU 2022-03, Fair Value Measurement (Topic 820):

Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions to clarify that a contractual restriction on the sale of an equity security is not considered part of a unit of account of the equity security, and, therefore, is not considered in measuring fair value.

The amendments also clarify that an entity cannot, as a separate unit of account, recognize and measure a contractual sale restriction.

The amendments also require the following disclosures for equity securities subject to the contractual sale restrictions.

The fair value of equity securities subject to the contractual sale restrictions reflected on the balance sheet.

The nature and remaining duration of the restriction(s).

The circumstances that could cause a lapse in the restriction(s).

This guidance was effective for fiscal years beginning after December 15, 2023, and interim periods within those financial years.

The Company adopted this guidance on January 1, 2024, which did not have a material impact on the Company’s consolidated financial statements and related disclosures.

Recently Issued Accounting Pronouncements

In November 2024, the FASB issued ASU 2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40) which seeks to expand disclosures about a public entity’s expenses, including more detailed information about the types of expenses (including purchases of inventory, employee compensation, depreciation, amortization, and depletion) in commonly presented expense captions (such as cost of sales, sales and marketing, general and administrative, and research and development).

The amendments in this update are effective for annual periods beginning after December 15, 2026, and interim periods beginning after December 15, 2027.

Early adoption is permitted for both interim and annual financial statements that have not yet been issued or made available for issuance.

ASU 2024-03 should be applied

In December 2023, the FASB issued Accounting Standards Update (“ASU”) 2023-09, Income Taxes (Topic 740):

Improvements to Income Tax Disclosures, which modifies the rules on income tax disclosures to require entities to disclose (1) specific categories in the rate reconciliation, (2) the income or loss from continuing operations before income tax expense or benefit (separated between domestic and foreign) and (3) income tax expense or benefit from continuing operations (separated by federal, state and foreign).

ASU 2023-09 also requires entities to disclose their income tax payments to international, federal, state and local jurisdictions, among other changes.

The guidance is effective for annual periods beginning after December 15, 2024.

The Company adopted this guidance in the fourth quarter of 2025 on a prospective basis, with disclosures related to the current year presented in accordance with the new standard.

Adoption of the guidance did not have a material impact on the Company’s consolidated financial statements;

however the disclosures in Note 14 - Income Taxes have been expanded.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

retrospectively.

Recently Issued Accounting Pronouncements

In December 2025, the FASB issued ASU 2025-12, Codification Improvements, which seeks to make incremental improvements to GAAP on a broad range of topics arising from technical corrections, unintended application of guidance, clarifications and other minor improvements.

The guidance is effective for interim reporting periods within annual reporting periods beginning after December 15, 2026, with early adoption permitted, and can be applied on an issue-by-issue basis, prospectively or retrospectively.

The Company is currently evaluating the potential impact of adopting this new guidance on its consolidated financial statements and related disclosures.

In March 2024, the FASB issued ASU 2024-01, Compensation—Stock Compensation (Topic 718):

Scope Application of Profits Interest and Similar Awards , which provides illustrative guidance to help entities determine whether profits interest and similar awards should be accounted for as share-based payment arrangements within the scope of ASC 718, Compensation—Stock Compensation .

Specifically, the amendments in ASU 2024-01 add an illustrative example that includes four fact patterns to demonstrate how an entity should apply the scope guidance in paragraph ASC 718-10-15-3 to determine whether a profits interest award should be accounted for in accordance with ASU 718.

The guidance in ASU 2024-01 applies to all entities that issue profits interest awards as compensation to employees or non-employees in exchange for goods or services.

The amendments in this update are effective for annual periods beginning after December 15, 2024, and interim periods within those annual periods.

In December 2025, the FASB issued ASU 2025-11, Interim Reporting (Topic 270) - Narrow-Scope Improvements which improves the navigability of the required interim disclosures and clarifies when that guidance is applicable.

The guidance is effective for interim reporting periods within annual reporting periods beginning after December 15, 2027, with early adoption permitted, and can be applied prospectively or retrospectively.

The Company is currently evaluating the potential impact of adopting this new guidance on its consolidated financial statements and related disclosures.

In September 2025, the FASB issued ASU 2025-06, Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350-40):

Targeted Improvements to the Accounting for Internal-Use Software, which removes all references to project stages related to internal-use software development.

An entity is required to start capitalizing software costs when both of the following occur:

(1) management has authorized and committed to funding the software project and (2) it is probable that the project will be completed and the software will be used to perform the function intended.

The guidance is effective for annual periods beginning after December 15, 2027, with early adoption permitted.

The Company is currently evaluating the potential impact of adopting this new guidance on its consolidated financial statements and related disclosures.

In July 2025, the FASB issued ASU 2025-05, Financial Instruments - Credit Losses (Top 326):

Measurement of Credit Losses for Accounts Receivable and Contract Assets , which provides all entities with a practical expedient when estimating expected credit losses for current accounts receivable and current contract assets arising from certain transactions.

In developing reasonable and supportable forecasts as part of estimating expected credit losses, all entities may elect a practical expedient that assumes that current conditions as of the balance sheet date do not change for the remaining life of the asset.

The guidance is effective for annual periods beginning after December 15, 2025, with early adoption permitted.

The Company is currently evaluating the potential impact of adopting this new guidance on its consolidated financial statements and related disclosures.

In November 2024, the FASB issued ASU 2024-04, Debt - Debt with Conversion and Other Options (Subtopic 470-20):

Induced Conversions of Convertible Debt Instruments , which seeks to clarify the requirements for determining whether certain settlements of convertible debt instruments should be accounted for as an induced conversion.

The amendments in this update are effective for annual periods beginning after December 15, 2025, and early adoption is permitted.

ASU 2024-04 can be applied prospectively or retrospectively.

The Company is currently evaluating the potential impact of adopting this new guidance on its consolidated financial statements and related disclosures.

In November 2024, the FASB issued ASU 2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40), which seeks to expand disclosures about a public entity’s expenses, including more detailed information about the types of expenses (including purchases of inventory, employee compensation, depreciation, amortization, and depletion) in commonly presented expense captions (such as cost of sales, sales and marketing, general and administrative, and research and development).

The amendments in this update are effective for annual periods beginning after December 15, 2026, and interim periods beginning after December 15, 2027.

Early adoption is permitted for both interim and annual financial statements that have not yet been issued or made available for issuance.

ASU 2024-01 should be applied either retrospectively or prospectively.

The Company does not expect this standard to have a material impact on its consolidated financial statements and related disclosures.

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740):

Improvements to Income Tax Disclosures , which modifies the rules on income tax disclosures to require entities to disclose (1) specific categories in the rate reconciliation, (2) the income or loss from continuing operations before income tax expense or benefit (separated between domestic and foreign) and (3) income tax expense or benefit from continuing operations (separated by federal, state and foreign).

ASU 2023-09 also requires entities to disclose their income tax payments to international, federal, state and local jurisdictions, among other changes.

The guidance is effective for annual periods beginning after December 15, 2024.

Early adoption is permitted for annual financial statements that have not yet been issued or made available for issuance.

ASU 2023-09 should be applied on a prospective basis, but retrospective application is permitted.

ASU 2024-03 should be applied retrospectively.

The Company is currently evaluating the potential impact of adopting this new guidance on its consolidated financial statements and related disclosures.

In August 2023, the FASB issued ASU 2023-05, Business Combinations—Joint Venture Formations (Subtopic 805-60):

Recognition and Initial Measurement , which addresses the accounting for contributions made to a joint venture, upon formation, in a joint venture’s separate financial statements.

The amendments require certain joint ventures to apply a new basis of accounting upon formation by recognizing and initially measuring most of their assets and liabilities at fair value.

The objectives of the amendments are to provide decision-useful information to investors and other allocators of capital in a joint venture’s financial statements and also to reduce diversity in practice.

ASU 2023-05 is effective for both public and private joint venture entities with a formation date on or after January 1, 2025.

Early adoption is permitted.

Entities may elect to apply the guidance retrospectively to joint ventures with a formation date prior to January 1, 2025.

The Company does not expect the adoption of this standard to have a material impact on its consolidated financial statements and related disclosures.

Revenue Recognition

The majority of the Company’s revenue is generated from hosted service revenues, including platform access, usage and related professional services.

The Company’s revenue is generated from hosted service revenues, including platform access, usage and related professional services.

Revenues are recognized when control of these services is transferred to the Company’s customers, in an amount that reflects the consideration the Company expects to be entitled to in exchange for those services.

The Company determines revenue recognition through the following steps:

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

• identification of the contract, or contracts, with a customer;

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None of the Company’s contracts contain a significant financing component.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Hosted Services Revenue

Hosted services revenue is reported at the amount that reflects the ultimate consideration expected to be received and primarily consist of fees that provide customers access to the LivePerson Platform, the Company’s enterprise-class digital customer conversation platform.

Hosted services revenue is reported at the amount that reflects the ultimate consideration expected to be received and primarily consists of fees that provide customers access to the LivePerson Platform, the Company’s enterprise-class digital customer conversation platform.

The Company has determined such access represents a stand-ready service provided continually throughout the contract term.

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Subscription contracts are generally one year or longer in length, billed monthly, quarterly or annually in advance.

There is no significant variable consideration related to these arrangements.

Professional Services Revenue

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This sale eliminated the entire Consumer segment, as a result of which revenue is presented within a single consolidated segment.

Hosted services included $ 7.1 million and $ 37.1 million for the years ended December 31, 2023 and 2022, respectively, relating to Kasamba.

Hosted services included $ 7.1 million for the year ended December 31, 2023 relating to Kasamba.

Remaining Performance Obligation

As of December 31, 2024, the aggregate amount of the total transaction price allocated in contracts with original duration of one year or greater to the remaining performance obligations was $ 232.3 million.

Approximately 96 % of the Company’s remaining performance obligations is expected to be recognized during the next 24 months, with the balance recognized thereafter.

The aggregate balance of unsatisfied performance obligations represents contracted revenue that has not yet been recognized, and does not include contract amounts that are cancellable by the customer, amounts associated with optional renewal periods, and any amounts related to performance obligations, which are billed and recognized as they are delivered.

The Company has elected the optional exemption, which allows for the exclusion of the amounts for remaining performance obligations that are part of contracts with an original expected duration of less than one year.

Such remaining performance obligations represent unsatisfied or partially unsatisfied performance obligations pursuant to ASC 606, Revenue from Contracts with Customers .

As of December 31, 2025, the aggregate amount of the transaction price allocated to remaining performance obligations was $ 175.6 million.

Approximately 98 % of the Company’s remaining performance obligations are expected to be recognized

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

during the next 24 months, with the balance recognized thereafter.

The disclosed amount represents contracted revenue that has not yet been recognized and does not include contract amounts that are cancelable by the customer, amounts associated with optional renewal periods, and amounts related to performance obligations that are billed and recognized as performed.

Contracts with Multiple Performance Obligations

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Judgment is required to determine the SSP for each distinct performance obligation.

The Company determines the SSP based on its overall pricing objectives, taking into

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

consideration market conditions and other factors, including the value of its contracts, product offerings and the cloud applications sold.

The Company determines SSP based on observable prices at which the performance obligations are sold separately.

When not directly observable, SSP is estimated using an adjusted market assessment approach, which considers market conditions and other entity-specific factors.

Revenue by Geographic Location

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Information about Contract Balances

The Company defers all incremental commission costs to obtain the contract.

These contract acquisition costs, which are comprised of prepaid sales commissions, have balances at December 31, 2024 and 2023 of $ 33.6 million and $ 37.4 million, respectively.

The Company defers all incremental commission costs incurred to obtain the contract.

These contract acquisition costs, which are comprised of sales commissions, have balances at December 31, 2025 and 2024 of $ 24.0 million and $ 33.6 million, respectively.

The Company amortizes these costs over the related period of benefit using the customer expected life that the Company determined to be four years , which is consistent with the transfer to the customer of the services to which the asset relates.

Commissions earned for renewal contracts are amortized over the contractual term of the renewals.

The Company classifies contract acquisition costs as long-term.

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The opening and closing balances of the Company’s contract acquisition costs, net, and deferred revenues are as follows:

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Contract Acquisition Costs (Non-current) Deferred Revenue (Current) Deferred Revenue

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Balance as of December 31, 2023 $ 37,354 $ 81,858 $ 183

$ 43,804 $ 84,494 $ 174

(Decrease) increase, net ( 3,795 ) ( 23,878 ) 140

Balance as of December 31, 2024 $ 33,559 $ 57,980 $ 323

(Decrease) increase, net

( 3,795 ) ( 23,878 ) 140

Decrease, net ( 9,608 ) ( 3,685 ) ( 233 )

Balance as of December 31, 2025 $ 23,951 $ 54,295 $ 90

$ 33,559 $ 57,980 $ 323

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The decrease in deferred revenue during the year ended December 31, 2024 was primarily driven by changes in customer renewal patterns and contract structures, including the timing of renewals and shifts in service commitments.

Amortization expense in connection with contract acquisition costs was $ 18.3 million, $ 27.6 million and $ 36.4 million for the years ended December 31, 2024, 2023 and 2022, respectively, and was included in Cost of revenue in the consolidated statements of operations.

The changes in deferred revenue during both periods presented were primarily driven by changes in customer renewal patterns and contract structures, including the timing of renewals and shifts in service commitments.

Amortization expense in connection with contract acquisition cost was $ 17.3 million, $ 18.3 million and $ 27.6 million for the years ended December 31, 2025, 2024 and 2023, respectively, and was included in Sales and marketing expense in the consolidated statements of operations.

Accounts Receivable, Net

Accounts receivable are recorded at the invoiced amount and do not bear interest.

The allowance for credit losses is the Company’s estimat e of the amount of expected credit losses in the Company’s existing accounts receivable, based on both specific and general reserves.

The allowance for credit losses is the Company’s best estimate of the amount of expected credit losses in the Company’s existing accounts receivable, based on both specific and general reserves.

The Company maintains general reserves on a collective basis by considering factors such as historical experience, creditworthiness, the age of the trade receivable balances, and current econom ic conditions.

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The Company does not have any off-balance sheet credit exposure related to its customers.

The activity in the allowance for credit loss as of the dates presented is as follows:

The activity in the allowance for credit losses as of the dates presented is as follows:

2025 2024 2023

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Balance, end of year $ 4,451 $ 8,627 $ 9,290

LIVEPERSON, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Net Loss Per Share

Basic loss per share is computed by dividing net loss by the weighted-average number of shares of common stock outstanding during the period.

Basic net loss per share is computed by dividing net loss by the weighted-average number of shares of common stock outstanding during the period.

Diluted net loss per share is computed by giving effect to all potentially dilutive common stock equivalents outstanding for the period.

For purposes of this calculation, stock options, restricted stock units, share-settled warrants, 0.750 % Convertible Senior Notes due 2024 (the “2024 Notes”), and 0 % Convertible Senior Notes due 2026 (the “2026 Notes”) are considered to be common stock equivalents but are excluded from the calculation of diluted net loss per share when including them has an anti-dilutive effect.

For diluted net loss per share, the numerator is decreased to reverse the gain on troubled debt restructuring associated with the exchange transaction of the 0% Convertible Senior Notes due 2026 (the “2026 Notes”) and the denominator is increased to include the number of the shares issuable upon the conversion of the 2026 Notes.

For purposes of this calculation, stock options, restricted stock units, 0.750 % Convertible Senior Notes due 2024 (the “2024 Notes”), and 0 % Convertible Senior Notes due 2026 (the “2026 Notes”) are considered to be common stock equivalents but are excluded from the calculation of diluted net loss per share when including them has an anti-dilutive effect.

The share-settled warrants and cash-settled warrants are not participating securities.

As the average market price of the Company’s common stock over the year ended December 31, 2025 exceeds the warrants’ exercise price, the share-settled warrants are included in diluted EPS.

For diluted net loss per share, the numerator is adjusted for any changes in fair value and the denominator is increased to include the number of potential exercise of warrants.

The cash-settled warrants are not included in the calculation of diluted EPS due to the cash-settlement requirement.

The Company uses the treasury stock method for stock options, restricted stock units, and share-settled warrants, and uses the if-converted method for convertible debt.

As the average market price of the Company ’ s common stock is below the conversion price of the Company ’ s 2024 Notes and 2026 Notes, the impact of conversion is anti-dilutive.

See Note 8 – Convertible Senior Notes, Net of Current Portion, Capped Call Transactions, and Warrants for additional information about the 2024 Notes, 2026 Notes and First Lien Convertible Senior Notes due 2029 (the “2029 Notes” and together with the 2024 Notes and the 2026 Notes, the “Notes”).

As the average market price of the Company ’ s common stock is below the conversion price of the Company ’ s 2024 Notes, the impact of conversion is anti-dilutive.

See Note 8 – Senior Notes, Capped Call Transactions, Warrants and Preferred Stock for additional information about the 2024 Notes, 2026 Notes, 2029 Notes, and Second Lien Senior Subordinated Secured Notes due 2029 (the “Second Lien Notes”) and together with the 2024 Notes, the 2026 Notes, and the 2029 Notes, the “Notes”).

Reconc iliation of shares used in calculating basic and diluted net loss per share for the years ended December 31, 2025, 2024, and 2023, were as follows:

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(In thousands, except number of shares and per share amounts)

$ ( 134,273 ) $ ( 100,435 ) $ ( 225,747 )

Weighted average number of shares outstanding, basic and diluted 88,715,161 78,593,274 74,509,404

Net loss per share, basic and diluted $ ( 1.51 ) $ ( 1.28 ) $ ( 3.03 )

Net loss $ ( 67,233 ) $ ( 134,273 ) $ ( 100,435 )

Gain on troubled debt restructuring, net of amortization ( 26,670 ) — —

Gain on change in fair value of share-settled warrants ( 13,184 ) — —

Net loss available to shareholders for diluted net loss per share $ ( 107,087 ) $ ( 134,273 ) $ ( 100,435 )

Weighted average number of shares outstanding used to compute basic net loss per share 7,843,700 5,914,344 5,239,552

Conversion option of the 2026 Notes 228,932 — —

Impact of potential exercise of warrants 568,098 — —

Weighted average number of shares outstanding used to compute diluted net loss per share 8,640,730 5,914,344 5,239,552

Net loss per share, basic $ ( 8.57 ) $ ( 22.70 ) $ ( 19.17 )

Net loss per share, diluted $ ( 12.39 ) $ ( 22.70 ) $ ( 19.17 )

The securities listed below were excluded from the computation of diluted net loss per share for all periods presented, as their effect would have been anti-dilutive:

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Shares subject to outstanding common stock options and ESPP 186,369 180,824 212,422

2,712,360 3,186,322 4,459,324

Restricted stock units 819,875 834,792 337,603

Earn-outs — — 12,049,211

Convertible preferred stock 110,257 — —

Conversion option of the 2024 Notes — 20,245 125,257

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Share-settled warrants — 705,412 —

10,581,178 — —

Total 1,116,501 2,120,046 1,133,901

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Significant expenses within loss from operations, as well as within net loss are separately presented on the Company’s consolidated statements of operations.

Other segment items within net loss include Interest expense, Interest income, Gain on debt extinguishment, Other (expense) income, net, and Provision for income taxes.

The Company was previously organized into two operating segments for purposes of making operating decisions and assessing performance:

the Business segment and the Consumer segment.

During the first quarter of 2023, the Consumer segment (consisting solely of the Kasamba business) was divested.

As a result, the divestiture of Kasamba eliminated the Company’s Consumer segment.

See Note 19 – Divestitures for additional information.

Other segment items within net loss include Interest expense, Interest income, Gain on troubled debt restructuring, Gain on debt extinguishment, Other income (expense), net, and Provision for income taxes.

Geographic Information

The Company is domiciled in the United States and has international operations around the globe.

The following table presents the Company’s long-lived assets by geographic region as of the dates set forth below:

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Goodwill represents the excess of the aggregate purchase price over the fair value of net identifiable assets acquired in a business combination.

Goodwill is not amortized, but is tested for impairment at the reporting unit level using either a qualitative or quantitative assessment on an annual basis, or whenever events or changes in circumstances indicate that the carrying value may not be recoverable.

In the valuation of goodwill, management must make assumptions regarding estimated future cash flows to be derived from the Company’s business.

If these estimates or their related assumptions change in the future, the Company may be required to record impairment for these assets.

The Company evaluates goodwill for impairment on an annual basis, and more frequently whenever events or substantive changes in circumstances indicate that it is more likely than not that the carrying value of a reporting unit exceeds its fair value.

Assumptions used in an impairment test require significant judgment, therefore, they are subject to change based on facts and circumstances present at each date goodwill is evaluated for impairment.

In connection with the annual impairment test completed as of October 1, 2025, using the quantitative “Step 1” assessment, the Company determined the fair value of its reporting unit using both an income approach and a market approach.

The Company applied an equal weighting to the value conclusions resulting from the two employed approaches, because there was sufficient information to estimate the fair value of the reporting unit under both methods.

The estimated fair value of the reporting unit is a Level 3 measure in the fair value hierarchy.

The Company’s projections were used as a key input into the annual goodwill impairment test performed.

The discount rate used in the income approach model was 12.5%.

The fair value determination using a market approach requires management to make significant assumptions related to marketplace multiples from within a peer public company group.

As a result of the October 1, 2025 impairment test, no impairment was identified, as the fair value of the Company’s reporting unit exceeded its carrying value.

During the fourth quarter of 2025, the Company performed its quarterly triggering event assessment and concluded that a triggering event was present due to the decrease in the stock price.

As a result, the Company performed an interim impairment test as of December 31, 2025 using the quantitative “Step 1” assessment.

The Company determined the fair value of its reporting unit using both an income approach and a market approach.

The estimated fair value of the reporting unit is a Level 3 measure in the fair value hierarchy.

The fair value determination using an income approach requires management to make significant estimates and assumptions related to forecasts of future revenues, EBITDA and the discount rate.

The Company’s projections were used as a key input into the goodwill impairment test performed.

The discount rate used in the income approach model was 13.5%, which included a 1% risk premium.

The fair value determination using a market approach requires management to make significant assumptions related to marketplace multiples from within a peer public company group.

As a result of this impairment test, the Company recorded a non-cash impairment charge of $ 41.6 million in the consolidated statements of operations during the year ended December 31, 2025, to recognize the impairment of goodwill in the Company’s one reporting unit.

If, in future periods, the financial performance of the reporting unit does not meet expectations, or a prolonged decline occurs in the market place of our common stock, it may cause a material change in the results of the impairment assessment and result in future impairment to goodwill.

The changes in the carrying amount of goodwill for the years ended December 31, 2025 and 2024 are as follows:

Accumulated Impairment

Goodwill, net

(In thousands)

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Goodwill impairment ( 60,551 )

— ( 11,895 ) ( 11,895 )

Foreign exchange adjustment ( 2,526 )

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Goodwill impairment ( 41,595 )

— ( 60,551 ) ( 60,551 )

Foreign exchange adjustment 3,943

Balance as of December 31, 2025 (1)

LIVEPERSON, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(1) The accumulated impairment balance was $ 11.9 million , $ 72.4 million and $ 114.0 million as of December 31, 2023, 2024 and 2025, respectively.

In connection with the annual impairment test completed on October 1, 2024, using the quantitative “Step 1” assessment, the Company determined the fair value of its reporting unit using both an income approach and a market approach.

Estimated fair values of reporting units are Level 3 measures in the fair value hierarchy.

The estimated fair value of the reporting unit is a Level 3 measure in the fair value hierarchy.

The fair value determination using an income approach requires management to make significant estimates and assumptions related to forecasts of future revenues, EBITDA and the discount rate.

The discount rate used in the income approach model was 13%.

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The revised projections were used as a key input into the annual goodwill impairment test performed in the fourth quarter of 2024.

As a result of this impairment test, the Company recorded a non-cash impairment charge of $ 56.9 million in the consolidated statements of operations during the year ended December 31, 2024, to recognize the impairment of goodwill in the Company’s one reporting unit.

As a result, the Company recorded a non-cash impairment charge of $ 56.9 million in the consolidated statements of operations during the year ended December 31, 2024, to recognize the impairment of goodwill in the Company’s one reporting unit.

In addition, during the first quarter of 2024, the Company recorded a non-cash impairment charge of $ 3.6 million in the consolidated statements of operations, to recognize a full impairment of goodwill associated with its WildHealth reporting unit, which was sold during the second quarter of fiscal 2024.

As a result of the Company’s annual goodwill impairment test in the third quarter of 2023, the Company recorded a non-cash impairment charge of $ 11.9 million in the consolidated statements of operations during the year ended December 31, 2023, to recognize the impairment of goodwill in the WildHealth reporting unit.

There were no impairments in the Company’s Business reporting unit during the year ended December 31, 2023, as the fair value of this reporting unit substantially exceeded its carrying value.

No impairment losses were recorded during the fiscal year ended December 31, 2022.

LIVEPERSON, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Intangible Assets, Net

Intangible assets, net are summarized as follows as of the dates presented:

December 31, 2024

Amount Accumulated

Amortization Net Carrying Amount Weighted

(In thousands) (In years)

Amortizing intangible assets:

Patents $ 17,609 $ ( 2,539 ) $ 15,070 12.7

Total $ 17,609 $ ( 2,539 ) $ 15,070

December 31, 2023

Amount Accumulated

Amortization Net Carrying Amount Weighted

(In thousands) (In years)

Amortizing intangible assets:

Technology $ 94,549 $ ( 60,465 ) $ 34,084 5.0

Customer relationships 32,025 ( 19,542 ) 12,483 10.0

Patents 15,350 ( 1,916 ) 13,434 12.9

Trademarks 1,400 ( 707 ) 693 5.0

Trade names 1,044 ( 672 ) 372 2.8

Other 914 ( 355 ) 559 4.1

Total $ 145,282 $ ( 83,657 ) $ 61,625

Amortization expense is calculated over the estimated useful life of the asset.

Aggregate amortization expense for purchased intangible assets and finance leases, net was $ 12.0 million, $ 22.2 million, and $ 22.1 million for the years ended December 31, 2024, 2023, and 2022, respectively, and $ 9.2 million, $ 18.7 million, and $ 18.4 million, respectively, of this amortization was included in Cost of revenue in the consolidated statements of operations.

Intangible assets are tested for impairment whenever events or changes in circumstances indicate that the carrying amount of the asset or asset group may not be recoverable and the carrying amount of the asset exceeds the estimated expected undiscounted future cash flows that are expected to result from the use of the asset.

In connection with the Company’s annual budget process in the fourth quarter of 2024, management completed a comprehensive review of the Company’s operations, which resulted in reduced estimated future cash flows.

The revised projections were used as a key input into the annual impairment test performed in the fourth quarter of 2024.

As a result of this impairment test, t he Company recognized a non-cash impairment charge of $ 35.2 million included in Impairment of intangibles and other assets in the consolidated statements of operations.

Legal costs incurred to establish patents are capitalized.

When patents are issued, capitalized costs are amortized on the straight-line method over the related patent term.

We review our patent portfolio on a periodic basis to determine whether events and circumstances would indicate impairment.

In the event a patent is abandoned, the net book value of the patent is written off.

In connection with the Company’s review process in the fourth quarter of 2025, management completed a comprehensive review of t he Company operations and decided to cease pursuit of a portion of its pending patents.

As a result, the Company recorded a non-cash impairment charge of $ 2.1 million, which was classified as Impairment of intangibles and other assets in the consolidated statements of operations during the year ended December 31, 2025.

The changes in the carrying amount of intangible assets, net for the years ended December 31, 2025 and 2024 are as follows:

December 31, 2025 December 31, 2024

(In thousands)

Gross carrying amount $ 16,639 $ 17,609

Accumulated amortization ( 3,230 ) ( 2,539 )

Net carrying amount $ 13,409 $ 15,070

Weighted average amortization period 11.0 years 12.7 years

Amortization expense is recognized over the estimated useful life of the asset.

Aggregate amortization expense for intangible assets and finance leases, net was $ 0.7 million, $ 12.0 million, and $ 22.2 million for the years ended December 31, 2025, 2024, and 2023, respectively.

As a result of the impairment test in 2024, t he Company recognized a non-cash impairment charge of $ 35.2 million included in Impairment of intangibles and other assets in the consolidated statements of operations.

The fair value was determined using a combination of income and market approach.

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developed technology in the amount of $ 23.7 million, customer relationships in the amount of $ 11.0 million and trademarks in the amount of $ 0.5 million.

During the first quarter of 2024, the Company recognized a non-cash impairment charge related to WildHealth of $ 2.2 million included in Impairment of intangibles and other assets in the consolidated statements of operations.

During the year ended December 31, 2023, t he Company recognized a non-cash impairment charge of $ 3.0 million included in Impairment of intangibles and other assets in the consolidated statements of operations related to developed technology associated with WildHealth.

There were no impairment losses during the year ended December 31, 2022.

LIVEPERSON, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

During the year ended December 31, 2023, the Company recognized a non-cash impairment charge of $ 3.0 million included in Impairment of intangibles and other assets in the consolidated statements of operations related to developed technology associated with WildHealth.

As of December 31, 2025, estimated annual amortization expense for the next five years and thereafter is as follows:

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Property and Equipment, Net

Property and equipment are stated at cost, net of accumulated depreciation, and amortization.

Depreciation and amortization are calculated using the straight-line method over the estimated useful lives of the related assets.

Leasehold improvements are amortized using the straight-line method over the shorter of the lease term or the estimated useful life of the asset.

The Company reviews the estimated useful lives of its property and equipment on an annual basis.

The following table presents the detail of property and equipment, net as of the dates presented:

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Total Property and equipment, net $ 90,389 $ 100,557

There were no impairment charges related to property and equipment during the year ended December 31, 2025.

The Company recorded non-cash impairment charges of $ 9.5 million and $ 5.0 million related to internal-use software development costs during the years ended December 31, 2024 and 2023, respectively .

The impairment charges were included in Impairment of intangibles and other assets in the consolidated statements of operations for the years ended December 31, 2024 and 2023 and pertained to internal projects that were discontinued and had no future economic benefit.

There were no impairment losses during the year ended December 31, 2022.

The impairment charges were included in Impairment of intangibles and other assets in the consolidated statements of operations for the years ended December 31, 2024 and 2023 and pertained to internal-use software that was discontinued and had no future economic benefit.

Expenditures for routine maintenance and repairs are charged to operating expense as incurred.

Major renewals and improvements are capitalized and depreciated over their estimated useful lives.

The following table presents total depreciation included in the consolidated statements of operations for the periods presented:

The following table presents total depreciation and amortization included in the consolidated statements of operations for the periods presented:

LIVEPERSON, INC.

4 unchanged sentences

Cost of revenue $ 5,377 $ 6,792 $ 8,072

$ 6,792 $ 8,072 $ 9,763

Sales and marketing 2,423 3,138 3,103

1 unchanged sentence

Product development 13,940 20,133 20,929

20,133 20,929 19,618

Total depreciation expense

$ 30,310 $ 32,557 $ 32,284

Total depreciation and amortization $ 21,975 $ 30,310 $ 32,557

Accrued Expenses and Other Current Liabilities

4 unchanged sentences

Warrants liability (Note 9) 2,999 17,498

Finance lease liabilities (Note 9)

Accrued interest 1,122 998

Restructuring (Note 12) 1,387 3,028

3 unchanged sentences

Total accrued expenses and other current liabilities $ 38,700 $ 66,582

Convertible Senior Notes, Net of Current Portion, Capped Call Transactions, and Warrants

Senior Notes, Capped Call Transactions, Warrants and Preferred Stock

Convertible Senior Notes due 2024 and Capped Calls

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A corresponding portion of the 2024 capped calls were terminated in connection following the Note Repurchases as required by their terms for minimal consideration.

The remaining 2024 Notes matured on March 1, 2024, on which date the Company repaid in full the outstanding $ 72.5 million in aggregate principal amount.

The remaining 2024 Notes matured on March 1, 2024, on which date the Company repaid in full the outstanding $ 72.5 million in aggregate principal amount and the associated 2024 capped calls expired unexercised.

LIVEPERSON, INC.

1 unchanged sentence

Convertible Senior Notes due 2026 and Capped Calls

In December 2020, the Company issued $ 517.5 million aggregate principal amount of its 2026 Notes in a private placement, of which $ 361.2 million aggregate principal amount was outstanding as of December 31, 2024.

The 2026 Notes are senior unsecured obligations of the Company.

In December 2020, the Company issued $ 517.5 million aggregate principal amount of its 2026 Notes in a private placement, of which $ 20.1 million aggregate principal amount was outstanding as of December 31, 2025 and are senior unsecured obligations of the Company.

The 2026 Notes will mature on December 15, 2026, unless earlier repurchased or redeemed by the Company or converted pursuant to their terms.

The total net proceeds from the offering of the 2026 Notes, after deducting debt issuance costs, was $ 505.3 million.

Each $1,000 in principal amount of the 2026 Notes is initially convertible into 13.2933 shares of the Company’s common stock par value $ 0.001 , which is equivalent to an initial conversion price of approximately $ 75.23 per share.

Each $1,000 in principal amount of the 2026 Notes is convertible into 0.8862 shares of the Company’s common stock, which is equivalent to a conversion price of $ 1,128.39 per share.

The conversion rate is subject to adjustment upon the occurrence of certain specified events but will not be adjusted for any accrued and unpaid special interest.

5 unchanged sentences

(1) during any calendar quarter commencing after the calendar quarter ending on March 31, 2021 (and only during such calendar quarter), if the last reported sale price of the Company’s common stock for at least 20 trading days (whether or not consecutive) during a period of 30 consecutive trading days ending on, and including, the last trading day of the immediately preceding calendar quarter is greater than or equal to 130 % of the conversion price for the 2026 Notes on each applicable trading day as determined by the Company;

(2) during the five business day period after any five consecutive trading day period (the “2026 Notes measurement period”) in which the “trading price” (as defined in the indenture governing the 2026 Notes) per $1,000 principal amount of 2026 Notes for each trading day of the 2026 Notes measurement period was less than 98 % of the product of the last reported sale price of the Company’s common stock and the conversion rate for the 2026 Notes on each such trading day;

(3) with respect to any 2026 Notes that the Company calls for redemption, at any time prior to the close of business on the scheduled trading day immediately preceding the redemption date;

2 unchanged sentences

Upon conversion, the Company will pay or deliver, as the case may be, cash, shares of its common stock or a combination of cash and shares of its common stock, at the Company’s election.

During the twelve months ended December 31, 2024, the conditions allowing holders of the 2026 Notes to convert were not met.

During the year ended December 31, 2025, the conditions allowing holders of the 2026 Notes to convert were not met.

In connection with the offering of the 2026 Notes, the Company entered into privately-negotiated capped call option transactions with certain counterparties (the “2026 capped calls”).

The 2026 capped calls each have an initial strike price of approximately $ 75.23 per share, subject to certain adjustments, which corresponds to the initial conversion price of the 2026 Notes.

The 2026 capped calls each have a strike price of $ 1,128.39 per share, subject to certain adjustments, which corresponds to the conversion price of the 2026 Notes.

The 2026 capped calls have initial cap prices of $ 1,583.70 per share, subject to certain adjustment events.

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The 2026 capped calls are recorded in stockholders’ equity and are not accounted for as derivatives.

The net cost of $ 46.1 million

The net cost of $ 46.1 million incurred to purchase the 2026 capped calls was recorded as a reduction to additional paid-in capital in the accompanying consolidated balance sheets.

LIVEPERSON, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

incurred to purchase the 2026 capped calls was recorded as a reduction to additional paid-in capital in the accompanying consolidated balance sheets.

Pursuant to a privately negotiated exchange and purchase agreement (the “Exchange and Purchase Agreement”), on June 3, 2024, the Company exchanged $ 146.0 million principal amount of the 2026 Notes then held by an investor for $ 100.0 million principal amount of new 2029 Notes, and the same investor purchased an additional $ 50.0 million principal amount of the 2029 Notes for cash.

1 unchanged sentence

As a result of the exchange and purchase transactions, during the second quarter of 2024, the Company recognized a $ 68.1 million gain on debt extinguishment which represented the difference between the carrying value of the 2026 Notes so exchanged and the collective fair value of the 2029 Notes and the Warrants, net of the cash payment received from the investor.

The extinguishment gain was recorded in Gain on debt extinguishment in the consolidated statements of operations.

The extinguishment gain was recorded in Gain on debt extinguishment in the consolidated statements of operations in fiscal 2024, and a corresponding portion of capped calls were terminated following the exchange and purchase as required by their terms for minimal consideration.

On June 13, 2024, the Company repurchased $ 10.3 million principal amount of the 2026 Notes for $ 4.9 million in cash.

As a result of the transaction, during the second quarter of 2024, the Company recognized a $ 5.0 million gain on debt extinguishment, which was recorded in Gain on debt extinguishment in the consolidated statements of operations.

In addition, a corresponding portion of the 2026 capped calls were terminated following the repurchase as required by their terms for no consideration.

The 2026 Notes were classified as long-term liabilities in the consolidated balance sheets as of December 31, 2024.

After the completion of the exchange and repurchase, the aggregate principal amount of the 2026 Notes was reduced to $ 361.2 million and the carrying amount of the 2026 Notes reduced to $ 357.8 million.

After the completion of the exchange and repurchase, the aggregate principal amount of the 2026 Notes was reduced to $ 361.2 million and the carrying amount of the 2026 Notes was reduced to $ 357.8 million.

A corresponding portion of the 2026 capped calls were terminated in connection following the transactions as required by their terms for no consideration.

The remaining term over which the 2026 Notes’ debt issuance costs will be amortized is 1.9 years at an effective interest rate of 0.40 % for the year ended December 31, 2024.

September 2025 Debt Exchange

On September 12, 2025 (the “Exchange Closing Date”), the Company consummated an exchange of the $ 341.1 million in aggregate principal amount of 2026 Notes held by certain former holders of the Company’s outstanding 2026 Notes (the “Noteholders”) for (i) an aggregate payment of $ 45.0 million in cash, (ii) $ 115.0 million in aggregate principal amount of the Company’s 10.0 % Second Lien Senior Subordinated Secured Notes due 2029 (the “Second Lien Notes”), (iii) 3,555,596 shares of common stock and (iv) 26,551 shares of Series B Fixed Rate Convertible Perpetual Preferred Stock, par value $ 0.001 (the “Series B Preferred Stock”).

On September 25, 2025, the Company issued an additional 143,192 shares of common stock to certain of the Noteholders, which shares were issued on a deferred basis due to a beneficial ownership limitation preventing such Noteholders from owning in excess of 9.90 % of the outstanding common stock of the Company.

In addition, a corresponding portion of the 2026 capped calls were terminated following the exchange as required by their terms for no consideration.

This September 2025 Debt Exchange was accounted for as a Troubled Debt Restructuring (“TDR”) in accordance with ASC 470-60, Troubled Debt Restructuring by Debtors .

The Company recognized a TDR gain of $ 27.7 million, which is presented as Gain on troubled debt restructuring in the consolidated statements of operations for the year ended December 31, 2025.

On the Exchange Closing Date, the principal amount of the exchanged 2026 Notes was $ 341.1 million with a discount of $ 1.7 million for a net carrying value of $ 339.4 million.

The Company recognized the Second Lien Notes at a carrying value of $ 182.0 million.

Under the TDR accounting treatment, the carrying value of the Second Lien Notes of $ 182.0 million was comprised of the total future undiscounted cash flows which included principal of $ 115.0 million, the maximum interest of $ 58.7 million as well as a redemption premium of $ 8.3 million.

The redemption premium is related to the contingent redemption feature where the lenders can redeem the Second Lien Notes immediately prior to their maturity upon the occurrence of a Fundamental Change as defined in the indenture governing the Second Lien Notes at 105 % of the principal plus accrued but unpaid interest as discussed further below.

The Company assumes contingent future payments will have to be paid and those amounts shall be included in the total future cash payments.

If, in future periods, the contingency is resolved so that a contingent payment does not have to be made, the Company will recognize a gain in the period when the contingency has been resolved.

Subsequently, no interest expense on the Second Lien Notes will be recorded, as all future interest payments will reduce the carrying value of the restructured debt.

The unexchanged 2026 Notes, due December 15, 2026, are classified as Current portion of long-term debt in the consolidated balance sheets as of December 31, 2025.

The aggregate principal amount of the unexchanged 2026 Notes was $ 20.1 million and the carrying amount of the unexchanged 2026 Notes was $ 20.0 million as of December 31, 2025.

The remaining term over which the unexchanged 2026 Notes’ debt issuance costs will be amortized is 0.92 years at an effective interest rate of 0.40 %.

LIVEPERSON, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Second Lien Senior Subordinated Secured Notes due 2029

On the Exchange Closing Date, the Company issued $ 115.0 million in aggregate principal amount of Second Lien Notes as part of the September 2025 Debt Exchange transaction.

The Second Lien Notes accrue interest at a rate of 10.0 % per annum.

Prior to March 15, 2027, all of the interest on the Second Lien Notes is payable in-kind (“PIK”).

On and after March 15, 2027 and until June 15, 2028, interest will be payable, at the Company’s option, in cash or in-kind or partially in cash and partially in-kind.

On and after June 15, 2028, until the maturity of the Second Lien Notes, interest on the Second Lien Notes will be payable in cash, or at the Company’s option, up to 6.0 % per annum in-kind.

Unless earlier repurchased or redeemed by the Company, the Second Lien Notes will mature on December 15, 2029.

The Company may, at its option, redeem the Second Lien Notes, in whole or in part, prior to September 12, 2026 at a price equal to the sum of (i) 105 % of the accrued and unpaid interest (including cash and PIK components thereof), (ii) 105 % of the aggregate principal amount of the Second Lien Notes (including, without duplication of any amounts described in item (i), all increases to the principal amount as the result of previous payments of PIK interest) and (iii) the present value of the remaining future interest payments (including cash and PIK components thereof) through September 12, 2026, computed using a discount rate of T + 50 (such amount, the “Make Whole Amount”).

On or after September 12, 2026, and prior to September 12, 2027, the Company may, at its option, redeem the Second Lien Notes, in whole or in part for an amount of cash equal to the sum of (i) 105 % of the aggregate principal amount of the Second Lien Notes (including all increases to the principal amount as the result of previous payments of PIK interest) plus (ii) 105 % of all accrued and unpaid interest (including, without duplication of any amounts described in item (i), cash and PIK components thereof).

On or after September 12, 2027, and prior to September 12, 2028, the Company may, at its option, redeem the Second Lien Notes, in whole or in part for an amount of cash equal to the sum of (i) 102.5 % of the aggregate principal amount of the Second Lien Notes (including all increases to the principal amount as the result of previous payments of PIK interest) plus (ii) 102.5 % of all accrued and unpaid interest (including, without duplication of any amounts described in item (i), cash and PIK components thereof).

From September 12, 2028 until maturity, the Company may, at its option, redeem the Second Lien Notes, in whole or in part for an amount of cash equal to the sum of (i) 100 % of the aggregate principal amount of the Second Lien Notes (including all increases to the principal amount as the result of previous payments of PIK interest) plus (ii) 100 % of all accrued and unpaid interest (including, without duplication of any amounts described in item (i), cash and PIK components thereof).

No sinking fund is provided for the Second Lien Notes.

The Second Lien Notes are guaranteed on a senior subordinated basis by certain of the Company’s direct and indirect domestic and foreign subsidiaries and secured by second lien priority security interests in substantially all of the assets of the Company and such subsidiary guarantors, subject to customary exceptions.

Pursuant to an intercreditor agreement, the Second Lien Notes are subordinated in right of payment and to collateral, in each case, to the 2029 Notes.

The indenture governing the Second Lien Notes contains affirmative and negative covenants and events of default customary for senior secured notes issued in connection with similar transactions.

The negative covenants include limitations on asset sales, the incurrence of debt, preferred stock and liens, fundamental changes, investments, dividends and other payment restrictions affecting subsidiaries, restricted payments and transactions with affiliates.

Among other things, these covenants generally prohibit the payment of cash dividends on the Company’s common stock.

Our failure to comply with these covenants could result in an event of default which, if not cured or waived, could result in the acceleration of the Second Lien Notes.

In the event the Second Lien Notes are accelerated prior to September 12, 2028, the applicable acceleration premium set forth in the indenture governing the Second Lien Notes will become due.

The indenture governing the Second Lien Notes permits the Company and its subsidiaries to incur, subject to certain requirements, up to (i) $ 150.0 million of debt that is junior in lien priority and subordinated in right of payment to the Second Lien Notes, and (ii) up to $ 20.1 million as exchange consideration for, or the proceeds of which are used to repay, the remaining $ 20.1 million aggregate principal amount of 2026 Notes, which debt may be in the form of additional Second Lien Notes.

No embedded derivatives were bifurcated from the Second Lien Notes as the September 2025 Debt Exchange was accounted for as a troubled debt restructuring and the Company recognized a gain in connection with the issuance of the Second Lien Notes.

If the Company undergoes a “Fundamental Change” as defined in the indenture governing the Second Lien Notes, which includes a change of control or the failure of the Company’s common stock to be listed or quoted on any of The Nasdaq Global Select Market, The Nasdaq Global Market or the New York Stock Exchange, holders may require the Company to repurchase all or any portion of their Second Lien Notes at a repurchase price equal to (i) to the Make Whole Amount, if such Fundamental Change occurs prior to September 12, 2026, or (ii) the sum of (A) 105 % of the aggregate principal amount of the Second Lien Notes (including all increases to the principal amount as the result of previous payments of PIK interest) plus (B) 105 % of all accrued and unpaid interest, if such Fundamental Change occurs on or after September 12, 2026.

Series B Preferred Stock

On the Exchange Closing Date, the Company filed a Certificate of Designation with respect to the Series B Preferred Stock (the “Series B Certificate of Designation”) with the Secretary of State of the State of Delaware and issued to the

LIVEPERSON, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Noteholders an aggregate 26,551 shares of Series B Preferred Stock.

Each share of Series B Preferred Stock had an initial stated value (“Stated Value”) of $1,000 per share, subject to adjustment for (i) any splits, combinations, or similar adjustment and (ii) accrued unpaid dividends.

The Series B Preferred Stock did not have a stated maturity and were not subject to mandatory redemption or any sinking fund, and would have remained outstanding indefinitely unless earlier converted, repurchased or redeemed.

On October 2, 2025, the stockholders of the Company approved the Stock Increase Charter Amendment Proposal to increase the authorized common stock share capital of the Company from 13,333,333 shares to 20,000,000 shares.

The Stock Increase Charter Amendment was filed with the Secretary of State of the State of Delaware on October 3, 2025.

As a result, all of the outstanding shares of Series B Preferred Stock automatically converted pursuant to the terms of the Series B Certificate of Designation, and on October 7, 2025, an aggregate 1,547,840 shares of common stock were issued to holders of the Series B Preferred Stock.

First Lien Convertible Senior Notes due 2029

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The amount payable by the Company if the 2029 Notes mature pursuant to clause (b) will be equal to 100 % of the aggregate principal amount of the 2029 Notes, plus accrued and unpaid interest, plus the remaining future interest payments that would have been payable through June 15, 2029, discounted at a rate equal to the comparable treasury rate plus 50 basis points (the “Make-Whole Amount”).

From June 3, 2024, until the date of issuance of the Delayed Draw Notes, interest on the 2029 Notes accrued at a rate of 10.83 % (consisting of 4.17 % cash and 6.66 % paid in kind (“PIK”)) per annum.

From June 3, 2024, until the date of issuance of the Delayed Draw Notes, interest on the 2029 Notes accrued at a rate of 10.83 % (consisting of 4.17 % cash and 6.66 % PIK) per annum.

From the date of issuance of the Delayed Draw Notes and prior to December 15, 2026, interest on the 2029 Notes has increased and accrues at a rate of 11.375 % (consisting of 4.375 % cash and 7.00 % PIK) per annum.

2 unchanged sentences

On or after June 15, 2025, and prior to June 15, 2026, the Company may, at its option, redeem the 2029 Notes, in whole or in part for an amount of cash equal to the sum of (i) 106.50 % of the aggregate principal amount of the 2029 Notes (including all increases to the principal amount as the result of previous payments of PIK interest) plus (ii) 106.50 % of all accrued and unpaid PIK interest plus (iii) all accrued and unpaid cash interest.

LIVEPERSON, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

previous payments of PIK interest) plus (ii) 103.25 % of all accrued and unpaid PIK interest plus (iii) all accrued and unpaid cash interest.

On or after June 15, 2026, and prior to December 15, 2026, the Company may, at its option, redeem the 2029 Notes, in whole or in part for an amount of cash equal to the sum of (i) 103.25 % of the aggregate principal amount of the 2029 Notes (including all increases to the principal amount as the result of previous payments of PIK interest) plus (ii) 103.25 % of all accrued and unpaid PIK interest plus (iii) all accrued and unpaid cash interest.

From December 15, 2026 until maturity, the Company may, at its option, redeem the 2029 Notes, in whole or in part for an amount of cash equal to the sum of (i) 113 % of the aggregate principal amount of the 2029 Notes (including all increases to the principal amount as the result of previous payments of PIK interest) plus (ii) 113 % of all accrued and unpaid PIK interest plus (iii) all accrued and unpaid cash interest.

In addition, the Make-Whole Amount will be payable in the event of an acceleration of the 2029 Notes or repurchase triggered by certain asset sales.

No sinking fund is provided for the 2029 Notes.

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Among other things, these covenants generally prohibit the payment of cash dividends on the Company’s common stock.

The indenture governing the 2029 Notes permits the Company and its subsidiaries to incur, subject to certain requirements, up to $ 150.0 million of debt that is junior in lien priority and subordinated in right of payment to the 2029 Notes.

The Make-Whole Amount will be payable in the event of an acceleration of the 2029 Notes or repurchase triggered by certain asset sales.

The indenture

LIVEPERSON, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

governing the 2029 Notes permits the Company and its subsidiaries to incur, subject to certain requirements, up to $ 150.0 million of debt that is junior in lien priority and subordinated in right of payment to the 2029 Notes.

The indenture governing the 2029 Notes also includes a financial covenant that requires the Company at all times to maintain a minimum cash balance of $ 60.0 million (excluding proceeds of the 2029 Notes).

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(1) during any calendar quarter commencing after the calendar quarter ending on September 30, 2024 (and only during such calendar quarter), if the last reported sale price of the Company’s common stock for at least 20 trading days (whether or not consecutive) during a period of 30 consecutive trading days ending on, and including, the last trading day of the immediately preceding calendar quarter is greater than or equal to 130 % of the conversion price for the 2029 Notes on each applicable trading day as determined by the Company;

(2) during the five business day period after any five consecutive trading day period (the “measurement period”) in which the “trading price” (as defined in the indenture governing the 2029 Notes) per $1,000 principal amount of 2029 Notes for each trading day of the measurement period was less than 98 % of the product of the last reported sale price of the Company’s common stock and the product of (x) the quotient of (i) the “conversion amount” (as defined in the Indenture) in respect of $1,000 principal amount of the 2029 Notes on such trading day divided by (ii) 1,000 times (y) the conversion rate for the 2029 Notes on each such trading day;

(2) during the five business day period after any five consecutive trading day period (the “2029 Notes measurement period”) in which the “trading price” (as defined in the indenture governing the 2029 Notes) per $1,000 principal amount of 2029 Notes for each trading day of the 2029 Notes measurement period was less than 98 % of the product of the last reported sale price of the Company’s common stock and the product of (x) the quotient of (i) the “conversion amount” (as defined in the Indenture) in respect of $1,000 principal amount of the 2029 Notes on such trading day divided by (ii) 1,000 times (y) the conversion rate for the 2029 Notes on each such trading day;

(3) with respect to any 2029 Notes that the Company calls for redemption, at any time prior to the close of business on the scheduled trading day immediately preceding the redemption date;

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The 2029 Notes include certain embedded features requiring bifurcation, which did not have material values as of December 31, 2025 due to management’s estimates of the likelihood of triggering events, but that may have value in the future should those estimates change, with any change in fair value recorded in the Company’s consolidated statements of operations.

The 2029 Notes (including all accrued and unpaid interest) are convertible at the option of the holders at certain times into cash based on a daily conversion value calculated on a proportionate basis for each trading day in a 50 trading day observation period, initially corresponding to 13.2933 shares of the Company’s common stock per $1,000 principal amount of 2029 Notes.

The 2029 Notes (including all accrued and unpaid interest) are convertible at the option of the holders at certain times into cash based on a daily conversion value calculated on a proportionate basis for each trading day in a 50 trading day observation period, corresponding to 0.8862 shares of the Company’s common stock per $1,000 principal amount of 2029 Notes.

The Company is not required to deliver its common stock upon conversion under any circumstances.

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During the three months ended December 31, 2025, the conditions allowing holders of the 2029 Notes to convert were not met.

LIVEPERSON, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The 2029 Notes, including the Delayed Draw Notes, are accounted for as a single liability, and the combined carrying amount is $ 189.8 million as of December 31, 2025, consisting of principal of $ 221.9 million, net of unamortized issuance costs of $ 6.1 million and debt discount of $ 26.0 million.

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The remaining term over which the 2029 Notes’ debt issuance costs will be amortized is 3.46 years at an effective interest rate of 19.13 % for the 2029 Notes and 13.28 % for the Delayed Draw Notes as of December 31, 2025.

The 2029 Notes and the Delayed Draw Notes had an effective interest rate of 19.18% and 13.25%, respectively, as of December 31, 2024.

Unamortized debt issuance costs incurred in connection with securing the Company’s financing arrangements are presented in the consolidated balance sheets as a direct deduction from the carrying amount of the outstanding borrowings, consistent with debt discounts.

1 unchanged sentence

The net carrying amount of the liability component of the Notes as of December 31, 2025 and 2024 was as follows:

LIVEPERSON, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2025 December 31, 2024

(In thousands)

2026 Notes 2029 Notes Second Lien Notes (1)

Total 2026 Notes 2029 Notes Total

(In thousands) (In thousands)

Principal $ 20,125 $ 221,877 $ 181,952 $ 423,954 $ 361,204 207,125 $ 568,329

Unamortized debt discount — ( 25,955 ) — ( 25,955 ) — ( 31,137 ) ( 31,137 )

— ( 31,137 ) ( 31,137 ) — — —

Unamortized issuance costs ( 73 ) ( 6,142 ) — ( 6,215 ) ( 2,757 ) ( 7,365 ) ( 10,122 )

Total net carrying value 20,052 189,780 181,952 391,784 358,447 168,623 527,070

Short-term debt, net — — — 72,393 — 72,393

Long-term debt, net $ 358,447 $ 168,623 $ 527,070 $ — $ 511,565 $ 511,565

Current portion of long-term debt ( 20,052 ) — — ( 20,052 ) — — —

Carrying value of long-term debt, net $ — $ 189,780 $ 181,952 $ 371,732 $ 358,447 $ 168,623 $ 527,070

(1) Represents $ 115.0 million of outstanding principal amount of Second Lien Notes, plus the maximum interest of $ 58.7 million as well as a redemption premium of $ 8.3 million.

The following table sets forth the interest expense recognized related to the Notes:

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On June 3, 2024, pursuant to the Exchange and Purchase Agreement, the Company issued to the investor 10-year warrants with a strike price of $ 11.25 per share, exercisable for 649,782 shares of the Company’s common stock and 10-year warrants with a strike price of $ 11.25 per share, exercisable with respect to a notional amount of 156,318 shares of the Company’s common stock for cash payments equal to the excess of “fair market value” (as defined therein) per share over the strike price, fully diluted subject to certain adjustments.

In August 2025, Warrants with a notional amount of 200,000 shares were settled and a gain of $ 1.3 million related to the fair value adjustment on settlement date was recognized in Other income (expense), net in the consolidated statements of operations for the year ended December 31, 2025.

The cash-settled warrants will permit the Company, subject to certain conditions (including to the extent that the Company, following payment, would have “available cash” (as defined therein) of less than $ 100.0 million), to defer payment of the settlement amount at an annualized interest rate of 6.0 %, compounded monthly.

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The triggers for the anti-dilution adjustments include (a) subdivision, combination or reclassification of the outstanding shares of common stock into a greater or smaller number of shares, (b) certain below market issuances of common stock, (c) certain issuances of common stock at a price that is less than the strike price of the Warrant, (d) certain issuances of a dividend or distribution to all holders of common stock, (e) an above market tender offer or exchange offer by the Company for common stock.

Pursuant to the anti-dilution terms of the Warrants, the aggregate notional amount of the Warrants increased to 13,126,698 shares as of December 31, 2024 .

LIVEPERSON, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Pursuant to the anti-dilution terms of the Warrants, and giving effect to the settlement of Warrants with respect to a notional amount of 200,000 shares, the aggregate notional amount of the Warrants increased to 1,025,935 shares and the strike price was $ 6.92 as of December 31, 2025.

In the event of a “Cash/Public Acquisition” (as defined therein), the Warrants may be automatically exercised, cash settled or expire, depending on the fair market value per share.

The Warrants contain a beneficial ownership limitation on the investor’s ownership of the Company’s common stock, on a post-exercise basis (aggregating all securities convertible into or exercisable for the Company’s common stock), of 4.99 %, subject to increase upon 61 days’ notice by the investor, but not to exceed 9.99 %.

The Warrants were classified as current liabilities under ASC 480 in the Company’s consolidated balance sheets and recorded at fair value of $ 5.3 million at the issuance date with any subsequent changes in fair value to be recorded in the Company’s consolidated statements of operations.

As of December 31, 2024, the Warrants had a fair value of $ 17.5 million.

A loss of $ 12.2 million for the change in fair value was recorded in Other (expense) income, net, in the Company’s consolidated statements of operations for the year ended December 31, 2024.

The Company has non-cancelable operating and finance leases for its corporate offices and other service agreements.

Its leases have remaining lease terms of approximately 1 year or less, some of which include options to extend.

The Company uses the non-cancelable lease term when recognizing the ROU assets and lease liabilities, unless it is reasonably certain that a renewal or termination option will be exercised.

Supplemental cash flow information related to leases for the periods presented is as follows:

Year Ended December 31,

2024 2023 2022

(In thousands)

Cash paid for amounts included in the measurement of lease liabilities:

Operating cash flows for operating leases $ 3,206 $ 3,448 $ 4,885

Operating cash flows for finance leases 24 93 196

Financing cash flows for finance leases 401 3,330 3,734

The components of lease costs for the periods presented are as follows:

Year Ended December 31,

2024 2023 2022

(In thousands)

Finance lease cost

Amortization of right-of-use assets $ 398 $ 3,712 $ 3,690

Interest 24 93 196

Operating lease cost 10,164 11,491 11,332

Total lease cost $ 10,586 $ 15,296 $ 15,218

2024 December 31,

Weighted average remaining lease term:

Operating leases 0.3 years 2.1 years

Finance leases 0.8 years 0.9 years

Weighted average discount rate:

Operating leases 7 % 7 %

Finance leases 7 % 7 %

The Warrants contain a beneficial ownership limitation on the investor’s ownership of the Company’s common stock, on a post-exercise basis (aggregating all securities convertible into or

LIVEPERSON, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Supplemental balance sheet information related to leases as of the dates presented is as follows:

Classification on the Consolidated Balance Sheets

2024 December 31,

(In thousands)

Operating ROU assets Operating lease ROU assets $ 48 $ 4,135

Finance ROU assets Property and equipment, net 62 3,060

Operating lease liabilities Operating lease liabilities

Finance lease liabilities Accrued expenses and other current liabilities 104 3,037

Operating lease liabilities Operating lease liabilities, net of current portion

Finance lease liabilities Other liabilities — 85

Future minimum lease payments under non-cancellable operating and finance leases are immaterial.

exercisable for the Company’s common stock), of 4.99 %, subject to increase upon 61 days’ notice by the investor, but not to exceed 9.99 %.

The Warrants were classified as current liabilities under ASC 480, Distinguishing Liabilities from Equity , in the Company’s consolidated balance sheets and recorded at fair value of $ 5.3 million at the issuance date with subsequent changes in fair value recorded in the Company’s consolidated statements of operations.

As of December 31, 2025, the Warrants had a fair value of $ 3.0 million.

A gain of $ 13.2 million and a loss of $ 12.2 million for the change in fair value were recorded in Other income (expense), net, in the Company’s consolidated statements of operations for the years ended December 31, 2025 and 2024, respectively.

Fair Value Measurements

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These assumptions are required to be consistent with market participant assumptions that are reasonably available.

LIVEPERSON, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Financial Assets and Liabilities

5 unchanged sentences

Cash equivalents - money market funds $ 43,000 $ — $ — $ 43,000

$ 105,772 $ — $ — $ 105,772

Total assets $ 43,000 $ — $ — $ 43,000

Warrants liability $ — $ — $ 2,999 $ 2,999

$ — $ — $ 17,498 $ 17,498

Total liabilities $ — $ — $ 2,999 $ 2,999

$ — $ — $ 17,498 $ 17,498

LIVEPERSON, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2024

2 unchanged sentences

Cash equivalents - money market funds $ 105,772 $ — $ — $ 105,772

$ 174,701 $ — $ — $ 174,701

Total assets $ 105,772 $ — $ — $ 105,772

Warrants liability $ — $ — $ 17,498 $ 17,498

Total liabilities $ — $ — $ 17,498 $ 17,498

In determining fair value, the Company utilizes valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs to the extent possible as well as considers counterparty credit risk in its assessment of fair value.

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Estimated fair values are Level 3 measures in the fair value hierarchy.

LIVEPERSON, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The estimated fair value of outstanding balances of the Notes as of the dates presented are as follows:

Fair Value Principal

Balance Unamortized Debt Discount

Unamortized Debt Discount

Unamortized Debt Issuance Costs

3 unchanged sentences

$ 200,601 $ 221,877 $ ( 25,955 ) $ ( 6,142 ) $ 189,780

December 31, 2023

2 $ 71,396 $ 72,492 $ — $ ( 99 ) $ 72,393

Second Lien Notes 3

$ 61,497 $ 181,952 $ — $ — $ 181,952

Management determined the fair value of 2026 Notes and 2024 Notes by using Level 2 inputs based on observable market prices for similar instruments.

Management determined the fair value of the 2029 Notes and Delayed Draw Notes as of December 31, 2024 by using Level 3 inputs, including the yield of 16 %, risk-free rate of 4.35 %, and credit spread of 11.42 %.

December 31, 2024

2026 Notes 2 $ 164,348 $ 361,204 $ — $ ( 2,757 ) $ 358,447

2029 Notes 3 $ 180,360 $ 207,125 $ ( 31,137 ) $ ( 7,365 ) $ 168,623

Management determined the fair value of 2026 Notes by using Level 2 inputs based on observable market prices for the instrument and similar instruments.

Management determined the fair value of the 2029 Notes as of December 31, 2025 by using Level 3 inputs, including the volatility of 15 %, yield of 16 %, risk-free rate of 3.59 % and credit spread of 12.81 %.

Management determined the fair value of the Second Lien Notes as of December 31, 2025 by using Level 3 inputs, including volatility of 15.00 %, yield of 30.00 %, risk-free rate of 3.64 % and credit spread of 24.60 %.

A change in those inputs to a different amount might result in a significantly higher or lower fair value measurement.

The Company recorded the fair value of the Warrants upon issuance using the Black-Scholes valuation model and is required to revalue these Warrants at each reporting date with any changes in fair value recorded on the Company’s consolidated statements of operations.

Management determined the fair value of the 2029 Notes and Delayed Draw Notes as of December 31, 2024 by using Level 3 inputs, including the yield of 16%, risk-free rate of 4.35%, and credit spread of 11.42%.

LIVEPERSON, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

statements of operations.

The valuation of the Warrants was classified as Level 3 within the fair value hierarchy and is influenced by the fair value of the underlying, or notional amount of, common stock of the Company.

A summary of the Black-Scholes pricing model assumptions used to record the fair value of the Warrants as of December 31, 2024 is as follows:

A summary of the Black-Scholes pricing model assumptions used to record the fair value of the Warrants as of December 31, 2025 and 2024 is as follows:

Stock price $ 3.87 $ 1.52

Risk free rate 4.05 % 4.56 %

2 unchanged sentences

Any significant changes in the inputs may result in significantly higher or lower fair value measurements.

Refer to Note 8 – Convertible Senior Notes, Net of Current Portion, Capped Call Transactions, and Warrants for additional information.

The changes in fair value of the Level 3 Warrants and earn-out liabilities as of the dates presented are as follows:

Refer to Note 8 – Senior Notes, Capped Call Transactions, Warrants and Preferred Stock for additional information.

The changes in fair value of the Level 3 Warrants as of the dates presented are as follows:

(In thousands)

Balance, beginning of year $ 17,498 $ —

Change in fair value of contingent consideration — 4,629

Change in fair value of liability awards — ( 27,857 )

Payments — ( 48,993 )

Issuance of Warrants — 5,266

Settlement of Warrants ( 1,297 ) —

Change in fair value of Warrants ( 13,202 ) 12,232

Balance, end of year $ 2,999 $ 17,498

Certain former stakeholders of the Company’s acquisitions were eligible to receive additional cash or share considerations based on the attainment of certain operating metrics in the periods subsequent to the acquisitions.

These earn-out arrangements were accounted for as either contingent considerations arrangements or compensation arrangements.

Contingent considerations were fair valued using significant inputs that are not observable in the market.

LIVEPERSON, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The earn-outs determined to be compensatory were remeasured each reporting period based on whether the performance targets were probable of being achieved and recognized over the related service periods.

During the year ended December 31, 2023, the Company settled the VoiceBase, Tenfold and e-Bot7 earn-outs for $ 19.9 million, $ 9.3 million, and $ 7.7 million, respectively.

During the year ended December 31, 2023, the Company paid $ 12.0 million in connection with the WildHealth earn-out settlement.

Changes to the fair value of the earnouts were recognized as a component of stock-based compensation expense and Other (expense) income, net in the accompanying consolidated statements of operations.

Payments in cash were recognized as a component of compensation expense and payments in stock were recognized as a component of equity in the accompanying consolidated statements of operations.

There were no outstanding earnout liabilities as of December 31, 2024.

Commitments and Contingencies

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The Company’s 401(k) policy is a Safe Harbor Plan, whereby the Company matches 100 % of the first 3 % of eligible compensation and 50 % of the next 2 % of eligible compensation.

Furthermore, the match is immediately vested.

The match is immediately vested.

Salaries and related expenses include $ 1.9 million, $ 2.8 million, and $ 3.8 million of employer matching contributions for the years ended December 31, 2025, 2024, and 2023, respectively.

3 unchanged sentences

The Company’s purchase obligations consist of agreements to purchase goods and services entered into in the ordinary c ourse of business.

The Company has purchase obligation agreements primarily relating to contracts with vendors in connection with Information Technology (“IT”) infrastructure with remaining terms of one year or less.

The Company’s non-cancellable unconditional purchase obligation in connection with these arrangements is $ 15.5 million for 2025.

The Company has purchase obligation agreements primarily relating to contracts with vendors in connection with Information Technology (“IT”) infrastructure and cloud computing servi ces.

In September 2025, the Company entered into a new three-year contract for $ 74.4 million in purchase commitments over a three-year term.

Total purchase commitments remaining as of December 31, 2025 including those under this new contract are as follows:

$ 25.5 million for 2026, $ 24.5 million for 2027, and $ 24.4 million for 2028.

LIVEPERSON, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Indemnifications

7 unchanged sentences

Stockholders’ Equity

On October 3, 2025, we amended our Restated Certificate of Incorporation to increase the number of outstanding shares of our common stock from 200 million to 300 million.

Subsequently, on October 13, 2025, we effected a 1-for-15 Reverse Stock Split, which also resulted in a proportional reduction in the number of authorized shares of our common stock from 300,000,000 to 20,000,000 .

As of December 31, 2025, there were 20,000,000 shares of common stock authorized, 12,223,729 shares issued, and 12,039,325 shares outstanding.

1 unchanged sentence

The par value for the common stock is $ 0.001 per share.

LIVEPERSON, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Preferred Stock

2 unchanged sentences

Stock-Based Compensation

The Company’s stock-based compensation generally includes stock options, RSUs, PRSUs, and purchases under the Company’s 2019 ESPP.

The Company’s stock-based compensation generally includes stock options, RSUs, PRSUs, and purchases under the Company’s 2019 Employee Stock Purchase Plan (the “ESPP”).

Stock-based compensation expense related to RSUs is based on the market value of the underlying stock on the date of grant and the related expense is recognized ratably over the requisite service period.

4 unchanged sentences

The 2019 Stock Incentive Plan, as amended and restated, allows the Company’s employees and directors to participate in the Company’s future performance through grants of stock-based awards of stock options and RSUs at the discretion of the board of directors.

The number of shares authorized for issuance under the 2019 Stock Incentive Plan as of December 31, 2024 was 46,967,744 shares in the aggregate, inclusive of 4,600,000 shares approved for issuance thereunder by the stockholders of the Company at the Company’s annual meeting on November 25, 2024.

Options to acquire common stock granted under the 2019 Stock Incentive Plan have ten-year terms.

As of December 31, 2024, approximately 3.5 million shares of common stock remained available for issuance (taking into account all stock option exercises and other equity award settlements through December 31, 2024).

Employee Stock Purchase Plan

The number of shares authorized for issuance under the ESPP as of December 31, 2024 was 4,500,000 shares, inclusive of 2,500,000 shares approved for issuance thereunder by the stockholders of the Company at the Company’s annual meeting on November 25, 2024.

As of December 31, 2024, approximately 3.2 million shares of common stock remained available for issuance under the ESPP (taking into account all share purchases through December 31, 2024).

Inducement Plan

There are 15,412,342 shares of common stock authorized and reserved for issuance under the Inducement Plan, inclusive of 2,333,333 shares authorized for issuance during the fourth quarter of 2024 .

As of December 31, 2024, approximately 1.2 million shares of common stock remained available for issuance under the Inducement Plan (taking into account all option exercises and other equity award settlements through December 31, 2024).

CEO Inducement Award

As part of an equity compensation package negotiated to induce John Sabino, the Company’s Chief Executive Officer, to accept employment with the Company, pursuant to the terms of the employment agreement entered into between Mr.

Sabino and the Company, the Company granted Mr.

Sabino an option to purchase 1,000,000 shares of common stock (the “CEO Inducement Award”) that will vest upon the satisfaction of certain performance-based and time-based vesting conditions.

On May 17, 2024, the Company’s board of directors authorized 1,000,000 shares for issuance under the CEO Inducement Award in compliance with and in reliance on Nasdaq Listing Rule 5635(c)(4).

The CEO Inducement Award was a standalone award granted outside of the 2019 Stock Incentive Plan and 2018 Inducement Plan.

As of December 31, 2024, no shares of common stock remained available for issuance under the CEO Inducement Award.

The number of shares authorized for issuance under the 2019 Stock Incentive Plan as of December 31, 2025 was 3,487,182 shares.

Options to acquire common stock granted under the 2019 Stock Incentive Plan have four-year terms.

As of December 31, 2025, 62,029 shares of common stock remained available for issuance (taking into account all stock option exercises and other equity award settlements through December 31, 2025).

LIVEPERSON, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Employee Stock Purchase Plan

The number of shares authorized for issuance under the ESPP as of December 31, 2025 was 300,000 shares.

As of December 31, 2025, 92,972 shares of common stock remained available for issuance under the ESPP (taking into account all share purchases through December 31, 2025).

Inducement Plan

There are 1,027,489 shares of common stock authorized and reserved for issuance under the Inducement Plan.

As of December 31, 2025, 85,615 shares of common stock remained available for issuance under the Inducement Plan (taking into account all option exercises and other equity award settlements through December 31, 2025).

Stock Option Activity

The following table is a summary of the Company’s stock option activity and weighted average exercise prices for the years ended December 31, 2022, 2023 and 2024:

The following table is a summary of the Company’s stock option activity and weighted average exercise prices for the years presented:

Stock Option Activity Weighted Average Remaining Contractual Term

1 unchanged sentence

(In thousands) Weighted

Exercise Price

Balance outstanding as of December 31, 2022 297 $ 363.75

5 unchanged sentences

Options exercisable as of December 31, 2023 176 $ 325.05 4.20 $ 40

2,758 $ 21.26 4.94 $ 986

Balance outstanding as of December 31, 2023 209 $ 340.20

4,459 $ 24.25

Granted 18 11.37

Exercised ( 67 ) 2.62

Cancelled or expired ( 98 ) 329.40

Balance outstanding as of December 31, 2024 178 $ 343.95 3.95 $ 7

3,137 $ 22.68 4.84 $ 40

Options vested and expected to vest 45 $ 73.65 8.93 $ 290

Options exercisable as of December 31, 2024 106 $ 343.95 3.65 $ 7

2,643 $ 21.67 4.20 $ 40

Balance outstanding as of December 31, 2024 178 $ 343.95

3,137 $ 22.68

Granted 27 16.20

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Balance outstanding as of December 31, 2025 178 $ 184.30 5.92 $ —

2,663 $ 22.93 3.95 $ 7

Options vested and expected to vest 154 $ 210.00 5.47 $ —

Options exercisable as of December 31, 2025 84 $ 370.98 2.91 $ —

1,595 $ 22.93 3.65 $ 7

The total fair value of stock options exercised during the years ended December 31, 2024 was immaterial.

The total fair value of stock options exercised during the years ended December 31, 2023 and 2022 was $ 3.4 million and $ 11.3 million, respectively.

(1) Represents an option to purchase 66,666 shares granted to John Sabino, the Company’s Chief Executive Officer, as a standalone grant, that will vest upon satisfaction of certain performance-based and time-based vesting conditions.

The total fair value of stock options exercised during the years ended December 31, 2025 and 2024 was immaterial.

The total fair value of stock options exercised during the year ended December 31, 2023 was $ 3.4 million.

As of December 31, 2025, there was $ 0.4 million of total unrecognized compensation cost related to non-vested share-based compensation arrangements.

That cost is expected to be recognized over a weighted average period of 5.85 years.

That cost is expected to be recognized over a weighted average period of approximately 2.4 years.

LIVEPERSON, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The per share weighted average fair value of stock options granted during the years ended December 31, 2025, 2024 and 2023 was $ 12.00 , $ 2.55 , and $ 98.10 , respectively.

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Risk-free interest rate 3.74 % 4.31 %

1.62 % – 4.20 %

Expected life (in years) 4 10 5

Historical volatility 67.10 %

53.87 % – 64.13 %

Volatility 108.51 % 67.10 %

LIVEPERSON, INC.

2 unchanged sentences

• Dividend yield – The Company uses 0 % as it has never issued dividends and does not anticipate issuing dividends in the near term.

• Risk-free interest rate – The Company uses the market yield on U.S.

Treasury securities at 5 years with constant maturity, representing the current expected life of stock options in years, with the exception of the 2024 grants, which had a 10-year life.

• Risk-free interest rate – The Company uses the market yield on zero-coupon U.S.

Treasury securities with maturities that approximate the expected life of stock options in years, with the exception of the 2024 grants, which had a 10-year life.

• Expected life – The Company uses historical data to estimate the expected life of a stock option.

• Historical volatility – The Company uses a trailing five year from grant date to determine volatility.

• Volatility – The Company estimates expected volatility based on the historical volatility of its common stock over a period consistent with the expected life of the stock options.

Restricted Stock Unit and Performance-Vesting Restricted Stock Unit Activity

The following table is a summary of the Company’s RSUs and PRSUs activity and weighted average grant date fair value, for the years ended December, 31, 2022, 2023 and 2024:

The following table is a summary of the Company’s RSUs and PRSUs activity and weighted average grant date fair value, for the years presented:

Number of Shares

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RSUs granted to employees generally vest over a 1 to 4-year period, or upon achievement of certain performance conditions.

As of December 31, 2024, total unrecognized compensation cost, adjusted for estimated forfeitures, related to non-vested RSUs and PRSUs was $ 17.6 million and the weighted-average remaining vesting period was 0.8 years.

As of December 31, 2025, total unrecognized compensation cost, adjusted for estimated forfeitures, related to non-vested RSUs was $ 7.8 million and the weighted-average remaining vesting period was 1.1 years.

LIVEPERSON, INC.

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The associated compensation cost is recognized over the requisite service period when it is probable that the performance condition will be satisfied.

There were no PRSU grants in 2024.

PRSUs granted in years 2023 and 2022 were immaterial.

There were no PRSU grants in 2025 and 2024.

PRSUs granted in 2023 were immaterial.

During the year ended December 31, 2025, the outstanding PRSUs vested but the related shares have not been distributed as of December 31, 2025.

Total stock-based compensation costs included in the consolidated statements of operations for the periods presented are as follows:

Year Ended December 31,

2024 2023 2022

(In thousands)

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Restructuring

LivePerson maintains restructuring initiatives to realign the Company’s cost structure with its current business model.

In connection with the restructuring initiatives, the Company recognized restructuring costs of $ 11.1 million, $ 22.7 million, and $ 20.0 million during the years ended December 31, 2024, 2023, and 2022, respectively, which is included in Restructuring costs in the accompanying consolidated statements of operations.

Such costs primarily include severance and other compensation costs as well as IT infrastructure contract termination costs.

While the Company’s restructuring efforts are ongoing, the 2024 restructuring activities were considered to be substantially completed as of December 31, 2024.

The following table presents the detail of the liability for the Company’s restructuring charges, which is included within Accrued expenses and other current liabilities within the consolidated balance sheets as of December 31, 2024 and 2023:

LivePerson has undertaken several restructuring initiatives to realign the Company’s cost structure with its current business model, a changing competitive environment and changes in the Company’s commercial performance.

In September 2025, the Company initiated a new restructuring plan (the “2025 Restructuring Plan”) to reduce cash expenditures to align with the Company’s current commercial performance, resulting in a charge of $ 11.7 million for the year ended December 31, 2025.

The Company recognized restructuring costs of $ 11.1 million and $ 22.7 million during the years ended December 31, 2024 and 2023, respectively.

Such costs primarily include severance and other compensation costs and are recorded in Restructuring costs in the consolidated statements of operations.

The 2024 and 2025 restructuring activities were considered to be substantially completed in their respective years.

The following table presents the detail of the liability for the Company’s restructuring costs, which is included in Accrued expenses and other current liabilities in the consolidated balance sheets as of December 31, 2025 and 2024:

(In thousands)

Balance, beginning of year $ 3,028 $ 2,076

IT contract termination (reversals) costs, net

( 1,217 ) 5,744

Severance and other associated costs 11,667 12,356

IT contract termination reversals, net — ( 1,217 )

Cash payments ( 13,308 ) ( 10,187 )

Balance, end of year $ 1,387 $ 3,028

The following table presents the detail of expenses for the Company’s restructuring charges for the periods presented:

LIVEPERSON, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The following table presents the detail of expenses for the Company’s restructuring costs for the periods presented:

Year Ended December 31,

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(In thousands)

Lease restructuring costs $ — $ — $ 442

IT contract termination (reversals) costs, net

( 1,217 ) 5,744 —

Severance and other associated costs $ 11,667 $ 12,356 $ 16,920

IT contract termination (reversals) costs, net — ( 1,217 ) 5,744

Total restructuring costs $ 11,667 $ 11,139 $ 22,664

LIVEPERSON, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Legal Matters

4 unchanged sentences

The complaint alleges that the Company’s Form 10-Q filings and forecasts for the first, second, and third quarters of fiscal year 2022 were false and misleading in violation of Section 10(b) of the Securities Exchange Act of 1934, based on the Company’s later disclosures and report on Form 10-K on March 16, 2023.

On May 31, 2024, the plaintiff filed an amended complaint.

The Company moved to dismiss the amended complaint in August 2024, and the motion is awaiting decision.

In May 2024, the plaintiff filed an amended complaint.

The Company moved to dismiss the amended complaint in August 2024, and in March 2025, the court granted the Company’s motion and dismissed the action with prejudice.

In April 2025, the plaintiff appealed the decision to the United States Court of Appeals for the Second Circuit and in March 2026, the dismissal was affirmed but the case was remanded to the district court with leave for the plaintiff to try to replead his complaint.

A parallel litigation on behalf of stockholders who purchased their shares on the Tel Aviv Stock Exchange, entitled Weissbrod v.

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The Marti, Steffens and Morales cases are stayed, and the Perkins case is in abeyance, pending further developments in the Damri case.

I n January 2024, a purported stockholder of the Company filed a lawsuit against the Company and its Board of Directors entitled Browne v.

Layfield, No.

2024-0079, in the Court of Chancery of the State of Delaware.

The complaint asserted a claim for breach of fiduciary duty based upon a Tax Benefits Preservation Plan.

In February 2024, the Board approved technical amendments to the Tax Benefits Preservation Plan which were filed by the Company on Form 8-K, and the case was dismissed as moot, subject to attorneys’ fees on behalf of the plaintiff.

The plaintiff has sought $ 850,000 in fees and expenses, which the Company opposed.

On September 5, 2024, the Court awarded the plaintiff $ 735,000 , which has been paid and is recorded in General and administrative expenses in the consolidated statement of operations for the year ended December 31, 2024.

In February 2024, Starboard Value LP and several of its related entities and investment funds filed a lawsuit against the Company, its former Chief Executive Officer, and its Chief Financial Officer entitled Starboard Value LP v.

1 unchanged sentence

2024-0103, in the Court of Chancery of the State of Delaware.

The complaint alleges common law fraud, fraudulent inducement and negligent misrepresentation in connection with an alleged scheme to induce Starboard to settle its 2022 proxy contest against the Company and, as stated in the complaint, involves previous Starboard allegations of misrepresentations in the Company’s public disclosures that the Company previously informed Starboard were found to be unsubstantiated following an independent investigation.

Starboard seeks damages for its trading losses and purported lost anticipated profits.

The defendants have filed an answer denying the substantive allegations of the complaint.

The parties are currently engaged in discovery and the case is scheduled for trial in June 2025.

The complaint alleged common law fraud, fraudulent inducement and negligent misrepresentation in connection with an alleged scheme to induce Starboard to settle its 2022 proxy contest against the Company and, as stated in the complaint, involved previous Starboard allegations of misrepresentations in the Company’s public disclosures that the Company previously informed Starboard were found to be unsubstantiated following an independent investigation.

Starboard sought damages for its trading losses and purported lost anticipated profits.

The defendants filed an answer denying the substantive allegations of the complaint, the parties engaged in discovery, and in July 2025, the litigation was settled.

The settlement did not have an impact on the Company’s consolidated statements of operations, as the cost was covered by insurance.

LIVEPERSON, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

COVID-Related Matters

3 unchanged sentences

Food and Drug Administration.

LIVEPERSON, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The Company has discontinued all products and services related to COVID-19, and has responded to and intends to continue to cooperate with governmental inquiries related to its previous engagement in COVID-19 related product and service offerings.

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(Israel) are more likely than not to be realized as these jurisdictions have positive cumulative pre-tax book income after adjusting for permanent and one-time items.

The Company had a valuation allowance on certain deferred tax assets for the years ended December 31, 2024, 2023, and 2022 of $ 234.6 million, $ 211.2 million, and $ 187.5 million, respectively.

For the years ended December 31, 2024 and 2023, increases in the valuation allowance in the amounts of $ 23.4 million and $ 23.7 million were recorded as an expense.

Under Section 382 of the Internal Revenue Code of 1986, as amended (the “Code”), the Company’s use of its federal net operating loss (“NOL”) carryforwards may be limited if the Company experiences an ownership change, as defined in Section 382 of the Code.

The use of NOLs from acquired businesses may also be limited under Section 382.

Such an annual limitation could result in the expiration of the NOL carryforwards before utilization.

Corresponding provisions of state law may limit the Company’s ability to utilize NOL carryforwards for state tax purposes.

As of December 31, 2024, the Company had $ 644.0 million of federal NOL carryforwards available to offset future taxable income.

Included in this amount is $ 0.9 million of

The One Big Beautiful Bill Act (“OBBBA”) was signed into law on July 4, 2025, and makes changes to the deductibility of certain business expenditures including interest expense, research and development expenditures, and property and equipment, and makes changes to elements of U.S.

cross-border taxation.

The Company implemented the changes enacted under OBBBA.

LIVEPERSON, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

federal NOL carryovers from the Company’s acquisition of Proficient in 2006, $ 49.4 million of federal NOL carryovers from the Company’s acquisition of Tenfold in 2021, $ 64.9 million of federal NOL carryovers from the Company’s acquisition of VoiceBase in 2021 and $ 1.0 million of federal NOL carryovers from the Company’s acquisition of WildHealth in 2022.

OBBBA impacted the Company’s deferred tax assets as of July 4, 2025, the date of enactment, via the reversal of $ 32.0 million of deferred tax assets resulting from capitalized research expenses incurred through December 31, 2024.

The reversal is reflected on the Company’s annual financial statements as of and for the year ended December 31, 2025.

The Company had a valuation allowance on certain deferred tax assets for the years ended December 31, 2025, 2024, and 2023 of $ 243.2 million, $ 234.6 million, and $ 211.2 million, respectively.

For the years ended December 31, 2025 and 2024, increases in the valuation allowance of $ 8.6 million and $ 23.4 million, respectively, were recorded as an expense.

As of December 31, 2025, the Company had $ 646.0 million of federal NOL carryforwards available to offset future taxable income.

Included in this amount is $ 49.4 million of federal NOL carryovers from the Company’s acquisition of Tenfold in 2021 and $ 64.9 million of federal NOL carryovers from the Company’s acquisition of VoiceBase in 2021.

Of these federal NOL carryforwards, $ 67.7 million were generated in taxable years ending on or before December 31, 2017 and will expire in various years through 2037.

Federal NOL carryforwards generated in taxable years ending after December 31, 2017, do not expire, but generally may only offset up to 80% of federal taxable income earned in a taxable year.

Section 382 of the Internal Revenue Code (“IRC Section 382”) limits a corporation’s ability to utilize NOL and tax credit carryforwards following an ownership change, as defined under IRC Section 382.

The Company experienced an ownership change effective September 12, 2025.

As a result, utilization of the Company’s federal NOL carryforwards is subject to an annual limitation of approximately $ 3.3 million.

On January 22, 2024, the Company entered into a Tax Benefits Preservation Plan designed to reduce the risk of substantial impairment to its NOLs that could result from an “ownership change” within the meaning of Section 382 of the Code.

17 unchanged sentences

Total $ ( 63,781 ) $ ( 131,538 ) $ ( 96,272 )

LIVEPERSON, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

——————————————

(1) Includes Bulgaria, Canada, France, India, Italy, Japan, Poland, Singapore and Spain.

(1) Includes Bulgaria, Canada, France, India, Italy, Japan, , Mexico, Poland, Singapore and Spain.

No additional provision has been made for U.S.

income taxes on the undistributed earnings of its wholly-owned Israeli subsidiary, LivePerson Ltd., as such earnings have been taxed in the U.S.

A provision for the undistributed earnings of the Company’s other foreign subsidiaries have not been provided because the Company intends to indefinitely reinvest such earnings outside of the U.S., though if these foreign earnings were to be repatriated in the future the related U.S.

A provision for the undistributed earnings of the Company’s other foreign subsidiaries has not been provided because the Company intends to indefinitely reinvest such earnings outside of the U.S., though if these foreign earnings were to be repatriated in the future the related U.S.

tax liability would be immaterial through December 31, 2025.

LIVEPERSON, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The provision for income taxes consists of the following:

13 unchanged sentences

Total provision for income taxes $ 3,452 $ 2,735 $ 4,163

The difference between the total income taxes computed at the federal statutory rate and the provision for income taxes consists of the following:

As further described in Note 1 - Description of Business and Summary of Signiﬁcant Accounting Policies , the Company has elected to prospectively adopt the guidance in ASU 2023-09.

The following table is a reconciliation of the U.S.

federal statutory rate of 21% to the Company’s eﬀective rate for the year ended December 31, 2025 in accordance with the guidance in ASU 2023-09:

LIVEPERSON, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Year ended December 31, 2025

Amount Percent

(In thousands)

Loss before provision for income taxes $ ( 63,781 )

Income tax benefit at U.S.

federal statutory rate ( 13,394 ) 21.00 %

State and local income taxes (net of federal income tax effect) (1)

1,702 ( 2.67 ) %

Foreign tax effects:

Goodwill impairment 2,513 ( 3.94 ) %

Rate differential ( 993 ) 1.56 %

Other 218 ( 0.34 ) %

Other foreign countries 282 ( 0.44 ) %

Effect of cross-border taxes laws 79 ( 0.12 ) %

Changes in valuation allowances 5,905 ( 9.26 ) %

Nontaxable or nondeductible items:

Goodwill impairment 7,053 ( 11.06 ) %

Stock-based compensation - excess tax benefit / (tax deficiency) 1,856 ( 2.91 ) %

Warrant revaluation ( 3,045 ) 4.77 %

Other nontaxable or nondeductible items 681 ( 1.07 ) %

Change in unrecognized tax benefits:

683 ( 1.07 ) %

Other adjustments

Other items ( 88 ) 0.14 %

Total income tax expense and effective rate $ 3,452 ( 5.41 ) %

(1) State taxes in California make up the majority (greater than 50%) of the tax effect in this category in 2025.

The difference between the total income taxes computed at the federal statutory rate and the provision for income taxes consists of the following:

Federal statutory rate 21.00 % 21.00 %

7 unchanged sentences

Goodwill impairment ( 7.96 ) % ( 2.59 ) %

( 7.96 ) % ( 2.59 ) % — %

Sale of subsidiary 7.18 % 1.69 %

7.18 % 1.69 % — %

Debt restructuring ( 1.83 ) % — %

3 unchanged sentences

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The amounts of income tax related taxes paid, net of refunds received, were as follows:

Year ended December 31, 2025

(In thousands)

United Kingdom 490

Netherlands ( 637 )

Total foreign 1,111

Income taxes, net of amounts refunded 1,166

Other taxes 41

Total taxes paid, net of refunds $ 1,207

The effects of temporary differences and federal NOL carryforwards that give rise to significant portions of federal deferred tax assets and deferred tax liabilities as of the dates presented:

(In thousands)

Deferred tax assets:

Deferred tax assets, net:

Net operating loss carryforwards $ 173,899 $ 172,923

10 unchanged sentences

Less valuation allowance ( 243,240 ) ( 234,620 )

Deferred tax assets, net of valuation allowance 30,290 33,699

Deferred tax assets, net 19,844 30,290

Deferred tax liabilities:

Property and equipment ( 9,929 ) ( 12,337 )

Intangibles amortization — ( 8,985 )

Goodwill amortization and contingent earn-out adjustments ( 9,607 ) ( 9,048 )

6 unchanged sentences

The Australian and German NOLs can be carried forward indefinitely.

For the federal NOLs, $ 573.7 million can be carried forward indefinitely, $ 0.9 million will expire between 2025 and 2030, and $ 69.4 million will expire between 2030 and 2037.

The Company has $ 491.1 million of state NOLs, of which $ 107.0 million can be carried forward indefinitely and $ 384.1 million expire between 2024 and 2045.

For the federal NOLs, $ 578.3 million can be

LIVEPERSON, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

carried forward indefinitely, $ 67.7 million will expire between 2030 and 2037.

The Company has $ 522.9 million of state NOLs, of which $ 133.6 million can be carried forward indefinitely and $ 389.2 million will expire between 2026 and 2045.

ASC 740-10 clarifies the accounting for uncertainty in income taxes recognized in the financial statements in accordance with other provisions contained within this guidance.

2 unchanged sentences

The amount recognized is measured as the largest amount of benefit that is greater than 50% likely of being realized upon ultimate audit settlement.

The Company had unrecognized tax benefits of $ 3.5 million as of December 31, 2024 and $ 3.1 million as of December 31, 2023, respectively, that would affect the effective tax rate if recognized.

The Company had unrecognized tax benefits of $ 3.8 million and $ 3.5 million as of December 31, 2025 and 2024, respectively, that would affect the effective tax rate if recognized.

Accrued interest and penalties included in the Company’s liability related to unrecognized tax benefits and recorded in Accrued expenses and other current liabilities was $ 1.2 million and $ 0.7 million as of December 31, 2025 and 2024, respectively.

There are no unrecognized tax benefits expected to reverse in the next twelve months and impact the effective tax rate.

LIVEPERSON, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows:

5 unchanged sentences

Gross increase for tax positions of current year 286 271 340

Uncertain tax basis classified as held-for-sale liabilities — — ( 401 )

Unrecognized tax benefits, end of year $ 3,822 $ 3,536 $ 3,061

2 unchanged sentences

Federal, and the years 2019 and forward for certain foreign jurisdictions.

Tax Legislation

On August 16, 2022, the Inflation Reduction Act of 2022 (“IRA”) was signed into law.

The IRA imposes a number of significant changes, including, among other things, a 15% minimum tax on the book income of certain corporations and a 1% excise tax on stock buybacks by U.S.

public companies.

Only limited guidance has been issued to date with respect to these changes.

The Company does not currently expect the tax-related provisions of the IRA to have a material impact on its financial results.

A statutory rate change in the United Kingdom was enacted as of the balance sheet date ended December 31, 2021.

Effective April 1, 2023, the tax rate increased from 19% to 25%.

The Company assessed and concluded the impact of the rate change is immaterial to its deferred taxes.

Equity Method Investment

On February 13, 2022, the Company and Pasaca Capital Inc.

(“Pasaca”) entered into a joint venture agreement (the “JV Agreement”) to form Claire, a joint venture to build, create, and administer a marketplace for health and well-being diagnostic testing.

Pursuant to the terms of the JV Agreement, the Company agreed to contribute a total of $ 19.0 million over a five-year period in exchange for a 19.2 % ownership interest in Claire.

Pasaca agreed to contribute $ 80.0 million to Claire over a five-year period in exchange for an 80.8 % ownership interest in Claire.

The Company accounts for its 19.2 % interest in Claire using the equity method of accounting.

The Company’s equity method investment in joint venture was reduced to zero during the prior year, based on the prior year losses, and remained at zero on the consolidated balance sheet as of December 31, 2024.

The Company recorded its ownership percentage of losses of Claire in Other (expense) income, net in the amount of $ 2.3 million for the year ended December 31, 2023.

Variable Interest Entities

In February 2022, the Company acquired WildHealth as well as certain variable interests that WildHealth had in four Professional Corporations (“PCs”).

The PCs were owned by a medical practitioner in accordance with certain state laws which restrict the corporate practice of medicine and require medical practitioners to own such entities.

WildHealth provided management and other services to the PCs in exchange for a management fee and provided financial support to the PCs through a revolving credit arrangement.

WildHealth also had separate agreements with the equity holder of the PCs where it may acquire and assign such equity interests for certain PCs.

The agreement entitled WildHealth to control rights sufficient to require the Company to consolidate the balance sheet and results of operations of the PCs as VIEs.

The Company determined that the PCs were VIEs as WildHealth was the primary beneficiary of the PCs.

The assets, liabilities, revenues, and operating results of the VIEs after elimination of intercompany transactions were not material as of and for the years ended December 31, 2024, 2023 and 2022.

LIVEPERSON, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

In the second quarter of 2024, the Company entered into an agreement for and completed the sale of 100 % of the equity in WildHealth.

As a result, as of December 31, 2024, the PCs related to WildHealth are no longer considered VIEs of the Company.

Refer to Note 19 - Divestitures for additional information.

Related Parties

Related parties include entities related to the Company’s directors or main stockholders as well as equity method affiliates.

During the year ended December 31, 2023, the Company provided services to Claire, an equity method affiliate (refer to Note 16 – Equity Method Investment for additional information on the equity method affiliate), in exchange for fees through certain commercial arrangements.

These arrangements facilitated Claire’s build out and operations.

In connection with the JV Agreement, the Company entered into commercial agreements with Claire, under which the Company agreed to provide custom software development and managed services in exchange for fees governed by the terms and conditions set forth therein.

In accordance with guidance under ASC 606, Claire was considered a customer of the Company.

No revenues were recognized for the services provided to Claire included in the Company’s consolidated statements of operations for the year ended December 31, 2024, compared to revenues of $ 3.8 million for the year ended December 31, 2023.

Fiscal 2024 Divestitures

In the second quarter of 2024, the Company completed the sale of 100% of the equity in WildHealth to a third party.

Pursuant to ASC Subtopic 205-20 , Presentation of Financial Statements - Discontinued Operations , the divestiture did not meet the criteria for presentation as a discontinued operation.

WildHealth was part of the Business segment and was a separate reporting unit.

Subsequent to the closing, the Company does not have ongoing involvement or arrangements with WildHealth.

Fiscal 2023 Divestitures

In the fourth quarter of 2022, the Company entered into a non-binding Letter of Intent to divest Kasamba, Inc.

and Kasamba LTD (together “Kasamba”) which represented the Company’s Consumer segment.

Pursuant to ASC Subtopic 360-10, Impairment or Disposal of Long-Lived Assets , the Company applied held for sale accounting treatment to the assets and liabilities of Kasamba.

Accordingly, the related net assets were separately presented in current assets and current liabilities as held for sale on the consolidated balance sheets as of December 31, 2022, up until the close of the transaction.

The held for sale classification also resulted in ceasing depreciation and amortization on the designated assets.

The Share Purchase Agreement between Ingenio, LLC and the Company closed on March 20, 2023.

In accordance with the Share Purchase Agreement, the Company sold all of the issued and outstanding shares of Kasamba for $ 16.9 million which was received in cash upon closing;

and $ 2.6 million deferred payment to be received within a year of the close transaction date .

$ 11.8 million was required to be held in various escrow accounts for up to 15 months, and was included in Restricted cash on the Company’s consolidated balance sheets;

however, $ 9.8 million of this escrow amount was released as of December 31, 2023 .

In June 2024, restricted cash of $ 2.0 million was released and was classified as Cash and cash equivalents on the consolidated balance sheet as of December 31, 2024.

The transaction resulted in a gain of $ 17.6 million, which was recognized and presented separately in Loss (gain) on divestiture on the Company’s consolidated statements of operations during the year ended December 31, 2023 .

Changes in and Disagreements With Accountants on Accounting and Financial Disclosure

1 unchanged sentence

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 8. Financial Statements and Supplementary Data