NEW YORK - Robert P. LoCascio, founder and former CEO of LivePerson, Inc. (NASDAQ: LPSN), has nominated two new candidates for the company's Board of Directors. This move comes as the conversational AI company faces significant stock value decline and operational challenges.
The two nominees, Walter Bachtiger and Michal Czwarno, offer expertise in artificial intelligence and business-to-business operations, which could be pivotal in LivePerson's efforts to recover from a substantial loss in revenue and stock price. Over the past year, LivePerson's stock has plummeted by roughly 80%, exacerbated by a 47% drop after the February 2024 earnings call, which revealed a $100 million revenue loss attributed to customer churn.
Bachtiger, a former LivePerson Vice President and current CEO of FinTech company TimeTrust, has a history of developing AI systems for SaaS and B2B markets. Czwarno, with a background in scaling software companies, has held leadership roles at Asana and DocuSign (NASDAQ:DOCU). Their combined experience is seen as crucial for LivePerson to address its recent challenges, including a debt restructuring plan in May 2024 that was not well-received by equity stockholders.
LoCascio, who owns approximately 2.4% of LivePerson's common stock, believes these nominations can help steer the company back to its market-leading position in AI. He emphasizes the need for a board with a deep understanding of the company's operations and the evolving AI market dynamics.
The goal is to realign LivePerson with its historical strategy of innovation and to capitalize on its unique data and platform assets. LoCascio is confident that with a refreshed board and strategic plan, the company can reduce customer churn, restore stockholder value, and reestablish its reputation in the AI industry.
The full biographies of the nominees highlight their relevant experience and understanding of the industry, which could be integral to LivePerson's turnaround. This announcement is based on a press release statement, and the definitive proxy statement will be filed with the SEC for the 2024 Annual Meeting of Stockholders.
In other recent news, LivePerson Inc. reported its Q2 2024 earnings, revealing a revenue of $79.9 million and an adjusted EBITDA of $8.2 million, exceeding expectations. The company's strategic progress was evident in a deal with Lynrock Lake addressing 2026 convertible notes and the early launch of new pricing. However, LivePerson also reported a year-over-year decline in B2B hosted services revenue by 17% and core recurring revenue by 18%.
The divestiture of Wild Health resulted in savings of $3 to $5 million in expenses and plans are underway to raise new capital to reduce debt and strengthen the balance sheet. Despite an expected sequential revenue decline, the company ended the quarter with $146 million in cash and anticipates improvements in new annual recurring revenue.
These recent developments highlight LivePerson's strategic moves to streamline operations and enhance financial health, despite some revenue challenges. The company's focus on cost reductions and strategic partnerships, as well as the anticipation of improved annual recurring revenue, underscores its commitment to navigate current market challenges while laying the groundwork for future growth.
InvestingPro Insights
In light of the recent developments at LivePerson, Inc. (NASDAQ: LPSN), a closer look at the company's financial health and stock performance through InvestingPro data reveals significant challenges and potential areas of concern. With a market capitalization of $136.65 million, the company's valuation reflects the impact of recent operational difficulties. The adjusted price-to-earnings (P/E) ratio stands at a negative 1.65, indicating that the company is not currently generating positive earnings. Furthermore, the revenue for LivePerson has contracted by 20.86% over the last twelve months as of Q2 2024, highlighting the issues related to customer churn and revenue loss that the company faces.
Despite these challenges, LivePerson has experienced a notable return over the last week, with a 36.43% increase in its stock price. This could be a reflection of market reactions to strategic changes or other short-term factors. However, it's important to note that analysts have revised their earnings downwards for the upcoming period, as per InvestingPro Tips, which suggests that investors should remain cautious.
InvestingPro Tips also indicate that LivePerson operates with a significant debt burden and may have trouble making interest payments on its debt, which is a critical consideration for stockholders. With the company's next earnings date set for November 6, 2024, investors will be keenly watching for signs of improvement or further decline.
For those interested in a more comprehensive analysis, InvestingPro offers additional tips on LivePerson, providing deeper insights into the company's financials, stock performance, and market position. These additional tips, which are available on the InvestingPro platform, could offer valuable guidance for investors considering LivePerson as part of their portfolio.
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