LivePerson, Inc. (LPSN): Business Model Canvas [Dec-2025 Updated]

You're digging into the new playbook for LivePerson, Inc. following their late 2025 strategic pivot, and honestly, understanding the nuts and bolts of their business model is key to valuing the shift. Here's the quick math: they are betting the farm on their Connected Experience Platform, promising large enterprises up to a 60% contact center cost reduction by leaning heavily into Generative AI, all while navigating cloud migration and aiming for that tight 2025 revenue guidance between $235 million and $240 million. This canvas breaks down exactly how they plan to keep that ~93% recurring revenue stream flowing by focusing R&D on LLMs and locking in those high-value relationships; dive in to see the key partnerships driving this transformation.

LivePerson, Inc. (LPSN) - Canvas Business Model: Key Partnerships

You're looking at the partners that help LivePerson, Inc. (LPSN) deliver its platform, and right now, the focus is clearly on AI infrastructure and deployment scale. The value here comes from embedding LivePerson's conversational AI into the enterprise tech stack, which means the right alliances are critical for both technology and reach.

The most significant recent development involves the expanded strategic alliance with Google Cloud. This deepens the technical integration to leverage Google Cloud's infrastructure and AI services, specifically incorporating Gemini 2.5 and Vertex AI directly into the LivePerson Connected Experience Platform. This platform is set to launch on the Google Cloud Marketplace this quarter, which is a major distribution play. On August 6, 2025, when this partnership expansion was announced, the market reacted strongly; LPSN stock gained 77.99% intraday, closing at $1.58, which added about $59M to the valuation, bringing the market cap to $134M at that time. This move is intended to help LivePerson, Inc. chase an annual revenue target of $235-$240 million for 2025, despite reporting last quarter's revenue at $60.15 million, a 19% dip year-over-year. LivePerson, Inc. currently powers nearly a billion conversational interactions monthly.

The deployment and services side relies heavily on System Integrators. Consider the long-standing strategic partnership with TTEC Holdings, Inc. (TTEC). TTEC operationalizes the LivePerson platform with its conversational messaging center of excellence, which consists of conversational designers and AI/bot developers across 100 customer experience hubs on six continents. Historical data from brands using this combined offering showed benefits like up to a 2x increase in associate efficiency and increases in CSAT exceeding 20%+. TTEC itself has grown its digitally delivered customer interactions by 700% since 2014.

For technology integration, LivePerson, Inc. emphasizes its open platform approach, which allows enterprises to integrate with existing CRM and CCaaS systems rather than forcing a full replacement. This composability is key. The Contact Center as a Service (CCaaS) market itself is large, projected to grow from $5.82 billion in 2024 to $17.12 billion by 2030, positioning LivePerson, Inc. to challenge established players like Genesys. Furthermore, LivePerson, Inc. is actively integrating with other major cloud ecosystems, announcing work with Amazon Web Services (AWS) to integrate Amazon Connect, which helps unify voice and digital interactions and can reduce operational complexity by eliminating separate telephony requirements. On the CRM side, Salesforce (CRM) saw a 0.43% rise on the day the Google partnership news broke, reflecting the broader ecosystem's positive sentiment.

The underlying infrastructure shift supports all these partnerships. In 2025, worldwide end-user spending on public cloud services is forecast to reach $723.4 billion. It's defintely standard now, as about 94% of enterprise organizations use cloud computing infrastructure. The global cloud migration market is projected to hit $20.5 billion by 2025. LivePerson, Inc.'s move to Google Cloud Marketplace is part of this massive industry trend.

Here's a quick look at some quantifiable partnership impacts:

Partner Category	Specific Partner/Technology	Key Metric/Data Point
AI/Cloud Infrastructure	Google Cloud (Gemini 2.5/Vertex AI)	Stock gain of 77.99% on partnership announcement date
System Integrator	TTEC	Operational presence across 100 CX hubs
CCaaS Integration	Amazon Connect (AWS)	Aims to reduce operational complexity by eliminating separate telephony
Market Context	CCaaS Market Size (2024)	$5.82 billion
Deployment Scale	LivePerson Platform Usage	Powers nearly a billion conversational interactions monthly

You'll want to track the actual revenue contribution from the Google Cloud co-selling programs starting next quarter; that will be the real test of this alliance's financial impact.

Finance: draft 13-week cash view by Friday.

LivePerson, Inc. (LPSN) - Canvas Business Model: Key Activities

You're focused on the core engine driving LivePerson, Inc.'s value proposition right now-the activities they must execute flawlessly to stabilize and pivot. Honestly, the numbers from late 2025 show a company deep in a transformation, balancing aggressive cost control with necessary investment in AI. Here's the quick math on what they are actively doing.

Research and Development (R&D) of Generative AI and LLMs

LivePerson, Inc. is prioritizing R&D to embed generative AI capabilities directly into its platform, a key differentiator against competitors. This activity is evidenced by the rapid adoption metrics seen across the customer base in 2025. The focus is on orchestration, allowing enterprises to integrate their own LLMs and tools.

Key activity indicators for AI R&D success:

• A 14% rise in customers using generative AI tools in Q1 2025.
• A 25% sequential increase in conversations powered by the Generative AI suite in Q1 2025.
• By Q2 2025, 17% of all conversations leveraged at least one generative AI feature.
• The platform supports bring your own LLM flexibility, a capability noted in the August 2025 Gartner Competitive Landscape report.
• Strategic partnerships deepened with Google Cloud to embed Gemini/Vertex AI and a relationship with Databricks to support unified conversational data.

Maintaining and scaling the Connected Experience Platform

The Connected Experience Platform is the delivery mechanism for all value, and its scale and recognition are critical to maintaining enterprise trust. You need to see the volume to understand the infrastructure load and the stickiness of the offering. This activity is about keeping the lights on while proving market leadership.

The platform's operational scale and external validation as of late 2025 include:

Metric	Value	Context/Date
Conversational Interactions Powered	Nearly a billion monthly	Late 2025
Enterprise Brands Served	Over 1,000	Late 2025
Geographic Reach	100+ countries	Late 2025
Gartner Recognition	Niche Player in 2025 Magic Quadrant for Conversational AI Platforms	August 2025
Industry Recognition	#1 Most Innovative AI Company by Fast Company	Late 2025

If onboarding takes 14+ days, churn risk rises, so platform stability and ease of integration are paramount.

Enterprise sales and high-touch customer onboarding

Sales activity in 2025 has been characterized by lower overall deal volume but a focus on expanding value within the existing, high-value customer base. The Average Revenue Per Customer (ARPC) metric shows success in this expansion effort, even as total revenue declined due to prior cancellations.

Here's a look at the sales and customer value metrics through Q3 2025:

Period	Deals Signed (Total)	TTM ARPC	Net Revenue Retention (NRR)
Q1 2025	50 (45 existing, 5 new)	$640,000 (up 2.4% YoY)	80%
Q2 2025	38 (35 existing, 3 new)	$655,000 (up 4.0% YoY)	78%
Q3 2025	28	Not explicitly stated, but YoY revenue decline was 19%	80.4% (Sequential increase from Q2)

The company signed expansions with major clients, including a leading U.S. health plan provider in Q3 2025. Still, management noted that extended AI approval cycles delayed some large deals from Q1 into Q2.

Ongoing cost rationalization and financial stabilization

This is arguably the most critical activity for the near term, as the company aggressively worked to right-size its cost structure and repair its balance sheet. The results show success in achieving positive Adjusted EBITDA ahead of schedule in Q2 and Q3 2025, and a major deleveraging event was completed in September 2025.

Financial stabilization achievements through Q3 2025:

• Q3 2025 Adjusted EBITDA reached $4.8 million, above the high end of guidance.
• Q3 2025 Net Income was $8.7 million, a turnaround from a $28.3 million net loss in Q3 2024, largely due to a gain on troubled debt restructuring.
• The strategic refinancing materially deleveraged the company by $226 million.
• The refinancing captured a significant $181 million debt discount, directly accretive to shareholders.
• Debt maturities were extended to December 2029.
• The company is positioned to generate positive cash flow in 2026.

The full-year 2025 Adjusted EBITDA guidance was raised to a range of $7.5 million to $12.5 million as of the Q3 report. The company ended Q3 2025 with $107 million of cash on the balance sheet, down from $183.2 million at the end of 2024.

Here is the revenue and profitability snapshot for the reported quarters:

Metric (Millions USD)	Q1 2025	Q2 2025	Q3 2025
Total Revenue	$64.7	$59.6	$60.2
Adjusted EBITDA	$0.2	$2.9	$4.8
Recurring Revenue (% of Total)	93%	92% (Actual)	92%

Finance: draft 13-week cash view by Friday.

LivePerson, Inc. (LPSN) - Canvas Business Model: Key Resources

You're looking at the core assets LivePerson, Inc. (LPSN) relies on to run its business as of late 2025. These aren't just line items on a balance sheet; they are the engines driving their conversational AI strategy.

Proprietary Conversational Cloud platform and IP.

The platform itself is central. It's the award-winning Conversational Cloud that world-leading brands use to connect with consumers. This platform is recognized for its capabilities, for instance, being named a Leader in multiple G2 Spring 2025 Grid Reports across categories like AI Agents and Bot Platforms. Furthermore, LivePerson, Inc. was recognized as a Niche Player in the 2025 Gartner Magic Quadrant for Conversational AI Platforms. This intellectual property (IP) is what allows enterprises to integrate with existing CRM and CCaaS systems rather than forcing a complete technology overhaul.

Rich dataset from nearly a billion conversational interactions monthly.

This volume of data is a massive, self-reinforcing resource. LivePerson, Inc. powers nearly a billion conversational interactions every month. This generates a uniquely rich data set that feeds the AI models, which is critical for improving outcomes and safety tools. Think of it this way: more conversations mean smarter AI, which attracts more customers, creating a powerful loop.

Here are some context points around that data scale:

• The data supports AI-powered solutions for contact center transformation.
• It helps supercharge agent productivity.
• It is used to deliver more personalized customer experiences.

Key AI talent and engineering expertise.

The people building and refining the platform are indispensable. While specific headcount isn't public, the output of this talent is visible in recent product advancements. For example, the company highlighted the exciting launch of Conversation Simulator, which they believe represents a significant new opportunity. Their engineering focus also supports an open platform strategy, including capabilities like supporting bring your own LLM (Large Language Model) flexibility. This expertise is what keeps the platform competitive, especially given Fast Company named LivePerson, Inc. the #1 Most Innovative AI Company in the world.

Enterprise customer base with an ARPC of $665,000 in Q3 2025.

The customer base, particularly the enterprise segment, represents stable, high-value recurring revenue. For the third quarter of 2025, the trailing-twelve-months average revenue per enterprise and mid-market customer (ARPC) reached $665,000. This figure is up 5.6% compared to the same period the prior year. This metric, calculated using only recurring revenue, shows the stickiness and value derived by their core clients. The total revenue for Q3 2025 was $60.2 million.

You can see the key financial and operational metrics that underpin these resources right here:

Metric	Value	Period/Context
Trailing-Twelve-Months ARPC	$665,000	Q3 2025
ARPC Year-over-Year Growth	5.6%	Q3 2025
Total Revenue	$60.2 million	Q3 2025
Conversational Interactions Volume	Nearly a billion monthly	As of 2025
Enterprise Customer Count (New/Renewal Deals)	28 total (26 existing, 2 new)	Q3 2025

Finance: draft the 13-week cash flow view incorporating the Q3 revenue run rate by Friday.

LivePerson, Inc. (LPSN) - Canvas Business Model: Value Propositions

You're looking at the core promises LivePerson, Inc. (LPSN) is making to its enterprise customers as of late 2025. These aren't just buzzwords; they are tied to measurable outcomes and platform capabilities that are actively being adopted.

AI-powered cost savings remain a headline value proposition, with LivePerson, Inc. claiming up to a 60% reduction in contact center costs for its users. While the exact figure is a claim, the impact of their AI suite is showing up in operational metrics. Early data points suggest a 30% decrease in agent ramp time and a 50% reduction in the time required to test AI bots, which directly translates to lower operational expenditure and faster time-to-value for new deployments.

The platform's focus is on Omnichannel Conversation Orchestration across digital and voice channels. This market shift treats the dialogue, not the channel, as the core unit of interaction, a trend recognized in the 2025 Gartner Competitive Landscape: Digital Customer Service. LivePerson, Inc. powers nearly a billion conversational interactions every month, providing the data and tools to manage these complex, continuous conversations.

A key differentiator is the Open platform supporting 'bring your own LLM' flexibility. This composability and API-first architecture allows large enterprises to integrate their preferred Large Language Models (LLMs) rather than being locked into a single vendor stack. This aligns with the market trend emphasizing vendor-agnostic solutions for building tailored customer engagement systems.

The introduction of the New Conversation Simulator in November 2025 directly addresses the primary barriers to generative AI adoption: accuracy, compliance, and risk. This tool uses synthetic customer personas to test and train both AI agents and human agents before they interact with real customers. Brands like Telstra are already actively using the product, aiming to shift AI deployment from a high-risk leap to a repeatable, proven process. This capability is designed to accelerate AI system onboarding, potentially reducing training periods from weeks to hours.

The overall value proposition centers on Accelerating digital transformation for large enterprises. This is evidenced by the platform's scale and the adoption of its newest features. As of Q3 2025, nearly 20% of all conversations on the LivePerson, Inc. platform are using generative AI capabilities. Furthermore, nearly 60 customers are using generative AI at scale, with about one-third of those seeing 50% or more of their conversations powered by it.

Here's a quick look at the platform's scale and recent financial performance, which underpins its ability to deliver these value propositions:

Metric	Value (As of Q3 2025 or Latest Guidance)	Context
Total Revenue (Q3 2025)	$60.2 million	Exceeded high end of guidance.
Recurring Revenue (Q3 2025)	$55.1 million (or 92% of total revenue)	Indicates core subscription stability.
Adjusted EBITDA (Q3 2025)	$4.8 million	Above the high end of guidance range.
Full Year 2025 Revenue Guidance	$235 million - $240 million	Raised guidance by $2.5 million at the midpoint.
TTM Average Revenue Per Customer (ARPC)	$665,000	Up 5.6% year-over-year.
Net Revenue Retention (NRR)	80.4%	Up from 78.2% in Q2 2025.

The focus on advanced AI is clearly driving customer engagement metrics, even as the company manages revenue headwinds from customer cancellations and downsells. The platform's ability to support complex, multimodal interactions is what underpins the promised efficiencies:

• Brands using generative AI at scale: Nearly 60 customers.
• Conversations powered by GenAI (Q3 2025): Nearly 20% of total platform volume.
• Agent ramp time improvement (early data): 30% decrease.
• AI bot test time reduction (early data): 50% reduction.
• Enterprise brands using the platform: Over 1,000 in over 100 countries.

If onboarding takes 14+ days, churn risk rises, which is why the Conversation Simulator's promise to reduce training time is so critical for near-term retention.

Finance: draft 13-week cash view by Friday.

LivePerson, Inc. (LPSN) - Canvas Business Model: Customer Relationships

You're looking at how LivePerson, Inc. manages its relationships with its enterprise and mid-market clients, which is critical given the recent revenue headwinds and the focus on financial stabilization.

Dedicated Enterprise Account Management for strategic clients

LivePerson, Inc. maintains a dedicated structure to support its strategic clients, which number over 1,000 enterprise brands across more than 100 countries. The focus here is on securing the recurring revenue base, which is expected to be 93% of the total projected full-year 2025 revenue of between $235 million and $240 million. This high-touch approach is designed to ensure the platform remains embedded in core operations, especially as clients navigate complex AI integrations. The value placed on these relationships is reflected in the Average Revenue Per Customer (ARPC) for enterprise and mid-market segments.

High-touch professional services for complex deployments

For deployments involving significant change, such as the migration to Google Cloud Platform (GCP) or new AI feature rollouts, LivePerson, Inc. relies on its Professional Services segment. This revenue stream, while declining year-over-year, is a direct measure of the high-touch effort required for complex implementations. For the third quarter of 2025, Professional Services Revenue was $8.979 million. To be fair, this is down from $11.589 million in the same quarter last year, showing a shift in focus, but these services remain essential for complex, high-value customer onboarding and transformation projects.

Strategic partnership approach for digital transformation

The relationship strategy heavily leans on strategic partnerships to deliver value at scale and reduce customer friction during adoption. The company highlighted its expanded partnership with Google and the planned launch of its integration with Amazon Connect in the second quarter of 2025. This 'innovation without disruption' approach is key; it lets customers adopt new capabilities, like Generative AI, without a full platform replacement. Customer adoption of generative AI tools showed measurable progress, with customers using gen-AI tools increasing 14% quarter-over-quarter in Q1 2025, and gen-AI-powered conversations increasing 25% sequentially in that same period. This shows the partnership ecosystem is helping drive product stickiness.

Focus on renewals and upsells to existing customers

The near-term health of LivePerson, Inc. is tied directly to retaining and expanding its existing customer base. Management noted that the tone of customer conversations started to change following the completion of the debt refinancing agreement, which resolved a concern heard from customers regarding financial stability. This directly impacts renewal success. The Net Revenue Retention (NRR) metric is the clearest indicator here; it stood at 80% in Q1 2025, improving slightly to 80.4% in Q3 2025 from 78.2% in Q2 2025. You want to see this number form a floor, as an NRR below 100% means the existing base is shrinking in value. Deal activity strongly favors existing clients; in Q3 2025, the company signed 28 total deals, with 26 being expansions and renewals, versus only 2 new logo deals. Similarly, in Q1 2025, 45 out of 50 deals were expansions and renewals. This focus on existing customers is also driving up the ARPC.

Here's a quick look at the key customer-facing financial metrics as of the latest reported quarters:

Metric	Q1 2025 Value	Q2 2025 Value	Q3 2025 Value
Total Revenue (Millions USD)	$64.7	$59.6	$60.2
Net Revenue Retention (NRR)	80%	78.2%	80.4%
TTM ARPC (Thousands USD)	$640	$655	$665
Total Deals Signed	50	38	28
Expansion/Renewal Deals	45	35	26

The growth in ARPC to $665,000 in Q3 2025, up 5.6% year-over-year, shows that while the total customer count might be under pressure, the most valuable accounts are spending more on the platform. Finance: draft 13-week cash view by Friday, focusing on the cash position of $107 million at the end of Q3 2025.

LivePerson, Inc. (LPSN) - Canvas Business Model: Channels

You're looking at how LivePerson, Inc. gets its Conversational Cloud platform into the hands of major enterprises, which is key given their focus on large, complex digital transformation projects. The channel strategy is clearly bifurcated between direct selling muscle and scaling through partners.

Direct Enterprise Sales Team (primary channel)

The direct sales team remains the engine for landing the largest, most strategic accounts. This team focuses on driving new logo acquisition alongside expanding usage within the existing base. You can see the direct sales activity reflected in the deal flow metrics reported through mid-2025.

For instance, in the first quarter of 2025, LivePerson, Inc. signed a total of 50 deals, which broke down into 45 existing customer expansions/renewals and 5 new customer logos. Then, in the second quarter of 2025, the direct team closed 38 deals, consisting of 35 existing and 3 new customers. This shows the ongoing, albeit fluctuating, cadence of enterprise engagement.

The quality of the enterprise customer base is tracked via Average Revenue Per Customer (ARPC), which is calculated using only recurring revenue. The TTM ARPC saw healthy growth, moving from approximately $625,000 in Q1 2024 to $640,000 in Q1 2025 (a 2.4% increase), and further to $655,000 in Q2 2025 (a 4.0% year-over-year increase for that quarter). Still, Net Revenue Retention (NRR) is a metric to watch; it was reported at 80% in Q1 2025 and dipped slightly to 78% in Q2 2025. If onboarding takes 14+ days, churn risk rises.

Here's a quick look at those key customer metrics as of the first half of 2025:

Metric	Q1 2025 Value	Q2 2025 Value
Total Deals Signed	50	38
New Logo Deals	5	3
TTM ARPC (Recurring Revenue Basis)	$640,000	$655,000
Net Revenue Retention (NRR)	80%	78%

Partner Ecosystem (Solution and Technology Partners)

LivePerson, Inc. is actively shifting toward a more partner-centric sales motion to scale efficiently, especially as they integrate deeper with other enterprise systems. The goal here is to make the Conversational Cloud a natural extension of platforms that brands already use.

Management set an aggressive target for 2025, aiming for a 35% partner attach rate for total bookings value. They noted this target represents a significant increase, stating it's more than 2x what they were seeing previously, indicating a nascent but rapidly developing channel. They also pointed to several of their largest deals in Q4 being partner-led, which supports this strategic pivot.

The technology partner focus includes key integrations designed to drive adoption through existing infrastructure. For example, the company highlighted the planned launch of its integration with Amazon Connect in the second quarter of 2025, which directly targets a major cloud contact center platform.

The ecosystem includes:

• Technology Partners providing deep platform integrations.
• Solution Partners delivering implementation and managed services.
• Partners driving adoption via major contact center platforms.

Cloud Marketplaces (e.g., Google Cloud Marketplace)

While specific revenue figures from individual cloud marketplaces aren't broken out, the strategy involves making the platform easily procurable and deployable through major hyperscalers. This reduces friction for customers who prefer to consolidate their cloud spending.

The mention of expected cloud migration costs related to GCP (Google Cloud Platform) in 2025 suggests that the Google Cloud Marketplace is a relevant, though perhaps still developing, route to market or a key area of operational focus influencing margins.

Digital marketing and web-based demo requests

This top-of-funnel activity supports the direct sales team by generating qualified leads. The overall strategy emphasizes the platform's ability to drive tangible business outcomes, which is the core message used in digital outreach.

The company's messaging focuses on how their solutions:

• Drive increased sales.
• Improve customer satisfaction scores.
• Reduce operational costs.

The overall trailing twelve-month revenue as of September 30, 2025, was reported at $258 million, providing the financial context for all these channel efforts.

Finance: draft 13-week cash view by Friday.

LivePerson, Inc. (LPSN) - Canvas Business Model: Customer Segments

You're looking at the core clientele LivePerson, Inc. is focused on serving as they push their Conversational AI platform. This segment is exclusively enterprise-grade, meaning they target the largest organizations with complex, high-volume customer interaction needs. Honestly, the numbers show a clear focus on retaining and expanding within this high-value pool.

The foundation of LivePerson, Inc.'s customer base is built upon serving the largest global entities. The company's platform is trusted by over 1,000 enterprise brands operating across more than 100 countries. This global reach is a key resource for them, providing a massive data set for AI training and validation.

The pursuit of AI-driven customer service is what pulls in the mid-market companies alongside the largest enterprises. The financial commitment from these clients is substantial, as shown by the Average Revenue Per Customer (ARPC) metrics. For the trailing-twelve-months ending in Q2 2025, the ARPC for enterprise and mid-market customers stood at $655,000, which was a 4.0% increase year-over-year for that quarter. Even in Q1 2025, the ARPC was reported at $640,000, up 2% year-over-year, suggesting successful upselling or retention of higher-spending accounts.

LivePerson, Inc. has clearly prioritized specific, high-spend verticals where customer interaction volume and complexity are naturally high. While the exact revenue split isn't fully detailed for all verticals, the deal activity gives us concrete examples of the types of companies they are closing and renewing:

• Financial Services: A global financial services company was noted for a renewal/expansion in Q2 2025.
• Retail: A major European retailer and one of Australia's largest retail groups were mentioned as renewal/expansion customers in Q2 2025.
• Telecom: A leading North American telecommunications provider deployed AI Copilot to over 7,000 agents.
• Healthcare: A leading U.S. health plan provider was part of the Q2 2025 renewal/expansion activity.

The overarching theme for these customers is contact center transformation, which is now heavily intertwined with Generative AI (GenAI) adoption. LivePerson, Inc. is actively migrating its base to these newer capabilities. Here's a look at the customer engagement metrics tied to this transformation:

Metric	Value (as of late 2025)	Period/Context
Customers Paying for GenAI Solutions	Over 70	As of Q2 2025
Top 100 Customers Using GenAI	23	As of Q2 2025
Sequential Growth in GenAI Customers	20%	Q2 2025
GenAI Conversations Powered	Over 6 million	Q2 2025
Sequential Growth in GenAI Conversations	165%	Q2 2025
Agents Supported by AI Copilot (Example)	Over 7,000	North American Telecom Provider

Customer acquisition activity shows a consistent focus on securing new logos while prioritizing existing relationships. In Q2 2025, LivePerson, Inc. signed 38 deals total, with 35 being existing customer expansions/renewals and only 3 being new logos. This pattern of renewal focus continued in Q3 2025, with 28 deals signed, including 26 existing and 2 new customers, one of which was a global industrial company. You can see the sales engine is definitely leaning on the existing base for near-term stability.

For context on the geographic split of the revenue base in Q1 2025, U.S. revenue accounted for $40 million (62%), with international revenue at $24.7 million (38%).

LivePerson, Inc. (LPSN) - Canvas Business Model: Cost Structure

You're looking at the major cash outflows for LivePerson, Inc. as of late 2025. Honestly, the cost structure is heavily weighted toward innovation and supporting the existing platform, especially with the shift to generative AI.

High R&D costs for developing and integrating GenAI capabilities represent a significant, ongoing investment. While specific 2025 Research and Development Expenses are not explicitly broken out in the latest summaries, the focus on AI is clear. LivePerson highlighted the launch of Conversation Simulator and expanding Google Gemini integrations as key product innovations fueling future growth. These development efforts require substantial capital allocation to maintain a competitive edge in conversational AI orchestration.

Cloud infrastructure and hosting expenses are a known, material cost, particularly due to the ongoing platform modernization. For instance, in the first quarter of 2025, the company reported $0.1 million in IT infrastructure realignment costs related to consolidating and migrating data centers to the cloud. This points directly to the capital and operational expenditure associated with the GCP migration efforts mentioned in their strategy updates. The overall Cost of Revenue, which includes hosting, is a key line item to watch.

Sales and Marketing (S&M) expenses are essential for driving new bookings, though the company has been actively rationalizing costs. For Q3 2025, the company noted that adjusted EBITDA performance benefited from cost optimization and reductions in consulting and Gainshare labor, which often fall under S&M or G&A. The Sales, General, and Administrative (SG&A) Expenses line item on the income statement captures this, though the precise S&M spend for the full year 2025 isn't immediately available from the summaries.

Employee compensation is a major component, especially given the need for specialized talent. Compensation costs vary widely based on role, reflecting the premium for AI expertise. Here's a snapshot of reported salary data, which gives you a sense of the pay scales driving this expense:

• Median yearly total compensation reported is approximately $142,000.
• The average annual total compensation is reported around $266k, with the top 10% earning more than $414k per year.
• Highest reported total compensation for a Project Manager is $402,000.
• Lower-end roles, like a Customer Service Representative, average around $33,944 annually.

Interest expense related to debt financing is a recurring financial charge. Looking at historical trends, LivePerson's Net Non-Operating Interest Income Expense for the latest twelve months (LTM) ending Q3 2025 was -$24.274 million. This figure reflects the cost of servicing the company's debt, which was strategically refinanced in September 2025 to extend maturities to 2029, a move intended to stabilize the financial foundation.

To give you a clearer picture of the cost structure context based on recent performance, here are some key financial metrics from Q3 2025:

Financial Metric (Q3 2025)	Amount (Millions USD)	Context
Total Revenue	$60.2	Above guidance midpoint.
Net Income (GAAP)	$8.7	Benefited from a $27.7 million gain on troubled debt restructuring.
Adjusted Operating Loss	$(0.7)	Compared to adjusted operating income of less than $0.1 million in Q3 2024.
Adjusted EBITDA	$4.8	Above the high end of guidance.
Cash Balance (End of Q3 2025)	$106.7	Down from $183.2 million at December 31, 2024.

The company's full-year 2025 revenue guidance is currently set between $235 million and $240 million, with an expected Adjusted EBITDA range of $7.5 million to $12.5 million. Finance: draft 13-week cash view by Friday.

LivePerson, Inc. (LPSN) - Canvas Business Model: Revenue Streams

You're looking at how LivePerson, Inc. actually brings in the money, and honestly, it's heavily weighted toward the predictable stuff. The core of their business model relies on getting customers to commit to the platform over time.

The biggest piece, by far, is subscription revenue from platform access. This is your recurring revenue, the stuff that gives you a clearer line of sight into future performance. For the full year 2025, the expectation is that this recurring revenue will represent approximately 93% of total revenue. To give you a concrete example from the first quarter of 2025, that recurring stream hit $60.4 million out of total revenue of $64.7 million.

Here's a quick look at how the revenue sources broke down based on the first quarter of 2025 results, which helps map out the current structure:

Revenue Stream Category	Q1 2025 Amount	Year-over-Year Change (Q1 2025)
Recurring Revenue (Platform Access/Hosted Services)	$60.4 million	Down 22%
Professional Services Revenue	$9.6 million	Down 30%
Total Revenue (Q1 2025)	$64.7 million	Down 24.0%

Next up, you have professional services revenue. This covers the work needed to get clients up and running-things like implementation, customization of the AI flows, and training their teams. In Q1 2025, this non-recurring component was $9.6 million. If onboarding takes 14+ days, churn risk rises, but getting that initial setup right is key to locking in the recurring fee later.

Now, about usage-based fees tied to conversational volume or AI consumption-this is generally bundled within the recurring platform access fee structure, often tiered based on volume or features used. While LivePerson, Inc. doesn't break out a separate 'usage fee' line in the high-level guidance, the adoption of their AI is a clear indicator of consumption. Management noted a 45% sequential increase in conversations leveraging Generative AI capabilities in Q2 2025, showing that while the base subscription is sticky, the actual usage intensity is climbing.

Looking ahead, the company's current full-year 2025 revenue guidance is set between $230 million and $240 million. That's the number Finance needs to use for the current cash flow projections.

• Subscription revenue is the bedrock, targeted at 93% of the total.
• Professional Services revenue was $9.6 million in Q1 2025.
• Trailing-twelve-months average revenue per enterprise and mid-market customer (ARPC) was $655,000 as of Q2 2025.

Finance: draft 13-week cash view by Friday.