Liveperson (LPSN) risk factors, FY2024 10-K

Risks Related to Operating our Business

1. 01The success of our business depends on retention of existing customers and their purchase of additional services, and attracting new customers
2. 02Supporting our customer base requires intensive personnel, infrastructure and resource commitment, and if we are unable to scale our operations and increase productivity, we may not be able to successfully implement our business plan
3. 03Our business depends significantly on our ability to retain our key personnel, attract new personnel, and manage attrition
4. 04Our contingent pricing arrangement program offers contingent pricing and if we are unsuccessful at achieving customer objectives, the program could result in operating losses
5. 05Our expansion into new products, services, and technologies could subject us to additional risks
6. 06If we do not successfully integrate past or potential future acquisitions, we may not realize the expected business or financial benefits and our business could be adversely impacted
7. 07If we do not effectively implement our plans to migrate our technology infrastructure to the public cloud, our operations could be significantly disrupted
8. 08Our sales cycles can be lengthy, and the timing of sales can cause our operating results to vary significantly
9. 09Delays in our implementation cycles could have an adverse effect on our results of operations
10. 10Our services are subject to payment-related risks
11. 11fees and lose our ability to accept credit and debit card payments from our customers or facilitate other types of online payments, and our business and operating results could be adversely affected
12. 12Our reputation depends, in part, on factors which are partially or entirely outside of our control
13. 13Increased regulatory uncertainty and conflicting stakeholder views regarding environmental, social and governance (“ESG”) matters may increase our costs, harm our reputation, or otherwise adversely impact our business

Risks Related to our Financial Condition and Operating Results

1. 14Our quarterly revenue and operating results may fluctuate significantly, which may cause a substantial decline in the trading price of our securities
2. 15In the past we have experienced losses, we had an accumulated deficit of $991.3 million as of December 31, 2024 and we may incur losses in the future
3. 16The non-payment or late payment of amounts due to us from a significant number of customers may negatively impact our financial condition or make it difficult to forecast our revenues accurately
4. 17There are inherent limitations on the effectiveness of our controls
5. 18As a “smaller reporting company,” we may comply with certain reduced reporting and disclosure requirements which could make our common stock less attractive to investors
6. 19Because we recognize revenue from subscriptions for our service over the term of the subscription, declines in our business may not be immediately reflected in our operating results
7. 20If our goodwill or long-lived assets become impaired, we may be required to record a significant charge to earnings

Risks Related to Industry Dynamics and Competition

1. 21If we are unable to develop and maintain successful relationships with partners, service partners, social media, and other third-party consumer messaging platforms and endpoints, our business, results of operations, and financial condition could be adversely affected
2. 22If we are unable to effectively operate on mobile devices, our business could be adversely affected
3. 23The markets in which we participate are highly competitive, and we may lose customers and revenue if we are not able to innovate or effectively compete
4. 24We may be unable to respond to rapid technological change and changing customer preferences in the online sales, marketing, customer service, and/or online e-commerce industries and this may harm our business
5. 25If any of our new services, including upgrades to our current services, do not meet our customers’ or consumers’ expectations, we could lose customers and our business may be harmed. Updating our technology may require significant additional capital expenditures
6. 26Downturns in the global economic environment or in particular industries in which our sales are concentrated may adversely affect our business and results of operations

Risks Related to Security Vulnerabilities and Service Reliability

1. 27Failures or security breaches in our services or systems, those of our third-party service providers, customers or partners, including those resulting from cyber-attacks, security vulnerabilities, defects, or errors, could harm our business
2. 28We may be liable if third parties access or misappropriate confidential or personal data from our systems or services
3. 29We provide service-level commitments to certain customers. If we do not meet these contractual commitments, or if we suffer significant outages, we could be obligated to provide credits or refunds or face contract terminations, which could adversely affect our revenue and harm our reputation
4. 30We are dependent on technology systems and third-party content that are beyond our control
5. 31Technological or other defects could disrupt or negatively impact our services, which could harm our business and reputation
6. 32Our products are complex, and errors, failures, or “bugs” may be difficult to correct
7. 33Failure to license necessary third-party software for use in our products and services, or failure to successfully integrate third-party software, could cause delays or reductions in our sales, or errors or failures of our service
8. 34successfully license and integrate third-party technology, we could experience a reduction in functionality and/or errors or failures of our products, which may reduce demand for our products and services
9. 35Our business is subject to the risks of earthquakes, fires, floods, and other natural catastrophic events and to interruption by man-made problems such as terrorism or cyber-attacks

Risks Related to Regulatory and Data Privacy Issues

1. 36Our business is subject to a variety of U.S. and foreign laws, and existing, new and developing regulatory or other legal requirements could subject us to claims or materially impact our business
2. 37previously mentioned “spyware” legislation were changed to include web analytics, such legislation could apply to the technology we use and potentially restrict our ability to conduct our business
3. 38services to our customers. As regulatory scrutiny of AI continues to grow, we may need to modify or restrict certain AI-driven functionalities in our products or services, which could impact their adoption or effectiveness
4. 39We are the subject of a number of ongoing Actions that have resulted in significant expense, and adverse developments in our ongoing Actions and/or future Actions could have a material adverse effect on our business, results of operations and financial condition
5. 40We may be subject to governmental export controls and economic sanctions regulations that could impair our ability to compete in international markets due to licensing requirements and could subject us to liability if we are not in compliance with applicable laws
6. 41Changes to trade policy, including tariff and customs regulations, or failure to comply with such regulations, may have an adverse effect on our business, financial condition and results of operations
7. 42Industry-specific regulation is evolving and unfavorable industry-specific laws, regulations, or interpretive positions could harm our business
8. 43In some cases, industry-specific laws, regulations or interpretive positions may also apply directly to us as a service provider. Any failure or perceived failure by us to comply with such requirements could have a material adverse impact on our business and results of operations
9. 44Future regulation of the internet or mobile devices may result in decreased demand for our services and increased costs of doing business
10. 45Climate change and environmental and other sustainability regulations or requirements could adversely impact our business

Risks Related to our Intellectual Property

1. 46Our products and services may infringe upon intellectual property rights of third parties and any infringement could require us to incur substantial costs and may distract our management
2. 47Our business and prospects would suffer if we are unable to protect and enforce our intellectual property rights
3. 48Issues in the use of AI in our product offerings may result in reputational harm, regulatory compliance issues or liability
4. 49We may be subject to legal liability and/or negative publicity for the services provided to consumers via our technology platforms
5. 50In addition, negative publicity and user sentiment generated as a result of fraudulent or deceptive conduct by customers of our technology platforms could damage our reputation, reduce our ability to attract new users or retain our current customers, and diminish the value of our brand

Risks Related to our International Operations and Tax Issues

1. 51Our results of operations may be adversely impacted due to our exposure to foreign currency exchange rate fluctuations
2. 52We may be unsuccessful in expanding our operations internationally due to additional regulatory requirements, tax liabilities, currency exchange rate fluctuations, and other risks, which could adversely affect our results of operations
3. 53Our operations may expose us to greater than anticipated income, non-income, and transactional tax liabilities, which could harm our financial condition and results of operations
4. 54Our ability to use our net operating losses to offset future taxable income may be subject to certain limitations
5. 55Political, economic, and military conditions in Israel could negatively impact our Israeli operations

Risks Related to our Outstanding Convertible Notes

1. 56Servicing our debt may require a significant amount of cash, and we may not have sufficient cash flow from our business to pay our indebtedness
2. 57The 2029 Notes are guaranteed on a senior basis by certain of our direct and indirect domestic and foreign subsidiaries and secured by first priority security interests in substantially all of the assets of the Company and the subsidiary guarantors, subject to customary exceptions
3. 58If we raise any additional debt financing, the terms of such additional debt could further restrict our operating and financial flexibility
4. 59any future debt may contain limitations on our ability to pay cash upon conversion or repurchase of our outstanding convertible debt securities and cash-settled warrants
5. 60Provisions in the indentures for our outstanding convertible debt securities may deter or prevent a business combination that may be favorable to securityholders
6. 61The conditional conversion feature of our outstanding convertible debt securities, if triggered, may adversely affect our financial condition and operating results
7. 62The capped call transactions may affect the value of our outstanding convertible debt securities and our common stock
8. 63amount of the converted 2026 Notes, as the case may be, upon any conversion of the 2026 Notes, with such reduction and/or offset subject to a cap

Risks Related to our Common Stock

1. 64Our stock price has been, and may continue to be, highly volatile, which could reduce the value of your investment and subject us to litigation
2. 65If our common stock continues to trade below $1.00, we may fail to meet the continued listing requirements of The Nasdaq Stock Market LLC (“Nasdaq”), which could result in a delisting of our common stock
3. 66Our common stock is traded on more than one market and this may result in price variations
4. 67Future sales of substantial amounts of our common stock may negatively affect our stock price
5. 68Provisions in our charter documents and Delaware law could discourage, delay, or prevent a takeover that stockholders may consider favorable