v3.25.1
Revenue Recognition
 3 Months Ended
Mar. 31, 2025
Revenue from Contract with Customer [Abstract]  
Revenue Recognition Revenue Recognition 
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. No single customer accounted for 10% or more of total revenue for the three months ended March 31, 2025 and 2024.

The following table presents the Company’s revenues disaggregated by revenue source:
Three Months Ended March 31,
20252024
(In thousands)
Hosted services$55,134 $71,495 
Professional services9,566 13,654 
Total revenue$64,700 $85,149 

Remaining Performance Obligation

As of March 31, 2025, 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 $221.1 million. As of March 31, 2025, 95% of the Company’s remaining performance obligations are 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.
Contracts with Multiple Performance Obligations

The Company’s contracts with customers contain multiple performance obligations. For these contracts, the Company accounts for individual performance obligations separately if they are distinct. The transaction price is allocated to the separate performance obligations on a relative standalone selling price (“SSP”) basis. 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 consideration market conditions and other factors, including the value of its contracts, product offerings and the cloud applications sold.

Revenue by Geographic Location

The Company is domiciled in the United States and has international operations around the globe. The following table presents the Company’s revenues attributable to operations by region for the periods presented:

Three Months Ended March 31,
20252024
(In thousands)
Americas (1)
$41,552 $62,025 
EMEA (2)
14,186 14,221 
APAC (3)
8,962 8,903 
Total revenue$64,700 $85,149 
——————————————
(1)United States, Canada, Latin America and South America (“Americas”)
(2)Europe, the Middle East and Africa (“EMEA”)
(3)Asia-Pacific (“APAC”)

Information about Contract Balances

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 March 31, 2025 and December 31, 2024 of $32.2 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. The Company classifies contract acquisition costs as long-term.

The deferred revenue balance consists of services, which have been invoiced upfront, and are recognized as revenue only when the revenue recognition criteria are met.

In some arrangements, the Company allows customers to pay for access to the LivePerson Platform over the term of the software subscription. Amounts recognized as revenue in excess of amounts billed are recorded as unbilled receivables. Unbilled receivables, anticipated to be invoiced in the next twelve months, are included in Accounts receivable, net of allowances for credit losses on the condensed consolidated balance sheets.

The Company recognized revenue of $27.9 million and $42.5 million for the three months ended March 31, 2025 and 2024, respectively, which was included in the corresponding deferred revenue balance at the beginning of the year.

The Company’s long-term deferred revenues are included in Other liabilities on the condensed consolidated balance sheets. The opening and closing balances of the Company’s contract acquisition costs, net, and deferred revenues are as follows:
Contract Acquisition
Costs, Net
(Non-current)
Deferred Revenue
(Current)
Deferred Revenue
(Non-current)
(In thousands)
Balance as of December 31, 2023$37,354 $81,858 $183 
(Decrease) increase, net(3,795)(23,878)140 
Balance as of December 31, 2024$33,559 $57,980 $323 
(Decrease) increase, net(1,404)3,415 (141)
Balance as of March 31, 2025$32,155 $61,395 $182 

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 approximately $4.3 million and $4.9 million for the three months ended March 31, 2025 and 2024, respectively.

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 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 economic conditions. Account balances are charged off against the allowance after all means of collection have been exhausted and the potential for recovery is considered remote. The Company does not have any off-balance sheet credit exposure related to its customers. The activity in the allowance for credit losses as of the dates presented is as follows:

March 31,
2025		December 31,
2024
(In thousands)
Balance, beginning of year$8,627 $9,290 
Additions charged to costs and expenses416 14,959 
Deductions/write-offs(1,361)(15,622)
Balance, end of period
$7,682 $8,627