Louth Online http://louthonline.com/ Thu, 12 May 2022 05:03:06 +0000 en-US hourly 1 https://wordpress.org/?v=5.9.3 http://louthonline.com/wp-content/uploads/2021/03/louthonline-icon-70x70.png Louth Online http://louthonline.com/ 32 32 Crypto arrives in Washington. Will millions buy influence? http://louthonline.com/crypto-arrives-in-washington-will-millions-buy-influence/ Thu, 12 May 2022 04:33:00 +0000 http://louthonline.com/crypto-arrives-in-washington-will-millions-buy-influence/ WASHINGTON (AP) — Erin Houchin braced herself for the worst when a mysterious, well-funded group began buying TV ads last month in her fiercely competitive run for Congress in southern Indiana.

Houchin assumed she would face a negative blitz, like the one that crushed her in 2016 when she ran for the same seat. But, in fact, the opposite happened.

American Dream Federal Action, a super PAC funded by a cryptocurrency CEO, saturated the district with ads promoting Houchin as a “Trump Tough” conservative who would “stop socialists in Washington.” That push helped secure his victory last week in a Republican primary.


“All you can do is hold your breath,” longtime Houchin consultant Cam Savage said when they learned of the ad buying. “It might help you, but the fear is that it will end you.” He added that Houchin had not solicited support and had no industry connection other than completing a survey of candidates for a cryptocurrency group.

The impact of unsolicited aid shows how cryptocurrency tycoons are emerging as powerful new players in American politics. They pour millions of dollars into primary elections as they try to gain influence over congressmen, Republicans and Democrats, who will write laws governing their industry, as well as other government officials who craft policies. regulations.

This year, for the first time, industry executives have flooded cash into federal races, spending $20 million so far, records and interviews show.

This is a delicate but deliberate march of companies that, by their very nature, make money in part by avoiding government attention.

In addition to campaign spending, more than $100 million has been spent lobbying the issue since 2018 by crypto companies, as well as those who stand to lose if the industry goes mainstream, records show.

After a well-established course, they have retained former senior officials, such as Max Baucus, a former Democratic senator from Montana who chaired the finance committee.

The push comes as the Biden administration and Congress not only consider new regulations, but also set funding levels for the agencies that will oversee them.

Treasury Secretary Janet Yellen said this week that financial regulators will soon release a report on the risks of cryptocurrency and other digital assets.

“There are certainly many risks associated with cryptocurrencies,” she told a financial stability hearing on Tuesday.

Officials are considering what consumer protections and financial reporting requirements to implement and how to crack down on criminals who take advantage of the anonymity offered by cryptocurrency to evade taxes, launder money and commit fraud.

“What do they want? They don’t want regulations or they want to help write the regulations. What else new? asked Sen. Sherrod Brown, D-Ohio, an industry critic.

Cryptocurrencies are a digital asset that can be traded on the Internet without relying on the global banking system. They were promoted as a way for those with limited means to build wealth by investing in the next big thing. But they are also very speculative and often lack transparency, which greatly increases the risk.

Jan Santiago, deputy director of Global Anti-Scam, an organization that helps victims of cryptocurrency fraud, said the industry was reluctant to police bad actors.

“Unless it affects their bottom line or their public reputation, I don’t think there’s a financial incentive for them,” he said.

There are signs that crypto is going mainstream. Fidelity Investments, one of the nation’s largest retirement account providers, announced earlier this month that it would begin allowing investors to put bitcoin in their 401(k) accounts.

At the same time, government surveillance is intensifying.

The Securities and Exchange Commission unveiled a plan last week that would nearly double the size of its staff focused on cryptocurrency oversight. Days later, the Justice Department indicted the CEO of a cryptocurrency platform, alleging he orchestrated a “$62 million global investment fraud scheme,” which part of dozens of civil and criminal crypto cases brought by federal authorities. Prosecutors say he promised generous returns but instead got away with the investors’ money.

Meanwhile, members of Congress and the administration have raised concerns that Russian oligarchs may turn to cryptocurrency to evade US sanctions put in place when Russia invaded Ukraine. .

But at least one legislator has been actively involved in promoting the allure of crypto riches.

Rep. Madison Cawthorn, RN.C., touted a new crypto coin called “Let’s Go Brandon” — a phrase that has become a conservative shorthand for a vulgar insult to Joe Biden. In a video posted to Twitter, Cawthorn appears alongside the cryptocurrency founder and flatly states, “It’s going over the moon, baby,” while urging viewers to visit the coin’s website and “get in the train”.

After an initial spike, its value plunged and is now worth a tiny fraction of a penny, as the Washington Examiner first reported.

Cryptocurrency advocates in Congress acknowledge the problems, but say the roughly $2 trillion industry has matured.

“I believe bitcoin protects consumers,” said Sen. Cynthia Lummis, R-Wyo., who has invested between $150,002 and $350,000 in the currency, according to her financial disclosure. “I’m not convinced that all cryptocurrencies protect consumers. In fact, I’m willing to bet the majority of them are fraudulent.

Others think the concern over cryptocurrency fraud is overblown.

“It may be an easy conclusion for people to say there’s so much fraud in this space,” said Ashley Ebersole, a former SEC attorney. “It’s making headlines, but I don’t know if it’s a bigger proportion.”

In Washington, the Democrats have been much more hawkish than the Republicans. “They had me at ‘Hello,’ so they don’t need to pressure me,” said Lummis, a Republican. “Democrats are a different story.”

Many cryptocurrency proponents have long opposed regulation. But lobbyists say that is now a settled debate and their current aim is to persuade skeptics not to regulate too aggressively.

Perianne Boring, founder of the Chamber of Digital Commerce, has been lobbying lawmakers and federal agencies since 2017, trying to advocate for the development of accounting standards for cryptocurrency and other digital assets and to help crypto businesses to become publicly traded companies.

“Because there are no standards, many companies are reluctant to touch cryptocurrency,” said Boring, whose group has spent $1.9 million lobbying the federal government.

Some lobbyists are hoping a flurry of campaign spending could help, much of which is going to the Democratic primary races.

“Crypto people are, all of a sudden, happy to go to political fundraisers,” said Kristin Smith, executive director of the Blockchain Association. Smith, whose group has spent $4.2 million on lobbying since 2018. She added: “The government could actually step in and really screw it up if we don’t engage constructively.”

Thus, the industry is pushing for certain candidates and this has generated feelings of resentment among some Democrats. In suburban Atlanta, two members of the United States House, Democrats Carolyn Bourdeaux and Lucy McBath, face off after their districts were merged in redistricting.

A super PAC called Protect Our Future, funded by Sam Bankman-Fried, the 30-year-old billionaire founder of cryptocurrency exchange FTX, has spent at least $2.7 million on ads supporting McBath, highlighting the support of McBath to Democratic politics priorities but saying nothing about cryptocurrency.

“They don’t do this out of the goodness of their hearts. They do it because they want something. And that’s to avoid regulation,” Bourdeaux said.

FTX and McBath’s campaign did not respond to requests for comment. Protect Our Future, which plans to spend at least $10 million on mid-term campaigns, said their spending had nothing to do with cryptocurrency regulation.

“There are a number of factors that go into our endorsements, including voting history, political platforms, viability as a candidate, public office and work experience,” the president said. of the band, Michael Sadowsky, in a press release.

Crypto super PACs are active in other high-profile races, including the Pennsylvania Democratic Senate primary, where a separate Bankman-Fried-linked crypto group spent $212,000 last week on ads supporting John Fetterman, the state’s Democratic lieutenant governor running for the Senate. The ads say Fetterman will “not be hit on by lobbyists or run by politicians.”

But overall, the spending is on such a scale that it has raised questions about the industry’s motives.

“It tells all Democrats that if you have a primary, they could come in with $2 million. They certainly make a point,” said Rep. Brad Sherman, D-California, a crypto critic who serves as chair of the House Subcommittee on Investor Protection, Entrepreneurship, and Capital Markets. “You don’t need a good argument in Washington if you have a lot of well-paid lobbyists and a big PAC, you just need some kind of argument.

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Wall Street Breakfast: Heading for a Peak? http://louthonline.com/wall-street-breakfast-heading-for-a-peak/ Wed, 11 May 2022 11:47:00 +0000 http://louthonline.com/wall-street-breakfast-heading-for-a-peak/

Are you approaching a peak?

Today, investors are bracing for another inflation report north of 8%, although that figure may provide some relief to those looking for a slowdown in the CPI. While April’s consumer price index is expected to hit a blazing 8.1% year on year, the figure would be down from the 8.5% print seen in March, which marked the highest level of inflation seen since the early 1980s. The CPI provides a snapshot of overall prices – meaning the costs of certain goods may continue to rise – so keep an eye on the inflation figure as well. inflation (which excludes food and energy), as well as on sub-sectors such as cars and rental.

Estimate: “I want every American to know that I take inflation very seriously and it is my top national priority,” President Biden said Tuesday ahead of the closely watched report. “The primary cause of inflation is a once-in-a-century pandemic. Not only has it crippled our global economy, it has completely thrown supply chains and demand out of whack… And this year , we have a second cause: Mr. Putin’s war in Ukraine.

Biden then offered solutions such as “reducing day-to-day costs for hard-working Americans” through negotiation and Medicare price caps, improving operations at ports to reduce traffic jams in the supply chain. procurement and promoting competition to bring small businesses into the market. Reducing the deficit will also be a priority by “calling on big business and the wealthiest Americans not to indulge in price gouging and pay their fair share of taxes.” On cutting high energy prices, Biden said he “led the world in the biggest release of oil from our stockpiles in history,” allowed biofuels in gasoline and at the same time stimulates green investments. as domestic crude oil production near record high. Oil companies also won’t get a “free pass” to unused oil concessions (there are 9,000 nationwide) and will have to pay taxes on them if they don’t produce more oil.

Not on a report: “I will not tell [today’s] The CPI counts by itself. I think the combination of mars, [today’s] and the May data will be kind of the big inflection point,” said Ben Jeffery, fixed income strategist at BMO. 3.20%, or I think that will inspire more bearish interest in investors who have been waiting for signs that inflation is beginning to peak.” (27 comments)

The Luna trash can

It is not easy to design a new currency, especially an algorithmic stablecoin. Terra (UST-USD), the world’s third-largest stablecoin, lost its peg to the US dollar on Monday, falling as low as 69 cents and forcing a slew of investors to liquidate their holdings. Things picked up somewhat yesterday, before falling below 40 cents overnight, sparking widespread panic as the controversial stablecoin (which has a circulating supply of nearly 17 billion tokens) entered a slump free.

Instantaneous: There are basically two types of stablecoins, which use distributed ledger technology to attach the value of tokens to something that already exists. One is backed by cash and assets to hold their value, like Tether (USDT-USD) and USD Coin (USDC-USD), while others have no collateral behind them like algorithmic stablecoins. Instead, the pegs on which these coins are built are supposed to be maintained through an arbitration relationship with another cryptocurrency (in Terra’s case, it’s based on a sister token named Luna (LUNA-USD) ).

The problem is that it doesn’t work (at least for a few days). The relationship hinges solely on the belief that there is a particular floor for currencies, hoping that one can always trade (or print) Luna to secure the $1 peg to Terra. Aware of this dynamic, Do Kwon, the founder of Terraform Labs (which powers the Terra blockchain) has diversified into Bitcoin reserves (BTC-USD) for currency support – in case confidence erodes in Luna. and Terra – but it could also be dangerous if Bitcoin becomes devalued as it has over the past six months. “Close to announcing stimulus package for $UST. Hang in there,” Kwon tweeted in response to the crisis.

Need for regulation: “[With stablecoins,] we see risks, which could threaten financial stability, risks associated with a payment system and its integrity and risks associated with increased concentration if stablecoins are issued by companies that already have substantial market power said Treasury Secretary Janet Yellen during a hearing before the Senate Banking Committee on Tuesday. “A stablecoin known as TerraUSD has had a run and lost value. I think this just illustrates that this is a fast growing commodity and the risks are increasing rapidly. We really need of a coherent federal framework.” (2 comments)

@realdonaldtrump

Questions swirled whether Donald Trump will be allowed to return to Twitter (TWTR) after Elon Musk’s pending $44 billion purchase of the company, and yesterday we got an answer: Musk said he would cancel the permanent ban from the former US president, calling him “morally evil and downright stupid.” Trump was banned from the platform following the attack on the United States Capitol on January 6, 2021, after Twitter cited “the risk of further incitement to violence” and “repeated violations and serious” network policies.

Focus on freedom of expression: “I think it was wrong to ban Donald Trump. I think it was wrong because it alienated a lot of the country and ultimately didn’t stop Donald Trump from being heard,” he said. Musk told the FTConference on the future of the car. “If there are tweets that are false and bad, those should be deleted or made invisible, and a suspension – a temporary suspension – is appropriate, but not a permanent ban.”

While Twitter’s actions were legal — private businesses are not subject to the First Amendment — they highlight corporate influence on public discourse and online conversation more clearly than ever. Musk has called Twitter “a place in the digital city, where issues vital to the future of humanity are debated,” and some fear that limiting the conversation will end up harming society or causing less controversy. interaction between a wide variety of points of view. This could force many users to adopt like-minded echo chambers, which could reinforce their own beliefs and further polarize the political landscape, but unrestrained alternatives can be just as frightening.

What does Trump say? Well, the whole story coincides with the rollout of his TRUTH social network, which publicly trades under the symbol “DWAC”. Trump has previously announced he won’t return to Twitter, saying they’ve “got rid of a lot of their conservative voices,” but things could change quickly before the next election cycles. TRUTH Social has also been plagued by technical issues since launch, as well as executive departures. (210 comments)

End of an era

The MP3 player wars in the early 2000s were fought by Archos, MiniDisc, SanDisk, Zune and others, until the iPod was finally embraced by the masses. Apple (AAPL) won over even more consumers with its robust lineup that included the iPod Classic, iPod Mini and Nano, iPod Shuffle and eventually the iPod Touch. While the iPhone and the streaming era rendered many devices obsolete, the latest iPod Touch stuck around for much of the last decade, until it died out – permanently.

A little history : Apple last updated the iPod Touch in 2019, keeping it for select users. Some people wanted the features of an iPhone (without having a phone), like sending iMessages and FaceTime over a Wi-Fi connection. However, the device which is now in its 7th generation is coming to an end , with an announcement that the latest iPod Touch will only be available in stores “while supplies last”.

“The demise of the iPod is probably the best example of Apple not caring about cannibalizing its own products,” noted Carolina Milanesi, principal analyst at Creative Strategies.

Company statement: “Today, the spirit of the iPod lives on. We’ve built an incredible music experience into all of our products, from iPhone to Apple Watch to HomePod mini, and to Mac, iPad and Apple TV. “said Greg Joswiak, Apple’s senior vice president of worldwide marketing. “Apple Music delivers industry-leading sound quality with support for spatial audio – there’s no better way to enjoy, discover, and experience music.” (17 comments)

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LIVEPERSON INC Management’s Discussion and Analysis of Financial Condition and Results of Operations (Form 10-Q) http://louthonline.com/liveperson-inc-managements-discussion-and-analysis-of-financial-condition-and-results-of-operations-form-10-q/ Tue, 10 May 2022 21:12:07 +0000 http://louthonline.com/liveperson-inc-managements-discussion-and-analysis-of-financial-condition-and-results-of-operations-form-10-q/

General


Our discussion and analysis of our financial condition and results of operations
is based upon our condensed consolidated financial statements, which are
prepared in conformity with accounting principles generally accepted in the
United States of America. As such, we are required to make certain estimates,
judgments and assumptions that management believes are reasonable based upon the
information available. We base these estimates on our historical experience,
future expectations and various other assumptions that we believe to be
reasonable under the circumstances, the results of which form the basis for our
judgments that may not be readily apparent from other sources. These estimates
and assumptions affect the reported amounts of assets and liabilities and the
disclosure of contingent assets and liabilities at the dates of the condensed
consolidated financial statements and the reported amounts of revenue and
expenses during the reporting periods. These estimates and assumptions relate to
estimates of the carrying amount of goodwill, intangibles, depreciation, stock
based-compensation, valuation allowances for deferred income taxes, accounts
receivable, the expected term of a customer relationship, accruals and other
factors. We evaluate these estimates on an ongoing basis. Actual results could
differ from those estimates under different assumptions or conditions, and any
differences could be material. In addition, our actual results could differ from
our estimates and assumptions based upon impacts on our business and general
economic conditions due to the current COVID-19 pandemic.

                                    Overview

LivePerson is a leading Conversational AI company creating digital experiences
that are Curiously Human. Conversational AI allows humans and machines to
interact using natural language, including speech or text. During the past
decade, consumers have made mobile devices the center of their digital lives,
and they have made mobile messaging the center of communication with friends,
family and peers. This trend has been significantly accelerated by the COVID-19
pandemic and we believe can now be viewed as a permanent, structural shift in
consumer behavior. Our technology enables consumers to connect with businesses
through these same preferred conversational interfaces, including Facebook
Messenger, SMS, WhatsApp, Apple Business Chat, Google Rich Business Messenger
and Alexa. These messaging conversations harness human agents, bots and AI to
power convenient, personalized and content-rich journeys across the entire
consumer lifecycle, from discovery and research, to sales, service and support,
and increasingly marketing, social, and brick and mortar engagements. For
example, consumers can look up product info like ratings, images and pricing,
search for stores, see product inventory, schedule appointments, apply for
credit, approve repairs, and make purchases or payments - all without ever
leaving the messaging channel. These AI and human-assisted conversational
experiences constitute the Conversational Space, within which LivePerson has
strategically developed one of the industry's largest ecosystems of messaging
endpoints and use cases.

The Conversational Cloud, our enterprise-class cloud-based platform, enables
businesses to become conversational by securely deploying AI-powered messaging
at scale for brands with tens of millions of customers and many thousands of
agents. The Conversational Cloud powers conversations across each of a brand's
primary digital channels, including mobile apps, mobile and desktop web
browsers, SMS, social media and third-party consumer messaging platforms. Brands
can also use the Conversational Cloud to message consumers when they dial a
1-800 number instead of forcing them to navigate IVRs and wait on hold.
Similarly, the Conversational Cloud can ingest traditional emails and convert
them into messaging conversations, or embed messaging conversations directly
into web advertisements, rather than redirect consumers to static website
landing pages. Agents can manage all conversations with consumers through a
single console interface, regardless of where the conversations originated.

LivePerson's robust, cloud-based suite of rich messaging, real-time chat, AI and
automation offerings features consumer and agent facing bots, intelligent
routing and capacity mapping, real-time intent detection and analysis, queue
prioritization, customer sentiment, analytics and reporting, content delivery,
PCI compliance, co-browsing and a sophisticated proactive targeting engine. An
extensible API stack facilitates a lower cost of ownership by facilitating
robust integration into back-end systems, as well as enabling developers to
build their own programs and services on top of the platform. More than 40 APIs
and software development kits are available on the Conversational Cloud.

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For your reference:

• Conversational AI: Conversational AI allows humans and machines to interact using natural language, including speech or text.


•Conversational Space: In the Conversational Space, consumers message with
brands on their own schedule, using natural language, to resolve their intents -
all on their preferred messaging service. The core capabilities of the
Conversational Space are voice and text-based interfaces, powered by AI and
humans working together. Conversational Space is the simplest, most intuitive
interface of all.

•Conversational Cloud: LivePerson's enterprise-class, AI-powered Conversational
Cloud platform empowers consumers to message their favorite brands, just as they
do with friends and family.

LivePerson's Conversational AI offerings put the power of bot development,
training, management and analysis into the hands of the contact center and its
agents, the teams most familiar with how to structure sales and service
conversations to drive successful outcomes. The platform enables what we call
"the tango" of humans, AI and bots, whereby human agents act as bot managers,
overseeing AI-powered conversations and seamlessly stepping into the flow when a
personal touch is needed. Agents become ultra-efficient, leveraging the AI
engine to serve up relevant content, define next-best actions and take over
repetitive transactional work, so that the agent can focus on relationship
building. By seamlessly integrating messaging with our proprietary
Conversational AI, as well as third-party bots, the Conversational Cloud offers
brands a comprehensive approach to scaling automations across their millions of
customer conversations.

Complementing our proprietary messaging and Conversational AI offerings are
teams of technical, solutions and consulting professionals that have developed
deep domain expertise in the implementation and optimization of conversational
services across industries and messaging endpoints. We are a leading authority
in the Conversational Space. LivePerson's products, coupled with our domain
knowledge, industry expertise and professional services, have been proven to
maximize the effectiveness of the Conversational Space and deliver measurable
return on investment for our customers. Certain of our customers have achieved
the following advantages from our offerings:

•the ability for each agent to manage as many as 40 messaging conversations at a
time, as compared to one at a time for a voice agent and two to four at a time
for a good chat agent. Adding AI and bots provides even greater scale to the
number of conversations managed;

• Labor efficiencies at least twice those of voice agents, reducing labor costs by at least 50%;

•Improving the overall customer experience, thereby fueling an increase in the customer satisfaction score of up to 20 percentage points, and improving retention and loyalty;

• More practical, personalized and content-rich conversations that increase sales conversion by up to 20%, increase average order value and reduce abandonment;

•More satisfied contact center agents, reducing agent churn by up to 50%.

•Valued connection with consumers via mobile devices, either through native apps, websites, SMS or third-party messaging platforms;

• leveraged spending that drives visitor traffic by increasing visitor conversions;

•Refine and improve performance by understanding which initiatives provide the highest rate of return; and

•increased lead generation by providing a single platform that engages consumers through advertisements and listings on branded and third-party websites.


As a "cloud computing" or software-as-a service ("SaaS") provider, LivePerson
provides solutions on a hosted basis. This model offers significant benefits
over premise-based software, including lower up-front costs, faster
implementation, lower total cost of ownership, scalability, cost predictability,
and simplified upgrades. Organizations that adopt a fully-hosted, multi-tenant
architecture that is maintained by LivePerson eliminate the majority of the
time, server infrastructure costs, and information technology ("IT") resources
required to implement, maintain, and support traditional on-premise software.

To further enhance our platform, in September 2020 we signed a partnership with
a digital services and consulting company to transform our technology
infrastructure on the public cloud, to build integrated solutions and a global
practice around our Conversational Cloud to sell into this company's channels
and global enterprise customer base, and to redefine how the world's top brands
communicate.
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More than 18,000 businesses, including HSBC, Orange, and GM Financial use our
conversational solutions to orchestrate humans and AI, at scale, and create a
convenient, deeply personal relationship with their customers.

LivePerson's consumer services offering is an online marketplace that connects
Experts who provide information and knowledge for a fee via mobile and online
messaging with Users. Users seek assistance and advice in various categories
including personal counseling and coaching, computers and programming, education
and tutoring, spirituality and religion, and other topics.

Key elements of LivePerson’s business solutions strategy include:


Build awareness and drive adoption of the Conversational Space. LivePerson
brought our first customer live on messaging in June 2016. Since that time, we
have been focused on building awareness for conversational experiences and
driving adoption. We have educated businesses on the financial and operational
transformation that occurs when a contact center shifts to an asynchronous
messaging environment, where the consumer controls the pace of the conversation,
which can last minutes, hours or days, from a synchronous call or chat center,
where conversations occur in real-time and have a distinct start and end.

A key component of our industry awareness marketing strategy has been to hold
multiple global customer summits each year (events in 2020 and 2021 were held
virtually in light of the COVID-19 pandemic) that target executives from
enterprise customers and prospects, and feature a key theme within the
Conversational Space, such as Apple Business Chat, Google Rich Business
Messenger, IVR deflection or AI. LivePerson customers are the center point of
these summits, presenting why they chose LivePerson for conversational
experiences, how they achieved success, and what type of return on investment
they have realized. Each attendee then receives a blueprint for how they can
pursue similar outcomes. We have found this strategy to drive strong results for
LivePerson, as we have seen a greater than 40% conversion rate on opportunities
that were created or advanced as part of the customer summits. By year-end 2021,
nearly 75% of messaging conversations had automation attached. We will continue
to focus on building awareness for the Conversational Space and driving adoption
of messaging and AI across our customer base.

Increase messaging volumes by developing a broad ecosystem, expanding customer
use cases, and focusing on AI and automation. Our strategy is to drive higher
messaging volumes by going both wide across messaging endpoints, deep across
consumer use cases, and focusing on AI and automation as the means to deliver
powerful scale. By year-end 2021, nearly 75% of messaging conversations had
automation attached. We will continue to focus on building awareness for the
Conversational Space and driving adoption of messaging and AI across our
customer base. LivePerson offers a platform usage pricing model, where customers
are offered access to our entire suite of messaging technologies across their
entire agent pool for a pre-negotiated cost per interaction. We believe that
over time this model will drive higher revenue for LivePerson by reducing
barriers to adoption of new messaging endpoints and use cases.

In order to drive broad messaging adoption, it is imperative that the
Conversational Cloud integrates to all of the messaging apps that consumers
prefer to use for communication and addresses all key use cases. For example, if
a consumer is an avid WhatsApp user, and a brand only offers SMS as a messaging
option, that consumer may be reluctant to try messaging the brand. Therefore, a
key strategy of ours has been to build one of the industry's broadest ecosystems
of messaging endpoints and use cases. In June 2016, we launched with In-App
messaging. In 2017, we introduced Facebook Messenger, SMS, Web messaging and IVR
deflection integrations. In 2018, we added Apple Business Chat, Google Rich
Business Messenger, Line, WhatsApp, Alexa, Google Home, Google Ad Lingo and
Twitter. In 2019, we added email, allowing brands to manage emails through the
same console they use for messaging, and to convert legacy emails into messaging
conversations. We also added social monitoring and conversational tools for
Twitter and Facebook, and introduced proactive messaging, allowing brands to
transform traditional one-way notifications such as flight cancellations or
phone plan overage alerts into two-way conversations. Finally, we connected to
Facebook and WhatsApp digital advertisements, enabling consumers to initiate
messaging conversations for marketing and customer care directly within the
advertisement. In 2020, we added Instagram and Google's Business Messages,
allowing brands to bring customer-initiated conversations into the
Conversational Cloud directly from Instagram, Google Search, and Google Maps.

Each channel and use case added opens the door to new consumers, providing
brands a greater opportunity to shift share away from their legacy contact
center channels into messaging. For example, in 2019, leading airlines launched
on WhatsApp and Apple Business Chat with the ability to make secure payments; a
baseball stadium launched an automated conversational concierge providing
answers to a wide range of questions from restroom locations to player stats;
and a multinational
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telecommunications company used proactive two-way messaging for outbound
campaigns. In 2020, one of the largest Telcos in Australia fully virtualized
their contact centers, a leading U.S. quick-serve restaurant launched on
Facebook Messenger to help customers order meals, one of the biggest banks in
the world launched an Apple Business Chat channel to provide a secure way to
perform day-to-day banking, and one of the world's largest jewelry retailers
used the Conversational Cloud and QR codes to sell millions of dollars of
product. In 2021, one of the ten largest healthcare companies in the world
launched web messaging to enable their customers to check the status of their
orders and request prescription refills with ease, and a multi-billion-dollar
entertainment and media company enabled their consumers to plan trips, buy
tickets or change reservations with in-app messaging.

LivePerson makes the management of all these disparate channels seamless to the
brand. AI-based intelligent routing, queuing and prioritization software
orchestrates these conversations at scale, regardless of which messaging
endpoint they originated from, so that human and bot agents can engage with all
customers through just one console.

We believe LivePerson is leading the structural shift to Conversational AI. In
the wake of the COVID-19 pandemic, leading brands are turning to LivePerson's
AI-powered messaging to overcome a capacity gap created by voice call agent
work-from-home measures and increased demand for digital engagement as consumers
practice social distancing. LivePerson is powering Conversational AI, automation
and messaging strategies across a growing number of use cases from care and
sales, to marketing, social, conversational advertising and brick and mortar.
Our Conversational AI leadership and the increase in adoption have influenced
LivePerson's enterprise and mid-market revenue retention rate, (the
trailing-twelve-month change in total revenue from existing customers after
upsells, downsells and attrition) which exceeded the high end of our target
range of 105% to 115% for 2021. The benefit can also be seen in LivePerson's
average revenue per user ("ARPU") for our enterprise and mid-market customers,
which increased approximately 32% for the trailing twelve months ended March 31,
2022 to $645,000 from approximately $490,000 for the trailing twelve months
ended March 31, 2021. We believe these ARPU trends are a clear indication of how
LivePerson's strategy to drive messaging adoption has successfully influenced
our revenue growth by taking share from legacy communication channels.

Attract the industry's best AI, machine learning and conversational talent. We
believe that AI and machine learning are critical to successfully scaling in the
Conversational Space, and that in order to develop the industry's leading
technology, we need to attract the industry's best talent. We have hired some of
the industry's brightest data scientists, machine learning engineers and
automation engineers, many from firms such as Nike, Amazon.com, Microsoft and
Target, who are working exclusively on applying AI to the Conversational Space.
LivePerson also expanded its development talent base in Germany, and added key
development talent through the acquisitions of BotCentral in Mountain View,
California; Callinize, Inc. (dba Tenfold) ("Tenfold") in Austin, Texas; e-bot7
GmbH ("e-bot7") in Munich, Germany; VoiceBase, Inc. ("VoiceBase") in San
Francisco, California; and WildHealth, Inc. in Lexington, Kentucky.

Bring to market best-in-class AI and machine learning technologies designed for
the Conversational Space. We believe that in the last decade many vendors
introduced AI and bot offerings that created frustrating experiences for
consumers and businesses alike, which in turn has eroded trust in automation.
Many of these solutions have proven difficult to build and scale, and have been
limited by stand-alone implementations that lacked the measurement, reporting
and human oversight of conversational platforms such as the Conversational
Cloud. In December 2018, LivePerson announced its patent-protected AI engine
that is designed to overcome these shortcomings and help brands rapidly bring to
market conversational AI that can scale to millions of interactions, while
increasing customer satisfaction and conversion rates.

Unlike alternative solutions designed solely for IT departments, LivePerson's
Conversational AI was built to be used by developers and contact center agents.
By putting the power of conversational design and bot management in the hands of
contact center agents, LivePerson's Conversational AI gives brands the ability
to leverage the employees closest to the customer, those who are most versed in
the voice of the brand, and with the most expertise in how to craft successful
outcomes for customer service and sales journeys.

Some of the key innovations behind LivePerson’s conversational AI include:


•a holistic approach to scaling AI by combining consumer facing bots, agent
facing bots, intelligent routing and real-time intent understanding, with an
analytics dashboard that helps users focus on the intents that are impacting
their business and prioritize which intents to automate next;

• Dialog-based bot-building software rather than workflow or code, so non-technical workers like contact center agents can design automations.

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•leveraging a data moat from hundreds of millions of conversations to feed the
machine learning that rapidly and accurately detects consumer sentiment and
intents in real-time. Customers of LivePerson can use intent understanding for
advanced routing, next-best actions, and to fully contain conversations with
automation;

•the establishing of contact center agents as bot managers, ensuring that every
conversation is safeguarded by a human and that agents are continuously training
the AI to be smarter and drive more successful outcomes;

• Powerful Assist technology that multiplies agent efficiency by analyzing intent in real time, then suggesting the best next actions, predefined content, and bots that can support transactional work;

• Pre-built templates for target verticals that provide out-of-the-box support for core intents and core integrations;

•the ability to start conversations with existing transcripts, reducing design effort and speeding time to market;

• Integration of third-party AI Natural Language Understanding (“NLU”) so that customers are not locked into a single vendor; and


•AI analytics and reporting tailored to the Conversational Space, providing
brands with immediate, actionable insights about their businesses and contact
center operations.

Our strategy is to continue to enhance the Conversational AI engine and related
products, by leveraging our global research and development ("R&D") footprint
and substantial library of mobile and online conversational data, with the aim
of increasing agent efficiency, decreasing customer care costs, improving the
customer experience and increasing customer lifetime value.

Sustain our leadership position by aligning brands to a vision that transforms
how they communicate with consumers and delivers a superior return on brands'
investment. Over the past four years we have made good progress in developing
our conversational AI platform and within the next 12 months, we expect to have
a solution in place for our automations to self-heal, which is the ultimate goal
of any AI platform. Our acquisitions of VoiceBase and Tenfold provide us with a
mechanism for data capture in the voice channel. This additional data and the
associated analytics and system integration give us an even greater ability to
scale the usage of our platforms, by building on our strength in messaging.
Brands must adapt their contact centers to an asynchronous messaging environment
and leverage a combination of human agents, bots, and AI to achieve scale and
efficiencies. When done correctly, the entire consumer lifecycle with a brand
will be maintained within the Conversational Space, and traffic will steadily
shift away from lower returning traditional voice calls, websites, emails, and
apps to higher returning messaging endpoints.

We believe LivePerson is uniquely positioned to drive this transformation with our technology and expertise:


•The Conversational Cloud, LivePerson's enterprise-class, automation-first,
cloud-based platform, was designed for AI-assisted and human-powered messaging
in mobile and online channels. The platform offers best-in-class security and
scalability, offers the broadest ecosystem of messaging endpoints, is designed
for ease of use, and features an AI engine custom built for the Conversational
Space, intent recognition, robust real-time reporting, role-based real-time
analytics, predictive intelligence, and innovations in customer satisfaction and
connection measurement. Additionally, the Conversational Cloud is an open
platform with pre-built, enterprise-grade integrations into back-end systems as
well as the ability to work across NLU providers.

• The company believes it has a data moat built on hundreds of millions of conversations across industries, geographies, and use cases that feed the machine learning engines that power understanding of the ‘intention.

• The platform has expanded to power conversations across a wide range of channels and use cases, from traditional sales and customer service to marketing, social media, email, advertising and brick and mortar.


•LivePerson has deep domain expertise across verticals and messaging endpoints,
a global footprint, referenceable enterprise brands and a team of technical,
solutions and consulting professionals to assist customers along their
transformational journeys. We are positioned as an authority in the
Conversational Space. We have developed a Transformation Model that is
introduced to existing and prospective customers to help guide them on their
journeys from legacy and oftentimes inefficient legacy voice, email and chat
solutions to modern conversational ones powered by messaging and AI.

•The Company has developed Gainshare - a Transformation Model that is introduced
to existing and prospective customers to help guide them on their journeys from
legacy and oftentimes inefficient legacy voice, email, and
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chat solutions to modern conversational ones powered by messaging and AI.
Gainshare is a fully managed solution where LivePerson not only provides the
messaging and AI automation technology, but also the labor, automation, and
end-to-end program management, leveraging the Company's expertise with
Conversational AI and messaging operations. Gainshare is an option for brands
that want to accelerate a transformation to Conversational AI, or that want a
worry-free solution where LivePerson manages the entire operation, from staffing
to automation building and optimization, to conversation design and consumer
experience. Gainshare pricing is bespoke, and is typically structured around a
brand's desired goals, whether driving incremental revenue or reducing
operational costs.

We believe that LivePerson's differentiated approach to the Conversational
Space, combined with our unique technology and expertise has established us as a
market leader, with an ability to deliver superior returns on investment.
LivePerson customers manage as many as 40 messaging conversations at a time, as
compared to one at a time for a voice agent and two to four at a time for a good
chat agent. Adding AI and bots provides even greater scale to the number of
conversations managed. Our customers often see labor efficiency gains of at
least two times that of voice agents, effectively cutting labor costs by at
least 50%. Furthermore, our ability to deliver more convenient, personalized and
content-rich conversations often drives increases in customer satisfaction of up
to 20 percentage points and increases in sales conversions of up to 20%, while
enhancing average order value, customer retention and loyalty.

Strengthen our position in both existing and new industries. We plan to continue
to develop our market position by increasing our customer base, and expanding
within our installed base. We plan to continue to focus primarily on key target
markets: consumer/retail, telecommunications, financial services,
travel/hospitality, technology and automotive within both our enterprise and
mid-market sectors, as well as the small business sector ("SMB"). In 2021, we
continued to grow in verticals such as healthcare and financial services. We
plan to continue experimenting with new conversational businesses, including
some that are in regulated industries, like online banking and healthcare. We
are increasingly structuring our field organization to emphasize our domain
expertise and strengthen customer relationships across target industries.

Continue to build our international presence. We are focused on continuing to
build our international presence through expansion of our international revenue
contribution, which accounted for 35% of total revenue in 2021. We are
generating positive results from our recent investments in the Asia Pacific,
Europe, and Latin America regions. Expanding go-to-market capacity in
international theaters is one of our key strategic focuses and also part of our
motivation for our recent acquisition of e-bot7.

Leverage our open architecture to support partners and developers. In addition
to developing our own applications, we continue to cultivate a partner
eco-system capable of offering additional applications and services to our
customers. We integrate into third-party messaging endpoints including SMS,
Facebook Messenger, Apple Business Chat, Google Rich Business Messenger, Line,
WhatsApp, Alexa, Google Home, WeChat, Google Ad Lingo, Google Search, Google
Maps, Instagram and Twitter, multiple IVR vendors, and dozens of branded apps.
The Conversational Cloud integrates our proprietary messaging and Conversational
AI with third-party bot offerings, empowering our customers to manage a mix of
different bots, human agents and technologies from one control panel, thereby
optimizing contact center efficiency. LivePerson's proprietary and third-party
AI/bots enable brands to partially or fully automate communications with their
customers.

In addition, we have opened up access to our platform and our products with more
than 40 APIs and software development kits that allow customers and third
parties to develop on top of our platform. Customers and partners can utilize
these APIs to build our capabilities into their own applications and to enhance
our applications with their services. In 2019, we launched LivePerson Functions,
a serverless function as a service ("FaaS") integration which enables brands to
develop custom behaviors within LivePerson's conversational platform to easily
and rapidly tailor conversation flows to their specific needs.

Expand sales partnerships to broaden our presence and accelerate sales cycles.
We are focused on broadening our market reach and accelerating sales cycles by
partnering with systems integrators, technology providers, business process
outsourcers, value added resellers and other sales partners. We formalized a
relationship with IBM Global Business Services in 2017 and Accenture in 2018. In
2019, we announced strategic partnerships with TTEC, a leading BPO focused on
customer experience, and DMI, a digital transformation company, to redefine the
customer experience with digital engagement, messaging, and AI-driven
automation. In 2020, a digital services and consulting company joined
LivePerson's network with a first-of-its-kind 360 degree partnership focusing
not only on capturing the global rising demand for conversational commerce and
building a personalized experience for customers, but also driving the
transformation for internal corporate messaging and the employee experience
through Conversational AI. In 2021, we announced strategic integration
partnerships with Google Cloud, Adobe and Medallia to help brands make contact
center agents more efficient and effective, and empower and enrich the
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customer and employee experience management through the power of AI. Our network has also expanded with the Tech Mahindra partnership to help brands deliver personalized conversational experiences to consumers at scale.


Maintain market leadership in technology and security expertise. As described
above, we are devoting significant resources to creating new products and
enabling technologies designed to accelerate innovation. We evaluate emerging
technologies and industry standards and continually update our technology in
order to retain our leadership position in each market we serve. We monitor
legal and technological developments in the area of information security and
confidentiality to ensure our policies and procedures meet or exceed the demands
of the world's largest and most demanding corporations. We believe that these
efforts will allow us to effectively anticipate changing customer and consumer
requirements in our rapidly evolving industry.

Evaluate strategic alliances and acquisitions when appropriate. In July 2021, we
acquired German conversational AI company e-bot7, which propels our self-service
capabilities and continued growth across Europe. In October 2021, we acquired
VoiceBase, a leader in real-time speech recognition and conversational
analytics; and Tenfold, an advanced customer engagement platform for integrating
communication systems with leading CRM and support services. In February 2022,
we acquired WildHealth, a precision medicine company. Once fully integrated, we
expect these acquisitions to allow LivePerson to deliver our AI and automation
capabilities, insights, and integration as a single integrated product offering
across all channels including voice and messaging.


                                  Key Metrics

Financial overview for the three months ended March 31, 2022 compared to the three months ended March 31, 2021:

• Total revenue increased by 21% to reach $130.2 million from $107.9 million.

• Revenue in our Business segment increased by 22% to reach $121.1 million from $98.9 million.

• Gross profit margin decreased from 69% to 62%.

• Costs and expenses increased by 61% to reach $195.3 million from $121.5 million.

• Net loss increased to $65.4 million from $21.2 million.


•Average annual revenue per enterprise and mid-market customer increased
approximately 32% to $645,000 for the trailing twelve months ended March 31,
2022, as compared to $490,000 for the trailing twelve months ended March 31,
2021.

•Our target for enterprise and mid-market revenue retention in 2022 matches
2021, and is a range of 105% to 115%. Revenue retention rate for enterprise and
mid-market customers on the Conversational Cloud was within our target range of
105% to 115% in the first quarter of 2022 and exceeded the high end of our
target range of 105% to 115% in the first quarter of 2021. Revenue retention
rate measures the percentage of revenue retained at quarter end, from full
service customers that were on the Conversational Cloud at the same period a
year ago.

              Adjusted EBITDA and Adjusted Operating (Loss) Income

To provide investors with additional information regarding our financial
results, we have disclosed adjusted earnings before interest, taxes,
depreciation, and amortization ("EBITDA") and adjusted operating income (loss),
which are non-GAAP financial measures. The tables below present a reconciliation
of adjusted EBITDA and adjusted operating income to net (loss) income, the most
directly comparable GAAP financial measures.

We have included adjusted EBITDA and adjusted operating income (loss) in this
Quarterly Report on Form 10-Q because these are key measures used by our
management and board of directors to understand and evaluate our core operating
performance and trends, to prepare and approve our annual budget and to develop
short and long-term operational plans. In particular, the exclusion of certain
expenses in calculating adjusted EBITDA and adjusted operating income (loss) can
provide a useful measure for period-to-period comparisons of our core business.
Additionally, adjusted EBITDA is a key financial measure used by the
compensation committee of our board of directors in connection with the payment
of bonuses to our executive officers. Accordingly, we believe that adjusted
EBITDA and adjusted operating income (loss) provide useful information to
investors and others in understanding and evaluating our operating results in
the same manner as our management and board of directors.
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Our use of adjusted EBITDA has limitations as an analytical tool, and you should
not consider it in isolation or as a substitute for analysis of our results as
reported under GAAP. Some of these limitations are:

•  although depreciation and amortization are non-cash charges, the assets being
depreciated and amortized may have to be replaced in the future, and adjusted
EBITDA does not reflect cash capital expenditure requirements for such
replacements or for new capital expenditure requirements;

• Adjusted EBITDA does not reflect variations or cash requirements for our working capital requirements;

•  adjusted EBITDA does not consider the impact of acquisition costs;

•  adjusted EBITDA does not consider the impact of restructuring costs;

•  adjusted EBITDA does not consider the impact of other costs;

• Adjusted EBITDA does not reflect tax payments which may represent a reduction in the cash available to us; and

• Other companies, including companies in our industry, may calculate Adjusted EBITDA differently, which reduces its usefulness as a comparative measure.

Due to these limitations, you should consider Adjusted EBITDA alongside other measures of financial performance, including various pretax GAAP losses and our other GAAP results. The following table provides a reconciliation of Adjusted EBITDA for each of the periods indicated:

                                                                        Three Months Ended March 31,
                                                                           2022                  2021
                                                                               (In thousands)
Reconciliation of Adjusted EBITDA
GAAP net loss                                                       $       (65,364)         $ (21,195)
Amortization of purchased intangibles and finance leases                      6,257              1,550
Stock-based compensation                                                     31,866             14,611
Contingent earn-out adjustments                                                   -                132
Restructuring costs (1)                                                         (23)             2,732
Depreciation                                                                  7,224              6,605
Other litigation and consulting costs (2)                                     1,751              1,347
Benefit from income taxes                                                      (193)              (851)
Acquisition costs                                                               419                  -
Interest expense, net                                                           490              9,129
Other income, net (3)                                                           (60)              (712)
Adjusted EBITDA (loss)                                              $       (17,633)         $  13,348


--------------

(1)Includes severance pay $2.4 million and other lease restructuring costs $0.3 million for the three months ended March 31, 2021.


(2)Includes sales tax liability of $0.3 million, litigation costs of $0.7
million, employee benefit cost of $0.2 million and consulting costs of $0.6
million for the three months ended March 31, 2022. Includes litigation costs of
$1.2 million and consulting costs of $0.1 million for the three months ended
March 31, 2021.

(3)Includes financial (income) expense which is primarily attributable to
currency rate fluctuations.
Our use of adjusted operating (loss) income has limitations as an analytical
tool, and you should not consider it in isolation or as a substitute for
analysis of our results as reported under GAAP. Some of these limitations are:

•  although amortization is a non-cash charge, the assets being amortized may
have to be replaced in the future, and adjusted operating (loss) income does not
reflect cash capital expenditure requirements for such replacements or for new
capital expenditure requirements;

• adjusted operating income does not take into account the impact of acquisitions;

• adjusted operating income does not take into account the impact of restructuring costs;

• adjusted operating income does not take into account the impact of other costs;

                                       40
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• Other companies, including companies in our industry, may calculate adjusted operating profit (loss) differently, which reduces its usefulness as a comparative measure.

Because of these limitations, you should consider adjusted operating income (loss) alongside other measures of financial performance, including various pretax GAAP losses and our other GAAP results. The following table provides a reconciliation of adjusted operating income for each of the periods indicated:


                                                                         Three Months Ended March 31,
                                                                            2022                  2021
                                                                            

(000s) Reconciliation of adjusted operating income (loss) Loss before income tax benefit

                                $       (65,557)         $ (22,046)
Amortization of purchased intangibles and finance leases                       6,257              1,550
Stock-based compensation                                                      31,866             14,611
Restructuring costs (1)                                                          (23)             2,732
Other litigation and consulting costs (2)                                      1,751              1,347
Contingent earn-out adjustments                                                    -                132
Acquisition costs                                                                419                  -
Interest expense, net                                                            490              9,129
Other income, net (3)                                                            (60)              (712)
Adjusted operating (loss) income                                     $      

(24,857) $6,743

————–

(1)Includes severance pay $2.4 million and other lease restructuring costs $0.3 million for the three months ended March 31, 2021.


(2)Includes sales tax liability of $0.3 million, litigation costs of $0.7
million, employee benefit cost of $0.2 million and consulting costs of $0.6
million for the three months ended March 31, 2022. Includes litigation costs of
$1.2 million and consulting costs of $0.1 million for the three months ended
March 31, 2021.

(3) Includes financial expenses (income) which are mainly attributable to fluctuations in exchange rates.





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                   Critical Accounting Policies and Estimates

Our condensed consolidated financial statements are prepared in conformity with
accounting principles generally accepted in the United States of America. As
such, we are required to make certain estimates, judgments and assumptions that
management believes are reasonable based upon the information available. We base
these estimates on our historical experience, future expectations and various
other assumptions that we believe to be reasonable under the circumstances, the
results of which form the basis for our judgments that may not be readily
apparent from other sources. These estimates and assumptions affect the reported
amounts of assets and liabilities and the disclosure of contingent assets and
liabilities at the dates of the condensed consolidated financial statements and
the reported amounts of revenue and expenses during the reporting periods.

We believe that the assumptions and estimates associated with revenue
recognition, depreciation, stock-based compensation, accounts receivable, the
valuation of goodwill and intangible assets, income taxes and legal
contingencies have the greatest potential impact on our consolidated financial
statements. We evaluate these estimates on an ongoing basis. Actual results
could differ from those estimates under different assumptions or conditions, and
any differences could be material. The significant accounting policies which we
believe are the most critical to aid in fully understanding and evaluating the
reported consolidated financial results include the following:

Revenue recognition


The majority of our revenue is generated from hosted service revenues, which is
inclusive of our platform usage pricing model, and related professional services
from the sale of our services. Revenues are recognized when control of these
services is transferred to our customers, in an amount that reflects the
consideration we expect to be entitled to in exchange for those services. A
large proportion of our revenue from new customers comes from large
corporations. These companies typically have more significant implementation
requirements and more stringent data security standards. Such customers also
have more sophisticated data analysis and performance reporting requirements,
and are likely to engage our professional services organization to provide such
analysis and reporting on a recurring basis.

We determine revenue recognition through the following steps:

•identification of the contract(s) with a customer;

•identification of performance obligations in the contract;

•determination of the transaction price;

•the allocation of the transaction price to the performance obligations of the contract; and

•recognition of revenue when, or as we meet a performance obligation.

Total income of $130.2 million and $107.9 million was recorded during the three months ended March 31, 2022 and 2021, respectively.


We defer all incremental commission costs to obtain the contract ("contract
acquisition costs"). The contract acquisition costs consist of prepaid sales
commissions and have balances as of March 31, 2022 and December 31, 2021 of
$42.7 million and $40.7 million, respectively. We amortize these costs over the
related period of benefit using the expected life of the customer contract,
which we determine to be three to five years, consistent with the transfer to
the customer of the services to which the asset relates. We classify contract
acquisition costs as long-term unless they have an original amortization period
of one year or less.

Hosted Services – Business Revenue


Hosted services - Business 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 Conversational Cloud. We have determined
such access represents a stand-ready service provided continually throughout the
contract term. As such, control and satisfaction of this stand-ready performance
obligation is deemed to occur over time. We recognize this revenue over time on
a ratable basis over the contract term, beginning on the date that access to the
Conversational Cloud platform is made available to the customer. The passage of
time is deemed to be the most faithful depiction of the transfer of control of
the services as the customer simultaneously receives and consumes the benefit
provided by our performance. Subscription contracts are generally one year or
longer in length, billed monthly, quarterly or annually in advance.
Additionally, for certain of our larger
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customers, we may provide call center labor through an arrangement with one or
more of several qualified vendors. For most of these customers, we pass the fee
we incur with the labor provider and its fee for the hosted services through to
our customers in the form of a fixed fee for each order placed via our online
engagement solutions. For these Gainshare arrangements, we act as a principal in
a transaction if we control the specified goods or services before they are
transferred to the customer.

Revenue attributable to our monthly hosted Business services accounted for 82%
and 78% of total revenue for the three months ended March 31, 2022 and 2021,
respectively.

Professional services income


Professional Services revenue primarily consists of fees for deployment and
optimization services, as well as training delivered on an on-demand basis which
is deemed to represent a distinct stand-ready performance obligation and is
recognized at a point in time. Professional Services revenue is reported at the
amount that reflects the ultimate consideration we expect to receive in exchange
for such services. Control for the majority of our Professional Services
contracts passes over time to the customer and is recognized ratably over the
contracted period, as the passage of time is deemed to be the most faithful
depiction of the transfer of control. For certain deployment services, which are
not deemed to represent a distinct performance obligation, revenue will be
recognized in the same manner as the fee for access to the Conversational Cloud
platform, and as such will be recognized on a straight-line basis over the
contract term. For services billed on a fixed price basis, revenue is recognized
over time based on the proportion performed using time and materials as the
measure of progress toward complete satisfaction of the performance obligation.
Our Professional Services 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.

Revenue attributable to professional services represented 11% and 14% of total revenue for the three months ended March 31, 2022 and 2021, respectively.

Hosted Services – Consumer Revenue


For revenue from our Consumer segment generated from online transactions between
Experts and Users, revenue is recognized at an amount net of Expert fees
primarily because the Expert is the primary obligor. We do not act as a
principal in a transaction since we do not control the specified goods or
services before they are transferred to the customer. Additionally, we perform
as an agent without any risk of loss for collection, and we are not involved in
selecting the Expert or establishing the Expert's fee. We collect a fee from the
consumer and retain a portion of the fee, and then remit the balance to the
Expert. Revenue from these transactions is recognized at the point in time when
the transaction is complete and no significant performance obligations remain.

Revenues from our Consumer segment represented approximately 7% and 8% of total revenues for the three months ended March 31, 2022 and 2021, respectively.

Remaining performance obligation


As of March 31, 2022, 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 $448.0 million. Approximately 91% of our
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. We have 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


Some of our contracts with customers contain multiple performance obligations.
For these contracts, we account 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 basis.
We determine the standalone selling prices based on our overall pricing
objectives, taking into consideration market conditions and other factors,
including the value of our contracts, the cloud applications sold, and the
number and types of users within our contracts.
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Deferred revenue


We record deferred revenues when cash payments are received or due in advance of
our performance. The increase in the deferred revenue balance as of March 31,
2022 is primarily driven by cash payments received or due in advance of our
performance obligations, partially offset by $55.4 million of revenues
recognized that were included in the deferred revenue balance as of December 31,
2021.

Stock-Based Compensation

We follow ASC 718-10, "Stock Compensation," which addresses the accounting for
transactions in which an entity exchanges its equity instruments for goods or
services, with a primary focus on transactions in which an entity obtains
employee services in share-based payment transactions. ASC 718-10 requires
measurement of the cost of employee services received in exchange for an award
of equity instruments based on the grant-date fair value of the award (with
limited exceptions). Incremental compensation costs arising from subsequent
modifications of awards after the grant date must be recognized.

Our forfeiture rate assumptions, which estimate the share-based awards that will
ultimately vest, requires judgment, and to the extent actual results or updated
estimates differ from our current estimates, such amounts will be recorded as a
cumulative adjustment in the period of change and could be materially different
from share-based compensation expense recorded in prior periods.

For the three months ended March 31, 2022 and 2021, we accrued approximately
$7.1 million and $5.3 million for cash awards, respectively, related to bonus to
be settled in shares of our stock and recorded a corresponding expense, which is
included as a component of stock-based compensation expense in the accompanying
condensed consolidated financial statements for the three months ended March 31,
2022 and 2021, respectively.

For the three months ended March 31, 2022 and 2021, there was approximately
$42.4 million and $17.6 million, respectively, of total unrecognized
compensation cost related to nonvested share-based compensation arrangements.
That cost is expected to be recognized over a weighted average period of
approximately 2.7 years. For the three months ended March 31, 2022 and 2021,
there was approximately $149.0 million and $65.7 million, respectively, of total
unrecognized compensation cost related to nonvested restricted stock units. That
cost is expected to be recognized over the remaining weighted average period of
approximately 3.1 years.

Non-cash compensation expenses

The net amounts of non-cash compensation are as follows:


                                        Three Months Ended
                                            March 31,
                                        2022           2021
                                          (In thousands)

Stock-based compensation expense $31,866 $14,611

Accounts Receivable


We perform ongoing credit evaluations of our customers' financial condition
(except for customers who purchase the LivePerson services by credit card via
Internet download) and have established an allowance for doubtful accounts based
upon factors surrounding the credit risk of customers, historical trends and
other information that we believe to be reasonable, although they may change in
the future. If there is a deterioration of a customer's credit worthiness or
actual write-offs are higher than our historical experience, our estimates of
recoverability for these receivables could be adversely affected. Although our
large number of customers limits our concentration of credit risk, if we
experience a significant write-off from one of our large customers, it could
have a material adverse impact on our condensed consolidated financial
statements. No single customer accounted for or exceeded 10% of our total
revenue for the three months ended March 31, 2022 and 2021. During the three
months ended March 31, 2022, we increased our allowance for doubtful accounts
from $6.3 million as of December 31, 2021 to approximately $7.2 million. A large
proportion of receivables are due from larger corporate customers that typically
have longer payment cycles. Accounts receivable is presented net of an allowance
for doubtful accounts and sales reserve of
                                       44
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$7.2 million and $3.9 million from March 31, 2022respectively, and $6.3 million and $4.1 million from December 31, 2021respectively.


An allowance for doubtful accounts is established for losses expected to be
incurred on accounts receivable balances. Judgment is required in the estimation
of the allowance and we evaluate the collectability of our accounts receivable
based on a combination of factors. If we become aware of a customer's inability
to meet its financial obligations, a specific allowance is recorded to reduce
the net receivable to the amount reasonably believed to be collectible from the
customer. For all other customers, we use an aging schedule and recognize
allowances for doubtful accounts based on the creditworthiness of the debtor,
the age and status of outstanding receivables, the current business environment
and our historical collection experience adjusted for current expectations for
the customer or industry. Accounts receivable are written off against the
allowance for uncollectible accounts when we determine amounts are no longer
collectible.

Goodwill

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 and is tested for impairment at least annually or whenever events
or changes in circumstances indicate that the carrying value may not be
recoverable. We have determined that we operate as three reporting units and
have selected September 30 as the date to perform our annual impairment test. In
the valuation of goodwill, management must make assumptions regarding estimated
future cash flows to be derived from our business. If these estimates or their
related assumptions change in the future, we may be required to record
impairment for these assets.

We have the option to first perform a qualitative assessment to determine if it
is more likely than not that the fair value of a reporting unit is less than its
carrying amount. However, we may elect to bypass the qualitative assessment and
proceed directly to the quantitative impairment tests. The impairment test
involves comparing the fair value of the reporting unit to its carrying value,
including goodwill. A goodwill impairment will be the amount by which a
reporting unit's carrying value exceeds its fair value. The impairment is
limited to the carrying amount of goodwill.

No goodwill impairment charge has been recorded for any of the periods presented.

Impairment of long-lived assets


The carrying amounts of our long-lived assets, including property and equipment,
lease right of use assets, capitalized internal-use software, costs to obtain
customer contracts, and acquired intangible assets, are reviewed for impairment
whenever events or changes in circumstances indicate that the carrying value of
these assets may not be recoverable or that the useful lives are shorter than
originally estimated. Recoverability of assets to be held and used is measured
by comparing the carrying amount of an asset to future undiscounted net cash
flows the asset is expected to generate over its remaining life. If the asset is
considered to be impaired, the amount of any impairment is measured as the
difference between the carrying value and the fair value of the impaired asset.
If the useful life is shorter than originally estimated, we amortize the
remaining carrying value over the new shorter useful life.

Income taxes


Income taxes are accounted for under the asset and liability method. Under this
method, deferred tax assets and liabilities are recognized for the future tax
consequences attributable to differences between the financial statement
carrying amounts of existing assets and liabilities and their respective tax
bases and operating loss and tax credit carryforwards. Deferred tax assets and
liabilities are measured using enacted tax rates expected to apply to taxable
income in the years in which those temporary differences are expected to be
recovered or settled. In assessing the realizability of deferred tax assets,
management considers whether it is more likely than not that some portion or all
of the deferred tax assets will be realized. The ultimate realization of
deferred tax assets is dependent upon the generation of future taxable income
during the periods in which those temporary differences are expected to become
deductible. Management considers the scheduled reversal of deferred tax
liabilities, projected future taxable income and tax planning strategies in
making this assessment. The Company includes interest accrued on the
underpayment of income taxes in interest expense and penalties, if any, related
to unrecognized tax benefits in general and administrative expenses. The Company
recorded a valuation allowance against its U.S. and Germany deferred tax assets
as it considered its cumulative loss in recent years as a significant piece of
negative evidence. Since valuation allowances are evaluated on a jurisdiction by
jurisdiction basis, we believe that the deferred tax assets related to
LivePerson Australia Holdings Ptd. Ltd., LivePerson (UK) Limited, Kasamba Inc.,
LivePerson Japan and LivePerson Limited. (Israel) are more likely than not
                                       45
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to be realized given that these jurisdictions have positive cumulative pre-tax accounting income after adjusting for permanent and non-recurring items. During the year ended
December 31, 2021there was an increase in the recorded valuation of
$51.7 million.

Legal contingencies


We are subject to legal proceedings and litigation arising in the ordinary
course of business. Periodically, we evaluate the status of each legal matter
and assess our potential financial exposure. If the potential loss from any
legal proceeding or litigation is considered probable and the amount can be
reasonably estimated, we accrue a liability for the estimated loss. Significant
judgment is required to determine the probability of a loss and whether the
amount of the loss is reasonably estimable. The outcome of any proceeding is not
determinable in advance. As a result, the assessment of a potential liability
and the amount of accruals recorded are based only on the information available
at the time. As additional information becomes available, we reassess the
potential liability related to the legal proceeding or litigation, and may
revise our estimates. Any revisions could have a material effect on our results
of operations. See Note 15 - Legal Matters for additional information on our
legal proceedings and litigation.

Recently issued accounting standards


Except as referenced below under "Recently Adopted Accounting Pronouncements,"
there were no other recently issued accounting pronouncements or changes in
accounting pronouncements during the quarter ended March 31, 2022, that are of
significance or potential significance to the Company.

Recently Adopted Accounting Pronouncements

See Note 1 – Description of Business and Basis of Presentation for a complete description of recently adopted accounting pronouncements.

                             Results of Operations

We are organized into two operating segments for purposes of making operating
decisions and assessing performance. The Business segment enables brands to
leverage the Conversational Cloud's sophisticated intelligence engine to connect
with consumers through an integrated suite of mobile and online business
messaging technologies. The Consumer segment facilitates online transactions
between Experts and Users seeking information and knowledge for a fee via mobile
and online messaging.

     Comparison of the Three Months Ended March 31, 2022 and March 31, 2021

Revenue


The following tables set forth our results of operations for the periods
presented and as a percentage of our revenues for those periods. The
period-to-period comparison of financial results is not necessarily indicative
of future results.

                                              Three Months Ended March 31,
                                           2022                  2021         % Change
                                          (Dollar in thousands)
         Revenue by Segment:
         Business                $      121,075               $  98,880           22  %
         Consumer                         9,122                   9,011            1  %
         Total                   $      130,197               $ 107,891           21  %


Business revenue increased by 22% to $121.1 million for the three months ended
March 31, 2022 from $98.9 million for the comparable period in 2021. The
increase in B2B revenue during the three months ended March 31, 2022 is driven
mainly by year-over-year increase in hosted services of $22.7 million. Included
in hosted services is an increase in revenue that is variable based on
interaction and usage of approximately $8.8 million. The increase in Business
revenue was driven in nearly equal parts by existing and new customers as we
generated greater demand for its Conversational Commerce software and Gainshare
solutions. Business revenue also benefited from timing of revenue between the
first and second quarter. Our ARPU for our enterprise and mid-market customers
was approximately $645,000 for the trailing twelve months ended March 31, 2022,
as compared to approximately $490,000 for the comparable period in 2021.
Similarly, we are seeing strong revenue retention rates. Revenue retention rate
for enterprise and mid-market customers on the Conversational Cloud was within
our target range
                                       46
--------------------------------------------------------------------------------

105% to 115% in the first quarter of 2022 and exceeded the upper end of our target range of 105% to 115% in the first quarter of 2021.

Consumer income increased by 1% to reach $9.1 million for the three months ended
March 31, 2022 from $9.0 million for the comparable period in 2021. This improvement was driven by increasingly effective user value and stable consumer demand to engage with experts and advisors through conversational messaging channels.

Cost of Revenue – Business


Cost of revenue - business consists of compensation costs relating to employees
who provide customer service to our customers, compensation costs relating to
our network support staff, outside labor provider costs, the cost of supporting
our server and network infrastructure, and allocated occupancy costs and related
overhead.

                                                 Three Months Ended March 31,
                                          2022                       2021         % Change
                                              (Dollar in thousands)
      Cost of revenue - business    $      48,221                 $ 31,610            53  %
      Percentage of total revenue              37   %                   29  %
      Headcount (at period end)               218                      251           (13) %


Cost of revenue - business increased by 53% to $48.2 million for the three
months ended March 31, 2022, from $31.6 million for the comparable period in
2021. This increase in expense is primarily attributable to business services
and outsourced subcontracted labor of approximately $7.7 million driven by
Health and Gainshare services, which power Conversational Commerce programs on
behalf of customers. We also recognized an increase in expenses for backup
server facilities of approximately $3.4 million, in amortization expense of
approximately $3.2 million, an increase in salary and employee related expenses
of approximately $1.9 million.

Revenue Cost – Consumer


Cost of revenue - consumer consists of compensation costs relating to employees
who provide customer service to Experts and Users, compensation costs relating
to our network support staff, the cost of supporting our server and network
infrastructure, credit card and transaction processing fees and related costs,
and allocated occupancy costs and related overhead.

                                                 Three Months Ended March 31,
                                          2022                        2021        % Change
                                              (Dollar in thousands)
      Cost of revenue - consumer    $      1,346                   $ 1,909           (29) %
      Percentage of total revenue              1   %                     2  %
      Headcount (at period end)               13                        24           (46) %


Cost of revenue - consumer decreased by 29% to $1.3 million for the three months
ended March 31, 2022 from $1.9 million for the comparable period in 2021. This
decrease in expense is primarily related to a decrease in salary and employee
related expenses of approximately $0.2 million and in credit card processing
fees of approximately $0.2 million.

Sales and Marketing – Business


Sales and marketing - business expenses consist of compensation and related
expenses for sales and marketing personnel, as well as advertising, marketing
events, public relations, trade show exhibit expenses and allocated occupancy
costs and related overhead.

                                                  Three Months Ended March 31,
                                           2022                       2021         % Change
                                               (Dollar in thousands)
    Sales and marketing - business   $      52,283                 $ 30,203            73  %
    Percentage of total revenue                 40   %                   28
 %
    Headcount (at period end)                  701                      312           125  %


                                       47
--------------------------------------------------------------------------------

Sales and marketing - business expenses increased by 73% to $52.3 million for
the three months ended March 31, 2022 from $30.2 million for the comparable
period in 2021. This increase was primarily attributable to an increase in
salary and related employee expenses of approximately $15.1 million, an increase
in marketing expense of approximately $4.3 million, an increase in business
services of approximately $1.8 million, and an increase in backup server
facilities of approximately $0.9 million.

We have adjusted our marketing and hiring efforts to account for the impact of
the COVID-19 pandemic. In particular, we have adapted our marketing strategy to
include targeted digital experiences that emphasize the unique positioning of
our messaging and AI offerings to help brands succeed in this new environment.
Our marketing message has shifted to include business continuity and
virtualization of the contact center in addition to business improvement.

Sales and Marketing – Consumer

Sales and Marketing – Consumer expenses include compensation and related expenses for marketing personnel, as well as online promotion, public relations and allocated occupancy costs and related overhead.

                                                  Three Months Ended March 31,
                                           2022                        2021        % Change
                                               (Dollar in thousands)
    Sales and marketing - consumer   $      5,849                   $ 6,750

(13)%

    Percentage of total revenue                 4   %                     6

%

    Headcount (at period end)                  16                        19

(16)%



Sales and marketing - consumer expenses decreased by 13% to $5.8 million for the
three months ended March 31, 2022 from $6.8 million for the comparable period in
2021. This decrease is primarily attributable to a decrease in marketing expense
of approximately $0.5 million, a decrease in business services and outsourced
subcontracted labor of approximately $0.4 million, and a decrease in salary and
related expenses of approximately $0.1 million, partially offset by a an
increase in backup server facilities of approximately $0.1 million.

General and administrative

Our general and administrative expenses include compensation and related costs of management, accounting, legal, human resources and administrative personnel, professional fees and other general corporate expenses.

                                                 Three Months Ended March 31,
                                          2022                       2021         % Change
                                              (Dollar in thousands)
      General and administrative    $      29,735                 $ 14,486           105  %
      Percentage of total revenue              23   %                   13  %
      Headcount (at period end)               165                      111            49  %


General and administrative expenses increased by 105% to $29.7 million for the
three months ended March 31, 2022 from $14.5 million for the comparable period
in 2021. This increase is primarily related to an increase in salary and
employee related expenses of approximately $11.1 million, an increase in
business services and outsourced labor of approximately $1.8 million, an
increase in facilities of approximately $1.2 million, and an increase in hosting
services of approximately $1.1 million.


                                       48
--------------------------------------------------------------------------------

Product development


Our product development expenses consist of compensation and related expenses
for product development personnel as well as allocated occupancy costs and
related overhead and outsourced labor and expenses for testing new versions of
our software.

                                                 Three Months Ended March 31,
                                          2022                       2021         % Change
                                              (Dollar in thousands)
      Product development           $      56,072                 $ 33,455            68  %
      Percentage of total revenue              43   %                   31  %
      Headcount (at period end)               674                      501            35  %


Product development costs increased by 68% to $56.1 million for the three months
ended March 31, 2022 from $33.5 million for the comparable period in 2021. This
increase is primarily related to an increase in salaries and employee related
expenses of approximately $16.2 million, an increase in business services and
outsourcing subcontracted labor of approximately $4.6 million, an increase in
credit card processing and bank fees of $1.2 million, and an increase in
depreciation expense of approximately $0.6 million. We continued to make
investments in public cloud migration, and in enhancing and expanding new
features of the Conversational Cloud, including Voice. Also, we continued to
invest in bringing more data scientists and machine learning engineers to focus
on Conversational AI.

We continue to invest in new product development efforts to expand the
capability of Conversational Cloud. Upon completion, the project costs will be
depreciated over five years. For the three months ended March 31, 2022,
$9.8 million was capitalized, compared to $8.2 million for the comparable period
in 2021.

Restructuring Costs

Restructuring costs consist of reprioritizing and reallocating resources to focus on areas considered to have high growth potential.

                                                 Three Months Ended March 31,
                                         2022                         2021        % Change
                                              (Dollar in thousands)
      Restructuring costs           $      (23)                    $ 2,732          (101) %
      Percentage of total revenue            -   %                       3  %


Restructuring costs decreased by 101% to less than $0.1 million during the three
months ended March 31, 2022 from $2.7 million for the comparable period in 2021.
The restructuring cost for the three months ended March 31, 2021 was a result of
our partnership with Infosys to transform our technology infrastructure on the
public cloud, to build integrated solutions and a global practice around our
Conversational Cloud, and to redefine how brands communicate. This variance was
primarily attributable to an increase in restructuring costs related to lease
abandonment, along with severance and other compensation costs.

Amortization of purchased intangible assets

Three months completed March, 31st,

                                                             2022                  2021                % Change
                                                              (Dollar in 

thousands)

Amortization of purchased intangibles                 $        1,841           $     375                      391  %
Percentage of total revenues                                       1   %               -  %


Amortization expense for purchased intangibles increased by 391% to $1.8 million
for the three months ended March 31, 2022 from $0.4 million for the comparable
period in 2021. The increase is primarily attributable to amortization of
patents and customer relationships as well as the intangible assets acquired in
the acquisitions of VoiceBase, Tenfold, and e-bot7 that occurred in 2021 and the
acquisition of WildHealth in the first quarter of 2022.
                                       49
--------------------------------------------------------------------------------

An additional depreciation charge of an amount of $4.4 million and $1.2 million
for the three months ended March 31, 2022 and 2021 is included in the cost of sales.

Other expenses, net


Other expense, net consists of interest income on cash and cash equivalents,
investment income and financial (expense) income which is a result of currency
rate fluctuations associated with exchange rate movement of the U.S. dollar
against the New Israeli Shekel ("NIS"), British Pound, Euro, Australian Dollar,
and Japanese Yen.

                                            Three Months Ended March 31,
                                          2022                   2021        % Change
                                         (Dollar in thousands)
          Interest expense     $       (490)                  $ (9,129)     

(95)%

          Other income, net              60                        712      

(92)%

          Other expense, net   $       (430)                  $ (8,417)     

(95)%



Other expense, net decreased to $0.4 million for the three months ended
March 31, 2022, respectively, from other expense of $8.4 million for the
comparable periods in 2021 primarily due to the adoption of ASU 2020-06 and the
elimination of the debt discount that was previously being amortized to interest
expense over the contractual term of the Notes.

Benefit from Income Taxes

                                                 Three Months Ended March 31,
                                                2022                    2021       % Change
                                              (Dollar in thousands)
     Benefit from income taxes     $         (193)                    $ 

(851) (77)%



Benefit from income taxes was $0.2 million and $0.9 million for the three months
ended March 31, 2022 and 2021, respectively. Our consolidated effective tax rate
was impacted by the statutory income tax rates applicable to each of the
jurisdictions in which we operate.

The tax benefit of $0.2 million for the period was made up of a tax benefit for
the period of $1.2 million on operating earnings coupled with a stock
compensation tax deficiency of $0.2 million related to the stock compensation
arrangements of LivePerson, Inc., LivePerson (UK) Limited and LivePerson Limited
(Israel). During the quarter, the Company acquired WildHealth in a non-taxable
transaction that resulted in a tax provision of $1.6 million related to the
release of valuation allowance on certain LivePerson, Inc. (acquirer) net
operating losses.

© Edgar Online, source Previews

]]>
Bitcoin hits $30,000 as Wall Street continues to struggle, but is it bouncing back? http://louthonline.com/bitcoin-hits-30000-as-wall-street-continues-to-struggle-but-is-it-bouncing-back/ Tue, 10 May 2022 10:04:17 +0000 http://louthonline.com/bitcoin-hits-30000-as-wall-street-continues-to-struggle-but-is-it-bouncing-back/

Tuesday, May 10, 2022 11:04 a.m.

The slide continues in financial markets this morning, with no exceptions for crypto. The price of bitcoin approached $30,000 yesterday – the lowest since July 2021.

The leading cryptocurrency by market capitalization has since rebounded somewhat, changing hands for around $32,000 at the time of writing. However, it is still down 4% since this time yesterday and 16% since this time last week.

Ethereum price only did slightly better, losing around 2% in the past day. However, other alt coins fell more.

Again, the price of major cryptocurrencies appears to be echoing global equities, which on Monday suffered their worst one-day decline since the outbreak of the coronavirus pandemic in 2020. There does not appear to have been any specific catalyst this time, instead analysts are indicating growing pessimism about the state of the world’s major economies which seems to be reaching a fever pitch. China’s tumbling export growth and weak manufacturing figures in Germany and France have helped to increase rumors of a recession, coming just as central banks are reining in stimulus measures amid the crisis. and enact interest rate hikes.

Although the situation may look grim, there are also positive signs that the economy may be getting back on track.

Consumer spending remains strong, while the labor market in most major economies appears to be in good shape. These sudden drops are nothing new to the crypto markets or traditional financial markets, but can understandably scare off new investors.

Billionaire business magnate Warren Buffett once said “be fearful when others are greedy and greedy when others are fearful,” and there is definitely opportunity when others around you lose their minds.

Remember though, never invest more than you can afford to lose and exercise caution when investing. Cryptocurrency is a long-term investment and it’s always best to zoom out and see the big picture before making any emotional decisions based on what seems to be the current mood.

Would you like to help spread Bitcoin adoption and education in the UK and even stack sats while you do it? Well, now you can!

the Bitcoin Pioneers The community, backed by Barry Silbert’s Digital Currency Group, was created to introduce Bitcoin to a mainstream audience in a meaningful way and now has members across the UK.

We share tips, stories, and ideas on how to encourage others to try Bitcoin for the first time. And, thanks to the support of Luno, each trailblazer receives £500 worth of Bitcoin per month to share with newbies, helping them get started.

So if you’re passionate about Bitcoin, why not sign up today? Click here to know more !

All comments on Crypto AM Daily in association with Luno are welcome via email at James.Bowater@cityam.com 🙏🏻

Yesterday’s Crypto AM Daily in association with Luno

In the markets

The Bitcoin Economy

*Definitions and ideas can be found at https://bytetree.com/research

Total Crypto Market Cap

The total capitalization of the entire cryptocurrency market at the time of writing is currently $1.463 trillion.

What Bitcoin Did Yesterday

We closed yesterday, May 9, 2022, at the price of $30,296.95. Yesterday’s daily high was $34,222.07 and the daily low was $30,296.95.

bitcoin market capitalization

The market capitalization of Bitcoin at the time of writing is $607.6 billion. To put this into context, Gold’s market cap is $11.826 billion and Tesla’s is $815.45 billion.

bitcoin volume

The total spot trading volume reported by all exchanges in the last 24 hours was $81.582 billion. High volumes may indicate that a large price move has stronger support and is more likely to be supported.

Volatility

Bitcoin price volatility over the past 30 days is 45.32%.

Fear and Greed Index

Market sentiment today is tenin Extreme Fear.

Bitcoin market dominance

Bitcoin market dominance today is 41.78. His lowest dominance on record was 37.09 on January 1, 2018.

Relative Strength Index (RSI)

The daily RSI is currently 33.41. Values ​​of 70 or higher indicate that an asset is becoming overbought and may be primed for a trend reversal or undergoing a price correction – an RSI reading of 30 or lower indicates an oversold or undervalued condition.

Convince your grandmother: extract of the day

“Bitcoin is a remarkable cryptographic achievement, and the ability to create something that is unduplicable in the digital world has enormous value.”

Eric Schmidt, former CEO of Google

what they said yesterday

The future is bright…

Without fear…

Keep calm and keep HODLing…

Crypto AM: Editor’s Picks

‘Let the people invest’: Matt Hancock argues for liberal crypto rules

Explained: Why Treasury Is So Sold On Stablecoins

Worries crypto will be used to avoid ‘misplaced’ sanctions, says Matt Hancock

Meet the Hackers Helping People Recover Lost Crypto Assets

The Cryptocurrency Fundraisers Behind Ukraine’s Military Effort

Exclusive: Fireblocks valuation soars to $8 billion in $550 million funding round

Crypto-Crazy Couple Name Baby After Favorite Digital Asset

Cryptocurrency-loving parents Bruno Karno and his wife Agatha named their first-born Cardano after their favorite crypto.

Bitcoin hashrate hits new all-time high

Bitcoin Mining Company - Cryptocurrency Illustrations

Peter McCormack: Turning Bedford FC into a Global Bitcoin Brand

In an interview with Crypto AM, Bitcoin investor and podcaster Peter McCormack talks about his purchase of Bedford FC.

Crypto AM: Features

Crypto AM: Founders Series

https://www.cityam.com/profile/crypto-am-founders-series/

Crypto AM: Voice of the Industry

Changpeng 'CZ' Zhao, CEO of Binance

Crypto AM: Contributors

Crypto AM: Conversation with James Bowater

Landscape by Charles Hoskinson and James Bowater

Crypto AM: The Money of Tomorrow with Gavin S Brown

Tomorrow's Money with Gavin S Brown

Crypto AM: Mix in the Metaverse with Dr. Chris Kacher

Dr. Chris Kacher mixing in the Metaverse

Crypto AM: Visions of the Future, Past and Present with Alex Lightman

Alex Lightman Visions of the future, past and present

Crypto AM: Tiptoeing Through Crypto with Monty Munford

Monty Munford stole the lead

Crypto AM: Extracting a Byte from Digital Assets with Jonny Fry

Jonny Fry takes a byte on digital assets

Crypto on the Podium

Stefania Barbaglio Crypto on the podium

Crypto AM: Events

For those of you who missed the 2021 Crypto AM DeFi & Digital Inclusion Online Summit – you can now watch the two-part event via YouTube

part one

https://www.youtube.com/watch?v=dvqNMNZTIDE

Second part

https://www.youtube.com/watch?v=WXhX_-Tr5j0

Cautionary Notes

It’s certainly tempting to get carried away with the excitement, but please heed these caveats: do your own research, only invest what you can afford, and make good decisions. The indicators in this article will hopefully help you. Remember though, the content of this article is for informational purposes only and does not constitute investment advice or any form of recommendation or invitation. City AM, Crypto AM and Luno always advise you to obtain your own independent financial advice before investing or trading in cryptocurrency.

All information correct as of 08:00 BST

]]> AUD/USD falls to July 2020 levels near 0.6950 as inflation and growth concerns propel fear trading http://louthonline.com/aud-usd-falls-to-july-2020-levels-near-0-6950-as-inflation-and-growth-concerns-propel-fear-trading/ Tue, 10 May 2022 00:00:00 +0000 http://louthonline.com/aud-usd-falls-to-july-2020-levels-near-0-6950-as-inflation-and-growth-concerns-propel-fear-trading/
  • AUD/USD remains under pressure at nearly two-year lows as risk aversion dominates.
  • Growing fears that higher inflation and tighter monetary policies would weigh on economic growth helped the declines.
  • Headlines from China and Russia offered additional clues to spread pessimism.
  • Aussie NAB Sentiment data, Fedspeak may entertain traders but risk catalysts are key ahead of Wednesday’s US CPI.

AUD/USD bears hold the reins around 0.6950, the lowest levels since July 2020, after the risk-aggressive mood caused the pair to print a three-day downtrend to test a low of several months. That said, the Aussie pair is trading sideways in the early hours of Tuesday, following the notable decline outlined on Monday.

Market fears were bolstered by growing worries about economic growth as inflation pushes central bankers toward tighter monetary policies. Worsening covetous conditions in China and Russia’s ignorance of global anger over Ukraine’s invasion also contributed to sour sentiment, as well as weighing on the risk-barometer pair. .

A weaker import of metals by China and a further tightening of business restrictions in Shanghai, as well as Beijing, due to the faster spread of the coronavirus variant, signaled new challenges for the chain. global supply and raw material price difficulties. Iron ore, Australia’s top export, fell more than 6.0% and contributed to the AUD/USD pair’s slide yesterday.

Elsewhere, Russia’s victory parade has traders expecting further geopolitical difficulties in Ukraine as Moscow expects ‘special operations results’, showing no willingness to scale back military operations despite Western sanctions.

Belligerent comments from Fed policymakers also contributed to the declines in AUD/USD. Richmond Fed President Thomas Barkin kept the 75 basis point rate hike on the table while the Atlanta Fed’s Raphael Bostic promoted a series of 50 basis point rate hikes.

Amid those games, Wall Street saw red but U.S. Treasury yields failed to cheer risky sentiment, despite a refreshing multi-day high earlier on Monday. Additionally, the US Dollar Index (DXY) hit a 20-year high amid a flight to safety.

Next, business confidence and National Australia Bank (NAB) trading conditions for May will lead short-term moves in AUD/USD ahead of comments from expected Fed speakers. However, particular attention will be paid to how traders react to fears of higher inflation and growth, as well as headlines out of China and Russia. That said, NAB business confidence is expected to drop from 16 to 14, while trading conditions could drop from 18 to 23.

Technical analysis

With a sharp break down from the yearly low around 0.6965, AUD/USD becomes vulnerable to testing the June 2020 low near 0.6775. During the fall, the round numbers of 0.6900 and 0.6800 can offer intermediate stops.

]]>
Why Suncor Energy shares jumped more than 10% in April http://louthonline.com/why-suncor-energy-shares-jumped-more-than-10-in-april/ Mon, 09 May 2022 12:41:28 +0000 http://louthonline.com/why-suncor-energy-shares-jumped-more-than-10-in-april/

What happened

Shares of the Canadian tar sands giant Suncor Energy (SU 0.38%) jumped 10.3% in April, according to data provided by S&P Global Market Intelligence. What makes this gain even more remarkable is that the S&P500 fell 8.8% last month.

The main catalyst fueling the oil inventoryThe rally was news that an activist investor had taken a stake in the company with the intention of shaking things up.

Image source: Getty Images.

So what

Elliott Investment Management has disclosed that it has invested in Suncor Energy and holds a 3.4% economic stake in the oil company. The activist investor also sent a letter to Suncor Energy’s board of directors calling for change. The company described a series of issues with the company, which have caused its share price to stagnate since 2019 despite soaring crude oil prices.

Elliott calls for board improvement and strategic and management review. He sees up to $30 billion in value creation opportunities, which could lead to a more than 50% increase in the stock price. Potential changes he described were replacing CEO Mark Little, increasing shareholder return from 50% to 80% of its post-dividend cash flow, and exploring the sale of several business units.

One thing about Suncor that the activist investor liked was its plan to dedicate 10% of its capital spending to carbon reduction projects. This is notable because the company had made a major change to this strategy earlier in the month by increasing its focus on hydrogen and renewable fuels. It is partnering with a project to build a world-class hydrogen plant in Alberta and deploying next-generation renewable fuel technologies. As part of this change in strategy, the company plans to sell its wind and solar energy assets.

Now what

Elliott Investment Management has an excellent track record of investing in the oil and gas sector. He invests in companies that he believes have underperformed their potential. The company then tries to work with management teams to improve performance, unlock value and deliver higher returns to all shareholders.

While Suncor issued a press release indicating its openness to working with Elliott, the investment firm has issued strong criticism of the board and Little, which may provoke some resistance. However, given Elliott’s successes and Suncor’s relative underperformance, he may be able to persuade other investors to join him in pushing for change. These future moves could give Suncor Energy shares the fuel they need to continue rising in the coming months.

]]>
Statsguru: Six charts show structural constraints of Indian economy http://louthonline.com/statsguru-six-charts-show-structural-constraints-of-indian-economy/ Mon, 09 May 2022 00:40:00 +0000 http://louthonline.com/statsguru-six-charts-show-structural-constraints-of-indian-economy/

RBI report said India should further increase exports and carry out import substitution

Topics
StatsGuru | Indian Economy | RBI

The Reserve Bank of India (RBI) last week announced a 40 basis point hike in the key repo rate. The rate review came after two years when the central bank cut the rate by a similar amount.

The rate hike came at a time when the economy was showing signs of recovery. The RBI will now have to balance inflation and growth, especially as the pandemic has exposed the structural weaknesses in India’s economy. While the corporate sector has performed better, as evidenced by the performance of the stock market, recent analysis by the RBI in its Currency and…




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First published: Monday 09 May 2022. 06:10 IST

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The Day – Back in full force: Goodspeed is once again hosting a full season of musicals, led by ‘Cabaret’ http://louthonline.com/the-day-back-in-full-force-goodspeed-is-once-again-hosting-a-full-season-of-musicals-led-by-cabaret/ Sun, 08 May 2022 04:13:57 +0000 http://louthonline.com/the-day-back-in-full-force-goodspeed-is-once-again-hosting-a-full-season-of-musicals-led-by-cabaret/

It’s 2022 and Goodspeed Musicals is hosting a full season of full-scale musicals for the first time since the pandemic changed the theater world.

Kicking off is a classic show Goodspeed has never done before: “Cabaret”.

“Cabaret” was a title Goodspeed executives had discussed over the years, says Donna Lynn Hilton, who became artistic director in January 2021 after more than three decades with the organization. (David Byrd was named chief executive of Goodspeed at the same time.)

As they discussed potential lineups for 2022, as the world emerged from the pandemic, this show kept coming back.

“We know we have an older audience that never comes back to us for so many reasons related to their lives and what the pandemic has done to them,” Hilton says. So, she says, in deciding to produce “Cabaret,” “it’s a pretty intentional choice to give our existing audience a title they know and appreciate and, in many cases, love. They know certainly the score. And to give our developing audience, our growing audience, something that has more relevance right now because we’re all coming out of probably the most traumatic thing that’s happened to a lot of us over the course of our life.”

Discussing this relevance, Hilton said someone at a members’ event asked her if the rise of fascism across the world had anything to do with the choice of “Cabaret,” since the rise of Nazism in 1929-1930 in Germany is a major element that weighs on the scenario. . She first said no, then realized the answer was yes.

“Because the central question of the ‘Cabaret’ story is, what would you do if they came looking for your neighbor? I think we’re at a point in the world where we have to ask ourselves that question,” said Hilton.

She says “Cabaret” is also light-hearted, funny and entertaining, with fantastic musical numbers and amazing dancing, but that won’t let the audience off the hook without considering the aforementioned question.

All about “Cabaret”

“Cabaret” is set in Berlin as the Jazz Age fades and the Nazis take more control. American writer Cliff Bradshaw meets singer Sally Bowles at the decadent Kit Kat Club, where people blithely ignore what’s going on in the country. The show follows their dramatic relationship. Another equally tense romance during “Cabaret” is between Fraulein Schneider, who owns a boarding house, and Herr Schultz, a Jewish fruit vendor.

“Cabaret,” which hit Broadway in 1966, features songs by John Kander and Fred Ebb, including “Maybe This Time” and “Don’t Tell Mama.” His book is by Joe Masteroff, based on John Van Druten’s play from the stories of Christopher Isherwood.

Hilton notes that the stage version of “Cabaret” is very different from the Oscar-nominated film adaptation. A number of characters who are central to the story on stage have much smaller presences – or don’t exist at all – in the film.

For people who only know the movie, she says, “You’re going to see something that’s going to surprise you in terms of the strength of the story, in terms of the heart of the story, in terms of its relevance in our world today. today.”

Casting on

The cast is a mix of Broadway veterans and new talent, many making their Goodspeed debut.

“We’ve looked at history, and we’ve considered the responsibility that we all have in our industry right now, to make sure we’re creating avenues for artists who may not have had them in the past. what does it look like on “Cabaret”? Well, “Cabaret” is set in Weimar, Germany during the rise of Nazism. … There’s a story there about the race that needs to be protected telling it, and at the same time, we want to showcase the rainbow of talent that is American theater today,” Hilton said.

“We made the decision to play the roles that are central to the impact of the rise of Nazism at this time with white actors. So the roles of Schultz, Schneider, Cliff Bradshaw…and Ernst (a smuggler who, it turns out, is a Nazi) are white. The rest of the company is the diversity of the globe. We thought for an audience in 2022, this would underscore, reinforce, support this question of: What are you going to do you do when the person who is not like you is in danger? Are you going to be able to step in and become an ally or are you going to turn your back?”

Pit Echoes

The show is directed by James Vasquez, who had worked at Goodspeed a decade ago developing a piece for the Goodspeed Festival of New Musicals. He lives in California, and Hilton says one of the great things that’s happened during the pandemic is that she’s been able to spend hours on her screen, talking to people who live far away.

“We have so many new artists working with us this year that I wouldn’t have had the opportunity to meet them if I hadn’t been forced to sit down for a year,” she says.

A co-worker suggested he contact Vasquez, and they had two great conversations that led to him directing “Cabaret.”

The production’s choreographer is Lainie Sakakura, who worked on “A Grand Night for Singing” at Goodspeed last fall. Sakakura suggested asking Nicole Fosse, the daughter of dancer/actress Gwen Verdon and director/choreographer Bob Fosse, who directed the 1972 film version of “Cabaret,” to reenact one of his numbers. Nicole Fosse created The Verdon Fosse Legacy, an organization created to protect her father’s intellectual property.

Allowing a rebuild in a professional production is rare, but Fosse has agreed. The Goodspeed production will recreate “Mein Herr”.

When Goodspeed executives asked Sakakura to choreograph the production, they wanted her to bring her own sensibility to the piece, but they also knew she enjoyed the Fosse style.

Sakakura was in the original show’s company “Fosse”, so she has a direct connection to Fosse’s work.

“She spent years in the room preparing for this production, working with dancers who had worked with him and Gwen, and she worked with Gwen, learning the Fosse repertoire,” Hilton explains.

Back in shape

For the past two pandemic-hit summers, Goodspeed had pivoted and presented outdoor concerts and shows instead of its traditional indoor musical plays.

Hilton says it feels really good to be back to a full season of musicals at the Opera.

“It seems normal in a kind of scary way after everything we’ve been through. But, you know, it’s a good thing. At the same time, it’s really stressful and we’re walking on rocks all the time. hot coals, just trying to make sure we stay healthy, everyone is healthy, the public is coming back the way we need them. So far, they absolutely are. We’re really, really encouraged,” she says.

When it comes to preparation, the biggest issue has been staffing, as is the case with so many other companies. For Goodspeed, it is throughout the institution but especially in the production department.

“So many people who have been sidelined during the pandemic have had to make the decision to go into other fields in order to support themselves and their families, so the workforce of our industry is really exhausted right now. It takes so much effort to secure that one person. … It’s the same for the theater industry as for the manufacturing industry as for all other industries in this time,” Hilton says.

Goodspeed plans to reopen its Terris Theater in Chester, where the theater develops new musicals, in 2023. The work at the Opera guarantees what Goodspeed is doing at the Terris, so executives are waiting to bring Terris back until the Opera is back and running and they are sure that audiences are back to the level they need.

]]> APAC Week Ahead: Spotlight on CPI, PPI and Chinese Tech Profits in the US http://louthonline.com/apac-week-ahead-spotlight-on-cpi-ppi-and-chinese-tech-profits-in-the-us/ Sun, 08 May 2022 02:57:39 +0000 http://louthonline.com/apac-week-ahead-spotlight-on-cpi-ppi-and-chinese-tech-profits-in-the-us/

JBroader Asian stock markets will be under pressure this week following the Fed-induced storm in broader markets amid recession fears. However, the argument now comes from two key factors. Have stock markets sufficiently priced in the face of central bank tightening approaches? Is there a chance that inflation will peak? Investors need to be convinced of a bottoming out solely based on the two outcomes, an undervalued stock market and spike in inflation. Thus, the CPI data from the United States will be a crucial economic element that will have a major impact on the trajectory of the market.

In Asia, another objective is a political roadmap of divergence between China and the West. Most developed economies are accelerating monetary policy tightening to curb inflation, while the Chinese government is going all out to stimulate the economy following the intense Covid lockdowns. China’s top tech companies will launch their earnings report this week, which will be key for stock markets in the region.

Key points

  • The price of crude oil hit a one-month high of more than $110 a barrel amid the EU’s proposal to ban exports from Russia completely, but gradually. Will heightened geopolitical tensions push the price of oil back to its March high of $130?
  • With the Nasdaq down 22% year-to-date, are the broader markets bottoming out in the near term? Could the upcoming US inflation data offer opportunities for a rebound?
  • The US dollar index hit a new pandemic high, leading to an intense devaluation of the Japanese yen since March. Will the USD/JPY rally blow since the Fed pushed back a 75 basis point hike?
  • In a context of divergent monetary policy, can China ignore pessimism?

See the latest market movements

Key economic data and events

US CPI and PPI data

Despite a sign of softening tone from Fed Chari Jerome Powell at last week’s FOMC meeting, markets seem unconvinced that a ‘soft landing’ could be on the cards unless inflation cools . The consumer price index (CPI) for the United States in March was 8.5%, and the core CPI excluding food and energy was 6.5%. CPI and PPI (Producer Price Index) data are expected to fall in April. The annual headline CPI may have been softened, with a forecast of 8.1%, and the core CPI is expected at 6%, according to Thomson Reuters. While the PPI is expected at 8.9% vs. 9.2% in March.

China’s international trade balance and new loans

China’s imports and exports are expected to fall sharply in April, due to Covid lockdowns. The consensus calls for a 3% drop in Chinese imports year-on-year. The total surplus is expected to come in at US$339 billion, up slightly from March data of US$301 billion.

China’s new loans could be increased in April as part of Beijing’s stimulus measures, which is a key indicator of its economy. In March, new loans from Chinese banks totaled 3.13 trillion yuan, compared to 1.23 trillion yuan in February. The rise in new lending is a key indicator that China’s economy could be taking a political tailwind, coupled with signs of easing lockdowns.

Japan current account in March

Japan’s current account is expected to grow for the third month, driven mainly by investment income, such as interest, dividends and profits. JOB’s policy of tight yield curve control aims not only to support economic activities, but also the huge holding of leveraged assets overseas. Therefore, the JOB could express concerns if the devaluation of the yen causes an outflow of capital.

Inflation expectation in New Zealand

Headline inflation in New Zealand hit a 31-year high of 6.9% in the first quarter. Domestic inflation may continue to rise due to the devaluation of the NZD and higher energy prices in the second quarter. The Reserve Bank of New Zealand is giving a clear indication to hold rate hikes at 50 basis points at every meeting for the rest of the year, which could provide a bullish factory for the local currency.

Europe week ahead

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Exploring Local Carbon Policy – CleanTechnica http://louthonline.com/exploring-local-carbon-policy-cleantechnica/ Fri, 06 May 2022 14:20:54 +0000 http://louthonline.com/exploring-local-carbon-policy-cleantechnica/

Although the distribution of carbon reduction pledges in the Paris Agreement roughly corresponds to the local social cost of carbon (LSCC), the scale of these pledges is largely insufficient to achieve the goals of the Agreement.

Not all regions of the world experience – and will experience – the effects of CO2 emissions in the same way. Some will suffer greatly from the resulting climate change, while others may even benefit. These heterogeneous effects mean that different countries will have different incentives to comply with the 2015 Paris Agreement, a climate change treaty intended to limit global warming to below 2°C above pre-industrial levels.

These different incentives also complicate a classic economic tool for influencing behavior: taxes or prices. Do you want to reduce smoking? Increase taxes on cigarettes. Do you want to encourage the purchase of a house? Offer tax relief. People respond to incentives, and price is a key incentive. In this case, if you want to reduce carbon emissions to a desired level, tax their production accordingly. However, given the heterogeneous effects of CO2 emissions, what are the incentives to impose carbon taxes in different places around the world? How do these incentives relate to the actual promises of the Paris Agreement? What are the implications of these promises for global temperatures and the economies of different regions of the world?

Notes: This figure shows the evolution of carbon emissions and global temperature under the business as usual scenario and under the coordinated implementation of the Paris Agreement. It also presents the evolution of the most extreme scenario of the Intercontinental Panel on Climate Change (IPCC), RCP 8.5. The figure shows that even when the whole world commits to the Paris Agreement, the commitments have only a tiny effect on reducing carbon emissions and limiting warming. In the business as usual scenario, a global temperature increase of 2°C above pre-industrial levels is reached in 2043. The Paris Agreement only delays the date on which we will cross this threshold by three years. That is, while the agreement may be politically consequential in building towards future agreements, the pledges involved fall far short of achieving its stated goal.

This new research examines these questions using a spatial integrated assessment model that the authors developed in recent work1 determine a local social cost of carbon (LSCC). This allows the authors to address the challenge of linking heterogeneous climate effects to appropriate local action. Very briefly, the authors note the following:

  • Most people would object to a policy that simply imposes carbon taxes such that the price of carbon everywhere equals the social cost of carbon. In other words, just as there is no single carbon cost that applies to every region of the world, neither is there a single tax that will please everyone.
  • Setting carbon taxes to meet Paris Agreement targets would mean rates that most, if not all, countries would consider sky-high and unsustainable, exceeding $200 per tonne of CO2 in some scenarios. The authors consider such a policy so unrealistic that they question the feasibility of the 2°C target itself.
  • The carbon taxes needed to achieve the Agreement’s objectives would involve very large intertemporal transfers or different effects from one generation to the next. Asking people to pay a high price today so that someone can reap the benefits cheaply in 100 years, in other words, is not an easy political sell. When future generations are valued almost as much as the current generation (including the effect on growth), the resulting welfare gains are small, but negative for most developed countries. They become positive when the elasticity of substitution between clean energy sources and fossil fuels is greater, or when this substitution is easier.

Conclusion: Increasing the elasticity of substitution between energy sources is essential to make the carbon policy required in heterogeneous regions more acceptable.

Originally posted by Energy Policy Institute at the University of Chicago

Download the Research Update

Download the working document


Working document: Local carbon policy

We study the local carbon policy to deal with the consequences of climate change. The standard analysis suggests that the social cost of carbon determines the optimal carbon policy. We start by using the integrated spatial assessment model of Cruz and Rossi-Hansberg (2021) to measure the local social monetary cost of CO2 emissions: the local social cost of carbon (LSCC). Although the greatest welfare costs of global warming are concentrated in the hottest regions of the developing world, adjusting for the local marginal utility of income implies that LSCC peaks in hot, low-income regions. high as the southern parts of the United States and Europe, as well as Australia. We then proceed to study the effect of actual carbon reduction commitments in the Paris Agreement and the progress they can make in implementing the expressed goal of keeping the temperature rising. world below 2°C. We find that although the distribution of commitments is roughly in line with the LSCC, their magnitude is largely insufficient to achieve its objectives. The carbon taxes needed to keep temperatures below 2°C in the current century are orders of magnitude higher and involve large implicit intertemporal transfers. Increasing the elasticity of substitution between energy sources is important for reducing the carbon taxes needed to meet warming goals.

Download the working document

Download the research file

Originally posted by Energy Policy Institute at the University of Chicago.


 


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