FIVN
Five9, INC
NASDAQ
8-K: Five9 Announces Record Full Year 2023 Revenue of $910 Million, Driven by 25% Enterprise Subscription Growth
Sentiment:
Quarterly Report
21 February 2024 4:08 PM
Five9 reported a 17% increase in full-year 2023 revenue, reaching a record $910 million, with enterprise subscription revenue growing by 25%.
Better than expected
The company's full-year revenue of $910 million exceeded expectations.
The 25% growth in enterprise subscription revenue was a positive surprise.
The GAAP net loss improved year-over-year, indicating better than expected cost management.
The company's cash flow from operations increased significantly year-over-year, exceeding expectations.
Summary
- Five9 announced its financial results for the fourth quarter and full year ended December 31, 2023.
- The company's full-year revenue reached a record $910.5 million, a 17% increase compared to 2022.
- Enterprise subscription revenue grew by 25% in 2023, driving overall growth.
- Fourth-quarter revenue increased by 15% year-over-year to $239.1 million.
- GAAP net loss for the full year was $(81.8) million, an improvement from $(94.7) million in 2022.
- Non-GAAP net income for the full year was $149.9 million, compared to $106.7 million in 2022.
- GAAP operating cash flow for the full year was $128.8 million, up from $88.9 million in 2022.
- The company provided revenue guidance for 2024, expecting between $1.053 and $1.057 billion.
Sentiment
Score: 8
Explanation: The document conveys a positive sentiment due to strong revenue growth, particularly in the enterprise segment, and improved profitability metrics. The company's focus on AI and future growth prospects also contribute to the positive outlook. However, the presence of a GAAP net loss and the risks associated with macroeconomic conditions temper the overall sentiment.
Positives
- Five9 experienced strong revenue growth, driven by its Enterprise business.
- The company's adjusted EBITDA margin reached 20% in the fourth quarter.
- Five9 is seeing strong momentum up-market, with record Enterprise bookings and a growing pipeline.
- The company is strengthening its AI leadership in CX.
- GAAP net loss improved year-over-year, both for the quarter and the full year.
- The company's cash flow from operations increased significantly year-over-year.
Negatives
- GAAP gross margin decreased slightly for both the fourth quarter and the full year.
- Adjusted gross margin also saw a slight decrease for both the fourth quarter and the full year.
- The company reported a GAAP net loss for both the fourth quarter and the full year, although the loss decreased year-over-year.
Risks
- The company's forward-looking statements are subject to various risks and uncertainties, including macroeconomic conditions.
- Adverse economic conditions, such as inflation and increased interest rates, could harm the business.
- Failure to attract new clients or sell additional services to existing clients could impact revenue growth.
- The company faces competition in the contact center software solutions market.
- Security breaches and cyber attacks could harm the company's reputation and financial results.
- The company may not be able to secure additional financing on favorable terms.
Future Outlook
Five9 expects full-year 2024 revenue to be in the range of $1.053 to $1.057 billion, with a GAAP net loss per share between $(0.61) and $(0.53) and non-GAAP net income per share between $2.14 and $2.18. For the first quarter of 2024, they expect revenue between $239.0 and $240.0 million.
Management Comments
- Mike Burkland, Chairman and CEO, stated that the company is pleased to report strong revenue growth of 17% for full year 2023.
- He highlighted the 25% growth in enterprise subscription revenue.
- He mentioned the company's continued strengthening of its AI leadership in CX.
- He noted strong momentum up-market, evidenced by record Enterprise bookings and a growing pipeline.
- He believes the market remains massive and underpenetrated, and Five9 is well-positioned to capitalize on this opportunity.
Industry Context
The announcement reflects the ongoing growth in the cloud contact center market, with Five9 leveraging its platform and AI capabilities to capture market share. The focus on enterprise subscription revenue aligns with industry trends towards recurring revenue models. The company's international expansion plans also reflect a broader industry trend of globalizing operations.
Comparison to Industry Standards
- Five9's 17% revenue growth for 2023 is strong, but it is important to compare this to other cloud contact center providers such as Twilio, NICE, and Genesys.
- Twilio, for example, has reported varying growth rates in recent quarters, and a comparison of their enterprise subscription growth would be relevant.
- NICE and Genesys, as more established players, may have different growth trajectories, and a comparison of their profitability and cash flow metrics would be useful.
- Five9's adjusted EBITDA margin of 18.3% for 2023 should be benchmarked against the industry average to assess its operational efficiency.
- The company's focus on AI and automation is consistent with industry trends, but the specific impact of these initiatives on revenue and customer acquisition should be monitored.
Stakeholder Impact
- Shareholders will likely react positively to the strong revenue growth and improved profitability.
- Employees may be encouraged by the company's positive performance and future growth prospects.
- Customers may benefit from the company's continued investment in its platform and AI capabilities.
- Suppliers and partners may see increased opportunities due to the company's growth.
Next Steps
- Five9 will host a conference call on February 21, 2024, to discuss the results.
- The company will continue to focus on strengthening its platform, marching up-market, and expanding internationally.
- The company will continue to develop and enhance its AI solutions.
- The company will hold its 2024 Annual Meeting of Stockholders on May 14, 2024.
Key Dates
- February 21, 2024: Date of the earnings announcement and press release.
- March 18, 2024: Record date for stockholders eligible to vote at the Annual Meeting.
- May 14, 2024: Date of the 2024 Annual Meeting of Stockholders.
Keywords
Five9, CX Platform, Cloud Contact Center, Revenue Growth, Enterprise Subscription, AI, EBITDA, GAAP, Non-GAAP, Financial Results
FIVN
Five9, INC
NASDAQ
Sector: TBD
Filings with Classifications
Better than expected
1 May 2025 8:07 PM
Earnings Release
- The company's Q1 revenue exceeded expectations, reaching a record $279.7 million.
- GAAP net income improved significantly compared to the previous year's net loss.
- Operating cash flow reached a record $48.4 million, surpassing previous performance.
Better than expected
1 May 2025 4:11 PM
Quarterly Report
- The company's net income improved to $0.6 million, compared to a net loss of $7.1 million for the same quarter of the previous year.
- Adjusted EBITDA increased to $52.7 million, up from $37.6 million in Q1 2024.
Worse than expected
20 February 2025 8:04 PM
Annual Results
- The Annual Dollar-Based Retention Rate decreased year-over-year primarily due to continued macroeconomic headwinds on the installed base.
Better than expected
20 February 2025 4:08 PM
Earnings Release
- Five9's full year revenue exceeded $1 billion, a record for the company.
- Q4 revenue growth accelerated to 17%, driven by subscription revenue growing 19%.
- Adjusted EBITDA margin reached a record 23% in Q4.
- GAAP net loss significantly improved from $(81.8) million in 2023 to $(12.8) million in 2024.
Better than expected
7 November 2024 4:15 PM
Quarterly Report
- The company's net loss improved significantly compared to the same period last year.
- The company's revenue increased by 15% year-over-year.
- The company's adjusted EBITDA increased year-over-year.
Better than expected
7 November 2024 4:09 PM
Quarterly Report
- Five9's Q3 results exceeded their own guidance across all key metrics, indicating better than expected performance.
- The company's revenue growth, subscription growth, and adjusted EBITDA all surpassed expectations.
- The raised full-year guidance also suggests that the company expects to continue performing better than previously anticipated.
Better than expected
8 August 2024 4:11 PM
Quarterly Report
- The company's net loss improved year-over-year, indicating progress towards profitability.
Worse than expected
8 August 2024 4:08 PM
Quarterly Report
- The company reduced its full-year revenue guidance by 3.8%, indicating a worse outlook than previously expected.
Capital raise
2 May 2024 4:11 PM
Quarterly Report
- The company issued $747.5 million in convertible senior notes due 2029.
- The company is in discussions regarding a potential revolving credit facility of up to $200 million.
Worse than expected
2 May 2024 4:11 PM
Quarterly Report
- The annual dollar-based retention rate decreased from 114% to 109%, indicating a potential weakening in customer loyalty or spending.
Better than expected
2 May 2024 4:08 PM
Quarterly Report
- The company's GAAP net loss improved significantly year-over-year, indicating better than expected profitability.
- Non-GAAP net income and earnings per share both increased year-over-year, exceeding expectations.
- The company secured its largest deal ever, demonstrating strong market traction.
Capital raise
1 March 2024 5:01 PM
Debt Issuance
- The document details a capital raise of $747.5 million through the issuance of convertible senior notes.
- The company granted initial purchasers an option to buy an additional $97.5 million in notes, which was fully exercised.
Capital raise
28 February 2024 6:07 AM
Debt Offering Announcement
- Five9 is raising $650 million through a private placement of convertible senior notes.
- The offering was upsized from an initial $600 million due to strong demand.
- The company has granted the initial purchasers an option to purchase an additional $97.5 million in notes.
Capital raise
27 February 2024 6:04 AM
Capital Raise Announcement
- Five9 is proposing a $600 million convertible senior notes offering.
- The company is also in discussions for a potential revolving credit facility of up to $200 million.
Worse than expected
21 February 2024 9:55 PM
Annual Results
- The company's net loss increased from $53.0 million in 2021 to $81.8 million in 2023.
- The company's Annual Dollar-Based Retention Rate decreased from 115% in 2022 to 110% in 2023.
Capital raise
21 February 2024 9:55 PM
Annual Results
- The company may not be able to secure additional financing on favorable terms, or at all, to meet its future capital needs.
- The company may require additional capital to respond to business opportunities, challenges, acquisitions, a decline in sales, increased regulatory obligations or unforeseen circumstances and may engage in equity or debt financings or enter into credit facilities.
Better than expected
21 February 2024 4:08 PM
Quarterly Report
- The company's full-year revenue of $910 million exceeded expectations.
- The 25% growth in enterprise subscription revenue was a positive surprise.
- The GAAP net loss improved year-over-year, indicating better than expected cost management.
- The company's cash flow from operations increased significantly year-over-year, exceeding expectations.
Disclaimer: This summary was generated by artificial intelligence and its accuracy is not guaranteed. The information provided here is for general informational purposes only and does not constitute financial advice, recommendation, or endorsement of any kind. It may contain errors or omissions. You should not rely on this information to make financial decisions. Always seek the advice of a qualified financial professional before making any investment or financial decisions. Use of this information is at your own risk.