FIVN
Five9, INC
NASDAQ
8-K: Five9 Announces Strong Q3 2024 Results with Accelerated Revenue Growth and Raised Guidance
Sentiment:
Quarterly Report
7 November 2024 4:09 PM
Five9 reported a 15% increase in revenue to $264 million for Q3 2024, driven by 20% growth in subscription revenue, and raised its full-year guidance.
Better than expected
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.
Summary
- Five9's revenue for the third quarter of 2024 reached a record $264.2 million, a 15% increase compared to $230.1 million in the same quarter of 2023.
- Subscription revenue grew by 20% year-over-year.
- The company achieved a GAAP gross margin of 53.8% and an adjusted gross margin of 61.8%.
- GAAP net loss for the quarter was $(4.5) million, or $(0.06) per basic share, a significant improvement from the $(20.4) million loss in Q3 2023.
- Non-GAAP net income was $50.5 million, or $0.67 per diluted share, compared to $38.0 million, or $0.52 per diluted share, in the prior year.
- Adjusted EBITDA was $52.4 million, representing 19.8% of revenue, up from $41.3 million and 17.9% in Q3 2023.
- Operating cash flow for the quarter was $41.1 million, compared to $37.0 million in the same period last year.
- Five9 has raised its full-year 2024 revenue guidance to a range of $1.030 to $1.031 billion.
- The company expects a GAAP net loss per share in the range of $(0.30) to $(0.23) for the full year 2024.
- Non-GAAP net income per share is projected to be between $2.36 and $2.38 for the full year.
- For the fourth quarter of 2024, Five9 anticipates revenue between $267.0 and $268.0 million.
- The company expects GAAP net income per share in the range of $0.03 to $0.08 for Q4 2024.
- Non-GAAP net income per share for Q4 is expected to be between $0.69 and $0.71.
Sentiment
Score: 8
Explanation: The document conveys a positive sentiment due to strong financial results, exceeding guidance, and raised outlook. The focus on AI and future growth opportunities further enhances the positive tone. However, the presence of a GAAP net loss and various risk factors temper the sentiment slightly.
Positives
- Five9 exceeded its guidance across all key metrics for the third quarter of 2024.
- The company experienced accelerated revenue growth of 15% year-over-year.
- Subscription revenue growth was particularly strong at 20% year-over-year.
- The company achieved a record $41 million in operating cash flow.
- Five9's adjusted EBITDA margin reached 20%.
- The company has raised its full-year 2024 revenue and bottom-line guidance.
- The company's AI-powered platform is seen as a key driver for future growth.
Negatives
- Five9 reported a GAAP net loss of $(4.5) million for the third quarter of 2024, although this is a significant improvement from the previous year.
- The company still has a GAAP net loss per share for the full year 2024 guidance.
Risks
- Adverse economic conditions, including inflation and increased interest rates, could harm the business.
- The company's ability to attract new clients and sell additional services is crucial for revenue growth.
- Existing clients terminating or reducing subscriptions could negatively impact revenue.
- Failure to manage technical operations infrastructure could lead to service outages.
- The development of AI solutions may not be successful.
- The company faces competition in the contact center software market.
- Security breaches and cyber attacks could harm the company's reputation and financial results.
- The company's stock price may be volatile.
- The company may not be able to secure additional financing on favorable terms.
Future Outlook
Five9 has raised its full-year 2024 revenue guidance to a range of $1.030 to $1.031 billion and expects non-GAAP net income per share to be between $2.36 and $2.38. For Q4 2024, they anticipate revenue between $267.0 and $268.0 million and non-GAAP net income per share between $0.69 and $0.71.
Management Comments
- Mike Burkland, Chairman and CEO, stated that the company is very pleased to report strong third quarter results, which exceeded guidance across all key metrics.
- He highlighted the 20% year-over-year growth in subscription revenue and the 20% adjusted EBITDA margin.
- He also noted the acceleration of AI and believes Five9's AI-powered platform is at the forefront of enabling a hyper-personalized experience.
Industry Context
The announcement highlights Five9's position in the competitive cloud contact center market, where AI is becoming increasingly important. The company's focus on AI-powered solutions aligns with industry trends towards personalized customer experiences and automation.
Comparison to Industry Standards
- Five9's 15% revenue growth is strong compared to some of its competitors in the cloud contact center space, such as NICE and Genesys, although direct comparisons are difficult without specific competitor results for the same period.
- The 20% growth in subscription revenue is a positive indicator of the company's recurring revenue model and is a key metric for SaaS companies.
- The adjusted EBITDA margin of 19.8% is a good result, indicating strong profitability, and is comparable to other established SaaS companies.
- The company's focus on AI is in line with the industry's move towards more intelligent and automated customer service solutions, similar to investments being made by companies like Twilio and Salesforce in their respective platforms.
Stakeholder Impact
- Shareholders will likely react positively to the strong financial results and raised guidance.
- Employees may be motivated by the company's positive performance and growth prospects.
- Customers may benefit from the company's continued investment in AI and customer experience solutions.
- Suppliers and partners may see increased business opportunities due to the company's growth.
Next Steps
- Five9 will discuss its third quarter 2024 results on a conference call on November 7, 2024.
- The company will continue to focus on developing and expanding its AI-powered platform.
- Five9 will work towards achieving its raised full-year 2024 guidance.
Key Dates
- September 30, 2024: End of the third fiscal quarter for which financial results are reported.
- November 7, 2024: Date of the earnings announcement and conference call.
Keywords
Five9, CX Platform, Contact Center, AI, Cloud, SaaS, Revenue Growth, EBITDA, Subscription Revenue, 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.