FIVN
Five9, INC
NASDAQ
8-K: Five9 Exceeds $1 Billion Annual Revenue Run Rate, Announces Acqueon Acquisition
Sentiment:
Quarterly Report
8 August 2024 4:08 PM
Five9 reported strong second quarter results, surpassing a $1 billion annual revenue run rate and announcing the acquisition of Acqueon to enhance its AI-powered CX platform.
Worse than expected
The company reduced its full-year revenue guidance by 3.8%, indicating a worse outlook than previously expected.
Summary
- Five9 announced its financial results for the second quarter of 2024, achieving a record revenue of $252.1 million, a 13% increase compared to $222.9 million in the same quarter of 2023.
- The company's annual revenue run rate has exceeded $1 billion, driven by a 21% year-over-year growth in LTM enterprise subscription revenue.
- GAAP net loss for the quarter was $(12.8) million, or $(0.17) per basic share, an improvement from $(21.7) million, or $(0.30) per basic share, in the second quarter of 2023.
- Non-GAAP net income was $38.9 million, or $0.52 per diluted share, compared to $37.4 million, or $0.52 per diluted share, in the prior year's quarter.
- Adjusted EBITDA for the quarter was $41.8 million, or 16.6% of revenue, compared to $41.5 million, or 18.6% of revenue, in the second quarter of 2023.
- The company reported LTM operating cash flow of $126 million.
- Five9 has reduced its full-year revenue guidance by 3.8% due to recent bookings trends and uncertain economic conditions.
- The company announced an agreement to acquire Acqueon to advance its AI-powered CX platform.
- Five9 expects full-year 2024 revenue to be in the range of $1.013 to $1.017 billion.
- For the third quarter of 2024, Five9 expects revenue in the range of $254.5 to $255.5 million.
Sentiment
Score: 6
Explanation: The sentiment is moderately positive due to the achievement of the $1 billion revenue run rate and the strategic acquisition, but the reduced revenue guidance and GAAP losses temper the overall outlook.
Positives
- Five9 achieved a significant milestone by surpassing a $1 billion annual revenue run rate.
- The company experienced a 13% year-over-year increase in revenue for the second quarter of 2024.
- LTM enterprise subscription revenue showed strong growth of 21%.
- The acquisition of Acqueon is expected to enhance Five9's AI-powered CX platform.
- The company's non-GAAP net income was $38.9 million, demonstrating profitability on a non-GAAP basis.
- The company has a strong LTM operating cash flow of $126 million.
Negatives
- Five9 reported a GAAP net loss of $(12.8) million for the second quarter of 2024.
- The company has reduced its full-year revenue guidance by 3.8%.
- GAAP gross margin decreased slightly from 53.2% to 53.0% year-over-year.
- Adjusted gross margin decreased from 61.8% to 60.5% year-over-year.
- GAAP operating cash flow decreased from $21.9 million to $19.9 million year-over-year.
Risks
- Adverse economic conditions, including inflation and increased interest rates, may harm the business.
- Failure to attract new clients or sell additional services to existing clients could negatively impact revenue.
- Existing clients terminating or reducing subscriptions could harm revenues and gross margins.
- The company's quarterly and annual results may fluctuate significantly.
- Failure to manage technical operations infrastructure could lead to service outages.
- The contact center software market is subject to rapid technological change.
- Security breaches and cyber attacks could harm the company's reputation and financial results.
- The proposed acquisition of Acqueon may not close.
- The company may not be able to secure additional financing on favorable terms.
- The company has a history of losses and may be unable to achieve or sustain profitability.
Future Outlook
Five9 has reduced its full-year revenue guidance by 3.8% but remains confident in its market opportunity and is committed to driving balanced growth and profitability. The company expects full-year 2024 revenue to be between $1.013 and $1.017 billion and Q3 revenue to be between $254.5 and $255.5 million.
Management Comments
- Mike Burkland, Chairman and CEO, stated that the company achieved a key milestone with annual revenue run rate exceeding $1 billion, driven by LTM enterprise subscription revenue growth.
- He also mentioned that the acquisition of Acqueon will be a significant step in advancing their AI-powered CX platform.
- He highlighted the company's leadership in AI with innovations to the Five9 Genius AI suite.
Industry Context
The announcement reflects the ongoing trend of cloud-based contact center solutions and the increasing importance of AI in customer experience. The acquisition of Acqueon is a strategic move to strengthen Five9's position in the competitive market.
Comparison to Industry Standards
- Five9's revenue growth of 13% year-over-year is solid, but it is important to compare this to competitors like Twilio, NICE, and Genesys, which also operate in the cloud contact center space.
- The adjusted EBITDA margin of 16.6% is a key metric to compare against industry benchmarks, as profitability is a focus for investors in this sector.
- The acquisition of Acqueon is similar to moves by other companies to consolidate and enhance their AI capabilities, such as Twilio's acquisition of Segment.
- The reduction in revenue guidance by 3.8% is a concern and should be compared to the guidance of other companies in the sector to understand the broader market trends.
Stakeholder Impact
- Shareholders may react positively to the revenue milestone and acquisition but negatively to the reduced revenue guidance.
- Employees may be impacted by the integration of Acqueon and the company's focus on AI.
- Customers may benefit from the enhanced AI capabilities of the platform.
- Suppliers and creditors may be impacted by the company's financial performance and strategic decisions.
Next Steps
- Five9 will discuss its second quarter 2024 results on a conference call on August 8, 2024.
- The company will work towards closing the acquisition of Acqueon.
- Five9 will continue to develop and innovate its AI solutions.
Key Dates
- August 8, 2024: Date of the earnings announcement and press release.
- June 30, 2024: End of the second fiscal quarter for which results are reported.
Keywords
Five9, CX Platform, Contact Center, AI, Artificial Intelligence, Cloud, SaaS, Revenue, EBITDA, Acquisition, Subscription, 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.