FIVN
Five9, INC
NASDAQ
10-Q: Five9 Reports Q1 2024 Results, Revenue Up 13% Year-Over-Year
Sentiment:
Quarterly Report
2 May 2024 4:11 PM
Five9's first quarter 2024 results show a 13% increase in revenue compared to the same period last year, driven by growth in larger clients.
Worse than expected
The annual dollar-based retention rate decreased from 114% to 109%, indicating a potential weakening in customer loyalty or spending.
Capital raise
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.
Summary
- Five9's revenue for the first quarter of 2024 reached $247.01 million, a 13% increase from $218.44 million in the first quarter of 2023.
- The company experienced a net loss of $7.08 million for the quarter, an improvement from a net loss of $27.25 million in the same period last year.
- The increase in revenue was primarily driven by larger clients and enhanced sales and marketing efforts.
- The company's annual dollar-based retention rate was 109%, down from 114% in the previous year, due to macroeconomic headwinds.
- Adjusted EBITDA for the quarter was $37.59 million, compared to $35.14 million in the same quarter of the previous year.
- The company issued $747.5 million in convertible senior notes due 2029 and repurchased $313.1 million of its 2025 convertible senior notes.
Sentiment
Score: 6
Explanation: The document shows positive revenue growth and improved profitability, but the decrease in the retention rate and the ongoing net loss temper the overall sentiment. The company is managing its debt effectively but faces macroeconomic headwinds.
Positives
- Revenue increased by 13% year-over-year, indicating strong growth.
- The net loss significantly decreased, showing improved profitability.
- Adjusted EBITDA increased, reflecting better operational performance.
- The company successfully issued new convertible senior notes and repurchased a portion of existing notes, managing its debt effectively.
Negatives
- The annual dollar-based retention rate decreased from 114% to 109%, indicating some client churn or reduced spending.
- The company still reported a net loss, although significantly reduced from the previous year.
Risks
- The company is exposed to macroeconomic risks, including inflation, increased interest rates, and supply chain disruptions.
- The company's future performance depends on its ability to attract new clients and expand its existing client base.
- The company's stock price has been volatile and may continue to be volatile.
- The company may not be able to secure additional financing on favorable terms, or at all, to meet its future capital needs.
- The company faces risks related to security breaches and cyber attacks.
- The company's growth depends on the success of its strategic relationships with third parties.
Future Outlook
The company expects that adverse economic conditions will continue to have an adverse impact on revenue in future periods. They plan to continue to finance operations through sales, equity and debt financings, and lease facilities. They are also in discussions regarding a potential revolving credit facility of up to $200 million.
Management Comments
- Management believes that the company's existing cash and cash equivalents will be sufficient to meet working capital and capital expenditure needs for at least the next 12 months.
- Management is focused on expanding the base of larger clients, growing revenue from existing clients, innovating, and expanding internationally.
Industry Context
The cloud contact center market is competitive and subject to rapid technological change. Five9 is focused on expanding its AI solutions and strategic relationships to maintain its position. The company's performance is being impacted by broader macroeconomic trends, which are affecting many companies in the technology sector.
Comparison to Industry Standards
- Five9's revenue growth of 13% is a solid performance in the cloud contact center space, but the decrease in the annual dollar-based retention rate to 109% suggests some challenges in retaining and growing existing client revenue.
- Compared to competitors like NICE and Genesys, Five9's focus on larger clients and AI integration is a key differentiator.
- The company's adjusted EBITDA growth is positive, but the net loss indicates that there is still room for improvement in profitability.
- The issuance of new convertible notes and repurchase of existing notes is a common strategy in the tech industry to manage debt and capital structure.
Stakeholder Impact
- Shareholders may be concerned about the decrease in the annual dollar-based retention rate, but encouraged by the revenue growth and improved profitability.
- Employees may be affected by the company's efforts to manage costs and improve efficiency.
- Customers may benefit from the company's continued investment in its platform and AI solutions.
- Creditors may be impacted by the company's debt management activities.
Next Steps
- The company plans to continue to finance operations through sales, equity and debt financings, and lease facilities.
- The company expects to enter into a revolving credit facility in the second half of 2024.
- The company will continue to monitor the impact of macroeconomic conditions on its business.
Key Dates
- 2020-05-01: Initial issuance of 2025 convertible senior notes.
- 2020-06-03: Further issuance of 2025 convertible senior notes.
- 2023-08-14: Acquisition of Aceyus, Inc.
- 2024-03-01: Issuance of 2029 convertible senior notes and repurchase of a portion of 2025 convertible senior notes.
- 2024-03-31: End of the first quarter of 2024.
- 2024-04-26: Date of share count disclosure.
Keywords
cloud contact center, SaaS, revenue growth, convertible notes, EBITDA, customer retention, telecommunications, AI, software, marketable investments
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.
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.
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.
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.
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