Slide 1: Q3 2024 Investor Presentation
Q3 2024 Investor Presentation Five9 (NASDAQ: FIVN) © 2024 Five9, Inc. All rights reserved. Proprietary and confidential to Five9, Inc.
Slide 2: Safe Harbor
Safe Harbor This presentation is proprietary and is intended solely for the information of the persons to whom it is presented. Disclosure of this presentation, its contents, extracts or abstracts to third parties is not authorized without the express written permission of Five9, Inc. (the “Company”
Slide 3: Q3'24 Highlights
Q3’24 Highlights Strong Financial Results ◦ Total revenue growth accelerated to 15% YoY ◦ Subscription revenue growth accelerated to 20% YoY ◦ Q3’24 adjusted EBITDA margin of 20% ◦ Record quarterly operating cash flow of $41M, or 16% of revenue ◦ Enterprise new logo turn-ups reached a Q3 record ◦ $1
Slide 4: Q3'24 Highlights (cont'd)
Q3’24 Highlights (cont’d) AI Highlights ◦ AI products made up over 20% of Enterprise new logo ACV bookings in Q3 ◦ Average ARR of new logo deals that included AI were over 5x larger than deals without AI over the last four quarters ◦ AI attached to 100% of $1M+ ARR new logo deals over the last four
Slide 5: Illustrative TAM Expansion of 30% Driven by AI
Illustrative TAM Expansion of 30% Driven by AI 15% Automation Scenario Annual Customer Costs ARR Labor Savings ($M) Software Increase ($M) $52.4 $2.4 $3.1 $45.6 $3.1 +30% (15%) Labor $2.4 $50.0 Labor $42.5 Before AI After AI Before AI After AI 1,000 Seats 850 Seats 1,000 Seats 850 Seats Note: 15% au
Slide 6: Consistent Revenue Growth
Consistent Revenue Growth Quarterly Revenue ($M) Annual Revenue ($M) 15% YoY Growth 17% YoY Growth 264 910 247 252 239 230 779 218 223 208 198 183 189 174 610 154 138 144 128 112 435 95 100 328 258 2018 2019 2020 2021 2022 2023 6 © 2024 Five9, Inc. All rights reserved. Proprietary and confidential t
Slide 7: Executing on Enterprise Opportunity
Executing on Enterprise Opportunity % YoY Enterprise Subscription Revenue Growth (LTM) 51% 51% 50% 45% 46% 39% 41% 37% 35% 33% 33% 32% 31% 28% 28% 25% 23% 21% 20% Q1'20 Q2'20 Q3'20 Q4'20 Q1'21 Q2'21 Q3'21 Q4'21 Q1'22 Q2'22 Q3'22 Q4'22 Q1'23 Q2'23 Q3'23 Q4'23 Q1'24 Q2'24 Q3'24 Note: LTM Enterprise su
Slide 8: Executing on Enterprise Opportunity (cont'd)
Executing on Enterprise Opportunity (cont’d) Enterprise as a % of Total Revenue (LTM) Enterprise Customers $1M+ ARR (Q4’23 Ann.) 183 88% 60% 3 Q2'14 (IPO) Q3'24 Q2'14 (IPO) Q4'23 Note: Historical results prior to 2018 based on ASC 605; $1M+ ARR based on Q4’23 annualized 8 © 2024 Five9, Inc. All righ
Slide 9: High Customer Retention
High Customer Retention % Annual Dollar Based Retention Rate (DBRR) 121% 123% 123% 122% 117% 120% 118% 118% 114% 115% 114% 111% 111% 112% 110% 110% 109% 108% 108% Q1'20 Q2'20 Q3'20 Q4'20 Q1'21 Q2'21 Q3'21 Q4'21 Q1'22 Q2'22 Q3'22 Q4'22 Q1'23 Q2'23 Q3'23 Q4'23 Q1'24 Q2'24 Q3'24 Note: Annual DBRR based
Slide 10: Continuing to Drive Balanced Growth
Continuing to Drive Balanced Growth % YoY Revenue Growth % EBITDA Margin 61% 61% 61% 57% 55% 55% 53% 50% 16% 17% 49% 49% 47% 47% 23% 44% 45% 46% 46% 42% 42% 18% 21% 42% 21% 38% 38% 23% 18% 34% 34% 20% 21% 18% 13% 19% 36% 36% 34% 35% 35% 16% 18% 31% 33% 16% 19% 15% 6% 7% 29% 29% 29% 12% 13% 22% 28% 3
Slide 11: Robust Margin Expansion and Operating Leverage
Robust Margin Expansion and Operating Leverage Non-GAAP Adj. Gross Margin Non-GAAP Opex (% of revenue) Adj. EBITDA Margin 10.3% point expansion 37.3% point improvement 47.6% point expansion 61.8% 79.3% 51.5% G&A 21.4% 42.0% 19.8% S&M 37.5% 6.9% 23.3% R&D 20.4% (27.8%) 11.8% Q2'14 (IPO) Q3'24 Q2'14 (
Slide 12: Operating Cash Flow and Margin
Operating Cash Flow and Margin LTM Operating Cash Flow ($M) DSO of 33 days in Q3'24 LTM Operating Cash Flow % LTM Operating Cash Flow Margin 16.6% 15.9% 14.2% 160 .0 13.0% 10.8% 8.6% 7.0% 129.9 140 .0 5.9% 10. 0% 125.0 120 .0 0.0 % 100 .0 (10.0%) 80.0 63.6 64.3 51.1 60.0 (20.0%) 39.7 40.0 26.1 (30.0
Slide 13: Balance Sheet Summary
Balance Sheet Summary Quarter Ended $ in Millions September 30, 2024 December 31, 2023 Cash, cash equivalents and marketable investments $ 966.7 $ 730.3 Working capital 554.0 756.8 Total assets 2,007.9 1,494.6 Total debt¹ 1,163.9 742.1 Total stockholders’ equity 565.6 538.1 ¹ Total principal amount
Slide 14: Q4'24 and 2024 Guidance
Q4’24 and 2024 Guidance Q4’24 2024 Revenue $267.0M – $268.0M $1.030B – $1.031B GAAP Net Loss Per Basic Share n/a ($0.30) – ($0.23) GAAP Net Income Per Diluted Share $0.03 – $0.08 n/a Non-GAAP Net Income Per Diluted Share $0.69 – $0.71 $2.36 – $2.38 Basic Shares n/a 74.5M Diluted Shares – GAAP 88.6M
Slide 15: Appendix
Appendix 15 © 2024 Five9, Inc. All rights reserved. Proprietary and confidential to Five9, Inc.
Slide 16: GAAP to Adjusted Gross Profit Reconciliation Q2'14–Q4'17
GAAP to Adjusted Gross Profit Reconciliation Q2’14 – Q4’17 Quarter Ended Q2'14 Q3'14 Q4'14 Q1'15 Q2'15 Q3'15 Q4'15 Q1'16 Q2'16 Q3'16 Q4'16 Q1'17 Q2'17 Q3'17 Q4'17 GAAP gross profit $ 11,216 $ 12,365 $ 13,734 $ 15,496 $ 16,004 $ 17,475 $ 20,398 $ 21,405 $ 22,122 $ 23,192 $ 28,437 $ 27,043 $ 27,454 $
Slide 17: GAAP to Adjusted Gross Profit Reconciliation Q1'18–Q4'21
GAAP to Adjusted Gross Profit Reconciliation Q1’18 – Q4’21 Quarter Ended Q1'18 Q2'18 Q3'18 Q4'18 Q1'19 Q2'19 Q3'19 Q4'19 Q1'20 Q2'20 Q3'20 Q4'20 Q1'21 Q2'21 Q3'21 Q4'21 GAAP gross profit $ 34,203 $ 36,306 $ 39,125 $ 43,996 $ 43,687 $ 46,188 $ 49,297 $ 54,323 $ 55,051 $ 57,339 $ 65,582 $ 76,652 $ 78,
Slide 18: GAAP to Adjusted Gross Profit Reconciliation Q1'22–Q3'24
GAAP to Adjusted Gross Profit Reconciliation Q1’22 – Q3’24 Quarter Ended Q1'22 Q2'22 Q3'22 Q4'22 Q1'23 Q2'23 Q3'23 Q4'23 Q1'24 Q2'24 Q3'24 GAAP gross profit $ 93,910 $ 101,153 $ 104,231 $ 112,051 $ 113,683 $ 118,521 $ 119,025 $ 126,569 $ 132,480 $ 133,672 $ 142,249 % GAAP gross margin 51.4 % 53.4 %
Slide 19: GAAP to Adjusted Gross Profit Reconciliation 2014–2023
GAAP to Adjusted Gross Profit Reconciliation 2014 – 2023 Year Ended 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 GAAP gross profit $ 48,441 $ 69,373 $ 95,156 $ 117,121 $ 153,630 $ 193,495 $ 254,624 $ 338,492 $ 411,345 $ 477,798 % GAAP gross margin 47.0 % 53.8 % 58.7 % 58.5 % 59.6 % 59.0 % 58.5
Slide 20: Net Income (Loss) to Adj. EBITDA Reconciliation Q2'14–Q4'17
GAAP Net Inc. (Loss) to Adj. EBITDA Reconciliation Q2’14 – Q4’17 Quarter Ended Q2'14 Q3'14 Q4'14 Q1'15 Q2'15 Q3'15 Q4'15 Q1'16 Q2'16 Q3'16 Q4'16 Q1'17 Q2'17 Q3'17 Q4'17 GAAP net income (loss) $ (8,659) $ (11,435) $ (9,372) $ (8,903) $ (7,369) $ (6,048) $ (3,518) $ (4,911) $ (3,468) $ (3,890) $ 409 $
Slide 21: Net Income (Loss) to Adj. EBITDA Reconciliation Q1'18–Q4'21
GAAP Net Inc. (Loss) to Adj. EBITDA Reconciliation Q1’18 – Q4’21 Quarter Ended Q1'18 Q2'18 Q3'18 Q4'18 Q1'19 Q2'19 Q3'19 Q4'19 Q1'20 Q2'20 Q3'20 Q4'20 Q1'21 Q2'21 Q3'21 Q4'21 GAAP net income (loss) $ (607) $ (2,042) $ (1,305) $ 3,733 $ (1,924) $ (1,860) $ (1,604) $ 836 $ (7,437) $ (16,052) $ (11,431
Slide 22: Net Income (Loss) to Adj. EBITDA Reconciliation Q1'22–Q3'24
GAAP Net Inc. (Loss) to Adj. EBITDA Reconciliation Q1’22 – Q3’24 Quarter Ended Q1'22 Q2'22 Q3'22 Q4'22 Q1'23 Q2'23 Q3'23 Q4'23 Q1'24 Q2'24 Q3'24 GAAP net income (loss) $ (34,120) $ (23,670) $ (23,207) $ (13,653) $ (27,248) $ (21,739) $ (20,419) $ (12,358) $ (7,077) $ (12,816) $ (4,479) Non-GAAP adju
Slide 23: Net Loss to Adjusted EBITDA Reconciliation 2014–2023
GAAP Net Loss to Adjusted EBITDA Reconciliation 2014 – 2023 Year Ended 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 GAAP net income (loss) $ (37,786) $ (25,838) $ (11,860) $ (8,969) $ (221) $ (4,552) $ (42,130) $ (53,000) $ (94,650) $ (81,764) Non-GAAP adjustments: Depreciation and amortization
Slide 24: Non-GAAP COR and OpEx Reconciliation Q2'14–Q4'17
GAAP to Non-GAAP COR and OpEx Reconciliation Q2’14 – Q4’17 Quarter Ended Q2'14 Q3'14 Q4'14 Q1'15 Q2'15 Q3'15 Q4'15 Q1'16 Q2'16 Q3'16 Q4'16 Q1'17 Q2'17 Q3'17 Q4'17 GAAP COR $ 13,469 $ 13,504 $ 14,540 $ 14,778 $ 14,270 $ 14,812 $ 15,635 $ 16,610 $ 16,764 $ 17,790 $ 15,770 $ 19,971 $ 20,273 $ 20,497 $
Slide 25: Non-GAAP OpEx Reconciliation Q2'14–Q4'17
GAAP to Non-GAAP OpEx Reconciliation Q2’14 – Q4’17 Quarter Ended Q2'14 Q3'14 Q4'14 Q1'15 Q2'15 Q3'15 Q4'15 Q1'16 Q2'16 Q3'16 Q4'16 Q1'17 Q2'17 Q3'17 Q4'17 GAAP S&M $ 9,674 $ 9,296 $ 9,453 $ 9,931 $ 10,594 $ 10,797 $ 10,720 $ 12,706 $ 12,637 $ 12,925 $ 14,480 $ 15,778 $ 16,932 $ 16,502 $ 17,358 % of
Slide 26: Non-GAAP OpEx Reconciliation Q2'14–Q4'17
GAAP to Non-GAAP OpEx Reconciliation Q2’14 – Q4’17 Quarter Ended Q2'14 Q3'14 Q4'14 Q1'15 Q2'15 Q3'15 Q4'15 Q1'16 Q2'16 Q3'16 Q4'16 Q1'17 Q2'17 Q3'17 Q4'17 GAAP G&A $ 3,515 $ 7,967 $ 6,763 $ 7,275 $ 6,027 $ 6,087 $ 6,433 $ 6,536 $ 5,882 $ 6,143 $ 6,511 $ 8,860 $ 6,845 $ 4,679 $ 8,767 % of revenue 14.
Slide 27: Non-GAAP COR and OpEx Reconciliation Q1'18–Q4'21
GAAP to Non-GAAP COR and OpEx Reconciliation Q1’18 – Q4’21 Quarter Ended Q1'18 Q2'18 Q3'18 Q4'18 Q1'19 Q2'19 Q3'19 Q4'19 Q1'20 Q2'20 Q3'20 Q4'20 Q1'21 Q2'21 Q3'21 Q4'21 GAAP COR $ 24,702 $ 24,814 $ 26,179 $ 28,339 $ 30,851 $ 31,248 $ 34,472 $ 37,940 $ 40,037 $ 42,453 $ 46,561 $ 51,233 $ 59,803 $ 64,
Slide 28: Non-GAAP COR and OpEx Reconciliation Q1'22–Q3'24
GAAP to Non-GAAP COR and OpEx Reconciliation Q1’22 – Q3’24 Quarter Ended Q1'22 Q2'22 Q3'22 Q4'22 Q1'23 Q2'23 Q3'23 Q4'23 Q1'24 Q2'24 Q3'24 GAAP COR $ 88,867 $ 88,229 $ 94,111 $ 96,294 $ 104,756 $ 104,361 $ 111,080 $ 112,493 $ 114,530 $ 118,414 $ 121,933 % of revenue 48.6 % 46.6 % 47.4 % 46.2 % 48.0
Slide 29: Non-GAAP OpEx Reconciliation Q1'18–Q4'21
GAAP to Non-GAAP OpEx Reconciliation Q1’18 – Q4’21 Quarter Ended Q1'18 Q2'18 Q3'18 Q4'18 Q1'19 Q2'19 Q3'19 Q4'19 Q1'20 Q2'20 Q3'20 Q4'20 Q1'21 Q2'21 Q3'21 Q4'21 GAAP S&M $ 17,478 $ 17,912 $ 17,818 $ 18,793 $ 21,701 $ 23,250 $ 25,014 $ 25,627 $ 30,160 $ 32,231 $ 32,969 $ 37,053 $ 44,799 $ 46,024 $ 49
Slide 30: Non-GAAP OpEx Reconciliation Q1'22–Q3'24
GAAP to Non-GAAP OpEx Reconciliation Q1’22 – Q3’24 Quarter Ended Q1'22 Q2'22 Q3'22 Q4'22 Q1'23 Q2'23 Q3'23 Q4'23 Q1'24 Q2'24 Q3'24 GAAP S&M $ 64,611 $ 64,098 $ 67,353 $ 65,928 $ 76,314 $ 74,077 $ 73,366 $ 72,956 $ 81,109 $ 78,332 $ 78,615 % of revenue 35.3 % 33.8 % 34.0 % 31.6 % 34.9 % 33.2 % 31.9 %
Slide 31: Non-GAAP OpEx Reconciliation Q1'18–Q4'21
GAAP to Non-GAAP OpEx Reconciliation Q1’18 – Q4’21 Quarter Ended Q1'18 Q2'18 Q3'18 Q4'18 Q1'19 Q2'19 Q3'19 Q4'19 Q1'20 Q2'20 Q3'20 Q4'20 Q1'21 Q2'21 Q3'21 Q4'21 GAAP G&A $ 9,103 $ 9,833 $ 10,746 $ 10,766 $ 11,762 $ 12,042 $ 12,146 $ 13,496 $ 14,658 $ 16,129 $ 16,724 $ 18,258 $ 22,245 $ 22,909 $ 26,7
Slide 32: Non-GAAP OpEx Reconciliation Q1'22–Q3'24
GAAP to Non-GAAP OpEx Reconciliation Q1’22 – Q3’24 Quarter Ended Q1'22 Q2'22 Q3'22 Q4'22 Q1'23 Q2'23 Q3'23 Q4'23 Q1'24 Q2'24 Q3'24 GAAP G&A $ 24,314 $ 23,824 $ 24,496 $ 22,509 $ 28,258 $ 30,477 $ 31,006 $ 33,338 $ 30,548 $ 33,988 $ 36,575 % of revenue 13.3 % 12.6 % 12.4 % 10.8 % 12.9 % 13.7 % 13.5 %
Slide 33: Non-GAAP COR and OpEx Reconciliation 2014–2023
GAAP to Non-GAAP COR and OpEx Reconciliation 2014 – 2023 Year Ended 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 GAAP COR $ 54,661 $ 59,495 $ 66,934 $ 83,104 $ 104,034 $ 134,511 $ 180,284 $ 271,099 $ 367,501 $ 432,690 % of revenue 53.0 % 46.2 % 41.3 % 41.5 % 40.4 % 41.0 % 41.5 % 44.5 % 47.2 % 4
Slide 34: Non-GAAP OpEx Reconciliation 2014–2023
GAAP to Non-GAAP OpEx Reconciliation 2014 – 2023 Year Ended 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 GAAP G&A $ 24,416 $ 25,822 $ 25,072 $ 29,151 $ 40,448 $ 49,446 $ 65,769 $ 93,916 $ 95,143 $ 123,079 % of revenue 23.7 % 20.0 % 15.5 % 14.6 % 15.7 % 15.1 % 15.1 % 15.4 % 12.2 % 13.5 % Depreci
Slide 35: Non-GAAP Net Income (Loss) Reconciliation
GAAP to Non-GAAP Net Income (Loss) Reconciliation Three Months Ended Nine Months Ended Sept 30, 2024 Sept 30, 2023 Sept 30, 2024 Sept 30, 2023 GAAP net loss $ (4,479) $ (20,419) $ (24,372) $ (69,406) Non-GAAP adjustments: Stock-based compensation 39,556 52,611 127,872 156,721 Intangibles amortizatio
Slide 36: Capital Expenditure and Free Cash Flow (Q1'22 - Q3'24)
Capital Expenditure and Free Cash Flow (Q1'22 - Q3'24) 12 mo 12 mo ended ended 12/31/20 12/31/20 $ in Thousands Q1'22 Q2'22 Q3'22 Q4'22 22 Q1'23 Q2'23 Q3'23 Q4'23 23 Q1'24 Q2'24 Q3'24 Net cash provided by operating activities $ 28,724 $ (3,125) $ 30,526 $ 32,740 $ 88,865 $ 33,412 $ 21,852 $ 37,030 $
Slide 37: Non-GAAP Net Income (Loss) Reconciliation - Guidance
GAAP to Non-GAAP Net Income (Loss) Reconciliation Guidance(1) Three Months Ended Twelve Months Ended December 31, 2024 December 31, 2024 Low High Low High GAAP net income (loss) $ 2,687 $ 7,207 $ (22,000) $ (17,500) Non-GAAP adjustments: Stock-based compensation(2) 43,479 41,479 171,351 169,351 Inta
Slide 38: Thank You
Thank You 38 © 2024 Five9, Inc. All rights reserved. Proprietary and confidential to Five9, Inc.