Slide 1: Q3 2022 Investor Presentation
Q3 2022 Investor Presentation Five9 (NASDAQ: FIVN) © 2021 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: Q3'22 Highlights
Q3’22 Highlights Strong Financial Results ◦ Record new logo bookings for any third quarter ◦ Q3'22 revenue was a record $198.3M, representing 29% YoY growth ◦ LTM DBBR of 118% ◦ Q3'22 adjusted EBITDA margin of 18.5%, delivering disciplined and profitable growth Upmarket Execution ◦ Q3’22 marked an a
Slide 4: Q3'22 Highlights (cont'd)
Q3’22 Highlights (cont’d) Product Leadership and Innovation ◦ Introduced major new product capabilities at the CX Summit ▪ Web-based Administration provides ability to manage contact center more effectively ▪ AI Insights offering gives access to data once considered inaccessible for insights and eme
Slide 5: Strong, Consistent Revenue Growth
Strong, Consistent Revenue Growth Quarterly Revenue ($M) Annual Revenue ($M) +29% YoY Growth +40% YoY Growth 610 198 189 183 174 154 435 138 144 128 112 328 95 100 258 Q1'20 Q2'20 Q3'20 Q4'20 Q1'21 Q2'21 Q3'21 Q4'21 Q1'22 Q2'22 Q3'22 2018 2019 2020 2021 5 © 2021 Five9, Inc. All rights reserved. Prop
Slide 6: Attractive Revenue Visibility
Attractive Revenue Visibility Recurring as a % of Total Revenue 92% 93% 93% 92% 92% 92% 93% 91% 91% 91% 91% Q1'20 Q2'20 Q3'20 Q4'20 Q1'21 Q2'21 Q3'21 Q4'21 Q1'22 Q2'22 Q3'22 6 © 2021 Five9, Inc. All rights reserved. Proprietary and confidential to Five9, Inc.
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% Q1'20 Q2'20 Q3'20 Q4'20 Q1'21 Q2'21 Q3'21 Q4'21 Q1'22 Q2'22 Q3'22 7 © 2021 Five9, Inc. All rights reserved. Proprietary and confidential to Five9, Inc.
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 (Q4’21 Ann.) 86% 134 60% 3 Q2'14 (IPO) Q3'22 Q2'14 (IPO) Q4'21 Note: Historical results prior to 2018 based on ASC 605; $1M+ ARR based on Q4’21 annualized 8 © 2021 Five9, Inc. All righ
Slide 9: High Customer Retention
High Customer Retention % Annual Dollar Based Retention Rate (DBRR) 121% 123% 123% 122% 117% 120% 118% 118% 114% 111% 111% Q1'20 Q2'20 Q3'20 Q4'20 Q1'21 Q2'21 Q3'21 Q4'21 Q1'22 Q2'22 Q3'22 Note: Annual DBRR based on last 12 months at the end of each respective quarter 9 © 2021 Five9, Inc. All rights
Slide 10: Exceeding "Rule of 40"
Exceeding “Rule of 40” % YoY Revenue Growth % EBITDA Margin 61% 61% 61% 55% 55% 57% 53% 50% 49% 16% 17% 49% 47% 45% 46% 47% 23% 46% 44% 42% 42% 18% 21% 21% 38% 38% 20% 23% 13% 18% 34% 34% 33% 16% 18% 21% 18% 19% 31% 16% 19% 15% 29% 29% 29% 12% 13% 3% 27% 6% 7% 3% 14% 21% 10% 15% 1% 7% 6% 6% 4% 45% 4
Slide 11: Robust Margin Expansion and Operating Leverage
Robust Margin Expansion and Operating Leverage Non-GAAP Adj. Gross Margin Non-GAAP Opex (% of revenue) Adj. EBITDA Margin 9.9% expansion 36.4% improvement 46.3% expansion 61.4% 79.3% 51.5% G&A 21.4% 42.9% 18.5% S&M 37.5% 6.5% 26.0% R&D 20.4% (27.8%) 10.4% Q2'14 (IPO) Q3'22 Q2'14 (IPO) Q3'22 Q2'14 (I
Slide 12: Operating Cash Flow and Margin
Operating Cash Flow and Margin LTM Operating Cash Flow ($M) DSO of 34 days in Q3'22 LTM Operating Cash Flow 100 .0 % LTM Operating Cash Flow Margin 16.6% 15.9% 10.8% 8.6% 80.0 5.9% 7.0% 10. 0% 2.6% 63.6 64.3 51.1 60.0 0.0 % 39.7 (13.5%) 40.0 26.0 (10.0%) 11.1 20.0 3.9 (20.0%) - (30.0%) (16.4) (2 0.0
Slide 13: Q4'22 and 2022 Guidance
Q4’22 and 2022 Guidance Q4’22 2022 Revenue $204.0M - $205.0M $774.5M - $775.5M Non-GAAP Net Income Per Diluted Share $0.40 - $0.42 $1.35 - $1.37 Diluted Shares 72.0M 71.3M Non-GAAP Taxes $650K $2.0M Capital Expenditures $12M - $13M $60M - $61M Note: 2022 non-GAAP tax guidance excludes $1.8M tax prov
Slide 14: Long-Term Operating Model
Long-Term Operating Model Non-GAAP Today Long-Term % of Revenue Q3’22 Model 2027 Revenue $198M Continued growth in Enterprise subscriptions $2.4B Subscription margin expansion and increasing Adj. Gross Margin 61% 70%+ subscription mix Continued investments in GTM in line with S&M 26% 26% - 30% reven
Slide 15: Appendix
Appendix 15 © 2021 Five9, Inc. All rights reserved. Proprietary and confidential to Five9, Inc.
Slide 16: Balance Sheet Summary
Balance Sheet Summary Quarter Ended $ in Millions September 30, 2022 December 31, 2021 Cash, cash equivalents and marketable investments $579.1 $617.2 Working capital 590.1 459.7 Total assets 1,206.8 1,192.9 Total debt 737.6 768.6 Total stockholders’ equity 269.4 211.1 16 © 2021 Five9, Inc. All righ
Slide 17: GAAP to Adjusted Gross Profit Reconciliation
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 18: GAAP to Adjusted Gross Profit Reconciliation
GAAP to Adjusted Gross Profit Reconciliation Q1’18 – Q3’22 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 Q1'22 Q2'22 Q3'22 GAAP gross profit $ 34,203 $ 36,306 $ 39,125 $ 43,996 $ 43,687 $ 46,188 $ 49,297 $ 54,323 $ 55,051 $ 57,339 $ 65,
Slide 19: GAAP to Adjusted Gross Profit Reconciliation
GAAP to Adjusted Gross Profit Reconciliation 2014 – 2021 Year Ended 2014 2015 2016 2017 2018 2019 2020 2021 GAAP gross profit $ 48,441 $ 69,373 $ 95,156 $ 117,121 $ 153,630 $ 193,495 $ 254,624 $ 338,492 % GAAP gross margin 47.0 % 53.8 % 58.7 % 58.5 % 59.6 % 59.0 % 58.5 % 55.5 % Depreciation & amorti
Slide 20: GAAP Net Inc. (Loss) to Adj. EBITDA Reconciliation
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: GAAP Net Inc. (Loss) to Adj. EBITDA Reconciliation
GAAP Net Inc. (Loss) to Adj. EBITDA Reconciliation Q1’18 – Q3’22 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 Q1'22 Q2'22 Q3'22 GAAP net income (loss) $ (607) $ (2,042) $ (1,305) $ 3,733 $ (1,924) $ (1,860) $ (1,604) $ 836 $ (7,437) $
Slide 22: GAAP Net Loss to Adjusted EBITDA Reconciliation
GAAP Net Loss to Adjusted EBITDA Reconciliation 2014 – 2021 Year Ended 2014 2015 2016 2017 2018 2019 2020 2021 GAAP net income (loss) $ (37,786) $ (25,838) $ (11,860) $ (8,969) $ (221) $ (4,552) $ (42,130) $ (53,000) Non-GAAP adjustments: Depreciation and amortization 6,463 7,388 8,390 8,314 10,274
Slide 23: GAAP to Non-GAAP COR and OpEx Reconciliation
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 24: GAAP to Non-GAAP OpEx Reconciliation
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 25: GAAP to Non-GAAP OpEx Reconciliation
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 26: GAAP to Non-GAAP COR and OpEx Reconciliation
GAAP to Non-GAAP COR and OpEx Reconciliation Q1’18 – Q3’22 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 Q1'22 Q2'22 Q3'22 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,
Slide 27: GAAP to Non-GAAP OpEx Reconciliation
GAAP to Non-GAAP OpEx Reconciliation Q1’18 – Q3’22 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 Q1'22 Q2'22 Q3'22 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
Slide 28: GAAP to Non-GAAP OpEx Reconciliation
GAAP to Non-GAAP OpEx Reconciliation Q1’18 – Q3’22 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 Q1'22 Q2'22 Q3'22 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 $ 22,2
Slide 29: GAAP to Non-GAAP COR and OpEx Reconciliation
GAAP to Non-GAAP COR and OpEx Reconciliation 2014 – 2021 Year Ended 2014 2015 2016 2017 2018 2019 2020 2021 GAAP COR $ 54,661 $ 59,495 $ 66,934 $ 83,104 $ 104,034 $ 134,511 $ 180,284 $ 271,099 % of revenue 53.0 % 46.2 % 41.3 % 41.5 % 40.4 % 41.0 % 41.5 % 44.5 % Depreciation & amortization (5,138) (5
Slide 30: GAAP to Non-GAAP OpEx Reconciliation
GAAP to Non-GAAP OpEx Reconciliation 2014 – 2021 Year Ended 2014 2015 2016 2017 2018 2019 2020 2021 GAAP G&A $ 24,416 $ 25,822 $ 25,072 $ 29,151 $ 40,448 $ 49,446 $ 65,769 $ 93,916 % of revenue 23.7 % 20.0 % 15.5 % 14.6 % 15.7 % 15.1 % 15.1 % 15.4 % Depreciation & amortization (900) (777) (859) (1,0
Slide 31: GAAP to Non-GAAP Net Income (Loss) Reconciliation
GAAP to Non-GAAP Net Income (Loss) Reconciliation Three Months Ended Nine Months Ended September 30, 2022 September 30, 2021 September 30, 2022 September 30, 2021 GAAP net loss $ (23,207) $ (20,537) $ (80,997) $ (49,399) Non-GAAP adjustments: Stock-based compensation 44,503 27,395 128,682 73,204 Int
Slide 32: Capital Expenditure and Free Cash Flow
Capital Expenditure and Free Cash Flow 12 mo 12 mo ended ended $ in Thousands Q1'20 Q2'20 Q3'20 Q4'20 12/31/2020 Q1'21 Q2'21 Q3'21 Q4'21 12/31/2021 Q1'22 Q2'22 Q3'22 Net cash provided by operating activities $ 10,394 $ 14,765 $ 22,831 $ 19,312 $ 67,302 $ 13,765 $ 11,392 $ (4,808) $ 8,136 $ 28,485 $
Slide 33: Thank You
Thank You © 2021 Five9, Inc. All rights reserved. Proprietary and confidential to Five9, Inc.