Slide 1: Q4 2020 Investor Presentation
Q4 2020 Investor Presentation Five9 (NASDAQ: FIVN) © 2019 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: Q4'20 Highlights
Q4’20 Highlights Strong financial results • Q4’20 revenue was a record $127.9M, representing 39% YoY and 14% QoQ growth • Revenue-based LTM DBRR increased to 117%, up from 114% last quarter and 112% a year ago • Q4’20 adjusted EBITDA margin was 22.8%, up from 21.2% in Q4’19 • Q4’20 operating cash fl
Slide 4: Q4'20 Highlights (cont'd)
Q4’20 Highlights (cont’d) Channel growth • Q4’20 SI bookings more than doubled YoY, while 2020 SI bookings more than tripled YoY • Q4’20 channel bookings grew over 80% YoY • Over 65% of Q4’20 deals influenced by partners • AT&T partnership seeing accelerating wins and pipeline International expansio
Slide 5: Strong, Consistent Revenue Growth
Strong, Consistent Revenue Growth Quarterly Revenue ($M) Annual Revenue ($M) +39% YoY Growth +33% YoY Growth 128 435 112 100 328 92 95 84 75 77 258 72 Q4'18 Q1'19 Q2'19 Q3'19 Q4'19 Q1'20 Q2'20 Q3'20 Q4'20 2018 2019 2020 Note: Historical results prior to 2018 based on ASC 605 5
Slide 6: Attractive Revenue Visibility
Attractive Revenue Visibility Recurring as a % of Total Revenue 93% 93% 92% 91% 91% 91% 92% 93% 93% Q4'18 Q1'19 Q2'19 Q3'19 Q4'19 Q1'20 Q2'20 Q3'20 Q4'20 Note: Historical results prior to 2018 based on ASC 605 6
Slide 7: Executing on Enterprise Opportunity
Executing on Enterprise Opportunity % YoY Enterprise Subscription Revenue Growth (LTM) 39% 36% 36% 36% 36% 35% 34% 33% 33% Q4'18 Q1'19 Q2'19 Q3'19 Q4'19 Q1'20 Q2'20 Q3'20 Q4'20 Note: Historical results prior to 2018 based on ASC 605 7
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 (Q4’20 Ann.) 91 83% 60% 3 Q2'14 (IPO) Q4'20 Q2'14 (IPO) Q4'20 Note: Historical results prior to 2018 based on ASC 605; $1M+ ARR based on Q4’20 annualized 8
Slide 9: High Customer Retention
High Customer Retention % Annual Dollar Based Retention Rate (DBRR) Old Methodology Based on Net Invoicing 107% 107% 107% 107% 110% 105% 103% 105% Q1'19 Q2'19 Q3'19 Q4'19 Q1'20 Q2'20 Q3'20 Q4'20 Note: Annual DBRR based on last 12 months at the end of each respective quarter 9
Slide 10: High Customer Retention (cont'd)
High Customer Retention (cont’d) % Annual Dollar Based Retention Rate (DBRR) New Methodology Based on Net Revenue 114% 117% 111% 112% 113% 112% 111% 111% Q1'19 Q2'19 Q3'19 Q4'19 Q1'20 Q2'20 Q3'20 Q4'20 Note: Annual DBRR based on last 12 months at the end of each respective quarter 10
Slide 11: Exceeding "Rule of 40" Despite Increased Investments
Exceeding “Rule of 40” Despite Increased Investments YoY Revenue Growth EBITDA Margin 61% 55% 53% 50% 49% 46% 47% 23% 44% 45% 42% 42% 21% 38% 38% 23% 20% 34% 18% 21% 18% 34% 33% 16% 19% 31% 16% 15% 6% 29% 29% 29% 12% 13% 3% 27% 7% 14% 21% 10% 4% 15% 1% 7% 6% 6% 5% 39% 34% 28% 28% 30% 31% 28% 29% 27%
Slide 12: Robust Margin Expansion and Operating Leverage
Robust Margin Expansion and Operating Leverage Non-GAAP Adj. Gross Margin Non-GAAP Opex (% of revenue) Adj. EBITDA Margin 14.9% expansion 35.7% improvement 50.7% expansion IPO Today IPO Today IPO Today 79.3% 66.4% G&A 21.4% 51.5% 43.6% S&M 37.5% 7.7% 22.8% 24.8% R&D 20.4% 11.1% (27.8%) Q2’14 Q4’20 Q
Slide 13: Strong Operating Cash Flow
Strong Operating Cash Flow LTM Operating Cash Flow ($M) LTM Operating Cash Flow 15.0% 15.6% 15.5% % LTM Operating Cash Flow Margin 5.5% 67 4.2% 51 39 (10.0%) (23.5%) 11 7 (13) (24) Q4'14 Q4'15 Q4'16 Q4'17 Q4'18 Q4'19 Q4'20 Note: Historical results prior to 2018 based on ASC 605 13
Slide 14: Q1'21 and 2021 Guidance
Q1’21 and 2021 Guidance $ in Millions Q1’21 2021 Revenue $122.0M - $123.0M $518.5M - $521.5M Taxes $0.3M $1.2M GAAP Net Income (Loss) $(19.2)M - $(18.2)M $(63.9)M - $(60.9)M Non-GAAP Net Income $9.5M - $10.5M $59.1M - $62.1M Basic Shares 67.5M 69.5M Diluted Shares 76.5M 78.6M GAAP Basic & Diluted EP
Slide 15: Long-Term Operating Model
Long-Term Operating Model Non-GAAP IPO Year Today Long-Term % of Revenue 2014 2020 Q4’20 Model Subscription / PS margin Adj. Gross Margin 53% 65% 66% expansion and increasing 70%+ subscription mix Continue to invest in GTM S&M 35% 26% 25% 26% – 30% in line with revenue growth Current acceleration of
Slide 16: Appendix
Appendix 16 © 2019 Five9, Inc. All rights Reserved. Proprietary and Confidential to Five9 Inc.
Slide 17: Balance Sheet Summary
Balance Sheet Summary Quarter Ended $ in Millions December 31, 2020 September 30, 2020 Cash, cash equivalents and marketable investments $645.7 $780.9 Working capital 585.6 765.3 Total assets 1,063.7 1,013.3 Total finance leases 0.6 1.3 Total debt 643.3 646.6 Total stockholders’ equity $279.2 $262.4
Slide 18: GAAP to Adjusted Gross Profit Reconciliation
GAAP to Adjusted Gross Profit Reconciliation Q2’14 – Q4’20 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 Q1'18 Q2'18 Q3'18 Q4'18 Q1'19 Q2'19 Q3'19 Q4'19 Q1'20 Q2'20 Q3'20 Q4'20 GAAP gross profit 11,216 12,365 13,734 15,496 16,004 17,475 20,39
Slide 19: GAAP to Adjusted Gross Profit Reconciliation
GAAP to Adjusted Gross Profit Reconciliation 2014 – 2020 Year Ended 2014 2015 2016 2017 2018 2019 2020 GAAP gross profit 48,441 69,373 95,156 117,121 153,630 193,495 254,624 % GAAP gross margin 47.0% 53.8% 58.7% 58.5% 59.6% 59.0% 58.5% Depreciation & amortization 5,138 5,950 6,573 6,300 7,808 10,856
Slide 20: GAAP Net Inc. (Loss) to Adj. EBITDA Reconciliation
GAAP Net Inc. (Loss) to Adj. EBITDA Reconciliation Q2’14 – Q4’20 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 Q1'18 Q2'18 Q3'18 Q4'18 Q1'19 Q2'19 Q3'19 Q4'19 Q1'20 Q2'20 Q3'20 Q4'20 GAAP net income (loss) (8,659) (11,435) (9,372) (8,903) (7,
Slide 21: GAAP Net Loss to Adjusted EBITDA Reconciliation
GAAP Net Loss to Adjusted EBITDA Reconciliation 2014 – 2020 Year Ended 2014 2015 2016 2017 2018 2019 2020 GAAP net income (loss) ($37,786) ($25,838) ($11,860) ($8,969) ($221) ($4,552) ($42,130) Non-GAAP adjustments: Depreciation and amortization 6,463 7,388 8,390 8,314 10,274 14,374 25,087 Stock-bas
Slide 22: GAAP to Non-GAAP COR and OpEx Reconciliation
GAAP to Non-GAAP COR and OpEx Reconciliation Q2’14 – Q4’20 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 Q1'18 Q2'18 Q3'18 Q4'18 Q1'19 Q2'19 Q3'19 Q4'19 Q1'20 Q2'20 Q3'20 Q4'20 GAAP COR 13,469 13,504 14,540 14,778 14,270 14,812 15,635 16,610
Slide 23: GAAP to Non-GAAP COR and OpEx Reconciliation (cont'd)
GAAP to Non-GAAP COR and OpEx Reconciliation (cont’d) Q2’14 – Q4’20 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 Q1'18 Q2'18 Q3'18 Q4'18 Q1'19 Q2'19 Q3'19 Q4'19 Q1'20 Q2'20 Q3'20 Q4'20 GAAP G&A 3,515 7,967 6,763 7,275 6,027 6,087 6,433 6,536
Slide 24: GAAP to Non-GAAP COR and OpEx Reconciliation
GAAP to Non-GAAP COR and OpEx Reconciliation 2014 – 2020 Year Ended 2014 2015 2016 2017 2018 2019 2020 GAAP COR $54,661 $59,495 $66,934 $83,104 $104,034 $134,511 $180,284 % of revenue 53.0% 46.2% 41.3% 41.5% 40.4% 41.0% 41.5% Depreciation & amortization (5,138) (5,950) (6,573) (6,300) (7,808) (10,85
Slide 25: GAAP to Non-GAAP Net Income (Loss) Reconciliation
GAAP to Non-GAAP Net Income (Loss) Reconciliation Three Months Ended Twelve Months Ended December 31, 2020 December 31, 2019 December 31, 2020 December 31, 2019 GAAP net income (loss) $ (7,210) $ 836 $ (42,130) $ (4,552) Non-GAAP adjustments: Stock-based compensation 16,876 11,868 64,747 42,065 Inta
Slide 26: GAAP to Non-GAAP Net Income (Loss) Reconciliation
GAAP to Non-GAAP Net Income (Loss) Reconciliation Guidance Three Months Ending Year Ending March 31, 2021 December 31, 2021 Low High Low High GAAP net loss $ (19,236) $ (18,236) $ (63,853) $ (60,853) Non-GAAP adjustments: Stock-based compensation 20,960 20,960 93,677 93,677 Intangibles amortization
Slide 27: Capital Expenditure and Free Cash Flow
Capital Expenditure and Free Cash Flow 12 mo ended 12 mo ended $ in Thousands Q1'19 Q2'19 Q3'19 Q4'19 12/31/19 Q1'20 Q2'20 Q3'20 Q4'20 12/31/20 Net cash provided by operating activities $11,190 $6,788 $17,677 $15,566 $51,221 $10,394 $14,765 $22,831 $19,312 $67,302 (Refer to cash flows from operating