Five9 Reports Record Revenue of $280 Million for the First Quarter

About this update from Five9, Inc.

Q1 Subscription Revenue Growth of 14% Q1 Record Operating Cash Flow of $48 Million SAN RAMON, Calif. --(BUSINESS WIRE)-- Five9, Inc. (NASDAQ:FIVN), provider of the Intelligent CX Platform, today reported results for the first quarter ended March 31, 2025 . First Quarter 2025 Financial Results Revenue for the first quarter of 2025 increased 13% to a record $279.7 million , compared to $247.0 million for the first quarter of 2024. GAAP gross margin was 55.0% for the first quarter of 2025, compared to 53.6% for the first quarter of 2024. Adjusted gross margin was 62.4% for the first quarter of 2025, compared to 60.8% for the first quarter of 2024. GAAP net income for the first quarter of 2025 was $0.6 million , or $0.01 per diluted share, and 0.2% of revenue, compared to GAAP net loss of $(7.1) million , or $(0.10) per basic share, and (2.9)% of revenue, for the first quarter of 2024. Non-GAAP net income for the first quarter of 2025 was $47.3 million , or $0.62 per diluted share, and 16.9% of revenue, compared to non-GAAP net income of $35.7 million , or $0.48 per diluted share, and 14.5% of revenue, for the first quarter of 2024. Adjusted EBITDA for the first quarter of 2025 was $52.7 million , or 18.8% of revenue, compared to $37.6 million , or 15.2% of revenue, for the first quarter of 2024. GAAP operating cash flow for the first quarter of 2025 was $48.4 million , compared to GAAP operating cash flow of $32.4 million for the first quarter of 2024. “We are very pleased to report strong first quarter results, exceeding expectations across key metrics, while remaining laser focused on delivering balanced growth for both top and bottom lines. Subscription revenue grew 14% year-over-year, and we achieved an adjusted EBITDA margin of 19%, which drove a Q1 record for operating cash flow of $48 million . Our customers are realizing meaningful benefits through our Genius AI suite of products as we continue to enable brands to deliver AI-elevated customer experiences. We are off to a strong start in 2025, with continued momentum in AI for CX and execution against the massive core CCaaS market opportunity, and we look forward to sharing our progress as the year unfolds.” - Mike Burkland , Chairman and CEO, Five9 Business Outlook Five9 provides guidance based on current market conditions and expectations. Five9 emphasizes that the guidance is subject to various important cautionary factors referenced in the section entitled "Forward-Looking Statements" below, including risks and uncertainties associated with the ongoing impact of macroeconomic challenges. For the full year 2025, Five9 expects to report: Revenue in the range of $1.140 to $1.144 billion . GAAP net income per share in the range of $0.14 to $0.24 , assuming diluted shares outstanding of approximately 85.6 million. Non-GAAP net income per share in the range of $2.74 to $2.78 , assuming diluted shares outstanding of approximately 77.3 million. For the second quarter of 2025, Five9 expects to report: Revenue in the range of $274.5 to $275.5 million . GAAP net loss per share in the range of $(0.15) to $(0.06) , assuming basic shares outstanding of approximately 76.6 million. Non-GAAP net income per share in the range of $0.64 to $0.66 , assuming diluted shares outstanding of approximately 76.7 million. With respect to Five9’s guidance as provided above, please refer to the “Reconciliation of GAAP Net Income (Loss) to Non-GAAP net income - Guidance” table for more details, including important assumptions upon which such guidance is based. Conference Call Details Five9 will discuss its first quarter 2025 results today, May 1, 2025 , via Zoom webinar at 4:30 p.m. Eastern Time . To access the webinar, please register by clicking here . A copy of this press release will be furnished to the Securities and Exchange Commission on a Current Report on Form 8-K and will be posted to our website, prior to the conference call. A live webcast and a replay will be available on the Investor Relations section of the Company’s web-site at http://investors.five9.com/ . Non-GAAP Financial Measures In addition to disclosing financial measures prepared in accordance with U.S. generally accepted accounting principles (GAAP), this press release and the accompanying tables contain certain non-GAAP financial measures. We calculate adjusted gross profit and adjusted gross margin by adding back the following items to gross profit: depreciation, intangibles amortization, stock-based compensation, and lease amortization for finance leases. We calculate adjusted EBITDA by adding back or removing the following items to or from GAAP net income (loss): depreciation and amortization, stock-based compensation, interest expense, gain on early extinguishment of debt, interest income and other, exit costs related to closure and relocation of our Russian operations, acquisition and related transaction costs and one-time integration costs, lease amortization for finance leases, one-time expenses related to strategic consulting services for operational review, legal fees related to the securities class action, and provision for income taxes. We calculate non-GAAP operating income by adding back or removing the following items to or from GAAP loss from operations: stock-based compensation, intangibles amortization, exit costs related to the closure and relocation of our Russian operations, acquisition related transaction costs and one-time integration costs, one-time expenses related to strategic consulting services for operational review, and legal fees related to the securities class action. We calculate non-GAAP net income by adding back or removing the following items to or from GAAP net loss: stock-based compensation, intangibles amortization, amortization of discount and issuance costs on convertible senior notes, exit costs related to the closure and relocation of our Russian operations, acquisition and related transaction costs and one-time integration costs, gain on early extinguishment of debt, one-time expenses related to strategic consulting services for operational review, and legal fees related to the securities class action. For the periods presented, these adjustments from GAAP net income (loss) to non-GAAP net income do not include any presentation of the net tax effect of such adjustments given our significant net operating loss carryforwards. Non-GAAP financial measures do not have any standardized meaning and are therefore unlikely to be comparable to similarly titled measures presented by other companies. The Company considers these non-GAAP financial measures to be important because they provide useful measures of the operating performance of the Company, exclusive of factors that do not directly affect what we consider to be our core operating performance, as well as unusual events. The Company’s management uses these measures to (i) illustrate underlying trends in the Company’s business that could otherwise be masked by the effect of income or expenses that are excluded from non-GAAP measures, and (ii) establish budgets and operational goals for managing the Company’s business and evaluating its performance. In addition, investors often use similar measures to evaluate the operating performance of a company. Non-GAAP financial measures are presented only as supplemental information for purposes of understanding the Company’s operating results. The non-GAAP financial measures should not be considered a substitute for financial information presented in accordance with GAAP. Please see the reconciliation of non-GAAP financial measures set forth in this release. Forward-Looking Statements This news release contains certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including the statements in the quote from our Chairman and Chief Executive Officer, including statements regarding Five9's focus on balanced growth for both top and bottom lines, Five9’s AI platform and its customer benefits, market position and expected impact on the Company's growth, Five9's market opportunity and growth prospects, including as a result of AI, and the second quarter and full year 2025 financial projections and expectations set forth under the caption “Business Outlook,” that are based on our current expectations and involve numerous risks and uncertainties that may cause these forward-looking statements to be inaccurate. Risks that may cause these forward-looking statements to be inaccurate include, among others: (i) the impact of adverse economic conditions, including the impact of macroeconomic challenges, the global tariff increases, continued inflation, uncertainty regarding consumer spending, high interest rates, fluctuations in currency rates, the impact of the Russia - Ukraine conflict, the impact of the conflicts in the Middle East , and other factors, may continue to harm our business; (ii) if we are unable to attract new customers or sell additional services and functionality to our existing customers, our revenue and revenue growth will be harmed; (iii) if our existing customers terminate their subscriptions or reduce their subscriptions and related usage, or fail to grow subscriptions at the rate they have in the past or that we might expect, our revenues and gross margins will be harmed and we will be required to spend more money to grow our customer base; (iv) because a significant percentage of our revenue is derived from existing customers, downturns or upturns in new sales will not be immediately reflected in our operating results and may be difficult to discern; (v) if we fail to manage our technical operations infrastructure, our existing customers may experience service outages, our new customers may experience delays in the deployment of our solution and we could be subject to, among other things, claims for credits or damages; (vi) as AI solutions will likely perform an increasing proportion of contact center interactions, if we are unable to replace decreases in subscription revenue from licenses with revenue from the sale of additional AI solutions, our revenue, results of operations and business will be harmed; (vii) further development of our AI solutions may not be successful and may result in reputational harm and our future operating results could be materially harmed; (viii) we have established, and are continuing to increase, our network of technology solution distributors and resellers to sell our solution; our failure to effectively develop, manage, and maintain this network could materially harm our revenues; (ix) our quarterly and annual results may fluctuate significantly, including as a result of the timing and success of new product and feature introductions by us, may not fully reflect the underlying performance of our business and may result in decreases in the price of our common stock; (x) if we are unable to attract and retain highly skilled leaders and other employees, our business and results of operations may be harmed; (xi) our historical growth may not be indicative of our future growth, and even if we continue to grow rapidly, we may fail to manage our growth effectively; (xii) failure to adequately retain and expand our sales force will impede our growth; (xiii) the AI technology and features incorporated into our solution include new and evolving technologies that may present both legal and business risks; (xiv) the use of AI by our workforce may present risks to our business; (xv) the contact center software solutions market is subject to rapid technological change, and we must develop and sell incremental and new solutions in order to maintain and grow our business; (xvi) our growth depends in part on the success of our strategic relationships with third parties and our failure to successfully maintain, grow and manage these relationships could harm our business; (xvii) the markets in which we participate involve a high number of competitors that is continuing to increase, and if we do not compete effectively, our operating results could be harmed; (xviii) we continue to expand our international operations, which exposes us to significant macroeconomic and other risks; (xix) security breaches, cybersecurity incidents, and improper access to, use of, or disclosure of our data or our customers’ data, or other cyber-attacks on our systems, could result in litigation and regulatory risk, harm our reputation, our business or financial results; (xx) we may acquire other companies, or technologies, or be the target of strategic transactions, or be impacted by transactions by other companies, which could divert our management’s attention, result in additional dilution to our stockholders or use a significant amount of our cash resources and otherwise disrupt our operations and harm our operating results; (xxi) we sell our solution to larger organizations that require longer sales and implementation cycles and often demand more configuration and integration services or customized features and functions that we may not offer, any of which could delay or prevent these sales and harm our growth rates, business and operating results; (xxii) we rely on third-party telecommunications and internet service providers to provide our customers and their customers with telecommunication services and connectivity to our cloud contact center software and any failure by these service providers to provide reliable services could cause us to lose customers and subject us to claims for credits or damages, among other things; (xxiii) we have a history of losses and we may be unable to achieve or sustain profitability; (xxiv) our stock price has been volatile, may continue to be volatile and may decline, including due to factors beyond our control; (xxv) we may not be able to secure additional financing on favorable terms, or at all, to meet our future capital needs; (xxvi) failure to comply with laws and regulations could harm our business and our reputation; (xxvii) we may not have sufficient cash to service our convertible senior notes and repay such notes, if required, and other risks attendant to our convertible senior notes and increased debt levels; and (xxviii) the other risks detailed from time-to-time under the caption “Risk Factors” and elsewhere in our Securities and Exchange Commission filings and reports, including, but not limited to, our most recent annual report on Form 10-K and quarterly reports on Form 10- Q. Such forward-looking statements speak only as of the date hereof and readers should not unduly rely on such statements. We undertake no obligation to update the information contained in this press release, including in any forward-looking statements. About Five9 Five9 empowers organizations to create hyper-personalized and effortless AI-driven customer experiences that deliver better business outcomes. Powered by Five9 Genius AI and our people, the Five9 Intelligent CX Platform is trusted by 3,000+ customers and 1,400+ partners globally. The New CX starts here and it's at the heart of every winning experience. For more information, visit www.five9.com . FIVE9, INC. CONDENSED CONSOLIDATED BALANCE SHEETS (In thousands) (Unaudited) March 31, 2025 December 31, 2024 ASSETS Current assets: Cash and cash equivalents $ 370,344 $ 362,546 Marketable investments 671,394 643,410 Accounts receivable, net 118,614 115,172 Prepaid expenses and other current assets 47,832 50,840 Deferred contract acquisition costs, net 79,267 76,600 Total current assets 1,287,451 1,248,568 Property and equipment, net 146,460 144,888 Operating lease right-of-use assets 36,444 38,880 Finance lease right-of-use assets 21,113 19,269 Intangible assets, net 61,532 65,632 Goodwill 366,698 365,436 Other assets 12,669 13,384 Deferred contract acquisition costs, net — less current portion 157,557 155,157 Total assets $ 2,089,924 $ 2,051,214 LIABILITIES AND STOCKHOLDERS’ EQUITY Current liabilities: Accounts payable $ 29,477 $ 26,282 Accrued and other current liabilities 80,354 83,720 Operating lease liabilities 11,131 11,258 Finance lease liabilities 9,090 7,768 Deferred revenue 74,809 79,173 Convertible senior notes 434,031 433,490 Total current liabilities 638,892 641,691 Convertible senior notes — less current portion 732,721 731,855 Operating lease liabilities — less current portion 34,987 37,071 Finance lease liabilities — less current portion 12,321 11,688 Other long-term liabilities 6,717 6,717 Total liabilities 1,425,638 1,429,022 Stockholders’ equity: Common stock 76 76 Additional paid-in capital 1,080,782 1,039,125 Accumulated other comprehensive income 497 636 Accumulated deficit (417,069 ) (417,645 ) Total stockholders’ equity 664,286 622,192 Total liabilities and stockholders’ equity $ 2,089,924 $ 2,051,214 FIVE9, INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (In thousands, except per share data) (Unaudited) Three Months Ended March 31, 2025 March 31, 2024 Revenue $ 279,705 $ 247,010 Cost of revenue 125,973 114,530 Gross profit 153,732 132,480 Operating expenses: Research and development 41,100 41,518 Sales and marketing 82,855 81,109 General and administrative 35,205 30,548 Total operating expenses 159,160 153,175 Loss from operations (5,428 ) (20,695 ) Other income (expense), net: Interest expense (4,115 ) (2,567 ) Gain on early extinguishment of debt — 6,615 Interest income and other 10,303 10,559 Total other income (expense), net 6,188 14,607 Income (loss) before income taxes 760 (6,088 ) Provision for income taxes 184 989 Net income (loss) $ 576 $ (7,077 ) Net income (loss) per share: Basic $ 0.01 $ (0.10 ) Diluted $ 0.01 $ (0.10 ) Shares used in computing net income (loss) per share: Basic 75,949 73,488 Diluted 89,275 73,488 FIVE9, INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (In thousands) (Unaudited) Three Months Ended March 31, 2025 March 31, 2024 Cash flows from operating activities: Net income (loss) $ 576 $ (7,077 ) Adjustments to reconcile net income (loss) to net cash provided by operating activities: Depreciation and amortization 14,490 12,183 Reduction in the carrying amount of right-of-use assets 5,084 3,323 Amortization of deferred contract acquisition costs 20,362 16,269 Accretion of discount on marketable investments (3,313 ) (4,935 ) Provision for credit losses 423 352 Stock-based compensation 39,245 44,684 Amortization of discount and issuance costs on convertible senior notes 1,407 1,074 Gain on early extinguishment of debt — (6,615 ) Impairment charge of long-lived assets 322 — Interest on finance lease obligations 266 66 Deferred taxes 192 248 Other (163 ) (352 ) Changes in operating assets and liabilities: Accounts receivable (3,866 ) (6,085 ) Prepaid expenses and other current assets 3,008 (1,003 ) Deferred contract acquisition costs (25,429 ) (33,565 ) Other assets 843 (781 ) Accounts payable 2,731 1,279 Accrued and other current liabilities (3,208 ) 15,832 Deferred revenue (4,561 ) (1,452 ) Other liabilities (25 ) (1,092 ) Net cash provided by operating activities 48,384 32,353 Cash flows from investing activities: Purchases of marketable investments (275,939 ) (524,865 ) Proceeds from sales of marketable investments — 12,517 Proceeds from maturities of marketable investments 251,292 260,619 Purchases of property and equipment (4,724 ) (11,951 ) Capitalization of software development costs (8,732 ) (3,242 ) Cash settlement for acquisition of businesses — 99 Net cash used in investing activities (38,103 ) (266,823 ) Cash flows from financing activities: Proceeds from issuance of 2029 convertible senior notes, net of issuance costs — 731,055 Payment of debt issuance costs — (2,182 ) Payments for capped call transactions associated with the 2029 convertible senior notes — (93,438 ) Repurchase of a portion of 2025 convertible senior notes, net of costs — (304,485 ) Cash received from partial termination of capped calls associated with the 2025 convertible senior notes — 539 Proceeds from exercise of common stock options — 386 Proceeds from sale of common stock under ESPP 3 — Payment of finance lease liabilities (2,166 ) (479 ) Net cash (used in) provided by financing activities (2,163 ) 331,396 Net increase in cash, cash equivalents and restricted cash 8,118 96,926 Cash, cash equivalents and restricted cash: Beginning of period 364,185 144,842 End of period $ 372,303 $ 241,768 FIVE9, INC. RECONCILIATION OF GAAP GROSS PROFIT TO ADJUSTED GROSS PROFIT (In thousands, except percentages) (Unaudited) Three Months Ended March 31, 2025 March 31, 2024 GAAP gross profit $ 153,732 $ 132,480 GAAP gross margin 55.0 % 53.6 % Non-GAAP adjustments: Depreciation 7,783 6,965 Intangibles amortization 4,100 2,648 Stock-based compensation 7,184 7,603 Lease amortization for finance leases 1,816 457 Adjusted gross profit $ 174,615 $ 150,153 Adjusted gross margin 62.4 % 60.8 % FIVE9, INC. RECONCILIATION OF GAAP NET INCOME (LOSS) TO ADJUSTED EBITDA (In thousands, except percentages) (Unaudited) Three Months Ended March 31, 2025 March 31, 2024 GAAP net income (loss) $ 576 $ (7,077 ) Non-GAAP adjustments: Depreciation and amortization 14,490 12,183 Stock-based compensation 39,245 44,684 Interest expense 4,115 2,567 Gain on early extinguishment of debt — (6,615 ) Interest income and other (10,303 ) (10,559 ) Exit costs related to closure and relocation of Russian operations — 25 Acquisition and related transaction costs and one-time integration costs 982 932 Lease amortization for finance leases 2,008 457 One-time expenses related to strategic consulting services for operational review 1,265 — Legal fees related to the securities class action 141 — Provision for income taxes(1) 184 989 Adjusted EBITDA $ 52,703 $ 37,586 Adjusted EBITDA as % of revenue 18.8 % 15.2 % (1) Non-GAAP adjustments do not have a material impact on our worldwide income tax provision due to the tax treatment of the non-GAAP adjustments reported, and our domestic valuation allowance position. FIVE9, INC. RECONCILIATION OF GAAP OPERATING LOSS TO NON-GAAP OPERATING INCOME (In thousands) (Unaudited) Three Months Ended March 31, 2025 March 31, 2024 Loss from operations $ (5,428 ) $ (20,695 ) Non-GAAP adjustments: Stock-based compensation 39,245 44,684 Intangibles amortization 4,100 2,648 Exit costs related to closure and relocation of Russian operations — 25 Acquisition and related transaction costs and one-time integration costs 982 932 One-time expenses related to strategic consulting services for operational review 1,265 — Legal fees related to the securities class action 141 — Non-GAAP operating income $ 40,305 $ 27,594 FIVE9, INC. RECONCILIATION OF GAAP NET INCOME (LOSS) TO NON-GAAP NET INCOME (In thousands, except per share data) (Unaudited) Three Months Ended March 31, 2025 March 31, 2024 GAAP net income (loss) $ 576 $ (7,077 ) Non-GAAP adjustments: Stock-based compensation 39,245 44,684 Intangibles amortization 4,100 2,648 Amortization of discount and issuance costs on convertible senior notes 1,407 1,074 Gain on early extinguishment of debt — (6,615 ) Exit costs related to closure and relocation of Russian operations (376 ) 94 Acquisition and related transaction costs and one-time integration costs 982 932 One-time expenses related to strategic consulting services for operational review 1,265 — Legal fees related to the securities class action 141 — Income tax expense effects (1) — — Non-GAAP net income $ 47,340 $ 35,740 GAAP net income (loss) per share: Basic $ 0.01 $ (0.10 ) Diluted $ 0.01 $ (0.10 ) Non-GAAP net income per share: Basic $ 0.62 $ 0.49 Diluted $ 0.62 $ 0.48 Shares used in computing GAAP net income (loss) per share: Basic 75,949 73,488 Diluted 89,275 73,488 Shares used in computing non-GAAP net income per share: Basic 75,949 73,488 Diluted 76,629 74,404 (1) Non-GAAP adjustments do not have a material impact on our worldwide income tax provision due to the tax treatment of the non-GAAP adjustments reported, and our domestic valuation allowance position. FIVE9, INC. SUMMARY OF STOCK-BASED COMPENSATION, DEPRECIATION AND INTANGIBLES AMORTIZATION (In thousands) (Unaudited) Three Months Ended March 31, 2025 March 31, 2024 Stock-Based Compensation Depreciation Intangibles Amortization Stock-Based Compensation Depreciation Intangibles Amortization Cost of revenue $ 7,184 $ 7,783 $ 4,100 $ 7,603 $ 6,965 $ 2,648 Research and development 8,690 680 — 10,930 890 — Sales and marketing 11,574 36 — 14,020 27 — General and administrative 11,797 1,891 — 12,131 1,653 — Total $ 39,245 $ 10,390 $ 4,100 $ 44,684 $ 9,535 $ 2,648 FIVE9, INC. RECONCILIATION OF GAAP NET LOSS TO NON-GAAP NET INCOME (LOSS) – GUIDANCE(1) (In thousands, except per share data) (Unaudited) Three Months Ending Year Ending June 30, 2025 December 31, 2025 Low High Low High GAAP net (loss) income $ (11,665 ) $ (4,631 ) $ 11,637 $ 20,229 Non-GAAP adjustments: Stock-based compensation(2) 42,076 40,076 160,898 158,898 Intangibles amortization 2,643 2,643 12,027 12,027 Amortization of discount and issuance costs on convertible senior notes 1,271 1,271 4,169 4,169 Acquisition and related transaction costs and one-time integration costs(3) 4,263 3,263 12,368 11,368 Costs related to a reduction in force plan - cash expenditures 9,000 7,000 9,000 7,000 Costs related to a reduction in force plan - non-cash expenditures 1,500 1,000 1,500 1,000 Income tax expense effects(4) — — — — Non-GAAP net income $ 49,088 $ 50,622 $ 211,599 $ 214,691 GAAP net (loss) income per share: Basic $ (0.15 ) $ (0.06 ) $ 0.16 $ 0.27 Diluted $ (0.15 ) $ (0.06 ) $ 0.14 $ 0.24 Non-GAAP net income per share: Basic $ 0.64 $ 0.66 $ 2.74 $ 2.78 Diluted $ 0.64 $ 0.66 $ 2.74 $ 2.78 Shares used in computing GAAP net (loss) income per share: Basic 76,600 76,600 74,600 74,600 Diluted 76,600 76,600 85,600 85,600 Shares used in computing non-GAAP net income per share: Basic 76,600 76,600 77,100 77,100 Diluted 76,700 76,700 77,300 77,300 (1) Represents guidance discussed on May 1, 2025 . Reader shall not construe presentation of this information after May 1, 2025 as an update or reaffirmation of such guidance. (2) Stock-based compensation expenses are based on a range of probable significance, assuming market price for our common stock that is approximately consistent with current levels. (3) Acquisition and related transaction costs and one-time integration costs are based on a range of probable significance for completed acquisitions, and no new acquisitions assumed. (4) Non-GAAP adjustments do not have a material impact on our worldwide income tax provision due to the tax treatment of the non-GAAP adjustments reported, and our domestic valuation allowance position. View source version on businesswire.com : https://www.businesswire.com/news/home/20250501097296/en/ Investor Relations Contacts: Five9, Inc. Bryan Lee Interim Chief Financial Officer 925-201-2000 [email protected] The Blueshirt Group for Five9, Inc. Emily Greenstein [email protected] Source: Five9, Inc.

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