Five9 (FIVN) FY Conference Summary Company Overview - **Company**: Five9 (FIVN) - **Event**: FY Conference held on August 13, 2025 - **Key Speakers**: Mike (CEO), Brian (CFO) Key Points Industry and Market Dynamics - The CCaaS (Contact Center as a Service) market is still largely on-premise, with only 40% in the cloud, indicating significant growth potential for cloud migration [19][20] - The AI segment within Five9's offerings is growing rapidly, with AI revenue accelerating to 42% year-over-year, now constituting 10% of enterprise subscription revenue [5][6] Financial Performance - Five9 reported the highest quarterly ACV (Annual Contract Value) bookings in two years, with AI bookings tripling year-over-year [4][5] - Record profitability was achieved with 24% EBITDA margins [6][66] - The company anticipates revenue growth of 10-15% by 2027, driven by macroeconomic conditions and AI adoption [60] AI Strategy and Offerings - Five9's AI is embedded within its platform, providing access to contextual data, which is a competitive advantage [30][31] - The AI suite includes 10 SKUs, with self-service, agent assist, and workflow automation being the top three products driving growth [32][37] - The company emphasizes trust and governance in AI, addressing enterprise concerns [33] Executive Changes - Mike announced his transition from CEO to Executive Chairman due to health reasons, with Brian confirmed as the permanent CFO [10][14] - The leadership transition is aimed at setting the company up for long-term success [14][15] Partner Contributions - A significant portion of deals is influenced by partners, including ISVs and global systems integrators [23][24] - Partnerships with Salesforce and ServiceNow remain strong despite competitive investments in the space [28] Customer Trends and AI Impact - Customers are increasingly adopting AI, with expectations of self-service AI handling 5-15% of interaction volumes [50] - The company is seeing a net increase in ARR (Annual Recurring Revenue) as customers mature in their AI journey [47] Competitive Landscape - The acquisition of Cognigy by NICE highlights the competitive dynamics in the AI space, with Five9's AI business being a strong performer [54][55] - Five9's AI revenue is projected to grow significantly, with gross margins in the high seventies to low eighties [45][64] Future Outlook - Five9 is focused on maintaining sales capacity while improving productivity and targeting a diverse range of deals [62][63] - The company aims for gross margins to reach 66-68% in the intermediate term, driven by a shift towards higher-margin AI offerings [64][66] Investor Sentiment - The company believes it is positioned as a leader in AI within the CCaaS space, with strong revenue growth metrics that will shift investor perceptions [67][68] Additional Insights - The operational review earlier in the year has led to efficiency improvements, contributing to both top and bottom-line growth [7][66] - The company is optimistic about the future, with a strong pipeline and a focus on both large and mid-sized deals [63][68]

Core Insights - Five9 (FIVN) and Autodesk (ADSK) are both considered for investors looking for undervalued stocks in the Internet - Software sector [1] - Both companies currently hold a Zacks Rank of 2 (Buy), indicating a positive earnings outlook due to favorable analyst estimate revisions [3] Valuation Metrics - FIVN has a forward P/E ratio of 9.01, significantly lower than ADSK's forward P/E of 31.39, suggesting FIVN may be undervalued [5] - The PEG ratio for FIVN is 0.64, while ADSK's PEG ratio is 1.99, indicating FIVN's expected earnings growth is more favorable relative to its price [5] - FIVN's P/B ratio stands at 2.7, compared to ADSK's P/B of 24.74, further supporting the notion that FIVN is undervalued [6] Value Grades - Based on various valuation metrics, FIVN holds a Value grade of B, while ADSK has a Value grade of F, highlighting FIVN as the superior value option [6][7]

Key Takeaways FIVN's Q2 EPS jumped 46.2% to $0.76, while revenue rose 12.4% to a record $283.27 million.Subscription revenues grew 16% YoY, supported by Enterprise AI revenues, which climbed 42% YoY.FIVN trades at 8.73X forward P/E, well below peers, with strong 2025 guidance and strategic partnerships.Contact center software solutions provider Five9 Inc. (FIVN) reported second-quarter 2025 adjusted earnings of $0.76 per share, which beat the Zacks Consensus Estimate by 16.9% and jumped 46.2% year over year ...

Core Insights - Five9 reported strong Q2 2025 earnings, with GAAP revenue of $283.3 million, a 12% increase year-over-year, and non-GAAP EPS of $0.76, exceeding analyst expectations of $0.62 [1][2][6] Financial Performance - Revenue of $283.3 million surpassed analyst estimates by $8.1 million, reflecting a 12.4% year-over-year increase from $252.1 million in Q2 2024 [2][3] - Non-GAAP EPS increased by 46.2% year-over-year, from $0.52 in Q2 2024 to $0.76 in Q2 2025 [3] - Adjusted EBITDA margin reached a record 24.0%, up from 16.6% in the prior year [3][6] - Gross margin improved to 54.9%, a 1.9 percentage point increase from 53.0% in Q2 2024 [3] Business Overview and Strategy - Five9 operates in the software-as-a-service sector, providing cloud-based call center solutions that facilitate customer interactions across multiple channels [4] - The company focuses on driving cloud adoption, advancing AI capabilities, supporting digital transformation, and expanding its partner ecosystem to capture market share [5] Key Developments - Enterprise AI revenue surged by 42% year-over-year, now constituting 10% of enterprise subscription revenue, with bookings more than tripling [7] - Subscription revenue grew by 16% year-over-year, contributing to improved gross margins and profitability [8] - The company launched new AI products, including Agentic AI Agents and tools for Trust & Governance, enhancing operational efficiency [10] Partnerships and Market Position - Collaborations with major software providers like Salesforce and Microsoft have expanded Five9's market reach, particularly in sectors such as financial services and healthcare [9] - Management noted challenges with U.S. vendor acceptance in international markets, adopting a cautious outlook for international growth [9] Future Guidance - For Q3 2025, management projects revenue between $283.0 million and $286.0 million, with full-year 2025 revenue guidance of $1.1435 billion to $1.1495 billion [11] - Non-GAAP EPS guidance for Q3 2025 is set at $0.72 to $0.74, with full-year guidance of $2.86 to $2.90 [11]

Core Insights - Five9, Inc. (FIVN) reported second-quarter 2025 earnings of 76 cents per share, exceeding the Zacks Consensus Estimate by 16.9% and reflecting a 46.2% year-over-year increase from 52 cents [1][10] - Revenues for the second quarter increased by 12.4% year over year to $283.27 million, surpassing the Zacks Consensus Estimate by 2.98%, driven by a 16% growth in subscription revenues, particularly in Enterprise AI [2][10] Financial Performance - FIVN's adjusted non-GAAP gross profit for Q2 was $175.55 million, up from $152.4 million in the same quarter last year, with a gross margin of 63%, an increase of 250 basis points year over year [4] - Non-GAAP operating income rose to $54.45 million from $31 million year over year, resulting in a non-GAAP operating margin of 19.2% [4] - The company generated an operating cash flow of $83.45 million and reported a free cash flow of $21.57 million with a free cash flow margin of 8% [6] Revenue Breakdown - U.S. revenues accounted for $251.4 million, representing 88.7% of total revenues and a 12% increase year over year [3] - International revenues reached $31.88 million, making up 11.3% of total revenues, with a year-over-year growth of 15.7% [3] Balance Sheet and Cash Flow - As of June 30, 2025, FIVN had cash and cash equivalents of $635.88 million, down from $1.04 billion in the previous quarter, with total debt at $733.6 million [5] - Total capital expenditure for the second quarter was $17.22 million [6] Guidance - For 2025, Five9 expects revenues between $1.1435 billion and $1.1495 billion, indicating a year-over-year growth of 9.6% [7] - The company anticipates GAAP net income per share between 23 cents and 30 cents, and non-GAAP net income per share in the range of $2.86-$2.90 [8] - For Q3 2025, revenues are projected between $283.0 million and $286.0 million, with a year-over-year growth of 8.1% [9]

Five9 (FIVN) came out with quarterly earnings of $0.76 per share, beating the Zacks Consensus Estimate of $0.65 per share. This compares to earnings of $0.52 per share a year ago. These figures are adjusted for non-recurring items.This quarterly report represents an earnings surprise of +16.92%. A quarter ago, it was expected that this provider of cloud-based software to call centers would post earnings of $0.48 per share when it actually produced earnings of $0.62, delivering a surprise of +29.17%.Over the ...

Financial Data and Key Metrics Changes - The company reported a Q2 revenue growth of 12% year over year, primarily driven by subscription revenue growth accelerating to 16% year over year [29] - Adjusted EBITDA grew 63% year over year, reaching an all-time record margin of 24% in Q2 [7][33] - Non-GAAP EPS grew 45% year over year to $0.76 per diluted share [33] Business Line Data and Key Metrics Changes - Subscription revenue now makes up 81% of total revenue, with enterprise AI revenue growth accelerating to 42% year over year [6][30] - Enterprise AI bookings more than tripled year over year in Q2, contributing significantly to overall growth [7][20] - The highest quarterly total ACV bookings in two years were achieved, excluding a previous mega deal [20] Market Data and Key Metrics Changes - Strong momentum was observed in the healthcare sector, with two large healthcare customers extending contracts and significantly increasing their anticipated ARR [8][27] - The company saw significant traction with technology partners, including Salesforce and Google Cloud, leading to increased bookings and pipeline [15][16] Company Strategy and Development Direction - The company is focused on transforming its business to drive top-line growth and bottom-line profitability, with a strong emphasis on AI solutions [5][17] - The launch of new AI capabilities, such as AgenTik AI agents, is aimed at enhancing customer experience and operational efficiency [10][11] - The company is strategically deemphasizing telecom usage and professional services to focus on high-margin subscription revenue [30] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the future, citing strong pipeline and RFPs at elevated levels [22] - The company anticipates minimal seasonality for the remainder of the year, based on discussions with top seasonal customers [36] - There is a commitment to achieving the Rule of 40 plus by 2027, driven by double-digit revenue growth and continued margin expansion [37] Other Important Information - The CEO announced retirement plans, with a search for a successor underway [4][5] - Brian Lee was appointed as the new CFO, with additional changes in the leadership team to enhance operational efficiency [18] Q&A Session All Questions and Answers Question: Sustainability of AI business growth - Management highlighted that enterprise AI bookings for net new logos doubled year over year, and installed base bookings quadrupled, indicating strong momentum and sustainability [42] Question: Deal elongation and international market momentum - Management noted that there was no significant elongation in deals this quarter, and strong growth was observed through international partners [47] Question: AI readiness across customer base - Management indicated that while many customers are ready to scale AI, a common hurdle is ensuring their data is in order to maximize AI deployment [81] Question: AI capabilities and competition - The company aims to be the best in AI for customer experience, focusing on deepening its capabilities rather than broadening into unrelated areas [76] Question: Vertical performance and AI adoption - Financial services, healthcare, and retail are identified as top verticals for AI adoption, with these sectors having better data readiness [88]

Q2 2025 Performance Highlights - Total revenue grew by 12% year-over-year[6] - Subscription revenue increased by 16% year-over-year[6] - Subscription revenue accounted for 81% of total revenue[6] - Adjusted EBITDA margin reached an all-time high of 24%, with a 63% year-over-year dollar growth[6] - The company achieved a 108% LTM DBRR (Dollar Based Retention Rate)[6] AI Metrics and Innovation - Enterprise AI revenue experienced a 42% year-over-year growth[7] - AI contributed to 10% of Enterprise Subscription Revenue[7] - AI represented over 20% of Enterprise New Logo ACV Bookings[7] - Enterprise AI bookings grew by over 3x year-over-year[7] Customer Success with AI - One healthcare customer increased Five9 ARR by approximately 40%, exceeding $11 million after extending their contract to a 5-year term[8] - An airline customer more than doubled their Five9 ARR, reaching over $7 million by expanding their AI portfolio[8] Guidance - The company projects Q3 2025 revenue between $283 million and $286 million[37] - The company anticipates full-year 2025 revenue between $11435 billion and $11495 billion[37]

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2025 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File Number: 001-36383 Five9, Inc. (Exact Name of Registrant as Specified in Its Charter) | Large accelerated filer | ☒ | Accel ...

Exhibit 99.1 Five9 Reports Record Revenue of $283 Million for the Second Quarter 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: Q2 Enterprise AI Revenue Growth Accelerated to 4 ...