Group 1 - The analyst has not reviewed Five9, Inc. (NASDAQ: FIVN) since January and previously did not find the stock to represent good value [1] - The analyst has a background in petroleum and gas engineering but transitioned to finance, focusing on tech, infrastructure, and internet services [1] - The analyst aims to share investment ideas and connect with long-term investors, emphasizing the importance of strong fundamentals and potential [1] Group 2 - No stock or derivative positions are held by the analyst in any mentioned companies, nor are there plans to initiate such positions in the near future [2] - The article reflects the analyst's personal opinions and is not influenced by compensation from any company [2] - Seeking Alpha clarifies that past performance does not guarantee future results and that the views expressed may not represent the platform as a whole [3]

Group 1 - Five9 has been recognized as a Leader in the inaugural IDC MarketScape: European Contact Center as a Service 2025 Vendor Assessment [1] - This recognition highlights Five9's strengths in supporting European enterprises with complex requirements for data protection, sovereignty, and compliance [1] - The company is noted for its capabilities in modernizing omni-channel customer experience [1]

Core Insights - Three stocks with strong growth characteristics and buy ranks are highlighted for investors: Montrose Environmental Group, Fox, and Five9 [1][2][3] Group 1: Montrose Environmental Group (MEG) - Montrose Environmental Group provides environmental services primarily in the United States [1] - The company has a Zacks Rank of 1 (Strong Buy) [1] - The Zacks Consensus Estimate for its current year earnings has increased by 8.9% over the last 60 days [1] - Montrose has a PEG ratio of 1.12, significantly lower than the industry average of 4.86 [2] - The company possesses a Growth Score of A [2] Group 2: Fox (FOX) - Fox produces and distributes news, sports, and entertainment content [2] - The company also carries a Zacks Rank of 1 (Strong Buy) [2] - The Zacks Consensus Estimate for its current year earnings has increased by 5.5% over the last 60 days [2] - Fox has a PEG ratio of 1.26 compared to the industry average of 2.44 [2] - The company possesses a Growth Score of B [2] Group 3: Five9 (FIVN) - Five9 offers software products including workforce management, speech recognition, predictive dialer, and voice applications [3] - The company holds a Zacks Rank of 1 (Strong Buy) [3] - The Zacks Consensus Estimate for its current year earnings has increased by 0.4% over the last 60 days [3] - Five9 has a PEG ratio of 0.53, which is lower than the industry average of 0.62 [3] - The company possesses a Growth Score of B [3]

Group 1 - Five9 Inc. is considered one of the most undervalued technology stocks according to analysts [1] - The company announced the appointment of Sudhakar Ramakrishna to its Board of Directors, effective September 26, and the retirement of Lead Independent Director David Welsh after over 14 years of service [1][3] - Ramakrishna has approximately 25 years of technology leadership experience and is currently the CEO of SolarWinds Corporation, where he has led significant transformations in technology and cybersecurity [2][3] Group 2 - Five9 provides intelligent cloud software for contact centers, offering a CX platform that supports customer service, sales, and marketing functions [4] - Ramakrishna's expertise in enterprise software, cybersecurity, and IT infrastructure is expected to benefit Five9, particularly in scaling secure, AI-driven platforms [3]

Core Insights - Five9 Inc. has launched Five9 Fusion for ServiceNow, an AI-powered solution aimed at enhancing customer service experiences through unified voice and digital interactions [1][2]. Group 1: Product Launch and Features - Five9 Fusion integrates voice and digital interactions via an AI transcription stream, featuring a single routing engine to improve customer service delivery [2]. - The solution combines Five9's real-time system actions with ServiceNow's Customer Service Management (CSM), creating a unified AI-powered platform for businesses [2][4]. - The integration reduces expenses and provides end-to-end visibility across the customer journey, equipping agents with instant context and tools for quicker issue resolution [3]. Group 2: Benefits and Impact - Five9 Fusion aims to eliminate the friction of using multiple systems, empowering agents with a single interface for more efficient and personalized interactions [4]. - The integration enhances the customer experience by making every touchpoint more intuitive and impactful for both customers and agents [4]. - Five9's use of Generative AI in its cloud contact center platform aims to deliver more human-like and efficient customer interactions through its Genius AI Suite [4].

Core Viewpoint - Five9 Inc. is classified as a Zombie Stock due to its high cash burn, lack of profitability, and declining revenue growth, despite recent revenue increases driven by enterprise AI [3][4][6][8]. Financial Performance - Five9's subscription revenue grew 16% year-over-year (YoY) in 2Q25, primarily due to a 42% increase in enterprise AI revenue [4]. - Total revenue increased by 12% YoY in 2Q25, and management raised its full-year 2025 revenue guidance to 10% YoY [4]. - The company has not generated annual profits since 2019 and has a negative free cash flow (FCF) [4][10]. Cash Position and Burn Rate - Five9's cash on hand decreased from $1.1 billion in the TTM ended 2Q24 to $636 million in the TTM ended 2Q25, indicating a significant cash burn [7]. - The company has burned through a cumulative $1.1 billion in FCF since 2017, with a TTM cash burn of -$299 million [11][10]. Profitability and Valuation - Five9 is the least profitable company in its industry, with a negative net operating profit after tax (NOPAT) of -$5 million in the TTM [15][17]. - To justify its current stock price of $26/share, Five9 would need to achieve $8.5 billion in revenue by 2034, which is nearly 8 times its TTM revenue [20]. - If revenue grows at consensus and industry forecast rates, the stock could be worth just $6/share today, indicating a 77% downside [22]. Competitive Landscape - Competitors like Microsoft and Nice Ltd. maintain competitive advantages by offering full-service solutions, while Five9 remains focused on niche offerings [18]. - Analysts expect Five9's revenue growth to lag behind the projected 22% compounded annual growth rate of the cloud-based contact center market from 2025 to 2034 [14].

Core Insights - Five9 has been recognized as a Leader in the Magic Quadrant for Contact Center as a Service (CCaaS) by Gartner for the eighth time, highlighting its Completeness of Vision and Ability to Execute [1] Company Performance - The recognition by Gartner reflects Five9's consistent innovation and trusted expertise in the industry [1] - The company's proven ability to deliver exceptional customer service is emphasized through this accolade [1]

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]

Core Insights - Five9 Inc. reported strong second-quarter 2025 results with adjusted earnings of $0.76 per share, exceeding estimates by 16.9% and showing a year-over-year increase of 46.2. Quarterly revenues reached a record $283.27 million, up 12.4% year over year, and beating estimates by 3% [1][10]. Financial Performance - Subscription revenues grew by 16% year over year, driven by a significant increase in Enterprise AI revenues, which rose by 42% year over year [2][10]. - Five9 achieved a 24% adjusted EBITDA margin and generated $21.6 million in free cash flow in the second quarter, indicating strong operational efficiency [7]. Product and Technology - The company offers a virtual contact center cloud platform that includes applications for customer service, sales, and marketing functions [3]. - Five9's platform features interactive virtual agents, agent assistance, workflow automation, and AI insights, optimizing customer interactions across various channels [4]. Strategic Partnerships - Strategic partnerships with major companies like Salesforce, Microsoft, ServiceNow, Verint Systems, and Alphabet have enhanced Five9's AI tool development and platform integration, contributing to client acquisition and retention [6]. Future Guidance - For Q3 2025, Five9 forecasts revenues between $283.0 million and $286.0 million, with adjusted EPS projected between $0.72 and $0.74, indicating year-over-year growth of 4.5% [8]. - For fiscal 2025, the revenue forecast is between $1.1435 billion and $1.1495 billion, reflecting a year-over-year growth of 9.8% [9]. Valuation Metrics - Five9 is currently trading at a forward P/E of 8.73X, significantly lower than the industry average of 27.50X and the S&P 500's 19.29X [10]. - The company has a price/sale ratio of 1.67X and a price/book ratio of 2.58X, both below industry averages, indicating an attractive valuation [10]. Market Outlook - Despite a year-to-date stock price decline of 40.3%, brokerage firms project a short-term price target increase of 51.2% from the last closing price of $24.28, suggesting a favorable risk-reward ratio [14][15].