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].

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]

Financial Performance - Five9 reported quarterly earnings of $0.76 per share, exceeding the Zacks Consensus Estimate of $0.65 per share, and up from $0.52 per share a year ago, representing an earnings surprise of +16.92% [1] - The company posted revenues of $283.27 million for the quarter ended June 2025, surpassing the Zacks Consensus Estimate by 2.98%, compared to year-ago revenues of $252.09 million [2] Earnings Outlook - The current consensus EPS estimate for the coming quarter is $0.70 on revenues of $285.51 million, and for the current fiscal year, it is $2.76 on revenues of $1.14 billion [7] - The estimate revisions trend for Five9 was mixed ahead of the earnings release, resulting in a Zacks Rank 3 (Hold) for the stock, indicating expected performance in line with the market [6] Industry Context - The Internet - Software industry, to which Five9 belongs, is currently in the top 30% of over 250 Zacks industries, suggesting a favorable outlook compared to the bottom 50% [8] - Empirical research indicates a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can be tracked by investors [5]