Five9(US:FIVN)2024-05-02 20:11Revenue and Growth - Revenue increased to $247.0 million for the three months ended March 31, 2024, up from $218.4 million for the same period in 2023, representing a growth of approximately 13.5%[127] - Subscription and related usage fees accounted for 93% of total revenue for the three months ended March 31, 2024, compared to 92% for the same period in 2023[122] - Revenue for the three months ended March 31, 2024, was $247,010,000, representing a 13% increase from $218,439,000 in the same period of 2023[147] Profitability and Loss - The net loss for the three months ended March 31, 2024, was $7.1 million, significantly improved from a net loss of $27.2 million for the same period in 2023[127] - The net loss for the three months ended March 31, 2024, was $7,410,000, or 3% of revenue, compared to a net loss of $26,195,000, or 12% of revenue, in the same period of 2023[146] - Adjusted EBITDA for the three months ended March 31, 2024, was $37.6 million, compared to $35.1 million for the same period in 2023, indicating a year-over-year increase of approximately 7%[134] Expenses - Cost of revenue increased to $114,530,000 for the three months ended March 31, 2024, up 9% from $104,756,000 in the same period of 2023, with a decrease in cost of revenue as a percentage of revenue from 48% to 46%[148] - Gross profit for the three months ended March 31, 2024, was $132,480,000, a 17% increase from $113,683,000 in the same period of 2023, with gross margin improving from 52% to 54%[149] - Research and development expenses increased to $41,518,000, a 9% rise from $38,108,000 in the same period of 2023, maintaining 17% of revenue[150] - Sales and marketing expenses rose to $81,109,000, a 6% increase from $76,314,000 in the same period of 2023, accounting for 33% of revenue[152] - General and administrative expenses increased to $30,548,000, an 8% rise from $28,258,000 in the same period of 2023, representing 12% of revenue[153] Client and Market Dynamics - The company has over 3,000 clients across multiple industries, with no single client accounting for more than 10% of total revenue for the periods presented[127] - The company offers a SaaS business model with recurring subscriptions, allowing clients to adjust the number of agent seats based on their contact center volume needs[122] Future Outlook and Challenges - The Annual Dollar-Based Retention Rate decreased to 109% for the twelve months ended March 31, 2024, down from 114% for the same period in 2023, primarily due to macroeconomic headwinds[131] - Macroeconomic factors, including inflation and geopolitical conflicts, are expected to adversely impact revenue in future periods[125] Cash Flow and Capital Management - Net cash provided by operating activities was $32.4 million for the three months ended March 31, 2024, compared to $33.4 million for the same period in 2023, reflecting a decrease of 3%[165][166] - Net cash used in investing activities was $(266.8) million in Q1 2024, significantly higher than $(75.7) million in Q1 2023, primarily due to increased purchases of marketable investments[167][168] - Net cash provided by financing activities was $331.4 million in Q1 2024, a substantial increase from $3.1 million in Q1 2023, driven by proceeds from the issuance of convertible senior notes[169][170] - As of March 31, 2024, the company had $1,105.8 million in working capital, including $240.2 million in cash and cash equivalents[157] - The company plans to enter into a potential revolving credit facility of up to $200 million in the second half of 2024 to support general corporate purposes and potential acquisitions[159] Financial Instruments and Risk Management - The aggregate principal amount outstanding of the company's 2025 and 2029 convertible senior notes was $1,181.9 million as of March 31, 2024[187] - The company’s investment policy focuses on capital preservation and liquidity needs, investing primarily in highly rated securities[186] - The fair value of the convertible senior notes is subject to interest rate risk and market risk due to their conversion features[187] - The company does not invest in financial instruments for trading or speculative purposes[186] - The company’s sales are primarily denominated in U.S. dollars, reducing direct exposure to foreign currency risk[189] - A hypothetical 10% change in foreign currency exchange rates could have a maximum impact of $2.3 million on the company's operating expenses during Q1 2024[190] - The company has not entered into any hedging arrangements with respect to foreign currency risk or other derivative financial instruments[190] Internal Controls and Reporting - There was no change in the company's internal control over financial reporting that materially affected its effectiveness during the three months ended March 31, 2024[194] - The company's disclosure controls and procedures were effective as of March 31, 2024, ensuring timely reporting of required information[192]