Five9 (FIVN) Q2 Revenue Jumps 12%

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]