Five9 Q4 Earnings Surpass Expectations, Revenues Rise Y/Y

Core Insights - Five9, Inc. (FIVN) reported fourth-quarter 2025 earnings of 80 cents per share, exceeding the Zacks Consensus Estimate by 1.3% and showing a 1.3% increase from the previous year's 79 cents [1][9] - The company's fourth-quarter revenues rose 8% year over year to $300.3 million, also surpassing the Zacks Consensus Estimate by 0.9%, driven by a 12% increase in subscription revenues due to strong Enterprise AI traction [2][9] Financial Performance - FIVN's adjusted non-GAAP gross profit for Q4 was $189.47 million, up from $176.85 million in the same quarter last year, with a gross margin of 63.1%, down 40 basis points year over year [3] - Non-GAAP operating income increased to $61.62 million from $49.52 million year over year, resulting in a non-GAAP operating margin of 20.5%, up from 17.8% [4] - General & administrative expenses on a non-GAAP basis rose to $18.2 million, accounting for 6.1% of revenues, down from 6.4% in the previous year [4] - Research & development expenditures decreased to $26.2 million, representing 8.7% of revenues, down from 11.5% [5] - Non-GAAP sales & marketing costs increased to $67.7 million, maintaining 22.6% of revenues, consistent with the prior year [5] Balance Sheet & Cash Flow - At the end of the quarter, FIVN had cash and cash equivalents of $696.92 million, up from $676.2 million in the previous quarter [6] - The company generated an operating cash flow of $83.6 million and reported a free cash flow of $67.3 million, with a free cash flow margin of 22% [6] Guidance - For 2026, Five9 expects revenues to be between $1.247 billion and $1.261 billion, with the Zacks Consensus Estimate at $1.26 billion, indicating a year-over-year growth of 9.6% [7] - GAAP net income per share is projected to be between 86 cents and 95 cents, while non-GAAP net income per share is expected to range from $3.15 to $3.21, with the Zacks Consensus Estimate at $3.19, reflecting an 8.3% year-over-year growth [8] - For Q1 of fiscal 2026, revenues are forecasted to be between $296.5 million and $302.5 million, with the Zacks Consensus Estimate at $299.3 million, indicating a 7% year-over-year growth [10] - GAAP net income per share for Q1 is projected to be between 10 cents and 17 cents, while non-GAAP net income per share is expected to be between 66 cents and 70 cents, with the Zacks Consensus Estimate at 67 cents, indicating an 8.1% year-over-year growth [11]