[Q2 2025 Earnings Highlights](index=1&type=section&id=Q2%202025%20Earnings%20Highlights) [Key Performance Indicators](index=1&type=section&id=Key%20Performance%20Indicators) Five9 reported record revenue of $283 million for Q2 2025, marking a 12% year-over-year increase. Enterprise AI revenue growth accelerated significantly to 42% year-over-year, now constituting 10% of Enterprise subscription revenue. The company also achieved a record operating cash flow of $35 million and an all-time high Adjusted EBITDA margin of 24% - Five9 reported record revenue of **$283 million** for the second quarter of 2025[1](index=1&type=chunk) - Enterprise AI revenue growth accelerated to **42% year-over-year** in Q2 2025, representing **10% of Enterprise subscription revenue**[1](index=1&type=chunk)[3](index=3&type=chunk) - Q2 2025 saw a record operating cash flow of **$35 million**[1](index=1&type=chunk)[3](index=3&type=chunk) - Adjusted EBITDA margin increased to a record **24%** in Q2 2025[3](index=3&type=chunk) [CEO Commentary](index=1&type=section&id=CEO%20Commentary) CEO Mike Burkland expressed satisfaction with strong Q2 results, highlighting accelerated subscription revenue growth (16% YoY) driven by Enterprise AI. He noted strong sales execution with Enterprise AI bookings more than tripling YoY and emphasized the meaningful benefits customers are realizing from the Genius AI suite, including new Agentic AI Agents and AI Trust & Governance - Subscription revenue accelerated to **16% year-over-year growth**[3](index=3&type=chunk) - Enterprise AI bookings more than **tripled year-over-year** in Q2[3](index=3&type=chunk) - Customers are benefiting from the Genius AI suite, with recent launches including Agentic AI Agents and AI Trust & Governance[5](index=5&type=chunk) [Second Quarter 2025 Financial Results Overview](index=1&type=section&id=Second%20Quarter%202025%20Financial%20Results%20Overview) [Key Financial Metrics](index=1&type=section&id=Key%20Financial%20Metrics) Five9's second quarter 2025 financial performance showed significant improvements across key metrics compared to Q2 2024, including revenue growth, increased gross margins, and a shift from GAAP net loss to net income. Non-GAAP profitability also saw substantial gains | Metric | Q2 2025 | Q2 2024 | YoY Change | YoY % Change | | :-------------------------------- | :---------- | :---------- | :--------- | :----------- | | Revenue | $283.3 million | $252.1 million | $31.2 million | 12% | | GAAP Gross Margin | 54.9% | 53.0% | 1.9% | - | | Adjusted Gross Margin | 63.0% | 60.5% | 2.5% | - | | GAAP Net Income (Loss) | $1.2 million | $(12.8) million | $14.0 million | - | | GAAP EPS (Diluted) | $0.01 | $(0.17) | $0.18 | - | | Non-GAAP Net Income | $58.3 million | $38.9 million | $19.4 million | 49.9% | | Non-GAAP EPS (Diluted) | $0.76 | $0.52 | $0.24 | 46.2% | | Adjusted EBITDA | $67.9 million | $41.8 million | $26.1 million | 62.4% | | Adjusted EBITDA as % of Revenue | 24.0% | 16.6% | 7.4% | - | | GAAP Operating Cash Flow | $35.1 million | $19.9 million | $15.2 million | 76.4% | [Business Outlook and Guidance](index=2&type=section&id=Business%20Outlook%20and%20Guidance) [Full Year 2025 Financial Guidance](index=2&type=section&id=Full%20Year%202025%20Financial%20Guidance) Five9 provided guidance for the full year 2025, projecting revenue between $1.1435 billion and $1.1495 billion, GAAP net income per share between $0.23 and $0.30, and non-GAAP net income per share between $2.86 and $2.90 | Metric | Low | High | | :-------------------------- | :------------------- | :------------------- | | Revenue | $1.1435 billion | $1.1495 billion | | GAAP Net Income per Share | $0.23 | $0.30 | | Non-GAAP Net Income per Share | $2.86 | $2.90 | [Third Quarter 2025 Financial Guidance](index=2&type=section&id=Third%20Quarter%202025%20Financial%20Guidance) For the third quarter of 2025, Five9 expects revenue to be in the range of $283.0 million to $286.0 million, with GAAP net income per share between $0.06 and $0.12, and non-GAAP net income per share between $0.72 and $0.74 | Metric | Low | High | | :-------------------------- | :------------------- | :------------------- | | Revenue | $283.0 million | $286.0 million | | GAAP Net Income per Share | $0.06 | $0.12 | | Non-GAAP Net Income per Share | $0.72 | $0.74 | [Corporate News](index=2&type=section&id=Corporate%20News) [Chief Financial Officer Appointment](index=2&type=section&id=Chief%20Financial%20Officer%20Appointment) Five9 announced the official appointment of Bryan Lee as Chief Financial Officer, effective July 31, 2025. Lee, who previously served as interim CFO and Executive Vice President of Finance and Treasurer, will lead global financial operations, including financial planning and analysis, accounting, procurement, treasury, and investor relations - Bryan Lee has been appointed Chief Financial Officer, effective **July 31, 2025**[9](index=9&type=chunk) - Lee previously served as interim CFO and Executive Vice President of Finance and Treasurer since joining Five9 in **2014**[10](index=10&type=chunk)[12](index=12&type=chunk) - As CFO, Lee will oversee Five9's global financial operations, including financial planning and analysis, accounting, procurement, treasury, and investor relations[13](index=13&type=chunk) [Conference Call Information](index=3&type=section&id=Conference%20Call%20Information) [Conference Call Details](index=3&type=section&id=Conference%20Call%20Details) Five9 will host a Zoom webinar on July 31, 2025, at 4:30 p.m. Eastern Time to discuss its second quarter 2025 results. A live webcast and replay will be available on the Investor Relations section of the company's website - Five9 will discuss Q2 2025 results via Zoom webinar on **July 31, 2025, at 4:30 p.m. Eastern Time**[14](index=14&type=chunk) - A live webcast and replay will be accessible on the Investor Relations section of Five9's website[15](index=15&type=chunk) [Non-GAAP Financial Measures Explanation](index=3&type=section&id=Non-GAAP%20Financial%20Measures%20Explanation) [Definition and Rationale](index=3&type=section&id=Definition%20and%20Rationale) Five9 utilizes non-GAAP financial measures such as adjusted gross profit, adjusted EBITDA, non-GAAP operating income, and non-GAAP net income to provide a clearer view of its core operating performance. These measures exclude items like stock-based compensation, depreciation, amortization, and acquisition-related costs, which management uses for budgeting and performance evaluation, and are considered useful supplemental information for investors - Non-GAAP financial measures include adjusted gross profit, adjusted EBITDA, non-GAAP operating income, and non-GAAP net income[16](index=16&type=chunk) - Adjustments typically add back or remove items such as depreciation, intangibles amortization, stock-based compensation, acquisition costs, lease amortization, and costs related to reduction in force plans[16](index=16&type=chunk) - These non-GAAP measures are used by management to illustrate underlying business trends, establish budgets, and evaluate performance, and are considered useful supplemental information for investors[17](index=17&type=chunk) [Forward-Looking Statements and Risk Factors](index=4&type=section&id=Forward-Looking%20Statements%20and%20Risk%20Factors) [Key Risks and Uncertainties](index=4&type=section&id=Key%20Risks%20and%20Uncertainties) The news release contains forward-looking statements subject to numerous risks and uncertainties. These include the impact of adverse economic conditions, challenges in attracting and retaining customers, potential service outages, the evolving role of AI in contact centers, competition, international operational risks, cybersecurity threats, and the ability to achieve or sustain profitability - Risks include the impact of adverse economic conditions, such as macroeconomic challenges, inflation, high interest rates, and geopolitical conflicts[18](index=18&type=chunk) - Challenges in attracting new customers, retaining existing ones, or selling additional services could harm revenue and gross margins[18](index=18&type=chunk) - The increasing role of AI solutions in contact centers presents risks if Five9 cannot replace subscription revenue with AI solution sales or if AI development is unsuccessful[18](index=18&type=chunk) - Other risks include managing technical operations, competition, international expansion, security breaches, acquisitions, long sales cycles for larger organizations, reliance on third-party service providers, and the ability to achieve or sustain profitability[18](index=18&type=chunk)[19](index=19&type=chunk) [Company Overview (About Five9)](index=5&type=section&id=Company%20Overview%20%28About%20Five9%29) [Company Description](index=5&type=section&id=Company%20Description) Five9, Inc. provides the Intelligent CX Platform, a cloud-native, multi-tenant, scalable, reliable, and secure suite of solutions for orchestrating customer experiences. Its offerings include contact center, omni-channel engagement, Workforce Engagement Management, extensive partner integrations, and embedded AI, automation, and journey analytics, serving over 3,000 organizations globally - Five9 offers the Intelligent CX Platform, a cloud-native, multi-tenant, scalable, reliable, and secure solution[20](index=20&type=chunk) - The platform includes contact center, omni-channel engagement, Workforce Engagement Management, and integrates with over **1,000 partners**[20](index=20&type=chunk) - Innovative and practical AI, automation, and journey analytics are embedded within the platform[20](index=20&type=chunk) - Five9 serves more than **3,000 organizations worldwide**[20](index=20&type=chunk) [Condensed Consolidated Financial Statements](index=6&type=section&id=Condensed%20Consolidated%20Financial%20Statements) [Condensed Consolidated Balance Sheets](index=6&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) The balance sheet shows a decrease in total assets from $2,051,214 thousand at December 31, 2024, to $1,704,860 thousand at June 30, 2025, primarily due to a reduction in cash, cash equivalents, and marketable investments. Total liabilities also decreased significantly, driven by the repayment of convertible senior notes | (In thousands) | June 30, 2025 | December 31, 2024 | | :------------------------------------ | :-------------- | :---------------- | | **ASSETS** | | | | Cash and cash equivalents | $205,479 | $362,546 | | Marketable investments | 430,397 | 643,410 | | Accounts receivable, net | 127,835 | 115,172 | | Total current assets | 894,194 | 1,248,568 | | Property and equipment, net | 154,499 | 144,888 | | Goodwill | 366,698 | 365,436 | | Total assets | $1,704,860 | $2,051,214 | | **LIABILITIES AND STOCKHOLDERS' EQUITY** | | | | Accounts payable | $31,063 | $26,282 | | Deferred revenue | 68,009 | 79,173 | | Convertible senior notes (current portion) | — | 433,490 | | Total current liabilities | 201,589 | 641,691 | | Convertible senior notes (non-current portion) | 733,620 | 731,855 | | Total liabilities | 987,483 | 1,429,022 | | Total stockholders' equity | 717,377 | 622,192 | | Total liabilities and stockholders' equity | $1,704,860 | $2,051,214 | [Condensed Consolidated Statements of Operations](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) For the three months ended June 30, 2025, Five9 reported a net income of $1,154 thousand, a significant improvement from a net loss of $(12,816) thousand in the prior year. Revenue increased by 12% year-over-year, and gross profit also saw a healthy rise. For the six months, the company moved from a net loss to a net income of $1,730 thousand | (In thousands, except per share data) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :------------------------------------ | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Revenue | $283,269 | $252,086 | $562,974 | $499,096 | | Cost of revenue | 127,865 | 118,414 | 253,838 | 232,944 | | Gross profit | 155,404 | 133,672 | 309,136 | 266,152 | | Total operating expenses | 156,965 | 153,037 | 316,125 | 306,212 | | Loss from operations | (1,561) | (19,365) | (6,989) | (40,060) | | Total other income (expense), net | 4,097 | 9,894 | 10,285 | 24,501 | | Income (loss) before income taxes | 2,536 | (9,471) | 3,296 | (15,559) | | Provision for income taxes | 1,382 | 3,345 | 1,566 | 4,334 | | Net income (loss) | $1,154 | $(12,816) | $1,730 | $(19,893) | | Net income (loss) per share: Basic | $0.02 | $(0.17) | $0.02 | $(0.27) | | Net income (loss) per share: Diluted | $0.01 | $(0.17) | $0.02 | $(0.27) | [Condensed Consolidated Statements of Cash Flows](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) For the six months ended June 30, 2025, net cash provided by operating activities increased to $83,445 thousand from $52,231 thousand in the prior year. Investing activities generated a net cash inflow of $191,063 thousand, a significant reversal from a net outflow in the previous year, primarily due to changes in marketable investment activities. Financing activities resulted in a net cash outflow of $(431,125) thousand, largely due to the repayment of convertible senior notes | (In thousands) | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :------------------------------------------ | :----------------------------- | :----------------------------- | | Net cash provided by operating activities | $83,445 | $52,231 | | Net cash used in (provided by) investing activities | $191,063 | $(360,103) | | Net cash (used in) provided by financing activities | $(431,125) | $340,412 | | Net (decrease) increase in cash, cash equivalents and restricted cash | $(156,617) | $32,540 | | Cash, cash equivalents and restricted cash: End of period | $207,568 | $177,382 | [Reconciliation of Non-GAAP Financial Measures](index=9&type=section&id=Reconciliation%20of%20Non-GAAP%20Financial%20Measures) [GAAP Gross Profit to Adjusted Gross Profit](index=9&type=section&id=GAAP%20Gross%20Profit%20to%20Adjusted%20Gross%20Profit) Five9's adjusted gross profit and margin for Q2 2025 significantly improved compared to Q2 2024, reflecting the impact of non-GAAP adjustments such as depreciation, intangibles amortization, stock-based compensation, and costs related to a reduction in force plan | (In thousands, except percentages) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | GAAP gross profit | $155,404 | $133,672 | $309,136 | $266,152 | | GAAP gross margin | 54.9% | 53.0% | 54.9% | 53.3% | | Non-GAAP adjustments | 23,141 | 10,937 | 39,524 | 21,471 | | Adjusted gross profit | $178,545 | $152,409 | $353,160 | $302,615 | | Adjusted gross margin | 63.0% | 60.5% | 62.7% | 60.6% | [GAAP Net Income (Loss) to Adjusted EBITDA](index=10&type=section&id=GAAP%20Net%20Income%20%28Loss%29%20to%20Adjusted%20EBITDA) Adjusted EBITDA for Q2 2025 reached $67,950 thousand, a substantial increase from $41,781 thousand in Q2 2024, with the Adjusted EBITDA margin rising to 24.0%. This improvement is driven by adjustments for depreciation, stock-based compensation, and various one-time costs | (In thousands, except percentages) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | GAAP net income (loss) | $1,154 | $(12,816) | $1,730 | $(19,893) | | Non-GAAP adjustments | 66,796 | 54,597 | 118,922 | 99,259 | | Adjusted EBITDA | $67,950 | $41,781 | $120,652 | $79,366 | | Adjusted EBITDA as % of revenue | 24.0% | 16.6% | 21.4% | 15.9% | [GAAP Operating Loss to Non-GAAP Operating Income](index=11&type=section&id=GAAP%20Operating%20Loss%20to%20Non-GAAP%20Operating%20Income) Five9 converted a GAAP operating loss of $(1,561) thousand in Q2 2025 to a non-GAAP operating income of $54,454 thousand, reflecting significant adjustments for stock-based compensation, intangibles amortization, and other operational costs | (In thousands) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Loss from operations | $(1,561) | $(19,365) | $(6,989) | $(40,060) | | Non-GAAP adjustments | 56,015 | 50,401 | 101,747 | 98,689 | | Non-GAAP operating income | $54,454 | $31,036 | $94,758 | $58,629 | [GAAP Net Income (Loss) to Non-GAAP Net Income](index=12&type=section&id=GAAP%20Net%20Income%20%28Loss%29%20to%20Non-GAAP%20Net%20Income) For Q2 2025, Five9 reported non-GAAP net income of $58,273 thousand, a substantial increase from $38,874 thousand in Q2 2024. This translates to a non-GAAP diluted EPS of $0.76, up from $0.52, after accounting for various non-GAAP adjustments | (In thousands, except per share data) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :------------------------------------ | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | GAAP net income (loss) | $1,154 | $(12,816) | $1,730 | $(19,893) | | Non-GAAP adjustments | 57,119 | 51,690 | 103,882 | 94,506 | | Non-GAAP net income | $58,273 | $38,874 | $105,612 | $74,613 | | Non-GAAP net income per share: Diluted | $0.76 | $0.52 | $1.37 | $1.00 | [Summary of Stock-Based Compensation, Depreciation and Intangibles Amortization](index=13&type=section&id=Summary%20of%20Stock-Based%20Compensation%2C%20Depreciation%20and%20Intangibles%20Amortization) This section provides a breakdown of stock-based compensation, depreciation, and intangibles amortization across different cost categories for both the three and six months ended June 30, 2025 and 2024 | (In thousands) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | | :-------------------------- | :------------------------------- | :------------------------------- | | **Stock-Based Compensation** | | | | Cost of revenue | $7,296 | $7,789 | | Research and development | 8,829 | 9,827 | | Sales and marketing | 13,355 | 13,824 | | General and administrative | 12,379 | 12,192 | | Total | $41,859 | $43,632 | | **Depreciation** | | | | Cost of revenue | $8,697 | $7,773 | | Research and development | 799 | 741 | | Sales and marketing | 27 | 26 | | General and administrative | 1,662 | 1,750 | | Total | $11,185 | $10,290 | | **Intangibles Amortization** | | | | Cost of revenue | $3,464 | $2,648 | | Total | $3,464 | $2,648 | | (In thousands) | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------------------- | :----------------------------- | :----------------------------- | | **Stock-Based Compensation** | | | | Cost of revenue | $14,480 | $15,392 | | Research and development | 17,519 | 20,757 | | Sales and marketing | 24,929 | 27,844 | | General and administrative | 24,176 | 24,323 | | Total | $81,104 | $88,316 | | **Depreciation** | | | | Cost of revenue | $16,480 | $14,738 | | Research and development | 1,479 | 1,631 | | Sales and marketing | 63 | 53 | | General and administrative | 3,553 | 3,403 | | Total | $21,575 | $19,825 | | **Intangibles Amortization** | | | | Cost of revenue | $7,564 | $5,296 | | Total | $7,564 | $5,296 | [GAAP Net Income to Non-GAAP Net Income – Guidance](index=14&type=section&id=GAAP%20Net%20Income%20to%20Non-GAAP%20Net%20Income%20%E2%80%93%20Guidance) Five9's guidance for Q3 and full year 2025 shows a significant difference between GAAP and non-GAAP net income, primarily due to adjustments for stock-based compensation, intangibles amortization, and other one-time costs. For the full year, non-GAAP net income is projected to be between $221,944 thousand and $225,052 thousand | (In thousands, except per share data) | Three Months Ending September 30, 2025 (Low) | Three Months Ending September 30, 2025 (High) | Year Ending December 31, 2025 (Low) | Year Ending December 31, 2025 (High) | | :------------------------------------ | :------------------------------------------- | :-------------------------------------------- | :---------------------------------- | :---------------------------------- | | GAAP net income | $5,515 | $10,077 | $20,238 | $26,346 | | Non-GAAP adjustments | 50,718 | 47,718 | 201,706 | 198,706 | | Non-GAAP net income | $56,233 | $57,795 | $221,944 | $225,052 | | Non-GAAP net income per share: Diluted | $0.72 | $0.74 | $2.86 | $2.90 | [Investor Relations Contacts](index=15&type=section&id=Investor%20Relations%20Contacts) [Contact Information](index=15&type=section&id=Contact%20Information) For investor relations inquiries, individuals can contact Bryan Lee, Chief Financial Officer of Five9, or Lisa Laukkanen from The Blueshirt Group - Bryan Lee, Chief Financial Officer, can be reached at **925-201-2000** or IR@five9.com[45](index=45&type=chunk) - Lisa Laukkanen of The Blueshirt Group can be contacted at **415-217-4967** or Lisa@blueshirtgroup.com[45](index=45&type=chunk)

Core Insights - Five9 (FIVN) is expected to report second-quarter 2025 results on July 31, with projected revenues between $274.5 million and $275.5 million, indicating a 9.1% year-over-year increase [1][8] - Non-GAAP earnings are anticipated to be in the range of 64-66 cents per share, reflecting a 25% year-over-year growth [2][8] - The company has consistently surpassed earnings estimates in the past four quarters, with an average surprise of 19.3% [2] Revenue and Earnings Expectations - The Zacks Consensus Estimate for FIVN's Q2 revenues is $275.1 million, suggesting a 9.1% increase from the previous year [8] - The consensus estimate for FIVN's Q2 EPS is 65 cents, indicating a 25% year-over-year growth [8] Factors Influencing Performance - Five9's Q2 performance is likely to benefit from strong enterprise AI revenues, which grew 32% year-over-year in the first quarter and accounted for 9% of enterprise subscription sales [3] - The company reported an 18.8% adjusted EBITDA margin and $35 million in free cash flow in the first quarter, providing a solid financial foundation for further investments [4] - Strategic partnerships with major companies like Salesforce, Microsoft, and Google are expected to enhance FIVN's growth by improving AI tool integration and client retention [5] Macroeconomic Considerations - Despite positive factors, macroeconomic challenges such as persistent inflation, high interest rates, and currency fluctuations may have impacted Five9's performance in the quarter [6] Earnings Model Insights - According to the Zacks model, Five9 has a Zacks Rank of 3 and an Earnings ESP of 0.00%, indicating a neutral outlook for earnings performance [7]

Core Insights - Bandwidth Inc. hosted a roundtable in London with European enterprise leaders to address the challenge of securing trust in AI-powered communications [1][4] - The event focused on compliance, fraud prevention, AI readiness, and regulatory uncertainty, highlighting the need for collaboration among industry leaders [3][4] Group 1: Event Overview - The roundtable was part of a series of customer insight sessions aimed at discussing industry pain points and developing new strategies [4] - Bandwidth's Chief Product Officer, John Bell, led the session and introduced the company's Trust Services strategy to combat communications fraud [4][5] Group 2: Industry Challenges - Participants shared concerns about various fraud schemes and the complexities of regulatory frameworks that hinder effective remediation [5] - Bandwidth presented its Trust Solutions framework, which includes onboarding, traffic management, anomaly detection, and remediation processes [5] Group 3: Customer Engagement - Customers expressed appreciation for Bandwidth's proactive approach in shaping public policies to enhance regulations while addressing communications fraud [6] - Feedback from the roundtable will inform Bandwidth's Trust Services API strategy and public policy objectives [6] Group 4: Company Background - Bandwidth is a global cloud communications software company that provides voice calling, text messaging, and emergency services across 65+ countries [8] - The company is recognized for its unique combination of composable APIs, AI capabilities, and extensive regulatory experience, serving major enterprises and SaaS builders [8]

Core Viewpoint - The research service "Asia Value & Moat Stocks" targets value investors looking for Asia-listed stocks that exhibit a significant disparity between market price and intrinsic value, focusing on deep value balance sheet bargains and wide moat stocks [1] Group 1: Investment Focus - The service emphasizes deep value balance sheet bargains, which include net cash stocks, net-nets, low price-to-book (P/B) stocks, and sum-of-the-parts discounts [1] - It also highlights wide moat stocks, which are characterized by strong earnings power at a discount, including high-quality businesses and "Magic Formula" stocks [1] Group 2: Market Emphasis - The primary focus of the investment ideas is on the Hong Kong market, providing a range of watch lists with monthly updates for investors [1]

Group 1 - Five9 (FIVN) has a Zacks Rank of 2 (Buy), indicating a positive earnings outlook, while Informatica Inc. (INFA) has a Zacks Rank of 3 (Hold) [3] - Value investors typically analyze traditional metrics such as P/E ratio, P/S ratio, earnings yield, and cash flow per share to identify undervalued stocks [4] - FIVN has a forward P/E ratio of 9.66 and a PEG ratio of 0.62, while INFA has a forward P/E of 20.90 and a PEG ratio of 2.75, suggesting FIVN is more attractively valued [5][6] Group 2 - FIVN's P/B ratio is 3.06, compared to INFA's P/B of 3.2, further indicating FIVN's relative valuation strength [6] - Based on the valuation metrics and improving earnings outlook, FIVN is considered the superior value option at this time [7]

Industry Overview - The Internet Software and Services sector is experiencing growth due to increased IT spending on solutions that support hybrid operating environments [1] - The Internet Software industry is ranked in the top 17% of Zacks Industry Rank, indicating an expectation to outperform the market in the next three to six months [2] Company Highlights UiPath Inc. (PATH) - UiPath offers an end-to-end automation platform with a range of robotic process automation solutions [6] - The platform includes AI, ML, and NLP capabilities, enhancing decision-making and information processing [7] - Expected revenue and earnings growth rates for the current year are 8.5% and 3.8%, respectively, with a 1.9% improvement in earnings estimates over the last week [8] Five9 Inc. (FIVN) - Five9 provides intelligent cloud software for contact centers, enabling a wide range of customer service functions [11] - The platform includes AI-driven features such as virtual agents and workflow automation, benefiting from the growing adoption of AI tools [13] - Expected revenue and earnings growth rates for the current year are 9.6% and 11.7%, respectively, with a 5.7% improvement in earnings estimates over the last 60 days [14] Fastly Inc. (FSLY) - Fastly offers infrastructure software for cloud computing, security, and edge computing solutions [15] - The Fastly AI Accelerator was introduced to optimize LLM generative AI applications [15] - Expected revenue and earnings growth rates for 2025 are 8.6% and 25%, respectively, with a 10% improvement in earnings estimates over the last week [17] Calix Inc. (CALX) - Calix provides cloud and software platforms for broadband service providers [18] - The company has integrated AI into its platforms to enhance operations and service delivery [20] - Expected revenue and earnings growth rates for 2025 are 7.1% and 65.4%, respectively, with a 21.1% improvement in earnings estimates over the last 60 days [20] Confluent Inc. (CFLT) - Confluent operates a data streaming platform that allows real-time data streaming for various industries [21][22] - Expected revenue and earnings growth rates for the current year are 19% and 24.1%, respectively, with a 2.9% improvement in earnings estimates over the last 60 days [23]

Summary of Five9 Conference Call Company Overview - **Company**: Five9 - **Industry**: Contact Center as a Service (CCaaS) - **Market Size**: $24 billion core CCaaS market, with AI as an additional Total Addressable Market (TAM) opportunity [10][12] Key Points Market Position and Growth - Five9 is a $1 billion company with mid-teen revenue growth, primarily targeting large enterprises [3][4] - Over 50% of recurring revenue comes from customers generating $1 million or more in Annual Recurring Revenue (ARR) [4] - AI now constitutes 9% of subscription revenue, growing at 32% year-over-year [5] AI Integration and Impact - AI is seen as an additive opportunity, enhancing customer experience and expanding TAM [6][12] - The company emphasizes that AI will not replace a significant portion of human agents, with estimates suggesting only 5-10% of interactions may be handled by AI over time [11][22] - Five9's AI solutions include self-service AI agents, Agent Assist, and post-interaction automation [25][26] Competitive Landscape - Five9 is positioned as a pure cloud SaaS company, unlike competitors with legacy systems [52] - The company highlights its reliability, scalability, and customer-centric approach as key differentiators [53][54] Customer Readiness and Market Dynamics - Customers are increasingly prepared to adopt AI, with many having dedicated AI teams or committees [39] - The company has focused on delivering tangible ROI and practical use cases for AI deployment [40] Pricing Strategy - AI products are primarily offered on a consumption-based pricing model, allowing for predictable costs [45][46] - Customers are using AI to optimize labor costs, often maintaining or slightly reducing human agent counts while enhancing service quality [49][51] Future Outlook - Five9 anticipates continued growth in the CCaaS market, with a stable macro environment despite some international tariff concerns [64][66] - The company maintains an annual guidance of $1.14 billion, reflecting a 10% year-over-year growth target [64] Additional Insights - Five9 has made strategic acquisitions to enhance its AI capabilities, including Inference and Wendu [26][27] - The company is actively partnering with major platforms like Salesforce to integrate AI solutions effectively [29][43] - Five9's focus on customer experience and support is a critical aspect of its strategy, aiming to differentiate itself in a competitive market [54][55]

Market Overview - The AI-driven bull run of 2023 and 2024 has faced significant challenges in 2025 due to the Fed's uncertainty regarding rate cuts, recession fears, and competition from low-cost Chinese AI platforms [1] - Concerns over the Trump administration's tariff and trade policies have negatively impacted investor confidence in risky assets, particularly in the technology sector [2] Company Analysis: Arista Networks Inc. (ANET) - Arista Networks is positioned well with a robust network architecture for cloud and AI networking, focusing on proactive products, zero-touch automation, and predictive operations [6] - The company's EOS Smart AI Suite and Arista AVA enhance AI job monitoring and network security, catering to the growing demand for high-performance switching products [7][8] - ANET has an expected revenue growth rate of 18.7% and earnings growth rate of 12.8% for the current year, with a 4% improvement in earnings estimates over the last 30 days [9] - The average price target for ANET indicates a potential increase of 19.3% from the last closing price of $92.79, with a maximum upside of 40.1% [10] Company Analysis: Five9 Inc. (FIVN) - Five9 offers intelligent cloud software for contact centers, providing a comprehensive platform for customer service and sales functions [11] - The company has seen growth from the adoption of AI tools in call center services, with the introduction of its Intelligent CX Platform powered by Five9 Genius AI [13] - FIVN has an expected revenue growth rate of 9.6% and earnings growth rate of 11.7% for the current year, with a 6.6% improvement in earnings estimates over the last 30 days [14] - The average price target for FIVN suggests a potential increase of 35% from the last closing price of $27.11, indicating a maximum upside of 139.8% [15] Company Analysis: HubSpot Inc. (HUBS) - HubSpot provides a cloud-based CRM platform, experiencing steady adoption from enterprise customers and benefiting from pricing optimization [16] - The integration of HubSpot AI features is enhancing customer value, with a focus on lowering barriers for new customers [17] - HUBS has an expected revenue growth rate of 15.4% and earnings growth rate of 14.9% for the current year, with a 2.1% improvement in earnings estimates over the last 30 days [18] - The average price target for HUBS indicates a potential increase of 23.9% from the last closing price of $616.92, with a maximum upside of 50.7% [19]

Core Insights - The article compares Five9 (FIVN) and Adyen N.V. Unsponsored ADR (ADYEY) to determine which stock is more attractive to value investors [1] Group 1: Zacks Rank and Earnings Outlook - Both Five9 and Adyen currently hold a Zacks Rank of 2 (Buy), indicating positive earnings estimate revisions for both companies [3] - This suggests that investors can be confident in the improving earnings outlook for both stocks [3] Group 2: Valuation Metrics - Five9 has a forward P/E ratio of 9.96, while Adyen has a significantly higher forward P/E of 46.63 [5] - Five9's PEG ratio is 0.64, indicating a more favorable valuation compared to Adyen's PEG ratio of 2.23 [5] - Five9's P/B ratio stands at 3.15, contrasting with Adyen's P/B ratio of 14.79 [6] - Based on these valuation metrics, Five9 holds a Value grade of B, whereas Adyen has a Value grade of F [6] Group 3: Investment Conclusion - Despite both companies having solid earnings outlooks, Five9 is considered the superior value option based on the discussed valuation figures [7]

Core Viewpoint - Five9 has experienced a significant decline in share price, losing 36.1% over the past six months, underperforming both the broader technology sector and its peers [1][2] Financial Performance - For Q2 2025, Five9 expects total revenues between $274.5 million and $275.5 million, with a consensus estimate of $275.07 million, indicating a year-over-year growth of 9.11% [8] - Non-GAAP earnings for Q2 2025 are projected to be between 64 and 66 cents per share, with a consensus of 65 cents, reflecting a 25% increase from the previous year [8] - For the full year 2025, Five9 anticipates revenues of $1.140 billion to $1.144 billion, with a consensus estimate of $1.14 billion, implying a year-over-year rise of 9.57% [9] - Non-GAAP earnings for 2025 are expected to be between $2.74 and $2.78 per share, with a consensus of $2.76, indicating an 11.74% year-over-year increase [9] - Five9 has consistently beaten earnings estimates in the past four quarters, with an average earnings surprise of 19.26% [9] Business Strategy and Growth Drivers - Five9's decline in share price is attributed to prolonged enterprise sales cycles and macroeconomic uncertainty affecting customer spending [2] - Despite these challenges, Five9's first-quarter results indicate resilience, driven by growing demand for its AI-powered solutions, particularly the Genius AI suite [3] - The company is focusing on recurring subscription revenues, ongoing platform innovation, and strategic partnerships to capture future enterprise demand [3][10] - Recent product launches, such as Five9 Fusion for Salesforce, enhance agent productivity and customer engagement through seamless integration [5][6] - Strategic partnerships with Salesforce and Microsoft are pivotal in advancing Five9's mission to deliver an AI-powered agent experience [6][7] Market Position and Outlook - Five9's strong AI-driven subscription revenues and expanding ecosystem through key partnerships highlight its growth momentum [10] - The company's guidance reflects management's confidence in its implementation and long-term value creation [10] - Five9 currently holds a Zacks Rank 2 (Buy), suggesting that investors should consider accumulating the stock [11]