Five9 (NasdaqGM:FIVN) Q3 2025 Earnings Call November 06, 2025 04:30 PM ET Speaker0Thank you for joining us today. Certain statements made during the course of this conference call that are not historical facts, including those regarding the future financial performance and cash position of the company, expected improvements in financial and related metrics, expected ARR from certain customers, certain expected revenue mix shifts, expectations regarding seasonality, customer growth, anticipated customer bene ...

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].