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Share Name | Share Symbol | Market | Type |
---|---|---|---|
Five9 Inc | NASDAQ:FIVN | NASDAQ | Common Stock |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
-0.56 | -1.28% | 43.05 | 42.48 | 46.00 | 43.72 | 42.455 | 43.09 | 1,276,077 | 01:00:00 |
13% Year-Over-Year Growth in Total Revenue
20% Year-Over-Year Growth in Subscription Revenue
GAAP Operating Cash Flow of $32.4 Million
Five9, Inc. (NASDAQ:FIVN), the Intelligent CX Platform provider, today reported results for the first quarter ended March 31, 2024.
First Quarter 2024 Financial Results
“We are pleased to report strong first quarter results with subscription revenue growing 20% year-over-year and adjusted EBITDA margin of 15%, helping drive robust LTM operating cash flow of $128 million. Five9 is changing the game for many of the largest brands in the world as we help them reimagine CX with our AI-infused data-centric platform combined with our passionate experts. We are also very excited to share that we signed our largest deal ever, a Fortune 50 financial services company, which is a testament to our continuing success in marching up-market. The market remains massive and underpenetrated, we believe we are a clear market leader, and we see a long runway ahead for durable growth.”
- Mike Burkland, Chairman and CEO, Five9
Business Outlook
Five9 provides guidance based on current market conditions and expectations. Five9 emphasizes that the guidance is subject to various important cautionary factors referenced in the section entitled "Forward-Looking Statements" below, including risks and uncertainties associated with the ongoing macroeconomic conditions.
With respect to Five9’s guidance as provided above, please refer to the “Reconciliation of GAAP Net Loss to Non-GAAP net income - Guidance” table for more details, including important assumptions upon which such guidance is based.
Conference Call Details
Five9 will discuss its first quarter 2024 results today, May 2, 2024, via Zoom webinar at 4:30 p.m. Eastern Time. To access the webinar, please register by clicking here. A copy of this press release will be furnished to the Securities and Exchange Commission on a Current Report on Form 8-K and will be posted to our website, prior to the conference call.
A live webcast and a replay will be available on the Investor Relations section of the Company’s web-site at http://investors.five9.com/.
Non-GAAP Financial Measures
In addition to disclosing financial measures prepared in accordance with U.S. generally accepted accounting principles (GAAP), this press release and the accompanying tables contain certain non-GAAP financial measures. We calculate adjusted gross profit and adjusted gross margin by adding back the following items to gross profit: depreciation, intangibles amortization, stock-based compensation, exit costs related to the closure and relocation of our Russian operations, acquisition and related transaction costs and one-time integration costs, and lease amortization for finance leases. We calculate adjusted EBITDA by adding back or removing the following items to or from GAAP net loss: depreciation and amortization, stock-based compensation, interest expense, gain on early extinguishment of debt, interest income and other, exit costs related to closure and relocation of our Russian operations, acquisition and related transaction costs and one-time integration costs, lease amortization for finance leases and provision for income taxes. We calculate non-GAAP operating income by adding back or removing the following items to or from GAAP loss from operations: stock-based compensation, intangibles amortization, exit costs related to the closure and relocation of our Russian operations, and acquisition and related transaction costs and one-time integration costs. We calculate non-GAAP net income by adding back or removing the following items to or from GAAP net loss: stock-based compensation, intangibles amortization, amortization of discount and issuance costs on convertible senior notes, exit costs related to the closure and relocation of our Russian operations, acquisition and related transaction costs and one-time integration costs, and gain on early extinguishment of debt. For the periods presented, these adjustments from GAAP net loss to non-GAAP net income do not include any presentation of the net tax effect of such adjustments given our significant net operating loss carryforwards. Non-GAAP financial measures do not have any standardized meaning and are therefore unlikely to be comparable to similarly titled measures presented by other companies. The Company considers these non-GAAP financial measures to be important because they provide useful measures of the operating performance of the Company, exclusive of factors that do not directly affect what we consider to be our core operating performance, as well as unusual events. The Company’s management uses these measures to (i) illustrate underlying trends in the Company’s business that could otherwise be masked by the effect of income or expenses that are excluded from non-GAAP measures, and (ii) establish budgets and operational goals for managing the Company’s business and evaluating its performance. In addition, investors often use similar measures to evaluate the operating performance of a company. Non-GAAP financial measures are presented only as supplemental information for purposes of understanding the Company’s operating results. The non-GAAP financial measures should not be considered a substitute for financial information presented in accordance with GAAP. Please see the reconciliation of non-GAAP financial measures set forth in this release.
Forward-Looking Statements
This news release contains certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including the statements in the quote from our Chairman and Chief Executive Officer, including statements regarding Five9’s market opportunity and size and ability to capitalize on that opportunity, up-market momentum and outlook, market position, AI and automation initiatives and the advantages thereof, results and outlook, and the second quarter and full year 2024 financial projections set forth under the caption “Business Outlook,” that are based on our current expectations and involve numerous risks and uncertainties that may cause these forward-looking statements to be inaccurate. Risks that may cause these forward-looking statements to be inaccurate include, among others: (i) the impact of adverse economic conditions, including the impact of macroeconomic deterioration, including continued inflation, increased interest rates, supply chain disruptions, decreased economic output and fluctuations in currency rates, the impact of the Russia-Ukraine conflict, the impact of the conflict in Israel, and other factors, may continue to harm our business; (ii) if we are unable to attract new clients or sell additional services and functionality to our existing clients, our revenue and revenue growth will be harmed; (iii) if our existing clients terminate their subscriptions or reduce their subscriptions and related usage, or fail to grow subscriptions at the rate they have in the past or that we might expect, our revenues and gross margins will be harmed and we will be required to spend more money to grow our client base; (iv) because a significant percentage of our revenue is derived from existing clients, downturns or upturns in new sales will not be immediately reflected in our operating results and may be difficult to discern; (v) if we fail to manage our technical operations infrastructure, our existing clients may experience service outages, our new clients may experience delays in the deployment of our solution and we could be subject to, among other things, claims for credits or damages; (vi) we have established, and are continuing to increase, our network of technology solution distributors and resellers to sell our solution; our failure to effectively develop, manage, and maintain this network could materially harm our revenues; (vii) our quarterly and annual results may fluctuate significantly, including as a result of the timing and success of new product and feature introductions by us, may not fully reflect the underlying performance of our business and may result in decreases in the price of our common stock; (viii) if we are unable to attract and retain highly skilled leaders and other employees, our business and results of operations may be adversely affected; (ix) our historical growth may not be indicative of our future growth, and even if we continue to grow rapidly, we may fail to manage our growth effectively; (x) failure to adequately retain and expand our sales force will impede our growth; (xi) further development of our AI solutions may not be successful and may result in reputational harm and our future operating results could be materially harmed; (xii) the AI technology and features incorporated into our solution include new and evolving technologies that may present both legal and business risks; (xiii) the use of AI by our workforce may present risks to our business; (xiv) the contact center software solutions market is subject to rapid technological change, and we must develop and sell incremental and new cloud contact center solutions, which we refer to as our solution, in order to maintain and grow our business; (xv) our growth depends in part on the success of our strategic relationships with third parties and our failure to successfully maintain, grow and manage these relationships could harm our business; (xvi) the markets in which we participate involve a high number of competitors that is continuing to increase, and if we do not compete effectively, our operating results could be harmed; (xvii) we continue to expand our international operations, which exposes us to significant macroeconomic and other risks; (xviii) security breaches and improper access to, use of, or disclosure of our data or our clients’ data, or other cyber attacks on our systems, could result in litigation and regulatory risk, harm our reputation, our business or financial results; (xix) we may acquire other companies, or technologies, or be the target of strategic transactions, or be impacted by transactions by other companies, which could divert our management’s attention, result in additional dilution to our stockholders or use a significant amount of our cash resources and otherwise disrupt our operations and harm our operating results; (xx) we sell our solution to larger organizations that require longer sales and implementation cycles and often demand more configuration and integration services or customized features and functions that we may not offer, any of which could delay or prevent these sales and harm our growth rates, business and operating results; (xxi) we rely on third-party telecommunications and internet service providers to provide our clients and their customers with telecommunication services and connectivity to our cloud contact center software and any failure by these service providers to provide reliable services could cause us to lose clients and subject us to claims for credits or damages, among other things; (xxii) we have a history of losses and we may be unable to achieve or sustain profitability; (xxiii) our stock price has been volatile, may continue to be volatile and may decline, including due to factors beyond our control; (xxiv) we may not be able to secure additional financing on favorable terms, or at all, to meet our future capital needs; (xxv) failure to comply with laws and regulations could harm our business and our reputation; (xxvi) we may not have sufficient cash to service our convertible senior notes and repay such notes, if required, and other risks attendant to our convertible senior notes and increased debt levels; and (xxvii) the other risks detailed from time-to-time under the caption “Risk Factors” and elsewhere in our Securities and Exchange Commission filings and reports, including, but not limited to, our most recent annual report on Form 10-K and quarterly reports on Form 10-Q. Such forward-looking statements speak only as of the date hereof and readers should not unduly rely on such statements. We undertake no obligation to update the information contained in this press release, including in any forward-looking statements.
About Five9
The Five9 Intelligent CX Platform provides a comprehensive suite of solutions for orchestrating fluid customer experiences. Our cloud-native, multi-tenant, scalable, reliable, and secure platform includes contact center; omni-channel engagement; Workforce Engagement Management; extensibility through more than 1,000 partners; and innovative, practical AI, automation and journey analytics that are embedded as part of the platform. Five9 brings the power of people, technology, and partners to more than 3,000 organizations worldwide. For more information, visit www.five9.com.
FIVE9, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
(Unaudited)
March 31, 2024
December 31, 2023
ASSETS
Current assets:
Cash and cash equivalents
$
240,190
$
143,201
Marketable investments
843,212
587,096
Accounts receivable, net
103,157
97,424
Prepaid expenses and other current assets
35,627
34,622
Deferred contract acquisition costs, net
67,169
61,711
Total current assets
1,289,355
924,054
Property and equipment, net
113,640
108,572
Operating lease right-of-use assets
36,215
38,873
Finance lease right-of-use assets
4,108
4,564
Intangible assets, net
35,675
38,323
Goodwill
227,269
227,412
Other assets
16,668
16,199
Deferred contract acquisition costs, net — less current portion
148,408
136,571
Total assets
$
1,871,338
$
1,494,568
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable
$
25,671
$
24,399
Accrued and other current liabilities
79,185
62,131
Operating lease liabilities
9,880
10,731
Finance lease liabilities
1,791
1,767
Deferred revenue
67,019
68,187
Total current liabilities
183,546
167,215
Convertible senior notes
1,160,972
742,125
Operating lease liabilities — less current portion
34,207
36,378
Finance lease liabilities — less current portion
2,414
2,877
Other long-term liabilities
6,601
7,888
Total liabilities
1,387,740
956,483
Stockholders’ equity:
Common stock
74
73
Additional paid-in capital
895,754
942,280
Accumulated other comprehensive (loss) income
(303
)
582
Accumulated deficit
(411,927
)
(404,850
)
Total stockholders’ equity
483,598
538,085
Total liabilities and stockholders’ equity
$
1,871,338
$
1,494,568
FIVE9, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
(Unaudited)
Three Months Ended
March 31, 2024
March 31, 2023
Revenue
$
247,010
$
218,439
Cost of revenue
114,530
104,756
Gross profit
132,480
113,683
Operating expenses:
Research and development
41,518
38,108
Sales and marketing
81,109
76,314
General and administrative
30,548
28,258
Total operating expenses
153,175
142,680
Loss from operations
(20,695
)
(28,997
)
Other income (expense), net:
Interest expense
(2,567
)
(1,845
)
Gain on early extinguishment of debt
6,615
—
Interest income and other
10,559
4,121
Total other income (expense), net
14,607
2,276
Loss before income taxes
(6,088
)
(26,721
)
Provision for income taxes
989
527
Net loss
$
(7,077
)
$
(27,248
)
Net loss per share:
Basic and diluted
$
(0.10
)
$
(0.38
)
Shares used in computing net loss per share:
Basic and diluted
73,488
71,259
FIVE9, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
Three Months Ended
March 31, 2024
March 31, 2023
Cash flows from operating activities:
Net loss
$
(7,077
)
$
(27,248
)
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation and amortization
12,183
11,347
Amortization of operating lease right-of-use assets
3,323
2,934
Amortization of deferred contract acquisition costs
16,269
12,423
Accretion of discount on marketable investments
(4,935
)
(1,863
)
Provision for credit losses
352
317
Stock-based compensation
44,684
50,743
Amortization of discount and issuance costs on convertible senior notes
1,074
908
Gain on early extinguishment of debt
(6,615
)
—
Deferred taxes
248
59
Other
(286
)
439
Changes in operating assets and liabilities:
Accounts receivable
(6,085
)
(908
)
Prepaid expenses and other current assets
(1,003
)
(2,307
)
Deferred contract acquisition costs
(33,565
)
(20,665
)
Other assets
(781
)
(4,231
)
Accounts payable
1,279
1,557
Accrued and other current liabilities
15,832
7,725
Deferred revenue
(1,452
)
181
Other liabilities
(1,092
)
2,001
Net cash provided by operating activities
32,353
33,412
Cash flows from investing activities:
Purchases of marketable investments
(524,865
)
(140,892
)
Proceeds from sales of marketable investments
12,517
—
Proceeds from maturities of marketable investments
260,619
76,940
Purchases of property and equipment
(11,951
)
(9,928
)
Capitalization of software development costs
(3,242
)
(1,806
)
Cash paid to acquire Aceyus
99
—
Net cash used in investing activities
(266,823
)
(75,686
)
Cash flows from financing activities:
Proceeds from issuance of 2029 convertible senior notes, net of issuance costs
728,873
—
Payments for capped call transactions associated with the 2029 convertible senior notes
(93,438
)
—
Repurchase of a portion of 2025 convertible senior notes, net of costs
(304,485
)
—
Cash received from partial termination of capped calls associated with the 2025 convertible senior notes
539
—
Proceeds from exercise of common stock options
386
3,125
Payment of finance lease liabilities
(479
)
—
Net cash provided by financing activities
331,396
3,125
Net increase (decrease) in cash and cash equivalents
96,926
(39,149
)
Cash, cash equivalents and restricted cash:
Beginning of period
144,842
180,987
End of period
$
241,768
$
141,838
FIVE9, INC.
RECONCILIATION OF GAAP GROSS PROFIT TO ADJUSTED GROSS PROFIT
(In thousands, except percentages)
(Unaudited)
Three Months Ended
March 31, 2024
March 31, 2023
GAAP gross profit
$
132,480
$
113,683
GAAP gross margin
53.6
%
52.0
%
Non-GAAP adjustments:
Depreciation
6,965
6,061
Intangibles amortization
2,648
2,846
Stock-based compensation
7,603
9,333
Exit costs related to closure and relocation of Russian operations
—
23
Acquisition and related transaction costs and one-time integration costs
—
34
Lease amortization for finance leases
457
—
Adjusted gross profit
$
150,153
$
131,980
Adjusted gross margin
60.8
%
60.4
%
FIVE9, INC.
RECONCILIATION OF GAAP NET LOSS TO ADJUSTED EBITDA
(In thousands, except percentages)
(Unaudited)
Three Months Ended
March 31, 2024
March 31, 2023
GAAP net loss
$
(7,077
)
$
(27,248
)
Non-GAAP adjustments:
Depreciation and amortization
12,183
11,347
Stock-based compensation
44,684
50,743
Interest expense
2,567
1,845
Gain on early extinguishment of debt
(6,615
)
—
Interest income and other
(10,559
)
(4,121
)
Exit costs related to closure and relocation of Russian operations (1)
25
596
Acquisition and related transaction costs and one-time integration costs
932
1,455
Lease amortization for finance leases
457
—
Provision for income taxes
989
527
Adjusted EBITDA
$
37,586
$
35,144
Adjusted EBITDA as % of revenue
15.2
%
16.1
%
(1) Exit costs related to the closure and relocation of our Russian operations was $0.1 million during the three months ended March 31, 2024. The $0.0 million adjustment presented above was net of $0.1 million included in “Interest (income) and other.” Exit costs related to the closure and relocation of our Russian operations was $0.7 million during the three months ended March 31, 2024. The $0.6 million adjustment presented above was net of $0.1 million included in “Interest (income) and other.”
FIVE9, INC.
RECONCILIATION OF GAAP OPERATING LOSS TO NON-GAAP OPERATING INCOME
(In thousands)
(Unaudited)
Three Months Ended
March 31, 2024
March 31, 2023
Loss from operations
$
(20,695
)
$
(28,997
)
Non-GAAP adjustments:
Stock-based compensation
44,684
50,743
Intangibles amortization
2,648
2,846
Exit costs related to closure and relocation of Russian operations
25
596
Acquisition and related transaction costs and one-time integration costs
932
1,455
Non-GAAP operating income
$
27,594
$
26,643
FIVE9, INC.
RECONCILIATION OF GAAP NET LOSS TO NON-GAAP NET INCOME
(In thousands, except per share data)
(Unaudited)
Three Months Ended
March 31, 2024
March 31, 2023
GAAP net loss
$
(7,077
)
$
(27,248
)
Non-GAAP adjustments:
Stock-based compensation
44,684
50,743
Intangibles amortization
2,648
2,846
Amortization of discount and issuance costs on convertible senior notes
1,074
908
Gain on early extinguishment of debt
(6,615
)
—
Exit costs related to closure and relocation of Russian operations
94
741
Acquisition and related transaction costs and one-time integration costs
932
1,455
Income tax expense effects (1)
—
—
Non-GAAP net income
$
35,740
$
29,445
GAAP net loss per share:
Basic and diluted
$
(0.10
)
$
(0.38
)
Non-GAAP net income per share:
Basic
$
0.49
$
0.41
Diluted
$
0.48
$
0.41
Shares used in computing GAAP net loss per share:
Basic and diluted
73,488
71,259
Shares used in computing non-GAAP net income per share:
Basic
73,488
71,259
Diluted
74,404
72,330
(1)
Non-GAAP adjustments do not have an impact on our federal income tax provision due to past non-GAAP losses, and state taxes are immaterial.
FIVE9, INC.
SUMMARY OF STOCK-BASED COMPENSATION, DEPRECIATION AND INTANGIBLES AMORTIZATION
(In thousands)
(Unaudited)
Three Months Ended
March 31, 2024
March 31, 2023
Stock-Based Compensation
Depreciation
Intangibles Amortization
Stock-Based Compensation
Depreciation
Intangibles Amortization
Cost of revenue
$
7,603
$
6,965
$
2,648
$
9,333
$
6,061
$
2,846
Research and development
10,930
890
—
12,382
872
—
Sales and marketing
14,020
27
—
17,045
1
—
General and administrative
12,131
1,653
—
11,983
1,567
—
Total
$
44,684
$
9,535
$
2,648
$
50,743
$
8,501
$
2,846
FIVE9, INC.
RECONCILIATION OF GAAP NET LOSS TO NON-GAAP NET INCOME – GUIDANCE(1)
(In thousands, except per share data)
(Unaudited)
Three Months Ending
Year Ending
June 30, 2024
December 31, 2024
Low
High
Low
High
GAAP net loss
$
(20,587
)
$
(17,089
)
$
(32,884
)
$
(25,876
)
Non-GAAP adjustments:
Stock-based compensation(2)
46,315
44,315
179,560
175,560
Intangibles amortization
2,643
2,643
10,575
10,575
Amortization of discount and issuance costs on convertible senior notes
1,433
1,433
5,542
5,542
Exit costs related to closure and relocation of Russian operations
—
—
94
94
Acquisition and related transaction costs and one-time integration costs(3)
1,654
1,654
5,610
5,610
Gain on early extinguishment of debt
—
—
(6,615
)
(6,615
)
Income tax expense effects(4)
—
—
—
—
Non-GAAP net income
$
31,458
$
32,956
$
161,882
$
164,890
GAAP net loss per share, basic and diluted
$
(0.28
)
$
(0.23
)
$
(0.44
)
$
(0.35
)
Non-GAAP net income per share:
Basic
$
0.42
$
0.44
$
2.18
$
2.22
Diluted
$
0.42
$
0.44
$
2.15
$
2.19
Shares used in computing GAAP net loss per share and non-GAAP net income per share:
Basic
74,300
74,300
74,200
74,200
Diluted
74,900
74,900
75,200
75,200
(1)
Represents guidance discussed on May 2, 2024. Reader shall not construe presentation of this information after May 2, 2024 as an update or reaffirmation of such guidance.
(2)Stock-based compensation expenses are based on a range of probable significance, assuming market price for our common stock that is approximately consistent with current levels.
(3)Acquisition and related transaction costs and one-time integration costs are based on a range of probable significance for completed acquisitions, and no new acquisitions assumed.
(4)Non-GAAP adjustments do not have an impact on our federal income tax provision due to past non-GAAP losses, and state taxes are immaterial.
View source version on businesswire.com: https://www.businesswire.com/news/home/20240502947702/en/
Investor Relations Contacts:
Five9, Inc. Barry Zwarenstein Chief Financial Officer 925-201-2000 ext. 5959 IR@five9.com
The Blueshirt Group for Five9, Inc. Lisa Laukkanen 415-217-4967 Lisa@blueshirtgroup.com
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