Five9's Q4 Success: AI-Driven Growth and Strong Financials Boost Stock Despite CFO Departure

Strong earnings and revenue beat fires up Five9's stock - SiliconANGLE

Shares of the call center software company Five9 Inc. shot up in extended trading after it delivered a solid earnings and revenue beat in its latest financial report, showing strong momentum across its core business. The company reported earnings before certain costs such as stock compensation of 78 cents per share, while revenue for the period rose 17% to $278.7 million. The results were much better than expected, with analysts having pegged the company to report earnings of just 70 cents on sales of $267.5 million. The strong results had a real impact on Five9's bottom line, with the company reporting a net profit of $11.57 million in the quarter, compared to a loss of $12.39 million one year ago. Investors liked what they saw, as Five9's stock rose more than 12% in extended trading. Five9 has emerged as a leading player in the cloud contact center software industry, selling tools and services that enterprises use to manage their customer service interactions. Its software spans traditional phone calls, video calls, emails, messaging, social media and other channels. The software is entirely web-based, which means that customers can either purchase the company's own telephone hardware and phone lines, which are optimized for its platform, or use their own gear. The advantage of using Five9's equipment is that customers can simply add it to their software subscription, so there's no need for a big upfront investment to acquire the hardware they need to scale their call centers. In recent years, Five9 has invested heavily into artificial intelligence in an effort to enhance its product suite and optimize call center operations for its customers. The Genius AI suite was announced last August, and it includes virtual agents that leverage generative AI and natural language processing to mimic the conversational abilities of humans. With Genius AI, Five9's customers can fine-tune these AI agents using their own data, tailoring them to handle various customer problems and queries. In cases where the customer's issue cannot be resolved, the AI bots will hand off to a human call center agent. Its AI tools also use predictive analytics to try and guess why a customer is calling, so it can match them with the most appropriate AI or human agent ahead of time. In addition, it also offers AI tools for call center managers to summarize customer interactions, so they can try to work out how to improve their customer service. Five9 Chairman and Chief Executive Mike Burkland (pictured) said he was very pleased with the company's results, pointing out that its annual revenue topped $1 billion for the first time. "Our record results and strong traction in our AI business continue to demonstrate the power of our platform in enabling brands to elevate their customer service, as evidenced by our Enterprise AI revenue growing 46% YoY in the fourth quarter," he added. The company capped things off with solid guidance for the current quarter, saying it expects earnings of between 47 cents to 49 cents on revenue of between $271.5 million to $272.5 million. Those numbers are more or less in-line with Wall Street's targets of 48 cents per share in earnings and $272.2 million in revenue. For the full year, Five9 said it's looking for a profit of $2.58 to $2.62 per share on total sales of $1.14 billion. The Street is modeling a slightly lower profit of $2.54 per share on the same revenue.

Five9's AI Strategy Drives Q4 Success | The Motley Fool

The company reported impressive earnings, bolstered by cloud adoption and AI advancements. Five9 achieved a non-GAAP EPS of $0.79, beating Wall Street forecasts of $0.70. Revenue for the quarter was $278.7 million, surpassing expectations of $267 million. The company's demonstration of profitability and operational efficiency marked a robust quarter, despite challenges like a competitive landscape and macroeconomic pressures. Source: SEC filings. Analyst estimates for the quarter provided by FactSet. PP = percentage points. Five9 specializes in cloud-based contact center software solutions, providing businesses with tools to enhance their customer service operations. Its focus on leveraging cloud technology is critical. This transition suits current trends towards remote and flexible work environments. A key part of its strategy is incorporating artificial intelligence (AI) to increase customer interaction efficiency. The success of these focuses is evident in its financial results, notably in subscription revenue growth and operational efficiencies. Five9's recent business thrust includes accelerating the shift from legacy systems to modern, cloud-based solutions. Leveraging AI and automation, Five9 optimizes customer experience and drives operational improvements. The scalable Software as a Service (SaaS) model enhances revenue predictability, leading to a steady and strong cash flow. Five9 continues to build on its expansive partner ecosystem to foster market growth and technology adoption. Five9 recorded significant financial accomplishments in the fourth quarter of 2024. Notably, its revenue climbed to $278.7 million, marking a 16.6% increase compared to Q4 2023. This revenue surge was primarily due to a robust 19% growth in subscription revenue. Such performance highlights Five9's effective strategy in driving its cloud-based offerings amidst evolving market demands. In terms of profitability, Five9 displayed strong performance with a non-GAAP EPS of $0.79, exceeding the market's expectations by $0.09. Its adjusted gross margin improved to 63.5% from the previous year's 61.3%, reflecting better cost management and operational efficiencies. The company reported a record operating cash flow of $49.8 million, up from $36.5 million in the prior year period, showcasing its cash-generating strength. The quarter also witnessed significant advancements in AI integration, with enterprise AI revenue achieving 46% year-over-year growth. This underscores Five9's position as a leader in AI-driven customer experience (CX) solutions. Additionally, Five9's efforts in deepening partnerships and expanding its product portfolio resonate with its strategic goals for comprehensive market penetration. During the quarter, Five9 maintained its focus on innovation and partnership growth, which is critical for sustaining a competitive edge. Its commitment to continuous product enhancement strengthens its market standing. However, the company operates in a competitive environment with tight pressures from ongoing technological advancements by competitors. For the upcoming year, Five9 projects revenue between $1.140 billion and $1.144 billion, and it expects non-GAAP EPS ranging from $2.58 to $2.62. The company's outlook signals confidence in overcoming macroeconomic uncertainties while capturing growth from shifting industry dynamics. For the first quarter, revenue guidance stands between $271.5 million to $272.5 million. Investors should monitor Five9's ability to innovate amidst a competitive landscape and its response to ongoing macroeconomic conditions. The company remains focused on its cloud transition and AI efforts, which are pivotal in maintaining growth momentum. Continuous advancements in technology and strategic partnerships will be crucial for Five9 to achieve its forward projections and sustain long-term success.

Why Five9 Stock Is Rising Today | The Motley Fool

Call center expert Five9 crushed its fourth-quarter report, but the bullish update was hamstrung by an unexpected management departure. Cloud-based contact center specialist Five9 (FIVN 5.00%) reported fourth-quarter results on Thursday evening. The company breezed past Wall Street's estimates across the board, and the stock opened Friday's trading session 19.7% higher. But there's more to the Five9 story, and the stock is only up by 5.2% at 11:30 a.m. ET. Five9's fourth-quarter revenues rose 16.6% year over year to $279 million. Your average analyst would have settled for approximately $267 million. On the bottom line, adjusted earnings jumped from $0.61 to $0.79 per diluted share. Here, the analyst consensus stopped at $0.70 per share. So far, so good. Five9 posted record revenues and strong profits. Renewable subscription sales led the way with a 19% year-over-year gain. The company supported its marketing message while limiting its cost of operations by incorporating a growing number of artificial intelligence (AI) tools in its call center services. Personalized AI agents are emerging as a particularly important growth driver. At the same time, longtime CFO Barry Zwarenstein announced his retirement after 13 years on the job. This unexpected announcement undermined Five9's clearly positive report. But it's an amicable separation, and Zwarenstein will stay on until the summer to ensure a smooth transition to his permanent replacement. In other words, Five9's robust report should carry more weight with investors than Zwarenstein's departure.