On August 8, 2024, Five9 Inc (FIVN, Financial) released its 8-K filing for the second quarter ended June 30, 2024. Five9, a provider of cloud-native contact center software, reported a 13% increase in revenue to $252.1 million, surpassing the analyst estimate of $245.23 million. The company also reported a GAAP net loss of $(12.8) million, or $(0.17) per basic share, which was narrower than the estimated loss of $(0.25) per share.
Company Overview
Five9 offers cloud-native contact center software enabling digital customer service, sales, and marketing engagement. The company's Virtual Contact Center platform combines core telephony functionality, omnichannel engagement, and various modules into a unified cloud contact-center-as-a-service (CCaaS) platform. Five9's modules include digital self-service, agent assist technology, workflow automation, and workforce optimization solutions that optimize call center efficiency and manage interaction quality and agent performance.
Performance and Challenges
Five9 Inc (FIVN, Financial) reported a record revenue of $252.1 million for Q2 2024, a 13% increase from $222.9 million in Q2 2023. Despite this growth, the company faced challenges with a GAAP net loss of $(12.8) million, though this was an improvement from the $(21.7) million loss in the same quarter last year. The adjusted gross margin decreased slightly to 60.5% from 61.8% in Q2 2023, indicating some pressure on profitability.
Financial Achievements
Five9 Inc (FIVN, Financial) achieved a significant milestone by surpassing a $1 billion annual revenue run rate, driven by a 21% year-over-year growth in LTM enterprise subscription revenue. The company also reported a robust LTM operating cash flow of $126 million, highlighting its strong cash generation capabilities.
Key Financial Metrics
| Metric | Q2 2024 | Q2 2023 |
|---|---|---|
| Revenue | $252.1 million | $222.9 million |
| GAAP Gross Margin | 53.0% | 53.2% |
| Adjusted Gross Margin | 60.5% | 61.8% |
| GAAP Net Loss | $(12.8) million | $(21.7) million |
| Non-GAAP Net Income | $38.9 million | $37.4 million |
| Adjusted EBITDA | $41.8 million | $41.5 million |
Commentary and Outlook
"We are pleased to report strong second quarter results, achieving a key milestone with annual revenue run rate exceeding $1 billion, primarily driven by LTM enterprise subscription revenue growing 21% year-over-year. Adjusted EBITDA margin reached 17%, helping drive robust LTM operating cash flow of $126 million. As we look to the remainder of the year, we are reducing our annual revenue guidance by 3.8%, reflecting recent bookings trends and the uncertain economic conditions. We remain confident in our massive market opportunity and are committed to driving balanced growth and profitability." - Mike Burkland, Chairman and CEO, Five9
Analysis
Five9 Inc (FIVN, Financial) has demonstrated strong revenue growth and improved profitability metrics, despite facing challenges in maintaining its gross margin. The company's ability to surpass the $1 billion annual revenue run rate is a significant achievement, underscoring its market position and growth potential. However, the reduction in annual revenue guidance by 3.8% indicates caution due to recent booking trends and economic uncertainties. Investors should monitor these developments closely as they could impact future performance.
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Explore the complete 8-K earnings release (here) from Five9 Inc for further details.
