Five9 Raises Revenue Outlook as Subscription Growth Accelerates
Second-quarter revenue reached $312.4 million, topping the prior forecast by $3.4 million at the high end.
Five9 (FIVN), the cloud contact-center software provider, reported 10% second-quarter revenue growth as subscription sales accelerated for a third consecutive quarter.
The quarter extended a gradual recovery in Five9’s top-line momentum. Revenue growth increased from 9% in the first quarter and 8% in each of the preceding two quarters, while subscription revenue growth climbed to 14% from 13% in the first quarter and 12% in the fourth quarter of 2024. Both measures remained below their year-earlier growth rates.
Revenue rose to $312.4 million from a year earlier and increased 2.3% sequentially. GAAP net income advanced to $3.4 million, or $0.04 a diluted share, from $1.2 million, or $0.01 a share, a year earlier. Non-GAAP earnings fell to $0.70 a diluted share from $0.76 a year earlier and in the first quarter.
Faster subscription growth came with weaker profitability. Adjusted gross margin narrowed to 61.4% from 63.0% a year earlier, while adjusted EBITDA rose 3.2% to $70.1 million and its margin contracted to 22.4% from 24.0%. GAAP operating income improved to $2.0 million from a $1.6 million loss despite the lower gross margin.
The quarter included a new-customer contract worth roughly $100 million in total value that was completed through Google Marketplace. The company also launched Five9 Voice AI Agents, building on the joint AI solution introduced with Google Cloud in the prior quarter.
Five9 raised its full-year revenue outlook to $1.260 billion to $1.272 billion, lifting both ends by $6 million. The company continues to expect non-GAAP earnings of $3.22 to $3.30 a share, while its GAAP earnings forecast declined to $0.71 to $0.82 a share from $0.73 to $0.85 previously. For the third quarter, Five9 expects revenue of $316 million to $322 million and non-GAAP earnings of $0.77 to $0.81 a share.
The company spent $100.0 million on share repurchases during the first half after announcing an accelerated buyback in April and authorizing a new $200 million program. Second-quarter results also absorbed an $8.4 million headquarters-consolidation impairment and $1.9 million of one-time advisory costs tied to long-term strategy and growth.