Five9, Inc., the Intelligent CX Platform provider, reported results for the second quarter ended June 30, 2024.
Second Quarter 2024 Financial Results
- Revenue for the second quarter of 2024 increased 13% to a record $252.1 million, compared to $222.9 million for the second quarter of 2023.
- GAAP gross margin was 53.0% for the second quarter of 2024, compared to 53.2% for the second quarter of 2023.
- Adjusted gross margin was 60.5% for the second quarter of 2024, compared to 61.8% for the second quarter of 2023.
- GAAP net loss for the second quarter of 2024 was $(12.8) million, or $(0.17) per basic share, and (5.1)% of revenue, compared to GAAP net loss of $(21.7) million, or $(0.30) per basic share, and (9.8)% of revenue, for the second quarter of 2023.
- Non-GAAP net income for the second quarter of 2024 was $38.9 million, or $0.52 per diluted share, and 15.4% of revenue, compared to non-GAAP net income of $37.4 million, or $0.52 per diluted share, and 16.8% of revenue, for the second quarter of 2023.
- Adjusted EBITDA for the second quarter of 2024 was $41.8 million, or 16.6% of revenue, compared to $41.5 million, or 18.6% of revenue, for the second quarter of 2023.
- GAAP operating cash flow for the second quarter of 2024 was $19.9 million, compared to GAAP operating cash flow of $21.9 million for the second quarter of 2023.
“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.
Additionally, we are excited to announce our agreement to acquire Acqueon, which we believe will be a significant step in advancing our AI-powered CX platform and market reach. Also, our latest innovations to our Five9 Genius AI suite, including GenAI Studio and AI Knowledge, further demonstrate our leadership in AI. Our AI solutions are driving tangible business outcomes, enabling some of the world’s largest brands to elevate their customer experiences.”
– 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.
- For the full year 2024, Five9 now expects to report:
- Revenue in the range of $1.013 to $1.017 billion.
- GAAP net loss per share in the range of $(0.29) to $(0.19), assuming basic shares outstanding of approximately 74.5 million.
- Non-GAAP net income per share in the range of $2.25 to $2.29, assuming diluted shares outstanding of approximately 75.2 million.
- For the third quarter of 2024, Five9 expects to report:
- Revenue in the range of $254.5 to $255.5 million.
- GAAP net loss per share in the range of $(0.06) to $(0.01), assuming basic shares outstanding of approximately 74.9 million.
- Non-GAAP net income per share in the range of $0.57 to $0.59, assuming diluted shares outstanding of approximately 75.5 million.
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 second quarter 2024 results today, August 8, 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.
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