Nasdaq:FIVN
Five9, Inc.
A leading cloud contact center provider delivering AI-powered omnichannel communication solutions to enterprises worldwide.
Key Metrics
Investment Thesis
Bull Case
Investors should consider FIVN as a turnaround story that has stabilized profitability after years of restructuring, evidenced by the shift to positive net income. The strategic pivot toward AI and contact center as a service models positions the company for sustainable recurring revenue growth in an expanding digital economy. Valuation metrics appear attractive relative to peers given the recent profit generation and strong operating cash flow conversion.
Bear Case
Despite recent profitability, the company carries significant goodwill of $366.3M and a retained earnings deficit of $-378.2M, indicating potential past acquisition integration challenges or aggressive accounting practices. The market remains cautious about the sustainability of current growth rates as competition intensifies from well-funded big tech competitors offering similar capabilities. High capital expenditures of $25.0M combined with heavy marketing spend of $311.8M may continue to pressure near-term margins.
About Five9, Inc.
Five9, Inc. (FIVN) provides comprehensive cloud contact center solutions enabling businesses to manage customer interactions across omnichannel platforms. Serving global enterprises and SMBs, the company offers an AI-driven suite including virtual agents, workforce optimization tools, and advanced analytics. Key products include Five9 One Platform and specialized industry modules for healthcare, financial services, and retail sectors.
Analysis
Management Discussion
The company achieved a pivotal turnaround with net profit of $39.4M in the latest fiscal year, reversing years of losses seen from 2022 through 2024. Revenue growth accelerated to $1.15B from $778.8M five years ago, driven by successful upselling of AI features and expansion into new verticals. Strong cash flow from operations of $226.2M supports strategic investments while the balance sheet remains healthy with $234.1M in cash.
Industry Overview
The contact center software industry is rapidly evolving toward cloud-native, AI-first architectures that prioritize omnichannel engagement and workforce flexibility. Market consolidation is increasing as smaller players struggle against incumbents while new entrants leverage large language models to disrupt traditional telephony solutions. Regulatory scrutiny on data handling remains a persistent headwind for global providers operating across multiple jurisdictions.
Financial Statements
Income Statement
Balance Sheet
Cash Flow
| Metric | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|
| Revenue | $778.8M | $910.5M | $1.04B | $1.15B |
| Cost of Revenue | $367.5M | $432.7M | $477.5M | $516.2M |
| Gross Profit | $411.3M | $477.8M | $564.4M | $632.9M |
| Operating Expenses | $498.9M | $576.4M | $615.7M | $604.0M |
| Operating Income | $-87.6M | $-98.6M | $-51.3M | $28.9M |
| R&D | $141.8M | $156.6M | $166.2M | $152.3M |
| G&A | $95.1M | $123.1M | $137.6M | $139.9M |
| Marketing | $262.0M | $296.7M | $312.0M | $311.8M |
| Stock-Based Comp | $172.5M | $206.3M | $166.3M | $148.1M |
| D&A | $44.7M | $48.5M | $52.9M | $61.8M |
| Depreciation | $33.0M | $36.5M | $40.3M | $47.3M |
| Amortization | $11.7M | $12.0M | $12.6M | $14.5M |
| Other OpEx | $0 | $0 | $0 | $0 |
| Non-Operating Income | $-2.7M | $19.2M | $38.5M | $16.1M |
| Interest Expense | $7.5M | $7.6M | — | — |
| Pre-Tax Income | $-90.3M | $-79.4M | $-12.8M | $44.9M |
| Income Tax | $4.4M | $2.3M | $40.0K | $5.5M |
| Continuing Ops | $-94.7M | $-81.8M | $-12.8M | $39.4M |
| Discontinued Ops | $0 | $0 | $0 | $0 |
| Net Income | $-94.7M | $-81.8M | $-12.8M | $39.4M |
| Minority Interest | $0 | $0 | $0 | $0 |
| Net to Common | $-94.7M | $-81.8M | $-12.8M | $39.4M |
| Metric | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|
| Current Assets | $778.7M | $924.1M | $1.25B | $959.7M |
| Cash & Equivalents | $180.5M | $143.2M | $362.5M | $232.1M |
| Accounts Receivable | $87.5M | $97.4M | $115.2M | $131.0M |
| Prepaid Expenses | $29.7M | $34.6M | $50.8M | $43.1M |
| Other Current Assets | $481.0M | $648.8M | $720.0M | $553.5M |
| Long-Term Assets | $465.8M | $570.5M | $802.6M | $830.3M |
| PP&E (Net) | — | $108.6M | $144.9M | $164.6M |
| Intangibles | $28.2M | $38.3M | $65.6M | $51.2M |
| Goodwill | $165.4M | $227.4M | $365.4M | $366.3M |
| Operating Leases | $44.1M | $38.9M | $38.9M | $46.4M |
| Other LT Assets | $228.0M | $157.3M | $187.8M | $201.9M |
| Total Assets | $1.24B | $1.49B | $2.05B | $1.79B |
| Current Liabilities | $150.8M | $167.2M | $641.7M | $213.0M |
| Accounts Payable | $23.6M | $24.4M | $26.3M | $30.0M |
| Current Leases | $10.6M | $10.7M | $11.3M | $12.9M |
| Deferred Revenue | $57.8M | $68.2M | $79.2M | $77.5M |
| Other Current Liab | $39.4M | $45.6M | $494.2M | $68.0M |
| Long-Term Liabilities | $783.7M | $789.3M | $787.3M | $791.2M |
| LT Operating Leases | $41.4M | $36.4M | $37.1M | $42.1M |
| Other LT Liab | $741.2M | $751.5M | $749.4M | $747.6M |
| Total Liabilities | $934.5M | $956.5M | $1.43B | $1.00B |
| Shareholders' Equity | $310.0M | $538.1M | $622.2M | $785.8M |
| Paid-In Capital | $635.7M | $942.3M | $1.04B | $1.16B |
| Retained Earnings | $-323.1M | $-404.9M | $-417.6M | $-378.2M |
| AOCI | $-2.7M | $582.0K | $636.0K | $897.0K |
| Total L&E | $1.24B | $1.49B | $2.05B | $1.79B |
| Metric | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|
| Net Income (CFO) | $-94.7M | $-81.8M | $-12.8M | $39.4M |
| Non-Cash Adjustments | $179.8M | $190.9M | $130.8M | $183.3M |
| Working Capital Changes | $3.8M | $19.7M | $25.2M | $3.5M |
| Cash from Operations | $88.9M | $128.8M | $143.2M | $226.2M |
| Capital Expenditures | $52.3M | $31.2M | $42.4M | $25.0M |
| Cash from Investing | $31.0M | $-259.6M | $-266.6M | $122.3M |
| Share Buybacks | — | — | — | $50.0M |
| Cash from Financing | $-30.2M | $94.6M | $342.7M | $-478.6M |
| FX Effect | $0 | $0 | $0 | $0 |
| Net Change in Cash | $89.6M | $-36.1M | $219.3M | $-130.1M |
| Beginning Cash | $91.4M | $181.0M | $144.8M | $364.2M |
| Ending Cash | $181.0M | $144.8M | $364.2M | $234.1M |
Frequently Asked Questions
How does Five9, Inc. make money?
Revenue is primarily derived from software licensing fees, subscription-based SaaS models, and professional services including implementation and support. The company operates through a global network of direct sales teams and distribution partners targeting diverse verticals such as finance, healthcare, retail, and technology sectors.
What are the main risks for FIVN?
High customer acquisition costs and intense competition from hyperscalers like Amazon Connect and Twilio could erode margins if pricing power diminishes. Significant reliance on third-party cloud infrastructure creates exposure to service outages or latency issues affecting client SLAs. Regulatory changes in data privacy across different jurisdictions may increase compliance overhead and limit market expansion.
What is FIVN's competitive advantage?
Five9 maintains a strong market position through deep integrations with major CRM ecosystems like Salesforce and Microsoft Dynamics, ensuring seamless workflow automation. Its proprietary AI engine delivers superior virtual agent capabilities that reduce operational costs while enhancing customer engagement rates compared to legacy on-premise systems.
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Not financial advice. All content is for informational purposes only. Data may contain errors. Consult a qualified financial advisor before making investment decisions.