Five9 Reports Full Year 2023 Revenue Growth of 17% to a Record $910 Million

2023 Enterprise Subscription Revenue Growth of 25%

Q4 Revenue Growth of 15% to $239 Million

Q4 Record GAAP Operating Cash Flow of $37 Million

Five9, Inc. (NASDAQ:FIVN), the Intelligent CX Platform provider, today reported results for the fourth quarter and full year ended December 31, 2023.

Fourth Quarter 2023 Financial Results

  • Revenue for the fourth quarter of 2023 increased 15% to a record $239.1 million, compared to $208.3 million for the fourth quarter of 2022.
  • GAAP gross margin was 52.9% for the fourth quarter of 2023, compared to 53.8% for the fourth quarter of 2022.
  • Adjusted gross margin was 61.3% for the fourth quarter of 2023, compared to 62.3% for the fourth quarter of 2022.
  • GAAP net loss for the fourth quarter of 2023 was $(12.4) million, or (5.2)% of revenue and $(0.17) per basic share, compared to GAAP net loss of $(13.7) million, or (6.6)% of revenue and $(0.19) per basic share, for the fourth quarter of 2022.
  • Non-GAAP net income for the fourth quarter of 2023 was $45.1 million, or 18.9% of revenue and $0.61 per diluted share, compared to non-GAAP net income of $39.0 million, or 18.7% of revenue and $0.54 per diluted share, for the fourth quarter of 2022.
  • Adjusted EBITDA for the fourth quarter of 2023 was $48.3 million, or 20.2% of revenue, compared to $46.2 million, or 22.2% of revenue, for the fourth quarter of 2022.
  • GAAP operating cash flow for the fourth quarter of 2023 was $36.5 million, compared to GAAP operating cash flow of $32.7 million for the fourth quarter of 2022.

2023 Financial Results

  • Total revenue for 2023 increased 17% to a record $910.5 million, compared to $778.8 million in 2023.
  • GAAP gross margin was 52.5% for 2023, compared to 52.8% in 2022.
  • Adjusted gross margin was 61.0% for 2023, compared to 61.3% in 2022.
  • GAAP net loss for 2023 was $(81.8) million, or (9.0)% of revenue and $(1.13) per basic share, compared to GAAP net loss of $(94.7) million, or (12.2)% of revenue and $(1.35) per basic share, in 2022.
  • Non-GAAP net income for 2023 was $149.9 million, or 16.5% of revenue and $2.05 per diluted share, compared to non-GAAP net income of $106.7 million, or 13.7% of revenue and $1.50 per diluted share, in 2022.
  • Adjusted EBITDA for 2023 was $166.3 million, or 18.3% of revenue, compared to $140.4 million, or 18.0% of revenue, in 2022.
  • GAAP operating cash flow for 2023 was $128.8 million, compared to GAAP operating cash flow of $88.9 million, in 2022.

“We are pleased to report strong revenue growth of 17% for full year 2023. This growth continues to be driven by our Enterprise business where subscription revenue grew 25% in 2023. In the fourth quarter, revenue grew 15% year-over-year, and we achieved adjusted EBITDA margin of 20%, which drove a fourth quarter record for GAAP operating cash flow. We continue to strengthen our AI leadership in CX, gaining meaningful traction with our offerings and significantly enhancing our platform throughout 2023. In addition, we are experiencing strong momentum up-market, evidenced by our fourth quarter record in Enterprise bookings, an acceleration in top-of-funnel growth, and pipeline reaching another all-time high. The market remains massive and underpenetrated, and we believe we are well positioned to capitalize on this durable, multi-year opportunity as we focus on further strengthening our platform, marching up-market and expanding internationally.”

- 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 ongoing macroeconomic conditions.

  • For the full year 2024, Five9 expects to report:
    • Revenue in the range of $1.053 to $1.057 billion.
    • GAAP net loss per share in the range of $(0.61) to $(0.53), assuming basic shares outstanding of approximately 74.6 million.
    • Non-GAAP net income per share in the range of $2.14 to $2.18, assuming diluted shares outstanding of approximately 75.9 million.
  • For the first quarter of 2024, Five9 expects to report:
    • Revenue in the range of $239.0 to $240.0 million.
    • GAAP net loss per share in the range of $(0.34) to $(0.28), assuming basic shares outstanding of approximately 73.6 million.
    • Non-GAAP net income per share in the range of $0.37 to $0.39, assuming diluted shares outstanding of approximately 74.7 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 fourth quarter 2023 results today, February 21, 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 and one-time integration costs, lease amortization for finance leases and refund for prior year overpayment of USF fees. 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, 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, contingent consideration expense, refund for prior year overpayment of USF fees, 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, acquisition and related transaction costs and one-time integration costs, contingent consideration expense and refund for prior year overpayment of USF fees. 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, contingent consideration expense, refund for prior year overpayment of USF fees and tax provision associated with acquired companies. 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.

Forward-Looking Statements

This news release contains certain forward-looking statements within the meaning of Private Securities Litigation Reform Act of 1995, including the statements in the quote from our Chairman and Chief Executive Officer, including statements regarding Five9’s enterprise growth market opportunity and size and ability to capitalize on that opportunity, up-market momentum and outlook, market position, AI and automation initiatives, results and outlook, platform strengthening initiatives, international expansion, and the first quarter and full year 2024 financial projections set forth under the caption “Business Outlook,” that are based on our current expectations and involve numerous risks and uncertainties that may cause these forward-looking statements to be inaccurate. Risks that may cause these forward-looking statements to be inaccurate include, among others: (i) the impact of adverse economic conditions, including the impact of macroeconomic deterioration, including continued inflation, increased interest rates, supply chain disruptions, decreased economic output and fluctuations in currency rates, the impact of the Russia-Ukraine conflict, the impact of the conflict in Israel, and other factors, that may continue to harm our business; (ii) if we are unable to attract new clients or sell additional services and functionality to our existing clients, our revenue and revenue growth will be harmed; (iii) if our existing clients terminate their subscriptions or reduce their subscriptions and related usage, or fail to grow subscriptions at the rate they have in the past or that we might expect, our revenues and gross margins will be harmed and we will be required to spend more money to grow our client base; (iv) because a significant percentage of our revenue is derived from existing clients, downturns or upturns in new sales will not be immediately reflected in our operating results and may be difficult to discern; (v) if we fail to manage our technical operations infrastructure, our existing clients may experience service outages, our new clients may experience delays in the deployment of our solution and we could be subject to, among other things, claims for credits or damages; (vi) we have established, and are continuing to increase, our network of technology solution distributors and resellers to sell our solution; our failure to effectively develop, manage, and maintain this network could materially harm our revenues; (vii) our quarterly and annual results may fluctuate significantly, including as a result of the timing and success of new product and feature introductions by us, may not fully reflect the underlying performance of our business and may result in decreases in the price of our common stock; (viii) our historical growth may not be indicative of our future growth, and even if we continue to grow rapidly, we may fail to manage our growth effectively; (ix) failure to adequately retain and expand our sales force will impede our growth; (x) further development of our AI solutions may not be successful and may result in reputational harm and our future operating results could be materially harmed; (xi) the AI technology and features incorporated into our solution include new and evolving technologies that may present both legal and business risks; (xii) the use of AI by our workforce may present risks to our business; (xiii) the contact center software solutions market is subject to rapid technological change, and we must develop and sell incremental and new cloud contact center solutions, which we refer to as our solution, in order to maintain and grow our business; (xiv) our growth depends in part on the success of our strategic relationships with third parties and our failure to successfully maintain, grow and manage these relationships could harm our business; (xv) the markets in which we participate involve a high number of competitors that is continuing to increase, and if we do not compete effectively, our operating results could be harmed; (xvi) we continue to expand our international operations, which exposes us to significant macroeconomic and other risks; (xvii) security breaches and improper access to, use of, or disclosure of our data or our clients’ data, or other cyber attacks on our systems, could result in litigation and regulatory risk, harm our reputation, our business or financial results; (xviii) we may acquire other companies, or technologies, or be the target of strategic transactions, or be impacted by transactions by other companies, which could divert our management’s attention, result in additional dilution to our stockholders or use a significant amount of our cash resources and otherwise disrupt our operations and harm our operating results; (xix) we sell our solution to larger organizations that require longer sales and implementation cycles and often demand more configuration and integration services or customized features and functions that we may not offer, any of which could delay or prevent these sales and harm our growth rates, business and operating results; (xx) we rely on third-party telecommunications and internet service providers to provide our clients and their customers with telecommunication services and connectivity to our cloud contact center software and any failure by these service providers to provide reliable services could cause us to lose clients and subject us to claims for credits or damages, among other things; (xxi) we have a history of losses and we may be unable to achieve or sustain profitability; (xxii) our stock price has been volatile, may continue to be volatile and may decline, including due to factors beyond our control; (xxiii) we may not be able to secure additional financing on favorable terms, or at all, to meet our future capital needs; (xxiv) failure to comply with laws and regulations could harm our business and our reputation; (xxv) we may not have sufficient cash to service our convertible senior notes and repay such notes, if required, and other risks attendant to our convertible senior notes and increased debt levels; and (xxvi) the other risks detailed from time-to-time under the caption “Risk Factors” and elsewhere in our Securities and Exchange Commission filings and reports, including, but not limited to, our most recent annual report on Form 10-K and quarterly reports on Form 10-Q. Such forward-looking statements speak only as of the date hereof and readers should not unduly rely on such statements. We undertake no obligation to update the information contained in this press release, including in any forward-looking statements.

About Five9

The Five9 Intelligent CX Platform provides a comprehensive suite of solutions for orchestrating fluid customer experiences. Our cloud-native, multi-tenant, scalable, reliable, and secure platform includes contact center; omni-channel engagement; Workforce Engagement Management; extensibility through more than 1,000 partners; and innovative, practical AI, automation and journey analytics that are embedded as part of the platform. Five9 brings the power of people, technology, and partners to more than 3,000 organizations worldwide. For more information, visit www.five9.com.

FIVE9, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands)

(Unaudited)

 

 

 

December 31, 2023

 

December 31, 2022

 

 

 

 

 

ASSETS

 

 

 

 

Current assets:

 

 

 

 

Cash and cash equivalents

 

$

143,201

 

 

$

180,520

 

Marketable investments

 

 

587,096

 

 

 

433,743

 

Accounts receivable, net

 

 

97,424

 

 

 

87,494

 

Prepaid expenses and other current assets

 

 

34,622

 

 

 

29,711

 

Deferred contract acquisition costs, net

 

 

61,711

 

 

 

47,242

 

Total current assets

 

 

924,054

 

 

 

778,710

 

Property and equipment, net

 

 

108,572

 

 

 

101,221

 

Operating lease right-of-use assets

 

 

38,873

 

 

 

44,120

 

Finance lease right-of-use assets

 

 

4,564

 

 

 

 

Intangible assets, net

 

 

38,323

 

 

 

28,192

 

Goodwill

 

 

227,412

 

 

 

165,420

 

Marketable investments

 

 

 

 

 

885

 

Other assets

 

 

16,199

 

 

 

11,057

 

Deferred contract acquisition costs, net — less current portion

 

 

136,571

 

 

 

114,880

 

Total assets

 

$

1,494,568

 

 

$

1,244,485

 

LIABILITIES AND STOCKHOLDERS’ EQUITY

 

 

 

 

Current liabilities:

 

 

 

 

Accounts payable

 

$

24,399

 

 

$

23,629

 

Accrued and other current liabilities

 

 

62,131

 

 

 

58,536

 

Operating lease liabilities

 

 

10,731

 

 

 

10,626

 

Finance lease liabilities

 

 

1,767

 

 

 

 

Deferred revenue

 

 

68,187

 

 

 

57,816

 

Convertible senior notes

 

 

 

 

 

169

 

Total current liabilities

 

 

167,215

 

 

 

150,776

 

Convertible senior notes - less current portion

 

 

742,125

 

 

 

738,376

 

Operating lease liabilities — less current portion

 

 

36,378

 

 

 

41,389

 

Finance lease liabilities — less current portion

 

 

2,877

 

 

 

 

Other long-term liabilities

 

 

7,888

 

 

 

3,979

 

Total liabilities

 

 

956,483

 

 

 

934,520

 

Stockholders’ equity:

 

 

 

 

Common stock

 

 

73

 

 

 

71

 

Additional paid-in capital

 

 

942,280

 

 

 

635,668

 

Accumulated other comprehensive income (loss)

 

 

582

 

 

 

(2,688

)

Accumulated deficit

 

 

(404,850

)

 

 

(323,086

)

Total stockholders’ equity

 

 

538,085

 

 

 

309,965

 

Total liabilities and stockholders’ equity

 

$

1,494,568

 

 

$

1,244,485

 

FIVE9, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except per share data)

(Unaudited)

 

 

 

Three Months Ended

 

Twelve Months Ended

 

 

December 31,

2023

 

December 31,

2022

 

December 31,

2023

 

December 31,

2022

 

 

 

 

 

 

 

 

 

Revenue

 

$

239,062

 

 

$

208,345

 

 

$

910,488

 

 

$

778,846

 

Cost of revenue

 

 

112,493

 

 

 

96,294

 

 

 

432,690

 

 

 

367,501

 

Gross profit

 

 

126,569

 

 

 

112,051

 

 

 

477,798

 

 

 

411,345

 

Operating expenses:

 

 

 

 

 

 

 

 

Research and development

 

 

38,873

 

 

 

36,865

 

 

 

156,582

 

 

 

141,794

 

Sales and marketing

 

 

72,956

 

 

 

65,928

 

 

 

296,713

 

 

 

261,990

 

General and administrative

 

 

33,338

 

 

 

22,509

 

 

 

123,079

 

 

 

95,143

 

Total operating expenses

 

 

145,167

 

 

 

125,302

 

 

 

576,374

 

 

 

498,927

 

Loss from operations

 

 

(18,598

)

 

 

(13,251

)

 

 

(98,576

)

 

 

(87,582

)

Other income (expense), net:

 

 

 

 

 

 

 

 

Interest expense

 

 

(1,963

)

 

 

(1,887

)

 

 

(7,646

)

 

 

(7,493

)

Interest income and other

 

 

8,322

 

 

 

2,706

 

 

 

26,799

 

 

 

4,813

 

Total other income (expense), net

 

 

6,359

 

 

 

819

 

 

 

19,153

 

 

 

(2,680

)

Loss before income taxes

 

 

(12,239

)

 

 

(12,432

)

 

 

(79,423

)

 

 

(90,262

)

Provision for income taxes

 

 

119

 

 

 

1,221

 

 

 

2,341

 

 

 

4,388

 

Net loss

 

$

(12,358

)

 

$

(13,653

)

 

$

(81,764

)

 

$

(94,650

)

Net loss per share:

 

 

 

 

 

 

 

 

Basic and diluted

 

$

(0.17

)

 

$

(0.19

)

 

$

(1.13

)

 

$

(1.35

)

Shares used in computing net loss per share:

 

 

 

 

 

 

 

 

Basic and diluted

 

 

72,926

 

 

 

70,704

 

 

 

72,048

 

 

 

69,920

 

FIVE9, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

(Unaudited)

 

 

 

Twelve Months Ended

 

 

December 31, 2023

 

December 31, 2022

Cash flows from operating activities:

 

 

 

 

Net loss

 

$

(81,764

)

 

$

(94,650

)

Adjustments to reconcile net loss to net cash provided by operating activities:

 

 

 

 

Depreciation and amortization

 

 

48,515

 

 

 

44,671

 

Amortization of operating lease right-of-use assets

 

 

12,642

 

 

 

10,377

 

Amortization of deferred contract acquisition costs

 

 

55,384

 

 

 

41,034

 

(Accretion of discount) on marketable investments

 

 

(11,351

)

 

 

(90

)

Provision for credit losses

 

 

989

 

 

 

1,105

 

Stock-based compensation

 

 

206,292

 

 

 

172,507

 

Amortization of discount and issuance costs on convertible senior notes

 

 

3,749

 

 

 

3,743

 

Deferred taxes

 

 

53

 

 

 

3,088

 

Change in fair of value of contingent consideration

 

 

 

 

 

260

 

Payment of contingent consideration liability in excess of acquisition-date fair value

 

 

 

 

 

(5,900

)

Other

 

 

807

 

 

 

188

 

Changes in operating assets and liabilities:

 

 

 

 

Accounts receivable

 

 

(9,844

)

 

 

(4,899

)

Prepaid expenses and other current assets

 

 

(3,532

)

 

 

661

 

Deferred contract acquisition costs

 

 

(91,544

)

 

 

(85,197

)

Other assets

 

 

(3,988

)

 

 

(319

)

Accounts payable

 

 

2,932

 

 

 

845

 

Accrued and other current liabilities

 

 

(9,274

)

 

 

(7,878

)

Deferred revenue

 

 

4,958

 

 

 

13,176

 

Other liabilities

 

 

3,814

 

 

 

(3,857

)

Net cash provided by operating activities

 

 

128,838

 

 

 

88,865

 

Cash flows from investing activities:

 

 

 

 

Purchases of marketable investments

 

 

(795,002

)

 

 

(435,768

)

Proceeds from sales of marketable investments

 

 

1,211

 

 

 

600

 

Proceeds from maturities of marketable investments

 

 

655,588

 

 

 

524,568

 

Purchases of property and equipment

 

 

(31,234

)

 

 

(52,272

)

Capitalization of software development costs

 

 

(9,537

)

 

 

(3,899

)

Payments of initial direct costs

 

 

 

 

 

(266

)

Cash paid for an equity investment in a privately-held company

 

 

 

 

 

(2,000

)

Cash paid to acquire Aceyus

 

 

(80,588

)

 

 

 

Net cash (used in) provided by investing activities

 

 

(259,562

)

 

 

30,963

 

Cash flows from financing activities:

 

 

 

 

Repurchase of a portion of 2023 convertible senior notes, net of costs

 

 

 

 

 

(34,067

)

Repayment of outstanding 2023 convertible senior notes at maturity

 

 

(169

)

 

 

 

Cash received from the settlement at maturity of the outstanding capped calls associated with the 2023 convertible senior notes

 

 

74,453

 

 

 

 

Proceeds from exercise of common stock options

 

 

9,127

 

 

 

8,522

 

Proceeds from sale of common stock under ESPP

 

 

15,927

 

 

 

13,413

 

Payment of employee taxes related to vested RSUs

 

 

(3,270

)

 

 

 

Payment of contingent consideration liability up to acquisition-date fair value

 

 

 

 

 

(18,100

)

Payment of holdback related to acquisition

 

 

(500

)

 

 

 

Payments of finance leases

 

 

(989

)

 

 

 

Net cash provided by (used in) financing activities

 

 

94,579

 

 

 

(30,232

)

Net (decrease) increase in cash and cash equivalents

 

 

(36,145

)

 

 

89,596

 

Cash, cash equivalents and restricted cash:

 

 

 

 

Beginning of period

 

 

180,987

 

 

 

91,391

 

End of period

 

$

144,842

 

 

$

180,987

 

 

 

 

 

 

FIVE9, INC.

RECONCILIATION OF GAAP GROSS PROFIT TO ADJUSTED GROSS PROFIT

(In thousands, except percentages)

(Unaudited)

 

 

 

Three Months Ended

 

Twelve Months Ended

 

 

December 31, 2023

 

December 31, 2022

 

December 31, 2023

 

December 31, 2022

 

 

 

 

 

 

 

 

 

GAAP gross profit

 

$

126,569

 

 

$

112,051

 

 

$

477,798

 

 

$

411,345

 

GAAP gross margin

 

 

52.9

%

 

 

53.8

%

 

 

52.5

%

 

 

52.8

%

Non-GAAP adjustments:

 

 

 

 

 

 

 

 

Depreciation

 

 

7,162

 

 

 

5,913

 

 

 

26,540

 

 

 

23,250

 

Intangibles amortization

 

 

3,146

 

 

 

2,890

 

 

 

12,019

 

 

 

11,705

 

Stock-based compensation

 

 

9,182

 

 

 

8,638

 

 

 

38,259

 

 

 

33,297

 

Exit costs related to closure and relocation of Russian operations

 

 

12

 

 

 

219

 

 

 

105

 

 

 

698

 

Acquisition and related transaction costs and one-time integration costs

 

 

 

 

 

86

 

 

 

34

 

 

 

401

 

Lease amortization for finance leases

 

 

449

 

 

 

 

 

 

941

 

 

 

 

Refund for prior year overpayment of USF fees

 

 

 

 

 

 

 

 

 

 

 

(3,511

)

Adjusted gross profit

 

$

146,520

 

 

$

129,797

 

 

$

555,696

 

 

$

477,185

 

Adjusted gross margin

 

 

61.3

%

 

 

62.3

%

 

 

61.0

%

 

 

61.3

%

FIVE9, INC.

RECONCILIATION OF GAAP NET LOSS TO ADJUSTED EBITDA

(In thousands, except percentages)

(Unaudited)

 

 

 

Three Months Ended

 

Twelve Months Ended

 

 

December 31, 2023

 

December 31, 2022

 

December 31, 2023

 

December 31, 2022

 

 

 

 

 

 

 

 

 

GAAP net loss

 

$

(12,358

)

 

$

(13,653

)

 

$

(81,764

)

 

$

(94,650

)

Non-GAAP adjustments:

 

 

 

 

 

 

 

 

Depreciation and amortization

 

 

12,962

 

 

 

11,021

 

 

 

48,515

 

 

 

44,671

 

Stock-based compensation

 

 

49,571

 

 

 

43,824

 

 

 

206,292

 

 

 

172,507

 

Interest expense

 

 

1,963

 

 

 

1,887

 

 

 

7,646

 

 

 

7,493

 

Interest (income) and other

 

 

(8,322

)

 

 

(2,706

)

 

 

(26,799

)

 

 

(4,813

)

Exit costs related to closure and relocation of Russian operations(1)

 

 

243

 

 

 

2,975

 

 

 

2,313

 

 

 

7,190

 

Acquisition related transaction costs and one-time integration costs

 

 

3,670

 

 

 

1,605

 

 

 

6,780

 

 

 

6,901

 

Contingent consideration expense

 

 

 

 

 

 

 

 

 

 

 

260

 

Refund for prior year overpayment of USF fees

 

 

 

 

 

 

 

 

 

 

 

(3,511

)

Lease amortization for finance leases

 

 

449

 

 

 

 

 

 

941

 

 

 

 

Provision for income taxes

 

 

119

 

 

 

1,221

 

 

 

2,341

 

 

 

4,388

 

Adjusted EBITDA

 

$

48,297

 

 

$

46,174

 

 

$

166,265

 

 

$

140,436

 

Adjusted EBITDA as % of revenue

 

 

20.2

%

 

 

22.2

%

 

 

18.3

%

 

 

18.0

%

(1) Exit costs related to the closure and relocation of our Russian operations were $2.8 million during the year ended December 31, 2023. The $2.3 million adjustment presented above was net of $0.5 million included in “Interest (income) and other.” Exit costs related to the closure and relocation of our Russian operations were $7.9 million during the year ended December 31, 2022. The $7.2 million adjustment presented above was net of $0.8 million included in “Depreciation and amortization” and $(0.1) million included in “Interest (income) and other.”

FIVE9, INC.

RECONCILIATION OF GAAP OPERATING LOSS TO NON-GAAP OPERATING INCOME

(In thousands)

(Unaudited)

 

 

 

Three Months Ended

 

Twelve Months Ended

 

 

December 31, 2023

 

December 31, 2022

 

December 31, 2023

 

December 31, 2022

 

 

 

 

 

 

 

 

 

Loss from operations

 

$

(18,598

)

 

$

(13,251

)

 

$

(98,576

)

 

$

(87,582

)

Non-GAAP adjustments:

 

 

 

 

 

 

 

 

Stock-based compensation

 

 

49,571

 

 

 

43,824

 

 

 

206,292

 

 

 

172,507

 

Intangibles amortization

 

 

3,146

 

 

 

2,890

 

 

 

12,019

 

 

 

11,705

 

Exit costs related to closure and relocation of Russian operations

 

 

243

 

 

 

2,975

 

 

 

2,313

 

 

 

7,964

 

Acquisition and related transaction costs and one-time integration costs

 

 

3,670

 

 

 

1,605

 

 

 

6,780

 

 

 

6,901

 

Contingent consideration expense

 

 

 

 

 

 

 

 

 

 

 

260

 

Refund for prior year overpayment of USF fees

 

 

 

 

 

 

 

 

 

 

 

(3,511

)

Non-GAAP operating income

 

$

38,032

 

 

$

38,043

 

 

$

128,828

 

 

$

108,244

 

FIVE9, INC.

RECONCILIATION OF GAAP NET LOSS TO NON-GAAP NET INCOME

(In thousands, except per share data)

(Unaudited)

 

 

 

Three Months Ended

 

Twelve Months Ended

 

 

December 31, 2023

 

December 31, 2022

 

December 31, 2023

 

December 31, 2022

 

 

 

 

 

 

 

 

 

GAAP net loss

 

$

(12,358

)

 

$

(13,653

)

 

$

(81,764

)

 

$

(94,650

)

Non-GAAP adjustments:

 

 

 

 

 

 

 

 

Stock-based compensation

 

 

49,571

 

 

 

43,824

 

 

 

206,292

 

 

 

172,507

 

Intangibles amortization

 

 

3,146

 

 

 

2,890

 

 

 

12,019

 

 

 

11,705

 

Amortization of discount and issuance costs on convertible senior notes

 

 

956

 

 

 

947

 

 

 

3,749

 

 

 

3,743

 

Exit costs related to closure and relocation of Russian operations

 

 

91

 

 

 

3,344

 

 

 

2,796

 

 

 

7,932

 

Acquisition and related transaction costs and one-time integration costs

 

 

3,670

 

 

 

1,605

 

 

 

6,780

 

 

 

6,901

 

Contingent consideration expense

 

 

 

 

 

 

 

 

 

 

 

260

 

Refund for prior year overpayment of USF fees

 

 

 

 

 

 

 

 

 

 

 

(3,511

)

Tax provision associated with acquired companies

 

 

 

 

 

 

 

 

 

 

 

1,830

 

Income tax expense effects (1)

 

 

 

 

 

 

 

 

 

 

 

 

Non-GAAP net income

 

$

45,076

 

 

$

38,957

 

 

$

149,872

 

 

$

106,717

 

GAAP net loss per share:

 

 

 

 

 

 

 

 

Basic and diluted

 

$

(0.17

)

 

$

(0.19

)

 

$

(1.13

)

 

$

(1.35

)

Non-GAAP net income per share:

 

 

 

 

 

 

 

 

Basic

 

$

0.62

 

 

$

0.55

 

 

$

2.08

 

 

$

1.53

 

Diluted

 

$

0.61

 

 

$

0.54

 

 

$

2.05

 

 

$

1.50

 

Shares used in computing GAAP net loss per share:

 

 

 

 

 

 

 

 

Basic and diluted

 

 

72,926

 

 

 

70,704

 

 

 

72,048

 

 

 

69,920

 

Shares used in computing non-GAAP net income per share:

 

 

 

 

 

 

 

 

Basic

 

 

72,926

 

 

 

70,704

 

 

 

72,048

 

 

 

69,920

 

Diluted

 

 

73,785

 

 

 

71,537

 

 

 

73,011

 

 

 

71,229

 

(1)

Non-GAAP adjustments do not have an impact on our federal income tax provision due to past non-GAAP losses, and state taxes are immaterial.

FIVE9, INC.

SUMMARY OF STOCK-BASED COMPENSATION, DEPRECIATION AND INTANGIBLES AMORTIZATION

(In thousands)

(Unaudited)

 

 

 

Three Months Ended

 

 

December 31, 2023

 

December 31, 2022

 

 

Stock-Based

Compensation

 

Depreciation

 

Intangibles

Amortization

 

Stock-Based

Compensation

 

Depreciation

 

Intangibles

Amortization

 

 

 

 

 

 

 

 

 

 

 

 

 

Cost of revenue

 

$

9,182

 

$

7,162

 

$

3,146

 

$

8,638

 

$

5,913

 

$

2,890

Research and development

 

 

12,055

 

 

1,012

 

 

 

 

11,799

 

 

768

 

 

Sales and marketing

 

 

15,389

 

 

27

 

 

 

 

15,152

 

 

1

 

 

General and administrative

 

 

12,945

 

 

1,615

 

 

 

 

8,235

 

 

1,449

 

 

Total

 

$

49,571

 

$

9,816

 

$

3,146

 

$

43,824

 

$

8,131

 

$

2,890

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Twelve Months Ended

 

 

December 31, 2023

 

December 31, 2022

 

 

Stock-Based

Compensation

 

Depreciation

 

Intangibles

Amortization

 

Stock-Based

Compensation

 

Depreciation

 

Intangibles

Amortization

 

 

 

 

 

 

 

 

 

 

 

 

 

Cost of revenue

 

$

38,259

 

$

26,540

 

$

12,019

 

$

33,297

 

$

23,250

 

$

11,705

Research and development

 

 

50,430

 

 

3,583

 

 

 

 

44,367

 

 

3,164

 

 

Sales and marketing

 

 

66,229

 

 

65

 

 

 

 

59,300

 

 

4

 

 

General and administrative

 

 

51,374

 

 

6,308

 

 

 

 

35,543

 

 

6,548

 

 

Total

 

$

206,292

 

$

36,496

 

$

12,019

 

$

172,507

 

$

32,966

 

$

11,705

 

 

 

 

 

 

 

 

 

 

 

 

 

FIVE9, INC.

RECONCILIATION OF GAAP NET LOSS TO NON-GAAP NET INCOME – GUIDANCE(1)

(In thousands, except per share data)

(Unaudited)

 

 

 

Three Months Ending

 

Year Ending

 

 

March 31, 2024

 

December 31, 2024

 

 

Low

 

High

 

Low

 

High

 

 

 

 

 

 

 

 

 

GAAP net loss

 

$

(25,349

)

 

$

(20,855

)

 

$

(45,238

)

 

$

(39,202

)

Non-GAAP adjustments:

 

 

 

 

 

 

 

 

Stock-based compensation(2)

 

 

46,249

 

 

 

44,249

 

 

 

184,415

 

 

 

182,415

 

Intangibles amortization

 

 

2,643

 

 

 

2,643

 

 

 

10,570

 

 

 

10,570

 

Amortization of discount and issuance costs on convertible senior notes

 

 

938

 

 

 

938

 

 

 

3,808

 

 

 

3,808

 

Acquisition and related transaction costs and one-time integration costs(3)

 

 

3,159

 

 

 

2,159

 

 

 

8,817

 

 

 

7,817

 

Income tax expense effects(4)

 

 

 

 

 

 

 

 

 

 

 

 

Non-GAAP net income

 

$

27,640

 

 

$

29,134

 

 

$

162,372

 

 

$

165,408

 

GAAP net loss per share, basic and diluted

 

$

(0.34

)

 

$

(0.28

)

 

$

(0.61

)

 

$

(0.53

)

Non-GAAP net income per share:

 

 

 

 

 

 

 

 

Basic

 

$

0.38

 

 

$

0.40

 

 

$

2.18

 

 

$

2.22

 

Diluted

 

$

0.37

 

 

$

0.39

 

 

$

2.14

 

 

$

2.18

 

Shares used in computing GAAP net loss per share and non-GAAP net income per share:

 

 

 

 

 

 

 

 

Basic

 

 

73,600

 

 

 

73,600

 

 

 

74,600

 

 

 

74,600

 

Diluted

 

 

74,700

 

 

 

74,700

 

 

 

75,900

 

 

 

75,900

 

 

 

 

 

 

 

 

 

 

(1)

Represents guidance discussed on February 21, 2024. Reader shall not construe presentation of this information after February 21, 2024 as an update or reaffirmation of such guidance.

(2)

Stock-based compensation expenses are based on a range of probable significance, assuming market price for our common stock that is approximately consistent with current levels.

(3)

Acquisition and related transaction costs and one-time integration costs are based on a range of probable significance for completed acquisitions, and no new acquisitions assumed.

(4)

Non-GAAP adjustments do not have an impact on our federal income tax provision due to past non-GAAP losses, and state taxes are immaterial.

 

Contacts

Investor Relations Contacts:

Five9, Inc.

Barry Zwarenstein

Chief Financial Officer

925-201-2000 ext. 5959

IR@five9.com

The Blueshirt Group for Five9, Inc.

Lisa Laukkanen

415-217-4967

Lisa@blueshirtgroup.com

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