Five9, Inc.

What they do

Five9 delivers its Intelligent CX Platform as SaaS for enterprise contact centers, combining cloud-native routing with a Genius AI suite that includes agentic AI agents, Agent Assist, Workflow Automation, AI Insights, AI Summaries, Workforce Engagement Management and Revenue Execution. The platform manages interactions across voice, chat, email, web, social media and mobile, either directly or through APIs. It charges monthly subscription fees primarily based on licenses, plus consumption-based fees for AI solutions and usage-based telephony revenue.

Revenue drivers

• Subscription and telecom fees — 94% of revenue in the three and six months ended June 30, 2026, from monthly subscription fees for platform access plus telephony usage billed in arrears.
• AI solutions — Consumption-based pricing for Genius AI products such as agentic AI agents, Agent Assist, WFA, AI Insights and AI Summaries; management said AI revenue is accelerating faster than subscription revenue.
• Professional services — The remaining 6% of revenue in the first half of 2026, from implementation and optimization of the solution.
• New customer wins — In Q2 2026 the company announced an approximately $100 million total contract value new customer win closed through the Google Marketplace.

Recent performance

Q2 2026 revenue rose 10% year over year to $312.4 million from $283.3 million, with subscription revenue up 14%. GAAP net income was $3.4 million, or $0.04 per diluted share, versus $1.2 million and $0.01 a year earlier. GAAP gross margin fell to 53.4% from 54.9%, and adjusted EBITDA margin declined to 22.4% from 24.0%. Operating cash flow was $42.1 million, up from $35.1 million. Full-year 2025 revenue was $1.15 billion with net income of $39.4 million.

Strategy

Five9 is positioning itself as an AI-native CX platform, with the Genius AI suite and agentic AI agents as the centerpiece of its product roadmap. It launched Five9 Voice AI Agents in Q2 2026 and closed a nine-figure total contract value deal through the Google Marketplace. Management has been reorganizing: a March 2025 reduction in force cut about 4% of global full-time employees, and in April 2026 it consolidated its San Ramon headquarters from two floors to one. In June 2026 it appointed a new CTO, Chief Sales Officer, and EVP of Transformation and Strategy. The company joined the S&P SmallCap 600 on August 3, 2026.

Risks

• AI substitution for licenses — The 10-K warns that if AI handles more contact center interactions and the company cannot replace lost license subscription revenue with AI solution sales, its revenue and results will be harmed.
• Customer concentration in existing base — A significant percentage of revenue comes from existing customers, so shifts in new sales are not immediately reflected in results, and customer terminations or subscription reductions would hit revenue and gross margin.
• Macroeconomic and tariff pressure — The company cites global tariff increases, inflation, interest rates, currency fluctuations and global conflicts as factors that could adversely affect future revenue.
• Intellectual property litigation — The 10-K states that third parties have claimed and will likely continue to claim that Five9 infringes their intellectual property, and that it may be required to indemnify customers or pay damages and royalties.

Outlook

For full-year 2026, Five9 guides revenue of $1.260 to $1.272 billion, GAAP net income per share of $0.71 to $0.82 on about 85.8 million diluted shares, and non-GAAP net income per share of $3.22 to $3.30 on about 76.3 million diluted shares. For Q3 2026 it guides revenue of $316.0 to $322.0 million, GAAP net income per share of $0.09 to $0.16, and non-GAAP net income per share of $0.77 to $0.81. Management notes the guidance assumes continued macroeconomic challenges remain a risk.