Q4 2025 Five9 Inc Earnings Call Transcript
Key Points
- Five9 Inc (FIVN) reported strong Q4 results with total revenue reaching $300 million, marking an 8% growth year over year.
- Enterprise AI bookings more than doubled year over year, contributing to a healthy increase in backlog.
- Subscription revenue, which constitutes 82% of total revenue, accelerated to 12% year over year growth in Q4.
- The company achieved all-time records in Q4 with adjusted EBITDA margin increasing to 26% and free cash flow more than doubling year over year to a margin of 22%.
- Five9 Inc (FIVN) has a strong partnership with Google Cloud, enhancing its AI-driven CX solutions and accelerating innovation.
- The company faces substantial risks and uncertainties, including macroeconomic challenges such as inflation, high interest rates, and currency exchange rate fluctuations.
- Adjusted gross margin decreased by approximately 40 basis points year over year, primarily due to lower margins in telecom usage and professional services.
- The dollar-based retention rate (DBRR) decreased from 107% in Q3 to 105% in Q4, indicating a slight decline in customer retention.
- The company anticipates a typical sequential decline in non-GAAP EPS in the first quarter of the year.
- Five9 Inc (FIVN) is still in the early stages of AI adoption within its enterprise base, indicating potential challenges in achieving full penetration.
(audio in progress) [Cash] position of the company, expected improvements in financial and related metrics, expected ARR from certain customers, certain expected revenue mix shifts, expectations regarding seasonality, customer growth, anticipated customer benefits from our solution including from AI, our AI and CCaaS revenue opportunities, and current estimations regarding the same, including the ability to leverage data in support of AI revenue opportunities, company growth, enhancements to development of our solution, market size and trends, our expectations regarding macroeconomic conditions, company market leadership positions, including the effective onboarding of our new Chief Executive Officer, business initiatives, pipeline, technology, and product initiatives, including investment in R&D and AI, including a recently announced suite of our AI solutions, as well as other future events or results are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995.
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