Five9 Q2 2026 Earnings Report

Five9 EPS Results

• Actual EPS: $0.70
• Consensus EPS: $0.68
• Beat/Miss: Beat by +$0.02
• One Year Ago EPS: $0.76

Five9 Revenue Results

• Actual Revenue: $312.44 million
• Expected Revenue: $306.61 million
• Beat/Miss: Beat by +$5.84 million
• YoY Revenue Growth: +10.30%

Five9 Announcement Details

• Quarter: Q2 2026
• Date: 8/6/2026
• Time: After Market Closes
• Conference Call Date: Thursday, August 6, 2026
• Conference Call Time: 4:30PM ET

Five9 (NASDAQ:FIVN) (NASDAQ: FIVN) is a leading provider of cloud-based contact center software designed to help organizations manage customer interactions across voice, email, chat, social media and other digital channels. Its platform offers features such as intelligent routing, analytics, workforce optimization and integrated customer relationship management (CRM) connectors. The company emphasizes AI-driven capabilities, including virtual agents and predictive dialing, to enhance both agent productivity and customer experience.

Founded in 2001 and headquartered in San Ramon, California, Five9 completed its initial public offering in February 2014. Since then, it has grown its footprint to serve more than 2,000 customers in over 60 countries, spanning sectors such as financial services, healthcare, technology, retail and telecommunications. The company maintains regional offices in North America, Europe and the Asia-Pacific region, supporting a global network of partner integrators and implementation specialists. Five9’s cloud-native architecture enables rapid deployment and scalability, making it suitable for midsize operations as well as large enterprises.

At the helm of Five9 is President and Chief Executive Officer Rowan Trollope, who joined the company in 2018 after leading Cisco’s Collaboration Technology Group. Under his leadership, Five9 has focused on expanding its AI and digital engagement offerings and strengthening its partner ecosystem. The company’s product roadmap continues to prioritize innovations in omnichannel customer engagement, workforce engagement management and data-driven insights, positioning Five9 as a key player in the evolution of next-generation contact center services.

Five9 Q2 2026 Earnings Call Transcript

Key Takeaways

• Positive Sentiment: Q2 revenue was $312 million, up 10% year over year and above the high end of guidance. Subscription revenue grew 14%, while AI revenue accelerated 78% year over year.
• Positive Sentiment: Five9 raised its full-year 2026 AI revenue growth outlook to at least 60%, from more than 40% previously. AI revenue reached approximately $39 million in Q2, or about 15% of subscription revenue.
• Positive Sentiment: The company won a Fortune 100 financial-services customer in a contract worth approximately $100 million in total contract value, expected to ramp to roughly $25 million of subscription ARR. The deal was supported by Five9’s partnership with Google and is expected to contribute minimally in 2026 but grow meaningfully thereafter.
• Neutral Sentiment: Five9 maintained its full-year revenue midpoint at $1.266 billion, with second-half guidance relying primarily on converting existing backlog rather than new-logo wins. Management expects subscription dollar-based retention to improve from 107% in Q2 by approximately one percentage point in Q3.
• Negative Sentiment: Adjusted gross margin declined to 61% from 63% a year ago, while adjusted EBITDA margin fell to 22% from 24%, partly due to expanded professional-services capacity for faster AI deployments. Leadership and organizational changes are also expected to create higher temporary expenses in 2026.

Presentation

[Tony Righetti, SVP of Investor Relations at Five9]

I am Tony Righetti, Senior Vice President of Investor Relations. With me today are Amit Mathradas, Chief Executive Officer, and Bryan Lee, Chief Financial Officer. During today's conference call, certain statements will be made that are not historical facts and are considered forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements include, but are not limited to, statements regarding our quarterly and full-year 2026 guidance, expected improvements in operating and financial metrics, industry trends, including with respect to AI, our strategy, priorities, and execution, our product roadmap and technology investment, our markets, customer demand trends, our market position and opportunity, our capital allocation strategy, and other future events or results. Such statements are simply beliefs and predictions and should not be unduly relied upon by investors.

[Tony Righetti, SVP of Investor Relations at Five9]

Actual events or results may differ materially. The company undertakes no obligation to update the information in such statements. These statements are subject to substantial risks and uncertainty that could adversely affect Five9's future results and cause these forward-looking statements to be inaccurate, including the impact of adverse economic conditions, lower growth rates within our installed base of customers, failure to manage our technical operations infrastructure, unsuccessful development or market acceptance of our AI solutions, failure to maintain and develop our contact center solutions, and other risks discussed under the caption "Risk Factors" and elsewhere in Five9's annual and quarterly reports filed with the Securities and Exchange Commission. Management will refer to non-GAAP financial measures during this call.

[Tony Righetti, SVP of Investor Relations at Five9]

A discussion of why we use non-GAAP financial measures and a reconciliation of our GAAP versus non-GAAP results and guidance is currently available in our press release issued earlier this afternoon, as well as in the appendix of our investor deck that can be found in the investor relations section of Five9's website at investors.five9.com. Please note that the information provided on this call speaks only to management's view as of today and may no longer be accurate at the time of the replay. A reminder, unless otherwise indicated, financial figures discussed are non-GAAP. Now I'd like to turn the call over to Five9 CEO. Please go ahead, Amit.

[Amit Mathradas, CEO at Five9]

Thank you, Tony, and good afternoon, everyone. We delivered another solid quarter. I am pleased to report that our Q2 revenue was $312 million above the high end of our guidance. Subscription revenue grew 14% year-over-year, marking a third consecutive quarter of acceleration. AI revenue grew 78% year-over-year, and we are increasing our full-year AI growth outlook from more than 40% to at least 60% year-over-year. Together with the significant enterprise win, which I will discuss in more detail shortly, these results provide tangible evidence of the progress we are making against our priorities and are an indicator of what Five9 can look like with greater focus, speed, and operating discipline. Last quarter, on my first earnings call as CEO, I laid out four priorities for Five9: building a performance-driven culture, optimizing operations, strengthening the core business, and winning in AI-powered customer experience.

[Amit Mathradas, CEO at Five9]

This quarter, we made progress against each of those priorities, measured by the operating indicators we are focused on. The most important point is this: Five9 is sharpening its position around the opportunity we are built to lead. We are a voice-led enterprise platform for customer experience. When we say voice-led, we do not mean voice limited to human agents. Voice is the most natural, highest context interface for most customer interactions, and increasingly, those voice interactions can be handled by AI agents, human agents, or both working together. Our customers rely on us for complex, high-value integrations where reliability, governance, AI, digital workflows, data integrations, and human agents all need to work together in production. That is where our strategy is focused, and that is where Five9 has the clearest right to win. Let me start with updates on culture and operations.

[Amit Mathradas, CEO at Five9]

Last quarter, I said we needed to move with greater urgency, sharper discipline, and higher accountability. That work is underway. Our review of the market, product portfolio, and go-to-market priorities has reinforced where we should concentrate resources. Complex businesses, especially financial services, healthcare, insurance, and other regulated industries where voice compliance, integrations, governance, and human-in-the-loop workflows are not just essential but required. These are environments where Five9's platform depth is critical. The customer interactions are complex, the cost of failure is high, and the buyer needs technology that works reliably in production, not just in a demo. We are aligning our resources behind this view, we are allocating resources towards the customers, verticals, and use cases where Five9's opportunity is greatest while being more disciplined in other areas. I want to acknowledge that transparency with the investor community remains a central obligation. That means less narrative, more evidence.

[Amit Mathradas, CEO at Five9]

I believe Q2 continues to demonstrate that. On operations, we announced a significant set of organizational changes during the second quarter. These changes reflect a deliberate effort to mature our organization and put leaders in place to execute on what lies ahead. Let me take you through each area. Starting with R&D, for the first time, we are bringing our product engineering, product management, AI, automation, architectural organizations together under a single leadership structure, creating cleaner ownership across the full product life cycle and faster delivery. To lead this unified organization, I am pleased that Niranjan Vijayaragavan joined Five9 as our new Chief Technology Officer to lead this unified organization. Turning to sales, Rob Hornish was appointed Chief Sales Officer to lead our global sales organization, with a focus on strengthening go-to-market execution and driving disciplined revenue performance.

[Amit Mathradas, CEO at Five9]

As we accelerate our transformation, we have recognized the need for a dedicated function to connect our strategy to execution. Sven Linsmaier joined as Executive Vice President, Transformation and Strategy, responsible for our highest priority transformation initiatives, disciplined execution across the organization, and corporate development, including M&A. Each of these hires brings experience building modern enterprise platforms across AI, automation, digital workflow, and go-to-market execution. This is relevant because, in our opinion, the next phase of customer experience will require more than maintaining a traditional contact center. It will require bringing voice, digital, AI, data, and human workflows together into one platform. On the core business, we continue to see healthy indicators. Subscription revenue was strong, growing 14% year-over-year in Q2, driven by AI revenue growth acceleration to 78% year-over-year. Our LTM subscription Dollar-Based Retention Rate remains steady at 107%.

[Amit Mathradas, CEO at Five9]

Customers with complex needs are looking for a reliable cloud-native CX platform that delivers the best-of-breed technologies coupled with an open ecosystem. A CX platform that seamlessly connects with other critical systems offering large regulated enterprises a trusted platform that can support customer experience at scale, not a sprawl of point solutions. A powerful example is our recent win with a Fortune 100 financial services customer, representing approximately $100 million of total contract value. This was a competitive process against a select group of enterprise-grade CX providers, and we earned it on the strength of our proof of concept and our delivery and execution capabilities. Working as one team with Google and a leading global systems integrator. Notably, it is one of the first large deals transacted through the Google Cloud Marketplace, and our joint go-to-market motion with Google was a key driver of this customer's decision.

[Amit Mathradas, CEO at Five9]

Five9 was selected as a core CX platform supporting the customer's broader cloud migration strategy. We expect the current five-year agreement will ramp to approximately $25 million of ARR when fully deployed. Now, let's turn to why we believe AI is strengthening our platform. Contact centers are going through a major transformation. Service is no longer viewed only as a cost center to contain. Increasingly, enterprises see customer experience as a lever for loyalty, retention, and growth. They want to resolve more issues, respond faster, personalize more interactions, and create better outcomes for customers at scale. AI is enabling that shift by automating routine work and improving the economics of service. In many customer conversations, the ROI is becoming clearer. Better service, more capacity, faster response times, and stronger customer outcomes.

[Amit Mathradas, CEO at Five9]

That makes the move to a modern cloud-based CX platform more urgent, not less, is driving a reallocation of contact center spend away from labor and towards the type of mission-critical software that Five9 provides. Voice is central to that opportunity. It remains one of the most important channels in customer engagement. As AI handles more interactions, delivers more insights, and improves agent quality, the value of a voice platform increases. It is no longer just about routing calls to people. It is about orchestrating the handoff between people, AI voice agents, AI digital agents, data, compliance, security, and governance inside one production environment. That is why voice is the starting point for our strategy. The question is not whether AI will penetrate the voice channel. It already has.

[Amit Mathradas, CEO at Five9]

The question is whether enterprises deploy voice AI as a disconnected point product or inside a trusted CX platform that already manages voice, routing, data, governance, and human handoffs. We believe the enterprise answer favors Five9. That is why we believe AI can be a catalyst for CCaaS growth. It increases the importance of the platform as critical infrastructure that connects all these elements that enterprises require. To be clear, AI point solution companies will continue to bring useful features to market quickly, and some will solve real problems in the simpler CX environments. In complex enterprise environments, being early with a feature is not the same as being trusted as an operating platform. These customers need AI embedded into the platform they already depend on. That is why our focus is not AI in isolation.

[Amit Mathradas, CEO at Five9]

It is AI agents and human agents working together across voice and digital channels inside one trusted platform to deliver Humanic CX. Over time, AI agents will handle a larger share of customer interactions, including many routine and multi-step service requests. Human agents will remain essential for complexity, judgment, empathy, escalation, and oversight. The value comes from orchestrating both together so the customer experience is seamless and the platform learns from every interaction. This is where we believe the category is going. Five9 is built for that future. We are also delivering new products that directly support this strategy. In June, we advanced our AI-powered CX initiative with the release of the next gen Five9 Voice AI Agents, a re-architecture of our voice AI capabilities built from the ground up for the Humantic world we believe is upon us.

[Amit Mathradas, CEO at Five9]

Voice AI Agents are designed to reason, act, resolve customer requests with seamless handoffs to human agents when needed. What sets this apart is that it is built natively into Five9's carrier-grade telephony, where data, knowledge, and orchestration are shared across the entire platform. Enterprise voice AI is not just about answering customer questions. It is about knowing when to act, when to escalate, and how to bring in humans with context. It is also about operating inside governed workflows where reliability, control, and oversight are essential. Customer engagement is not an open-ended chatbot environment. It is rules-driven, operationally sensitive, and tied to real workflows. These are the problems we can solve. We are seeing evidence of this strategy working in the quarter.

[Amit Mathradas, CEO at Five9]

Customers are adopting AI capabilities at an accelerating pace. We are seeing continued demand from enterprises that need trusted AI infrastructure as they modernize customer experience in the cloud. In closing, we have a strategy that is progressing and a sharper operating focus. The work is not complete. The progress is real. We are concentrating our resources where Five9 has the strongest right to win. We believe AI strengthens the value of our core platform, expands our monetization opportunity, and accelerates the need for a trusted cloud CX infrastructure. With that, I'll turn the call over to Bryan.

[Bryan Lee, CFO at Five9]

Thank you, Amit. Good afternoon, everyone. I'll take you through our Q2 financial results. Then walk through our updated guidance. Q2 revenue was $312 million, up 10% year-over-year. Of the total for the quarter, contributions from subscription, telecom, and professional services were approximately 83%, 11%, and 6% respectively. Our subscription revenue grew 14% year-over-year, made up of two components. First, our CCaaS revenue grew a stable 7% year-over-year as expected. Second, our AI revenue accelerated to 78% year-over-year growth. This acceleration in AI revenue was driven by several customers in our backlog ramping earlier than forecasted, pulling forward the deployment timeline rather than reflecting an increase in deal scope. As a result, AI revenue reached approximately $39 million in Q2, representing an annual run rate revenue of over $150 million.

[Bryan Lee, CFO at Five9]

Additionally, AI revenue now makes up approximately 15% of total subscription revenue, up from approximately 9% a year ago. Also, I'd like to point out that our concurrent seat count grew in line with our CCaaS revenue growth. Looking ahead, we continue to expect CCaaS revenue growth to generally track the sequential progression of total revenue growth in our guidance for the remainder of the year, driven by the timing of backlog converting to revenue. For AI revenue, we now anticipate full year 2026 growth to be at least 60% year-over-year, up from our prior outlook of more than 40%, reflecting the earlier than forecasted ramps I mentioned a moment ago. LTM subscription dollar-based retention rate was 107% in Q2, in line with our expectations. We anticipate this key metric to increase in Q3 by approximately one percentage point driven by existing backlog. Now turning to profitability.

[Bryan Lee, CFO at Five9]

Adjusted gross margin in Q2 was 61% compared to 63% in Q2 2025. Adjusted EBITDA in Q2 was $70 million or 22% of revenue, compared to $68 million or 24% of revenue in Q2 2025. Both metrics were impacted by a temporary expansion of professional services capacity, enabling us to address customer demand to deploy their AI solutions earlier than anticipated. We expect adjusted gross margin to ramp through the second half of the year. Please note that the sequential comparison of Q2 2026 versus Q1 2026 for both adjusted gross margin and adjusted EBITDA margin was also affected by previously disclosed one-time vendor discount of slightly more than one percentage point of margin that benefited Q1 2026 and did not recur in Q2 2026.

[Bryan Lee, CFO at Five9]

In terms of cash flow, cash from operations was $42 million or 13% of revenue, and free cash flow was $15 million or 5% of revenue. Please note that in addition to Q2 cash flow being seasonally the lowest quarter of each year, there were two non-recurring items, including variability from our transition to annual customer payments and a pull forward of some capital expenditures from the second half of the year into Q2. We ended the quarter with approximately $654 million in cash equivalents, and short-term investments. We continue to be on track for purchase of PP&E to come in at approximately 3.5% of revenue for 2026. As a reminder, this is temporarily elevated approximately one percentage point above last year's rate in order to support our global data center refresh in 2026. On share repurchase, the $90 million ASR is well underway.

[Bryan Lee, CFO at Five9]

We received an initial delivery of 3.1 million shares, representing approximately 80% of the total shares expected to be purchased under the program. The remainder is expected before September 30th. The new $200 million board authorization we announced last quarter continues to be available, and we will deploy it opportunistically. Before moving to guidance, I would like to touch on the Fortune 100 financial services customer win that Amit highlighted. This is a five-year contract with total contract value of approximately $100 million, comprised of both subscription and professional services, and we expect this customer to reach approximately $25 million in subscription ARR once fully deployed. Currently, we're in the initial planning phase, and we expect a negligible subscription revenue contribution in 2026, followed by a gradual ramp in 2027, and more meaningful increases thereafter, similar to ramp schedules of prior deals of comparable magnitude. Moving to our outlook.

[Bryan Lee, CFO at Five9]

For total revenue in the third quarter, we're guiding to a midpoint of $319 million, with a range of $316 million-$322 million. For the full year of 2026, we're guiding total revenue to a midpoint of $1.266 billion, with a range of $1.26 billion-$1.272 billion, which is up from our prior midpoint guidance of $1.26 billion. Consistent with what we said last quarter, conversion of backlog to revenue is the key driver of our revenue guidance for the remainder of the year, with essentially no dependency on go-get of new business. For non-GAAP EPS in the third quarter, we're guiding to a midpoint of $0.79 per diluted share, with a range of $0.77-$0.81 per diluted share. Our guidance for 2026 non-GAAP EPS is unchanged, with a midpoint of $3.26 per diluted share and range of $3.22-$3.30 per diluted share.

[Bryan Lee, CFO at Five9]

We continue to anticipate annual adjusted EBITDA margin to exceed 24% and annual free cash flow to be approximately $175 million. Please keep in mind that our organizational design initiatives, including recent appointments to our leadership team, are expected to generate higher temporary expenses in 2026, but provide longer-term cost efficiencies, along with improved focus, speed, and effectiveness. Please refer to the presentation posted on our investor relations website for additional estimates, including share count and taxes, as well as GAAP to non-GAAP reconciliations. Finally, I'm pleased to announce that we're finalizing the date of Investor Day in the fourth quarter of 2026, and we look forward to sharing additional details in the coming months. With that, I'd like to open the call for Q&A. Operator, please go ahead.

[Tony Righetti, SVP of Investor Relations at Five9]

Thank you, Bryan. Before we begin our Q&A session, we ask that our analysts limit themselves to one question to allow for as many questions as time permits. Our first question comes from DJ Hines of Canaccord. Please unmute yourself and ask your question.

[DJ Hines, Analyst at Canaccord]

Hey. Thank you, guys. Can you hear me all right?

[Bryan Lee, CFO at Five9]

We can.

[Tony Righetti, SVP of Investor Relations at Five9]

We can hear you well.

[DJ Hines, Analyst at Canaccord]

Awesome. Congrats on the nice quarter and especially the large deal. That's super exciting. Amit, I have a high-level AI question for you. As AI agents increasingly operate across the contact center, CRM systems, back office systems, which platform ultimately owns the orchestration layer, and what does Five9 need to control directly? Do partnerships make more sense? Does it matter to your financial profile? Just walk me through your thinking there.

[Amit Mathradas, CEO at Five9]

Yeah. Thank you for the question, DJ. Look, I think one of the things that I wanted to set out by just defining is our belief is that humans and AI are going to come together to really start delivering new economics in the contact center, as well as improved experiences, and new ways of doing business. I think we're starting to see that. I think to your question on AI agents, look, the one thing that I would say we have that is very powerful is the fact that we built this business with the heritage of voice. We understand telephony. We own the routing, and I think that is a key differentiator when you think about point solutions or other players on how they service their customers. Let me give you an example.

[Amit Mathradas, CEO at Five9]

Today, DJ, you come in, you are a customer which has a very specific need around a billing issue, and you are infuriated because you're frustrated with the outcome. What would happen as you talk to an AI agent, if you were a point solution or outside the routing engine, what happens is, when the AI agent identifies you and says, "Hey, you have a problem," it'll send you to the billing queue. What a company like Five9 can do is, because we have run agentic quality management on all your agents, have already identified which agents are best of breed to handle that question, which agents have a high empathy score, and now with my agentic routing, I can send that call specifically to that one agent that has high empathy and high ability to answer that question.

[Amit Mathradas, CEO at Five9]

I think the way I think about it is, look, as a point solution, you are the hammer. You can come in and give a 50% containment rate. A company like Five9 that is built around voice is the entire toolbox, right? We can drive the next set of resolution and containment

[Amit Mathradas, CEO at Five9]

Every single point of resolution and containment that we can drive on top because of these capabilities is millions of dollars to the end user. That's where I think about how AI and voice AI fits in, why I think companies that are built around voice, own the routing, and other capabilities are best suited to service this customer across the stack.

[DJ Hines, Analyst at Canaccord]

Very helpful. Thank you.

[Tony Righetti, SVP of Investor Relations at Five9]

Our next question comes from Sitikantha Panigrahi of Mizuho. Please unmute yourself and ask your question.

[Sitikantha Panigrahi, Analyst at Mizuho]

Great. Thank you. It's great to see the double-digit growth earlier than your second half plan. I want to ask you about your conviction on the second half, double-digit growth, especially as you see the momentum in the business. What gets you that kind of confidence? Any color on that other large financial deal that you signed in terms of deployment?

[Bryan Lee, CFO at Five9]

Yeah, absolutely. I'll walk you through that, Siddhi, and please chime in, Amit, if you have any additional points. If you look at our I'm going to start with our Q2 results. As you said, total revenue growth got into the double digits, growing from 9% in Q1 to 10% in Q2, and that was primarily driven by our subscription revenue. If you break that down between CCaaS and AI, CCaaS revenue was stable at 7% year-over-year, which is exactly what we anticipated. AI revenue did accelerate to 78% from 68% the prior quarter, and that was primarily driven by several customers who were ready to deploy faster than what we forecasted. As we've always said, we have the PS resources to throttle up and down to meet whatever the customer demands are.

[Bryan Lee, CFO at Five9]

Even if you exclude those customers, by the way, our AI revenue growth still would've been in and around that 68% that we reported in Q1. Fast-forwarding to the second half, the shape of the curve there and the confidence that we get is all around the backlog. Every customer in that backlog has a unique schedule ramp that we have great visibility into and will continue to execute against that. That's what's underlying it. I just, as a reminder, I want to let everyone know that we have essentially no dependency on new logo focus to get to that guidance in the second half of the year. Just from a ramp perspective for the Fortune 100 financial services company that we just won, Amit mentioned during the call, it's $100 million approximately in TCV that has both subscription and PS.

[Bryan Lee, CFO at Five9]

It's a five-year contract on our new revenue commitment model. If you look at the ramp of it's going to be immaterial contributions in 2026 to subscription revenue, ramp more so in 2027, and meaningfully bigger increases thereafter. It'll mirror a lot of the shape of the curve with ramps that other customers of this magnitude had in the past.

[Sitikantha Panigrahi, Analyst at Mizuho]

Great. Thanks for that color.

[Tony Righetti, SVP of Investor Relations at Five9]

Our next question comes from Arjun Bhatia of William Blair. Please unmute yourself and ask your question.

[Arjun Bhatia, Analyst at William Blair]

Yeah, perfect. Thank you. Bryan, if I can just keep going on that sort of line of questioning. The large financial services customer, was there a change in that timeline? I don't know why I thought maybe there was supposed to be more meaningful contribution in 2026. I guess part of what I'm trying to get to is, you had a great quarter. It seems like AI revenues are accelerating. I think the full year guide maybe kept the back half outlook the same despite the strong performance in Q2.

[Bryan Lee, CFO at Five9]

Yeah. Arjun, great point. I want to clarify one thing. When I talk about the Fortune 100 financial services company, that's the new logo win that we had in Q2. I believe the financial services company you're referring to is the Fortune 50 services company that we won a couple of years ago, and that started ramping in 2025. It is in our backlog, and that's been ramping more so throughout 2026, and it'll be a multi-year journey beyond that as well. Now, to answer your point about keeping the second half guidance the way it was, is because if you think about the AI revenue growth acceleration that I mentioned earlier, essentially what we did was their ramps were supposed to happen in Q3, Q4, and they're ready to move faster with the deployment.

[Bryan Lee, CFO at Five9]

We essentially increased our PS capacity to bring that ramp forward into Q2. Essentially Q3, Q4 remains the same and still very strong in that double-digit growth is what we're guiding to. We pulled that forward to accelerate in Q2.

[Arjun Bhatia, Analyst at William Blair]

Okay. Got it. That clarifies it. Thank you.

[Tony Righetti, SVP of Investor Relations at Five9]

Our next question comes from Raimo Lenschow of Barclays. Please unmute yourself and ask your question.

[Raimo Lenschow, Analyst at Barclays]

Perfect. Thank you. I wanted to stay on that Fortune 100 customer. I wanted to make it slightly more bigger for, as an industry theme, though. The idea of large customers moving to cloud-based data center, sorry, call centers, has been a theme for a while. It was always like, can you handle as a cloud provider, can you handle the size of the seats, et cetera? This is now the second big reference customer for you coming up. What do you see in terms of industry and the industry realizing that if you want to do AI, you need to be in the cloud. On voice it doesn't work. What does it also tell us about customers being comfortable of you being able to handle these larger seat numbers? Thank you.

[Amit Mathradas, CEO at Five9]

Yeah. Thank you for the question. I'll start. Bryan, feel free to chime in. Look, just as you said, this was a migration for this customer from their on-prem to cloud. We are starting to see some of that shift happening. It's always been in the backlog and there are a number of deals that sit there that are

[Amit Mathradas, CEO at Five9]

We're keeping an eye on as they progress. The one thing I think you called out, which is real, is look, when customers come to us and they deploy AI, particularly voice AI, on-prem, the architecture of on-prem is not specifically built to go run agentic voice at its best output. In some cases, that actually forces customers to start taking a look at it migrating to cloud and moving in that direction. This is one of the, I wouldn't say the only reason, but this is one of the reasons why this large customer started looking at, "Hey, how do we actually start making this jump so we can start taking advantage of these new technologies that are available?" Talking about Five9, look, I think you just mentioned it.

[Amit Mathradas, CEO at Five9]

We have now proven over and over again, this is really exciting, that we have the right to go win these sorts of customers. Our technology is reliable and useful, and customers are going into it. Our delivery is another big capability. That is one big proof point that is great for us to see and great for the market to see as well. The other piece that I wanted to flag is this is also a major win for our partnership with Google, right? One of the reasons we won this deal is we went in with them and showcased the strength of our joint platform and integration, and the ability for us to solve this large customer's needs across all different facets. As called out in the script, this was the first full-size deal that we transacted through the Google Marketplace.

[Amit Mathradas, CEO at Five9]

Really excited about that and what comes next with that.

[Raimo Lenschow, Analyst at Barclays]

Thank you.

[Tony Righetti, SVP of Investor Relations at Five9]

Our next question comes from Scott Berg of Needham. Please unmute yourself and ask your question.

[Scott Berg, Senior Analyst at Needham]

Hi, Amit and Bryan. Nice quarter, and thanks for taking my questions. I wanted to follow up on Raimo's question there on the large Fortune 100 win through the Google marketplace, Amit, you just mentioned it's the first full size deal that you won through that channel opportunity. How do you make that be repeatable? If you told me you had a new channel through the Google marketplace, I would've thought you're going to get a lot of these kind of dolphin deals of $1 million + that the company's historically signed. Something that can ramp to $25 million seems like a much larger deal than I would've thought of out of that marketplace. How do you make this repeatable? What type of resources is Google maybe helping throw at this with you to get involved with more of these things?

[Amit Mathradas, CEO at Five9]

Yeah. Thank you, Scott, for the question. Look, when I look at the pipeline with them, there's a variety of deals. It's not just one size fits all, just wanted to flag that. Obviously, we will keep working them. In some of these cloud migrations, especially the ones from on-prem to cloud, they tend to be the larger customers, and this is one that came through first. Talking about the resources and working together with them. Look, we've always said this wasn't just a signature deal in terms of signing a joint agreement and selling. This was hands-on-keyboard, right? Driving better integrations, driving the solution is one, and those are investments that have already been made from us, and we will continue to make them with Google as the needs evolve and we play in different parts of the ecosystem. I'll leave it at that.

[Amit Mathradas, CEO at Five9]

Hope that answers your question.

[Scott Berg, Senior Analyst at Needham]

Very helpful. Thank you.

[Tony Righetti, SVP of Investor Relations at Five9]

Our next question comes from Elizabeth Porter from Morgan Stanley. Please unmute yourself and ask your question.

[Elizabeth Porter, Analyst at Morgan Stanley]

Great. Thank you so much. I wanted to follow up on the comment about the AI deals ramping faster than expected. Was just curious what's driving that faster time to production. Is there any sort of improvements in Five9's ability to implement greater customer readiness, data maturity, or just buyers becoming more comfortable? Really importantly, how repeatable is that improvement across the broader pipeline? Thank you.

[Bryan Lee, CFO at Five9]

Elizabeth, thanks for the question. What we always say is that we have the resources to drive deployments as quickly as the customer needs. In this situation, especially with larger customers, there are many different business units and different players with different needs that have to all align and come together. Our professional services organization builds a bottoms-up forecast with the customer to figure out exactly what that ramp schedule is going to look like. This was one of those situations where the customer aligned really quickly internally on their end, and they came to us and said, "Let's go. We can move much faster. We want to get this up and running." As I said, we can ramp up our PS resources to meet that demand on the spot, and that's exactly what happened with several of our customers.

[Bryan Lee, CFO at Five9]

We are, of course, continuing to get more and more efficient in the way we implement, especially as we get experience with these larger customers in the backlog that we continue to ramp. It's really more a function of the alignment that the customer finds on their end.

[Amit Mathradas, CEO at Five9]

I'll add one piece to that. I think one part of your question was what's happening for this level of acceleration. Look, even if we remove the ramps for these large customers, our AI growth this quarter would have mimicked last quarter. Pretty sizable net of pulling all these deals forward. What is happening is we are seeing customers across the stack starting to call us for AI, whether it is new logos where we have a high attach. In fact, every million-dollar deal that goes out the door has 100% attach of AI. Our base is reacting very positively in taking us up on our AI solutions.

[Amit Mathradas, CEO at Five9]

What really is the unifying theme is it's the human in the middle. The Five9 stack is really what, whether it is being purchased today in terms of CCaaS or later is what customers are coming to us for and saying, "We want your solutions to solve the human-in-the-middle component, and how do we expand from what we have?" Maybe in some cases even start with AI and follow up with CCaaS. I just wanted to share with you what we see happening around the business.

[Tony Righetti, SVP of Investor Relations at Five9]

Our next question comes from Catharine Trebnick of Rosenblatt. Please unmute yourself and ask your question.

[Catharine Trebnick, Senior Research Analyst at Rosenblatt]

Yeah. Thank you. Thanks for taking the question. Nice quarter. Can you unpack a little on the, what was the pipeline win rates trend through the quarter versus 90 days ago? Then add into it, you added some new leadership in. How has that changed the execution and enthusiasm of your sales force? Thank you.

[Bryan Lee, CFO at Five9]

Hi, Catharine. I'll take the first part and then hand it over to Amit. In terms of our pipeline and conversion, everything's running on track overall. We're pleased with the momentum that we're seeing in the business, nothing substantial to note on that front. Of course, we shared with you the large customer win that was a very good momentum that we're seeing in the business.

[Amit Mathradas, CEO at Five9]

Yeah, look, when you asked around the leadership, particularly around sales. Look, first of all, I am super excited to welcome Niranjan, Sven, and Rob to the company. They bring a tremendous amount of experience in. In my opening remarks, I said that my job was to move this business faster, remove roadblocks, find synergy points. This was what some of this hiring was about. In particular, to the sales team. Look, as we transition to winning more enterprise-level deals, as we transition from CCaaS and AI sales to selling platforms and outcomes and solutions, we needed to shift how we approach our market, how we work with J. Le, our new Chief Marketing and and Growth Officer. Rob brings the perfect set of experience working with mid-markets, enterprise, bringing the next level of discipline, transparency, and shift from product to solution selling within the business.

[Amit Mathradas, CEO at Five9]

Our sales teams and, as a matter of fact, all the teams where these new leaders have come in, there's a new pep in the step, right? People are excited by what is happening in the business, some of the progress we're making, some of the wins we're getting, and now a new horizon of leadership that can take us from $1.3 billion-$3 billion, and what that does for the business. I'll pause there, but I think people are generally excited about it.

[Catharine Trebnick, Senior Research Analyst at Rosenblatt]

Thank you.

[Tony Righetti, SVP of Investor Relations at Five9]

Our next question comes from Terry Tillman of Truist. Please unmute yourself and ask your question.

[Giancarlo Valle, Analyst at Truist]

Hi, guys. Giancarlo on for Terry. Congrats on the quarter, and thank you for taking the question. Just wanted to ask how the end market health has been based on contact center seats. Are we seeing it stable or growing? What are the customers sharing as we move out to the next six-12 months? Thanks.

[Bryan Lee, CFO at Five9]

Yeah. Giancarlo, we mentioned that if you look at our concurrent agent seat count, it's growing at a healthy rate that's relatively in line with our CCaaS subscription revenue growth rate. We continue to see subscription revenue per seat increasing in the single digits, very consistent to what we've seen in the past as well. If you look forward, we really have not seen that seat compression, nor have our customers. What's been resonating really well with our customer is the fact that we're going to this revenue commit model, which gives them the flexibility between the next three to five years, the mix between human agent seats versus AI agents. It gives them a lot of flexibility in terms of changing that mix. The predictability and the flexibility has been resonating well, while giving us that visibility into revenue too.

[Bryan Lee, CFO at Five9]

For instance, the Fortune 100 financial services company is on that model as well.

[Giancarlo Valle, Analyst at Truist]

Got it. Thanks, guys.

[Tony Righetti, SVP of Investor Relations at Five9]

Our next question comes from Will Power of Baird. Please unmute yourself and ask your question.

[Yanni Samoilis, Research Associate at Baird]

This is Yanni Samoilis for Will Power. Thanks for taking the question. Maybe one more on the Fortune 100 financial services win. Was hoping you could just talk a bit more about that bake-off. Were any of the smaller voice AI players in the mix? Just curious if it was more of a traditional bake-off. I think you alluded to it a second ago, but it sounds like that customer might be deploying some of your AI products. Just wondering if that's IVAs or if there's other vendors that you're planning to integrate with for some of the AI solutions. Thank you.

[Amit Mathradas, CEO at Five9]

Thank you for the question. Look, given the size of deal and what was going down, it was really some of the known names that you would expect that would play in this space. At this point, the award has been for the CCaaS portion of the business. Of course, as the conversations continue with the customer and new facets emerge, we'll bring you along for that. I hope that gives you the color of what was happening with the deal, who was in it, and what this piece is about.

[Yanni Samoilis, Research Associate at Baird]

Thank you.

[Tony Righetti, SVP of Investor Relations at Five9]

Our next question comes from Jackson Ader of KeyBanc. Please unmute yourself and ask your question.

[Jack Nichols, Analyst at KeyBanc]

Hey, thanks guys for taking the question. This is Jack on from Jackson Ader. Could you talk a little bit about the sources of revenue upside we could see relative to the incremental go get and that cross-sell for the rest of the year?

[Bryan Lee, CFO at Five9]

Yeah. Jack, for the rest of the year, I think this is the way I would break it down. First of all, let me talk about it from a CCaaS versus AI perspective and also bring in some of the DBRR points as well. First of all, I mentioned earlier that we're not depending on any new logo go gets to meet the guidance, incremental revenue, and the guidance for the rest of the year. If you break it down between CCaaS and AI, we're expecting CCaaS revenue to mirror the shape of the curve of our total revenue guide. Then for AI, we just reported 78% in Q2, and we're saying for the annual number in 2026, the year-over-year growth will be more than 60%. That's up from the more than 40% comment that we made as an outlook last quarter.

[Bryan Lee, CFO at Five9]

Then finally, from a DBNRR perspective, we've been saying all along that we expect inflection in the second half of the year. We just reported 107% in LTM subscription DBNRR in Q2, and we're expecting that to inflect up by one percentage point in Q3.

[Jack Nichols, Analyst at KeyBanc]

That's helpful. Maybe as a quick follow-up, can you talk about where you're seeing strongest customer demand for Voice AI Agents? Is it in the self-service, agent assist, end-to-end automation? Can you help frame where the demand is there for the use cases?

[Amit Mathradas, CEO at Five9]

Yeah, sure. Look, we're fortunate that we're seeing demand in multiple use cases, whether it is simple or complex. I'll give you an example as we've launched our new Voice AI Agent. We are already seeing customers deploy them. One of them had started deploying it in a simple use case, like password reset, and next it's gone into a complex use case, which we're already working in deployment with them right now. I think in a lot of these cases, our last gen IVA was being used in high complex areas, especially in regulated industries. The new product is started off in easy use cases, but have already started to work their way into more complex scenarios. We're seeing the pipeline for those kind of use cases build, so excited about that.

[Tony Righetti, SVP of Investor Relations at Five9]

Our next question comes from Samad Samana of Jefferies. Please unmute yourself and ask your question. Our next question comes from Tom Blakey of Cantor. Please unmute yourself and ask your question. Our next question comes from Rishi Jaluria of RBC. Please unmute yourself and ask your question. This concludes the Q&A portion of our call. I will now hand the call back over to CEO, Amit Mathradas, for closing remarks.

[Amit Mathradas, CEO at Five9]

Thank you everyone for your questions and for joining us today. We are moving very quickly to position Five9 for a strong 2026, building directly on the speed, discipline, and focus of our first half results. At the same time, we continue to execute on our vision for Humanic CX. By coordinating human agents and AI in real time, we are positioned to deepen our competitive advantage. We look forward to speaking with you all on our next quarterly call. Have a great day.

Participants

Executives

• Tony Righetti, SVP of Investor Relations
• Amit Mathradas, CEO
• Bryan Lee, CFO

Analysts

• DJ Hines, Analyst at Canaccord
• Sitikantha Panigrahi, Analyst at Mizuho
• Arjun Bhatia, Analyst at William Blair
• Raimo Lenschow, Analyst at Barclays
• Scott Berg, Senior Analyst at Needham
• Elizabeth Porter, Analyst at Morgan Stanley
• Catharine Trebnick, Senior Research Analyst at Rosenblatt
• Giancarlo Valle, Analyst at Truist
• Yanni Samoilis, Research Associate at Baird
• Jack Nichols, Analyst at KeyBanc