Five9 Q4 Earnings Call Highlights

Key Points

• Strong financials and upbeat guidance: Q4 revenue was $300 million (+8% YoY) and full-year 2025 revenue was $1.15 billion (+10% YoY) with Q4 adjusted EBITDA margin at 26% and free cash flow of $67 million; Five9 guided 2026 revenue to a midpoint of $1.254 billion and non-GAAP EPS midpoint of $3.18 with at least a 24% adjusted EBITDA margin.
• AI is a major growth engine: Enterprise AI bookings more than doubled YoY, enterprise AI ARR surpassed $100 million and grew ~50% YoY in Q4, while core CCaaS also accelerated, positioning Five9 as an end-to-end CX platform that leverages conversational data and orchestration as a competitive moat.
• Leadership shift as strategy continues: Amit Mathradas took over as CEO on Feb. 2, succeeding Mike Burkland after 18 years, and is prioritizing product innovation, AI, partner engagement and operational execution to scale the platform opportunity.

Five9 NASDAQ: FIVN capped its fiscal 2025 with what outgoing CEO Mike Burkland described as a “strong finish to the year,” highlighting record fourth-quarter bookings, accelerating subscription growth, and expanding profitability and cash flow. The company also marked a leadership transition, with Amit Mathradas joining as CEO on Feb. 2 and Burkland calling the earnings call his last after 18 years with the company.

Leadership transition and strategic focus

Burkland said Five9 grew from roughly $10 million in annual revenue to a “$1.2 billion run rate” during his tenure. He welcomed Mathradas, citing his background in product innovation, AI, and operational execution at scale. Mathradas said he spent his first two weeks meeting partners and customers, listening to employees, and reviewing roadmaps and operations. He said he believes customers will look to Five9 for a unified customer experience platform that can address “agentic and traditional human needs” and pledged to be clear about what is working and what needs improvement.

Q4 results: revenue growth and profitability records

Five9 reported fourth-quarter total revenue of $300 million, up 8% year-over-year. Subscription revenue, which made up 82% of total revenue, grew 12% year-over-year in Q4, which management said was an acceleration versus prior trends. Burkland said enterprise AI bookings more than doubled year-over-year and contributed to higher backlog, while enterprise AI annual run-rate revenue surpassed $100 million in the quarter.

President Andy Dignan said total bookings were a Q4 record, with install-base bookings reaching an all-time high for the third consecutive quarter, driven by upsell and cross-sell activity. He also emphasized Five9’s partner strategy, noting that more than 80% of business is partner-influenced and that the company doubled the number of partners certified to implement Five9 services in 2025.

On profitability, CFO Bryan Sheinbaum said adjusted EBITDA margin increased about 260 basis points year-over-year to 26% in Q4, while free cash flow more than doubled year-over-year to $67 million, representing 22% of revenue. Operating cash flow was $84 million, or 28% of revenue. Five9 ended the quarter with $697 million in total cash and investments.

Sheinbaum also said Q4 adjusted gross margin was 63%, down about 40 basis points year-over-year, driven by lower gross margins in telecom usage and professional services. GAAP EPS in Q4 was $0.23 per diluted share, marking five consecutive quarters of positive GAAP earnings, while non-GAAP EPS was $0.80 per diluted share.

AI and CCaaS: accelerating growth and platform positioning

Management pointed to two primary growth engines in subscription revenue: enterprise AI and core CCaaS. Sheinbaum said enterprise AI revenue growth accelerated to 50% year-over-year in Q4 and represented 12% of enterprise subscription revenue, while core CCaaS revenue growth accelerated to 8% year-over-year. He also said 228 customers with more than $1 million in ARR grew subscription revenue 24% year-over-year and represented 59% of subscription revenue.

Burkland framed Five9’s differentiation around its end-to-end platform and “conversational data,” describing a “relationship-based experience” where the platform captures and “remembers every conversation” across voice, digital, and AI-driven channels. He said the platform acts as a real-time orchestration engine across interactions handled by humans or AI agents, creating a “continuous learning loop” and “data flywheel.”

During Q&A, executives said enterprise AI growth is being driven by both new logo attach and penetration into the installed base, but they did not quantify the split. They also said AI adoption is “early days” in terms of full penetration, even as customers broadly evaluate AI initiatives.

Asked about the risk of large language model-native platforms bypassing traditional CCaaS architectures, Burkland said orchestration across channels and systems, combined with historical and real-time conversational data, creates a competitive moat. He described LLMs as “foundational technology” but argued customer service organizations cannot be run on an LLM alone.

Customer wins, vertical demand, and partner momentum

Dignan provided examples of recent wins and expansions, including expected initial ARR contributions:

• Global power management company moving from on-prem to a CCaaS foundation, citing native Salesforce and ServiceNow integrations and AI agent and agent assist capabilities (expected to result in approximately $2.8 million in ARR).
• Life, health, and financial services provider migrating from on-prem to cloud, selecting Five9 for integration with a healthcare CRM and AI suite (expected to result in approximately $1.1 million in ARR).
• Hospitality technology company migrating off a cloud competitor, citing Five9’s open platform approach and the joint partnership with Google Cloud to accelerate AI-driven CX (expected to result in approximately $3.4 million in ARR).
• Healthcare provider expansion increasing Five9 commitment from approximately $6 million to over $10 million in ARR with a three-year commitment, with a focus on AI agents for cost savings.

On vertical trends, Sheinbaum said the seasonal uptick in consumer and healthcare in Q4 was “meaningfully less” than last year for telecom usage, while subscription sequential growth was better than anticipated but still less than Q4 of the prior year. He said the company tracks 17 verticals, with the other 15 largely in line with typical sequential growth rates for Q4. Dignan added that Five9’s three biggest verticals are financial services, healthcare, and retail, and said adoption in those areas reflects the complexity and regulatory demands of enterprise deployments, including extensive integrations.

Full-year performance and 2026 outlook

For full-year 2025, Sheinbaum reported total revenue of $1.15 billion, up 10% year-over-year, with subscription revenue growth of 13%. Adjusted EBITDA margin expanded about 470 basis points to 23%, and adjusted gross margin expanded about 110 basis points to 63%. GAAP EPS was positive for the first time annually at $0.45 per diluted share, while non-GAAP EPS was $2.96 per diluted share. Operating cash flow was $226 million and free cash flow was $162 million.

Five9 initiated 2026 revenue guidance with a midpoint of $1.254 billion and guided Q1 revenue to a midpoint of $299.5 million. Sheinbaum said the company expects Q2 revenue to increase slightly quarter-over-quarter, with momentum building through the year and a return to double-digit revenue growth in the second half of 2026, driven by backlog from new logo and install-base bookings.

For profitability, Five9 guided 2026 non-GAAP EPS to a midpoint of $3.18 and GAAP EPS to a midpoint of $0.91, along with at least 24% adjusted EBITDA margin and approximately $175 million in free cash flow. The company also said it plans to host an Investor Day in late 2026 to provide additional details on strategic priorities and long-term financial outlook.

Sheinbaum said Five9 completed a $50 million accelerated share repurchase on Feb. 2, buying back approximately 2.6 million shares, with $100 million remaining under authorization through December 2027.

In closing remarks, Burkland reiterated confidence in Five9’s positioning in AI-powered customer experience and said he was “so bullish” on the company’s future, citing both the platform opportunity and Mathradas’ leadership.

About Five9 NASDAQ: FIVN

Five9, Inc 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.

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