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Five9: Five9's Q4 Results Exceed Expectations, Driven by Strong Enterprise AI Growth

Five9 reported solid Q4 results, with total revenue at $300 million, up 8% year-over-year, and subscription revenue growing 12% year-over-year. The company's adjusted EBITDA margin increased to 26%, and free cash flow more than doubled year-over-year to a margin of 22%. The earnings per share (EPS) came in at $0.8, slightly beating estimates of $0.79. For 2025, the company guides total revenue to $1.15 billion, growing 10% year-over-year, and subscription revenue growing 13% year-over-year. The adjusted EBITDA margin is expected to expand to 23%.

FIVN

USD 19.32

12.46%

A-Score: 3.2/10

Publication date: February 19, 2026

Full Report

Author: Analystock.ai

šŸ“‹ Highlights
  • Q4 Revenue Growth: Total revenue reached $300 million, up 8% YoY, with subscription revenue rising 12% YoY.
  • Enterprise AI Surge: AI revenue grew 50% YoY, achieving an annual run rate exceeding $100 million.
  • Margin Expansion: Adjusted EBITDA margin hit 26%, and free cash flow doubled to a 22% margin YoY.
  • Bookings Momentum: Enterprise AI bookings more than doubled YoY, driving a 50% growth acceleration in AI revenue.
  • 2026 Guidance: Revenue target of $1.254 billion midpoint, with non-GAAP EPS at $3.18 and double-digit growth expected by H2 2026.

Strong Momentum in Enterprise AI Revenue

Enterprise AI revenue grew 50% year-over-year, with an annual run rate surpassing $100 million. The AI revenue is all consumption and capacity-based, with the two biggest contributors being AI Agents and Agent Assist. The company sees strong momentum and acceleration across its AI portfolio, driven by both new logo attach and penetration into the installed base. The partnership with Google Cloud and the launch of their joint Enterprise CX AI solution are driving strong traction with large brands.

Guidance and Outlook

For 2026, Five9 guides revenue to a midpoint of $1.254 billion and non-GAAP EPS to a midpoint of $3.18 per diluted share. The company expects revenue to return to double-digit growth in the second half of 2026, driven by its strong backlog of bookings. The guidance suggests continued growth from both core CCaaS and AI, with AI adoption driving revenue growth and enterprise AI revenue growth offering a significant opportunity.

Valuation and Metrics

With a P/E Ratio of 37.99 and an EV/EBITDA of 10.26, the market seems to be pricing in a certain level of growth for Five9. The company's Free Cash Flow Yield of 12.08% is also attractive. The return on equity (ROE) stands at 5.36%, indicating a relatively modest return on shareholders' equity. As the company continues to grow its AI revenue and expand its margins, investors will be watching to see if the company can maintain its growth trajectory and improve its returns.

Operational Highlights

The company's net retention rate (NRR) inflected upward, driven by both core CCaaS and AI. The consumer and healthcare verticals saw a more favorable uptick than expected, although telecom usage revenue was weaker than last year. The company sees strength in its largest verticals: financial services, healthcare, and retail, with AI adoption driving growth and AI features helping land new customers and expand existing relationships.

Five9's A-Score