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1. Company Snapshot

1.a. Company Description

Five9, Inc., together with its subsidiaries, provides cloud software for contact centers in the United States and internationally.The company offers virtual contact center cloud platform that delivers a suite of applications, which enables the breadth of contact center-related customer service, sales, and marketing functions.Its solution enables its clients to manage these customer interactions across various channels, including voice, video, chat, email, website, social media, click-to-call, callback, and mobile channels, as well as through APIs; and provides natural language processing and automatic speech recognition solutions.


The company serves customers in various industries comprising banking and financial services, business process outsourcers, consumer, healthcare, technology, and education.Five9, Inc.was incorporated in 2001 and is headquartered in San Ramon, California.

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1.b. Last Insights on FIVN

Five9, Inc.'s recent performance has been impacted by decelerating growth, with investors weighing concerns about the company's future prospects. Despite reporting record revenue of $286 million for Q3 2025, up 8% from the previous year, and beating earnings estimates with $0.78 per share, analysts have slashed their forecasts. The company's stock repurchase plan, announced on November 11, 2025, to buy back $50 million in shares, may provide some support. Additionally, Five9's presentation at the UBS Global Technology and AI Conference and the launch of new AI-powered innovations may help drive growth. However, persistent risks and decelerating growth have kept shares under pressure.

1.c. Company Highlights

2. Five9's Q3 Earnings: Strong Bookings and AI-Driven Growth

Five9 reported a solid Q3 with revenue coming in at $286 million, representing 8% growth year-over-year. Subscription revenue, making up 81% of total revenue, grew 10% year-over-year, primarily driven by enterprise AI revenue growing 41% year-over-year. Adjusted EBITDA grew 37% year-over-year to a margin of 25%, and record free cash flow grew 84% year-over-year to a margin of 13%. The company's non-GAAP EPS for the quarter came out at $0.78, beating estimates of $0.73. The strong financial performance was driven by the company's focus on transformation initiatives, which drove bookings momentum and operating leverage.

Publication Date: Nov -09

📋 Highlights
  • Enterprise AI Bookings Surge: AI bookings grew 80% YoY, driving 10% YoY subscription revenue growth (81% of total revenue).
  • Adjusted EBITDA & Free Cash Flow Expansion: Adjusted EBITDA margin reached 25% (+37% YoY), while free cash flow margin hit 13% (+84% YoY).
  • Share Repurchase Program: $150M share repurchase announced, signaling confidence in long-term growth and shareholder value.
  • 2026 Revenue Guidance: Full-year 2026 revenue guided to $1.254B, with double-digit growth expected by H2 2026 and 2027.
  • Strategic Partnerships & AI Pricing: 60% YoY bookings growth with Salesforce, and AI products priced via consumption/capacity models to meet customer demand.

Bookings Momentum and AI Growth

Bookings were a record, with AI bookings up 80% year-over-year. The company has a strong partnership with Salesforce, with 60% year-over-year growth in bookings year-to-date. The competitive environment remains steady, with the company and its two biggest competitors dominating the pure CCaaS space. The company's focus on AI is paying off, with customers getting more comfortable with it and favoring platform players like Five9 over point solutions.

Guidance and Outlook

The company expects revenue to return to double-digit growth in the second half of 2026, with a comfortable Street consensus revenue of $1.254 billion for 2026. Non-GAAP EPS for full year 2025 is expected to be $2.94 per diluted share, and adjusted EBITDA margin expectations are raised to approximately 23%. The company expects annual adjusted EBITDA margin to expand by at least 100 basis points year-over-year to 24% plus in 2026.

Valuation and Growth Prospects

Analysts estimate next year's revenue growth at 9.5%. With a P/E Ratio of 49.17 and an EV/EBITDA of 37.83, the company's valuation multiples are relatively high, indicating that the market is pricing in strong growth prospects. The company's Free Cash Flow Yield of 10.32% is attractive, indicating a strong ability to generate cash. The company's focus on achieving the Rule of 40 in 2027 and its share repurchase program demonstrate its confidence in its ability to execute and create long-term shareholder value.

3. NewsRoom

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3 Must-Buy Small-Cap AI-Centric Stocks With Enormous Short-Term Upside

Dec -03

Source: zacks.com

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Five9, Inc. (FIVN) Presents at UBS Global Technology and AI Conference 2025 Transcript

Dec -03

Source: seekingalpha.com

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Five9: Undervalued Even As Persistent Risks Remain

Dec -02

Source: seekingalpha.com

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FIVN vs. ADSK: Which Stock Is the Better Value Option?

Dec -02

Source: zacks.com

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Ameritas Investment Partners Inc. Acquires New Stake in Five9, Inc. $FIVN

Dec -01

Source: defenseworld.net

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Five9 Announces Winners of the 2025 New Era of CX Awards at CX Summit Nashville

Nov -19

Source: businesswire.com

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Five9 Launches New Genius AI Innovations to Accelerate Agentic CX at Five9 CX Summit 2025

Nov -18

Source: businesswire.com

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Five9 (NASDAQ:FIVN) to Buyback $50.00 million in Stock

Nov -12

Source: defenseworld.net

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (11.23%)

6. Segments

Cloud Software

Expected Growth: 11.23%

Five9's Cloud Software growth is driven by increasing adoption of cloud-based contact center solutions, rising demand for omnichannel customer engagement, and growing need for AI-powered customer service. Additionally, the shift to remote work and digital transformation initiatives across industries are fueling growth. The company's strategic partnerships and innovative product offerings are also contributing to its rapid expansion.

7. Detailed Products

Cloud Contact Center

A cloud-based contact center solution that provides a comprehensive set of tools for managing customer interactions across multiple channels, including voice, email, chat, and social media.

Automatic Call Distribution (ACD)

A feature that automatically routes incoming calls to the most suitable agent based on factors such as skill level, language, and availability.

Interactive Voice Response (IVR)

A feature that allows customers to interact with a company's phone system using voice commands or keypad inputs, providing automated self-service options.

Workforce Management (WFM)

A solution that enables contact center managers to forecast, schedule, and manage agent workloads, ensuring that the right agents are available to handle customer interactions.

Quality Management

A feature that enables contact center managers to evaluate and improve agent performance, providing real-time feedback and coaching.

Analytics and Reporting

A feature that provides real-time insights and analytics on contact center performance, enabling data-driven decision-making.

8. Five9, Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

The threat of substitutes for Five9, Inc. is medium due to the presence of alternative cloud-based contact center solutions. However, the company's strong brand recognition and customer loyalty mitigate this threat.

Bargaining Power Of Customers

The bargaining power of customers is low due to the company's strong relationships with its clients and the customized nature of its solutions, making it difficult for customers to switch to alternative providers.

Bargaining Power Of Suppliers

The bargaining power of suppliers is low due to the company's diversified supplier base and the availability of alternative suppliers, reducing the dependence on any single supplier.

Threat Of New Entrants

The threat of new entrants is high due to the growing demand for cloud-based contact center solutions and the relatively low barriers to entry in the industry.

Intensity Of Rivalry

The intensity of rivalry is high due to the presence of established players in the industry, such as Amazon Connect and Genesys, and the ongoing competition for market share.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 58.38%
Debt Cost 3.95%
Equity Weight 41.62%
Equity Cost 8.20%
WACC 5.72%
Leverage 140.24%

11. Quality Control: Five9, Inc. passed 4 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Stock-Card
Remitly Global

A-Score: 4.7/10

Value: 2.6

Growth: 6.0

Quality: 6.2

Yield: 0.0

Momentum: 8.5

Volatility: 4.7

1-Year Total Return ->

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Stock-Card
Marqeta

A-Score: 4.2/10

Value: 5.4

Growth: 7.4

Quality: 3.4

Yield: 0.0

Momentum: 5.0

Volatility: 4.0

1-Year Total Return ->

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Stock-Card
MongoDB

A-Score: 4.1/10

Value: 4.0

Growth: 7.9

Quality: 4.2

Yield: 0.0

Momentum: 6.5

Volatility: 2.0

1-Year Total Return ->

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Stock-Card
Verint Systems

A-Score: 4.0/10

Value: 5.9

Growth: 4.7

Quality: 5.9

Yield: 0.0

Momentum: 3.0

Volatility: 4.3

1-Year Total Return ->

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Stock-Card
Five9

A-Score: 3.4/10

Value: 3.1

Growth: 7.6

Quality: 3.4

Yield: 0.0

Momentum: 2.0

Volatility: 4.0

1-Year Total Return ->

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Stock-Card
Confluent

A-Score: 3.3/10

Value: 4.4

Growth: 6.6

Quality: 3.8

Yield: 0.0

Momentum: 3.0

Volatility: 2.0

1-Year Total Return ->

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

20.65$

Current Price

20.65$

Potential

-0.00%

Expected Cash-Flows