Five9 Reports First Quarter 2014 Results
13 Maio 2014 - 5:05PM
Five9, Inc. (Nasdaq:FIVN), a leading provider of cloud contact
center software, today reported results for the first quarter ended
March 31, 2014.
"We delivered strong first quarter results, growing revenue by
27%. Our robust performance was fueled by the growing demand for
our integrated cloud-based software solutions. Increasingly, we are
seeing customers shift from legacy on-premise solutions as they are
drawn to the benefits of the cloud—the low up-front costs, ability
to scale on-demand, rapid deployment and the ease of management and
integration. We believe Five9 is well positioned to capitalize on
these trends in a multi-billion dollar market opportunity."
"Our recent IPO was a significant milestone for Five9 and
provides us with increased market awareness and additional
financial resources to pursue our growth strategy."
— Mike Burkland, President and CEO, Five9
First Quarter 2014 Financial Results
- Total revenue for the first quarter of 2014 increased 27% to
$24.3 million compared to $19.1 million for the first quarter of
2013.
- Annual dollar-based retention rate for the period ended March
31, 2014 was 100%.
- Adjusted EBITDA for the first quarter of 2014 was a loss of
$(6.5) million, compared to a loss of $(5.5) million for the first
quarter of 2013.
- GAAP gross margin was 45.8% in the first quarter of 2014
compared to 38.9% for the same period in 2013.
- Adjusted gross margin was 51.1% for the first quarter of 2014
compared to 43.5% for the same period in 2013.
- GAAP net loss for the first quarter of 2014 was $(8.3) million,
or $(1.48) per share, compared to a GAAP net loss of $(6.7)
million, or $(1.88) per share, for the first quarter of 2013.
Included in first quarter 2014 GAAP net loss was a benefit of $1.7
million, equivalent to $0.31 per share, due to the re-valuation of
preferred and common stock warrants relating to the pricing of the
Company's IPO.
- Non-GAAP net loss for the first quarter of 2014 was $(8.7)
million, or $(1.55) per share, compared to a Non-GAAP net loss of
$(6.6) million, or $(1.87) per share, for the first quarter of
2013.
- Per share amounts exclude the impact of our issuance of 11.5
million shares of our common stock and the conversion of 30.6
million shares of preferred stock into common stock as a result of
our initial public offering on April 4, 2014.
A reconciliation of the non-GAAP financial measures to their
related GAAP financial measures is set forth below.
Recent Business Highlights
- Completed initial public offering and began trading on NASDAQ
on April 4, 2014. Net proceeds from the IPO were approximately
$72.7 million, after underwriting discounts and estimated offering
expenses.
- Continued strong momentum in adding new customers, with key
enterprise wins in three particular vertical markets in the first
quarter – Healthcare, Technology and Retail.
- Strengthened and expanded our partnerships with leading CRM
vendors by providing valuable integrations to their offerings.
- Expanded our executive team with the addition of Scott Welch as
EVP of Cloud Operations. Scott is a cloud technology veteran with
24 years of experience in software development, technology and
operations.
Business Outlook
- For the second quarter of 2014, Five9 expects to
report:
- Revenue in the range of $24.4 to $25.2 million
- GAAP net loss in the range of $(11.6) to $(12.6) million
- Non-GAAP net loss in the range of $(9.8) to $(10.8) million
- For the full year 2014, Five9 expects to
report:
- Revenue in the range of $102.0 to $106.0 million
- GAAP net loss of $(41.7) to $(43.9) million
- Non-GAAP net loss in the range of $(36.8) to $(38.8)
million
Conference Call Details
Five9 will discuss its first quarter 2014 results today, May 13,
2014, via teleconference at 4:30 p.m. Eastern Time. To access the
call, please dial: 877-941-2068 or 480-629-9712. An audio replay of
the call will be available through May 27, 2014 by dialing
800-406-7325 or 303-590-3030 and entering access code 4680481. A
copy of this press release will be furnished to the Securities and
Exchange Commission on a Current Report on Form 8-K and will be
posted to our web site, prior to the conference call.
A webcast of the call will be available on the Investor
Relations section of the Company's website at
http://investors.five9.com/.
Non-GAAP Financial Measures
In addition to disclosing financial measures prepared in
accordance with U.S. generally accepted accounting principles
(GAAP), this press release and the accompanying tables contain
certain non-GAAP financial measures. Non-GAAP financial measures do
not have any standardized meaning and are therefore unlikely to be
comparable to similarly titled measures presented by other
companies. Five9 considers these non-GAAP financial measures to be
important because they provide useful measures of the operating
performance of the company, exclusive of unusual events, as well as
factors that do not directly affect what we consider to be our core
operating performance. The company's management uses these measures
to (i) illustrate underlying trends in the company's business that
could otherwise be masked by the effect of income or expenses that
are excluded from non-GAAP measures, and (ii) establish budgets and
operational goals for managing the company's business and
evaluating its performance. In addition, investors often use
similar measures to evaluate the operating performance of a
company. Non-GAAP financial measures are presented for supplemental
informational purposes only for understanding the company's
operating results. The non-GAAP financial measures should not be
considered a substitute for financial information presented in
accordance with GAAP. Please see the reconciliation of non-GAAP
financial measures to the most directly comparable GAAP measure
attached to this release.
Forward Looking Statements
This news release contains certain forward-looking statements,
including the statements in the quote from our Chief Executive
Officer and statements set forth under the caption "Business
Outlook," that are based on our current expectations and involve
numerous risks and uncertainties that may cause these
forward-looking statements to be inaccurate. Risks that may cause
these forward-looking statements to be inaccurate include, among
others: (i) our quarterly and annual results may fluctuate
significantly, may not fully reflect the underlying performance of
our business and may result in decreases in the price of our common
stock; (ii) we may be unable to attract new clients or sell
additional services and functionality to our existing clients;
(iii) our recent rapid growth may not be indicative of our future
growth and we may fail to manage our growth effectively; (iv) the
markets in which we participate are highly competitive and we may
be unable to compete effectively; (v) we may be unable to manage
our technical operations infrastructure, which could cause our
existing clients to experience service outages, cause our new
clients to experience delays in the deployment of our solution and
subject us to, among other things, claims for credits or damages;
(vi) a decline in our dollar-based retention rate could cause our
revenues, gross margins and net income to decrease and we may be
required to spend more money to grow our client base to
maintain our revenues; (vii) sales of our solutions to larger
organizations may require longer sales and implementation cycles
and we may be unable to offer the configuration and integration
services or customized features and functions required by larger
organizations, which could delay or prevent sales of our solution
to them; (viii) downturns or upturns in new sales will not be
immediately reflected in our operating results and may be difficult
to discern; (ix) third-party telecommunications and internet
service providers on which we rely may fail to provide our clients
and their customers with reliable telecommunication services and
connectivity to our cloud contact center software; (x) we may be
unable to achieve or sustain profitability; and (xi) the other
risks detailed from time-to-time under the caption "Risk Factors"
and elsewhere in our Securities and Exchange Commission filings and
reports, including, but not limited to, our Registration Statement
on Form S-1 and our most recent quarterly report on Form 10-Q. Such
forward looking statements speak only as of the date hereof and
readers should not unduly rely on such statements. We undertake no
obligation to update the information contained in this press
release, including in any forward-looking statements.
About Five9
Five9 is a leading provider of cloud contact center software,
bringing the power of the cloud to thousands of customers and
facilitating more than three billion customer interactions
annually. Since 2001, Five9 has led the cloud revolution in contact
centers, helping organizations of every size transition from
premise-based software to the cloud. With its extensive expertise,
technology, and ecosystem of partners, Five9 helps businesses take
advantage of secure, reliable, scalable cloud contact center
software to create exceptional customer experiences, increase agent
productivity and deliver tangible business results. For more
information visit www.five9.com.
Condensed Consolidated
Balance Sheets |
(unaudited, in thousands) |
|
|
|
|
March 31, |
December 31, |
|
2014 |
2013 |
ASSETS |
|
|
Current assets: |
|
|
Cash and cash equivalents |
$ 29,238 |
$ 17,748 |
Accounts receivable, net |
6,650 |
6,970 |
Prepaid expenses and other
current assets |
2,647 |
1,651 |
Total current assets |
38,535 |
26,369 |
Property and equipment, net |
11,179 |
11,607 |
Intangible assets, net |
2,937 |
3,065 |
Goodwill |
11,798 |
11,798 |
Other assets |
4,786 |
3,439 |
Total assets |
$ 69,235 |
$ 56,278 |
|
|
|
LIABILITIES AND STOCKHOLDERS'
DEFICIT |
|
|
Current liabilities: |
|
|
Accounts payable |
$ 3,753 |
$ 4,306 |
Accrued and other current
liabilities |
7,788 |
5,929 |
Accrued federal fees |
4,353 |
4,206 |
Sales tax liability |
90 |
98 |
Revolving line of credit |
12,500 |
-- |
Notes payable |
2,037 |
1,522 |
Capital leases |
4,907 |
4,857 |
Deferred revenue |
4,957 |
4,375 |
Total current liabilities |
40,385 |
25,293 |
Revolving line of credit — less current
portion |
-- |
12,500 |
Sales tax liability — less current
portion |
5,735 |
5,350 |
Notes payable — less current portion |
24,962 |
7,095 |
Capital leases — less current portion |
3,836 |
4,358 |
Convertible preferred and common stock
warrant liabilities |
2,647 |
3,935 |
Other long-term liabilities |
668 |
715 |
Total liabilities |
78,233 |
59,246 |
Stockholders' deficit: |
|
|
Convertible preferred
stock |
54,244 |
53,734 |
Common stock |
6 |
5 |
Additional paid-in capital |
35,868 |
34,089 |
Accumulated deficit |
(99,116) |
(90,796) |
Total stockholders'
deficit |
(8,998) |
(2,968) |
Total liabilities and stockholders'
deficit |
$ 69,235 |
$ 56,278 |
|
Condensed Consolidated
Statements of Operations |
(unaudited, in thousands,
except per share data) |
|
|
|
|
Three Months
Ended |
|
March 31, |
March 31, |
|
2014 |
2013 |
|
|
|
Revenue |
$ 24,274 |
$ 19,115 |
Cost of revenue |
13,148 |
11,681 |
Gross profit |
11,126 |
7,434 |
Operating expenses: |
|
|
Research and development |
5,225 |
4,154 |
Sales and marketing |
9,022 |
6,147 |
General and administrative |
6,171 |
3,825 |
Total operating expenses |
20,418 |
14,126 |
Loss from operations |
(9,292) |
(6,692) |
Other income (expense), net: |
|
|
Change in fair value of
convertible preferred and common stock warrant liabilities |
1,745 |
230 |
Interest expense |
(778) |
(178) |
Other income (expense),
net |
32 |
2 |
Total other income (expense), net |
999 |
54 |
Loss before provision for income taxes |
(8,293) |
(6,638) |
Provision for income taxes |
27 |
19 |
Net loss |
$ (8,320) |
$ (6,657) |
Net loss per share: |
|
|
Basic and diluted |
$ (1.48) |
$ (1.88) |
Shares used in computing net loss
per share: |
|
Basic and diluted |
5,608 |
3,536 |
|
Condensed Consolidated
Statements of Cash Flows |
(unaudited, in thousands) |
|
|
|
|
Three Months
Ended |
|
March 31, |
March 31, |
|
2014 |
2013 |
Cash flows from operating
activities: |
|
|
Net loss |
$ (8,320) |
$ (6,657) |
Adjustments to reconcile net loss to net cash
used in operating activities: |
|
|
Depreciation and
amortization |
1,592 |
958 |
Provision for doubtful
accounts |
20 |
7 |
Stock-based compensation |
1,196 |
264 |
Loss on the disposal of
property and equipment |
-- |
4 |
Non-cash interest expense |
51 |
-- |
Change in fair value of
convertible preferred and common stock warrant liabilities |
(1,745) |
(230) |
Changes in operating assets and
liabilities: |
|
|
Accounts receivable |
344 |
(144) |
Prepaid expenses and other
current assets |
(965) |
(1,194) |
Other assets |
(65) |
(166) |
Accounts payable |
(221) |
1,182 |
Accrued and other current
liabilities |
875 |
772 |
Accrued federal fees and sales
tax liability |
523 |
1,283 |
Deferred revenue |
582 |
(119) |
Other liabilities |
(47) |
197 |
Net cash used in operating activities |
(6,180) |
(3,843) |
|
|
|
Cash flows from investing
activities: |
|
|
Purchases of property and equipment |
(71) |
(115) |
Restricted cash |
(25) |
-- |
Proceeds from sale of short-term
investments |
-- |
249 |
Net cash provided by (used in) investing
activities |
(96) |
134 |
|
|
|
Cash flows from financing
activities: |
|
|
Proceeds from exercise of common stock
options |
556 |
87 |
Proceeds from notes payable |
19,561 |
-- |
Repayments of notes payable |
(264) |
(184) |
Payments of capital leases |
(1,282) |
(664) |
Payments for deferred offering costs |
(805) |
(15) |
Proceeds from revolving line of credit |
-- |
4,000 |
Net cash provided by financing
activities |
17,766 |
3,224 |
|
|
|
Net increase (decrease) in cash and cash
equivalents |
11,490 |
(485) |
Cash and cash
equivalents: |
|
|
Beginning of period |
17,748 |
5,961 |
End of period |
$ 29,238 |
$ 5,476 |
|
Reconciliation of GAAP
Gross Profit to Adjusted Gross Profit |
(unaudited, in thousands) |
|
|
|
|
Three Months
Ended |
|
March 31, 2014 |
March 31, 2013 |
|
|
|
GAAP gross profit |
$ 11,126 |
$ 7,434 |
GAAP gross margin |
45.8% |
38.9% |
Non-GAAP adjustments: |
|
|
Depreciation |
1,114 |
857 |
Intangibles amortization |
88 |
-- |
Stock-based compensation |
87 |
32 |
Adjusted gross profit |
$ 12,415 |
$ 8,323 |
Adjusted gross margin |
51.1% |
43.5% |
|
|
|
|
|
|
Reconciliation of GAAP
Net Loss to Adjusted EBITDA |
(unaudited, in thousands) |
|
|
|
|
Three Months
Ended |
|
March 31, 2014 |
March 31, 2013 |
|
|
|
GAAP net loss |
$ (8,320) |
$ (6,657) |
Non-GAAP adjustments: |
|
|
Provision for income taxes |
27 |
19 |
Other (income) expense,
net |
(999) |
(54) |
Depreciation and
amortization |
1,592 |
958 |
Stock-based compensation |
1,196 |
264 |
Adjusted EBITDA |
$ (6,504) |
$ (5,470) |
|
Reconciliation of GAAP
Net Loss to Non-GAAP Net Loss |
(unaudited, in thousands,
except per share data) |
|
|
|
|
Three Months
Ended |
|
March 31, 2014 |
March 31, 2013 |
|
|
|
GAAP net loss |
$ (8,320) |
$ (6,657) |
Non-GAAP adjustments: |
|
|
Change in fair value of
convertible preferred and common stock warrant liabilities |
(1,745) |
(230) |
Stock-based compensation |
1,196 |
264 |
Intangibles amortization |
128 |
-- |
Non-cash interest expense |
51 |
-- |
Non-GAAP net loss |
$ (8,690) |
$ (6,623) |
|
|
|
Non-GAAP net loss per share: |
|
|
Basic and diluted |
$ (1.55) |
$ (1.87) |
Shares used in computing non-GAAP net loss
per share: |
|
|
Basic and diluted |
5,608 |
3,536 |
|
Non-GAAP
Adjustments |
(unaudited, in thousands) |
|
|
|
|
|
|
|
|
Three Months
Ended |
|
March 31,
2014 |
March 31,
2013 |
|
Stock-Based
Compensation |
Intangibles
Amortization |
Depreciation |
Stock-Based
Compensation |
Intangibles
Amortization |
Depreciation |
|
|
|
|
|
|
|
Cost of revenue |
$ 87 |
$ 88 |
$ 1,114 |
$ 32 |
$ -- |
$ 857 |
Research and development |
350 |
-- |
46 |
53 |
-- |
44 |
Sales and marketing |
326 |
28 |
20 |
105 |
-- |
11 |
General and administrative |
433 |
12 |
284 |
74 |
-- |
46 |
Total |
$ 1,196 |
$ 128 |
$ 1,464 |
$ 264 |
$ -- |
$ 958 |
|
Reconciliation of GAAP
Net Loss to Non-GAAP Net Loss - GUIDANCE |
(unaudited, in thousands) |
|
|
|
|
|
|
Three Months
Ending |
Year
Ending |
|
June 30,
2014 |
December 31,
2014 |
|
Low |
High |
Low |
High |
GAAP net loss |
$ (11,569) |
$ (12,556) |
$ (41,715) |
$ (43,907) |
Non-GAAP adjustments: |
|
|
|
|
Change in fair value of
convertible preferred and common stock warrant liabilities |
-- |
-- |
(1,745) |
(1,745) |
Stock-based compensation |
1,541 |
1,541 |
5,825 |
6,025 |
Intangibles amortization |
133 |
133 |
528 |
528 |
Non-cash interest expense |
77 |
77 |
289 |
289 |
Non-GAAP net loss |
$ (9,818) |
$ (10,805) |
$ (36,818) |
$ (38,810) |
All product and company names mentioned are the property of
their respective owners.
CONTACT: Investor Relations Contact:
Barry Zwarenstein
Chief Financial Officer
Five9, Inc.
925-201-2000 ext. 5959
IR@five9.com
Lisa Laukkanen
The Blueshirt Group for Five9, Inc.
415-217-4967
Lisa@blueshirtgroup.com
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