Five9 Reports First Quarter 2015 Results
12 Maio 2015 - 5:05PM
Record Revenue of $30.3 Million, Up 25%
Year-Over-Year
Continues Significant Bottom Line Improvement
Raises 2015 Guidance
Five9, Inc. (Nasdaq:FIVN), a leading provider of cloud contact
center software, today reported results for the first quarter ended
March 31, 2015.
First Quarter Highlights
- Revenue increased 25% year-over-year to a record $30.3
million
- Adjusted gross margin improved by 540 basis points
year-over-year
- Adjusted EBITDA margin improved by over 1,600 basis points
year-over-year
"We are delighted to report a great start to 2015 with results
for the first quarter that exceeded our expectations across all
metrics. Our 25% revenue growth was a blend of our fast growth
enterprise business and our steady growth SMB business. We
continued to improve gross margins and diligently manage expenses,
resulting in further significant EBITDA margin improvement. Our
results demonstrate our continued ability to drive solid top line
growth while making significant progress on our path to
profitability. We believe demand remains strong for our cloud-based
software solution and as a result we are increasing our guidance
for 2015."
- Mike Burkland, President and CEO, Five9
First Quarter 2015 Financial Results
- Total revenue for the first quarter of 2015 increased 25% to
$30.3 million compared to $24.3 million for the first quarter of
2014.
- Annual dollar-based retention rate for the period ended March
31, 2015 was 95%.
- GAAP gross margin was 51.2% in the first quarter of 2015
compared to 45.8% for the same period in 2014.
- Adjusted gross margin was 56.6% for the first quarter of 2015
compared to 51.1% for the same period in 2014.
- Adjusted EBITDA for the first quarter of 2015 was a loss of
$(3.2) million, or 10% of revenue, compared to a loss of $(6.5)
million for the first quarter of 2014, or 27% of revenue.
- GAAP net loss for the first quarter of 2015 was $(8.9) million,
or $(0.18) per share, compared to a GAAP net loss of $(8.3)
million, or $(1.48) per share, for the first quarter of 2014.
- Non-GAAP net loss for the first quarter of 2015 was $(5.9)
million, or $(0.12) per share, compared to a non-GAAP net loss of
$(8.7) million, or $(1.55) per share, for the first quarter of
2014.
A reconciliation of the non-GAAP financial measures to their
related GAAP financial measures is set forth in the tables attached
to this release.
Business Outlook
- For the second quarter of 2015, Five9 expects to
report:
- Revenue in the range of $28.7 to $29.7 million
- GAAP net loss in the range of $(10.0) to $(11.0) million or
$(0.20) to $(0.22) per share
- Non-GAAP net loss in the range of $(7.6) to $(8.6) million or
$(0.15) to $(0.17) per share
- For the full year 2015, Five9 expects to
report:
- Revenue in the range of $120.0 to $124.0 million, up from the
guidance range of $117.0 to $122.0 million that was previously
provided on February 23, 2015
- GAAP net loss of $(34.7) to $(37.7) million or $(0.69) to
$(0.75) per share, improved from the guidance range of $(37.1) to
$(40.1) million or $(0.73) to $(0.79) per share, that was
previously provided on February 23, 2015
- Non-GAAP net loss in the range of $(24.4) to $(27.4) million or
$(0.49) to $(0.54) per share, improved from the guidance range of
$(27.4) to $(30.4) million or $(0.54) to $(0.60) per share, that
was previously provided on February 23, 2015
Conference Call Details
Five9 will discuss its first quarter 2015 results today, May 12,
2015, via teleconference at 4:30 p.m. Eastern Time. To access the
call (ID 6965133), please dial: 888-455-2308 or 719-325-2462. An
audio replay of the call will be available through May 26, 2015 by
dialing 888-203-1112 or 719-457-0820 and entering access code
6965133. 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 Company's expectations with respect to profitability,
the Company's demand expectations, the statements in the quote from
our Chief Executive Officer, and the financial projections 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 or could experience a reduction in seats or
revenues from 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 and gross
margins to decrease and our net loss to increase 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; (xi) we may be
unable to secure additional financing on favorable terms, or at
all, to meet our future capital needs; and (xii) 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 most recent annual
report on Form 10-K. 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, delivering software to help organizations of every size
transition from premise-based software to the cloud. With its
extensive expertise, technology, and ecosystem of partners, Five9
delivers secure, reliable, scalable cloud contact center software
to help businesses create exceptional customer experiences,
increase agent productivity and deliver tangible results. For more
information visit www.five9.com.
CONDENSED CONSOLIDATED
BALANCE SHEETS |
(Unaudited, in thousands) |
|
|
March 31, 2015 |
December 31,
2014 |
ASSETS |
|
|
Current assets: |
|
|
Cash |
$ 50,646 |
$ 58,289 |
Short-term investments |
19,999 |
20,000 |
Accounts receivable, net |
8,719 |
8,335 |
Prepaid expenses and other current
assets |
3,170 |
1,960 |
Total current assets |
82,534 |
88,584 |
Property and equipment, net |
12,426 |
12,571 |
Intangible assets, net |
2,425 |
2,553 |
Goodwill |
11,798 |
11,798 |
Other assets |
863 |
1,428 |
Total assets |
$ 110,046 |
$ 116,934 |
|
|
|
LIABILITIES AND STOCKHOLDERS'
EQUITY |
|
|
Current liabilities: |
|
|
Accounts payable |
$ 2,541 |
$ 4,179 |
Accrued and other current
liabilities |
8,107 |
7,318 |
Accrued federal fees |
7,531 |
7,215 |
Sales tax liability |
1,221 |
297 |
Notes payable |
3,528 |
3,146 |
Capital leases |
4,467 |
4,849 |
Deferred revenue |
5,641 |
5,346 |
Total current liabilities |
33,036 |
32,350 |
Revolving line of credit |
12,500 |
12,500 |
Sales tax liability |
2,303 |
2,582 |
Notes payable — less current portion |
21,698 |
22,778 |
Capital leases — less current portion |
4,560 |
4,423 |
Other long-term liabilities |
748 |
548 |
Total liabilities |
74,845 |
75,181 |
Stockholders' equity: |
|
|
Common stock |
50 |
49 |
Additional paid-in capital |
172,637 |
170,286 |
Accumulated other comprehensive loss |
(1) |
— |
Accumulated deficit |
(137,485) |
(128,582) |
Total stockholders'
equity |
35,201 |
41,753 |
Total liabilities and stockholders'
equity |
$ 110,046 |
$ 116,934 |
|
|
|
CONDENSED CONSOLIDATED
STATEMENTS OF OPERATIONS |
(Unaudited, in thousands,
except per share data) |
|
|
Three Months
Ended |
|
March 31, 2015 |
March 31, 2014 |
|
|
|
Revenue |
$ 30,274 |
$ 24,274 |
Cost of revenue |
14,778 |
13,148 |
Gross profit |
15,496 |
11,126 |
Operating expenses: |
|
|
Research and development |
6,038 |
5,225 |
Sales and marketing |
9,931 |
9,022 |
General and administrative |
7,275 |
6,171 |
Total operating expenses |
23,244 |
20,418 |
Loss from operations |
(7,748) |
(9,292) |
Other income (expense), net: |
|
|
Change in fair value of convertible
preferred and common stock warrant liabilities |
— |
1,745 |
Interest expense |
(1,139) |
(778) |
Interest income and other |
2 |
32 |
Total other income (expense), net |
(1,137) |
999 |
Loss before provision for income taxes |
(8,885) |
(8,293) |
Provision for income taxes |
18 |
27 |
Net loss |
$ (8,903) |
$ (8,320) |
Net loss per share: |
|
|
Basic and diluted |
$ (0.18) |
$ (1.48) |
Shares used in computing net loss per
share: |
|
|
Basic and diluted |
49,433 |
5,608 |
|
|
|
CONDENSED CONSOLIDATED
STATEMENTS OF CASH FLOWS |
(Unaudited, in thousands) |
|
|
Three Months
Ended |
|
March 31, 2015 |
March 31, 2014 |
Cash flows from operating
activities: |
|
|
Net loss |
$ (8,903) |
$ (8,320) |
Adjustments to reconcile net loss to net cash
used in operating activities: |
|
|
Depreciation and amortization |
1,775 |
1,592 |
Provision for doubtful accounts |
113 |
20 |
Stock-based compensation |
2,235 |
1,196 |
Loss on the disposal of property and
equipment |
10 |
— |
Non-cash interest expense |
84 |
51 |
Changes in fair value of convertible
preferred and common stock warrant liabilities |
— |
(1,745) |
Others |
(1) |
— |
Changes in operating assets and
liabilities: |
|
|
Accounts receivable |
(510) |
344 |
Prepaid expenses and other current
assets |
(1,211) |
(965) |
Other assets |
(94) |
(65) |
Accounts payable |
(1,629) |
(221) |
Accrued and other current
liabilities |
1,123 |
875 |
Accrued federal fees and sales tax
liability |
960 |
523 |
Deferred revenue |
286 |
582 |
Other liabilities |
9 |
(47) |
Net cash used in operating activities |
(5,753) |
(6,180) |
Cash flows from investing
activities: |
|
|
Purchases of property and equipment |
(198) |
(71) |
Decrease (increase) in restricted cash |
660 |
(25) |
Purchase of short-term investments |
(20,000) |
— |
Proceeds from maturity of short-term
investments |
20,000 |
— |
Net cash provided by (used in) investing
activities |
462 |
(96) |
Cash flows from financing
activities: |
|
|
Payments for deferred offering costs |
— |
(805) |
Proceeds from exercise of common stock
options and warrants |
116 |
556 |
Proceeds from notes payable |
— |
19,561 |
Repayments of notes payable |
(781) |
(264) |
Payments of capital leases |
(1,687) |
(1,282) |
Net cash provided by (used in) financing
activities |
(2,352) |
17,766 |
Net increase (decrease) in cash and cash
equivalents |
(7,643) |
11,490 |
Cash and cash
equivalents: |
|
|
Beginning of period |
58,289 |
17,748 |
End of period |
$ 50,646 |
$ 29,238 |
|
|
|
Reconciliation of GAAP
Gross Profit to Adjusted Gross Profit |
(Unaudited, in thousands,
except percentages) |
|
|
Three Months
Ended |
|
March 31, 2015 |
March 31, 2014 |
|
|
|
GAAP gross profit |
$ 15,496 |
$ 11,126 |
GAAP gross margin |
51.2 % |
45.8 % |
Non-GAAP adjustments: |
|
|
Depreciation |
1,351 |
1,114 |
Intangibles amortization |
88 |
88 |
Stock-based compensation |
188 |
87 |
Adjusted gross profit |
$ 17,123 |
$ 12,415 |
Adjusted gross margin |
56.6 % |
51.1 % |
|
|
|
Reconciliation of GAAP
Net Loss to Adjusted EBITDA |
(Unaudited, in thousands) |
|
|
Three Months
Ended |
|
March 31, 2015 |
March 31, 2014 |
|
|
|
GAAP net loss |
$ (8,903) |
$ (8,320) |
Non-GAAP adjustments: |
|
|
Depreciation and amortization |
1,775 |
1,592 |
Stock-based compensation |
2,235 |
1,196 |
Interest expense |
1,139 |
778 |
Interest income and other |
(2) |
(32) |
Provision for income taxes |
18 |
27 |
Change in fair value of convertible
preferred and common stock warrant liabilities |
— |
(1,745) |
Out of period adjustment for sales tax
liability (G&A) |
575 |
— |
Adjusted EBITDA |
$ (3,163) |
$ (6,504) |
|
|
|
Reconciliation of GAAP
Net Loss to Non-GAAP Net Loss |
(Unaudited, in thousands,
except per share data) |
|
|
Three Months
Ended |
|
March 31, 2015 |
March 31, 2014 |
|
|
|
GAAP net loss |
$ (8,903) |
$ (8,320) |
Non-GAAP adjustments: |
|
|
Stock-based compensation |
2,235 |
1,196 |
Intangibles amortization |
128 |
128 |
Non-cash interest expense |
84 |
51 |
Change in fair value of convertible
preferred and common stock warrant liabilities |
— |
(1,745) |
Out of period adjustment for sales tax
liability (G&A) |
575 |
— |
Non-GAAP net loss |
$ (5,881) |
$ (8,690) |
Non-GAAP net loss per share: |
|
|
Basic and diluted |
$ (0.12) |
$ (1.55) |
Shares used in computing non-GAAP net loss
per share: |
|
|
Basic and diluted |
49,433 |
5,608 |
|
|
|
Summary of Stock-Based
Compensation, Depreciation and Intangibles
Amortization |
(Unaudited, in thousands) |
|
|
Three Months
Ended |
|
March 31,
2015 |
March 31,
2014 |
|
Stock-Based
Compensation |
Depreciation |
Intangibles
Amortization |
Stock-Based
Compensation |
Depreciation |
Intangibles
Amortization |
|
|
|
|
|
|
|
Cost of revenue |
$ 188 |
$ 1,351 |
$ 88 |
$ 87 |
$ 1,114 |
$ 88 |
Research and development |
574 |
87 |
— |
350 |
46 |
— |
Sales and marketing |
524 |
21 |
28 |
326 |
20 |
28 |
General and administrative |
949 |
188 |
12 |
433 |
284 |
12 |
Total |
$ 2,235 |
$ 1,647 |
$ 128 |
$ 1,196 |
$ 1,464 |
$ 128 |
|
|
|
|
|
|
|
Reconciliation of GAAP
Net Loss to Non-GAAP Net Loss - GUIDANCE |
(Unaudited, in thousands,
except per share data) |
|
|
Three Months
Ending |
Year
Ending |
|
June 30,
2015 |
December 31,
2015 |
|
Low |
High |
Low |
High |
|
|
|
|
|
GAAP net loss |
$ (9,997) |
$ (10,997) |
$ (34,745) |
$ (37,745) |
Non-GAAP adjustments: |
|
|
|
|
Stock-based compensation |
2,183 |
2,183 |
8,910 |
8,910 |
Intangibles amortization |
128 |
128 |
512 |
512 |
Non-cash interest expense |
86 |
86 |
348 |
348 |
Out of period adjustment for sales tax
liability (G&A) |
— |
— |
575 |
575 |
Non-GAAP net loss |
$ (7,600) |
$ (8,600) |
$ (24,400) |
$ (27,400) |
|
|
|
|
|
GAAP net loss per share, basic and
diluted |
$ (0.20) |
$ (0.22) |
$ (0.69) |
$ (0.75) |
Non-GAAP net loss per share, basic and
diluted |
$ (0.15) |
$ (0.17) |
$ (0.49) |
$ (0.54) |
Shares used in computing GAAP and non-GAAP
net loss per share: |
|
|
|
|
Basic and diluted |
50,100 |
50,100 |
50,300 |
50,300 |
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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