45% Growth in LTM Enterprise Subscription
Revenue
Raised 2021 Guidance for both Revenue and
Bottom Line
Five9, Inc. (NASDAQ:FIVN), a leading provider of cloud contact
center software, today reported results for the first quarter ended
March 31, 2021.
First Quarter 2021 Financial Results
- Revenue for the first quarter of 2021 increased 45% to a record
$137.9 million, compared to $95.1 million for the first quarter of
2020.
- GAAP gross margin was 56.6% for the first quarter of 2021,
compared to 57.9% for the first quarter of 2020.
- Adjusted gross margin was 64.0% for the first quarter of 2021,
compared to 64.1% for the first quarter of 2020.
- GAAP net loss for the first quarter of 2021 was $(12.3)
million, or $(0.18) per basic share, compared to GAAP net loss of
$(7.4) million, or $(0.12) per basic share, for the first quarter
of 2020.
- Non-GAAP net income for the first quarter of 2021 was $16.1
million, or $0.23 per diluted share, compared to non-GAAP net
income of $11.1 million, or $0.17 per diluted share, for the first
quarter of 2020.
- Adjusted EBITDA for the first quarter of 2021 was $22.2
million, or 16.1% of revenue, compared to $14.1 million, or 14.9%
of revenue, for the first quarter of 2020.
- GAAP operating cash flow for the first quarter of 2021 was
$13.8 million, compared to GAAP operating cash flow of $10.4
million for the first quarter of 2020.
“Our first quarter results exceeded expectations across the
board. We delivered record first quarter revenue of $138 million,
accelerating 45% year-over-year, an all-time high. Performance was
driven by ongoing success with enterprises globally as we continue
to close large deals, by our product innovation as a leader in
AI-powered automation, and our go-to-market execution. We’ve
started this year off with incredible traction and are well
positioned to extend our leadership position as we help
organizations digitally transform their business and reimagine
their customer experience."
- Rowan Trollope, CEO, Five9
Business Outlook
Five9 provides guidance based on current market conditions and
expectations. Five9 emphasizes that the guidance is subject to
various important cautionary factors referenced in the section
entitled "Forward-Looking Statements" below, including risks and
uncertainties associated with the COVID-19 pandemic.
- For the full year 2021, Five9 expects to report:
- Revenue in the range of $548.5 to $551.5 million, higher than
the guidance range of $518.5 to $521.5 million that was previously
provided on February 22, 2021.
- GAAP net loss in the range of $(63.4) to $(60.4) million, or
$(0.91) to $(0.87) per basic share, improved from the guidance
range of $(63.9) to $(60.9) million, or $(0.92) to $(0.88) per
basic share, that was previously provided on February 22,
2021.
- Non-GAAP net income in the range of $65.2 to $68.2 million, or
$0.89 to $0.93 per diluted share, higher than the guidance range of
$59.1 to $62.1 million, or $0.75 to $0.79 per diluted share, that
was previously provided on February 22, 2021.
- For the second quarter of 2021, Five9 expects to report:
- Revenue in the range of $131.5 to $132.5 million.
- GAAP net loss in the range of $(25.9) to $(24.9) million, or
$(0.38) to $(0.36) per basic share.
- Non-GAAP net income in the range of $9.1 to $10.1 million, or
$0.13 to $0.14 per diluted share.
Conference Call Details
Five9 will discuss its first quarter 2021 results today, April
29, 2021, via Zoom webinar at 4:30 p.m. Eastern Time. To access the
webinar, please register by clicking here. 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 website,
prior to the conference call.
A live webcast and a replay will be available on the Investor
Relations section of the Company’s web-site 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. We calculate adjusted gross
profit and adjusted gross margin by adding back the following items
to gross profit: depreciation, intangibles amortization,
stock-based compensation and one-time integration costs. We
calculate adjusted EBITDA by adding back or removing the following
items to or from GAAP net income (loss): depreciation and
amortization, stock-based compensation, interest expense, interest
(income) and other, acquisition-related transaction costs and
one-time integration costs, contingent consideration expense and
provision for (benefit from) income taxes. We calculate non-GAAP
operating income by adding back or removing the following items to
or from GAAP operating income (loss): stock-based compensation,
intangibles amortization, acquisition-related transaction costs and
one-time integration costs and contingent consideration expense. We
calculate non-GAAP net income by adding back or removing the
following items to or from GAAP net income (loss): stock-based
compensation, intangibles amortization, amortization of discount
and issuance costs on convertible senior notes, acquisition-related
transaction costs and one-time integration costs and contingent
consideration expense. 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 factors that do not directly affect what we
consider to be our core operating performance, as well as unusual
events. 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 only as
supplemental information for purposes of 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 set forth herein and 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, including statements regarding Five9’s market position,
opportunity and expectation of expanding its leadership position,
the size of the market opportunity, Five9’s growth expectations,
and the second quarter and full year 2021 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, including as a result of the
timing and success of new product and feature introductions by us,
may not fully reflect the underlying performance of our business
and may result in decreases in the price of our common stock; (ii)
if we are unable to attract new clients or sell additional services
and functionality to our existing clients, our revenue and revenue
growth will be harmed; (iii) our recent rapid growth may not be
indicative of our future growth, and even if we continue to grow
rapidly, we may fail to manage our growth effectively; (iv) failure
to adequately retain and expand our sales force will impede our
growth; (v) if we fail to manage our technical operations
infrastructure, our existing clients may experience service
outages, our new clients may experience delays in the deployment of
our solution and we could be subject to, among other things, claims
for credits or damages; (vi) our growth depends in part on the
success of our strategic relationships with third parties and our
failure to successfully maintain, grow and manage these
relationships could harm our business; (vii) we have established,
and are continuing to increase, our network of master agents and
resellers to sell our solution; our failure to effectively develop,
manage, and maintain this network could materially harm our
revenues; (viii) adverse economic conditions may harm our business;
(ix) the effects of the COVID-19 pandemic have materially affected
how we, our clients and business partners are operating, and the
duration and extent to which this will impact our future results of
operations and overall financial performance remains uncertain; (x)
security breaches and improper access to or disclosure of our data
or our clients’ data, or other cyber attacks on our systems, could
result in litigation and regulatory risk, harm our reputation and
our business; (xi) we may acquire other companies or technologies,
or be the target of strategic transactions, or be impacted by
transactions by other companies, which could divert our
management’s attention, result in additional dilution to our
stockholders and otherwise disrupt our operations and harm our
operating results; (xii) the markets in which we participate
involve numerous competitors and are highly competitive, and if we
do not compete effectively, our operating results could be harmed;
(xiii) if our existing clients terminate their subscriptions or
reduce their subscriptions and related usage, our revenues and
gross margins will be harmed and we will be required to spend more
money to grow our client base; (xiv) we sell our solution to larger
organizations that require longer sales and implementation cycles
and often demand more configuration and integration services or
customized features and functions that we may not offer, any of
which could delay or prevent these sales and harm our growth rates,
business and operating results; (xv) because a significant
percentage of our revenue is derived from existing clients,
downturns or upturns in new sales will not be immediately reflected
in our operating results and may be difficult to discern; (xvi) we
rely on third-party telecommunications and internet service
providers to provide our clients and their customers with
telecommunication services and connectivity to our cloud contact
center software and any failure by these service providers to
provide reliable services could cause us to lose clients and
subject us to claims for credits or damages, among other things;
(xvii) we have a history of losses and we may be unable to achieve
or sustain profitability; (xviii) the contact center software
solutions market is subject to rapid technological change, and we
must develop and sell incremental and new products in order to
maintain and grow our business; (xix) we may not be able to secure
additional financing on favorable terms, or at all, to meet our
future capital needs; (xx) failure to comply with laws and
regulations could harm our business and our reputation; (xxi) we
may not have sufficient cash to service our convertible senior
notes and repay such notes, if required, and other risks attendant
to our convertible senior notes and increased debt levels; and
(xxii) 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 and quarterly reports 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 for
the intelligent contact center space, bringing the power of cloud
innovation to customers and facilitating more than seven billion
call minutes annually. Five9 provides end-to-end solutions with
omnichannel routing, analytics, WFO and AI to increase agent
productivity and deliver tangible business results. The Five9
Genius platform is reliable, secure, compliant and scalable;
designed to create exceptional personalized customer experiences.
For more information, visit www.five9.com.
FIVE9, INC.
CONDENSED CONSOLIDATED BALANCE
SHEETS
(In thousands)
(Unaudited)
March 31, 2021
December 31, 2020
ASSETS
Current assets:
Cash and cash equivalents
$
176,326
$
220,372
Marketable investments
467,143
383,171
Accounts receivable, net
51,987
48,731
Prepaid expenses and other current
assets
19,673
16,149
Deferred contract acquisition costs,
net
23,249
20,695
Total current assets
738,378
689,118
Property and equipment, net
58,296
51,213
Operating lease right-of-use assets
44,960
9,010
Intangible assets, net
48,737
51,684
Goodwill
165,420
165,420
Marketable investments
—
42,127
Other assets
3,135
3,236
Deferred contract acquisition costs, net —
less current portion
59,823
51,934
Total assets
$
1,118,749
$
1,063,742
LIABILITIES AND STOCKHOLDERS’
EQUITY
Current liabilities:
Accounts payable
$
16,056
$
17,145
Accrued and other current liabilities
52,960
44,450
Operating lease liabilities
5,478
3,912
Accrued federal fees
5,024
3,745
Sales tax liabilities
1,168
1,714
Finance lease liabilities
156
612
Deferred revenue
32,835
31,983
Total current liabilities
113,677
103,561
Convertible senior notes
782,241
643,316
Sales tax liabilities — less current
portion
862
857
Operating lease liabilities — less current
portion
45,135
5,379
Other long-term liabilities
32,628
31,465
Total liabilities
974,543
784,578
Stockholders’ equity:
Common stock
67
67
Additional paid-in capital
331,528
476,941
Accumulated other comprehensive income
379
335
Accumulated deficit
(187,768
)
(198,179
)
Total stockholders’ equity
144,206
279,164
Total liabilities and stockholders’
equity
$
1,118,749
$
1,063,742
FIVE9, INC.
CONDENSED CONSOLIDATED
STATEMENTS OF OPERATIONS
(In thousands, except per share
data)
(Unaudited)
Three Months Ended
March 31, 2021
March 31, 2020
Revenue
$
137,882
$
95,088
Cost of revenue
59,803
40,037
Gross profit
78,079
55,051
Operating expenses:
Research and development
22,121
15,189
Sales and marketing
44,799
30,160
General and administrative
22,245
14,658
Total operating expenses
89,165
60,007
Loss from operations
(11,086
)
(4,956
)
Other (expense) income, net:
Interest expense
(1,938
)
(3,484
)
Interest income and other
175
1,072
Total other (expense) income, net
(1,763
)
(2,412
)
Loss before income taxes
(12,849
)
(7,368
)
(Benefit from) provision for income
taxes
(517
)
69
Net loss
$
(12,332
)
$
(7,437
)
Net loss per share:
Basic and diluted
$
(0.18
)
$
(0.12
)
Shares used in computing net loss per
share:
Basic and diluted
66,721
61,705
FIVE9, INC.
CONDENSED CONSOLIDATED
STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
Three Months Ended
March 31, 2021
March 31, 2020
Cash flows from operating
activities:
Net loss
$
(12,332
)
$
(7,437
)
Adjustments to reconcile net loss to net
cash provided by operating activities:
Depreciation and amortization
8,763
4,970
Amortization of operating lease
right-of-use assets
2,389
1,394
Amortization of commission costs
5,540
3,471
Amortization of premium on marketable
investments
1,682
177
Provision for doubtful accounts
160
255
Stock-based compensation
20,908
13,794
Amortization of discount and issuance
costs on convertible senior notes (1)
974
3,320
Change in fair of value of contingent
consideration
2,500
—
Other
186
147
Changes in operating assets and
liabilities:
Accounts receivable
(3,543
)
(2,620
)
Prepaid expenses and other current
assets
(3,524
)
(2,754
)
Deferred contract acquisition costs
(15,983
)
(8,166
)
Other assets
101
(2,132
)
Accounts payable
351
(1,121
)
Accrued and other current liabilities
5,299
4,802
Accrued federal fees and sales tax
liability
738
(707
)
Deferred revenue
322
3,378
Other liabilities
(766
)
(377
)
Net cash provided by operating
activities
13,765
10,394
Cash flows from investing
activities:
Purchases of marketable investments
(163,683
)
(62,339
)
Proceeds from maturities of marketable
investments
120,182
134,610
Purchases of property and equipment
(8,229
)
(6,045
)
Cash paid to acquire substantially all of
the assets of Whendu
—
(100
)
Net cash (used in) provided by investing
activities
(51,730
)
66,126
Cash flows from financing
activities:
Repurchase of a portion of 2023
convertible senior notes, net of costs
(7,840
)
—
Proceeds from exercise of common stock
options
2,215
2,596
Payments of finance leases
(456
)
(1,229
)
Net cash (used in) provided by financing
activities
(6,081
)
1,367
Net (decrease) increase in cash and cash
equivalents
(44,046
)
77,887
Cash and cash equivalents:
Beginning of period
220,372
77,976
End of period
$
176,326
$
155,863
(1)
During the first quarter of 2021, the
Company early adopted ASU 2020-06 which resulted in the elimination
of amortization of discount on the convertible senior notes from
January 1, 2021.
FIVE9, INC.
RECONCILIATION OF GAAP GROSS
PROFIT TO ADJUSTED GROSS PROFIT
(In thousands, except
percentages)
(Unaudited)
Three Months Ended
March 31, 2021
March 31, 2020
GAAP gross profit
$
78,079
$
55,051
GAAP gross margin
56.6
%
57.9
%
Non-GAAP adjustments:
Depreciation
4,140
2,850
Intangibles amortization
2,947
1,090
Stock-based compensation
3,105
1,989
One-time integration costs
30
—
Adjusted gross profit
$
88,301
$
60,980
Adjusted gross margin
64.0
%
64.1
%
FIVE9, INC.
RECONCILIATION OF GAAP NET
LOSS TO ADJUSTED EBITDA
(In thousands, except
percentages)
(Unaudited)
Three Months Ended
March 31, 2021
March 31, 2020
GAAP net loss
$
(12,332
)
$
(7,437
)
Non-GAAP adjustments:
Depreciation and amortization
8,763
4,970
Stock-based compensation
20,908
13,794
Interest expense
1,938
3,484
Interest income and other
(175
)
(1,072
)
Acquisition-related transaction costs and
one-time integration costs
1,094
329
Contingent consideration expense
2,500
—
(Benefit from) provision for income
taxes
(517
)
69
Adjusted EBITDA
$
22,179
$
14,137
Adjusted EBITDA as % of revenue
16.1
%
14.9
%
FIVE9, INC.
RECONCILIATION OF GAAP
OPERATING INCOME (LOSS) TO NON-GAAP OPERATING INCOME
(In thousands)
(Unaudited)
Three Months Ended
March 31, 2021
March 31, 2020
Loss from operations
$
(11,086
)
$
(4,956
)
Non-GAAP adjustments:
Stock-based compensation
20,908
13,794
Intangibles amortization
2,947
1,090
Acquisition-related transaction costs and
one-time integration costs
1,094
329
Contingent consideration expense
2,500
—
Non-GAAP operating income
$
16,363
$
10,257
FIVE9, INC.
RECONCILIATION OF GAAP NET
LOSS TO NON-GAAP NET INCOME
(In thousands, except per share
data)
(Unaudited)
Three Months Ended
March 31, 2021
March 31, 2020
GAAP net loss
$
(12,332
)
$
(7,437
)
Non-GAAP adjustments:
Stock-based compensation
20,908
13,794
Intangibles amortization
2,947
1,090
Amortization of discount and issuance
costs on convertible senior notes (1)
974
3,320
Acquisition-related transaction costs and
one-time integration costs
1,094
329
Contingent consideration expense
2,500
—
Non-GAAP net income
$
16,091
$
11,096
GAAP net loss per share:
Basic and diluted
$
(0.18
)
$
(0.12
)
Non-GAAP net income per share:
Basic
$
0.24
$
0.18
Diluted
$
0.23
$
0.17
Shares used in computing GAAP net loss per
share:
Basic and diluted
66,721
61,705
Shares used in computing non-GAAP net
income per share:
Basic
66,721
61,705
Diluted
70,659
65,151
(1)
During the first quarter of 2021,
the Company early adopted ASU 2020-06 which resulted in the
elimination of amortization of discount on the convertible senior
notes from January 1, 2021.
FIVE9, INC.
SUMMARY OF STOCK-BASED
COMPENSATION, DEPRECIATION AND INTANGIBLES AMORTIZATION
(In thousands)
(Unaudited)
Three Months Ended
March 31, 2021
March 31, 2020
Stock-Based
Compensation
Depreciation
Intangibles
Amortization
Stock-Based
Compensation
Depreciation
Intangibles
Amortization
Cost of revenue
$
3,105
$
4,140
$
2,947
$
1,989
$
2,850
$
1,090
Research and development
4,763
596
—
2,806
465
—
Sales and marketing
6,771
1
—
4,106
2
—
General and administrative
6,269
1,079
—
4,893
563
—
Total
$
20,908
$
5,816
$
2,947
$
13,794
$
3,880
$
1,090
FIVE9, INC.
RECONCILIATION OF GAAP NET
LOSS TO NON-GAAP NET INCOME – GUIDANCE
(In thousands, except per share
data)
(Unaudited)
Three Months
Ending
Year Ending
June 30, 2021
December 31, 2021
Low
High
Low
High
GAAP net loss
$
(25,862
)
$
(24,862
)
$
(63,388
)
$
(60,388
)
Non-GAAP adjustments:
Stock-based compensation
25,011
25,011
96,196
96,196
Intangibles amortization
2,947
2,947
11,787
11,787
Amortization of issuance costs on
convertible senior notes
986
986
3,931
3,931
Acquisition-related transaction costs and
one-time integration costs
6,018
6,018
14,174
14,174
Contingent consideration expense
—
—
2,500
2,500
Income tax expense effects (1)
—
—
—
—
Non-GAAP net income
$
9,100
$
10,100
$
65,200
$
68,200
GAAP net loss per share, basic and
diluted
$
(0.38
)
$
(0.36
)
$
(0.91
)
$
(0.87
)
Non-GAAP net income per share:
Basic
$
0.13
$
0.15
$
0.94
$
0.98
Diluted
$
0.13
$
0.14
$
0.89
$
0.93
Shares used in computing GAAP net loss per
share and non-GAAP net income per share:
Basic
68,500
68,500
69,400
69,400
Diluted
72,500
72,500
73,400
73,400
(1)
Non-GAAP adjustments do not have
an impact on our income tax provision due to past non-GAAP
losses.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20210429005938/en/
Investor Relations Contacts: Five9, Inc. Barry
Zwarenstein Chief Financial Officer 925-201-2000 ext. 5959
IR@five9.com The Blueshirt Group for Five9, Inc. Lisa Laukkanen
415-217-4967 Lisa@blueshirtgroup.com
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