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• Revenue Growth: 13% year-over-year, driven by 14% growth in subscription revenue.

• Subscription Revenue: Accounts for 80% of total revenue.

• Adjusted EBITDA Margin: 19% for the first quarter.

• Operating Cash Flow: $48 million, representing 17% of revenue.

• Free Cash Flow: $35 million, or 12% of revenue.

• Enterprise AI Revenue Growth: 32% year-over-year, making up 9% of enterprise subscription revenue.

• Adjusted Gross Margin: 62.4%, an increase of approximately 160 basis points year-over-year.

• Non-GAAP EPS: $0.62 per diluted share, up 29% year-over-year.

• Stock-Based Compensation: Decreased 12% year-over-year to $39 million.

• Free Cash Flow Conversion Rate: 66%.

• 2025 Revenue Guidance: Unchanged at $1.14 billion.

• 2025 Non-GAAP EPS Guidance: Raised to $2.76, $0.16 higher than previous guidance.

• Warning! GuruFocus has detected 5 Warning Signs with FIVN.

Release Date: May 01, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Five9 Inc (NASDAQ:FIVN) exceeded its guidance across all key metrics for the first quarter, with subscription revenue growing 14% year-over-year.

• The company reported a Q1 record operating cash flow of $48 million, representing 17% of revenue, and an all-time record of free cash flow of $35 million, or 12% of revenue.

• Five9 Inc (NASDAQ:FIVN) is experiencing significant AI momentum, with enterprise AI revenue growing 32% year-over-year in the first quarter.

• The company announced a deepened partnership with Salesforce, launching Five9 Fusion, which integrates Five9's real-time system with Salesforce's customer record system to enhance AI-powered customer experiences.

• Five9 Inc (NASDAQ:FIVN) continues to see strong growth in its installed base bookings, achieving the highest year-over-year growth rate for any quarter in the last three years.

Negative Points

• Five9 Inc (NASDAQ:FIVN) is facing macroeconomic challenges, including inflation, high interest rates, and uncertainty regarding consumer spending, which could impact future results.

• The company is experiencing lengthening sales cycles on larger deals, attributed to the macroeconomic backdrop.

• There is resistance in international regions to doing business with US vendors, which could affect Five9 Inc (NASDAQ:FIVN)'s international growth.

• Five9 Inc (NASDAQ:FIVN) announced a 4% reduction in its global workforce, impacting most departments, mainly in the US, as part of its transformation initiatives.

• The company's LTM dollar-based retention rate decreased to 107% from 108% last quarter, driven by tough year-over-year comparisons and seasonal downticks.