FIVN — Five9, Inc.

Summary of Five9 (FIVN) Q4 2025 Earnings Call

1. Key Financial Results and Metrics

• Q4 Revenue: $300 million, an 8% year-over-year increase.
• Subscription Revenue: 82% of total revenue, growing 12% year-over-year.
  • Enterprise AI revenue grew 50% year-over-year, surpassing $100 million in annual run rate.
  • Core CCaaS subscription revenue grew 8% year-over-year.
• Adjusted EBITDA Margin: 26%, an increase of 260 basis points year-over-year.
• Free Cash Flow: $67 million, representing 22% of revenue, more than doubling year-over-year.
• GAAP EPS: $0.23 per diluted share; Non-GAAP EPS: $0.80 per diluted share.
• 2025 Total Revenue: $1.15 billion, a 10% increase year-over-year.

2. Strategic Updates and Business Highlights

• Transitioning to AI-powered customer experience (CX) solutions, with significant growth in enterprise AI bookings.
• Strong partner momentum, with over 80% of business influenced by partners.
• New product innovations announced, including AI-powered solutions like Genius Routing and Adaptive Digital Engagement.
• Partnership with Google Cloud expanded, enhancing AI capabilities and accelerating customer deployments.

3. Forward Guidance and Outlook

• 2026 Revenue Guidance: Initiated at a midpoint of $1.254 billion, with expectations for revenue to return to double-digit growth in the second half of 2026.
• Q1 Revenue Guidance: Midpoint of $299.5 million, indicating a flat sequential change.
• Non-GAAP EPS Guidance for 2026: Midpoint of $3.18 per diluted share, with continued GAAP profitability expected.

4. Bad News, Challenges, or Points of Concern

• Dollar-Based Retention Rate (DBRR): Decreased from 107% in Q3 to 105% in Q4, attributed to tough comparisons and seasonality.
• Seasonal Dynamics: Weaker seasonal uptick in telecom usage compared to prior year, which may affect revenue.
• Economic Headwinds: Concerns regarding macroeconomic conditions, including inflation and consumer spending, could impact future performance.

5. Notable Q&A Insights

• AI Adoption: Both new logos and existing customers are driving AI revenue growth, but specific breakdowns between greenfield and existing customer growth were not provided.
• Sales Cycle Dynamics: The previous "AI fog" has lifted, but there are still challenges in customer decision-making processes.
• Competitive Landscape: Concerns about large language model (LLM) platforms potentially bypassing traditional CCaaS architectures, but Five9's orchestration capabilities and data advantages are seen as competitive moats.
• Pipeline Strength: Large deal pipeline remains robust, with AI features playing a significant role in customer acquisition and retention.

This summary encapsulates the key points from Five9's Q4 2025 earnings call, highlighting both achievements and challenges as the company navigates its growth trajectory in the evolving CX landscape.