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News Release

Five9 Reports Third Quarter Revenue Growth of 30% to a Record $65.3 Million

37% Growth in LTM Enterprise Subscription Revenue

Eleventh Consecutive Quarter of Positive Operating Cash Flow at $9.4 Million

Raised 2018 Guidance for Both Revenue and Bottom Line

SAN RAMON, Calif. - November 6, 2018 - Five9, Inc. (NASDAQ:FIVN), a leading provider of cloud contact center software for the digital enterprise, today reported results1 for the third quarter ended September 30, 2018.

Third Quarter 2018 Financial Results

  • Revenue for the third quarter of 2018 increased 30% to a record $65.3 million, compared to $50.1 million for the third quarter of 2017.
  • GAAP gross margin was 59.9% for the third quarter of 2018, compared to 59.1% for the third quarter of 2017.
  • Adjusted gross margin was 64.3% for the third quarter of 2018, compared to 63.1% for the third quarter of 2017.
  • GAAP net loss for the third quarter of 2018 was $(1.3) million, or $(0.02) per basic share, compared to GAAP net income of $0.9 million, or $0.02 per diluted share, for the third quarter of 2017. Included in the GAAP results for the third quarter of 2017 was a $2.1 million reversal of accrued disputed interest and penalties following a favorable ruling by the Universal Service Administration Company.
  • Non-GAAP net income for the third quarter of 2018 was $11.1 million, or $0.18 per diluted share, compared to non-GAAP net income of $2.6 million, or $0.04 per diluted share, for the third quarter of 2017.
  • Adjusted EBITDA for the third quarter of 2018 was $12.8 million, or a record 19.6% of revenue, compared to $5.2 million, or 10.3% of revenue, for the third quarter of 2017.
  • GAAP operating cash flow for the third quarter of 2018 was $9.4 million, compared to GAAP operating cash flow of $8.0 million for the third quarter of 2017.

1On January 1, 2018, Five9 adopted Accounting Standards Codification (ASC) 606 “Revenue from Contracts with Customers” using the modified retrospective transition method. While the financial results for the third quarter of 2018 are presented under ASC 606, financial results for the third quarter of 2017 are presented under ASC 605. A reconciliation of the financial results for the third quarter of 2018 under ASC 606 and ASC 605 is presented in the “Reconciliation of ASC 605 to ASC 606” table included in this release.

“Our third quarter results significantly exceeded our expectations. Revenue was a record $65.3 million, up 30% year-over-year, representing our fastest growth rate since Five9 went public in 2014. In the third quarter, we continued to execute crisply in a strong market and made solid progress on our strategic priorities, including building our talent bench, investing in R&D, and advancing our long-term investments. We are driving toward our goal of creating the world’s best self-learning intelligent contact center delivered through the cloud and powered by AI. Enterprise customers are recognizing the value of our innovative platform and our compelling vision for the future. That recognition was reinforced by Five9 being named as a leader both in the first ever Forrester Wave: Cloud Contact Center, and, for the fourth consecutive year, in the Gartner Magic Quadrant for Contact Center as a Service.”

- Rowan Trollope, CEO, Five9

Business Outlook

The guidance below includes the expected impact of the adoption of ASC 606.

  • For the full year 2018, Five9 expects to report:
    • Revenue in the range of $251.1 to $252.2 million, up from the prior guidance range of $244.5 to $246.5 million that was previously provided on August 6, 2018.
    • GAAP net loss in the range of $(6.7) to $(5.7) million, or $(0.12) to $(0.10) per basic share, compared to the prior guidance range of $(14.0) to $(12.0) million, or $(0.24) to $(0.20) per basic share, that was previously provided on August 6, 2018.
    • Non-GAAP net income in the range of $30.4 to $31.4 million, or $0.49 to $0.51 per diluted share, improved from the prior guidance range of $24.0 to $26.0 million, or $0.39 to $0.42 per diluted share, that was previously provided on August 6, 2018.
  • For the fourth quarter of 2018, Five9 expects to report:
    • Revenue in the range of $65.8 to $66.8 million.
    • GAAP net loss in the range of $(2.7) to $(1.7) million, or a loss of $(0.05) to $(0.03) per basic share.
    • Non-GAAP net income in the range of $8.0 to $9.0 million, or $0.13 to $0.14 per diluted share.


Conference Call Details

Five9 will discuss its third quarter 2018 results today, November 6, 2018, via teleconference at 4:30 p.m. Eastern Time. To access the call (ID 7616920), please dial: 888-204-4368 or 323-794-2423. An audio replay of the call will be available through November 20, 2018 by dialing 888-203-1112 or 719-457-0820 and entering access code 7616920. 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. We calculate adjusted gross profit by adding back the following items to gross profit: depreciation, intangibles amortization and stock-based compensation expense. We calculate adjusted EBITDA by adding back or removing the following items to or from GAAP net income (loss): depreciation, amortization, interest expense, provision for income taxes, stock-based compensation expense, non-recurring litigation settlement costs, reversal of interest and penalties on accrued federal fees and interest income and other. We calculate non-GAAP operating income as operating income (loss) excluding stock-based compensation expense, intangibles amortization, reversal of interest and penalties on accrued federal fees and non-recurring litigation settlement costs. We calculate non-GAAP net income as GAAP net income (loss) excluding stock-based compensation expense, intangibles amortization, amortization of debt discount and issuance costs, amortization of discount and issuance costs on convertible senior notes, non-recurring litigation settlement costs, reversal of interest and penalties on accrued federal fees and non-cash adjustments on investment. 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, business momentum, product positioning, enterprise customer views of the value of our products and vision for the future, the Company’s long-term goals, and the fourth quarter and full year 2018 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) 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 expand our sales force could 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) 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 adversely affect our business; (vii) the markets in which we participate are highly competitive, and if we do not compete effectively, our operating results could be harmed; (viii) 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; (ix) our growth depends in part on the success of our strategic relationships with third parties and our failure to successfully grow and manage these relationships could harm our business; (x) we are establishing a 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; (xi) 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; (xii) 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; (xiii) any disruption, price increase or degradation in the third-party telecommunications and internet services used by our clients and their customers to connect to and use our cloud contact center software, could impair or reduce our clients’ use of our solution, cause us to lose clients and subject us to reputational harm as well as claims for credits or damages; (xiv) we have a history of losses and we may be unable to achieve or sustain profitability; (xv) we may not be able to secure additional financing on favorable terms, or at all, to meet our future capital needs; (xvi) failure to comply with laws and regulations could harm our business and our reputation; and (xvii) 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 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 for the digital enterprise, bringing the power of cloud innovation to customers and facilitating more than three billion customer interactions 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 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)

 

 

September 30, 2018

 

December 31, 2017

ASSETS

 

 

 

 

Current assets:

 

 

 

 

Cash and cash equivalents

 

$

79,619

 

 

$

68,947

 

Marketable investments

 

200,007

 

 

 

Accounts receivable, net

 

23,903

 

 

19,048

 

Prepaid expenses and other current assets

 

7,962

 

 

4,840

 

Deferred contract acquisition costs

 

8,633

 

 

 

Total current assets

 

320,124

 

 

92,835

 

Property and equipment, net

 

22,909

 

 

19,888

 

Intangible assets, net

 

724

 

 

1,073

 

Goodwill

 

11,798

 

 

11,798

 

Other assets

 

962

 

 

2,602

 

Deferred contract acquisition costs — less current portion

 

19,599

 

 

 

Total assets

 

$

376,116

 

 

$

128,196

 

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS’ EQUITY

 

 

 

 

Current liabilities:

 

 

 

 

Accounts payable

 

$

4,528

 

 

$

4,292

 

Accrued and other current liabilities

 

14,144

 

 

11,787

 

Accrued federal fees

 

1,681

 

 

1,151

 

Sales tax liability

 

1,322

 

 

1,326

 

Notes payable

 

 

 

336

 

Capital leases

 

6,909

 

 

6,651

 

Deferred revenue

 

17,490

 

 

13,975

 

Total current liabilities

 

46,074

 

 

39,518

 

Convertible senior notes

 

193,664

 

 

 

Revolving line of credit

 

 

 

32,594

 

Sales tax liability — less current portion

 

884

 

 

1,044

 

Capital leases — less current portion

 

6,250

 

 

7,161

 

Other long-term liabilities

 

1,360

 

 

1,041

 

Total liabilities

 

248,232

 

 

81,358

 

Stockholders’ equity:

 

 

 

 

Common stock

 

59

 

 

57

 

Additional paid-in capital

 

283,055

 

 

222,202

 

Accumulated deficit

 

(155,230

)

 

(175,421

)

Total stockholders’ equity

 

127,884

 

 

46,838

 

Total liabilities and stockholders’ equity

 

$

376,116

 

 

$

128,196

 

 

 

 

 

 

FIVE9, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except per share data)

(Unaudited)

 

 

Three Months Ended

 

Nine Months Ended

 

 

September 30, 2018

 

September 30, 2017

 

September 30, 2018

 

September 30, 2017

 

 

 

 

 

 

 

 

 

Revenue

 

$

65,304

 

 

$

50,081

 

 

$

185,329

 

 

$

144,822

 

Cost of revenue

 

26,179

 

 

20,497

 

 

75,695

 

 

60,741

 

Gross profit

 

39,125

 

 

29,584

 

 

109,634

 

 

84,081

 

Operating expenses:

 

 

 

 

 

 

 

 

Research and development

 

9,582

 

 

6,689

 

 

25,721

 

 

20,372

 

Sales and marketing

 

17,818

 

 

16,502

 

 

53,208

 

 

49,212

 

General and administrative

 

10,746

 

 

4,679

 

 

29,682

 

 

20,384

 

Total operating expenses

 

38,146

 

 

27,870

 

 

108,611

 

 

89,968

 

Income (loss) from operations

 

979

 

 

1,714

 

 

1,023

 

 

(5,887

)

Other income (expense), net:

 

 

 

 

 

 

 

 

Interest expense

 

(3,595

)

 

(865

)

 

(6,783

)

 

(2,635

)

Interest income and other

 

1,352

 

 

118

 

 

1,956

 

 

326

 

Total other income (expense), net

 

(2,243

)

 

(747

)

 

(4,827

)

 

(2,309

)

Income (loss) before income taxes

 

(1,264

)

 

967

 

 

(3,804

)

 

(8,196

)

Provision for income taxes

 

41

 

 

43

 

 

150

 

 

142

 

Net income (loss)

 

$

(1,305

)

 

$

924

 

 

$

(3,954

)

 

$

(8,338

)

Net income (loss) per share:

 

 

 

 

 

 

 

 

Basic

 

$

(0.02

)

 

$

0.02

 

 

$

(0.07

)

 

$

(0.15

)

Diluted

 

$

(0.02

)

 

$

0.02

 

 

$

(0.07

)

 

$

(0.15

)

Shares used in computing net income (loss) per share:

 

 

 

 

 

 

 

 

Basic

 

58,454

 

 

55,310

 

 

57,790

 

 

54,579

 

Diluted

 

58,454

 

 

59,441

 

 

57,790

 

 

54,579

 

 

 

 

 

 

 

 

 

 

 

 

FIVE9, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

(Unaudited)

 

 

Nine Months Ended

 

 

September 30, 2018

 

September 30, 2017

Cash flows from operating activities:

 

 

 

 

Net loss

 

$

(3,954

)

 

$

(8,338

)

Adjustments to reconcile net loss to net cash provided by operating activities:

 

 

 

 

Depreciation and amortization

 

7,436

 

 

6,246

 

Amortization of premium on marketable investments

 

(317

)

 

 

Provision for doubtful accounts

 

81

 

 

66

 

Stock-based compensation

 

20,991

 

 

10,703

 

Reversal of interest and penalties on accrued federal fees

 

 

 

(2,133

)

Gain on sale of convertible note held for investment

 

(312

)

 

 

Non-cash adjustment on investment

 

(40

)

 

(233

)

Amortization of debt discount and issuance costs

 

129

 

 

60

 

Amortization of discount and issuance costs on convertible senior notes

 

4,782

 

 

 

Accretion of interest

 

44

 

 

16

 

Others

 

(59

)

 

(50

)

Changes in operating assets and liabilities:

 

 

 

 

Accounts receivable

 

(4,931

)

 

(3,406

)

Prepaid expenses and other current assets

 

(2,755

)

 

(1,861

)

Deferred contract acquisition costs

 

(5,094

)

 

 

Other assets

 

68

 

 

71

 

Accounts payable

 

307

 

 

1,409

 

Accrued and other current liabilities

 

2,575

 

 

1,774

 

Accrued federal fees and sales tax liability

 

366

 

 

95

 

Deferred revenue

 

3,910

 

 

3,676

 

Other liabilities

 

(75

)

 

131

 

Net cash provided by operating activities

 

23,152

 

 

8,226

 

Cash flows from investing activities:

 

 

 

 

Purchases of marketable investments

 

(203,953

)

 

 

Proceeds from maturities of marketable investments

 

4,047

 

 

 

Purchases of property and equipment

 

(4,503

)

 

(1,809

)

Proceeds from sale of convertible note held for investment

 

1,923

 

 

 

Net cash used in investing activities

 

(202,486

)

 

(1,809

)

Cash flows from financing activities:

 

 

 

 

Proceeds from issuance of convertible senior notes, net of issuance costs paid of $8,036

 

250,714

 

 

 

Payments for capped call transactions

 

(31,412

)

 

 

Proceeds from exercise of common stock options

 

7,111

 

 

3,280

 

Proceeds from sale of common stock under ESPP

 

2,884

 

 

1,800

 

Repayments on revolving line of credit

 

(32,594

)

 

 

Payments of notes payable

 

(318

)

 

(547

)

Payments of capital leases

 

(6,379

)

 

(5,708

)

Net cash provided by (used in) financing activities

 

190,006

 

 

(1,175

)

Net increase in cash and cash equivalents

 

10,672

 

 

5,242

 

Cash and cash equivalents:

 

 

 

 

Beginning of period

 

68,947

 

 

58,122

 

End of period

 

$

79,619

 

 

$

63,364

 

 

 

 

 

 

 

FIVE9, INC.

RECONCILIATION OF ASC 605 TO ASC 606 P&L ITEMS - GAAP

(In thousands, except per share data and percentages)

(Unaudited)

 

 

Three Months Ended

 

 

September 30, 2018

 

 

ASC 605

 

Adjustments

 

ASC 606

Revenue

 

$

65,041

 

 

$

263

 

 

$

65,304

 

Cost of revenue

 

26,040

 

 

139

 

 

26,179

 

GAAP gross profit

 

39,001

 

 

124

 

 

39,125

 

GAAP gross margin

 

60.0

%

 

 

 

59.9

%

Operating expenses:

 

 

 

 

 

 

Research and development

 

9,582

 

 

 

 

9,582

 

Sales and marketing

 

19,574

 

 

(1,756

)

 

17,818

 

General and administrative

 

10,746

 

 

 

 

10,746

 

Total operating expenses

 

39,902

 

 

(1,756

)

 

38,146

 

GAAP income (loss) from operations

 

(901

)

 

1,880

 

 

979

 

GAAP Operating Margin

 

(1.4

)%

 

 

 

1.5

%

Other income (expense), net

 

(2,243

)

 

 

 

(2,243

)

Loss before income taxes

 

(3,144

)

 

1,880

 

 

(1,264

)

Provision for income taxes

 

41

 

 

 

 

41

 

GAAP net loss

 

$

(3,185

)

 

$

1,880

 

 

$

(1,305

)

Net loss per share:

 

 

 

 

 

 

Basic and diluted

 

$

(0.05

)

 

$

0.03

 

 

$

(0.02

)

Shares used in computing net loss per share:

 

 

 

 

 

 

Basic and diluted

 

58,454

 

 

 

 

58,454

 

 

 

 

 

 

 

 

 

FIVE9, INC.

RECONCILIATION OF ASC 605 TO ASC 606 P&L ITEMS - NON-GAAP

(In thousands, except per share data and percentages)

(Unaudited)

 

 

 

Three Months Ended

 

 

September 30, 2018

 

 

ASC 605

 

Adjustments

 

ASC 606

Revenue

 

$

65,041

 

 

$

263

 

 

$

65,304

 

Cost of revenue

 

23,159

 

 

139

 

 

23,298

 

Adjusted gross profit

 

41,882

 

 

124

 

 

42,006

 

Adjusted gross margin

 

64.4

%

 

 

 

64.3

%

Operating expenses:

 

 

 

 

 

 

Research and development

 

6,952

 

 

 

 

6,952

 

Sales and marketing

 

17,931

 

 

(1,756

)

 

16,175

 

General and administrative

 

6,106

 

 

 

 

6,106

 

Total operating expenses

 

30,989

 

 

(1,756

)

 

29,233

 

Adjusted EBITDA

 

10,893

 

 

1,880

 

 

12,773

 

Adjusted EBITDA margin

 

16.7

%

 

 

 

19.6

%

Depreciation

 

2,550

 

 

 

 

2,550

 

Non-GAAP operating income

 

8,343

 

 

1,880

 

 

10,223

 

Non-GAAP operating margin

 

12.8

%

 

 

 

15.7

%

Other income (expense), net

 

895

 

 

 

 

895

 

Income before income taxes

 

9,238

 

 

1,880

 

 

11,118

 

Provision for income taxes

 

41

 

 

 

 

41

 

Non-GAAP net income

 

$

9,197

 

 

$

1,880

 

 

$

11,077

 

 

 

 

 

 

 

 

Non-GAAP net income per share:

 

 

 

 

 

 

Basic

 

$

0.16

 

 

$

0.03

 

 

$

0.19

 

Diluted

 

$

0.15

 

 

$

0.03

 

 

$

0.18

 

Shares used in computing non-GAAP net income per share:

 

 

 

 

 

 

Basic

 

58,454

 

 

 

 

58,454

 

Diluted

 

61,997

 

 

 

 

61,997

 

 

 

 

 

 

 

 

 

FIVE9, INC.

RECONCILIATION OF GAAP GROSS PROFIT TO ADJUSTED GROSS PROFIT

(In thousands, except percentages)

(Unaudited)

 

 

Three Months Ended

 

Nine Months Ended

 

 

September 30, 2018

 

September 30, 2017

 

September 30, 2018

 

September 30, 2017

 

 

 

 

 

 

 

 

 

GAAP gross profit

 

$

39,125

 

 

$

29,584

 

 

$

109,634

 

 

$

84,081

 

GAAP gross margin

 

59.9

%

 

59.1

%

 

59.2

%

 

58.1

%

Non-GAAP adjustments:

 

 

 

 

 

 

 

 

Depreciation

 

1,933

 

 

1,310

 

 

5,415

 

 

4,426

 

Intangibles amortization

 

88

 

 

87

 

 

264

 

 

263

 

Stock-based compensation

 

860

 

 

599

 

 

2,391

 

 

1,608

 

Adjusted gross profit

 

$

42,006

 

 

$

31,580

 

 

$

117,704

 

 

$

90,378

 

Adjusted gross margin

 

64.3

%

 

63.1

%

 

63.5

%

 

62.4

%

 

 

FIVE9, INC.

RECONCILIATION OF GAAP NET INCOME (LOSS) TO ADJUSTED EBITDA

(In thousands)

(Unaudited)

 

 

Three Months Ended

 

Nine Months Ended

 

 

September 30, 2018

 

September 30, 2017

 

September 30, 2018

 

September 30, 2017

 

 

 

 

 

 

 

 

 

GAAP net income (loss)

 

$

(1,305

)

 

$

924

 

 

$

(3,954

)

 

$

(8,338

)

Non-GAAP adjustments:

 

 

 

 

 

 

 

 

Depreciation and amortization

 

2,667

 

 

1,881

 

 

7,436

 

 

6,246

 

Stock-based compensation

 

8,869

 

 

3,720

 

 

20,991

 

 

10,703

 

Interest expense

 

3,595

 

 

865

 

 

6,783

 

 

2,635

 

Interest income and other

 

(1,352

)

 

(118

)

 

(1,956

)

 

(326

)

Legal settlement

 

 

 

 

 

 

 

1,700

 

Legal and indemnification fees related to settlement

 

258

 

 

 

 

499

 

 

135

 

Reversal of interest and penalties on accrued federal fees (G&A)

 

 

 

(2,133

)

 

 

 

(2,133

)

Provision for income taxes

 

41

 

 

43

 

 

150

 

 

142

 

Adjusted EBITDA

 

$

12,773

 

 

$

5,182

 

 

$

29,949

 

 

$

10,764

 

Adjusted EBITDA as % of revenue

 

19.6

%

 

10.3

%

 

16.2

%

 

7.4

%

 

 

 

 

 

 

 

 

 

 

FIVE9, INC.

RECONCILIATION OF GAAP OPERATING INCOME (LOSS) TO NON-GAAP OPERATING INCOME

(In thousands)

(Unaudited)

 

 

Three Months Ended

 

Nine Months Ended

 

 

September 30, 2018

 

September 30, 2017

 

September 30, 2018

 

September 30, 2017

 

 

 

 

 

 

 

 

 

Income (loss) from operations

 

$

979

 

 

$

1,714

 

 

$

1,023

 

 

$

(5,887

)

Non-GAAP adjustments:

 

 

 

 

 

 

 

 

Stock-based compensation

 

8,869

 

 

3,720

 

 

20,991

 

 

10,703

 

Intangibles amortization

 

117

 

 

115

 

 

349

 

 

349

 

Legal settlement

 

 

 

 

 

 

 

1,700

 

Legal and indemnification fees related to settlement

 

258

 

 

 

 

499

 

 

135

 

Reversal of interest and penalties on accrued federal fees (G&A)

 

 

 

(2,133

)

 

 

 

(2,133

)

Non-GAAP operating income

 

$

10,223

 

 

$

3,416

 

 

$

22,862

 

 

$

4,867

 

 

 

 

 

 

 

 

 

 

 

FIVE9, INC.

RECONCILIATION OF GAAP NET INCOME (LOSS) TO NON-GAAP NET INCOME

(In thousands, except per share data)

(Unaudited)

 

 

Three Months Ended

 

Nine Months Ended

 

 

September 30, 2018

 

September 30, 2017

 

September 30, 2018

 

September 30, 2017

 

 

 

 

 

 

 

 

 

GAAP net income (loss)

 

$

(1,305

)

 

$

924

 

 

$

(3,954

)

 

$

(8,338

)

Non-GAAP adjustments:

 

 

 

 

 

 

 

 

Stock-based compensation

 

8,869

 

 

3,720

 

 

20,991

 

 

10,703

 

Intangibles amortization

 

117

 

 

115

 

 

349

 

 

349

 

Amortization of debt discount and issuance costs

 

89

 

 

20

 

 

129

 

 

60

 

Amortization of discount and issuance costs on convertible senior notes

 

3,049

 

 

 

 

4,782

 

 

 

Legal settlement

 

 

 

 

 

 

 

1,700

 

Legal and indemnification fees related to settlement

 

258

 

 

 

 

499

 

 

135

 

Reversal of interest and penalties on accrued federal fees (G&A)

 

 

 

(2,133

)

 

 

 

(2,133

)

Non-cash adjustment on investment

 

 

 

(72

)

 

(352

)

 

(233

)

Non-GAAP net income

 

$

11,077

 

 

$

2,574

 

 

$

22,444

 

 

$

2,243

 

GAAP net income (loss) per share:

 

 

 

 

 

 

 

 

Basic

 

$

(0.02

)

 

$

0.02

 

 

$

(0.07

)

 

$

(0.15

)

Diluted

 

$

(0.02

)

 

$

0.02

 

 

$

(0.07

)

 

$

(0.15

)

Non-GAAP net income per share:

 

 

 

 

 

 

 

 

Basic

 

$

0.19

 

 

$

0.05

 

 

$

0.39

 

 

$

0.04

 

Diluted

 

$

0.18

 

 

$

0.04

 

 

$

0.37

 

 

$

0.04

 

Shares used in computing GAAP net income (loss) per share:

 

 

 

 

 

 

 

 

Basic

 

58,454

 

 

55,310

 

 

57,790

 

 

54,579

 

Diluted

 

58,454

 

 

59,441

 

 

57,790

 

 

54,579

 

Shares used in computing non-GAAP net income per share:

 

 

 

 

 

 

 

 

Basic

 

58,454

 

 

55,310

 

 

57,790

 

 

54,579

 

Diluted

 

61,997

 

 

59,441

 

 

61,191

 

 

58,916

 

 

 

 

 

 

 

 

 

 

 

FIVE9, INC.

SUMMARY OF STOCK-BASED COMPENSATION, DEPRECIATION AND INTANGIBLES AMORTIZATION

(In thousands)

(Unaudited)

 

 

Three Months Ended

 

 

September 30, 2018

 

September 30, 2017

 

 

Stock-Based Compensation

 

Depreciation

 

Intangibles Amortization

 

Stock-Based Compensation

 

Depreciation

 

Intangibles Amortization

 

 

 

 

 

 

 

 

 

 

 

 

 

Cost of revenue

 

$

860

 

 

$

1,933

 

 

$

88

 

 

$

599

 

 

$

1,310

 

 

$

87

 

Research and development

 

2,352

 

 

278

 

 

 

 

797

 

 

182

 

 

 

Sales and marketing

 

1,613

 

 

1

 

 

29

 

 

1,084

 

 

2

 

 

28

 

General and administrative

 

4,044

 

 

338

 

 

 

 

1,240

 

 

272

 

 

 

Total

 

$

8,869

 

 

$

2,550

 

 

$

117

 

 

$

3,720

 

 

$

1,766

 

 

$

115

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Nine Months Ended

 

 

September 30, 2018

 

September 30, 2017

 

 

Stock-Based Compensation

 

Depreciation

 

Intangibles Amortization

 

Stock-Based Compensation

 

Depreciation

 

Intangibles Amortization

 

 

 

 

 

 

 

 

 

 

 

 

 

Cost of revenue

 

$

2,391

 

 

$

5,415

 

 

$

264

 

 

$

1,608

 

 

$

4,426

 

 

$

263

 

Research and development

 

4,293

 

 

705

 

 

 

 

2,235

 

 

625

 

 

 

Sales and marketing

 

4,560

 

 

4

 

 

85

 

 

3,236

 

 

4

 

 

86

 

General and administrative

 

9,747

 

 

963

 

 

 

 

3,624

 

 

842

 

 

 

Total

 

$

20,991

 

 

$

7,087

 

 

$

349

 

 

$

10,703

 

 

$

5,897

 

 

$

349

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

 

December 31, 2018

 

December 31, 2018

 

 

Low

 

High

 

Low

 

High

 

 

 

 

 

 

 

 

 

GAAP net loss

 

$

(2,719

)

 

$

(1,719

)

 

$

(6,673

)

 

$

(5,673

)

Non-GAAP adjustments:

 

 

 

 

 

 

 

 

Stock-based compensation

 

7,527

 

 

7,527

 

 

28,518

 

 

28,518

 

Intangibles amortization

 

93

 

 

93

 

 

442

 

 

442

 

Amortization of discount and issuance costs on convertible senior notes

 

3,099

 

 

3,099

 

 

7,881

 

 

7,881

 

Amortization of debt discount and issuance costs

 

 

 

 

 

129

 

 

129

 

Legal and indemnification fees related to settlement

 

 

 

 

 

499

 

 

499

 

Non-cash adjustment on investment

 

 

 

 

 

(352

)

 

(352

)

Income tax expense effects (1)

 

 

 

 

 

 

 

 

Non-GAAP net income

 

$

8,000

 

 

$

9,000

 

 

$

30,444

 

 

$

31,444

 

GAAP net loss per share, basic and diluted

 

$

(0.05

)

 

$

(0.03

)

 

$

(0.12

)

 

$

(0.10

)

Non-GAAP net income per share:

 

 

 

 

 

 

 

 

Basic

 

$

0.13

 

 

$

0.15

 

 

$

0.52

 

 

$

0.54

 

Diluted

 

$

0.13

 

 

$

0.14

 

 

$

0.49

 

 

$

0.51

 

Shares used in computing GAAP net loss per share and non-GAAP net income per share:

 

 

 

 

 

 

 

 

Basic

 

59,500

 

 

59,500

 

 

58,000

 

 

58,000

 

Diluted

 

63,500

 

 

63,500

 

 

62,000

 

 

62,000

 

 

 

 

 

 

 

 

 

 

 

  1. Non-GAAP adjustments do not have an impact on our income tax provision due to past non-GAAP losses.



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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