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News Release

Five9 Reports Second Quarter Revenue Growth of 28% to a Record $61.1 Million

37% Growth in LTM Enterprise Subscription Revenue

Tenth Consecutive Quarter of Positive Operating Cash Flow at $5.7 Million

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

Second Quarter 2018 Financial Results

  • Revenue for the second quarter of 2018 increased 28% to a record $61.1 million, compared to $47.7 million for the second quarter of 2017.

  • GAAP gross margin was 59.4% for the second quarter of 2018, compared to 57.5% for the second quarter of 2017.

  • Adjusted gross margin was 63.8% for the second quarter of 2018, compared to 62.3% for the second quarter of 2017.

  • GAAP net loss for the second quarter of 2018 was $(2.0) million, or $(0.04) per basic share, compared to GAAP net loss of $(4.0) million, or $(0.07) per basic share, for the second quarter of 2017. GAAP net loss for the second quarter of 2018 included $1.7 million in amortization of discount and issuance costs on our 0.125% convertible senior notes issued in May 2018.

  • Non-GAAP net income for the second quarter of 2018 was $6.9 million, or $0.11 per diluted share, compared to non-GAAP net loss of $(0.1) million, or $(0.00) per basic share, for the second quarter of 2017.

  • Adjusted EBITDA for the second quarter of 2018 was $9.7 million, or a record 15.8% of revenue, compared to $3.0 million, or 6.2% of revenue, for the second quarter of 2017.

  • GAAP operating cash flow for the second quarter of 2018 was $5.7 million, compared to GAAP operating cash flow of $0.1 million for the second 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 second quarter of 2018 are presented under ASC 606, financial results for the second quarter of 2017 are presented under ASC 605. A reconciliation of the financial results for the second 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 second quarter results significantly exceeded our expectations on both the top and bottom line. Revenue growth accelerated in Q2, up 28% year-over-year to $61.1 million, and continued to be driven by our Enterprise business, which delivered 37% growth in LTM Enterprise subscription revenue. I am excited to be taking the helm at Five9 as contact centers undergo a massive technology-enabled transformation driven by the move to the cloud and the rise of artificial intelligence (AI). Our vision is to create a self-learning, intelligent contact center delivered through the cloud and powered by AI. Our recently announced Five9 Genius and partnership with Google, which brings practical AI enhancements to the contact center, is the first step in this direction. As Five9 continues to disrupt this massive market, we are also laser-focused on near-term execution.”

 

- 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 $244.5 to $246.5 million, up from the prior guidance range of $235.8 to $238.8 million that was previously provided on May 1, 2018.
  • GAAP net loss in the range of $(14.0) to $(12.0) million, or $(0.24) to $(0.20) per basic share, compared to the prior guidance range of $(13.0) to $(10.0) million, or $(0.22) to $(0.17) per basic share, that was previously provided on May 1, 2018. GAAP net loss guidance includes $7.9 million in amortization of discount and issuance costs on our convertible senior notes, offset by $2.5 million net interest savings from the use of our convertible proceeds.
  • Non-GAAP net income in the range of $24.0 to $26.0 million, or $0.39 to $0.42 per diluted share, improved from the prior guidance range of $15.4 to $18.4 million, or $0.25 to $0.30 per diluted share, that was previously provided on May 1, 2018. Non-GAAP net income guidance includes $2.5 million net interest savings from the use of our convertible proceeds.

  • For the third quarter of 2018, Five9 expects to report:

  • Revenue in the range of $61.0 to $62.0 million.
  • GAAP net loss in the range of $(8.1) to $(7.1) million, or a loss of $(0.14) to $(0.12) per basic share. GAAP net loss guidance includes $3.0 million in amortization of discount and issuance costs on our convertible senior notes, offset by $1.0 million net interest savings from the use of our convertible proceeds.
  • Non-GAAP net income in the range of $5.1 to $6.1 million, or $0.08 to $0.10 per diluted share. Non-GAAP net income guidance includes $1.0 million net interest savings from the use of our convertible proceeds.

 

Conference Call Details

Five9 will discuss its second quarter 2018 results today, August 6, 2018, via teleconference at 4:30 p.m. Eastern Time. To access the call (ID 6113370), please dial: 888-204-4368 or 323-794-2423. An audio replay of the call will be available through August 20, 2018 by dialing 888-203-1112 or 719-457-0820 and entering access code 6113370. 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 or removing 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 loss: depreciation, amortization, interest expense, provision for income taxes, stock-based compensation expense, non-recurring litigation settlement costs and interest income and other, which consists primarily of a non-cash adjustment on investment, interest income and foreign exchange gains and losses. We calculate non-GAAP operating income (loss) as operating income (loss) excluding stock-based compensation expense, intangibles amortization and non-recurring litigation settlement costs. We calculate non-GAAP net income (loss) as GAAP net 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, 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 and company vision, the state of the cloud customer experience market, the industry shift to the cloud, and the third quarter 2018 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) 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, any increase in the cost thereof, reduction in efficacy or any failure by these service providers to provide reliable services could cause us to lose customers, increase our customers’ cost of using our solution and subject us to, among other things, 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)

 

 

June 30, 2018

 

December 31, 2017

ASSETS

 

 

 

 

Current assets:

 

 

 

 

Cash and cash equivalents

 

$

166,162

 

 

$

68,947

 

Marketable investments

 

108,140

 

 

 

Accounts receivable, net

 

20,167

 

 

19,048

 

Prepaid expenses and other current assets

 

8,437

 

 

4,840

 

Deferred contract acquisition costs

 

8,083

 

 

 

Total current assets

 

310,989

 

 

92,835

 

Property and equipment, net

 

22,019

 

 

19,888

 

Intangible assets, net

 

841

 

 

1,073

 

Goodwill

 

11,798

 

 

11,798

 

Other assets

 

1,026

 

 

2,602

 

Deferred contract acquisition costs — less current portion

 

18,393

 

 

 

Total assets

 

$

365,066

 

 

$

128,196

 

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS’ EQUITY

 

 

 

 

Current liabilities:

 

 

 

 

Accounts payable

 

$

6,035

 

 

$

4,292

 

Accrued and other current liabilities

 

13,615

 

 

11,787

 

Accrued federal fees

 

1,638

 

 

1,151

 

Sales tax liability

 

1,201

 

 

1,326

 

Notes payable

 

31

 

 

336

 

Capital leases

 

7,442

 

 

6,651

 

Deferred revenue

 

14,750

 

 

13,975

 

Total current liabilities

 

44,712

 

 

39,518

 

Convertible senior notes

 

190,615

 

 

 

Revolving line of credit

 

 

 

32,594

 

Sales tax liability — less current portion

 

928

 

 

1,044

 

Capital leases — less current portion

 

7,869

 

 

7,161

 

Other long-term liabilities

 

1,436

 

 

1,041

 

Total liabilities

 

245,560

 

 

81,358

 

Stockholders’ equity:

 

 

 

 

Common stock

 

58

 

 

57

 

Additional paid-in capital

 

273,373

 

 

222,202

 

Accumulated deficit

 

(153,925

)

 

(175,421

)

Total stockholders’ equity

 

119,506

 

 

46,838

 

Total liabilities and stockholders’ equity

 

$

365,066

 

 

$

128,196

 

 

 

 

 

 

FIVE9, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except per share data)

(Unaudited)

 

 

Three Months Ended

 

Six Months Ended

 

 

June 30, 2018

 

June 30, 2017

 

June 30, 2018

 

June 30, 2017

 

 

 

 

 

 

 

 

 

Revenue

 

$

61,120

 

 

$

47,727

 

 

$

120,025

 

 

$

94,741

 

Cost of revenue

 

24,814

 

 

20,273

 

 

49,516

 

 

40,244

 

Gross profit

 

36,306

 

 

27,454

 

 

70,509

 

 

54,497

 

Operating expenses:

 

 

 

 

 

 

 

 

Research and development

 

8,367

 

 

6,836

 

 

16,139

 

 

13,683

 

Sales and marketing

 

17,912

 

 

16,932

 

 

35,390

 

 

32,710

 

General and administrative

 

9,833

 

 

6,845

 

 

18,936

 

 

15,705

 

Total operating expenses

 

36,112

 

 

30,613

 

 

70,465

 

 

62,098

 

Income (loss) from operations

 

194

 

 

(3,159

)

 

44

 

 

(7,601

)

Other income (expense), net:

 

 

 

 

 

 

 

 

Interest expense

 

(2,378

)

 

(888

)

 

(3,188

)

 

(1,770

)

Interest income and other

 

206

 

 

90

 

 

604

 

 

208

 

Total other income (expense), net

 

(2,172

)

 

(798

)

 

(2,584

)

 

(1,562

)

Loss before income taxes

 

(1,978

)

 

(3,957

)

 

(2,540

)

 

(9,163

)

Provision for income taxes

 

64

 

 

50

 

 

109

 

 

99

 

Net loss

 

$

(2,042

)

 

$

(4,007

)

 

$

(2,649

)

 

$

(9,262

)

Net loss per share:

 

 

 

 

 

 

 

 

Basic and diluted

 

$

(0.04

)

 

$

(0.07

)

 

$

(0.05

)

 

$

(0.17

)

Shares used in computing net loss per share:

 

 

 

 

 

 

 

 

Basic and diluted

 

57,903

 

 

54,723

 

 

57,453

 

 

54,208

 

 

 

 

 

 

 

 

 

 

 

 

FIVE9, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

(Unaudited)

 

 

Six Months Ended

 

 

June 30, 2018

 

June 30, 2017

Cash flows from operating activities:

 

 

 

 

Net loss

 

$

(2,649

)

 

$

(9,262

)

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

 

 

 

 

Depreciation and amortization

 

4,769

 

 

4,365

 

Amortization of premium on marketable investments

 

(43

)

 

 

Provision for doubtful accounts

 

66

 

 

45

 

Stock-based compensation

 

12,122

 

 

6,983

 

Gain on sale of convertible note held for investment

 

(312

)

 

 

Non-cash adjustment on investment

 

(40

)

 

(161

)

Amortization of debt discount and issuance costs

 

40

 

 

40

 

Amortization of discount and issuance costs on convertible senior notes

 

1,733

 

 

 

Accretion of interest

 

44

 

 

10

 

Others

 

(19

)

 

(14

)

Changes in operating assets and liabilities:

 

 

 

 

Accounts receivable

 

(1,114

)

 

(2,426

)

Prepaid expenses and other current assets

 

(3,140

)

 

(4,106

)

Deferred contract acquisition costs

 

(3,338

)

 

 

Other assets

 

4

 

 

166

 

Accounts payable

 

1,493

 

 

1,187

 

Accrued and other current liabilities

 

2,415

 

 

909

 

Accrued federal fees and sales tax liability

 

246

 

 

171

 

Deferred revenue

 

1,170

 

 

2,025

 

Other liabilities

 

261

 

 

311

 

Net cash provided by operating activities

 

13,708

 

 

243

 

Cash flows from investing activities:

 

 

 

 

Purchases of marketable investments

 

(109,506

)

 

 

Proceeds from maturities of marketable investments

 

1,400

 

 

 

Purchases of property and equipment

 

(1,092

)

 

(1,178

)

Proceeds from sale of convertible note held for investment

 

1,923

 

 

 

Net cash used in investing activities

 

(107,275

)

 

(1,178

)

Cash flows from financing activities:

 

 

 

 

Proceeds from issuance of convertible senior notes, net of issuance costs paid of $7,946

 

250,804

 

 

 

Payments for capped call transactions

 

(31,412

)

 

 

Proceeds from exercise of common stock options

 

5,821

 

 

2,303

 

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

)

 

(400

)

Payments of capital leases

 

(4,403

)

 

(3,741

)

Net cash provided by (used in) financing activities

 

190,782

 

 

(38

)

Net increase (decrease) in cash and cash equivalents

 

97,215

 

 

(973

)

Cash and cash equivalents:

 

 

 

 

Beginning of period

 

68,947

 

 

58,122

 

End of period

 

$

166,162

 

 

$

57,149

 

 

 

 

 

 

 

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

 

 

June 30, 2018

 

 

ASC 605

 

Adjustments

 

ASC 606

Revenue

 

$

60,772

 

 

$

348

 

 

$

61,120

 

Cost of revenue

 

24,668

 

 

146

 

 

24,814

 

GAAP gross profit

 

36,104

 

 

202

 

 

36,306

 

GAAP gross margin

 

59.4

%

 

 

 

59.4

%

Operating expenses:

 

 

 

 

 

 

Research and development

 

8,367

 

 

 

 

$

8,367

 

Sales and marketing

 

19,588

 

 

(1,676

)

 

$

17,912

 

General and administrative

 

9,833

 

 

 

 

$

9,833

 

Total operating expenses

 

37,788

 

 

(1,676

)

 

36,112

 

GAAP income (loss) from operations

 

(1,684

)

 

1,878

 

 

194

 

GAAP Operating Margin

 

(2.8

)%

 

 

 

0.3

%

Other income (expense), net

 

(2,172

)

 

 

 

$

(2,172

)

Loss before income taxes

 

(3,856

)

 

1,878

 

 

(1,978

)

Provision for income taxes

 

64

 

 

 

 

64

 

GAAP net loss

 

$

(3,920

)

 

$

1,878

 

 

$

(2,042

)

Net loss per share:

 

 

 

 

 

 

Basic and diluted

 

$

(0.07

)

 

$

0.03

 

 

$

(0.04

)

Shares used in computing net loss per share:

 

 

 

 

 

 

Basic and diluted

 

57,903

 

 

 

 

57,903

 

 

 

 

 

 

 

 

 

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

 

 

June 30, 2018

 

 

ASC 605

 

Adjustments

 

ASC 606

Revenue

 

$

60,772

 

 

$

348

 

 

$

61,120

 

Cost of revenue

 

21,951

 

 

146

 

 

22,097

 

Adjusted gross profit

 

38,821

 

 

202

 

 

39,023

 

Adjusted gross margin

 

63.9

%

 

 

 

63.8

%

Operating expenses:

 

 

 

 

 

 

Research and development

 

7,070

 

 

 

 

7,070

 

Sales and marketing

 

17,973

 

 

(1,676

)

 

16,297

 

General and administrative

 

5,975

 

 

 

 

5,975

 

Total operating expenses

 

31,018

 

 

(1,676

)

 

29,342

 

Adjusted EBITDA

 

7,803

 

 

1,878

 

 

9,681

 

Adjusted EBITDA margin

 

12.8

%

 

 

 

15.8

%

Depreciation

 

2,333

 

 

 

 

2,333

 

Non-GAAP operating income

 

5,470

 

 

1,878

 

 

7,348

 

Non-GAAP operating margin

 

9.0

%

 

 

 

12.0

%

Other income (expense), net

 

(419

)

 

 

 

(419

)

Income before income taxes

 

5,051

 

 

1,878

 

 

6,929

 

Provision for income taxes

 

64

 

 

 

 

64

 

Non-GAAP net income

 

$

4,987

 

 

$

1,878

 

 

$

6,865

 

 

 

 

 

 

 

 

Non-GAAP net income per share:

 

 

 

 

 

 

Basic

 

$

0.09

 

 

$

0.03

 

 

$

0.12

 

Diluted

 

$

0.08

 

 

$

0.03

 

 

$

0.11

 

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

 

 

 

 

 

 

Basic

 

57,903

 

 

 

 

57,903

 

Diluted

 

61,105

 

 

 

 

61,105

 

 

 

 

 

 

 

 

 

FIVE9, INC.

RECONCILIATION OF GAAP GROSS PROFIT TO ADJUSTED GROSS PROFIT

(In thousands, except percentages)

(Unaudited)

 

 

Three Months Ended

 

Six Months Ended

 

 

June 30, 2018

 

June 30, 2017

 

June 30, 2018

 

June 30, 2017

 

 

 

 

 

 

 

 

 

GAAP gross profit

 

$

36,306

 

 

$

27,454

 

 

$

70,509

 

 

$

54,497

 

GAAP gross margin

 

59.4

%

 

57.5

%

 

58.7

%

 

57.5

%

Non-GAAP adjustments:

 

 

 

 

 

 

 

 

Depreciation

 

1,776

 

 

1,628

 

 

3,482

 

 

3,116

 

Intangibles amortization

 

88

 

 

88

 

 

176

 

 

176

 

Stock-based compensation

 

853

 

 

575

 

 

1,531

 

 

1,009

 

Adjusted gross profit

 

$

39,023

 

 

$

29,745

 

 

$

75,698

 

 

$

58,798

 

Adjusted gross margin

 

63.8

%

 

62.3

%

 

63.1

%

 

62.1

%

 

 

FIVE9, INC.

RECONCILIATION OF GAAP NET LOSS TO ADJUSTED EBITDA

(In thousands)

(Unaudited)

 

 

Three Months Ended

 

Six Months Ended

 

 

June 30, 2018

 

June 30, 2017

 

June 30, 2018

 

June 30, 2017

 

 

 

 

 

 

 

 

 

GAAP net loss

 

$

(2,042

)

 

$

(4,007

)

 

$

(2,649

)

 

$

(9,262

)

Non-GAAP adjustments:

 

 

 

 

 

 

 

 

Depreciation and amortization

 

2,449

 

 

2,270

 

 

4,769

 

 

4,365

 

Stock-based compensation

 

6,797

 

 

3,854

 

 

12,122

 

 

6,983

 

Interest expense

 

2,378

 

 

888

 

 

3,188

 

 

1,770

 

Interest income and other

 

(206

)

 

(90

)

 

(604

)

 

(208

)

Legal settlement

 

 

 

 

 

 

 

1,700

 

Legal and indemnification fees related to settlement

 

241

 

 

 

 

241

 

 

135

 

Provision for income taxes

 

64

 

 

50

 

 

109

 

 

99

 

Adjusted EBITDA

 

$

9,681

 

 

$

2,965

 

 

$

17,176

 

 

$

5,582

 

 

 

 

 

 

 

 

 

 

 

FIVE9, INC.

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

(In thousands)

(Unaudited)

 

 

Three Months Ended

 

Six Months Ended

 

 

June 30, 2018

 

June 30, 2017

 

June 30, 2018

 

June 30, 2017

 

 

 

 

 

 

 

 

 

Income (loss) from operations

 

$

194

 

 

$

(3,159

)

 

$

44

 

 

$

(7,601

)

Non-GAAP adjustments:

 

 

 

 

 

 

 

 

Stock-based compensation

 

6,797

 

 

3,854

 

 

12,122

 

 

6,983

 

Intangibles amortization

 

116

 

 

117

 

 

232

 

 

234

 

Legal settlement

 

 

 

 

 

 

 

1,700

 

Legal and indemnification fees related to settlement

 

241

 

 

 

 

241

 

 

135

 

Non-GAAP operating income

 

$

7,348

 

 

$

812

 

 

$

12,639

 

 

$

1,451

 

 

 

 

 

 

 

 

 

 

 

FIVE9, INC.

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

(In thousands, except per share data)

(Unaudited)

 

 

Three Months Ended

 

Six Months Ended

 

 

June 30, 2018

 

June 30, 2017

 

June 30, 2018

 

June 30, 2017

 

 

 

 

 

 

 

 

 

GAAP net loss

 

$

(2,042

)

 

$

(4,007

)

 

$

(2,649

)

 

$

(9,262

)

Non-GAAP adjustments:

 

 

 

 

 

 

 

 

Stock-based compensation

 

6,797

 

 

3,854

 

 

12,122

 

 

6,983

 

Intangibles amortization

 

116

 

 

117

 

 

232

 

 

234

 

Amortization of debt discount and issuance costs

 

20

 

 

20

 

 

40

 

 

40

 

Amortization of discount and issuance costs on convertible senior notes

 

1,733

 

 

 

 

1,733

 

 

 

Legal settlement

 

 

 

 

 

 

 

1,700

 

Legal and indemnification fees related to settlement

 

241

 

 

 

 

241

 

 

135

 

Non-cash adjustment on investment

 

 

 

(58

)

 

(352

)

 

(161

)

Non-GAAP net income (loss)

 

$

6,865

 

 

$

(74

)

 

$

11,367

 

 

$

(331

)

GAAP net loss per share:

 

 

 

 

 

 

 

 

Basic and diluted

 

$

(0.04

)

 

$

(0.07

)

 

$

(0.05

)

 

$

(0.17

)

Non-GAAP net income (loss) per share:

 

 

 

 

 

 

 

 

Basic

 

$

0.12

 

 

$

 

 

$

0.20

 

 

$

(0.01

)

Diluted

 

$

0.11

 

 

$

 

 

$

0.19

 

 

$

(0.01

)

Shares used in computing GAAP net loss per share:

 

 

 

 

 

 

 

 

Basic and diluted

 

57,903

 

 

54,723

 

 

57,453

 

 

54,208

 

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

 

 

 

 

 

 

 

 

Basic

 

57,903

 

 

54,723

 

 

57,453

 

 

54,208

 

Diluted

 

61,105

 

 

54,723

 

 

60,741

 

 

54,208

 

 

 

 

 

 

 

 

 

 

 

FIVE9, INC.

SUMMARY OF STOCK-BASED COMPENSATION, DEPRECIATION AND INTANGIBLES AMORTIZATION

(In thousands)

(Unaudited)

 

 

Three Months Ended

 

 

June 30, 2018

 

June 30, 2017

 

 

Stock-Based Compensation

 

Depreciation

 

Intangibles Amortization

 

Stock-Based Compensation

 

Depreciation

 

Intangibles Amortization

 

 

 

 

 

 

 

 

 

 

 

 

 

Cost of revenue

 

$

853

 

 

$

1,776

 

 

$

88

 

 

$

575

 

 

$

1,628

 

 

$

88

 

Research and development

 

1,064

 

 

233

 

 

 

 

801

 

 

237

 

 

 

Sales and marketing

 

1,585

 

 

2

 

 

28

 

 

1,224

 

 

1

 

 

29

 

General and administrative

 

3,295

 

 

322

 

 

 

 

1,254

 

 

287

 

 

 

Total

 

$

6,797

 

 

$

2,333

 

 

$

116

 

 

$

3,854

 

 

$

2,153

 

 

$

117

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Six Months Ended

 

 

June 30, 2018

 

June 30, 2017

 

 

Stock-Based Compensation

 

Depreciation

 

Intangibles Amortization

 

Stock-Based Compensation

 

Depreciation

 

Intangibles Amortization

 

 

 

 

 

 

 

 

 

 

 

 

 

Cost of revenue

 

$

1,531

 

 

$

3,482

 

 

$

176

 

 

$

1,009

 

 

$

3,116

 

 

$

176

 

Research and development

 

1,941

 

 

427

 

 

 

 

1,438

 

 

443

 

 

 

Sales and marketing

 

2,947

 

 

3

 

 

56

 

 

2,152

 

 

2

 

 

58

 

General and administrative

 

5,703

 

 

625

 

 

 

 

2,384

 

 

570

 

 

 

Total

 

$

12,122

 

 

$

4,537

 

 

$

232

 

 

$

6,983

 

 

$

4,131

 

 

$

234

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

 

September 30, 2018

 

December 31, 2018

 

 

Low

 

High

 

Low

 

High

 

 

 

 

 

 

 

 

 

GAAP net loss

 

$

(8,126

)

 

$

(7,126

)

 

$

(13,961

)

 

$

(11,961

)

Non-GAAP adjustments:

 

 

 

 

 

 

 

 

Stock-based compensation

 

9,966

 

 

9,966

 

 

29,614

 

 

29,614

 

Intangibles amortization

 

116

 

 

116

 

 

442

 

 

442

 

Amortization of discount and issuance costs on convertible senior notes

 

3,144

 

 

3,144

 

 

7,881

 

 

7,881

 

Amortization of debt discount and issuance costs

 

 

 

 

 

135

 

 

135

 

Legal and indemnification fees related to settlement

 

 

 

 

 

241

 

 

241

 

Non-cash adjustment on investment

 

 

 

 

 

(352

)

 

(352

)

Income tax expense effects (1)

 

 

 

 

 

 

 

 

Non-GAAP net income

 

$

5,100

 

 

$

6,100

 

 

$

24,000

 

 

$

26,000

 

GAAP net loss per share, basic and diluted

 

$

(0.14

)

 

$

(0.12

)

 

$

(0.24

)

 

$

(0.20

)

Non-GAAP net income per share:

 

 

 

 

 

 

 

 

Basic

 

$

0.09

 

 

$

0.10

 

 

$

0.41

 

 

$

0.44

 

Diluted

 

$

0.08

 

 

$

0.10

 

 

$

0.39

 

 

$

0.42

 

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

 

 

 

 

 

 

 

 

Basic

 

59,000

 

 

59,000

 

 

58,500

 

 

58,500

 

Diluted

 

62,500

 

 

62,500

 

 

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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