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News Release

Five9 Reports Second Quarter Revenue Growth of 29% to a Record $99.8 Million

33% Growth in LTM Enterprise Subscription Revenue

Eighteenth Consecutive Quarter of Positive Operating Cash Flow at $14.8 Million

Raised 2020 Guidance for both Revenue and Bottom Line


SAN RAMON, Calif. - August 3, 2020 - Five9, Inc. (NASDAQ:FIVN), a leading provider of cloud contact center software, today reported results for the second quarter ended June 30, 2020.

Second Quarter 2020 Financial Results

  • Revenue for the second quarter of 2020 increased 29% to a record $99.8 million, compared to $77.4 million for the second quarter of 2019.
  • GAAP gross margin was 57.5% for the second quarter of 2020, compared to 59.6% for the second quarter of 2019.
  • Adjusted gross margin was 65.7% for the second quarter of 2020, compared to 65.0% for the second quarter of 2019.
  • GAAP net loss for the second quarter of 2020 was $(16.1) million, or $(0.25) per basic share, compared to GAAP net loss of $(1.9) million, or $(0.03) per basic share, for the second quarter of 2019.
  • Non-GAAP net income for the second quarter of 2020 was $14.1 million, or $0.21 per diluted share, compared to non-GAAP net income of $12.3 million, or $0.20 per diluted share, for the second quarter of 2019.
  • Adjusted EBITDA for the second quarter of 2020 was $18.3 million, or 18.3% of revenue, compared to $14.4 million, or 18.6% of revenue, for the second quarter of 2019.
  • GAAP operating cash flow for the second quarter of 2020 was $14.8 million, compared to GAAP operating cash flow of $6.8 million for the second quarter of 2019.

 

"We delivered exceptionally strong second quarter results with revenue of $99.8 million.  Revenue growth accelerated to 29% year-over-year and 5% sequentially, adjusted EBITDA margin was 18.3%, and we delivered our eighteenth consecutive quarter of positive operating cash flow. We believe the on-premises to cloud and digital transformation trends driving our massive market opportunity are likely to accelerate as work-from-home trends continue and retail sales personnel are increasingly displaced by contact center agents. Our better-than-expected second quarter results and pipeline also demonstrate the strength of our core business and, most importantly, our consistent sales execution.  Our increased go-to-market investments are paying dividends, most notably with system integrators and AT&T. Meanwhile, our enhanced product and engineering leadership team is driving faster product innovation at greater scale.  We remain focused on driving superb execution and disciplined, balanced growth."

- Rowan Trollope, CEO, Five9

Business Outlook

Five9 provides guidance based on current market conditions and expectations. The Company 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 2020, Five9 expects to report:
  • Revenue in the range of $399.0 to $401.0 million, higher than the prior guidance range of $380.5 to $383.5 million that was previously provided on May 4, 2020.
  • GAAP net loss in the range of $(56.4) to $(54.4) million, or $(0.88) to $(0.85) per basic share, lower than the prior guidance range of $(45.4) to $(42.4) million, or $(0.72) to $(0.67) per basic share, that was previously provided on May 4, 2020. This decline is primarily due to a $12.6 million increase in amortization of discount and issuance costs related to our 2025 convertible senior notes issued in May and June 2020 and the concurrent repurchase of a portion of our 2023 convertible senior notes, along with a $5.8 million loss on early extinguishment of a portion of our 2023 convertible senior notes.
  • Non-GAAP net income in the range of $52.7 to $54.7 million, or $0.77 to $0.80 per diluted share, higher than the prior guidance range of $48.3 to $51.3 million, or $0.72 to $0.76 per diluted share, that was previously provided on May 4, 2020.
  • For the third quarter of 2020, Five9 expects to report:
  • Revenue in the range of $100.5 to $101.5 million.
  • GAAP net loss in the range of $(18.9) to $(17.9) million, or $(0.29) to $(0.28) per basic share.
  • Non-GAAP net income in the range of $11.6 to $12.6 million, or $0.17 to $0.18 per diluted share.

Conference Call Details

Five9 will discuss its second quarter 2020 results today, August 3, 2020, via teleconference at 4:30 p.m. Eastern Time. To access the call (ID 1396522), please dial: 866-248-8441 or 720-452-9102. An audio replay of the call will be available through August 17, 2020 by dialing 888-203-1112 or 719-457-0820 and entering access code 1396522. 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 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 COVID-19 relief bonus for employees. We calculate adjusted EBITDA by adding back or removing the following items to or from GAAP net loss: depreciation and amortization, stock-based compensation, interest expense, interest (income) and other, acquisition-related transaction costs and one-time integration costs, non-recurring litigation settlement costs and related indemnification fees, COVID-19 relief bonus for employees and provision for (benefit from) income taxes. We calculate non-GAAP operating income as GAAP operating income (loss) excluding stock-based compensation, intangibles amortization, acquisition-related transaction costs and one-time integration costs, non-recurring litigation settlement costs and related indemnification fees, and COVID-19 relief bonus for employees. We calculate non-GAAP net income as GAAP net loss excluding stock-based compensation, intangibles amortization, amortization of discount and issuance costs on convertible senior notes, acquisition-related transaction costs and one-time integration costs, non-recurring litigation settlement costs and related indemnification fees, gain on sale of convertible note held for investment, COVID-19 relief bonus for employees, loss on early extinguishment of debt, and tax benefit of valuation allowance associated with an acquisition. 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 expectations for market acceleration from on premise contact centers to the cloud and drivers thereof, Five9’s expectations regarding the benefits of its go-to-market investments, Five9's sales pipeline, Five9's faster product innovation and greater scale, and Five9’s growth expectations, and the third quarter and full year 2020 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) 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; (ii) 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; (iii) 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; (iv) 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; (v) failure to adequately retain and expand our sales force will impede our growth; (vi) 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; (vii) 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; (viii) 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; (ix) adverse economic conditions may harm our business; (x) security breaches and improper access to or disclosure of our data or our clients’ data, their customers’ data, or other cyber attacks on our systems, could result in litigation and regulatory risk, harm our reputation and our business; (xi) 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; (xii) 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; (xiii) 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; (xiv) 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; (xv) 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; (xvi) we have a history of losses and we may be unable to achieve or sustain profitability; (xvii) 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; (xviii) we may not be able to secure additional financing on favorable terms, or at all, to meet our future capital needs; (xix) we may acquire other companies or technologies or be the target of strategic transactions, which could divert our management’s attention, result in additional dilution to our stockholders and otherwise disrupt our operations and harm our operating results; (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 six 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)

 

 

June 30, 2020

 

December 31, 2019

ASSETS

 

 

 

 

Current assets:

 

 

 

 

Cash and cash equivalents

 

$

233,235 

 

 

$

77,976 

 

Marketable investments

 

452,708 

 

 

241,973 

 

Accounts receivable, net

 

39,607 

 

 

37,655 

 

Prepaid expenses and other current assets

 

17,529 

 

 

10,656 

 

Deferred contract acquisition costs

 

16,151 

 

 

13,014 

 

Total current assets

 

759,230 

 

 

381,274 

 

Property and equipment, net

 

39,799 

 

 

33,190 

 

Operating lease right-of-use assets

 

10,006 

 

 

8,746 

 

Intangible assets, net

 

25,605 

 

 

15,533 

 

Goodwill

 

34,444 

 

 

11,798 

 

Marketable investments

 

82,064 

 

 

— 

 

Other assets

 

2,789 

 

 

1,184 

 

Deferred contract acquisition costs — less current portion

 

39,366 

 

 

30,655 

 

Total assets

 

$

993,303 

 

 

$

482,380 

 

LIABILITIES AND STOCKHOLDERS’ EQUITY

 

 

 

 

Current liabilities:

 

 

 

 

Accounts payable

 

$

12,045 

 

 

$

10,156 

 

Accrued and other current liabilities

 

34,817 

 

 

18,385 

 

Operating lease liabilities

 

5,247 

 

 

5,064 

 

Accrued federal fees

 

1,670 

 

 

2,303 

 

Sales tax liabilities

 

1,565 

 

 

1,885 

 

Finance lease liabilities

 

2,032 

 

 

3,518 

 

Deferred revenue

 

26,306 

 

 

24,681 

 

Total current liabilities

 

83,682 

 

 

65,992 

 

Convertible senior notes

 

642,203 

 

 

209,604 

 

Sales tax liabilities — less current portion

 

847 

 

 

838 

 

Operating lease liabilities — less current portion

 

5,249 

 

 

4,329 

 

Finance lease liabilities — less current portion

 

100 

 

 

809 

 

Other long-term liabilities

 

6,814 

 

 

4,350 

 

Total liabilities

 

738,895 

 

 

285,922 

 

Stockholders’ equity:

 

 

 

 

Common stock

 

65 

 

 

61 

 

Additional paid-in capital

 

432,877 

 

 

351,870 

 

Accumulated other comprehensive income

 

1,004 

 

 

576 

 

Accumulated deficit

 

(179,538)

 

 

(156,049)

 

Total stockholders’ equity

 

254,408 

 

 

196,458 

 

Total liabilities and stockholders’ equity

 

$

993,303 

 

 

$

482,380 

 

 

 

 

 

 

 

FIVE9, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except per share data)

(Unaudited)

 

 

Three Months Ended

 

Six Months Ended

 

 

June 30, 2020

 

June 30, 2019

 

June 30, 2020

 

June 30, 2019

 

 

 

 

 

 

 

 

 

Revenue

 

$

99,792 

 

 

$

77,436 

 

 

$

194,880 

 

 

$

151,974 

 

Cost of revenue

 

42,453 

 

 

31,248 

 

 

82,490 

 

 

62,099 

 

Gross profit

 

57,339 

 

 

46,188 

 

 

112,390 

 

 

89,875 

 

Operating expenses:

 

 

 

 

 

 

 

 

Research and development

 

17,208 

 

 

10,811 

 

 

32,397 

 

 

21,357 

 

Sales and marketing

 

32,231 

 

 

23,250 

 

 

62,391 

 

 

44,951 

 

General and administrative

 

16,129 

 

 

12,042 

 

 

30,787 

 

 

23,804 

 

Total operating expenses

 

65,568 

 

 

46,103 

 

 

125,575 

 

 

90,112 

 

Income (loss) from operations

 

(8,229)

 

 

85 

 

 

(13,185)

 

 

(237)

 

Other income (expense), net:

 

 

 

 

 

 

 

 

Interest expense

 

(5,734)

 

 

(3,406)

 

 

(9,218)

 

 

(6,802)

 

Interest income and other

 

(4,965)

 

 

1,490 

 

 

(3,893)

 

 

3,235 

 

Total other income (expense), net

 

(10,699)

 

 

(1,916)

 

 

(13,111)

 

 

(3,567)

 

Loss before income taxes

 

(18,928)

 

 

(1,831)

 

 

(26,296)

 

 

(3,804)

 

Provision for (benefit from) income taxes

 

(2,876)

 

 

29 

 

 

(2,807)

 

 

(20)

 

Net loss

 

$

(16,052)

 

 

(1,860)

 

 

$

(23,489)

 

 

$

(3,784)

 

Net loss per share:

 

 

 

 

 

 

 

 

Basic and diluted

 

$

(0.25)

 

 

$

(0.03)

 

 

$

(0.38)

 

 

$

(0.06)

 

Shares used in computing net loss per share:

 

 

 

 

 

 

 

 

Basic and diluted

 

63,282 

 

 

60,058 

 

 

62,494 

 

 

59,714 

 

 

 

 

 

 

 

 

 

 

 

 

FIVE9, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

(Unaudited)

 

 

Six Months Ended

 

 

June 30, 2020

 

June 30, 2019

Cash flows from operating activities:

 

 

 

 

Net loss

 

$

(23,489)

 

 

$

(3,784)

 

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

 

 

 

 

Depreciation and amortization

 

11,213 

 

 

6,553 

 

Amortization of operating lease right-of-use assets

 

2,786 

 

 

2,147 

 

Amortization of premium on marketable investments

 

630 

 

 

(883)

 

Provision for doubtful accounts

 

353 

 

 

30 

 

Stock-based compensation

 

30,585 

 

 

19,122 

 

Loss on early extinguishment of debt

 

5,794 

 

 

— 

 

Gain on sale of convertible note held for investment

 

— 

 

 

(217)

 

Amortization of discount and issuance costs on convertible senior notes

 

8,571 

 

 

6,234 

 

Tax benefit of valuation allowance associated with an acquisition

 

(2,910)

 

 

— 

 

Others

 

82 

 

 

(23)

 

Changes in operating assets and liabilities:

 

 

 

 

Accounts receivable

 

(2,119)

 

 

(3,378)

 

Prepaid expenses and other current assets

 

(7,065)

 

 

(4,053)

 

Deferred contract acquisition costs

 

(11,848)

 

 

(5,488)

 

Other assets

 

(1,604)

 

 

(12,571)

 

Accounts payable

 

2,553 

 

 

159 

 

Accrued and other current liabilities

 

9,561 

 

 

6,516 

 

Accrued federal fees and sales tax liability

 

(945)

 

 

(337)

 

Deferred revenue

 

3,292 

 

 

2,539 

 

Other liabilities

 

(281)

 

 

5,412 

 

Net cash provided by operating activities

 

25,159 

 

 

17,978 

 

Cash flows from investing activities:

 

 

 

 

Purchases of marketable investments

 

(460,899)

 

 

(151,308)

 

Proceeds from maturities of marketable investments

 

167,850 

 

 

165,354 

 

Purchases of property and equipment

 

(14,891)

 

 

(8,226)

 

Cash paid to acquire Virtual Observer

 

(28,313)

 

 

— 

 

Cash paid to acquire substantially all of the assets of Whendu LLC

 

(100)

 

 

— 

 

Proceeds from sale of convertible note held for investment

 

— 

 

 

217 

 

Net cash (used in) provided by investing activities

 

(336,353)

 

 

6,037 

 

Cash flows from financing activities:

 

 

 

 

Proceeds from issuance of 2025 convertible senior notes, net of issuance costs

 

728,812 

 

 

— 

 

Payments for capped call transactions related to the 2025 convertible senior notes

 

(90,448)

 

 

— 

 

Repurchase of a portion of 2023 convertible senior notes, net of costs

 

(181,462)

 

 

— 

 

Proceeds from exercise of common stock options

 

6,080 

 

 

4,248 

 

Proceeds from sale of common stock under ESPP

 

5,666 

 

 

3,996 

 

Payments of finance leases

 

(2,195)

 

 

(3,702)

 

Net cash provided by financing activities

 

466,453 

 

 

4,542 

 

Net increase in cash and cash equivalents

 

155,259 

 

 

28,557 

 

Cash and cash equivalents:

 

 

 

 

Beginning of period

 

77,976 

 

 

81,912 

 

End of period

 

$

233,235 

 

 

$

110,469 

 

 

 

 

 

 

 

 

 

FIVE9, INC.

RECONCILIATION OF GAAP GROSS PROFIT TO ADJUSTED GROSS PROFIT

(In thousands, except percentages)

(Unaudited)

 

 

Three Months Ended

 

Six Months Ended

 

 

June 30, 2020

 

June 30, 2019

 

June 30, 2020

 

June 30, 2019

 

 

 

 

 

 

 

 

 

GAAP gross profit

 

$

57,339 

 

 

$

46,188 

 

 

$

112,390 

 

 

$

89,875 

 

GAAP gross margin

 

57.5 

%

 

59.6 

%

 

57.7 

%

 

59.1 

%

Non-GAAP adjustments:

 

 

 

 

 

 

 

 

Depreciation

 

3,382 

 

 

2,416 

 

 

6,232 

 

 

4,694 

 

Intangibles amortization

 

1,738 

 

 

88 

 

 

2,828 

 

 

176 

 

Stock-based compensation

 

2,499 

 

 

1,658 

 

 

4,488 

 

 

2,887 

 

COVID-19 relief bonus for employees

 

618 

 

 

— 

 

 

618 

 

 

— 

 

Adjusted gross profit

 

$

65,576 

 

 

$

50,350 

 

 

$

126,556 

 

 

$

97,632 

 

Adjusted gross margin

 

65.7 

%

 

65.0 

%

 

64.9 

%

 

64.2 

%

 

 

FIVE9, INC.

RECONCILIATION OF GAAP NET LOSS TO ADJUSTED EBITDA

(In thousands, except percentages)

(Unaudited)

 

 

Three Months Ended

 

Six Months Ended

 

 

June 30, 2020

 

June 30, 2019

 

June 30, 2020

 

June 30, 2019

 

 

 

 

 

 

 

 

 

GAAP net loss

 

$

(16,052)

 

 

$

(1,860)

 

 

$

(23,489)

 

 

$

(3,784)

 

Non-GAAP adjustments:

 

 

 

 

 

 

 

 

Depreciation and amortization

 

6,243 

 

 

3,361 

 

 

11,213 

 

 

6,553 

 

Stock-based compensation

 

16,791 

 

 

10,436 

 

 

30,585 

 

 

19,122 

 

Interest expense

 

5,734 

 

 

3,406 

 

 

9,218 

 

 

6,802 

 

Interest income and other

 

4,965 

 

 

(1,490)

 

 

3,893 

 

 

(3,235)

 

Legal settlement

 

— 

 

 

420 

 

 

— 

 

 

420 

 

Legal and indemnification fees related to settlement

 

— 

 

 

64 

 

 

— 

 

 

356 

 

Acquisition-related transaction costs and one-time integration costs

 

1,637 

 

 

— 

 

 

1,966 

 

 

— 

 

COVID-19 relief bonus for employees

 

1,817 

 

 

— 

 

 

1,817 

 

 

— 

 

Provision for (benefit from) income taxes

 

(2,876)

 

 

29 

 

 

(2,807)

 

 

(20)

 

Adjusted EBITDA

 

$

18,259 

 

 

$

14,366 

 

 

$

32,396 

 

 

$

26,214 

 

Adjusted EBITDA as % of revenue

 

18.3 

%

 

18.6 

%

 

16.6 

%

 

17.2 

%

 

 

 

 

 

 

 

 

 

 

FIVE9, INC.

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

(In thousands)

(Unaudited)

 

 

Three Months Ended

 

Six Months Ended

 

 

June 30, 2020

 

June 30, 2019

 

June 30, 2020

 

June 30, 2019

 

 

 

 

 

 

 

 

 

Income (loss) from operations

 

$

(8,229)

 

 

$

85 

 

 

$

(13,185)

 

 

$

(237)

 

Non-GAAP adjustments:

 

 

 

 

 

 

 

 

Stock-based compensation

 

16,791 

 

 

10,436 

 

 

30,585 

 

 

19,122 

 

Intangibles amortization

 

1,738 

 

 

88 

 

 

2,828 

 

 

176 

 

Legal settlement

 

— 

 

 

420 

 

 

— 

 

 

420 

 

Legal and indemnification fees related to settlement

 

— 

 

 

64 

 

 

— 

 

 

356 

 

Acquisition-related transaction costs and one-time integration costs

 

1,637 

 

 

— 

 

 

1,966 

 

 

— 

 

COVID-19 relief bonus for employees

 

1,817 

 

 

— 

 

 

1,817 

 

 

— 

 

Non-GAAP operating income

 

$

13,754 

 

 

$

11,093 

 

 

$

24,011 

 

 

$

19,837 

 

 

 

 

 

 

 

 

 

 

 

FIVE9, INC.

RECONCILIATION OF GAAP NET LOSS TO NON-GAAP NET INCOME

(In thousands, except per share data)

(Unaudited)

 

 

Three Months Ended

 

Six Months Ended

 

 

June 30, 2020

 

June 30, 2019

 

June 30, 2020

 

June 30, 2019

 

 

 

 

 

 

 

 

 

GAAP net loss

 

$

(16,052)

 

 

$

(1,860)

 

 

$

(23,489)

 

 

$

(3,784)

 

Non-GAAP adjustments:

 

 

 

 

 

 

 

 

Stock-based compensation

 

16,791 

 

 

10,436 

 

 

30,585 

 

 

19,122 

 

Intangibles amortization

 

1,738 

 

 

88 

 

 

2,828 

 

 

176 

 

Amortization of discount and issuance costs on convertible senior notes

 

5,251 

 

 

3,155 

 

 

8,571 

 

 

6,234 

 

Legal settlement

 

— 

 

 

420 

 

 

— 

 

 

420 

 

Legal and indemnification fees related to settlement

 

— 

 

 

64 

 

 

— 

 

 

356 

 

Acquisition-related transaction costs and one-time integration costs

 

1,637 

 

 

— 

 

 

1,966 

 

 

— 

 

COVID-19 relief bonus for employees

 

1,817 

 

 

— 

 

 

1,817 

 

 

— 

 

Loss on early extinguishment of debt

 

5,794 

 

 

— 

 

 

5,794 

 

 

— 

 

Gain on sale of convertible note held for investment

 

— 

 

 

— 

 

 

— 

 

 

(217)

 

Tax benefit of valuation allowance associated with an acquisition

 

(2,910)

 

 

— 

 

 

(2,910)

 

 

— 

 

Non-GAAP net income

 

$

14,066 

 

 

$

12,303 

 

 

$

25,162 

 

 

$

22,307 

 

GAAP net loss per share:

 

 

 

 

 

 

 

 

Basic and diluted

 

$

(0.25)

 

 

$

(0.03)

 

 

$

(0.38)

 

 

$

(0.06)

 

Non-GAAP net income per share:

 

 

 

 

 

 

 

 

Basic

 

$

0.22 

 

 

$

0.20 

 

 

$

0.40 

 

 

$

0.37 

 

Diluted

 

$

0.21 

 

 

$

0.20 

 

 

$

0.38 

 

 

$

0.35 

 

Shares used in computing GAAP net loss per share:

 

 

 

 

 

 

 

 

Basic and diluted

 

63,282 

 

 

60,058 

 

 

62,494 

 

 

59,714 

 

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

 

 

 

 

 

 

 

 

Basic

 

63,282 

 

 

60,058 

 

 

62,494 

 

 

59,714 

 

Diluted

 

67,171 

 

 

62,950 

 

 

65,960 

 

 

62,843 

 

 

 

 

 

 

 

 

 

 

 

FIVE9, INC.

SUMMARY OF STOCK-BASED COMPENSATION, DEPRECIATION AND INTANGIBLES AMORTIZATION

(In thousands)

(Unaudited) 

 

 

Three Months Ended

 

 

June 30, 2020

 

June 30, 2019

 

 

Stock-Based Compensation

 

Depreciation

 

Intangibles Amortization

 

Stock-Based Compensation

 

Depreciation

 

Intangibles Amortization

 

 

 

 

 

 

 

 

 

 

 

 

 

Cost of revenue

 

$

2,499 

 

 

$

3,382 

 

 

$

1,738 

 

 

$

1,658 

 

 

$

2,416 

 

 

$

88 

 

Research and development

 

3,684 

 

 

497 

 

 

— 

 

 

1,907 

 

 

450 

 

 

— 

 

Sales and marketing

 

5,265 

 

 

 

 

— 

 

 

2,749 

 

 

 

 

— 

 

General and administrative

 

5,343 

 

 

624 

 

 

— 

 

 

4,122 

 

 

406 

 

 

— 

 

Total

 

$

16,791 

 

 

$

4,505 

 

 

$

1,738 

 

 

$

10,436 

 

 

$

3,273 

 

 

$

88 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Six Months Ended

 

 

June 30, 2020

 

June 30, 2019

 

 

Stock-Based Compensation

 

Depreciation

 

Intangibles Amortization

 

Stock-Based Compensation

 

Depreciation

 

Intangibles Amortization

 

 

 

 

 

 

 

 

 

 

 

 

 

Cost of revenue

 

$

4,488 

 

 

$

6,232 

 

 

$

2,828 

 

 

$

2,887 

 

 

$

4,694 

 

 

$

176 

 

Research and development

 

6,491 

 

 

963 

 

 

— 

 

 

3,377 

 

 

890 

 

 

— 

 

Sales and marketing

 

9,371 

 

 

 

 

— 

 

 

4,998 

 

 

 

 

— 

 

General and administrative

 

10,235 

 

 

1,187 

 

 

— 

 

 

7,860 

 

 

791 

 

 

— 

 

Total

 

$

30,585 

 

 

$

8,385 

 

 

$

2,828 

 

 

$

19,122 

 

 

$

6,377 

 

 

$

176 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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, 2020

 

December 31, 2020

 

 

Low

 

High

 

Low

 

High

 

 

 

 

 

 

 

 

 

GAAP net loss

 

$

(18,938)

 

 

$

(17,938)

 

 

$

(56,402)

 

 

$

(54,402)

 

Non-GAAP adjustments:

 

 

 

 

 

 

 

 

Stock-based compensation

 

17,618 

 

 

17,618 

 

 

66,191 

 

 

66,191 

 

Intangibles amortization

 

1,738 

 

 

1,738 

 

 

6,232 

 

 

6,232 

 

Amortization of discount and issuance costs on convertible senior notes

 

8,637 

 

 

8,637 

 

 

25,975 

 

 

25,975 

 

Loss on early extinguishment of debt

 

— 

 

 

— 

 

 

5,794 

 

 

5,794 

 

Acquisition-related transaction costs and one-time integration costs

 

2,545 

 

 

2,545 

 

 

6,003 

 

 

6,003 

 

COVID-19 relief bonus for employees

 

— 

 

 

— 

 

 

1,817 

 

 

1,817 

 

Tax benefit of valuation allowance associated with an acquisition

 

— 

 

 

— 

 

 

(2,910)

 

 

(2,910)

 

Income tax expense effects (1)

 

— 

 

 

— 

 

 

— 

 

 

— 

 

Non-GAAP net income

 

$

11,600 

 

 

$

12,600 

 

 

$

52,700 

 

 

$

54,700 

 

GAAP net loss per share, basic and diluted

 

$

(0.29)

 

 

$

(0.28)

 

 

$

(0.88)

 

 

$

(0.85)

 

Non-GAAP net income per share:

 

 

 

 

 

 

 

 

Basic

 

$

0.18 

 

 

$

0.19 

 

 

$

0.82 

 

 

$

0.85 

 

Diluted

 

$

0.17 

 

 

$

0.18 

 

 

$

0.77 

 

 

$

0.80 

 

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

 

 

 

 

 

 

 

 

Basic

 

64,900 

 

 

64,900 

 

 

64,200 

 

 

64,200 

 

Diluted

 

69,100 

 

 

69,100 

 

 

68,100 

 

 

68,100 

 

 

 

 

 

 

 

 

 

 

 

  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