Summary
Five9 reported first-quarter 2024 revenue of $247.0 million, up 13.1% from the prior-year quarter. Gross profit rose 16.5% to $132.5 million, and gross margin improved 1.6 percentage points to 53.6%. The GAAP operating loss narrowed to $20.7 million, and operating margin came in at negative 8.4%, up 4.9 percentage points. GAAP net loss narrowed to $7.1 million, or negative $0.10 per diluted share. The non-GAAP picture was brighter. Non-GAAP net income was $35.7 million, or $0.48 per diluted share. Adjusted EBITDA reached $37.6 million, or 15.2% of revenue. Adjusted gross margin was 60.8%, and non-GAAP operating income was $27.6 million. The gap between the two sets of results still rests largely on stock-based compensation and amortization.
Operating cash flow was $32.4 million, down 3.2% from the prior-year quarter. Capital expenditures rose 20.4% to $12.0 million. Management pointed to cash use for operating assets and liabilities tied to the timing of vendor payments and customer receipts. Deferred revenue, current portion, increased 15.4% to $67.0 million, and remaining performance obligations rose 14.2% to $1.05 billion. Both measures suggest the pipeline kept building during the quarter. The company also completed a convertible notes refinancing in March, issuing a new series of notes and repurchasing part of an older series. Cash, marketable investments and working capital all stayed at substantial levels.
Five9 ended the quarter with more than 3,000 clients spread across industries and seat sizes. Its Annual Dollar-Based Retention Rate was 109%, down from 114% a year earlier. Management attributed the decline to continued macroeconomic headwinds on the installed base, which typically contributes about half of annual revenue growth. The company signed its largest deal ever, a Fortune 50 financial services company. That win supports the push up-market, where larger contracts take longer to close and need more configuration work. Cost of revenue grew on higher depreciation, data center and public cloud costs, while research and development, sales and marketing, and general and administrative spending each rose, mostly on personnel and commission costs.
The macro backdrop remains a clear risk. Management said adverse economic conditions will likely keep pressuring revenue in future periods. The risk factor list is long: competition, rapid technological change, evolving AI, security breaches, dependence on third-party telecommunications providers, international expansion, and a history of losses. AI sits on both sides of the ledger, since the company markets an AI-infused platform while also warning that further AI development may not succeed and could harm reputation or results. Five9 is also in talks about a revolving credit facility it hopes to sign in the second half of 2024, with no assurance it will get one on acceptable terms. Legal and regulatory contingencies are another overhang.
Guidance covers the second quarter of 2024 and the full year 2024. For the second quarter, management guided non-GAAP net income per share to $0.42 to $0.44. For the full year 2024, the non-GAAP net income per share target is $2.15 to $2.19. The first quarter showed margin improvement and a growing backlog, but the retention rate decline and the macro commentary leave execution risk on the table. Growth within the installed base is the piece to watch from here.
Forecast
Reported figures
GAAP, from SEC filings| Metric | Q1 FY2024 | Q4 FY2023 | QoQ | Q1 FY2023 | YoY |
|---|---|---|---|---|---|
| Revenue | $247.0M | $239.1M | +3.3% | $218.4M | +13.1% |
| Gross profit | $132.5M | $126.6M | +4.7% | $113.7M | +16.5% |
| Gross margin | 53.6% | 52.9% | +0.7 pp | 52.0% | +1.6 pp |
| Research & development | $41.5M | $38.9M | +6.8% | $38.1M | +8.9% |
| Sales & marketing | $81.1M | $73.0M | +11.2% | $76.3M | +6.3% |
| General & administrative | $30.5M | $33.3M | -8.4% | $28.3M | +8.1% |
| Total operating expenses | $153.2M | $145.2M | +5.5% | $142.7M | +7.4% |
| Operating income (loss) | -$20.7M | -$18.6M | -11.3% | -$29.0M | +28.6% |
| Operating margin | -8.4% | -7.8% | -0.6 pp | -13.3% | +4.9 pp |
| Net income (loss) | -$7.1M | -$12.4M | +42.7% | -$27.2M | +74.0% |
| Net margin | -2.9% | -5.2% | +2.3 pp | -12.5% | +9.6 pp |
| Diluted EPS | -$0.10 | -$0.17 | +$0.07 | -$0.38 | +$0.28 |
Risks
MD&A states adverse economic conditions will continue to have an adverse impact on revenue in future periods, and the installed base business, which typically contributes about half of annual revenue growth, continues to experience macroeconomic headwinds. Annual Dollar-Based Retention Rate decreased to 109% for the twelve months ended March 31, 2024 from 114% for the twelve months ended March 31, 2023.
Risk Factors newly emphasize that servicing debt may require a significant amount of cash and that the company may not have sufficient cash flow to pay indebtedness or settle conversions. As of March 31, 2024, $434.4 million principal amount of 2025 convertible senior notes was outstanding and matures June 1, 2025; in March 2024, $747.5 million principal amount of 2029 convertible senior notes was issued and all was outstanding as of March 31, 2024.
Risk Factors state that if conditional conversion features are triggered, holders may convert notes and any election to settle conversions with cash could adversely affect liquidity. The conversion features of the 2025 convertible senior notes were not triggered during the three months ended March 31, 2024, so holders are not entitled to convert from April 1, 2024 to June 30, 2024, and the 2029 convertible senior notes will be evaluated after June 30, 2024.
Risk Factors note that conversion of convertible senior notes may dilute existing stockholders to the extent settled with common stock, and transactions relating to the notes, including capped call hedging activities, may adversely affect the market price of common stock.
MD&A states the company is in discussions for a Revolving Credit Facility of up to $200 million and expects to enter into it in the second half of 2024, but there can be no assurance it will be able to obtain it on acceptable terms or at all. If unable to raise additional capital as needed, business, operating results and financial condition could be harmed.
SaaS KPIs
All quarters →Adjusted EBITDA
Adjusted EBITDA Margin
Adjusted Gross Margin
Total Customers
Non-GAAP Operating Income
Non-GAAP Net Income
Non-GAAP Net Income Margin
Subscription Revenue Growth
GAAP operating cash flow
Summary, forecast, risks and KPIs are extracted from Five9, Inc.'s SEC filings for Q1 FY2024 (10-Q / 10-K and the 8-K earnings release); GAAP figures in the summary are checked against the reported XBRL data. They can contain errors; the filings are authoritative. Processed Oct 2, 2026.