Summary
Five9 reported first-quarter 2025 revenue of $279.7 million, an increase of 13.2% from the prior-year quarter. Gross profit rose 16.0% to $153.7 million. Gross margin reached 55.0%, up 1.3 percentage points. The company narrowed its operating loss by 73.8% to $5.4 million. Operating margin improved to -1.9%, up 6.4 percentage points. Net income was $0.6 million, swinging to a profit from a loss a year earlier. Diluted EPS was $0.01, up $0.11. Revenue growth came primarily from larger customers, helped by increased sales and marketing activities and improved brand awareness. Five9 had more than 3,000 customers as of March 31, 2025.
Cash generation improved. Operating cash flow rose 49.6% to $48.4 million for the quarter. Capital expenditures fell 60.5% to $4.72 million. Deferred revenue increased 11.6% to $74.8 million. Remaining performance obligations increased 1.7% to $1.07 billion. Those metrics all moved higher. The company also continued to invest in its platform and AI capabilities, while keeping a tighter rein on capital spending. Five9 said it plans to use cash to settle its 2025 convertible senior notes due June 1, 2025, a move that could reduce liquidity and require additional fundraising.
Adjusted EBITDA was $52.7 million, compared with $37.6 million a year earlier. The annual dollar-based retention rate was 107%, down from 109%. Management attributed the decline to continued macroeconomic headwinds on the installed base and larger seasonal decreases in consumer and healthcare verticals. Subscription and related usage fees accounted for 93% of revenue. Five9 also moved to cut costs. The 2024 Plan reduced global full-time employees by approximately 6%. On March 31, 2025, the company approved the 2025 Plan, which began on April 3, 2025. That plan is expected to reduce global full-time employees by approximately 4%. Estimated cash expenditures are $7 million to $9 million, with non-cash expenditures of $1 million to $1.5 million. The expenses are expected mostly in the second and third quarters of 2025, and the actions should be substantially complete by the end of the second quarter of 2025. The company said the plan prioritizes investments in artificial intelligence and profitable growth.
Management's outlook points to long-term gross margin expansion as revenue growth outpaces investments in professional services, public cloud, cloud operations, customer support, and network infrastructure. The company expects research and development and sales and marketing expenses to increase in absolute dollars, while general and administrative expenses fluctuate near term but rise in absolute dollars and decline as a percentage of revenue over the longer term. Risks remain. Five9 cited continued macroeconomic challenges, global tariff increases, the Russia-Ukraine conflict, and conflicts in the Middle East. It expects those pressures to adversely affect revenue in future periods. The installed base business continues to face macroeconomic challenges despite up-sells and cross-sells. Legal overhang is also present. A securities class action was filed on December 4, 2024. A related shareholder derivative action was filed on March 18, 2025. The court approved a stay of the derivative action on April 8, 2025.
Forecast
No forward guidance in this quarter's filings.
Reported figures
GAAP, from SEC filings| Metric | Q1 FY2025 | Q4 FY2024 | QoQ | Q1 FY2024 | YoY |
|---|---|---|---|---|---|
| Revenue | $279.7M | $278.7M | +0.4% | $247.0M | +13.2% |
| Gross profit | $153.7M | $156.0M | -1.5% | $132.5M | +16.0% |
| Gross margin | 55.0% | 56.0% | -1.0 pp | 53.6% | +1.3 pp |
| Research & development | $41.1M | $41.5M | -0.9% | $41.5M | -1.0% |
| Sales & marketing | $82.9M | $73.9M | +12.1% | $81.1M | +2.2% |
| General & administrative | $35.2M | $36.4M | -3.4% | $30.5M | +15.2% |
| Total operating expenses | $159.2M | $151.8M | +4.8% | $153.2M | +3.9% |
| Operating income (loss) | -$5.4M | $4.2M | -229.9% | -$20.7M | +73.8% |
| Operating margin | -1.9% | 1.5% | -3.4 pp | -8.4% | +6.4 pp |
| Net income (loss) | $576.0K | $11.6M | -95.0% | -$7.1M | +108.1% |
| Net margin | 0.2% | 4.2% | -3.9 pp | -2.9% | +3.1 pp |
| Diluted EPS | $0.01 | $0.16 | -$0.15 | -$0.10 | +$0.11 |
| Customers | 3,000 | 3,000 | ±0.0% | — | — |
Risks
MD&A states continued macroeconomic challenges, global tariff increases, the Russia-Ukraine conflict and Middle East conflicts are expected to continue to have an adverse impact on revenue in future periods. The company also notes that its installed base business continues to experience macroeconomic challenges despite increases in up-sells and cross-sells.
A putative securities class action was filed on December 4, 2024, and a related shareholder derivative action was filed on March 18, 2025. The company cannot predict the duration or outcome and is unable to estimate the reasonably possible loss or range of losses from the securities lawsuit.
As of March 31, 2025, $434.4 million aggregate principal amount of 2025 convertible senior notes was outstanding and matures on June 1, 2025. The company plans to use cash to settle these notes, which will decrease cash and cash equivalents, could preclude other investments, and could necessitate or accelerate additional fundraising.
Annual Dollar-Based Retention Rate decreased to 107% for the twelve months ended March 31, 2025 from 109% for the twelve months ended March 31, 2024. The decline was primarily due to continued macroeconomic headwinds on the installed base and larger seasonal decreases in the consumer and healthcare vertical markets.
On March 31, 2025, the company approved the 2025 Plan to reduce global full-time employees by approximately 4%, with estimated cash expenditures of $7 million to $9 million and non-cash expenditures of $1 million to $1.5 million, primarily in the second and third quarters of 2025. This follows the 2024 Plan that reduced global full-time employees by approximately 6%.
SaaS KPIs
All quarters →Annual Dollar-Based Retention Rate
Adjusted EBITDA
Total Customers
Summary, forecast, risks and KPIs are extracted from Five9, Inc.'s SEC filings for Q1 FY2025 (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 1, 2026.