Summary
Five9 posted record revenue of $285.8 million in the third quarter of 2025, up 8.2% from $264.2 million in the prior-year quarter. Revenue for the first nine months of 2025 was $848.8 million, up 11.2% from $763.3 million. Enterprise AI revenue grew 41% year over year. Subscription and related usage fees accounted for 93% of revenue, up from 92% a year earlier, and the company now serves more than 3,000 organizations. Growth came from larger customers, sales and marketing activity and improved brand awareness. Management still expects macroeconomic challenges to hold back revenue in future periods. The annual dollar-based retention rate slipped to 107% from 108%, a decline tied to those headwinds and to a difficult comparison with a single large customer that ramped through 2024.
Profitability swung sharply positive. Gross profit was $157.3 million, up 10.6%, and gross margin reached 55.0% against 53.8% a year ago. Operating income of $16.0 million replaced an operating loss of $15.4 million in the prior-year quarter. Net income was $18.0 million, or $0.21 per diluted share, compared with a net loss of $4.5 million, or $0.06 per diluted share, a year earlier. For the first nine months of 2025, net income was $19.7 million against a net loss of $24.4 million. Non-GAAP net income was $60.6 million, or $0.78 per diluted share, equal to 21.2% of revenue, compared with $50.5 million, or $0.67 per diluted share, at 19.1% of revenue. Adjusted EBITDA reached $71.7 million, or 25.1% of revenue, up from $52.4 million, or 19.8%. A restructuring plan approved on March 31, 2025 trimmed global full-time employees by about 4%, and management expects no further charges under that plan.
Cash generation was the standout. Operating cash flow was $59.2 million for the quarter, up 44.0%, and $142.6 million for the first nine months, up 52.8%. Capital expenditures fell 26.9% to $10.5 million in the quarter and 43.4% to $18.7 million year to date. Two balance sheet lines point the other way. Deferred revenue, current portion, was $74.7 million, down 6.6% from $80.0 million a year earlier. Remaining performance obligations rose just 1.9% to $1.12 billion. Neither figure suggests accelerating bookings. The board responded with a repurchase authorization of up to $150 million of common stock, including a $50 million accelerated share repurchase planned for November.
Guidance covers the next quarter and the full year. For the fourth quarter of 2025, Five9 guides to non-GAAP net income per diluted share of $0.76 to $0.80, and GAAP net income per share is also guided positive. For the full year 2025, the company guides to non-GAAP net income per diluted share of $2.92 to $2.96, with GAAP net income per share positive as well. The share counts used in that guidance assume the accelerated repurchase completes in November, so the per-share figures reflect a smaller share count.
Risks remain material. A securities class action filed on December 4, 2024 and a related derivative suit are pending, and the company states it cannot estimate a possible loss; it filed a motion to dismiss the amended complaint on July 29, 2025. Management also cites continued macroeconomic challenges, global tariff increases, inflation, high interest rates, the Russia-Ukraine conflict and the conflicts in the Middle East as pressures on revenue. The structural worry is AI. If AI handles a growing share of contact center interactions and Five9 cannot replace declining license subscription revenue with AI solution sales, revenue and margins suffer. Competition keeps rising, and retention of 107% leaves less margin for error than the 108% posted a year ago.
Forecast
Reported figures
GAAP, from SEC filings| Metric | Q3 FY2025 | Q2 FY2025 | QoQ | Q3 FY2024 | YoY |
|---|---|---|---|---|---|
| Revenue | $285.8M | $283.3M | +0.9% | $264.2M | +8.2% |
| Gross profit | $157.3M | $155.4M | +1.2% | $142.2M | +10.6% |
| Gross margin | 55.0% | 54.9% | +0.2 pp | 53.9% | +1.2 pp |
| Research & development | $35.2M | $39.9M | -11.8% | $42.5M | -17.1% |
| Sales & marketing | $71.7M | $80.7M | -11.2% | $78.6M | -8.9% |
| General & administrative | $34.4M | $36.4M | -5.6% | $36.6M | -6.1% |
| Total operating expenses | $141.2M | $157.0M | -10.0% | $157.7M | -10.4% |
| Operating income (loss) | $16.0M | -$1.6M | +1127.7% | -$15.4M | +204.0% |
| Operating margin | 5.6% | -0.6% | +6.2 pp | -5.8% | +11.4 pp |
| Net income (loss) | $18.0M | $1.2M | +1457.5% | -$4.5M | +501.3% |
| Net margin | 6.3% | 0.4% | +5.9 pp | -1.7% | +8.0 pp |
| Diluted EPS | $0.21 | $0.01 | +$0.20 | -$0.06 | +$0.27 |
| Customers | 3,000 | 3,000 | ±0.0% | — | — |
Risks
MD&A states it expects macroeconomic challenges to continue to have an adverse impact on revenue in future periods, and that the installed base business, which contributes a significant portion of annual revenue growth, continues to experience macroeconomic challenges despite increases in up-sells and cross-sells.
Annual Dollar-Based Retention Rate decreased to 107% for the twelve months ended September 30, 2025 from 108% for the twelve months ended September 30, 2024, reflecting continued macroeconomic headwinds and year-over-year challenges from a single large new customer ramping significantly throughout 2024 and stronger seasonal increases in the second half of 2024.
MD&A cites global tariff increases and potential future increases and announcements regarding same, the Russia-Ukraine conflict, and the conflicts in the Middle East as factors that could harm business, results of operations, financial condition, and future capital requirements.
The 2025 Plan reduced global full-time employees by approximately 4% and incurred $7.9 million in restructuring costs plus $2.1 million in related stock-based compensation during the nine months ended September 30, 2025, following the 2024 Plan that reduced employees by approximately 6%.
A securities class action filed December 4, 2024 against the CEO and then-current CFO remains pending, with an amended complaint filed May 30, 2025 and a motion to dismiss filed July 29, 2025; a related derivative action has been stayed, and the company cannot estimate the reasonably possible loss.
The 2025 convertible senior notes matured on June 1, 2025 and were settled with a $434.4 million cash payment, while $747.5 million aggregate principal of 2029 convertible senior notes remained outstanding as of September 30, 2025; MD&A notes future capital needs depend on growth, the economy, and litigation, and additional capital may not be available on acceptable terms.
SaaS KPIs
All quarters →Adjusted EBITDA Margin
Total Customers
Enterprise AI Revenue Growth
Summary, forecast, risks and KPIs are extracted from Five9, Inc.'s SEC filings for Q3 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 2, 2026.