Summary
The fiscal year 2016 marked a period of substantial growth for Five9, a cloud software provider specializing in contact center solutions. The company reported a revenue increase to $162.1 million, up from $128.9 million in 2015, representing a 26% growth year-over-year. This growth was primarily driven by the expansion of their larger client base. Despite this positive momentum, no single client accounted for more than 10% of the total revenue, indicating a well-diversified client portfolio across various industries.
In evaluating performance, one notable metric is the Annual Dollar-Based Retention Rate, which rose to 100% in 2016 from 96% in the previous two years. This improvement was attributed to existing clients increasing their number of agent seats with Five9, showcasing strong customer retention and upsell capabilities.
The MD&A highlights a robust SaaS model where revenue is largely derived from subscriptions and related usage of the Virtual Contact Center (VCC) platform. However, as with any business model that relies heavily on recurring revenue, maintaining high retention rates is essential to sustaining growth. The total client base, surpassing 2,000 customers as of year-end, underscores the breadth of Five9's market penetration and its competitiveness in the SaaS contact center sector.
Looking forward, Five9's ability to manage growth effectively will be crucial. The company plans to continue investing in expanding operations and headcount, enhancing its VCC platform, and exploring international market opportunities. However, these ambitions come with risks. Fluctuations in quarterly and annual results due to varying market acceptance and the ability to attract and retain large clients could potentially harm the company's stock value.
The risk factors emphasized also highlight that economic conditions can impact results significantly. Such macroeconomic factors, paired with competitive dynamics and technological advancements, could create challenges for maintaining its current growth trajectory.
Overall, while Five9's FY2016 performance was robust, and strategies for market expansion seem promising, the company must navigate these outlined risks effectively to maintain its upward revenue trajectory and strengthen its leadership position in the cloud contact center domain.
Forecast
No forward guidance in this quarter's filings.
Reported figures
GAAP, from SEC filings| Metric | Q4 FY2016 | Q3 FY2016 | QoQ | Q4 FY2015 | YoY |
|---|---|---|---|---|---|
| Revenue | $44.2M | $41.0M | +7.9% | $36.0M | +22.7% |
| Gross profit | $28.4M | $23.2M | +22.6% | $20.4M | +39.4% |
| Gross margin | 64.3% | 56.6% | +7.7 pp | 56.6% | +7.7 pp |
| Research & development | $6.2M | $6.0M | +3.2% | $5.6M | +11.8% |
| Sales & marketing | $14.5M | $12.9M | +12.0% | $10.7M | +35.1% |
| General & administrative | $6.5M | $6.1M | +6.0% | $6.4M | +1.2% |
| Total operating expenses | $27.2M | $25.1M | +8.4% | $22.7M | +19.8% |
| Operating income (loss) | $1.2M | -$1.9M | +163.1% | -$2.3M | +151.8% |
| Operating margin | 2.7% | -4.7% | +7.4 pp | -6.5% | +9.2 pp |
| Net income (loss) | $409.0K | -$3.9M | +110.5% | -$3.5M | +111.6% |
| Net margin | 0.9% | -9.5% | +10.4 pp | -9.8% | +10.7 pp |
Risks
Fluctuation in quarterly and annual results may harm the value of our common stock, primarily due to factors like market acceptance and renewals, which may fluctuate significantly from quarter to quarter.
General economic, industry, and market conditions may cause fluctuations in our quarterly and annual results, impacting the overall financial performance and investors' perception of the company.
SaaS KPIs
All quarters →Annual Dollar-Based Retention Rate
Summary, forecast, risks and KPIs are extracted from Five9, Inc.'s SEC filings for Q4 FY2016 (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 Aug 4, 2026.