Summary
Five9's fiscal year 2018 closed with a significant milestone in revenue growth, reaching $257.7 million, a notable increase from $200.2 million in 2017, driven largely by an expansion in larger clients and the subsequent increase in agent seats. While the company remains unprofitable, it has significantly narrowed its net loss to $0.2 million from $9.0 million in the previous year, showcasing financial stabilization despite ongoing investments.
The company has fortified its standing as a leading provider of cloud software for contact centers, serving over 2,000 clients and facilitating over five billion call minutes annually. This has been achieved through a relentless focus on SaaS delivery, enabling seamless customer interaction management across multiple channels. Their SaaS model has proven robust, allowing flexible scalability for clients like rapid adjustments in agent seats, which can even drop to zero with minimal notice, granting unparalleled adaptability in client operations.
A key metric, the Annual Dollar-Based Retention Rate, improved to 103% from the previous year's 98%. This uptick underscores enhanced client retention and growth, primarily attributed to increased subscriptions by larger, existing clients. This is indicative of increased trust and reliance on Five9's platform within larger enterprises.
Operationally, Five9 continues to channel investments into expanding sales efforts, R&D, and infrastructure. While these have increased costs, strategic positioning for future growth in larger contact centers is essential. The firm also anticipates these expenses will ease as a percentage of revenue due to economies of scale.
Given the dynamic nature of SaaS and the fiercely competitive landscape in cloud-based contact center solutions, Five9's growth strategy also leans heavily on its ability to innovate, expand internationally, and effectively manage its growing operations. The company's focus on building a strong, capable sales force is critical as new market entrants pose challenges.
Despite the absence of highlighted risks in the recent filing, general industry risks such as competition, the need for constant innovation, and economic variability remain. However, Five9's foundational investments and focus on larger clientele suggest a strategy aligned with scaling and entry into more competitive arenas.
In summary, Five9's strategy to invest in global expansion and deepen client relationships appears poised to maintain revenue growth while navigating the evolving demands of SaaS models in its sector. The company's tactical shifts and financial discipline may bolster its positioning, though continued innovation and nimble operational adjustments remain paramount.
Forecast
No forward guidance in this quarter's filings.
Reported figures
GAAP, from SEC filings| Metric | Q4 FY2018 | Q3 FY2018 | QoQ | Q4 FY2017 | YoY |
|---|---|---|---|---|---|
| Revenue | $72.3M | $65.3M | +10.8% | $55.4M | +30.6% |
| Gross profit | $44.0M | $39.1M | +12.4% | $33.0M | +33.2% |
| Gross margin | 60.8% | 59.9% | +0.9 pp | 59.6% | +1.2 pp |
| Research & development | $8.5M | $9.6M | -11.8% | $6.7M | +25.2% |
| Sales & marketing | $18.8M | $17.8M | +5.5% | $17.4M | +8.3% |
| General & administrative | $10.8M | $10.7M | +0.2% | $8.8M | +22.8% |
| Total operating expenses | $38.0M | $38.1M | -0.4% | $32.9M | +15.6% |
| Operating income (loss) | $6.0M | $979.0K | +511.4% | $167.0K | +3484.4% |
| Operating margin | 8.3% | 1.5% | +6.8 pp | 0.3% | +8.0 pp |
| Net income (loss) | $3.7M | -$1.3M | +386.1% | -$631.0K | +691.6% |
| Net margin | 5.2% | -2.0% | +7.2 pp | -1.1% | +6.3 pp |
SaaS KPIs
All quarters →Annual Dollar-Based Retention Rate
Summary, forecast, risks and KPIs are extracted from Five9, Inc.'s SEC filings for Q4 FY2018 (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.