Summary
Five9 closed fiscal 2024 with fourth-quarter revenue of $278.7 million, up 16.6% from $239.1 million in the prior-year quarter. Full-year revenue reached $1.04 billion, up 14.4% from $910.5 million. The company serves more than 3,000 customers. Its annual dollar-based retention rate was 108% for 2024, down from 110% for 2023. Management attributed the decline to continued macroeconomic headwinds on the installed base. The fourth quarter also brought a sharp improvement in profitability.
Fourth-quarter gross profit was $156.0 million, up 23.3%, and gross margin was 56.0%, up 3.0 percentage points from 52.9%. Full-year gross profit was $564.4 million, up 18.1%, with gross margin of 54.2%, up 1.7 percentage points from 52.5%. Operating income was $4.18 million in the fourth quarter, a swing to a profit from an operating loss of $18.6 million in the prior-year quarter. The full-year operating loss was $51.3 million, narrowed from $98.6 million. Net income was $11.6 million in the fourth quarter, a swing to a profit from a net loss of $12.4 million. The full-year net loss was $12.8 million, narrowed from $81.8 million. Diluted EPS was $0.13 in the fourth quarter, up $0.30 from negative $0.17. Full-year diluted EPS was negative $0.17, narrowed from negative $1.13. Non-GAAP net income was $60.3 million in the fourth quarter and $185.3 million for the full year. Adjusted EBITDA was $64.3 million in the fourth quarter, or 23.1% of revenue, and $196.0 million for the full year, or 18.8% of revenue.
Cash generation remained a bright spot. Fourth-quarter operating cash flow was $49.8 million, up 36.3% from $36.5 million. Full-year operating cash flow was $143.2 million, up 11.1% from $128.8 million. Capital expenditures were $9.3 million in the fourth quarter, down 17.7%, and $42.4 million for the full year, up 35.7%. Deferred revenue was $79.2 million, up 16.1% from the prior-year quarter. Remaining performance obligations were $1.12 billion, up 6.0%. In August 2024, Five9 announced a reduction in force plan that cut global full-time employees by approximately 6%. Management said the plan supports balanced, profitable growth.
Guidance points to slower top-line growth in the near term. For the full year 2025, Five9 expects revenue of $1.140 billion to $1.144 billion. It expects non-GAAP net income per share of $2.58 to $2.62, assuming diluted shares outstanding of approximately 77.3 million. For the first quarter of 2025, the company guides revenue of $271.5 million to $272.5 million and non-GAAP net income per share of $0.47 to $0.49, assuming diluted shares outstanding of approximately 76.8 million. Risks include continued macroeconomic challenges, the Russia-Ukraine conflict, and conflicts in the Middle East, all of which management says could harm revenue. The company also flagged that AI solutions may replace subscription revenue from licenses, that competition is increasing, and that security breaches could lead to litigation and regulatory risk. On December 4, 2024, a purported securities holder filed a putative class action against Five9 and two executives alleging violations of federal securities laws. The company cannot predict the duration or outcome and intends to vigorously defend itself.
Forecast
Reported figures
GAAP, from SEC filings| Metric | Q4 FY2024 | Q3 FY2024 | QoQ | Q4 FY2023 | YoY |
|---|---|---|---|---|---|
| Revenue | $278.7M | $264.2M | +5.5% | $239.1M | +16.6% |
| Gross profit | $156.0M | $142.2M | +9.7% | $126.6M | +23.3% |
| Gross margin | 56.0% | 53.9% | +2.1 pp | 52.9% | +3.0 pp |
| Research & development | $41.5M | $42.5M | -2.4% | $38.9M | +6.7% |
| Sales & marketing | $73.9M | $78.6M | -6.0% | $73.0M | +1.3% |
| General & administrative | $36.4M | $36.6M | -0.4% | $33.3M | +9.3% |
| Total operating expenses | $151.8M | $157.7M | -3.7% | $145.2M | +4.6% |
| Operating income (loss) | $4.2M | -$15.4M | +127.1% | -$18.6M | +122.5% |
| Operating margin | 1.5% | -5.8% | +7.3 pp | -7.8% | +9.3 pp |
| Net income (loss) | $11.6M | -$4.5M | +358.5% | -$12.4M | +193.7% |
| Net margin | 4.2% | -1.7% | +5.9 pp | -5.2% | +9.3 pp |
| Diluted EPS | $0.16 | -$0.06 | +$0.22 | -$0.17 | +$0.33 |
| Customers | 3,000 | — | — | — | — |
Risks
AI solutions will likely perform an increasing proportion of contact center interactions, slowing growth of live-agent interactions and reducing license revenue from the installed base and new customers. Five9 may not replace lost license revenue with sales of its own AI solutions, and customers may use competitors' AI offerings.
Continued macroeconomic challenges, inflation, high interest rates, and conflicts are expected to continue to adversely impact revenue. The Annual Dollar-Based Retention Rate decreased year-over-year to 108% from 110% primarily due to continued macroeconomic headwinds on the installed base.
The contact center market has a high and increasing number of competitors, including legacy vendors, cloud providers, CRM vendors, and new AI entrants. Pricing pressure may shift from agent-based to interaction-based pricing, harming gross profit and results of operations.
The 2025 convertible senior notes mature on June 1, 2025, with $434.4 million aggregate principal outstanding as of December 31, 2024, and Five9 plans to use cash to settle them. This could decrease cash, preclude other investments, or necessitate additional fundraising.
A putative securities class action was filed on December 4, 2024 against Five9 and its CEO and CFO alleging violations of Section 10(b) and 20(a) and Rule 10b-5 for alleged false or misleading statements from June 4, 2024 through August 8, 2024. The outcome and possible loss cannot be estimated.
Larger organizations require longer sales and implementation cycles, typically four to six months and potentially longer, with greater configuration and integration demands. The average sales cycle may increase as larger organizations grow as a percentage of business, making results less predictable.
Compliance with GDPR, U.S. state privacy laws, Brazil LGPD, Japan APPI, India DPDP Act, and China PIPL increases costs and may inhibit sales. Non-compliance can trigger steep fines, such as up to 20 million euros or 4% of worldwide annual turnover under GDPR.
Five9 must attract and retain highly skilled leaders and employees, and failure to retain or expand its direct sales force could impede growth. Sales representatives can take several months to become fully trained and productive.
Five9 continues to expand internationally, including the 2024 Acqueon acquisition with operations in India and employees in the Philippines, Portugal, India, and Australia. This exposes it to significant macroeconomic, regulatory, and operational risks.
Professional services offerings currently have negative margins, and any increase in sales of professional services could harm gross margins and operating results. Larger customers typically require more professional services, which have lower margins.
Historical growth may not be indicative of future growth, and annual revenue growth rate may continue to decline as revenue increases. Revenue was $1,041.9 million for the year ended December 31, 2024, up 14.4% year over year, but future growth depends on factors including AI capabilities and installed base expansion.
Generative AI technologies face an evolving legal and regulatory landscape, including new EU laws and potential U.S. laws, and intellectual property ownership and license rights are not fully addressed. Compliance costs could increase operating expenses and expose Five9 to copyright infringement claims.
SaaS KPIs
All quarters →Annual Dollar-Based Retention Rate
Adjusted EBITDA
Adjusted EBITDA Margin
Adjusted Gross Margin
Total Customers
Non-GAAP Operating Income
Enterprise AI Revenue Growth
Subscription Revenue Growth
Summary, forecast, risks and KPIs are extracted from Five9, Inc.'s SEC filings for Q4 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 1, 2026.