Summary
Five9 closed fiscal 2025 with fourth-quarter revenue of $300.28 million, up 7.8% from the prior-year quarter. Full-year revenue reached $1.15 billion, up 10.3% from the prior year. Gross profit was $166.44 million in the quarter, up 6.7%, while full-year gross profit rose 12.1% to $632.85 million. Gross margin slipped to 55.4% in the quarter, down 0.6 percentage points from the prior-year quarter, but full-year gross margin improved to 55.1%, up 0.9 percentage points. Adjusted gross margin, a non-GAAP measure, was 63.1% in the quarter, compared with 63.5% a year earlier. The company said its Intelligent CX Platform and Genius AI suite continue to target enterprise contact centers, and it ended the year with more than 3,000 customers.
Profitability improved sharply. Operating income was $19.80 million in the fourth quarter, up 373.6% from the prior-year quarter, and operating margin was 6.6%, up 5.1 percentage points. For the full year, operating income was $28.85 million, up 156.2% and swung to a profit, with operating margin of 2.5%, up 7.4 percentage points. Net income was $19.71 million in the quarter, up 70.3%, and diluted earnings per share was $0.23, up 76.9%. Full-year net income was $39.42 million, up 408.1% and swung to a profit, while diluted earnings per share was $0.45, up 364.7% and swung to a profit. Non-GAAP net income was $62.4 million in the quarter, or $0.80 per diluted share, and adjusted EBITDA was $77.3 million, or 25.7% of revenue. Full-year adjusted EBITDA was $269.7 million, or 23.5% of revenue. The company said it shifted to a net income position for the full year primarily due to disciplined expense management, including stock-based compensation costs.
Cash generation was a highlight. Operating cash flow was $83.57 million in the fourth quarter, up 67.8% from the prior-year quarter, and full-year operating cash flow was $226.21 million, up 58.0%. Capital expenditures were $6.24 million in the quarter, down 32.8%, and $24.96 million for the full year, down 41.1%. Deferred revenue, current portion, was $77.52 million at December 31, 2025, down 2.1% from the prior-year quarter. Remaining performance obligations were $1.19 billion, up 6.4% from the prior-year quarter. The MD&A reported an annual dollar-based retention rate of 105%, down from 108% in the prior year, citing macroeconomic headwinds and a large new customer that ramped significantly in 2024. The company also noted a $50 million accelerated share repurchase in November 2025 and $100.0 million remaining under its 2025 repurchase program as of December 31, 2025.
Guidance points to continued growth. For the full year 2026, Five9 expects revenue of $1.247 to $1.261 billion and non-GAAP net income per share of $3.15 to $3.21. For the first quarter of 2026, the company expects revenue of $296.5 to $302.5 million and non-GAAP net income per share of $0.66 to $0.70. Management flagged several risks. The MD&A says macroeconomic challenges, global tariff increases, and current and potential global conflicts may continue to harm the business. It also warns that if customers terminate or reduce subscriptions, revenue and gross margins will be harmed. The company faces competition, cybersecurity risks, and legal proceedings, including a securities class action and a related derivative action. Five9 said it cannot predict the duration or outcome of the securities lawsuit and intends to defend it vigorously. The company also said it expects net income to continue to be positive in 2026.
Forecast
Reported figures
GAAP, from SEC filings| Metric | Q4 FY2025 | Q3 FY2025 | QoQ | Q4 FY2024 | YoY |
|---|---|---|---|---|---|
| Revenue | $300.3M | $285.8M | +5.1% | $278.7M | +7.8% |
| Gross profit | $166.4M | $157.3M | +5.8% | $156.0M | +6.7% |
| Gross margin | 55.4% | 55.0% | +0.4 pp | 56.0% | -0.5 pp |
| Research & development | $36.1M | $35.2M | +2.5% | $41.5M | -13.0% |
| Sales & marketing | $76.6M | $71.7M | +6.9% | $73.9M | +3.7% |
| General & administrative | $33.9M | $34.4M | -1.3% | $36.4M | -7.0% |
| Total operating expenses | $146.6M | $141.2M | +3.8% | $151.8M | -3.4% |
| Operating income (loss) | $19.8M | $16.0M | +23.4% | $4.2M | +373.6% |
| Operating margin | 6.6% | 5.6% | +1.0 pp | 1.5% | +5.1 pp |
| Net income (loss) | $19.7M | $18.0M | +9.7% | $11.6M | +70.3% |
| Net margin | 6.6% | 6.3% | +0.3 pp | 4.2% | +2.4 pp |
| Diluted EPS | $0.22 | $0.21 | +$0.01 | $0.16 | +$0.06 |
| Customers | 3,000 | 3,000 | ±0.0% | 3,000 | ±0.0% |
Risks
The filing states AI solutions will likely perform an increasing proportion of contact center interactions, slowing growth of interactions handled by live agents, which could decrease license revenue from the installed base and new customers if not offset by revenue from additional AI solutions. MD&A emphasizes the company is evolving into an AI-native CX platform with its Genius AI suite.
MD&A states it expects macroeconomic challenges to continue to have an adverse impact on revenue in future periods, and the installed base business continues to experience macroeconomic challenges. The Annual Dollar-Based Retention Rate decreased to 105% from 108%, reflecting continued macroeconomic headwinds.
A significant percentage of revenue is derived from existing customers, and customers can reduce licenses or consumption with 30 days notice. The Annual Dollar-Based Retention Rate decreased to 105% from 108%, reflecting macro headwinds and year-over-year challenges from a single large new customer ramping in 2024 and stronger seasonal increases in the second half of 2024.
The contact center market is highly competitive and continuing to increase, with legacy vendors, cloud providers, AI entrants, and CRM vendors including Microsoft, Amazon, and Twilio. Pricing pressure may shift from agent-based pricing to interaction-based pricing, which could harm gross profit and results of operations.
Larger organizations require longer sales and implementation cycles, more configuration and integration services, and less predictability in closing sales. The typical sales cycle for larger organizations is four to six months but can be significantly longer, and the average sales cycle may increase as larger organizations grow as a percentage of the business.
The company must attract and retain highly skilled leaders and employees, and failure to retain or expand the direct sales force will impede growth. Competition for specialized AI personnel is intense, and AI development requires scarce specialized talent with higher compensation costs.
Evolving AI and privacy laws, including the EU Artificial Intelligence Act, NIS 2 Directive, Data Act, and U.S. state privacy laws, may increase compliance costs and could require removing certain AI product features if new regulation more heavily scrutinizes or restricts current AI applications.
As of December 31, 2025, $747.5 million aggregate principal amount of 2029 convertible senior notes was outstanding, maturing March 15, 2029. The company may not have sufficient cash to settle conversions in cash or repurchase the notes upon a fundamental change, which could adversely affect liquidity and results of operations.
Prior to 2025, the company incurred losses in each annual period since inception in 2001, and as of December 31, 2025, it had an accumulated deficit of $378.2 million. Although net income was $39.4 million for FY2025, the filing states there is no assurance it will sustain current profitability.
SaaS KPIs
All quarters →Adjusted EBITDA Margin
Total Customers
Enterprise AI Revenue Growth
Subscription Revenue Growth
Summary, forecast, risks and KPIs are extracted from Five9, Inc.'s SEC filings for Q4 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.