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Five9 Reports Fourth Quarter Revenue Growth of 20% to a Record $208.3 Million

February 22, 2023

32% Growth in LTM Enterprise Subscription Revenue

44% Growth in 2022 International Revenue

Record Operating Cash Flow of $32.7 Million

SAN RAMON, Calif.--(BUSINESS WIRE)--Feb. 22, 2023-- Five9, Inc. (NASDAQ:FIVN), a leading provider of cloud contact center software, today reported results for the fourth quarter and full year ended December 31, 2022.

Fourth Quarter 2022 Financial Results

  • Revenue for the fourth quarter of 2022 increased 20% to a record $208.3 million, compared to $173.6 million for the fourth quarter of 2021.
  • GAAP gross margin was 53.8% for the fourth quarter of 2022, compared to 54.1% for the fourth quarter of 2021.
  • Adjusted gross margin was 62.3% for the fourth quarter of 2022, compared to 62.8% for the fourth quarter of 2021.
  • GAAP net loss for the fourth quarter of 2022 was $(13.7) million, or $(0.19) per basic share, compared to GAAP net loss of $(3.6) million, or $(0.05) per basic share, for the fourth quarter of 2021.
  • Non-GAAP net income for the fourth quarter of 2022 was $39.0 million, or $0.54 per diluted share, compared to non-GAAP net income of $30.1 million, or $0.42 per diluted share, for the fourth quarter of 2021.
  • Adjusted EBITDA for the fourth quarter of 2022 was $46.2 million, or 22.2% of revenue, compared to $36.9 million, or 21.3% of revenue, for the fourth quarter of 2021.
  • GAAP operating cash flow for the fourth quarter of 2022 was $32.7 million, compared to GAAP operating cash flow of $8.6 million for the fourth quarter of 2021.

2022 Financial Results

  • Total revenue for 2022 increased 28% to a record $778.8 million, compared to $609.6 million in 2021.
  • GAAP gross margin was 52.8% for 2022, compared to 55.5% in 2021.
  • Adjusted gross margin was 61.3% for 2022, compared to 63.5% in 2021.
  • GAAP net loss for 2022 was $(94.7) million, or $(1.35) per basic share, compared to GAAP net loss of $(53.0) million, or $(0.79) per basic share, in 2021.
  • Non-GAAP net income for 2022 was $106.7 million, or $1.50 per diluted share, compared to non-GAAP net income of $82.2 million, or $1.16 per diluted share, in 2021.
  • Adjusted EBITDA for 2022 was $140.4 million, or 18.0% of revenue, compared to $110.5 million, or 18.1% of revenue, in 2021.
  • GAAP operating cash flow for 2022 was $88.9 million, compared to GAAP operating cash flow of $29.0 million, in 2021.

“We are pleased to report strong fourth quarter results with revenue growing 20% year-over-year to a record $208.3 million. This growth was driven by the continued strength of our Enterprise business where LTM subscription revenue grew 32% year-over-year. Our investments in international expansion are also paying off as our 2022 international revenue grew 44%. In the fourth quarter, we achieved another record for operating cash flow, driven by adjusted EBITDA margin reaching 22%. These financial results demonstrate our continuing long-term focus on delivering balanced growth. As we execute against a massive and underpenetrated opportunity, we continue to march up-market, expand internationally and deliver innovation. Speaking of which, we are excited to announce two new product offerings that leverage GPT-3 from OpenAI, namely AI Insights and AI Summaries. We have now expanded, what we believe to be the industry-leading AI & Automation portfolio, to include eight distinct modules with speech analytics, workflow automation, voice IVA, digital IVA, Agent Assist, Analytics and now AI Insights and AI Summaries. We believe these new offerings will play a central role in the future of the contact center and customer experience.”

- Mike Burkland, Chairman and CEO, Five9

Business Outlook

Five9 provides guidance based on current market conditions and expectations. Five9 emphasizes that the guidance is subject to various important cautionary factors referenced in the section entitled "Forward-Looking Statements" below, including risks and uncertainties associated with the ongoing macroeconomic deterioration.

  • For the full year 2023, Five9 expects to report:
    • Revenue in the range of $900.0 to $903.0 million.
    • GAAP net loss per share in the range of $(1.72) to $(1.62), assuming diluted shares outstanding of approximately 72.1 million.
    • Non-GAAP net income per share in the range of $1.67 to $1.71, assuming diluted shares outstanding of approximately 73.4 million.
  • For the first quarter of 2023, Five9 expects to report:
    • Revenue in the range of $207.0 to $208.0 million.
    • GAAP net loss per share in the range of $(0.63) to $(0.58), assuming diluted shares outstanding of approximately 71.2 million.
    • Non-GAAP net income per share in the range of $0.23 to $0.25, assuming diluted shares outstanding of approximately 72.2 million.

With respect to Five9’s guidance as provided above, please refer to the “Reconciliation of GAAP Net Loss to Non-GAAP net income – Guidance” table for more details, including important assumptions upon which such guidance is based.

Conference Call Details

Five9 will discuss its fourth quarter 2022 results today, February 22, 2023, via Zoom webinar at 4:30 p.m. Eastern Time. To access the webinar, please register by clicking here. A copy of this press release will be furnished to the Securities and Exchange Commission on a Current Report on Form 8-K and will be posted to our website, prior to the conference call.

A live webcast and a replay will be available on the Investor Relations section of the Company’s web-site at http://investors.five9.com/.

Non-GAAP Financial Measures

In addition to disclosing financial measures prepared in accordance with U.S. generally accepted accounting principles (GAAP), this press release and the accompanying tables contain certain non-GAAP financial measures. We calculate adjusted gross profit and adjusted gross margin by adding back the following items to gross profit: depreciation, intangibles amortization, stock-based compensation, exit costs related to the closure and relocation of our Russian operations, acquisition-related transaction and one-time integration costs, and refund for prior year overpayment of Universal Service Fund, or USF, fees. We calculate adjusted EBITDA by adding back or removing the following items to or from GAAP net loss: depreciation and amortization, stock-based compensation, interest expense, interest (income) and other, exit costs related to closure and relocation of our Russian operations, acquisition-related transaction costs and one-time integration costs, contingent consideration expense, refund for prior year overpayment of USF fees and provision for (benefit from) income taxes. We calculate non-GAAP operating income by adding back or removing the following items to or from GAAP loss from operations: stock-based compensation, intangibles amortization, exit costs related to the closure and relocation of our Russian operations, acquisition-related transaction and one-time integration costs, contingent consideration expense and refund for prior year overpayment of USF fees. We calculate non-GAAP net income by adding back or removing the following items to or from GAAP net loss: stock-based compensation, intangibles amortization, amortization of discount and issuance costs on convertible senior notes, exit costs related to the closure and relocation of our Russian operations, acquisition-related transaction costs and one-time integration costs, contingent consideration expense, refund for prior year overpayment of USF fees and tax provision associated with acquired companies. For the periods presented, these adjustments from GAAP net loss to non-GAAP net income do not include any presentation of the net tax effect of such adjustments given our significant net operating loss carryforwards. Non-GAAP financial measures do not have any standardized meaning and are therefore unlikely to be comparable to similarly titled measures presented by other companies. The Company considers these non-GAAP financial measures to be important because they provide useful measures of the operating performance of the Company, exclusive of factors that do not directly affect what we consider to be our core operating performance, as well as unusual events. The Company’s management uses these measures to (i) illustrate underlying trends in the Company’s business that could otherwise be masked by the effect of income or expenses that are excluded from non-GAAP measures, and (ii) establish budgets and operational goals for managing the Company’s business and evaluating its performance. In addition, investors often use similar measures to evaluate the operating performance of a company. Non-GAAP financial measures are presented only as supplemental information for purposes of understanding the Company’s operating results. The non-GAAP financial measures should not be considered a substitute for financial information presented in accordance with GAAP. Please see the reconciliation of non-GAAP financial measures set forth in this release.

Forward-Looking Statements

This news release contains certain forward-looking statements, including the statements in the quotes from our Chairman and Chief Executive Officer, including statements regarding Five9’s market opportunity and ability to capitalize on that opportunity, Five9's business strategies and market position, and the first quarter and full year 2023 financial projections set forth under the caption “Business Outlook,” that are based on our current expectations and involve numerous risks and uncertainties that may cause these forward-looking statements to be inaccurate. Risks that may cause these forward-looking statements to be inaccurate include, among others: (i) the impact of adverse economic conditions, including the impact of macroeconomic deterioration, including increased inflation, increased interest rates, supply chain disruptions, decreased economic output and fluctuations in currency rates, the impact of the Russia-Ukraine conflict, and other factors, that may continue to harm our business; (ii) if we are unable to attract new clients or sell additional services and functionality to our existing clients, our revenue and revenue growth will be harmed; (iii) if our existing clients terminate their subscriptions, reduce their subscriptions and related usage, or fail to grow subscriptions at the rate they have in the past or that we might expect, our revenues and gross margins will be harmed and we will be required to spend more money to grow our client base; (iv) because a significant percentage of our revenue is derived from existing clients, downturns or upturns in new sales will not be immediately reflected in our operating results and may be difficult to discern; (v) we have established, and are continuing to increase, our network of technology solution brokers and resellers to sell our solution; our failure to effectively develop, manage, and maintain this network could materially harm our revenues; (vi) our quarterly and annual results may fluctuate significantly, including as a result of the timing and success of new product and feature introductions by us, and may not fully reflect the underlying performance of our business and may result in decreases in the price of our common stock; (vii) our recent rapid growth may not be indicative of our future growth, and even if we continue to grow rapidly, we may fail to manage our growth effectively; (viii) our recent Chief Executive Officer transition could disrupt our operations, result in additional executive and personnel transitions and make it more difficult for us to hire and retain employees; (ix) failure to adequately retain and expand our sales force will impede our growth; (x) if we fail to manage our technical operations infrastructure, our existing clients may experience service outages, our new clients may experience delays in the deployment of our solution and we could be subject to, among other things, claims for credits or damages; (xi) our growth depends in part on the success of our strategic relationships with third parties and our failure to successfully maintain, grow and manage these relationships could harm our business; (xii) the markets in which we participate involve a high number of competitors that is continuing to increase, and if we do not compete effectively, our operating results could be harmed; (xiii) we continue to expand our international operations, which exposes us to significant macroeconomic and other risks; (xiv) security breaches and improper access to or disclosure of our data or our clients’ data, or other cyber attacks on our systems, could result in litigation and regulatory risk, harm our reputation and our business; (xv) we may acquire other companies or technologies, or be the target of strategic transactions, or be impacted by transactions by other companies, which could divert our management’s attention, result in additional dilution to our stockholders or use a significant amount of our cash resources and otherwise disrupt our operations and harm our operating results; (xvi) we sell our solution to larger organizations that require longer sales and implementation cycles and often demand more configuration and integration services or customized features and functions that we may not offer, any of which could delay or prevent these sales and harm our growth rates, business and operating results; (xvii) we rely on third-party telecommunications and internet service providers to provide our clients and their customers with telecommunication services and connectivity to our cloud contact center software and any failure by these service providers to provide reliable services could cause us to lose clients and subject us to claims for credits or damages, among other things; (xviii) we have a history of losses and we may be unable to achieve or sustain profitability; (xix) the contact center software solutions market is subject to rapid technological change, and we must develop and sell incremental and new cloud contact center solutions, which we refer to as our solution, in order to maintain and grow our business; (xx) our stock price has been volatile, may continue to be volatile and may decline, including due to factors beyond our control; (xxi) we may not be able to secure additional financing on favorable terms, or at all, to meet our future capital needs; (xxii) failure to comply with laws and regulations could harm our business and our reputation; (xxiii) we may not have sufficient cash to service our convertible senior notes and repay such notes, if required, and other risks attendant to our convertible senior notes and increased debt levels; and (xxiv) the other risks detailed from time-to-time under the caption “Risk Factors” and elsewhere in our Securities and Exchange Commission filings and reports, including, but not limited to, our most recent annual report on Form 10-K and quarterly reports on Form 10-Q. Such forward-looking statements speak only as of the date hereof and readers should not unduly rely on such statements. We undertake no obligation to update the information contained in this press release, including in any forward-looking statements.

About Five9

Five9 is a leading provider of cloud contact center software for the intelligent contact center space, bringing the power of cloud innovation to customers. Five9 provides end-to-end solutions with omnichannel routing, analytics, WFO and AI to increase agent productivity and deliver tangible business results. The Five9 Genius platform is reliable, secure, compliant and scalable; designed to create exceptional personalized customer experiences. For more information, visit www.five9.com.

 

FIVE9, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands)

(Unaudited)

 

 

 

December 31, 2022

 

December 31, 2021

 

 

 

 

 

ASSETS

 

 

 

 

Current assets:

 

 

 

 

Cash and cash equivalents

 

$

180,520

 

 

$

90,878

 

Marketable investments

 

 

433,743

 

 

 

378,980

 

Accounts receivable, net

 

 

87,494

 

 

 

83,731

 

Prepaid expenses and other current assets

 

 

29,711

 

 

 

30,342

 

Deferred contract acquisition costs, net

 

 

47,242

 

 

 

33,295

 

Total current assets

 

 

778,710

 

 

 

617,226

 

Property and equipment, net

 

 

101,221

 

 

 

77,785

 

Operating lease right-of-use assets

 

 

44,120

 

 

 

48,703

 

Intangible assets, net

 

 

28,192

 

 

 

39,897

 

Goodwill

 

 

165,420

 

 

 

165,420

 

Marketable investments

 

 

885

 

 

 

147,377

 

Other assets

 

 

11,057

 

 

 

11,871

 

Deferred contract acquisition costs, net — less current portion

 

 

114,880

 

 

 

84,663

 

Total assets

 

$

1,244,485

 

 

$

1,192,942

 

LIABILITIES AND STOCKHOLDERS’ EQUITY

 

 

 

 

Current liabilities:

 

 

 

 

Accounts payable

 

$

23,629

 

 

$

20,510

 

Accrued and other current liabilities

 

 

53,092

 

 

 

78,577

 

Operating lease liabilities

 

 

10,626

 

 

 

9,826

 

Accrued federal fees

 

 

2,471

 

 

 

2,282

 

Sales tax liabilities

 

 

2,973

 

 

 

2,660

 

Deferred revenue

 

 

57,816

 

 

 

43,720

 

Convertible senior notes

 

 

169

 

 

 

 

Total current liabilities

 

 

150,776

 

 

 

157,575

 

Convertible senior notes — less current portion

 

 

738,376

 

 

 

768,599

 

Sales tax liabilities — less current portion

 

 

899

 

 

 

877

 

Operating lease liabilities — less current portion

 

 

41,389

 

 

 

47,088

 

Other long-term liabilities

 

 

3,080

 

 

 

7,671

 

Total liabilities

 

 

934,520

 

 

 

981,810

 

Stockholders’ equity:

 

 

 

 

Common stock

 

 

71

 

 

 

68

 

Additional paid-in capital

 

 

635,668

 

 

 

439,787

 

Accumulated other comprehensive loss

 

 

(2,688

)

 

 

(287

)

Accumulated deficit

 

 

(323,086

)

 

 

(228,436

)

Total stockholders’ equity

 

 

309,965

 

 

 

211,132

 

Total liabilities and stockholders’ equity

 

$

1,244,485

 

 

$

1,192,942

 

 

 

 

 

 

FIVE9, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except per share data)

(Unaudited)

 

 

 

Three Months Ended

 

Twelve Months Ended

 

 

December 31,
2022

 

December 31,
2021

 

December 31,
2022

 

December 31,
2021

 

 

 

 

 

 

 

 

 

Revenue

 

$

208,345

 

 

$

173,599

 

 

$

778,846

 

 

$

609,591

 

Cost of revenue

 

 

96,294

 

 

 

79,764

 

 

 

367,501

 

 

 

271,099

 

Gross profit

 

 

112,051

 

 

 

93,835

 

 

 

411,345

 

 

 

338,492

 

Operating expenses:

 

 

 

 

 

 

 

 

Research and development

 

 

36,865

 

 

 

30,448

 

 

 

141,794

 

 

 

106,897

 

Sales and marketing

 

 

65,928

 

 

 

53,394

 

 

 

261,990

 

 

 

193,929

 

General and administrative

 

 

22,509

 

 

 

21,972

 

 

 

95,143

 

 

 

93,916

 

Total operating expenses

 

 

125,302

 

 

 

105,814

 

 

 

498,927

 

 

 

394,742

 

Loss from operations

 

 

(13,251

)

 

 

(11,979

)

 

 

(87,582

)

 

 

(56,250

)

Other income (expense), net:

 

 

 

 

 

 

 

 

Interest expense

 

 

(1,887

)

 

 

(2,024

)

 

 

(7,493

)

 

 

(8,027

)

Interest income and other income (expense)

 

 

2,706

 

 

 

(43

)

 

 

4,813

 

 

 

(8

)

Total other income (expense), net

 

 

819

 

 

 

(2,067

)

 

 

(2,680

)

 

 

(8,035

)

Loss before income taxes

 

 

(12,432

)

 

 

(14,046

)

 

 

(90,262

)

 

 

(64,285

)

Provision for (benefit from) income taxes

 

 

1,221

 

 

 

(10,445

)

 

 

4,388

 

 

 

(11,285

)

Net loss

 

$

(13,653

)

 

$

(3,601

)

 

$

(94,650

)

 

$

(53,000

)

Net loss per share:

 

 

 

 

 

 

 

 

Basic and diluted

 

$

(0.19

)

 

$

(0.05

)

 

$

(1.35

)

 

$

(0.79

)

Shares used in computing net loss per share:

 

 

 

 

 

 

 

 

Basic and diluted

 

 

70,704

 

 

 

68,207

 

 

 

69,920

 

 

 

67,512

 

 

 

 

 

 

 

 

 

 

FIVE9, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

(Unaudited)

 

 

 

Twelve Months Ended

 

 

December 31, 2022

 

December 31, 2021

Cash flows from operating activities:

 

 

 

 

Net loss

 

$

(94,650

)

 

$

(53,000

)

Adjustments to reconcile net loss to net cash provided by operating activities:

 

 

 

 

Depreciation and amortization

 

 

44,671

 

 

 

38,732

 

Amortization of operating lease right-of-use assets

 

 

10,377

 

 

 

8,698

 

Amortization of deferred contract acquisition costs

 

 

41,034

 

 

 

26,050

 

Amortization of premium on marketable investments

 

 

(90

)

 

 

6,385

 

Provision for doubtful accounts

 

 

1,105

 

 

 

808

 

Stock-based compensation

 

 

172,507

 

 

 

108,805

 

Amortization of discount and issuance costs on convertible senior notes

 

 

3,743

 

 

 

3,957

 

Deferred taxes

 

 

3,088

 

 

 

(6,907

)

Change in fair of value of contingent consideration

 

 

260

 

 

 

5,640

 

Payment of contingent consideration liability in excess of acquisition-date fair value

 

 

(5,900

)

 

 

 

Other

 

 

188

 

 

 

396

 

Changes in operating assets and liabilities:

 

 

 

 

Accounts receivable

 

 

(4,899

)

 

 

(35,986

)

Prepaid expenses and other current assets

 

 

661

 

 

 

(14,193

)

Deferred contract acquisition costs

 

 

(85,197

)

 

 

(71,380

)

Other assets

 

 

(319

)

 

 

(1,216

)

Accounts payable

 

 

845

 

 

 

4,305

 

Accrued and other current liabilities

 

 

(8,379

)

 

 

20,562

 

Accrued federal fees and sales tax liability

 

 

524

 

 

 

(497

)

Deferred revenue

 

 

13,176

 

 

 

10,462

 

Other liabilities

 

 

(3,880

)

 

 

(22,623

)

Net cash provided by operating activities

 

 

88,865

 

 

 

28,998

 

Cash flows from investing activities:

 

 

 

 

Purchases of marketable investments

 

 

(435,768

)

 

 

(680,490

)

Proceeds from sales of marketable investments

 

 

600

 

 

 

44,288

 

Proceeds from maturities of marketable investments

 

 

524,568

 

 

 

527,940

 

Purchases of property and equipment

 

 

(52,272

)

 

 

(42,216

)

Capitalization of software development costs

 

 

(3,899

)

 

 

 

Payments of initial direct costs

 

 

(266

)

 

 

 

Cash paid for an equity investment in a privately-held company

 

 

(2,000

)

 

 

 

Net cash provided by (used in) investing activities

 

 

30,963

 

 

 

(150,478

)

Cash flows from financing activities:

 

 

 

 

Repurchase of a portion of 2023 convertible senior notes, net of costs

 

 

(34,067

)

 

 

(24,688

)

Proceeds from exercise of common stock options

 

 

8,522

 

 

 

7,402

 

Proceeds from sale of common stock under ESPP

 

 

13,413

 

 

 

15,397

 

Payment of contingent consideration liability up to acquisition-date fair value

 

 

(18,100

)

 

 

 

Payment of holdbacks related to acquisitions

 

 

 

 

 

(5,000

)

Payments of finance leases

 

 

 

 

 

(612

)

Net cash used in financing activities

 

 

(30,232

)

 

 

(7,501

)

Net increase (decrease) in cash and cash equivalents

 

 

89,596

 

 

 

(128,981

)

Cash, cash equivalents and restricted cash:

 

 

 

 

Beginning of period

 

 

91,391

 

 

 

220,372

 

End of period

 

$

180,987

 

 

$

91,391

 

 

 

 

 

 

FIVE9, INC.

RECONCILIATION OF GAAP GROSS PROFIT TO ADJUSTED GROSS PROFIT

(In thousands, except percentages)

(Unaudited)

 

 

 

Three Months Ended

 

Twelve Months Ended

 

 

December 31, 2022

 

December 31, 2021

 

December 31, 2022

 

December 31, 2021

 

 

 

 

 

 

 

 

 

GAAP gross profit

 

$

112,051

 

 

$

93,835

 

 

$

411,345

 

 

$

338,492

 

GAAP gross margin

 

 

53.8

%

 

 

54.1

%

 

 

52.8

%

 

 

55.5

%

Non-GAAP adjustments:

 

 

 

 

 

 

 

 

Depreciation

 

 

5,913

 

 

 

5,354

 

 

 

23,250

 

 

 

19,083

 

Intangibles amortization

 

 

2,890

 

 

 

2,947

 

 

 

11,705

 

 

 

11,787

 

Stock-based compensation

 

 

8,638

 

 

 

6,854

 

 

 

33,297

 

 

 

17,734

 

Exit costs related to closure and relocation of Russian operations

 

 

219

 

 

 

 

 

 

698

 

 

 

 

Acquisition-related and one-time integration costs

 

 

86

 

 

 

43

 

 

 

401

 

 

 

112

 

Refund for prior year overpayment of USF fees

 

 

 

 

 

 

 

 

(3,511

)

 

 

 

Adjusted gross profit

 

$

129,797

 

 

$

109,033

 

 

$

477,185

 

 

$

387,208

 

Adjusted gross margin

 

 

62.3

%

 

 

62.8

%

 

 

61.3

%

 

 

63.5

%

 

FIVE9, INC.

RECONCILIATION OF GAAP NET LOSS TO ADJUSTED EBITDA

(In thousands, except percentages)

(Unaudited)

 

 

 

Three Months Ended

 

Twelve Months Ended

 

 

December 31, 2022

 

December 31, 2021

 

December 31, 2022

 

December 31, 2021

 

 

 

 

 

 

 

 

 

GAAP net loss

 

$

(13,653

)

 

$

(3,601

)

 

$

(94,650

)

 

$

(53,000

)

Non-GAAP adjustments:

 

 

 

 

 

 

 

 

Depreciation and amortization

 

 

11,021

 

 

 

10,538

 

 

 

44,671

 

 

 

38,732

 

Stock-based compensation

 

 

43,824

 

 

 

35,601

 

 

 

172,507

 

 

 

108,805

 

Interest expense

 

 

1,887

 

 

 

2,024

 

 

 

7,493

 

 

 

8,027

 

Interest (income) and other

 

 

(2,706

)

 

 

43

 

 

 

(4,813

)

 

 

8

 

Exit costs related to closure and relocation of Russian operations (1)

 

 

2,975

 

 

 

 

 

 

7,190

 

 

 

 

Acquisition related transaction costs and one-time integration costs

 

 

1,605

 

 

 

2,351

 

 

 

6,901

 

 

 

13,576

 

Contingent consideration expense

 

 

 

 

 

380

 

 

 

260

 

 

 

5,640

 

Refund for prior year overpayment of USF fees

 

 

 

 

 

 

 

 

(3,511

)

 

 

 

Provision for (benefit from) income taxes

 

 

1,221

 

 

 

(10,445

)

 

 

4,388

 

 

 

(11,285

)

Adjusted EBITDA

 

$

46,174

 

 

$

36,891

 

 

$

140,436

 

 

$

110,503

 

Adjusted EBITDA as % of revenue

 

 

22.2

%

 

 

21.3

%

 

 

18.0

%

 

 

18.1

%

(1) Exit costs related to the closure of our Russian operations was $-0- million and $3.4 million, respectively, during the three and twelve months ended December 31, 2022. One-time and relocation-related costs was $3.3 million and $4.5 million, respectively, during the three and twelve months ended December 31, 2022. The $3.0 million and $7.2 million adjustments presented above were net of $0.0 million and $0.8 million included in “Depreciation and amortization” and $(0.3) million and $(0.1) million included in “Interest (income) and other.”

FIVE9, INC.

RECONCILIATION OF GAAP OPERATING LOSS TO NON-GAAP OPERATING INCOME

(In thousands)

(Unaudited)

 

 

 

Three Months Ended

 

Twelve Months Ended

 

 

December 31, 2022

 

December 31, 2021

 

December 31, 2022

 

December 31, 2021

 

 

 

 

 

 

 

 

 

Loss from operations

 

$

(13,251

)

 

$

(11,979

)

 

$

(87,582

)

 

$

(56,250

)

Non-GAAP adjustments:

 

 

 

 

 

 

 

 

Stock-based compensation

 

 

43,824

 

 

 

35,601

 

 

 

172,507

 

 

 

108,805

 

Intangibles amortization

 

 

2,890

 

 

 

2,947

 

 

 

11,705

 

 

 

11,787

 

Exit costs related to closure and relocation of Russian operations

 

 

2,975

 

 

 

 

 

 

7,964

 

 

 

 

Acquisition-related transaction and one-time integration costs

 

 

1,605

 

 

 

2,351

 

 

 

6,901

 

 

 

13,576

 

Contingent consideration expense

 

 

 

 

 

380

 

 

 

260

 

 

 

5,640

 

Refund for prior year overpayment of USF fees

 

 

 

 

 

 

 

 

(3,511

)

 

 

 

Non-GAAP operating income

 

$

38,043

 

 

$

29,300

 

 

$

108,244

 

 

$

83,558

 

 

FIVE9, INC.

RECONCILIATION OF GAAP NET LOSS TO NON-GAAP NET INCOME

(In thousands, except per share data)

(Unaudited)

 

 

 

Three Months Ended

 

Twelve Months Ended

 

 

December 31, 2022

 

December 31, 2021

 

December 31, 2022

 

December 31, 2021

 

 

 

 

 

 

 

 

 

GAAP net loss

 

$

(13,653

)

 

$

(3,601

)

 

$

(94,650

)

 

$

(53,000

)

Non-GAAP adjustments:

 

 

 

 

 

 

 

 

Stock-based compensation

 

 

43,824

 

 

 

35,601

 

 

 

172,507

 

 

 

108,805

 

Intangibles amortization

 

 

2,890

 

 

 

2,947

 

 

 

11,705

 

 

 

11,787

 

Amortization of discount and issuance costs on convertible senior notes

 

 

947

 

 

 

997

 

 

 

3,743

 

 

 

3,957

 

Exit costs related to closure and relocation of Russian operations

 

 

3,344

 

 

 

 

 

 

7,932

 

 

 

 

Acquisition-related transaction and one-time integration costs

 

 

1,605

 

 

 

2,351

 

 

 

6,901

 

 

 

13,576

 

Contingent consideration expense

 

 

 

 

 

380

 

 

 

260

 

 

 

5,640

 

Refund for prior year overpayment of USF fees

 

 

 

 

 

 

 

 

(3,511

)

 

 

 

Tax provision associated with acquired companies

 

 

 

 

 

(8,573

)

 

 

1,830

 

 

 

(8,573

)

Non-GAAP net income

 

$

38,957

 

 

$

30,102

 

 

$

106,717

 

 

$

82,192

 

GAAP net loss per share:

 

 

 

 

 

 

 

 

Basic and diluted

 

$

(0.19

)

 

$

(0.05

)

 

$

(1.35

)

 

$

(0.79

)

Non-GAAP net income per share:

 

 

 

 

 

 

 

 

Basic

 

$

0.55

 

 

$

0.44

 

 

$

1.53

 

 

$

1.22

 

Diluted

 

$

0.54

 

 

$

0.42

 

 

$

1.50

 

 

$

1.16

 

Shares used in computing GAAP net loss per share:

 

 

 

 

 

 

 

 

Basic and diluted

 

 

70,704

 

 

 

68,207

 

 

 

69,920

 

 

 

67,512

 

Shares used in computing non-GAAP net income per share:

 

 

 

 

 

 

 

 

Basic

 

 

70,704

 

 

 

68,207

 

 

 

69,920

 

 

 

67,512

 

Diluted

 

 

71,537

 

 

 

70,878

 

 

 

71,229

 

 

 

70,735

 

 

 

 

 

 

 

 

 

 

FIVE9, INC.

SUMMARY OF STOCK-BASED COMPENSATION, DEPRECIATION AND INTANGIBLES AMORTIZATION

(In thousands)

(Unaudited)

 

 

 

Three Months Ended

 

 

December 31, 2022

 

December 31, 2021

 

 

Stock-Based
Compensation

 

Depreciation

 

Intangibles
Amortization

 

Stock-Based
Compensation

 

Depreciation

 

Intangibles
Amortization

 

 

 

 

 

 

 

 

 

 

 

 

 

Cost of revenue

 

$

8,638

 

$

5,913

 

$

2,890

 

$

6,854

 

$

5,354

 

$

2,947

Research and development

 

 

11,799

 

 

768

 

 

 

 

9,163

 

 

948

 

 

Sales and marketing

 

 

15,152

 

 

1

 

 

 

 

11,987

 

 

1

 

 

General and administrative

 

 

8,235

 

 

1,449

 

 

 

 

7,597

 

 

1,288

 

 

Total

 

$

43,824

 

$

8,131

 

$

2,890

 

$

35,601

 

$

7,591

 

$

2,947

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Twelve Months Ended

 

 

December 31, 2022

 

December 31, 2021

 

 

Stock-Based
Compensation

 

Depreciation

 

Intangibles
Amortization

 

Stock-Based
Compensation

 

Depreciation

 

Intangibles
Amortization

 

 

 

 

 

 

 

 

 

 

 

 

 

Cost of revenue

 

$

33,297

 

$

23,250

 

$

11,705

 

$

17,734

 

$

19,083

 

$

11,787

Research and development

 

 

44,367

 

 

3,164

 

 

 

 

29,179

 

 

3,277

 

 

Sales and marketing

 

 

59,300

 

 

4

 

 

 

 

35,269

 

 

4

 

 

General and administrative

 

 

35,543

 

 

6,548

 

 

 

 

26,623

 

 

4,581

 

 

Total

 

$

172,507

 

$

32,966

 

$

11,705

 

$

108,805

 

$

26,945

 

$

11,787

 

 

 

 

 

 

 

 

 

 

 

 

 

FIVE9, INC.

RECONCILIATION OF GAAP NET LOSS TO NON-GAAP NET INCOME – GUIDANCE(1)

(In thousands, except per share data)

(Unaudited)

 

 

 

Three Months Ending

 

Year Ending

 

 

March 31, 2023

 

December 31, 2023

 

 

Low

 

High

 

Low

 

High

 

 

 

 

 

 

 

 

 

GAAP net loss

 

$

(44,909

)

 

$

(40,965

)

 

$

(123,994

)

 

$

(116,558

)

Non-GAAP adjustments:

 

 

 

 

 

 

 

 

Stock-based compensation(2)

 

 

54,742

 

 

 

52,742

 

 

 

225,427

 

 

 

221,427

 

Intangibles amortization

 

 

2,884

 

 

 

2,884

 

 

 

11,537

 

 

 

11,537

 

Amortization of discount and issuance costs on convertible senior notes

 

 

908

 

 

 

908

 

 

 

3,749

 

 

 

3,749

 

Exit costs related to closure and relocation of Russian operations

 

 

1,045

 

 

 

1,045

 

 

 

3,975

 

 

 

3,975

 

Acquisition-related transaction and one-time integration costs(3)

 

 

1,936

 

 

 

1,436

 

 

 

1,936

 

 

 

1,436

 

Income tax expense effects(4)

 

 

 

 

 

 

 

 

 

 

 

 

Non-GAAP net income

 

$

16,606

 

 

$

18,050

 

 

$

122,630

 

 

$

125,566

 

GAAP net loss per share, basic and diluted

 

$

(0.63

)

 

$

(0.58

)

 

$

(1.72

)

 

$

(1.62

)

Non-GAAP net income per share:

 

 

 

 

 

 

 

 

Basic

 

$

0.23

 

 

$

0.25

 

 

$

1.70

 

 

$

1.74

 

Diluted

 

$

0.23

 

 

$

0.25

 

 

$

1.67

 

 

$

1.71

 

Shares used in computing GAAP net loss per share and non-GAAP net income per share:

 

 

 

 

 

 

 

 

Basic

 

 

71,200

 

 

 

71,200

 

 

 

72,100

 

 

 

72,100

 

Diluted

 

 

72,200

 

 

 

72,200

 

 

 

73,400

 

 

 

73,400

 

 

 

 

 

 

 

 

 

 

(1)

Represents guidance discussed on February 22, 2023. Reader shall not construe presentation of this information after February 22, 2023 as an update or reaffirmation of such guidance.

(2)

Stock-based compensation expenses are based on a range of probable significance, assuming market price for our common stock that is approximately consistent with current levels.

(3)

Acquisition-related one-time integration costs are based on a range of probable significance for completed acquisitions, and no new acquisitions are assumed.

(4)

Non-GAAP adjustments do not have an impact on our income tax provision due to past non-GAAP losses.

 

Investor Relations Contacts:

Five9, Inc.
Barry Zwarenstein
Chief Financial Officer
925-201-2000 ext. 5959
IR@five9.com

The Blueshirt Group for Five9, Inc.
Lisa Laukkanen
415-217-4967
Lisa@blueshirtgroup.com

Source: Five9, Inc.