Five9(FIVN) - 2024 Q4 - Annual Report

Financial Performance - The company recorded $1,041.9 million in revenue for the year ended December 31, 2024, primarily from subscription fees based on the number of licenses and usage of AI solutions [384]. - Revenue for the year ended December 31, 2024, was$1,041,938 thousand, representing a 14.4% increase from $910,488 thousand in 2023 [396]. - Gross profit for 2024 was$564,398 thousand, up from $477,798 thousand in 2023, indicating a gross margin improvement [396]. - The company reported a net loss of$12,795 thousand for 2024, a significant reduction compared to a net loss of $81,764 thousand in 2023 [396]. - The company’s adjusted net loss for the year ended December 31, 2024, was$12.8 million, an improvement from a net loss of $81.8 million in 2023 [551]. - The company generated$927.8 million in revenue from the United States and $114.2 million from international markets for the year ended December 31, 2024 [549]. Cash and Liquidity - As of December 31, 2024, the company had cash and cash equivalents, and marketable securities totaling$1,006.0 million, focusing on capital preservation and liquidity needs [365]. - Cash and cash equivalents increased to $362,546 thousand in 2024, compared to$143,201 thousand in 2023, indicating improved cash flow [394]. - Cash and cash equivalents at the end of 2024 totaled $362.5 million, compared to$144.8 million at the end of 2023, marking a substantial increase of 150% [404]. - The net cash provided by operating activities increased to $143.2 million in 2024, up from$128.8 million in 2023, reflecting a growth of approximately 11% [403]. Investments and Acquisitions - The company made significant investments in marketable securities, with purchases totaling $1.29 billion in 2024, compared to$795 million in 2023 [403]. - The company acquired Acqueon Inc. for $167.2 million in cash, indicating a strategic move for market expansion [403]. - The company capitalized$22.2 million in internal-use software development costs in 2024, up from $9.5 million in 2023, indicating a focus on technology development [403]. Liabilities and Debt - The aggregate principal amount outstanding of the company's convertible senior notes was$1,181.9 million, with fair values subject to interest rate and market risks [366]. - Total liabilities rose to $1,429,022 thousand in 2024 from$956,483 thousand in 2023, primarily due to the issuance of new convertible senior notes [394]. - The Company had outstanding convertible senior notes of $434.4 million due on June 1, 2025, and$747.5 million due on March 15, 2029 [536]. - The total interest expense related to the 2029 convertible senior notes for the year ended December 31, 2024, was $9.242 million, which includes$6.229 million in contractual interest expense and $3.013 million in amortization of issuance costs [484]. Research and Development - Research and development expenses for 2024 were$166,197 thousand, up from $156,582 thousand in 2023, reflecting continued investment in innovation [396]. - The company’s stock-based compensation expense for research and development decreased to$37.3 million in 2024 from $50.4 million in 2023, a decline of approximately 26$166.3 million, down from $206.3 million in 2023, reflecting a decrease of approximately 19.4$46.32 per share [510]. - The intrinsic value of options exercised in 2024 was $901,000, while the total fair value of options vested during the period was$3,249,000 [509]. Taxation - The company recognized a current income tax expense of $4.9 million in 2024, primarily due to U.S. taxable income [527]. - Deferred tax assets amounted to$209.1 million in 2024, with a valuation allowance of $123.1 million, resulting in net deferred tax assets of$86.0 million [530]. - The company’s total provision for income taxes in 2024 was $40, compared to$2.3 million in 2023, indicating a significant reduction [529]. Operational Risks - The company is exposed to foreign currency risk, with a potential maximum impact of $10.6 million on operating expenses from a hypothetical 10$622,192 thousand in 2024 from $538,085 thousand in 2023, showing growth in shareholder value [394]. - Goodwill increased to$365.4 million in 2024 due to the acquisition of Acqueon, up from $227.4 million in 2023, marking a 61$65.6 million in 2024, up from $38.3 million in 2023, showing an increase of 71% [470].