Core Viewpoint - Halper Sadeh LLC is investigating potential breaches of fiduciary duties by certain officers and directors of Five9, Inc., encouraging shareholders to contact the firm to discuss their rights and possible corporate governance reforms [1]. Group 1: Shareholder Rights and Legal Actions - Shareholders of Five9, Inc. may seek corporate governance reforms, return of funds, court-approved financial incentives, or other benefits [1]. - The firm operates on a contingent fee basis, meaning shareholders would not incur out-of-pocket legal fees [1]. Group 2: Importance of Shareholder Involvement - Shareholder participation is crucial for improving company policies, practices, and oversight, which can enhance overall shareholder value [1]. - Halper Sadeh LLC has a history of representing investors globally who have experienced securities fraud and corporate misconduct, recovering millions for defrauded investors [1].

NEW YORK, Feb. 25, 2026 /PRNewswire/ -- Kuehn Law, PLLC, a shareholder litigation law firm, is investigating whether certain officers and directors of Five9, Inc. (NASDAQ: FIVN) breached their fiduciary duties to shareholders. According to a federal securities lawsuit, Insiders at Five9 caused the company to misrepresent or fail to disclose that: (i) Five9's net new business was not "strong irrespective of the macro" and was, in fact, hampered by macroeconomic issues such as constrained and scrutinized cust ...

Core Insights - The article emphasizes the importance of identifying underappreciated companies that can provide value to investors through a contrarian investment philosophy [1]. Group 1: Author's Background - The author has 20 years of experience in foreign policy research and over 25 years in investment analysis, focusing on deep-discount value plays [1]. - The author began analyzing securities during college and has contributed to various reputable publications, including Forbes and Seeking Alpha [1]. Group 2: Investment Philosophy - The investment approach is centered around finding micro-cap stocks that are undervalued and have the potential to return value to investors [1]. - The author is influenced by the contrarian investment philosophy of David Dreman, which focuses on value investing rather than momentum [1].

If you are new to this company, I'd like you to go back and read my in-depth write-ups on Hemisphere Energy Corporation ( HMENF ) here and here . In these articles IFluidsdoc is an international oil industry veteran with 40 years of experience having worked on six continents and in over twenty countries around the world. He is an expert in the upstream oilpatch and an energy sector specialist. He is the leader of the investing group The Daily Drilling Report where he provides investment analysis for the oil ...

Core Insights - Five9, Inc. (FIVN) reported fourth-quarter 2025 earnings of 80 cents per share, exceeding the Zacks Consensus Estimate by 1.3% and showing a 1.3% increase from the previous year's 79 cents [1][9] - The company's fourth-quarter revenues rose 8% year over year to $300.3 million, also surpassing the Zacks Consensus Estimate by 0.9%, driven by a 12% increase in subscription revenues due to strong Enterprise AI traction [2][9] Financial Performance - FIVN's adjusted non-GAAP gross profit for Q4 was $189.47 million, up from $176.85 million in the same quarter last year, with a gross margin of 63.1%, down 40 basis points year over year [3] - Non-GAAP operating income increased to $61.62 million from $49.52 million year over year, resulting in a non-GAAP operating margin of 20.5%, up from 17.8% [4] - General & administrative expenses on a non-GAAP basis rose to $18.2 million, accounting for 6.1% of revenues, down from 6.4% in the previous year [4] - Research & development expenditures decreased to $26.2 million, representing 8.7% of revenues, down from 11.5% [5] - Non-GAAP sales & marketing costs increased to $67.7 million, maintaining 22.6% of revenues, consistent with the prior year [5] Balance Sheet & Cash Flow - At the end of the quarter, FIVN had cash and cash equivalents of $696.92 million, up from $676.2 million in the previous quarter [6] - The company generated an operating cash flow of $83.6 million and reported a free cash flow of $67.3 million, with a free cash flow margin of 22% [6] Guidance - For 2026, Five9 expects revenues to be between $1.247 billion and $1.261 billion, with the Zacks Consensus Estimate at $1.26 billion, indicating a year-over-year growth of 9.6% [7] - GAAP net income per share is projected to be between 86 cents and 95 cents, while non-GAAP net income per share is expected to range from $3.15 to $3.21, with the Zacks Consensus Estimate at $3.19, reflecting an 8.3% year-over-year growth [8] - For Q1 of fiscal 2026, revenues are forecasted to be between $296.5 million and $302.5 million, with the Zacks Consensus Estimate at $299.3 million, indicating a 7% year-over-year growth [10] - GAAP net income per share for Q1 is projected to be between 10 cents and 17 cents, while non-GAAP net income per share is expected to be between 66 cents and 70 cents, with the Zacks Consensus Estimate at 67 cents, indicating an 8.1% year-over-year growth [11]

Financial Performance - Five9's revenue for the years ended December 31, 2025, 2024, and 2023 was $1,149.1 million, $1,041.9 million, and $910.5 million, respectively, representing year-over-year growth of 10% and 14%[25]. - The company recorded net income (losses) of $39.4 million, $(12.8) million, and $(81.8) million for the years ended December 31, 2025, 2024, and 2023[25]. - As of December 31, 2025, Five9's total assets were $1,790.1 million, down from $2,051.2 million in 2024 and up from $1,494.6 million in 2023[25]. - The company incurred net losses of $39.4 million, $(12.8) million, and $(81.8) million for the years ended December 31, 2025, 2024, and 2023, with an accumulated deficit of $378.2 million as of December 31, 2025[98]. - Revenue for the years ended December 31, 2025, 2024, and 2023 was $1,149.1 million, $1,041.9 million, and $910.5 million, representing year-over-year growth of 10% and 14% respectively[99]. Customer Base and Retention - Five9 has over 3,000 customers, leveraging its AI-powered CX platform to improve customer experiences across various channels[16]. - As of December 31, 2025, the company has a diverse customer base of over 3,000 organizations, with no single customer accounting for more than 10% of revenues in 2025, 2024, or 2023[33]. - The Annual Dollar-Based Retention Rate was 105% as of December 31, 2025, enhancing the company's ability to forecast financial performance[25]. - In 2025, 51% of total revenues were generated in the second half of the year, attributed to increased activities in retail, healthcare, and education[53]. - Retaining existing customers is critical, as subscription terminations or reductions could significantly harm revenues and gross margins[110]. Business Model and Operations - The company operates a SaaS business model, generating subscription revenue primarily based on the number of licenses and usage-based telephony revenue[24]. - The company’s sales model includes both direct sales through field and telesales teams and indirect sales through a network of technology solution distributors and resellers[38]. - The company’s cloud platform is designed to be highly reliable, secure, and scalable, with operational control over critical elements of its voice infrastructure[41]. - The company continues to expand its international operations, which introduces significant macroeconomic risks[101]. - The company plans to invest in enhancing its solution through AI capabilities and expanding its partner ecosystem to drive future growth[100]. Research and Development - The company has invested significantly in research and development, with a core center in California and additional engineers in Australia, Portugal, and India, to enhance its Intelligent CX Platform[40]. - Research and development expenses totaled $152.3 million, $166.2 million, and $156.6 million for the years ended December 31, 2025, 2024, and 2023, respectively[144]. - The company emphasizes advancements in AI, particularly through its Genius AI suite, which enhances customer experience and operational efficiency[19]. - The development of AI-powered features is a key focus, but there are risks associated with achieving sufficient accuracy and market acceptance[134]. Employee Engagement and Diversity - The company employs 2,910 full-time employees as of December 31, 2025, with 43% in cost of revenue functions and 25% in research and development[54]. - The company’s employee engagement score was 72% in 2025, exceeding the Culture Amp benchmark by three percentage points, indicating strong team effectiveness and growth opportunities[63]. - Women represented 32% of the company's worldwide employees and racial and ethnic minorities represented 36% of U.S. employees as of December 31, 2025[66]. - The company emphasizes a total rewards system that includes competitive cash compensation and a holistic package addressing employee needs, such as healthcare benefits and retirement plans[70]. Regulatory and Compliance Risks - The company faces regulatory challenges, including compliance with the Telecommunications Act and various federal and state regulations that could impact operations[78]. - The company must adhere to numerous regulations, including the Telephone Consumer Protection Act and the California Consumer Privacy Act, which could affect operational costs and competitive positioning[80][81]. - The company is subject to international regulations, such as the GDPR in the EU, which imposes strict requirements on data processing and can result in significant fines for non-compliance[82]. - The company has implemented a layered information governance program to ensure compliance with evolving regulatory frameworks and protect customer data[83]. - Compliance with new robocall prevention regulations, including the STIR/SHAKEN framework, poses significant business risks and may affect customer relationships[210]. Market Competition and Challenges - The company faces intense competition from both large legacy technology vendors and smaller service providers, which could harm its operating results[124]. - Competitors are increasingly integrating AI technologies into their offerings, potentially leading to pricing pressures and reduced market share for the company[125]. - The company faces challenges in managing growth effectively, which could lead to operational difficulties and impact business performance[102]. - The company acknowledges risks related to adverse economic conditions, including inflation and high interest rates, which may impact revenue growth and customer retention[90]. Intellectual Property and Technology Risks - The company has approximately $747.5 million in principal outstanding under convertible senior notes issued in March 2024, maturing on March 15, 2029[176]. - The company may incur additional liabilities for taxes, fees, or surcharges if state and local taxing authorities challenge its tax positions[207]. - The company relies on third-party licensed software, including AI solutions, and any inability to maintain these licenses could harm its business[196]. - The company is subject to third-party intellectual property infringement claims, which could result in substantial damages and legal costs[191]. Future Outlook and Strategic Initiatives - The company plans to expand its international presence, particularly in India, with significant operations in the Philippines and Portugal[154]. - The company is increasing sales, marketing, and support personnel in the U.K. and the European Union, along with enlarging data centers in the U.K. and Amsterdam[159]. - The company plans to invest in acquiring government customers, which requires compliance with FedRAMP, a process that is costly and time-consuming[108]. - The company is increasing its network of technology solution distributors and resellers, but failure to manage these relationships effectively could harm revenues[118].

Financial Data and Key Metrics Changes - The company reported total revenue of $300 million for Q4, representing an 8% year-over-year growth [21] - Subscription revenue grew by 12% year-over-year in Q4, now making up 82% of total revenue, up from 79% a year ago [22] - Adjusted EBITDA margin increased to 26%, while free cash flow more than doubled year-over-year to a margin of 22% [10][24] - For the full year 2025, total revenue was $1.15 billion, growing 10% year-over-year, with subscription revenue growing 13% [25] Business Line Data and Key Metrics Changes - Enterprise AI revenue growth accelerated to 50% year-over-year, contributing significantly to the overall subscription revenue [21][22] - Core CCaaS subscription revenue growth accelerated to 8% year-over-year [22] - The company achieved a record in enterprise AI bookings, which more than doubled year-over-year [9][16] Market Data and Key Metrics Changes - The market for traditional CCaaS is expected to grow at a 9% CAGR, while the GenAI customer service market is projected to grow at a 34% CAGR through 2029, reaching a combined annual spend of $48 billion [11] - The company is well-positioned to capitalize on these growth drivers, leveraging its data advantage in conversational data [11][12] Company Strategy and Development Direction - The company aims to lead in AI-powered customer experience (CX) by enhancing its platform capabilities and expanding its partnerships, particularly with Google Cloud [14][15] - The focus is on creating a unified CX platform that addresses both agentic and traditional human needs, driving efficiency and elevating customer experiences [8][10] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's positioning for continued success in 2026 and beyond, driven by strong demand for AI solutions [10] - The CEO emphasized the importance of operational excellence and the potential for significant growth in the AI-driven CX market [9][10] Other Important Information - The company completed a $50 million accelerated share repurchase on February 2, buying back approximately 2.6 million shares, reflecting strong cash generation [29] - The company plans to host an Investor Day in late 2026 to provide additional details on strategic priorities and long-term financial outlook [29] Q&A Session Summary Question: Breakdown of AI revenue growth - Management indicated that AI revenue growth is driven by both new logo acquisition and penetration into the existing customer base, with both segments growing significantly [33][34] Question: Product strategy and potential changes - The new CEO highlighted the opportunity for transformation within the CX space, focusing on increasing the total addressable market (TAM) through AI and traditional CCaaS [40] Question: Contact center industry outlook - Management discussed the ongoing shift to cloud solutions and the significant AI opportunity, emphasizing the company's end-to-end platform advantage [46][48] Question: Sector performance and customer pain points - The company noted strong adoption in healthcare and retail sectors, with customers focusing on improving their data strategies to enhance AI capabilities [54][89] Question: AI revenue composition - The company clarified that the $100 million in AI revenue is primarily consumption-based, with significant traction in AI agents and agent assist solutions [67][75]

Financial Data and Key Metrics Changes - Total revenue for Q4 reached $300 million, representing an 8% year-over-year growth [21] - Subscription revenue grew by 12% year-over-year in Q4, now making up 82% of total revenue, up from 79% a year ago [22] - Adjusted EBITDA margin increased to 26%, with free cash flow more than doubling year-over-year to a margin of 22% [10][24] - For the full year 2025, total revenue was $1.15 billion, growing 10% year-over-year, with subscription revenue growing 13% year-over-year [25] Business Line Data and Key Metrics Changes - Enterprise AI revenue growth accelerated to 50% year-over-year, contributing significantly to subscription revenue [21][22] - Core CCaaS subscription revenue growth accelerated to 8% year-over-year [21] - The number of $1 million-plus ARR customers grew subscription revenue by 24% year-over-year, now making up 59% of subscription revenue [22] Market Data and Key Metrics Changes - Gartner forecasts the traditional CCaaS market to grow at a 9% CAGR and the GenAI customer service market at a 34% CAGR through 2029, leading to a combined annual spend of $48 billion [11] - The enterprise business represented approximately 91% of total revenue on an LTM basis, with LTM enterprise subscription revenue growing 15% year-over-year [23] Company Strategy and Development Direction - The company aims to lead in AI-powered customer experience (CX) by leveraging conversational data and enhancing its end-to-end platform capabilities [11][13] - A strong focus on partnerships, particularly with Google Cloud, to accelerate AI-driven CX solutions [14][15] - The company is positioned to capitalize on the significant opportunity in the evolving CX industry, with a commitment to product innovation and operational excellence [10][11] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to navigate macroeconomic challenges and highlighted the importance of AI in driving future growth [4][10] - The new CEO emphasized the large opportunity ahead for the company and the importance of a unified CX platform [8][9] - The company expects revenue to return to double-digit growth in the second half of 2026, driven by a strong backlog of bookings [28] Other Important Information - The company completed a $50 million accelerated share repurchase on February 2, buying back approximately 2.6 million shares [29] - The company plans to host an Investor Day in late 2026 to provide additional details on strategic priorities and long-term financial outlook [29] Q&A Session Summary Question: Can you help us understand the breakdown between greenfield and existing customer base for AI revenue? - Management indicated that both new logo attach and penetration into the installed base are growing significantly, but did not quantify the breakdown [32][33] Question: How do you see the transformation within the CX space? - The new CEO expressed optimism about the transformation in the CX space, emphasizing the potential for increased efficiency and new experiences through AI integration [40] Question: What sectors are seeing the highest uptake for new features? - Management noted strong success in healthcare and retail, with customers wanting to evolve their CX strategies to incorporate AI [52][54] Question: What percentage of your enterprise base is adopting AI? - Management stated that it is still early days for full penetration of AI within the customer base, but there is significant interest and ongoing adoption [58][59] Question: How do you think about the risk of LLM native platforms bypassing traditional CCaaS? - Management highlighted the importance of data and orchestration capabilities as competitive advantages that are difficult to replicate [62][64]

Financial Data and Key Metrics Changes - The company reported total revenue of $300 million for Q4, representing an 8% year-over-year growth [19] - Subscription revenue grew by 12% year-over-year in Q4, now making up 82% of total revenue, up from 79% a year ago [21] - Adjusted EBITDA margin increased to 26%, while free cash flow more than doubled year-over-year to a margin of 22% [10][23] - For the full year 2025, total revenue was $1.15 billion, growing 10% year-over-year, with subscription revenue growing 13% year-over-year [24] Business Line Data and Key Metrics Changes - Enterprise AI revenue growth accelerated to 50% year-over-year, contributing significantly to the overall subscription revenue [19][10] - Core CCaaS subscription revenue growth accelerated to 8% year-over-year [19] - The enterprise business represented approximately 91% of total revenue on a last twelve months (LTM) basis, with LTM enterprise subscription revenue growing 15% year-over-year [22] Market Data and Key Metrics Changes - Gartner forecasts the market for traditional CCaaS to grow at a 9% CAGR and the GenAI customer service market to grow at a 34% CAGR through 2029, reaching a combined annual spend of $48 billion [11] - The company is experiencing strong traction in sectors such as healthcare and retail, with significant adoption of AI capabilities [86] Company Strategy and Development Direction - The company aims to lead in AI-powered customer experience (CX) by leveraging conversational data and enhancing its end-to-end platform capabilities [11][12] - A strong focus on partnerships, particularly with Google Cloud, is seen as a key driver for differentiation and innovation in AI solutions [13][79] - The company is committed to expanding its AI capabilities and enhancing customer experiences through new product innovations [12][14] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's positioning for continued success in 2026 and beyond, driven by strong demand for AI solutions [10] - The CEO highlighted the importance of a unified CX platform to meet evolving customer needs and the potential for significant market expansion [8][10] - Management acknowledged macroeconomic challenges but remains optimistic about the company's growth trajectory and operational excellence [3][10] Other Important Information - The company completed a $50 million accelerated share repurchase on February 2, buying back approximately 2.6 million shares, reflecting strong cash generation [27] - The company plans to host an Investor Day in late 2026 to provide additional details on strategic priorities and long-term financial outlook [27] Q&A Session Summary Question: Breakdown of AI revenue growth between new and existing customers - Management indicated that both new logo acquisition and penetration into the existing customer base are contributing significantly to AI revenue growth [31][32] Question: Future product changes and opportunities in AI - The new CEO expressed optimism about transforming the CX space through AI and traditional CCaaS, emphasizing the potential for new customer experiences [40] Question: Risks from LLM native platforms - Management highlighted the competitive moat provided by their orchestration capabilities and historical conversational data, which cannot be easily replicated by LLMs [60][62] Question: Sector performance and customer pain points - The company is seeing strong adoption in healthcare and retail, with customers focusing on improving their data strategies to leverage AI effectively [52][86] Question: Guidance for 2026 revenue and backlog contributions - Management clarified that the guidance for 2026 includes contributions from dollar-based retention rate (DBRR) and backlog, with a focus on consumption-based revenue from AI solutions [68][71]

This presentation is proprietary and is intended solely for the information of the persons to whom it is presented. Disclosure of this presentation, its contents, extracts or abstracts to third parties is not authorized without the express written permission of Five9, Inc. (the "Company"), and it may not be retained, reproduced or distributed, in whole or in part, by any means (including electronic) without the prior written consent of Five9, Inc. This presentation speaks only as of the date of first public ...