Five9 Continues Winning Streak With Strong Q2 Earnings


Cloud call center company Five9 (FIVN) has reported strong earning results for the second quarter, with shares climbing 7% in Monday’s trading into the print- and holding onto the gains after-hours.

Specifically, Q2 Non-GAAP EPS of $0.21 beat Street forecasts by $0.06, although GAAP EPS of -$0.25 marginally missed Street expectations by $0.02. Meanwhile revenue of $99.8M beat by $8.76M and climbed an impressive 28.9% year-over-year.

FIVN also reported Adjusted EBITDA for the second quarter of 2020 of $18.3 million, or 18.3% of revenue, compared to $14.4 million, or 18.6% of revenue, for Q2 2019. GAAP operating cash flow for the quarter was $14.8 million, with adjusted gross margin at 65.7% vs last year’s 65.0%.

“We believe the on-premises to cloud and digital transformation trends driving our massive market opportunity are likely to accelerate as work-from-home trends continue and retail sales personnel are increasingly displaced by contact center agents” commented CEO Rowan Trollope, adding “Our increased go-to-market investments are paying dividends, most notably with system integrators and AT&T.”

Looking forward, Five9 is now guiding for third quarter Non-GAAP EPS of $0.17-$0.18 (consensus was at $0.18) and revenue of $100.5-$101.5M (easily beating the Street estimate of $94.03M).

For the full year, FIVN id guiding for Non-GAAP EPS of $0.77-$0.80 (up from $0.72-$0.76 previously) and revenue of $399.0-$401.0M (again, higher than the consensus expectation of $382.56M).

Shares in FIVN have almost doubled year-to-date, and analysts have a cautiously optimistic Moderate Buy consensus on the stock’s outlook. However due to the 97% YTD rally, the average analyst price target of $111 now indicates 14% downside potential from current levels.

“We believe Five9’s product and sales strategy positions the company to maintain a steady path of execution as the market evolves from on-premise to Cloud solutions” cheers Needham analyst Scott Berg.

He highlights the company’s product innovation, sales positioning, and impressive history of execution as reasons to stay bullish on the company’s outlook, despite the stock’s steep climb.

As a result the analyst has just ramped up his price target from $115 to $130, writing: Five9 is the leader of next-gen CCaaS [Contact Center as a Service] solutions and due to industry dynamics, FIVN will increase its market share through 2023 as legacy vendors Avaya, Cisco and Aspect continue to lose seats.” (See FIVN stock analysis on TipRanks)

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