Shares of call center provider Five9 drop on weaker-than-expected outlook

Shares of call center provider Five9 drop on weaker-than-expected outlook

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Shares in Five9 Inc. dropped in late trading after the call center software provider delivered a weaker-than-expected outlook alongside its latest earnings report.

For its fiscal fourth quarter ended Dec. 31, Five9 reported net income before costs such as stock compensation of $39 million, or 54 cents per share, up from $30.1 million, or 42 cents per share ,the year prior. Revenue rose 20% year-over-year, to $208.3 million, a quarterly record high for the company.

Earnings and revenue were both beats, with analysts having expected earnings per share of 41 cents on revenue of $204.68 million.

Five9’s net loss in the quarter came in at $13.7 million, compared with a loss of $3.6 million the year prior. Adjusted earnings before interest, taxes, depreciation and amortization in the quarter were $46.2 million, or 22% of revenue, compared with $36.9 million, or 21.3% of revenue, in the fourth quarter of 2021.

For its full fiscal year 2022, adjusted income was $106.7 million, or $1.50 per share, up from $82.2 million, or $1.16 a share, in 2021. Revenue rose 28%, to $778.8 million.

“This growth was driven by the continued strength of our Enterprise business where LTM subscription revenue grew 32% year-over-year,” Mike Burkland, chairman and chief executive officer of Five9, said in the earnings release.

Alongside the earnings, Burkland also announced two new product offerings that leverage GPT-3 from OpenAI LP: AI Insights and AI Summaries.

“We have now expanded what we believe to be the industry-leading AI and 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,” Burkland said. “We believe these new offerings will play a central role in the future of the contact center and customer experience.”

For the first quarter, Five9 expected earnings of 23 to 25 cents a sahre on revenue of $207 million to $208 million. Analysts had expected 21 cents and $209.71 million.

The miss in revenue outlook wasn’t large, but with investors perhaps still slightly skittish about the company after it rejected a $14.7 billion takeover offer from Zoom Video Communications Inc. in 2021 — the company’s market cap today is $5.7 billion — it was enough to trigger a late selloff. Five9 shares were down more than 6% after-hours.

Image: Five9

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