Five9 (FIVN) Q2 2024 earnings summary

Executive summary

• Achieved annual revenue run rate surpassing $1 billion, driven by 21% year-over-year growth in LTM enterprise subscription revenue and strong Q2 2024 revenue of $252.1 million, a 13% increase year-over-year.

• Adjusted EBITDA margin reached 16.6% of revenue in Q2 2024, with LTM operating cash flow of $126 million (13% of revenue).

• Announced agreement to acquire Acqueon for $167.1 million in cash, expected to close in the second half of 2024, to expand AI-powered CX capabilities and market reach.

• Introduced GenAI Studio and AI Knowledge, enhancing AI-driven customer experience solutions and supporting a 30% TAM expansion through automation.

• Issued $747.5 million of 1.00% convertible senior notes due 2029 and repurchased $313.1 million of 2025 notes, strengthening the balance sheet.

Financial highlights

• Q2 2024 revenue reached $252.1 million, up 13% year-over-year; annual run rate surpassed $1 billion.

• Adjusted gross margin for Q2 2024 was 60.5%, down from 61.8% year-over-year; GAAP gross margin was 53%.

• Adjusted EBITDA was $41.8 million (16.6% margin), nearly flat year-over-year.

• Non-GAAP EPS for Q2 2024 was $0.52 per diluted share; GAAP net loss was $12.8 million, or $0.17 per share.

• Cash, cash equivalents, and marketable investments totaled $1.1 billion at quarter end, with total debt of $1.2 billion.

Outlook and guidance

• Full-year 2024 revenue guidance reduced by 3.8% to $1.013–$1.017 billion due to softer Q2 bookings and muted seasonality.

• Q3 2024 revenue guidance midpoint is $255 million; non-GAAP net income per diluted share expected at $0.57–$0.59.

• Full-year non-GAAP net income per diluted share expected between $2.25 and $2.29; GAAP net loss per share between $(0.29) and $(0.19).

• EBITDA margin expected to improve sequentially, with Q4 exceeding 20%.

• Guidance excludes impact from Acqueon acquisition, which is expected to be immaterial for 2024.