The News: Five9, Inc., (Nasdaq: FIVN), which provides intelligent cloud-based contact center services, announced its Q4 and Full Year 2021 earnings, which saw revenue growth rise to a record $173.6 million for Q4. Full Year 2021 revenue increased 40 percent and set a company revenue record at $609.6 million. Five9’s revenue growth is expected to continue, with Full Year 2022 guidance between $754.5 million to $757.5 million. Read the full press release from Five9 here.
- Fourth quarter revenue of $173.6 million, which is up 36 percent from $127.9 million in the same quarter in 2020. The revenue beat analyst estimates of $165.4 million by $8.2 million.
- Fourth quarter non-GAAP net income for the fourth quarter was $30.1 million, which was up from $23.7 million one year ago.
- Fourth quarter earnings per share were 42 cents per diluted share, up from 34 cents per diluted share in 2020. The results beat analyst estimates, which came in at 36 cents per share.
- Fourth quarter adjusted gross margin was 62.8 percent, up from 66.4 percent one year ago.
- Full year 2021 revenue was $609.6 million, which soared 40 percent from the $434.9 million the company reported one year ago.
- Full year 2021 non-GAAP net income was $82.2 million, up from 67.4 million in 2020.
- Full year 2021 earnings per share were $1.16 per diluted share, compared to 99 cents per diluted share one year ago.
Analyst Take: Five9 Q4 2021 revenue hit a record $173.6 million, fueled largely by growing traction for its AI and automation-based cloud contact center services. Let’s first look at Five9 by the numbers, which were promising for the company and its AI- and automation-enabled cloud-based contact center platform.
For Five9, the Q4 and full-year results shine a positive light on the company’s trajectory and products and how they are being seen and adopted in the competitive contact center technologies marketplace. Five9 continues to invest in AI and automation, which will help in the company’s drive to provide and further develop needed call center innovations and services for customers around the world in a market that is always facing growing competition.
In the earnings call, Five9 CEO Rowan Trollope laid out ambitious plans for the company in 2022 and beyond, including further investments involving AI and product innovation, but even more importantly in working to gain traction with larger enterprises and global expansion.
I believe this is an important approach and paradigm shift required to continue to drive growth across Five9’s business, though it is the same approach many of its competitors will also be taking. Five9 is already serving the enterprise, but this part of the market will serve as a proof point that it has enterprise scale.
Furthermore, the company and its leadership must monitor this closely and find ways to keep a step ahead when possible, so as to maintain its continued growth and expansion. I expect these ambitious growth strategies both on product innovation and enterprise customer growth to be measured carefully by the street as they try to interpret the strength of Five9’s continued movement upstream into larger enterprises—especially as it pertains to displacing larger and traditional on-premises deployments.
What’s Ahead for Five9
Founded in 2001, Five9 serves more than 2,000 customers globally, providing more than seven billion call center customer interactions each year. Yet even with this progress, company executives on the earnings call said they aim for even broader opportunities with their latest and upcoming product innovations and services.
Using its cloud-based platform, the company’s flagship product – The Five9 Intelligent Cloud Contact Center – provides digital engagement, analytics, workflow automation, workforce optimization, and practical AI to help their business customers create more human customer experiences and to engage and empower their agents to provide quality services. Automation and AI have been of particular focus in recent periods for Five9 as it seeks to make its platform extensible and to expand revenue through more sophisticated offerings that leverage next-generation technologies and streamline complex processes for companies that seek to deliver on growing customer demand for enhanced experiences and reduced time to resolution.
I believe Five9’s Q4 and 2021 growth is impressive and further illustrates the growing power of cloud services in a world where so many companies are having trouble hiring and retaining location-based workers. I also expect investors to be looking for a continuation of growth at this rate in the coming year. By using Five9’s platform and technologies, business customers can circumvent some of those complications and difficult issues by using this forward-looking approach to solve their call center pressures.
Continued innovations and quality service delivery will be paramount, however, so Five9 cannot rest on its past performance. Instead, the company must continue to add features, address, and incorporate customer feature requests, and further develop its products and work to lead the market in this growing space.
Disclosure: Futurum Research is a research and advisory firm that engages or has engaged in research, analysis, and advisory services with many technology companies, including those mentioned in this article. The author does not hold any equity positions with any company mentioned in this article.
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The original version of this article was first published on Futurum Research.
Daniel Newman is the Principal Analyst of Futurum Research and the CEO of Broadsuite Media Group. Living his life at the intersection of people and technology, Daniel works with the world’s largest technology brands exploring Digital Transformation and how it is influencing the enterprise. From Big Data to IoT to Cloud Computing, Newman makes the connections between business, people and tech that are required for companies to benefit most from their technology projects, which leads to his ideas regularly being cited in CIO.Com, CIO Review and hundreds of other sites across the world. A 5x Best Selling Author including his most recent “Building Dragons: Digital Transformation in the Experience Economy,” Daniel is also a Forbes, Entrepreneur and Huffington Post Contributor. MBA and Graduate Adjunct Professor, Daniel Newman is a Chicago Native and his speaking takes him around the world each year as he shares his vision of the role technology will play in our future.