Five9, Inc.

To date, we have financed our operations primarily through sales of our solution, net proceeds from our equity and debt financings, including the issuance of convertible senior notes in March 2024, May and June 2020 and May 2018, and lease facilities. As of June 30, 2025, we had $692.6 million in working capital, which included $205.5 million in cash and cash equivalents and $430.4 million in marketable investments. Our 2025 convertible senior notes matured on June 1, 2025, and we settled our obligations with respect to the 2025 senior notes through a cash payment of $434.4 million in connection therewith. Our intent is that all marketable investments are available for use in our current operations, including marketable investments with maturity dates greater than one year from June 30, 2025.

In March 2024, we issued $747.5 million aggregate principal amount of our 2029 convertible senior notes in a private offering. The 2029 convertible senior notes mature on March 15, 2029 and are our senior unsecured obligations. The 2029 convertible senior notes bear interest at a fixed rate of 1.00% per annum, payable semiannually in arrears on March 15 and September 15 of each year, beginning on September 15, 2024. The total net proceeds from the issuance of the 2029 convertible senior notes, after deducting initial purchasers' discounts and commissions and estimated debt issuance costs, were approximately $728.8 million. In connection with the issuance of the 2029 convertible senior notes, we used part of the net proceeds from the issuance to repurchase approximately $313.1 million aggregate principal amount of our then outstanding 2025 convertible senior notes in privately-negotiated transactions for aggregate cash consideration of approximately $304.9 million. In connection with the issuance of the 2029 convertible senior notes, we also entered into privately negotiated capped call transactions with certain financial institutions. We believe our existing cash and cash equivalents will be sufficient to meet our working capital and capital expenditure needs for at least the next 12 months.

We plan to continue to finance our operations in the future primarily through sales of our solution, net proceeds from equity and debt financings, and lease facilities. Our future capital requirements will depend on many factors including our growth rate, continuing market acceptance of our solution, the strength of the global economy, customer retention, growth within our installed base, our ability to gain new customers, the timing and extent of spending to support research and development efforts, the outcome of any pending or future litigation or other claims by third parties or governmental entities, the expansion of sales and marketing activities and personnel, the introduction of new and enhanced offerings, expenses incurred in expanding our operations in Portugal, and the effect of the length and severity of the continued macroeconomic challenges, the impact of global tariff increases and potential future increases and announcements regarding same, the Russia-Ukraine conflict, and the conflicts in the Middle East, on these or other factors. We may also acquire or invest in complementary businesses, technologies and intellectual property rights, such as our recent acquisitions of Aceyus in August 2023 and Acqueon in August 2024, which may increase our use of cash and future capital requirements, both to pay acquisition costs and to support our combined operations. We may raise additional capital through equity or debt financings at any time to fund these or other requirements. However, we may not be able to raise additional capital through equity or debt financings when needed on terms acceptable to us or at all, depending on our financial performance and condition, economic and market conditions, the trading price of our common stock, and other factors, including the length and severity of the current economic downturn and fluctuations in the financial markets, including due to the impact of global tariff increases and potential future increases and announcements regarding same, the Russia-Ukraine conflict and the conflicts in the Middle East. If we are unable to raise additional capital as needed, our business, operating results and financial condition could be harmed. In addition, if our operating performance during the next twelve months is below our expectations, our liquidity and ability to operate our business also could be harmed.

If we raise additional funds by issuing equity or equity-linked securities, the ownership of our existing stockholders would be diluted. If we raise additional funds through the incurrence of additional indebtedness, we will be subject to increased debt service obligations and could also be subject to restrictive covenants and other operating restrictions that could negatively impact our ability to operate our business.

Cash Flows

The following table summarizes our cash flows for the periods presented (in thousands):

Cash Flows from Operating Activities

Cash provided by operating activities is primarily influenced by our personnel-related expenditures, data center and telecommunications carrier costs, office and facility related costs, USF contributions and other regulatory costs and the amount and timing of customer payments. If we continue to improve our financial results, we expect net cash provided by operating activities to increase. Our largest source of operating cash inflows is cash collections from our customers for subscription and related usage services. Payments from customers for these services are typically received monthly.

Net cash provided by operating activities was $83.4 million during the six months ended June 30, 2025. Net cash provided by operating activities resulted from our net income of $1.7 million, adjustments to reconcile net income to net cash provided by operating activities of $161.4 million, primarily consisting of $81.1 million of stock-based compensation, $41.5 million of amortization of deferred contract acquisition costs, $29.1 million of depreciation and amortization, $10.1 million of reduction in the carrying amount of right-of-use assets, and $2.7 million of amortization of issuance costs on our convertible senior notes, partially offset by use of cash for operating assets and liabilities of $(79.7) million primarily due to the timing of cash payments to vendors and cash receipts from customers and $(5.3) million accretion of discount on marketable investments.

Net cash provided by operating activities was $52.2 million during the six months ended June 30, 2024. Net cash provided by operating activities resulted from our net loss of $19.9 million, adjustments to reconcile net loss to net cash provided by operating activities of $139.2 million, primarily consisting of $88.3 million of stock-based compensation, $33.8 million of amortization of deferred contract acquisition costs, $25.1 million of depreciation and amortization, $6.3 million of reduction in the carrying amount of right-of-use assets, $2.5 million of amortization of issuance costs on our convertible senior notes, $(11.2) million accretion of discount on marketable investments and $(6.6) million gain on early extinguishment of debt, partially offset by use of cash for operating assets and liabilities of $(67.1) million primarily due to the timing of cash payments to vendors and cash receipts from customers.

Cash Flows from Investing Activities

Net cash provided by investing activities of $191.1 million in the six months ended June 30, 2025 was comprised of $533.2 million related to cash proceeds from maturities of marketable investments, offset in part by $315.1 million related to purchases of marketable investments, $18.7 million in capitalized software development costs and $8.2 million in capital expenditures.

Net cash used in investing activities of $(360.1) million in the six months ended June 30, 2024 was comprised of $816.5 million related to purchases of marketable investments, $18.7 million in capital expenditures and $8.3 million in capitalized software development costs, offset in part by $483.3 million related to cash proceeds from sales and maturities of marketable investments.

Cash Flows from Financing Activities

Net cash used in financing activities of $(431.1) million in the six months ended June 30, 2025 was primarily related to $434.4 million of cash paid in connection with the maturity of the 2025 convertible senior notes and $4.7 million of payments related to finance leases, offset in part by $7.9 million from the sale of common stock under our employee stock purchase plan.

Net cash provided by financing activities of $340.4 million in the six months ended June 30, 2024 was related to net cash proceeds of $728.8 million from the issuance of the 2029 convertible senior notes, net of initial purchasers' discounts and commissions and debt issuance costs, $9.5 million from the sale of common stock under our employee stock purchase plan, $0.5 million cash received from the partial termination of capped calls associated with the 2025 convertible senior notes, and $0.4 million of cash proceeds from the exercise of stock options, offset in part by $304.5 million from the repurchase of a portion of the 2025 convertible senior notes, $93.4 million from the payment for capped call transactions associated with the 2029 convertible senior notes, and $1.0 million of payments related to finance leases.