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 March 31, 2026, we had $782.6 million in working capital, which included $273.0 million in cash and cash equivalents and $450.9 million in marketable investments. Our 2025 convertible senior notes matured on June 1, 2025, and we settled our obligations with respect to the 2025 convertible 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 March 31, 2026.

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 internationally, and the effect of the length and severity of the continued macroeconomic challenges resulting from the impact of global tariff increases and potential future increases and announcements regarding same, as well as the impact of current and potential global conflicts, on these or other factors. We may also acquire or invest in complementary businesses, technologies and intellectual property rights, such as our 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 challenging macroeconomic environment and fluctuations in the financial markets resulting from the impact of global tariff increases and potential future increases and announcements regarding same, as well as the impact of current and potential global conflicts. 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.

In October 2025, our Board of Directors approved the 2025 Repurchase Program, which authorized the repurchase of up to $150.0 million of our common stock through December 31, 2027. The shares may be repurchased at management’s discretion, either on the open market or in privately negotiated block transactions. Management’s decision to repurchase shares will depend on price, blackout periods and other corporate developments. Purchases may occur from time to time and no maximum purchase price has been set.

As part of our 2025 Repurchase Program, on November 11, 2025, we entered into the ASR program with JPM. Under the terms of the ASR program, on November 12, 2025, we made an aggregate payment of $50 million and received an initial delivery of 1,926,782 shares of our common stock, representing approximately 80% of the total number of shares of our common stock expected to be purchased under the ASR program. The shares received were immediately retired and recorded as a reduction to additional paid-in-capital within stockholders’ equity. Given our ability to settle in shares, as described below, the remaining prepaid forward contract amount was classified as a reduction to additional-paid-in-capital upon issuance and as of December 31, 2025.

Under the ASR program, upon settlement, we were permitted to either receive additional shares of common stock from JPM or were required to deliver additional shares of common stock or cash to JPM, at our election. The final number of shares repurchased was based on the average of the daily volume-weighted average prices of our common stock during the term of the ASR program, less a discount and subject to adjustments pursuant to the terms and conditions of the ASR program. Cash settlement was not mandatory pursuant to the terms of the ASR program. The ASR program was completed on February 2, 2026, which resulted in delivery of 701,517 additional shares to us. The final share settlement was based on the average daily volume-weighted average price of our shares, netted against the initial delivery.

In March 2026, we repurchased 578,742 shares under the 2025 Repurchase Program at an average share price of $17.28 for an aggregate payment of $10.0 million.

As of March 31, 2026, $90.0 million remained available under the 2025 Repurchase Program.

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 telecom services. Payments from customers for these services are typically received monthly.

Net cash provided by operating activities was $63.9 million during the three months ended March 31, 2026. Net cash provided by operating activities resulted from our net income of $18.4 million, adjustments to reconcile net income to net cash provided by operating activities of $80.9 million, primarily consisting of $32.7 million of stock-based compensation, $23.9 million of amortization of deferred contract acquisition costs, $17.8 million of depreciation and amortization, $5.3 million of reduction in the carrying amount of right-of-use assets, and $0.9 million of amortization of issuance costs on our convertible senior notes, partially offset by use of cash for operating assets and liabilities of $(35.4) million primarily due to the timing of cash payments to vendors and cash receipts from customers and $(1.2) million accretion of discount on marketable investments.

Net cash provided by operating activities was $48.4 million during the three months ended March 31, 2025. Net cash provided by operating activities resulted from our net income of $0.6 million, adjustments to reconcile net income to net cash provided by operating activities of $78.3 million, primarily consisting of $39.2 million of stock-based compensation, $20.4 million of amortization of deferred contract acquisition costs, $14.5 million of depreciation and amortization, $5.1 million of reduction in the carrying amount of right-of-use assets, and $1.4 million of amortization of issuance costs on our convertible senior notes, partially offset by use of cash for operating assets and liabilities of $(30.5) million primarily due to the timing of cash payments to vendors and cash receipts from customers and $(3.3) million accretion of discount on marketable investments.

Cash Flows from Investing Activities

Net cash used in investing activities of $(0.1) million in the three months ended March 31, 2026 was comprised of $(114.1) million related to purchases of marketable investments, $(9.2) million in capitalized software development costs and $(5.3) million in capital expenditures, offset in part by $128.4 million related to cash proceeds from sales and maturities of marketable investments.

Net cash used in investing activities of $(38.1) million in the three months ended March 31, 2025 was comprised of $275.9 million related to purchases of marketable investments, $8.7 million in capitalized software development costs and $4.7 million in capital expenditures, offset in part by $251.3 million related to cash proceeds from maturities of marketable investments.

Cash Flows from Financing Activities

Net cash used in financing activities of $(22.8) million in the three months ended March 31, 2026 was from $(10.8) million of principal payments on financing arrangements, $(10.0) million of cash paid for the repurchase of our common stock, $(2.5) million of payments related to finance leases, offset in part by $0.4 million in proceeds from the exercise of common stock options.

Net cash used in financing activities of $(2.2) million in the three months ended March 31, 2025 was from $2.2 million of payments related to finance leases.