Five9, Inc.

Five9 is a leading provider of the Genius CX Platform for enterprise contact centers. With a foundation in our cloud-native solution, Five9 is now evolving into an AI-native CX platform, empowering enterprises to scale seamlessly, innovate faster, and deliver enhanced customer experiences as our market opportunity continues to expand. Our reliable, secure, and scalable Genius CX Platform, powered by our Five9 Genius AI suite, delivers a comprehensive suite of easy-to-use applications that enable the breadth of customer service, sales, and marketing functions. We have become an established leader in the AI-powered CX market with more than 4,000 customers.

Our Genius AI suite is a comprehensive portfolio of AI solutions that uses Generative AI to power agentic CX. The contact center is the system of record for interactions with full conversation history, and our platform serves as a real-time orchestration engine for every customer interaction across all channels, whether it is with a human or AI agent. As a result, our platform is designed to deliver a seamless collaboration between human agents and AI agents, where each interaction strengthens the next. This continuous learning loop compounds over time, creating a powerful data flywheel that drives higher performance, accuracy, and personalization for every customer engagement. We believe this is the structural advantage of our end-to-end AI-powered CX platform.

We provide our solution through a software-as-a-service, or SaaS, business model. We generate subscription revenue from our Genius CX Platform and also generate usage-based telephony revenue. We charge our customers monthly subscription fees for access to our Genius CX Platform, primarily based on the number of licenses, as well as on a consumption basis for our AI solutions. Our customers generally purchase both subscriptions and related telephony usage from us. However, a growing number of our customers subscribe to our platform but purchase telephony usage directly from wholesale telecommunications service providers. We offer monthly, annual and multiple-year contracts to our customers, generally with 30 days’ notice required for limited reductions in the number of licenses or the level of consumption. Increases in the number of licenses or the level of consumption can be provisioned almost immediately. Subscription fees are generally billed monthly in advance, while telecom fees are billed in arrears. For the three and nine months ended September 30, 2026, subscription and telecom fees accounted for 93% and 94% of our revenue, respectively. For each of the three and nine months ended September 30, 2025, subscription and telecom fees accounted for 93% of our revenue. The remainder was comprised of professional services revenue from the implementation and optimization of our solution.

Macroeconomic Factors

We are subject to risks and exposures, including macroeconomic challenges resulting from the impact of global tariff changes and announcements regarding same, as well as the impact of current and potential global conflicts. While the implications of macroeconomic challenges on our business, results of operations and overall financial position remain uncertain over the long term, we believe such macroeconomic challenges could have an adverse impact on our revenue in future periods.

Restructurings

On March 31, 2025, our Board of Directors approved a reduction in force plan, or the 2025 Plan, as part of our broader efforts to prioritize investments in key strategic areas, including artificial intelligence, as well as to drive profitable growth and support our positive, long-term outlook and increasing stockholder value. On April 3, 2025, we commenced execution of the 2025 Plan, which resulted in the reduction of our global full-time employees by approximately 4%. During the year ended December 31, 2025, we incurred a total of $7.9 million in cash restructuring costs under the 2025 Plan, primarily consisting of notice period payments, severance payments, employee benefits and related costs, all of which are cash expenditures, of which $1.6 million was recorded in cost of revenue, $1.9 million was recorded in research and development expenses, $3.4 million was recorded in sales and marketing expenses, and $1.0 million was recorded in general and administrative expenses on the consolidated statements of operations and comprehensive income (loss). During the year ended December 31, 2025, we also incurred an additional $2.1 million in stock-based compensation costs related to the 2025 Plan due to additional vesting of share-based awards, of which $0.3 million was recorded in cost of revenue, $0.5 million was recorded in research and development expenses, $1.1 million was recorded in sales and marketing expenses, and $0.2 million was recorded in general and administrative expenses on the consolidated statements of operations and comprehensive income (loss). We do not expect to incur any additional costs under the 2025 Plan.

On April 27, 2026, we initiated a plan to consolidate our corporate headquarters in San Ramon, California by reducing the facility space we occupy from two floors to a single floor in May 2026, or the HQ Plan. The HQ Plan resulted in excess facility space that we intend to sublease. During the nine months ended September 30, 2026, we incurred a total of $8.4 million in impairment charge ($7.4 million related to operating lease right-of-use assets and $1.0 million related to property and equipment) under the HQ Plan, which was recorded in general and administrative expenses on the consolidated statements of operations and comprehensive income (loss). The impairment charge was estimated based on a review and analysis of real estate market conditions, our projected sublease income and sublease commencement assumptions.

During the third quarter of 2026, we approved and initiated an additional reduction in force plan (the "2026 Plan") to align with our CEO's newly established priorities, including building a performance-driven culture, stabilizing and strengthening its core, optimizing operations, and focusing on AI-powered CX. The 2026 Plan resulted in an approximate 3% reduction of our global full-time employees. During the three months ended September 30, 2026, we incurred a total of $4.3 million in cash restructuring costs under the 2026 Plan, primarily consisting of notice period payments, severance payments, employee benefits and related costs, all of which are cash expenditures. As of September 30, 2026, $2.8 million had been paid and the remaining $1.5 million was recorded within Accrued and other current liabilities in the consolidated balance sheets and is expected to be mostly paid during the fourth quarter of 2026. We do not expect to incur any additional costs under the 2026 Plan.

Key GAAP Operating Results

Our revenue increased to $323.3 million and $941.1 million for the three and nine months ended September 30, 2026 from $285.8 million and $848.8 million for the three and nine months ended September 30, 2025. Revenue growth was primarily attributable to our larger customers, driven by an increase in our sales and marketing activities and our improved brand awareness. For each of the three and nine months ended September 30, 2026 and 2025, no single customer accounted for more than 10% of our total revenue. As of September 30, 2026, we had over 4,000 customers across multiple industries with a wide range of license sizes. We had net income of $14.5 million and $36.3 million in the three and nine months ended September 30, 2026, respectively, compared to net income of $18.0 million and $19.7 million in the three and nine months ended September 30, 2025, respectively.

We have continued to make significant expenditures and investments, including in sales and marketing, research and development, infrastructure and, selectively, investments in complementary businesses, technologies and intellectual property rights. We primarily evaluate the success of our business based on revenue growth and the efficiency and effectiveness of our investments. The growth of our business and our future success depend on many factors, including our ability to continue to expand our base of larger customers, grow revenue from our existing customers, innovate and expand internationally. While these areas represent significant opportunities for us, they also pose risks and challenges that we must successfully address, including macroeconomic challenges resulting from the impact of global tariff changes and announcements regarding same, as well as the impact of current and potential global conflicts, in order to successfully grow our business and improve our operating results.