Five9's Q2 2025: Unpacking Contradictions in AI Revenue, Growth Dynamics, and Strategic Partnerships

AI revenue impact on gross margin, international resistance and impact, AI bookings and growth dynamics, subscription revenue growth guidance, and Salesforce partnership and impact on industry are the key contradictions discussed in Five9's latest 2025Q2 earnings call.



Strong Financial Performance and AI Momentum:
- Five9, Inc. reported a 16% year-over-year growth in subscription revenue, with Enterprise AI revenue growth accelerating to 42% year-over-year in Q2.
- The growth was driven by strong customer demand for AI solutions, increased adoption of Five9's AI capabilities in the healthcare and other sectors, and strategic partnerships with tech giants like Salesforce and Google.

Record Books and Installed Base Expansion:
- The company achieved the highest quarterly total ACV bookings in two years, excluding a financial services mega deal from Q1 of the previous year.
- This was attributed to over triple-digit year-over-year growth in Enterprise AI bookings, with a significant increase in both new logo and installed base bookings, reflecting customer interest in adopting AI solutions.

Profitability and Cost Efficiency:
- Five9's adjusted EBITDA grew 63% year-over-year, reaching an all-time record margin of 24% in Q2.
- The improved profitability was due to operational excellence, cost efficiencies, and strategic initiatives focused on increasing subscription revenue.

Innovation and AI Leadership:
- The launch of Agentic CX with AI Agents and AI Trust & Governance solutions positioned Five9 as a leader in AI-driven customer experience.
- These innovations are designed to provide context-aware, hyper-personalized experiences and enhance AI capabilities, contributing to Five9's competitive advantage in the market.