Five9's Q1 2025 Earnings Call: Unpacking Key Contradictions in Sales Cycles, AI Growth, and International Revenue Challenges
Friday, May 2, 2025 7:32 pm ET
2min read Sales cycle length and impact on revenue, AI adoption and customer ROI, subscription revenue growth, sales cycle and deal slippage, and impact of international resistance on revenue are the key contradictions discussed in Five9's latest 2025Q1 earnings call.
Revenue and Subscription Growth:
- Five9 reported revenue growth of 13% year-over-year for Q1 2025, with subscription revenue contributing 80% of total revenue and growing 14% year-over-year.
- The growth in subscription revenue was driven by strong Enterprises subscription revenue, which grew 20% year-over-year.
Operational Efficiency and Profitability:
- Five9 achieved an adjusted EBITDA margin of 19% for Q1, with an operating cash flow of $48 million or 17.3% of revenue.
- This was driven by disciplined expense management and strong DSO performance.
AI Momentum and Adoption:
- Enterprise AI revenue grew 32% year-over-year in Q1, making up 9% of enterprise subscription revenue and over 20% of enterprise new logo ACV bookings.
- The growth is attributed to real ROI delivered to customers through AI, leading to increased adoption and subscription revenue growth.
Transformational Initiatives:
- Five9 conducted a 4% reduction in its global workforce, impacting most departments, to increase long-term profitability and invest in strategic areas like AI.
- The company aims to improve annual adjusted EBITDA margin by at least two percentage points in 2025 through these initiatives.
Revenue and Subscription Growth:
- Five9 reported revenue growth of 13% year-over-year for Q1 2025, with subscription revenue contributing 80% of total revenue and growing 14% year-over-year.
- The growth in subscription revenue was driven by strong Enterprises subscription revenue, which grew 20% year-over-year.
Operational Efficiency and Profitability:
- Five9 achieved an adjusted EBITDA margin of 19% for Q1, with an operating cash flow of $48 million or 17.3% of revenue.
- This was driven by disciplined expense management and strong DSO performance.
AI Momentum and Adoption:
- Enterprise AI revenue grew 32% year-over-year in Q1, making up 9% of enterprise subscription revenue and over 20% of enterprise new logo ACV bookings.
- The growth is attributed to real ROI delivered to customers through AI, leading to increased adoption and subscription revenue growth.
Transformational Initiatives:
- Five9 conducted a 4% reduction in its global workforce, impacting most departments, to increase long-term profitability and invest in strategic areas like AI.
- The company aims to improve annual adjusted EBITDA margin by at least two percentage points in 2025 through these initiatives.
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