Five9 Q2 Earnings Drive Buy Rating Despite Leadership Changes

Five9 reported strong Q2 performance with 16% subscription revenue growth, driven by a 42% YoY increase in Enterprise AI revenues. Sales metrics were impressive, with Enterprise AI bookings tripling YoY and total new logo AI bookings doubling. Despite leadership changes, the outlook remains optimistic, supporting a Buy rating from Scott Berg at Needham with a $40 price target.

SAN RAMON, Calif. — Five9, Inc. (NASDAQ:FIVN), the Intelligent CX Platform provider, has reported robust financial results for the second quarter ended June 30, 2025. The company's revenue increased by 12% to a record $283.3 million, compared to $252.1 million in the same period last year [1]. This growth was driven by a 16% increase in subscription revenue, with Enterprise AI revenue accelerating to 42% year-over-year growth, now representing 10% of Enterprise subscription revenue.

The company's GAAP gross margin improved to 54.9% from 53.0% in the prior year, while adjusted gross margin reached 63.0% compared to 60.5% in the previous quarter. Non-GAAP net income for the quarter was $58.3 million, or $0.76 per diluted share, up from $38.9 million in the same period last year [1]. Adjusted EBITDA for the quarter was $67.9 million, or 24.0% of revenue, compared to $41.8 million in the prior year [1].

Five9's operating cash flow for the second quarter 2025 was $35.1 million, up from $19.9 million in the same period last year [1]. The company also reported strong sales execution with Enterprise AI bookings more than tripling year-over-year and total new logo AI bookings doubling [1].

Despite leadership changes, the outlook remains optimistic. Scott Berg at Needham has maintained a Buy rating for Five9 with a $40 price target, reflecting the company's strong performance and growth prospects [1].

References:
[1] https://investors.five9.com/news-releases/news-release-details/five9-reports-record-revenue-283-million-second-quarter