FIVN - Five9 Inc. (FIVN) Q1 2024 Earnings Call Transcript
2024-05-02 21:46:07 ET
Five9, Inc. (FIVN)
Q1 2024 Earnings Conference Call
May 02, 2024, 04:30 PM ET
Company Participants
Mike Burkland - Chairman and CEO
Dan Burkland - President and Chief Revenue Officer
Barry Zwarenstein - CFO
Conference Call Participants
DJ Hynes - Canaccord
Terry Tillman - Truist Securities
Seth Gilbert - UBS
Ryan MacWilliams - Barclays
Matt VanVliet - BTIG
Siti Panigrahi - Mizuho
Thomas Blakey - KeyBanc
Meta Marshall - Morgan Stanley
Jim Fish - Piper Sandler
Will Power - Baird
Scott Berg - Needham
Michael Turrin - Wells Fargo
Samad Samana - Jefferies
Presentation
Operator
…financial performance and cash position of the company, expected improvements in financial-related metrics, expected ARR from certain customers, certain expected revenue mix shifts, customer growth, anticipated customer benefits from our solution, including from AI company growth, enhancements to and development of our solution, market size and trends, our expectations regarding macroeconomic conditions, company market position initiatives and expectations, technology and product initiatives, including investment in R&D and other future events or results, are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements are simply predictions, should not be unduly relied upon by investors. Actual events or results may differ materially and the company undertakes no obligation to update the information in such statements. These statements are subject to substantial risks and uncertainties that could adversely affect Five9's future results and cause these forward-looking statements to be inaccurate, including the impact of adverse economic conditions, including macroeconomic deterioration and uncertainty, including continuing increased inflation, increased interest rates, supply chain disruptions, decreased economic output and fluctuations in currency exchange rates, lower growth rates within our installed base of customers and the other risks discussed under the caption Risk Factors and Elsewhere, in Five9's annual and quarterly reports filed with the Securities and Exchange Commission.
In addition, management will make reference to non-GAAP financial measures during this call. A discussion of why we use non-GAAP financial measures and information regarding reconciliation of our GAAP versus non-GAAP results and guidance is currently available in our press release issued earlier this afternoon, as well as in the appendix of our investor deck that can be found in the Investor Relations section on Five9's website at investors.five9.com. Lastly, a reminder that unless otherwise indicated, financial figures discussed are non-GAAP.
And now I'd like to turn the call over to Five9's chairman and CEO, Mike Burkland.
Mike Burkland
Thanks Emily, and thanks everyone for joining our call this afternoon. I'm pleased to report strong first quarter results with our subscription revenue growing 20% year-over-year and total revenue exceeding the midpoint of our guidance by three percentage points. As a reminder, our subscription revenue, which others in the industry refer to as cloud revenue, accounts for nearly 80% of our total revenue.
Also, this 20% growth in subscription revenue does not include any benefit whatsoever from customers converting from on-premise to cloud, since we do not have any on premise business and this growth is all organic except for an immaterial amount. Adjusted EBITDA margin for the first quarter was 15% of revenue, helping drive strong LTM operating cash flow of $128 million or 14% of revenue. As you all know, we take a balanced approach to delivering top line growth and bottom line profitability.
I will begin today by discussing our broader market opportunity, which continues to be propelled by three ongoing trends. First, the migration to cloud contact center platforms continues to be a top priority for enterprises, particularly as many on-premise solutions are being end of life.
With current cloud penetration standing at approximately 25% to 30%, we believe there's a multi-year durable growth opportunity ahead. Second, enterprises are laser-focused on improving customer experience, which has become a strategic initiative, aimed at driving better business outcomes. With our intelligent CX platform and our passionate experts, we are changing the game for some of the largest brands in the world and helping them reimagine their customer experience....
Five9, Inc. (FIVN) Q1 2024 Earnings Call Transcript