Five9, Inc.

Q1 revenue was $305 million, up 9% year over year. Subscription revenue grew 13% year over year, driven by CCaaS revenue growth of 8% and AI revenue growth of 68% to an annual run rate of over $125 million; AI was about 13% of total subscription revenue versus about 8% a year ago. Adjusted gross margin was 64% versus 62% in Q1 last year; adjusted EBITDA was $74 million, or 24% of revenue, versus $53 million, or 19% of revenue last year. Cash from operations was $64 million and free cash flow was $49 million; the company ended the quarter with $724 million in cash, cash equivalents and short-term investments. For Q2, Five9 guided revenue to $303 million to $309 million and non-GAAP EPS to $0.65 to $0.69 per diluted share; management said the largest driver of the sequential EPS decline is a one-time vendor discount that benefited Q1. For full-year 2026, the company guided revenue to $1.254 billion to $1.266 billion and non-GAAP EPS to $3.22 to $3.30, with adjusted EBITDA margin expected to exceed 24% and free cash flow expected to be approximately $175 million. Management also said purchase of PP&E is expected to be about 3.5% of revenue in 2026 due to a global data center refresh.

Amit Mathradas framed the quarter as an encouraging start and said the company is seeing signs that its actions are translating into better performance, citing accelerating subscription revenue growth and production adoption of AI solutions. He emphasized four priorities: building a performance-driven culture, optimizing operations, strengthening the core business, and winning in AI-powered customer experiences. His tone was candid and selective: he stressed accountability, a need to translate strategy into measurable progress, and a belief that Five9 can move from selling seats toward selling a broader platform and consumption-based solution.

Bryan Lee focused on the numbers, highlighting 9% revenue growth, 13% subscription growth, 68% AI growth, 64% adjusted gross margin, 24% adjusted EBITDA margin, and $49 million of free cash flow. He noted that profitability and cash flow margins benefited by slightly more than 1 percentage point from a one-time vendor discount that should not recur. He also said the board approved a new $200 million share repurchase program, while the company expects to finish the remaining $90 million under the current authorization via an accelerated share repurchase by the end of Q3 after buying back $10 million in Q1.

Analysts pressed on how Five9 will measure progress on the CEO’s four priorities, and Amit said investors should watch for clearer articulation of product and market positioning, plus improvements in delivery pace, margin, and growth tied to culture and operating changes. Questions also focused on AI demand, on-prem versus cloud migrations, and whether customers are delaying decisions because AI is changing too quickly; management said customers are increasingly seeking trusted, governed platforms that combine voice, digital, and AI, and that on-prem AI experiments often run into data and architecture limitations. On guidance, Bryan said the full-year increase mostly reflects Q1 outperformance plus visibility from backlog, with the second-half acceleration driven by both new-logo and installed-base bookings already in hand.