Five9 Falls Almost 16% Despite Upbeat Q4 Results

Cloud contact center software provider Five9, Inc. (NASDAQ: FIVN) has reported better-than-expected results for the fourth quarter ended December 31, 2021.

However, following the earnings, shares of the company declined 15.7% to close at $87.80 on Wednesday. The decline can be attributed to the muted outlook provided by the company.

Revenue & Earnings

Five9 reported quarterly revenues of $173.6 million, up 36% year-over-year. Further, the figure surpassed the consensus estimate of $165.38 million.

The company reported earnings of $0.42 per share, up 23.5% from the same quarter last year. Also, the figure surpassed the consensus estimate of $0.36 per share.

Five9’s adjusted gross margin during the quarter declined to 62.8% from 66.4% a year ago.

The company’s operating cash flow for the quarter also witnessed a decline from $19.3 million in the prior-year quarter to $8.1 million.

Outlook

For the first quarter of 2022, the company expects to post revenues in the range of $170 million to $171 million against the consensus estimate of $170.6 million. Further, it anticipates earnings between $0.12 and $0.14 per share.

For full-year 2022, Five9 anticipates revenues in the range of $754.5 million to 757.5 million versus the consensus estimate of $748.02 million. The company forecasts earnings of $1.12 to $1.16 per share against the consensus estimate of $1.12 per share.

CEO Comments

The CEO of Five9, Rowan Trollope, said, “Our results were driven by the growing market adoption of our AI and Automation offerings, in addition to the success we have made in our march up market, as prospective enterprise customers turn to Five9 for the reliable and innovative platform we have built as a company. We continue to build out our leadership position while delivering on a massive and barely penetrated opportunity, and we plan to continue investing in key strategic initiatives around AI, product innovation, traction with larger enterprises and global expansion to drive growth in the year ahead.”

Stock Rating

Consensus among analysts is a Strong Buy based on 7 Buys and 1 Sell. The average Five9 price target of $172.14 implies upside potential of 65.3% from current levels. Shares have declined 42.7% over the past year.

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