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FIVN Q3 Earnings Call Highlights AI Growth and Level AI Deal
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Key Takeaways
Five9 beat Q3 earnings and revenue estimates, with sales rising 13% year over year to $323.3M.
AI revenues surged 91% to $45 million, while the $325M Level AI deal could accelerate product development.
Five9 raised its 2026 revenue guidance midpoint to $1.272B but cut its non-GAAP EPS outlook to $3.19.
Five9, Inc. (FIVN - Free Report) emphasized accelerating artificial intelligence adoption and its planned $325 million acquisition of Level AI during its third-quarter 2026 earnings call. Management outlined plans to expand its AI capabilities while maintaining growth in its core contact center business.
The company exceeded the Zacks Consensus Estimate for both earnings and revenues, raised its annual AI growth outlook and revised its full-year financial guidance.
FIVN Expands AI Reach With Level AI Acquisition
CEO Amit Mathradas said the acquisition would enable Five9 to offer standalone AI applications to enterprises using competing cloud and on-premises contact center platforms.
Level AI brings customer insights, agent assistance, automated quality management and AI automation capabilities. Mathradas indicated that the acquisition could accelerate Five9's product roadmap by approximately 12 months.
Level AI generated approximately $20 million in annual recurring revenue as of Oct. 31, growing approximately 50% year over year. Management expects similar growth over the next 12 months, excluding synergies.
Five9 Sees AI Adoption Accelerating Across Customers
CFO Bryan Lee reported that AI revenue increased 91% year over year to approximately $45 million, representing 17% of subscription revenues compared with 10% a year earlier.
Lee attributed the acceleration to earlier and larger customer deployments. AI agents contributed the largest revenue ramp, supported by Agent Assist and AI Insights.
Responding to William Blair, Mathradas explained that customers have progressed beyond proof-of-concept testing toward broader implementation. Existing customers are expanding their AI deployments across additional products and use cases.
FIVN Strengthens Its Core Contact Center Business
Mathradas emphasized the Humantic CX strategy, which integrates AI automation with human agents rather than positioning them as competing alternatives.
Management highlighted regulated industries, including financial services, healthcare and insurance, where complex interactions require human judgment and seamless AI-to-human transitions.
CCaaS revenue growth accelerated to 8% from 7% in the preceding quarter. Subscription dollar-based retention improved to 109% from 107%, supported by additional seats and AI deployments.
Five9 Raises Revenue Outlook but Trims Earnings View
Lee raised the midpoint of 2026 revenue guidance by $6 million to $1.272 billion, with an expected range of $1.269 billion to $1.275 billion.
However, the midpoint of non-GAAP earnings guidance declined seven cents to $3.19 per share. Management cited organizational restructuring timing and a higher diluted share count.
Fourth-quarter revenue guidance stands at $328 million to $334 million, with non-GAAP earnings projected between 88 cents and 92 cents per share. The guidance excludes Level AI contributions.
FIVN Reports Better-Than-Expected Earnings and Revenues
Five9 reported third-quarter non-GAAP earnings of 82 cents per share, exceeding the Zacks Consensus Estimate of 80 cents. Earnings increased from 78 cents in the year-ago quarter.
Revenues reached $323.3 million, surpassing the Zacks Consensus Estimate of $318.3 million. The top line increased 13% year over year.
Adjusted EBITDA margin remained at 25.1%. Lee maintained the company's full-year adjusted EBITDA margin outlook of at least 24% and annual cash flow expectation of approximately $175 million.
Five9 Addresses Acquisition Costs and 2027 Growth
Lee indicated that the Level AI acquisition would dilute adjusted EBITDA margin by approximately one percentage point in 2027. Management expects EBITDA-dollar breakeven within approximately six months and margin accretion in 2028.
Responding to Mizuho, Lee described the organic 2027 revenue consensus of $1.39 billion as a reasonable starting point without issuing formal guidance.
During KeyBanc's questioning, Lee cautioned against using remaining performance obligations as a direct revenue forecasting indicator. The metric reached $1.6 billion, increasing 11% sequentially, primarily because a major customer extended its contractual commitment.
FIVN Maintains Focus on Execution and AI Integration
Management's overarching message centered on converting existing customer commitments into revenue while expanding Five9's AI offerings and strengthening its contact center platform.
Mathradas reiterated the importance of integrating human-led and automated customer interactions. The leadership team emphasized disciplined capital allocation and operational improvements as it prepares to integrate Level AI.
What Zacks Rank and Style Scores Indicate for FIVN
Five9 currently carries a Zacks Rank #3 (Hold), indicating a neutral near-term outlook under the earnings estimate revision framework. Its Value Score of B and Growth Score of B reflect favorable characteristics in those categories, while its Momentum Score of C indicates a more moderate momentum profile. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The stock's VGM Score of A reflects a strong combined assessment of value, growth and momentum. However, the Zacks framework generally favors pairing strong Style Scores with a Zacks Rank #1 or 2 (Buy). Five9's current Hold ranking warrants a balanced interpretation, while subsequent earnings estimate revisions following the reported results could change its Zacks Rank.
View the Zacks #1 Rank List
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FIVN Q3 Earnings Call Highlights AI Growth and Level AI Deal
Key Takeaways
Five9, Inc. (FIVN - Free Report) emphasized accelerating artificial intelligence adoption and its planned $325 million acquisition of Level AI during its third-quarter 2026 earnings call. Management outlined plans to expand its AI capabilities while maintaining growth in its core contact center business.
The company exceeded the Zacks Consensus Estimate for both earnings and revenues, raised its annual AI growth outlook and revised its full-year financial guidance.
FIVN Expands AI Reach With Level AI Acquisition
CEO Amit Mathradas said the acquisition would enable Five9 to offer standalone AI applications to enterprises using competing cloud and on-premises contact center platforms.
Level AI brings customer insights, agent assistance, automated quality management and AI automation capabilities. Mathradas indicated that the acquisition could accelerate Five9's product roadmap by approximately 12 months.
Level AI generated approximately $20 million in annual recurring revenue as of Oct. 31, growing approximately 50% year over year. Management expects similar growth over the next 12 months, excluding synergies.
Five9 Sees AI Adoption Accelerating Across Customers
CFO Bryan Lee reported that AI revenue increased 91% year over year to approximately $45 million, representing 17% of subscription revenues compared with 10% a year earlier.
Lee attributed the acceleration to earlier and larger customer deployments. AI agents contributed the largest revenue ramp, supported by Agent Assist and AI Insights.
Responding to William Blair, Mathradas explained that customers have progressed beyond proof-of-concept testing toward broader implementation. Existing customers are expanding their AI deployments across additional products and use cases.
FIVN Strengthens Its Core Contact Center Business
Mathradas emphasized the Humantic CX strategy, which integrates AI automation with human agents rather than positioning them as competing alternatives.
Management highlighted regulated industries, including financial services, healthcare and insurance, where complex interactions require human judgment and seamless AI-to-human transitions.
CCaaS revenue growth accelerated to 8% from 7% in the preceding quarter. Subscription dollar-based retention improved to 109% from 107%, supported by additional seats and AI deployments.
Five9 Raises Revenue Outlook but Trims Earnings View
Lee raised the midpoint of 2026 revenue guidance by $6 million to $1.272 billion, with an expected range of $1.269 billion to $1.275 billion.
However, the midpoint of non-GAAP earnings guidance declined seven cents to $3.19 per share. Management cited organizational restructuring timing and a higher diluted share count.
Fourth-quarter revenue guidance stands at $328 million to $334 million, with non-GAAP earnings projected between 88 cents and 92 cents per share. The guidance excludes Level AI contributions.
FIVN Reports Better-Than-Expected Earnings and Revenues
Five9 reported third-quarter non-GAAP earnings of 82 cents per share, exceeding the Zacks Consensus Estimate of 80 cents. Earnings increased from 78 cents in the year-ago quarter.
Revenues reached $323.3 million, surpassing the Zacks Consensus Estimate of $318.3 million. The top line increased 13% year over year.
Five9, Inc. Price, Consensus and EPS Surprise
Five9, Inc. price-consensus-eps-surprise-chart | Five9, Inc. Quote
Adjusted EBITDA margin remained at 25.1%. Lee maintained the company's full-year adjusted EBITDA margin outlook of at least 24% and annual cash flow expectation of approximately $175 million.
Five9 Addresses Acquisition Costs and 2027 Growth
Lee indicated that the Level AI acquisition would dilute adjusted EBITDA margin by approximately one percentage point in 2027. Management expects EBITDA-dollar breakeven within approximately six months and margin accretion in 2028.
Responding to Mizuho, Lee described the organic 2027 revenue consensus of $1.39 billion as a reasonable starting point without issuing formal guidance.
During KeyBanc's questioning, Lee cautioned against using remaining performance obligations as a direct revenue forecasting indicator. The metric reached $1.6 billion, increasing 11% sequentially, primarily because a major customer extended its contractual commitment.
FIVN Maintains Focus on Execution and AI Integration
Management's overarching message centered on converting existing customer commitments into revenue while expanding Five9's AI offerings and strengthening its contact center platform.
Mathradas reiterated the importance of integrating human-led and automated customer interactions. The leadership team emphasized disciplined capital allocation and operational improvements as it prepares to integrate Level AI.
What Zacks Rank and Style Scores Indicate for FIVN
Five9 currently carries a Zacks Rank #3 (Hold), indicating a neutral near-term outlook under the earnings estimate revision framework. Its Value Score of B and Growth Score of B reflect favorable characteristics in those categories, while its Momentum Score of C indicates a more moderate momentum profile. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The stock's VGM Score of A reflects a strong combined assessment of value, growth and momentum. However, the Zacks framework generally favors pairing strong Style Scores with a Zacks Rank #1 or 2 (Buy). Five9's current Hold ranking warrants a balanced interpretation, while subsequent earnings estimate revisions following the reported results could change its Zacks Rank.