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Five9 (FIVN) to Report Q2 Earnings: What's in the Cards?

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Five9, Inc. (FIVN - Free Report) is scheduled to report second-quarter results on Aug 2.

In the last reported quarter, the company came up with a positive earnings surprise of 166.7%.  Notably, the company beat the Zacks Consensus Estimate in each of the trailing four quarters, delivering an average positive surprise of 210.4%.

Moreover, revenues of $58.9 million increased 25% from the year-ago quarter and surpassed the Zacks Consensus Estimate of $55 million in the first quarter.

For second-quarter 2018, Five9 expects revenues in the range of $55.8-$56.8 million. The Zacks Consensus Estimate is pegged at $56.45 million, indicating an 18.3% increase from the year-ago quarter.

Five9, Inc. Price and EPS Surprise

Five9, Inc. Price and EPS Surprise | Five9, Inc. Quote

Let’s see how things are shaping up for the upcoming announcement.

Factors to Consider

Five9’s top-line performance is driven by its enterprise business, which now makes up three quarters of the overall revenue mix. Growth in LTM Enterprise Subscription revenues is a tailwind in this regard.

The company’s cloud contact-center software has been witnessing accelerated growth for the past several quarters due to the ongoing digital transformation.

Moreover, strong partnerships in areas like CRM with industry leaders such as Salesforce, Oracle, Zendesk, ServiceNow and Microsoft have enabled it to offer greater flexibility, enhanced experience and cloud-based solutions to consumers. This is likely to generate incremental revenues through increased customer reach.

Additionally, the company’s continued focus on expanding its product portfolio is anticipated to bolster revenue growth.

However, seasonality of the business remains a concern. Further, adjusted gross margin is anticipated to witness a modest decline in the soon-to-be reported quarter, owing to seasonally lower revenues and strong hiring in professional services.

What Our Model Says
According to the Zacks model, a company with a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) has a good chance of beating estimates if it also has a positive Earnings ESP. Zacks Rank #4 (Sell) or #5 (Strong Sell) stocks are best avoided. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Five9 currently carries a Zacks Rank #3 and has an Earnings ESP of -14.29%.

Stocks to Consider

Here are some stocks that you may consider as our model shows that these have the right combination of elements to post an earnings beat in their upcoming releases:

Turtle Beach Corporation (HEAR - Free Report) with an Earnings ESP of +57.14%, and a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.

NetApp, Inc. (NTAP - Free Report) with an Earnings ESP of +1.12% and a Zacks Rank #2.

Avnet, Inc. (AVT - Free Report) with an Earnings ESP of +1.37% and a Zacks Rank #2.

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