Five9 Inc at Canaccord Genuity Growth Conference Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: DJ Hynes - Canaccord Genuity - Analyst : All right, lots unpack I'm going to get right into it, if you will skip the business intro part. I think everyone's familiar at this point. Let's talk about Q2 results, what's top of mind coming out of the quarter, one of investor questions focused on kind of give us your view of where the business stands today and kind of the setup for the second half.

Question: DJ Hynes - Canaccord Genuity - Analyst : Good, it's an important message to get across, Barry I want to dig in on the guidance with you, I felt like how you guys were positioning the guidance for the year. It was a lot of the second half re-acceleration was coming out of backlog implementations. It sounds like nothing has really changed there. We're on track with the big implementations. The other piece was the seasonal piece, which I understand isn't playing out and then it was positioned like and there's a small amount of Q2 go get that we need to get to hit our numbers. Obviously, we the go-get didn't transpire in the quarter, but it led to a $40 million cut to the second half, which surprised me the magnitude of it surprised me. So walk through the puts and takes of those three pieces and kind of how it shaped your view of guidance for the rest of the year.

Question: DJ Hynes - Canaccord Genuity - Analyst : I want to revisit a question I asked on the earnings call, which is and I think it's probably the most important thing to the stock at this point, does it feel like the revenue growth reacceleration? Has this been pushed out or does it or the recent execution kind of call into question that it actually happens at some point.

Question: DJ Hynes - Canaccord Genuity - Analyst : What's hit on the execution in Q2, the bookings side of the business? I mean the question I was getting like is this macro is this Five9 driven others are pointing to competitors in the space that are growing faster, which would lead you to think that maybe Five9 is losing share. How would you respond to that comment?

Question: DJ Hynes - Canaccord Genuity - Analyst : Good, it's useful. Expanding the scope and the competitive dynamic question. There's been some lower price entrants in this space, whether it's the UCaaS vendors or Microsoft making some noise and those folks been disruptive to sales processes. Are you seeing them show up in RFPs? How do you think about Microsoft as a player in this space?

Question: DJ Hynes - Canaccord Genuity - Analyst : Yeah, it's a good segue. Let's talk about AI, maybe an intentionally open ended question. I know how you're going to answer it, but we'll give more get more color from you. Is AI good thing or a bad thing for the CaaS vendors?

Question: DJ Hynes - Canaccord Genuity - Analyst : Yeah. How would you say Five9's AI strategy differentiates from others in the space? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. AUGUST 14, 2024 / 12:30PM, FIVN.OQ - Five9 Inc at Canaccord Genuity Growth Conference

Question: DJ Hynes - Canaccord Genuity - Analyst : Yes. The question I get asked a lot around AI is like the future of agency count. Do we see compression in seats driven by AI? You alluded to some of the economics. Does that evolution call into question like traditional pricing models in the space that are seat-based? Like do you see that evolving towards more of a usage-based model or how does this all play out if we look forward three years, five years?

Question: DJ Hynes - Canaccord Genuity - Analyst : Yeah, one more on AI and then we can move to different topics, but how much of AI usage today is kind of human in the loop use cases versus fully autonomous AI running? I'm just trying to think about how quickly contact center operators are kind of lifting the guardrails and laying AI really run.

Question: DJ Hynes - Canaccord Genuity - Analyst : Let's transition and talk about Acqueon a little bit. You guys announced an acquisition during the quarter. I feel like I got lost and some of the noise and the changes in the numbers. Maybe just talk about from a strategic standpoint how it fits into the strategy, what they do and kind of what the go-forward plans for that business are?

Question: DJ Hynes - Canaccord Genuity - Analyst : Is there a cross sell opportunity in the base that you're excited about? Or is it more about kind of landing new customers?

Question: DJ Hynes - Canaccord Genuity - Analyst : Can you step back and kind of assess the pipeline in general, not just Acqueon related as we go into the second half here, like what are you seeing and what's the confidence level that we can see improved bookings outcomes in Q3, Q4 that set us up for '25?

Question: DJ Hynes - Canaccord Genuity - Analyst : Okay. And maybe I'll pause and see if there's any questions in the room. I have a couple more we can finish up with, but there's anything from the audience. Maybe I'll just repeat it for the webcast. The question was around from the seasonal pressures, what verticals is it happening in how accurate are those folks with predicting kind of the pressure that their businesses are facing?

Question: DJ Hynes - Canaccord Genuity - Analyst : Barry, with the slower growth outlook, you also kind of committed to a sharper focus on margins what does that look like in your view. And I guess I'd be particularly interested in kind of how you intend to close the gap between free cash flow and adjusted EBITDA margins.

Question: DJ Hynes - Canaccord Genuity - Analyst : Okay. We're bumping up against the clock. Maybe any concluding thoughts? I mean, my point of view, if you can get back to the growth rates that you're talking about, the stock is far too cheap, but what's the message you want investors to leave the room with today?

Question: DJ Hynes - Canaccord Genuity - Analyst : Good. It's a great spot to leave it, Mike, very thank you guys, very much.