Five9 Inc at Canaccord Genuity Growth Conference (Virtual) Transcript

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

Question: David E. Hynes - Canaccord Genuity Corp., Research Division - Analyst : Awesome. All right. So Rowan, you guys just knocked it out of the park again. Another strong quarter, accelerating growth, nicely profitable. Maybe just to kick things off, can you give us kind of a high level recap of the quarter and talk about what you're seeing in the markets?

Question: David E. Hynes - Canaccord Genuity Corp., Research Division - Analyst : Yes. All cylinders, not a whole lot to pick at. Let's talk about the demand environment. So I think in March and April, there was this rush for work-from-home enablement. And that's obviously a driver for cloud adoption. I think you guys benefited some with maybe expanded seats. I guess now that folks have kind of figured out their near-term strategies, do you still feel a sense of urgency in the market? Or are the conversations really more kind of longer-term strategic projects that are driving your growth? It kind of gets at the question of like pull-forward versus just a broader acceleration in what's happening in the space.

Question: David E. Hynes - Canaccord Genuity Corp., Research Division - Analyst : Yes. Yes. Is -- the on-premise guys who kind of figured out a workaround to get their agents home, does that buy them a little bit more life? Like is it now like a little harder to displace them because they've kind of rejigged their environment?

Question: David E. Hynes - Canaccord Genuity Corp., Research Division - Analyst : Yes. Yes, makes sense. Okay. Let's talk about the channel expansion. Let's start with the global SIs, then we can talk about the 2 newer opportunities. So who are your key partners on that front? What was the catalyst to getting them to like really buy in? And then what are they doing for Five9

Question: David E. Hynes - Canaccord Genuity Corp., Research Division - Analyst : Yes. Let's talk about kind of more strategic partners. And I think AT&T is probably the biggest opportunity. Maybe the back story on like that relationship -- how that came to be, how long you've been working on it -- would be interesting. And then I'm curious kind of what you're seeing in the channel today? And then what you think it could look like down the line?

Question: David E. Hynes - Canaccord Genuity Corp., Research Division - Analyst : Yes. And you touched on this a bit, but the investments needed to kind of support them. Like where are we in that process, enabling that channel?

Question: David E. Hynes - Canaccord Genuity Corp., Research Division - Analyst : Yes. Okay. So then you alluded to the CDW in Q2. And you can comment on that, but my question is, I'm more interested in kind of the partner philosophy in general? Like are there more opportunities like the CDWs out there? Or are the interests -- are your interests more in securing kind of a few key partners and then going really deep with them, right? So it's almost like the quantity versus quality question and kind of how you try and run that channel?

Question: David E. Hynes - Canaccord Genuity Corp., Research Division - Analyst : Yes. Yes. Okay. The frequency of large deals seems to be increasing, the really big deals, right? I think you said you had -- was it 2 record deals in the quarter and they fell within like 2 weeks of each other. What's driving that? Is it just enterprise acceptance of the cloud has hit a tipping point? Is it something Five9 specific? Is the channel helping to contribute? Just any color.

Question: David E. Hynes - Canaccord Genuity Corp., Research Division - Analyst : Yes. But remind me, when was that strategic accounts team kind of put together?

Question: David E. Hynes - Canaccord Genuity Corp., Research Division - Analyst : Okay. Yes. So it's -- they're still -- I don't want to say still getting their footing, but maybe there's more to come. Okay. Awesome. Let's talk about the product a little bit, which is, I think, where your heart lies. What do you think have been the biggest changes in the technology in the 2-plus years you've been at Five9?

Question: David E. Hynes - Canaccord Genuity Corp., Research Division - Analyst : Awesome. I want to double click on both of those. So maybe let's start with the AI stuff. Just broadly speaking, I guess, where do you think customers are in terms of readiness to adopt that type of technology? And then it seems to me like maybe your thinking has evolved a bit in terms of kind of what parts of this effort Five9 should own versus partner? Just and maybe I'm misinterpreting, but how should we think about your AI efforts? And then how do you think they could impact the numbers over time, which I know is a harder part of the question to answer?

Question: David E. Hynes - Canaccord Genuity Corp., Research Division - Analyst : And do these feel like '21 revenue contributors, '22 revenue contributors? I'm not going to ask you to quantify, but just like when do you think that we get to a point where they're material enough to matter?

Question: David E. Hynes - Canaccord Genuity Corp., Research Division - Analyst : Barry's smiling. It means he likes your answer. You didn't make any promises that he can't keep. Let's touch on the M&A strategy a little bit. So you talked about Whendu, Virtual Observer. Maybe what did you see in those assets? You said the strategy is working. But any comments just generally on kind of the buy versus build question? Look, I think it's topical for investors, just given the recent convert.

Question: David E. Hynes - Canaccord Genuity Corp., Research Division - Analyst : Yes, makes sense. I'm going to ask one more. We're out of time. Barry, I didn't get to you. I'm sorry. We'll do it next time. But this one came in through the audience. It gets at competitive dynamics a little bit. So any specifics when you compete with a pure Contact Center as a Service competitor versus a combined UCaaS, CCaaS offering? Like do you win -- are your win rates materially different? Like how do those sales processes differ?

Question: David E. Hynes - Canaccord Genuity Corp., Research Division - Analyst : Awesome. Right. Yes. Perfect. Awesome. We're going to leave it there. We're bumping up against our time. Rowan, I always enjoy these conversations. So thank you. Congrats on all the momentum you guys are seeing. Barry, good to see you. I'm sorry we didn't get to talk. We'll do it next time. Thanks, guys.