Five9 Inc at Evercore ISI TMT Conference (Virtual) Transcript

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

Question: Peter Marc Levine - Evercore ISI Institutional Equities, Research Division - Analyst : Perfect. Right. Yes. That's great. So I'll jump right into it. And I think, first, So yesterday, I had the Avaya management team for fireside chat. They said something to me that stuck out, and it was you really can't be a single product player in this market. You need to be able to kind of show customers that you're a platform or at least you have strategic partnerships to kind of solidify that in which maybe think about, I think, the Mitel, Five9 partnership you announced a couple of weeks ago. So perhaps maybe you can kind of just talk about that strategic multiyear deal you guys signed with Mitel, walk us through how this deal came together and how you think it changes the investment narrative.

Question: Peter Marc Levine - Evercore ISI Institutional Equities, Research Division - Analyst : I think my estimates came a lot like -- I think they own 10% of the market. So I was at 60 million, but we can push up to 70 million. The market is big enough, and I think most of us already know that. But if you think about -- I mean it's a massive opportunity. So kind of walk us through what the go-to-market is. Are there any joint investments that both Mitel and Five9 are contributing? Are your reps -- I mean, are Mitel reps selling pipeline product as well? Or is it just kind of you working with the reps? Just curious, kind of just walk us through what the go-to-market looks like.

Question: Peter Marc Levine - Evercore ISI Institutional Equities, Research Division - Analyst : I mean you talked about -- I mean you kind of talked about my next question was kind of talk about the economics. But I guess, first, a lot of these agreements, there's -- are there any contractual commitments, I think initial contractual commitments or milestones that are set in place for you guys to hit or for them to hit.

Question: Peter Marc Levine - Evercore ISI Institutional Equities, Research Division - Analyst : I have a question that came in. And the question is, why did Mitel decide to go with Five9 versus some of your competitors? Kind of walk us through that competitive bid.

Question: Peter Marc Levine - Evercore ISI Institutional Equities, Research Division - Analyst : Okay. Fair enough. And then final question on the Mitel side and maybe for Barry, when thinking about your Q1, you revised your full year guide on your call. Is there an expectation that we could see contributions from this deal flow into calendar '21 numbers? Or was this more of a calendar '22 story?

Question: Peter Marc Levine - Evercore ISI Institutional Equities, Research Division - Analyst : Okay. And then I guess sticking to the partnership ecosystem thing here. In terms of your partnerships with like CDW, AT&T, and understanding that these are still fairly new. But initially, like what are you seeing in terms of sales cycles compared to some of your more mature partners? Just any feedback from your customers or any color on how those are trending would be great.

Question: Peter Marc Levine - Evercore ISI Institutional Equities, Research Division - Analyst : I wanted to touch upon the relationship you have with Accenture, Deloitte. And obviously, those are always the most, I think, in my view, most strategic partners you can have, right, because they take you a market. It's a note around your business, that's hard to kind of take away. But when thinking about those 2 larger partners or SIs, think -- are they plugging Five9 into -- are they plugging you guys into their broader digital transformation? Or are they actually building dedicated Five9 practice? Kind of walk us through, I think, the dollars that they're investing into your platform and kind of where you see that trending and how that's been going up so far, I think, year-to-date in terms of what they're developing.

Question: Peter Marc Levine - Evercore ISI Institutional Equities, Research Division - Analyst : Sounds good. I think the next topic that I wanted to jump into was virtual agents and automation, and that's been a huge focus area for you all. So I guess the first question, and I guess, I'm painting a broader brush here, but in terms of thinking about -- I look at like the UCaaS side and you look at seats and net prices slightly been coming down, but it's not -- I don't think it's a debate that anyone's going to find here, but when you think about, I think, the durability of maintaining your current price per seat over the longer term, I look at your acquisition of like Inference acquisition and the ability to upsell virtual agents and then obviously comes at a higher ARPU and obviously, a much more touchpoints today than I think you did 12, 24 months ago in terms of automation, but help us kind of understand like I think the ARPU side of the equation with pricing coming down and then with the focus on automation, like how does that balance off, I think, longer term?

Question: Peter Marc Levine - Evercore ISI Institutional Equities, Research Division - Analyst : So good answer. I guess my next question was I think what's holding maybe customers back is thinking about what percentage they're going to automate at what point. But when you think about virtual observer, IVA, bots, voice stream, Agent Assist, what are you doing today that's making it easier for clients or customers to adopt the full suite? Is it just them trying to figure out what they want to automate? Or are there other kind of hurdles? It's still early innings in terms of -- because again, if you look at cloud contact center is still 15%, 20% of the market is only migrated to the cloud. So are we still -- is it still customers or just moving to the cloud first and then it's the stack on automation?

Question: Peter Marc Levine - Evercore ISI Institutional Equities, Research Division - Analyst : And I think the follow-up, just last point on automation, is trying to figure out the best way to kind of word out this question. But I think on your Analyst Day, you called out, if customers that adopt -- I think, adopt the entire suite, I think that you could 2x your ARPU, right? So say it's $400 or up north of $400 a month. So assuming 10 years down the road, if the number of agents get cut in half, right, those -- is that gap of fewer agents to sell into get closed by you? Are you all upselling, I think virtual agents? I was just trying to, I guess, frame out, you're looking out 10, 15 years or something like, what the contact center would look?

Question: Peter Marc Levine - Evercore ISI Institutional Equities, Research Division - Analyst : Okay. I would assume if I think about this 15 years down the road, you and Barry would be long retired, so just in front of you guys. But the other topic I wanted to touch upon was messaging. I think from my coverage of the space, messaging seems to be coming up more and more in my channel conversations. And with that comes like conversational come going after these digital channels. So curious to know what you guys are doing today, better competes or at least provide those kind of offerings to your customers. And really, what's the demand been from your customers, right? With COVID, I'm sure digital is (inaudible) curious about what you're offering today? And what you think you need to be more competitive against some of the porting solutions out there?

Question: Peter Marc Levine - Evercore ISI Institutional Equities, Research Division - Analyst : That's a good question. And then maybe next on conversational commerce. How do you guys define conversational commerce? And when you think about conversational commerce, I look at it, I think on the transactional side, so is there an opportunity, I think, for Five9 to perhaps not say you're going to become a payments platform, but is there a way or is there a discussion internally when you think about conversational commerce messaging that there could be an opportunity for you to monetize some of the transactional flow that runs through your platform?

Question: Peter Marc Levine - Evercore ISI Institutional Equities, Research Division - Analyst : You have a competitive question that came in. How does Five9 compare to LivePerson in terms of workforce automation and AI because obviously, when they talk about it, they speak in similar terms to kind of what Five9 offer. So I'm just curious any color that you can provide on that competitive front of some of the point vendors out there in terms of IVA?

Question: Peter Marc Levine - Evercore ISI Institutional Equities, Research Division - Analyst : Okay. I think the next topic I wanted to touch on was the impact from COVID. And I think the first one was, a question I got on a prior call, which I thought was interesting is, do you expect calendar '21 revenues to be at all -- again, your guidance, obviously, proved this wrong, but if you think REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. JUNE 09, 2021 / 2:15PM, FIVN.OQ - Five9 Inc at Evercore ISI TMT Conference (Virtual) about employees returning to the office, is there somewhat of a headwind in '21 versus '20, meaning that some of these deals aren't as tied to a distributed workforce that we saw last year? And as employees return to the office, is there a potential slowdown? Or -- and kind of how do you -- COVID changing that and employees returning to the office, at least agents going back to call centers.

Question: Peter Marc Levine - Evercore ISI Institutional Equities, Research Division - Analyst : I guess so my final question here, maybe for Barry or Dan, if you want to jump in, but I would say it seems like it's a pretty good set of goal to kind of see durable 20% growth, I think, for the longer term, right? I think you just put up your strongest quarter ever. I think it was 45% of growth, raised your full year guide, trends are definitely in your favor, but what would have to be the offset to that equation? Meaning, what would have to happen? You have to see churn, attrition ticks higher, competitive pressures for the momentum that you're seeing now, like what would have to deviate? And what would have to change for you to deviate from your current path? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. JUNE 09, 2021 / 2:15PM, FIVN.OQ - Five9 Inc at Evercore ISI TMT Conference (Virtual)

Question: Peter Marc Levine - Evercore ISI Institutional Equities, Research Division - Analyst : So I'll take that. So that's good. So with that, I think this is a good place to end. This continues to be a very exciting story. I think execution has been flawless. I think demand shows no sign of slowing down. And then the second tailwinds, I think, around customer engagement going to be any more in your favor. So again, Dan, Barry, thank you for doing this with us and for those that are listening in, thank you for joining. If you want to follow up, just go through to reach out. And again, thank you everyone, and enjoy the rest of your day.