Five9 Inc at William Blair Growth Stock Conference Transcript

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

Question: Matthew Alan Stotler - William Blair & Company L.L.C., Research Division - Analyst : Great. Thank you. I appreciate you guys being here. Maybe we can start out, maybe for some people who aren't as familiar with the story, with just a quick introduction to Five9, the markets you serve and the problems you're trying to solve.

Question: Matthew Alan Stotler - William Blair & Company L.L.C., Research Division - Analyst : Thank you. And so how do you think about the size of that market opportunity, right? Because to your point, you have the kind of traditional call center market that needs to be modernized, but there's a lot more to it and there's a lot more that people are investing in to augment traditional customer engagement experience around the contact center. How do you think about that overall market opportunity?

Question: Matthew Alan Stotler - William Blair & Company L.L.C., Research Division - Analyst : Right. Right. Pretty substantial.

Question: Matthew Alan Stotler - William Blair & Company L.L.C., Research Division - Analyst : And so as you think about the landscape there, there's a number of companies that are trying to solve this problem. What do you see as Five9's key differentiators there that provide you a sustainable competitive advantage in the market?

Question: Matthew Alan Stotler - William Blair & Company L.L.C., Research Division - Analyst : Right. Right. And I think in addition to being able to do more advanced things in terms of automating customer engagement or augmenting optimizing agent performance, obviously, in the eventful last couple of years, we've had, I think, COVID has also served to kind of highlight the need for that transition to happen. Would love to maybe just go over what you guys saw in terms of demand trends during COVID? What customers were buying? And now that we're kind of getting into -- lapping that, how is that playing out?

Question: Matthew Alan Stotler - William Blair & Company L.L.C., Research Division - Analyst : Right. And so I think that -- I think probably is well into the obligatory macro question, right? We're looking at a lot of different factors here. There's -- you mentioned the tight labor market, increasing input cost inflation. How do you balance the realities of what that means for the global economy, for the potential for a recession with the fact that in that environment, what you provide has a very -- or is very attractive and provides high value for customers that we also serve? 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 07, 2022 / 6:20PM, FIVN.OQ - Five9 Inc at William Blair Growth Stock Conference

Question: Matthew Alan Stotler - William Blair & Company L.L.C., Research Division - Analyst : Yes. I think it's an interesting topic to think through because especially upmarket, these contact center modernization projects aren't a couple of quarters in terms of duration, these are very long-term projects. But to your point, require a lot of buy-in and dedication. And once you start moving that forward, you're not going to pull back because there's some kind of fluctuations. So that's also been a kind of a key area of focus for you, as you mentioned, is traditionally you played in this 50 to 500 seat kind of segment of the market, but you moved well above that recently and you've got customers in the 5-digit seats range. Maybe we can start with just kind of talking about when you look at that enterprise segment of the market, why is that so attractive for Five9? And what are some of the characteristics that make that really attractive business for you?

Question: Matthew Alan Stotler - William Blair & Company L.L.C., Research Division - Analyst : Right. Right. Yes, I mean, clearly seems to be some strong momentum in that segment of the business that move upmarket. I think that's one of the things you guys have cited behind these 2026 targets that you've put out. We'd love maybe, Barry, if you could just walk through, I guess, the targets themselves, how you're thinking about the path to get there and then how this move upmarket and other factors and kind of strategic growth initiatives gets you there.

Question: Matthew Alan Stotler - William Blair & Company L.L.C., Research Division - Analyst : Right. Super helpful. And I think the point on dollar-based net expansion going from 120 to 126, I think you mentioned a couple of drivers there, but one of them is, as you move upmarket, these are really large opportunities, but they're typically land and expand and how they roll out. So I know it would be helpful to walk through...

Question: Matthew Alan Stotler - William Blair & Company L.L.C., Research Division - Analyst : Right. Right. And so in addition to the move upmarket and user expansion, and you touched on AI being a kind of core area of innovation and expansion, the IVR specifically. Can you just double-click a little bit on the AI portfolio, the product road map for that? And then how meaningful you expect that to be in terms of how it drives or contributes to revenue over time?

Question: Matthew Alan Stotler - William Blair & Company L.L.C., Research Division - Analyst : Right. So changing gears a little bit, so you mentioned a couple of minutes ago in terms of additional growth opportunities. International has been a big focus. I think at this point, it's still less than 10% of revenue, but obviously, there's been a lot of expansion there in recent years. Could you touch on what you're seeing in terms of adoption trends there? How it's similar or different to how you saw things start to roll out in the U.S. and then thoughts on how meaningful that is over time? Obviously...

Question: Matthew Alan Stotler - William Blair & Company L.L.C., Research Division - Analyst : Right. And so maybe we'd like to touch on, we got a few minutes left here. Touch on the competitive environment here. We get a lot of questions around competition, around pricing. I would love to just get an overview, both from differentiating between the opportunity that you and some of your competitors are going after as well as kind of the head-to-head and then kind of the behaviors that you're seeing around pricing and how that's trended over time?

Question: Matthew Alan Stotler - William Blair & Company L.L.C., Research Division - Analyst : Right. And so obviously, all that speaks to buy-in from customers. Maybe we got a minute or so left. Buy-in from partners, right? It's been an area you've really invested in over the past few years. obviously, a market multiplier, but it does seem like we're seeing that buy-in from across the partner ecosystem. I'd love to get an overview of what your initiatives are there and where you see the biggest opportunity?

Question: Matthew Alan Stotler - William Blair & Company L.L.C., Research Division - Analyst : Great. Well, that's it for us. Thank you again, Barry, Dan, for being here, and thank you all for tuning in.