Inc Earnings Call Transcript

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

Question: David Hynes - Canaccord Genuity Corp - Analyst : Bryan, I'm going to start with you and just what happened in the quarter. I mean, look, Five9 has generally been known for being pretty measured with its guidance. I look at Q1 of this year, you beat the high end by $7.2 million. Q2, you beat it by $7.8 million. This quarter, we're only at the high end of the guidance range. So I guess it begs the question like what changed? What happened in the quarter?

Question: Siti Panigrahi - Mizuho Securities USA LLC - Analyst : I just wanted to ask about this -- your installed base booking. Last quarter, it was record bookings. Again, another quarter of record bookings. Why it's taking so long to translate that to revenue? I understand it takes maybe a couple of quarters. But Bryan, based on your guidance, it appears now a little bit more like a year, like Q2 when we'll start seeing that. Can you help us understand and what can you do to further accelerate that? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. NOVEMBER 06, 2025 / 9:30PM, FIVN.OQ - Q3 2025 Five9 Inc Earnings Call

Question: Andrew King - Rosenblatt Securities Inc - Analyst : Andrew King here on for Catharine Trebnick. Just wanted to double-click on the international really quickly. Good to see that IDC report out. Just wanted to hear what you see your differentiator as over in that market? And how is that BT relationship helping you progress over there?

Question: Connor Passarella - Truist Securities - Analyst : This is Connor Passarella on for Terry. Just wanted to kind of follow up on the Salesforce relationship, particularly on the drivers of the booking strength that you called out there. Is there a way to maybe frame the performance across the two opportunities that you have within that ecosystem being Agentforce and Service Cloud?

Question: Raimo Lenschow - Barclays Services Corp - Analyst : A question from me. If I look into the data -- the call center space, sorry, there's a lot of -- there seems to be -- especially on the higher end, there seems to be still a lot of like on-premise old technology stuff. And I know everyone is focused on AI at the moment, but it does feel almost like we're doing step two before we do step 1. Can you see a little bit what you see in your conversations? Does that kind of -- are people realizing they actually need to move and you guys obviously have been moving kind of higher, you were a cloud vendor from the very beginning. Can you see that in the conversation and in the pipeline?

Question: Elizabeth Porter - Morgan Stanley - Analyst : I was hoping to get an update on just the competitive environment. I think we've seen Zoom up a little bit more in our mid-market checks and Amazon Connect reportedly just crossed $1 billion of ARR. We've seen several splashy headlines around AI native companies. So curious if you're seeing any sort of change in behavior or win rates or buyer dynamics as these players start to get more headlines?

Question: Billy Fitzsimmons, CFA - Jefferies LLC - Analyst : This is Billy Fitzsimmons on for Samad. Obviously, the business is still growing at a good clip. You're adding revenue. You called out record enterprise bookings. If we go back a handful of quarters ago, there was a period where you had a string of kind of several quarters where you announced a variety of mega deals. There's the health care one, the logistics one. And correct me if I'm wrong, but now it's been kind of another handful of quarters since that $50 million ARR financial services deal. And just wanted to get your view on why you think that is. Is there any impact at all from maybe like slower on-prem conversions or maybe even like decision fatigue because of AI? Or is this more just a function? I know there were some sales org changes about a year ago where -- and I'm paraphrasing here, there was more incentivization. You were incentivizing kind of dolphin sized deals over, call it, like the whales. And is it a function of, hey, we're just going after more dolphins now?

Question: Yanni Samoilis - Robert W. Baird & Co Inc - Analyst : Yanni Samoilis for Will Power. So I noticed that Q4 revenue guidance is a $6 million range top to bottom, which is a bit wider than the range that you normally give or guide to for a given quarter. And I was just curious if there's anything that might be driving the wider range of outcomes that you're forecasting there. And then on the flip side, I appreciate the color on your early expectations for 2026. But what's giving you the confidence to comment on next year with that level of precision giving the wider guidance range for Q4? If you could just help juxtapose that for us.

Question: Rishi Jaluria - RBC Capital Markets Inc - Analyst : Nice to see continued AI adoption. Maybe I want to think a little bit one step deeper and think about kind of the current state of enterprise adoption. Look, I get that you have a lot of the tools to be the trusted AI partner in terms of governance and security and data privacy, and you've been a trusted partner with critical data over the years. So I totally understand your positioning. What we've been seeing, and I'd be curious to hear what you're seeing is a lot of enterprises are maybe slowing down the rate of AI adoption as they try to figure out the right use cases and one of those being customer support. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. NOVEMBER 06, 2025 / 9:30PM, FIVN.OQ - Q3 2025 Five9 Inc Earnings Call But maybe just any color you can give in terms of what you're seeing broadly within your base of kind of the state of enterprise AI demand today versus how it had been maybe, call it, six months ago. And as we think going forward, right, getting that greater uptick in AI throughout your customer base, what are things that you have in your power and your control to work with those customers to just kind of get over a lot of those hurdles that are holding back AI demand in the enterprise?

Question: Arjun Bhatia - William Blair Capital Partners - Analyst : Okay. Perfect. Just took some time. Can we just go back to the commercial business for a second? Obviously, it seems like that caught you off guard a bit. What is sort of the remedy? Is it just allocating more sales and marketing spend? And then how do you think that might evolve next year? Like can that get back to growth? Or is that a little bit too ambitious for 2026?

Question: Thomas Blakey - Cantor Fitzgerald LP - Analyst : Just wanted to maybe talk a little bit more about competition. I think there was a question earlier. Just looking at the dynamic growth of some of these conversational names like Sierra and Decagon. I mean, are you seeing these guys currently in the market? Are they disrupting in any way? I think just given the dynamic growth there, I think, we should address that. And just maybe a housekeeping item for Bryan. Was the 5-point headwind from the large customer from 3Q '24 like different from where you implied in the guide? Was it more of a surprise or kind of in line, that will be great?