Five9 Inc Q3 2024 Earnings Call Transcript

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

Question: DJ Hyness - Canaccord - Analyst : Hey guys, good to see you everyone. Congrats on the quarter. Nice results. I'll let others ask about the booking environment. I want to zoom in a little bit on AI, I'm curious for some of your early adopters of AI functionality. What, what's the narrative from those guys today? Are they content working with what they have? Are they looking to go deeper with AI? Are they pulling back on a seat count? Just trying to get an early sense for trends is AI adoption matures in the space.

Question: Michael Turrin - Wells Fargo. - Analyst : Thanks and appreciate taking the question. Nice to see everyone. Mike, at the end of your prepared remarks, you mentioned long-term subscription revenue growth of 20% to 30%. You're sort of towards the lower end of that this quarter and can appreciate, we've been working through a lot of changes in the underlying environment. But just wondering, are you signaling that's a trough? Is that more of a normalized assumption as we roll forward? Just kind of walk us through what you're seeing today versus the aspirational target and what gets you or keeps you in that range?

Question: Meta Marshall - Morgan Stanley - Analyst : Great. Thanks maybe a question for me of just what are you seeing in terms of? I know there was kind of a some pause last quarter on needing to see kind of immediate ROI with investments. And so, you know, have you been able to either see that kind of step down or demonstrate that quicker or kind of give people an entry point that makes that a little bit easier to kind of get to that initial ROI and then just on the completion rates, I know you kind of noted some of those on the virtual side, but just any kind of changes you're seeing with customers and kind of completion rates.

Question: Will Power - Baird - Analyst : Okay, great. Thanks for taking the question. You know, maybe I start from you Barry just thinking about, you know, consumer retail, some of the exposure headwind you've had there. I wonder if you could just kind of update us, you know, what you kind of saw through the Q3 period and what your expectations and visibility are in the Q4 as we head into this, holiday season, presumably based on the guidance, but just kind of what the latest trend lines are.

Question: Will Power - Baird - Analyst : And if I could maybe just one more bit of a follow up on AI and some of the comments in the prepared remarks, I mean, it, I think you indicated you had 50% AI bookings growth in your existing customer base. I think that's probably off the small numbers, but I know this has been one of the big opportunities, right? It feels like a lot of AI a option has been new customers, maybe just talk about, you know, what's helping drive some improvement there to go to market changes and what else is on the horizon to really kind of Upsell that customer base.

Question: Arjun Bhatia - William Blair - Analyst : Perfect. Thank you guys. I appreciate it. And congrats on the nice quarter here. I heard I think in your prepared remarks. And in the presentation that enterprise new logo turn ups were a record in Q3. Can you just maybe touch a little bit on what's driving that? Because I think we've been talking about that for a few quarters now and then would love to hear what else is in the pipeline as you look at kind of the remainder of the year and how that incremental revenue might trend from what you're implementing.

Question: Ryan MacWilliams - Barclays - Analyst : Hey guys, thanks for taking the question. One for Barry and one for Mike. Barry, just how should we think about the Akme on contribution to the four key revenue guide? And then is it fair to streamline that for the rest of next year? And then for Mike AI agents, this seems like a shift from agent assist to like a more proactive approach in terms of like working alongside the customer and potentially doing more outbound or like more expansive use cases. So I guess how do you think that can really help your existing customers? And then how does that look like from a pricing or addition to a contract standpoint for Five9 ? 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 07, 2024 / 9:30PM, FIVN.OQ - Q3 2024 Five9 Inc Earnings Call

Question: Bobby Dee - Truist - Analyst : Great. Thanks for taking the question. Is this is Bobby Dee on for Terry. I wanted to double click on the India data center opening and receiving some important certifications for operating in that market. How are you all sizing up the opportunity there and what are the unlocks associated with that announcement?

Question: Sitikantha Panigrahi - Mizuho Securities - Analyst : Great. Thanks for taking my question. First of all, congratulations on your new executive hire, Chief Product Official and sales great hires. Look, I want to ask question about AI you know that the question we're getting is a lot of investments right now going into start ups on AI and of course you talked about some of the momentum and the AI is your install base. I'm wondering what are you hearing from your customer? Those who are going for, you know AI solution from Five9 versus some of them going after some of this, you know, start up AI where you see the direct use use cases on the customer experience side. How do you differentiate yourself and where do you see the challenges and opportunity there?

Question: Jim Fish - Piper Sandler - Analyst : Hey guys, this is quick on for Jim Fish. Thanks for taking our question. Maybe piggybacking a little bit on that last question. You talked about in those AI bake-offs, you are seeing some more of these point solutions. In terms of the mix, is it increasingly more and more you're competing against the point solutions and the CRM vendors? Or is it predominantly still CCaaS vendors that you're competing against for AI specifically? 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 07, 2024 / 9:30PM, FIVN.OQ - Q3 2024 Five9 Inc Earnings Call And then Barry, just quickly for you, as you look to 2025, how are you thinking about the mix between new and expansion here? Do you need a material kind of improvement in underlying NRR to hit the midpoint? Or are we baking in kind of flat from here?

Question: Samad Samana - Jefferies - Analyst : Hey guys, Billy Fitzsimmons on for some odd Barry maybe expanding on some of the prior questions during last quarter's call. One of the factors cited that that led to the guidance change was that some large deals may be stalled and and maybe CIOs were were citing constrained budgets at the time. First, was there any kind of change since last quarter? I know you kind of commented on that but also second, can you walk us through how maybe some of those particular deals cited last quarter progressed in the third quarter? Did, did most of those deals now close? Are there still conversations or customers still on hold? And then how, how is that kind of reflected in the prelim commentary for 2025?

Question: Michael Funk - Bank of America - Analyst : Great, thank you all for the question. You know, Barry, you've talked a lot about the macro environment but, you know, I love to hear your thoughts on the competitive environment. Are you seeing more competitive pricing pressure, more competitors at the table when you're bidding for a deal? And then finally, are you seeing customers ask for or get price down per seat coming to you asking for concessions or reworking of pricing?

Question: Catharine Trebnick - Rosenblatt - Analyst : Sorry, I was on another call. One of the questions that I had is Verint. Do you have a partnership with Verint? And how is that progressing compared to the one that Ringcentral announced today? And they announced $11 million deal for a voice spot? And how does that play in with what you're working on? Thank you.