Leading conferencing and collaboration company Five9 revealed outstanding results for quarter 4 of 2018 recently. According to Rowan Trollope, CEO of the brand, Five9 ended 2018 with their strongest ever quarter. Revenue had increased to $72.3 million, a boost of 31% year-over-year. Five9 also experienced an adjusted EBITDA of $16.4 million, with a 22.7% margin.
Rowan believes that one of the stand-out areas for Five9 this year has been in their ability to serve a more extensive selection of large enterprise customers. The enterprise business for Five9 grew to 77% of LTM revenue in the last quarter, and the enterprise subscription business grew at a rate of 36% on LTM too. Currently, customers with over $1 million in ARR are one of the fastest-growing elements of the Five9 business. The number of clients with this spending potential has doubled in the last 2 years.
Five9 Embrace a Powerful Position for Growth
While enterprise sales and success are a big part of Five9’s success for this year, it’s also worth noting their potential from a customer experience perspective. Trollope said that Five9 is very well positioned to capitalise on the growing demand for advanced customer experience solutions. The Five9 brand has access to more than 5 billion of customer conversations captured across multiple platforms each year. Combined with advancements in speech recognition and machine learning tools, this puts Five9 in an excellent place to start delivering actionable insights to its customers.
Five9 is also making progress with customer retention, with dollar-based retention accelerating at 103%. Dan Burkland announced that he was very proud of the Five9 team for incredible execution over Q4. He also announced that enterprise bookings had hit an all-time high for the company and that Five9 had seen strong traction with partners, who influenced 55% of all deals.
Crucial Financial Figures from the Q4 Results
Some of the most critical figures released as part of the Q4 earnings report for Five9 include:
- Revenue grew 31% year over year
- Enterprise subscription revenue was the fastest-growing part of the business, increasing by 36% year over year.
- Enterprise business made up 77% of LTM revenue
- Commercial company saw year-over-year growth of 10%
- Recurring revenue accounted for 93% of all income.
- Adjusted gross margins were 65.1% (Adjusted gross margins have increased every quarter for the last 24 quarters)
- Adjusted EBITDA was $16.4 million – 22.7% increase (Adjusted EBITDA has grown every quarter for the previous 21 consecutive quarters)
- GAAP net income was 3.7 million
- Non-GAAP net income was $14.5 million
For the full year ending on the 31st of December 2018, Five9 revenue increased by 29% year-over-year, to $257.6 million. Adjusted EBITDA for the year was $46.4 million. For 2019, Five9 expects income to be in the range of between $298.5 million and $301.5 million.
Both Rowan and Dan expressed their pride at the exceptional performance achieved by the Five9 team over the last quarter and the whole of the 2018 financial year. To find out more about the Five9 results, visit the transcript for the announcement call here.
