Five9, Inc. (NASDAQ:FIVN) Q2 2022 Earnings Conference Call July 28, 2022 4:30 PM ET

Company Participants

Lauren Sloane - Investor Relations

Rowan Trollope - Chief Executive Officer

Dan Burkland - President

Barry Zwarenstein - Chief Financial Officer

Conference Call Participants

Ryan MacWilliams - Barclays

Meta Marshall - Morgan Stanley

DJ Hynes - Canaccord

Scott Berg - Needham

Terry Tillman - Truist

Taylor McGinnis - UBS

Samad Samana - Jefferies

Jim Fish - Piper Sandler

Peter Levine - Evercore

Michael Turrin - Wells Fargo

Matt Stotler - William Blair

Matt VanVliet - BTIG

Charlie Erlikh - Baird

Mike Latimore - Northland

Lauren Sloane

Thank you for joining us today. On the call are Rowan Trollope, CEO; Dan Burkland, President; and Barry Zwarenstein, CFO.

Certain statements made during the course of this call that are not historical facts, including those regarding the future financial performance of the company, industry trends, company initiatives and other future events, are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements are simply predictions, should not be unduly relied upon by investors. Actual events or results may differ materially and the company undertakes no obligation to update the information in such statements. These statements are subject to substantial risks and uncertainties that could adversely affect Five9’s future results and cause these forward-looking statements to be inaccurate, including the impact of the COVID-19 pandemic, macroeconomic factors and the other risks discussed under the caption Risk Factors and elsewhere in Five9’s annual and quarterly reports filed with the Securities and Exchange Commission.

In addition, management will make reference to non-GAAP financial measures during this call. A discussion of why we use non-GAAP financial measures and information regarding the reconciliation of our GAAP versus non-GAAP results is currently available in our press release issued earlier this afternoon as well as in the appendix of our investor deck and available in the Investor Relations section on Five9’s website at investors.five9.com.

And now, I’d like to turn the call over to Rowan Trollope. Please go ahead.

Rowan Trollope

Thanks, Lauren and thanks to everyone for joining our call this afternoon. I am excited to report strong second quarter results, with revenue growth of 32% year-over-year. Our enterprise business continues to drive this increase, with LTM enterprise subscription revenue, which accounts for over 60% of total revenue, growing at 41%. Adjusted EBITDA for the second quarter was 17.5% of revenue. We expect margins to continue improving in the second half and beyond as we gain share in a large underpenetrated market, while simultaneously consistently generating operating cash flow and maintaining a strong balance sheet.