Five9, a leading provider of cloud contact center solutions, has reported an exceptional second quarter for 2025, significantly outperforming analyst expectations and demonstrating robust financial and operational momentum, indicative of strong business growth.
The company announced impressive non-GAAP earnings per share of $0.76, comfortably exceeding the $0.62 analyst forecast. Furthermore, GAAP revenue reached $283.3 million, surpassing estimates of $275.17 million and highlighting the robust demand for its innovative cloud solutions.
A key driver of this remarkable success was the accelerated growth within its Enterprise AI segment, which saw a striking 42% year-over-year increase in revenue. This strategic focus also contributed to Five9 achieving a record adjusted EBITDA margin of 24.0% non-GAAP, alongside improved operating cash flow, reflecting positive Q2 earnings.
In recent years, Five9 has strategically prioritized driving the adoption of its cutting-edge cloud solutions, advancing its Artificial Intelligence capabilities, facilitating digital transformation for clients, and expanding its partner ecosystem. These initiatives are crucial for Five9 to capture greater market share as businesses modernize their customer engagement platforms, solidifying its position among top tech stocks.
Subscription revenue, representing ongoing platform usage, grew by a healthy 16% year-over-year. This growth, coupled with strong uptake of AI and multi-channel features, enhanced both GAAP and non-GAAP gross margins. Disciplined cost controls, including a workforce reduction earlier in the year, also contributed to margin expansion, with savings being reinvested into high-priority areas like AI development and go-to-market strategies for Five9.
Strategic partnerships with major enterprise software providers like Salesforce, Microsoft, ServiceNow, and IBM have significantly expanded Five9’s market reach, leading to successful joint sales, particularly in the financial services, healthcare, and vehicle mobility sectors. However, management noted some caution regarding international growth for the remainder of 2025 due to perceived resistance to U.S. vendors in certain regions.
For Q3 2025, Five9 projects revenue between $283.0 million and $286.0 million, with full-year 2025 revenue guidance remaining prudent at $1.1435 billion to $1.1495 billion. While the company maintains high visibility into its installed customer base, with 93% of incremental recurring revenue expected from existing clients, risks related to international deals, go-to-market execution, and a notable decrease in cash and marketable investments warrant continued monitoring. Continued success in Enterprise AI product adoption and deeper penetration of enterprise clients will be critical for sustained growth.
