Cloud-based contact center solutions company Five9 (FIVN -0.60%) reported its second-quarter results after market closed on Wednesday. The quarterly update highlighted more strong momentum as revenue soared past management's guidance range for the period. In addition, Five9 lifted its outlook for the full year.
Once again, much of the growth was fueled by its enterprise subscription revenue as Five9 kept up its breakneck growth rate from Q1.
Here's a closer look.
Image source: Getty Images.
Robust growth all around
Five9's second-quarter revenue jumped 27% year over year to a record $77.4 million, easily beating management's guidance for revenue of $72 million to $73 million. The figure also came in far ahead of analysts' average forecast for revenue of $72.5 million.
A revenue deceleration apparently wasn't in the cards for Five9, as its 27% year-over-year revenue growth rate was identical to the growth rate the software-as-a-service company achieved in Q1.
Five9 crushed management's guidance for non-GAAP (adjusted) net income to be between $7 million and $8 million during the quarter. The figure came in at $12.3 million, translating to $0.20 per share. Analysts, on average, were expecting non-GAAP earnings per share of $0.12. Five9's bottom line is up significantly from net income and non-GAAP earnings per share of $6.9 million and $0.11 in the year-ago quarter, respectively.
Highlighting the scalability of Five9's business model, its adjusted gross margin expanded from 63.8% in the year-ago quarter to 65%. This is also up sequentially from an adjusted gross margin of 63.4% in Q1.
Management said the quarter was fueled by its strong enterprise business, which saw a 36% year-over-year increase in trailing-12-month subscription revenue.
"Our strong enterprise ecosystem continues to grow, most recently with the announcement of our partnership with Microsoft Teams, further demonstrating our momentum,'" said Five9 CEO Rowan Trollope in the company's second-quarter update.
Looking ahead
With its revenue and adjusted net income coming in well ahead of management's guidance, it's no surprise that the company is revisiting its outlook for the full year.
Five9 now expects full-year revenue to be between $312.5 million and $314.5 million, up from a prior forecast for $304.0 million to $307.0 million. It expects its GAAP loss for the full year to be between a loss of $12 million and a loss of $10 million, with a non-GAAP profit between $44.7 million and $46.7 million. Its forecast for its non-GAAP bottom line is substantially above a previous forecast for non-GAAP net income between $39.3 million and $42.3 million.
For its third quarter, management guided for revenue between $78 million and $79 million, up from $65.3 million in the third quarter of 2018.
