Cloud-based contact center specialist Five9 (NASDAQ:FIVN) has been well positioned in 2020 as companies look for ways to better connect with customers virtually. "With the acceleration in digital transformation the contact center has emerged as the new front door for many businesses," said Five9 CEO Rowan Trollope in a statement to The Motley Fool. 

While Five9 demonstrated in its second quarter that it was taking advantage of invigorated interest in cloud-based contact center adoption amid the peak of coronavirus-related lockdown orders, the company's strengths were highlighted even more in Q3. Revenue growth accelerated significantly during the period, with the software-as-a-service company reporting record year-over-year and sequential revenue growth rates.

Here's a closer look at Five9's strong third quarter.

A diagram showing laptops connected to a cloud.

Image source: Getty Images.

Strong growth across the board

Five9's third-quarter revenue jumped 34% year over year to $112.1 million. This handily beat analysts' average estimate for revenue of $101.1 million. Fueling the quarter's growth was a 35% year-over-year increase in trailing-12-month enterprise subscription revenue.

Highlighting Five9's accelerating revenue growth, the company's top line grew by 28%  and 29% in the first and second quarter of 2020, respectively.

Though Five9 is still losing money on a GAAP basis as management invests aggressively in the growth opportunities in front of it, it's generating substantial operating cash flow. Operating cash flow was $22.8 million in Q3.

Non-GAAP earnings per share jumped from $0.20 in the year-ago period to $0.27. Further, the scalability of Five9's business model was showcased by the company's expanding non-GAAP gross profit margin. This key profitability metric widened from 64% in the third quarter of 2019 to 65.4%.

More robust growth ahead

Management appears as excited as ever about the future.

"Our opportunity is accelerating as the on-premises to cloud transition and digital transformation mega trends driving our market gain momentum," Trollope told the Fool. "To capitalize on our strong positioning, we are executing like clockwork on our strategic go-to-market and product innovation initiatives."

Trollope importantly noted that the Five9's recently announced pending acquisition of intelligent virtual agent (IVA) platform Inference Solutions bolsters the company's artificial intelligence solutions. The acquisition is expected to close no later than Jan. 5, 2021. 

Given Five9's strong business momentum and management's optimistic outlook, it wasn't surprising to see the company raise its full-year outlook for its top and bottom lines. Management now expects full-year revenue between $421.5 million and $422.5 million, up from a previous forecast for revenue between $399 million and $401 million. Further, Five9 guided for non-GAAP earnings per share between $0.87 and $0.88, well ahead of its previous outlook for $0.77 to $0.80.

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