What happened

Shares of Five9 (FIVN 3.25%) jumped Friday after the cloud-based call center software company reported strong results for the second quarter that handily beat analysts' expectations. As of noon ET, Five9 stock was up by 13%.

So what

In Q2, Five9's revenue grew by 32% year over year to $189 million -- a quarterly record. Analysts' consensus expectation had been significantly lower. So were the expectations of Five9's own management: The top of its guidance range had been $180 million. That solid growth at a time when many tech companies are reporting sharp sales declines was enough to bring cheer to Five9 investors Friday.

Five9's profit margins did take a slight hit in Q2: Its gross margin came in at 53.4% compared to 55.2% a year earlier. And the company had negative operating cash flow of $3.1 million compared to positive operating cash flow of $11.4 million in the prior-year period.

Still, Five9's bottom line was close to breakeven, which was better than a lot of other growth stocks have been reporting. And its profitability was better than expected, which doubtless bolstered investors' moods.

Now what

When growth companies are losing money, I like to look at their cash flow statements to uncover why. In Q2, Five9's research and development spending was up 42% year over year, and its sales and marketing outlays were up 39%. The growth of both of these costs exceeded its revenue growth, which is something investors should pay attention to. But spending on these items could also directly grow Five9's business, which is something investors want to see.

By comparison, Five9's general and administrative expenses (i.e., its corporate overhead) were up by just 4%. To me, this signals fiscal discipline on management's part. It's spending where it needs to spend to grow the business and is exercising restraint elsewhere. That's commendable.

Five9 also raised its outlook for 2022, guiding for revenue in a range of $780.5 million to $782.5 million. Previously, management had forecast revenue of $773 million for the year.

In short, things are looking good for Five9, and it's understandable why the stock rose in the wake of this quarterly report.