Sentiment Analysis of the earnings transcript to help figure out if there are any bullish or bearish sentiments that could be gathered from it. We're doing ML and AI based analysis on the earnings call to get some more insights.
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| Statement |
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| Leveraging data with AI drives critical improvements for self-service and up-leveling every agent to deliver the optimal customer experience |
| We have the right platform and the right team to capitalize on this long-term and durable growth opportunity |
| So very exciting times |
| Adjusted EBITDA margin for the fourth quarter was 20% of revenue, helping drive a Q4 record for operating cash flow of $37 million, or 15% of revenue |
| And I am so excited about 2024 as we surpass $1 billion in revenue and continue to go after this massive market opportunity ahead |
| We are continuing to see strong momentum upmarket with new logos, as evidenced by our Q4 record in Enterprise bookings |
| In addition, our pipeline continues to grow, hitting another record high |
| We are seeing acceleration at the top of the funnel with Enterprise's strategic RFPs more than doubling year-over-year, which is a strong indicator of our market being at an inflection point |
| They come in at different times and create lumpiness to our numbers because they are so large, but feeling very positive about the future and the opportunity that lies ahead |
| I'm pleased to report that we had a record for enterprise bookings for any Q4 adding to our strong momentum up market as we continue to expand our go-to-market and technology partnerships |
| We've demonstrated our ability to roll those out in a timely and efficient manner and they're referenceable and we feel great about our opportunities going forward |
| And we feel very good about our opportunity and our ability to close those at an unprecedented rate |
| It is very, very consistent and it's -- I would say it's best in class |
| And it does give us the positive of having visibility into a backlog where we can see in the future revenue for several quarters |
| We continue to strengthen our AI leadership in CX by infusing AI throughout our platform |
| So as we enter 2024, we feel very strongly that our go-to-market engine is hitting on all cylinders to take advantage of the massive CX transformation underway, the accelerating migration to the cloud, and the increasing adoption of AI and automation |
| In addition, generative AI is enhancing many other offerings in our AI and automation portfolio, including AI insights and AI summaries, which are gaining meaningful traction |
| They evaluated all of the major CCaaS players and chose Five9 for our superior end-to-end technology solutions as well as our deep vertical expertise and strong references in education and healthcare |
| We believe much of this rapid growth can be attributed to the value we deliver to customers with our leading generative AI capabilities and our successful Try Before You Buy program |
| And we gave the guidance that we would have a positive inflection on the dollar-based retention rate during the course of 2024, just like we said, by the way, for Q4 of 2023 |
| Before I turn it over to Dan, I'd like to say that we remain extremely optimistic about the opportunities in this massive and underpenetrated market |
| We are pleased to report fourth quarter revenue growth of 15% year-over-year |
| We had a record Q4 bookings for Enterprise, and we've had very good quarters from a booking standpoint for the last several quarters |
| The growth that we enjoy clearly demonstratively from AI and automation |
| I -- we knew that going in, but in terms of the actual performance in the quarter, we had very good seat turnouts in Q4 2023, but even better ones from the first strategic account that we ever had, which was the British insurance company, plus FedEx, excuse me, the passive delivery company delivering, going up in Europe |
| I'm pleased to report that we achieved a Q4 record for operating cash flows of $36.5 million, driven in part by continued strength in our DSO performance, which came in at 32 days |
| Starting in 2022, very strong by the fourth quarter of 2022 |
| Fourth quarter revenue grew 15% year-over-year and full-year revenue grew 17% |
| We have now delivered 30 consecutive quarters of positive LTM operating cash flow and we remain optimistic about our potential for continuing cash flow generation given our long-term model, our substantial NOLs and our low DSO |
| For the remainder year, we expect non-GAAP EPS to increase to approximately $0.43 per diluted share in the second quarter and further improve in the second half |
| Statement |
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| When you're looking at those subscription numbers that you correctly cited, that includes the somewhat weaker install base |
| By way of illustration, a number of clients in the consumer discretionary subcategory experienced for the first time since coming onto the Five9 platform, a fourth quarter sequential recurring revenue decline |
| So we actually, and we don't want to sound, how shall I put it, cocky or anything, we're actually not that disappointed with our gross margins given the overall weakness in the revenue that we have been experiencing |
| If you look at the recurring revenue per seat Q4 2022 to Q4 2023, it's down by approximately 3% |
| The --this -- external data, which is a window into our own clear data that we see from our customers on a daily basis, the JPMorgan data for Q1 is actually negative debit and credit card spending |
| I would like to point out that the first quarter non-GAAP EPS is always the weakest of the year and the $0.23 per diluted share quarter-over-quarter decrease is within our historical range of prior first quarter guidance |
| But Enterprise subscription growth has continued to decline, right, which tells me price per seat maybe is declining, which seems at odds with everything that's happening with AI and attach rates |
| We -- externally we provided the JPMorgan Chase debit and credit card spending data, which showed low-single digit nominal growth, which means negative transaction growth, and that was the headwind that we were facing |
| They had been using Avaya which was reaching end-of-life and lacked the innovation to deliver great customer and patient experience |
| This is despite the ongoing macro headwinds on our install base, which slowed growth in our normally seasonally strong consumer vertical |
| Fourth quarter adjusted EBITDA was $48.3 million, representing a 20.2% margin, a decrease of approximately 200 basis points year-over-year, but a quarter-over-quarter increase of approximately 230 basis points |
| And we've just come off of an experience where when you look at our biggest consumer, well, amongst our biggest consumer discretionary customers, in the fourth quarter, for the first time ever, since I came onto the platform, there was a sequential decrease from Q3 to Q4 |
| Because you also mentioned in the prepared remarks that 4Q can be tougher to forecast |
| Just -- maybe just double-clicking on that consumer thing, Barry, I know this has been a headwind |
| There's the moderation in some of the investments we've been making, including in professional services with Fairground, that is coming as a headwind |
| 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 adverse economic conditions, including macroeconomic deterioration and uncertainty, including increased inflation, increased interest rates, supply chain disruptions, decreased economic output and fluctuations in currency exchange rates, lower growth rates within our installed base of customers 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 |
| We expect first quarter non-GAAP EPS to come in at $0.38 per diluted share at the midpoint, a decline of $0.23 per diluted share sequentially |
| So for sure the transactions are meaningfully negative |
| Q4 this year was your weakest revenue beat that I can remember in all the years covering the company |
| In addition, we had a tough compare internationally with a separately strong new lower speeds turn-ups in the fourth quarter of 2022 |
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