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Five9 Shares Gallop on Record Q2 Top-Line; Earnings Beat

Story Highlights

Five9 shares jumped yesterday on the back of record Q2 revenues. Robust growth in the company’s addressable market continues to drive results.

Shares of cloud contact center software provider Five9, Inc. (FIVN) closed 3.1% higher yesterday and rose a further 10.7% during the post-trading session after the company delivered robust second-quarter numbers.

Revenue jumped 31.3% year-over-year to $189.4 million, outperforming estimates by $9.3 million. Earnings per share (EPS) at $0.34 handily beat estimates by $0.16. Notably, LTM enterprise subscription revenue increased 41% during this period.

Additionally, adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) at $33.1 million came in at a margin of 17.5% as compared to 16.7% in the year-ago period.

FIVN Management’s Comments

The CEO of FIVN, Rowan Trollope, commented, “This growth continues to be driven primarily by the strength of our Enterprise business where LTM subscription revenue grew 41% year-over-year…Despite the macro environment uncertainties, we continued to experience strong growth with second quarter record bookings for both new logos and our installed base.”

He further added, “Given the mission criticality of contact centers and a massive yet barely penetrated TAM, as well as our leading platform, go-to-market machine, and proven execution, we remain confident in delivering durable and profitable growth.”

Driven by these growth metrics, the company raised its full-year 2022 guidance and expects revenue to be between $780.5 million and $782.5 million. EPS is anticipated to range between $1.38 and $1.40.

Analysts’ Take on FIVN

BTIG’s Matthew VanVliet is even more buoyant about FIVN and has reiterated a Buy rating on the stock alongside a price target of $165. This implies a potential upside of 67.72% after the 50% price correction over the past 12 months.

Concurrently, Wall Street has a Strong Buy consensus rating on FIVN alongside an average price target of $134.88, implying a 37.1% potential upside.

Closing Note

FIVN has delivered a robust performance and a strong potential for making further market share gains remains. Along with the Street, hedge funds too are very positive about FIVN. In the last quarter, hedge funds increased holdings in the stock by 1.5 million shares.

Significantly, Keith Meister’s Corvex Management has boosted its FIVN holding by 405.6% to $167.46 million.

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