Call center software provider Five9 (NASDAQ: FIVN) will be reporting results tomorrow afternoon. Here's what to look for.
Five9 beat analysts' revenue expectations by 2.9% last quarter, reporting revenues of $247 million, up 13.1% year on year. It was a mixed quarter for the company, with a decent beat of analysts' billings estimates but full-year revenue guidance missing analysts' expectations.
Is Five9 a buy or sell going into earnings? Read our full analysis here, it's free.
This quarter, analysts are expecting Five9's revenue to grow 10% year on year to $245.1 million, slowing from the 17.7% increase it recorded in the same quarter last year. Adjusted earnings are expected to come in at $0.44 per share.
The majority of analysts covering the company have reconfirmed their estimates over the last 30 days, suggesting they anticipate the business to stay the course heading into earnings. Five9 has a history of exceeding Wall Street's expectations, beating revenue estimates every single time over the past two years by 2.9% on average.
Looking at Five9's peers in the productivity software segment, some have already reported their Q2 results, giving us a hint as to what we can expect. RingCentral delivered year-on-year revenue growth of 9.9%, beating analysts' expectations by 1.1%, and Pegasystems reported revenues up 17.7%, topping estimates by 8.1%. RingCentral traded up 5.4% following the results while Pegasystems was also up 12.7%.
Read our full analysis of RingCentral's results here and Pegasystems's results here.
Stocks--especially those trading at higher multiples--had a strong end of 2023, but 2024 has seen periods of volatility. Mixed inflation signals have led to uncertainty around rate cuts, and while some of the productivity software stocks have fared somewhat better, they have not been spared, with share prices down 4.8% on average over the last month. Five9 is down 3.9% during the same time and is heading into earnings with an average analyst price target of $76.9 (compared to the current share price of $40.19).
Today’s young investors won’t have read the timeless lessons in Gorilla Game: Picking Winners In High Technology because it was written more than 20 years ago when Microsoft and Apple were first establishing their supremacy. But if we apply the same principles, then enterprise software stocks leveraging their own generative AI capabilities may well be the Gorillas of the future. So, in that spirit, we are excited to present our Special Free Report on a profitable, fast-growing enterprise software stock that is already riding the automation wave and looking to catch the generative AI next.