Why Five9 (FIVN) Shares Are Trading Lower Today

Max Juang /
2023/08/08 12:59 pm EDT

What Happened:

Shares of call center software provider Five9 (NASDAQ: FIVN) fell 12.4% in the afternoon session after the company reported second quarter earnings in which its revenue guidance for the next quarter missed analysts' estimates, although non-GAAP EPS guidance was in line. Free cash flow also missed. It seems like the weak revenue guidance was due to continued macro headwinds on the company's Consumer installed base. On the other hand, revenue and earnings per share came in above expectations during the quarter. Gross margin improved. Overall, it was a mixed quarter for the company, with the market likely more worried about the missed guidance for the next quarter. 

Aside from earnings, Five9 announced it acquired Aceyus, an advanced data integration tool for large enterprises to shift to CCaaS (contact center as a service). It is an $82 million all-cash deal, which is expected to close at the end of calendar Q3 and will not contribute materially to 2023 revenue.

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What is the market telling us:

Five9's shares are very volatile and over the last year have had 32 moves greater than 5%. But moves this big are very rare even for Five9 and that is indicating to us that this news had a significant impact on the market's perception of the business. 

The previous big move was three months ago, when the stock gained 7.98% on the news that the company reported an impressive 'beat and raise' first-quarter results that beat analysts' estimates for revenue, free cash flow, and earnings per share (EPS). Revenue and EPS guidance for the full year was raised and exceeded expectations. Guidance for the next quarter also beat. Management was also upbeat about the outcome of investments in international expansion as LTM international revenue grew 48% year-over-year. Overall, the Q1 results paint a positive picture of a healthy quarter for the company.

Five9 is up 1.55% since the beginning of the year, but at $70.77 per share it is still trading 40% below its 52-week high of $118.02 from August 2022. Investors who bought $1,000 worth of Five9's shares 5 years ago would now be looking at an investment worth $1,650.

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