Five9, Inc. (NASDAQ:FIVN) Q3 2019 Earnings Conference Call - Final Transcript

Nov 05, 2019 • 04:30 pm ET


Five9, Inc. (NASDAQ:FIVN) Q3 2019 Earnings Conference Call - Final Transcript


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Good day and welcome to Five9's Third Quarter 2019 Earnings Conference Call.[Operator Instructions]

At this time, I would like to turn the conference over to Lisa Laukkanen. Please go ahead.

Lisa Laukkanen

Thank you, operator. Good afternoon, everyone, and thank you for joining us on today's conference call to discuss Five9's third quarter 2019 results. Today's call is being hosted by Rowan Trollope, CEO; Dan Burkland, President; and Barry Zwarenstein, CFO.During the course of this conference call, Five9's management team will make projections and other forward-looking statements regarding the future financial performance of the company, industry trends, company initiatives and other future events. You're cautioned that such statements are simply predictions, should not be unduly relied upon by investors and actual events or results may differ materially and the company undertakes no obligation to update the information in such statements.These statements are subject to substantial risks and uncertainties that could adversely affect Five9's future results and cause forward-looking statements to be inaccurate. A more detailed discussion of certain of the risk factors that could cause these forward-looking statements to be inaccurate, and that you should consider in evaluating Five9 and its prospects, is included under Risk Factors and elsewhere in Five9's filings with the Securities and Exchange Commission.

In addition, management will make reference to non-GAAP financial measures during this call. Management believes that this non-GAAP information is useful because it can enhance an understanding of the company's ongoing performance. And Five9, therefore, uses non-GAAP financial information internally to evaluate and manage the company's operations. This non-GAAP financial information should be considered along with and not as a replacement for financial information reported under GAAP, and could be different from non-GAAP financial information provided by other companies in our industry. The full reconciliation of the GAAP to non-GAAP financial data can be found in the company's press release issued earlier this afternoon and is also available on the Investor Relations section on Five9's website.

Now I'd like to turn the call over to Five9's CEO, Rowan Trollope.

Rowan Trollope

Thank you, Lisa, and thanks to all of you for joining our call this afternoon. We delivered very strong third quarter results with $83.8 million in revenue, up 28% year-over-year. Increasingly, larger enterprises are demanding cloud contact centers, driving our enterprise subscription revenue to grow 36% on an LTM basis. Our adjusted EBITDA margin was 18%, a decrease of 160 basis points year-over-year reflecting the significant incremental go-to-market and R&D investments we mentioned at the start of the year.

I'll now turn the call over to our President, Dan Burkland to share another great bookings quarter. Dan?

Dan Burkland

Thank you, Rowan. Hello, everyone. Our Q3 enterprise bookings grew strongly year-over-year and once again reached an all-time for any quarter, and our pipeline also reached another all-time high. This quarter, we continue to see larger and larger deals coming in. And more than 60% of the deals were influenced by our ecosystem of partners. And now I'd like to share some key enterprise wins for the quarter, including