Five9 Shares Drop 22% After Lower Adjusted Earnings Outlook

Five9 reported third-quarter net income of $14.5 million, or 19 cents a share, compared with $18 million, or 21 cents a share, a year earlier. Excluding certain one-time items, earnings were 82 cents a share, ahead of the 80 cents analysts polled by FactSet had expected. Revenue rose 13% to $323.3 million, topping Wall Street’s $319 million estimate.

Chief Executive Amit Mathradas called the results solid, citing accelerating subscription revenue growth and a significant step-up in AI revenue growth.

For the fourth quarter, Five9 forecast earnings of 28 cents to 36 cents a share, or 88 cents to 92 cents on an adjusted basis, with revenue of $328 million to $334 million. Analysts had expected earnings of 36 cents a share, adjusted earnings of 92 cents and revenue of $331.5 million.

The company now expects full-year earnings of 75 cents to 83 cents a share, or $3.17 to $3.21 on an adjusted basis. Its previous adjusted earnings forecast was $3.22 to $3.30 a share; the earlier forecast for earnings was 71 cents to 82 cents a share. Full-year revenue is projected at $1.27 billion to $1.28 billion.