Document


UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
 
FORM 8-K
 
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): November 8, 2017
FIVE9, INC.
(Exact name of Registrant as specified in its charter)
 
 
 
 
Delaware
001-36383
94-3394123
(State or other jurisdiction
of incorporation)
(Commission
File No.)
(I.R.S. Employer
Identification No.)
 
 
Bishop Ranch 8
4000 Executive Parkway, Suite 400
San Ramon, California 94583
(Address of principal executive offices and Zip Code)
Registrant’s telephone number, including area code: (925) 201-2000
Not Applicable
(Former name or former address if changed since last report)
 
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
o
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
o
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
o
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
o
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Indicated by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
 
Emerging Growth Company
x
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.   x    






Item 2.02 Results of Operations and Financial Condition.
On November 8, 2017, Five9, Inc. (the “Company”) announced its financial results for the fiscal quarter ended September 30, 2017. The full text of the press release issued in connection with the announcement is furnished as Exhibit 99.1 to this Current Report on Form 8-K.
The information in Item 2.02 of this Current Report on Form 8-K (including Exhibit 99.1 furnished herewith) shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934 (the “Exchange Act”) or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933 or the Exchange Act, except as expressly set forth by specific reference in such a filing.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits
 
Exhibit No.
  
Description
 
 
  





SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 
 
 
 
 
 
 
FIVE9, INC.
 
 
 
 
 
Date: November 8, 2017
 
 
 
 
 
By:
 
/s/ Barry Zwarenstein
 
 
 
 
 
 
 
 
Barry Zwarenstein
 
 
 
 
 
 
 
 
Chief Financial Officer



Exhibit
Exhibit 99.1
https://cdn.kscope.io/4a5d002eef0829144d1909a3c553d72c-five9logoprimaryrgba03a12.jpg
Five9 Reports Record Revenue and Profitability
22% Growth in Total Revenue
36% Growth in LTM Enterprise Subscription Revenue
Record Quarterly Operating Cash Flow of $8.0M
Raises 2017 Guidance for Revenue and Bottom Line
SAN RAMON, CALIF. - November 8, 2017 - Five9, Inc. (NASDAQ:FIVN), a leading provider of cloud-based software for the enterprise contact center market, today reported results for the third quarter ended September 30, 2017.
Third Quarter 2017 Financial Results
Revenue for the third quarter of 2017 increased 22% to a record $50.1 million, compared to $41.0 million for the third quarter of 2016.
GAAP gross margin was 59.1% for the third quarter of 2017, compared to 56.6% for the third quarter of 2016.
Adjusted gross margin was 63.1% for the third quarter of 2017, compared to 61.5% for the third quarter of 2016.
GAAP net income for the third quarter of 2017 was $0.9 million, or $0.02 per diluted share, compared to a GAAP net loss of $(3.9) million, or $(0.07) per basic share, for the third quarter of 2016. Included in the GAAP results for the third quarter of 2017 was a $2.1 million reversal of accrued disputed interest and penalties following a favorable ruling by the Universal Service Administration Company.
Non-GAAP net income for the third quarter of 2017 was $2.6 million, or $0.04 per diluted share, compared to a non-GAAP net loss of $(0.2) million, or $(0.00) per basic share, for the third quarter of 2016.
Adjusted EBITDA for the third quarter of 2017 was $5.2 million, or 10.3% of revenue, compared to $2.7 million, or 6.7% of revenue, for the third quarter of 2016.
GAAP operating cash flow for the third quarter of 2017 was $8.0 million, compared to GAAP operating cash flow of $1.7 million for the third quarter of 2016.
"Our third quarter results exceeded expectations, with revenue growing 22% to a record $50.1 million while we delivered record profitability and cash flow. Our revenue growth continues to be driven by our Enterprise business, which delivered 36% growth in LTM Enterprise subscription revenue. I am also pleased to report that our Enterprise bookings and sales pipeline reached all-time highs. Additionally, for the third consecutive year, Five9 has been recognized as a leader in the Gartner Magic Quadrant for Contact Center as a Service and positioned highest for ability to execute. We believe this continued recognition reinforces our leadership in the market and the value we bring to our enterprise customers. Given our strong business momentum, we are again raising 2017 guidance."
- Mike Burkland, President and CEO, Five9

1


Business Outlook
For the full year 2017, Five9 expects to report:
Revenue in the range of $196.5 to $197.5 million, up from the prior guidance range of $193.5 to $195.5 million that was previously provided on August 3, 2017.
GAAP net loss in the range of $(10.5) to $(9.5) million, or $(0.19) to $(0.17) per basic share, improved from the prior guidance range of $(17.3) to $(15.3) million, or $(0.32) to $(0.28) per basic share, that was previously provided on August 3, 2017.
Non-GAAP net income in the range of $4.1 to $5.1 million, or $0.07 to $0.09 per diluted share, improved from the prior guidance range of $(0.2) to $1.8 million, or $(0.00) per basic share to $0.03 per diluted share, that was previously provided on August 3, 2017.

For the fourth quarter of 2017, Five9 expects to report:
Revenue in the range of $51.7 to $52.7 million.
GAAP net loss in the range of $(2.2) to $(1.2) million, or a loss of $(0.04) to $(0.02) per basic share.
Non-GAAP net income in the range of $1.9 to $2.9 million, or $0.03 to $0.05 per diluted share.

Conference Call Details
Five9 will discuss its third quarter 2017 results today, November 8, 2017, via teleconference at 4:30 p.m. Eastern Time. To access the call (ID 3434541), please dial: 877-440-5807 or 719-325-4842. An audio replay of the call will be available through November 22, 2017 by dialing 888-203-1112 or 719-457-0820 and entering access code 3434541. A copy of this press release will be furnished to the Securities and Exchange Commission on a Current Report on Form 8-K, and will be posted to our web site, prior to the conference call.
A webcast of the call will be available on the Investor Relations section of the Company’s website at http://investors.five9.com/.

Non-GAAP Financial Measures
In addition to disclosing financial measures prepared in accordance with U.S. generally accepted accounting principles (GAAP), this press release and the accompanying tables contain certain non-GAAP financial measures. We calculate adjusted gross profit by adding back the following items to gross profit: depreciation, amortization, and stock-based compensation expense. We calculate adjusted EBITDA by adding back or removing the following items to or from net income (loss): depreciation, intangibles amortization, interest expense, income tax expense (benefit), stock-based compensation expense, extinguishment of debt, non-recurring litigation settlement costs, the reversal of interest and penalties on accrued federal fees, and interest income and other, which consists primarily of non-cash adjustment on investment, interest income and foreign exchange gains and losses. We calculate non-GAAP operating income (loss) as operating income (loss) excluding stock-based compensation expense, intangibles amortization, non-recurring litigation settlement costs, and the reversal of interest and penalties on accrued federal fees. We calculate non-GAAP net income (loss) as net income (loss) excluding stock-based compensation expense, intangibles amortization, amortization of debt discount and issuance costs, extinguishment of debt, non-recurring litigation settlement costs, the reversal of interest and penalties on accrued federal fees, and non-cash adjustments on investment. Non-GAAP financial measures do not have

2


any standardized meaning and are therefore unlikely to be comparable to similarly titled measures presented by other companies. Five9 considers these non-GAAP financial measures to be important because they provide useful measures of the operating performance of the Company, exclusive of factors that do not directly affect what we consider to be our core operating performance, as well as unusual events. The Company’s management uses these measures to (i) illustrate underlying trends in the Company’s business that could otherwise be masked by the effect of income or expenses that are excluded from non-GAAP measures, and (ii) establish budgets and operational goals for managing the Company’s business and evaluating its performance. In addition, investors often use similar measures to evaluate the operating performance of a company. Non-GAAP financial measures are presented only as supplemental information for purposes of understanding the Company's operating results. The non-GAAP financial measures should not be considered a substitute for financial information presented in accordance with GAAP. Please see the reconciliation of non-GAAP financial measures set forth herein and attached to this release.

Forward-Looking Statements
This news release contains certain forward-looking statements, including the statements in the quote from our Chief Executive Officer, including statements regarding Five9’s market position, enterprise bookings, sales pipeline, business momentum, and the fourth quarter 2017 and full year 2017 financial projections set forth under the caption “Business Outlook,” that are based on our current expectations and involve numerous risks and uncertainties that may cause these forward-looking statements to be inaccurate. Risks that may cause these forward-looking statements to be inaccurate include, among others: (i) our quarterly and annual results may fluctuate significantly, may not fully reflect the underlying performance of our business and may result in decreases in the price of our common stock; (ii) if we are unable to attract new clients or sell additional services and functionality to our existing clients, our revenue and revenue growth will be harmed; (iii) our recent rapid growth may not be indicative of our future growth, and if we continue to grow rapidly, we may fail to manage our growth effectively; (iv) failure to adequately expand our direct sales force will impede our growth; (v) if we fail to manage our technical operations infrastructure, our existing clients may experience service outages, security breaches, or other issues, our new clients may experience delays in the deployment of our solution and we could be subject to, among other things, claims for credits or damages; (vi) the markets in which we participate are highly competitive, and if we do not compete effectively, our operating results could be harmed; (vii) if our existing clients terminate their subscriptions or reduce their subscriptions and related usage, our revenues and gross margins will be harmed and we will be required to spend more money to grow our client base; (viii) we sell our solution to larger organizations that require longer sales and implementation cycles and often demand more configuration and integration services or customized features and functions that we may not offer, any of which could delay or prevent these sales and harm our growth rates, business and operating results; (ix) because a significant percentage of our revenue is derived from existing clients, downturns or upturns in new sales will not be immediately reflected in our operating results and may be difficult to discern; (x) we rely on third-party telecommunications and internet service providers to provide our clients and their customers with telecommunication services and connectivity to our cloud contact center software and any failure by these service providers to provide reliable services could subject us to, among other things, claims for credits or damages; (xi) we have a history of losses and we may be unable to achieve or sustain profitability; (xii) we may not be able to secure additional financing on favorable terms, or at all, to meet our future capital needs; and (xiii) the other risks detailed from time-to-time under the caption “Risk Factors” and elsewhere in our Securities and Exchange Commission filings and reports, including, but not limited to, our most recent quarterly report on Form 10-Q. Such

3


forward-looking statements speak only as of the date hereof and readers should not unduly rely on such statements. We undertake no obligation to update the information contained in this press release, including in any forward-looking statements.

About Five9
Five9 is a leading provider of cloud software for the enterprise contact center market, bringing the power of the cloud to thousands of customers and facilitating more than three billion customer interactions annually. Since 2001, Five9 has led the cloud revolution in contact centers, helping organizations transition from legacy premise-based solutions to the cloud. Five9 provides businesses with cloud contact center software that is reliable, secure, compliant and scalable, which is designed to create exceptional customer experiences, increase agent productivity, and deliver tangible business results. For more information, visit www.five9.com.




4


FIVE9, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
 
 
September 30, 2017
 
December 31, 2016
 
 
(Unaudited)
 
 
ASSETS
 
 
 
 
Current assets:
 
 
 
 
Cash and cash equivalents
 
$
63,364

 
$
58,122

Accounts receivable, net
 
17,231

 
13,881

Prepaid expenses and other current assets
 
4,809

 
3,008

Total current assets
 
85,404

 
75,011

Property and equipment, net
 
17,958

 
14,688

Intangible assets, net
 
1,190

 
1,539

Goodwill
 
11,798

 
11,798

Other assets
 
2,365

 
2,203

Total assets
 
$
118,715

 
$
105,239

 
 
 
 
 
LIABILITIES AND STOCKHOLDERS’ EQUITY
 
 
 
 
Current liabilities:
 
 
 
 
Accounts payable
 
$
4,787

 
$
3,366

Accrued and other current liabilities
 
11,967

 
9,604

Accrued federal fees
 
1,146

 
2,742

Sales tax liability
 
1,174

 
1,347

Notes payable
 
486

 
742

Capital leases
 
6,057

 
6,230

Deferred revenue
 
13,699

 
10,047

Total current liabilities
 
39,316

 
34,078

Revolving line of credit
 
32,594

 
32,594

Sales tax liability — less current portion
 
1,207

 
1,476

Notes payable — less current portion
 

 
318

Capital leases — less current portion
 
6,867

 
5,915

Other long-term liabilities
 
959

 
530

Total liabilities
 
80,943

 
74,911

Stockholders’ equity:
 
 
 
 
Common stock
 
56

 
53

Additional paid-in capital
 
212,505

 
196,555

Accumulated deficit
 
(174,789
)
 
(166,280
)
Total stockholders’ equity
 
37,772

 
30,328

Total liabilities and stockholders’ equity
 
$
118,715

 
$
105,239




5


FIVE9, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited, in thousands, except per share data)
 
 
Three Months Ended
 
Nine Months Ended
 
 
September 30, 2017
 
September 30, 2016
 
September 30, 2017
 
September 30, 2016
 
 
 
 
 
 
 
 
 
Revenue
 
$
50,081

 
$
40,982

 
$
144,822

 
$
117,883

Cost of revenue
 
20,497

 
17,790

 
60,741

 
51,164

Gross profit
 
29,584

 
23,192

 
84,081

 
66,719

Operating expenses:
 
 
 
 
 
 
 
 
Research and development
 
6,689

 
6,041

 
20,372

 
17,642

Sales and marketing
 
16,502

 
12,925

 
49,212

 
38,268

General and administrative
 
4,679

 
6,143

 
20,384

 
18,561

Total operating expenses
 
27,870

 
25,109

 
89,968

 
74,471

Income (loss) from operations
 
1,714

 
(1,917
)
 
(5,887
)
 
(7,752
)
Other income (expense), net:
 
 
 
 
 
 
 
 
Extinguishment of debt
 

 
(1,026
)
 

 
(1,026
)
Interest expense
 
(865
)
 
(961
)
 
(2,635
)
 
(3,357
)
Interest income and other
 
118

 
12

 
326

 
(66
)
Total other expense, net
 
(747
)
 
(1,975
)
 
(2,309
)
 
(4,449
)
Income (loss) before income taxes
 
967

 
(3,892
)
 
(8,196
)
 
(12,201
)
Provision for (benefit from) income taxes
 
43

 
(2
)
 
142

 
68

Net income (loss)
 
$
924

 
$
(3,890
)
 
$
(8,338
)
 
$
(12,269
)
Net income (loss) per share:
 
 
 
 
 
 
 
 
Basic
 
$
0.02

 
$
(0.07
)
 
$
(0.15
)
 
$
(0.24
)
Diluted
 
$
0.02

 
$
(0.07
)
 
$
(0.15
)
 
$
(0.24
)
Shares used in computing net income (loss) per share:
 
 
 
 
 
 
 
 
Basic
 
55,310

 
52,708

 
54,579

 
52,078

Diluted
 
59,441

 
52,708

 
54,579

 
52,078




6


FIVE9, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited, in thousands)
 
 
Nine Months Ended
 
 
September 30, 2017
 
September 30, 2016
 
 
 
 
 
Cash flows from operating activities:
 
 
 
 
Net loss
 
$
(8,338
)
 
$
(12,269
)
Adjustments to reconcile net loss to net cash provided by operating activities:
 
 
 
 
Depreciation and amortization
 
6,246

 
6,302

Provision for doubtful accounts
 
66

 
58

Stock-based compensation
 
10,703

 
6,927

Loss on extinguishment of debt
 

 
1,026

Reversal of interest and penalties on accrued federal fees
 
(2,133
)
 

Non-cash adjustment on investment
 
(233
)
 

Amortization of debt discount and issuance costs
 
60

 
221

Accretion of interest
 
16

 
11

Others
 
(50
)
 
(9
)
Changes in operating assets and liabilities:
 
 
 
 
Accounts receivable
 
(3,406
)
 
(2,383
)
Prepaid expenses and other current assets
 
(1,861
)
 
(1,927
)
Other assets
 
71

 
(25
)
Accounts payable
 
1,409

 
1,039

Accrued and other current liabilities
 
1,774

 
2,749

Accrued federal fees and sales tax liability
 
95

 
(90
)
Deferred revenue
 
3,676

 
2,449

Other liabilities
 
131

 
(75
)
Net cash provided by operating activities
 
8,226

 
4,004

Cash flows from investing activities:
 
 
 
 
Purchases of property and equipment
 
(1,809
)
 
(973
)
Increase in restricted cash
 

 
(60
)
Net cash used in investing activities
 
(1,809
)
 
(1,033
)
Cash flows from financing activities:
 
 
 
 
Proceeds from exercise of common stock options
 
3,280

 
4,050

Proceeds from sale of common stock under ESPP
 
1,800

 
792

Proceeds from revolving line of credit
 

 
32,594

Repayments on revolving line of credit
 

 
(12,500
)
Repayments of notes payable
 
(547
)
 
(23,866
)
Payments of capital leases
 
(5,708
)
 
(4,618
)
Payment of prepayment penalty and related fees
 

 
(368
)
Payments for debt issuance costs
 

 
(206
)
Net cash used in financing activities
 
(1,175
)
 
(4,122
)
Net increase (decrease) in cash and cash equivalents
 
5,242

 
(1,151
)
Cash and cash equivalents:
 
 
 
 
Beginning of period
 
58,122

 
58,484

End of period
 
$
63,364

 
$
57,333


7


FIVE9, INC.
RECONCILIATION OF GAAP GROSS PROFIT TO ADJUSTED GROSS PROFIT
(Unaudited, in thousands, except percentages)
 
 
Three Months Ended
 
Nine Months Ended
 
 
September 30, 2017
 
September 30, 2016
 
September 30, 2017
 
September 30, 2016
 
 
 
 
 
 
 
 
 
GAAP gross profit
 
$
29,584

 
$
23,192

 
$
84,081

 
$
66,719

GAAP gross margin
 
59.1
%
 
56.6
%
 
58.1
%
 
56.6
%
Non-GAAP adjustments:
 
 
 
 
 
 
 
 
Depreciation
 
1,310

 
1,580

 
4,426

 
4,700

Intangibles amortization
 
87

 
88

 
263

 
264

Stock-based compensation
 
599

 
357

 
1,608

 
951

Adjusted gross profit
 
$
31,580

 
$
25,217

 
$
90,378

 
$
72,634

Adjusted gross margin
 
63.1
%
 
61.5
%
 
62.4
%
 
61.6
%



RECONCILIATION OF GAAP NET INCOME (LOSS) TO ADJUSTED EBITDA
(Unaudited, in thousands)
 
 
Three Months Ended
 
Nine Months Ended
 
 
September 30, 2017
 
September 30, 2016
 
September 30, 2017
 
September 30, 2016
 
 
 
 
 
 
 
 
 
GAAP net income (loss)
 
$
924

 
$
(3,890
)
 
$
(8,338
)
 
$
(12,269
)
Non-GAAP adjustments:
 
 
 
 
 
 
 
 
Depreciation and amortization
 
1,881

 
2,140

 
6,246

 
6,302

Stock-based compensation
 
3,720

 
2,519

 
10,703

 
6,927

Extinguishment of debt
 

 
1,026

 

 
1,026

Interest expense
 
865

 
961

 
2,635

 
3,357

Interest income and other
 
(118
)
 
(12
)
 
(326
)
 
66

Legal settlement
 

 

 
1,700

 

Legal and indemnification fees related to settlement
 

 

 
135

 

Reversal of interest and penalties on accrued federal fees (G&A)
 
(2,133
)
 

 
(2,133
)
 

Provision for (benefit from) income taxes
 
43

 
(2
)
 
142

 
68

Adjusted EBITDA
 
$
5,182

 
$
2,742

 
$
10,764

 
$
5,477



8


FIVE9, INC.

RECONCILIATION OF GAAP OPERATING INCOME (LOSS) TO NON-GAAP OPERATING INCOME (LOSS)
(Unaudited, in thousands)

 
 
Three Months Ended
 
Nine Months Ended
 
 
September 30, 2017
 
September 30, 2016
 
September 30, 2017
 
September 30, 2016
 
 
 
 
 
 
 
 
 
Income (loss) from operations
 
$
1,714

 
$
(1,917
)
 
$
(5,887
)
 
$
(7,752
)
Non-GAAP adjustments:
 
 
 
 
 
 
 
 
Stock-based compensation
 
3,720

 
2,519

 
10,703

 
6,927

Intangibles amortization
 
115

 
129

 
349

 
384

Legal settlement
 

 

 
1,700

 

Legal and indemnification fees related to settlement
 

 

 
135

 

Reversal of interest and penalties on accrued federal fees (G&A)
 
(2,133
)
 

 
(2,133
)
 

Non-GAAP operating income (loss)
 
$
3,416

 
$
731

 
$
4,867

 
$
(441
)


9


FIVE9, INC.
RECONCILIATION OF GAAP NET INCOME (LOSS) TO NON-GAAP NET INCOME (LOSS)
(Unaudited, in thousands, except per share data)
 
 
Three Months Ended
 
Nine Months Ended
 
 
September 30, 2017
 
September 30, 2016
 
September 30, 2017
 
September 30, 2016
 
 
 
 
 
 
 
 
 
GAAP net income (loss)
 
$
924

 
$
(3,890
)
 
$
(8,338
)
 
$
(12,269
)
Non-GAAP adjustments:
 
 
 
 
 
 
 
 
Stock-based compensation
 
3,720

 
2,519

 
10,703

 
6,927

Intangibles amortization
 
115

 
129

 
349

 
384

Amortization of debt discount and issuance costs
 
20

 
43

 
60

 
221

Extinguishment of debt
 

 
1,026

 

 
1,026

Legal settlement
 

 

 
1,700

 

Legal and indemnification fees related to settlement
 

 

 
135

 

Reversal of interest and penalties on accrued federal fees (G&A)
 
(2,133
)
 

 
(2,133
)
 

Non-cash adjustment on investment
 
(72
)
 

 
(233
)
 

Non-GAAP net income (loss)
 
$
2,574

 
$
(173
)
 
$
2,243

 
$
(3,711
)
 
 
 
 
 
 
 
 
 
GAAP net income (loss) per share:
 
 
 
 
 
 
 
 
Basic
 
$
0.02

 
$
(0.07
)
 
$
(0.15
)
 
$
(0.24
)
Diluted
 
$
0.02

 
$
(0.07
)
 
$
(0.15
)
 
$
(0.24
)
Non-GAAP net income (loss) per share:
 
 
 
 
 
 
 
 
Basic
 
$
0.05

 
$

 
$
0.04

 
$
(0.07
)
Diluted
 
$
0.04

 
$

 
$
0.04

 
$
(0.07
)
Shares used in computing GAAP net income (loss) per share:
 
 
 
 
 
 
 
 
Basic
 
55,310

 
52,708

 
54,579

 
52,078

Diluted
 
59,441

 
52,708

 
54,579

 
52,078

Shares used in computing non-GAAP net income (loss) per share:
 
 
 
 
 
 
 
 
Basic
 
55,310

 
52,708

 
54,579

 
52,078

Diluted
 
59,441

 
52,708

 
58,916

 
52,078


10


FIVE9, INC.
SUMMARY OF STOCK-BASED COMPENSATION, DEPRECIATION AND INTANGIBLES AMORTIZATION
(Unaudited, in thousands)
 
 
Three Months Ended
 
 
September 30, 2017
 
September 30, 2016
 
 
Stock-Based Compensation
 
Depreciation
 
Intangibles Amortization
 
Stock-Based Compensation
 
Depreciation
 
Intangibles Amortization
 
 
 
 
 
 
 
 
 
 
 
 
 
Cost of revenue
 
$
599

 
$
1,310

 
$
87

 
$
357

 
$
1,580

 
$
88

Research and development
 
797

 
182

 

 
547

 
204

 

Sales and marketing
 
1,084

 
2

 
28

 
626

 
27

 
29

General and administrative
 
1,240

 
272

 

 
989

 
200

 
12

Total
 
$
3,720

 
$
1,766

 
$
115

 
$
2,519

 
$
2,011

 
$
129

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Nine Months Ended
 
 
September 30, 2017
 
September 30, 2016
 
 
Stock-Based Compensation
 
Depreciation
 
Intangibles Amortization
 
Stock-Based Compensation
 
Depreciation
 
Intangibles Amortization
 
 
 
 
 
 
 
 
 
 
 
 
 
Cost of revenue
 
$
1,608

 
$
4,426

 
$
263

 
$
951

 
$
4,700

 
$
264

Research and development
 
2,235

 
625

 

 
1,510

 
513

 

Sales and marketing
 
3,236

 
4

 
86

 
1,604

 
78

 
85

General and administrative
 
3,624

 
842

 

 
2,862

 
627

 
35

Total
 
$
10,703

 
$
5,897

 
$
349

 
$
6,927

 
$
5,918

 
$
384


11


FIVE9, INC.
RECONCILIATION OF GAAP NET LOSS TO NON-GAAP NET INCOME – GUIDANCE
(Unaudited, in thousands, except per share data)
 
 
Three Months Ending
 
Year Ending
 
 
December 31, 2017
 
December 31, 2017
 
 
Low
 
High
 
Low
 
High
 
 
 
 
 
 
 
 
 
GAAP net loss
 
$
(2,150
)
 
$
(1,150
)
 
$
(10,488
)
 
$
(9,488
)
Non-GAAP adjustments:
 
 
 
 
 
 
 
 
Stock-based compensation
 
3,914

 
3,914

 
14,617

 
14,617

Intangibles amortization
 
116

 
116

 
465

 
465

Amortization of debt discount and issuance costs
 
20

 
20

 
81

 
81

Legal settlement
 

 

 
1,700

 
1,700

Legal and indemnification fees related to settlement
 

 

 
135

 
135

Reversal of interest and penalties on accrued federal fees (G&A)
 

 

 
(2,133
)
 
(2,133
)
Non-cash adjustment on investment
 

 

 
(233
)
 
(233
)
Non-GAAP net income
 
$
1,900

 
$
2,900

 
$
4,144

 
$
5,144

GAAP net loss per share, basic and diluted
 
$
(0.04
)
 
$
(0.02
)
 
$
(0.19
)
 
$
(0.17
)
Non-GAAP net income per share:
 
 
 
 
 
 
 
 
Basic
 
$
0.03

 
$
0.05

 
$
0.08

 
$
0.09

Diluted
 
$
0.03

 
$
0.05

 
$
0.07

 
$
0.09

Shares used in computing GAAP net loss per share and non-GAAP net income per share:
 
 
 
 
 
 
 
 
Basic
 
56,000

 
56,000

 
55,000

 
55,000

Diluted
 
60,300

 
60,300

 
59,300

 
59,300




12


Investor Relations Contact:

Five9, Inc.
Barry Zwarenstein
Chief Financial Officer
925-201-2000 ext. 5959
IR@five9.com

The Blueshirt Group for Five9, Inc.
Lisa Laukkanen
415-217-4967
Lisa@blueshirtgroup.com



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