Five9 (FIVN) 2 Nov 232023 Q3 Earnings call transcript

[ Audio gap] certain customers customer growth, anticipated customer benefits, company growth, the anticipated benefits from our recent acquisition of Aceyus, enhancements to and development of our solution, market size and trends, our expectations regarding macroeconomic conditions, company market position, initiatives and expectations, technology and product initiatives and other future events are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements are simply predictions, should not be unduly relied upon by investors. 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 these forward-looking statements to be inaccurate, including the impact of adverse economic conditions, including macroeconomic deterioration and uncertainty, including increased inflation, increased interest rates, supply chain disruptions, decreased economic output and fluctuations in currency exchange rates, lower growth rates within our installed base of customers, achieve the intended benefits from the acquisition of Aceyus and the other risks discussed under the caption Risk Factors and elsewhere in Five9's annual and quarterly reports filed with the Securities and Exchange Commission.

In addition, management will make reference to non-GAAP financial measures during this call. press we our financial and in GAAP currently FiveX's in investors.fiveX.com. why regarding and guidance at the of this website Investor available of earlier Relations investor reconciliation versus our in appendix discussion of use well deck measures non-GAAP information is afternoon our A as issued and as the release non-GAAP on results section

the I'd call financial indicated, to Lastly, a like discussed non-GAAP. CEO, to And unless turn and reminder Chairman figures now over are FiveX's otherwise Burkland. that Mike

Adjusted everyone, record million, Thanks, Emily, quarter revenue. quarter third joining and for $XX of by or growing all-time afternoon. this of EBITDA I'm XX% revenue of was of year-over-year. enterprise with to thanks, XX% helping operating third margin for strong for LTM drive our primarily flow XX% an driven revenue our call the report year-over-year, cash revenue, growth pleased subscription results XX%

X you Let me start drive the market. reminding off of confidence continuing this that by in our trends

cases. in are in replacing the or their legacy a we a replace of to solutions urgency center is in contact penetration that cloud less believe on-premise have plans enterprises development some stopped still retrenched reminder and vendors developing even terms greater slowed XX%. of sense First, that Also, on-premise, as than

centers remember of demonstrated And our contact the enhance ARR cut source $X clearly costs experience, automation and rate that attach differentiation. for to initiatives important greater the becoming focus than quarter. mission-critical and to are million-plus AI by customer Second, enterprises XX% In as is of are third, area to more shift digital revenue. in an this pursuing even loyalty enterprises, companies an deals context, transformation enthusiastically is catalyst for systems, brand on increase cloud. AI a are which

expansion. X march discuss market to international like the platform, our for main up namely, and business, drivers our our I'd growth Now our

our platform. with start me Let

As closed the Aceyus we you recall, acquisition. in August,

in significant has as the over period in have opportunities XX% Aceyus pipeline the momentum Aceyus short of We increased solution time. very experienced with of the number this

reminder, market. As $X us up our is million-plus march continued a ARR giving in strength for our a customers, Aceyus fit

opening several example, although it's days. For for XXX early Fortune doors still deals, they're

A innovation to AI and portfolio, centered good as around result seeing be of portion we of this significant our continues are innovation. our a automation and traction

professional For team worked XXX more deployments example, services on than AI during the our quarter.

Agent by our for bookings Assist summaries year-over-year, AI customer Additionally, XXX% our trials. increased driven product

manner. clear our our deliver It's directly AI customers. tenets, should to tied approach beliefs including that is that real, to our available practical ethical should AI tangible continues This engine-agnostic, across value to to core remain AI democratized and platform, our all applied and customers, and in AI be a our be AI responsible that that that should should to AI available be

And like booking see focus to pleased our report up and now million-plus that to market to international march I'm continue momentum I'd up on strong deals. expansion. market ARR we $X and

that XX% more million-plus our revenue. pleased in QX. pipeline our recurring also $X a As report customers strategic reminder, I'm year-over-year up to than ARR doubled for deals make of

we XX% had and addition, sequentially. year-over-year in In increased which and strategic XX% of the third number RFPs quarter, a record enterprise

such are a integrating with as and FiveX offers integrated ITSM Microsoft, and complementary SIs, very their partner, dedication has being driven with our expanded that ever-growing global to up ServiceNow, pleased with solutions us are their along common a AI relationship tightly others. amongst technology solutions. watsonx our large march This share international market global continued partner, their is reselling expansion and Salesforce, partners we with with IBM Google of to This leading and also a increasingly and model network CRM as as by and I'm SI our as FiveX.

have as a IBM, to of TELUS a established strategic and We key few. the global Accenture, ourselves International, name help Deloitte like brand BT, with partners now

not built new with, with. of also to our build is recruiting the EMEA This in with approach strategy key growing and deliver partnership that within was only of partners, and on Our led methodology but sell XX% empowering on partners QX. X bookings enabling drivers our

success services. platform managed in In logo incremental implement addition, FiveX celebrated and on a other wins with solutions partner million their part of who over management quarter. ability enterprise for our with largest U.S. new X ACV service in has provider the past and customer quarter their $X years is been Their built to integrated their the added several

leading further is channel CCaaS the Talaris, [ ScanSource, #X FiveX X their Intelisys supplier. as and distributors in in validated the recognizing solution ] by leadership technology Our Avant, our industry: each

global a with many others, Furthermore, are in ranked and to CCaaS channel by Baird #X solutions channel top a in within by along with. FiveX position for the easiest community. business channel recent sold survey place These the do #X partners, prominent us helping

our who employees Burkland. ahead. day go passion work out never and excited momentum and globally bring to success purpose and I to their make I'm that, automation we continued our better, having ahead CRO, opportunity been And to market the will FiveX this Dan very closing, it over reality. every for turn with want our our of has In The are about AI I President with with Dan, to and a offerings. all thank

a afternoon, everyone. Thanks, good bookings I'm pleased Mike, to report that and strong quarter. we had

strategic sales are pipeline solutions year-over-year. pipeline of with our and AI Our another And all-time automation doubling unprecedented reached momentum. our seeing accounts high,

of the you of the with high lumpy As is very know, our end timing market to regards bookings.

contributor large remind $X and butter to the is in bread the of larger to ARR revenue $X our and of the deals. like our aggregate is to business, a than of that I'd million However, enterprise million growth you category mega

some usually the during of Now to as I I'd logo examples new do, share quarter. like wins

chose health FiveX, to single order provide Avaya with UI. leading They is integration lifed. along moving center visibility was gain on-premise that transfers our from and first version workers partners, from deep end X and employees, back-office company care example being seamless was of a with between contact The in insurance of all away that a UC an

e-mail, SMS, also include ARR we QM initial in order in FiveX. million will this our to We analytics, result interaction anticipate and to approximately and $X.X chat,

The Cisco is cumbersome managed long also were times. FiveX. evaluated that was hospital company. billing CCaaS They party, second major example and changes and a using moves, being collections and They and third by providers a chose making adds lead the

as the including well e-mail, solution chat, digital are both We as omnichannel SMS, IVAs. and voice full with

to also $X.X to million handle to initial up FiveX. times with We in in WFM reduce and them call expect interaction XX%. result analytics, to approximately are ARR Assist, by anticipate this providing order they QM, where Agent We

its advanced The This example ARR Agent along result North of voice or balances also digital to Assist, deploying solution to all were WFO implementing using serving our insurer America. company a suite a FiveX. is third we'll utility self-service and IVAs many $X.X chose our pay Cisco service. our and powered to invoices, was for in nearing complete customer this anticipate the hosted by million in in canceling that core and over FiveX will from We chat, offerings, management account performance moving the They life. be CCaaS e-mail, gamification. with Verint, solutions, check end be major providers. markets including They And

legacy over global X of been FiveX. of operations America was now several ARR their expanded our AI control a North to have compare us examples increase performance do solution. approximately existing who side-by-side team million their for production This The using an approximately acquired real by is customers comparison on-prem chose We a And use example who European spend from I able was months. and company $X.X portfolio. our reliability, a our well years superior system as to like is who normally several with They in traffic first for and $X.X automation using ARR. share as million pest do, I'd company in to had to recently to anticipate as

continue where solution success years with than we Europe began providing XXXX, last example this and Europe parlay in a order million into recent established their early we on-prem approximately company, replace leading used them to sales throughout global This solution. we is our strong with more from the ARR distribution In us legacy ago. they increased to X We as to operations, spend where in in call ticket now ARR. over $X.X volumes. their This million expand their increases $X.X U.S. we saw

how as executing helping can over financials. we you extremely that, brands of well CX customers So And and with I'll their deliver as largest the it to they to expand are see, Barry? cover the well world Barry landing hand to in reimagine our existing some in customers. as the

Dan. you, Thank

in growth Third exceeded by enterprise our subscription revenue. growing driven XX% revenue primarily XX% quarter year-over-year, our LTM expectations, the

the enterprise to positioned resume our XXs As we growth headwinds macroeconomic we a the ] levels well once in with [ believe base installed are reminder, subside. historic of on subscription

up revenue, an basis. LTM XX% and digits Our which commercial in enterprise of on business our grew the XX%, single represented remaining LTM the again made business,

I like total on Now our to would recurring provide revenue. versus color

year-over-year XX% second grew made quarter. in Third up as revenue, of which revenue, the year-over-year, recurring total rate quarter XX% same the

slower as grew revenue logo recurring offset rate installed sequential deployments as base in quarter of last QX growth. Third quarter-over-quarter, new year X% the same

inevitable international care across and of divisions. company Speaking ebbs largely implementations on the conglomerate deployment note health multiple new of rollout flows deployments, remain of the of the the considering that logo delivery the parcel and track,

rate slower of XX X typical negative X% in off professional for X% in in the of revenue at last Total third lumpiness XXXX, type revenue, by third services growth our PS in sequentially years. sequentially, of of high X quarter however, has record revenue, a second versus a the is which the quarter in of XXXX. of X% least our fluctuation the driven sequential primarily which at of declined This professional the grew quarter coming experienced revenue, quarter services

percentage Our growth was macro [ due the our installed X mainly LTM coding subdued points ] ongoing decline of headwinds dollar-based sequentially, XXX%, retention in base. rate to a

LTM to towards inflection expect quarter ones, or and dollar-based XXXs offerings. our expect down, in especially our trend be have slightly in ARPU positive to a by economy. no term, XXXX continue which expect major rates due to higher and retention changes we from fourth enterprise assuming we other and We higher AI a mix XXXX, either automation and rate higher larger Longer customers, the retention of high retention the rate flat to

XX gross adjusted margins a XX.X%, year-over-year. decrease were approximately of points quarter basis Third

are As report support hindering upfront growth year-over-year to we mentioned last the our incremental in margin gross near adjusted momentum, which logo we in our is to investments making ability quarter, new term.

Third decrease approximately EBITDA $XX.X XX margin, of basis representing million, a was points adjusted year-over-year. a XX.X% quarter

diluted of non-GAAP per a share. quarter was $X.XX per increase share, diluted Third $X.XX year-over-year EPS

million, cash performance, $XX days. now by which record, flow driven in Turning in strength of a in ESO operating to cash part at flow. came We generated continued XX

cash operating LTM positive of quarters consecutive XX flow. delivered now have We

million optimistic free $XX.X quarter all-time about high. NOLs potential for and our given our model, substantial cash low continuing Third We DSO. flow generation of remain also was our our long-term flow an cash

second spending of consumer. card lowest debit on the for throughout September, the discretionary I'd half, in spend, that like numerous quarter growth as JPMorgan strongest our and provide regarding now third remainder high-level nominal to directly discuss data, Chase the on year-over-year in indicators our namely, the focus X% with was consumer guidance down the to the well vertical XXXX. Based a deteriorated in of growth X% July progressively as And We track impacts from in year. seasonally closely commentary discretionary given it which XXXX credit

transaction not FiveX growth. rather normal September Importantly, in negative In transaction center volume growth, also this nominal represented spending year which volume the growth, growth drives X% what note is regard, of but that in spend volume. this contact to inquiry matters

fourth midpoint This fourth or to trend, midpoint our $XXX.X seasonality year-over-year assuming weaker with the quarter adopting we million, we typical [ our is revenue million, implies vertical. Accordingly, of increase X% due this new quarter-over-quarter sequential in XX% the a to we guiding of consumer rate from a and are Therefore, of in prudent our expected quarter the heading in revenue the ongoing growth. guidance maintaining ] the the are X%. a growth Given approach seasonality which line spend $XXX fourth at appointments. our are our logo guidance despite to of quarter offset into annual strength vertical weaker consumer are

per a of As bottom the year EPS now of would to some we current share, of midpoint per full share, are midpoint increase fourth non-GAAP the raising our diluted $X.XX XXXX. guiding thinking XX%. to preliminary a line, we for like and provide high-level for ] represents quarter diluted which $X.XX commentary are to on [ the I year-over-year

the FiveX XX% know midpoint. years again, have the X that for For in each those of of new for with we following revenue some year guidance been year-over-year growth time, who prudent XXXX, you through you at XXXX and started

we ] ongoing or further approximately challenging our for our outlook logo gain the our in based growth less base, economy revenue year-over-year upon the and XXXX, deteriorate assumption $X.XX [ that a For the net XX% business store compares year. in in next billion new strength does not on

is update the as point, progresses. This, usual, and year starting will a our as outlook we

We of being than generated expect XX% slightly pattern, with of annual half second more revenue to continue revenue seasonally typical following in the the stronger XXXX. our

In of $X.XX in the the per with for comfortable share Street EPS, of non-GAAP terms full we are diluted XXXX. year consensus current

of line. In outlook addition, quarterly an our we'd the on like to profile provide bottom

which again more and case posted high estimates, second slightly including we and second the is especially in in lowest expect If our Therefore, line typically to the this amongst for count, per the Investor we in non-GAAP we QX in fourth on the be website to in and share, in non-GAAP quarter, the anticipate XXXX. Relations to year in you share refer XXXX half, look XXs financials, quarter diluted the be improve expenditures. capital the first expect EPS to bottom at the of taxes quarter. presentation our additional meaningfully Please EPS the historical

please third our conditions summary, execute ahead. we to with while consistently our remain and believe Operator, macroeconomic And our improve. continue well In market, we this prudent massive are outlook, are results. go pleased once quarter against we accelerate with positioned business we to we

Thank so our from [Operator your MacWilliams Instructions] now advance. Barry. We you thank And first Ryan Barclays. question cooperation for will much, you come in with

fourth double commentary. click to Just on quarter the

cases, seasonal simply prudent So taking are you're your there? Or around like period? call for use expected different during a customers ramping agents that's anything that as you volumes and approach

discretionary really the prudent spending [ and what vertical. credit our July, JPMorgan to happening -- And August, metrics. better we this there's for businesses, ramping, internal the were well. X, base. numbers And that are approach, an on do Remember, I they want And yes, a environment card, emphasize X because is that month-by-month, tracked ] to that actually are is X, -- September. So very in installed taking that. consumer internally debit

looked at the And recent credit We spending we discretionary JPMorgan of delinquencies them look at at high. XX-year saying that so delinquencies, to the consumer that on at that fact loan the look going fact are most we're card We XX% reduce that. auto at it. the survey

hear he's just of switch of that You on CEO -- saying the And have CNBC this to real Target X that. quarters say don't going morning just fortitude pass frankly and both the and reductions. we to we're had you nominal of transaction through

worked prudent taking out So that's we've approach. a done, what us. we're for always and it's And

move will Truist. with on Terry we And to Tillman

of X-parter. bread but the $X of there. My million idea a and $X the question Maybe, is deals. like emphasize of a it -- into -- to you There's and butter Dan, question, lot it almost X you might in terms for did delve million

say your a you the how but In interesting how about and unprecedented do Unprecedented secondly, and and that of are to automation. play So AI XX those important today of days are over growth, How a activity? of it's increasing the million-plus pretty So I those deals? think those And the the then is do much deals? volume XX about feel velocity in you ago? pinning to expecting a word. did quarter, not what and you versus feel larger data next -- an fact, adoption point. X-figure you months is X- proportion $X those bigger about which transactions, those But you

just Those seats for driver There's perspective. the kind it. start Great if think million growth with typically Great, -- the of Yes. if center million-plus deals large a the range you a $X and or questions. biggest look to that mega There revenue market but with upmarket, deals, to at you CCaaS why Terry. they're so XXX first of there's for $X them, a the above. And look are quite fortunate that adopters million been I'll that and a that's up we've contact few very lumpy. And from for about us them, of they're That's starting that's only $X time. there's that's a -- year. at enough is absolutely before. lot big, of about a those few we've come early to capture few, each the grabs talked

saw predictable they're those and about quarter. they've quickly said, turned range. And momentum each always more those We much from we've $X revenue and So will that happen. cycle the every quicker, in remember, don't million expect $X quicker, implement how to to great that million

far looking As be optimistic like next the said couldn't pipeline, as year, you high-end I it. the at about for more

a Mike end of XX% lifing at Or they've comments number to demand customers end systems, it a comes to got QX sequentially those implies of perspective, you in happening what's lot the to alone. cloud. increase of If which is on from number a the premise-based from the things. the about couple the the from And his development that to of this that make look QX RFPs. One of mentioned of RFPs, systems. XX% move in of

whole all transition million-plus that mega the the starting They've process to through And the see they're $X this market, way up got deals. we the So to now. that on cloud. make

sales an look cycle, of to is me that are us those cycle. it makes optimism. there's And no space transition that there's great a gives The there remember, you that be thing companies better and like that out implementation will to time so. millions at and seats all But do make there's feel in then this the

right don't it see books our away. so you And hit

a couldn't that business it. funnel, about of of top coming And the which stronger gives I in And future. optimism there's feel about the great us I feel lot the so

it's there. RFPs customer rate the The the and rate -- the attach right or summaries, up, of our customers is summarize around that's more do second customers instead $X for bring million that we applications requesting having and notes. we has user in applications. how are how will. the part all of how their about all able centered the of of X We our call help efficient more it majority And time? the automate and only your in And automation had been are not be to deliver question around big our the wrap to very, a AI X if automate XX% a of reinvent, proactively unprecedented being just do very serve attach effective better do really coming momentum how those are and to and technologies, their we some solutions better we're AI that automate, X that do an positioning having was resources. things conversations -- improve, help we experience. less how of that All self-serve, these more of for in with automation, new deals the to strong. After The agents call with post-call now. let you help our put help agent A them do And be we more can end out their ARR

-- it's it couldn't better be So a time.

the for questions. thanks So

with now to move we'll Canaccord. Hynes DJ on And

click I Good to you to some commentary, integration could progress. maybe on ask Dan, Mike, the of see double Aceyus everyone.

to other you asset? in you that's interesting. thinking how been Aceyus past it How about color of center with there has kind on you that's color Any would a in are I been How deal treating worked have now the some flow. contact curious us the also, space. gave vendors that that? be own large I'm contributing business You the mean,

very start momentum as you The we DJ. with closed long sure, to is Yes, a deal off not Aceyus. very Again, that quick know, August, in ago.

on major now some doors they It's Aceyus I I'd a Fortune up sell pipeline, couple plus and track, if CCaaS so accounts, opened a to XX% XXX just it's right speak, say, pipeline schedule solutions, into you in will, their As for of combined They've is to ours mentioned, the the base. for had ahead of also really the our having our in, just months. the us that customer our business. our I'll base. influences in terms prospects having have integration it's well as deals, perfectly going of base on as the well. their influence leaned impact and and it's also customer on their is add and happening teams The ours just of as well, employees on is in have that

UBS' question. Seth Gilbert the next has

maybe Seth more the was Taylor. to specifically, is deal Maybe deployed XX Health This is on ramping I for bit large fully care is the the the global care their would early And that end of scheduled a great. a delivery health wondering you ramps? then of elaborate service year? update the by timing parcel could of on conglomerate life, 'XX? in this by if little be little insurance Fortune bit company an on still be where

are Yes. They're The out and of in out service parcel delivery rolling recently planned. process right proceeding Pac. They're away. Asia Europe They've on the the rolled out track. Americas rolled as

So that process around conglomerate, the They conglomerate, as proceeding businesses they're you XX then them. said, right the beginning if track or like in or at planned. care And different and as you to, right year. health end of look the conclude underneath next got the companies on year of is

out of at those and operating stages. different in rolling each parallel are parallel So in

care We they're that company, a health strength. expect even before of ramp. haven't that mentioned, full be that's go throughout yet. going rest insurance at you the X the the XXXX to to They started then longer And

so of until until that XXXX. second hit not -- hitting will start half And revenue

Fish with to Sandler. on Moving Piper Jim

at or at guide be I year. conservative point guide? right exiting past, you're hit X this, has I QX the this 'XX your has to that to the wrong in with this guess, to XX% the know surprised ask you, Barry, XX% for but I'm first XX% what here, to go about tended for

in rate, larger prudent of that of especially lapping year. sustained this some what us walk for to be the -- through guess, terms sustained added as deals for kind the I rate of confidence they So you're XX%

Fish. Yes,

XX%, of the it X and I'd So secondly, installed point like us. a the for base. in to emphasize Think logos new which is starting components,

In bread $X terms just million not as logos, And and Dan I of we or a sitting been $X to the is it there a of butter huge the have But mine, deals. megas. think going mentioned that might be that's to earlier that's deployed, meaningful part the backlog new million on, have of revenue. the

fact, the health delivery the both In -- are also service and therefore, the company and towards helpful parcel care in well, the revenue XXXX, in XXXX.

The bigger -- They the that quantum much you the they than if will, ] [ are a rather can make wells deploy dots, difference. size amounts. and by are much, they faster, a

So also get, more They've his in the the backlog can what just there backlog. my right, industry. not They've Dan sitting got all these got best between the team call and from some that in we as RFPs. on business sitting machine bring are that Burkland, on gentleman go-to-market he And the ducks. and well their the aside go arguably

that's the new on So side.

that alone contributes On a $XXX it or to basic about our of wouldn't do the either can lot prepared doesn't extra flat we weak to year-over-year. of pretty whether be saying may conditions 'XX. sanguine felt experienced you the thing the recent be from -- slightly install the remarks take that very base fact we quarter And revenue or for it's yourself of in comfort macro the down million quarters. that unless are terms in lap beginning the fourth And that we side, in we've that we

with now We'll Scott Needham. from hear Berg

cadence what being on on I seats revenue? is your the couple are obviously growth QX. more should we I of Barry, just kind there calculus kind that and a in of about to the revenue assumptions prudent has of know you're installed installed You've wanted about as discussed side how the QX had didn't but deals question linearity next a online large little should challenges up X-part some And think the pretty your is, fully on in have -- the the guidance 'XX in bit. the year? then question of How for base follow coming around around Kind base? a You if we one, here, think here your seat of on linear. been

Thanks, Yes. Scott.

we XX. is of -- year, year, year So pattern, It's And not balance, in terms a about linearity, XX, first coming in and in X in it, very course, some different the takes the terms to the the resumed, year of XX, consistent the the call half. every little ramping. be second puts got that the half any have a of going over half of despite are deals this of

of terms In that the somebody half. in that from first it recent tougher a the out research year-over-year comparison, was pointed are astutely compares in

the in half So you'd increases bigger the expect year-over-year. second

to comment beyond at -- we're not in the base. growth In position that's I further I in terms going of a position this stage the happening the best to retention the indicator seat installed in the base, a dollar-based be looking what's installed don't rate, think at in we're of know

will mostly will it grow. but factors, of course, number of macroeconomic probably rate So depend what But a the conditions. at on

the we we the spring around, it turn talk that side. from benefit economy the loaded. we can because internally an as a inevitably, to churn this the seats turns directly about is logo churn. is want on -- overnight. each individual bit in logos American little enterprise on aside, up do -- We will about logo We being excellent, than average all And mention I our somewhere when logo slower is the mid-XXs what that

also And an having up, aside, up, the see now pick profitable that by transactions pick and way, places. so just agents when we'll will as right the away. And

Blair. Arjun ] William with We Bhatia will from now hear [

vertical weaker. the think had you appreciate for think volumes fully choppiness change points is I September, the through perhaps other opportunity were you seen that Perfect. QX of I as to data suggest your weakness any look looking things where -- we're Have you consumer verticals that transaction I gotten in there the at just in mentioned QX, offset you as the XXXX? exposure, about think Barry, But all macro. conservatism in have some right? kind in vertical started that there And your in September? in you

Yes.

which with me a the deal care let vertical, enrollment other health vertical So is also with a like. is first verticals. and the the There seasonally open important

we that no just that Our far. weeks meaningful indications about, guidance of thus to similar X started gotten what when I is It's said ago. expected we upside think, on

what terms in the of In the October, nothing it's to just in always we line, consumer, the from of time. pretty we -- dramatic what it's month at were much assuming

Stanley. Meta to Morgan Marshall with on Moving

a many Great. for sort to of some of kind having With them. these you. AI angle question deals Maybe or Dan, so attached of

you seeing Is is to scope out it want it sense take where signed? to of in a want Just solutions they Is to bottlenecks, of I'm longer the are of what they to what want actually do? what either trying what just type get -- privacy? virtual what terms they use. get in people Just do figuring of data are. they to

-- anything look Do longer, whole significant a -- on Yes. you The is takes That's impacts done. yes, rate perspective. It's buyer. if It's implementing the to they're team oftentimes, solution, a innovation sense. not not consulting in Yes, while and professional progress tend find also the AI with implement. longer? which And have teams additional average, lot replacement tends cases, it's do in will the few years, that of they metric to and them the if as happen any an yes, And to to fine. new a -- we've cases use work we use really take from moving with that's services kind new in, sign a a cross-sell, back little I slightly a our think really attach with our application. the wonderful. for comes We go but process. customers gradual which upmarket, upsell they whole up they that And

board. great the as They're they're our with AI cases and we experimenting. across mentioned, So new portfolio finding automation I and use see momentum,

quarter. projects, XXX in That's by professional and revenue remarks automation us. prepared And services other Meta, than revenue. and in just would about talked I worked on is already AI AI that, add area any the team product faster being for it projects our to what And about my I automation growing

Starting rates. mentioned So -- revenue will, in terms and not right, Assist of up kind we've things as to Agent few lagging the as to the XXX%. momentum revenue, some in continuation a the we're see of you of the well I a starting been of indicators of about terms attach last to growth the bookings, result, and talking on lot bookings end in show active if quarters the of over in projects, mention

question. Samad Samana the with Jefferies has next

maybe to we're international for through incorporated Samad momentum, product continued that channel is And And outlook? a Billy hate have some to Forsimmons us continued This question other just more expansion, into asked way. Barry, But weakness for Jim on And all what I AI-enabled actually I point XX% in activity, then but into you just deal a maybe click adoption Dan. a ask clear. improvement? outlook. the strong different slightly in potential or through Samana. of And on things that challenging XXXX for obviously, remains the early, people verticals And can kind How that XX% were of want that incorporate sneak do so ] number? ask asked. walk does in is could the you. X other a starting more number Scott you some think similar like and to to what that do factors and number [ if of I triple But already continued it

inning for journey? can And talked couple that that the quarters are of channel last guys go in kind of What where from you here? momentum. strong You've about

then. I'll first, go

Yes.

terms a try in answer. going coming up different Billy, here, be and over of with creative to So I'm

it going was me actually gave as are down go total quarter, though, think avenues some is up because It goes XX% too, important. headwinds. clearly year. The as percent You point becoming revenue each well which facing has they, to slowed of percentage down. growth a International Europe increasingly X in to, macro I are this last [indiscernible],

that that or get But answer in target Mike extremely superior I'm going -- Dan fertile likely will because ask -- there. they international the on X the is we when And side. it been to and important base channel either halves certainly logos. field the a passionate and drum beating are growth of in really but -- the -- that more we've is are comes growth operating to to then The and almost the rate to And generally, XXXX. installed just very will channel continue new

at serene new looking the logos, people. you're very On X

demand. manage the the are It's -- worry rates. In getting high the about win the RFPs continued execute We there, that. terms can don't against of we

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that asked of XXXX, if brought pipeline time comes the just statistic, at to of funnel short you And X top a if we the XX -- ago, much partners give about from how you and that partners. look I you us had

us over ACV, only had in continuing grow. such deals partners us million XX over that XX $X that number have We year, partners value is ACV. to This we've $X contract million that in of annual bring year, brought XXXX. And

available we're in could especially in. be we're really the lead high opportunity, until of just I And us would at because even the from And a the like revenue argue second so market inning, recently. that inning. the first end been influence the in we that as we hasn't said, or to and Mike third position

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in summary, Billy, that's how the XX%. we So feel about

much. Appreciate very thank Well, it. you

on to Peter Levine Moving with Evercore.

I the earlier think, year. services up that, question. I do offloading add start to to I channel, more to Maybe think, that last you know opened pro to this

it you is help today? So XX% maybe Just XX% it understand second the where is maybe I about -- help Barry, that is Is us the us partners? And of just through scaling a target. us kind that walk more one when evolution trajectory there's to Can up get then of margins. there? frame gross talked know we of trajectory margin Is the you ARPU? to gross

majority seen And year percentage. being kicked our Internationally, do I'll implemented dramatic that initiative strategic ago. even go amazingly pull-through, going And third-party we call by well. in that about a a a are our enabling partners the I a as is on to increase you That implementations first of it's Yes, mentioned. we've was the parties. third off great deals project what for -- Peter, domestically, questions. us. And

right disclosed haven't I future. but yet, of out. will a in it's that in when the We this our we were growing KPI terms track on rolled and But what percentage objectives

trained, see actually again, So the to being deployments. parties I'm thrilled doing of, progress enabled third and

we've the is for solved And critical scores. of NPS X factors, success

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in have because different order to this the the margins we and get revenue going to -- into have Peter, explain you how XX-plus, breakdown to each to And the understand gross drivers different amounts. believe are

X, start I'll and So services. is professional is of the to rest part X% and ones that equation, is less of the relatively one. By because way, been is usage, but of digits professional is double the then up low over quicker. small -- then breakdown much. the XX% scale every that a doing the with that's the through most X/X don't other commercial. too brings the it's less move software the in is The there. there the like XX% makes deal and And now important subscription. door. the revenue We important that total potential, is better important for Because into happier customer the companies, we've what mind is negative. that which having not many to services, mega brings It enterprise, a single efficiencies

helpful. the single not can But driver. It's get digits, digits. into high that's single that our So

XXXX. went And points. April a about was to shift public to also completely, the that's the The subscription solidly now is every not going going second continue. the illustrate dramatically is half to to to year, usage in XX, we're to that, in just is something from happening have there, that It's X in usage. And percentage opportunities. that's we some XX% internationally, the there, We've What and improve. not mix That's got area going -- there's incentives the X of total. Usage in XXs. that but we of

So there. shift a we've mix got

each certainly we the costs, to if which always [indiscernible] the we fixed basic Now because is worth just faster. we the the that -- comes when why subscription is revenue quarter, growing fact to a fixed down squeeze, there, that's we've it highest look is you gross there, very at subscription. straight juice That's costs, and the And individually is fourth come have got the highest. The point. the over margin revenue

make initiatives. got I'll additional quickly. we've some X Plus, just

at In the were for is strongly And it extent furious we to operating went some something and other tasks things cheaper. in mega South it that. always are also bigger these services indications And if for we talked leave remigration Africa, with we that GCB. when international, we we data yes, in certain accounts, being about that we're take our do professional The there can So time. deals. And I in international, it meantime, actually own places. fast but -- in these do by dragged India, the centers, further in these investing I'll call, guiding

Mizuho. with Panigrahi Siti

of the It's kind [ large in color deal? but rate good strategy ask more seeing or Are better rate close seeing you're this scrutiny? signing a before I looking pipeline, want to you and be whole environment? just about customer the about Are in strong AI more to [ you more ] hear seeing deals helpful. deals would ] at Any

Yes.

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to having example, an summarize third we a do As we're transcriptions, when party obviously. our GPT use that,

those sure our and we're make just the steps teams to sales have we So those. in extra but there's process, aligned directed to

great. it. it's interest through there, and the So gotten everyone's it's I is -- mean,

we're the times of having think to I create documents. past those

and now so the of it's just templates forward. moving having a And matter

AI part a of so anything? that that, that's think do Are their altogether? delaying Or separate that as you customers evaluating strategy seeing they're you process

for asking that strategy that it when Thank extensively. nets criteria and AI, pioneering using it's that believe actually FiveX. question. comes AI a our market absolutely out. thing it They oftentimes key are to study Baird as you business and And we're the that leading for the evaluating wins We

of not as scratch and of us that acquisitions ourselves. Our that well. allowed running from strategic us to the explaining ground couple kind hit a We've develop made to customers are have to

have strategy map said, they and about their we we that market we So was decision it." even the business big component the precisely AI leading what our it, the that the we're in because our criteria this of AI tied do happen excited that giving portfolio not you're you, you're may want that want we're we're in And going deals AI, with direction to a to revenue us, way and us road area. believe "We want future-proofing and the

has Matt question. VanVliet with next BTIG the

installed importantly, the you base, that? I much much in on And you AI penetration would much XX% value are new new you that an But I And the part, of what guess some seeing to that's as the wondering earlier of concern we're and adding you there, of so the today? knowing But on -- are net retention rate question more of year, one, maybe guess lot how that. sort on uplift mentioned normal the deals? that of a customers next of be there staying is was bringing additive second add a the on level seats. had how your features, deals of it dollar the cannibalizing think then that do theme how is, deal automation

for you question. that Thank Yes.

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reasons. growth that We've we're One, slowing, couple the on slowing, of and working and that we've were very software a about got we pivoting tabs that effectively. for the projects selling was talked when done more XXX seat

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So agent. that the on and back it time for cuts wrap-up

their a And just the water, So for unprecedented it's of really new, the great we've interest before. suite. momentum see an in starting where and we're attach talked to getting incorporating it's doing this dipping AI, as we're rate, the both toe for in net level whole really again, base an about installed but than more appetite that's

Moving Michael on Fargo. Wells to Turrin with

see 'XX. And we've some it can commentary like you some the some the It's Barry, sounded bounce to point at you Nice in retention rate. talked everyone. question. have XXX%. about know appreciate I that back confidence on it had taking past. I in the maybe you

So there for are for, and milestones how from bit impact and just understand you're into much periods lingering a the looking to time over metric want also this potential better prior just the up of the is drivers trajectory get certain back there? confidence XXXs if gauge to the that and

This take don't LTM bouncing said slowly. moves I the but to is an you Mike, yet. phraseology, issue with back. number, bounce So not They're want

And Slowly, higher. gradually.

Yes, thank you.

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So it's a disproportionate impact.

me? with You

Yes.

long and what the confidence the were the reason that in term, ] it's faster XX% have revenue, high fundamental et is million-plus I fast-growing makes that these they higher quarter have as much on in the doesn't mix mentioned new dollar-based there than -- that every an but numbers we are stuff, of more acquisitions, you Those confidence. organically, Okay. growing his $X retention Then in XXXs that company, around don't so grow dollars customers, give every And which fact than in already the which impact basic it? reaching cetera. the dollars, sense, -- million-plus, rest remarks. business which year, a yes, us from appreciably big we recurring [ is $X buy that is Which that of Mike rate. certainly mean, many is gives

with from additional for have We X Power which come time will question, Baird. Will

a Great. survey. Thanks time spend the We on for comments on of that. lot our

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FiveX be to has confidence in it's a pipeline many this so have want that the so actually competitors. much I And over grown win our and go There on years our to and you so people about doubling and the team, convert business, team, so that team when think ability that from significantly are quite frankly.

and just this are team, So brightest we're track able superstar. to best they the on and

convert share that going of have can doubt I than see no it So into our wins more to they're win our you way pipeline fair that rates. And for FiveX. in

So I'll that. at it leave

for again, back I'll session. it And you today's turn to Mike, comments. does conclude this Q&A closing

the Thank can you today. for joining I'll just I so much Yes. say this. excited -- FiveX. about very us for future

the of adopting leading these most think that talked large that indicator, metric the enterprises We been talking And leading and is about is inflection, dramatic flow. solutions. have today exciting about legacy we've this in the of jog RFP I the I cloud, shifting frankly, indicator, terms seen off leading, quite on-premise

So in and growth strategic XX% growth for XX% sequentially. enterprise, RFPs

opportunity. So that is joining. a good very business leading inflection for in Thanks our the indicator for