Five9 (FIVN) 2 May 242024 Q1 Earnings call transcript

[Audio Gap] joining us today.

On the call are Mike Burkland, Chairman and CEO; Dan Burkland, President; and Barry Zwarenstein, CFO. Certain statements made during the course of this conference call that are not historical facts, including those regarding the future financial performance and cash position of the company, expected improvements in financial-related metrics, expected ARR from certain customers, certain expected revenue mix [indiscernible], customer growth anticipated customer benefits from our solutions, including from AI, company growth, enhancements to and development of our solutions, market size and trends, our expectations regarding macroeconomic, company market position initiatives and expectations, technology and product initiatives, including investment in R&D and other future results, 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 information or 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 continuing increased inflation, increased interest rates, supply chain disruptions, economic output and fluctuation in currency exchange rates, lower growth rates within our installed base of customers 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.

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

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

total thanks, and exceeding our of by quarter Emily, I'm with the pleased [indiscernible] our report guidance points. everyone, Thanks, and call results this growing afternoon. revenue for joining revenue our midpoint first strong subscription to year-over-year XX%

As subscription a XX% refer in to for the our cloud others total industry which nearly revenue revenue. accounts of reminder, as revenue, our

any subscription operating not Also, from flow was have this do immaterial quarter is of in business. from of growth any we revenue, margin customers of or all drive XX% not helping on-premise revenue EBITDA million for the This for benefit to since amount. an LTM except converting XX% XX% first growth whatsoever on-premise cloud organic, strong include Adjusted $XXX does cash revenue.

and line As you all know, delivering balanced bottom line growth profitability. approach we top take a to

propelled to begin broader X today continues opportunity, be [indiscernible]. by will I by our discussing ongoing which market

XX% believe multiyear cloud opportunity penetration particularly First, life. current end many at being continues growth be approximately ones of migration to a top the cloud as durable to [indiscernible] there's enterprises, contact to ahead. platforms we center With a XX%, standing are

CX laser-focused some which in at the and a for improving changing game platform on way initiative intelligent our the is deliver of outcomes. connected business has customers. experience. are brands the our experience. personalized, their aimed CX brands become AI-infused With experts, passionate And and are experience, our With third, enterprises intelligent for we and and Second, driving enterprises better strategic customer revolutionizing helping customer experiences reimagine them helping world data-driven their enhance effortless the AI customer we're platform, largest

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numbers. earn course, speaks recognition industry from awards success And strategy analysts. to and nothing than marquee to continue of We our more the of

And XXx bookings year-over-year For grew quarter. AI like and market automation international our expansion. to our march first in I'd up the and now example, ARR on focus

effort, We're a we deal want a which XX the signed parcel details just to mega continuing a Fortune success that and marching very our Dan more care share conglomerate up testament the I company, we're this services excited will such health insurance say, market. deals, in to as care But the company, largest delivery financial in our company. moment. share add our previously announced global is win thrilled health to to to

financial a notice, they're taking as services pulling this and industry of win, Additionally, already result us financial into opportunities. services enterprises and the large are

award-winning platform our up because partners. our our also just people reminder, a to market As but is success and due not of our

examples. enterprise the is our migration, differentiator, at as repeatable [indiscernible], who success around of experts CX partners we as optimization. focuses world the international FiveX and that have our collaboration success implementation upmarket globally model with Premier remains key customer ongoing CX on Our playbook driving by expansion, large execute and a X hundreds all transformation, demonstrated

momentum from First, we increased large are SIs. seeing

partners which largest to We of services, group incentivizing it's have select take and certifies a and to lead on these implementation [indiscernible], initiative of in FiveX SIs called support global some and enables opportunities. ongoing with an the

And to stay partner This at partnership. that forefront it first our early Second, the reach Salesforce CCaaS step have only we momentum, us major to forward gain APIs with can gives we is and where the to Salesforce. partnership Summit our so continues for access Salesforce and of become status. a releases

BT advanced Cloud is partnership for is Voice LT Our hold. third, BY to And taking great integration testament our this Service a partnership.

we they resell reminder, BT reciprocal we As also FiveX our have a solutions, and connectivity. a arrangement resell go-to-market where

This itself markets, parts partners and and the where but in the in a helping our Ireland our upmarket helping introduce are been few footprint. expand world, U.K. only other in secure instrumental FiveX business. they've is of just also examples global improving also of These not helping pull and FiveX

have Dan, celebrated IPO ago to to over on ringing it FiveX's April a by of a few comments our turn few company. may XX-year opening I journey anniversary at public the NASDAQ. like make a you on I'd Many seen weeks of we the bell X, as Before

reflect was our a It a public as perfect on opportunity journey to company.

multiple EBITDA cloud Today, combined from vectors, XX the market CX of the these points. XX revolution were in data-centric the by many with we've We We of We margins center industry. for following leader of ARR and XXx have significant in as percentage ] X been with increased of progress million our recently, pioneers platform in made a Over organically. we're our to contact [ grew brands one the examples. experts. our have more years, that XXX. XX-year in We passionate the become $X by and all them early including number Contact And revenue AI increased and on X period, comes last cloud virtually reimagine provider CX. the the largest largest Center AI-infused the leading world we changing we clear game pure-play help plus

our to to I'd to thank on team of moment take a like our In progress, reflecting FiveXers. addition

and I Our success over every by last the commitment FiveXer to and want personally thank has for you been all driven decade their do. passion, teamwork,

We super the about we are next transformation XX achieve years. over massive a can in CX, of and still stages the I'm what early excited in

turn And to CRO, with please our Dan ahead. Dan, President will it and go that, Burkland. I over

report I'm that our and quarter been Thank record momentum had better. and good we bookings everyone. partner you, and afternoon, never a Mike, has to channel pleased

like Our some customers us goals market-leading wins their share in focus platform, quarter. CX to the key expertise And achieve now I'd people relentless market continue to and the business trios helping our examples on this propel opportunity. forward of for our

one As worldwide. Mike XX banks million nearly to that of contracted largest very excited we with have customers the serving mentioned, U.S. announce

normalize using a been scalable ACS all M&A. to I from directly partner with and several for CX consolidate recently well and and migration expect years a their their of through CCaaS them them disparate looking of innovative, acquired modern, systems across secure solution. and key systems. as this data of strategic has our different A many footprint as global FiveX variety bank The centralize legacy transform who a solution, to allowing could include part help acquired will

We and order over million an integration in Verint, an our by FiveX unparalleled solution. ServiceNow. will has WEM They reason, solution, $XX over in ramp anticipate our trust. Salesforce full X suite this CRM to to initial chose and people result They FiveX subscription the will FiveX. deliver one years for the purchased platform, dozen omnichannel They partners the ultimately trust and to several that arguably over CX powered and ARR systems IPAs, our

a omnichannel engagements services, fundraising The needs. and one highlight higher which another both will not cloud proactive is full counseling their recruitment, second They guidance and to for education, I'd that using like company universities activities. inbound for be vendor, outreach. had alone enrollment They a with FiveX was helping using been specializes meeting in solution

to by Verint agent assist order and for in, and anticipate our integration. along initial in $X.X call this powered Our summaries ARR million ] We with solution full suite performance result Dynamics Microsoft WEM transcripts dashboard, [ FiveX. to

chose diagnostic The Cisco, functionality automation been and third had our outpatient integration the They the and deep imaging for out U.S. which partnership year. rolled Salesforce lacks FiveX with firm specializing our Salesforce, and our lead throughout AI suite. and have integration deep which just they industry last example, functionality, in centers with American radiology end-to-end They using

now ARR And where do, transportation of insights care best to chatbox We with our the as initial I expanded route inbound customer customer call with to FiveX. is FiveX and resources in transcription, U.S. anticipate many example health provide [indiscernible] throughout services in nonemergency like to and who also industry, normally this start even actions. existing $X.X automation networks they order at will while us. from million where to share They using hospital an an inquiries to and summaries, IVA over introduce self-service the to I'd identify and result the more in This analytics to intelligently

they we for QX from years, anticipate approximately in spending and we're additional well that $X.X .[indiscernible] They languages QX, as and several IVA human both ARR. In million as adding approximately in hundred have cases million been $X.X increase customer use million. $X expansion, to our will seats X expanded of their operations nearly ARR ports with number over

initiatives, go-to-market of our you So market, ecosystem. our see, and including to execute can very on our as continue our expansion growth international march we partner up successfully our

that, And cover with Barry I'll Barry? hand the to financials. over to it

Thank you, Dan.

and first first points. to makes record year quarter and a by We growing in are year-over-year growing X revenue. pleased up was revenue the million the driver, $XXX [ XX% X% over the midpoint that exceeding strongest of reached percentage ] our report guidance XX% revenue now Subscription quarter of

Quality and year-over-year. grew revenue XX% subscription Enterprise

our logo investments subscription demonstrating subscription on in are record, dividends. XX% geographic remained XX% with to revenue over Our represents box revenue, our international a in quarter. of a new basis, the deployments against robust executing EMEA CCaaS a QX year-over-year backlog sets. of which On setting EMEA substantial paying focus

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

made of XX% revenue. total QX up Recurring revenue

a revenue. recurring subscription than grew As revenue revenue up of made revenue. subscription and usage Usage is slower reminder, revenue

within share X to each is for existing as recurring our we reason a usage revenue, year, coming the market, move carriers approximately from usage contributed As growth mix by revenue. share up percentage X slow The we often to revenue the from usage. larger subscription customers shift see result, the revenue points use main because a

our partners not like Additionally, them. carriers, business BT channel take will away also from and we and are AT&T

reasons. continuing long-term from away usage mix positive the subscription see trend a for We to two shift as

revenue consistently total revenue. on revenue usage mix over the subscription than that grows drag shift reduces faster given First, time. usage This corporate

margin to Second, revenue. than gross margins the it of total given up long-term This to Professional total from result you subscription mix over services. these I'd that shift like enable other of revenue partners the strategy remind services our to X% in time QX delivered made our is subscription higher gross mix deliver will a away gradually to usage. that revenue. the PS corporate delivers to

to continues margins see per revenue large be to delivers partly mega this our We a trend also more overall lumpy, positive long-term deals. because due higher subscription than Additionally, gross

Our last conditions quarters. given LTM anticipated, slightly dollar-based retention to XXX% several the rate macro as declined over the

very to a term, more rate of a rate more down have to positive mainly Longer LTM towards We year, ramps. either to the a to and inflection continue customers of software, be is second dollar-based to because high and XX of retention of slightly and the in expect flat half higher QX our retention selling or retention towards higher with months than trend rates our we due and AI trend mix automation expected by logic XXXX [indiscernible] including more customers. continuation XXXs the expect

XX are and First investments were and making support to our successful lower-than-normal basis margins quarter approximately the gross points the year-over-year we increasing revenue successful adjusted expansion. international both despite upmarket march growth transitory XX.X%, by substantial our

investments, points decrease in of which driven deliver strategic margin, significant XX.X% basis First opportunities to [indiscernible]. long-term we was notably quarter expect [indiscernible] both year-over-year, of XX adjusted approximately primarily EBITDA a [ our representing ] most by FedRAMP India, million, $XX.X a

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

as turning percent to XX% flow balance to would stock-based Before on to I we cash in the the compensation from of reducing regards a With ago made sheet decreased our first attention your cash XX% revenue, to quarters sheet progress balance to which highlights. like X and quarter. and join flow.

days strong performance, at quarter, revenue. our strong In equivalent LTM continued we by is XX ]. in cash [ our and million This driven to XX% generation, delivering first EBITDA $XXX came operating the flow DSO cash by which flow of of

XX of we delivered potential flow, [indiscernible] our given positive generation and low for opportunistic continuing DSO. [indiscernible] and now cash cash operating consecutive about have We quarters flow LTM our remain model

existing of our of balance convertible sheet As million. our notes a our XXXX added proceeds the new with After balance. June to portion reminder, net issuance of million a we strengthened the down notes, we further paying in $XXX.X amount X-year cash of $XXX

to many locked We offering, of and a believe to elastic I'd with interest We cost $XXX.XX and the are in ]. favorable for effective of us obtaining positioned prepared nicely guidance like finish to oversubscribed calls are and And of now We discussion terms. the we pleased coupon ]%, years come. seeds, [ X.X completed dilution the an the today's full second for quarter [ our XXXX. remarks year of to have X% successfully from cap a rate protect that including

which call. to In a terms of the top $XXX.X [ a in commentary we line, we are is guiding midpoint line with quarter of QX million, ] revenue gave ago during earnings

negative This sequential decline QX. with our into growth [indiscernible] X% represents typical guidance a in line

full For the ] maintaining billion. revenue $X.XXX midpoint the we at guidance [ year, are our of

second we Fortune ] putting mentioned [indiscernible]. Given subscription are to Also, the a considerable previously amount customer not annual prudent acceleration our any there's moderate still expecting the not beat through note, and financial half, please and services we being QX of are [ the only from guidance. in revenue XXXX XX

[indiscernible] QX of which in outlook in-line $X.XX, we quarter. we the is provided line, guiding at As bottom are last for come midpoint the a

we increasing our investing year, EPS the ] to of slightly key non-GAAP upmarket internationally. year, financial build the growth continue this $X.XX are $X.XX from to guidance to full opportunities the in [ momentum our reflecting midpoint and For plans

Additionally, I provide color of XXXX. would the the for quarterly bottom second like both the the to top of profile line half and on more

third the the and expect revenue the and in this quarter EPS quarter quarter. quarter increase the fourth shape non-GAAP in given of in We group more the revenue improve we to third expect sequentially more fourth to in curve,

ahead. the estimates, path in Investor CX world posted platform Relations largest pleased Many customer partners have defining only market, power success. and in journey decisions presentation the making the summary, the dividend leverage for we the platform, please on to our CX to Operator, capital quarter we migrate best our count, go mission-critical In the we the cloud contact our for of are AI the performance. pave to as are will customers believe and This additional and select share trusted for the expenditures. way the our continued of first investments making of deliver the been including beginning refer with the and centers taxes website our strategic experience. Please and to is

Instructions] [Operator

question come Canaccord. going first DJ. our And is With Hynes from DJ to

That's the see. to one going I'm the to of and that's numbers, break on deal. front I'm start mega well. rules Congrats the going you, follow-up great Barry, quick a with to right as up

was deterioration or typically the into that as outlook and what space? So we well. beat demand raised the reiterate in of There read a when further last the you've there comments QX, helpful. call. you activity would Just any on be you year few terms meant anything of beat the years Should in full

Absolutely, DJ.

great frame we're first had quarter that just very in some we Where bit. and the for coming record we of professional [indiscernible], well. logo you quarter visibility. seeing seed off to got it inflection gives that see we're terms installed [indiscernible] point tailored at that A me the half the We Let in from as We why sit little the and -- that backlog second quarter. in us for a services a in our talk installed. this strong

fact good. So overall, pretty the talking in considerable half. ignore reacceleration we are time, we can't about the feel that second the very a we same At

that XX.X%. That's [indiscernible] thing be based to want guidance. we And guidance first our earlier second doubling aggressive. our The in prudent. is half per pretty on We're XX.X%. the basically to

the -- we to we are through not for put so be didn't going And through QX for that reason, putting prudence, means.

seat-based get or from pricing towards next the a you, question. X, potential model vision in direction. strategic evolve that that then space X the Okay. the I pricing Dan, thoughts like Like a and maybe which interaction-driven in like in I future how to away And more a it models? as Fair enough. kind significantly feels for mean CCaaS years. would But love of your pricing transactional AI more

that, seeing Yes. and Thanks, DJ. already. it seeing We absolutely are we're

with AI to even of setting a seat, applications, -- We IVA seat. be seat. at the and not per they're a an not of like They can port, that we mentioned, you equate many front example, kind they're a correlated As as which really tied to really end. do as the

voice are But some information or like gigabyte per pulling And an stream per like measurements. those and on applications enterprise. or are either application. Insight, tracked, other and Those other getting there's decisions consumption being things insights already based to value our make across minute many all priced transcription

So take to still software we're we seat-based seeing model. speak. helps the of agent the sits that evolve as most But remain that be a typically front and prevalent. will That there's in place That's human the agent. that

You're Over and absolutely we'll time, have based. right. consumption evolve see more that

question Terry Tillman next Our will come Truist. with from

the to like have Kind on might X I'm but record X DJ, Congrats question, be slightly going transaction. it actually parts. of

AI interesting uptake the kind in what of not [indiscernible]? part I I'm discover you efforts the what have you'll of a And and think second terms because an In MRR recently impact of have tools set myopic, -- in there? is side, kind about base to the the basis of go what really or per these to back And curious Gen is seeing then to have having automation, are terms and be these to you is, it tools. more AI had programmatically on them of kind but some

Yes.

how an in that's first much seeing how affected look So calls automate through AI to an handled and taking quarters more interactions, self-served for whether those, at and automation, applications, seats for being fact it's be uplift. we like-for-like that about an the you if AI being when are actually talked many by what impacted revenue that question we're IVA our that XXX% I agent. used is the is the through a you're We've or much or collect

just collecting think seat $XXX a agent the than as on human basis. per We're the rather getting it's software. revenue, of twice of But the interaction, north But on seat per for a per per but it we're port really basis,

And AI As then when we portfolio, that we in the the nearly that's XXX incremental double rest automate revenue you talked, those talk would of about add-on achieved. the interactions. get we we range

giving brand, we time we're do increase down. that our an So interact the It's with goes it's usually our the customer that and brand, not up, seat added more with automation, they more and more as share the wallet driving towards And AI to of adopt additive. they seeing that as customer perspective from a when not a achieved individual customers one and base more seats. spend convenience, move from cannibalization that taking it human choice automation

I'll pile Terry, on. And

Gen again, and AI we're as an mentioned you first, deliver as out-innovate upsell our more base, my competition studio your to I question. is to our in of AI more going across those platform, Our and remarks. continue industry products to mentioned And in the are opportunities most

on move McGinnis now We'll Taylor UBS. with to

about Seth recovery to seasonality, Gilbert the year. guide for Taylor. on the as you vertical for about love know to assumes a the growth maybe It's still of We'd bit Barry, before, little a mentioned XX%

the second like how So do of kind influence acceleration? consumer half verticals

time Yes. said. it in subset in don't place deterioration first ever we the ever, in fourth XXXX the in have of saw vertical It time the contracted like any first the discretionary moderately this I of as the were taking for a quarter that when consumer consumer we sense influences

-- best that there an the seeing allowed for book. economist, we're to not out overall into are to managed would extremely not installed help. macro also And that economy. the challenges the we're that of base going macro And ability as normal well really concerned, compares, got comes we're down So far more an to is we've yes, but but there, economy are the blind verticals in that's and as our it we're our -- that being fact we've

Are consumer? you out would quick that if any underperforming are verticals Maybe then. a that or not follow-up it's call outperforming there just conversely

confirmed If than this card consumer of year, be can't if a I it Seth, I this biggest so closely just that's credit namely of the speak third of end I is And moment, take expected can the higher got was X/X can JPMorgan, use is a credit -- maybe a largest consumer pick the cards, debt. take weaker use QX is Bitcoin, you [indiscernible] also somewhat about see data. but by bit was. and the cash. They've people that economy, most can So by to XXXX, month issue that see card debit we consumer that data. And and attracts to as that similar stripping UBS Occasionally, they even well.

weaker And . slightly so the The the prior [indiscernible] vertical mainly in consumer to up expected. somewhat similar quarters, as of were rest [indiscernible] the first quarter.

Our next question MacWilliams come Ryan will from Barclays. with

So in its of years. these and of new some despite has FiveX wins now AI some last over introduced, deal solutions the technology changes seen being the largest X

these what think customers So -- do you and given to complexity? choosing for your one record these of of given enterprise Does truth shop are for changes, benefit contact one-stop deals? move Like that your increase want FiveX to cloud center what now large data this are the the does these you these of track AI plug source all larger customers solutions? have technology seeing a for these to

advance shift as way have in nature AI you platform engine-agnostic, complexity almost LLMs more right? AI. tailwind from to remarks, deliver can of the we the to to huge these talk over AI So visibility best combination advanced the have is end-to-end brands powers of these their is small it are talked And end you great of play. us change time, and CX, I legacy to of The accrues in to applications data. CX, those yes, begin differentiator the just helps models And the to Ryan, prepared engines, a a the chime to have my us. question. before. to the to provides XX breadth the the cloud not leverage on-premise right, always allows reimagine we're contextual Dan, talked opportunities, across That's it's And the and life most platform, Gen years again, the world, for -- this of about combining platform that are that about it, solutions, that happening next We've of that the but that the but the best engines, those continue complex. about in, large game it's us language and the going or with the the studio strategic

the And only the across data is having an you enterprise brand all contextual way by the a get to and platform.

ahead is it by studio our Gen again, remarks, out changer. spend way, I'll this. So talking us talked a my the And putting a we game competition. lot generative of just competition. this about It is say prepared time the in and AI competitors don't to about away of catch in that that made of having validating revolution our investment be engines. long own ago engine-agnostic. decision They've guess lot what? AI A And take They're our didn't throw approach. and they their pivot built to all to play up We FiveX.

with Moving on to BTIG. Matt VanVliet

you're the and market, where how new into higher state maybe that's to And FedRAMP down deals, in both wanted on local, helping even trickle on also you in the sort well. but process? check the more at win of federal I as maybe ed importantly, the

Just in of you're seeing what those verticals? kind

process. very, at aiming of we're end We're Matt, to XXXX be FedRAMP early that in certified. very the Yes.

the begun state go-to-market market. and going a be in We're government really in X.X local We by been years a while. motion time still again, so haven't yet. doing a doing it's truly business. to or But we're earnest quite another that We've for that

they on on path for agencies to clients that to help get Having FedRAMP financial we're want we're that it that in are sure to go-to-market make because of that a and that. a want some they said large these institutions others federal-based us perspective in where serve make authorization and does that, clients. that sure

us in role a played it's So that securing business.

you as once Mike at But of yet, a sponsor, the haven't what's says, it proceeding. typically authorization considered we process then this And to with a market period year. we'll that the in be about get -- in process end get it's really in gone process you to we XX-month before

which them to to point, are at I taking we're investment lot going, -- of $X.X And it of And the about a right I of But in on to and we management we some of a points EBITDA. we opportunities, money. clearly now ways talk investments, are add be its one with watched lot is. money, demonstrated able cost starting the has million with team XX QX issues the it's thing basis would this quarterly was what one And some believe of, because like advantage further. a with track give XXXX, will pick you

next has question. the At [indiscernible]

as a in know those guys that's record your half. the and second some embedded QX I of talked you guidance about booking, go-lives expecting in were you

So wondering, And . in And do go-live in baked their have [indiscernible] how the is into visibility case of slips, conservatism have that let's you go-live? terms say,[indiscernible] a in you go-live?

I'll chime Yes, other feel we book closely. subscriptions seats, products driven, up of team, goal included. ads turned record a in team seats Barry, our track very, we AI but that manage very again, like are and great. business, product, metrics our number manage We in, of the free QX. start, And them very turn-ups, We once and pipeline. is -- a It's that it our we going to backlog implementation

presented In at recently. our board fact, just we meeting

on has we it -- -- we're have So great it. very visibility

to asking two you're key add about What important retention And it's if I very just things the could dollar-based inflection. that in same that. is to the rate

X got the city the it spot will least up. so they for the flat that of terms But of customers, LTM ramping stepping take give a beat really but in for quarter, in, rate, rate, bigger quarters. they we go-live our up said and the they you the it's meet, is seats typically -- team quarter in last bring is it the been key at So last number And would every rate of our out, quarter spot but the we've that. high

not the and they in dealing And they're It's hopes. with wishes actually go office. back

of truth, Now and pretty but are thinks times, course, customer customers most motivating. of the in the

KeyBanc Thomas the Blakey has with question. next

mentioned impact could trying highlight I view you how question know X or mega most about Dan, the half, for seeing then, for the a just of winning on is X-part for larger to X you, future road people and it would the any if cushion here. growth trust uptick down larger have I talk we're think, second this relates that [indiscernible] had to your there And be think wins in could about have on talked I you the maybe sharp you you in might whatnot, but deal. Congratulations I Barry, this type helpful. keys deals deal. and that, just as just into you backlog, get

Questions.

other. say And not audit like just spending offices no that the deliver and support here us of days us to mean our complexity. corporate our our but our and across the and understanding large their product, regarding they an have, all mentioned you the inspecting looking I'll the their size I ability really at operation and So at with as if of and that look remarks, footprint when the they're thorough prepared you process different trust. and through, global they But went -- inspection at bank, ability competitors. they platform the of look in a the to divisions very I that did

talk they how would to and we And while wanted demonstrate that. that are but wanting really those talk to we were outcomes have things product and so achieve the to understand have you delivered innovation, we critically business the about absolutely, important, about they

you've to can't for and or talk put up what you're You slides done before about just do what going them.

get the trenches. You've into got to

[indiscernible], A can look is, cloud have you're you hypescaler to integration partnerships, understand and dozens dozens at cloud-to-cloud at when of as it's AI data I solutions, earlier multiple spent leverage When it be some people, the folks be we leveraged can from get that moving technical are realized functionality to part why the hasn't the and to been consecutive now. several have [indiscernible] it, get have. these understand, then bank AI the taking -- big that they to literally as shooting engine the we deliver the able and utilized automation you to underlying so of about partners larger and that that that on occasions talked to here days we to look we mentioned And over that before. [indiscernible] really

were in That who How to partners going we we're right? deliver Google And much a that joint the applications deliver leverage the do was we're working Google, so big how is understanding with And example a them. factor, our for to of and solution. AI them right?

a like deliver So it comes global ability and for down our to organization that. support the comprehensiveness and to

imagine, you systems. systems, they As of many can many, hundreds have different

table experience. make mentioned on financial want for for large putting as systems. They've such to CRM several customer Many in has worked solutions our this. dozens, side institutions I of got but remarks, the They prepared team. That the as platform, in in on Mike professional side, the have large customers, about wherewithal, the we've times and operating got team sure services that the their complex with really expertise comes mentioned

just fit right we to we them the decades acquisition our help ACS felt for And as of very played well. right mentioned and a come. ACS, They the Yes. action were -- had to comfortable role that

it the that from you disparate all and need making it have divisions are when strategic data that. about worry of are that don't look and behind operator displays information, takes to coming the the centers so they So together, that those the management contact systems at systems across brings that, what that's decisions that and those the normalizes it

doesn't that those in looking migration. been and FiveX at? the what coming know "Well, oftentimes I've operator middle in a I if or am Genesis ACS off said, we're doesn't Cisco or a data of Is Avaya of care. the frankly, or and And customers

over. move us the So accelerate it helps

and this metrics say, reporting. that out. to all based I Well, on happen, division We it matter. invisible don't floor. you user the it's go make reporting. and the behind my because We let do time can't skew of to curve have on out can over doesn't it's don't They that guess cut "Well, my I that what? -- we going transition certain the to then And payroll come

Tom, and the then, Dan, question. the second part thanks, of And answer to

ease reacceleration quarters, growth. not bifurcated. second So million of is just now year-over-year half We the million $XXX taking for just That arrhythmia. X need $XXX with that

talking the that DBRR of the and at new million were in past, we comes logo million $X you're about deployments remaining the $XX talked million we've that from of As part about. about asking the the full $XXX year between

-- complement to about we and next team. backlog. get not the or XX bit infection. in by services still $XXX in some to the million. team our that that to that I'm month competence And DBRR using the prior it's a professional in largely the all are of of talked s need extent. to to The in But way, largely, that, little is is the totally, the majority backlog, is the referred what we past So

Morgan the with Stanley question. Marshall has next Meta

Meta think joining might be today. I us audio-only

is Yes. Apologies. frozen Nobody video. better than

get your service channel? on trends of those provider just as help are guess a is there Just I channel, Are consideration. same a question trying and cycles as wanted of the guys of, seen deals or larger the kind Aceyus to of is we've to obviously, the get So to those and service and with the obviously, longer a integrator any of quantify is shorten is, on just kind these those migration. get like that. integration way to I used with how -- sense migration, of migrations. larger you own migrations with what tie-into channel -- or longer pace pace there -- sense -- Aceyus you've And can

first. offload Meta. of them program a take sync, I'll very it's a to and involved management not, the large-scale work in Yes, systems customer and migration. and When much Thanks, the through you the there's help the or lot of last integrator migration, a management tend with help take project part whether look at they

of the and our the of of professional services effort actual team. the is work integration configuration done most But by

SIs Now their we're service get fund skill to in to the set where process get enabling is. those of we ours

obvious demand. get those. more And something Aceyus. most for starting for a and on ultimately to But move help, quickly. it last I to hard is more theirs that have the higher of from matter to that to for set We a what leverage of like that much. we it's goal [indiscernible] it's reasons. example [indiscernible] our we're to said, as The shorten like very going and that's personnel really of that very, we too require and But part, in

that so planning we doing. customer and can, get as to we'd able a the there's as they're that changes of they're As to can Oftentimes, sooner. But obviously we like lot lot a of revenue move there's

so have order lot internal some to themselves of And have a in meetings important make decisions. to they

with Piper Sandler. to on Jim move I'll Fish

you're Barry. I'm about to the and of answering win sick Nice on get the the sure question here, board stagecoaches,

in it should is incentivizing you go-to-market with that of aspect,kind guys of that any lead call walk through, incentives you So contribution of think actually of building versus this you're think planning these you're through project this you terms Can mentioned much off terms of years? us to today and we FiveX couple next pulling with in you pull-through. be I it guys SI of changing outside how year. just that you And could where over expect what of last how the changes in question,

months ago. start, free off resellers SIs that lean And services business attention to want feel to subscription I'll other part Fish, boy, close in, paying but a lot into we and designed should pull-through -- and -- look about the XX metric is of Yes, subscription you be and chime if that Dan, revenue project to at kicked that the key was and to. of at as the our And everybody revenue look our equation. we talked really this you revenue

they've And a And from as that is strategy. some thing business these good rate the likely were, It's our offload to other a to of more perspective, bring not there's going part there's our we're we because we XX that we we an ago. frankly, revenue get into of SIs reason and PS incentive think if services And got project very to that a months a our know in it's services growth the pull-through our to on model, was quite that partners, SIs out also margin usage resellers, us named they're a revenue missing why other disproportionate on deal, but is it revenue we compared But that's and subscription. and opportunity deal. these revenue. in

these somewhat still again, U.S. very a it's It's we're we early well. but nice a parties proportion and in why days, it doing as getting implementations been impact are good they're of our internationally days, very a that's especially And our kicked good third very upmarket. -- implementations So growth off.

question. next the has Power will Baird's

win. on the execute that. get big on ability sounds you to to how of and IVAs Congratulations. the your Great any back was I to front, forward? are tied to have in pipeline the there? guess, important AI And that pieces kind were qualitative building platform love come stood some and it out the I I how that. your professional how they look and But to to mega services Fortune-XX for see I'd And color I process. focused of of thought this is as dolphins of color whales mean mean like to detailed kind other I as what others? you kind perhaps guess versus as capabilities

very, the healthy is towards look very you still equation, we the pretty that Yes. the because Thanks, at of pipeline very that if driving that and at pipeline -- center so look if large But When out pipeline I'll with was start of dropped But key of you their is it for that. Will. deal. record. take on when the of out take We're came in that you the size record Dolphin the down AI, whales, the them front otherwise, significantly in, bank it Obviously, decision. equation. a

and IVR but if right? automation their robust and XX in you one, have as your your speech-enabled, it, lot cleared have some accuracy When banks, just call and in check can it's on some what you you do today's you from [indiscernible], get and if and self-service ago, doesn't by good, as years not technology. checks you can banking phone a see or not including things XX can about do think it fact, the just of In most legacy It already call speech-enabled have And I rate. it, this platforms. isn't

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which the to If the the of we use want to this you CRM actually other engine to the are think with we've to use to the about a systems. speed they we types large particular go right to be able particular in of some of say, flexibility fetch were able technically. then But superior come And said, use question. these came to data and those got to engine weeds case, use case, down Mike another been able this we in that out engines one. at us want agnostic things functions and because of bank dozens in answer We've the way that [indiscernible] very customer's competition

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build to personalized you databases. use go one to search can quickly. XX customer-specific the you know very But case, very get want specific if -- data want so a don't You you have you that and you that's

Berg with from now Needham. Scott We'll here

nice Mike, a you'd comment with a Salesforce. really summon status Everyone, on quarter. made the

because we they competitors they as or your effectively Seattle. well. an all a company really based if in when And space interesting in the you're them tightly in investments think exposed partner had with comment that's I partnered

just more You're understand opportunities. on that a better. et if understand I think cetera. of Help I maybe can of one other some that's the would outside first look us the kind you guess My give is like you're commercial bit to status, interesting. But there's technologies, this an early on little what

Yes, Scott.

Summit we is business visibility. we've prepared together. status I in It's based frankly. and mentioned on done think remarks, technology, as It's the -- it's very objective.

status that's much to that's big was It's day, good real it at guess deal. it's It's kind deal. we've a together deal a us. and It's big the a business it's they that, of haven't. metric gets that for who how the deal them, big end a So big and of how measure Salesforce, essentially to a with done to

with Moving Fargo. on to Turrin Michael Wells

those slightly for happen Some It down what encouraging I needs to here. like of key to flat terms in trough. the QX. sounded commentary retention Barry, go for to and throughout to back metrics, to want

where I been visibility, we you And Dan talking still through do sit. need the to mean about you can currently from just get second when half much initially there? move 'XX that's finance execute and outlook to up. to how [indiscernible] the maybe you speak framed how You've

Yes.

into easiest established base new it's installed peers. in [indiscernible] it bring X So to buckets:

see we that higher In [ rate, now terms quarter. clearly dialbacks X can flow go last have we a with new, is not dropped while the had the -- off And inflection slightly. we've we've we point the that X -- one now ] this than but of down X been mining we to compare now higher retention there. added to down in to background been ones had last -- referring it's one a with It's dramatic and we've that Michael, the for of months. quarter expect the increase the We largely yes, the in of to there can't into the an fact percentage somewhat And just expected been way guarantee the the that second XXXX. is was had flat And is retention rate Nothing to back way, is the the based simply rates last change. Also, all in. quarters. spot dollar by it time respect, to that

hoping ago, cooperates, the that. does really, So because closely really looking economy and really to very long that it a forward time tie

all. but analysis of them. services. QX lot X, a is shows given we've the into talking I'm spot And that's not mean. help about professional that if XX what starting got more So base you that one -- of will ramping. floor also a Then have we mechanically I see from just XXXX those came the the on, rate, number, but What the so is breeze that and just enterprises of big companies care last And health the tail in that our the not not in are companies,

We major and Fortune company well. will as get this that finance a moderate service XX help amount institution will of

the Samad question. has Samana next with Jefferies

Barry, I for have question a you.

X. well when core about what to the top through about or as think flowing line? out And And AI, more model subscription, profit pricing you as a about I the well. Just maybe dollar gross should you think that figure I monetization had thinking someone $X gross think should get would the we double revenue being should obviously for earlier maybe of shift. when get of trying about revenue, about maybe if maybe AI profit in a guess versus maybe the you profit is, gross asked wind I tail dollars for year factor I'm on what AI it's WFO maybe and how just that next think over we dollars

Yes.

to to why go gross it one. temptation we've two. big away over what biggest of up growth far the So the the reason I'm the resist is is that is And got resist It just going are about that X And next to, and number semi-fixed time. revenue to year. talk fact cost to temptation the those against fixed going that been I'm not referring that's -- reasons to margins by They're going you've up. the is go going for

this put then say bushel, somewhat standing the that actually gross but we're currently. despite fact the have maintained we now we And happy we've with revenue without where growth margins the pretty

terms from to rates get not revenue. don't get so the and with that automation higher to solutions, they I and and the in [indiscernible] into And these want -- upsell is clearly, and I'm the the gross But in AI clearly margins. going have attach of us X cross-sell number

X%, the rates, it's talking base in that. the total complete than And case attach and with the in X% increases, gross more installed just then what remarks shift wondering the it's is these prepared talked margins. about in negative professional new of bookings other nontrivial. the a you're we time what then are items from And services, not I'm about and both in and which over [indiscernible], had mix [indiscernible] both are,

gross organization one. X transitory. And number the Those not professional is got why investments, traders needs are number there. because that is cost run of the there's a prominently the is initiatives have Thirdly, onetime margin. then another the We've The need we there, no negative India in to levers service also one. at there. revenue a

for have We X additional time question.

question to from our So with is come Peter final going Levine Evercore.

This Peter. an on Bill for this of kind to be $X the from now is million often with Or we uplift the $X.X should every increase story kind of going expansion norm? of to million then. how this will of think care ARR, as and health

every it. focused get the But both that last that are base, and we say on think, installed about, I and seller. folks at would had individuals quarter of it's customer, It's I That's I we then. about base installed now our our amount, that CSM why we an hats wearing were talked highlighted

then do putting with and trying their they on of to taking So issues were head care and sales the customers upsell. day-to-day cross-sell,

divided each team We've for that customer. taken individuals it actually separate into and

So they're cross-sell applications, And focused have there have to a they these the sell they cross-sell carriers quota. CSM upsell, bookings primarily a day for the on and that's day to seller the now and [indiscernible] applications. and

it. at installed to out take more and that so -- installed and farmer in roll [indiscernible] in But most itself that's time. typical increase and these. base And our what base. we contribute effect our more mix that show software the And that [indiscernible] nicely that to will of only even will as we're about should seeing size And hunter sold being of

And again, Q&A this our conclude does session.

So for Mike, I'll closing to it turn comments. you,

us for you Thank today. much Yes. very joining

to as the what prepared time, as XX all the X remarks, achieve XX seeing an to to able amazing said years want more next in I a we a I again public company. joining been and thanks it's As forward years and journey team. FiveXers call. in thank for the were the