Five9 Announces Third Quarter 2026 Financial Results
Five9, Inc. (FIVN) filed an SEC Form 8-K — Results of Operations and Financial Condition. Exhibit 99.1 Five9 Announces Third Quarter 2026 Financial Results Q3 Revenue Grew 13% year-over-year Q3 Subscription Revenue Grew 16% year-over-year Five9 Signs Definitive Agreement to Acquire Level AI SAN RAMON, Calif. - November 5, 2026 - Five9, Inc. (NASDAQ:FIVN), the Genius C
How this was made
The 30-second read
Why it matters
The guidance narrows the valuation range for Five9, giving traders a clearer view of expected performance and the impact of the pending acquisition.
Market read
Primary earnings and guidance release; modest trading relevance for short‑term positioning.
What to watch
Potential upside from Level AI integration and higher subscription retention rates may not be fully priced in.
Q3 Revenue Grew 13% year-over-year; Q3 Subscription Revenue Grew 16% year-over-year; Five9 Signs Definitive Agreement to Acquire Level AI
Revenue growth accelerated in subscription revenue and adjusted EBITDA increased while maintaining a 25.1% margin, but GAAP and adjusted gross margins declined and GAAP net income was below the prior-year quarter.
Key metrics
shortened, hover for the filing’s print| Metric | Value | q/q | y/y |
|---|---|---|---|
| Revenue, three months ended September 30, 2026GAAP | $323.3M | – | 13% |
| Subscription revenue growth, third quarter of 2026other | 16% | – | 16% |
| GAAP gross profit, three months ended September 30, 2026GAAP | $172.7M | – | – |
| GAAP gross margin, three months ended September 30, 2026GAAP | 53.4% | – | – |
| Adjusted gross profit, three months ended September 30, 2026non-GAAP | $199.4M | – | – |
| Adjusted gross margin, three months ended September 30, 2026non-GAAP | 61.7% | – | – |
| Research and development expense, three months ended September 30, 2026GAAP | $41.23M | – | – |
| Sales and marketing expense, three months ended September 30, 2026GAAP | $80.72M | – | – |
| General and administrative expense, three months ended September 30, 2026GAAP | $36.50M | – | – |
| Total operating expenses, three months ended September 30, 2026GAAP | $158.4M | – | – |
| Income from operations, three months ended September 30, 2026GAAP | $14.28M | – | – |
| Non-GAAP operating income, three months ended September 30, 2026non-GAAP | $62.4M | – | – |
| Net income, three months ended September 30, 2026GAAP | $14.5M | – | – |
| GAAP net income as percentage of revenue, third quarter of 2026GAAP | 4.5% of revenue | – | – |
| Diluted net income per share, three months ended September 30, 2026GAAP | $0.19 per diluted share | – | – |
| Non-GAAP net income, three months ended September 30, 2026non-GAAP | $63.7M | – | – |
| Non-GAAP net income as percentage of revenue, third quarter of 2026non-GAAP | 19.7% of revenue | – | – |
| Non-GAAP diluted net income per share, three months ended September 30, 2026non-GAAP | $0.82 per diluted share | – | – |
| Adjusted EBITDA, three months ended September 30, 2026non-GAAP | $81.2M | – | – |
| Adjusted EBITDA as percentage of revenue, third quarter of 2026non-GAAP | 25.1% of revenue | – | – |
| Operating cash flow, three months ended September 30, 2026GAAP | $58.4M | – | – |
| Revenue, nine months ended September 30, 2026GAAP | $941.1M | – | – |
| GAAP gross margin, nine months ended September 30, 2026GAAP | 54.2% | – | – |
| Adjusted gross margin, nine months ended September 30, 2026non-GAAP | 62.2% | – | – |
| Income from operations, nine months ended September 30, 2026GAAP | $34.75M | – | – |
| Non-GAAP operating income, nine months ended September 30, 2026non-GAAP | $171.5M | – | – |
| Net income, nine months ended September 30, 2026GAAP | $36.28M | – | – |
| Diluted net income per share, nine months ended September 30, 2026GAAP | $ 0.47 | – | – |
| Non-GAAP net income, nine months ended September 30, 2026non-GAAP | $175.8M | – | – |
| Non-GAAP diluted net income per share, nine months ended September 30, 2026non-GAAP | $ 2.29 | – | – |
| Adjusted EBITDA, nine months ended September 30, 2026non-GAAP | $225.8M | – | – |
| Adjusted EBITDA as percentage of revenue, nine months ended September 30, 2026non-GAAP | 24.0% | – | – |
| Net cash provided by operating activities, nine months ended September 30, 2026GAAP | $164.4M | – | – |
Amounts quoted below without a unit are in thousands, as in the filing’s tables. Per-share figures are as printed.
full year 2026 and fourth quarter of 2026 outlook
- RevenueFull year 2026: $1.269 to $1.275 billion; fourth quarter of 2026: $328.0 to $334.0 million.
- NoteFull year 2026 GAAP net income per share: $0.75 to $0.83, assuming diluted shares outstanding of approximately 77.1 million.
- NoteFull year 2026 non-GAAP net income per share: $3.17 to $3.21, assuming diluted shares outstanding of approximately 77.1 million.
- NoteFourth quarter of 2026 GAAP net income per share: $0.28 to $0.36, assuming diluted shares outstanding of approximately 78.0 million.
- NoteFourth quarter of 2026 non-GAAP net income per share: $0.88 to $0.92, assuming diluted shares outstanding of approximately 78.0 million.
- NoteGuidance does not include any contribution from the pending acquisition of Level AI, which is expected to close in Q4 2026, subject to customary closing conditions.
Capital returns
- Cash paid for repurchase of the Company's common stock was $ 100,011 (in thousands) for the nine months ended September 30, 2026.
What drove it
- Q3 subscription revenue grew 16% year-over-year.
- LTM subscription dollar-based retention rate was 109% as of September 30, 2026.
- LTM subscription and telecom dollar-based retention rate was 107% as of September 30, 2026.
- Management stated that AI revenue growth stepped up significantly.
- Five9 signed a definitive agreement to acquire Level AI for $325.0 million in cash.
Concerns
- GAAP gross margin was 53.4% for the third quarter of 2026, compared to 55.0% for the third quarter of 2025.
- Adjusted gross margin was 61.7% for the third quarter of 2026, compared to 62.8% for the third quarter of 2025.
- GAAP net income was $14.5 million for the third quarter of 2026, compared to $18.0 million for the third quarter of 2025.
- GAAP operating cash flow was $58.4 million for the third quarter of 2026, compared to $59.2 million for the third quarter of 2025.
- The Level AI acquisition is expected to close in Q4 2026, subject to customary closing conditions, and guidance excludes any contribution from the pending acquisition.
What to watch
- Fourth-quarter 2026 revenue guidance of $328.0 to $334.0 million.
- Fourth-quarter 2026 GAAP diluted net income per share guidance of $0.28 to $0.36 and non-GAAP diluted net income per share guidance of $0.88 to $0.92.
- The expected Q4 2026 closing of the Level AI acquisition for $325.0 million in cash.
- Subscription dollar-based retention rate of 109% and subscription and telecom dollar-based retention rate of 107%.
- Whether gross margins recover from 53.4% GAAP and 61.7% adjusted gross margin in the third quarter of 2026.
Balance sheet and cash flow
- Cash and cash equivalents were $ 263,830 (in thousands) as of September 30, 2026, compared to $ 232,084 (in thousands) as of December 31, 2025.
- Marketable investments were $ 433,843 (in thousands) as of September 30, 2026, compared to $ 464,835 (in thousands) as of December 31, 2025.
- Convertible senior notes were $ 738,230 (in thousands) as of September 30, 2026, compared to $ 735,490 (in thousands) as of December 31, 2025.
- Total assets were $ 1,917,154 (in thousands) as of September 30, 2026, compared to $ 1,790,070 (in thousands) as of December 31, 2025.
- Total liabilities were $ 1,078,976 (in thousands) as of September 30, 2026, compared to $ 1,004,253 (in thousands) as of December 31, 2025.
- Net cash provided by operating activities was $ 164,359 (in thousands) for the nine months ended September 30, 2026, compared to $ 142,641 (in thousands) for the nine months ended September 30, 2025.
- Purchases of property and equipment were $ 27,947 (in thousands) and capitalization of software development costs was $ 28,472 (in thousands) for the nine months ended September 30, 2026.
- Net cash used in financing activities was $ 107,655 (in thousands) for the nine months ended September 30, 2026.
Analysis
Five9 reported third-quarter revenue of $323.3 million, up 13% from $285.8 million in the third quarter of 2025. The company said subscription revenue grew 16% year-over-year and described this as accelerating growth. Retention remained above 100%, with LTM subscription dollar-based retention rate of 109% and LTM subscription and telecom dollar-based retention rate of 107% as of September 30, 2026.
Profitability was mixed. GAAP gross margin was 53.4%, down from 55.0%, while adjusted gross margin was 61.7%, down from 62.8%. GAAP income from operations was $14.284 million, compared with $16.043 million, and GAAP net income was $14.5 million, or $0.19 per diluted share, compared with $18.0 million, or $0.21 per diluted share. Non-GAAP net income increased to $63.7 million from $60.6 million, and adjusted EBITDA rose to $81.2 million from $71.7 million, with adjusted EBITDA margin unchanged at 25.1%.
Cash generation was resilient over the first nine months but softer in the reported quarter. GAAP operating cash flow was $58.4 million in the third quarter, compared with $59.2 million a year earlier. Net cash provided by operating activities for the nine months ended September 30, 2026 was $164.359 million, compared with $142.641 million. The company paid $100.011 million for common-stock repurchases during the nine-month period. Cash and cash equivalents were $263.830 million and marketable investments were $433.843 million at September 30, 2026, while convertible senior notes were $738.230 million.
Five9 signed a definitive agreement to acquire Level AI for $325.0 million in cash. The company expects the transaction to close in Q4 2026, subject to customary closing conditions, and said guidance excludes any contribution from the pending acquisition. Full-year 2026 revenue guidance is $1.269 to $1.275 billion, while fourth-quarter revenue guidance is $328.0 to $334.0 million. The principal operating points to monitor are subscription and AI revenue growth, retention, the gross-margin trajectory, and execution of the Level AI transaction.
Management, verbatim
Q3 was another solid quarter, highlighted by accelerating subscription revenue growth, with AI revenue growth stepping up significantly. These results indicate that our Humantic CX strategy is working. As AI reshapes the customer experience landscape, we believe adding Level AI strengthens our competitive position, expands the customers we can serve, and deepens the AI talent behind our continuous innovation.
Amit Mathradas, Chief Executive Officer
Not in the filing
stated, not guessed- Subscription revenue dollar amount for the third quarter of 2026 and third quarter of 2025.
- Reportable segment revenue and segment-level profitability.
- Free cash flow.
- Prior-quarter comparisons for reported metrics.
- Prior outlook, which was not provided, preventing comparison of actual results with prior guidance.
- Guidance for gross margin, operating expenses, and tax rate.
- Dividend amount or dividend declaration information.
Written by an AI language model from the company’s SEC earnings filing (Form 8-K Item 2.02, or Form 6-K for a foreign private issuer). Every figure was checked against the filing text, and a metric whose value, prior period and change do not add up is dropped from the metrics. The model can still misread a table, in the metrics or in the text, so check a number in the filing before you rely on it. Consensus estimates, price targets and share-price reactions are not shown because they are not in the filing. AI-generated research, not investment advice.
Background
Five9 reported a 13% YoY revenue increase to $323.3M and provided FY 2026 guidance, while announcing a $325M cash acquisition of Level AI.
Ticker impact
Five9 disclosed Q3 2026 results and full-year guidance, including a $325M cash acquisition of Level AI.
likely modest pressure as the market prices in the guidance and pending acquisition.
The earnings release provides new numbers and forward guidance that traders can use to adjust positions; the guidance is in line with expectations, limiting upside.
Market effects
The contact‑center SaaS sector may see modest re‑rating as Five9's guidance sets a benchmark for peers.
Limited to U.S. tech equities; no broader regional effect.
Low global impact beyond the cloud‑contact‑center niche.
Counterpoint
If the market underestimates the AI acquisition's long‑term upside, the stock could rally on future earnings beats.
Key entities
- companyFive9, Inc.
Provider of cloud‑based contact‑center solutions.
- companyLevel AI
AI firm being acquired for $325M.
