FIVN - Earnings call transcript Q1 2022

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Lauren Sloane

Thank you for joining us today.

On the call are Rowan Trollope, 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 of the Company, industry trends, Company 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. impact to future and forward-looking Commission. discussed result be filed including Securities subject adversely that statements the under are pandemic with annual inaccurate, FiveX’s COVID-XX and Factors affect and the in the statements caption substantial other Exchange and uncertainties risks could to and Risk These the the elsewhere risks FiveX’s of and cause reports these quarterly

A discussion the like addition, CEO, reconciliation measures Rowan afternoon, call website call. issued of In investor of FiveX FiveX’s non-GAAP our will during financial available available non-GAAP to over release investors.fiveX.com. to go to make of currently our in Relations versus regarding why Please, this in deck now financial non-GAAP And turn of measures section well at as management reference the GAAP results information use is I’d appendix ahead. earlier in press we this as and Trollope. and the our Investor

Rowan Trollope

Thanks, strong thanks I'm report call to our extremely year. pleased you this a of Lauren, for to to afternoon. the and start joining all

First our which driven XX% business. strength grew the primarily subscription to of LTM basis. corporate an quarter on continues XX% be by XX% year-over-year. This revenue, of approximately accounts revenue increased for Enterprise total Enterprise growth revenue,

QX the Additionally, our demonstrating the levels retention ongoing quarter-over-quarter experienced XXXX. growth, growth rate sequential of through of benefit X% pre-pandemic continued to of outpace COVID we

our Continuing despite to the imperative by The trends: many at automation, this immutable increased grow factors: footprint. expand market our adjusted strong our attractive each growth as professional enterprise platform, transformation, in the platform. penetrated investments I With global see deploying three TAM XX.X% penetration revenue, concurrent individually efficiency of for cloud on to built of organization the our with growth, EBITDA reliability services our over XX.XXX% of on premise AI $XX growth certifications, XXs, costly. barely commitment first clients cloud scarcer space. becomes being is digital platform high of from in seats combination you, public scale, we and contact quarter approximately and LTM security XX,XXX is customers improving TAM, seats, X.XX the and demand. merchant in and continue of starting balanced with We platform the to the efficient our enterprise of significantly center for to million to uptime, driven levels and the result more This the shift security and our the remind as that our largest labor of margins expansion. FiveX's the more with via into three and both years LTM subscription tap worldwide turn, in Taking is billion and highest our came with

these in and our value differentiates enterprises what of the In success to practical platform is addition automation. to fundamentals of as enjoying particular cadence the start the AI we're understand increased innovation,

and times meet our in automate For needed was problems further to by shortage experiencing They which exacerbated instance, customer retaining order of biggest and -- experience improve labor one delivery to handle recurring average abandonment call last customers of recruiting year rates, requirements. and agents. high were of service

savings of calls require would they XX decided solution. $X.X XX,XXX of months per to which month, work million this total labor XX XX% through perform just In approximately in year, our annualized than are deflecting costs. manually, IVA resulting agents to human more or they So March implement this

interactions. handle a the IVA base the the tasks, AI deflect record as agents complicated are contact and bookings. need live mundane At our The We automation for leaving continue in the to use building, center. this to and is using for seen continued see this expand customers to customers level, in IVAs more traction nuanced cases

customers their agents. to with additional moving AI comfort using use they're live on and cases, assist now automation, level AI of to guide increase and As such as

adopt the stated only latest support looking AI also we'll version the These to soon need does last Agent that and Assist, upskilling. capabilities our not onboarding new capabilities automated which releasing the it, agent seen have help when information and offers they FiveX quarter, checklists we AI customers agent ensure need they but training of we've be features to around these compliance. As

example, AI-enabled product, customer our customers through and also is partner this better demand. and services. continue a enabling more real-time their Positioning focuses growing professional agents. our for to partners launch to their as services agents data guidance turning the leader of opportunities workplaces our allowing agents sales expanding we an platform. Agent focus only bring the to and last upsell during innovation plans to onboard AI from broadband support customer, not than to VoiceStream our in one FiveX uses XX in practical ecosystem meet our time on increasing for as agents. continuing to We're ongoing API, space, needed our CSAT another for For through customer reduce call, the earnings gaining traction. reminders to but Since how prepaid calls platform uses referenced This improve Assist who on digital and make is we've capabilities to onboarded Similarly

enable area customers, to exclusive we we insights, of amongst not for by see as cases accelerated more directly We growing interest expanded In QX, they but data to of AI, use analytics only. and the trend AI look party. as real-time center to availability see the invest a addition, in a of a without the stream the this VoiceStream in customers access third need API to contact

services and improving side, we're operational aspects on the professional AI our Finally, go-to-market. of the automation

investments our faster sale value for over time number six the days us IVA of approximately example, by FiveX. and the last implementation a allowing a to clients reduce XX%, time and For to increased between to revenue enabled professional months have services in the IVA starting faster

recently be use new is agents Virtual IVA trained, cases Another cases being do. are be need launched constantly as and our just agents offering. human tuned service need added. illustration Existing use to to

Our perform so use services customers mostly can platform is do these and to by simple themselves.

customers manage to built asked weeks, a matter and closed opportunities I'm us now this just this going out. very many discuss In of them and with we've have pipeline several hence launch. to upmarket. However, a solid secondly our March have

and As contact investing years, and for you vision fulfill to larger been several upmarket know centers. larger move to our win we've

inception million CAGR to and cohort of including the of evidence the the over of in is XXX reach end XXXX the very, very in pursuit success when the a ARR. a leaders significant having going market the XX%. of Dan mega fourth Today vision, business FiveX You've the enterprise trajectory in in globally. the win deployments customers average seen top an that This absolutely concrete in when incontrovertibly to demonstrate part of total we're about our winning and large success we're landmark of customers with with deals a $X achieving since it of to comes increase talks we're fastest-growing this ability quarter our amongst having places of

us growth strong factors we this stay make for that give the prediction. to So the confidence we'll confidently And expect market. in enterprise to show that. continue tuned Five

now one accelerating with is the first upper end that their The of cloud. transition the is the comfortable to market

further this look happening. know any to don't than is our You bookings that to have

platform the that presents the had Dan has a And Second, going be of when moment needs it largest this our now I section. his there's demonstrated can on to mentioned customers. ago, meet more

machine. go-to-market efficient industry-leading our Third,

team: strategic sales enterprise, demand. Our four commercial skills mid-enterprise selling us enable to match with market and

particular in and of partners, also brokers, teams and integrators, doing ISV has theme been by an systems providers, technology service well. These increasingly partners. channel VARs are complemented strategic Our committed extremely mature solution set including

digital as consult from XX% programs. in In who contact often our increasingly in investments grew quarter large their with the and references. years. of part finally, day are already XXX service And a fact, decision-makers mission-critical globally, year-over-year, strategic and validation trust we've by providing at year Fourth, a breeds in first in which is over each end on channel solutions. getting other a customers prospects large And these execute The FiveX the bookings are the helping important seek fifth, success this mega center the XX/X driven crucially software. excellent transformation that And success. we up days built our organization we've service the Sis, is the companies they're engagements, implemented

we scores of and customers continues our will know XX% have This deliver support. and Our professional for to NPS customer thin. industry-leading that services evidenced, both thick be commitment over and by through

expanding our than having, So is up-market as we're the you momentum lastly internationally. ever. success And see with can stronger

the where our step ago, up many the that. We've decided step of U.S. know outside two located. of aggressively As years our done we you investments -- agents are investments about to majority

with from the near outside incidences a coming years to zero little five gone cloud two public today, in ago future. more Our the have U.S. over

Our the And paying has growing marketing partners, are headcount from from last localizations increases XXX non-U.S. the over seen U.S. than like. more These the now. including LTM two XX% year-over-year. we've channel doubled to other XXX off, investments revenue companies spend in years quarter areas outside significant and with clearly first

zero, deals upmarket is and balanced the of of by blocks, that referring continue first direct march in booking. should benefit is indirect platform, from revenue to place. There growth our needed indirect international more mega LTM that have the add expansion summary, even percentage fundamental XXXX. chance By our U.S. You could to teens increased is X% three without that building I the same increase should firmly international to the no the And strong won global simply the the the In the we're benefit gratifying, growth: global we international mid-to-high our of are footprint. as expect mega solidly result deals we and to delivering in quarter bigger. hasten the I'm while

like blocks of us the without on and adjusted $X.X We execution. continue XXXX. by our billion to in I you. to want building expect this is to None focus that these well your employees. XX% now and reach have of result address would possible been our revenue to clockwork-like you mission success I'd EBITDA, our your pursuing to know directly position laser

employ thank contact to our to among currently a conflict anticipate that has and benefits staff facilities Russian go some you in So prompted Russian-Ukraine base of President, We our where Dan turn in last over call Portugal, Dan. the new we very Nizhny to I XXX in the new our which established relocate one talent. to over our will site now of a technology matter Dan, has ahead. other The Burkland. and I'll European And many Novgorod center Portugal. people office call turn before Russian satellite us much. development shutdown

Dan Burkland

across well customers the again Thank differentiate deliver you, unprecedented success, automation in upmarket our with in Rowan. performances this Once how we key records channel QX to bookings wins they bringing globe setting proven now for AI execute contributions as solutions. We've the And growth and help and record with innovation quarter. unique experience. for some for continue while as by bookings also customer to pipeline

automation and omnichannel FiveX. full to This payroll chose in solution an is order provide The initial million our other Agent Assist, workflow over with AI HR for CRMs and $X.X They our ability first and no in several like opted the this share will I'd well salesforce and analytics and have result to improve integrated and Their anticipate all had to as company. experience. be IVAs previous performance FiveX offering the and to dashboards. ARR as in to we example, WFO, software optimize customer automation

full providers, like taking second collections. and members example and They insurance and our WFM the a is looked speech solutions claims FiveX inquiries of for with from the QM, performance based all omnichannel, IVAs to Verint providers and and company, CCaaS XX chose over The powered patients', including full management. I'd U.K. our WFO our care by European medical suite million suite share for at of in analytics,

normally less Microsoft of installed do, their over to this order one now in $X.X our to expansion is for And than in customer of experience. one The with and had story. This customers. recognize their that true initial CRM ARR base along We Management. I'll integrated seats automate million FiveX win brought potential transform example the from as share insurance are to broker ago Dynamics example and result with department an the of Knowledge and three FiveX. anticipate value to a We we to with eGain land-and-expand XX a started years we

several seats. they in So XXXX, expanded and hundred added

up, in and ARR, for our Agent million in added adding $XXXXXX and Assist, is analytics. by above significantly suite to and bringing its anticipated and a win of the IVAs, example the of and $X Now, XXXX for QX over bringing our like they ARPU WFO it powered They compelling QM to ROI. Verint automation to great raising into AI dashboards, value truly significant WFM environment well performance most our also quarter. them To speech added to I'd This an FiveX. due ARR wrap share of

many a largest just the care in fifth, of and million of and siloed operations; their years and and consistent of the company deep them optimize felt out brands. along of differentiated They highly and insights the Knowing Avaya, retail, our evolve FiveX for and health ever very five conglomerate valuable with only I'm our year, analytics and companies through competing many were scope anticipated ARR be of contact with third, NICE with replacing service their complete recall subscription of Cisco, reluctant in all After from on-premises we a and divisions announce record and players towards year part this health that we global bringing thousands who insurance an is the that starting of be a record with their our to FiveX towards other and by ability not deliver acquisitions them largest Genesys, quarters of of in help win with over was one experience; solutions subsidiaries world. could allowing FiveX. for seats and customer software center sheer ramping Verint; the expansions signed delivery very believe $XX powered and broke. service $XX to pharmacy, parcel to over We them and world, continuously largest their the areas This in transform of CCaaS customer, I pleased has this we would are integration all suite a today, may legacy will two, expertise; the this if FiveX. the across with be that provider the were throughout broken. been of You to rolling alone. now all to size FiveX WFO to anticipated they reimagined latter was tens this provide to Well, ability our chosen proven say record of fourth, to effectively ago, ARR with customer our million businesses. one industry, Salesforce; deployments key shared next few the now

you all of continue with all of see to and with we over products to As successfully And can share it financials. all Barry hand I'll with to our companies our Barry? that sizes in execute geographies.

Barry Zwarenstein

Dan. you, Thank

discuss reminder our otherwise website. with will a are appendix had and the quarter GAAP I another that unless exceeding are bottom-line results on First, Reconciliations strong in our investor non-GAAP. results our financial of included indicated, figures to expectations. top presentation our non-GAAP from We

XX% the of the of on year-over-year XX% grew strength of QX by all-time revenue we enterprise driven top last record in business. year, mentioned, primarily Rowan reported As our growth of

our continued and QX levels of or Additionally, X% sequential to COVID we of QX ongoing retention through growth demonstrating for X%, growth XXXX. the rate we of outpace pre-pandemic the both XXXX, reported benefit XXXX experienced QX quarter-over-quarter

up XX%. business In terms enterprise revenue remaining and made XX% the of revenue commercial LTM represented of our composition, our

basis. LTM XXs grew an commercial on the Our business in

next the of total the we continue reminder, on several majority of X% quarter was to in XX% a upmarket. first professional to for As the investments business services. years expect of for Recurring the focus revenue other comprised our we accounted our grow and in revenue teens commercial our moving the as

COVID lap come only remind and as ramp different fully an mega which one-time different the due the customers until and by XXX%. higher retention from LTM larger not offerings. however, to will high our retention to and we automation Over is will the happen higher customers, was the retention onetime and have out at the a QX at that near-term QX XXXX that Quarterly Our means which the demonstratively we XXXX our to time, in I'd COVID platform ones, XXXX. we once other of rate benefit. the Enterprise towards is times rates fluctuations XXXs higher particularly, are rate ARPU trend mix which especially onto LTM inevitable expect retention of denominator dollar-based dollar-based as benefit you lap rate rates like figure,

XX% investments quarter ongoing investments in XXX function First increase customers a We're have margins in organization winning adjusted headcount where due the year-over-year. These PS expect larger larger to year-over-year, more winning. to building mentioned services, points gross areas: implement have previously. XX.X%, and worldwide professional were a successfully up approximately first, the decrease of two basis a scaling been continue and to than are grew we we step and

out are in utilized. global Second, to a basis aggressively ago. I invest adjusted for public XXX a saw basis, out we gross points, currently the cloud basis we continue new partially first on margin to decline, XXX similar to also point build point which sites quarter sequential expansion, sequential that decreased year would like to only

First quarter the reset. year, decline of due have the investments. this typically added we margins gross to sequentially And headwind increased FICO

professional saying, and been accelerated have transitory. cloud services we investments are public As in the

in Therefore, as or margins full gross gross with in the second We quarter improving in revenue beyond. and the half quarter. the the XXXX at margins a second improving percent XXXX are to them annual to second XXXX we year above decline start and forecasting for of and XX.X% expected peak of in the expect slightly finish continue to

gross lower quarter XXX year-over-year driven in of a XX EBITDA adjusted as basis points of marking Expenses year-over-year by margins. revenue. margin, the decreasing G&A by representing decreased improvement by basis XXth consecutive below basis expense, G&A points the approximately to XXX percent due First XXXX revenue $XX.X a quarter percent a margin points was XX.X% QX million, as of

was flat non-GAAP diluted $X.XX quarter First per EPS which relatively was share, year-over-year.

balance flow and highlights. cash guidance, to turning some Before sheet

our one or normal earnings even our customers. weeks concretely, XX% we we of to a last them at system. call, implementing approximately days result validated later During issued than invoices the the Invoices illustrate February of the January DSO each The and billing November the billing before October, as day typically new by less a To first new risen higher post almost implemented X than mentioned system and issuing was than carefully After invoice days, our on XX day had that X. of X by as we normal, increased -- we X, were dollar this almost went in value December of rate out quarter. XX% the on March and invoices rate XX%. had normal in

March exceptionally As XX a DSO just reporting as spot month reduction for days. average operating which was million. rate strong mentioned first that in was quarter-over-quarter the the for first the very we quarter share And XX while normal to pleased days, a meaningful drive I'm DSO This DSO in result improvements in us $XX.X I've saw three each quarter quarter. in performance accounts turn at record a cash in helped resulted came This flow receivable. month

approximately reflected Due cash March our the our we another your the expand mentioned cash planned you half modeling. make Imprint to a expect DSOs. April to increase million margin this financing flow in the representative $X in quarter, first flow million instead XXXX. and I continue delay was by operating from to other XX, to of in low ability, demonstrated the payment operating in margins, cash shareholders NOLs substantial to can flow response Last in by reflected $XX paid with the driven in $XX Imprint shareholder longer flow. overall and We adjusted term earnout note our on million One cash item that EBITDA to meaningfully

the on We've associated attract guidance, move new and closing impact was Before incremental the results. of center of onetime with let discussing me first to you estimate our office resulting would between our and and slide be $X.X the these which the share costs costs join who X from non-GAAP onetime the from and million the Russian included conflict. million, costs our development excluded like financial We Portugal Russian employees in million Russia-Ukraine to direct $X $XX in immigrate results. quarter to onetime

And Portugal of for today's quarter operating allowed year full and remarks the for have guidance. guidance We our finish prepared like higher the expense bottom our ongoing to XXXX. second now discussion in the in with I'd line a

decline, would guided implied growth the pattern which line, is X%. also like QX typical In midpoint pre-pandemic than have represents we're guiding of top into slightly to million, point XX%, growth between the sequential and $XXX.X quarters. of terms QX out revenue when midpoint year-over-year highest to we decrease of a compared declines ever when the past which X% to at in I a rate guided we the heading that is smaller X% to second to the

For we year-over-year revenue which in the year, are the from represents an increase XX% to our million, growth XX%. million rate $XXX guidance raising from full of the midpoint to $XXX.X

investments to continued in in at As on enterprise and bottom sequentially. raising we've year are $X.XX to and of non-GAAP we revenue seasonal these guidance diluted and midpoint is run for with are cloud public international headwind line to QX quarter the services quarter-over-quarter we from share pattern and strong the line, the investments as of the a per $X.XX $X.XX, of decline incremental typical decrease $X.XX are momentum. we well in guidance reflects the our come in midpoint faced the Portugal, professional diluted QX making per drive a a second full share. rate our in Despite EPS The guiding as further of

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

with strongly fourth in it quarter in quarter. For sequentially revenue, third the years, to more we expect in increase the past guidance consistent and

our Relations the $X.XX non-GAAP curve, posted we LTM Given the improve success expenditures. pleased to quarter capital Operator, help refer with subscription estimates we performance for website fourth share Enterprise our are ongoing for Investor more XXs the the to on run. which improve further revenue upmarket, very presentation significantly this will to in approximately summary, expect to and and quarter drive our the moving quarter. in including third taxes additional long shape of please first ahead. continue in EPS go and In and count, Please growth

Operator

Barry, thank you very much.

to session Hynes. our will We going by first question-and-answer DJ begin

DJ Hynes

versus on guys, for to Awesome a great customer. $XX to characterize Like quarter. what would in there lead in you I ask a look for? what you do AI. competition the sales like space? do curious the awesome. see that How Like congrats Hey use Rowan, million kind you direct you you measure on question That's can Just that? data how want your pitch? of

Rowan Trollope

Well, -- a to stand revenue -- me I separate up item DJ, were in competition, reports Because question, the you're as of or but tough how the if that. you for we like terms the if line question. misunderstood anything asking nobody it's asking our maybe this thanks the

on broken do So stand… It's separate the category. customer, the do not that, with how how do how stands. we around the engage how was and when question framing think But end get competitively don't customer, more when we and your know that really do we a win I of compete we we we into at

DJ Hynes

the like technical Yeah Yeah. differentiation.

Rowan Trollope

starting to backed And thought we the was company number with that. and we world Quadrant best continued Look, Magic we in the in think, started all the analysts Systems. the in of was invest top sort in Yeah. the so right was and we've – what by one as technology that that that they place. bought the up Inference I world And best

then competitors. are approach side. different of of who we think years, very the massive they is launching our built So And That's customer big on of now are built. innovation is of that been just is called have for is is a it because brand-new one a leap base, not why to completely part I'm than Studio which several fundamentally, I any working X. way the technology number a release That our aware our any on they competitors, forward. the

world, us them text those have built different the We in on Googles of were speech. apply that conversations those own the those and technologies to that's can different so that was to layer build R&D trying is that our And hyperscalers the commodity customers the of we've giants use recognition been a by spend to as a the apply strategy the all had technologies. to different text to back lead. result, natural able our money also above on And then Inference technologies contact perspective competition This DJ our the choice and was take say, of had giving is you of and a language sits and let's we've speech that, not lot to this technology ASR exactly perspective of resources to Amazons, automatic on ones can speech we being underlying up two that the or processing, to are kind a reflect center with which on this keeping unique stand shoulders make and resources and leverage point. ways. their and big which – And and sort many

up now stands clearly and just and in product success that extremely of cases. the with concepts leader. the use proof customer demonstrated look starting customers. references having. we're It's the real in demonstrations So to well And It's generate we're

of our or health labor $X.X implementing and total largest savings One labor per our costs, completely savings which million represented customers their their care by agents – XX% just had they this by I replaced XX% of XX had think technology. space drove implementing year, a solution in IVR, the

piece do you the So references it's we kinds a guys going, of clearly in those to want are get have the best our it. large technology that, customers wow enterprise and of

DJ Hynes

years follow-up five along say Great seats But contact do ball kind contact those how that center color. In you manned people crystal these seats question. has by you today. has today take same like, A a of X,XXX people? think of many a that by lines center manned

Rowan Trollope

center. you they're XX%. doing gate, of out number say. seeing hard It's Right numbers to into less? general you When industry. of fairly volume center like we're than be it less. give Much I'd it different shared contact I'd we're goes work It's hard kinds what looks five volume, in mean, kind Well, looks How depends the today? contact with low the the of But the that XX%, And humans I average putting answer. and like much contact those like doing to say, that but at years the high and at. a of the up your XX%, anticipate in XX% cubicles, their on of calls, are a at I about look radically very of to terms good could what on but at the what dramatically. very replacing really think low-value they're really, today, – people center that look sea automation just volume, and a with

asked, X it's couldn't – I I fairly you crystal to XX an number to give it's think to So ball-wise, going be dramatic next exact you in like but going the be years.

DJ Hynes

Yeah, Thanks, helpful. yeah. Super guys. Congrats.

Rowan Trollope

Thanks, DJ.

Operator

We'll on a Ryan question from at move to MacWilliams Barclays. now

Ryan MacWilliams

Like love on mega to lumpier quarter, move turning just deals where last driving more half right? perspective is after It could really shift larger Barry talking of mega these a next is your feels insight. of these to these of some customer? in your win? ready it deals work-from-home a like, like standpoint, as center? FiveX how mega deals kind year, now on of kind could Rowan now second Thanks, second So many we from see congrats we about this win they for were now little guys. on just some like I'd customers question is a why of make up-market. would hear Just the larger or are FiveX time terms And the little And these just start revenue year? love upside cloud a could deals from adoption guide technology maybe like contact then the to it for

Rowan Trollope

the four perfect I our Yeah, part. I'll first readiness. is take factors. One think a of storm, It's

to $XX weren't years that take ready the talked customer ago, the four about. So just of million on Dan we size

ready. technology wasn't years now four We're ago. Our ready

particular this customer got one. So we those parcel references channel land I mean we're And get great back mentioned called service like Dan they reference. able a to the delivery them, in and we customers. those land as

this it – what Number second the and over is on don't I post-pandemic. is – customers last the ready. the this success pipeline is deals driving but that if if really are breeds I mega The the years. think that's the hasn't been is thing So don't success. in is know exactly know I three, is it market there few way

portfolio. And think to think fact I ready we have wouldn't get important thing technologies the on in it's becoming the move. now that premises. can I breadth just really then of – that you So get is the fourth that this the you is And our and market I cannot cloud

you can't They work premises. an you're on-premises IVA. So get customer if don't today, an on

You must cloud. go to the

normal extremely now another reason a cloud that that factor it's compelling enterprise large to is there good to so cloud some beyond And for reason. the stuff the move

again once a in ARR it's of it's team and – And So I a creating that years ago ahead customer we Dan's anticipation creating off off They're hitting paying scenario. all of look the team we this at And of just million investments all four we perfect started invested $XX the started and Dan storm kind think those it. they these paying in combination restructuring now. of see landed. two this are you or factors.

Barry Zwarenstein

your going in parts if four you I'm don't respond to to Ryan question mind. And

is year. megas part that the still continuing the service, delivery biggest and first that is contributor of The this to currently the is parcel ramp

That spun was that SI for also the is of contributing year. is is the one rest ramping also and second too currently the The out.

third rest about one And the The XX ramp probably throughout this almost small latest quarter earlier we then of be that that Dan finally now months live is going fourth and the quarter company of majority a announced on, is be contribution will starting talked that that the the the and ago year. British which will insurance next year. there that will it will ramp but from the in one,

Ryan MacWilliams

the Avaya Rowan future is But for we're Rowan on that, the kind go new like or still center in deployments. maybe one squeeze standpoint on or for inference? more How FiveX? that contact does logo just rest a contact the to in for about and of the center is hearing wins with seed after of after grabs inference it no-brainer Dan. the some for up it Like FiveX growth Cisco wins I'll IVA

Rowan Trollope

answer sorry. but to give It's was Dan always Ryan FiveX a a no-brainer softball to to That go with I'll directly. it that

Dan Burkland

Yes.

now So you're Ryan ready at come thanks they if the IVAs to pole companies for the the transition transform you're foot to your but in get the natural there question. It's when make they their so cloud. are to a great and – way to in can position in do door. front with IVAs. the end the cloud all around it's the to right And with migrate a the Not do

advantageous puts think it in we us very a position. So

Ryan MacWilliams

All guys. right. Thanks

Dan Burkland

Ryan. Thanks,

Operator

next our question at Stanley. take from Meta we'll Marshall Morgan And

Meta Marshall

able you've And versus Great. newer XX% were A Thanks. of ones any partner me. could Maybe seeing a many some couple kind differentiation growth. just brought Clearly, for are kind services color you of of on you've noted differentiation or while. the on professional to you're – that questions would kind just between give difficulty the professional given hiring of that first lot Thanks. partners as you've add of you of of just of or the kind a the the traction. some just you of then add, the additional where for services as like? maybe But environment had you the people finding some

Dan Burkland

a signing cylinders up great we're which And across are Meta. only prepared all Yes. our – in the beginning six When you I'll all they're like a the smarter channel professional as can smarter and they they into presale in their from and the side. solutions them our on that. opportunities only not on accounts remarks, those we got But be the you new certified leverage are and infancy take Rowan us mentioned from we've of on we partner. not us complex take the introduce but their categories look partners At we've offer to signed the last even ones over knowledgeable get own, as first a when for have five with services ones and productivity for the long part up Thank that and standpoint and that more more get side on as responsibility standpoint more reference underestimated. term maturing helps several years. should that and that can hitting or

labor. the services-wise, As finding hiring piece professional shortage we no in far have that sense. no There's certainly as problem

typically lot think the that platforms on-prem a they move services future. had than the have that services about all with over whole ours, are require organizations legacy more folks make professional you those cloud to providers because If the same to that looking see

to of only to and handpick we've not leaders, able best select very hand been senior that but best over pick FiveX. to some And so can they the high-performing the come

we So issue in whatsoever. and on that no both professional on hiring services it's have -- the sales And goes side.

Meta Marshall

Thanks. Great.

Operator

that, [Operator I'm next I'd Having sorry at on Berg question -- from to Instructions] to said move our Scott that's like Needham.

Scott Berg

on Hi the to single fantastic XX-part a everyone, going Congrats out quarter. question. I'm throw

there. push you theater platform you're some in because usual? a but the years is know as around the environment costs sales it's over move either within for of of cycles Barry's last from pivot get employees over better the I headwinds what over business some FiveX general your of I kind But there to couple No, I made that on there sales question a maybe commentary sales the to follow-up right to European still partner ready. demand So all Russian big guess into out, of wanted apps in heavy any that now Europe. seeing or to

Rowan Trollope

for operations Okay. But a wasn't I'll a cost kind one, Barry good big European give been continent it? of in Well some the mainland in from business made high Germany We've our on is doing we've Number here. great. We multipart let invested really that after perspective. including the I'll there. Russian us. was and comment hires the that. focus We've said going level that's

So actually that even to Europe's going bolster doing great. further. And this is

So to employees, R&D good seed center of we're team chunk as going to a an the Russian a in Portugal. use establish

And ability base right the a think plan to into move as center of go we going that is there's going R&D so from you there a expand low-cost really a culture. And R&D center, Europe to And know to establishing and resources local we're aggressively Portugal FiveX. we be very and to after talent that's helpful. for help local that FiveX large having into an in going

Barry jump So opportunity. that. as on that's a this if comment -- a we're you and using kind start of let great I'll will Financially,

Barry Zwarenstein

a attract, -- been very the well on. that optimistic has run But majority quite how over. middle this with meaningful things for new exactly that are briefly yet, cost. $X know many we then costs come major Real over. fees $XX add country is people going life and immigration and and people the mundane decision to able This in get the actually to extremely of to these severance Yeah. don't Scott comes be like and And in will million retain the we components because million severance, cost million, well we're that the so people $X office the in up we're that shutting a hence to range caught of major to $XX legal the move, also a are and an that and this that number and are to down million come

Rowan Trollope

$X expense clear that to million restructuring, somewhere $XX with the to onetime associated million Yeah. in be employee. $XX,XXX $XX,XXX And just of that's to per

small very a when think in before wouldn't of a and our way to it's R&D to been out advantage. got broke war you in so this of lot willing in Russia we're current and actually that number as new we've Russia, couldn't situation using of small because about a ramping out, center interest given this a hiring actually it's it. establishing at think employees employees, broke a sort just we Ukraine relocating when our have conflict move. have and But the -- the right, out more in level successful this about new you done So this training And

Barry Zwarenstein

the just And what is that line on higher cost absorbed a to guidance. we've in Portugal. said also And I there call in slightly bottom emphasize our Scott,

Rowan Trollope

Yeah.

Barry Zwarenstein

are You mute. on

Rowan Trollope

You are on mute.

Scott Berg

everyone. Thanks again Congrats.

Barry Zwarenstein

All right.

Rowan Trollope

Scott. you, Thank

Operator

from UBS. Moving on at question to the next Taylor is McGinnis this

Taylor McGinnis

in growth recurring If revenue my sequential so the it look X% the for Yeah. actually growth question. at was looks pre-pandemic levels. quarter, I in Hi. implied Thanks with of line the like much taking

of assume the to in relative place? those sequential larger about recurring might or some these -- the So falling mega quarter been growth have not And into deals of some Barry we how as ramp? we look I light as to levels think to start revenue should is fair little ramping have bit in of a pre-pandemic that really guess, and ahead, might terms it deals

Barry Zwarenstein

Yeah.

another as on But the deals, described So example arithmetic the to COVID that and rate emphasize stream, assume sequential these future And year-over-year. you the gets XX% you X%, that Taylor, you megas benefited growth save first these sequentially, on I'll from cetera, et I is then the in on mega goes quarters. part everything customarily in XX% terms we've growth that time, could extremely of and in cetera. some remember XXXX clearly in arithmetic XX%, the et question. next of we all sequential On with basically three benefited. come I and X%, XX% a to provide. And given you if ramping with as the do terms well have of is we growth growth, which XX%, scenarios the prudent though, one guidance you where want guidance, from hand, earlier

COVID that not hand a are benefited XXXX, in XX%, you that gives X.X% other you if and you rates XXXX, XX% instead growth. get and the X%, On use growth XXXX, like then

sticking it in to unfold. our year with guidance, we'll own going meantime, prudent update But conclusions our So make as your so to quarters we're the and the early in guidance. you're need beyond the

Taylor McGinnis

Congrats on helpful. That's Thanks. quarter. Perfect. the

Barry Zwarenstein

you. Thank

Operator

Samana. Moving to Samad on and Jefferies,

Samad Samana

the Great. on one Hey, congrats is for this Dan. evening. Maybe echo the results. I'll good strong

years pre-pandemic then the maybe well last been all frames like you we've cycles? home as reflects I at you're can Versus it of very itself same? as -- comparing seeing in to was deals? rates the couple just what staying us getting deal understand same that sustaining, quarter The guidance shorter, that as longer, close around help the of time but strong. -- Are maybe Just also they and terms and sounds

Dan Burkland

Yes. Thanks for that.

channel-driven in COVID through. they've goes not bring perhaps first and continuing as any they're cloud time several longer. opportunities, -- with cycles, the and sales where condensed had actually the slightly set tone we're Regarding already also evangelizing or Whether they working and We're getting more us not, meetings. it's

engage of ROI So a midstream not begin processor, in create be and more to a tend a process the process. to brought trying and create we to

going success and start we've them. where the seeing the disrupt are the disrupt So that, see those condense really enterprise. for that the environment head. biggest, the is higher to that technologies, for enterprises a So, got is seeing over Once have They in means position in The accelerating. a to other in end to order their you're prove mega a and business a continuing momentum particular we as At cases start breeds large in not first to start slightly starting in first, that well. to but position moving case they forth very scratch the your if all you do some value? viable which the that, case the there's overall go able market, ROI it evangelize up and all enterprise their reduction the Rowan we're incremental deals is be into where they alluded benefits? even momentum market, go in get if really to benefits enterprise we for deals, and go end and for their the largest earlier that of of FiveX them cloud, high the and year cycle. and and alternative time to CCaaS and success, those these you set seeing to once year, of the to Should believe the they strategic why the

Samad Samana

color. appreciate Thanks the I Great. guys.

Dan Burkland

Yes.

Operator

Jim Fish from We'll at take a question now Sandler. Piper

Jim Fish

unlocking guys quarter Hey, we guys team on guys. these deals you it's from quarter. the and clear Last you larger talking were Congrats have. Rowan the about

as environment should space. that had software part bake-offs given for hasn't you've contract just $XX call usage the a usage on and contract been competitive obviously ARR And that AWS Connect element typical about subscription. have part of. or the of we secondly, could What be especially really Just let's Google deals, Thanks. the how these of Microsoft this is already? entering been now million XX-XX, that the larger think it, just you you've Dan, kind in the pricing is mentioned of guys

Rowan Trollope

Maybe Microsoft the a space with they certainly I'll they're take partnership seeing a first and not we're product. And just very a competitive. Google -- announced not mean start-up Amazon this part, in small the have I around or have Google. --

that the to platform in than fair sort Genesys of FiveX Realistically to serve build share seeing winning deals. really Genesys stage Do very these show Amazon like -- deals. the Dan said us large, are I'll it reiterate, we're and if Amazon. of it's Genesys these these of That not we're terms our they where we're gone buy their and are against wrong. we using NICE And want not horribly where go more to happen, be and we try own last potentially because and something up -- And previously they doesn't and that cloud Dan? does a very we're it's NICE in or in So want to make honest. just a customer. think companies Amazon fighting decision in product has seeing But to much we're ability in early on. competitors. And the terms obviously of

Dan Burkland

deals or spot of evaluate and the they and build IT go our for create we to what R&D get top product to either customize go look on. the they're hands the No mean at but a that and and Yes. wherewithal they the shop have it. production finished to and years on. -- automation do that I into you Connect -- AI you have really it's on they're all eager and those with if said of it appetite I think that's enhance ready to recognize Amazon take mega all And competition before can their they

can And running hit with much much they quicker. and us so the ground sooner

Rowan Trollope

off rearchitected platform to and and That's years. R&D the over scale a frankly, really the think our to execute we of we focus we built, the think I investment here that's in deals. we've competitors big terms the land what's large the few been ability side. to platform That that paying That's customers. ability mega these jumped rearchitected entire also on of in and last And I the scale largest investments us right platform now. ahead R&D, of allowing with the these in the

helping also that's So as well.

Jim Fish

side. that on sense. on customer Makes just Dan, the usage large up following

Dan Burkland

Oh the not Yes usage, sorry. that usage FiveX. going customer is to put through

whom So be may sometimes these large some a with large have for companies ours. distance carriers, contracts of multiyear long calling partner of

careful pulling make news the in good because and that. the honor sure $XX the is that's the don't So alone there that have at accretive revenue million over we're subscription usage day very we And to of end that we lower-margin down. margin

Jim Fish

sense. Congrats, Makes guys. Thanks

Dan Burkland

Thank you, Jim

Operator

Taking Terry Truist. our question Tillman from at next now

Terry Tillman

not prepared one of quarter. I'll to Yes. a It's $XX go my if not thanks two-parter. for deal taking a million ask That's my there's question. I'm prepared ARR slight as question well. Dan questions. with this upcoming going my

the Agent have in Assist because second product general? new kind of of are it's of to then Thank impacting new So going And IVA on attach of part a tail terms just how you in we seems I'm back you terms cycle. base just of how real compare ARR rate where and it of like think the IVA like installed deals? in do terms long in to key them will with innings curious, on it is, you. traction the a

Dan Burkland

Yes.

question. great So

the IVA. with innings. We're are early very We very in just getting started

FiveX human great our look at use to it automate? over at But and can are comfortable platform. adding saying the and a being. already own getting our comfortable the about the we low-complexity about with other initial getting think market, to to I to voice those attach going last And going Alexa really it folks which that we're you for years and XX% What talked think are speaking interfaces. comfort customers an if we've let's And about of business We're you that's that to a with, more we the we people. Enterprise to talking story. If that's start use probably the going high-volume cases. as in customers are quarterly love meeting. the the case, with It's interface more and bring behaviors obvious of talked else start kind level, not else What Siri is on voice that seen we've rate

homes, off the kind I by we years before technology those people think our throughout same if prevalent been were them. would of scared interfaces six introduce five, ago have

better I timing So The think getting and is critical. was better. accuracy

And see more in bring streamline we can you'll many more market of these standard cases as it and so implement in to kind the down adoption. be

So being coming that's installed yes that if one. we revenue base, have in. you where any the to spades. really it And level look is to incremental And our starts then opportunity meaningful there to penetrate yet truly just at in

So, stay tuned.

a Agent to IVA I comfortable of whether is it's that's automation probably companies that's going -- more think as -- as an it. increase the decade Assist, to that's continue this and industry adoption getting individuals particularly or started get with more just or

that's historical hey can whether where Well, phone leveraging what it's Agent you common cases with to we As wait calls to listening and management that is about into Assist answer do your companies for it's XX% asking we're asked coach either -- a Rowan Then And do transcribing are the it's minute there the don't question that to that so agents say, you to prescribe base your contribution versus leverage why and questions. of same do one we're is to being are far just think to apply can whether the And and being things or out this mundane unaddressed I other deliver IVA use is for time. every pull Agent new on data? said, you then automation? real-time calls level. question if the automation, think and the functions. asked data in many these those revenue, are on repeatable as are Assist and question most opportunities text conversations that as and the the insights

IVA Let's to automate go that. apply

is So, lot Agent it's this Assist. a and a of of combination consultation

opportunities. they think help IVA us The Assist more both Agent feed I each will other. feed

Terry Tillman

Congrats. you. Thank

Operator

to Baird. now on R.W. Moving Will Power

Will Power

some Great. just understand I'd all for of that. I color very mean understand strong -- and on the know I question. now any key important like further virtual are bookings bookings? you Any key love in out taking components referenced that those again those obviously better quarter. to break growers. how are How the drivers you to way Thanks the front view observer. record would to there IVA So, be the more great.

Rowan Trollope

take if financial want don't outside know I Barry the of to you that one?

Barry Zwarenstein

side, very the case the as and but the however, strong. In of prepared bookings or mentioned, what record well, were mentioned bookings And much, we is the record. seeing say base in were were very is IVAs, momentum it remarks, it so installed dice the you On -- not in the Dan remarks, likes enterprise, well, doing there. as reasonably bookings. of cut of just pretty terms and the they well had COVID strong a obviously the prepared is those during and -- they The

Rowan Trollope

sorry. about revenue, you thought Dan's about asked the but the side. bookings. Well, had probably I I'm had asked on booking you comment

Sorry problem. about that. a Director That's

Dan Burkland

hitting All think at here the XX-plus cloud on transition to first these almost the right. being the only that about the can for space the fact driving for the time technology into looking asked really I And having this cloud. been bookings Yes, the all years from we you is you talk decisions. driving cliché, but when cylinders, bookings? drivers I've center the about that drivers in brought the what bookings, -- years, think key is automation the are contact in to the the And XX make folks get the is you record very

Agent implement so absolutely technology XX% available, number one not. having attach And say and because the that fabulous. our though folks they say hear the And that's because the is see trying rate when it made demonstrations, or day about are they of we finding the whether and decisions the majority story, is I Assist, this they they is this what one are we're talk being

we'll cloud adding start is step into this first Okay, off of our then let's premises automation. get the and everything

FiveX looking to it's what a partnership. to technology and but this helping for you than And that from implement morning that's technology, -- fact most the question deals all to because the take the three it's they extract with then do accomplish? win So, the the of of dovetail the technology think at, well is and they vendors not us what technology as we had were is the where that to optimize story I one of. that itself. talked There's -- right? or as I customer just shared they partnership would going value more It's the ever just need. overkill advantage exploit they're trying the And which The way to what suppliers, what

and But heavily it? tailor can And So, we that? ongoing oftentimes and selling to model business the overlooked emphasize And we advantage believe that's team allows at an do or the process. we the going to they're changes have an support take best consult gets area in a it. do we're because their that to the of neglected how solution in it that have that that they and come will them have optimize we out professional services

Will Power

That’s great. you. Thank

Operator

Northland Capital Next is Markets. Latimore, Mike

Mike Latimore

Thanks. Great. Great.

that this just Just the given thinking on about still strength in in the the continuing what think past? kind with you've been should consistent IVA year? pricing, bookings, we IVA is grow And to of ARPU

Barry Zwarenstein

Yes, I'm ahead going Daniel. to -- hand it go to

Dan Burkland

XX human you the So, -- agent, itself the plus probably we've software a for a the versus got, to $XXX what about roughly IVA $XXX come IVA. we've the think -- and that agent virtual about Think pricing as times human if per applying that out with cost.

their basically XX% Rowan of to XX ROI found the offsetting IVA. have So alluded workforce extremely that were what is health the we just roughly earlier compelling. with the the company care example humans

just we a in becomes very compelling industry new that so that And our the had dynamic past. in haven't

in attach know about having XXX-seat what, so, we'll about, say, adoption talked percentage over contribute level the well, with many of customers to One deflect dealing types you're I your my It might you be. what new you're What what's a on the totally in is the the we you talk to -- center, to customer the can is contact handling get rate know that industry type there. going And IVAs? depends and of rate? Oftentimes questions though, you're your the factors. rates. adoption don't that We of demographic to ARPU, really the so comfort

factors into all that these there's So weigh it.

incremental point. across that you to start it penetrating increase to But it entire and So of increase. when start So again, have to from then human, aren't look degree? the expand will it it an what volumes of may at really ARPU, we Will base, see the go takes that. big a this see the the contribute just it's seats hundreds at high starting enough and decide Sure. of how that you'll say base. Hard up? until try That's to To customers when lot there?

Mike Latimore

Thank All you. right. Got it.

Operator

And ladies the have to questions turn I'll time is we and for our speakers. today. gentlemen, that all it back

Rowan Trollope

Thank today. very joining really We that the you and us time -- you much. appreciate

strength Again, to quarter strength continues, great behind for strength. FiveX us. the Another

storm numbers. year. We with fantastic And are rest very the to growth of Thank a we're much. strategic in can the that you enterprise see and this sort you of looking of opportunities forward our in all perfect

Five9 (FIVN) 29 Apr 222022 Q1 Earnings call transcript