Five9 (FIVN) Q3 Earnings Report Preview: What To Look For
Call center software provider Five9 (NASDAQ: FIVN) will be announcing earnings results tomorrow after market close. Here's what you need to know.
Last quarter Five9 reported revenues of $222.9 million, up 17.7% year on year, beating analyst revenue expectations by 3.74%. It was a mixed quarter for the company, with revenue exceeding expectations. Five9 slightly raised full year guidance. We were also glad that its gross margin improved. On the other hand, its revenue guidance for next quarter missed analysts' estimates, although non-GAAP EPS guidance was in line.
Is Five9 buy or sell heading into the earnings? Read our full analysis here, it's free.
This quarter analysts are expecting Five9's revenue to grow 13.2% year on year to $224.5 million, slowing down from the 28.5% year-over-year increase in revenue the company had recorded in the same quarter last year. Adjusted earnings are expected to come in at $0.44 per share.
Majority of analysts covering the company have reconfirmed their estimates over the last thirty days, suggesting they are expecting the business to stay the course heading into the earnings. The company has a history of exceeding Wall St's expectations, beating revenue estimates every single time over the past two years on average by 4.29%.
Looking at Five9's peers in the productivity software segment, some of them have already reported Q3 earnings results, giving us a hint of what we can expect. ServiceNow delivered top-line growth of 25% year on year, beating analyst estimates by 0.65%, and Pegasystems reported revenues up 23.6% year on year, exceeding estimates by 12.8%. ServiceNow traded up 3.79% on the results, Pegasystems was up 7.36%.
Read our full analysis of ServiceNow's results here and Pegasystems's results here.
There has been a stampede out of high valuation technology stocks and while some of the productivity software stocks have fared somewhat better, they have not been spared, with share price declining 4.45% over the last month. Five9 is down 6.19% during the same time, and is heading into the earnings with analyst price target of $88.4, compared to share price of $57.88.
One way to find opportunities in the market is to watch for generational shifts in the economy. Almost every company is slowly finding itself becoming a technology company and facing cybersecurity risks and as a result, the demand for cloud-native cybersecurity is skyrocketing. This company is leading a massive technological shift in the industry and with revenue growth of 70% year on year and best-in-class SaaS metrics it should definitely be on your radar.
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The author has no position in any of the stocks mentioned.
