Stryker shares tumble despite strong Q2 results and raised guidance
On Friday, Five9, Inc. (NASDAQ:FIVN) maintained its Buy rating and $52.00 price target from analysts at Needham. The cloud contact center provider, currently trading below its InvestingPro Fair Value, impressed with its fourth-quarter financial performance. With annual revenue reaching $1.04 billion and 14.4% year-over-year growth, the company showed robust bookings commentary and metrics that indicate a return to nearly normal demand and sales cycle environments.
The company’s artificial intelligence (AI) segment was particularly noteworthy, with revenues estimated to be at a run rate of approximately $80 million. AI bookings accounted for over 20% of new enterprise logo bookings, and AI install bookings saw a 50% year-over-year increase. Notably, AI was attached to every deal with an annual recurring revenue (ARR) exceeding $1 million. According to InvestingPro data, Five9 maintains a healthy liquidity position with a current ratio of 1.95, supporting its AI expansion initiatives.
Analysts at Needham expressed confidence in Five9’s potential to succeed in the next-generation contact center market, countering the bearish view that existing platform vendors could be displaced by AI-only solutions. The firm’s guidance for fiscal year 2025 suggests that revenue growth rates could continue to accelerate if booking trends remain consistent. InvestingPro analysis reveals that while the company operates with moderate debt levels, analysts expect it to achieve profitability this year, with projected earnings of $2.37 per share for FY2025.
In corporate news, Five9 announced that long-time CFO Barry Zwarenstein is set to retire on March 31st. Bryan Lee, the Senior Vice President of Finance, will step in as the interim CFO. This transition comes at a time when the company is experiencing positive momentum in its AI initiatives, with InvestingPro data showing the company maintains a "Fair" overall financial health score of 2.33 out of 5.
In other recent news, Five9 Inc . reported its fourth-quarter 2024 earnings, significantly surpassing analyst expectations. The company achieved an earnings per share (EPS) of $0.79, exceeding the forecasted $0.70, and reported revenue of $278.7 million, which was above the expected $267.67 million. Five9’s Q4 revenue marked a 17% year-over-year increase, driven by a 19% rise in subscription revenue and a notable 46% growth in AI revenue. The company also set a record with an adjusted EBITDA margin of 23.1%. Looking ahead, Five9 provided a positive outlook for 2025, projecting revenue of $1.14 billion and non-GAAP EPS of $2.60. In terms of analyst activity, Five9’s strategic focus on AI and subscription services has been recognized by industry analysts, including a recent award from Aragon Research for innovation in AI contact centers. Additionally, the company announced the retirement of CFO Barry and the appointment of Brian Lee as interim CFO, signaling a smooth transition in its financial leadership.
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