Open the filing on EDGARFive9 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 CX Platform provider, today reported results for the third quarter ended September 30, 2026.
Third Quarter 2026 Financial Results
- Revenue for the third quarter of 2026 increased 13% to $323.3 million, compared to $285.8 million for the third quarter of 2025.
- 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 for the third quarter of 2026 was $14.5 million, or $0.19 per diluted share, and 4.5% of revenue, compared to GAAP net income of $18.0 million, or $0.21 per diluted share, and 6.3% of revenue, for the third quarter of 2025.
- Non-GAAP net income for the third quarter of 2026 was $63.7 million, or $0.82 per diluted share, and 19.7% of revenue, compared to non-GAAP net income of $60.6 million, or $0.78 per diluted share, and 21.2% of revenue, for the third quarter of 2025.
- Adjusted EBITDA for the third quarter of 2026 was $81.2 million, or 25.1% of revenue, compared to $71.7 million, or 25.1% of revenue, for the third quarter of 2025.
- GAAP operating cash flow for the third quarter of 2026 was $58.4 million, compared to GAAP operating cash flow of $59.2 million for the third quarter of 2025.
“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
Third Quarter & Recent Business Highlights
- 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
- Signed Definitive Agreement to Acquire Level AI for $325.0 million in cash
- Named a Leader in the 2026 Gartner® Magic Quadrant™ for Contact Center as a Service
- Recognized as a Leader in the 2026 IDC MarketScape: Worldwide Agentic Contact Center-as-a-Service Platforms
- Named to the 2026 Best Workplaces in Technology list by Fortune Media and Great Place To Work®
- Supplemental metric disclosure is available on the Investor Relations section of Five9's website at https://investors.five9.com/
Business Outlook
Five9 provides guidance based on current market conditions and expectations. Five9 emphasizes that the guidance is subject to various important cautionary factors described in the section entitled "Forward-Looking Statements" below, including risks and uncertainties associated with the ongoing impact of macroeconomic challenges.
- For the full year 2026, Five9 expects to report:
- Revenue in the range of $1.269 to $1.275 billion.
- GAAP net income per share in the range of $0.75 to $0.83, assuming diluted shares outstanding of approximately 77.1 million.
- Non-GAAP net income per share in the range of $3.17 to $3.21, assuming diluted shares outstanding of approximately 77.1 million.
- For the fourth quarter of 2026, Five9 expects to report:
- Revenue in the range of $328.0 to $334.0 million.
- GAAP net income per share in the range of $0.28 to $0.36, assuming diluted shares outstanding of approximately 78.0 million.
- Non-GAAP net income per share in the range of $0.88 to $0.92, assuming diluted shares outstanding of approximately 78.0 million.
With respect to Five9’s guidance as provided above, such guidance 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. Please refer to the “Reconciliation of GAAP Net Income to Non-GAAP Net Income - Guidance” table for more details, including important assumptions upon which such guidance is based.
Conference Call Details
Five9 will discuss its third quarter 2026 results today, November 5, 2026, via an audio-only Zoom webinar at 4:30 p.m. Eastern Time. To access the webinar, please register by clicking here. A copy of this press release will be furnished to the Securities and Exchange Commission on a Current Report on Form 8-K and will be posted to our website, prior to the conference call.
A live webcast and a replay will be available on the Investor Relations section of the Company’s web-site at https://investors.five9.com/.
Non-GAAP Financial Measures
In addition to disclosing financial measures prepared in accordance with U.S. generally accepted accounting principles (GAAP), this press release and the accompanying tables contain certain non-GAAP financial measures. We calculate adjusted gross profit and adjusted gross margin by adding back the following items to gross profit: stock-based compensation, depreciation, intangibles amortization, acquisition and related transaction costs and one-time integration costs, costs related to reduction in force plans, and lease amortization for finance leases. We calculate adjusted EBITDA by adding back or removing the following items to or from GAAP net income: stock-based compensation, depreciation and amortization, interest expense, interest income and other, acquisition and related transaction costs and one-time integration costs, costs related to reduction in force plans, office closure lease termination costs, impairment charge related to consolidation of corporate headquarters, lease amortization for finance leases, one-time expenses related to strategic consulting services for operational review, other cost-reduction and productivity initiatives, one-time expenses related to advisory services for long-term strategy and growth, one-time expenses related to advisory services for research and development transformation, legal fees related to the securities class action, and provision for income taxes. We calculate non-GAAP operating income by adding back or removing the following items to or from GAAP income from operations: stock-based compensation, intangibles amortization, acquisition and related transaction costs and one-time integration costs, costs related to reduction in force plans, office closure lease termination costs, impairment charge related to consolidation of corporate headquarters, one-time expenses related to strategic consulting services for operational review, other cost-reduction and productivity initiatives, one-time expenses related to advisory services for long-term strategy and growth, one-time expenses related to advisory services for research and development transformation, and legal fees related to the securities class action. We calculate non-GAAP net income by adding back or removing the following items to or from GAAP net income: stock-based compensation, intangibles amortization, amortization of discount and issuance costs on convertible senior notes, exit costs related to closure and relocation of Russian operations, acquisition and related transaction costs and one-time integration costs, costs related to reduction in force plans, office closure lease termination costs, impairment charge related to consolidation of corporate headquarters, one-time expenses related to strategic consulting services for operational review, other cost-reduction and productivity initiatives, one-time expenses related to advisory services for long-term strategy and growth, one-time expenses related to advisory services for research and development transformation, legal fees related to the securities class action, and deferred taxes - tax adjustments from an acquisition. For the periods presented, these adjustments from GAAP net income to non-GAAP net income do not include any presentation of the net tax effect of such adjustments given our significant net operating loss carryforwards. Non-GAAP financial measures do not have any standardized meaning and are therefore unlikely to be comparable to similarly titled measures presented by other companies. The Company considers these non-GAAP financial measures to be important because they provide useful measures of the operating performance of the Company, exclusive of factors that do not directly affect what we consider to be our core operating performance, as well as unusual events. The Company’s management uses these measures to (i) illustrate underlying trends in the Company’s business that could otherwise be masked by the effect of income or expenses that are excluded from non-GAAP measures, and (ii) establish budgets and operational goals for managing the Company’s business and evaluating its performance. In addition, investors often use similar measures to evaluate the operating performance of a company. Non-GAAP financial measures are presented only as supplemental information for purposes of understanding the Company’s operating results. The non-GAAP financial measures should not be considered a substitute for financial information presented in accordance with GAAP. Please see the reconciliation of non-GAAP financial measures set forth in this release.
Forward-Looking Statements
Forward-looking statements notice
This news release contains certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including the statements in the quote from our Chief Executive Officer, including statements regarding the intended benefits of the Level AI acquisition and the projected closing date thereof, the benefits of our Humantic CX strategy and the fourth quarter and full year 2026 financial projections and expectations set forth under the caption “Business Outlook,” that are based on our current expectations and involve numerous risks and uncertainties that may cause these forward-looking statements to be inaccurate. Risks that may cause these forward-looking statements to be inaccurate include, among others: (i) the impact of adverse economic conditions, including the impact of macroeconomic challenges, global tariff changes and announcements regarding same, continued inflation, uncertainty regarding consumer spending, high interest rates, fluctuations in currency rates, the impact of current and potential global conflicts, and other factors, may harm our business; (ii) if we are unable to attract new customers or sell additional services and functionality to our existing customers, our revenue and revenue growth will be harmed; (iii) if our existing customers terminate their subscriptions or reduce their subscriptions or telecom usage, or fail to grow subscriptions at the rate they have in the past or that we might expect, our revenues and gross margins will be harmed and we will be required to spend more money to grow our customer base; (iv) because a significant percentage of our revenue is derived from existing customers, downturns or upturns in new sales will not be immediately reflected in our operating results and may be difficult to discern; (v) if we fail to manage our technical operations infrastructure, our existing customers may experience service outages, our new customers may experience delays in the deployment of our solution and we could be subject to claims for credits or damages, among other things; (vi) if we are unable to attract and retain highly skilled leaders and other employees, our business and results of operations may be harmed; (vii) as AI solutions will likely perform an increasing proportion of contact center interactions, if we are unable to replace decreases in subscription revenue from licenses with revenue from the sale of additional AI solutions, our revenue, results of operations and business will be harmed; (viii) further development of our AI solutions may not be successful, may not achieve market acceptance or compete effectively against our competitors, and may result in reputational harm and our future operating results could be materially harmed; (ix) the AI technology and features incorporated into our solution include new and evolving technologies that may present both legal and business risks; (x) we have established, and are continuing to increase, our network of technology solution distributors and resellers to sell our solution; our failure to effectively develop, manage, and maintain this network could materially harm our revenues; (xi) our quarterly and annual results may fluctuate significantly, including as a result of the timing and success of new product and feature introductions by us, may not fully reflect the underlying performance of our business and may result in decreases in the price of our common stock; (xii) our historical growth may not be indicative of our future growth, and even if we continue to grow rapidly, we may fail to manage our growth effectively; (xiii) failure to adequately retain and expand our sales force will impede our growth; (xiv) the use of AI by our workforce may present risks to our business; (xv) the contact center software solutions market is subject to rapid technological change, and we must develop and sell incremental and new solutions in order to maintain and grow our business; (xvi) our growth depends in part on the success of our strategic relationships with third parties and our failure to successfully maintain, grow and manage these relationships could harm our business; (xvii) the markets in which we participate involve a high number of competitors that is continuing to increase, and if we do not compete effectively, our operating results could be harmed; (xviii) we continue to expand our international operations, which exposes us to significant macroeconomic and other risks; (xix) security breaches, cybersecurity incidents, and improper access to, use of, or disclosure of our data or our customers’ data, or other cyber-attacks on our systems, could result in litigation and regulatory risk, harm our reputation, our business or financial results; (xx) we may acquire other companies or technologies, or be the target of strategic transactions, or be impacted by transactions by other companies, which could divert our management’s attention, result in additional dilution to our stockholders or use a significant amount of our cash resources and otherwise disrupt our operations and harm our operating results; (xxi) we sell our solution to larger organizations that require longer sales and implementation cycles and often demand more configuration and integration services or customized features and functions that we may not offer, any of which could delay or prevent these sales and harm our growth rates, business and operating results; (xxii) we rely on third-party telecommunications and internet service providers to provide our customers and their customers with telecommunication services and connectivity to our cloud contact center software and any failure by these service providers to provide reliable services could cause us to lose customers and subject us to claims for credits or damages, among other things; (xxiii) prior to 2025, we had a history of losses and we may be unable to sustain profitability; (xxiv) our stock price has been volatile, may continue to be volatile and may decline, including due to factors beyond our control; (xxv) we may not be able to secure additional financing on favorable terms, or at all, to meet our future capital needs; (xxvi) failure to comply with laws and regulations could harm our business and our reputation; (xxvii) we may not have sufficient cash to service our convertible senior notes and repay such notes, if required, and other risks attendant to our convertible senior notes and increased debt levels; (xxviii) risks that we may not execute repurchases in full under our announced stock repurchase program, or may not achieve the intended benefits therefrom; and (xxix) the other risks detailed from time-to-time under the caption “Risk Factors” and elsewhere in our Securities and Exchange Commission filings and reports, including, but not limited to, our most recent annual report on Form 10-K and quarterly reports on Form 10-Q. Such forward-looking statements speak only as of the date hereof and readers should not unduly rely on such statements. We undertake no obligation to update the information contained in this press release, including in any forward-looking statements.
About Five9
Five9 is the proven, open cloud platform for customer experience. Cloud-native since 2001 and built by voice experts for the agentic era, Five9 powers contact centers for more than 4,000 enterprises across 140+ countries, including leading health systems, financial institutions, and organizations across every major industry. The Five9 platform, powered by Genius AI, serves every channel and workflow, together with the governance, control, and ecosystem flexibility that even the most regulated enterprises demand. Practical AI that learns from every interaction, driving real outcomes for customers and the businesses that serve them. Smarter CX with every interaction. For more information, visit www.five9.com.
CONDENSED CONSOLIDATED BALANCE SHEETS
| September 30, 2026 | December 31, 2025 |
|---|
| ASSETS | | |
| Current assets: | | |
| Cash and cash equivalents | $263,830 | $232,084 |
| Marketable investments | 433,843 | 464,835 |
| Accounts receivable, net | 158,457 | 130,984 |
| Prepaid expenses and other current assets | 78,610 | 43,107 |
| Deferred contract acquisition costs, net | 97,075 | 88,714 |
| Total current assets | 1,031,815 | 959,724 |
| Property and equipment, net | 185,689 | 164,635 |
| Operating lease right-of-use assets | 43,403 | 46,375 |
| Finance lease right-of-use assets | 11,359 | 14,216 |
| Intangible assets, net | 40,958 | 51,166 |
| Goodwill | 366,253 | 366,253 |
| Other assets | 42,428 | 10,725 |
| Deferred contract acquisition costs, net - less current portion | 195,249 | 176,976 |
| Total assets | $1,917,154 | $1,790,070 |
| LIABILITIES AND STOCKHOLDERS’ EQUITY | | |
| Current liabilities: | | |
| Accounts payable | $43,957 | $29,973 |
| Accrued and other current liabilities | 104,043 | 84,120 |
| Operating lease liabilities | 15,240 | 12,922 |
| Finance lease liabilities | 8,602 | 8,480 |
| Deferred revenue | 86,070 | 77,515 |
| Total current liabilities | 257,912 | 213,010 |
| Convertible senior notes | 738,230 | 735,490 |
| Operating lease liabilities - less current portion | 42,824 | 42,116 |
| Finance lease liabilities - less current portion | 2,958 | 6,090 |
| Other long-term liabilities | 37,052 | 7,547 |
| Total liabilities | 1,078,976 | 1,004,253 |
| Stockholders’ equity: | | |
| Common stock | 75 | 77 |
| Additional paid-in capital | 1,180,850 | 1,163,072 |
| Accumulated other comprehensive income (loss) | (795) | 897 |
| Accumulated deficit | (341,952) | (378,229) |
| Total stockholders’ equity | 838,178 | 785,817 |
| Total liabilities and stockholders’ equity | $1,917,154 | $1,790,070 |
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
| Three Months Ended | Nine Months Ended |
|---|
| September 30, 2026 | September 30, 2025 | September 30, 2026 | September 30, 2025 |
|---|
| Revenue | $323,303 | $285,832 | $941,066 | $848,806 |
| Cost of revenue | 150,574 | 128,552 | 431,066 | 382,390 |
| Gross profit | 172,729 | 157,280 | 510,000 | 466,416 |
| Operating expenses: | | | | |
| Research and development | 41,232 | 35,218 | 122,976 | 116,230 |
| Sales and marketing | 80,715 | 71,657 | 239,907 | 235,180 |
| General and administrative | 36,498 | 34,362 | 112,363 | 105,952 |
| Total operating expenses | 158,445 | 141,237 | 475,246 | 457,362 |
| Income from operations | 14,284 | 16,043 | 34,754 | 9,054 |
| Other income (expense), net: | | | | |
| Interest expense | (3,549) | (3,087) | (10,198) | (11,022) |
| Interest income and other | 4,914 | 5,660 | 15,964 | 23,880 |
| Total other income (expense), net | 1,365 | 2,573 | 5,766 | 12,858 |
| Income before income taxes | 15,649 | 18,616 | 40,520 | 21,912 |
| Provision for income taxes | 1,151 | 643 | 4,243 | 2,209 |
| Net income | $14,498 | $17,973 | $36,277 | $19,703 |
| Net income per share: | | | | |
| Basic | $0.19 | $0.23 | $0.48 | $0.26 |
| Diluted | $0.19 | $0.21 | $0.47 | $0.22 |
| Shares used in computing net income per share: | | | | |
| Basic | 75,047 | 77,528 | 75,666 | 76,716 |
| Diluted | 77,258 | 87,295 | 76,690 | 88,413 |
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
| Nine Months Ended |
|---|
| September 30, 2026 | September 30, 2025 |
|---|
| Cash flows from operating activities: | | |
| Net income | $36,277 | $19,703 |
| Adjustments to reconcile net income to net cash provided by operating activities: | | |
| Depreciation and amortization | 57,866 | 44,911 |
| Reduction in the carrying amount of right-of-use assets | 16,114 | 15,174 |
| Amortization of deferred contract acquisition costs | 73,957 | 63,568 |
| Accretion of discount on marketable investments | (3,271) | (6,658) |
| Provision for credit losses | 1,114 | 1,254 |
| Stock-based compensation | 100,571 | 114,443 |
| Amortization of discount and issuance costs on convertible senior notes | 2,740 | 3,614 |
| Impairment charges of long-lived assets | 8,518 | 835 |
| Interest on finance lease obligations | 510 | 743 |
| Deferred taxes - excluding tax benefit from acquisition | 175 | 23 |
| Deferred taxes - tax adjustments from an acquisition | - | 524 |
| Other | 1,249 | 159 |
| Changes in operating assets and liabilities: | | |
| Accounts receivable | (28,587) | (24,569) |
| Prepaid expenses and other current assets | (13,466) | 1,291 |
| Deferred contract acquisition costs | (100,591) | (85,513) |
| Other assets | 6,722 | 2,645 |
| Accounts payable | 13,296 | 523 |
| Accrued and other current liabilities | (19,871) | (8,073) |
| Deferred revenue | 7,702 | (3,514) |
| Other long-term liabilities (including non-current portions of operating and finance lease liabilities) | 3,334 | 1,558 |
| Net cash provided by operating activities | 164,359 | 142,641 |
| Cash flows from investing activities: | | |
| Purchases of marketable investments | (288,134) | (569,150) |
| Proceeds from sales of marketable investments | 62,806 | 114,406 |
| Proceeds from maturities of marketable investments | 256,766 | 622,026 |
| Purchases of property and equipment | (27,947) | (18,722) |
| Capitalization of software development costs | (28,472) | (29,121) |
| Payments of initial direct lease costs | - | (286) |
| Net cash (used in) provided by investing activities | (24,981) | 119,153 |
| Cash flows from financing activities: | | |
| Repayment of outstanding 2025 convertible senior notes at maturity | - | (434,405) |
| Proceeds from exercise of common stock options | 3,386 | 3,118 |
| Proceeds from sale of common stock under ESPP | 7,008 | 7,921 |
| Cash paid for repurchase of the Company's common stock | (100,011) | - |
| Principal repayment on financing liability | (10,779) | - |
| Payment of finance lease liabilities | (7,259) | (7,183) |
| Net cash used in financing activities | (107,655) | (430,549) |
| Net increase (decrease) in cash, cash equivalents and restricted cash | 31,723 | (168,755) |
| Cash, cash equivalents and restricted cash: | | |
| Beginning of period | 234,131 | 364,185 |
| End of period | $265,854 | $195,430 |
RECONCILIATION OF GAAP GROSS PROFIT TO ADJUSTED GROSS PROFIT
(In thousands, except percentages)
| Three Months Ended | Nine Months Ended |
|---|
| September 30, 2026 | September 30, 2025 | September 30, 2026 | September 30, 2025 |
|---|
| GAAP gross profit | $172,729 | $157,280 | $510,000 | $466,416 |
| GAAP gross margin | 53.4% | 55.0% | 54.2% | 54.9% |
| Non-GAAP adjustments: | | | | |
| Stock-based compensation | 5,690 | 6,852 | 17,791 | 21,332 |
| Depreciation | 14,327 | 9,917 | 40,267 | 26,343 |
| Intangibles amortization | 3,389 | 3,464 | 10,208 | 11,028 |
| Acquisition and related transaction costs and one-time integration costs | - | 2 | 44 | 2 |
| Costs related to reduction in force plans | 1,306 | - | 1,306 | 1,565 |
| Lease amortization for finance leases | 1,922 | 2,108 | 6,046 | 6,043 |
| Adjusted gross profit | $199,363 | $179,623 | $585,662 | $532,729 |
| Adjusted gross margin | 61.7% | 62.8% | 62.2% | 62.8% |
RECONCILIATION OF GAAP NET INCOME TO ADJUSTED EBITDA
(In thousands, except percentages)
| Three Months Ended | Nine Months Ended |
|---|
| September 30, 2026 | September 30, 2025 | September 30, 2026 | September 30, 2025 |
|---|
| GAAP net income | $14,498 | $17,973 | $36,277 | $19,703 |
| Non-GAAP adjustments: | | | | |
| Stock-based compensation | 34,927 | 33,339 | 100,571 | 114,443 |
| Depreciation and amortization | 20,105 | 15,772 | 57,866 | 44,911 |
| Interest expense | 3,549 | 3,087 | 10,198 | 11,022 |
| Interest (income) and other | (4,914) | (5,660) | (15,964) | (23,880) |
| Acquisition and related transaction costs and one-time integration costs | 2,005 | 1,620 | 5,481 | 4,090 |
| Costs related to reduction in force plans | 4,324 | 403 | 4,324 | 8,169 |
| Office closure lease termination costs | - | - | - | 95 |
| Impairment charge related to consolidation of corporate headquarters | - | - | 8,382 | - |
| Lease amortization for finance leases | 2,114 | 2,300 | 6,622 | 6,619 |
| One-time expenses related to strategic consulting services for operational review | - | - | - | 1,265 |
| Other cost-reduction and productivity initiatives | - | 1,851 | (3) | 2,825 |
| One-time expenses related to advisory services for long-term strategy and growth | 565 | - | 3,660 | - |
| One-time expenses related to advisory services for research and development transformation | 2,242 | - | 2,242 | - |
| Legal fees related to the securities class action | 664 | 392 | 1,865 | 901 |
| Provision for income taxes | 1,151 | 643 | 4,243 | 2,209 |
| Adjusted EBITDA | $81,230 | $71,720 | $225,764 | $192,372 |
| Adjusted EBITDA as % of revenue | 25.1% | 25.1% | 24.0% | 22.7% |
Non-GAAP adjustments do not have a material impact on our worldwide income tax provision due to the tax treatment of the non-GAAP adjustments reported, and our domestic valuation allowance position.
RECONCILIATION OF GAAP OPERATING INCOME TO NON-GAAP OPERATING INCOME
| Three Months Ended | Nine Months Ended |
|---|
| September 30, 2026 | September 30, 2025 | September 30, 2026 | September 30, 2025 |
|---|
| Income from operations | $14,284 | $16,043 | $34,754 | $9,054 |
| Non-GAAP adjustments: | | | | |
| Stock-based compensation | 34,927 | 33,339 | 100,571 | 114,443 |
| Intangibles amortization | 3,389 | 3,464 | 10,208 | 11,028 |
| Acquisition and related transaction costs and one-time integration costs | 2,005 | 1,620 | 5,481 | 4,090 |
| Costs related to reduction in force plans | 4,324 | 403 | 4,324 | 8,169 |
| Office closure lease termination costs | - | - | - | 95 |
| Impairment charge related to consolidation of corporate headquarters | - | - | 8,382 | - |
| One-time expenses related to strategic consulting services for operational review | - | - | - | 1,265 |
| Other cost-reduction and productivity initiatives | - | 1,851 | (3) | 2,825 |
| One-time expenses related to advisory services for long-term strategy and growth | 565 | - | 3,660 | - |
| One-time expenses related to advisory services for research and development transformation | 2,242 | - | 2,242 | - |
| Legal fees related to the securities class action | 664 | 392 | 1,865 | 901 |
| Non-GAAP operating income | $62,400 | $57,112 | $171,484 | $151,870 |
RECONCILIATION OF GAAP NET INCOME TO NON-GAAP NET INCOME
| Three Months Ended | Nine Months Ended |
|---|
| September 30, 2026 | September 30, 2025 | September 30, 2026 | September 30, 2025 |
|---|
| GAAP net income | $14,498 | $17,973 | $36,277 | $19,703 |
| Non-GAAP adjustments: | | | | |
| Stock-based compensation | 34,927 | 33,339 | 100,571 | 114,443 |
| Intangibles amortization | 3,389 | 3,464 | 10,208 | 11,028 |
| Amortization of discount and issuance costs on convertible senior notes | 947 | 933 | 2,740 | 3,614 |
| Exit costs related to closure and relocation of Russian operations | 132 | 105 | 49 | (440) |
| Acquisition and related transaction costs and one-time integration costs | 2,005 | 1,620 | 5,481 | 4,090 |
| Costs related to reduction in force plans | 4,324 | 403 | 4,324 | 8,169 |
| Office closure lease termination costs | - | - | - | 95 |
| Impairment charge related to consolidation of corporate headquarters | - | - | 8,382 | - |
| One-time expenses related to strategic consulting services for operational review | - | - | - | 1,265 |
| Other cost-reduction and productivity initiatives | - | 1,851 | (3) | 2,825 |
| One-time expenses related to advisory services for long-term strategy and growth | 565 | - | 3,660 | - |
| One-time expenses related to advisory services for research and development transformation | 2,242 | - | 2,242 | - |
| Legal fees related to the securities class action | 664 | 392 | 1,865 | 901 |
| Deferred taxes - tax adjustments from an acquisition | - | 524 | - | 524 |
| Income tax expense effects | - | - | - | - |
| Non-GAAP net income | $63,693 | $60,604 | $175,796 | $166,217 |
| GAAP net income per share: | | | | |
| Basic | $0.19 | $0.23 | $0.48 | $0.26 |
| Diluted | $0.19 | $0.21 | $0.47 | $0.22 |
| Non-GAAP net income per share: | | | | |
| Basic | $0.85 | $0.78 | $2.32 | $2.17 |
| Diluted | $0.82 | $0.78 | $2.29 | $2.15 |
| Shares used in computing GAAP net income per share: | | | | |
| Basic | 75,047 | 77,528 | 75,666 | 76,716 |
| Diluted | 77,258 | 87,295 | 76,690 | 88,413 |
| Shares used in computing non-GAAP net income per share: | | | | |
| Basic | 75,047 | 77,528 | 75,666 | 76,716 |
| Diluted | 77,258 | 77,883 | 76,690 | 77,200 |
(1)Non-GAAP adjustments do not have a material impact on our worldwide income tax provision due to the tax treatment of the non-GAAP adjustments reported, and our domestic valuation allowance position.
SUMMARY OF STOCK-BASED COMPENSATION, DEPRECIATION AND INTANGIBLES AMORTIZATION
| Three Months Ended |
|---|
| September 30, 2026 | September 30, 2025 |
|---|
| Stock-Based Compensation | Depreciation | Intangibles Amortization | Stock-Based Compensation | Depreciation | Intangibles Amortization |
|---|
| Cost of revenue | $5,690 | $14,327 | $3,389 | $6,852 | $9,917 | $3,464 |
| Research and development | 6,297 | 929 | - | 6,896 | 731 | - |
| Sales and marketing | 8,339 | 6 | - | 8,401 | 11 | - |
| General and administrative | 14,601 | 1,454 | - | 11,190 | 1,649 | - |
| Total | $34,927 | $16,716 | $3,389 | $33,339 | $12,308 | $3,464 |
| Nine Months Ended |
| September 30, 2026 | September 30, 2025 |
| Stock-Based Compensation | Depreciation | Intangibles Amortization | Stock-Based Compensation | Depreciation | Intangibles Amortization |
| Cost of revenue | $17,791 | $40,267 | $10,208 | $21,332 | $26,343 | $11,028 |
| Research and development | 21,069 | 2,654 | - | 24,415 | 2,147 | - |
| Sales and marketing | 25,571 | 16 | - | 33,330 | 59 | - |
| General and administrative | 36,140 | 4,721 | - | 35,366 | 5,334 | - |
| Total | $100,571 | $47,658 | $10,208 | $114,443 | $33,883 | $11,028 |
RECONCILIATION OF GAAP NET INCOME TO NON-GAAP NET INCOME - GUIDANCE
| Three Months Ending | Twelve Months Ending |
|---|
| December 31, 2026 | December 31, 2026 |
|---|
| Low | High | Low | High |
|---|
| GAAP net income | $21,935 | $28,055 | $58,182 | $64,266 |
| Non-GAAP adjustments: | | | | |
| Stock-based compensation | 37,500 | 35,500 | 138,072 | 136,072 |
| Intangibles amortization | 3,363 | 3,363 | 13,570 | 13,570 |
| Amortization of discount and issuance costs on convertible senior notes | 949 | 949 | 3,689 | 3,689 |
| Exit costs related to closure and relocation of Russian operations | - | - | 49 | 49 |
| Acquisition and related transaction costs and one-time integration costs | 2,432 | 1,432 | 7,912 | 6,912 |
| Costs related to a reduction in force plan | - | - | 4,324 | 4,324 |
| Impairment charge related to consolidation of corporate headquarters | - | - | 8,382 | 8,382 |
| Other cost-reduction and productivity initiatives | - | - | (3) | (3) |
| One-time expenses related to advisory services for long-term strategy and growth | 1,091 | 1,091 | 4,751 | 4,751 |
| One-time expenses related to advisory services for research and development transformation | 1,208 | 1,208 | 3,450 | 3,450 |
| Legal fees related to the securities class action | - | - | 1,865 | 1,865 |
| Income tax expense effects | - | - | - | - |
| Non-GAAP net income | $68,478 | $71,598 | $244,243 | $247,327 |
| GAAP net income per share: | | | | |
| Basic | $0.29 | $0.37 | $0.77 | $0.85 |
| Diluted | $0.28 | $0.36 | $0.75 | $0.83 |
| Non-GAAP net income per share: | | | | |
| Basic | $0.90 | $0.95 | $3.23 | $3.27 |
| Diluted | $0.88 | $0.92 | $3.17 | $3.21 |
| Shares used in computing GAAP net income per share: | | | | |
| Basic | 75,700 | 75,700 | 75,700 | 75,700 |
| Diluted | 78,000 | 78,000 | 77,100 | 77,100 |
| Shares used in computing non-GAAP net income per share: | | | | |
| Basic | 75,700 | 75,700 | 75,700 | 75,700 |
| Diluted | 78,000 | 78,000 | 77,100 | 77,100 |
(1)Represents guidance discussed on November 5, 2026. Reader shall not construe presentation of this information after November 5, 2026 as an update or reaffirmation of such guidance.
(2)Stock-based compensation expenses are based on a range of probable significance, assuming market price for our common stock that is approximately consistent with current levels.
(3)Acquisition and related transaction costs and one-time integration costs are based on a range of probable significance for completed acquisitions, and no new acquisitions assumed.
(4)Non-GAAP adjustments do not have a material impact on our worldwide income tax provision due to the tax treatment of the non-GAAP adjustments reported, and our domestic valuation allowance position.
Contacts
Tony Righetti
SVP, Investor Relations
IR@five9.com