Cloud contact center software provider Five9 (NASDAQ: FIVN) reported revenue ahead of Wall Street’s expectations in Q4 CY2025, with sales up 7.8% year on year to $300.3 million. The company expects next quarter’s revenue to be around $299.5 million, close to analysts’ estimates. Its non-GAAP profit of $0.80 per share was 1.9% above analysts’ consensus estimates.

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Company Overview

Taking its name from the "five nines" (99.999%) standard for optimal service reliability in telecommunications, Five9 (NASDAQ: FIVN) provides cloud-based software that enables businesses to run their contact centers with tools for customer service, sales, and marketing across multiple communication channels.

Revenue Growth

Examining a company’s long-term performance can provide clues about its quality. Any business can put up a good quarter or two, but the best consistently grow over the long haul. Over the last five years, Five9 grew its sales at a decent 21.4% compounded annual growth rate. Its growth was slightly above the average software company and shows its offerings resonate with customers.

Long-term growth is the most important, but within software, a half-decade historical view may miss new innovations or demand cycles. Five9’s recent performance shows its demand has slowed as its annualized revenue growth of 12.3% over the last two years was below its five-year trend. We’re wary when companies in the sector see decelerations in revenue growth, as it could signal changing consumer tastes aided by low switching costs.

This quarter, Five9 reported year-on-year revenue growth of 7.8%, and its $300.3 million of revenue exceeded Wall Street’s estimates by 0.7%. Company management is currently guiding for a 7.1% year-on-year increase in sales next quarter.

Looking further ahead, sell-side analysts expect revenue to grow 9.2% over the next 12 months, a deceleration versus the last two years. This projection is underwhelming and suggests its products and services will see some demand headwinds.

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Customer Acquisition Efficiency

The customer acquisition cost (CAC) payback period measures the months a company needs to recoup the money spent on acquiring a new customer. This metric helps assess how quickly a business can break even on its sales and marketing investments.

It’s relatively expensive for Five9 to acquire new customers as its CAC payback period checked in at 175.2 months this quarter. The company’s slow recovery of its sales and marketing expenses indicates it operates in a highly competitive market and must invest to stand out, even if the return on that investment is low.

Key Takeaways from Five9’s Q4 Results

We were impressed by how significantly Five9 blew past analysts’ EBITDA expectations this quarter. We were also glad its EPS guidance for next quarter exceeded Wall Street’s estimates. Overall, this print had some key positives. The stock traded up 2.7% to $17.63 immediately after reporting.

Five9 had an encouraging quarter, but one earnings result doesn’t necessarily make the stock a buy. Let’s see if this is a good investment. The latest quarter does matter, but not nearly as much as longer-term fundamentals and valuation, when deciding if the stock is a buy. We cover that in our actionable full research report which you can read here (it’s free).