Five9 Inc. reported first‑quarter 2026 results that surpassed expectations, with total revenue of $305.3 million, up 9% year‑over‑year, and net income of $18.4 million. Adjusted earnings per share reached $0.76, beating the consensus estimate of $0.68–$0.70 by $0.08, or roughly 12%.
Revenue growth was driven by a 13% increase in subscription revenue, which now accounts for 82% of total sales and reached an estimated $250 million. Telecom and professional‑services revenue also grew, at 12% and 6% respectively, reflecting a continued shift toward higher‑margin subscription offerings.
Margin expansion was a key highlight: adjusted gross margin rose to 63.6% from 62.4% in the prior year, while adjusted EBITDA margin climbed to 24.4% from 18.8%. The improvement is largely attributable to the higher mix of subscription and AI‑enabled contracts, which command stronger pricing power and lower variable costs.
Management guided for full‑year 2026 revenue between $1.254 billion and $1.266 billion and diluted earnings per share between $3.22 and $3.30, maintaining a 9% annual growth outlook. The upward revision signals confidence in sustained demand for the company’s AI‑native contact‑center platform.
The company also completed a $90 million accelerated share‑repurchase to finish a $150 million program announced in November 2025, and it authorized a new $200 million share‑repurchase program, underscoring a strong capital‑allocation strategy.
"This quarter marks a second quarter of accelerating subscription revenue growth and an important first step in translating our strategy into strong, quantifiable results. With a renewed focus on a performance‑driven culture, we are taking decisive action to sharpen our execution and optimize our organizational design. We are committed to building on this momentum and demonstrating our progress as we position Five9 to win for the next decade," said CEO Amit Mathradas.
"I'm enthusiastic about our significant market opportunity. In my first few weeks, I've been impressed by the strength of our platform and team, and I look forward to executing our strategy to drive growth, increase profitability, and deliver long‑term shareholder value," added Mathradas.
"These actions reflect our deep conviction in our long‑term opportunity and confidence in continuing to generate strong free cash flow while also providing ample strategic flexibility," said CFO Brian Lee.
Investors responded positively to the results, citing the earnings beat, raised guidance, and robust AI revenue growth as key drivers. The company’s performance also highlighted the benefits of its higher‑margin subscription mix and the accelerating adoption of AI across its customer base.
Headwinds remain, including the ongoing impact of macroeconomic challenges and a one‑time vendor discount that boosted Q1 revenue but is not expected to recur. Nevertheless, the company’s focus on AI and its expanding total addressable market position it well for continued growth.
For context, Q1 2025 GAAP net income was $0.6 million and non‑GAAP net income was $47.3 million. Q4 2025 revenue was $300.3 million, with non‑GAAP EPS of $0.80. Full‑year 2025 revenue totaled $1.1491 billion, with non‑GAAP EPS of $2.96, underscoring the acceleration in both top‑line and profitability metrics.
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