According to a recent report, the global cloud-based contact center market is estimated to grow to $56.4 billion by 2028 from $11 billion in 2021 at a CAGR of over 22%. Five9 (Nasdaq: FIVN), a leading provider of cloud software for contact centers, is already witnessing strong growth and is upping its partner and product offerings to make it even bigger.
For the fourth quarter, Five9’s revenues grew 39% to $127.9 million, ahead of the market’s forecast of $115.1 million. EPS was $0.34 per share, also ahead of the market’s forecast of $0.21 per share. For the fiscal year, revenue grew 33% to $434.9 million, and EPS increased to $0.99.
For the first quarter, Five9 expects revenues of $122-$123 million and an EPS of $0.12-$0.14. The market was looking for revenues of $122.61 million and EPS of $0.13. For the year, Five9 expects revenues of $518.5-$521.5 million and an EPS of $0.75-$0.79. The market is expecting revenues of $520.63 million and an EPS of $0.77.
Five9’s Product Enhancement
During the quarter, Five9 announced a new set of features to help customers understand the value of its acquisition of Virtual Observer in early 2020. The features have key integrations between the Five9 Workforce Optimization (WFO) and its Five9 Intelligent Cloud Contact Center platform.
The integrations provide improved agent and supervisor user experiences. They give supervisors the necessary tools to motivate and engage agents from wherever as well as receive vital reporting and analytics to ensure quality in customer experience. Agencies will be able to manage their time and workload more effectively, allowing them to balance productivity and wellbeing.
Besides acquisitions, Five9 has been focusing on expanding its partnerships. Last quarter, it announced a strategic tie-up with Deloitte Digital, a part of Deloitte Consulting LLP. As part of the alliance, the two organizations will work together to accelerate growth and critical Go-To-Market strategies in key regions and verticals. Five9 has worked with Deloitte Digital in the past to have deliver transformational Cloud Contact Center as a Service (CCaaS) solutions to their clients.
The new tie-up will leverage this earlier experience and provide companies more options to improve their customer experience, including access to an intelligent cloud contact center with expanded functionality that can be deployed rapidly. With the pandemic conditions continuing globally, CCaaS services are in much demand. A collaboration with Deloitte will help Five9 expand its market reach across the globe.
To help expand its geographic footprint, Five9 has also entered into a tie-up with London-based Conn3ct. Conn3ct is a communications solutions provider with over 30 years’ experience in assisting multinational organizations solve their communications challenges. It is known for its global network providing SIP and public switched telephone network (PSTN). The new partnership between Five9 and Conn3ct will help stabilize, enhance, and transform global cloud contact centers as Conn3ct’s suite of communication services will be integrated with the omnichannel contact center experience from Five9. This is expected to deliver high touch customer engagements and a customizable contact center solution.
Additionally, Five9 is also working on expanding its partner program for its 2021 channel strategy. In the current year, Five9 plans on making the channel partnership a frictionless program. It is driving towards that by launching new solution bundles later this year that will be based on consumer research that Five9 is conducting. It plans to leverage the results from its studies to deliver those solutions that are easier to sell and are in demand by its customers. It is also launching an enhanced partner portal that will showcase more automation, better reporting, and better access to information. Last year, Five9 had announced the acquisition of the IVA leader Inference Solutions. This year, it plans to help its partners make use of the new Five9 IVA capability developed through this acquisition. Five9 believes that by taking its partner ecosystem to the “next level” will help the partners effectively articulate and successfully position its solutions to their joint customers.
Its stock is currently trading at $187.56 with a market capitalization of $12.4 billion. It touched a 52-week high of $198.60 earlier this month. It hit a 52-week low of $52.51 in March last year.
Disclosure: All investors should make their own assessments based on their own research, informed interpretations, and risk appetite. This article expresses my own opinions based on my own research of product-market fit, channel execution, and other factors. My primary interest is in product strategy. While this may have bearing on stock movements, my writings tend to focus on long-term implications. The information presented is illustrative and educational, but should not be regarded as a complete analysis nor recommendation to buy or sell the securities mentioned herein. I am not a registered investment adviser and I am not receiving compensation for this article.