According to a Gartner report, there were 14.5 million contact center agents worldwide in 2012. Cloud-based offerings to support these contact center agents are on the rise. The report projects that in North America, the cloud penetration of the contact center market is estimated to have grown from 5% in 2012 to 13% in 2016. Recently listed, San Ramon-based Five9 (NASDAQ:FIVN) is among the leading global providers of cloud-based call center solutions for sales, marketing, and support services.
Five9 was founded in 2001 to provide cloud-based solutions to replace legacy on-premise contact center systems. Their highly scalable and secure Virtual Contact Center cloud platform offers a comprehensive suite of easy-to-use applications that encompass most of contact center-related customer service, sales, and marketing functions. Their platform is being used by more than 2,000 clients and has helped deliver more than three billion interactions between their clients and their end consumers.
The platform is best known for its ability to allow optimized customer interactions across multiple media including voice, chat, email, web, social media, and mobile channels while allowing for simultaneous management of these interactions. The platform not only matches the instance of a customer interaction with a suitable contact center agent but also provides relevant customer data to the agent in real-time to improve agent productivity and customer experience.
Since their platform is delivered over the cloud, the solution requires minimal upfront investment. Five9 earns revenues through a subscription-based model that charges their customers on the number of agent seats and minutes of usage of their platform.
The rapid growth of the call center industry has also helped Five9 enhance their revenues significantly. Over the past few years, revenues have grown from $43.2 million in 2011 to $84.1 million in 2013. However, continued investments in sales and marketing and product development have hurt their margins. They are still not profitable and have seen losses grow from $7.9 million in 2011 to $31.3 million in 2013. For the recently ended quarter, Five9 saw revenues grow 27% over the year to $24.3 million with a loss of $1.55 per share. The Street was looking for revenues of $22.9 million with a net loss of $1.77 per share.
For the current quarter, Five9 projected revenues of $24.4 million-$25.2 million with a net loss of $11.6 million-$12.6 million. The Street was projecting revenues of $24 million with a net loss of $11.2 million. The company expects to end the year with revenues of $102 million-$106 million and a net income of $36.8 million-$38.8 million. The market was expecting the year's revenues at $102.5 million with a net income of $43.3 million.
Till recently, Five9 was venture funded with $71 million in investments raised from investors including SAP Ventures, Partech Ventures, Adams Street Partners, Hummer Winblad Venture Partners, and Mosaic Venture Partners. The last round of funding was held in May last year when they raised $22 million in a round led by SAP Ventures at an undisclosed valuation. Earlier this year, Five9 went public and raised $70 million by selling 10 million shares at $7.00 each on the Nasdaq under the ticker FIVN.
Their stock is currently trading at $7.20 with a market capitalization of $347.34 million. It touched a high of $9.35 soon after listing.