Five9 is evolving from a North American CCaaS leader to a worldwide stalwart vendor, securing three huge wins last quarter from across the globe.
Each win is worth $4.7 million in annual reoccurring revenue (ARR).
A BPO headquartered in Spain is the first. Having harnessed an on-premise Avaya platform for many years, it targeted a cloud migration to deliver greater visibility and flexibility to clients.
Sharing more details during an earnings call, Dan Burkland, President and Chief Revenue Officer, at Five9, said:
They looked at other cloud providers and chose Five9 for our global presence, scalability, open API platform, and ease of use.
Five9 will also support the BPO in implementing intelligent virtual agents (IVAs) for several clients and integrating their various CRM solutions with its CCaaS platform. These range from some of the most well-known systems to homegrown offerings.
Its second win is with a Fortune 200 global leader in heating, ventilation, and air conditioning (HVAC) systems, which operates in over 160 countries. Notably, the company also migrated from an on-premise Avaya platform.
Commenting on the deal, Burkland stated:
They discovered that much of the customizations required extensive development on competing solutions, but were standard out-of-the-box capabilities on Five9.
After implementing Five9, the HVAC company will enjoy a comprehensive omnichannel solution, WFO suite – with workforce and quality management solutions – and IVA. It will also integrate CRM solutions from both Salesforce and ServiceNow.
The final major deal is with a US medical practice spread across 350 locations, which include clinics, physician offices, and hospitals. As such, their contact center must handle an array of queries.
After sticking with an on-premise solution, the organization migrated to CCaaS for greater scalability, reliability, and flexibility.
It will also benefit from the integrations of several CRMs, a new IVA, and an integration with Microsoft Teams to harness expertise from across the medical practice.
Moreover, the organization will implement Five9’s workflow automation solution for proactive outreach. Use cases will include appointment notifications and overdue invoice reminders.
Becoming a Global CCaaS Player
In recent years, Five9 has significantly grown its presence in the CCaaS space, increasing its market presence and often appearing at the forefront of many CCaaS analyst reports.
One such report is the Gartner Magic Quadrant 2022, which labels Five9 as a “challenger” in the field, on the precipice of leader status.
What is holding it back? According to Gartner, it must continue its investment in expanding regional support outside North America.
Five9 is taking heed of such advice, growing its international presence, and establishing new data centers across Europe. In Q3, it also opened up a new R&D center in Portugal.
Its strategy seems to be gaining ground, with a 78 percent YoY increase in international bookings last quarter, which includes a couple of the massive wins above.
Such a sharp rise – alongside its burgeoning mid-market and enterprise business – contributed to a 29 percent YoY revenue growth.
Much of this revenue also stems from its land and expand strategy. As Burkland said:
Despite the growing macro headwind on the installed base side of our business, we continue to see sizable expansions in certain segments, especially in the strategic accounts.
A prominent example is Five9 building on its business with a market leader in parcel delivery services, adding $5 million to its anticipated ARR. In total, the deal will bring in nearly $55 million in anticipated ARR.
New CEO, Same Strategy
New Five9 CEO Mike Burkland echoed much of what his predecessor – Rowan Trollope – had said on the previous earnings call, highlighting how Five9 is “well-positioned” within the CCaaS space.
Indeed, Burkland stated:
Nothing’s changed in terms of strategy. Rowan and I and the rest of the Board have been extremely well aligned in terms of our strategy.
“One of the highlights of Five9’s history for the last 15 years has been our ability to execute, and we expect that to be our strength going forward. So, it’s onward and upward from here.”
Burkland also noted the three market trends that he hopes will continue to drive Five9’s revenue growth in the current macroeconomy. These are:
- The increasing “viability and desirability” of cloud solutions
- Companies “vigorously” digital transformation initiatives to avoid disruption and enhance CX
- The growing maturity and economic viability of AI-driven automation solutions expanding its TAM (total addressable market).
Five9 will hope these trends result in even more new business and can stabilize its stock prices, which dropped after former CEO Rowan Trollope left to pursue a new venture at a pre-IPO business.
Luckily, Burkland has long sat at the top table of Five9, playing an integral part in designing its strategy over the past ten years, which has resulted in its revenues growing by 20x over that period.