Five9, Inc. (NASDAQ:FIVN) Q2 2023 Earnings Call Transcript

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Dan Burkland: Yes, taking share, it’s still primarily moving off of the legacy Avaya, Cisco, Genesys. Genesys has a massive — they’re also a cloud competitor, but they have a massive installed base, some estimate over 2 million seats out there that they’ve indicated are being end of life and need to be replaced. They’re going to get a big share of that. They’ve already demonstrated that in some of the figures that they’ve already disclosed. But we’re going to get some too. It’s an opportunity for most to go shopping and really put on RFPs and see what’s in the market. And we love that opportunity and we get a great share in those opportunities. So, it’s those three. And then on occasion, we do find that their CCaaS providers that have either gone through a partner that wasn’t really astute and up to speed on being able to really maximize the value for that company to extract the value for that product.

And sometimes it’s just the wrong fit for the enterprise. And so they do make a change. So, we do have CCaaS providers that we replace. And one example I gave was in the prepared remarks was a company that had already embarked on a competitor implementation of ours. And the company that they acquired had made a recent decision prior to that to go with Five9, but hadn’t started an implementation. So they basically contacted us to cancel that contract. And we ask them to take a closer look and give us a chance and evaluate the two side by side, even though they were several months into another implementation, and they ultimately made the decision that we were the better fit for them, and they went our way.

Matthew Niknam: And just on linearity, any color there over the course of the quarter?

Dan Burkland: On the course of the quarter, linearity in our business, I’d love to achieve it. I’ve, for a few decades now, strive for that. The deals at the lower end of the market, we can get more linearity and more predictability because we see the lead flow and the sales cycle, and we know our close rates are very consistent. On the high end of the market, it’s really tough. It’s lumpy, because we have these big deals that make a huge swing. We had quarters where — even talking about the top three or four, we’ve had quarters where that number is far lower than in other quarters where we’ve dwarfed it with some big numbers like this one. And so it’s hard to get linearity until we get the higher volume, but that’s something we’re certainly striving for.

Matthew Niknam: Thank you.

Operator: Thank you so much. And we do have time for one additional question, which will come from Catharine Trebnick with Rosenblatt.

Catharine Trebnick: Hi, thank you very much for taking my question. Hey, Dan, could you piece part a little bit? You did WWT, BT and Telus is all new partners in the last couple of months. How long does it actually take to put the go-to-market strategy and generate revenue from these big partners?

Dan Burkland: Yes. Wonderful question, Catharine, and that’s something — and I’m glad you mentioned it because it is something we want to make sure folks realize that it’s not a sign them up and open the floodgates. You got to train them, educate them, have them make the investments in their go-to-market and some of the back-office support that they’re going to provide to the customers. In many cases, these large service providers, like the ones you mentioned, they’re doing this not just to bring product to their customers but to really get services around them. We have something we’ve referred to as project pull-through, which is enabling these varied types of partners to be able to enable the implementation services, professional services, if you will, as well as ongoing support for at least Tier 1 and Tier 2.

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