Analyst move and rationale
RBC Capital trimmed its price objective on Five9, Inc. (NASDAQ: FIVN) to $25 from $35 while keeping an Outperform rating on the shares. The adjustment reflects the firm ddressing valuation considerations despite acknowledgment of solid operating results.
Quarterly performance highlights
Five9 reported fourth-quarter results that beat consensus across several metrics. Revenue rose 7.8% year-over-year. Adjusted EBITDA margin reached 25.7%, and non-GAAP earnings per share were $0.80 - all items that exceeded street expectations. Following the announcement, shares rose roughly 1% after the market close to $17.83; nonetheless, the stock remains materially lower over longer horizons, down 59% over the past year and down 33% in the last six months.
Business trends and AI momentum
Core contact-center-as-a-service (CCaaS) revenue grew 8% year-over-year, with company management flagging an acceleration in growth and healthy seat trends. Enterprise AI annual recurring revenue surpassed $100 million, and Enterprise AI revenue growth accelerated to 50% year-over-year compared with 41% in the prior quarter, indicating continued traction for Five9 cross its AI offerings.
Valuation context and third-party data
InvestingPro data cited in coverage suggests the stock may be undervalued at current levels, pointing to a PEG ratio of 0.25 that indicates an attractive trade-off between price and growth on that metric. The data reference is presented as a valuation signal alongside the analyst adjustments.
Other analyst responses
RBC Capital nalyst Rishi Jaluria executed the price-target change on Thursday. Other brokers have also revised targets following the quarter: Evercore ISI lowered its target to $24 from $40, citing concerns about Five9's growth outlook; Cantor Fitzgerald cut its target to $26 from $32 while maintaining an Overweight rating; and Needham reiterated a Buy rating with a $40 price target.
Additional financial detail from the quarter
Five9's fourth-quarter 2025 disclosure noted stronger-than-expected margins and free cash flow equal to 22% of revenue. Subscription revenue growth reaccelerated to 12% in the quarter, driven primarily by subscription upside according to the company representations in the report.
Leadership and strategic partnerships
The company announced a CEO transition: Michael Burkland will hand over the role to Amit Mathradas by February 2026. The Board of Directors approved an Amended and Restated Employment Transition Agreement to govern the leadership change. Separately, Five9 expanded its collaboration with Google Cloud to introduce a new Enterprise CX AI solution, which combines Five9's AI-Infused Intelligent CX Platform with Google's advanced AI technologies to target enhancements in customer experience for large enterprises.
This report summarizes analyst adjustments, company-reported financial results and strategic developments as disclosed by Five9 and analyst teams. It is intended to convey the factual record of those announcements and related market reactions.