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One of the world's larger cloud contact-center platforms, Five9 turns customer service into software, letting businesses handle calls, chat, and email over the internet instead of on bulky on-premises phone systems. Its embedded Genius AI suite assists those interactions for thousands of organizations of every size. Founded in 2001 in the San Francisco Bay Area by a team of VoIP engineers, the company helped pioneer moving call centers to the cloud. Its name nods to the telecom reliability gold standard of "five nines" uptime, not the nine-to-five workday.
Five9 Q2 2026 net income fell 82% sequentially to $3.4M as an $8.4M headquarters impairment charge hit G&A.
Profitability reversed sharply from the prior quarter. rose 10% to $312.4 million, but dropped to $3.4 million from $18.4 million in Q1 2026 after an $8.4 million from consolidating the corporate headquarters pushed general and administrative expenses up 18%. The company remains profitable, but the charge erased most of the quarter's .
Key takeaways
fell to $3.4 million from $18.4 million in Q1 2026, as an $8.4 million from consolidating the corporate headquarters drove a 18% increase in general and administrative expenses to $43.0 million.
rose 10.3% to $312.4 million, driven by larger customers adding seats through sales and marketing activities and improved brand awareness.
declined 1.5 points to 53.4%, as cost of rose 14% on higher third-party costs, , and of capitalized software.
Section summaries
Management's Discussion and Analysis
Revenue grew 10% YoY to $312.4M in Q2 2026, driven by larger customers; net income rose to $3.4M despite an $8.4M HQ impairment charge.
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Total increased 10% to $312.4 million for Q2 2026, primarily from larger customers due to sales and marketing activities and improved brand awareness.
was $2.0 million, down from $18.5 million in Q1 2026, with the narrowing to 0.6% from 6.1%.
increased to $70.1 million from $68.0 million a year earlier, reflecting lower and the add-back of the headquarters .
The company repurchased $100 million of common stock during the quarter, leaving $722.1 million in including $187.3 million in cash.
What changed
The Q1 2026 watch item on the operating expense ratio materialized: general and administrative expenses rose 18% , driven by the $8.4 million headquarters , pushing the down to 0.6% from 6.1% in Q1 2026.
fell to 53.4% from 55.9% in Q1 2026, reversing the improvement trend that had been flagged for monitoring, as cost of growth of 14% outpaced the 10% revenue increase.
dropped to $24.5 million from $58.7 million in Q1 2026, a 58% sequential decline, while fell 34% to $42.1 million.
What to watch
Q3 2026 to see whether the 53.4% level represents a new baseline or a one-quarter dip driven by the cost of increase.
Q3 2026 operating expense ratio, particularly G&A, to confirm the headquarters was a one-off and the expense discipline seen in prior quarters resumes.
Annual Dollar-Based Retention Rate in the next filing to see if the metric stabilizes after the Q1 2026 reading of 107%.
Pace of the remaining authorization and its effect on cash balances after $100 million was deployed this quarter.
declined to 53% from 55% as cost of rose 14%, driven by higher third-party costs, , and of capitalized software.
Sales and marketing expenses decreased 1% to $79.7 million, as lower offset higher of .
General and administrative expenses rose 18% to $43.0 million, mainly due to an $8.4 million from consolidating the corporate headquarters.
increased to $70.1 million from $68.0 million, reflecting lower and the add-back of the HQ .
The company repurchased $100 million of common stock and had $722.1 million in , including $187.3 million in cash, as of June 30, 2026.
Quantitative and Qualitative Disclosures About Market Risk
Market risk is primarily from interest rates and foreign exchange; exposures are unchanged since FY2025 year-end.
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Cash, equivalents, and marketable securities totaled $654.1M, invested mainly in U.S. government, agency, and high-grade securities under a capital-preservation policy.
A hypothetical 100-basis-point interest rate change would not materially impact the value of cash, equivalents, or marketable investments.
The $747.5M 2029 carry a fixed rate and are not subject to interest rate risk; fair-value changes from equity or market factors do not affect financial position or cash flows.
The company does not use derivatives for trading or speculation, except for capped calls entered in March 2024 related to the 2029 convertible notes.
is mostly U.S.-dollar-denominated, so direct foreign-currency risk is limited, but a stronger dollar can reduce overseas demand.
Operating expenses are in local currencies; a hypothetical 10% adverse FX move would have a maximum $7.2M impact on six-month operating expenses, and no FX hedges are in place.
Information with respect to this Item may be found under the heading “Legal Matters” in Note 10 to the condensed consolidated financial statements in this Quarterly Report on Form 10-Q, which information is incorporated herein by reference.
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Information with respect to this Item may be found under the heading “Legal Matters” in Note 10 to the condensed consolidated financial statements in this Quarterly Report on Form 10-Q, which information is incorporated herein by reference.
There have been no material changes from the Risk Factors previously disclosed in Part 1, Item 1A, of our Annual Report on Form 10-K for the fiscal year ended December 31, 2025. In addition to the other information set forth in this report, you should carefully consider the Risk…
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There have been no material changes from the Risk Factors previously disclosed in Part 1, Item 1A, of our Annual Report on Form 10-K for the fiscal year ended December 31, 2025. In addition to the other information set forth in this report, you should carefully consider the Risk Factors discussed in our Annual Report on Form 10-K as the matters disclosed therein could materially affect our business, financial condition and future results of operations.