Five9 Inc (NASDAQ: FIVN) stock rose over 6.8% in the pre market session on Feb 20th, 2019 after the company posted better than expected results for the fourth quarter of FY 18. Fourth quarter adjusted gross margins were 65.1%, an increase of nearly 150 basis points year-over-year. Fourth quarter adjusted EBITDA was $16.4 million, representing a record 22.7% margin. Fourth quarter non-GAAP net income was $14.5 million a year-over-year increase of $10.5 million. The operating cash flow for the year ended December 31, 2018 was $38.6 million, the year-over-year improvement of $27.5 million. Capital expanding in the fourth quarter was $5.7 million.
The enterprise segment will continue to drive the growth, with only 10% to 15% of the market transition to the cloud. The enterprise business grew to 77% of LTM revenue. The enterprise subscription business grew at 36% on an LTM basis and importantly customers over $1 million in ARR represent one of the fastest growing parts of the business. In fact, the company now have more than 40 customers generating over $1 million in Q4 annualized ARR, that’s approximately doubled over the last 2 years.
FIVN in the fourth quarter of FY 18 has reported the adjusted earnings per share of 23 cents, beating the analysts’ estimates for the adjusted earnings per share of 14 cents, as per the analysts surveyed by FactSet. The company had reported the adjusted revenue growth of 31 percent to $72.3 million in the fourth quarter of FY 18, beating the analysts’ estimates for revenue of $66.4 million.
Five9 expects adjusted earnings to be in the range 11 cents to 13 cents a share on revenue expected to be in the range of $70 million to $71 million for the first quarter, and 58 cents to 62 cents a share on revenue of $298.5 million to $301.5 million for the year 2019. Analysts had forecast earnings of 12 cents a share on revenue of $68.8 million for the quarter, and 59 cents a share on revenue of $295.8 million for the year.
FIVN expect the taxes, which relates mainly to foreign subsidiaries to be approximately $75,000 for the first quarter of 2019 and $310,000 for the full year 2019. The capital expenditures for the first quarter of 2019, are expected to total approximately $5 million to $6 million. For the full year 2019, FIVN expect capital expenditures to be between $20 million and $24 million.