Five9 - earnings basis (55% gross margin fails software gate)

Assumptions as of 2026-07-19

USD

Updated Jul 19, 2026

as of 2026-07-19

Fair value per share

$15.32

Upside to market

-40.1%

Owner earnings as actually reported

Justified multiple of revenue

1.08

Capitalized internal-use software (cash)

39.14$M

Purchases of property and equipment

24.96$M

Cash plus marketable investments

676.16$M

Multiple of normalized owner earnings (gate-failure basis)

12.00

GAAP gross margin

55.1%

Normalized owner FCF margin for a 55% gross-margin business

9.0%

Cash from operations

226.21$M

Market price

$25.58

FY2025 revenue

1,149.09$M

Stock-based compensation expensed

148.07$M

Shares outstanding

77.19M

Convertible senior notes

734.55$M

	FY2025
Cash from operations	226
less capex	25
less capitalized software	39
= True free cash flow	162
memo - FCF as commonly reported	201
less stock compensation	148
= Owner earnings, actual	14
memo - actual owner margin	1.2%
Normalized owner earnings used	103
Multiple applied	12.0
= Enterprise value	1,241
less net debt	58
= Equity value	1,183
memo - justified x revenue	1.08
memo - market x revenue	1.77

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