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Five9 (FIVN): analysis traps
Where its figures could mislead a reader, and what to check before taking them at face value · Data: Q3 2026, to Sep 30, 2026, filed Nov 5, 2026; rules v1.1
Five9 (FIVN): 1 rule of 10 triggered on the filings to Sep 30, 2026: stock compensation added back = no economic cost. 1 to review; 2 with insufficient data; 3 not applicable. Each is a question to verify, with the normal explanation that would produce the same figures.
Check these first
Stock compensation added back = no economic cost Triggered · severity high · confidence high
Stock compensation was $148M, 12.9% of revenue, in FY2025; buybacks were $50M (0.3× the SBC) and the diluted share count still rose 18.1%. 'Adjusted' figures that add SBC back treat pay in shares as free; the cost is borne by every shareholder as dilution, or by the cash spent to buy the shares back.
Innocent reading: A young company paying in equity while it scales; intensity falls as revenue grows.
A precise DCF value = the true value To review · confidence high
The DCF's point value is 15.48 a share (price 37.61); 52% of it is the terminal value, a number about years no one has seen. Moving operating margin by ±3 pts alone takes it from 11.22 to 19.74; across every method the research ran the range is -2 to 121. The value is a range; the decimals are not information.
Innocent reading: A stable, mature business with a narrow range of outcomes, where the point value is a fair summary.
Every rule
A01 FCF growth = the business improved Not triggered confidence medium
Free cash flow rose $100M to $201M; working capital and lower capex explain 27% of it, so most of the gain is in operating cash flow itself.
The figures and how they are read
| Fiscal year before | FY2024 |
| Fiscal year | FY2025 |
| Operating cash flow, year before | $143M |
| Operating cash flow | $226M |
| Capex, year before | $42M |
| Capex | $25M |
| Free cash flow, year before | $101M |
| Free cash flow | $201M |
| Change in FCF | $100M |
| Change in capex | −$17M |
| Working capital: change in its cash contribution | $10M |
| Of which: capex cut | $17M |
| Of which: working capital released | $10M |
| Share of the increase that need not repeat | +27.5% |
| Operating cash flow before working capital: change | 72841000.00 |
FCF = operating cash flow − cash capex; ΔFCF = ΔOCF − ΔCapEx; the working-capital part is the change in the cash-bridge items (receivables, inventory, payables, accruals), with the sign of the cash flow statement
Source: FY2025 (cash flow statement, fiscal year) · FY2024 (cash flow statement, fiscal year before)
A07 Stock compensation added back = no economic cost Triggered severity high · confidence high
Stock compensation was $148M, 12.9% of revenue, in FY2025; buybacks were $50M (0.3× the SBC) and the diluted share count still rose 18.1%. 'Adjusted' figures that add SBC back treat pay in shares as free; the cost is borne by every shareholder as dilution, or by the cash spent to buy the shares back.
The figures and how they are read
| Fiscal year | FY2025 |
| Stock compensation | $148M |
| Revenue | $1.1B |
| SBC / revenue | +12.9% |
| Buybacks | $50M |
| Buybacks / SBC | 0.3 |
| Diluted shares, year before | 74.5M shares |
| Diluted shares | 88.0M shares |
| Diluted shares: change | +18.1% |
SBC / revenue from the cash flow statement's add-back; the diluted weighted share count year over year; buybacks from the financing section
Source: FY2025 (stock compensation, buybacks and the diluted share count, fiscal year)
What would explain it innocently
- A young company paying in equity while it scales; intensity falls as revenue grows
- Buybacks at prices below intrinsic value make up for the dilution over time
- A one-off grant (an acquisition, a founder award) rather than a steady level
What to look for in the filing
- The share count after the latest buybacks (the next 10-Q's cover)
- The price paid for the buybacks against the shares' value
- Unvested awards outstanding
What would show the trap does not apply
- The diluted share count falls over two years with buybacks at least equal to the stock compensation
- Stock compensation falls as a share of revenue in each of the next two years
Look again: next filing.
B02 Receivables growing = future cash is certain Not triggered confidence medium
Receivables grew 14% against revenue 13% in Q3 2026; DSO 43 against a median of 40: collections are keeping pace with sales.
The figures and how they are read
| Quarter | Q3 2026 |
| Revenue, year over year | +13.1% |
| Receivables, year over year | +14.4% |
| Quarter before | Q2 2026 |
| Revenue y/y, quarter before | +10.3% |
| Receivables y/y, quarter before | +10.7% |
| Days sales outstanding | 42.7 |
| DSO, median of eight quarters | 39.6 |
| Receivables | $158M |
| Revenue | $323M |
receivables and revenue against the same quarter a year earlier; DSO = receivables / quarterly revenue × days, against the median of the eight quarters before
Source: Q3 2026 (receivables and revenue) · Q3 2025 (the same quarter a year earlier)
B08 Adjusted profit = economic profit Insufficient data
1 quarter with a reconciliation table on file (three are needed) and fewer than three quarters with both an adjusted and a GAAP EPS
C02 Low net debt = no refinancing risk Insufficient data
no debt figure could be read from the balance sheet (the filing may tag it in other lines)
D03 EPS growth = profit growth Not triggered confidence high
EPS fell 9% and net income fell 19% in Q3 2026; the share count fell 11.5%: EPS growth follows profit growth.
The figures and how they are read
| Quarter | Q3 2026 |
| Quarter before | Q3 2025 |
| EPS, year before | $0.21 |
| EPS | $0.19 |
| Net income, year before | $18M |
| Net income | $14M |
| Diluted shares, year before | 87.3M shares |
| Diluted shares | 77.3M shares |
| EPS growth | -8.7% |
| Net income growth | -19.3% |
| Diluted shares: change | -11.5% |
| eps from profit | -$0.04 |
| eps from share count | $0.02 |
EPS and net income against the same quarter a year earlier; the EPS bridge attributes the change to profit first, then to the share count (the order is fixed and disclosed)
Source: Q3 2026 (net income, diluted shares, EPS) · Q3 2025 (the same quarter a year earlier)
E02 Low P/E at a cyclical peak = undervalued Not applicable
a loss on a trailing or mid-cycle basis: the P/E has no meaning
E07 A precise DCF value = the true value To review confidence high
The DCF's point value is 15.48 a share (price 37.61); 52% of it is the terminal value, a number about years no one has seen. Moving operating margin by ±3 pts alone takes it from 11.22 to 19.74; across every method the research ran the range is -2 to 121. The value is a range; the decimals are not information.
The figures and how they are read
| dcf value | 15.48 |
| price | 37.61 |
| terminal value share | +52.3% |
| swing by input | Operating margin / ±3 pts / 11.22 / 19.74; Revenue growth (each year) / ±5 pts / 14.37 / 16.79; WACC / ±1 pt / 14.86 / 16.24; Capex (share of revenue) / ±1 pt / 14.87 / 16.09 |
| range all methods | -1.81; 120.53 |
the DCF's point value against the share of it that is the terminal value and the value at each input moved by one step (growth ±5 pts, WACC ±1 pt, margin ±3 pts …); the range across every method the research ran
Source: 2026-11-08 (valuation research)
What would explain it innocently
- A stable, mature business with a narrow range of outcomes, where the point value is a fair summary
- The inputs that matter most are themselves well known (a regulated return, a long contract)
What to look for in the filing
- Which input you believe differs from the research's and why
- What the price implies for growth (the reverse DCF on the fair-value page)
What would show the trap does not apply
- The DCF's value is robust to the terminal growth and discount rate (the range's low end is still above the price)
- The company's cash flows over the next three years track the DCF's early years
Look again: next filing.
J06 A bank's low P/E and high profit = safe Not applicable
not a bank
J08 A REIT's low net income = the dividend is unsafe Not applicable
not a REIT
What the statuses mean
Triggered: the filings show the pattern; read the normal explanations and the missing evidence before concluding anything. To review: one quarter or a weak signal; a reader's judgement, not a pattern. Not triggered: the pattern is absent on these figures. Insufficient data: the filings read so far do not hold what the rule needs; this is not a clean bill. Not applicable: the rule is not meant for this kind of company (a bank's working capital, a loss-making quarter's EPS growth). Out of date: the latest filing is more than fifteen months old.
Severity is what the pattern could mean for cash, value or solvency; confidence is how reliable the inputs and the reading are. The two are kept apart.
Record a view
A reader's judgement, grounds, what would change it and the next review; kept in the browser (needs JavaScript).
Every rule and the companies it triggers on → Five9: cash flow → Earnings quality score →
Each rule reads the company's own filings by a fixed formula and says what would explain the same figures innocently. A triggered rule is a question to verify, not a finding of manipulation, and not a view on the stock. Missing data is shown as missing, never as clear. Not investment advice.