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The announcement of a leadership transition at Five9 saw the company’s shares substantially decline ahead of its Q3 earnings report.
Shares of cloud contact facilitator Five9 (NASDAQ: FIVN) plummeted more than 20% after CEO Rowan Trollope resigned. The company’s outgoing chief executive is reportedly leaving to lead a privately-held venture-backed pre-IPO startup and will be succeeded by former Five9 CEO Mike Burkland. Burkland resigned from his position at Five9’s helm of affairs back in 2017 to manage his cancer diagnosis.
Five9 Shares Way Off August 2021 Peak
Five9 shares slid 25.6% to close at $57.30, and have now plunged more than 70% since peaking back in August 2021. However, the software maker raised September-quarter guidance for FIVN stock. In addition, it appears set to report its third-quarter earnings on November 7th.
Five9 increased its adjusted earnings guidance for the third quarter to 38 cents a share, up from a 31-33 cents range. In addition, the industry-leading cloud contact center solutions provider also said it expects revenue of around $198 million. This projected figure represents a marked increase from the company’s prior guidance of $193 million.
Commenting on Trollope’s resignation as a precipitating factor for Five9’s stock collapse, Sterling Auty, an analyst at MoffettNathanson, said “the timing of the departure is not ideal as it follows the recent termination of the head of EMEA and coincides with what appears to be the smallest beat in revenue since 2014.”
Trollope Lauds Five9 Achievements, Expresses Faith in Company’s Growth Trajectory
Trollope announced his resignation from Five9 on Twitter, and also expressed optimism about the company’s growth trajectory. In one of his message threads, the outgoing CEO highlighted Five9’s accomplishments under his watch, saying:
“It has been an honor and privilege to serve our employees, our customers and our shareholders as we’ve quadrupled revenue and accelerated our growth rate. We’ve expanded into AI and Automation and rearchitected our platform.”
In addition, Trollope also stated that his successor’s tenure at the cloud software vendor would become effective from November 28th. According to him, Burkland being the former CEO at Five9 augurs well for the company. MoffettNathanson’s Auty also shares Trollope’s sentiments on Burkland’s prospects, saying:
“Given the moderation in growth post pandemic, we could argue that business execution comes back into focus for the company and that plays to Mr. Burkland’s strengths.”
Furthermore, he also argued that Burkland initially resigned at Five9 following a “very successful tenure” with the company.
Burkland to Resume Work
Burkland expressed excitement and pleasure at once again leading Five9. Furthermore, he revealed that even after resigning in 2017, he kept abreast of the company’s business as its Chairman. According to Burkland, his cancer treatments were successful, and his doctors gave him a favorable long-term prognosis. This suggests that he will take on his reinstatement with a clean bill of health and renewed work vigor.
Burkland also highlighted some of the cloud-driven operational works in progress currently going on at Five9. According to him, these are heavily influenced by key trends such as digital transformation and the strategic importance of customer experience.