FIVN

Publicly traded companies mentioned herein: Avaya Holding Corp. (AVYAQ), Five9 Inc. (FIVN), RingCentral Inc. (RNG)

Highlights

The presenter is long shares of Five9, Inc. (FIVN) based on the company’s innovative product, its competitive position in its market, and e-commerce macro trends. FIVN offers an AI based solution which offers customers an opportunity to improve the reliability and effectiveness of their customer interactions with its call centers, while at the same time reducing its clients labor costs. FIVN is well positioned with a cloud based, AI and automated technology driven product, as consumers are making fewer in-person visits to stores but contacting companies more frequently. Less than 15% of the call center market has shifted to the cloud and its two main competitors are being “disrupted” through technology and in one case, bankruptcy. These dynamics are driving customers which rely on this mission-critical software to FIVN, yielding a large market share opportunity. Five9’s opportunity is threefold: 1) legacy contact center vendors are retrenching, forcing enterprise customers with some urgency to reevaluate their on-premise contact center solutions. 2) companies are enthusiastically pursuing digital transformation initiatives to enhance customer experience. According to multiple industry analysts, CX (contact center) technology budgets will increase in the next 12 months. 3) AI and automation have become front and center in the CX market, providing an attractive intangible ROI, thus becoming a significant catalyst for enterprises to shift to the cloud. This labor arbitrage opportunity is especially important in tough economic climates and tight labor markets.