Gross Margin % is calculated as gross profit divided by its revenue. Five9's Gross Profit for the
three
months ended in Dec. 2023 was $126.6 Mil. Five9's Revenue for the
three
months ended in Dec. 2023 was $239.1 Mil. Therefore, Five9's Gross Margin % for the quarter that ended in Dec. 2023 was 52.94%.
Warning Sign:
Five9 Inc gross margin has been in long-term decline. The average rate of decline per year is -2.9%.
The historical rank and industry rank for Five9's Gross Margin % or its related term are showing as below:
FIVN'
s Gross Margin % Range Over the Past 10 Years
Min: 46.98 Med: 57.01 Max: 59.62
Current: 52.48
During the past 13 years, the highestGross Margin % of Five9 was 59.62%. The lowest was 46.98%. And the median was 57.01%.
FIVN's Gross Margin % is ranked better than 61.72% of 2628
companies
in the Software industry
Industry Median: 41.685
vs FIVN: 52.48
Five9 had a gross margin of 52.94% for the quarter that ended in Dec. 2023 => Durable competitive advantage
The 5-Year average Growth Rate of Gross Margin for Five9 was -2.90% per year.
Five9 Gross Margin % Historical Data
The historical data trend for Five9's Gross Margin % can be seen below:
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
For the Software - Infrastructure subindustry, Five9's Gross Margin %, along with its competitors' market caps and Gross Margin % data, can be viewed below:
* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap. Note that "N/A" values will not show up in the chart.
Five9's Gross Margin % Distribution in the Software Industry
For the Software industry and Technology sector, Five9's Gross Margin % distribution charts can be found below:
* The bar in red indicates where Five9's Gross Margin % falls into.
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
A positive Gross Profit is only the first step for a company to make a net profit. The gross profit needs to be big enough to also cover related labor, equipment, rental, marketing/advertising, research and development and a lot of other costs in selling the products.
Five9 (NAS:FIVN) Gross Margin % Explanation
Warren Buffett believes that firms with excellent long term economics tend to have consistently higher margins.
Durable competitive advantage creates a high Gross Margin % because of the freedom to price in excess of cost. Companies can be categorized by their Gross Margin %
1. Greater than 40% = Durable competitive advantage
2. Less than 40% = Competition eroding margins
3. Less than 20% = no sustainable competitive advantage
Consistency of Gross Margin is key
Five9 had a gross margin of 52.94% for the quarter that ended in Dec. 2023 => Durable competitive advantage
Be Aware
If a company loses its competitive advantages, usually its gross margin declines well before its sales declines. Watching Gross Margin % and Operating Margin % closely helps avoid value trap situations.
Five9 Gross Margin % Related Terms
Thank you for viewing the detailed overview of Five9's Gross Margin % provided by GuruFocus.com. Please click on the following links to see related term pages.
Five9 offers cloud-native contact center software enabling digital customer service, sales, and marketing engagement. The company's Virtual Contact Center platform combines core telephony functionality, omnichannel engagement, and various modules into a unified cloud contact-center-as-a-service, or CCaaS, platform. Five9's modules include digital self-service, agent assist technology, workflow automation, as well as workforce optimization solutions that optimize call center efficiency, and manage interaction quality and agent performance.
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