Stockholders' Equity

6 Months Ended

Jun. 30, 2026

Stockholders’ Equity

Capital Structure

Common Stock

The Company is authorized to issue 450,000,000 shares of common stock with a par value of $0.001 per share. As of June 30, 2026 and December 31, 2025, the Company had 74,723,531 and 77,194,499 shares of common stock issued and outstanding, respectively.

Preferred Stock

The Company is authorized to designate and issue up to 5,000,000 shares of preferred stock with a par value of $0.001 per share in one or more series without stockholder approval and to fix the rights, preferences, privileges and restrictions thereof. As of June 30, 2026 and December 31, 2025, there were no shares of preferred stock issued and outstanding.

Repurchase Programs

2025 Repurchase Program

In October 2025, the Company’s Board of Directors approved the 2025 Repurchase Program, which authorized the repurchase of up to $150.0 million of the Company’s common stock through December 31, 2027. The shares may be repurchased at management’s discretion, either on the open market or in privately negotiated block transactions. Management’s decision to repurchase shares will depend on price, blackout periods and other corporate developments. Purchases may occur from time to time and no maximum purchase price has been set.

As part of the 2025 Repurchase Program, the Company entered into an ASR program (the "2025 ASR Program") with JPMorgan Chase Bank, National Association N.A. ("JPM") on November 11, 2025. Under the terms of the 2025 ASR Program, on November 12, 2025, the Company made an aggregate payment of $50 million and received an initial delivery of 1,926,782 shares of the Company’s common stock at an initial price of $20.76 per share, representing approximately 73% of the total number of shares of the Company’s common stock purchased under the 2025 ASR Program. The 2025 ASR Program was completed on February 2, 2026, which resulted in delivery of 701,517 additional shares to the Company. The final share settlement was based on the average daily volume-weighted average price of the Company's shares, netted against the initial delivery. The shares received were immediately retired and recorded as a reduction to additional paid-in-capital within stockholders’ equity.

In March 2026, the Company repurchased 578,742 shares under the 2025 Repurchase Program at an average share price of $17.28 for an aggregate payment of $10.0 million.

The Company entered into an additional $90 million ASR program (the “2026 ASR Program”) on May 4, 2026 with JPM to repurchase the remaining authorized amount under the 2025 Repurchase Program. Under the terms of the 2026 ASR Program, on May 5, 2026, the Company made an aggregate payment of $90 million and received an initial delivery of 3,084,833 shares of the Company’s common stock at an initial price of $23.34 per share, representing approximately 80% of the total number of shares of the Company’s common stock expected to be purchased under the 2026 ASR Program. The shares received were immediately retired and recorded as a reduction to additional paid-in-capital within stockholders' equity. Given the Company’s ability to settle in shares, as described below, the remaining $18 million prepaid forward contract was classified as a reduction to additional-paid-in-capital upon issuance and as of June 30, 2026. The final settlement of the 2026 ASR Program is expected to occur in the third quarter of 2026.

Under the ASR programs, upon settlement, the Company was permitted to either receive additional shares of common stock from JPM or were required to deliver additional shares of common stock or cash to JPM, at the Company’s election. The final number of shares the Company repurchased was based on the average of the daily volume-weighted average prices of the Company’s common stock during the term of the ASR programs, less a discount and subject to adjustments pursuant to the terms and conditions of the ASR programs. Cash settlement was not mandatory pursuant to the terms of the ASR programs.

As of June 30, 2026, no amount remained available under the 2025 Repurchase Program.

2026 Repurchase Program

On April 30, 2026, the Company announced that its Board of Directors approved a new share repurchase program (the “2026 Repurchase Program”), which authorized the repurchase of up to an additional $200.0 million of the Company’s common stock and has no expiration date.

Repurchases under the 2026 Repurchase Program will be made pursuant to open market purchases, solicited or unsolicited privately negotiated transactions, accelerated share repurchase transactions, and may be effected pursuant to 10b5-1 plans, and in compliance with applicable securities laws and other requirements. The 2026 Repurchase Program will be funded using the Company's cash on hand and future cash flow generation.

The timing, manner, price, and amount of repurchases under the 2026 Repurchase Program is subject to the discretion of the Company’s management. The Company is not obligated to acquire a specified number of shares under the 2026 Repurchase Program, which may be suspended, modified, or terminated at any time, without prior notice. The shares received will be immediately retired and recorded as a reduction to additional paid-in-capital within stockholders’ equity.

As of June 30, 2026, $200.0 million remained available under the 2026 Repurchase Program.

Common Stock Reserved for Future Issuance

Shares of common stock reserved for future issuance related to outstanding equity awards and employee equity incentive plans as of June 30, 2026 were as follows (in thousands):


						June 30, 2026
Stock options outstanding						328
RSUs (including PRSUs) outstanding						8,871
Shares available for future grant under 2014 Plan						8,827
Shares available for future grant under 2026 Inducement Plan						2,900
Shares available for future issuance under ESPP						3,256

Total shares of common stock reserved						24,182

2026 Inducement Equity Incentive Plan

In June 2026, the Company’s Board of Directors approved the Five9, Inc. 2026 Inducement Equity Incentive Plan (the “2026 Inducement Plan”) and 2,900,000 shares of common stock were authorized for issuance under the 2026 Inducement Plan. The 2026 Inducement Plan allows the Company to grant stock options, RSUs, restricted stock awards, performance stock awards, stock appreciation rights, and other stock awards to individuals, who were not previously employees or directors of the Company, as an inducement to commence employment with the Company. As of June 30, 2026, the Company had approved the grants of RSUs (including PRSUs) under the 2026 Inducement Plan, which were granted in July 2026. Each RSU granted under the 2026 Inducement Plan will represent a right to receive one share of the Company’s common stock when the RSU vests. RSUs will generally vest over three to four years.

Equity Incentive Awards

Stock Options

A summary of the Company’s stock option activity during the six months ended June 30, 2026 is as follows (in thousands, except years and per share data):


	Number of Shares	Weighted Average Exercise Price		Weighted Average Remaining Contractual Life (Years)	Aggregate Intrinsic Value
Outstanding as of December 31, 2025	390	$	51.62
Options granted	—	—
Options exercised	(55)	8.15
Options forfeited or expired	(7)	85.64
Outstanding as of June 30, 2026	328	58.08		2.2	$	940
Vested and expected to vest as of June 30, 2026	328	58.08		2.2	940
Exercisable as of June 30, 2026	328	58.08		2.2	940

The aggregate intrinsic value amounts are computed based on the difference between the exercise price of the stock options and the fair market value of the Company’s common stock of $21.32 per share as of June 30, 2026 for all in-the-money stock options outstanding.

Restricted Stock Units (including PRSUs)

A summary of the Company’s restricted stock unit ("RSU") activity, including PRSUs, during the six months ended June 30, 2026 is as follows (in thousands, except per share data):


	Number of Shares	Weighted Average Grant Date Fair Value Per Share
Outstanding as of December 31, 2025	6,029	$	43.50
RSUs granted(1)	4,853	19.55
RSUs vested and released	(1,399)	42.23
RSUs forfeited or cancelled	(612)	54.64
Outstanding as of June 30, 2026	8,871	29.83

(1) Includes 1,100,055 PRSUs granted during the six months ended June 30, 2026.

PRSUs. During the six months ended June 30, 2026, the Company granted a total of 1,100,055 PRSUs with a grant date fair value of $27.9 million as part of its annual grant of equity incentive awards to certain executives and in connection with the appointment of Amit Mathradas as its new Chief Executive Officer.

For the 802,752 market-based PRSUs with a grant date fair value of $21.8 million granted to Mr. Mathradas, the amount that may be earned pursuant to the market-based PRSUs ranges from 0% to 200% of the target number based on the Company’s relative total shareholder return (“RTSR”) performance as compared to the companies in the S&P Software and Services Select Index during the performance period. The 2026-2028 performance period contains two overlapping measurement periods— a two-year period and a three-year period. 60% of the total market-based PRSUs may be earned and settled in shares following the end of the two-year measurement period and 40% of the total market-based PRSUs may be earned and settled in shares following the end of the three-year measurement period, in each case based on RTSR performance and subject to continued employment through the payment date; provided that upon a qualifying termination of employment that occurs between January 1, 2027 and December 31, 2027, up to 33% of the maximum number of PRSUs may be earned and settled in shares following such qualifying termination, based on RTSR performance during the period consisting of January 1, 2026 through December 31, 2026. If the Company’s absolute total shareholder return for any measurement period is negative, then no more than 100% of the target amount of market-based PRSUs for such period may be earned. If an executive's employment with the Company terminates before the end of the final measurement period due to death or disability, 100% (if due to death) or 50% (if due to disability) of the unvested market-based PRSUs may be earned subject to ultimate RTSR performance in each remaining measurement period. Upon a qualifying termination of employment in connection with a change in control of the Company, the unvested market-based PRSUs subject to the 2026-2028 performance period will vest on a double-trigger basis (i) at the target level for the uncompleted portions of the measurement periods and (ii) at the actual level of performance measured through the date of the change in control of the Company, based on the price per share paid in such change in control.

For the 297,303 PRSUs with a grant date fair value of $6.1 million granted as part of the Company’s annual grant of equity incentive awards to certain executives, the amount that may be earned pursuant to the PRSUs ranges from 0% to 200% of the target number based on the achievement of the following performance metrics (the

“Performance Metrics”) during the performance period: (i) the Company’s Subscription Revenue Growth Rate (“CAGR”), which is weighted 70%, and (ii) the Company’s RTSR performance as compared to the companies in the S&P Software and Services Select Index, which is weighted 30%. The 2026-2028 performance period contains two overlapping measurement periods—a two-year period and a three-year period. 60% of the total PRSUs may be earned and settled in shares following the end of the two-year measurement period and 40% of the total PRSUs may be earned and settled in shares following the end of the three-year measurement period, in each case based on the achievement of the Performance Metrics and subject to continued employment through the payment date. If the Company’s absolute total shareholder return for any measurement period is negative, then no more than 100% of the target amount of market-based PRSUs that vest based on the Company’s RTSR for such period may be earned. If an executive's employment with the Company terminates before the end of the final measurement period due to death or disability, 100% (if due to death) or 50% (if due to disability) of the unvested PRSUs may be earned subject to actual achievement of the Performance Metrics in each remaining measurement period. Upon a qualifying termination of employment in connection with a change in control of the Company, the unvested PRSUs subject to the 2026-2028 performance period will vest on a double-trigger basis (i) at the target level for the uncompleted portions of the measurement periods and (ii) for the completed portions of the measurement periods, (A) at the actual level of performance for the RTSR metric measured through the date of the change in control of the Company, based on the price per share paid in such change in control, and (B) at the greater of target or actual level of performance, if measurable, for the CAGR metric measured through the date of the change in control.

The fair value of PRSUs subject to performance conditions, is equal to the fair value of the Company’s common stock on the date of grant. The fair value of PRSUs subject to market conditions are determined using a Monte Carlo Simulation model. Compensation expense is recognized net of actual forfeitures over the service period, which is generally the vesting period.

During the first quarter of 2026, the Company certified the performance results for the final measurement period for the market-based PRSUs subject to the 2023-2025 performance period. The Company determined that its actual total shareholder return for such measurement period was (51.28)%, and that its relative total shareholder return ranking was in the 10.0 percentile relative to companies in the S&P Software & Services Select Index as of January 1, 2023, which resulted in a payout percentage of 0.0% of target. During the first quarter of 2026, the Company also certified the performance results for the second measurement period for the market-based PRSUs subject to the 2024-2026 performance period. The Company determined that its actual total shareholder return for such measurement period was (78.31)%, and that its relative total shareholder return ranking was in the 1.0 percentile relative to companies in the S&P Software & Services Select Index as of January 1, 2024, which resulted in a payout percentage of 0.0% of target. During the first quarter of 2026, the Company also certified the performance results for the first measurement period for the market-based PRSUs subject to the 2025-2027 performance period. The Company determined that its actual total shareholder return for such measurement period was (51.28)%, and that its relative total shareholder return ranking was in the 9.0 percentile relative to companies in the S&P Software & Services Select Index as of January 1, 2025, which resulted in a payout percentage of 0.0% of target.

Stock-Based Compensation

Stock-based compensation expense was as follows (in thousands):



	Three Months Ended				Six Months Ended
	June 30, 2026		June 30, 2025		June 30, 2026		June 30, 2025
Cost of revenue	$	5,794	$	7,296	$	12,101	$	14,480
Research and development	7,257		8,829		14,772		17,519
Sales and marketing	8,668		13,355		17,232		24,929
General and administrative	11,261		12,379		21,539		24,176
Total stock-based compensation expense	$	32,980	$	41,859	$	65,644	$	81,104

As of June 30, 2026, unrecognized stock-based compensation expense by award type and expected weighted-average recognition periods are summarized in the following table (in thousands, except years).


	Stock Option		RSU (excluding PRSUs)		PRSU		ESPP
Unrecognized stock-based compensation expense	$	—	$	209,686	$	29,219	$	1,391
Weighted-average amortization period	0.0 years		2.2 years		1.9 years		0.4 years

The weighted-average assumptions used to value PRSUs with market conditions granted during the periods presented were as follows:










PRSUs (Market Conditions)	Three Months Ended				Six Months Ended
	June 30, 2026		June 30, 2025		June 30, 2026		June 30, 2025
Expected term (years)	—		—		2.9		2.8
Volatility	—	%	—	%	59.9	%	55.8	%
Risk-free interest rate	—	%	—	%	3.4	%	4.0	%
Dividend yield (1)	—		—		—		—

(1)The Company has not paid, and does not anticipate paying, cash dividends on its shares of common stock. Accordingly, the expected dividend yield is zero.