Awesome. I think we'll kick things off. I'm DJ Heinz. I'm the Senior Software Analyst here at Canaccord. You guys have heard me say it, but this is the 45th year we've done this event. We couldn't do it without the support of the clients who bring all the great content, the investors who show up and ask the smart questions. Thank you all for being here. Delighted to have the Five9 team here. We have Mike, who's the CEO, and Bryan's the CFO. We're going to do this as a fireside chat. If there are questions from the room, you know, raise your hand. We can integrate them into the conversation. Maybe just to kick things off, I'll spare you the business intro. I think people are probably familiar with Five9 at this point. Maybe we could talk a little bit about Q2 results and just kind of what you're seeing in the business. It was a great quarter, right? I think you said highest quarterly ACV bookings in two years. Some nice momentum. What's driving that? What are you seeing? We can unpack some of the details. Yeah, thanks, DJ. Q2 was a very good quarter for us. I think the biggest highlight was our AI bookings tripling year-over-year. It also came in other flavors too. Our install-based bookings from our customer base reached an all-time high, which is also a big highlight. If you look at the revenue side of things, which is more of a lagging indicator of prior bookings performance, again, AI revenue accelerated to 42% year-over-year. It now makes up 10% of our enterprise subscription revenue. It's a meaningful part of our business. As a $1 billion+ business, that's a pretty big revenue flow, if you will, and growing very, very rapidly. With those bookings numbers, again, we're very, very optimistic about kind of our AI revenue growth going forward. Given that, one quarter doesn't make a trend, but it was a stellar quarter in so many ways, not just on the top line, but also on the bottom line. We delivered record profitability, 24% EBITDA margins. As you all know, we did an operational review earlier in the year, and those transformation initiatives are working, driving efficiency in the business. Top and bottom line, we're very satisfied. Yeah, good. You know, on some executive changes, some that are coming and some that have happened. First, congrats to you, Bryan, confirmed as kind of permanent CFO, I should say. Oh, CEO. Yeah, that seat's open too, I hear. Obviously, Mike, you made the announcement that you're going to transition out of the CEO role and become Executive Chairman. As part of that, there were some tier two management changes as well. Maybe talk about why now for you, and what we should read into those tier two changes as it pertains to initiatives to drive EBITDA margins higher. Yeah, thanks, DJ. Congratulations to Bryan, well-deserved promotion to permanent CFO. He's been with us for a long time and been a superstar. Everybody knows Bryan. It's great to see us be able to make that move. I announced my future retirement. In terms of why now, I've been here 17 years in total as either CEO or Chairman, 10 years as CEO, and then, call it five as Chairman. I came back almost three years ago. Toward the end of the year, it'll be three years back in the CEO chair. One of my goals when I came back was to set this company up for the next 10 years. That was, at a high level, one of my missions when I came back. I think we made tremendous progress on so many fronts, whether it's people changes, whether it's AI innovation, whether it's just momentum in the business, top and bottom line, like what we just talked about. The fact remains, I have cancer. When I stepped down in 2017, it was because of that. I'm being treated very effectively. I'm approaching 63 years at the end of the year in terms of my age. Those treatments aren't going to be effective forever. Our doctors have told us that. It's time to get back to a balanced life. It's impossible to do that as a CEO. I'll be here as long as required until we find my successor. We're going to keep the bar high and bring in a superstar that can take this company forward for the next several years. Yeah, yeah. We were just both talking about our golf games before this started and how neither one of us are playing as much as we'd like. Maybe there's more golf in your future. I look forward to that, although the game is, I'm not sure if I really look forward to it. Yeah, that's right. that's right. We're going to talk a lot about AI. Obviously, it's critical to the story. Before we go there, I want to talk about the core business, right? Which is, you know, upgrading premise-based systems into the cloud. I mean, it is a prerequisite to start leveraging AI, right? I think there would be a lot of demand. I'm curious what you're seeing with that kind of core premise-based to cloud upgrade cycle, because I feel like the narrative today, we sometimes lose a picture of kind of what's happening beneath the AI waterline, if you will. Talk about that core upgrade. Yeah, great question. This is a single platform today that we provide. It's important to think of this as a holistic offering. If you want to think about it as kind of core CCAs, that is a market that is still only 40% in the cloud, 60% still on-premise. It is a massive market opportunity, no matter how you define it, in terms of those on-premise systems being end-of-life or not being invested in by those on-prem vendors. It is still a growth opportunity for us. We focus so much on AI and the fact that it's growing 42% year-over-year, and it's now 10% of our enterprise subscription revenue. The rest of our business is growing quite nicely. If you think about that as kind of non-AI, that is growing very, very nicely as well. It's a reflection of this migration off of these on-premise systems. AI is an accelerant to that. We continue to win a very, very large share of those migrations that come. It will continue. It's going to continue for the next seven to ten years. In my opinion, most analysts are continuing to project the CAGR in cloud penetration to be very, very significant over the next seven plus years. That's a growth engine for us. The AI part of this market is an even more significant growth engine for us. Can we talk a little bit about partner contribution and kind of what you're seeing there? I don't know if it was coincidence, but I felt like more of the large deals that you called out on the quarter seem to be partner-influenced. Who are the key partners and kind of how do they contribute to the growth matrix? Yeah, look, DJ, we've had a, we call it multiple routes to market partner strategy, whether it's, you know, ISV and technology partners, or it's TSDs that are, you know, bringing us referral business. It's kind of the classic reseller channel, the former Avaya, Cisco, Genesys channel resellers, the global systems integrators, the service providers like BT and AT&T. We're getting great traction across that entire spectrum of partners. We talk about a majority of our deals being influenced by partners. Yes, we cited several wins during the quarter that actually came through resellers. It's great to see that leverage in our business. If you think about what I said earlier about the kind of core CCaaS market and the resellers that have been historically working with the on-prem providers, they're leaning into us like they never have. They love the fact that we're an AI leader, but they also love the fact that we've got a great platform to replace their legacy solutions. We're getting a lot of leverage from really across the board. Yeah. On the ISV partner side, you know, Salesforce and ServiceNow are obviously important partners to you. They had an announcement, an investment in a competitor in the space. That news hit, of course, right in conjunction with earnings. I think everyone was reacting in real time to that. What do you make of that news? Have you had a chance to talk to those partners now since, you know, we've obviously had a couple of weeks here since earnings, or a week and a half or so? What are you hearing from them? Yeah, thanks for asking that, DJ. Yes, we have talked to both Salesforce and ServiceNow at length, had multiple meetings across our teams and their teams. The message is very clear. It's business as usual. Our partnerships have had really the best momentum we've ever had with Salesforce and ServiceNow. We have several joint customers, very large, important joint customers and prospects with them. They've told us very explicitly this is a corporate investment decision. They had an opportunity to invest in a pre-IPO company in this space, and it will not change our partnership going forward. Yeah, good. Let's transition over to AI. Maybe just to set the stage, what competitively differentiates Five9's AI offering versus others in the space? Yeah, look, I'd say three things. Number one, AI is embedded in our platform, right? It's not a standalone AI solution. It's embedded in our cloud contact center platform, our CX platform. Because of that, we have an unfair advantage. We have access to contextual data. AI is only as good as the data it has access to. Basically, because it's our AI and it's part of our platform, our AI not only has access to the contextual data that we're a system of record for, like real-time interactions flowing through our platform, historical interaction data that flowed through our platform, but also backend systems that we pre-integrate to. We have an unfair advantage, a control point, if you will, to get at that contextual data. That's a big advantage. It's why our AI bookings tripled in the quarter on a year-over-year basis. Enterprise brands want to purchase AI from their platform vendor for that reason right there. Secondly, we've got a comprehensive AI suite, which now has something like, I think it's 10 SKUs across everything from self-service AI agents in both digital and voice to agent assist or copilot technology, which helps the human agents do their jobs more effectively and get access to information, but also give them efficiency gains like transcribing interactions and populating CRM. Then you've got workflow automation, which is post-interaction to basically fulfill activities even in the back office. You've got kind of, you know, this, I'd call it high-level business intelligence aspect to our platform as well. It's the comprehensive nature of our AI, but it's also the fact that we're innovating constantly. Just this last quarter, we announced our Agentic CX AI agents. We also announced trust and governance when it comes to our AI. Enterprises are very concerned about trust and governance. We're leading the charge in terms of making sure that their AI is safe. It's things like that that allow us to win in AI. I would say the third thing is our people. It's our experts. We've become, we've talked about this for the last couple of years, but we've invested heavily to make sure that our go-to-market teams, our sellers, our sales engineers, our professional services people, our TAMs, our support people are all AI experts. We've rolled out the AI Blueprint program, which allows us to put that into practice. We're helping these large enterprises, these large brands navigate this new world of AI and how to leverage AI technology to deliver business outcomes, business impact, whether it's efficiency gains, customer satisfaction increases. It's coming in very tangible ROI, and that's what allows us to win. You hit on some of the AI numbers, right? 20% enterprise bookings, the tripling, the 42% revenue growth. Clearly, there's momentum there. There's a lot in the portfolio, as you just said, 10 different SKUs. Which of those are driving the growth? What's the core use case that you're seeing adopted most frequently today? Yeah, I would say it's self-service, it's agent assist, and it's workflow automation. Those are the main use cases of AI. Those are our top three products in the portfolio. The AI revenue from each of those three products accelerated in the quarter. That 42% acceleration, up from 32%, was across all three of those products. Yeah, yeah. It's broad-based. We've talked a little bit about customer choice, right? You made the case for why customers are going to choose their platform vendor for AI, right? Just that integrated experience, the contextual data. However, there are the service cloud vendors that are also competing for AI on the front end, right? How are those decisions made if a customer is going to go with Five9 for AI or a service cloud provider? If they choose to go the service cloud provider route, how do you guys participate in that? Yeah, very good question, DJ. Look, we view AI as a team sport. At the end of the day, it's not going to be all or nothing. In most of these deployments, whoever our CRM partner is, or whoever our hyperscaler partner is, these customers are going to use a mix of AI from their CCAs platform or CX platform provider like us, as well as from their CRM provider. The good news is we win either way. We monetize access to, remember we talked about contextual data in our platform. Their AI is only going to do its job if it has access to our contextual data, the stuff that's running through our platform. We charge for that. We monetize that. It's pretty significant. It's consumption-based. As AI agents are, you know, arguably more efficient than human agents over time, that consumption just continues to go up. On a net basis, our ARR goes up in these accounts as they decide to deploy AI, whether it's our AI or a partner's AI. Bryan, maybe we could work you into the conversation a little bit. We talked about consumption elements of the business model. Does it become harder to forecast Five9 as those grow, and how meaningful are they today? The consumption part, we actually sell blocks of capacity, and then overage would be charged on top of that. It is actually, from a forecasting perspective, not a whole lot different than how the business has been. From an AI perspective, that's what helps us drive gross margin much more there as well, because if you think about our AI portfolio, the AI agents, they're in the high 70% and low 80%, and they make up the majority of our AI revenue next to the AI agent assist and the workflow automation that Mike talked about. That's going to be a key driver both on the top line and gross margin as well. Yeah, so growing quickly and margin accretive. Mike, the question I asked on the public earnings call is a question we get all the time from investors. It's just what's happening? Customers that are further along in their AI journey, right? I think there's a view among investors that it's going to pressure agency count, right? Are you going to be able to fill that gap? Are we entering a world where no one's going to sit in a contact center anymore? What are you seeing for those that are further along in terms of kind of core agency count and how they're managing that with the investments in AI that are happening? Yeah, I think it's playing out exactly as we anticipated, which is, from Five9's perspective, from our business's perspective, our ARR with these accounts as they get more mature with AI and the use of AI, our ARR goes up with these accounts pretty dramatically on a net basis. In some cases, like I talked about a couple earnings calls ago, we had about three or four examples that we cited where I think ARR with us went up 30% or 50% in some of these cases. Sometimes it's significant, but it's playing out very much as anticipated where most of these brands are trying to deflect to self-service AI-powered interactions somewhere between 5% and 15% of their interaction volume. What that results in is either keeping their agents flat instead of growing them 5% or, over time, an anticipated reduction of maybe 5%- 10%. I think at the very high end, 15%. It's not some of the theses I think that were out there a couple of years ago, and I still think there's a little bit of a hangover from that in our space and definitely weighing on our stock. It's proving out that this is exactly what we said all along. This is on the margin. There's a percentage, a small percentage of interactions that will be handled by AI. When that happens, we're a net winner in terms of ARR or revenue per interaction, no matter how you look at it. Yeah. Have you seen a big shift in the mix of channel interactions at Five9, like, you know, voice versus digital versus... Yeah, there's a good trend in our industry toward more and more digital as digital capabilities get better, especially with our digital AI agent, for example. Chatbots historically as an industry have been, you know, frowned upon because they weren't very good. Today's digital, you know, AI agents are much, much better. A lot of consumers would prefer to interact digitally as opposed to voice. Our voice volumes continue to grow mostly as well. Yeah, good. Maybe a competitive dynamic question. NICE made an acquisition recently of business Cognigy. I think they've spent close to $1 billion to buy that asset. I'm not asking you to speak to their rationale, but I'm curious, is that a vendor you were seeing in the space? How does it change the competitive landscape, if at all? Yeah, I would say, look, I don't blame them for making an acquisition. You know, when it comes to AI agents, IVA as we used to call them, we acquired Inference four and a half years ago. We've enhanced and innovated on top of that over the last several years and really continued to modernize that and make it best in class. They and some of our competitors were relying on third-party products for that technology. I don't blame them for making an acquisition. It is interesting to note that the revenue multiple was quite significant. I think some people are saying it was in the mid-20s. If you look at our AI business as 10% of our enterprise subscription revenue and you apply a similar multiple to that part of our business, it's nice to see as a comp. Yes. I guess is the best way to put it. Yeah, let the investors do that math. Yes, we'll let them do that. Bryan, maybe we could talk about the numbers for a little bit. Obviously, we have your guide for the second half. We're going to be lapping some tougher comps from a year ago in the back half of the year. Not asking for guidance beyond that, but how do you think about kind of the shape of that growth curve over the next six, eight quarters? Yeah, and as you said, we haven't provided guidance on 2026, but we do have a medium-term target out there in 2027 where we have the revenue growth range of 10%- 15%. What's underlying that are some key assumptions around macro conditions being similar to what we see today and also continuing to execute on the sales front as we have been. For AI revenue momentum to kind of be on the same trajectory as we've seen in the last several quarters, if you think about it, there are some meaningful potential upsides there. Of course, macro healthy and becoming healthy is one lever. We saw a glimpse of that in Q4 of 2024 when we saw the seasonal uptick being a lot stronger than what we saw in the past and what we anticipated. The other driver is the acceleration and adoption of AI. As Mike talked about, in Q2, we saw triple-digit year-over-year growth in terms of enterprise AI bookings. If we can string together a number of quarters like that, that would be a meaningful upside to the revenue forecast. Mike, we talked about some restructuring that you guys have done in the business. Do you feel like you have the appropriate level of sales coverage? Are you seeing all the deals that you should be seeing? Yeah, I think so. In fact, we definitely have pulled some cost out of the company, but we also haven't hit our sales capacity in that process. Now, have we made changes in our sales capacity? Yes. On a net basis, our sales capacity continues to be very similar to what it's been in the past. Our productivity in this last quarter was obviously very, very good. I'm really, really happy with the changes we've made to the organization, to our go-to-market strategy, to our discipline around segments of the market. We talked about whale hunting versus dolphin hunting. The fact is, the dolphins represent the middle of the bell curve. It's a massive part of this market. The mega deals, or whales as we call them, they're the tail of that bell curve. They're going to, we've got a great pipeline of whales, but we've now got a renewed focus back on the dolphins, the $1 million- $5 million deals. It's showing in the numbers. It's the right diversity across our funnel and our pipeline. Really encouraged to see that. Good. Bryan, back to you, just kind of thinking our way down the P&L. You know, you have some intermediate term targets out there for margins. What are the biggest levers in the model that can move you towards those goals? Yeah, gross margin is definitely the biggest expansion we're expecting. We're at 63% today. The intermediate term model has us at 66%- 68%. Just to break down our business a little bit, subscription gross margin today is in the 70s and going up higher, partially driven, as we talked about earlier, on the AI gross margin being in the high 70s and 80s already and becoming a bigger revenue mix. Of course, the other parts of our business, which is the telecom usage, gross margin in the 50s and professional services that have negative gross margin by design, those are growing slower than our subscription business. The natural mix shift will help there as well. Of course, we have some operating expense leverage that we're anticipating as well, which is why we have the target of 25%- 30% in 2027. Just, you know, thinking about even near term, you know, we have, as Mike mentioned, we went through our operational review in Q1. We have a lot of different initiatives that we're going after, which is why we're comfortable saying that the annual EBITDA margin we expect in 2025 would be at a minimum of 22% compared to the 19% that reported last year. Yeah, perfect. Our meter's running out on us, but I'll ask you a final question. Just what do you think investors are still getting wrong about the CCaaS space and how are you going to prove them that they're getting it wrong? Yeah, I think we're on our way to proving to everyone that we're an AI winner. If you look at the bookings, you look at the revenue growth in AI for us, you look at our overall revenue growth, 16% subscription revenue growth. That is the key metric. Professional services and long-distance resell are the other two components that make up the 19% of our revenue. They are not growth vectors for us. Again, overall, I think as a billion-dollar-plus company growing at 16% in subscription revenue, AI at 42% and the rest of our business growing nicely, I think folks are going to start to realize the reality of what's going on. Obviously, you proved that in Q2 and hopefully we do it again in Q3 and Q4. Thanks, DJ. Yeah, thank you for being here. I appreciate it. Thank you.