Five9, Inc.

Good afternoon and welcome to Five9's second quarter 2026 earnings conference call. I am Tony Rigetti, Senior Vice President of Investor Relations. With me today are Amit Mathuradas, Chief Executive Officer, and Bryan Lee, Chief Financial Officer. During today's conference call, certain statements will be made that are not historical facts and are considered forward looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements include, but are not limited to, statements regarding our quarterly and full-year 2026 guidance, expected improvements in operating and financial metrics, industry trends including with respect to AI, our strategy, priorities, and execution, our product roadmap and technology investment, our markets, customer demand trends, our market position and opportunity, our capital allocation strategy, Thank you for watching. Thank you very much. Unsuccessful development or market acceptance of our AI solutions, failure to maintain and develop our contact center solutions, and other risks discussed under the caption risk factors and elsewhere in Five9's annual and quarterly reports filed with the Securities and Exchange Commission. In addition, management will refer to non-GAAP financial measures during this call. A discussion of why we use non-GAAP financial measures and a reconciliation of our GAAP versus non-GAAP results and guidance is currently available in our press release issued earlier this afternoon, as well as in the appendix of our investor deck that can be found in the investor relations section of Five9's website at investors.five9.com. Also, please note that the information provided on this call speaks only to management's view as of today and may no longer be accurate at the time of the replay. Lastly, a reminder, unless otherwise indicated, financial figures discussed are non-GAAP. And now, I'd like to turn the call over to 509 CEO.

Please go ahead, Amit. Thank you, Tony, and good afternoon, everyone. We delivered another solid quarter and I am pleased to report that our Q2 revenue was $312 million above the high end of our guidance and subscription revenue grew 14% year-on-year, marking a third consecutive quarter of acceleration. AI revenue grew 78% year-on-year and we are increasing our full-year AI growth outlook from more than 40% to at least 60% year-on-year. Together with the significant enterprise win, which I will discuss in more detail shortly, these results provide tangible evidence of the progress we are making against our priorities and are an indicator of what 5.9 can look like with greater focus, speed, and operating discipline. Last quarter on my first earnings call as CEO, I laid out full priorities for 5.9. Building a performance-driven culture, optimizing operations, strengthening the core business, and winning in AI-powered customer experience. This quarter, we made progress against each of those priorities, measured by the operating indicators we have focused on. The most important point is this. 5.9 is sharpening its position around the opportunity we are built to lead. We are a voice-led enterprise platform for customer experience. And when we say voice-led, we do not mean voice limited to human agents. Voice is the most natural, highest context interface for human integrations where reliability, governance, AI, digital workflows, data, integrations, and human agents all need to work together in production. Thank you for watching. Our review of the market, product portfolio, and go-to-market priorities has reinforced where we should concentrate resources. Complex businesses, especially financial services, healthcare, insurance, and other regulated industries, where voice, compliance, integrations, governance, and human-in-the-loop workflows are not just essential but required. These are environments where Five9's platform depth is critical. The customer interactions are complex, the cost of failure is high, and the buyer needs technology that works reliably in production, not just in a demo. We are aligning our resources behind this view, and we are allocating resources towards the customers, verticals, and use cases where 599's opportunity is greatest, while being more disciplined in other areas. I want to acknowledge that transparency with the investor community remains a central obligation. That means less narrative, more evidence. I believe Q2 continues to demonstrate that. On operations, we announced a significant set of organizational changes during the second quarter. These changes reflect a deliberate effort in product management, AI, automation, architectural organizations together under a single leadership structure, creating cleaner ownership across the full product lifecycle and faster delivery. To lead this unified organization, I am pleased that Niranjan Vijayaragavan joined Five9 as our new Chief Technology Officer to lead this unified organization. Turning to sales, Rob Hornish was appointed Chief Sales Officer to lead our global sales organization with the focus on strengthening go-to-market execution and driving disciplined revenue performance. As we accelerate our transformation, we have recognized the need for a dedicated function to connect our strategy to execution. Sven Linsmaier, joint as EVP Transformation and Strategy, responsible for our highest priority transformation initiatives, disciplined execution across the organization and corporate development, including M&A. Each of these hires brings experience building modern enterprise platforms across AI, automation, digital workflow, and go-to-market execution. This is relevant because, in our opinion, the next phase of customer experience will require more than maintaining a traditional contact center. It will require bringing voice, digital AI, data, and workflows together into one platform. On the core business, we continue to see healthy indicators. Subscription revenue is strong, growing 14% year-on-year in Q2, driven by AI revenue growth acceleration to 78% year-on-year. Our LTM subscription dollar-based retention rate remains steady at 1%. A CX platform that seamlessly connects with other critical systems offering large regulated enterprises a trusted platform that can support customer experience at scale, not a sprawl of solutions. A powerful example is our recent win with the Fortune 100 Financial Services customers. Representing approximately 100 million of total contract value. This was a competitive process against a select group of enterprise-grade CX providers, and we earned it on the strength of our proof of concept and our delivery and execution capabilities. Working as one team with Google and a leading global systems integrator, Notably, it is one of the first large deals transacted for the Google Cloud Marketplace, and our joint go-to-market motion with Google was the key driver of this customer's decision. Five9 was selected as a core CX platform supporting the customer's broader cloud migration strategy. We expect the current five-year agreement will ramp to approximately 25 million of ARR when fully deployed. Now let's turn to why we believe AI is strengthening our platform. Contact centers are going through a major transformation. Service is no longer viewed only as a cost center to contain. Increasingly, enterprises see customer experience as enabling that shift by automating routine work and improving the economics of service. In many customer conversations, the ROI is becoming clearer. Better service, more capacity, faster response times, and stronger customer outcomes. That makes the move to a modern cloud-based CX platform more urgent, not less, and is driving a reallocation of contact center spend away from labor and towards the type of mission-critical software that Fire9 provides. Voice is central to that opportunity. It remains one of the most important channels in customer engagement. and as AI handles more interactions, delivers more insights and improves agent quality, the value of a voice platform increases. It is no longer just about routing calls to people. It is about orchestrating the handoff between people, AI voice agents, AI digital agents, data compliance, security and governance inside one production environment. That is why voice is a starting point for our strategy. The question is not whether AI will penetrate the voice channel. It already has. The question is whether enterprises deploy voice AI as a disconnected point product or inside a trusted CX platform that already manages voice, routing, data, governance, and human handoffs. We believe the enterprise answer favors 5.9. That is why we believe AI can be a catalyst for CCaaS growth. It increases the importance of the platform as critical infrastructure that connects all these elements that enterprises. But in complex enterprise environments, being early with a feature is not the same as being trusted as an operating platform. These customers need AI embedded into the platform they already depend on. That is why our focus is not AI and isolation. It is AI agents and human agents working together across voice and digital channels inside one trusted platform to deliver a humantic CX. Over time, AI agents will handle a larger share of customer interactions, including many routine and multi-step service requests. will remain essential for complexity, judgment, empathy, escalation, and oversight. The value comes from orchestrating both together, so the customer experience is seamless and the platform learns from every interaction. This is where we believe the category is going, and Five9 is built for that future. We are also delivering new products that directly support this strategy. In June, we advanced our AI-powered CX initiative with the release of the next-gen Five9 voice AI agents, a re-architecture of our voice AI capabilities built from the ground up for the human world we believe is upon us. Voice AI agents are designed to reason, act, resolve customer requests with seamless handoffs to human agents when needed. What sets this apart is that it is built natively into Five Nights Camera, knowing when to act, when to escalate, and how to bring in humans with context. It is also about operating inside governed workflows where reliability, control, and oversight are essential. Customer engagement is not an open-ended chatbot environment. It is rules-driven. Operationally sensitive and tied to real workflows. These are the problems we can solve. We are seeing evidence of this strategy working in the quarter. Customers are adopting AI capabilities at an accelerating pace, and we are seeing continued demand from enterprises that need trusted AI infrastructure as they modernize customer experience in the cloud. In closing, we have a strategy that is progressing and a sharper operating focus. The work is not complete, but the progress is real. We are concentrating our resources where 5.9 has the strongest strike to win. We believe AI strengthens the value of our core platform, expands our monetization opportunity, and accelerates the need for a trusted cloud CX infrastructure. With that, I'll turn the call over to Bryan.

Thank you, Ahmed. Good afternoon, everyone. I'll take you through our Q2 financial results and then walk through our updated guidance. 11% and 6% respectively. Our subscription revenue grew 14% year-over-year made up of two components. First, our CCAS revenue grew a stable 7% year-over-year as expected. And second, our AI revenue accelerated to 78% year-over-year growth. This acceleration in AI revenue was driven by several customers in a backlog ramping earlier than forecasted, pulling forward the deployment timeline rather than reflecting an increase in deal scope. As a result, AI revenue reached approximately $39 million in Q2, representing an annual run rate revenue of over $150 million. Additionally, AI revenue now makes up approximately 15% of total subscription revenue, up from approximately 9% a year ago. Also, I'd like to point out that our concurrency count grew in line with our CCAS revenue growth. Looking ahead, we continue to expect CCAS revenue growth to generally track the sequential progression of total revenue growth in our guidance for the remainder of the year. Driven by the timing of backlog converting to revenue. For AI revenue, we now anticipate full year 2026 growth to be at least 60% year-over-year, up from our prior outlook of more than 40%, reflecting the earlier than forecasted ramps I mentioned a moment ago. LTM subscription dollar-based retention rate was 107% in Q2, in line with our expectations. We anticipate this key metric to increase in Q3 by approximately 1% per point, driven by existing backlog. Now turning to profitability. Adjusted gross margin in Q2 was 61%, compared to 63% in Q2 2025. Adjusted EBITDA in Q2 was $70 million, or 22% of revenue, compared to $68 million, or 24% of revenue in Q2 2025. Both metrics were impacted by temporary expansion of professional services capacity, enabling us to address customer demand to deploy their AI solutions earlier than anticipated. We expect the adjusted gross margin to run through the second half of the year. Please note that the sequential comparison of Q226 versus Q126 for both adjusted gross margin and adjusted EBITDA margin was also affected by previously disclosed one-time vendor discount of slightly more than 1% point of margin that benefited Q126 and did not recur in Q226. In terms of cash flow, cash from operations was $42 million, or 13% of revenue, and free cash flow was $15 million, or 5% of revenue. Please note that in addition to Q2 cash flow being seasonally the lowest quarter of each year, there are two non-recurring items, including variability from our transition to annual customer payments and a pull forward of some capital expenditures from the second half of the year into Q2. We ended the quarter with approximately $654 million in cash, cash equivalents, and short-term investments. We continue to be on track for purchase of PP&E to come in at approximately 3.5% of revenue for 2026. As a reminder, this is temporarily elevated at approximately 1 percentage point above last year's rate in order to support our global data center refresh in 2026. On share repurchase, the $90 million ASR is well underway. We received an initial delivery of 3.1 million shares, representing approximately 80% of the total shares expected to be purchased under the program. The remainder is expected before September 30th. The new $200 million board authorization we announced last quarter continues to be available, and we will deploy it opportunistically. Before moving to guidance, I would like to touch on the Fortune 100 financial services customer win that Ahmed highlighted. This is a five-year contract with a total contract value of approximately $100 million, comprised of both subscription and professional services, and we expect this customer to reach approximately $25 million in subscription ARR once fully deployed. Currently, we're in the initial planning phase, and we expect a negligible subscription revenue contribution in 2026, followed by a gradual ramp in 2027, and more meaningful increases thereafter, similar to ramp schedules of prior deals of comparable magnitude. Moving to our outlook. For total revenue in the third quarter, we're guiding to a midpoint of $319 million, with a range of $316 million to $322 million. For the full year of 2026, we're guiding total revenue to a midpoint of $1.266 billion, with the range of $1.26 billion to $1.272 billion, which is up from our prior midpoint guidance of $1.26 billion. Consistent with what we said last quarter, conversion of backlog to revenue is the key driver of our revenue guidance for the remainder of the year with essentially no dependency on go-getter of new business. For non-GIBPS in the third quarter, we're guiding to $3.26 per diluted share in range of $3.22 to $3.30 per diluted share. We continue to anticipate annual adjusted EBITDA margin to exceed 24%, and annual free cash flow to be approximately $175 million. Please keep in mind that our organizational design initiatives, including recent appointments to our leadership team, are expected to generate higher temporary expenses in 2026, but provide longer-term cost efficiencies, along with improved focus, speed, and effectiveness. Thank you for watching. With that, I'd like to open the call for Q&A. Operator, please go ahead.

Thank you, Bryan. Before we begin our Q&A session, we ask that our analysts limit themselves to one question to allow for as many questions as time permits. Our first question comes from DJ Hines of Canaccord. Please unmute yourself and ask your question.

Hey, thank you, guys. You hear me all right? We can hear you well. Awesome. Congrats on the nice quarter and especially the large deal. That's super exciting. Ahmed, I have a high-level AI question for you. So is AI agents increasingly operated across the contact center, CRM systems, back office systems? Which platform ultimately owns the orchestration layer? And what does Five9 need to control directly? Where do partnerships make more sense? Does it matter to your financial profile? Just walk me through your thinking there.

Yeah, thank you for the question, DJ. Look, I think one of the things that I wanted to set out by just defining is our belief is that Humans and AI are going to come together to really start delivering new economics in the contact center as well as improved experiences and new ways of doing business. I think we're starting to see that. I think to your question on AI agents, the one thing that I would say we have that is very powerful is the fact that we built this business with the heritage of voice. We understand telephony. We own the routing. And I think that is a key differentiator when you think about point solutions or other players on how they service their customers. Let me give you an example. Today, DJ, you come in, you are a customer which has a very specific need around a billing issue and you are infuriated because you're frustrated with the outcome. What would happen as you talk to an AI agent, if you were a point solution or outside the routing engine, what happens is when the AI agent identifies you and says, hey, you have a problem, it'll send you to the billing queue. What a company like Five9 can do is, because we have run agent equality management and all your agents, I've already identified which agents are best of breed to handle that question, which agents have a high empathy score, and now with my agentic routing, I can send that call specifically to that one agent that has high empathy and high ability to answer that question. I think the way I think about it is, look, as a point solution, you are the hammer. You can come in and give a 50% containment rate. A company like Five9 that is built around voice is the entire toolbox, right? And we can drive the next set of resolution and containment Very helpful. Thank you.

Our next question comes from Sidi Panagri of Mizuho. Please unmute yourself and ask your question.

Great. Thank you. It's great to see the double-digit growth, you know, earlier than your second half plan. So I want to ask you about your conviction on the second half, you know, double-digit growth especially. as you see the momentum in the business. What gives you that kind of confidence and any color on that large financial deal that you signed in terms of diplomacy?

Thank you so much for joining us. CCAS revenue was stable at 7% year over year, which is exactly what we anticipated. Now, AI revenue did accelerate to 78% from 68% the prior quarter, and that was primarily driven by several customers who were ready to deploy faster than what we forecasted. As we've always said, we have the PS resources to throttle up and down to meet whatever the customer demands are. Now, even if you exclude those customers, by the way, our revenue growth still would have been in and around that 68% that we reported in Q1. Now, fast forwarding to the second half, the shape of the curve there and the confidence that we get is all around the backlog. So every customer in that backlog has a unique schedule of ramp that we have great visibility into, and we'll continue to execute against that. And that's what's underlying it. And I just, as a reminder, I want to let everyone know that we have essentially no dependency on new logo go-gets to get to that guidance in the second half of the year. And then just from a ramp perspective for the Fortune 100 financial services company that we just won, Amit mentioned during the call, it's $100 million approximately in TCV. That is both subscription and PS. It's a five-year contract on our new revenue model. And if you look at the ramp of it, it's going to be immaterial contributions in 2026 to subscription revenue. and more so in 27 and meaningfully bigger increases thereafter. And it'll mirror a lot of the shape of the curve with ramps that other customers of this magnitude had in the past.

Great. Thanks for that, Kalar.

Our next question comes from Arjun Bhatia of William Blair. Please unmute yourself and ask your question.

Yeah, perfect. Thank you. Bryan, if I can just keep going on that sort of line of questioning. The large financial services customer, was there a change in that timeline? I don't know why I thought maybe there was supposed to be more meaningful contribution in 2026. I guess part of what I'm trying to get to is you had a great quarter last It seems like AI revenues are accelerating, but I think the full year guide may be kept to the back half outlook the same despite the strong performance in Q2.

Yeah, Arjun, so great point. I want to clarify one thing. When I talk about the Fortune 100 financial services company, that's the new logo win that we had in Q2. I believe the financial services company you're referring to is the Fortune 50 services company that we won a couple of years ago and that started ramping in 2025. And it is in our backlog and that's been ramping more so throughout 2026. And it'll be a multi-year journey beyond that as well. Now, to answer your point about keeping the second half guidance the way it was, It's because if you think about the AI revenue growth acceleration that I mentioned earlier, essentially what we did was their ramps were supposed to happen in Q3, Q4, and they're ready to move faster with the deployment. So we essentially increased their PS capacity to bring that ramp forward into Q2. So essentially Q3, Q4 remains the same and still very strong in that double digit growth is what we're guiding to. But we pull that forward to accelerate in Q2.

Okay, got it. That clarifies it. Thank you.

Our next question comes from Remo Lenshow of Barclays. Please unmute yourself and ask your question.

Perfect. Thank you. I wanted to stay on that Fortune 100 customer. I wanted to make it slightly more bigger as an industry theme, though. The idea of large customers moving to cloud-based call centers has been a theme for a while, but it was always like, can you handle, as a cloud provider, can you handle and the size of the seats, etc. This is now like a second big kind of reference customer for you coming up. What do you see in terms of industry and the industry realizing that if you want to do AI, you need to be in the cloud or otherwise it doesn't work? And what does it also tell us about customers being comfortable of you being able to handle these larger seat numbers? Thank you.

Yeah, thank you for the question. I'll start, you know, Brian, feel free to chime in. Look, just as you said, this was a migration for this customer from their on-prem to cloud. And we are starting to see some of that shift happening. It's always been in the backlog, and there are a number of deals that sit there that we're keeping an eye on as they progress. But the one thing I think you called out, which is real, is, look, when customers come to us and they deploy AI, particularly voice AI, on-prem, the architecture of on-prem is not specifically built to go run a Gentic voice at its best output. And so in some cases, that actually forces customers to start taking a look at it migrating to cloud and moving in that direction. I wouldn't say the only reason, but this is one of the reasons why this large customer started looking at, hey, how do we actually start making this jump so we can start taking advantage of these new technologies that are available? Pokemon 5.9, look, I think you just mentioned it. We have now proven over and over again, and this is really exciting, that we have the right to go win these sorts of customers. Our technology is reliable and useful and customers are going into it. Our delivery is another big capability. And so that is one big proof point that is great for us to see and great for the market to see as well. The other piece that I wanted to flag is this is also a major win for our partnership with Google. One of the reasons we won this deal is we went in with them and showcased the strength of our joint platform and integration and the ability for us to solve this large customer's needs across all different facets. And as called out in the script, this was the first full-size deal that we transacted through the Google Marketplace. And so really excited about that and what comes next with that.

Thank you. Our next question comes from Scott Berg of Needham. Please unmute yourself and ask your question.

Hi, I'm Brian. Nice quarter, and thanks for taking my questions. I wanted to follow up on Ramos' question there on the large Fortune 100 went through the Google Marketplaces. You just mentioned it's the first kind of full-size deal that you won through that channel opportunity. I guess, how do you make that be repeatable? Because if you told me you had a new channel opportunity, through the Google Marketplace. I would have thought you're going to get a lot of these kind of dolphin deals of a million dollar plus that the company's historically signed. There's something that can ramp to $25 million. It seems like a much larger deal than I would have thought of out of that marketplace. So how do you make this repeatable? What type of resources is Google maybe helping throw at this with you to get involved with more of these things?

Yeah, thank you, Scott, for the question. Look, when I look at the pipeline with them, there's a variety of deals. So it's not just one size fits all. So I just wanted to flag that. And obviously, we will keep working them. But in some of these cloud migrations, especially the ones from on-prem to cloud, they tend to be the larger customers. And this is one that came through first. Talking about the resources and working together with them, look we've always said this wasn't just a signature deal in terms of signing a joint agreement and selling this was hands-on keyboard right putting the driving better integrations driving the solution is one and and those are investments that have already been made you know from us and we will continue to make them with Google as as the needs evolve and you know and we play in different parts of the of the ecosystem so I'll leave it at that hope that hope that answers your question very helpful thank you

Our next question comes from Elizabeth Porter from Morgan Stanley. Please unmute yourself and ask your question.

Great. Thank you so much. I wanted to follow up on the comment about the AI deals ramping faster than expected. We're just curious what's driving that faster time to production. Is there any sort of improvements in Five9's ability to implement greater customer readiness, data maturity, or just buyers becoming more comfortable? And really importantly, how appreciable is that improvement across the broader pipeline? Thank you.

Yeah, so Elizabeth, thanks for the question. What we always say is that we have the resources to drive deployments as quickly as the customer needs. And in this situation, especially with larger customers, there are many different business units and different players with different needs that have to all align and come together. And our professional services organization builds a bottoms-up forecast with the customer to figure out exactly what that ramp schedule is going to look like. This was one of those situations where Thank you for joining us. Thank you very much.

Even if we remove the ramps for these large customers, our AI growth this quarter would have mimicked last quarter. So pretty sizable net of pulling all these deals forward. What is happening is we are seeing customers across the stack starting to call us for AI, whether it is new logos where we have a high attach. In fact, every million dollar deal that goes out the door has 100% attach of AI. Thank you very much. is what customers are coming to us for and saying, we want your solutions to solve the human in the middle component. And how do we expand from what we have? Or maybe in some cases, even start with AI and follow up with CCaaS. So I just wanted to share with you what we see happening around the business.

Our next question comes from Catherine Trebnick of Rosenblatt. Please unmute yourself and ask your question.

Thank you. Thanks for taking the question. Nice quarter. Can you unpack a little on what was the pipeline win rates trend through the quarter versus 90 days ago? And then add into it, you added some new leadership in and how has that changed the execution and enthusiasm of your sales force? Thank you.

Hi Catherine, I'll take the first part and then hand it over to Ahmed. So in terms of our pipeline and conversion, you know, everything's running on track overall and we're pleased with the momentum that we're seeing in the business. So nothing substantial to note on that front. Of course, you know, we shared with you the large customer windows, a very good momentum that we're seeing in the business.

Yeah, look, when you asked around the leadership, particularly around sales, look, first of all, I am super excited to welcome Niranjan, Sven, and Rob to the company. They bring a tremendous amount of experience. And in my opening remarks, I said that my job was to move this business faster, remove roadblocks, find synergy points. This was what some of this hiring was about. in particular to the sales team. Look, as we transition to winning more enterprise level deals, as we transition from CCAS and AI sales to selling platforms and outcomes and solutions, we needed to shift how we approach our market, how we work with Jay Lee, our new Chief Marketing and Growth Officer. And Rob brings the perfect set of experience working with mid-markets, enterprise, bringing the next level of discipline, transparency, and shift from product to solution selling within the business. And our sales teams, and as a matter of fact, all the teams where these new leaders have come in, There's a new pep in the step, right? People are excited by what is happening in the business, some of the progress we're making, some of the wins we're getting, and now a new horizon of leadership that can take us from $1.3 billion to $3 billion and what that does for the business. So I'll pause there, but I think people are generally excited about it.

Thank you.

Our next question comes from Terry Tillman of Truist. Please unmute yourself and ask your question.

Hi guys, John Carlo on for Terry. Congrats on the quarter and thank you for taking the question. Just wanted to ask how the end market health has been based on contact center seats. Are we seeing it stable or growing and what are the customers sharing as we move out the next six to 12 months? Thanks.

Yeah, so Giancarlo, we mentioned that if you look at our concurrent agency count, it's growing at a healthy rate that's relatively in line with our CCAS subscription revenue growth rate. And we continue to see subscription revenue per seat increasing in the single digits, very consistent to what we've seen in the past as well. If you look forward, I mean, we really have not seen that seed compression, nor have our customers. But what's been resonating really well with our customers is the fact that we're going to this revenue commit model, which gives them the flexibility between, you know, next three to five years, the mix between human agent seeds versus AI agents. It gives them a lot of flexibility in terms of changing that mix. So the predictability and the flexibility has been resonating well, while giving us that visibility into revenue too. So, for instance, the Fortune 100 financial services company is on that model as well.

Got it. Thanks, guys.

Our next question comes from Will Power of Baird. Please unmute yourself and ask your question.

Thanks for taking the question. Just maybe one more on the Fortune 100 financial services win. I was hoping you could just talk a bit more about that bake-off. Were any of the smaller voice AI players in the mix, or just curious if it was more of a traditional bake-off? And then I think you alluded to it a second ago, but it sounds like that customer might be deploying some of your AI products, but just wondering if that's IVAs or if there's other vendors that you're planning to integrate with for some of the AI solutions. Thank you.

Thank you for the question. Given the size of deal and what was going down, it was really some of the known names that you would expect that would play in this space. At this point, the award has been for the CCAS portion. of the business. And of course, as the conversations continue with the customer and new facets emerge, we will bring you along for that. But I hope that gives you the color of what was happening with the deal, who was in it, and what this piece is about.

Thank you. Our next question comes from Jackson Ader of KeyBank. Please unmute yourself and ask your question.

Hey, thanks guys for taking the question. This is Jack Hahn from Jacksonator. Could you talk a little bit about the sources of revenue upside we could see relative to the incremental go-get and that cross-sell for the rest of the year?

Yeah, so Jack, for the rest of the year, I think this is a way I would break it down. So first of all, let me talk about it from a CCaaS versus AI perspective and also bring in some of the DBRR points as well. So first of all, I mentioned earlier that we're not depending on any new local go-gets to meet the guidance, incremental revenue in the guidance for the rest of the year. And if you break it down between CCaaS and AI, We're expecting CCAS revenue to mirror the shape of the curve of our total revenue guide. And then for AI, we just reported 78% in Q2, and we're saying for the annual number in 2026, The year-over-year growth will be more than 60%, and that's up from the more than 40% comment that we made as an outlook last quarter. And then finally, from a DBRR perspective, we've been saying all along that we expect inflection in the second half of the year. So we just report 107% in LTM subscription DBRR in Q2, and we're expecting that to inflect up by one percentage point in Q3.

That's helpful. And then maybe as a quick follow-up, can you talk about where you are seeing strongest customer demand for voice AI agents? Is it in the self-service, agent assist, and in automation? Can you help frame where the demand is there for the use cases? Yeah, sure.

Look, we're fortunate that we're seeing demand in multiple use cases, whether it is simple or complex. But I'll give you an example. As we've launched our new voice AI agent, we are already seeing customers deploy them. One of them had started deploying it in a simple use case like password reset, and next it's gone into a complex use case, which we're already working in deployment with them right now. So I think in a lot of these cases, you know, our last gen EIVA was being used in high complex areas, especially in regulated industries. The new product is started off in easy use cases, but have already started to work that way into more complex scenarios. And, you know, we're seeing the pipeline for those kind of use cases build. So, you know, excited about that.

Our next question comes from Samad Samana of Jefferies. Please unmute yourself and ask your question. Our next question comes from Tom Blakely of Cantor. Please unmute yourself and ask your question. Our next question comes from Rishi Jalibriya of RBC. Please unmute yourself and ask your question. This concludes the Q&A portion of our call. I will now hand the call back over to CEO Amit Mithradis for closing remarks.

Thank you, everyone, for your questions and for joining us today. We are moving very quickly to position 5-9 for a strong 2026, building directly on the speed, discipline, and focus of our first half results. At the same time, we continue to execute on our vision for Humantic CX. By coordinating human agents and AI in real time, we are positioned to deepen our competitive advantage. We look forward to speaking with you all on our next quarterly call. Have a great day.