--- title: "Five9 pays US$325m cash for Level AI, about 11× next year's ARR" summary: "Five9’s merger filing, deal release and third-quarter results of 5 November: what Level AI sells, how a deal with no break fee works, and why the shares fell." url: https://www.thetechbag.com/blog/five9-buys-level-ai-325m format: Note desk: "Markets & the AI economy" region: Global published: 2026-11-06 facts_checked: 2026-11-06 author: TechBag (The TechBag Journal) tags: ["Five9","Level AI","acquisition","contact centre","CCaaS","AI agents","conversation intelligence","termination fee","earnings","guidance","ARR"] cover: https://www.thetechbag.com/blog/covers/five9-buys-level-ai-325m.png --- # Five9 pays US$325m cash for Level AI, about 11× next year's ARR *Five9’s merger filing, deal release and third-quarter results of 5 November: what Level AI sells, how a deal with no break fee works, and why the shares fell.* Note · Markets & the AI economy · By TechBag · Published 2026-11-06 · Facts checked 2026-11-06 · Canonical: https://www.thetechbag.com/blog/five9-buys-level-ai-325m Five9, which sells cloud software for running contact centres, agreed on 5 November to buy Level AI for US$325.0m in cash, before adjustments for Level AI’s cash, debt, deal expenses and working capital at closing.[1] Level AI’s annual recurring revenue is about US$20m and grew about 50% in a year, the chief financial officer, Bryan Lee, said on the call; he put the price at “approximately 11x based on next 12 months ARR.”[8] The same evening Five9 reported third-quarter revenue up 13% to US$323.3m, with subscription revenue up 16%.[3] Its shares fell 19.8% to US$27.40 in trading straight after the release, StockStory reported.[9] US$325m in cash, before closing adjustments Five9 8-K, 5 Nov ~US$20m Level AI's annual recurring revenue, up about 50% said on the call ~11× the price over the next twelve months' ARR said on the call US$0 termination fee, payable by either side Five9 8-K, 5 Nov ## What Five9 is buying, in its own words Level AI sells AI agents, agent assist, quality management, coaching and “Voice of the Customer” analysis on one layer that reads customer conversations, running on its own family of models, Level AI Latitude. It handles more than one billion customer interactions a year, for customers including Gusto, Chime, Empyrean and VistaPrint, and is backed by Adams Street Partners, Battery Ventures and Eniac Ventures. The two companies have worked together since 2022, through Five9’s marketplace.[2] The reason Five9 gives is reach. The applications will be sold inside its own platform and also on their own, to companies “not yet ready to move their on-premises contact centers to the cloud” and to those on rival clouds.[2] “Standalone AI is an attractive business in its own right, whether or not those customers eventually adopt Five9 CCaaS,” the chief executive, Amit Mathradas, said on the call. Lee said the deal would take about one point off the adjusted EBITDA margin in 2027, that Level AI should reach break-even in about six months, and that the 2026 guidance leaves Level AI out.[8] The pricing matters for what is being bought. Five9 charges its monthly subscriptions “primarily based on the number of licenses”, one per agent, while its AI is sold by consumption; its 10-Q lists the risk that AI handles more interactions and licence revenue falls.[5] AI revenue was about US$45m in the quarter, 17% of subscription revenue against 10% a year earlier, Lee said; concurrent seats grew “relatively in line” with contact-centre revenue.[8] ## A deal with no break fee In a takeover of a listed company, a break fee is what one side pays if the deal falls away for reasons the contract names: in ADT’s [US$15.3bn sale to Thrive Holdings](https://www.thetechbag.com/blog/adt-thrive-15-3bn-take-private), ADT pays US$227m in specified cases and the buyer US$473m if it fails to close when required.[14] Here “neither party is required to pay a termination fee”. Either side can end the agreement if the deal has not closed by 5 February 2027, or if the other breaches it and does not cure the breach. There is no shareholder vote to win: Level AI holders with enough votes signed support agreements, and once they deliver written consent no further approval is needed.[1] Five9 expects to close in the fourth quarter and to pay from cash on hand and marketable investments.[3][5] TechBag countOne quarter's revenue, under half the cash pile US$325m is about Five9’s revenue for the quarter to 30 September (US$323.3m). On that date it held US$263.8m in cash and US$433.8m in marketable investments, US$697.7m in all, so the price is about 47% of it; it also carried US$738.2m of convertible notes.[3] ## Why the shares fell, as it was explained **Figure: Five9's growth climbed back to 13%; its fourth-quarter guidance implies about 10%** *Five9 revenue by quarter, US$ million, and growth on the same quarter a year earlier, %, Jul–Sep 2025 to the Oct–Dec 2026 guidance* | | Revenue (US$m) | Change on a year earlier (%) | | --- | --- | --- | | Q3 25 | 285.8 | 8 | | Q4 25 | 300.3 | 7.7 | | Q1 26 | 305.3 | 9.2 | | Q2 26 | 312.4 | 10.3 | | Q3 26 | 323.3 | 13.1 | | Q4 26 guide | 331 | 10.2 | Source: Five9 results releases (8-K Exhibit 99.1) of 19 Feb, 30 Apr, 6 Aug and 5 Nov 2026; supplemental metrics (Exhibit 99.2), 5 Nov 2026 · as of 5 November 2026 · Q4 26 is the midpoint of the US$328–334m guidance; Q3 25 growth is Five9's rounded figure; other growth is TechBag arithmetic Five9 raised its full-year revenue guidance to US$1.269–1.275bn, from US$1.260–1.272bn in August, and lowered its non-GAAP earnings per share guidance to US$3.17–3.21, from US$3.22–3.30.[3][6] Lee put the US$0.07 cut at the midpoint down to the timing of savings, planned changes to the organisation and a higher share price, which raises the diluted share count.[8] StockStory read the fall as a response to earnings guidance below analysts’ forecasts.[9] DA Davidson cut its price target to US$30 from US$33, “more measured on the potential return on investment” given the price, and said the deal “ultimately stole the show”; Needham kept its Buy rating and US$40 target.[10][11] The shares had already closed 6.1% lower on 5 November, at US$34.14, before the announcement.[12] What to watch: whether the deal closes this quarter as Five9 expects, and the first quarter in which Level AI’s revenue and costs appear in Five9’s numbers. How we did this Figures as of 6 November 2026, 7pm IST (08:30 New York) Deal terms are from Five9’s 8-K and deal release of 5 November; revenue, guidance and the balance sheet from its results releases[3][6][7][13], supplemental metrics[4] and 10-Q. Level AI’s ARR, the 11× multiple, the margin effect and the AI revenue figures were said on the call and are not in the filings. Growth rates, the implied fourth-quarter growth and the share of cash and investments are our arithmetic. US trading on 6 November had not opened; we found no premarket figure published by 08:30 New York at a source we could read, so we report the after-hours move. Spotted an error? Write to us; corrections are published at the foot of the piece. Sources 1. [Five9, Form 8-K, Item 1.01: Agreement and Plan of Merger with Ujwal, Inc. (d/b/a Level AI)](https://www.sec.gov/Archives/edgar/data/1288847/000128884726000141/fivn-20261105.htm) — 5 November 2026 2. [Five9, Five9 to Acquire Level AI, Advancing AI-Powered CX Platform (8-K, Exhibit 99.1)](https://www.sec.gov/Archives/edgar/data/1288847/000128884726000141/projectlanderpressreleas.htm) — 5 November 2026 3. [Five9, Five9 Announces Third Quarter 2026 Financial Results (8-K, Exhibit 99.1)](https://www.sec.gov/Archives/edgar/data/1288847/000128884726000143/a093026ex991earningsrelease.htm) — 5 November 2026 4. [Five9, supplemental metric disclosure, Q1 2024 to Q3 2026 (8-K, Exhibit 99.2)](https://www.sec.gov/Archives/edgar/data/1288847/000128884726000143/q32026fivn-supplementalm.htm) — 5 November 2026 5. [Five9, quarterly report on Form 10-Q, quarter to 30 September 2026](https://www.sec.gov/Archives/edgar/data/1288847/000128884726000145/fivn-20260930.htm) — 5 November 2026 6. [Five9, Five9 Announces Second Quarter 2026 Financial Results (8-K, Exhibit 99.1; previous full-year guidance)](https://www.sec.gov/Archives/edgar/data/1288847/000128884726000121/a063026ex991earningsrelease.htm) — 6 August 2026 7. [Five9, fourth quarter 2025 results release (8-K, Exhibit 99.1)](https://www.sec.gov/Archives/edgar/data/1288847/000128884726000021/a123125ex991earningsrelease.htm) — 19 February 2026 8. [The Motley Fool, Five9 (FIVN) Q3 2026 earnings call transcript (Amit Mathradas, Bryan Lee)](https://fool.com/earnings/call-transcripts/2026/11/06/five9-fivn-q3-2026-earnings-call-transcript) — 6 November 2026 9. [StockStory (via FinancialContent), Five9's Q3 2026 sales top estimates but stock drops 19.8%](https://markets.financialcontent.com/stocks/article/stockstory-2026-11-5-five9s-nasdaqfivn-q3-2026-sales-top-estimates-but-stock-drops-198) — 5 November 2026 10. [Investing.com, DA Davidson cuts Five9 stock price target on acquisition concerns](https://investing.com/news/analyst-ratings/da-davidson-cuts-five9-stock-price-target-on-acquisition-concerns-93CH-5008126) — 6 November 2026 11. [Investing.com, Needham reiterates Buy on Five9 stock after strong AI growth](https://www.investing.com/news/analyst-ratings/needham-reiterates-buy-on-five9-stock-after-strong-ai-growth-93CH-5007128) — 6 November 2026 12. [Nasdaq, FIVN historical prices (closes, 4 and 5 November 2026)](https://www.nasdaq.com/market-activity/stocks/fivn/historical) — 5 November 2026 13. [Five9, first quarter 2026 results release (8-K, Exhibit 99.1)](https://www.sec.gov/Archives/edgar/data/1288847/000128884726000077/a033126ex991earningsrelease.htm) — 30 April 2026 14. [ADT, Form 8-K, Item 1.01: Agreement and Plan of Merger with Abode Parent, LLC (termination fees)](https://www.sec.gov/Archives/edgar/data/1703056/000119312526437964/d184339d8k.htm) — 29 October 2026 **Disclosure.** TechBag is a software reseller: it earns a margin when a reader buys through it, including from vendors named here. The analysis is TechBag’s own; no vendor paid for or saw this piece before publication. Facts are labelled reported, TechBag count or our view. **Read this next:** [Software shed about US$1tn in a week; seat-priced renewals are next](https://www.thetechbag.com/blog/software-selloff-seat-pricing-renewals) — Why investors blamed AI agents for shrinking seat counts: how far SaaS shares fell in the first half of 2026, and what to ask for at renewal. Go deeper on TechBag - [How AI agents are billed now](https://www.thetechbag.com/blog/how-ai-agents-are-billed-credits-actions) — per action, conversation, credit, token and seat: the consumption pricing Five9 uses for its AI - [Freshworks passes US$1bn ARR](https://www.thetechbag.com/blog/freshworks-1bn-arr-it-desk-22-customer-service-4) — another customer-service software quarter, a day earlier, with what AI agents add - [Freshdesk](https://www.thetechbag.com/freshworks/freshdesk) — a customer-service suite priced per agent, with AI agents on top