Cloud Contact Center Software Provider Five9 Announces $325 Million All-Cash Acquisition of AI Startup Level AI; Shares Fall Over 23% on Mixed Guidance
Five9 announced a $325 million all-cash acquisition of AI-native contact center startup Level AI alongside its Q3 earnings beat. Despite strong short-term results, full-year guidance missed Wall Street expectations, and the significant cash outlay triggered a drop of over 23% in after-hours trading.
U.S. cloud contact center software provider Five9 Inc. announced on November 5, 2026, that it will acquire artificial intelligence-native competitor Level AI in a $325 million all-cash deal. The transaction is expected to close in the fourth quarter, subject to customary closing conditions. Five9 stated that the move aims to strengthen its competitive position in the customer experience landscape and deepen its AI talent pool.
Level AI develops a contact center and customer experience intelligence platform that uses AI to support human agents on calls, analyze interactions, and provide real-time guidance. Five9 noted that Level AI's applications are currently in production with enterprise customers, handling more than 1 billion customer interactions annually. Five9 plans to continue offering Level AI as a standalone tool while also integrating its capabilities into the Genius CX Platform.
Alongside the acquisition news, Five9 reported its third-quarter financial results. Adjusted earnings per share came in at 82 cents on revenue of $323.3 million, slightly surpassing Wall Street estimates of 80 cents and $318.3 million. However, the company's guidance for the current quarter and full year was mixed: current quarter EPS is expected between 88 and 92 cents, below the market consensus of 99 cents, and full-year EPS is projected at $3.17 to $3.21, missing the consensus of $3.26. Notably, the full-year guidance excludes any contributions from the pending Level AI deal.
Investors did not share management's enthusiasm. Five9's stock fell more than 23% in late trading, reacting to the cost of the acquisition—which amounts to nearly half of Five9's $738 million in cash and marketable investments at the end of Q3—and the underwhelming forward guidance. This sharp decline highlights market concerns regarding large cash expenditures and integration risks.