Five9's $325M Level AI Deal Opens Door to New Customers

acquisitions artificial intelligence customer service five9 level ai saas subscription technology Nov 06, 2026

The customer service software company plans to sell Level AI's applications to businesses using competing systems, giving it another way to win customers without requiring a major technology change.

Five9, a major provider of cloud-based customer service software, has agreed to acquire Level AI for approximately $325 million in cash. The deal would allow Five9 to reach businesses using competing customer service systems, including those that aren't ready to replace their current technology.

Five9 serves more than 4,000 organizations worldwide and reported $1.15 billion in revenue in 2025. Its business has traditionally centered on selling the software companies use to manage customer calls and other service interactions, then offering additional AI capabilities.

With Level AI, Five9 can approach customers from a different direction. Level AI's software analyzes customer conversations, assists service employees and automates certain interactions while working with the systems companies already use. During the November 5 earnings call, Five9 CEO Amit Mathradas described the strategy as "AI first and then CCaaS second." CCaaS is the industry term for cloud-based contact-center software, Five9's core business.

The acquisition also brings Five9 a growing recurring-revenue business. Level AI reported approximately $20 million in annual recurring revenue as of October 31, up about 50% from a year earlier. The transaction is expected to close in the fourth quarter of 2026, subject to customary closing conditions.

Selling AI Before Replacing the Platform

Replacing an enterprise customer service system can be a significant undertaking. Companies may have years invested in their technology, with established processes and employees trained to work with it. Adding an AI application is a much smaller decision than replacing the system that supports the entire operation.

Level AI already works with other providers' systems, so Five9 could begin earning revenue from companies without first winning a larger contact-center contract. If those customers eventually decide to replace their underlying platforms, Five9 would have an established relationship and an opportunity to compete for the business.

Level AI also brings relationships with companies Five9 doesn't currently serve. Mathradas said only a very small portion of Level AI's revenue comes from businesses already using Five9. He pointed to a Fortune 100 insurer using Level AI with an internally operated contact-center system as one example.

Mathradas emphasized that Five9 sees value in selling the AI applications independently, even if those customers never move to its broader platform.

How Ollie and Smartsheet Use Level AI

Level AI serves companies across several industries. Neither company has disclosed what share of its customers operate subscription or membership businesses, but its work with Ollie Pets and Smartsheet offers two examples relevant to recurring-revenue operators.

Ollie Pets, the direct-to-consumer dog-food subscription business, uses Level AI alongside Gladly, its customer service platform. According to a Level AI case study, Ollie's team uses the software to examine customer conversations and identify recurring concerns about products, pricing and the subscriber experience. Those findings can then be shared with colleagues across the business.

Level AI reports that Ollie has also expanded its automated quality reviews to approximately 90% of customer interactions, while continuing to use human reviewers for conversations requiring closer evaluation.

Smartsheet, a subscription software provider, uses Level AI to understand customer problems and share its findings with product and customer success teams. In one example documented by Level AI, Smartsheet discovered that customers were missing coaching sessions because of confusion over time zones. The booking page appeared to be working, but customer conversations revealed what was going wrong. Smartsheet identified the issue and corrected the display.

A Partnership Dating Back to 2022

Five9 and Level AI have worked together since 2022, and Level AI's applications are already available through Five9's marketplace of connected software products. The two companies have experience working together and connecting their technology.

Level AI's products help companies review customer conversations, assist employees during interactions and identify recurring problems. It also offers AI agents that can handle certain customer requests automatically. Five9 says the technology processes more than one billion customer interactions annually.

Following the acquisition, Five9 plans to introduce those applications to more of its existing customers while continuing to sell them to businesses using other systems. Mathradas told investors that acquiring Level AI could also accelerate Five9's AI development plans by approximately 12 months.

Five9 already offers some similar AI capabilities, and Mathradas acknowledged that the companies' products overlap in places. Decisions about how those offerings will fit together have yet to be made.

Five9 says it plans to continue offering Level AI independently, but detailed future pricing and packaging haven't been announced. Existing customers and companies considering the software will want to understand how integrations, product development and support arrangements evolve under Five9 ownership.

INSIDER TAKE

For subscription operators evaluating customer service technology, the acquisition raises a practical question: will Level AI remain as useful with other vendors' systems once it's part of Five9?

Five9 says it plans to keep the applications available independently. That's important for businesses that want to improve their customer service operations without replacing their current platforms. But buyers should understand how the software connects with their systems, what access they'll retain to customer information and whether pricing or support will change. The value of tools such as those used by Ollie and Smartsheet depends in part on those connections continuing to work.

There's a commercial lesson for subscription technology vendors, too. Five9 is pursuing growth by addressing a specific customer need first, building a relationship and potentially earning more of that customer's business over time.

Related Member Resources

Five9's planned acquisition puts Level AI under new ownership. For businesses using customer service technology, that raises questions about how the products may change and whether the connections their support teams depend on will continue working. These resources help operators examine both.

Why Vendor History Matters When Choosing Subscription Technology
This guide helps operators examine how a technology provider's origins, acquisitions and product development can shape what it offers today. It provides questions to ask about Level AI's future under Five9, particularly where the companies already have overlapping products.
Subscription Support Technology Checklist: Systems and Connections to Review
This operating checklist helps teams review how customer service tools connect to subscriber records, internal policies and support workflows. Operators can use it to identify which connections an AI application needs, what information it must access and what to test as vendor products or integrations change.