NICE Accelerates Its Share Repurchase Program and Announces a New $500 Million Share Buyback Plan

Rhea-AI Summary

NICE (NASDAQ: NICE) has announced a new $500 million share repurchase program. The company will also accelerate its current $300 million buyback. This decision aims to enhance shareholder value and demonstrates the company's confidence in its business strength and long-term growth prospects. The share repurchases will be executed through various methods, including open market purchases and privately negotiated transactions, following U.S. securities laws. NICE intends to fund these repurchases with its strong cash flow and financial strength. The program's timing and amount will depend on business, economic, and market conditions, among other factors, and can be modified or discontinued at any time.

Positive

• NICE announced a new $500 million share repurchase program.
• The company will accelerate its current $300 million buyback.
• The initiative aims to enhance shareholder value.
• NICE demonstrates confidence in its business strength and long-term growth prospects.
• Repurchases will be funded by the company's strong cash flow and financial resources.
• Various methods will be used for repurchases, including open market purchases and privately negotiated transactions.
• Repurchases align with U.S. securities laws and regulations.

Negative

• The program does not obligate NICE to acquire any specific amount of shares.
• The repurchase program can be extended, modified, suspended, or discontinued at any time.

Insights

Financial Analyst

NICE's announcement to initiate a new $500 million share repurchase program along with accelerating its current $300 million buyback indicates a strong confidence in the company's financial health and future growth prospects. For a retail investor, this signals that the company has robust cash flows and believes its stock is undervalued. Share buybacks reduce the number of outstanding shares, potentially increasing earnings per share (EPS) and often leading to a higher stock price. This move can be seen as a way to return capital to shareholders, similar to dividends, but with the added benefit of potentially boosting the stock price.

However, investors should also consider the opportunity cost of this buyback. The capital used for repurchasing shares could have been invested in growth initiatives, acquisitions, or other strategic moves. Moreover, the actual impact on share price will depend on broader market conditions and investor sentiment.

It’s noteworthy that the company is utilizing Rule 10b-18 and Rule 10b5-1, which provide frameworks for legally compliant share repurchase programs. These rules help ensure that the buybacks are conducted transparently and fairly, minimizing market manipulation risks.

In summary, this initiative appears to be a positive reflection of NICE's self-assuredness in its financial strength and future prospects, though it's important for investors to consider the long-term impacts and the balance between immediate shareholder returns and future growth investment.

Market Research Analyst

From a market perspective, the new share repurchase program announced by NICE can be interpreted as a strategic move to bolster investor confidence and stabilize or potentially increase share prices. Share buybacks often create a perception of strong financial performance and can act as a buffer against market volatility. This decision might also be aimed at offsetting any dilution from employee stock options.

For retail investors, it’s important to understand that while buybacks can be beneficial, they don't inherently improve the company's operational performance. Investors should still keep an eye on NICE's core business metrics and market conditions. Additionally, the execution of the buyback program in various methods, including open market purchases and privately negotiated transactions, allows flexibility in responding to market conditions.

Given the company's strong cash flow position, this buyback strategy seems to align well with its financial strategy to return value to shareholders. However, the broader market conditions, including interest rates and sector performance, will also play a significant role in determining the actual impact of this buyback program.

HOBOKEN, N.J.--(BUSINESS WIRE)-- NICE (NASDAQ: NICE) announced today that its Board of Directors has authorized a new $500 million share repurchase program. At the same time, the Company plans to accelerate the execution of its current $300 million share buyback.

Barak Eilam, CEO, NICE, said, “The new share repurchase program and the accelerated execution of the current program reflect our commitment to enhancing shareholder value, and demonstrates confidence in the strength of our business, the Company's long-term growth prospects and our dedication to delivering returns to our shareholders. By repurchasing shares, we are capitalizing on our strong cash flow and overall financial strength to invest in our own future, signaling our belief in the intrinsic value of NICE. We remain committed to executing our strategic initiatives and driving sustainable growth. We believe that this new share repurchase program is a prudent allocation of capital that will benefit our shareholders and position the Company for continued success.”

Repurchases under the program may be made from time to time using a variety of methods, which may include open market purchases, privately negotiated transactions or otherwise, all in accordance with U.S. securities laws and regulations, including Rule 10b-18 under the U.S. Securities Exchange Act of 1934, as amended (the “Exchange Act”). The Company may also, from time to time, enter into plans that are compliant with Rule 10b5-1 of the Exchange Act to facilitate repurchases of its shares under this authorization. The timing and total amount of share repurchases will depend upon business, economic and market conditions, corporate and regulatory requirements, prevailing share prices and other considerations. This program does not obligate the Company to acquire any particular amount of ordinary shares and the program may be extended, modified, suspended or discontinued at any time at the Company’s discretion. The Company expects to fund repurchases with cash on hand and future cash generated from its operations.

About NICE
NICE (Nasdaq: NICE) is the worldwide leading provider of both cloud and on-premises enterprise software solutions that empower organizations to make smarter decisions based on advanced analytics of structured and unstructured data. NICE helps organizations of all sizes deliver better customer service, ensure compliance, combat fraud and safeguard citizens. Over 25,000 organizations in more than 150 countries, including over 85 of the Fortune 100 companies, are using NICE solutions. www.nice.com.

Trademark Note: NICE and the NICE logo are trademarks or registered trademarks of NICE. All other marks are trademarks of their respective owners. For a full list of NICE' marks, please see: http://www.nice.com/nice-trademarks.

Forward-Looking Statements
This press release contains forward-looking statements as that term is defined in the Private Securities Litigation Reform Act of 1995. In some cases, forward-looking statements may be identified by words such as “believe,” “expect,” “seek,” “may,” “will,” “intend,” “should,” “project,” “anticipate,” “plan,” and similar expressions. Forward-looking statements are based on the current beliefs, expectations and assumptions of the Company’s management regarding the future of the Company’s business, future plans and strategies, projections, anticipated events and trends, the economy and other future conditions. Examples of forward-looking statements include guidance regarding the Company’s revenue and earnings and the growth of our cloud, analytics and artificial intelligence business.

Forward-looking statements are inherently subject to significant economic, competitive and other uncertainties and contingencies, many of which are beyond the control of management. The Company cautions that these statements are not guarantees of future performance, and investors should not place undue reliance on them. There are or will be important known and unknown factors and uncertainties that could cause actual results to differ materially from those expressed or implied in the forward-looking statements. These factors, include, but are not limited to, risks associated with changes in economic and business conditions, competition, successful execution of the Company’s growth strategy, success and growth of the Company’s cloud Software-as-a-Service business, difficulties in making additional acquisitions or effectively integrating acquired operations, products, technologies and personnel, the Company’s dependency on third-party cloud computing platform providers, hosting facilities and service partners, rapidly changing technology, cyber security attacks or other security breaches against the Company, privacy concerns and legislation impacting the Company’s business, changes in currency exchange rates and interest rates, the effects of additional tax liabilities resulting from our global operations, the effect of unexpected events or geo-political conditions, such as the impact of conflicts in the Middle East, that may disrupt our business and the global economy and various other factors and uncertainties discussed in our filings with the U.S. Securities and Exchange Commission (the “SEC”).

You are encouraged to carefully review the section entitled “Risk Factors” in our latest Annual Report on Form 20-F and our other filings with the SEC for additional information regarding these and other factors and uncertainties that could affect our future performance. The forward-looking statements contained in this press release speak only as of the date hereof, and the Company undertakes no obligation to update or revise them, whether as a result of new information, future developments or otherwise, except as required by law.

View source version on businesswire.com: https://www.businesswire.com/news/home/20240610455866/en/

Investor Relations Contact

Marty Cohen, +1 551 256 5354, ir@nice.com, ET

Omri Arens, +972 3 763-0127, ir@nice.com, CET

Media Contact

Chris Irwin-Dudek, +1 (551) 256-5140, Chris.Irwin-Dudek@nice.com

Source: NICE

FAQ

What did NICE announce on its new share repurchase program?

NICE announced a new $500 million share repurchase program and will accelerate its current $300 million buyback.

How does NICE plan to execute the new share repurchase program?

NICE plans to execute the share repurchase through various methods, including open market purchases and privately negotiated transactions, in accordance with U.S. securities laws.

What factors will influence NICE's share repurchase timing and amount?

The timing and amount of NICE's share repurchases will depend on business, economic, and market conditions, corporate and regulatory requirements, and share prices.

How will NICE fund the new share repurchase program?

NICE expects to fund the repurchases with cash on hand and future cash generated from its operations.

Can NICE modify or discontinue the new share repurchase program?

Yes, NICE can extend, modify, suspend, or discontinue the share repurchase program at any time.