NICE Reports 25% Cloud Revenue Growth Leading to a Record First Quarter
- Double-Digit Growth in Operating Income and EPS
-
Quarterly Record of Cash Flow from Operations of
$195 million - Company Raises Full-Year 2023 Guidance for Total Revenue and EPS
First Quarter 2023 Financial Highlights
GAAP |
Non-GAAP |
Total revenue was
|
Total revenue was |
Cloud revenue was
|
Cloud revenue was |
Cloud gross margin was
|
Cloud gross margin was |
Operating income was |
Operating income was |
Operating margin was |
Operating margin was |
Diluted EPS was |
Diluted EPS was |
Operating cash flow was |
|
“We are pleased to begin the year on a high note as we exceeded the high end of our guidance range on both total revenue and earnings per share,” said Barak Eilam, CEO of NICE. “The outperformance was once again driven by great execution in the cloud as cloud revenue increased
Mr. Eilam continued, “The first quarter was characterized by many seven-digit and eight-digit deals, demonstrating our superior win rate when it comes to delivering our CXone cloud platform at scale and our Enlighten AI CX solution. Our continued strong performance and clear market leadership are attributed to the tight alignment between our strategic priorities and sharp execution centered on expanding cloud market share, championing the AI opportunity, and our emphasis on profitable growth.”
GAAP Financial Highlights for the First Quarter Ended March 31:
Revenues: First quarter 2023 total revenues increased
Gross Profit: First quarter 2023 gross profit was
Operating Income: First quarter 2023 operating income increased
Net Income: First quarter 2023 net income increased
Fully Diluted Earnings Per Share: Fully diluted earnings per share for the first quarter of 2023 increased
Operating Cash Flow and Cash Balance: First quarter 2023 operating cash flow was
Non-GAAP Financial Highlights for the First Quarter Ended March 31:
Revenues: First quarter 2023 total revenues increased
Gross Profit: First quarter 2023 Non-GAAP gross profit increased to
Operating Income: First quarter 2023 Non-GAAP operating income increased
Net Income: First quarter 2023 Non-GAAP net income increased
Fully Diluted Earnings Per Share: First quarter 2023 Non-GAAP fully diluted earnings per share increased
Second Quarter and Full Year 2023 Guidance:
Second Quarter 2023:
Second quarter 2023 Non-GAAP total revenues are expected to be in a range of
Second quarter 2023 Non-GAAP fully diluted earnings per share are expected to be in a range of
Raising Full Year 2023 Guidance:
The Company increased full-year 2023 Non-GAAP total revenues which are expected to be in a range of
The Company increased full-year 2023 Non-GAAP fully diluted earnings per share which are expected to be in a range of
Quarterly Results Conference Call
NICE management will host its earnings conference call today May 11, 2023, at 8:30 AM ET, 13:30 GMT, 15:30
The call will be webcast live on the Company’s website at https://www.nice.com/investor-relations/upcoming-event.
Explanation of Non-GAAP measures
Non-GAAP financial measures are included in this press release. Non-GAAP financial measures consist of GAAP financial measures adjusted to exclude share-based compensation, amortization of acquired intangible assets, acquisition related expenses, amortization of discount on debt and loss from extinguishment of debt and the tax effect of the Non-GAAP adjustments.
The Company believes that these Non-GAAP financial measures, used in conjunction with the corresponding GAAP measures, provide investors with useful supplemental information about the financial performance of our business. We believe Non-GAAP financial measures are useful to investors as a measure of the ongoing performance of our business. Our management regularly uses our supplemental Non-GAAP financial measures internally to understand, manage and evaluate our business and to make financial, strategic and operating decisions. These Non-GAAP measures are among the primary factors management uses in planning for and forecasting future periods. Our Non-GAAP financial measures are not meant to be considered in isolation or as a substitute for comparable GAAP measures and should be read only in conjunction with our consolidated financial statements prepared in accordance with GAAP. These Non-GAAP financial measures may differ materially from the Non-GAAP financial measures used by other companies. Reconciliation between results on a GAAP and Non-GAAP basis is provided in a table immediately following the Consolidated Statements of Income. The Company provides guidance only on a Non-GAAP basis. A reconciliation of guidance from a GAAP to Non-GAAP basis is not available due to the unpredictability and uncertainty associated with future events that would be reported in GAAP results and would require adjustments between GAAP and Non-GAAP financial measures, including the impact of future possible business acquisitions. Accordingly, a reconciliation of the guidance based on Non-GAAP financial measures to corresponding GAAP financial measures for future periods is not available without unreasonable effort.
Explanation of Constant Currency
NICE presents constant currency information to provide a framework for assessing how our underlying businesses performed excluding the effect of foreign currency rate fluctuations. To present this information, current results for transactions in currencies other than
Future expected results for transactions in currencies other than
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 COVID-19 pandemic, that may disrupt our business and the global economy and various other factors and uncertainties discussed in our filings with the
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.
NICE LTD. AND SUBSIDIARIES |
|||||||
CONDENSED CONSOLIDATED BALANCE SHEETS |
|||||||
|
|||||||
March 31, |
December 31, |
||||||
2023 |
2022 |
||||||
Unaudited |
Audited |
||||||
ASSETS |
|||||||
CURRENT ASSETS: |
|||||||
Cash and cash equivalents |
$ |
630,661 |
$ |
529,596 |
|||
Short-term investments |
|
1,054,184 |
|
1,041,943 |
|||
Trade receivables |
|
503,751 |
|
518,517 |
|||
Debt hedge option |
|
160,474 |
|
122,323 |
|||
Prepaid expenses and other current assets |
|
211,431 |
|
204,754 |
|||
Total current assets |
|
2,560,501 |
|
2,417,133 |
|||
LONG-TERM ASSETS: |
|||||||
Property and equipment, net |
|
169,062 |
|
159,285 |
|||
Deferred tax assets |
|
123,377 |
|
116,889 |
|||
Other intangible assets, net |
|
185,859 |
|
209,605 |
|||
Operating lease right-of-use assets |
|
101,415 |
|
102,893 |
|||
Goodwill |
|
1,620,802 |
|
1,617,118 |
|||
Prepaid expenses and other long-term assets |
|
232,306 |
|
231,496 |
|||
|
|
||||||
Total long-term assets |
|
2,432,821 |
|
2,437,286 |
|||
TOTAL ASSETS |
$ |
4,993,322 |
$ |
4,854,419 |
|||
LIABILITIES AND SHAREHOLDERS' EQUITY |
|||||||
CURRENT LIABILITIES: |
|||||||
Trade payables |
$ |
54,902 |
$ |
56,019 |
|||
Deferred revenues and advances from customers |
|
376,785 |
|
338,930 |
|||
Current maturities of operating leases |
|
13,147 |
|
13,525 |
|||
Debt |
|
248,180 |
|
209,292 |
|||
Accrued expenses and other liabilities |
|
518,164 |
|
523,451 |
|||
Total current liabilities |
|
1,211,178 |
|
1,141,217 |
|||
LONG-TERM LIABILITIES: |
|||||||
Deferred revenues and advances from customers |
|
53,704 |
|
57,211 |
|||
Operating leases |
|
97,320 |
|
99,262 |
|||
Deferred tax liabilities |
|
7,260 |
|
7,336 |
|||
Debt |
|
455,800 |
|
455,382 |
|||
Other long-term liabilities |
|
38,544 |
|
38,588 |
|||
Total long-term liabilities |
|
652,628 |
|
657,779 |
|||
SHAREHOLDERS' EQUITY |
|||||||
Nice Ltd's equity |
|
3,117,584 |
|
3,042,085 |
|||
Non-controlling interests |
|
11,932 |
|
13,338 |
|||
Total equity |
|
3,129,516 |
|
3,055,423 |
|||
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY |
$ |
4,993,322 |
$ |
4,854,419 |
|||
NICE LTD. AND SUBSIDIARIES |
|||||||||
CONSOLIDATED STATEMENTS OF INCOME |
|||||||||
|
|||||||||
Quarter ended |
|||||||||
March 31, |
|||||||||
2023 |
2022 |
||||||||
Unaudited |
Unaudited |
||||||||
Revenue: |
|||||||||
Cloud |
$ |
367,567 |
|
$ |
294,592 |
|
|||
Services |
|
159,858 |
|
|
156,974 |
|
|||
Product |
|
44,435 |
|
|
75,863 |
|
|||
Total revenue |
|
571,860 |
|
|
527,429 |
|
|||
Cost of revenue: |
|||||||||
Cloud |
|
131,596 |
|
|
113,349 |
|
|||
Services |
|
47,905 |
|
|
46,908 |
|
|||
Product |
|
7,095 |
|
|
6,745 |
|
|||
Total cost of revenue |
|
186,596 |
|
|
167,002 |
|
|||
Gross profit |
|
385,264 |
|
|
360,427 |
|
|||
Operating expenses: |
|||||||||
Research and development, net |
|
78,102 |
|
|
76,578 |
|
|||
Selling and marketing |
|
148,479 |
|
|
152,618 |
|
|||
General and administrative |
|
65,176 |
|
|
58,867 |
|
|||
Total operating expenses |
|
291,757 |
|
|
288,063 |
|
|||
Operating income |
|
93,507 |
|
|
72,364 |
|
|||
Financial and other income, net |
|
(8,721 |
) |
|
(486 |
) |
|||
Income before tax |
|
102,228 |
|
|
72,850 |
|
|||
Taxes on income |
|
25,286 |
|
|
14,909 |
|
|||
Net income |
$ |
76,942 |
|
$ |
57,941 |
|
|||
Basic |
$ |
1.20 |
|
$ |
0.91 |
|
|||
Diluted |
$ |
1.15 |
|
$ |
0.87 |
|
|||
Weighted average shares outstanding: |
|||||||||
Basic |
|
63,941 |
|
|
63,736 |
|
|||
Diluted |
|
66,662 |
|
|
66,853 |
|
|||
NICE LTD. AND SUBSIDIARIES |
|||||||||
CONSOLIDATED CASH FLOW STATEMENTS |
|||||||||
|
|||||||||
Quarter ended |
|||||||||
March 31, |
|||||||||
2023 |
2022 |
||||||||
Unaudited |
Unaudited |
||||||||
Operating Activities |
|||||||||
Net income |
$ |
76,942 |
|
$ |
57,941 |
|
|||
Adjustments to reconcile net income to net cash provided by operating activities |
|||||||||
Depreciation and amortization |
|
41,846 |
|
|
44,281 |
|
|||
Share-based compensation |
|
44,961 |
|
|
48,184 |
|
|||
Amortization of premium and discount and accrued interest on marketable securities |
|
1,270 |
|
|
3,818 |
|
|||
Deferred taxes, net |
|
(7,878 |
) |
|
(1,796 |
) |
|||
Changes in operating assets and liabilities: |
|||||||||
Trade Receivables, net |
|
16,752 |
|
|
(21,259 |
) |
|||
Prepaid expenses and other current assets |
|
(11,372 |
) |
|
(28,931 |
) |
|||
Operating lease right-of-use assets |
|
3,068 |
|
|
3,942 |
|
|||
Trade payables |
|
(1,180 |
) |
|
9,078 |
|
|||
Accrued expenses and other current liabilities |
|
(694 |
) |
|
29,229 |
|
|||
Deferred revenues |
|
33,247 |
|
|
52,349 |
|
|||
Operating lease liabilities |
|
(3,907 |
) |
|
(4,997 |
) |
|||
Amortization of discount on long-term debt |
|
1,154 |
|
|
1,137 |
|
|||
Loss from extinguishment of debt |
|
- |
|
|
1,092 |
|
|||
Other |
|
862 |
|
|
(1,357 |
) |
|||
Net cash provided by operating activities |
|
195,071 |
|
|
192,711 |
|
|||
Investing Activities |
|||||||||
Purchase of property and equipment |
|
(13,106 |
) |
|
(9,584 |
) |
|||
Purchase of Investments |
|
(69,542 |
) |
|
(98,266 |
) |
|||
Proceeds from Investments |
|
64,899 |
|
|
101,666 |
|
|||
Capitalization of internal use software costs |
|
(14,136 |
) |
|
(10,671 |
) |
|||
Net cash used in investing activities |
|
(31,885 |
) |
|
(16,855 |
) |
|||
Financing Activities |
|||||||||
Proceeds from issuance of shares upon exercise of options |
|
959 |
|
|
75 |
|
|||
Purchase of treasury shares |
|
(64,715 |
) |
|
(63,842 |
) |
|||
Dividends paid to noncontrolling interest |
|
(1,480 |
) |
|
- |
|
|||
Repayment of debt |
|
- |
|
|
(18,093 |
) |
|||
Net cash used in financing activities |
|
(65,236 |
) |
|
(81,860 |
) |
|||
Effect of exchange rates on cash and cash equivalents |
|
1,167 |
|
|
(937 |
) |
|||
Net change in cash, cash equivalents and restricted cash |
|
99,117 |
|
|
93,059 |
|
|||
Cash, cash equivalents and restricted cash, beginning of period |
$ |
533,095 |
|
$ |
378,656 |
|
|||
Cash, cash equivalents and restricted cash, end of period |
$ |
632,212 |
|
$ |
471,715 |
|
|||
Reconciliation of cash, cash equivalents and restricted cash reported in the consolidated balance sheet: |
|||||||||
Cash and cash equivalents |
$ |
630,661 |
|
$ |
471,715 |
|
|||
Restricted cash included in other current assets |
$ |
1,551 |
|
$ |
- |
|
|||
Total cash, cash equivalents and restricted cash shown in the statement of cash flows |
$ |
632,212 |
$ |
471,715 |
|||||
NICE LTD. AND SUBSIDIARIES |
||||||||
RECONCILIATION OF GAAP TO NON-GAAP RESULTS |
||||||||
|
||||||||
Quarter ended |
||||||||
March 31, |
||||||||
2023 |
2022 |
|||||||
GAAP revenues |
$ |
571,860 |
|
$ |
527,429 |
|
||
Non-GAAP revenues |
$ |
571,860 |
|
$ |
527,429 |
|
||
GAAP cost of revenue |
$ |
186,596 |
|
$ |
167,002 |
|
||
Amortization of acquired intangible assets on cost of cloud |
|
(19,369 |
) |
|
(18,665 |
) |
||
Amortization of acquired intangible assets on cost of services |
|
- |
|
|
(377 |
) |
||
Amortization of acquired intangible assets on cost of product |
|
(249 |
) |
|
(276 |
) |
||
Valuation adjustment on acquired deferred cost of cloud |
|
- |
|
|
15 |
|
||
Cost of cloud revenue adjustment (1) |
|
(1,947 |
) |
|
(2,324 |
) |
||
Cost of services revenue adjustment (1) |
|
(2,885 |
) |
|
(2,967 |
) |
||
Cost of product revenue adjustment (1) |
|
(138 |
) |
|
(132 |
) |
||
Non-GAAP cost of revenue |
$ |
162,008 |
|
$ |
142,276 |
|
||
GAAP gross profit |
$ |
385,264 |
|
$ |
360,427 |
|
||
Gross profit adjustments |
|
24,588 |
|
|
24,726 |
|
||
Non-GAAP gross profit |
$ |
409,852 |
|
$ |
385,153 |
|
||
GAAP operating expenses |
$ |
291,757 |
|
$ |
288,063 |
|
||
Research and development (1) |
|
(8,398 |
) |
|
(8,515 |
) |
||
Sales and marketing (1) |
|
(11,102 |
) |
|
(16,269 |
) |
||
General and administrative (1) |
|
(21,296 |
) |
|
(18,400 |
) |
||
Amortization of acquired intangible assets |
|
(4,515 |
) |
|
(8,811 |
) |
||
Valuation adjustment on acquired deferred commission |
|
40 |
|
|
53 |
|
||
Non-GAAP operating expenses |
$ |
246,486 |
|
$ |
236,121 |
|
||
GAAP financial and other income, net |
$ |
(8,721 |
) |
$ |
(486 |
) |
||
Amortization of discount and loss of extinguishment on debt |
|
(1,154 |
) |
|
(2,229 |
) |
||
Non-GAAP financial and other income, net |
$ |
(9,875 |
) |
$ |
(2,715 |
) |
||
GAAP taxes on income |
$ |
25,286 |
|
$ |
14,909 |
|
||
Tax adjustments re non-GAAP adjustments |
|
12,308 |
|
|
16,351 |
|
||
Non-GAAP taxes on income |
$ |
37,594 |
|
$ |
31,260 |
|
||
GAAP net income |
$ |
76,942 |
|
|
57,941 |
|
||
Valuation adjustment on acquired deferred revenue |
|
- |
|
|
- |
|
||
Valuation adjustment on acquired deferred cost of cloud revenue |
|
- |
|
|
(15 |
) |
||
Amortization of acquired intangible assets |
|
24,133 |
|
|
28,129 |
|
||
Valuation adjustment on acquired deferred commission |
|
(40 |
) |
|
(53 |
) |
||
Share-based compensation (1) |
|
45,766 |
|
|
48,607 |
|
||
Amortization of discount and loss of extinguishment on debt |
|
1,154 |
|
|
2,229 |
|
||
Tax adjustments re non-GAAP adjustments |
|
(12,308 |
) |
|
(16,351 |
) |
||
Non-GAAP net income |
$ |
135,647 |
|
$ |
120,487 |
|
||
GAAP diluted earnings per share |
$ |
1.15 |
|
$ |
0.87 |
|
||
Non-GAAP diluted earnings per share |
$ |
2.03 |
|
$ |
1.80 |
|
||
Shares used in computing GAAP diluted earnings per share |
|
66,662 |
|
|
66,853 |
|
||
Shares used in computing non-GAAP diluted earnings per share |
|
66,662 |
|
|
66,853 |
|
||
NICE LTD. AND SUBSIDIARIES |
|||||||
RECONCILIATION OF GAAP TO NON-GAAP RESULTS (continued) |
|||||||
|
|||||||
(1 |
) |
Share-based Compensation |
|||||
Quarter ended |
|||||||
March 31, |
|||||||
2023 |
2022 |
||||||
Cost of cloud revenue |
$ |
1,947 |
$ |
2,324 |
|||
Cost of services revenue |
|
2,885 |
|
2,967 |
|||
Cost of product revenue |
|
138 |
|
132 |
|||
Research and development |
|
8,398 |
|
8,515 |
|||
Sales and marketing |
|
11,102 |
|
16,269 |
|||
General and administrative |
|
21,296 |
|
18,400 |
|||
$ |
45,766 |
$ |
48,607 |
||||
View source version on businesswire.com: https://www.businesswire.com/news/home/20230511005362/en/
Investor Relations Contact
Marty Cohen, +1 551 256 5354, ET, ir@nice.com
Omri Arens, +972 3 763-0127, CET, ir@nice.com
Media Contact
Chris Irwin-Dudek, +1 (551) 256-5140, Chris.Irwin-Dudek@nice.com
Source: NICE
