NICE Reports Strong Growth in Revenue and Profitability for the Third Quarter 2018 and Increases Full-Year
2018 Revenue and EPS Guidance
Strong Double Digit Growth in Operating Income and Earnings Per Share
Recurring Revenue Increased to 72% of Total Revenue
NICE (NASDAQ: NICE) today announced results for the third quarter and nine months ended September 30, 2018.
Third Quarter 2018 Financial Highlights
| GAAP |
|
|
|
Non-GAAP |
| Revenue of $356 million, growth of 10% year-over-year |
|
|
|
Revenue of $356 million, growth of 9% year-over-year |
| Cloud revenue of $117 million, growth of 21% year-over-year |
|
|
|
Cloud revenue of $120 million, growth of 20% year-over-year |
| Gross margin of 65.3% compared to 64.3% last year |
|
|
|
Gross margin of 70.7% compared to 71.2% last year |
|
Operating income of $47 million compared to $33 million last
year, 41% growth year-over-year
|
|
|
|
Operating income of $91 million compared to $78 million last
year, 16% growth year-over-year
|
| Operating margin of 13.1% compared to 10.3% last year |
|
|
|
Operating margin of 25.5% compared to 24.0% last year |
|
Diluted EPS of $0.62 versus $0.42 last year, 48% growth
year-over-year
|
|
|
|
Diluted EPS of $1.12 versus $0.95 last year, 18% growth
year-over-year
|
The GAAP column of the table contains the financial highlights of the third quarter 2018 under ASC 606 with the comparison
period under ASC 605.
The non-GAAP column of the table contains the financial highlights of the third quarter 2018 under ASC 605 with the
comparison period under ASC 605.
“The results reported for the third quarter of 2018 reflect our continued focus on driving excellent execution around our
strategic pillars of cloud, analytics and artificial intelligence that led to strong growth on both the top and bottom lines. As we
look forward to ending the year on a high note, we now expect to exit 2018 with a cloud revenue run rate of $550 million up from
our previous expectation of $500 million, while continuing to drive profitability,” said Barak Eilam, CEO of NICE.
Mr. Eilam continued, “CXone, our open cloud platform which has gained tremendous market presence among our customers and high
regard from industry analysts in just a little over one year since it was introduced, has been our vehicle to deliver our strategic
pillars to the customer engagement market. We are now proceeding on a similar course with X-Sight, which was announced just a few
weeks ago. X-Sight is the industry’s first financial crime and compliance platform-as-a-service that combines advanced analytics
and AI, automated data management, and robotics all delivered through the cloud.
“It is clearly evident that the platform strategy embodies the present and future for NICE. With X-Sight and CXone, we now have
two significant, market leading, open, cloud platforms to help further penetrate our large and growing addressable market.”
GAAP Financial Highlights for the Third Quarter Ended September 30:
The GAAP numbers presented below for the third quarter 2018 are under ASC 606 and the comparison period GAAP numbers for the
third quarter 2017 are under ASC 605
Revenues: Third quarter 2018 total revenues increased 10.4% to $356.2 million compared to $322.8 million for the third
quarter of 2017.
Gross Profit: Third quarter 2018 gross profit and gross margin increased to $232.7 million and 65.3%, respectively,
compared to $207.4 million and 64.3%, respectively, for the third quarter of 2017.
Operating Income: Third quarter 2018 operating income and operating margin increased to $46.7 million and 13.1%,
respectively, compared to $33.1 million and 10.3%, respectively, for the third quarter of 2017.
Net Income: Third quarter 2018 net income and net income margin increased to $39.3 million and 11.0%, respectively,
compared to $26.2 million and 8.1%, respectively, for the third quarter of 2017.
Fully Diluted Earnings Per Share: Fully diluted earnings per share for the third quarter of 2018 increased to $0.62
compared to $0.42 in the third quarter of 2017.
Operating Cash Flow and Cash Balance: Third quarter 2018 operating cash flow was $87.0 million. As of September 30, 2018,
total cash and cash equivalents, short term investments and marketable securities were $656.3 million, and total debt was $453.9
million.
Non-GAAP Financial Highlights for the Third Quarter Ended September 30:
The non-GAAP numbers presented below for the third quarter 2018 and for the comparison period non-GAAP numbers for the third
quarter 2017 are both under ASC 605.
Revenues: Third quarter 2018 non-GAAP total revenues increased to $356.4 million, up 9.1% from $326.8 million for the
third quarter of 2017.
Gross Profit: Third quarter 2018 non-GAAP gross profit increased to $252.1 compared to $232.5 million for the third
quarter of 2017. Non-GAAP gross margin was 70.7% compared to 71.2% for the third quarter of 2017.
Operating Income: Third quarter 2018 non-GAAP operating income and non-GAAP operating margin increased to $90.8 million
and 25.5%, respectively, from $78.3 million and 24.0%, respectively, for the third quarter of 2017.
Net Income: Third quarter 2018 non-GAAP net income and non-GAAP net income margin increased to $71.6 million and 20.1%,
respectively, from $58.9 million and 18.0%, respectively, for the third quarter of 2017.
Fully Diluted Earnings Per Share: Third quarter 2018 non-GAAP fully diluted earnings per share increased 17.9% to $1.12,
compared to $0.95 for the third quarter of 2017.
Full Year 2018 Guidance:
Guidance for the full-year 2018 is provided using the accounting standard ASC 605 in order to provide better transparency and
comparability to 2017 financial data, which was reported under ASC 605.
The Company increased full-year 2018 non-GAAP total revenues to be in an expected range of $1,450 million to $1,466 million and
increased full-year 2018 non-GAAP fully diluted earnings per share to be in an expected range of $4.53 to $4.69.
The guidance includes the acquisition of Mattersight. The Company expects Mattersight to contribute an annual revenue run rate
in a range of $32 million to $38 million.
Adoption of the New Revenue Recognition Standard - ASC 606
NICE adopted the new revenue recognition accounting standard, Accounting Standards Codification ("ASC") 606, effective
January 1, 2018, on a modified retrospective basis. Financial results for reporting periods during 2018 are presented in compliance
with the ASC 606. Historical financial results for reporting periods prior to 2018 are presented in conformity with amounts
previously disclosed under the prior revenue recognition standard, ASC 605. This press release includes additional information to
reconcile the impacts of the adoption of the new revenue recognition standard on the Company's financial results for the quarter
ended September 30, 2018.
Quarterly Results Conference Call
NICE management will host its earnings conference call today, November 8th, 2018 at 8:30 AM ET, 13:30 GMT, 15:30
Israel, to discuss the results and the company's outlook. To participate in the call, please dial in to the following numbers:
United States 1-866-804-8688 or +1-718-354-1175, International +44(0)1296-311-600, United Kingdom 0-800-678-1161, Israel
1-809-344-364. The Passcode is 538 470 63. Additional access numbers can be found at
http://www.btconferencing.com/globalaccess/?bid=54_attended. The call will be webcast live on the Company’s website at
http://www.nice.com/news-and-events/ir-events. An online replay will also be available approximately two hours following the
call. A telephone replay of the call will be available for 7 days after the live broadcast, and may be accessed by dialing: United
States 1-877-482-6144, International +44(0)20-7136-9233, United Kingdom 0-800-032-9687. The Passcode for the replay is 295 658
73.
Non-GAAP financial measures consist of GAAP financial measures adjusted to exclude: amortization of acquired intangible assets,
share-based compensation, certain business combination accounting entries, amortization of discount on long term debt,
re-organization expenses, ASC 606 to ASC 605 adjustments and tax adjustment re non-GAAP adjustments. The purpose of such
adjustments is to give an indication of our performance exclusive of non-cash charges and other items that are considered by
management to be outside of our core operating results. 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. Our management regularly uses our supplemental non-GAAP financial measures internally to
understand, manage and evaluate our business and make operating decisions. These non-GAAP measures are among the primary factors
management uses in planning for and forecasting future periods. Business combination accounting rules requires us to recognize a
legal performance obligation related to a revenue arrangement of an acquired entity. The amount assigned to that liability should
be based on its fair value at the date of acquisition. The non-GAAP adjustment is intended to reflect the full amount of such
revenue. We believe this adjustment is useful to investors as a measure of the ongoing performance of our business. We believe
these non-GAAP financial measures provide consistent and comparable measures to help investors understand our current and future
operating cash flow performance. 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.
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 competition, success and growth of the Company’s
cloud Software-as-a-Service business, cyber security attacks or other security breaches against the Company, privacy concerns and
legislation impacting the Company’s business, the Company’s dependency on third-party cloud computing platform providers, hosting
facilities and service partners, changes in general economic and business conditions, rapidly changing technology, changes in
currency exchange rates and interest rates, difficulties in making additional acquisitions or effectively integrating acquired
operations, products, technologies and personnel (including, with respect to the Company’s acquisition of Mattersight Corporation),
successful execution of the Company’s growth strategy, the effects of tax reforms and of newly enacted or modified laws, regulation
or standards on the Company and its products, and 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 presentation 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
|
|
|
|
|
|
|
|
| CONSOLIDATED STATEMENTS OF INCOME |
|
|
|
|
|
|
| U.S. dollars in thousands (except per share amounts) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Quarter ended |
|
Year to date |
|
|
September 30, |
|
September 30, |
|
|
|
2018 |
|
|
2017 |
|
|
2018 |
|
|
2017 |
|
|
Unaudited |
|
Unaudited |
|
Unaudited |
|
Unaudited |
|
|
|
|
|
|
|
|
|
| Revenue: |
|
|
|
|
|
|
|
|
Product |
$ |
60,097 |
|
$ |
66,931 |
|
$ |
170,864 |
|
$ |
204,124 |
|
Services |
|
179,113 |
|
|
159,441 |
|
|
533,458 |
|
|
476,093 |
|
Cloud |
|
116,996 |
|
|
96,383 |
|
|
329,368 |
|
|
259,700 |
| Total revenue |
|
356,206 |
|
|
322,755 |
|
|
1,033,690 |
|
|
939,917 |
|
|
|
|
|
|
|
|
|
| Cost of revenue: |
|
|
|
|
|
|
|
|
Product |
|
7,854 |
|
|
12,944 |
|
|
23,386 |
|
|
39,668 |
|
Services |
|
55,046 |
|
|
52,618 |
|
|
170,584 |
|
|
165,892 |
|
Cloud |
|
60,559 |
|
|
49,812 |
|
|
166,690 |
|
|
139,152 |
| Total cost of revenue |
|
123,459 |
|
|
115,374 |
|
|
360,660 |
|
|
344,712 |
|
|
|
|
|
|
|
|
|
| Gross profit |
|
232,747 |
|
|
207,381 |
|
|
673,030 |
|
|
595,205 |
|
|
|
|
|
|
|
|
|
| Operating expenses: |
|
|
|
|
|
|
|
|
Research and development, net |
|
47,701 |
|
|
45,135 |
|
|
137,023 |
|
|
130,975 |
|
Selling and marketing |
|
90,492 |
|
|
87,363 |
|
|
270,238 |
|
|
254,258 |
|
General and administrative |
|
37,560 |
|
|
31,197 |
|
|
107,048 |
|
|
91,758 |
|
Amortization of acquired intangible assets |
|
10,341 |
|
|
10,566 |
|
|
31,512 |
|
|
31,319 |
| Total operating expenses |
|
186,094 |
|
|
174,261 |
|
|
545,821 |
|
|
508,310 |
|
|
|
|
|
|
|
|
|
| Operating income |
|
46,653 |
|
|
33,120 |
|
|
127,209 |
|
|
86,895 |
|
|
|
|
|
|
|
|
|
| Finance and other expense, net |
|
2,195 |
|
|
4,335 |
|
|
9,100 |
|
|
16,713 |
|
|
|
|
|
|
|
|
|
| Income before tax |
|
44,458 |
|
|
28,785 |
|
|
118,109 |
|
|
70,182 |
| Taxes on income |
|
5,175 |
|
|
2,612 |
|
|
21,065 |
|
|
6,279 |
| Net income |
$ |
39,283 |
|
$ |
26,173 |
|
$ |
97,044 |
|
$ |
63,903 |
|
|
|
|
|
|
|
|
|
| Basic earnings per share |
$ |
0.64 |
|
$ |
0.43 |
|
$ |
1.58 |
|
$ |
1.06 |
|
|
|
|
|
|
|
|
|
| Diluted earnings per share |
$ |
0.62 |
|
$ |
0.42 |
|
$ |
1.54 |
|
$ |
1.03 |
|
|
|
|
|
|
|
|
|
| Weighted average number of shares |
|
|
|
|
|
|
|
| outstanding used to compute: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Basic earnings per share |
|
61,448 |
|
|
60,502 |
|
|
61,239 |
|
|
60,304 |
| Diluted earnings per share |
|
63,660 |
|
|
62,220 |
|
|
63,157 |
|
|
61,979 |
| NICE LTD. AND SUBSIDIARIES |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| RECONCILIATION OF GAAP TO NON-GAAP RESULTS AND ASC 606 TO NON-GAAP
ASC 605 |
| U.S. dollars in thousands (except per share amounts) |
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Quarter ended |
|
|
|
|
Year to date |
|
|
|
|
September 30, |
|
|
|
|
September 30, |
|
|
|
|
|
2018 |
|
|
|
|
|
2017 |
|
|
|
|
|
2018 |
|
|
|
|
|
2017 |
| GAAP revenues |
|
|
$ |
356,206 |
|
|
|
|
$ |
322,755 |
|
|
|
|
$ |
1,033,690 |
|
|
|
|
$ |
939,917 |
| Valuation adjustment on acquired deferred product revenue |
|
|
|
12 |
|
|
|
|
|
37 |
|
|
|
|
|
97 |
|
|
|
|
|
302 |
| Valuation adjustment on acquired deferred services revenue |
|
|
|
82 |
|
|
|
|
|
824 |
|
|
|
|
|
588 |
|
|
|
|
|
3,915 |
| Valuation adjustment on acquired deferred cloud revenue |
|
|
|
2,329 |
|
|
|
|
|
3,135 |
|
|
|
|
|
5,631 |
|
|
|
|
|
5,994 |
| ASC 606 to ASC 605 revenue adjustment |
|
|
|
(2,183) |
|
|
|
|
|
- |
|
|
|
|
|
2,775 |
|
|
|
|
|
- |
| Non-GAAP revenues |
|
|
$ |
356,446 |
|
|
|
|
$ |
326,751 |
|
|
|
|
$ |
1,042,781 |
|
|
|
|
$ |
950,128 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| GAAP cost of revenue |
|
|
$ |
123,459 |
|
|
|
|
$ |
115,374 |
|
|
|
|
$ |
360,660 |
|
|
|
|
$ |
344,712 |
| Amortization of acquired intangible assets on cost of product |
|
|
|
(1,094) |
|
|
|
|
|
(6,072) |
|
|
|
|
|
(5,019) |
|
|
|
|
|
(18,486) |
| Amortization of acquired intangible assets on cost of services |
|
|
|
(1,523) |
|
|
|
|
|
(987) |
|
|
|
|
|
(3,333) |
|
|
|
|
|
(5,354) |
| Amortization of acquired intangible assets on cost of cloud |
|
|
|
(12,937) |
|
|
|
|
|
(11,756) |
|
|
|
|
|
(38,397) |
|
|
|
|
|
(33,706) |
| Valuation adjustment on acquired deferred cost of cloud |
|
|
|
594 |
|
|
|
|
|
371 |
|
|
|
|
|
1,254 |
|
|
|
|
|
1,133 |
| Cost of product revenue adjustment (1) |
|
|
|
(59) |
|
|
|
|
|
(158) |
|
|
|
|
|
(247) |
|
|
|
|
|
(494) |
| Cost of services revenue adjustment (1) |
|
|
|
(2,113) |
|
|
|
|
|
(1,903) |
|
|
|
|
|
(5,762) |
|
|
|
|
|
(5,625) |
| Cost of cloud revenue adjustment (1,3) |
|
|
|
(2,352) |
|
|
|
|
|
(649) |
|
|
|
|
|
(3,766) |
|
|
|
|
|
(2,132) |
| ASC 606 to ASC 605 cost of revenue adjustment |
|
|
|
323 |
|
|
|
|
|
- |
|
|
|
|
|
650 |
|
|
|
|
|
- |
| Non-GAAP cost of revenue |
|
|
$ |
104,298 |
|
|
|
|
$ |
94,220 |
|
|
|
|
$ |
306,040 |
|
|
|
|
$ |
280,048 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| GAAP gross profit |
|
|
$ |
232,747 |
|
|
|
|
$ |
207,381 |
|
|
|
|
$ |
673,030 |
|
|
|
|
$ |
595,205 |
| Gross profit adjustments |
|
|
|
19,401 |
|
|
|
|
|
25,150 |
|
|
|
|
|
63,711 |
|
|
|
|
|
74,875 |
| Non-GAAP gross profit |
|
|
$ |
252,148 |
|
|
|
|
$ |
232,531 |
|
|
|
|
$ |
736,741 |
|
|
|
|
$ |
670,080 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| GAAP operating expenses |
|
|
$ |
186,094 |
|
|
|
|
$ |
174,261 |
|
|
|
|
$ |
545,821 |
|
|
|
|
$ |
508,310 |
| Research and development (1,3) |
|
|
|
(2,638) |
|
|
|
|
|
(2,204) |
|
|
|
|
|
(6,777) |
|
|
|
|
|
(6,651) |
| Sales and marketing (1,3) |
|
|
|
(9,004) |
|
|
|
|
|
(5,651) |
|
|
|
|
|
(22,158) |
|
|
|
|
|
(17,160) |
| General and administrative (1,2,3) |
|
|
|
(6,206) |
|
|
|
|
|
(1,640) |
|
|
|
|
|
(15,156) |
|
|
|
|
|
(7,027) |
| Amortization of acquired intangible assets |
|
|
|
(10,341) |
|
|
|
|
|
(10,566) |
|
|
|
|
|
(31,512) |
|
|
|
|
|
(31,319) |
| ASC 606 to ASC 605 operating expenses adjustment |
|
|
|
3,459 |
|
|
|
|
|
- |
|
|
|
|
|
6,543 |
|
|
|
|
|
| Non-GAAP operating expenses |
|
|
$ |
161,364 |
|
|
|
|
$ |
154,200 |
|
|
|
|
$ |
476,761 |
|
|
|
|
$ |
446,153 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| GAAP finance & other expense, net |
|
|
$ |
2,195 |
|
|
|
|
$ |
4,335 |
|
|
|
|
$ |
9,100 |
|
|
|
|
$ |
16,713 |
| Amortization of discount on long-term debt |
|
|
|
(2,234) |
|
|
|
|
|
(2,139) |
|
|
|
|
|
(6,491) |
|
|
|
|
|
(11,398) |
| Non-GAAP finance & other expense (income), net |
|
|
$ |
(39) |
|
|
|
|
$ |
2,196 |
|
|
|
|
$ |
2,609 |
|
|
|
|
$ |
5,315 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| GAAP taxes on income |
|
|
$ |
5,175 |
|
|
|
|
$ |
2,612 |
|
|
|
|
$ |
21,065 |
|
|
|
|
$ |
6,279 |
| Tax adjustments re non-GAAP adjustments |
|
|
|
15,322 |
|
|
|
|
|
14,611 |
|
|
|
|
|
34,413 |
|
|
|
|
|
42,298 |
| Tax adjustment re ASC 606 to ASC 605 |
|
|
|
(1,264) |
|
|
|
|
|
- |
|
|
|
|
|
(935) |
|
|
|
|
|
- |
| Non-GAAP taxes on income |
|
|
$ |
19,233 |
|
|
|
|
$ |
17,223 |
|
|
|
|
$ |
54,543 |
|
|
|
|
$ |
48,577 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| GAAP net income |
|
|
$ |
39,283 |
|
|
|
|
$ |
26,173 |
|
|
|
|
$ |
97,044 |
|
|
|
|
$ |
63,903 |
| Valuation adjustment on acquired deferred revenue |
|
|
|
2,423 |
|
|
|
|
|
3,996 |
|
|
|
|
|
6,316 |
|
|
|
|
|
10,211 |
| Valuation adjustment on acquired deferred cost of cloud revenue |
|
|
|
(594) |
|
|
|
|
|
(371) |
|
|
|
|
|
(1,254) |
|
|
|
|
|
(1,133) |
| Amortization of acquired intangible assets |
|
|
|
25,895 |
|
|
|
|
|
29,381 |
|
|
|
|
|
78,261 |
|
|
|
|
|
88,865 |
| Share-based compensation (1) |
|
|
|
17,258 |
|
|
|
|
|
14,016 |
|
|
|
|
|
48,752 |
|
|
|
|
|
40,900 |
| Re-organization expenses (2) |
|
|
|
- |
|
|
|
|
|
(3,067) |
|
|
|
|
|
- |
|
|
|
|
|
(3,067) |
| Acquisition related expenses (3) |
|
|
|
5,114 |
|
|
|
|
|
1,256 |
|
|
|
|
|
5,114 |
|
|
|
|
|
1,256 |
| Amortization of discount on long term debt |
|
|
|
2,234 |
|
|
|
|
|
2,139 |
|
|
|
|
|
6,491 |
|
|
|
|
|
11,398 |
| Tax adjustments re non-GAAP adjustments |
|
|
|
(15,322) |
|
|
|
|
|
(14,611) |
|
|
|
|
|
(34,413) |
|
|
|
|
|
(42,298) |
| ASC 606 to ASC 605 adjustments |
|
|
|
(4,701) |
|
|
|
|
|
- |
|
|
|
|
|
(3,483) |
|
|
|
|
|
- |
| Non-GAAP net income |
|
|
$ |
71,590 |
|
|
|
|
$ |
58,912 |
|
|
|
|
$ |
202,828 |
|
|
|
|
$ |
170,035 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| GAAP diluted earnings per share |
|
|
$ |
0.62 |
|
|
|
|
$ |
0.42 |
|
|
|
|
$ |
1.54 |
|
|
|
|
$ |
1.03 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Non-GAAP diluted earnings per share |
|
|
$ |
1.12 |
|
|
|
|
$ |
0.95 |
|
|
|
|
$ |
3.21 |
|
|
|
|
$ |
2.74 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Shares used in computing GAAP diluted earnings per share |
|
|
|
63,660 |
|
|
|
|
|
62,220 |
|
|
|
|
|
63,157 |
|
|
|
|
|
61,979 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Shares used in computing non-GAAP diluted earnings per share |
|
|
|
63,660 |
|
|
|
|
|
62,220 |
|
|
|
|
|
63,157 |
|
|
|
|
|
61,979 |
| NICE LTD. AND SUBSIDIARIES |
|
|
|
|
|
|
|
| RECONCILIATION OF GAAP TO NON-GAAP RESULTS AND ASC 606 TO NON-GAAP
ASC 605 (continued) |
| U.S. dollars in thousands |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| (1) |
|
Share-based Compensation
|
|
|
|
|
|
|
|
|
|
|
Quarter ended |
|
Year to date |
|
|
|
September 30, |
|
September 30, |
|
|
|
|
2018 |
|
|
2017 |
|
|
2018 |
|
|
2017 |
|
|
|
|
|
|
|
|
|
|
|
|
Cost of product revenue |
$ |
(59) |
|
$ |
(158) |
|
$ |
(247) |
|
$ |
(494) |
|
|
Cost of services revenue |
|
(2,113) |
|
|
(1,903) |
|
|
(5,762) |
|
|
(5,625) |
|
|
Cost of cloud revenue |
|
(718) |
|
|
(649) |
|
|
(2,132) |
|
|
(2,132) |
|
|
Research and development |
|
(1,567) |
|
|
(2,204) |
|
|
(5,706) |
|
|
(6,651) |
|
|
Sales and marketing |
|
(8,930) |
|
|
(5,576) |
|
|
(22,084) |
|
|
(17,085) |
|
|
General and administrative |
|
(3,871) |
|
|
(3,526) |
|
|
(12,821) |
|
|
(8,913) |
|
|
|
$ |
(17,258) |
|
$ |
(14,016) |
|
$ |
(48,752) |
|
$ |
(40,900) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| (2) |
|
Re-organization expenses
|
|
|
|
|
|
|
|
|
|
|
Quarter ended |
|
Year to date |
|
|
|
September 30, |
|
September 30, |
|
|
|
|
2018 |
|
|
2017 |
|
|
2018 |
|
|
2017 |
|
|
|
|
|
|
|
|
|
|
|
|
General and administrative |
|
- |
|
$ |
3,067 |
|
|
- |
|
$ |
3,067 |
|
|
|
$ |
- |
|
$ |
3,067 |
|
$ |
- |
|
$ |
3,067 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| (3) |
|
Acquisition related expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Quarter ended |
|
Year to date |
|
|
|
September 30, |
|
September 30, |
|
|
|
|
2018 |
|
|
2017 |
|
|
2018 |
|
|
2017 |
|
|
|
|
|
|
|
|
|
|
|
|
Cost of cloud revenue |
$ |
(1,634) |
|
$ |
- |
|
$ |
(1,634) |
|
$ |
- |
|
|
Research and development |
|
(1,071) |
|
|
- |
|
|
(1,071) |
|
|
- |
|
|
Sales and marketing |
|
(74) |
|
|
(75) |
|
|
(74) |
|
|
(75) |
|
|
General and administrative |
|
(2,335) |
|
|
(1,181) |
|
|
(2,335) |
|
|
(1,181) |
|
|
|
$ |
(5,114) |
|
$ |
(1,256) |
|
$ |
(5,114) |
|
$ |
(1,256) |
| |
|
|
|
|
|
| NICE LTD. AND SUBSIDIARIES |
|
|
|
|
| CONDENSED CONSOLIDATED BALANCE SHEETS |
|
|
|
|
| U.S. dollars in thousands |
|
|
|
|
|
|
|
|
|
|
|
|
|
September 30, |
|
December 31, |
|
|
|
|
2018 |
|
|
2017 |
|
|
|
Unaudited |
|
Audited |
|
|
|
|
|
|
|
ASSETS |
|
|
|
|
|
|
|
|
|
|
| CURRENT ASSETS: |
|
|
|
|
|
Cash and cash equivalents |
|
$ |
276,170 |
|
$ |
328,302 |
|
Short-term investments |
|
|
172,942 |
|
|
63,951 |
|
Trade receivables |
|
|
219,818 |
|
|
230,729 |
|
Prepaid expenses and other current assets |
|
|
96,745 |
|
|
70,074 |
|
|
|
|
|
|
|
Total current assets |
|
|
765,675 |
|
|
693,056 |
|
|
|
|
|
|
| LONG-TERM ASSETS: |
|
|
|
|
|
Long-term investments |
|
|
207,234 |
|
|
132,820 |
|
Property and equipment, net |
|
|
132,310 |
|
|
118,275 |
|
Deferred tax assets |
|
|
15,298 |
|
|
11,850 |
|
Other intangible assets, net |
|
|
536,974 |
|
|
551,347 |
|
Goodwill |
|
|
1,368,756 |
|
|
1,318,242 |
|
Other long-term assets |
|
|
68,461 |
|
|
19,496 |
|
|
|
|
|
|
|
Total long-term assets |
|
|
2,329,033 |
|
|
2,152,030 |
|
|
|
|
|
|
| TOTAL ASSETS |
|
$ |
3,094,708 |
|
$ |
2,845,086 |
|
|
|
|
|
|
|
LIABILITIES AND SHAREHOLDERS' EQUITY |
|
|
|
|
|
|
|
|
|
|
| CURRENT LIABILITIES: |
|
|
|
|
|
Trade payables |
|
$ |
23,698 |
|
$ |
29,438 |
|
Deferred revenues and advances from customers |
|
|
198,210 |
|
|
184,564 |
|
Accrued expenses and other liabilities |
|
|
347,852 |
|
|
309,350 |
|
|
|
|
|
|
|
Total current liabilities |
|
|
569,760 |
|
|
523,352 |
|
|
|
|
|
|
| LONG-TERM LIABILITIES: |
|
|
|
|
|
Deferred revenues and advances from customers |
|
|
39,179 |
|
|
37,550 |
|
Deferred tax liabilities |
|
|
48,489 |
|
|
57,796 |
|
Long-term debt |
|
|
453,887 |
|
|
447,642 |
|
Other long-term liabilities |
|
|
32,486 |
|
|
29,185 |
|
|
|
|
|
|
|
Total long-term liabilities |
|
|
574,041 |
|
|
572,173 |
|
|
|
|
|
|
| SHAREHOLDERS' EQUITY |
|
|
1,950,907 |
|
|
1,749,561 |
|
|
|
|
|
|
| TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY |
|
$ |
3,094,708 |
|
$ |
2,845,086 |
| |
|
|
|
|
|
|
|
|
|
| NICE LTD. AND SUBSIDIARIES |
|
|
|
|
|
|
|
| CONSOLIDATED CASH FLOW STATEMENTS |
|
|
|
|
|
|
|
| U.S. dollars in thousands |
|
|
|
|
|
|
|
|
|
|
Quarter ended |
|
Year to date |
|
|
|
September 30, |
|
September 30, |
|
|
|
2018 |
|
2017 |
|
2018 |
|
2017 |
|
|
|
Unaudited |
|
Unaudited |
|
Unaudited |
|
Unaudited |
|
|
|
|
|
|
|
|
|
|
|
Operating Activities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Net income |
39,283 |
|
26,173 |
|
97,044 |
|
63,903 |
|
Depreciation and amortization |
39,426 |
|
39,153 |
|
114,283 |
|
115,309 |
|
Stock based compensation |
17,258 |
|
14,016 |
|
48,752 |
|
40,900 |
|
Amortization of premium and discount and accrued interest on marketable
securities |
137 |
|
273 |
|
(170) |
|
424 |
|
Deferred taxes, net |
(13,142) |
|
(12,646) |
|
(33,054) |
|
(34,188) |
|
Changes in operating assets and liabilities: |
|
|
|
|
|
|
|
|
|
Trade Receivables |
(5,771) |
|
10,930 |
|
(3,083) |
|
72,810 |
|
|
Prepaid expenses and other current assets |
(4,233) |
|
(32,264) |
|
(32,461) |
|
(40,251) |
|
|
Trade payables |
(8,940) |
|
7,605 |
|
(6,608) |
|
636 |
|
|
Accrued expenses and other current liabilities |
34,643 |
|
52,829 |
|
24,179 |
|
17,228 |
|
|
Deferred revenue |
(15,279) |
|
1,660 |
|
71,827 |
|
65,176 |
|
|
Long term liabilities |
573 |
|
(3,583) |
|
(214) |
|
(5,189) |
|
Amortization of discount on long term debt |
2,234 |
|
2,139 |
|
6,491 |
|
11,398 |
|
Other |
847 |
|
(461) |
|
720 |
|
(926) |
|
|
Net cash provided by operating activities |
87,036 |
|
105,824 |
|
287,706 |
|
307,230 |
|
|
|
|
|
|
|
|
|
|
|
Investing Activities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Purchase of property and equipment |
(7,957) |
|
(7,899) |
|
(21,521) |
|
(31,422) |
|
Purchase of Investments |
(96,544) |
|
(53,791) |
|
(284,467) |
|
(96,017) |
|
Proceeds from Investments |
40,093 |
|
15,610 |
|
99,802 |
|
51,626 |
|
Capitalization of software development costs |
(7,450) |
|
(7,730) |
|
(22,926) |
|
(21,046) |
|
Payments for business acquisitions, net of cash acquired |
(105,046) |
|
(37,880) |
|
(105,046) |
|
(37,880) |
|
|
Net cash used in investing activities |
(176,904) |
|
(91,690) |
|
(334,158) |
|
(134,739) |
|
|
|
|
|
|
|
|
|
|
|
Financing Activities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Proceeds from issuance of shares upon exercise of share options |
10,533 |
|
4,412 |
|
17,976 |
|
16,787 |
|
Purchase of treasury shares |
- |
|
(4,267) |
|
(10,613) |
|
(20,314) |
|
Dividends paid |
- |
|
- |
|
- |
|
(9,637) |
|
Repayment of long term debt |
- |
|
- |
|
- |
|
(260,000) |
|
Proceeds from issuance of debt, net of costs |
- |
|
- |
|
- |
|
260,842 |
|
Repayment of short-term bank loan |
(8,436) |
|
- |
|
(8,436) |
|
- |
|
|
Net cash provided by (used in) financing activities |
2,097 |
|
145 |
|
(1,073) |
|
(12,322) |
|
|
|
|
|
|
|
|
|
|
| Effect of exchange rates on cash and cash equivalents |
(875) |
|
2,028 |
|
(4,607) |
|
3,734 |
|
|
|
|
|
|
|
|
|
|
| Net change in cash and cash equivalents |
(88,646) |
|
16,307 |
|
(52,132) |
|
163,903 |
| Cash and cash equivalents, beginning of period |
364,816 |
|
304,622 |
|
328,302 |
|
157,026 |
|
|
|
|
|
|
|
|
|
|
| Cash and cash equivalents, end of period |
276,170 |
|
320,929 |
|
276,170 |
|
320,929 |
NICE
Investors
Marty Cohen, +1 551 256 5354, ET
ir@nice.com
Yisca Erez, +972 9 775-3798, CET
ir@nice.com
Media Contact
Chris Irwin-Dudek, +1 (551) 256-5140
Chris.Irwin-Dudek@nice.com
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