NICE Reports Strong Finish to 2018 with 30% Cloud Revenue Growth for the Fourth Quarter
Record Total Revenue and Operating Income for the Fourth Quarter and Full Year of 2018
NICE (NASDAQ: NICE) today announced results for the fourth quarter and full year ended December 31, 2018.
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Full Year 2018 Financial Highlights
|
| |
| GAAP |
|
Non-GAAP |
| Record revenue of $1,445 million, growth of 8% year-over-year |
|
Record revenue of $1,463 million, growth of 9% year-over-year |
| Cloud revenue of $461 million, growth of 28% year-over-year |
|
Cloud revenue of $470 million, growth of 27% year-over-year |
| Gross margin of 65.6% compared to 64.8% last year |
|
Gross margin of 71.1% compared to 71.6% last year |
| Record operating income of $198 million compared to $150 million
last year, 32% growth year-over-year |
|
Record operating income of $379 million compared to $336 million
last year, 13% growth year-over-year |
| Operating margin of 13.7% compared to 11.3% last year |
|
Operating margin of 25.9% compared to 25.0% last year |
| Record diluted EPS of $2.52 versus $2.31 last year, 9% growth
year-over-year |
|
Record diluted EPS of $4.69 versus $4.10 last year, 14% growth
year-over-year |
| Record cash flow from operations of $397 million |
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The GAAP column of the table contains the financial highlights of the full year 2018 under ASC
606 with the comparison period under ASC 605.
|
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|
The non-GAAP column of the table contains the financial highlights of the full year 2018 under
ASC 605 with the comparison period under ASC 605.
|
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|
Fourth Quarter 2018 Financial Highlights
|
| |
| GAAP |
|
Non-GAAP |
| Record revenue of $411 million, growth of 5% year-over-year |
|
Record revenue of $420 million, growth of 6% year-over-year |
| Cloud revenue of $132 million, growth of 30% year-over-year |
|
Cloud revenue of $134 million, growth of 29% year-over-year |
| Gross margin of 66.9% compared to 68.4% last year |
|
Gross margin of 72.4% compared to 74.2% last year |
| Operating income of $70 million compared to $63 million last
year |
|
Record operating income of $119 million compared to $112 million
last year |
| Operating margin of 17.1% compared to 16.1% last year |
|
Operating margin of 28.3% compared to 28.4% last year |
| Diluted EPS of $0.98 versus $1.27 last year |
|
Record diluted EPS of $1.47 versus $1.35 last year |
| Cash flow from operations of $109 million, 26% growth
year-over-year |
|
|
| |
|
The GAAP column of the table contains the financial highlights of the fourth 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 fourth quarter 2018
under ASC 605 with the comparison period under ASC 605.
|
| |
“We are pleased to end the year on a high note as 2018 was a year marked by robust growth and record results,” said Barak Eilam,
CEO of NICE. “For the full-year 2018, we reported strong growth in cloud revenue and operating income, an increase in recurring
revenue, further growth in the operating margin and a record year for cash flow generation.”
Mr. Eilam continued, “We are stepping into 2019 with great momentum across all of our businesses fueled by our two market
differentiating platforms - CXone for Customer Engagement and X-Sight for Financial Crime and Compliance. Our assets, investments
and market leadership in cloud, analytics and artificial intelligence are driving us forward and providing tremendous future
opportunities.
“As we look ahead to the next five years, our strong leadership position will allow us to quickly expand into a total
addressable market of over $12 billion from $7 billion today, providing us the opportunity to far exceed the $2 billion revenue
mark, to see the majority of our revenue come from the cloud and to have a greater than 30% operating margin.”
NICE Investor Day
NICE will be hosting its Investor Day on April 16th in conjunction with its Interactions annual user conference in Las Vegas.
The special program for analysts and investors will include meetings with NICE executives, presentations from customers, product
and technology sessions, and access to the solutions showcase. If you haven’t registered, please email NICE at IR@NICE.com.
GAAP Financial Highlights for the Fourth Quarter and Full Year Ended December 31:
The GAAP numbers presented below for the fourth quarter and full year 2018 are under ASC 606 and the comparison period GAAP
numbers for the fourth quarter and full year 2017 are under ASC 605.
Revenues: Fourth quarter 2018 total revenues increased 4.7% to $410.8 million compared to $392.2 million for the fourth
quarter of 2017.
Full year 2018 total revenues increased 8.4% to $1,444.5 million compared to $1,332.2 million for the full year 2017.
Gross Profit: Fourth quarter 2018 gross profit increased to $274.7 million compared to $268.3 million for the fourth
quarter of 2017 and fourth quarter 2018 gross margin was 66.9% compared to 68.4% for the fourth quarter of 2017.
Full year 2018 gross profit and gross margin increased to $947.7 million and 65.6%, respectively, compared to $863.5 million and
64.8%, respectively, for the full year 2017.
Operating Income: Fourth quarter 2018 operating income and operating margin increased to $70.4 million and 17.1%,
respectively, compared to $63.2 million and 16.1%, respectively, for the fourth quarter of 2017.
Full year 2018 operating income and operating margin increased to $197.6 million and 13.7%, respectively, compared to $150.1
million and 11.3%, respectively, for the full year 2017.
Net Income: Fourth quarter 2018 net income and net income margin were $62.3 million and 15.2%, respectively, compared to
$79.4 million and 20.2%, respectively, for the fourth quarter of 2017.
Full year 2018 net income and net income margin increased to $159.3 million and 11.0%, respectively, compared to $143.3 million and
10.8%, respectively, for the full year 2017.
Fully Diluted Earnings Per Share: Fully diluted earnings per share for the fourth quarter of 2018 was $0.98 compared to
$1.27 in the fourth quarter of 2017.
Fully diluted earnings per share for the full year 2018 increased to $2.52 compared to $2.31 for the full year 2017.
Operating Cash Flow and Cash Balance: Fourth quarter 2018 operating cash flow was $108.9 million and full year operating
cash flow reached $396.6 million. In the fourth quarter, $15.4 million was used for share repurchases and $26.0 million was used
for share repurchases for the full year of 2018. As of December 31, 2018, total cash and cash equivalents, short term investments
and marketable securities were $730.8 million, and total debt was $456.0 million.
Non-GAAP Financial Highlights for the Fourth Quarter and Full Year Ended December 31:
The non-GAAP numbers presented below for the fourth quarter and full year 2018 and the comparison period non-GAAP numbers for
the fourth quarter and full year 2017 are both under ASC 605.
Revenues: Fourth quarter 2018 non-GAAP total revenues increased to $419.9 million, up 6.1% from $395.8 million for the
fourth quarter of 2017.
Non-GAAP total revenues for the full year 2018 increased 8.7% to $1,462.7 million compared to $1,345.9 million for the full year
2017.
Gross Profit: Fourth quarter 2018 non-GAAP gross profit increased to $303.8 million compared to $293.5 million for the
fourth quarter of 2017. Fourth quarter 2018 Non-GAAP gross margin was 72.4% compared to 74.2% for the fourth quarter of 2017.
Full year 2018 non-GAAP gross profit increased to $1,040.6 million compared to $963.5 million and full year 2018 non-GAAP gross
margin was 71.1% compared to 71.6% for the full year 2017.
Operating Income: Fourth quarter 2018 non-GAAP operating income increased to $118.7 million compared to $112.4 million
for the fourth quarter of 2017. Fourth quarter 2018 Non-GAAP operating margin was 28.3% compared to 28.4% for the fourth quarter of
2017.
Full year 2018 non-GAAP operating income and non-GAAP operating margin increased to $378.6 million and 25.9%, respectively, from
$336.3 million and 25.0%, respectively, for the full year 2017.
Net Income: Fourth quarter 2018 non-GAAP net income and non-GAAP net income margin increased to $93.9 million and 22.4%,
respectively, from $84.5 million and 21.3%, respectively, for the fourth quarter of 2017.
Full year 2018 non-GAAP net income and non-GAAP net income margin increased to $296.7 million and 20.3%, respectively, from $254.5
million and 18.9%, respectively, for the full year 2017.
Fully Diluted Earnings Per Share: Fourth quarter 2018 non-GAAP fully diluted earnings per share increased 8.9% to $1.47,
compared to $1.35 for the fourth quarter of 2017.
Full year 2018 non-GAAP fully diluted earnings per share increased 14.4% to $4.69 compared to $4.10 for the full year 2017.
First Quarter and Full Year 2019 Guidance:
Effective January 1st, 2018, the company adopted ASC 606 using the modified retrospective method
for GAAP reporting purposes. Starting in January 2019 the guidance, as well as our financial results, will be provided using the
accounting standard ASC 606 for all 2019 quarters and the full year 2019. Comparative results throughout 2019 will be compared to
ASC 606 results for 2018.
First Quarter 2019: First quarter 2019 non-GAAP total revenues are expected to be in a range of $370 million to $380
million (2018 non-GAAP: $337.6 million). First quarter 2019 non-GAAP fully diluted earnings per share are expected to be in a range
of $1.05 to $1.15 (2018 non-GAAP: $0.97).
Full Year 2019: Full year 2019 non-GAAP total revenues are expected to be in a range of $1,558 million to $1,582 million
(2018 non-GAAP: $1,453.4 million). Full year 2019 non-GAAP fully diluted earnings per share are expected to be in a range of $5.08
to $5.28 (2018 non-GAAP: $4.75).
Quarterly Results Conference Call
NICE management will host its earnings conference call today, February 14th, 2019 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)1296-480-100, United Kingdom 0-800-783-0906, Israel
1-809-344-364. The Passcode is 990 622 84. 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 635 176
28.
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, tax adjustment re non-GAAP adjustments and tax reform and ASC 606 to ASC 605 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 fourth-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, 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.
| |
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| NICE LTD. AND SUBSIDIARIES |
| CONSOLIDATED STATEMENTS OF INCOME |
| U.S. dollars in thousands (except per share amounts) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Quarter ended |
|
Year ended |
|
|
|
December 31, |
|
December 31, |
|
|
|
2018 |
|
2017 |
|
2018 |
|
2017 |
|
|
|
Unaudited |
|
Unaudited |
|
Audited |
|
Audited |
|
|
|
|
|
|
|
|
|
|
| Revenue: |
|
|
|
|
|
|
|
|
|
Product |
|
$ |
92,941 |
|
$ |
114,822 |
|
|
$ |
263,805 |
|
$ |
318,946 |
|
|
Services |
|
|
186,073 |
|
|
175,947 |
|
|
|
719,531 |
|
|
652,040 |
|
|
Cloud |
|
|
131,815 |
|
|
101,466 |
|
|
|
461,183 |
|
|
361,166 |
|
| Total revenue |
|
|
410,829 |
|
|
392,235 |
|
|
|
1,444,519 |
|
|
1,332,152 |
|
|
|
|
|
|
|
|
|
|
|
| Cost of revenue: |
|
|
|
|
|
|
|
|
|
Product |
|
|
7,679 |
|
|
11,397 |
|
|
|
31,065 |
|
|
51,065 |
|
|
Services |
|
|
59,087 |
|
|
59,128 |
|
|
|
229,671 |
|
|
225,020 |
|
|
Cloud |
|
|
69,389 |
|
|
53,436 |
|
|
|
236,079 |
|
|
192,588 |
|
| Total cost of revenue |
|
|
136,155 |
|
|
123,961 |
|
|
|
496,815 |
|
|
468,673 |
|
|
|
|
|
|
|
|
|
|
|
| Gross profit |
|
|
274,674 |
|
|
268,274 |
|
|
|
947,704 |
|
|
863,479 |
|
|
|
|
|
|
|
|
|
|
|
| Operating expenses: |
|
|
|
|
|
|
|
|
|
Research and development, net |
|
|
46,807 |
|
|
50,132 |
|
|
|
183,830 |
|
|
181,107 |
|
|
Selling and marketing |
|
|
100,421 |
|
|
107,070 |
|
|
|
370,659 |
|
|
361,328 |
|
|
General and administrative |
|
|
46,275 |
|
|
37,313 |
|
|
|
153,323 |
|
|
129,071 |
|
|
Amortization of acquired intangible assets |
|
|
10,764 |
|
|
10,583 |
|
|
|
42,276 |
|
|
41,902 |
|
| Total operating expenses |
|
|
204,267 |
|
|
205,098 |
|
|
|
750,088 |
|
|
713,408 |
|
|
|
|
|
|
|
|
|
|
|
| Operating income |
|
|
70,407 |
|
|
63,176 |
|
|
|
197,616 |
|
|
150,071 |
|
|
|
|
|
|
|
|
|
|
|
| Finance and other expense, net |
|
|
1,829 |
|
|
3,698 |
|
|
|
10,901 |
|
|
20,411 |
|
|
|
|
|
|
|
|
|
|
|
| Income before tax |
|
|
68,578 |
|
|
59,478 |
|
|
|
186,715 |
|
|
129,660 |
|
| Taxes on income (Tax benefits) |
|
|
6,284 |
|
|
(19,910 |
) |
|
|
27,377 |
|
|
(13,631 |
) |
| Net income |
|
$ |
62,294 |
|
$ |
79,388 |
|
|
$ |
159,338 |
|
$ |
143,291 |
|
|
|
|
|
|
|
|
|
|
|
| Basic earnings per share |
|
$ |
1.01 |
|
$ |
1.30 |
|
|
$ |
2.60 |
|
$ |
2.37 |
|
| Diluted earnings per share |
|
$ |
0.98 |
|
$ |
1.27 |
|
|
$ |
2.52 |
|
$ |
2.31 |
|
|
|
|
|
|
|
|
|
|
|
| Weighted average number of shares |
|
|
|
|
|
|
|
|
| outstanding used to compute: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Basic earnings per share |
|
|
61,824 |
|
|
60,861 |
|
|
|
61,387 |
|
|
60,444 |
|
| Diluted earnings per share |
|
|
63,760 |
|
|
62,534 |
|
|
|
63,309 |
|
|
62,119 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
| 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 ended |
|
|
|
December 31, |
|
December 31, |
|
|
|
|
2018 |
|
|
|
2017 |
|
|
|
2018 |
|
|
|
2017 |
|
| GAAP revenues |
$ |
410,829 |
|
|
$ |
392,235 |
|
|
$ |
1,444,519 |
|
|
$ |
1,332,152 |
|
| Valuation adjustment on acquired deferred product revenue |
|
- |
|
|
|
15 |
|
|
|
97 |
|
|
|
317 |
|
| Valuation adjustment on acquired deferred services revenue |
|
44 |
|
|
|
752 |
|
|
|
632 |
|
|
|
4,667 |
|
| Valuation adjustment on acquired deferred cloud revenue |
|
2,550 |
|
|
|
2,760 |
|
|
|
8,181 |
|
|
|
8,754 |
|
| ASC 606 to ASC 605 revenue adjustment |
|
6,467 |
|
|
|
- |
|
|
|
9,242 |
|
|
|
- |
|
| Non-GAAP revenues |
$ |
419,890 |
|
|
$ |
395,762 |
|
|
$ |
1,462,671 |
|
|
$ |
1,345,890 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| GAAP cost of revenue |
$ |
136,155 |
|
|
$ |
123,961 |
|
|
$ |
496,815 |
|
|
$ |
468,673 |
|
| Amortization of acquired intangible assets on cost of product |
|
(870 |
) |
|
|
(5,296 |
) |
|
|
(5,889 |
) |
|
|
(23,782 |
) |
| Amortization of acquired intangible assets on cost of services |
|
(1,778 |
) |
|
|
(987 |
) |
|
|
(5,111 |
) |
|
|
(6,341 |
) |
| Amortization of acquired intangible assets on cost of cloud |
|
(15,504 |
) |
|
|
(12,646 |
) |
|
|
(53,901 |
) |
|
|
(46,352 |
) |
| Valuation adjustment on acquired deferred cost of cloud |
|
929 |
|
|
|
353 |
|
|
|
2,183 |
|
|
|
1,486 |
|
| Cost of product revenue adjustment (1) |
|
(113 |
) |
|
|
(189 |
) |
|
|
(360 |
) |
|
|
(683 |
) |
| Cost of services revenue adjustment (1,3) |
|
(1,867 |
) |
|
|
(2,071 |
) |
|
|
(7,629 |
) |
|
|
(7,696 |
) |
| Cost of cloud revenue adjustment (1,3) |
|
(888 |
) |
|
|
(833 |
) |
|
|
(4,654 |
) |
|
|
(2,965 |
) |
| ASC 606 to ASC 605 cost of revenue adjustment |
|
14 |
|
|
|
- |
|
|
|
664 |
|
|
|
- |
|
| Non-GAAP cost of revenue |
$ |
116,078 |
|
|
$ |
102,292 |
|
|
$ |
422,118 |
|
|
$ |
382,340 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| GAAP gross profit |
$ |
274,674 |
|
|
$ |
268,274 |
|
|
$ |
947,704 |
|
|
$ |
863,479 |
|
| Gross profit adjustments |
|
29,138 |
|
|
|
25,196 |
|
|
|
92,849 |
|
|
|
100,071 |
|
| Non-GAAP gross profit |
$ |
303,812 |
|
|
$ |
293,470 |
|
|
$ |
1,040,553 |
|
|
$ |
963,550 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| GAAP operating expenses |
$ |
204,267 |
|
|
$ |
205,098 |
|
|
$ |
750,088 |
|
|
$ |
713,408 |
|
| Research and development (1,3) |
|
(1,648 |
) |
|
|
(2,394 |
) |
|
|
(8,425 |
) |
|
|
(9,045 |
) |
| Sales and marketing (1,3) |
|
(5,371 |
) |
|
|
(6,083 |
) |
|
|
(27,650 |
) |
|
|
(23,243 |
) |
| General and administrative (1,2,3) |
|
(8,584 |
) |
|
|
(4,983 |
) |
|
|
(23,740 |
) |
|
|
(12,010 |
) |
| Amortization of acquired intangible assets |
|
(10,764 |
) |
|
|
(10,583 |
) |
|
|
(42,276 |
) |
|
|
(41,902 |
) |
| Valuation adjustment on acquired deferred commission |
|
322 |
|
|
|
- |
|
|
|
443 |
|
|
|
- |
|
| ASC 606 to ASC 605 operating expenses adjustment |
|
6,940 |
|
|
|
- |
|
|
|
13,483 |
|
|
|
- |
|
| Non-GAAP operating expenses |
$ |
185,162 |
|
|
$ |
181,055 |
|
|
$ |
661,923 |
|
|
$ |
627,208 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| GAAP finance & other expense, net |
$ |
1,829 |
|
|
$ |
3,698 |
|
|
$ |
10,901 |
|
|
$ |
20,411 |
|
| Amortization of discount on long-term debt |
|
(2,179 |
) |
|
|
(2,149 |
) |
|
|
(8,670 |
) |
|
|
(13,547 |
) |
| Non-GAAP finance & other expense (income), net |
$ |
(350 |
) |
|
$ |
1,549 |
|
|
$ |
2,231 |
|
|
$ |
6,864 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| GAAP taxes on income |
$ |
6,284 |
|
|
$ |
(19,910 |
) |
|
$ |
27,377 |
|
|
$ |
(13,631 |
) |
| Tax adjustments re non-GAAP adjustments |
|
18,939 |
|
|
|
15,373 |
|
|
|
53,352 |
|
|
|
57,671 |
|
| Tax reform adjustment |
|
- |
|
|
|
30,923 |
|
|
|
- |
|
|
|
30,923 |
|
| Tax adjustment re ASC 606 to ASC 605 |
|
(94 |
) |
|
|
- |
|
|
|
(1,029 |
) |
|
|
- |
|
| Non-GAAP taxes on income |
$ |
25,129 |
|
|
$ |
26,386 |
|
|
$ |
79,700 |
|
|
$ |
74,963 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| GAAP net income |
$ |
62,294 |
|
|
$ |
79,388 |
|
|
|
159,338 |
|
|
$ |
143,291 |
|
| Valuation adjustment on acquired deferred revenue |
|
2,594 |
|
|
|
3,527 |
|
|
|
8,910 |
|
|
|
13,738 |
|
| Valuation adjustment on acquired deferred cost of cloud revenue |
|
(929 |
) |
|
|
(353 |
) |
|
|
(2,183 |
) |
|
|
(1,486 |
) |
| Amortization of acquired intangible assets |
|
28,916 |
|
|
|
29,512 |
|
|
|
107,177 |
|
|
|
118,377 |
|
| Valuation adjustment on acquired deferred commission |
|
(322 |
) |
|
|
- |
|
|
|
(443 |
) |
|
|
- |
|
| Share-based compensation (1) |
|
18,471 |
|
|
|
16,080 |
|
|
|
67,223 |
|
|
|
56,980 |
|
| Re-organization expenses (2) |
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
(3,067 |
) |
| Acquisition related expenses (3) |
|
- |
|
|
|
473 |
|
|
|
5,235 |
|
|
|
1,729 |
|
| Amortization of discount on long term debt |
|
2,179 |
|
|
|
2,149 |
|
|
|
8,670 |
|
|
|
13,547 |
|
| Tax adjustments re non-GAAP adjustments and tax reform |
|
(18,939 |
) |
|
|
(46,296 |
) |
|
|
(53,352 |
) |
|
|
(88,594 |
) |
| ASC 606 to ASC 605 adjustments |
|
(393 |
) |
|
|
- |
|
|
|
(3,876 |
) |
|
|
- |
|
| Non-GAAP net income |
$ |
93,871 |
|
|
$ |
84,480 |
|
|
$ |
296,699 |
|
|
$ |
254,515 |
|
|
|
|
|
|
|
|
|
|
|
| GAAP diluted earnings per share |
$ |
0.98 |
|
|
$ |
1.27 |
|
|
$ |
2.52 |
|
|
$ |
2.31 |
|
|
|
|
|
|
|
|
|
|
|
| Non-GAAP diluted earnings per share |
$ |
1.47 |
|
|
$ |
1.35 |
|
|
$ |
4.69 |
|
|
$ |
4.10 |
|
|
|
|
|
|
|
|
|
|
|
| Shares used in computing GAAP diluted earnings per share |
|
63,760 |
|
|
|
62,534 |
|
|
|
63,309 |
|
|
|
62,119 |
|
|
|
|
|
|
|
|
|
|
|
| Shares used in computing non-GAAP diluted earnings per share |
|
63,760 |
|
|
|
62,534 |
|
|
|
63,309 |
|
|
|
62,119 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 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 ended |
|
|
|
December 31, |
|
December 31, |
|
|
|
|
2018 |
|
|
|
2017 |
|
|
|
2018 |
|
|
|
2017 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of product revenue |
$ |
(113 |
) |
|
$ |
(189 |
) |
|
$ |
(360 |
) |
|
$ |
(683 |
) |
|
|
Cost of services revenue |
|
(1,867 |
) |
|
|
(2,064 |
) |
|
|
(7,629 |
) |
|
|
(7,689 |
) |
|
|
Cost of cloud revenue |
|
(888 |
) |
|
|
(833 |
) |
|
|
(3,020 |
) |
|
|
(2,965 |
) |
|
|
Research and development |
|
(1,648 |
) |
|
|
(2,387 |
) |
|
|
(7,354 |
) |
|
|
(9,038 |
) |
|
|
Sales and marketing |
|
(5,371 |
) |
|
|
(6,022 |
) |
|
|
(27,455 |
) |
|
|
(23,107 |
) |
|
|
General and administrative |
|
(8,584 |
) |
|
|
(4,585 |
) |
|
|
(21,405 |
) |
|
|
(13,498 |
) |
|
|
|
$ |
(18,471 |
) |
|
$ |
(16,080 |
) |
|
$ |
(67,223 |
) |
|
$ |
(56,980 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| (2) |
|
Re-organization expenses
|
|
|
|
|
|
|
|
|
|
|
Quarter ended |
|
Year ended |
|
|
|
December 31, |
|
December 31, |
|
|
|
|
2018 |
|
|
|
2017 |
|
|
|
2018 |
|
|
|
2017 |
|
|
|
|
|
|
|
|
|
|
|
|
|
General and administrative |
$ |
- |
|
|
$ |
- |
|
|
$ |
- |
|
|
$ |
3,067 |
|
|
|
|
$ |
- |
|
|
$ |
- |
|
|
$ |
- |
|
|
$ |
3,067 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| (3) |
|
Acquisition related expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Quarter ended |
|
Year ended |
|
|
|
December 31, |
|
December 31, |
|
|
|
|
2018 |
|
|
|
2017 |
|
|
|
2018 |
|
|
|
2017 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of service revenue |
$ |
- |
|
|
$ |
(7 |
) |
|
$ |
- |
|
|
$ |
(7 |
) |
|
|
Cost of cloud revenue |
|
- |
|
|
|
- |
|
|
|
(1,634 |
) |
|
|
- |
|
|
|
Research and development |
|
- |
|
|
|
(7 |
) |
|
|
(1,071 |
) |
|
|
(7 |
) |
|
|
Sales and marketing |
|
- |
|
|
|
(61 |
) |
|
|
(195 |
) |
|
|
(136 |
) |
|
|
General and administrative |
|
- |
|
|
|
(398 |
) |
|
|
(2,335 |
) |
|
|
(1,579 |
) |
|
|
|
$ |
- |
|
|
$ |
(473 |
) |
|
$ |
(5,235 |
) |
|
$ |
(1,729 |
) |
|
|
|
|
|
|
|
|
|
|
| |
| NICE LTD. AND SUBSIDIARIES |
| CONDENSED CONSOLIDATED BALANCE SHEETS |
| U.S. dollars in thousands |
| |
|
|
|
|
|
|
|
|
December 31, |
|
December 31, |
|
|
|
2018 |
|
2017 |
|
|
|
Audited |
|
Audited |
|
|
|
|
|
|
|
ASSETS |
|
|
|
|
|
|
|
|
|
|
| CURRENT ASSETS: |
|
|
|
|
|
Cash and cash equivalents |
|
$ |
242,099 |
|
$ |
328,302 |
|
Short-term investments |
|
|
243,729 |
|
|
63,951 |
|
Trade receivables |
|
|
287,963 |
|
|
230,729 |
|
Prepaid expenses and other current assets |
|
|
87,450 |
|
|
70,074 |
|
|
|
|
|
|
|
Total current assets |
|
|
861,241 |
|
|
693,056 |
|
|
|
|
|
|
| LONG-TERM ASSETS: |
|
|
|
|
|
Long-term investments |
|
|
244,998 |
|
|
132,820 |
|
Property and equipment, net |
|
|
140,338 |
|
|
118,275 |
|
Deferred tax assets |
|
|
12,309 |
|
|
11,850 |
|
Other intangible assets, net |
|
|
508,232 |
|
|
551,347 |
|
Goodwill |
|
|
1,366,206 |
|
|
1,318,242 |
|
Other long-term assets |
|
|
74,042 |
|
|
19,496 |
|
|
|
|
|
|
|
Total long-term assets |
|
|
2,346,125 |
|
|
2,152,030 |
|
|
|
|
|
|
| TOTAL ASSETS |
|
$ |
3,207,366 |
|
$ |
2,845,086 |
|
|
|
|
|
|
|
LIABILITIES AND SHAREHOLDERS' EQUITY |
|
|
|
|
|
|
|
|
|
|
| CURRENT LIABILITIES: |
|
|
|
|
|
Trade payables |
|
$ |
29,617 |
|
$ |
29,438 |
|
Deferred revenues and advances from customers |
|
|
221,387 |
|
|
184,564 |
|
Accrued expenses and other liabilities |
|
|
373,908 |
|
|
309,350 |
|
|
|
|
|
|
|
Total current liabilities |
|
|
624,912 |
|
|
523,352 |
|
|
|
|
|
|
| LONG-TERM LIABILITIES: |
|
|
|
|
|
Deferred revenues and advances from customers |
|
|
35,112 |
|
|
37,550 |
|
Deferred tax liabilities |
|
|
44,140 |
|
|
57,796 |
|
Long-term debt |
|
|
455,985 |
|
|
447,642 |
|
Other long-term liabilities |
|
|
30,604 |
|
|
29,185 |
|
|
|
|
|
|
|
Total long-term liabilities |
|
|
565,841 |
|
|
572,173 |
|
|
|
|
|
|
| SHAREHOLDERS' EQUITY |
|
|
2,016,613 |
|
|
1,749,561 |
|
|
|
|
|
|
| TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY |
|
$ |
3,207,366 |
|
$ |
2,845,086 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| NICE LTD. AND SUBSIDIARIES |
|
|
|
|
|
|
|
|
| CONSOLIDATED CASH FLOW STATEMENTS |
|
|
|
|
|
|
|
|
| U.S. dollars in thousands |
|
|
|
|
|
|
|
|
| |
|
|
|
Quarter ended |
|
Year ended |
|
|
|
|
December 31,
|
|
December 31,
|
|
|
|
|
2018 |
|
2017 |
|
2018 |
|
2017 |
|
|
|
|
Unaudited |
|
Unaudited |
|
Audited |
|
Audited |
|
|
|
|
|
|
|
|
|
|
|
|
Operating Activities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Net income |
|
$ |
62,294 |
|
|
$ |
79,388 |
|
|
$ |
159,338 |
|
|
$ |
143,291 |
|
|
Depreciation and amortization |
|
|
42,859 |
|
|
|
40,992 |
|
|
|
157,142 |
|
|
|
156,301 |
|
|
Stock based compensation |
|
|
18,471 |
|
|
|
16,080 |
|
|
|
67,223 |
|
|
|
56,980 |
|
|
Amortization of premium and discount and accrued interest on marketable
securities |
|
|
(428 |
) |
|
|
222 |
|
|
|
(598 |
) |
|
|
646 |
|
|
Deferred taxes, net |
|
|
2,882 |
|
|
|
(36,696 |
) |
|
|
(30,172 |
) |
|
|
(70,884 |
) |
|
Changes in operating assets and liabilities: |
|
|
|
|
|
|
|
|
|
|
Trade Receivables |
|
|
(69,500 |
) |
|
|
(35,075 |
) |
|
|
(72,583 |
) |
|
|
37,735 |
|
|
|
Prepaid expenses and other current assets |
|
|
2,609 |
|
|
|
6,856 |
|
|
|
(29,852 |
) |
|
|
(6,839 |
) |
|
|
Trade payables |
|
|
3,082 |
|
|
|
2,029 |
|
|
|
(3,526 |
) |
|
|
2,665 |
|
|
|
Accrued expenses and other current liabilities |
|
|
23,916 |
|
|
|
34,162 |
|
|
|
48,095 |
|
|
|
25,541 |
|
|
|
Deferred revenue |
|
|
20,941 |
|
|
|
(23,552 |
) |
|
|
92,768 |
|
|
|
41,624 |
|
|
|
Long term liabilities |
|
|
(810 |
) |
|
|
(117 |
) |
|
|
(1,024 |
) |
|
|
(5,169 |
) |
|
Amortization of discount on long term debt |
|
|
2,179 |
|
|
|
2,149 |
|
|
|
8,670 |
|
|
|
13,547 |
|
|
Other |
|
|
408 |
|
|
|
150 |
|
|
|
1,128 |
|
|
|
(776 |
) |
|
|
Net cash provided by operating activities |
|
|
108,903 |
|
|
|
86,588 |
|
|
|
396,609 |
|
|
|
394,662 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Investing Activities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Purchase of property and equipment |
|
|
(9,921 |
) |
|
|
(8,467 |
) |
|
|
(31,442 |
) |
|
|
(39,889 |
) |
|
Purchase of Investments |
|
|
(145,033 |
) |
|
|
(37,406 |
) |
|
|
(429,500 |
) |
|
|
(133,423 |
) |
|
Proceeds from Investments |
|
|
37,378 |
|
|
|
12,669 |
|
|
|
137,180 |
|
|
|
64,295 |
|
|
Capitalization of software development costs |
|
|
(9,299 |
) |
|
|
(6,890 |
) |
|
|
(32,225 |
) |
|
|
(27,936 |
) |
|
Payments for business acquisitions, net of cash acquired |
|
|
270 |
|
|
|
(38,147 |
) |
|
|
(104,776 |
) |
|
|
(76,027 |
) |
|
|
Net cash used in investing activities |
|
|
(126,605 |
) |
|
|
(78,241 |
) |
|
|
(460,763 |
) |
|
|
(212,980 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
Financing Activities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Proceeds from issuance of shares upon exercise of share options |
|
|
1,072 |
|
|
|
2,453 |
|
|
|
19,048 |
|
|
|
19,240 |
|
|
Purchase of treasury shares |
|
|
(15,391 |
) |
|
|
(4,114 |
) |
|
|
(26,004 |
) |
|
|
(24,428 |
) |
|
Dividends paid |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
(9,637 |
) |
|
Capital Lease payments |
|
|
(876 |
) |
|
|
- |
|
|
|
(876 |
) |
|
|
(137 |
) |
|
Repayment of long term debt |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
(260,000 |
) |
|
Proceeds from issuance of exchangeable notes |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
260,135 |
|
|
Repayment of short-term bank loan |
|
|
- |
|
|
|
- |
|
|
|
(8,436 |
) |
|
|
- |
|
|
|
Net cash used in financing activities |
|
|
(15,195 |
) |
|
|
(1,661 |
) |
|
|
(16,268 |
) |
|
|
(14,827 |
) |
|
|
|
|
|
|
|
|
|
|
|
| Effect of exchange rates on cash and cash equivalents |
|
|
(1,174 |
) |
|
|
687 |
|
|
|
(5,781 |
) |
|
|
4,421 |
|
|
|
|
|
|
|
|
|
|
|
|
| Net change in cash and cash equivalents |
|
|
(34,071 |
) |
|
|
7,373 |
|
|
|
(86,203 |
) |
|
|
171,276 |
|
| Cash and cash equivalents, beginning of period |
|
|
276,170 |
|
|
|
320,929 |
|
|
|
328,302 |
|
|
|
157,026 |
|
|
|
|
|
|
|
|
|
|
|
|
| Cash and cash equivalents, end of period |
|
$ |
242,099 |
|
|
$ |
328,302 |
|
|
$ |
242,099 |
|
|
$ |
328,302 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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
View source version on businesswire.com: https://www.businesswire.com/news/home/20190214005364/en/