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NICE Reports 24% Year-Over-Year Cloud Revenue Growth, Exceeding High End of Guidance for Both Total Revenue and EPS

NICE

  • Total revenue growth of 15% year over year
  • Cloud ARR exceeds $2 billion
  • Company reiterates full-year total revenue guidance and raises EPS guidance
  • Record high operating margin driving operating cash flow of $159 million

NICE (NASDAQ: NICE) today announced results for the third quarter ended September 30, 2024, as compared to the corresponding period of the previous year.

Third Quarter 2024 Financial Highlights

GAAP

Non-GAAP

Total revenue was $690.0 million and increased 15%

Total revenue was $690.0 million and increased 15%

Cloud revenue was $500.1 million and increased 24%

Cloud revenue was $500.1 million and increased 24%

Operating income was $141.4 million and increased 24%

Operating income was $220.8 million and increased 20%

Operating margin was 20.5% compared to 18.9% last year

Operating margin was 32.0% compared to 30.6% last year

Diluted EPS was $1.86 and increased 34%

Diluted EPS was $2.88 and increased 27%

Operating cash flow was $159.0 million and increased 32%

“We are pleased to report another stellar quarter in which our financial performance and continued innovation are redefining our competitive edge, propelling us far ahead of the industry and solidifying NICE as the go-to partner for enterprises across the globe,” said Barak Eilam, CEO of NICE. “Total revenue of $690 million increased 15% compared to the same period last year, and robust profitability, marked by a 140-basis point increase in non-GAAP operating margin to a record 32%, an impressive 27% leap in non-GAAP EPS to $2.88, and another exceptional quarter of operating cash flow of $159 million, are setting new industry benchmarks.”

Mr. Eilam continued, “We owe these great results to the power of our cutting-edge AI innovation, where we delivered an outstanding quarter and an acceleration in deal signings and bookings for our CXone AI offerings, including Copilot, Autopilot and Autosummary. Our strength in AI-powered automated customer service and our market leading CXone platform, are reshaping the industry landscape as we continue to displace multiple on-premises and cloud customer service solution providers.”

GAAP Financial Highlights for the Third Quarter Ended September 30:

Revenues: Third quarter 2024 total revenues increased 15% to $690.0 million compared to $601.3 million for the third quarter of 2023.

Gross Profit: Third quarter 2024 gross profit was $460.3 million compared to $410.4 million for the third quarter of 2023. Third quarter 2024 gross margin was 66.7% compared to 68.2% for the third quarter of 2023.

Operating Income: Third quarter 2024 operating income increased 24% to $141.4 million compared to $113.6 million for the third quarter of 2023. Third quarter 2024 operating margin was 20.5% compared to 18.9% for the third quarter of 2023.

Net Income: Third quarter 2024 net income increased 31% to $120.9 million compared to $92.4 million for the third quarter of 2023. Third quarter 2024 net income margin was 17.5% compared to 15.4% for the third quarter of 2023.

Fully Diluted Earnings Per Share: Fully diluted earnings per share for the third quarter of 2024 increased 34% to $1.86 compared to $1.39 in the third quarter of 2023.

Cash Flow and Cash Balance: Third quarter 2024 operating cash flow was $159.0 million. In the third quarter 2024, $86.4 million was used for share repurchases. As of September 30, 2024, total cash and cash equivalents, and short-term investments were $1,526.7 million. Our debt was $458.4 million, resulting in net cash and investments of $1,068.3 million.

Non-GAAP Financial Highlights for the Third Quarter Ended September 30:

Revenues: Third quarter 2024 total revenues increased 15% to $690.0 million compared to $601.3 million for the third quarter of 2023.

Gross Profit: Third quarter 2024 gross profit was $490.3 million compared to $434.4 million for the third quarter of 2023. Third quarter 2024 gross margin was 71.1% compared to 72.2% for the third quarter of 2023.

Operating Income: Third quarter 2024 operating income increased 20% to $220.8 million compared to $183.9 million for the third quarter of 2023. Third quarter 2024 operating margin was 32.0% compared to 30.6% for the third quarter of 2023.

Net Income: Third quarter 2024 net income increased 24% to $186.9 million compared to $150.6 million for the third quarter of 2023. Third quarter 2024 net income margin was 27.1% compared to 25.0% for the third quarter of 2023.

Fully Diluted Earnings Per Share: Fully diluted earnings per share for the third quarter of 2024 increased 27% to $2.88 compared to $2.27 in the third quarter of 2023.

Full-Year 2024 Guidance:

The Company is reiterating its full-year 2024 non-GAAP total revenues to be in an expected range of $2,715 million to $2,735 million, representing 15% growth at the midpoint compared to full-year 2023.

The Company increased full-year 2024 non-GAAP fully diluted earnings per share which are expected to be in a range of $10.95 to $11.15, representing 26% growth at the midpoint compared to full-year 2023.

Quarterly Results Conference Call

NICE management will host its earnings conference call today, November 14, 2024, at 8:30 AM ET, 13:30 GMT, 15:30 Israel, to discuss the results and the company's outlook. A live webcast and replay will be available on the Investor Relations page of the Company’s website. To access, please register by clicking here: 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 and other 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.

About NICE
With NICE (Nasdaq: NICE), it’s never been easier for organizations of all sizes around the globe to create extraordinary customer experiences while meeting key business metrics. Featuring the world’s #1 cloud native customer experience platform, CXone, NICE is a worldwide leader in AI-powered self-service and agent-assisted CX software for the contact center – and beyond. Over 25,000 organizations in more than 150 countries, including over 85 of the Fortune 100 companies, partner with NICE to transform - and elevate - every customer interaction. 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, performance, future plans and strategies, projections, anticipated events and trends, the economic environment, 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 uncertainties, contingencies, and risks, including, economic, competitive and other factors, which are difficult to predict and 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.

NICE LTD. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

U.S. dollars in thousands

September 30,

December 31,

2024

2023

Unaudited

Audited

ASSETS

CURRENT ASSETS:

Cash and cash equivalents

$

666,734

$

511,795

Short-term investments

859,955

896,044

Trade receivables

629,850

585,154

Debt hedge option

-

121,922

Prepaid expenses and other current assets

213,560

197,967

Total current assets

2,370,099

2,312,882

LONG-TERM ASSETS:

Property and equipment, net

187,447

174,414

Deferred tax assets

222,268

178,971

Other intangible assets, net

246,037

305,501

Operating lease right-of-use assets

96,743

104,565

Goodwill

1,853,115

1,821,969

Prepaid expenses and other long-term assets

212,904

219,332

Total long-term assets

2,818,514

2,804,752

TOTAL ASSETS

$

5,188,613

$

5,117,634

LIABILITIES AND SHAREHOLDERS' EQUITY

CURRENT LIABILITIES:

Trade payables

$

71,349

$

66,036

Deferred revenues and advances from customers

333,968

302,649

Current maturities of operating leases

13,065

13,747

Debt

458,360

209,229

Accrued expenses and other liabilities

548,048

528,660

Total current liabilities

1,424,790

1,120,321

LONG-TERM LIABILITIES:

Deferred revenues and advances from customers

55,223

52,458

Operating leases

95,206

102,909

Deferred tax liabilities

9,887

8,596

Debt

-

457,081

Other long-term liabilities

23,261

21,769

Total long-term liabilities

183,577

642,813

SHAREHOLDERS' EQUITY

Nice Ltd's equity

3,567,727

3,341,132

Non-controlling interests

12,519

13,368

Total shareholders' equity

3,580,246

3,354,500

TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY

$

5,188,613

$

5,117,634

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,

2024

2023

2024

2023

Unaudited

Unaudited

Unaudited

Unaudited

Revenue:

Cloud

$

500,114

$

403,324

$

1,450,213

$

1,152,839

Services

149,857

160,220

446,381

479,022

Product

39,992

37,800

117,078

122,455

Total revenue

689,963

601,344

2,013,672

1,754,316

Cost of revenue:

Cloud

178,923

140,564

519,603

407,144

Services

44,652

45,292

137,401

140,216

Product

6,111

5,130

20,134

19,935

Total cost of revenue

229,686

190,986

677,138

567,295

Gross profit

460,277

410,358

1,336,534

1,187,021

Operating expenses:

Research and development, net

91,500

84,848

265,854

241,589

Selling and marketing

152,778

144,171

465,438

444,614

General and administrative

74,620

67,713

213,600

188,256

Total operating expenses

318,898

296,732

944,892

874,459

Operating income

141,379

113,626

391,642

312,562

Financial and other income, net

(12,280)

(7,037)

(41,934)

(25,108)

Income before tax

153,659

120,663

433,576

337,670

Taxes on income

32,738

28,310

90,497

81,021

Net income

$

120,921

$

92,353

$

343,079

$

256,649

Earnings per share:

Basic

$

1.91

$

1.46

$

5.41

$

4.03

Diluted

$

1.86

$

1.39

$

5.22

$

3.86

Weighted average shares outstanding:

Basic

63,397

63,422

63,403

63,693

Diluted

64,838

66,223

65,741

66,438

NICE LTD. AND SUBSIDIARIES

CONSOLIDATED CASH FLOW STATEMENTS

U.S. dollars in thousands

Quarter ended

Year to date

September 30,

September 30,

2024

2023

2024

2023

Unaudited

Unaudited

Unaudited

Unaudited

Operating Activities

Net income

$

120,921

$

92,353

$

343,079

$

256,649

Adjustments to reconcile net income to net cash provided by operating activities:

Depreciation and amortization

52,964

42,269

156,244

126,148

Share-based compensation

47,252

46,213

133,882

130,488

Amortization of premium and discount and accrued interest on marketable securities

(3,398)

998

(6,726)

2,044

Deferred taxes, net

(27,542)

(13,915)

(38,949)

(30,787)

Changes in operating assets and liabilities:

Trade Receivables, net

(41,462)

(25,807)

(40,032)

(17,720)

Prepaid expenses and other current assets

17,164

(315)

27,665

(22,361)

Operating lease right-of-use assets

3,273

3,182

9,926

8,685

Trade payables

(2,293)

11,632

4,646

784

Accrued expenses and other current liabilities

22,149

20,835

(21,555)

(28,691)

Deferred revenue

(28,094)

(54,485)

22,187

(39,662)

Operating lease liabilities

(2,748)

(4,140)

(10,524)

(11,541)

Amortization of discount on long-term debt

430

1,166

1,404

3,449

Loss from extinguishment of debt

-

-

-

37

Other

345

624

1,872

3,412

Net cash provided by operating activities

158,961

120,610

583,119

380,934

Investing Activities

Purchase of property and equipment

(10,419)

(5,507)

(27,395)

(23,126)

Purchase of Investments

(138,219)

(9,284)

(575,332)

(200,643)

Proceeds from sales of marketable investments

60,125

134,486

628,246

307,038

Capitalization of internal use software costs

(16,812)

(12,479)

(47,986)

(41,106)

Payments for business acquisitions, net of cash acquired

(44,507)

(18,405)

(44,507)

(18,405)

Net cash provided by (used in) investing activities

(149,832)

88,811

(66,974)

23,758

Financing Activities

Proceeds from issuance of shares upon exercise of options

28

43

2,340

1,767

Purchase of treasury shares

(86,437)

(89,506)

(274,040)

(219,417)

Dividends paid to noncontrolling interest

-

-

(2,681)

(1,480)

Repayment of debt

-

(23)

(87,435)

(1,557)

Net cash used in financing activities

(86,409)

(89,486)

(361,816)

(220,687)

Effect of exchange rates on cash and cash equivalents

4,508

(2,824)

1,260

(1,111)

Net change in cash, cash equivalents and restricted cash

(72,772)

117,111

155,589

182,894

Cash, cash equivalents and restricted cash, beginning of period

$

741,675

$

598,879

$

513,314

$

533,096

Cash, cash equivalents and restricted cash, end of period

$

668,903

$

715,990

$

668,903

$

715,990

Reconciliation of cash, cash equivalents and restricted cash reported in the consolidated balance sheet:

Cash and cash equivalents

$

666,734

$

713,090

$

666,734

$

713,090

Restricted cash included in other current assets

$

2,169

$

2,900

$

2,169

$

2,900

Total cash, cash equivalents and restricted cash shown in the statement of cash flows

$

668,903

$

715,990

$

668,903

$

715,990

NICE LTD. AND SUBSIDIARIES

RECONCILIATION OF GAAP TO NON-GAAP RESULTS

U.S. dollars in thousands (except per share amounts)

Quarter ended

Year to date

September 30,

September 30,

2024

2023

2024

2023

GAAP revenues

$

689,963

$

601,344

$

2,013,672

$

1,754,316

Non-GAAP revenues

$

689,963

$

601,344

$

2,013,672

$

1,754,316

GAAP cost of revenue

$

229,686

$

190,986

$

677,138

$

567,295

Amortization of acquired intangible assets on cost of cloud

(24,278)

(18,967)

(73,778)

(57,732)

Amortization of acquired intangible assets on cost of product

-

(260)

(410)

(766)

Cost of cloud revenue adjustment (1,2)

(3,175)

(2,160)

(9,029)

(6,360)

Cost of services revenue adjustment (1)

(2,511)

(3,016)

(7,506)

(8,764)

Cost of product revenue adjustment (1)

(30)

384

(90)

106

Non-GAAP cost of revenue

$

199,692

$

166,967

$

586,325

$

493,779

GAAP gross profit

$

460,277

$

410,358

$

1,336,534

$

1,187,021

Gross profit adjustments

29,994

24,019

90,813

73,516

Non-GAAP gross profit

$

490,271

$

434,377

$

1,427,347

$

1,260,537

GAAP operating expenses

$

318,898

$

296,732

$

944,892

$

874,459

Research and development (1,2)

(6,734)

(8,224)

(22,361)

(24,405)

Sales and marketing (1,2)

(14,944)

(12,376)

(42,326)

(36,533)

General and administrative (1,2)

(22,154)

(22,348)

(59,414)

(57,703)

Amortization of acquired intangible assets

(5,613)

(3,308)

(15,824)

(12,251)

Valuation adjustment on acquired deferred commission

1

30

24

106

Non-GAAP operating expenses

$

269,454

$

250,506

$

804,991

$

743,673

GAAP financial and other income, net

$

(12,280)

$

(7,037)

$

(41,934)

$

(25,108)

Amortization of discount and loss of extinguishment on debt

(430)

(1,166)

(1,404)

(3,486)

Change in fair value of contingent consideration

(36)

(239)

(115)

(817)

Non-GAAP financial and other income, net

$

(12,746)

$

(8,442)

$

(43,453)

$

(29,411)

GAAP taxes on income

$

32,738

$

28,310

$

90,497

$

81,021

Tax adjustments re non-GAAP adjustments

13,886

13,372

42,665

37,473

Non-GAAP taxes on income

$

46,624

$

41,682

$

133,162

$

118,494

GAAP net income

$

120,921

$

92,353

$

343,079

$

256,649

Amortization of acquired intangible assets

29,891

22,535

90,012

70,749

Valuation adjustment on acquired deferred commission

(1)

(30)

(24)

(106)

Share-based compensation (1)

48,731

47,287

137,997

133,206

Acquisition related and other expenses (2)

817

453

2,729

453

Amortization of discount and loss of extinguishment on debt

430

1,166

1,404

3,486

Change in fair value of contingent consideration

36

239

115

817

Tax adjustments re non-GAAP adjustments

(13,886)

(13,372)

(42,665)

(37,473)

Non-GAAP net income

$

186,939

$

150,631

$

532,647

$

427,781

GAAP diluted earnings per share

$

1.86

$

1.39

$

5.22

$

3.86

Non-GAAP diluted earnings per share

$

2.88

$

2.27

$

8.10

$

6.44

Shares used in computing GAAP diluted earnings per share

64,838

66,223

65,741

66,438

Shares used in computing non-GAAP diluted earnings per share

64,838

66,223

65,741

66,438

NICE LTD. AND SUBSIDIARIES

RECONCILIATION OF GAAP TO NON-GAAP RESULTS (continued)

U.S. dollars in thousands

(1)

Share-based compensation

Quarter ended

Year to date

September 30,

September 30,

2024

2023

2024

2023

Cost of cloud revenue

$

3,175

$

2,160

$

8,967

$

6,360

Cost of services revenue

2,511

3,016

7,506

8,764

Cost of product revenue

30

(384)

90

(106)

Research and development

6,734

8,224

22,031

24,405

Sales and marketing

14,937

12,351

41,676

36,508

General and administrative

21,344

21,920

57,727

57,275

$

48,731

$

47,287

$

137,997

$

133,206

(2)

Acquisition related and other expenses

Quarter ended

Year to date

September 30,

September 30,

2024

2023

2024

2023

Cost of cloud revenue

$

-

$

-

$

62

$

-

Research and development

-

-

330

-

Sales and marketing

7

25

650

25

General and administrative

810

428

1,687

428

$

817

$

453

$

2,729

$

453

NICE LTD. AND SUBSIDIARIES

RECONCILIATION OF GAAP NET INCOME TO NON-GAAP EBITDA

U.S. dollars in thousands

Quarter ended

Year to date

September 30,

September 30,

2024

2023

2024

2023

Unaudited

Unaudited

Unaudited

Unaudited

GAAP net income

$

120,921

$

92,353

$

343,079

$

256,649

Non-GAAP adjustments:

Depreciation and amortization

52,964

42,269

156,244

126,148

Share-based compensation

47,252

46,213

133,882

130,488

Financial and other income, net

(12,280)

(7,037)

(41,934)

(25,108)

Acquisition related and other expenses

817

453

2,729

453

Valuation adjustment on acquired deferred commission

(1)

(30)

(24)

(106)

Taxes on income

32,738

28,310

90,497

81,021

Non-GAAP EBITDA

$

242,411

$

202,531

$

684,473

$

569,545

NICE LTD. AND SUBSIDIARIES

NON-GAAP RECONCILIATION - FREE CASH FLOW FROM CONTINUING OPERATIONS

U.S. dollars in thousands

Quarter ended

Year to date

September 30,

September 30,

2024

2023

2024

2023

Unaudited

Unaudited

Unaudited

Unaudited

Net cash provided by operating activities

$

158,961

$

120,610

$

583,119

$

380,934

Purchase of property and equipment

(10,419)

(5,507)

(27,395)

(23,126)

Capitalization of internal use software costs

(16,812)

(12,479)

(47,986)

(41,106)

Free Cash Flow (a)

$

131,730

$

102,624

$

507,738

$

316,702

(a) Free cash flow from continuing operations is defined as operating cash flows from continuing operations less capital expenditures of the continuing operations and less capitalization of internal use software costs.