Company Performance - Nice (NICE) closed at $149.75, reflecting a -0.62% change from the previous day's closing price, underperforming the S&P 500's gain of 0.13% [1] - Over the past month, shares of Nice have decreased by 0.86%, which is significantly better than the Computer and Technology sector's decline of 9.27% and the S&P 500's loss of 6.3% [2] Upcoming Earnings - The upcoming earnings release is expected to show an EPS of $2.84, representing a 10.08% increase year-over-year, with revenue anticipated at $699.39 million, a 6.08% rise compared to the same quarter last year [3] - For the full year, earnings are projected at $12.20 per share and revenue at $2.93 billion, indicating increases of +9.71% and +7% respectively from the prior year [4] Analyst Estimates and Valuation - Recent changes in analyst estimates for Nice suggest optimism regarding the company's business and profitability, as these revisions are correlated with near-term share price momentum [5][6] - Nice has a Forward P/E ratio of 12.35, which is below the industry average of 24.35, indicating that Nice is trading at a discount compared to its peers [7] - The company currently has a PEG ratio of 1.15, while the Internet - Software industry average is 1.93, suggesting a favorable growth outlook relative to its valuation [8] Industry Context - The Internet - Software industry, part of the Computer and Technology sector, holds a Zacks Industry Rank of 72, placing it in the top 30% of over 250 industries [9]

Nice (NICE) business unit, Nice Actimize, recently introduced the next-generation X-Sight ActOne, an advanced AI-powered platform designed to transform fraud and financial crime prevention.Expanding on the robust and open architecture of X-Sight, the latest version integrates Agentic AI capabilities, orchestrating all financial crime workflows within a unified platform. By leveraging billions of daily financial transactions and real-world fraud insights, X-Sight ActOne enhances analytical precision and inve ...

Company Performance - Nice's stock closed at $156.78, reflecting a +1.81% increase from the previous trading day's closing, outperforming the S&P 500's daily gain of 0.08% [1] - Over the past month, Nice's shares appreciated by 0.27%, contrasting with the Computer and Technology sector's loss of 12.04% and the S&P 500's loss of 7.33% [1] Upcoming Financial Results - Nice is projected to report earnings of $2.84 per share, indicating a year-over-year growth of 10.08%, with expected revenue of $699.39 million, up 6.08% from the prior-year quarter [2] - For the full year, analysts expect earnings of $12.23 per share and revenue of $2.93 billion, marking changes of +9.98% and +7%, respectively, from last year [3] Analyst Estimates and Valuation - Recent changes to analyst estimates for Nice suggest a favorable outlook on the company's business health and profitability [4] - Nice currently holds a Zacks Rank of 3 (Hold), with a Forward P/E ratio of 12.59, which is a discount compared to the industry average Forward P/E of 27.92 [6] - The company has a PEG ratio of 0.86, significantly lower than the Internet-Software industry's average PEG ratio of 2.06 [7] Industry Context - The Internet-Software industry, part of the Computer and Technology sector, has a Zacks Industry Rank of 81, placing it in the top 33% of over 250 industries [7] - The Zacks Industry Rank indicates that the top 50% rated industries outperform the bottom half by a factor of 2 to 1 [8]

PART I [Key Information](index=8&type=section&id=Item%203.%20Key%20Information.) This section outlines the significant risks facing the company, categorized into business and market risks, operational risks, security and intellectual property risks, regulatory challenges, and financial condition risks [Risk Factors](index=8&type=section&id=D.%20Risk%20Factors) - The company operates in highly competitive markets against established software vendors and new entrants from adjacent markets (e.g., CRM, UCaaS), which could lead to pricing pressure and loss of market share[29](index=29&type=chunk)[32](index=32&type=chunk) - Rapid technological changes, particularly the evolution and adoption of **AI and Generative AI**, require significant R&D investment, with failure to innovate potentially rendering products obsolete[37](index=37&type=chunk)[39](index=39&type=chunk)[43](index=43&type=chunk) - Growth is highly dependent on the cloud-based SaaS business, relying on third-party platforms like Amazon and Microsoft, and facing challenges in ensuring cloud revenue growth compensates for declining on-premises business[44](index=44&type=chunk)[47](index=47&type=chunk)[52](index=52&type=chunk) - The business relies on third-party software (e.g., LLMs) and infrastructure, where loss of access could disrupt service delivery and require costly redesigns[71](index=71&type=chunk) - Cybersecurity incidents or breaches of the company's or its third-party providers' systems could lead to unauthorized access to sensitive customer data, resulting in significant legal, financial, and reputational damage[87](index=87&type=chunk)[89](index=89&type=chunk)[91](index=91&type=chunk) - The company is subject to a complex and evolving global regulatory environment, including data privacy laws (e.g., GDPR, CCPA), cybersecurity regulations, and emerging AI legislation, increasing compliance costs and potential liabilities[109](index=109&type=chunk)[115](index=115&type=chunk)[116](index=116&type=chunk) - Quarterly results may be volatile due to factors like the timing of large customer orders, shifts to consumption-based pricing models, and general economic conditions affecting customer spending[119](index=119&type=chunk)[120](index=120&type=chunk)[121](index=121&type=chunk) - As a global company, operations are exposed to foreign currency exchange risks, particularly fluctuations between the U.S. dollar and the **NIS, EUR, GBP, and INR**, which can impact expenses and earnings[126](index=126&type=chunk) [Information on the Company](index=28&type=section&id=Item%204.%20Information%20on%20the%20Company.) NICE Ltd. is a global enterprise software leader providing AI-powered cloud platforms for Customer Engagement and Financial Crime & Compliance, with a strategy centered on leveraging domain-specific AI and extensive data assets [History and Development of the Company](index=28&type=section&id=Item%204.A%20History%20and%20Development%20of%20the%20Company.) - Founded in **1986**, NICE has evolved into an enterprise software leader in cloud, analytics, digital, and AI, with key acquisitions including Actimize (2007) and inContact (2016)[167](index=167&type=chunk) - In August **2024**, the Board of Directors appointed **Scott Russell** as the new CEO, effective January 1, 2025, succeeding Barak Eilam after his 10-year tenure[169](index=169&type=chunk) [Business Overview](index=28&type=section&id=Item%204.B%20Business%20Overview) - NICE operates in two main markets: **Customer Engagement**, with its CXone Mpower AI platform, and **Financial Crime and Compliance**, offering AI solutions to prevent fraud and money laundering[175](index=175&type=chunk) - The company's strategy is centered on **AI as a catalyst for growth**, focusing on increasing cloud win rates, expanding into digital, driving platform adoption, extending automation, and creating new AI-driven use-cases[176](index=176&type=chunk)[192](index=192&type=chunk) - Key industry trends driving demand include the shift to **AI-driven automation**, the evolution of cloud platforms to be AI-first, the rise of AI copilots, and the critical need for AI trust and explainability[182](index=182&type=chunk) - In the Customer Engagement market, NICE competes with **Amazon Connect, Genesys, Five9, and TalkDesk**, while in Financial Crime and Compliance, competitors include **SAS, FICO, Oracle, and Verafin**[271](index=271&type=chunk)[274](index=274&type=chunk) - The company holds **575 U.S. patents** and has **230 pending patent applications**, relying on a combination of patent, trade secret, copyright, and trademark law to protect its proprietary technology[100](index=100&type=chunk)[254](index=254&type=chunk) [Organizational Structure](index=48&type=section&id=Item%204.C%20Organizational%20Structure) - NICE Ltd. has numerous wholly-owned subsidiaries across the globe, with significant operations in the **United States** (Actimize Inc., inContact Inc., NICE Systems Inc.), **Israel** (Actimize Ltd.), **India**, and the **United Kingdom**[275](index=275&type=chunk)[276](index=276&type=chunk) [Property, Plants and Equipment](index=48&type=section&id=Item%204.D%20Property,%20Plants%20and%20Equipment) - The company leases its primary office facilities, including its Israeli headquarters in Ra'anana (~**165,000 sq ft**), North American headquarters in Hoboken, NJ (~**60,000 sq ft**), and other key locations in London, Singapore, Atlanta, and Salt Lake City[277](index=277&type=chunk) [Operating and Financial Review and Prospects](index=50&type=section&id=Item%205.%20Operating%20and%20Financial%20Review%20and%20Prospects.) For fiscal year 2024, NICE reported a **15.0% increase** in total revenues to **$2.74 billion**, driven by **25.4% growth in cloud revenue**, which now represents **72.5% of total revenue** [Results of Operations](index=57&type=section&id=Results%20of%20Operations) Revenue Breakdown (2024 vs. 2023) | Revenue Type | 2024 ($M) | 2023 ($M) | % Change | | :--- | :--- | :--- | :--- | | Cloud | 1,984.2 | 1,581.8 | 25.4% | | Service | 596.0 | 641.4 | (7.1)% | | Product | 155.1 | 154.3 | 0.5% | | **Total** | **2,735.3** | **2,377.5** | **15.0%** | - The **15% total revenue growth** was primarily driven by a **25.4% increase in cloud revenue**, reflecting strong demand for the CXone Mpower platform and increased cloud adoption in the Financial Crime and Compliance segment[334](index=334&type=chunk)[337](index=337&type=chunk) Operating Expenses (2024 vs. 2023) | Expense Category | 2024 ($M) | 2023 ($M) | % Change | | :--- | :--- | :--- | :--- | | Research and development, net | 360.6 | 322.7 | 11.7% | | Selling and marketing | 642.3 | 599.1 | 7.2% | | General and administrative | 276.9 | 252.3 | 9.8% | | **Total operating expenses** | **1,279.7** | **1,174.1** | **9.0%** | - Net income increased by **$104.3 million** to **$442.6 million** in 2024, driven by higher revenue and operating income, partially offset by increased operating expenses to support innovation and growth[353](index=353&type=chunk) [Liquidity and Capital Resources](index=60&type=section&id=Liquidity%20and%20Capital%20Resources) - As of December 31, 2024, the company had **$1,621.7 million** in cash, cash equivalents, and short-term investments, considered sufficient to meet working capital and capital expenditure needs for at least the next 12 months[355](index=355&type=chunk)[358](index=358&type=chunk) Cash Flow Summary (2024 vs. 2023) | Cash Flow Activity | 2024 ($M) | 2023 ($M) | | :--- | :--- | :--- | | Net cash from operating activities | 832.6 | 561.4 | | Net cash used in investing activities | (397.4) | (293.6) | | Net cash used in financing activities | (456.6) | (290.3) | - Net cash from operations increased significantly to **$832.6 million** in 2024, primarily due to higher net income and favorable changes in working capital[359](index=359&type=chunk) - Financing activities in 2024 included **$369.2 million** for share repurchases and **$192.1 million** for repayment of long-term debt[362](index=362&type=chunk) [Directors, Senior Management and Employees](index=63&type=section&id=Item%206.%20Directors,%20Senior%20Management%20and%20Employees.) This section provides details on the company's leadership, compensation practices, and workforce, including the Board of Directors, senior management, executive compensation, equity incentive plans, and board practices governed by Israeli law [Directors and Senior Management](index=63&type=section&id=Item%206A.%20Directors%20and%20Senior%20Management.) - The company's leadership includes Chairman of the Board **David Kostman** and CEO **Scott Russell**, who assumed the role on January 1, 2025[368](index=368&type=chunk)[370](index=370&type=chunk)[379](index=379&type=chunk) [Compensation](index=67&type=section&id=Item%206B.%20Compensation.) - Aggregate compensation for **19 directors and executive officers** in 2024 was approximately **$11.1 million** in salary and fees, plus **$1.4 million** in benefits, governed by a shareholder-approved policy[389](index=389&type=chunk)[390](index=390&type=chunk) - In 2024, officers and directors received options for **92,301 ordinary shares** and **178,622 restricted share units** under the company's equity-based compensation plans[392](index=392&type=chunk) [Board Practices](index=69&type=section&id=Item%206C.%20Board%20Practices) - As an Israeli company, NICE is subject to corporate governance practices under **Israeli Companies Law**, including requirements for outside directors and specific committee structures (Internal Audit, Audit, Compensation)[398](index=398&type=chunk)[401](index=401&type=chunk) - The Board has established an **Internal Audit Committee, an Audit Committee, a Compensation Committee, a Nominations Committee, and a Mergers and Acquisitions Committee** to oversee various aspects of corporate governance[400](index=400&type=chunk) [Employees](index=73&type=section&id=Item%206D.%20Employees.) Employee Headcount by Year | Year | Total Employees | | :--- | :--- | | 2024 | 8,726 | | 2023 | 8,384 | | 2022 | 7,926 | - As of December 31, 2024, the company had **8,726 employees**, with the largest concentrations in the **Americas (3,723)** and **APAC (3,457)** regions, and main functional areas being Customer Support (2,994) and R&D (3,070)[426](index=426&type=chunk) [Major Shareholders and Related Party Transactions](index=76&type=section&id=Item%207.%20Major%20Shareholders%20and%20Related%20Party%20Transactions) As of March 16, 2025, the company is not aware of any beneficial owner holding **5% or more** of its outstanding ordinary shares, with approximately **76%** held by ADS holders of record in the United States - As of March 16, 2025, NICE is not aware of any beneficial owner holding **5% or more** of its ordinary shares, with Capital Research Global Investors, a previous 5%+ holder, no longer meeting this threshold[447](index=447&type=chunk) - Approximately **76%** of the company's outstanding ordinary shares are held by ADS holders of record in the United States[448](index=448&type=chunk) [Financial Information](index=77&type=section&id=Item%208.%20Financial%20Information.) This section refers to the consolidated financial statements included in Item 18, noting that legal proceedings are not expected to have a material effect and there are no current plans to pay dividends - The company is involved in various legal proceedings arising from the ordinary course of business but does not believe they will have a material effect on its financial position or results[451](index=451&type=chunk) - NICE has no current plans to make future dividend payments; any potential dividends are at the discretion of the Board of Directors[452](index=452&type=chunk) [Additional Information](index=77&type=section&id=Item%2010.%20Additional%20Information.) This section details the company's corporate structure, governance, and material contracts, including articles of association, fiduciary duties, approval processes, and the terms of its **0% exchangeable senior notes due 2025** [Memorandum and Articles of Association](index=77&type=section&id=Memorandum%20and%20Articles%20of%20Association) - The company is organized under **Israeli Companies Law**, which codifies fiduciary duties (duty of care and loyalty) for office holders and requires disclosure and specific approval processes for transactions involving personal interests[456](index=456&type=chunk)[461](index=461&type=chunk)[462](index=462&type=chunk) - Executive compensation is governed by a Compensation Policy that must be approved by the compensation committee, Board of Directors, and shareholders at least once every **three years**[468](index=468&type=chunk) [Material Contracts](index=84&type=section&id=Material%20Contracts) - The company has **$460 million** in aggregate principal of **0% exchangeable senior notes due September 15, 2025**, with an initial conversion price of approximately **$299.19 per ADS**[495](index=495&type=chunk)[496](index=496&type=chunk)[497](index=497&type=chunk) - The **1.25% exchangeable senior notes** issued in 2017 fully matured on January 15, 2024, and were settled in cash[494](index=494&type=chunk) [Taxation](index=85&type=section&id=Taxation) - As an Israeli company, NICE benefits from reduced tax rates under Israel's "**Special Preferred Technology Enterprise**" and "**Preferred Technology Enterprise**" programs, with tax rates as low as **6% or 12%** on qualifying income[505](index=505&type=chunk)[507](index=507&type=chunk)[509](index=509&type=chunk) - For U.S. holders, dividends paid by NICE are generally expected to be "**qualified dividend income**" taxable at lower capital gains rates, provided holding period requirements are met and the company is not classified as a Passive Foreign Investment Company (PFIC)[537](index=537&type=chunk) - The company does not believe it will be classified as a **PFIC** for the current taxable year, which would subject U.S. holders to adverse tax consequences[546](index=546&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=93&type=section&id=Item%2011.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk.) The company is primarily exposed to market risks from foreign currency exchange rates and interest rate fluctuations, using derivative instruments to hedge against volatility in non-dollar currencies and managing interest rate risk through fixed-rate debt and investment-grade securities - The company is exposed to foreign exchange fluctuations, primarily in **NIS, GBP, EUR, INR, and PHP**, and uses currency forward and option contracts to hedge forecasted non-dollar cash flows[555](index=555&type=chunk) - As of December 31, 2024, the company had outstanding currency forward contracts to hedge payroll and other expenses totaling approximately **$211.13 million**[556](index=556&type=chunk) - Interest rate risk is managed through fixed-rate debt and an investment portfolio of high-grade securities, including **$460 million** in **0% exchangeable senior notes due 2025**[560](index=560&type=chunk)[561](index=561&type=chunk)[563](index=563&type=chunk) PART II [Controls and Procedures](index=98&type=section&id=Item%2015.%20Controls%20and%20Procedures.) Management, including the CEO and CFO, concluded that the company's disclosure controls and procedures and internal control over financial reporting were effective as of December 31, 2024, with an unqualified attestation report from the independent registered public accounting firm - Management, including the CEO and CFO, concluded that the company's disclosure controls and procedures were **effective** as of December 31, 2024[580](index=580&type=chunk) - Based on the **COSO 2013 framework**, management concluded that the company's internal control over financial reporting was **effective** as of December 31, 2024, an assessment attested to by the independent registered public accounting firm[583](index=583&type=chunk)[584](index=584&type=chunk) [Other Information](index=98&type=section&id=Item%2016.%20Other%20Information) This section covers various governance and compliance topics, including audit committee financial experts, the Code of Ethics, fees paid to the principal accountant, share repurchases, insider trading policy, and the comprehensive cybersecurity risk management program overseen by the Board of Directors [Principal Accountant Fees and Services](index=99&type=section&id=Item%2016C.%20Principal%20Accountant%20Fees%20and%20Services.) Fees Paid to Independent Auditors (in thousands) | Service Type | 2024 Fees ($) | 2023 Fees ($) | | :--- | :--- | :--- | | Audit | 1,144 | 1,150 | | Audit-related | 369 | 95 | | Tax | 468 | 438 | | **Total** | **1,981** | **1,683** | [Purchases of Equity Securities by the Issuer and Affiliated Purchasers](index=100&type=section&id=Item%2016E.%20Purchases%20of%20Equity%20Securities%20by%20the%20Issuer%20and%20Affiliated%20Purchasers.) - During 2024, the company repurchased a total of **2,080,635 shares** at a weighted average price of **$177.44 per share**[592](index=592&type=chunk)[593](index=593&type=chunk) - The Board of Directors authorized a **$300 million** share repurchase program in November 2023 (completed in 2024) and an additional **$500 million** program in June 2024[593](index=593&type=chunk) [Cybersecurity](index=101&type=section&id=Item%2016K.%20Cybersecurity) - The company maintains a **Cybersecurity Risk Program** to assess, identify, and manage material risks from cyber threats, overseen by the Corporate VP of Information Security who reports to the CFO[600](index=600&type=chunk)[607](index=607&type=chunk) - The Board of Directors has ultimate oversight of cybersecurity risk management and receives regular updates on threats and the program's status, with the Internal Audit Committee also reviewing cybersecurity risks and controls[608](index=608&type=chunk) - The company holds multiple security certifications, including **ISO 27001, FedRAMP, SOC 2 Type II, and PCI DSS** for relevant business lines, and utilizes third-party experts for threat monitoring and penetration testing[601](index=601&type=chunk)[602](index=602&type=chunk)[603](index=603&type=chunk) PART III [Financial Statements](index=103&type=section&id=Item%2018.%20Financial%20Statements.) This section contains the company's consolidated financial statements for the fiscal year ended December 31, 2024, prepared in accordance with U.S. GAAP, including the Report of Independent Registered Public Accounting Firm and detailed financial statements with notes [Report of Independent Registered Public Accounting Firm](index=106&type=section&id=Report%20of%20Independent%20Registered%20Public%20Accounting%20Firm) - The independent auditor, Kost Forer Gabbay & Kasierer (a member of Ernst & Young Global), issued an **unqualified opinion**, stating that the consolidated financial statements present fairly, in all material respects, the financial position of the company[620](index=620&type=chunk) - The auditor also issued an **unqualified opinion** on the company's internal control over financial reporting as of December 31, 2024, based on the **COSO 2013 framework**[621](index=621&type=chunk)[635](index=635&type=chunk) - Revenue recognition was identified as a **Critical Audit Matter** due to the significant judgments required in accounting for contracts with multiple performance obligations, determining standalone selling prices, and the timing of revenue recognition[626](index=626&type=chunk)[627](index=627&type=chunk)[628](index=628&type=chunk) [Consolidated Financial Statements](index=111&type=section&id=Consolidated%20Financial%20Statements) Consolidated Balance Sheet Highlights (As of Dec 31) | Metric | 2024 ($M) | 2023 ($M) | | :--- | :--- | :--- | | Total Current Assets | 2,504.8 | 2,312.9 | | Goodwill | 1,849.7 | 1,822.0 | | **Total Assets** | **5,295.9** | **5,117.6** | | Total Current Liabilities | 1,474.4 | 1,120.3 | | Total Long-Term Liabilities | 218.3 | 642.8 | | **Total Shareholders' Equity** | **3,603.2** | **3,354.5** | Consolidated Income Statement Highlights (Year Ended Dec 31) | Metric | 2024 ($M) | 2023 ($M) | | :--- | :--- | :--- | | Total Revenue | 2,735.3 | 2,377.5 | | Gross Profit | 1,825.7 | 1,609.3 | | Operating Income | 546.0 | 435.2 | | **Net Income** | **442.6** | **338.3** | | **Diluted EPS ($)** | **6.76** | **5.11** | - During 2024, the company completed two acquisitions for a total consideration of **$68.9 million**, following the acquisition of LiveVox Inc. for **$424.1 million** in December 2023[663](index=663&type=chunk)[669](index=669&type=chunk) - As of December 31, 2024, the company had remaining performance obligations of approximately **$3.07 billion** for contracts with an original duration greater than one year, with the majority expected to be recognized as revenue over the next **24 months**[701](index=701&type=chunk)[702](index=702&type=chunk)

SAN FRANCISCO, March 12, 2025 (GLOBE NEWSWIRE) -- Meltwater, a global leader in media, social and consumer intelligence, today announces a new collaboration with NICE, the world’s leading AI platform for customer service, bringing Meltwater insights to the Contact Center as a Service (CCaaS) market for the first time. Together, Meltwater and NICE will empower enterprises to engage with customers in real time through social media channels to enhance customer interactions, streamline operations, make data-bac ...

Group 1 - The core thesis is that NICE Ltd. is positioned to benefit from the expanding Total Addressable Market (TAM) in the Contact Center industry [1] - The investment strategy focuses on identifying undervalued companies with long-term growth potential, emphasizing a blend of value investing principles [1] - The approach involves purchasing quality companies at a discount to their intrinsic value and holding them for long-term compounding of earnings and shareholder returns [1]

Core Viewpoint - NICE has underperformed in the market, with shares down 25.6% over the past twelve months, contrasting with the Zacks Internet-Software industry's increase of 17.8% and the broader Computer & Technology sector's rise of 13.7% [1][4] Financial Performance - In Q4 2024, NICE reported revenues of $721.6 million, reflecting a 16% year-over-year increase, primarily driven by the strength of its cloud business and customer base expansion [2] - Cloud revenues reached $534 million in Q4 2024, marking a 24% year-over-year increase and accounting for 74% of total revenues [6] - For Q1 2025, NICE anticipates non-GAAP revenues between $693 million and $703 million, indicating a 6% year-over-year growth at the mid-point [10] - For the full year 2025, NICE projects non-GAAP revenues between $2.92 billion and $2.94 billion, implying a 7% year-over-year growth at the mid-point [11] Client Base and Market Position - NICE has seen an increase in large enterprise customers, with over 400 clients generating more than $1 million in annual recurring revenue in Q4 2024 [7] - The company’s partnerships with AT&T and Microsoft have been significant in attracting new customers, particularly the integration of its compliance solutions into the Microsoft Azure Marketplace [9] Competitive Landscape - NICE faces strong competition from players like Five9, Salesforce, and 8X8, which are expanding their portfolios in the customer experience (CX) market [1][14] - Five9's recent launch of AI-driven CX solutions on Google Cloud Marketplace poses a direct challenge to NICE's market position [15] Growth Drivers - NICE's focus on cloud offerings, especially the CXone platform, has been a major growth driver, supported by a growing demand for AI-driven customer service interactions [5][8] - The company expects a 12% year-over-year growth in cloud revenue for 2025 [10] Valuation - NICE shares are currently trading at a forward 12-month price-to-sales ratio of 3.07X, which is below the industry average of 4.52X, indicating that the stock may be undervalued [16] Investment Outlook - The continued growth in NICE's cloud business and AI domain, along with platform innovation and an expanding client base, makes the stock attractive for long-term investors [19]

Core Viewpoint - NICE reported strong financial results for the fourth quarter of 2024, with adjusted earnings and revenues exceeding consensus estimates, driven by growth in its cloud business and customer base expansion [1][2][3]. Financial Performance - Adjusted earnings per share (EPS) for Q4 2024 were $3.02, beating the Zacks Consensus Estimate by 2.03% and increasing 28% year over year [1]. - Non-GAAP revenues reached $721.6 million, surpassing the consensus mark by 1.20% and rising 16% year over year [2]. - Cloud revenues, which constitute 74% of total revenues, amounted to $533.9 million, reflecting a 24% year-over-year increase despite missing the consensus estimate by 0.06% [4]. - Service revenues were $149.7 million, accounting for 20.7% of total revenues, down 7.8% year over year and missing the consensus by 0.98% [4][5]. - Product revenues of $38 million, making up 5.3% of total revenues, exceeded the consensus estimate by 37.61% and increased 19.4% year over year [5]. Market and Growth Drivers - The growth in revenues was primarily attributed to the strength of the cloud business and the expansion of NICE's customer base, with over 400 enterprise cloud customers generating more than $1 million in annual recurring revenue (ARR) [4][6]. - NICE's focus on cloud solutions, particularly the CXone Mpower platform, is enhancing operational efficiency and customer experience [6]. Operating Metrics - Non-GAAP gross margin contracted by 50 basis points to 71.4% [7]. - Operating expenses as a percentage of revenues decreased by 200 basis points year over year to 39.9%, while the non-GAAP operating margin expanded by 150 basis points to 31.5% [8]. Balance Sheet and Cash Flow - As of December 31, 2024, NICE had cash and cash equivalents of $1.62 billion, an increase from $1.52 billion as of September 30, 2024 [9]. - The company allocated $95.2 million for share repurchases in Q4 2024 [10]. Guidance - For Q1 2025, NICE expects non-GAAP revenues between $693 million and $703 million, indicating a 6% year-over-year growth at the midpoint [11]. - For the full year 2025, projected non-GAAP revenues are between $2.92 billion and $2.94 billion, implying a 7% year-over-year growth at the midpoint [11].

This presentation 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, ...

Financial Data and Key Metrics Changes - For Q4 2024, total revenue reached a record $722 million, reflecting a 16% year-over-year growth, primarily driven by strong cloud revenue performance [31][32] - Cloud revenue grew 24% year-over-year to $534 million, representing 74% of total revenue, marking a significant milestone for the company [32][34] - Operating income increased by 22% to $227 million, with an operating margin expansion of 150 basis points to 31.5% [41][42] - Earnings per share (EPS) for Q4 was $3.02, a 28% increase compared to the same quarter last year [42] - Free cash flow for 2024 totaled $733 million, exceeding the target of $700 million [42][43] Business Line Data and Key Metrics Changes - Customer Engagement revenues, which accounted for 83% of total revenue in Q4, increased 14% year-over-year to $596 million, driven by cloud revenue growth [38] - Financial Crime and Compliance revenues, representing 17% of total revenue, grew 24% year-over-year, totaling $126 million [39] - Services revenue decreased year-over-year to $150 million due to the transition of large enterprise on-premise customers to the cloud [34] Market Data and Key Metrics Changes - The Americas region contributed 85% of total revenue in Q4, growing 17% year-over-year [35] - EMEA region represented 10% of total revenue, increasing 11% year-over-year, while APAC region accounted for 5% of total revenue, growing 4% year-over-year [36] Company Strategy and Development Direction - The company aims to capitalize on the growing market for agentic AI, with expectations that by 2028, 33% of enterprise software applications will include agentic AI [24] - NICE plans to enhance its market leadership by expanding the CXone Mpower platform and increasing strategic partnerships to drive growth [26][27] - The focus will be on delivering real-time customer experiences through the integration of AI capabilities with existing solutions [79] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the market's growth potential, particularly in the SaaS and AI sectors, and emphasized the importance of customer experience [116] - The company anticipates a modest 12% growth in cloud revenue for 2025, with a focus on maintaining profitability while investing in innovation [47][48] - Management highlighted the need for transparency in financial disclosures and plans to enhance communication with investors [51][130] Other Important Information - The company repurchased shares totaling $95 million in Q4 and $369 million for the full year 2024, reflecting a 28% increase year-over-year [43] - Total cash and investments at the end of December amounted to $1.622 billion, with debt standing at $450 million [44] Q&A Session Summary Question: Can you provide background on the cloud growth rate and the impact of LiveVox? - Management acknowledged the positive market outlook and the need for transparency in financial disclosures, noting that LiveVox's growth rate has some headwinds factored into guidance [50][51][57] Question: When did the trend of delayed revenue recognition start, and could it reverse? - Management indicated that longer deployment times for large enterprise deals are expected but emphasized ongoing efforts to accelerate revenue recognition [60][64][70] Question: What are the assumptions behind the 12% cloud growth guidance? - Management highlighted seasonality and the gradual ramp-up of large enterprise deals as key factors influencing the guidance [73][115] Question: How does NICE view the balance between investing in AI and driving profitability? - Management expressed confidence in the potential of agentic AI and the importance of investing in customer experience while maintaining profitability [78][84] Question: What is the current status of net retention rate for CXone customers? - Management confirmed that the net retention rate remains healthy and is not expected to deteriorate, with opportunities for expansion in 2025 [126][129]