Core Insights - NICE is experiencing growth due to its strong cloud business, expanding customer base, and AI-driven solutions [1][4] - The company reported cloud revenues of $526.3 million in Q1 2025, a 12% year-over-year increase, contributing to overall revenue growth [2][9] - NICE has expanded its partnership with Salesforce to enhance AI-driven customer experiences through deeper integration [2][3] Financial Performance - For Q2 2025, NICE expects non-GAAP revenues between $709 million and $719 million, indicating a 7% year-over-year growth at the midpoint [7] - Non-GAAP earnings for Q2 are estimated to be between $2.93 and $3.03 per share, suggesting a 13% year-over-year growth at the midpoint [7] - 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 midpoint [8][9] Strategic Partnerships - NICE has extended its partnership with RingCentral to market and sell RingCentral Contact Center powered by NICE CXone Mpower [5] - A strategic collaboration with Snowflake was announced, allowing CXone Mpower to utilize Snowflake Secure Data Sharing for centralized customer interaction data [6] - The company’s diverse portfolio, including solutions like Actimize and CXone, is attracting new customers and enhancing its market position [4]

Financial Data and Key Metrics Changes - Total revenue for Q2 2025 reached $727 million, reflecting a 9% year-over-year increase, driven by a 12% growth in cloud revenue [19][24] - Earnings per share for Q2 were $3.1, a 14% increase compared to the previous year [24] - Cloud revenue contributed $541 million, representing 74% of total revenue, with a net revenue retention (NRR) rate of 111% [19][20] Business Line Data and Key Metrics Changes - Customer Engagement revenue, which accounted for 82% of total revenue, was $597 million, increasing 8% year-over-year [23] - Financial Crime and Compliance revenue, representing 18% of total revenue, grew to $130 million, a 19% increase year-over-year [23] - AI and self-service annual recurring revenue (ARR) grew 42% year-over-year to $238 million, now constituting 11% of cloud revenue [19][20] Market Data and Key Metrics Changes - EMEA revenue increased 115% on a constant currency basis year-over-year, while APAC revenue rose 17% [21][22] - International revenue contribution increased 13% year-over-year, with significant growth opportunities in underpenetrated markets [22] Company Strategy and Development Direction - The company is focused on leading the AI transformation in customer experience, with a commitment to integrating AI capabilities into its CXone mPOWER platform [6][11] - Strategic partnerships with industry leaders like ServiceNow, AWS, and Salesforce are emphasized to enhance market presence and capabilities [13][17] - The acquisition of Cognigy is expected to further strengthen AI capabilities and customer experience offerings [16][18] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving a 12% growth target for cloud revenue for the full year, despite some short-term challenges with LiveVox [32][60] - The company anticipates continued strong performance in AI and self-service solutions, contributing to overall growth [20][27] - Management highlighted the importance of maintaining profitability while investing in growth initiatives [24][27] Other Important Information - The company plans to hold a Capital Markets Day in October to provide further insights into future financial targets and the Cognigy acquisition [18][27] - Total cash and investments stood at $1.632 billion, with total debt at $460 million, resulting in a net cash position of $1.2 billion [25] Q&A Session Summary Question: Investment levels and operating margins - Management indicated that investments in cloud infrastructure are intentional to drive growth, with expectations of a 50 basis point increase in operating margins year-over-year [30][31] Question: Confidence in cloud growth target - Management reiterated confidence in achieving the 12% growth target for cloud revenue, citing solid performance in the first half of the year [32][60] Question: Cloud gross margin outlook - Management acknowledged that cloud gross margins were slightly below 70% due to AI investments but expect to see improvements in the second half of the year [39][41] Question: LiveVox underperformance - Management noted that LiveVox experienced higher-than-expected churn, impacting overall growth, but remains optimistic about its long-term potential [51][53] Question: Large deal pipeline - Management confirmed a strong pipeline of large deals, indicating continued demand for their solutions in the enterprise segment [61][62] Question: AI migration demand - Management observed an increased demand for cloud solutions that leverage AI capabilities, indicating a shift in customer evaluation criteria [68][70] Question: Customer expectations on agent growth - Management reported that customers are leveraging AI capabilities while maintaining a balance with human agents, with no significant shifts in agent numbers anticipated [74][75] Question: Seasonality expectations - Management does not foresee any softness in seasonality for Q4, maintaining a diversified customer base across multiple verticals [95][96]

Financial Data and Key Metrics Changes - Total revenue for Q2 2025 reached $727 million, reflecting a 9% year-over-year increase, driven by a 12% growth in the cloud business [5][20] - Earnings per share for Q2 were $3.1, a 14% increase compared to the previous year [27] - Cloud revenue contributed $541 million, representing 74% of total revenue, with a net revenue retention (NRR) of 111% [20][21] Business Line Data and Key Metrics Changes - Customer Engagement revenue, which accounted for 82% of total revenue, increased by 8% year-over-year to $597 million [26] - Financial Crime and Compliance revenue, representing 18% of total revenue, grew by 19% year-over-year to $130 million [26] - AI and self-service annual recurring revenue (ARR) grew by 42% year-over-year to $238 million, now constituting 11% of cloud revenue [20][21] Market Data and Key Metrics Changes - International revenue increased by 13% year-over-year, with EMEA revenue up 111% on a constant currency basis [24][25] - APAC revenue grew by 17% year-over-year, also on a constant currency basis [25] - The company secured significant contracts, including a landmark agreement with the Department of Work and Pensions valued over $100 million [15] Company Strategy and Development Direction - The company is focused on leading the AI transformation in customer experience, emphasizing the integration of AI capabilities into its CXone mPOWER platform [5][10] - Strategic partnerships with industry leaders like ServiceNow, AWS, and Salesforce are being leveraged to enhance market presence and product offerings [12][18] - The acquisition of Cognigy is expected to further strengthen AI capabilities and customer engagement solutions [17][30] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving a 12% growth target for cloud revenue for the full year, despite some short-term challenges with LiveVox [34][61] - The company anticipates continued strong performance in AI and self-service solutions, which are expected to drive future growth [5][21] - Management highlighted the importance of maintaining operational rigor while investing in growth opportunities [18][27] Other Important Information - The company repurchased shares totaling $31 million in Q2, maintaining a robust balance sheet with total cash and investments of $1.632 billion [27][28] - The planned acquisition of Cognigy is expected to close in 2025, pending regulatory approval [29][30] Q&A Session Summary Question: How is the company thinking about the level of investment and operating margins? - Management indicated that investments are focused on international expansion and cloud growth, expecting a 50 basis point increase in operating margins year-over-year [32][33] Question: What gives confidence in the 12% growth target for cloud revenue? - Management noted solid performance in Q1 and Q2, with expectations to maintain the 12% growth in Q3, despite some challenges with LiveVox [34][61] Question: Can you elaborate on the renewed partnership with RingCentral? - The partnership renewal was seen as beneficial for both companies, leveraging strengths in CCaaS and UCaaS to provide integrated solutions for customers [47][51] Question: What is causing the underperformance in LiveVox? - Management cited higher-than-expected churn in LiveVox's customer base, leading to dilution in organic growth [52][53] Question: Are there any signs of softness in the fourth quarter? - Management stated they do not see signs of softness and expect continued strong performance across a diversified customer base [95][96] Question: What is the outlook for large deals in the pipeline? - Management confirmed a strong pipeline of large deals, indicating ongoing demand for integrated AI capabilities in customer experience solutions [64][66]

Financial Performance & Market Position - NiCE boasts over $2.8 billion in total revenue[10] - The company has $2.5 billion in recurring revenue[10] - NiCE's cloud revenue exceeds $2.1 billion[10] - Cash from operations amounts to $755 million[10] Customer & Partner Ecosystem - NiCE serves over 3,300 customers[10] - The company has a broad partner ecosystem with over 400 global CX partners[32] - Partners are involved in 75% of NiCE's wins[32] - NiCE has over 85% Fortune 100 customers[10] Product & Technology Leadership - NiCE is recognized as a leader in the Contact Center as a Service (CCaaS) market by Gartner and Forrester[26, 29] - NiCE Actimize is a market leader in Enterprise Fraud Management Solutions, according to Forrester[49] - NiCE's Evidencentral is recognized as a leading Public Safety & Justice AI Cloud Platform[64]

Core Viewpoint - Analysts project that Nice (NICE) will report quarterly earnings of $2.99 per share, reflecting a year-over-year increase of 13.3%, with revenues expected to reach $713.92 million, a 7.5% increase from the same quarter last year [1]. Earnings Projections - The consensus EPS estimate has been revised downward by 0.2% in the past 30 days, indicating a reassessment by covering analysts [2]. - Changes in earnings projections are crucial for predicting investor reactions, as empirical studies show a strong correlation between earnings estimate trends and short-term stock price movements [3]. Revenue Estimates - Analysts expect 'Revenue by Business Model- Cloud' to be $539.96 million, indicating a year-over-year change of +12.1% [5]. - The estimated 'Revenue by Business Model- Services' is projected at $142.15 million, reflecting a year-over-year decline of -3.7% [5]. - 'Revenue by Business Model- Product' is anticipated to be $31.80 million, suggesting a year-over-year decrease of -9.4% [5]. Geographic Revenue Projections - 'Geographic Revenues- Americas' are expected to reach $603.87 million, showing a year-over-year increase of +7.5% [6]. - 'Geographic Revenues- Asia Pacific' is projected at $39.19 million, indicating a significant year-over-year increase of +18.7% [6]. - 'Geographic Revenues- EMEA' is estimated to be $72.11 million, reflecting a year-over-year change of +3% [6]. Stock Performance - Over the past month, shares of Nice have decreased by -4%, while the Zacks S&P 500 composite has increased by +2.7% [7]. - Nice currently holds a Zacks Rank 3 (Hold), suggesting its performance may align with the overall market in the near future [7].

Industry Overview - Internet stocks are benefiting from the ongoing digitalization wave, which is driving rapid adoption of AI and cloud computing [1] - The deployment of standalone 5G networks and AI-powered services is increasing the usage of social media platforms, digital advertising, online delivery models, streaming, and e-commerce growth [2] - Despite macroeconomic challenges, these factors are expected to positively impact Internet stocks during the earnings season [2] Company Earnings Insights - Four Internet stocks, Globant (GLOB), NICE (NICE), Affirm Holdings (AFRM), and Bill Holdings (BILL), are well-positioned to exceed earnings estimates this season [3] - Meta Platforms reported a 5% increase in ad conversions on Instagram and 3% on Facebook due to its new AI-powered recommendation model [5] - Microsoft’s AI assistants have reached 100 million monthly active users, and Alphabet is enhancing user experience through AI in its Search features [6] - Amazon's advertising business grew 23% year-over-year to $15.69 billion, attributed to successful AI-powered optimization [7] Company-Specific Projections - Globant expects revenues of at least $612 million for Q2 2025, reflecting a 4.2% year-over-year growth, with earnings estimated at $1.52 per share [12][13] - NICE anticipates non-GAAP revenues of $709-$719 million for Q2 2025, indicating 7% year-over-year growth, with earnings projected between $2.93 and $3.03 per share [15][16] - Affirm Holdings forecasts GMV between $9.4 billion and $9.7 billion for Q4 fiscal 2025, with revenues expected to be between $815 million and $845 million [17] - BILL Holdings expects revenues between $370.5 million and $380.5 million for Q4 fiscal 2025, suggesting year-over-year growth of 8-11% [19][20]

Company Performance - Nice closed at $155.82, with a +2.1% increase from the previous day, outperforming the S&P 500's gain of 1.47% [1] - Prior to this trading session, Nice shares had decreased by 10.33%, lagging behind the Computer and Technology sector's gain of 3.41% and the S&P 500's gain of 0.64% [1] Upcoming Earnings Report - Nice is scheduled to release its earnings on August 14, 2025, with an expected EPS of $2.99, reflecting a 13.26% increase from the same quarter last year [2] - The Zacks Consensus Estimate for revenue is projected at $713.93 million, which is a 7.46% increase from the previous year [2] Full-Year Estimates - The full-year Zacks Consensus Estimates for Nice indicate earnings of $12.38 per share and revenue of $2.93 billion, representing year-over-year changes of +11.33% and +7.06%, respectively [3] - Recent analyst estimate revisions suggest optimism regarding Nice's business and profitability [3] Valuation Metrics - Nice is currently trading at a Forward P/E ratio of 12.33, significantly lower than the industry average of 27.5, indicating a discount [6] - The company has a PEG ratio of 1.12, compared to the Internet - Software industry's average PEG ratio of 2.23, suggesting favorable valuation relative to growth expectations [7] Industry Context - The Internet - Software industry, part of the Computer and Technology sector, has a Zacks Industry Rank of 79, placing it in the top 32% of over 250 industries [8] - Research indicates that the top 50% rated industries outperform the bottom half by a factor of 2 to 1 [8]

Company Performance - Nice (NICE) closed at $163.99, reflecting a -3.74% change from the previous day, which is less than the S&P 500's daily loss of 0.3% [1] - Over the past month, shares of Nice gained 0.86%, underperforming compared to the Computer and Technology sector's gain of 4.85% and the S&P 500's gain of 3.64% [1] Upcoming Earnings - Nice is expected to report an EPS of $2.99, representing a 13.26% increase from the same quarter last year, with anticipated revenue of $713.93 million, indicating a 7.46% increase [2] - For the annual period, the Zacks Consensus Estimates predict earnings of $12.37 per share and revenue of $2.93 billion, reflecting increases of +11.24% and +7% respectively from the previous year [3] Analyst Revisions and Ratings - Recent revisions to analyst forecasts for Nice are crucial as they indicate changing business trends, with positive revisions suggesting analysts' confidence in the company's performance [3] - Nice currently holds a Zacks Rank of 2 (Buy), with the Zacks Rank system showing a strong track record of exceeding expectations [5] Valuation Metrics - Nice has a Forward P/E ratio of 13.77, significantly lower than the industry average of 29.27, indicating it is trading at a discount [6] - The company has a PEG ratio of 1.25, compared to the industry average PEG ratio of 2.21, suggesting favorable growth expectations relative to its valuation [6] Industry Context - The Internet - Software industry, part of the Computer and Technology sector, has a Zacks Industry Rank of 72, placing it in the top 30% of over 250 industries [7] - Research indicates that industries in the top 50% rated by Zacks outperform those in the bottom half by a factor of 2 to 1 [7]

Company Overview - Nice (NICE) shares increased by 4.9% to close at $170.37, supported by strong trading volume, contrasting with a 1.6% loss over the past four weeks [1] - The company is experiencing growth due to the strength of its cloud business, an expanding customer base, and AI-powered solutions [1] Earnings Expectations - Nice is projected to report quarterly earnings of $2.99 per share, reflecting a year-over-year increase of 13.3% [2] - Expected revenues for the upcoming quarter are $713.93 million, which is a 7.5% increase compared to the same quarter last year [2] Stock Performance Insights - The consensus EPS estimate for Nice has remained unchanged over the last 30 days, indicating that stock price movements may not sustain without trends in earnings estimate revisions [3] - Nice currently holds a Zacks Rank of 2 (Buy), suggesting positive sentiment towards the stock [3] Industry Comparison - Nice is part of the Zacks Internet - Software industry, where another company, Vertex (VERX), saw a 0.9% decline in its last trading session and has returned -0.8% over the past month [3] - Vertex's consensus EPS estimate has also remained unchanged at $0.14, representing a 6.7% decrease from the previous year, and it holds a Zacks Rank of 3 (Hold) [4]

Summary of NICE's Acquisition of Cognigy Conference Call Company and Industry - **Company**: NICE (NICE) - **Acquisition Target**: Cognigy - **Industry**: Customer Experience (CX) and Artificial Intelligence (AI) Key Points and Arguments 1. **Acquisition Announcement**: NICE announced the acquisition of Cognigy, a leader in conversational AI for customer service, which is seen as a transformational move for both companies [2][4] 2. **Market Positioning**: The acquisition strengthens NICE's position in the rapidly expanding AI market, projected to reach $330 billion in the coming years [6] 3. **AI Capabilities**: Cognigy's advanced AI capabilities will enhance NICE's existing customer experience AI platform, allowing for seamless AI-led customer interactions [5][11] 4. **Growth Projections**: Cognigy's exit Annual Recurring Revenue (ARR) for 2026 is expected to grow over 80% year-over-year to an estimated $85 million [18][19] 5. **Transaction Value**: The acquisition is valued at approximately $955 million, financed with cash on hand, without the need for additional debt or equity [19][21] 6. **Financial Impact**: NICE expects the acquisition to be accretive to earnings per share (EPS) and free cash flow within 18 months [21][22] 7. **Integration Timeline**: The integration of Cognigy's technology into NICE's platform is expected to be relatively quick, leveraging existing partnerships [28][29] 8. **Customer Overlap**: Cognigy currently services around 1,000 brands, with significant opportunities for cross-selling into NICE's existing customer base [63] 9. **AI Market Opportunity**: The self-service resolution gap in customer interactions presents a significant market opportunity, with AI currently resolving only 5% of customer interactions [11][61] 10. **Retention Plans**: NICE has a retention plan in place to keep key Cognigy employees post-acquisition, ensuring continuity and innovation [20][72] Additional Important Content 1. **Open Platform Strategy**: NICE's CXone Empower platform remains open, allowing for integration with other technologies, ensuring flexibility for customers [26][55] 2. **Cultural Fit**: Cognigy is recognized for its strong cultural alignment with NICE, which is expected to facilitate a smooth integration [47][72] 3. **Future Growth**: NICE anticipates a cumulative increase in cloud revenue growth of 150 to 250 basis points annually due to the acquisition [19][22] 4. **Regulatory Approvals**: The deal is subject to regulatory approvals in Germany and the U.S., with expectations for closure in Q4 2025 [22] 5. **Customer Experience Focus**: The combined capabilities of NICE and Cognigy aim to deliver a more human-like, seamless customer experience across various channels [9][60] This summary encapsulates the critical aspects of the conference call regarding NICE's acquisition of Cognigy, highlighting the strategic importance, financial implications, and future growth potential in the AI-driven customer experience market.