Core Insights - Nice reported revenue of $700.19 million for the quarter ended March 2025, reflecting a year-over-year increase of 6.2% and a slight surprise of +0.12% over the Zacks Consensus Estimate of $699.39 million [1] - The earnings per share (EPS) for the quarter was $2.87, up from $2.58 in the same quarter last year, with an EPS surprise of +1.06% compared to the consensus estimate of $2.84 [1] Revenue Breakdown - Cloud revenue was $526.32 million, slightly below the average estimate of $527.48 million, but showed a year-over-year increase of 12.4% [4] - Services revenue totaled $140.20 million, which was lower than the estimated $140.83 million, representing a decline of 5.9% year-over-year [4] - Product revenue reached $33.67 million, exceeding the average estimate of $31.08 million, but this figure marked a significant year-over-year decrease of 19.8% [4] Stock Performance - Nice's shares have returned +12.5% over the past month, outperforming the Zacks S&P 500 composite's +9% change [3] - The stock currently holds a Zacks Rank 4 (Sell), indicating potential underperformance relative to the broader market in the near term [3]

Financial Data and Key Metrics Changes - Total revenue for Q1 2025 was CAD 700 million, reflecting a 6% year-over-year increase [7][24] - Cloud revenue increased by 12% year-over-year to CAD 527 million, now representing 75% of total revenue [8][24] - Operating margin expanded by 20 basis points to 30.5%, with earnings per share reaching CAD 2.87, an 11% increase compared to the previous year [8][33] - Operating cash flow rose by 12% year-over-year to AUD 285 million, with free cash flow increasing by 16% year-over-year to CAD 264 million [8][34] Business Line Data and Key Metrics Changes - Customer engagement revenue, which accounted for 85% of total revenue, was CAD 592 million, up 7% year-over-year [30] - Financial crime and compliance revenue, representing 15% of total revenue, totaled CAD 108 million, meeting expectations [30] - The annual recurring revenue from CX AI and self-service solutions exceeded CAD 200 million, marking a 39% year-over-year increase [26] Market Data and Key Metrics Changes - The Americas region, which represented 84% of total revenue, grew by 6% year-over-year, while EMEA and APAC regions saw increases of 109% year-over-year [28] - 50% of international revenue now comes from cloud solutions, indicating a significant shift towards cloud adoption in less penetrated markets [28] Company Strategy and Development Direction - The company is focused on strategic partnerships, including collaborations with ServiceNow and AWS, to enhance customer experience and drive growth [12][61] - The transition from legacy systems to cloud solutions is a priority, with a commitment to cloud-first strategies [28] - The company aims to leverage AI-driven solutions to automate workflows and improve customer service [15][66] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's growth trajectory, citing strong customer demand for AI and cloud solutions [35][96] - The company anticipates continued growth in cloud revenue, reaffirming a 12% growth target for the year [37][83] - Management noted that the current macroeconomic environment has not significantly impacted their outlook, with a strong pipeline of deals [96] Other Important Information - The company executed its largest quarterly share buyback in history, totaling CAD 252 million, reflecting confidence in its long-term strategy [9][34] - Total cash and investments at the end of March amounted to CAD 1.611 billion, with a debt of CAD 459 million [34] Q&A Session Summary Question: What are the reasons for the quarter-on-quarter step down in cloud revenue? - Management indicated that the cloud revenue performance was in line with expectations, with some seasonal effects from the previous quarter [41] Question: When will the strategic partnerships start showing dividends? - Management expects customer conversations to turn into growth opportunities in the coming quarters as partnerships are leveraged [42] Question: Is the AI and self-service adoption incremental or cannibalizing existing spend? - Management confirmed that AI-based usage is largely incremental, with no material change in seat base revenue [47] Question: How do the NICE and ServiceNow platforms complement each other? - The partnership allows for a unified solution that enhances customer service efficiency without significant overlap [54] Question: What is the impact of the recent macroeconomic changes on the business? - Management noted that there is no significant impact on the pipeline or outlook, with enterprises eager to invest in customer experience [96] Question: How is the company addressing delays in large customer deployments? - The company has made investments to improve service capacity and is seeing improvements in deployment timelines [70] Question: What is the expected revenue contribution from large deals? - Revenue from large deals is expected to gradually contribute starting in early 2026, with confidence in achieving 12% cloud growth this year [82][83]

Financial Data and Key Metrics Changes - Total revenue for Q1 2025 was CAD 700 million, reflecting a 6% year-over-year increase [22] - Cloud revenue increased by 12% year-over-year to CAD 527 million, now representing 75% of total revenue [22][6] - Operating margin expanded by 20 basis points to 30.5%, with earnings per share reaching CAD 2.87, an 11% increase from the previous year [6][29] - Operating cash flow rose by 12% year-over-year to AUD 285 million, marking a strong cash generation performance [6][30] Business Line Data and Key Metrics Changes - Customer engagement revenue, which accounted for 85% of total revenue, was CAD 592 million, up 7% year-over-year [27] - Financial crime and compliance revenue, representing 15% of total revenue, totaled CAD 108 million, meeting expectations [27] - The annual recurring revenue from CX AI and self-service solutions exceeded CAD 200 million, a 39% year-over-year increase [23] Market Data and Key Metrics Changes - The Americas region, which represented 84% of total revenue, grew by 6% year-over-year [25] - EMEA and APAC regions, which represented 11% of total revenue, increased by 109% year-over-year, driven by strong cloud revenue growth [25] - 50% of international revenue now comes from cloud solutions, indicating a significant shift towards cloud adoption [25] Company Strategy and Development Direction - The company is focused on a cloud-first strategy, emphasizing the transition from legacy systems to cloud solutions [25] - Strategic partnerships with ServiceNow and AWS are aimed at enhancing customer experience and driving future growth [11][12] - The company is committed to AI-driven customer experience, with CXone mPOWER positioned as a leading platform for automation and workflow orchestration [14][15] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's strong start to the year and the ongoing strength of the business [30] - The company anticipates continued growth in cloud revenue, reaffirming a 12% growth target for the year [33] - Management highlighted the importance of AI in transforming customer interactions and the need for a unified platform to enhance customer experiences [17][62] Other Important Information - The company executed its largest quarterly share buyback in history, totaling CAD 252 million, reflecting confidence in its long-term strategy [30] - Total cash and investments at the end of March were CAD 1.611 billion, with net cash of CAD 1.2 billion after accounting for debt [30] Q&A Session Summary Question: What are the reasons for the quarter-on-quarter step down in cloud revenue? - Management noted that the cloud revenue growth was in line with expectations, with some seasonal effects from the previous quarter impacting results [35][36] Question: When will the strategic partnerships start showing dividends? - Management indicated that customer feedback on partnerships is positive, and growth opportunities are expected to materialize in the coming quarters [37] Question: Is the AI and self-service revenue incremental or cannibalizing existing spend? - Management confirmed that AI-based usage is largely incremental, with no material change in seat base revenue [42][43] Question: How does NICE's AI strategy differentiate from competitors? - Management emphasized the foundational models and extensive data NICE has built, which sets it apart in the market [53][54] Question: What is the impact of the recent news regarding AI adoption in Florida? - Management reiterated the importance of coexistence between AI and human agents, noting that customers are increasingly looking for integrated solutions [59][62] Question: What improvements have been made regarding large customer deployments? - Management highlighted investments in service capacity and partnerships to expedite large-scale enterprise deployments [67][68]

Company Overview - NICE serves over 25,000 customers across various industries[9] - The company boasts a significant global presence, operating in over 150 countries[9] - NICE has a substantial R&D workforce, with over 3,300 professionals[9] Financial Highlights - Cloud Revenue reached $2 billion[9] - Total Revenue amounted to $2.8 billion[9] - Recurring Revenue stands at $2.5 billion[9] - Cash from Operations is $863 million[9] Customer Experience (CX) - NICE CXone is recognized as a market leader in the CCaaS platform space[39] - The company serves a large portion of the Fortune 100, with over 85% as customers[9, 46] - Only 24% of CCaaS transition complete[45] - Only 5% of interactions are contained with Conversational AI today[45] Financial Crime & Compliance - Financial crime represents 2%-5% of Global GDP[66] - NICE Actimize is recognized as a market leader in Anti-Money Laundering (AML) solutions[58, 60] - The company provides end-to-end financial crime risk management coverage[67] - Digital fraud losses 2023-27 $350B Globally[51] Public Safety & Justice - NICE is a leader in providing incident intelligence and digital evidence management solutions[86] - The company serves a significant portion of the US and Canadian cities, with 85% as customers[84] - NICE delivers digital transformation and analytics to over 3,000 agencies[87]

Company Performance - Nice (NICE) closed at $156.04, with a slight increase of +0.12% from the previous session, underperforming the S&P 500 which gained 0.63% [1] - Over the past month, shares of Nice have decreased by 1.17%, while the Computer and Technology sector gained 1.66% [1] Upcoming Financial Results - The upcoming earnings report is expected to show an EPS of $2.84, reflecting a 10.08% increase year-over-year [2] - Revenue is projected at $699.39 million, up 6.08% from the same quarter last year [2] Annual Estimates - For the annual period, earnings are anticipated to be $12.17 per share, a rise of +9.44% from the previous year, with revenue expected to reach $2.92 billion, indicating a +6.66% increase [3] Analyst Estimates and Stock Performance - Recent changes in analyst estimates are crucial as they often indicate short-term business trends, with positive revisions suggesting optimism about the company's outlook [3][4] - The Zacks Rank system, which reflects these estimate changes, currently ranks Nice at 3 (Hold) [5] Valuation Metrics - Nice has a Forward P/E ratio of 12.8, which is a discount compared to the industry average of 26.31 [6] - The PEG ratio for Nice stands at 1.19, while the Internet - Software industry has an average PEG ratio of 2.16 [6] Industry Context - The Internet - Software industry is part of the Computer and Technology sector, currently holding a Zacks Industry Rank of 141, placing it in the bottom 43% of over 250 industries [7] - Historically, the top 50% rated industries outperform the bottom half by a factor of 2 to 1 [7]

Company Performance - Nice (NICE) closed at $155.09, with a slight increase of +0.37% from the previous session, underperforming the S&P 500 which gained 0.74% [1] - Over the past month, Nice's shares have decreased by 2.71%, compared to a 6.23% loss in the Computer and Technology sector and a 4.77% loss in the S&P 500 [1] Earnings Expectations - Analysts expect Nice to report earnings of $2.84 per share, reflecting a year-over-year growth of 10.08%, with revenue projected at $699.39 million, a 6.08% increase from the same quarter last year [2] - For the full year, earnings are projected at $12.17 per share and revenue at $2.92 billion, indicating increases of +9.44% and +6.66% respectively from the previous year [3] Analyst Estimates and Valuation - Recent adjustments to analyst estimates for Nice are crucial as they reflect near-term business trends, with positive revisions indicating a favorable outlook on the company's health and profitability [3] - Nice has a Forward P/E ratio of 12.69, which is a discount compared to the industry average of 25.94, and a PEG ratio of 1.18, compared to the industry average PEG ratio of 2.13 [6] Industry Context - The Internet - Software industry, which includes Nice, has a Zacks Industry Rank of 87, placing it in the top 36% of over 250 industries, indicating strong performance potential [7]

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)