NICE Q3 Earnings Beat Estimates on Strong Cloud Revenues, Shares Down

Core Insights - NICE reported adjusted earnings of $3.18 per share for Q3 2025, exceeding the Zacks Consensus Estimate by 0.32% and reflecting a 10% year-over-year increase [1] - Non-GAAP revenues reached $732 million, surpassing the consensus mark by 0.56% and increasing 6% year over year, primarily driven by the strength of its cloud business and customer base expansion [1][8] Revenue Breakdown - Revenues in the Americas were $618 million, up 5% year over year; EMEA revenues were $74 million, up 7% year over year; APAC revenues increased 19% year over year to $40 million [2] - Cloud revenues constituted 76.9% of total revenues at $562.9 million, beating the Zacks Consensus Estimate by 0.64% and rising 13% year over year [3] - Service revenues accounted for 18.9% of total revenues at $138.7 million, missing the consensus mark by 0.40% and declining 7.4% year over year [3] - Product revenues made up 4.1% of total revenues at $30.4 million, exceeding the consensus mark by 3.55% but decreasing 24.1% year over year [4] Operating Performance - Non-GAAP gross margin contracted 120 basis points to 69.9% in the reported quarter [5] - Research and development expenses as a percentage of revenues decreased 90 basis points year over year to 12.4% [5] - Non-GAAP operating margin contracted 50 basis points year over year to 31.5% [6] - Non-GAAP EBITDA margin contracted 40 basis points to 34.7% [6] Cash Flow and Balance Sheet - As of September 30, 2025, NICE had cash and cash equivalents of $455.9 million, down from $1.63 billion as of June 30, 2025 [9] - Cash flow from operations in Q3 was $190.5 million compared to $61.32 million in the prior quarter [9] - $40.6 million was allocated for share repurchase in Q3 2025 [9] Future Guidance - NICE projects non-GAAP revenues between $2.93 billion and $2.94 billion for the full year 2025, implying 7% year-over-year growth at the midpoint [10] - Non-GAAP earnings are estimated to be between $12.18 and $12.32 per share, suggesting 10% year-over-year growth at the midpoint [10]