NICE(NICE) - 2025 Q3 - Earnings Call Transcript

Financial Data and Key Metrics Changes - Total revenue for Q3 2025 was $732 million, a 6% year-over-year increase, at the high end of guidance [15][22] - Cloud revenue reached $563 million, up 13% year-over-year, representing 77% of total revenue [15][20] - Adjusted earnings per share for Q3 were $3.18, a 10% increase compared to the previous year [20] - Cash flow from operations was $191 million, reflecting a 20% year-over-year increase [21] Business Line Data and Key Metrics Changes - Customer engagement revenue, which accounted for 84% of total revenue, was $613 million, increasing 6% year-over-year [19] - Financial crime and compliance revenue, representing 16% of total revenue, totaled $119 million, up 7% year-over-year [19] - Annual recurring revenue (ARR) from AI and self-service offerings accelerated to 49% year-over-year [6][16] Market Data and Key Metrics Changes - The Americas region contributed 84% of revenue, with a 5% year-over-year increase [17] - EMEA revenue increased by 7% year-over-year, while APAC revenue grew by 19% year-over-year, leading to an 11% increase in international revenue [18] - Cloud net revenue retention (NRR) for the trailing 12 months was 109% [16] Company Strategy and Development Direction - The company is focused on an AI-first strategy, with significant momentum in cloud and AI bookings [5][12] - The acquisition of NICE Cognigy is expected to enhance AI and self-service growth trajectories [15][24] - The company aims to lead the AI revolution in customer experience (CX) and expand its international presence [12][22] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the ongoing demand for AI solutions and the transformation of customer engagement [10][12] - The company anticipates continued growth in cloud revenue and a positive impact from the Cognigy acquisition [24][49] - Management highlighted the importance of maintaining financial strength while investing in growth opportunities [22][23] Other Important Information - The company will hold a Capital Markets Day on November 17, 2025, to discuss long-term strategy and financial outlook [13][81] - The company ended the quarter debt-free with total cash and short-term investments of $456 million [22] Q&A Session Summary Question: What is the expected Q4 revenue contribution from Cognigy? - Management indicated that Cognigy contributed approximately 50 basis points to cloud revenue growth in Q3 and is expected to add about 150 basis points in Q4 [27][28] Question: How is Cognigy positioned in terms of go-to-market strategy? - Cognigy will pursue the CX market independently of NICE's CCAS platform, targeting companies lacking integrated solutions [28] Question: What are the competitive dynamics in the market, especially with new entrants? - Management acknowledged the growing competition but emphasized Cognigy's established market leadership and ease of adoption [33][34] Question: How is the renewed partnership with RingCentral impacting pipeline velocity? - Management noted strong collaboration with RingCentral, leading to increased confidence and growth expectations [39][40] Question: What is the outlook for net revenue retention (NRR)? - Management expects stabilization in NRR and positive inflection moving forward, supported by strong cross-sell and upsell efforts [64][67] Question: How is the company addressing competitive pressures in the Actimize business? - Management highlighted Actimize's strong market position and ongoing demand due to regulatory compliance needs [77][78]