Annualized Cloud Revenue Run Rate Surpasses
$800 Million
Q3 Cash Flow From Operations Increased 20%
to $99 Million
NICE (NASDAQ: NICE) today announced results for the third quarter
ended September 30, 2020.
Third Quarter 2020 Financial Highlights
GAAP
Non-GAAP
Cloud
revenue of $202 million, growth of 34% year-over-year
Cloud
revenue of $204 million, growth of 35% year-over-year
Total
revenue of $410 million, growth of 6% year-over-year
Total
revenue of $412 million, growth of 7% year-over-year
Gross
margin of 65.8% compared to 65.7% last year
Gross
margin of 71.0% compared to 70.9% last year
Cloud
gross margin of 56.6% compared to 51.6% last year
Cloud
gross margin of 65.6% compared to 61.9% last year
Operating income of $62 million compared to
$56 million last year, an increase of 11%
Operating income of $117 million compared to
$106 million last year, an increase of 10%
Operating margin of 15.1% compared to 14.4%
last year
Operating margin of 28.3% compared to 27.4%
last year
Diluted
EPS of $0.76 versus $0.69 last year, 10% growth
year-over-year
Diluted
EPS of $1.41 versus $1.30 last year, 8% growth
year-over-year
Operating cash flow of $99 million compared
to $82 million last year
“We are pleased to report a very strong third quarter driven by
continued rapid acceleration in our cloud business,” said Barak
Eilam, CEO, NICE. “Cloud grew a record 35 percent and now
represents 50 percent of our total revenue, which is a major
milestone for NICE. We achieved 10 percent sequential growth in the
cloud compared to the second quarter of this year, and we already
surpassed the more than 800 million dollar cloud revenue run rate
that we had originally expected by the end of the year.”
Mr. Eilam continued, “The acceleration in our cloud growth is
being driven by several factors, including substantial growth in
new customers, rapid adoption by large enterprises, new verticals
that are embracing remote service and digital transformation that
has become front and center for organizations of all sizes. We
witnessed an increase of over 50 percent in new customers compared
to the same quarter last year. Additionally, we saw a 91 percent
sequential increase in digital volumes for CXone, and a 154 percent
increase year-over-year, confirming the strength of our leadership
in digital.”
GAAP Financial Highlights for the Third Quarter Ended
September 30:
Revenues: Third quarter 2020 total revenues increased
6.1% to $409.8 million compared to $386.3 million for the third
quarter of 2019.
Gross Profit: Third quarter 2020 gross profit and gross
margin increased to $269.7 million and 65.8%, respectively,
compared to $253.6 million and 65.7%, respectively, for the third
quarter of 2019.
Operating Income: Third quarter 2020 operating income and
operating margin increased to $62.0 million and 15.1%,
respectively, compared to $55.7 million and 14.4%, respectively,
for the third quarter of 2019.
Net Income: Third quarter 2020 net income and net income
margin increased to $50.7 million and 12.4%, respectively, compared
to $45.0 million and 11.7%, respectively, for the third quarter of
2019.
Fully Diluted Earnings Per Share: Fully diluted earnings
per share for the third quarter of 2020 increased 10.1% to $0.76,
compared to $0.69 in the third quarter of 2019.
Operating Cash Flow and Cash Balance: Third quarter 2020
operating cash flow was $99.0 million. As of September 30, 2020,
total cash and cash equivalents, short term investments were
$1,542.5 million, and total debt was $891.3 million.
Non-GAAP Financial Highlights for the Third Quarter Ended
September 30:
Revenues: Third quarter 2020 non-GAAP total revenues
increased to $412.4 million, up 6.5% from $387.1 million for the
third quarter of 2019.
Gross Profit: Third quarter 2020 non-GAAP gross profit
and gross margin increased to $292.9 million and 71.0%,
respectively, from $274.4 million and 70.9%, respectively for the
third quarter of 2019.
Operating Income: Third quarter 2020 non-GAAP operating
income and non-GAAP operating margin increased to $116.8 million
and 28.3%, respectively, from $105.9 million and 27.4%,
respectively, for the third quarter of 2019.
Net Income: Third quarter 2020 non-GAAP net income and
non-GAAP net income margin increased to $93.6 million and 22.7%,
respectively, from $84.3 million and 21.8%, respectively, for the
third quarter of 2019.
Fully Diluted Earnings Per Share: Third quarter 2020
non-GAAP fully diluted earnings per share increased 8.5% to $1.41,
compared to $1.30 for the third quarter of 2019.
Full-Year 2020 Guidance:
Full-year 2020 Non-GAAP total revenues are expected to be in a
range of $1,645 million to $1,655 million. Full-year 2020 Non-GAAP
fully diluted earnings per share are expected to be in a range of
$5.63 to $5.73.
Quarterly Results Conference Call
NICE management will host its earnings conference call today
November 12th, 2020 at 8:30 AM ET, 13:30 GMT, 15:30 Israel, to
discuss the results and the company's outlook. To participate in
the call, please dial into the following numbers: United States
1-866-804-8688 or +1-718-354-1175, International
+44(0)1296-480-100, United Kingdom 0-800-783-0906, Israel
1-809-344-364. The Passcode is 308 565 57. Additional access
numbers can be found at
http://www.btconferencing.com/globalaccess/?bid=54_attended. The
call will be webcast live on the Company’s website at
https://www.nice.com/investor-relations/upcoming-event. An online
replay will also be available approximately two hours following the
call. A telephone replay of the call will be available for 7 days
after the live broadcast and may be accessed by dialing: United
States 1-877-482-6144, International +44(0)20-7136-9233, United
Kingdom 0-800-032-9687. The Passcode for the replay is 783 390
51.
Non-GAAP financial measures are included in this press release.
Non-GAAP financial measures consist of GAAP financial measures
adjusted to exclude share-based compensation, amortization of
acquired intangible assets, acquisition related expenses,
amortization of discount on long term debt and the tax effect of
the Non-GAAP adjustments. Business combination accounting rules
require the recognition of a legal performance obligation related
to a revenue arrangement of an acquired entity as a liability. The
amount assigned to such liability should be based on its fair value
at the date of acquisition. The Non-GAAP adjustment for a revenue
arrangement is intended to reflect the full amount of such revenue.
The Company believes that these Non-GAAP financial measures, used
in conjunction with the corresponding GAAP measures, provide
investors with useful supplemental information about the financial
performance of our business. We believe Non-GAAP financial measures
are useful to investors as a measure of the ongoing performance of
our business. Our management regularly uses our supplemental
Non-GAAP financial measures internally to understand, manage and
evaluate our business and to make financial, strategic and
operating decisions. These Non-GAAP measures are among the primary
factors management uses in planning for and forecasting future
periods. Our Non-GAAP financial measures are not meant to be
considered in isolation or as a substitute for comparable GAAP
measures and should be read only in conjunction with our
consolidated financial statements prepared in accordance with GAAP.
These Non-GAAP financial measures may differ materially from the
Non-GAAP financial measures used by other companies. Reconciliation
between results on a GAAP and Non-GAAP basis is provided in a table
immediately following the Consolidated Statements of Income. The
Company provides guidance only on a Non-GAAP basis. A
reconciliation of guidance from a GAAP to Non-GAAP basis is not
available due to the unpredictability and uncertainty associated
with future events that would be reported in GAAP results and would
require adjustments between GAAP and Non-GAAP financial measures,
including the impact of future possible business acquisitions.
Accordingly, a reconciliation of the guidance based on Non-GAAP
financial measures to corresponding GAAP financial measures for
future periods is not available without unreasonable effort.
About NICE NICE (Nasdaq: NICE) is the worldwide leading
provider of both cloud and on-premises enterprise software
solutions that empower organizations to make smarter decisions
based on advanced analytics of structured and unstructured data.
NICE helps organizations of all sizes deliver better customer
service, ensure compliance, combat fraud and safeguard citizens.
Over 25,000 organizations in more than 150 countries, including
over 85 of the Fortune 100 companies, are using NICE solutions.
www.nice.com.
Trademark Note: NICE and the NICE logo are trademarks or
registered trademarks of NICE. All other marks are trademarks of
their respective owners. For a full list of NICE' marks, please
see: http://www.nice.com/nice-trademarks.
Forward-Looking Statements
This press release 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, future plans and
strategies, projections, anticipated events and trends, the economy
and other future conditions. Examples of forward-looking statements
include guidance regarding the Company’s revenue and earnings and
the growth of our cloud business.
Forward looking statements are inherently subject to significant
economic, competitive and other uncertainties and contingencies,
many of which are beyond the control of management. The Company
cautions that these statements are not guarantees of future
performance, and investors should not place undue reliance on them.
There are or will be important known and unknown factors and
uncertainties that could cause actual results to differ materially
from those expressed or implied in the forward-looking statements.
These factors, include, but are not limited to, risks associated
with changes in economic and business conditions, competition,
successful execution of the Company’s growth strategy, success and
growth of the Company’s cloud Software-as-a-Service business,
difficulties in making additional acquisitions or effectively
integrating acquired operations, products, technologies and
personnel, the Company’s dependency on third-party cloud computing
platform providers, hosting facilities and service partners,
rapidly changing technology, cyber security attacks or other
security breaches against the Company, privacy concerns and
legislation impacting the Company’s business, changes in currency
exchange rates and interest rates, the effects of additional tax
liabilities resulting from our global operations and various other
factors and uncertainties discussed in our filings with the U.S.
Securities and Exchange Commission (the “SEC”). In addition,
COVID-19 is contributing to a general slowdown in the global
economy and may affect the Company’s business, results of
operations, financial condition and our future strategic plans. At
this time, the extent to which the COVID-19 may impact the
Company’s financial condition or results of operations is
uncertain. Furthermore, due to our subscription based business
model, the effect of the COVID-19 may not be fully reflected in our
results of operations until future periods, if at all. You are
encouraged to carefully review the section entitled “Risk Factors”
in our latest Annual Report on Form 20-F and our other filings with
the SEC for additional information regarding these and other
factors and uncertainties that could affect our future performance.
The forward-looking statements contained in this presentation speak
only as of the date hereof, and the Company undertakes no
obligation to update or revise them, whether as a result of new
information, future developments or otherwise, except as required
by law.
###
NICE LTD. AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE
SHEETS U.S. dollars in thousands
September 30,
December 31,
2020
2019
Unaudited
Audited
ASSETS CURRENT ASSETS: Cash and cash
equivalents
$
753,116
$
228,323
Short-term investments
789,415
210,772
Trade receivables
294,176
319,622
Prepaid expenses and other current assets
128,926
116,972
Total current assets
1,965,633
875,689
LONG-TERM ASSETS: Long-term investments
-
542,389
Property and equipment, net
140,262
141,647
Deferred tax assets
25,808
30,513
Other intangible assets, net
395,809
411,019
Operating lease right-of-use assets
102,132
106,196
Goodwill
1,496,429
1,378,418
Other long-term assets
145,343
124,034
Total long-term assets
2,305,783
2,734,216
TOTAL ASSETS
$
4,271,416
$
3,609,905
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES: Trade payables
$
33,685
$
30,376
Deferred revenues and advances from customers
260,059
245,792
Current maturities of operating leases
21,846
21,519
Exchangeable senior notes
257,732
251,583
Accrued expenses and other liabilities
366,658
391,685
Total current liabilities
939,980
940,955
LONG-TERM LIABILITIES: Deferred revenues and advances
from customers
35,871
26,045
Operating leases
97,764
103,490
Deferred tax liabilities
44,088
52,509
Long-term debt
633,584
213,313
Other long-term liabilities
17,052
16,327
Total long-term liabilities
828,359
411,684
SHAREHOLDERS' EQUITY Nice Ltd's equity
2,478,555
2,257,266
Non-controlling interests
24,522
-
Total shareholders' equity
2,503,077
2,257,266
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY
$
4,271,416
$
3,609,905
NICE LTD. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF
INCOME U.S. dollars in thousands (except per share amounts)
Quarter ended
Year to date
September 30,
September 30,
2020
2019
2020
2019
Unaudited
Unaudited
Unaudited
Unaudited
Revenue: Product
$
38,746
$
56,950
$
141,611
$
188,999
Services
169,358
178,609
513,529
525,947
Cloud
201,723
150,704
558,295
428,758
Total revenue
409,827
386,263
1,213,435
1,143,704
Cost of revenue: Product
5,434
5,318
16,711
16,850
Services
47,008
54,476
150,558
164,218
Cloud
87,637
72,877
248,628
213,418
Total cost of revenue
140,079
132,671
415,897
394,486
Gross profit
269,748
253,592
797,538
749,218
Operating expenses: Research and development, net
55,482
48,531
162,019
141,553
Selling and marketing
97,011
96,138
294,332
293,083
General and administrative
45,801
42,438
135,312
121,181
Amortization of acquired intangible assets
9,496
10,780
28,951
32,276
Total operating expenses
207,790
197,887
620,614
588,093
Operating income
61,958
55,705
176,924
161,125
Financial and other expense/(income), net
1,032
(252
)
2,259
3,890
Income before tax
60,926
55,957
174,665
157,235
Taxes on income
10,273
10,918
33,293
33,074
Net income
$
50,653
$
45,039
$
141,372
$
124,161
Less: net loss attributable to non-controlling interests
112
-
378
-
Net income attributable to Nice Ltd.'s shareholders
$
50,765
$
45,039
$
141,750
$
124,161
Earnings per share: Basic
$
0.81
$
0.72
$
2.26
$
2.00
Diluted
$
0.76
$
0.69
$
2.15
$
1.93
Weighted average shares outstanding: Basic
62,756
62,160
62,624
62,041
Diluted
66,253
65,066
65,741
64,493
NICE LTD. AND SUBSIDIARIES RECONCILIATION OF GAAP TO
NON-GAAP RESULTS U.S. dollars in thousands (except per share
amounts)
Quarter ended
Year to date
September 30,
September 30,
2020
2019
2020
2019
GAAP revenues
$
409,827
$
386,263
$
1,213,435
$
1,143,704
Valuation adjustment on acquired deferred product revenue
-
-
-
15
Valuation adjustment on acquired deferred services revenue
81
3
81
5
Valuation adjustment on acquired deferred cloud revenue
2,458
867
5,187
2,692
Non-GAAP revenues
$
412,366
$
387,133
$
1,218,703
$
1,146,416
GAAP cost of revenue
$
140,079
$
132,671
$
415,897
$
394,486
Amortization of acquired intangible assets on cost of product
(1,135
)
(1,123
)
(3,394
)
(2,972
)
Amortization of acquired intangible assets on cost of services
(322
)
(1,535
)
(3,341
)
(4,604
)
Amortization of acquired intangible assets on cost of cloud
(16,800
)
(15,270
)
(48,422
)
(45,118
)
Valuation adjustment on acquired deferred cost of cloud
200
575
737
1,893
Cost of product revenue adjustment (1)
(69
)
(97
)
(205
)
(304
)
Cost of services revenue adjustment (1)
(1,677
)
(2,106
)
(4,957
)
(6,251
)
Cost of cloud revenue adjustment (1)
(809
)
(358
)
(2,601
)
(2,142
)
Non-GAAP cost of revenue
$
119,467
$
112,757
$
353,714
$
334,988
GAAP gross profit
$
269,748
$
253,592
$
797,538
$
749,218
Gross profit adjustments
23,151
20,784
67,451
62,210
Non-GAAP gross profit
$
292,899
$
274,376
$
864,989
$
811,428
GAAP operating expenses
$
207,790
$
197,887
$
620,614
$
588,093
Research and development (1,2)
(2,565
)
(2,033
)
(7,553
)
(5,182
)
Sales and marketing (1,2)
(5,561
)
(7,737
)
(19,623
)
(19,211
)
General and administrative (1,2)
(14,065
)
(8,962
)
(38,239
)
(24,378
)
Amortization of acquired intangible assets
(9,496
)
(10,780
)
(28,951
)
(32,276
)
Valuation adjustment on acquired deferred commission
35
76
106
245
Non-GAAP operating expenses
$
176,138
$
168,451
$
526,354
$
507,291
GAAP financial and other expense/(income), net
$
1,032
$
(252
)
$
2,259
$
3,890
Amortization of discount on debt
(3,070
)
(2,377
)
(7,944
)
(6,847
)
Non-GAAP financial and other income, net
$
(2,038
)
$
(2,629
)
$
(5,685
)
$
(2,957
)
GAAP taxes on income
$
10,273
$
10,918
$
33,293
$
33,074
Tax adjustments re non-GAAP adjustments
14,911
13,324
39,701
33,258
Non-GAAP taxes on income
$
25,184
$
24,242
$
72,994
$
66,332
GAAP net income
$
50,653
$
45,039
$
141,372
$
124,161
Valuation adjustment on acquired deferred revenue
2,539
870
5,268
2,712
Valuation adjustment on acquired deferred cost of cloud revenue
(200
)
(575
)
(737
)
(1,893
)
Amortization of acquired intangible assets
27,753
28,708
84,108
84,970
Valuation adjustment on acquired deferred commission
(35
)
(76
)
(106
)
(245
)
Share-based compensation (1)
22,404
21,293
69,255
56,625
Acquisition related expenses (2)
2,342
-
3,923
843
Amortization of discount on long term debt
3,070
2,377
7,944
6,847
Tax adjustments re non-GAAP adjustments
(14,911
)
(13,324
)
(39,701
)
(33,258
)
Non-GAAP net income
$
93,615
$
84,312
$
271,326
$
240,762
GAAP diluted earnings per share
$
0.76
$
0.69
$
2.15
$
1.93
Non-GAAP diluted earnings per share
$
1.41
$
1.30
$
4.13
$
3.73
Shares used in computing GAAP diluted earnings per share
66,253
65,066
65,741
64,493
Shares used in computing non-GAAP diluted earnings per share
66,253
65,066
65,741
64,493
NICE LTD. AND SUBSIDIARIES
RECONCILIATION OF GAAP TO NON-GAAP RESULTS (continued) U.S.
dollars in thousands
(1) Share-based Compensation
Quarter ended
Year to date
September 30,
September 30,
2020
2019
2020
2019
Cost of product revenue
$
69
$
97
$
205
$
304
Cost of services revenue
1,677
2,106
4,957
6,251
Cost of cloud revenue
809
358
2,601
2,142
Research and development
2,565
2,033
7,553
5,177
Sales and marketing
5,519
7,737
19,493
19,181
General and administrative
11,765
8,962
34,446
23,570
$
22,404
$
21,293
$
69,255
$
56,625
(2) Acquisition related expenses
Quarter ended
Year to date
September 30,
September 30,
2020
2019
2020
2019
Research and development
$
-
$
-
$
-
$
5
Sales and marketing
42
-
130
30
General and administrative
2,300
-
3,793
808
$
2,342
$
-
$
3,923
$
843
NICE LTD. AND SUBSIDIARIES CONSOLIDATED CASH FLOW
STATEMENTS U.S. dollars in thousands
Quarter ended
Year to date
September 30,
September 30,
2020
2019
2020
2019
Unaudited
Unaudited
Unaudited
Unaudited
Operating Activities Net
income
$
50,653
$
45,039
$
141,372
$
124,161
Depreciation and amortization
45,482
43,924
135,133
128,744
Stock based compensation
22,207
21,273
68,839
56,589
Amortization of premium and discount and accrued interest on
marketable securities
2,080
387
(790
)
(187
)
Deferred taxes, net
(6,783
)
(12,485
)
(16,653
)
(31,107
)
Changes in operating assets and liabilities: Trade Receivables
12,795
6,788
27,588
26,900
Prepaid expenses and other assets
3,131
(15,626
)
(31,637
)
(88,157
)
Trade payables
6,036
(8,791
)
5,231
(5,073
)
Accrued expenses and other current liabilities
(15,124
)
44,173
(36,584
)
53,789
Operating lease right-of-use assets, net
4,414
4,346
12,926
11,842
Deferred revenue
(23,481
)
(45,558
)
14,617
13,311
Long term liabilities
-
(20
)
-
(300
)
Operating lease liabilities
(4,608
)
(2,836
)
(14,297
)
(11,995
)
Amortization of discount on long term debt
3,070
2,379
7,945
6,848
Other
(839
)
(672
)
(254
)
(2,656
)
Net cash provided by operating activities
99,033
82,321
313,436
282,709
Investing Activities
Purchase of property and equipment
(4,211
)
(6,545
)
(21,667
)
(21,527
)
Purchase of Investments
(151,589
)
(187,752
)
(306,077
)
(493,894
)
Proceeds from Investments
118,284
113,121
283,149
283,629
Capitalization of software development costs
(9,577
)
(8,549
)
(28,776
)
(25,940
)
Payments for business and asset acquisitions, net of cash acquired
(96,425
)
(184
)
(147,261
)
(25,972
)
Net cash used in investing activities
(143,518
)
(89,909
)
(220,632
)
(283,704
)
Financing Activities
Proceeds from issuance of shares upon exercise of share options
828
1,693
8,177
4,711
Purchase of treasury shares
-
(7,897
)
(27,601
)
(22,612
)
Capital Lease payments
-
(191
)
(177
)
(631
)
Proceeds from issuance of exchangeable notes
451,469
-
451,469
-
Net cash provided by/(used in) financing activities
452,297
(6,395
)
431,868
(18,532
)
Effect of exchange rates on cash and cash equivalents
1,206
(1,489
)
121
(1,733
)
Net change in cash and cash equivalents
409,018
(15,472
)
#
524,793
(21,260
)
Cash and cash equivalents, beginning of period
$
344,098
$
236,311
$
228,323
$
242,099
Cash and cash equivalents, end of period
$
753,116
$
220,839
$
753,116
$
220,839
View source
version on businesswire.com: https://www.businesswire.com/news/home/20201112005477/en/
Contact Investors
Marty Cohen, +1 551 256 5354, ET, ir@nice.com Yisca Erez, +972 9
775-3798, CET, ir@nice.com
Media Contact Chris Irwin-Dudek, +1 (551) 256-5140,
Chris.Irwin-Dudek@nice.com
NICE (NASDAQ:NICE)
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From Mar 2024 to Apr 2024
NICE (NASDAQ:NICE)
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From Apr 2023 to Apr 2024
