- Double-Digit Growth in Operating Income and EPS
- Quarterly Record of Cash Flow from Operations of $195
million
- Company Raises Full-Year 2023 Guidance for Total Revenue and
EPS
NICE (NASDAQ: NICE) today announced results for the first
quarter ended March 31, 2023, as compared to the corresponding
period of the previous year.
First Quarter 2023 Financial Highlights
GAAP
Non-GAAP
Total revenue was $571.9 million and
increased 8%
Total revenue was $571.9 million and
increased 8% ($576.0 million in constant currency, up 9%)
Cloud revenue was $367.6 million and
increased 25%
Cloud revenue was $367.6 million and
increased 25%
Cloud gross margin was 64.2% compared to
61.5% last year
Cloud gross margin was 70.0% compared to
68.6% last year
Operating income was $93.5 million and
increased 29%
Operating income was $163.4 million and
increased 10%
Operating margin was 16.4% compared to
13.7% last year
Operating margin was 28.6% compared to
28.3% last year
Diluted EPS was $1.15 and increased
32%
Diluted EPS was $2.03 and increased
13%
Operating cash flow was $195.1 million
“We are pleased to begin the year on a high note as we exceeded
the high end of our guidance range on both total revenue and
earnings per share,” said Barak Eilam, CEO of NICE. “The
outperformance was once again driven by great execution in the
cloud as cloud revenue increased 25% year over year. Our cloud
growth continues to outpace the market, and this growth is not only
unique in its magnitude, but in its consistency as well. We also
delivered another excellent quarter in profitability, evidenced by
continued strong growth in the cloud gross margin, operating margin
and record first quarter cash flow of $195 million.”
Mr. Eilam continued, “The first quarter was characterized by
many seven-digit and eight-digit deals, demonstrating our superior
win rate when it comes to delivering our CXone cloud platform at
scale and our Enlighten AI CX solution. Our continued strong
performance and clear market leadership are attributed to the tight
alignment between our strategic priorities and sharp execution
centered on expanding cloud market share, championing the AI
opportunity, and our emphasis on profitable growth.”
GAAP Financial Highlights for the First
Quarter Ended March 31:
Revenues: First quarter 2023 total revenues increased 8%
to $571.9 million compared to $527.4 million for the first quarter
of 2022.
Gross Profit: First quarter 2023 gross profit was $385.3
million compared to $360.4 million for the first quarter of 2022.
First quarter 2023 gross margin was 67.4% compared to 68.3% for the
first quarter of 2022.
Operating Income: First quarter 2023 operating income
increased 29% to $93.5 million compared to $72.4 million for the
first quarter of 2022. First quarter 2023 operating margin was
16.4% compared to 13.7% for the first quarter of 2022.
Net Income: First quarter 2023 net income increased 33%
to $76.9 million compared to $57.9 million for the first quarter of
2022. First quarter 2023 net income margin was 13.5% compared to
11.0% for the first quarter of 2022.
Fully Diluted Earnings Per Share: Fully diluted earnings
per share for the first quarter of 2023 increased 32% to $1.15
compared to $0.87 in the first quarter of 2022.
Operating Cash Flow and Cash Balance: First quarter 2023
operating cash flow was $195.1 million. In the first quarter 2023,
$64.7 million was used for share repurchases. As of March 31, 2023,
total cash and cash equivalents, and short-term investments were
$1,684.8 million. Our debt, net of a hedge instrument, was $543.5
million, resulting in net cash and investments of $1,141.3
million.
Non-GAAP Financial Highlights for the
First Quarter Ended March 31:
Revenues: First quarter 2023 total revenues increased 8%
to $571.9 million (up 9% in constant currency to $576.0 million)
compared to $527.4 million for the first quarter of 2022.
Gross Profit: First quarter 2023 Non-GAAP gross profit
increased to $409.9 million compared to $385.2 million for the
first quarter of 2022. First quarter 2023 Non-GAAP gross margin was
71.7% compared to 73.0% for the first quarter of 2022.
Operating Income: First quarter 2023 Non-GAAP operating
income increased 10% to $163.4 million compared to $149.0 million
for the first quarter of 2022. First quarter 2023 Non-GAAP
operating margin was 28.6% compared to 28.3% for the first quarter
of 2022.
Net Income: First quarter 2023 Non-GAAP net income
increased 13% to $135.6 million compared to $120.5 million for the
first quarter of 2022. First quarter 2023 Non-GAAP net income
margin totaled 23.7% compared to 22.8% for the first quarter of
2022.
Fully Diluted Earnings Per Share: First quarter 2023
Non-GAAP fully diluted earnings per share increased 13% to $2.03
compared to $1.80 for the first quarter of 2022.
Second Quarter and Full Year 2023
Guidance:
Second Quarter 2023:
Second quarter 2023 Non-GAAP total revenues are expected to be
in a range of $573 million to $583 million, representing 9% growth
year over year at the midpoint.
Second quarter 2023 Non-GAAP fully diluted earnings per share
are expected to be in a range of $2.00 to $2.10, representing 10%
growth year over year at the midpoint.
Raising Full Year 2023 Guidance:
The Company increased full-year 2023 Non-GAAP total revenues
which are expected to be in a range of $2,350 million to $2,370
million, representing 8% growth at the midpoint compared to full
year 2022.
The Company increased full-year 2023 Non-GAAP fully diluted
earnings per share which are expected to be in a range of $8.32 to
$8.52, representing 11% growth at the midpoint compared to full
year 2022.
Quarterly Results Conference Call
NICE management will host its earnings conference call today May
11, 2023, 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
1-877-407-4018 or +1-201-689-8471, United Kingdom 0-800-756-3429,
Israel 1-809-406-247.
The call will be webcast live on the Company’s website at
https://www.nice.com/investor-relations/upcoming-event.
Explanation of Non-GAAP measures 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
debt and loss from extinguishment of debt and the tax effect of the
Non-GAAP adjustments.
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.
Explanation of Constant Currency NICE presents constant
currency information to provide a framework for assessing how our
underlying businesses performed excluding the effect of foreign
currency rate fluctuations. To present this information, current
results for transactions in currencies other than United States
dollars are converted into United States dollars using the average
exchange rates from the comparative period rather than the actual
exchange rates in effect during the current period. Future expected
results for transactions in currencies other than United States
dollars are converted into United States dollars using the exchange
rates in effect in the last month of the reporting period. NICE has
provided this financial information to aid investors in better
understanding our performance. These constant currency financial
measures presented in this release should not be considered as a
substitute for, or superior to, the measures of financial
performance prepared in accordance with GAAP.
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, analytics and artificial intelligence
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, the effect of
unexpected events or geo-political conditions, such as the COVID-19
pandemic, that may disrupt our business and the global economy and
various other factors and uncertainties discussed in our filings
with the U.S. Securities and Exchange Commission (the “SEC”).
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 press release 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
March 31,
December 31,
2023
2022
Unaudited
Audited
ASSETS
CURRENT ASSETS:
Cash and cash equivalents
$
630,661
$
529,596
Short-term investments
1,054,184
1,041,943
Trade receivables
503,751
518,517
Debt hedge option
160,474
122,323
Prepaid expenses and other current
assets
211,431
204,754
Total current assets
2,560,501
2,417,133
LONG-TERM ASSETS:
Property and equipment, net
169,062
159,285
Deferred tax assets
123,377
116,889
Other intangible assets, net
185,859
209,605
Operating lease right-of-use assets
101,415
102,893
Goodwill
1,620,802
1,617,118
Prepaid expenses and other long-term
assets
232,306
231,496
Total long-term assets
2,432,821
2,437,286
TOTAL ASSETS
$
4,993,322
$
4,854,419
LIABILITIES AND SHAREHOLDERS'
EQUITY
CURRENT LIABILITIES:
Trade payables
$
54,902
$
56,019
Deferred revenues and advances from
customers
376,785
338,930
Current maturities of operating leases
13,147
13,525
Debt
248,180
209,292
Accrued expenses and other liabilities
518,164
523,451
Total current liabilities
1,211,178
1,141,217
LONG-TERM LIABILITIES:
Deferred revenues and advances from
customers
53,704
57,211
Operating leases
97,320
99,262
Deferred tax liabilities
7,260
7,336
Debt
455,800
455,382
Other long-term liabilities
38,544
38,588
Total long-term liabilities
652,628
657,779
SHAREHOLDERS' EQUITY
Nice Ltd's equity
3,117,584
3,042,085
Non-controlling interests
11,932
13,338
Total equity
3,129,516
3,055,423
TOTAL LIABILITIES AND SHAREHOLDERS'
EQUITY
$
4,993,322
$
4,854,419
NICE LTD. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF
INCOME
U.S. dollars in thousands (except per
share amounts)
Quarter ended
March 31,
2023
2022
Unaudited
Unaudited
Revenue:
Cloud
$
367,567
$
294,592
Services
159,858
156,974
Product
44,435
75,863
Total revenue
571,860
527,429
Cost of revenue:
Cloud
131,596
113,349
Services
47,905
46,908
Product
7,095
6,745
Total cost of revenue
186,596
167,002
Gross profit
385,264
360,427
Operating expenses:
Research and development, net
78,102
76,578
Selling and marketing
148,479
152,618
General and administrative
65,176
58,867
Total operating expenses
291,757
288,063
Operating income
93,507
72,364
Financial and other income, net
(8,721
)
(486
)
Income before tax
102,228
72,850
Taxes on income
25,286
14,909
Net income
$
76,942
$
57,941
Basic
$
1.20
$
0.91
Diluted
$
1.15
$
0.87
Weighted average shares outstanding:
Basic
63,941
63,736
Diluted
66,662
66,853
NICE LTD. AND SUBSIDIARIES
CONSOLIDATED CASH FLOW
STATEMENTS
U.S. dollars in thousands
Quarter ended
March 31,
2023
2022
Unaudited
Unaudited
Operating
Activities
Net income
$
76,942
$
57,941
Adjustments to reconcile net income to net
cash provided by operating activities
Depreciation and amortization
41,846
44,281
Share-based compensation
44,961
48,184
Amortization of premium and discount and
accrued interest on marketable securities
1,270
3,818
Deferred taxes, net
(7,878
)
(1,796
)
Changes in operating assets and
liabilities:
Trade Receivables, net
16,752
(21,259
)
Prepaid expenses and other current
assets
(11,372
)
(28,931
)
Operating lease right-of-use assets
3,068
3,942
Trade payables
(1,180
)
9,078
Accrued expenses and other current
liabilities
(694
)
29,229
Deferred revenues
33,247
52,349
Operating lease liabilities
(3,907
)
(4,997
)
Amortization of discount on long-term
debt
1,154
1,137
Loss from extinguishment of debt
-
1,092
Other
862
(1,357
)
Net cash provided by operating
activities
195,071
192,711
Investing
Activities
Purchase of property and equipment
(13,106
)
(9,584
)
Purchase of Investments
(69,542
)
(98,266
)
Proceeds from Investments
64,899
101,666
Capitalization of internal use software
costs
(14,136
)
(10,671
)
Net cash used in investing activities
(31,885
)
(16,855
)
Financing
Activities
Proceeds from issuance of shares upon
exercise of options
959
75
Purchase of treasury shares
(64,715
)
(63,842
)
Dividends paid to noncontrolling
interest
(1,480
)
-
Repayment of debt
-
(18,093
)
Net cash used in financing activities
(65,236
)
(81,860
)
Effect of exchange rates on cash and cash
equivalents
1,167
(937
)
Net change in cash, cash equivalents and
restricted cash
99,117
93,059
Cash, cash equivalents and restricted
cash, beginning of period
$
533,095
$
378,656
Cash, cash equivalents and restricted
cash, end of period
$
632,212
$
471,715
Reconciliation of cash, cash equivalents
and restricted cash reported in the consolidated balance sheet:
Cash and cash equivalents
$
630,661
$
471,715
Restricted cash included in other current
assets
$
1,551
$
-
Total cash, cash equivalents and
restricted cash shown in the statement of cash flows
$
632,212
$
471,715
NICE LTD. AND SUBSIDIARIES
RECONCILIATION OF GAAP TO NON-GAAP
RESULTS
U.S. dollars in thousands (except per
share amounts)
Quarter ended
March 31,
2023
2022
GAAP revenues
$
571,860
$
527,429
Non-GAAP revenues
$
571,860
$
527,429
GAAP cost of revenue
$
186,596
$
167,002
Amortization of acquired intangible assets
on cost of cloud
(19,369
)
(18,665
)
Amortization of acquired intangible assets
on cost of services
-
(377
)
Amortization of acquired intangible assets
on cost of product
(249
)
(276
)
Valuation adjustment on acquired deferred
cost of cloud
-
15
Cost of cloud revenue adjustment (1)
(1,947
)
(2,324
)
Cost of services revenue adjustment
(1)
(2,885
)
(2,967
)
Cost of product revenue adjustment (1)
(138
)
(132
)
Non-GAAP cost of revenue
$
162,008
$
142,276
GAAP gross profit
$
385,264
$
360,427
Gross profit adjustments
24,588
24,726
Non-GAAP gross profit
$
409,852
$
385,153
GAAP operating expenses
$
291,757
$
288,063
Research and development (1)
(8,398
)
(8,515
)
Sales and marketing (1)
(11,102
)
(16,269
)
General and administrative (1)
(21,296
)
(18,400
)
Amortization of acquired intangible
assets
(4,515
)
(8,811
)
Valuation adjustment on acquired deferred
commission
40
53
Non-GAAP operating expenses
$
246,486
$
236,121
GAAP financial and other income, net
$
(8,721
)
$
(486
)
Amortization of discount and loss of
extinguishment on debt
(1,154
)
(2,229
)
Non-GAAP financial and other income,
net
$
(9,875
)
$
(2,715
)
GAAP taxes on income
$
25,286
$
14,909
Tax adjustments re non-GAAP
adjustments
12,308
16,351
Non-GAAP taxes on income
$
37,594
$
31,260
GAAP net income
$
76,942
57,941
Valuation adjustment on acquired deferred
revenue
-
-
Valuation adjustment on acquired deferred
cost of cloud revenue
-
(15
)
Amortization of acquired intangible
assets
24,133
28,129
Valuation adjustment on acquired deferred
commission
(40
)
(53
)
Share-based compensation (1)
45,766
48,607
Amortization of discount and loss of
extinguishment on debt
1,154
2,229
Tax adjustments re non-GAAP
adjustments
(12,308
)
(16,351
)
Non-GAAP net income
$
135,647
$
120,487
GAAP diluted earnings per share
$
1.15
$
0.87
Non-GAAP diluted earnings per share
$
2.03
$
1.80
Shares used in computing GAAP diluted
earnings per share
66,662
66,853
Shares used in computing non-GAAP diluted
earnings per share
66,662
66,853
NICE LTD. AND SUBSIDIARIES
RECONCILIATION OF GAAP TO NON-GAAP
RESULTS (continued)
U.S. dollars in thousands
(1
)
Share-based
Compensation
Quarter ended
March 31,
2023
2022
Cost of cloud revenue
$
1,947
$
2,324
Cost of services revenue
2,885
2,967
Cost of product revenue
138
132
Research and development
8,398
8,515
Sales and marketing
11,102
16,269
General and administrative
21,296
18,400
$
45,766
$
48,607
View source
version on businesswire.com: https://www.businesswire.com/news/home/20230511005362/en/
Investor Relations Contact Marty Cohen, +1 551 256 5354,
ET, ir@nice.com Omri Arens, +972 3 763-0127, CET, ir@nice.com
Media Contact Chris Irwin-Dudek, +1 (551) 256-5140,
Chris.Irwin-Dudek@nice.com
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