NICE Reports 27% Year-Over-Year Cloud Revenue Growth for the First Quarter 2024

Total revenue growth of 15% year over year
Double-digit growth in gross profit, operating income and net income
Non-GAAP EPS exceeds high end of guidance range
Record high operating cash flow of $254 million increased 30% year over year

NICE NICE today announced results for the first quarter ended March 31, 2024, as compared to the corresponding period of the previous year.

First Quarter 2024 Financial Highlights

*GAAP*	*Non-GAAP*
Total revenue was $659.3 million and increased 15%	Total revenue was $659.3 million and increased 15%
Cloud revenue was $468.4 million and increased 27%	Cloud revenue was $468.4 million and increased 27%
Operating income was $121.4 million and increased 30%	Operating income was $199.8 million and increased 22%
Operating margin was 18.4% compared to 16.4% last year	Operating margin was 30.3% compared to 28.6% last year
Diluted EPS was $1.60 and increased 39%	Diluted EPS was $2.58 and increased 27%
Operating cash flow was $254.5 million and increased 30%

"We are pleased to start the year with positive momentum, evidenced by a robust performance across the board, while continuing to outpace the industry," said Barak Eilam, CEO, NICE. "Our total revenue growth of 15% was once again driven by excellent execution in the cloud with 27% revenue growth, propelled by demand for our digital and AI offerings. We also delivered another quarter of expanding profitability as demonstrated by a 170 basis point increase in our Non-GAAP operating margin to 30.3%, leading to a 27% year over year increase in non-GAAP EPS, and generated record operating cash flow of $254 million. Our ongoing healthy cash generation coupled with a best-in-class balance sheet provides us with unparalleled growth opportunities."

Mr. Eilam continued, "Our continued strong performance over the past several years as well as the outstanding first quarter results are attributed to our unmatched platform strategy coupled with consistent execution. This is now further driving our market leadership with the ultimate trifecta: highest industry cloud win rate, trailblazing the digital market through convergence and fully leveraging the tremendous CX AI opportunity."

GAAP Financial Highlights for the First Quarter Ended March 31:

Revenues: First quarter 2024 total revenues increased 15% to $659.3 million compared to $571.9 million for the first quarter of 2023.

Gross Profit: First quarter 2024 gross profit was $436.6 million compared to $385.3 million for the first quarter of 2023. First quarter 2024 gross margin was 66.2% compared to 67.4% for the first quarter of 2023.

Operating Income: First quarter 2024 operating income increased 30% to $121.4 million compared to $93.5 million for the first quarter of 2023. First quarter 2024 operating margin was 18.4% compared to 16.4% for the first quarter of 2023.

Net Income: First quarter 2024 net income increased 38% to $106.4 million compared to $76.9 million for the first quarter of 2023. First quarter 2024 net income margin was 16.1% compared to 13.5% for the first quarter of 2023.

Fully Diluted Earnings Per Share: Fully diluted earnings per share for the first quarter of 2024 increased 39% to $1.60 compared to $1.15 in the first quarter of 2023.

Cash Flow and Cash Balance: First quarter 2024 operating cash flow was $254.5 million. In the first quarter 2024, $41.5 million was used for share repurchases and $87.4 million was used for repayment of debt. As of March 31, 2024, total cash and cash equivalents, and short-term investments were $1,502.8 million. Our debt was $457.5 million, resulting in net cash and investments of $1,045.3 million.

Non-GAAP Financial Highlights for the First Quarter Ended March 31:

Revenues: First quarter 2024 total revenues increased 15% to $659.3 million compared to $571.9 million for the first quarter of 2023.

Gross Profit: First quarter 2024 gross profit was $467.7 million compared to $409.9 million for the first quarter of 2023. First quarter 2024 gross margin was 70.9% compared to 71.7% for the first quarter of 2023.

Operating Income: First quarter 2024 operating income increased 22% to $199.8 million compared to $163.4 million for the first quarter of 2023. First quarter 2024 operating margin was 30.3% compared to 28.6% for the first quarter of 2023.

Net Income: First quarter 2024 net income increased 26% to $171.6 million compared to $135.6 million for the first quarter of 2023. First quarter 2024 net income margin was 26.0% compared to 23.7% for the first quarter of 2023.

Fully Diluted Earnings Per Share: Fully diluted earnings per share for the first quarter of 2024 increased 27% to $2.58 compared to $2.03 in the first quarter of 2023.

Second Quarter and Full Year 2024 Guidance:

Second-Quarter 2024:

Second-quarter 2024 Non-GAAP total revenues are expected to be in a range of $657 million to $667 million, representing 14% growth year over year at the midpoint.

Second-quarter 2024 Non-GAAP fully diluted earnings per share are expected to be in a range of $2.53 to $2.63, representing 21% growth year over year at the midpoint.

Full-Year 2024:

Full-year 2024 Non-GAAP total revenues are expected to be in a range of $2,715 million to $2,735 million, representing 15% growth at the midpoint compared to full-year 2023.

The Company increased full year 2024 Non-GAAP fully diluted earnings per share which are expected to be in a range of $10.53 to $10.73, representing 21% growth at the midpoint compared to full-year 2023.

Quarterly Results Conference Call

NICE management will host its earnings conference call today May 16, 2024, 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 and other 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.

About NICE

With NICE NICE, it's never been easier for organizations of all sizes around the globe to create extraordinary customer experiences while meeting key business metrics. Featuring the world's #1 cloud native customer experience platform, CXone, NICE is a worldwide leader in AI-powered self-service and agent-assisted CX software for the contact center – and beyond. Over 25,000 organizations in more than 150 countries, including over 85 of the Fortune 100 companies, partner with NICE to transform - and elevate - every customer interaction. 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 impact of conflicts in the Middle East, 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,
	2024		2023
	Unaudited		Audited

ASSETS

CURRENT ASSETS:
Cash and cash equivalents	$	793,078	$	511,795
Short-term investments		709,766		896,044
Trade receivables		574,987		585,154
Debt hedge option		-		121,922
Prepaid expenses and other current assets		206,238		197,967

Total current assets		2,284,069		2,312,882

LONG-TERM ASSETS:
Property and equipment, net		181,136		174,414
Deferred tax assets		174,755		178,971
Other intangible assets, net		274,541		305,501
Operating lease right-of-use assets		101,577		104,565
Goodwill		1,820,469		1,821,969
Prepaid expenses and other long-term assets		210,031		219,332

Total long-term assets		2,762,509		2,804,752

TOTAL ASSETS	$	5,046,578	$	5,117,634

LIABILITIES AND SHAREHOLDERS' EQUITY

CURRENT LIABILITIES:
Trade payables	$	55,238	$	66,036
Deferred revenues and advances from customers		340,366		302,649
Current maturities of operating leases		13,324		13,747
Debt		-		209,229
Accrued expenses and other liabilities		532,451		528,660

Total current liabilities		941,379		1,120,321

LONG-TERM LIABILITIES:
Deferred revenues and advances from customers		58,907		52,458
Operating leases		99,818		102,909
Deferred tax liabilities		8,489		8,596
Debt		457,505		457,081
Other long-term liabilities		22,179		21,769

Total long-term liabilities		646,898		642,813

SHAREHOLDERS' EQUITY
Nice Ltd's equity		3,447,085		3,341,132
Non-controlling interests		11,216		13,368

Total shareholders' equity		3,458,301		3,354,500

TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY	$	5,046,578	$	5,117,634

NICE LTD. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
U.S. dollars in thousands (except per share amounts)

	Quarter ended
	March 31,
	2024			2023
	Unaudited			Unaudited

Revenue:
Cloud	$	468,406		$	367,567
Services		148,913			159,858
Product		41,990			44,435
Total revenue		659,309			571,860

Cost of revenue:
Cloud		169,978			131,596
Services		46,086			47,905
Product		6,605			7,095
Total cost of revenue		222,669			186,596

Gross profit		436,640			385,264

Operating expenses:
Research and development, net		87,832			78,102
Selling and marketing		155,015			148,479
General and administrative		72,354			65,176
Total operating expenses		315,201			291,757

Operating income		121,439			93,507

Financial and other income, net		(14,009	)		(8,721	)

Income before tax		135,448			102,228
Taxes on income		29,075			25,286
Net income	$	106,373		$	76,942


Earnings per share:
Basic	$	1.68		$	1.20
Diluted	$	1.60		$	1.15

Weighted average shares outstanding:
Basic		63,278			63,941
Diluted		66,528			66,662

NICE LTD. AND SUBSIDIARIES
CONSOLIDATED CASH FLOW STATEMENTS
U.S. dollars in thousands

	Quarter ended
	March 31,
	2024			2023
	Unaudited			Unaudited

Operating Activities

Net income	$	106,373		$	76,942
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		51,760			41,846
Share-based compensation		44,404			44,961
Amortization of premium and discount and accrued interest on marketable securities		(1,232	)		1,270
Deferred taxes, net		4,366			(7,878	)
Changes in operating assets and liabilities:
Trade Receivables, net		8,137			16,752
Prepaid expenses and other current assets		8,761			(11,372	)
Operating lease right-of-use assets		3,281			3,068
Trade payables		(10,763	)		(1,180	)
Accrued expenses and other current liabilities		(2,868	)		(694	)
Deferred revenue		45,539			33,247
Operating lease liabilities		(3,800	)		(3,907	)
Amortization of discount on long-term debt		549			1,154
Other		(17	)		862
Net cash provided by operating activities		254,490			195,071

Investing Activities

Purchase of property and equipment		(10,521	)		(13,106	)
Purchase of Investments		(331,122	)		(69,542	)
Proceeds from sales of marketable investments		516,150			64,899
Capitalization of internal use software costs		(15,936	)		(14,136	)
Net cash provided by (used in) investing activities		158,571			(31,885	)

Financing Activities

Proceeds from issuance of shares upon exercise of options		1,792			959
Purchase of treasury shares		(41,515	)		(64,715	)
Dividends paid to noncontrolling interest		(2,681	)		(1,480	)
Repayment of debt		(87,435	)		-
Net cash used in financing activities		(129,839	)		(65,236	)

Effect of exchange rates on cash and cash equivalents		(1,939	)		1,167

Net change in cash, cash equivalents and restricted cash		281,283			99,117
Cash, cash equivalents and restricted cash, beginning of period	$	513,314		$	533,095

Cash, cash equivalents and restricted cash, end of period	$	794,597		$	632,212

Reconciliation of cash, cash equivalents and restricted cash reported in the consolidated balance sheet:
Cash and cash equivalents	$	793,078		$	630,661
Restricted cash included in other current assets	$	1,519		$	1,551
Total cash, cash equivalents and restricted cash shown in the statement of cash flows	$	794,597		$	632,212

NICE LTD. AND SUBSIDIARIES
RECONCILIATION OF GAAP TO NON-GAAP RESULTS
U.S. dollars in thousands (except per share amounts)

	Quarter ended
	March 31,
	2024			2023
GAAP revenues	$	659,309		$	571,860
Non-GAAP revenues	$	659,309		$	571,860


GAAP cost of revenue	$	222,669		$	186,596
Amortization of acquired intangible assets on cost of cloud		(25,367	)		(19,369	)
Amortization of acquired intangible assets on cost of product		(260	)		(249	)
Cost of cloud revenue adjustment (1,2)		(3,002	)		(1,947	)
Cost of services revenue adjustment (1)		(2,378	)		(2,885	)
Cost of product revenue adjustment (1)		(30	)		(138	)
Non-GAAP cost of revenue	$	191,632		$	162,008


GAAP gross profit	$	436,640		$	385,264
Gross profit adjustments		31,037			24,588
Non-GAAP gross profit	$	467,677		$	409,852


GAAP operating expenses	$	315,201		$	291,757
Research and development (1,2)		(8,143	)		(8,398	)
Sales and marketing (1,2)		(14,172	)		(11,102	)
General and administrative (1,2)		(19,831	)		(21,296	)
Amortization of acquired intangible assets		(5,239	)		(4,515	)
Valuation adjustment on acquired deferred commission		15			40
Non-GAAP operating expenses	$	267,831		$	246,486


GAAP financial and other income, net	$	(14,009	)	$	(8,721	)
Amortization of discount and loss of extinguishment on debt		(549	)		(1,154	)
Change in fair value of contingent consideration		(44	)		-
Non-GAAP financial and other income, net		(14,602	)		(9,875	)


GAAP taxes on income	$	29,075		$	25,286
Tax adjustments re non-GAAP adjustments		13,816			12,308
Non-GAAP taxes on income	$	42,891		$	37,594


GAAP net income	$	106,373		$	76,942
Amortization of acquired intangible assets		30,866			24,133
Valuation adjustment on acquired deferred commission		(15	)		(40	)
Share-based compensation (1)		45,644			45,766
Acquisition related and other expenses (2)		1,912			-
Amortization of discount and loss of extinguishment on debt		549			1,154
Change in fair value of contingent consideration		44			-
Tax adjustments re non-GAAP adjustments		(13,816	)		(12,308	)
Non-GAAP net income	$	171,557		$	135,647


GAAP diluted earnings per share	$	1.60		$	1.15

Non-GAAP diluted earnings per share	$	2.58		$	2.03

Shares used in computing GAAP diluted earnings per share		66,528			66,662

Shares used in computing non-GAAP diluted earnings per share		66,528			66,662

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,
		2024		2023

	Cost of cloud revenue	$	2,940	$	1,947
	Cost of services revenue		2,378		2,885
	Cost of product revenue		30		138
	Research and development		7,813		8,398
	Sales and marketing		13,529		11,102
	General and administrative		18,954		21,296
		$	45,644	$	45,766



(2)	Acquisition related and other expenses
		Quarter ended
		March 31,
			2024		2023

	Cost of cloud revenue	$	62	$	-
	Research and development		330		-
	Sales and marketing		643		-
	General and administrative		877		-
		$	1,912	$	-

NICE LTD. AND SUBSIDIARIES
RECONCILIATION OF GAAP NET INCOME TO NON-GAAP EBITDA
U.S. dollars in thousands

	Quarter ended
	March 31,
	2024			2023
	Unaudited			Unaudited

GAAP net income	$	106,373		$	76,942
Non-GAAP adjustments:
Depreciation and amortization		51,760			41,846
Share-based compensation		44,404			44,961
Financial and other expense/ (income), net		(14,009	)		(8,721	)
Acquisition related and other expenses		1,912			-
Valuation adjustment on acquired deferred commission		(15	)		(40	)
Taxes on income		29,075			25,286
Non-GAAP EBITDA	$	219,500		$	180,274

NICE LTD. AND SUBSIDIARIES
NON-GAAP RECONCILIATION - FREE CASH FLOW FROM CONTINUING OPERATIONS
U.S. dollars in thousands

	Quarter ended
	March 31,
	2024			2023
	Unaudited			Unaudited
Free cash flow (a)
Net cash provided by operating activities	$	254,490		$	195,071

Purchase of property and equipment		(10,521	)		(13,106	)
Capitalization of internal use software costs		(15,936	)		(14,136	)

Free Cash Flow	$	228,033		$	167,829

(a) Free cash flow from continuing operations is defined as operating cash flows from continuing operations less capital expenditures of the continuing operations and less capitalization of internal use software costs.

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