Letter from t​he ​CEO

2015 - A Transformative Year with Strong Financial Results

Dear Stakeholders,

2015 was a transformative year for NICE. It was a year in which we successfully managed significant and valuable changes to the business while delivering solid results, including:

6% Non-GAAP revenue growth, or 9% Non-GAAP revenue growth excluding the impact of currency exchange rates,

Non-GAAP gross margin of 70.6%, which represented an increase of 1.2 percentage points compared to 2014,

22% increase in Non-GAAP operating income,

25.4% Non-GAAP operating margin, which represented an increase of 3.3 percentage points compared to 2014,

17% increase in Non-GAAP earnings per share,

Record operating cash flow of $245 million,

The successful divestitures of our Security businesses that now provides us the means to focus on our main markets, and help us achieve greater profitability and growth going forward,

The fastest and most efficient product innovation that we have seen in many years, which resulted in a large number of new solutions delivered and quickly adopted by our customers.​

In 2015, we further built upon the success we achieved in 2014 when we initiated our plan to build a sustainable, long-term strategy and improve NICE's operational model. The result is a more simplified enterprise software company, with tighter alignment across all dimensions, including technologies, customers and markets, and one that is squarely focused on analytics.

Our Domain Expertise

We operate in two domains, Customer Service and Reputational Risk. These market segments are constantly evolving, and through rapid innovation, strong execution and market leadership, we have continued to meet the increasing demands of our customers in these dynamic industries.

In Customer Service, creating perfect customer experiences is a fundamental way in which companies of all sizes and shapes can differentiate themselves from the competition. We are enabling organizations to deliver that perfect experience across all channels of communications, as well as inspiring employees of service providers to achieve a much higher level of engagement. NICE has become the company that helps manage people's experiences. In today's reality, multichannel customer service is a fact of life for every consumer. Creating the perfect customer experience across multiple channels while understanding the entire customer journey is no longer an option for organizations, it has become a necessity.

In Reputational Risk, we analyze millions of financial transactions on a daily basis in Fraud, Compliance and Anti-Money Laundering for financial institutions around the world. Regulation and compliance continues to rapidly increase globally, and we have become the modern day safe to protect money in many different areas: in credit, in risk, for alternative payments and in the digital wallet.

Rapid innovation and our ability to leverage our go-to-market assets, including our strong competitive position, our large customer base, our world class enterprise sales teams and our global brand, have been keys to our success in delivering an expanding portfolio of analytics based solutions to our customers to help create those perfect experiences as well as fight financial crime.

 Looking Ahead

​The fundamental changes that we made to the business in 2015 will continue to benefit NICE for the long term. What we accomplished in 2015 is part of a broader journey for NICE. There is more to come that will continue to have a long lasting, positive impact on the Company both operationally and financially. Here is a slice of what we plan for NICE going forward:

To complete our transformation to a true enterprise software company. While we have already made significant headway in the process in terms of our portfolio, business model and our financial results, there are still a few more steps to take to complete our transformation to a true enterprise software company

To further evolve as an enterprise software company with a large and growing portfolio. While this has been our approach for the last several years, we have accelerated it with many new products that we released in the last 18 months, and we have plans for many more as innovation remains an essential component of our strategic plan.

To further evolve as an enterprise software company with a large portfolio that is tied together through our analytics platforms. Analytics continue to be the driving force of the growth of our company and we remain on a constant journey to bring analytics to all the different domains of our business. The recent acquisition of Nexidia serves as a major accelerator to the growth of our analytics platform.

To add further cloudification layers to our portfolio and extend the go to market accordingly. We continue to see cloud as great opportunity for us to expand our addressable markets.

Our markets are strong, the demand for our growing portfolio of solutions is robust and we look forward to further executing on our plan, while driving operational excellence throughout the organization. This, together with our expanding addressable markets and strong leadership and competitive positions, leaves us well-positioned for further growth and profitability.

Constant innovation, and leveraging our many assets to effectively and rapidly bring new products to market is what we do every day at NICE. This has been the focus of our employees in 2015, and with their continued dedication we will further capitalize on the opportunities that lie ahead.

I would like to thank our customers around the world for their confidence in our company, people, solutions and technologies. I would like to especially thank our shareholders for their continued trust and support. We are excited about our prospects for the future and are committed to delivering continued success.​

Barak Eilan
Chief Executive Officer

 Forward-Looking Statements ​​

This letter contains forward-looking statements as that term is defined in the Private Securities Litigation Reform Act of 1995. Pursuant to the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995, please refer to our full Annual Report on Form 20-F for fiscal year 2015, where we refer to important factors that, individually or in the aggregate, could cause actual results and outcomes to differ materially from those contained in any forward-looking statements made by us. ​

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