NICE Reports Strong Revenue and EPS Growth For the Third Quarter 2016

 

November 10, 2016

Growth Driven by Cloud and Analytics

The Company Expects to Complete the Acquisition of inContact within Two Weeks

Paramus, New Jersey, November 10, 2016 - NICE (NASDAQ: NICE) today announced results for the third quarter ended September 30, 2016.

Third Quarter 2016 Financial Highlights​

GAAPNon-GAAP
Revenue growth of 7% year-over-yearRevenue growth of 9% year-over-year
Gross margin of 67.1% compared to 66.3% last yearGross margin of 72.2% compared to 69.8% last year
Operating profit of $36 million, down 5% year-over-yearOperating profit of $64 million, up 15% year-over-year
Operating margin of 15.2% compared to 17.1% last yearOperating margin of 26.7% compared to 25.2% last year
Diluted EPS from continuing operations of $0.53 versus $0.48 last year, 10% growthDiluted EPS from continuing operations of $0.83 versus $0.75 last year, 11% growth


“We are pleased to report another quarter of solid growth and profitability,” said Barak Eilam, CEO of NICE. “Excluding the impact of currency exchange rates, we delivered our second consecutive quarter of double digit revenue growth, as well as, another quarter of double digit EPS growth.”

Mr. Eilam continued, “The customer service market is evolving due to the need for more sophisticated analytics, the rapid transition to omni-channel and Cloud. The strategic steps that we have taken including our technology and portfolio innovation, Nexidia analytics and the acquisition of inContact, a leader in omni-channel cloud, have positioned us well to capitalize on the significant market opportunities.

“We are encouraged by the very high level of interest among customers and partners since the announcement of the inContact acquisition, and we are extremely pleased by the positive feedback we have received from them, as well as, the positive reviews from industry analysts.”

Dividend Declaration

The Company declared a cash dividend for the third quarter of 2016 of $0.16 per share. The record date will be November 22th, 2016 and the payment date will be December 6th, 2016. Tax will be withheld at a rate of 15%.

GAAP Financial Highlights for the Third Quarter Ended September 30:

The following GAAP financial data, excluding cash flow and cash balance, are from continuing operations, which exclude the results of the Intelligence and the Physical Security divisions for both 2016 and 2015.

Revenues: Third quarter 2016 total revenues increased 7.3% to $237.2 million compared to $221.1 million for the third quarter of 2015.

Gross Profit: Third quarter 2016 gross profit and gross margin increased to $159.1 million and 67.1%, respectively, compared to $146.5 million and 66.3%, respectively, for the third quarter of 2015.

Operating Income: Third quarter 2016 operating income and operating margin were $36.0 million and 15.2%, respectively, compared to $37.8 million and 17.1%, respectively, for the third quarter of 2015.

Net Income from Continuing Operations: Third quarter 2016 net income and net margin increased to $32.4 million and 13.7%, respectively, compared to $29.5 million and 13.3%, respectively, for the third quarter of 2015.

Fully Diluted Earnings Per Share from Continuing Operations: Fully diluted earnings per share for the third quarter of 2016 increased 10.4% to $0.53, compared to $0.48 in the third quarter of 2015.

Operating Cash Flow and Cash Balance: Third quarter 2016 operating cash flow was $39.4 million. In the third quarter, $2.9 million was used for share repurchases and $9.6 million for dividends. As of September 30, 2016, total cash and cash equivalents, short term investments and marketable securities were $798.7 million, with no debt.
 

Non-GAAP Financial Highlights for the Third Quarter Ended September 30:

The following non-GAAP financial data are from continuing operations, which exclude the results of the Intelligence and the Physical Security divisions for both 2016 and 2015.

Revenues: Third quarter 2016 non-GAAP total revenues were $240.3 million, up 8.7% from $221.1 million for the third quarter of 2015.

Gross Profit: Third quarter 2016 non-GAAP gross profit and non-GAAP gross margin increased to $173.6 million and 72.2%, respectively, from $154.3 million and 69.8%, respectively, for the third quarter of 2015.

Operating Income: Third quarter 2016 non-GAAP operating income and non-GAAP operating margin increased to $64.2 million and 26.7%, respectively, from $55.7 million and 25.2%, respectively, for the third quarter of 2015.

Net Income from Continuing Operations: Third quarter 2016 non-GAAP net income and non-GAAP net margin increased to $50.7 million and 21.1%, respectively, from $46.3 million and 21.0%, respectively, for the third quarter of 2015.

Fully Diluted Earnings Per Share from Continuing Operations: Third quarter 2016 non-GAAP fully diluted earnings per share increased 10.7% to $0.83, compared to $0.75 for the third quarter of 2015.
 

Fourth Quarter and Full Year 2016 Guidance:

The following guidance assumes the closing of the inContact acquisition within two weeks and includes inContact’s results for the period from the closing of the acquisition until the end of the year.

Fourth Quarter 2016: Fourth quarter 2016 non-GAAP total revenues are expected to be in a range of $320 million to $334 million. Fourth quarter 2016 non-GAAP fully diluted earnings per share are expected to be in a range of $1.10 to $1.22.

Full Year 2016: Full year 2016 non-GAAP total revenues are expected to be in a range of $1,022 million to $1,036 million. Full year 2016 non-GAAP fully diluted earnings per share are expected to be in a range of $3.53 to $3.65.
 

Quarterly Results Conference Call

NICE management will host its earnings conference call today, November 10th, 2016 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 in to the following numbers: United States 1-866-804-8688 or +1-718-354-1175, International +44(0)1296-311-600, United Kingdom 0-800-678-1161, Israel 1-809-242-041. The Passcode is 551 268 39. 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 http://www.nice.com/news-and-events/ir-events. 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 840 330 23.

Non-GAAP financial measures consist of GAAP financial measures adjusted to exclude: amortization of acquired intangible assets, re-organization expenses, share-based compensation, and certain business combination accounting entries, settlement, realized gain from substantial liquidation of marketable securities and tax adjustment re non-GAAP adjustments. The purpose of such adjustments is to give an indication of our performance exclusive of non-cash charges and other items that are considered by management to be outside of our core operating results. 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. Our management regularly uses our supplemental non-GAAP financial measures internally to understand, manage and evaluate our business and make operating decisions. These non-GAAP measures are among the primary factors management uses in planning for and forecasting future periods. Business combination accounting rules requires us to recognize a legal performance obligation related to a revenue arrangement of an acquired entity. The amount assigned to that liability should be based on its fair value at the date of acquisition. The non-GAAP adjustment is intended to reflect the full amount of such revenue. We believe this adjustment is useful to investors as a measure of the ongoing performance of our business. We believe these non-GAAP financial measures provide consistent and comparable measures to help investors understand our current and future operating cash flow performance. 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.

About NICE
NICE (Nasdaq: NICE) is the worldwide leading provider of enterprise software solutions that empower organizations to make smarter decisions based on advanced analytics of structured and unstructured data. NICE solutions help the world’s largest organizations deliver better customer service, ensure compliance, combat fraud and safeguard citizens. Over 25,000 organizations in more than 150 countries, including over 80 of the Fortune 100 companies, are using NICE solutions. www.nice.com.

Investors
Marty Cohen, +1 212 574 3635, ir@nice.com, ET
Yisca Erez, +972 9 775-3798, ir@nice.com, CET

Media Contact
Erik Snider, +1 877 245 7448, erik.snider@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's marks, please see: 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. Such forward-looking statements, including the statements by Mr. Eilam, are based on the current beliefs, expectations and assumptions of the management of NICE Ltd. (the Company). In some cases, such forward-looking statements can be identified by terms such as believe, expect, may, will, intend, project, plan, estimate or similar words. Forward-looking statements are subject to a number of risks and uncertainties that could cause the actual results or performance of the Company to differ materially from those described herein, including but not limited to the impact of the global economic environment on the Company’s customer base (particularly financial services firms) potentially impacting our business and financial condition; competition; changes in technology and market requirements; decline in demand for the Company's products; inability to timely develop and introduce new technologies, products and applications; difficulties or delays in absorbing and integrating acquired operations, products, technologies and personnel; loss of market share; an inability to maintain certain marketing and distribution arrangements; the effect of newly enacted or modified laws, regulation or standards on the Company and our products, and the risk that the required approvals for the inContact acquisition may not be received on the expected timeline or at all. For a more detailed description of the risk factors and uncertainties affecting the company, refer to the Company's reports filed from time to time with the Securities and Exchange Commission, including the Company’s Annual Report on Form 20-F. The forward-looking statements contained in this press release are made as of the date of this press release, and the Company undertakes no obligation to update or revise them, except as required by law.


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