Hoboken, New Jersey, November 2, 2017- NICE (NASDAQ: NICE) today announced results for the third quarter 2017 ended September 30, 2017.
Third Quarter 2017 Financial Highlights
Revenue growth of 36% year-over-year||
Revenue growth of 36% year-over-year|
Gross profit increased 30% year-over-year to $207 million||
Gross profit increased 34% year-over-year to $233 million |
Operating income of $33 million, down 8% year-over-year||
Operating income of $78 million, up 22% year-over-year |
Operating margin of 10.3% compared to 15.2% last year||
Operating margin of 24.0% compared to 26.7% last year|
Diluted EPS from continuing operations of $0.42 versus $0.53 last year, down 21% year-over-year||
Diluted EPS from continuing operations of $0.95 versus $0.83 last year, up 14% year-over-year|
Cash flow from operations increased 155% year-over-year to $106 million||
"We are pleased to report another excellent quarter as all four of our strategic pillars - omni-channel, cloud, analytics and artificial intelligence - are powering the strong momentum we are seeing in our business. These pillars have given us the ability to address a much larger market, further widen our industry lead and drive a meaningful shift in market share," said Barak Eilam, CEO of NICE.
Mr. Eilam continued, "In the third quarter, recurring revenue accounted for nearly 70% of total revenue and we saw a double-digit sequential increase in cloud revenue compared to the second quarter of 2017. These solid results were bolstered by CXone, which is the industry's first fully integrated, open, customer experience cloud platform for companies of all sizes. Since the launch of CXone, which happened just three months ago, we are now addressing cloud opportunities in all market segments, and even more so in the higher end of the market, and our pipeline is rapidly building. Moreover, we have seen strong growth in our CXone DEVone partner ecosystem, now encompassing over 80 partners, providing further evidence of market acceptance of our platform."
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 2017 and 2016.
Revenues: Third quarter 2017 total revenues increased 36.1% to $322.8 million compared to $237.2 million for the third quarter of 2016.
Gross Profit: Third quarter 2017 gross profit increased to $207.4 million compared to $159.1 million for the third quarter of 2016, and gross margin was 64.3% compared to 67.1% for the third quarter of 2016.
Operating Income: Third quarter 2017 operating income was $33.1 million compared to $36.0 million for the third quarter of 2016, and operating margin was 10.3% compared to 15.2% for the third quarter of 2016.
Net Income from Continuing Operations: Third quarter 2017 net income and net margin were $26.2 million and 8.1%, respectively, compared to $32.4 million and 13.7%, respectively, for the third quarter of 2016.
Fully Diluted Earnings Per Share from Continuing Operations: Fully diluted earnings per share for the third quarter of 2017 were $0.42, compared to $0.53 in the third quarter of 2016.
Operating Cash Flow and Cash Balance: Third quarter 2017 operating cash flow was $105.8 million. In the third quarter, $4.3 million was used for share repurchases. As of September 30, 2017, total cash and cash equivalents, short term investments and marketable securities were $494.1 million, and total debt was $445.6 million net of issuance costs and the equity component associated with our convertible 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 2017 and 2016.
Revenues: Third quarter 2017 non-GAAP total revenues were $326.8 million, up 36.0% from $240.3 million for the third quarter of 2016.
Gross Profit: Third quarter 2017 non-GAAP gross profit increased to $232.5 million compared to $173.6 million for the third quarter of 2016, and non-GAAP gross margin was 71.2%, compared to 72.2% for the third quarter of 2016.
Operating Income: Third quarter 2017 non-GAAP operating income increased to $78.3 million compared to $64.2 million for the third quarter of 2016, and non-GAAP operating margin was 24.0% compared to 26.7% for the third quarter of 2016.
Net Income from Continuing Operations: Third quarter 2017 non-GAAP net income increased to $58.9 million compared to $50.7 million for the third quarter of 2016, and non-GAAP net income margin was 18.0% compared to 21.1% for the third quarter of 2016.
Fully Diluted Earnings Per Share from Continuing Operations: Third quarter 2017 non-GAAP fully diluted earnings per share increased 14.5% to $0.95, compared to $0.83 for the third quarter of 2016.
Full Year 2017 Guidance:
For the full year 2017, due to better visibility, the Company is narrowing the expected ranges and increasing the expected midpoints of non-GAAP revenue and non-GAAP earnings per share guidance.
Full year 2017 non-GAAP revenue guidance is expected to be in a range of $1,338 million to $1,350 million and the expected midpoint of non-GAAP revenue guidance increased to $1,344 million. Full year 2017 non-GAAP earnings per share guidance is expected to be in a range of $4.00 to $4.10 and the expected midpoint of non-GAAP earnings per share guidance increased to $4.05.
Quarterly Results Conference Call
NICE management will host its earnings conference call today, November 2nd, 2017 at 8:30 AM ET, 12:30 GMT, 14:30 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)1296-480-100, United Kingdom 0-800-783-0906, Israel 1-809-344-364. The Passcode is 351 941 47. 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 741 301 21.
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, amortization of discount on long term debt, 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.
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.
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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:
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 we will not be able to successfully execute on the Company's cloud business strategy and generate profitability. 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.