Nov 16, 2023
Hoboken, New Jersey, November 16, 2023 - NICE (NASDAQ: NICE) today announced results for the third quarter ended September 30, 2023, as compared to the corresponding period of the previous year.
Third Quarter 2023 Financial Highlights
“We are pleased to reportanother strong quarter exceeding the high end of our guidance range on bothtotal revenue and earnings per share for the third quarter,” said Barak Eilam,CEO of NICE. “Our record revenue was driven by another outstanding quarter withcloud revenue growth of 22%, which is the fastest growth rate in our industry onthe largest cloud revenue base. Our robust top line result was paired withanother quarter of industry-leading, unrivaled profitability demonstrated byfurther strong growth in operating income, operating margin and earnings pershare. Our newly announced $300 million share buybackprogram reinforces our confidence in the strength of the underlying fundamentalsof our business and our rock-solid financial profile.”
Mr. Eilam continued, “We areleading the CX market riding the strong forces of cloudification,platformization and AI. With record pipeline driven by digital and AI, we are well positioned tofinish the year on a strong note and are pleased to provide our initial financialoutlook on both top line and profitability beyond this year, reflecting thestrength of our market leading position.”
GAAP Financial Highlights for the Third Quarter Ended September 30:
Revenues: Third quarter 2023 total revenues increased 8% to $601.3 million compared to $554.7 million for the third quarter of 2022.
Gross Profit:Third quarter 2023 gross profit was $410.4 million compared to $383.9 million for the third quarter of 2022. Third quarter 2023 gross margin was 68.2% compared to 69.2% for the third quarter of 2022.
Operating Income:Third quarter 2023 operating income increased 26% to $113.6 million compared to $90.3 million for the third quarter of 2022. Third quarter 2023 operating margin was 18.9% compared to 16.3% for the third quarter of 2022.
Net Income: Third quarter 2023 net income increased 30% to $92.4 million compared to $71.2 million for the third quarter of 2022. Third quarter 2023 net income margin was 15.4% compared to 12.8% for the third quarter of 2022.
Fully Diluted Earnings Per Share: Fully diluted earnings per share for the third quarter of 2023 increased 30% to $1.39 compared to $1.07 in the third quarter of 2022.
Operating Cash Flow and Cash Balance: Third quarter 2023 operating cash flow was $120.6 million. In the third quarter of 2023, $89.5 million was used for share repurchases. As of September 30, 2023, total cash and cash equivalents, and short-term investments were $1,651.6 million. Our debt, net of a hedge instrument, was $544.3 million, resulting in net cash and investments of $1,107.3 million.
Non-GAAP Financial Highlights for the Third Quarter Ended September 30:
Revenues: Third quarter 2023 total revenues increased8% to $601.3 million compared to $554.7 million for the third quarter of 2022.
Gross Profit: Thirdquarter 2023 Non-GAAP gross profit increased to $434.4 million compared to $408.0million for the third quarter of 2022. Third quarter 2023 Non-GAAP gross marginwas 72.2% compared to 73.5% for the third quarter of 2022.
Operating Income: Third quarter 2023Non-GAAP operating income increased 15% to $183.9 million compared to $159.3 millionfor the third quarter of 2022. Third quarter 2023 Non-GAAP operating margin was30.6% compared to 28.7% for the third quarter of 2022.
Net Income: Third quarter 2023 Non-GAAP net income increased18% to $150.6 million compared to $127.8 million for the third quarter of 2022.Third quarter 2023 Non-GAAP net income margin totaled 25.0% compared to 23.0% for the thirdquarter of 2022.
Fully Diluted Earnings Per Share: Third quarter 2023Non-GAAP fully diluted earnings per share increased 18% to $2.27 compared to $1.92for the third quarter of 2022.
Full-Year 2023 Guidance:
Raising Full-Year 2023 Guidance:
The Company increased full-year 2023 Non-GAAP totalrevenues to an expected range of $2,359 million to $2,379million, representing 9% growth at the midpoint compared to full-year 2022.
The Company increased full-year 2023 Non-GAAP fullydiluted earnings per share to an expected range of $8.58to $8.78, representing 14% growth at the midpoint compared to full-year 2022.
2024 Outlook:
The Company is providing preliminaryexpectations beyond 2023 as follows:
Quarterly Results Conference Call
NICE management will host its earnings conference call today November 16, 2023, at8:30 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 States1-877-407-4018 or +1-201-689-8471, United Kingdom 0-800-756-3429, Israel 1-809-406-247. Thecall 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 financialmeasures consist of GAAP financial measures adjusted to exclude share-basedcompensation, amortization of acquired intangible assets, acquisition relatedexpenses, amortization of discount on debt and loss from extinguishment of debtand the tax effect of the Non-GAAP adjustments.
The Company believes that these Non-GAAP financial measures, used in conjunctionwith the corresponding GAAP measures, provide investors with usefulsupplemental information about the financial performance of our business. Webelieve Non-GAAP financial measures are useful to investors as a measure of theongoing performance of our business. Our management regularly uses oursupplemental Non-GAAP financial measures internally to understand, manage andevaluate our business and to make financial, strategic and operating decisions.These Non-GAAP measures are among the primary factors management uses inplanning for and forecasting future periods. Our Non-GAAP financial measuresare not meant to be considered in isolation or as a substitute for comparableGAAP measures and should be read only in conjunction with our consolidatedfinancial statements prepared in accordance with GAAP. These Non-GAAP financialmeasures may differ materially from the Non-GAAP financial measures used byother companies. Reconciliation between results on a GAAP and Non-GAAP basis isprovided in a table immediately following the Consolidated Statements ofIncome. The Company provides guidance only on a Non-GAAP basis. Areconciliation of guidance from a GAAP to Non-GAAP basis is not available dueto the unpredictability and uncertainty associated with future events thatwould be reported in GAAP results and would require adjustments between GAAPand Non-GAAP financial measures, including the impact of future possiblebusiness acquisitions. Accordingly, a reconciliation of the guidance based onNon-GAAP financial measures to corresponding GAAP financial measures for futureperiods is not available without unreasonable effort.
AboutNICE
NICE (Nasdaq: NICE) isthe worldwide leading provider of both cloud and on-premises enterprisesoftware solutions that empower organizations to make smarter decisions basedon advanced analytics of structured and unstructured data. NICE helpsorganizations of all sizes deliver better customer service, ensure compliance,combat fraud and safeguard citizens. Over 2,000organizations in more than 150 countries, including over 8 ofthe Fortune 100 companies, are using NICE solutions. www.nice.com.
Investor Relations Contact
Marty Cohen, +1 551256 5354, ir@nice.com, ET
Omri Arens, +972 3 763-0127, ir@nice.com, CET
Media Contact
Chris Irwin-Dudek, +1 (551) 256-5140, Chris.Irwin-Dudek@nice.com
Trademark Note: NICE and the NICE logo are trademarks or registeredtrademarks of NICE. All other marks are trademarks of theirrespective owners. For a full list of NICE' marks, please see: http://www.nice.com/nice-trademarks.
Forward-LookingStatements
This press release contains forward-looking statements as that term is defined inthe 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 thecurrent beliefs, expectations and assumptions of the Company’s managementregarding the future of the Company’s business, future plans and strategies,projections, anticipated events and trends, the economy and other futureconditions. Examples of forward-looking statements include guidance regardingthe Company’s revenue and earnings and the growth of our cloud, analytics andartificial intelligence business.
Forwardlooking statements are inherently subject to significant economic, competitiveand other uncertainties and contingencies, many of which are beyond the controlof management. The Company cautions that these statements are not guarantees offuture performance, and investors should not place undue reliance on them.There are or will be important known and unknown factors and uncertainties thatcould cause actual results to differ materially from those expressed or impliedin the forward-looking statements. Thesefactors, include, but are not limited to, risks associated with changes ineconomic and business conditions, competition, successful execution of theCompany’s growth strategy, success and growth of the Company’s cloudSoftware-as-a-Service business, difficulties in making additional acquisitionsor effectively integrating acquired operations, products, technologies andpersonnel, the Company’s dependency on third-party cloud computing platformproviders, hosting facilities and service partners, rapidly changingtechnology, cyber security attacks or other security breaches against theCompany, privacy concerns and legislation impacting the Company’s business,changes in currency exchange rates and interest rates, the effects ofadditional tax liabilities resulting from our global operations, the effect ofunexpected events or geo-political conditions, such as the impact of conflictsin the Middle East, that may disrupt our business and the global economy andvarious 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 sectionentitled “Risk Factors” in our latest Annual Report on Form 20-F and our otherfilings with the SEC for additional information regarding these and otherfactors and uncertainties that could affect our future performance. Theforward-looking statements contained in this press release speak only as of thedate hereof, and the Company undertakes no obligation to update or revise them,whether as a result of new information, future developments or otherwise, exceptas required by law.
