Fourth Quarter 2020 Financial Highlights
| GAAP | Non-GAAP |
| Cloud revenue of $219 million, growth of 31% year-over-year | Cloud revenue of $223 million, growth of 33% year-over-year |
| Total revenue of $435 million, growth of 1% year-over-year | Total revenue of $438 million, growth of 2% year-over-year |
| Cloud gross margin of 58.3% compared to 54.2% last year | Cloud gross margin of 67.6% compared to 63.8% last year |
| Operating income of $65 million compared to $78 million last year | Operating income of $132 million compared to $130 million last year |
| Operating margin of 15.0% compared to 18.0% last year | Operating margin of 30.1% compared to 30.2% last year |
| Diluted EPS of $0.83 compared to $0.95 last year | Diluted EPS of $1.61 compared to $1.58 last year |
| Operating cash flow of $167 million compared to $91 million last year |
Full Year 2020 Financial Highlights
| GAAP | Non-GAAP |
| Cloud revenue of $777 million, growth of 30% year-over-year | Cloud revenue of $786 million, growth of 31% year-over-year |
| Total revenue of $1,648 million, growth of 5% year-over-year | Total revenue of $1,657 million, growth of 5% year-over-year |
| Cloud gross margin of 56.3% compared to 51.3% last year | Cloud gross margin of 65.6% compared to 61.8% last year |
| Operating income of $242 million compared to $239 million last year | Operating income of $470 million compared to $434 million last year |
| Operating margin of 14.7% compared to 15.2% last year | Operating margin of 28.4% compared to 27.5% last year |
| Diluted EPS of $2.98 versus $2.88 last year, 3% growth year-over-year | Diluted EPS of $5.73 versus $5.31 last year, 8% growth year-over-year |
| Record cash flow from operations of $480 million compared to $374 million last year |
“We are pleased to report another exceptional year at NICE highlighted by groundbreaking innovation and speed of execution in cloud, digital and artificial intelligence. We witnessed accelerated cloud growth, cloud exceeded more than 50% of our total revenue for the second half of the year, and we exited 2020 with more than $900 million in an annualized cloud revenue run rate propelled by the tremendous success of our CXone cloud platform. We saw a 100% year-over-year increase in our customers’ digital interactions volume and 50% of our new deals were driven by digital initiatives. Our market leading AI solution, Enlighten, experienced strong demand with many new deals and a fast growing pipeline,” said Barak Eilam, CEO of NICE.
Mr. Eilam continued, “2021 is shaping up to be a year of a changed reality, in which the events of 2020 have created a new normal, and at the same time provided new opportunities in cloud and digital. Enterprises are seeking to rapidly accelerate their innovation cycles and leap forward much faster than before while continuously adapting to changes. We are well- positioned to capitalize on this transition with our leading digital cloud platforms together with a large and fast growing total addressable market.”
GAAP Financial Highlights for the Fourth Quarter and Full Year Ended December 31:
Revenues: Fourth quarter 2020 total revenues increased 1.0% to $434.6 million compared to $430.2 million for the fourth quarter of 2019.
Full year 2020 total revenues increased 4.7% to $1,648.0 million compared to $1,573.9 million for the full year 2019.
Gross Profit: Fourth quarter 2020 gross profit was $288.5 million compared to $292.9 million for the fourth quarter of 2019. Fourth quarter 2020 gross margin was 66.4% compared to 68.1% for the fourth quarter of 2019.
Full year 2020 gross profit increased to $1,086.1 million compared to $1,042.1 million for the full year 2019. Full year 2020 gross margin was 65.9% compared to 66.2% for the full year 2019.
Operating Income: Fourth quarter 2020 operating income was $65.1 million compared to $77.6 million for the fourth quarter of 2019. Fourth quarter 2020 operating margin was 15.0% compared to 18.0% for the fourth quarter of 2019.
Full year 2020 operating income increased to $242.0 million compared to $238.7 million for the full year 2019. Full year 2020 operating margin was 14.7% compared to 15.2% for the full year 2019.
Net Income: Fourth quarter 2020 net income was $55.0 million compared to $61.7 million for the fourth quarter of 2019. Fourth quarter 2020 net income margin was 12.6% compared to 14.4% for the fourth quarter of 2019.
Full year 2020 net income and net income margin increased to $196.3 million and 11.9%, respectively, compared to $185.9 million and 11.8%, respectively, for the full year 2019.
Fully Diluted Earnings Per Share: Fully diluted earnings per share for the fourth quarter of 2020 was $0.83 compared to $0.95 in the fourth quarter of 2019.
Fully diluted earnings per share for the full year 2020 increased to $2.98 compared to $2.88 for the full year 2019.
Operating Cash Flow and Cash Balance: Fourth quarter 2020 operating cash flow was $166.9 million and full year operating cash flow reached $480.3 million. In the fourth quarter, $20.7 million was used for share repurchases and $48.3 million was used for share repurchases for the full year of 2020. As of December 31, 2020, total cash and cash equivalents, short and long term investments were $1,463.9 million, and total debt was $681.2 million.
Non-GAAP Financial Highlights for the Fourth Quarter and Full Year Ended December 31:
Revenues: Fourth quarter 2020 Non-GAAP total revenues increased to $438.4 million, up 1.7% from $431.1 million for the fourth quarter of 2019.
Non-GAAP total revenues for the full year 2020 increased 5.0% to $1,657.1 million compared to $1,577.5 million for the full year 2019.
Gross Profit: Fourth quarter 2020 Non-GAAP gross profit increased to $316.7 million compared to $313.8 million for the fourth quarter of 2019. Fourth quarter 2020 Non-GAAP gross margin was 72.2% compared to 72.8% for the fourth quarter of 2019.
Full year 2020 Non-GAAP gross profit increased to $1,181.6 million compared to $1,125.3 million and full year 2020 Non- GAAP gross margin was 71.3%, the same as Non-GAAP gross margin for full year 2019.
Operating Income: Fourth quarter 2020 Non-GAAP operating income increased to $131.7 million compared to $130.2 million for the fourth quarter of 2019. Fourth quarter 2020 Non-GAAP operating margin was 30.1% compared to 30.2% for the fourth quarter of 2019.
Full year 2020 Non-GAAP operating income and Non-GAAP operating margin increased to $470.4 million and 28.4%, respectively, from $434.3 million and 27.5%, respectively, for the full year 2019.
Net Income: Fourth quarter 2020 Non-GAAP net income and Non-GAAP net income margin increased to $106.9 million and 24.4%, respectively, from $102.6 million and 23.8%, respectively, for the fourth quarter of 2019.
Full year 2020 Non-GAAP net income and Non-GAAP net income margin increased to $378.2 million and 22.8%, respectively, from $343.4 million and 21.8%, respectively, for the full year 2019.
Fully Diluted Earnings Per Share: Fourth quarter 2020 Non-GAAP fully diluted earnings per share increased 1.9% to $1.61, compared to $1.58 for the fourth quarter of 2019.
Full year 2020 Non-GAAP fully diluted earnings per share increased 7.9% to $5.73 compared to $5.31 for the full year 2019.
First Quarter and Full Year 2021 Guidance:
First Quarter 2021: First quarter 2021 Non-GAAP total revenues are expected to be in a range of $445 million to $455 million. First quarter 2021 Non-GAAP fully diluted earnings per share are expected to be in a range of $1.42 to $1.52.
Full Year 2021: Full year 2021 Non-GAAP total revenues are expected to be in a range of $1,790 million to $1,810 million. Full year 2021 Non-GAAP fully diluted earnings per share are expected to be in a range of $6.12 to $6.32.
Quarterly Results Conference Call
NICE management will host its earnings conference call today February 18th, 2021 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.
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 expenses, amortization of discount on debt and the tax effect of the Non-GAAP adjustments. Business combination accounting rules require the recognition of a legal performance obligation related to a revenue arrangement of an acquired entity as a liability. The amount assigned to such liability should be based on its fair value at the date of acquisition. The Non-GAAP adjustment for a revenue arrangement is intended to reflect the full amount of such revenue. 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
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. www.nice.com.
Investors
Marty Cohen, +1 551 256 5354, ir@nice.com, ET
Yisca Erez, +972 9 775-3798, 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 registered trademarks of NICE. All other marks are trademarks of their respective owners. For a full list of NICE' marks, please see: https://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 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 fourth-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 and various other factors and uncertainties discussed in our filings with the U.S. Securities and Exchange Commission (the “SEC”). In addition, COVID-19 is contributing to a general slowdown in the global economy. At this time, the extent and duration of the continued impact of the pandemic is unknown, and therefore we cannot predict how it may affect the Company’s future business, results of operations, financial condition and strategic plans. Furthermore, due to our subscription based business model, the effect of COVID-19 may not be fully reflected in our results of operations until future periods, if at all. 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 presentation 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.
