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NICE Reports 27% Year-Over-Year Cloud Revenue Growth for the First Quarter 2024

NICE (NASDAQ: NICE) today announced results for the first quarter ended March 31, 2024, as compared to the corresponding period of the previous year. First Quarter 2024 Financial Highlights GAAP Non...

Business Wire
  • Total revenue growth of 15% year over year
  • Double-digit growth in gross profit, operating income and net income
  • Non-GAAP EPS exceeds high end of guidance range
  • Record high operating cash flow of $254 million increased 30% year over year

HOBOKEN, N.J.: NICE (NASDAQ: NICE) today announced results for the first quarter ended March 31, 2024, as compared to the corresponding period of the previous year.

First Quarter 2024 Financial Highlights

GAAP

Non-GAAP

Total revenue was $659.3 million and increased 15%

Total revenue was $659.3 million and increased 15%

Cloud revenue was $468.4 million and increased 27%

 

Cloud revenue was $468.4 million and increased 27%

 

Operating income was $121.4 million and increased 30%

Operating income was $199.8 million and increased 22%

Operating margin was 18.4% compared to 16.4% last year

Operating margin was 30.3% compared to 28.6% last year

Diluted EPS was $1.60 and increased 39%

Diluted EPS was $2.58 and increased 27%

Operating cash flow was $254.5 million and increased 30%

 

“We are pleased to start the year with positive momentum, evidenced by a robust performance across the board, while continuing to outpace the industry,” said Barak Eilam, CEO, NICE. “Our total revenue growth of 15% was once again driven by excellent execution in the cloud with 27% revenue growth, propelled by demand for our digital and AI offerings. We also delivered another quarter of expanding profitability as demonstrated by a 170 basis point increase in our Non-GAAP operating margin to 30.3%, leading to a 27% year over year increase in non-GAAP EPS, and generated record operating cash flow of $254 million. Our ongoing healthy cash generation coupled with a best-in-class balance sheet provides us with unparalleled growth opportunities.”

Mr. Eilam continued, “Our continued strong performance over the past several years as well as the outstanding first quarter results are attributed to our unmatched platform strategy coupled with consistent execution. This is now further driving our market leadership with the ultimate trifecta: highest industry cloud win rate, trailblazing the digital market through convergence and fully leveraging the tremendous CX AI opportunity.”

GAAP Financial Highlights for the First Quarter Ended March 31:

Revenues: First quarter 2024 total revenues increased 15% to $659.3 million compared to $571.9 million for the first quarter of 2023.

Gross Profit: First quarter 2024 gross profit was $436.6 million compared to $385.3 million for the first quarter of 2023. First quarter 2024 gross margin was 66.2% compared to 67.4% for the first quarter of 2023.

Operating Income: First quarter 2024 operating income increased 30% to $121.4 million compared to $93.5 million for the first quarter of 2023. First quarter 2024 operating margin was 18.4% compared to 16.4% for the first quarter of 2023.

Net Income: First quarter 2024 net income increased 38% to $106.4 million compared to $76.9 million for the first quarter of 2023. First quarter 2024 net income margin was 16.1% compared to 13.5% for the first quarter of 2023.

Fully Diluted Earnings Per Share: Fully diluted earnings per share for the first quarter of 2024 increased 39% to $1.60 compared to $1.15 in the first quarter of 2023.

Cash Flow and Cash Balance: First quarter 2024 operating cash flow was $254.5 million. In the first quarter 2024, $41.5 million was used for share repurchases and $87.4 million was used for repayment of debt. As of March 31, 2024, total cash and cash equivalents, and short-term investments were $1,502.8 million. Our debt was $457.5 million, resulting in net cash and investments of $1,045.3 million.

Non-GAAP Financial Highlights for the First Quarter Ended March 31:

Revenues: First quarter 2024 total revenues increased 15% to $659.3 million compared to $571.9 million for the first quarter of 2023.

Gross Profit: First quarter 2024 gross profit was $467.7 million compared to $409.9 million for the first quarter of 2023. First quarter 2024 gross margin was 70.9% compared to 71.7% for the first quarter of 2023.

Operating Income: First quarter 2024 operating income increased 22% to $199.8 million compared to $163.4 million for the first quarter of 2023. First quarter 2024 operating margin was 30.3% compared to 28.6% for the first quarter of 2023.

Net Income: First quarter 2024 net income increased 26% to $171.6 million compared to $135.6 million for the first quarter of 2023. First quarter 2024 net income margin was 26.0% compared to 23.7% for the first quarter of 2023.

Fully Diluted Earnings Per Share: Fully diluted earnings per share for the first quarter of 2024 increased 27% to $2.58 compared to $2.03 in the first quarter of 2023.

Second Quarter and Full Year 2024 Guidance:

Second-Quarter 2024:

Second-quarter 2024 Non-GAAP total revenues are expected to be in a range of $657 million to $667 million, representing 14% growth year over year at the midpoint.

Second-quarter 2024 Non-GAAP fully diluted earnings per share are expected to be in a range of $2.53 to $2.63, representing 21% growth year over year at the midpoint.

Full-Year 2024:

Full-year 2024 Non-GAAP total revenues are expected to be in a range of $2,715 million to $2,735 million, representing 15% growth at the midpoint compared to full-year 2023.

The Company increased full year 2024 Non-GAAP fully diluted earnings per share which are expected to be in a range of $10.53 to $10.73, representing 21% growth at the midpoint compared to full-year 2023.

Quarterly Results Conference Call

NICE management will host its earnings conference call today May 16, 2024, 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.

Explanation of Non-GAAP measures

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 and other expenses, amortization of discount on debt and loss from extinguishment of debt and the tax effect of the Non-GAAP adjustments.

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

With NICE (Nasdaq: NICE), it’s never been easier for organizations of all sizes around the globe to create extraordinary customer experiences while meeting key business metrics. Featuring the world’s #1 cloud native customer experience platform, CXone, NICE is a worldwide leader in AI-powered self-service and agent-assisted CX software for the contact center – and beyond. Over 25,000 organizations in more than 150 countries, including over 85 of the Fortune 100 companies, partner with NICE to transform - and elevate - every customer interaction. www.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: http://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, analytics and artificial intelligence 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 third-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, the effect of unexpected events or geo-political conditions, such as the impact of conflicts in the Middle East, that may disrupt our business and the global economy and various 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 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 press release 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.

NICE LTD. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

U.S. dollars in thousands

 

March 31,

 

December 31,

2024

 

2023

Unaudited

 

Audited

 
ASSETS
 

CURRENT ASSETS:

Cash and cash equivalents

$

793,078

$

511,795

Short-term investments

 

709,766

 

896,044

Trade receivables

 

574,987

 

585,154

Debt hedge option

 

-

 

121,922

Prepaid expenses and other current assets

 

206,238

 

197,967

 

 

Total current assets

 

2,284,069

 

2,312,882

 

LONG-TERM ASSETS:

Property and equipment, net

 

181,136

 

174,414

Deferred tax assets

 

174,755

 

178,971

Other intangible assets, net

 

274,541

 

305,501

Operating lease right-of-use assets

 

101,577

 

104,565

Goodwill

 

1,820,469

 

1,821,969

Prepaid expenses and other long-term assets

 

210,031

 

219,332

 

 

Total long-term assets

 

2,762,509

 

2,804,752

 

TOTAL ASSETS

$

5,046,578

$

5,117,634

 
LIABILITIES AND SHAREHOLDERS' EQUITY
 

CURRENT LIABILITIES:

Trade payables

$

55,238

$

66,036

Deferred revenues and advances from customers

 

340,366

 

302,649

Current maturities of operating leases

 

13,324

 

13,747

Debt

 

-

 

209,229

Accrued expenses and other liabilities

 

532,451

 

528,660

 
Total current liabilities

 

941,379

 

1,120,321

 

LONG-TERM LIABILITIES:

Deferred revenues and advances from customers

 

58,907

 

52,458

Operating leases

 

99,818

 

102,909

Deferred tax liabilities

 

8,489

 

8,596

Debt

 

457,505

 

457,081

Other long-term liabilities

 

22,179

 

21,769

 
Total long-term liabilities

 

646,898

 

642,813

 

SHAREHOLDERS' EQUITY

Nice Ltd's equity

 

3,447,085

 

3,341,132

Non-controlling interests

 

11,216

 

13,368

 
Total shareholders' equity

 

3,458,301

 

3,354,500

 

TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY

$

5,046,578

$

5,117,634

NICE LTD. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME

U.S. dollars in thousands (except per share amounts)

 

Quarter ended

March 31,

2024

 

2023

Unaudited

 

Unaudited

 

Revenue:

Cloud

$

468,406

 

$

367,567

 

Services

 

148,913

 

 

159,858

 

Product

 

41,990

 

 

44,435

 

Total revenue

 

659,309

 

 

571,860

 

 

Cost of revenue:

Cloud

 

169,978

 

 

131,596

 

Services

 

46,086

 

 

47,905

 

Product

 

6,605

 

 

7,095

 

Total cost of revenue

 

222,669

 

 

186,596

 

 

Gross profit

 

436,640

 

 

385,264

 

 

Operating expenses:

Research and development, net

 

87,832

 

 

78,102

 

Selling and marketing

 

155,015

 

 

148,479

 

General and administrative

 

72,354

 

 

65,176

 

Total operating expenses

 

315,201

 

 

291,757

 

 

Operating income

 

121,439

 

 

93,507

 

 

Financial and other income, net

 

(14,009

)

 

(8,721

)

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