• |
Both Revenue and EPS Exceed the High End of Q3 Guidance Range
|
• |
Company Raises Revenue and EPS Guidance for Full Year 2023 and Provides Initial Outlook for 2024
|
• |
New $300 Million Share Repurchase Program Announced
|
GAAP
|
Non-GAAP
|
Total revenue was $601.3 million and increased 8%
|
Total revenue was $601.3 million and increased 8%
|
Cloud revenue was $403.3 million and increased 22%
|
Cloud revenue was $403.3 million and increased 22%
|
Cloud gross margin was 65.1% compared to 64.1% last year
|
Cloud gross margin was 70.4% compared to 70.4% last year
|
Operating income was $113.6 million and increased 26%
|
Operating income was $183.9 million and increased 15%
|
Operating margin was 18.9% compared to 16.3% last year
|
Operating margin was 30.6% compared to 28.7% last year
|
Diluted EPS was $1.39 and increased 30%
|
Diluted EPS was $2.27 and increased 18%
|
Operating cash flow was $120.6 million and increased 28%
|
• |
Full-year 2024 cloud revenue growth of at least 18% year over year, exclusive of any contribution from the LiveVox acquisition, which is expected to close in the first half of 2024.
|
• |
On a full year basis for 2024, LiveVox is expected to contribute approximately $142 million of revenue.
|
• |
Including synergies from LiveVox, we expect 2024 EBITDA to be nearly $900 million and to exceed $1 billion in 2025.
|
NICE LTD. AND SUBSIDIARIES
|
||||
CONDENSED CONSOLIDATED BALANCE SHEETS
|
||||
U.S. dollars in thousands
|
September 30,
|
December 31,
|
|||||||
2023
|
2022
|
|||||||
Unaudited
|
Audited
|
|||||||
ASSETS
|
||||||||
CURRENT ASSETS:
|
||||||||
Cash and cash equivalents
|
$
|
713,090
|
$
|
529,596
|
||||
Short-term investments
|
938,500
|
1,041,943
|
||||||
Trade receivables
|
537,951
|
518,517
|
||||||
Debt hedge option
|
93,505
|
122,323
|
||||||
Prepaid expenses and other current assets
|
205,564
|
204,754
|
||||||
Total current assets
|
2,488,610
|
2,417,133
|
||||||
LONG-TERM ASSETS:
|
||||||||
Property and equipment, net
|
170,619
|
159,285
|
||||||
Deferred tax assets
|
145,404
|
116,889
|
||||||
Other intangible assets, net
|
150,708
|
209,605
|
||||||
Operating lease right-of-use assets
|
97,814
|
102,893
|
||||||
Goodwill
|
1,627,186
|
1,617,118
|
||||||
Prepaid expenses and other long-term assets
|
215,650
|
231,496
|
||||||
Total long-term assets
|
2,407,381
|
2,437,286
|
||||||
TOTAL ASSETS
|
$
|
4,895,991
|
$
|
4,854,419
|
||||
LIABILITIES AND SHAREHOLDERS' EQUITY
|
||||||||
CURRENT LIABILITIES:
|
||||||||
Trade payables
|
$
|
56,998
|
$
|
56,019
|
||||
Deferred revenues and advances from customers
|
304,968
|
338,930
|
||||||
Current maturities of operating leases
|
12,569
|
13,525
|
||||||
Debt
|
181,131
|
209,292
|
||||||
Accrued expenses and other liabilities
|
460,910
|
523,451
|
||||||
Total current liabilities
|
1,016,576
|
1,141,217
|
||||||
LONG-TERM LIABILITIES:
|
||||||||
Deferred revenues and advances from customers
|
51,502
|
57,211
|
||||||
Operating leases
|
92,270
|
99,262
|
||||||
Deferred tax liabilities
|
8,760
|
7,336
|
||||||
Debt
|
456,652
|
455,382
|
||||||
Other long-term liabilities
|
38,535
|
38,588
|
||||||
Total long-term liabilities
|
647,719
|
657,779
|
||||||
SHAREHOLDERS' EQUITY
|
||||||||
Nice Ltd's equity
|
3,218,880
|
3,042,085
|
||||||
Non-controlling interests
|
12,816
|
13,338
|
||||||
Total shareholders' equity
|
3,231,696
|
3,055,423
|
||||||
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY
|
$
|
4,895,991
|
$
|
4,854,419
|
Quarter ended
|
Year to date
|
|||||||||||||||
September 30,
|
September 30,
|
|||||||||||||||
2023
|
2022
|
2023
|
2022
|
|||||||||||||
Unaudited
|
Unaudited
|
Unaudited
|
Unaudited
|
|||||||||||||
Revenue:
|
||||||||||||||||
Cloud
|
$
|
403,324
|
$
|
330,487
|
$
|
1,152,839
|
$
|
936,472
|
||||||||
Services
|
160,220
|
165,202
|
479,022
|
488,909
|
||||||||||||
Product
|
37,800
|
59,035
|
122,455
|
187,353
|
||||||||||||
Total revenue
|
601,344
|
554,724
|
1,754,316
|
1,612,734
|
||||||||||||
Cost of revenue:
|
||||||||||||||||
Cloud
|
140,564
|
118,706
|
407,144
|
345,497
|
||||||||||||
Services
|
45,292
|
45,697
|
140,216
|
137,598
|
||||||||||||
Product
|
5,130
|
6,379
|
19,935
|
19,613
|
||||||||||||
Total cost of revenue
|
190,986
|
170,782
|
567,295
|
502,708
|
||||||||||||
Gross profit
|
410,358
|
383,942
|
1,187,021
|
1,110,026
|
||||||||||||
Operating expenses:
|
||||||||||||||||
Research and development, net
|
84,848
|
74,048
|
241,589
|
224,108
|
||||||||||||
Selling and marketing
|
144,171
|
158,608
|
444,614
|
461,636
|
||||||||||||
General and administrative
|
67,713
|
60,991
|
188,256
|
176,933
|
||||||||||||
Total operating expenses
|
296,732
|
293,647
|
874,459
|
862,677
|
||||||||||||
Operating income
|
113,626
|
90,295
|
312,562
|
247,349
|
||||||||||||
Financial and other income, net
|
(7,037
|
)
|
(596
|
)
|
(25,108
|
)
|
(1,032
|
)
|
||||||||
Income before tax
|
120,663
|
90,891
|
337,670
|
248,381
|
||||||||||||
Taxes on income
|
28,310
|
19,645
|
81,021
|
53,622
|
||||||||||||
Net income
|
$
|
92,353
|
$
|
71,246
|
$
|
256,649
|
$
|
194,759
|
||||||||
Earnings per share:
|
||||||||||||||||
Basic
|
$
|
1.46
|
$
|
1.12
|
$
|
4.03
|
$
|
3.05
|
||||||||
Diluted
|
$
|
1.39
|
$
|
1.07
|
$
|
3.86
|
$
|
2.93
|
||||||||
Weighted average shares outstanding:
|
||||||||||||||||
Basic
|
63,422
|
63,739
|
63,693
|
63,763
|
||||||||||||
Diluted
|
66,223
|
66,446
|
66,438
|
66,524
|
NICE LTD. AND SUBSIDIARIES
|
|||||||
CONSOLIDATED CASH FLOW STATEMENTS
|
|||||||
U.S. dollars in thousands
|
Quarter ended
|
Year to date
|
|||||||||||||||
September 30,
|
September 30,
|
|||||||||||||||
2023
|
2022
|
2023
|
2022
|
|||||||||||||
Unaudited
|
Unaudited
|
Unaudited
|
Unaudited
|
|||||||||||||
Operating Activities
|
||||||||||||||||
Net income
|
$
|
92,353
|
$
|
71,246
|
$
|
256,649
|
$
|
194,759
|
||||||||
Adjustments to reconcile net income to net cash provided by operating activities:
|
||||||||||||||||
Depreciation and amortization
|
42,269
|
42,594
|
126,148
|
129,077
|
||||||||||||
Share-based compensation
|
46,213
|
42,396
|
130,488
|
133,689
|
||||||||||||
Amortization of premium and discount and accrued interest on marketable securities
|
998
|
2,090
|
2,044
|
7,162
|
||||||||||||
Deferred taxes, net
|
(13,915
|
)
|
(11,582
|
)
|
(30,787
|
)
|
(23,626
|
)
|
||||||||
Changes in operating assets and liabilities:
|
||||||||||||||||
Trade Receivables, net
|
(25,807
|
)
|
(14,780
|
)
|
(17,720
|
)
|
(85,635
|
)
|
||||||||
Prepaid expenses and other current assets
|
(315
|
)
|
137
|
(22,361
|
)
|
(40,273
|
)
|
|||||||||
Operating lease right-of-use assets
|
3,182
|
3,494
|
8,685
|
16,814
|
||||||||||||
Trade payables
|
11,632
|
(22,789
|
)
|
784
|
1,643
|
|||||||||||
Accrued expenses and other current liabilities
|
20,835
|
24,048
|
(28,691
|
)
|
(10,283
|
)
|
||||||||||
Deferred revenue
|
(54,485
|
)
|
(38,963
|
)
|
(39,662
|
)
|
(2,332
|
)
|
||||||||
Operating lease liabilities
|
(4,140
|
)
|
(5,057
|
)
|
(11,541
|
)
|
(22,488
|
)
|
||||||||
Amortization of discount on long-term debt
|
1,166
|
1,143
|
3,449
|
3,431
|
||||||||||||
Loss from extinguishment of debt
|
-
|
1
|
37
|
1,206
|
||||||||||||
Other
|
624
|
289
|
3,412
|
(135
|
)
|
|||||||||||
Net cash provided by operating activities
|
120,610
|
94,267
|
380,934
|
303,009
|
||||||||||||
Investing Activities
|
||||||||||||||||
Purchase of property and equipment
|
(5,507
|
)
|
(6,067
|
)
|
(23,126
|
)
|
(20,952
|
)
|
||||||||
Purchase of Investments
|
(9,284
|
)
|
(143,655
|
)
|
(200,643
|
)
|
(365,457
|
)
|
||||||||
Proceeds from Investments
|
134,486
|
140,814
|
307,038
|
322,404
|
||||||||||||
Capitalization of internal use software costs
|
(12,479
|
)
|
(13,427
|
)
|
(41,106
|
)
|
(37,171
|
)
|
||||||||
Payments for business acquisitions, net of cash acquired
|
(18,405
|
)
|
-
|
(18,405
|
)
|
-
|
||||||||||
Other
|
-
|
-
|
-
|
276
|
||||||||||||
Net cash provided by (used in) investing activities
|
88,811
|
(22,335
|
)
|
23,758
|
(100,900
|
)
|
||||||||||
Financing Activities
|
||||||||||||||||
Proceeds from issuance of shares upon exercise of options
|
43
|
151
|
1,767
|
424
|
||||||||||||
Purchase of treasury shares
|
(89,506
|
)
|
(22,489
|
)
|
(219,417
|
)
|
(120,401
|
)
|
||||||||
Dividends paid to noncontrolling interest
|
-
|
-
|
(1,480
|
)
|
(376
|
)
|
||||||||||
Repayment of debt
|
(23
|
)
|
(18
|
)
|
(1,557
|
)
|
(20,128
|
)
|
||||||||
Net cash used in financing activities
|
(89,486
|
)
|
(22,356
|
)
|
(220,687
|
)
|
(140,481
|
)
|
||||||||
Effect of exchange rates on cash and cash equivalents
|
(2,824
|
)
|
(5,663
|
)
|
(1,111
|
)
|
(12,302
|
)
|
||||||||
Net change in cash, cash equivalents and restricted cash
|
117,111
|
43,913
|
182,894
|
49,326
|
||||||||||||
Cash, cash equivalents and restricted cash, beginning of period
|
$
|
598,879
|
$
|
384,069
|
$
|
533,096
|
$
|
378,656
|
||||||||
Cash, cash equivalents and restricted cash, end of period
|
$
|
715,990
|
$
|
427,982
|
$
|
715,990
|
$
|
427,982
|
||||||||
Reconciliation of cash, cash equivalents and restricted cash reported in the consolidated balance sheet:
|
||||||||||||||||
Cash and cash equivalents
|
$
|
713,090
|
$
|
423,032
|
$
|
713,090
|
$
|
423,032
|
||||||||
Restricted cash included in other current assets
|
$
|
2,900
|
$
|
4,950
|
$
|
2,900
|
$
|
4,950
|
||||||||
Total cash, cash equivalents and restricted cash shown in the statement of cash flows
|
$
|
715,990
|
$
|
427,982
|
$
|
715,990
|
$
|
427,982
|
NICE LTD. AND SUBSIDIARIES
|
||||||||
RECONCILIATION OF GAAP TO NON-GAAP RESULTS
|
||||||||
U.S. dollars in thousands (except per share amounts)
|
Quarter ended
|
Year to date
|
|||||||||||||||
September 30,
|
September 30,
|
|||||||||||||||
2023
|
2022
|
2023
|
2022
|
|||||||||||||
GAAP revenues
|
$
|
601,344
|
$
|
554,724
|
$
|
1,754,316
|
$
|
1,612,734
|
||||||||
Non-GAAP revenues
|
$
|
601,344
|
$
|
554,724
|
$
|
1,754,316
|
$
|
1,612,734
|
||||||||
GAAP cost of revenue
|
$
|
190,986
|
$
|
170,782
|
$
|
567,295
|
$
|
502,708
|
||||||||
Amortization of acquired intangible assets on cost of cloud
|
(18,967
|
)
|
(18,564
|
)
|
(57,732
|
)
|
(55,851
|
)
|
||||||||
Amortization of acquired intangible assets on cost of services
|
-
|
-
|
-
|
(377
|
)
|
|||||||||||
Amortization of acquired intangible assets on cost of product
|
(260
|
)
|
(242
|
)
|
(766
|
)
|
(776
|
)
|
||||||||
Valuation adjustment on acquired deferred cost of cloud
|
-
|
13
|
-
|
41
|
||||||||||||
Cost of cloud revenue adjustment (1)
|
(2,160
|
)
|
(2,319
|
)
|
(6,360
|
)
|
(6,389
|
)
|
||||||||
Cost of services revenue adjustment (1)
|
(3,016
|
)
|
(2,778
|
)
|
(8,764
|
)
|
(8,264
|
)
|
||||||||
Cost of product revenue adjustment (1)
|
384
|
(135
|
)
|
106
|
(401
|
)
|
||||||||||
Non-GAAP cost of revenue
|
$
|
166,967
|
$
|
146,757
|
$
|
493,779
|
$
|
430,691
|
||||||||
GAAP gross profit
|
$
|
410,358
|
$
|
383,942
|
$
|
1,187,021
|
$
|
1,110,026
|
||||||||
Gross profit adjustments
|
24,019
|
24,025
|
73,516
|
72,017
|
||||||||||||
Non-GAAP gross profit
|
$
|
434,377
|
$
|
407,967
|
$
|
1,260,537
|
$
|
1,182,043
|
||||||||
GAAP operating expenses
|
$
|
296,732
|
$
|
293,647
|
$
|
874,459
|
$
|
862,677
|
||||||||
Research and development (1)
|
(8,224
|
)
|
(7,424
|
)
|
(24,405
|
)
|
(23,825
|
)
|
||||||||
Sales and marketing (1,2)
|
(12,376
|
)
|
(13,723
|
)
|
(36,533
|
)
|
(43,121
|
)
|
||||||||
General and administrative (1,2)
|
(22,348
|
)
|
(16,505
|
)
|
(57,703
|
)
|
(52,991
|
)
|
||||||||
Amortization of acquired intangible assets
|
(3,308
|
)
|
(7,379
|
)
|
(12,251
|
)
|
(23,153
|
)
|
||||||||
Valuation adjustment on acquired deferred commission
|
30
|
48
|
106
|
153
|
||||||||||||
Non-GAAP operating expenses
|
$
|
250,506
|
$
|
248,664
|
$
|
743,673
|
$
|
719,740
|
||||||||
GAAP financial and other income, net
|
$
|
(7,037
|
)
|
$
|
(596
|
)
|
$
|
(25,108
|
)
|
$
|
(1,032
|
)
|
||||
Amortization of discount and loss of extinguishment on debt
|
(1,166
|
)
|
(1,144
|
)
|
(3,486
|
)
|
(4,637
|
)
|
||||||||
Change in fair value of contingent consideration
|
(239
|
)
|
-
|
(817
|
)
|
-
|
||||||||||
Non-GAAP financial and other income, net
|
(8,442
|
)
|
(1,740
|
)
|
(29,411
|
)
|
(5,669
|
)
|
||||||||
GAAP taxes on income
|
$
|
28,310
|
$
|
19,645
|
$
|
81,021
|
$
|
53,622
|
||||||||
Tax adjustments re non-GAAP adjustments
|
13,372
|
13,598
|
37,473
|
42,860
|
||||||||||||
Non-GAAP taxes on income
|
$
|
41,682
|
$
|
33,243
|
$
|
118,494
|
$
|
96,482
|
||||||||
GAAP net income
|
$
|
92,353
|
$
|
71,246
|
$
|
256,649
|
$
|
194,759
|
||||||||
Valuation adjustment on acquired deferred cost of cloud revenue
|
-
|
(13
|
)
|
-
|
(41
|
)
|
||||||||||
Amortization of acquired intangible assets
|
22,535
|
26,185
|
70,749
|
80,157
|
||||||||||||
Valuation adjustment on acquired deferred commission
|
(30
|
)
|
(48
|
)
|
(106
|
)
|
(153
|
)
|
||||||||
Share-based compensation (1)
|
47,287
|
42,884
|
133,206
|
134,991
|
||||||||||||
Acquisition related expenses (2)
|
453
|
-
|
453
|
-
|
||||||||||||
Amortization of discount and loss of extinguishment on debt
|
1,166
|
1,144
|
3,486
|
4,637
|
||||||||||||
Change in fair value of contingent consideration
|
239
|
-
|
817
|
-
|
||||||||||||
Tax adjustments re non-GAAP adjustments
|
(13,372
|
)
|
(13,598
|
)
|
(37,473
|
)
|
(42,860
|
)
|
||||||||
Non-GAAP net income
|
$
|
150,631
|
$
|
127,800
|
$
|
427,781
|
$
|
371,490
|
||||||||
GAAP diluted earnings per share
|
$
|
1.39
|
$
|
1.07
|
$
|
3.86
|
$
|
2.93
|
||||||||
Non-GAAP diluted earnings per share
|
$
|
2.27
|
$
|
1.92
|
$
|
6.44
|
$
|
5.58
|
||||||||
Shares used in computing GAAP diluted earnings per share
|
66,223
|
66,446
|
66,438
|
66,524
|
||||||||||||
Shares used in computing non-GAAP diluted earnings per share
|
66,223
|
66,446
|
66,438
|
66,524
|
NICE LTD. AND SUBSIDIARIES
|
|||||||
RECONCILIATION OF GAAP TO NON-GAAP RESULTS (continued)
|
|||||||
U.S. dollars in thousands
|
(1)
|
|
Share-based Compensation
|
|||||||||||||||||
Quarter ended
|
Year to date
|
||||||||||||||||||
September 30,
|
September 30,
|
||||||||||||||||||
2023
|
2022
|
2023
|
2022
|
||||||||||||||||
Cost of cloud revenue
|
$
|
2,160
|
$
|
2,319
|
$
|
6,360
|
$
|
6,389
|
|||||||||||
Cost of services revenue
|
3,016
|
2,778
|
8,764
|
8,264
|
|||||||||||||||
Cost of product revenue
|
(384
|
)
|
135
|
(106
|
)
|
401
|
|||||||||||||
Research and development
|
8,224
|
7,424
|
24,405
|
23,825
|
|||||||||||||||
Sales and marketing
|
12,351
|
13,723
|
36,508
|
43,121
|
|||||||||||||||
General and administrative
|
21,920
|
16,505
|
57,275
|
52,991
|
|||||||||||||||
$
|
47,287
|
$
|
42,884
|
$
|
133,206
|
$
|
134,991
|
||||||||||||
(2)
|
|
Acquisition related expenses
|
|||||||||||||||||
Quarter ended
|
Year to date
|
||||||||||||||||||
September 30,
|
September 30,
|
||||||||||||||||||
2023
|
2022
|
2023
|
2022
|
||||||||||||||||
Sales and marketing
|
$
|
25
|
$
|
-
|
$
|
25
|
$
|
-
|
|||||||||||
General and administrative
|
428
|
-
|
428
|
-
|
|||||||||||||||
$
|
453
|
$
|
-
|
$
|
453
|
$
|
-
|