Total Revenue Growth Accelerated to 11% with
Double Digit Growth in Operating Income and EPS
Company Raises Annual Revenue and EPS
Guidance for 2021
NICE (NASDAQ: NICE) today announced results for the first quarter
ended March 31, 2021.
First Quarter 2021 Financial Highlights
GAAP
Non-GAAP
Revenue
of $455 million, growth of 11% year-over-year
Revenue
of $457 million, growth of 11% year-over-year
Cloud
revenue of $228 million, growth of 32% year-over-year
Cloud
revenue of $230 million, growth of 33% year-over-year
Gross
margin of 67.5% compared to 65.9% last year
Gross
margin of 72.7% compared to 70.9% last year
Operating income of $66 million compared to
$59 million last year, growth of 13%
Operating income of $128.8 million compared
to $110.5 million last year, growth of 17%
Operating margin of 14.6% compared to 14.3%
last year
Operating margin of 28.2% compared to 26.9%
last year
Diluted
EPS of $0.78 versus $0.71 last year, growth of 10%
Diluted
EPS of $1.54 versus $1.34 last year, growth of 15%
“We are pleased to begin 2021 on a high note as we reported very
strong first quarter results across the board, including
double-digit growth in both total revenue and earnings per share,”
said Barak Eilam, CEO, NICE. “Driving this outstanding performance
is our continued robust growth in cloud, as we are witnessing
further rapid penetration of CXone in all market segments,
especially in very large enterprises, a segment of the market in
which we are clearly differentiated from a competitive
standpoint.”
Mr. Eilam continued, “We also continue to see tremendous growth
for CXone in international markets where we witnessed a three times
increase in bookings bolstered by our growing international
partners program. In addition, we continued to see strong demand by
enterprises to digitally transform leading to a two and a half
times increase in the volume of digital interactions on our
platform. With a record pipeline and robust bookings for CXone, we
are in an excellent position to capitalize on a large and
fast-growing total addressable market.”
GAAP Financial Highlights for the First
Quarter Ended March 31:
Revenues: First quarter 2021 total revenues increased
10.9% to $455.0 million compared to $410.40 million for the first
quarter of 2020.
Gross Profit: First quarter 2021 gross profit and gross
margin increased to $307.2 million and 67.5%, respectively,
compared to $270.3 million and 65.9%, respectively, for the first
quarter of 2020.
Operating Income: First quarter 2021 operating income and
operating margin increased to $66.5 million and 14.6%,
respectively, compared to $58.8 million and 14.3%, respectively,
for the first quarter of 2020.
Net Income: First quarter 2021 net income and net income
margin increased to $52.2 million and 11.5%, respectively, compared
to $46.1 million and 11.2%, respectively, for the first quarter of
2020.
Fully Diluted Earnings Per Share: Fully diluted earnings
per share for the First quarter of 2021 increased 9.9% to $0.78,
compared to $0.71 in the first quarter of 2020.
Operating Cash Flow and Cash Balance: First quarter 2021
operating cash flow was $164.2 million. In the first quarter, $44
million was used for share repurchases. As of March 31, 2021, total
cash and cash equivalents, short and long term investments were
$1,561.2 million, and total debt was $685.3 million.
Non-GAAP Financial Highlights for the
First Quarter Ended March 31:
Revenues: First quarter 2021 Non-GAAP total revenues
increased 11.1% to $457.0 million compared to $411.2 million for
the first quarter of 2020.
Gross Profit: First quarter 2021 Non-GAAP gross profit
and gross margin increased to $332.1 million and 72.7%,
respectively, compared to $291.6 million and 70.9%, respectively,
for the first quarter of 2020.
Operating Income: First quarter 2021 Non-GAAP operating
income and Non-GAAP operating margin increased to $128.8 million
and 28.2%, respectively, compared to $110.5 million and 26.9%,
respectively, for the first quarter of 2020.
Net Income: First quarter 2021 Non-GAAP net income and
Non-GAAP net income margin increased to $102.8 million and 22.5%,
respectively, from $87.9 million and 21.4%, respectively, for the
first quarter of 2020.
Fully Diluted Earnings Per Share: First quarter 2021
Non-GAAP fully diluted earnings per share increased 14.9% to $1.54,
compared to $1.34 for the first quarter of 2020.
Second Quarter and Full Year 2021
Guidance:
Second Quarter 2021: Second quarter 2021 Non-GAAP total
revenues are expected to be in a range of $445 million to $455
million. Second quarter 2021 Non-GAAP fully diluted earnings per
share are expected to be in a range of $1.45 to $1.55.
Raising Full Year 2021 Guidance: Full year 2021 Non-GAAP
total revenues are expected to be in a range of $1,800 million to
$1,820 million (higher than the previous guidance 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 $6.19 to $6.39
(higher than the previous guidance range of $6.12 to $6.32).
Quarterly Results Conference Call
NICE management will host its earnings conference call today May
13th, 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 long term 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.
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 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.
NICE LTD. AND SUBSIDIARIESCONDENSED CONSOLIDATED BALANCE
SHEETSU.S. dollars in thousands
March 31, 2021
December 31, 2020
Unaudited
Audited
ASSETS
CURRENT ASSETS:
Cash and cash equivalents
$
451,128
$
442,267
Short-term investments
1,110,057
1,021,613
Trade receivables
322,658
303,100
Prepaid expenses and other current assets
176,922
175,340
Total current assets
2,060,765
1,942,320
LONG-TERM ASSETS:
Property and equipment, net
136,687
137,785
Deferred tax assets
34,543
32,735
Other intangible assets, net
337,303
366,003
Operating lease right-of-use assets
92,684
97,162
Goodwill
1,503,549
1,503,252
Other long-term assets
156,503
153,660
Total long-term assets
2,261,269
2,290,597
TOTAL ASSETS
$
4,322,034
$
4,232,917
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Trade payables
$
45,193
$
33,132
Deferred revenues and advances from customers
320,034
311,851
Current maturities of operating leases
20,564
22,412
Exchangeable senior notes
262,011
259,881
Accrued expenses and other liabilities
415,107
417,174
Total current liabilities
1,062,909
1,044,450
LONG-TERM LIABILITIES:
Deferred revenues and advances from customers
80,271
36,295
Operating leases
88,421
92,262
Deferred tax liabilities
31,659
32,109
Long-term debt
423,306
421,337
Other long-term liabilities
17,182
17,980
Total long-term liabilities
640,839
599,983
SHAREHOLDERS' EQUITY
Nice Ltd's equity
2,593,715
2,563,910
Non-controlling interests
24,571
24,574
Total shareholders' equity
2,618,286
2,588,484
TOTAL LIABILITIES AND SHAREHOLDERS'
EQUITY
$
4,322,034
$
4,232,917
NICE LTD. AND SUBSIDIARIESCONSOLIDATED STATEMENTS OF
INCOMEU.S. dollars in thousands (except per share amounts)
Quarter ended March
31,
2021
2020
Unaudited
Unaudited
Revenue: Cloud
$
228,081
$
172,628
Services
161,791
173,192
Product
65,149
64,608
Total revenue
455,021
410,428
Cost of revenue: Cloud
93,582
80,468
Services
48,934
53,513
Product
5,346
6,104
Total cost of revenue
147,862
140,085
Gross profit
307,159
270,343
Operating expenses: Research and development,
net
59,155
52,781
Selling and marketing
128,559
109,621
General and administrative
52,972
49,113
Total operating expenses
240,686
211,515
Operating income
66,473
58,828
Financial and other expense, net
3,394
1,650
Income before tax
63,079
57,178
Taxes on income
10,868
11,064
Net income
$
52,211
$
46,114
Less: net loss attributable to non-controlling
interests
3
84
Net income attributable to NICE Ltd.'s shareholders
$
52,214
$
46,198
Earnings per share: Basic
$
0.83
$
0.74
Diluted
$
0.78
$
0.71
Weighted average shares outstanding: Basic
63,085
62,477
Diluted
66,723
65,335
NICE LTD. AND SUBSIDIARIES
CONSOLIDATED CASH FLOW STATEMENTS
U.S. dollars in thousands
Quarter ended March
31,
2021
2020
Unaudited
Unaudited
Operating
Activities
Net income
$
52,211
$
46,114
Depreciation and amortization
44,924
44,050
Stock based compensation
31,455
21,568
Amortization of premium and discount and accrued interest on
marketable securities
3,931
748
Deferred taxes, net
(858)
(9,192)
Changes in operating assets and liabilities: Trade
Receivables
(19,684)
659
Prepaid expenses and other assets
(10,860)
(14,091)
Trade payables
9,704
12,478
Accrued expenses and other current liabilities
(1,365)
11,897
Operating lease right-of-use assets, net
4,481
4,149
Deferred revenue
51,903
38,513
Operating lease liabilities
(5,697)
(5,557)
Amortization of discount on long term debt
4,099
2,343
Other
(5)
1,143
Net cash provided by operating activities
164,239
154,822
Investing
Activities
Purchase of property and equipment
(2,329)
(9,633)
Purchase of Investments
(153,306)
(85,427)
Proceeds from Investments
54,577
85,885
Capitalization of software development costs
(10,116)
(9,287)
Payments for business and asset acquisitions, net of cash acquired
-
(50,836)
Proceeds from business and asset acquisitions adjustments
444
-
Net cash used in investing activities
(110,730)
(69,298)
Financing
Activities
Proceeds from issuance of shares upon exercise
of share options
292
1,484
Purchase of treasury shares
(44,222)
(24,070)
Capital Lease payments
-
(162)
Net cash provided by/(used in) financing activities
(43,930)
(22,748)
Effect of exchange rates on cash and cash
equivalents
(718)
(1,987)
Net change in cash and cash
equivalents
8,861
60,789
Cash and cash equivalents, beginning of
period
$
442,267
$
228,323
Cash and cash equivalents, end of
period
$
451,128
$
289,112
NICE LTD. AND SUBSIDIARIES
RECONCILIATION OF GAAP TO NON-GAAP RESULTS U.S. dollars in
thousands (except per share amounts)
Quarter ended March
31,
2021
2020
GAAP revenues
$
455,021
$
410,428
Valuation adjustment on acquired deferred
cloud revenue
1,823
779
Valuation adjustment on acquired deferred
services revenue
106
-
Valuation adjustment on acquired deferred
product revenue
-
-
Non-GAAP revenues
$
456,950
$
411,207
GAAP cost of revenue
$
147,862
$
140,085
Amortization of acquired intangible assets
on cost of cloud
(17,515)
(15,558)
Amortization of acquired intangible assets
on cost of services
(1,225)
(1,522)
Amortization of acquired intangible assets
on cost of product
(283)
(1,134)
Valuation adjustment on acquired deferred
cost of cloud
25
293
Cost of cloud revenue adjustment (1)
(1,494)
(844)
Cost of services revenue adjustment
(1)
(2,435)
(1,600)
Cost of product revenue adjustment (1)
(125)
(68)
Non-GAAP cost of revenue
$
124,810
$
119,652
GAAP gross profit
$
307,159
$
270,343
Gross profit adjustments
24,981
21,212
Non-GAAP gross profit
$
332,140
$
291,555
GAAP operating expenses
$
240,686
$
211,515
Research and development (1,2)
(4,057)
(2,615)
Sales and marketing (1,2)
(10,908)
(5,265)
General and administrative (1,2)
(12,687)
(12,834)
Amortization of acquired intangible
assets
(9,709)
(9,805)
Valuation adjustment on acquired deferred
commission
53
35
Non-GAAP operating expenses
$
203,378
$
181,031
NICE LTD. AND SUBSIDIARIES
RECONCILIATION OF GAAP TO NON-GAAP RESULTS (continued) U.S.
dollars in thousands (except per share amounts)
Quarter ended March
31,
2021
2020
GAAP financial and other expense, net
$
3,394
$
1,650
Amortization of discount on debt
(4,125)
(2,342)
Non-GAAP financial and other income,
net
$
(731)
$
(692)
GAAP taxes on income
$
10,868
$
11,064
Tax adjustments re non-GAAP
adjustments
15,814
12,291
Non-GAAP taxes on income
$
26,682
$
23,355
GAAP net income
$
52,211
$
46,114
Valuation adjustment on acquired deferred
revenue
1,929
779
Valuation adjustment on acquired deferred
cost of cloud revenue
(25)
(293)
Amortization of acquired intangible
assets
28,732
28,019
Valuation adjustment on acquired deferred
commission
(53)
(35)
Share-based compensation (1)
31,706
21,645
Acquisition related expenses (2)
-
1,581
Amortization of discount on long term
debt
4,125
2,342
Tax adjustments re non-GAAP
adjustments
(15,814)
(12,291)
Non-GAAP net income
$
102,811
$
87,861
GAAP diluted earnings per share
$
0.78
$
0.71
Non-GAAP diluted earnings per share
$
1.54
$
1.34
Shares used in computing GAAP diluted
earnings per share
66,723
65,335
Shares used in computing non-GAAP diluted
earnings per share
66,723
65,335
NICE LTD. AND SUBSIDIARIES
RECONCILIATION OF GAAP TO NON-GAAP RESULTS (continued) U.S.
dollars in thousands
(1)
Share-based
Compensation
Quarter ended March
31,
2021
2020
Cost of cloud revenue
$
1,494
$
844
Cost of services revenue
2,435
1,600
Cost of product revenue
125
68
Research and development
4,057
2,615
Sales and marketing
10,908
5,177
General and administrative
12,687
11,341
$
31,706
$
21,645
(2)
Acquisition
related expenses
Quarter ended March
31,
2021
2020
Sales and marketing
$
-
$
88
General and administrative
-
1,493
$
-
$
1,581
View source
version on businesswire.com: https://www.businesswire.com/news/home/20210513005421/en/
Investors Marty Cohen, +1 551 256 5354, ET, ir@nice.com
Omri Arens, +972 9 775-3798, CET, ir@nice.com
Media Contact Chris Irwin-Dudek, +1 (551) 256-5140,
Chris.Irwin-Dudek@nice.com
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