Cloud Revenue Increased 29% with Record
Cloud Gross Margin
Record $193 Million Cash Flow Generated from
Operations
Company Raises Both Revenue and EPS Guidance
for Full Year 2022
NICE (NASDAQ: NICE) today announced results for the first quarter
ended March 31, 2022.
First Quarter 2022 Financial Highlights
GAAP
Non-GAAP
Revenue
of $527 million, growth of 15.9% year-over-year
Revenue
of $527 million, growth of 15.4% year-over-year
Cloud
revenue of $295 million, growth of 29.2% year-over-year
Cloud
revenue of $295 million, growth of 28.1% year-over-year
Gross
margin of 68.3% compared to 67.5% last year
Gross
margin of 73.0% compared to 72.7% last year
Operating income of $72 million compared to
$66 million last year, growth of 8.9% year-over-year
Operating income of $149 million compared to
$129 million last year, growth of 15.7% year-over-year
Operating margin of 13.7% compared to 14.6%
last year
Operating margin of 28.3%, compared to 28.2%
last year
Diluted
EPS of $0.87 versus $0.78 last year
Diluted
EPS of $1.80 versus $1.54 last year, growth of 16.9%
Operating cash flow increased 17.3% to $193
million compared to last year
“The excellent financial results we delivered and the rising
momentum we experienced throughout last year continued into the
first quarter of 2022 as we reported a 16% increase in total
revenue with a robust underlying 29% growth in cloud revenue,” said
Barak Eilam, CEO, NICE. “Demand is strong, and we are seeing it
across the board in our business. Our exceptional financial profile
of double-digit top line growth combined with best-in-class
profitability, outstanding cash generation and a rock-solid balance
sheet, uniquely positions us in our industry to further cement our
leadership,” said Barak Eilam, CEO, NICE.
Mr. Eilam continued, “Three key elements are driving our
continued strong revenue growth and excellent profitability: our
widening leadership in the large enterprise market, our industry
leading international footprint, and our unparalleled next-gen
digital and AI offering. These three elements, combined with strong
and durable demand in our markets, are providing us the fuel to
continue executing well on our long-term strategy.”
GAAP Financial Highlights for the First
Quarter Ended March 31:
Revenues: First quarter 2022 total revenues increased
15.9% to $527.4 million compared to $455.0 million for the first
quarter of 2021.
Gross Profit: First quarter 2022 gross profit was $360.4
million compared to $307.2 million for the first quarter of 2021.
First quarter 2022 gross margin was 68.3% compared to 67.5% for the
first quarter of 2021.
Operating Income: First quarter 2022 operating income was
$72.4 million compared to $66.5 million for the first quarter of
2021. First quarter 2022 operating margin was 13.7% compared to
14.6% for the first quarter of 2021.
Net Income: First quarter 2022 net income was $57.9
million compared to $52.2 million for the first quarter of 2021.
First quarter 2022 net income margin was 11.0% compared to 11.5%
for the first quarter of 2021.
Fully Diluted Earnings Per Share: Fully diluted earnings
per share for the first quarter of 2022 was $0.87 compared to $0.78
in the first quarter of 2021.
Operating Cash Flow and Cash Balance: First quarter 2022
operating cash flow was $192.7 million. In the first quarter, $63.8
million were used for share repurchases. As of March 31, 2022,
total cash and cash equivalents, short and long term investments
were $1,490.8 million. Our debt, net of a hedge instrument, was
540.8 million dollars, resulting in net cash and investments of
950.0 million dollars.
Non-GAAP Financial Highlights for the
First Quarter Ended March 31:
Revenues: First quarter 2022 total revenues increased
15.4% to $527.4 million compared to $457.0 million for the first
quarter of 2021.
Gross Profit: First quarter 2022 Non-GAAP gross profit
increased to $385.2 million compared to $332.1 million for the
first quarter of 2021. First quarter 2022 Non-GAAP gross margin was
73.0% compared to 72.7% for the first quarter of 2021.
Operating Income: First quarter 2022 Non-GAAP operating
income increased to $149.0 million compared to $128.8 million for
the first quarter of 2021. First quarter 2022 Non-GAAP operating
margin was 28.3% compared to 28.2% for the first quarter of
2021.
Net Income: First quarter 2022 Non-GAAP net income
increased to $120.5 million compared to $102.8 million for the
first quarter of 2021. First quarter 2022 Non-GAAP net income
margin totaled 22.8% compared to 22.5% for the first quarter of
2021.
Fully Diluted Earnings Per Share: First quarter 2022
Non-GAAP fully diluted earnings per share increased 16.9% to $1.80
compared to $1.54 for the first quarter of 2021.
Second Quarter and Full Year 2022
Guidance:
Second Quarter 2022: Second quarter 2022 Non-GAAP total
revenues are expected to be in a range of $520 million to $530
million. Second quarter 2022 Non-GAAP fully diluted earnings per
share is expected to be in a range of $1.75 to $1.85.
Raising Full Year 2022 Guidance: Full year 2022 Non-GAAP
total revenues are expected to be in a range of $2,160 million to
$2,180 million (compared to previous guidance range of $2,140
million to $2,160 million). Full year 2022 Non-GAAP fully diluted
earnings per share is expected to be in a range of $7.25 to $7.45
(compared to previous guidance range of $7.07 to $7.27).
Quarterly Results Conference Call
NICE management will host its earnings conference call today May
12, 2022, 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 expenses, amortization of discount on
debt and loss from extinguishment of debt and the tax effect of the
Non-GAAP adjustments. The Company early adopted ASU 2021-08,
Business Combinations, effective January 1, 2021. The amendments in
ASU 2021-08 require acquiring entities to apply Topic 606 to
recognize and measure contract assets and contract liabilities in a
business combination. The Company applied the new guidance
retrospectively to all business combinations for which the
acquisition date occurred on or after January 1, 2021, therefore
comparative financials were not adjusted. Through December 31, 2020
business combination accounting rules required 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 was based on its fair value at the date of acquisition.
Comparative financials 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, uncertainty
related to COVID-19 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 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 SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE
SHEETS
U.S. dollars in thousands
March 31,
December 31,
2022
2021
Unaudited
Audited
ASSETS
CURRENT ASSETS:
Cash and cash equivalents
$
471,715
$
378,656
Short-term investments
1,019,092
1,046,095
Trade receivables
416,716
395,583
Debt hedge option
154,464
292,940
Prepaid expenses and other current
assets
205,248
184,604
Total current assets
2,267,235
2,297,878
LONG-TERM ASSETS:
Property and equipment, net
151,455
145,654
Deferred tax assets
62,300
55,246
Other intangible assets, net
266,542
295,378
Operating lease right-of-use assets
81,031
85,055
Goodwill
1,602,493
1,606,756
Prepaid expenses and other long-term
assets
229,573
224,445
Total long-term assets
2,393,394
2,412,534
TOTAL ASSETS
$
4,660,629
$
4,710,412
LIABILITIES AND SHAREHOLDERS'
EQUITY
CURRENT LIABILITIES:
Trade payables
$
45,197
$
36,121
Deferred revenues and advances from
customers
384,344
330,459
Current maturities of operating leases
19,028
19,514
Debt
241,190
395,946
Accrued expenses and other liabilities
516,630
487,547
Total current liabilities
1,206,389
1,269,587
LONG-TERM LIABILITIES:
Deferred revenues and advances from
customers
63,981
66,606
Operating leases
76,616
81,185
Deferred tax liabilities
6,865
7,429
Debt
454,106
429,267
Other long-term liabilities
17,958
18,379
Total long-term liabilities
619,526
602,866
SHAREHOLDERS' EQUITY
Nice Ltd's equity
2,821,750
2,825,085
Non-controlling interests
12,964
12,874
Total equity
2,834,714
2,837,959
TOTAL LIABILITIES AND SHAREHOLDERS'
EQUITY
$
4,660,629
$
4,710,412
NICE LTD. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF
INCOME
U.S. dollars in thousands (except per
share amounts)
Quarter ended
March 31,
2022
2021
Unaudited
Unaudited
Revenue:
Cloud
$
294,592
$
228,081
Services
156,974
161,791
Product
75,863
65,149
Total revenue
527,429
455,021
Cost of revenue:
Cloud
113,349
93,582
Services
46,908
48,934
Product
6,745
5,346
Total cost of revenue
167,002
147,862
Gross profit
360,427
307,159
Operating expenses:
Research and development, net
76,578
59,155
Selling and marketing
152,618
128,559
General and administrative
58,867
52,972
Total operating expenses
288,063
240,686
Operating income
72,364
66,473
Financial and other expense/(income),
net
(486
)
3,394
Income before tax
72,850
63,079
Taxes on income
14,909
10,868
Net income
$
57,941
$
52,211
Basic
$
0.91
$
0.83
Diluted
$
0.87
$
0.78
Weighted average shares outstanding:
Basic
63,736
63,085
Diluted
66,853
66,723
NICE LTD. AND SUBSIDIARIES
CONSOLIDATED CASH FLOW
STATEMENTS
U.S. dollars in thousands
Quarter ended
March 31,
2022
2021
Unaudited
Unaudited
Operating
Activities
Net income
$
57,941
$
52,211
Adjustments to reconcile net income to net
cash provided by operating activities
Depreciation and amortization
44,281
44,924
Stock based compensation
48,184
31,455
Amortization of premium and discount and
accrued interest on marketable securities
3,818
3,931
Deferred taxes, net
(1,796
)
(858
)
Changes in operating assets and
liabilities:
Trade Receivables, net
(21,259
)
(19,684
)
Prepaid expenses and other current
assets
(28,931
)
(10,860
)
Operating lease right-of-use assets
3,942
4,481
Trade payables
9,078
9,704
Accrued expenses and other current
liabilities
29,229
(1,365
)
Deferred revenue
52,349
51,903
Operating lease liabilities
(4,997
)
(5,697
)
Amortization of discount on long term
debt
1,137
4,099
Loss from extinguishment of debt
1,092
(5
)
Other
(1,357
)
-
Net cash provided by operating
activities
192,711
164,239
Investing
Activities
Purchase of property and equipment
(9,584
)
(2,329
)
Purchase of Investments
(98,266
)
(153,306
)
Proceeds from Investments
101,666
54,577
Capitalization of software development
costs
(10,671
)
(10,116
)
Proceeds from business and asset
acquisitions adjustments
-
444
Net cash used in investing activities
(16,855
)
(110,730
)
Financing
Activities
Proceeds from issuance of shares upon
exercise of share options
75
292
Purchase of treasury shares
(63,842
)
(44,222
)
Repayment of debt
(18,093
)
-
Net cash provided by/(used in) financing
activities
(81,860
)
(43,930
)
Effect of exchange rates on cash and cash
equivalents
(937
)
(718
)
Net change in cash and cash
equivalents
93,059
8,861
Cash and cash equivalents, beginning of
period
$
378,656
$
442,267
Cash and cash equivalents, end of
period
$
471,715
$
451,128
NICE LTD. AND SUBSIDIARIES
RECONCILIATION OF GAAP TO NON-GAAP
RESULTS
U.S. dollars in thousands (except per
share amounts)
Quarter ended
March 31,
2022
2021
GAAP revenues
$
527,429
$
455,021
Valuation adjustment on acquired deferred
cloud revenue
-
1,823
Valuation adjustment on acquired deferred
services revenue
-
106
Non-GAAP revenues
$
527,429
$
456,950
GAAP cost of revenue
$
167,002
$
147,862
Amortization of acquired intangible assets
on cost of cloud
(18,665
)
(17,515
)
Amortization of acquired intangible assets
on cost of services
(377
)
(1,225
)
Amortization of acquired intangible assets
on cost of product
(276
)
(283
)
Valuation adjustment on acquired deferred
cost of cloud
15
25
Cost of cloud revenue adjustment (1)
(2,324
)
(1,494
)
Cost of services revenue adjustment
(1)
(2,967
)
(2,435
)
Cost of product revenue adjustment (1)
(132
)
(125
)
Non-GAAP cost of revenue
$
142,276
$
124,810
GAAP gross profit
$
360,427
$
307,159
Gross profit adjustments
24,726
24,981
Non-GAAP gross profit
$
385,153
$
332,140
GAAP operating expenses
$
288,063
$
240,686
Research and development (1)
(8,515
)
(4,057
)
Sales and marketing (1)
(16,269
)
(10,908
)
General and administrative (1)
(18,400
)
(12,687
)
Amortization of acquired intangible
assets
(8,811
)
(9,709
)
Valuation adjustment on acquired deferred
commission
53
53
Non-GAAP operating expenses
$
236,121
$
203,378
GAAP financial and other (income)/expense,
net
$
(486
)
$
3,394
Amortization of discount and loss of
extinguishment on debt
(2,229
)
(4,125
)
Non-GAAP financial and other income,
net
$
(2,715
)
$
(731
)
GAAP taxes on income
$
14,909
$
10,868
Tax adjustments re non-GAAP
adjustments
16,351
15,814
Non-GAAP taxes on income
$
31,260
$
26,682
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,
2022
2021
GAAP net income
$
57,941
$
52,211
Valuation adjustment on acquired deferred
revenue
-
1,929
Valuation adjustment on acquired deferred
cost of cloud revenue
(15
)
(25
)
Amortization of acquired intangible
assets
28,129
28,732
Valuation adjustment on acquired deferred
commission
(53
)
(53
)
Share-based compensation (1)
48,607
31,706
Amortization of discount and loss of
extinguishment on debt
2,229
4,125
Tax adjustments re non-GAAP
adjustments
(16,351
)
(15,814
)
Non-GAAP net income
$
120,487
$
102,811
GAAP diluted earnings per share
$
0.87
$
0.78
Non-GAAP diluted earnings per share
$
1.80
$
1.54
Shares used in computing GAAP diluted
earnings per share
66,853
66,723
Shares used in computing non-GAAP diluted
earnings per share
66,853
66,723
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,
2022
2021
Cost of cloud revenue
$
2,324
$
1,494
Cost of services revenue
2,967
2,435
Cost of product revenue
132
125
Research and development
8,515
4,057
Sales and marketing
16,269
10,908
General and administrative
18,400
12,687
$
48,607
$
31,706
View source
version on businesswire.com: https://www.businesswire.com/news/home/20220512005451/en/
Investors Marty Cohen, +1 551 256 5354, ET, ir@nice.com
Omri Arens, +972 3 763-0127, CET, ir@nice.com Media Contact
Chris Irwin-Dudek, +1 (551) 256-5140,
Chris.Irwin-Dudek@nice.com
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