Nice Ltd. · TASE:NICE
Nice — Investor Day (June 2023)
56 slides from Nice's investor day presentation, Jun 6, 2023
Slide 1: NICE Investor and Analyst Day
NICE Investor and Analyst Day June 6, 2023
Slide 2: Safe Harbor
Safe Harbor Forward Looking Statements: This presentation 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,” “int
Slide 3: Company Overview
COMPANY OVERVIEW Barak Eilam CEO
Slide 4: Employees, Countries, Fortune 100, Revenue
>2,600 >7,900 R&D Professionals $2.2B Employees Revenue >150 >$1.5B Countries Cloud ARR >85% Fortune >$1.8B Recurring 100 Customers Revenue 25K >$480M Customers Cash from Operations
Slide 5: The Cloud Leader Powering AI in Three Large Specialized Markets
THE Cloud Leader Powering AI in Three Large Specialized Markets CUSTOMER ENGAGEMENT FINANCIAL CRIME CRIMINAL JUSTICE Million New 20 Billion Interactions 67% Of All Financial Transactions 10 Digital Evidence/Day
Slide 6: Global Platform Leader
GLOBAL PLATFORM LEADER AI-IZATION DIGITALIZATION CLOUDIFICATION
Slide 7: 1M Agents on CXone, >1,000 New Cloud Logos
1M Agents >1,000 New 300 Cloud Customers on CXone CXone Logos in LTM Billing >$1M ARR 10X Increase 130% Digital Platform Digital Revenue Interaction Volume 2022 YoY Growth
Slide 8: Broadest Ecosystem
Technology Solution BROADEST Distributors PARTNER Solution ECOSYSTEM Partners Communication 260+ Global Service Providers CX Partners Global System 75% of Wins Integrators Involve Partners Technology 200+ Active Partners DEVone Partners Services 4x YoY Increase in Partners CXone Marketplace Bookings
Slide 9: The Leader in all CX Categories
CCaaS \WEM | aa: y ‘THE FORESTER WAVE™ i + Genesys Figure 1: Megic cuecrent foh ¥ S Contact Genter As A Sorvice Five ( “amazon Web j is \ y ) " Services ‘ y sting . Overns x Leaders Challengers Contenders Performers y x ¢ ~~ “ - DO cers: = tl nat - - Figure 5: 2022 Leaders & Standouts for Conversati
Slide 10: The NICE Journey
2023 and beyond 2021 - 2022 BRINGING IT ALL The NICE AI EXPANSION TOGETHER Journey • Enlighten AI Growth • $2B Total Revenue • Doubling Digital Revenue 2019 - 2020 DIGITAL EXPANSION 2017 - 2018 • Expanding to 35+ CLOUDIFICATION & digital channels PLATFORMIZATION • Significant self-service • CXone la
Slide 11: Proven Track Record
Proven Track Record 2014 2022 $14.2B $2.2B $7.62 $8.0B $1.8B $1.3B $625M $873M $3.6B $2.72 $408M $2.3B $193M $40M TAM REVENUE CLOUD RECURRING OPERATING EPS MARKET REVENUE REVENUE PROFIT CAP
Slide 12: Market Leading Profitable Growth
CLOUDIFICATION DIGITALIZATION Market Leading Profitable Growth AI-IZATION
Slide 13: Cloudification
CLOUDIFICATION Unique competitive landscape situation Thousands of CXone customers with 2x cross-sell opportunity 90% of our on- premise customers have yet to convert to cloud, potential of 3-10x uplift Large enterprise & international markets are next in line Only 20% industry cloud penetration
Slide 14: Digitalization
DIGITALIZATION Explosive growth in volume of digital interactions Replacement of gen1 digital CX with holistic customer service platform Increased TAM from contact center to customer service as a whole 80% of interactions take place outside contact center
Slide 15: AI-ization
From Labor TAM to Technology TAM The trusted AI for business with unmatched quality CX- labelled data Turbo charged contact center applications 3x-5x ARR expansion of existing customers taking on AI solutions AI-IZATION
Slide 16: Significant TAM Expansion in Cloud, Digital and AI
CLOUDIFICATION Significant TAM DIGITALIZATION Expansion in Cloud, Digital and AI 2022 2027 TAM $8B TAM $22B AI-IZATION
Slide 17: Redefining our TAM
REDEFINING our TAM CUSTOMER FINANCIAL CRIME PUBLIC SAFETY ENGAGEMENT & COMPLIANCE & JUSTICE From share of Agents From share of Banks From share of 911 Interactions To share of To share of To share of INTERACTIONS RISK EVENTS DIGITAL EVIDENCE
Slide 18: Positioned to Win
CXone is the most complete and adopted CX platform Enlighten, the only enterprise-grade AI for CX NICE is Largest and unique high-quality CX-labeled data POSITIONED Deep-rooted and well diversified customer base to WIN Decades of CX domain expertise with largest R&D investment Designed for scale and
Slide 19: Global Diversified and Seasoned Management Team
Yaron Hertz Barak Eilam Barry Cooper Darren Rushworth President, Americas Chief Executive Officer President, CX President, International 15 years 24 years 12 years 5 years at NICE at NICE at NICE at NICE Global Diversified and Beth Gaspich Chief Financial Officer Seasoned Craig Costigan CEO, NICE Ac
Slide 20: NICE Employees at-a-glance
NICE Employees at-a-glance 58% of EMPLOYEES are MILLENNIALS and GEN-Z TOTAL EMPLOYEES AVERAGE EMPLOYEE 7,900 TENURE 6 YEARS R&D EMPLOYEES OF MANAGERS 33% 50% ARE INTERNAL PROMOTIONS EMPLOYEES COME CURRENT EMPLOYEES FROM 33 COUNTRIES 20% JOINED VIA ACQUISITION
Slide 21: Cloudified, Pivoted, Expanded
Cloudified Pivoted CX Through Continued CCaaS Public Safety to Justice & Digital CX Leadership Expanded Doubled from CX to CXi Our Revenue Leveraging AI Long-Term Success Measures Completed Increased Actimize Cloudification Operating Margin to >35%
Slide 22: Financial Crime & Compliance
Financial Crime & Compliance Craig Costigan CEO, NICE Actimize
Slide 23: Financial Crime is Big Business
Financial Crime is BIG BUSINESS MONEY LAUNDERED ANNUALLY 2%-5% Global GDP DIGITAL FRAUD LOSSES 2023-27 $350B Globally ANNUAL SURVEILLANCE FINES $10B Globally
Slide 24: By the Numbers
10 of 10 4 of 5 Top US Banks 10 of 10 Top APAC Top EU Banks Banks 10 of 10 >5B Transactions Top Global Monitored Daily Investment Banks >800 BY THE NUMBERS >$6T Customers Protected Daily
Slide 25: Expansive & Highly Regulated Markets
Expansive & Highly Regulated Markets Virtual Payments Asset Networks Services Providers Banking Money Commercial Service Retail Bureaus Correspondent Payments Investment Services Providers Broker Dealers
Slide 26: Our Clients: All Markets, Tiers & Regions
Our Clients: All Markets, Tiers & Regions High-End Market FIs Mid-Market FIs Other
Slide 27: Global Partners
STRATEGIC RESELLERS 300+ Global SYSTEM INTEGRATORS Partners Massive STRATEGIC CONSULTANCIES Ecosystem increases our reach MARKETPLACE DATA & SOLUTION PROVIDERS
Slide 28: NICE Actimize The Leader across
Anti Intelligent Trade Money Fraud Surveillance Laundering Detection NICE Actimize THE Leader across
Slide 29: Our Portfolio
E2E Cross Channel Fraud Prevention Our Portfolio • Wire • Check • ACH • P2P INVESTIGATION AND CASE MANAGEMENT Entity Centric AML Holistic Surveillance • Suspicious Activity Monitoring • Trade • Customer Due Diligence • Communications ENTERPRISE FINANCIAL • Know Your Customer ANTI-MONEY FRAUD MARKETS
Slide 30: Cloud Platforms with a Purpose
Cloud Platforms with a Purpose Cloudifying Expanding the High-End in the Mid-Market • Industrialized and extensible platform • Out-of-the-box • Highly scalable • Highly integrated • Self-service tools • Fast deployment • Open for customer and partner development • Cost effective
Slide 31: Growth Areas
CLOUDIFICATION DIGITALIZATION 2-3X Opportunity Within Expansion In and Beyond Existing Client Base Traditional Banking GROWTH AREAS AI-IZATION Significant Premium Opportunity
Slide 32: What Continued Success Looks Like
What Continued Success Looks Like Doubling Target Addressable Market Generating Expanding Sales Channels Strong Acquiring New Logos Business Growth Upselling to Large Existing Client Base Increasing Recurring Revenue
Slide 33: Positioned to Win
Actimize brand and market leadership Loyal and largest global FI customer base Decades of regulatory and compliance domain expertise POSITIONED Enterprise-grade X-sight cloud platform for high-end market to WIN Out-of-the-box Xceed cloud platform for mid-market AI expertise delivering enhanced trans
Slide 34: Financial Overview
Financial Overview Beth Gaspich, CFO
Slide 35: Market Leading Profitable Growth
CLOUDIFICATION Market DIGITALIZATION Leading Profitable Growth A I - I Z AT I O N
Slide 36: Strong growth at unmatched scale outpacing CCaaS market
Strong growth at unmatched scale outpacing CCaaS market Revenue USD in Millions Cloud Revenue CAGR 28% $1.5 billion $1,600 $1,295 $1,023 $786 Q1 2023 Exit Cloud ARR $470 $599 2018 2019 2020 2021 2022 2023 Guidance (Midpoint) Cloud
Slide 37: Strong growth at unmatched scale outpacing CCaaS market
Revenue Strong growth $2,360 $2,181 at unmatched scale Total Revenue CAGR 10% $1,926 outpacing CCaaS market $1,577 $1,657 $1,453 USD in Millions Cloud Revenue CAGR 28% $1.5 billion $1,600 $1,295 $1,023 $786 Q1 2023 Exit Cloud ARR $470 $599 2018 2019 2020 2021 2022 2023 Guidance (Midpoint) Cloud Non-
Slide 38: Key Growth Levers
Existing New Customer Key Existing Customer Digital Logos Cross-sell & Up-sell GROWTH Conversion and AI LEVERS
Slide 39: New logos via increasing competitive displacements
New logos % of New Bookings that are Competitive Displacements via increasing competitive displacements in volume 31% and magnitude 25% 17% 63% 2020 – 2022 Average Deal Size Growth of Competitive Displacements 2020 2021 2022
Slide 40: Accelerated Upmarket Adoption with Large Enterprise Wins
Number of >$1M Cloud ARR customers Accelerated Upmarket Adoption with increasing ~300 large enterprise wins 38% Q1 2019 – Q1 2023 CAGR in # of >$1M <100 Cloud Customers Q1 2019 Q1 2023
Slide 41: Breadth and Depth of Platforms Lead to Cross-sell and Up-sell
% of New Bookings that are Portfolio Deals Breadth and Depth of our Market leading Platforms 48% lead to unmatched cross- 41% sell and up-sell opportunities 31% 79% 2020 – 2022 Growth in New Bookings of Portfolio Deals 2020 2021 2022
Slide 42: Recurring Revenue Expansion
Recurring Revenue Expansion Significant expansion (% of Total Revenue) $1,795 M opportunity to migrate 82% Non-Cloud existing on-premise 79% 80% Recurring Revenue customers to our cloud $500 M 3x-10x 69% 72% Cloud Uplift in ARR when migrating on-prem WEM $1,295 M customers to CXone ~$500 million 202
Slide 43: Digital and AI
Digital and AI Digital and AI Digital Revenue Attach Rates 33% CAGR 468% 22% 2% 2020 2021 2022 2020 2021 2022
Slide 44: Digital and AI Monetization
Digital and Al Monetization NICE | interactions
Slide 45: Customers Served
Needs Events Purchase Resolve Digital Scripted Knowledge Intelligent Proactive Voice Projection Automation Conversations Scheduling Channels Automation Customer IVR ACD Research Order Status Service Customers Served 20% 100%
Slide 46: The AI Opportunity in Customer Service
The AI Opportunity in Customer Service Mass Skilled Labor Decision Personalization Amplification Velocity at Scale
Slide 47: The AI Opportunity in Customer Service
The AI Opportunity in Customer Service Mass Skilled Labor Decision Personalization Amplification Velocity at Scale Covering 100% of Labor TAM → AI Premium Interactions at Technology TAM Pricing Any Touchpoint
Slide 48: Long-Term Expansion: >$7M ARR Customer
Customer Journey Insurance Company Total ARR CAGR 28% Long-Term Expansion >$7M ARR customer 2015 2016 2017 2018 2019 2020 2021 2022 OCR Digital WEM
Slide 49: Digital-First Example: >$2M ARR Customer
>18x Customer Journey Digital and Financial Services Company Self-Service Digital-First Example >$2M ARR customer OCR and WEM Digital and Self-Service Q1/2022 Q1/2023 OCR and WEM Digital and Self-Service
Slide 50: Digital-Only Example: >$6M ARR Customer
>2x Customer Journey Telecommunications Company Digital-Only Example >$6M ARR customer Q2/2022 Q1/2023
Slide 51: Profitable Expansion
Profitable Expansion NICE | interactions
Slide 52: Profitable Cloud Expansion Driven by Increased Scale
Cloud Gross Profit and Margin 70.0% Profitable Cloud Expansion 67.7% 70.0% driven by increased scale 1000 65.6% $906 65.0% 61.7% 61.8% 800 $692 60.0% USD in Millions Margin (%) 600 $516 55.0% 400 $370 50.0% $290 +800 bps 200 45.0% 2018-2022 Cloud Gross Margin 0 40.0% 2018 2019 2020 2021 2022 Cloud G
Slide 53: Operating Income and EBITDA
Operating Income and EBITDA Best-in-class Operating 694 33.0% 700 Income and EBITDA 608 32.0% 600 driven by Cloud GM 494 537 31.0% 500 expansion Profit Margin (%) 433 USD in Millions 30.0% 400 28.7% 29.0% 28.4% 28.2% 300 625 28.0% 27.5% 544 12% 13% 200 26.4% 434 470 27.0% 2018-2022 2018-2022 100 384
Slide 54: Executing on Accelerated $250M Share Repurchase Plan
Executing on Accelerated $250M Share Repurchase Plan by end of 2023 Shares $120 repurchased $130 USD in millions 52% Executed as of May 31, 2023 Amount Purchased Remaining
Slide 55: Mid-Term Financial Targets
Mid-Term Financial Targets TOTAL CLOUD RECURRING REVENUE REVENUE REVENUE Double-digit 85% OF 95% OF growth REVENUE REVENUE CLOUD OPERATING GROSS MARGIN MARGIN > 75% > 35%
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