Slide 1: 2023 Third Quarter Results
2023 Third Quarter Results Ended September 30, 2023
Slide 2: Forward Looking Statements Disclaimer
Forward Looking Statements Disclaimer 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,” “inten
Slide 3: Q3 2023 Highlights, Income Statement, Balance Sheet, Outlook
Q3 2023 Highlights Income Statement Balance Sheet and Cash Flow Analysis Outlook 3
Slide 4: Q3 2023 Highlights (Non-GAAP)
Q3 2023 Highlights (Non-GAAP) Total revenue Cloud revenue Cloud revenue as a Recurring revenue of increased 8% to increased 22% to percentage of total $524M represented a $601M; compared to $403M; compared to revenue was 67% record 87% of total $555M in Q3 2022 $330M in Q3 2022 compared to 60% in re
Slide 5: Impressive Growth and Execution
Impressive Growth and Execution TOTAL REVENUE (Non-GAAP, $M) • Total revenue increased 8% in Q3 2023 driven by 8% 22% growth in cloud revenue 601 • Cloud revenue in Q3 2023 of $403M represented a 555 record 67% of total revenue • Recurring revenue accounted for 87% of total revenue for Q3 2023 Q3 22
Slide 6: Q3 2023 Highlights, Income Statement, Balance Sheet, Outlook
Q3 2023 Highlights Income Statement Balance Sheet and Cash Flow Analysis Outlook 6
Slide 7: GAAP and Non-GAAP Income Statement
GAAP and Non-GAAP Income Statement USD in thousands (except EPS) 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
Slide 8: GAAP and Non-GAAP Income Statement (cont.)
GAAP and Non-GAAP Income Statement (cont.) USD in thousands (except EPS) Quarter ended Year to date September 30, September 30, 2023 2022 2023 2022 GAAP net income $ 92,353 $ 71,246 $ 256,649 $ 194,759 Valuation adjustment on acquired deferred cost of cloud revenue - (13) - (41) Amortization of acqu
Slide 9: GAAP and Non-GAAP Income Statement (cont.)
GAAP and Non-GAAP Income Statement (cont.) USD in thousands (except EPS) (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 reve
Slide 10: Non-GAAP EBITDA Reconciliation
Non-GAAP EBITDA Reconciliation USD in thousands NICE LTD. AND SUBSIDIARIES RECONCILIATION OF GAAP NET INCOME TO NON-GAAP EBITDA U.S. dollars in thousands Quarter ended Year to date September 30, September 30, 2023 2022 2023 2022 GAAP net income $ 92,353 $ 71,246 $ 256,649 $ 194,759 Non-GAAP adjustme
Slide 11: Revenue Breakdown by Business Model (Non-GAAP)
Q3 2023 Revenue Breakdown by Business Model (Non-GAAP) 6% PRODUCT 67% $38M, -36% YoY CLOUD $403M, +22% YoY 27% SERVICES $160M, -3% YoY 11
Slide 12: Revenue Breakdown by Region (Non-GAAP)
Q3 2023 Revenue Breakdown by Region 84% 10% (Non-GAAP) AMERICAS EMEA $502M, +10% YoY $60M, -2% YoY 6% APAC $39M, +10% YoY 12
Slide 13: Revenue Breakdown by Business Unit (Non-GAAP)
Q3 2023 Revenue Breakdown 83% 17% by Business Unit FINANCIAL CUSTOMER CRIME & (Non-GAAP) ENGAGEMENT COMPLIANCE $498M, +10% YoY $103M, 0% YoY 13
Slide 14: Gross Profit Q3 2023 (Non-GAAP)
Gross Profit Q3 2023 (Non-GAAP) $500 6% $434M $450 $408M $400 $350 $300 $250 $200 Q3 22 Q3 23
Slide 15: Gross Margin Q3 2023 (Non-GAAP)
Gross Margin Q3 2023 (Non-GAAP) PRODUCT SERVICES CLOUD MARGIN MARGIN MARGIN -370bp -40bp 0bp Product GM Product 89.8% GM 86.1% Services Services GM GM Cloud Cloud 74.0% 73.6% GM GM 70.4% 70.4% Q3 22 Q3 23 Q3 22 Q3 23 Q3 22 Q3 23 15
Slide 16: Operating Income Q3 2023 (Non-GAAP)
Operating Income Q3 2023 (Non-GAAP) $200 15% $184M $180 $159M $160 $140 $120 $100 $80 $60 $40 $20 $0 Q3 22 Q3 23 16
Slide 17: Cost Ratios Q3 2023 (Non-GAAP)
Cost Ratios Q3 2023 (Non-GAAP) R&D S&M G&A as % of revenue as % of revenue as % of revenue S&M 24.8% S&M 21.4% R&D R&D 14.4% 14.8% 2.4%* 2.1%* G&A G&A 12.0% 12.7% 8.0% 7.5% Q3 22 Q3 23 Q3 22 Q3 23 Q3 22 Q3 23 17 * R&D capitalization
Slide 18: EBITDA Q3 2023 (Non-GAAP)
EBITDA Q3 2023 (Non-GAAP) 16% $203M $200 $175M $150 $100 $50 $0 Q3 22 Q3 23 18
Slide 19: Q3 2023 Highlights, Income Statement, Balance Sheet, Outlook
Q3 2023 Highlights Income Statement Balance Sheet and Cash Flow Analysis Outlook 19
Slide 20: Condensed Consolidated Balance Sheet
Condensed Consolidated Balance Sheet USD in thousands September 30, December 31, September 30, December 31, 2023 2022 2023 2022 Unaudited Audited Unaudited Audited ASSETS LIABILITIES AND SHAREHOLDERS' EQUITY CURRENT ASSETS: CURRENT LIABILITIES: Cash and cash equivalents $ 713,090 $ 529,596 Trade pay
Slide 21: Cash Flow From Operations and Free Cash Flow
Cash Flow From Operations and Free Cash Flow $M Q3 23 Q3 22 Cash flow from operations 120.6 94.3 Capital expenditure of property and equipment (5.5) (6.1) Capitalization of software development (12.5) (13.4) Free cash flow 102.6 74.8 Free cash flow margin 17% 13% Cash conversion rate * 0.7 0.6 * Cas
Slide 22: Cash and Investments (USD in Millions)
Cash and Investments (USD in Millions) September 30, 2023 219 64 381 18 1,572 1,652 Liquidity Operating CF Buyback CAPEX* Acquisitions Liquidity 12/31/22 09/30/23 *CAPEX movement includes R&D capitalization 22
Slide 23: Q3 2023 Highlights, Income Statement, Balance Sheet, Outlook
Q3 2023 Highlights Income Statement Balance Sheet and Cash Flow Analysis Outlook 23
Slide 24: Outlook (Non-GAAP)
Outlook* (Non-GAAP) FY 2023 Revenue ($M) 2,359 – 2,379 EPS ($) 8.58 – 8.78 *The outlook is provided as of November 16, 2023. There is no guarantee that the Company will change or update these figures in this presentation should a need arise in the future to update the outlook. This is in addition to
Slide 25: Thank You
Thank You