Slide 1: 2018 First Quarter Results
2018 FIRST QUARTER RESULTS Ended March 31, 2018
Slide 2: Forward Looking Statements Disclaimer
Forward Looking Statements Disclaimer This presentation contains statements, including statements about future plans and expectations, which constitute forward- looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward looking statements are generall
Slide 3: Explanation of Non-GAAP measures
Explanation of Non-GAAP measures Non-GAAP financial measures consist of GAAP financial measures adjusted to exclude: amortization of acquired intangible assets, share-based compensation, certain business combination accounting entries, amortization of discount on long term debt, ASC 606 to ASC 605 a
Slide 4: Q1 2018 Highlights, Income Statement, Balance Sheet and Cash Flow, Outlook
Q1 2018 Highlights Income Statement Balance Sheet and Cash Flow Analysis Outlook
Slide 5: Q1 2018 Highlights
Q1 2018 Highlights* Revenue of $341M; Cloud revenue Recurring revenue Gross profit growth of 11% increased 33% increased to 69% increased 12%; compared to Q1 to $106M of total revenue gross margin last year compared to 65% increased to last year 70.6% from 69.9% last year Operating income EPS of $1.
Slide 6: Income Statement
Q1 2018 Highlights Income Statement Balance Sheet and Cash Flow Analysis Outlook
Slide 7: Strong Growth and Execution
Strong Growth and Execution* REVENUES (Non-GAAP, $M) 400 341 • Revenue increased 11% year-over-year 308 300 • Revenue increase was driven by strong cloud revenue growth of 33% 200 11% • Recurring revenue accounted for 69% of total revenue in the first quarter of 2018 compared 100 to 65% in the same
Slide 8: GAAP and Non-GAAP Income Statement
GAAP and Non-GAAP Income Statement* $M (except EPS) Q1 2018 Q1 2017 GAAP revenue 335.4 305.6 Valuation adjustment on acquired deferred product revenue 0.0 0.2 Valuation adjustment on acquired deferred service revenue 0.3 1.0 Valuation adjustment on acquired deferred cloud revenue 1.9 1.2 ASC 606 to
Slide 9: GAAP and Non-GAAP Income Statement (cont.)
GAAP and Non-GAAP Income Statement* (cont.) $M (except EPS) Q1 2018 Q1 2017 GAAP finance & other expense, net (4.0) (9.0) Amortization of discount on long term debt 2.2 7.2 Non-GAAP finance & other income (expense), net (1.8) (1.8) GAAP taxes on income 6.7 1.7 Tax adjustment re non-GAAP adjustments
Slide 10: Revenue Breakdown by Region (Non-GAAP)
Q1 2018 Revenue Breakdown by Region* (Non-GAAP) 76% 16% AMERICAS EMEA $257M, +8% YoY $56M, +26% YoY 8% APAC $28M, +12% YoY * All numbers presented are Non-GAAP under ASC 605 10
Slide 11: Revenue Breakdown by Business Unit (Non-GAAP)
Q1 2018 Revenue Breakdown by Business Unit* (Non-GAAP) 19% FINANCIAL CRIME & COMPLIANCE $66M, +2% YoY 81% CUSTOMER ENGAGEMENT $275M, +13% YoY * All numbers presented are Non-GAAP under ASC 605 11
Slide 12: Gross Profit and Gross Margin (Non-GAAP)
Gross Profit and Gross Margin* (Non-GAAP) 300 90,0% 241 250 215 200 80,0% 150 70,6% 100 70,0% 69,9% 50 60,0% 0 Q1 17 Q1 18 Gross Income Gross Margin • Gross margin continued to expand as a result of strong gross margins in all lines of our business combined with continued sequential improvement in o
Slide 13: Gross Margin Q1 2018 (Non-GAAP)
Gross Margin Q1 2018* (Non-GAAP) PRODUCT MARGIN SERVICES MARGIN CLOUD MARGIN 91.6%| +130bp 67.0%| +110bp 63.5%| +320bp Product GM Product GM 91,6% 90,3% Service GM Service GM 67,0% 65,9% Cloud GM Cloud 63,5% GM 60,3% Q1 17 Q1 18 Q1 17 Q1 18 Q1 17 Q1 18 • Continued expansion in the services gross mar
Slide 14: Operating Income and Operating Margin (Non-GAAP)
Operating Income and Operating Margin* (Non-GAAP) 40,0% 90 84 35,0% 80 74 30,0% 70 24,6% 25,0% 23,9% 60 20,0% 50 15,0% 40 10,0% 30 Q1 17 Q1 18 Operating Income Operating Margin • Increase in operating income and operating margin expansion is a result of revenue growth and gross margin improvement 14
Slide 15: Cost Ratio Q1 2018 (Non-GAAP)
Cost Ratio Q1 2018* (Non-GAAP) R&D S&M G&A As % of revenue As % of revenue As % of revenue S&M S&M 24,0% G&A 23,9% R&D 9,3% G&A 13,2% R&D 8,9% 12,8% Q1 17 Q1 18 Q1 17 Q1 18 Q1 17 Q1 18 * All numbers presented are Non-GAAP under ASC 605 15
Slide 16: Analytics (% of New Bookings)
Analytics (% of New Bookings) 58% 58% 54% 55% 48% Q1 14 Q1 15 Q1 16 Q1 17 Q1 18 16
Slide 17: Balance Sheet and Cash Flow Analysis
Q1 2018 Highlights Income Statement Balance Sheet and Cash Flow Analysis Outlook
Slide 18: Balance Sheet
Balance Sheet* March 31, 2018 Assets ($M) 03/31/2018 12/31/2017 Equity & Liabilities ($M) 03/31/2018 12/31/2017 Cash and cash equivalents 334.4 328.3 Trade payables 24.0 29.4 Short term investments 134.1 64.0 Deferred revenue and advances from customers 235.3 184.6 Trade receivables 232.5 230.7 Accr
Slide 19: Cash Flow From Operations
Cash Flow From Operations $M Q1 18 Q1 17 %∆ Cash flow from operations 136.9 132.7 3% - Capital expenditure 5.3 10.4 (49%) - Capitalization of software development 7.8 6.9 13% Cash flow from operations after capex & software capitalization 123.8 115.4 7.3% Cash flow from operation after capex and sof
Slide 20: Cash Movement and Liquidity
Cash Movement and Liquidity March 31, 2018 Proceeds from Options Other CAPEX* Operating CF Exercise - $1 -$13 Buyback $3 -$4 Liquidity 03/31/18 $137 $647 Liquidity 12/31/2017 $525 * CAPEX movement includes R&D capitalization 20
Slide 21: Outlook
Q1 2018 Highlights Income Statement Balance Sheet and Cash Flow Analysis Outlook
Slide 22: Outlook (Non-GAAP)
Outlook* (Non-GAAP) Q2 2018 FY 2018 Revenue ($M) 338-348 1,434-1,458 EPS ($) 1.00-1.06 4.43-4.63 The outlook is provided as of May 10, 2018. 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 i
Slide 23: NICE
NICE