Slide 1: 2020 Fourth Quarter and Full Year Results
2020 FOURTH QUARTER AND FULL YEAR RESULTS Ended December 31, 2020
Slide 2: Forward Looking Statements Disclaimer
Forward Looking Statements Disclaimer 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,” “inte
Slide 3: Explanation of Non-GAAP measures
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 disc
Slide 4: Q4 and Full Year 2020 Highlights
Q4 and Full Year 2020 Highlights Income Statement Balance Sheet and Cash Flow Analysis Outlook
Slide 5: Full Year 2020 Highlights
Full Year 2020 Highlights* Record revenue for FY cloud revenue FY cloud gross FY recurring FY; $1,657M, an increased 31%; to margin increased revenue increased increase of 5% $786M compared to 380 bps to 65.6%; to 79% of total $599M last year compared to revenue; compared 61.8% last year to 72% last
Slide 6: Income Statement
Q4 and Full Year 2020 Highlights Income Statement Balance Sheet and Cash Flow Analysis Outlook
Slide 7: Solid Growth and Execution
Solid Growth and Execution REVENUES (Non-GAAP, $M) • Record revenue in Q4 and FY 2020 • Cloud revenue increased 33% and 31% in Q4 and FY 2020, respectively • Cloud revenue represented 51% of total 5% revenue in Q4 and 47% in FY 2020, compared to 39% and 38% in Q4 and FY 2019, 2% respectively • Recur
Slide 8: GAAP and Non-GAAP Income Statement
GAAP and Non-GAAP Income Statement (USD in thousands except EPS) NICE LTD. AND SUBSIDIARIES RECONCILIATION OF GAAP TO NON-GAAP RESULTS U.S. dollars in thousands (except per share amounts) Quarter ended Year ended December 31, December 31, 2020 2019 2020 2019 GAAP revenues $ 434,581 $ 430,208 $ 1,648
Slide 9: GAAP and Non-GAAP Income Statement
GAAP and Non-GAAP Income Statement (USD in thousands except EPS) GAAP financial and other expense, net $ 2,600 $ 554 $ 4,859 $ 4,444 Amortization of discount on debt (5,353) (2,388) (13,297) (9,235) Non-GAAP financial and other income, net $ (2,753) $ (1,834) $ (8,438) $ (4,791) GAAP taxes on income
Slide 10: GAAP and Non-GAAP Income Statement (cont.)
GAAP and Non-GAAP Income Statement (cont.) (USD in thousands) (1) Share-based Compensation Quarter ended Year ended December 31, December 31, 2020 2019 2020 2019 Cost of product revenue $ 131 $ (131) $ 336 $ 173 Cost of services revenue 2,593 1,941 7,550 8,192 Cost of cloud revenue 1,457 813 4,058 2
Slide 11: Q4 2020 Revenue Breakdown by Region (Non-GAAP)
Q4 2020 Revenue Breakdown by Region (Non-GAAP) 83% 11% AMERICAS EMEA $364M, +11% YoY $48M, -15% YoY 6% APAC $26M, -43% YoY
Slide 12: Full Year 2020 Revenue Breakdown by Region (Non-GAAP)
Full Year 2020 Revenue Breakdown by Region (Non-GAAP) 82% 11% AMERICAS EMEA $1,361M, +10% YoY $186M, -14% YoY 7% APAC $110M, -11% YoY
Slide 13: Q4 2020 Revenue Breakdown by Business Unit (Non-GAAP)
Q4 2020 Revenue Breakdown by Business Unit (Non-GAAP) 18% FINANCIAL CRIME & COMPLIANCE $78M, -19% YoY 82% CUSTOMER ENGAGEMENT $361M, +8% YoY
Slide 14: Full Year 2020 Revenue Breakdown by Business Unit (Non-GAAP)
Full Year 2020 Revenue Breakdown by Business Unit (Non-GAAP) 19% FINANCIAL CRIME & COMPLIANCE $308M, 0% YoY 81% CUSTOMER ENGAGEMENT $1,349M, 6% YoY
Slide 15: Gross Profit and Gross Margin Q4 and FY 2020 (Non-GAAP)
Gross Profit and Gross Margin Q4 and FY 2020 (Non-GAAP)
Slide 16: Gross Margin Q4 2020 (Non-GAAP)
Gross Margin Q4 2020 (Non-GAAP) PRODUCT MARGIN SERVICES MARGIN CLOUD MARGIN 89.8%| -390bp 73.9%| +193bp 67.6%| +388bp Product GM Product GM Service GM Service GM Cloud GM Cloud GM • Product gross margin declined due to different product mix • Services gross margin increased as a result of continued
Slide 17: Gross Margin Full Year 2020 (Non-GAAP)
Gross Margin Full Year 2020 (Non-GAAP) PRODUCT MARGIN SERVICES MARGIN CLOUD MARGIN 90.5%| -255bp 72.7%| +158bp 65.6%| +380bp Product GM Product GM Service GM Cloud GM Cloud GM Service GM • Product gross margin declined due to different product mix • Services gross margin increased as a result of con
Slide 18: Operating Income and Operating Margin Q4 and FY 2020 (Non-GAAP)
Operating Income and Operating Margin Q4 and FY 2020 (Non-GAAP) • Operating margin improved mainly as a result of cloud gross margin expansion and focus on expenses
Slide 19: Cost Ratios Q4 2020 (Non-GAAP)
Cost Ratios Q4 2020 (Non-GAAP) R&D S&M G&A As % of revenue As % of revenue As % of revenue S&M S&M G&A R&D R&D 14.2% G&A 13.5% • G&A decreased primarily due to reduced travel * R&D capitalization
Slide 20: Cost Ratios Full Year 2020 (Non-GAAP)
Cost Ratios Full Year 2020 (Non-GAAP) R&D S&M G&A As % of revenue As % of revenue As % of revenue S&M R&D S&M G&A R&D 14.8% G&A 14.0% • G&A decreased primarily due to reduced travel * R&D capitalization
Slide 21: Balance Sheet and Cash Flow Analysis
Q4 and Full Year 2020 Highlights Income Statement Balance Sheet and Cash Flow Analysis Outlook
Slide 22: Balance Sheet (USD in thousands)
Balance Sheet (USD in thousands) December 31, December 31, 2020 2019 Audited Audited ASSETS CURRENT ASSETS: Cash and cash equivalents $ 442,267 $ 228,323 Short-term investments 1,021,613 210,772 Trade receivables 303,100 319,622 Prepaid expenses and other current assets 175,340 116,972 Total current
Slide 23: Cash Flow From Operations
Cash Flow From Operations $M Q4 19 Q4 20 %∆ FY 19 FY20 %∆ Cash flow from operations 91 167 84% 374 480 28% - Capital expenditure 6 3 (50%) 27 24 (11%) - Capitalization of software development 9 10 11% 35 39 11% Cash flow from operations after capex & software capitalization 76 154 102% 312 417 33% C
Slide 24: Liquidity and Cash Movement
Liquidity and Cash Movement December 31, 2020 Convertible Issuance $451M Option Exercises Acquisitions $9M -$147M Repayment of debt -$215M Other Capex $16M Buyback Operating CF -$63M Liquidity 12/31/20 -$48M $480M $1,464M Liquidity 12/31/19 $981M * CAPEX movement includes R&D capitalization
Slide 25: Outlook
Q4 and Full Year 2020 Highlights Income Statement Balance Sheet and Cash Flow Analysis Outlook
Slide 26: Outlook (Non-GAAP)
Outlook* (Non-GAAP) Q1 2021 FY 2021 Revenue ($M) 445-455 1,790-1,810 EPS ($) 1.42-1.52 6.12-6.32 The outlook is provided as of February 18, 2021. 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. T
Slide 27: Thank You