Slide 1: 2019 Fourth Quarter and Full Year Results
2019 FOURTH QUARTER AND FULL YEAR RESULTS Ended December 31, 2019
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: 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 2019 Highlights
Q4 and Full Year 2019 Highlights Income Statement Balance Sheet and Cash Flow Analysis Outlook
Slide 5: Q4 and Full Year 2019 Highlights (Non-GAAP)
Q4 and Full Year 2019 Highlights (Non-GAAP) Record revenue for FY cloud revenue Q4 cloud gross FY recurring Q4 and FY: $431M increased 28% margin increased revenue increased and $1,577M, to $599M 390 bps to 63.8% to 72% of total respectively compared to last compared to revenue year 59.9% in to Q4 c
Slide 6: Income Statement
Q4 and Full Year 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 2019 1,577 • Cloud revenue increased 25% and 28% in Q4 1,453 and FY 2019, respectively • Cloud revenue represented 39% of total 9% revenue in Q4 and 38% in FY 2019 compared to 33% and 32% in Q4 and FY 2018, 413 431 resp
Slide 8: GAAP and Non-GAAP Income Statement
GAAP and Non-GAAP Income Statement $M (except EPS) Q4 2019 Q4 2018 FY 2019 FY 2018 GAAP revenues 430.2 410.8 1,573.9 1,444.5 Valuation adjustment on acquired deferred product revenue - - 0.0 0.1 Valuation adjustment on acquired deferred service revenue - 0.0 0.0 0.6 Valuation adjustment on acquired
Slide 9: GAAP and Non-GAAP Income Statement (cont.)
GAAP and Non-GAAP Income Statement (cont.) $M (except EPS) Q4 2019 Q4 2018 FY 2019 FY 2018 GAAP finance & other expense (income), net 0.6 1.8 4.4 10.9 Amortization of discount on long term debt (2.4) (2.2) (9.2) (8.7) Non-GAAP finance & other expense (income), net (1.8) (0.4) (4.8) 2.2 GAAP taxes on
Slide 10: GAAP and Non-GAAP Income Statement (cont.)
GAAP and Non-GAAP Income Statement (cont.) $M (except EPS) Q4 2019 Q4 2018 FY 2019 FY 2018 (1) Shared-based Compensation Cost of product revenue (0.1) 0.1 0.2 0.4 Cost pf services revenue 1.9 1.9 8.2 7.6 Cost of cloud revenue 0.8 0.9 2.9 3.0 Research and development 2.9 1.6 8.1 7.4 Sales and marketi
Slide 11: Q4 2019 Revenue Breakdown by Region (Non-GAAP)
Q4 2019 Revenue Breakdown by Region (Non-GAAP) 76% 13% AMERICAS EMEA $328M, +1% YoY $57M, +2% YoY 11% APAC $46M, +34% YoY
Slide 12: Full Year 2019 Revenue Breakdown by Region (Non-GAAP)
Full Year 2019 Revenue Breakdown by Region (Non-GAAP) 78% 14% AMERICAS EMEA $1,238M, +9% YoY $216M, +4% YoY 8% APAC $123M, +8% YoY
Slide 13: Q4 2019 Revenue Breakdown by Business Unit (Non-GAAP)
Q4 2019 Revenue Breakdown by Business Unit (Non-GAAP) 22% FINANCIAL CRIME & COMPLIANCE $96M, +10% YoY 78% CUSTOMER ENGAGEMENT $335M, +3% YoY
Slide 14: Full Year 2019 Revenue Breakdown by Business Unit (Non-GAAP)
Full Year 2019 Revenue Breakdown by Business Unit (Non-GAAP) 20% FINANCIAL CRIME & COMPLIANCE $309M, +7% YoY 80% CUSTOMER ENGAGEMENT $1,268M, +9% YoY
Slide 15: Gross Profit and Gross Margin Q4 and FY (Non-GAAP)
Gross Profit and Gross Margin Q4 and FY (Non-GAAP) $1,200 $350 $1,125 $314 $1,032 $297 90.0% 90.0% $300 $1,000 $250 $800 80.0% 80.0% $200 $600 $150 71.9% 72.8% 71.0% 71.3% $400 70.0% 70.0% $100 $200 $50 60.0% $- 60.0% $- Q4 18 Q4 19 FY 18 FY 19
Slide 16: Gross Margin Q4 2019 (Non-GAAP)
Gross Margin Q4 2019 (Non-GAAP) PRODUCT MARGIN SERVICES MARGIN CLOUD MARGIN 93.7%| +90bp 72.0%| +180bp 63.8%| +390bp Service GM Product GM Product GM 72.0% 93.7% Service GM 92.8% 70.2% Cloud GM 63.8% Cloud GM 59.9% Q4 18 Q4 19 Q4 18 Q4 19 Q4 18 Q4 19 • Product gross margin increased due to product m
Slide 17: Gross Margin Full Year 2019 (Non-GAAP)
Gross Margin Full Year 2019 (Non-GAAP) PRODUCT MARGIN SERVICES MARGIN CLOUD MARGIN 93.1%| +250bp 71.1%| +120bp 61.8%| +10bp Product GM Service GM Product GM 93.1% Service GM 71.1% 90.6% 69.9% Cloud Cloud GM GM 61.7% 61.8% FY 18 FY 19 FY 18 FY 19 FY 18 FY 19 • Product gross margin increased due to pr
Slide 18: Operating Income and Operating Margin Q4 and FY 2019 (Non-GAAP)
Operating Income and Operating Margin Q4 and FY 2019 (Non-GAAP) 40.0% $150 40.0% $480 $434M $430 $130M 35.0% $130 35.0% $384M $119M $380 30.2% 30.0% 28.8% $110 30.0% $330 27.5% 26.4% Axis Title Axis Title $280 Axis Title Axis Title 25.0% $90 25.0% $230 20.0% $70 20.0% $180 $130 15.0% $50 15.0% $80 1
Slide 19: Cost Ratios Q4 2019 (Non-GAAP)
Cost Ratios Q4 2019 (Non-GAAP) R&D S&M G&A As % of revenue As % of revenue As % of revenue S&M S&M G&A R&D 23.1% 22.9% 9.1% R&D 13.5% 13.2% G&A 8.2% 2.1%* 2.3%* 11.4% 10.9% Q4 18 Q4 19 Q4 18 Q4 19 Q4 18 Q4 19 * R&D capitalization
Slide 20: Cost Ratios Full Year 2019 (Non-GAAP)
Cost Ratios Full Year 2019 (Non-GAAP) R&D S&M G&A As % of revenue As % of revenue As % of revenue R&D S&M S&M R&D 23.6% 14.3% 23.6% 14.0% G&A 8.9% G&A 2.2%* 8.4% 2.2%* 12.1% 11.8% FY 18 FY 19 FY 18 FY 19 FY 18 FY 19 * R&D capitalization
Slide 21: Balance Sheet and Cash Flow Analysis
Q4 and Full Year 2019 Highlights Income Statement Balance Sheet and Cash Flow Analysis Outlook
Slide 22: Balance Sheet
Balance Sheet December 31, 2019 Assets ($M) 12/31/2019 12/31/2018 Equity & Liabilities ($M) 12/31/2019 12/31/2018 Cash and cash equivalents 228.3 242.1 Trade payables 30.4 29.6 Short term investments 210.8 243.7 Deferred revenues and advances from customers 245.8 221.4 Trade receivables 319.6 288.0
Slide 23: Cash Flow From Operations
Cash Flow From Operations $M Q4 19 Q4 18 %∆ FY 19 FY 18 %∆ Cash flow from operations 91.4 108.9 (16%) 374.2 396.6 (6%) - Capital expenditure 5.8 9.9 (41%) 27.3 31.4 (13%) - Capitalization of software development 8.7 9.3 (6%) 34.7 32.2 8% Cash flow from operations after capex & software capitalizatio
Slide 24: Cash Movement and Liquidity
Cash Movement and Liquidity December 31, 2019 Operating CF $374 Proceeds from Option Exercises $5 Acquitions Other Capex Liquidity 12/31/19 -$26 $6 -$62 $981 Buyback -$47 Liquidity 12/31/18 $731 * CAPEX movement includes R&D capitalization 24
Slide 25: Outlook
Q4 and Full Year 2019 Highlights Income Statement Balance Sheet and Cash Flow Analysis Outlook
Slide 26: Outlook (Non-GAAP)
Outlook* (Non-GAAP) Q1 2020 FY 2020 Revenue ($M) 406-416 1,690-1,710 EPS ($) 1.27-1.37 5.65-5.85 The outlook is provided as of February 13, 2020. 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: NICE
NICE