Slide 1: Q4 2023 Earnings Presentation
Q4 2023 Earnings Presentation (NASDAQ: NICE)
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: NICE at a glance: the cloud leader powering AI
>3,000 >8,400 R&D Professionals $2.4B Employees Revenue* >150 $1.6B Countries Cloud ARR* >85% Fortune $2.1B Recurring 100 Customers Revenue* 25K THE Cloud Leader Powering AI in $561M Customers Cash from Three Large Specialized Markets Operations* *Financial figures for last 12 months ended December
Slide 4: Three large specialized markets
CUSTOMER FINANCIAL CRIME PUBLIC SAFETY EXPERIENCE & COMPLIANCE & JUSTICE This is CREATING OUTSMARTING DRIVING Extraordinary Financial Crime Digital Policing Customer with Intelligent Transformation Experiences Solutions 4
Slide 5: Our Strategic Pillars
Analytics Our Digital STRATEGIC Cloud PILLARS AI & Automation 5
Slide 6: Financial Overview
FINANCIAL OVERVIEW Quarterly Results 6
Slide 7: Q4-23 Financial Highlights
Q4-23 Financial Highlights Q4 2023 Results Quarterly Increase Results (Decrease) Y/Y Total Revenue $623M 10% Cloud Revenue $429M 20% Non-GAAP Gross Profit $448M 9% Non-GAAP Gross Margin 71.9% (60bps) Non-GAAP Operating Income $187M 15% Non-GAAP Operating Margin 30.0% 140bps Non-GAAP EPS $2.36 16% 7
Slide 8: FY-23 Financial Highlights
FY-23 Financial Highlights FY 2023 Results Quarterly Increase Results (Decrease) Y/Y Total Revenue $2,378M 9% Cloud Revenue $1,582M 22% Non-GAAP Gross Profit $1,709M 7% Non-GAAP Gross Margin 71.9% (120bps) Non-GAAP Operating Income $704M 13% Non-GAAP Operating Margin 29.6% 90bps Non-GAAP EPS $8.79 1
Slide 9: Revenue Breakdown by Business Segment
Revenue Breakdown by Business Segment Quarterly Revenue Annual Revenue $2,378M $2,181M $623M $403M $601M $569M $572M $581M $555M $1,926M $412M $101M $527M $531M $103M $100M $100M $102M $354M $103M $106M $102M 12% YoY Growth $1,974M $523M $1,769M $481M $498M $452M $467M $472M 12% YoY $1,572M $422M $4
Slide 10: Revenue Breakdown by Business Model
Revenue Breakdown by Business Model Quarterly Revenue Annual Revenue $623M $601M $581M $32M $569M $572M $38M $2,378M $555M $40M $527M $531M $49M $44M $154M $59M $2,181M $52M $162M $76M $160M $236M $1,926M $159M $161M $160M $641M $242M $165M $167M $157M $650M $660M 22% YoY 20% YoY Growth Growth $429M
Slide 11: Recurring Revenue as a Percent of Total Revenue
Recurring Revenue as a Percent of Total Revenue Quarterly Annual 87% 88% 87% 85% 85% 86% 83% 82% 82% 79% 80% 20% 19% 20% 22% 21% 20% 24% 22% 23% 23% 27% 66% 67% 69% 67% 63% 64% 56% 59% 60% 59% 53% Q1-22 Q2-22 Q3-22 Q4-22 Q1-23 Q2-23 Q3-23 Q4-23 2021 2022 2023 Cloud Revenue Non-Cloud Recurring Revenu
Slide 12: Revenue Breakdown by Geographic Region, Q4 2023
Revenue Breakdown by Geographic Region, Q4 2023 84% 10% AMERICAS EMEA $524M, +10% YoY $65M, +2% YoY 6% APAC $34M, +11% YoY 12
Slide 13: Revenue Breakdown by Geographic Region, FY 2023
Revenue Breakdown by Geographic Region, FY 2023 84% 10% AMERICAS EMEA $1,987M, +10% YoY $248M, -1% YoY 6% APAC $143M, +10% YoY 13
Slide 14: Consistent Healthy Gross Margins (Non-GAAP)
Consistent Healthy Gross Margins (Non-GAAP) 68.6% 70.1% 70.4% 70.5% 70.0% 70.3% 70.4% 71.1% 67.7% 70.0% 70.5% Cloud GM Q1-22 Q2-22 Q3-22 Q4-22 Q1-23 Q2-23 Q3-23 Q4-23 2021 2022 2023 72.2% 74.5% 74.0% 73.3% 71.8% 72.2% 73.6% 72.0% 73.3% 73.5% 72.4% Services GM Q1-22 Q2-22 Q3-22 Q4-22 Q1-23 Q2-23 Q3-2
Slide 15: Non-GAAP Operating Expenses as a Percent of Total Revenue
Non-GAAP Operating Expenses as a Percent of Total Revenue Quarterly Annual 44.8% 44.3% 44.8% 43.9% 44.3% 44.4% 43.1% 42.4% 42.3% 41.7% 41.9% 7.7% 7.3% 8.0% 8.0% 7.9% 8.6% 7.7% 7.1% 7.5% 7.5% 7.7% 24.2% 24.6% 24.8% 23.5% 24.0% 22.6% 23.2% 23.1% 21.4% 22.5% 22.4% 12.9% 12.4% 12.0% 12.7% 12.2% 12.2% 12
Slide 16: Strong Operating Leverage Evident in Growing Profitability
Strong Operating Leverage Evident in Growing Profitability Non-GAAP 40% Operating Margin $200 40% $740 $184M $187M $704M $720 $700 38% $163M $163M $170M $180 38% $625M $680 $660 $154M $159M $640 $620 36% $149M $160 36% $544M $600 $580 $560 $540 34% $140 34% $520 $500 $480 32% 30.6% 30.0% $120 32% $4
Slide 17: Delivering Sustained Profitable Growth – Rule of 40
Delivering Sustained Profitable Growth – Rule of 40 Quarterly Annual 47.6% 47.8% 46.6% 45.1% 43.8% 42.7% 42.1% 42.5% 41.6% 41.6% 39.9% 32.0% 31.6% 31.2% 31.8% 31.6% 32.4% 32.9% 32.1% 33.7% 32.6% 31.5% 15.4% 15.6% 16.2% 12.2% 13.3% 10.3% 9.5% 9.6% 9.0% 8.4% 8.4% Q1-22 Q2-22 Q3-22 Q4-22 Q1-23 Q2-23 Q3
Slide 18: Non-GAAP Net Income and EPS
Non-GAAP Net Income and EPS Reflect NICE’s Financial Strength 15% YoY Growth Non-GAAP Net Income 14% YoY $583M Growth $507M $151M $155M $436M $142M $135M $136M $123M $128M $120M Q1-22 Q2-22 Q3-22 Q4-22 Q1-23 Q2-23 Q3-23 Q4-23 2021 2022 2023 16% YoY 15% YoY Non-GAAP EPS Growth Growth $8.79 $2.36 $2.2
Slide 19: Growing Cash From Operations and Free Cash Flow
Growing Cash From Operations and Free Cash Flow LTM LTM $900.0 LTM Operating Cash Flow and Margin 30.0% $M Q4-23 Q4-22 $800.0 23.3% 24.0% 23.6% 25.0% $700.0 22.0% 21.7% Operating Cash Flow 561.4 479.7 19.5% $600.0 $558M $561M 20.0% $531M Capital expenditure of property and equipment (29.2) (31.9) $5
Slide 20: Increasing Share Repurchases
Increasing Share Repurchases Quarterly Annual $90M $288M $69M $64M $65M $65M $145M $34M $25M $22M $73M Q1-22 Q2-22 Q3-22 Q4-22 Q1-23 Q2-23 Q3-23 Q4-23 2021 2022 2023 20 ** Some numbers may not add up due to rounding
Slide 21: Industry Leading Strong Net Cash Position
Industry Leading Strong Net Cash Position* Quarterly Annual $1,141M $1,119M $1,107M $1,029M $1,029M $950M $920M $892M $895M $892M $863M $863M 12/31/2021 3/31/2022 6/30/2022 9/30/2022 12/31/2022 3/31/2023 6/30/2023 9/30/2023 12/31/2023 12/31/2021 12/31/2022 12/31/2023 * Net cash and investments = cas
Slide 22: Outlook (Non-GAAP)
Outlook* (Non-GAAP) Q1 2024 FY 2024 Revenue ($M) 650 – 660 2,715 – 2,735 Revenue Growth 15% 15% YoY at Midpoint EPS ($) 2.40 – 2.50 10.40 – 10.60 EPS Growth 21% 19% YoY at Midpoint *The outlook is provided as of February 22, 2024. There is no guarantee that the Company will change or update these fi
Slide 23: Thank You
Thank You NICE --)
Slide 24: Appendix
ras Oo c o or or < 24
Slide 25: GAAP and Non-GAAP Income Statement
GAAP and Non-GAAP Income Statement USD in thousands (except EPS) Quarter ended Year to date December 31, December 31, 2023 2022 2023 2022 GAAP revenues $ 623,192 $ 568,560 $ 2,377,508 $ 2,181,294 Non-GAAP revenues $ 623,192 $ 568,560 $ 2,377,508 $ 2,181,294 GAAP cost of revenue $ 200,878 $ 180,980 $
Slide 26: GAAP and Non-GAAP Income Statement (cont.)
GAAP and Non-GAAP Income Statement (cont.) USD in thousands (except EPS) Quarter ended Year to date December 31, December 31, 2023 2022 2023 2022 GAAP taxes on income $ 38,378 $ 25,765 $ 119,399 $ 79,387 Tax adjustments re non-GAAP adjustments 4,464 12,037 41,937 54,897 Non-GAAP taxes on income $ 42
Slide 27: GAAP and Non-GAAP Income Statement (cont.)
GAAP and Non-GAAP Income Statement (cont.) USD in thousands (1) Share-based Compensation Quarter ended Year to date December 31, December 31, 2023 2022 2023 2022 Cost of cloud revenue $ 4,605 $ 2,451 $ 10,965 $ 8,840 Cost of services revenue 3,142 3,233 11,906 11,497 Cost of product revenue (15) 147
Slide 28: 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 December 31, December 31, 2023 2022 2023 2022 Unaudited Audited Unaudited Audited GAAP net income $ 81,652 $ 71,186 $ 3
Slide 29: Free Cash Flow Reconciliation
Free Cash Flow Reconciliation USD in thousands NICE LTD. AND SUBSIDIARIES NON-GAAP RECONCILIATION - FREE CASH FLOW FROM CONTINUING OPERATIONS U.S. dollars in thousands Quarter ended Year to date December 31, December 31, 2023 2022 2023 2022 Unaudited Audited Unaudited Audited Free cash flow (a) Net
Slide 30: Condensed Consolidated Balance Sheet
Condensed Consolidated Balance Sheet USD in thousands December 31, December 31, December 31, December 31, 2023 2022 2023 2022 Unaudited Audited Unaudited Audited ASSETS LIABILITIES AND SHAREHOLDERS' EQUITY CURRENT LIABILITIES: CURRENT ASSETS: Trade payables $ 66,036 $ 56,019 Cash and cash equivalent