Slide 1: 2018 Third Quarter Results
2018 THIRD QUARTER RESULTS Ended September 30, 2018
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 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: Q3 2018 Highlights, Income Statement, Balance Sheet and Cash Flow, Outlook
Q3 2018 Highlights Income Statement Balance Sheet and Cash Flow Analysis Outlook
Slide 5: Q3 2018 Highlights
Q3 2018 Highlights* Revenue of $356M; Cloud revenue Recurring revenue Cloud revenue; growth of 9% increased 20% increased to 72% represented 34% compared to Q3 to $120M of total revenue of total revenue last year compared to compared to 69% vs. 30% in Q3 Q3 last year in Q3 last year last year Operat
Slide 6: Income Statement
Q3 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) 356 • Revenue increased 9% year-over-year 327 • Cloud revenue represented 34% of total revenue compared to 30% in Q3 2017 9% • Recurring revenue accounted for 72% of total revenue compared to 69% in the Q3 2017 Q3 17 Q3 18 EARNINGS PER SHARE (Non-
Slide 8: GAAP and Non-GAAP Income Statement
GAAP and Non-GAAP Income Statement* $M (except EPS) Q3 2018 Q3 2017 GAAP revenue 356.2 322.8 Valuation adjustment on acquired deferred product revenue 0.0 0.0 Valuation adjustment on acquired deferred service revenue 0.1 0.8 Valuation adjustment on acquired deferred cloud revenue 2.3 3.1 ASC 606 to
Slide 9: GAAP and Non-GAAP Income Statement (cont.)
GAAP and Non-GAAP Income Statement* (cont.) $M (except EPS) Q3 2018 Q3 2017 GAAP finance & other expense, net 2.2 4.3 Amortization of discount on long term debt (2.2) (2.1) Non-GAAP finance & other income (expense), net (0.0) 2.2 GAAP taxes on income 5.2 2.6 Tax adjustment re non-GAAP adjustments 15
Slide 10: Revenue Breakdown by Region (Non-GAAP)
Q3 2018 Revenue Breakdown by Region* (Non-GAAP) 79% 14% AMERICAS EMEA $281.5M, +12% YoY $50.3M, +1% YoY 7% APAC $24.6M, -4% YoY * All numbers presented are Non-GAAP under ASC 605 10
Slide 11: Revenue Breakdown by Business Unit (Non-GAAP)
Q3 2018 Revenue Breakdown by Business Unit* (Non-GAAP) 19% FINANCIAL CRIME & COMPLIANCE $69M, +11% YoY 81% CUSTOMER ENGAGEMENT $287M, +9% 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% $252 $250 $233 $200 80.0% $150 71.2% 70.7% $100 70.0% $50 60.0% $- Q3 17 Q3 18 Gross Income Gross Margin 12 * All numbers presented are Non-GAAP under ASC 605
Slide 13: Gross Margin Q3 2018 (Non-GAAP)
Gross Margin Q3 2018* (Non-GAAP) PRODUCT MARGIN SERVICES MARGIN CLOUD MARGIN 88.8%| -120bp 70.6%| +190bp 61.7%| -70bp Service GM Product GM 70.6% Product GM Service GM 90.0% 88.8% 68.7% Cloud Cloud GM GM 62.4% 61.7% Q3 17 Q3 18 Q3 17 Q3 18 Q3 17 Q3 18 13 * All numbers presented are Non-GAAP under AS
Slide 14: Operating Income and Operating Margin (Non-GAAP)
Operating Income and Operating Margin* (Non-GAAP) 40.0% $100 $91M $90 35.0% $78M $80 30.0% 25.5% $70 Axis Title Axis Title 25.0% 24.0% $60 20.0% $50 15.0% $40 10.0% $30 Q3 17 Q3 18 Operating Income Operating Margin 14 * All numbers presented are Non-GAAP under ASC 605
Slide 15: Cost Ratio Q3 2018 (Non-GAAP)
Cost Ratio Q3 2018* (Non-GAAP) R&D S&M G&A As % of revenue As % of revenue As % of revenue S&M 25.0% S&M 23.8% G&A R&D 9.0% G&A R&D 8.8% 13.1% 12.6% Q3 17 Q3 18 Q3 17 Q3 18 Q3 17 Q3 18 * All numbers presented are Non-GAAP under ASC 605 15
Slide 16: Balance Sheet and Cash Flow Analysis
Q3 2018 Highlights Income Statement Balance Sheet and Cash Flow Analysis Outlook
Slide 17: Balance Sheet
Balance Sheet* September 30, 2018 Assets ($M) 09/30/2018 12/31/2017 Equity & Liabilities ($M) 09/30/2018 12/31/2017 Cash and cash equivalents 276.2 328.3 Trade payables 23.7 29.4 Short term investments 172.9 64.0 Deferred revenue and advances from customers 198.2 184.6 Trade receivables 219.8 230.7
Slide 18: Cash Flow From Operations
Cash Flow From Operations $M Q3 18 Q3 17 %∆ Cash flow from operations 87.0 105.8 (18%) - Capital expenditure 8.0 7.9 1% - Capitalization of software development 7.5 7.7 (3%) Cash flow from operations after capex & software capitalization 71.5 90.2 (21%) Cash flow from operation after capex and softw
Slide 19: Cash Movement and Liquidity
Cash Movement and Liquidity September 30, 2018 Proceeds from Option Exercises $18 Acquitions Operating CF -$105 $288 Other Capex -$15 -$44 Buyback Liquidity 09/30/18 -$11 $656 Liquidity 12/31/17 $525 * CAPEX movement includes R&D capitalization 19
Slide 20: Outlook
Q3 2018 Highlights Income Statement Balance Sheet and Cash Flow Analysis Outlook
Slide 21: Outlook (Non-GAAP)
Outlook* (Non-GAAP) FY 2018 Revenue ($M) 1,450-1,466 EPS ($) 4.53-4.69 The outlook is provided as of November 8, 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 is in addition to the f
Slide 22: NICE
22 NICE