Slide 1: 2020 First Quarter Results
2020 FIRST QUARTER RESULTS Ended March 31, 2020
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 presentation. 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 disco
Slide 4: Q1 2020 Highlights, Income Statement, Balance Sheet, Outlook
Q1 2020 Highlights Income Statement Balance Sheet and Cash Flow Analysis Outlook
Slide 5: Q1 2020 Highlights (Non-GAAP)
Q1 2020 Highlights (Non-GAAP) Total revenue Cloud revenue Q1 Cloud gross Recurring revenue increased 9%; to increased 27% margin increased increased to 75% $411M compared compared to Q1 310 bps to 62.9%; of total revenue; to Q1 2019 2019; compared to compared to 71% and increased to 59.8% in Q1 last
Slide 6: Q1 2020 Highlights, Income Statement, Balance Sheet, Outlook
Q1 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) 411 • Solid growth in total revenue driven by 27% 378 increase in cloud revenue in Q1 • Cloud revenue of $173M represented 42% of total revenue in Q1 9% • Recurring revenue accounted for 75% of total revenue for Q1 Q1 19 Q1 20 EARNINGS PER SHARE (No
Slide 8: GAAP and Non-GAAP Income Statement
GAAP and Non-GAAP Income Statement $M (except EPS) Q1 2020 Q1 2019 GAAP revenues 410.4 377.0 Valuation adjustment on acquired deferred cloud revenue 0.8 0.9 Non-GAAP revenues 411.2 377.9 GAAP Cost of revenue 140.1 131.0 Amortization of acquired intangible assets on cost of product (1.1) (0.9) Amorti
Slide 9: GAAP and Non-GAAP Income Statement (cont.)
GAAP and Non-GAAP Income Statement (cont.) $M (except EPS) Q1 2020 Q1 2019 GAAP finance & other expense (income), net 1.6 3.4 Amortization of discount on long term debt (2.3) (2.3) Non-GAAP finance & other expense (income), net (0.7) 1.1 GAAP taxes on income 11.1 11.4 Tax adjustments re non-GAAP adj
Slide 10: GAAP and Non-GAAP Income Statement (cont.)
GAAP and Non-GAAP Income Statement (cont.) $M (except EPS) Q1 2020 Q1 2019 (1) Shared-based Compensation Cost of product revenue 0.1 0.1 Cost of services revenue 1.6 2.1 Cost of cloud revenue 0.8 0.9 Research and development 2.6 1.6 Sales and marketing 5.2 5.7 General and administrative 11.3 6.6 21.
Slide 11: Q1 2020 Revenue Breakdown by Region (Non-GAAP)
Q1 2020 Revenue Breakdown by Region (Non-GAAP) 82% 12% AMERICAS EMEA $337M, +17% YoY $48M, -25% YoY 6% APAC $26M, +7% YoY
Slide 12: Q1 2020 Revenue Breakdown by Business Unit (Non-GAAP)
Q1 2020 Revenue Breakdown by Business Unit (Non-GAAP) 20% FINANCIAL CRIME & COMPLIANCE $83M, +14% YoY 80% CUSTOMER ENGAGEMENT $328M, +8% YoY
Slide 13: Gross Profit and Gross Margin Q1 2020 (Non-GAAP)
Gross Profit and Gross Margin Q1 2020 (Non-GAAP) 100.0% $330 95.0% $292M $280 90.0% $267M 85.0% $230 80.0% Axis Title 75.0% $180 70.9% 70.0% 70.5% $130 65.0% 60.0% $80 55.0% 50.0% $30 Q1 19 Q1 20 Gross Profit Gross Margin
Slide 14: Gross Margin Q1 2020 (Non-GAAP)
Gross Margin Q1 2020 (Non-GAAP) PRODUCT MARGIN SERVICES MARGIN CLOUD MARGIN 92.4%| -60bp 70.9%| +100bp 62.9%| +310bp Service GM Cloud Product GM Product GM GM Service GM 70.9% 93.0% 92.4% 62.9% 69.9% Cloud GM 59.8% Q1 19 Q1 20 Q1 19 Q1 20 Q1 19 Q1 20 • Services gross margin increased as a result of
Slide 15: Operating Income and Operating Margin Q1 2020 (Non-GAAP)
Operating Income and Operating Margin Q1 2020 (Non-GAAP) $120 34.0% $111M $110 32.0% $97M $100 30.0% $90 $80 Axis Title 28.0% 26.9% $70 26.0% $60 25.7% 24.0% $50 22.0% $40 20.0% $30 Q1 19 Q1 20 Operating Income Operating Margin • Operating income increased as a result of an increase in revenue coupl
Slide 16: Cost Ratios Q1 2020 (Non-GAAP)
Cost Ratios Q1 2020 (Non-GAAP) R&D S&M G&A As % of revenue As % of revenue As % of revenue S&M 25.5% R&D R&D 14.5% S&M 14.2% 23.0% G&A 8.8% 2.3%* 2.3%* G&A 7.4%** 12.2% 11.9% Q1 19 Q1 20 Q1 19 Q1 20 Q1 19 Q1 20 * R&D capitalization ** Q1 2019 included some one-time non-recurring credits
Slide 17: Q1 2020 Highlights, Income Statement, Balance Sheet, Outlook
Q1 2020 Highlights Income Statement Balance Sheet and Cash Flow Analysis Outlook
Slide 18: Balance Sheet
Balance Sheet March 31, 2020 Assets ($M) 03/31/2020 12/31/2019 Equity & Liabilities ($M) 03/31/2020 12/31/2019 Cash and cash equivalents 289.1 228.3 Trade payables 41.0 30.3 Short term investments 192.5 210.8 Deferred revenues and advances from customers 274.8 245.8 Trade receivables 315.8 319.6 Cur
Slide 19: Cash Flow From Operations
Cash Flow From Operations $M Q1 20 Q1 19 %∆ Cash flow from operations 154.8 182.4 (15%) - Capital expenditure 9.6 8.4 14% - Capitalization of software development 9.3 8.5 9% Cash flow from operations after capex & software capitalization 135.9 165.5 (18%) Cash flow from operation after capex and sof
Slide 20: Cash Movement and Liquidity
Cash Movement and Liquidity March 31, 2020 Proceeds from Option Exercises Operating CF $1 Other Acquitions $155 -$8 Capex Liquidity 03/31/20 -$51 -$19 Buyback $1,035 Liquidity 12/31/19 -$24 $981 * CAPEX movement includes R&D capitalization
Slide 21: Q1 2020 Highlights, Income Statement, Balance Sheet, Outlook
Q1 2020 Highlights Income Statement Balance Sheet and Cash Flow Analysis Outlook
Slide 22: Outlook (Non-GAAP)
Outlook* (Non-GAAP) Q2 2020 Revenue ($M) 387-397 EPS ($) 1.28-1.38 The outlook is provided as of May 14, 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. This is in addition to the forward-l
Slide 23: NICE
NICE