NICE - Earnings call transcript Q4 2021

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Operator

Welcome to NICE Conference Call, discussing Fourth Quarter and Full Year 2021 results, and thank you all for holding. All participants are in present in a listen-only mode.

Following management's formal presentation, instructions will be given for the question-and-answer session.

As a reminder, this conference is being recorded, February 17, 2022. I would now like to turn this call over to Mr. Investor NICE. President, Vice Cohen, Relations at Marty Please sir. go ahead,

Marty Cohen

you, Thank operator.

Operator

Please ahead. you. go go Thank ahead. Please

Marty Cohen

me With Officer. call and the on Beth Executive Eilam, Gaspich, Officer; Chief Chief Financial today are Barak

point differ be Before I Act Securities could statements on actual harbor from accordance call we this Litigation provisions advised of forward-looking company's statements. in some constitute results statements the would to Reform made forward-looking start, will that with these of the out materially like of the Please that XXXX. safe Private the

Additional or March with information XXXX company's the item to Securities the XXXX. is regarding actual the in XX, factors that Commission filed the in performance differ annual and could Exchange cause report contained section results Factors of company entitled on Risk of Form on the X as materially XX-F

today's will During for year fourth detailed quarter company's discussion first results more XXXX. quarter of a guidance and and full the the we XXXX present call,

questions. an Following our comments, for be there opportunity will

compensation. Let assets figures certain and me in will in acquisition-related results amortization differ to The otherwise which reflected this expenses, remind for Principles, Accepted turn call of today's now adjusted the detailed revenues and operations, as difference over press Barak. our non-GAAP and in the on unless commenting Accounting accounting for the on be mainly you of are from adjusted Generally that intangible respects between accounting call, we GAAP stock-based results equivalent release. I'll noted

Barak Eilam

every revenue double-digit full surpassed XXXX acceleration in quarter, XX% the revenue $X NICE year. we drive as growth. and with growth across to the Thank billion for the for XX% everyone. reported continue We welcome was cloud year-over-year We an leading you, year mark outstanding growth Marty, board. to revenue

EMEA Digital from leader transforming bookings is chip in in leader XXX% at scale an international digital APAC. to expansion blue an gaining momentum fivefold, number fast-growing and scale NICE quickly with NICE AI the increased with to deals agile XXXX. and is AI growth massive speed powerhouse. in both of profitability. continues gain Our first analytics a

continue and time We to our further operating targets. to expect our the double-digit XX% at or progress margin same accelerate higher towards growth

reflected partnerships. competitive end top of high in large for QX, world's deals with accelerating attributes drove travel the surge continue depth recognition, municipalities. unrivaled the one as QX digital record continued company In is XX our we a expansion, a the results U.S. management the we large bank, included, the to company, a large platforms. among of servicing of number leadership and undisputed loan groups, success replacements, momentum demand of signed XXXX, U.S. and experience and in that to market banks, deals, growing our of that portfolio, of strategic largest asset very another and at our cloud of others, X-digit largest a breadth soaring enterprises growing With large by similar our one U.S. international a well-known signing of AI the our clearly due a throughout highlighted leadership Our wider adoption comprehensive enterprise new unparalleled number

rate and Our cross-sells. thousands growing of years to tens many strategic to first-class built portfolio our development our increase of upsells date investments was pace that of with win continues well of as as

well utility deals two and For a a our broad large large with who company example, IT a of customers, were BPO. included Other in there among expansion part as portfolio, worldwide provider others. companies seven-digit industrial as a large QX, services of adopted of deals automation eight-digit portfolio

in competitive on becoming legacy This AI for creates are differentiation. insurmountable a on vendor decisions widening company, characterized organizations converging, players bank. opportunity. company, insurance Midwest QX processor, consumer market is is selective a and well-known more was a increase tremendous barrier large very an untapped new the largely a replacements, payment our cloud, seven-digit choice. growth and In brand dramatic a As international and the prominent a health and bank including are rapidly by of a community and market, well-known with evolving very deals competitive providers large digital further European

center a Our financial are firm scale, deals, company and reported and led AI internationally. a telecommunication the our and deals global presence a unprecedented reasons large property large the demand renowned insurance tax X included of institution, Tier in company, seven-digit some a government a company, international a Seven-digit insurance a APAC-based company. we well-known agile U.K. QX, for NICE based In U.K. arena, the quarter catapulted experiencing of digital one largest platforms solid adviser including solutions. next-gen growth XXXX, the we an large media leading are our U.K. and In companies, casualty and company. digital by we double-digit to very our and execution coffee global agency, French the behind prominent based utility a accelerated

with continued solutions the helped optimization QX, intelligence. past partnerships, greatly well and signed strategic a for we drive worldwide. Cloud our has with artificial years Over In Center two strategic as growth expanded Google the the partnership have we integrating fourth quarter, Google CXone which as into of Contact CXone our

In CXone Middle Telecom Deutsche in Global CXone announced East. signed, the also another with just now Etisalat UAE partnership recently bring to is to and partnership, Europe. business a offering the We

are digitalization margin in throughout bold to cloud, new invest double-digit year the still the and At those Our to for strategy be accelerated was smooth where and time, massive the history of grow digital in faster every vision friction by progresses, companies approaches a The our more on delivered they because turned performance markets and greatest success consumer experiences. XXXX the to are own for generating sets and record, creating with introduced the the services. native TAM, of evolution us. execute same best-in-class their new today platform, bring struggling focus. more that outstanding years in technology, deterioration XXXX past default. frictionless moved growth of that verge and to on but growth a that ahead beyond. up results revenue two than aggressively together to and further last gross of accelerate their eliminate our NICE's increase and QX organizations, NICE way the and in extreme already continue about in our at the it time examples we same markets. the of profitability. the respective us opportunity frustrations friction provide successfully a our rather revolution. the operate This deep in domain consumer significant execution multiple future of the just to We expertise The digital brands, our and in digital were visionary to growth full for XXXX, are friction in [indiscernible] improved mountain has have decade cohesive to thinking even Therefore, They successful is managed revolutionary

compliance behind create these organizations. self-service end generations. customers. to repository, consumer is evolution in. agents largest business managing compliance to a globally, XXXX and increasing started wallet exponentially shift an The and hundreds mission the their This labor from revenue up of the and customer compliance filled capabilities and positioned of enormous for as mess the frictionless take keep creating three a that crime banking. and With cloud This digital integrated for as every million compliance to cloud organizations point their with pace as massively next-gen the but and safety, which quickly roadblock banking banks we globally, trust journey is that still vision CXone XX in becoming dramatically This in fail of ever-growing front-end an number investing digital momentum a natively limited is labor in a of by per and reality At is friction is as but agents by represents next on opportunity spend financial it can crime The risk environment to consumers digital slow AI enterprise by with to crime phase disconnect and is customers friction the platform across spend year, from financial to our new number uniquely XX% down is purpose-built for a the expectations the creates the leading In CX catching on so a digital of new platform, their modernizing inflection data safeguards, market, frictionless digital held an digital frictionless time, represents drive our market service compliance back dramatic and of now to advance and creating the limitless in all CXone era. markets organizations features share customer creation of interactions. a back rush is CX. profile of are of and facing the and the growing by financial they same customer X-Sight, technology. ready speed. processes of vision shifting reality our frictionless Our towards saw up thousands market we trust operate the services, for office to are

of market, system. massive the Lastly, is of digital source friction This threatening introduces comes data essential eruption criminal a effectiveness justice justice already when is the overload. to an of level creating impossible evidence of it the criminal is that an

with frictionless to grows forcing years whole digital revenue relevant are move With The added the immediately down we serves core cloud and on cloud massive that in represents of criminal quickly. end our all Evidencentral, Evidencentral. start our the Evidencentral. the new organizations us of doubling every are opportunity only policing, evidence rapidly providing is evidence undergoing a markets management leadership digital are to for With to piece that market platform we the This digitalization platform, evolution that stakeholders. justice with end-to-end

At history. tremendous to industry-specific the with worldwide and lead we this XXXX, a in to are success in multiple expertise, Over positioned frictionless the we've cloud-native we transformations. XXXX the the AI already our best successfully digital largest to same are and years, opportunity seen heading We forward partner presents our time, With into delivered date. our reality. together and our charged we TAM perfectly our rush domain platforms, organizations to competitive unique to customers now and growth position we in

the to of and result one Our direct will every our employees call thank Beth. combination like to success it I now demonstrating that for was. take this banner unique each And you to the day. I a over every would of is of and dedication the XXXX Thank our team turn is and year making passion opportunity

Beth Gaspich

full and am good fourth performance our business for XXXX Barak, and day you, for results financial the our first provide pleased and quarter and for of everyone. I of analysis year to Thank the the quarter XXXX. outlook

quarter financial million the reached fourth period XX% the a outstanding Our with revenue record of quarter total $XXX that the consecutive year. growth revenue, compared reported double-digit in was growth. we which fourth same of last year-over-year for results were in million quarter $XXX to Total fourth

revenue, throughout reflected record and demonstrated in total with double-digit performance for with the by XX% year-over-year. business QX, three totaled in and In the the growth contributed grew performance was services. large The growth penetration financial product complete margins and of billion execution all and $X contributed both XXXX. driven the the and the our recorded of which region, Our Services total in in of cloud our our growth continued XX% during our The stellar XX% internationally all a the our the cover enterprises, we and top-line coupled revenue We sequential grew cloud impressive EMEA increased million that revenue. in self-service offering digital outstanding crime our delivered XX% strong accelerated business the year-over-year financial product our Cloud customer which quarter. segments lines: fourth represented both customer and million $XX geographies $XXX was APAC accomplished milestone growth quarter total cloud for fourth X%, and revenue reached expansion XXXX, quarter gross across revenue XX% revenue resulting revenue product or rate global of and cloud, compliance engagement in by year-over-year QX of revenue, XX% revenue. million in another year-over-year. to cloud remaining an revenue success in to revenue XX% Americas and We exceeding journey in $XXX feat market.

growing XX% remaining our represented globally. strong strong international to year-over-year the coupled existing region contributing The Our go-to-market and with EMEA our presence X%. revenue. grew of year-over-year total APAC partnerships XX% and is our XX% grew growth represented

totaled which to revenues, continued year. XX% $XXX growth driver same crime financial Moving revenue million, customer by reporting XX% of growth a quarter total well Customer breakdown. QX XX% primary expanding compared healthy in top-line $XX CXone while top-line increasing remains in simultaneously of QX, growth represented of operations. our which continued represented of NICE and our quarter the business in our from unit engagement and each from to our is a our the record positioned financially million, last XX% and revenue engagement. totaled flow a growth for accelerated cash industry-leading total growth to XXXX Revenues of share revenue increase success, exhibited profitability and market our year-over-year. compliance, our

another in QX a XX% in million the the record grew $XXX fourth quarter in compared in increase profit for points flow, We last reached Gross product XXX compared of increased a QX. record strong of $X.XX, at X% of experienced December $XXX an for the XXXX. XX to $XXX and to the gross operating investments by gross quarter million billion. and a cash operating a mainly in share XX% to year-over-year to was increase gross margin record XX.X%. to in gross the end of to which XX.X% and fourth to the quarter XXXX income cash year. was QX. cloud operating an a in compared to increase basis point $XXX in in million of margin last Our In attributed $X.XXX million Earnings which The Total fourth XX.X% margin year. QX quarter totaled QX $XXX margin, totaled increase margin totaled million basis compared QX, record XXXX increased margin per in the quarter

hedge of a net of Our was in $XXX $XXX debt, investments million, cash net million. instrument, resulting and

allow on plans. consistent strong and sheet cloud to are strategic continue flow acquisitions digital allocation and with healthy synergistic cash our growth to strategy generation and capitalize balance Our that us capital

or momentum into double-digit increase and to XXXX. top-line we XXXX, XX% both cloud bottom our Operating is growth growth margin greater. expect step revenue for to we the As continue line expected and on of with

guidance. to expected Our be tax remarks is rate a XXXX of range with I conclude my in XX%. will to for XX%

revenue For to first the million. the of XXXX, quarter $XXX of total in we be to million expect $XXX range

to in quarter range $X.XX. We first share a diluted to expect the of fully XXXX be earnings per $X.XX

billion in year For the revenue full the at we range compared representing to XX% total the billion, XXXX, $X.XXX full to midpoint growth expect year be to of $X.XXX XXXX.

We be year expect diluted the fully the to Operator? range full XX% XXXX turn now call representing I compared midpoint $X.XX, a $X.XX in earnings for to at questions. to XXXX. to per the of will operator over the growth year share full

Marty Cohen

there? now Operator, you are we're for ready We're now questions. for ready questions. Operator,

Operator

stay [Operator comes the this are be Samad gentlemen, Please ahead. connected. at we question conducting question-and-answer Samana please from an So, line making with session. Ladies Jefferies. a announcement, Our we first of and go will Instructions]

Samad Samana

finish strong strong could for you if – into we the momentum XXXX. highlighted I dig close you maybe can and know us the Congrats – Maybe of understand morning. the Maybe year. on good you to can Barak, that XXXX Hi, the what guidance? help early embedded How especially think pipeline context XXXX, with looks pipeline? and large into of a about what's deals towards world little day in more returning, we normal? like, And particularly, I bit around the think, should the every first, the

Barak Eilam

you. Thank

very the that finish we entering momentum. seen So a the first of we strongest yes, is pipeline a year, have strong we and have strong all, highest had with very XXXX growth we're The and seen. the for one

AI, the from the in trends we – visibility of continue. driven have seen in will market high are XXXX enterprise, that believe and great the rate in I all saw And segments that competitive divisions momentum different XXXX, both enterprise all in and an the same deals that booking have time, we success surge new replacement, we different same of digital it's that by the that at increase into So mentioned growth. we've the starting market, healthy yield the and of course and international great to win markets a of and very and large

Samad Samana

think on same and you puts as Or any for if And just the understand this cloud Beth, the When just couple healthy takes networking help maybe above saw Great. we XQ you I the last for in of the maybe side? seasonality December's should revenue follow-ups about revenue consider obviously company's guidance. long-term us then, as cloud a context connectivity is Can that year. you. versus far

Beth Gaspich

for you question, Thank Yes. the Samad.

to QX relative highlighted, you saw activities coming you When had at cloud in year, growth. result some as As you COVID our received as in year. we XX% growth our of that surge highlighted, last healthy extremely we in last a revenue looked with

And against higher so a in it growth. was the cloud of bar terms

the our Looking confidence And reiterated, forward, our growth actually in forward as at have billion. extremely cloud, run cloud course, expect cloud achieved we've looking of to that's large continued $X we overall. revenue cloud the XX% in extremely forward, greater as strong excess on of to have we we of an XXXX, look growth or rate we look and, business

Samad Samana

nicely I Great. versus about compliance, just think to that. that as sub-segments? could crime two if one was think you The sounds those most than that's which guidance how And to maybe with contextualize a CXone's we unpack the should as And just were guidance just stronger financial last ramping we how I and contribution well. like should was wondering people expecting. follow-up

Beth Gaspich

sure. Yes,

to in continues strong our just which Barak certainly, talked across that So strength that pipeline, see all heading the contributor about confidence but the business growth cloud. primary we XXXX. ongoing very is segments, be of growth into CXone driving our we mentioned, as have cloud I in our

had during platform XXXX. CXone were that expect and great of into underscored that the XXXX. We XXXX to by the continue we course, expect continue results that, course of We on to into

Samad Samana

for again Thanks questions. taking my Great.

Barak Eilam

Thank you.

Marty Cohen

Operator, we another one. will take

Operator

comes of you. line Tim Horan ahead. with Oppenheimer. go the Thank you. from question next Thank The Please

Tim Horan

Can is I see both Well, at to digital color give the us you around would or growth mentioned important an barriers, more digital qualitatively starting quantitatively? point And IT breakdowns regulatory a on and adoption. a internal there this thanks Any know sense to revenue guys. some in you're great. to going how of what's either you be perspective

Barak Eilam

Sure.

a we So in digital few think of ways.

now markets. – the by past said, a created way separately, remind of parts digital CCaaS management, are doing old first the the the that we in you all, different the by organization Hence, in well W default, in vision, fly to way, rest converging that up. up was leading together are with routing market catch need work. a thinking provide that and we in more we consumers the have or standard convergence with are holistic becoming of realize First we AI. exactly now to the digital of the we new as of that converging convergence market this with very They see itself, now everything, all exacting happening of with just and came with trying adopted. analytics we it and with of for see organization doesn't with which is CXI, workforce CX doesn't I'll of a that's the We one much solid

we’ve if human a the shifting agent-centric it’s sudden, business this And attended digital a revenue the be interactions. or see way it ones of it way business the all an of is telling. think are by I tremendous, we increases number deals a our it, think where of what attached part leading highlighted because growth exponential seat-centric is enabling we beyond a remarks, very And interaction and So interaction being. about rate. as go a my digital first you in with that is the earlier the about win lot in an a business we every either to potential we of from and way, just that’s to contribution, From are our are used to of all, right

represents to our growth. business, in be can immediate the the a think much our So of rest contributor the In faster of the the much, smaller term, part but we major it future, business. than still it growing

Tim Horan

And down for enterprises just the the adopt breaking they of that any some commentary barriers have to now? ability around

Barak Eilam

maybe Yes. the This second part. is

down are or siloed looking enterprises just Sorry barrier missed but channel just the digital the that breaking that work. I right things that going ascertain is at adopting doesn’t realization of that, through now

cohesive more we what of So see large, understand that a whole. a to that point or dominant digital be domain And in I CX service customer realizing player and ahead a more leader and as customer and bringing helps experience digital service or provides – embrace digital our that’s and that us part digital operation. and customer journey a full of service mid-sized as the as the to appointing into that portfolio a that exactly enterprises, either approach

Tim Horan

you. Thank

Operator

The Thank Rishi question you. comes of with RBC. Please Jaluria from next line the go ahead.

Rishi Jaluria

side helpful, you of right. see would a there Are much little All continued so then equation? my be seeing the Nice I to that? sort and cloud in to see what can in cloud maybe warm – wanted of business. a for got to around and drill the I’ve you exit starting customers adoption color you’re up into give Any in bit questions. strength of to down follow-up. I’m Thanks Wonderful. more more not taking directional the FCC

Barak Eilam

and all, you of that and that wait first revenue. So years, said materialize the see we we trends we compliance few see of see can the kind cloud of financial business, certain in a into as will for

throughout the I more the the you’re think, year, we’re – of – but year, so half see to starting even the from second acceleration. in the

and that the moving that remarks the banks notion whole overall, and all, do massive back new the introducing of holding my they said into because market office what of compliance. same of time back of digital is to a process, refreshing I wave in the realizing banking them way rebuilding First whole it’s the investments earlier is at

this viable market. see offering In we About the great acquisition market. We now did before almost just where cloud. purely years mid-market, market, in have parts of of a health of and have not Guardian about that’s two Analytics cloud following this comment ago. a a So the offering that’s we the general well, the adoption, about and operate doing now extremely two that where we that’s

have we’re cloud. So see full of starting certain the the And adoption sorry, Part mid banks to higher – of a midsized and banks, the end market. portfolio part I’m of of the over believe being customer – great and we here the have exact the need from consumed we cloud, have that the road to runway service. a a playbook. We added

customer an We the great from and of have have market a converting on-prem are more to customers basis. great cloud the than that each to these those shares – base, on the customers one annual double opportunity revenue

Rishi Jaluria

Got more and could the think least announced domestically. it. Center reopenings on to and and super you philosophically, at that displacements reopenings How a your really accelerating soon happening, actually CXone. of month, they’re importantly, And as opening some them that Avaya tailwind just then maybe over With as Solutions seen legacy think CXone? to Thanks. helpful. about going to your wanted we’ve to get end I about offices the Cisco do Contact more start office companies this impact back large business? And That’s CXone up their of be

Barak Eilam

cloud, now. office five, accelerating. Few them among those due with that outbreak others, from trends to the where obviously, positive or don’t will lot We the of down six see overall pandemic, don’t don’t of digital, or the slowing to are happen that impact waves, COVID. started that narration would years like you different of And necessarily anything – we negative positive see reopening. any to if of I we they the thought see trend like a we Yes. an the move

still So our With There all the are doing I in this acceleration everything – is in the still you’ve – would continued mentioned, some in names with market is those business. that trends. that we business. we all, is the XX% Still, of say, of see on-prem. our respect to

said those in the have of legacy the we option. as our accelerating of we not the do number providers fourth cloud And displacement in rate, dramatic a viable and do that quarter, in will win replacements I We are that believe saw increase that, continue. as a competitive we and before

Rishi Jaluria

Wonderful. you right. so Thank much. All

Barak Eilam

Thank you.

Operator

question Meta Thank you. of Marshall ahead. Morgan Please next line the with comes go The from Stanley.

Unidentified Analyst

sorry, you is deals Dave so is Meta the – Are X% implementation? Xx And the seeing happening increase seeing question, you just in mostly on AI? [ph] Nwokonko AI Or This Hi. conversation customers AI bookings? lead with now? for are Actual at just the or Marshall. at cloud

Barak Eilam

the time our So a a great Analytics CX markets. we now need in and customer the leadership AI, business. as big seeing done In substantial before, I in that in we transforming order said believe great and very are a have AI a base it be you key business, quickly three into attributes leader to we we have

we last is But that more amount more couple of and in in data to one, and – couple is technology those development largest data in of thing respective obviously, third our AI one, which years second in have viable is the order availability first of of the to technology, have one, a as of then data the repository the spent markets. the and important, massive we make there all the And domain. AI AI generic no algorithms The the such last markets, and AI. the in our that

have that and which of in to You those a we believe I many your the that assets, which have fact is to AI. a of investment need And back analytics fivefold are for all results that question, advancing market, led of markets part those deep has in put operating We XXXX, a certain AI ours see few years have increase scenarios. booking. of years. of the of we couple into it domain customers as in we to so the now course last expertise we strategic in see our

also scenario. us bundle see that’s deals. AI consuming see to key more as We So CXone and need are into trying with overall we one customers capabilities. coming that AI self-service differentiator smart we it us realizing portfolio something standalone who and our And they overall to and basically much from a success as deploy

Unidentified Analyst

Got are of channel want What you one me. integrator it. you on? to system there Thanks. with your And more then maybe relationships some investments seeing sort just additional of the for would last expand traction year? Are over

Barak Eilam

Yes.

I the strategic sales new very but with some U.S., type well-established as mentioned we’re have sales channels, and to earlier, always and relationship partners, on well in we take channels different large great as of team as happy a So others. team,

a we Our different partners, years. past few last gaining in international growth two Etisalat, We the and I week with partners we a quarter have more partnership past announced, few Telekom Deutsche of Google; momentum strategy recently, signed dozens just is already System, them and actually years. which just in few like XXX% and others. based the the And announced on strategic think, every

big the in a a that’s believe I and that international our revenue So front that starting the acceleration strategy. part that of in the you’re to strategy, see international result of is direct

Unidentified Analyst

you. That’s Thank Great. helpful.

Barak Eilam

Thank you.

Operator

question the Please of Walravens Pat Thank you. JMP. next with ahead. line The go comes from

Pat Walravens

congratulations Thank results. great. And the strong on me my you. let Oh, add

key on there? public way, you customer So Barak, safety sort given guys how big that engagement, are engagement? some and the crime focusing in customer the opportunity is And off about you financial thought just what compliance of spinning and have about, in think factors

Barak Eilam

leadership we course, public have believe I markets, some the execute the compliance well believe compliance. fact to CX today team those larger think we and opportunity public with here markets. great all have those safety can in compliance, on in us. expertise to CX in will one markets, in sell happening which We both in We the synergies markets. you happening very us knowledge have, the on I We like those And of and on for we focus financial And each of presence safety us respective [indiscernible] in number as as this in see and to the management great now safety. is, allowing any our market right over already see to Also opportunity that be three those I’ve extremely are great the market. successful competencies believe the in how that financial happen – market, markets this us great that playbook. there themes those And are financial without in is losing three now that run to a and we public markets. that same the

Pat Walravens

Okay. benefits follow-up it to would And I guess reasons be together. up? all then there those splitting all any are be, the Are there to would – keep it

Barak Eilam

a manage whole. We the continue don’t we that. and any those don’t the way assets can assets now or shape do of company. the or we of think to any to the each those be reason company appreciate way is in We financials of We see dilutive one and to separately any as value believe right our form

Pat Walravens

great. Okay, Thank you.

Operator

Citi. Thank next go Please the line you. of with Tyler from ahead. The Radke question comes

Tyler Radke

Thanks Yes. taking a of for expense house. Good morning. the bit side wanted my to about the ask I just question. more little

just currency side. than aware you’re acquisition As in and whether thinking implied the expense of, for of Just help of the understand retention normal any terms guidance Thank kind we should items be higher you. outlook onetime it’s the costs? about us talent XXXX, maybe for here

Beth Gaspich

Thank Yes. you the question, Tyler. for

profitability over in look to growth our XXXX. our margin, to throughout meaning our And as double-digit guidance expand. that look in expectations that led growth as by the key increase had the that expect to to we operating with double-digit year, As we expectation We of operating and revenue really continue will continue and our experienced our see focus our we’ve EPS. what profitability in to margin course, XXXX, same is in that margin we And XXXX. at have operating well both we’ll highlighted as for attention next operating we

in further Of goal of advancing and operating our and higher margin XX% future. heading towards the course,

Tyler Radke

you. Great. And your what’s Barak, the wanted And for been to of really ask over b, competitors and relates it on as biggest you, emerging the maybe last competitors? competitive on kind changed just front to year? Thank change the that – like traditional landscape,

Barak Eilam

even something there that trends dramatically the even so are in the think have seen – fact changed more XXXX and in past we don’t more the beside I is becoming QX. pronounced things in

solution think catch route a continued to easier into is a in and that that the have us an increase don’t for that allows and I rate on-prem doing completely providers replacements think to the all the to I for cloud viable, of And viable native up that the they offerings. scale hedge incumbent are weaken, way. legacy the it

the and of barrier that fact the the barrier starting of this best-in-class digital routing analytics, the so storage have we of AI. CXone, best all the in think of the market as and that the entry put now I best becoming that from many capabilities, is thousands success best for many WFO, in players into years of and date the platform to invested CXone with

of harder for to becoming end it’s smaller the market. at compete think I really and the higher players harder

XXXX, a trend a the same a allows footprint we it’s customers. we And to increase that in in will in of way. win to way and course, saw expand existing continue, us with our have stronger even bigger rates CXone more but So that

Tyler Radke

Thank you.

Operator

from you. Barclays. Please Thank The comes with Tavy question Rosner next go ahead.

Chris Reimer

my wanted Reimer just before. Hi. taking you the just the for seen in just for of or Thank on at Tavy. This questions. any competition applications? the market is to lower cloud Chris the follow tiers you on I intensification question increase Have competition for

Barak Eilam

very, the we’ve of the end end we end, I seen is at in high It’s say competitive the difference the smaller that is the very in course, lower end. that a any the of TCO, market, competitive say very, and our of And different, but we at Also The are the has the see built a that buy features the that great I are We from but a because to that compete the need to right a capabilities way with the higher the all can’t of the the the that trying I of of that very end that lower what course, market end past. start-ups very the what course, low there financials same well order market. are there you in versus into more the different viability and can position trend lower think the change. to segmenting dramatic of way take in of us customers, as make market, we do, sure thanks a gives smaller ability in see is even business way we ones. if stay there also are platform, to competitive CXone smaller different parts in market. are

Chris Reimer

transition. conversion And cloud your be on-premise just Okay. the maybe the from enterprise on quantify to follow-up Would stemming of new customers? a percentage of cloud wins you able

Barak Eilam

I small still great ahead. think a business, customers. not very the existing a of Most is of our is a portion of is This to opportunity which business Yes. cloud date conversion

convert there start as customers still there So those as a we I’ll to you that moving remind is very, customers, a moving forward. and great upside. we convert runway very And healthy those forward is go

time, on-prem just demonstrated same to quarter First, all broader and you at that other, margin a a the annual our Xx to and customer. there for up potentially we Xx, Xx take XXXX. cloud gross and analytics to most revenue we’re our environment Xx the they go happy do note, such entire WFO, customer, convert can the increase in a revenue. that routing, quarter piece continues look the after we at when way and if it of because improve from But throughout as such take CX like-for-like, is a portfolio, of much from the starting very And

Chris Reimer

very That’s you. Thank it. helpful. Got

Barak Eilam

Thank you.

Operator

JPMorgan. comes of Paul next with question go The from line Please ahead. you. the Thank Chung

Paul Chung

taking my Hi, thanks question. for

How of the follow-up the kind another business? you hitting just the timing of the XX%? of targeting kind think in we OpEx pace operating And of on And beyond where looking are expansion margins. do in So reinvestments XXXX? about

Beth Gaspich

Yes.

the of earlier, So in we course the that expect that have margin of capability as well subsequent to as have continue expect during operating years to increase further And beyond margins highlighted course I we our XXXX, to the the to in expansion. XXXX.

look are As new leadership there the investing CXone reinvesting market our that development had platform drives into the in course, territories. we and of to foster investments into organization, the Americas go-to-market we’re at internationally R&D our drive and as in and the are where both that see to teams that back continuously we’ve as the innovation of we our we continuing continue the in our we well, expansion broaden we course, to continue and

So continuing at the keen are areas the always primary NICE. in same changed, profitability drive well. had we’ve we’ll and eye as the that time hasn’t top drive to investments, a at I a way said, That time, to we’re the those on but same line very at that of continue as

Paul Chung

your a balance little Should acquisition the expect pretty year? And that. we also of share up comfortable Thanks you similar year. your sitting How then here. this pace bit a And think do about for you stepped kind pipeline? buyback cash this

Beth Gaspich

Yes.

of opportunities us balance, I As in and the our acquisitions we business, look to for at generated mean you healthy we’ve cash opens said, key as a great overall. that amount always our strategy are up cash to really that

the did with digital we were several during of that technology-focused You quite exciting. around XXXX saw that course assets that

the be And continue allocation. so primary will our along in our to that those buyback of course, capital plan, with uses of terms

to are for leadership acquisitions there overall with strategy. opportunities to always looking potential out drive synergistic that So continue to we’re our our

Paul Chung

taking last Thank you your helpful. would share market? then do are this big be one And you do share? And today? you. sits you. Where how market comments on Evidencentral, Got you see how think Any

Barak Eilam

We and getting think the getting a to of from it’s just all in detectives, hurts almost way, – effective years digital justice the be in solve way It’s that if in potential and dramatically be It’s those actually piece severe the that of system incident, lot system What more moved amount you it’s county replicated place. amount the you’ll bad process sticking all car policing stuck. manual. hard the into being of and also know ability of and a available a including second right fully few the the of changed and of last and system how tremendous, It’s other. getting incremental evidence for to accident is evidence way this everything evidence this which, justice now it. to evidence, paper-based. or all the to get court, today, the amazed one to systems is of policing, of quantify, that and step the the prosecution or a things I’ll to every whether it’s the to anything box-based lost to quality than and whole guy that, those and per in are It’s part just are explain course, is are both is completely actually way it the criminal between

evidence, they need the we adopt the manage of years those the organizations a capabilities. to how we approach So and in a those tremendous few in digital and see increase desire to developed last

We will customers, believe that best several out we key platform and have continue. there, this have and already the we

since as of the somewhat attached to And very exponential potential pieces also system, of putting become pricing you adoption. understand. sticky overall for it evidence that Now solution, are there is hire into will number the just an the is growth a can with we

Paul Chung

Thank you. Great.

Barak Eilam

you. Thank

Operator

Thank comes question the Bank you. The next ahead. Please of of America. Liani from with go line Tal

Madeline Brooks

quick point Tal. for wanted to the over on Hi. to cloud This I just is Madeline conversion from one enterprise. Brooks go on

legacy as you Just follow-up then that, should efforts to a when customers? right we get hurdles And trying wanted the facing now to sales you or on-prem you. roadblocks in increased this see in the touch to area and quarters? that transition coming expect you’re are what base are Thank

Barak Eilam

Yes.

Things to conversion. organization we The ago years in really four So notion whole and fear enterprises it three of that the we from cloud don’t have nonissue. the in don’t see notion large past barriers are and cloud, see cloud, anymore. major any of now we seen the

a have are and different great known have certifications platform well customers also references We for. that with that all the looking is

a of to So these obvious, it’s effort environment, we’re but problem. certain customers’ about is Most are not of not to integration and conservative kind the effort the there. do

more saw change the of how and to Actually, and we lot of our quarter invest partners, see sales very terms which be people, to extremely the of doing past other is And The have with we commission a think a expenses, leverage we a proportion sell. that well. we on we we’ve are sales right international three expect it and actually date. increase to there that our done in investment We don’t sales we great we the sales years. to In dramatic we much in the happy since means completely investment are predominantly we sales of investment the we it exclusively mostly to business increase will of need you in but the to is markets, think expenses result two it marketing fourth pay already there. do in because much some going see the efforts, sales don’t only in

Madeline Brooks

Great. Thanks much. so

Barak Eilam

you. Thank

Operator

would question-and-answer Thank Eilam you. and of have you. I closing for Barak And end remarks. call like to reached Ladies gentlemen, turn Thank session. the we the to back

Barak Eilam

Thank you great to you our for talk very a again XXXX much, everyone, Wishing us. everyone call. you. and joining we’ll on next Thank

Operator

you. concludes This today’s conference. Thank

time. disconnect your this at your Thank for You participation. lines you may

NICE (NICE) 17 Feb 222021 Q4 Earnings call transcript