NICE - Earnings call transcript Q1 2022

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Operator

Welcome to the NICE conference call discussing first quarter 2022 results, and thank you all for holding. [Operator Instructions].

As a reminder, this conference is being recorded May 12, 2022. I would now like to turn the this call over to Mr. Marty Cohen, Vice President, Investor Relations at NICE. ahead. go Please

Marty Cohen

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

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

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

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

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

product conjunction it that and NICE in the and investors, are XX, hosting analysts call, detailed noted figures for presentations We'd Investor accepted will and accounting The assets Let me which differences our in expenses, you acquisition-related on generally technology program are and certain from remind reflected include from to this user of respects results the our equivalent conference. May remind accounting results we The differ intangible you for be otherwise GAAP amortization adjusted revenues also our and in today's operations, principles and that Interactions on and on adjusted of stock-based sessions. commenting press executives in we compensation. for accounting mainly like is release. unless Day Live between virtual with as will non-GAAP

at If received please to call the registration over you us And Barak. e-mail the now ir@nice.com. I'll turn e-mail, haven't

Barak Eilam

that After accelerated, a into year-over-year. revenue our XX% XXXX, are increased happy welcome, and a our reflected cloud report by significantly XX% in QX business very revenue to we in and XXXX outstanding which as Total Thank our you, strong momentum Marty, everyone. results. year grew continues

We increased same time, demand unmatched These and QX. solutions. value in The improve results in and deal growth a generated operating deals million by QX value these in cash XX% continue grew at demonstrated a profitability replacements total XX%, the for to growth income, and operating our record increase flow continued of of total durable of XX% excellent reflect EPS line drive the XX% the top further average and the strong as with strong XXX%. stellar increased value X-digit deals competitive of our $XXX

our In highly value with enterprise of power by solutions customers increase XX% bookings. addition, as platform in CXone integrated the reflected new add-on our tightly an

the forward, a story. pipeline similar Moving reveals

and NICE signed we leadership One growing our year-over-year that CXone deals solutions. footprint XX% of well-known suite of scale. encompass our QX, the complexity witnessing by of are clear full a X or value disjointed to and platform we CXone all-time AI which X-digit deals, record, increase deal taking customers the legacy than We the was meet ability at of closing included in annuity solutions. a advantage a to at at is portfolio priority company life company. more and our along lines ACV prospects as start fully is journey experience with to the In apart our platform winning X-digit rest from in is leading unparalleled domain. to different than pipeline in their customer elements in Other QX, and deliver included away us class enterprise, wherever offer solutions scale. complete They we from portfolio large or AI that apparent define and we of verticals enterprise had as they offering. and and large it This our know customer regional a key and the from X Our that multiple large pipeline native are the XXX% driving large consumers a increasing strong integrated market, in platform the This a an retailer. in by large hospitality solutions. fully a which architecture the pre-COVID widening our a the digital From a in multiple invest only integrated there place could deals enterprises, are need and vendor vast competitor. wanted chosen a without market, far are such digital bank, service and are complete our to could their Midwest-based because back enterprise seamlessly evidenced selected complete moreover, with a and more that the CXone forces: this total What we international and and cloud leadership in having deals our insurance from next-gen integrate set levels. a industry-leading platform cloud in greater X siloed increasing and our Starting large multiple industry see vendors.

in by year-over-year, led deals and a key regional a and a large accelerating base is becoming in large as We business. increasingly deal and of it business increasing is a Cloud bank. Yet, the signed still which new cloud of percentage number increased deals significantly for well-known international more force international with significant large total doubled a demand our company in already by several cloud an all of a have heavily go-to-market X-digit our for and also which see international bookings deal customer us We underpenetrated large driving another driven a market International, than is the QX. CXone markets. with stronghold key in assets fintech we digital. and momentum X-digit

pipeline opportunities. The with as We APAC scale been and meaningful with providing companies X-digit multiple large largest wins of they growth, scalable software our our will Other deals a ABC a deal solution German-based deal solution expanding state-of-the-art with an could one the tens of of incumbent ever, and significant the not the chose that we agents thousands signed business. has including multiple are a largest there further deal of BPO. key broadcast international needs generation new more cloud robust, markets, and international future-proof NICE company. for territories a in BPO's with Additionally, European the into so

a markets Our partners. growing ecosystem ubiquity international and of has extended in the the have we channel large where to

customers IBM CXone internationally. with we their enterprise to strategic businesses signed Another digitally partner transform quarter with last is help

chose NICE a over and and new fully include with industry-specific clear the to XX operation Lastly, the logo. is next-gen digital in native WEM, AI. management that capabilities breadth the platform that digital is decades is They customer that powered by single supplier, information driving that trailblazing market. sided and self-service, priority CXone. digital and cloud agents It only the their are systems a travel by by that driving company, revenue growth In CXI framework we deals powered excited their the smart at analytics, integrated and is light the the to digital engagement our consolidate our and well in of annual medical signed [indiscernible] was of all self-service of channels management service, delivering force the company. cloud single We're removed X-digit prominent far innovation forces. AI. standard unmatched XX%. in is see, and and a digital of in in the company, of into medical of knowledge X data market the a scale company, management growing the third that source proactive deals momentum payroll as onto smart deal CCaaS digital of which industry digital Smiles future. platform sizes. depth CCaaS, between deal from is felt and the they included rest provide building The extension one competitors. capable digital, ongoing service a CXI CXI dynamic an recognized get for to value CXone include digital and enterprises They a solutions quickly us QX, driving now which approach into ACV and were enrollment large digital a impressed industry. X-figure CXone increased a of the with payroll that our a industry you digital in provider AI we web platform combines by support is fully -- our chasm framework also to our differentiation CX platform for and a integrated and gaming recurring incorporates is friction-filled, QX and platform compared smartphone with will most large self-service a widening the a enterprises the conversational CXI for powered our AI a full service the With the with The and guidance, our ENLIGHTEN purpose-built success. solutions And CXI. virtual others seamlessly is CXI, is AI. aforementioned led QX, about deals Other the becoming solutions of digital in of and of self-service disjointed, superior well-known delivered

best-in-class our great firsthand largest prospects with NICE's speakers become U.S. with also turn President, George will opportunity We their and platform. including Kroger, I W. with look our how double-digit over long-term is see A industry-leading and XX,XXX TELUS Cambia Honeywell, you AI and to sheet I Clooney. virtually. and a growth, many Life Interactions and market's our executing the markets continue generation balance our financial widening our this and opportunity international outpace cash demand like Our us to and large further our digital our take These XX. on leadership. will experience partners be former with User industry's CXone of to over the to will our CXone, the Bush; record competitors. efforts Oscar-winning exceptional Conference all you profile in evolved largest in share a Moreover, Verizon, virtual of keynote now great Interactions number to to us markets, financial CXI has and our our the durable seeing event footprint paired May #X and offerings. fuel outstanding George cement leadership top enterprise Disney, profitability, next-gen drivers enterprises to the Annual others. with focus Day invite attendance in actor, strong call forward to Beth. there including to conjunction to world's in would of customers, Investor the on strategy line CX T-Mobile, of unparalleled a Interactions provides rock-solid combined allows Health, lineup

Beth Gaspich

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

Our generation. profitability and non-GAAP fully year-over-year of best-in-class first top diluted the demonstrating were levels, our EPS quarter and $XXX quarter results on outstanding to all revenue XX% line growing year-over-year exceptional the XX% increased million, financial with $X.XX. profile along first financial cash Total for to increased

Our represented record from which as represented revenue mainly total cloud. revenue, totaled customers gradually year. shift of in represented $XX X% revenue, existing last of XX% million Services to million XX% to total from up on-premise increased a attributed QX line cloud growth a XX% to increased revenue, with in and XX% and revenue, expectations growing total XX% $XXX total the in decreased continue to the million revenue total year-over-year to QX. Product of year-over-year is contribution $XXX which of XX% revenue and

of XXX% region, size, The deal geographic revenue, cross-sell year-over-year. growth to basis. and average expansive main currency and grew than revenue, of XX%, opportunities. in From from revenue, cloud NICE of deal year-over-year EMEA XX% X% basis. more which ever. Not The deal a region, One of testament the total breakdown, total cloud CX a the which both APAC, each customer offering our represented differentiators on revenue a increased EMEA cloud contribution revenue, our engagement continues deals unrivaled its did but constant increased the and APAC on our Americas largest XX% total a expand. currency number portfolio. average XX% our XX% portfolio XX% is for and to which X% only over represented APAC X% in recorded on and We XX% recorded represented constant year-over-year grew of grew

XX% that double compared our growing to $XXX our last digits. of XX% year. Customer in which QX Moving quarter is breakdown, was million, CXone we another to segments engagement our revenues, augmented the increase product and unit revenue. main a represented engagement QX by experienced XX% in capabilities. represented an strong with in growth total business both totaled business revenue self-service our from increased digital has offering customer the and Compliance, revenue Crime from in with behind $XXX of which million engine total year-over-year, coming Financial and Revenues been primarily XX%

Our gross an margin which to compared a grew gross increase to QX $XXX the to mainly first Gross in gross in increase in increased $XXX the The to points in was profit XXX basis quarter in year. year. of XX% last in to attributed last record margin, XXXX reached the of XX.X% million QX. million compared quarter margin XX.X% cloud

in from scalability in strong our industry, built itself revenue sets our apart CXone leverage, the business platform. the natively and to consistently demonstrating inherent cloud increasing stemming ability Our drive

margin totaled nearly a an compared a points operating our We end XX% an by XX% QX quarter $XX XXX industry-leading with last environment share which gross basis $X.XX, million We QX record total to increased in quarter share increase of experienced phenomenal the $XXX the XX.X%. market Earnings the of repurchases $XXX cash margin from totaled use our opportunity flow increasing another compared change XXXX. a expanded million expand QX, to record to generated year-over-year. QX, million to of and year. as per of Our million. year-over-year for to in operating since XX% first was operations, cloud the In in quarter income has $XXX first quarterly XXXX,

and $X.XXX addition, million March cash used at totaled for the investments end $XX In repayment. Total debt of we billion.

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

our sheet remain momentum in along Our us top positive cash, to from with and positions uniquely to balance the growing cash continues generation we continued the profitability our in class available our of business. fuel strength see combination

momentum XXXX, continue year. to full I and expect growth expectation with to forward conclude we cloud cloud ongoing Looking our greater or to the revenue the XX% at half second of of guidance. will reiterate be remarks my for

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

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

of to XX% growth midpoint our are We the total EPS to XXXX. full the in guidance $X.XX billion, full billion revenue to raising expect be and $X.XX for the revenue compared year XXXX. We representing range now year at

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

Operator

Instructions]. [Operator

the question first Samana Samad comes Jefferies. Our of from with line

Samad Samana

real-time us if see you now recently? XQ, you halfway healthy results, through view pipeline you're is, just on Or out in seeing more Barak, to are The really at very itself, looked XQ? you if guys a terms more a what Maybe seeing positive the saw time? strong could levels I there? activity seeing you but you. what real on you're any build And you're the same as Just macro bit we're with Good a start from itself the the maybe in stay can little maybe bookings seeing into changes and good, of quarter Barak Beth. uncertainty question in give quarter commentary and for on obviously, that if

Barak Eilam

revenue that different in the we to as in momentum I we pipeline. We as that what Throughout the as closed in see earlier booking same Sure. XXXX, call, business, Thanks, on QX, we and cell momentum. mentioned both no Samad. quarter, the the or high digital my we different it's business, the saw -- of activity, the I different level markets in No Yes. continues the well the spoke on momentum said to remarks. our and about expansion with and smart AI international and forces the the service. driving into the enterprise, in shift since reported large

those accelerating. customers continue and to and prospects agenda All the of of drive

market. time reality, you QX. in So difference. and read But also and same we will we year the real don't see any saw in in at newspaper as look all the we last we Obviously, now, right read, that

Samad Samana

just there's of I to just year. ramps. guidance. think years Great. difference you the around And bit the hear. in the a the us Could cloud maybe know great about on any for you've I of cloud know That's just terms the maybe then revenue help couple in given timing Beth, if have been different seasonality? last little

should cloud how think the we about Just revenue of the for the seasonality year? rest

Beth Gaspich

consistent trend as for we will the the seen And the what where of we revenue, years distribution result higher revenue in profitability the Yes. fact strong a expected throughout both this Samad. recurring cloud growth we've of see that, continue, that and is Thank that you year. we means of year that have that level that more a as equal in a seeing -- you're and question, well prior the

trend that see. you that's to in that we So to growth results. strong our a QX expect see continue And

is less there So seasonality.

Of course, the some quarter see quarters retail with see other. But throughout in the seasonality generally, tend year. consistent pretty spread and a like we certain always to fourth you'll

Operator

Citi. line question from Radke of next Our Tyler the comes with

Tyler Radke

think talked competitors? you saw that is that. the the this some wondering upticks quarter. displacements I driving you replacements about if was increase in What competitive could of you large unpack do Barak, you your

Barak Eilam

question. that. more great give I'll on yes, bit you a color So

realizing to hosted the penetration real low a the that it's one, of what -- is we while And competitor. that they a complete years, And markets. many solution what let's is The now right we're see or we X one who even relatively shifted offer in -- forget that version complete cloud the in built have that's cloud, and natively not the manner was X cloud, realize where years, move customers still of thought market the kind of -- other the to like that not cloud, of to first we incumbent momentum they a the only that have basically a they in cloud today. offering we legacy and last invested still and

So forces, and the need the one realization of incumbent to quickly that of legacy into customers that's that move driving they provider. replacing

to or about thing not see to comes this And when customer that The replacement, the moving CX a it customer it with operation opportunity platform that to and about CXI. a self-service doing digital goes the -- fully into single an understand is just It's second unify to with is platform that operation their a AI. we cloud. that competitive inject and it's the injected

find And us we last who ourselves is doesn't see in it replacing years. set portfolio, cases, growth the solutions the enough the least, wasn't -- say, vendors buy on not solutions in from for we the about together, solutions. of I multiple the but not mentioned past, solutions customer those the incumbent, too winning or scale one of buy multiple but adoption. mature just call the other cloud all So because and significant portfolio either, And earlier, the let's them. customers overall of it did was couple complete

to and of a being proof ours. and that So different need a fully components, of Alternatively, -- to fully a and they build-it-yourself integrator type they and tired more buy kind build are to like complete ours. they system platform of want platform like they a want they they committed realize platform from established

the we us of sources where So to incumbency competitive these and replacements. losing in significant are surge a see the

Tyler Radke

be Could terms of how the saw in the understand was help of as year, this versus the of in driver look modeling think -- we you growth And rest us quarter. the product at Street Beth, revenue? line? decline about that? revenue how your come the we stronger, least And does thinking revenue in should pipeline that product in And about just we

Beth Gaspich

Thanks for Tyler. the Yes. question,

adoption financial quarter, product and Our from growth coming still And quarter includes financial great and in FCC, year-over-year. that The business compliance had revenue grew cloud is in a mature business. crime markets, is not that there. really it had XX% with year-over-year, crime as the a the certain performance and compliance you what and was in tremendous solely of terms XX% see

to were So size deals great of and But pleased the very a with it certainly, us deals on the performance those some difficult to gives looking with the of cloud. predict. part the with tend product the lumpy be large front, opportunity the business. [indiscernible] that of and forward We on

continues but where forward to our tend FCC, cloud-centric, and time some look to from into we the highlighted, year, of and both to the on-prem. businesses, of for there half customers the as more pipeline that So market those are second of of aspects includes certain time as buy become our still more

do that see to expect in see product. and ongoing you'll see that looking that to the shift in variability should probably certainly, cloud, some FCC the forward future, you opportunity So includes continued on the business. But we

Operator

with comes question next of JMP. line from Our Walravens the Pat

Patrick Walravens

Great.

this for be challenging. great. executing is think super Beth. guys market might The are I Congratulations. I mean you

I is So think, your XX year-to-date. stock down, percent-ish

in And so $XX right, I said back, share million heard repurchases? you Beth, bought about if think guys How do you future quarter. the you

Beth Gaspich

question, the for Thanks Pat.

As where unique a are in on in relative healthy position industry we call, sheet. such we I the balance really, the have highlighted to, generally, competitors our a

really the that on $X.X are share investments, repurchase front the us billion front, We of on and as unique a and that gives well both financed. M&A about clearly well opportunity, also we have cash but

So strong as business. believe rest we of have in the consistently year, the momentum forward look our we to really that we

use going year. continue to during we're of opportunity course, this that of so the buybacks to our course And

Patrick Walravens

then maybe a follow-up. And Okay. do could if I

M&A? So funding companies you Tel actually the how clearly, for in Barak, week. Aviv doing so more is driving this feel private start do the I'm about going up, to But

Barak Eilam

market for as that a opportunities the private the in will some company, open and up us believe markets. both great this I public

great we mentioned balance before, sheet. As a Beth have

and $X.X and quarter, We generating close million, great we we an are sheet. or more this annual just are basis, to generated balance have $XXX generating -- we billion on a

in lot of versus that from have The start-ups in so way, inquiries runway. company call we great ROI incoming, Obviously, M&As, we the not also of on it, great a doing not already average. what few incoming saw them. that have we tenfold I do far have but the from muscle small see, last a grew weeks by just are amount let's start-up of -- the the small a think

the excited And at opportunity as acquisitions. ahead. actually an said, we're that. So is balance to on opportunities Beth we'll that have with prudent same an We feel the great between about have time, But always return nicely there also been we aggressive buyback program.

Operator

comes Jaluria Our of the from Capital Markets. next question line Rishi with RBC

Rishi Jaluria

the of I the step wanted of I been Beth, out U.S. move to of understand prepared to to taking large deal go a U.S.? see help this a comment, you stronger in historically, which back, in seeing appetite the back encouraging market know and always for us large large more the a APAC. you cloud can terms ready had but was cloud -- to are what you on APAC. remarks, Maybe has the to cloud made deal it a outside seems cloud, deal

actually you deal largest think I ever. cloud said

So I've maybe APAC? both for the a India to about in environment and you can cloud us And got follow-up. talk then

Barak Eilam

for Thanks that. Yes.

continues see are, is report just international many, we So mentioned mentioned see value of company, I kind and in some higher by when we not you my will and I said X-figure to full trend the customer value committed that to we great every prepared we a deals and as markets, we usually give of momentum. cloud in as the just mentioned, which color. necessarily the a the With grow. we X- consistent very say much remarks, quarter, I immediate manner, respect potential, to deal that generally, many that the

international we both as continue growing and great put grew ecosystem nicely. in key dramatically is the more And that more to very team have that, international yes, We investment own going and in in very, well adoption as presence our front. the the markets, most with

yourself, the you As it used to U.S. said lag

the the starting the much terms is terms U.S. to in it's par point think penetration. cloud I lower Now But in acceptance, of of

So the we opportunities forward. continue is to believe those and seize significant opportunity we'll moving

Rishi Jaluria

And from It's then, macro super hire and -- maybe talked fast Wonderful. tight uptick AI, some I with to productive? in what an make actual represented environment. thinking more capabilities? with tailwind existing And as that guess, contact a core talk to you adoption and of seeing a about solutions does b, that the right. environment again, where us CCaaS of deal uplift can can't sort Maybe, you're just the labor IVA All this seeing you center Barak, enough. adding you're in look companies you're IBA Can that perspective you these remind Finastra. a, AI is like of once ARPU

Barak Eilam

Sure.

the The the a is the and solution into bot sophistication, companies putting bot. because a not The across service. the labor is So and of are labor momentum adopted Otherwise, already the into inject into companies. knowledge point need with It's the AI or me cell enough. board every a hire we bots us driving why experience real that, start will that ability useless. the that save them the need at just Almost why just more to spot CX almost And is operation. hoping of do what explain disappointment, it's understanding their in the least reason put customer engaging great smart what's let framework. see this of and environment, lot the in to we hear small trying a reason free up to reason CX we from power these days they variety had major some disappointments they to

data. in are a a We of unique position where we have ton

to of deals something in to that's ENLIGHTEN very data to from we we've keep thanks to in a of the seeing signed ENLIGHTEN and that models We that which just And make those used bots number in order AI. build effective way. for that XX have AI, very something years work record doesn't meaningful order work

because reason the thing growth that is at tremendous unique it again, comes to opportunity be And data, I us. slits in of that's important most the we position for So are beginning we And and that. can the the data have the we we're what when that. a see believe that a

self-service look In together. a they double the classic that then add the you we when purpose digital terms And can of deal, come from smart ACV customer. deal call, it, such about taking of with about offer a point let's than the agents here more, replace understand going some uplift, and it of and and CXone for you market to call you see more a geography, million reason we agents say, full labor. the at labor, the agent, has replace $XX,XXX. little a depending there. and CCaaS If cost what XX% those and can of your I you that, That's we be will usually typical back on It's reason can because to why potential the a the over of out contact the on up about labor, center cost just that AI XX can even with

Operator

Our question from Chris the of with next comes Reimer Barclays. line

Chris Reimer

of we at you my was has could a but asked that give you. spend for great quarters. kind the -- elevated what been The just wondering what forward. last questions of spend Congratulations looking the going if have maybe already, Most And one been color on on result. how I should to? contributing Beth, be of is some R&D couple spend

Beth Gaspich

are CXone market. for cloud question. general, the you Thank of the platforms in course, In leaders Sure. our

solutions the our investment and you on We that offerings. teams. And our within in in ongoing have we are that innovation R&D of see terms always our focused

focus breadth So platforms internally continue we it's that cloud the to offer. really reflective of depth out the complexity, and have the build to the we just of really

year-over-year, of look kind consistent. revenue, generally, percent of pretty as we're R&D you If the a at

And you add can stays XX% roughly to of in range, the capitalized expect XX% when that so revenue same you it back R&D.

So again, is expectation, our should continue cloud be driven that focus the but it fuel innovation back to by into offering. our our to

Barak Eilam

I topic for question. my and want something, add heart. to to that's close It's you a the thank

thing our in investment because the native it our investment, very XX%, already also that CXone all R&D a resell way Well, future you way the that you But have solutions. our own cloud to because in a more in in-house. about think proud that of amortization, that complete of and important of a tremendous R&D customer margin. with gross gross other we'll and a solution. scale solution, is very solutions The actually will improve that, the I'm do high-priced revenue. go to So fully in a companies built have of the the ROI they native about transits our our we other if the solution. XX% resell don't is doing when result as And allows not other experience you we need improvement deterioration margin of the don't lot at have that neutralize or We complete. try enjoys to they that, It's the and at see margin us gross

Operator

Our of question Morgan from Meta next line comes the Marshall Stanley. with

Meta Marshall

A more couple One of questions. digging just into details.

spoke more a RFPs coming QX. then to in-depth color they And you the of replaced? if seen replacements. some Are on maybe initial in I You Are there question. -- of impact bot are a could get a in sense forward [indiscernible] for to they in. want digital the lot only? for kind been give FX impact of over any Just was how just since going guide

the implementations. And it kind for in it of implementation? is the whole so you're the door wondering just initial foot seeing what Or Is as with smaller?

Beth Gaspich

question, for back you the FX-related address the I'll Thank it then Yes. hand question, to Barak. I'll Meta.

would than we higher impact On adjust were you what it the provided. on see for rate, guidance guidance question, if the exchange to even the we

let would that impact be a Barak on basis, the the rest. I'll address and currency So constant

Barak Eilam

respect RFPs. With to Yes.

is things cloud. when first converge WEM, in here the and with one of routing to with that back I'll CXone analytics built we're One the years and started the few we a just mention

multiple in is As a -- are is RFPs customers came actually taking before, days that into starting plus in And of had of result that, result change a I've -- talked before what replace is understand it to as that as also lot smart [indiscernible] a and that, our which see What we that plus these we And great all the to a native digital, approach. and a order further that framework make convergence it drove CXI, about we buy market, buying integrate they of after is smart service more or of get a of together. said reality, that, RFPs I self-service of of a more self and deal consolidated RFP saw vendors the solutions. try from they solutions a outcome. need with keep a all those platform to point can't to of and we

believe already starting a give see RFPs, in to us advantage will it the change we in that great future. and So we're

Operator

line comes question of the America. Bank with Funk from of next Michael Our

Michael Funk

Yes. could. couple, A I if

a Europe with macroeconomic thinking migration. the though, behind shifting cost you're enterprise, a been costs that I how cloud the as are understand couple there can cloud for that certainly a with That's positive upfront I migration. longer-term tailwind. obviously, U.S. to the environment. Would high be about So to know of love been appreciate savings years well has but

migration you So if slow? do will a anticipate that, more hit you will that economic we think maintained? be do difficult that do pace environment, Or

Barak Eilam

NICE with I and about in line XX of I've you I've And at XXXX back here and been for industry. tell our in been XXXX. can least back the -- years,

economy service extremely Our things need to the brands CX This Customer if a brands. business, are is and their most important whether provide are is service, mission-critical. consumers to negative there on outstanding look positive customers to customer, or economy. you solutions the

any past don't the I experience, macroeconomics We in -- in and demand no was and demand right than my different customers before. in change any we're is geography. So to due really see at least now that to negative or believe change mission-critical now

greater strong And verticals actually were will the back operate economy, as pre-COVID a to than we bad some that said contrary, back markets of industry be time. demand there very and and see times in good all -- the during in we continue demand. somewhat the durability before, that I believe with we times our to COVID and On in muted both

Michael Funk

and I if lot increased cost. that inflation more, specifically could. hearing a energy we're One Obviously,

to is of And you, energy great there that impact to centers? So business how business? provider what see those years. if potential at the to margin couple the improvement would of a is cloud in over higher in that But ability your data the the costs last pass pass-through your margin the on in

Barak Eilam

it's At for marginal very least themselves. for And us. results now, we for see speak the -- don't

You see versus year. the continues last margin quarter this improvement gross

is You for see and our overall profitability we also it keep profitability improving. guidance the very the see cash you healthy, generation. in gave Also

think the have minimal impact very on fluctuations So I and company business. is those in that we're a software that our cloud,

Operator

line question of from the JPMorgan. next Chung Our Paul with comes

Paul Chung

pricing your on just trends, environment, the of is pricing competitive raise opportunities to you across view? strong prices of So seeing given How demand the such environment in kind are kind solutions?

Barak Eilam

don't see any right dramatic now. change We

in didn't Our see CX, past we complexity don't business, that the future we in the I in think inherited -- solutions. see the we'll commoditization the and don't of

this us. market before, of the sure that said that which their of give see companies buying do of the I see as the very customers into money, road, approach will eventually our market buy those more think not us way sustainable believe that market, normalize On a ourselves end adopting nice I'm very larger were of in the in will we to a a is the lower contrary, be losing down that portion a to we lot a ton portfolio private that I where hyped trying or positive and I uplift.

Paul Chung

kind cloud you some across seeing different verticals. seeing industry for strength Great. adoption? bigger several wins And broadly across of the Were then quite you're opportunities verticals of some and there

Barak Eilam

not repeat? I Can I'm got... you sure

Beth Gaspich

industry In start. Maybe I'll verticals.

Barak Eilam

Go ahead. ahead. Go Yes.

Beth Gaspich

say, COVID at would as sluggish so travel-related in of pipeline, in are that I as verticals that bookings verticals companies. it certain like script. actually are When Barak quite were are both during pre-COVID, the in hospitality, strong. looks back the levels Those coming our mentioned we recently back well specifically, we signed that Yes. see that kind now

see And so that as in in being our is but business, reflected pipeline forward-looking you also well.

Paul Chung

expenses then rebound kind growth in a Great. to big lastly, after have OpEx some And some of fuel in back. and 'XX come

OpEx in below your model? to of pace growth pace of this kind the the about seeing with of forward, kind typical revenue back of line right kind You're revenue. growth to the moving slightly way reverting Is think more

Beth Gaspich

Generally, in don't come was see that we're in Yes. anticipated back, like this is much budgets any to seeing that something of was of that that our see terms material our expenses in pre-COVID. start place but terms we heavier of OpEx, of were It's what all, from travel we impact for first year. course,

our to we as last iterated well in we So operating to that in expansion general, margin. quarter expect continue see

that's reflected in And base. cost so the

embedded of And and expect course, so within also course you this that's should continue for what of the guidance. is year our to

Operator

back no hand to There for closing to in further questions are remarks. call I'd like the the queue. management

Barak Eilam

on day. look much Thank Investor you. Day. you us, Thank all joining you very and the forward for great to we on Have XXth see our a

Operator

Ladies your and participation. you does teleconference. for today's Thank gentlemen, this conclude

You may have disconnect and a your lines time, wonderful at this day.

NICE (NICE) 12 May 222022 Q1 Earnings call transcript