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NICE Reports Growth of 12% in Total Revenue and 26% in Cloud Revenue for the Third Quarter of 2022

  • Double-Digit Growth in Operating Income and EPS Driven by Further Significant Expansion in Cloud Gross Margin
  • Constant Currency Year-over-Year Total Revenue Growth of 14% and 27% in Cloud Revenue
  • Company Announces New Share Buyback Program of $250 million

NICE (NASDAQ: NICE) today announced results for the third quarter ended September 30, 2022.

Third Quarter 2022 Financial Highlights

GAAP

Non-GAAP

Total revenue of $554.7 million, growth of 12.3% year-over-year

Total revenue of $554.7 million, growth of 12.2% year-over-year

Cloud revenue of $330.5 million, growth of 26.2% year-over-year

Cloud revenue of $330.5 million, growth of 26.0% year-over-year

Cloud gross margin of 64.1% compared to 59.6% last year

Cloud gross margin of 70.4% compared to 67.1% last year

Total gross margin of 69.2% compared to 67.4% last year

Total gross margin of 73.5% compared to 72.3% last year

Operating income of $90.3 million compared to $67.6 million last year, growth of 33.6% year-over-year

Operating income of $159.3 million compared to $140.0 million last year, growth of 13.8% year-over-year

Operating margin of 16.3% compared to 13.7% last year

Operating margin of 28.7%, compared to 28.3% last year

Diluted EPS of $1.07 versus $0.75 last year, growth of 42.7%

Diluted EPS of $1.92 versus $1.68 last year, growth of 14.3%

“We continue to thrive and are pushing full steam ahead as evidenced by another quarter of solid results across the board,” said Barak Eilam, CEO NICE. “We reported double-digit growth in total revenue driven by another excellent quarter in cloud revenue, which grew 27% at constant currency. We delivered another quarter of strong profitability, and we expect to continue to deliver profitable growth with operating income and earnings per share growing at double-digits moving forward.”

Mr. Eilam continued, “We are witnessing a dramatic shift in the enterprise software landscape that is creating massive opportunities for some, and unbridgeable gaps for others. At NICE, we see great opportunities accentuated by the mission critical nature of our solutions used by thousands of customers, and by being the go-to market leader for AI driven automation solutions that are critical for enterprises to overcome shortages and costs of labor in the current environment. Moreover, we have, by far, the strongest financial profile in our space, including a substantial net cash position. Our long-standing investment in innovation, which continues to deliver the most complete and highly differentiated platforms in our industry, along with our seasoned and committed leadership team, empowers us to continue to outpace the market.”

GAAP Financial Highlights for the Third Quarter Ended September 30:

Revenues: Third quarter 2022 total revenues increased 12.3% to $554.7 million compared to $493.8 million for the third quarter of 2021.

Gross Profit: Third quarter 2022 gross profit was $383.9 million compared to $333.0 million for the third quarter of 2021. Third quarter 2022 gross margin was 69.2% compared to 67.4% for the third quarter of 2021.

Operating Income: Third quarter 2022 operating income was $90.3 million compared to $67.6 million for the third quarter of 2021. Third quarter 2022 operating margin was 16.3% compared to 13.7% for the third quarter of 2021.

Net Income: Third quarter 2022 net income was $71.2 million compared to $50.7 million for the third quarter of 2021. Third quarter 2022 net income margin was 12.8% compared to 10.3% for the third quarter of 2021.

Fully Diluted Earnings Per Share: Fully diluted earnings per share for the third quarter of 2022 increased 42.7% to $1.07 compared to $0.75 in the third quarter of 2021.

Operating Cash Flow and Cash Balance: Third quarter 2022 operating cash flow was $94.3 million.

In the third quarter, $22.5 million was used for share repurchases. As of September 30, 2022, total cash and cash equivalents, and short-term investments were $1,461.2 million. Our debt, net of a hedge instrument, was $541.2 million, resulting in net cash and investments of $920.0 million.

Non-GAAP Financial Highlights for the Third Quarter Ended September 30:

Revenues: Third quarter 2022 total revenues increased 12.2% (13.8% at constant currency) to $554.7 million compared to $494.4 million for the third quarter of 2021.

Gross Profit: Third quarter 2022 Non-GAAP gross profit increased to $408.0 million compared to $357.5 million for the third quarter of 2021. Third quarter 2022 Non-GAAP gross margin was 73.5% compared to 72.3% for the third quarter of 2021.

Operating Income: Third quarter 2022 Non-GAAP operating income increased to $159.3 million compared to $140.0 million for the third quarter of 2021. Third quarter 2022 Non-GAAP operating margin was 28.7% compared to 28.3% for the third quarter of 2021.

Net Income: Third quarter 2022 Non-GAAP net income increased to $127.8 million compared to $112.6 million for the third quarter of 2021. Third quarter 2022 Non-GAAP net income margin totaled 23.0% compared to 22.8% for the third quarter of 2021.

Fully Diluted Earnings Per Share: Third quarter 2022 Non-GAAP fully diluted earnings per share increased 14.3% (16.7% at constant currency) to $1.92 compared to $1.68 for the third quarter of 2021.

Full Year 2022 Guidance:

The Company is raising its 2022 Non-GAAP full year total revenue and fully diluted earnings per share guidance based on constant currency. The Company is providing additional disclosure of full year guidance in constant currency resulting from stronger than expected foreign exchange headwinds.

Excluding these headwinds, full year 2022 Non-GAAP total revenue guidance would be $15 million higher and 2022 Non-GAAP fully diluted earnings per share would be $0.04 higher.

The following table summarizes our guidance for the full-year 2022:

 

 

Full-Year 2022 Non-GAAP Guidance*

 

 

 

Range Amount

 

Year/Year Growth at

Midpoint

 

Constant Currency

Year/Year Growth at Midpoint

 

Revenue ($ in millions)

 

$2,168 - $2,188

 

13.1%

 

13.8%

EPS

 

$7.40 - $7.60

 

15.0%

 

15.6%

*The impact of foreign exchange for the fourth quarter is based on September 2022 foreign exchange rates in comparison with average exchange rates in Q4/2021.

Quarterly Results Conference Call

NICE management will host its earnings conference call today November 10, 2022, at 8:30 AM ET, 13:30 GMT, 15:30 Israel, to discuss the results and the company's outlook. To participate in the call, please dial into the following numbers: United States 1-877-407-4018 or +1-201-689-8471, United Kingdom 0-800-756-3429, Israel 1-809-406-247. The call will be webcast live on the Company’s website at https://www.nice.com/investor-relations/upcoming-event.

Explanation of Non-GAAP measures

Non-GAAP financial measures are included in this press release. 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 discount on debt and loss from extinguishment of debt and the tax effect of the Non-GAAP adjustments. FASB issued an accounting update, ASU2021-08, Business Combinations, in the fourth quarter of 2021. The amendments in ASU 2021-08 require acquiring entities to apply Topic 606 to recognize and measure contract assets and contract liabilities in a business combination. Before this guidance and through December 31, 2020, business combination accounting rules required recognizing a legal performance obligation related to a revenue arrangement of an acquired entity as a liability. The amount assigned to such liability was based on its fair value at the date of acquisition. Effective January 1, 2021, the Company early adopted the new guidance retroactively to the start of the year. The Company has applied the new guidance retrospectively to all business combinations for which the acquisition date occurred on or after January 1, 2021, and therefore comparative financials for periods during 2021 have been adjusted accordingly to recognize the full amount of revenue associated with acquisitions. The Company believes that these Non-GAAP financial measures, used in conjunction with the corresponding GAAP measures, provide investors with useful supplemental information about the financial performance of our business. We believe Non-GAAP financial measures are useful to investors as a measure of the ongoing performance of our business. Our management regularly uses our supplemental Non-GAAP financial measures internally to understand, manage and evaluate our business and to make financial, strategic and operating decisions. These Non-GAAP measures are among the primary factors management uses in planning for and forecasting future periods. Our Non-GAAP financial measures are not meant to be considered in isolation or as a substitute for comparable GAAP measures and should be read only in conjunction with our consolidated financial statements prepared in accordance with GAAP. These Non-GAAP financial measures may differ materially from the Non-GAAP financial measures used by other companies. Reconciliation between results on a GAAP and Non-GAAP basis is provided in a table immediately following the Consolidated Statements of Income. The Company provides guidance only on a Non-GAAP basis. A reconciliation of guidance from a GAAP to Non-GAAP basis is not available due to the unpredictability and uncertainty associated with future events that would be reported in GAAP results and would require adjustments between GAAP and Non-GAAP financial measures, including the impact of future possible business acquisitions. Accordingly, a reconciliation of the guidance based on Non-GAAP financial measures to corresponding GAAP financial measures for future periods is not available without unreasonable effort.

Explanation of Constant Currency

NICE presents constant currency information to provide a framework for assessing how our underlying businesses performed excluding the effect of foreign currency rate fluctuations. To present this information, current results for transactions in currencies other than United States dollars are converted into United States dollars using the average exchange rates from the comparative period rather than the actual exchange rates in effect during the current period. Future expected results for transactions in currencies other than United States dollars are converted into United States dollars using the exchange rates in effect in the last month of the reporting period. NICE has provided this financial information to aid investors in better understanding our performance. These constant currency financial measures presented in this release should not be considered as a substitute for, or superior to, the measures of financial performance prepared in accordance with GAAP.

About NICE

NICE (Nasdaq: NICE) is the worldwide leading provider of both cloud and on-premises enterprise software solutions that empower organizations to make smarter decisions based on advanced analytics of structured and unstructured data. NICE helps organizations of all sizes deliver better customer service, ensure compliance, combat fraud and safeguard citizens. Over 25,000 organizations in more than 150 countries, including over 85 of the Fortune 100 companies, are using NICE solutions. www.nice.com.

Trademark Note: NICE and the NICE logo are trademarks or registered trademarks of NICE. All other marks are trademarks of their respective owners. For a full list of NICE' marks, please see: http://www.nice.com/nice-trademarks.

Forward-Looking Statements

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,” “intend,” “should,” “project,” “anticipate,” “plan,” and similar expressions. Forward-looking statements are based on the current beliefs, expectations and assumptions of the Company’s management regarding the future of the Company’s business, future plans and strategies, projections, anticipated events and trends, the economy and other future conditions. Examples of forward-looking statements include guidance regarding the Company’s revenue and earnings and the growth of our cloud, analytics and artificial intelligence business.

Forward looking statements are inherently subject to significant economic, competitive and other uncertainties and contingencies, many of which are beyond the control of management. The Company cautions that these statements are not guarantees of future performance, and investors should not place undue reliance on them. There are or will be important known and unknown factors and uncertainties that could cause actual results to differ materially from those expressed or implied in the forward-looking statements. These factors, include, but are not limited to, risks associated with changes in economic and business conditions, competition, successful execution of the Company’s growth strategy, success and growth of the Company’s cloud Software-as-a-Service business, difficulties in making additional acquisitions or effectively integrating acquired operations, products, technologies and personnel, the Company’s dependency on third-party cloud computing platform providers, hosting facilities and service partners, rapidly changing technology, cyber security attacks or other security breaches against the Company, privacy concerns and legislation impacting the Company’s business, changes in currency exchange rates and interest rates, the effects of additional tax liabilities resulting from our global operations, uncertainty related to COVID-19 and various other factors and uncertainties discussed in our filings with the U.S. Securities and Exchange Commission (the “SEC”).

You are encouraged to carefully review the section entitled “Risk Factors” in our latest Annual Report on Form 20-F and our other filings with the SEC for additional information regarding these and other factors and uncertainties that could affect our future performance. The forward-looking statements contained in this press release speak only as of the date hereof, and the Company undertakes no obligation to update or revise them, whether as a result of new information, future developments or otherwise, except as required by law.

 

NICE LTD. AND SUBSIDIARIES

 

 

 

 

 

 

CONDENSED CONSOLIDATED BALANCE SHEETS

   

U.S. dollars in thousands

   
 
 

September 30,

 

December 31,

 

2022

 

2021

 

Unaudited

 

Audited

ASSETS

   

 

 

 

 

 

CURRENT ASSETS:

   

Cash and cash equivalents

 

$

423,032

 

$

378,656

Short-term investments

 

 

1,038,160

 

 

1,046,095

Trade receivables

 

 

469,230

 

 

395,583

Debt hedge option

 

 

118,694

 

 

292,940

Prepaid expenses and other current assets

 

 

192,105

 

 

184,604

     

Total current assets

 

 

2,241,221

 

 

2,297,878

     

LONG-TERM ASSETS:

   

Property and equipment, net

 

 

157,992

 

 

145,654

Deferred tax assets

 

 

83,457

 

 

55,246

Other intangible assets, net

 

 

211,200

 

 

295,378

Operating lease right-of-use assets

 

 

105,317

 

 

85,055

Goodwill

 

 

1,577,871

 

 

1,606,756

Prepaid expenses and other long-term assets

 

 

246,110

 

 

224,445

 

 

 

 

Total long-term assets

 

 

2,381,947

 

 

2,412,534

     

TOTAL ASSETS

 

$

4,623,168

 

$

4,710,412

     

LIABILITIES AND SHAREHOLDERS' EQUITY

   
     

CURRENT LIABILITIES:

   

Trade payables

 

$

37,373

 

$

36,121

Deferred revenues and advances from customers

 

 

329,203

 

 

330,459

Current maturities of operating leases

 

 

14,531

 

 

19,514

Debt

 

 

204,943

 

 

395,946

Accrued expenses and other liabilities

 

 

477,033

 

 

487,547

     

Total current liabilities

 

 

1,063,083

 

 

1,269,587

     

LONG-TERM LIABILITIES:

   

Deferred revenues and advances from customers

 

 

55,142

 

 

66,606

Operating leases

 

 

100,757

 

 

81,185

Deferred tax liabilities

 

 

4,165

 

 

7,429

Debt

 

 

454,954

 

 

429,267

Other long-term liabilities

 

 

17,067

 

 

18,379

     

Total long-term liabilities

 

 

632,085

 

 

602,866

     

SHAREHOLDERS' EQUITY

   

Nice Ltd's equity

 

 

2,915,076

 

 

2,825,085

Non-controlling interests

 

 

12,924

 

 

12,874

     

Total shareholders' equity

 

 

2,928,000

 

 

2,837,959

     

TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY

 

$

4,623,168

 

$

4,710,412 

 

NICE LTD. AND SUBSIDIARIES

 

 

 

 

 

 

 

 

 

 

 

 

 

 

CONSOLIDATED STATEMENTS OF INCOME

 

 

 

 

     

U.S. dollars in thousands (except per share amounts)

         
 

 

 

Quarter ended

 

Year to date

 

September 30,

 

September 30,

 

 

2022

 

 

 

2021

 

 

2022

 

 

 

2021

 

Unaudited

 

Unaudited

 

Unaudited

 

Unaudited

         

Revenue:

       

Cloud

 

$

330,487

 

 

$

261,823

 

$

936,472

 

 

$

733,424

Services

 

 

165,202

 

 

 

164,783

 

 

488,909

 

 

 

493,707

Product

 

 

59,035

 

 

 

67,223

 

 

187,353

 

 

 

178,546

Total revenue

 

 

554,724

 

 

 

493,829

 

 

1,612,734

 

 

 

1,405,677

         

Cost of revenue:

       

Cloud

 

 

118,706

 

 

 

105,790

 

 

345,497

 

 

 

298,544

Services

 

 

45,697

 

 

 

47,980

 

 

137,598

 

 

 

143,796

Product

 

 

6,379

 

 

 

7,073

 

 

19,613

 

 

 

16,872

Total cost of revenue

 

 

170,782

 

 

 

160,843

 

 

502,708

 

 

 

459,212

         

Gross profit

 

 

383,942

 

 

 

332,986

 

 

1,110,026

 

 

 

946,465

         

Operating expenses:

       

Research and development, net

 

 

74,048

 

 

 

74,482

 

 

224,108

 

 

 

195,855

Selling and marketing

 

 

158,608

 

 

 

131,776

 

 

461,636

 

 

 

386,530

General and administrative

 

 

60,991

 

 

 

59,134

 

 

176,933

 

 

 

165,239

Total operating expenses

 

 

293,647

 

 

 

265,392

 

 

862,677

 

 

 

747,624

         

Operating income

 

 

90,295

 

 

 

67,594

 

 

247,349

 

 

 

198,841

         

Financial and other expense/(income), net

 

 

(596

)

 

 

3,138

 

 

(1,032

)

 

 

15,594

         

Income before tax

 

 

90,891

 

 

 

64,456

 

 

248,381

 

 

 

183,247

Taxes on income

 

 

19,645

 

 

 

13,803

 

 

53,622

 

 

 

35,186

Net income

 

$

71,246

 

 

$

50,653

 

$

194,759

 

 

$

148,061

         
         

Earnings per share:

       

Basic

 

$

1.12

 

 

$

0.80

 

$

3.05

 

 

$

2.35

Diluted

 

$

1.07

 

 

$

0.75

 

$

2.93

 

 

$

2.22

         

Weighted average shares outstanding:

       

Basic

 

 

63,739

 

 

 

63,182

 

 

63,763

 

 

 

63,125

Diluted

 

 

66,446

 

 

 

67,101

 

 

66,524

 

 

 

66,779

 

NICE LTD. AND SUBSIDIARIES

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

CONSOLIDATED CASH FLOW STATEMENTS

       

U.S. dollars in thousands

       
 

 

 

Quarter ended

 

Year to date

 

September 30,

 

September 30,

 

 

2022

 

 

 

2021

 

 

 

2022

 

 

 

2021

 

 

Unaudited

 

Unaudited

 

Unaudited

 

Unaudited

         

Operating Activities

       
         

Net income

 

$

71,246

 

 

$

50,653

 

 

$

194,759

 

 

$

148,061

 

Adjustments to reconcile net income to net cash provided by operating activities

       

Depreciation and amortization

 

 

42,594

 

 

 

45,907

 

 

 

129,077

 

 

 

136,742

 

Stock based compensation

 

 

42,396

 

 

 

40,628

 

 

 

133,689

 

 

 

103,062

 

Amortization of premium and discount and accrued interest on marketable securities

 

 

2,090

 

 

 

4,015

 

 

 

7,162

 

 

 

10,012

 

Deferred taxes, net

 

 

(11,582

)

 

 

(13,137

)

 

 

(23,626

)

 

 

(30,202

)

Changes in operating assets and liabilities:

       

Trade Receivables

 

 

(14,780

)

 

 

(23,161

)

 

 

(85,635

)

 

 

(45,628

)

Prepaid expenses and other assets

 

 

137

 

 

 

(11,255

)

 

 

(40,273

)

 

 

(36,218

)

Trade payables

 

 

(22,789

)

 

 

(14,435

)

 

 

1,643

 

 

 

(9,643

)

Accrued expenses and other current liabilities

 

 

24,048

 

 

 

35,030

 

 

 

(10,283

)

 

 

22,601

 

Operating lease right-of-use assets

 

 

3,494

 

 

 

3,394

 

 

 

16,814

 

 

 

12,317

 

Deferred revenue

 

 

(38,963

)

 

 

(14,218

)

 

 

(2,332

)

 

 

33,046

 

Operating lease liabilities

 

 

(5,057

)

 

 

(4,330

)

 

 

(22,488

)

 

 

(14,805

)

Amortization of discount on debt

 

 

1,143

 

 

 

3,911

 

 

 

3,431

 

 

 

11,523

 

Loss from extinguishment of debt

 

 

1

 

 

 

778

 

 

 

1,206

 

 

 

8,076

 

Other

 

 

289

 

 

 

(302

)

 

 

(135

)

 

 

214

 

Net cash provided by operating activities

 

 

94,267

 

 

 

103,478

 

 

 

303,009

 

 

 

349,158

 

         

Investing Activities

       
         

Purchase of property and equipment

 

 

(6,067

)

 

 

(8,153

)

 

 

(20,952

)

 

 

(21,113

)

Purchase of Investments

 

 

(143,655

)

 

 

(58,148

)

 

 

(365,457

)

 

 

(281,896

)

Proceeds from Investments

 

 

140,814

 

 

 

58,860

 

 

 

322,404

 

 

 

225,964

 

Capitalization of software development costs

 

 

(13,427

)

 

 

(10,712

)

 

 

(37,171

)

 

 

(31,987

)

Other

 

 

-

 

 

 

-

 

 

 

276

 

 

 

-

 

Payments for business and asset acquisitions, net of cash acquired

 

 

-

 

 

 

(14,302

)

 

 

-

 

 

 

(143,164

)

Net cash used in investing activities

 

 

(22,335

)

 

 

(32,455

)

 

 

(100,900

)

 

 

(252,196

)

         

Financing Activities

       
         

Proceeds from issuance of shares upon exercise of share options

 

 

151

 

 

 

1,109

 

 

 

424

 

 

 

3,484

 

Purchase of treasury shares

 

 

(22,489

)

 

 

(4,346

)

 

 

(120,401

)

 

 

(48,908

)

Dividends paid to noncontrolling interest

 

 

-

 

 

 

-

 

 

 

(376

)

 

 

(801

)

Repayment of debt

 

 

(18

)

 

 

(10,501

)

 

 

(20,128

)

 

 

(93,315

)

Net cash provided by/(used in) financing activities

 

 

(22,356

)

 

 

(13,738

)

 

 

(140,481

)

 

 

(139,540

)

         

Effect of exchange rates on cash and cash equivalents

 

 

(5,663

)

 

 

(3,041

)

 

 

(12,302

)

 

 

(1,993

)

         

Net change in cash, cash equivalents and restricted cash

 

 

43,913

 

 

 

54,244

 

 

 

49,326

 

 

 

(44,571

)

Cash, cash equivalents and restricted cash, beginning of period

 

$

384,069

 

 

$

343,452

 

 

$

378,656

 

 

$

442,267

 

         

Cash, cash equivalents and restricted cash, end of period

 

$

427,982

 

 

$

397,696

 

 

$

427,982

 

 

$

397,696

 

 

NICE LTD. AND SUBSIDIARIES

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

RECONCILIATION OF GAAP TO NON-GAAP RESULTS

       

U.S. dollars in thousands (except per share amounts)

       

 

         
 

Quarter ended

 

Year to date

 

September 30,

 

September 30,

 

 

2022

 

 

 

2021

 

 

 

2022

 

 

 

2021

 

GAAP revenues

 

$

554,724

 

 

$

493,829

 

 

$

1,612,734

 

 

$

1,405,677

 

Valuation adjustment on acquired deferred cloud revenue

 

 

-

 

 

 

570

 

 

 

-

 

 

 

4,372

 

Valuation adjustment on acquired deferred services revenue

 

 

-

 

 

 

10

 

 

 

-

 

 

 

175

 

Non-GAAP revenues

 

$

554,724

 

 

$

494,409

 

 

$

1,612,734

 

 

$

1,410,224

 

         
         

GAAP cost of revenue

 

$

170,782

 

 

$

160,843

 

 

$

502,708

 

 

$

459,212

 

Amortization of acquired intangible assets on cost of cloud

 

 

(18,564

)

 

 

(17,493

)

 

 

(55,851

)

 

 

(53,220

)

Amortization of acquired intangible assets on cost of services

 

 

-

 

 

 

(1,107

)

 

 

(377

)

 

 

(3,558

)

Amortization of acquired intangible assets on cost of product

 

 

(242

)

 

 

(283

)

 

 

(776

)

 

 

(853

)

Valuation adjustment on acquired deferred cost of cloud

 

 

13

 

 

 

25

 

 

 

41

 

 

 

76

 

Cost of cloud revenue adjustment (1)

 

 

(2,319

)

 

 

(2,117

)

 

 

(6,389

)

 

 

(5,287

)

Cost of services revenue adjustment (1)

 

 

(2,778

)

 

 

(2,835

)

 

 

(8,264

)

 

 

(6,916

)

Cost of product revenue adjustment (1)

 

 

(135

)

 

 

(159

)

 

 

(401

)

 

 

(410

)

Non-GAAP cost of revenue

 

$

146,757

 

 

$

136,874

 

 

$

430,691

 

 

$

389,044

 

         
         

GAAP gross profit

 

$

383,942

 

 

$

332,986

 

 

$

1,110,026

 

 

$

946,465

 

Gross profit adjustments

 

 

24,025

 

 

 

24,549

 

 

 

72,017

 

 

 

74,715

 

Non-GAAP gross profit

 

$

407,967

 

 

$

357,535

 

 

$

1,182,043

 

 

$

1,021,180

 

         
         

GAAP operating expenses

 

$

293,647

 

 

$

265,392

 

 

$

862,677

 

 

$

747,624

 

Research and development (1)

 

 

(7,424

)

 

 

(7,073

)

 

 

(23,825

)

 

 

(15,241

)

Sales and marketing (1)

 

 

(13,723

)

 

 

(9,707

)

 

 

(43,121

)

 

 

(27,526

)

General and administrative (1)

 

 

(16,505

)

 

 

(19,998

)

 

 

(52,991

)

 

 

(51,373

)

Amortization of acquired intangible assets

 

 

(7,379

)

 

 

(11,109

)

 

 

(23,153

)

 

 

(30,769

)

Valuation adjustment on acquired deferred commission

 

 

48

 

 

 

53

 

 

 

153

 

 

 

161

 

Non-GAAP operating expenses

 

$

248,664

 

 

$

217,558

 

 

$

719,740

 

 

$

622,876

 

         
         

GAAP financial and other expense (income), net

 

$

(596

)

 

$

3,138

 

 

$

(1,032

)

 

$

15,594

 

Amortization of discount on debt and loss from extinguishment of debt

 

 

(1,144

)

 

 

(4,469

)

 

 

(4,637

)

 

 

(19,406

)

Non-GAAP financial and other income, net

 

$

(1,740

)

 

$

(1,331

)

 

$

(5,669

)

 

$

(3,812

)

         
         

GAAP taxes on income

 

$

19,645

 

 

$

13,803

 

 

$

53,622

 

 

$

35,186

 

Tax adjustments re non-GAAP adjustments

 

 

13,598

 

 

 

14,916

 

 

 

42,860

 

 

 

47,259

 

Non-GAAP taxes on income

 

$

33,243

 

 

$

28,719

 

 

$

96,482

 

 

$

82,445

 

         
         

GAAP net income

 

$

71,246

 

 

$

50,653

 

 

$

194,759

 

 

$

148,061

 

Valuation adjustment on acquired deferred revenue

 

 

-

 

 

 

580

 

 

 

-

 

 

 

4,547

 

Valuation adjustment on acquired deferred cost of cloud revenue

 

 

(13

)

 

 

(25

)

 

 

(41

)

 

 

(76

)

Amortization of acquired intangible assets

 

 

26,185

 

 

 

29,992

 

 

 

80,157

 

 

 

88,400

 

Valuation adjustment on acquired deferred commission

 

 

(48

)

 

 

(53

)

 

 

(153

)

 

 

(161

)

Share-based compensation (1)

 

 

42,884

 

 

 

40,934

 

 

 

134,991

 

 

 

103,891

 

Acquisition related expenses (2)

 

 

-

 

 

 

955

 

 

 

-

 

 

 

2,862

 

Amortization of discount on debt and loss from extinguishment of debt

 

 

1,144

 

 

 

4,469

 

 

 

4,637

 

 

 

19,406

 

Tax adjustments re non-GAAP adjustments

 

 

(13,598

)

 

 

(14,916

)

 

 

(42,860

)

 

 

(47,259

)

Non-GAAP net income

 

$

127,800

 

 

$

112,589

 

 

$

371,490

 

 

$

319,671

 

         
         

GAAP diluted earnings per share

 

$

1.07

 

 

$

0.75

 

 

$

2.93

 

 

$

2.22

 

         

Non-GAAP diluted earnings per share

 

$

1.92

 

 

$

1.68

 

 

$

5.58

 

 

$

4.79

 

         

Shares used in computing GAAP diluted earnings per share

 

 

66,446

 

 

 

67,101

 

 

 

66,524

 

 

 

66,779

 

         

Shares used in computing non-GAAP diluted earnings per share

 

 

66,446

 

 

 

67,101

 

 

 

66,524

 

 

 

66,779

 

 

NICE LTD. AND SUBSIDIARIES

 

 

 

 

 

 

 

 

 

 

 

 

RECONCILIATION OF GAAP TO NON-GAAP RESULTS (continued)

       

U.S. dollars in thousands

       
         

(1)

Share-based Compensation

       
 

Quarter ended

 

Year to date

 

September 30,

 

September 30,

 

2022

 

2021

 

2022

 

2021

         

Cost of cloud revenue

 

$

2,319

 

$

2,117

 

$

6,389

 

$

5,287

Cost of services revenue

 

 

2,778

 

 

2,835

 

 

8,264

 

 

6,916

Cost of product revenue

 

 

135

 

 

159

 

 

401

 

 

410

Research and development

 

 

7,424

 

 

7,073

 

 

23,825

 

 

15,241

Sales and marketing

 

 

13,723

 

 

9,707

 

 

43,121

 

 

27,526

General and administrative

 

 

16,505

 

 

19,043

 

 

52,991

 

 

48,511

 

$

42,884

 

$

40,934

 

$

134,991

 

$

103,891

         
         

(2)

Acquisition related expenses

       
         
 

Quarter ended

 

Year to date

 

September 30,

 

September 30,

 

2022

 

2021

 

2022

 

2021

         

Research and development

 

 

-

 

 

-

 

 

-

 

 

-

Sales and marketing

 

 

-

 

 

-

 

 

-

 

 

-

General and administrative

 

 

-

 

 

955

 

 

-

 

 

2,862

 

 

-

 

 

955

 

 

-

 

 

2,862

 

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