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NICE Q4 Earnings Top Estimates, Cloud Revenues Drive Top Line

Nice NICE reported adjusted earnings of $2.36 per share in fourth-quarter 2023, which beat the Zacks Consensus Estimate by 4.42% and increased 16% year over year.

Non-GAAP revenues of $623.2 million trumped the consensus mark by 1.25% and grew 10% year over year.

Revenues in Americas were $524 million, up 10% year over year. Revenues in EMEA were $65 million in the reported quarter, up 2% year over year. APAC revenues increased 11% year over year to $34 million.

Top-Line Details

Cloud revenues (68.8% of revenues) of $429 million missed the Zacks Consensus Estimate by 0.15% but rose 20% year over year.

Nice Price, Consensus and EPS Surprise

 

Nice Price, Consensus and EPS Surprise
Nice Price, Consensus and EPS Surprise

Nice price-consensus-eps-surprise-chart | Nice Quote


Product revenues (5.1%) of $31.8 million beat the consensus mark by 1.38% but declined 34.4% year over year.

Service revenues (26.1%) of $162.4 million beat the consensus mark by 5.13% and rose 0.7% year over year.

Customer Engagement revenues increased 12% year over year to $523 million. Growth is driven by the success of CXone, the customer experience cloud platform, which saw increased adoption of AI and a 32% rise in displacing competitors.

In the fourth quarter, NICE seamlessly integrated CX AI with excellence in quality, accuracy and security on a unified platform at scale, leading to AI-driven digital engagement successes, platformization and a substantial increase in Enlighten bookings.

Financial Crime & Compliance decreased slightly year over year to $101 million.

Operating Details

On a non-GAAP basis, the gross margin contracted 60 basis points (bps) to 71.9% in the reported quarter. Product margin contracted 280 bps to 82.9%. Services margin inched down 130 bps to 72%.

Cloud margin expanded year over year at 60 bps to 71.1%.

Research & development (R&D) expenses, as a percentage of revenues, decreased 140 bps year over year to 13%. Sales & marketing (S&M) expenses, as a percentage of revenues, contracted 130 bps to 24.8%.

General & administrative (G&A) expenses, as a percentage of revenues, declined 20 bps on a year-over-year basis to 10.3%.

On a non-GAAP basis, operating expenses, as a percentage of revenues, dipped 20 bps year over year to 41.9%.

The operating margin expanded 140 bps on a year-over-year basis to 30%.

Balance Sheet & Other Details

As of Dec 31, 2023, NICE had cash and cash equivalents (including short-term investments) were $1.40 billion compared with $1.65 billion as of Sep 30,2023.

Long-term debt, as of Dec 31, 2023, were $457 million compared with $456.6 million as of Sep 30,2023.

The company’s cash flow from operations in the fourth quarter came in at $180.5 million compared with $120.6 million in the third quarter.

In the fourth quarter of 2023, $69 million was allocated for the repurchase of shares.

Guidance

For first-quarter 2024, NICE projects non-GAAP revenues to be between $650 million and $660 million.

Non-GAAP earnings are estimated in the $2.40-2.50 per share band.

Zacks Rank

Currently, NICE has a Zacks Rank #2 (Buy).

NICE shares have gained 23.1% year to date compared with the Zacks Computer & Technology sector’s growth of 4.8%.

Other Stocks to Consider

Agilent Technologies A, ACM Research ACMR and Bandwidth BAND are some other top-ranked stocks that investors can consider in the broader sector.

Each of these three stocks has a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Agilent Technologies shares have declined 5% year to date. A is scheduled to release first-quarter 2024 results on Feb 27.

ACM Research shares have increased 5.3% year to date. ACMR is set to report fourth-quarter 2023 results on Feb 28.

Bandwidth shares have declined 13.4% year to date. BAND is set to report fourth-quarter 2023 results on Feb 28.

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Agilent Technologies, Inc. (A) : Free Stock Analysis Report

ACM Research, Inc. (ACMR) : Free Stock Analysis Report

Nice (NICE) : Free Stock Analysis Report

Bandwidth Inc. (BAND) : Free Stock Analysis Report

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