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NICE Q2 Earnings Beat, Revenues Rise Y/Y on Cloud Strength
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NICE’s (NICE - Free Report) second-quarter 2020 adjusted earnings of $1.37 per share beat the Zacks Consensus Estimate by 4.6% and also increased 9.6% year over year.
Further, non-GAAP revenues of $395.1 million trumped the consensus mark by 0.6% as well as improved 3.6% year over year.
Recurring revenues as percentage of revenues were 80% compared with 72% in the year-ago quarter.
Americans revenues (80.4% of revenues) were $317 million, up 3% year over year. Moreover, revenues in EMEA (11.3% of revenues) were $45 million in the reported quarter, down 8%. APAC revenues (8.3% of revenues) increased 28% year over year to $33 million.
Cloud revenues (46.8% of revenues) rose 29.6% year over year to $183.9 million.
Services revenues declined 3.1% from the year-ago quarter to $171 million. Moreover, products revenues plunged 38.3% from the year-ago quarter to $38.3 million.
Customer-engagement revenues were $323 million, up 3% year over year and represented 82% of total revenues.
Financial crime and compliance revenues increased 6% to $72 million, representing 18% of total revenues.
NICE inked a number of partnerships in the reported quarter with the likes of Orange Business Services, ConvergeOne, salesforce.com, Zendesk, RingCentral, Zoom and Microsoft.
Operating Details
Gross margin expanded 20 basis points (bps) year over year to 71.4% in the reported quarter, driven by higher cloud gross margin, which jumped 430 bps to 65.7%.
Research & development (R&D) expenses increased 15.7% year over year to $53.8 million. As a percentage of revenues, R&D expenses were up 150 bps year over year to 13.7%.
Sales & marketing (S&M) expenses were $97.5 million, up2.8% year over year. As a percentage of revenues, S&M expenses decreased 10 bps to 24.8%.
General & administrative (G&A) expenses decreased 8.2% year over year to $40.4 million. As a percentage of revenues, G&A decreased 130 bps on a year-over-year basis to 10.3%.
Operating margin expanded 20 bps on a year-over-year basis to 14.3%.
Balance Sheet & Other Details
As of Jun 30, 2020, NICE had cash and cash equivalents (including short & long-term investments) worth $1.10 billion compared with $1.04 billion as of Mar 31, 2020.
Total debt as of Jun 30, 2020 was $214 million compared with $467.2 million as of Mar 31, 2020.
The company’s quarterly cash flow came in at $59.6 million compared with $154.8 million in the previous quarter and $18 million in the year-ago quarter.
Guidance
For third-quarter 2020, revenues are expected between $403 million and $413 million. Non-GAAP earnings are expected between $1.33 and $1.43 per share.
NICE expects 2020 annual run rate of more than $800 million in cloud revenues. Moreover, for 2021, the company expects to surpass annual run rate of more than $1 billion in cloud revenues.
ANGI Homeservices, Agilent and Analog Devices are set to report their quarterly results on Aug 10, 18 and 19, respectively.
The Hottest Tech Mega-Trend of All
Last year, it generated $24 billion in global revenues. By 2020, it's predicted to blast through the roof to $77.6 billion. Famed investor Mark Cuban says it will produce "the world's first trillionaires," but that should still leave plenty of money for regular investors who make the right trades early.
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NICE Q2 Earnings Beat, Revenues Rise Y/Y on Cloud Strength
NICE’s (NICE - Free Report) second-quarter 2020 adjusted earnings of $1.37 per share beat the Zacks Consensus Estimate by 4.6% and also increased 9.6% year over year.
Further, non-GAAP revenues of $395.1 million trumped the consensus mark by 0.6% as well as improved 3.6% year over year.
Recurring revenues as percentage of revenues were 80% compared with 72% in the year-ago quarter.
Americans revenues (80.4% of revenues) were $317 million, up 3% year over year. Moreover, revenues in EMEA (11.3% of revenues) were $45 million in the reported quarter, down 8%. APAC revenues (8.3% of revenues) increased 28% year over year to $33 million.
Nice Ltd. Price, Consensus and EPS Surprise
Nice Ltd. price-consensus-eps-surprise-chart | Nice Ltd. Quote
Top-Line Details
Cloud revenues (46.8% of revenues) rose 29.6% year over year to $183.9 million.
Services revenues declined 3.1% from the year-ago quarter to $171 million. Moreover, products revenues plunged 38.3% from the year-ago quarter to $38.3 million.
Customer-engagement revenues were $323 million, up 3% year over year and represented 82% of total revenues.
Financial crime and compliance revenues increased 6% to $72 million, representing 18% of total revenues.
NICE inked a number of partnerships in the reported quarter with the likes of Orange Business Services, ConvergeOne, salesforce.com, Zendesk, RingCentral, Zoom and Microsoft.
Operating Details
Gross margin expanded 20 basis points (bps) year over year to 71.4% in the reported quarter, driven by higher cloud gross margin, which jumped 430 bps to 65.7%.
Research & development (R&D) expenses increased 15.7% year over year to $53.8 million. As a percentage of revenues, R&D expenses were up 150 bps year over year to 13.7%.
Sales & marketing (S&M) expenses were $97.5 million, up2.8% year over year. As a percentage of revenues, S&M expenses decreased 10 bps to 24.8%.
General & administrative (G&A) expenses decreased 8.2% year over year to $40.4 million. As a percentage of revenues, G&A decreased 130 bps on a year-over-year basis to 10.3%.
Operating margin expanded 20 bps on a year-over-year basis to 14.3%.
Balance Sheet & Other Details
As of Jun 30, 2020, NICE had cash and cash equivalents (including short & long-term investments) worth $1.10 billion compared with $1.04 billion as of Mar 31, 2020.
Total debt as of Jun 30, 2020 was $214 million compared with $467.2 million as of Mar 31, 2020.
The company’s quarterly cash flow came in at $59.6 million compared with $154.8 million in the previous quarter and $18 million in the year-ago quarter.
Guidance
For third-quarter 2020, revenues are expected between $403 million and $413 million. Non-GAAP earnings are expected between $1.33 and $1.43 per share.
NICE expects 2020 annual run rate of more than $800 million in cloud revenues. Moreover, for 2021, the company expects to surpass annual run rate of more than $1 billion in cloud revenues.
Zacks Rank & Stocks to Consider
NICE currently has a Zacks Rank #3 (Hold). Some better-ranked stocks in the broader technology sector are ANGI Homeservices (ANGI - Free Report) , Agilent (A - Free Report) and Analog Devices (ADI - Free Report) . All three stocks carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
ANGI Homeservices, Agilent and Analog Devices are set to report their quarterly results on Aug 10, 18 and 19, respectively.
The Hottest Tech Mega-Trend of All
Last year, it generated $24 billion in global revenues. By 2020, it's predicted to blast through the roof to $77.6 billion. Famed investor Mark Cuban says it will produce "the world's first trillionaires," but that should still leave plenty of money for regular investors who make the right trades early.
See Zacks' 3 Best Stocks to Play This Trend >>