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NICE Beats Q3 Earnings Estimates: Will Raised View Aid Shares?
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NICE (NICE - Free Report) reported adjusted earnings of $2.88 per share in third-quarter 2024, beating the Zacks Consensus Estimate by 7.46% and increasing 27% year over year.
Non-GAAP revenues of $690 million surpassed the consensus mark by 1.07% and rose 15% year over year. The uptick was primarily driven by the continued strength of its cloud business and the ongoing expansion of its customer base.
Revenues in the Americas were $587 million, up 17% year over year. The same in EMEA was $69 million in the reported quarter, up 14% year over year. APAC revenues declined 12% year over year to $34 million.
The company’s shares have lost 8.6% year to date against the Zacks Computer & Technology sector’s rise of 29.3%. We believe the raised guidance will help NICE stock to recover.
Cloud revenues (72.5% of revenues) of $500 million missed the Zacks Consensus Estimate by 1.27% but rose 24% year over year.
NICE’s focus on its cloud offerings, particularly its CXone platform, has been a major growth driver.
In the third quarter of 2024, NICE surpassed the $2 billion Annual Recurring Revenue mark for its cloud business, underscoring the strength and scalability of its cloud offering.
NICE’s emphasis on AI-powered customer service automation played a major role in driving growth.
The adoption of AI solutions, particularly the growth in AI-driven customer service capabilities like CXone Copilot and AutoSummary, played a pivotal role.
In the third quarter of 2024, the company reported a six-fold increase in the annual contract value of CXone Copilot, reflecting the growing demand for AI-powered customer service solutions.
Product revenues (5.8% of revenues) of $40 million beat the consensus mark by 45.51% and increased 5.8% year over year.
Service revenues (21.7% of revenues) of $150 million beat the consensus mark by 0.80% but declined 6.5% year over year.
Customer Engagement revenues increased 15% year over year to $578 million.
Financial Crime & Compliance increased 8% year over year to $111 million. The uptick is driven by cloud revenues and strong on-premise product contribution.
NICE Operating Details
On a non-GAAP basis, the gross margin contracted 120 basis points (bps) to 71.1% in the reported quarter. Product margin contracted 130 bps year over year to 84.8%. Services margin plunged 170 bps to 71.9% from the year-ago quarter.
Cloud margin contracted 70 bps year over year to 69.7%.
Research & development expenses, as a percentage of revenues, declined 80 bps year over year to 13.3%. Sales & marketing expenses, as a percentage of revenues, contracted 180 bps year over year to 22.1%.
General & administrative expenses, as a percentage of revenues, increased 40 bps on a year-over-year basis to 10.8%.
On a non-GAAP basis, operating expenses, as a percentage of revenues, contracted 260 bps year over year to 39.1%.
The operating margin expanded 140 bps on a year-over-year basis to 32%.
NICE Balance Sheet & Other Details
As of Sept. 30, NICE had cash and cash equivalents (including short-term investments) of $1.52 billion compared with $1.50 billion as of June 30, 2024.
Long-term debt, as of Sept. 30, was $458.4 million compared with $457.9 million as of June 30, 2024.
The company’s cash flow from operations in the third quarter was $159 million compared with $169.7 million in the second quarter.
In third-quarter 2024, $86.4 million was allocated for the repurchase of shares.
NICE Initiates FY24 Guidance
For 2024, NICE projects non-GAAP revenues between $2,715 million and $2,735 million, indicating 15% year-over-year growth at the midpoint.
Non-GAAP earnings are estimated to be in the band of $10.95-11.5 per share, suggesting 26% year-over-year growth at the midpoint.
Image: Bigstock
NICE Beats Q3 Earnings Estimates: Will Raised View Aid Shares?
NICE (NICE - Free Report) reported adjusted earnings of $2.88 per share in third-quarter 2024, beating the Zacks Consensus Estimate by 7.46% and increasing 27% year over year.
Non-GAAP revenues of $690 million surpassed the consensus mark by 1.07% and rose 15% year over year. The uptick was primarily driven by the continued strength of its cloud business and the ongoing expansion of its customer base.
Revenues in the Americas were $587 million, up 17% year over year. The same in EMEA was $69 million in the reported quarter, up 14% year over year. APAC revenues declined 12% year over year to $34 million.
The company’s shares have lost 8.6% year to date against the Zacks Computer & Technology sector’s rise of 29.3%. We believe the raised guidance will help NICE stock to recover.
Nice Price, Consensus and EPS Surprise
Nice price-consensus-eps-surprise-chart | Nice Quote
NICE Top-Line Details
Cloud revenues (72.5% of revenues) of $500 million missed the Zacks Consensus Estimate by 1.27% but rose 24% year over year.
NICE’s focus on its cloud offerings, particularly its CXone platform, has been a major growth driver.
In the third quarter of 2024, NICE surpassed the $2 billion Annual Recurring Revenue mark for its cloud business, underscoring the strength and scalability of its cloud offering.
NICE’s emphasis on AI-powered customer service automation played a major role in driving growth.
The adoption of AI solutions, particularly the growth in AI-driven customer service capabilities like CXone Copilot and AutoSummary, played a pivotal role.
In the third quarter of 2024, the company reported a six-fold increase in the annual contract value of CXone Copilot, reflecting the growing demand for AI-powered customer service solutions.
Product revenues (5.8% of revenues) of $40 million beat the consensus mark by 45.51% and increased 5.8% year over year.
Service revenues (21.7% of revenues) of $150 million beat the consensus mark by 0.80% but declined 6.5% year over year.
Customer Engagement revenues increased 15% year over year to $578 million.
Financial Crime & Compliance increased 8% year over year to $111 million. The uptick is driven by cloud revenues and strong on-premise product contribution.
NICE Operating Details
On a non-GAAP basis, the gross margin contracted 120 basis points (bps) to 71.1% in the reported quarter. Product margin contracted 130 bps year over year to 84.8%. Services margin plunged 170 bps to 71.9% from the year-ago quarter.
Cloud margin contracted 70 bps year over year to 69.7%.
Research & development expenses, as a percentage of revenues, declined 80 bps year over year to 13.3%. Sales & marketing expenses, as a percentage of revenues, contracted 180 bps year over year to 22.1%.
General & administrative expenses, as a percentage of revenues, increased 40 bps on a year-over-year basis to 10.8%.
On a non-GAAP basis, operating expenses, as a percentage of revenues, contracted 260 bps year over year to 39.1%.
The operating margin expanded 140 bps on a year-over-year basis to 32%.
NICE Balance Sheet & Other Details
As of Sept. 30, NICE had cash and cash equivalents (including short-term investments) of $1.52 billion compared with $1.50 billion as of June 30, 2024.
Long-term debt, as of Sept. 30, was $458.4 million compared with $457.9 million as of June 30, 2024.
The company’s cash flow from operations in the third quarter was $159 million compared with $169.7 million in the second quarter.
In third-quarter 2024, $86.4 million was allocated for the repurchase of shares.
NICE Initiates FY24 Guidance
For 2024, NICE projects non-GAAP revenues between $2,715 million and $2,735 million, indicating 15% year-over-year growth at the midpoint.
Non-GAAP earnings are estimated to be in the band of $10.95-11.5 per share, suggesting 26% year-over-year growth at the midpoint.
NICE Zacks Rank & Stocks to Consider
Currently, NICE has a Zacks Rank #3 (Hold).
Some better-ranked stocks in the broader Zacks Computer & Technology sector are Tuya (TUYA - Free Report) , NVIDIA (NVDA - Free Report) and NetApp (NTAP - Free Report) . While Tuya and NVDA sport a Zacks Rank #1 (Strong Buy), NTAP carries a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
Tuya’s shares have lost 33.1% in the year-to-date period. TUYA is set to report third-quarter 2024 results on Nov. 18.
NVIDIA’s shares have skyrocketed 196.3% year to date. NVDA is set to report third-quarter fiscal 2025 results on Nov. 20.
NetApp’s shares have jumped 33.9% year to date. NTAP is set to report second-quarter fiscal 2025 results on Nov. 21.