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NICE Q1 Earnings Beat Estimates on Strong Cloud Revenues, Shares Up
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Key Takeaways
NICE topped Q1 estimates as cloud revenue rose 14.6% and AI ARR grew 66% year over year.
NICE's FCC revenue jumped 23% on strong term renewals with large global financial institutions.
NICE raised FY26 EPS guidance to $10.98-$11.18 while reaffirming full-year revenue outlook.
Nice (NICE - Free Report) reported first-quarter 2026 non-GAAP earnings of $2.64 per share, down 8.0% year over year but beat the Zacks Consensus Estimate by 4.66%.
Revenues grew 9.8% from the year-ago period to $768.6 million and surpassed the consensus mark by 0.99%. The uptick was primarily driven by the continued strength in its cloud business and the ongoing AI momentum.
Revenues in the Americas were $625 million, up 6% year over year. The same in EMEA was $99 million in the reported quarter, up 34% year over year. APAC revenues increased 23% year over year to $44 million.
NICE shares have gained 2.04% in the pre-market trading.
NICE generated cloud revenues of $603.4 million, which represented 79% of total revenue for the quarter. The company’s cloud growth was 14.6%, up year over year, reflecting continued adoption of CXone and expanding AI-driven use cases.
Within the cloud, management highlighted that AI remained a central growth lever. AI ARR was included in 100% of CXone enterprise deals during the quarter, signaling that AI is moving from add-on to standard buying behavior across larger customers. AI & self-service ARR jumped 66% year over year to $345 million, underscoring demand for NICE’s AI-native CX platform.
Nice reported services revenues of $124.0 million (16.1% of revenues), down 11.6% year over year. The decline was due to ongoing migration away from on-premise deployments, which reduces legacy service activity as customers transition to the cloud.
Product revenue rose 22.6% year over year to $41.3 million. Product revenue contributed 5.4% of revenues in the reported quarter. The increase was driven by strength in the financial crime and compliance business, which benefited from premise-based term renewals alongside continued cloud expansion in the segment.
NICE Segment Results Highlight FCC Outperformance
NICE’s Customer Engagement segment delivered revenues of $636 million, up 7% year over year. Growth was fueled by double-digit cloud gains that more than offset reductions in on-premise product and services revenue tied to the legacy base.
Financial Crime and Compliance revenue was $133 million, rising 23% year over year. Management attributed the performance to strong premise-based term renewals with large global financial institutions, reinforcing retention strength in the installed base while cloud offerings continue to scale.
NICE Operating Details
On a non-GAAP basis, gross margin was 68.4% compared with 69.9% a year ago. Management framed the margin pressure as a result of deliberate, time-bound investments to scale global cloud infrastructure and support higher AI workloads.
Research and development expenses, as a percentage of revenues, were flat year over year to 12.7%. Sales and marketing expenses, as a percentage of revenues, fell 100 bps year over year to 24.1%.
General and administrative expenses, as a percentage of revenues, increased 120 bps year over year to 11.1%.
On a non-GAAP basis, operating expenses, as a percentage of revenues, contracted 300 bps year over year to 42.4%.
The non-GAAP operating margin contracted 450 bps on a year-over-year basis to 26%.
The non-GAAP EBITDA margin contracted 450 bps to 29.1%.
NICE Balance Sheet & Cash Flow Statement
As of March 31, 2026, NICE had cash and cash equivalents (including short-term investments) of $304.1 million compared with $417.4 million as of Dec. 31, 2025.
In the reported quarter, there was no outstanding debt.
Operating cash flow was $179.2 million in the reported quarter, while free cash flow totaled $148.8 million.
The company also repurchased $253.3 million of shares in the quarter, reflecting an ongoing commitment to return capital alongside investment in growth initiatives.
NICE Initiates 2Q26 and FY26 Guidance
For the second quarter of 2026, Nice expects non-GAAP revenues in the range of $761 million to $771 million and non-GAAP earnings of $2.60 to $2.70 per share.
For 2026, NICE reiterated non-GAAP revenue guidance of $3.170 billion to $3.190 billion, and raised non-GAAP EPS guidance to $10.98-$11.18. Management also reiterated that cloud revenue growth is expected to be within the 13%-15% range for 2026, with some near-term variability tied to renewal-related commercial actions that are designed to secure longer-term AI commitments.
NICE’s Zacks Rank & Stocks to Consider
Nice currently carries a Zacks Rank #5 (Strong Sell).
Shares of Analog Devices have gained 53.3% in the year-to-date period. Analog Devices is set to report the second quarter of fiscal 2026 results on May 20.
Applied Materials shares have gained 66.8% in the year-to-date period. Applied Materials is scheduled to report its second-quarter 2026 results on May 14.
Audioeye shares have lost 23.3% in the year-to-date period. Audioeye is set to report its first-quarter 2026 results on May 13.
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NICE Q1 Earnings Beat Estimates on Strong Cloud Revenues, Shares Up
Key Takeaways
Nice (NICE - Free Report) reported first-quarter 2026 non-GAAP earnings of $2.64 per share, down 8.0% year over year but beat the Zacks Consensus Estimate by 4.66%.
Revenues grew 9.8% from the year-ago period to $768.6 million and surpassed the consensus mark by 0.99%. The uptick was primarily driven by the continued strength in its cloud business and the ongoing AI momentum.
Revenues in the Americas were $625 million, up 6% year over year. The same in EMEA was $99 million in the reported quarter, up 34% year over year. APAC revenues increased 23% year over year to $44 million.
NICE shares have gained 2.04% in the pre-market trading.
Nice Price, Consensus and EPS Surprise
Nice price-consensus-eps-surprise-chart | Nice Quote
NICE’s Top-Line Details
NICE generated cloud revenues of $603.4 million, which represented 79% of total revenue for the quarter. The company’s cloud growth was 14.6%, up year over year, reflecting continued adoption of CXone and expanding AI-driven use cases.
Within the cloud, management highlighted that AI remained a central growth lever. AI ARR was included in 100% of CXone enterprise deals during the quarter, signaling that AI is moving from add-on to standard buying behavior across larger customers. AI & self-service ARR jumped 66% year over year to $345 million, underscoring demand for NICE’s AI-native CX platform.
Nice reported services revenues of $124.0 million (16.1% of revenues), down 11.6% year over year. The decline was due to ongoing migration away from on-premise deployments, which reduces legacy service activity as customers transition to the cloud.
Product revenue rose 22.6% year over year to $41.3 million. Product revenue contributed 5.4% of revenues in the reported quarter. The increase was driven by strength in the financial crime and compliance business, which benefited from premise-based term renewals alongside continued cloud expansion in the segment.
NICE Segment Results Highlight FCC Outperformance
NICE’s Customer Engagement segment delivered revenues of $636 million, up 7% year over year. Growth was fueled by double-digit cloud gains that more than offset reductions in on-premise product and services revenue tied to the legacy base.
Financial Crime and Compliance revenue was $133 million, rising 23% year over year. Management attributed the performance to strong premise-based term renewals with large global financial institutions, reinforcing retention strength in the installed base while cloud offerings continue to scale.
NICE Operating Details
On a non-GAAP basis, gross margin was 68.4% compared with 69.9% a year ago. Management framed the margin pressure as a result of deliberate, time-bound investments to scale global cloud infrastructure and support higher AI workloads.
Research and development expenses, as a percentage of revenues, were flat year over year to 12.7%. Sales and marketing expenses, as a percentage of revenues, fell 100 bps year over year to 24.1%.
General and administrative expenses, as a percentage of revenues, increased 120 bps year over year to 11.1%.
On a non-GAAP basis, operating expenses, as a percentage of revenues, contracted 300 bps year over year to 42.4%.
The non-GAAP operating margin contracted 450 bps on a year-over-year basis to 26%.
The non-GAAP EBITDA margin contracted 450 bps to 29.1%.
NICE Balance Sheet & Cash Flow Statement
As of March 31, 2026, NICE had cash and cash equivalents (including short-term investments) of $304.1 million compared with $417.4 million as of Dec. 31, 2025.
In the reported quarter, there was no outstanding debt.
Operating cash flow was $179.2 million in the reported quarter, while free cash flow totaled $148.8 million.
The company also repurchased $253.3 million of shares in the quarter, reflecting an ongoing commitment to return capital alongside investment in growth initiatives.
NICE Initiates 2Q26 and FY26 Guidance
For the second quarter of 2026, Nice expects non-GAAP revenues in the range of $761 million to $771 million and non-GAAP earnings of $2.60 to $2.70 per share.
For 2026, NICE reiterated non-GAAP revenue guidance of $3.170 billion to $3.190 billion, and raised non-GAAP EPS guidance to $10.98-$11.18. Management also reiterated that cloud revenue growth is expected to be within the 13%-15% range for 2026, with some near-term variability tied to renewal-related commercial actions that are designed to secure longer-term AI commitments.
NICE’s Zacks Rank & Stocks to Consider
Nice currently carries a Zacks Rank #5 (Strong Sell).
Some better-ranked stocks in the broader Zacks Computer and Technology sector include Analog Devices (ADI - Free Report) , Applied Materials (AMAT - Free Report) and Audioeye (AEYE - Free Report) . Each stock currently carries a Zacks Rank of 2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Shares of Analog Devices have gained 53.3% in the year-to-date period. Analog Devices is set to report the second quarter of fiscal 2026 results on May 20.
Applied Materials shares have gained 66.8% in the year-to-date period. Applied Materials is scheduled to report its second-quarter 2026 results on May 14.
Audioeye shares have lost 23.3% in the year-to-date period. Audioeye is set to report its first-quarter 2026 results on May 13.