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NICE Q2 Earnings Top Estimates, Cloud Revenues Drive Top Line
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NICE’s (NICE - Free Report) second-quarter 2023 adjusted earnings of $2.13 per share beat the Zacks Consensus Estimate by 3.4% and increased 15% year over year.
Non-GAAP revenues of $581.1 million trumped the consensus mark by 0.47% and grew 9.5% year over year.
Revenues in Americas were $485 million, up 9% year over year. Revenues in EMEA were $60 million in the reported quarter, up 14%. APAC revenues increased 7% year over year to $36 million.
Top-Line Details
Cloud revenues (65.7% of revenues) of $381.9 million missed the Zacks Consensus Estimate by 0.82% but rose 22.7% year over year.
Product revenues (6.9% of revenues) of $40.2 million beat the consensus mark by 16.57% but declined 23.3% from the year-ago quarter’s levels.
Service revenues (27.4% of revenues) of $158.9 million beat the consensus mark by 0.1% but dropped 4.7% from the year-ago quarter’s figure.
Customer Engagement revenues increased 12% year over year to $481 million. The metric beat the consensus mark by 0.19%.
Financial Crime & Compliance dropped 2% year over year to $100 million. The metric beat the consensus mark by 1.65%.
On a non-GAAP basis, gross margin contracted 170 bps to 71.6% in the reported quarter. Product margin contracted 660 basis points (bps) to 81.8% in the reported quarter. Services margin inched down 230 bps to 72.2%.
Cloud margin expanded 20 bps year over year to 70.3%.
Research & development (R&D) expenses, as a percentage of revenues, contracted 30 bps year over year to 13.5%. Sales & marketing (S&M) expenses, as a percentage of revenues, declined 220 bps to 26.2%.
General & administrative (G&A) expenses, as a percentage of revenues, declined 120 bps on a year-over-year basis to 9.5%.
On a non-GAAP basis, operating expenses, as a percentage of revenues, decreased 180 bps year over year to 42.4%.
The operating margin expanded 20 bps on a year-over-year basis to 29.2%.
Balance Sheet & Other Details
As of Jun 30, 2023, NICE had cash and cash equivalents (including short-term investments) worth $1.66 billion.
Long-term debt, as of Jun 30, 2023, was $456.2 million.
The company’s cash flow from operations in the second quarter came in at $65.3 million.
Guidance
For third-quarter 2023, NICE projects non-GAAP revenues between $590 million and $600 million. Non-GAAP earnings are estimated in the $2.1-2.2 per share band.
For full-year 2023, non-GAAP revenues are expected between $2.35 billion and $2.37 billion. Non-GAAP earnings are anticipated to be between $8.4 and $8.6 per share.
Zacks Rank & Key Picks
NICE currently carries a Zacks Rank #3 (Hold).
NICE’s shares have gained 1.5% compared with the Zacks Computer and Technology sector’s rise of 33.7% in the year-to-date period.
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NICE Q2 Earnings Top Estimates, Cloud Revenues Drive Top Line
NICE’s (NICE - Free Report) second-quarter 2023 adjusted earnings of $2.13 per share beat the Zacks Consensus Estimate by 3.4% and increased 15% year over year.
Non-GAAP revenues of $581.1 million trumped the consensus mark by 0.47% and grew 9.5% year over year.
Revenues in Americas were $485 million, up 9% year over year. Revenues in EMEA were $60 million in the reported quarter, up 14%. APAC revenues increased 7% year over year to $36 million.
Top-Line Details
Cloud revenues (65.7% of revenues) of $381.9 million missed the Zacks Consensus Estimate by 0.82% but rose 22.7% year over year.
Nice Price, Consensus and EPS Surprise
Nice price-consensus-eps-surprise-chart | Nice Quote
Product revenues (6.9% of revenues) of $40.2 million beat the consensus mark by 16.57% but declined 23.3% from the year-ago quarter’s levels.
Service revenues (27.4% of revenues) of $158.9 million beat the consensus mark by 0.1% but dropped 4.7% from the year-ago quarter’s figure.
Customer Engagement revenues increased 12% year over year to $481 million. The metric beat the consensus mark by 0.19%.
Financial Crime & Compliance dropped 2% year over year to $100 million. The metric beat the consensus mark by 1.65%.
On a non-GAAP basis, gross margin contracted 170 bps to 71.6% in the reported quarter. Product margin contracted 660 basis points (bps) to 81.8% in the reported quarter. Services margin inched down 230 bps to 72.2%.
Cloud margin expanded 20 bps year over year to 70.3%.
Research & development (R&D) expenses, as a percentage of revenues, contracted 30 bps year over year to 13.5%. Sales & marketing (S&M) expenses, as a percentage of revenues, declined 220 bps to 26.2%.
General & administrative (G&A) expenses, as a percentage of revenues, declined 120 bps on a year-over-year basis to 9.5%.
On a non-GAAP basis, operating expenses, as a percentage of revenues, decreased 180 bps year over year to 42.4%.
The operating margin expanded 20 bps on a year-over-year basis to 29.2%.
Balance Sheet & Other Details
As of Jun 30, 2023, NICE had cash and cash equivalents (including short-term investments) worth $1.66 billion.
Long-term debt, as of Jun 30, 2023, was $456.2 million.
The company’s cash flow from operations in the second quarter came in at $65.3 million.
Guidance
For third-quarter 2023, NICE projects non-GAAP revenues between $590 million and $600 million. Non-GAAP earnings are estimated in the $2.1-2.2 per share band.
For full-year 2023, non-GAAP revenues are expected between $2.35 billion and $2.37 billion. Non-GAAP earnings are anticipated to be between $8.4 and $8.6 per share.
Zacks Rank & Key Picks
NICE currently carries a Zacks Rank #3 (Hold).
NICE’s shares have gained 1.5% compared with the Zacks Computer and Technology sector’s rise of 33.7% in the year-to-date period.
Better-ranked stocks in the broader Zacks Computer and Technology sector are NVIDIA (NVDA - Free Report) , Workday (WDAY - Free Report) and Hewlett Packard (HPE - Free Report) . NVIDIA and Workday sport a Zacks Rank #1 (Strong Buy), while Hewlett Packard carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
NVIDIA shares have outperformed the sector year to date, increasing 196.5%. NVDA is set to report second-quarter 2023 results on Aug 23.
Workday’s shares have outperformed the sector year to date, gaining 33.9%. WDAY is set to report its second-quarter fiscal 2024 results on Aug 24.
Hewlett Packard shares have underperformed sector year to date, surging 6.3%. HPE is set to report third-quarter fiscal 2023 results on Aug 29.