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NICE Q2 Earnings Top Estimates, Cloud Revenues Drive Top Line
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NICE (NICE - Free Report) reported adjusted earnings of $2.64 per share in second-quarter 2024, beating the Zacks Consensus Estimate by 2.33% and increasing 24% year over year.
Non-GAAP revenues of $664 million trumped the consensus mark by 0.23% and rose 14% 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 Americas were $562 million, up 16% year over year. The same in EMEA was $70 million in the reported quarter, up 16% year over year. APAC revenues declined 9% year over year to $33 million.
Top-Line Details
Cloud revenues (72.5% of revenues) of $482 million missed the Zacks Consensus Estimate by 0.59% but rose 26% year over year.
NICE’s focus on its cloud offerings, particularly its CXone platform, has been a major growth driver.
Product revenues (5.3% of revenues) of $35.1 million beat the consensus mark by 29.1% but declined 12.7% year over year.
Service revenues (22.2% of revenues) of $148 million missed the consensus mark by 2.34% and declined 7.1% year over year.
NICE experienced a 38% surge in AI revenues in the second quarter of 2024. The demand for AI solutions is thriving, with significant growth in bookings for their AI-powered tools like Autopilot and Copilot, which registered a 134% increase in the said quarter.
Customer Engagement revenues increased 15% year over year to $556 million.
Financial Crime & Compliance increased 9% year over year to $109 million. The uptick in cloud revenues and strong on-premise product contribution drove the uptick.
Operating Details
On a non-GAAP basis, the gross margin contracted 100 basis points (bps) to 70.7% in the reported quarter. Product margin contracted 240 bps to 89.4%. Services margin plunged 200 bps to 70.2%.
Cloud margin contracted year over year at 10 bps to 69.8%.
Research & development (R&D) expenses, as a percentage of revenues, declined 50 bps year over year to 13%. Sales & marketing (S&M) expenses, as a percentage of revenues, contracted 240 bps to 23.7%.
General & administrative (G&A) expenses, as a percentage of revenues, increased 50 bps on a year-over-year basis to 10%.
On a non-GAAP basis, operating expenses, as a percentage of revenues, contracted 220 bps year over year to 40.3%.
The operating margin expanded 120 bps on a year-over-year basis to 30.4%.
Balance Sheet & Other Details
As of Jun 30, 2024, NICE had cash and cash equivalents (including short-term investments) were $1.503 billion compared with $1.502 billion as of Mar 31, 2024.
Long-term debt, as of Jun 30, 2024, was $457.9 million compared with $457.5 million as of Mar 31, 2024.
The company’s cash flow from operations in the second quarter came in at $169.7 million compared with $254.5 million in the first quarter.
In second-quarter 2024, $146.1 million was allocated for the repurchase of shares.
Guidance
For third-quarter 2024, NICE projects non-GAAP revenues to be between $676 million and $686 million, calling for 13% year-over-year growth at the midpoint.
Non-GAAP earnings are estimated in the $2.62-2.72 per share band, suggesting 18% year-over-year growth at the midpoint.
Zacks Rank & Stocks to Consider
Currently, Nice has a Zacks Rank #4 (Sell).
The company’s shares have dropped 12.6% year to date against the Zacks Computer & Technology sector’s rise of 18%.
Here are some top-ranked stocks worth considering in the broader sector.
Image: Bigstock
NICE Q2 Earnings Top Estimates, Cloud Revenues Drive Top Line
NICE (NICE - Free Report) reported adjusted earnings of $2.64 per share in second-quarter 2024, beating the Zacks Consensus Estimate by 2.33% and increasing 24% year over year.
Non-GAAP revenues of $664 million trumped the consensus mark by 0.23% and rose 14% 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 Americas were $562 million, up 16% year over year. The same in EMEA was $70 million in the reported quarter, up 16% year over year. APAC revenues declined 9% year over year to $33 million.
Top-Line Details
Cloud revenues (72.5% of revenues) of $482 million missed the Zacks Consensus Estimate by 0.59% but rose 26% year over year.
Nice Price, Consensus and EPS Surprise
Nice price-consensus-eps-surprise-chart | Nice Quote
NICE’s focus on its cloud offerings, particularly its CXone platform, has been a major growth driver.
Product revenues (5.3% of revenues) of $35.1 million beat the consensus mark by 29.1% but declined 12.7% year over year.
Service revenues (22.2% of revenues) of $148 million missed the consensus mark by 2.34% and declined 7.1% year over year.
NICE experienced a 38% surge in AI revenues in the second quarter of 2024. The demand for AI solutions is thriving, with significant growth in bookings for their AI-powered tools like Autopilot and Copilot, which registered a 134% increase in the said quarter.
Customer Engagement revenues increased 15% year over year to $556 million.
Financial Crime & Compliance increased 9% year over year to $109 million. The uptick in cloud revenues and strong on-premise product contribution drove the uptick.
Operating Details
On a non-GAAP basis, the gross margin contracted 100 basis points (bps) to 70.7% in the reported quarter. Product margin contracted 240 bps to 89.4%. Services margin plunged 200 bps to 70.2%.
Cloud margin contracted year over year at 10 bps to 69.8%.
Research & development (R&D) expenses, as a percentage of revenues, declined 50 bps year over year to 13%. Sales & marketing (S&M) expenses, as a percentage of revenues, contracted 240 bps to 23.7%.
General & administrative (G&A) expenses, as a percentage of revenues, increased 50 bps on a year-over-year basis to 10%.
On a non-GAAP basis, operating expenses, as a percentage of revenues, contracted 220 bps year over year to 40.3%.
The operating margin expanded 120 bps on a year-over-year basis to 30.4%.
Balance Sheet & Other Details
As of Jun 30, 2024, NICE had cash and cash equivalents (including short-term investments) were $1.503 billion compared with $1.502 billion as of Mar 31, 2024.
Long-term debt, as of Jun 30, 2024, was $457.9 million compared with $457.5 million as of Mar 31, 2024.
The company’s cash flow from operations in the second quarter came in at $169.7 million compared with $254.5 million in the first quarter.
In second-quarter 2024, $146.1 million was allocated for the repurchase of shares.
Guidance
For third-quarter 2024, NICE projects non-GAAP revenues to be between $676 million and $686 million, calling for 13% year-over-year growth at the midpoint.
Non-GAAP earnings are estimated in the $2.62-2.72 per share band, suggesting 18% year-over-year growth at the midpoint.
Zacks Rank & Stocks to Consider
Currently, Nice has a Zacks Rank #4 (Sell).
The company’s shares have dropped 12.6% year to date against the Zacks Computer & Technology sector’s rise of 18%.
Here are some top-ranked stocks worth considering in the broader sector.
ADOBE (ADBE - Free Report) , NetApp (NTAP - Free Report) and Bilibili (BILI - Free Report) are some other top-ranked stocks that investors can consider in the broader sector.
All three stocks carry a Zacks Rank #2. You can see the complete list of today’s Zacks #1 (Strong Buy) Rank stocks here.
Adobe’s shares have declined 7.1% year to date. ADBE is scheduled to release third-quarter fiscal 2024 results on Sep 12.
NetApp’s shares have surged 49.1% year to date. NTAP is scheduled to release first-quarter fiscal 2025 results on Aug 28.
Bilibili’s shares have increased 10.1% year to date. BILI is set to report second-quarter 2024 results on Aug 22.