NICE Ltd

Welcome to the NICE conference call discussing fourth quarter 2024 results and thank you all for holding. All participants are at present in a listen-only mode. Following management's formal presentation, instructions will be given for the Q&A answer session. As a reminder, this conference is being recorded February the 20th, 2025. I would now like to turn this call over to Mr. Marty Cohen, Vice President, Investor Relations at NICE. Please go ahead.

Thank you, operator. With me on the call today are Scott Russell, Chief Executive Officer, and Beth Gatsbitch, Chief Financial Officer. Before we start, I'd like to point out that some of the statements made on this call will constitute forward-looking statements. In accordance with the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, Please be advised that the company's actual results could differ materially from these forward-looking statements. The different information regarding the factors that could cause actual results or performance of the company to differ materially is contained in the section entitled risk factors. In item three of the company's 2023 annual report on form 20F, as filed with the Securities and Exchange Commission on March 27, 2024. During today's call, we will present a more detailed discussion of fourth quarter and full year 2024 results. and the company's guidance for the first quarter and full year 2025. You can find our press release as well as PDFs of our financial results on NICE's investor relations website. Following our comments, there will be an opportunity for questions. Let me remind you that unless otherwise noted on this call, we will be commenting on our adjusted results of operations, which differ in certain respects from generally accepted accounting principles as reflected mainly in accounting for share-based compensation, amortization of acquired intangible assets, acquisition related and other expenses, amortization of discount on debt and loss from extinguishment of debt, and the tax effect of the non-GAAP adjustments. The differences between the non-GAAP adjusted results and the equivalent GAAP figures are detailed in today's press release. The information and some of our comments discussed on this call may contain forward-looking statements that are subject to risks, uncertainties, and assumptions.

I will now turn the call over to Scott. Thank you, Marty, and welcome, everyone. I'm excited to be talking to you today for the first time as CEO of NICE. Before we dive into today's call, I want to take a moment to acknowledge Bharat's strong leadership that brought NICE to where it is today. It is an honor to lead a company renowned for its relentless innovation, customer centricity, and operational excellence. I join NICE for its undisputed leadership. and for its immense potential for growth. With a strong financial foundation, industry-leading solutions, and 9,000-plus dedicated Nices all around the world, we are poised to drive Nice into the next era of growth. On today's call, I want to focus on two key themes. First, Nice is the undisputed AI leader in customer service. We continue to redefine what's possible with the most advanced and comprehensive AI platform in the industry, purpose-built for speed, agility, and scale. I've spoken to a number of customers and partners already, and their feedback is unanimous. Enterprises turn to NICE because they trust that our AI platform, CX1 Empower, delivers real, measurable outcomes. We're improving customer experiences for hundreds of millions of people worldwide managing over 3.5 billion AI interactions annually while driving tangible value for our clients. Simply put, we are leading this market and we are doing so decisively. Second, the opportunity ahead is extraordinary. Agentic AI is reshaping industries at an unprecedented pace and with CS1 Empower, we are already ahead of this tectonic shift. Our AI-powered agentic automation is setting the new standard, combining cutting-edge technology with our deep CX domain expertise, especially in the large enterprise market. Our financial strength, our relentless innovation, and international expansion uniquely positions us to capitalize on the opportunity ahead and accelerate into the future. Let me build upon my first point of undisputed leadership, which is exemplified by our outstanding fourth quarter and finish to the year. For the full year 2024, we exceeded the high end of our revenue guidance and came in at the high end of the range for EPS. For Q4, our cloud revenue grew 24% to $534 million, which is the highest cloud growth on the largest cloud revenue base in our industry. Moreover, quarter-to-quarter cloud growth from Q3 to Q4 accelerated to 6.8%. This excellent cloud revenue growth drove a healthy year-over-year increase in total revenue and reflects our strength at the high end of the market as we reached a milestone of over 400 enterprise cloud customers with over $1 million in ARR. Our leadership also flows to the bottom line. our exceptional profitability continues to set us apart from the rest of the industry. Nice as outstanding profitability metrics speak for themselves. Operating income increased by 22% to $227 million, driving further expansion in our operating margin by 150 basis points to 31.5%. This in turn fueled an impressive 28% surge in EPS compared to the same quarter last year. reaching $3.02 for Q4. We delivered stellar cash flow, generating $250 million in operating cash flow in Q4, bringing our total to $833 million for 2024, a remarkable nearly 50% over the prior year, further extending our strong track record of accelerating cash flow year after year. These exceptional results reinforce our position as the industry leader. I'd like to elaborate further on our AI leadership. CX1 Empower is revolutionizing the way AI powers customer service. It is the only platform in the market that delights the consumer experience with speed and accuracy from intent to fulfillment. It does this through seamless orchestration of all voice, digital and AI interactions. CX1 Empower boosts productivity of both human and AI agents with a smart workforce augmentation. At the heart of CX1 Empower is agentic AI, acting with autonomy by continually learning and making intelligent decisions to enhance customer interactions in real time. CX1 Empower is a game changer in meeting customer needs at scale, encompassing the largest repository of CF-labeled data, knowledge, and thousands of AI models in one platform. CX1 Empower is setting a new industry standard. We are undeniably winning in the era of agentic AI. We go beyond the slideware. We are delivering real results. In 2024, our advanced AI solutions were included in 97% of our large enterprise CX1 Empower deals over $1 million ARR. In one such seven-digit ACV deal, one of the largest retailers in the world, who are already relying on NICE to handle 75 million interactions annually, they chose CX1 Empower to differentiate through advanced AI capabilities, supporting their immediate and growing consumer needs. A very large university in a seven-digit ACV deal is going all in on AI with NICE after a diligent competitive process. They chose CX1 Empower, including autopilot and copilot, to significantly improve their student experience and expect a 30% ROI. In another seven-digit ACV deal, a large managed care organisation decided to modernise and simplify their multi-vendor tech stack. and advanced CXAI capabilities to enhance their customer service. After being presented with generic AI from their CRM incumbent, they quickly realized that the only path forward was CX1 Empower, which signed a seven-digit ACV deal with one of the nation's leading university medical centers. Driven by a strong commitment to maximize ROI from the CX operations and elevate the patient experience, they chose CX1 Empower to consolidate onto a single AI platform. These are just a few examples of enterprises repeatedly choosing NICE because of CX1 Empower's ability to scale at unmatched levels, deliver proven AI innovation, eliminate complexity of fragmented multi-vendor solutions, and provide seamless consumer experience across all channels. Other examples include seven-digit ACV deals with a large furniture retailer, a well-known US regional bank, and a leading healthcare outsourcer. I opened today's call discussing our proven leadership in AI and the immense growth opportunity in front of us. As I look to the future, the opportunity is clear, and let me explain why. Firstly, our market is growing. According to Gartner, by 2028, 33% of enterprise software applications will include agentic AI, up from less than 1% in 2024. This bodes very well for NICE, since one of the most impactful use cases for agentic AI is in customer service, where it's revolutionizing interactions and efficiency. We are at the forefront of this industry-wide transformation, uniquely positioned to drive and benefit from this shift. With our cutting edge platform and seamless integration of both human and AI collaboration, we are setting the standard for the future of customer experience. Secondly, alongside the tremendous market opportunity, Synice's unique strengths position us for unparalleled success. With our CX specialized AI, our industry leading platforms, and unwavering financial strength. We have all the assets needed to drive both organic and inorganic growth. Our proven profitability and rock solid balance sheet gives us the confidence to be bold, move fast, disrupt the status quo and think bigger than ever before. Now is the time to seize the moment and lead the future of CX with innovation and ambition. To capitalize on this market opportunity and leverage our strengths, we will unleash our market leadership by putting CX1 Empower in front of every organization possible to expand our market lead and set the benchmark for excellence. We will lead the CX AI revolution. Agentic AI is our superpower, and we are embedding it in everything that we do. maximizing our innovation edge and reinforcing our position as the undisputed leader in AI-driven solutions. We will scale with a powerful ecosystem by aggressively expanding our strategic partnerships from technology partners to global systems integrators, turning collaboration into a force multiplier that accelerates growth and amplifies our impact worldwide. Finally, speed and precision matters. As you can see, we have the industry leadership, the AI assets and amazing market opportunity to capitalize on. We will move even faster with laser focus to win and invest for growth in 2025. The energy across NICE is undeniable and we are all dedicated to driving our vision forward. We are finalizing our updated growth plan and I'm looking forward to sharing more details with you in the near future. After 50 days as CEO, I'm even more excited about our potential and the journey ahead. I will now turn the call over to Beth.