NICE Ltd

Welcome to the NICE conference call discussing first quarter 2025 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 question and answer session. As a reminder, this conference is being recorded May 15, 2025. I would now like to turn this call over to Mr. Marty Cohen, VP of Investor Relations at NICE. Please go ahead.

Thank you, operator. With me on the call today are Scott Russell, Chief Executive Officer, and Beth Gaspich, 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. Additional 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 3 of the Company's 2024 Annual Report on Form 20-F, as filed with the Securities and Exchange Commission on March 19, 2025. During today's call, we will present the more detailed discussion of first quarter 2025 results and the company's guidance for the second 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 the generally accepted accounting principles. as reflected mainly in accounting for share-based compensation, amortization of acquired intangibles, acquisition-related and other expenses, amortization of discount on debt, and the tax effect of the non-GAAP's 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. Before I turn over to Scott, I'd like to remind you that we're hosting our Investor Day on June 17th in conjunction with our Interactions User Conference in Las Vegas. The program for analysts and investors will include presentations from NICE executives and access to the Innovations Hall where you'll see plenty of demos. If you haven't received the registration email, please email us at ir.nice.com. I'll now turn it over to Scott.

Thank you Marty and welcome everyone. Over the past four months since joining NICE, I've had the opportunity to meet many of our stakeholders, customers, shareholders and employees. These conversations have further elevated my confidence and excitement about our future. That confidence is demonstrated by our strong start to the year. In the first quarter, we delivered total revenue of $700 million, underscoring the strength of our business. Cloud revenue rose 12% year-on-year to $527 million, led by the continued adoption of CX1 Empower, the industry's premier AI platform that's transforming customer experience at scale. We also extended our leadership in profitability. Operating margin expanded by 20 basis points to 30.5%, reflecting our disciplined execution and ongoing focus of operational efficiency. This translated into strong bottom line results with earnings per share reaching $2.87, the high end of our guidance range and 11% over the prior year. Our cash generation remains a core strength with operating cash flow up 12% year over year to $285 million. This robust profitability and cash flow not only differentiate us competitively, but also positions us to strategically reinvest in innovation and long-term growth. Additionally, our strong financial position gives us significant flexibility in capital allocation. This was clearly demonstrated by the share repurchase we executed in Q1, the largest quarterly buyback in our company's history, reflecting the deep confidence we have in our long-term strategy and the value we're creating. Beth will provide more details in a moment. When we last spoke, I emphasised the importance of moving quickly and in my four months at NICE, that's exactly what we've done. We're operating at lightning speed, capitalising on three key drivers. A relentless focus on execution, a great market in which we operate and a deep commitment to ensuring our customers win with AI and agentic AI in particular. Our sharpened focus on execution is already yielding enhanced results. We recently signed the largest CX1 Empower deal in our company's history. We secured a landmark agreement with a major European government agency, home to the largest customer service operation in Europe, representing a total contract value exceeding $100 million. This marks the second nine-figure government agency deal we've closed in less than a year, underscoring the scalability and strength of CX1 Empower, empowering mission-critical customer service at scale. We successfully displaced a long-standing incumbent and won against several direct competitors, a clear testament to the differentiated value our platform delivers. And the execution doesn't stop there. As mentioned in our last earnings call, we put an emphasis on strategic partnerships to help drive our future growth. Partnerships have always helped to scale, but today our focus is sharper and our impact is deeper. We're forging high value strategic alliances that deliver real measurable outcomes for our customers. I am especially proud to share two new milestone partnerships with ServiceNow and AWS. With ServiceNow, we're bringing together the front and the back office like never before. This integration eliminates silos, Accelerates resolution and turns disconnected customer journeys into seamless loyalty building experiences all on one unified platform. And with AWS, we're taking our partnership to a whole new level. Together, we're co-innovating to embed AI, automation, and cloud at the core of customer service, helping organizations unlock the full power of their data across every interaction. We're also expanding our go-to-market strategy and I'm pleased to share that CX1 Empower is now live on the AWS marketplace. These alliances, with more on the horizon, combined with our continued investment in the deep relationships with leading systems integrators, is reinforcing our leadership position and our growth accelerators for our customers and for NICE. Our second driver stems from the strength and the tremendous potential of the market that we operate in. Our market is undergoing accelerated transformation and AI is the driving force behind it. CX goes well beyond efficiently managing contact centres. It is becoming evident that the only way to do CX right is by delivering AI-driven, intelligent end-to-end workflow orchestration. Agentic AI is redefining how consumers interact with service, demanding a new approach that goes beyond the contact centre, unlocking new use cases, new workflows and new adjacent markets. When you include the transition from labour to technology, that shift is expanding our total addressable market to more than $330 billion, according to market analysts. NICE is uniquely positioned to lead this change. We're not just automating tasks, we're fulfilling entire customer intents with precision and intelligence. With our category defining innovation, deep domain expertise, trusted customer relationships and strong financial position, we are built to lead and win in the next chapter of AI driven growth. And that brings me to our third key driver, Our unwavering commitment to helping our customers win with AI. At the heart of this is CX1 Empower, the industry's most complete AI-powered platform for customer experience. CX1 Empower goes beyond interaction management. It is a true AI engine for business execution. We're automating end-to-end workflows on a unified intelligent platform where human agents and AI agents work side-by-side. seamlessly connecting data, systems, and fulfillment in real time. This is more than automation. It's the rise of intelligent agents that can reason, decide, and act independently to drive faster outcomes and better experiences. We're no longer only orchestrating interactions, we're automating intent to resolution with agentic AI embedded across the entire service journey. This evolution is unlocking entirely new revenue streams, dramatically expanding the value we deliver, and further separating nice from the rest of the market. Customers are recognising our competitive differentiation when it comes to CXAI, as witnessed by the strong CX1 Empower AI results. In Q1, CX1 Empower AI was included in 100% of our new Empower deals over $1 million in ACV. We recently launched CX1 Empower Orchestrator. This new solution seamlessly integrates AI-driven insights, third-party applications, and enterprise-wide workflows into a unified and automated framework. This groundbreaking solution has earned NICE top honors, being named overall best of Enterprise Connect 2025 and recognized for the most innovative use of AI at Enterprise Connect. Both awards celebrating the power of CX1 Empower Orchestrator. We're at a transformative moment in the evolution of CX AI. To unlock its potential, organisations must move beyond outdated, fragmented point solutions which have historically led to disjointed and frustrating customer experiences. As AI adoption accelerates, it's more important than ever to implement it on a unified single platform where AI can elevate consistency and enhance brand reputation. This is another reason why our unified AI-powered platform, CX1 Empower, is fundamental to provide exceptional customer experiences. We continue to see an increasing number of large enterprises consolidating disparate solutions onto CX1 Empower. The evidence of this is in the growth of our ACV in our portfolio deals. to find as consolidations of three or more vendor point solutions onto CX1 Empower. In Q1, the ACV of our portfolio deals grew by 26% compared to Q1 last year. A standout example of this is a seven figure deal with a Fortune 100 global sportswear company. By unifying multiple CX point solutions on CX1 Empower, they're reducing operational complexity through workflow automation, while providing outstanding experiences for their consumers. With CX1 Empower, they can seamlessly deploy AI across their customer service operation. In a similar seven-figure win with a leading non-profit health and wellbeing organisation, we replaced solutions from four separate vendors onto CX1 Empower. We secured a significant seven-figure AI deal with a leading financial services organisation by delivering AI-powered solutions the client required to support their continued growth and elevate agent productivity. In another seven-digit AI-led deal, an existing customer, a leading bank on the West Coast, is deepening its investment in CX1 Empower by adding advanced AI automation, enhancing self-service capabilities, unifying operations on a single platform, and driving greater ROI across the organization. A premier service provider in the life sciences industry selected NICE in a significant seven-figure deal. We won the deal with our market-leading AI roadmap and proven impact of our AI-powered self-service solutions. Beyond these headlines, the quarter saw a wave of additional leading companies, including Gapping, Lloyds Banking Group, and Hunter Douglas, choosing to partner with NICE, underscoring the strong confidence the market has in our solutions. and there are many more marquee customers from which you will hear inspiring stories at interactions in June. You'll also receive exciting updates that reimagine the world of customer experience with NICE at the centre. You'll see groundbreaking AI solutions purpose-built and powered by the intelligence of CX1 Empower. I will now turn the call over to Beth.