NICE Ltd

Hello and welcome to the NICE conference call discussing second quarter 2025 results, and thank you all for holding. All participants are 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 August 14, 2025. I would now like to turn this all 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 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 on risk factors in item three of the company's 2024 annual report on Form 20F, as follows the Securities and Exchange Commission on March 19, 2025. During today's call, we will present a more detailed discussion of second quarter 2025 results and the company's guidance for the third quarter and full year 2025. You can find our press release as well as PDFs of our financial results on NYSE's investor relations website. Following our comments, there'll be an opportunity for questions. Let me remind you that unless otherwise noted on this call, we will be commenting on 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 and tangible 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 propositive statements that are subject to risk, uncertainties, and assumptions. And I'll now turn the call over to Scott.

Thank you, Marty, and welcome, everyone, this morning. We're proud to report another strong quarter, with total revenue exceeding our high end of our guidance range and earnings per share coming in at the high end of that range. In Q2, total revenue reached $727 million, driven by 12% year-over-year growth in our cloud business, as expected, with an NRR of 111%. AI is the heart of our strategy, and we are leading the AI-first transformation in the customer experience market. While others focus on consolidating legacy CCaaS platforms, we're accelerating in a different AI future-focused direction. This commitment is reflected in our exceptional 42% year-over-year growth in AI and self-service ARR, which grew to $238 million in the second quarter. Our AI automation and augmentation solutions embedded in CX1 Empower are the catalysts behind this momentum. Enterprises understand that providing a seamless customer experience results in the ultimate reward, loyal and repeat customers. Our one-of-a-kind platform has reimagined this harmonious customer journey and is fueling our outstanding performance in AI, evidenced by our strong Q2 AI bookings, including a six-fold year-over-year increase in co-pilot deals. And this is just the beginning. Our momentum will only accelerate as we integrate Cognigy's industry-leading CXAI conversational and agentic capabilities upon the closing of the transaction to deliver human-like AI-first customer experiences. Our ability to rapidly innovate and bring industry-leading CX AI quickly to market, both organically and through acquisitions, is a direct result of our continued financial strength, our strong profitability, and rock-solid balance sheet. The core value of CX1 Empower platform can be explained in two simple ways. First, we make customer engagement simple and intuitive with a single pane of glass that lets our customers manage all interactions across every point of engagement. Second, the platform intelligently orchestrates across agents, automation, and systems of record in real time. Cognigy will act as a force multiplier to significantly advance and accelerate the capabilities of CX1 Empower. On the customer engagement side, Cognigy's AI agents will be orchestrated natively within our platform, reasoning and responding in real time to make consumer experiences faster, more human, and more personal. And on the orchestration side, Cognigy becomes a part of a fully connected platform, gaining access to richer data, more expansive workflows, and shared knowledge and models. This is an environment where Cognigy's AI will thrive growing smarter with every interaction. It's truly a compounding advantage. As more organizations adopt CX1 Empower, our platform and Cognigy's capabilities grow stronger together. With this bold step, we are clearly poised to expand our leadership in the AI-first evolution in customer experience. Some examples of our AI success in Q2 include a standout seven-digit ACV AI win, which came from a major electric utility that chose CX1 Empower, replacing two incumbents. They sought a seamless customer experience and a stronger self-service, needs directly aligned with our strengths. With CX1 Empower, they're gaining a unified end-to-end platform and an AI power tools like Copilot, AutoSummary and other self-service solutions which are significantly enhancing their customer service. In another notable seven-digit ACV AI-driven win, a leading global medical device company is using CX1 Empower to boost call containment, enable intelligent routing, and enhance agent support. Already a strong advocate for a unified approach, they chose Empower for its ability to extend AI across the customer journey. highlighting how enterprises are leveraging the platform to elevate self-service and drive measurable ROI. In another AI-driven deal, a major financial services provider, SS&C Technologies, and a long-time nice customer, is adding co-pilot after a successful autopilot deployment to meet boost efficiency and enhance agent and customer experiences. This deepening investment reflects growing trust, in NICE's AI portfolio and its impact on building a more agile, intelligent workforce. Partnerships have always been a cornerstone of our growth strategy, and this year we're proud to welcome exciting new alliances with industry leaders like ServiceNow, AWS and Snowflake. We're also thrilled to extend and reinvigorate our long-standing partnership with RingCentral. Together, we'll continue to collaborate on go-to-market initiatives leveraging the strength of RingCentral Contact Center powered by Nice CX1 Empower. We're also excited to announce our deepened strategic partnership with Salesforce through an enhanced integration between Nice CX1 Empower and Salesforce Service Cloud. Together, we're investing in expanding support for Bring Your Own Contact Center, including customer-managed channels, and NICE's industry-leading capabilities. This strengthened collaboration unlocks powerful new functionality and sets the stage for continued joint innovation and growth. At InterActions, the power of our ecosystem was on full display. The energy from our partners, customers and industry analysts was extremely positive. Customer and partner attendance surged 33% year-over-year Sea level engagement increased 41%, clear evidence that key decision makers are leaning in with us. The momentum from interactions is already directly translating into pipeline impact and confirming what we already knew. Interactions is a catalyst for growth and provides a clear validation of our business momentum. Another area where we see significant and accelerating growth potential is across our international markets. Enterprises are increasingly adopting end-to-end solutions with AI adoption gaining momentum. The demand for comprehensive and intelligent AI platform like CX1 Empower is growing rapidly. We're also seeing strong traction with our sovereign cloud deployment of our platform, particularly in countries like Germany and France. These dynamics play directly to NICE's strengths and are fueling continued international growth, as reflected in the large-scale deals we're now closing in these regions. As we shared last quarter, together with our partner, Route 101, we secured a landmark agreement with the Department of Work and Pensions, or DWP, home to one of the European continent's largest customer service operations, with a total contract value exceeding $100 million. This major win saw us successfully displace two key competitors, as the organisation selected CX1 Empower to support tens of thousands of agents. In a seven-figure-plus ACV international win, with a leading German health insurer, AOK Plus, chose CX1 Empower over an incumbent, citing our unified platform and sovereign cloud as the key differentiators. The deal included a fundamental for future AI adoption and marked a major competitive displacement with our seamless, end-to-end solution, standing out against rivals' fragmented third-party approach. And we also signed a significant seven-figure ACV deal with a leading UK-based insurance company, displacing three legacy vendors as a part of a major transformation to modernise their customer service operations. They selected CX1 Empower as the foundation for this initiative and adopted both autopilot and copilot as they embark on their AI journeys. In summary, I joined NICE at the beginning of 2025, which I'm sure everyone remembers, and I was truly excited about the immense opportunity in the coming years. As I outlined at the beginning of this year, I've been keenly focused on specific strategic focus areas to drive NICE forward, and I'm really pleased that we are making progress across the board. I've committed to leading the AI revolution, and we've delivered. both organically with 42% growth in self-service revenue, or ARR, and inorganically through our acquisition of Cognigy. We emphasize the importance of strategic partnerships to scale our impact, and in a short time, we've launched collaborations with ServiceNow, AWS, Snowflake, and Salesforce with more to come, while also deepening our relationship with RingCentral. International expansion was another key priority, and this year we've signed one of the largest deals in our history, alongside accelerating cloud adoption in international markets, which Beth will elaborate on shortly. Importantly, we're achieving all of this with disciplined operational rigour, maintaining industry-leading profitability while thoughtfully deploying capital through acquisition and share repurchases. Before I hand it over to Beth, pending the closing of Cognigy, I want to remind you that we're planning our Capital Markets Day in New York in October. We're looking forward to sharing a deeper look at what lies ahead for NICE as we head into 2026 and beyond, including mid-term financial targets and the latest developments surrounding the Cognigy acquisition. I'll now hand the call over to Beth.