NICE Ltd

Welcome to the NICE conference call discussing first quarter 2026 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 6, 2026. I would now like to turn this call over to Mr. Ryan Gilligan, Vice President of Investor Relations at NICE. Please go ahead.

Thank you, Operator. With me on today's call are Scott Russell, Chief Executive Officer, and Beth Gaspich, Chief Financial Officer. Before we start, I would 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 three of the company's 2025 annual report on form 20F as filed with the Securities and Exchange Commission on February 26, 2026. During today's call, we will present a more detailed discussion of first quarter 2026 results and the company's guidance for the second quarter and full year 2026. 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 and tangible assets, acquisition-related expenses, gains on intercompany foreign currency transactions, amortization of deferred financing costs, amortization of discount on debt, the tax effect of the non-GAAP adjustments, and the tax rate impact resulting from the non-U.S. intercompany transaction. The differences between the non-GAAP adjusted results and the equivalent GAAP figures are detailed in today's press release. The information in 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, Rowan. And good morning, everyone. What an exciting and dynamic market that we're operating in. Our team is moving with speed and purpose to seize the CXAI opportunity, and that is evident in our Q1 results. We are taking bold and decisive actions to create durable, long-term growth in the CXAI market. In Q1, we delivered total revenue of $769 million and non-GAAP EPS of $2.64, both above the high end of our guidance ranges and cloud revenue growth of 14.6% year-over-year. As the only player in the CX market with a fully native, fully AI native platform that operates seamlessly across digital, voice and AI at enterprise scale, we are delivering real transformative outcomes for our customers. And you can see that clearly in our Q1 performance. We delivered a record first quarter for new cloud ACV bookings, both including and excluding Cognigy, reflecting growing demand across our platform and driving accelerated cloud backlog growth of 27%, including Cognigy, and 24% excluding it. In AI, we are seeing continued strong adoption and monetization, with AI, ARR increasing 66% year over year, and now representing 14% of cloud revenue. And once again, 100% of our CX1 enterprise deals included our AI solutions. We're also seeing this reflected across our customer base. As customers renew and expand on our platform, they are increasingly leaning into our AI capabilities to drive measurable outcomes and deliver immediate customer savings. This is contributing to a strong AI bookings with AI backlog growth of 78% year over year and AI pipeline growth that is accelerating even faster. International was another area of strength, with revenue growth of 30% as we continue to win and scale large enterprise deployments across our international markets. And that momentum is also evident in our partner ecosystem, with our GSI partners helping us secure multiple large, multi-million dollar ACV deals in Q1. Let me now turn to how we are creating value with our AI solutions. As basic automation becomes increasingly commoditized, enterprises are prioritizing platforms that can orchestrate end-to-end customer journeys and deliver consistent, high-quality customer experiences. Early adopters of NiceCognigy's agentic AI solutions are reporting approximately 20% improvements in CSAT, over 80% containment rates for Tier 1 inquiries, and double-digit reductions in cost per contact. One example of the tangible value we are creating is with Openreach, the largest wholesale broadband network in the UK. Openreach deployed proactive AI agents from Nice Cognigy to redesign customer engagement across 15 million customer journeys. Following deployment, our proactive AI agents helped drive a one-third reduction in missed appointments and inbound contact volume. This also drove a significant improvement in customer experience. with OpenReach's Trustpilot rating rising from a score of 2 out of 5 to 4.7, based on hundreds of thousands of customer reviews. Ultimately, our deployment delivered tens of millions of pounds in revenue and operating expense benefits to OpenReach. Lufthansa is another great example. Flight disruptions driven by labour strikes drove a surge in customer interactions. Over a seven-day period, Nice Cognigy handled nearly 2 million interactions, completed rebookings and refunds end-to-end, providing food and train vouchers, hotel accommodation information, and more, while significantly reducing contact center workload. This translated into hundreds of thousands of euros in direct cost savings, along with over 1,000 additional hours of avoided manual handling at a critical moment for Lufthansa. This is not a pilot, and it isn't a proof of concept. This is production-grade, agentic AI delivering outcomes at a scale no other player in this market can match. Eight months after closing the Cognigy acquisition, integration is ahead of schedule. And importantly, we have moved beyond foundational work into real platform execution. Cognigy is now tightly integrated into CX1, allowing us to sell, deploy, and scale Cognigy as part of a unified CX1 platform offering. This progress is showing up in how our platform operates. Nice Cognigy AI agents are now powering both proactive engagement and real-time agent assistance, extending across outbound outreach, co-pilot, and end-to-end workflow automation. What that means for our customers is simple. a unified AI layer that can orchestrate interactions and workflows across the customer journey at enterprise scale. Importantly, the progress we're making on integration is already accelerating innovation, and nowhere is more evident than in automated insights, a capability made possible by bringing nice cognitive together with CX1. Automated Insights analyzes structured and unstructured data across our voice, digital, self-service, and workflows to identify where AI can drive greatest business impact. It quantifies the ROI upfront and automatically generates production-ready, nice Cognigy AI agents within the same platform. Our closed-loop approach from discovery to deployment to optimization is already resonating with customers, and our solution was recognized as the best innovation for customer experience at Enterprise Connect. And that's just one example. This quarter, we introduced a set of capabilities that further differentiate us in the market, including advanced testing to optimize AI performance before deployment, expanded multimodal and proactive engagement across voice, digital, and human interactions, and deeper MCP integration that allows our platform to operate seamlessly within broader enterprise AI environments. These capabilities and more are why Nice Cognigy is consistently ranked as a market leader by industry analysts. Last month, Forrester named NiceCognigy as a leader in the Forrester way for conversational AI platforms for customer service. One of only three vendors to earn that designation and with the highest combined score across current offerings and strategy of all vendors evaluated. And the only vendor to stand out on customer feedback relative to peers. In a market where there is no shortage of bold claims about AI leadership, it is worth noting that independent analyst validation tells a more precise story. But the most important validation, as always, comes from our customers, and it's reflected in several key deals during the quarter. We closed the seven-figure ACV deal with a leading US healthcare services company and a long-time CX1 customer. They expanded their CX1 deployment to transform customer and partner engagement by adding nice Cognigy for agentic AI automation and Copilot for real-time agent guidance. We won with our connected end-to-end AI platform, bringing together agentic AI, agent assistance, and analytics with a clear ROI narrative and a proven ability to scale in highly complex regulated environments. We also closed the seven-figure ACV win in the UK's leading roadside assistance provider. The customer selected CX1, including Cognigy, as an AI-powered engagement hub leveraging agentic AI, co-pilot, and analytics to enable a universal agent model, automate complex customer journeys, and consolidate multiple point solutions into a single platform. Taken together, these wins demonstrate the incremental value created by bringing Cognigy together with CX1, enabling NICE Cognigy to win larger, more strategic enterprise deals, including in head-to-head evaluation of both traditional vendors and AI point solutions. Separately, in our core CCAS business, we closed a competitive seven-figure ACV enterprise win for CX1 with a global leading healthcare and life sciences company. as they consolidate vendors and modernize their contact center environment. NICE was selected to replace a large enterprise CRM-based contact center solution and unify multiple platforms into a single cloud foundation, reflecting the shift towards customer engagement platform as the center of gravity, while addressing immediate operational needs and creating a strong platform for future expansion into digital analytics and AI-driven capabilities. I also want to take a brief moment to talk about how AI is changing how NICE operates. We are rapidly deploying AI to simplify our tech stack, accelerate product development, and drive productivity across our workforce. Within our product and technology organization alone, projects are being completed in a fraction of their original times. In a recent example, we used AI to modernize hundreds of administrative pages to ensure our product meets enterprise accessibility standards. reducing 18 weeks of engineering work to just six. This is just one example of the types of gains we're being delivered across our teams, and they're already translating into faster, more efficient ways of building and delivering our platform. AI is a clear tailwind for NICE. What's often missed in the discussion around AI is the volume of interactions are rapidly expanding. Today, Time is the single biggest constraint limiting how often a consumer engages with a brand. As personal AI removes that friction, engagement will further increase, and nice sits directly in the flow of those interactions. We are the digital front door. Most enterprise software companies monetize internal users, and some monetize only the AI flows. we monetize all consumer interactions with a brand, be it voice, digital, or AI, and that digital front door has no ceiling. As AI adoption evolves, voice will remain a critical channel, which means capturing the CX AI opportunity requires a platform that can seamlessly operate across voice, digital, and AI at enterprise scale. And that's exactly what NICE delivers and something no other provider in the CX market offers today. That advantage is amplified by our large and expanding install base, which allows us to bring agentic AI to the thousands of customers already running on CX1 and accelerate adoption at scale. We are taking decisive actions now to seize on that opportunity. What makes our position durable is the combination of scale, data, and a deep domain expertise. Specialization matters. With decades of experience and tens of billions of interactions flowing through our platform, we understand customer intent, workflows, and outcomes at a level that allows us to deliver production-grade AI agents with the right controls, context, and operational reliability already built in. These capabilities are essential for large enterprises where customer experience is mission critical and requires consistent performance, trusted data handling, and alignment with complex operational and regulatory requirements. This is the NICE mode. And we look forward to bringing it to life for you at our Investor Day at NICE World on June 9th in Orlando. We hope you'll join us. Before passing it over to Beth, let me briefly address our broader portfolio. We spend a lot of time talking about our CX business. But it's important to remember we also have two other great businesses in financial crime and compliance and public safety, both of which provide mission-critical solutions and have strong market positions. As I've shared, we regularly review our portfolio to ensure we are maximising value for our shareholders. We've been working with advisors over the past several months to run a process for our non-CX assets. I want to emphasise that this is an exploration. Decisions have been made, and we continue to see value in these businesses. With that, I'll now turn the call over to Beth.