NICE Ltd

Welcome to the NICE conference call discussing second 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 August 5th, 2026. I would now like to turn this call over to Mr. Ryan Gilligan, Vice President 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 3 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 second quarter 2026 results and the company's guidance for the third quarter and full year 2026. A copy of today's press release and investor presentation can be found 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 and divestiture 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-US 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, Ryan, and good morning everyone. I'm encouraged by our execution in the second quarter as we continue to strengthen our leadership position in the CXAI market. We're still in the early stages of our growth opportunity and our second quarter results reinforce that underlying demand trends in our business continue to build strong momentum. In Q2, we delivered total revenue of $782 million above the high end of our guidance range. and Non-Gap EPS of $2.70 at the high end of the range. Cloud revenue grew 12.6% year over year as customers increasingly consolidate around a single enterprise CX AI platform that powers seamless experiences across every channel. That trend reflects a broader reality. Customer engagement is a category in its own right. It connects with broader enterprise workflows, but it remains a distinct system of engagement where every interaction happens in real time and every customer experience matters. It requires a different level of specialization than enterprise workflow automation or AI only interaction models. And that's exactly where NICE has built its leadership. As customer interactions continue to grow with AI interactions growing even faster, Customer engagement is becoming a more strategic capability for the enterprise. That shift is driving enterprises to scale customer engagement and AI across their organizations, expanding their investment in NICE. This is reflected in continued CX1 seed growth, a record Q2 for new cloud ACV bookings, including another record quarter for AI bookings, A strong cloud backlog growth of 19% and AI backlog growth of 72%. One additional point. These backlog metrics do not include our recently signed HMRC deal. Had HMRC been included, cloud backlog growth would have been similar to last quarter, while AI backlog growth would have accelerated above Q1. In Q2, nearly every CX1 enterprise deal included AI. Customers are choosing Nice Cognigy because of its proven success operating at enterprise scale. AI deal volumes and average deal sizes continue to grow substantially. And we're seeing our install base increasingly choose Nice Cognigy. Win rates are very high with existing CX1 customers as these enterprises view Nice as a trusted partner and see the benefit of a single CX AI platform. And The beauty of NICE Cognigy is it also continues to compete well on a standalone basis. AI, ARR increased 52% year over year, and AI now represents 15% of cloud revenue. Within that, our agentic AI solutions grew even faster. As enterprises scale AI across their organizations, adoption naturally ramps over time. While the technology can be implemented quickly, Customers are preparing their data, governance and operating models before scaling AI across mission-critical workflows. Our forward-deployed engineers and nice labs engagement models proactively help our customers accelerate that journey. Importantly, virtually all of our AI revenue already comes from production deployments rather than pilots where customers are achieving meaningful results at scale. International is another area of strength. In Q2, international revenue increased 22% year over year. And our recently announced HMRC win is another example of the large scale enterprise transformations we're increasingly winning. Cloud migrations, our expanding partner ecosystem, and growing demand for sovereign cloud deployments, particularly in Europe, are creating multiple durable drivers of international growth. Broadly speaking, Our Pew2 results reinforce what we recently discussed with customers and partners at Nice World Orlando and Nice World London. Attendance at both events increased more than 20% year over year, evidence of the growing interest in our fully AI-native CX platform. It is clear enterprises are no longer evaluating AI based on what it can demonstrate. They're evaluating it based on what it can deliver in production. Accuracy. Governance, scalability, measurable business outcomes are now the criteria that matter. As a result, customers are moving away from fragmented point solutions towards a single platform that orchestrates every customer experience across voice, digital, human and AI. That plays directly to NICE's leadership with a unified operating platform. And we're continuing to strengthen that platform advantage through innovation. At Nice World, we announced that Cognigy is now fully native to CX1, ahead of schedule, making it the platform's foundational conversational and energetic AI engine. One application, one shared data layer, one deployment experience. Customers can activate AI faster, eliminate integration complexity, and build AI agents directly on CX1 data. The native integration of Cognigy is also accelerating innovation across CX1 in ways that simply aren't possible when AI and customer engagement sit on separate platforms. At Nice World, we showcase the Gentic Analytics, which continually analyzes data across the platform to identify new automation opportunities and improve existing automations. We also introduced the Gentic Engagement Plane, purpose-built for an emerging hybrid workforce Thank you very much. To sustain that pace of innovation, we also launched NICE Labs, our dedicated AI lab focused on furthering agentic customer experience through advanced research, rigorous benchmarking and rapid prototyping. Working closely with customers and partners, NICE Labs is designed to help close the gap between what's possible with AI and what enterprises can reliably deploy in production. Importantly, we built that innovation without sacrificing flexibility for our customers. Our platform is model agnostic, allowing enterprises to take advantage of proprietary open weight and future models as they evolve without locking themselves into a single LOM. That gives customers the freedom to adopt the best models for each use case while protecting long-term flexibility and cost efficiency. Ultimately, our strategy is delivering measurable results for our customers. TripAdvisor, an existing CX1 customer, deployed nice Cognigy AI agents Moving from concept to its first live automated voice calls in just two and a half months. Today, its AI agent delivers a 90% customer sentiment score well above the 71% achieved by human agents. CX Bank, Malaysia's first operational digital bank with over a million customers, built its customer experience operation on CX One where the platform now delivers 95% customer satisfaction and 95% first contact resolution while AI autonomously resolves 70% of customer chat interactions. These outcomes are not isolated success stories. They reflect a broader pattern that we're seeing across our customer base. Enterprises achieving measurable business outcomes with AI in production. We're translating these outcomes into continued competitive momentum. Our CCAS win rates remained strong in Q2 and improved year over year as more enterprises selected NICE to modernize customer engagement with AI. In Q2, we secured an eight-digit ACV win with HMRC, making it the largest CX1 deal and largest Cognigy deal ever. Delivered in partnership with Capgemini, HMRC selected NICE's unified CX AI platform to help modernize and enhance We also secured another eight-digit ACV win with one of the largest healthcare organisations in the US, which selected Nice CX1 and Cognigy to advance customer engagement on a unified AI platform. Working together with Accenture, the customer chose Nice to accelerate AI adoption scale while enhancing member experiences and driving greater operational efficiency. Standalone Cognigy also continues to compete favorably. Recent wins including displacing an AI native point solution at a large multinational utility where our platform delivered stronger automation performance while giving the customer greater flexibility and faster time to market for new use cases. We also replaced an incumbent AI native solution at a large insurance company after winning a competitive evaluation against an AI native solution and and a large enterprise software platform. Together, these wins across both our unified platform and standalone AI offerings underscore the strength of our strategy, the competitive differentiation of NICE Cognigy and the growing leverage of our global partner ecosystem in driving large-scale enterprise transformation. Speaking of our partners, our partner ecosystem continues to be an increasingly important driver of our success. ACV, booked through our GSI partners in Q2, was multiples higher than the prior year. With AWS, customers are leveraging AWS Marketplace and committed cloud spend programs as a part of their procurement processes with NICE, making it easier to adopt our platform while expanding our commercial reach across both new customer deployments and renewals. And we've also expanded our long-standing partnership with RingCentral. Building on nearly a decade of collaboration, NICE will now offer RingCentral's UCAS solution while RingCentral continues to offer NICE CX1 platform. This gives organisations that prefer an integrated UCAS and CCAS deployment the flexibility to choose a unified solution without compromising on the capabilities of either platform. And we've also strengthened our position in healthcare through our recent EPIC integration by embedding patient engagement into the clinical workflow We've made it easier for healthcare providers to adopt the NICE platform, positioning us for additional growth in this strategic vertical. Collectively, these partnerships make it easier for customers to buy, deploy and expand their investments in NICE, while expanding outreach into new industries and buying centres. Before I turn it over to Beth, I'd like to leave you with one final point. The future of customer engagement is on a single platform. delivering production at scale. That's where NICE is uniquely differentiated and it's why we continue to win enterprise transformation deals, large ones. That differentiation compounds as customers expand the usage of the platform because our capabilities are natively integrated. Customers can activate AI solutions quickly without the complexity of deploying separate platforms. We are incredibly excited by the accelerating momentum we're seeing in product innovation and Customer Demand. These trends continue with our expanding partner ecosystem, reinforce our confidence in the significant opportunity ahead. With that, I'll turn the call over to Beth.