NICE NICE reported adjusted earnings of $3.02 per share in the fourth quarter of 2024, beating the Zacks Consensus Estimate by 2.03% and increasing 28% year over year.

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Non-GAAP revenues of $721.6 million surpassed the consensus mark by 1.20% and rose 16% year over year. The uptick was primarily driven by the continued strength of its cloud business and the ongoing expansion of its customer base.

Revenues in the Americas were $614 million, up 17% year over year. The same in EMEA was $72 million in the reported quarter, up 11% year over year. APAC revenues increased 4% year over year to $36 million.

Following the results, NICE shares experienced a modest after-hours increase of 0.17%, reaching $153.85 on Feb. 20, 2025. This uptick was likely driven by strong revenue growth, the success of its cloud business and ongoing product innovation.

NICE’s Top-Line Details

Cloud revenues (74% of revenues) of $533.9 million missed the Zacks Consensus Estimate by 0.06% but rose 24% year over year.

Strong cloud revenue growth fueled a solid year-over-year increase in total revenues, highlighting NICE’s market leadership as it surpassed 400 enterprise cloud customers with more than $1 million in ARR.

Service revenues (20.7% of revenues) of $149.7 million missed the consensus mark by 0.98% and moved down 7.8% year over year.

Service revenues, primarily from maintenance, declined as large enterprises continued transitioning from on-premise to the cloud platform.

Product revenues (5.3% of revenues) of $38 million beat the consensus mark by 37.61% and increased 19.4% year over year.

Product revenue growth was driven by strong demand for on-premise solutions and the success of the financial crime and compliance segment, supported by several large FCC term deals.

NICE is driving growth through its cloud focus, especially with the CXone Mpower platform. Its agentic AI boosts efficiency and improves customer experiences, strengthening NICE’s position in the CX market.

NICE Operating Details

On a non-GAAP basis, the gross margin contracted 50 basis points (bps) to 71.4% in the reported quarter. 

Research and development expenses, as a percentage of revenues, were up 10 bps year over year to 13.1%. Sales and marketing expenses, as a percentage of revenues, contracted 30 bps year over year to 24.5%.

General and administrative expenses, as a percentage of revenues, decreased 150 bps on a year-over-year basis to 8.8%.

On a non-GAAP basis, operating expenses, as a percentage of revenues, contracted 200 bps year over year to 39.9%.

The non-GAAP operating margin expanded 150 bps on a year-over-year basis to 31.5%.

The non-GAAP EBITDA margin expanded 150 bps to 34.5%.

NICE Balance Sheet & Cash Flow Statement

As of Dec. 31, 2024, NICE had cash and cash equivalents (including short-term investments) of $1.62 billion compared with $1.52 billion as of Sept. 30, 2024.

Long-term debt, as of Dec. 31, 2024, was $458.8 million compared with $458.4 million as of Sept. 30, 2024.

The company’s cash flow from operations in the fourth quarter was $249.5 million compared with $159 million in the third quarter.

In fourth-quarter 2024, $95.2 million was allocated for the repurchase of shares.

NICE Provides Q1 & 2025 Guidance

For the first quarter of 2025, the company expects non-GAAP revenues of $693-$703 million, indicating 6% year-over-year growth at the mid-point.

Non-GAAP earnings are estimated to be $2.78-$2.88 per share, suggesting 10% year-over-year growth at the mid-point.

For 2025, NICE projects non-GAAP revenues between $2.92 billion and $2.94 billion, implying 7% year-over-year growth at the midpoint.

Non-GAAP earnings are estimated to be $12.13-12.33 per share, suggesting 10% year-over-year growth at the midpoint.

NICE Zacks Rank & Stocks to Consider

Currently, NICE has a Zacks Rank #4 (Sell).

Broadcom AVGO, Marvell Technology MRVL and NVIDIA NVDA are some better-ranked stocks in the broader sector. Each of these three stocks presently carries a Zacks Rank of 2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Broadcom shares have lost 2.5% in the year-to-date period. AVGO is set to report first-quarter fiscal 2025 results on March 06.

Marvell Technology’s shares have edged down 1.7% year to date. MRVL is set to report fourth-quarter fiscal 2025 results on March 05.

NVIDIA shares have returned 4.1% year to date. NVDA is set to post fourth-quarter fiscal 2025 results on Feb. 26.

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