• Q4 Cloud Revenue: $534 million, 24% year-over-year growth.
• Q4 Total Revenue: $722 million, 16% year-over-year growth.
• Q4 Operating Income: $227 million, 22% year-over-year increase.
• Q4 Operating Margin: 31.5%, expanded by 150 basis points.
• Q4 EPS: $3.02, 28% year-over-year increase.
• Q4 Operating Cash Flow: $250 million, 38% year-over-year increase.
• Full Year 2024 Free Cash Flow: $733 million, surpassing $700 million target.
• Full Year 2024 Cloud Revenue: Record performance with strong growth.
• Full Year 2024 Total Revenue: Exceeded high end of guidance range.
• Full Year 2024 EPS: At high end of guidance range.
• Share Repurchase: $95 million in Q4, $369 million for full year 2024.
• Total Cash and Investments: $1,622 million at end of December.
• Debt: $450 million, with plans to repay at maturity in mid-September 2025.
• Q1 2025 Revenue Guidance: $693 million to $703 million, 6% year-over-year growth at midpoint.
• Q1 2025 EPS Guidance: $2.78 to $2.88, 10% year-over-year growth at midpoint.
• Full Year 2025 Revenue Guidance: $2,918 million to $2,938 million, 7% increase at midpoint.
• Full Year 2025 Cloud Revenue Growth: Expected 12% year-over-year increase.
• Full Year 2025 EPS Guidance: $12.13 to $12.33, 10% increase at midpoint.

• Warning! GuruFocus has detected 7 Warning Signs with SHYF.

Release Date: February 20, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• NICE Ltd (NASDAQ:NICE) exceeded the high end of its revenue guidance for the full year 2024 and achieved the high end of the range for EPS.
• Cloud revenue grew by 24% year-over-year in Q4 2024, reaching $534 million, marking the highest cloud growth on the largest cloud revenue base in the industry.
• Operating income increased by 22% to $227 million, with an operating margin expansion of 150 basis points to 31.5%.
• The company generated $250 million in operating cash flow in Q4, contributing to a total of $833 million for 2024, a nearly 50% increase over the prior year.
• NICE Ltd (NASDAQ:NICE) signed several seven-digit ACV deals with large enterprises, showcasing strong demand for its CXone Mpower platform and AI capabilities.

Negative Points

• Large enterprise cloud deals are taking longer to deploy, which may lead to short-term delays in revenue recognition.
• The company expects its strong cloud gross margin to remain flattish in the near term due to investments in international expansion and scaling of its cloud business.
• The guidance for Q1 2025 implies a modest decline in revenue quarter-over-quarter, attributed to seasonality and cautious assumptions.
• There is a potential headwind from the LiveVox growth rate, which has been factored into the guidance.
• The transition of large enterprise on-premise customers to the cloud is ongoing, which may impact short-term revenue growth.

Q & A Highlights

Q: Can you provide background on the cloud growth rate and any headwinds, such as LiveVox? A: Scott Russell, CEO, emphasized a positive market outlook and prudent guidance. Beth Gaspich, CFO, noted that while NICE had a strong fourth quarter, factors like seasonality and longer deployment times for large enterprise deals were considered. LiveVox's growth rate was also a headwind factored into the guidance.

Q: How are large enterprise deals affecting revenue recognition, and is there a risk of further delays? A: Scott Russell, CEO, explained that large enterprise deals with advanced AI capabilities take longer to deploy, but efforts are underway to accelerate this process. He emphasized the importance of delivering real-time, high-quality customer service and noted that improvements are expected over time.

Q: What are your thoughts on investing in AI versus driving profitability in the current environment? A: Scott Russell, CEO, highlighted the exploration phase of agentic AI and its potential to enhance customer service. He emphasized the importance of real-time interactions and seamless consumer experiences, noting that NICE's mature AI platform positions them well for profitable growth.

Q: How do you plan to address the mid-market segment, given its faster revenue turn? A: Scott Russell, CEO, stated that NICE's platform can serve the mid-market effectively, with partnerships playing a key role in agile deployments. He sees significant growth opportunities in the mid-market, especially internationally, where NICE already has a strong presence.

Q: What are your expectations for the impact of agentic AI on pricing and revenue growth? A: Beth Gaspich, CFO, explained that AI is embedded across NICE's offerings, with a shift towards consumption-based models. She noted that AI adoption is driving an increase in average deal size, and as customers ramp up usage, it will contribute to future growth acceleration.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.