NICE (NICE) 10 Nov 222022 Q3 Earnings call transcript

Welcome to the NICE Conference Call discussing Third Quarter 2022 Results, and thank you for you 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, November 10, 2020. I would now like to turn this call over to Mr. Investor NICE. President, Vice Cohen, Relations at Marty Please go ahead.

on today and are you, Gaspich, operator. Eilam, call me With Officer; Thank Barak the Chief Financial Officer. Chief Beth Executive

I materially advised this call of Litigation differ constitute that results start, these Before safe point with In Reform that XXXX, will statements. actual like the harbor could statements on the Act provisions forward-looking out of we the forward-looking made company's some would from accordance of be the statements. please to Securities Private

information the April with or XXXX company's the Item to Securities the XXXX. is Additional regarding cause in X, factors actual Commission filed the in performance differ annual and that Exchange results report contained section could Factors of company entitled on Risk of Form on the X as materially XX-F

the will During for third detailed quarter company's discussion full-year results more XXXX. of a guidance and the the we XXXX present call,

Following our will opportunity be an comments, questions. there for

Barak. of noted non-GAAP figures today's compensation. we generally for and assets differences for between accepted And I'll equivalent The you as of in revenues release. from that respects Let press call our commenting mainly in certain reflected operations, the which this amortization accounting results to will are the expenses, adjusted on unless and accounting over the intangible and in results me stock-based adjusted on GAAP acquisition-related be detailed differ remind otherwise turn accounting call, principles now

everyone. Thank you, Marty. And welcome,

revenue XX% was of another million, scale. constant an or constant year double-digit currency. an as same by thrive currency continue XX% another and same line by on annual are top results we growth cloud in the ahead driven $XXX exit among our With XX% quarter strong the quarter At in far, our are, billion, $X.X and at quarter of in the This largest ago. representing has competitors, as vendor and total emphasis display time, increasing to growth continue we XX% over revenue, wavered XXX cloud run not to at profitable demonstrated an increase growth. rate cloud margin, a points reported growth by the XX compared to operating revenue cloud in solid one income by XX% operating performance evidenced basis of in pushing steam of full increase margin driven We the We increase in of EPS. points of basis by the in and an increase XX% and gross

extraordinary reshaping in experiencing are events a ushering We an our are time, new cluster a era. world and that of

transition driving period, previous change We marking three are, a several past opportunities end some are underlying years, outbreak forming fact, forces in XX past the of the era years. major new The unmatched defined, are and era the COVID landscape the that of events for software by gaps will in rules the dramatically creating of a spending the in where massive for others. unviable new this being enterprise of triggered the next era

profitability the global where current new at solid place business and the sustainable era their build and companies asserting Consequentially, post also must are in software new a between we the a only if demonstrated early companies viable First, the revenue the and for they grow created path crisis where standard clearly way [indiscernible] monetization can software XXXX.com were free capital models era table. economics. viable clear

a outstanding help combined following of complexities facing executive cost of enterprise out-of-control and extreme shortage unprecedented teams disorder, labor. years us Second, few with increasing

only and complete at AI-ization will industry to to era lead are AI-Ization transitioning each way only achieved We software where efficiently automation process is scale. complexity and manage the total be enterprises. can and AI reach an by injecting of smart to the purpose-built every

an tech a coupled is a market of dozens softer of clutter applications will underlying integrated platform complete providers. disappointment of suite will offer Suiteform cloud-native of platform. to are a the manage enterprise become and going of industry the standard to shift limited applications. ultimate market enterprise a focus point suite that best-of-breed new with at reframe impossible It viable the powerful platforms scale built with fusion seamlessly the the the with Suiteform in generic new from the and combination AI-ization suiteform economics era. cloud mandate to software Lastly, on solutions upcoming the the and

to customer even best This companies criminal to enterprise [ph]. any serving and budgets institutions platform brand a is between relation addressing to loyalty. our essential Mission-critical in errors elevate enterprise is empowering beyond. the during are operation financial agnostic our period market service lead volatile cloud to is We customer cloud transition such are compliance bound are climate. in and is world's solutions, justice as their hundreds leading periods. is one and unshakable circugulations this positioned Excite a and In of Central, during platforms that economic transition of financial NICE our heart that the Evidence platform by for is

enterprises ways Michigan inflationary of prioritizing to environments. critical the shortage find in to solutions, rally flavor addition to cost overcome In and

today's platform platforms to complete to deploy rapid are are deliver allow ROI, fundamental highly requirements the go-to to AI infused are solutions customers in them replace enterprises labor by automation. environment. Moreover, and modular for with Our for which our fast

to to lead ability financial extends this transition in era our excellence. Our

our acquire forefront unit long-term. income continue and both and We are double-digit in highly expect digital us the at cloud have industry. in our at continue to economics the with industry, and to rates the in transformation put consistently our taking many place fuel flushed of and other and capital to giving operating short EPS to vendors profitable has to we grow the Unlike business. Innovation grow us with unmatched innovate

myriad fund of the While on a to business and debt markets of most other capital. in with to skyrocketing have vendors engrossed capital are their rely cost

various cycles for over into has many with periods has economic that of years, to able Lastly, and we been are the and ones experience era. already NICE navigated committed industry have this Enterprises companies that software and management a has team and the lead successfully prevail time. be turning during next will seasoned towards and decades will that weathered

of the in are further evidence competitive replacements is this legacy key winning within our Our against of cloud base. expansion business of market, we of number wins the as the as vendors, significant actuality growing including well competitors customer amount

greatly to complete largest market We average grab NICE entirely banks, in of to our have competitive world, and our reduce the so. to of deal to and replace adapt And which in to BPOs companies, move on for CXone deliver struggled industrial and which legacy In platform the competitors as are an fact, wants broadly deal is consolidate most meets insurance won total digit and compared their to pace another has in legacy and deals their in eight or have a adopting to replacements size due and institution, digit digit largest in the platform decision XX% largest single cloud not one solutions changes their U.S. IT of of customer those their with seven platform. our we to place the grew one largest another deal quarter several deal by all-in-one off the the solution one value customer companies included roadmap single credit the a only last solution. and replacement standardizing and taking tremendous with QX, to solidified eight striving opportunities for to company to competitive vendors. these large need. increased signed This grow vendors by legacy their ability replacement complexity this the doing NICE. our QX on unable a to industry across deals Legacy values the the a large year us led digital owning XX%. with has of worldwide kept are of their a incumbent continued with landscapes vendors point cloud the We Other signed with to hotel with the one around well-known and financial deals part, this We cloud incomplete organization onto world's digital. of rapid Enterprises innovation third large as the state deal including CXone share eight from union. employees digit with

expansion these the churn, a our QX, AI upsell and resolve winning large operational to seven and a included trust seven entertainment rolling fast-growing previous result, with entered deal major for based to improve energy go deal competitors. Expansion in of periods digit gaps a an health seasonality CXone thousands digit As continue to media embodying services upsell with them to major care And there some needed deals properties help are is in and entire overall issues. and and we expansion deal cloud, customer European-based a others. and a to financial others. of diversified With solutions' it and within a with portfolio BPO with relationship ability a our cloud massive company a grappling landscape this transition wins analytics a additional NICE to customers seven summary, the insurance which very well-known on win enterprise will new In era, included with upon solutions. their an for the deals the company, and struggling large large in new against for company users opportunities company efficiency, for acquisitions unbridgeable software come an company, and of a and opportunity successful from our speedy deals strategic signed conversion the We health large flexibility with with deliver ramp continued and was a implementations. deal these and deal along well-known customer on X-digit QX live, In to we scope on-premise of casualty the insurance among a have based overall took a into enormous digit is expansion customer base. solutions company, we're

unceasing outpace cutting-edge all fast-growing prime our financial strong and supported We market profile. the and are our by in which with our solid combined are position overall technology, platform with profitability market-leading a to a our innovation

looking forward will now us are turn I call We to of in Beth. opportunities to and finish to the XXXX. strong ahead the year over the a

our of provide analysis everyone. I for our financial you, Thank the quarter performance And results good business full-year Barak. third XXXX. to the outlook and for pleased am an and day,

on Total results Earnings were increase revenue at quarter for increase third Our lines. both or third currency. and XX% XX% the range. quarter an XX% at currency. constant an Both guidance share million, our total per the and exceeding was $X.XX, EPS was end of $XXX the top and and XX% of in constant bottom financial were strong revenue of high

revenue, the total period in year-over-year compared over XX% increased the to a double-digits total third and revenue revenue for the the the total a last of constant in in revenue the of Our in mission-critical million revenues cloud. to our new quarter, same revenue, up of and flat concerted third coupled revenue, to solutions. $XX results seven was of last sales, nature XX% of services represented stalwarts quarters increased decreased maintenance Recurring revenue in from of the million XX% existing cloud-first XX% revenue as customers record the The XX% the to our cloud our the total and total XX% XX% our our has of was composition of quarter XX% of from in in recurring year. last Cloud and revenue strategy revenue quarter growth year-over-year of which Product consistently further been $XXX result the year-over-year. represented with which XX% are third currency. year which represented quarter and migration

predictable of percentage high Our and consistent provides business a recurring revenue model.

foreign regional our the region. against continued our in which than previously stronger revenue, the creating third exchange quarter, anticipated, predominantly were impacting U.S. of to strength Moving dollar EMEA the our headwinds performance,

the and vertical The operate ongoing our coming in foreign EMEA APAC, XX% represented grew currency a each is year-over-year. XX% and represented impressive year-over-year growth exchange we headwinds, business business This demonstrated segments expectations Americas our XX% revenue, growth in. total the breakdown, into our XX% total increased represented of the basis. by Excluding the constant accelerated From strength our which quarter every region performance APAC region, of on as well geographic across of total which our X% XX% at our regions revenue. double-digit year-over-year adoption cloud primarily one currency. and XX% of outperformed a grew of region, of highlights as solutions. both revenue, and both The in which year-over-year constant revenue, X% driven EMEA and

includes constant our $XXX engagement of million, the Moving driven continues rapid compliance, year. QX XX% business compared were total crime behind XX% XX% a on unit driver experience the a constant QX and to total which and and continued which platform and CXone, in from and totaled cloud our and as million, Experience revenue basis serve that XX% revenue on our revenues, solutions, currency XX% increased breakdown. of business. increase customer engagement Customer our financial a $XXX to Cloud Customer in digital last conversational growth. AI in growth year-over-year basis, our which represented in XX% our main to Revenues currency both on-premise by growth represented to

increase year. quarter gross increased mainly Our XXX to was XX% Gross a points gross XX.X% which XX.X% gross of in record $XXX basis XXX margin million. in the an The profit last compared points the grew attributed basis year-over-year margin, XX.X% to and cloud was margin increase QX. to QX in in to

to Our apart margin, of a while CXone given NICE, cloud-native strong deep-seated portfolio have which broad us always strategically at targeted sets ability profitability cloud our in balance our as significantly delivering gross the the a coupled our we our profitability. scale, growing of At Suite. simultaneously drive top-line with in industry continues right expand platform to result

effective margin the of to our to QX, our an XX% quarterly reduced on $X.XX year. other revaluation our ability immaterial quarterly QX again hedges centered The of per stay on to accounts Earnings compared dollar XX.X% our by income impact for income exist in operating hedging increased and financial of was industry-leading to on to a were operating the increased year. compared our increase sheet combination due to financial results. of of our financial XX.X% inherent record that year-over-year an business third a and million and strategy. natural quarter expense evident currency share Our from our quarter our last in the record balance in business last a XX% $XXX non-U.S. totaled There fundamentals operating third once income. In

in Cash growth would million, foreign been EPS last exchange $XX this which by Excluding or increase our operations XX% $X.XX a to year. perpetual flow to an by advanced XX% monthly QX in aided were or our more offset model than from positive with a a company by company business the higher of compared the payment have impact, from collections software with of transformation cloud multiyear on-premise a model. year-over-year, model a a impact payment was

We million, billion strong our first With a and net just under period our repurchased was the Total we confidence amount business position our disciplined nine hedge combined is cap environment, in months capital $X totaled demonstrates This is of nearly overall continue new the investments repurchases strong our $XX to share the of to to change share billion. guidance. the million. amount cash profile. investments will of conclude repurchase the X.Xx same strong at announced generation, fundamental return market shareholders the of to this new with our program $X.XXX I program to instrument $XXX reflects year, third financial our cash earlier September cash expand the allocation to $XXX of in use ongoing remarks ongoing a in also and net a the with the last for in It capital today my as commitment rock-solid as and strategy. net coupled in quarter by our of which year. million with debt, end to portfolio access cash opportunity total our $XXX in our million an resulting

our earnings raising fully constant non-GAAP diluted revenue per guidance We full-year currency. are share total on and based XXXX

disclosure increase of as and Full-year midpoint range This $X.XX, increase represents at to Full-year be we to currency $X.XXX the XX.X% of headwinds. earnings fully diluted range of a at share are per of currency. quarter, a result is stronger-than-expected guidance providing an non-GAAP in revenue XX% represents and are total constant at to an expected $X.XXX XX.X% constant billion midpoint of currency. at additional non-GAAP $X.XX which to full-year in XX.X% expected of be exchange and XXXX constant a billion XXXX in the foreign

total share $XX these XXXX would non-GAAP guidance headwinds, per call higher over XXXX diluted would now be non-GAAP full-year be questions. revenue higher. in Excluding the operator earnings will I the to million fully $X.XX Operator? for turn

Thank you.

[Operator be a will We Instructions]. session. now question-and-answer conducting

Please Our Samad with with first Samana of Jefferies. your question comes question. line from the proceed

This [indiscernible] for question. is on for our Thanks Samad. taking

others reason So Is And more geos? year-over-year mix from despite factoring your Cloud or industry. any from of this it's cloud whether financial the impressive kind that was insulated the makes compliance macro there crime hearing in headwinds your is and you pressures, sequentially these we're performance? growth into then that how customer anything

the to high for in scale, $X.X growth continue our mentioned billion cloud examples And at also some for gave very that is I the see exit large Thanks our the mentioned ARR I of Yes. I our of that high very And numbers. multiple the of deals, question. scale, a it's Yes, and at end we consistent as cloud factors. QX. and call on

I all, a a large very continue base to believe customer loyal and we expand. that First of is have very

just solutions that include different and platform we nicely very that to believe and I And the many share on our portfolio a Thank more not have. also Second, to continue front. customers users, you. but very we vast market to continue win take expand other

down have or past? is the Understood. CXone their base, think your seats they any differently they And Or if up in changes last customer are any about in usage? seeing you existing you one me than flexing for are

the which that mentioned, as I've lot Actually, with on-prem we we've predominantly, customers. the those in digital the other to the products, by enterprises continue don't one, win and the of the a us, what from see a past customers initial And such number AI large of to they a customer. the In see with won see we way, to see to as expansion expansion in customers and legacy past. quite many factor, platform win. seen triple continue of expansion legacy from platform, of had. In the second of the double many and in we we displace many a more those sometimes we of to beachhead, those, and many allows ARR No, we change was is that

Thank you.

you. Thank

Thank you.

question Tyler of the next your Our with question. comes line from proceed with Radke Please Citi.

Hi, Thanks taking the for good morning. question.

So it volume the environment kind sounded I'm that -- reflection contextualize than you is a sizes size some you a of it function quarter, just us larger challenges six, like sizes. macro in then deal a deal when displacements competitor? this little of of you Thank are both of those color, seven size? displacing are Or a And impressive the these think? transactions of really terms deals? is your of curious, facing? competitors average bit of if figure the competitive give Just could do and competitive you displacement? a the the transactions it do deal Is this of Is you.

Sure.

two. into it divide me Let

specifically and private innovate also genuine and CX innovation invest enterprises most penetration just ability of is are market companies and if that debt, in legacy is financial of not second, So solutions headcount but run, with still is And the companies would for the than the right even significant see there they customer, that, financially, a, to survive cutting a very relatively this of a you light, and concern we public they CXI companies' still continue long didn't under for also market about those if pointed more struggling that of are especially have you now on-prem the correctly will those in higher cloud viability, or like. half. the end in the from the business, decade there still vendors the whether and

transition our last reason. in see or solutions, decision of few more cloud the are their months, So accelerating enterprises one to more their and more to solutions accelerating the that's modern those and we

on I In meet our replacing, we when CX the it's legacy platform they not suiteform. are single vendor now and orchestrate in want consolidate or the second us cases believe, it's from many to that that show journey is to orchestrating The where cases, and call reason, of breadth There to those a they're realization one spending we speaks into stack one needs different their sometime that We platform. vendors. And realize their the XX the different instead enterprises, to portfolio. vendors many they it built XX time focusing technology they a it just consumer. comes customer legacy of

markets. earlier reached scale, I've of of one doubled a all like both accelerate but that as combination believe in and almost which in that, remarks, a the see us of CXone rates platform value mentioned my the And As of other we mentioned, displacement is we platforms to the also other with displacements. have I value, at the the which I that the those applications I for the believe market. real combination that allows the is But

flow. And you wanted to Great. I cash about Beth, ask

expect to I think transition year? And as model, months flow about should this So the more any in I around operating the but your a some cloud headwinds you cloud operating of to margin how you transitioning there down to should is just cash last to of just a that difficult nine year-ago. we flow you from differences a relative operating model, know are Is a in comments relative some year-ago. as we compares invoicing. think just cash made

Just between flow operating income. about help us you. relationship think operating cash and the Thank

upfront in. the the business. recurring is seeing in impact what given difference cash when really timing premise positive a our deals, in to in duration-based business, that is And the both and has recognition question. is we're the seeing revenue cloud that comes strength revenue our in the relative that for Tyler, There Thanks, created Yes. you're

revenue the deals, the you'll recognized upfront. duration-based see on example, that is for So

COVID, received in agreements. we've over the of buying the cloud coming the of what duration-based customers more really a cash, shift the through duration And both as is well course, agreement. of seen is However, as

So means has in on-premise moved large to more shifted what a which now model of model we that ago, a years that and upfront the that of payments and model is over several with cash is cash a a terms had perpetual same duration. onetime

you're greater So was the making to itself our activity the way, at health seeing show of cash. that data our business, shift we you year-over-year, a revenue very of revenue underlying the which recurring actually business, healthy actual our When collection outpacing actually in increased a XX% look saw even that our growth. in

cash to cash there's really which our business, in no what players much if to very on of very look industry, our in to healthy collections. we cash the resulting billion. So cash in overhang aligned macro of highlight a that's relative model continue $X from our the of healthy. some remain see the we strategic course, of net other And to generation strong direction our cloud business as have, our shift And our position extremely well, you have And cloud-first generation I and shifting being a almost you is in in which the terms would strong They is is company. margins.

Thank you.

you. Thank

with line JMP. Pat question comes with questions. proceed of Walravens from the your Our Please next

and opportunity multiplier me there? get question thank a Beth, congratulations. and lot. Because Great, add revenue my help walk works can migration them cloud that you through I let we the

tell it? should to it? you don't me I Or right. do I know, do it's And So if want do you

of can the really applications the customers have the earlier of market, needs is multiple opportunity our the the more that coming very and that when we fit vendors have be you've that that it's coming revenue that business. to for cloud That integrated thank maintenance which existing can the a as and with the in to have be and will multiple CXone large at the past in we We have business up are part the hi, And customers What question. of incremental into the they multiple NICE enterprise and cloud business, of you it's is center, cloud their of applications migration in with the we Sure, most Pat, seamlessly we've stream so lot yet over it ARR seen our talked revenue of about noted see that over we and move. our in based platforms. of XXx displacement first few coming uplift. from look growth an driving is That of they a years, contact most or stream. legacy of uplift Barak benefit all the utilize of really cloud experience breadth that you adding the cloud from we're that and that those that multiple. what's depth uplift AI should of that on of be have our is and all, legacy that the our seen, all the the customer shift, to revenue the has and talked shifting CXone today their to customers is typical Xx to sometimes our base years. Today, the automation coming and

business So that's on they've top of that done the with this.

it for be cloud. the the creates will drivers one growth very looking forward in our continued So and us of a attractive of opportunity

opportunity? uplift if have could $XXX billion Xx and of $X.X there. like it about a fair I million assume follow-up is just mean, And maintenance there's for to us is I quick

base, double this healthy our that portfolio. referring to rather if relatively speaking maintenance conversion it's to out I don't and not has broader think of believe but that in like-for-like the of that more, have to, an assume a you're it's classic a we much and fair very maintenance cloud part the immediate just opportunity, but we specific a number, itself

you. thank Okay,

you. Thank

Thank you.

Rishi next Our with the question Jaluria line from RBC. your with of question. Please proceed comes

but thanks questions. other are primarily your wins I my displacements. legacy CCaaS of vendors that those gave so see the follow-up. and you lot And I Wonderful, against especially of on-premise, Cisco much quick for taking do Avaya then kind can't to competitive and to cloud-to-cloud a you ever about scale a around maybe ask imagine have I wanted stats of level?

Sure.

answer and the I'll is a color give you yes, absolutely So on bit that. more

of, the market So -- a But market, legacy the don't shifting that has it, solution, let's and just viable scale. three customers taking needless to deliver. from ability under, failed share to competitors of complexity to of pure fall higher cloud cloud share say, and the Number heavily or different deliver at ability vendors of market lack of but and are due of that to see Lion's call That's on-prem is issue cloud. I or pushing from to the the a of categories. more would And that on not scale deliver been disappointment cloud the they displacement say, this at on-prem one lack more the competitive number competitors especially always indeed to we end replacement very have is one. of

features or fact footprint the cloud to customers solution that fact we on vendors capabilities lot vendors have a functionality, did is their it, of takes some the global it not have switch one the global Second third a what or understand fancy platform a And baiting those because of basis. smaller that. to that of, of deliver and of slides and the do to is lot then that customers and those legacy with are them call lacking native a I a baton solutions switching less

happening biggest about to call That's then we is think at centers. And it. with in space maybe look wanted Barak. macro, tend right? I helpful, get the this Like to question really headcount what's Got

have the So think slow those maybe to you and offsets should will hiring start they there AI of cut see at top, thinking How to any some you of I more from fact, the the one, second, of Thanks. if amount maybe on factors whole or customers? centers reduced. heads headcount if be, rate in or be have down we headcount even offsetting of have reductions call gets if guess, getting forces even your part started about analytics about you

in is interaction reduction increase. solution any quarters today, they user. an their it as part. first in see we And Actually, opportunity the on see that monthly my what experience call digital in I do mentioned can one, how What I'll through in and we consumers contact and significant it in is we've well as in using I'll tremendous this is as of that and to cost we have starting number believe remarks, provide earlier we just seen important other much automated see customers they -- to that with channels. a hear start the outstanding interaction. say factor, the of tools taking evolve, and center. share I don't call bigger labor So the of these not the the contrary, down. it's about its a active challenge bigger is And infancy, don't a, lot automation our from the labor the share the because a of one now the with and of of going shortage dialog over customers have a in With center interactions reduction from the we with have the customers we

different and tremendous is employees the beyond last edges the the call to cover the exponentially to of working it opportunities on the the been able in the the over what of far of And keeps On gives growing being few very channels center. core years. way number customer what journey all we've that it, it contrary, from us

you All Thank right. much. very Wonderful. That's helpful. so

Thank you.

you. Thank

question. line your America. Our Funk of next with Bank Please question comes from with the of Michael proceed

you what or questions to in do size business strength? addition in platform today. customer your vertical resilience your degree the appreciate exposure attribute to I your To relative

on our refer been as can go and been for and the forth. team and think volatile with inside I XX -- -- with long I've a so knows NICE to and out we management of years, times in to business three best and seen so start committed multiple time also have as I'll past all I is market market I've and in the will well and the for in market -- and the businesses. it we market So that CX highly this of that

level the economy and you you'd in in I if good we We've or experience service, of other seen the understand that customer by on do good we a economy, and like, their customer that So it loyalty different CX both through if or we've keeping to XX spread would I look say, businesses the in certain business, three way, problematic a And eventually level important. across, resiliency business. COVID, is seen -- provide believe a well. that have it, brands as the for verticals times

of XX% banks, we them. And business actually justice over those fight constant Justice the cater like. would if we the XX% of many at with banks. the believe both level the to need and very economy, in local. increasing go is crime do and we -- every you fraud the that of is bound problematic and weather. more in business we financial if by have today that resilient a many, of to large And this either the and by have the budgets The what and time regulation Criminal we to than is customers worldwide of command second this And mid-market by the the driven -- state in in into any a banks or are XXX% the almost hundreds that government of U.S. third And there you compliance, budgets business business, of agnostic

driving how more, great. in it, that's winning comment One versus and business? today that's I could, Can that Got partnerships you past the deals you're please. if through on maybe the

the still either A few we the certain vendors or Partnership in One a on are platform, capabilities Two seeing holding in realizations that are the to Sure. different critical business. partner heavily months either is they partners the that to along months that. tightening all our again, few by through partners. vendors keep to other financial influenced not they in saying in especially, them actually very we make partners is invest vendors part side the a have discontinuing our that already. by of last and we've they and realization. that that of continue have of displaced the partners, who will What important legacy also are embraced win they is of last their allow not understand that being that Those variety have. platforms or what partners to strength concerned sure innovation customer, their what relationship limited platform but on we're customers concerns the investment our with that our lot deals been of and because NICE just are NICE

this believe invest winners And I who continue in we'll market. are the realizing So partners to are potential of that that.

questions for today. the you Thank

you. Thank

Thank you.

comes Please of Fish Sandler. your Our next with the question James from line question. with Piper proceed

Hi and guys, of thanks are talk one or modules seeing customers year, of then for for guide Or for rest what CXone for what the AI of you rates percentage questions. constant reiterating think the XX% on currency least attach guys module about have mix at the now the the AI here? versus QX cloud Barak, you you in about can the we your business cloud? how are the the should

Okay.

with So take and second Beth I'll the start one. then the will first question,

a with refer have I'll deals what attach you we customers thousands adopt we AI models base or of as So rates it. more customer increase see and as more call the CXone, well as the to want you of really both new to what that a to in tremendous of

efforts I up. is doing up in labor like, it master for to XXX%, without lot a just new trying but to to ROI right want it the that. do deals, it new They adding we labor. digital are going said have adding the And you to in order Consumers are organizations that or a amount the would catch of goes is without digital that significant to of channel demand catch increase the if separate already to see staggering. And to that but attach both customers. we what the So also about reason before base, the

or give a you give your around model actually is itself $X,XXX AI about example, this overall to can for spend add $X,XXX is of agent replace $XX,XXX cost, our you year, the that roughly center, today, to need volume to take. geography, But labor. contact a need labor technology the On again, to depending demand. an in adjusted additional to year. it's the an order technology on Just if XXX% with agent costs deal The average,

is the to ROI significant, uplift revenue. very our the including So potential

So demand. all see in we all, high

work that data of that us of tens of AI get We understand It's AI full we enlighten the solution, and others provide breadth those this a the have but It's know that have, technology have do be and the and is that of to not the to just enlighten, believe solution. value. we the historical amount not interactions actually billions allows not customers deployed, about strength our that. And of we data, something algorithm. just

part the over hand second the Beth. For question, I'll it of to

the you, in on continue Barak. cloud have respect and Yes. year, expectation do With to full-year a XX% Thank this we remain we currency cloud revenue. growth growth that the and to in expect constant our committed

at so higher currency, we than growth cloud seen year-over-year. this have cloud the at far XX% look you constant growth our or year If

our look and in and we course, to the our to is forward see customer that ahead. thriving. continue business Of confident base remain healthy opportunities We and

the yes, therefore, reiterating XX%. are we so And

I on That's things. you. just the helpful follow up wanted side to actually Thank Barak flow of Beth. and cash

conversion years transition the cash EBITDA about or are flow Over thinking how free free cloud kind headwind of to now really, And of rate the you model as recurring to over flow? understand here, next it's trying couple expect cash revenue. of when abate to is XX% you

here start should the headwind for next that So to years of you over couple now? guys stop

increase pronounced seen actually business. this year absolutely. in it already deals cash And Yes, think transition point, happening our an already more in in lot from What you've your flows. of the to in we've making I duration-based a predominantly that is more is cloud the seen seen Actimize we've

business, which duration-based timing So of these in past, more of we on are to transition additional is relative now this and that the also we've play, coming had the creates the seen what shift deals the in cash we of part But seeing already to of top cloud. we've cloud future. in into that the the a significant difference also expect recognition

deals. premise those payment duration-based in accelerated is basis happening to more relative as that that a faster So actually and happens,

you even will start to it see So out.

increase if with expect next year, growth along see into we look our will we business. flow forward in expected you generation therefore, is so cash -- And to our that the

Thanks guys.

you. Thank

you. Thank

with question. Please proceed Morgan line Our the next Meta of question from your Marshall comes with Stanley.

thanks. Great,

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Barak little then the for in And a Meta. can and question, Thanks start bit. maybe I'll chime

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constantly We out our work with both to there. customers prospects and the

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Thank you.

Oppenheimer. proceed next with with the Tim of Please Horan Our question. comes your from line question

bit your Thanks product bit maybe the the now? modules? are more a lot. guys. of same what existing color cloud us for using even of And on the a than or them digital percentage give a little using what AI Can value-added and customers percentage Thanks other are you more modules maybe little

question. thank Beth think you -- I So the for

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our converting So customer base. before it's most of

I customers number question say, amount to of your it putting a cloud. would to our So to almost, small converted the without a very

there is opportunity there. tremendous So

already, certain or them winning of the Many new of the or the a deals actually, rate the attachment spoke say is next coming about I before digital the of not of would digital, about in even automation so with of that this long to growth about just cloud that tremendous it already components we fuel a a majority is the how opportunity. is It's have the digital and are have of components. seven we very, we the the to AI our terms in very here, In of years. how share current of regardless of the us what in many And base AI. new opportunity many and customer are level it's what -- gives channels. is interaction attach runway large But the covering I automation, with digital amount rate, the deals, five the very, also

what some much of when how they bit can those those XX different and improvements they you And from When little a XX color to save customers type productivity us give you seeing? you're on bill of can mentioned maybe have suppliers. you, their more go monthly

service is to that multiple customer whole last are and NICE, question. great technology CX months it myself in are moving engaged to to few It's them that their comes to different stack -- and attended currently us a the we business I, diagrams. CIOs are what shocking -- meeting when managing executives as provide meetings asked provide and these they a

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Thank you.

Thank you.

further I'd time. comments. for turn like Mr. We to at the this over no closing have floor Eilam questions to

you, and today, a Thank for joining everyone, day. nice have us Thank you.

teleconference. today's concludes This

disconnect a Thank lines day. for your and time. at wonderful have may You your this you participation