Latest news with #CXAI
Business Insider
24-05-2025
- Business
- Business Insider
Maxim Group Reaffirms Their Buy Rating on CXApp (CXAI)
Maxim Group analyst Jack Vander Aarde reiterated a Buy rating on CXApp (CXAI – Research Report) yesterday. The company's shares opened today at $1.02. Confident Investing Starts Here: Easily unpack a company's performance with TipRanks' new KPI Data for smart investment decisions Receive undervalued, market resilient stocks right to your inbox with TipRanks' Smart Value Newsletter Vander Aarde covers the Technology sector, focusing on stocks such as Turtle Beach, Alarm, and AmpliTech Group. According to TipRanks, Vander Aarde has an average return of 1.6% and a 30.11% success rate on recommended stocks. CXApp has an analyst consensus of Moderate Buy.
Yahoo
21-05-2025
- Business
- Yahoo
Q1 2025 CXApp Inc Earnings Call
Khurram Sheikh; Chairman of the Board, Chief Executive Officer, Founder, Interim Chief Financial Officer; CXApp Inc Joy Mbanugo; Chief Financial Officer; CXApp Inc Operator Greetings. Welcome to the CXApp first-quarter 2025 earnings call. (Operator Instructions) Please note, this conference is being recorded.I will now turn the conference over to your host, Khurram Sheikh, Chairman and CEO. You may begin. Khurram Sheikh Thank you, operator. Good afternoon, everybody. I'm joined by our CFO, Joy Mbanugo, as well on this call, and we are both excited to share with you our earnings for the first quarter of 2025. We will also provide an overall business update on our progress in shaping the future work and creating transformative employee experiences with our state-of-the-art CXAI, pronounced Sky, now, everyone should have access to our earnings PR announcement as well as the 10-Q that we are filing with the SEC. This information will also be found on our website or I'm going to go through the next couple of slides, which are the disclaimer slides, which you can read at your own Dear shareholders, the CXAI platform anchored on customer experience CX and artificial intelligence AI is the most advanced-technology solution transforming people, places and things in the workplace. We are solving the biggest problems in our industry post the pandemic, to return to office, RTO, and employee engagement. And as we've been saying since the start of the company post IPO that we are shaping the future start of 2025 has been very interesting. Technology giants like Amazon, Salesforce and Dell have called all employees or specific teams back to the office five days a week, which has reignited conversation about how and where people can best do their work. Even companies that don't have a five-day RTO plan, see their leadership wanting employees to spend more time Brin, Co-Founder of Google, said the company could lead the industry in artificial general intelligence, when machines match or become smarter than humans if employees just worked harder. He said in a memo that was viewed by the New York Times, I recommend being in the office at least every weekday. He added that 60 hours a week is the sweet spot of productivity and the registered employees who work on Gemini, Google's lineup of AI malls and leaders, we see firsthand that the workplace is undergoing one of the most significant transformations in decades. Hybrid work is in the trend, is the new operating model and the stakes are really high. And yet many organizations are still trying to manage it with legacy and disconnected systems. The reality is clear mandates alone won't bring employees back, spaces alone on foster collaboration, amenities alone won't guarantee engagement. The organizations that will thrive are those that we think the workplace experience fundamentally and holistically to meet new expectations and business leaders like Amazon CEO, Andy Jassy, say that in-office work offers a level of energy, collaboration and speed that is missing when employees work from home. Executives that Dell echoed this in a memo calling all sales staff back to the office full-time stadium. All data shows that sales teams are more productive in on-site. Similarly, although leadership in Microsoft and Google have ruled out five-day RTO mandate anytime soon, the productivity caveat is hard to ignore. In a hybrid world, yesterday solutions create today's rooms sit empty while desk neighborhoods overflow and no one knows why, underutilized spaces. Leaders lacked real-time visibility into how people work, collaborate and engage disconnected leadership. Without intuitive, seamless experiences, employees feel friction, leading to disengagement, quiet creating or attrition, employee frustration. And the root of it is a lack of actionable can't measure what we can't see. Leader need systems that don't just connect devices, they need to connect people to meaningful experiences using intelligent insights to optimize space based on real user patterns personalize the employee journey in real time, anticipate needs instead of reacting to that's what CXAI does, and we do it with Agentic AI. So we are CXAI, we're shaping the future of work, and we're excited to share with you the progress we made in our I'll go to the next slide to talk about the company. I do that every quarter because I want to make sure we give you updates that allow you to see what the progress we're making. And there are a lot of common things to. We are still headquartered in San Francisco Bay Area, were regional tech hubs globally. The global presence and diversity of experience gives us a leading edge as we shape the future of work the 70-plus team members of CXAI more than 70% are engineers, and we have doubled the staff in Silicon Valley focused on building Agentic AI solutions and maintaining our technology and product leadership. We believe the employees at the center of this multibillion-dollar growing workplace experiences market, and we are creating a new category in software employee CXAI platform is based on 39 filed patents with 17 of them already granted. This substantial intellectual property not only establishes our companies the technological front runner, but also secures our position as the pioneer in the industry. We have two new patents published this quarter. Both are tied to spatial intelligence, which we'll talk about later as we are investing in that technology. We're proud to have some of the largest logos of the world as our customers that are the leading edge of the employee experience transformation. And our focus is the technology. The technology is the transformation of the key differentiators of our business is that we have strong security and compliance credentials globally. We have both ISO 27001 and SOC2 compliance certifications. And that is the reason why you see so many logos from regulated industries. They use CXAI because they know they can trust us with their data and their enterprise security I mentioned earlier, we have a global team. The team is located in the Bay Area, in Canada, Toronto, and in Manila with other contracted workers globally. And the reason for that is also to leverage the fact that we are deploying right now in with the small scale we're at in 200-plus cities in 50-plus countries in 5 continents. That gives us the diversity of experiences and relationships as well as users and the users is a key part of this equation as we move also, in the last year, built a culture of CXAI that innovation focused with three core values, purpose, passion and positivity. We are passionate about solving the big problem in the future work using AI, and we are super positive about creating a new paradigm of digital transformation of the enterprise focused on employee experiences. Our large enterprise customers are mainly divided to the following top five verticals: financial services, technology, media and entertainment, health care and consumer. We are proud to have some of the largest logos on the world as our customers that are the leading edge of workplace when you talk to our clients, they're all at the C level, they are CIOs, their head of workplace experiences, they're CROs and some of them are actually the CEOs of these companies have taken upon themselves to drive this transformation. So we're super excited to work with them. And these customers are sophisticated buy the technology solutions and do not compromise on quality, performance, security, reliability, scalability and actually the technology road as I think about 2025 and we, the management team and the Board, sat to build our 2025 plan, we said what are the top three priorities for 2025. And we've got a lot on our plate, a lot of things we can do better, but the one most important thing is customer success. And customer success is not just about getting customer contracts, but really about user engagement and adoption. We see that we are focused on the gain the life of user as these large clients and how those user experiences will make them more productive, save time and engage with their fellow for us, we're working on great features that are must-have features. We already have a lot of them in place, but we're constantly evolving those -- that technology road map. And more importantly, we're getting this immersive engagement with these employees who want to use CXAI every day, all the time on all the things that matter for their how do you make that all happen? Well, there's a lot of solutions out there in the marketplace. They have not been successful and mentioned at the start about the disconnected systems, but we're building an Agentic AI solution. The Agentic AI is going to be the way humans interact and collaborate with AI is a dramatic leap forward with the Agentic AI. The Agentic AI system understands what the goal or vision of the user is and the context of the problem they are trying to solve and then it takes access to solve the problem versus just assistance, design thinking into the journey of a user or drive to gain the life of user into actionable that's what we're doing. We're building automated workflows. You'll see some examples that are show today of some of the progress we made. We saw it in the last quarter when I showed you the Agentic booking example. And more importantly, we're trying to build a platform that becomes a trusted adviser for our customers. And our customers are not just our large enterprise, it is the end user, the employees of these large last but not least, the big differentiation that we provide is spatial intelligence, providing those contextual insights using our 2D and 3D technologies as well as our AI-based application platform to allow for AI-powered action and predictable outcomes. It's really focused on analytics that will provide more value to the end from a big picture, when we think about 2025, we focus the engineering team on driving these key initiatives, technology lifters and ultimately, our sales and customer success team are driving that user adoption and user engagement, which we think is going to make this product so sticky that will be indispensable for the let me talk about what are those employee experiences and what makes it really distinguished. So when we think about employee experiences, the first thing that comes to mind is what is the platform that you built and how you built it, right? And the CXAI platform, as we've talked about, is AI native is the first mobile and cloud-based technology platform in this space. We've thought about it from the end user is not just an application but a platform and we think about the three different pillars that make up the CXAI pillar is the CXAI Apps. The CXAI Apps are based on Android, iOS and web applications, but we're building them to be not only multi-OS, but also multi-device all the way from your watch to your smartphone, to your laptop, to your desktop and also need two kiosks and larger devices. and we've got it now in place with a lot of our in order to make this application intelligent and smart, we got to have a rule engine. We got to have something that prides content and price access control and decision, that's the brains of our system. That's the CXAI BTS. And then coming out of this are all the great insights and analytics and recommendation that CXAI VU our analytics platform. So this trifecta create that end-to-end platform that provides the best-in-class employee with our partnership with our cloud providers, as you know, we've had a great relationship with Google for a number of years. We are a strategic partner at Google, where we have signed agreements with both Microsoft and Azure platform, which we've deployed and with AWS. We were planning to work with them on a deployment, but we are multi-cloud, and we are enabling the capability from the device to the cloud for our our clients use us as the, you could call it the Intel Inside, for their application or you could call it the apple outside, but we are providing the end-to-end application that our clients use, but they're using their own branding, their own content to drive it, but with inside trying the brains behind the with that platform of mind, you can say, well, you've got a great technology, what problem are you solving? And so I'm going to share a slide that our friends at Gartner put together, they did an assessment of what is the motivation to return to office. And return to office is one of the biggest issues of our century, I would say, every single enterprise globally is looking to find solutions for the digital workplace and workforce. Both leaders of enterprises and employees are navigating unchartered waters related to hybrid work in the post-pandemic and encountering significant C-Suite want employees back in the office to be more productive, engaged in the corporate environment and better utilize the workspace. Employees, on the other hand, want flexibility to work from their home or the office and have a high expectation when it comes to having easy access to their workplace tools, finding information and ability to collaborate with peers from if you look at this chart, it's kind of obvious that employed -- why do employees want to come back? They're not just coming back because it is a mandate, they're coming back because they want to reconnect with their -- and collaborate with their fellow employees, they want to have face time with their senior leaders, they want to be able to connect with their environment and their colleagues. That is the real reason why they want to come back or they have a desire to come back. And we need a solution to that. And that is where we have built this end-to-end platform.I'm going to give you a little bit more detail on it on the left, you'll see the immersive UI that we have that has one click away to make an action, you have a very immersive mapping technology capability that allows you to connect inside the building to any place, any location, navigate as well as click on to book things and drive end-to-end, we provide this full solution. The key part of the application is all these integrations that we do with the enterprise tools and services into one application platform, allowing employees one seamless experience to connect to anything they do in their also do that with 2D and 3D mapping technologies enhanced by AI to put intelligent interaction with space and things. And like I mentioned, the CXAI VU is the experiential analytics that provide you insight but what needs to get done and how and how would you make it then finally, to top it off, is gender automating all these workflows to provide with natural language command a trustful domain, so you can provide any question you have, you get an answer. Any action you want, you get it done any meeting you want to change? Any booking you want to redo anything you want to connect with multiple folks from outside inside the organization, we're going to do that with Agentic AI. The first three pillars are deployed with global customers today. I'm proud to say we are the best in I'm more excited about the Agentic AI because that's going to be groundbreaking and transformational to the whole workplace. So let me talk about what do people do when they come back to the office. What are the main things they're like doing? And this is another Gartner chart, so it's not just from what we see, we'll show you what we see. But this is what Gartner collected the data from lots of different vendors in the space and as well as the biggest issue when you want to come back to the office is, can I find a space where I can sit? Can I get a desk? Can I get a meeting room? Can I connect with all the people that are in the office? Can I do any coordination, collaboration? And with AI can I have a virtual assistant that can actually help me get my stuff done?All those things have an increased demand and as I said earlier, with the start of 2025, there has been a renewed interest because there are mandates that are driving it, but also I think there's interest among the younger generation to be more social, to be more connected with their I'm going to show you so what do we see at CXAI. We've been working with all these clients. We have more than 1 million-plus users globally out there that use our product. And when you think about -- actually, I skipped to slide early, let me go back to slide 12 here that talks about space utilization biggest problem is space, right, initially in these markets because you got to think about how you're going to utilize the space. So this example shows you gas bookings. We can show you how test were booked, whether they were booked in advance, how far in advance would the booked and what is the booking ratio and what is the cancellation ratio, a lot of interesting statistics and then the insights that come out of very obvious, people are coming mostly on Tuesdays, Wednesdays, and Thursdays, and Monday is kind of coming back a little bit, but mostly Tuesday, Wednesday, and Thursday and it drops off very quickly on a Friday. But then it's interesting to see that even with this planning capabilities, there's a lot of just-in-time booking, like people are booking within the hour to get a desk or a room. And we're being able to connect with their fellow employees or with a set of just having that mobile connectivity, and this is why our CXAI Kiosk having at the front of your office so you can walk in, click one button and get a desk, click a button get a room and click a button and know where your colleagues are at. It is immensely useful and this is where a lot of people are trying to use that technology and capability as they build these return to office initiative because without that technology, people are lost, people don't know what to do and people get this is super interesting. And as you can see the data here, there's a lot of activity happening, a lot of usage happening with application because people do need spaces and spaces is the primary factor for this market initially. But as people get used to being in the space, working with the space, they also need to connect with their fellow employees, also when you connect with their internal systems and be able to be one of the key features. This is a chart showing the usage of our product, they're different days of different applications. Where do they go on the app, you'll see a small purple knob here, so in colleague booking which is become immensely useful now because if I coming the office next week on a Tuesday, it'd be great that my friend Jack is there, and my other mentor, John is going to be there as well. And so I will actually try to be there. So colleague booking and visibility has become a key feature that we've been able across our client base is super successful, super useful. You've got to enable your privacy, but a lot of people enable that and allow you to see their calendar and where they those kind of features are driving more app utilization and usage analytics. It also shows behavior, and we can show behavior, app interaction not only on a daily basis but on an hourly basis. And every single interaction you do we can document it; we just show the gain the life of user as they progress through their work can also show you location based, as you can show on the lower chart, people in one part of the world are really active, where in the other part of the world people are not active on the app. There may be reasons because they need desk booking more or they don't have a need for desk booking or they don't have a need for the app itself. But our job is to provide the tool kit and capability, and we find that different use cases that are useful for different this one, I want to give you a flavor of the progress we're making in terms of having the technology available, but also the insights now and collecting the data has been super useful for us because this drives our product road map. This drives our innovation cycle. And this drives actually our engagement with our clients. They love the fact that we have these data sources and fusion of the data of what they're seeing from the employees, but also from the things and the places it prices really amazing I'll show you an example what we can do with AI now with that. So the next one, this is all great charts, great data, but what could I do more with this with the AI? What could find inside that will be mind boggling? Well, I'm going to give you an example here of our CXAI VU smart expert, and it's going to show you that as an example, I want to -- I don't want to go through 500 charts. I would like to ask a question.I'm the person responsible for return to office. I want to see the booking counts before and after the 4-day RTO policy came in or I am a space of person. I want to know how many desks are utilized? And which desks were utilized more than others over the past three months? And if I'm the HR person, I want to see how frequently people are using the app or doing what kind of sessions they're doing, what kind of things they're interested then if I'm figuring out what office space needs to be in different locations. I want to see what the patterns are. So a lot of questions in my mind, right? And I don't want to go through a big BI tool that spend hours going through data sets and then thinking on what it is. I want to ask a question. So we're going to show how you ask a question, get an answer. I probably made a slow so that we can move -- we can show the here, you'll see a chart that shows bookings. It looks flat across the whole timeframe, but insights are inside. The insights are what is changing? Well, in this case, desk bookings were significantly higher than room bookings and parking reservations were even higher. So it shows a strong preference for individual what desks are more utilized than others? And then can you show me some regional preferences, location preferences, we can show you heat map. So a heat map that shows that people would like to be their satellite or would like to be in a quite zone or where they would think that amenities are close by -- so those are special insights with our technology and our capability and our application platform, we can provide those insights, and that's what gets people very exciting. Example is the 4T policy influencing booking we can figure out what days, bookings were higher and where days of people who are coming in or not. What are the peak days. As I mentioned earlier, we see Tuesdays, Wednesdays, and Thursdays are the highest, but then there's more insights underneath that. But more importantly, once you have all this data and you see all these interesting insights, you can also then do forecasting and start providing regular updates and regular models to do predictive analytics. That's the holy grail we fuel because with these data sets, you can actually organize not only your organization with your culture. And that's why we're really excited about using this capability to enhance the user let me talk about Agentic AI. And as we said earlier, Agentic AI has been our focus from the start. We're not about providing AI just for the sake of AI, but really collaborative AI agents that allow you to take multiple workflows and provide really amazing insights. So to achieve this is a Gartner chart, by the way, that shows how Agentic AI is progressing. As you know, it used to be AI assistants and co-pilots. but now we talked about collaborative AI agents that take multiple workflows and allow them to come together to actionable to provide this level of autonomous decision-making and action, Agentic AI relies on a complex ensemble of different machine-learning, natural-language-processing and automation technologies. And Agentic AI focus on completing actions and outcomes versus just assistance like a trusted advisor that is proactive, insightful in assessing I'm going to issue an example. Last quarter, I showed you the Agentic booking. We've been working on lots of different use cases. I'm going to show you an example of Agentic workshop. A lot of our clients are talking about having to set up events or workshops within their community or their office environment and they have to do a lot of like to not only be able to book a place, find the right people to come, but also invite visitors as well as regular employees and then also order food. How can you do that and I'm going to show you how we can do that in a New York minute here. So as you can see, in a very short period of time, you could do multiple workflows coming together. This means that multiple agents are collaborating together. But more importantly, you've got what you wanted. You wanted a meeting set up with your CEO. You didn't have to give your could find who the CEO is. You could find who the right contact would be invited to the meeting and then you wanted to not only host them, find a room that accommodate them, but also order refreshments and make sure that it's tied to their preferences. So you could look at their profiles and look at what food process they have and then provide the necessary arrangements and be all done within a minute and they will all get notifications on their e-mail in the even if they want navigation, we could provide that. I don't want to add too many workflows. But the idea is we make complex things very simple. And these things happen every day at every enterprise where I go and meet customers, they can't get meetings done on schedule. They can't get things organized. It takes a lot of time and effort and there's a lot of frustration. With this Agentic solution, we're going to minimize that. We're going to make it seamless and easy to do. We do it well today with our apps, but we're now going to make it even, even super easy and super productive with these genetic now I'm going to talk about our Q1 product and customer highlights, and then we'll have Joy walk us through the financials. So Q1, the start of 2025 has been an interesting one, as I said earlier, RTO is a big theme with a lot of clients as well as a lot of new clients that we're working we hit all our business objectives for the Q1. We have three large Fortune 500 expansion renewals. Expansion renewals means they actually signed up for more than the last year's renewal and are expanding not only in campuses, but more importantly in new features and capabilities are the things that I talked about, engagement, community, getting mobile aberration or finding mission-critical things like emerging notifications or critical notifications we call there's a lot of new capabilities that people are signing up to and they're seeing the adoption uses. That's where they expanded. So we're excited about that expansion this quarter. We also talked about last quarter the 1.5 platform that was deployed with a large financial customer. That customer has actually now deployed this with the full suite of products, including CXAI VU and CXAI BTS and also has done a we're excited that they have liked the technology platform deployed in the first market and are launching multiple markets with new capabilities. Last quarter, I had mentioned about the single cold-based CXAI 1.0. That is now available to all our clients. But more importantly, this quarter, we are now -- we have implemented CXAI VU analytics for all those clients. So all the data sets I showed you the statistics, every single open of client that capability now in all of their that's a big accomplishment from the engineering team and also from our customer success team that's working closely with those clients. Sky Kiosk is a game changer. As I mentioned earlier, we had our first deployment in Silicon Valley with a large technology company that really wanted to implement an RTO policy and they said, hey, in order to get employees engaged in using the tools and capabilities, let's put it in the front office, front lobby. They walk in the door, they can see where rooms are available, we're desks are available, where people are available and one click away from an action and get it on their mobile done that very elegantly with a solution that's web-based, that can be connected at any touchscreen device. And now after the first successful deployment, we're getting multiple engagement from all our clients globally. And so this is going to be a big expansion opportunity as we roll out CXAI Kiosk. And I also mentioned last quarter about CXAI localization, which was really using a partnership with Google to do translation for our apps as well as other localization features, and we deployed that with a large entertainment customer. And now we're planning to deploy again with CXAI 1.0 with all our existing clients.I think this is a great feature because everybody wants localize information, localized insights, and so that's been super successful, too. So all in all, I would say, from a product customer, we are making a lot of great progress. And the Agentic AI is in trials with the first internally. We're trialing it ourselves in our labs here in San Ramon and Palo Alto, and then we're going to be doing more and more trials with our clients moving with that, I'm going to move to the results for two I'm going to ask our CFO, Joy, to kick over and share with the results. Over to you Joy. Joy Mbanugo Thank you, Khurram. If we could go to the next slide, I'll walk us through our Q1 results, starting with headline metrics, then dive into operational details, dive into our income statement and conclude with our overall liquidity position, which is pretty strong. We're happy to report. While we have seen some expected pressures, the underlying improvement in our margins and continued cost discipline are driving meaningful Khurram, as you mentioned in the previous slide, we did have three large logos that increased their expansion and pushed ARR up 130% of the original contract value, which is clear validation of our platform stickiness and our team's focus on customer success. These include Fortune 500 customers in financial services and tech verticals who have expanded their footprint with this and continue to expand their footprint with revenue, a huge increase here from Q1 2024, where we're at 87%, up to 99%, and -- which shows our overall commitment to recurring revenue, not certain that it will be this high every quarter, but we do expect to concede like we did in previous quarters, a continued increase in subscription revenue compared to onetime gross margin, an increase in gross margin and just our overall discipline in costs and increased up to 88% from 82% from Q1 2024. Cash OpEx, we reduced cash operating expenses by $300,000 year over year despite absorbing onetime costs, which will go into and to the next slide. And then we're happy to report our earnings per share has increased from negative $0.34 up to negative $0.08 from Q1 2024. So overall, just great highlights for Q1 we can move to the next slide and dive into a little bit more detail on our income statement. So we did have a decline in revenue, which we want to talk about because I know we may get some questions on this. The decline mainly came from two of our large customers who traditionally would have been Q1 renewals, but we pushed them to Q4 renewal. So if you remember, we had a pretty steady state and solid Q4. And so those two -- that increase of that solidness that you saw in Q4 were from those two clients that renewed in Q4 instead of Q1. So this is a timing shift and not a decline necessarily in anything are seeing resilience in gross profit despite lower revenue, continue to have 80% margins. As we've discussed, our partnership with cloud, Google Cloud, he's been looking to reduce our cloud costs and we saved $177,000 year over year. And again, the subscription-based revenue increased our operating expenses increased a little bit, and we'll dive into that. So research and development declined slightly. Marketing year over year had a steep decline, some of that sales and marketing sign personnel and other spend as we continue to focus on R&D in just developing the product in Agentic AI. We did have an increase in G&A year over year, but that was related to one-time costs for professional services fees and new hires. Our operating loss continues to narrow and it widened a little bit, but remember, this is without $600,000 revenue. So this just shows our cost structure is holding firm during this let's move to the next slide, where we'll talk a little bit about our liquidity and our overall cash position because I don't have questions that came up in our last earnings call. So overall, net cash used in operating expenses decreased from $979,000 from $2.7 million in Q4 2024 and this just reflects our tighter control on working capital and our discipline as we lower overall cash I'd like to discuss liquidity. Our cash balance, as you'll see, because the -- our Q was just released, you can go have a look. Our cash balance, we ended the quarter at $3.98 million, but what you'll see in the subsequent events is that we drew on -- we entered into a new note -- a new convertible note where we have access to $20 million and on April 8, we drew down about $4 million of that $20 million. And so with just that in place in the previous convertible note that we entered into last year, we have $20 million -- access to $20 million. And so we have more than 18 months of liquidity at our current operating run at least 18 months, if not we also -- with our filing today and our filing of the K have become S3 eligible. So overall, these results reflect our focus on three strategic priorities that Khurram laid out earlier, our customer success, deeper AI adoption and analytics usage and just the stickiness of some of our product capabilities and new features and new offerings like our renewal, every cost decision and every platform investment is mapped to these goals. To tie it all together, one, revenue decline was timing related and not structural. Our margins hit high records through operational rigor, which will continue throughout the year, we continue to keep costs under control despite onetime expense hit and our cash position is strong and we have multiple levers to pull to continue with that, I'll turn it over to Khurram. And if there are any questions, put them in the chat, and we'll answer. Khurram Sheikh Thank you, Joy. So let's just summarize why CXAI? And I think the first piece is, I'll talk about the financial performance, too, because I think we have hit a corner here where we're now moving from the traditional old model to the new model. But first of all, I want to be clear with everybody CXAI is more than an app. It's a platform to create workplaces that are as dynamic, versatile and remarkable as the people that have it them. We're not just enhancing how work gets done, reimagining it for a brighter, more connected CXAI, you just don't build a work for you culture with a culture, shape a community and architect the future Because at the end of the day, without the employees, there is no work, no office, no culture. Let's put the employee first together and watch everything else falls into place. That's been our focus. And now with our CXAI platform solution anchored in AI, we're poised to provide that capability to all our when you think about our business, I think it's amazing that we've gone from, I think at some point, we were like when we first acquired the business, it was 70% or less recurring revenue. This quarter, we hit 99%, which is kind of amazing. We weren't targeting to be 99%, but it's just the fact that both of our customer success teams as well as our engineering team have done a great job of creating the products that are more recurring revenue and our customers have adopted them instead of getting onetime professional fees, they're like, yes, we'll take that feature because we want it every year, and we want to be providing you advanced capabilities on I think that's a real positive and then as Joy mentioned, with the cost structure improvement is because of our partnership with Google Cloud, where we can scale very profitably on this because as we go with AI, we go with more data sets and others, we need a low-cost solution that scales and this is where you're seeing the benefit of that gross margins going from, I think, 78% at some point, 1.5 years ago, now all the way to 88%.And along with that, we have great clients that love working with us, and we're working with CIOs at all these companies as well as the Head of Workplace experiences, and they're looking to move the needle in a direction where AI becomes the key enabler for all these different we're excited working with our clients. I think we're design thinking with them on all these new applications, and you're going to see a lot of new applications coming out in the coming months. And our business is global, although we sell only in the U.S., we're deployed globally. We have no impact to tariffs or other issues, but we are deployed I want to rest assured that we're not impacted by any of the situation that's happening in the financial markets right now, but we are naturally cognizant of the fact that enterprises are looking to cut their spend and be more productive, and we enable that. We enable an ROI that lets them provide a solution that is cost effective, but more importantly, impactful across the whole that's why there's not a demand pull here in terms of people are looking for solutions there. Today, we had our Annual Shareholder Meeting. I'm excited to announce that two of our directors, Camillo Martino and Shanti Priya got re-elected. We're really blessed to have a really strong Board that has been supporting this effort for the last couple of years, and they come together as innovators as pioneers, but also more importantly, at mentors to help me and the management team scale the company. So we're really excited about having that camaraderie and having that push and pull of last but not least, we're in Silicon Valley, we're working with the biggest disruptors in the market. We have told you about our Google partnership. It not only enables us on the cost side for our cloud management, but also in terms of innovation side in getting access to the latest tools and technologies. I mentioned to you guys earlier that we are a strategic partner I know today, Google announced a number of new AI tools in Gemini and other capabilities. We have access to all those tools. We're first in line to get access to those and so we're partnering with them. When you think about CXAI VU View, when you think about Agentic AI, we are definitely partnering with Google and their capabilities. We're not building everything from scratch, but we are building something that's differentiated unique that we believe nobody else in the market has and that's called employee experiences. We're creating a new software category. We're really excited. Khurram Sheikh And with that, I'd open up to any questions you have. But I want to just end by saying we are really destined for lot of success here because the opportunity is huge. There's a lot of fragmented competitors out there, and we have a singular vision to create the best employee experience for all Joy, do we have any questions from the webcast? Joy Mbanugo We do and I'll take a couple of them. So on some of these can be -- some of the answers to these questions can be found in the 10-K -- sorry, 10-Q, but what is the current shares outstanding? It's on our balance sheet; it's about $19.8 a question, how much total debt is currently outstanding when including the $4 million draw on Avondale on April 8? I think if we take all of that together with our previous note in our warrants, I think we're at about $10 million, but I'm doing it off the top of my another question, will you guys ever plan on -- I think the question is, will we share who our clients are? I think we've done some case studies in the past, probably prior to me joining and to the extent that we can. But as you can imagine, with some of the return to office Snap and other things going on, some of our clients value their confidentiality. But to the extent we can in the future, we absolutely will. Khurram Sheikh Joy, you want to jump in there. Actually, on CXApp -- Joy I just want to jump in there. On you can see those clients. So if you go on there, I'm proud of all of them, so I don't want to take one name on the other, but most of our clients are on the website, and you can easily look at them up. But they're in five categories that we talk about in technology, in entertainment, in financial services, in health care and in have some of the biggest logos in the world. They're all on our website, and we're collaborating with them. But some of them, as Joy said, are careful about what we share about what they're doing for obvious reasons, but they're all excited to be using the CXAI platform. Joy Mbanugo Thanks, Khurram. One more -- we have two more questions. One I'll answer and then one, I'll give over to you, Khurram. After from Maxim after soft Q1 revenue results, do you expect total revenue growth or subscription revenue growth year-over-year in '25 versus ' you know, we're not giving any official guidance. So that's the aim, but don't want to give any official guidance at the moment. And then our last. Khurram Sheikh Yes. The only thing I would add to that, Joy, is just to add to that is that we are driven by ARR growth, right? That's our main initiative, and that's why you're seeing the focus on recurring repeatable multiyear contracts. Our strategy is working out. There is some short-term revenue disruption to I do think that that is the right thing to do for a SaaS AI-based company because it provides a stickiness that Joy mentioned, it provides the road map, and these customers do not want to go change out every month. They want to have a long-term plan for scale up, right? They experiment first with a couple of sites. We've seen a lot of them come to us after they go to a competitor and find out, hey, it's not exactly what you told me. But we are retaining large clients who believe in the vision of employee experiences globally and finding those genetic solution. I think those are the customers that I am most proud of I don't want to be involved with customers who are just looking for a point not a planning solution company; we're a platform company. And so I think that's the differentiation we have and as we move forward, recurring revenue is our focus. So as you see the growth, our gross nature revenue, actually, there will be revenue recognition around that, but we can't assume -- we're not motivated by just getting onetime revenue. We're more award by getting recurring repeatable revenue. Joy Mbanugo Yes. And we have one more question. I think you answered the second half of the question, but three large customer renewals. Does this include the six renewals mentioned in 2024, I'm assuming the question is coming from Q4 of 2024. And the answer is no, these are new renewals. So when we talk about renewals in any period, we're talking about renewals in that particular period. So no, this is three in addition to the six that we mentioned last then the question on subscription revenue, Khurram already answered that question. Khurram Sheikh Yes. No. So just to be clear, as Joy mentioned, some of those clients that renewed in Q4, in 2024, they actually were delayed in their renewals. So that's why we had to book them in Q1. This year, they were on schedule and they got it done in those six renewals happened in Q4. These are three additional renewals that were scheduled for Q1 and are done on schedule, right? And as we said, they've also been expanding, and so they're excited about expanding with us. So yes, these are independent. And as you can see, with budget cycles, a lot of these companies have fiscal quarters, some have end of the year quarter, so we have to deal with large enterprises that actually want to work with us, but they have to work with their that's why this gap that you see the revenue is really because of the timing of the renewal, nothing to do with revenue shortfall us. But I think that as we move forward, we're going to get a regular stream as they scale up, and our goal is to really scale them up to the next level in terms of expansion and the I think this is where as we get the first too permits out, they want to go from 2 sites to 100 sites. And for a large company like any of these enterprises going to 100 sites is a huge endeavor and for us also is a huge we're planning them now so that we can do renewals hopefully in one quarter. So we don't have renewals in multiple quarters and then we can really get this thing scaled up, so we have repeatability and then we can add new features as they renew. So I think this is the change out from the old model to the new model. Joy Mbanugo So these are all the questions. Khurram Sheikh Right. Any more questions, Joy? Or do you think this is enough for us? Joy Mbanugo That's enough. Khurram Sheikh Yes. Okay. Great. Well, I want to close by saying thank you, everybody, who's waited for us for the Annual Shareholders' Meeting. We really appreciate it. We've got all of the resolutions done, which is a good testament of the conference the investors have in us. and the Board has and the management team here to deliver. We're excited about the opportunity.I will repeat that we are transforming this industry and in transformation, disruption happens. So we're ready for disruption. We're ready to make it happen. And we're super excited that our customers are believing in us, and I'm more excited that our employees are really delivering on all four cylinders and all these look forward to sharing with you the next quarter results. In the meantime, you will be hearing from us as you make advancements in our product development. Thank you so much. Have a great evening. Operator Thank you. This concludes today's conference, and you may disconnect your lines at this time. Thank you for your participation. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
15-05-2025
- Business
- Yahoo
NICE Reports 12% Year-Over-Year Cloud Revenue Growth for the First Quarter 2025 and Raises Full-Year 2025 EPS Guidance
Double-digit year-over-year EPS growth Cash from operations was a quarterly record of $285 million and increased 12% year over year Company announces new $500 million share repurchase program HOBOKEN, N.J., May 15, 2025--(BUSINESS WIRE)--NICE (NASDAQ: NICE) today announced results for the first quarter ended March 31, 2025, as compared to the corresponding periods of the previous year. First Quarter 2025 Financial Highlights GAAP Non-GAAP Total revenue was $700.2 million and increased 6% Total revenue was $700.2 million and increased 6% Cloud revenue was $526.3 million and increased 12% Cloud revenue was $526.3 million and increased 12% Operating income was $148.2 million and increased 22% Operating income was $213.6 million and increased 7% Operating margin was 21.2% compared to 18.4% last year Operating margin was 30.5% compared to 30.3% last year Diluted EPS was $2.01 and increased 26% Diluted EPS was $2.87 and increased 11% Operating cash flow was $285.1 million and increased 12% "We're pleased to report another strong quarter. Cloud revenue grew 12% in the first quarter compared to the same period last year, powering continued profitability, including a further expansion in operating margin and a double-digit increase in earnings per share," said Scott Russell, CEO of NICE. "We also delivered record quarterly cash flow in Q1, with cash from operations rising to $285 million—a 12% year-over-year increase. Our industry-leading financial profile continues to differentiate us from competitors, giving us excellent financial flexibility to invest strategically to accelerate our long-term growth." Mr. Russell added, "We're operating in a rapidly evolving market, and AI is the catalyst driving this transformation. We're leading the way with our industry-defining AI platform, CXone Mpower. As organizations increasingly seek to leverage AI in their customer service operations, they're turning to our CX AI cloud platform. In fact, in the first quarter, our AI and self-service revenue increased 39% year over year — clear evidence of the value of our platform. We've moved beyond orchestrating interactions; we're enabling end-to-end automation from intent to resolution, powered by agentic AI embedded throughout the customer service journey." GAAP Financial Highlights for the First Quarter Ended March 31: Revenues:First quarter 2025 total revenues increased 6% year over year to $700.2 million compared to $659.3 million for the first quarter of 2024. Gross Profit:First quarter 2025 gross profit was $468.1 million compared to $436.6 million for the first quarter of 2024. First quarter 2025 gross margin was 66.9% compared to 66.2% for the first quarter of 2024. Operating Income:First quarter 2025 operating income increased 22% to $148.2 million compared to $121.4 million for the first quarter of 2024. First quarter 2025 operating margin was 21.2% compared to 18.4% for the first quarter of 2024. Net Income:First quarter 2025 net income increased 22% to $129.3 million compared to $106.4 million for the first quarter of 2024. First quarter 2025 net income margin was 18.5% compared to 16.1% for the first quarter of 2024. Fully Diluted Earnings Per Share:Fully diluted earnings per share for the first quarter of 2025 increased 26% to $2.01 compared to $1.60 in the first quarter of 2024. Cash Flow and Cash Balance:First quarter 2025 operating cash flow was $285.1 million and $252.3 million was used for share repurchases. As of March 31, 2025, total cash and cash equivalents, and short-term investments were $1,610.7 million. Our debt, was $459.2 million, resulting in net cash and investments of $1,151.5 million. Non-GAAP Financial Highlights for the First Quarter March 31: Revenues:First quarter 2025 total revenues increased 6% year over year to $700.2 million compared to $659.3 million for the first quarter of 2024. Gross Profit:First quarter 2025 non-GAAP gross profit increased to $489.2 million compared to $467.7 million for the first quarter of 2024. First quarter 2025 non-GAAP gross margin was 69.9% compared to 70.9% for the first quarter of 2024. Operating Income:First quarter 2025 non-GAAP operating income increased 7% to $213.6 million compared to $199.8 million for the first quarter of 2024. First quarter 2025 non-GAAP operating margin was 30.5% compared to 30.3% for the first quarter of 2024. Net Income:First quarter 2025 non-GAAP net income increased 8% to $185.0 million compared to $171.6 million for the first quarter of 2024. First quarter 2025 non-GAAP net income margin totaled 26.4% compared to 26.0% for the first quarter of 2024. Fully Diluted Earnings Per Share:First quarter 2025 non-GAAP fully diluted earnings per share increased 11% to $2.87 compared to $2.58 for the first quarter of 2024. Second Quarter and Full Year 2025 Guidance: Second-Quarter 2025:Second-quarter 2025 non-GAAP total revenue is expected to be in a range of $709 million to $719 million, representing 7% year over year growth at the midpoint. Second-quarter 2025 non-GAAP fully diluted earnings per share is expected to be in a range of $2.93 to $3.03, representing 13% year over year growth at the midpoint. Full-Year 2025:The Company reiterated full-year 2025 non-GAAP total revenue which is expected to be in a range of $2,918 million to $2,938 million, representing 7% year over year growth at the midpoint. The Company increased full-year 2025 non-GAAP fully diluted earnings per share which is expected to be in a range of $12.28 to $12.48, representing 11% year over year growth at the midpoint. Quarterly Results Conference Call NICE management will host its earnings conference call today, May 15, 2025, at 8:30 AM ET, 13:30 GMT, 15:30 Israel, to discuss the results and the company's outlook. A live webcast and replay will be available on the Investor Relations page of the Company's website. To access, please register by clicking here: Explanation of Non-GAAP measuresNon-GAAP financial measures are included in this press release. Non-GAAP financial measures consist of GAAP financial measures adjusted to exclude share-based compensation, amortization of acquired intangible assets, acquisition related and other expenses, amortization of discount on debt and the tax effect of the Non-GAAP adjustments. The Company believes that these Non-GAAP financial measures, used in conjunction with the corresponding GAAP measures, provide investors with useful supplemental information about the financial performance of our business. We believe Non-GAAP financial measures are useful to investors as a measure of the ongoing performance of our business. Our management regularly uses our supplemental Non-GAAP financial measures internally to understand, manage and evaluate our business and to make financial, strategic and operating decisions. These Non-GAAP measures are among the primary factors management uses in planning for and forecasting future periods. Our Non-GAAP financial measures are not meant to be considered in isolation or as a substitute for comparable GAAP measures and should be read only in conjunction with our consolidated financial statements prepared in accordance with GAAP. These Non-GAAP financial measures may differ materially from the Non-GAAP financial measures used by other companies. Reconciliation between results on a GAAP and Non-GAAP basis is provided in a table immediately following the Consolidated Statements of Income. The Company provides guidance only on a Non-GAAP basis. A reconciliation of guidance from a GAAP to Non-GAAP basis is not available due to the unpredictability and uncertainty associated with future events that would be reported in GAAP results and would require adjustments between GAAP and Non-GAAP financial measures, including the impact of future possible business acquisitions. Accordingly, a reconciliation of the guidance based on Non-GAAP financial measures to corresponding GAAP financial measures for future periods is not available without unreasonable effort. Company Announces New Share Buyback Program of $500 million: The Board of Directors has authorized an additional new $500 million share repurchase program. Repurchases under the program may be made from time to time using a variety of methods, which may include open market purchases, privately negotiated transactions or otherwise, all in accordance with U.S. securities laws and regulations, including Rule 10b-18 under the U.S. Securities Exchange Act of 1934, as amended (the "Exchange Act"). The Company may also, from time to time, enter into plans that are compliant with Rule 10b5-1 of the Exchange Act to facilitate repurchases of its shares under this authorization. The timing and total amount of share repurchases will depend upon business, economic and market conditions, corporate and regulatory requirements, prevailing share prices and other considerations. This program does not obligate the Company to acquire any particular amount of ordinary shares and the program may be extended, modified, suspended or discontinued at any time at the Company's discretion. The Company expects to fund repurchases with cash on hand and future cash generated from its operations. About NICEWith NICE (Nasdaq: NICE), it's never been easier for organizations of all sizes around the globe to create extraordinary customer experiences while meeting key business metrics. Featuring the world's #1 cloud native customer experience platform, CXone, NICE is a worldwide leader in AI-powered self-service and agent-assisted CX software for the contact center – and beyond. Over 25,000 organizations in more than 150 countries, including over 85 of the Fortune 100 companies, partner with NICE to transform - and elevate - every customer interaction. Trademark Note: NICE and the NICE logo are trademarks or registered trademarks of NICE. All other marks are trademarks of their respective owners. For a full list of NICE trademarks, please see: Forward-Looking StatementsThis press release contains forward-looking statements as that term is defined in the Private Securities Litigation Reform Act of 1995. In some cases, forward-looking statements may be identified by words such as "believe", "expect", "seek", "may", "will", "intend", "should", "project", "anticipate", "plan", and similar expressions. Forward-looking statements are based on the current beliefs, expectations and assumptions of the Company's management regarding the future of the Company's business, performance, future plans and strategies, projections, anticipated events and trends, the economic environment, and other future conditions. Examples of forward-looking statements include guidance regarding the Company's revenue and earnings and the growth of our cloud, analytics and artificial intelligence business. Forward looking statements are inherently subject to significant uncertainties, contingencies, and risks, including, economic, competitive and other factors, which are difficult to predict and many of which are beyond the control of management. The Company cautions that these statements are not guarantees of future performance, and investors should not place undue reliance on them. There are or will be important known and unknown factors and uncertainties that could cause actual results to differ materially from those expressed or implied in the forward-looking statements. These factors, include, but are not limited to, risks associated with changes in economic and business conditions, competition, successful execution of the Company's growth strategy, success and growth of the Company's cloud Software-as-a-Service business, difficulties in making additional acquisitions or effectively integrating acquired operations, products, technologies and personnel, the Company's dependency on third-party cloud computing platform providers, hosting facilities and service partners, rapid changes in technology and market requirements, the implementation of AI capabilities in certain products and services; decline in demand for the Company's products; inability to timely develop and introduce new technologies, products and applications, loss of market share, cyber security attacks or other security incidents, privacy concerns and legislation impacting the Company's business, changes in currency exchange rates and interest rates, the effects of additional tax liabilities resulting from our global operations, the effect of unexpected events or geo-political conditions, including those arising from political instability or armed conflict that may disrupt our business and the global economy, our ability to recruit and retain qualified personnel, the effect of newly enacted or modified laws, regulation or standards on the Company and our products, and various other factors and uncertainties discussed in our filings with the U.S. Securities and Exchange Commission (the "SEC"). You are encouraged to carefully review the section entitled "Risk Factors" in our latest Annual Report on Form 20-F and our other filings with the SEC for additional information regarding these and other factors and uncertainties that could affect our future performance. The forward-looking statements contained in this press release speak only as of the date hereof, and the Company undertakes no obligation to update or revise them, whether as a result of new information, future developments or otherwise, except as required by law. NICE LTD. AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS U.S. dollars in thousands March 31, December 31, 2025 2024 Unaudited Audited ASSETS CURRENT ASSETS: Cash and cash equivalents 469,532 $ 481,712 Short-term investments 1,141,145 1,139,996 Trade receivables 643,245 643,985 Prepaid expenses and other current assets 210,184 239,080 Total current assets 2,464,106 2,504,773 LONG-TERM ASSETS: Property and equipment, net 184,274 185,292 Deferred tax assets 239,537 219,232 Other intangible assets, net 211,432 231,346 Operating lease right-of-use assets 71,108 93,083 Goodwill 1,854,973 1,849,668 Prepaid expenses and other long-term assets 206,497 212,512 Total long-term assets 2,767,821 2,791,133 TOTAL ASSETS $ 5,231,927 $ 5,295,906 LIABILITIES AND SHAREHOLDERS' EQUITY CURRENT LIABILITIES: Trade payables $ 59,414 $ 110,603 Deferred revenues and advances from customers 375,330 299,367 Current maturities of operating leases 12,200 12,554 Debt 459,212 458,791 Accrued expenses and other liabilities 637,388 593,109 Total current liabilities 1,543,544 1,474,424 LONG-TERM LIABILITIES: Deferred revenues and advances from customers 62,123 66,289 Operating leases 67,250 92,258 Deferred tax liabilities 654 1,965 Other long-term liabilities 58,461 57,807 Total long-term liabilities 188,488 218,319 SHAREHOLDERS' EQUITY Nice Ltd's equity 3,499,895 3,589,742 Non-controlling interests - 13,421 Total shareholders' equity 3,499,895 3,603,163 TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 5,231,927 $ 5,295,906 NICE LTD. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME U.S. dollars in thousands (except per share amounts) Quarter ended March 31, 2025 2024 Unaudited Unaudited Revenue: Cloud $ 526,323 $ 468,406 Services 140,203 148,913 Product 33,666 41,990 Total revenue 700,192 659,309 Cost of revenue: Cloud 179,474 169,978 Services 46,243 46,086 Product 6,363 6,605 Total cost of revenue 232,080 222,669 Gross profit 468,112 436,640 Operating expenses: Research and development, net 89,102 87,832 Selling and marketing 161,434 155,015 General and administrative 69,407 72,354 Total operating expenses 319,943 315,201 Operating income 148,169 121,439 Financial and other income, net (15,850 ) (14,009 ) Income before tax 164,019 135,448 Taxes on income 34,729 29,075 Net income $ 129,290 $ 106,373 Earnings per share: Basic $ 2.04 $ 1.68 Diluted $ 2.01 $ 1.60 Weighted average shares outstanding: Basic 63,354 63,278 Diluted 64,368 66,528 NICE LTD. AND SUBSIDIARIES CONSOLIDATED CASH FLOW STATEMENTS U.S. dollars in thousands Quarter ended March 31, 2025 2024 Unaudited Unaudited Operating Activities Net income $ 129,290 $ 106,373 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 43,441 51,760 Share-based compensation 43,337 44,404 Amortization of premium and discount and accrued interest on marketable securities (2,275 ) (1,232 ) Deferred taxes, net (21,537 ) 4,366 Changes in operating assets and liabilities: Trade Receivables, net 4,678 8,137 Prepaid expenses and other current assets 28,555 8,761 Operating lease right-of-use assets 5,897 3,281 Trade payables (53,291 ) (10,763 ) Accrued expenses and other current liabilities 49,518 (2,868 ) Deferred revenue 69,574 45,539 Operating lease liabilities (10,189 ) (3,800 ) Amortization of discount on long-term debt 421 549 Other (2,348 ) (17 ) Net cash provided by operating activities 285,071 254,490 Investing Activities Purchase of property and equipment (3,667 ) (10,521 ) Purchase of Investments (49,454 ) (331,122 ) Proceeds from sales of marketable investments 58,358 516,150 Capitalization of internal use software costs (16,766 ) (15,936 ) Payments for business acquisitions, net of cash acquired (36,466 ) - Net cash provided by (used in) investing activities (47,995 ) 158,571 Financing Activities Proceeds from issuance of shares upon exercise of options 675 1,792 Purchase of treasury shares (252,329 ) (41,515 ) Dividends paid to noncontrolling interest - (2,681 ) Repayment of debt - (87,435 ) Net cash used in financing activities (251,654 ) (129,839 ) Effect of exchange rates on cash and cash equivalents 1,147 (1,939 ) Net change in cash, cash equivalents and restricted cash (13,431 ) 281,283 Cash, cash equivalents and restricted cash, beginning of period $ 485,032 $ 513,314 Cash, cash equivalents and restricted cash, end of period $ 471,601 $ 794,597 Reconciliation of cash, cash equivalents and restricted cash reported in the consolidated balance sheet: Cash and cash equivalents $ 469,532 $ 793,078 Restricted cash included in other current assets $ 2,069 $ 1,519 Total cash, cash equivalents and restricted cash shown in the statement of cash flows $ 471,601 $ 794,597 NICE LTD. AND SUBSIDIARIES RECONCILIATION OF GAAP TO NON-GAAP RESULTS U.S. dollars in thousands (except per share amounts) Quarter ended March 31, 2025 2024 GAAP revenues $ 700,192 $ 659,309 Non-GAAP revenues $ 700,192 $ 659,309 GAAP cost of revenue $ 232,080 $ 222,669 Amortization of acquired intangible assets on cost of cloud (15,403 ) (25,367 ) Amortization of acquired intangible assets on cost of product - (260 ) Cost of cloud revenue adjustment (1,2) (3,178 ) (3,002 ) Cost of services revenue adjustment (1) (2,455 ) (2,378 ) Cost of product revenue adjustment (1) (22 ) (30 ) Non-GAAP cost of revenue $ 211,022 $ 191,632 GAAP gross profit $ 468,112 $ 436,640 Gross profit adjustments 21,058 31,037 Non-GAAP gross profit $ 489,170 $ 467,677 GAAP operating expenses $ 319,943 $ 315,201 Research and development (1,2) (4,693 ) (8,143 ) Sales and marketing (1,2) (15,414 ) (14,172 ) General and administrative (1,2) (19,558 ) (19,831 ) Amortization of acquired intangible assets (4,693 ) (5,239 ) Valuation adjustment on acquired deferred commission - 15 Non-GAAP operating expenses $ 275,585 $ 267,831 GAAP financial and other income, net $ (15,850 ) $ (14,009 ) Amortization of discount on debt (421 ) (549 ) Change in fair value of contingent consideration - (44 ) Non-GAAP financial and other income, net $ (16,271 ) $ (14,602 ) GAAP taxes on income $ 34,729 $ 29,075 Tax adjustments re non-GAAP adjustments 10,093 13,816 Non-GAAP taxes on income $ 44,822 $ 42,891 GAAP net income $ 129,290 $ 106,373 Amortization of acquired intangible assets 20,096 30,866 Valuation adjustment on acquired deferred commission - (15 ) Share-based compensation (1) 44,925 45,644 Acquisition related and other expenses (2) 395 1,912 Amortization of discount on debt 421 549 Change in fair value of contingent consideration - 44 Tax adjustments re non-GAAP adjustments (10,093 ) (13,816 ) Non-GAAP net income $ 185,034 $ 171,557 GAAP diluted earnings per share $ 2.01 $ 1.60 Non-GAAP diluted earnings per share $ 2.87 $ 2.58 Shares used in computing GAAP diluted earnings per share 64,368 66,528 Shares used in computing non-GAAP diluted earnings per share 64,368 66,528 NICE LTD. AND SUBSIDIARIES RECONCILIATION OF GAAP TO NON-GAAP RESULTS (continued) U.S. dollars in thousands (1) Share-based compensation Quarter ended March 31, 2025 2024 Cost of cloud revenue $ 3,178 $ 2,940 Cost of services revenue 2,455 2,378 Cost of product revenue 22 30 Research and development 4,693 7,813 Sales and marketing 15,414 13,529 General and administrative 19,163 18,954 $ 44,925 $ 45,644 (2) Acquisition related and other expenses Quarter ended March 31, 2025 2024 Cost of cloud revenue $ - $ 62 Research and development - 330 Sales and marketing - 643 General and administrative 395 877 $ 395 $ 1,912 NICE LTD. AND SUBSIDIARIES RECONCILIATION OF GAAP NET INCOME TO NON-GAAP EBITDA U.S. dollars in thousands Quarter ended March 31, 2025 2024 Unaudited Unaudited GAAP net income $ 129,290 $ 106,373 Non-GAAP adjustments: Depreciation and amortization 43,441 51,760 Share-based compensation 43,337 44,404 Financial and other income, net (15,850 ) (14,009 ) Acquisition related and other expenses 395 1,912 Valuation adjustment on acquired deferred commission - (15 ) Taxes on income 34,729 29,075 Non-GAAP EBITDA $ 235,342 $ 219,500 NICE LTD. AND SUBSIDIARIES NON-GAAP RECONCILIATION - FREE CASH FLOW FROM CONTINUING OPERATIONS U.S. dollars in thousands Quarter ended March 31, 2025 2024 Unaudited Unaudited Free cash flow (a) Net cash provided by operating activities $ 285,071 $ 254,490 Purchase of property and equipment (3,667 ) (10,521 ) Capitalization of internal use software costs (16,766 ) (15,936 ) Free Cash Flow $ 264,638 $ 228,033 (a) Free cash flow from continuing operations is defined as operating cash flows from continuing operations less capital expenditures of the continuing operations and less capitalization of internal use software costs. View source version on Contacts Investor Relations Contact Marty Cohen, +1 551 256 5354, ir@ ETOmri Arens, +972 3 763-0127, ir@ CET Corporate Media ContactChristopher Irwin-Dudek, +1 201 561 4442, media@ ET
Business Wire
15-05-2025
- Business
- Business Wire
NICE Reports 12% Year-Over-Year Cloud Revenue Growth for the First Quarter 2025 and Raises Full-Year 2025 EPS Guidance
BUSINESS WIRE)-- NICE (NASDAQ: NICE) today announced results for the first quarter ended March 31, 2025, as compared to the corresponding periods of the previous year. First Quarter 2025 Financial Highlights 'We're pleased to report another strong quarter. Cloud revenue grew 12% in the first quarter compared to the same period last year, powering continued profitability, including a further expansion in operating margin and a double-digit increase in earnings per share," said Scott Russell, CEO of NICE. 'We also delivered record quarterly cash flow in Q1, with cash from operations rising to $285 million—a 12% year-over-year increase. Our industry-leading financial profile continues to differentiate us from competitors, giving us excellent financial flexibility to invest strategically to accelerate our long-term growth.' Mr. Russell added, 'We're operating in a rapidly evolving market, and AI is the catalyst driving this transformation. We're leading the way with our industry-defining AI platform, CXone Mpower. As organizations increasingly seek to leverage AI in their customer service operations, they're turning to our CX AI cloud platform. In fact, in the first quarter, our AI and self-service revenue increased 39% year over year — clear evidence of the value of our platform. We've moved beyond orchestrating interactions; we're enabling end-to-end automation from intent to resolution, powered by agentic AI embedded throughout the customer service journey.' GAAP Financial Highlights for the First Quarter Ended March 31: Revenues: First quarter 2025 total revenues increased 6% year over year to $700.2 million compared to $659.3 million for the first quarter of 2024. Gross Profit: First quarter 2025 gross profit was $468.1 million compared to $436.6 million for the first quarter of 2024. First quarter 2025 gross margin was 66.9% compared to 66.2% for the first quarter of 2024. Operating Income: First quarter 2025 operating income increased 22% to $148.2 million compared to $121.4 million for the first quarter of 2024. First quarter 2025 operating margin was 21.2% compared to 18.4% for the first quarter of 2024. Net Income: First quarter 2025 net income increased 22% to $129.3 million compared to $106.4 million for the first quarter of 2024. First quarter 2025 net income margin was 18.5% compared to 16.1% for the first quarter of 2024. Fully Diluted Earnings Per Share: Fully diluted earnings per share for the first quarter of 2025 increased 26% to $2.01 compared to $1.60 in the first quarter of 2024. Cash Flow and Cash Balance: First quarter 2025 operating cash flow was $285.1 million and $252.3 million was used for share repurchases. As of March 31, 2025, total cash and cash equivalents, and short-term investments were $1,610.7 million. Our debt, was $459.2 million, resulting in net cash and investments of $1,151.5 million. Non-GAAP Financial Highlights for the First Quarter March 31: Revenues: First quarter 2025 total revenues increased 6% year over year to $700.2 million compared to $659.3 million for the first quarter of 2024. Gross Profit: First quarter 2025 non-GAAP gross profit increased to $489.2 million compared to $467.7 million for the first quarter of 2024. First quarter 2025 non-GAAP gross margin was 69.9% compared to 70.9% for the first quarter of 2024. Operating Income: First quarter 2025 non-GAAP operating income increased 7% to $213.6 million compared to $199.8 million for the first quarter of 2024. First quarter 2025 non-GAAP operating margin was 30.5% compared to 30.3% for the first quarter of 2024. Net Income: First quarter 2025 non-GAAP net income increased 8% to $185.0 million compared to $171.6 million for the first quarter of 2024. First quarter 2025 non-GAAP net income margin totaled 26.4% compared to 26.0% for the first quarter of 2024. Fully Diluted Earnings Per Share: First quarter 2025 non-GAAP fully diluted earnings per share increased 11% to $2.87 compared to $2.58 for the first quarter of 2024. Second Quarter and Full Year 2025 Guidance: Second-Quarter 2025: Second-quarter 2025 non-GAAP total revenue is expected to be in a range of $709 million to $719 million, representing 7% year over year growth at the midpoint. Second-quarter 2025 non-GAAP fully diluted earnings per share is expected to be in a range of $2.93 to $3.03, representing 13% year over year growth at the midpoint. Full-Year 2025: The Company reiterated full-year 2025 non-GAAP total revenue which is expected to be in a range of $2,918 million to $2,938 million, representing 7% year over year growth at the midpoint. The Company increased full-year 2025 non-GAAP fully diluted earnings per share which is expected to be in a range of $12.28 to $12.48, representing 11% year over year growth at the midpoint. Quarterly Results Conference Call NICE management will host its earnings conference call today, May 15, 2025, at 8:30 AM ET, 13:30 GMT, 15:30 Israel, to discuss the results and the company's outlook. A live webcast and replay will be available on the Investor Relations page of the Company's website. To access, please register by clicking here: Explanation of Non-GAAP measures Non-GAAP financial measures are included in this press release. Non-GAAP financial measures consist of GAAP financial measures adjusted to exclude share-based compensation, amortization of acquired intangible assets, acquisition related and other expenses, amortization of discount on debt and the tax effect of the Non-GAAP adjustments. The Company believes that these Non-GAAP financial measures, used in conjunction with the corresponding GAAP measures, provide investors with useful supplemental information about the financial performance of our business. We believe Non-GAAP financial measures are useful to investors as a measure of the ongoing performance of our business. Our management regularly uses our supplemental Non-GAAP financial measures internally to understand, manage and evaluate our business and to make financial, strategic and operating decisions. These Non-GAAP measures are among the primary factors management uses in planning for and forecasting future periods. Our Non-GAAP financial measures are not meant to be considered in isolation or as a substitute for comparable GAAP measures and should be read only in conjunction with our consolidated financial statements prepared in accordance with GAAP. These Non-GAAP financial measures may differ materially from the Non-GAAP financial measures used by other companies. Reconciliation between results on a GAAP and Non-GAAP basis is provided in a table immediately following the Consolidated Statements of Income. The Company provides guidance only on a Non-GAAP basis. A reconciliation of guidance from a GAAP to Non-GAAP basis is not available due to the unpredictability and uncertainty associated with future events that would be reported in GAAP results and would require adjustments between GAAP and Non-GAAP financial measures, including the impact of future possible business acquisitions. Accordingly, a reconciliation of the guidance based on Non-GAAP financial measures to corresponding GAAP financial measures for future periods is not available without unreasonable effort. Company Announces New Share Buyback Program of $500 million: The Board of Directors has authorized an additional new $500 million share repurchase program. Repurchases under the program may be made from time to time using a variety of methods, which may include open market purchases, privately negotiated transactions or otherwise, all in accordance with U.S. securities laws and regulations, including Rule 10b-18 under the U.S. Securities Exchange Act of 1934, as amended (the 'Exchange Act'). The Company may also, from time to time, enter into plans that are compliant with Rule 10b5-1 of the Exchange Act to facilitate repurchases of its shares under this authorization. The timing and total amount of share repurchases will depend upon business, economic and market conditions, corporate and regulatory requirements, prevailing share prices and other considerations. This program does not obligate the Company to acquire any particular amount of ordinary shares and the program may be extended, modified, suspended or discontinued at any time at the Company's discretion. The Company expects to fund repurchases with cash on hand and future cash generated from its operations. About NICE With NICE (Nasdaq: NICE), it's never been easier for organizations of all sizes around the globe to create extraordinary customer experiences while meeting key business metrics. Featuring the world's #1 cloud native customer experience platform, CXone, NICE is a worldwide leader in AI-powered self-service and agent-assisted CX software for the contact center – and beyond. Over 25,000 organizations in more than 150 countries, including over 85 of the Fortune 100 companies, partner with NICE to transform - and elevate - every customer interaction. Trademark Note: NICE and the NICE logo are trademarks or registered trademarks of NICE. All other marks are trademarks of their respective owners. For a full list of NICE trademarks, please see: Forward-Looking Statements This press release contains forward-looking statements as that term is defined in the Private Securities Litigation Reform Act of 1995. In some cases, forward-looking statements may be identified by words such as 'believe', 'expect', 'seek', 'may', 'will', 'intend', 'should', 'project', 'anticipate', 'plan', and similar expressions. Forward-looking statements are based on the current beliefs, expectations and assumptions of the Company's management regarding the future of the Company's business, performance, future plans and strategies, projections, anticipated events and trends, the economic environment, and other future conditions. Examples of forward-looking statements include guidance regarding the Company's revenue and earnings and the growth of our cloud, analytics and artificial intelligence business. Forward looking statements are inherently subject to significant uncertainties, contingencies, and risks, including, economic, competitive and other factors, which are difficult to predict and many of which are beyond the control of management. The Company cautions that these statements are not guarantees of future performance, and investors should not place undue reliance on them. There are or will be important known and unknown factors and uncertainties that could cause actual results to differ materially from those expressed or implied in the forward-looking statements. These factors, include, but are not limited to, risks associated with changes in economic and business conditions, competition, successful execution of the Company's growth strategy, success and growth of the Company's cloud Software-as-a-Service business, difficulties in making additional acquisitions or effectively integrating acquired operations, products, technologies and personnel, the Company's dependency on third-party cloud computing platform providers, hosting facilities and service partners, rapid changes in technology and market requirements, the implementation of AI capabilities in certain products and services; decline in demand for the Company's products; inability to timely develop and introduce new technologies, products and applications, loss of market share, cyber security attacks or other security incidents, privacy concerns and legislation impacting the Company's business, changes in currency exchange rates and interest rates, the effects of additional tax liabilities resulting from our global operations, the effect of unexpected events or geo-political conditions, including those arising from political instability or armed conflict that may disrupt our business and the global economy, our ability to recruit and retain qualified personnel, the effect of newly enacted or modified laws, regulation or standards on the Company and our products, and various other factors and uncertainties discussed in our filings with the U.S. Securities and Exchange Commission (the 'SEC'). You are encouraged to carefully review the section entitled 'Risk Factors' in our latest Annual Report on Form 20-F and our other filings with the SEC for additional information regarding these and other factors and uncertainties that could affect our future performance. The forward-looking statements contained in this press release speak only as of the date hereof, and the Company undertakes no obligation to update or revise them, whether as a result of new information, future developments or otherwise, except as required by law. NICE LTD. AND SUBSIDIARIES U.S. dollars in thousands (except per share amounts) Quarter ended March 31, 2025 2024 Unaudited Unaudited Revenue: Cloud $ 526,323 $ 468,406 Services 140,203 148,913 Product 33,666 41,990 Total revenue 700,192 659,309 Cost of revenue: Cloud 179,474 169,978 Services 46,243 46,086 Product 6,363 6,605 Total cost of revenue 232,080 222,669 Gross profit 468,112 436,640 Operating expenses: Research and development, net 89,102 87,832 Selling and marketing 161,434 155,015 General and administrative 69,407 72,354 Total operating expenses 319,943 315,201 Operating income 148,169 121,439 Financial and other income, net (15,850 ) (14,009 ) Income before tax 164,019 135,448 Taxes on income 34,729 29,075 Net income $ 129,290 $ 106,373 Earnings per share: Basic $ 2.04 $ 1.68 Diluted $ 2.01 $ 1.60 Weighted average shares outstanding: Basic 63,354 63,278 Diluted 64,368 66,528 Expand NICE LTD. AND SUBSIDIARIES CONSOLIDATED CASH FLOW STATEMENTS U.S. dollars in thousands Quarter ended March 31, 2025 2024 Unaudited Unaudited Operating Activities Net income $ 129,290 $ 106,373 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 43,441 51,760 Share-based compensation 43,337 44,404 Amortization of premium and discount and accrued interest on marketable securities (2,275 ) (1,232 ) Deferred taxes, net (21,537 ) 4,366 Changes in operating assets and liabilities: Trade Receivables, net 4,678 8,137 Prepaid expenses and other current assets 28,555 8,761 Operating lease right-of-use assets 5,897 3,281 Trade payables (53,291 ) (10,763 ) Accrued expenses and other current liabilities 49,518 (2,868 ) Deferred revenue 69,574 45,539 Operating lease liabilities (10,189 ) (3,800 ) Amortization of discount on long-term debt 421 549 Other (2,348 ) (17 ) Net cash provided by operating activities 285,071 254,490 Investing Activities Purchase of property and equipment (3,667 ) (10,521 ) Purchase of Investments (49,454 ) (331,122 ) Proceeds from sales of marketable investments 58,358 516,150 Capitalization of internal use software costs (16,766 ) (15,936 ) Payments for business acquisitions, net of cash acquired (36,466 ) - Net cash provided by (used in) investing activities (47,995 ) 158,571 Financing Activities Proceeds from issuance of shares upon exercise of options 675 1,792 Purchase of treasury shares (252,329 ) (41,515 ) Dividends paid to noncontrolling interest - (2,681 ) Repayment of debt - (87,435 ) Net cash used in financing activities (251,654 ) (129,839 ) Effect of exchange rates on cash and cash equivalents 1,147 (1,939 ) Net change in cash, cash equivalents and restricted cash (13,431 ) 281,283 Cash, cash equivalents and restricted cash, beginning of period $ 485,032 $ 513,314 Cash, cash equivalents and restricted cash, end of period $ 471,601 $ 794,597 Reconciliation of cash, cash equivalents and restricted cash reported in the consolidated balance sheet: Cash and cash equivalents $ 469,532 $ 793,078 Restricted cash included in other current assets $ 2,069 $ 1,519 Total cash, cash equivalents and restricted cash shown in the statement of cash flows $ 471,601 $ 794,597 Expand NICE LTD. AND SUBSIDIARIES U.S. dollars in thousands (except per share amounts) Quarter ended March 31, 2025 2024 GAAP revenues $ 700,192 $ 659,309 Non-GAAP revenues $ 700,192 $ 659,309 GAAP cost of revenue $ 232,080 $ 222,669 Amortization of acquired intangible assets on cost of cloud (15,403 ) (25,367 ) Amortization of acquired intangible assets on cost of product - (260 ) Cost of cloud revenue adjustment (1,2) (3,178 ) (3,002 ) Cost of services revenue adjustment (1) (2,455 ) (2,378 ) Cost of product revenue adjustment (1) (22 ) (30 ) Non-GAAP cost of revenue $ 211,022 $ 191,632 GAAP gross profit $ 468,112 $ 436,640 Gross profit adjustments 21,058 31,037 Non-GAAP gross profit $ 489,170 $ 467,677 GAAP operating expenses $ 319,943 $ 315,201 Research and development (1,2) (4,693 ) (8,143 ) Sales and marketing (1,2) (15,414 ) (14,172 ) General and administrative (1,2) (19,558 ) (19,831 ) Amortization of acquired intangible assets (4,693 ) (5,239 ) Valuation adjustment on acquired deferred commission - 15 Non-GAAP operating expenses $ 275,585 $ 267,831 GAAP financial and other income, net $ (15,850 ) $ (14,009 ) Amortization of discount on debt (421 ) (549 ) Change in fair value of contingent consideration - (44 ) Non-GAAP financial and other income, net $ (16,271 ) $ (14,602 ) GAAP taxes on income $ 34,729 $ 29,075 Tax adjustments re non-GAAP adjustments 10,093 13,816 Non-GAAP taxes on income $ 44,822 $ 42,891 GAAP net income $ 129,290 $ 106,373 Amortization of acquired intangible assets 20,096 30,866 Valuation adjustment on acquired deferred commission - (15 ) Share-based compensation (1) 44,925 45,644 Acquisition related and other expenses (2) 395 1,912 Amortization of discount on debt 421 549 Change in fair value of contingent consideration - 44 Tax adjustments re non-GAAP adjustments (10,093 ) (13,816 ) Non-GAAP net income $ 185,034 $ 171,557 GAAP diluted earnings per share $ 2.01 $ 1.60 Non-GAAP diluted earnings per share $ 2.87 $ 2.58 Shares used in computing GAAP diluted earnings per share 64,368 66,528 Expand NICE LTD. AND SUBSIDIARIES U.S. dollars in thousands Quarter ended March 31, 2025 2024 Unaudited Unaudited GAAP net income $ 129,290 $ 106,373 Non-GAAP adjustments: Depreciation and amortization 43,441 51,760 Share-based compensation 43,337 44,404 Financial and other income, net (15,850 ) (14,009 ) Acquisition related and other expenses 395 1,912 Valuation adjustment on acquired deferred commission - (15 ) Taxes on income 34,729 29,075 Non-GAAP EBITDA $ 235,342 $ 219,500 Expand NICE LTD. AND SUBSIDIARIES NON-GAAP RECONCILIATION - FREE CASH FLOW FROM CONTINUING OPERATIONS U.S. dollars in thousands Quarter ended March 31, 2025 2024 Unaudited Unaudited Free cash flow (a) Net cash provided by operating activities $ 285,071 $ 254,490 Purchase of property and equipment (3,667 ) (10,521 ) Capitalization of internal use software costs (16,766 ) (15,936 ) Free Cash Flow $ 264,638 $ 228,033 Expand (a) Free cash flow from continuing operations is defined as operating cash flows from continuing operations less capital expenditures of the continuing operations and less capitalization of internal use software costs. Expand
Yahoo
12-05-2025
- Business
- Yahoo
ZAC recognized as Trailblazer in Artificial Intelligence (AI) with innovative breakthroughs in Explainable AI (XAI)
POTOMAC, Md., May 12, 2025 /PRNewswire/ -- Z Advanced Computing, Inc. (ZAC), the pioneer Cognitive Explainable-AI (Artificial Intelligence) (Cognitive XAI or CXAI) software startup, has been recognized as Trailblazer in Artificial Intelligence (AI) with innovative breakthroughs in Explainable-AI (XAI) by "Investors Hangout" ( Mar-26-2025, titled "Z Advanced Computing: Pioneering AI Solutions"). Cognitive Explainable AI (CXAI) algorithms enable training the machine with just a few training samples, marking a significant milestone in both AI and machine learning (ML). This places ZAC among the top AI technologies and algorithms recognized globally. Since 2011, ZAC team has pushed the boundaries of what is possible with AI. ZAC work involves Concept-Learning, a groundbreaking algorithm which has remarkable efficiency for machine learning, which is a significant development in AI technology, impacting every industry (e.g., Autonomous Driving and Biotech/Medical applications). ZAC has demonstrated its tech, e.g., in projects for US Air Force (USAF) (Aerial Images) and Bosch/ BSH (Smart Appliances). "As far as I know, we are the only company or group in the world that can do the AI training with typically 5 to 50 training samples," said Dr. Bijan Tadayon, CEO of ZAC. ZAC owns a very strong IP portfolio with over 450 inventions, including 14 issued US patents. ZAC has an impressive team of scientists and developers. The development is headed by Dr. Saied Tadayon, a scientist, veteran software developer, and math prodigy, who ranked 1st as an undergrad at Cornell and got his PhD in Electrical Engineering from Cornell at age 23 (the youngest). ZAC world-renowned advisors include Prof. David Lee (Nobel Laureate, Physics), Prof. Mory Gharib (former Caltech Vice Provost of Research), Prof. Gholam Peyman, MD (Inventor of LASIK; and awarded National Medal of Technology and Innovation by US President), late Prof. Robert Buhrman (former Cornell Sr. Vice Provost of Research), Prof. Mike Spencer (former Cornell Associate Dean of Engineering for Research), and Prof. Mo Jamshidi (UTSA, former Founding Dir. of NASA Center for Autonomous Control; and US Army Science Board). The late Prof. Lotfi Zadeh of UC Berkeley ("Father of Fuzzy Logic"; co-inventor of Z-Transform; and AI Hall-of-Fame) is also one of ZAC inventors. Some applications of ZAC Tech are: autonomous vehicles, satellite/aerial images, security/biometrics, medical imaging, drug discovery, e-commerce/ads, manufacturing/defect detection, and smart cities/homes/appliances. Contact: Z Advanced Computing, Inc. (ZAC)Tel.: 301-294-0434media@ View original content to download multimedia: SOURCE Z Advanced Computing, Inc.
