NICE Ltd (NASDAQ: NICE), a leading provider of cloud-based solutions for customer experience, analytics, and compliance, announced its second-quarter financial results for fiscal year 2023 on Thursday. The company reported a 10% year-over-year increase in non-GAAP revenue, beating the analysts’ expectations. NICE also raised its outlook for the full year, reflecting its strong performance and growth prospects.
Cloud Revenue Grows 23%, Driven By Digital Transformation
One of the key highlights of NICE’s Q2 earnings report was the impressive growth of its cloud revenue, which rose 23% year-over-year to $381.9 million. This segment accounted for 66% of the total revenue, up from 60% in the same quarter last year. The cloud gross margin also improved by 20 basis points to 70.3%.
NICE attributed the strong cloud growth to the increased demand for its CXone platform, which offers a comprehensive suite of cloud-based solutions for customer experience management. The company said that it saw a 70% growth in digital bookings and a record bookings quarter for Enlighten, its artificial intelligence (AI) foundation that underlies the entire CXone platform.
The company also cited the ongoing digital transformation trend as a key driver of its cloud business, as more organizations seek to enhance their customer interactions and operational efficiency through cloud-based technologies. NICE said that it has been able to capitalize on this opportunity by offering innovative and scalable solutions that address the evolving needs of its customers.
Non-GAAP EPS Beats Estimates, Operating Cash Flow Increases
NICE also reported a 15% year-over-year increase in its non-GAAP net income, which reached $141.5 million in Q2. The non-GAAP earnings per share (EPS) was $2.13, beating the consensus estimate of $2.06. The company said that its non-GAAP operating margin was 29.2%, slightly higher than the 29% margin in the same quarter last year.
The company also generated $65.3 million in operating cash flow in Q2, up from $60.8 million in Q1. The company ended the quarter with $1.66 billion in cash and cash equivalents, compared to $1.59 billion at the end of Q1.
Outlook For FY23 Raised, Reflecting Confidence In Growth Strategy
NICE also raised its guidance for the full fiscal year 2023, reflecting its confidence in its growth strategy and market position. The company now expects its non-GAAP total revenue to be in the range of $2.353 billion to $2.373 billion, up from the previous range of $2.35 billion to $2.37 billion. The consensus estimate for FY23 revenue is $2.37 billion.
The company also increased its non-GAAP EPS guidance for FY23, from the previous range of $8.32 to $8.52 to the new range of $8.40 to $8.60. The consensus estimate for FY23 EPS is $8.44.
For the third quarter of FY23, NICE expects its non-GAAP total revenue to be in the range of $590 million to $600 million, and its non-GAAP EPS to be in the range of $2.10 to $2.20. The consensus estimates for Q3 revenue and EPS are $595.32 million and $2.13, respectively.
CEO Comments On Q2 Results And Future Outlook
Barak Eilam, CEO of NICE, commented on the Q2 results and the future outlook of the company in a press release. He said:
“We are pleased with our strong second quarter results which reflect our continued execution and momentum across our business segments…Supported by a robust capital structure and industry-best profitability, our investments continue to deliver results highlighted by 70% growth in digital bookings and a record bookings quarter for Enlighten, our AI foundation, that underlies the entire CXone platform…We are confident that our strategy positions us well to continue delivering long-term sustainable growth.”