NICE’s Best Estimates for Q1 Earnings, Cloud Revenue Drives Revenue

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NICENICE’s first-quarter 2022 adjusted earnings of $1.80 per share beat Zacks’ consensus estimate by 5.88% and rose 16.9% year-over-year.

Non-GAAP revenue of $527.4 million exceeded the consensus mark of 3.29% and was up 15.4% year-over-year.

Revenue in the Americas was $426 million, up 14% year-over-year. Revenue in EMEA was $72 million in the current quarter, up 29%. APAC revenue grew 7% year-over-year to $29 million.

Front line details

Cloud revenue (55.9% of revenue) increased 29.2% year over year to $294.6 million. Product revenue (14.4% of revenue) increased 16.4% from the prior year quarter to $75.9 million.

Good price, consensus and surprise EPS

Nice price-consensus-eps-surprise-chart | Beautiful quote

Services revenue (29.8% of revenue) decreased 3% from the prior year quarter to $157 million.

Customer Engagement revenue grew 14% year-over-year to $421 million. Financial Crime & Compliance revenue increased 20% year over year to $106 million.

On a non-GAAP basis, gross margin was flat at 73% in the current quarter. The product margin contracted by 80 basis points (bps) to 91.6% in the current quarter. The services margin increased slightly by 20 basis points to 72.2%.

Cloud margin increased 100 basis points year over year to 68.6%.

Research and development (R&D) spending, as a percentage of revenue, rose 150 basis points year-over-year to 14.5%. Sales and marketing (S&M) expenses, as a percentage of revenue, increased 70 basis points to 28.9%.

General and administrative (G&A) expenses, as a percentage of revenue, decreased by 50 basis points on an annual basis to 11.2%.

On a non-GAAP basis, operating expenses as a percentage of revenue increased 10 basis points year over year to 44.8%.

The operating margin increased by 10 basis points on an annual basis to 28.3%.

Balance sheet and other details

As of March 31, 2022, NICE had cash and cash equivalents (including short-term investments) worth $1.49 billion.

Long-term debt, as of March 31, 2022, was $241.1 million.

The company’s operating cash flow in the first quarter was $192.7 million.

Orientation

For the second quarter of 2022, NICE projects non-GAAP revenue between $520 million and $530 million. Non-GAAP earnings are estimated in the range of $1.75 to $1.85 per share.

For the year 2022, non-GAAP revenue is expected between $2.16 billion and $2.18 billion. Non-GAAP earnings are expected between $7.25 and $7.45 per share.

Zacks ranking and key picks

NICE currently carries a Zacks Rank #3 (Hold).

The highest-ranking stocks in the broader Zacks Computer and Technology sector are Analog devices ADI, Broadcom AVGO and Cisco Systems CSCO. All three stocks carry a Zacks rank of No. 2 (buy). You can see the full list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Shares of Analog Devices have outperformed the sector year-to-date, down 10.3%.

ADI is expected to release its second quarter fiscal 2022 results on May 18.

Broadcom shares have outperformed the sector year-to-date, down 12.3%.

AVGO is expected to report its second quarter fiscal 2022 results on June 2.

Shares of Cisco have outperformed the sector year-to-date, down 22.1%.

CSCO is scheduled to release its third quarter fiscal 2022 results on May 18.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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